Archive for the ‘Copyright Law – Current Issues’ Category

Apr
16

Google v. Oracle: Another Questionable Decision by the Supreme Court in the Area of Intellectual Property Law

On April 5th in Google, LLC v. Oracle America, Inc. the Supreme Court issued a 7 to 2 ruling favoring the alleged infringer of copyrighted software on fair use grounds.  Justices Thomas and Alito dissented, agreeing with the position of the Federal Circuit Court of Appeals: that Google’s use of Oracle’s copyrighted software violated the most important factor in establishing fair use – the effect of the copying on the market for the copyrighted work.  This blog discusses the decision which has created considerable consternation for the owners of registered software copyrights.  Although the commentator infrequently agrees with Justices Thomas and Alito, in this case she does.

This blog discusses the decision and its potential impact on software copyright infringement lawsuits.

A.   Why Was the Fair Use Doctrine an Issue?

       Fair use is defense used by parties accused of copyright infringement.  The Fair Use Doctrine is codified in § 107 of the Copyright Act.

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.

      In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

Google alleged that copying of nearly 11,500 lines of code from Oracle’s Java SE program  constitutes fair use.

B.  The Vexing Decision. The majority’s reasoning to find in favor of Google based on the fair use doctrine is perplexing.  Regarding the nature of the copyrighted work, the Court stated that Google’s usage of the infringing code was limited to smartphones, i.e., Google’s Android.  According to the majority, “Google, through Android, provided a new collection of tasks operating in a distinct and different computer environment.”  Why? Because was developed for use with desktop and laptop computers.    Never mind that smart phones are in essence hand-held computers as software patent law recognizes, namely that smartphones, laptops, and smartphones are indistinguishable, general purpose machines.  The Court seemed to overlook the fact that Google’s usage of the copied code is commercial to the tune of billions of dollars a year.

The Court also inexplicably focused on the amount of code Google copied, namely only 11,500 lines of the JAVA SE program, rather than the substantiality of the portion of the code.   Substantiality generally means – how important is the part of the work copied in the infringing work? In this case, the 11,500 lines of code was that portion of the Sun Java API that allowed programmers to use the task-calling system that was most useful to programmers working on applications for mobile devices.  In other words, the infringed code was essential for speeding up the development of Android apps.

Google argued that its copyright infringement was somehow justified because it “wanted millions of programmers, familiar with JAVA, to be able to easily to work with its new Android platform” and develop applications for the Android.  The Court bought this rationale of Google’s purported interest in benefitting millions of programmers who are familiar with Java as justification of its copying of the Java SE program.  According to the Court’s rationale, Google’s 3rd party beneficiary argument on behalf of “millions of developers” gave Google the unfettered right to copy Java’s code rather than negotiate a licensing agreement with Oracle.  Yet, Google intentionally and knowingly used copyrighted code to enhance its APP profile in the marketplace of mobile devices.

Perhaps the Court’s most egregious error, as the dissenting opinion asserts, was its failure to give proper consideration to factor 4, the effect of the use [of the copyrighted content] upon the potential market for or value of the copyrighted work.  In a 1985 case, Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985), the Court had held that the effect of the use upon the potential market for or value of the copyrighted work was the most important factor in a fair use analysis.  That earlier case also stood for the proposition that only 300 to 400 words of an entire Presidential memoir [or entire work] can be infringing when the value of the copyrighted work is affected by the taking. Fast forward to 2021 where the Court has effectively overturned its own precedent because clearly the “mere” 11,500 lines Google decided to use in the multi-billion dollar Android platform has without question destroyed Oracle’s ability to license.  And why should other parties now seek a license with Oracle when apparently the 11,500 lines of code are free for the taking?  Nor is Google “giving away” the infringed code.  Instead that code is contributing to Google’s bottom “Android” line.

C.    Should Software Be Copyrighted After Google v. Oracle?

First with patent law and now copyright law, the Court’s tunnel vision negatively impacts intellectual property law and the rights of inventors and creators.  The Court seems to have forgotten that the Founding Fathers recognized the importance of rewarding creativity and innovation.  It is that very creativity and innovation that has resulted in the technical advances that have been made during the past two over two hundred years including the technology so many have relied on during the pandemic including the courts.  The Founding Fathers had the idea that creators and innovators willing to spend time and money in realizing a dream should be rewarded rights such as the right to take legal action to prevent others from the unauthorized usage of a patented invention, copyrighted works, etc.  Absent action by Congress to correct the actions taken by the Court in its numerous patent law decisions including the infamous Alice and Prometheus decisions and now this Google copyright decision, that lofty idea will continue to be eroded by cynicism and bad players.

As an IP attorney, the commentator has registered software codes with the U.S. Copyright Office on behalf of clients.  After this decision, is there any point in obtaining a registered software copyright?

It is my hope that the Google decision turns out to be an aberration.  In the meantime, software developers and/or the companies they work for have the following options to protect their code:  trade secret maintenance, software registration, or a combination of the two.  Copyright registration is not costly compared to, e.g., patent procurement. Therefore, copyright registration should still be considered.  At the very least, registration is a prerequisite to commencing a copyright infringement lawsuit.  Moreover, Google relied on the argument that its actions were not really on its own behalf but on the behalf of developers which the Court bought. In the end, this disingenuous argument may well not be applicable in many situations. Nevertheless, the plaintiff in any software infringement lawsuit must be familiar with the Google decision and be prepared to thwart a fair use defense.

Intellectual property law is a complex area of the law.  Contact us at 305-279-4740 for a complimentary consultation on protecting your inventions, creative works, brands, and proprietary information through patents, copyrights, trademarks and trade secrets or our litigation services involving intellectual property disputes.   We represent both individuals and business entities.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Services Creed:  Conscientious, Rigorous, Energic, Empathetic, and Diligent legal services. 

                       THANK YOU FOR YOUR INTEREST IN THIS BLOG. HOWEVER, IT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.  

 

© 2021 by Troy & Schwartz, LLC

 

Apr
03

COPYRIGHT INFRINGEMENT OF CONTENT EMANATING FROM INTERNET RSS FEEDS

In MidlevelU, Inc. v. ACI Information Group, Case No. 20-10856 (11th Cir. Mar. 3, 2021) (Pryor, J.), the Eleventh Circuit Court of Appeals addressed copyright infringement issues involving Internet technology.  The case originated in the Southern District Court of South Florida, a court which is likely to increasingly be the venue for “high tech” intellectual property cases as a result of the influx of technology companies to South Florida.  The case is of interest because: 1) it involved an implied license defense in the context of RSS feeds; and 2) the issue as to whether non-registered works could be considered in determining statutory damages for registered works.

Case Background

MidlevelU published a free blog designed to attract potential customers in the midlevel healthcare market. MidlevelU made the full text of its blog articles (instead of only headlines and article summaries) available in an RSS feed. ACI is a content aggregator that subscribed to the blog’s RSS feed. ACI copied and published more than 800 entries from MidlevelU’s blog by including those articles in a curated index of abstracts and full-text articles of academic blogs. ACI had no license agreement with MidlevelU.

After discovering the ACI’s activities, MidlevelU registered 50 of its most recent articles for copyright protection with the US Copyright Office. Registration of a copyrighted work is a prerequisite for a commencing a copyright infringement lawsuit in all federal courts since the Supreme Court’s March 2019 holding in Fourth Estate Public Benefit Corp. v. Wall-Street.com.   MidlevelU also sent ACI a cease-and-desist letter demanding that its content be removed from ACI’s index. ACI removed the content from the index and coded links to index entries for MidlevelU’s articles so that they would redirect to the MidlevelU’s website. Months later, MidlevelU discovered that, although its content was no longer available on the index website, it still appeared in the website repositories of university libraries. These entries credited ACI as the content’s publisher and directed visitors to view the blog’s full-text content in the “subscribers only” section of the blog aggregator’s (ACI’s) website.

MidlevelU sued ACI in the Southern District of Florida alleging copyright infringement of the registered articles. ACI asserted an implied-license defense.  Under the implied license doctrine, the alleged infringer argues that he had permission to use the copyrighted material even though there is no clear contract; a license may be implied where a judge or jury believes that the opposing parties would have made a contract if they turned their minds to it.  Copyright law has adopted a similar approach in terms of licenses to use a copyright work if it seems like the parties would have created a license under the circumstances. An implied license, if it exists, must, by definition, be non-exclusive because U.S. copyright law requires exclusive licenses to be in writing.

The 11th Circuit’s Holding

The Eleventh Circuit affirmed the district court’s grant of judgment as a matter of law against an alleged copyright infringer on its implied-license defense, finding that a blog operator’s publication of entire articles through a really simple syndication (RSS) feed does not give rise to an implied license without substantial evidence showing an intent to grant a license.  The decision is of interest because of its a discussion of Latimer v. Roaring Toyz, Inc. , a 2010 decision by the 11th Circuit, which set forth a test for establishing implied licenses in work-for-hire situations.  Relying on Latimer, the district court had concluded that ACI did not have an implied license.

The 11th Circuit found that the district court read Latimer too broadly by applying its holding outside of the work-for-hire context, but the Court nevertheless affirmed the district court’s decision because a jury could not have reasonably inferred from the evidence that the MidlevelU impliedly granted a license to ACI. The Court noted that it had never held that the Latimer test was the only way to prove an implied license. An implied license may arise from circumstances outside of work-for-hire situations: “Creating material at another’s request is not the essence of a license: an owner’s grant of permission to use the material is.”

ACI’s arguments to try and establish an implied license were found to be disingenuous because only when an owner clearly manifests consent to use copyrighted material is a non-exclusive implied license created.  Citing Field v. Google, Inc., a 2006 Nevada district court which involved copyright infringement allegations in the search-engine web crawler context, ACI argued that an implied license arose because the MidlevelU did not code its website to tell aggregators such as itself not to copy or display its content.  In other words, ACI blamed the blogger for not proactively warning aggregators to not copy or display content.

Without deciding whether Latimer was correctly decided, the 11th Circuit rejected ACI’s theory. The Court reasoned that although the ACI relied on a “web crawler” case, it failed to produce any evidence that it actually used a web crawler to collect the blog’s content. Rather, the evidence showed that ACI collected content by grabbing it through the blog’s RSS feeds.  “Implied permission to enter through a front door (web crawler) does not also imply permission to enter through a back window (RSS feed).”

Similarly, the Court found that MidlevelU’s affirmative steps to disseminate the full text of its articles through its RSS feed—rather than only summaries or headlines—did not give rise to an implied license. ACI failed to introduce evidence of, for example, an industry practice that would allow a jury to infer that disseminating content through an RSS feed without restrictions implies permission to copy and publish that content on another website.

The only evidence before the jury related to personal use of RSS-distributed content. This evidence constituted testimony that MidlevelU set up its RSS feed to make its content easier for readers to access, and testimony that RSS is used as an alternative to a web browser to read content—i.e., an RSS feed stores the articles received from a website, and a human then reads the articles through an RSS reader. The Court rather sarcastically explained that “[i]mplied permission to enter the front door to shop (read content through an RSS reader for personal purposes) does not imply permission to enter and throw a party (sell computer-generated summaries paired with [software] showing the full-text content).”

The Court also found that the district court did not err by instructing the jury that it could consider unregistered articles in its calculation of statutory damages for the registered works; the district court did not abuse its discretion by denying the aggregator’s motion for a new trial on the basis of the jury’s statutory-damages award; the district court did not err by failing to consult with the register of copyrights about the alleged fraud on the copyright office; and aggregator is not entitled to judgment as a matter of law on its fair-use defense.

Regarding the statutory damages award which totaled over $200,000, the 11th Circuit emphasized that the hundreds of unregistered blogs could be used to support a finding of willful infringement.   Regarding the court’s failure to consult with the register of copyrights, whether or not a district court must consult with the Register of Copyrights on a matter involving the defendant’s allegations of fraud on the copyright office, the process generally requires the district court to grant the defendant’s motion to submit the matter to the copyright office.

Finally, ACI’s actions over the years hardly constituted fair use.  The Fair Use Doctrine authorizes the copying of both published and unpublished works without obtaining permission under the following “guideline” scenarios:

  • Connection with criticism or comment on the work.
  • In the course of news reporting.
  • For teaching purposes.
  • As part of scholarship or research activity.

Defendants in Internet Copyright Infringement cases often allege Fair Use as a defense as did ACI.  Each situation is evaluated on a case-by-case basis. Here, the 11th Circuit stated that “[c]opying an entire work militates against Fair Use.”  Substantial copying occurred because ACI provided substantive access to its subscribers to the full text-content of the plaintiff’s blogs through iFrames.  MidlevelU at 29.

Comments

This case is a well-deserved win for the blogger.  The courts will continue to tackle copyright infringement against the backdrop of Internet technology which makes copyright infringement easier than ever before.  It is recommended that content creators register at least some of their works within 90 days of publication so that they will be the beneficiary of certain statutory benefits including statutory damages.  Here, the plaintiff chose statutory damages in lieu of having to prove actual damages (which can be extremely difficult to do) because she had met the 90 day window.   Otherwise, she would have had to prove her actual damages.  We presume she was also awarded attorney fees and costs at least to some extent as the statute allows if the 90 day window is met.   This decision also paves the way to use unregistered works to help establish a reasonable damages for infringement of registered works especially where the infringement was willful.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

 

Intellectual property law is a complex area of the law.  Contact us for a complimentary consultation on protecting your inventions, creative works, brands, and proprietary information through patents, copyrights, trademarks and trade secrets or our litigation services involving intellectual property disputes.   We represent both individuals and business entities.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Services Creed:  Conscientious, Rigorous, Energic, Empathetic, and Diligent legal services. 

© 2021 by Troy & Schwartz, LLC

9415 SW 72nd Street, Suite 119, Miami, Florida 33176

Ph: (305) 279-4740

 

 

 

Jan
12

COPYRIGHT LAW UPDATE

THE CASE ACT OF DECEMBER 2020 CREATES A SIMPLER COPYRIGHT INFRINGEMENT CLAIMS PROCESS FOR PHOTOGRAPHERS & OTHER CREATIVES

The Copyright Alternative in Small-Claims Act (the CASE Act) became law on Dec. 27, 2020 and is a welcome alternative to expensive federal court lawsuits by individual creators and small businesses (Creators) across the country who all too frequently have their copyrighted works infringed.   Prior to the Act, all copyright right infringement claims had to be brought in federal court, effectively discouraging many Creators from suing infringers due to the high costs involved.  Additionally, federal court copyright cases are generally very complex and can go on for a long time, further adding to the legal costs and plaintiffs’ frustration.   As a result, infringements regularly went unchallenged, leading many Creators or the small business owners of the Creators’ works to feel disenfranchised by the copyright system.  In effect, these individuals/businesses had rights but no reasonable remedies.

Rather than file a federal court lawsuit, Creators will now be able to bring their infringement claims before a Copyright Claims Board (“CCB”) within the U.S. Copyright Office – a three-member panel of experts on copyright law.   The panel will have the right to award, e.g., photographers, up to $15,000.00 per work and $30,000.00 per claim, assuming the works have been registered with the office.  For unregistered photos, the amount of the award is reduced by fifty percent.  In addition to monetary penalties, the Board could also issue a notice to the infringer to cease the infringement.

The commentator notes that a copyright infringement action brought in federal court requires that the work has actually been registered with the U.S. Copyright office.   See the March 4, 2019 decision by the U.S. Supreme Court in Fourth Estate Public Benefit Corp. v. Wall-Street.com. It is not clear why this requirement is not required for a CCB proceeding.  The commentator still recommends that a creator secure a registered copyright by filing for copyright registration within 90 days of publication to take advantage of the potentially greater monetary award provided by the CCB for registered works, or, in the alternative to have the option of a proceeding in federal court.

The CCB officers are appointed by the Library of Congress.  The candidates must have demonstrated expertise in copyright law.  For example, they must have represented or presided over a diversity of copyright interests, including those of both owners and users of copyrighted works.   This helps to ensure that the officers are fair and unbiased.

Another problem with federal copyright infringement cases is that the judges cannot usually be expected to be subject matter experts in this complex area of the law.  This lack of consistency in judicial background and experience has led to inconsistent copyright infringement decisions across jurisdictions or even within the same jurisdiction.  Since the CCB experts will be subject matter experts, the expectation is that the decisions will lead to more consistently correct decisions than in federal courts.  Hopefully, the CCB’s decisions will be published so they can be relied on in federal court cases.

There are numerous other provisions in the CASE Act beyond the scope of this Law Update.   Contact us to discuss your options in bringing a copyright infringement claim under the CASE Act.  We would be honored to represent creatives in their quest to protect the fruits of their creativity at a one-time flat fee.

WE THANK YOU READING THIS BLOG AND HOPE YOU FOUND IT INFORMATIVE.  HOWEVER, THE CONTENT IS PROVIDED FOR INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE.  IF YOU ARE CONTEMPLATING ANY ACTION THAT MAY HAVE LEGAL CONSEQUENCES, CONSULT WITH AN ATTORNEY.

 

©2021

Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

(305) 279-4740

 

 

 

 

Sep
18

FAIR USE & PARODY IN COPYRIGHT LAW

This blog discusses the case of Lombardo, et al. v. Dr. Seuss Enterprises, LP, U.S. District Court, Southern District of New York, No. 16-09974,  where the Court held on September 15, 2017 that the defendant’s play, “Who’s Holiday,” was a fair use parody of Dr. Seuss’s classic book “How the Grinch Stole Christmas.”

Background on Fair Use & Parody

Fair use is a legal doctrine that promotes freedom of expression by permitting the unlicensed use of copyright-protected work in certain circumstances.  The doctrine is codified in Section 107 of the U.S. Copyright Act and states as follows:

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

Although not specifically referred to in the statute, parody, sometimes referred to as a spoof, send-up, take-off, or lampoon, is a work created to imitate, make fun of, criticize, or comment on the original work. Who can forget the Carol Burnett show’s parody of a scene from Gone with Wind, truly one of the funniest moments in television history?

Many may believe that parodies are generally “funny, light-hearted take-offs” on a previous work.  However, this is not always the case.  The U.S. Supreme Court addressed the issue of fair use parody in the 1994 case of Campbell, et al.  v. Acuff-Rose Music, Inc.   The defendant had created a rap version of the 1964 rock classic, “Oh, Pretty Woman” by Roy Orbison & William Dees.   The Court opined that the rap song’s words can be taken as a “comment on the naivete of the original of an earlier day, as a rejection of its sentiment that ignores the ugliness of street life and the debasement it signifies.”

The Court defined parody as form of art that represents the tension between a known original and its parodic twin such that the parody has to be able to use enough of the original to be recognizable to the audience.  The result must be a creative transformation from the original.

Acuff-Rose owned the copyright to the song “Oh, Pretty Woman.”  The manager of the band 2 Live Crew had sought permission to record its version of the song but Acuff-Rose, as was its right as the copyright owner, refused to grant permission.   The band subsequently recorded the rap song and in doing so, did give credit for Pretty Woman to Orbison, Dees, and Acuff-Rose.

Although the Court held that the defendant’s version was a parody, under the fair use doctrine, the defendant still had to prove to the satisfaction of the lower courts that: 1) it had not taken any more of the original than necessary to make the point of the parody; and 2) that the parody had not harmed the market for the original song or the potential market for new versions that Acuff-Rose as the copyright owner may license.

The Court did emphasize that parodies in general, will rarely substitute for the original work, since the two works serve different market functions. While Acuff-Rose found evidence of a potential “derivative” rap market in the very fact that 2 Live Crew recorded a rap parody of “Oh, Pretty Woman” and another rap group sought a license to record a rap derivative, the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crew’s parodic rap version. In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market, noting that artists “ask for criticism, but only want praise.”

The case settled so it’s not clear just how the lower court would have ruled on the remaining two issues.

Is It Fair Use Parody or a Derivative Work?

When the lyrics to a song, for example, are changed, the result could be a derivative work under U.S. copyright law.  The right to prepare derivative works is one of the exclusive rights of the copyright owner (e.g., turning a play script into a motion picture screenplay – the screenplay being a derivative of the play script.)

Fair use does not apply to derivative works.   Courts may struggle in a parody case to determine whether to classify the allegedly infringing work as fair use (no permission needed from the copyright owner to create the parody) or a derivative work (permission needed to avoid infringement).  There are no bright-line rules and each case must be evaluated on its own merits. Generally, to win the fair use argument, the work must be seen as sufficiently transformative of the underlying work.

The Holding in Lombardo, et al. v. Dr. Seuss Enterprises, LP (Note 1)

The allegedly infringing work was a play entitled “Who’s Holiday” which Dr. Seuss Enterprises, LLP argued infringed its copyrights to the late Dr. Seuss’s works, specifically “How the Grinch Stole Christmas.”  As many of the readers of this blog will recall, Dr. Seuss’s (Note 2) play is about a grouchy, cave-dwelling monster named Grinch who decides to end Christmas in Who-Ville, but has a change of heart after being interrupted by Cindy Lou, an endearing young girl.

Lombardo’s play also has a character by the name of Cindy Lou but here Cindy Lou is an adult woman struggling with various addictions after spending time in prison for murdering the Grinch who was once her husband and fathered her daughter.

The Lombardo court concluded that “Who’s Holiday” was a fair use parody because the playwright had turned the saccharine depictions in Dr. Seuss’s work into an object of ridicule where green beasts impregnate women, paparazzi “run wild” and citizens get high on “Who Hash” to avoid life’s daily hassles.  According to Judge Hellerstein, Lombardo’s play, although coarse and vulgar, lampoons the utopian society depicted in the original work: society is not good and sweet, but coarse, vulgar, and disappointing.  “The play would not make sense without evoking the style and message of “Grinch” for which there be no object of the parody.  Whether the play’s parody of “Grinch” is effective, or in good taste, is irrelevant.”

The Lombardo opinion mirrors the Supreme Court’s opinion in the Campbell case in that transformation of a work with “nice, heart-warming” themes into provocative, even vulgar themes, can be fair use parody under copyright law.   Dr. Seuss Enterprises accused the playwright of exploiting the characters and themes of “Grinch” because he was too lazy to try “working up something fresh.” This argument failed to sway the Judge Hellerstein because of the “transformative” nature of the play.

Take-Home Points

Anyone contemplating creating a work by “adjusting” the themes, characters, etc. of an underlying work owned by another needs to have a good understanding of fair use parody.   The two decisions discussed above favored the defendants.  Yet, in Campbell, the defendant had actually sought the copyright owner’s permission to record the rap version.  Furthermore, the band had given the original song writers and current copyright owners credit for the original song.  These actions show a good faith attempt to recognize the original songwriters and current owners.   Whether these actions played any role in the reversal by the Supreme Court of the appellate court’s decision favoring Acuff-Rose is not known.   Acuff-Rose also could have chosen to enter into an agreement with the band to license out its “derivative work” rights as the copyright owner to 2 Live Two.   That is, derivative rights can be licensed.   A copyright owner, however, is not obligated to enter into any licensing agreement whatsoever.

Regarding the Lombardo case, the play at issue is clearly targeted to adult audiences and involves themes completely different from those Dr. Seuss’s beloved children’s book.  If Lombardo’s play, on the other hand, had simply turned Cindy Lou into the consummate brat who undergoes her own transformation prior to Christmas to help save Christmas, then it is highly unlikely that such a play would not have met the transformative threshold for establishing fair use parody.  The commentator will hazard a guess that the book will continue to be a favorite for generations to come and most will remain unaware of the parody play.  Parodying a beloved work can also be a turnoff for audiences or consumers where the parody is full of dark themes relative to the original work.

Please note that the U.S. Copyright’s website provides summaries of decisions involving fair use from the appellate courts of the federal circuit and the U.S. Supreme Court.  This website can be a useful for starting point for those considering creating a parody of an underlying work.

Note 1.  As of the date of this blog, the opinion may only be accessed through Pacer.

Note 2.  Dr. Seuss’s full name was Theodor Seuss Geisel.  He adopted the pen name Dr. Seuss.

© 2017 by Troy & Schwartz, LLC

WE THANK YOU FOR READING THIS BLOG.  HOWEVER, THE FOREGOING IS NOT LEGAL ADVICE AND IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY.   IF YOU ARE CONTEMPLATING ANY ACTION THAT MAY HAVE LEGAL CONSEQUENCES, YOU SHOULD CONSIDER CONSULTING WITH AN ATTORNEY OF YOUR CHOOSING.

 

 

 

 

Jan
19

THINK YOU OWN THAT COPYRIGHT? AVOIDING SURPRISES IN COPYRIGHT OWNERSHIP

Ownership as the Result of a Work Made For Hire

Copyright law seems deceptively simple compared to patent and trademark law.  Where copyright law can get particularly complicated for the unwary, however, is in the area of copyright ownership.  Under U.S. law, the creator or author of the work is the owner of the copyright.  But what happens if the work was created by and employee in the scope of his/her employment or by an independent contractor who was hired or commissioned to create the work?

Regarding an employer-employee relationship, the work is generally treated as a work made for hire wherein the employer (and not the employee) is deemed the author and owner of the work.  The forms for federal registration of a copyrightable work include a section addressing ownership secured on the basis of a work made for hire.

Regarding an independent contractor relationship, the work may qualify as a work made for hire providing two conditions are met pursuant to the Copyright Act (Act).  First, the work must fall into one of the nine enumerated types of works specified in the Act.  Second, the independent contractor and the hiring party must have both signed an agreement agreeing that the work to be created is a work made for hire.  If these two requirements are met, the hiring party is deemed as the owner of the work created by the independent contractor.   17 U.S.C. § 101, et. seq.

Note the difference between works made for hire by an employee versus those made by an independent contractor.  In the latter case, the type of works qualifying as work made for hire are limited by statute and a written agreement is required.

Why the Distinction Between and Employee and an Independent Contractor Is Important

Take the scenario of software developers who are often hired as independent contractors by startup companies.   Software can be copyrighted, but software is not one of the enumerated types of works qualifying as a work made for hire work by Independent Contractors.  Therefore, even with a written agreement stating that the software is to be designated as a work made for hire, the hiring company will not actually own the copyright to the developed software under the work made for hire doctrine even though the software developer (Independent Contractor) was paid to create the software.   That is, the software developer may well still be the owner of the software despite the work made for hire agreement.   On the other hand software development companies such as Microsoft Corporation that have employees dedicated to developing software are the owners/authors of any copyright-related rights in the software under the work made for hire doctrine.   See the U.S. Copyright Office Records for Microsoft Corporation’s registered copyrights where Microsoft is listed as the author of the work as the result of an employer work made for hire.

Copyright ownership issues as they relate to Independent Contractors may remain hidden and only arise when: 1) a business is being sold and the sale involves intellectual property (IP) assets such as copyrights; or 2) in a copyright infringement lawsuit.    The buyer of IP assets will want assurance that the IP assets are indeed owned by the seller so that they may be effectively assigned to the buyer by a written instrument signed by the seller and the buyer.   A deal could fall through if the seller cannot prove to the buyer’s satisfaction that it – the seller – is the owner of the copyrights and therefore has the right to transfer ownership to the buyer.

A defendant in a copyright infringement lawsuit may be able to use “lack of ownership” as a defense if the work was created by an independent contractor and the work does not qualify as a work made for hire under the Copyright Act.  That is, ownership remains invested in the Independent Contractor and plaintiff does not own the copyright it claims is being infringed.

Ensuring the Legally Sufficient Transfer of a Copyright by an Independent Contractor

What steps can be taken to ensure the proper transfer of copyright-related rights from an Independent Contractor?  Where the work(s) to be created clearly fall into one of the nine (9) enumerated classifications specified within the copyright statute, the Independent Contractor and the hiring party need to sign an agreement wherein the work(s) to be created is designated as a work made for hire with all associated copyright-related rights belonging to the hiring party.

Copyright ownership can also be transferred by an assignment of rights and by operation of law (e.g., as the result of a probate proceeding).  For my clients, I include an assignment of rights provision within all work made for hire agreements with Independent Contractors as a precaution to cover the situation where the created work may be found to not qualify as a work made for hire.  Thus if for whatever reason the work should not qualify as a work made for hire because, e.g., it does not fall into one of the nine enumerated categories, the hiring party would still own the copyright as the result of the creator’s assignment of rights to the hiring party.  17 U.S.C. § 101;  17 U.S.C. § 201(d)(1).  Any such assignment needs to be clear as to the rights being conveyed and the nature of the underlying works.  For a good discussion of how important an assignment of rights provision may be where the work made for hire conveyance to an Independent Contractor fails, see Capital Concepts, Inc. v. Mountain Technology Corp., et al., WL 6761880 (W.D. Va. 2012).

THE ABOVE IS FOR INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE.

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