Oct
11

THE SECOND CIRCUIT’S RECENT DECISION IN HORROR, INC. v. MILLER – FRIDAY THE 13TH 40 YEARS LATER

This September 2021 decision addresses complex aspects of Copyright Law involving both copyright ownership issues and termination rights wherein the Creator of a work can reclaim rights in an originally assigned copyright 35-40 years after the work’s assignment.  The commentator has previously posted blogs discussing the importance of properly categorizing the work’s Creator as a work-for-hire under the Copyright Act.   Failure to do so may result in a situation wherein the plaintiff in a copyright infringement case may actually not be the owner of the registered copyright. Under such circumstances, a copyright infringement case may be dismissed because the plaintiff, as a non-owner, may not have standing to sue for copyright infringement.

The public policy underlying the Copyright Act’s termination right under 17 U.S.C. § 203 is to give Creators a second chance when the work they licensed or sold (assigned) becomes more valuable than anticipated. Improper classification of the Creator also impacts a Creator’s termination rights because the Creator of a work-for-hire cannot invoke a termination right. Disputes over termination rights often turn on an analysis of the nature of the Creator’s relationship to the work.

The defendant in Horror (Victor Miller) was the screenplay writer of the 1980 horror movie “Friday the 13th”.   The screenplay was created for Manny, Inc. which later transferred its copyright in Miller’s screenplay to Georgetown Productions, Inc.  It was Georgetown Productions that registered the screenplay as a work-for-hire.  The rights were later acquired by Horror, Inc.  In 2016, Miller notified both the “first” company which had retained his screenplay writing services decades before and Horror, Inc. that he planned to exercise his termination rights.

Horror filed an action in the U.S. District Court of Connecticut, seeking a declaration that the screenplay was a work-for-hire by an employee and not subject to termination. The district court disagreed with Horror’s position, finding that Miller had instead been an independent contractor and the screenplay did not qualify as a work-for-hire.  Horror appealed. The Second Circuit affirmed the lower court’s decision.

Employment Status Analysis

In arriving at its “independent contractor” conclusion, the Second Circuit discounted the plaintiffs’ position that Miller had been an employee at the time he wrote the screenplay.  The plaintiffs’ argument focused on Miller’s membership in the Writers Guild of America (WGA) at the time he was hired to create the screenplay as grounds for his designation as an employee and the registered work’s classification as a work-for-hire.   Miller’s original agreement with Manny was conducted under a collective bargaining agreement governing WHA’s writers and signatory employers like Manny.

The Second Circuit concluded that Horror wrongly relied on labor law’s framework defining “employee.” Instead, Copyright law controls the analysis; its concept of employment is grounded in the “common law of agency” and serves different purposes from labor law.

The Second Circuit relied on the Supreme Court’s 1989 seminal case of Community for Creative Non-Violence v. Reid where the High Court laid out the scope of employment framework for establishing copyright ownership under 17 U.S.C. § 102.   In discussing CCNV, the Second Circuit noted that “the Copyright Act uses a more restrictive definition of employment” in order to protect authors whereas labor law construes employment broadly “to serve workers and their collective bargaining interests and establishing rights” including safety and pay rights.  Thus, Miller’s membership in the WGA and Manny’s status as a signatory employer to their collective bargaining agreement did not create an employment relationship that converted the screenplay into a work-for-hire.

In determining that Miller was an independent contractor who had the right to terminate Horror’s copyright, the Second Circuit considered CCNV’s enumerated factors for establishing whether the Creator of the work was indeed an employee:

  • Miller’s previous screenwriting employment and graduate degree in theater established his expertise and skill in screenwriting requiring little oversight/direction;
  • Manny, Inc. never provided Miller with typical employment benefits such as health insurance of paid vacation time;
  • Manny, Inc. never withheld or deducted any taxes or social security payments from the two lump sums he received for his screen-writing services.
  • Nothing in Miller’s employment agreement with Manny, Inc. could be construed as granting Manny the right to assign additional projects.
  • Miller was the only person credited as the screenplay writer.

Certain types of commissioned works may also qualify as a work-for-hire under the Copyright Act when the Creator is an independent contractor and not an employee but only if the Creator and the commissioning party have both signed an agreement stating that the work is a work-for-hire. Additionally, the work must fall into one of the Copyright Act’s nine enumerated classifications for this type of work-for-hire.  Screenplays are not one of the enumerated classifications. Here, the agreement between Manny and Miller never specified that the screenplay would be a work-for-hire.  Even if the screenplay would have qualified as one of the enumerated classifications, the absence of the required agreement eliminated any chance of establishing the screenplay as a work-for-hire under the “independent contractor” scenario.

As a result of the Second Circuit’s decision, Miller now has the right to terminate his copyright.  He will presumably try to negotiate a licensing agreement seeking royalties commensurate with the movie franchise’s success.

Comments

Copyrights enjoy a long lifetime but  nobody has a crystal ball.  Parties who are contemplating obtaining the rights to a copyrighted work(s) should consider the money-making potential with the knowledge that the work’s Creator (including his/her estate) could seek to terminate the copyright 35-40 years into the future. Parties who are acquiring the rights as a successor-in-interest should consider the possibility of termination and determine if the work was a bona fide work-for-hire: 1) by an employee; or 2) via a “work for hire” agreement signed by both the Creator/independent contractor and the hiring party for certain classifications of works.   Why?  Because a “true” work-for-hire is not eligible for termination.  On the other hand, independent contractors may not wish to have their work designated as a work-for-hire and instead assign the rights in return for monetary compensation to preserve their termination rights.

As the Horror decision shows, a registration which specifies a work as a work-for-hire does not necessarily make it so. Had this been a copyright infringement lawsuit brought by Horror against another party, chances are that an astute copyright infringement attorney would have challenged Horror’s ownership and standing as the owner of the registered copyright.  Why?  Because the Creator was never an employee.  Nor would the work  have likely qualified as a work-for-hire under the “independent contractor” alternative provided for under the Copyright Act.

Copyright law is complex even though at first blush it appears relatively simple due to the ease of completing a copyright registration application.  However, numerous pitfalls abound for the unwary and even the issuance of a registration does not mean that the registration is absolutely immune from problems as the Horror decision demonstrates.

Copyrights can be extremely valuable intellectual property assets.  Make sure you understand the pitfalls to avoid problems down the road where your ownership may be questioned or the Creator may have the right to exercise termination rights.   Contact us for a complimentary consultation on your copyright matters.

 

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 OR AN ATTORNEY-CLIENT RELATIONSHIP.  

 

©2021

Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

(305) 279-4740

 

 

  • Comments Off on THE SECOND CIRCUIT’S RECENT DECISION IN HORROR, INC. v. MILLER – FRIDAY THE 13TH 40 YEARS LATER
  • Add Comment

OTHER RECENT POSTS

Jul
09

Have a Website? Consider Implementing a DMCA Policy!

In 1998 Congress enacted the Digital Millenium Copyright Act (DMCA) to address the copyright issues arising because of Internet usage.  Section 512 of the DMCA protects online service providers (OSPs) and website operators from inadvertent copyright infringement.  For OSPs, this protection involves:

  • Taking them off the hook for transient infringing transmissions passing through their computers;
  • Provides a safe harbor if the ISP promptly removes infringing material at the owner’s request; and
  • Relieves them from liability for unknowingly linking to a site that does contain infringing material, except they may be required to identity an alleged online infringer through a subpoena.

For website operators, the DMCA provides that website operators are immune from copyright infringement if:

  • They don’t have actual knowledge of the infringing materials on their services;
  • Don’t receive a financial benefit directly attributable to the infringing materials; and
  • They implement and comply with any takedown procedure. This means that the website should include wording stating that it adheres to the DMCA and provide contact information for a DMCA agent.

One of the first cases to test the DMCA’s reach involved Google/You Tube as the Defendants in a lawsuit brought by Viacom. Viacom argued that YouTube actively encouraged the distribution of infringing content owned by Viacom, it was disqualified from immunity under the DMCA.  Google argued that it and YouTube has immunity under the DMCA’s safe harbor provision.  Google prevailed. Viacom Int’l, Inc. v. You Tube, 676 F.3d 19 (2d Cir. 2012).

          The DMCA Take Down Procedure   

All website operators should ensure that the content they use on their website is original.  If it is not, then they should get permission from the copyright holder to make use of that content or use the content only under a license. When hiring a website developer, it is important to ensure that the developer does not use works (photos, sound recordings, images, etc. owned by another in the website).  Such unauthorized usage of photographs or other images could result in problems for the website owner down the road.  Any authorization the website designer claims he has may not accrue to the website owner.  Accordingly, specific authorization for the website owner to use such content may be required.

Where a website or platform displays user-generated content over which the website owner has no oversight, the owner should have a DMCA policy in place.  This policy will ideally explain how the website owner manages copyright complaints and takedown notices. The website owner presumably expects others to respect and honor its own intellectual property rights.  It is only proper that the website owner will respect the intellectual property rights of others by promptly removing or disabling access to any allegedly infringing content upon receiving a proper take down notice.  The DMCA policy should be part of the website’s term and conditions.

To commence the “takedown” or “removal” of infringing content by a third party such as a website owner or OSP, the owner of the allegedly infringing must send a notice, typically to the designated DMCA agent.  Any old notice won’t work.  It must meet certain criteria known as elements to qualify as a proper DMCA takedown notice.  These elements are:

  • The signature of the copyright owner’s owner or agent authorized to act on behalf of the owner.  The signatory should designate whether they are the copyright owner or the owner’s agent.
  • Clear identification of the work(s) being infringed.  This may include providing a link to a website or other location where the work is being legally displayed.  It is suggested that the copyright owner attach a copy of the copyrighted work a copy of the registration.
  • Clearly specifying the infringing activity and the location of the infringing activity on the Site.  This includes providing the web address (URL) indicating where the infringing activity is occurring.  A copy of the infringing material or web page where the infringing material resides should also be provided to aid in the removal of the infringing material.
  • Contact information: The takedown notice should contain the notice sender’s contact information including the sender’s email address, address, and telephone number.

The following two elements relate to the takedown notice sender’s forthrightness and honesty.  The Site owner is under no obligation to comply with a false or exaggerated takedown notice or any other defective notice.

  • Good faith belief: The takedown notice should include a statement that the notice sender has a good faith belief that use of the material in the manner complained of is not or has not been authorized by the copyright owner who has the sole right to authorize such usage.
  • Accuracy of the notice sender’s statements: The takedown notice should include a statement that the information in the takedown notice is accurate, and under penalty of perjury, that the notice sender is authorized to act on behalf of the copyright owner. Providing false information and making a false claim is punishable under federal law, and those making false notices can be sued and held civilly liable.

The foregoing applies to takedown notices sent to website owners.  However, OSPs can also become involved should they receive a takedown notice.  Here, the OSPs often do not determine if there is actually infringement occurring on the website accessible through the OSP.  Instead, they typically make sure that the DMCA notice contains the information required by law.  If they take down content, the website owner must be notified.  At that the point, the website owner can ask for more details and even file a DMCA Counter-Notice if a false or erroneous DMCA claim is expected.  As with the good faith and accuracy statements of the takedown notice, the counter-notice must also include similar statements.

Finally keep in mind that a  takedown notice may not necessarily be making a valid a claim about copyright infringement.  For example, does the notice refer to content on the website that is actually from the public domain?

Call to Action

Have a website but no DMCA policy?  Have you received a takedown notice? Do you believe a website owner is infringing your copyright?  Contact us at 305-279-4740 or sdtroy@troyandschwartzlaw.com or DM me on Linkedin for a complimentary consultation.

Disclaimer

THANK YOU FOR READING THIS BLOG.  IT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE.  IF YOU HAVE A SITUATION THAT MAY HAVE LEGAL CONSEQUENCES, YOU SHOULD CONSULT WITH AN ATTORNEY OF YOUR CHOOSING.

 

 

 

 

 

 

  • Comments Off on Have a Website? Consider Implementing a DMCA Policy!
  • Add Comment
Apr
17

The Next Frontier in Patent Law – Can Artificial Intelligence Qualify as an Inventor?

On April 5th, a federal judge in the U.S. District Court of Virginia heard summary judgment arguments on this very issue in Thaler v. Iancu.  Thaler brought this action to challenge the current legal definition of inventorship of patent applications after the United States Patent & Trademark Office had rejected two of his patent applications for failing to identify a person as inventor in non-compliance with the Patent Statute’s statutory requirements.  Instead, he had named an artificial intelligence (AI)-based system, DABUS, as the inventor and disavowed any notion of being named a sole or at least a joint inventor.  Thaler may well have brought as a test case given AI’s increasing role in R&D in industries ranging from the life sciences to chemistry to engineering.

The judge is expected to rule in favor of the USPTO on the basis of the patent statute’s definition of inventor which states:  “The term “inventor” means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.”  Any change in the definition of inventor to include AI will require intervention by Congress.

The issue is not, however, as simple as expanding the definition to include the AI.  For example, an Inventor must contribute to the conception of the invention.  As the Manual for the Procedure for Examining Patents (MPEP) states, “[t]he threshold question in determining inventorship is who conceived the invention.  Unless a person contributes to the conception of the invention, he is not an inventor.”  MPEP § 2019.

In understanding the legal definition of inventorship, it is important to understand that the inventor is not required to reduce the invention to practice.  “Difficulties arise in separating members of a team effort, where each member of the team has contributed something, into those members that actually contributed to the conception of the invention, such as the physical structure or operative steps, from those members that merely acted under the direction and supervision of the conceivers.”  MPEP § 2019 citing a 1991 case from the Board of Patent Appeals and Interferences.

Can AI spontaneously conceive of an invention without any human input or is it actually being directed to reduce a human-inputted concept to practice?  Under this scenario, AI cannot be an inventor even if the definition for inventor is expanded to include AI.

Additionally, assignment of patent rights is a common practice.  Generally, any scientist or engineer employed by a company is required to execute and assignment of any patent rights resulting from his or her endeavors to the company-employer.  The company generally files the patent application as the assignee wherein the inventors must always be named.  Another common patent assignment scenario is one where the inventor, as the patent owner, assigns another person, often a business entity, to commercialize the patent.   Patent licensing is another common business transaction surrounding issued patents.   These routine contractual business transactions will clearly become complicated if AI is allowed to be named as an inventor.  Why? Because the party to an agreement must have the requisite intent to enter into the agreement.   Can AI have that requisite invent to assign its patent rights or enter into a licensing agreement?

Other considerations include:  1) An AI machine’s ability to have standing to sue or be able to testify as the inventor in a patent infringement lawsuit; 2) Ownership rights in any resulting patentable invention if the AI machine was designed by an independent person and purchased by the inventor.  Here, any purchase contracts should unequivocally state that any resulting patentable technology resulting from the usage of the AI machine belongs to the purchaser of that machine.  But what if the AI machine is named as the inventor?  The point is that any such contracts involving AI must be carefully tailored to anticipate possible scenarios.

This commentator is not in favor of having AI named as an inventor perhaps because of a bias in favor of the human brain as the ultimate source of creativity and ingenuity.  Instead, Congress should first address the upheaval in intellectual property law caused by simply bad court decisions in U.S. patent law concerning patent eligibility under § 101 and just this month, the questionable application of the fair use doctrine in a copyright law case.  Click here for a link to the blog on the copyright case.  There is also no question that human ingenuity is what created AI in the first place and that AI is here to stay.

As an alternative to complicating the patent law business transactions that are so essential to acquiring investment funding and commercially exploiting patented inventions, a separate statute for thoughtfully addressing the unique aspects of AI-involved inventions is suggested.  This suggestion of a separate patent classification has precedent through plant patents and design patents – types of patents that are separate and distinct from utility patent applications, the very type of patent application at issue in the Thayer case.

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 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. 

 


© 2021 by Troy & Schwartz, LLC

 

 

 

  • Comments Off on The Next Frontier in Patent Law – Can Artificial Intelligence Qualify as an Inventor?
  • Add Comment
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

 

  • Comments Off on Google v. Oracle: Another Questionable Decision by the Supreme Court in the Area of Intellectual Property Law
  • Add Comment
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

 

 

 

  • Comments Off on COPYRIGHT INFRINGEMENT OF CONTENT EMANATING FROM INTERNET RSS FEEDS
  • Add Comment
Close Bitnami banner
Bitnami