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by MirgepowerCopyright

Court Rejects “Embedded Link” Copyright Infringement Loophole

The U.S. District Court for the Southern District of New York has rejected the argument that embedding a link to a video does not “display” that video within the meaning of the Copyright Act. Nicklen v. Sinclair Broad. Grp., Inc., No. 20-CV-10300 (JSR), 2021 U.S. Dist. LEXIS 142768 (S.D.N.Y. July 30, 2021). In ruling on a motion to dismiss, the court held that the exclusive right of the copyright owner to “display” his work should be interpreted broadly so that the display right is not rendered “merely a subset of the reproduction right.” Id. at *13. 

Under the auspices of the legal theory that one must make a “copy” to be liable for copyright infringement, the phenomenon of “hotlinking” has grown exponentially as websites have relied on this “legal loophole” that ostensibly relieves them of responsibility for what would otherwise constitute copyright infringement. “Hotlinking” is the process by which a website links to an image (for example) that is hosted elsewhere on an external server. The image is embedding into the website, but since the hotlink is not “displaying” an actual image file, but rather is directing to a separate file on a separate server, the website never actually makes a copy of the image file. Therefore, hotlinking has been seen by some as a technical loophole that allowed for copyright infringement without the liability. 

Those relying on this defense have pointed to the “server rule” promulgated by the U.S. Circuit Court of Appeals for the Ninth Circuit. Id. at *12 (“Because the image remains on a third-party’s server and is not fixed in the memory of the infringer’s computer, therefore, under the ‘server rule,’ embedding is not display.”). The Nicklen court rejected the “server rule” by holding that the exclusive right to display a work “is concerned not with how a work is shown, but that a work is shown.” Id. at *11 (emphasis in original). 

This hotlinking/embedded link defense always seemed at to be at odds with the intent of the Copyright Act, but was yet another example of copyright law not keeping pace with technological advances that allowed infringers to ostensibly escape liability for what would certainly seem to be a violation of the exclusive rights of the copyright owner. 

RegitzMauck agrees with the reasoning of the Nicklen court. If you are the victim of hotlinking, do not hesitate to contact us. 

Mike Regitz focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property, cybersecurity, and data privacy matters and disputes.

by MirgepowerCopyright

Inside Out Characters Beat Copyright Infringement Claims

In an interesting case about a children’s movie that my children have watched countless times, Disney came under fire for its use of anthropomorphized characters that represent human emotions in Inside Out. See Daniels v. Walt Disney Co., 958 F.3d 767 (9th Cir. 2020). If you haven’t seen the movie, five cartoon characters represent the emotions (Joy, Sadness, Disgust, Fear, Anger) of an 11-year-old girl named Riley. However, an expert on children’s emotional intelligence alleged that Disney stole the idea and characters from her creation of The Moodsters, which were brought to life through a pitchbook, a pilot episode, and a line of toys and books. The Moodsters included five color-coded characters that also represented emotions, including love, happiness, sadness, anger, and fear. While there are similarities between the characters of Inside Out and The Moodsters, the Ninth Circuit agreed with the District Court and ruled that the use of anthropomorphized characters representing human emotions did not qualify for copyright protection under the facts of this case. Id. More specifically, The Moodsters did not display consistent, identifiable character traits and were not sufficiently distinctive to trigger copyright protection. See id. at 772-773. 

Plaintiff, Denise Daniels, designed and developed initiatives to assist children with handling their emotions. In 2005, she developed The Moodsters Bible (“Bible”), which was a pitchbook for presenting her ideas to media executives and collaborators. The Bible included five color-coded characters that represented different emotions: pink (love); yellow (happiness); blue (sadness); red (anger); and green (fear). Daniels then released a 30-minute pilot episode for a television series featuring The Moodsters in 2007. Daniels and her team later developed a line of Moodsters products, including toys and books, that were sold at Target and other retailers beginning in 2015. Throughout this time, Daniels pitched The Moodsters to numerous media and entertainment companies, including numerous pitches to and contacts with Disney and Pixar from 2005 to 2009. The names, physical characteristics, attributes, and behaviors of The Moodsters went through significant changes through the years.  

Disney began development of Inside Out in 2010 and released the movie in 2015. The story line centers around five anthropomorphized emotions that live inside of an 11-year-old girl, and the director and co-writer of the movie stated that the emotions of his 11-year-old daughter provided the inspiration for the movie. 

Daniels filed suit against Disney for breach of an implied-in-fact contract and later added copyright infringement claims. See id. at 770. This article will not address the implied-in-fact contract claims. Disney responded with a Motion to Dismiss the copyright claims, which the district court granted on the grounds that The Moodsters were not protectable by copyright. See id. at 771.

On appeal, the Ninth Circuit evaluated whether The Moodsters were entitled to copyright protection. “A character is entitled to copyright protection if (1) the character has ‘physical as well as conceptual qualities,’ (2) the character is ‘sufficiently delineated to be recognizable as the same character whenever it appears’ and ‘display[s] consistent, identifiable character traits and attributes,’ and (3) the character is ‘especially distinctive’ and ‘contain[s] some unique elements of expression.’” See id. at 771 (citing DC Comics v. Towle, 802 F.3d 1012, 1019 (9th Cir. 2015)). Disney did not dispute that The Moodsters met the first prong of this test but argued that analysis under the second and third prong required dismissal of the copyright claims. 

Initially, the Ninth Circuit agreed with the District Court that simply using a color to represent a mood or emotion is an idea that is not protectable under copyright law. See id. at 772. And when determining whether the characters were “sufficiently delineated” and maintained “consistent, identifiable character traits and attributes,” the Court focused on the fact that the physical appearances and most of the character traits changed significantly over time. See id. The Moodsters transitioned from insect-like characters to lovable bears, and from characters defined by their emotions to “mood detectives.” See id. at 772-773. Further, in each iteration of The Moodsters, the names of the characters changed. See id. at 773. The Moodsters failed under the second prong because each character lacked “identifiable and consistent character traits across iterations” of the characters. See id.     

The Moodsters also fell short under the third prong because they were not “especially distinctive” and lacked “unique elements of expression.” See id. The Moodsters had generic attributes and traits, and each character changed names three times. The fact that each anthropomorphized character represented a specific emotion was insufficient to satisfy this prong as well. See id. 

The Ninth Circuit further analyzed whether The Moodsters could obtain copyright protection under the “story being told” doctrine. See id. at 774. Under this legal test, a character may obtain copyright protection if that character constitutes “the story being told” or dominates the story so much that it becomes “essentially a character study.” See id. (citing Warner Bros. Pictures v. Columbia Broad. Sys., 216 F.2d 945, 950 (9th Cir. 1954)). The Court ruled that neither the Bible nor the pilot episode sufficiently developed the characters to meet this threshold of copyright protection. 

Despite clear knowledge of Daniels and her creation of The Moodsters, Disney was able to escape copyright infringement because The Moodsters failed to qualify for copyright protection. The significant changes of the characters throughout time proved detrimental to her copyright claims, and the general idea of using a color to represent a mood is unprotectable as an idea. Thus, even if Disney developed the story for Inside Out with assistance from the disclosures by Daniels, her copyright infringement claims were unable to survive.   

The Opinion from the U.S. Court of Appeals for the Ninth Circuit can be found here: OPINION

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property, cybersecurity, and data privacy matters and disputes.

by MirgepowerCopyright

Criminal Penalties Toughened for Illegal Streaming of Copyrighted Content

Hidden in the December 2020 COVID-19 relief bill was legislation designed to increase the criminal penalties for unauthorized streaming of copyrighted content. The Protecting Lawful Streaming Act amends federal law related to stolen property by adding Section 2319C, which levies heavy penalties for illicit digital transmission services or streaming. Under the new act, “[i]t shall be unlawful for a person to willfully, and for purposes of commercial advantage or financial gain, offer or provide to the public a digital transmission service that: 

1. is primarily designed or provided for the purpose of publicly performing works protected under title 17 by means of a digital transmission without the authority of the copyright owner or the law; 
2. has no commercially significant purpose or use other than to publicly perform works protected under title 17 by means of a digital transmission without the authority of the copyright owner or the law; or 
3. is intentionally marketed by or at the direction of that person to promote its use in publicly performing works protected under title 17 by means of a digital transmission without the authority of the copyright owner or the law.” 

18 U.S.C. § 2319C (2020). The new act provides penalties of up to 10 years in prison if the criminal infringement is a second or subsequent offense. Because the act is silent on copyright law, the copyright holder may also bring a civil suit for the same unlawful actions. Id. § 2319C(d). 

Since copyright holders already have the exclusive right to reproduce, distribute, and control public performance of their copyrighted work, this act was designed to close a criminal penalty loophole. See 17 U.S.C. § 106 (1976). Illegal streaming becomes a criminal infringement primarily through the right of public performance, but the corresponding penalty was limited to a misdemeanor. See id. Thus, illegal streaming was treated as a lesser crime than downloading or reproducing the same copyrighted content, which was treated as a felony. This legislation was designed to close this loophole by assessing the same penalty for this type of public performance (i.e., streaming).

Copyright enforcement continues to evolve in the digital age. The streaming of copyrighted music, videos, and public performances has become so widespread that the laws and the courts are struggling to keep up. Hopefully, the Protecting Lawful Streaming Act is a step in the right direction for our copyright owners out there.  

The text of the Protecting Lawful Streaming Act can be found at – TEXT

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property, cybersecurity, and data privacy matters and disputes.

by MirgepowerCopyright

Russian Copyright Pirate May Be Forced To Answer Infringement Claims in Virginia

Does a Virginia federal court have specific personal jurisdiction over a Russian copyright pirate who operates numerous websites from Russia and has never been to the United States?

The U.S. Court of Appeals for the Fourth Circuit says maybe so. While you can hide in Russia, if your commercial activities and websites reach Virginia residents, then the federal courts may hold you accountable. 

The alleged pirate websites are operated almost entirely from Russia and have no employees in the United States. The owner has never been the United States, never held a bank account in the United States, never paid taxes in the United States, and also argues that it would be difficult to even get a visa to visit the United States. The district court ruled that personal jurisdiction did not exist under these facts, but the Fourth Circuit reversed this decision and ruled that the exercise of specific personal jurisdiction was appropriate if it was deemed constitutionally reasonable. UMG Recordings, Inc. v. Kurbanov, 963 F.3d 344, 355 (4th Cir. 2020). 

Twelve record companies that produce, distribute, and license 85% of the sound recordings in the United States filed suit against Tofig Kurbanov for mass copyright infringement. See id. at 348. Through numerous websites, Kurbanov offers “stream-ripping” services that extract audio recordings from videos available through online platforms. See id. The majority of the ripped streams are derived from YouTube videos. See id. The websites are free to use and require limited interaction from the visitors. Kurbanov derives virtually all of his revenues from selling space on the websites to advertising brokers in the Ukraine, and at least two in the United States, which then resell those spaces to advertisers. See id.  Geolocation and geo-targeting capabilities are offered to the advertisers for displaying geographic-specific advertisements to website visitors. See id. While it’s fairly easy to see why the record companies are upset, Kurbanov argued that a Virginia federal court does not have personal jurisdiction over him or his companies.

The Fourth Circuit has developed a three-prong test for the specific personal jurisdiction requirements: “(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether plaintiffs’ claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable.” See id. at 351-52. 

Under the first prong, the court found that there were more than half a million unique Virginia visitors to Kurbanov’s websites in a single year and that these visitor’s acts of accessing the websites are commercial relationships, even though the website visitors are not charged a fee. See id. at 353. Kurbanov also registered a DMCA agent with the U.S. Copyright Office to qualify for certain copyright safe harbor defenses, contracted with U.S-based advertising agencies, used U.S. domain registrars, and relied upon U.S.-based servers. See id. at 354. Therefore, Kurbanov’s activities with Virginia residents were sufficient to meet the requirements of the first factor. 

The Fourth Circuit then analyzed the second factor and ruled that the record companies’ claims did arise out of Kurbanov’s activities in Virginia. See id. at 355. The websites were accessible around the world and Virginia residents pirated music through them. Further, the geo-location features of the website enabled Kurbanov to sell Virginia visitors’ data to advertising brokers. Through his network, “Kurbanov directly profited from a substantial audience of Virginia visitors and cannot now disentangle himself from a web woven by him and forms the basis of [these copyright infringement] claims.” Id. 

This case was ultimately remanded to the district court to determine whether the exercise of personal jurisdiction is constitutionally reasonable under the third prong. The Fourth Circuit is clearly bending over backwards to force Kurvanov to defend these copyright infringement claims in federal court. In this digital age where you can reach customers from the other side of the world, a website that interacts with customers in the United States may be sufficient to establish personal jurisdiction, even if you never step on U.S. soil.     

The Opinion from the U.S. Court of Appeals for the Fourth Circuit can be found here: Opinion

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property, cybersecurity, and data privacy matters and disputes.

by MirgepowerCopyright

Sixth Circuit Affirms That Portions Of Company’s Training Guides Are Protected by Copyright

Many of our clients and potential clients have questions about the intellectual property rights that may be available for training guides or instruction manuals that are developed by their company. Any potential rights primarily come from copyright law, where copyright protection is available for “original works of authorship.” 17 U.S.C. § 102. A recent jury trial in Tennessee that later went up to the U.S. Court of Appeals for the Sixth Circuit provides an in-depth analysis of the copyright issues involved with training manuals that may have been reproduced and/or used by a third party. Hiller, LLC v. Success Grp. Int’l Learning All., LLC., 979 F.3d 620 (6th Cir. 2020).  

The plaintiff, Hiller, LLC, provides plumbing, heating, cooling, and electrical services in Tennessee and employs around 400 service technicians. See id. at 623. Hiller joined Success Group International, an organization that offers management advice and conducts training courses for its members using manuals (“Manuals”) that were copyrighted by Clockwork (owner of Success Group). See id. In 2015, Hiller hired a third party to create a new training guide (“Guide”) to be used at Hiller. See id. at 623-24. To create this Guide, a workshop was scheduled to generate ideas and comments from participants, including executives and employees from Hiller and a representative from Success Group. See id. The participants referred to at least one of the Manuals for ideas during the workshop. Not long after completion of the Guide, Success Group conducted a class called “Service Essentials” using a workbook that closely resembled the Guide. See id. at 625. Hiller then ended its membership in Success Group, demanded that Success Group stop using the “Service Essentials” workbook, registered its copyright in the Guide, and sued Success Group for copyright infringement. See id. Clockwork then intervened in the case as the copyright owner of the Manuals. 

After a seven-day trial, the jury concluded that Hiller had a valid copyright in the Guide and that the “Service Essentials” workbook copied protected elements from the Guide. See id. at 625. On appeal, the Sixth Circuit initially examined Success Group’s argument that the Guide did not contain enough originality to meet the copyright threshold due to the use of ideas and materials from the Manuals. According to the U.S. Supreme Court, “[o]riginal, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity.” See Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991). The Sixth Circuit agreed with the jury that the Guide’s choices regarding selection and organization of material met the originality threshold for copyright protection. Hiller, 979 F.3d at 626. Thus, Hiller owns a valid copyright in any original portions of the Guide that do not incorporate copyright protected elements from the Manuals. 

As the copyright owner of the Manuals, Clockwork then argued that Hiller should lose copyright protection for the entire Guide because Hiller incorporated copyrighted materials and underlying ideas from the Manuals. However, the Court ruled that many of the similarities between the Guide and Manuals related to short phrases or underlying ideas merged with expressions that are not protectable under copyright law (e.g., advising technicians to “park on the street,” establish “eye contact,” wear “shoe covers”). See id. at 628. The alleged incorporation of these underlying ideas from the Manuals did not prevent Hiller from obtaining copyright protection in the original portions of the Guide. The Sixth Circuit ultimately affirmed the jury’s conclusion of copyright infringement in favor of Hiller. 

Copyright law does not prevent others from using short phrases or underlying ideas that may be found in training guides or instruction manuals, including procedures, processes, systems, methods of operation, and concepts. However, original content and materials may be protected, so if you can prove originality, then you may have a viable copyright claim against an unauthorized infringer. 

The Opinion from the U.S. Court of Appeals for the Sixth Circuit can be found here: Opinion

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property, cybersecurity, and data privacy matters and disputes.

by MirgepowerCopyright

Huffington Post’s Reproduction of Jon Hamm Photograph Considered Fair Use

In a lawsuit based upon on a photograph of Jon Hamm walking down the streets of New York wearing trousers without any underwear, a photographer sued the owners of www.HuffPost.com for copyright infringement. Schwartzwald v. Oath Inc., No. 1:19-cv-09938, 2020 U.S. Dist. LEXIS 165641, at *1-3 (S.D.N.Y. Sept. 10, 2020). The photographer, Lawrence Schwartzwald, filed this lawsuit against Oath, Inc., which owns and operates www.HuffPost.com, for reproducing the Hamm photograph without authorization or paying him a license. The evidence showed that Schwartzwald licensed the photograph numerous times to various media outlets, but that www.HuffPost.com posted an altered version of the Hamm photograph, as one of many photographs, in an article entitled 25 Things You Wish You Hadn’t Learned in 2013 and Must Forget in 2014. See id. at *3. As you can imagine, the apparent outline of Hamm’s “package” is what led to the popularity of the photograph. The altered Hamm photograph had been cropped and a black box with the words “Image Loading” was covering Hamm’s “package.” See id. at *4-5.  

Early in the case, defendant filed a motion to dismiss Schwartzwald’s copyright claims and argued that its use of the photograph constituted fair use under copyright law. Under the fair use defense, unauthorized use or reproduction of a copyrighted work is permissible “for purposes such as criticism, comment, news reporting, teaching…, scholarship, or research.” 17 U.S.C. § 107. The statute provides a framework of four factors to analyze to determine if the fair use defense is available:  “(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 the value of the copyrighted work.” Id. 

With respect to the first factor, courts have established three sub-factors for evaluating the “purpose and charter of the use.” See Schwartzwald, 2020 U.S. Dist. LEXIS 165641, at *8-9. These sub-factors include “determining whether the use is: (1) transformative; (2) for commercial purposes; or (3) in bad faith.” Id. In many cases where the court finds fair use, the initial factor is determinative. 

In this case, the Judge predictably relied upon this initial factor to rule that defendant’s use of the altered Hamm photograph was transformative, and therefore, fair use. The Opinion reasoned that defendant’s use of the Hamm photograph was not to illustrate Hamm’s “package,” but to mock Hamm, the public’s fixation on his “package,” and the viral nature of the photograph. See id. at *10-20. Further, the modification of the “valuable or unique” portion of the Hamm photograph with a black box and the treatment of the photograph in a comedic article were crucial to the court’s finding of transformative use. See id. at 12-15. The “Image Loading” black box over Hamm’s “package” clearly convinced the Judge that Schwartzwald’s copyright infringement claims should be dismissed, as the Judge quickly rejected the importance of and evidence supporting the remaining factors and sub-factors. 

The applicability of the fair use defense is an unpredictable area of copyright law. While the copyright owner must evaluate a potential fair use defense before asserting copyright infringement, it can be difficult to determine which unauthorized reproductions of copyrighted materials may be considered transformative by a court, and these types of cases can assist in that evaluation.

The Opinion from the U.S. District Court Southern District of New York can be found here: Opinion

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property, cybersecurity, and data privacy matters and disputes.

by MirgepowerCopyright

Eleventh Circuit Lays Out the Legal Framework for Proving Copyright Infringement of Computer Code

September 23, 2020

Two software competitors that maintain databases of life insurance quote information for their clients squared off in a South Florida district court over claims of copyright infringement, trade secret misappropriation, false advertising, and anti-hacking violations. The plaintiff, Compulife, alleged that its proprietary data and source code were misappropriated and utilized to power defendants’ life insurance websites that offer quotes to their customers, and that this proprietary data and source code were obtained through false pretenses and espionage. The parties consented to a bench trial before a federal magistrate judge in two consolidated lawsuits covering similar allegations, where the judge ruled for the defendants. Compulife then appealed those rulings to the U.S. Court of Appeals for the Eleventh Circuit. Compulife Software, Inc. v. Newman, No. 18-12004, 2020 U.S. App. LEXIS 16052 (11th Cir. May 20, 2020). While numerous legal issues were examined on appeal, this blog post focuses on the legal framework for proving copyright infringement of computer software code.     

To prevail on a copyright infringement claim with respect to computer software code, the plaintiff must prove “(1) ownership of a valid copyright and (2) copying of constituent elements of the work that are original.” Id. at *16. In this case, the copyrights associated with Compulife’s software were undisputed, so the court’s opinion focused on the “copying” allegations. With respect to copying of its code, Compulife had the burden of proving both “factual and legal copying.” See id. Factual copying requires the plaintiff to show that the defendant actually used the copyrighted material. The court ruled that the evidence in this case proved that the defendants had access to Compulife’s code and that there were probative similarities between the competitors’ code. Thus, Compulife established factual copying by the defendants.  

The court then moved to the legal copying requirement, which is established when the elements that have been copied are proven protected and significant. See id. at *17. In most cases, proving a “substantial similarity” between the allegedly copied software and the protectable, original elements of the copyrighted software establishes legal copying. See id. Both the qualitative and quantitative significance of the copied work are assessed, but the court must first eliminate the unprotectable elements of the copyrighted work through a process called filtration. See id. at *18. In this process, unprotectable elements, such as elements taken from the public domain or underlying ideas and methods of operation, must be filtered out of the legal analysis because the copying of unprotectable elements is not actionable under copyright law. While the plaintiff carries the ultimate burden of proving factual and legal copying, the burden of proving that elements of the code are unprotectable falls upon the defendant. 

Within this framework, the appellate court found numerous errors in the district court’s analysis. First, the magistrate judge did not reach the filtration issue because it placed the burden to prove that all elements of its computer code were protectable on Compulife. Second, the magistrate judge evaluated the significance of the copied work in view of the offending software code rather than in view of copyrighted code. When weighing the significance of the protectable code that was copied, the court must look to Compulife’s code. Ultimately, the U.S. Court of Appeals for the Eleventh Circuit vacated the judgment, remanded, and demanded that the district court filter out the unprotectable elements of Compulife’s copyrighted code before applying the principles discussed above. See id. at *32.    

While trade secret claims are popular when a competitor, former employee, or bad actor misappropriates or steals your software, always remember that copyright infringement claims may be available. As a plaintiff, you may not want to leave actionable copyright claims on the table when filing your lawsuit.   

The Opinion from the U.S. Court of Appeals for the Eleventh Circuit can be found here – https://media.ca11.uscourts.gov/opinions/pub/files/201812004.pdf.

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property and technology matters and disputes.

by MirgepowerCopyright

Rick Ross Wins His Courtroom Faceoff With 50 Cent

September 17, 2020

50 Cent and Rick Ross squared off against each other in a copyright-related lawsuit in the U.S. District Court for the District of Connecticut related to use of a sample from 50 Cent’s popular song – “In Da Club.” Jackson v. Roberts, 19-0480, slip. op. (2d Cir. Aug. 19, 2020). 50 Cent sued Rick Ross for violation of Connecticut’s common law right of publicity, but his lawsuit was dismissed by the district court judge at the summary judgment stage on the grounds that the claim was preempted by the Copyright Act. On appeal, the Court of Appeals for the Second Circuit confirmed that 50 Cent’s common law claim was preempted and upheld the dismissal.   

To market his new album, Black Market, Rick Ross created a mixtape in 2015 that was offered for free to his fans. This Renzel Remixes mixtape was a compilation of 26 remixes in which Rick Ross performed his own new lyrics over audio samples of popular songs by other artists, including Adele, Lil Wayne, and 50 Cent. The “In Da Club” remix track, which was the subject of this lawsuit, consisted of Rick Ross rapping over the instrumental track of 50 Cent’s famous song, which was followed by a thirty-second sample of 50 Cent singing the song without alteration. The track list identified 50 Cent as the original artist associated with this “In Da Club” sample. This practice is apparently common in the industry, and both artists admitted to creating mixtapes and remixes with famous songs to promote their new albums in the past.       

Copyright infringement claims were not available to 50 Cent because he did not own the rights to the “In Da Club” song. The Recording Agreement between 50 Cent and Shady/Aftermath left 50 Cent without any copyright interest in the famous song, but with limited rights to use his name and likeness and the right to approve any use of a “sample” of the song. Without a copyright interest, 50 Cent was forced to rely upon allegations of the violation of his right of publicity, and Rick Ross argued that these claims were preempted by the Copyright Act. 

The Court of Appeals analyzed the district court’s decision under two theories of preemption – implied and statutory. “Implied preemption precludes application of state laws to the extent that those laws interfere with or frustrate the function of the regime created by the Copyright Act.” Id. at 10. “Statutory preemption preempts state law claims to the extent that they assert rights equivalent to those protected by the Copyright Act, in works of authorship within the subject matter of federal copyright.” Id. (citing 17 U.S.C. § 301). 

With respect to implied preemption, Shady/Aftermath held the copyright interest in the song and was in the position to exert control over the distribution of the song. The appellate court ruled that allowing this right of publicity suit to proceed could interfere with and frustrate the copyright interest that Shady/Aftermath has in the song. Rick Ross may have been liable to Shady/Aftermath (not 50 Cent) for copyright infringement, and therefore, enabling 50 Cent to exert control in the distribution of this song without a copyright interest would interfere with the rights created by the Copyright Act. Thus, implied preemption precluded the alleged violations of 50 Cent’s publicity rights.     

Statutory preemption requires a two-part analysis. First, is the work at issue within the subject matter of copyright protection? Because a sound recording is within the subject matter of copyright protection, this requirement is satisfied if 50 Cent’s claim focuses on the sound recording. More specifically, the court determined that 50 Cent’s claims were focused on the use of the copyrighted work itself, and not the use of his identity, which in certain cases may not be within the subject matter of copyright protection. Second, is the right being asserted equivalent to the exclusive rights within the general scope of copyright? The Court of Appeals determined that 50 Cent’s common law claims were synonymous with a copying claim and were not distinguishable from copyright infringement. The court believed that this lawsuit was a “thinly disguised effort to attack” the use of the song by Rick Ross. See id. at 63. Thus, 50 Cent’s claims were preempted as equivalent to those afforded by the Copyright Act.

The Court of Appeals for the Second Circuit ruled that 50 Cent’s right of publicity claims were preempted by the Copyright Act under implied and statutory preemption. Without a copyright interest in the “In Da Club” song, 50 Cent’s lawsuit appeared to be a more of a feud between rappers than a legitimate legal dispute. 50 Cent even admitted to sampling other recording artists’ music on his own mixtapes, which appeared to make it an easy decision for both courts to dismiss his claims.      

The Opinion from the U.S. Court of Appeals for the Second Circuit can be found here – https://www.courthousenews.com/wp-content/uploads/2020/08/hiphop.pdf.   

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property and technology matters and disputes.

by MirgepowerCopyright

Street Artists Get Confirmation of Copyright Damages Award of $6.75M

September 9, 2020

A $6.75 million damages award for a group of street artists that had their works whitewashed by a building owner was upheld by the U.S. Court of Appeals for the Second Circuit. Castillo v. G&M Realty L.P., 950 F.3d 155 (2d Cir. 2020). This decision supports prior rulings that establish the value of street art existing on public or private structures even though the art may be temporary. The Visual Artists Rights Act of 1990 (“VARA”) provides a legal framework for moral rights for artists. See 17 U.S.C. §106A. Pursuant to VARA, the artist has the right to “prevent any destruction of a work of recognized stature” and provides that “any intentional or grossly negligent destruction of that work is a violation of that right.” Id. at §106A(a)(3)(A). Damages for violations of VARA are governed by general copyright law, which include actual and statutory damages. 

In 2002, an owner of a group of dilapidated warehouse buildings in Long Island City, New York, enlisted a distinguished aerosol artist to turn the buildings into an exhibition space for artists. The site became known as 5Pointz and was recognized as a major global center for aerosol art that was covered by the media and visited by tourists and celebrities. Some of the art at 5Pointz was visible permanently, but most of the art was temporary and was repeatedly painted over. 

About ten years later, the owner decided to demolish the warehouse buildings to develop luxury apartments. Upon hearing of this plan, the group of artists undertook procedural and legal actions to prevent destruction of the site and the works of art thereon. The legal wrangling went on for years, and after a judge denied a preliminary injunction to prevent destruction of the site, the owner whitewashed the artwork despite the pending legal proceedings. The court found that this behavior was unnecessary and done out of spite for the artists that were simply attempting to protect their works. 

Ultimately in its findings of fact and conclusions of law, the court could not determine actual damages for the losses of the works of art, but ruled that each work that had achieved “recognized stature” was subject to statutory damages and allowed for a maximum award of damages due to the owner’s willful actions. With 45 works that achieved “recognized stature,” the court awarded maximum statutory damages of $150,000 each for a total award of $6.75 million. While the owner argued numerous issues on appeal, including statutory interpretation, liability, and damages, the appellate court ruled that the evidence on record sufficiently supported the decision and affirmed the judgment. 

While the property owner’s frustration is understandable, his vengeful actions against the street artists that were simply exercising their rights to protect the works of art under VARA led to this substantial award. As a property owner, if you decide to allow artists to create works of art on your property, then make sure that you understand the copyright issues, corresponding statutes, and the legal procedures involved with protecting your rights in the property. For example, waivers that were signed by the artists and complied with the copyright statutes would have gone a long way to protect this property owner. See 17 U.S.C. § 113(d).

The Opinion from the U.S. Court of Appeals for the Second Circuit can be found here – https://cases.justia.com/federal/appellate-courts/ca2/18-498/18-498-2020-02-20.pdf?ts=1582212604

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property and technology matters and disputes.

by MirgepowerCopyright

BuzzFeed Must Pay For Copyright Infringement and DMCA Violations

September 3, 2020

Gregory Mango, a photographer, sued BuzzFeed for copyright infringement and violations of the Digital Millennium Copyright Act (“DMCA”) in the U.S. District Court for the Southern District of New York. Mango alleged that, without authorization, BuzzFeed published a story that included a photograph taken by him and removed attribution of the photograph to Mango. Before trial, BuzzFeed stipulated to copyright infringement for use of the photograph but challenged the DMCA allegation related to the removal of copyright management information. After a one-day bench trial, the judge sided with Mango on the DMCA claim and awarded him damages on the copyright infringement claim, the violation of the DMCA claim, and reasonable attorneys’ fees and costs. Mango v BuzzFeed, Inc., 356 F. Supp.3d 368 (S.D.N.Y. 2019). On appeal of the DMCA ruling only, the judgment of the district court was affirmed by the U.S. Court of Appeals for the Second Circuit. Mango v. BuzzFeed, Inc., No. 19-446, slip op. (2d Cir. 2020).

Mango regularly licenses his photos to newspapers and other media sources. This lawsuit involves a photograph of a lead figure in a discrimination lawsuit against the City of New York that was ultimately licensed by Mango to the New York Post. In the New York Post article, Mango was given “gutter” credit for the photo, which means that Mango’s name was included below the photo. Months after this article was published, a BuzzFeed author published an article about the discrimination case and included the photo, but the “gutter” credit to Mango had been removed. The BuzzFeed author never asked Mango for permission to use the photo, and inexplicably, listed the name of a law firm below the photo. These actions formed the basis for Mango’s copyright infringement and DMCA claims. 

Without a valid defense against the copyright infringement claims, BuzzFeed stipulated to copyright infringement and was hit with statutory damages by the court. However, BuzzFeed argued that it was not liable for removing or altering the copyright management information (“CMI”) because the DMCA requires not only “knowing that [CMI] has been removed or altered” without authorization, but also knowing that distribution of the copyrighted work “will induce enable, facilitate, or conceal” a copyright infringement. 17 U.S.C. § 1202(b). And without any evidence that BuzzFeed knew its conduct would lead to future, third-party copyright infringement, Mango failed to prove this claim for violation of the DMCA. The district court sided with Mango on this issue and awarded damages for the DMCA claim in addition to the statutory damages for copyright infringement and attorneys’ fees and costs. 

This “double-scienter requirement” of the DMCA was the primary issue on appeal. The Second Circuit ruled that the “infringement” under this second requirement is not limited by actor or by time and that nothing in the statute limits its applicability to downstream copyright infringement. The “double-scienter requirement” accounts for future concealment, not just future infringement. Under this interpretation, the evidence supported BuzzFeed’s (1) knowledge of the unauthorized removal of Mango’s “gutter” credit, and (2) knowledge that this removal would conceal an infringement. Thus, Buzzfeed concealed its infringement by removing the “gutter” credit, and therefore, is liable under the DMCA.      

There are a few lessons that can be learned. First, do not infringe the copyrights of others. Second, never remove or alter the copyright management information from the copyrighted work.

The Opinion from the U.S. Court of Appeals for the Second Circuit can be found here – http://business.cch.com/ipld/MangoBuzzfeed2dCir20200813.pdf.   

Dustin Mauck focuses his practice on intellectual property and technology disputes, counseling, and licensing.

RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property and technology matters and disputes.