Owners, Borrowers & Thieves 2.0 : Owners, Borrowers & Thieves 2.0 : Husch Blackwell Sanders LLP : First Amendment, Commercial Speech

When it comes to the doctrine of fair use, Mark Twain said it first and said it best: "Only one thing is impossible to God: to find any sense in any copyright law on the planet."  I've shared my fellow Missourian's sentiments more than once as I've tried to help clients navigate the murky waters of copyright fair use.  Is it a parody?  Or just a satire?  Is it "transformative"?  Is there a discernible "effect" upon the "potential market" of the original? The legal waters of fair use are almost as muddy as the waters of Mississippi River that I can see from my office window.

When I teach copyright fair use to my law school students, I stress how hard it is to pin down the key legal concepts or to make reliable predictions from past decisions.  For example, can you really draw a meaningful distinction between 2 Live Crew's use of all of the music and most of the key lyrical phrases from the song "Pretty Woman" in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), and Penguin Books' use of some of the art and some of the language from the works of Dr. Suess in The Cat NOT In the Hat, its witty riff on the O.J. Simpson trial in Dr. Suess Enterprises, Inc. v. Penguin Books USA, 109 F.3d 1394 (9th Cir. 1997)? The Ninth Circuit thought it could draw that distinction.  Penguin's pre-publication lawyers apparently did not.

But perhaps the science of statistics can provide the remedy to Mark Twain's complaint.  As I learned in William Patry's excellent copyright blog, Professor Barton Beebe of the Cardozo School of Law has completed an empirical study of all 306 U.S. copyright fair use opinions during the 28-year period from 1978 (the effective date of the new Copyright Act)  through 2005.  Although the results of that study will be published later this year in the Pennsylvania Law Review, you can read the article at Professor Beebe's website.  As he explains in his summary, his study "shows which factors and subfactors actually drive the outcome of the fair use test in practice, how the fair use factors interact, how courts inflect certain individual factors, and the extent to which judges stampede the factor outcomes to conform to the overall test outcome.  It also presents empirical evidence of the extent to which lower courts either deliberately ignored or were ignorant of the doctrine of the leading cases, particularly those from the Supreme Court. "  It is, indeed, a fascinating new look at how the various "fair use" factors affect the the outcomes of the cases.  Although Professor Beebe's work would not have satisfied Mark Twain, it does help the rest of us, including our clients, find a little more clarity in those muddy waters.

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SUX 2B CMG — CMG Worldwide that is. On May 7, CMG took a sizable summary judgment hit. CMG and Marilyn Monroe, LLC, the companies previously claiming all of the rights to control/profit from the most famous nativity songbird of all time, lost their right of publicity claim against the Shaw Family Archives, Ltd. (and others). CMG took issue with the licensing of Marilyn photographs taken by Sam Shaw without also paying CMG its licensing fee for Marilyn's identity. Photographs taken by Sam Shaw can be seen at these websites. CMG took issue with Marilyn's image on a T-shirt and label (as shown in the Court record), and on a licensing website.

This is a very big deal. The Art Law Blog has had three posts on this decision.

So far, the journalists are outperforming the law bloggers on the analysis. To its credit, the Law Blog at the Wall Street Journal linked to the pre-decision Wall Street Journal story about the case, which has great background on the post-mortem commercialization of Marilyn's identity. The Art Law Blog had a link to CMG’s own Indianapolis Business Journal, which had a more thorough discussion of the possible ways this decision could play out.

Normally one of the better legal voices on intellectual property issues, The Center for Internet and Society misses the point in this case. The folks at Stanford read the case to hold “that Marilyn Monroe’s heirs cannot claim post-mortem publicity rights because she died before the enactment of the statute that creates them in California (and, for reasons that are not important here, Indiana). So, according to this Court, her image, likeness and persona are all in the public domain.” That is not the holding.

The Trade Regulation Talk stated that “any publicity rights that Monroe enjoyed during her lifetime were extinguished at her death by operation of law.” This too, is not quite accurate.

This very important decision held that the post-mortem right of publicity could not be bequeathed by testamentary conveyance because the right did not exist at the time of Marilyn’s death. Accordingly, Marilyn Monroe, LLC — and by connection its agent CMG — did not acquire any post-mortem right of publicity because all of its rights arose from Marilyn’s will. The decision — extremely well-reasoned — does not hold Indiana’s attempt to create a retroactive post-mortem right invalid. It leaves that for another decision and leaves open the possibility that such a statutorily created right might vest in the dead celebrity’s statutory heirs.

The power of this decision and its future impact are not in suddenly delegating the post-mortem right of publicity to the public domain waste basket. Its power is in its sensible approach to a post-mortem right. Undoubtedly the decision will be appealed, either through a certified interlocutory appeal, or when the there is a final judgment; but, its careful position seems solid. According to the Indianapolis Business Journal, CMG manages a bundle of rights that “include branding rights, trademarks on Marilyn Monroe’s name and signature, and copyrights of certain photographs.” I suspect these trademarks and branding rights may be subject to attack if the putative owner has no corresponding right to Marilyn’s identity.

The real issue is how to fairly treat concurrent right of publicity and copyright rights in works, just as in the June Toney case last year (discussed in the Photoshop Blog and the Patry Copyright Blog). Surely it cannot be fair to require a photographer to negotiate a model contract for a post-mortem right of publicity that does not exist. Nor could it possibly be fair to make a photographer's heirs negotiate with a model's heirs over their respective inherited rights when the model and photographer could not have contemplated the issue.

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The tri-frontal attack on YouTube's business model spawned an interesting (probably to lawyers only) side skirmish the other day when a second class action complaint was filed by mandolin player and former Grateful Dead jammer David Grisman.  Grisman, along with his company Dawg Music and his partner Craig Miller, seek to represent a class of other musicians and copyright owners whose works are posted on YouTube without permission or compensation.  This filing falls on the heels of the class action complaint filed earlier this month by the English Premier League charging YouTube with massive copyright infringement.

The allegations in the two complaints are largely the same.  In fact, for the most part they are EXACTLY the same.  And that raises the question, asked by the Wall Street Journal Law Blog, whether wholesale copying of a filed complaint--alleging copyright infringement, no less--is itself copyright infringement.  Copies of both complaints are posted there.

This may be a bit of "inside baseball" to non-lawyers, but the blog post, and in particular the extensive comments thread, expose a heated debate that goes beyond the copyright question and touches on significant questions of legal ethics.  For example, many lawyers use form books or keep form files of different pleadings that they can lift from when preparing a new filing.  This can be very useful and efficient both for the lawyer and the client, and is probably not very controversial when you're talking about a simple appearance form or routine discovery requests.  However, what about a 40-page complaint?  Even if it contains similar factual allegations and legal theories, don't the lawyer's ethical obligations -- to investigate all the facts he or she alleges, for example -- require some modicum of originality?  And what about the bill the lawyer sends to the client? Is it OK to do wholesale copying if you only charge your client for the time it takes you to change the caption and the signature block? 

As to the copyright question, I tend to agree with Keith Henning at the copywrite blog.  He references an article by Professor Davida H. Isaacs applying a fair use analysis to the copyright question (see Davida H. Isaacs, The Highest Form of Flattery? Application of the Fair Use Defense against Copyright Claims for Unauthorized Appropriation of Litigation Documents, 71 Mo. L. Rev. 391 (2006)) as well as Professor Nimmer, but ultimately concludes that the allegations of fact in a complaint typically do not contain the level of originality required for copyright protection.  I don't think wholesale copying of this type is a good (or ethical) practice, but I'm not sure that it is copyright infringement.

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Some days, keeping watch along the fair use border makes you feel like Paris Hilton inside the Fermi National Accelerator Laboratory.  Other days you feel like a pledge at a wild Delta House frat party in Animal House.  Today is a Delta day, brought to you by the good jurists of the Seventh and Ninth Circuit.  To paraphrase Herman Melville, Call me Flounder.

We begin with the magical opening paragraph of Circuit Judge Diane Woods' opinion in the Seventh Circuit's recent copyright decision in JCW Investments, Inc. v. Novelty, Inc.:

Meet Pull My Finger Fred.  He is a white, middle-aged, overweight man with black hair and a receding hairline, sitting in an armchair wearing a white tank top and blue pants.  Fred is a plush doll and when one squeezes Fred's extended finger on his right hand, he farts.  He also makes somewhat crude, somewhat funny statements about the bodily noises he emits, such as "Did somebody step in a duck?" or "Silent but deadly."

And we continue with a bevvy of beautiful babes in the buff, delivered compliments of a Google "Image Search" for the phrase "Perfect 10" that is the subject of the Ninth Circuit's recent copyright opinion in Perfect 10 v. Amazon.com.  These two cases -- whose fact patterns could have been selected by the cast of Porky's -- shed important light on two fair use issues.

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This past Fall, the Second Circuit affirmed summary judgment in favor of Jeff Koons in a claim against him for copyright infringement. You can read a good analysis of this opinion at the Patry Copyright Blog. Be sure to check out the concurring analysis at the Art Law Blog as well. For a brief, but straightforward summary, look at the Fair Use Network’s post.

Here is an image of Koons’s challenged work, “Niagra” from the Court record (see the Guggenheim Museum’s website for the work in color).

You can compare that with the plaintiff’s appropriated work “Silk Sandals by Gucci” from Avedon protégé Andrea Blanch in the Allure advertisement from the Court record.

A good and fair result.

However, last Wednesday, the District Court in Blanch v. Koons, Case No. 03-cv-8026, (S. D. N.Y., Doc. 71, entered May 9, 2007), announced that his “fair use” cost Koons over $1 million in attorneys’ fees and costs.

As the District Court wrote:

17 U.S.C. § 505 provides in copyright actions that:

In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.

The standard for determining whether a party is entitled to attorneys’ fees is the same whether the prevailing party is the plaintiff or defendant. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). The following factors may be used to guide a court’s discretion so long as they are faithful to the purposes of the Copyright Act: “‘frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.’” Id. at 534 n.19, quoting Lieb v. Topstone Industries, Inc., 788 F.2d 151, 156 (3d Cir. 1986).

The District Court seems to have relied heavily on the fact that Koons is an “appropriation artist” who has been sued before for copyright infringement. Appropriation art has a long lineage in the visual arts, extending back at least as far as Picasso and Duchamp, but it raises very difficult copyright issues, including derivative works and fair use. For an interesting discussion of the appropriation art intersection with law and economics, see William M. Landes, Copyright, Borrowed Images and Appropriation Art: An Economic Approach, (December 2000). University of Chicago Law & Economics, Olin Working Paper No. 113. Koons has been sued — and lost — several times for copyright infringement over his use of pre-existing images in his work: Rogers v. Koons, 960 F.2d 301 (2d Cir. 1992) (use of photograph of couple with puppies as basis for sculpture “String of Puppies”); United Features Syndicate, Inc. v. Koons, 817 F. Supp. 370 (S.D.N.Y. 1993) (use of Garfield comic strip character “Odie” in sculptures entitled “Wild Boy and Puppy”); and, Campbell v. Koons, Case No. 91-cv-6055, 1993 WL 97381 (S.D.N.Y. Apr. 1, 1993) (use of photograph of boy with pig as basis for sculpture “Ushering in Banality”).

Koons clearly pushes the fair-use envelope, but if it costs over $1 million dollars to defend a victorious fair use, how many people will risk it. If Blanch had prevailed, would she have recovered her attorneys’ fees and profits? Although fair use is now codified, it implicates the First Amendment. When the costs of litigation chill First Amendment expression, it certainly seems that attorneys fees and costs should be paid. Compare this in light of the Supreme Court concurrence recently noted at the Volokh Conspiracy regarding fee shifting in a First Amendment political speech case. Koons’s past cases may suggest that little would chill his speech, but what about other artists. If there is a post-modern/consumer-culture comment to be made with appropriation of a visual image, won’t the commentator think twice about making the comment before incurring the risk of substantial defense costs? If most commentators agree that in this particular instance, the fair-use defense was clearly right, then should the defendant bear the costs of the defense? It seems that the attorneys’ fee shifting provision in the Copyright Act would have remedied any past misjudgments and that each instance of speech should be examined on its own merits.

It strikes me that the litigation pendulum has swung back and forth in its appreciation of the First Amendment litigant. Some champions of the First Amendment have been heralded as heroes and others reviled as villains. As Larry Flynt is depicted as saying in The People v. Larry Flynt, “ If the First Amendment will protect a . . . scumbag like me, then it will protect all of you . . . ‘cause I’m the worst. Certainly some might place Koons into the same category as Larry Flynt. (Koons created sexually explicit artwork with his former wife Ilona Staller in arte Cicciolina, in a series entitled “Made in Heaven — this website has links to galleries of several of Koons’s series of works, including “Made in Heaven”). Regardless, I question whether the right to recover defense fees and costs should be based upon a judge’s subjective determination of the societal value of the challenged expression. I wonder whether the fee decision in Blanch v. Koons would have been different if fair use were a First Amendment action rather than a statutory defense? Should fair-use defendants assert a First-Amendment declaratory judgment counterclaim to increase their chances of recovering their defense costs as a prevailing party?.

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The First Amendment does not explicitly say that it applies to thoughts and ideas. I wonder if patent law would be different if it did.

Several years back, we got my youngest a LeapPad® that he liked to read in the car. If you haven’t seen or used one, they are pretty cool. It is a hinged plastic case (kind-of a cross between a binder and a clam-shell) into which you can insert certain books and their related memory cartridges.

According to LeapFrog®, you ”Put a book on the LeapPad player and pop in the cartridge. Stories suddenly come to life with the light tap of the Magic Pen. Touch a word and sound out each letter. Then spell it and define it. Silly songs serenade. Characters charm everyone with their hilarious sense of humor.”

When we first got this slick, new, electronic toy, I thought it was very clever. It won awards. My nieces and nephews each got them. It is made by LeapFrog®, which had rights in U.S Patent No. 5,813,861 (“the ‘861 Patent”) related to the technology used in this toy.

When my youngest broke his LeapPad®, we wanted to get him something else to use on those long trips to the family in Michigan or on the East Coast.

Along came Fisher-Price® with its PowerTouch™. What a great idea! Wait, there is something familiar about this. It is a hinged plastic case (kind-of a cross between a binder and a clam-shell) into which you can insert certain books and their related memory cartridges.

Apparently LeapFrog® took issue with appropriation of this great idea by Fisher-Price® and sued for patent infringement.

What does that have to do with fair use?

Yesterday, the Federal Circuit, for the first time since the U.S. Supreme Court decided KSR International Co. v. Teleflex Inc., affirmed a district court invalidity decision based upon obviousness. It was the LeapFrog case. This decision cites the Supreme Court twice. KSR will clearly have a significant impact on this area of the law and a single decision will not sort all of this out. If you’d like to jump straight to the two citations and find a collection of discussions about the impact of KSR, check out today’s post (KSR Teleflex Obviousness Standard Applied by the Federal Circuit in Leapfrog v. Fisher-Price & Mattel) by Andy Kaulins at Law Pundit.

The LeapFrog case does not provide significant new insight into KSR, but for those of us with little kids who play with these things, it suggests something very basic about obviousness. It is the patent-law version of fair use. Fundamentally, in every IP lawsuit, there is an assessment of what is fair. Patent cases are no different. The standards for this fairness assessment are the legal guidelines for liability and the defenses. In litigation (more in motion practice rather than trial), and particularly on appeal we tend to focus on one narrow issue at a time. Copyright law makes fairness a single legal issue. In patent law it is not.

As a result, the legal standards in patent law develop without a firm grounding in what is fair. Not to be too philosophical about it, patent law is the most “positive law” discipline of the various IP disciplines. Consequently, from time to time, the standards get misaligned from the fairness assessment that is at the heart of these disputes. Then either Congress or the Supreme Court must step in and realign the standards.

Perhaps KSR will be one of those instances. This post on fedcirc.us analyzing KSR certainly suggests that the Court was pulling things back and directing the lower courts to look at obviousness with a flexibl ecommon sense approach. If a patented invention was “obvious,” it should be freely available to the public. Perhaps the Supreme Court — and now the Federal Circuit — are merely saying that patent law has made it too easy to prevent the public from using unearned ideas. I don’t know.

I do know, obvious or not, getting my kid to read is a great idea.

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Is YouTube guilty of massive copyright infringement?  Or is it protected by the so-called "safe harbor" of the Digital Millennium Copyright Act, 17 U.S.C. 512(c)?  Yet another lawsuit now seeks to determine the answer to that question. 

(For a good primer on the DMCA's Safe Harbor provisions, see this very helpful FAQ at the internet law collaborative Chilling Effects Clearinghouse.)

The first big copyright challenge to YouTube's business model came last summer with a lawsuit filed by Robert Tur, a Los Angeles photojournalist whose video footage of the beating of Reginald Denny in the post-Rodney King verdict riots in 1992 became world-famous.  See Robert Tur v. YouTube, Inc., No. 2:06-cv-04436-FMC-AJW, United States District Court for the Central District of California, July 14, 2006.  Tur alleged that his Denny footage, along with copyrighted footage of the OJ Simpson chase and other events was posted on YouTube without his consent and viewed more than 1,000 times.  YouTube has defended by claiming that it is an Online Service Provider (OSP) protected by the DMCA safe harbor because it is not aware of and does not receive a financial benefit from the presence of infringing works on its site and its notice and take-down provisions meet the statute's requirement that infringing works be quickly removed.  YouTube filed a motion for summary judgment on the basis of this defense, which is currently set to be heard on May 21.  Tur has also filed a motion for summary adjudication on more narrow grounds, specifically challenging YouTube's claim that it does not receive a financial benefit from the presence of infringing works on its site.  This motion is also currently scheduled to be heard on May 21. 

The second front opened up in March of this year, when Viacom filed suit against YouTube and its parent Google, alleging massive copyright infringement of hundreds of thousands of Viacom properties.  See Viacom International, Inc. v. YouTube, Inc., No. 1:07-cv-02103 (LLS), United States District Court for the Southern District of New York.  Like Tur, the Viacom case will likely turn on whether YouTube's business model fits within the safe harbor provisions of section 512(c).     

Most recently, just days after filing its Answer in the Viacom lawsuit, and while it awaits the summary judgment ruling in the Tur case, YouTube and its parent Google were hit with another legal challenge to its highly successful but highly controversial business model.  This time it comes in the form of a class action complaint filed by the Football Association Premier League Limited (the top division of English soccer) and Bourne Co. (an independent music publisher in New York). 

Many of the contours of this lawsuit are similar to Tur and Viacom, but the class action approach is a new angle.  For one thing, you too might be a class member if you own the copyright or relevant exclusive rights in a registered copyright or certain sound recordings that have appeared on YouTube any time after December 15, 2005.  Obviously, that potential class is enormous, and probably renders many of YouTube's most fervent devotees potential plaintiffs against it.  I'm not going to try to address all the class certification issues that may come up, but suffice to say that will be a battle in itself.

One of the main substantive challenges brought by the plaintiffs in all three of these cases focuses on YouTube's claim that it does not derive a financial benefit attributable to the presence of infringing material on its site.  YouTube sells advertisements that run along side its video clips, including infringing clips, but these ads are not directly triggered by or connected to any particular video clip, infringing or otherwise.  There can be no doubt that YouTube has made huge amounts of money from these ads, and the plaintiffs all argue that YouTube would not be making the money it has but for the presence of so much infringing material on its site.  This could ultimately be a decisive factor in these cases, in part because a court could find YouTube outside of the safe harbor without having to address the propriety of its notice and take-down procedures.

It will be interesting to watch if any more suits are filed, or if other potential plaintiffs will wait for a key ruling in one of these cases.  The Tur case could lead the way depending on how the court rules on YouTube's pending summary judgment motion.  While the Central District of California's ruling will not be binding on the Southern District of New York, it will likely carry significant weight. 

Almost certainly aware of this, and obviously interested in the pending motions on YouTube's assertion of the DMCA's safe harbor defense, last week Viacom and NBC Universal asked permission to file an amici curiae ("friends of the court") brief in support of Tur's claims on this issue.  According to the court's electronic filing database, however, on Tuesday the court denied this request, finding that the brief was not offered to aid the court in its decision-making (as required for submission of such briefs), but was in reality "an effort by parties engaged in similar litigation against Defendant, to intervene in this case for their own benefit."  Like the rest of us, Viacom and NBC will just have to watch from the sidelines.

We'll be watching these cases closely, and should have more analysis of some of the specific legal issues later. 

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Mike Kahn had a post recently about the growing split among courts in different Circuits regarding whether use of a competitor's trademark in metatags or keywords was a "use in commerce" under the Lanham Act.  Discussing a recent Northern District of California case that found such a use to be actionable, Mike argued persuasively that if the trademark does not appear in the sponsored link or anywhere else in relation to the competitor's products or services, it is not "used" as defined under the Act. 

Today a judge in the Eastern District of New York weighed in on Mike's side of the argument.  In Site Pro-1, Inc. v. Better Metal, LLC, No. 1:06-cv-06508, EDNY, May 9, 2007, the court found that the defendant's use of the plaintiff's trademark in both metatags and key words in a sponsored search on Yahoo! did not violate the Lanham Act because the trademark did not appear on the defendant's sponsored link, or website, or anywhere else in connection with any products or services offered by the defendant: 

"The key question is whether the defendant placed plaintiff's trademark on any goods, displays, containers, or advertisements, or used plaintiff's trademark in any way that indicates source or origin.  Here, there is no allegation that Better Metal did so, and therefore no Lanham Act "use" has been alleged.  Indeed, the search results submitted as an exhibit to the complaint make clear that Better Metal did not place plaintiff's SITE PRO 1 trademark on any of its goods, or any advertisements or displays associated with the sale of its goods.  Complaint, Ex. B.  Neither the link to Better Metal's website nor the surrounding text mentions SitePro1 or the SITE PRO 1 trademark.  The same is true with Better Metal's metadata, which is not displayed to consumers."

As with Mike's analogy to beer billboards near baseball stadiums in St. Louis and Milwaukee, the court found such use to be simply the latest version of side-by-side advertising.  Quoting another district court case from within the Second Circuit, Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 431 F. Supp. 2d 425, 427 (SDNY 2006), the court concluded: 

" . . . this use is more akin to the product placement marketing strategy employed in retail stores, where, for example, a drug store places its generic products alongside similar national brand products to capitalize on the latter's name recognition.  The sponsored link marketing strategy is the electronic equivalent of product placement in a retail store."

Once you get past the initial reaction that use of one party's trademark to drive traffic to a competing website somehow just seems wrong, this holding makes sense and is more consistent with traditional trademark principles.  This reasoning has not yet taken hold outside of the Second Circuit, however, so for now, at least, the geographic divide on this issue continues. 

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Since Professor Lessig and a large bi-partisan group of others issued their call to the Repubican and Democratic National Committees to require television networks to make the video recordings of all Presidential Debates available to the public for free -- either by placing the videos in the public domain or issuing them under a Creative Commons (Attribution) license (see earlier post here) -- several candidates and two networks have weighed in.

According to Lessig's blog, Democrats Barack Obama, John Edwards and Chris Dodd have all written strong letters to the DNC announcing their support for this proposal.  Apparently there is nothing yet from any of the Republican candidates, and Democrat Hillary Clinton has also remained silent. 

Among the networks, CNN has come out in support of this proposal and has announced that it will place no restrictions on presidential debate footage:

Due to the historical nature of presidential debates and the significance of these forums to the American public, CNN believes strongly that the debates should be accessible to the public. The candidates need to be held accountable for what they say throughout the election process. The presidential debates are an integral part of our system of government, in which the American people have the opportunity to make informed choices about who will serve them. Therefore, CNN debate coverage will be made available without restrictions at the conclusion of each live debate. We believe this is good for the country and good for the electoral process.

By contrast, Lessig and USA Today's OnPolitics blog are reporting that Fox News Channel will not follow CNN's lead and will not make its video footage available for all to use. 

No word  yet from either the RNC or the DNC.  Check with Lessig for regular updates -- he's keeping a good scorecard . . .

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