There’s a story of a proposed bike path in Los Angeles that met opposition from NBC Universal, which had a production studio in the area. Several Universal executives apparently feared the path would be used by aspiring screenwriters to toss unsolicited scripts into the studio parking lot. 1Steve Hymon and Andrew Blankstein, Studio poses obstacle to riverfront bike path, LA Times, Feb 27, 2008.

True or not, companies in the creative fields are typically wary of accepting unsolicited ideas. It’s not uncommon for successful projects to be met with claims of “idea theft” — recent examples in the news include Ugly Betty, Alien vs. Predator, and Premium Rush.

That list also includes the Syfy program Ghost Hunters, produced by Pilgrim Films in partnership with NBC Universal. Last May, in Montz v. Pilgrim Films & Television, the 9th Circuit reversed the district court’s decision to dismiss claims that the studio had taken the idea for the show from someone else without compensation. Now, the studios have asked the Supreme Court to reverse.

SCOTUSBlog highlighted the studio’s cert petition in Pilgrim Films & Television v. Montz (PDF) last Wednesday.

Ghost Hunters

This story begins in 1981, when parapsychologist Larry Montz came up with an idea for a TV show that followed paranormal investigators as they looked for evidence of paranormal activity in real-world locations. Montz and his publicist pitched the idea to several studios from 1996 to 2003, including NBC and the Sci-Fi channel. All the studios passed on the idea.

The Sci-Fi channel, however, eventually premiered Ghost Hunters, a TV show that followed a team of paranormal investigators to real-world locations looking for signs of ghosts. Montz sued the producers of Ghost Hunters in 2006, along with NBC Universal (which had partnered with the producers of the show), claiming that they had based the show on his idea.

Montz specifically claimed that he had pitched the idea to the producers under the condition that he would be compensated if they used it. By creating a show based on his idea without paying him, the studios breached an implied-in-fact contract with Montz.

The district court dismissed the state claims on the grounds that they were preempted by federal copyright law. On appeal, the 9th Circuit affirmed. 2Montz v. Pilgrim Films & Television, 606 F.3d 1153 (2010). But then the Circuit ordered a rehearing en banc. It reversed the lower court’s holding, finding that Montz’s implied-in-fact contract and breach of confidence claims were not preempted by the Copyright Act.

It is this decision that is being appealed to the Supreme Court.

Idea/Expression Distinction

Before looking at the details of copyright preemption, I think it’s worthwhile to take a look at one of the broader issues raised by this appeal — the idea-expression distinction.

Copyright protection extends not to physical objects, but to the immaterial aspects conveyed by those objects in the form of words, images, sound, etc. But the scope of copyright protection is limited even further. William Blackstone, describing copyright in his seminal Commentaries on the Laws of England (1765), distinguished between sentiment and language;  today we use the terms idea and expression to make the same distinction. Copyright gives authors exclusive rights in their expression, but the ideas conveyed in any given work are free to all.

The cert petition explains the importance of this distinction:

For more than a century, it has been settled law that “[n]o author may copyright his ideas.” This is, indeed, “[t]he most fundamental axiom of copyright law.” Even before the Copyright Act of 1976, therefore, only an author’s expression could be copyrighted: The “general rule of law” was “that the noblest of human productions” — including “ideas” — “become, after voluntary communication to others, free as the air to common use.”

The Copyright Act of 1976 retained this longheld distinction between ideas and expression: Section 102 expressly declines to “extend [copyright protection] to any idea,” “regardless of the form in which it is … embodied in [a] work.” [Citations removed].

Since the Copyright Act of 1976, the Supreme Court has held that the idea-expression distinction has another important purpose: serving as one of copyright’s “built-in free speech safeguards.” Distinguishing between ideas and expression “strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an author’s expression.” 3Eldred v. Ashcroft, 537 US 186, 219 (2003), quoting Harper & Row v. Nation Enterprises, 471 US 539, 556 (1985).

Federal Preemption of Copyright Claims

By the time the US Constitution was drafted, twelve of the thirteen colonial state governments had copyright laws. 4William Patry, Copyright Law and Practice, chapter 1 (BNA 1994). The Framers, specifically James Madison, gave the new federal Congress exclusive power to enact copyright laws primarily to ensure national unity. “The States cannot separately make effectual provision for” author’s rights, wrote Madison in the Federalist 43 about why the Copyright Clause was needed.

Since then, the federal government and the states shared the power to grant copyrights. In 1973, the Supreme Court noted, “the language of the Constitution neither explicitly precludes the States from granting copyrights nor grants such authority exclusively to the Federal Government.” 5Goldstein v. California, 412 US 546, 560. This dual system of copyright was done away with, however, when Congress passed the Copyright Act of 1976.

Under the Act:

On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright … are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State. 617 USC § 301(a).

Courts determine if a state cause of action is preempted by the Copyright Act by looking at whether the work in question is within the subject matter of copyright and whether the state claim protects rights equivalent to those protected by copyright. The state claim isn’t equivalent if it has an “extra element” — one that makes the claim qualitatively different from a copyright claim, changing the nature rather than the scope of the action.

Ideas are certainly not subject matter protected by copyright law; the question always comes down to whether a state claim contains the necessary “extra element” that would preclude it from preemption.

State claims that have been found by courts to be preempted by the Copyright Act include, to name a few, conversion, trespass to chattels, unfair competition, and tortious interference with business expectancy. 7See for example, Globeranger Corp v. Software AG, No. 3:11-CV-0403-B (ND Tex, Aug. 15, 2011); Two Palms Software v. Worldwide Freight Managment, No. 4:10-CV-1045 (ED Miss, Feb. 18, 2011); 78th Infantry Division, WWII Living History Association v. Oprendek, No. 11-165 (RBK/JS) (D.NJ, Aug. 4, 2011).

But Circuit courts are split on cases like Montz. As the studios point out in their cert petition, the Second and Fourth Circuits would have dismissed Montz’s state law claims under their interpretation of the Copyright Act’s preemption provision.

Not so in California and the Ninth Circuit. For over 50 years, California courts have recognized “an implied contractual right to compensation when a writer submits material to a producer with the understanding that the writer will be paid if the producer uses the concept.” 8Desny v. Wilder, 299 P.2d 257 (Cali. 1956). In 2004, the Ninth Circuit held that such claims are not preempted by the Copyright Act. 9Grosso v. Miramax Film Corp., 383 F.3d 965.

Montz v. Pilgrim Films & Television

The decision in Montz reaffirmed what the Circuit judges saw as a long-standing protection of ideas under contract law when there is a “bilateral expectation” of compensation. This promise of payment, said the court, is the “extra element” that makes contractual claims “substantially different” from copyright claims.

The court also believes its decision to protect ideas in this fashion is good policy, considering the nature of the entertainment industry. “Without such legal protection,” it said, “potentially valuable creative sources would be left with very little protection in a dog-eat-dog business.”

Pilgrim Films & Television v. Montz

The studios argue that the Supreme Court should grant its petition because the Ninth Circuit incorrectly interpreted the scope of copyright preemption, the decision further deepens the previously mentioned circuit split on preemption, and the question presented is important to maintaining national unity in copyright law.

They first note the difficulty courts have had applying the “extra element” test in preemption cases. It provides little guidance to courts, and this case is a prime example:

The Ninth Circuit’s analysis began and ended with the fact that, under California law, Montz was required to allege a “promise” to pay for his ideas. But this analysis simply highlights the danger of the “extra element” approach: The “implied agreement of payment for use of a concept” is, at least formally, an extra element, but it does not render Montz’s claims qualitatively different from a copyright infringement claim. Rather, the core of Montz’s allegations is that the defendants copied his ideas and developed derivative works based on his screenplays, videos, and other materials–and the right to prevent them from doing so is protected, if at all, only under the Copyright Act.

The studios next argue that the circuit split on this issue is largely a result of the “extra element” test — the inconsistency of its application illustrates the challenges courts face. This is a particular concern, the studios argue lastly, since the goal of preemption is to ensure consistency and uniformity in copyright law.

The studios also counter the Ninth Circuit’s policy argument, saying that its decision would actually hurt more than help those looking to get their foot in the door of the entertainment industry:

[The decision] has the potential to frustrate the public interest in obtaining fresh ideas and scripts from previously unknown writers. Even before that decision, producers were “already extremely wary about accepting unsolicited idea submissions, leaving only the slightest crack in the door for an aspiring unknown writer to get through.” But to avoid potential liability, producers are now forced to “pull the door shut entirely, leaving unknown writers with even less bargaining power than they had before.” Because of “fear that [they] could unintentionally enter into an implied contract with the screenwriter,” studios have “limit[ed]” their “willingness … to consider unsolicited ideas or pitches.”

Will the Supreme Court grant the petition? Only time will tell. The Court grants only a tiny percentage of all petitions filed. The fact that the Court hasn’t dealt with an issue relating to the Copyright Act’s preemption provision raises the chances, as does the fact that there’s a Circuit split on this question. The petition is also likely to attract a lot of attention — both the MPAA and the major television networks filed amici briefs when the 9th Circuit heard the case.

References   [ + ]

1. Steve Hymon and Andrew Blankstein, Studio poses obstacle to riverfront bike path, LA Times, Feb 27, 2008.
2. Montz v. Pilgrim Films & Television, 606 F.3d 1153 (2010).
3. Eldred v. Ashcroft, 537 US 186, 219 (2003), quoting Harper & Row v. Nation Enterprises, 471 US 539, 556 (1985).
4. William Patry, Copyright Law and Practice, chapter 1 (BNA 1994).
5. Goldstein v. California, 412 US 546, 560.
6. 17 USC § 301(a).
7. See for example, Globeranger Corp v. Software AG, No. 3:11-CV-0403-B (ND Tex, Aug. 15, 2011); Two Palms Software v. Worldwide Freight Managment, No. 4:10-CV-1045 (ED Miss, Feb. 18, 2011); 78th Infantry Division, WWII Living History Association v. Oprendek, No. 11-165 (RBK/JS) (D.NJ, Aug. 4, 2011).
8. Desny v. Wilder, 299 P.2d 257 (Cali. 1956).
9. Grosso v. Miramax Film Corp., 383 F.3d 965.

Consumption is a Human Right? — Another great post from Faza, taking on the weakness of the “access to culture” argument. “As human rights go, access to culture is a rather weak one. I mean, seriously, whatever happened to food, housing and healthcare? Compared to a lack of any of those, not being able to listen to the new album from [X] is a minor tickle. So why aren’t we getting any of those for free?”

Bill would help combat copyright offenders on the Internet — The Washington Post weighs in on the PROTECT IP Act. “[It] takes pains to protect Internet service providers, search engines and others that may have done business with a rogue site … But there is a need for a legal tool that stops those who persistently leech off of the innovations of others.”

Ontario Court of Appeal Rules In Tucows v. Renner: Domain Names Are Personal Property — Before this, no Canadian appellate court had reached the issue. Matt Lonsdale of IP Osgoode examines the decision, which aligns Canada with the dominant view that domain names can be treated as property, a view shared by US courts.

HSI agents arrest website operator for illegally streaming copyrighted sporting events — ICE announced it had arrested the operator of one of the sites whose domain names had been seized as part of Operation in Our Sites. The owner of and has been charged with one count of criminal copyright infringement for allegedly streaming live sporting events through the website.

Hollywood Buzz in Cleveland, Ohio — Film production creates jobs and boosts local economies. Recent local news channels highlighted these positive effects in Cleveland, currently home for production of The Avengers and I, Alex Cross.

The Jobs Program — Rob Levine weighs in on Steve Jobs resignation and the success of Apple despite the company doing the opposite of what technology pundits consistently preach.

Petition of the Day: Pilgrim Films & Television v. Montz — SCOTUSBlog highlights this petition to the Supreme Court from Pilgrim and NBCUniversal, stemming from a dispute between them and a parapsychologist, who alleged the idea for the Syfy program Ghost Hunters was taken from him without compensation. The 9th Circuit ruled in favor of him; Pilgrim appeals to the Supreme Court on the basis that such a claim should be pre-empted by the Copyright Act.

Bestselling Self-Published Author Signs Deal with Simon & Schuster — John Locke, who became popular in the blogosphere after selling millions of copies of his self-released books, becomes the latest in the line of such authors to join forces with a traditional publisher.

Crowdfunding Concerns — It’s all fun and games till someone gets poked by the IRS. “Crowdfunding”, or micro-patronage, is becoming a popular alternative for raising money for a variety of creative endeavors. However, as Leslie Burns explains, creators interested in crowdfunding a project need to be careful to consider tax considerations and other legal issues before beginning.

The Potential Cost of PROTECT IP: Our Take — The MPAA comments on the Congressional Budget Office’s $47 million cost estimate for implementing the proposed legislation.

The Copyright Alert System — A couple of recent pieces exploring July’s announcement of an agreement between US ISPs and the music and film industry to fight online piracy. Songwriters Guild of America president Rick Carnes discusses the agreement at the Arts+Labs blog, while the Kluwer Copyright Blog looks at it in the context of similar international and European measures.

Book Review: Robert Levine, Free Ride — The Cynical Musician reviews Levine’s Free Ride. “Levine’s single biggest contribution to the debate on the future of online media is that he manages to demonstrate, very clearly, that rather than a question of morality or ideology, it is one of economics.”

Stop Criminalizing Our Kids: Google Drugs Pays Record $500 Million Fine to Avoid Jail … For Now — Chris Castle discusses the record forfeiture of Google’s profits in connection with ads for illegal importation of prescription drugs. The settlement agreement between the Department of Justice and Google is available here.

Documenting how a bill becomes a law — Many of the documents produced during the legislative process are available online, but compilations of a bill’s entire legislative history are not as readily available, meaning lawyers and researchers have to do a lot of legwork to piece together the reports, hearings, committee prints, and draft bills that shed light on the intent of a law. The US Department of Justice has just released a collection of compiled legislative histories for a number of landmark bills that its staff uses internally. Kudos to the DOJ for making this valuable resource available to the public.

The following is from the beginning of Appleton Morgan’s 1875 treatise, “Law of Literature,” which has been said to have “codified the law of literary property in the United States.” 1The National Cyclopedia of American Biography, “Morgan, Appleton“, Volume 9, pg 452, James T. White & Co. (New York, 1899).

Before the invention of the art of printing, we have seen that literary compositions were published, either by delivery, by word of mouth, or by a laborious and careful copying of the manuscript upon parchment, which was then wound upon rollers into a volume or book. Still later, writings were published by being inscribed upon parchment, and scattered broadcast along the highways, or over the fields. Says the outlaw’s song of Trail le Baston:

Escrit estoit en parchemyn pur mont remember
Egitté en haut chemyn qe urn le dust trover. 2“It was written on parchment to be well remembered / And cast into the highway, that some one should find it.”

This method of publication seems to have been employed until quite the sixteenth century. We find mention of “a libel or book entitled ‘The Supplication of Beggars/ thrown and scattered at the procession in Westminster, on Candlemas day (2 February, 1562), before King Henry the Eighth, “for him to read and peruse”; and of Wolsey, complaining to that king, “of divers seditious persons having scattered abroad books.” So, too, Burdett was tried “for conspiring to kill the king and prince by casting their nativities, fortelling the speedie death of both, and scattering letters containing the prophecy among the people.” Copyright is a modern contrivance by which an author may, if he will, still scatter his productions to the four winds, and yet retain, if he will, the exclusive control over them, and over their further multiplication. It is a provision by which the contents of the scattered page are still his (disconnected from any possession in plate, or type, or paper, or in any other physical existence), constituting a property in which he can traffic, and which he can buy and sell and bestow.

The privilege of an author to the exclusive sale of his works for a limited number of years, although practically in the nature of a monopoly, is not a monopoly in the odious meaning of the term.

A monopoly proper is a right given to one individual to produce or traffic in a commodity which others are fully as able to produce or traffic in as he, if permitted to do so. A monopoly is a rule against competition. But there can be no competition in the productions of a man’s own brain. A man has, by natural law, a right to the exclusive power of first disposing of his own productions or manufactures; and the pursuit and enjoyment of that exclusive right can never be a monopoly. The author only has given him, by law, what in morality, equity, and good conscience, he had before. Or, to speak more accurately, the law gives him a method of asserting and protecting his right. Statutes of copyright only shift the burden of proof in favor of the author.

That copyright laws are beneficial to the public, as well as to the author, cannot be questioned. Rich and vast as are our stores of literature, how much richer and vaster might they have been, if the first English copyright act had been the act of Elizabeth instead of the act of Anne; or if the days of Chaucer, no less than the days of Dryden, had been enlightened by such protective legislation!

It is not improbable that we owe to the fact, that, in his day, a manuscript or published work, was practically without protection and not to be intrusted beyond the writer’s hand, that no authentic and authoritative text of Shakespeare exists, and nothing but inaccurate, interpolated, and expurgated texts of Fletcher, Beaumont, Webster, and a score of other contemporary writers. So long as a service to literature is a service to the people, copyright laws cannot be classed as mere individual monopolies. The only property which is reserved to the author, and which the law gives him, is the exclusive right to multiply copies of that particular combination of character which exhibits, to the eye of another, the ideas he intends to convey.

The Law of Literature, by James Appleton Morgan. Vol. II, James Cockcroft & Co. (New York, 1875).

References   [ + ]

1. The National Cyclopedia of American Biography, “Morgan, Appleton“, Volume 9, pg 452, James T. White & Co. (New York, 1899).
2. “It was written on parchment to be well remembered / And cast into the highway, that some one should find it.”

Rick Falkvinge, founder of the Pirate Party and self-described “political evangelist“, loves to tell stories.

Last week on TorrentFreak, Falkvinge wrote a post called Nobody Asked for a Refrigerator Fee. In it, he tells the story of the refrigerator and how it displaced the need for home delivery of ice blocks. The broader point is that this industry “had been made totally obsolete by technical development.”

Falkvinge compares this story to today, where some monolithic “copyright industry” is being displaced by “new expressions of culture” and file-sharing. The difference is that when the “ice distribution industry became obsolete”, “no refrigerator owner was sued for making their own cold and ignoring the existing corporate cold distribution chains.”

It’s a neat story, one that plays well with the anti-copyright crowd, but unfortunately gets a number of things wrong.

For starters (and this is only a sidenote), anyone who has been to a convenience store lately and seen bags of ice for sale can tell you that the “ice distribution industry” did not become obsolete with the arrival of the refrigerator. It is, in fact, a $2.5 billion industry today.

Secondly, Falkvinge’s equating of distributors of a single product to the entire “copyright industry” is inexact. The “copyright industry”, as it were, includes not only distributors, but also creators, producers, publishers, and various other component companies. The International Intellectual Property Alliance divides copyright industries in four general groups, and describes them like this:

The core industries include newspapers and periodicals, book publishing and related industries, music publishing, radio and television broadcasting, cable television, records and tapes, motion pictures, theatrical productions, advertising and computer software and data processing. Most of these industries are engaged primarily in the generation, production and dissemination of new copyrighted material. Some, such as software (including business, education and entertainment applications) and data processing, include both the generation of copyrighted material and its application.

The second group comprises the partial copyright industries, a disparate collection of industries, only part of whose products are copyrighted materials. These industries range from fabric to business forms to architecture. The third group, distribution, includes the industries that distribute copyrighted materials to businesses and consumers. Examples include transportation services, libraries, and wholesale and retail trade involved in the distribution of copyrighted products. The fourth group involves the copyright-related industries, those that produce and distribute products that are used wholly or principally in conjunction with copyrighted materials, such as computers, radios, televisions, and consumer recording and listening devices. We refer to the four groups together — core, partial, distribution, and related — as the total copyright industries. 1Copyright Industries in the US Economy, the 2002 Report, Stephen E. Siwek (2002).

Most importantly, just as “no refrigerator owner was sued for making their own cold and ignoring the existing corporate cold distribution chains,” no one has been sued for making their own music, or films, or any other product of creative effort.

No one has been sued either for the business model they’ve adopted, or the technology they use. And there are plenty of new ones in place, with varying levels of success. Jamendo uses BitTorrent technology to distribute its members’ music; Bandcamp gives emerging musicians a variety of methods for selling to fans, from pay-what-you-want digital sales to physical merchandise fulfillment — authors, filmmakers, and other creative professionals have a wealth of options alongside “traditional” avenues for distributing and marketing their works, all legal. The “copyright industries” themselves continue to innovate as well, with new, legal ways for people to experience existing content appearing every day.

What isn’t legal, however, is distributing or selling other people’s work without appropriate permission. Those companies and individuals that have done that — Napster, Aimster, Grokster, Limewire, Isohunt, et al. — have indeed been sued. Not because they “ignored the existing corporate distribution chain” but because they ignored the exclusive rights creators have to the products of their labor. Whatever business model or technology they used to do that is irrelevant.

I’m continually amazed that those like Falkvinge have such a difficult time with such a simple concept. Then again, it’s a lot easier to justify piracy by falsely characterizing it as simply a new way of doing business.

References   [ + ]

Yesterday’s court opinion from the record labels’ lawsuit against “online music entrepreneur familiar with high-stakes copyright litigation” Michael Robertson’s latest venture is a mixed bag — no big win for either side, though plenty of little items of interest. 

Capitol Records v. MP3Tunes, Memorandum and Order, No. 07 Civ. 9931 (SDNY Aug. 22, 2011).

Background on MP3Tunes and this litigation:

Here’s a quick rundown of the court’s holdings on the cross-motions for summary judgment:

  • EMI’s claim against MP3Tunes and Robertson for contributory copyright infringement for songs described in takedown notices but not removed from users’ lockers is granted.
  • MP3Tunes’ DMCA defense for all other infringement arising from its service is granted.
  • EMI’s direct infringement claim against Robertson  for unauthorized songs added to his personal locker is granted.
  • EMI’s direct infringement claims against other employees for unauthorized songs in their lockers remain.
  • EMI’s infringement claim as to MP3Tune’s reproduction of album cover art on its site remains.
  • EMI’s state unfair competition claim remains.

Other observations:

Unsurprisingly, no “red flag” knowledge of infringement was found. As Ben Sheffner noted in last years’ Viacom v. YouTube decision, this level of knowledge triggers a requirement to takedown infringing content in order to qualify for the DMCA safe harbor yet has been narrowed by this court so much as to become almost a “dead letter.” Here, the court rejected EMI’s argument that even keywords like “file-sharing” are not the kinds of facts that should make infringement apparent to MP3Tunes.

MP3Tunes had tried to discount many of the songs at issue by arguing that EMI had registered the copyrights in them as “works for hire” but hadn’t provided proof that they were, in fact, works made for hire. Last week, the NY Times ran several articles about the looming battle over copyright termination. The big issue is whether or not many popular sound recordings are works made for hire; had MP3Tunes successfully made this argument, it could have foreshadowed the outcome of any litigation over terminations. However, a copyright registration creates a presumption of the validity of the facts stated within it. MP3Tunes had the burden to rebut that presumption, so although it raised the argument, it hadn’t provided any evidence to back it up, so the argument fails.

Perhaps MP3Tunes’ most audacious argument was that, since EMI made some songs available for promotional download on some third-party sites, it essentially authorized all downloads of the song from any site: essentially abandoning its copyright in those songs. This argument didn’t convince the court at all. It noted, “Far from proving EMI’s intent to abandon its rights, the record reveals that EMI placed careful restrictions on the use of its promotional songs and required consumers to visit certain websites or provide valuable marketing information before downloading a song.”

Following the court order, Michael Robertson brought up the tired false conflict between the music and tech industries,  remarking, “Few companies have been able to stand up to the record labels attacks and get rulings from the court on key issues relevant to the future of the internet music.”

It’s true that few companies that have operated with reckless disregard for musicians’ copyrights have gotten favorable rulings from courts. But it’s also true that many other companies which respect those rights have become successful. There are currently hundreds of legal online music services that include tracks from the major record labels. 1IFPI Digital Music Report 2011. The success of these services prove that everyone — creators, service providers, and consumers — can win.

Both EMI and MP3Tunes have indicated this litigation is far from over. Several issues remain to be resolved — and either side can appeal this ruling. The Second Circuit’s decision in Viacom v. YouTube is also pending — since that decision will deal with many of the same DMCA issues raised here, parts of this decision may have a short shelf-life.

References   [ + ]

If the public desire a really free press, they must not look to it as a source of taxation; and if they are anxious for truth, for elevated and elevating sentiments, for ideas matured by study and reflection, and an honest exposition of grievances, they must recognise original articles as property, and secure them against a plundering appropriation by a copyright. 1Impediments to Knowledge“, The Reasoner, vol 6, pg 264 (1844).

Free Ride — Robert Levine, author of Free Ride, has a companion blog where he discusses issues and themes covered in his book (UK edition out now, US edition coming October 25th).

Book Review: “Free Ride: How Digital Parasites Are Destroying the Culture Business and How the Culture Business Can Fight Back” by Robert Levine — Speaking of Free Ride, Chris Castle has posted an excellent review of the book. “Levine has written a book that is a must read for all policy makers and indeed all professional creators.”

The Wait For Kirtsaeng Is Over: The 2d Circuit Holds, Consistent With The 9th Circuit’s Opinion In Omega v. Costco, That The First Sale Doctrine Applies Only To Goods Manufactured In This Country — Last week, I highlighted Andrew Berger’s article on several post-Costco cases pending in the 2nd Circuit. This week, the Circuit ruled on one of them, holding that the Copyright Act prohibits the importation of so-called “grey market goods.” Berger again provides an excellent analysis of the decision and considers its implications on the remaining 2nd Circuit cases dealing with similar issues.

German Court: No bonus for dubbing actor if film becomes blockbuster Interesting case from Germany, with analysis from Future of Copyright’s Peter van der Veen. The country has a provision in its copyright law that allows an author to ask for modification of his original contract if a work becomes a “blockbuster” and the original compensation was strikingly disproportionate to what the work went on to earn. The “dubbing actor” who replaced Johnny Depp’s voice in the German language version of Pirate’s of the Caribbean sought such relief, but the court denied his claim, noting that “the dubbing actor’s actual contribution is of merely ancillary importance to the film.”

How intellectual must intellectual property be? The Language Log notes the irony of using the term “intellectual” to describe Kim Kardashian’s rights in her persona (currently the subject of a lawsuit against Old Navy, who used a “lookalike” of Kardashian in TV ads).

Taking Back Song Copyrights — A recent NY Times article has brought attention to the looming battle over termination rights in sound recordings. JETLaw takes a look at some of the issues involved.

Large ISPs Profit From BitTorrent Traffic, Study Finds — TorrentFreak reports on a recently released study that looked at 500,000 internet users in 169 countries over a 2 year period. “Aside from showing that BitTorrent users download more and more data, the report also finds that large ISPs including Comcast are actually making money off BitTorrent traffic.”

Netflix vs. Blockbuster: What’s the best service for streaming and DVDs? — CNet compares the streaming and DVD offerings of the two services. It also looks at several other services offering TV and movies, including Hulu Plus, Amazon Prime, Vudu, iTunes, and CinemaNow.

“Copywritten” — The grammar of copyright

Two weeks ago, I linked to Jonathan Bailey’s piece on The Grammar of Copyright. One of the most common errors is using “write” instead of “right.” How common is this mistake? Even federal judges get it wrong sometimes:

It is enough to make out infringement — assuming actual copying — if the alleged infringing work is “substantially similar” to the protectible expression in the copywritten work.

Matthews v. Freedman, 157 F. 3d 25, 27 (1st Cir. 1998).

This section states in pertinent part that a non-profit library (such as that operated by EPPI) is free to rent, lease, or lend copywritten material without authority of the copyright owner, so long as the library owns a lawfully made copy of such material.

Zuk v. Eppi of the Medical College of Pennsylvania, 103 F.3d 294, 300 n.5 (3rd Cir. 1996).

Under such logic, any use of copywritten work would be “fair” as long as that use did not result in the copywritten work’s unauthorized reproduction by anyone other than the putative infringer.

Software Freedom Conservancy v. Westinghouse Digital Electronics, Opinion and Order, No. 09 Civ. 10155 (SAS) (SDNY Aug 8, 2011).

Lastly, DT’s programming content is protected by copyright. DT produces some original content to which it has the sole copyright, but it also obtains the copyright to provide viewers access to shows copywritten by third parties such as cable networks, movie distributors, and sports leagues.

DirecTV v. Borow, Opinion and Order, No. 03 C 2581 (ND Ill. Jan 3, 2005).

I note, however, that under both the Federal Copyright Act, and under the doctrine of “common law copyright” (to the extent it has any continued bearing here, in view of the extensive preemption of the area accomplished by the 1976 amendments to the Copyright Act), ownership of a copyright is something distinct from ownership of a physical object in which the copywritten work is embodied, so that ownership of one can (and often will) be transferred without transferring ownership of the other.

Nika Corp. v. City of Kansas City, 582 F. Supp. 343, 367 (WD Miss 1983).

References   [ + ]

1. Impediments to Knowledge“, The Reasoner, vol 6, pg 264 (1844).

Professional web designers typically know a little about copyright law since infringement is a liability for their business. Most know enough to avoid using images without the proper licensing or copying large amounts of text from another website.

But not as many pay as much attention to making sure they have the proper licenses for the fonts they use.

The company that designed and created US presidential candidate Rick Santorum‘s website has found out the hard way that this is risky.

On Tuesday, Netherlands typeface design company Typotheque filed suit against media consultant RaiseDigital for copyright infringement. Typotheque alleges that RaiseDigital converted one of its typefaces into a webfont for use on Santorum’s site without permission. Neither Santorum, his campaign committee, or the America’s Foundation PAC (which commissioned RaiseDigital to design the site) has been named as a defendant in the suit.

Typotheque is also seeking claims of contributory copyright infringement, federal trademark infringement, trademark dilution, unfair competition, and breach of contract.

Can typefaces be protected by copyright? Like many legal questions, the answer is not a simple yes or no.

Typefaces and Copyright

First, a little background on typefaces themselves.

A typeface, or font, is a designed set of letters, numbers, and other characters — Times New Roman, Helvetica, and Courier, for example. 1While “typeface” and “font” began with distinct meanings, the two terms have largely become interchangeable. See, for example, Derek H. Kiernan-Johnson, Telling Through Type: Typography and Narrative in Legal Briefs, 7 Journal of the Association of Legal Writing Directors 87, 91 (2010). These are contained in digital files for use by computers. Fonts come bundled with operating systems and some software packages; they can also be purchased separately — some developers offer their typefaces for free as well.

For a long time, web designers were hampered in choosing typefaces for a web site. Web browsers render a site using fonts that are local to a user’s computer. So even though a designer could conceivably style a web page with any typeface, if she wanted the site to look consistent on most computers, she would need to choose a typeface common to most computers — a very short list.

That has changed in the last several years, and there are now a number of techniques web designers can use to get custom typefaces that look the same on most computers. One of those techniques, and perhaps the easiest to implement, is the @font-face method in CSS. There are a number of software and online applications that can convert most fonts into the formats the @font-face method needs.

Historically, US copyright protection has not been extended to “typeface as typeface.” 237 C.F.R. 202.1(e). That is, using a typeface in a document, book, or logo is not copyright infringement. The “sole intrinsic function” of a typeface is its utility, and its aesthetic features, though they may be “unique and attractively shaped”, are incapable of “existing independently as a work of art.” 3Eltra v. Ringer, 579 F.2d 294, 297 (4th Cir. 1978). Jacqueline D. Lipton discusses the copyrightability (or noncopyrightability) of typefaces in more detail in her paper To © or Not to ©? Copyright and Innovation in the Digital Typeface Industry — she also looks at whether other IP doctrines, like design patents or trademarks, could be used to protect typefaces.

The wrinkle is that font software — the “digital container” that houses a typeface for use in a computer — likely is protected by copyright. 4See, for example, Adobe Systems v. Southern Software, 45 USPQ 2d 1827 (ND Cali 1998). So while copying or distributing the actual font would not be copyright infringement, copying or distributing the font file would.

That is allegedly what occurred here. The complaint alleges that RaiseDigital, without permission, converted one of Typotheque’s fonts into a webfont format so it could be used through CSS @font-face. That unauthorized derivative work was subsequently reproduced by everyone visiting the site.

Typotheque’s trademark claims are not based on the typeface itself, but on its name. The company has a registered trademark in “FEDRA”, the font at issue here. RaiseDigital didn’t change the name of the file when it converted it — the unauthorized web font still bore the name Fedra. Typotheque alleges that this is a false designation of the source that is likely to cause confusion.

I wouldn’t be surprised to see this lawsuit settled quickly (though some of the remedies Typotheque is seeking might raise some eyebrows). 5It is seeking, among other things, destruction of “all catalogs, packages, boxes, labels, bags, film, goods, computer files, disks, hard drives, CD-Roms, data, DVD’s, videotapes, prints and all other recorded media” containing or using the FEDRA font software; an accounting of “every recipient of” the font software by “name, address, IP address, and telephone number”; actual damages of no less than $2 million or all profits derived from infringing use, plus $2 million statutory damages for trademark infringement under 15 USC § 1117(c), as well as punitive and exemplary damages. No statutory damages for copyright infringement — Typotheque registered its copyright too late to qualify for those. I’m curious how Typotheque came up with the $2 million actual damages estimate; it offers self-hosted webfont licenses for €1,500 (about $2,165). But whatever the outcome, it should serve as a cautionary tale for web developers to pay closer attention to license terms when they use custom fonts.

References   [ + ]

1. While “typeface” and “font” began with distinct meanings, the two terms have largely become interchangeable. See, for example, Derek H. Kiernan-Johnson, Telling Through Type: Typography and Narrative in Legal Briefs, 7 Journal of the Association of Legal Writing Directors 87, 91 (2010).
2. 37 C.F.R. 202.1(e).
3. Eltra v. Ringer, 579 F.2d 294, 297 (4th Cir. 1978).
4. See, for example, Adobe Systems v. Southern Software, 45 USPQ 2d 1827 (ND Cali 1998).
5. It is seeking, among other things, destruction of “all catalogs, packages, boxes, labels, bags, film, goods, computer files, disks, hard drives, CD-Roms, data, DVD’s, videotapes, prints and all other recorded media” containing or using the FEDRA font software; an accounting of “every recipient of” the font software by “name, address, IP address, and telephone number”; actual damages of no less than $2 million or all profits derived from infringing use, plus $2 million statutory damages for trademark infringement under 15 USC § 1117(c), as well as punitive and exemplary damages. No statutory damages for copyright infringement — Typotheque registered its copyright too late to qualify for those. I’m curious how Typotheque came up with the $2 million actual damages estimate; it offers self-hosted webfont licenses for €1,500 (about $2,165).

A conventional narrative has emerged of  the media and creative industries’ response to the internet and digital technology. Beginning around the mid-1990s, this story has been one of old against new: stodgy, corporate executives holding on to the past versus hip digital natives embracing the future. These technologies have rendered copyright law broken according to this story; existing media industries have failed to take advantage of these innovations, relying instead on using the law to prop up their dying business models. They have failed to adapt and sued those who have.

Casting a journalist’s eye on the past decade and a half, Robert Levine debunks this narrative in his new book Free Ride: How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back.

For example, in his chapter on the music industry, he notes that contrary to the party line, record labels had privately been in negotiations with Napster prior to their lawsuit against it. Even if the two sides had reached an agreement, it’s unlikely the industry’s fortunes would have changed much: piracy would move to second-generation file-sharing services like Limewire and Kazaa and any revenues generated from a subscription Napster would have been a fraction of what labels were getting from traditional retail channels. As Levine points out, “The labels wasted time they should have spent setting up legal online services, and they made plenty of other mistakes. But why would any company rush to turn $15 transactions into 99-cent sales, let alone ones worth nothing at all?”

The reframing of the narrative goes deeper. In his book Moral Panics and the Copyright Wars, William Patry notes that the history of copyright law has been punctuated by “copyright wars”, one of which we are in the midst of today. Patry implies that the current “copyright war” is different — previous ones had been inter-industry struggles, this one pits the interests of traditional copyright holders with the public at large. 1Pp. xix, 1 (Oxford Univ. Press 2009).

Levine shows, however, that this is incorrect. The ideology of copyright critics masks nothing more than a simple economic struggle between existing content producers and emerging content distributors. As Levine points out in an interview at last June’s World Copyright Summit, despite all the high-minded academic arguments of the copyleft, no one has so far acted contrary to their economic self-interest. To be fair, even those who have argued against copyright have admitted as much. At this past April’s Rethink Music conference, Lawrence Lessig said, “Ideas have nothing to do with this fight. This is a fight between the people who make money under the old system and the people who might make money in the new system.”

Free Ride is currently available in the UK and hits the shelves in the US October 25th — the companion blog is found at The book is a must read for creators, copyright enthusiasts, and anyone else interested in these issues. Levine is a former executive editor for Billboard, former features editor for Wired, has written for Rolling Stone and Vanity Fair, and is an all around good guy. Disclaimer: I assisted Rob with some legal research for the book.

Along with the music industry, Levine devotes chapters to newspapers, books, television, and film. Although each of these industries rely on copyright and each have faced challenges in the digital age, the similarities end there. The business models of each sector have substantial differences, and the reasons for their struggles vary — newspapers, for example, lost significant ad revenues to web sites like Craigslist. The stories of these industries are breezily told but thoroughly researched, peppered with quotes from the many people who played a role in them that Levine interviewed for this book.

But it’s those parts of Free Ride that take a critical look at the role of tech companies in pushing the previously-mentioned narrative — shaping the law, policy, and public discourse at the same time — which seem to be getting the most attention. Google’s role in particular is scrutinized — Levine details the money and people that flows from the search giant to various academic think tanks and public interest groups which push for a version of copyright law more favorable to the googles of the world. As the book points out, there’s nothing wrong with this — every business looks out for its own interests. But this side of the debate often escapes attention.

Free Ride ends with some recommendations for how the culture business can address the challenges of commerce in the face of ubiquitous copying. Levine’s greatest contribution to these challenges, however, is the book itself. By bringing together all the pieces of the post-DMCA story of copyright and reframing the conventional narrative to one closer to reality, Free Ride lends an air of hope to the idea that creative industries can thrive online.

References   [ + ]

1. Pp. xix, 1 (Oxford Univ. Press 2009).

The famed American composer colorfully mocks the idea of ascribing altruistic motives to the music pirate:

Sir, — With an avidity worthy the cause, I have read during my sojourn in these tight little islands everything that has come my way which has borne on the subject of music piracy.

Because of the laxity of your laws, and because of the perseverance of your music pirates, my royalties have gone a-glimmering. To use an anatomical expression current in my own country, I have been “getting it plump in the jugular.”

One or two of the arguments I have noted, which were in opposition to the publisher and composer, have not struck me as hilariously humorous, or even as faintly facetious.

To elucidate — I read in your journal some days ago, a communication in which the writer places the blame for the deplorable condition of the music trade here on the publisher, and points with argumentative finger to the fact that if the publisher had heeded the cry of the masses — whoever that nebulous body may be — and had sold his wares for less money, the music pirate would never have budded into existence. Inter alia, it would appear that the music pirate was called into the arena of activity to fill a long-felt want — to supply music at a cheaper price than the one at which the publisher cared to sell it — whether he could afford to or not.

It would appear under those conditions that the music pirate had a philanthropic mission. This mysterious and mercenary Messiah, noticing the’ dire distress of the tune-starved masses — whoever they may be — said, “I will save them. I will fill their melodic ‘little Marys’ with music at 2d. a meal. I will gorge them with gavottes, build them up with ballads, and make muscle with marches. They shall become comely with comedy conceits, and radiantly rosy with ragtime rondos — and all at 2d. a throw.”

And this beneficent pirate has waxed fat and saucy as he has hawked in the highways and byways spurious editions of him who is the favored of Melpomene and the boon companion of Orpheus. And I beg to ask, in words tinged with doubt and despair, where does the favored of Melpomene and the boon companion of Orpheus come in? The royalties of the “f. of M.,” and the “b.c. of O.” are like angels’ visits — few and far between.

Shall the sunlight depart from the soul of the sweet singer of melody? Shall the fount of the muse dry up, as it were? Is there no balm in Gilead? Is there no surcease from sorrow for royalties that never materialize? Behold, O star-eyed Britannia, a suppliant at the bar of public opinion asking for justice, for your own and for your friends’ own.

John Philip Sousa, letter to the editor of the “Daily Mail”, 1905.

Is copyright law too uncertain?

That certainly seems to be the prevailing view. Any number of copyright critics point to the uncertainty of the law — especially for online users, who are in closer contact with copyright issues than any previous generation has been — as one of its biggest flaws.

As attorney Steven Horowitz notes in a forthcoming article, the conventional argument is that this uncertainty “deters lawful uses of copyrighted works.” But, as you may guess from the title of the article, Copyright’s Asymmetric Uncertainty, copyright is only uncertain depending on the perspective. Those issues important to copyright holders, says Horowitz, are clear; issues important to copyright users are not so clear.

I was struck by how closely Horowitz’s distinction between what is clear and what is unclear in copyright law mirrors the distinction between creative and consumptive infringement that I had I previously wrote about — though, upon reflection, it might be more accurate to label these two categories “creative appropriation” and “consumptive appropriation”; use of a copyrighted work either creatively or consumptively is not necessarily infringement.

While there is plenty of overlap, in general, the line between creative appropriation and creative misappropriation (or infringement), relies largely on substantive doctrines of copyright law: the idea/expression distinction, substantial similarity, and fair use. Broadly speaking, the new work is compared to the original work. The line between consumptive appropriation and infringement, however, is governed by more regulatory provisions; a comparison between the two works is unnecessary since this type of appropriation typically consists of verbatim or near verbatim copies of the original work.

This isn’t just arbitrary line-drawing. As I said in my original post on the subject, recognizing this distinction is important to discussions of copyright law because each category has its own separate issues. “Uncertainty” is one of those issues: while there may be confusion over the rules that govern creative uses of copyrighted works, that is not the case when dealing with outright piracy of existing works.

Horowitz explains copyright’s asymmetric uncertainty by first discussing what issues are most important to copyright holders:

Although there are many who would produce expressive works irrespective of copyright protection, those whose production depends on copyright care most about three features of the law. They want (1) a reliable entitlement, (2) prohibiting at least pure or close copying of their work, which is (3) protected by remedies sufficient both to deter copying and to compensate for any losses that result from it. These are the core protections that ensure meaningful incentives to produce copyrightable expression, for without them a copyright holder might have to compete against others who sell identical copies of his own work. Such competition against perfect substitutes would drive down the price toward the near-zero marginal cost of the copy, leaving him without the ability to profit from the work or to recoup the costs of its production. Uncertainty in these three salient features of the law would spell trouble for copyright holders, but fortunately the features are predictable in practice.

In other words, copyright holders are most concerned with consumptive appropriation of their works. That shouldn’t come as a surprise.

That’s not to say copyright holders are not concerned with creative appropriation of their works — I think it goes without saying that the level of this concern varies widely from person to person. Some copyright holders strictly police against most creative appropriations, some may evaluate each use on a case-by-case basis — perhaps asserting their rights against commercial uses but not worrying about noncommercial uses — and some may welcome (or even encourage) such uses.

But most copyright holders’ primary concern is about control over how and where their complete works are copied and distributed.

Horowitz next looks at the issues of importance to copyright users:

Most affected by copyright’s uncertainty are the potential users of copyrighted works, those who want to use a work in ways not intended or expected by the copyright holder. For example, users may mix pieces of prior works together or write new stories using characters from old ones. The intent of the user is not to produce or sell verbatim copies of a preexisting work but to put some portion of a work to a new purpose. The potential user is most concerned with whether his expressive activity will constitute infringement and if so whether the remedies for infringement will be proportional to the harm caused—in other words whether his liability has a reasonable ceiling. Copyright makes answering both of these questions difficult. A potential user cannot predict with confidence whether a contemplated use will be deemed infringing or whether the damages will be manageable or devastating.

Most of copyright’s uncertainty falls within the scope of creative appropriation, not consumptive appropriation. One would think, then, that it wouldn’t be an issue when discussing piracy.

But what happens is that the uncertainty criticism is used as an across-the-board attack on copyright — as though piracy cannot be addressed until courts or Congress figure out, for example, a fair use rule that is both applicable to a wide variety of situations and easy enough for a fifth grader to understand. Any uncertainty that exists primarily in the area of creative appropriation shouldn’t be used as an argument against reasonable efforts to curb the harms of consumptive misappropriation.

The PROTECT IP Act applies to sites that have “no significant use other than engaging in, enabling, or facilitating the reproduction, distribution, or public performance of copyrighted works, in complete or substantially complete form, in a manner that constitutes copyright infringement.” Similarly, the Commercial Felony Streaming Act only applies to criminal infringement, where the willfulness requirement forecloses its application to most creative infringements. Doctrines like fair use, substantial similarity, and the idea/express distinction play little role in the application of proposed laws like these.