A Closer Look at the Righthaven Standing Issue

March 26, 2013 · · 2 comments

Today’s guest post comes from Copyhype contributor Devlin Hartline. Cross-posted on the Law Theories blog.

Love them or loathe them, notorious copyright enforcer Righthaven presents an interesting question of law: Does Righthaven, the assignee of a copyright plus the accrued causes of action, have standing to sue for past infringements if it grants back to its assignor, Stephens Media, an exclusive license to exploit the copyright? The district courts that have considered this question have all found that such an arrangement does not leave Righthaven with an ownership interest sufficient to have standing. I think they’re wrong.

Last month, Righthaven finally had its day before the Ninth Circuit when it participated in oral arguments in two of its appeals (audio available here).1 These appeals almost didn’t happen. Back in late 2011, a district court granted a motion to appoint a receiver made by one of Righthaven’s defendants, Wayne Hoehn. The court ordered Righthaven’s intellectual and tangible property to be assigned to the receiver so that it could be sold to partially satisfy Hoehn’s judgment against Righthaven. Despite the fact that the receivership was explicitly for this limited purpose,2 the receiver had more grandiose plans. When she found out that Righthaven CEO Steven Gibson was planning to appeal Hoehn’s victory, the receiver reported to the district court that she had taken over the company, fired Gibson, and fired the counsel Gibson had lined up to prosecute the appeal.

The receiver argued that, given Righthaven’s poor chances of success on appeal, it was in the best interests of the receivership to cease the appeals process. She also claimed, somewhat circularly, that since Righthaven no longer owned any of the copyrights that it had sued over, it had no standing to pursue its appeals before the Ninth Circuit.3 The very issue on appeal, of course, was whether Righthaven owned the copyrights and had standing to sue, and it is elementary that a party has standing to appeal a district court’s determination that it does not have standing to sue.4 Exercising her mandate that she thought gave her “broad, almost limitless equitable powers,” the receiver sought to have the court ratify her decision to torpedo the appeals. The district court rebuffed the receiver’s request, clarifying that the receivership was for the limited purpose of selling Righthaven’s assets—not for the purpose of firing Righthaven’s counsel and withdrawing its appeals.5

Having won that small victory in the district court, Righthaven’s fate is now being decided by a panel of the Ninth Circuit. The legal question presented on the standing issue is actually a rather straightforward and simple application of the law. Yet, I believe that every court that has so far addressed the issue has approached it in the wrong way. I think the blame lies mainly with Righthaven’s poor briefing of the somewhat metaphysical doctrine of copyright ownership, but I think the judiciary’s unfamiliarity with the issues has played a role as well. In this article, I’ll explain why I think the Righthaven standing issue is simple and why I think Righthaven has standing to sue for past infringements.

Silvers v. Sony

In the Ninth Circuit, where the Righthaven appeals are being prosecuted, the Silvers v. Sony case controls the standing analysis. In the district court, the plaintiff, Nancey Silvers, claimed that the defendant, Sony Pictures, had infringed the copyright in a television movie she had written on a work-for-hire basis with the production company Frank & Bob Films.6 Since Silvers had no ownership interest in the copyright by way of her work-for-hire contract,7 Frank & Bob Films assigned to her the accrued causes of action so that she could pursue the alleged infringement on her own. Sony argued that Silvers was not a “legal or beneficial owner” under the Act and thus had no standing to sue.8

Silvers, on the other hand, cited the copyright treatise Nimmer on Copyright which at the time provided that “the assignee of an accrued infringement cause of action has standing to sue without the need to join his assignor, even if the latter retains ownership of all other rights under the copyright.”9 The district court, citing Nimmer, the text of the Act, and public policy, sided with Silvers, holding that she had standing to sue even though owning only the accrued causes of action: “Where the cause of action has already accrued, though, the claim is akin to a vested right, and the Court sees no reason why a copyright holder, like any other property owner, would not have the ability to assign that right.”10

A few months later, the district court granted Sony’s motion for interlocutory appeal to the Ninth Circuit on the standing issue.11 There, the appellate panel noted that it was a matter of first impression in the circuit “whether an accrued cause of action for copyright infringement may be assigned to a third party, without any other copyright rights accompanying the assignment.”12 The panel echoed the reasoning of the district court below, citing Nimmer, the text of the Act, and public policy, to conclude that:

Nothing in the statute prohibits the legal or beneficial owner of the exclusive right under copyright from assigning an accrued cause of action for infringement of that right. Such an assignment is like assignment of any other chose in action under contract theory. Nothing in the language of the statute prohibits or restricts an assignee of an accrued infringement cause of action from bringing a copyright infringement action.13

Unhappy with its defeat before the district court and the appellate panel, Sony petitioned for and was granted a rehearing en banc.14 There, the en banc majority reversed the district court, holding instead that an assignee of accrued causes of action who has no other legal of beneficial ownership in the copyright has no standing to sue for past infringements.15

The majority started its analysis by noting that standing to sue in copyright, a creature of federal statute, is authorized by Section 501(b) of the Copyright Act which provides:

The legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.16

The majority reasoned that, under the plain language of the statute, one must be a “legal or beneficial owner” of the exclusive right at issue in order to have standing to sue. The court deduced that since an accrued cause of action is not one of the listed rights in Section 106, its holder is not a “legal or beneficial owner” of the copyright unless she also has some other ownership interest in it. The majority went on to examine the legislative history of the Act, patent law, and opinions from other circuits to conclude that “[t]he bare assignment of an accrued cause of action is impermissible under 17 U.S.C. § 501(b). Because that is all Frank & Bob Films conveyed to Silvers, Silvers was not entitled to institute and may not maintain this action against Sony” for the alleged infringement.17

It should be noted that the majority did not see a problem with assigning an accrued cause of action, finding the practice to be consistent with the Copyright Act and its constitutional purpose. Moreover, the majority provided the rationale for allowing such transfers: “When one acquires a copyright that has been infringed, one is acquiring a copyright whose value has been impaired. Consequently, to receive maximum value for the impaired copyright, one must also convey the right to recover the value of the impairment by instituting a copyright action.”18 Thus, it was not the assignment of the accrued causes of action that posed a problem for the majority. The problem was, in the majority’s opinion, that such an assignee was not also a “legal or beneficial owner” entitled to institute an action under Section 501(b) of the Act.

Personally, I think the majority’s analysis is rather poor—while purporting to prevent a circuit split,19 the majority in fact only caused one.20 I’ll sketch out some of the basic problems with the decision here, but the topic is complicated and rightfully deserving of its own post. The majority was correct to note that an accrued cause of action is assignable. Such was the case under the 1909 Act as it is now under the 1976 Act. This comports with the common law view generally that an accrued cause of action for a property tort is itself a property interest that is freely assignable.21 The twist added to this general rule by the majority is that it read Section 501(b) as mandating that the accrued causes of action must be accompanied by an ownership interest in the copyright, else the holder is not a “legal or beneficial owner” with statutory standing to sue under the Copyright Act.

The majority misreads Section 501(b). On its face, the statute appears to say that an accrued cause of action is not assignable since it authorizes the “legal or beneficial owner . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.” But, as the majority itself demonstrates, courts do not interpret it this way. Instead, the statute is read to mean that a cause of action accrues to whomever is the “legal or beneficial owner” at the time the cause of action accrues. Once the cause of action accrues to the “legal or beneficial owner,” it becomes a vested property interest that can be assigned to another, as the majority rightly concedes. What the majority misses is that such an assignee has standing to sue because he is a “legal or beneficial owner” of the underlying exclusive right, even if he is conveyed no other ownership interest in it.

There’s two different ways to look at this. The first is to realize that an assignee stands in the shoes of his assignor.22 The courts allow the assignee to take on his assignor’s position, so that if the assignor was the “legal or beneficial owner” at the time the cause of action accrued, the assignee steps into his shoes and can claim to have been such an owner as well. The second way to look at this is to recognize that an owner of an accrued cause of action is himself a “legal or beneficial owner” in his own right since an accrued cause of action is an in rem property interest in the underlying exclusive right. Not only can he claim his assignor’s ownership status as it relates back to when the cause of action accrued, he can claim his own ownership status for the purpose of standing.

This is demonstrated in the case law. The general rule is that, unless a copyright assignment expressly includes the accrued causes of action, an assignee of a copyright—even one who obtains otherwise full legal and equitable ownership—is not also transferred the accrued causes of action and does not have standing to sue for past infringements.23 Instead, the assignor, who no longer holds any other ownership interest in the copyright, is alone permitted to sue for past infringements.24 Under the majority’s logic, this should not be possible since it reasons that a party who holds only the accrued causes of action and no other ownership interest is not a “legal or beneficial owner” under Section 501(b). The majority conspicuously fails to address this point.

Nor does the majority address another wrinkle in the doctrine which provides that a copyright owner who otherwise parts with legal and equitable ownership of an exclusive right, while retaining the right to receive royalties from its future exploitation, has standing to sue for later occurring infringements of that right.25 Under the majority’s reasoning, since the right to receive royalties is not an enumerated right under Section 106, such a rightholder would not have standing to sue. But Congress clearly intended otherwise by explicitly providing in the legislative history of the Act that such a party would be a “beneficial owner” of the underlying exclusive right with standing to sue for its infringement.26 The simple explanation for this is that, like the holder of the accrued causes of action, the holder of the right to receive royalties has an in rem interest in the exclusive right that makes him the “legal or beneficial owner” of it.

While the majority was perhaps correct to note that Section 501(b) limits standing to sue to only a “legal or beneficial owner” of the underlying exclusive right, it somehow missed the jurisprudential gloss that such ownership may relate back in time to that of his assignor’s ownership, such as with an assignee of an accrued cause of action, or may include one who otherwise has no present legal or beneficial ownership interest, such as with an assignor of all legal and beneficial ownership who retains the accrued causes of action or retains the right to receive royalties. Thus, the question is not, as the majority perceived it, whether he currently controls the exploitation of the exclusive right. The question is whether he holds an in rem ownership interest in the exclusive right, whether via the “shoes” of his assignor or in his own right.

The majority’s reasoning makes other critical mistakes, such as misinterpreting the legislative history and misreading the case law from other circuits. But for better or for worse, Silvers is the law in the Ninth Circuit and a holder of an accrued cause of action has no standing to sue unless he also holds some other legal or beneficial ownership in the underlying exclusive right.

The Righthaven Assignment

It was against this legal backdrop that Righthaven and Stephens Media executed the contract that’s at issue here. The contract actually consists of two parts, a “Copyright Assignment” and a supplemental agreement militaristically dubbed the “Strategic Alliance Agreement” (“SAA”). The Copyright Assignment in relevant part provides:

Stephens Media hereby transfers, vests and assigns the work depicted in Exhibit A, attached hereto and incorporated herein by this reference (the “Work”), to Righthaven, subject to Stephens Media’s rights of reversion, all copyrights requisite to have Righthaven recognized as the copyright owner of the Work for purposes of Righthaven being able to claim ownership as well as the right to pursue past, present and future infringements of the copyright in and to the Work.

By itself, the Copyright Assignment conveys ownership of the underlying exclusive rights and the accrued causes of action to Righthaven, which under the majority opinion in Silvers would grant Righthaven standing to sue for past infringements. In fact, district courts that looked at only the Copyright Assignment had no trouble finding that it granted Righthaven standing to sue.27 Thus, it is with the addition of the SAA to the Copyright Assignment that the Righthaven standing issue arises.

The provision of the SAA which has received the most attention is Section 7.2, which in relevant part provides:

Despite any such Copyright Assignment, Stephens Media shall retain (and is hereby granted by Righthaven) an exclusive license to Exploit the Stephens Media Assigned Copyrights for any lawful purpose whatsoever and Righthaven shall have no right or license to Exploit or participate in the receipt of royalties from the Exploitation of the Stephens Media Assigned Copyrights other than the right to proceeds in association with a Recovery.

Other sections of the SAA have received notice too, such as Section 5 which provides that Righthaven is to split recoveries minus costs with Stephens Media and Section 8 which provides Stephens Media with a reversionary right in the copyrights assigned to Righthaven, but Section 7.2 is the one that’s caused the most fuss.

The first serious blow to Righthaven came in the Democratic Underground case, wherein Chief Judge Roger Hunt noted that the SAA was “highly relevant to Righthaven’s standing in this and a multitude of other pending Righthaven cases.”28 In his opinion, the SAA “expressly denies Righthaven any rights . . . other than the bare right to bring and profit from copyright infringement actions.”29 He reasoned that under Section 7.2 of the SAA, Righthaven received no other ownership interest in the underlying exclusive rights: “The plain and simple effect of this section was to prevent Righthaven from obtaining, having, or otherwise exercising any right other than the mere right to sue as Stephens Media retained all other rights.”30

As to Righthaven’s argument that the SAA did not alter its standing under the clear import of the Copyright Agreement, Chief Judge Hunt quipped: “This conclusion is flagrantly false—to the point that the claim is disingenuous, if not outright deceitful. The entirety of the SAA was designed to prevent Righthaven from becoming an owner of any exclusive right in the copyright . . . .”31 He then held that under the majority opinion in Silvers, Righthaven, as the holder of only the accrued causes of action, did not have standing to sue: “In reality, Righthaven actually left the transaction with nothing more than a fabrication since a copyright owner cannot assign a bare right to sue after Silvers.”32

Six days after Chief Judge Hunt issued his seminal opinion in Democratic Underground, the district court in the Hoehn case followed suit, finding that the “carveouts” in the SAA “deprive Righthaven of any of the rights normally associated with ownership of an exclusive right necessary to bring suit for copyright infringement and leave Righthaven no rights except to pursue infringement actions . . . .”33 The day after that, Chief Judge Hunt issued an opinion in the DiBiase case, finding again that the SAA left Righthaven without “the exclusive rights necessary to maintain standing in a copyright infringement action,” and incorporating his opinion in Democratic Underground by reference.34 It is these opinions in the Hoehn and DiBiase cases that form the basis of Righthaven’s appeals before the Ninth Circuit.

Why Righthaven Has Standing

Much like the majority in Silvers failed to recognize that the holder of only the accrued causes of action is a “legal or beneficial owner” of the underlying exclusive right, so too have the district courts that have analyzed the Righthaven standing issue failed to recognize that Righthaven has an ownership interest in the underlying exclusive rights in addition to the accrued causes of action. As discussed above, the Copyright Assignment grants to Righthaven ownership of the underlying exclusive rights plus ownership of the accrued causes of action. The SAA supplements the Copyright Assignment, and it provides that “Stephens Media shall retain (and is hereby granted by Righthaven) an exclusive license” to exploit the exclusive rights and to keep the royalties to itself. The mistake made by the district courts is interpreting this simultaneous retention by (or license back to) Stephens Media as divesting Righthaven of whatever ownership interests in the underlying exclusive rights that the Copyright Assignment may have granted it.

The Copyright Assignment and SAA instead should be read as dismembering the ownership such that Righthaven became the legal owner and Stephens Media remained the beneficial owner of the underlying exclusive rights. The key to understanding the Righthaven standing issue is to recognize that legal ownership of an exclusive right can be held by one in trust for another who is a beneficial owner. In such a trust relationship, the legal owner holds legal title while the beneficial owner holds equitable title to the underlying exclusive rights.35 The Copyright Assignment and SAA simply transferred to Righthaven legal title to the underlying exclusive rights and the accrued causes of action, while Stephens Media retained or was simultaneously granted back—it matters not which way you look at it since both achieve the same result—the equitable title to the underlying exclusive rights.

The following table illustrates the legal and beneficial ownership interests held by Righthaven and Stephens Media before and after the Copyright Assignment and SAA:

righthaven_ownership

 

 

 

 

 

 

 

The whole point of the Copyright Assignment and SAA was to comply with the dictate in Silvers. Righthaven was not assigned only the accrued causes of action, but it was assigned legal title to the underlying exclusive rights as well. Thus, as the legal owner of the underlying exclusive rights and the accrued causes of action, Righthaven has standing to sue for past infringements under the rule declared by the Silvers majority. The very purpose of the Copyright Assignment and SAA was to give both legal title and the accrued causes of action to Righthaven while Stephens Media kept the equitable title for itself. The parties did exactly what Silvers said to do.

Contrary to Chief Judge Hunt’s quip that Righthaven’s representation about the SAA was “flagrantly false—to the point that the claim is disingenuous, if not outright deceitful,” I think Righthaven’s claim that the SAA did not affect its standing was correct. The reason is simple: The SAA did not divest Righthaven of the legal title or the accrued causes of action that it had been granted in the Copyright Assignment. To be sure, the SAA established in the underlying exclusive rights both in personam contractual rights and in rem property interests, but none of those equitable interests changed the fact that Righthaven still held its legal interests and the accrued causes of action.36

The district courts that have looked at the Righthaven standing issue have misconstrued the difference between an assignment, which typically transfers both legal and equitable title, and an exclusive license, which transfers only equitable title.37 The difference is critical. Courts are familiar with the concept of an exclusive licensee, and an entire body of federal common law has developed around this type of ownership interest. But antiquated concepts, such as the idea that an exclusive licensee holds equitable title, tend to get lost—though some remnants appear in the 1976 Act. For example, Section 301(a) preempts “all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 . . . .”38 This presupposes the existence of both legal and equitable rights in a copyright.

Another example is Section 501(b)’s provision that a “legal or beneficial owner” has standing to sue. Courts often indicate that both legal owners and exclusive licensees have standing under this section, but they don’t make the connection that the legal titleholder is the “legal owner” while the exclusive licensee, who holds equitable title, is the “beneficial owner.” Back before the merger of law and equity, whether one’s title was legal or equitable mattered significantly since only the legal owner could institute an action in a court of law. Equitable owners, such as an exclusive licensee, had to bring suit in a court of equity.39 The merger of law and equity did away with the procedural, but not the substantive, differences between the two.40 It was not until the 1976 Act that legal and equitable ownership interests were put on an equal footing for certain purposes, but—and this is crucial—they still remain distinct types of ownership interests.

The 1976 Act itself creates confusion over exactly what an exclusive license is. Section 101 provides:

A “transfer of copyright ownership” is an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license.41

Thus, an assignment and an exclusive license are both a “transfer of copyright ownership.” What kind of ownership is transferred, the statute doesn’t say. The answer, developed in the case law that Section 101 merely ratified, is rather simple. Generally speaking, an assignment transfers legal and equitable title while an exclusive license transfers only equitable title. Both are a “transfer of copyright ownership,” as noted by Section 101, but the ownership interests transferred are different. Section 501(b) tells us this difference matters not in at least one significant way since both the “legal or beneficial owner” has standing to sue. The combined purpose of Sections 101 and 501(b) in the 1976 Act was to put an equitable titleholder, such as an exclusive licensee, on an equal footing with his licensor, the holder of legal title, for purposes of standing to sue. Much like the merger of law and equity had eliminated some of the procedural differences between legal and equitable ownership, the 1976 Act eradicated some of the substantive differences between the two as well.

That a licensor has a different type of ownership interest than his exclusive licensee was made clear in Gardner v. Nike,42 an opinion out of the Ninth Circuit from 2002. There, Nike had granted an exclusive license to Sony Music, and the issue was whether Sony Music could then transfer its exclusive license to Gardner. The district court held that an exclusive licensee could not transfer his ownership interest to another without his licensor’s permission, and the Ninth Circuit agreed. The appellate panel relied on Section 201(d)(2) of the Act which provides that the owner of any particular exclusive right is entitled “to all of the protection and remedies accorded to the copyright owner” under the Act.43 Thus, reasoned the court, an exclusive licensee is vested with only the same “protections and remedies,” but not the same rights, as his licensor. If an exclusive licensee actually had legal ownership of the underlying exclusive right, his ability to transfer his interest to another would not be so saddled. Gardner v. Nike proves that exclusive licensees are not legal owners—at least in the Ninth Circuit where Righthaven is prosecuting its appeals.

There’s another layer that’s worth a mention. While Section 301(a) sounds in the general common law of property by referring to “legal or equitable rights,” Section 501(b) sounds in the general common law of trusts by referring to a “legal or beneficial owner.” The analogy to trust law is deliberate, for it was noted long ago that the licensor-exclusive licensee relationship is just like that of a trustee-beneficiary, with one holding legal title in trust for the other who is an equitable or beneficial owner of the property.44 Trust law and copyright law have obviously gone their separate ways, but the analogy between the two remains and is at times instructive. It’s just not often that it’s mentioned anymore, much less so that it matters like it does here with Righthaven.

The analogy to trust law has not been totally lost, nor is it necessarily only an analogy, as demonstrated in the fifteen-year-old opinion in A. Brod, Inc. v. SK&I Co.45 penned by then-District Judge Sonia Sotomayor. The facts there, somewhat similar to Righthaven’s, were that one party had assigned to the other “the entire right, title, and interest” to a particular copyright for the purpose of litigation.46 The assignor, who wanted his copyright back, argued that the assignment really included only the legal title which his assignee held in trust for him as the equitable titleholder. The assignee denied the legal possibility of a trust, claiming that “trust-based rights in the copyright are preempted by the Copyright Act.”47 Judge Sotomayor did not agree:

[L]egal and equitable interest in a copyright may be held separately. As cases pre-dating the 1976 Copyright Act make clear, a copyright may constitute a proper trust res, with the trustee holding legal title to the copyright and the settlor retaining equitable title. The 1976 Copyright Act did not change this, but rather codified the notion that both the equitable, or “beneficial,” owner of a copyright and the legal owner have standing to sue for infringement.48

Judge Sotomayor went on to analyze the assignment under New York state trust law, looking at whether it created an express or constructive trust such that the trustee-assignee’s subsequent transfer of his interest to a third party was subject to the assignor’s equitable interest in the trust. I think the soundness of this approach is dubious, as federal common and statutory law trumps state law when it comes to copyright ownership. The problem with analyzing copyright ownership under state trust law is that then concepts such as a good faith purchaser for value get injected into what is otherwise a federal common law scheme. The en banc Federal Circuit has rejected such an approach with patents,49 and I think the same logic applies with equal force to copyrights. Copyright ownership issues should be decided applying federal copyright law which, while analogous to state trust law in some ways, is not the same thing.

So where does that leave us? Based on the oral arguments before the Ninth Circuit panel, things do not look good for Righthaven. One judge queried which party, Righthaven or Stephens Media, a prospective user of the copyright should approach for permission. Since it isn’t Righthaven, the judge implied, it means that Righthaven doesn’t really own the copyright and therefore does not have standing to sue. But this line of questioning misses the fact that there’s two types of ownership interests in a copyright, legal and equitable. A prospective user would contact the party who holds the equitable title to the exclusive right that he wishes permission to use since only that party controls the use of that right. But it should not be forgotten that legal ownership may reside in another—and that appears to be the case here with Righthaven.

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Footnotes

  1. The Ninth Circuit joined two of Righthaven’s appeals for purposes of oral arguments: Righthaven v. Hoehn and Righthaven v. DiBiase. [↩]
  2. The motion that was granted provides the following summary: “Defendant Wayne Hoehn (‘Hoehn’), through his attorneys, brings this motion seeking this Court to order the appointment of a receiver to which Plaintiff Righthaven LLC (‘Righthaven’) shall assign all of its intellectual property and other intangible property, which the receiver shall auction in order to partially satisfy Hoehn’s judgment and writ of execution entered against Righthaven. (Docs. # 44, 59)”; Hoehn also sought that “all objects, items, or other property belonging to Righthaven should be delivered to the Receiver for auction,” though it was “presumed that Righthaven owns little tangible property of material value.” [↩]
  3. The receiver argued: “Moreover, as Righthaven no longer owns any of the copyright rights it originally sued Hoehn and others for infringing, it no longer possesses standing to pursue its claims before the Ninth Circuit Court of Appeals or any other Court. (Doc. # 90) This further affirms my view that the receivership estate’s best interests at this point are served by making the estate as productive as possible for its many creditors, and by terminating the existing appeals.” [↩]
  4. See, e.g., In re Pittsburgh & L.E.R. Co. Sec. & Antitrust Litig., 543 F.2d 1058, 1064 (3d Cir. 1976) (“A party denied standing to sue, or to intervene, or to object, may obviously appeal such a determination. The question of standing does not go to whether or not the appeal should be heard, but rather to its merits.”). [↩]
  5. Docket entry 117 provides in part: “The Court clarifies the scope of the Receivership and confirms the Receivership was for the limited purpose to dispose of assets to satisfy the judgment, not to fire counsel handling the appeal and not to take any other action regarding Righthaven’s appeal.” [↩]
  6. See Silvers v. Sony Pictures Entm’t, Inc., Order Granting in Part and Denying in Part Defendant’s Motion to Dismiss, No. 00-cv-6386, 2001 WL 36127624 (C.D. Cal. Jan. 25, 2001). [↩]
  7. See 17 U.S.C.A. 201(b) (West 2013) (“In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.”). [↩]
  8. See 17 U.S.C.A. § 501(b) (West 2013) (“The legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.”). [↩]
  9. Silvers, 2001 WL 36127624 at *1 (quoting Nimmer on Copyright § 12.02[B]) (internal quotations omitted). [↩]
  10. Id. at *2. [↩]
  11. See Silvers v. Sony Pictures Entm’t, Inc., Order Granting Defendants’ Motion for Interlocutory Appeal, No. 00-cv-6386, 2001 WL 36127626 (C.D. Cal. Mar. 29, 2001). [↩]
  12. Silvers v. Sony Pictures Entm’t, Inc., 330 F.3d 1204, 1206 (9th Cir. 2003). [↩]
  13. Id. at 1208. [↩]
  14. See Silvers v. Sony Pictures Entm’t, Inc., 370 F.3d 1252 (9th Cir. 2004). [↩]
  15. See Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881 (9th Cir. 2005). [↩]
  16. 17 U.S.C.A. § 501(b) (West 2013). [↩]
  17. Silvers, 402 F.3d at 890. [↩]
  18. Id. at 890 n.1 [↩]
  19. See id. (“[T]he creation of a circuit split would be particularly troublesome in the realm of copyright.”). [↩]
  20. See Prather v. Neva Paperbacks, Inc., 410 F.2d 698 (5th Cir. 1969); Eden Toys, Inc. v. Florelee Undergarment Co., Inc., 697 F.2d 27 (2d Cir. 1982); ABKCO Music, Inc. v. Harrisongs Music, Ltd., 944 F.2d 971 (2d Cir. 1991). [↩]
  21. See, e.g., City of Cincinnati v. Hafer, 49 Ohio St. 60, 66 (1892) (“Mere personal torts die with the party, and are not assignable; but where the action is brought for damage to the estate, and not for injury to the person, personal feelings, or character, and the right of action survives to the personal representative, it may be assigned so as to pass an interest to the assignee.”); Comegys v. Vasse, 26 U.S. 193, 213 (1828) (“In general, it may be affirmed, that mere personal torts, which die with the party, and do not survive to his personal representative, are not capable of passing by assignment; and that vested rights ad rem and in re, possibilities coupled with an interest, and claims growing out of, and adhering to property, may pass by assignment.”); 6A C.J.S. Assignments § 43 (“A chose in action or claim, whether arising in tort or contract, is generally assignable, as a chose in action is personal property.”). [↩]
  22. See, e.g., 6 Am. Jur. 2d Assignments § 134 (“Although an assignee acquires the rights of the assignor, including the right to enforce the assigned obligation, he or she does not sue in his or her own right, but stands in the shoes of the assignor.”); RTC Commercial Loan Trust 1995-NP1A v. Winthrop Mgmt., 923 F.Supp. 83, 88 (E.D. Va. 1996) (“[I]t is a fundamental maxim of common law that the assignee stands in the shoes of the assignor . . . .”). [↩]
  23. See, e.g., ABKCO Music, Inc. v. Harrisongs Music, Ltd., 944 F.2d 971, 980 (2d Cir. 1991) (“Thus, a copyright owner can assign its copyright but, if the accrued causes of action are not expressly included in the assignment, the assignee will not be able to prosecute them.”); Giddings v. Vision House Prod., Inc., 584 F.Supp.2d 1222, 1229 (D. Ariz. 2008) (“Copyright assignments do not include accrued causes of action unless they are expressly included in the assignment.”); 3-12 Nimmer on Copyright § 12.02 (“[O]nly the grantor, not the grantee, has standing to sue for pre-grant infringement, even if the action is filed after the grant has been executed.”). [↩]
  24. See, e.g., Skor-Mor Products, Inc. v. Sears, Roebuck & Co., 1982 WL 1264 (S.D.N.Y. May 12, 1982) (“Similarly, it is the assignor, not the assignee, who has standing to sue for infringing acts which occurred prior to the assignment of copyright.”); ABKCO Music, Inc. v. Harrisongs Music, Ltd., 944 F.2d 971, 980 (2d Cir. 1991) (“Rather, the assignee is only entitled to bring actions for infringements that were committed while it was the copyright owner and the assignor retains the right to bring actions accruing during its ownership of the right, even if the actions are brought subsequent to the assignment.”); M.J. Golden & Co. v. Pittsburgh Brewing Co., 137 F.Supp. 455, 457 (D. Pa. 1956) (“[E]ven though there has been a sale of the copyright this does not prevent the owner at the time of the alleged infringement from suing for previous damages it alleges to have sustained while it was the owner.”). [↩]
  25. See, e.g., Cortner v. Israel, 732 F.2d 267, 271 (2d Cir. 1984) (“When a composer assigns copyright title to a publisher in exchange for the payment of royalties, an equitable trust relationship is established between the two parties which gives the composer standing to sue for infringement of that copyright. Otherwise the beneficial owner’s interest in the copyright could be diluted or lessened by a wrongdoer’s infringement.”) (internal citations omitted). [↩]
  26. See H.R. Rep. No. 1476, 159 (“A ‘beneficial owner’ for this purpose would include, for example, an author who had parted with legal title to the copyright in exchange for percentage royalties based on sales or license fees.”). [↩]
  27. See, e.g., Righthaven LLC v. Dr. Shezad Malik Law Firm P.C., No. 10-cv-0636, 2010 WL 3522372, *2 (D. Nev. Sept. 2, 2010) (Hunt, C.J.) (“Furthermore, the assignment in question (which Plaintiff has attached to its opposition) clearly assigns both the exclusive copyright ownership, together with accrued causes of action, i.e., infringements past, present and future. While Courts have denied standing to bring an action on an accrued claim where just the copyright is owned or just the cause of action has been assigned, where there is an assignment of both the copyright, and any accrued causes of action, the courts have held that the assignee of both can bring an action even for infringing activities which occurred before the assignment. Thus, in this instance, Plaintiff has standing to sue, even for an infringement which preceded the assignment, because that right was specifically assigned with the exclusive assignment of the copyright itself.”) (internal citations omitted). [↩]
  28. Righthaven LLC v. Democratic Underground, LLC, 791 F.Supp.2d 968, 971 (D. Nev. 2011) (Hunt, C.J.). [↩]
  29. Id. at 972. [↩]
  30. Id. (italics in original). [↩]
  31. Id. at 973 (italics in original; internal quotations omitted). [↩]
  32. Id. [↩]
  33. Righthaven, LLC v. Hoehn, 792 F.Supp.2d 1138, 1146 (D. Nev. 2011) (Pro, J.). [↩]
  34. Righthaven, LLC v. DiBiase, No. 10-cv-01343, 2011 WL 2473531, *1 (D. Nev. June 22, 2011) (Hunt, C.J.). [↩]
  35. See, e.g., Black v. Henry G. Allen Co., 42 F. 618, 621 (C.C.S.D.N.Y. 1890) ([T]here is no restriction upon the power of the proprietor to assign or transfer, in equity, an exclusive right to use the copyrighted book in a particular manner or for particular purposes upon such terms and conditions as may be agreed upon. In such case the legal title remains in the proprietor; and a beneficial interest, to the extent which is agreed upon, vests in the other party, who has acquired an equitable right in the copyright, and who will be properly styled an assignee of an equitable interest.”) (internal quotations omitted); Bisel v. Ladner, 1 F.2d 436 (3d Cir. 1924) (“The legal title to a copyright vests in the person in whose name the copyright is taken out. It may, however, be held by him in trust for the true owner . . . .”); Manning v. Miller Music Corp., 174 F.Supp. 192, 195 (S.D.N.Y. 1959) (“[T]he courts recognize that legal title to a copyright may be in one person and equitable title in another. Thus, one may be a ‘proprietor’ of a copyright if he holds legal title, though equitable title may be in another wither expressly or as trustee ex malificio.”) (internal citations omitted); Silverman v. Sunrise Pictures Corp., 273 F. 909, 914 (2d Cir. 1921) (“There is nothing in the nature of copyright forbidding a separation between the legal and equitable titles; one may hold in trust for others . . . .”); Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1578 n.3 (Fed. Cir. 1991) (discussing patents) (“Equitable title may be defined as the beneficial interest of one person whom equity regards as the real owner, although the legal title is vested in another.”) (internal quotations omitted); Matter of Southmark Corp., 49 F.3d 1111, 1117-18 (5th Cir. 1995) (“In a trust relationship, by contrast, the law actually divides the bundle of rights in the property; the trustee holds legal title while the beneficiary possesses an equitable title or property interest.”). [↩]
  36. See, e.g., Marrone v. Washington Jockey Club of Dist. of Columbia, 227 U.S. 633, 636 (1913) (“A contract binds the person of the maker, but does not create an interest in the property that it may concern, unless it also operates as a conveyance.”); Matter of Southmark Corp., 49 F.3d 1111, 1117-18 (5th Cir. 1995) (“At the outset, it is important to distinguish generally between two types of ‘equitable interests.’ In a contractual (or debtor-creditor) relationship, the creditor may possess an ‘equitable claim’ to property actually owned by the debtor, but there is no division of ownership or title in the property at issue; the debtor is entirely free to dispose of the property as he sees fit. In a trust relationship, by contrast, the law actually divides the bundle of rights in the property; the trustee holds legal title while the beneficiary possesses an equitable title or property interest.”). [↩]
  37. See, e.g., Presley’s Estate v. Russen, 513 F.Supp. 1339, 1350 (D.N.J. 1981) (“An assignment passes legal and equitable title to the property while a license is mere permission to use. Assignment is the transfer of the whole of the interest in the right while in a license the owner retains the legal ownership of the property.”). [↩]
  38. 17 U.S.C.A. § 301(a) (West 2013) (“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 as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, 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.”). [↩]
  39. See, e.g., Ted Browne Music Co. v. Fowler, 290 F. 751, 753 (2d Cir. 1923) (“The owner of the equitable title is not a mere licensee [i.e., a nonexclusive licensee], and he may sue in equity, particularly where the owner of the legal title is an infringer, or one of the infringers, thus occupying a position hostile to the plaintiff.”); Cortner v. Israel, 732 F.2d 267, 271 (2d Cir. 1984) (“Prior to the adoption of the 1976 Copyright Act, 17 U.S.C. §§ 101, 501(b), the beneficial owner, in order to have standing to sue the infringer, was required to join the owner of the copyright as a defendant, alleging that the latter had refused after demand to sue.”); Buck v. Virgo, 22 F.Supp. 156, 157 (W.D.N.Y. 1938) (“The rights of a licensee under a copyright do not depend upon legal title. A licensee has no right to sue in his own name for infringement. The reason for the necessity of joining the owner of the copyright as plaintiff is that the owner has the legal title. This he holds in trust for the licensee.”) (internal citations omitted); Stephens v. Howells Sales Co., 16 F.2d 805, 806 (S.D.N.Y. 1926) (“[A] licensee cannot bring suit for infringement of the copyright under which he holds his license in his own name; this for the reason that the copyright is, technically speaking, indivisible, the legal title remaining in the licensor and the licensee having merely an equitable title.”). [↩]
  40. See, e.g., Stainback v. Mo Hock Ke Lok Po, 336 U.S. 368, 382 n.2 (1949) (“Notwithstanding the fusion of law and equity by the Rules of Civil Procedure, the substantive principles of Courts of Chancery remain unaffected.”); Railex Corp. v. Joseph Guss & Sons, Inc., 40 F.R.D. 119, 123 (D.D.C 1966) (“Initially, it should be mentioned that F.R.C.P. Rule 2 abolishes only the procedural distinctions but not the substantive distinctions between law and equity. The substantive distinctions between legal and equitable rights and remedies are still applicable in the Federal Courts, particularly with regard to the constitutional right to trial by jury ‘in suits at common law’ declared by the Seventh Amendment.”). [↩]
  41. 17 U.S.C.A. § 101 (West 2013). [↩]
  42. Gardner v. Nike, Inc., 279 F.3d 774 (9th Cir. 2002). [↩]
  43. 17 U.S.C.A. § 201(d)(2) (West 2013) “Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred as provided by clause (1) and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title.”). [↩]
  44. See, e.g., Littlefield v. Perry, 88 U.S. 205, 223 (1874) (discussing patents) (“A court of equity looks to substance rather than form. When it has jurisdiction of parties it grants the appropriate relief without regard to whether they come as plaintiff or defendant. In this case the person who should have protected the plaintiff against all infringements has become himself the infringer. He held the legal title to his patent in trust for his licensees. He has been faithless to his trust, and courts of equity are always open for the redress of such a wrong. This wrong is an infringement.”); Indep. Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459, 468-69 (1926) (discussing patents) (“If the owner of a patent, being within the jurisdiction, refuses or is unable to join an exclusive licensee as coplaintiff, the licensee may make him a party defendant by process, and he will be lined up by the court in the party character which he should assume. . . . This would seem to be in accord with general equity practice. . . . A cestui que trust may make an unwilling trustee a defendant in a suit to protect the subject of the trust.”) (internal citations omitted). [↩]
  45. A. Brod, Inc. v. SK&I Co., L.L.C., 998 F.Supp. 314 (S.D.N.Y. 1998). [↩]
  46. Id. at 318. [↩]
  47. Id. at 320. [↩]
  48. Id. at 325 (internal citations omitted). [↩]
  49. See Rhone Poulenc Agro, S.A. v. DeKalb Genetics Corp., 284 F.3d 1323, 1328 (Fed. Cir. 2002) (“In short, because of the importance of having a uniform national rule, we hold that the bona fide purchaser defense to patent infringement is a matter of federal law. Because such a federal rule implicates an issue of patent law, the law of this circuit governs the rule.”). [↩]
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“To Do” vs. “To Authorize”

November 06, 2012 · · 1 comment

Today’s guest post comes from Copyhype contributor Devlin Hartline.

On its face, the Copyright Act provides that copyright owners actually have two separate sets of rights. Section 106 of the Act gives copyright owners the exclusive rights “to do” and “to authorize” certain listed activities with their copyrighted works, including creating reproductions, making adaptations, distributing copies to the public, publicly performing them, and publicly displaying them.1 It’s clear enough what it means “to do” any of those listed activities, but what does it mean “to authorize” them? Moreover, does merely authorizing someone else to infringe lead to liability even if that party doesn’t actually infringe?

Section 501 of the Act provides that “[a]nyone who violates any of the exclusive rights of the copyright owner” is an infringer.2 It matters not whether they violated the exclusive right “to do” or “to authorize” the listed activity. Either way it’s infringement and they’re an infringer, subject to the full range of remedies under the Act. Nonetheless, as the Supreme Court has noted, distinguishing between different types of infringement is not always easy since “the lines between direct infringement, contributory infringement, and vicarious liability are not clearly drawn.”3

Under the 1909 Copyright Act, courts “came to mixed conclusions about how much involvement in infringing was necessary to subject a defendant to liability for an infringement.”4 The doctrinal disarray was not helped by the fact that the previous Act “did not specifically state that the copyright holder had the exclusive right to authorize use” of the copyrighted work.5 But that all changed with the addition of the right “to authorize” in the 1976 Copyright Act, which “was intended to remove the confusion surrounding contributory and vicarious infringement.”6

But can merely authorizing a listed activity itself be infringement without more? In other words, can one who authorizes an infringement be liable even if that authorized infringement never occurs? That depends on whether the exclusive right “to authorize” is seen as an independent right that stands on its own. The relevant House Report has surprisingly little to say about the newly-minted right “to authorize,” though it does suggest that the right doesn’t stand alone:

The exclusive rights accorded to a copyright owner under section 106 are ‘to do and to authorize‘ any of the activities specified in the five numbered clauses. Use of the phrase ‘to authorize’ is intended to avoid any questions as to the liability of contributory infringers. For example, a person who lawfully acquires an authorized copy of a motion picture would be an infringer if he or she engages in the business of renting it to others for purposes of unauthorized public performance.7

The reason it matters is because direct infringers are always liable to the copyright owner, while indirect infringers are only liable if the authorized infringement actually occurs.8 Thus, if the exclusive right “to authorize” is in fact merely a codification of existing secondary liability doctrines, then one who authorizes an infringement has no liability unless the party authorized actually infringes. On the other hand, if the exclusive right “to authorize” stands alone, then mere authorization of an infringement is itself infringement—even if the party authorized doesn’t actually infringe.

In his influential copyright treatise, Nimmer posits that a “far more perplexing question is whether direct infringement must even exist in order for third-party liability to arise.”9 He thinks that reading the Act to create liability for mere authorization without actual infringement is “overly facile,” and that “to authorize” should be seen as “simply a convenient peg on which Congress chose to hang the antecedent jurisprudence of third-party liability.”10 He concludes that “the rule should generally prevail that third party liability, as its name implies, may exist only when direct liability, i.e., infringement, is present.”11

A few district courts have disagreed with Nimmer and found that the right “to authorize” stands alone. For example, one district court stated that “Congress created a new form of ‘direct’ infringement” when the Act was amended to add the right “to authorize.”12 Another district court stated that “tying the authorization right solely to a claim of justiciable contributory infringement appears contrary both to well-reasoned precedent, statutory text, and legislative history.”13 That court held that merely authorizing infringing acts could itself constitute direct infringement.

A different district court followed suit and stated that Section 106 should be read literally to create an independent, exclusive right “to authorize” use of a copyrighted work.14 That court held that “mere authorization . . . constitutes direct infringement and is actionable under United States Copyright Law.”15 And in yet another district court, it was held that infringement commences at the moment that authorization occurs, because “the right ‘to authorize’ infringing acts” was itself “a right newly recognized by Congress.”16 But these four district courts represent the minority view, and no appellate court that I could find has ever agreed.

In fact, the appellate courts that have addressed the issue have instead agreed with Nimmer, as have the district courts that have cited them. In a leading case, the Ninth Circuit stated that “the addition of the words ‘to authorize’ in the 1976 Act appears best understood as merely clarifying that the Act contemplates liability for contributory infringement . . . .”17 The court of appeals quoted Nimmer for the proposition that Congress was merely codifying the preexisting “jurisprudence of third party liability.”18 Accordingly, the appellate court found that the authorization right is only implicated in cases of contributory infringement, i.e., where there is also direct infringement.

The First Circuit took a similar tack while addressing the issue of whether authorization is infringement “where there is no adequate proof that the third party ever undertook an infringing act.”19 The court of appeals noted that “most (perhaps all) courts that have considered the question have taken the view that a listed infringing act (beyond authorization) is required for a claim.”20 While acknowledging that “the better bare-language reading would allow” a claim for mere authorization, the appellate court nonetheless held that there must be proof “of an infringing act after the authorization.”21

The district court in the famous Jammie Thomas-Rasset case considered whether merely “making available” song files in a peer-to-peer share folder violated plaintiffs’ exclusive right “to authorize” distributions. (This was in addition to its consideration of whether Thomas-Rasset violated plaintiffs’ exclusive right “to do” distributions, as I wrote about previously.) After surveying the statutory text, case law, and legislative history, the district court concluded that “the authorization clause merely provides a statutory foundation for secondary liability, not a means of expanding the scope of direct infringement liability.”22 Moreover, said the district court, “the authorization right . . . only applies if there is an actual dissemination.”23

Bringing us back to the Copyright Act, it’s safe to say that while the plain wording of Section 106 appears to create an independent, exclusive right “to authorize” the listed activities, the majority view is that the right “to authorize” doesn’t stand alone and that one who authorizes an infringement is only liable if the authorized infringement actually takes place.

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Footnotes

  1. 17 U.S.C.A. § 106 (West 2012) (“the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending; (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly; (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.”). [↩]
  2. 17 U.S.C.A. § 501 (West 2012). [↩]
  3. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 435, n.17 (1984) (internal quotations omitted). [↩]
  4. Peter Starr Prod. Co. v. Twin Cont’l Films, Inc., 783 F.2d 1440, 1443 (9th Cir. 1986). [↩]
  5. Id. (emphasis in original). [↩]
  6. Id. [↩]
  7. H.R. REP. 94-1476, 61. [↩]
  8. See, e.g., 1 Goldstein, Copyright: Principles, Law and Practice § 6.1, at 705 (1989) (“It is definitional that, for a defendant to be held contributorily . . . liable, a direct infringement must have occurred.”). [↩]
  9. 3-12 Nimmer on Copyright § 12.04[D][1]. [↩]
  10. Id. [↩]
  11. Id. [↩]
  12. ITSI T.V. Productions, Inc. v. California Auth. of Racing Fairs, 785 F.Supp. 854, 860 (E.D. Cal. 1992). [↩]
  13. Curb v. MCA Records, Inc., 898 F. Supp. 586, 594 (M.D. Tenn. 1995). [↩]
  14. Expediters Int’l of Washington, Inc. v. Direct Line Cargo Mgmt. Services, Inc., 995 F. Supp. 468, 476 (D.N.J. 1998). [↩]
  15. Id. at 477. [↩]
  16. Thomas v. Pansy Ellen Products, Inc., 672 F. Supp. 237, 241 (W.D.N.C. 1987). [↩]
  17. Subafilms, Ltd. v. MGM-Pathe Communications Co., 24 F.3d 1088, 1093 (9th Cir. 1994). [↩]
  18. Id. (internal quotations and brackets omitted). [↩]
  19. Venegas-Hernandez v. ACEMLA, 424 F.3d 50, 57 (1st Cir. 2005). [↩]
  20. Id. at 57. [↩]
  21. Id. at 59. [↩]
  22. Capitol Records, Inc. v. Thomas, 579 F.Supp.2d 1210, 1221 (D. Minn. 2008). [↩]
  23. Id. at 1223. [↩]
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Nimmer Changes His Tune: “Making Available” is Distribution

October 02, 2012 · · 4 comments

Today’s guest post comes from Copyhype contributor Devlin Hartline.

One topic of debate in copyright is over whether simply “making available” a file on a peer-to-peer network is itself a violation of the distribution right.1 The courts have been split on the issue.2 Professor Peter S. Menell explains the controversy:

Interpreting “distribute” narrowly, some courts have held that copyright owners must prove that a sound recording placed in a share folder was actually downloaded to establish violation of the distribution right. Other courts held that merely making a sound recording available violates the distribution right. The ramifications for copyright enforcement in the Internet age are substantial. Under the narrow interpretation, the relative anonymity of Internet transmissions in combination with privacy concerns make enforcement costly and difficult. A broad interpretation exposes millions of file-sharers to potentially crushing statutory damages.3

The popular copyright treatise Nimmer on Copyright has played an important role in the debate. The treatise was first published in 1963 by the late Professor Melville Nimmer. Since 1985, his son Professor David Nimmer (“Nimmer”) has taken over the task of editing and updating it. It’s hard to exaggerate how influential Nimmer on Copyright has been in shaping copyright jurisprudence. A quick, informal search on Westlaw turns up 3,301 state and federal cases that have cited it. That is compared to 1,444 cites for Goldstein on Copyright and 236 cites for Patry on Copyright, two other leading copyright treatises.

Several courts have consulted Nimmer on Copyright when analyzing whether “making available” constitutes distribution. As recently as 2011, the treatise took the position that infringement of the distribution right requires actual dissemination of copies of a work to the public.4 But in the latest edition, Nimmer has changed his tune—the treatise now states that “making available” is distribution simpliciter. After a detailed examination of the legislative history of the current Copyright Act, Nimmer now concludes that “the distribution right was formulated precisely so that it would extend to making copyrighted works available, rather than mandating proof of actual activities of distribution.”5

Thomas-Rasset and “Making Available”

The “making available” issue took center stage in the famous Jammie Thomas-Rasset case. In 2006, certain recording companies sued Thomas-Rasset for willful copyright infringement. One of the claims was that she had violated the distribution right by merely “making available” twenty-four copyrighted song files on the KaZaA peer-to-peer network. An investigator working for the plaintiffs found that the song files were available in a KaZaA share folder for others to download, but it could not be determined whether other users had in fact downloaded the files.

The district court instructed the jury that the “act of making copyrighted sound recordings available for electronic distribution on a peer-to-peer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown.”6 The jury found Thomas-Rasset liable for willful copyright infringement, awarding the plaintiffs statutory damages of $9,250 per song, for a total of $222,000. The next day, the court entered judgment on the jury’s verdict.

Thomas-Rasset then moved for new trial, or in the alternative, for remittitur. Months later, the district court sua sponte asked the parties to submit briefs on the issue of whether its jury instruction on “making available” was a manifest error of law. Several amici, including the EFF, Public Knowledge, and the MPAA, were permitted to file briefs as well. The plaintiffs and their supporters argued that the jury instruction on “making available” was proper, while Thomas-Rasset and her supporters argued that “making available” is not distribution. After thorough analysis, the district court sided with Thomas-Rasset.

The district court noted that while the Eighth Circuit had not addressed the “making available” issue in the peer-to-peer context, the court of appeals had nonetheless considered and rejected the “making available” argument in a different context in National Car.7 In that case, the appellate court grappled with the issue of whether a state law claim for breach of contract was preempted by the Copyright Act. The district court below had held that a licensee’s unauthorized use of licensed software to process third-party data was equivalent to distribution of copies of that software.

The Eighth Circuit rejected the notion that use of a software program for the benefit of third parties constituted distribution of the software. The court of appeals turned to Nimmer’s treatise for the proposition that the distribution right “grants the copyright owner the exclusive right publicly to sell, give away, rent or lend any material embodiment of his work.”8 It concluded that “even with respect to computer software, the distribution right is only the right to distribute copies of the work. As Professor Nimmer has stated, infringement of the distribution right requires an actual dissemination of either copies or phonorecords.”9

Finding that the Eighth Circuit’s opinion in National Car was binding precedent, the district court in the Thomas-Rasset case held that liability “for violation of the exclusive distribution right . . . requires actual dissemination.”10 The district court then granted Thomas-Rasset’s motion for a new trial on the ground that the jury instruction on the “making available” issue was legal error that substantially prejudiced her rights. The new trial was of no help to Thomas-Rasset. Even without the “making available” instruction, the jury again found her liable for willful copyright infringement of the twenty-four song files.

The Thomas-Rasset story demonstrates nicely the influence that Nimmer on Copyright has had in the “making available” debate. The Eighth Circuit in National Car relied on the treatise in finding that violation of the distribution right requires actual dissemination of copies of a work to the public. In turn, the district court in the Thomas-Rasset case followed suit in concluding that merely “making available” a work on a peer-to-peer network does not violate the distribution right. But what’s to be made of the fact that Nimmer has now changed his tune on the “making available” issue?

Nimmer’s New Tune

In his recent journal article, Professor Peter S. Menell (“Menell”) surveys the voluminous legislative history leading up the passage of the 1976 Copyright Act, and he shows that Congress did in fact intend to establish that “making available” is distribution. Menell examines the significant errors in interpreting the scope of the distribution right made in the treatises, scholarship, and court decisions. And then in a footnote, he mentions that he was able convince Nimmer to change his tune:

The discussion that follows is based upon the version of Nimmer on Copyright that was available to jurists and practitioners through August 2011. After reading this article, Professor Nimmer asked me to co-author a complete revision of the sections of Nimmer on Copyright relating to the scope of the distribution right and the definition of “publication.”11

The latest edition of Nimmer’s treatise does indeed adopt Menell’s findings on the “making available” issue. (Relatedly, Menell and Nimmer have created two multimedia presentations of their discoveries that I highly recommend: Part I: In Search of the Lost Ark and Part II: The Elephant in the Room.) Nimmer on Copyright now notes that the courts that have looked at the “making available” puzzle have all failed to consider the relevant evidence of Congress’s intent:

The point of commonality among these opinions is that none of them went back to examine the rich trove of legislative materials from the early to mid 1960s and early 1970s explicating Congress’s intent in shifting terminology from the 1909 rights to publish and vend to the 1976 Act’s right to “distribute,” and at the same time expanding the definition “publication” to include offers to distribute.12

Under the 1909 Copyright Act, there was no right to distribute. Instead, copyright owners had the rights to publish and to vend. The right to publish was universally understood to encompass all public offerings of a work, i.e., “making available” copies of a work to the public. Nimmer observes that no court “recognized a requirement to prove actual distribution of copies, and even gratuitous offers of a work to the public fell within the right to publish.”13 That “making available” copies of a work to the public constituted publication was well-settled at the time the revisions for the modern Copyright Act were considered.

Determination of what constituted publication under the 1909 Act was of critical importance because a work was deemed to have lost its common law copyright protection the moment it was published. Moreover, if a work was published without the obligatory copyright notice, that work fell into the public domain and received no statutory copyright protection. Since the penalty for publishing a work without copyright notice was so harsh, judges advanced some questionable distinctions into the jurisprudence. The drafters of the 1976 Act introduced the right to distribute in an attempt to shed these dubious vestiges.

Nimmer explains:

The drafters of the current Act wished to avoid the tremendous accumulation of common law interpretation that had thus arisen over how to define “publication.” For that reason, they chose a new term, “distribution,” as an omnibus term that would encompass all acts then qualifying as “publication,” without the technical exceptions that had accreted through the common law process of various rulings.14

Thus, the introduction of the right to distribute in the 1976 Act was intended not only to incorporate the preexisting publication right, which included “making available” copies of a work to the public, but it was also intended to broaden the publication right by eliminating the problematic exceptions that had been introduced into the doctrine by the judiciary.

As Nimmer summarizes:

The distribution right accorded by Section 106(3) is to be interpreted broadly, consonant with the intention expressed by its drafters. It extends to the offer to the general public to make a work available for distribution without permission of the copyright owner. No consummated act of actual distribution need be demonstrated in order to implicate the copyright owner’s distribution right.15

So under Nimmer’s contemporary analysis, the district court in the Thomas-Rasset case had it wrong when it concluded that nowhere in the legislative history does “Congress state that distribution should be given the same broad meaning as publication.”16 Not only did Congress intend that distributions should encompass all publications, the new distribution right was specifically created to be broader than the antecedent publication right. Similarly, the district court in the Thomas-Rasset case had it backwards when it held that “all distributions to the public are publications, but not all publications are distributions to the public.”17

Given the widespread influence of his treatise, it seems inevitable that others will follow Nimmer in his conclusion that “the act of making available sound recordings for downloading by the public through file-sharing networks suffices to show actionable copyright infringement.”18 But only time will tell how many others change their tunes as well.

Follow me on Twitter: @devlinhartline

Footnotes

  1. 17 U.S.C.S. § 106(3) (Lexis 2012) (“the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: *** (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending”). [↩]
  2. See, e.g., Atl. Recording Corp. v. Howell, 554 F.Supp.2d 976 (D. Ariz. 2008); London-Sire Records, Inc. v. Doe 1, 542 F.Supp.2d 153 (D. Mass. 2008); Motown Record Co., LP v. DePietro, No. 04-cv-2246, 2007 WL 576284 (E.D. Pa. Feb. 16, 2007); Warner Bros. Records, Inc. v. Payne, No. 06-ca-051, 2006 WL 2844415 (W.D. Tex. July 17, 2006); Atl. Recording Corp. v. Anderson, No. 06-cv-3578, 2008 WL 2316551 (S.D. Tex. Mar. 12, 2008); Universal City Studios Productions LLLP v. Bigwood, 441 F.Supp.2d 185 (D. Me. 2006); UMG Recordings, Inc. v. Alburger, 2009 U.S. Dist. LEXIS 91585 (E.D. Pa. Sept. 29, 2009). [↩]
  3. Peter S. Menell, In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age, 59 J. Copyright Soc’y U.S.A. 1 (2011). [↩]
  4. Nimmer on Copyright § 8.11[A], at 8-149 (2007) (“Infringement of [the distribution right] requires an actual dissemination of either copies or phonorecords.”). [↩]
  5. 2-8 Nimmer on Copyright § 8.11[D][4][c]. [↩]
  6. Capitol Records, Inc. v. Thomas, 579 F.Supp.2d 1210, 1213 (D. Minn. 2008) (internal quotations omitted). [↩]
  7. National Car Rental Sys. v. Computer Assocs. Int’l, 991 F.2d 426 (8th Cir. 1993). [↩]
  8. Id. at 430 (quoting 2 Nimmer on Copyright § 8.11[A], at 8-123) (emphasis in original; internal quotations omitted). [↩]
  9. Id. at 434 (quoting 2 Nimmer on Copyright § 8.11[A], at 8-124.1) (emphasis in original; internal quotations and brackets omitted). [↩]
  10. Thomas, 579 F.Supp.2d at 1226. [↩]
  11. Menell, 59 J. Copyright Soc’y U.S.A. at 20 n.90. [↩]
  12. 2-8 Nimmer on Copyright § 8.11[D][1]. [↩]
  13. 2-8 Nimmer on Copyright § 8.11[B][4][d] (emphasis in original). [↩]
  14. 2-8 Nimmer on Copyright § 8.11[A]. [↩]
  15. 2-8 Nimmer on Copyright § 8.11[B][4][d]. [↩]
  16. Thomas, 579 F.Supp.2d at 1219. [↩]
  17. Id. at 1220. [↩]
  18. 2-8 Nimmer on Copyright § 8.11[D][4][c]. [↩]
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Twitter’s Potential Secondary Liability

September 20, 2012 · · 5 comments

Today’s guest post comes from Copyhype contributor Devlin Hartline.

Last week, Seattle-based photographer Christopher Boffoli sued Twitter in the U.S. District Court for the Western District of Washington for contributory copyright infringement. Boffoli is well-known for his “Disparity Series,” which according to the complaint is “a series of art photographs featuring miniature figures in whimsical poses on fruit.” Seattle Magazine has a brief article about the series. Boffoli’s case was also a topic of discussion on the most recent episode of “This Week in Law” (where Terry Hart was a guest).

In the complaint, Boffoli alleges that Twitter users uploaded several of his copyrighted photographs without license or permission and then linked to them in various tweets. Some images were hosted on Twitter’s own servers, while others were hosted on servers operated by third-parties. Boffoli claims that even though he sent four DMCA takedown notices to Twitter’s registered agent for receiving such notices, none of the hosted links or images were removed.

As such, Boffoli alleges that Twitter is liable for willful contributory infringement because (1) it had actual knowledge of infringement provided by his DMCA takedown notices, and (2) it materially contributed to the underlying infringements by Twitter’s users.

Ars Technica and Techdirt ran articles about the lawsuit last week. Both pointed out that Twitter’s failure to respond to the DMCA takedown notices doesn’t necessarily mean that the service provider is liable for infringement. That much is true, but it was also suggested in both articles that Twitter wasn’t likely to be liable for infringement despite its failure to remove the links and images complained of. It’s that notion that I’ll examine more closely.

DMCA Notice-and-Takedown

The DMCA1 notice-and-takedown provisions are no doubt familiar. Title II of the DMCA, titled the “Online Copyright Infringement Liability Limitation Act,” created Section 5122 of the Copyright Act—what people often are referring to when they talk about the “DMCA,” even though it’s only one part. It’s here that the notice-and-takedown provisions are found. The idea is simple: A copyright owner who finds infringing material on a service provider’s system sends notice to the service provider who then takes it down.

The “DMCA did not simply rewrite copyright law for the on-line world,” but rather, “it crafted a number of safe harbors which insulate ISPs from most liability should they be accused of violating traditional copyright law.”3 The DMCA uses a classic carrot-and-stick approach to get service providers to play along. The carrot of limited liability within the safe harbors is enforced by the stick of full liability without. This “preserves strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment.”4

When a third-party user stores material on a service provider’s system, the provider’s potential copyright liability is greatly reduced if it “responds expeditiously to remove, or disable access to,” the material upon notice that it “is claimed to be infringing or to be the subject of infringing activity.”5 Thus, to moor in the safe harbors, a service provider must quickly take down allegedly infringing material when notified. Once in the safe harbors, a service provider is only potentially liable for limited injunctive relief—it’s not potentially liable for monetary relief as it would be otherwise.

A common misperception is in thinking that a service provider that qualifies for the safe harbors cannot be liable for infringement. The DMCA itself is irrelevant to determining whether the service provider is an infringer. The safe harbors limit liability, but they “do not affect the question of ultimate liability under the various doctrines of direct, vicarious, and contributory” infringement.6 After it’s determined that a service provider is an infringer in the first place, the safe harbors can be used to assess the extent of the liability. Although as a practical matter, courts usually start with the analysis of the safe harbors first.7

Nor does the fact that a service provider fails to qualify for the safe harbors necessarily mean that it is liable for infringement. Such a service provider “is still entitled to all other arguments under the law—whether by way of an affirmative defense or through an argument that conduct simply does not constitute a prima facie case of infringement under the Copyright Act.”8 This make sense because the material complained of may not even be infringing or the service provider may qualify for some defense. Just because its liability isn’t limited by the safe harbors, it doesn’t mean that the service provider is liable in the first place.

Immunity under the safe harbors is not presumptive, and it’s only granted to service providers who do not have knowledge, either actual or constructive, of infringement. The “DMCA’s protection of an innocent service provider disappears at the moment the service provider loses its innocence, i.e., at the moment it becomes aware that a third party is using its system to infringe.”9 One common way to alert a service provider of infringement is via a takedown notice, which is effective only if it “includes substantially” certain elements listed in the statute.10

Contributory Infringement

With “roots in the tort-law concepts of enterprise liability and imputed intent,” contributory infringement is a type of secondary copyright liability.11 It follows from the common law doctrine that “one who knowingly participates in or furthers a tortious act is jointly and severally liable with the prime tortfeasor,” a concept that applies in copyright law as it does in numerous other areas of the law.12 Put simply, contributory infringement is the idea that a person who contributes to the infringement of another is held liable for the infringement they helped to bring about.

The courts have formulated different tests for contributory infringement, but they all share the same basic elements. The test in the Ninth Circuit, where Boffoli filed his suit against Twitter, is simple: “one contributorily infringes when he (1) has knowledge of another’s infringement and (2) either (a) materially contributes to or (b) induces that infringement.”13 Inducement infringement, identified by the Supreme Court in the Grokster opinion,14 is not at issue here. Boffoli is claiming traditional contributory infringement, which has two elements: (1) knowledge, and (2) material contribution.

As to the knowledge element, contributory infringement “requires that the secondary infringer know or have reason to know of direct infringement.”15 In other words, either actual or constructive knowledge will suffice. It’s not enough that a service provider merely supplies the means of accomplishing infringement.16 Instead, there must be knowledge of “specific information which identifies infringing activity” before liability attaches.17 This makes sense because without specific knowledge, a service provider wouldn’t know what items to remove to avoid liability.

The relationship between knowledge and intent should also be noted. An explicit finding of intent is not “necessary to support liability for contributory copyright infringement.”18 Under the “rules of fault-based liability derived from the common law,”19 the “intention to cause the natural and probable consequences” of one’s conduct may be imputed.20 It’s not mandatory to find that a service provider actually intended to contribute to the underlying infringement. Instead, a “knowing failure to prevent infringing actions” can be the basis for imposing contributory liability.21

Generally speaking, the material contribution element “turns on whether the activity in question substantially assists direct infringement.”22 In the internet context, the Ninth Circuit last year held that there “is no question that providing direct infringers with server space satisfies” this standard because it is “an essential step in the infringement process.”23 The alleged material contribution must have a direct connection to the infringement such that it assists or enables internet users to locate infringing content.24

In the famous Napster case, the Ninth Circuit held that “if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement.”25 The appellate court concluded that “Napster materially contributes to the infringing activity,” since without its help, “Napster users could not find and download the music they want” as easily.26 To impose contributory liability, it was enough that “Napster provides the site and facilities for direct infringement.”27

Similarly, the Ninth Circuit in Perfect 10 stated that “a computer system operator can be held contributorily liable if it has actual knowledge that specific infringing material is available using its system and can take simple measures to prevent further damage to copyrighted works yet continues to provide access to infringing works.”28 The court of appeals held that “Google could be held contributorily liable if it had knowledge that infringing . . . images were available using its search engine, could take simple measures to prevent further damage to [plaintiff’s] copyrighted works, and failed to take such steps.”29

Putting it all together, I think Boffoli has a good chance of success on the merits of his claim. If he sent DMCA takedown notices to Twitter that complied substantially with the elements listed in the statute, then Twitter will have lost its innocence and will be deemed to have knowledge of the infringement (should there actually be any). Once knowledge is established, Twitter’s intent to cause the infringement will be imputed. And as to material contribution, Twitter is assisting and enabling its users to find the infringing content it provides on its system.

This is similar to the situation in Napster, where the Ninth Circuit held that Napster could be liable as a contributory infringer for failing to remove material it knew to be infringing. This is also similar to the circumstances in Perfect 10, where the Ninth Circuit held that Google could be liable as a contributory infringer for failing to remove links to infringing images once alerted to their presence. Here, Twitter is failing to remove both links and images.

That said, it’s kind of hard to understand why Twitter hasn’t removed the links and images Boffoli complained of. Perhaps there’s more going on here than meets the eye, but under the allegations in the complaint, it seems to me that Twitter could be contributorily liable for whatever infringement is taking place of Boffoli’s copyrighted images.

Follow me on Twitter: @devlinhartline

Footnotes

  1. Digital Millennium Copyright Act, Pub.L. No. 105-304, 112 Stat. 2860 (1998) (codified as amended in scattered sections of 17 U.S.C. and at 28 U.S.C. § 4001). [↩]
  2. 17 U.S.C.A. § 512 (West 2012); Section 512 codified the principles developed by the district court in Religious Tech. Ctr. v. Netcom On-Line Commc’n Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995). [↩]
  3. Ellison v. Robertson, 189 F.Supp.2d 1051, 1061 (C.D. Cal. 2002). [↩]
  4. H.R. Conf. Rep. 105-796, 72 (1998). [↩]
  5. See 17 U.S.C.A. § 512(c)(1)(C) (West 2012) (“A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider– *** upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.”). [↩]
  6. Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F.Supp.2d 1146, 1174 (C.D. Cal. 2002). [↩]
  7. See, e.g., Costar Group Inc. v. Loopnet, Inc., 164 F.Supp.2d 688, 699 (D. Md. 2001) (“The existence of the safe harbor convolutes the analysis of copyright infringement which, theoretically, should proceed in a straight line. Ideally, CoStar would have to make a prima facie showing that LoopNet was liable of contributory infringement and then the court would turn to the question of whether the “safe harbor” provided a defense. However, because the parameters of the liability protection provided by the “safe harbor” are not contiguous with the bounds of liability for contributory infringement, the analysis may proceed more efficiently if issues are decided a bit out of order. On summary judgment, it is often appropriate for a court to decide issues out of the traditional order because a dispute of fact is only material if it can affect the outcome of a proceeding. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Thus, to the extent, if at all, that LoopNet is entitled to summary judgment in its safe harbor defense, all other issues concerning damages liability for contributory infringement would be rendered immaterial.”). [↩]
  8. CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 552 (4th Cir. 2004). [↩]
  9. ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 625 (4th Cir. 2001). [↩]
  10. 17 U.S.C.A. § 512(c)(3)(A) (West 2012) (“To be effective under this subsection, a notification of claimed infringement must be a written communication provided to the designated agent of a service provider that includes substantially the following: (i) A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed. (ii) Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, a representative list of such works at that site. (iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material. (iv) Information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available, an electronic mail address at which the complaining party may be contacted. (v) A statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law. (vi) A statement that the information in the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.”). [↩]
  11. Perfect 10, Inc. v. Visa Int’l Serv. Ass’n, 494 F.3d 788, 795 (9th Cir. 2007). [↩]
  12. 1 Niel Boorstyn, Boorstyn On Copyright § 10.06[2], at 10-21 (1994). [↩]
  13. Perfect 10, 494 F.3d at 795; it should be noted too that contributory infringement requires direct infringement to have occurred before liability attaches; see 1 Goldstein, Copyright: Principles, Law and Practice § 6.1, at 705 (1989) (“It is definitional that, for a defendant to be held contributorily . . . liable, a direct infringement must have occurred.”). [↩]
  14. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (the Court held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”). [↩]
  15. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1020 (9th Cir. 2001). [↩]
  16. See, e.g., Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 436 (1984). [↩]
  17. Napster, 239 F.3d at 1021. [↩]
  18. Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., 658 F.3d 936, 943 (9th Cir. 2011). [↩]
  19. Grokster, 545 U.S. at 934-35. [↩]
  20. DeVoto v. Pac. Fid. Life Ins. Co., 618 F.2d 1340, 1347 (9th Cir. 1980); see also Restatement (Second) of Torts § 8A (1965) (“All consequences which the actor desires to bring about are intended, as the word is used in this Restatement. Intent is not, however, limited to consequences which are desired. If the actor knows that the consequences are certain, or substantially certain, to result from his act, and still goes ahead, he is treated by the law as if he had in fact desired to produce the result.”). [↩]
  21. Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1172 (9th Cir. 2007). [↩]
  22. Louis Vuitton, 658 F.3d at 943 (internal quotations omitted). [↩]
  23. Id. (internal quotations omitted). [↩]
  24. Perfect 10, 494 F.3d at 797. [↩]
  25. Napster, 239 F.3d at 1021. [↩]
  26. Id. at 1022. [↩]
  27. Id. [↩]
  28. Perfect 10, 508 F.3d at 1172 (internal quotations and citations omitted). [↩]
  29. Id. [↩]
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Judge Posner Did Not Say That Embedding Infringing Videos Is “Totally Legal”

August 15, 2012 · · 1 comment

Today’s guest post comes from Copyhype contributor Devlin Hartline.

Judge Posner’s opinion for the Seventh Circuit in Flava Works, Inc. v. Gunter has caused quite a bit of confusion, to say the least. As Terry Hart mentioned in his post last Monday, the headlines “showcase some of the shortcomings consistently seen in legal reporting.” That’s the diplomatic way of saying that the reporting from the “usual suspects” is bogus and misleading.

Here’s a further sampling of the cheerful headlines:

And my personal favorite:

That, of course, isn’t quite what Judge Posner said.

See if you can spot the syllogistic fallacy:

Major premise: Users embedded infringing videos on the myVidster website.

Minor premise: Judge Posner, confined to the particular facts of the partially-developed record before him (including the fact that there was no evidence that myVidster had encouraged or induced anyone to upload, embed, or stream any infringing videos) and limited by the particular arguments raised by the plaintiff (which only argued non-inducement contributory infringement), found that plaintiff Flava Works was not likely to be successful on the merits of its contributory infringement claim against myVidster for the user-embedded infringing videos.

Conclusion: All embedded infringing videos are totally legal. Hooray!

I’m still shaking my head.

Just because Judge Posner did not find infringement by myVidster for the particular embedded infringing videos at issue in the appeal, it doesn’t follow that all embedded infringing videos are therefore legal. That’s like saying that since a jury acquits one defendant in a prosecution for a shooting death, then all shootings that result in death must be legal.

One must separate out the general statements of law made by the court from the application of the law to the particular facts of the case. And with this opinion, that’s not the easiest thing to do—the opinion leaves much to be desired as far as clarifying exactly what the liabilities are for embedded infringing videos.

Nonetheless, I created tables of the potential liabilities identified by Judge Posner for uploading and streaming infringing videos and posted it to Scribd. Seeing it in tabular form, for me anyway, is quite helpful, and I welcome readers to see what I came up with (and to disagree in the comments if you read the case differently).

With amici like these…

The amicus brief filed in the Seventh Circuit by Google and Facebook, purporting to be in support of neither party (although Judge Posner wisely notes that the brief is “friendly to myVidster”), says it all:

II. Linking can potentially be contributory or vicarious copyright infringement under some circumstances.

To say that linking can never be direct copyright infringement is not to say that linking can never lead to copyright liability of any sort. Copyright law has well-developed doctrines of secondary liability—contributory infringement and vicarious infringement—which can hold liable a culpable party when that party has not, himself, done an act which directly infringes one of the exclusive rights. The specific requirements of these doctrines may be inquired into in the context of linking in the same way that they are applied to any other activity. ***

Thus, holding that myVidster is not a direct infringer—or that its users are not direct infringers—will not leave Flava Works without a path to a possible remedy. If Flava Works can show that myVidster or its users had knowledge of infringement and that their activities were intended to materially contribute to that infringement, myVidster or its users could potentially be liable as contributory infringers. If Flava Works can show that myVidster or its users had the right and ability to supervise the particular infringing performances and also had a direct financial interest in those performances, myVidster or its users could potentially be liable as vicarious infringers.

Brief of Amici Curiae Google Inc. and Facebook, Inc. in Support of Neither Party at 16-17, Flava Works, Inc. v. Gunter, No. 11-3190, 2012 WL 3124826 (7th Cir. Aug. 2, 2012) (emphasis added).

So even Google and Facebook agree that the user-embedded infringing videos on myVidster potentially make it liable for copyright infringement. Though, in their opinion, myVidster could only be liable as a contributory or vicarious infringer, and not as a direct infringer.

Suffice it to say that those claiming that sites hosting user-embedded infringing videos can never be liable for copyright infringement are just plain wrong. The fact that Google and Facebook admit as much should tell you how settled the principle is—few have more to lose on that score. If anyone were to deny it, it’d be them.

A linking site like myVidster can be liable as a secondary infringer, i.e., for contributory infringement (which includes inducement, as per Grokster) or for vicarious infringement. Such sites are not always liable, nor are they always free from liability. What matters is the role that the site plays in the underlying infringement, and that analysis must be done on a case-by-case basis as it is fact-intensive.

A bundle of rights

So what did Judge Posner actually say?

Recall that copyright is actually a bundle of rights:

§ 106. Exclusive rights in copyrighted works

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

17 U.S.C.A. § 106 (West 2012).

So there are actually six different copyright rights: (1) reproduction, (2) derivation, (3) distribution, (4) public performance, (5) public display, and (6) public performance (for digital audio transmissions of sound recordings). When we say that a certain act does or does not violate someone’s copyright rights, we have to be careful to say which right in particular we’re talking about. The same act can violate one right but not another; in fact, this is almost always the case.

Turning to the opinion, Judge Posner states:

Is myVidster therefore a contributory infringer if a visitor to its website bookmarks the video and later someone clicks on the bookmark and views the video? myVidster is not just adding a frame around the video screen that the visitor is watching. Like a telephone exchange connecting two telephones, it is providing a connection between the server that hosts the video and the computer of myVidster’s visitor. But as long as the visitor makes no copy of the copyrighted video that he is watching, he is not violating the copyright owner’s exclusive right, conferred by the Copyright Act, “to reproduce the copyrighted work in copies” and “distribute copies … of the copyrighted work to the public.” 17 U.S.C. §§ 106(1), (3). ***

As the record stands (a vital qualification, given that the appeal is from the grant of a preliminary injunction and may therefore be incomplete), myVidster is not an infringer, at least in the form of copying or distributing copies of copyrighted work. The infringers are the uploaders of copyrighted work. There is no evidence that myVidster is encouraging them, which would make it a contributory infringer.

Flava Works, Inc. v. Gunter, No. 11-3190, 2012 WL 3124826, *3-4 (7th Cir. Aug. 2, 2012) (emphasis added).

Take a moment to parse what Judge Posner actually said. Here, he’s talking only about the reproduction and distribution rights, numbers (1) and (3) in Section 106. He is not talking about the public performance right, number (4) in Section 106, or any of the other three copyright rights.

Judge Posner says that the party that uploaded the infringing video to the internet is an infringer since that party actually caused a copy to be made. And if myVidster encouraged or induced that party to upload the infringing video, it would be a contributory infringer to that infringement. But users of myVidster who thereafter merely stream that infringing video are not infringers of the reproduction or distribution rights since they have made no copies.

This is important: Judge Posner did not say that streaming infringing videos is legal (it’s not). He did not say that streaming infringing videos does not violate the public performance right (it does). He said that users who stream embedded infringing videos on the myVidster website do not violate the reproduction or distribution rights of the copyright holder. And since that streaming does not violate those two rights, by extension, myVidster is not a contributory infringer for facilitating that specific noninfringing conduct.

It should be noted that whether a streamer actually makes a copy is actually a debatable point, as Terry Hart points out in his post. The record in this case did not disclose whether copies were actually made when someone streamed an embedded infringing video using the myVidster website. Had the record indicated otherwise, it’s likely that the court would have reached a different conclusion on this point.

The public performance right

Judge Posner, like amici Google and Facebook, acknowledges that streaming an infringing video violates the public performance right. And if a website like myVidster significantly encourages or induces that infringement, it could be liable as a contributory infringer.

The opinion is a little confusing on this point, because Judge Posner provides two different interpretations of what it takes to violate the public performance right. The first interpretation is that merely making an infringing video available via a link is by itself direct infringement, while the second interpretation requires that someone have actually used the link to stream the infringing video before there is an infringement.

Either way, it’s clear that the second interpretation swallows the first; there is no doubt that streaming an infringing video is a violation of the public performance right. Judge Posner does not decide the issue of whether merely making the video available via a link suffices, but as Barry Sookman points out, there is reason to think that it does.

Judge Posner continues:

But if the public performance is the transmission of the video when the visitor to myVidster’s website clicks on the video’s thumbnail (the second interpretation) and viewing begins, there is an argument that even though the video uploader is responsible for the transmitting and not myVidster, myVidster is assisting the transmission by providing the link between the uploader and the viewer, and is thus facilitating public performance. ***

In contrast, Flava’s pirated videos are not sold, and there isn’t even admissible evidence that they’re actually being accessed via myVidster, rather than via other websites, and if they are not, myVidster is not contributing to their performance.

Id. at *8 (emphasis added).

Did you catch what Judge Posner said there? There was no admissible evidence that anyone had actually streamed one of plaintiff Flava Works’ videos using the myVidster website. And so, as with the reproduction and distribution rights discussed above, myVidster cannot be a contributory infringer unless it has actually facilitated infringing conduct.

Nor was there any evidence that myVidster had encouraged or induced anyone to embed infringing videos. So even if merely making an infringing video available via a link is itself direct infringement, myVidster would not be liable for that infringement either—not unless there was evidence that it had played a role in encouraging or inducing the person that posted the link.

Note what Judge Posner didn’t say. He did not say that there was no infringement because streaming an infringing video is not an infringement of the public performance right. He said that myVidster was not an infringer because there was no evidence that it had encouraged or induced anyone to embed an infringing video and there was no evidence that anyone actually used the myVidster website to stream an infringing video.

As I said above, whether or not a linking website like myVidster is liable for infringement must be determined on a case-by-case basis because it is a fact-intensive inquiry. Change the facts and the answer likely changes too.

The “Server Test”

I don’t think anyone else has reported as much, but I think that Judge Posner did in fact adopt the “server test” for the public performance right in the Seventh Circuit.

The “server test” comes from the district court in Perfect 10 v. Google, Inc.:

Under the server test, someone could create a website entitled “Infringing Content For All!” with thousands of in-line links to images on other websites that serve infringing content. That website, however, would be immune from claims of direct infringement because it does not actually serve the images. [footnote 10: That website, however, might still be held liable for secondary infringement.] ***

The Court concludes that in determining whether Google’s lower frames are a “display” of infringing material, the most appropriate test is also the most straightforward: the website on which content is stored and by which it is served directly to a user, not the website that in-line links to it, is the website that “displays” the content. Thus, the Court adopts the server test, for several reasons.

Perfect 10 v. Google, Inc., 416 F.Supp.2d 828, 839-43 (C.D. Cal. 2006) (emphasis added).

The Ninth Circuit, in Perfect 10 v. Amazon.com, Inc., affirmed in part and reversed in part, adopting the “server test” circuit-wide in the process:

In considering whether Perfect 10 made a prima facie case of violation of its display right, the district court reasoned that a computer owner that stores an image as electronic information and serves that electronic information directly to the user (“i.e., physically sending ones and zeroes over the [I]nternet to the user’s browser”) is displaying the electronic information in violation of a copyright holder’s exclusive display right. Conversely, the owner of a computer that does not store and serve the electronic information to a user is not displaying that information, even if such owner in-line links to or frames the electronic information. The district court referred to this test as the “server test.”

Applying the server test, the district court concluded that Perfect 10 was likely to succeed in its claim that Google’s thumbnails constituted direct infringement but was unlikely to succeed in its claim that Google’s in-line linking to full-size infringing images constituted a direct infringement. As explained below, because this analysis comports with the language of the Copyright Act, we agree with the district court’s resolution of both these issues.

Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1159-60 (9th Cir. 2007) (internal citations omitted) (emphasis added).

The “server test” is simple. The website server that actually sends out the infringing ones-and-zeroes is the one that directly violates the public display right, number (5) in Section 106. Another website that merely links to the infringing content does not directly violate the public display right—it can indirectly violate that right, therefore making it a contributory or vicarious infringer, but it doesn’t directly infringe that right.

It’s important to note that the “server test” argument is not over whether a linking website can be an infringer. It can. The argument is over whether that website is a direct or an indirect infringer. The “server test” says that, at worst, a website that links to infringing material is a contributory or vicarious infringer—still subject to the full range of remedies provided by the Copyright Act, mind you. In a sense, the argument is over whether they’re the bank robber or the getaway driver—it’s difficult to see how it really matters since both are liable for the robbery.

The only difference I can think of (and I haven’t directly researched the point) is that of knowledge: Direct infringers are liable for infringement whether they know of it or not, since direct infringement is a strict liability tort. Contributory infringers, on the other hand, must have knowledge, either actual or implied, of the infringement before any liability attaches.

Given the DMCA safe harbors (that absolve a linking website of most liability so long as it doesn’t have actual or implied knowledge of the underlying infringement) and the Netcom line of cases (that absolve a linking website of liability absent volitional conduct on its part to cause the infringement), it’s hard to see how it really matters. Whether direct or indirect liability is at stake, a linking site is not going to be liable unless it knows of and by its action (or inaction) causes the infringement.

In Flava Works Inc. v. Gunter, the district court below rejected the “server test” argument for the public performance right, number (4) in Section 106:

We decline to apply Perfect 10 to this case. The Ninth Circuit’s decision is not binding on this court; moreover, it is highly fact-specific and distinguishable. Defendants assert that the cases involve “essentially the same technology.” Both cases may involve inline linking, but the processes are quite different. The relevant comparison is between the conduct of Google and the conduct of myVidster’s users, not between Google and myVidster. In response to a search query, Google’s image search engine uses an automated process to display search results through inline linking. In contrast, myVidster’s users do not employ any sort of automation to determine which videos they bookmark; rather, they personally select and submit videos for inline linking/embedding on myVidster. (And many of those hand-picked videos are infringing.) Google’s use of inline linking is neutral to the content of the images; that of myVidster’s users is not.

To the extent that Perfect 10 can be read to stand for the proposition that inline linking can never cause a display of images or videos that would give rise to a claim of direct copyright infringement, we respectfully disagree. In our view, a website’s servers need not actually store a copy of a work in order to “display” it. The fact that the majority of the videos displayed on myVidster reside on a third-party server does not mean that myVidster users are not causing a “display” to be made by bookmarking those videos. The display of a video on myVidster can be initiated by going to a myVidster URL and clicking “play”; that is the point of bookmarking videos on myVidster—a user can navigate to a collection of myVidster videos and does not have to go to each separate source site to view them.

Flava Works, Inc. v. Gunter, No. 10-cv-06517, 2011 WL 3876910, *3-4 (N.D. Ill. Sept. 1, 2011) (emphasis added).

On appeal, Judge Posner disagrees:

By listing plays and giving the name and address of the theaters where they are being performed, the New Yorker is not performing them. It is not “transmitting or communicating” them.

Is myVidster doing anything different? To call the provision of contact information transmission or communication and thus make myVidster a direct infringer would blur the distinction between direct and contributory infringement and by doing so make the provider of such information an infringer even if he didn’t know that the work to which he was directing a visitor to his website was copyrighted. Then he would have to search for a safe harbor in the Digital Millennium Copyright Act. myVidster doesn’t touch the data stream, which flows directly from one computer to another, neither being owned or operated by myVidster.

Flava Works, Inc. v. Gunter, No. 11-3190, 2012 WL 3124826, *7-8 (7th Cir. Aug. 2, 2012) (internal citations omitted) (emphasis added).

It’s subtle. Judge Posner doesn’t come right out and say that he’s adopting the “server test” for the public performance right in the Seventh Circuit. But the opinion makes clear that he thinks that holding myVidster liable as a direct infringer goes too far since that would mean holding it liable even if it had no knowledge of the underlying infringement and even though the ones-and-zeroes didn’t actually cross its server.

Thus, similar to the Ninth Circuit in Perfect 10, which found that linking to infringing images only creates indirect liability for infringement of the display right, number (5) in Section 106, the Seventh Circuit here found that myVidster, which links to infringing videos, could only be liable as an indirect infringer of the public performance right, number (4) in Section 106. In other words, both courts found that linking cannot give rise to direct liability for infringement.

Again, given the DMCA safe harbors and the Netcom line of cases, I’m not convinced that Judge Posner’s concern about strict liability is merited—it’s not like every linking site will be directly liable for every link it provides to infringing material. The safe harbors still protect it and there has to be volitional conduct on its part in providing the links. It’s clear though that Judge Posner thinks myVidster’s connection to the underlying infringement is too remote to hold it liable as a direct infringer because the ones-and-zeroes don’t cross its server.

Personally (and similar to the district court below), I think the “server test” elevates form over function, and the better view is that a link to an infringing video directly causes a public performance to occur when clicked—that is its very purpose. Whether or not the ones-and-zeroes cross the server providing the link misses the point: It’s a necessary link in the chain, without which, there would not be the particular infringement.

It will be interesting to see how other circuits address the issue when so confronted.

Follow me on Twitter: @devlinhartline

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Guest Post: Yes, Google, You Have To Delist Rogue Sites

April 02, 2012 · · 11 comments

Today’s guest post comes from Devlin Hartline, a J.D. candidate at Loyola University New Orleans College of Law with an expected graduation date of May, 2012. His primary interests are in copyright, internet, and constitutional law. He lives with his wife and two young sons in Metairie, Louisiana. You can follow him on Twitter: @devlinhartline.

Introduction

Apparently, Google thinks it should be above the law. It hasn’t explicitly said so, of course, but that’s my takeaway from its protest of the Stop Online Piracy Act (SOPA) and the PROTECT IP Act this past January. Specifically, Google thinks that it should be allowed to list rogue sites in its search results without any court having the power to order it to stop. Google’s position strikes me as self-contradictory. On the one hand it says that Congress is “trying to do the right thing by going after pirates and counterfeiters.” On the other hand it says that search engines shouldn’t “be forced to delete entire websites from their search results.” What Google glosses over is the fact that search engines like itself are part of the problem—search engines drive traffic to rogue sites by listing them in their search results. This is why courts already order search engines to delist rogue sites.

The day before the protests, Google provided a written statement to the Huffington Post announcing that it’d be joining the grumblers: “we oppose these bills because there are smart, targeted ways to shut down foreign rogue websites without asking American companies to censor the Internet.” Sure enough, the next day Google blacked-out the logo on its home page. When users clicked on the self-censored insignia, they were taken to an information page, “End Piracy, Not Liberty.” From there, a tab led to another page, “More about SOPA and PIPA,” where Google sketched out the reasons behind its opposition. Google’s three main gripes with the bills can be boiled down thusly: (1) it’s censorship, (2) it’ll hurt innovation, and (3) it’s futile. Noticeably absent from this explanation is any acknowledgement that search engines meaningfully contribute to online infringement.

I can’t help but feel cynical. The same Google that unilaterally delisted over 11 million websites from its search results because they were too “spammy and low-quality” thinks it’s wrong that a court should order it to delist even one single site that has been determined to be dedicated to infringement. The same Google that forfeited $500 million to the United States government after it got caught assisting foreign pharmacies in importing illegal drugs thinks it’s OK to assist foreign rogue sites in the commission of online piracy. If Google really thinks that preventing piracy is such a good thing, then why does it want to help rogue sites out by linking to them? As with many things, I think the answer is money—it costs real money to comply with a court order to delist a rogue site. The question is whether any of this should actually be Google’s problem. I think that clearly the answer is, “yes.”

“I Come From Cyberspace”

In his iconic “A Declaration of the Independence of Cyberspace,” Grateful Dead lyricist, EFF cofounder, and cyberlibertarian John Perry Barlow threw down the gauntlet on behalf of cyberspace:

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather. . . . I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you possess any methods of enforcement we have true reason to fear. . . . Cyberspace does not lie within your borders. . . . Ours is a world that is both everywhere and nowhere, but it is not where bodies live.

Barlow’s quaint and utopian, if not anarchic, vision of cyberspace as existing somewhere untouchable by the “Governments of the Industrial World” never was. Nor would it ever come to be. In fact, in an ironic twist of fate, the “would-be Cyber-Jefferson” Barlow delivered his Declaration on the same day that President Clinton signed the internet-regulating Communications Decency Act into law.1 While cyberspace as a metaphorical place does not lie within any actual borders (and what metaphor ever does?), the same cannot be said for the people that make cyberspace possible—the so-called intermediaries. According to Black’s Law Dictionary (9th ed. 2009), an “intermediary” is “a mediator or go-between; a third-party negotiator.” An intermediary, then, is just a middleman. Cyberspace may be “everywhere and nowhere,” but the intermediaries all dwell in this world of “flesh and steel,” anything but “independent of the tyrannies.”

For netizens, cyberspace’s intermediaries take on familiar forms such as internet service providers, payment processors, content hosts, search engines, and advertising networks. Use of intermediaries in mass communications is nothing new; yesterday’s switchboard is today’s network switch. Without intermediaries, mass communication platforms such as the internet wouldn’t exist. The internet, after all, is just a global network of interconnected intermediaries who host, transport, and organize our data. And given their “essential role in facilitating online communication, intermediaries often are capable of exercising authority over wrongdoers who are otherwise unreachable” for a variety of reasons.2 Instead of circumventing the middlemen, the digital revolution has simply replaced one set of intermediaries with another. The internet’s decentralized structure has, by design, engendered the proliferation of a new set of intermediaries.

There’s no doubt that intermediaries like Google make infringement on the internet possible, for without the intermediaries there’d be no internet to infringe on in the first place. The difficult question then is which intermediaries, if any, should be held responsible for the infringement they help make possible. Should a search engine like Google be liable for infringement that takes place on the rogue sites it links to in its search results?

Common Law Secondary Liability

Copyright infringement is a tort, or a civil wrong. The Copyright Act, in § 106, provides that “the owner of copyright . . . has the exclusive rights to do and to authorize” certain enumerated acts, including making copies, preparing derivative works, and distributing copies. § 501(a) of the Act provides that “[a]nyone who violates any of the exclusive rights of the copyright owner . . . is an infringer of the copyright.” Thus, only the copyright owner has the right, say, to make copies or to authorize the making of copies, and anyone else who does so is liable for infringement.

Direct copyright infringement occurs when someone, called the primary or direct infringer, is held liable for their own infringing acts. If I unlawfully make copies of your copyrighted work, I’m a primary infringer. Indirect copyright infringement, on the other hand, occurs when someone else, called the secondary or indirect infringer, is held liable as well. If someone else unlawfully authorizes me to make copies of your copyrighted work and I do so, I’m a primary infringer and the party that gave me authorization is a secondary infringer. Even though that other party didn’t personally make the copy (only I did), the law holds them responsible because they played a significant part in my unlawful copying.

The idea of placing liability on someone other than the primary infringer is what’s referred to as secondary liability in copyright law. It’s called other things too, like intermediary liability, indirect liability, third-party liability, or derivative liability. Whatever it’s called, the basic notion is the same: If someone else helps me to infringe, by, say, inciting or facilitating my infringement, then that someone else will be liable for my infringement since they helped to bring it about. The idea of holding responsible those who help others commit unlawful acts is not unique to copyright law. Perhaps more familiar are the similar concepts of accomplice or accessory liabilities in criminal law. If I help you plan a robbery or act as your lookout while you rob a bank, I’m liable because I helped you commit your crime. By making it unlawful to help others commit unlawful acts, we deter people from doing so.

The Copyright Act itself does not expressly provide for secondary liability for infringement. Nonetheless, the Supreme Court has noted that the “absence of such express language in the copyright statute does not preclude the imposition of liability for copyright infringements on certain parties who have not themselves engaged in the infringing activity.”3 Indeed, secondary liability concepts in copyright law have been developed over time through judge-made, common law. “Courts have long recognized . . . that one may be held liable for the infringing acts of another.”4 Two distinct branches of secondary liability have been developed: “vicarious liability (grounded in the tort concept of respondeat superior) and contributory infringement (founded on the tort concept of enterprise liability).”5

While it’s true that the Copyright Act doesn’t explicitly refer to secondary liability in so many words, § 106’s grant of the exclusive right “to authorize” in fact indicates Congress’s endorsement of court-developed contributory liability principles. The relevant House Report explains: “Use of the phrase ‘to authorize’ is intended to avoid any questions as to the liability of contributory infringers.”6 This comes as no surprise, since, as the Supreme Court noted over a century ago, contributory liability is a principle “recognized in every part of the law.”7 The Second Circuit’s formulation of contributory liability is oft-quoted: “one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.”8 Thus, liability for contributory infringement turns on two elements: (1) knowledge, and (2) inducement, causation, or material contribution. So where does Google’s search engine fall within this rubric?

Google’s Secondary Liability

Conveniently enough, the Ninth Circuit addressed this very point at length in Perfect 10 v. Amazon.com.9 There, plaintiff Perfect 10 argued that defendant Google was secondarily liable for infringement occurring on third-party websites because Google provided links to these sites in its search results. The circuit court started its analysis by noting that contributory liability is examined in light of the “rules of fault-based liability derived from the common law,” a principle of which is that intent may be imputed: “Tort law ordinarily imputes to an actor the intention to cause the natural and probable consequences of his conduct.”10 Thus, since its intent to encourage direct infringement may be imputed, an actor (like Google) may be liable for contributory infringement if it knowingly takes actions (like linking) that are substantially certain to result in direct infringement by others.

The court of appeals then looked to two cases, Napster11 and Netcom,12 for the application of these principles in cyberspace. In Napster, the Ninth Circuit stated that “if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement.”13 Similarly, the district court in Netcom held that if an internet service provider knows or has reason to know that material on its system is infringing and fails to remove it, then it is liable for contributory infringement since its failure constitutes substantial participation in the resulting infringement.14 Both cases stand for the proposition that a “service provider’s knowing failure to prevent infringing actions” can be the “basis for imposing contributory liability” since intent to cause the natural result of its conduct may be imputed.15

The Ninth Circuit noted that a central theme of Napster and Netcom is the fact that online services have the ability to drastically amplify the effects of infringing activities. As the Supreme Court noted in Grokster,16 when a service enables individuals to commit infringement on a large scale, the argument for imposing indirect liability on that service is particularly powerful. The court of appeals observed that when a service is used widely to infringe, it is simply not possible for a copyright owner to enforce its rights against all of the direct infringers. Sometimes “the only practical alternative” is “to go against the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringement.”17 Accordingly, the circuit court held that “a computer system operator can be held contributorily liable if it has actual knowledge that specific infringing material is available using its system and can take simple measures to prevent further damage to copyrighted works yet continues to provide access to infringing works.”18

The Ninth Circuit then turned its sights on Google: “There is no dispute that Google substantially assists websites to distribute their infringing copies to a worldwide market and assists a worldwide audience of users to access infringing materials.”19 Thus, the court of appeals held that Google could be liable as a contributory infringer if it: (1) knew that infringing materials were available using its search engine, (2) could take simple measures to remove the links, and (3) failed to do so.

The Ninth Circuit’s opinion comports with the DMCA safe harbor provisions. Under § 512(d) of the Copyright Act, a search engine such as Google is significantly shielded from liability for infringement that occurs via links it provides so long as the links are quickly removed or disabled when the search engine becomes aware that they lead to infringing material or activity. Thus, the DMCA seeks to encourage the delisting of rogue sites from search results by giving search engines safe harbor if they remove links when presented with proper takedown notices (which are deemed as a matter of law to impart knowledge of infringement). This embodies Congress’s judgment that it’s generally a bad thing for search engines to provide links to rogue sites. According to both Congress and the courts, search engines that knowingly link to rogue sites are opening themselves up to secondary liability for the infringement they help bring about. And given that “Google is ranked #1 in the world” according to Alexa’s traffic rankings, its contribution to the problem of online infringement is all the more impossible to deny.

Censorship, Innovation, And Futility

When the argument is properly framed as whether Google should be allowed to substantially assist worldwide infringement via its search engine, its counterarguments about censorship, innovation, and futility fall apart. Google complains that “search engines could be forced to delete entire websites from their search results.” There’s no doubt that under some broad definition of the word, a court ordering Google to delist a rogue site is censorship. But so what? All law enforcement efforts are censorship on some level. The whole point is to censor—that is, to stop—the party that’s unjustifiably causing harm. Google can be forced to “delete entire websites” from its search results because those links are significantly contributing to whatever infringing material or activity they point to. What’s being censored is Google’s excessive role in the problem of online piracy. If Google really thinks that pursuing piracy is a lofty goal, you’d think it’d want to remove its own links to these rogue sites.

Google’s complaint about innovation is equally vapid. It starts with the curious assertion that “internet companies would have to monitor everything users link to or upload or face the risk of time-consuming litigation.” This is simply not so. It is fundamental to secondary liability doctrine that intermediaries “do not take on an affirmative duty to act or to prevent tortious or illegal conduct, but only a duty not to facilitate known wrongdoing.”20 Google has no duty to monitor the links it provides in its search results, and nothing in the Stop Online Piracy Act or the PROTECT IP Act would establish such a duty—in fact both bills explicitly say there’s no affirmative duty to monitor. Google also points to letters from internet companies, venture capitalists, and entrepreneurs making vague arguments about how the bills would stifle innovation generally. But innovators like Google are not exempt from the law, and it’s hard to see how complying with court orders is unduly burdensome for a company like Google that already has such mechanisms in place. Google’s service creates a harm to innocent third parties that is significant enough to warrant holding it responsible for that harm. It’s disingenuous for Google to complain about the cost of eliminating a harm that Google itself is creating.

Google’s final argument is that “SOPA and PIPA won’t even work” since rogue sites will just relocate. Instead, it argues that “Congress should consider alternatives like the OPEN Act” that take a follow-the-money approach. This argument is clearly self-serving. All of the bills (SOPA, PROTECT IP Act, and OPEN Act) target the money supplies of rogue sites. If targeting the money supply is by itself effective, then why does adding the requirement that search engines also delist rogue sites suddenly make the whole thing not work? That makes no sense. Google’s support of the OPEN Act is better explained by the fact that the Act contains no provisions dictating that search engines must delist rogue sites. In other words, the OPEN Act doesn’t make Google responsible for the harm that it chooses to create (and, I assume, to profit from). How very convenient. Google’s complaint here is not about the futility of the bills—it’s about Google’s bottom line. And that’s what all of this hoopla has been about all along, if you ask me.

Follow me on Twitter: @devlinhartline

Footnotes

  1. Alex Kozinski & Josh Goldfoot, A Declaration of the Dependence of Cyberspace, 32 Colum. J.L. & Arts 365 (2009). [↩]
  2. David S. Ardia, Free Speech Savior or Shield for Scoundrels: An Empirical Study of Intermediary Immunity Under Section 230 of the Communications Decency Act, 43 Loy. L.A. L. Rev. 373, 378-79 (2010). [↩]
  3. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 434 (1984). [↩]
  4. Demetriades v. Kaufmann, 690 F.Supp. 289, 292 (S.D.N.Y. 1988). [↩]
  5. Id. (internal quotation marks omitted). [↩]
  6. H.R. Rep. No. 94-1478 at 61; the House Report also endorses common law vicarious infringement, id. at 159-60 (“a person who violates any of the exclusive rights of the copyright owner is an infringer, including persons who can be considered related or vicarious infringers. . . . The committee has decided that no justification exists for changing the existing law . . . .”). [↩]
  7. Kalem Co. v. Harper Bros., 222 U.S. 55, 63 (1911). [↩]
  8. Gershwin Pub. Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971). [↩]
  9. Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007). [↩]
  10. Id. at 1171 (internal quotations and citations omitted). [↩]
  11. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). [↩]
  12. Religious Tech. Ctr. v. Netcom On-Line Commc’n Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995). [↩]
  13. Perfect 10, 508 F.3d at 1171 (internal quotations omitted). [↩]
  14. Id. at 1171-72. [↩]
  15. Id. at 1172. [↩]
  16. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005). [↩]
  17. Perfect 10, 508 F.3d at 1172. [↩]
  18. Id. (internal quotations and citations omitted). [↩]
  19. Id. [↩]
  20. David S. Ardia, Free Speech Savior or Shield for Scoundrels: An Empirical Study of Intermediary Immunity Under Section 230 of the Communications Decency Act, 43 Loy. L.A. L. Rev. 373, 505 (2010). [↩]
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Guest Post: From Eldred To Golan: The “Traditional Contours” Test – Part II

February 08, 2012 · · 19 comments

Golan I & II

A year after the Court decided Eldred, another district court, in what would turn out to be the first step in a protracted journey back to the Supreme Court, was asked to apply the “traditional contours” test. In Golan v. Ashcroft,1 plaintiffs (Lessig’s clients) included artisans and businesses that published and performed works that were in the public domain. They sought declaratory and injunctive relief, maintaining that § 514 of the Uruguay Round Agreements Act (URAA)2 was unconstitutional. The statute restored copyright protection to foreign works whose authors had lost their copyrights due to failure to comply with certain formalities that had since been repealed. Plaintiffs argued that § 514 of the URAA altered copyright’s “traditional contours” and violated their First Amendment rights because they could no longer use certain works that had been pulled out of the public domain. The court held that plaintiffs had sufficiently distinguished the holding in Eldred so as to survive defendants’ motion to dismiss.

Plaintiffs’ victory was short-lived, though, and in a lengthy opinion the district court granted defendants’ motion for summary judgment. The court reasoned that “Congress has historically demonstrated little compunction about removing copyrightable materials from the public domain.”3 The record reflected that there were in fact many historical instances where public domain works had been granted copyright. Because of the idea/expression dichotomy, the court noted, only expressions were being restored to their authors—the ideas themselves were still public property. Considering the long string of practice for granting copyright protection to works in the public domain, the court rejected plaintiffs’ contention that copyright’s “traditional contours” had in fact been altered by doing the same thing here. The court, citing “the settled rule that private censorship via copyright enforcement does not implicate First Amendment concerns,”4 similarly rebuffed plaintiffs’ argument that having to contract for use of restored works posed too onerous a burden on their free speech rights. In the court’s opinion, while plaintiffs surely bore some free speech hardship because of § 514 of the URAA, such difficulties were an inherent feature of copyright law in general and therefore not actionable.

On appeal to the Tenth Circuit,5 plaintiffs’ luck changed. The court of appeals, after observing that the Supreme Court had not defined the “traditional contours” in Eldred, nonetheless definitively stated that “one of these traditional contours is the principle that once a work enters the public domain, no individual—not even the creator—may copyright it.”6 Moreover, the court reasoned that plaintiffs had cognizable and vested First Amendment interests in public domain works. Central to the Tenth Circuit’s analysis was the understanding that copyright’s “traditional contours” must include more than just the built-in free speech accommodations, i.e., the idea/expression dichotomy and the fair use defense. The court concluded “that the traditional contours of copyright protection include the principle that works in the public domain remain there” and that § 514 of the URAA had transgressed that “critical boundary.”7 Furthermore, the circuit court disagreed with the district court’s contention that there was a tradition of removing works from the public domain, and it characterized whatever history of the practice that did exist as the exception and not the rule. The Tenth Circuit remanded the case to the district court with instructions to subject § 514 of the URAA to heightened First Amendment scrutiny, as commanded by the “traditional contours” test.

On cross-motions for summary judgment, the district court began its analysis with the observation that § 514 of the URAA was a content-neutral regulation of speech because it could “be justified without reference to the content of the speech restricted.”8 Under the applicable standard of heightened scrutiny (here, intermediate scrutiny), the statute would be upheld only if it advanced an important governmental interest and did “not burden substantially more speech than necessary to further” that interest.9 After careful analysis, the district court granted plaintiffs’ motion for summary judgment, concluding that while the government’s interests were sufficiently important, Congress nevertheless had burdened substantially more speech than was necessary in advancing those interests. The court limited its holding to only those parties that had already been exploiting the works while they were in the public domain—the so-called reliance parties. In the court’s view, those were the only parties with vested First Amendment rights that had been contravened when copyrights were restored in the works.

The parties cross-appealed to the Tenth Circuit.10 Plaintiffs argued that § 514 of the URAA should be struck down as unconstitutional on its face, meaning that it should be found to be unconstitutional not only for the reliance parties but for everyone else as well. The defendants of course disagreed, arguing that the statute was constitutional not only as-applied to the reliance parties but for everyone in general too. On this appeal, the “traditional contours” test was not in issue—the previous circuit panel had definitively applied the test and found that the statute failed it. Under the law of the case doctrine, this circuit panel was bound to follow the prior panel’s conclusion on that point. Recall that failure to satisfy the “traditional contours” test simply means that heightened First Amendment scrutiny will be applied to the statute, so the battle on this appeal was over whether § 514 of the URAA was violative of the First Amendment under this more-stringent standard of review.

The circuit court started its de novo review by agreeing with the district court that § 514 of the URAA was a content-neutral regulation of speech, thereby calling for intermediate scrutiny. In looking at the first prong, which requires the government to assert an important or substantial interest, the court had “no difficulty in concluding that the government’s interest in securing protections abroad for American copyright holders satisfies this standard.”11 The government had introduced sufficient evidence to show that by granting copyright protection to foreign works in the public domain in the United States, foreign countries would reciprocate by granting copyright protection to American works that were in the public domain abroad. Turning to the second prong, which requires that the regulation not burden substantially more speech than is necessary to further the interest asserted, the circuit court reached the opposite conclusion than the district court. In doing so, the court of appeals found that the burdens inflicted by § 514 of the URAA on the reliance parties were congruent to the benefits afforded to American copyright holders since their works overseas would receive equal protections. The Tenth Circuit sided with defendants and reversed the district court below, holding that § 514 of the URAA was not unconstitutional under heightened scrutiny.

So to summarize: (1) the district court held that § 514 of the URAA didn’t alter copyright’s “traditional contours,” (2) the court of appeals reversed and held that it did, (3) the district court held that § 514 of the URAA didn’t pass heightened scrutiny, and (4) the court of appeals reversed and held that it did. A bit confusing, I know.

The “Traditional Contours” Test Defined

Plaintiffs petitioned for and the Supreme Court granted certiorari. In Golan v. Holder,12 the Court affirmed the Tenth Circuit below, starting with the observation that “some restriction on expression is the inherent and intended effect of every grant of copyright.”13 Despite the intrinsic conflict between the Copyright Clause and the First Amendment, said the Court, in the Framers’ view the two served the same goal of contributing to the marketplace of ideas. The Court then explained that the reference to the “traditional contours” in Eldred referred to only the idea/expression dichotomy and the fair use defense, i.e., the free speech accommodations that are built-in to copyright law. And with that simple explanation, an almost decade-long confusion about what constitutes copyright’s “traditional contours” was laid to rest. The “traditional contours” test, then, may be stated as follows: If Congress did not alter the idea/expression dichotomy or the fair use defense when crafting a copyright statute, then a reviewing court faced with a First Amendment challenge to that statute does not apply heightened judicial scrutiny.

That the Tenth Circuit the first time around had completely misunderstood the “traditional contours” test was made explicit in a footnote: “On the initial appeal in this case, the Tenth Circuit gave an unconfined reading to our reference in Eldred to ‘traditional contours of copyright.’ That reading was incorrect, as we here clarify.”14 The Court continued its analysis by stating that here, as in Eldred, there was simply no call for the heightened review that petitioners were seeking. In the Court’s view (and understanding this point is critical to understanding Golan), burdening people’s communication of an author’s protected expression simply didn’t raise the same free speech concerns that are present when the government burdens people’s communication of facts or ideas. The Court reasoned, rather simply, that since the traditional safeguards of the idea/expression dichotomy and the fair use defense had been left in place in drafting § 514 of the URAA, petitioners’ free speech interests were adequately protected. No further mitigation was necessary since the constitutional minimum requirements had been met.

The Court then turned to the argument that petitioners in this case were distinguishable from those in Eldred because they had enjoyed vested First Amendment rights in certain public domain works. Rejecting the argument that “the Constitution renders the public domain largely untouchable by Congress,” the Court accused petitioners of attempting “to achieve under the banner of the First Amendment what they could not win under the Copyright Clause.”15 The Court could find no historical or congressional practice, nor anything in the Court’s own jurisprudence, that showed that heightened scrutiny was warranted for the practice of restoring copyright protection for works that were in the public domain. The Court positively rejected petitioners’ argument that they, as members of the public using public domain works, had vested First Amendment rights in those works: “Anyone has free access to the public domain, but no one, after the copyright term has expired, acquires ownership rights in the once-protected works.”16

And with that, the Supreme Court shut down once and for all Lessig’s thirteen-year-long argument that copyright laws must give special solicitude to the First Amendment above and beyond the idea/expression dichotomy and the fair use defense.

Closing Thoughts

Golan presents a great example of where simply labeling the Supreme Court’s holding as an affirmance of the court below misses the point. True, the Court affirmed the Tenth Circuit’s holding that § 514 of the URAA did not violate plaintiffs’ First Amendment rights. But the Court arrived at that destination by taking a completely different route. The better view is that, as far as the First Amendment issues are concerned, the Supreme Court in Golan completely denunciated all of the Tenth Circuit’s reasoning despite affirming its ultimate holding. The fact that the court of appeals got the right answer is entirely undercut by the fact that they were answering the wrong question.

I do want to point out as well that I think people are apt to take the holding in Golan too far. Consider the copyright statutes that we looked at—the CTEA, the CRA, and § 514 of the URAA. The CTEA extended the copyright term by twenty years for certain works. The CRA removed the renewal requirement, thus extending the copyright term for certain works. And § 514 of the URAA extended the copyright term to certain works in the public domain. See the pattern? I think the “traditional contours” test is applicable only when Congress has defined the scope of a substantive copyright right, that is, when it has “secur[ed] for limited Times to Authors . . . the exclusive Right to their . . . Writings” as the Copyright Clause expressly provides Congress may do. This is why I think Lessig goes too far when he laments that the Court has “shut the door, finally and firmly, on any opportunity to meaningfully challenge a copyright statute constitutionally.” Unless it’s a copyright law that defines the scope of the substantive right—like, say, the copyright term—I think the Court has left the door wide open for meaningful constitutional challenges. For example, I would argue that the Stop Online Piracy Act (SOPA) falls outside the “traditional contours” test since it concerns enforcement of substantive copyright rights and not the scope of the rights themselves. That means SOPA wouldn’t get a free ride when challenged on First Amendment grounds.

The holding in Golan certainly reinforces the concept that “copyright has traditionally been viewed as an exception to the First Amendment.”17 But it’s clearly not a complete exception. As I mentioned at the outset, Lessig’s notion that copyright must give way to free speech has been proved true with a vengeance—that’s exactly what the “traditional contours” test tells us. Copyright is an exception to the First Amendment, but only because it already incorporates two very important free speech safeguards. Alter either safeguard, and a copyright law’s free speech exception would have to be reexamined. Many people, no doubt, are dubious that these built-in safeguards adequately protect our free speech interests. Indeed, much has been written in the past few decades questioning precisely that. What the Court lays to rest in Golan, I think, is the dispute over whether these doubts are properly framed as constitutional issues or simply policy choices. One can reasonably believe that greater consideration for free speech is needed when it comes to copyright laws (in fact, I share that view), but what the Court has now made clear is that the First Amendment doesn’t demand it.

The last point I’ll make is that the Supreme Court is telling us in Golan that those focusing on the inherent conflict between copyright and free speech in framing their constitutional arguments are missing the forest for the trees. While the “immediate effect of our copyright law is to secure a fair return for an author’s creative labor,” the fundamental purpose of copyright is “to stimulate artistic creativity for the general public good.”18 Thus the view espoused by the Court is that copyright and free speech are not at odds with each other in a zero-sum game where a benefit to one implies a detriment to the other. The philosophy behind the Copyright Clause “is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors . . . .”19 In the Court’s view, in the Framers’ view, and in my view as well, the First Amendment and the Copyright Clause are complementary provisions promoting the same goal—the public good.

Follow me on Twitter: @devlinhartline

Footnotes

  1. Golan v. Ashcroft, 310 F.Supp.2d 1215 (D. Colo. 2004). [↩]
  2. Uruguay Round Agreements Act, Pub.L. 103-465. [↩]
  3. Golan v. Gonzales, 2005 WL 914754 (D. Colo. Apr. 20, 2005). [↩]
  4. Id., at *17. [↩]
  5. Golan v. Gonzales, 501 F.3d 1179 (10th Cir. 2007). [↩]
  6. Id., at 1184. [↩]
  7. Id., at 1189. [↩]
  8. Golan v. Holder, 611 F.Supp.2d 1165, 1170 (D. Colo. 2009). [↩]
  9. Id., at 1172. [↩]
  10. Golan v. Holder, 609 F.3d 1076 (10th Cir. 2010). [↩]
  11. Id., at 1084. [↩]
  12. Golan v. Holder, 2012 WL 125436 (U.S. Jan. 18, 2012). [↩]
  13. Id., at *13. [↩]
  14. Id., at fn. 29. [↩]
  15. Id., at *15. [↩]
  16. Id., at *16. [↩]
  17. Jennifer E. Rothman, Liberating Copyright: Thinking Beyond Free Speech, 95 Cornell L. Rev. 463, 479 (2010). [↩]
  18. Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975). [↩]
  19. Mazer v. Stein, 347 U.S. 201, 219 (1954). [↩]
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Guest Post: From Eldred To Golan: The “Traditional Contours” Test – Part I

February 06, 2012 · · 29 comments

Today’s guest post comes from Devlin Hartline, a J.D. candidate at Loyola University New Orleans College of Law with an expected graduation date of May, 2012. His primary interests are in copyright, internet, and constitutional law. He lives with his wife and two young sons in Metairie, Louisiana. You can follow him on Twitter: @devlinhartline.

“Constitution time is over.”

For academic and self-proclaimed “copyright activist” Lawrence Lessig, January 18, 2012, represents more than just the day the internet stood up to copyright law. In his view, it’s also the day “the Supreme Court shut the door, finally and firmly, on any opportunity to meaningfully challenge a copyright statute constitutionally.” For it was on that day that the Supreme Court handed down its decision in Golan v. Holder,1 or as Lessig puts it, it’s the day the Court signaled to the copyright bar: “Constitution time is over.” Lessig’s defeatist attitude is understandable. He had spent the past thirteen years representing four different plaintiffs challenging various copyright laws on constitutional grounds. Two of the cases were even heard by the Supreme Court; all four cases ended in resounding defeat for Lessig’s various constitutional arguments.2 Upset with Congress’s treatment of copyright, it’s not surprising that Lessig would turn to the courts. To get a court to strike down a copyright statute, he had to constitutionalize the issue—courts simply aren’t in the business of second-guessing legislative choices unless those choices violate the Constitution. The problem for Lessig, though, was that the Constitution itself provides few limits on Congress’s power to create copyright laws. But “few limits” does not mean “no limits.”

One of Lessig’s major arguments was that a copyright law must give way to First Amendment concerns, and it’s that particular notion that I’ll focus on in this article. While Lessig may have been defeated on this argument in that he didn’t like where the Court ultimately drew the line between copyright and free speech, as we’ll see, he was certainly vindicated in that the Court definitively recognized that copyright must in fact significantly give way to free speech interests. One culmination of Lessig’s thirteen-year-long legal battle against copyright law in the federal courts is that the Supreme Court has given us a test to use in determining whether a copyright statute has run afoul of free speech—the “traditional contours” test. And contrary to Lessig’s complaint that this test forecloses meaningful First Amendment challenges to copyright, the test instead, I think, reasonably reflects the fact that free speech and copyright promote the same public good. This sentiment is reflected in something the Court said over two decades ago: “it should not be forgotten that the Framers intended copyright itself to be the engine of free expression. By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas.”3

There is no doubt that copyright, in some sense, burdens free speech. The First Amendment commands that “Congress shall make no law . . . abridging the freedom of speech.” At the same time, however, the Copyright Clause allows Congress to “secur[e] for limited Times to Authors . . . the exclusive Right to their . . . Writings.” But by creating a law that secures to an author a copyright in his work, Congress has inevitably created a law that abridges free speech. Copyright, just like any other type of personal property, provides its holder with the “right to exclude others from using his property.”4 It follows then that a copyright law burdens free speech since others are not free to speak that which a copyright protects. But, under the Constitution, how much can copyright burden free speech, exactly? Thanks to Lessig’s efforts, we now have the “traditional contours” test that answers just that question.

An Amorphous Test

In Eldred v. Ashcroft,5 the Supreme Court squarely addressed a First Amendment challenge to the Copyright Term Extension Act (CTEA).6 Lessig himself participated in the oral arguments before the Court. The CTEA provided for an additional twenty years of copyright protection for most works, even those that were currently under copyright. Petitioners (Lessig’s clients) included individuals and businesses who depended on works that had fallen into the public domain for their products or services. Petitioners argued that, but for the CTEA, they would have been able to exploit works that otherwise would be in the public domain. Therefore, by extending the copyright term for these works, Congress had impermissibly abridged petitioners’ free speech rights. In light of this perceived conflict, petitioners asked the Supreme Court to find the CTEA unconstitutional under heightened First Amendment judicial scrutiny. Heightened scrutiny simply refers to how important the legislature’s ends must be, and how well those ends must fit with the means chosen to accomplish them. The greater the scrutiny, the more likely it is that a statute will be struck down as unconstitutional. So the party challenging a statute almost always argues for greater scrutiny, while the defending party, naturally, argues the opposite.

The Court declined the invitation to apply heightened scrutiny, instead agreeing with respondents that none was needed. Said the Court: “The Copyright Clause and First Amendment were adopted close in time. This proximity indicates that, in the Framers’ view, copyright’s limited monopolies are compatible with free speech principles. Indeed, copyright’s purpose is to promote the creation and publication of free expression.”7 In the Court’s view, imposition of heightened judicial scrutiny was not necessary because copyright law already contains two built-in First Amendment accommodations. The first, known as the idea/expression dichotomy,8 “distinguishes between ideas and expression and makes only the latter eligible for copyright protection.”9 The second, known as the fair use defense,10 “allows the public to use not only facts and ideas contained in a copyrighted work, but also expression itself in certain circumstances.”11 According to the Court, these built-in accommodations strike a good balance between copyright and free speech since they allow for the free flow of ideas while providing only partial protection for an author’s particular expression.

The Court explained further that the “First Amendment securely protects the freedom to make—or decline to make—one’s own speech; it bears less heavily when speakers assert the right to make other people’s speeches.”12 Petitioners’ asserted right to speak other people’s copyrighted works did raise First Amendment concerns, said the Court, but these concerns were adequately addressed by copyright’s built-in free speech protections. And then, in what can be described as an afterthought, the Supreme Court announced the “traditional contours” test: “But when, as in this case, Congress has not altered the traditional contours of copyright protection, further First Amendment scrutiny is unnecessary.”13 The “traditional contours” test, then, is a simple conditional statement: If Congress did not alter copyright’s “traditional contours” when crafting a copyright statute, then a reviewing court faced with a First Amendment challenge to that statute does not apply heightened judicial scrutiny. In other words, a court will not have to look at how important the ends are, or how closely those ends fit the means chosen to accomplish them, so long as copyright’s “traditional contours” have not been altered in creating the statute. Lower courts sorely needed a test like this to apply when faced with a free speech challenge to a copyright statute. The problem, unfortunately, was that no one knew what these “traditional contours” were because the Court didn’t really say. How could courts apply the test if they didn’t even know when the test applied? And what exactly is (or isn’t) included within these “traditional contours”?

Kahle Tests The Waters

The year after the Supreme Court opinion in Eldred was handed down, a district court in California attempted to apply the newly-minted “traditional contours” test. In Kahle v. Ashcroft,14 plaintiffs (Lessig’s clients), including the Internet Archive, were in the business of taking works that had fallen into the public domain and posting them on the Internet. They brought suit challenging the constitutionality of the Copyright Renewal Act (CRA)15 and the CTEA on First Amendment grounds. The CRA removed the renewal requirement for works created between 1964 and 1977, and it provided that the copyrights for these works would be automatically renewed for a second term. Before the CRA, these works would have only received a second term if their owners had filed for a renewal. Now, they went full-term without the owners doing anything. The CTEA, as we just saw in Eldred, added an additional twenty years of copyright protection to these now automatically-renewing works. Plaintiffs argued that, but for the CRA and the CTEA, the vast majority of the works created between 1964 and 1977 would have fallen into the public domain on January 1, 2004. Rather than a conditional copyright regime that required authors to take affirmative steps to extend the copyright term for their works, the challenged statutes created an unconditional copyright regime where copyright protections were extended automatically. This transition from a conditional to an unconditional system—in effect, from one that was “opt in” to one that was “opt out”—argued plaintiffs, altered copyright’s “traditional contours,” thereby necessitating heightened judicial scrutiny under the “traditional contours” test.

The intuitiveness of this argument is undeniable: Whereas a copyright owner once had to renew his registration to get a second term, now he had to do nothing to obtain the same result (plus an additional 20 years of protection). For parties, like plaintiffs, waiting for these works to fall into the public domain so they could use them, this change was understandably seen as an alteration of copyright’s “traditional contours.” The district court didn’t agree, and it started its analysis with the observation that the Supreme Court hadn’t actually identified the protections it considered to be within copyright’s “traditional contours.” In fact, the court noted, the phrase “traditional contours” did not appear in any other reported decision prior to its use in Eldred. The court deduced that the two concepts recognized by the Court, namely the idea/expression dichotomy and the fair use defense, related only to the scope of copyright protection. Contrasting that with the procedural steps now being challenged, the court reasoned that removing the renewal requirement did not alter the scope of the copyright protection or the copyright holder’s substantive rights. As such, the court held that the challenged statutes did not alter copyright’s “traditional contours.” For the district court, the “traditional contours” simply were not affected by changes in copyright procedures, like removing the renewal requirement.

On appeal to the Ninth Circuit,16 plaintiffs fared no better. The circuit court accepted plaintiffs’ argument that abolishing the renewal requirement would increase the copyright term for the works in question while correspondingly decreasing the number of works entering the public domain. Nonetheless, the court of appeals found that automatically renewing a copyright’s registration was qualitatively no different than extending a copyright’s term, and the Supreme Court’s holding in Eldred had in effect already answered plaintiffs’ challenge: If extending copyrights for existing works was constitutional there, then automatically renewing and thus extending copyrights for existing works was also constitutional here. So long as “traditional First Amendment safeguards such as fair use and the idea/expression dichotomy” vindicate the plaintiffs’ affected free speech interests, said the court, “extending existing copyrights . . . does not alter the traditional contours of copyright protection.”17 So for the Ninth Circuit, automatically renewing a copyright was no different than extending a copyright’s term, and plaintiffs’ clever framing of the issue fell flat. While the Supreme Court in Eldred did not define what it meant by copyright’s “traditional contours,” the Court’s decision did make clear that extending a copyright’s term leaves the “traditional contours” intact—that was the exact issue in Eldred. And once the circuit court framed the issue as one of simply extending a copyright’s term, plaintiffs’ game was over under the Court’s prior holding. Plaintiffs appealed to the Supreme Court, but the petition for certiorari was denied.18

Coming up in Part II: Golan I & II, The “Traditional Contours” Test Defined, and Closing Thoughts.

Footnotes

  1. Golan v. Holder, 10-545, 2012 WL 125436 (U.S. Jan. 18, 2012). [↩]
  2. See Eldred v. Ashcroft, 537 U.S. 186 (2003); Luck’s Music Library, Inc. v. Gonzales, 407 F.3d 1262 (D.C. Cir. 2005); Kahle v. Gonzales, 487 F.3d 697 (9th Cir. 2007), cert. denied, 128 S.Ct. 958 (2008); Golan v. Holder, 10-545, 2012 WL 125436 (U.S. Jan. 18, 2012). [↩]
  3. Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 558 (1985). [↩]
  4. Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932); see also Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 454 F.Supp.2d 966, 997 (C.D. Cal. 2006) (“The right to exclude is inherent in the grant of a copyright . . . .”). [↩]
  5. Eldred v. Ashcroft, 537 U.S. 186 (2003). [↩]
  6. Copyright Term Extension Act of 1998, Pub.L. 105–298 (amending, inter alia, 17 U.S.C. §§ 302, 304). [↩]
  7. Eldred, 537 U.S. at 219. [↩]
  8. The idea/expression dichotomy is codified in 17 U.S.C. § 201(b) (“In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.”). [↩]
  9. Eldred, 537 U.S. at 219. [↩]
  10. The fair use defense is codified in 17 U.S.C. § 107 (“Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright…”). [↩]
  11. Eldred, 537 U.S. at 219. [↩]
  12. Id., at 221. [↩]
  13. Id. [↩]
  14. Kahle v. Ashcroft, 2004 WL 2663157 (N.D. Cal. Nov. 19, 2004). [↩]
  15. Copyright Renewal Act of 1992, Pub.L. 102-307. [↩]
  16. Kahle v. Gonzales, 487 F.3d 697 (9th Cir. 2007). [↩]
  17. Id., at 700 (internal quotation marks omitted). [↩]
  18. Kahle v. Gonzales, 128 S.Ct. 958 (2008) (denying cert.). [↩]
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