The Ninth Circuit’s en banc decision in Garcia v. Google was hugely popular when it came out several weeks ago, though talk about it has quickly died down. 1No. 12-57302, May 18, 2015. Despite that, part of the court’s discussion is troubling and worth note.

To recount the facts quickly, actress Cindy Lee Garcia performed a cameo in what she thought was an “action-adventure thriller set in ancient Arabia.” The film ended up being an offensive anti-Islam film Innocence of Muslims. Garcia appeared for five seconds with a dubbed-over voice asking, “Is your Mohammed a child molester?” A 14 minute version of the film was uploaded to YouTube, causing widespread outrage in the Middle East. A fatwa was issued by an Egyptian cleric against all participants in the film, and Garcia received “multiple death threats” because of her appearance. 2See Cindy Lee Garcia’s declaration for a detailed account of many of these threats.

Garcia took legal action through a number of avenues. On November 30, 2012, a federal district court denied a preliminary injunction based on a copyright claim. A Ninth Circuit panel reversed this decision in 2014 and granted the injunction, causing widespread outrage on the internet. 3766 F.3d 929 (9th Cir. 2014). On May 18th, however, an en banc court dissolved the panel’s injunction and affirmed the district court’s decision.

The En Banc Decision

When deciding whether to grant a preliminary injunction, a court considers four factors: (1) the likelihood a plaintiff will succeed on the merits of her claim, (2) the likelihood a plaintiff will suffer irreparable harm absent an injunction, (3) the balance of hardships between the two parties, and (4) the public interest.

The Ninth Circuit held that the district court did not abuse its discretion in denying the injunction for two reasons. First, it concluded that Garcia was unlikely to succeed on the merits, saying “neither the Copyright Act nor the Copyright Office’s interpretation supports Garcia’s claim.” And second, it held that “Garcia failed to muster a clear showing of irreparable harm.” Because of these two conclusions, the court found it unnecessary to consider the final two factors.

I think the Ninth Circuit reached the correct result on the merits in holding that Garcia did not have an independent copyrightable interest in her five second performance—and there are doctrines the court didn’t look at, such as the de minimis doctrine, that may have separately provided grounds for such a result. However, its discussion regarding irreparable harm does not rest on as solid legal grounds. It’s easy to gloss over the discussion of irreparable harm if one is thinking about it in terms of Garcia’s weak claim. But when one realizes it applies across the board to all copyright owners, then the concern becomes apparent.

The Ninth Circuit starts its discussion of irreparable harm by asserting that “there is a mismatch between [Garcia’s] substantive copyright claim and the dangers she hopes to remedy through an injunction.” That is, says the court, because Garcia is seeking an injunction under copyright law, her “harm must stem from copyright—namely, harm to her legal interests as an author.” The Ninth Circuit cites to the Second Circuit’s remark in Salinger v. Colting that “The relevant harm is the harm that … occurs to the parties’ legal interests” 4607 F.3d 68, 81 & n.9 (2d Cir. 2010). in support.

It then turns immediately to the Constitution, asserting that the “purpose of copyright underscores the disjunction Garcia’s case presents.” The Ninth Circuit finds copyright’s purpose is explicitly commercial and not to “protect secrecy.”

Having defined copyright’s purpose in such a way, the court then describes the harms Garcia is seeking to prevent as “damage to her reputation, unfair[,] forced promotion of a hateful Film, and death.” However, it says, these “harms are untethered from—and incompatible with—copyright and copyright’s function as the engine of expression.”

For example, the court finds “privacy is not a function of the copyright law” because the goal of copyright is “to encourage public access to the creative work of the author.” Similarly, emotional distress damages are unavailable under the Copyright Act “because such damages are unrelated to the value and marketability of their works.”

Finally, the court finds no refuge for Garcia in the “right to be forgotten” or “moral rights”, since it says neither are recognized in the United States. It ultimately concludes that “the gravamen of Garcia’s harm is untethered from her commercial interests as a performer, and instead focuses on the personal pain caused by her association with the film.”

The Legal Interests of an Author

The court gets so much incorrect in so little time. Perhaps it’s the case that the weakness of Garcia’s substantive claim casts a shade over the court’s discussion of irreparable harm. The problem is that this discussion is just as applicable to a meritorious copyright claim.

So what went wrong?

First, the court improperly narrows the interest at stake from the legal interest to the “legal interest as an author” (and, later, narrows this further to the commercial interest as a performer). There is no statutory basis for this interpretation. Copyright protection subsists in a work. 517 USC 102(a). It accords a set of exclusive rights in that work. 617 USC 106. Infringement occurs simply through violation of any of these exclusive rights. 717 USC 501. Nowhere does the Copyright Act qualify infringement or an author’s exclusive rights as the Ninth Circuit has.

Ironically, the very case the court cites in support provides a counterargument. After the Second Circuit says in Salinger that the relevant harm is the one that “occurs to the parties’ legal interests”, as the Ninth Circuit quotes, it goes on to say that “The plaintiff’s interest is, principally, a property interest in the copyrighted material.” An invasion of a property interest causes a legal harm. This is contrary to the Ninth Circuit’s suggestion here that only certain types of invasions cause legal harms which may give rise to irreparable harm, particularly only harms to commercial interests.

The Supreme Court has provided support for this interpretation a number of times over the decades. In eBay v. MercExchangewhich, though it involved an injunction for patent infringement, is just as applicable to copyright injunctions— 8The Ninth Circuit is among the Federal Circuit Courts of Appeal to explicitly hold so, see Perfect 10 Inc. v. Google Inc., 653 F. 3d 976, 980 (9th Cir. 2011). the Court said that “a copyright holder possesses ‘the right to exclude others from using his property.’” 9547 US 388, 392 (2006). It cautioned against adopting “expansive principles suggesting that injunctive relief could not issue in a broad swath of cases.” Of particular relevance here, it chastised the lower court’s conclusion that “’[a plaintiff’s] lack of commercial activity in practicing the patents’ would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue.”

As the Court said in Sony, “It is not the role of the courts to tell copyright holders the best way for them to exploit their copyrights.” 10Sony Corp v Universal City Studios, 464 US 417, 450 (1984). But it was most direct in Fox Film Corp. v. Doyal when it said, “The owner of the copyright, if he pleases, may refrain from vending or licensing and content himself with simply exercising the right to exclude others from using his property.” 11286 US 123, 127 (1932).

Elsewhere, the Ninth Circuit has said, “Even an author who had disavowed any intention to publish his work during his lifetime was entitled to protection of his copyright”. 12Worldwide Church of God v. Philadelphia Church of God, 227 F. 3d 1110, 1119 (9th Cir. 2000).

The legal interest in a copyright, based on the statutory text and Supreme Court precedent, is an interest in exercising exclusively the rights enumerated in the Copyright Act. It is not, as the Ninth Circuit suggests, limited to a narrow subset of invasions, such as those that only affect a copyright owner’s commercial interests. That’s not to say that there is a presumption of irreparable harm once a likelihood of infringement has been established; the Supreme Court cautioned against such “categorical rules” in eBay. 13547 US at 392. See also Salinger v. Colting, 607 F. 3d 68 at 82 (2nd Cir. 2010) (“After eBay, however, courts must not simply presume irreparable harm.”). But as the Second Circuit pointed out when applying eBay, “This is not to say that most copyright plaintiffs who have shown a likelihood of success on the merits would not be irreparably harmed absent preliminary injunctive relief. As an empirical matter, that may well be the case, and the historical tendency to issue preliminary injunctions readily in copyright cases may reflect just that.” 14607 F. 3d at 82.

Garcia, however, did not argue for a presumption of irreparable harm. She asserted a number of irreparable harms that were likely to result in the absence of an injunction. 15Ex parte application for a temporary restraining order and an order to show cause re preliminary injunction, and order of impoundment, No. CV 12-8315 (Oct. 17, 2012) (No. 12). These harms included the risk of death, that most irreparable of injuries.

Non-economic Interests

The Ninth Circuit marshals a number of points to support its conclusion that Garcia failed to show irreparable harm. First, the court’s discussion of the Constitutional purpose of copyright is both premature and misconceived.

Its emphasis on copyright’s role in encouraging “public access to the creative work of the author” and its ability to override a copyright owner’s legal interest leads to a logical contradiction. In a sense, the court is suggesting that copyright’s purpose is served by ignoring copyright. One must instead read the Copyright Clause conjunctively: Congress “promote[s] the progress of science and useful arts by securing… to authors… the exclusive right to their… writings.” Copyright’s purpose, in other words, is served when authors’ exclusive rights are secured.

The court then asserts that relief from the injuries Garcia seeks to avoid—”damage to her reputation, unfair[,] forced promotion of a hateful Film, and death”—”is not easily achieved under copyright law” because those harms are incompatible with “copyright’s function as the engine of free expression.”

This is an incomplete statement about the relationship between copyright and the First Amendment. The First Amendment protects not only the freedom to speak, but the freedom not to speak. 16Hurley v. Irish-American Gay, Lesbian, & Bisexual Group of Boston , 515 U.S. 557 (1995). at 573; see also, e.g., Pac. Gas & Elec. Co. v. Pub. Util. Comm’n of Cal., 475 U.S. 1 (1986) (plurality opinion). Courts—including the Supreme Court—have recognized this principle applies equally in copyright cases. The Court in Harper & Row said that “freedom of thought and expression ‘includes both the right to speak freely and the right to refrain from speaking at all.’” 17471 US 539, 559 (1985). Copyright, it said, serves this “First Amendment value.” Indeed, the Second Circuit observed in Salinger, which the Ninth Circuit quotes in its discussion, that “[t]he loss of First Amendment freedoms,” and hence infringement of the right not to speak, “for even minimal periods of time, unquestionably constitutes irreparable injury.” 18Salinger at 81. It would certainly be the case, then, that being threatened with death for words that one did not speak but that have been attributed to her would constitute irreparable injury.

The court is correct when it says that “authors cannot seek emotional distress damages under the Copyright Act.” But the case it cites is speaking about actual damages, not injunctive relief, so that statement is irrelevant here.

The court’s dismissal of a copyright owner’s privacy interests is similarly misguided. Copyright and privacy have long shared common ground. In 1849, a British court said, “That there is property in the ideas which pass in a man’s mind is consistent with all the authorities in English law. Incidental to that right is the right of deciding when and how they shall first be made known to the public. Privacy is a part, and an essential part, of this species of property.” 19Prince Albert v. Strange, 1 McN. & G. (1849). Warren and Brandeis’ seminal article, The Right to Privacy, also observe this kinship. There, the legal giants say, “[T]he legal doctrines relating to infractions of what is ordinarily termed the common-law right to intellectual and artistic property are, it is believed, but instances and applications of a general right to privacy.” 204 Harv. L. Rev. 193 (1890).

Right Results, Wrong Approach

To reiterate, establishing irreparable harm here does not necessarily mean Garcia should get an injunction. As noted above, the weak merits of the copyright claim weighs against an injunction. And though the Ninth Circuit did not look at the third factor, the balance of hardships or equities, that likely weighs against injunctive relief as well, given Google’s attenuated participation in the infringement.

So it is all the more unfortunate that the court expounded erroneously on irreparable harm. At its heart, copyright provides the author with the exclusive right to decide how, when, and where their expression is disseminated to the public (subject, of course, to exceptions and limitations like fair use). Any given author will have a range of equally valid interests motivating those decisions, both economic and non-economic. Courts should exercise caution in second guessing those motivations as the Ninth Circuit did here in its discussion on irreparable harm.

References   [ + ]

1. No. 12-57302, May 18, 2015.
2. See Cindy Lee Garcia’s declaration for a detailed account of many of these threats.
3. 766 F.3d 929 (9th Cir. 2014).
4. 607 F.3d 68, 81 & n.9 (2d Cir. 2010).
5. 17 USC 102(a).
6. 17 USC 106.
7. 17 USC 501.
8. The Ninth Circuit is among the Federal Circuit Courts of Appeal to explicitly hold so, see Perfect 10 Inc. v. Google Inc., 653 F. 3d 976, 980 (9th Cir. 2011).
9. 547 US 388, 392 (2006).
10. Sony Corp v Universal City Studios, 464 US 417, 450 (1984).
11. 286 US 123, 127 (1932).
12. Worldwide Church of God v. Philadelphia Church of God, 227 F. 3d 1110, 1119 (9th Cir. 2000).
13. 547 US at 392. See also Salinger v. Colting, 607 F. 3d 68 at 82 (2nd Cir. 2010) (“After eBay, however, courts must not simply presume irreparable harm.”).
14. 607 F. 3d at 82.
15. Ex parte application for a temporary restraining order and an order to show cause re preliminary injunction, and order of impoundment, No. CV 12-8315 (Oct. 17, 2012) (No. 12).
16. Hurley v. Irish-American Gay, Lesbian, & Bisexual Group of Boston , 515 U.S. 557 (1995). at 573; see also, e.g., Pac. Gas & Elec. Co. v. Pub. Util. Comm’n of Cal., 475 U.S. 1 (1986) (plurality opinion).
17. 471 US 539, 559 (1985).
18. Salinger at 81.
19. Prince Albert v. Strange, 1 McN. & G. (1849).
20. 4 Harv. L. Rev. 193 (1890).

Last fall, a federal judge in the Southern District Court of New York ruled that a news monitoring service’s copying of a news channel’s “broadcast content for indexing and clipping services to its subscribers constitutes fair use.” 1Fox News Network, LLC v. TVEyes, Inc., 43 F. Supp. 3d 379 (SDNY 2014); see also my post, Fox News v TVEyes: Fair Use Transformed. The service, TVEyes, copied wholesale every program broadcast by 1,400 channels (including plaintiff Fox News Network). It then created a searchable index of video clips and provided its clients—who pay $500 a month for the service—streaming and downloading access to that content, all without a license from the channels.

Fox News sued for copyright infringement. Currently, the court is considering whether other features offered by TVEyes also constitute fair use: saving, archiving, downloading, emailing, and sharing clips by subscribers, along with searching television clips by date and time rather then keyword or term. Fox is supported by an amicus brief from Bright House, CNN, CBS, NBC Universal, and News 12, while the EFF and the Technology Law & Policy Clinic at NYU School of Law have filed in support of TVEyes.

Though this litigation is recent, the issues involved here concerning fair use and news monitoring are not new. In fact, Congress looked at them in great detail over twenty years ago.

News monitoring and Section 107

Sen. Orrin Hatch introduced a bill October 1990 that would have amended the Copyright Act to provide that “fair use of a copyrighted work for purposes of monitoring news reporting programming is not an infringement of copyright.” 2S.3229, 101st Cong. (2nd Sess. 1990). The bill did not make it out of Committee.

During a 1991 hearing before the House IP Subcommittee, Robert Waggoner, Chairman of the Video Monitoring Services of America, testified on behalf of the International Association of Broadcast Monitors. 3Copyright Amendments Act of 1991 Hearings before the H. Subcomm. on Intellectual Property and Judicial Administration of the Comm. on the Judiciary on H.R. 2372, 101st Cong. (1991). Waggoner officially appeared in support of Title I of H.R. 2372, the bill being considered by the Subcommittee, but spoke primarily about fair use for broadcast monitoring services, an issue not on the agenda.

Waggoner positioned broadcast news monitoring services as advancing “a core First Amendment interest.”

They disseminate news to an interested public that would otherwise have no effective means of access to such information. They are the custodians of the public’s right to know what is being aired about them, and where.

However, Waggoner raised concerns over the Eleventh Circuit’s 1984 decision in Pacific Southern Co. v. Duncan, which rejected a broadcast news monitor’s fair use defense, primarily because the service was commercial in nature. 4744 F.2d 1490 (11th Cir. 1984), cert. denied, 471 U.S. 1004 (1985). He also cited with concern a number of lower courts that have followed Duncan. 5E.g., Cable News Network, Inc. v. Video Monitoring Services of America, Inc., Civ. No. 1:88-CV-2660-JOF (N.D. Ga. Jan. 9, 1990); NBC Subsidiary (KCNC-TV) v. Video Monitoring Services of America, Inc., Civ. No. 88-Z-234 (D. Colo. July 27, 1989); Georgia Television Co. v. TV News Clips of Atlanta, Inc., 9 U.S.P.Q. 2d (BNA) 2049 (N.D. Ga. 1989).

S. 1805

Senator Hatch introduced his news monitoring bill again a few months following this hearing. 6S. 1805, 102nd Cong. (1st Sess. 1991). Like the previous bill, it would amend §107 of Title 17 by inserting “or monitoring news reporting programming” after “news reporting”. This time, the bill was referred to the Senate Subcommittee on Patents, Copyrights and Trademarks, which held a hearing on the legislation June 16, 1992. 7News monitoring: Hearing before the S. Subcomm. on Patents, Copyrights, and Trademarks of the Committee on the Judiciary on S. 1805, a bill to amend Title 17, United States Code, to clarify news reporting monitoring as a fair use exception to the exclusive rights of a copyright owner, 102nd Cong. (1992), hereinafter “News monitoring hearing”.

The Senate Subcommittee heard from six witnesses, including Register of Copyrights Ralph Oman and noted copyright scholars David Nimmer (appearing on behalf of Turner Broadcasting System and the National Association of Broadcasters) and L. Ray Patterson (who had represented the news clipping service in Duncan). Arizona Senator and Subcommittee Chairman Dennis DeConcini began with a brief statement extolling the benefits of news monitoring services but skeptical that the bill was necessary:

We live in an age where the electronic media provide nonstop access to a constant flow of information and take us around the world as quickly as it takes us down the street. In a constant sea of electronic information, it’s difficult, if not impossible, to stay on top of all that the news has to offer. Therefore, I find these new monitoring services to be extremely valuable. However, I do not believe that the value of these services is the question before us today. To me the question is how these services go about getting access to the information that they monitor, package, and eventually sell.

The fair-use doctrine has evolved over years through the courts as a balancing test that I believe has served us well and one which I’m reluctant to amend in the absence of compelling evidence. I will listen with great interest to the justification for the legislation, and I’ll look for an answer as to why this conflict cannot be resolved in the marketplace.

Register Oman led off the witness slate by testifying that “the Copyright Office does not support enactment of S. 1805.” In the Office’s view, fair use and licensing arrangements would cover most current broadcast monitoring activities, the bill would not provide any additional certainty to providers, and in some cases it goes too far in departing from fair use precedent, particularly by providing commercial access beyond “hard news.” Said Oman, “Monitors would be free to reproduce segments of documentaries, of magazine format-type shows, and public affairs broadcasting.”

Oman also raised concerns about market harm, saying “Broadcast monitoring threatens copyright owners’ potential market for video clips, to some extent, whether or not they now exploit the market, and I understand that some of them already do provide a limited service in this regard.”

Robert Cohen, president of Video Monitoring Services of America, testified next on behalf of the International Association of Broadcast Monitors. He began with a dire warning. “Without this legislation, the existence of the broadcast news monitoring industry in the United States is and will remain in jeopardy. Without our industry, the ability of the public to have access to news reporting about themselves and about issues important to them will be threatened.”

Cohen reiterated that the motivation for the bill were the previously mentioned court decisions like Duncan that have held broadcast monitoring was not fair use. He emphasized the important service that monitors provide to their clients, and he supported the bill in order to “clarify to the judiciary that news monitoring is just the kind of activity that the fair-use doctrine was designed to protect.” Cohen concluded his remarks by stressing “that if we go out of business or our services are chilled, there is no alternative for obtaining information from news programming on an immediate, nationwide basis.” 8International Association of Broadcast Monitors President Ed Moser separately testified during this hearing, but his statement largely echoed Cohen’s points. L. Ray Patterson concurred with Cohen. In his opinion, Duncan was wrongly decided, and this bill was necessary “to clarify [the law] for the courts.” 9Patterson’s argument that it was wrongly decided was that the Eleventh Circuit’s permanent injunction “gave perpetual copyright protection, unlimited in nature, to protect uncopyrightable as well as abandoned material, and this is wholly contra to what the 1976 Copyright Act provides.” This appears to erroneously conflate right with remedy.

David Nimmer offered a succinct description of the broadcasters’ position in his written statement:

We recognize this subcommittee’s interest in exploring ways in which copyright laws can promote public access to information and facilitate rapidly developing communications technologies. Broadcast monitoring services… are but one means of fulfilling this valuable public service. At the same time, however, public access to news broadcasting need not be secured at the expense of copyright ownership.

Neither broadcast monitoring services, nor the public interest in public access to video monitored news, should trump the copyright claims of those who finance, produce, create and edit broadcast news. Copyright protection, not copyright violation, serves the public interest. Copyright protection is intended to encourage creation of intellectual property by allowing the creator to retain the maximum ability to profit from his or her work. The control of a work’s ancillary uses is an important part of deriving full value. For this reason, we are troubled by the rhetoric of those video monitors who refuse to enter into license with the originators of the programs that they copy and sell, but still try to justify their behavior under the cloak of the “public interest”. For example, one witness who testified before Congress on behalf of the broadcast monitoring industry equates the guarantees of free speech with an unimpeded—i.e., unlicensed—right of public access to information.

This tips the balance too far. The simple truth is that this is a business issue, not a constitutional issue. We are not disagreeing about whether the public should have access to news clips but about whether copyright holders deserve compensation for and protection of their product.

Nimmer went on to rebut some of the concerns raised by proponents of the bill.

First, he noted that Congress has already addressed the question of public access to news broadcasts in multiple areas of federal law. For example, the 1976 Act permits archival reproduction and distribution by libraries and archives of “an audiovisual work dealing with news”; outside the Copyright Act, the Library of Congress is permitted to reproduce and distribute a “regularly scheduled newscast or on-the-spot coverage of news media.”

He then considered current business practices, saying, “Far from demonstrating a breakdown in the marketplace for access to news programs, current licensing practices can accommodate the growth of the video monitoring industry through market-based incentives.” Among the benefits of voluntary licensing is that it “forces direct face-to-face negotiations between news producers and video monitors, sensitizing each group to the needs of the others.”

Nimmer concluded,

Information access and retrieval technology is undergoing daily, rapid change. Rather than craft legislation that [may] chill development of new technologies (e.g., interactive, on-line video retrieval), Congress should ensure that existing non-profit, non-commercial uses remain anchored within the fair use exception and that commercial businesses built around the use of materials originated by others continue to be governed by traditional copyright law norms.

Senator Hatch wrapped up the hearing with a statement supporting his bill. Like Cohen and Patterson, he believed most news monitoring should fall under fair use, but court decisions like Duncan have necessitated a legislative course correction.

There was no further action on S.1805 following the hearing. Sen. Hatch reintroduced the bill the following Congressional session but it did not go anywhere, 10S. 23, 103rd Congress, 1st Sess. (1993). and there have been no similar bills introduced since. Congress had ample opportunity to consider adding news reporting monitoring to the list of fair use purposes in 107 but declined to do so.

Then and now

Contrary to Cohen’s predictions, the lack of legislation did not jeopardize the broadcast news monitoring industry. Nevertheless, little has changed in the discussion of fair use and news monitoring from the early 90s to the current litigation involving Fox News and TVEyes. For example, like Senator DeConcini, the amicus brief from the EFF and the NYU Tech Law & Policy Clinic says, “Every day, a virtual flood of news content streams across countless front pages and home pages, broadcast-television and social-media feeds, and more. The amount of content being produced in the media environment has exploded in recent years.”

But some things have changed. Most importantly, the current litigation involving TVEyes presents several crucial facts that are fundamentally different from the context in which proponents of the news monitoring bills in the 1990s supported legislation.

First, Waggoner noted in his 1991 testimony that, at the time, broadcast monitors only recorded news programs and only provided small clips. 11News monitoring hearing at 265-266. “Hard news”, being primarily informational rather than creative, arguably admits to fair use more readily. TVEyes records everything on 1,400 channels: news programs, news magazines, documentaries, and likely everything else. And users can watch at least some of these in their entirety. 12See Expert Report and Declaration of Beth Knobel, Ph.D. at 4-5, Fox News Network, LLC, v. TVEyes, Inc., No. 1:13-CV-05315 (SDNY 2015) (No. 100), hereinafter “Knobel declaration” (“it was easy for me to download an entire episode of NBC Nightly News with Brian Williams without commercials from TVEyes in five high definition video clips”).

Second, at the time, broadcast monitors voluntarily restricted against redistribution and rebroadcast of clips by clients. 13News monitoring hearing at 29. TVEyes, however, allegedly encourages customers to post, redistribute, and email content. 14See Knobel declaration at 26, “the TVEyes Content-Delivery Features are designed to encourage users to download and publicly distribute video clips. TVEyes also touts the ability to use these features for those purposes in its marketing materials and in communications with its clients.”

Finally, there has been a marked shift in technology and the television news market. In the 1990s, as Waggoner observed,

[B]roadcasters themselves do not currently service or exploit the demand for monitored, after-broadcast news programming. They have not demonstrated any interest in doing so. Most broadcasters make previously-aired programming available to the public on a casual or delayed basis, if at all. The public’s interest in having consistent, complete and immediate access to broadcast news programming is not now well served by broadcasters. 15News monitoring hearing at 264.

That is no longer the case. Viewers are increasingly watching shorter video clips online rather than linear television. 16See, e.g., Lara O’Reilly, Most Young People Say They Have Stopped Watching TV, Business Insider (Jan. 26, 2015). As Knobel points out, “the television news business has invested significant resources to make content available through digital distribution and has developed established markets to support such distribution, including website and mobile-device-based advertising, extensions of cable or satellite subscriptions (e.g., TVEverywhere), and clip licensing.” 17Knobel declaration at 4. Thus, services like TVEyes have a more direct impact on the market for broadcasters nowadays. Their reproduction and distribution of clips means they “stand[] to profit from exploitation of the copyrighted material without paying the customary price,” a factor “that tends to weigh against a finding of fair use.” 18See, Harper & Row Publishers, Inc. v. Nation Enterprises, 471 US 539, 562 (1985) (“The fact that a publication was commercial as opposed to nonprofit is a separate factor that tends to weigh against a finding of fair use… The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.”). Fair use was intended to be a flexible doctrine, so it should be able to account for such shifts in the market.

Oral arguments on the current motions are scheduled for July 9.

References   [ + ]

1. Fox News Network, LLC v. TVEyes, Inc., 43 F. Supp. 3d 379 (SDNY 2014); see also my post, Fox News v TVEyes: Fair Use Transformed.
2. S.3229, 101st Cong. (2nd Sess. 1990).
3. Copyright Amendments Act of 1991 Hearings before the H. Subcomm. on Intellectual Property and Judicial Administration of the Comm. on the Judiciary on H.R. 2372, 101st Cong. (1991).
4. 744 F.2d 1490 (11th Cir. 1984), cert. denied, 471 U.S. 1004 (1985).
5. E.g., Cable News Network, Inc. v. Video Monitoring Services of America, Inc., Civ. No. 1:88-CV-2660-JOF (N.D. Ga. Jan. 9, 1990); NBC Subsidiary (KCNC-TV) v. Video Monitoring Services of America, Inc., Civ. No. 88-Z-234 (D. Colo. July 27, 1989); Georgia Television Co. v. TV News Clips of Atlanta, Inc., 9 U.S.P.Q. 2d (BNA) 2049 (N.D. Ga. 1989).
6. S. 1805, 102nd Cong. (1st Sess. 1991).
7. News monitoring: Hearing before the S. Subcomm. on Patents, Copyrights, and Trademarks of the Committee on the Judiciary on S. 1805, a bill to amend Title 17, United States Code, to clarify news reporting monitoring as a fair use exception to the exclusive rights of a copyright owner, 102nd Cong. (1992), hereinafter “News monitoring hearing”.
8. International Association of Broadcast Monitors President Ed Moser separately testified during this hearing, but his statement largely echoed Cohen’s points.
9. Patterson’s argument that it was wrongly decided was that the Eleventh Circuit’s permanent injunction “gave perpetual copyright protection, unlimited in nature, to protect uncopyrightable as well as abandoned material, and this is wholly contra to what the 1976 Copyright Act provides.” This appears to erroneously conflate right with remedy.
10. S. 23, 103rd Congress, 1st Sess. (1993).
11. News monitoring hearing at 265-266.
12. See Expert Report and Declaration of Beth Knobel, Ph.D. at 4-5, Fox News Network, LLC, v. TVEyes, Inc., No. 1:13-CV-05315 (SDNY 2015) (No. 100), hereinafter “Knobel declaration” (“it was easy for me to download an entire episode of NBC Nightly News with Brian Williams without commercials from TVEyes in five high definition video clips”).
13. News monitoring hearing at 29.
14. See Knobel declaration at 26, “the TVEyes Content-Delivery Features are designed to encourage users to download and publicly distribute video clips. TVEyes also touts the ability to use these features for those purposes in its marketing materials and in communications with its clients.”
15. News monitoring hearing at 264.
16. See, e.g., Lara O’Reilly, Most Young People Say They Have Stopped Watching TV, Business Insider (Jan. 26, 2015).
17. Knobel declaration at 4.
18. See, Harper & Row Publishers, Inc. v. Nation Enterprises, 471 US 539, 562 (1985) (“The fact that a publication was commercial as opposed to nonprofit is a separate factor that tends to weigh against a finding of fair use… The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.”).

The US Patent and Trademark Office (USPTO) held a public meeting on April 1 to discuss how the federal government could facilitate the development of the online licensing environment for copyrighted works. Specifically, the USPTO was interested in hearing how the government could encourage “development and use of standard identifiers for all types of works of authorship, interoperability among databases and systems used to identify owners of rights and terms of use, and a possible portal for linking to such databases and to licensing platforms”—a portal possibly modeled after the United Kingdom’s Copyright Hub, launched nearly two years ago. In other words, how can we make online licensing easier?

During the audience comment period of the meeting, Jonathan Band, here representing the Library Copyright Alliance, 1The Library Copyright Alliance is an advocacy organization whose members include the American Library Association, the Association of Research Libraries, and the Association of College and Research Libraries. Band also represents the CCIA, a “membership organization for a wide range of companies in the computer, Internet, information technology, and telecommunications industries”, whose members include Amazon, Google, and Pandora. stood up to say,

In the morning, I felt pretty good, because it seemed—you know, it was a very technical conversation in talking about standard definitions, it talked about interoperability, very focused obviously on the specific problems of the music industry in this country and all the complexity of the way it’s structured.  And, so, I felt okay.  I felt this is not really threatening the interests of libraries and their users.

And then we had this afternoon’s conversation, which I frankly have found quite alarming. And what I found very alarming is in the presentation about the Copyright Hub that it seemed—you know, the examples were about educational uses or personal uses and that those were the kinds of uses that should be licensed. And then, you know, when [USPTO Chief Policy Officer and Director for International Affairs] Shira [Perlmutter] was sort of introducing this panel, talking about low-value uses, and I say, okay, I get in the morning when we were talking about, you know, commercial works and commercial uses, you know, that makes sense, I get that.

But when you start talking about low-value uses, I say, okay, they’re talking about me, you know, they’re talking about what my people are doing. And, so, you know, I know there’s been a few references to fair use during the course of this panel, but, you know, my ultimate point here is that we’re very worried that this discussion sort of leads to a place where fair use is undermined. I mean, we’re comfortable where fair use in this country is now. I know some of you on the panel are not, and … the fact that you like all this makes—is also alarming to me. But, you know, the bottom line is, you know, you have to—you know, there’s a lot of skepticism in the library community about where this could end up.

In short, “We should not make online licensing easier.”

The “licensing undermines fair use” talking point was expected, and several panelists rebutted Band’s hand-wringing. But what was not entirely expected was what occurred several minutes later when another audience member stood up, and said,

I am Janice Pilch, Copyright and Licensing Librarian at Rutgers University Libraries. And I want to say that I didn’t find anything said this afternoon to be alarming. I don’t think that any ideas expressed this afternoon or the idea of the Hub is incompatible with copyright limitations and exceptions. We don’t—it doesn’t mean that we would cut them out of the picture; it doesn’t mean that they would go away.

Pilch added, “On the other hand, as [Songwriters Guild of America President] Rick Carnes said this morning, it all starts with creators. And if we cut creators out of the picture, we’re not helping anything. And that should be the primary thing that we think about in using works.” I couldn’t have said it better myself.

The public dissent from Band by a librarian suggests that not all in that community accept the view that user rights can only come at the sacrifice of author rights. The public interest might instead be served by recognizing both have interests, and these interests are mutually reinforcing. What librarian, after all, doesn’t hold books and authors in high regard? And what author wouldn’t cite libraries as playing a role in inciting their interest in writing? The suggestion that authors and publishers would want to undermine uses of their works outside their exclusive rights secured by copyright law is alien to those authors and publishers.

Nevertheless, it’s true that rhetoric as heated up in recent decades in the copyright arena. Some of this rhetoric has centered around the fair use doctrine. As Justin Hughes noted in a recent address, fair use has become “a principal arena in the struggle between proponents and opponents of IP.” This is not unexpected, the open-ended and vague nature of the doctrine practically invites struggle. It is also an antagonistic doctrine: someone wins, someone loses. Either a copyright owner loses all right to a use, or a copyright user faces full legal liability for infringement.

Band’s remarks illustrate one particular view that has emerged from this stuggle: the idea that fair use is under attack, and is the only thing standing between purely private interests and a broader public interest. This view is unfounded.

At this year’s Fordham IP conference former US Copyright Office General Counsel and retired Proskauer Rose partner Jon Baumgarten reiterated the important point that while there may be concern over expansive directions the fair use doctrine has taken in recent years, that does not translate into opposition to fair use itself from authors and copyright owners. Said Baumgarten,

My first concern is that the fair use doctrine is apparently moving far away from the objective of ancillary or incidental furthering of independent authorship. I deliberately used the terms “ancillary” and “incidental.” I do not mean unimportant, I do not mean not valuable; I just mean occasional and ancillary to the creation of a new work of authorship.

I think fair use is indeed quite important. I represented publishers of biographies, histories, historical fiction, newspapers and documentaries for many years. We had to believe in and exercise fair use or we could not survive. So I am not “anti-fair use” by any means.

This support for traditional fair use is not merely lip service. The only statutory change to fair use since the 1976 Copyright Act came in 1992, when Congress amended § 107 to add that “The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.” This expansion of fair use was aided by lobbying from authors and publishers. 2See, e.g., William Patry, Copyright Law and Practice, Amendments to the 1976 Act (2000) (“The legislation was introduced out of misplaced concerns by some publishers and authors that the Second Circuit’s decisions in Salinger v. Random House, Inc. and New Era Publications International ApS v. Henry Holt & Co. would make the publication of biographies and history using unpublished material more difficult by allegedly erecting a per se rule against fair use of unpublished works.”); Accord Statement of Floyd Abrams, Hearing: Fair Use and Unpublished Works, Joint Hearing on S.2370 and H.R.4263, pg 186 (July 11, 1990) (Expressing support of legislation on behalf of, inter alia, Authors Guild and Association of American Publishers).

This rhetoric also draws focus from other mechanisms in the copyright framework that can balance the plurality of interests, such as licensing. Too often forgotten are the benefits that licensing offers. Since licensing agreements are the result of negotiations, they approach mutually beneficial ends. On a more general note, they encourage goodwill and collaboration. The absense of formal inclusion mechanisms like licensing invites antagonism and opportunism. 3See, generally, Daniel Kelly, The Right to Include, 63 Emory Law Journal, 857 (2014). Licensing also provides certainty and reduces exposure to risk.

That’s not to say licensing can solve all problems; there are certainly legitimate concerns on both sides that can raise challenges. Libraries want to make sure that licensing of digital works does not unduly impede their circulation and archival missions. Authors and publishers want to make sure they can continue to recoup their investment in creation and dissemination of new works.

Statutory exceptions play an important role as well. Though not as flexible as fair use, they provide far greater certainty since they spell out exactly what is permitted. At the House Judiciary Committee’s final copyright review hearing last month, US Register of Copyrights Maria Pallante identified a number of issues ripe for legislative action. Among these issues was updating the Section 108 library exceptions. Pallante said, “The Office agrees that the provisions should be comprehensible and should relate logically to one another, and we are currently preparing a discussion draft. This draft will also introduce several substantive changes, in part based upon the recommendations of the Study Group’s 2008 report. It will address museums, preservation exceptions and the importance of ‘web harvesting’ activities.”

Obviously, the details will be determinative, but the principle behind the recommendation is a good one, and no cause for alarm.

References   [ + ]

1. The Library Copyright Alliance is an advocacy organization whose members include the American Library Association, the Association of Research Libraries, and the Association of College and Research Libraries. Band also represents the CCIA, a “membership organization for a wide range of companies in the computer, Internet, information technology, and telecommunications industries”, whose members include Amazon, Google, and Pandora.
2. See, e.g., William Patry, Copyright Law and Practice, Amendments to the 1976 Act (2000) (“The legislation was introduced out of misplaced concerns by some publishers and authors that the Second Circuit’s decisions in Salinger v. Random House, Inc. and New Era Publications International ApS v. Henry Holt & Co. would make the publication of biographies and history using unpublished material more difficult by allegedly erecting a per se rule against fair use of unpublished works.”); Accord Statement of Floyd Abrams, Hearing: Fair Use and Unpublished Works, Joint Hearing on S.2370 and H.R.4263, pg 186 (July 11, 1990) (Expressing support of legislation on behalf of, inter alia, Authors Guild and Association of American Publishers).
3. See, generally, Daniel Kelly, The Right to Include, 63 Emory Law Journal, 857 (2014).

On January 12, photographer Michael Kienitz asked the Supreme Court to review the Seventh Circuit’s decision in Kienitz v. Sconnie Nation. Sconnie Nation waived its brief, though the Media Institute filed an amicus brief in support of Kienitz.

The issue is fair use, specifically whether the Seventh Circuit split with the Second Circuit on the application of the “transformative use” test with its decision.

Kienitz takes place in the town of Madison, Wisconsin, where, several years ago, the Mayor sought to shut down an annual block party. Sconnie Nation, a novelty t-shirt maker, printed up a handful of t-shirts with a photo of the mayor and the phrase “Sorry for partying.” The photo was originally taken by Kienitz, a journalist and conflict photographer, and used without permission. Kienitz sued Sconnie Nation for copyright infringement.

Sconnie Nation asserted fair use, and the district court agreed, granting summary judgment in favor of the defendant.

On appeal, the Seventh Circuit affirmed the lower court’s judgment but criticized its reasoning. Specifically, it took aim at the court’s reliance on the “transformative use” test, saying, “That’s not one of the statutory factors, though the Supreme Court mentioned it in Campbell v. Acuff-Rose Music.” It observed that the Second Circuit has embraced this test, most recently in its decision in Cariou v. Prince, where it “concluded that ‘transformative use’ is enough to bring a modified copy within the scope of §107.” Writing for the Seventh Circuit, Judge Easterbrook said,

We’re skeptical of Cariou‘s approach, because asking exclusively whether something is “transformative” not only replaces the list in §107 but also could override 17 U.S.C. §106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2). Cariou and its predecessors in the Second Circuit do not explain how every “transformative use” can be “fair use” without extinguishing the author’s rights under §106(2).

The court nevertheless found the use fair, saying the t-shirts have not “reduced the demand for the original work.”

While Cariou’s approach to transformative use has been criticized before, 1See, e.g., Patricia Cohen, Photographers Band Together to Protect Work in ‘Fair Use’ Cases, New York Times, Feb. 21, 2014. Kienitz represents the first Circuit Court decision to do so.

Recall, Cariou involved the unauthorized appropriation of photographs of working-class photographer Patrick Cariou by celebrity artist Richard Prince. 2Cariou v. Prince, 714 F. 3d 694 (2d. Cir. 2013). The Second Circuit held that 25 of Prince’s paintings were fair use, despite “Prince’s deposition testimony that he ‘do [es]n’t really have a message,’ that he was not ‘trying to create anything with a new meaning or a new message,’ and that he ‘do[es]n’t have any … interest in [Cariou’s] original intent.'” The court said that “The law imposes no requirement that a work comment on the original or its author in order to be considered transformative, and a secondary work may constitute a fair use even if it serves some purpose other than those (criticism, comment, news reporting, teaching, scholarship, and research) identified in the preamble to the statute.” The Supreme Court subsequently denied to review the Cariou decision.

I think Cariou was wrongly decided. But whether or not Kienitz represents a good vehicle for Supreme Court review, I think the occasion does provide a good place to reiterate the importance of necessity to fair use.

Judge Easterbrook raises this point, though it is ultimately of no help to Kienitz. Easterbrook observes:

[D]efendants did not need to use the copyrighted work. They wanted to mock the Mayor, not to comment on Kienitz’s skills as a photographer or his artistry in producing this particular photograph. There’s no good reason why defendants should be allowed to appropriate someone else’s copyrighted efforts as the starting point in their lampoon, when so many non-copyrighted alternatives (including snapshots they could have taken themselves) were available. The fair-use privilege under §107 is not designed to protect lazy appropriators. Its goal instead is to facilitate a class of uses that would not be possible if users always had to negotiate with copyright proprietors. (Many copyright owners would block all parodies, for example, and the administrative costs of finding and obtaining consent from copyright holders would frustrate many academic uses.)

Fair Use and Necessity

I’m not the first to describe fair use in terms of necessity. Alan Latman, going all the way back to his seminal 1958 study on fair use as part of the Copyright Law Revision process leading to the current Act, wrote:

Practical necessity is at times the rationale of fair use. Thus article 10 of the law of Argentina requires that an excerpt be “indispensable” to the purpose of the later work. The modus operandi of certain fields requires that the rights of each author yield to a step-by-­step progress. This consideration is often linked to the constitutional support for fair use as an indispensable tool in the promotion of “science.” Practical necessity and constitutional desirability are strongest in the area of scholarly works.

Similarly, in reviews of a work, a certain amount of reconstruction is often necessary; and in burlesque, the user must be permitted to accomplish the “recalling or conjuring up of the original.” Of more questionable necessity is the use of an earlier work in the preparation of a compilation. However, extensive use of earlier works as guides and checks appears to be common in this type of work which, although perhaps not achieving the intellectual aims inherent in the constitutional objective of copyright, does produce useful publications. 3Alan Latman, Fair Use of Copyrighted Works, pp 30-31, Copyright Law Revision Study No. 14, US Copyright Office (1958).

More recently, David Fagundes ruminates on the idea in a 2011 post, South Park & a Necessity Theory of Fair Use’s Parody/Satire Distinction:

Parody/satire may not track well onto the idea of transformativeness, but I do think it tracks well onto the idea of necessity.  Necessity is a familiar defense to property torts.  In the context of trespass, for example, emergency can entitle yachters stranded on a stormy lake to tie up at a stranger’s dock without permission, on the theory that avoiding the loss of their lives is more important than respecting the owner’s negative liberty (remember Ploof v. Putnam?).

And there are others who have looked at the idea of necessity in fair use, either favorably 4E.g., David Lange & Jessica Lange Anderson, Copyright, Fair Use and Transformative Critical Appropriation (working paper) (2011) (arguing that “fair use must be understood to make deliberate room for transformative appropriation of copyrighted work whenever the appropriation and transformation are necessary steps toward the realization of significant social criticism”). or critically. 5E.g., John Tehrenian, Infringement Nation: Copyright 2.0 and You, p. 41 (Oxford Univ. Press 2011) (“The Supreme Court’s distinction between satire and parody in the application of the fair use test is ultimately unsatisfying. Such a formulation reduces fair use to a test about necessity. Thus, where use is necessary to produce a form of speech (parody), it will be reluctantly tolerated as fair. But, where use is unnecessary to produce a form of speech (satire), it will not be tolerated. Such a conceptualization of fair use is highly propertized, allowing borrowing only when conditions require it. Such a view casts fair use as a privilege, not a right—a stark contrast to the former view of copyright itself as a privilege rather than a natural right. Under a utilitarian vision of copyright, progress in the arts rather than a necessity calculus should drive the fair use doctrine. As a consequence, there is no inherent reason why satire should be subject to different fair use rights than parody.”)

Fair Use Justifications

Necessity derives from the justifications for fair use.

The earliest justification for fair use is grounded in the goals of copyright law itself. That is, “that a certain degree of latitude for the users of copyrighted works is indispensable for the ‘Progress of Science and useful Arts.’” 6Alan Latman, Fair Use of Copyrighted Works, pg 7, Copyright Law Revision Study No. 14, US Copyright Office (1958); accord Campbell v. Acuff-Rose Music, 510 US 569, 575 (1994) (“From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts. . . .’”

In one of the earliest law review articles on fair use, Judge Yankwich concludes:

[T]he earnest scholar and student, be he reviewer, critic or scientist in the same field, should have reasonable access to the work of others, lest we put—in the words of Lord Ellenborough—“manacles upon science.” On the whole, the law of “fair use,” as evolved by the courts, is a wise synthesis of conflicting rights which, while safeguarding the author, avoids injury to the progress of ideas which would flow from an undue “manacling” of others in the reasonable use of copyrighted material.7Leon R. Yankwich, What is Fair Use? 22 Univ. of Chicago Law Review 203, 215 (1954).

More recently, fair use has also been justified on free speech grounds. The Supreme Court has said on several occasions that fair use is one of copyright’s “built-in First Amendment accommodations”; it, along with doctrines like the idea-expression dichotomy, is “generally adequate” to address “First Amendment concerns.” 8Eldred v. Ashcroft, 537 US 186, 219 (2003). In Eldred v. Ashcroft, the Court said fair use “allows the public to use not only facts and ideas contained in a copyrighted work, but also expression itself in certain circumstances.” When the expression itself is essential to a further purpose, such as news reporting or commentary, then fair use may allow copying. When it’s not essential, fair use should not apply, as the Supreme Court said in Harper & Row v. Nation Enterprises, where it held the unauthorized, verbatim copying of 300 words from an unpublished manuscript was not fair use:

Nor do respondents assert any actual necessity for circumventing the copyright scheme with respect to the types of works and users at issue here. Where an author and publisher have invested extensive resources in creating an original work and are poised to release it to the public, no legitimate aim is served by pre-empting the right of first publication. The fact that the words the author has chosen to clothe his narrative may of themselves be “newsworthy” is not an independent justification for unauthorized copying of the author’s expression prior to publication. To paraphrase another recent Second Circuit decision:

“[Respondent] possessed an unfettered right to use any factual information revealed in [the memoirs] for the purpose of enlightening its audience, but it can claim no need to ‘bodily appropriate’ [Mr. Ford’s] ‘expression’ of that information by utilizing portions of the actual [manuscript]. The public interest in the free flow of information is assured by the law’s refusal to recognize a valid copyright in facts. The fair use doctrine is not a license for corporate theft, empowering a court to ignore a copyright whenever it determines the underlying work contains material of possible public importance.” [Emphasis added.] 9Harper & Row v. Nation Enterprises, 471 US 539, 557-58 (1985).

Taken together, these justifications suggest that throughout the history of fair use, there has been this idea that some overriding purpose is required to privilege a use that would otherwise be infringing. And the use of the original work must be necessary to the new work.

Campbell v. Acuff-Rose

This is precisely what the Supreme Court held in Campbell v. Acuff-Rose. In Campbell, the publishers of “Oh Pretty Woman,” written and recorded by Roy Orbison and William Dees, sued 2 Live Crew after it released “Pretty Woman,” a take-off on the Orbison classic that incorporated numerous elements from the song, including the famous bass riff, and added ribald rap lyrics. The district court had found the 2 Live Crew song to be a parody of the Orbison song, and the case made it to the Supreme Court on the issue of fair use.

This was the first time the Court would weigh in on whether parody may be fair use. It held that it could, saying, “Like less ostensibly humorous forms of criticism, it can provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one.” In doing so, it drew a sharp distinction between parody and satire, defining the former as a work that comments on an existing work through mimicry while the latter copies for a non-related purpose.

For the purposes of copyright law, the nub of the definitions, and the heart of any parodist’s claim to quote from existing material, is the use of some elements of a prior author’s composition to create a new one that, at least in part, comments on that author’s works. If, on the contrary, the commentary has no critical bearing on the substance or style of the original composition, which the alleged infringer merely uses to get attention or to avoid the drudgery in working up something fresh, the claim to fairness in borrowing from another’s work diminishes accordingly (if it does not vanish), and other factors, like the extent of its commerciality, loom larger.

The Court went on to point out that this distinction hinges on necessity.

Parody needs to mimic an original to make its point, and so has some claim to use the creation of its victim’s (or collective victims’) imagination, whereas satire can stand on its own two feet and so requires justification for the very act of borrowing. [Emphasis added.]

The necessity requirement makes sense in light of the underlying justifications of fair use. If copying of expression is necessary for some speech purpose, fair use may excuse it so that copyright protection does not overextend and impinge on free speech interests.

When, however, copying expression is not necessary to a new work, there is no free speech issue, since the copyright owner cannot prevent others from communicating the facts and ideas conveyed by her work.

This distinction is illustrated in the Ninth Circuit’s 2012 Monge v. Maya Magazines decision. 10688 F. 3d 1164. Maya, a gossip magazine, had published photos taken of a clandestine wedding of a young pop singer, one who maintained being single as part of her image. Maya argued fair use, characterizing the publication as news reporting and claiming, in part, that its “publication transformed the photos from their original purpose—images of a wedding night—into newsworthy evidence of a clandestine marriage.” It relied on the First Circuit’s decision in Núñez v. Caribbean Int’l News Corp. as support.

In Núñez, a newspaper had reprinted, without authorization, risqué photographs that had surfaced of a Miss Universe winner. The discovery of the photographs had sparked an inquiry into whether the model was fit to retain the Miss Universe title. The court disagreed that Núñez supported Maya’s fair use argument.

Although Núñez also involved news reporting, the similarities end there. The controversy there was whether the salacious photos themselves were befitting a “Miss Universe Puerto Rico,” and whether she should retain her title. In contrast, the controversy here has little to do with photos; instead, the photos here depict the couple’s clandestine wedding. The photos were not even necessary to prove that controverted fact—the marriage certificate, which is a matter of public record, may have sufficed to inform the public that the couple kept their marriage a secret for two years. [Emphasis added.]

Similarly, some use of expression may be necessary for commentary, criticism, quotation, or parody—all purposes that further the underlying goal of copyright in advancing art, science, and knowledge. Here, it bears repeating that, as a general rule, the protection of copyright will serve the purposes of copyright. When the original work is fungible to the new work—when there are alternative sources of raw materials for the second creator to draw upon—then the creation of the new work is not blocked. 11Credit to Jasmine Abdel-khalik, from whom I got the idea of “fungibility.” The second creator can “work[] up something fresh”, 12Joseph Fishman explains how this furthers copyright’s purpose in his forthcoming article, Creating Around Copyright. turn to the public domain for material, or find a work with more favorable licensing terms. 13In fact, entire industries providing stock photos, footage, and music have grown up to meet this demand. Copyright’s purpose is to create a commercial market for creative works, and these outcomes are consistent with a functioning marketplace. When fair use privileges uses of original works that are not necessary to the creation of new works, it undermines this market, and, consequently, undermines copyright.

Toward a Fair Use Standard

Focusing on the necessity of the original work to the new use also puts the other factors into sharper focus. Take, for example, the third factor, which looks at “the amount and substantiality of the portion used in relation to the copyrighted work as a whole.” If there is no connection between the original and new works, what standard guides courts in weighing this factor? How much use of a work is “fair” when it is not necessary to a new work? In this case, the inquiry becomes redundant with a substantial similarity analysis.

But when there is a connection between new and original works, courts have a standard to guide analysis of the third factor. Campbell provides a clear application of this principle in the context of parody.

Parody’s humor, or in any event its comment, necessarily springs from recognizable allusion to its object through distorted imitation. Its art lies in the tension between a known original and its parodic twin. When parody takes aim at a particular original work, the parody must be able to “conjure up” at least enough of that original to make the object of its critical wit recognizable. What makes for this recognition is quotation of the original’s most distinctive or memorable features, which the parodist can be sure the audience will know. Once enough has been taken to assure identification, how much more is reasonable will depend, say, on the extent to which the song’s overriding purpose and character is to parody the original or, in contrast, the likelihood that the parody may serve as a market substitute for the original. But using some characteristic features cannot be avoided.

In fact, it’s often forgotten that the Supreme Court did not hold that 2 Live Crew’s use was fair. It instead remanded to the district court to determine fair use, and in its discussion, it continues to be clear that a necessity requirement underlies fair use.

Suffice it to say here that, as to the lyrics, we think the Court of Appeals correctly suggested that “no more was taken than necessary,” but just for that reason, we fail to see how the copying can be excessive in relation to its parodic purpose, even if the portion taken is the original’s “heart.” As to the music, we express no opinion whether repetition of the bass riff is excessive copying, and we remand to permit evaluation of the amount taken, in light of the song’s parodic purpose and character, its transformative elements, and considerations of the potential for market substitution sketched more fully below.

The two parties settled following the Supreme Court decision, agreeing to a license.

In recent decades, fair use has categorically expanded to include the copying of entire works for new purposes rather than new works—for example, time-shifting, 14Sony Corp. of America v Universal City Studios, 464 U.S. 417 (1984). mass digitization, 15Authors Guild v. Hathitrust, 755 F.3d 87 (2nd Cir. 2014). or image search. 16Kelly v. Arriba Soft Corp., 336 F. 3d 811 (9th Cir. 2003). In these situations, necessity may not play the same role, if it plays one at all. But in its historical application—as a privilege for the incorporation of expression from an existing work into a new work—courts should look at necessity. Whether necessity is an essential element of fair use is a separate question, but at the very least, it should play a key role in any fair use inquiry to ensure that the doctrine remains consistent with copyright’s ultimate goals.

References   [ + ]

1. See, e.g., Patricia Cohen, Photographers Band Together to Protect Work in ‘Fair Use’ Cases, New York Times, Feb. 21, 2014.
2. Cariou v. Prince, 714 F. 3d 694 (2d. Cir. 2013).
3. Alan Latman, Fair Use of Copyrighted Works, pp 30-31, Copyright Law Revision Study No. 14, US Copyright Office (1958).
4. E.g., David Lange & Jessica Lange Anderson, Copyright, Fair Use and Transformative Critical Appropriation (working paper) (2011) (arguing that “fair use must be understood to make deliberate room for transformative appropriation of copyrighted work whenever the appropriation and transformation are necessary steps toward the realization of significant social criticism”).
5. E.g., John Tehrenian, Infringement Nation: Copyright 2.0 and You, p. 41 (Oxford Univ. Press 2011) (“The Supreme Court’s distinction between satire and parody in the application of the fair use test is ultimately unsatisfying. Such a formulation reduces fair use to a test about necessity. Thus, where use is necessary to produce a form of speech (parody), it will be reluctantly tolerated as fair. But, where use is unnecessary to produce a form of speech (satire), it will not be tolerated. Such a conceptualization of fair use is highly propertized, allowing borrowing only when conditions require it. Such a view casts fair use as a privilege, not a right—a stark contrast to the former view of copyright itself as a privilege rather than a natural right. Under a utilitarian vision of copyright, progress in the arts rather than a necessity calculus should drive the fair use doctrine. As a consequence, there is no inherent reason why satire should be subject to different fair use rights than parody.”)
6. Alan Latman, Fair Use of Copyrighted Works, pg 7, Copyright Law Revision Study No. 14, US Copyright Office (1958); accord Campbell v. Acuff-Rose Music, 510 US 569, 575 (1994) (“From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts. . . .’”
7. Leon R. Yankwich, What is Fair Use? 22 Univ. of Chicago Law Review 203, 215 (1954).
8. Eldred v. Ashcroft, 537 US 186, 219 (2003).
9. Harper & Row v. Nation Enterprises, 471 US 539, 557-58 (1985).
10. 688 F. 3d 1164.
11. Credit to Jasmine Abdel-khalik, from whom I got the idea of “fungibility.”
12. Joseph Fishman explains how this furthers copyright’s purpose in his forthcoming article, Creating Around Copyright.
13. In fact, entire industries providing stock photos, footage, and music have grown up to meet this demand.
14. Sony Corp. of America v Universal City Studios, 464 U.S. 417 (1984).
15. Authors Guild v. Hathitrust, 755 F.3d 87 (2nd Cir. 2014).
16. Kelly v. Arriba Soft Corp., 336 F. 3d 811 (9th Cir. 2003).

This weekend, Fifty Shades of Grey opens in theaters. The family-friendly tale of young love is based on a series of best-selling novels by British author E.L. James. Jonathan Band, a lobbyist for the Computer and Communications Industry Association (CCIA), yesterday posted an article about the film on CCIA’s Project Disco blog. In it, Band makes the extraordinary claim that “fair use is to blame—or thank—for the existence of the Fifty Shades franchise.”

Band correctly notes that James “originally wrote the trilogy as fan fiction of Stephanie Meyer’s popular Twilight series… At some point the popularity of the story must have convinced James of its potential commercial value, so she eliminated the vampires and the potentially infringing references to Twilight characters and plotline.” The series was indeed subsequently published, and indeed became commercially valuable. Band says, “Over 100 million copies of the novels have been sold, the first novel of the series has been on the New York Times bestseller list for 140 weeks, and the novels have been translated into 51 languages.” And soon, the film version will be playing in theaters worldwide.

So how, according to Band, does fair use play a role here? See if you can follow along. First, Band makes the erroneous legal assertion that “Fan fiction is a quintessential fair use.” There are no such categorical rules in fair use; it requires balancing multiple factors on a case-by-case basis. 117 USC § 107 provides in part that “In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include — (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.” Second, he makes the questionable presumption that any fanfic author’s fair use of a copyrighted work automatically privileges any third-party site’s hosting and distribution of that work online, thus shielding the site that James first uploaded her story to. Finally, by sharing her fanfic stories on a site devoted to Twilight fan fiction, Band speculates that “James almost certainly would have received constructive comments from other fans of ‘Twific’ (Twilight fan fiction) recommending stylistic changes and plot twists, and urging her to continue writing.”

That is why fair use was essential to 50 Shades. Because who’s ever heard of a non-fanfic based writer community?

Idea Expression

But what’s really curious about the example that Band chooses is that it serves as a perfect example of how, contrary to persistent claims by copyright critics, copyright does not stifle creativity.

James was inspired by Stephanie Meyer’s work and admittedly copied it. Yet, with a bit of additional creativity, she was able to produce her own work that is clearly not infringing. This is thanks to the foundational—yet underappreciated—distinction between idea and expression in copyright law.

As the First Circuit has explained, “[I]n most contexts, there is no need to ‘build’ upon other people’s expression, for the ideas conveyed by that expression can be conveyed by someone else without copying the first author’s expression.” 2Lotus Development Corp. v. Borland Intern., Inc., 49 F. 3d 807, 818 (1st Circuit 1995). This distinction mediates between the need for a commons of ideas that all authors can draw upon freely and the exclusive rights that facilitate the commercialization of expressive works. 3See, e.g., Stan J. Liebowitz & Stephen Margolis, Seventeen Famous Economists Weigh in on Copyright: The Role of Theory, Empirics, and Network Effects [PDF], 18 Harvard Journal of Law & Technology 435, 453 (2004) (“Copyright protects expression, not ideas. Many economists have seen It’s a Wonderful Life, the Jimmy Stewart movie classic, and have read The Choice, Russell Roberts’ treatment of free trade. Although Roberts uses the plot device of a man who must return to earth to earn his angel’s wings, his book does not infringe the movie’s copyright. Though clearly an important creative element of the movie, the plot device is not protected by copyright… Artists do indeed draw on old themes, and they are allowed to do so. On the other hand, they are not allowed to incorporate details of copyrighted works. So the economists are correct in that copyright does raise artists’ costs—copyright forces artists to do some work themselves. However, since only specific expressions are protected, extensive parts of the culture are not, as it is sometimes claimed walled off from creative re-use.”). The fact that all works are built on existing works while the vast majority of works do not infringe on other works proves the centrality and effectiveness of the idea expression distinction.

Perhaps it is the case that the operation of the idea expression distinction is so fundamental to copyright that it becomes easy to ignore. As copyright law professor Jessica Litman has observed, “The concept that portions of works protected by copyright are owned by no one and are available for any member of the public to use is such a fundamental one that it receives attention only when something seems to have gone awry.” 4Jessica Litman, Public Domain, 39 Emory L.J. 965, 977 (1990). And perhaps the line between idea and expression, as Landes and Posner observe, is “often hazy.” 5William M. Landes and Richard A. Posner, An Economic Analysis of Copyright Law 18 J. Leg. Stud. 325, 349 (1989). Nevertheless, the vast majority of works both build upon existing works yet do not infringe upon existing works. This is due primarily to the idea expression distinction. 6Accord Jane Ginsburg, Authors and Users in Copyright, 45 J. Copyright Soc’y USA 1, 5 (1997) (“The fair use doctrine … and the idea/expression dichotomy … relieve most of the tension that exclusive rights for first authors may cause when confronted with the creative demands of second authors.”).

To Boldly Go Where No One Has Gone Before

A good example of the idea expression distinction in action can be found in the development of the original Star Trek television series. In The Making of Star Trek, Gene Roddenberry notes some of the ideas that influenced his concept, including, “A. E. van Vogt’s tales of the spaceship Space Beagle, Eric Frank Russell’s Marathon series of stories, and the film Forbidden Planet (1956).” 7Whitfield, Stephen PE; Roddenberry, Gene (1968). The Making of Star Trek. New York: Ballantine Books. ISBN 0-345-31554-5. OCLC 23859. When Roddenberry first pitched the show, he described it as a “’Wagon Train’ concept”, referring to the popular Western television show that ran from 1957-65. The captain of the Enterprise was described as “A space-age Captain Horatio[] Hornblower,” an allusion to the protagonist of a series of novels by author C. S. Forester.

Roddenberry created Star Trek by copying from these—and undoubtedly other—sources. Yet no one would consider such copying actionable under copyright law. Roddenberry, like all creators, copied, rearranged, and combined ideas from multiple sources. He didn’t, however, need to copy material expression from any existing works.

This is how the distinction between idea and expression, on a day-to-day basis, works. It mediates between protection of creative works and recognition that any creative work necessarily borrows from other creative works. It allows remedies against misappropriation while allowing creative appropriation. It gives creators and courts a rough guide for distinguishing between property and the public domain. 8Accord Warner Bros. v. American Broadcasting Companies, 720 F. 2d 231, 240 (2nd Cir. 1983) (“Though imprecise, [the idea-expression dichotomy] remains a useful analytic tool for separating infringing from non-infringing works”). The result is billions of dollars in economic activity creating and disseminating creative works with a trivial amount of litigation involving an idea/expression issue.

Progress of Science

Not only does copyright facilitate the dissemination and reuse of ideas, but its restraints on expression may also be beneficial to the public and culture. In Creating Around Copyright, Joseph Fishman writes that, as cognitive psychology, management studies, and art history has all shown, creativity requires restraints. Certain types of constraints, including those inherent in copyright law, are generative. Fishman talks specifically about the derivative work right, which is “is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.” 917 USC § 101.

Without a derivative work right, we may get more homogenization. That’s damaging if the name of the game is creativity. The wider the range of undiscovered appropriate solutions to a problem, the more audiences may miss out when problem solvers become locked in to a single solution. And if audiences value a multiplicity of solutions separately from the content of those solutions, the cost of that lock-in becomes exacerbated. The expressive arts, where appropriateness is often extremely ill-defined and where we desire new works even though there’s nothing wrong with the old ones, check both of those boxes. To the extent that the derivative work right stimulates create-around effort, it furthers—not frustrates—copyright’s constitutional goal of “stimulat[ing] artistic creativity for the general public good.” Thus, although the current derivative works system constrains more broadly than a hypothetical blocking copyrights system, it may also constrain more wisely.

James’ original story, when it was still a “fanfic” of Twilight, would more than likely be considered a derivative work of that series. Yet James was able to “create around” Meyer’s original expressive elements to create a work that builds upon an existing work in a noninfringing way. And she did not need to rely on fair use to do so.

References   [ + ]

1. 17 USC § 107 provides in part that “In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include — (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.”
2. Lotus Development Corp. v. Borland Intern., Inc., 49 F. 3d 807, 818 (1st Circuit 1995).
3. See, e.g., Stan J. Liebowitz & Stephen Margolis, Seventeen Famous Economists Weigh in on Copyright: The Role of Theory, Empirics, and Network Effects [PDF], 18 Harvard Journal of Law & Technology 435, 453 (2004) (“Copyright protects expression, not ideas. Many economists have seen It’s a Wonderful Life, the Jimmy Stewart movie classic, and have read The Choice, Russell Roberts’ treatment of free trade. Although Roberts uses the plot device of a man who must return to earth to earn his angel’s wings, his book does not infringe the movie’s copyright. Though clearly an important creative element of the movie, the plot device is not protected by copyright… Artists do indeed draw on old themes, and they are allowed to do so. On the other hand, they are not allowed to incorporate details of copyrighted works. So the economists are correct in that copyright does raise artists’ costs—copyright forces artists to do some work themselves. However, since only specific expressions are protected, extensive parts of the culture are not, as it is sometimes claimed walled off from creative re-use.”).
4. Jessica Litman, Public Domain, 39 Emory L.J. 965, 977 (1990).
5. William M. Landes and Richard A. Posner, An Economic Analysis of Copyright Law 18 J. Leg. Stud. 325, 349 (1989).
6. Accord Jane Ginsburg, Authors and Users in Copyright, 45 J. Copyright Soc’y USA 1, 5 (1997) (“The fair use doctrine … and the idea/expression dichotomy … relieve most of the tension that exclusive rights for first authors may cause when confronted with the creative demands of second authors.”).
7. Whitfield, Stephen PE; Roddenberry, Gene (1968). The Making of Star Trek. New York: Ballantine Books. ISBN 0-345-31554-5. OCLC 23859.
8. Accord Warner Bros. v. American Broadcasting Companies, 720 F. 2d 231, 240 (2nd Cir. 1983) (“Though imprecise, [the idea-expression dichotomy] remains a useful analytic tool for separating infringing from non-infringing works”).
9. 17 USC § 101.

On January 12th, the Supreme Court called for the views of the US Solicitor General (SG) on a cert petition filed by Google in a case involving Oracle’s Java software platform. SCOTUSBlog has a wonderful background on calls for the Solicitor General (CVSG)—but, while the Supreme Court often follows the recommendation of the SG on whether or not to hear a case, in intellectual property cases it tends to listen to what it has to say and then chart its own path.

This case involves Google’s admitted literal copying of 7,000 lines of verbatim software code, as well as the nonliteral copying of the structure, sequence, and organization of Oracle’s Java API packages. Despite Google’s arguments, last May, the Federal Circuit held that these elements are indeed copyrightable, and remanded to the district court for further proceedings on Google’s fair use defense to the lower court’s finding of infringement. (For more background on the case, see my previous posts, Fed Circuit hears Oracle v Google arguments and Federal Circuit releases decision in Oracle v Google.) Yet, rather than seeking en banc review or waiting for a district court decision on fair use, Google took the rather unusual step of appealing straight to the Supreme Court for review.

The Supreme Court only hears a small percentage of cases it is asked to review, and at the petition stage, the focus is not typically on the merits of the case, but rather whether there is some factor making it worth Supreme Court review. In its opening brief, Google argues primarily that the Supreme Court should review the Federal Circuit decision because “it presents a longstanding, widely-recognized split in the courts of appeals.” It claims these courts “are in disarray about the application of Section 102(b) to software.”

In fact, there is no disarray. Google cites few Circuit Court decisions from the past three decades to support its claim of a deep split, and in addition, the most recent case Google cites for this proposition is from 1997—18 years ago.

If there is any such disarray in the courts regarding copyright protection for software, the software industry hasn’t noticed. As the Software and Information Industry Association reports, “From 1997 to 2012, software industry production grew from $149 billion to $425 billion,” outpacing the rest of the economy.1Robert J. Shapiro, The U.S. Software Industry as an Engine for Economic Growth and Employment, Sonecon (Sept. 2014).

A closer look at the cases cited by Google reveals that this purported split is largely illusory.

For starters, the four cases Google cites in its discussion on the split all stand for the same general propositions. Each Circuit agrees that infringement can arise from copying of either literal or nonliteral elements of software.2Mitel, Inc. v. Iqtel, Inc., 124 F. 3d 1366, 1373 (10th Cir. 1997); Lotus Development Corp. v. Borland Intern., Inc., 49 F. 3d 807, 814 (1st Cir. 1995); Computer Associates Intern., Inc. v. Altai, Inc., 982 F. 2d 693, 702-03 (2nd Cir. 1992); Whelan Associates v. Jaslow Dental Laboratory, 797 F.2d 1222, 1237 (3d Cir. 1986). They agree that copyright only protects expression, not ideas,3Mitel at 1371; Altai at 703; Whelan at 1234. and that copyright protection may exclude expression if it is purely functional/utilitarian, is considered scènes à faire, or is the only way to express an idea (the merger doctrine).4Mitel at 1374-76; Altai at 707-10 (describing scenes a faire in the context of computer software as “elements dictated by external factors”); Whelan at 1235-37.

The Federal Circuit’s decision is consistent with these decisions.

Google’s circuit split argument relies heavily on the First Circuit’s Lotus decision. Google’s argument, however, is misplaced, as Lotus is easily distinguishable on its facts from the Oracle case. First, Google verbatim copied 7,000 lines of admittedly original and creative source code, while the defendant in Lotus did not copy any code at all. Second, both parties, the district court, and the Federal Circuit all agree that Oracle’s complex declaring code and its organization is creative, but the evidence in Lotus established that the commands at issue were not. Third, the Federal Circuit found that “while the court in Lotus found the commands at issue were ‘essential to operating’ the system, it is undisputed that—other than perhaps as to the three core packages—Google did not need to copy the structure, sequence, and organization of the Java API packages to write programs in the Java language.”

Google’s “deep circuit split” simply does not exist on closer inspection. If there is any split, it hasn’t resulted in any noticeable difference in outcomes, and certainly hasn’t thrown the software industry in disarray. A circuit split implies that courts are employing contradictory tests—coming to opposite conclusions when presented with similar sets of facts. That is not the case here. Certainly one can see some variation in outcomes when one looks at decisions involving different underlying facts—but that would seem an unavoidable result when looking at the metaphysical boundary between idea and expression.

What’s more, Google’s other main argument—that issues of interoperability should factor into a copyrightability analysis—is both incorrect and further reason for the Supreme Court to deny review. As the Federal Circuit correctly observed, “Google’s interoperability arguments are only relevant, if at all, to fair use.” A doctrine that privileges a reasonable amount of copying for socially beneficial uses that don’t supersede a copyright owner’s interest is perfectly suited for dealing with interoperability. However, Google has appealed before any fair use determination could be made, making this case a poor vehicle for Supreme Court review regardless of any split.

Perhaps even more importantly, the Federal Circuit made clear that, as a factual matter, Android is not interoperable with Java—programs written for Android will not run on Java, and vice-versa. Google documents and witnesses admitted this during the district court trial. Indeed, Google purposefully designed Android in such a way as to fragment Java and ensure that programs written in the Android flavor of Java cannot run on any other operating system, circumventing Java’s goal of “write once, run anywhere.”

References   [ + ]

1. Robert J. Shapiro, The U.S. Software Industry as an Engine for Economic Growth and Employment, Sonecon (Sept. 2014).
2. Mitel, Inc. v. Iqtel, Inc., 124 F. 3d 1366, 1373 (10th Cir. 1997); Lotus Development Corp. v. Borland Intern., Inc., 49 F. 3d 807, 814 (1st Cir. 1995); Computer Associates Intern., Inc. v. Altai, Inc., 982 F. 2d 693, 702-03 (2nd Cir. 1992); Whelan Associates v. Jaslow Dental Laboratory, 797 F.2d 1222, 1237 (3d Cir. 1986).
3. Mitel at 1371; Altai at 703; Whelan at 1234.
4. Mitel at 1374-76; Altai at 707-10 (describing scenes a faire in the context of computer software as “elements dictated by external factors”); Whelan at 1235-37.

On Monday, I looked at what’s in store for copyright in the policy world in the upcoming year; today, I want to take a look at what we might see in the courts. Although it is impossible to predict what will come out of the courts in 2015, there are a number of ongoing lawsuits and appeals that may lead to further developments over the next twelve months. The following discussion is nowhere near comprehensive and highly idiosyncratic, reflecting my personal interests.

Supreme Court

All is quiet on the copyright front at the Supreme Court as we enter 2015. The Court does not currently have any cases featuring copyright issues scheduled on its docket. But pending is a cert petition filed this past autumn by Google in an infringement suit brought against the company by Oracle. In May, the Federal Circuit held that software code copied by Google from Oracle’s Java platform was copyrightable. Google is asking the Court to reconsider that decision, arguing that the literal code, along with the “structure, sequence, and organization”, that it copied is uncopyrightable as a system and method of operation. Oracle has responded that the Federal Circuit decision was correct, and Supreme Court review is not appropriate at this moment.

It will be interesting to see how courts continue to respond to last term’s decisions in Aereo and Petrella. Though there was some hand-wringing that the Court’s attempt to cabin its decision so as not to unduly impact cloud computing services would be unsuccessful, some lower courts have seemed a little too cautious in applying Aereo. For example, in September, a Southern District Court of New York judge declined to apply Aereo’s holding to the question of whether the defendant was engaged in an unauthorized public display “because its holding was explicitly limited to technologies substantially similar to the one before the Supreme Court.” 1Capitol Records v MP3Tunes, Memorandum and Order, 07-CV-9931 (SDNY, September 29, 2014). See MP3Tunes and the Ghost of Cablevision for an analysis questioning this conclusion. Additionally, though the majority in Aereo never once mentioned the “volitional conduct” test, a non-statutory doctrine applied sporadically and inconsistently in a handful of lower courts, a judge from the Southern District Court of California held that this silence implied endorsement in a December decision. 2Gardner v. CafePress, Order, 3:13-CV-1108 (SD Cali, December 4, 2014) (“[T]he Supreme Court expressly decided not to address the volitional conduct issue which leaves Fox [Broad. Co. v. Dish Network L.L.C., 747 F.3d 1060, 1067 (9th Cir. 2014)] undisturbed. As this Court is bound by Ninth Circuit precedent and Fox is still good law, the Court finds that volitional conduct is a required element of direct infringement.”).

Ironically, one of the early beneficiaries of the Aereo holding has been Dish Networks. The satellite television provider has exclusive rights to transmit a number of Arabic language television channels in the US. In 2012, it sued TV Net, a company that had begun offering many of those same channels to US subscribers via internet streaming. In October, a federal magistrate judge recommended Dish’s motion for default judgment and a permanent injunction 3Report and Recommendation, Dish Network v. TV Net Solutions, No. 6:12-cv-1629-Orl-41TBS, 2014 U.S. Dist. LEXIS 165305 (MD Fla., Oct. 10, 2014). (a recommendation that was subsequently adopted by the court). 4Dish Network v. TV Net Solutions, 2014 U.S. Dist. LEXIS 165120 (MD Fla., Nov. 25, 2014). The magistrate cited to Aereo to support its conclusion that transmission of the channels by TV Net to its customers constituted public performances.

The irony here is that Dish Networks had just a few months earlier filed an amicus brief arguing the opposite—that providers of “user-controlled technologies” like Aereo (and, presumably, by extension, TV Net) should not be held liable for public performance.

In Petrella, the Court tackled the equitable doctrine of laches; however, one of the interesting potential outcomes of the case has nothing to do with its holding. The Petrella opinion included dicta that seemed to suggest the Court was endorsing one side of an issue that has split the Circuit Courts—whether a copyright registration is effective when the Copyright Office receives an application (the “application” approach) or when it completes the processing of the application (the “registration” approach). 5Under US law, copyright registration is not mandatory; however, it does confer a number of benefits, including serving as a prerequisite before a civil infringement suit may be filed. At one point, the Court in Petrella said, “Although registration is ‘permissive,’ both the certificate and the original work must be on file with the Copyright Office before a copyright owner can sue for infringement.” The reference to a requirement that the registration certificate be on file before an infringement suit can be brought suggests that the receipt of an application alone does not satisfy the law’s registration requirement. This issue does not come up too often, but it will be interesting to see if courts pay any heed to the Petrella language.

It’s worth noting that the Copyright Office firmly endorses the view that registration is only effective after processing is complete. It says in the Third Edition of its Compendium, the final version of which was published in December 2014,

The mere submission of an application to the U.S. Copyright Office does not amount to a registration. This is corroborated by the statute and the legislative history… [which], when read together, clearly evince Congress’s intention that the Register of Copyrights must either issue a certificate of registration or refuse an application for registration prior to filing a suit for copyright infringement. Not only would the filing of a lawsuit solely on the basis of submission of an application eliminate the mediating role that Congress intended the Office to fulfill, it also would nullify the Register of Copyrights’ statutory right to intervene in an infringement action in cases where the application for registration has been refused.

The Supreme Court continues to grant cert petitions through the end of its current term, which concludes in June, and it begins considering cases for its next term starting in October, so there’s always the possibility it will confront a copyright issue before the end of the year.

Circuit Courts

There are a number of appeals before the Circuit Courts dealing with interesting or noteworthy issues that may see rulings in 2015.

Digital sampling. In the Ninth Circuit, parties are still briefing VMG Salsoul v. Ciccone, involving alleged infringing sampling by Madonna for her hit Vogue. A California district court ruled in November 2013 that the portion copied—an individual “horn hit” from a 1976 composition called “Love Break”—lacked the required originality to be protected by copyright, and even if it did, the amount used was de minimis. Notably, the plaintiffs based their argument primarily on the Sixth Circuit’s 2005 Bridgeport Music v. Dimension Films decision, which held that copyright’s traditional “substantial similarity” test for infringement does not apply to sound recordings, and any copying, no matter how minute, is infringing. While no court outside the Sixth Circuit has followed Bridgeport, 6Most recently, the Southern District Court of New York on December 9, 2014. and a few have even explicitly rejected it, 7See Blurred Lines: Digital Sampling, Bridgeport, and Substantial Similarity. this could be the first time a sister circuit court has squarely addressed the issue.

Mass digitization. The Second Circuit heard oral arguments in Authors Guild v. Google, concerning the Google Books commercial mass digitization project, less than a month ago, which could mean a decision some time in 2015 (though not necessarily). 8In 2009, the most recent year statistics are available, the average time from notice of appeal to disposition in the Second Circuit was 17.6 months for civil cases. The notice of appeal in Authors Guild v. Google was filed December 23, 2013. In 2013, the district court had held that Google’s scanning and display of excerpts en masse was fair use. However, the Authors Guild has noted, “Whatever the outcome of this case, a Supreme Court petition is in the cards.”

DMCA safe harbors. The parties in Capitol Records v. Vimeo are also still in the middle of briefing an appeal at the Second Circuit. Vimeo, like YouTube, allows users to upload and publicly share videos. The court there is being asked to consider the proper application of “red flag knowledge” and “willful blindness” under the DMCA as well as whether the DMCA safe harbor extends to pre-1972 sound recordings. Oral arguments there may be heard this year.

Lower Courts

Finally, there are a number of lawsuits in both federal and state lower courts which may bring developments in 2015.

The Southern District Court of New York continues to keep an eye on the dispute between Fox News and media monitoring service TVEyes. This past September, the court held that TVEye’s creation of a database and provision of television clips to its paying subscribers is fair use, an unusually expansive interpretation of the privilege. Fox News has not appealed this decision at this point (though it may be appealed whenever a final judgment is entered), and the parties continue to litigate whether the “features that allow searches by date and time, and that allow clips to be archived, downloaded, emailed, and shared via social media” are also fair use.

Litigation against satellite radio provider Sirius XM for alleged unauthorized public performance of pre-1972 sound recordings continues in a number of courts across the country. As I wrote previously, federal courts in New York and California ruled that pre-1972 sound recording owners do have an exclusive right of public performance under state and common law in lawsuits filed by surviving Turtle’s members Flo & Eddie, while a state court in California held the same in a lawsuit brought by major record labels. A summary judgment motion on the same question remains pending in a Florida federal case brought by Flo & Eddie, as well as any appeals that may yet come out. 9A motion for reconsideration also remains pending in the California federal court. The California state court has certified the ruling for interlocutory appeal while the New York federal court has yet to rule on certification.

Relatedly, litigation against streaming service Grooveshark continues. 10See Grooveshark is Done for a previous discussion of these lawsuits. In UMG Recordings v. Escape Media Group, a New York state court is ready to rule on a motion for summary judgment as to Grooveshark’s liability—including on a claim of direct infringement of public performance rights for pre-1972 sound recordings. 11Supreme Court of the State of New York, County of New York, Index No. 100152/2010 . This is particularly worth watching since a state court ruling on state law presumably carries more weight than a federal court ruling on state law (as has occurred in the Sirius litigation). Grooveshark is also facing claims of federal copyright infringement by Capitol Records in the Southern District Court of New York. Last May, the magistrate judge there recommended summary judgment in favor of Capitol Records, a recommendation Grooveshark subsequently opposed. A resolution remains pending.

Last August, Getty Images sued Microsoft over a “Bing image widget” released by Microsoft that allows third parties to embed on web sites images supplied by Microsoft’s Bing search engine. Getty alleges that this conduct amounts to copyright infringement by Microsoft. The Southern District Court of New York has so far denied a motion for preliminary injunction by Getty (Microsoft had disabled the widget by then) and a motion to dismiss by Microsoft; last month, Microsoft filed its answer and counterclaim.

References   [ + ]

1. Capitol Records v MP3Tunes, Memorandum and Order, 07-CV-9931 (SDNY, September 29, 2014). See MP3Tunes and the Ghost of Cablevision for an analysis questioning this conclusion.
2. Gardner v. CafePress, Order, 3:13-CV-1108 (SD Cali, December 4, 2014) (“[T]he Supreme Court expressly decided not to address the volitional conduct issue which leaves Fox [Broad. Co. v. Dish Network L.L.C., 747 F.3d 1060, 1067 (9th Cir. 2014)] undisturbed. As this Court is bound by Ninth Circuit precedent and Fox is still good law, the Court finds that volitional conduct is a required element of direct infringement.”).
3. Report and Recommendation, Dish Network v. TV Net Solutions, No. 6:12-cv-1629-Orl-41TBS, 2014 U.S. Dist. LEXIS 165305 (MD Fla., Oct. 10, 2014).
4. Dish Network v. TV Net Solutions, 2014 U.S. Dist. LEXIS 165120 (MD Fla., Nov. 25, 2014).
5. Under US law, copyright registration is not mandatory; however, it does confer a number of benefits, including serving as a prerequisite before a civil infringement suit may be filed.
6. Most recently, the Southern District Court of New York on December 9, 2014.
7. See Blurred Lines: Digital Sampling, Bridgeport, and Substantial Similarity.
8. In 2009, the most recent year statistics are available, the average time from notice of appeal to disposition in the Second Circuit was 17.6 months for civil cases. The notice of appeal in Authors Guild v. Google was filed December 23, 2013.
9. A motion for reconsideration also remains pending in the California federal court. The California state court has certified the ruling for interlocutory appeal while the New York federal court has yet to rule on certification.
10. See Grooveshark is Done for a previous discussion of these lawsuits.
11. Supreme Court of the State of New York, County of New York, Index No. 100152/2010 .

2014 was a busy year for copyright policy on a number of fronts, with the House Judiciary Committee, US Copyright Office, and USPTO actively working on a broad range of issues. What will 2015 bring?

House Judiciary Committee

Turning first to the House Judiciary Committee, it will likely continue its review of copyright law. The current copyright review process began nearly two years ago when Register of Copyrights Maria Pallante addressed Congress, saying it was time for it to approach copyright law issues “comprehensively.” Heeding the Register’s call, a Congressional copyright review was formally announced April 24, 2013. Representative Goodlatte (R-VA), chairman of the House Judiciary Committee, said the Committee would hold over the next few months a “comprehensive series of hearings on U.S. copyright law” in order “to determine whether the laws are still working in the digital age.”

Since then, the House Subcommittee on Courts, Intellectual Property, and the Internet has conducted sixteen days of informational hearings, five in 2013, and eleven this past year, on a range of issues across the copyright spectrum. Following November’s elections, Rep. Goodlatte announced Rep. Darrell Issa (R-CA) as chairman of the IP Subcommittee for the 114th Congress, also announcing that all copyright related issues will be handled at the full Committee. Goodlatte has said elsewhere that while the review process will continue into 2015, it is “almost complete.” He has emphasized that no specific goal or end product has been set for the process, saying, “A lot of the problems will be solved not by legislation but by new technologies, by business models, by business deals.”

One issue that hasn’t been heard yet during the review process is the operation of the Copyright Office. The IP Subcommittee did hold an oversight hearing on the Copyright Office September 18, where Register of Copyrights Maria Pallante testified not only about the current status of the Office and its projects but also the obstacles and opportunities it faces going forward. Pallante noted that the Office is “leanly funded” and its “fee authority does not permit the Office to collect for capital improvements or other forms of investment above the cost it incurs in the ordinary course of business.” She said the staff is “smaller than it should be to carry out the volume and complexity of work prescribed by Title 17.” Finally, Pallante remarked that the Office may need to “absorb more direct responsibility for its” technological needs; it currently uses the technical infrastructure of the Library of Congress, “including its network, servers, telecommunications and security operations.” This arrangement results in “both synergies and resource challenges.”

Departments across the Library compete for services and equipment. However, these services do not always support the fact that the Copyright Office is a twenty-four-hour business with a distinct mission. The Copyright Office intersects with a dynamic global marketplace and affects the legal rights and economic interests of those who rely on the provisions of Title 17.

This has been a constant theme of the review process—when Pallante first proposed a comprehensive review of copyright law, she remarked that “Evolving the Copyright Office should be a major goal of the next great copyright act.” 1Maria Pallante, The Next Great Copyright Act, 36 Columbia Journal of Law & the Arts 315, 341 (2013). The article is “is an extended version of the Twenty-Sixth Horace S. Manges Lecture delivered on March 4, 2013 at Columbia Law School.” See also “The Register’s Call for Updates to U.S. Copyright Law”, Subcommittee on Courts, Intellectual Property and the Internet Committee on the Judiciary United States House of Representatives 113th Congress, 1st Session, Statement of Maria A. Pallante, Register of Copyrights of the United States (March 20, 2013); (“evolving the Copyright Office should be a major goal of the next great copyright act.”).

Copyright Office

Pallante expanded on her thoughts during the Eleventh Annual Christopher A. Meyer Memorial Lecture delivered on November 20, 2013 at George Washington University Law School, remarks of which have been edited and published as The Next Generation Copyright Office: What it Means and Why it Matters. There, Pallante noted that there is a desire among the broader copyright community to build a “next generation Copyright Office” that could take advantage of technology to provide a wider array of services.

For example, BMI suggested that it would be useful for the Office to collect and incorporate short digital samples of musical works as part of its registration records, to help people identify copyright ownership. The American Society of Media Photographers and the Graphic Artists Guild suggested it would be helpful for the Office to invest in image recognition technologies to help people find works of visual art. The Association of American Publishers said it would be helpful to the book publishing industry if the Office adopted commercially successful metadata standards for digital content, such as ONIX. And SoundExchange said that if the Copyright Office could develop APIs, then rights management organizations and aggregators could create innovative applications for collecting and disseminating information regarding copyrighted content across the supply chain. In a publication about the Copyright Office released in 2010, Public Knowledge observed that “[t]he long term cost savings created by an easy-to-use, comprehensive registry should easily outweigh the costs associated with its creation.”

Nevertheless, the Copyright Office remains busy going into 2015. It is currently engaged in active policy studies on orphan works and mass digitization, the making available right, and music licensing. While the Office has solicited public comments and held public roundtables on each of these studies over the past year, that does not necessarily mean we will see any outcomes in 2015—it would not be surprising for the Office to call for additional comments or other public input in any of these proceedings. 2Two recently concluded policy studies from the Copyright Office concerning resale royalty and copyright small claims could give some idea of report timelines. The Copyright Office solicited two rounds of public comment regarding resale royalties September 2012 and March 2013 and held a public roundtable April 2013. That report was released December 2013. The study of copyright small claims involved three rounds of comments—October 2011, August 2012, and February 2013—and two sets of public events—a roundtable May 2012 and two days of public hearings November 2012—with the final report released September 2013.

US Patent and Trademark Office

Shifting to the executive branch, The Internet Policy Task Force (IPTF)—a Department of Commerce group led by the US Patent and Trademark Office (USPTO) and the National Telecommunications and Information Administration (NTIA)—held a series of public roundtables over the past year on several topics identified in its 2013 Green Paper, Copyright Policy, Creativity, and Innovation in the Digital Economy. Those include “(1) the legal framework for the creation of remixes; (2) the relevance and scope of the first sale doctrine in the digital environment; and (3) the appropriate calibration of statutory damages in the contexts of (i) individual file sharers and (ii) secondary liability for large-scale infringement.” The stated purpose of these roundtables was to “seek additional input from the public in locations around the country in order for the Task Force to have a complete and thorough record upon which to make recommendations.” During the fourth and final roundtable, held July 30, 2014 in Berkeley, California, Chief Policy Officer and Director for International Affairs at the USPTO Shira Perlmutter remarked that the conclusions and recommendations would be issued in the form of a White Paper, which would likely be issued sometime early 2015.

During 2014, the IPTF also coordinated a multistakeholder process for consensus-building among stakeholders with the aim of producing an agreed outcome by the end of 2014 on the issue of improving the operation of the DMCA notice and takedown system. The final public meeting of 2014 occurred December 18, where the Working Group presented a discussion draft of “Good, Bad and Situational Practices.” The draft notes:

The document represents the near final outcome of eight months of intensive public discussions, meetings, and negotiations in a process that was open to any and all interested stakeholders. A broad range of practices for potential inclusion were considered and discussed intensively over the course of eight months, and this draft contains recommendations on issues within the scope of the group’s work as to which best practices could be formulated.

The draft goes on to note that comments on the specific wording of the draft are now being accepted, and the IPTF will provide further information as to any future plenary meetings of the group.

In sum, 2015 promises to bring plenty of developments in copyright law and policy.

 

References   [ + ]

1. Maria Pallante, The Next Great Copyright Act, 36 Columbia Journal of Law & the Arts 315, 341 (2013). The article is “is an extended version of the Twenty-Sixth Horace S. Manges Lecture delivered on March 4, 2013 at Columbia Law School.” See also “The Register’s Call for Updates to U.S. Copyright Law”, Subcommittee on Courts, Intellectual Property and the Internet Committee on the Judiciary United States House of Representatives 113th Congress, 1st Session, Statement of Maria A. Pallante, Register of Copyrights of the United States (March 20, 2013); (“evolving the Copyright Office should be a major goal of the next great copyright act.”).
2. Two recently concluded policy studies from the Copyright Office concerning resale royalty and copyright small claims could give some idea of report timelines. The Copyright Office solicited two rounds of public comment regarding resale royalties September 2012 and March 2013 and held a public roundtable April 2013. That report was released December 2013. The study of copyright small claims involved three rounds of comments—October 2011, August 2012, and February 2013—and two sets of public events—a roundtable May 2012 and two days of public hearings November 2012—with the final report released September 2013.

Even after two courts in California, one federal and one state, determined in September and October that California state protection of pre-1972 sound recordings includes an exclusive right of public performance, the conventional wisdom seemed to be that the decisions would not stand for too long. The public policy ramifications were too great for the holdings to survive on appeal or through further litigation. But then in November, a federal court in New York came to the same conclusion, and all bets seemed off.

The background of the litigation and issues involved are discussed more fully in the above two links, but very briefly: Flo & Eddie, a corporation made up of two founding members of the Turtles, sued satellite radio provider Sirius XM in federal court in California, New York, and Florida for infringement of their public performance rights under state and common law. The major record labels sued Sirius XM in state court in California alleging the same. Flo & Eddie have so far been granted summary judgment on the issue in California and New York; the record labels have won approval of a jury instruction stating California law grants public performance rights in sound recording owners.

Sirius XM changed legal teams days after the New York decision. 1Note, though, that Sirius XM had already done the same for the California federal court litigation prior to the New York decision. The new team immediately moved for reconsideration in all three proceedings, calling attention to not-yet-cited precedent that it claimed stood for the proposition that pre-1972 sound recordings did not include an exclusive right of public performance.

The case it relied most fully on was RCA Mfg. Co. v. Whiteman, a Second Circuit decision from 1940. 2114 F.2d 86. Sirius also relies on Supreme Records, Inc. v. Decca Records, Inc., 90 F. Supp. 904 (S.D. Cal. 1950) in its California motions. Sirius also raises a Dormant Commerce Clause challenge in its motions, which I won’t discuss here. In Whiteman, a maker of records sought to restrain their broadcast by a radio station. 3Though Whiteman is captioned as the defendant here, he was actually the original plaintiff and performer on the records at issue; the court explains how, procedurally, he ended up being the defendant on appeal:

Before the action was brought Whiteman had filed a complaint against W. B. O. Broadcasting Corporation and Elin, Inc., to restrain the broadcasting of phonograph records of musical performances by Whiteman’s orchestra. By leave of court RCA Manufacturing Company, Inc., then filed the complaint at bar, as ancillary to Whiteman’s action, asking the same relief against W. B. O. Broadcasting Corporation and Elin, Inc., as Whiteman had asked in his action, and in addition asking that Whiteman be adjudged to have no interest in the records of his performances, because of contracts between him and itself. Whiteman thereupon discontinued his action, leaving only the ancillary action in which the judgment on appeal was entered.

The case is one of the earliest to address property interests in sound recordings, the technology itself still in its early stages—state law would not begin protecting sound recordings for two decades, federal law, three. 4US Copyright Office, Federal Copyright Protection for Pre-1972 Sound Recordings, 2011. Musical compositions—the underlying songs that are protected by copyright separately from sound recordings—have had public performance rights protected under federal law since 1897, but even then, it was only until the 1920s that courts recognized that public performance included broadcast by radio. 5Twentieth Century Music Corp. v. Aiken, 422 US 151, 158-59 (1975). The case was, in other words, decided when the law concerning sound recordings was quite primordial.

The Southern District Court of New York was the first to respond to the reconsideration motion from Sirius, and it did not sound happy. In a December 3rd order directing a response to the reconsideration motion from plaintiffs Flo & Eddie, the court said, “Whiteman plainly should have been addressed the first time around, and it must be dealt with now—it is, after all, a Second Circuit decision (albeit a pre-Naxos decision) discussing key issues in this case.” It concluded even more bluntly:

I will not accept reply papers; I will also not hold oral argument. I am well aware of the ramifications of my original ruling, which I did not reach lightly. But in the end, this court does not make policy; I deal in law. Sirius has had its say about the law; Flo & Eddie will weigh in in writing; and I will decide whether or not to reconsider my original ruling.

Two days later, the California state court, where the plaintiffs are the major record labels, considered the motion for reconsideration. The court did not change its original decision that California law recognizes a public performance right in sound recordings, though it did certify the question for interlocutory appeal. 6The California federal court denied to certify the same question for interlocutory appeal on November 20.

It made short work of the arguments from Sirius. It says “Whiteman was limited to New York common law” while the original decision here was based on the text and structure of California statutory law. In addition, it notes that Whiteman “was expressly disapproved in Capitol Records v. Mercury Records Corp.” which held that Whiteman‘s conclusion “is not the law of the State of New York.” The court was equally unpersuaded by Sirius’s reliance on Supreme Records v. Decca Records, a 1950 California decision that the court says “involved the imitation of particular arrangements of a song” rather than addressing “the issue of public performance rights in sound recordings.”

But the worst blow to Sirius’s morale was yet to come. On Friday, December 12, the New York court denied the motion for reconsideration in a remarkably devastating critique of the arguments advanced. It begins by noting, “Obviously Whiteman is a very old case, and does not represent any ‘intervening change of controlling law,’ so the argument must be that the Court’s failure to apply Whiteman constitutes ‘clear error.'” But, says the court, “The only clear error in this case is O’Melveny’s [Sirius’ counsel].” It continues:

Sirius’s former counsel had two perfectly good reasons not to argue the lack of any public performance right on the basis of Whiteman: (1) Whiteman does not hold that New York does not recognize a public performance right as part of the common law copyright in sound recordings; and (2) its actual holding – which is that the sale of sound recordings to the public constituted “publication,” which divested a creation of any common law copyright whatsoever – is no longer good law, and has not been for 60 years.

The court goes on to say that the crux of Whiteman was whether the sound recording was published, and therefore lost any rights it had. It notes that the court did not specify what exactly those rights were—whether they included a right to publicly perform or not. 7I would add that Whiteman appears to make a material error in its discussion. It says, “Copyright in any form, whether statutory or at common-law… consists only in the power to prevent others from reproducing the copy-righted work.” This is clearly not the case, since federal statute had provided a right of public performance to owners of dramatic compositions since 1856, nearly a century prior to Whiteman. In any event, the court adds, Whiteman has since been overruled by New York courts.

Sirius also asserted a Constitutional challenge to Flo & Eddie’s claims based on the Dormant Commerce Clause. The court’s clarity here concerning property and commerce is worth quoting:

Sirius does not dispute that the reach of the Dormant Commerce Clause is only to state actions properly characterized as “regulations.” Instead of explaining how liability for common law copyright infringement constitutes a regulation, Sirius dodges and misconstrues the issues.

The question is whether the law at issue – common law copyright – constitutes “regulation.” In the one case Sirius does cite applying the Commerce Clause to a judicial finding of liability the law involved [] a California statute requiring pre-approval for marketing cosmetic products. The cases holding that a law may violate the Dormant Commerce Clause because of its “practical effects” on interstate commerce each involved state liquor-pricing schemes. All of those state laws -pharmaceutical approval and liquor pricing laws – are classic instances of states exercising their regulatory power, and are very different from this case, where the issue is protection of property rights.

Protecting Flo and Eddie from the theft of its property is not “regulation”; a simple example illustrates the point. Suppose, instead of stealing Flo and Eddie’s property rights in the sound recordings, someone stole its company car, which was then used to operate an interstate taxi service. The Dormant Commerce Clause obviously would not bar Flo and Eddie from maintaining an action at common law for conversion of the car. And that would be true even though the action, and the return of the car and the end of the taxi service, would affect interstate commerce. State laws barring theft do not violate the Dormant Commerce Clause.

The court ultimately defers on certification of this issue for interlocutory appeal.

That leaves pending the motion for reconsideration in the California federal court (a proposed motion seeks hearing January 26, 2015) and the motion for summary judgment on the same issue in Florida.

Thus far, things have not gone well for Sirius. But it may be the case that the issues in the cases are resolved legislatively before they are resolved through litigation—the Copyright Office has already reported on federalization of pre-1972 sound recordings and taken up the issue in a recent round of public comments, and the House Judiciary Committee considered the issue during a two part hearing this past June. Proposed legislation that would bring these recordings within the compulsory license that Sirius relies on for digital performances of sound recordings (stopping short of full federalization) was introduced this past session.

Many sound recordings made before 1972 remain economically valuable, as this series of litigation demonstrates. At the same time, there are numerous issues remaining to be resolved if federalization is the goal. But in the interim, the recognition by several courts of the property rights of creators to the products of their intellectual labors is welcome.

References   [ + ]

1. Note, though, that Sirius XM had already done the same for the California federal court litigation prior to the New York decision.
2. 114 F.2d 86. Sirius also relies on Supreme Records, Inc. v. Decca Records, Inc., 90 F. Supp. 904 (S.D. Cal. 1950) in its California motions. Sirius also raises a Dormant Commerce Clause challenge in its motions, which I won’t discuss here.
3. Though Whiteman is captioned as the defendant here, he was actually the original plaintiff and performer on the records at issue; the court explains how, procedurally, he ended up being the defendant on appeal:

Before the action was brought Whiteman had filed a complaint against W. B. O. Broadcasting Corporation and Elin, Inc., to restrain the broadcasting of phonograph records of musical performances by Whiteman’s orchestra. By leave of court RCA Manufacturing Company, Inc., then filed the complaint at bar, as ancillary to Whiteman’s action, asking the same relief against W. B. O. Broadcasting Corporation and Elin, Inc., as Whiteman had asked in his action, and in addition asking that Whiteman be adjudged to have no interest in the records of his performances, because of contracts between him and itself. Whiteman thereupon discontinued his action, leaving only the ancillary action in which the judgment on appeal was entered.

4. US Copyright Office, Federal Copyright Protection for Pre-1972 Sound Recordings, 2011.
5. Twentieth Century Music Corp. v. Aiken, 422 US 151, 158-59 (1975).
6. The California federal court denied to certify the same question for interlocutory appeal on November 20.
7. I would add that Whiteman appears to make a material error in its discussion. It says, “Copyright in any form, whether statutory or at common-law… consists only in the power to prevent others from reproducing the copy-righted work.” This is clearly not the case, since federal statute had provided a right of public performance to owners of dramatic compositions since 1856, nearly a century prior to Whiteman.

Almost a month to the day after a California state court became the second court in this fall to recognize a public performance right for pre-1972 sound recordings, the Southern District Court of New York has held that New York State common law also recognizes such rights.

The court on Friday, November 14, 2014, denied satellite radio provider Sirius XM’s motion for summary judgment and ordered it to show cause why summary judgment should not be entered in favor of the plaintiffs Flo & Eddie, the corporation owned by two of the original members of the rock band the Turtles. It did so after concluding, among other things, that “general principles of common law copyright dictate that public performance rights in pre-1972 sound recordings do exist.”

As previously explained, Congress extended federal copyright protection to sound recordings in 1972, but only prospectively, meaning sound recordings made before 1972 would only be protected, if at all, under state and common law. Also, unlike musical compositions, Congress did not provide sound recordings owners with a public performance right under federal law, so a songwriter would get royalties when her song is played, for example, on the radio, but the performing artist would not.

Congress extended to sound recording owners a limited public performance right for digital audio transmissions in 1995. At the same time, it created a compulsory licensing scheme for such transmissions for satellite radio providers.

In recent years, Sirius XM began discounting the amount of royalties it paid under this compulsory license, proceeding under the basis that it didn’t have to pay royalties for performances of pre-1972 sound recordings under federal law.

The satellite provider faced a slew of lawsuits following that decision. SoundExchange, the organization that collects and distributes digital performance royalties under the compulsory license, filed a complaint August 2013 in federal court. A group of music labels sued Sirius XM in California state court in September 2013. And Flo & Eddie filed putative class action suits in California, New York, and Florida.

The Decision

Here, the Southern District Court of New York began its decision by noting that it was undisputed that Flo & Eddie have a common law copyright in their sound recordings. Under New York law, “artists can acquire a common law copyright in ‘any original material product of intellectual labor’—including sound recordings—by expending ‘time, effort, money, and great skill’ in its creation.” Sirius, however, argued that this right only covers reproduction and distribution, not public performance.

The court disagreed, noting initially that this argument has to be resolved by looking “to the background principles and history of New York copyright common law” rather than referring to the federal copyright act. And under the common law, New York has long recognized public performance rights for copyright owners of plays and films.

Sirius’s strongest argument is to ask why then, if recording artists and record labels had the exclusive right to publicly perform their works, they waited decades to assert that right. The court devotes considerable attention in response. First, it can’t infer that “the common law copyright in sound recordings does not encompass all of the rights traditionally accorded to copyright holders in other works” simply because this is the first case to raise the issue. The fact that participants in the recording industry had waited so long simply demonstrates a failure to act, not a lack of an enforceable common law right.

This judicial silence is not unique to the circumstances of this case. The court says, “The Supreme Court, for example, failed to grapple with many fundamental constitutional questions for the first 150 years of the Constitution’s existence.” It cites to the opinion from DC v Heller, where the majority observed that it “first held a law to violate the First Amendment’s guarantee of freedom of speech in 1931, almost 150 years after the Amendment was ratified, and it was not until after World War II that we held a law invalid under the Establishment Clause.” 1554 US 570, 625 (2008). Yet we wouldn’t say that proves we don’t have freedom of speech.

The court then turns the tables, saying

An arguably stronger argument can be made that years of judicial silence implies exactly the opposite of what Sirius contends—not that common law copyright in sound recordings carries no right of public performance, but rather that common law copyright in sound recordings comes with the entire bundle of rights that holders of copyright in other works enjoy. No New York case recognizing a common law copyright in sound recordings has so much as suggested that right was in some way circumscribed, or that the bundle of rights appurtenant to that copyright was less than the bundle of rights accorded to plays and musical compositions.

The court also points to federal law as supporting the argument that copyright in sound recordings includes an exclusive right of public performance, saying “if public performance rights were not part of the normal bundle of rights in a copyright, Congress would not have needed to carve out an exception specifically for sound recordings” when it extended protection to them in 1971.

Next, the court responds to the policy arguments raised by Sirius. The satellite provider argued that “affording public performance rights would not serve the underlying purposes of copyright law because pre-1972 recordings already exist and further rights cannot create incentives for the creation of new pre-1972 recordings.” But the court finds that this claim advances a far too narrow view of copyright under both New York and federal law, concluding that rewarding past creativity is just as proper a goal under either statutory or common law copyright as fostering future creativity.

Sirius also calls attention to the potential disruption and administrative difficulties that recognizing public performance rights for pre-1972 sound recordings under the common law could cause. The court is sympathetic to these policy arguments but ultimately unpersuaded.

Sirius may well be correct that a legislative solution would be best. But the common law, while a creature of the courts, exists to protect the property rights of the citizenry. And courts are hardly powerless to craft the sort of exceptions and limitations Congress has created, or to create a mechanism for administering royalties.

What’s Next

In the wake of this decision, Sirius replaced its legal team, which may indicate it is looking at shifting strategy. However, as noted above, two courts in California—state and federal—similarly concluded that California state copyright law includes an exclusive right of public performance for sound recording owners. That increases the likelihood that a decision recognizing such a right survives any potential appeal.

There remains a third lawsuit filed by Flo & Eddie against Sirius XM pending in Florida. Will the court there provide a clean sweep for public performance rights in pre-1972 sound recordings, or will it break rank from the California and New York courts? Even if it does the former (the likelihood of which has increased following the New York decision), I think the court is correct in suggesting “a legislative solution would be best.” Federalization would provide far more consistency in the protection of sound recording owners’ use and enjoyment of their rights; however, such a transition implicates a host of issues, some not readily apparent. The Copyright Office discusses many of these issues in its 2011 report on Federal Copyright Protection for Pre-1972 Sound Recordings. Both the Copyright Office and the House IP Subcommittee are already interested in addressing pre-1972 and other music-related copyright issues; this decision could only serve to motivate them further.

References   [ + ]

1. 554 US 570, 625 (2008).