Copyright, Content, and Platforms

Copyright, Content, and Platforms

A Darker Shade of Red Flags: Second Circuit Raises the DMCA Bar for Proving Internet Service Providers’ Knowledge of Copyright Infringement

Posted in Copyright Infringement

In a significant across-the-board victory for internet service providers hosting user-generated content (UGC), on June 16, 2016, the Second Circuit Court of Appeals issued its much anticipated decision in Capitol Records, LLC v. Vimeo, LLC.  The ruling reaffirmed and clarified the Digital Millennium Copyright Act (“DMCA”) safe harbor for hosting potentially infringing UGC when they are unaware of the infringement. The Court closed a major gap in the application of the DMCA to find that the safe harbor applies to pre-1972 sound recordings, an unresolved issue with conflicting results in district and state courts to date. The Second Circuit also held that, for a service provider to be disqualified from the safe harbor, the burden is placed squarely on the copyright holder to prove the service provider’s actual or red flag knowledge of specific copyright infringement obvious to an ordinary person, i.e., a non-lawyer, non-expert, and mere interaction by a service provider’s employees with user videos incorporating recognizable songs did not meet that bar. In a similar vein, the Court found that Vimeo employees’ mere suspicion that infringement was taking place on the site and sporadic incidents of alleged employee encouragement of user infringement, was insufficient to demonstrate Vimeo’s willful blindness and remove it from DMCA safe harbor protection.

Although most commentators have focused their attention on the significant impact of the Court’s pre-1972 recordings decision, the Court’s holdings on establishing proof of red flag knowledge and willful blindness are critical to service providers’ entitlement to the protections of the DMCA’s safe harbor and the long term viability of the UGC business model. This post focuses on the Court’s red flag knowledge and willful blindness rulings concluding with key takeaways for service providers. Continue Reading

A Circuit Split at Last: Ninth Circuit Recognizes De Minimis Exception to Copyright Infringement of Sound Recordings

Posted in Copyright Infringement

For the past 10 years, the Sixth Circuit Court of Appeals has stood alone in having addressed the issue of whether a de minimis amount of copying used in a song sample constitutes infringement of a copyrighted sound recording. While the Sixth Circuit’s admonition of “get a license or do not sample” has gained little traction in the district courts outside of the Sixth Circuit, neither did its sister circuit courts take the contrary position – until now.

On June 2, 2016, the Ninth Circuit held in VMG Salsoul, LLC v. Ciccone that a 0.23-second “horn hit” sampled from the song “Love Break” for use in Madonna’s song “Vogue” did not infringe the copyright in either the sound recording or the musical composition of the sampled song. Affirming the district court, the Ninth Circuit held that the de minimis exception to copyright infringement “applies to infringement actions concerning copyrighted sound recordings, just as it applies to all other copyright infringement actions.” Continue Reading

Supreme Court Clarifies Test for Fee-Shifting in Copyright Cases

Posted in Copyright

The Supreme Court on June 16 issued a unanimous ruling clarifying the test for awarding attorneys’ fees to successful copyright litigants.  The decision, in Kirtsaeng v. John Wiley & Sons, Inc., is sure to have lasting impact on how both plaintiffs and defendants weigh the risk of litigating a copyright case to completion.

BACKGROUND

The underlying facts are fairly straightforward.  Kirtsaeng was a Cornell graduate student who learned that foreign versions of certain textbooks were sold at lower prices than identical versions in the U.S.  Seeing an opportunity, Kirtsaeng bought lawful copies of the books overseas and then shipped them to the U.S., where he sold them for less than the publisher’s U.S. price, pocketing a nice profit.

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Court of Appeals Upholds FCC’s Net Neutrality Rules and Regulatory Authority

Posted in Uncategorized

On June 14, 2016, the D.C. Court of Appeals ruled 2-1 in favor of the Federal Communication Commission’s (FCC) net neutrality rules, which the commission approved on February 26, 2015 (published March 12, 2015). This reclassified broadband internet access service (BIAS) as a telecommunications service under Title II of the Communications Act, affording the FCC greater regulatory authority over Internet Service Providers (ISPs) or BIAS providers. In response to the reclassification, the United States Telecom Association, a trade group representing various telecomm giants, joined by other companies and groups, filed a Protective Petition for Review of FCC’s net neutrality rules.

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Oracle v. Google: Are Juries Equipped To Decide Fair Use?

Posted in Copyright, Copyright Infringement, Fair Use

If you’re in the high-tech industry and are sued for copyright infringement, there are two words you need to remember (in addition to the phone number of your attorney, of course). Those two words are “fair use.”

This week, we were once again reminded of the increasing willingness of courts – and now juries – to “excuse” otherwise infringing conduct because the defendant’s use of the plaintiff’s copyrighted work resulted in the creation of new works or advances not contemplated by the plaintiff/copyright owner. In Oracle v. Google, a San Francisco jury found that Google’s unauthorized use of some 11,000 lines of Oracle’s copyrighted Java open-source code in Google’s Android mobile phone operating system was fair use.

Anyone familiar with copyright law knows that the fair use determination is fraught with ambiguity and uncertainty. The fair use determination is different from a finding of no infringement. Indeed, courts typically will not consider the issue of fair use unless the defendant’s conduct would otherwise be considered infringing. Unfortunately, neither Congress nor the courts have provided any clear guidelines or standards for deciding when the defendant’s use will qualify as fair use. Copyright scholars have long expressed frustration at trying to pin down the meaning of fair use – although perhaps none so eloquently as Professor Paul Goldstein of Stanford Law School:

Fair use is the great white whale of American copyright law. Enthralling, enigmatic, protean, it endlessly fascinates us even as it defeats our every attempt to subdue it. Continue Reading

Is Paramount Going Where No Copyright Holder Has Gone Before?

Posted in Copyright

Hollywood is often referred to as the land of make-believe. A federal lawsuit working its way through a Los Angeles federal court may decide the extent to which what Hollywood “dreams up” for its motion pictures and television shows is entitled to copyright protection. The case is Paramount Pictures Corp. v. Axanar Productions Inc., et al., in which a motion picture studio is seeking to prevent a Star Trek fan from producing his own works (which the defendant refers to as “mockumentaries”) incorporating characters, uniforms and other story elements from the Star Trek television and motion pictures series. What makes this case noteworthy is that Paramount raises an issue that has never been squarely decided by any court—which is whether Paramount’s copyrights in the Star Trek series extend to the Klingon language that Paramount created for the series.

As even casual viewers of the Star Trek series will recall, many of the adventures involved the crew of the U.S.S. Enterprise battling the Federation’s arch enemy, the Klingon Empire. What viewers may not know is that Paramount was not content merely to use made-up sounds for the language spoken by the Klingons. Instead, Paramount hired a linguistics professor who ultimately developed the underlying grammatical features and vocabulary necessary to create an entire Klingon language. With Paramount’s consent, the linguistics professor published the first Klingon dictionary in 1985.  Continue Reading

New Cop on the Block – FCC’s Proposed Data Privacy and Security Rulemaking for Broadband Internet Access Providers

Posted in Cybercrime, Data Breaches

In 2015, the Federal Communications Commission (FCC or global Commission) issued its Open Internet Order, applying Section 222 of the federal Communications Act to broadband Internet access services (BIAS), and in doing so took jurisdiction over privacy and data security matters for Internet Service Providers (ISPs). In doing so, it declined requests by some advocacy groups to take jurisdiction over online service providers that do not offer broadband access, even if they offer services that, in ways, arguably look like a communications provider – so-called “edge networks” like Facebook, Google, and Yahoo!. Indeed, doing so would have stretched the global Commission’s jurisdiction even beyond the significant expansion required to regulate BIAS.  Having taken on BIAS, the commission needed to address that the FCC’s privacy and data protection regulatory scheme was designed to address traditional telephone carriers, and the expanded jurisdiction necessitated refinement of the approach to address BIAS and the different kinds of data involved between data services and telephonic services. On March 31, 2015, the FCC issued a Notice of Proposed Rulemaking (NPRM) in proceeding 16-39 (In the Matter of Protecting the Privacy of Customers of Broadband and other Telephonic Services) for the privacy and data security regulatory scheme for ISPs, a copy of which is available here. In short, the proposal would create a very burdensome privacy protection scheme that applies to BIAS but to no other types of online services. As a result, BIAS providers will have a much more difficult time providing interest-based advertising and other services that take advantage of big data, even if in doing so they can provide consumers lower-cost broadband. Much of the proposal calls for express opt-in consent to ancillary use and sharing of consumer data, but the Commission questions whether some practices like exchanging discounts for consent should be banned outright.

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DAA Issues Inaugural Enforcement Action for Compliance with Mobile App Guidelines

Posted in Advertising, Privacy

In a prior post we noted the Digital Advertising Alliance’s (DAA) intention, late last year, to begin enforcement of the Application of Self-Regulatory Principles to the Mobile Environment (Mobile App Guidelines), which apply to all participants in the mobile advertising ecosystem. The DAA recently followed through on this promise by issuing its inaugural enforcement decision under the Mobile App Guidelines through the Online Interest Based Accountability Program (Accountability Program). Previously, the Accountability Program had only issued enforcement decisions related to servinginterest-based advertisement on websites.

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Mobile Apps That Appeal to Children Face Increased Regulatory Scrutiny

Posted in FTC

In September 2015, the Online Interest-based Advertising Accountability Program (Accountability Program) of the Advertising Self-regulatory Council (ASRC) began enforcing the Digital Advertising Alliance (DAA) Guidelines for Mobile Advertising (Mobile Guidance) and now the inevitable has happened: the Accountability Program has issued three compliance decisions with mobile app publishers whose apps allegedly failed to comply with the Mobile Guidance. Two of those decisions, the Bearbit Studios decision and the Top Free Games decision, reinforce the heightened duties that mobile app publishers take on when developing mobile apps that appeal to children under 13 (children). For more information on the third decision, the Spinrilla decision, and the Accountability Program’s stance on cross-app enhanced notice and precise location data, see our companion post here.

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How Will the Supreme Court Function With the Varsity Brands Test?

Posted in Copyright, Copyright Act, Copyright Protection

On Monday, the Supreme Court announced it had agreed to review the Sixth Circuit’s copyright decision in Star Athletica v. Varsity Brands, which involves the issue of whether certain designs appearing on cheerleading uniforms are copyrightable or are instead non-copyrightable functional elements that are an inherent part of cheerleading uniform designs. In a split decision, the Sixth Circuit Court of Appeals reversed the district court and ruled that the use of “stripes, chevrons and color blocks” were copyrightable despite the Copyright Act’s prohibition against extending copyright protection to “useful articles.” Though the majority and dissent disagreed on whether these design elements were copyrightable, both seemed to agree that in light of the different and sometimes conflicting approaches adopted by various courts of appeal for distinguishing between an object’s utilitarian and copyrightable elements, “the law in this area is a mess” and intervention by the Supreme Court is necessary.

The Varsity Brands case presents the issue of distinguishing between copyrightable and utilitarian elements in the already controversial context of dress and fabric designs. Courts have long struggled over whether a garment’s decorative elements serve purely ornamental functions or enhance and become indistinguishable from the garment’s utilitarian function of serving as appropriate attire for a particular purpose or occasion. Star Athletica’s petition for certification focused on the need for direction as to which of at least 10 tests used by courts and commentators should be applied. However, the Sixth Circuit’s majority and dissenting opinions illustrate that whether a particular design feature will be found to be copyrightable largely turns on two issues: (1) how the garment’s “function” is defined and (2) how strictly courts will enforce the Copyright Act’s requirement that in order to be copyrightable, the nonutilitarian design feature must be “separable from and . . . capable of existing independently of, the utilitarian aspects of the article.” 17 U.S.C. § 101 (definition of “pictorial, graphic, and sculptural works.”).  Continue Reading