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Copyright

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09/20/2024
Stephen Carlisle

On September 13, 2024, a Federal Court Judge issued summary judgement against Donald Trump and his campaign in the long running copyright infringement dispute with Barbadian based musician Eddy Grant over the Trump campaign’s use of Grant’s song “Electric Avenue” in a Trump campaign video. 1 I have been following this case for a long time and have blogged about it previously. 2 To anyone who read the Judge’s initial ruling on Trump’s Motion to Dismiss, the ruling against Trump should not be surprising. The only real surprise is why the case got this far.

As I suggested in my previous blog post, the case should have quickly been settled. Yet for whatever reason, including Trump’s own pugnacious personality, it was not, and now it will cost him. According to the complaint, Grant is seeking $300,00 in statutory damages, the maximum for infringement of not only the song “Electric Avenue” but sound recording as well. 3 The attorney’s fees, for four years of litigation, will easily top the amount of damages. And Trump is personally liable for both amounts.

“It’s everything we asked for,” one of Grant’s lawyers, Brett Van Benthysen, told Business Insider. “100%.” 4

The real question is why litigate? This crops up time and time again in copyright cases, where copyright defendants take to the costly step of litigating such malleable issues as “fair use” when a simple settlement, or license fee for that matter, would resolve the issue once and for all and make it go away, for a lot less money. And for Trump, the result is the prospect of a very large judgment against him, creating a lot of negative publicity around him at a time when negative publicity is very much not in his best interest. To which we can add the recent injunction granted against Trump for his use of “Hold On, I’m Comin” and a lawsuit filed by The White Stripes over use of the song “Seven Nation Army.” 5

As I noted three years ago:

Many times, an [infringement claim] occurs when songs are used at campaign rallies. The composers feel that this is an implied endorsement. The campaigns usually rely on a license from the performing rights organizations. However, sometimes the use is in a campaign video, and since this is a “synchronization” use, it absolutely requires a license and absolutely requires permission, even in the internet age. 6

To this, Trump trots out the same fair use argument that got pummeled in the Court’s rejection of his Motion to Dismiss. Indeed, large sections of the Court’s opinion on summary judgement could have been cut and pasted from its previous ruling. For the fine details of that ruling, I invite you to read my previous blog post. 7

The only new matter Trump brings to the Court is the contention that the “Electric Avenue” sound recording was not properly registered with the U.S. Copyright Office.

Interestingly enough, there is no discussion about whether the “Electric Avenue” sound recording had to be registered with the Copyright Office in the first place. Eddy Grant was born in Ghana, raised in the UK, and presently resides in Barbados, 8 and as such is protected by the Berne Convention.

In that situation, according to the expert folks at the Copyright Alliance:

“A foreign author may bring a copyright infringement action in a U.S. district court without registering his or her work with the U.S. Copyright Office. However, a foreign author must register his or her work with the U.S. Copyright Office in order to obtain certain statutory benefits that are provided under the 1976 Copyright Act, such as the presumption of validity and the ability to claim statutory damages and attorney’s fees in an infringement action.” 9

So, Grant’s lawsuit would have been sustainable in any event. The real crux would be his ability to ask for statutory damages and attorneys fees, which he clearly is asking for.

Now, while the song “Electric Avenue” was registered for copyright in the U.S. in 1983, 10 it does not appear that the sound recording was registered until many years later. “Electric Avenue” was recorded at Grant’s studio in Barbados and he is the sole musician on the recording, so the sound recording copyright unquestionably belongs to him. The sound recordings rights to “Electric Avenue” (amongst others) were licensed to Warner Music UK in 2001 for a five-year period, and for a territory which included the United States. 11 During this agreement, a “Greatest Hits” compilation was released which included “Electric Avenue.” This collection of sound recordings was registered with the U.S. Copyright Office in 2002. 12 The license agreement expired in 2006, by which all rights reverted to Grant. 13

For his part, Trump contends the “Greatest Hits” registration was insufficient to register the component part of “Electric Avenue.” All of these arguments fail.

The Court cites to previous Second Circuit precedent that held:

“a publisher that filed collective works copyright registrations for issues of its magazine would have thereby obtained copyright registration for…the articles contained in the issue if the publisher owned the copyrights for those articles.” 14

The Court also notes that:

“[Trump argues] that the registration for a collective work does not include the registration for any previously published part but have failed to point out any case that supports that position.” 15

Not a good strategy.

Also in his answer, Trump asserted that he had “absolute presidential immunity” from Grant’s lawsuit. 16 This argument was apparently so ridiculous that it didn’t even merit discussion in the summary judgement opinion.

But once again, why litigate this issue when a quick settlement and a much smaller fee would have made the entire matter disappear from the public eye? Further, why not take the video down after the cease and desist letter? Why wait until a lawsuit is filed until the video is removed from the public eye?

I’m not alone in this thought. As my colleague David Newhoff wrote at the Illusion of More website:

“When I wrote about the Grant v. Trump copyright case on October 1, I was wrong about one thing:  that Team Trump would quickly settle the matter as a relative storm in a teacup within the legal tornadoes swirling around the ex-president.” 17

Even the website Torrent Freak wondered:

“In an ideal world, the failure of Trump’s motion to dismiss in September 2021 should’ve been seen as an opportunity to settle the case privately.

A very small slice of humble pie and some tea, perhaps, so that everyone could move on. Or even negotiating the terms of the settlement Grant offered in August 2020 before filing the lawsuit.” 18

And as a high-profile individual that once published a book under his name about “The Art of the Deal,” Trump should have known that “The Art of No Deal” can be much costlier.

No Subjects
09/17/2024
profile-icon Dr. Piya Chayanuwat

Many headlines were generated on September 24, 2021, when Marvel Characters, Inc. filed a series of lawsuits against many former Marvel Comics illustrators.1 The suits, filed in New York and Los Angeles, all have the same basic fact pattern and asked for the same relief. The suits sought a declaratory decree that the termination notices served on Marvel by the authors and heirs of the former Marvel illustrators were invalid. At stake are the characters Iron Man, Spider-Man, Daredevil, Ant-Man, Hawkeye, Dr. Strange, Black Widow, Falcon, Thor and more.2

When the Copyright Act was re-written, eventually enacted in 1976, for the first time, the right of an individual author to terminate a grant of copyright, and reclaim ownership, was added. But to make matters even more confusing, there were two different termination schemes enacted, one for post-1978 grants3 and one for pre-1978 grants.4 Yet, both systems have the same legal trap, the author cannot terminate a work that was prepared as a “work made for hire.” That is the central dispute in the suits that were filed. Yet, what constitutes a work made for hire after 1978, is largely governed by the Copyright Act. For pre-1978 works, it is largely a question of court decisions on the topic. Unfortunately for the Marvel illustrators, the case law does not favor their position.

The case law on the subject indicates that a pre-1978 creative work is “made for hire” when it is prepared at the “instance and expense” of the hiring party. This is the rule in the Second, Ninth and Fifth Circuits, and cited as controlling by a Bankruptcy Court ruling involving, interestingly enough, Marvel Comics.5

“If the employer can meet its burden to show some credible evidence that an employee worked at the ‘instance and expense’ of the employer, then the court will presume that the employer holds the copyright to the material produced.”6

The Second Circuit defines “instance and expense” as “when the ‘motivating factor in producing the work was the employer who induced the creation.’”7

The Fifth Circuit adds that another factor is “whether the employer had the right to direct and supervise the manner in which the work was being performed. Actual exercise of that right is not controlling, and copyright is vested in the employer who has no intention of overseeing the detailed activity of any employee hired for the very purpose of producing the material.”8

According to the Second Circuit: “[t]he ‘expense’ component refers to the resources the hiring party invests in the creation of the work. We have, at least in some cases, continued the tradition of treating the incidents of a traditional employment relationship as relevant to the analysis. (Citation omitted) We have, moreover, suggested that the hiring party’s provision of tools, resources, or overhead may be controlling…In other cases, however, we seem to have focused mostly on the nature of payment: payment of a ‘sum certain’ suggests a work-for-hire arrangement; but ‘where the creator of a work receives royalties as payment, that method of payment generally weighs against finding a work-for-hire relationship.’”9

The last quote is telling, as it came in a lawsuit bearing what Marvel calls “virtually identical circumstances,” Marvel Characters, Inc. against former Marvel illustrator Jack Kirby.

That case described in detail “The Marvel Method”:

“Under the Marvel Method, [Stan] Lee would not write a detailed script for a story before assigning an artist to draw it. Instead, at a ‘plotting conference,’ or in a ‘plot outline,’ Lee gave the artist the general contours of the story he had in mind: an outline of the plot, a description of the hero, and suggestions for how the story should look. The artist would draw the story along the lines of Lee’s ‘main theme.’ After an artist completed the pencil drawings, Lee edited his work and added dialogue and captions. Use of the Marvel Method allowed Lee to keep multiple artists working on assignments simultaneously.”10

Here’s where it starts to get sticky. Stan Lee was certainly an employee of Marvel. Whatever his contributions to the creation of a character were certainly works for hire which would remain with Marvel. Even though individual authors can terminate individual author’s shares, the questions then become “who created what” and “is this still relevant today”?

Let’s take Daredevil for example. His original costume was yellow. Who decided to change it to all red? So does the termination notice apply to “yellow” Daredevil or “red” Daredevil?

Or let’s look at Iron Man, whose suit of armor and look have changed vastly over the years:

Does the termination only apply to the original Iron Man? Who gets authorship over the changes? Or, let’s take on the character of Tony Stark. For the most part, Stark has been Iron Man. Sometimes Iron Man has been other characters, most notably James Rhodes.11

This is important because despite termination, Marvel gets to keep the derivative versions of the character made while they held the copyright.12

And then we get to the problems of proof on these issues. Stan Lee is dead. So are Gene Colan, Don Heck and Don Rico.13 Stan Lee was deposed extensively in the Jack Kirby litigation, but these may not have any bearing on the creation of Iron Man or Spider-Man. While it is true that Marvel as Plaintiff has the burden of proof, how are the various defendants going to introduce evidence to the contrary?

Then there is the ruling on how “the Marvel Method” results in a decision of “work made for hire.”

“In the work-for-hire context, ‘an essential element of the employer-employee relationship is the right of the employer to direct and supervise the manner in which the [artist] performs his work.’ (citation omitted) If the hiring party ‘took the initiative in engaging [the artist]’ and had ‘the power to accept, reject, or modify her work, then the work is a work for hire. (citation omitted) It is undisputed that at all times between 1958 and 1963 Lee had complete editorial and stylistic control over all work that Marvel published…. If Lee did not approve of the artist’s work, it was not published. (citation omitted) Kirby was no exception. Lee edited Kirby’s work and reviewed and approved all of his work prior to publication. (citation omitted) Lee’s testimony is consistent with the recollection of Kirby’s daughter, Susan Kirby, who testified that Lee asked her father to ‘redo pages.’ (citation omitted) Neal Kirby testified about one instance where Lee rejected a ‘cover’ created by Kirby.”14

In affirming, the Second Circuit wrote:

“Understood as products of this overarching relationship, Kirby’s works during this period were hardly self-directed projects in which he hoped Marvel, as one of several potential publishers, might have an interest; rather, he created the relevant works pursuant to Marvel’s assignment or with Marvel specifically in mind. Kirby’s ongoing partnership with Marvel, however unbalanced and under-remunerative to the artist, is therefore what induced Kirby’s creation of the works…Marvel’s inducement, right to supervise, exercise of that right, and creative contribution with respect to Kirby’s work during the relevant time period is more than enough to establish that the works were created at Marvel’s instance.”15

As to the “expense” prong:

“The facts underlying the expense component are not in dispute. Marvel paid Kirby a flat rate per page for those pages it accepted, and no royalties. It did not pay for Kirby’s supplies or provide him with office space. It was free to reject Kirby’s pages and pay him nothing for them. The record contains anecdotal evidence that Marvel did in fact reject Kirby’s work or require him to redo it on occasion, if less often than it did the work of other artists, but with what frequency is unclear… In the final analysis, then, the record suggests that both parties took on risks with respect to the works’ success—Kirby that he might occasionally not be paid for the labor and materials for certain pages, and Marvel that the pages it did pay for might not result in a successful comic book. But we think that Marvel’s payment of a flat rate and its contribution of both creative and production value, in light of the parties’ relationship as a whole, is enough to satisfy the expense requirement.”16

Given that the facts surrounding the current dispute are bound to be the same, how does the Marvel illustrator’s cases succeed?

According to the Marvel illustrator’s attorney, “At the core of these cases is an anachronistic and highly criticized interpretation of ‘work-made-for-hire’ under the 1909 Copyright Act that needs to be rectified.”17

Except that in this instance the appellate court in both jurisdictions where the suits have been filed have both affirmed the “instance and expense” test.

And if they succeed, what do they get? Certainly not total ownership of the copyrights at issue, since, as noted, Stan Lee was definitely an employee of Marvel. Co-ownership?

Co-ownership of a copyright means all parties own the copyright equally. And being a co-owner means that you can license a work without the permission of the other co-owners, subject to your duty to account for all the compensation one would receive. Could this happen?

Doubtful. The movie business is not like other businesses and thrives on exclusivity. Would a movie company really make a deal for one of the Marvel characters knowing that they would not have exclusive rights and that Disney would in essence be looking over their shoulder?

All likely outcomes point to a settlement at some point. This is what happened to the Kirby case even after the affirmance by the Second Circuit.18

Notes:

  1. The suits are Marvel Characters Inc. v Lieber, 21-cv-7955; Marvel Characters Inc. v Ditko, 21-cv-7957; and Marvel Characters Inc. v Dettwiler, 21-cv-7959, all in U.S. District Court, Southern District of New York (Manhattan); Marvel Characters Inc. v Solo, 21-cv-5316, U.S. District Court, Eastern District of New York; and Marvel Characters Inc. v Hart-Rico, U.S. District Court, Central District of California (Los Angeles.)
  2. Marvel Suing to Keep Rights to ‘Avengers’ Characters From Copyright TerminationMarvel Sues to Prevent Losing Copyrights to ‘Avengers’ CharactersDisney sues former Marvel artists over Iron Man and Spider-Man rights
  3. 17 USC 203
  4. 17 USC 304(c)
  5. In Re: Marvel Entertainment Group 254 B.R. 817 (D. Del 2000)
  6. Id. at 828
  7. Sigel v. National Periodical Publications 508 F.2d 909 (2d. Cir.1974) at 914
  8. Murray v. Gelderman, 566 F.2d 1307, 1310 (5th Cir.1978) at 1310
  9. Marvel Characters Inc.v. Kirby 726 F.3d 119 (2d. Cir. 2013) at 140
  10. Marvel Worldwide v.Kirby 777 F.Supp. 2d 720 (SDNY 2011) at 732
  11. Wikipedia – Iron Man
  12. 17 USC 304 (c) (6) (A)
  13. Disney sues former Marvel artists over Iron Man and Spider-Man rights
  14. Marvel Worldwide v.Kirby 777 F.Supp. 2d 720 (SDNY 2011) at 740
  15. Marvel Characters Inc.v. Kirby 726 F.3d 119 (2d. Cir. 2013) at 141
  16. Id. at 142
  17. Disney sues former Marvel artists over Iron Man and Spider-Man rights
  18. Id.
No Subjects
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08/30/2024
Stephen Carlisle

Appellate Court Rules That “Sophisticated Plaintiffs” Are Entitled to Equal Protection Under the Copyright Laws

It’s one of those principles that should not need to be debated: people are entitled to equal protection under the law. Yet strangely, one Federal Court went out of its way to penalize a litigant, because they were a “sophisticated copyright litigator” causing the dismissal of the case. Now, the Second Circuit has reversed this erroneous decision, stating “[t]here is no ‘sophisticated plaintiff’ exception to the discovery rule or to a defendant’s burden to plead and prove a statute of limitations defense.”

The Plaintiff here is Michael Grecco Productions, Inc., the business arm of photographer Michael Grecco. In an appendix filed with the case, it was claimed that MGP had filed more than 100 copyright lawsuits. Why this matters is beyond me. Anyone with a clear mind knows that the internet is a cesspool of copyright infringing material, with photographers taking the brunt of the injuries. According to the website Torrent Freak, Google processed over one BILLION takedown notices in the first four months of 2024 alone. 2 One hundred lawsuits is not even a drop in the ocean.

This legal squabble arises because the defendant here claims that MGP’s lawsuit was filed too late and thus barred by the statute of limitations under Section 507(b). The question arose as to the proper time using the “discovery” rule. The Court below ruled that MGP’s “relative sophistication as an experienced litigator in identifying and bringing causes of action for unauthorized uses of Grecco’s copyrighted works leads to the conclusion that it should have discovered, with the exercise of due diligence, ‘Davis’s alleged infringement ‘within the three-year limitations period.’” 3

Rather than trying to amend its complaint, MGP stood by its original filing and the Court dismissed the case. MGP filed an appeal. The second Circuit made quick work of the District Court’s reasoning.

“Although the district court claimed to apply the discovery rule, its calculation actually employed the injury rule; it started the three-year clock when the infringement allegedly began, while also implying that some extension of time might be available if MGP was unable to discover the infringement within those three years. In essence, the calculation incorrectly reflected the discovery rule as an equitable extension and not the rule of accrual.” 4

“MGP filed its complaint on October 12, 2021. Thus, to be timely, MGP must have been unable, with the exercise of due diligence, to discover the infringing activity prior to October 12, 2018, three years before the complaint was filed. [Citation omitted] By contrast, the district court held that MGP “must have been unable, with the exercise of due diligence, to discover the infringing activity prior to August 16, 2020, three years after the infringing activity allegedly began.” 5

“Although the district court claimed to apply the discovery rule, its calculation actually employed the injury rule; it started the three-year clock when the infringement allegedly began, while also implying that some extension of time might be available if MGP was unable to discover the infringement within those three years. In essence, the calculation incorrectly reflected the discovery rule as an equitable extension and not the rule of accrual.” 6

In simpler terms, for purposes of the Copyright statute under the “discovery rule,” the three-year term runs from when the suit is filed and looks backward. Did the Plaintiff know, or with the exercise of due diligence, reasonably know, or should have known about the infringement more than three years from the date of filing of the lawsuit?

And (in the words of Frank Zappa) here’s the crux of the biscuit: does the sophistication of the Plaintiff matter at all in assessing the “should have known” portion of the test? The answer is no.

“In the context of the Copyright Act’s three-year limitations provision, the discovery rule is the rule of accrual, not an equitable tolling or estoppel doctrine. The discovery rule is not an exception to the injury rule that only applies to some infringement claims; it is not a benefit for which only some plaintiffs qualify. Rather, ‘the discovery rule, not the injury rule’ determines, in the first place, when a copyright infringement claim accrues.” 7

“This ‘sophisticated plaintiff’ rationale has no mooring to our cases. First, to the extent this rationale arose out of treating the discovery rule as an equitable doctrine for which only some plaintiffs in some circumstances will qualify, it is wrong. As already noted, because we have previously determined that the discovery rule is Congress’s intended rule of accrual for civil actions under the Copyright Act, it is the rule in every such action and not an equitable exception to the injury rule.” 8

“Second, to the extent the district court’s rationale recognizes the discovery rule as one of accrual, but nevertheless suggests different rules of accrual for different plaintiffs—the discovery rule for copyright holders not sophisticated in detecting and litigating infringements, but the injury rule for copyright holders who are—it also is wrong. We have never understood the Copyright Act to employ different rules of accrual for different plaintiffs. The Supreme Court has made clear that the Act’s “clock is a singular one.” 9

“Third, even if the district court’s ‘sophisticated plaintiff’ rationale is merely a presumption that sophisticated plaintiffs can discover infringements immediately or nearly so, such that the date of earliest diligent discovery would always be the date of injury (or approximately so), the rationale remains flawed. A plaintiff’s ‘sophisticated’ nature does not automatically relieve a defendant of her burden to plead and prove a Copyright Act limitations defense… A sophisticated plaintiff may well discover an infringement sooner than their less practiced neighbor. But the answer to the discovery question turns on due diligence—the fact-intensive inquiry of the copyright holder’s efforts to discover the infringement. An overly simplified ‘sophisticated plaintiff’ presumption is antithetical to the nature of the task.” 10

And there you go. Equal protection under the law.

Notes:

  1. Michael Grecco Productions Inc. v. RADesign, Inc. 2024 WL 3836578, 2d Cir. Court of Appeals 2024
  2. Google Search Processed a Billion DMCA Takedowns in Four Months
  3. Michael Grecco Productions Inc. at 2
  4. Id. at 4
  5. Id.
  6. Id.
  7. Id.
  8. Id. at 5
  9. Id.
  10. Id.
No Subjects
06/07/2024
Stephen Carlisle

The late Sonny Bono now adds his name to another chapter of copyright law. The first, of course, was the Sonny Bono Copyright Term Extension Act, The Shocking Truth Behind the Passage of the Sonny Bono Copyright Extension! (Is That It's Not Really Shocking) which extended copyright protections for an additional 20 years. Now, his name gets attached to a very novel copyright fight: can the copyright termination provisions of Section 304 trump the terms and conditions of a State marital property settlement agreement? The facts of the case are simple and largely not in dispute. Sonny Bono was half of the very popular 1960's musical group "Sonny and Cher,"[ref]Wikipedia - Sonny Bono[/ref] who in the 1970's had their own TV Variety Show.[ref]Wikipedia - Sonny Bono[/ref] After their divorce, Cher became the far more popular and successful of the duo and is better known to modern audiences than Sonny. Indeed, Cher is so popular that she is now legally known only as "Cher" as the headings to this case indicate.[ref]Cher v. Mary Bono LA Cv21-08157 JAK (RAO) U.S. District Court for the Central District of California (Slip Opinion)[/ref] Sonny went into politics before dying in a skiing accident in 1998.[ref]Wikipedia - Sonny Bono[/ref] The epitaph on his gravestone is "And the Beat Goes On," a nod to Sonny and Cher's 1967 hit single "The Beat Goes On."[ref]The Beat Goes On (Sonny & Sher song)[/ref] As a result of their 1978 divorce, Sonny agreed that Cher would continue to receive "an undivided 50% interest" in the continuing royalties derived from sales and performances of their songs, less an administrative fee.[ref]Cher v. Mary Bono LA Cv21-08157 JAK (RAO) U.S. District Court for the Central District of California (Slip Opinion)[/ref] In 2016, Sonny's widow Mary Bono served termination notices under section 304(c) of the Copyright Act to reclaim ownership of Sonny copyrights on "various music publishers to which Sonny had granted a transfer or license of copyright in musical compositions that had authored or co-authored."[ref]Id. at 2[/ref] When the termination notices took effect, Mary stopped paying the royalties to Cher and in 2021 informed her that she no longer was entitled to any further royalties under the Marital Settlement agreement.[ref]Id. at 2-3[/ref] Cher sued in 2021 for declaratory judgement that "the notice of termination does not affect her royalty rights or approval rights under the [Marital Settlement Agreement]."[ref]Id. at 9[/ref] Both sides moved for summary judgement. On May 29, 2024, the District Judge sided with Cher, ruling that the MSA entitled Cher to a royalty stream, not necessarily an ownership interest in the copyrights themselves to which Section 304(c) termination would apply. "Consequently, Plaintiff's rights under the MSA are linked to the musical compositions and Sonny's corresponding property interests. Because in granting the royalty and approval rights at issue, the MSA did not refer to a "grant of a transfer or license" of the underlying copyrights, Plaintiff's rights under the MSA arise solely under state law. Further, because section 304(c) expressly provides that it "in no way affects rights arising under any other Federal, State, or foreign laws" (Citation Omitted) the Notice of Termination cannot affect Plaintiff's contractual right to receive financial compensation in exchange for the release and permanent discharge of any and all claims arising out of her marital relationship with Sonny. Notwithstanding the plain language of the MSA, Defendant argues that, under 17 U.S.C. § 304(c)(5), "[t]ermination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant," and the MSA constitutes such an "agreement to the contrary." (citation omitted) However, the only rights that are terminable under section 304(c) are copyright grants. (citation omitted). Therefore, an "agreement to the contrary" under section 304(c)(5) is only a "contractual device that purports to divest" authors and successors of the right to "terminate copyright assignments." (citation omitted) Because the MSA does not refer to the underlying copyrights, it did not affect the ability of Sonny's heirs to terminate the copyrights. Therefore, it is not an "agreement to the contrary."[ref]Id. at 10-11[/ref] In rendering this decision, the Judge has side-stepped one of the more thorny issues of copyright law: marital community property. Under the laws of States that recognize "community property," all assets acquired during the marriage belong equally to the parties to the marriage. This would include all copyrights to works created by one of the spouses during the marriage. So here, absent an agreement, Cher would be a 50% owner of all of Sonny's copyrights due to the laws of community property. What the MSA agreement did was merely formalize this into an agreement where Sonny would keep 100% of the ownership of the copyrights, subject to Cher's right to receive 50% of all future income. If the Judge were to side with Mary Bono, it would mean that parties to a divorce proceeding could agree to a similar arrangement, only to have one party renege on that agreement years later, using the Copyright Act termination provisions of section 304. "The MSA … assigned to Plaintiff a right to the "contingent receipts ... from musical compositions and interests therein" in exchange for the release of "any and all claims ... arising out of the marital status of the parties." (citation omitted) Consequently, the conclusion "that an author-spouse in whom a copyright vests maintains exclusive managerial control of the copyright but that the economic benefits of the copyrighted work belong to the community while it exists and to the former spouses in indivision thereafter ... is consistent with both federal copyright law and [California] community property law and is reconcilable under both."[ref]Id. at 11[/ref] So, the beat goes on – and so do the royalty payments.

No Subjects
05/16/2024
Stephen Carlisle

On May 9, 2024, the Supreme Court definitively ruled that damages in a copyright infringement suit were unlimited. In other words, as long as the suit was timely filed, damages for infringement could be recovered, no matter how old they might be.[ref]Warner Chappel Music, Inc. v. Nealy 2024 WL 2061137[/ref] What they failed to answer was when a copyright lawsuit was "timely filed." The case arose from a copyright lawsuit brought by Sherman Nealy against Warner Chappel Music and other defendants. He claims his works were infringed multiple times dating back to 2008.[ref]Id. at 3[/ref] Normally, one must file suit within three years from when the claim "accrues."[ref]17 USC 507 (b)[/ref] The question is, when does the claim accrue? There are two different rules applied by the Courts. The first is three years from when the infringement starts. The other is the "discovery" rule: that the claim accrues when the copyright owner knows or should have known that an infringement has occurred. As to this case, the Plaintiff has a pretty good excuse for not knowing about the infringements sooner: he was in prison for over 22 years. During that period, his songs made it into a good many recordings, including FloRida's "In The Ayer" which went to number 9 in the Billboard charts and sold over a million copies.[ref]Nealy at 3[/ref] In the suit, Warner agreed that Nealy could use the "discovery rule" for the purposes of deciding whether the claim was timely filed, but argued he was limited to damages only for the three years preceding the filing of the suit.[ref]Id.[/ref] The trial court agreed, but the 11th Circuit reversed, citing the Ninth Circuit's decision in Starz v. MGM, a case I wrote about previously.[ref]Court of Appeals Rules That a Timely Filed Copyright Infringement Lawsuit Can Recover All Damages, No Matter How Long Ago They Occurred[/ref] "[T]he plain text of the Copyright Act," the Eleventh Circuit stated, "does not support the existence of a separate damages bar for an otherwise timely copyright claim." [citation omitted] And imposing such a bar, the court reasoned, "would gut the discovery rule by eliminating any meaningful relief" for the very claims it is designed to preserve."[ref]Nealy at 4 citing 60 F.4th 1325 (11th Cir. 2023)[/ref] And now, the Supreme Court of the U.S. agrees. "The text of the Copyright Act answers that question in favor of copyright plaintiffs. The Act's statute of limitations provides in full: "No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued." [citation omitted] That provision establishes a three-year period for filing suit, beginning to run when a claim accrues—here, we assume, upon its discovery. And that clock is a singular one. The "time-to-sue prescription," as we have called it, establishes no separate three-year period for recovering damages, this one running from the date of infringement. [citation omitted] If any time limit on damages exists, it must come from the Act's remedial sections. But those provisions likewise do not aid a long-ago infringer. They state without qualification that an infringer is liable either for statutory damages or for the owner's actual damages and the infringer's profits. [citation omitted] There is no time limit on monetary recovery. So a copyright owner possessing a timely claim for infringement is entitled to damages, no matter when the infringement occurred."[ref]Nealy at 4[/ref] And: "The…contrary view, on top of having no textual support, is essentially self-defeating. With one hand, [it] recognizes a discovery rule, thus enabling some copyright owners to sue for infringing acts occurring more than three years earlier. And with the other hand, [it] takes away the value in what it has conferred, by preventing the recovery of damages for those older infringements. As the court below noted, the three-year damages bar thus "gut[s]" or "silently eliminate[s]" the discovery rule. [citation omitted] Or said another way, the damages bar makes the discovery rule functionally equivalent to its opposite number—an accrual rule based on the timing of an infringement."[ref]Id.[/ref] But, as the dissent points out, the Court fails to rule on the prerequisite: should the "discovery rule" be allowed at all? For if a Court rules that the three-year limitation begins when the infringement occurs, discovered or not, then the damages extension granted by the SCOTUS means nothing. It's at best half of a full resolution of the issue. Also, even though the Court may accept the "discovery rule," it could refuse to apply it given the "relative sophistication" of the Plaintiff. As this Court stated: "Plaintiff's relative sophistication as an experienced litigator in identifying and bringing causes of action for unauthorized uses of [Plaintiff's] copyrighted works leads to the conclusion that it should have discovered, with the exercise of due diligence, that the Rose Photographs were posted within the three-year limitations period. In this respect, as Defendants persuasively argue, this case is akin to Minden Pictures, Inc. v. Buzzfeed, Inc., {citation omitted] ("Minden"). In that case, although the plaintiff alleged that it had been unable to discover infringing activity until many years after it began, the court nevertheless dismissed the copyright claim as time-barred, reasoning that a "reasonable copyright holder in Minden Pictures' position—that is, a seasoned litigator that has filed 36 lawsuits to protect its copyrights, beginning as early as [seven years before the complaint]—should have discovered, with the exercise of due diligence, that its copyright was being infringed within the statutory time period." [citation omitted] The same logic applies with equal force here, where Plaintiff had filed 134 separate copyright infringement cases between 2010 and early 2022."[ref]Michael Grecco Productions, Inc. v. RADesign, Inc.678 F.Supp.3d 405 (SDNY 2023)[/ref] So as with the Plaintiff here, the Court could accept the "discovery rule" but still rule that Nealy should have discovered it sooner. 22 years is a long time.

No Subjects
04/12/2024
Stephen Carlisle

Earlier in the year, the maker of artificial intelligence program OpenAI made this statement to the UK Parliament: "Because copyright today covers virtually every sort of human expression–including blog posts, photographs, forum posts, scraps of software code, and government documents–it would be impossible to train today's leading AI models without using copyrighted materials. Limiting training data to public domain books and drawings created more than a century ago might yield an interesting experiment, but would not provide AI systems that meet the needs of today's citizens."[ref]OpenAI-written evidence[/ref] Then, as reported by Isaiah Portiz of Bloomberg Law, last week at the Vanderbilt University Music Law Summit OpenAI, attorney Sy Damle had this to say: "If you were to do private negotiations for every piece of content that you need to train one of these models," they wouldn't exist… "We just have to accept that as a fact in the world, and then we can start having a conversation about what are the right policies that we build, given that we want these tools to exist."[ref]OpenAI Attorneys Say Licensing All Training Data Is Impossible[/ref] Two problems are immediately obvious. OpenAI has identified a crucial component to the functioning of their product (copyrighted materials) that they are unwilling to pay for.  Then, notice the underlying assumption that somehow there is a NEED for these programs to exist, that we WANT these programs to exist, and that somehow copyright is standing in the way. To which I ask, where is the glaring need? There are over 100 million music tracks available on Spotify. So many that Spotify is changing its payout policy and will only pay royalties on music tracks that have 1,000 streams or more in the previous 12-month period.[ref]Digital Music News[/ref] So, is there really a burning need for more songs? This company seems to think so: "[GenericAI company] is your copilot for music creation. Use AI to make music by simply typing in your ideas and [AI Product] will generate copyright and royalty free music for you instantly. …[AI Product] is for all levels of musicians, content creators and everyone looking for beats audio effects…and music!"[ref]Please note I am deliberately not naming the companies in question so as to not give them free publicity[/ref] This also reveals the hubris of the AI companies. They tell you by typing in a few commands into a computer program that you are now some kind of "music creator." And, by the way, I am not sure if the reference to "copyright free" means that it is not infringing (hopefully) or a recognition that as an AI created work it is not capable of copyright protection. But I digress. There are 3,600 movies on Netflix, plus over 1,800 television shows.[ref]Top 10 Movies & TV shows on Netflix[/ref] There are 1,200 movies on Hulu along with 1,300 TV shows.[ref]Top 10 Movies & TV shows on Hulu[/ref] Over at Disney+ there are 500 movies and 15,000 TV episodes.[ref]Getting started with Disney+[/ref] So again I ask, where is the great burning need for more content? There isn't. For the real purpose of AI is to put creative artists out of work. Lately, my FaceBook feed has been awash in ads for AI product. What is their pitch? Don't pay for creative works. "Never Pay for Voiceovers!" says one. OK, let's put voice actors out of work. "Save hundreds of dollars and hours of your time with [Company] AI Headshot Generator." and  "No Photoshoot/ Photographer Needed!" says another. OK, let's put headshot photographers out of work too. "Because with it you can create training videos in 60+ languages in minutes. Without actors, cameras, microphones & voiceovers." Yep. Let's put them out of work as well. "Replace expensive spokespersons, voice artists and multiple videos apps." OK, goners. "Hey, with [Company] AI, you can generate realistic looking images, even if you've never drawn more than a crooked line before." Again, type a command, and you're an instant creator. Except now there is an AI program that if you upload a photo or piece of art, it will generate the command prompt for you. So, what AI represents is a massive campaign to drive revenue away from human artistic creators to the makers of AI programs, which were all trained on the work of the very artists they now want to put out of business. All without compensation. Because that would be "impossible." So what you have is a business model where your business is 100% dependent on obtaining your raw materials for free. And obtaining these raw materials for free is probably against the law. Is this a good business model? As my colleague David Newhoff over at the Illusion of More website wrote: "If I were an AI investor asking about potential liability, and the founders told me, ‘Don't worry, what we're doing is fair use,' my immediate response would be to ask whether there is sufficient funding for major litigation, to say nothing of predicting the outcome of that litigation. Because simply put, the party who conjures the term ‘fair use' has effectively assumed that a potential liability for copyright infringement exists. And if that assumption is a bad business decision, then that's the founders' problem, not a flaw in copyright law. No matter what the critics say, or how hard certain academics try to alter its meaning, the courts are clear that fair use is an affirmative defense to a claim of copyright infringement, which means that building a business venture on an assumption of fair use is tantamount to assuming that lawsuits are coming. And if it's a multi-billion-dollar venture that potentially infringes millions of works owned by major corporations, then the lawsuits are going to be big—perhaps even existential."[ref]"Fair Use" is Not a Great Business Plan[/ref] These lawsuits, many of them filed as class actions, have already started. But we can look beyond the mere enormity of the amount of money that might be owed. One of the remedies available to the copyright owners is: "(b) As part of a final judgment or decree, the court may order the destruction or other reasonable disposition of all copies or phonorecords found to have been made or used in violation of the copyright owner's exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced."[ref]17 USC 503(b)[/ref] So, the Plaintiffs could request not only that all copies of the AI program be recalled, but that the AI companies remove all copyrighted works from their training data set. And if we take the statement of Open AI above to be true, this would render their product an "interesting experiment" that was not commercially viable. In other words, a bad business model is being rammed down the throats of the artistic community so it can be profitable. This follows in the footsteps of Spotify, which gained its market dominance through streaming songs it did not have a license for. To this date, Spotify has never, ever, turned an annual profit.[ref]Spotify Passes 600 Million Users, Expects Profitable 2024 Start[/ref] Another tech "innovation" with a bad business model. It also follows from the long line of tech "innovations" which were created by ripping off musicians and artists. The logic is "infringe first, duke it out in court later." It worked for Google and YouTube. Not so good for Napster, Grokster, Re-Digi, Grooveshark, TV Eyes, VidAngel and others. So, in the words of Elton John and Bernie Taupin, artists can say "I've Seen That Movie Too." The days of artistic giveaways to big tech companies in the name of "innovation" can be, and should be, over.

No Subjects
03/14/2024
Stephen Carlisle
News broke recently that an unnamed AI company was preparing to pay Reddit $60 million a year to be allowed to scrape the content off the popular website.[ref]Reddit has a new AI training deal to sell user content[/ref] The company, rumored to be Google, and the deal, according to Bloomberg Law is "…the first major public licensing deal between a US social media giant and an external AI company. But other agreements are expected to follow given the massive troves of data the platforms could provide to AI companies, and the critical importance of such diverse data for training their large language models, copyright and tech attorneys say."[ref]Google-Reddit AI Deal Heralds New Era in Social Media Licensing[/ref] The first question that popped into my mind was "just how did Reddit do this"? They certainly don't own the content posted by users, including my blog posts which have appeared there, as we shall discuss further on. In order to own the copyright in the user posts, Reddit would have to have a written copyright assignment from each and every poster, for each and every post. This is a requirement of Section 204 of the Copyright Act which provides: "A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent." As usual, the rationale is buried in the Reddit Terms of Service or TOS. The Reddit TOS provides that the users "retain any ownership rights" over the content that they post (how generous of them). This is a foregone conclusion given the lack of a written copyright assignment. BUT, (here's the kicker) you "grant us a worldwide, royalty-free, perpetual, irrevocable, non-exclusive, transferable, and sublicensable license to use, copy, modify, adapt, prepare derivative works of, distribute, store, perform, and display Your Content and any name, username, voice, or likeness provided in connection with Your Content in all media formats and channels now known or later developed anywhere in the world." Since the license is "non-exclusive," unlike the copyright ownership transfer, it does not have to be in writing and can indeed be oral. And since the license is "royalty free," Reddit does not have to share with you any part of the $60 million a year they'll be raking in. Don't like it? Too bad. The license is also "irrevocable." But what about my blog posts that appear on Reddit? I am not a user or member of Reddit. I have never posted any of my blog posts to Reddit. But other people do. Without my permission. One of the features of my blog platform is it shows who links to my posts, be it Facebook, Twitter, WikiPedia, and in this case Reddit. Indeed, I knew I had "arrived" as an Internet blogger when somebody called me a "moron" on Reddit. But I digress. So, I have never agreed to the Reddit TOS, and therefore Reddit cannot use it as a basis for allowing Google to scrape my posts. Now, I am certain that there are plenty of other bloggers out there in the same boat as me. Indeed, Reddit has an entire sub-reddit called "TIL" which is short for "today I learned" which is full of other people's blog posts. So now that we have established that my work appears on Reddit, without my consent, without my agreeing to the TOS and this content has value (indeed $60 million a year), what might my rightful share of the license fee be? I mean we are probably talking Spotify numbers here, but clearly I am owed something. And for every other AI company that strikes a deal with Reddit, I should be owed something as well. And if the company is indeed Google, what exactly did they think they were buying for their $60 million a year? They have loads of very smart copyright lawyers working for them. But in the end, the trenchant point is this: We have now established that the data scraped off the internet to train AI has value. And the current payments for that valuable data by all of the AI companies in business is currently $0.00. I would say that we, the content creators, are being vastly underpaid.
No Subjects
02/29/2024
Stephen Carlisle
The Supreme Court's decision in Andy Warhol Foundation v. Goldsmith[ref]598 U.S. 508 (2023)[/ref] was a breath of fresh air that provided much needed guidance on the issue of fair use. Moreover, it reigned in the overbroad standard of "transformativeness" that had plagued court decisions for years. Never has this been more apparent than a recent case out of the 4th Circuit Court of Appeals that reversed a District Court finding of fair use. What was notable was that the case is virtually identical, as to the facts, as to the type of work copied, as to the type of use by the Defendant, brought by the exact same Plaintiff, that six years earlier had been found to be fair use. The recent case is Philpot v. Independent Journal Review,[ref]2024 WL 442066, Fourth Circuit Court of Appeals (2024)[/ref] and the facts are as follows:
  • Plaintiff Philpot is a professional photographer whose specialty is concert photos of rock musicians
  • He took and registered a photograph of guitarist Ted Nugent and registered same with the Copyright Office
  • He made the photo available through a Creative Commons license, which required that all uses provide Philpot with attribution
  • Defendant IJR republished the photograph of Nugent to accompany the article "15 Signs Your Daddy Was a Conservative"
  • Defendant did not alter the photo except slight cropping to eliminate negative space
  • Defendant did not provide the required credit, instead linking to Nugent's Wikipedia page[ref]Id. at 1-2[/ref]
The Court below had held that this was fair use, stating the use "was part of a commentary on issues of public concern that placed it in a ‘new context to serve a different purpose.' As such, the Photograph had a ‘transformative use.'"[ref]Philpot v. Independent Journal Review 2021 WL 3669321 E.D. Va. 2021 (Not reported in F. Supp.)[/ref] This reasoning simply beggars belief. It's the same photograph. Slightly cropped, used for the same purpose: to picture Ted Nugent. The use says nothing about Nugent and says nothing about the photograph itself. Needless to say, this all rang a bell with me, as well it should. A previous suit by Philpot on the exact same facts, Philpot v. Media Research Center, was also dismissed as fair use. I highly criticized the decision in this blog post.[ref]Has This Court Decision Rendered the Creative Commons License Unenforceable?[/ref] The only difference between the two cases was that the photos in the previous case were of Kenny Chesney and Kid Rock. The off-base reasoning was the same: "[P]laintiff took the Chesney and Kid Rock Photographs to depict the musicians in concert. (citation omitted) Had defendant used the Chesney and Kid Rock Photographs alongside articles about the concerts depicted, then that use might not have been transformative. But importantly, defendant here used the Photographs in a completely different context, namely to identify these celebrities as pro-life advocates or conservative candidates for office."[ref]Philpot v. Media Research Center, 2018 WL 339142 U.S. District Court for the Eastern District of Virginia 2018[/ref] So what happened? Well, Warhol happened. The Fourth Circuit explained that it could have reversed based upon its prior ruling in Brammer v. Violent Hues,[ref]922 F.3d 255 (4th Circuit 2019)[/ref] which I covered in a previous blog post.[ref]"Fair Use is Not Designed to Protect Lazy Appropriators" Rules Court of Appeals[/ref] There, the Court rather pungently ruled that fair use was not designed "to protect lazy appropriators."[ref]922 F.3d 255 (4th Circuit 2019)[/ref] But the real impact of Warhol is brought front and center by the Court. "The Supreme Court's recent opinion in Andy Warhol Foundation for the Visual Arts v. Goldsmith provides helpful guidance… It then held that even if Orange Prince added new expression to the original photo, the magazine's use was not transformative because the purpose of both works was to illustrate stories about Prince. Like the magazine's use of Orange Prince in Warhol, IJR's use of the Photo was not transformative. Here, as in Warhol, Philpot took the Photo to capture a ‘portrait[ ]' of Nugent, and IJR used the Photo to ‘depict' the musician. (Citation omitted). Accordingly, the two uses ‘share[d] substantially the same purpose.' Id. Indeed, IJR has less of a case for ‘transformative' use than the Andy Warhol Foundation did in Warhol. Unlike the orange dubbing in that case, IJR did not alter or add new expression to the Nugent Photo beyond cropping the negative space…"[ref]2024 WL 442066, Fourth Circuit Court of Appeals (2024)[/ref] So the takeaway is this: if the purpose of the photograph is to depict Ted Nugent, it does not matter if the article is about Nugent the musician, Nugent the bow and arrow hunter, or Nugent the conservative political activist. The purpose of the use is the same and it's not fair use. Lazy appropriators, you have been warned…a second time.
No Subjects
02/07/2024
Stephen Carlisle
January 26, 2024 saw a jury return one of the most head-scratching copyright verdicts in recent memory. It ruled that a photograph and resulting tattoo of jazz icon Miles Davis, despite being hailed by the Defendant as being "identical," were somehow not substantially similar to each other. Under normal circumstances, I do not criticize jury verdicts. The jury hears all the evidence, not just what is reported in the press and online. Yet here, the visual evidence is so compelling, and freely available, that it has led copyright scholars to openly question the result.[ref]Jury finds Kat Von D tattoo does not infringe. But stand by.[/ref] The case arises from a photo of Miles David by photographer Jeff Sedlik, which was used, at the very least, as an "artist reference" by tattoo artist Katherne Von Drachenberg, professionally known as "Kat Von D." Here is the original photo by Sedlik:

Kat1

Here is a screengrab from a video showing Kat Von D tracing the photograph using a lightbox:

Kat2

Here is a photo of Kat Von D inking the tattoo. Note the subject photograph is in the background. Kat3 Here is a side-by-side comparison of the photograph and finalized tattoo:

Kat4

Here is an Instagram Post from High Voltage Tattoo (Kat Von D's studio, since closed[ref]Kat Von D sued for thousands as she shuts down famous tattoo parlor[/ref]) stating that tattoos and references are identical:

Kat5

Now, I ask you: are the two images not substantially similar? Especially where there is evidence of direct copying? Even further, should the question of substantial similarity even have been put before a jury? Existing 9th Circuit case seems to indicate that the answer is no. "A finding that a Defendant copied a Plaintiff's work, without the application of substantial similarity analysis, has been made only when the Defendant has engaged in virtual duplication of a Plaintiff's entire work. (Citations omitted)… In those cases a substantial similarity analysis was unnecessary because the copying of the entire work was admitted. The infringement issue turned on whether the material constituted protected expression."[ref]Narell v. Freeman 872 F.2d 907 (9th Cir. 1989[/ref] (N.B. Some have suggested that this holding is in question after the 9th Circuit decision in Skidmore v. Led Zeppelin, but having re-read that case, I don't follow this reasoning.) Nevertheless, the Court denied summary judgement and sent the question to the jury. This is the jury instruction on substantial similarity given by the Court: "For the extrinsic test, you are to examine the similarities between what is protected by copyright law in the Miles Davis Photograph, on the one hand, with each of the accused infringements, on the other hand. Photographs can be broken down into elements that reflect the various creative choices the photographer made in composing the image. These creative choices are elements such as the photograph's subject matter, pose, lighting, camera angle, depth of field, and almost every other variant involved in the works. The individual elements standing alone are not copyrightable. But if sufficiently original, the combination of subject matter, pose, camera angle, etc., receives protection as original expression. It is the plaintiff's burden to identify the particular combination, selection, or arrangement of elements in his photograph that he claims is protected by copyright law. He must show that each of the accused infringements is substantially similar to this particular combination, selection, or arrangement. If there is no substantial similarity at this first step, then the plaintiff has not met his burden."[ref]Jury instruction No. 20[/ref] Whew. That's a lot of explanation. In any event, put more simply, if a tattoo is of Miles Davis, then the finished product needs to look something like Miles Davis, an element not subject to Sedlik's copyright. The rest of it, particularly the "pose," does seem to be the subject of Sedlik's copyright, and moreover was copied exactly. Just how confused was the jury? A lot it seems. After finding down the line that Kat Von D's work was not substantially similar to Sedlik's photo, that should have ended the case. The jury form instructs the jury not to answer any remaining questions to which the answer was "no" on substantial similarity. Yet the jury plowed on. It was given 10 examples of uses and whether they were fair use. Remember, having found no substantial similarity at all, it was not to answer any duplicate of these questions. Yet it found "fair use" on 4 out of the 10 cited uses. Of particular note is that "Final Tattoo Social Media Posts" exhibits 209, 210 and 211, were all found to be not substantially similar, but the jury then ruled that these exact same uses (exhibits 209, 210 and 211) were "Fair Use." Let's remember that fair use is an affirmative defense. In order to find that a certain use was fair use, it would have to have found that the use was otherwise copyright infringement. The jury's verdict in essence contradicts itself. So, what are the prospects on appeal? Courts are all over the map on whether substantial similarity is a question of law or fact. Some say it's even a mixed question of law and fact. But in any event, a question of law is reviewed by a Court of Appeals de novo, without any deference to the trial Court decision. A question of fact is reviewed for being "clearly erroneous," if made by a Judge. This would apply to the denial of Selik's summary judgement motion. Jury verdicts are harder to overturn. They are subject to a mere "reasonableness" standard. "The reasonableness standard of a jury verdict is generally for the verdict to stand unless no substantial evidence supports the decision."[ref]Identifying and Understanding Standards of Review[/ref] Having seen the evidence, (and now you have seen it too), I for one could very much see a reversal from the 9th Circuit Court of Appeals.
No Subjects
01/18/2024
Stephen Carlisle
Two recent court decisions highlight the wisdom of registering your claim for copyright as soon as possible. The reason being that while registration itself is not required for copyright protection, any meaningful enforcement of that copyright requires that registration be accomplished, and accomplished promptly. We can start with the requirement that you cannot sue for copyright infringement until registration occurs.[ref]17 USC Section 411[/ref] So, once you discover your work is being infringed, every day that goes by without a completed registration in hand brings infringements that multiply, along with damages that you may or may not be able to recover. And the Copyright Office indeed takes a long time to process registrations. The average wait time is currently 4 months.[ref]Copyright.gov Registration Processing Times and FAQs[/ref] The Courts are split on how long you can "look back" in your effort to calculate damages.[ref]Court of Appeals Rules That a Timely Filed Copyright Infringement Lawsuit Can Recover All Damages, No Matter How Long Ago They Occurred[/ref] But prompt registrations carry with them two significant litigation advantages: the ability to recover statutory damages, and the ability to request an award of prevailing party attorney fees to be paid by your opponent. Leading to three obvious questions: What is prompt? Before the infringement occurs or within three months of first publication.[ref]17 USC Section 412[/ref] What are statutory damages? These are payments that you can request from the Defendants without the requirement to prove the precise amount of the damages. These can increase or decrease depending on the conduct of the parties (as well shall see). "Request" attorneys fees? Don't I always get my attorneys fees paid? Sadly no. The award of attorneys fee is within the discretion of the Court. And as a litigation disadvantage, the successful Defendant can always ask for an award of attorneys fees, but the Plaintiff has to have registered promptly.[ref]17 USC Section 505[/ref] First up, statutory damages. Typically the amount to be awarded is between $750 and $30,000 per work infringed.[ref]17 USC Section 504[/ref] However, if the conduct of the Defendant is egregious enough, the maximum statutory damages is $150,000 per work infringed.[ref]17 USC Section 504[/ref] Despite this being bandied about by the anti-copyright forces as being an example of copyright law run amok, this amount is almost never awarded. This maximum is typically awarded where the defendant has failed to show up and defend the case, and where the defendant's conduct is obvious and malicious. But not always is a default a precursor. In December, a jury in California awarded a photographer a total of $6.3 million in statutory damages over 43 separate counts of infringement.[ref]Scott Hargis v. Pacifica Senior Living Management, LLC[/ref] Why so much? "[The Plaintiff], Hargis argued that [Defendant] Pacifica's infringement was willful because it is a ‘sophisticated for-profit business with full knowledge of the strictures of federal copyright law and the basic requirements for licensing copyrighted content for commercial exploitation.' Furthermore, the photos remained on Pacifica's websites even after Hargis had notified the company of the infringement and made numerous attempts to settle, said the complaint."[ref]Jury Awards Photographer Max Damages in Copyright Suit Against Senior Living Giant[/ref] Next up, attorneys fees. Another recent case saw the Court award $865,101.94 in prevailing party attorney fees against a copyright defendant.[ref]Bobby Goldstein Productions v. Habeeb, US District Court N.D. Texas 2023 WL 8790284[/ref] Why so much? Again, the conduct of the Defendant in litigating the case looms large. "…Defendants unnecessarily prolonged the litigation by advancing frivolous legal arguments and factual contentions and employing tactics that significantly increased the work needed to litigate this matter (and the attorney's fees expended by [Plaintiff] BGP's counsel) in an attempt to avoid or delay responsibility for their infringement. For example, Defendants filed a motion to compel arbitration purportedly based on a settlement agreement between Robert N. Goldstein and Defendant Habeeb. (Citation Omitted). However, the Court denied the motion because Defendants failed to demonstrate the arbitration clause was enforceable against BGP—a non-signatory to the settlement agreement—and that, even if it was enforceable against BGP, the parties' dispute did not fall within the scope of the agreement to arbitrate. (Citation omitted). Defendants also failed to cooperate in discovery; they initially denied uploading any of the infringing videos to ATVD's internet accounts, denied knowing about one of ATVD's accounts, failed to preserve copies of all the infringing videos uploaded to ATVD's internet accounts, and claimed that they could not get access to key information about the uploaded videos. This conduct necessitated BGP's filing a motion to compel discovery, (Citation omitted), which the Court granted in its entirety following a hearing, (Citation omitted). And after BGP obtained documents and testimony proving that persons working for ATVD created the internet accounts at issue and uploaded the infringing videos, Defendants conceded that they created those accounts and uploaded the videos. Ultimately, Defendants stipulated that BGP had met its burden of proof with respect to the underlying elements required for showing that ATVD directly infringed BGP's copyrights in 26 Cheaters Uncensored episodes by posting videos to its internet accounts. (Citation omitted). Given these circumstances, awarding a reasonable attorney's fee to BGP would advance considerations of compensation and deterrence."[ref]Id. at pages 1-2[/ref] So, there you have it. Get out there and register your copyrights. Like right now!
No Subjects