It’s been three years since Stephanie Lenz posted this home video to YouTube which depicts her then 13-month-old child rocking out to the Prince song “Let’s Go Crazy.” It’s a 29-second video of a toddler bouncing around to fuzzy-sounding music playing from small bookshelf speakers in the background. After the video had been up for about four months, YouTube took it down pursuant to a DMCA takedown notice they received from UMG, the holder of the copyright. With the help of the EFF, Lenz sued UMG and asked the court to declare that UMG violated the DMCA when it sent the original takedown notice to YouTube.
This case raises some interesting DMCA-related questions. First, are copyright owners required to take fair use into account before sending a DMCA takedown notice? Second, if fair use is not taken into account, can copyright owners be liable for damages for “materially misrepresent[ing] … that material or activity is infringing” under §512(f)?
The district court answered the first question affirmatively in August 2008, stating that “in order for a copyright owner to proceed under the DMCA with a ‘good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,’ the owner must evaluate whether the material makes a fair use of the copyright.” (Order Denying MTD, Pg. 6). The court also held that “[a]n allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine … is sufficient to state a misrepresentation claim under §512(f).” (Order Denying MTD, Pg. 6). This was not an obvious conclusion for the court to reach—due, in part, to the nature of fair use and some controlling precedent from the Ninth Circuit.
An official finding that a use of a work is a “fair use” is a legal determination by a judge after weighing the four fair use factors in litigation. This reality sometimes makes predicting whether a use of a copyrighted work will ultimately be adjudicated as a fair use challenging prior to filing a lawsuit. Given the range of user creativity that YouTube so readily inspires, the addition of even a small portion of a copyrighted work to another’s original expression can sometimes make this determination extraordinarily difficult.
The court addressed this concern in the opinion noting that “there are likely to be few [cases] in which a copyright owner’s determination that a particular use is not a fair use will meet the requisite standard of subjective bad faith required to prevail in an action for misrepresentation under §512(f).” (Order Denying MTD, Pg. 6). Based on this somewhat wishy washy language, it seems that an instance where a failure to identify a fair use might qualify for §512(f) damages is when the use is so unequivocal fair that it’s obvious to the person reviewing the use before sending a notice.
Fast forward to last week. Nearly two years after this decision (and extensive discovery), Lenz and UMG filed motions for summary judgment (Lenz’s Motion, UMG’s Motion) on whether UMG violated the DMCA takedown notice requirements under §512(f). As articulated in the statute, 512(f) prohibits “[a]ny person from knowingly materially misrepresent[ing] … that material or activity is infringing” and awards “any damages, including attorneys’ costs and fees, incurred by the alleged infringer … who is injured by such misrepresentation.”
The Copyright Act doesn’t state a definition for “knowingly materially misrepresents.” Under these circumstances a judge usually interprets the proper meaning. Since the DMCA was enacted, two prominent cases have issued opinions that interpreted the phrase “knowingly materially misrepresents” differently: Online Policy Group v. Diebold, 337 F.Supp.2d 1195 (N.D. Cal. Sept. 30, 2004) and Rossi v. MPAA, 391 F.3d 1000 (9th Cir. Dec. 1, 2004). Note here that the Rossi case was decided by the Ninth Circuit; consequently, this means the Rossi interpretation is the controlling precedent in the Lenz case. Still, it’s important to see the distinctions illustrated by these rulings.
The Diebold court interpreted the term “knowingly” to mean that “a party actually knew or should have known if it acted with reasonable care or diligence, or would have had no substantial doubt had it been acting in good faith.” (Diebold, 337 F.Supp.2d at 1204). This has been termed the “objective standard” and is the more liberal interpretation–obviously, if a party “should have known,” then the onus is far greater on rights holders to correctly identify instances of fair use.
In contrast, the Ninth Circuit in Rossi took a more conservative approach by juxtaposing the phrases “good faith,” as used in §512(c)(3), with “knowing misrepresentation” and reasoned that §512(f) requires some literal form of knowledge, i.e., that the copyright owner is actually aware of facts that legally transform an allegation of copyright infringement into a false allegation of copyright infringement, otherwise copyright owners could be liable for simple mistakes. (Rossi, 391 F.3d at 1004).
Based on the subjective standard, Lenz (and the EFF) now has to show that the UMG employee(s) who reviewed the video prior to sending the takedown notice were subjectively aware that the video was a fair use prior to sending the notice. However, in the Lenz/EFF memorandum filed last week, she states this:
The undisputed evidence demonstrates Universal failed to form a good faith belief that the Video is infringing, either because it never considered whether it was a fair use and therefore authorized by law, or because it chose to be willfully blind to that fact. (Lenz MSJ, Pg. 8).
I think this excerpt is a fair, albeit very brief, summary of Lenz’s factual framework in support of her motion—the unredacted portions at least. This framing definitely supports the objective standard in Diebold, where a defendant could be liable when s/he should have known the video was likely a fair use; but, it feels factually light under the subjective Rossi standard, were they have to actually be aware the video was likely a fair use. Recall that the Ninth Circuit explicitly rejected the objective standard. (Rossi, 391 at 1004 (“A copyright owner cannot be held liable simply because an unknowing mistake is made, even if the copyright owner acted unreasonably in making the mistake. Rather, there must be a demonstration of some actual knowledge of misrepresentation on the part of the copyright owner.”)).
So what now? Back in the 2008 ruling on fair use, the court appeared poised to rule that this video was an unequivocal instance of fair use worthy of §512(f) damages. If that is the outcome on the current motions, I’m not sure the Ninth Circuit will agree based on their narrow circumscription of §512(f) misrepresentations. Unfortunately, if the district court rules this is not a violation, it removes almost all the teeth from §512(f), as copyright owners would then have a statutory incentive to issue takedown notices blindly, without looking carefully at the content in question, and, potentially, without repercussion.
However resolved, this issue smells ripe for appeal.
Today, the Ninth Circuit issued its opinion in Vernor v. Autodesk, reversing the district court’s ruling which held a sale of software transferred ownership of the copy to a customer and not a mere license.
This case hits on a number of fascinating legal topics (first sale, UCC, licensing rights, statutory interpretations of copyright act, copyright misuse, etc) that are not easily explained in a simple blog post. Hopefully we can pick this one up for discussion on this week’s podcast and give it some more thought. In the meantime, here’s a quick rundown of facts/holdings and some quick observations:
Copies of AutoCAD are normally sold from Autodesk (the developer/marketer) with a software license agreement (a/k/a a EULA). Although there are a few different versions of the license, all of them clearly state that Autodesk retains title to all copies and the customer is receiving a non-exclusive, non-transferable license to use the software. Also, these agreements state the license terminates upon non-compliance and, if the software is an “upgrade,” the customer “must destroy [any AutoCAD software] previously licensed” to them, “including [hard and soft] copies, within 60 days of purchas[ing] the upgrade.”
A person named Vernor bought several copies of used AutoCAD, from a few different sources — includes at least a garage sale and an office sale (think “going out-of-business” sale) from a company named “CTA.” Each copy was apparently in a product box, which had already been opened (no shrink wrap on the outside), contained the necessary optical media, and activation code. Vernor never installed any of the copies on his computer — and instead listed them for sale on eBay.
Autodesk, threatened to sue for copyright infringement and sent takedown notices each time they found an eBay listing. Vernor counter noticed each time and sold a bunch of copies.
Eventually, after nearly losing his eBay account, Vernor wrote to Autodesk and argued that he had the right to sell copies of the software under the first sale doctrine (which limits a copyright holder’s ability to collect royalties following the first sale of a hard copy, see 17 USC § 109) since he bought it used. Vernor also argued that the license agreement did not apply to him, because he never agreed to it or installed the software (no “I agree” click-through UI splash).
Autodesk disagreed. Then, Vernor sued Autodesk seeking a declaratory judgment (asking the judge to declare he was not infringing) and alleged copyright misuse. The District court (see MTD and MSJ orders) held Vernor’s sales were not copyright infringements based on the first sale doctrine but never resolved the misuse of copyright claims. Autodesk appealed to the Ninth Circuit.
Interesting questions posed and the ninth circuit’s (paraphrased) answers:
(1) Were the original copies sold or licensed by Autodesk, despite what the license said?
Ninth cir: The AutoCAD EULA is a license, because Autodesk called the EULA a license, restricted the customer’s ability to transfer a copy of the software upon sale, and had a series of additional restrictions on use.
(2) Since the Autodesk EULA allowed “indefinite” possession of the software in perpetuity, can it still be a license?
Ninth Cir: Yes, it’s still a license. The ability to hold rights in perpetuity is a factor in analysis, but not dispositive by itself.
Result: The right to use software is distinct from the right to own it, at least in this case.
Why is this opinion important? There are a lot of journal articles that devote hundreds of pages to this topic and argue both sides fervently on the merits – instrument drafting and UCC Art. II sale/license distinctions, software policy. They are all worth reading — I love thinking about these things as a lawyer.
But, as a consumer, I’m bummed by what I perceive to be the death throes of the first sale doctrine. I wonder if it’s only a matter of time before (possibly not even within my own lifetime) that all (or at least most) media will only be available in these restrictive formats, with licenses or DRM, the concept of a secondary media market is lost, and the first sale doctrine will be as dusty and forgotten as the 3d Amendment.
Facebook is going after Teachbook.com for violating their trademarks. Teachbook is a social networking site for teachers, but you may have already guessed that based on the name, which is precisely why Goliath is going after David in this case. The word “book”, or at least “[something]book.com” has the potential to become synonymous with social networking sites, especially if more somethingbook websites start popping up.
One of Teachbook’s two employees said “We’re trying to understand how Facebook, a multibillion-dollar company, feels this small enterprise in Chicago is any type of threat.” However, that’s not the right defense. Besides the dilution of Facebook’s trademark, Teachbook is a threat because there is the possibility of confusion between the two, and it essentially rides on the coattails of Facebook’s trademark. And despite the claim that books are educational and therefore Teachbook is just two educational words, the most crucial piece is that I doubt they would have named their website Teachbook without Facebook’s trademark already existing.
This follows the amusing trend where portions of words are considered violations of the trademark. Consider the ill-fated Scrabulous, borrowing Scrabble’s first five letters, and the various -opoly games that borrowed too heavily from Monopoly. Each of those is five letters, compared to the four in “book.” I’m curious to see if anyone will be sued for any smaller or more generic portions of trademarks.
Yesterday, we recorded a special edition of our podcast and devoted approximately 2/3 of the show to discussing the Viacom v. YouTube/Google arguments which were presented in their respective cross-motions for summary judgment. One of the most important pieces of the litigation is whether the DMCA section 512(c) safeharbor will apply to Google and whether Google might be secondarily liable for copyright infringement. I felt it would be helpful to provide a quick and dirty guide to some of the liability principles at stake in the case.
Secondary liability, or “indirect liability,” attaches liability to certain intermediary entities and other persons who are not participating in an infringing act, but are somehow contributing, profiting, or inducing another person’s act of infringement. For example, this might apply to a person who owns and operates a website for the sole purpose of facilitating copyright infringement of song recordings–that operator is not downloading or uploading the sound recordings herself, and therefore is not directly infringing any copyrights, but is providing a medium for others to participate in infringing activities. For you legal history afficionados, secondary liability dates has been recognized in various forms by courts at least as far back as the late 19th century (see e.g., Fishel v. Lueckel, 53 F. 499 (S.D.N.Y. 1892) (recognizing liability for profiting from infringement as a joint tortfeasor)). Despite this, secondary liability has still not been codified in the Copyright Act. Consequently, across federal jurisdictions the standards of secondary liability vary a little from court-to-court. Nonetheless, secondary liability can be parsed into two categories: (1) contributory liability and (2) vicarious liability.
Scholars and practitioners devote hundreds of pages to discussing contributory and vicarious infringement. I’m not here to make your eyes bleed. So, please consider the following points a very broad overview:
Contributory Infringement: When a person, who has knowledge of a direct instance of infringement (e.g., another person uploading a unauthorized video), materially contributes to, *or*, actively induces the infringing conduct.
By a Materially Contribution: The contribution generally needs to add something to the original act of infringement. For example, some courts have ruled that adding either software, hardware, and webspace, to provide a conduit to unlawfully exchange copyrighted works is enough. In another case, the Ninth Circuit held the operators of a swap meet where independent vendors sold unauthorized copies of copyrighted works was sufficient to survive a motion to dismiss. Note, however, that under a contributory liability theory, a defendant must have knowledge that an act of infringement is occurring to be liable.
Or, by Inducement: In 2005, the Supreme Court held in MGM v. Grokster that a person is liable for contributory infringement when she “distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement.”
Vicarious Infringement: When a person has the right and ability to supervise an infringing activity and derives a direct financial interest from the infringing activity. Some courts have interpreted that this does not necessarily mean earned revenue, merely deriving some form of financial interest or financial incentives for tolerating unlawful from the infringing activity may suffice. For example, check out the Napster litigation from 2001: A&M v. Napster, 239 F.3d 1004 (9th Cir. 2001).
As a final note, it’s important to remember that both the contributory and vicarious liability theories require there to be an original act of direct infringement. In other words, there has to be another individual who violates the Copyright Act by directly misappropriating the exclusive rights of a copyright owner.
Enter Google, YouTube, and Viacom. Among the most interesting factoids which have surfaced from the summary judgment motions in the Viacom v. YouTube case, is that prior to Google’s acquisition, the founders and executives at YouTube were aware that the website was being used to upload unauthorized copyrighted content. Viacom’s motion quotes email excerpts from the executives who discuss the importance of allowing users to upload arguably infringing content because it was driving up website traffic, making the site an attractive acquisition target based on traffic metrics. Along one line of reasoning, the executives were inducing users to upload infringing content and may have actually participated in some of this. This would be the “smoking gun” argument. See, once YouTube was acquired by Google, Google has arguably assumed liability from actions which took place before the closing date–this is a very common occurrence in any corporate acquisition, but is often subject to the language in the agreement (buyer and seller can negotiate for certain terms and indemnity of liabilities).
What remains unclear, to some extent, is the amount of knowledge needed by the operators to impute secondary liability beyond the DMCA safeharbor. For instance, just because the YouTube executives knew that some videos were likely to have been uploaded without authorization that doesn’t mean they *actually* knew they were unauthorized. Consider this theory plausible deniability. Unless the executives took the time to check with the actual copyright owners, or unless they received a takedown notice or cease and desist notice, they arguably didn’t know with certainty that a particular upload was expressly unauthorized.
Here’s where the DMCA section 512 safeharbor comes into play. In the past on our podcast and blog (here’s a more thorough overview I wrote), we’ve beaten to death the 17 U.S.C. 512(c) language, but it’s helpful to take a fresh look to see how the precise wording of the statute comes into play:
(1) In general.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—
(A)(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.
Note 512(c)(1)(A)(i)-(iii), in bold above. That’s the statutory language concerning the level of knowledge that potentially implicates a service provider with infringement by a user. Of particular interest to me is (ii), which states that if a service provider is aware of “facts or circumstances from which infringing activity is apparent,” the service provider cannot take advantage of the safehabor. Depending on how the court applies this language, Google might find themselves in hot water based on the email exchanges of the previous YouTube executives. However, it’s not black and white. Just last year, we saw the UMG v. Veoh case, in which a California Federal Court ruled that a “blanket notice” for the purposes of DMCA takedowns was insufficient to shift the burden of copyright policing to Veoh. This is important, because if the Viacom and YouTube court decides to follow this reasoning, it gives YouTube some of the aforementioned plausible deniability– if there were no notices specifically indicating the exact uploads which were infringing, it might be insufficient to impute actual knowledge on YouTube.
Google has separately argued in their motion that Viacom participated in stealth marketing tactics which would have made it very difficult to determine whether an upload was in fact authorized by Viacom but uploaded by another person. Additionally, Google points to evidence that Viacom had disparate internal policies under which they allowed certain unauthorized videos to remain on YouTube, without flagging or sending any notices to YouTube. This obviously would make it much more difficult for the YouTube executives to independently determine an upload to be infringing without notice. You simply can’t act as a filter if you don’t actually know who is responsible for a particular file.
I do think this is a factually fascinating case and it’s too close to speculate what the court is likely to do. There’s also more detail worthy of discussion on this case that would make this post pages and pages long. Check out the plethora of commentary from the legal blogosphere for additional takes on this case. It’s also worth listening to our show (which will post tonight, around 12AM EST) and hearing myself, Ben, and Dominik debate the merits from different points of view. We dove into much deeper detail on the specifics.
Other Bloggers’ takes:
Ben Sheffner (Copyrights & Campaigns)
Eric Goldman (Technology Law and Marketing)
Mike Masnick (TechDirt)
Nate Anderson (Ars Technica)
On yesterday’s Podcast, we discussed how Rescuecom voluntarily withdrew their trademark infringement suit against Google’s Adwords program. Last week a similar suit against Google, Stratton Faxxon v. Google, was dismissed out of a Connecticut Superior Court. According to Eric Goldman, there have been approximately twelve similar lawsuits to date (primarily against Google) for the sale of trademarked phrases in the Adwords program.
Unlike Rescuecom, Stratton Faxon didn’t claim trademark infringement in this suit. Instead, their claims alleged interference of business relations and unfair competition. The details are somewhat unclear, and I don’t have access to the actual filings, but it appears that Google filed a “Motion for Judgment” which was granted last week. No order or opinion stating the reasoning for the dismissed seems to be publicly available. However, because Stratton Faxon did not sue on a theory of trademark infringement, they are not precluded from refiling another suit in Federal Court on a trademark theory.
The theory behind the bulk of these suits is fairly novel. To summarize, trademark owners are suing Google for selling their registered trademarks to competitors as search terms. After competitor successfully “buys” (or “bids” might be more appropriate) for a search term that consists of a registered trademark of another person, the competitor’s advertisement appears in the sponsored links section on the search Google search result page. This does not affect the organic results where you would presumably see any links related to the trademark owner. Rather, it only affects what appears as an advertisement which is clearly labeled “sponsored link.” The beef these trademark owners seem to have is that they don’t want any links to competitors, sponsored or not, appearing next to their organic search engine results. Unfortunately, not all uses of a trademarked phrase are protected by the law. See e.g., Nominative fair use.
As you might imagine, these suits have been challenged by Google and other defendants on a number of grounds. In an ordinary trademark infringement case, a plaintiff needs to establish that the defendant, (1) used his identical mark, or one that is confusingly similar, (2) in commerce, (3) in connection with the sale of goods or services, (4) and, that the use was causes a likelihood of confusion to the consumer. The two biggest points of contention that defendants have argued is that selling a trademarked phrase is not “in commerce” and that there is no “likelihood of confusion” that results from the sale of the mark. Before Rescuecom withdrew from litigation, the Second Circuit opined that the sale of trademarks in the Adwords program was enough to satisfy the “in commerce” requirement. As far as I know, no court has resolved the the “likelihood of confusion” issue on the merits. Nevertheless, it smells like an awfully tenuous argument given the layout and separation of sponsored links and organic search results.
Hat tip goes to Eric Goldman for his outstanding coverage on Google Adwords litigation.
Comments Off Posted in: Analysis on March 17, 2010
Judge Nancy Gertner granted a motion for directed verdict (also known to as a judgment as a matter of law) for the plaintiffs in Sony v. Tenenbaum. The fatal blow to the trial was dealt after Tenenbaum himself took the stand and admitted “us[ing] P2P” and “lied about it” in response to a cross-examination question. The remaining issue in this portion of the litigation is a determination of damages.
A Judgment as a Matter of Law is a procedural device under the rules of Federal Civil Procedure (see F.R.C.P 50) whereby a party may make a motion requesting a verdict be granted by the judge. The key inquiry is whether based on the evidence presented up to the point the motion is made, is there any way a reasonable jury could only come to one conclusion. To ensure some measure of fairness, the motions are evaluated by the judge in “a light most favorable to the non-moving party.” The judge must find that a “reasonable jury would not have a legally sufficient basis to find for the non-moving party on the issue.”
In a copyright infringement case, a key matter is whether the defendant was in fact responsible for a violation of the exclusive rights to a copyright holder. At several points during the litigation, Tenenbaum has attempted to shift the blame to other people, claiming he was not responsible himself for the acts of infringement. Once Tenenbaum admitted to using P2P software in his testimony it was a nail in the coffin on this particular issue. This empowered the plaintiffs to move for a judgement as a matter of law; and, in effect, this killed the disputed factual elements of the case.
The next portion of the proceedings moves on to a determination of damages. The jury will be responsible for this determination and must come up with an amount of damages based on the statutory scheme of the Copyright Act. The Act provides a spectrum of figures that guide damage awards: $750 minimum to $150,000 maximum per infringement. In this case, that means at a minimum Tenenbaum will be found liable on 30 songs for $22,500, and at maximum $4.5M.
What remains now is still a significant question: what amount will the jury award? At this point we’ve seen one other case go to a jury on a determination for damages (Jammie Thomas) which returned an award of $1.92M based on an infringement of 24 recordings. Many critics of the statutory damages have challenged the nature of high damage rewards based on infringement of a small number of sound recordings, particularly where statutory damages are grossly disproportionate to the amount of actual damages suffered by a plaintiff. Indeed, a ripe issue on appeal will be whether such damages can pass Constitutional muster. This is sure to be hotly contested by Tenenbaum’s counsel following the damage award.
Update: As of 2 P.M. Friday, July 31, the case was handed off to the jury. More to follow.
Update 2: The jury came back with the damages award, only a few hours after deliberations began. Here’s the bad news: $675,000 ($22,500 per song).
Comments Off Posted in: Analysis on July 31, 2009
U.S. Patent Number 7,568,213 issued on July 28, 2009 for a “Method for providing episodic media content.”
Before we delve into the specifics on this patent, let’s take a step back and talk about patents in general.
Patents consist of specifications, drawings, and claims. The claims control the scope of what the patent actually protects. Claims fall into two types: independent and dependent. Independent claims, as the name suggests, stand alone, whereas dependent claims depend on independent claims. Dependent claims generally embellish on independent claims, adding specific details.
This patent has nine claims, organized into one independent claim and eight dependent claims. Claim 1, the independent claim, claims:
A method for providing episodic media, the method comprising: providing a user with access to a channel dedicated to episodic media, wherein the episodic media provided over the channel is pre-defined into one or more episodes by a remote publisher of the episodic media; receiving a subscription request to the channel dedicated to the episodic media from the user; automatically downloading updated episodic media associated with the channel dedicated to the episodic media to a computing device associated with the user in accordance with the subscription request upon availability of the updated episodic media, the automatic download occurring without further user interaction; and providing the user with: an indication of a maximum available channel depth, the channel depth indicating a size of episodic media yet to be downloaded from the channel and size of episodic media already downloaded from the channel, the channel depth being specified in playtime or storage resources, and the ability to modify the channel depth by deleting selected episodic media content, thereby overriding the previously configured channel depth.
VoloMedia notes that their patent actually protects more than just podcasts – it protects all episodic media, of which RSS-based podcasts are just the most common subset. But, because “episodic media” doesn’t quite roll off the tongue the same way podcast does, let’s analyze the independent claim in this patent using the word podcast instead.
Upon first inspection, we notice that this claim is for a method– the words “A method for” right at the start of the claim alert us to this fact. Method claims protect a way of doing something.
Method claims generally list several steps that someone needs to follow in order to perform the method. To fall under the protection of the method claim, each step in the method has to occur.
The Method Claim
Breaking down this patent’s method claim, we see:
- A method for providing podcasts, the method comprising:
- providing a user with access to a channel dedicated to podcasts,
- wherein the podcasts provided over the channel is pre-defined into one or more episodes by a remote publisher of the podcasts;
- receiving a subscription request to the channel dedicated to the podcasts from the user;
- automatically downloading updated podcasts associated with the channel dedicated to the podcasts to a computing device associated with the user in accordance with the subscription request upon availability of the updated podcasts,
- the automatic download occurring without further user interaction;
- and providing the user with: an indication of a maximum available channel depth,
- the channel depth indicating a size of podcasts yet to be downloaded from the channel and size of podcasts already downloaded from the channel, the channel depth being specified in playtime or storage resources, and the ability to modify the channel depth by deleting selected podcasts content, thereby overriding the previously configured channel depth.
- providing a user with access to a channel dedicated to podcasts,
So, in simpler terms, this claim protects a method for showing a list of podcast episodes, letting a user subscribe to the podcast, downloading new podcasts, and showing a user which episodes haven’t downloaded yet.
That sounds a lot like iTunes’s podcast functionality, doesn’t it?
Does this mean that VoloMedia has lawyers racing to the courthouse to sue Apple and collect millions in royalties? Not necessarily.
Once a patent issues, a patent holder can choose to write nice letters to potential infringers, letting them know about the patent and inviting them to obtain a license (all for a reasonable license fee, of course). That’s generally the prettier route, as litigation involves far greater expense, both in terms of time and money.
ArsTechnica reports that VoloMedia apparently hasn’t yet moved towards licensing, and includes a quote from a company representative that says, “Our focus is to generate revenues through our products and technologies. VoloMedia is not entertaining or pursuing any licensing conversations.”
But say a potential infringer doesn’t look kindly on VoloMedia’s patent, and decides that they’d prefer to act first rather than wait for a lawsuit. They can file for a declaratory judgment in court, basically saying to the court, “We’d like to the court to rule that our product does not infringe this patent or that the patent is invalid.”
The potential infringer can argue non-infringement by disputing how to read the claims. This process generally happens in what’s called a Markman hearing, where, before trial actually starts, the court attempts to define any contested terms in the claim. Because patent litigation largely centers around claims, this hearing can make or break a case.
The potential infringer will typically also argue invalidity, saying “It doesn’t matter whether or not we infringe the patent, because the patent itself is invalid.” Courts generally find patents invalid on two grounds: lack of novelty and obviousness. Both grounds imply that the USPTO erred in issuing the patent.
Lack of Novelty
A potential infringer generally proves lack of novelty by finding prior art that precedes a patent’s priority date. In other words, the potential infringer finds evidence that someone out there publicly practiced or described the method in this patent before VoloMedia’s priority date – in this case, that priority date appears to stretch back to 2003.
To prove obviousness, a potential infringer argues that while the patent combines existing techniques in a new way, the combination itself is or should be obvious to a person having ordinary skill in the art (a PHOSITA). In other words, the patent covers something that’s such an obvious advance over what’s already out there that there shouldn’t be a patent at all.
Request for Reexamination
Apart from filing for a declaratory judgment, any third-party can also submit a request for reexamination. To do this, the third party needs a piece of prior art that precedes a patent’s priority date that appears to raise significant issues of patentability. The reexamination does not take place in court but instead happens in the USPTO. A reexamination can result in all the claims being thrown out, or patent narrowing what it claims.
The VoloMedia patent presents an interesting situation because podcasting has exploded online, fueled largely by the growth of Apple’s iPod. It’s likely that Apple or a third-party will file a request for reexamination with the USPTO, and the patent will either have its claims significantly narrowed or cancelled entirely, unless VoloMedia can successfully argue that it in fact was the first to invent the fine art of episodic media delivery. We’ll keep you posted as this story develops.
Only a few short hours ago I polished off the latest episode of This Week in Tech (TWiT). For those unfamiliar, TWiT is a weekly technology news podcast that is hosted by Leo Laporte. Each week Leo invites several technology news panelists onto the show and the group discusses weekly news stories.
For the last few weeks Leo has been out of country on vacation and guest hosts have taken over until his return. Episode 203 sported Tom Merrit, who incidentally has his own daily technology news podcast at CNET. During the show, Tom brought up an interesting legal story about a United States Wikipedian user, Derek Coetzee, who received a legal notice from the National Portrait Gallery concerning the use of photographs picturing some 3,000 portraits of historic people that had been uploaded to Wikipedia. The images, as you can see here, are high pixel reproductions of the portraits in the Gallery. Tom and the panelists (Veronica Belmont, Ryan Block, Patrick Norton, Roger Chang, and Robert Llewellyn) dove head on into what is actually a very nuanced area of copyright law.
First, the TWiT panel glossed over the fact that the National Portraits Gallery is located in London, and the legal notice they issued is based on a reading of English copyright law, not U.S. law. This is significant because U.K. law is not bound by the same copyright principles as we recognize here in the U.S., even though based on similar principles and underpinnings.
Second, the panel seemed to confuse the claims on a tangential discussion of photographing of public domain art and its legal effects in public places. In reality, the legal notice claims that Mr. Coetzee accessed these images from the National Portraits Gallery’s website, downloaded them, and then uploaded them to Wikipedia without authorization. The notice does not mention that Mr. Coetzee actually took any photographs himself.
In 1999, the Southern District of New York (S.D.N.Y.) opined on this exact issue in Bridgeman Art Library v. Corel Corp., 36 F. Supp.2d 191. In Bridgeman, an English company which sells reproductions of public domain art sued a Canadian defendant for copyright infringement based on, inter alia, unauthorized reproduction of their images. After a multitude of complicated procedural maneuverings, the S.D.N.Y. held for the defendant, and declared the images were not protectable under the U.K. copyright law (The Copyright, Designs, and Patents Act 1998).
U.S. laws are limited by the principle of extraterritoriality– meaning, U.S. laws generally have no force outside the boundaries of U.S. soil. The Bridgeman court decided that U.K. law applied to the claims of infringement under the Berne Convention. The reasoning behind this focused on the fact that U.K. law bore the “most significant relationship” to the property and the parties in the dispute. The court noted that the images were first affixed in the U.K. and first published in the U.K. The fact that a U.S. court is deciding a case based on U.K copyright law probably seems confusing. In reality, this is a common, albeit complicated, international intellectual property principle that is regularly applied in these scenarios under international IP treaties the U.S. is a party to (e.g., The Berne Convention, and Universal Copyright Convention). Note though, not every case is treated identically to this one. The method of determining international choice of law issues is fairly complicated and is done on a case-by-case basis.
Under U.K law, subject matter that qualifies as “original literary, dramatic, musical or artistic works” is copyrightable. “Originality” hinges on whether a work “originates with an author” and “is not copied from another work.” Similarly, under U.S. law, copyright attaches to original expression fixed in a tangible medium. A work that is within the public domain is not protectable under copyright law. The argument the defendant, Corel, successfully presented was that since the subject matter of the images is not protectable, any reproduction of the subject matter does not qualify as “original,” and therefore does not merit copyright protection under U.K law.
So, that’s a pretty good answer from a U.S. court on the issue, but it comes with a huge caveat. Since a U.S. court decided the Bridgeman matter, a U.K. court is not actually bound by the decision in terms of precedential value. This brings us back to the concept of legal territoriality: U.S. courts simply have no power over U.K. courts. Although the argument looks fairly persuasive under the U.S. holding, a U.K. court does not have to follow this particular interpretation of U.K. law.
The National Portrait Gallery noted this precise point in the notice to Mr. Coetzee. The solicitors across the pond interpret the U.K. statute to cover certain aspects of the image database on the website as well as the photographs of the portraits themselves. The Copyright, Designs, and Patents Act explicitly mentions “photographs” as protected works, but is silent on any requirements for the subject matter of such a photograph. In any infringement lawsuit in either the U.S. or U.K., a plaintiff needs to establish that a valid copyright exists before the issue of infringement will be heard. Without controlling U.K. precedent on the matter, this leaves a huge question mark in place of a legal outcome prediction. Assuming the matter is heard and decided under U.K. law, the ultimate determination of whether protection applies will likely be dispositive.
If the National Portrait Gallery’s reading is correct, there is a colorable claim for infringement in the U.K. Moreover, the legal notice also indicates that the National Portrait Gallery intends to pursue the matter in the U.K. legal system, not in the U.S. legal system. On his Wikipedia page, Mr. Coetzee indicates he is currently seeking counsel, but no apparent legal response has been publicized.
Three cheers goes out to the TWiT panelists for taking on a very interesting legal story, even if they didn’t get it all correct!
Last week, The New York Times ran a story on College athletes and video games. We had slated to cover it on Podcast #6, but we scrapped it due to our self-imposed time constraints. Here’s the breakdown.
The highlight of the story is Sam Keller, a former National Collegiate Athletics Association (NCAA) football player who played for the Arizona State University before transferring to Nebraska State in 2006. Mr. Keller is upset because Electronic Arts recently released “NCAA Football,” which is available on consoles and PCs. He believes his “likeness” has been used within the game, even though he has not been paid for any such appearance or commercial endorsement. The twist to the story is Mr. Keller’s name was never used in the game. However, an Arizona player donning the jersey number 9, and of the same approximate “height, weight, skin tone, hair color and home state” does. Not only do the stats match up, but the digital player also has similar mannerisms and playing styles to Keller when the character is used in game.
The NCAA requires all college athletes to sign a form that prohibits athletes from financially benefiting from their namesake (NCAA Bylaw 12.5). This is generally meant to respect the boundaries between professional and amateur athletes. The rule effectively prevents a student-athlete from selling the right to third parties to market their images for things like endorsements, photo ops, signatures, fictional works, and of course video game deals.
While the majority of college athletes may be unrecognizable, a large number reach collegiate stardom. They become the hot topic of debate on media reports, both in television and print media. Despite celebrity status, the NCAA owns and actually licenses the rights to the video game companies’ use of sports team names and logos. So an entity is making money, but it’s not the players. As you may imagine, this is starkly different than how professional athletes are treated. The professionals get a share of licensing fees for use of their names and likeness.
The basis of his claims against EA and the NCAA come from privacy and publicity law. For Keller to win, he would have to prove that the NCAA or Electronic Arts used his likeness–e.g., picture, name, identity, etc–for the purpose of commercial exploitation without consent and without a recognizable defense to use. Certainly the existence of a contract which authorizes or delegates such uses would be a reasonable defense in this case.
Due to the binding nature of the NCAA agreements and bylaws, college athletes lose their rights to pecuniary arrangements. At law, this means that they might not have a legally recognized remedy against entities like Electronic Arts. On the other hand, the fact that players cannot enter into such an agreement may not preclude them from recovering damages when their likeness is misappropriated. The players may be able to stop the use of their likenesses without their consent. Nonetheless, Keller has filed a class action lawsuit against Electronic Arts and the NCAA (Keller v. Electronic Arts, Inc; NCAA, Collegiate Licensing, N.D. Cal. CV-09-1967-cw), naming all similarly situated collegiate athletes, alleging commercial deprivation of rights of publicity, misappropriation of likeness, unfair competition, unjust enrichment, and breach of contract. If successful, the suit would yield monetary damages for the use of player images and possibly force the NCAA to change their rules and bylaws.
The NCAA has vocally responded that the suit lacks merit and doesn’t violate their own rules. A legal response has yet to surface, but the NCAA will certainly have some good claims under contract law– to some extent, the rules and bylaws may constitute a binding contractual relationship, and effectively limit the players ability to recover. Additionally, they may also claim the rights that were licensed did not include player likenesses, only sports logos and teams. Perhaps Electronic Arts is to blame for the additional similarities? As with all licensing schemes, there is undoubtedly a contract at issue in the license agreement, and it would likely speak (at least to some extent) about the actual content that was licensed. Provided that the suit continues to procedurally advance, such a document will surface in discovery.
Comments Off Posted in: Analysis on July 7, 2009
On Podcast #5 this week, the Technically Legal crew discussed the recent filing of a case involving iTunes Gift Cards. Following the show, the three of us continued to debate the merits of the case. Naturally, this led to some follow up discussion.
To bring you up to speed, here are the basic facts. Last week, multiple sources (see Ars Technica and Apple Insider) reported the filing of a class action lawsuit in the Southern District of Illinois against Apple for using “bait and switch tactics on their gift cards.” More specifically, the case in question (Owens et. al v. Apple, Inc. 3:09-cv-00479-WDS-GDW) alleges breach of contract, fraud and misrepresentation under Illinois law. The claims are based on a statement found on the cardboard insert containing the gift card, which states:
“Download $15 worth of entertainment to enjoy on your Mac or Windows PC. And, of course, your iPod. Songs are 99¢ and videos start at $1.99.”
Back in April 2009, the iTunes store shifted their pricing model, which was previously set at 99¢ per song, to a variable pricing model where songs are priced between 69¢ and $1.29. The Owens, the couple who filed the suit, purchased cards from brick and mortar retailers (Sam’s Club and Walmart) between two relevant time periods: some before Apple changed it’s pricing scheme and others after it changed. The first claims asserted by the Owens’ asserts that the statement on the card that “[s]ongs are 99¢” constitutes a legally enforceable contract, or at least a term of a contract. Thus, the cards purchased, but unused prior to the change, constituted a breach of contract at the point when the store changed the prices. The second part to the breach claim is that even after the pricing changed, the cards were purchased from retailers with the same language on them, even though the pricing model had changed. Finally, the second claim alleges fraud and misrepresentation in business practices by allowing these statements on the cards.
During the podcast, we hashed out some of the broader legal arguments regarding whether these words could even constitute a contract. In short, there is some debate over whether the words could create some type of “offer,” as required under contract law, or were merely an advertisement.
Ben went out and took some snapshots of the front and back of the cards today (see here and here). As you can see, the card still contains the language at issue despite the pricing change. Interestingly, the complaint left out much of the disclaiming language on the back of the card, which, in relevant part, states, “[s]ubject to full terms and conditions, see www.apple.com/legal/itunes/us/gifts.html.”
After visiting Apple’s Terms and Conditions URL today, Section 11(b) notes that “Prices and availability of any Products are subject to change at any time.” Another notable provision in the terms and conditions states that “Apple reserves the right to change the terms and conditions of sale at the iTunes Store at any time.” Interestingly, the terms were last updated on June 16, 2009. The action was filed last week on June 24th. We were unable to find any previous versions of the terms and conditions. The quoted language might reflect the lawsuit, or it could be the case that those terms were always there.
This presents an argument that the contract claims are attenuated since the rear of the card clearly states they are subject to additional terms and conditions. On a side note, a court might decide that the notice on the back of a card which subjects a purchase to such additional terms at a purchase might not be lawful under contract law since the costumer does not have a chance to read the terms prior to purchase. However, this argument has popped up a lot in the past with respect to End-User License Agreements (EULA’s) in software, and repeatedly failed.
In any event, it may still be the case that the language on the card is enough to satisfy a claim for misrepresentation or something along the lines of false advertising.
The three of us debated back and forth as to how the language could be read and came to a few conclusions. One potential reading is that the phrase “songs are 99¢” does not necessarily mean that all songs are 99¢. Another enticing reading is obtained when consider the sentence in whole, “[s]ongs are 99¢ videos start at $1.99” (emphasis supplied). Reading the entire syntax of the statement seems to say that songs are definitively 99¢ and the cheapest videos start at 99¢. This may impose a stricter reading of the verb “are.” In other words, why would Apple indicate there is variable pricing for videos but not songs?
In the complaint, the plaintiffs–and the class if certified–have requested a refund of 30¢ per song based on the misleading statements. Amazing how seven words can draw so much trouble, but precision of language is an extremely important part of the legal world. We are going to keep our eyes on this case, as there will surely be more to come.