Jonathan Pink's Intellectual Property Report

More About Prince v. Cariou

2012-02-09T16:28:00.000-08:00

Quick follow-up on a case I wrote about last week: Prince et al. v. Cariou, case number 11-1197.

That’s the case involving appropriation artist Richard Prince whose work involves creating collages and paintings using other people’s photographs.

Now two Photography industry trade groups (the American Society of Media Photographers Inc. and The Picture Archive Council of America Inc.) have filed amicus briefs arguing that the ruling against Mr. Prince should stand. Not surprising as the trade groups represent photographers and image-licensors.

In a nutshell, the groups argue that an overturning of the lower court’s ruling (finding copyright infringement on the basis that the fair-use doctrine not apply to Prince's use of photographer Patrick Cariou's images in his work) would harm photographers and those who lawfully license out their images, thus posing a threat to their members’ livelihood.

They also put forth the old saw: our members will stop creating new works. I never buy this argument, and neither will any of you if you are creators yourself. The fact is that artists make art because we compelled to do so, not because we are paid for it. It comes from the inside out.

Might a reversal by the Second Circuit ruin the photags’ livelihood? I doubt it, but I do agree that they could lose some money.

In an event, and just to even the playing field, a number of notable museums and the Andy Warhol Foundation have filed an amicus briefs on behalf of Prince. The museums argue that a reversal could deter museums from acquiring and displaying important works. Maybe. Or increase their insurance premiums.

The Andy Warhol Foundation also argued that the lower court’s application of the fair-use doctrine could have a chilling effect the creation of new artworks. Really? See my comment above. Forget the “Art World,” it seems everyone here has entered “Hyperbole World.”

In any event, that’s the news for now. Now back to work!

Jonathan Pink is an intellectual property attorney resident in the Los Angeles and Orange County offices of Bryan Cave, LLP. He specializes in copyright, trademark and business litigation. He can be reached at jonathan.pink@bryancave.com.

Art as Sport . . . or Sport as Art

2012-02-08T17:12:00.000-08:00

If I were to say “college football,” chances are your thoughts would not go to studio art. Likewise -- and I’m just guessing here -- if I were to say “oil painting,” chances are your thoughts would not go immediately to professional golfing.

After you’ve stopped comparing me to the Amazing Kreskin, I’ll continue. Ready?

Well you may not immediately connect sports with art, but some people do. In a couple of fairly recent instances, you’d refer to these people as “the plaintiffs.” Unless, of course, you were an artist, in which case the “plaintiffs” might refer to you as the “defendant.”

What the heck am I talking about? A couple of cases – one of which has recently reemerged into the public eye -- in which artists depicted sporting scenes, and those doing the sporting weren’t very happy about it.

First, in a case dating back to 2005, the University of Alabama sued Birmingham-based artist Daniel Moore based on his depiction of the school’s football team mid-game. Some of his works depict purportedly classic moments in the school’s athletic history, such as “The Goal Line Stand” from the 1979 Sugar Bowl against Penn State.

The University of Alabama brought a claim for trademark infringement, claiming that Moore’s work infringed the school’s marks by depicting its logo and insignia on the player’s uniforms. It claimed that if Moore wanted to depict these marks, he was obligated to obtain and pay for a trademark licensing fee.

Moore maintained he had the same right to depict these images as would a photographer from Sports Illustrated. He asserted that the images he painted were nothing more than anyone in attendance at the game would have witnessed, and claimed that his artistic depiction players in uniform was protected by the First Amendment.

The case went to trial before U.S. District Court Judge Robert Propst in 2009. The ruling was mostly in Moore’s favor. The Court found that Moore’s paintings did not violate the school’s trademark law, but that his sale of those paintings on mugs, T-shirts and other items did infringe.

Moore was apparently pleased with this result. The University of Alabama, however, wanted more. It appealed, and the 11th Circuit Court of Appeals in Atlanta held a hearing on that appeal just last week.

No ruling yet. (Hey, it took three years for a hearing, give these people some time.)

Still, the issue is an interesting one. Is an artist required to secure a licensing agreement before engaging in painting images of athletes on the job?

I’m not even sure how the school felt that this would have infringed their mark. Infringement requires that the infringer use the mark in commerce in connection with his/her goods or services. 15 U.S.C. sections 1112(1), 1125(a)(1). Doesn’t seem it. See WHS Entertainment Ventures v. United Paperworkers Int’l Union, 997 F. Supp. 946 (M.D. Tenn 1998) (use of plaintiff’s protected logo on leaflets distributed by union organizers on and near plaintiff’s restaurant premises was not sufficient to meet statutory requirement).

In addition, there must be a likelihood of consumer confusion, meaning that an appreciable number of ordinarily prudent purchasers are likely to be confused as to the source, sponsorship or affiliation of defendant’s goods or services. Western Pub. Co. v. Rose Art Indus. Inc., 910 F.2d 57, 59 (2d Cir 1990); see also AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 351 (9th Cir. 1979) (setting forth likelihood of confusion factors).

Even if the school could get beyond that, why wouldn’t the use of the team logos in the painting merely fall under the rubric or nominative use? A defendant is permitted to use the plaintiff’s mark to describe the plaintiff’s product. See Cairns v. Franklin Mint Co., 292 F.3d 1139, 1150 (9th Cir. 2002).

Artist Rick Rush fought a similar trademark infringement claim in 1998. That one was based on Rush’s painting "The Masters of Augusta." The painting showed Tiger Woods' (based on his win from the prior year), and a collage of images that included portraits of Ben Hogan, Bobby Jones, Jack Nicklaus, Arnold Palmer and Sam Snead.

Woods was having none of it. His company, ETW Corporation, sued the publisher of Rush's painting, alleging (among other things) trademark infringement as ETC owned a trademark in Woods' name (and had rights in his image).

The lower court and the Court of Appeals ruled in favor of Rush, holding that the painting contained expressive content, and that a person's likeness could not function as a trademark.

What’s the takeaway from all of this? One point may be that greater license will be given the artist where the case turns, at least in part, on the journalistic nature of the works. So portray the team at play, not an individual member.

Of course, that doesn’t entirely explain the result of the Woods case, although I suppose even that had a news-reporting aspect to it: past and present victors? Sometimes even I don’t have the answers. Now if only we could consult the Amazing Kreskin!

Jonathan Pink is an intellectual property attorney resident in the Orange County and Los Angeles offices of Bryan Cave, LLP. He can be reached at jonathan.pink@bryancave.com.

Copyright Protection in Yoga Exercises? Not Likely

2012-02-07T09:45:00.001-08:00

I remember when I first heard of Bikram Yoga, the rigidly prescribed sequence of twenty-six postures set to balmy 105 degrees and 40% humidity:

It was New Year's day some years ago and we were walking with friends -- and kids in strollers -- around Balboa Island in Newport Beach. A woman in our group was a recent convert to Bikram Yoga. Most of us (except for my very well read wife) had never heard of it.

After an explanation of this form of hot yoga, a young physician in the group opined that it sounded dangerous.

Conflict came early to Bikram Yoga.

Bikram Yoga is said to be the most popular – certainly the most well known -- form of hot yoga. Derived from traditional hatha yoga, it was developed and popularized by Bikram Choudury.

By all accounts he has made a mint off of it. According to Wikipedia, Mr. Chodury's owns more than 40 Rolls Royces, including cars owned by the Queen Mother and the Beatles (although probably not at the same time). Wikipedia quotes him saying “I'm making - I don't know - millions of dollars a day, $10 million a month - who knows how much?”

Who knew a yoga franchise could be so profitable? Given that it is, it’s easy to understand why Choudury would want to protect his golden goose by zealously guarding the right to teach the 26 postures in a sauna-like setting.

After first learning of Bikram Yoga, occasionally reemerged in my periphery. At some point, a year or two later, I received a call from the owner of a yoga studio who described a brewing dispute with Bikram. He (or his lawyers) didn’t want her to offer Bikram-style yoga absent Bikram-authorized training and a Bikram-license.

Hey, this may be meditative, but it’s also business. Someone’s got to pay for Chodury’s watch collection that Wikipedia says is valued at more than $1 million.

When I received the call, I thought you probably can't use his name (nomitive use likely would not work as a defense), but how can he protect the sequence? Does it constitute choreography, maybe?

I never answered the question. The caller decided she didn't have the funds or the fortitude for a yoga fight.

Apparently other Bikram disciples were more inclined to go to the yoga-mat on this.

Greg Gumucio is the founder of Yoga to the People, a New York based franchise which offers "Traditional Hot Yoga." He’s a former student of Chodury. Now he’s the defendant in a copyright infringement lawsuit brought by Chodury based on Gumucio having allegedly taught Bikram's sequence of twenty-six postures set to 105 degrees (or there about).

Wow, talk about “Time for you to go, Grasshopper.” “Time for me to squish you like a bug, Grasshopper!”

It seems Bikram used the argument that the sequence of 26 was tantamount to choreography, and thus entitled to protection under the Copyright Act.

Section 102(a)(4) of the Copyright Act includes choreographic works as subject matter in which copyright protection subsists. Of course, the Copyright Act only affords protection to a work that is "fixed", that is, written or recorded on some physical medium. Thus, courts have found protection in a choreographed work where, e.g. the movements were digitized in a video game (Ahn v. Midway Manufacturing, Co., 965 F. Supp. 1134, 1138 (N.D. Ill. 1997); Martha Gram School and Dance Foundation, Inc. v. Martha Gram Center of Contemporary Dance, Inc., 380 F.3d 624, 632 and n. 13 (2d Cir. 2004) (choreographic work may be fixed by being filmed, videotaped or through use of a written system of notation); Horgan v. Macmillan, Inc., 789 F.2d 158, 160, n. 3 (2d Cir. 1986) (same).

Accordingly, Bikram’s argument was that the movements required for the yoga at issue were comparable to a choreographic work thus were protectable under 17 U.S.C. Section 102(a)(4).

Well, the Copyright Office has weighed in on this, and the answer is . . . No.

After conducting a legislative review of the Copyright Act, the Copyright Office determined that exercises, including yoga exercises, are not protected as choreography.

Breath . . . Deeply.

Because the Copyright Office has extensive experience reviewing copyright claims and the authority to interpret the Copyright Act, courts tend to give deference to its decisions. See Batjac Productions Inc. v. GoodTimes Home Video Corp., 160 F.3d 1223, 1230 (9th Cir. 1998) (deferring to Copyright Office’s refusal of registration, stating “the Register has the authority to interpret the copyright laws and [ ] its interpretations are entitled to judicial deference if reasonable”) (citation omitted); Southco, Inc. v. Kanebridge Corp., 390 F.3d 276, 287 (3d Cir. 2004) (“the Copyright Office’s longstanding practice of denying registration to short phrases merits deference”).

I'm not sure what this means to the creators of Jazzercise, Tae Bo or other exercise routines, but this case does seem to add some clarification to the issue of choreography.

By the way, Gumucio is now suing for a recovery of his fees. So exhale . . . at least for now.

Jonathan Pink is an intellectual property attorney in the Los Angeles and Orange County offices of Bryan Cave, LLP. He specializes in copyright, trademark and unfair competition claims. He can be reached at jonathan.pink@bryancave.com.

Copyright Infringement on the Campaign Trail

2012-02-02T11:14:00.001-08:00

It’s not just the “very poor” who are ticked off at Mitt Romney these days. NBC has got a beef with him as well.

Mitt’s got a TV ad out in which he uses a clip from NBC’s Nightly News, circa 1997. The clip shows Tom Brokaw reporting that Newt Gingrich was found guilty of various ethics violations.

The ad carries the banner “Paid for by Romney for President, Inc. Approved by Mitt Romney.”

But it doesn’t say licensed by Mitt Romney or used with permission by Mitt Romney. And it doesn’t say “approved by NBC.”

NBC, it seems, is not pleased about this. It has insisted that Romney remove NBC’s copyrighted material from the ad, or face a claim for copyright infringement.

And that’s not all. NBC is also threatening a claim for false endorsement, false designation of origin under the Lanham Act, and (on behalf of Mr. Brokaw) a claim for misappropriation of name and likeness.

I like NBC. If I had a TV, I’d definitely watch their station. My hat’s off to their legal team.

Mr. Romney might have said “I’m not concerned about the Copyright Act.” Or “I’m not concerned about the very [NBC].” His campaign apparently intends to continue running the ad. They’ve taken the position that their use of the news clip falls within the “fair use” doctrine.

Really?

Let’s review: 17 U.S.C. § 107 provides that the “fair use" of a copyrighted work “is not an infringement of copyright," but making the determination as to whether “fair use” applies is a case-by-case analysis.

Generally speaking, in determining whether the fair use defense applies, courts consider “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107.

Those factors don’t necessarily bode in favor of the Romney campaign. But then again, maybe what it means by “fair use” is that the Gingrich campaign also engaged in copyright infringement!

You see, Gingrich was sued this week by a former member of the band Survivor for his use of the song “Eye of the Tiger” at campaign events.

Opps. Can’t do that? Public performance? Who knew?

So maybe that’s Romney’s “fair use” defense. Of course, that’s really less of “fair use” and more of a “well he did it!”

But if Romney takes that approach, he’d might also want to pick a couple more wives. Just to make the teams even.

In any event, it helps to know that the leading contenders for the Republican presidential nomination are well versed in copyright laws.

Hint to Romney and Gingrich: it helps to hire a lawyer before using other people’s work. That is, unless the copyright owners are very poor, in which case, we know what Mitt has to say about that.

Jonathan Pink is a copyright and trademark lawyer in the Los Angeles and Orange County offices of Bryan Cave, LLP. His practice focuses on intellectual property and commercial litigation, including arts and entertainment, technology and Internet-related matters. He cam be reached at jonathan.pink@bryancave.com.

A Battle Over the Right to Publish an eBook

2012-02-01T09:34:00.000-08:00

Interesting new dispute brewing . . . and this on the heals of the CCIA report (see post of 1/30/2012) no less.

The CCIA report talks about the general health of the global entertainment industry. In a nutshell, it says that revenue generated from, and the production of, movies, books and music is far greater than prior – mostly entertainment-industry – reports. Put another way, the CCIA report suggests that the entertainment industry is sort of a hypochondriac, and its moans and groans really do not portend its imminent death.

Or so the report says. I’m a litigator, so naturally a skeptic. Of course, as many of you know, my background is on the creative side, so I’m also a big proponent of making something out of nothing – film, music, art . . . self-serving report.

In any event, let’s go with it now, because I only mention it to talk about ebooks.

Just a little background: ebook technology and the devices themselves have been around since at least the 1990s. It’s just that almost no one had them. They were like the man-purse: just didn’t catch on.

Of course now, they’re ubiquitous. The Nook, the Kindle; I suspect the iPad will serve in this same function by the time I’m finished writing this post. I read the New York Times (and the LA Times) on my iPhone so it’s not much different. [Note: we also get the paper edition of the NY Times. It’s just that I’m not supposed to touch it until Andrea’s through with it. So reading it on line allows me to read it when I like, even if she hasn’t finished with it. Also, reading it on line allows me the opportunity to say something in response when Andrea reads me something aloud from the paper, such as:
Her: (Reading) It’s estimated that the Facebook IPO is valuing the company at $75 billion to $100 . . .

Me: (Nearly quoting from the same article, but tossing it off as if it were my own analysis) Really? Sounds like they’re cashing in on the fuel that powers the engine of Internet commerce: personal data. Why, the company has been busily collecting that data for seven years, compiling the information that its more than 800 million users freely share about themselves and their desires. Facebook’s value will be determined by whether it can leverage this commodity to attract advertisers.

Sometimes it works.

Anyway, back to our story. The CCIA report suggests that while the overall book industry has been relatively stable over many years, the digital books market has been experiencing explosive growth. Some publishers think ebooks will completely replace printed books. Certainly, according to the report, sales revenues for ebooks have now surpassed the $1 billion mark, and that’s expected to triple in coming years.

Now, if you’re a traditional publisher, and you have the right to publish a title in print or in the form of an ebook, perhaps this is all good news. After all, the cost of producing and selling an ebook is considerably less than that of a printed book.

If that’s all there were to this, we could all go on with things more important than reading this blog. But . . . what if the traditional publisher who released the book and built an audience doesn’t have the rights to also publish the work as an ebook

How could this be, you ask? Well, let’s say the work was published forty years ago, and neither the publisher nor the writer ever envisioned such things as an ebook, and thus did not include such technology in their publishing agreement. (Hey, if I were to have told you in 1971 that in 2012 you’d be using your camera as a telephone, and a radio and a compass and a map and . . . well, you get the idea. Who’d of thunk it?)

That’s the situation that gives rise to our lasted tale of woe and litigation.

Direct your attention to: HarperCollins Publishers LLC v. Open Road Integrated Media LLP, (case number 1:11-cv-09499) (SDNY).

HarperCollins is suing to stop Open Road from selling an e-book version of “Julie of the Wolves,” the classic 1972 children’s novel.

HarperCollins alleges that Open Media’s publishing of the ebook version of the book infringes HarperCollins’ copyright because it had a preexisting contract with the works author, Jean Craighead George, granting HarperCollins exclusive rights to publish the book “in book form” (at least in the U.S. and Canada).

So, is an ebook a book? HaperCollins thinks so.

What is a book, anyway? A quick Google defines book (at least the noun form of the word) as “A written or printed work consisting of pages glued or sewn together along one side and bound in covers.” Well that wouldn’t include something on the Kindle, but is that definition too narrow?

That’s what the parties will argue over.

HarperCollins claims that its agreement with the author gives it the right to exploit the work “through computer, computer-stored, mechanical or other electronic means now known or hereafter invented.” Under contract law, that would give them a good argument that the agreement was broad enough to include the technology we currently refer to as an ebook.

However, the case is being litigated in New York, and the Second Circuit has taken a fairly narrow view of similarly expansive language in other literary agreements where ebooks were at issue. But maybe the current, more widespread distribution of ebooks will lead to a different result in this case? It would seem that, as the technology works its way into our lives, the views of the jurists may change. We’ll see.

Certainly, if I were a publisher, I’d want to own the ebook rights to everything I had published in hard copy. Conversely, if I were the author of a successful work, I’d welcome the opportunity to renegotiate the ebook-rights. The issue should be of great importance to both camps (including the estates of the authors who entered into these types of agreements in the past), and a favorable ruling for HarperCollins is certain to trigger additional lawsuits, so stay tuned.

One final question: Who is going to retain electronic publishing rights in the future?

That’s easy: all literary agreements written on a go-forward basis are certain to close this loop hole. Publishers will want to make very clear that “new uses” of old works includes absolutely everything, and that the term “in book form” means something much more expansive than “written or printed work consisting of pages glued or sewn together along one side and bound in covers.”

After all, who knows what things will look like in 40 years? Maybe by then we’ll have telephone shoes.

Jonathan Pink is an intellectual property attorney specializing in copyright, trademark and commercial litigation. He is resident in the Los Angeles and Orange County offices of Bryan Cave, LLP. He can be reached at jonathan.pink@bryancave.com.

The Sky . . . Isn’t Falling?

2012-01-30T11:45:00.001-08:00

Well this is interesting, even if some may not want to hear it.

The Computer & Communications Industry Association released a study today entitled “The Sky is Rising,” in which it states that, economically speaking, the entertainment industry grew by 50 percent over the past decade and that consumer spending on entertainment also increased.

I for one am going to more movies again, but I merely attributed this to the fact that my kids are now old enough to watch themselves while Andrea and I catch a flick. In any event, as to doing my part in connection with the economic up tick in the industry, you’re welcome.

A link to the actual report is here: http://www.ccianet.org/CCIA/files/ccLibraryFiles/Filename/000000000586/TheSkyIsRising7-130.pdf .

A brief summary of some of the report’s findings are here:

• Consumer spending on entertainment as a percentage of household income rose 15% between the years of 2000 and 2008;

• Employment in the entertainment industry grew 20% during over the last decade, which apparently includes a large group of individuals – nearly half of the total increase -- who identify themselves as “independent artists”;

• Box office revenue jumped 25% from 2006 to 2010 (talking round numbers, that’s up $6 billion -- from $25.5 billion to $31.8 billion);

• The number movies produced is increasing at a terrific rate: leaping from 5,635 in 2005 to 7,193 in 2009

• The value of the entertainment industry worldwide grew nearly $300 billion between 1998 and 2010, from $449 billion to $745 billion (so nearly $25 B per year); and

• Concert sales in the U.S. went from $1.5 billion to $4.6 billion over the decade from 1999 to 2009. Now that reason to party likes it’s 1999.

As to movies produced, and box office bang, one can only assume that indy films deserve a good deal of credit for this. After all, with the increasing ease with which these films can be made, financed and distributed, many traditional barriers, long faced by film-makers, no longer exist. It’s easier than ever to create a film on a shoestring and actually get it into theaters, or directly into the homes of audience members. This is good news! It means that we’re guaranteed a treasure trove of cinematic gems that never would have seen a screening room 2 decades ago. I can’t see this as anything other than a big win for us all.

But what about the oft-heard dire statements about the death of the entertainment industry at the hands of the Internet? That’s part of what was driving SOPA. Does this mean that Sillywood will not kill Hollywood? Does it mean that Sillywood and Hollywood are on the verge of a new Golden Age, and will wander off, hand-in-hand into the sunset?

Who knows. I for one am encouraged by these figures, but stay tuned. . . .

And in the meantime, stop reading this post and go make a movie, write a film or record a song.

Jonathan Pink is an intellectual property attorney resident in the Los Angeles and Orange County offices of Bryan Cave, LLP. He can be reached at jonathan.pink@bryancave.com.

A Prince of the Art World

2012-01-27T10:10:00.001-08:00

Richard Prince is an artist. At least according to some people. Others have less flattering terms for what he does.

Prince is principally a painter and a photographer. He may be best known for his technique of “appropriating” photographs which he then “rephotographs” to create his works.

One example of this is his work involving photographs from Marlboro cigarette ads of the Marlboro Man. Prince's rephotographed these ads (thus incorporating the works of other photographers) to create his pieces, one of which sold at Christie's in New York for more than $1 million in 2005.

His works have been collected by major institutions, including the Guggenheim.

Shockingly, this practice of “rephotographing” did not sit well with some of photographers whose work appeared in Prince’s pieces. Photographer Patric Cariou is one such photographer.

In December 2008, Cariou filed suit against Prince, the Gagosian Gallery, Lawrence Gagosian and Rizzoli International Publications, asserting copyright infringement in some of the works Prince was showing (and selling) Gagosian’s shop.

Specifically, Cariou alleged that Prince had appropriated 35 of Cariou’s photographs some of which he claimed had barely been changed by Prince. In addition, Cariou alleged that Prince also made more than two dozen paintings that included Cariou’s images.

This is a problem?

Prince argued that his use of the photographs amounted to “fair use.”

As you know, the “fair use” defense is decided on a case-by-case basis. As the Supreme Court noted in its recent ruling in Golan v. Holder (Jan 2012):

[T]he fair use defense, is codified at 17 U. S. C. §107: “[T]he fair use of a copyrighted work, including such use by reproduction in copies . . . , for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.” This limitation on exclusivity “allows the public to use not only facts and ideas contained in a copyrighted work, but also [the author’s] expression itself in certain circumstances.” Eldred, 537 U. S., at 219; see id., at 220 (“fair use defense affords considerable latitude for scholarship and comment, . . . even for parody” (internal quotation marks omitted)).

Well, try as he might to sell the “fair use” defense, the District Court didn’t buy it. In March 2011, US District Judge Deborah A. Batts ruled against Prince, Gagosian Gallery, Inc., and Lawrence Gagosian, finding that Prince’s use of Cariou’s photos was not fair use.

Citing to the case of another pop artist, the court pointed to the 1992 Rogers v. Koons case in which infringement was found (and fair use rejected) in another instance of artistic “appropriation.”

So, what’s an artist to do? Why appeal of course!

This is precisely what Prince did, and now, ladies and gentlemen, the briefs are in and we wait for a ruling from the Second Circuit. (Prince et al. v. Cariou, case number 11-1197.)

Cariou is arguing that fair use does not apply because Prince failed to use his photographs in any transformative way. Prince argues that the pieces were sufficiently transformative because they created something new with a different purpose from the original.

Now interestingly, Prince did not simply rephotograph Cariou’s photos. Prince’s work included collaged, enlarged, cropped, tinted or over-painted images which, he did not deny, had been taken from Cariou's book of photographs “Yes, Rasta.”

However, on the flip side, Prince testified that he “doesn't really have a message” to communicate when he makes art, and that he not transformed Cariou’s images in any way so as to effectively make a comment about them.

I find this a little surprising. I mean, agree with the defense or not, like the work or not, that seems to be precisely what the artist known as Prince is doing. If the artist himself is not make a statement or a comment or an observation, then why does the work itself have any value? It is like Roy Lichtenstein’s famous “comic book” images: if all he’s doing is copying at random images that are not intended to convey something to the viewer, why bother? Why is it art? Certainly, why pay $1M or more for it?

I would expect that turns out to be a tactical error, both in terms of the litigation and in terms of the value of the work.

I’m not taking sides in this one. Having been raised in and around the visual arts, I’m pretty accepting of a wide spectrum of creativity (even when I think it is ridiculously facile, like the works of Damian Hurst), because I’m in favor of encouraging rather than squelching art, artists, creativity, creative effort, etc. It’s all art to me, it just might be shitty art.

This seems to be the view taken by wider artistic community as well. Various museums and others filed amicus briefs arguing that the district court's ruling imperils appropriation art generally. Again, appropriation is nothing new. Look at the works of Warhol, Lichtenstein and Jasper Johns as three well respected examples of this. Are we really going to say artists can’t engage in such activity?

I hope not.

Jonathan Pink is an intellectual property attorney at Bryan Cave, LLP. His is resident in the firm’s Los Angeles and Irvine offices. He represents a wide range of artists (including visual artists, performing artists and musical artists), art galleries and collectors.

Kapow! Holy Batmobile, Batman!

2012-01-26T10:05:00.001-08:00

Haven’t written in a while despite some really important rulings on, e.g. finding of personal jurisdiction based on social network activity, but the following has something that even those weighty and intellectually stimulating topics don’t have: Batman.

Cue Batman music. Ok, it was annoying enough then, kill the music (insert sound of needle scraping LP here).

Batman?

Yes, and more particularly, the Batmobile. Quite possibly the coolest car ever invented. Even you Ferrari drivers know it.
Back to our story.

The case is DC Comics v. Mark Towle et al (2:11-cv-03934), before Judge Ronald Lew in the Central District of California.

It seems that a custom carmaker who goes by the name of “Gotham Garage” decided to build replica Batmobiles. Hey, who could blame him? I want one! I like this guy already! Porsche? Who needs a Porsche? I want a Batmobile, too!

(Just a note: Gotham Garage also apparently builds other custom roadsters to look like iconic vehicles from popular TV shows and movies. Thus, if you wanted your ride to be – the beat up old horse drawn wagon from Bonanza, for example – this might be the shop to turn to.)

But alas, not everyone thought his business plan was such a great idea. Enter DC Comics (a hero in their own right, come on, we have to admit it). DC, ahem, owns the copyright to Batman and all his accoutrements. While DC may love the Batmobile as much as the rest of us, they weren’t too hip on Mr. Towle making replicas and selling them to discerning buyers, comme moi.

So they (or was it our Caped Crusaders?) sued. Copyright infringement. And trademark. And trademark counterfeiting. And unfair competition under the Lanham Act, and common law unfair competition. Hey, these guys are not messing around.

The defendant attempted to have the case dismissed on a 12(b)(6) motion (failure to state a claim). A creative argument, he said that useful articles like automobiles are not copyrightable. Judge Lew said no. He sided with the plaintiff which argued that “While automobiles (in their entirety) may be considered useful articles not protected by copyright, defendant’s motion utterly ignores the issue of separability of nonfunctional, artistic elements of plaintiff’s Batmobiles from the underlying vehicle”.

So, point for the Dynamic Duo. The court found the complaint plead sufficient facts, thus allowing it to move forward.

Next Bat-step? Towles will have to answer DC’s allegations that Towles’ full-size, drivable Batmobile replicas — which include both the version from the 60’s TV show (which is the one I want) and the version from the films infringe DC’s rights as the comic book publisher.

I think the time has come for a quote from Rodney King, with a minor addition of my own: “Can’t we all just get along?” And can’t I have one of the Batmobiles after DC takes possession of them? Hey, I was named a Southern California Super Lawyer, but I don’t even have a cape! At the very least, I should get a car!
Stay tuned. Same Bat Channel . . . ok, I’ll spare you that part.

Jonathan Pink is an intellectual property attorney at Bryan Cave, LLP. He is resident in the Los Angeles and Orange County offices and can be reached at jonathan.pink@bryancave.com. In addition to litigating copyright and trademark issues, he really wants a Batmobile.

36th Annual Intellectual Property Institute in Dana Point

2011-10-12T15:02:00.000-07:00

Ok, I usually don't shill for anybody, but this is a worthy event and, if you're wasting time reading my blog (and yes, George, I know you are), then you might as well know about a really good source of IP information. Namely, the 36th Annual Intellectual Property Institute.

This year the festivities will be held on November 10-12, in Dana Point. It does cost something -- but there are no cops at the door, so even if you're flat broke, super cheap, or both, you could still probably listen from hall -- or ask people what was said on their way out for any particular discussion. Will it be annoying if you do so? Yes. Will you be able to nab some free coffee at the same time? Yes? Does that make it worth it? Doesn't it?

In any event, I am inviting one and all to join me at the 36th Annual Intellectual Property Institute at the Marriott Laguna Cliffs Resort, in Dana Point, California, for excellent continuing legal education programs, networking, meals, fun. On top of all that, you can join in the celebration of the IP Section's IP Vanguard Award honorees: Jay Monahan @ Zynga, Adrian Pruetz @ Pruetz Law Group, Hon. Judge Kozinski @ 9th Circuit, and Eric Goldman @ Santa Clara University School of Law. (Side note: Eric is the person who first showed me the Internet -- so in a way, this entire blog is his fault.)

The Institute is a relative bargain according to the people who are trying to get you to by tickets, and there are steeply discounted resort rates (again, according to . . . .) See http://bit.ly/qHY03s for more information.

And please pass this invitation on to your colleagues and friends. Thanks.

More, Yes More!, On Rule 68

2011-05-09T14:37:00.000-07:00

For no good reason, I'm adding still more information for you on Federal Rule of Civil Procedure, Rule 68. Why? What, you've got something better to read? The New Yorker perhaps. Relax this will only take a minute. Besides, I mention it because it recently came up (again), and it's information worth sharing.

Rule 68 can be an excellent tool in copyright cases, especially where you believe your client may have engaged in an act that will lead to a finding of infringement.

In such a situation, where you believe a judgment is likely to be rendered against you anyway, making a Rule 68 Offer of Judgment is a terrific way to keep the otherside's costs and fees -- which you may be expected to pay under Section 505 of the Copyright Act -- from accruing.

Make the offer early, and you cap the fees/costs if you make a good bet on: (1) the ultimate damage award and (2) the otherside's costs and fees to date.

This is because Fed. R. Civ. P. 68 provides that “[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” In copyright actions, the term “costs” includes a prevailing party’s attorney fees. See, 17 U.S.C. § 505 (“the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”). Thus, a Rule 68 offer will cut off a prevailing plaintiff’s post-offer attorney fees if the judgment he or she receives is less than the defendant’s Rule 68 offer. See, Merek v. Chesney, 473 U.S. 1, 8-10 (1985) (holding that when underlying statute defines “costs” to include attorney’s fees, such fees are to be included as costs for purposes of cost shifting. The court thus concluded that plaintiffs “who reject an offer more favorable than what is thereafter recovered at trial will not recover attorney's fees for services performed after the offer is rejected.”); see also William F. Patry, Patry on Copyright § 22:217 (“Rule 68 [can] be used as a sword against plaintiff to deny plaintiff his attorney's fees postoffer.”).

So in a nutshell, it works like this: You think it's likely you'll get tagged with infringement, but you think damages are worth no more than -- let's keep it simple and say $10,000. You think the fees and costs to date are minimal. Let's say $10,000. You therefore make your Rule 68 Offer for a skosh over $20K, call it $23. If plaintiff is foolish enough to reject that offer, and fails to do better than this figure at trial (measuring damages plus costs and fees as of the date the Rule 68 Offer was made), plaintiff's recovery of fees and costs is capped as of that date.

It's a neat tactic if it works. But then again, what isn't?

Jonathan Pink is Chair of the Internet and New Media Team at Bryan Cave, LLP. He is an intellectual property and commercial litigator resident in the firm's Orange County and Los Angeles offices. jonathan.pink@bryancave.com

Turns out I was Wrong . . . . Rule 68 and Attorneys Fees

2011-04-25T14:30:00.000-07:00

After all this time . . . I had thought that FRCP Rule 68 was an excellent tool to hammer the plaintiff, even where the copyright defendant had in fact copied. This is because an argument exists that the recoverable "costs" under Rule 68 include attorneys fees. Thus, by making a Rule 68 offer early in the game, the defendant could shift the fees burden even if infringement was found (assuming, of course, the offer exceeded what plaintiff was able to recover at trial).

Opps. Turns out I was wrong, at least in part. Turns out there is a split in authority. I've been taking one side, while the 9th Circuit has taken the other.

In Ninth Circuit copyright actions, costs awardable pursuant to a Fed. R. Civ. P. 68 offer of judgment that exceeds plaintiff’s recovery at trial do not include a defendant’s post-offer attorney’s fees. This is because the Ninth Circuit has held that Rule 68 “costs” do not include a non-prevailing defendant’s post offer attorney’s fees when the underlying statute only awards attorney’s fees to a prevailing party. See, Champion Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1031-32 (9th Cir. 2003). 17 U.S.C. § 505, the copyright provision dealing with attorney’s fees awards, provides that attorney’s fees may be awarded as a component of costs, but only to a prevailing party. 17 U.S.C. § 505 (“[T]he court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”).

Thus, because a defendant who is entitled to post Rule 68 offer costs is necessarily not the prevailing party (as the defendant is consenting to judgment), copyright defendants in this Circuit may not recover attorney’s fees as a component of costs. This view is also held by the First, Third, Fifth, Seventh, Eighth, Ninth, and D.C. Circuits. See, William F. Patry, Patry on Copyright § 22:215 (2011).

eBay Gets a Price Reduction

2010-09-07T15:28:00.001-07:00

Ceux qui me connaissent savent que j’aime n'importe quoi français. En effet, mon hantise pour le pays et la culture est si ridicule que j'ai décidé d'écrire ce “post” en français. Vous pouvez me remercier maintenant.

Comme vous vous rappelez, il y a deux ans de Louis Vuitton Moet Hennessy a obtenu une victoire cuisante sur eBay, recevant un jugement €38.6 million (de $49.6 millions) basé sur de tiers ventes (quoiqu'énuméré sur eBay) des marchandises de luxe de contrefaçon de LVMH.
Spécifiquement, en 2008, la cour a ordonné qui eBay était responsable de l'infraction de marque déposée directe ou indirecte basée sur l'utilisation de son site Web de vendre les produits d'imitation de Louis Vuitton, de Christian Dior, de Guerlain, de Givenchy et de Kenzo. La cour a ordonné qu'eBay a eu une responsabilité intensifiée d'empêcher la fraude sous forme de ventes contrefaites sur son emplacement. (Notez-vous que c'est énormément différent du situation aus Etats-Unis, ou en eBay de Tiffany [2d Cir., Avril 2010], la cour a ordonné presque l'opposé.)

Bonnes nouvelles pour eBay! La semaine dernière, une cour française a ramené cette récompense à €5.7 million ($7.3 millions). Malgré cette reduction, la cour de Paris de l'Appel a confirmé la conclusion que eBay avait violé les marques déposées de LVMH par en listant et ventant des marchandises de contrefaçon.

Dans la mode française quintessencielle, eBay et le LVMH a déclaré l'acte une victoire absolue.

Jonathan Pink is a commercial litigator, and business attorney with a specialty in copyright and trademark infringement. He is also an unabashed Francophile. He can be reached – in French or English – at jonathan.pink@bryancave.com; 949-223-7173.

Ansel Adams and the First Sale Doctrine

2010-08-30T11:09:00.001-07:00

Eric Goldman (http://blog.ericgoldman.org), whom I respect a great deal, suggested I consider whether the "first sale" doctrine would apply to Ansel Adams’ alleged long lost negatives dispute. (See post of 8/27/2010 -- http://www.jonathanpinkesq.com/ansel-adams-or-not-the-story-of-a-trademark-dispute.) I now have, and don't believe it does.

While trademark law prohibits some uses of another's trademark, that prohibition is not unlimited. Under the first sale doctrine, when a trademarked product lawfully enters the stream of commerce, typically there is no right to claim infringement against a lawful reseller of the product if the mark is used to identify the goods. See Storz Endoscopy-America, Inc. v. Surgical Technologies, Inc., 285 F.3d 848 (9th Cir. 2002). This is similar to the fair use concept mentioned in my previous, related post, but not identical.

Here, if the photo negatives Rick Norsigian bought truly were the work of Ansel Adams, there is an argument that the Ansel Adams Trust could not prohibit him from selling prints made from those negatives while using the Adams trademark (assuming he uses the mark for purposes of advertising and identifying the goods he's peddling).

The problem is that, from the Trust's perspective, the goods aren't Adams' even if the prints were made from his negatives. The Trust claims Ansel worked his magic in the darkroom (haven't we all?), and that his finished images consisted of more than merely the image photographed, its composition, captured moment, etc.. According to the Trust (and many casual viewers of AA’s work), the art comes equally from how Mr. Adams’ developed those images, selected the tones of lights and darks, etc.. Accordingly to the Trust, without that component, the “work” (e.g. any print made from the found negatives) simply is not the work of Ansel Adams, even if the negatives were created by him. To this end, the Trust will likely argue that the first sale rule does not apply, and Norsigian is not entitled to use the Adams' mark pursuant to that doctrine.

The Trust's argument should carry some punch. While the first sale rule may immunize a traditional reseller from infringement liability, it loses its effect where the goods have been altered, or are materially different from those created by the trademark owner. See Storz, supra, 285 F.3d 848. Also, I am not sure the negatives ever lawfully came onto the market when Norsigian bought them at that garage sale 10 years ago. You will recall that Norsigian claims the glass photographic plates were saved from a fire at AA's studio 70 years ago, but even if this is so, did the garage sale seller gain legal right to their possession, and the concomitant right to resell them? I don't know. In any event, given the foregoing, I suspect Norsigian won't find much safety in the first sale "port" from this legal storm.

On a related, but totally non-legal note: I had a funny and similar experience this weekend. While visiting some friends who were in town at a beach house that had been in their family since the 1930s (which is mostly used as a rental when the family/cousins, etc. aren’t there in the summers), I noticed an oil painting on the wall that was rather nice. Now this place is your typical rental, with mostly your typical rental artwork (stained and tattered reproductions that you’d mostly overlook). But this work was an original oil, and quite nice. My friend said he’d never paid much attention to it; it had been hanging there his entire life, and he assumed that it had been placed there by his grandfather in the 1930s.
As I was taking a close look at it (my mom’s an art dealer, and somehow this is how I learned to closely examine art – plus, my vision is abysmal), I asked “Who did it?”
My friend, now at least a little curious – or very polite – looked for the signature and said “Edgar . . . .” I interjected: “Don’t say Payne.”
“Payne,” he said.
I couldn’t believe it. An Edgar Payne? I told him a little about the artist and suggested that the painting had to be worth at least $45K. “No!” He couldn’t believe it. I told him I was guessing, but suggested we call my mom to see what she thought.

I phoned. She was cooking dinner. I described the work. She asked if was a landscape, I told her no, it had boats, and looked like Newport Harbor. “Oh, it’s one of his seascapes!” Now she is a longtime L.A. art dealer, and has sold Payne’s work to some very well off collectors. I told her the size, a few more details, and said I had guessed its value at at least $45,000. No, she said, “It’s worth at least $150,000.”

My friends were amazed. I felt like we were living an episode of The Antique Road Show. Now they need to get that thing out of the rental! So, just to make a point, . . . these things do happen.

Jonathan Pink is an intellectual property attorney at Bryan Cave, LLP. He is also a member of the firm’s Art Law Team. He can be reached at 949-223-7173, or at jonathan.pink@bryancave.com

Ansel Adams - The Art of the Trademark Dispute

2010-08-27T14:06:00.000-07:00

Yes, it’s been a while since I’ve written. Yes, when I extol the virtues of a blog, I always say write often. I’ll save excuses. (OK, fine; twist my arm: in a nutshell, I became despondent when I took a friend’s offer to jazz up my site and saw my ranking plummet, plummet! From showing up on the first page of a search result to something like the 1,000,000th page! Sheesh!)

In any event, here I am. Surprise!

So where was I? Yes, new case that I just love. God knows why, just one of those cases. It’s styled The Ansel Adams Publishing Rights Trust v. PRS Media Partners, LLC, et. al. (ND CA, Case No. CV 103740 EDL – link should be here, but it isn’t, so stop looking). The complaint runs like 180 pages if you print it (thanks Latham & Watkins; helping out the environment, are we?), asserts ten causes of action: four under the Lanham Act, the same four – drafted as 5 -- under California law, and a claim for violation of publicity under Cal Civ. Code Section 3344.1. Over kill? No, I like it.

So the facts of this one are what I really love. Ten years ago, a resident of Fresno, CA (ouch!) claims to have purchased at a garage sale what he insists are the long lost negatives of pix shot by famed photographer Ansel Adams. Cool. If it’s true. Rick Norsigian says he paid $45 for the box of negs, and is now seeking to sell prints of these “long lost” photos for what could ultimately amount to millions (up to $200 million, according to a July 27, 2010 press conference convened by Norsigian’s team). Gotta admire that.

Well, my friends, the Ansel Adams Publishing Rights Trust does not admire this. No one bit. Not only little bit. Not even a little bit. They claim that none of the 65 negatives that Norsigian claims will make him a mint – uh, I mean are AA originals – are indeed Mr. Adams' early work. The Trust claims that the photos belong to a photographer of lesser talent, or at least lesser financial worth. In any event, according to them, Mr. Adams (“an American icon,” “America’s best-known photographer,” recipient of “the Presidential Medal of Freedom, our nation’s highest civilian honor,”) did not take them. According to the Trust “Plaintiff believes the evidence will ultimately show that Ansel Adams was not the photographer who created the negatives Norsigian claims to have purchased at the garage sale.” At least they hope so! $200 million times!

Covering their basis, the Trust goes on to say, well, ahem, “even if Mr. Adams created the negatives, the prints and posters Defendants are selling are, at most, derivative works – made without authority, direction, control, or permission of the Ansel Adams Trust.” To this end, the Trust asserts that the defendants’ use of Mr. Adams’ name and likeness and the Ansel Adams trade mark “are likely to cause confusion, mistake, and/or deception as to the source, origin, endorsement and approval of Defendants’ products. This is really where the rubber hits the road, or photographic image hits the plate, in this case. That is, if the works weren’t done by the master, fair enough, game over, no $200 mil (except maybe for the lawyers). But if they were, then it would seem that Norsigian and company have a pretty good defense based on fair use, at least as to the TM claims.

The fair use defense is available to one who, in good faith, fairly uses a descriptive term that has acquired a secondary meaning and is now protected by trademark, in a descriptive sense rather than its trademark sense. See e.g. Sunmark, Inc. v. Ocean Spray Cranberries, Inc., 64 F.3d 1055 (7th Cir., 1995); United States She Corp. v. Broucn Group Inc., 740 F. Supp. 196 (S.D.N.Y.), aff’d 923 F.2d 844 (2d Cir. 1990); Cairns v. Franklin Mint Co., 292 F.3d 1139, 1150 (9th Cir. 2002) (“classic fair use” concerns the defendant’s use of the plaintiff’s mark to describe the defendant’s own product); Playboy v. Welles, 279 F.3d 796 (9th Cir. 2002) (House-of-Hef sued its former top bunny, Terri Welles, for using the words "Playboy" and "Playmate of the Year" in her website’s metatags; Welles won, arguing that these terms were necessary to describe her as "Playboy Playmate of the Year 1981.")

For this defense to work for Norsigian et Co, they’ll have to establish three elements. First, that the Ansel Adams name is used in its descriptive sense; second that it used the mark in good faith; and third that it has not used the mark as a trademark. See Car-Freshner Corp. v. S.C. Johnson & Son, Inc. 70 F.3d 267 (2d Cir. 1995); Packman v. Chicago Tribune, Co., 267 F.3d 628, 641 (newspaper’s use of “ The joy of six” as headline to describe the happiness associated with basketball team’s sixth championship held to be descriptive use); EMI Catalogue Partnership v. Hill, Holliday, Connors, Cosmopulos Inc., 228 F.3d 56, 66 (2d Cir. 2000); TCPIP Holding, Co., Inc. v. Haar Communications, Inc., 244 F.3d 88, 104 (2d Cir. 2001) (use of term as name of portal website precluded finding of fair use).

Courts have also found that nominative fair use exists where the defendant used the plaintiff’s mark simply to describe the plaintiff’s own product. Cairns, supra, 292 F.3d at 1150; Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350, 352 (9th Cir., 1969) (defendant permitted to advertise that he repaired Volkswagen vehicles as long as he indicated his independent nature and did not use logo or script of plaintiff); Wells, supra, 279 f. 3d 796 (defendant’s title “Playmate of the Year 1981” could be used to identify herself on her website and to index the content of his website, but stylized use of “PMOY ’81” abbreviation held not a nominative use because it was not necessary to describe defendant).

Based on this, and assuming arguendo the photos are legitimately the work of Ansel Adams, it would seem to me that Norsigian has a right to use the Ansel Adams mark to describe the product he’s shilling. See Rock and Roll Hall of Fame and Museum, Inc. v. Gentile Productions, 134 F.3d 749, 756 (6th Cir. 1998) (use of the words “Rock N’ Roll Hall of Fame – Cleveland” underneath photo of museum on poster may constitute fair use of Museum’s registered mark). I mean, how else are they going to describe the work? “They’re by that guy, the one with the beard, the broad brimmed hat, who used to take photos of Yosemite. You know who I mean? Think the first letter of the alphabet . . . times two!” I don’t think so. If they were taken by Adams, I think the trademark and unfair competition claims fail. Nice try.

As to the name and likeness claim, I like that one a bit more. California Civil Code section 3344.1 provides for recovery of damages for the unauthorized use of a “deceased personality’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent. . . .” It appears for the advertising or promotional material that plaintiffs attached to the complaint in this matter that the defendants did indeed use Ansel Adam’s photo in promoting what they claim are his photographs. Notably, this statute allows for a recovery of “the greater of seven hundred fifty dollars ($750) or the actual damages suffered . . and any profits for the unauthorized use.” It also allows for a recovery of attorneys fees, which may drive this claim in a big, bad way. That is, I doubt plaintiff can establish that Norsigian’s reprints of the negatives at issue sold because the defendants’ used Ansel Adams’ mug on their promo material. That brings the damage number for this claim down to $750, plus attorneys fees. Did I mention that Latham is handling this matter?

So by my score keeping, the game goes like this: if works are proved to be legit, the plaintiff loses on everything but name and likeness, and then gets only a fraction of its legal fees for that portion. Big win for defendants. If the works are shown not to be those of Ansel Adams, it’s a big win for plaintiff, a big, big loss for the defendant. In any event, it should be fun to see if these really are Ansel Adams’ works (frankly, I’m betting against it, but then I Star Wars was going to bomb when I first saw the trailer), and to see whether the fair use defense comes to defendants’ rescue if the works are legit.

Jonathan Pink is an intellectual property attorney at Bryan Cave, LLP. He can be reached at jonathan.pink@bryancave.com.

Social Media Barriers, Benefits and Bombshells

2010-06-25T15:19:00.000-07:00

I’ve given my “SOCIAL MEDIA Barriers, Benefits and Bombshells” talk quite a lot lately. In light of this, I’ve decided to simply post it here.

This talk usually lasts about an hour, so read this post s-l-o-w-l-y.

Also, the talk is punctuated by cartoons of my own creation. So laugh heartily every 5 minutes or so.

First slide: Title.

Second slide: “But First”: The big points: (1) With nearly limitless boundaries, social media gives consumers unprecedented engagement with the brand; (2) historically this engagement was controlled by the brand owners, but social media has changed that, giving consumers even-increasing control over how a brand is perceived; (3) smart and forward-looking companies are adopting social media policies in light of this; (4) every company should develop a social media plan; (5) the basic rules of the road are: engage, participate, influence and monitor.

Third: The Road Map. What we’re going to talk about: what is Social Media; barriers; benefits; bombshells (e.g. issue spotting); creating a policy.

Fourth: Social Media. Everyone thinks of Facebook, LinkedIn, Twitter, MySpace, and YouTube, but there are actually thousands of social media sites including blogs, Google Groups, Chatroulette, haul sites, review sites, etc.

Fifth: Facts and Opinions. Because it is so inexpensive and accessible, social medial enables anyone to publish, provides a fast, scalable and cost-efficient way of connecting worldwide. But this global conversation can cut both ways: marketing goldmine and minefield of liability. Participation in social media sites now accounts for 11 percent of all time spent online in the US.

Sixth: Useless (But Interesting) Statistics. Facebook has 400 Million users (at 350million it would have constituted the 4th largest country in the world); LinkedIn has 60 Million users, but just announced its IPO (with a pre-money valuation of $1.3 billion); Twitter has 105 million registered users; 50 million tweets/day; Yelp (a great place to gripe!) has 30+ million visitors a month; YouTube is the 6th largest site on the Internet, with 71 million unique users per day (meaning that more people watch its content on a daily basis than they do network and cable TV combined). Add to all of this more than 200,000,000 blogs, and you get the “tip” of the social media “iceberg.”

Seventh: Barriers. First hilarious cartoon, but other than that, not much. There are no barriers, so move along.

Eighth: Benefits. Next cartoon (more belly laughs), and a list of the benefits. Basically, psychological research shows that feelings of connection to other people lead to longer, healthier, happier lives. Also, employees seem to like the ability to use it while at work, and a recent Wired article suggests that it makes them happier and more productive. Add to this, the ability to build brand awareness, monitor what customers are saying, respond to their needs, wants and comments. All in all, social media = good. Next slide, please.

Ninth through Twenty-Ninth: Bombshells: Cartoon and parade of horribles. Copyright infringement, trademark infringement, disclosure of trade secrets, SEC violations, defamation and business, libel, not to mention the various employment-centric pitfalls. It’s a wonder anyone uses social media without being sued.

Also: How to keep from being sued in light of the bombshells – Don’t engage in copyright infringement, trademark infringement, disclosure of trade secrets, SEC violations, defamation and business, libel, or the various employment-centric pitfalls. It’s a wonder anyone uses social media and gets sued.

Thirtieth Slide: Funny cartoon and “Embrace it.” This slide suggest that social media isn’t going away, so you need to engage it using all levels of your organization. This means, first and foremost, and in all seriousness, having a social media policy.

Next slide (who’s counting?): The Social Media Policy. There is no one-side fits all, but this should include:

• Employees cannot do anything online that they cannot do offline

• Personal use of SM cannot interfere with work. No different than reading magazines all day.

• Employees should use common sense about what they post.

• Employees identify themselves and must not purport to be posting on behalf
of the company.

• If employees make personal comments about any aspect of the organization’s business, their profiles must carry a disclaimer that the views expressed are their own, and not the organizations.

• Posts may not contain confidential or proprietary information of the company or third parties.

• Any use of the organization’s name, trademarks, logos or other intellectual property must be approved.

• Employees must get company approval to use SM to conduct business.

• Delineate privacy rights…no expectation of privacy while at work.

• Posts should not violate any federal or state laws.

• Posts should not harass or attack anyone, especially based on inclusion in protected category.

• Posts should not violate any other applicable policy of the Company.

Which slide are we on?: Rolling out the policy: Be fair. Explain it clearly. Have it apply to all, from CEO to the person who waters the plants.

Final slide: Remember that the FTC passed new guidelines in 2009 that create possible liability for those who make endorsements and testimonials, and for the companies on whose behalf these are made. Social media is a tool that should be used wisely. Being wise starts with having a policy. So go, now – yes now – and work on getting a policy in place.

That’s it. Show’s over. Back to work.

Jonathan Pink is an intellectual property and business litigator resident in the Irvine (Orange County) office of Bryan Cave, LLP. He is Chair of the firm’s Internet and New Media Team, and a really funny cartoonist. He can be reached at 949-223-7173 or at jonathan.pink@bryancave.com.

Something to Chat About – Are Letters and Conversations Protected by Copyright?

2010-06-08T10:43:00.000-07:00

I admit, I can never keep straight these categories of potential copyright protection. Ok, for the record, and so that I have something to look back at the next time I’m feeling utterly confused on the topic, here it is for once and for all (um, or at least until some higher court says otherwise).

Letters, lectures, speeches are all protected by copyright. See e.g. Salinger v. Random House, Inc., 811 F.2d 90, 94-95 (2d Cir. 1987) (author of letter owns the copyright in its contents, while the recipient of the letter retains ownership over the physical document); Jackson v. MPI Home Video, 694 f. Supp. 483 (N.D. Ill 1988) (Jesse Jackson’s speech at the 1988 Democratic Party Convention found protectable as a literary work).

Now what about simple conversations? Well, there my friends, I’m afraid the law is unclear. A conversation is considered something different from a lecture, which is generally written prior to its delivery. That is, just think of a politician at the podium absent a carefully crafted speech. Most of them would be as dumbfounded as say Dan Quayle or George Bush (Version II). I’m not counting Obama in this, of course. The man is a master orator. He’s also refreshingly intelligent.

In any event, the trend appears to be that conversations are not protected by copyright except in extraordinary circumstances. Like when, you ask? Well, the classic conversation case is Estate of Hemingway v. Random House, Inc., 23 N.Y.2d 341, 296 N.Y.s. 2d 771 244 N.E. 2d 250 (1969). In that case, the NY Court of Appeal stated that while there is a presumption that conversations are not copyrightable subject matter, there may be limited an special circumstances where that presumption may be overcome. Specifically, the court said that where the speaker indicates that he/she intends to mark off the utterance at issue from his/her ordinary stream of speech, and further indicates that he/she wishes to exercise control of the statement’s publication. Uh-huh, that happens all the time.

Other courts have taken a more narrow view of things (as if this were possible). See e.g. Falwell v. Penthouse International, Ltd., 521 F. Supp. 1204. 1207-1208 (W.D. Va. 1981) (“Plaintiff’s claim of copyright presupposes that every utterance he makes is a valuable property right. If this were true, the courts would be inundated with claims from celebrities and public figures all of whom may argue that their expressions should also be afforded the extraordinary protection of copyright. Such a result . . . would run counter to the firmly established constitutional guarantees of freedom of speech and of the press.”) E.g., a judicially delivered body slam with the implicit message: no!

So now that we’ve gotten this straight, we return to something important: a hot cup of coffee and looking for food in the office fridge.

Jonathan Pink litigates copyright, trademark and patent infringement cases in courts throughout the country. He also handles business litigation disputes and occasionally publishes cartoons worthy of the New Yorker (if only the New Yorker would agree). He can be reached at 949-223-7173.

Something to Yelp About!

2010-06-04T09:37:00.001-07:00

I have broken one of my own rules of blogging: e.g. to post often and with some regularity. Fortunately, my other rule is don't sweat rule No. One. After all, blogging is great, but life is short and there are plenty of other things to get done.

Which brings me to nearly pointless point No. Two: I'm writing this on my BBerry, while attending my child's elementary school, Spring Concert. (The budding cellist has already left the stage, so I'm keeping my priorities straight.) Just like the fact that I'm drafting on the BBerry. Ain't modern conveniences grand?

Ah, so much to talk about since last we chatted -- so little screen. Also, alas, I don't have my research at my side, so my usual useless drivel will be a little less useful with this post. So bear with me (and just remember: you're not paying for this, so you get ... Well, you get the idea).

The main point of this ramble is simply this: I have seen a significant uptick in lawsuits filed by disgruntled service providers and assorted business entities who are peeved by comments made about them on review sites such as Yelp! Interesting because, well, these companies are lashing back at those who have lashed out.

Is this legally acceptable? Sure. If the first lasher engaged in any unlawful conduct, such as defaming the second lasher (the lash-backer?) then a claim by the latter would be fair play. Brief Internet primer: the same rules of the road apply even if the highway has changed.

Now, will some companies try to silence legitimate speech by filing meritless claims? Oh please. No, that would never happen ... everyday. So, this is simply to be expected. The take-away? Post, gripe, complain, kvetch, but don't defame. Got that?

This is all of particular interest to me as I posted a complaint on Yelp just this week. I will never go back to Great Clips in Irvine again! Will the loss of my business hurt them one bit? No, plenty of people will continue to have their hair butchered there because it is cheap (and not worth a penny more), bit it sure felt good to lay into them on Yelp.

Ok. That's it for now. Shuffle some papers so the boss thinks you're working!

Jonathan Pink is an intellectual property and commercial litigation attorney resident in Orange County, California. He specializes in copyright, trademark, patent and business disputes (including claims arising out of alleged defamation on the Internet). He can be reached at 949-223-7173.

Upper Deck Safe From Infringement Claim

2010-03-09T14:28:00.000-08:00

You know, I’m so b-a-d (oh, uh, that spells “bad” for those not yet awake) about getting new posts up here. (Oh please, it’s not like anyone’s paying me for this stuff, so lay off!) But I’ve been meaning to write about this one for a while, so – although it may be a little stale – here it is anyway.

This is the story of a patent suit. (The patents-in-suit are Numbers 5,803,501 and 6,142,532.) And the story involves entrepreneurs who sought protection for attaching sports memorabilia to baseball cards. Sort of like, buy the card, get the ball – or a shred of the player’s jersey. (What ever happened to buy the cards get the cardboard gum? I loved that stuff. It was filled with mystery – like the meat Jack-in-the-Box puts in its tacos. Anyway, I always liked the gum more than the cards, or the game for that matter, but then that’s me.)

So back our story. You know what they say, Federal Judges are the speed bumps on the road to commercial success. (“They” in that last sentence is “me” as in this blog, but go with it.) Specifically, the Court of Appeals for the Federal Circuit voted earlier this month to affirm summary judgment that Media Technologies Licensing LLC's patents were obvious based on pre-existing cards that featured entertainment memorabilia including, among others, the Fab Four, James Dean and Marilyn Monroe. Given this, the court stated that anyone with skill in the card/memorabilia area could have come up with the idea of attaching sports memorabilia to sports cards.

Easy come, easy go. The original patent-in-suit covered sports trading cards with a piece of that player’s uniform or other noteworthy item attached. (Maybe they should have attached steroid prescriptions and urine samples. Now that would have been interesting. Sports nuts – I just don’t get ‘em.) In any event, the Upper Deck Co. started selling something similar, Media Tech sued, claiming patent infringement. The district court granted summary judgment on the grounds that the patents were obvious, and now the Court of Appeals has agreed.

The net result? Upper Deck makes it home, safe from an infringement claim. Now if only these card makers would try something new, like inserting little strips of cardboard-like chewing gum in with the cards. Now there’s an idea!

Jonathan Pink is an intellectual property and commercial litigation attorney resident in the Irvine (Orange County) and Los Angeles offices of Bryan Cave, LLP. He specializes in handling high states copyright, trademark, patent and business disputes, and can be reached at 949-223-7173 or jonathan.pink@bryancave.com.

Supreme Court Changes Diversity Test

2010-03-01T16:32:00.000-08:00

The question of what constitutes “diversity” for purposes of diversity jurisdiction in Federal Court pursuant to under 28 U.S.C. § 1332 has been the topic of some disagreement amongst the Circuit Courts. That’s about to change.

Last week, the U.S. Supreme Court ruled in Hertz Corporation v. Friend that a corporation’s principal place of business is where its “high-level officers direct, control and coordinate the corporation’s activities.” In other words, the location sometimes referred to as the company’s “nerve center.”

28 U.S.C. §1332(c)(1) provides that a corporation is deemed a citizen of any State in which it has been incorporated (that’s the easy one), and anywhere it has its principal place of business. That last provision has given many courts pause, as they try to decipher where a company has its “principal place of business.” For example, the Ninth Circuit, along with the (Fifth, Sixth, Eighth, Tenth and Eleventh) followed a “totality” approach that looked at the location of the corporation’s overall activities, treating the “never center” as only one of several factors.

In Hertz, the District Court used this approach, ruling that Hertz’s principal place of biz was California, notwithstanding the fact that its executives, its headquarters and of course many of its cars were located outside of California. So why the Golden State, the 9th Circuit reasoned that Hertz earned the most money in California, and the majority of its employees were located here.

The Supreme Court took a different approach, chiefly focusing on the meaning and context of §1332’s use of the words “principal” and “place.” First, the Court noted “place” is singular, not plural, meaning that courts should consider if there is a “main, leading or most important” location within a state, not at the company’s activities throughout the state, and then ask whether those activities are “significantly larger” than they are in the next state where the company has a presence. The Court said that the “nerve center” test met the goal of administrative simplicity because it focused on finding the corporation’s “brain,” rather than deciding where the majority of the body parts might lie. The Court explained that it would not be enough for a company to claim that its “headquarters” was the state where it had nothing more than a “mail drop box, a bare office with a computer, or an annual executive retreat.” Rather, the “nerve center” is where “actual direction, control, and coordination” of corporate activities take place.

We’ll have to see how this test works in the Internet age, where the “never center” may be telecommuting from different states.

Jonathan Pink is an intellectual property and commercial litigator. He specializes in trademark, copyright, patent and contract disputes, having litigated such cases in state and federal courts across the nation. He is resident in the Irvine (Orange County) and Los Angeles offices of Bryan Cave, LLP. He can be reached at 949-223-7173 or at jonathan.pink@bryancave.com.

State Courts Should Follow 9th Circuit's Lead in Taking Judicial Notice

2010-02-24T13:49:00.000-08:00

A dichotomy exists between California state procedural law and Ninth Circuit case law with respect when a court make take judicial notice of a document in connection with ruling on a motion to strike or demurrer/motion to dismiss. As discussed below, the rule adopted by the California state courts can lead to an injustice that does a disservice to the public and wastes judicial resources. The California state courts should follow the federal rule, which simply makes much more sense.

With respect to both a motion strike and a state court demurrer, the court is limited to the facts alleged on the face of the complaint, as well as those matters of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code. Code Civ. Proc. §§ 430.70, 437(b). California Evidence Code Section 452(h) provides that the court may take judicial notice of “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” Cal. Evid. Code § 452(h).

For purposes of this diatribe, let’s assume that parties entered into an agreement for the purposes of seeking a possible early settlement of a brewing (not yet filed) dispute. Assume the agreement provides that any settlement discussions would be confidential, and not disclosed in any proceeding between the parties. Now assume that, when plaintiff eventually files its lawsuit, and that lawsuit violates terms of the parties’ agreement by basing its claims on the contractually protected settlement discussions. Finally, assume the plaintiff omits any reference to that agreement in its complaint, and when the defendant moves to strike portions of the pleading because they violate the agreement (and are thus “irrelevant . . . or improper matter inserted in any pleading” under Code of Civil Procedure section 436A), the plaintiff objects that the court may not take judicial notice of the agreement. See CLD Const., Inc. v. City of San Ramon, 120 Cal.App.4th 1141, 1145 (2004) (Section 436 gives court discretion to strike all or any part of a pleading not filed in conformity with California law).

Under California state law, where the plaintiff omitted a pre-litigation agreement from inclusion in the complaint, and in opposition to a motion challenging the pleadings, disputes the validity of that agreement (even without legitimate basis), the court may deny the defendant’s motion on the grounds that it is unable to take judicial notice of the documents’ preclusive effect. Gould v. Maryland Sound Industries (1995) 31 Cal. App. 4th 1137 and Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal. App. 4th 97 would arguably support that ruling.

Both Gould and Fremont involved contracts, the terms of which were disputed by the parties. For example, in Fremont, the court held that the contents of a letter should not have been judicially noticed at the demurrer stage because the parties disputed the meaning of their contractual relationship and the enforceability of the contract. Id. at 115-117.

While both cases have been used to support the proposition that the court may not take judicial notice of a disputed contract, it should be noted that Gould is not so Draconian in its holding. It expressly limited its decision “to attempts to establish the existence of a contract under the ‘indisputable facts’ provision of Evidence Code section 452, subdivision (h). . . . We do not rule out the possibility the existence of a contract could be established by judicial notice under different circumstances, e.g. through reference to the plaintiff’s pleadings or discovery responses in the same or a different action. [Citations omitted.].” 31 Cal. App. 4th at 1145, n. 1. It is not clear, however, how much “reference” in plaintiff’s pleadings is sufficient (does it satisfy Evidence Code section 452(d) that the plaintiff acknowledges the agreement in its opposition to a motion to strike and demurrer?); nor how much acknowledgment in response to discovery might be required to overcome the bar (is it enough that plaintiff acknowledges the existence of the agreement?).

Gould is consistent with Stormedia Inc. v. Superior Court (1999) 20 Cal. 4th 449, 457, fn. 9, which states “We deem it appropriate to [take judicial notice] here as real parties in interest also refer to some of the documents in their briefs.” Also, courts have held that the truth of statements made by a party is a matter subject to judicial notice. C.R. v. Tenet Healthcare Corp. (2009) 169 Cal. App. 4th 1094, 1103 (citing to Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal. App. 3d 593, 604-605). In Del E. Webb, the court held that judicial notice could be taken of records such as admissions, answers to interrogatories, affidavits, and the like, if they contained statements made by the plaintiff which were inconsistent with the allegations of their pleadings. Del E. Webb, supra, 123 Cal. App. 3d at 604-605.

So, back to the hypothetical: Suppose that plaintiff has admitted in discovery responses that it entered into the parties’ agreement, and even quoted in its Opposition to defendant’s motion the very language defendant is relying upon. It would seem that the agreement’s content, like a party’s own statements, cannot be reasonably disputed and may be judicially noticed. Notwithstanding the caveats in Gould and the ruling from Stormedia and Del E. Webb, many state courts simply won’t go out on a judicial ledge and take judicial notice of the document at issue. Fair enough: Fremont is a leading case, but it is worth the court’s time to recognize that it and some of the other cases addressing this issue place too much emphasis on stare decisis where those earlier cases have similarly failed to dig into the public policy underpinning and effect – not to mention the federal approach in this area. This inevitably leads to bad law born of bad basics.

Notably, even Stormedia did not spend much time analyzing this issue, and Gould v. Maryland contains some fairly significant carve-out language that courts should heed. Moreover, even Gould does not account for the obvious short coming of the hard-line rule by ignoring the calculating plaintiff who intentionally ignores the preclusive effect of an agreement when drafting the complaint, then claims to “dispute” that agreement when the court is asked to take judicial notice of it for purposes of trimming the complaint to fit the contractual limitations set by the parties themselves. Of course, that is asking a lot of those who take the bench, and I recognize that most don’t want to be overturned on appeal. But that’s the risk that comes from exerting intellectual courage and blazing judicial trail.

The 9th Circuit’s approach makes more sense, is founded on better public policy, and provides for greater judicial efficiency. Recognizing that a plaintiff may try to skate past the pleading stage by withholding any mention of a preclusive pre-litigation agreement, it has ruled that “documents critical to plaintiff’s claims, but not explicitly incorporated in his complaint” may be considered by a district court when ruling on a motion to dismiss provided neither party questions the authenticity of that document. Parrino v. FHP, Inc. et. al 146 F.3d 699, 705-706 (9th Cir. 1997).

In Parrino, Mr. Parrino’s estate sued FHP, his HMO, alleging the defendants had improperly denied his initial claim for therapy. The defendants asserted that the plaintiff’s claims were preempted by ERISA, and sought to introduce the FHP Master Group Application (in support of that defense) when ruling on their motion to dismiss. The district court considered that plan – which had not been referenced in or attached to the complaint – and based in part thereon, granted the defendants’ 12(b)(6) motion to dismiss. Plaintiff appealed.

In ruling on this issue, the Ninth Circuit stated that public policy supported a rule that prevented “plaintiffs from surviving a 12(b)(6) motion by deliberately omitting references to documents upon which their claims are based. [Citations omitted.] At least one other circuit has held that if a plaintiff’s claims are predicated upon a document, the defendant may attach the document to his Rule 12(b)(6) motion, even if the plaintiff’s complaint does not explicitly refer to it. See Cortec Indus., Inc. v. Sum Holding, L.P., 949 F.2d 42, 47 (2d Cir. 1991) . . . . We therefore hold that a district court ruling on a motion to dismiss may consider a document the authenticity of which is not contested, and upon which the plaintiff’s complaint necessarily relies.” 146 F.3d at 706.

Based on the foregoing, Parrino held that because the plaintiff’s claims rested on his membership in the FHP plan, documents governing that plan were “essential to his complaint.” Id. Since that ruling, Parrino has been followed by a number of other courts in the Ninth Circuit. See e.g. Mehmet v. Paypal, Inc., 2008 U.S. Dist. Lexis 64018, *6 (“court may take notice of a document outside the complaint if [it] is referenced in, or relied on by, the complaint”); Wietschner v. Monterey Pasta Co., 294 F. 2d 1102, 1110 (where plaintiff fails to attach document upon which complaint is premised, defendant may attach a copy of same to its motion to dismiss in order to show that document does not support plaintiff’s claim.)

The California state courts should look closely at Parrino and its progeny, and take careful note of the policy unpinning those rulings. Where a document is integral to the plaintiff’s claims and its authenticity is not disputed, the plaintiff should not be heard to complain when the defendant asks the court to take judicial notice of it. (Indeed, the court should consider the plaintiff’s omission with some degree of skepticism, much as we ask our triers of fact to consider inconsistent statements when ruling on a witnesses’ credibility.) Public policy dictates that we not waste judicial resources, or permit parties to waste each others financial resources, by allowing claims to proceed beyond the pleading stage where a clear, uncontested written agreement between the parties precludes such an action.

While it is true that, under the facts I’ve proposed, the agreement will – at some point in the litigation – have the preclusive effect urged by the defendant, does it really advance the interest of justice to force the defendant to go deeper into the legal woods to get there? I don’t think so. California states courts should adopt the 9th Circuit’s approach and consider a document whose authenticity is not contested, and upon which the plaintiff’s complaint necessarily relies, when ruling on an initial challenge to the complaint.

Jonathan Pink is a commercial litigator with a specialty in high-stakes copyright, trademark and patent infringement lawsuits. He is Co-Chair of the Internet and New Media Team at Bryan Cave, LLP, and is resident in the firm’s Los Angeles and Irvine (Orange County) offices. He can be reached at 949-223-7173, or at jonathan.pink@bryancave.com.

No Infringement for Cussler Bros., Adventure Novelists

2009-12-22T11:21:00.000-08:00

Ka-Pow! The District Court in Hawaii ruled recently that the adventure novel Treasure of Khan by Clive Cussler and Dirk Cussler (the nineteenth Cussler yarn to feature the character Dirk Pitt) did not infringe plaintiff’s novel, Gold of Khan, about Marco Polo's lost treasure. (Doody v. Penguin Group (USA) Inc., D. Haw., No. 08-cv-00285-JMS-BMK, 11/23/09.)

Specifically, the court found that there was no substantial similarity between the protectable elements plaintiff’s work those the Cussler novels. From a plaintiff’s perspective, this amounts to a superhero body slam.

As an aside, you will recall that copyright protection does not extend to ideas or facts. 17 U.S.C. Section 102(b). It does, however, protect the original expression of ideas or facts. Also, mere themes and bare plots are not protected. Midas Productions, Inc. v. Baer, 437 F. Supp. 1388, 1390 (C.D. Cal. 1977). There is also agreement among the circuit courts of appeal that a stereotyped characters are not protected by copyright; a character must be sufficiently fleshed out to constitute more than an idea, or more than a stock character. Walt Disney Productions v. Air Pirates, 581 F.2d 751 (9th Cir. 1978); Miller v. Universal City Studios, 650 F. 2d 1365 (5th Cir. 1981); but see the widely criticized, Ninth Circuit “fleshing out” and “story being told” tests in e.g. Metro-Goldwyn-Meyer, Inc. v. American Honda Motor Co., Inc., 900 F. Supp., 1287, 1296 (C.D. Cal 1995 (James Bond character protected because a James Bond story without 007 is not a Bond story).

Ok, back to our regularly scheduled programming: The Court in Doody also rejected the plaintiff’s argument that the Court’s similarity analysis should be based on a comparison of the plaintiff's work with the defendants’ books as a whole. The Court said that “[t]o accept Plaintiff's proposition would mean that ‘hardly any drama since the Garden of Eden could survive the charge of plagiarism.” (Quoting Rose v. Connelly, 38 F. Supp. 54 (S.D.N.Y. 1941).

Jonathan Pink practices in the areas of intellectual property and commercial litigation at Bryan Cave, LLP. He is resident in the firm's Los Angeles and Irvine offices, and is Co-Chair of the firm's Internet and New Media Team. He can be reached at 949-223-7173.

Google et Les Françaises -- Hardly a French Kiss

2009-12-21T15:01:00.000-08:00

Google et Les Françaises . . . So let’s see, the Can-Can began-gan in Paris. But now, Google has come to find that Can’t-Can’t has originated there as well.

A Paris court has ordered Google to cease its scanning and subsequent distributing of French books online. The court awarded the plaintiffs roughly $400,000 (US) in damages, and ordered Google to pay about $14K per day that the material remains on the web. The plaintiffs had sought about $26 million in damages.

You will recall that Google has made a global push to digitize books – becoming, in a sense, the Digital Alexandria – and has received quite a bit of flack/resistance and legal bills for its efforts. In the U.S., Google reached a proposed settlement with class plaintiffs over a similar issue, and the Court just recently approved of that proposal. Notably, it excludes foreign works published after January 5, 2009, provided such works had been registered with the U.S. Copyright Office by that date, or had been published in Canada, the United Kingdom or Australia by then.

Jonathan Pink is a commercial litigator with a specialty in high-stakes trademark, trade dress, copyright, patent and trade secret disputes. He also has extensive experience litigating claims for breach of contract, fraud, unfair practices, trade libel and a broad spectrum of intellectual property matters in state and federal courts across the nation. He is resident in Bryan Cave's Irvine (Orange County) and Los Angeles offices, and is Co-Chair of the firm’s Internet and New Media Team. He can be reached at jonathan.pink@bryancave.com.

Storm Troopers, Copyright Infringement and a Bit of Clever Luck

2009-12-20T16:05:00.000-08:00

Some months ago I wrote about a case I was handling involving an Italian company accused of infringing a U.S. copyright. The infringement alleged against my client occurred in Italy. According, my defense was that the U.S. courts had no jurisdiction over the claim because -- well, see earlier post ("An Italian Fling") for that analysis. The bottom line is they don't, and as a result, the plaintiff's million dollar claim became the parties' several thousand dollar, nuisance-value settlement.

This post deals with the flip side of that issue. Here, Lucasfilm Ltd. prevailed in a U.S. court against British national, Andrew Ainsworth, ruling that Mr. Ainsworth (one of the costume makers who made the storm trooper helmets used in its Star Wars films -- can you say "cool!"), replicated those helmets and sold them over the Internet to customers in the U.S. Mr. Ainsworth is nothing if not industrious -- and creative, and apparently rather clever.

Lucasfilm sued for the U.S. Based copyright infringement, and Mr. Ainsworth largely ignored them. The court entered a default judgment entered against him, and Mr. Ainsworth (ok, I'm imagining here) yawned. After all, Mr. Ainsworth lives in England and the judgment against him was way over here on the other side of the pond.

So back to my "flip side" comment. If a U.S. court does not have jurisdiction over foreign infringement (and again, remember the court here tagged Ainsworth for U.S. based infringement), does its domestic rulings have an international reach? As Lucasfilm discovered, apparently not.

Lucasfilm tried to enforce its U.S. judgment against Ainsworth in England, and the court there said "I should say not!" (or upper crust words to that effect). Now, a second British court has sided with the first, ruling that Mr. Ainsworth is safe from a U.S. default judgment entered against him. (Lucasfilm Ltd. & Ors v. Ainsworth & Anor, case number [2009] EWCA Civ 1328, in London's High Court of Justice, Court of Appeal (Civil Division).)

Hence my comment that Mr. Ainsworth is industrious, creative, and cleaver. Now, if this result was based on dumb luck rather than a calculated risk, I suppose we could substitute the adjective lucky.

In fairness, while Ainsworth's sales ran afoul of U.S. copyright law, they are legal under British laws. Under U.K. law, the storm trooper helmets are not entitled to the protections afforded works of art, because their purpose was primarily utilitarian. Moreover, the British court ruled that Ainsworth's online sales to U.S. customers do not place him under U.S. jurisdiction.

So for now, the Force is with Mr. Ainsworth. Lucasfilm may appeal to the U.K. Supreme Court, but doing so may carry as much probability of success as trying to destroy the the Deathstar with a bunch of X-Wing Fighters.

Jonathan Pink is a business litigation attorney with a specialty in intellectual property. He handles high stakes copyright, trademark and patent litigation for clients world wide. He is resident in Bryan Cave's Irvine (Orange County) and Los Angeles offices. He can be reached at 949-223-7173 or at jonathan.pink@bryancave.com.

And People Wonder Why Most Patents Don't Make Any Money

2009-12-16T15:30:00.000-08:00

As we close out the year, it’s fun to take a look back. In the work of intellectual property, that always makes for some quality amusement. Let’s look, for example, at just a few of the patents that issued this year:

Pat. No. 7,533,832 -- Leg-mounted scent dispenser
Pat. No. D589070 -- Bacon comb
Pat. No. 7,537,453 -- Life-sized furniture kit
Pat. No. 7,497,606 -- Functional shoe
Pat. No. D585,182 -- Removable underwear
Pat. No. D596,839 Striped socks
Pat. No. 7,594,814 -- Prayer-reminder device
Pat. No. 7,510,225 -- Combined manure fork and fan-type shavings blower
Pat. No. D593,731 -- Visor with hair
Pat. No. D589,252 -- Combined towel and handbag
Pat. No. 7,607,664 -- Marriage and divorce game
Pat. No. D596,237 -- Human-shaped toilet stationery organizer
Pat. No. 7,594,878 -- Whole-body vibrator
Pat. No. 7,591,811 -- Diaper with legs
Pat. No. 7,494,681 -- Food products comprising fat and salt
And last (but certainly not least) Pat. No. 7,597,727 -- Method for starting a fire.

Now for 2010? Let the infringement suits begin!

Jonathan Pink is a commercial litigator specializing in high stakes copyright, trademark, patent and business-related disputes. He is Co-Chair of the Internet and New Media Team at Bryan Cave, LLP, where he is resident in the Irvine (Orange County) and Los Angeles offices. He can be reached at 949-223-7173 or at jonathan.pink@bryancave.com.

SixthSense Technology -- The Future is Now

2009-11-27T21:08:00.001-08:00

Many of you heard Nambi Seshadri, VP&CTO of the Mobile and Wireless Group at Broadcom Corporation, discuss the future of wireless technology at our last BC Edge.

Now you can see that future, and much more by following this link to Pranav Mistry's presentation about SixthSense technology: http://www.ted.com/talks/pranav_mistry_the_thrilling_potential_of_sixthsense_technology.html.

For those who haven’t yet heard of SixthSense technology, here’s the low down:

Pranav Mistry (a PhD candidate at the MIT Media Lab and perhaps one of the greatest inventor of our day), has developed a wearable, interactive computing system that is completely detached from what we currently think of as a wireless device.

Forget making a phone call on your IPhone or Blackberry, the time is near where we will dial instead on the palm of our hands. Sound amazing? That’s only the beginning. Imagine taking a photo with no visible camera, by simply holding up your hands as a director might frame a shot for a film, or holding up your airline boarding pass and having it tell you whether your plane is delayed. Again, follow the link to see what I’m talking about.

Pranav Mistry’s device creates a digitial bridge between the real world and the virtual world using little more than a webcam, a battery-powered projector, an internet-enabled mobile phone and some amazing software that only big brains can develop (and the beta version of which is said to have cost less than $350).

And the final kicker? Mistry says he intends to make the software necessary to run this SixthSense technology open source. Follow the link. The future is waiting.

Jonathan Pink is Co-Chair of the Internet and New Media Team at Bryan Cave, LLP. He is resident in the firm's Irvine, California and Los Angeles offices, and can be reached at 949-223-7173. His practice includes commercial litigation with a specialty in intellectual property issues.

Who Owns Works Created by University Professors?

2009-10-21T15:23:00.000-07:00

An issue came up recently that is worth discussing. The question posed is: Does a university professor own the copyright in the materials he or she creates in the scope of his or her professorial employment?

I would answer the question as “yes,” at least under the Copyright Act. Interestingly, many educators with whom I’ve spoken seem to think that the answer is categorically “No!.”

Now I haven’t spoken to scores of professors about this, but I have spoken to a few. Here is an example of one who gave me permission to share our conversation on this blog.

Howard Suber is a professor in the School of Film and Television (at least that’s what it was called when I attended) at UCLA. He is one of UCLA’s finest educators, and like many of his colleagues, he writes extensively both in connection with classroom activities and otherwise. His take on this issue was:

“I thought it was settled law, established decades ago in cases, that the intellectual property a professor produces is his/her own and does not belong to the university, absent signed documentation to the contrary. [¶] The patent and I.P. department at UCLA and elsewhere routinely try to get researchers in the sciences, engineering, etc. to sign such stipulations. But I’m not aware of any in the arts and humanities, have never been asked to sign such a document in my 45 years at UCLA.”

I’ll come back to UCLA’s policy – and Professor Suber’s belief in a moment. First, let me lay the foundation for my view of the world.

Let’s start with the work for hire doctrine. Under that doctrine (17 U.S.C. Section 201(b)) a "work for hire" is the property of the employer of the creator of the work, not of the creator provided the work was "prepared by an employee within the scope of his or her employment." (See also 17 U.S.C. Section 100.) There is no express statutory (or binding case law) exception for educators. Rather, you have to conduct a factual analysis to determine whether the work was created with the scope of employment. See principally Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) (the seminal “work for hire” case that set forth a muti-factor test to determine if the work-for-hire doctrine applied); Restatement (Second) of Agency (setting forth the following factors, all of which must be shown to establish that the employee was acting within the scope of her employment: (1) whether the work is of the type that the employee is employed to perform; (2) whether the work occurs substantially within authorized work hours; and (3) whether its purpose, at least in part, is to serve the employer).

Under the multi-factor test in Reid, the court will look to, among other things, whether the "hired party" is an employee of the "hiring party"; whether the hiring party has the right to control the manner and means by which the hired party creates the product at issue (here it would seem to be the teaching materials); whether the hired party uses his or her own equipment, tools, etc. and where he or she creates the work. The court will also look at the hired party’s discretion over when and how long to work; whether the work is part of the regular business of the hiring party; and the provision of employee benefits to (and the tax treatment of) the hired party. Notably, the Court in Reid said that no one factor was determinative.

Under the holding in Reid, it would seem to me that where one is employed expressly for teaching purposes, a professor’s teaching activities would fall under the work for hire doctrine. While professors certainly have a good deal of autonomy, they still receive a pay check for teaching (from which the university will withhold taxes), and likely receive employee benefits such as insurance, retirement plans, etc. I don’t know whether universities assign the classes to be taught in all instances, I assume not, but it may impose some requirements with respect to this that would arguably fall under the scope of Reid. When you look at all those factors, and consider as well the rules regarding Agency that I set forth above, it is hard for me to believe that a court would find that faculty-created teaching materials are not prepared within the scope of the professor’s employment.

By the way, I also think that there is also a good argument that outside scholarly works could be likewise considered a work for hire, but I think the argument there is not as robust.

Now, turning back to the seemingly-prevailing view of this issue in world of academia. You’ll recall that I mentioned UCLA’s policy on the matter. According to one administrator there, “The answers are quite clear at UCLA . . . .” And those answers are set forth in the following links: http://www.universityofcalifornia.edu/copyright/systemwide/pcoiv.html; http://www.ucop.edu/ucophome/coordrev/policy/8-19-92att.html; and http://www.ucop.edu/ott/faculty/crworks.html.

Reading these through, you will notice that the UCs give ownership much as does the Copyright Act (and as does the ruling in Reid). That is, the professor is given ownership of his or her “scholarly/aesthetic work,” defined as work that is originated by the professor “resulting from independent academic effort” unless such works are “sponsored works or contracted facilities works [meaning works that originated with the use of University controlled buildings, equipment, computer centers, certain laboratories and other facilities, but excluding University libraries]. . . .” Professors are also given the copyright in their “personal works” which are defined as “work that is prepared outside the course and scope of University employment (except for permissible non-University consulting activities) without the use of University Resources.” In other words, if the work is “independent” or outside the course and scope of the professor’s employment, the copyright in the work usually will belong to the professor. To the extent this is more generous than the Act itself provides, keep in mind that it contractually given to the professor and not given as a matter of law.

Now according to Professor Suber:

“I’m sure you’d find that virtually every major university in the country makes similar statements [to that which is on the American Association of University Professors’ website: http://www.aaup.org/AAUP/protect/legal/topics/copy.htm . I don’t know of any university that has tried to claim copyright in a professor’s lectures or scholarly writing unless, as the UCLA statement says, the work was specifically commissioned for a narrow purpose and the professor signed an employee-for-hire contract. . . . [i]f your hypothetical were ever translated into practice, the professoriate of every university in the country would be in arms. It hasn’t happened because, as far as I’m aware, no university of any repute would dare assert ownership.”

I’ll just note that the AAUP site does include several references to case law on this topic, but most of them go against the professor and I do not believe that those which don’t are binding copyright precedent.

So, all this to say: check with the school’s technology transfer policy before assuming who owns – or doesn’t own – the copyright in work created by a professor. Absent a generous grant to the professor in that document, the “work for hire” doctrine should apply.

Jonathan Pink is a commercial litigator specializing in high stakes copyright, trademark, patent and business-related disputes. He is resident in the Irvine (Orange County) and Los Angeles offices of Bryan Cave, LLP. He can be reached at 949-223-7173.

Twitter Jitters

2009-10-16T11:44:00.000-07:00

Here is some information to pass on to clients or incorporate into your drafting of iron-clad agreements.

Turns out that an ever-increasing number of entertainment deals now include contract language that is expressly intended to curb the use of social media by the other contracting party. According to an article in today's Hollywood Reporter, the goal of this language is to plug "leaks of disparaging or confidential information about productions via the likes of Twitter, Facebook and YouTube."

According to the article, Disney has used such a clause to forbid confidentiality breaches on Facebook, Twitter, and "any other interactive social network or personal blog," and DreamWorks has one that prohibits the making of any statement via "a social networking site, blog or other Internet-type site" prior to the studio's own public release of the information. Another studio agreement is broadly drafted to prohibit commentary on "all platforms, including voicemails, blogs, Internet sites, chat or news rooms, podcasts or any online forum," and at least one talent deal referenced in the article contains a nondisparagement provision prohibiting the actor from "bashing any element of a production with social media."

This once again highlights the potential for both positive and damaging information (truthful or otherwise) being disseminated via social media. It also points out the potential hazard this new avenue of expression poses for our clients, and suggests some steps we may take to protect them. In short, while the Internet has given a voice to millions, it has also given them an audience.

Eliminating the traditional "gate keepers" to the public dissemination of information can be great or it can be problematic. As lawyers working in the Internet space, we need to be aware of this, and find ways to shield our clients from the potential dangers. Because of this, we should consider following the lead of the networks and studios by drafting Internet/social media-specific confidentiality clauses in all appropriate agreements. (NDAs, employment agreements, IP licenses and settlement agreements come immediately to mind). If you're thinking, "doesn't the confidentiality clause I currently use already cover this?", the answer is "maybe." But as those who litigate contracts know, sometimes having the additional, highly specific provision is better. California has a statute that says the specific controls over the general, and I suspect other states have something similar. So if we want to expressly prohibit or limit specific conduct -- such as the on line bad-mouthing of our clients -- it is better to take the lawyerly "belt and suspenders" approach.

Which reminds me: I once saw a man who was actually wearing a belt and suspenders. I don't think he was a lawyer, but maybe he should have been.

Jonathan Pink is a commercial litigator with a specialty in high-stakes trademark, trade dress, copyright, patent and trade secret disputes. His clients include companies in industries ranging from media to manufacturing, software to soft drinks. He has successfully represented many of the biggest names in the automotive and motorcycle aftermarket parts industries (including B&M Racing & Performance Products, Hurst Shifters, McLeod Clutches, and Baron Custom Accessories), and has extensive experience litigating claims for breach of contract, fraud, unfair practices, trade libel and a broad spectrum of intellectual property matters in state and federal courts, and before the United States Trademark Trial and Appeal Board. He is resident in Bryan Cave's Irvine (Orange County) and Los Angeles offices.

Still More on Punternet

2009-10-06T10:21:00.000-07:00

A bit of a further update on this:

Many of you know Eric Goldman, and if you don't, you should. He is an Associate Professor at Santa Clara University School and Director of the High Tech Law Institute there -- he is also, for my money, one of the foremost U.S. authorities on issues involving Cyberlaw. (His blog can be found at http://blog.ericgoldman.org/ and is well worth following.)

In any event, with respect to my comments regarding Punternet's response to recent calls (from the British government) for its demise, Eric wrote: "I looked at the Punternet site this weekend. On it, the operator makes clear that he is a Brit residing in CA."

Interesting, but what I really wanted to know was, so what's the site like (I'm not visiting it, thanks; even if I could under the guise of work related activity -- hey, I co-lead the Internet and New Media team here at Bryan Cave -- but who wants to explain those red flags to my esteemed colleagues?). To which Eric responded:

"I was surprised at how internally credible it looked. The reviews were surprisingly thoughtful and detailed. It was a well run product review site for a class of services that normally don't elicit intelligent commentary."

This from the man who used to be GC of Epinions (and who knows a decent review site when he sees it). So, yes, I'm tempted to look. Maybe from home. If I can explain it to my wife.

JP

jonthan.pink@bryancave.com. Mr. Pink is a member of the Intellectual Property Group and a resident in the Irvine office of Bryan Cave.

Puternet Update: The Response.

2009-10-05T15:13:00.000-07:00

After the British Minister for Women and Equality called on California's Governor Arnold Schwarzenegger to terminate the Punternet website (in case you missed the earlier post, that's the consumer review site of sex workers that -- while purportedly located in California -- features women working in the UK), Puternet has responded. A link to that response is here (or below, depending on where it ends up): http://www.punternet.com/forum/showthread.php?t=22603.

One interesting subtlety of that response: it appears from his writing that the fellow running this site is a Brit, located (I'm guessing) in Britain.

Is this so he can take advantage of 47 U.S.C. § 230, the Federal Act that protects operators of websites and other interactive computer services from liability for publishing the statements of third parties? Not sure, but I'm suspicious.

JP

Britain asks Schwarzenegger to Close Prostitute Web Site -- But Can he Do That?

2009-10-01T11:43:00.000-07:00

A. Funny What You Come Across When Reading the News

In a recent article entitled “Britain Asks Schwarzenegger to Close Prostitute Web Site,” Reuters reported that Harriet Harman, the British government minister for women and equality (no caps in the original article, so I’m assuming that’s how they write it) has asked California governor Arnold Schwarzenegger (my fair state) to shut down a U.S. website entitled "Punternet" that allows men (and I’m assuming women too) to rate prostitutes, including those working in London.

Ms. Harman (who one assumes is not reviewed on that particular site, but I have not personally checked to verify this) stated at a recent Labor Party conference that "Punternet" fuels the demand for prostitution, degrades women and puts them at risk. I am certain that it degrades women; as to fueling the demand for prostitution, I find that a little specious. I mean, that’s like saying that a match thrown into a raging inferno fuels fire. As to putting women at risk, they’re not in a great situation anyway, and maybe this would allow someone to track/find rescue them, but maybe this is just Westside naiveté on my part.

In any event, the Minister for Women and Equality (to hell with it, I’m capitalizing her title) has apparently asked Governor Schwarzenegger to close down Punternet, believing that he has the power to do so given that it is located here in California. "Surely it can't be too difficult for 'The Terminator' to terminate Punternet and that's what I am demanding that he does."

Not so fast there Ms. Minister. In United States, we have the Communications Decency Act of 1996, Section 230 of which protects operators of websites and other interactive computer services from liability for publishing the statements of third parties. 47 U.S.C. § 230. And in Britain? They have the Queen. Of course, another difference between the two countries (and I’m not counting the food here folks) is that Britain permits – as in it’s legal – prostitution, while here it – umm – is not.

So back to Section 230, and how it might impact Punternet. Section 230 provides clearly that “[n]o provider or user of an interactive computer service shall be treated as a publisher or speaker of any information provided by another information content provider,” and that “n]o cause of action may be brought and liability may be imposed under any State or local law that is inconsistent with this section.” 47 U.S.C. §§ 230(c)(1), 230(e)(3); see also Blumenthal v. Drudge, 992 F. Supp. 44, 51 (D.D.C. 1998) (in enacting the Section 230, "Congress made a policy choice . . . not to deter harmful online speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties' potentially ages. ").
Section 230's protection is not limited to civil liability. That is, while it does not apply to federal criminal law, see 47 U.S.C. § 230(e)(1), the most plausible reading of the statute's language is that it preempts state criminal actions that are inconsistent with it. 47 U.S.C. § 230; see also Gibson v. Craigslist, Inc., 2009WL 1704355 (SDNY June 15, 2009). (applying the service provider immunity of § 230, the court held that Craigslist was not liable for an advertisement displayed on Punternet, even if the ad itself was tortuous) . When determining the availability of immunity under Section 230, courts engage in a three part inquiry that is discussed in greater detail below. See e.g. Green v. Am. Online (AOL), 318 F.3d 465, 470-71 (3d Cir. 2003), cert. denied, 540 U.S. 877 (2003); Kruska v. Perverted Justice Found. Inc., No. 08 Civ. 54, 2008 WL 2705377, at *2-3 & n.1 (D. Ariz. July 9, 2008).

B. An Application of Section 230 to Punternet

Here, as indicated above, Punternet (just to digress – I don’t really know what this means, “Punter,” and I’m pretty sure that I don’t want to; still, every time I write it, I get the feeling that maybe I’m saying something I shouldn’t – like that Monty Python skit about the German guy and the English dictionary. . . ) provides a forum where users can review prostitutes. (Again, according to Minister Harman, Punternet allows users to compare and rate services in the same way as they would a restaurant, a hotel or a holiday – apparently as in “tasty,” “nicely redone” and “a party from start to finish.”) Clearly a site of that nature may be abused by third-parties in connection with various crimes despite efforts Punternet itself might take to prevent this. But can Punternet be shut down, or is it protected by Section 230? And moreover, what steps might it take to help insure that it is entitled to immunity pursuant to Section 230 should this ever become necessary?

Here are a few thoughts from the trenches:

1. Terms of Use –

I would strongly recommend that Punternet create and implement an appropriate and detailed “Terms of Use,” and that henceforth all usage of Punternet be subject to those terms. The “Terms of Use” should be readily available to all users through prominently displayed links throughout the website. Further, I would advise that, in order for users to post any review, he or she first affirmatively declare his or her acceptance of the “Terms of Use” by clicking an "ACCEPT" button located below a full-text display of those terms themselves.

Among other things, I would recommend that the “Terms of Use” explicitly prohibit the posting or making available of any content that is "unlawful" or that "advertises any illegal service," including in particular "any offer or solicitation of illegal prostitution." To promote compliance with these “Terms of Use,” Punternet should employ some self-regulatory measures, including an automated filter that blocks reviews that contain words or phrases that are associated with problematic content and perhaps a community flagging system that encourages users to "flag" inappropriate ads for removal. I realize that this might limit what they are trying to do on the site, but I’m paying the “conservative lawyer” here: I’m just talking about staying within the confines of Section 230, not keeping Punternet’s users happy (which they apparently are taking care of themselves).

2. Strict Compliance with Section 230 –

As indicated above, the key provision of Section 230 states that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." 47 U.S.C. § 230(c)(1). As the Ninth Circuit has noted, there is a "consensus developing across other courts of appeal that § 230(c) provides broad immunity for publishing content provided primarily by third parties." Carafano v. Metrosplash.com, Inc., 339 F.3d 1119, 1123 (9th Cir. 2003); see also Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008) ("Courts have construed the immunity provisions in § 230 broadly in all cases arising from the publication of user-generated content"); Zeran v. America Online, Inc., 129 F.3d 327, 328 (4th Cir. 1997) ("Section 230 . . . plainly immunizes computer service providers like AOL from liability for information that originates with third parties"); Green v. America Online, Inc., 318 F.3d 465, 471 (3d Cir. 2003) ("By its terms, § 230 provides immunity to AOL as a publisher or speaker of information originating from another information content provider"); Ben Ezra, Weinstein, & Co., v. America Online, Inc., 206 F.3d 980, 984-85 (10th Cir. 2000) (§ 230 "creates a federal immunity to any state law cause of action that would hold computer service providers liable for information originating with a third-party"); Universal Communication Systems, Inc. v. Lycos, Inc., 478 F.3d 413, 419 (1st Cir. 2007); ("[W]e too find that Section 230 immunity should be broadly construed"). Chicago Lawyers Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc., 519 F. 3d 666 (7th Cir. 2008) (under Section 230, Craigslist itself could not be held liable for its users' allegedly unlawful postings).

The last case listed above, Chicago Lawyers Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc. (“CLC”,) is instructive as there is little material distinction between the facts in that case and my fellow citizen’s operation of Punternet. In CLC, the plaintiff sued Craigslist for allegedly discriminatory housing ads posted by Craigslist-users. In affirming the lower court’s dismissal of the case, the Court of Appeal noted that services like Craigslist are, in many respects, “like common carriers such as telephone services,” meaning that they do not read the messages they transmit on their systems. 519 F.3d at 668. Based on this, the Court recognized that requiring Craigslist to review each ad is neither practical nor effective. Id. at 669. It therefore concluded that Craigslist was not obligated to review the ads at issue because Section 230 immunized it from liability for them. In short, the plaintiff in the CLC case was seeking to hold Craigslist – a provider or user of an interactive computer services – liable for publishing the ads at issue in that case, and the Court (applying the clear immunity set forth in Section 230),said “no.” Id. at 671.

As with CLC case, any criminal or civil action against Punternet based on users who may be involved in prostitution should be barred by Section 230 so long as Punternet does not induce anyone to advertise any illegal service, or solicit prostitution. See 519 F.3d at 671-72 ("given § 230(c)(1) [the CLC] cannot sue the messenger just because the message reveals a third party's plan to engage in unlawful [conduct]"). 519 F.3d at 672. See also Fair Housing Council v. Roommates.com, 521 F.3d. 1157, 1174 (9th Cir. 2008) (en bane) (holding that a website operator may not be liable for unlawful ads posted by its users, except in circumstances where the website operator structures its site so as to directly and necessarily cause its users to include unlawful statements in their postings).

In Roommates.com, a portion of the defendant’s website required users to answer multiple choice questions which, the court found, necessarily led to the generation of statements of unlawful preferences in housing ads. 521 F.3d. at 1165. The Roomates.com website also included an open-ended "Additional Comments" section which allowed users to insert content, some of which also was allegedly unlawful. Still while the Court held that Section 230 did not immunize Roommates.com with respect to the allegedly unlawful content dictated by the multiple choice questions, the court expressly held that everything users included in the "Additional Comments" section was created entirely by the users themselves, and thus the site operator was entitled to immunity from liability for any unlawful content contained there pursuant to Section 230(c)(1). Id. at 1174-75.

To this end, and in keeping with the Roommates.com holding, I would advise that Punternet avoid any “check the box” sort of questionnaire (analogous to the multiple choice questions discussed in Roomates.com) that may cause its users to include unlawful statements or otherwise promote (engage in) unlawful conduct. Rather, I would advisethat Punternet simply provide a blank text box in which users may review the service their received, advertise their service, or post their comments. In short, Punternet should have no content dictates or constraints (other than compliance with the “Terms of Use”) which induce users to advertise, solicit or promote any illegal activity. By limiting its function similarly to providing something analogous to the open-ended "Additional Comments" feature of the Roommate.com website, Punternet will help insure its Section 230 immunity from liability for content published by its users.

3. Diligence in Assuring Punternet Meets the Section 230 Immunity Test –

While similar to recommendation No. 2 above, it is important to remember that immunity under Section 230 must be determined, if at all, by a formal legal ruling (e.g. only after the website at issue has been sued based on its content), and that any court before whom this issue arises will apply the three-part “Section 230 immunity test.”

Specifically, the Court will first determine whether the defendant is a provider of interactive computer services. From what we have seen of Punternet, it seems that it is indeed a provider of an interactive computer services. See Chicago Lawyers' Comm. For Civil Rights, supra, 519 F.3d 666; see also Carafano v. Metrospash.com Inc., 207 F. Supp. 2d 1055, 1065-66 (C.D. Cal. 2002), affd, 339 F.3d 1119 (9th Cir. 2003).

Second, the Court will look at whether the content was placed on the website by independent third parties or by an agent of the website itself. If the content was posted by an independent third party, the website should be entitled to protection under Section 230. In this instance, the reviews and on Punternet appear to have been placed there not by Punternet, but from “another information content provider,” namely the users of Punternet. 47 U.S.C. § 230(f)(3).

Finally, the Court will look at whether the would-be legal action is merely a cloaked attempt to hold the website itself liable for third party content, e.g. based on an alleged failure to block, screen, or otherwise prevent the dissemination of such third-party content. Here, it is difficult to imagine any would-be claims other than those that seek to hold Punternet itself liable for the reviews and/or advertisements posted there by third parties. Because those claims would, by necessity, be directed toward Punternet as a "publisher" of third party content, they would be subject to protection under Section 230. Green v. Am. Online, supra 318 F.3d at 470-471 (affirming dismissal of claim that AOL "negligent[ly] fail[ed] to properly police its network for content transmitted by its users" because Sects m 230 bars "attempts to hold AOL liable for decisions relating to the monitoring, screening, and deletion of content from its network — actions quintessentially related to a publisher's role”; internal quotations and citation omitted).

Along this same line, see also Myspace, supra, 474 F. Supp. 2d at 849 ("Plaintiffs argue this suit is based on MySpace's negligent failure to take reasonable safety measures to keep young children off of its site and not based on Myspace’s editorial acts . . . . No matter how artfully Plaintiffs seek to plead their claims, the Curt views Plaintiffs' claims as directed toward MySpace in its publishing, editorial, and/or screening capacities."); Green, supra, 318 F.3d at 470-71 (affirming dismissal of claim that AOL "negligent[ly] fail[ed] to properly police its network for content transmitted by its users" because Sects m 230 bars "attempts to hold AOL liable for decisions relating to the monitoring, screening, and deletion of content from its network — actions quintessentially related to a publisher's role”); see also Stoner v. eBay, Inc., No. 305666, 2000 WL 1705637, at *3 (Cal. Super. Nov. 1 2000) (rejecting plaintiffs "contention . . . that eBay should be held responsible for failing to monitor the products auctioned over its service" because "Congress intended to remove [through Section 230] any legal obligation of interactive computer service providers to attempt to identify or monitor the sale of such products").

Now again, I have not reviewed or visited Punternet; I’m basing my comments strictly on Ms. Harman’s comments, as she seems to be pretty familiar with the site. Nonetheless, given what I’ve read, it appears that the three elements for Section 230immunity would be met if the recommendations set forth were followed. The mere fact that Punternet provides a forum for erotic content – or even crimes that may flow from that content – is not sufficient to treat the website as the publisher of any posted illegal content. See Gentry v. eBay, Inc., 99 Cal.App.4th 816, 832 (2002) (holding that eBay's provision of product categories did not render it responsible for ads created by users).

4. Section 230's Specific Exceptions –

One final note is that Section 230 contains several exceptions of which Punternet should be aware. Specifically, Section 230 is inapplicable in cases involving enforcement of federal criminal statutes, 47 U.S.C. § 230(e)(1), intellectual property law, 47 U.S.C. § 230(e)(2), and communications privacy law, 47 U.S.C. § 230(e)(4). Section 230 does not contain any exception for State prostitution laws. This would seem to show that Congress did not intend to exempt such laws from the statute's reach. See Andrus v. Glover Constr. Co., 446 U.S. 608, 616-17 (1980) ("Where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of a contrary legislative intent.")

C. Conclusion

Section 230 was enacted, for among other reasons, to encourage self-regulation of the Internet by eliminating disincentives to such self-regulation that existed prior to the passage of that statute. Congress sought to achieve this goal by “encourag[ing] interactive computer services and users of such services to self-police the Internet for obscenity and other offensive material.” Batzel v. Smith, 333 F.3d 1018, 1028 (9th Cir. 2003); see also Zeran v. America Online, Inc., supra, 129 F.3d at 331 (Section 230 was intended "to encourage service providers to self-regulate the dissemination of offensive material over their services"). I note this because, for Section 230 to be an effective immunity, a certain amount of self-regulation is expected of service providers. Punternet can comply with these expectations by, among other things, taking the steps set forth above including (but not limited to) : (1) the creation and implementation of a detailed “Terms of Use”; (2) avoiding any structure that directly and necessarily causes its users to include unlawful statements in their postings; and (3) deleting – if and when discovered – any reviews or advertisements that contain unlawful statements or solicit illegal activities.

So to wrap this up, let's all keep this straight: Britain allows prostitution, but does not have an equivalent to 47 U.S.C. § 230; the U.S. has that statute which creates a broad immunity for websites that publish this kind of third party content, but doesn't allow prostitution. Oh, and Britain has the Queen as the faux ruler of their country, and we Californians have a faux Terminator as the ruler of our state. It's a bit like Through the Looking Glass around here.

Ok, so that you’ve read this, which web site are you going to next?

Jonathan Pink heads the Internet and New Media Team at Bryan Cave, LLP. He is resident in the firm’s Irvine, California (Orange County) office, and is a member of the firm’s Intellectual Property Group. He can be reached at jonathan.pink@bryancave.com or by dialing 949-223-7173.

Two New Copyright Rulings Worth Noting – (A “Precious” Pooh-Pooh)

2009-09-29T12:42:00.000-07:00

Two new rulings from the last few days are worth mentioning:

A Copyright Transfer Requires a “Precious” Written Document -- The first involves the right to distribute the new movie “Precious,” which had led to a legal squabble between producer Harvey Weinstein (and his company, the Weinstein Co.) and Lionsgate Films. In a nutshell, following the film’s screening at the Sundance Film Festival in January, both Weinstein and Lionsgate came away believing that they had purchased the right to distribute the movie from director Lee Daniels. According to Weinstein, an independent film sales agent sold "Precious" to the Weinstein Co. before agreeing to selling that right to Lionsgate when Lionsgate offered a better deal. Not surprisingly, the two production companies sued one another over this issue. In fact, four separate lawsuits have been filed over this issue.

On Friday, U.S. District Judge Naomi Reice Buchwald whittled this down a bit by dismissing one of the four lawsuits. Specifically, in action brought by Weinstein against the film's producers, Smokewood Entertainment Group, the Court ruled that Weinstein had never acquired a copyright interest in the film (including that portion of the copyright “bundle of rights” that the distribution company would need to obtain in order to distribute the film) because it never obtained a written contract for distribution purposes. That is, because a writing is a required when a copyright is transferred to another party, the absence of a written contract equated to the absence of a written copyright assignment. "A signed writing is required to effectuate a transfer of copyright ownership," the Court said. "To the extent that [Weinstein Co.] alleges a purely oral agreement for the exclusive licensing and distribution rights to 'Push,' that claim clearly fails as a matter of law."

Pooh-poohing Your Claim to Copyright Ownership – After nearly two decades of legal battles, U.S. District Judge Florence-Marie Cooper granted the Walt Disney Co.’s motion to dismiss a copyright and trademark infringement claim brought by the family of Stephen Slesinger, which claims to hold the merchandising rights to Winnie the Pooh.

Mr. Slesinger acquired these rights from A.A. Milne in 1930, but after he died, his widow assigned those rights to Disney. Disney took the intelligently written children’s stories and turned them into what most children now think of as Winnie the Pooh. In her ruling last week, Judge Cooper determined that Disney -- not the Slesinger family -- controlled those IP rights. "Stephen Slesinger Inc. transferred all of its rights in the Pooh works to Disney, and may not now claim infringement of any retained rights," Cooper wrote in her ruling. That ruling effectively concludes the two existing lawsuits between Disney and the Slesinger family, clearing the way for Disney to merchandise Pooh as it seems fit. The Court, however, ruled that Disney must continue to pay royalties to the Slesinger family when any of the Pooh characters are used in movies and merchandise.

jonathan.pink@bryancave.com

Full Text of Interview from Portfolio.com

2009-08-23T19:05:00.000-07:00

I was interviewed recently by Romy Ribitzky from Portfolio.com. I posted a link on this blog several days ago. Given that the interview was considerably longer than the quotes used (understandably, charitably and without complaint), I thought I'd include the full scope of my thoughts -- yes, for what they're worth -- here.

Romy Ribitzky: Do companies have the right to dictate what an employee can and can’t do with their own, personal, online presence?

Jonathan Pink: Companies have no absolute legal right to dictate what an employee can or can’t do, and in fact some states have statutes that affirmatively prohibit an employer from taking action against employees for lawful off-duty activity. Some courts have held that these statutes do little more than reaffirm existing rights, but an argument exists that posting to blogs or social network sites would fall into the category of lawful activities protected by such statutes. Companies may try to circumvent such statutes by having employees enter into a nondisparagement agreement, a confidentiality agreement, or the like. If consideration is given for these contracts, and the parties knowingly and affirmatively assume the obligations set forth in them, companies can acquire rights not otherwise theirs to assert. That said, without such agreements, and without suggesting that employees ever have the right to engage in illegal activity, companies do not have the right to dictate what an employee can or can’t to with their own, personal online presence. Also, of course, where the employer/employee are in a at-will employment state, such as California, an employer may terminate an employment for no reason at all. This means that while an employer may not regulate otherwise legal, off work conduct absent a contractual agreement to the contrary, an employer can look at the employee’s on-line persona and decide “we really don’t want someone like that here.”

Romy Ribitzky: What legal murkiness do you enter when you encourage your employees to blog, tweet, etc. about your organization, their projects?

Jonathan Pink: Asking employees to blog, tweet, etc. about their employer can be a double-edged sword both legally and otherwise. You may recall that Comcast was the subject of some highly unfavorable bulletin-board posts, and the negative commentary posed a real PR danger to the company. One rogue employee took it upon himself to set the record straight by posting positive comments and addressing the inaccuracies that were multiplying on the web. When word reached upper-management, the immediate reaction was to reel in this employee. But the company’s CEO saw it differently, he saw the benefit of this fellow addressing the inaccuracies and posting the good word about the company. The result was, the employee was given not just the right to continue.

From a legal standpoint, having an employee in this position can also present problems. Is the employee then speaking on behalf of the company as an authorized agent? Probably, and if so, his or her statements may be attributed to the company itself. This can have unexpected and unintended ramifications. Another issue is copyright infringement. If the employee decides to lift text from another source for use on the company-sponsored blog, not only will the employee be liable for infringement, but the company too may find itself facing an infringement claim, or at the very least a Digital Millennium Copyright Act takedown notice. A tougher call would be if the employee disparaged a third party on the company sponsored blog. The Telecommunications Act of 1996 (47 USC 230(c)) may provide protection to the company, depending on whether it had control over the employee’s content, while the employee individually would have no protection.

Romy Ribitzky: What are the privacy risks with searching a candidate’s social media sites as a factor in the employment decision?

Jonathan Pink: If a prospective employee places his or her content on the web, he/she should fully expect that will be discovered by a prospective employer. If the candidate placed the content onto the web, there are few - - if any - - privacy rights he or she could claim. An interesting footnote on that point, I have a client that is a large media company head quartered in New York. The client recently mentioned that it now requires perspective employees to “friend” it on Facebook so that the HR department can have a look at would-be employees beyond what is reflected in their resumes. As long as the perspective employee agrees to this, there is nothing illegal about it. Moreover, while it may appear somewhat invasive, it also may prove very helpful in making employment decisions that save the company money down the line.

Romy Ribitzky: What privacy risks are associated with monitoring your employees on social media platforms while they’re at work?

Jonathan Pink: The general rule of thumb is that an employee has no right to privacy over anything he or she writes, posts, or retrieves from the web while using an employer’s computer. This includes emails, and Facebook posts. The employer has the right to monitor employees’ computers - - and many companies make frequent use of this right. So, in a nutshell, employees should assume that they have no privacy rights with respect to any social media platforms they interact with while at work.

Romy Ribitzky: What should you consider when developing internal social networking sites for employees?

Jonathan Pink: When developing internal social networking sites for employees, common sense and discretion should dictate the rules of the road. Obviously rules need to put into place, and followed rigorously, to protect fellow employees and company property. This means staying clear of disparaging, taunting and threatening co-workers, and using discretion before publishing non-public, company information. So, employees need to remember that what they post is public, or semi-public, and they need to “play nice.” What one employee regards as funny may be viewed by others as derogatory, insulting, threatening, inappropriate and/or offensive, any one of which could cost the posting employee his or her job. Employees should allow their conduct to be governed by the maxim “discretion is the better part of valor.” And if an employee doesn’t think he or she can live within such guidelines, they should opt-out of any participation in such a venue.

Romy Ribitzky: What are the protections companies enjoy when a third-party posts comments on their social media sites or in response to a blog, tweet, etc.

Jonathan Pink: The Internet has opened new channels of communication and self-expression. An individual’s ability to have a voice in the world has never been greater. While this is good, it also presents risks to those who write first and think later. With this in mind, when a third-party posts comments on a company’s social media sites, or in response to a blog, the most common danger is that the poster will defame another party. As with traditional print media, laws related to defamation apply in cyberspace as well.

Companies, however, may have protection for allegedly defamatory statements made by others on their site. This is because providers of interactive computer services are immune from liability for content created by third parties when sued "as the publisher or speaker of any information provided by" someone else under the Telecommunications Act of 1996 (47 U.S.C. § 230(c)).

Courts have applied Section 230(c) to a broad mix of "computer service providers." For example, courts have found that this Section shielded the publisher where third party content was posted a blog entitled “ripoffreport.com” that warned consumers about unscrupulous practices and bad service, and it has also been used as a defense to claims of negligent misrepresentation, interference with prospective advantage, unfair business practices.

Romy Ribitzky: When are companies liable for that post and how can they limit or prevent liability?

Jonathan Pink: Section 230(c), however, will not provide protection to a company where the company itself is the deemed the speaker/poster of the content. Thus, where the content was posted by an employee working in his or her capacity as a company representative, the company itself will likely be deemed the speaker, and will be held liable for comments posted.

We see something similar in the area of copyright infringement, where a company can, in some instances, be held liable for another person’s infringing post either as a direct infringer or as a party with secondary liability. Secondary liability cam be either contributory infringement and vicarious infringement. The good news is, however, that – as with claims for defamation – some additional protections exist on line that do not exist in traditional print media. In the cyber world, the safe harbor provision of the Digital Millennium Copyright Act may apply to protect a company from liability, provided it complies with all of the Act’s requirements. This means designating an agent for notification with the Copyright Office, and establishing – and posting -- a policy against repeat infringement by its readers. So, while companies may not have a duty to police their blogs for copyright infringement, they must act to remove infringing content when they are put on notice or face liability.

Romy Ribitzky: Can companies moderate user product reviews and discussions and keep its legal protections against wrongful posts from users?

Jonathan Pink: There is no easy answer to whether companies that moderate user product reviews and discussions can continue to maintain their legal protections against wrongful (e.g. defamatory) posts made by users. Courts have consistently held that 47 USC section 230(c) protects one from exercising traditional editorial controls over user-generated content. Thus, for example, deciding whether to publish, delete, or edit material should all be covered by Section 230. However, the further away a company moves from these traditional editorial functions, the more it risks losing its Section 230 immunity. If a company does nothing more than host third-party content, without providing any editorial oversight, it will likely be protected under Section 230. If it exercises traditional editorial functions over user-generated content, it should be protected as well. But once the company goes beyond that, it starts getting into potentially choppy legal waters.

Romy Ribitzky: What issues arise from your company’s blogging about a competitor’s product both on the clock and off, in case an employee does it from a personal account at home?

Jonathan Pink: When blogging about a competitor’s product, be it on or off the clock, the same general rules regarding trade liable, interference with economic advantage and false advertising apply. In short, making statements that are false or disparaging is never a good idea, and it’s not made any better when done on line. As to whether the company – as opposed to the individual -- could be held liable for this conduct, that would turn on the facts specific to the controversy. In other words, was the off-duty employee engaging in conduct on behalf of the company? I know how most companies would answer that question if this came to litigation.

Romy Ribitzky: How should you handle legal and governmental requests for information about your members?

Jonathan Pink: Handling legal and governmental requests for information will depend on the scope of the information requested. These types of requests should always be directed to the company’s legal department or outside legal counsel. There are times, in certain circumstances, where such requests for information will be overly broad or may improperly impinge the target’s right to privacy – thus subjecting the responding company to liability. Certainly, we’ve seen many cases where the subpoenaing party has been unable to attain the information they requested and, on the flip side, we have been successful in obtaining such information from those who would have liked to shield it. So it is a fact specific situation, and the answer will vary based on those facts.

jonathan.pink@bryancave.com 949-223-7173

Jailbirds and the DMCA

2009-08-05T12:52:00.000-07:00

Jailbirds and the DMCA

Breaking news: SoCal man busted on charges of "jail breaking" videogame consoles in violation of the Digital Millennium Copyright Act (“DMCA”). Not sure this really rises to the level of such extensive law enforcement, but according to Wired News, Homeland Security authorities arrested 27 year old Matthew Crippen this week on charges of having circumvented the copyright encryption technology on a number of videogame consoles including Wii, PlayStation and the Xbox. Crippen, an Anaheim, California resident and Cal State Fullerton liberal arts student, charged customers $30 a pop for this -- uh -- service.

I could make a comment here about Anaheim being the home of Disneyland, and Crippen's age being a little advanced for an undergrad, or the fact that he was doing all this for $30 a pop when a job at Starbucks probably would have paid just as well (and would not have led to his arrest), but I won't. I'll refrain. So, enough of that, and on to the next paragraph, please.

Really, this story makes me feel very, very secure. I mean, what with the Bush administration (and Chenney in particular), I really thought that terrorists were practically at our front door. Turns out, this must not be the case given that Homeland Security has time to bust a guy who's gaming videogame consoles. Wow, what must the strategy sessions that led to that bust have been like? "Guys, we've got a big one." (Tense silence as the team, clad in black, waits . . . .) "Hacker." (Team's thinking: code for Bin Laden, no . . . for . . . who?! They all nod knowingly as their leader continues.) "Bastard's breaking into Xboxes, the Wii and . . . the PlayStation." (Whoa. Sweat starts to form on foreheads . . . .) Cut to the five black vans with blackened windows pulling up outside Crippen's house, firepower in abundance, men taking positions – BAM! the door comes down and the fugitive comes out -- dressed in boxes and holding a screw driver? At least that's how I imagine it.

Anyway, why all the fuss? Because under the DMCA, jailbreaking a video game is a copyright no-no. The DMCA provides, in relevant part, that, “no person shall circumvent a technological measure that affectively controls access to a work protected under this title.” Stated another way, no jailbreaking decrypted copies of videogame unless you're ready to do some hard time . . . and have Homeland Security come knocking at your door. Now don't get me wrong: the DMCA is a great statute and I've used it in some of my own cases, but this really seems like killing a gnat with a sledgehammer when a rolled up newspaper would suffice.

So now the big question now is: where did Crippen get his training? Afghanistan? Pakistan? From the The Big Man? No, according to Wired, Crippen learned his skill on “Google, man.” He was released on Monday on $5,000 bond.

Pirate Update

2009-08-03T12:18:00.000-07:00

Pirate update: No, not the Somalis, the Dutch.

According to a report in IP360 (and the Associated Press), a Dutch court has given Pirate Bay 10 days to walk the plank – errr, to shut down operations in the Netherlands. And if they don’t? There are sharks waiting for them in the churning sea below, to the tune of up to $42,000 per day. Ouch! It is not clear from either report how the Court proposes to enforce its order or to block Netherlands-based traffic (one envisions a little Dutch boy, with his finger in the Internet dyke), but that’s what the Court has said and they seem to mean business.

The ruling, by the way, follows the copyright infringement suit filed just over a week ago by a number of studios (a baker’s dozen, all of whom have the dough to do so). Pirate Bay has continued to operate notwithstanding a ruling last April from a Swedish court which sent the site's founders to jail (for one year each), and hit them with a hefty $3.6 million fine based on similar charges.

How is it that Pirate Bay gets him with infringement suits (and, ahem, jail time) when YouTube hosts plenty of material that may well be covered by third party copyrights? Because unlike YouTube, Pirate Bay distributes torrent files, linking users to the copyrighted material. It is the users who host the torrents and who are in possession of any infringing material.

Thus, by seeking to circumvent claims of domestic and international copyright infringement, the Pirate walks the plank, while YouTube . . . . walks to the bank.

Jonathan Pink litigates copyright actions around the globe. He is Co-Leader of the Internet and New Media Team at Bryan Cave, LLP. Bryan Cave is an international law firm with more than 1200 attorneys world wide.

Facebook, High School Renunions, Patent Infringement and Cable TV

2009-08-02T23:36:00.000-07:00

My high school reunion is coming up. Thirty years. No, I won’t make it. I’ll be on vacation with my family. Not that I’d intentionally avoid it; it just worked out that way.

I actually enjoyed the last reunion. It was our 25th, and held at a classmate’s home. This wasn’t like a backyard pool party or a front yard Bar-B-Q. This classmate had purchased the former George C. Scott Estate in Bel Air. He’d done quite well for himself (starting a gay television network; I don’t have a TV, but I’m assuming we’re talking cable here). The fact that he had done quite well is particularly interesting to me because he was not one of the popular kids in high school. (Nor was I.) He was always a bit of an outsider (as – I am somewhat chagrinned to admit – was I).

Which brings me to my point (sort of): I always wonder what happened to the popular kids. Most of the successful ones I can think of were not the popular ones. Most of the popular ones are not now terribly successful. At the last reunion, I remember talking to one of them. He didn’t remember me, but was still more than happy to chat. He was living in a trailer; didn’t drive, but did ride a bike. He spent about 15 minutes recounting for me that time in high school when he saw a UFO. It was a little metallic ball, he told me, looking in at him through a window while he watched TV and his laundry tumbled dry in the next room.

Side note: Now you’ve got to remember the first Star Wars movie which – huh! – came out when this guy and I were in high school. Remember the scene where Luke learns to use the light saber? Remember the little metal ball flying around? I can’t say for certain, but I’m guessing there is a connection here which, I’m sorry to say, I didn’t point out to my old friend. Instead, I said “Huh, you know, I’m going to get another drink,” then hurried away. (I then met up with one of my closest friends – a psychologist -- and encouraged him to go talk to Mr. UFO.)

Back to my point: So, it seems to be that, if you’re popular in high school, you’re likely to be perceived as an underachiever at your high school reunions, at least when compared with the losers in high school who now own estates, or at least practice intellectual property law in Irvine.

Ahem. The point of all this lead up? To compare and contrast what happens when you’re a successful business. What happens? That’s easy: you get sued. Case in point: Facebook. Hugely popular (hey, if you’re reading this, feel free to send me a “friend” request on Facebook), Facebook has had its share of lawsuits of late. A couple of click fraud cases, and at least one patent infringement suit brought against it by Leader Technologies Inc.

The patent infringement case was the subject of an interesting recent ruling, whereby Facebook was ordered to provide the plaintiff with a complete copy of Facebook’s entire computer source code. What does this have to do with the suit itself? Leader Technologies sued alleging Facebook had deliberately infringed Leader’s U.S. Patent Number 7,139,761, titled “Dynamic association of electronically stored information with iterative workflow changes.” As if the title were not clear enough, the patent has to do with the management and storage of electronic information (something most websites – including this one – does). In that case, however, Leader claims that Facebook infringed its patent by marketing services “including but not limited to those related to the Facebook Web site.”

Like any good patent plaintiff, Leader is seeking preliminary and permanent injunctions, treble damages, attorneys' fees and costs. Uh-huh. We’ve all seen this drill before. In fact, I’m in a battle like this one now, except it involves mattresses and memory foam rather than “electronically stored information with interactive workflow changes.” Almost the same, but not quite.

In any event, in the Facebook case, Magistrate Judge Leonard P. Stark (DC Del) ruled that Facebook must provide Leader with a hierarchical map of its source code by the end of this week, and the entire source code by Friday, August 21st. Facebook is not happy. It claims Leader has no need for the entire source code, or at least has failed to articulate such a need.

The Court disagreed. Judge Stark ruled that a protective order would adequately address any of Facebook’s concerns, and founded his decision on the declaration of plaintiff’s expert witness, and a limited review of a portion of the code itself. Maybe so, but the ruling really seems over reaching to me. I’d bet anything that the Judge is not Facebook.

Leader, by the way, bills itself as a “pioneer in Web-based collaboration platforms.” I point this out only because of the further parallel to my case, which involves a bedding platform. And also because, just like a high school reunion – where the once popular are now not so (and those who weren’t now own gay television networks) – it’s all about creating “dynamic associations.”

Jonathan Pink litigates copyright, trademark and patent cases at Bryan Cave, LLP. He is resident in the Irvine office and can be reached at jonathan.pink@bryancave.com.

No Vacancy at Hotels.com

2009-07-24T11:45:00.000-07:00

Such a pity. Hotels.com tried, tried, tried to obtain a trademark in its name "Hotels.com," but alas the Court of Appeals for the Fed Circuit ruled the mark was a too generic. Too generic? Really? So, my hopes of getting a trademark in "milkdelivery.com" for my new business delivering milk might run into problems as well? Generic. Humph.

The Court said that the USPTO's Trial and Appeal Board's refusal of the registration was appropriate, and affirmed the TTAB's rejection of Hotels.com's argument that the “dot-com” suffix showed converted the generic term “hotels” into a brand name.
Really going out on a limb there, TTAB; bold, controversial assertion of the law.

Of course, in some deference to Hotels.com ("some," meaning not a lot, meaning the subtextual "what the hell were you thinking?" still applies), it appears that the website had originally sought to register its mark for the services of “providing information for others about temporary lodging; travel agency services, namely, making reservations and bookings for temporary lodging for others by means of telephone and the global computer network.” So it wasn't, e.g., just giving people access to hotels? Oh, you see that's where I was mistaken.

Seems the TM examiner had the same thought I did, that “Hotels.com” was “merely descriptive” of hotel reservation services. (No, it's for "providing information . . . .") In any event: denied. Possibly without even visiting the site (which looks a lot like a site where you make hotel reservations, folks), the TTAB affirmed the rejection, finding that “hotels” identified “the central focus of the information and reservation services” provided on the site, and concluding that “hotels.com" was therefore simply a term that identified the focus of the service, and was thus "generic for the services themselves.”

Hotels.com appealed, arguing that the mark was not generic because the Web site Hotels.com does not provide lodging and meals for its users and isn't synonymous with the word “hotel.” It further argued that its name had effectively acquired secondary meaning (or acquired distinctiveness), saying that the mark was widely associated with the company itself, and is not viewed as a generic term or common name for hotel services.

The Fed Circuit ruled that "the generic-descriptive-suggestive-arbitrary-fanciful continuum of words and their usage as marks of trade, there is no fixed boundary separating the categories; each word must be considered according to its circumstances.” In other words, while generic terms cannot themselves be registered as trademarks, descriptives may acquire distinctiveness and serve as a trademark.

But, the Court did not side with Hotels.com that that had happened in this instance. It agreed with the TTAB that "hotels" identified the core component of the services at issue, and that “hotels.com” was the functional equivalent of granting a service mark to the unadorned word, “hotels,” which it was not about to do. In short, the Court found that the combination of “hotels” and “.com” did not produce a new meaning when used in combination with one another. It held that “registrability does not depend on the .com combination.”

So, Hotels.com is left without registered mark in the brand it has worked so hard to develop. What does this tell us? Talk to a trademark attorney before selecting a a mark in which you intend to invest mucho money? Now there's an idea!

Twitter: Password Security Breach

2009-07-17T14:17:00.000-07:00

Was interviewed by the L.A. Times on this topic. The article is very interesting (my quoted comment just makes for a pithy conclusion). Here is the link http://latimesblogs.latimes.com/technology/2009/07/leaked-twitter-documents-security.html

TechCrunch Publishes Confidential, Internal Twitter Documents

2009-07-15T16:21:00.000-07:00

Techno/news website TechCrunch today published confidential, internal documents from Twitter, including Twitter’s financial projections (o.k., while it may be unseemly to repeat: Twitter projected it would bring in $400,000 in revenue this quarter and $4 million during the fourth quarter), and a document showing an internal discussion about a proposed reality television show (do we really need another? How about one in which we watch an over-worked lawyer typing out his blog in between sips of coffee and hoping to finish before his wife calls and says “If you’re not billing, come home!”).

Why would TechCrunch do this? Well, it’s fabulous publicity. It’s snarky, it’s quasi-newsworthy, it’s provoking. It will drive up traffic to their site, and thus increase (dramatically) their relevance and their value. Bingo! But, when the dust settles and the news moves to something more relevant (FLASH: Michael Jackson NOT Really Dead; Spotted at Disneyland’s Toontown), I suspect there will be some legal bills to pay.

As I’ve said before, stuffing your site with high quality, original content is an excellent way to increase readership and web traffic. Stuffing it with content poached from another site will only lead to trouble (or, as the case may be, increased readership and web traffic). Copyright protects a wide range of works being reproduced without the permission of the copyright owner. 17 U.S.C. § 102. This would include many of the internal documents TechCrunch decided to republish. Perhaps they’ve forgotten that the owner of the copyright has the sole right to authorize a reproduction of the work, distribute copies, or display it publicly. 17 U.S.C. § 106.

Or maybe they’ve decided to test the limit of a fair use defense. Remember the fair use doctrine? As the U.S. Supreme Court observed in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, “some opportunity for fair use of copyrighted materials [is] necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts. . .’.” I’ll bet my bonus that TechCrunch will argue that the fair use doctrine permits its republication because it was intended to spur discussion and debate (under that doctrine, as codified in 17 U.S.C. § 107, short quotations used “for purposes such as criticism, comment, news reporting, teaching … scholarship or research [are] not an infringement of copyright”).

Uh-huh.

But the analysis doesn’t stop there. Courts evaluate fair use by considering four factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of copying, and (4) the market effect. The most significant is the last one. If the copy lessens the demand for the original work, it’s difficult to claim fair use. On the other hand, if the copy is used strictly for purposes of parody, criticism, or news reporting, it’s more likely to be deemed “fair.” So if you happen to receive confidential, internal Twitter documents, and truly believe that they are news worthy, wouldn’t it be best to discuss them generally, quote selectively, and adhere to the principal that “less is more,” rather than “more and more and more”? Well, maybe. I suppose TechCrunch could still argue that what it took had no effect on the market, so taking more (ok, all) of the material didn’t reduce it’s value, but the better approach might have been to exercise some restraint from the get go.

Moreover, even if TechCrunch avoids liability on copyright grounds, it could still face a claim for misappropriation of trade secrets or unfair competition under California Business and Professions Code §17200 (which broadly applies protect against unfair and “unethical” conduct).

And notably, it does not appear that TechCruch would have much of a defense these claims under the Telecommunications Act of 1996, 47 USC § 230(c). As we’ve seen recently, that is a fairly robust Section that makes providers of interactive computer services immune from liability for content created by third parties. That is, the service providers are immune when sued “as the publisher or speaker of any information provided by” someone else. 47 U.S.C. § 230(c). For example, courts have found that this Section shielded the publisher where third party content was posted on a roommate matching site (See Fair Housing Council v. Roommate.Com, 489 F.3d 921 (9th Cir. 2007)); an on line newsletter (Batzel v. Smith, 333 F.3d 1018, 1031 (9th Cir. 2003)); and a blog entitled “ripoffreport.com” that warned consumers about unscrupulous practices and bad service. Certainly, Section 230(c) has also been used as a defense to claims of negligent misrepresentation, interference with prospective advantage, unfair business practices. But Section 230(c) loses its shielding strength where the service provider itself is deemed the speaker/poster of the content.

By the way, this is what Twitter posted on its blog about this: “We are in touch with our legal counsel about what this theft means for Twitter, the hacker, and anyone who accepts and subsequently shares or publishes these stolen documents. We’re not sure yet exactly what the implications are for folks who choose to get involved at this point but when we learn more and are able to share more, we will.”

Oh, I’m sure of it.

On the horizon (or so I predict): Twitter sends TechCrunch a “take down notice” pursuant to the Digital Millennium Copyright Act (17 U.S.C. §§ 512(c)), and then possibly sues; TechCrunch sees a big up tic in hits, and enjoys its time in the spotlight.

You're Invited! BC Edge, July 29, 2009, Noon Pacific Time

2009-07-15T09:15:00.001-07:00

If you're reading this, you're invited to our next “BC Edge” roundtable on July 29 at noon PST.

This quarter's topic: "The Copyright Alchemists: From 'Happy Birthday' to 'This Land is Your Land,' Making Millions from Songs in the Public Domain."

The purpose of this roundtable is to bring together Bryan Cave attorneys from all practice areas (not just IP), guests and clients who share an interest in cutting edge intellectual property issues.

This quarter's topic will focus on instances where licensors have made money licensing of songs which they may -- on closer inspection -- not actually own.
Our special guests will include the Electronic Frontier Foundation's Fred von Lohmann, George Washington University's Robert Braunies, and music law attorney Michael Perlstein.

As with every BC Edge, the topic I've outlined is just the beginning: where the conversation goes from there is up to all who participate.

I hope that will include you.

Toll Free Dial In Number: 800-300-1596
Passcode: 949-223-7173

REGISTER YOUR MARKS WITH FACEBOOK BEFORE POTENTIAL CYBERSQUATTERS DO

2009-06-12T12:34:00.000-07:00

REGISTER YOUR MARKS WITH FACEBOOK BEFORE POTENTIAL CYBERSQUATTERS DO

Facebook, the social networking web site, just announced that commencing Saturday, June 13 at 12:01 AM EDT, it will allow its members to create personalized URLs for their Facebook pages. For example, .

To protect trademark rights holders by blocking potential cybersquatters from registering your brands as URLs, Facebook provides a means of reserving rights in marks via their trademark protection contact form available at the following web page: http://www.facebook.com/help/contact.php?show_form=username_rights.

Thus, to protect your Intellectual Property rights in your brands, I strongly recommend registering your marks with Facebook to prevent cybersquatters from adopting your brands for personalized URLs.

Please contact me if you require any assistance in reserving and registering your brands with Facebook as soon as possible, keeping in mind that the deadline is this Saturday.

jonathan.pink@bryancave.com

Pirates! And Even More Frightening, Polititians!

2009-04-20T23:33:00.000-07:00

An interesting confluence of events brings us back to my new favorite question: can the rights of copyright owners survive in the era of BitTorrent? Stated even less elegantly, if “content yearns to be free” (which is some silly phrase I must’ve heard somewhere that, nonetheless, succinctly sums up this whole dichotomy between copyright owners and on-line content thieves), what is to become of that precious right held by the content creator to actually make money from his or her creations?

Slight digression: as some of you know, I am a cartoonist. I like to say “I was syndicated before I went to law school.” I like to say it because it’s true, and well it also sounds pretty cool when delivered in an off-hand way. Try it, you’ll see. It certainly beats “I worked at the Dairy Queen.” Try that one too and you’ll see what I mean. Suave, cool and artsy vs. solid, clear-cut loser. So where was I going with this? Only that, as a content creator, I understand the desire to make some dough off of your art. Don’t get me wrong, I’d give my stuff away – and have (and still kick myself for not giving it to the National Lampoon when they said, “We love it, but we’re out of money thanks to Sam Gross over paying for everything”) – but when it comes down to it, I’d much rather get paid. It’s like getting paid to eat ice cream. So the point that I’m taking way to long to make is that wrong, uncool and just plain wicked to deprive a creator of the right to profit from his or her creation by downing-loading, copying, “sharing” or stealing it off of, over or through the Web. If you disagree, just let me know when you wouldn’t mind my stopping by to take anything of your that I might like for free.

Ok, back to our program. . . . So the interesting confluence of events are: (1) the illegal copying by a California Congressional candidate of a Don Henley song (and his vehement assertion that he had a right to copy based on the First Amendment); (2) a ruling in the Pirate Bay case (involving a P2P site not entirely dissimilar to Napster) and the political fall out from that ruling; and (3) the technology on the horizon that will make all this copying even easier.

The Wacky Politician – I am generally distrustful of politicians. I suppose that I’m of the opinion that they are self-serving, disingenuous and a-moral until proven otherwise. That said, I am nonetheless constantly surprised by what scumbags some of these people are (although generally so very, very nice when you meet them in person). Enter Republican (it figures) candidate for the U.S. Senate, Charles DeVore. According to the former Eagles rock star, Don Henley (free association: I once saw them in concert), the Republican (it figures) used Henley's songs "The Boys of Summer" and "All She Wants to Do Is Dance" in two campaign videos without Henley’s authorization. Note to would-be Republican (it figures) Senator: that’s copyright infringement, bucko.

DeVore (Republican; it figures) responded by claiming he had a First Amendment right to use the work. Huh? What, does he think no one’s listening to him? Maybe that’s how the Republicans do it. (Another digression: is it just me, or does it seem like a lot of Republicans went to USC? And why do those people from USC think it’s something to be proud of? And why do they buy those flags and hang them from their house and act as if they’re – well, Republicans all the time?) Anyway, so Henley sues, and DeVore plans to counter-claim and – even better – now apparently intends to use Henley’s music as part of a parody song, which you will recall may then entitle him to a fair use defense. Maybe it’s just me, but I bet that was his lawyer’s idea and not DeVore’s (the Republican; it figures).

For those of you who don’t remember much about the fair use doctrine, it permits short quotations used “for purposes such as criticism, comment, news reporting, teaching … scholarship or research [are] not an infringement of copyright.” 17 U.S.C. § 107. Courts evaluate fair use by considering four factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of copying, and (4) the market effect. The most significant is the last one. If the copy lessens the demand for the original work, it’s difficult to claim fair use. On the other hand, if the copy is used strictly for purposes of parody, criticism, or news reporting, it’s more likely to be deemed “fair.”
The Pirate Bay Ruling -- The Pirate Bay is a Swedish website that indexes and tracks bittorrent (.torrent) files. Since its humble beginnings in 2003 (it was created by the Swedish anti-copyright organization Piratbyrån – translated “The Piracy Bureau”), it has been involved in a number of lawsuits as both plaintiff and defendant (although not at the same time). The L.A. Times described the site as "one of the world's largest facilitators of illegal downloading", and "the most visible member of a burgeoning international anti-copyright—or pro-piracy—movement". By the end of 2008, it claimed to have over 25 million unique peers, meaning users who upload torrent files which link to the copyrighted material. With success like that, it will come as no surprise that several days ago, it’s principals were found guilty of criminal copyright infringement and sentenced to one year in a Swedish prison. (Which I imagine is filled with furnishings from Ikea, and serves those spicy ginger cookies to the prisoners.)

Surprisingly, this ruling has caused mass demonstrations against the jailing of these “pirates,” and moreover, the has apparently caused many young Swedes to affiliate with ‘The Pirate Party', a new political party that supports free file sharing for non-commercial use. According to press reports I have read, support for the Pirate Party had now surpassed that of the Swedish Green Party. (Huh, here we are, back on politics.) I find this fascinating because it strongly suggests that those who so firmly believe that “content is yearning to be free” (even if – surprisingly -- the contents of their own homes does not), will seek such homeostasis through political change. And why not? If people so strongly believe that the content created by others should belong to all – and not to those who created it alone – let’s put this thing to a vote. We know how Charles DeVore would vote.

Technology On the Horizon – And now for the coup de grace: Bittorrent tracking sites such as the Pirate Bay are on the verge of obsolescence. The technology poised to overtake them includes applications such as the Tribler, which – unlike those bittorrent file sharing applications that need to be pointed at torrent tracking sites such as the Pirate Bay, conducts its searches over a network of fellow bittorent users, thereby avoiding the centralized tracking sites entirely. Moreover, with applications such as iPredator, downloading can happen anonymously, meaning that copyright owners and prosecutors will have an even more difficult time locating the infringement and the infringers. Chuck DeVore, party of one? Your table is ready.

One last note: We’ll be discussing the inconvenient mismatch between the real world of P2P file sharing and copyright jurisprudence at the next meeting of BC Edge, April 29, 2009 at 12 noon Pacific Time. If you’d like to opine on whether copyright owners can survive in an era of fast evolving, dynamic, disruptive innovation, and whether the fair use doctrine should apply to file sharing, just send me an email and I’ll respond with the call-in number and pass code. My email is jonathan.pink@bryancave.com.

Second Circuit Revisits Key Word Debate

2009-04-07T11:41:00.000-07:00

Breaking News (if you consider it still “breaking” when in fact it occurred a couple of days ago).

The Second Circuit – the only court to firmly hold that key word advertising does not constitute trademark infringement – has overturned a lower court’s decision to dismiss Rescuecom Corp.’s trademark infringement claim against Google based on precisely such facts (e.g. selling the term Rescuecom as a keyword to Rescue’s competitors), and remanded the case for further proceedings. (Rescuecom Corp. v. Google Inc., case number 06-4881).

In making this ruling, the Second Circuit stated that, by selling the Rescuecom’s mark as a keyword to advertisers, Google’s conduct was likely to cause confusion, at least with respect to search-engine users who searched for Rescuecom’s trademark on Google. This, the Court found that Rescuecom had adequately alleged a Lanham Act claim. The Court however did not express any opinion as to whether Rescuecom could prevail on that claim.

You will recall, the Second Circuit previously ruled in 1-800 Contacts Inc. v. WhenU.com Inc. that WhenU’s triggered pop-up adds touting 1-800s competitors did not constitute trademark infringement because it was not a “use in commerce” as required under the Lanham Act. To a large degree, that case turned on the fact that WhenU did not use, display, or sell the 1-800 trademark to competitors. Here, however, Google is alleged to do all this and more.

We’ll see where this goes. It will be particularly interesting given the fact that the Second Circuit has been in the minority with respect to key word cases.

Another Opinion Copyright Ownership In the Era of BitTorrent

2009-04-07T10:56:00.000-07:00

I recently wrote about an artist who tried to gather support for a national day of “dining and dashing” to promote what he considered to be the injustice copyright owners face in the era of BitTorrent. There is no doubt that there currently exists an inconvenient mismatch between the real word of P2P file sharing and copyright jurisprudence, and that this inevitably leads to the question: can copyright ownership survive in an era of fast evolving, dynamic, disruptive innovation and should it?

Now a new book tackles this very question. Entitled Against Monopoly, and written by two econ professors at Washington University, David K. Levine and Michele Boldrin argue that intellectual property rights may stifle – rather than encourage – innovation, claiming that competition requires some degree of imitation.

Maybe.

As I argued in my last post on this issue, Professors Levine and Boldrin would seem to agree that even with P2P file sharing, musicians for example have an ancillary ability to make money off of their work, for example by using their increased popularity (that comes from easy access – read no coast – to their music) to sell more concert tickets, tee-shirts, etc.

While I wouldn’t go as far as they by suggesting we abandon the Copyright Act (far from it), I do think it needs some revision in order to allow for the reality of easy access to material in the Digital Age. Maybe the solution is to levy significant taxes on file-sharing companies such as BitTorrent, and use those proceeds to the artists whose works fuel these P2P sites. OK, that sounds pretty unworkable, even as I write it. But then again, what’s your bright idea?

Blog Bites -- A Few More Words on Micro-Blogging

2009-03-26T16:00:00.000-07:00

Not long ago I wrote a long, detailed piece on the potential pitfalls involved in blogging. What is not mentioned in that article in any detail is mico-blogging.

Micro-blogging is defined by Wikipedia as a form of blogging “that allows users to send brief text updates or micromedia . . . to be viewed by anyone or by a restricted group. . . .” Think Twitter or Facebook, MySpace, LinkedIn or Xing: Micro-blogging typically consists of short pieces, almost like “sound bites” or “blog bites,” if you will. They provide short, immediate commentary, and often related to such important, breaking news as “What I’m doing now is . . . .”

Because one often uses micro-blogging only with respect to one’s close friends (or expanded circle of friends), one’s micro-blogged persona may differ from one’s professional persona. Ask yourself this: would I “friend” my boss on Facebook and let him or her see everything that’s going on in my personal life? If the answer is “no,” you’ll understand why a number of companies no insist that job applicants “friend” them so they can check out the what isn’t on the resume.

Is this legally acceptable? Seems that it. I put the question to one of my colleagues who practices in the firm’s Labor & Employment Group, and her response was that it would seem to pass legal muster. (I’m omitting a slew of caveats, but that was the general idea.)

What’s more, a colleague in our Atlanta office chimed in with an anecdote about having found the “smoking gun,” which allowed his team to prevail on a lawsuit, on the plaintiff’s Facebook page. Hey, an admission is an admission no matter where you find it. But with the advent of the Internet, and the proliferation of micro-blogging sites, there are more opportunities to make potentially case-killing statements, and a greater chance that, once made, they won’t simply disappear into the ether.

Add into this mix, the Federal (and California, etc.) rules on electronic discovery, and you can see a storm brewing. In a nutshell, the Federal Rules explicitly incorporate e-discovery as subject to disclosure requirements. While certain “safe harbors” exist, for example where the e-information sought is automatically deleted as part of good-faith, routine system operations (and not as part of a plan to destroy evidence), the fact is that most of what we create in cyberspace (micro-blogs included) would be subject to such discovery, and we – and our clients – would have a duty to preserve such data, search for it and (gulp!) disclose it (provided it is relevant, not privileged and "reasonably accessible" of course).

So, what happens when Web 2.0 (social networking, Twitter, Facebook, etc.) meet e-discovery? The answer may depend on how – and if – such data can be archived. In other words, is it there when the opposing counsel asks for it? Certainly one could ask for a print out of everything available as of the date of the request.

Moreover, if the data resides on the Twitter, Facebook or LinkedIn server, it may be obtainable by subpoena, and if it has been stored on the responding party’s internal computer RAM, there seems to be no question that it is subject to discovery.

While this area of law is sure to evolve in the coming months, it is something to remember when seeking discovery, or representing a company in their hiring issues. After all, you don’t a blog bite to come back and bite you in the . . . .

Jonathan Pink is a member of the Intellectual Property Service Group at Bryan Cave, LLP. He can be reached at jonathan.pink@bryancave.com

An Italian Fling

2009-03-16T22:29:00.000-07:00

So I’m sitting in my office the other day, generally depressed about the depression, when my phone rings and (trumpets sound) a new case lands on my desk.

Now, I love the thrill of a new case. It’s like a new love (as best I can remember from way back when). Everything is new, and bright and interesting. And get this: this one was Italian. Actually, an Italian copyright case, to be exact.

Seems that my client – located in Italy -- had been accused by an American company of hacking into the Yank’s computer (located in the U.S.), and then copying software code (from Italy) that is covered by a valid, U.S. Copyright registration. And, of course, the U.S. company was threatening a parade of nasties all covered by the U.S. Copyright Act.

But that really begs the question, doesn’t it: if this was infringement, is it governed by the U.S. Copyright Act? Or is this a dispute that would have to be litigated in Italy?

In general, “United States copyright laws do not have extraterritorial effect, and therefore, infringing actions that take place entirely outside the United States are not actionable.” Subafilms, Ltd. v. MGM-Pathe Comm’ns Co., 24 F.3d 1088, 1091 (9th Cir. 1994) (en banc); Peter Starr Prod. Co. v. Twin Continental Films, Inc., 783 F.2d 1440, 1442-1443 (9th Cir. 1986). In other words, even if the plaintiff is a U.S. based company, and the method of copyright violation occurs by internet connection (as would have been the case if my clients had infringed as alleged), “[a]t least one alleged infringement must be completed entirely within the United States.” Allarcom Pay Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 387 (9th Cir. 1995); see also Danjac, LLC v. Sony Corp., 1998 U.S. Dist. LEXIS 22231, at *22 (C.D. Cal. 1998) (scope of injunction limited to domestic activities).

In Allarcom, the plaintiff was the authorized Canadian distributor of certain television and movie rights, while defendant, Showtime, had U.S. rights to some of the same material. 69 F.3d at 383-384. Co-defendant, General Instrument, manufactured a descrambling device that allowed unauthorized users to receive protected television signals from companies such as Showtime (e.g. they received the content for free by stealing it with the use of the descrambling device). The plaintiff sued for copyright infringement, filing its claim in a U.S. district court. The court held that the Copyright Act did not apply to infringement at issue, as it had occurred in Canada. Id. at 387. Specifically, the court held that although the signal was from the United States, it had been received and decoded in Canada, and thus “the potential infringement was only completed in Canada once the signal was received and viewed.” Id.

So bringing this back to my case, these facts will weigh heavily when negotiating a settlement. That is, while the plaintiff has asked for a boatload of money, I’ve pointed out that if she wants to litigate this case, she’d better brush up on her Italian (where, by the way, the penalties for alleged infringement are not as steep as they are in the U.S.). I’ll let you know haw this goes.

Jonathan.pink@bryancave.com

Trade Secret Cloak and Dagger: the Economic Espionage Act of 1996

2009-03-16T21:58:00.000-07:00

As if getting hit with a claim for misappropriation of trade secrets were not enough, many people do not realize (OK, it came as a surprise to me) that there is a criminal component to misappropriation. That is, at least where the theft is done for purposes of passing off the secrets to a foreign government.

Cloak and dagger: the Economic Espionage Act of 1996 (18 U.S.C. § 1831–1839) criminalizes the theft or misappropriation of a trade secret. Moreover, the offense applies even where the information taken is not top secret. (Although it makes the story so much more interesting if it is highly classified). The EEA involves any commercial information that is neither classified nor related to national defense (in which case it is falls under the run-of-the-mill espionage act).

This EEA in a nutshell: The Act is broken into two parts. The first, 18 U.S.C. § 1831(a), criminalizes the misappropriation of trade secrets (including conspiracy to misappropriate trade secrets and the subsequent acquisition of such misappropriated trade secrets) with the knowledge or intent that the theft will benefit a foreign power. The second, 18 U.S.C. § 1832, criminalizes the misappropriation of trade secrets related to or included in a product that is produced for or placed in interstate (including international) commerce, with the knowledge or intent that the misappropriation will injure the owner of the trade secret.

So far as I can tell, the EEA isn’t used all that often, and when it is, the cases seem to look to the Uniform Trade Secret Act for guidance as to what is -- or isn’t – a trade secret. There was one fairly high profile case decided in August, 2007 in the Northern District of California (before District Court Judge Jeremy Fogel). In that case, Judge Fogel sentenced a Canadian citizen, Xiaodong Sheldon Meng, to 24 months in federal prison "for stealing military software from a Silicon Valley defense contractor and trying to sell it to the Chinese military."

According to my sources, another case is poised to go to trial this May in the Central District of California. That case also involves efforts to sell (or at least deliver) to the Chinese government material that was gleaned by an employee of a military contractor.

Like most criminal conduct, the penalties for violation of the EEA are steep. Penalties for violation of Section 1813(a) include fines of up to $500,000 and imprisonment of up to 15 years. (Organizations can also be guilty of this Act, and while they won’t do any prison time, they will pay a fine of up to $10 million.) Penalties for violation of section 1832 are imprisonment for up to 10 years for individuals (no fines) and fines of up to $5 million for organizations.

jonathan.pink@bryancave.com
949-223-7173

I'm Just Copying for a Friend

2009-02-01T21:16:00.001-08:00

Here’s an interesting one to watch. The Supreme Court issued a one-line order yesterday in the Cable News Network vs. CSC Holdings case indicating that the solicitor general “is invited to file a brief in this case expressing the views of the United States.”

This case involved Cablevision Systems Inc.’s plan to copy its broadcasts for its customers. In other words, rather than copying the program yourself, at home (via Tivo or video, for example), Cablevision would do it for you. Not a bad offer, sort of a customer-centric, friendly service. Except that the movie studios and networks didn’t see it that way. They regarded this as copyright infringement pursuant to 17 U.S.C. § 106.

Section 106, as you will recall, gives the owner of the copyrighted work the right to prepare derivative works based on the copyrighted work, and to display and distribute copies of it to the public. 17 U.S.C. § 106 (1), (4) and (5). But under Sony Corp. of America v. Universal City Studios, Inc. (aka the “Betamax” case), 464 U.S. 417 (1984), the Supreme Court ruled that the making of individual copies of complete television shows for purposes of time-shifting does not constitute copyright infringement. The Court said this was fair use, and ruled that manufacturers of home video recording devices, such as Betamax or other VCRs, cannot be liable for infringement. In short, the case created a legal safe haven for the copying of content for personal use.

At trial, Cablevision argued that its copying was akin to the individual copying that is permitted under the holding in Sony. The studios and networks argued that it was nothing of the sort; that it was a violation of Section 106 as Cablevision received a benefit from this service, even if it did not directly charge for it. The trial court sided with the studios, but on appeal, the Second Circuit agreed with Cablevision. It held that this conduct was more akin to one’s own personal copying (e.g. with a home videocassette recorder and therefore the ruling in Sony), and thus not infringement at all.

While I like Cablevision’s argument, I’m not sure that I really buy it. That is, while it was not an issue at the time, I think it is fair to say that Sony stood for the proposition that the copying was fair use when it was done by the individual, not by a licensed content distributor who offered the copying service – albeit on the individual’s behalf — as a customer “perk.” Is this really that much different than a VCR just because someone else is pushing the “record” button? If it’s not, why can’t I walk into any Blockbuster, show them my cable bill (thus proving that I’m a subscriber), and demand a free copy of the Sopranos, Season II? And if they won’t hand over one for free, how about just letting me copy it? That is, if Cablevision can make a copy for me and that isn’t infringement, why is it infringement for me to copy of the disk I pick up at Blockbuster?

So, not surprisingly, the Supreme Court granted cert to slap somebody – it just remains to be seen who. Infringement or fair use . . . any bets on this? Given the current make-up of the Court, I’m going with a finding of infringement. Stay tuned.

I'm Just Copying for a Friend

2009-02-01T21:16:00.000-08:00

Saying So Long to the Eastern District of Texas

2009-02-01T21:15:00.001-08:00

“The stars at night, are big and bright, deep in the heart of . . . .” Well it ain’t Texas anymore.

In a ruling that issued last week from the United States Court of Appeals for the Federal Circuit, the Court seems to have put an end to the Eastern District of Texas as the “rocket docket” for patent claims. See In Re TS Tech USA Corp. (on Writ of Mandamus from United States District Court for the Eastern District of Texas in Case No. 2:07-CV-406 [Lear Corp. v. TS Tech]).

As you may know, recall, could-care-less, the Eastern District of Texas was the place for plaintiffs to file patent infringement claims. Why? Well it wasn’t for the scenery (or the caliber of intelligence associated with the recent Presidents they’ve produced). No, it was because of the amazing results so many patent plaintiffs had obtained there. Analogizing to another Western desert forum, the Eastern District was a slot machine that paid out more often than not. OK, so who could blame the plaintiffs bar for filing there?

In addition to the steady stream of successful plaintiffs’-patent cases, the Eastern District was notorious for refusing defendants’ motions to transfer venue. (Venue is governed by 28 U.S.C. Section 1404(a), and it generally provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to another district court or division where it might have been brought.” The Eastern District has traditionally translated this language to “Never.”

So, along comes TS Tech (”TST”), who is sued by Lear Corp (”Lear”) for the alleged infringement of Lear’s patent relating to pivotally attached vehicle headrest assemblies (for purposes of this blog, the “Thingies”). TST made the Thingies for Honda Motor Corp. whom (you will be surprised to hear) actually sells their cars into the Eastern District of Texas. (Yes, I was surprised to hear this too; it’s not all horses down there any more. Although one portion of the a horse is – in my mind – closely related to George W. Bush, but don’t get me started.)

Based on the presence of the Thingies on the Hondas in the Eastern District, Lear claimed that the courts there had jurisdiction, and – no surprise – the courts agreed. TST challenged that jurisdiction by way of a motion to transfer. The Texas district court sided with Lear and denied the transfer. It found that TST had failed to demonstrate that the inconvenience to the parties and witnesses clearly outweighed the deference entitled to Lear’s choice of bringing suit where it was sure to win – uh, I mean where it wanted to. Specifically, the court head that because several vehicles with the allegedly infringing headrest had been sold in the venue, the Eastern District had a “substantial interest” in having the case tried locally.

TST appealed. In a nutshell, TST argued that the district court had ignored precedent and clearly abused its discretion as the case had no connection to the Eastern district other than Lear’s decision to file there.

The Court of Appeals analyzed 28 U.S.C. Section 1404(a) and held that “[d]espite correctly applying some of the factors, the district court’s Section 1404(a) analysis contained several key errors.” First, the Court said that the trial court had given “too much weight to Lear’s choice of venue under Fifth Circuit law.” The Court noted that while such choice is “accorded deference,” it may not be a “distinct factor in the Section 1404(a) analysis.” Secondly, the Court said that the district court ignored the substantially increased cost associated with trying the case in Texas, as opposed to Ohio, where TST is based (and thus where witnesses and other documentary evidence would be found). Finally, the Court said that the lower court had “disregarded Fifth Circuit precedent in analyzing the public interest in having localized interest decided at home.” The Court observed (as had the lower court) that the Federal judges in Ohio were every bit as qualified to hear this case as were their brethren in Texas.

Based on this reasoning, and having further determined (through separate analysis) that the lower court’s ruling was therefore “patently erroneous,” the Court of Appeals determined that TST had met its burden of proof and therefore granted TST’s petition for Writ of Mandamus and transferred the venue from Texas to Ohio.

Is this the end of the Eastern District as the patent-go-to-rocket-docket? As much as I love to travel, I hope so. We’ll have to keep an eye on this issue, but it seems the wall has begun to crumble.

Jonathan Pink is a member of Intellectual Property Group at Bryan Cave, LLP. He is resident in the firm’s office in Irvine, California. He can be reached at jonathan.pink@bryancave.com or by dialing 949-223-7173.

Yield Dynamics Delivers Dynamic Trade Secret Defense

2008-11-30T11:04:00.000-08:00

In Yield Dynamics, Inc. v. TEA Systems Corp. 154 Cal.App.4th 547, 66 Cal.Rptr.3d 1 (007), the court of appeal concluded that a claim for misappropriation of trade secrets could not be found absent a showing of independent economic value. In Yield, plaintiff claimed that its former employee had wrongly misappropriated plaintiff’s proprietary source code by placing a sequence string of that code into defendant’s newly released product. The trial court granted defendant’s motion for nonsuit on the basis that the plaintiff company failed to demonstrate that the allegedly misappropriated source code had an independent economic value.

California’s Uniform Trade Secrets Act (”UTSA” or “Act”) defines a trade secret as certain types of information (e.g. formulas, plans, designs) that a company has taken reasonable steps to protect, and which is valuable because it has been kept secret. See Civil Code section 3426.1. The Act defines “misappropriation” as the acquisition by improper means, and subsequent use or disclosure of such trade secrets. Id.; Morlife, Inc. v. Perry, 56 Cal.App.4th 1514, 1526 (1997) (former employee’s use or disclosure of confidential customer information to solicit new accounts on behalf of a new employer constitutes the misappropriation of a trade secret); Merrill, Lynch, Pierce, Fenner & Smith, Inc. v. Garcia, 127 F.Supp.2d 1305, 1306 (C.D. Cal. 2000) “Improper means” includes “theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means.” Civil Code section 3426.1(a).

While most defense lawyers focus on establishing that the purported trade secrets fail to qualify for protection because the plaintiff neglected to take reasonable steps to secure their secrecy, or because the defendant either does not use the “secrets” or the “secrets” are in the public domain, few take the tact that the information taken lacks value to anyone beyond the parties themselves. This is precisely the argument levied by Terrence Zavecz, the founder and, as relevant here, sole employee of defendant TEA Systems Corporation in the Yield case. Zavecz argued that where the defendant cannot exploit the information allegedly misappropriated in order to gain a competitive advantage over (or to the disadvantage of) the original owner, then despite any reasonable efforts to maintain the secrecy of the information at issue, the plaintiff’s trade secret claim must fail.

The Court of Appeal agreed. Upholding the lower court’s conclusions, the Sixth Appellate District held that the allegedly misappropriated items were properly defined as “trade secrets” because plaintiff had not established any independent economic value associated with their secrecy. Specifically, the Court ruled that Yield had failed to establish that the segments of computer code at issue in Yield possessed independent economic value entitling the plaintiff to trade secret protection in that code. The Yield Court held that in order to establish the independent economic value element necessary to maintain a trade secret misappropriation claim, the plaintiff must prove more then simply secrecy and usefulness. The plaintiff must establish a discrete competitive advantage to the persons who could utilize the information to the economic disadvantage of the plaintiff, thus creating an economic value in the plaintiff maintaining secrecy over the information. The Court stated that a trade secret misappropriation claim will fail where the defendant cannot exploit the information, and thereby gain a competitive advantage, to the disadvantage of the original owner. 154 Cal.App.4th at 560-572.

In reaching its ruling, the Court adopted the definition of a trade secret found in the Restatement (Third) of Unfair Competition (1995). The Restatement defines a trade secret as business or technical information “that is sufficiently valuable and secret to afford an actual or potential economic advantage over others.” (Rest.3d, Unfair Competition, sec. 39.) The Court acknowledged that this advantage “need not be great,” but must be “more than trivial.” (Rest.3d, Unfair Competition, sec. 39, com. e, p. 430.) That is, merely stating that information was helpful or useful to another person in carrying out a specific activity, or that information of that type may save someone time, does not compel a factfinder to conclude that the particular information at issue was “sufficiently valuable . . . to afford an . . . economic advantage over others.” (Rest.3d, Unfair Competition, § 39.) Rather, the factfinder is entitled to expect evidence from which it can determine how useful the information is, e.g., how much time, money, or labor it would save, and that these savings would be “more than trivial.” (Rest.3d., Unfair Competition, sec. 39, com. e.)

Thus, the Yield case ruled that where the information taken lacks value to anyone beyond the parties themselves, and provides no genuine competitive advantage to others, it will not qualify as a trade secret under the UTSA. This ruling provides another viable attack for invalidating a plaintiff’s alleged trade secrets. Not only should the defense attack the plaintiff’s efforts to protect its purported secrets, and argue that the information was in the public domain (or never actually employed by the defendant), but where appropriate, it should strongly consider an attack based on demonstrating that the information lacks “independent economic value.”

Jonathan Pink can be reached at jonathan.pink@bryancave.com or 949-223-7173

Get Movin'!

2008-10-23T15:18:00.000-07:00

This blog has moved to www.jonathanpinkesq.com and so should you.

Blogging: Benefits, Barriers and Bombshells

2008-10-08T09:43:00.000-07:00

Blogging: Benefits, Barriers and Bombshells.
by Jonathan Pink

Blogging: Benefits & Barriers

"I’m going to start a blog," said a friend. When I asked why, her answer was simple: "I have a lot of things to get off my chest."

Seems a lot of people do. According to blog search engine, Technorati, there were nearly 113 million blogs as of June 2008. And according to the Blog Herald, that number may not include 72 million blogs coming out of China. (See "How Many Blogs Are There? Is Someone Still Counting?" by Ann Helmond, February 11, 2008.)

With numbers like these, chances are you know what a blog is. Wikipedia defines a "blog" as "a Web site, usually maintained by an individual, with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in reverse-chronological order. ‘Blog’ can also be used as a verb, meaning to maintain or add content to a blog."

Blogs have given millions of people a voice in a global conversation. They have also emerged as a cutting edge communication tool for attorneys, providing a fast, scalable and cost-efficient way of establishing an expertise, building a reputation, and connecting with clients worldwide. Those who learn to use blogs effectively are most likely to thrive in this modern world.

With all this opportunity, you’d think that launching a blog would be tough. It isn’t. In fact, you can have one up and running in about ten minutes. But barriers do exist. Most fundamentally, a blog is a digital relationship between author and reader. Like any relationship, it requires constant nurturing and attention. For a blog, this means frequently adding new posts. A blog that goes stale shows disinterest, and that isn’t helpful when trying to build a global connection.

Some ideas for keeping the digital relationship healthy: Set up a time to write each day. Commit to posting three times a week, no matter how short that post might be. Impose a word limit, like legal haiku, and write about a new case in five lines or less. Or, using no more than three lines, pass on a tip for younger lawyers. Or in one very long (but well punctuated) sentence, "get something off your chest." If these ideas don’t work, hire a ghost-writer, conduct an interview or invite a guest blogger to write for a while. And if none of this works, don’t sweat it. Do something else. Blogs can be great, but they’re no match for countless other things in life.

Blogging Bombshells:

There is no question that blogs can cut both ways: marketing goldmines and minefields of lurking liability. And understanding this is critical to exploiting their essence. A look at the artillery, and how to avoid it:

Copyright Infringement:

Stuffing your blog with high quality, original content is an excellent way to increase readership, web traffic and search engine ranking. Stuffing it with content poached from another site will only lead to trouble.

Copyright protects a wide range of works, including literary, musical, pictoral and audiovisual pieces from being reproduced without the permission of the copyright owner. 17 U.S.C. § 102. Subject to caveats and limitations we lawyers love, the owner of a copyright has the sole right to authorize a reproduction of the work, create a derivative work, distribute copies of the work, or display it publicly. 17 U.S.C. § 106.

In other words, just because it’s on the Web, doesn’t mean it’s free.

Then again, with blogging, nothing copied, nothing gained. Blogs by their nature are often snarky, dishy and critical. They may lift – or quote from -- copyrighted content just for the purpose of discussion. Does this type of copying amount to infringement? Remember the fair use doctrine? As the U.S. Supreme Court observed in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, "some opportunity for fair use of copyrighted materials [is] necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts. . .’."

This was the issue in an incident involving the Associated Press and the Drudge Report. The Drudge Report posted excerpts from several Associated Press articles, along with links to the original stories. The AP cried copyright infringement and sent the Drudge Report "take down notices" pursuant to the Digital Millennium Copyright Act (17 U.S.C. §§ 512(c), the "DMCA").
Drudge Report argued that its use was protected by the fair use doctrine because the text was there to spur discussion and debate. Under that doctrine, short quotations used "for purposes such as criticism, comment, news reporting, teaching … scholarship or research [are] not an infringement of copyright." 17 U.S.C. § 107.

But the analysis doesn’t stop there. Courts evaluate fair use by considering four factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of copying, and (4) the market effect. The most significant is the last one. If the copy lessens the demand for the original work, it’s difficult to claim fair use. On the other hand, if the copy is used strictly for purposes of parody, criticism, or news reporting, it’s more likely to be deemed "fair."

So if you want to post pics of "Hello Kitty" on your blog, be prepared to rant about how you’d like to see this cat wearing concrete shoes and a sign reading "Goodbye Kitty."
What About Secondary Liability?

Recall that secondary liability exists with respect to copyright law under two scenarios: contributory infringement and vicarious infringement.

Contributory copyright infringement is defined as either actively inducing, causing, or materially contributing to the infringing conduct of another person, or providing the goods and means necessary to help another person infringe. Black's Law Dictionary 796 (8th ed. 2004). Vicarious copyright infringement, instead, is a person's liability for an infringing act of someone else, even though that person has not directly committed an act of infringement. Id.

Let’s say you scrupulously avoid padding your blog with text, music or images you’ve lifted from other sites on the Web. What happens when your readers post copyrighted material to your blog? In a traditional print publication, you’d have a problem. In the cyber world, you have a defense.

The safe harbor provision of the DMCA may apply to protect you from liability, provided you comply with the Act’s requirement of designating an agent for notification with the Copyright Office, and establish – and post -- a policy against repeat infringement by your readers. See Io Group, Inc. v. Veoh Networks, Inc., 2008 WL 4065872 (N.D.Cal. Aug. 27, 2008).

In Io the plaintiff discovered ten short clips of its copyrighted skin flics running on Veoh’s website. (Like YouTube, Veoh hosts videos uploaded by users.) Rather than sending a DMCA take down notice, the plaintiff filed suit alleging copyright infringement. Veoh claimed that had it received a take down notice, it would have removed the allegedly infringing content and terminated the poster’s account. Based on this, Veoh moved for summary judgment, arguing that the DMCA’s Safe Harbors provides protection for: (1) transitory digital network communications; (2) system caching; (3) information residing on systems or networks at the direction of users; and (4) information location tools. The Court agreed.

Finding that Veoh was a Service Provider under the DMCA, the Court held that Veoh’s hosting of user-provided content was protected by the DMCA safe harbor provision. It ruled that "a service provider is eligible for safe harbor under section 512(c) if it (1) does not know of infringement; or (2) acts expeditiously to remove or disable access to the material when it (a) has actual knowledge, (b) is aware of facts or circumstances from which infringing activity is apparent, or (c) has received DMCA-compliant notice; and (3) either does not have the right and ability to control the infringing activity, or – if it does – that it does not receive a financial benefit directly attributable to the infringing activity."

Applying this ruling to the blogosphere, bloggers do not have a duty to police their blog for potential copyright infringement on behalf of third-parties, but must act to remove infringing content when put on notice.

What if the take down notice Gets it Wrong -- And the Work is Actually Entitled to Stay?
The flip side of the DMCA take down notice occurs when the original poster believes he or she had the right to post, and sends notice demanding the work be reinstated. Is there an obligation to determine whether the work is entitled to reinstatement? Yes, by the person who sent the original take down notice.

A person sending a take down notice under the Digital Millennium Copyright Act is required to affirm that he or she "has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law." 17 U.S.C. §512(c)(3)(A). If the sender knowingly makes a material misrepresentation in this regard, or is deliberately ignorant as to whether the material is authorized to remain, the party whose content is taken down can sue under 17 U.S.C. §512(f). Lenz v. Universal Music Corp., No. 07-3783 (N.D. Cal. August 20, 2008)

In Lenz, a mother videotaped her daughter dancing to Prince’s "Let’s Go Crazy," then uploaded the masterpiece onto YouTube. Shortly after the tyke’s debut, Universal Music Group put an end to it by sending YouTube a DMCA take down notice. Never mess with a mom: she argued that her use of the music was protected by the fair use doctrine, and sued Universal under §512(f). Universal moved to dismiss, asserting that a copyright owner cannot be required to evaluate the fair use question prior to sending a take down notice. The court disagreed, holding that the copyright owner must evaluate whether the material makes fair use of the copyright before sending the take down notice.

Trademark Infringement

Bloggers also run the risk of being hit with trademark infringement actions. This happened when Las Vegas nightclub, "Privé," sued Vegas-based blogger, Michael Politz.
Politz writes about the Vegas club scene on his blog, TheVegasEye. In July 2008, he made some unflattering comments about Privé, and included a copy of Privé's trademark. Privé alleged that Politz had "infringed upon, disparaged, diluted and tarnished" Privé's trademark by using it alongside defamatory statements about the club.

Politz will likely turn to the nomitive fair use doctrine in hopes of a defense. This doctrine permits the use of another’s trademark to identify the plaintiff’s goods or services provided there is no likelihood of confusion based on that use. Playboy v. Welles, 279 F.3d 796 (9th Cir. 2002). In Playboy, the House-of-Hef sued its former top bunny, Terri Welles, for using the words "Playboy" and "Playmate of the Year" in her website’s metatags. Welles won, arguing that these terms were necessary to describe her as "Playboy Playmate of the Year 1981."
With respect to Privé's claim that Politz disparaged the Privé trademark, the club is not likely to score points there. Although a party may be liable for disparaging another party’s goods or services, the Ninth Circuit has ruled that disparagement cannot apply to a trademark. See Freecycle Network, Inc. v. Oey, No. 06-16219, slip. op. at 13244-45 (9th Cir. Sept. 26, 2007). see also 15 U.S.C. § 1125(a)(1)(B).

Defamation

The Internet has opened new channels of communication and self-expression. The individual’s ability to have a voice in the world has never been greater. While this is good, it also presents risks to those who publish first and think later. As with traditional print media, laws related to defamation apply in cyberspace as well.

Defamation is a false and unprivileged statement of fact that is harmful to someone's reputation and published to a third party as a result of negligence or malice. It can appear in three ways: written defamation (libel); spoken defamation (slander); and the defamation of a business’ goods or services (trade libel).

Recall that truth is a complete defense. Also, the First Amendment protects statements of opinion. See Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990). A statement is an opinion when it is expressed in a manner that is not provably true or false, and cannot reasonably be interpreted as conveying actual facts. Id. at 17 -21.

The Anti-SLAPP Statute

Blogs have been a breeding ground for libel claims. Just think of my friend itching to get something off her chest. With 113 million bloggers, uncharitable things are going to be said, feelings are going to be hurt, and people are going to sue. See Tendler v. www.jewishsurvivors.blogspot.com, No. H031130, 2008 WL 2352497 (Cal.App. 6th Dist. June 10, 2008).

In Tendler, anonymous bloggers posted remarks about Rabbi Tendler. Finding their remarks farkakt and the bloggers meschuge, the good Reb sought subpoenas requiring Google (which owns the site on which the comments appeared) to disclose the IP addresses of the people who created the posts. The defendants showed a fair amount of chutzpah and moved to strike pursuant to California Code of Civil Procedure section 425.16. Section 425.16 provides that "[a] cause of action against a person arising from any act of that person in furtherance of the person’s right of . . . free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike . . . ." Siding with the defendants, the hochem judge granted their motion, and it was gute nacht for the Rabbi! Id. See also GTX Global Corp. v. Left, No. B192626, 2007 WL 1300065 (Cal.App. 2 Dist. May 4, 2007), (GTX sued after Left said on his blog that GTX was headed by a convicted felon, and engaged in stock fraud; court granted motion to strike and ruled that, for purposes of the Anti-SLAPP statute, Left’s blog was a public forum).

The Telecommunications Act of 1996, 47 USC § 230(c).

Bloggers may also have protection for allegedly defamatory statements made by others on their site. Providers of interactive computer services are immune from liability for content created by third parties when sued "as the publisher or speaker of any information provided by" someone else. 47 U.S.C. § 230(c).

Courts have applied Section 230(c) to a broad mix of "computer service providers," strongly suggesting a blog would also be covered. For example, courts have found that this Section shielded the publisher where third party content was posted on a roommate matching site (See Fair Housing Council v. Roommate.Com, 489 F.3d 921 (9th Cir. 2007)); an on line newsletter (Batzel v. Smith, 333 F.3d 1018, 1031 (9th Cir. 2003)); and a blog entitled "ripoffreport.com" that warned consumers about unscrupulous practices and bad service. Section 230(c) has also been used as a defense to claims of negligent misrepresentation, interference with prospective advantage, unfair business practices.

Invasion of Privacy

Invasion of privacy is a potential danger to bloggers for the unwarranted public disclosure of private facts and the unauthorized use of another person's name or likeness.
The unwarranted public disclosure of private facts

Private facts are those details that most people would not appreciate finding published on a blog. For example, in Steinbuch v. Cutler (DC D.C., filed May 18, 2005), plaintiff sued after Jessica Cutler included personal facts on her blog about Plaintiff when describing their intimate sexual relationship. OK, it wasn’t just him she was having a relationship with. She was having affairs with five other guys in her office, all at the same time, and she provided specific details about each of them. Plaintiff didn’t appreciate the disclosure – or at least Ms. Cutler’s unflattering exposè of his performance.

One defense to this type of privacy claim is that the facts disclosed are "newsworthy." A private fact is newsworthy if some reasonable members of the community would entertain a legitimate interest in it. Courts generally recognize that the public has a legitimate interest in almost all recent events, even if they involve private information about the participants. In Ms. Cutler’s case, that defense would have been worth trying. It turns out she didn’t work in any office. It was the office of a U.S. Senator, and one her lovers was a high level Bush appointee whom she described as "a married man who pays me for sex." Newsworthy? I’m interested.
The unauthorized use of another person's name or likeness.

Most states impose liability for the unauthorized use of another person’s name, likeness, or other attributes for exploitative purposes. In California, this typically involves the use of someone's name or likeness in a commercial setting, such an advertisement. California Civil Code § 3344 provides that "Any person who knowingly uses another's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without permission is liable for damages."

This language is likely broad enough to prohibit the unauthorized use of another person’s image on a blog, even if only to spruce up a site used to promote professional services. See e.g. Blair v. Nevada Landing Partnership, 859 N.E.2d 1188, 1192 (Ill. App. 2 Dist., December 8, 2006) (casino worker sued claiming the casino used his photograph on website without his permission; dismissed on statute of limitations defense); see also Lehman v. Discovery Communications, Inc., 332 F.Supp.2d 534, 539 (E.D.N.Y.2004) ("[A] republication of the plaintiff’s likeness can constitute a new cause of action if altered so as to reach a new audience or promote a different product.").

Again, most states have an exception to liability for news reporting and commentary on matters of public interest. For example, this defense would likely have applied if Ms. Cutler had posted the name or likeness of the politician who kept her on payroll.

Other Bombshells Worth Mentioning

While a totally comprehensive list of bombshells is nearly impossible, the following areas could also prove problematic to the unwary blogger.

Misappropriation of Trade Secrets -- The disclosure of someone else’s trade secrets is never a good idea. Plastering them on a blog is even worse. And the flipside: When intending to assert trade secret protection, it is a good idea to make sure the protected information is not posted on the company blog.

Unfair Competition -- California Business and Professions Code §17200 and 15 U.S.C. §1125(a) broadly protect against unfair competition. These statues can apply to such "unethical" conduct as inundating blogs with return hyperlinks.

Securities Fraud – Posting false information about a publicly traded company for the purpose of influencing investors’ purchase or sale decisions is a violation of the federal securities laws. See Stoneridge Investment Partners v. Scientific-Atlanta 552 U.S. ___ (2008). Despite what those bigwigs on Wall Street say, minimum security federal prisons are not just like summer camp for adults.

Obscenity Laws -- Federal statutes which prohibit the distribution of obscene material remain constitutional. See e.g. 18 U.S.C. 1461 and 1465; U.S. v. Extreme Associates, 431 F.3d 150 (3d Cir. 2005) (overturning lower court’s dismissal of indictment against operator of adult website for distributing obscene material); U.S. v. Bagnell, 679 F.2d 826 (11th Cir. 1982) ("[i]t is constitutionally permissible to subject defendants in obscenity prosecutions to varying community standards of the various judicial districts into which they transmit obscene material."). But c.f. Lawrence v. Texas, 539 U.S. 558 (2003) (pro-privacy decision which some interpret as calling into question constitutionality of federal statutes prohibiting distribution of obscene material).

The First Amendment -- Even after the Bush-Cheney Administration, the law remains that "Congress shall make no law . . . abridging the freedom of speech, or of the press. . ." Of course, that doesn’t mean anyone can say anything, anytime. See State v. A.B., No. 67A01-0609-JV-372 (Ind. App. April 9, 2007) (when middle school student posted obscenity-laced comment critical of school’s principal and criticized school’s policy against body piercings, appellate court held student’s web-based statements were political speech protected by the First Amendment); but c.f. Doninger v. Niehoff, 527 F.3d 41, (2nd Cir. 2008) (following high school student’s blog post referring to school administrators as "douchebags" and encouraging others to "piss off" school principal, school blocked student’s run for Senior Class Secretary; Second Circuit affirmed, reasoning offensive language did not comport with the standard of conduct expected of a school government participant).

The Reporter’s Privilege to Keep Sources Secret -- The "reporter's privilege" is the right, in some jurisdictions, that journalists have to keep their sources secret. This privilege should apply to bloggers who gather and disseminate news, especially in California, where it protects all persons "connected with or employed upon" a media organization. Cal. Const. art. I, § 2(b); Cal. Evid. Code § 1070. Indeed, at least one California case has expressly held that this law extends to bloggers. In O'Grady v. Superior Court, 139 Cal.App.4th 1423 (Cal.App. 2006), Apple Computer filed suit after bloggers disclosed confidential information about a device intended to facilitate digital sound recordings on Apple computers. When Apple sought to discover the source of this leak by subpoenaing information from the web sites on which it appeared, the defendants moved to quash. The trial court denied their motion, and the Court of Appeal reversed. It held that "any subpoenas seeking unpublished information from petitioners would be unenforceable through contempt proceedings in light of the California reporter’s shield (Cal. Const., art. I, § 2, subd (b); Evid. Code, § 1070); and . . ." Id. (citing Mitchell v. Superior Court (1984) 37 Cal.3d 268.) The court reasoned that the reporter's privilege applied to on line journalists because the law "is intended to protect the gathering and dissemination of news and that is what petitioners did here." Id.

Conclusion

Technorati estimates that there are two new blogs created every second. With figures like these, it’s easy to see how blogs are changing the face of media by giving a voice to millions, but also creating new opportunities for trouble. Still, for those eager to take advantage of this cutting edge communication tool, it isn’t hard. Just watch out for the bombshells and follow these easy steps:

1. Go to www.blogspot.com and follow the links to set up a down-and-dirty blog. (Estimated time: 10 minutes; estimated cost: $0).

2. Alternatively, go to www.wordpress.org and follow the links for the appropriate download. Why Wordpress? In two words: power and control. Wordpress has emerged as a leader in the field of blogging, attracting talented designers and programmers that are producing, usually for free, a large array of Themes (the templates that control the blogs appearance), Plugins (web-based applications written in PHP and Javascript that extend the capacity of what your blog can do) and Widgets (more advanced plugins that take advantage of the inherent structure to add features to your blogs Sidebars).

3. If you go with Wordpress, you will also have to: (a) purchase a domain name ($7.95 a year at www.omnis.com; ignore GoDaddy with its constant sales pitches); (b) Purchase hosting: $6.95 a month; and (c) Install Wordpress' latest version.

4. Begin posting and don't stop.

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Jonathan Pink is a member of the Intellectual Property Group at Bryan Cave LLP. His practice is focused on intellectual property and commercial litigation. Resident in the firm’s Irvine, California office, Mr. Pink represents clients nationwide. Jonathan.pink@bryancave.com; (949) 223-7173.

Bryan Cave LLP is a full-service law firm with nearly 1,000 attorneys worldwide. www.bryancave.com

Move to Bryan Cave

2008-06-22T07:24:00.000-07:00

Just to let you know, as of June 20, 2008, I have joined the Intellectual Property Group at Bryan Cave, LLP. Bryan Cave is one of the nation's oldest and largest law firms, and I am thilled to be a part of it. My new email address is jonathan.pink@bryancave.com. I am resident in the firm's Orange County office, where my direct dial is 949-223-7173. Keep in touch. JP

Something to Sing About?

2008-06-04T15:05:00.000-07:00

Imagine receiving licensing payments for your interest in a copyrighted musical work. Imagine that those payments are substantial. I'm talking hundreds of thousands, or even millions of dollars a year. Not bad, you say. Now imagine that, although you've been collecting these royalties for years and years, you don't actually have a defensible claim to the copyright! It’s almost like "pennies from heaven.".

This may sound great when you’re on the receiving end of this boondoggle, but imagine you’re on the other side. Paying a bundle to a putative copyright owner who doesn’t deserve a dime should cause you to whistle another tune. Shhhhh. Don't tell, but this may happen more often than you think. Certainly, it has come up in the last few years with regards to several songs: "This Land is Your Land," "Happy Birthday" and "Guantanamera."

During the 2004 presidential contest, web animation studio JibJab Media Inc. distributed an animated parody of President George W. Bush and Senator John Kerry that lifted a few lines from the classic Woody Guthrie song, "This Land is Your Land." Guthrie’s publisher, Ludlow Music, Inc. (which presumably makes a bundle off of the publishing and mechanical licenses to the song) threatened JibJab with a copyright infringement action. While JibJab's initial defense was founded on the "fair use" doctrine (makes sense), its counsel discovered facts to suggest that "This Land is Your Land" entered the public domain in the 1970s. Specifically, they found that Woody Guthrie wrote "This Land is Your Land" in 1940 and first sold versions of it as sheet music in 1945. Under the 1909 Copyright Act (which was applicable in 1940), a copyright owner was granted an initial copyright term of 28 years, and the opportunity for a one-time 28 year renewable.

According to JibJab, the song’s initial copyright term was triggered when Guthrie sold it as sheet music in 1945. This would mean that the original copyright term expired 28 years later, in 1973. While the copyright could have been renewed that year, it was not. This appears to have been because Ludlow Music believed that the copyright term began to run in 1956, and thus renewed the copyright twenty-eight years later, in 1984. When JibJab's attorneys brought this issue to Ludlow's attention, Ludlow's thirst for litigation subsided. Without conceding that it had no legitimate right to further royalty payments, Ludlow agreed to quietly put this issue to bed by allowing JibJab to continue distributing the "This Land" short . . . without any payment to Ludlow.

"Happy Birthday" is another excellent example of an owner collecting a bundle for a song that may be firmly ensconced in the public domain. While I never pay a dime for singing this song around my dinner table, somebody is shelling out some shekels for it. "Happy Birthday" is reported to generate $2 million in profits per year. I won’t spend a lot of time talking about this song because Professor Robert Brauneis of The George Washington University Law School just wrote an excellent piece about it entitled "Copyright and the World's Most Popular Song." (If I knew how to link to that article, "Copyright and the World's Most Popular Song," you would find it here. Alas, being the Luddite that I am, I’m unable to create that link. If you Google Professor Brauneis and the work’s title, you’ll easily find it.)

In a nutshell, Professor Brauneis dissects the song’s genesis, and analyzes its current copyright legitimacy. He demonstrates that "Happy Birthday to You" almost certainly is not currently entitled to copyright protection due to a variety of defects. Among them: there is no evidence as to who wrote the words to that famous song, there is no evidence that the copyright holder ever provided adequate copyright notice of the work as would have been required under the 1909 Act, and – perhaps most significantly – there appears to have been a failure to file a proper renewal of the copyright. Simply put, if you follow Professor Brauneis’s analysis, the work is in the public domain, and the $2 million paid annually for the right to license might as well be paid to Professor Brauneis – given that the current recipient of that largess has no greater claim on those proceeds does he.

Finally, not long ago, a Mexican-themed, national fast food chain was sued for having allegedly used the song "Guajira Guantanamera" (or its more famous American derivative, "Guantanamera") in its television commercials. My firm represented that chain, and although that case ultimately settled, our defense was poised to turn on a challenge to the copyrights. Specifically, with respect to the underlying work, "Guajira Guantanamera," we took the position was that even if that work was currently covered by U.S. copyright law (an debatable issue), the copyright was not enforceable by the song’s purported "owner," Spanish music publishers, Ediciones Quiroga, S.L. We based our argument on two statutes: (1) Section 104A of the Copyright Act (recognizing the principle of restoration of copyrights in certain qualifying foreign works); and (2) the Cuban Embargo, as codified in 31 C.F.R. § 515.201 (b) and (d).

Section 104of the Copyright Act was important if -- as appears -- "Guajira Guantanamera" fell into the public domain in the mid-1990s due to a failure to timely file a renewal. Specifically, 17 U.S.C. §104A(h)(3), (6) would have allowed the work to regain U.S. copyright protection provided certain conditions were met, but the restoration of such rights would have vested "in the author or initial rights holder of the work as determined by the law of the source country." 17 U.S.C. §104A(b) (emphasis added). As Ediciones Quiroga was neither (it had obtained its interest from the work's creator, Jose Fernandez Diaz, in 1942 and 1943), those rights would have gone to Diaz’s heirs. Why not then have Diaz’s heirs enforce the copyright? First, assuming those heirs reside in Cuba, they may not even know that they have a claim. Secondly, if they do know, and want to enforce their rights, any damages awarded or rights declared by them would likely be confiscated by the Cuban Government. (It is doubtful that any U.S. court would permit this to happen.)

The Cuban Embargo would come into play if Diaz’s heirs then decided to simply assign their rights to, e.g. Ediciones Quiroga. That embargo prohibits transactions, including transfers of ownership in real and personal property with the Cuban government or Cuban nationals, with certain limited exceptions. 31 C.F.R. § 515.201 (b) and (d); see also Havana Club Holding, S.A. v. Galleon S.A., 203 F.3d 116, 53 USPQ2d 1609 (2d Cir. 2000). Thus, the defense was prepared to show that, although Ediciones Quiroga continued to assert an ownership interest in"Guajira Guantanamera" (and collect significant royalties in connection therewith), its right to do so was less than certain.

With respect to the more widely known derivative work, "Guantanamera," the defense was poised to dismantle its copyright as well. "Guantanamera" was originally recorded in the early 1960s by music legend Pete Seeger, and remains controlled – to this day – by Seeger's music publisher, Fall River Music, Inc. Had the lawsuit not settled, the defense intended to focus considerable scrutiny on the copyright certificates filed by Fall River (including the amendments thereto). While many cases have held that unintentional mistakes on a copyright certificate are of no legal significance, intentional misrepresentations made in an effort to secure a copyright are typically treated differently. Material misrepresentations that are designed to secure a copyright certificate will typically render the copyright unenforceable. Whimsicality, Inc. v. Rubie's Costume Co., Inc., 891 F.2d 452, (2d Cir. 1989); Eckes v. Card Prices Update, 736 F.2d 859, 861-62 (2d Cir. 1984) ("knowing failure to advise the Copyright Office of facts which might have occasioned a rejection of the application constitute[s] reason for holding the registration invalid and thus incapable of supporting an infringement action." (quoting Russ Berrie & Co., Inc. v. Jerry Elsner Co., Inc., 482 F. Supp. 980, 988, (S.D. N.Y. 1980)).

The 9th Circuit has held that when it comes to invalidating a copyright based on intentional misrepresentations on the copyright certificate, one must also establish prejudice. Harris v. Emus Records Corp., 734 F.2d 1329, 1335, (9th Cir. 1984) ("Absent intent to defraud and prejudice, inaccuracies in copyright registration do not bar actions of infringement.") It seems fair to say that prejudice exists where one pays to license a work which is, in fact, in the public domain. This is especially so where the licensee acts due to the false representations the licensor made on the copyright certificate themselves.

One thing each of these cases have in common is the none made it to a jury: each settled long before this could happen. I suspect that the purported rights holders prefer it this way because they would stand to loose much more than they might gain. While these examples are illustrative, but they are by no means exclusive. There are very likely a large number of songs generating income for individuals and entities that have no right to such funds.

So what is the solution? I propose creating a database to expose such works. "This Song is Your Song . . . This Song is My Song." If you know of others, sing it out, bring them to light! After all, while "Pennies from Heaven" may be great . . . pennies from my pocket is another tune altogether.

Copyright Quake Hits California

2008-02-09T22:34:00.000-08:00

The United States District Court for the Southern District of California ruled on February 5, 2008 that the Copyright Remedy Clarification Act ("CRCA") "is not a valid exercise of Congress's power under Section 5 of the Fourteenth Amendment", thereby holding that a State, employee of a State (acting within his or her official capacity) or instrumentality of a State cannot be held liable for copyright infringement. See Marketing Information Masters, Inc. v. The Board of Trustees of the California State University System, et. al. (06cv 1682 JAH, SDCA February 5, 2008).

In Marketing Information Masters, Marketing Information Masters, Inc. ("MIM") sued the Trustees of the California State University and their employee, San Diego State University (SDSU) professor Robert Rauch, for copyright infringement. MIM alleged that Rauch had copied large portions of MIM's 2003 Pacific Life Holiday Bowl report in creating SDSU's 2004 Holiday Bowl report.

The SDSU defendants filed a motion to dismiss, claiming that the Eleventh Amendment provided them with immunity to such a claim. The plaintiff argued that the Eleventh Amendment did not apply because Congress passed the CRCA, which expressly provided that "[a]ny State, instrumentality of a state... or employee of a State or instrumentality of a State... shall not be immune, under the Eleventh Amendment" to a suit for copyright infringement. 17 U.S.C. Section 511(a). The defendants took the position that the CRCA was an invalid exercise of Congress's power, and thus did not constitute a valid waiver of the Eleventh Amendment.

The District Court agreed, finding that the CRCA "was not passed pursuant to a valid exercise of [Congress's] Fourteenth Amendment enforcement powers," and holding that "the CRCA does not constitute a valid abrogation of state sovereign immunity." See Order Granting in Part and Denying in Part Defendant's Motion to Dismiss ("Order"), page 5.

In reaching this ruling, the Court noted that the "Eleventh Amendment provides a state immunity from suit unless the state consents to be sued or Congress validly overrides the state's immunity." Id. at p. 3 (citing Green v. Mansour, 474 U.S. 64, 68 (1985)). To determine if Congress validly overrode a state's immunity, the Court said that it "looks to two factors: (1) whether Congress expressed a clear intent to override the state's immunity and (2) whether Congress acted pursuant to a congressional grant of authority." Id. (citing Seminole Tribe of Florida v. Florida, 517 U.S. 44, 55 (1996)).

Moreover, to determine whether an act constitutes a valid exercise of Congress's power under Section 5 of the Fourteenth Amendment, the Court said that it must find that Congress identified "'conduct transgressing the Fourteenth Amendment's substantive provision, and... tailor[ed] its legislative scheme to remedying or preventing such conduct.'" Id. at pages 3-4 (citing City of Boerne v. Flores, 521 U.S. 507 (1997), and quoting Florida Prepaid v. College Savings Bank, 527 U.S. 627 (1999)).

After setting forth this framework, the Court noted the relative dearth of case law addressing this issue. It observed that "[n]either the Supreme Court, nor the Ninth Circuit has addressed the issue of whether the CRCA is a valid abrogation of state sovereign immunity." Order at page 4. Nonetheless, it added that "the Supreme Court struck down as unconstitutional two similar 'remedy clarification' acts involving intellectual property rights." Id. (citing Seminole Tribe, supra (invalidating the Patent and Plant Remedy Clarification Act) and College Savings Bank v. Florida Prepaid Postsecondary Education Expense Fund, 527 U.S. 666 (1999) (invalidating the Trademark Clarification Act)).

Further, the Court observed that the only other case to directly address this issue following the holding in Seminole was Chavez v. Arte Publico Press, 204 F.3d 601, 608 (5th Cir. 2000). Applying the analytical framework of Florida Prepaid, the Chavez court said that "the relevant inquiry for determining whether the CRCA constitutes a valid exercise of Congress's Fourteenth Amendment powers is: (1) whether there is a pattern of copyright infringement by the states; (2) whether adequate state remedies for copyright infringement exist; and (3) the coverage of the legislation." Order at page 5 (citing Chavez, 204 F.3d at 605). Based on its analysis of the CRCA as discussed in Chavez, the Fifth Circuit found that Congress had "failed to uncover a pattern of constitutional violations by states regarding infringement of the copyright act, failed to consider alternative methods of obtaining relief, and failed to limit the reach of the CRCA in any manner." Id. (citing Chavez, 204 F.3d at 605-608).

Following the path set forth in Chavez, the Marketing Court then embarked on an analysis similar to that of the Chavez court. It expressly embraced holding in Chavez, stating that "[t]his Court concurs with the Fifth Circuit's application of the analytical framework presented in Florida Prepaid to the CRCA." Order at page 6. Specifically, the Marketing Court considered whether the evidence and testimony that Congress studied prior to enacting the CRCA demonstrated a pattern of copyright infringement by the states. The Marketing Court concluded that the evidence Congress considered did not "demonstrate a pattern of unremedied copyright infringement by the states." Id. at page 6. At most, the Court said, the evidence demonstrated "sporadic violations, not widespread violations by the states.... Additionally, [the] Register of Copyrights, reported during his testimony that states are 'respectful of copyright law' and he believes they will remain so." Id.

Next, the Marketing Court considered whether Congress had adequately examined the adequacy of state remedies for copyright infringement prior to enacting the CRCA. Id. Again, it concluded that it had not, finding that Congress had only "minimally considered" the adequacy of such state remedies. Id. Finally, the Court considered whether the coverage of the CRCA was sufficiently narrow to address conduct that violates the due process clause of the Fourteenth Amendment. Order at page 5 - 6. Again, the Court responded in the negative. Id. In reaching this conclusion, the Court harkened back to the ruling in Florida Prepaid, 527 U.S. at 645, where the Supreme Court had held that provisions of the Patent Remedy Act which did not require any showing of intent to infringe were not sufficiently tailored to remedy unconstitutional behavior. "The discussion in Florida Prepaid teaches 'that a deprivation, to fit the meaning of the due process clause, must be intentional....'" Order at page 7 (quoting Chavez, 204 F.3d at 607).

Thus, the Marketing Court held that because copyright infringement does not require a showing of intent, Congress had "failed to limit the reach of the CRCA to infringement which violates the due process clause." Order at page 7. As such, the Court concluded that "the CRCA is not proportionate to ends legitimate under ' 5 of the Fourteenth Amendment." Id. Based on this, the Court ruled that "Defendant Board of Trustees and Robert A. Rauch, in his official capacity, are entitled to immunity." Id.

It is worth noting that the Marketing plaintiff tried to avoid the Seminole effect by relying on two cases in support of its position that the CRCA was indeed a valid a exercise of Congressional power: Unix System Laboratories, Inc. v. Berkeley Software Design, Inc., 832 F. Supp. 790 (D.N.J. 1993) and Lambert v. City of Kenner, 1993 WL 99188 (E.D. La. 1993). In both instances, the courts that heard those cases relied on the Supreme Court's holding in Pennsylvania v. Union Gas Co., 490 U.S. 1 (1989) in arriving at their decision. See Unix, 832 F. Supp at 798; Lambert, 1993 at WL 99188 at *3. What Marketing Information neglected to mention, however, was that Union Gas was overruled by Seminole Tribe, and thus no longer good law. Indeed, in Seminole, the Supreme Court expressly overruled Union Gas by noting that that case had "deviated sharply from [the Court's] established federalism jurisprudence." Seminole Tribe, 517 U.S. at 45.

Certainly the history and the timing of the CRCA demonstrates how -- and why -- the plaintiff's reliance on Union Gas was misplaced. As Professor David Nimmer details in Nimmer on Copyright Section 12.01, the Register of Copyrights had in fact suggested to Congress that it wait until the Supreme Court ruled on Union Gas before passing the CRCA, suggesting that if the Supreme Court validated Congress's authority to abrogate sovereign immunity in that case, Congress should amend the Copyright Act to permit states to be sued. When the Supreme Court handed down its ruling in Union Gas, Congress passed the CRCA the following year. See also H.R. Rep. No. 101-305, 101st Cong., 2d Sess. 8 (1990) ("The recent decision in ... Union Gas Co., affirmatively answered the question that Congress does have the power to abrogate when it legislates under the Commerce Clause. The same reasoning applies to the Copyright Clause that also grants Congress plenary power to enact Federal Legislation.").

Judge John A. Houston's ruling in Marketing that the CRCA does not survive constitutional scrutiny under the enforcement clause of the Fourteenth Amendment may gain some support from the proposition (although unstated in the Marketing ruling) that the Supreme Court would invalidate the CRCA if confronted with that issue today. The reason for this is three-fold.

First, the Supreme Court has already invalidated the efforts of Congress to subject the States to suit for patent and trademark infringement based on statutes nearly identical to the CRCA. See Florida Prepaid, supra, 527 U.S. 507 (1999); and College Savings Bank v. Florida Prepaid, supra, 527 U.S. 666 (1999). Second, the Supreme Court expressly intimated a ruling that the CRCA does not pass constitutional muster in Chavez, supra, 517 U.S. 1184 (1996). Specifically, in Chavez, the Supreme Court granted a petition for writ of certiorari to consider the Fifth Circuit's ruling in Chavez v. Arte Publico Press, 59 F.3d 539 (1995). That lower court case had held the CRCA to be valid exercise of Congressional power. The Supreme Court vacated that judgment and remanded Chavez for consideration in light of Seminole Tribe. The resulting opinion in Chavez v. Arte Publico Press found the CRCA to be unconstitutional.

Third, as discussed in the Marketing opinion, the CRCA does not comply with the analytical framework as set forth in City of Boerne v. Flores, 521 U.S. 507 (1997). In Boerne, the Supreme Court held that Congress acts validly pursuant to Section 5 of the Fourteenth Amendment only when it crafts legislation to enforce its provisions. Id. at 519. Further, the Court said that the means Congress chooses to enforce Section 5 must be congruent and proportional to the injury to be remedied. Id. at 520. As Judge Houston noted in Marketing, the CRCA does not comply with Boerne because there is scant evidence of a pervasive pattern of copyright infringement by the States, and because Congress apparently disregarded the available alternative state remedies for would-be plaintiffs. Therefore, because Congress identified no pervasive pattern of infringement by the states, and because other adequate remedies exist to address such infringement, the Supreme Court would likely find that the CRCA was not "proportionate and congruent," and thus does not pass muster.

Based on this, the current trend (and certainly the state of the law in the Southern District of California and in the Fifth Circuit) is that a plaintiff cannot prevail in a copyright infringement claim brought against a State or State-actor when the latter is acting in his or her official capacity. See also Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 101 (1984) ("the Eleventh Amendment bars a suit against state officials when the state is the real, substantial party interest"); D'Angelo v. Crofts, 162 Fed. Appx. 728,729 (9th Cir. 2006) (the "Eleventh Amendment prevents recovery against the state or against state officers in their official capacity for retroactive money damages").

The defendants in Marketing Information Masters were represented by Jonathan Pink, a partner in the Orange County, California office of Lewis Brisbois Brisbois Bisgaard and Smith, LLP. Lewis Brisbois is a national law firm with more than 600 lawyers and thirteen offices across the nation. Mr. Pink is Vice Chair of the firm's Intellectual Property Group. He may be contacted at pink@lbbslaw.com.

Who Wants to be an IP Attorney?

2008-01-24T14:43:00.000-08:00

So, I’m in my office yesterday when the telephone rings. A frantic voice on the other end is desperate to find out how she can patent the copyright in her trademark.

I hang up on her.

Now, while I realize that a client’s inability to draw fine distinctions between sometimes overlapping areas of intellectual property law is not quite as bad as right wing nuts wearing patriotic lapel pins, I was nonetheless irked by such blissful ignorance.

O.K., so maybe I drink too much coffee and don’t get enough sleep. And maybe I should save my hostility for infuriatingly slow motorists driving cars way more expensive than mine. Or maybe – just maybe – it is my duty to educate the masses.

Let’s go with the latter. And just to make this fun, let’s pretend we’re on a television game show called "Who Wants To Be An IP Attorney?" Ready? (Que: music.) Begin!

Question No. 1:

What is a trademark?

A. A specific form of copyright protection that applies only to patents.

B. A word, symbol or devise intended to prevent consumer confusion with regard to the origin of goods or services sold.

C. This thing that’s growing on the side of my neck which looks oddly like Elvis Presley and may be worth something on Ebay.

The answer is B. Trademarks are intended to prevent mistake, deception and consumer confusion with regards to the origin of goods sold. See Time, Inc. v. Motor Publications, Inc., (4th Cir. (M.D.), Dec 15, 1955) 227 F.2d 954, 108 U.S.P.Q. 4. Before any infringement can be found, the plaintiff must typically establish that there is a likelihood of consumer confusion as to the product's source - or origin - due to a similarity between the parties' trademarks. E & J. Gallow Winery v. Gallo Cattle Co. (9th Cir. 1993) 967 F.2d 1280, 1290; see also 15 U.S.C. §§ 1114(a)(a), 1125(a)(1). This usually requires an application of a multi-factor test that looks at the strength of the plaintiff's mark, the similarity of the marks at issue, the area of commerce in which the products at issue are sold, the sophistication of the potential buyers, evidence of actual confusion, and the likelihood that the defendant intends to expand into the plaintiff's market. AMF Inc. v. Sleekcraft Boats, (9th Cir. 1979) 599 F.2d 341, 348-349.

Give yourself one point if you got the correct answer. Give yourself two points if you shouted out "DING, DING, DING!" when you got it right. If you chose answer C, put down this article and log onto to Ebay immediately.

Question No. 2:

True or false, trademark infringement occurs any time someone swipes your mark for use on their product or service.

A. Ooh ooh, a "true or false" question. I just love these! It’s the only time I have a 50/50 shot at being right about anything. I knew it was worth wasting time on this article. Ok, here goes: I’m going with true!

B. Oh, I hate these questions. Look at this, a 50% change of being wrong . . . again! Alright, fine, I’m going with false.

C. Wait a minute, before I answer, let me ask you this: If it’s called "pattern baldness" why doesn’t it come in paisley, check or gingham?

The answer is.... B! Trademark infringement requires the commercial use of the same or similar mark by another with respect to goods or services that is likely to cause confusion with respect to the actual or potential customers of the trademark owner’s goods or services. 15 U.S.C. § 1125
(a). The focus here is on the confusion of actual or potential customers, and not on whether the holders of competing marks are in fact competitors. Id.; see also Charles E. McKenney, Federal Unfair Competition: Lanham Act § 43(a), 2.04 (1993). An infringers product or service need only be sufficiently related to the trademark owner’s goods or services so that it is reasonably likely that both goods/services are sold or advertised to common costumers. AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979).

Just remember, a "likelihood of consumer confusion" is the hallmark of trademark infringement. This means, just because I have a company named "BigGass" that sells legume-based confectionary products ("designed to fill your tank"), and you have a company named "BigGass" that sells petroleum-based pantaloons to the super-sized crowd, there will be no finding of infringement unless there is a likelihood that a consumers would mistakenly believe that my candy company is the source of your haute couture. This is because trademarks are obtained for distinct classes of goods and services. United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1918); see also 15 U.S.C. § 1052(d). Using this same example, clothes for fat people are not in the same class of goods as are candy bars. Although, wouldn’t it be ironic if they were?

One point if you got the answer right. Two points if you ran down the hall screaming "DING, DING, DING!" Three points if you’ll do it now.

Question No. 3:

What’s with that ®?

A. It means you’re claiming a trademark. Isn’t that what this insipid article is all about?

B. It’s stands for "Robin." Those IP folk are such Batman fans.

C. It means that the trademark holder has obtained a federal registration in the mark.

The answer is C. Only those who have obtained a federal registration in their mark are entitled to use the ®. See Copelands’ Enterprises Inc. v. CNV, Inc., 945 F2d 1563 (Fed. Cir. 1991). Those who have not obtained a federal registration may claim a common law trademark, but are relegated to the ™ symbol. What’s the difference? Trademarks are geographic in nature. This means that if I use my BigGass mark exclusively in California, and do not obtain a federal registration in it, you can come along and use that same mark in the same class of goods or services for geographic regions where I am not using it. Like New York, Illinois, Arizona, Washington. Conversely, by obtaining a federal registration in my mark, I acquire a nationwide constructed usage of it. 15 U.S.C. § 1072. This means that even though I don’t sell in New York, Illinois, Arizona and Washington, I have the same rights there as if I did, and those rights date all the way back to the filing of my trademark application. Id.; Allard Enterprises, Inc. v. Advanced Programming Resources, Inc., 249 F3d 564 (6th Cir. 2001). Technically speaking, this means that I have a basis for asserting trademark infringement against subsequent users of the mark in my class.

Moreover, a federal registration is prima facie evidence of ownership. But use of the ® without a federal registration will defeat the applicant’s right to registration where "it is conclusively established that the misuse of the symbol was occasioned by an intent to deceive the purchasing public or others in the trade into believing that the mark was registered." Copeland’s Enterprises, Inc. v. CNV, Inc. 945 App.2d 1563, 1566, (Fed.Cir. 1991). The last thing you want is to have a mark invalidated by a competitor because you jumped the gun and used ® prior to actually obtaining a federal registration.

If you got that answer right, give yourself a point. If you are willing to phone up your managing partner and scream "DING, DING, DING!" . . . it’s time to look for another job.

Question No. 4:

What is a "primary user" and a "secondary user?"

A. Drug talk.

B. The co-dependent relationship I had in college.

C. Given that this is a trademark article, I’m going to bet that it has something to do with trademarks.

The answer is A. Just kidding!! The answer is C. Primary mark holders are the first users of the trademark in any geographic location. Secondary users are ... well, just as the name implies. Now you might think that a secondary mark user is automatically an infringer. Not so. Let’s go back to my common law trademark in "BigGass." Sure, I’ve been selling my candy under that mark since the early ‘80's, and you just entered the market with your own confusingly similar mark. While you are undisputedly the secondary user, you are still free to use the mark in those geographic regions where I have yet to venture. In that instance, you become the primary mark user in those locations, relegating me the secondary user (if I ever attempt to go there). Absent various exceptions, caveats and loop holes that we lawyers specialize in, the secondary user who uses the mark in the primary user’s geographic location will be subject to a trademark infringement suit. This is so even if the secondary user obtained a federal registration in the mark after the primary user began using it but before going into that territory. See National Association for Healthcare Communications, Inc. v. Central Arkansas Area Agency on Aging, Inc., 257 F3d. 732 (8th Cir. 2001).

If you got this answer wrong, take away all your points.

Question No. 5:

How long will my trademark last?

A. The life of the author plus 70 years.

B. Possibly forever.

C. The Rule Against Perpetuities.

The answer is B. Provided you comply with certain minimal renewal requirements, a trademark lasts as long as it is in continuous use. See 15 U.S.C. §§ 1127, 1058, 1065. Continuous use simply means that there has been no intent to abandon the mark, and the mark has not been out of use for three or more years. A failure to use the mark for three or more years constitutes prima facie evidence of abandonment, even without any intent to do so. 15 U.S.C. § 1127.

Give yourself a point regardless of your answer. I’m feeling benevolent, and my twelfth cup of coffee is just starting to kick in.

Question No. 6:

Which of the following is not a trademark?

A. The roar of the MGM lion.

B. The phrase "Just Do It."

C. Kleenex.

The answer is ... all three are trademarks, although it is questionable as to how much longer Kleenex can hold onto that right. (Stop complaining. I just gave you a free point.) In addition to abandonment, trademark protection may be lost where the mark becomes generic. In a way, this is penalty for becoming too popular. Kleenex provides a perfect example, as does Xerox. How many times have you asked someone to make you a Xerox, or for a Kleenex? Both marks have become colloquial for the products they represent: a Kleenex is a soft facial tissue, and a Xerox is a photocopy. Once a mark becomes so widely associated with the generic product itself that people start referring to all products of that type by the mark (i.e. photocopies as Xerox’s and facial tissues as Kleenex), the mark runs the risk of losing out to the common lexicon. See In re Dial-A-Mattress Operating Corp., 240 F.3d 1341 (Fed. Cir. 2001).

This is because the level of protection a mark provides – and its concomitant ability to serve as a mark at all – depends on where it falls on a continuum that ranges from "descriptive" to "suggestive" to "fanciful and arbitrary."

What’s a descriptive mark? A name that describes the goods or service, such as "Tom the Plumber." Japan Telecom, Inc. v. Japan Telecom America, Inc., 287 F.3d 866 (9th Cir. 2002). A suggestive mark leaves a little more to the imagination, e.g. "Fastpress" for basketball shoes. Id.

On the far end of the spectrum is fanciful and arbitrary marks. Think Kodak. What does that mean, "Kodak"? Well, nothing. It is merely a word that good Mr. Eastman created many years ago by taking the word Kodiak – as in the bear – and eliminating a letter to create the name of his new company. The more arbitrary and fanciful the mark, the stronger it is. The more the descriptive the mark, the weaker it becomes. Ironically, both Kleenex and Xerox started out fanciful, but because of their popularity have gone nearly to the other end of the spectrum. Who says popularity doesn’t have its price?

Give yourself a point if you can explain this: Why, if breakfast is the most important meal of the day, doesn’t it come with dessert? Give yourself two points if you’re in the dark about this like the rest of us.

Question No. 7:

What is the initial interest confusion doctrine?

A. It is how I feel after having read this article.

B. It relates to confusion the Patent and Trademark Office must feel when reviewing zillions of trademark applications from people with companies called BigGass.

C. It is a little known judicially created hangnail that exists under the trademark law.

The answer is C. The initial interest confusion doctrine looks at whether the defendant’s use of the plaintiff’s mark was done "in a manner calculated to capture initial consumer attention even though no actual sale is finely completed as a result of the confusion." Dr. Seuss Entrs. v. Penguin Books (9th Cir. 1997) 109 F.3d 1394, 1405; Brookfield Communications, Inc. v. West Cost Entertainment Corp. (9th Cir. 1999) 174 F.3d 1036, 1061-66; See generally 15 U.S.C. §§ 1114, 1125.

Some people have criticized the initial interest confusion approach as a departure form the core principal of trademark law because if allows a finding of infringement where there is only a fleeting confusion that is dispelled before any purchase occurs. Others have observed that, because it relies on an amorphous standard that falls far short of a reasoned analysis, it has the potential of being used as a potent weapon for keeping legitimate competitors out of the market. For example, the doctrine has been used to curtail parodies, (See Dr. Seuss, supra.) criticism about the trademark owners, (OBH, Inc. v. Spotlight Magazine, Inc. (W.D.N. 4 2000) 86 F.Supp.2d 176; J.K. Harris & Co. v. Kassell (N.D. Cal. 2002) 2002 WL 1303124, rev'd (N.D. Cal.2003) 253 F.Supp.2d 1120)), directory information about used equipment dealers, (Caterpillar Inc. v. Telescan Techs, LLC ((C.D. Ill. 2002) 2000 U.S. Dist Lexis 3477; PACCAR Inc. v. Telescan Techs, LLC (6th Cir. 2003) 319 F.3d 246), and promotions by third party vendors of after-market servicing. See Promatek Indus. Ltd. v. Equitrac Corp. (7th Cir. 2002) 300 F.3d 808.

The basis upon which many courts have applied the initial interest confusion doctrine probably is better categorized as "unfair competition." See Section 43 (a) of the Lanham Act (which permits an injured party to bring a federal unfair competition claim). In a nutshell, Section 43 (a) is designed to promote fairness and honesty in business dealings by prohibiting, among other things, the use of any false or misleading description of fact, designation of origin, or misrepresentation as to characteristic, quality, affiliation, association, or geographic origin. Id.

Examples of unfair competition include confusingly similar corporate, business and professional names, and the use of confusingly similar titles of literary works. It also includes "bate and switch" selling tactics.

Give yourself a point if you got the answer right. Give yourself two points if you will mercilessly lobby the 9th circuit to get rid of the initial interest confusion doctrine.

Question No. 8:

OK, I’ve listened to your rant, so tell me: Why can’t I patent the copyright in my trademark?

A. Because it would be too damn expensive.

B. Because every IP attorney I call hangs up on me.

C. Because patents, copyrights and trademarks are three different legal rights.

The answer is C, although just to add to your confusion, these distinct rights sometimes overlap.

A trademark, as we saw above, includes any word, name, symbol, device, or any combination thereof, used or intended to be used in commerce to identify and distinguish the goods of one manufacturer or seller from the goods manufactured or sold by others, or to otherwise identify the source of the goods. 15 U.S.C. §§ 1114, 1125. A copyright is a legal protection afforded to literary, artistic, musical and architectural works exhibiting a modicum of originality that are fixed in any tangible medium. 17 U.S.C. § 102(a). Patents come in several different forms, including design, utility and mechanical. Generally, the subject of a patent application must be sufficiently original, non-obvious and useful. See 35 U.S.C. § 100 et. seq. A patent affords the holder the right to exclude others from making, using, offering for sell, selling or importing into the United States the patented invention. Id. So don’t even try to copyright it.

Give yourself 10 points for reading this dribble. Give yourself another 10 points if you understood any of it. Give yourself 10 points if you are willing to hang up on the next client who calls with a silly question. Tally up your points, contestants. Game’s over.

Jonathan Pink is a partner at Lewis Brisbois Bisgaard & Smith, LPP. He heads the Intellectual Property and Technology Group in the Orange County office of that firm. He may be reached at pink@lbbslaw.com

Considering a Recovery of Attorneys’ Fees

2008-01-24T14:39:00.000-08:00

When Considering a Recovery of Attorneys’ Fees, The Contract Language Tells All
By Jonathan Pink

Your So Called Life

Your client has been sued for more money than you’ll earn in thirty years of practice. After you recover from your depression over this simple fact, you pour three years of your life into defending the case-from-hell. You work hard. You rack up enough fees to support a small African village for decades.

Two weeks worth of a jury trial, and it’s over. The good news is . . . you won!

Now for the tough part. Your client was sued for breach of contract (and a slew of semi-related torts: fraud, intentional interference, unfair business practices, take your pick), and the contract had an attorneys' fees clause.

As the victor, you seek a recovery of your fees. Will you get them?

The Legal Framework

A. California Civil Code § 1717 – The Basics

California Civil Code § 1717 provides that the prevailing party in an action on a contract may recover its attorneys' fees. Subdivision (a) provides: “In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded ... to the prevailing party, then the party who is determined to be the party prevailing on the contract ... shall be entitled to reasonable attorney's fees in addition to other costs.”

Thus, when one party obtains a simple, unqualified victory by completely prevailing on or defeating all contract claims, and the contract contains a provision for attorney fees, the successful party is entitled to recover reasonable attorney fees incurred in prosecution or defense of those claims. Jackson v. Homeowners Association Monte Vista Estates-East (2001) 93 Cal.App.4th 773, 789. Where neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party – if either – “prevailed on the contract.” Scott Co. of California v. Blount, Inc., 20 Cal.4th 1103, 1109 (1999) (rehearing denied, 107 Cal.App.4th 197)

In your case, the court finds that your client was the “prevailing party” on the contract, and the contract contained an attorneys fees clause which provides that the “prevailing party” in any action “to enforce any rights arising out of or relating to this Agreement shall be entitled to recover its reasonable attorney’s fees.”

Ka-ching!

Your client is entitled to recover its attorneys’ fees on the breach of contract claim pursuant to Cal. Civ. Code § 1717.

Now, not to be greedy, but your client spent hundreds of thousands of dollars defending against the other, non-contract claims. And neither you nor your client wants to leave that money on table. So can you get it?

That depends on just how perspicacious the author of the agreement was when drafting it. You see, attorneys’ fees provisions are not all created equally. This is a point to remember when seeking a recovery under a fees clause – and the next time you’re drafting one.

B. Going for Gold -- Beyond Section 1717

1. “Arising out of . . .”

An attorneys’ fees provision that is applicable to “any dispute under the agreement,” may be sufficiently broad to permit a recovery of fees associated with the defense of claims for, among other things, fraud and breach of fiduciary duty. See, Gil v. Mansano, 121 Cal.App.4th 739, 743 (2004).

In Gil, two individuals purchased a third individual's share of a business venture. In connection with this transaction, all three entered into a written purchase agreement and a separate written release. Id. at 741. The release included an attorneys' fee provision which stated: “In the event action is brought to enforce the terms of this [Release], the prevailing party shall be paid his reasonable attorney [ ] fees and costs incurred therein.” Id. at 742. When the deal went sour, plaintiff sued one defendant for the tort of fraud. Id. The trial court entered summary judgment in favor of the defendant, and awarded him attorney fees pursuant to the fee provision in the release. Id.

On appeal, the court held that the fee provision at issue was too narrow to permit a recovery for fees incurred when defending against the tort of fraud. It held that the fees provision did not encompass the tort claim as it expressly applied only to actions “brought to enforce the terms” of the contract. Id. at 742. The court reasoned that “[i]n this case, the attorney fee provision in the release is very narrowly drawn. It required action brought to enforce the terms of the release. Plaintiff did not bring an action on the release; he sued in tort for fraud.” Id. at 745. However, the court noted that a broader fees provision might have allowed such a recovery, such as if it “had been made applicable to any action . . . involving the release” instead of “only where action was brought to enforce the release.” Id.

Unlike the fee provision in Gil which limited a recovery to an action brought to “enforce the terms of” the provision in your case contains the “arising out of or relating to” language that is given extremely broad interpretation under California law. See, e.g. Santisas v. Goodin, 17 Cal.4th 599, 607-8 (attorney fee clause for all claims “arising out of the execution of th[e] agreement or the sale” was broad enough to embrace both tort and breach of contract claims).

In Santisas , the defendants sought an award of fees pursuant to a fee provision in a real estate purchase agreement. That agreement provided: “‘In the event legal action is instituted by . . . any party to this agreement, or arising out of the execution of this agreement . . . the prevailing party shall be entitled to receive from the other party a reasonable attorney fee to be determined by the court. . . .’” Santisas v. Goodin, supra, 17 Cal.4th at p. 607 (emphasis added). The court held that this language “embraces all claims, both tort and breach of contract, in plaintiffs' complaint, because all are claims ‘arising out of the execution of th[e] agreement or the sale.” Id. at p. 608 (citing to Lerner v. Ward, 13 Cal.App.4th 155,160-61 (1993); emphasis added). The court reasoned that “[i]f a contractual attorney fee provision is phrased broadly enough, as this one is , it may support an award of attorney fees to the prevailing party in an action alleging both contract and tort claims” Id. (citing to Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4th 1338, 1341 (1992)).

Xuereb v. Marcus & Millichap, supra , also involved an agreement that provided for the recovery of fees if “this Agreement gives rise to a lawsuit or other legal proceeding . . . .” 3 Cal.App.4th at.1340. The Court of Appeal held that the “gives rise to” language “must be interpreted expansively, to encompass acts and omissions occurring in connection with the [agreement] and the entire transaction of which it was the written memorandum.” Id. at 1344. The court reasoned that defendants were entitled to recover fees incurred defending both contract and tort claims because those causes of action “must be said to have arisen from the [agreement] . . . they arose from the underlying transactional relationship between the parties.” Id. (citations omitted.)

In Lerner v. Ward, supra, the parties’ agreement provided that attorney fees were recoverable by “the prevailing party ‘[i]n any action or proceeding arising out of this agreement. . . . ’” Lerner, supra, 13 Cal.App.4th at 158-159. The prevailing defendants urged the court to construe the phrase “arising out of this agreement” broadly, thus permitting a recovery of fees incurred defending against plaintiff’s contract and tort claims. Id. at 160. Relying on Xuereb, the court agreed, holding that the “arising out of” language was entitled to broad interpretation. It ruled that the fees provision “was not limited merely to an action on the contract, but to any action or proceeding arising out of the agreement.” Id. As in Xuereb, the court reasoned that the “tort cause of action arose out of the written agreement.”

The “arising out of” language in your client’s agreement is nearly identical to the expansive language at issue in Santisas, Xuereb, and Lerner. Given this, you are cautiously optimistic that the same result should apply to your client, provided the non-contractual fees you seek can all be traced to your client’s alleged breach of contract.

Oh please, what are the chances of that?

OK, just to keep your blood pressure down, let’s assume that the president of the plaintiff corporation in your case has said in a sworn declaration that “[t]he duties and obligations contained in the Agreement, and the breach thereof, represent the essential events which give rise to the claims raised in this action.” Does that help? Yes, but it’s not the last word.

2. “Or Relating to . . .”

You are truly blessed. The drafter of the agreement in your case included the words “or relating to.” (SFX: Chorus of angles singing.) These three words, beautiful and simple, are almost as good as “Make my day.”

Blacks Law Dictionary defines the term “related” as "Standing in relation; connected; allied; akin." Blacks Law Dictionary 1288 (6th ed.1990).

A clause that includes “relating to” is broader than one that covers only claims “arising out” of a contract. See Mediterranean Enter., Inc. v. Ssangyong Corp., 708 F.2d 1458, 1464 (9th Cir.1983) (arbitration clauses using the phrase “arising out of or relating to” are intended to cover a much broader scope than clauses containing only the “arising out of” language) (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 398, 87 S.Ct. 1801, 18 L.Ed. 1270 (1967) (noting that “arising out of or relating to this agreement” had been labeled a “broad arbitration clause”)).

In Mediterranean, the parties entered into a written agreement to form a joint venture. The agreement contained an arbitration clause which provided: “Any disputes arising hereunder . . . shall be settled through binding arbitration . . . .” 708 F.2d at 1461. After the relationship soured, plaintiff filed suit alleging breach of contract and various torts claims, and moved to compel arbitration. The defendant opposed, arguing that the “arising hereunder” language was not designed to cover arbitration of any dispute between parties, but rather only those relating to interpretation and performance of contract itself. Id. at 1463.

The appellate court agreed, finding that “when an arbitration clause ‘refers to disputes or controversies ‘under’ or ‘arising out of’ the contract,’ [the] arbitration is restricted to ‘disputes and controversies relating to the interpretation of the contract and matters of performance.’” Id. at 1464 (citing In re Kinoshita & Co., 287 F.2d 951, 953 (2d Cir.1961)). Relying on Kinoshita, the court held that “the phrase ‘arising under’ is narrower in scope than the phrase ‘arising out of or relating to.’” Id. The court reasoned that there is a “significant” difference between broad arbitration clauses, which direct to arbitration disputes “arising out of or relating to [an] agreement,” and clauses limited to disputes or controversies “under” or “arising out of” the contract. Id. at 1464. The court found that the latter type of clause “is intended to cover a much narrower scope of disputes.” Id.

You’re into the home stretch. Here, your attorneys fees clause provides for a recovery of fees “arising out of or relating to” the contract on which you kicked butt. As in Mediterranean, this clause is much broader than one containing only the “arising out of” language. Even if the “arising out of” language was not expansive enough, the “arising out of or relating to ” language covers fees incurred defending against plaintiff’s tort and contract claims.

Thus, your fees provision, with its extremely broad “relating to” language permits your to recover fees incurred defending against all the claims asserted by plaintiff that are “connected; allied; akin” or stand in some relation to the contract.

Not bad. Thanks to the thoughtful drafting of the attorney who prepared the contract long, long ago in an office far, far away, you – and your client – now really have something to celebrate.

Closing Up For the Night

The take-away from all of this is that a broadly phrased contractual attorneys fees provision can support an award to the prevailing party in a tort action.

The court will interpret the intent and scope of the agreement by focusing on the usual and ordinary meaning of the language used. See Civ. Code, § 1644; see also Lloyd's Underwriters v. Craig & Rush, Inc., 26 Cal.App.4th 1194, 1197-1198 (1994). In other words, clearly state everything you intend to cover in the fees provision. Just because the fees provision says “arising out of” does not mean it also covers matters “relating to” the agreement, unless you say so.

If your intent is to permit a recovery of fees incurred in the entire lawsuit, make the fees provision broad enough to support such a recovery. Now that’s winning.

Jonathan Pink is co-Vice Chair of the Intellectual Property Group at Lewis Brisbois Bisgaard & Smith, LLP. He is resident in the firm’s Orange County office and can be reached at pink@lbbslaw.com or 714-668-5589

Making the Best of a Best Efforts Clause

2008-01-24T14:32:00.000-08:00

Divining the Meaning of "Best Efforts"

By Jonathan Pink

A "best efforts" clause must be one of the most misunderstood provisions to consistently worm its way into an agreement. To put such a claim to the empirical test, take a moment to define for yourself what is required by a party who promises to use best efforts to fulfill a contract obligation.

OK, have you given it your best effort?

A common assumption is that "best efforts" means exercising the highest level of duty required. In some cases, this isn't far off. For example, when the best efforts obligation is coupled with an exclusive agreement, the level of diligence is akin to a fiduciary obligation. (See Daniel J. Coplan, When Is "Best Efforts" Really "Best Efforts": An Analysis of the Obligation to Exploit in Entertainment Licensing Agreements, an Overview of How the Term "Best Efforts" Has Been Construed in Litigation, 31 Sw. U. L. Rev. 725 (2002).)

As you already know, a fiduciary obligation is the highest duty found in the law, comparable to what an attorney owes a client or a doctor owes a patient. (See Stanley v. Richmond, 35 Cal. App. 4th 1070 (1995).)

But what happens when a contract is not exclusive?

Consider this example: The year is 1992. Aside from being a really bad year in music, this is the year then-Federal Reserve Board Chairman Alan Greenspan testifies that the economy should pick up "within weeks." IBM introduces a digital tape–based computer data-storage business to handle vast storehouses of corporate information. And predictions of a reelection victory for the first President Bush are evaporating as unemployment rises.

With personal computers in their relative infancy, you enter into a services agreement to distribute software designed to allow companies to print their own checks and invoices with the push of a button—or maybe two. Your agreement with the software manufacturer does not contain an exclusivity requirement, but it does require you to use your "best efforts" to market and promote the manufacturer's software within a defined territory.

You sell the software for several years before advances in technology make the product less desirable. Customers demand the ability to email information and make their own revisions to the preprogrammed data contained on the software. And your competitors are offering products with these very features.

At this point, you beg the manufacturer to create a product with these add-ons, but to no avail. The manufacturer simply claims customers don't need those features, and maintains that it's your job to educate them about this.

In truth, the customers don't want educating. They want email. If your product doesn't contain it, they will buy from someone else. You don't want to violate the best efforts provision, but you also don't want to go out of business. You could use the software to print a bunch of checks to you from the manufacturer and then retire to the Bahamas. But that's another hypothetical.

Instead, you decide to split the difference: offering a competitor's product while continuing to promote the manufacturer's product to customers who will buy it. Unfortunately, as sales of the manufacturer's product plummet, the manufacturer decides to sue you. According to the manufacturer, you could not have used your best efforts if you were also selling a product made by its competitor.

INTERPRETING "BEST EFFORTS"

Whether you are in actual legal breach of your agreement depends on what is required of a party who promises to use its best efforts. Your answer might be: doing everything in your power to achieve the contract's objective.

Statutory requirements. Though your interpretation may sound reasonable, it is also true that every contract already contains an implied covenant of good faith and fair dealing. (See RESTATEMENT (SECOND) OF CONTRACTS § 205 (1981): "Every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement.") If best efforts means nothing more than this, why include the clause at all? Such obtuse redundancy does nothing to increase the contract's clarity.

Moreover, the presence of a best efforts clause can't convert a nonexclusive agreement into an exclusive one. Statutory controls also require that the court interpret the best efforts clause consistently with the general intent of the agreement. Thus, to avoid any repugnancy, one may not insert an exclusivity obligation into a best efforts clause if doing so would render repugnant the nonexclusive nature of the agreement. (See Cal. Civ. Code § 1652: "Repugnancy in a contract must be reconciled, if possible, by such an interpretation as will give some effect to the repugnant clauses, subordinate to the general intent and purpose of the whole contract.")

Contractual language.

The next lawyerly instinct you might have is to look at the letter of the agreement to discern exactly what you are required to do under the best efforts clause. Unfortunately for you, all it says is that you are required to use your best efforts to market and promote what is now an outdated product. It gives no indication about how those efforts will be measured. (Hey, you want "easy," then read People.)

Case law.

Grasping at straws, you look at the case law. (People is looking more attractive by the second.) This doesn't help much. Surfing through the dusty tomes now memorialized on the Internet, you find that the law discussing the level of diligence required by a party who promised to use its best efforts is almost as unsettled as you feel right about now.

Some courts have defined best efforts by comparing it to other recognized diligence standards. For example, in National Data Payment Systems, Inc. v. Meridian Bank, the court held: "The duty of best efforts 'has diligence as its essence' and is 'more exacting' than the usual contractual duty of good faith." (212 F.3d 849 at 854 (2000).)

And United Telecommunications, Inc. v. American Television & Communications Corp. (536 F.2d 1310 (1976)) held that, as between commercial parties, a best efforts clause is intended to impose a duty beyond a good faith, duly diligent performance of the contract. Hardly the clear-cut rule of law that tells you whether you are in breach of your agreement. (It would be a lot easier to become a celebrity and read about yourself in People.)

Nearing desperation in your research efforts, you reach out to find the unpublished decision of Krinsky v. Long Beach Wings (2002 Cal. App. Unpub. LEXIS 9026) and digest its ruling. In construing best efforts, the court in that case observed that "the plain meaning of the term denotes efforts more than usual or even merely reasonable."

Code provisions.

Throwing the case holdings aside, you read the Uniform Commercial Code. It requires "best efforts" by a seller in an agreement for exclusive dealing unless "otherwise agreed," and defines the elusive term no more precisely than a "more rigorous standard than 'good faith.' " (2 CORBIN ON CONTRACTS (REV. ED. 1995) § 6.5, p. 246 (discussing U.C.C. § 2-306, subdivision (2).)

Think these legal kingpins took a pass? Consider this: At least one court has held that determining whether a party has made sufficient efforts under a best efforts clause necessarily depends on "the factual circumstances" surrounding the agreement. (Martin v. Monumental Life Ins. Co., 240 F.3d 223 at 233 (2001).)

I don't know about you, but this tells me nothing. This court spent hours reviewing briefs and researching case law only to conclude that it couldn't define the term, but it knows it when it sees it.

At least when it considered the issue earlier, the court in Triple-A Baseball Club Associates v. Northwestern Baseball, Inc. came clean and held that best efforts "cannot be defined in terms of a fixed formula; it varies with the facts and the field of law involved." (832 F.2d 214 at 225 (1987).) Still, this translates to little more than "it depends."

Some courts have looked retrospectively and compared the efforts exerted in past dealings—when the efforts were not questioned—with the purportedly inadequate efforts giving rise to the current claim for breach of the best efforts obligation. (See Olympia Hotels Corp. v. Johnson Wax Dev. Corp., 908 F.2d 1363, 1373 (1990).) That does provide something of a measuring stick. But what do you do when the circumstances have changed? In the example about entering the software- distribution agreement with the manufacturer, recall that you sold the product pre-isoquantic shift—before email, before Google, and before YouTube. Is it really fair to compare your sales in that era to sales in a whole new world, when customers are demanding features that did not even exist when you entered into the agreement?

To put the issue in stark contrast, imagine that you entered the agreement in 1962, and that it required you to sell rotary phones. If the year is now 2008 and everyone but a few Luddites down the street have cell phones, can you really be faulted for throwing up your hands and offering those too—especially if they're the hands-free models?

This injection of reality highlights another benchmark courts have considered. The "standard industry practice" has served as a gauge for determining whether efforts are sufficiently "best" to defeat a claim for breach. (See Zilg v. Prentice-Hall, 717 F.2d 671, 681 (1983), cert denied, 466 U.S. 938 (1983), finding that the defendant's efforts were "perfectly adequate," although the defendant did not follow through as well as he might have.) But this assumes that industry standards can be identified.

PRACTICAL POINTERS

Before you chuck this article altogether and pick up one that gives you some information that's really useful—Is Brad leaving Angelina and getting back together with Jen? Is Angelina dumping Brad and getting together with Jen?—here's the point: Because of the uncertainty surrounding the legal effect of a best efforts promise, the best approach appears to be treating these clauses as unenforceable if they lack any objectively measurable standards. (See Pinnacle Books, Inc. v. Harlequin Enter. Ltd., 519 F. Supp. 118, 12122 (1981): absent an objective criteria by which to measure performance, "best efforts" clauses are so vague as to be unenforceable; Jillcy Film Enter., Inc. v. Home Box Office, Inc., 593 F. Supp. 515, 520–21 (1984) (accord).)

In Pinnacle Books, an author granted his publisher an option to renew the parties' contract for a series of books. The agreement provided, however, that if after extending their best efforts, the parties were unable to reach an agreement, the author would be free to offer his rights in these books to any other publisher. The court held that this best efforts clause was unenforceable because its terms were too vague.

Specifically, it held: " 'Best efforts' or similar clauses, like any other contractual agreement, must set forth in definite and certain terms every material element of the contemplated bargain." And also: "Essential to the enforcement of a 'best efforts' clause is a clear set of guidelines against which the parties' 'best efforts' may be measured." (519 F. Supp. at 121.)

Furthering this end, the court noted: "Unless the parties delineate in the contract objective standards by which their efforts are to be measured, the very nature of contract negotiations renders it impossible to determine whether the parties have used their 'best' efforts. ... Thus, absent express standards, a court cannot decide that one party's offer does not constitute its best efforts; nor can it say that the other party's refusal to accept certain terms does not constitute its best efforts." (519 F. Supp. at 122.)

This isn't hard: All it means is that if the parties are intent on including a best efforts clause, they must clearly define for themselves within the body of the agreement precisely what this means and how it will be measured. They need to set guidelines a court can use to determine what was required by the promisor and whether those requirements were met.

In the case of your agreement to sell software, for example, the contract might have included a requirement that you offer those products, explain their features, and wait for the customer to expressly ask for another product before you offer one. It might require that you offer the manufacturer's product to 100 prospective customers per month, or at least to as many as you offer any competitive product. As long as the agreement contains some objective standards, it would allow for a clear determination of breach.

But without any measurable standards, the parties and the trier of fact are left to wonder what was meant by the term best efforts. Standing alone, its meaning is nebulous and its enforceability tenuous. This is risky business: It subjects one party to a claim for breach for having failed to perform to a level it never intended—and would never have agreed to—and subjects the other party to losing the benefit of a promise for which it thought it had bargained.

When it comes to contractual provisions, no one benefits by being left to guess at what was meant by the words on the page. A best efforts clause must expressly state what is meant by this term—and most important, how to measure compliance.

Building such clarity into a contract requires the use of your prefrontal cortex. You must carefully consider how the contract language will play out in real life and whether it is sufficiently clear to allow a third party to decipher precisely what is required. Does the contract set forth milestones or benchmarks by which compliance with the best efforts provision will be measured? Does it take into account potential future changes in the marketplace or in technology that may not be foreseen at the time of contracting?

Your agreement may also benefit from a provision that allows for a periodic reassessment of how best efforts is defined and measured, especially if it relates to software or advanced technology. A clearly understandable and objectively measurable best efforts clause will likely make any litigation that ensues less cumbersome—and thus less expensive. It might even keep the parties out of court, which will save them a bundle.

Now, if you have understood all of this, you're -ready to tackle People or even the Weekly World News. Oh wait, that closed down. Gee, don't you wonder whether the publisher really used its best efforts to keep it going?

Jonathan Pink is co-vice chair of the Intellectual Property Group at Lewis Brisbois Bisgaard & Smith, and is located in the firm's Orange County office.

Flooding the Engine

2008-01-24T14:28:00.000-08:00

Flooding the Engine: Where Search Engine Optimization Crosses the Line Into Illegality
by Jonathan Pink

Building a successful business has never been more complicated. Customers must be able to locate you using any major internet search engine. Because 90 percent of search users never go beyond the second page of results, unless your website appears near the top, you might as well go fishing.

Increasing your search engine ranking, or "search engine optimization" can be fraught with legal pitfalls. Here are a few, and tips on how to avoid them:

Trademark Infringement: Keywords and meta tags (hidden code) are the most common method of attracting search engines and increasing ranking. Using keywords and meta tags that accurately describe a site’s content is fine, but using a competitor’s trademark can get you in trouble. 15 U.S.C. § 1125(a) (trademark infringement requires the commercial use of the same or similar mark by another with respect to goods or services that is likely to cause confusion with respect to trademark owner's customers).

In Brookfield Communications, Inc. v. West Coast Entertainment Corp. (9th Cir. 1999) 174 F.3d 1036, the court ruled that inclusion of a competitor’s trademark in metadata constituted trademark infringement because it diverted traffic to the defendant’s site. Analogizing to a roadside billboard that misdirects customers, the court said plaintiff’s mark improperly caused initial interest in defendant’s site – thus infringement – even though users soon realized their mistake. Id. at 1061-66.

One key to avoiding infringement is the "fair use" doctrine. It permits use of another’s trademark to identify the plaintiff’s goods or services provided there is no likelihood of confusion. In Playboy v. Welles, 279 F.3d 796 (9th Cir. 2002), Playboy sued its former top bunny, Terri Welles, for using the words "Playboy" and "Playmate of the Year" in her website’s metatags. Welles won, arguing that use of these terms was necessary to describe her as "Playboy Playmate of the Year 1981." But c.f. Australian Gold, Inc. v. Hatfield (D.C. No. 02-CV-143-C) (10th Cir. Feb.7, 2006) (finding infringement where defendants’ metadata contained plaintiff’s trademark even after defendant stopped selling plaintiff’s product).

Another way to avoid infringement appears to be purchasing keywords – including a competitor’s trademark – directly from the search engines. This way, when a user searches for that keyword, an advertisement pops up with a link to your site, or a "sponsored link" appears that boosts your ranking to equal your competitor’s. See Playboy, Inc. v. Netscape Enterprises Communications Corp. (9th Cir. 2004) 354 F.3d 1020; Government Employees Insurance Co. (Geico) v. Google, Inc. (E.D. Pa 2004) 330 F.Supp.2d 700; see also 1-800CONTACTS, Inc. v. WhenU.Com., Inc., 414 F.3d 400 (2d Cir 2005); but c.f. Australian Gold, supra (defendant’s purchasing of plaintiff’s mark as a keyword contributed to the finding of infringement).

Geico involved Google’s "AdWords" program, which sells the ability to appear as a "sponsored link" when a search is run using a competitor's mark. The court found insufficient evidence that use of "Geico" as a keyword was likely to cause consumer confusion, and thus found no infringement. However, the court said that if a sponsored link displayed plaintiff’s mark, it would violate the trademark law. Google lost a similar case in France several weeks later, but then that's the French: eating frogs and snails and thinking Jerry Lewis is a genius.

In 1-800Contacts, the Second Circuit ruled that software that provided a competitor’s pop-up advertisements when accessing plaintiff's web site was not infringement. The court reasoned that inclusion of plaintiff’s marks in a directory of terms that triggered the pop-ups was not a "use" in commerce of those marks as defined under trademark law.

While this line of cases is still developing, one thing is clear: the surest way to increase your ranking is to make like a politician and buy your way to the top.

Copyright Infringement: Stuffing your site with high quality, original content is an excellent way to increase your search engine ranking. Stuffing your site with content poached from another site will only lead to trouble. Just because it’s on the Web, doesn’t mean it’s free. Nothing about the Web strips work of its copyright protection. See 17 USC §102(a) (copyright protection applies to literary, artistic, musical and architectural works exhibiting a modicum of originality and fixed in any tangible medium). Translation: you can get sued for misappropriating it. 17 USC §501(a).

Unfair Competition: California Business and Professions Code §17200 and 15 U.S.C. §1125(a) broadly protect against unfair competition. In addition to the conduct discussed above, these statues can apply to other techniques professional Search Engine Optimizers regard as "unethical," i.e. inundating blogs and discussion boards with return hyperlinks. While links are important – they are one factor search engines look at when determining rank – a better approach is obtain them legitimately by becoming popular with your peers.

The More Things Change, the More They Stay the Same: Building a business on the web – and getting it seen – ultimately comes down to offering the highest quality content, useful information, helpful resources and excellent service. After all, nothing increases ranking like web traffic itself. Just like the old days, it’s all about being better than the next person. Unless, of course, you’d rather be fishing.

Jonathan Pink (pink@lbbslaw.com) is a partner in the Intellectual Property and Technology Group at Lewis Brisbois Bisgaard & Smith, LPP.

Copyright Myths Debunked

2008-01-24T14:21:00.000-08:00

Copyright Myths Debunked
By Jonathan Pink

Over lunch the other day, a coworker asked whether it was true that there was no need to register work with the Copyright Office as long as you put it into an envelope and mail it to yourself. Gazing past the rigatoni stuck in his teeth and focusing on the question, I realized that I had heard it before. Many times before. "So what's the deal?" he asked, "Is it true or not?"
The answer is ... buried in the following multiple-choice test.

Myth 1:

Copyright protection comes from placing a "©" on your work.

a. Absolutely true. Why else would that little c be in the circle?

b. Sometimes true, depending on things I'm not really sure about.

c. Not true.

The answer is c. For works created after March 1, 1989, copyright protection attaches immediately and automatically at the moment of creation. You can even try it at home: take a pen, draw a quick sketch. Done? Great. Copyright protection has already attached. And it does not require you to pen in that familiar © symbol. 17 USC §401(a); 17 USC §102(a).
For works created before March 1989, the © was required for protection-although in the labyrinth of copyright laws, some allowance was made for works published after December 31, 1977 if the would-be copyright owner took certain measures to cure the error of omitting the mark.

Myth 2:

Copyright protection requires registering your work with the Copyright Office in Washington, D.C.

a. This is a trick question. It's true that copyright protection requires registering your work, but you don't have to do it at the Washington office. You can do it at one of the many affiliated offices through-out the country. In fact, I think I saw one just the other day.

b. Not true. I created it, it's mine, and there's nothing more I have to do.

c. Of course. Why else would your tax dollars go to support a federal copyright office?

The answer is b. Again, copyright protection attaches immediately. If you need more proof, look at that sketch you made and remember that it has copyright protection already. All that is required is an original work of authorship-be it literary, artistic, musical, or even a computer program-affixed in any tangible medium of expression. 17 USC §102(a).

"Tangible medium of expression" means that your work is readable or perceivable either by use of a machine or with the naked eye. 17 USC §102(a). Again, look at your sketch. If it's on a scrap of paper or in the corner of this article, it's affixed to a tangible medium of expression because it's still there. If it isn't where you drew it, then it probably wasn't affixed to a tangible medium of expression.

This brings up another question. Why would anyone bother registering a work at all? Registration is often a good idea because it is usually a prerequisite to bringing an action for copyright infringement. 17 USC §411(a). It also helps to establish the work's date of creation and is required if you want to recover statutory damages or attorneys fees. 17 USC §412. Oh, and it assures that your work will end up in the Library of Congress, which is cool.

Myth 3:

Placing the work in an envelope and mailing it to yourself has the same effect as registering it with the Copyright Office.

a. No. If it did, why waste the ink to print this article?

b. Of course it does. If it didn't, why waste the ink to print this article?

c. Yes. And if enough authors send in their tasteless dreck, the postal service may not have to raise rates again anytime soon.

The answer is a. Though it's always nice to receive mail, sending the work to yourself does nothing more than establish the date that the envelope-and not necessarily its contents-was mailed. If you think it's important to register your work, pay the $30 and register it with the Copyright Office. If you simply want to receive mail, send yourself a postcard. Or lie on your Form 1040.

Myth 4:

If it's on the Web, it's free for the taking.

a. No. Stealing is stealing.

b. Sure, why not?

c. This is true, but only if I use a 28KB modem, and the copyright expires before I finish downloading it.

The answer is a. Unless the work falls under a generally recognized exception to the copyright law, if it's on the Web, copyright protection attaches, and you can get hit with an infringement lawsuit for misappropriating it. See 17 USC §501(a). Nothing about the Web strips otherwise protectable work of its copyright protection.

Myth 5:

Copying just a little bit does not constitute copyright infringement.

a. Maybe.

b. Maybe.

c. Maybe.

The answer is all of the above. Though the "fair use" doctrine allows for some limited copying of a small portion of some works-for example, quotes for use in educational or scholarly works, criticism, parody, and news reporting-there is no bright-line rule as to how much is too much.

The law weighs into the mix the purpose of the use, the nature of the work, the amount used as it relates to the whole, and the effect of the use on the value of the copyrighted work. 17 USC §107. But, generally, taking any part of a copyrighted work is subject to a claim for copyright infringement. And under this same rule, a person also cannot escape liability for copyright infringement simply by making a few minor changes to copyrighted material. 17 USC §501(a).

That means that if you take your kid's Darth Vader action figure, give it Barbie-like hair, and dress it in platform shoes, you're going to get hit with an infringement action when you try selling it at Toys-R-Us as Ella Vader. You also risk getting hit with a morals charge.

Myth 6:

Company names and slogans, such as Microsoft, Coppertone, "Just Do It," and "Things Go Better With Coke" are protectable under the copyright law.

a. Sure, they all originated from companies that are crawling with copyright lawyers.

b. No, or it wouldn't be a copyright myth.

c. What things go better with Coke?

The answer is b. Although slogans, titles, names, and short words and phrases may be protectable under trademark law, they are not entitled to copyright protection. 37 CFR §202.1. Also not protected by copyright are ideas -- other than the written expression of those ideas -- such as recipes or formulas, absent their incorporation into some larger work or written expression. 37 CFR §202.1; 17 USC §102(b). That means that if someone stole your recipe for chocolate chip cookies, or if you had the idea for The Firm before John Grisham did, you're out of luck. But hey, you've still got your sketch.

Myth 7:

Once I have copyright protection, it lasts forever.

a. Nothing lasts forever.

b. Define "forever."

c. Yes, this much I know.

The answer is a. Copyright protection does not last forever-although it might as well, given that it will outlast you. Under the current law, a copyright lasts for the life of the creator, plus an additional 70 years if the work was created after January 1, 1978, and 95 years from the date the copyright was secured for works created and published before 1978. 17 USC §§302(a) and 304(a).

There is, however, an exception to this rule. The copyright for anonymous works, pseudonymous works, and works made for hire is 95 years from the date of first publication, or 120 years from the date of creation, whichever comes first. 17 USC §302. The U.S. Supreme Court recently ruled that Congress may extend the copyright term, as it has done from time to time since the act's inception. See Eldred v. Ashcroft (2002) 122 S. Ct. 1062.

Eldred involved several companies that made money by exploiting material that, generally because of its age, had lost its copyright protection. The plaintiffs contended that Congress exceeded its authority by expanding copyright protection of existing works by about 20 years. Specifically, plaintiffs argued that article 1, section 8, clause 8 of the U.S. Constitution provided for a limited duration of copyright protection and that Congress had avoided that mandate by repeatedly extending that duration.

The Supreme Court upheld the 1998 Copyright Term Extension Act, authored by the late singer/comedian/congressman Sonny Bono, reasoning that the extension, even as to existing works, was still of a "limited" duration. The Court further reasoned that Congress was well within its right to determine the need for such an extension based on new technologies that gave existing material a greater shelf life. It also supported getting U.S. copyright law in sync with the copyright laws of the European Union. It is rumored that upon learning of this ruling Michael Eisner turned to Mickey Mouse, kissed the rodent on the lips, and said: "I got you, babe."

Myth 8:

When I acquire a copyrighted work, I also acquire the copyright to it.

a. How else would museum shops stay in business?

b. Uh, isn't this why Napster got in trouble?

c. This better be true; otherwise, I just severely overpaid for "A Bug's Life."

The answer is b. Acquiring a copyrighted work does not mean that you've acquired the copyright as well. 17 USC §202. It is possible to acquire the copyright to your favorite works -- provided they are entitled to copyright protection-but this requires a transfer from the copyright holder (17 USC §201) and must be done in writing (17 USC §204). Specifically, part or all of the exclusive bundle of rights held by a copyright owner-importantly, to reproduce, perform, or prepare derivative works-may be transferred during life or at death. 17 USC §106; 17 USC §§201 (d)(1),(2). This brings the more astute back to Napster -- the free, online, song-swapping service that got hit with an infringement action when it failed to prevent its users from illegally swapping MP3 files.

Practically speaking, this means that just because you own every collection of Calvin & Hobbs ever published, that does not mean that you can create window decals of those characters and sell them to motorists across the nation. You may even own the "Essential Calvin & Hobbs," but you don't own the right to reproduce the images it contains. It also means that if you bought one of those decals and slapped it onto your SUV, you should go outside right now -- yes, now -- and scrape it off with a butter knife. Don't worry; we'll wait.

Myth 9:

Sure, you can copyright a book, a movie, or a song, but there is no way you can copyright a house.

a. This must be true. Just drive through Orange County.

b. Not so fast. I'm from Orange County, and the houses are not all alike; those shades of beige are distinctly different.

c. This is false; you can copyright a building, but only if it was built less than a dozen years ago.

The answer is c. Architectural works are entitled to copyright protection if they were created after December 1, 1990, or embodied in unpublished plans or drawings created before that time, even though they were not actually constructed. See 17 USC §102.

This is good to know if you represent architects or developers. If you represent the developer, advise your client to acquire the copyright in any architectural plans he or she commissions. If you represent the architect, advise negotiating hard when it comes to determining the price of that copyright. Remember, working together, we can rid this state of unsightly farmland, pristine hillsides, and bucolic open spaces.

Myth 10:

Once a copyrighted work goes into the public domain, I can reproduce it and claim the copyright for myself.

a. Uh -- no.

b. Sure, but you need permission from the former owner first.

c. Yes, as long as the copyright had been held by the federal government.

The answer is a. Once a copyright expires and the work goes into the public domain, it's free for the taking. Public domain is legalese for not copyrighted. This typically refers to works that never acquired copyright protection in the first place- because they failed to include the (c) during the years it was required or because the original copyright has simply expired, for example, any work that was created before 1923. To the extent you build on work that is in the public domain to create a derivative work, the material you add -- as distinguished from the pre-existing material -- is protected. That does not, however, affect the ability to copyright that portion of the work that entered the public domain; that remains available for anyone else to use. 17 USC §103(b).

By the way, works created by the U.S. government are not entitled to copyright protection, although nothing prohibits the federal government from holding copyrights transferred to it by assignment, bequest, or otherwise. 17 USC §105.

Myth 11:

The concept of "moral rights" does not exist under U.S. copyright law.

a. Oh, please. Is this going to get preachy?

b. No. Like snobby maître d's, stinky cheese, and sautéed garden invertebrates, it's a French thing.

c. Well, maybe it's not called "moral rights," but the same basic idea exists.

The answer is c. U.S. copyright law grants certain visual artists the right to, among other things, prevent the "intentional distortion, mutilation, or other modification of the work which would be prejudicial to" the artist's honor or reputation. 17 USC §106A[(a)(3)(A)]. For purposes of this rule, the artistic work must be a painting, drawing, print, sculpture, or photograph in an edition of 200 or fewer signed, consecutively numbered copies. 17 USC §101. In other words, no one can mess with your sketch.

Jonathan Pink (pink@lbbslaw.com) heads the Intellectual Property Practice Group in the Orange County office of Lewis Brisbois Bisgaard & Smith, LLP.
This article first appeared in California Lawyer magazine.