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Copyright in Context Raymond T. Nimmer Dean and Lenard Childs Professor of Law, University of Houston Law Center

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1 Copyright in Context Raymond T. Nimmer Dean and Lenard Childs Professor of Law, University of Houston Law Center

2 Elements of the context Digital works – what changes and uses are permitted without a license? Copyright and contract – including mass contract – what scope of contract control is appropriate Copyright and the grand rights debate –New technologies alter ability of traditional incentives to function –Perspective: effective protection Change in technology requires change in protection Society interest in promoting innovation via incentives –Perspective: innovation stifled by expanding or retained right Narrowing rights or allowing technology to do so Markets do not work No rights expansion – renewal act, boottlegging act

3 Copyright structure Works of authorship – defined by expression in two ways –Must contain in order to be copyrighted –Other parties acts must relate to in order to infringe –Must be separable from process and idea - Lexmark Defined exclusive rights – reproduce, distribute, display, perform, derivative Infringe –direct (basically no fault but require conduct –Indirect – contribute induce, control….. Defenses –Fair use –First sale status – limited exemption

4 Contract and Copyright: The Basic Relationship Property and Contract interact, but not in a straight line Contract sometimes defines rights or exemptions Ross, Brovins & Oehmke case –Forms database – court holds: database items is not protected for much since pure forms and dictated by others Selection arrangement potentially protected Publisher made changes in selection etc. Publisher made changes in selection etc. –But contract remedy possible Issue – how far does non-rights extend? –Consideration present –Modern antitrust case law –Compare C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P., 443 F.Supp.2d 1077 (ED Mo. 2007)

5 Points of intersection Krause v. Titleserv, Inc. –Not work for hire – independent contractor –No contractual transfer –Copyright premise – argue I as owner own right to modify –Compare: section 117: modification essential to use

6 When is someone an owner of a copy? MAI case DSC case Rights against 3d parties: ATM case Does delivery of tangible item constitute a first sale or exhaustion despite license limits Exhaustion inconsistent with limiting terms –LG Electronics: Although Intel was free to sell its microprocessors those sales were conditional… The "exhaustion doctrine... does not apply to an expressly conditional sale or license," –Monsanto Co. v McFarling, 302 F.3d 1291 (Fed. Cir. 2002) First sale not impact contract – Daimler case

7 Computerization Entering and downloading is copying Who controls what rights –Database of works – split ownership –Compilation owner and revision right –Contribution owner an all other rights –Except, of course by contract – Faulkner case Greenberg v. National Geographic Soc., 2007 WL 1693056 (11th Cir. 2007) electronic collection of past magazine issues was privileged revision of the original works; –Electronic collection preserved the original context of magazines, and thus was privileged revision. –Introductory sequence was not privileged under Copyright Act provision governing collective works; photograph used out of the context of the original work in which it was contained. –Overall work still a revision – concept allows adding stuff

8 Unused copies and fair use Wall Data case –License limited number of copies –Loads copies, but locks access –Fair use? Thoroughbred Software Intern., Inc. v. Dice Corp., 488 F.3d 352 (6th Cir. 2007)

9 Use of Technology Restraints DMCA § 1201: Illegal to circumvent or to traffic in technology designed to circumvent technological controls. Davidson & Assoc. v. Jung (requiring code to use online version of game was wrongly circumvented) Static Control v. Lexmark, (No DMCA violation; control system not qualify under DMCA because code could be access through memory dump without circumventing restrictions) Storage Technology Corp. v. Custom Hardware –no DMCA violation for circumventing code that barred access to maintenance code since access did not facilitate or involve infringement; –although use of code not licensed, code was not copied as a result of access (it was already in memory)

10 Inducement as a risk Contribute w reason to know Vicarious – control and financial gain MGM v. Grokster –Established action for inducing infringement. –Questions about its scope. Liability for inducing has been in Patent Act since 1952 ("Whoever actively induces infringement of a patent shall be liable as an infringer." While cases in patent law provide some guidance, the circumstances involving inducing patent infringement are different in many ways. Grokster 2: company did induce; no required proof of contribute to a specific infringement

11 Perfect 10, Inc. v. Visa Intern. Service Ass'n, 2007 WL 1892885 (9th Cir. 2007) Payment processing by credit card companies did not constitute material contribution to infringement by Internet websites Since the companies did not have a direct connection to infringement and infringement could have occurred without using the payment system. Although the payment systems made it easier for infringement to be profitable and had the effect of increasing infringement, the services provided did not help locate and were not used to distribute infringing images. Control terms of contract not sufficient to establish vicarious liability

12 Displays and copyright A provides link to B, which has not authorized it Copy images to make visual link? Live Nation v. Davis –Defendant linked to live Internet webcasts of motor sports without permission. –Court: this violated copyright display right.

13 Perfect 10 v. Amazon –Direct or contributory infringement The thumbnails made by Defendants The displays caused by the link –Linking to full size images did not constitute a display of them by the search engine Display was by the originating site –Creation and display of thumbnail images was unauthorized display of the copied images, but not a distribution This use was fair use. –Contributory where infringement done by other site No control –But: we hold that a computer system operator can be held contributorily liable if it has actual knowledge that specific infringing material is available using its system, and can take simple measures to prevent further damage to copyrighted works, yet continues to provide access to infringing works.

14 Fair use Display as fair use Transformative? –Images modified –Images used in different way that large images –But – Perfect 10 did do thumbnails No market impact – the relevant circle –Prospective market or only actual existing markets –Defendants use as a market in itself? Weigh on and another

15 No reverse engineering Finally – the role of contract in reference to fair use Lets use reverse engineering as a measure Some argue: Preemption – contracts that exclude beyond terms of IP law are inconsistent with federal law Some argue: misuse by wrongly extending scope of copyright Some argue: it is just a contract –Baystates case –Davidson case –Etc.

16 Questions?

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