1. COPYRIGHT LAW FALL 2006 Columbus School of Law The Catholic University of America Prof. Fischer November 29, 2006

2. Fair Use Factors (1) purpose and character of the use (commercial or non-commercial eg. educational?) (2) nature of copyrighted work (fact or fiction?) (3) amount and substantiality of amount used (4) effect on the market for the copyrighted work

3. The Cat in the Hat case Why did the court rule against the parody defense for the book on the O.J. Simpson Trial?

4. Annie Leibovitz Naked Gun Case

5. Why did Leibovitz sue over the “Naked Gun” ads. Did fair use apply? Why or why not? Is this consistent with the Dr. Seuss case?

6. Gone With the Wind case Suntrust Bank v.Houghton Mifflin (11 th Cir. 2001) According to the 11 th Circuit, should the The Wind Done Gone be treated as a fair use parody even though it was not comic? Why or why not? Do you agree?

7. Fair Use and unpublished works How does the fact that a work is unpublished affect fair use? (See Harper, CB p. 754, Sundeman (4 th Cir. 1998) (CB p. 760)

8. Additional Fair Use Considerations Do courts ever consider any additional considerations beyond the four s. 107 factors?

9. Additional Fair Use Considerations Amount and substantiality in comparison to D’s work Whether background copying is “substantial” (e.g. Ringgold, Sandoval) Equitable considerations: D’s conduct/bad faith – see NXIVM Corp v. Ross (CB p. 770) P’s conduct e.g. Rosemont (CB p. 775)

10. Fair Use Generally: To Consider Are all these fair use cases that we read in the last class just hopelessly inconsistent? How does one advise a client on the issue of fair use? How, if at all, should the doctrine be changed?

11. Fair Use and New Technologies Sony Corp. v. Universal City Studios (1984) CB p. 826 5-4 decision - Court said that “the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate noninfringnig purposes” Was the unauthorized home taping of TV programs fair use?

12. Secondary Liability 2 kinds (court in Sony confuses them): 1.Contributory infringement 2.Vicarious infringement See e.g. Fonavisa v. Cherry Auction, Inc., (9 th Cir. 1996 – CB p. 848)

13. CONTRIBUTORY INFRINGEMENT “One who with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another.” Gershwin case cited in Cherry Auction (e.g. operators of swap meet in Cherry Auctin providing support for infringing activities, namely selling conterfeit recordings)

14. VICARIOUS INFRINGEMENT Outgrowth of respondeat superior doctrine “if he has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities.” Gershwin case cited in Cherry Auction

15. Sony (CB p. 853) Was manufacture and sale of Betamax videotape recorders secondary infringement? Court apparently confuses contributory and vicarious infringement. Follows patent law article of commerce doctrine

16. Sony Article of Commerce Doctrine Concern about copyright owner controlling sale of article of commerce (overuse of monopoly rights) “Sale of copying equipment, like the sale of other aricles of commerce, does not constitute copyright infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.” (which VTR was b/c private noncommercial home time shifting was fair use)

17. A & M Records v. Abdallallah (CD Cal. 1996) CB p. 859 Sony distinguished. Time-loaded cassettes (with tape sufficeint to correspond to time limits imposed by customer) were not capable of substantially noninfringing use Sony doctrine doesn’t extend to items specifically designed for counterfeit use Even if it did, legitimate purposes for which cassettes could be used were insubstantial

18. Napster case (9 th Cir. 2001) Upheld district court decision that Napster was likely to be found liable as a contributory and vicarious infringer Napster argued unsuccessfully that Sony applied.

19. Napster Court did find that district court erred in finding Napster didn’t prove its system as capable of commercially significant noninfringing uses But here there was actual knowledge by Napster that specific infringing material was available using its system and it failed to block access to the system by suppliers of infringing material or remove the material

20. Napster: Vicarious Infringement Ninth Circuit also found that Pls would likely succeeed in establishing Napster (1) had a direct financial interest in infringing activity (2) Napster had the right and ability to supervise its users content

21. Grokster Decentralized compared to Napster’s centralized indexing system (on central server) Supreme Court found this case an easy one under Sony.

22. Grokster D Ct had found that Grokster was not secondarily liable for distribution of software Court of Appeals affirmed (no contributory infirngement because Sony required actual knowledge OR that product not capable of substantial noninfringing uses. (CB p. 871) Also no vicarious infringement (D did not have the ability to supervise)

23. Supreme Court Court unanimously concluded that Grokster could be liable for inducing copyright infringement Disagreement over whether case is different from Sony and whether Sony should be modified

24. Souter: Opinion of Court “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infrinegment, is liable for the resulting acts of infringement by thiord parties Ninth Circuit read Sony too broadly Doesn’t answer whether Sony protects Grokster in the absence of active inducement

25. Gnsburg (joined by Kennedy and Rehnquist) Case differs markedly from Sony based on insufficient evidence of noninfringing uses. Suggests Grokster would be liable and not protected by Sony even absent evidence of inducement

26. Breyer concurrence (joined by Stevens and O’Connor) “a strong demonstrated need for modifying Sony... Has not yet been shown” Suggests Grokster would be protected by Sony without evidence of inducement

27. Grokster aftermath Grokster announced in November 2005 that it would no longer offer P2P service Streamcast continued to fight on remand. U.S. District Court for C.D. Cal. Granted summary judgment against Streamcast for copyright infringement in September 2006. Streamcast will appeal.

28. Is Grokster a Good Decision as a Matter of Policy?

29. Is Grokster a Good Decision? Some argue it could restrict important innovation if read broadly by lower courts and even if read narrowly could spur many copyright suits against technology companies Others think Grokster will lead to less filesharing litigation and more licensed services like iTunes.

30. Perfect10 case (p. 821) Case involves whether search engine creation/display of thumbnail images of adult photographs on P’s website is fair use District Court in 2006 found they were not fair use (1, 2 and 4 th factors weighed in favor of P10, 3d slightly in favor of Google) On appeal to Ninth Circuit – some argue that Hollywood is trying to get here what it couldn’t in Grokster: a veto over technological innovation

31. Grokster: A good decision?

32. Copyright: History Increased rights, duration, subject matter Reduced formalities

33. Copyright: Future Will be an exciting one and you will be part of it! Best of luck on the exam and happy holidays!

34. Sega v. Accolade: Intermediate Copying Accolade is a game developer that made and markets game software that was compatible with Sega’s Genesis console, without being a licensee of Sega. How did Accolade make sure its games were compatible with Sega’s console?

35. Sega v. Accolade: Intermediate Copying 1. Reverse engineered Sega’s video game programs - used decompilation to dissasemble object code to source code and created a manual that included description of interface requirements but not code. 2. Relying on information in the manual, Accolade created games for the Genesis.

36. Is Intermediate Copying Infringement? Did the 9th Circuit in Sega find that intermediate copying constituted a copyright infringement where copies were not made available to the public but the fruits of the copying were?

37. Is Intermediate Copying Infringement? Did the 9th Circuit in Sega find that intermediate copying constituted copyright infringement where copies were not made available to the public but the fruits of the copying were? Intermediate copying during the reverse engineering process would infringe even if the end product did not.

38. Is Reverse Engineering Fair Use Did the 9th Circuit in Sega find that reverse engineering was a fair use? How did the 9th Circuit apply the fair use factors?

39. Is Reverse Engineering Fair Use Did the 9th Circuit in Sega find that reverse engineering was a fair use? Yes, “where disassembly provides the only means of access to those elements of the code that are not protected by copyright and the copier has a legitimate reason for seeking such access”. Found 1st, 2d and 4th fair use factors to support Accolade. Particular concern about unfair monopolization fo market.

40. Sony v. Connectix (9th Cir. 2000) Issue\ here: entrepreneur reverse-engineers a console’s operating system to create a rival console that plays Sony games. In Accolade, the entrepreneur reverse engineered the operating system to sell compatible computer games. Thus the reverse engineering resulted in a product that did not compete with the reverse engineered work, whereas in Connectix, it did.

41. Sony v. Connectix (9th Cir. 2000) Issue here: entrepreneur reverse-engineers a console’s operating system to create a rival console - does that matter when considering first and fourth fair use factors?

42. Sony v. Connectix (9th Cir. 2000) Issue here: entrepreneur reverse-engineers a console’s operating system to create a rival console - does that matter when considering first and fourth fair use factors? No - both factors support fair use. Connectix’s Virtual Game Station is transformative and does not just supplant the Sony PlayStation; Connectix is a legitimate competitor.

43. Sony v. Bleem (9th Cir. 2000) What did Bleem do that Sony termed an infringement? Did the 9th Circuit find that Bleem’s use of Sony’s copyrighted work was a fair use? Why or why not?

44. Kelly v. Arriba Was Defendant's display on a visual search engine of lower resolution "thumbnails" of copyrighted images appearing elsewhere on the Internet, without the copyright owners' permission, a fair use? What about the display of the full image? Does Google’s visual search engine infringe copyrights?

45. Kelly v. Arriba Defendant's display on a visual search engine of lower resolution "thumbnails" of copyrighted images appearing elsewhere on the Internet, without the copyright owners' permission, is a protected fair use of those images under the Copyright Act. The court further holds that defendant's display of the full copyrighted image as part of its search engine results, either via inline linking or framing, infringes the copyright owner's right to publicly display the work. Does Google’s visual search engine infringe copyrights?

46. REMEDIES What remedies are available for civil copyright infringement?

47. REMEDIES Section 504 A. DAMAGES (either actual damages and profit OR statutory damages) s. 504 B. INJUNCTIVE RELIEF (s. 502) C. SEIZURE/IMPOUNDMENT (section 503) D. COSTS/ATTORNEYS FEES (s. 505) (PROPERTY TYPE OF REMEDIES)

48. INJUNCTIONS More routine than in many other civil cases Preliminary injunctive relief is generally awarded if P establishes p.f. case on validity and infringement (irreparable injury is presumed) Permanent injunction generally awarded if copyright validity and infringement are found

49. OTHER NONMONETARY RELIEF Impounding and destruction of infringing articles (section 503)

50. ACTUAL DAMAGES/PROFITS What are actual damages? (See Frank Music Case)

51. ACTUAL DAMAGES/PROFITS Actual damages are extent to which market value of copyrighted work has been injured or destroyed by an infringement including fair market value of licensing fee (Davis) If too speculative, will not be awarded Punitive damages are not generally awarded in copyright actions

52. INFRINGER’S PROFITS What profits is a prevailing plaintiff permitted to recover in a copyright infringement action? What must P prove? - see Davis case

53. INFRINGER’S PROFITS Prevailing P can recover infringer’s profits if attributable to infringement Plaintiff is only required to prove D’s sales that are reasonably related to the infringement Burden then shifts to D to prove elements of costs to be deducted from sales in arriving at profit. Doubt about computing costs/profits should be resolved in P’s favor.

54. FRANK MUSIC Had defendant met its burden in proving element of costs to be deducted from sales in arriving at profit? Why or why not? Can a copyright proprietor recover “indirect profits”? How should profits be apportioned? To what extent are joint defendants liable for an award of profits?

55. STATUTORY DAMAGES What are statutory damages? Can you recover statutory damages as well as actual damages and profits? Are there any prerequisites for statutory damages? See s. 412 When must P elect statutory damages? What amount of statutory damages may a court award? What if infringement willful?

56. DIGITAL THEFT DETERRENCE AND COPYRIGHT DAMAGES IMPROVEMENT ACT 1999 legislation raising statutory damages by 50% (See supplement)

57. STATUTORY DAMAGES See s. 504© Statutory damages can be between $750 and $30,000 per work “as the court considers just” For willful infringement, statutory damages can be increased to no more than $150,000. If infringement innocent, statutory damages can be reduced to $200

58. COMPILATIONS/DERIVATIV E WORKS For purposes of statutory damages, all parts of compilation/derivative work are to be regarded as constituting a single work

59. ENGEL V. WILD OATS What was the issue for the Southern District of New York? How did it resolve this issue?

60. LESSIG The Future of Ideas

61. COSTS AND ATTORNEY’S FEES See Fogerty v. Fantasy (1994) What was the subject of the split in the circuit? How did the Supreme Court rule on this split? Is Judge Posner’s statement in Gonzalez (see supplement) sound?