Pending before the 9th Circuit is a case which may change the landscape for online copyright protection. The case, Lenz v. Universal, may make it more difficult for copyright owners to protect against infringement in today’s environment of hyper infringement. Defenders of Lenz argue that this case represents the quest for a legitimate balance between overzealous copyright enforcement and legitimate, non-infringing use.
The facts of Lenz are fairly simple. Lenz posted to YouTube a very short video of her young child dancing to a Prince song playing in the background. At the time, Universal Music Publishing was managing Prince’s music publishing. An attorney at Universal manually reviewed the posting but acknowledged that he did not consider whether the Lenz video was fair use. Universal sent a DMCA takedown notice to YouTube and YouTube removed access to the video. Most normal takedown situations end there; however, Lenz was upset and, after trying and failing to remedy the situation herself, sought the aid of attorneys at the Electronic Frontier Foundation.
The DMCA was enacted in 1999 as an attempt by Congress to stem the tide of rampant online copyright infringement. The DMCA offered copyright owners a streamlined process for taking down from the Internet allegedly infringing material and online service providers had great incentive to follow the process laid out in the DMCA; to not do so opened one up to potential secondary liability for their users’ activities. Congress included a requirement that the allegation of infringement in a takedown notice include a statement that the sender had a good faith belief that the posting of the allegedly infringing content was not authorized by law. Specifically, Section 512(c)(3)(A)(v) requires a takedown notice to include “[a] statement that the complaining party 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.”
In general, any appeal from a civil action involving claims of patent infringement must be made to the Federal Circuit in Washington, D.C. A recent case from the Ninth Circuit, Amity Rubberized Pen Company v. Market Quest Group, illustrates this principle as well as demonstrating the practical measures an appellate court will take to help an appeal survive.
In Amity Rubberized Pen Co., Amity held a patent for a device that dispensed both toothpicks and tablets such as breath mints. In 2006, Amity sued Market Quest Group alleging infringement of its patent and brought various other federal and state law claims. Counsel for Amity withdrew from the case during trial and the court declared a mistrial and ordered that Amity substitute in new counsel. It also awarded Market Quest its attorney’s fees and costs for the mistrial and warned Amity that it would dismiss the case if it failed to pay. Amity did not pay the fees and in 2010, the Court dismissed the case with prejudice.
Approximately three years later, in 2013, Amity filed a new lawsuit against Market Quest alleging similar claims as the previous action, including claims for patent infringement. Market Quest filed a motion to dismiss the lawsuit on the grounds of res judicata, arguing that the present actin was barred by the dismissal with prejudice of similar claims three years earlier. The District Court agreed and dismissed the 2013 lawsuit. Amity appealed this dismissal to the Ninth Circuit Court of Appeals instead of to the Federal Circuit.
Unless you have been living under a rock for the last week, you know who Carli Lloyd is. If, however, you do not, she is the reigning World Cup MVP for Team USA. On Sunday, in perhaps the most astonishing World Cup performance of all time, Lloyd scored a hat trick in just the 16th minute of the game, and propelled Team USA to its third Women’s World Cup championship. You may be wondering, how is this related to intellectual property, and I promise you, I am getting there.
After Lloyd scored her second goal in the first five minutes of Sunday’s World Cup final, her official website’s server crashed because it was getting so much traffic. Just eleven minutes later, Lloyd scored her third goal and transitioned into a household name. During the game alone, Lloyd gained 50,000 Twitter followers. By now, the connection between this article and intellectual property may be evident: Lloyd’s spike in popularity also caused a spike in the value of her likeness.
Merriam-Webster’s Dictionary defines likeness as (1) a picture of a person; or (2) the quality or state of being alike or similar especially in appearance. California law provides that the appropriation of a person’s name, voice, signature, photograph, or likeness for a commercial use is actionable. Thus, a celebrity is entitled to control the use of their likeness in the commercial context to their financial gain if they so desire. Simply put, Lloyd’s hat trick may have not just cemented her spot in World Cup history, but also greatly increased her wealth.
Many who enjoy champagne have noticed that their favorite cuvée has quietly changed its label. Many of the world’s bottles of bubbly now indicate that they contain “sparkling wine” when they used to be “champagne.” Those who enjoy Basmati rice or Camembert cheese also have noticed changes to the names of their favorite products. What happened? Why we are now drinking sparkling wine when we used to enjoy champagne, or why we must settle for brie when we previously enjoyed Roquefort?
Although the names have changed, the products probably have not. Rather, many countries have created a system which recognizes and protects the value of the intellectual property associated with the geographic origin of certain products. Functioning like a trademark, a geographical indication can represent valuable intellectual property by identifying a particular region as the source of a certain product. Although not traditionally protected by trademark laws, geographical indications and designations of geographic origin have traditionally been afforded protection by various countries. Long known for its famous varieties of cheese, wine, and, of course, champagne, France introduced one of the first systems designed to protect geographical indications, known as appellation d’origine contrôlée, or the “AOC.” Sacre bleu! The AOC makes it unlawful to manufacture and sell a product under a geographical indication identified by the AOC unless that product complies with a set of strict criteria, including production of AOC-protected products in particular regions.
On Monday, the United States Supreme Court upheld the longstanding case law that prohibits a patent owner from receiving royalties after a patent has expired. In Kimble v. Marvel Entertainment, LLC (June 22, 2015) 2015 U.S. LEXIS 4067, the Court ruled in favor of Marvel, the licensee of a patent for a Spiderman web-shooting toy.
The plaintiff, Stephen Kimble, had patented the web-shooting toy. Kimble had talked to Marvel about licensing his patent, but Marvel declined to take a license. Shortly thereafter, Marvel began selling a suspiciously similar web-shooting toy.
Kimble sued Marvel for patent infringement. The parties settled. Pursuant to the settlement, Marvel bought the patent from Kimble for a lump sum and a three-percent royalty on future sells of the toys.
Marvel later filed a declaratory judgement action in the district court, seeking a judgment that Marvel could stop paying Kimble royalties when the patent expired in 2010. Marvel relied on Brulotte v. Thys Co., 379 U.S. 29 (1964), in which the Supreme Court had held that a patent owner could not receive royalty payments after the patent had expired, and that agreements that provided for post-term patent royalties were per se unlawful.
Richard Prince is either on the very edge of fair use or is engaging in blatant copyright infringement. Unlike most however, Prince has been down this road before; accused of infringement and a defense based entirely on fair use. What is different about Prince, and what might explain the sheer boldness of his recent project, is the last time Prince was accused of copyright infringement, he ultimately prevailed on appeal to the 2nd Circuit.
Prince is a practitioner of what has come to be known as “appropriation art,” that is, art – mainly visual art – that incorporates and utilizes third-party images and photographs, which are often the subject of copyright.
In 2008, Prince created thirty works of art that comprised a series he called Canal Zone. The works in Canal Zone made use of a number of images from Patrick Cariou’s photography book on Rastafarians in Jamaica called “Yes Rasta”. In the Canal Zone works, Prince had enlarged, cut up, and painted over Cariou’s images, as well as placed them with other images. While not directly a factor in the Court’s infringement analysis but certainly a motivating factor behind Cariou’s lawsuit, while Cariou had little commercial success with his book, Yes Rasta, Prince sold eight of the Canal Zone works for a total of over $10 million.
Cariou initially won on summary judgment at the district court level, and obtained a permanent injunction compelling Prince to turn over all of the unsold Canal Zone works for sale, disposal or destruction. In its ruling, the United States District Court for the Southern District of New York held that Prince’s works did not qualify as a “fair use” because, among other things, they were not transformative in that they did not “comment on” Cariou’s photographs or the subjects of the photographs, and Prince himself did not articulate any transformative intent in connection with the use of the images.
On appeal, Prince challenged the lower court’s analysis of the first fair use factor, the purpose and character of the use. The purpose of this factor is to test whether the allegedly infringing work is “transformative”. A work is transformative when it adds something new to the work allegedly infringed, with a further purpose or different character, altering the original work with new expression, meaning, or message. A work is transformative if it does something more than repackage or republish the original copyrighted work. A transformative work is one that serves a new and different function from the original work and is not a substitute for it. As the Supreme Court noted in Campbell v. Acuff-Rose Music, Inc., “the more transformative the new work, the less will be the significance of other factors, … that may weigh against a finding of fair use.”
A U.S. patent is “presumed” valid. That means a patent owner does not need to prove the patent is valid in a suit for infringement. And, as the U.S. Supreme Court just explained in Commil United States, LLC v. Cisco Systems, Inc., 2015 U.S. LEXIS 3406 (May 26, 2015), a defendant’s belief that the patent is invalid is not a defense to infringement.
Commil owned a patent that covered a method for increasing the speed of wireless networks. Commil sued Cisco for patent infringement, alleging that Cisco directly infringed the patent by making and using certain network equipment. Commil also alleged that Cisco indirectly infringed the patent by inducing infringement, that is, by selling the equipment to others and instructing them how to use the equipment, causing them to thereby infringe the patent.
At trial, the jury found that Cisco had directly infringed the patent. With respect to the claim of indirect infringement, Cisco contended that it did not have the required specific intent to induce infringement because it believed in good faith that the patent was invalid. The district court for the Eastern District of Texas ruled that Cisco’s evidence of its good faith belief was not admissible as a defense to infringement. The jury found Cisco liable to Commil and awarded Commil $63.7 million in damages.
Cisco appealed to the Federal Circuit Court of Appeals, arguing that the district court’s ruling was erroneous. The appellate court reversed the district court, holding that a good faith belief that a patent is invalid is sufficient to negate the required specific intent to induce infringement.
Cindy Lee Garcia thought she was playing a bit part in “Desert Warrior,” an adventure film being made by an amateur film maker. The film was never completed. Instead, Ms. Garcia’s performance was re-purposed, and her physical on screen appearance was used in a film titled “Innocence of Muslims,” with her voice redubbed, changing her speaking part so that she appeared to being asking, “Is your Mohammed a child molester?” The film was uploaded to YouTube. An outraged Muslim cleric saw the video and thereafter issued a fatwa directing his followers to kill everyone involved with the film. Ms. Garcia was nonplussed.
Garcia filed suit seeking, among other things, a restraining order directing Google to remove the film from YouTube. Primarily, Garcia claimed that the video infringed a copyright which gave her the exclusive right to control the use of her performance. Granting the injunction, the district court ruled that Garcia was likely to succeed on her copyright claim because it believed she held a valid copyright interest in her performance, and that the film maker had exceeded the terms of a license granted by plaintiff when she was misled into acting in “Innocent Muslim,” under the false pretense that she was playing in “Desert Warrior.” The court also determined that Garcia faced irreparable harm because Garcia had been receiving death threats. Google appealed to the Ninth Circuit. Initially the Ninth Circuit agreed with Garcia, however on May 18th, sitting en banc, the Ninth Circuit reversed.
Let’s face it, we live in a progressive era. Many things that were once taboo in the eyes of the law have become not only socially acceptable, but legal. For example, twenty years ago, if a California state police officer saw you walking down the street smoking what he knew to be marijuana, you were unlikely to walk away without at least a citation. Now, that same officer would have to think twice before jumping to a conclusion and writing you a citation for possession of marijuana, because it is now legal to possess cannabis for medically related purposes in this state. In fact, as of the date of this article, 23 states and the District of Columbia have legalized the possession of marijuana in some form. Four states have even legalized it for recreational use.
At this point, you are likely wondering why I am yammering on about the legalization of marijuana in an intellectual property article. Not only is it unrelated, but honestly, its old news. However, the booming business that is emanating from the legalization of marijuana is not old news. That is exactly what I am here to discuss. If you have read any of my previous articles, you know that I am a strong proponent of protecting the goodwill in your brand through the federal trademark laws. This should not come as a surprise; it is more beneficial and less costly for my clients to retain my services for preventative intellectual property counseling than it is for litigation, or to lose goodwill in their brand.
The word that comes after the period in a domain name is referred to as a top level domain (“TLD”) and there seems to be a TLD for everything. There are TLDs that reflect geographic regions such as “.ASIA” for the Asia-Pacific region and .IRISH for the global Irish community. There are numerous other TLDs that reflect a wide variety of interests, including professions (“.ACTOR” for actors and “.ACCOUNTANTS” for accountants). Just when you think you have seen everything, along comes a proposed new TLD that causes a huge uproar among trademark owners.
Vox Populi Registry Inc. was granted the right to operate the registry for a “.SUCKS” TLD. The stated purpose of the .SUCKS TLD is to facilitate First Amendment criticism of companies, organizations or products. Trademark owners say that Vox is a shakedown artist and the sole purpose of the .SUCKS registry is to cause trademark owners to purchase expensive domains in order to defend their brands. In support of this allegation, trademark owners point to the fact that Vox will charge trademark owners approximately $2500 and up to register a .SUCKS domain name during the Sunrise Period. (A Sunrise Period is a period of time during the rollout of a new TLD in which trademark owners have the right to register domain names which reflect their brands in the new TLD.) Trademark owners argue that when compared to the registration fee of $249 charged by Vox during the general availability period and when compared to the few hundred dollars charged by other TLD registrars during their Sunrise Period, it is obvious that this scheme is nothing more than “predatory, exploitative and coercive.”