This column addressed the Ninth Circuit’s decision in the case Petrella v. Metro-Goldwyn-Mayer, Inc., et al., approximately 18 months ago.  The Ninth Circuit held that the equitable defense of laches could be asserted to bar a claim for copyright infringement even if it was filed within the three-year statute of limitations.  As the column pointed out at that time, Justice Fletcher concurred in the opinion only because that it was consistent with prior Ninth Circuit precedent but pointed out that there had been a split among the various circuits as to whether this was a proper result.  Earlier this week, the U.S. Supreme Court considered this circuit split and found that the Ninth Circuit erred in allowing the defense of laches to bar a claim for infringement that was brought within the three year statute of limitations.

A short recap of the facts of the case are as follows:  Jake LaMotta retired from boxing and with his friend, Frank Petrella, worked together to write a book and two screen plays concerning LaMotta’s life.  The works were registered with the U.S. Copyright Office.  One screen play in 1963, a book in 1970 and another screen play in 1973.  In 1976, Frank Petrella and LaMotta assigned their rights in the three works to a production company, which subsequently assigned the motion picture rights to MGM in 1978.   MGM released “Raging Bull” in 1980.

Mr. Petrella passed away in 1981 and his copyright renewal rights passed to his daughter Paula.  (Note: When an author dies prior to the beginning of a copyright renewal period, his successors get his or her renewal rights even if the author previously assigned the rights.)  Ms. Petrella filed a renewal application for the 1963 screen play in 1991.  She later retained an attorney who contacted MGM and others between 1998-2000 to notify them of Ms. Petrella’s copyright interest in the 1963 screen play and claiming that their exploitation of derivative works, including the motion picture Raging Bull, constituted infringement of her rights.  MGM responded by denying that it infringed on any of Ms. Petrella’s rights.  Ms. Petrella then waited almost a decade before filing suit against MGM and others in 2009.  Prior to trial, the district court granted summary judgment in the defendant’s favor on the basis of the doctrine of laches.  This was despite the fact that plaintiff had alleged that MGM had continued to infringe on her rights within the three year statute of limitation set forth in section 17 U.S.C. §507(b).  The Ninth Circuit affirmed the judgment based on laches in 2012 and plaintiff appealed that decision to the U.S. Supreme Court. Continue Reading Raging Bull Revisited – Copyright Infringement and the Laches Defense

On April 22, 2014 the United States Supreme Court heard oral arguments in the case of American Broadcasting Company (“ABC”) v. Aereo.  Although this case has been overshadowed by other matters on the Court’s docket and has received very little media attention, the Court’s decision will potentially have an impact on copyright law that is as significant as the vindication of the VCR in Sony v. Universal.

Aereo’s technology enables thousands of viewers to watch television online.  Aereo accomplishes this by assigning a tiny television antenna to each of its subscribers.  This tiny antenna is then connected to a private digital video recorder (“DVR”) located in a facility maintained by Aereo.  Aereo’s subscribers can access their private DVRs over the Internet to retrieve the content recorded through the use of their personal antenna.  Aereo’s technology has created an uproar from the television industry more raucous than Lars Ulrich’s response to Napster.  Fox Broadcasting even indicated that, should Aereo be permitted to remain in business, Fox may seriously consider getting out of the broadcast business entirely.

At issue is a dispute over the interpretation of a portion of copyright law centered on what activities amount to a “public performance” of copyrighted work.  Under United States Copyright law, performance of a copyrighted work may include “transmitting . . . the work . . . to the public, by means of any device or process.”  ABC, Fox and the other broadcasters claim that Aereo’s services amount to copyright infringement because Aereo’s services amount to “public performances” of copyrighted works.  In its defense, Aereo makes an interesting argument.  Aereo claims that it is not transmitting to the public at large, rather it is transmitting each of the copyrighted works thousands of times, directly to individual subscribers.  According to Aereo such a transmission is therefore not made “to the public.”  Aereo also argues that each of these “private” transmissions simply provides the Aereo subscriber with content that already was broadcast to the public without charge over public airwaves.  Aereo therefore asserts that it is merely allowing its subscribers to receive freely broadcast television content, store it in a private space at Aereo’s facilities, and later rebroadcast it to the subscriber through a secure internet connection at the time of the subscriber’s choosing.  Therefore, according to Aereo, its services are much more like “time shifting,” a practice that the Supreme Court approved when it decided the Sony v. Universal case in 1984.

The broadcasters claim Aereo’s activities act more like a cable company.  Cable companies receive freely broadcast content, then retransmit that content to cable subscribers.  Cable companies pay a license fee for the right to do this and, not surprisingly, broadcasters feel that Aereo should be required to pay this fee.  Aereo believes its model is distinguishable from a cable TV system.  Aereo claims it is only a replacement for the antennas that its users would otherwise put on their own rooftops.  They are not transmitting or retransmitting anything to the “public,” they are simply rebroadcasting private content recorded on a private DVR after being captured on a private antenna.

Obviously the outcome of this case could have a far-reaching impact on the types of services that are offered using the internet, or at the very least will have a significant impact on the cost of such services.  For now, we will keep watching and waiting for the Court’s ruling.  Stay tuned.

Under the WIPO Internet Treaties, member states are required to recognize in their national laws  the exclusive right of  authors of works to ‘‘make [the works] available’’ and ‘‘communicate [the works] to the public’’, including through interactive platforms, such as the Internet. The United States implemented the WIPO Internet Treaties through the Digital Millennium Copyright Act (‘‘DMCA’’) in 1998.  Based on advice received from the Copyright Office and others, Congress did not amend U.S. law to include explicit references to ‘‘making available’’ and ‘‘communication to the public,’’ concluding that the distribution right under the Copyright Act already covers those rights.  However, because of  the absence of express “making available” language in the Copyright Act, courts in file-sharing litigation have reached somewhat different conclusions as to whether the distribution right requires proof of actual dissemination.

Commentators on the subject have opined that the “making available” right is subsumed within the distribution rights set forth in Section 106 of the Copyright Act and that most courts have correctly interpreted the Act as such.  These courts have found that a defendant infringes the distribution right by making the work available without having proof that the work was actually accessed by others.  For example, in  A&M Records, Inc. v. Napster, the 9th Circuit held that “Napster users who upload file names to the search index for others to copy violate plaintiffs’ distribution rights”.  Also in UMG Recordings, Inc. v. Alburger, the United States District Court for the Eastern District of Pennsylvania held that “There is no requirement that plaintiffs show that the files were actually downloaded by other users from Defendant, only that files were available for downloading.”

However, it appears that some courts have concluded that an infringement of the distribution right under the Act does not occur in the absence of actual dissemination. For example, in Atlantic Recording Corp. v. Howell, the District Court of Arizona  held that “[the distribution right] is not violated unless the defendant has actually distributed an unauthorized copy of the work to a member of the public.”  Continue Reading Will The Copyright Act be Amended to Include a “Making Available” Right

   Under California law, a plaintiff must bring a claim for trade secret misappropriation within three years of discovering the misappropriation or, by the exercise of reasonable diligence, should have discovered the alleged misappropriation.  Often times, discovery of alleged trade secret misappropriation is rather straightforward, i.e., a company discovers that its former employee has downloaded information from a computer and has started soliciting customers to do business with a competitor.  However, there are times when discovery is less straightforward, especially in product development where it can take years for a product to hit the market.  One potential source of information that may give rise to the discovery of trade secret misappropriation that employers must be aware of are patent filings.  The U.S. District Court in the Northern District of California recently used evidence of a patent filing to grant summary judgment in favor of a defendant accused of trade secret misappropriation in the case: Wang v. Palo Alto Networks, Inc. (Case No. 12-05579).

Mr. Wang was a design engineer specializing in the field of network security.  He spent approximately a decade trying to commercialize his firewall technology that included  “fast signature scan” technology.  In 2004, he filed a patent application on his technology.  His patent eventually issued in November 2008.

For years prior to the issuance of his patent, he tried to interest venture capitalists in his product.  In 2005, Mr. Wang met defendant Fengmin Gong at a seminar.  Mr. Gong was a chief scientist at McAfee, Inc. at the time.  Mr. Wang gave Mr. Gong a brief overview of the technology he was developing and later had Mr. Gong sign a nondisclosure agreement.   Over the next year, Mr. Wang discussed his alleged trade secrets with Mr. Gong and even gave him a copy of his patent application that contained trade secret information.  Mr. Gong was supposedly the only person to whom Mr. Wang disclosed his trade secret information. Continue Reading Patent Filings and the Potential Discovery of Trade Secret Misappropriation