Non-alphanumeric logo isn't CMI

CoStar Group, Inc. v. Commercial Real Estate Exchange Inc., No. CV 20-8819 CBM(ASx), 2021 WL 3566415 (C.D. Cal. Jun. 9, 2021)

CoStar owns a number of digital marketplaces containing listings of real estate for sale and for lease. Its LoopNet is allegedly “the leading digital marketplace for commercial real estate,” and contains CoStar’s copyrighted images, data from the CoStar database, and edits made by CoStar to “improve marketability.” Defendant CREXi is trying to build its own online commercial real estate marketplace and auction platform. It allegedly CREXi “harvest[ed] content, including broker directories, from CoStar’s subscription database without authorization by using passwords issued to other companies.” This opinion addresses only CoStar’s CMI claims.

The court agreed with CREXi’s argument that CoStar’s watermark wasn’t CMI. It didn’t include the copyright symbol (©) or any identifying information about the author of the work, such as a web address or company name. Its logo “can be described as five small light grey parts that form a circle.” (Interestingly, it doesn’t seem to use grey for its regular logo—perhaps black disappeared into too many photos.)

One version of CoStar logo (which is elsewhere usually accompanied by its name)

Although CoStar alleged that this identified its ownership of the image, that was a legal conclusion; the logo itself didn’t contain any identifying information about the author of the work as required by § 1202(c). McGucken v. DMI Holdings, CV 18-4837, 2019 U.S. Dist. LEXIS 60852 (C.D. Cal. Apr. 9, 2019), accepted “45SURF” superimposed onto a photo as CMI because “it identified plaintiff and his brand as the author and owner of the photographs”; he used that as his professional name. But CoStar’s logo “does not include the author’s name, title, an alphanumerical designation, or identifying symbols referring to such information.” See also Maule v. Anheuser Busch, LLC, No. 17-00461, 2018 U.S. Dist. LEXIS 125805 (E.D. Pa. July 27, 2018) (“Visit Philly Skyline Dot Com” superimposed on picture was not CMI: it “did not contain Maule’s name or any identifying information about him as the author of the photograph or owner of the copyright to that work ... nor does it inform the public that something is copyrighted [or] prevent infringement.”)

What Dastar took, does 1202 give back?

Another older case found in my year-end roundup.

Pilla v. Gilat, 2020 WL 1309086, No. 19-CV-2255 (KMK) (S.D.N.Y. Mar. 19, 2020)

Pilla provides “professional architectural services to various construction projects.” Defendants own a “luxury construction project” at 324–326 West 108th Street in New York City involving the renovations of two existing five-story buildings and a sixth-story addition to the buildings. Pilla provided architectural services to defendants for the project and registered two sets of architectural drawings therefor. Pilla alleged that defendants began unlawfully copying the designs, including by submitting unauthorized copies to the NYC Department of Buildings, representing that the submitted drawings were their own, and Gilat “intentionally removed [Plaintiff’s] name and [the] notice of copyright” from the original designs.

The court couldn’t resolve the substantial similarity issues on a motion to dismiss, even given that the existing building constrained the designs. Defendants’ arguments, such as that similarities were attributable to the codes of the Landmark Preservation Commission, had to await summary judgment. Even for architecture, dismissal on a motion to dismiss required an “utter lack of similarity,” not present here.

Of more interest: Dastar barred the false designation of origin claim. The “copying of creative content like [architectural drawings] is not protected by the origin of work provision of the Lanham Act ... precisely because this sort of claim falls within the purview of copyright law.” (Dismissed without prejudice in case plaintiff could allege the presentation of a “tangible good[ ] ... offered for sale.”  The court gets a bit confused: it suggests that allegations of copying “with no revisions or changes” could state a false designation of origin claim, but copying to create a derivative work couldn’t; this is just wrong because of the “tangible good” issue.)

DMCA §1202: The court refuses to dismiss the claim for CMI removal/alteration. Courts in general have not always taken 1202 seriously by its own terms, perhaps because it seems very limited if they were to do so. By its own terms, 1202 treats “removing” CMI differently from “distributing copies that have had the CMI removed.” But, as the court here does, courts often collapse those two together. On a motion to dismiss, Pilla sufficiently alleged the necessary double intent, “albeit barely.” It alleged that there was CMI on its designs: its logo, name, and seal, as well as a note stating, “[t]he entire contents of this document ... and all copyrights therein[ ] are and shall remain the sole and exclusive property of [Plaintiff]. The documents and their contents may not be used, photocopied[,] or reproduced digitally, electronically[,] or in any other manner without the express written consent of [Plaintiff].”

It wasn’t necessary to allege how, when, or where the CMI removal occurred, and Pilla sufficiently alleged that this was intentional. And Pilla alleged that defendants copied the designs and submitted derivative designs to NYC. [Note that the court doesn’t require explanation or allegation of how this removal induced, enabled, etc. infringement—would fewer copies have been created if they’d left this information on?] The court signalled that it would be open to the argument that infringing derivative works (that is, nonexact copies) can’t violate §1202, but reserved this issue for later development. And Pilla seemed to state a claim for provision of false CMI, for the same reasons.

1201 claim to control device features survives

Philips North America, LLC v. v. Summit Imaging Inc., 2020 WL 1515624, No. C19-1745JLR (W.D. Wash. Mar. 30, 2020)

But I was told that after Lexmark and Chamberlain, manufacturers weren’t using §1201 claims to control devices!

The parties compete to sell ultrasound imaging devices for hospitals and medical centers; Philips sells related ultrasound hardwre devices. Philips’ Ultrasound Systems are driven by one of two software platforms that Philips developed and owns: (1) Philips Voyager Platform and (2) Philips Common Platform. Each PUS has features/tools that are only enabled by license, and Philips aleges it uses “multiple layers of technological controls to protect” their copyrighted works from unauthorized access, and that the software and access control systems are trade secrets and that those systems contain other trade secret information.

Summit allegedly hacks into Philips’ software and alters the Ultrasound Systems in order to enable features or options for which Philips’ customers have not paid Philips, and trains Summits customers on how to circumvent Philips’ access controls. Summit allegedly advertises that its Adepto tool is a “legal solution” or a “legal alternative” to working with Philips in order to enable additional features and options.

Defendants moved to dismiss DMCA §§1201 and 1202 claims, Defend Trade Secrets Act claims, Uniform Trade Secrets Act claims, false advertising claims, Consumer Protection Act claims, and contributory copyright infringement claims.

Philips adequately pled that its Ultrasound Systems are protected by “a technological measure that effectively controls access to a work” under §§ 1201(a)(1) and (a)(2): (1) user-specific codes; (2) user-specific hardware keys; (3) machine-specific codes and hardware keys; (4) software files with licensed features and optional add-on controls; (5) machine-specific configuration files that control compatibility between the systems and software and/or the systems and replacement parts; and (6) software disabling if a user attempts to make use of an unlicensed feature. And Philips sufficiently alleged circumvention of those access controls: defendants allegedly remove the hard drive from the Ultrasound Systems and run their Adepto program on the hard drive, which changes configuration files and software files in order to enable unlicensed options on the hard drive, and force compatibility with otherwise incompatible transducer parts.

§1202, modifying CMI: Not plausibly alleged. The only CMI identified with any specificity in the complaint is “the terms and conditions of the use of the software,” which allegedly resides on “machine readable configuration files.” But Philips didn’t plead facts explaining how defendants falsify, remove, or alter Philips’ terms and conditions. Motion to dismiss granted with leave to amend.

DTSA and UTSA causes of action also survived.

False advertising (including state Consumer Protection Act): To the extent that the claim was based on statements about the legality of defendants’ services, these were inactionable statements of opinion because the statements “purport to interpret the meaning of a statute or regulation.” And, though there is a “well-established exception” to the bar against false advertising claims based on opinion statements for an opinion statement “by a speaker who lacks a good faith belief in the truth of the statement,” Philips failed to adequately plead that defendants lacked a good faith belief in the truth of their statements.  Again: leave to amend.

Contributory copyright infringement: adequately alleged because the Adepto tool allegedly created copies of Philips’ software and log files [are the log files copyrightable? Are they copyrightable by Philips? Seems unlikely].

Dastar bars Lanham Act claims against unauthorized copying of photo for album cover

Patterson v. Diggs, No. 18-CV-03142 (NSR), 2019 WL 3996493 (S.D.N.Y. Aug. 23, 2019)

Patterson is “an internationally known photographer” who took photos of “a nickel-silver casing created by nonparty Moroccan company Yahya Creation” without a written contract and without being paid, spending over 80 hours doing so. The relevant photo was registered in 2017, though the metadata referred to 2013.  This casing, as far as I can tell, is the cover of the unique copy of the Wu-Tang Clan album “Once Upon a Time in Shaolin,” although the complaint alleged that the album uses Patterson’s work as cover art, so I'm a bit confused.  He sued the Wu-Tang Clan and others for using the work as cover art, advertising the album for sale [though the album is famously not available for ordinary sale], and using the work to market and advertise musical concerts and tours.

The copyright claims survived, but not Lanham Act claims.  CMI removal claims also survived because Patterson alleged that defendants, without authorization, “intentionally remov[ed] and/or alter[ed] the copyright information, in the form of metadata, on the copy of at least Plaintiff’s copyrighted photograph, and distribut[ed] copyright management information with knowledge that the copyright management information had been removed or altered ... and distributed and publicly displayed the material, knowing that copyright management information had been removed or altered.” This was supported with an exhibit purporting to show the alleged metadata included in one photograph, which lists Patterson as the author of the photograph, marks the status of the photograph as “Copyrighted,” contains a “Copyright Notice” that reads, “image © 2013 Warren Wesley Patterson,” and includes a “Copyright Info URL” box listing Patterson’s website.  [If it’s metadata, how is it supposed to persist in analog copies? I can also imagine some other courts being pickier about alleging which defendants did what given 1202's nested knowledge requirements. This issue may instead be the subject of targeted summary judgment, if the case gets that far.]

Likewise, vicarious copyright infringement claims survived because Patterson alleged the right and ability to supervise plus direct financial benefit, “including without limitation [through] revenue sharing and/or royalty payments for each infringing version [of the Album] sold.” It was at least arguable that Patterson’s work, “which is prominently featured in advertisements for the Album and in entertainment articles describing the Album, has played a role in the Album’s marketability, reaping Defendants direct financial benefits in the form of album sales.”  [Unless I misunderstand what’s going on with the album entirely, this allegation seems misleading, since there’s only one copy, now in the hands of the government, whose marketability is focused on its uniqueness in an age of mechanical reproduction.] 

Contributory infringement claims were also sufficiently pled. Defendants allegedly “induced, caused, and/or materially contributed to the direct infringement of Plaintiffs’ [W]ork ... by, among other things, commissioning and/or licensing the electronic versions of the Plaintiff’s photograph, and providing galley proofs or similar high-quality source material for rendition into electronic format.” Though allegations of constructive or actual knowledge were “a legal conclusion not entitled to a presumption of truth,” there were sufficient allegations related to knowledge—Patterson provided email exchanges between himself and one of the defendants related to the work and referring to the Album. [Which sounds like there’s going to be a strong implied license defense for at least some uses.]  “[D]rawing all reasonable inferences in Plaintiff’s favor, it is plausible that the remaining Defendants, as the recording artists and distributors of the Album, would have reason to know of the infringing use of Plaintiff’s Work on the Album cover.”  [FWIW, many of the members of Wu-Tang  ultimately said, apparently even before this lawsuit, that they didn’t even know their contributions were going to be worked into an album.  I also learned that at least one of the 120 members of the venire who said they couldn’t give Martin Shkreli a fair trial explained that it was because  “He disrespected the Wu-Tang.”]

Lanham Act claims: Patterson alleged both source/endorsement confusion and false advertising.  For the former, Patterson alleged that using the cover misrepresented the origin of the art.  “However, the author of a photograph that is reproduced in tangible products or goods such as a musical album cover is not the ‘origin of goods’ within the meaning of the Lanham Act.” Shepard v. European Pressphoto Agency, 291 F. Supp. 3d 465 (S.D.N.Y. 2017), [wrongly] held that the author of a “communicative product” such as a photograph who is also the producer of tangible goods offered for sale may assert a Lanham Act claim for false designation of origin. This case was distinguishable because Patterson didn’t allege that he advertised or sold any of his photos, even though he alleged that the parties’ “products and services” target the “exact same consumers.” Anyway, the underlying theory was “meritless, as the Amended Complaint clearly states that Defendants created the Album, and consumers who purchased the Album were not falsely informed about the origins of the Album because Defendants did in fact produce it.”

And you can’t restyle the exact same Dastar-barred facts as false advertising to avoid Dastar. Allegations that defendants gave the false impression that Patterson authorized the reproduction and distribution of the work didn’t allege a misrepresentation of “the nature, characteristics, qualities, or geographic origin” of defendants’ goods. “The import of Dastar that an author’s recourse for unauthorized use is in copyright cannot be avoided by shoe-horning a claim into section 43(a)(1)(B) rather than 43(a)(1)(A).”

Influencer's laundry list complaint against PopSugar survives motion to dismiss

Batra v. Popsugar, Inc., 2019 WL 482492, No. 18-cv-03752-HSG (N.D. Cal. Feb. 7, 2018)

Batra sued Popsugar for removing the CMI of her photograph, infringing her copyright, violating her right of publicity, intentionally interfering with her contracts, engaging in false advertising, and violating California's UCL. She alleged claims on behalf of a putative class of “persons with large numbers of followers on social media,” also known as “influencers.” [That ought to be a fun class definition.]  The complaint alleged that Popsugar “copied thousands of influencers’ Instagram images, removed the links in the original pages that allowed the influencers to monetize their following, and reposted the images on its own website without authorization with links that allowed POPSUGAR to profit when users clicked through and purchased items.”

DMCA 1202(b): Popsugar alleged that Batra failed to plead that Popsugar had the requisite mental state and that she failed to identify the removed CMI. The court rejected both arguments. The 9^th Circuit has held that “the ‘induce, enable, facilitate or conceal’ requirement is intended to limit liability in some fashion—specifically, to instances in which the defendant knows or has a reasonable basis to know that the removal or alteration of CMI or the distribution of works with CMI removed will aid infringement.” Here, Batra alleged that Instagram posts show a photo on the left and sidebar text on the right, with identifying information for the author of the photo, including “his or her name and/or link(s) to personal website(s) or other social media sites, such as a personal YouTube channel.” When Popsugar copied the images, it omitted the sidebar, allegedly constituting the removal or alteration of that CMI. This was sufficient, raising the plausible inference that Popsugar knew that removing the CMI would help conceal the alleged infringement. 

Lanham Act false endorsement/false advertising claim: Popsugar argued that the only relevant goods or services were products bought by users clicking on Popsugar links, and those weren’t falsely described/attributed in any way. But Batra alleged that there was confusion over Popsugar’s own service of posting “shoppable” images of influencers and products, which was sufficient to state a claim.

Copyright Act preemption: Popsugar argued that copyright law preempted the right of publicity, interference with contract, and UCL claims.  For the right of publicity, this argument failed because it was the use of the plaintiffs’ names, other identifying information, and likenesses that was at issue, not the use of the photos as such.  Contract:  The complaint alleges that, pursuant to a contract between Batra and LIKEtoKNOW.it, Batra was “entitled to a portion of the revenue that LIKEtoKNOW.it received from sales resulting from social media users’ use of the app” in connection with her posts. The intentional removal of these links allegedly interfered with her contract.  The court found that the allegation of unauthorized removal of monetized links was an extra element that avoided preemption.  This strikes me as a mistaken extension of the law; it is playing with the definition of “removal” to mean “not copying,” which means that what is alleged is really the unauthorized copying + use of Popsugar’s own links.  But the use of Popsugar’s own links is the kind of economic benefit that doesn’t constitute an extra element of the tort, which is what’s required to avoid preemption. UCL: Not preempted for the same reasons.

Interference with contract: Batra alleged that Popsugar knew of the contract between class members and LIKEtoKNOW.it and general knowledge of the common industry practice of affiliate marketing, and that its removal of links was intentional “in that Defendant intended to disrupt the performance of the parties’ contract and/or knew that disruption of performance was certain or substantially certain to occur.”  This was enough to state a claim for intentional interference.  

The copyright infringement claim was also plausibly pled, despite Popsugar’s argument that Batra didn’t identify the specific infringed works or allege that she’d submitted a complete application for registration before suing.  Batra didn’t plead herself out of court; she alleged dates of infringement and that she had registrations/applications (but not the dates thereof). To survive summary judgment on statutory damages/attorneys’ fees, she’d need the appropriate registration dates, but not yet.

When an author's name isn't CMI

Fischer v. Forrest, Nos. 14 Civ. 1304, 1307, 2018 WL 948758 (S.D.N.Y. Feb. 16, 2018)

This very outdoorsily named and themed litigation arose out of the termination of a longstanding business relationship between plaintiff Fischer and defendants, including Brushy Mountain Bee Farm, alleging that they used his likeness and proprietary text and images to promote their own competing knock-off version of his product, Bee-Quick, a honey harvesting aid.  He sued for copyright infringement, 1202 CMI violations, and false advertising/NY unfair competition. (Previous discussion of report & recommendation here.)  The court adopted and elaborated on the “thorough and persuasive Report and Recommendation.”

Fischer began using certain phrases in advertising on his website in 2000. From 2002 onwards, Brushy used similar words to promote Bee-Quick in advertisements. The parties disputed who wrote the ad copy. Around 2010, Brushy decided to sell its own version of the product, Natural Honey Harvester, obtained from a third-party vendor. For purposes of this lawsuit, the court then accepted that Brushy at that point no longer had any “right,” “license,” or “permission” to use Fischer’s intellectual property, but Fischer didn’t say that until April 2011, when he sent a C&D complaining about copyright infringement.  Brushy responded that “there [did] not seem to be grounds for [Fischer’s] request,” and that Brushy would “review” Fischer’s concerns if he was more “specific.”

Photos of Bee-Quick remained on Brushy’s website until at least January 2011, and images of Bee-Quick may have remained available on Brushy’s website much longer (though it’s not clear whether any full pages used those images).

In 2011, Brushy introduced its Natural Honey Harvester product, using much the same language as before but with a different name, with the intro “For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own.” Fischer alleged that defendants removed CMI and that defendants’ alteration of their online and print advertisements altered CMI by replacing, inter alia, the term “Fischer’s Bee-Quick” with “Natural Honey Harvester” in a sentence describing the product.

Copyright: Fischer’s statutory damages claim failed as a matter of law because his registration postdated the uncontested date of first use of the allegedly infringing work.  Fischer tried to get around this by arguing that Brushy didn’t lose its rights to use his works when it announced to him its cessation of sales of Bee-Quick, but only until he sent the C&D (which was after his registration).  But this argument wasn’t available at this late date, when Fischer’s complaint pled directly contrary to that theory, and it was too wasteful to allow a fully briefed and decided issue to be completely changed now; “[a] proceeding before a magistrate judge is not a meaningless dress rehearsal.”  The changed theory would be even more wasteful because to decide it, the court would have to figure out whether Brushy exceeded the scope of its license by using Fischer’s material to promote Natural Honey Harvester, and thus infringed, before 2012.  And, the court noted, Fischer had consistently contended that these acts by Brushy were unauthorized; the court had already found it highly improbable “that Fischer[’s license] [would] allow[ ] a competitor to repurpose original works he had created, copyrighted, and continued to use to promote and sell his own product.”

Likewise, Fischer couldn’t claim statutory damages based on secondary infringement based on the acts of third-party vendors. These infringements were “part of a series of related infringements by defendants and the [third parties] of the same copyrighted work” that predated Fischer’s registration of his copyright. The fact that Fischer filed two separate lawsuits, rather than consolidating his claims against Brushy into a single lawsuit, didn’t change anything.

DMCA 1202: Fischer argued that Brushy removed CMI in violation of § 1202 when, in revising its ads from promoting Bee-Quick to promoting Natural Honey Harvester, it substituted, in a sentence, the term “Natural Honey Harvester” for the term “Fischer’s Bee-Quick.”  CMI includes the name of the author or copyright owner and can be “contained in the body of a work,” so “Fischer’s” was capable of constituting CMI.  “But, to qualify, the word or words said to constitute CMI must also be ‘conveyed in connection with copies ... of a work ... or displays of a work ....’” and “[a]n action for removal of copyright management information requires the information to be removed from a plaintiff’s product or original work.” 

The works Fischer identified didn’t qualify.  Even assuming that the works Fischer submitted in conjunction with his copyright registration were covered, no CMI was removed from those or exact copies/displays of of them; instead, four discrete phrases were allegedly copied.   “In those cases where claims of removal of CMI have been held viable, the underlying work has been substantially or entirely reproduced.” An ad “based upon an earlier advertisement which in turn drew upon various materials Fischer sent Brushy” is a kind of “composite” work not covered by 1202.  The four phrases themselves also couldn’t form the basis of a DMCA claim.  “CMI exists to inform the public that a work is copyrighted and by whom.” But the four phrases weren’t CMI; only one even mentioned Fischer, and no reader would find that “Fischer’s” as used in the phrase “Fischer’s Bee-Quick is a safe, gentle, and pleasant way to harvest your honey” “speaks to copyright ownership” of that phrase or the others:

Imagine that the back cover of the Ian Fleming novel Dr. No. contained the following encomium: “In Ian Fleming’s Dr. No, Fleming shows his mastery of Cold War spycraft.” Imagine then that a person lifted language from that review to promote a different thriller, writing: “In John Le Carré’s Tinker, Tailor, Soldier, Spy, Le Carré shows his mastery of Cold War spycraft.” Whatever the other legal implications of such conduct might be, it is inconceivable that a DMCA claim would lie from the elimination of Fleming’s name. The expression at issue does not connote Fleming’s copyright ownership of anything, much less the language common to the two book-promoting blurbs. Fischer’s name—whose deletion Fischer’s DMCA claim challenges—similarly has no CMI relevance as used in Defendants’ advertisement. It neither informs the reader that Fischer wrote either the phrase to which “Fischer’s” is attached or the surrounding text.

False endorsement: Fischer argued that defendants violated the Lanham Act by including his name in the post-domain path of URLs that linked to Defendants’ Natural Honey Harvester, e.g., http://brushymountainbeefarm.com/images/799fischers.jpg.  As a matter of law, Fischer couldn’t show confusion. There was no evidence of actual confusion.  Fischer pointed to a review from Brushy’s website stating that an later shipment of a product was not as good as an earlier shipment, but there was no evidence that these were the parties’ respectively.  Fischer also failed to show that the post-domain path names were the cause of Google search results, and his evidence showed that Google provided mostly results for his product, which would indicate that consumers wouldn’t be led astray.  His claims of initial interest confusion were “factually threadbare” and failed to show intentional deception, which is important online because consumers can so easily click back.

Bad faith: There was no evidence that the use of his name in the post-domain URL was knowing; the use of existing URLs was inadvertent, according to Brushy.  Although two archived links on the website contain Fischer’s name, they don’t appear on any webpage advertising Brushy’s products, and were retained to avoid spoliation concerns.

Consumer sophistication: As the report indicated, “Whether defined as the typical consumer of beekeeping products, or Internet users writ large, no ordinary consumer is likely to see Fischer’s name in the post-domain path of the URL and wonder if that signified his endorsement of a completely different product in the accompanying web page.”  Plus, precedent indicates that post-domain paths usually don’t signify source. 

Fischer argued that the continued use of a mark after the termination of a licensing agreement should be a factor in his favor. Courts in this district have indeed held that “[w]hen an ex-licensee continues to use a mark after its license expires, likelihood of confusion is established as a matter of law.” But here, Brushy hadn’t been using Fischer’s name as a mark.  The per se rule of the former licensee cases was inapplicable.

False advertising: Fischer argued that the “Come out with our own” claim was false because Brushy bought its product from a third party.   This statement wasn’t literally false; it didn’t “unavoidably signify that the product offered by Brushy was created in the first instance by Brushy.” Nor was there evidence of deliberate deception or consumer confusion.

false advertising of copyright ownership of songs not preempted, court rules

Carter v. Pallante, 256 F. Supp. 3d 791 (N.D. Ill. 2017)

Tollie Carter sued, as relevant here, alleging that ARC, Fuji, and BMG infringed his copyrights in certain songs by selling unauthorized licenses to third parties, who in turn publicly performed the songs. Carter’s father, Calvin Carter, and his uncle, James Bracken, were songwriters, and Carter is their heir who allegedly recaptured rights in their works under §203 and §304.

Nonetheless, Carter alleged that the publisher defendants, “without [Carter’s] authorization or consent, represented to numerous third parties it could license—and did license to those third parties—the performance rights and other rights to [Carter’s songs].” The court found that claims for copyright infringement and contributory infringement were sufficiently pled.  Selling licenses plausibly violated Carter’s exclusive right to “distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” [Which right?  Authorization isn’t usually considered a separate right, but merely the foundation for secondary liability, which does seem adequately alleged here.] The court rejected defendants’ argument that Carter needed to state who the third parties were, which songs were licensed, or when the licenses were sold, none of which is required under Rule 8 for copyright claims. “He cannot be expected to know at this stage who the third parties were, when these sales occurred, or which of his songs were licensed. This information, if it exists, is exclusively within the Publisher Defendants’ knowledge, and Carter can obtain it only through discovery.”  So too with contributory and vicarious copyright infringement.

DMCA §1202: The claim for removing CMI also survived, even though the alleged removal here didn’t relate to “the Internet, electronic commerce, automated copyright protections or management systems, public registers, or other technological measures or processes as contemplated in the DMCA as a whole.” The plain text of the statute doesn’t require any of that.  Further, defendants argued that Carter didn’t plead that false copyright information was conveyed “with copies of the work.”  But under Rule 8 he didn’t to plead particularized facts as to how, when, and to whom the publishers communicated false information in connection with their purported licensing agreements. “In any event, Carter unmistakably alleges that false copyright information was conveyed with copies of the work by way of the licensing agreements he claims the Publisher Defendants entered into with third parties.” [That doesn’t seem right—again the court seems to be conflating authorization with actual exercise of a §106 right.]

State law claims, however, were mostly preempted, including tortious interference claims. The partial exception was deceptive trade practices under the Illinois Uniform Deceptive Trade Practices Act, which covers “pass[ing] off goods or services as those of another” and “caus[ing] likelihood of confusion or of misunderstanding as to the source ... of goods” as deceptive trade practices. The claim that publishers passed off the copyrighted songs as their own, so that consumers would license them, “falls squarely within the Copyright Act and is therefore preempted.”  However, allegations that the defendants “misrepresented that they owned the copyrighted songs in advertising material without infringing copyrights to the songs” were sufficient, since “[m]aking misrepresentations about a copyrighted work in advertising material—short of licensing the copyrighted works at issue or taking any other action in connection with a copyright owners exclusive rights—is not among the exclusive rights enumerated in § 106 of the Copyright Act.”  This doesn’t seem right under Dastar—the interpretation of “source” is usually the same under state and federal law, and Dastar’s reasoning should justify conflict preemption of state law anyway.

Bee aggressive: Copied ad leads to grab bag of claims

Fischer v. Forrest, 2017 WL 2992663, -- F. Supp. 3d –, 14 Civ. 1307 (S.D.N.Y. Jul. 14, 2017) (report and recommendation)

Fischer invented Fischer’s Bee-Quick, a product used to facilitate honey harvesting, and marketed it using, among other things, the following four phrases:

a) “Are you tired of your spouse making you sleep in the garage after using Butyric Anhydride?”

b) “Are you tired of using a hazardous product on the bees you love?”

c) “Fischer’s Bee-Quick is a safe, gentle, and pleasant way to harvest your honey”

d) “A Natural, Non-Toxic Blend Of Oils and Herbal Extracts”

Defendants were in some way involved with Brushy Mountain Bee Farm, which initially resold Fischer’s product, using the text (whose authorship was disputed):

This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go and it smells good! Fischer’s Bee Quick is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go? Are you tired of using a hazardous product on the bees you love? Then this is the product for you!

Around 2010, Brushy Mountain decided to sell a comparable product that performed the same function; Brushy Mountan bought a third party product and labeled it as “Natural Honey Harvester,” but continued to use nearly the same promotional text.  A 2011 Brushy Mountain catalog used the phrases as follows:

For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own. This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go® and it smells good! Natural Honey Harvester™ is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go®? Are you tired of using hazardous products on the bees you love? Then this is the product for you!

Fischer also alleged that defendants intentionally removed copyright management information (“CMI”) from Fischer’s promotional brochure and the Fischer’s Bee-Quick bottle photos. Defendants changed the textual reference in one of the phrases from “Fischer’s Bee-Quick” to “Natural Honey Harvester,” and allegedly also stripped the metadata from Fischer’s original Fischer’s Bee-Quick bottle photo displayed on Brushy Mountain’s website, and overlaid the photo with a watermark of the Brushy Mountain Bee Farm logo.

There were lots of factual disputes; the magistrate recommended not granting summary judgment on the ground that Fischer’s copyright registration was invalid, even though the first submission (of several) to the Copyright Office didn’t contain the brochure at the heart of the case.  The magistrate also recommended finding the brochure as a whole copyrightable, and concluded that the relevant portions evinced enough originality to be protected, at least as a whole. The “rhetorical questions that play on the worries of beekeepers” were unique and the whole of the brochure was greater than the sum of its parts, although the phrase “A Natural, Non-Toxic Blend Of Oils and Herbal Extracts” was merely descriptive of the product ingredients. Even in isolation, though, most if not all of the rhetorical questions were long enough for copyright protection, particularly the “sleep in the garage” bit.

Unfortunately for Fischer, the copyright claim still had fatal problems.  (1) He did not register before the infringement began, so he was not eligible for statutory damages or attorneys’ fees.  (As an aside, the magistrate analyzed the relevance of secondary liability to the rule that infringements that continue past the date of registration don’t provide eligibility for statutory damages—although two of the vendors for  which Brushy Mountain was allegedly secondarily liable began their infringing activities after the registration, their infringements were republications of the initial ad, and thus part of an ongoing series of infringing acts that didn’t restart the clock.)  (2) Fischer elected statutory damages and declined to submit evidence of actual damages (which probably would have been hard to prove; this is not the type of work for which there is a licensing market in which money changes hands).  (3) Defendants agreed to remove the challenged text, mooting the claim for injunctive relief.  With nothing left for a court to do, the magistrate recommended granting summary judgment to defendants on the copyright claim.

DMCA claim:  Fischer alleged that defendants stripped the metadata from Fischer’s original Fischer’s Bee-Quick bottle photo displayed on Brushy Mountain’s website, but the magistrate recommended rejecting that argument because he submitted no evidence that the metadata included CMI; not all metadata is CMI. Fischer also argued that the allegedly infringing ad had CMI stripped from it because defendants changed the phrase, “Fischer’s Bee-Quick™ is a safe, gentle, and pleasant way to harvest your honey,” by replacing “Fischer’s Bee-Quick™” with “Natural Honey Harvester”:

  

side by side comparison

Fischer argued that the product’s name, because it had Fischer’s name in it, was CMI.  To prevail on a §1202 claim, Fischer had to show that defendants “intentionally remove[d]” CMI that was “conveyed in connection with copies ... of [his] work or ... displays of [his] work.” The relevant “work” here was the the brochure, while defendants created derivative works of the brochure. The creation of infringing derivative works didn’t qualify as the “removal” of CMI from the original work. 

The magistrate was also skeptical that even more direct “extraction” of phrases from a larger work could constitute “removal” of CMI, since the statute contemplates “copies” of a work and extraction of “distinct elements” of a work doesn’t constitute a “copy.” 

If, for example, someone extracted and reproduced several sentences from a copyrighted Sherlock Holmes story, without crediting the Conan Doyle Estate, it would stretch the definition of “removal” to say that CMI had been “removed” from the copyrighted “work.” It might be copyright infringement, but it would not be a DMCA violation.

This conclusion makes total sense—otherwise Blurred Lines should also have been the basis of a §1202 claim—but it requires a bit of fancy footwork to reconcile with the idea that substantial similarity can constitute a violation of the reproduction right, further strengthening my view that the derivative works right should be where such claims live.

Even assuming that the relevant “work” was the four key phrases collectively, Fischer didn’t show that the phrases contained CMI.  “The DMCA’s expansive definition of CMI cannot trigger liability any time a person’s name is contained in a copyrighted work without reference to how that information was used and displayed on the work itself.”  The name of the product discussed in the work is not CMI for the work; such a name, even if includes the author’s name, “does not have any CMI significance—it simply is part of the product’s name (just like Kellogg’s Corn Flakes or Wrigley’s Chewing Gum).”

Fischer didn’t plead a trademark infringement claim, the magistrate reasoned, because he consistently alleged only “counterfeiting,” even when represented by counsel. 

Fischer’s §43(a) false endorsement claim also failed.  This claim was based on Brushy Mountain’s use of URLs that, even after they switched products, still contained “fischer” as part of the address string, e.g., http://brushymountainbeefarm.com/Fume-Pad-w_-Fischers-Bee-Quick/productinfo/777F/

 

page for Fischer replacement, with Fischer's name still in URL post-domain path

The judge applied the multifactor confusion test, and found that the claimed strength of the mark, mark similarity, and product similarity all favored Fischer.  But there was no evidence of actual confusion or bad faith, which the judge found to be the most significant under these circumstances.  This wasn’t a domain name case; the use of “Fischers.com” or “Fischersbeequick.com” to sell a competing product would support a false endorsement claim. But a name “buried in the post-domain paths of the Brushy Mountain web pages” wasn’t likely to confuse consumers about Fischer’s endorsement or approval. “No consumers are likely to believe that Fischer has somehow endorsed or approved Natural Honey Harvester when viewing the post-domain portion of the URL, if they even see it at all.”  Likewise, consumer sophistication favored defendants.  “Whether defined as the typical consumer of beekeeping products, or internet users writ large, no ordinary consumer is likely to see Fischer’s name in the post-domain path of the URL and wonder if that signified his endorsement of a completely different product in the accompanying web page.”  Nor did Fischer provide evidence that, as he contended, the use of his name in the address led Brushy Mountain’s pages to appear higher in search results, or that, even if that were true, that fact would have any bearing on consumer confusion..

Fischer’s only evidence of actual confusion was an undated review on the Brushy Mountain website complaining: “The first bottle I bought last year worked well but this new stuff was a complete waste of time and money.” But there was no evidence that the commenter ever bought Fischer’s product, as opposed to two different bottles of the replacement product; defendants submitted an affidavit stating that the review was posted two and a half years after Brushy Mountain stopped selling Fischer’s product.

The New York unfair competition claim is like a §43(a) claim, but requires “‘either actual confusion or a likelihood of confusion, and there must be ‘some showing of bad faith’ on the part of the defendants.” So that was a no-go too.

Note: why not a right of publicity claim?  Would the court’s CMI reasoning “this is a product name, not an author name” also apply there?  Would there be any other defense?

The magistrate also recommended tossing out Fischer’s false advertising claim, which was based on the statement, “For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own. This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go® and it smells good!”  Fischer primarily argued that “our own” was false, because they bought a third-party product, though he also claimed that “the third-party manufacturer makes nothing but cleaning products, calling into question if the product is even food-grade, let alone ‘100% Natural”’  Furthermore, the only thing one defendant said about whether the product was “actually natural” in deposition was “I assume so.”  Given where the burden of proof lies in a private false advertising claim, this wasn’t enough to proceed on the 100% natural claim, even though it was material.

As for “our own,” that wasn’t literally false; while it could mean that defendants selected the ingredients and personally created the product, but “another reasonable interpretation is that defendants marketed a natural honey harvesting product, from whatever source, under their brand name,” which was true. There was no evidence of consumer deception, even though Fischer testified that unnamed competitors had responded to the ad by making their own knockoffs—even if knockoffs emerged, that didn’t mean the ad caused them, or that consumers were deceived.

ISP fails to dismiss (c) and CMI claims based on watermarked photo

Goldstein v. Metropolitan Regional Information Systems, Inc., 2016 WL 4257457, No. TDC-15-2400 (D. Md. Aug. 11, 2016)

Goldstein is a professional photographer who registered a copyright in a 2007 photograph he took of the Silver Spring Metro Station, which appears on his website with the watermark “© www.goldsteinphoto.com” centered at the bottom of the image.  Defendant MRIS runs an online real estate listing service that allows subscribers, mainly real estate brokers, to post listings for available properties for a fee. Subscribers agree to assign to MRIS the copyright in any photograph they upload to the database.  In 2014, Goldstein learned that his Metro Photograph had been uploaded to the MRIS database, still with Goldstein’s original watermark, but also the additional watermark “© 2013 MRIS” or “© 2014 MRIS,” depending on the year the image was uploaded.  Despite notice from Goldstein’s attorney, the photo allegedly continued to be displayed on/uploaded to the MRIS site during 2014 and continuing into 2015, at which point the MRIS watermark was updated to “© 2015 MRIS.” Goldstein alleged that, as a result, the Metro Photograph was uploaded to additional real estate websites and used in additional real estate promotional materials without his permission.

Goldstein sued for infringement, contributory infringement, violation of the DMCA’s CMI provisions, and violation of the Lanham Act. Easiest bit first: Goldstein alleged that MRIS’s addition of its own copyright watermark to the Metro Photograph was a false representation under the Lanham Act. Although this sounds like a false advertising claim, the court found it Dastar-barred: Dastar held that “claims of false advertising and trademark infringement under the Lanham Act do not overlap with copyright claims” because “origin” means physical origin, and because otherwise plaintiffs could create a kind of perpetual copyright or patent.  “Thus, ‘creative’ works, those artistic creations that fall within the ambit of copyright law, necessarily fall outside the scope of the Lanham Act.”  This is overstated in some significant ways, but query whether anyone’s found a way to say it better.

Direct infringement: MRIS argued that Goldstein didn’t allege “volitional conduct” by MRIS, relying on Costar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir. 2004). Direct infringement requires “actual infringing conduct with a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner himself trespassed on the exclusive domain of the copyright owner.”  In Costar, LoopNet was a passive ISP that could not be held liable for direct infringement of Costar’s copyright when Costar’s unmarked photographs appeared on its website, even though it engaged in cursory screening of photos.  The court here, however, distinguished Costar as having been decided on summary judgment.  Goldstein alleged that MRIS or an agent of MRIS uploaded the Metro Photograph.   In one exhibit, the photo appears in a slide in a slideshow that was available on the MRIS website, which didn’t contain any reference to a particular real estate agent or broker, or to a particular property. “Drawing all inferences in Goldstein’s favor, this Exhibit, particularly with the markings added by MRIS, supports the reasonable inference that MRIS or its agent, rather than an outside user of MRIS, engaged in direct infringement by copying Goldstein’s copyrighted photograph to its website.”

So far, so good, but the court goes on to say more things that ought to be disturbing.  The court also distinguished Costar because “(1) when MRIS received it, the Metro Photograph, on its face, was marked as copyrighted by Goldstein; (2) MRIS, unlike LoopNet, took the affirmative step of marking the Metro Photograph as subject to its own copyright; and (3) MRIS then copyrighted its entire website, including the Metro Photograph.”  [The court here means “registered” for (3), and this conflation pervades the opinion, including the treatment of (1)—after 1978, all original works are “born” copyrighted, so if you see a modern photo you know it’s “copyrighted,” though you may not know who owns the copyright or whether it has been licensed or whether a fair use is being made.]   (2) is probably bad business practice, but it’s likely as automatic as many other activities that have been held not to strip ISPs of the DMCA safe harbor, when the court gets around to that.  Anyway, I’m not sure why any of these three facts makes MRIS’s conduct “volitional” if Loopnet’s wasn’t.  The court said that “MRIS doubly asserted a copyright in the Metro Photograph by stamping that facially copyrighted photograph with its own copyright markings and then copyrighting the entire website containing that photograph,” but that’s still not “volitional” conduct implicating the rights protected by copyright, under Costar.

Further comment: It seems really, really unlikely that MRIS uploaded the photos, as opposed to a MRIS user.  Should my prediction prove true, should MRIS get its attorneys’ fees for defending the direct infringement claim?

Contributory/vicarious infringement: contributory sufficiently pled; vicarious not.  MRIS knew or had reason to know of Goldstein’s copyright, because “[w]here works contain copyright notices within them, as here, it is difficult to argue that a defendant did not know that the works were copyrighted,” and when MRIS got Goldstein’s C&D, it knew or had reason to know of the infringing use.  And

MRIS’s practice of adding its own copyright to the Metro Photograph, a practice it continued even after being placed on notice that the Metro Photograph was being used on its website without Goldstein’s permission, can reasonably be considered ‘conduct that encourages or assists the infringement.’ For example, the addition of the MRIS copyright markings could lead MRIS users to believe that they had a license to use the Metro Photograph in their listings as part of their subscription to the MRIS service.

Though MRIS asserted that it promptly removed each reappearance of the photo, that wasn’t enough on a motion to dismiss, and its continued reappearance was enough for contributory infringement [in the absence of the DMCA].

Vicarious infringement/inducement: MRIS likely had the right and ability to control the infringing activity and charged a fee to post listings on its website, “the website has as its main purpose the posting of real estate listings, a purpose distinct from trafficking in infringing material. It is therefore not reasonable to conclude that the availability of infringing photographs such as the Metro Photograph drew customers to subscribe to the MRIS service.” The inducement claim failed for similar reasons.

Compliance with the DMCA, the court further held, was an affirmative defense not suitable for resolution on a motion to dismiss.  And here it gets even worse, though presumably the court could at least fix this on summary judgment: the court suggests that the copyright notice on the photo might trigger actual knowledge that using the photo would infringe “a copyright.”  How is that actual notice, especially given an automated upload?  Moreover, the statutory provision that noncompliant DMCA notices don’t give actual knowledge would seem to preclude this reasoning, since a watermark is a far cry from a DMCA notice with all the relevant information.  And again, the court suggested that MRIS’s addition of its own watermark went beyond “storage at the direction of a user of material that resides on a system or network” to “affirmative appropriation of another’s copyright.”

CMI violations: Goldstein alleged violations of § 1202(a) and (b). §1202(a)  makes it unlawful for a person to “knowingly and with the intent to induce, enable, facilitate or conceal infringement provide copyright management information that is false.” §1202(b) prohibits a person, “without the authority of the copyright owner or the law,” either to “intentionally remove or alter any copyright management information” or to “distribute” work “knowing that copyright management information has been removed or altered …knowing or ... having reasonable grounds to know that it will induce, enable, facilitate, or conceal an infringement.”  Again, the complaint adequately stated a claim, though the court commented that Goldstein could only recover once for a §1202 violation.

MRIS unconvincingly argued that the watermark wasn’t CMI because it didn’t meet the requirements for a full copyright “notice.” §1202 doesn’t require that.  §1202(a)’s requirements were satisfied because MRIS allegedly added its own copyright watermark to the photo without owning the copyright.  MRIS argued that it had a copyright in the database as a whole, thus had a good faith belief that its watermark wasn’t false.  That didn’t work because of (1) Goldstein’s watermark and (2) the procedural posture of a motion to dismiss.  MRIS argued that its watermark wasn’t added knowingly and with the intent to facilitate infringement, because it was added “automatically” to all images uploaded to their site, but again that’s not an argument that works on a motion to dismiss, and anyway Goldstein’s C&D provided actual knowledge.

§1202(b): MRIS argued that it didn’t “intentionally remove or alter any copyright management information,” since Goldstein’s watermark was left intact.  The court, however, declined to dismiss Goldstein’s claim that adding CMI was “constructive” alteration of his own CMI, since it had “more visual impact” and “undercut[]” the message that Goldstein owned the copyright. There was no case law either way on constructive alteration of CMI, but, “[p]articularly where MRIS’s copyright mark was placed immediately before Goldstein’s copyright mark and used more recent dates, that mark could be construed as trumping, diluting, or superseding, and thus altering, Goldstein’s CMI.”

Photo finish: allegedly unauthorized (c) sublicensing isn't false designation of origin

Photographic Illustrators Corp. v. Orgill, Inc., 2015 WL 4572296, No. 14-11818 (D. Mass. July 29, 2015)

 

PIC specializes in commercial photography.  It took photos of lighting fixtures manufactured by nonparty OSI.  Defendants Orgill and Farm & City Supply distribute OSI products.  PIC sued them for copyright infringement; violation of the DMCA’s CMI provision, §1202, and false designation of origin/false advertising.  Here the court kicks out everything but some copyright infringement claims.

 

PIC licensed OSI to use photos of OSI products, with a non-exclusive, worldwide license to use, sublicense, and permit use, except that OSI couldn’t sublicense images “in exchange for valuable consideration such as a fee (e.g., as stock photography).” The licensing agreement also provided: “To the extent reasonably possible and practical, OSI shall ... include a copyright notice indicating PIC as the copyright owner and/or include proper attribution indicating Paul Picone as the photographer for Images Used by OSI.”

 

Orgill is a wholesale distributor for OSI, and used product images from “e-mail, Dropbox, OSI’s external website, or OSI’s internal web server.” Whether Orgill knew about PIC’s license to OSI was disputed.  OSI conducted twice-yearly reviews of its product images for five years and never challenged the way OSI images appeared.  After PIC sued, OSI and Orgill executed a confirmatory copyright sublicense agreement, effective nunc pro tunc as of June 1, 2006.  The sublicensing agreement also included a provision obligating Orgill to include and instruct its sublicensees/dealers to include, “to the extent reasonably possible and practical with respect to size, prominence, aesthetics, and Use, a copyright notice indicating PIC as the copyright owner of the Images.”  It further covenanted not to remove any copyright notice before distributing images.

 

Farm & City Supply is one of Orgill’s dealers: Orgill uses an ecommerce platform that creates an online store, which dealers then brand and publish with their own names.  To do so, dealers pay a flat $750 setup fee and a monthly fee. Dealers can get pictures from the platform, including the PIC images, but it’s disputed whether these fees cover those pictures.  Orgill also has a product information library on an FTP server, from which dealers may download product images and other data after receiving a secure login.  There’s no additional fee for using the server. Farm & City got the images at issue both from the FTP server and the ecommerce platform.

 

For a time, Farm & City placed a watermark reading “farmandcitysupply” across the images appearing on its eBay storefront.

 

Defendants bore their burden of showing that OSI impliedly licensed Orgill’s use of the images, given their longstanding business practices and OSI’s repeated twice-yearly review of Orgill’s catalogues.  The remaining question was whether Orgill’s use of the challenged images exceeded the scope of that license, because OSI couldn’t give Orgill more rights than OSI itself had.  The PIC-OSI license barred sublicensing in exchange for valuable consideration, and required attribution “[t]o the extent reasonably possible and practical.” 

 

Disputed questions about the fee and attribution precluded summary judgment on infringement. As to the fee, the fact that Orgill provided free FTP access “does not diminish the fact that those images were available in another forum only following an initial payment.” Orgill argued that the fee it charged didn’t depend on how many images customers downloaded, or whether they downloaded images at all, but the fact that Farm & City paid the fee to get a bundle that included the images precluded summary judgment.  (I’m not entirely clear what legal standard the factfinder is supposed to use to resolve the dispute.)

 

As for attribution, defendants argued that it would not have been “reasonably possible and practical” to include attribution on the images, because Orgill typically “crop[s]” product images “for tighter fit.”  The court wasn’t impressed.  Since the lawsuit, Orgill includes some attribution on OSI images in the form of a “sidenote or footnote for images appearing on websites and in catalogs.” “While it may not be practical for the defendants to include PIC’s full-sized copyright notice, PIC need not demonstrate as much to defeat a motion for summary judgment.” It was enough to show that there was no attribution, but that defendants “have apparently been able to include at least some attribution since learning of PIC’s copyright interest in the images.”  There were also factual issues about whether Orgill knew of PIC’s existence and its copyright interest in the images before the lawsuit, which also precluded Orgill’s innocent infringement defense. [I assume further proceedings will address whether this breach of the license actually results in infringement, or just breach.]

 

On innocent infringement, Orgill submitted evidence that it had never heard of PIC until the onset of this lawsuit and that, at all relevant times, it believed its use of the images was licensed.  But Orgill’s testimony contradicted the terms of the sublicensing agreement, which purportedly codified the terms of a pre-existing agreement between Orgill and OSI, and which included a covenant to include “a copyright notice indicating PIC as the copyright owner of the Images.” [Comment: Yikes!  The confirmatory sublicense leaves Orgill worse off than it was with just an implied license!]  “Orgill cannot have its lightbulb and eat it, too – either it always knew that PIC existed and that there were certain limitations on its use of the images, or else Orgill did not then, and does not now, know of any such limitations.”  [Well, presumably it knows now.  I understand that the confirmatory sublicense was poorly drafted, but let’s get real—isn’t the most likely scenario that Orgill didn’t know that PIC existed, but believed that OSI had the right to allow it to use the OSI images, whatever their ultimate source?]

 

Farm & City, however, prevailed on its innocent infringement defense, limiting its potential liability for statutory damages:

 

Farm & City submitted undisputed evidence that it did not know PIC existed until this lawsuit was filed, that it obtained all of the images at issue from Orgill free of copyright markings, and that Orgill never advised it of any limitations on its use of the images. Moreover, since Farm & City was not party to the sublicensing agreement between OSI and Orgill, there is no indication whatsoever that it might have been aware of its duty to attribute the images to PIC.

 

PIC also alleged violation of §1202’s prohibition on the provision of false CMI. Farm & City allegedly violated 1202(a) by adding a watermark reading “farmandcitysupply” to some images for use in its eBay storefront. Further, PIC claimed that both defendants removed or altered PIC’s CMI in violation of § 1202(b) before distributing the images.

 

Farm & City prevailed as a matter of law.  “Farm & City prevails as a matter of law on this issue. To be liable for adding false CMI under § 1202(a), a defendant must intend to ‘induce, enable, facilitate, or conceal infringement.’”  Undisputed testimony explained that the watermark “allows whoever is buying the product to know that they’re buying it from Farm & City Supply,” thus helping to “differentiate yourself from other sellers” and “increase your sales and make money.”  PIC argued that this amounted to a claim of authorship of the photos, but even if so, “Farm & City did not intend to “induce, enable, facilitate, or conceal infringement,” since it did not know of PIC’s existence until this lawsuit was filed and was unaware that it had any attribution obligations.”

 

Nor did PIC submit evidence to support its claim of CMI removal.  There was no evidence that either defendant ever received images with CMI; rather, the record indicated the contrary.  PIC said that its photographer put PIC attribution with every image he gave to OSI, thus justifying the inference that the defendants removed the CMI. “Given the existence of a third party that has not been deposed and is otherwise absent from the case, it would be too speculative to infer that Orgill removed CMI,” and even more so with Farm & City.

 

PIC also alleged that Farm & City violated §43(a) by putting the “farmandcitysupply” watermark on the images, constituting false designation of origin and false advertising.

 

False designation of origin: No.  Dastar.  (I hope the court awards fees.  But it might not, because there are a few cases out there that egregiously misread Dastar and allow similar claims to proceed past a motion to dismiss, even though the pixels/bytes produced by Farm & City were not the pixels/bytes/images produced by PIC, which would be required for true reverse passing off under Dastar—Dastar directs our attention to the entity that produced the copy at issue (here Farm & City, at least with the assistance of eBay), and not to the entity that produced the initial creative work subsequently multiplied in copies.)  PIC argued that, by adding the watermark without otherwise changing the images, Farm & City engaged in mere repackaging of the images and thus in reverse passing off.  The court, despite its jarring willingness to entertain PIC’s argument, ultimately disagreed.  Dastar says that “origin of goods” refers to “the producer of the tangible goods that are offered for sale.” Nothing in Dastar “suggests that the Lanham Act provides a cause of action even where the misrepresentation in question did not concern the source of a tangible good for sale to the public.” 

 

The tangible good for sale here is OSI’s lightbulbs.  As Dastar held, “[t]he consumer who buys a branded product does not automatically assume that the brand-name company is the same entity that came up with the idea for the product, or designed the product – and typically does not care whether it is. The words of the Lanham Act should not be stretched to cover matters that are typically of no consequence to consumers.”  Similarly, customers on eBay want to buy lightbulbs, and aren’t interested in the author of the product images. “There is no record evidence that any consumer believed that Farm & City’s watermark indicated ownership of the photographs that depicted the lightbulbs.”

 

False advertising: the court also joined the consensus that plaintiffs can’t save a Dastar-barred §43(a)(1)(A) merely by repleading the same facts under §43(a)(1)(B).   Authorship does not constitute part of the “nature, characteristics, or qualities” of a good for sale.

Copying graffiti could infringe copyright and trademark

Williams v. Roberto Cavalli S.p.A., No. 14-cv-06659 (C.D. Cal. Feb. 12, 2015)

 

Plaintiffs Jason Williams, Victor Chapa, and Jeffrey Rubin sued the producers and distributors of Just Cavalli clothing, alleging copyright infringement, removal and alteration of copyright information (CMI) under §1202, unfair competition, and negligence. Some of the defendants moved to dismiss all claims but copyright infringement, and failed (even though it will ultimately be pretty hard to show that the distributors had the requisite knowledge under §1202 for CMI removal; a more targeted attack on that issue might’ve asked whether that knowledge was plausibly pled).

 

The plaintiffs alleged that they were well-known and respected graffiti artists who created a mural in San Francisco that contained signature elements identifying them as the creators. The mural depicted the stylized signatures of “Revok” and “Steel,” pseudonyms associated with two of the plaintiffs, against a background of “revolutions” imagery, allegedly publicly recognized as the third plaintiff’s signature style.

 

Mural, from complaint

Defendants allegedly used high-resolution photography to obtain images of the mural and placed the images on a collection of Just Cavalli clothing.  While the “revolutions” imagery was intact, the Revok and Steel signatures were rearranged and indiscernible. 

Examples of Just Cavalli clothing

On some items, the brand name “Just Cavalli” was superimposed over images from the mural, allegedly intentionally designed to “induce, enable, facilitate, or conceal” the infringement.

 

Just Cavalli clothing with Just Cavalli name added

On the CMI claim, the court concluded that the artists’ signatures under their pseudonyms counted as CMI, even though they weren’t provided through a digital technological process.  Further, it was sufficient to argue that defendants removed CMI by copying only part of the mural, so that “the signatures of Revok and Steel are chopped and rearranged to such an extent that they are not recognizable.”

 

Unfair competition: The third plaintiff, Chapa, alleged that his “revolutions” imagery functioned as “product packaging or logo.” Defendants argued that Dastar precluded this kind of claim, but the court concluded that Chapa’s claim alleged passing off, not reverse passing off, because he alleged that the use of his “revolutions” imagery created the “false and deceptive impression that the Just Cavalli garments and accessories are associated with and/or manufactured by [Chapa] and Plaintiffs.” Designs can be protected by both the Lanham Act and copyright law.

 

Because Chapa adequately pled his Lanham Act claim, his California statutory and common law claims also survived.

Next Great Copyright Act Conference, quasi-copyright

Quasi-Copyright Reforms

Moderator: Hank Barry, Sidley Austin

Rebecca Tushnet, Georgetown Law School

I’m going to talk about managing the interface between copyright and several other rights—in the very first panel of the conference, Wendy Gordon reminded us that various doctrines channel some claims to copyright and others to patent.  I’m going to briefly cover both quasi-copyright rights and their interaction with copyright and also what I’ll call marketing value IP rights and their interaction with copyright.

Two quasi-copyright rights: 1201 and 1202. 

1201 anticircumvention: a disaster.  1201 trips up people who are trying to do the right thing, and doesn’t trip up people who are trying to do the wrong thing. The exemption rulemaking every three years is a bonanza for those firms that charge their clients by the hour and a nightmare for everyone else.  We start preparing for the next round as soon as we finish the last.  We elect presidents less often than we have 1201 exemption proceedings.  In real copyright reform, 1201 should be eliminated and ordinary secondary liability allowed to do any necessary work.  If not, at the very least exemptions should not expire.

1202 copyright management information: starting to see increasing use—sometimes the pattern with a new legal right is that it remains in relative quiet for a while and then is discovered, which may be happening here.  1202 has differential effects depending on medium, because some kinds of copying are inherently likely to preserve CMI and others aren’t: earlier this week, for example, Boatman v. United States Racquetball Association allowed a 1202 claim to proceed to trial based on garden variety infringement of a photograph.  New lawsuits against ordinary reproduction of photos also are starting to include allegations of removed CMI because the way information is attached to photos means that it is very easy to copy the photo without copying the CMI, intentionally or not, and intention is often not an issue that can be decided early on in a case.  E.g., Kelly v. Arriba Soft. Depending on how 1202(b) is read, it’s possible that liability for removing CMI can attach without any underlying copyright infringement, just as it’s possible to violate 1201 in the course of making a fair use. 

My challenge: Has the CMI provision ever been used independently of an infringement case in an appropriate situation?  Was 1202 just another bad congressional prediction about what technology would enable and/or require?  It’s notable that 1202 concerns exactly the information that we expect to get out of the “copyright hub,” but I haven’t heard anyone discuss 1202 as something that is enabling us to get to that solution.  Copyright owners already have the necessary incentives to provide that information. Nor, if we really do want to use CMI as part of automated systems, is it sufficiently clear that 1202 is only for that. I don’t see the current cases as covering instances in which CMI would have assisted in enabling detection of infringement.  Instead, 1202 claims force courts to decide if having a copyright statement on the terms of service page of a website operates as CMI for a poem found on another page on the same site (Personal Keepsakes case, N.D. Ill.), or if a photo credit on the back of a record album is sufficiently connected to the cover photo to count as CMI (Levyfilm v. Fox Sports).  If we do open DMCA issues up, this is a looming one. My suggestion: replace with direction to the Copyright Office to study CMI issues and the power to make rules (and not on a three-year cycle, either).

The other quasi-copyright claims on my agenda are two marketing value rights, the TM/copyright interface and the right of publicity.  These are preemption issues. Conflict preemption and preclusion operates along with §301 and §301 should also be rewritten to the extent necessary to make that clear. 

Dastar said that “origin” in the Lanham Act meant physical origin, not origin of ideas, and that copying an uncopyrighted work was allowed by the copyright law and should not therefore be interfered with by trademark law.  This is preclusion, or as Mark McKenna has called it, channeling.  In the more distant past, Sears and Compco were very clear statements from the Supreme Court that states could not make it a violation of trademark law to merely do that which one was entitled to do as a result of patent law’s negative space, which is to say copy an unpatentable (or patent expired) article.  States could require labeling, but could not prohibit the copying itself on the theory that mere copying was deceptive.  The same result should follow for copyright law, and ideally would be made explicit: it’s not a violation of trademark law to produce a communicative work whose subject is out of copyright.  This would make the Betty Boop trademark case very easy, and have effects on Warner v. X One X (leaving Warner only with copyright claims based on copying elements of The Wizard of Oz and Tom & Jerry that weren’t contained in the copyright-expired promotional materials). 

But courts are at least patchily working their way towards these conclusions now. Legislation could confirm the trend.  The real preemption problem is the right of publicity, where courts (mostly the 9^th Circuit) have created rights that directly interfere with copyright owners’ exclusive rights.  The doctrine on this is metaphysical, and badly so, attempting to distinguish an uncopyrightable persona from copyrightable works depicting that persona in the service of controlling the use of copyrightable works. Among other things, this is like saying that because the natural world is uncopyrightable, there’s no conflict preemption problem with a state law right that bars people from commercially exploiting their copyrighted pictures of the natural world, where commercial exploitation includes selling their photos or paintings for decorative purposes.  Just recently, this head-scratcher created yet another tangled loop in Garcia v. Google that distracted from the main issue there.  I’m not a big fan of federalizing the right of publicity, but we should federalize its limits: nonadvertising use of material that is authorized by the copyright owner or by copyright law should be outside the scope of the right of publicity because of its conflict with the objectives of copyright law.

Glynn S. Lunney, Tulane Law School

Where is the radicalism at this Berkeley conference? Maybe copyright doesn’t need radicalism. But we seem to think copyright law isn’t achieving its objectives very well. When was the last great copyright act?  The DMCA?  1790 was pretty good, downhill since then. Protects too much too broadly for too long.  Let’s put more on the table.

The next great copyright act should abolish copyright.  A lawyer who is planning to settle doesn’t start with the drop-dead offer.  Compromise is the end, not the beginning.  Also, he believes we might be better off with no copyright than the Copyright Act we have—long story of public choice inaction leading to law that enriches only a handful at the expense of the rest of us. Would the world look radically different?  Coase: the parties will bargain; the government gets it wrong.  People can work together and contract around a no-copyright rule. Most copyright infringement cases he dealt with were between former partners—architect/client, songwriter/publisher. Converting copyright to contract would be trivial.

Might make difference for stranger infringement, historically anyway.  But now there are EULAs.  Contract could accomplish a lot of what we do today. And it would eliminate need to fight about statutory damages.

Coase cuts both ways. If we get too much copyright from the gov’t, private markets can fix that too.  If you really believe in markets, the private sector can fix it anyway.  Creative Commons = one way. iTunes dropped its DRM. Free & open software. But not universal yet.  Why? Some are not market transactions in the sense we ordinarily think; we don’t want the relevant value commodified. Fair use parodies: we don’t think licensing will work well.  In terms of well-commodified terms still not working well: (1) markets for these works aren’t generally very competitive.  Price competition: all movies $7.50 (lower cost of living in New Orleans, I guess); all iTunes songs $.99 (actually, now it’s $.69, .99, and 1.29, but I take the point). (2) Consumers have limited time/cognitive resources; hard for them to adjust on the fly.  (3) Externalities, such as those imposed by bans on reverse engineering.

Jason Schultz, NYU Law School

Patent and copyright background.  Patent lawyers are stereotyped as more conservative/nerdy, but they’re kicking our ass in legislative reform. We might want to codify some things to be clear, and others to have flexibility. Kirtsaeng: we got there, whether you agree or not—the statute helps in some ways, but interpretation is also important.  What if we took the common law of copyright misuse and nailed some of them down in the statute?  The more some restrictions end up in terms & conditions the more we might want statutory confirmation of rights.

Anticompetitive issues: interoperability, accessing facts/ideas, fair use. Anti-cheating clauses (MDY v. Blizzard).  Information that allows repair by you or third party.  Medical Justice: forms for drs/dentists that claimed copyright in your reviews. Datel flash drives for backing up Microsoft game data.  Anti-exhaustion/anti first sale clauses not just with software and CDs, but also on iPhone/other mobile devices, related to jailbreaking.

All sorts of cases where we might want to address these quasi copyright concerns, because they’re rarely ordinary infringement claims.  Instead it’s interference w/contract or some other concern.  Basic unconscionability doesn’t seem to get the job done, even though these mass market contracts are procedurally unconscionable. Preemption under current §301 and conflict models is insufficient. We could recraft misuse as preemption if we wanted.

To the extent we ID things that are solely for individual benefit, ok, but we shouldn’t necessarily allow people to contravene public policy by private agreement, clickthrough or not.

§301 is just about rights; nothing about defenses.  What if we said we should have an equivalent for conflicts with state attempts to restrict exceptions and limitations?  This would allow us to avoid identifying particular state issues or particular anticompetitive uses in the statute.  Could also allow “fair” breach of contract where copyright law allowed the conduct for public policy reasons/where the copyright is being misused; could allow actual damages from breach but not prevent it.

Could also do something better than §512(f) where there is an abuse of license; create an affirmative claim. Compulsory license = remedy for abuse, or even statutory damages. Copyright trolling where people exploit the power differential with individuals.

Fred von Lohmann, Google Inc.

Quasi-copyright: live in Title 17 but not really part of traditional system: bootleg rules, 1201, 1202. Doesn’t participate in full set of rights/exceptions/limitations.  Droit de suite.  Also TM claims that abut/interfere with copyright; right of publicity; contract crashing into copyright has created quasi-copyright issues as contract starts to look like right against the world. Also, pre-1972 sound recordings is an emblematic example of quasi-copyright, though not in Title 17—but like others, cause trouble to no one’s ultimate benefit.

Most of these: striking how incomplete they are.  When you look at antibootlegging provisions or even 1201, you have a large body of nuanced copyright law with detailed remedial schemes, registration requirements, limitations and exceptions; when compared to Ch. 11 with no limits/exceptions and enormous ambiguity, we would have been a lot better off with the rest of Title 17 instead of this incompleteness. Similarly with pre-1972 sound recordings: what does state law protection entail? Is there a public performance right? Is there secondary liability? Who knows?

Intermediary liability is where the rubber meets the road for the reality of these provisions. Imagine that §107 were to disappear tomorrow. The day after, YouTube would look pretty much unchanged.  Because the users wouldn’t know—they don’t know §107 today.  If you changed intermediary liability, though, you’d see prompt, immediate, radical changes across platforms. If you care about how copyright is experienced/how it orders the market, you should care a lot about intermediary liability.

1201’s antitrafficking provisions: is that secondary liability? One could argue it is.  Gordon v. Nextel: court just assumed that all copyright rules, including secondary liability, also applied to 1202—what would that look like, though?  Antibootlegging: not clear whether there’s secondary liability; what’s its scope?  How can a provider distinguish a live musical performance from something that’s not covered by Chapter 11?  Pre-1972 sound recordings are currently in litigation, and the cases have come out different ways. One ruling found them to fall within the DMCA safe harbor. Vimeo and Grooveshark cases found that they didn’t because they aren’t part of federal copyright law.  If you think it’s hard to figure out who owns a sound recording, try figuring out when it was made.

Of course it would be nice if we could federalize them, which would fix the problem. But we need not wait that long. 

(1)   We shouldn’t have any more quasi copyright law. Could absorb bootlegging into basic features of Title 17.  Do we really want islands in the body of copyright that aren’t of the body of copyright.

(2)   Or we could try to complete them. Think about limitations, remedies, secondary liability.

(3)   Make preemption more sensible so we know where the lines are drawn between TM/copyright/contract.

(4)   512 has resulted in a lot of people reframing non copyright claims as copyright claims in order to get the power of notice and takedown, and that’s creating a lot of tension. Consider whether 512 was for these edge cases

Barry: would contract be more complicated than copyright?

Lunney: yes, but entire destruction of copyright not likely. Antitrust may be most plausible; misuse may have some potential but hasn’t gotten very far.

Wendy Gordon: why little mention of moral rights?  Doing things with a copy = proper domain of quasi-copyright.  Distribution right blurs the line.

RT: not active, which has to do with distaste for touching §107 and if you don’t do that it’s pointless to talk about moral rights.

Q: we see more reform in patent because patent is formalized—int’l effort, formalities?  Little int’l harmonization of copyright by comparison.  Also wonders about effect on other areas of copyright that haven’t been hit by the digital revolution—design copyrights.  Likes statutory damages—they’re effective for industrial designs.

Von Lohmann: disagrees w/premise: enormous int’l harmonization via WIPO, free trade, multilateral negotiations.

Schultz: patent reform crowd has its act together.  Some is politics, but also hard work organizing people and getting them to speak out—programmers, entrepreneurs, small businesses. Trolling may be worse but also better publicized. We have stories to tell too.

Von Lohmann: whatever else you can say about design copyrights, they are copyrights and we know what the rules are for intermediaries etc.

Q: we were doing well under 1909 Act and a lot of quasi copyright comes from calls to harmonize—especially 1101/bootlegging, which may not even have fair use/duration.  See calls to harmonize for things like database rights and other quasi-copyright rights. So we could start trusting our own judgment and not that of the EU.

RT: I don’t think that’s driving Congress. We ignore int’l law when we want to.

Von Lohmann: need more discussion of harmonization. But we have laws that result from int’l treaty obligations, like Ch. 11 and 12, and he isn’t as optimistic as Tushnet to say that we violate our treaty obligations when we feel like it.  We need to talk about reopening these treaties.

Schultz: Australia, Israel, Canada doing work. There are allies if we want to push back.

RT: first, we need to accept implementations of the kind that we deem appropriate for ourselves.