Columbia Fair Use conference: Panel 2

Panel 1 was mine; notes on it later, when I've written them up.

Panel 2: The Statutory Factors Reconsidered

Moderator: June Besek

Barton Beebe: Beebe summarized his empirical study on the role of the factors. Reminder to us: transformativeness is probably overrated academically, given its less prominent position in the decided cases. He found no real relation between judicial ideology and fair use outcomes.

Robert Kasunic: Not giving us the official position of the Copyright Office; he took the day off to come here. He wants to find a normative purpose for copyright, which will help us with fair use, which isn’t an ancillary doctrine but an integral part of copyright. The Court has told us that copyright’s purpose is to incentivize authors to create and disseminate works to the public.

How can the second factor assist in this goal? Court cases suggest it’s not that important. Kasunic wants us to reevaluate its scope and purpose. It shouldn’t just be published/unpublished and factual/fictional. Harper & Row led to rigid, deterministic analysis for unpublished works; in published work cases, courts just looked at factual/fictional. We might ask what types of incentives this type of work needs to get created (that could also be a factor four inquiry). The Sega case involves close attention to the type of work – a computer program, which required a different kind of copyright analysis.

Next, after looking at the general, we could ask where a work falls within its category. We can learn more about customary and traditional markets, and the reasonable expectations of authors prior to their creation of a work – what was their incentive to create? Different classes of works are represented by different industries with varying practices and licensing mechanisms. We should ask about a fair return, a return that was enough to provide the incentive to create, not all possible returns. And we also can look at whether there’s a divergence of interests between the initial author and the current owner; if the incentive function is designed to get authors to create, then incentives for the transferee are only indirectly relevant.

Joseph Liu: Seeking modest improvements in predictability within the existing statutory structure. What if we just asked about the purpose and character of the use and the effect on the market, turning it into a two-dimensional balancing test? Kasunic wants to rehabilitate the second factor, and Liu to kill it off. Many cases already deemphasize the second and third factors; Beebe’s work confirms these factors rarely drive results. But expressly abandoning 2 and 3, which often serve to frame the analysis, might allow courts to consider user and copyright owner interests more directly and calibrate their intensity.

Perhaps this would also help intrafactor doctrine. To some extent, courts have looked at types of market harm, but factor one analysis could also be deepened, looking at the types of artforms at issue (documentary, rap) and the benefits of various uses.

Liu largely agrees with Kasunic about the diagnosis, but the remedy (get rid of factor two, removing information versus enhance it, adding information) is where they diverge.

June Besek: How should we be weighing predictability v. nuanced analysis? If you want clarity, you need guidelines. Would removing factors 2 and 3 be any help? People rarely get bogged down in 2 and 3.

Liu: You’ll always have to pick a point on the spectrum between flexibility and security. He admits that his proposal is a thought experiment. Indeterminacy, like the poor, will always be with us. His idea is that stripping out extraneous factors makes it less difficult to think about and predict fair use situations.

Besek: If you get rid of the unpublished nature of the work, you’ve reduced everything to an economic decision about when to publish.

Liu: Yes, and that’s my normative bias.

Beebe: There are a lot of close cases, but if you look at the reversal/appeal/dissent rates, fair use case law is exactly in line with every other area of law. So Beebe tentatively suggests that the case law is not the morass that it appears to be, at least the non-leading cases.

Tim Wu: A friendly question in an aggressive manner: Aren’t you all missing the point? If you believe that judges make up their minds first and give opinions later, then factor analysis is not that important. Then isn’t the real question the treatment of precedent, if we’re interested in predictability? That is, whether judges regard existing fair use cases as creating rules they have to follow in the specific, or the general – e.g., Campbell means that parody is fair use; Harper & Row means that scooping a soon-to-be-published book is unfair. This comes up in the Google cases: if a market emerges for something, can it change the result in Kelly?

Kasunic: Bias is a big problem, even if the judge has no intentions – people view copyright either as a property interest to be preserved or a more limited right that’s a means to an end. Predictability would require agreement on the purpose of copyright, which will always haunt the fair use analysis. Patterns and customs do matter – best practices in different categories of authorship may be the way to go, because you’re differentiating between types of works and uses.

Liu: Goldstein’s view is common-law lawmaking by the federal courts. If that’s right, precedent is key: how tight is the link between past and current cases?

Wu: It’s not clear that someone would be willing to bet the company on a two-factor test either. Predictability comes from precedent.

Ginsburg, for Kasunic: How do we look at markets and time? If the market didn’t exist at the time the work was created, then can the author ever claim a right to it? The market that didn’t exist in Kelly developed by Perfect 10. (Comment: I beg to differ; Perfect 10 didn’t show a general licensing market had developed, just that it had granted a license overseas.) Likewise, if an author writes a story because she feels a compulsion to write it, how do we take that into account if someone then wants to copy it?

Kasunic: It’s important to recognize if a work was created without reference to a market. If the market develops, that’s a windfall, which doesn’t cut in any necessary way but ought to be recognized. His analysis is a way of separating all possible markets, which is an unlimited category, from actual incentivizing markets. That may mean that a newly created work has a more expansive market expectation!

Jessica Litman: Kasunic’s reformulation lets us account for some things that we occasionally pull into factors one and four but shouldn’t. Barbie is an icon, 50 years old, and symbolizes a great deal about how we think about femininity and growing up in this country. She’s a much more appropriate target for commentary than one of the Bratz. Using Gone with the Wind or Barbie as your target is an important indicator for fair use (compare Koons’ use of an unknown photo).

Judge Leval: By the time judges come to discuss 2, they’ve already discussed 1, and they are already implicitly discussing both factors – transformativeness requires consideration of the nature, purpose and character of the first work in order to compare it to the accused work. So 1 and 2 together lead you to comparison.

Kasunic: That’s a reasonable way to approach it. The legislative history of 2 is scant, but some of the things Congress pointed to were the purpose and nature of the original work.

Beebe: His empirical numbers support this idea of merger between 1 and 2 taking place.

Matthew Sag: There’s fundamentally a limit to what we can deduce about fair use factors from litigated cases – the fact that a case didn’t settle makes it anonymous. Most of the impact of factor 2 may be felt somewhere else than the decided cases.

Q: In lots of publishing industries, people rely on factors 2 and 3 more than 1 and 4, so eliminating them would cause a lot of uncertainty!

Liu: good point, and he wants to consider that as part of his thought experiment. (Comment: transitions always cause problems! Just like a making available right would be a tough transition in the US where we’re used to dividing rights up.)

2 and 3 are more objective and less dependent on characterization by plaintiff and defendant. But do they help point us in the direction we want to go? Taking the entire work can be okay, if it’s a reverse engineering situation or Sony or Kelly. So you can get precision, but not accuracy, from using them.

Q: Richard Prince’s photos of Marlboro ads: How would they fit into this?

Liu: He believes that 1 and 4 provide almost all we need to know – market impact (which markets count?) and nature of the use (does the art-world reaction matter? Do we want to encourage appropriation art?). 2 and 3 don’t tell us very much – that the original work is an ad, but also a creative work, points in no particular direction, especially since appropriation art is generally going to appropriate creative works; likewise the fact that Prince copied the whole work doesn’t add much to 1 and 4.

Kasunic: He’d want to focus on the fact that the ad was an ad, to start with.

Paul Goldstein on copyright in context

Columbia Law School, Fair Use Symposium

Keynote Speaker: Paul Goldstein

Fair Use in Context

Fair use is notoriously tricky. Beebe counts 2.4 fair use articles for every court opinion over 1990-2005. There’s a fatal attraction to general theories of fair use. The law on the books grapples with the law in action (people’s copies made on the fly, etc.). In other countries, much of this falls under the head of fair dealing.

Why fixate on fair use and not idea/expression or originality? Fair use has the look of a constitutive doctrine, like takings in property or proximate cause in torts – a doctrine that reduces into a nutshell the foundational assumptions of the law itself. Fair use is a look into the gears of copyright.

The classic dilemma: theories are too broad to use for prediction, or too narrow to sustain fairness. The Classroom Guidelines are Dickensian in specificity, and yet they don’t help predict results for teachers operating outside them. Wendy Gordon’s classic article on fair use as market failure is as close as Goldstein thinks anyone has gotten to hitting the sweet spot between predictability and rigidity. Gordon’s third constraint – that awarding fair use wouldn’t hurt the owner’s incentives substantially – was necessary, but also problematic, as Gordon later recognized; it holds the possibility of unraveling fair use.

Without copyright, too little art will be produced; with copyright, too little art will be used. Gordon’s test asks courts to evaluate every partial market failure with an eye towards the incentive side. But perhaps instead of putting market failure at the center of the inquiry, we should put access interests at the center. (Though of course that doesn’t help predictability.)

Gordon later divided market failure into two categories: market malfunction and inherent market failure – the latter of which is where no useful markets can ever be formed. This category allows us to put nonmarket considerations in the balance. But it is still lacking in certainty and predictability.

Do we need a general theory of fair use? From most judges’ perspectives, the quest for general theory appears to be a (harmless) academic diversion. How can we expect real people to live in unreal houses? The statutory factors are abstract, unreal, and nonreflective of the circumstances under which authors create, publishers publish, and lawyers advise.

Fair use is pragmatic, but cases tend to cluster on patterns. Each cluster has its own equities and special considerations. For example: cases testing secondary liability for new technologies – photocopying, cable retransmission, home videotaping. What these cases have in common is (1) a new technology, (2) generally omitted from the Copyright Act, (3) which is in increasingly broad use by consumers, (4) thus increasing social value from the use, and (5) at least temporary high transaction costs. In Sony, the statutory factors weren’t all that important – the preamble was irrelevant to home taping practices; the amount of the work used was ignored because to apply it would mean that videotaping was never fair use; only the fourth factor mattered, with the Court finessing that factor’s fatal circularity by using burdens of proof. But the equities were dominant: the prevalence of VCRs by the time of the various opinions.

Parody offers a contrast, because the preamble matters, as well as the four factors. But it’s the categorical nature of parody that matters, not the factors themselves, given how the weighing and shaping of the factors differs in parody cases from their use in other cases. Neither the commercial/noncommercial division nor the public/private division have any weight here, but rather the user’s parodic purpose. As for the nature of the copyrighted work, the parody cases suggest that the published author deserves what s/he gets. The amount taken calibrates to the parody category – users should take what’s necessary to conjure up the original. And the market test asks whether this is a true parody or a derivative work. Is the author exercising a copyright owner’s legitimate right, or is this an attempted suppression – an abuse of copyright?

We should attempt to decide cases under relevant categories, rather than on the basis of factors imposed from outside. Categories can be identified/expanded: Reinhardt’s decision in Sega v. Accolade explaining why copying for reverse engineering is fair use. Sega was immediately recognized as correct, and Congress endorsed it later.

Beebe’s study can be read to support pattern-based adjudication. If courts don’t stampede the factors (read them to favor all one side or the other), that’s consistent with the idea that, depending on the case, only some of the factors matter. And if lower courts often ignore Supreme Court decisions and appellate authority, that may not be because they’re rebelling or incompetent but because ostensibly controlling precedent was from an inapplicable context. Fair use is not a novel, but a compilation of short stories loosely connected by a single question: what result should obtain when Congress has not spoken? Each story has its own equities and moralities.

Risks: categories may ossify. This danger is particularly salient in new technology cases, where transaction costs are routinely lowering. It’s important to recognize, as in Texaco, when licensing has become available. Another danger is that a slogan or catchphrase will be mistaken for a category – “transformative use” is a current example. Bill Graham Archives and Perfect 10 represent mindless soundbites triumphing over principled analysis. The mere transport of a work from one medium to another without abridgement or other modification is not a fair use category. Justice Souter and Justice Story would have found these infringing.

In new contexts, we will have to decide whether new categories are needed. Was Sega a “new technology” case? Not really, because it wasn’t about transactions costs. Also, the code in Sega was not published. It was an abuse of rights case. Courts may need to consult the equities and efficiencies of more than one category in deciding new cases; and over time, the cases will become a category in themselves, as Sega did.

Any considerations that will always apply? (1) Whether the accusing work comes from a Berne country. Fair use violates Berne’s requirement of certainty for copyright owners. Bill Graham Archives and Perfect 10 violate Berne, though of course the US can treat domestic authors as shabbily as it wants to. But is it right to give our authors protection below the international norm? American exceptionalism is not always a good thing.

(2) In giving advice, identify the category of use and read the relevant cases, then decide what the outcome should be. But deciding the appropriate category can be difficult.

No crying in basketball: losing defendant can't get "do over"

Baden Sports, Inc. v. Kabushiki Kaisha Molten, 2008 WL 238593 (W.D. Wash.): Previous coverage here.

Molten lost a big false advertising judgment to Baden based on false advertising of its “innovative” basketballs that, it appears, were not innovative and in fact infringed Baden’s patent. In this ruling, the court denied Molten’s Rule 50(b) motion to void the judgment under Dastar. The court reaffirmed its conclusion that “innovative” was not a claim of origin or inventorship, but a claim about the nature, characteristics or qualities of the basketballs themselves.

Some witness testimony suggested that the innovation claim was false because Baden actually created the design, but other testimony indicated the witnesses believed that the product was not “new.” The jury instruction explained, “Baden Sports claims Molten Corp. and Molten USA advertised their ‘dual cushion’ basketballs as a Molten innovation and they were not.” (Comment: this sure sounds like it’s an inventorship-based claim. “Innovation” is one thing; “Molten innovation” connotes origin of the idea, and could be false if the basketballs were in fact innovative, but not developed by Molten. At best, these jury instructions are confusing under Dastar.) The court found that, as presented to the jury, the false advertising claim didn’t founder on Dastar.

In addition, Molten argued that the jury instructions should have included an instruction on puffery. Not only did Molten fail to preserve this objection, it was wrong, because puffery is a question of law, not a fact question.

The court further rejected Molten’s argument that the jury verdict was contrary to the clear weight of the evidence. Baden’s CEO testifed that Molten’s ads that its dual-cushion technology was a Molten innovation would “absolutely” deceive a substantial number of consumers, and Molten offered no contradictory testimony. Baden also had evidence of materiality, in the form of testimony from the CEO and from a professor of marketing. The CEO and a senior sales manager also testified that Molten false advertising damaged Baden’s goodwill. No specific or quantifiable examples of harm or consumer confusion were necessary. The only evidence presented by the parties supported the jury’s verdict.

Finally, Molten argued that the $8 million damages award was grossly excessive and against the clear weight of the evidence. The jury instructions specified that if Baden proved intentional false advertising, Baden was entitled to Molten’s profits from the false advertising, with the burden on Molten to prove what portion of its profits were attributable to other factors. Baden’s witness testified that Molten’s profits could be measured by the amount Molten paid for its sponsorship agreements with FIBA and USA Basketball (basketball organizations). Under those agreements, FIBA advertised and promoted Molten’s “innovative” technology. The witness also testified that Molten’s formerly flat sales took off after Molten changed its balls’ exterior design and FIBA began promoting the balls. Molten paid over $21.5 million for these agreements, the net present value of which was $8 million – the amount of the jury award. Molten had arguments against the $8 million figure, but it had its chance with the jury.

Basically, Molten had a very bad trial, with much of its evidence excluded for pretrial shenanigans and its legal arguments unfocused. With new counsel, Molten wanted a “do over,” but the court was unwilling to grant it.

False advertising claim preclusion from agency proceedings?

Noble v. Draper, --- Cal.Rptr.3d ----, 2008 WL 257233 (Cal.App. 3 Dist.)

In a case of “employment relationships gone awry,” plaintiffs were allegedly induced to come to the US from Mexico by defendants’ ads in Mexican newspapers soliciting chefs. Defendants allegedly promised them employment for a substantial period of time, inducing them to quit their jobs in Mexico and come to the US; they worked for defendants for a short time before defendants fired them (allegedly keeping their recipes and other useful knowledge) and failed to pay them.

Plaintiffs pursued wage claims in an administrative forum before the Labor Commissioner and two were awarded back wages, while the Commissioner ruled that one was not an employee. The court of appeals ruled that the former ruling didn’t preclude their fraud (intentional and negligent misrepresentation), false advertising, and unfair business practices claims. Though administrative proceedings can have preclusive effect, application of res judicata and collateral estoppel to those plaintiffs was inappropriate because the Labor Commissioner lacked jurisdiction over those claims. The administrative determination that there was no employment relationship as to the third plaintiff, however, could not be relitigated. That plaintiff argued that his fraud claims didn’t depend on his employment status, but the complaint’s allegations all turned on an allegation that he worked for defendants.

Copywrongs: allleged skullduggery in copier contracts

Newcal Industries, Inc. v. IKON Office Solution, --- F.3d ----, 2008 WL 185520 (9th Cir.)

Five lessors of copier equipment appealed the dismissal of their Sherman Act antitrust, Lanham Act, and RICO claims against IKON, a competitor in the market for leasing name-brand copier equipment to commercial customers and for service contracts for maintaining that equipment.

Plaintiffs alleged that IKON defrauded its customers by amending lease agreements and service contracts without disclosing that the amendments lengthened the terms of the agreement. On the antitrust claims, the court of appeals found that plaintiffs had alleged a legally cognizable relevant market, and thus remanded to the district court. Likewise, the court of appeals found that plaintiffs had standing to bring a RICO claim.

On the Lanham Act claims, plaintiffs identified five allegedly false or misleading statements: (1) that IKON would deliver “flexibility” and lower copying costs; (2) that IKON would provide 95% up-time; (3) that the original contracts were intended to be for a fixed 60-month term and then expire; (4) that IKON’s amendments would not apply to a customer’s entire “fleet” of copying equipment; and (5) that IKON’s practices had been declared legal by a district court in 2004.

The court of appeals agreed with the district court that (1) was mere puffing. It wasn’t quantifiable, just a general assertion. The district court also ruled that (2) and (3) were not false or misleading at the time they were made, and that (4) and (5) hadn’t been made in commercial advertising or promotion. The court of appeals ruled that (2) (95% up-time) was a factual statement whose falsity had properly been alleged and should have survived a motion to dismiss. The court of appeals also believed that (3) could have been false, or true but misleading – the issue here is “intended to be,” since apparently the IKON contracts did state a 60-month term. But plaintiffs alleged that, at the time of signing, IKON intended to extend them fraudulently. Comment: Materiality might be difficult later on – presumably contracting parties often know that the other side would like to extend a contract if all goes well – but again the court of appeals seems right that this was not the proper posture for the court to decide the matter.

As for (4) and (5), plaintiffs alleged that the statements were disseminated in promotional literature to thousands of accounts, and thus they were entitled to an opportunity to prove that the statements were made in commercial advertising. If in fact the statements were made to a handful of consumers, the district could conclude that was insufficient, but plaintiffs had properly pled commercial advertising or promotion.

Can't stop the signal

A perfect storm of my favorite things: One of my favorite fantasy authors, Steven Brust, has written a Firefly novel. But it’s not an official tie-in, in part because official tie-ins got tied up in the publishing process. Instead, he released it to the world under a Creative Commons license (which, of course, can only license the rights he has, and thus does not not affect the overall rights to Firefly/Serenity.) If it contains scenes in which River Tam Beats Up Everyone, I may melt with happiness.

More generally: I have trouble understanding people who consider fan fiction to be something under than “real writing.” What do they think it is, chicken salad? Brust is a successful writer, in official/publishing terms, but he wrote this book because it was a story he had to tell. (As he said: “I couldn’t help myself.”) Sometimes – often – the stories we have to tell are stories we have to tell, and the storytelling parts of the brain don’t check with the Copyright Office first. There are reasons to give copyright owners more rights over commercialization of sequels and tie-ins, but those reasons don’t justify suppressing free distribution.

Creative piracy: the paintings of Russell Connor

Russell Connor makes paintings based on artistically significant paintings, both within copyright and without. He juxtaposes Goya and Manet, Renoir and Gaugin (“By joining the two worlds, my painting represents the familiar phenomenon of older, or less "civilized," cultures seeking to survive by displaying their picturesqueness to the tourists.”), Rubens and Picasso, and so on. He says:

For me, to copy is more than to study, or to piggy-back on the glory of the past -- it’s a kind of time-travel, fantasy encounters with heroes, letting me tread some halting steps along the path they walked. It deepens a sense of empathy with both the artists and their subjects, who, in the long history of time, were here just yesterday.

I’m present in these pictures through the way they are designed and through the limitations of my technique. If I wanted to, or could, make exact replicas, I would disappear from the meeting.

I’m struck by how close his words are to what Justice Holmes said in Bleistein v. Donaldson Lithographing: “The copy is the personal reaction of an individual upon nature. Personality always contains something unique. It expresses its singularity even in handwriting, and a very modest grade of art has in it something irreducible, which is one man’s alone. That something he may copyright unless there is a restriction in the words of the act.” Such a low standard works fine … until we get to derivative works. Connor invests his copies with his creativity, but Picasso’s heirs might still want to have a word with him. His articulated artistic justifications for his juxtapositions, however, make the transformative and critical nature of his copying evident.

Concrete allegations too vague

Midwest Canvas Corp. v. Commonwealth Canvas, Inc., 2008 WL 162757 (N.D. Ill.)

The parties compete in selling concrete curing blankets, which cover freshly poured concrete and speed up its hardening, a key function in cold weather. One of defendant’s curing blankets, trade name “Cure-All,” is listed on the New York Department of Transportation (NYDOT) website, on its approved list of insulation materials for winter concreting. This is one of 17 curing blankets, including two of plaintiff’s “Insul-Tarp” products, listed as approved. Cure-All is listed as having a thickness of 25 mm/1”, but no pricing or direct ordering information is on the NYDOT website. Based on an order it received from one of defendant’s retailers, plaintiff claimed that Cure-All is not 25 mm thick. Likewise, plaintiff ordered ½” (CC2) and 1” (CC4) curing blankets from cc.com, which sells defendant’s curing blankets. The order was confirmed via email and the blankets arrived with a work order listing the CC2 and CC4 blankets. Plaintiff claimed that they were not ½” and 1” thick, respectively.

Plaintiff brought state and federal false advertising claims based on the invoice it received from the first retailer, as well as the work order from CC.com. The court held that the invoice was not “commercial advertising or promotion” for Lanham Act purposes, because it was sent to an individual customer and thus not disseminated sufficiently to the relevant purchasing public. Moreover, an invoice is not an inducement to buy, but a memorialization of an agreed-on transaction.

Plaintiff argued that the NYDOT listing sufficed as advertising, and that defendant’s distributors disseminated its statements over the internet as part of promoting the sale of 1” NYDOT-approved curing blankets. The court found plaintiff’s claims insufficiently specific for purposes of Rule 9(b), which it found applied because plaintiff was alleging fraud. Specifically, plaintiff failed to allege a connection between the NYDOT website and defendant or its distributors. Anyway, the NYDOT site isn’t a commercial advertisement because NYDOT isn’t in competition with any of the parties; nor is a listing of approved materials an inducement to buy; nor, further, is the purpose of the site to sell materials but to assure quality in NYDOT construction projects.

The court held that the Lanham Act analysis also applied to Illinois state-law false advertising claims. And the same failure to show a commercial advertisement doomed the claim with respect to the CC.com work orders. (Comment: it seems like this parsing could have been avoided if plaintiff’s agent had called or emailed and asked about thickness – but in context, it might have seemed obvious to people in the industry.)

Having your sandwich and eating it too: Quiznos seeks 230 immunity for ads

The New York Times ran a story about the conflict between the Lanham Act and CDA §230 immunity which sets forth the issues fairly clearly: Can a Sandwich Be Slandered? As the Times explained, Quiznos ran a contest for homemade ads, and the rules required “a comparison between Quiznos and Subway with Quiznos being superior.” Subway sued over these ads, as well as Subway-generated ones. Quiznos argues that it’s just facilitating consumer-generated ads, which is protected by §230 (as long as it’s limited to web hosting, of course – run a consumer-generated ad as part of the Superbowl broadcast and you’re clearly in Lanham Act territory).

The complaint describes the objectionable user-generated ads as follows:

[In “Mr. Meat,” “Disgruntled Employee,” and “Breaks You Get What You Pay For”] the Defendants explicitly or implicitly referred to the Subway(R) sandwiches in a false and misleading manner. … For example, in one video under the Contest, the video depicts a Subway Cheesesteak sandwich in front of the Subway outlet and then the sandwich is shown running to the Defendant's store implying there was “no meat” at the Subway store. In another video entitled “Co-workers” two male individuals are shown sitting at lunch on a break with one individual eating a Subway(R) Cheesesteak sandwich and the other employee eating the Defendant’s steak sandwich; the video depicts the individual eating a Subway(R) sandwich with “no meat” and wanting to “trade” his Subway(R) half for the Defendant’s sandwich. In a third example, two children are depicted in a submarine attack situation calling for help because of the enemy Subway ship is approaching without enough meat. The sandwich is then obliterated implying it did not have enough meat. In each of these submissions to the Contest, videos implicitly or explicitly show the Subway(R) product in a false and misleading manner.

In addition, Subway alleges that the website at which the ads were collected, meatnomeat.com, itself made a false comparative claim. I would think this is clearly not protected by §230, since Quiznos was the creator of the allegedly false content – the domain name. But the “no meat” claim is so exaggerated that it’s likely just puffery, in the absence of additional claims. (Then again, there was that Buffy episode.)

The court denied a motion to dismiss the claims related to the user-generated ads on the ground that §230 is an affirmative defense that can’t be resolved on the pleadings. Doctor’s Associates, Inc. v. QIP Holders, LLC, 2007 WL 1186026 (D. Conn.). The case is scheduled for trial in 2009.

The Times explains the marketing advantages of user-generated ads: “the general population has more leeway to make videos that cross into murky territory. Consumer ads are sometimes offensive and crude, and they often exaggerate the benefits of the products made by the company that dangles the prize money. The sponsor can try to distance itself from the provocative content, while at the same time benefiting from the attention the videos draw to the brand.”

In the Times story, Richard Leighton, a partner at Keller and Heckman, suggests that §230 may not apply if Quiznos effectively made consumers its agents. I’m not so sure – a number of §230 precedents suggest that even extensive editing and – to borrow a term – inducement to create content aren’t sufficient if the ultimate decisions are up to the individual user. Under the Ninth Circuit’s now-en banc’ed Roommate.com decision, however, perhaps the contest instructions are specific enough to make Quiznos responsible for the conforming content. But as long as Quiznos asked only for comparisons, not false comparisons, I’m extremely leery of holding them responsible for the results, not because I like false ads but because §230 applies to such a wide range of claims. Newspapers that ask their readers to offer opinions in online discussion forums aren’t too far from Quiznos – especially newspapers that have a strong editorial position and whose question wording suggests a preferred direction for answers. I had understood §230 to protect that kind of thing. If §230 does protect user-generated ads that are exploited by commercial advertisers, that’s another reason it ought to be revisited.

The Quiznos team, however, made one argument that I really don’t like: “the consumer videos should not cause concern under the Lanham Act anyway because that law requires there to be an element of deception in the ad, and, [the lawyer] said, ‘there can’t be an element of deception if everyone knows the videos were created by consumers for the sake of entering a contest.’” That involves some sleight-of-hand about what the deception is: the comparison between Subway and Quiznos, not the source of the ads. Even if consumers understand the ads are user-generated, it would still be perfectly reasonable to think that Quiznos wouldn’t show the ads if they weren’t true.

The potential of user-generated ads to degrade (further) the integrity of information is illustrated by the remarks of one amateur filmmaker who submitted a video to the Quiznos contest: “‘Quiznos led you to believe it was O.K. to do it,’ [he] said. ‘It’s like mudslinging, in a sense. Like politicians slinging mud back and forth at each other. I took it that it was all fair in business.’” But the Lanham Act holds business to a higher standard than love or war.

Copying as transformation

Henry Lowood, Found Technology: Players as Innovators in the Making of Machinima, in Digital Youth, Innovation, and the Unexpected (Tara McPherson ed., 2008) (The John D. and Catherine T.MacArthur Foundation Series on Digital Media and Learning)

Given that courts have occasionally suggested that, for fair use purposes, the line between transformative and nontransformative uses is whether an unauthorized use brings out and emphasizes or exaggerates some characteristic that was already in the original text, I was especially interested in Lowood’s description of a machinima movie set in World of Warcraft that told a Romeo-and-Juliet story about the love between a troll and a human.

The reason this story “specifically drew attention to issues of creative ownership of the story world” was that the programmers had intended trolls and humans to be engaged in “relentless and unremitting conflict.” Indeed, they had implemented this intention by making it impossible for trolls and humans to communicate in-game. Trolls and humans could not chat together; speech by one group was garbled by the game into gibberish instead of presented to the other group; and the software even filtered out “subversive attempts to communicate by embedding text in descriptive gestures, known as ‘emotes.’”

Such extremes of denial can be expected to produce resistance. The story of forbidden love – and the massive collaboration between troll and human players required to film the movie – showed that the players had a different view of the inevitability of conflict. As the credits said, “Even without leet speak you cannot take away our love!”

At the same time, the film was made using only materials that the game made available. Pope, the creator, simulated sexual situations “through character positions and camera angles in the video.” He was incapable of changing the server-based program. It was thus in one sense inarguable that

as Pope argued with a wink, … he had merely showed ‘what WoW’s pixels imply :).’ Even sexual imagery, therefore, was nothing more than a rearrangement of what Blizzard’s artists had drawn, or more accurately, what its game engine generated during gameplay. Rather than asserting his right to subvert the game’s content, Pope reasoned that he had in fact not created anything on the screen, merely captured it.

So this film was deeply transformative – bringing out what always existed in potential in the original – by being pure reuse.

New false advertising suit against probiotic yogurt claims

The New York Times reports here.

As I settle into the new semester, I hope to resume posting more analysis. In the meantime, I offer you a link to a blog about the reality show The Hills, which has the absolute best analysis of Hillary Clinton's "breakdown" (scare quotes not because I thought she was feigning, but because to call that a breakdown is a misuse of the term) I've seen.

Fair use video contest

University Film and Video Association Fair Use & Free Speech Contest

UFVA is hosting a contest for the best short documentaries employing fair use, made by higher education students and faculty.

May 1, 2008 Deadline

* First Place Student: $500 & 1 year membership to UFVA

* Second Place Student: $250 & 1 year membership to UFVA

* Best Faculty Video: $250 & 1 year membership to UFVA

Entrants must employ fair use in quoting material in their documentaries, using the Documentary Filmmakers’ Statement of Best Practices in Fair Use as a guide to their decision-making.

Download Submission Form here.

Download a Flyer here.

Recent reading: against performance rights

Shourin Sen, The Denial Of A General Performance Right In Sound Recordings: A Policy That Facilitates Our Democratic Civil Society?, 21 Harvard Journal of Law & Technology 233 (2007)

Excerpts:

By influencing the creative practices of role model performers such as Charlie Parker, Buddy Holly, and The Beatles, the entitlements created by copyright law can affect the behavior of nonprofessional and recreational musicians, who represent a more diverse cross-section of the musical community. Copyright has defined the broader structure of the music industry by changing the practices of a smaller subset of influential fringe performers. …

The Copyright Act’s denial of a full performance right led to a steady increase in the number of songwriters. As a result, composing is no longer the exclusive dominion of a select group of professional New York writers. It has become commonplace. …

A performer’s personal attachment to material he wrote also encourages compositions that are socially and artistically progressive. …

The second reason why music composed by a performer/songwriter is substantively different from music composed by professional composers is that performer-songwriter compositions are marketed to a different audience. The professional songwriter’s primary audience, at least initially, is the industry executive, who is often searching for material that is representative of what is currently successful. This top-down process of repertoire selection encourages conservatism. …

More on the Organization for Transformative Works

Julie Hilden at FindLaw has a column up on the Organization for Transformative Works. As she notes, I'm a board member. (These are of course my personal views, not those of the organization.)

Unfortunately, the piece suffers from serious misinterpretations, beginning with the idea that OTW is proposing “changes to copyright law.” OTW’s position is not a proposal. Noncommercial fanworks are fair use, which is one reason there are already millions of them freely available online. As she says, authors have the “option” to sue. In general, one always has the “option” to sue. The crucial question is always: can you win?

Hilden’s piece doesn’t suggest that she’s done any research on fan fiction other than checking out OTW’s website (which is just getting started!). If she had looked at the hundreds of thousands of Harry Potter, CSI, X-Files, Stargate Atlantis, and other stories out there, she might have seen just how much fandom has to offer. Indeed, an article in this weekend’s New York Times suggests that success in the modern media environment requires an active, voluntary fan community, including fan fiction.

And this is a part of what it is to be fannish: not to replace an author’s ability to authorize commercial sequels, but to share alternative, noncanonical visions. Hilden fears destroying incentives to create, but over four decades of active, organized fan productions have shown that fan communities are an economic boon, not a detriment. The incentive argument, in other words, is empirically invalid – which is why the factual background missing from Hilden’s piece is so important.

The copyright owner’s response to that is generally: okay, you’re not costing me money, but I could be making more money from you. Thus, Hilden suggests blanket licensing as an alternative, but there are a couple of problems with that. First, as Julie Cohen has explored, creativity is often spontaneous and unpredictable. If people have to pay $100 before writing 500 words about Harry Potter, they will make other plans. This is especially true for younger writers, who are learning valuable writing and editing skills in a community that encourages them – a community that would be much harder to find without fannish enthusiasm supporting it. Anyway, once we’ve got incentives covered, the author’s willingness to be paid for allowing book reviews, critical commentary, or other transformative works isn’t a reason to give her a right to payment.

Second, the blanket has holes: the various official fan communities that exist routinely retain the option to censor. They want fans to “celebrate the story the way it is,” not explore ways in which it might be different. But it’s that very freedom that makes fanworks so vibrant, innovative, and – yes – potentially critical of the originals, whether of their views on race (The Wind Done Gone), sexuality (as with the popular subgenre of slash), politics (consider David Brin’s critique of the politics of Star Wars – a theme that could readily be explored in fiction or in, say, Troops – for more on using fiction to respond to fiction, see here).

Hilden engages in the standard copyright/trademark merger, asserting that even if there’s no incentive interest involved, authors should be able to control the designation of successors as “legitimate heirs.” But I’ve never seen a fan author claim to be a legitimate heir, and whenever authors may claim trademark rights in commercial exploitation of their names, fanworks don’t and won’t affect that. Tom Clancy can license his name as much as he wants; the OTW supports the idea that Anne McCaffrey can pick her son Todd to write all the official sequels to her books.

Hilden then worries that “many unauthorized follow-up works might simply take characters and the story in a different direction, one that might be antithetical to the original.” This is why Hilden doesn’t actually want blanket licensing, despite her initial suggestion. Interestingly, Hilden’s nightmare scenario in which a fan-altered Harry Potter renounces magic, embraces Christianity, and denounces homosexuality was already written years ago – and, though I disagree strongly with that author’s views, that’s not the test for whether criticism of the original is fair. Rather, reworkings that attack the original are, as Hilden recognizes earlier in her column, quite clearly protected by fair use because they operate as a critique of the original. One point to take from this is that the nightmare scenario hasn’t hurt Rowling even though that website has been up for several years. And the fact that Hilden can’t tell we’re already in the nightmare world suggests something about how scary we ought to find it.

Side note: Hilden makes the too-common mistake of saying that there’s a fair use exception for parody. The Supreme Court treated the issue less than transparently in Campbell v. Acuff-Rose, but subsequent cases have made clear that parody in the literary sense isn’t the requirement. Rather, parody is a type of transformative use, and transformation is about adding some new perspective to the original. It doesn’t require humor, or hate.

Recent reading

Richard J. Leighton, Literal Falsity by Necessary Implication: Presuming Deception Without Evidence in Lanham Act False Advertising Cases, 97 Trademark Reporter 1286 (2007). A useful summary of falsity by necessary implication doctrine in the circuits that have endorsed it, along with some discussion of the rationale for the doctrine and its relationship to its mirror image, puffery. Puffery is used to preclude evidence of actual deception; falsity by necessary implication to obviate the need for that evidence. Both are ways of avoiding the surveyor’s black arts.

Briefly noted: Mark H. Anania, Note, The Plight of Small Business Trademark Holders, 59 Rutgers L. Rev. 565 (2007). Argues that fairness to small businesses requires expanding dilution protection to everyone under state law. I couldn’t disagree more, of course, but I think it’s a logical consequence of modern dilution rationales.