Jay Z won a motion to dismiss a copyright infringement case alleging that his alleged sampling and use of the word “oh” in an audio recording and music video entitled Run This Town. Jay Z allegedly sampled the recorded “oh” from the recording Hook &Sling Part I Eddie Bo and the Soul Finders. The “oh” in question appears once in Hook & Sling but allegedly appears 42 times in Run This Town. In a direct refutation of the Bridgeport Music case from the 6th Circuit, the SDNY court relied on 2nd Circuit precedent that distinguishes between “factual copying” and “actionable copying.” The former “requires only the fact that the infringing work copies something from the copyrighted work; the latter . . . requires that the copying is quantitatively and qualitatively sufficient to support the legal conclusion that infringement . . . has occurred.” Judge Kaplan concluded that “In arguing that the Court should find qualitative significance simply because defendants have actually copied its work, plaintiff improperly conflates factual copying and actionable copying.”
An interesting lawsuit was recently filed by a group of radio stations over the digital retransmissions of terrestrial broadcasts. VerStandig Broadcasting filed a declaratory judgment action against sound recording performance royalty collection society SoundExchange over a specific exception in the Copyright Act that limits the exclusive public performance right in sound recordings to be exclude retransmissions of AM/FM broadcasts within 150 miles of the original over-the-air transmission. Specifically, Section 114(d) limits the scope of a copyright owner’s exclusive right in the public performance of sound recordings by means of a digital audio transmission.
The performance of a sound recording publicly by means of a digital audio transmission, other than as part of an interactive service, is not an infringement … if the performance is part of … a retransmission of a nonsubscription broadcast transmission: Provided, That, in the case of a retransmission of a radio station’s broadcast transmission … the radio station’s broadcast transmission is not willfully or repeatedly retransmitted more than a radius of 150 miles from the site of the radio broadcast transmitter … . 17 U.S.C. § 114(d)(1)(B)(i).
VerStandig claims that when Congress created the retransmission exception, “geo-fencing” technology, which is technology that “determines a recipient’s physical location by comparing a receiving computer’s IP address, WiFi and GSM access point, GPS coordinates, or some combination against a real world map of those virtual addresses,” wasn’t available to limit the recipients of AM/FM broadcasters’ retransmissions. According to VerStandig, “When data is geo-fenced, only recipients physically located within the authorized locations can access the data over the Internet. Recipients who are physically located outside the geo-fence who attempt to access the data over the Internet receive a message explaining that the data is unavailable.” Today, according to VerStandig, “Geo-fencing is a proven technology. It is used by the gaming industry to restrict access to online gambling to recipients physically located in jurisdictions where gaming is legal. And it is used by marketers for the direct advertising of products to persons physically located in targeted markets.”
VerStandig sent SoundExchange a letter notifying SoundExchange of VerStandig’s intention to stop paying royalties on performances of retransmissions within 150 miles of the original transmission. SoundExchange apparently responded by stating that “the 150-mile exemption applies only ‘to retransmissions of broadcasts by cable systems to their subscribers or retransmissions by broadcasters over the air’ and that if the 150-mile exemption ‘did apply to [VerStandig’s] proposed simulcasting’ [VerStandig] would nevertheless need to pay royalties for copies or reproductions of the sound recordings in the FM broadcasts that it live streams.”
With respect to the first argument, the Senate Report on the Digital Performance in Sound Recordings Act appears to reject this conclusion. The Senate Report says
Section 114(d)(1)(B)(i) (retransmission of radio signals within 150-
mile radius of transmitter)
Under this provision, retransmissions of a radio station within a
150-mile radius of the site of that station’s transmitter are exempt,
whether retransmitted on a subscription or a nonsubscription
basis, provided that they are not part of an interactive service.
This provision does not, however, exempt the willful or repeated
retransmission of a radio station’s broadcast transmission more
than a 150-mile radius from the radio station’s transmitter. The
Committee recognizes that the 150-mile limit could serve as a dangerous
trap for the uninitiated or inattentive. To ensure against
that possibility, section 114(d)(1)(B)(i) provides that a retransmission
beyond the 150-mile radius will fall outside the exemption
only if the retransmission is willful or repeated. The Committee
intends the phrase ‘‘willful or repeated’’ to be understood in
the same way that phrase was used in section 111 of the Act, as
explained in the House Report on the 1976 Act, H. Rept. 1476, 94th
Cong., 2d sess. 93 (1976).
Pursuant to section 114(d)(1)(B)(i)(I), the 150-mile limitation does
not apply when a nonsubscription broadcast transmission by an
FCC-licensed station is retransmitted on a nonsubscription basis by
an FCC-licensed terrestrial broadcast station, terrestrial translator,
or terrestrial repeater. In other words, a radio station’s broadcast
transmission may be retransmitted by another FCC-licensed broadcast
station (or translator or repeater) on a nonsubscription basis
without regard to the 150-mile restriction.
In addition to appearing to generally support VerStandig’s position, the highlighted language appears to capture TuneIn and iHeartRadio’s aggregation of simulcast transmissions. As I understand it, the bulk of listening of retransmitted terrestrial broadcasts on services like iHeart are people listening to their old home-town station in their new town; e.g., I can listen to KDKA from Pittsburgh here in Oakland.
With respect to SoundExchange’s second argument (i.e., needing a license to make reproductions), this may run head-long into a very interesting fair use defense. If Congress intended radio broadcasters to retransmit digitally their analog signals without paying a royalty under Sec. 114, could Congress have intended for the record labels to be able to demand a royalty (or sue for statutory damages for copyright infringement) for making ephemeral copies under Sec. 112? My gut tells me that can’t be what Congress intended, but that might not matter is the law is otherwise unambiguous on this point.
The Complaint is here.
Google Books and Rap Genius
Judge Denny Chin, formerly of the SDNY and now the Second Circuit, has issued his opinion in the Google Books case. (Judge Chin kept a few of his cases when he moved up to the appeals court.). For those unfamiliar with the case, in 2005 Google undertook to digitize entire libraries of books, scanning the entire book in optical text recognition format. Many of the books Google scanned were under copyright and Google never sought permission from copyright owners prior to making its digital copies. Several authors filed a purported class action suit against Google.
After Judge Chin rejected a proposed settlement in 2011, the parties filed cross motions for summary judgment, with Google arguing that its digitization of entire books as ‘fair use’ under § 107. Judge Chin agreed with Google and granted its summary judgment.
Because they typically are the most relevant in deciding a fair use claim, I focus on the first and last of the 4 fair use factors provided in § 107: whether the use is transformative and whether the use reduces the market for the original. Judge Chin found both of these factors weighed in Google’s favor.
Judge Chin determined that “Google’s use of the copyrighted works is highly transformative. Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers, and others find books. … The use of book text to facilitate search through the display of snippets is transformative.” Judge Chin compared Google Books to providing thumb-nails of images, citing approvingly Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) and Bill Graham Archives v. Darling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006).
The display of snippets of text for search is similar to the display of thumbnail images of photographs for search or small images of concert posters for reference to past events, as the snippets help users locate books and determine whether they may be of interest. Google Books thus uses words for a different purpose — it uses snippets of text to act as pointers directing users to a broad selection of books.
Judge Chin focused on the fact that Google’s scanning “transformed book text into data for purposes of substantive research, including data mining and text mining in new areas, thereby opening up new fields of research.”
I wonder if Judge Chin would have made the same conclusion based on the scanning of a single book. Or even scanning several hundred books. It appears that his logic stems from the fact that millions of books were scanned, thereby enabling the searching that made the scanning transformative in the first place. This is at least suggestive that massive copying might be transformative, where limited copying might not be. As discussed below with respect to Rap Genius, I can imagine ways in which Judge Chin’s decision might influence business models that involve digitizing and indexing copyrighted works.
With respect to the last § 107 factor—the effect of the copying on the market for the original—Judge Chin concluded that “a reasonable factfinder could only find that Google Books enhances the sales of books to the benefit of copyright holders. An important factor in the success of an individual title is whether it is discovered … Google Books provides a way for authors’ works to become noticed, much like traditional in-store book displays.” Because “Google provides convenient links to booksellers to make it easy for a reader to order a book … there can be no doubt but that Google Books improves books sales.” I didn’t review the motions for summary judgment, so I don’t know if there was evidence (empirical or anecdotal) presented regarding Google Books actual impact of sales, but this seems like a pretty bold statement if it lacks evidentiary support. Given that many books were on sale prior to Google Books, it seems at least some evidence could have been presented showing either an increase or decrease in sales of particular titles after the introduction of Google Books.
For those who pay attention to this kind of thing, Judge Chin was the district court judge who originally granted summary judgment in favor of the copyright owners in the Cablevision case. Judge Chin’s decision was overturned by the Second Circuit in what became a bellwether for technology companies designing services that transmitted copyrighted works. Judge Chin was the dissenting vote in the Aereo case, where the Second Circuit upheld the principles articulated in Cablevision. I find it interesting that Judge Chin is so sure that services like Cablevision’s remote DVR and Aereo’s rebroadcast of over-the-air television transmissions are infringing technologies, while Google Books is not.
The Google decision is here.
So, what does Google Books have to do with Rap Genius? I recently read that Rap Genius has signed a license with music publisher Sony ATV. If you’ve checked out Rap Genius, you might wonder why it felt the need to get a license from a music publisher. I would argue it is a highly transformative service—a la Google Books. It is a searchable database of lyrics (though, unlike Google Books, it provides the entire lyrics, whereas Google Books only provides up to 90% of a text). But in addition to transcribing the lyrics, Rap Genius annotates the lyrics with possible explanations of what the writer meant. Rap Genius’ annotations include space for comments, so people can provide their own thoughts regarding the meaning of their favorite rap lyrics.
For example, check out Nas’ song “The World Is Mine.” I’ve listened to that song 100 times, and I love this line because of the way Nas emphasizes “PIPE” at the end – “The fiend of hip-hop has got me stuck like a crack pipe.” According to Rap Genius, this line either refers to “fans are fiending for his music, or if he himself is compelled to write rhymes.” Rap Genius also tells me that this line is a “subtle shout out to Nas’ one time mentor, Rakim who was known as the Microphone Fiend.” If Google Books is transformative—and all Google is doing is digitizing books—then Rap Genius should clearly be transformative—digitizing lyrics AND providing annotations.
All of this got me to thinking about a draft article by Ben Depoorter & Robert Kirk Walker’s called Copyright False Positives, an electronic copy of which is available at: http://ssrn.com/abstract=2337684. Depoorter and Walker argue that (a) the scope of copyright protection cannot be determined a priori, (b) copyright infringement entails statutory damages, and (c) defending copyright infringement claims is expensive. Because of these factors, copyright owners may over-enforce their copyrights, leading to “copyright enforcement false positives, where rights holders erroneously believe that their interests in a particular work extend beyond the bounds of what is actually protected. These false positives often “motivate copyright owners to seek enforcement of rights that are nonexistent or outside the scope of copyright. Such misguided enforcement actions impose significant social costs…”
Two of these significant social costs are obvious in our examples. First, in the Google Book case, Google had to spend millions of dollars litigating what a federal district judge ultimately determined was a fair use of copyrighted works. Second, in the Rap Genius case, the website took a license rather than risk the very litigation expenses Google was able to afford, even though Rap Genius’ use of the copyrighted works is arguably transformative. In both instances, society is worse off, but in one instance a publisher is better off.
It’s been a tough few weeks for satellite radio service Sirius XM. On August 1, former Frank Zappa bandmates Mark Volman and Howard Kaylan (a/k/a Flo & Eddie), who performed together as The Turtles since 1965 and are most known for the song “Happy Together,” sued Sirius XM in California state court over the alleged unauthorized reproduction, distribution and public performance of The Turtles sound recordings. Then, on August 15, Flo & Eddie sued Sirius XM in New York federal court over the same allegations. In both cases, Flo & Eddie seek to represent a class of similarly situated plaintiffs. In the California case, Flo & Eddie allege damages exceed $100,000,000.00. Finally, on August 26, SoundExchange sued Sirius XM in the federal district court for the District of Columbia over alleged underpayments of sound recording performance royalties. SoundExchange alleges that Sirius XM owes tens of millions of dollars in underpaid royalties.
At issue in each case is an anomaly of the protection of sound recordings in the Copyright Act. While musical works have been protected by federal copyright since 1831, sound recordings did not enjoy any federal copyright protection until 1972. In 1971, as technology advances made it easier for people to make unauthorized copies of records (think peer-to-peer file sharing in the physical world), Congress extended copyright protection to sound recordings, but only with respect to the exclusive right to reproduce and distribute and only for sound recordings “fixed” on or after February 15, 1972 (sound recordings fixed prior to that date are typically referred to as “pre-72”). There are a variety of reasons why Congress decided not to grant copyright protection to all sound recordings (e.g., apply the right retroactively), but one reason was the lobbying of the record industry, which claimed that applying federal copyright protection to pre-72 recordings would cause havoc on music industry agreements written before federal protection existed.
State law protection for pre-1972 sound recordings is a complicated subject. State protection of pre-1972 sound recordings is a patchwork of criminal laws, civil statutes and common law. Early cases relied principally on unfair competition to protect sound recordings from unauthorized duplication and sale. By the 1950s, record piracy had become a serious problem, with pirates openly competing with record companies. For that reason, in the 1960s, states began to pass laws making it a criminal offense to duplicate and distribute sound recordings, without authorization, for commercial purposes. New York was the first such state in 1967; California was the second, in 1968.
In addition to the criminal penalties, some states have statutes that provide civil remedies. Section 980(a)(2) of the California statute is a good example:
The author of an original work of authorship consisting of a sound recording initially fixed prior to February 15, 1972, has an exclusive ownership therein until February 15, 2047, as against all persons except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in such prior sound recording, but consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate the sounds contained in the prior sound recording.
The most notable case in recent years involving pre-1972 sound recordings was Capitol Records, Inc. v. Naxos of America, Inc. At issue were recordings of classical music performances originally made in the 1930s. Capitol, with a license from EMI, the successor of the original recording company, remastered the recordings, and was distributing them in the United States. Naxos obtained the original lacquer masters and restored the recordings in the UK, where they were in the public domain, and began marketing them in the United States in competition with Capitol. Capitol sued in federal court for unfair competition, misappropriation and common law copyright infringement. The district court granted summary judgment to Naxos because the recordings were in the public domain in the UK, where they were originally recorded.
When that decision was appealed, the U.S. Court of Appeals for the Second Circuit concluded that New York law was unclear in some important respects and certified the question of state law to the New York Court of Appeals. The New York Court of Appeals accepted the case, and held that foreign sound recordings remain protected under “common law copyright” in New York until 2067, even though they may be in the public domain in their home country. The court explained that a common law copyright claim in New York “consists of two elements: (1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by copyright.” It went on to state that “[c]opyright infringement is distinguishable from unfair competition, which in addition to unauthorized copying and distribution requires competition in the marketplace or similar actions designed for commercial benefit.”
In 2009 Congress asked the Copyright Office to investigate the appropriateness of extending federal copyright protection to pre-72 recordings. In December 2011, the Copyright Office released its report, entitled Federal Copyright Protection for Pre-1972 Sound Recordings, in which it recommended that federal copyright extended to pre-72 recordings. As the Copyright Office noted in that report,
“Until 1995 there was no public performance right in sound recordings under federal law, and it does not appear that, in practice, pre-1972 sound recordings had such protection. The current right provided by federal law applies only to digital audio transmissions (not to broadcasts) of copyrighted sound recordings. It is possible that a state court would entertain a claim for unfair competition or common law copyright infringement if, for example, it were faced with a claim that pre-1972 sound recordings were being made available through internet streaming, particularly if it were persuaded that the use was substituting for purchases of the plaintiff’s recording. But no such case has yet arisen.”
Well, now such case has arisen. There are significant issues yet to be resolved, not the least of which is how you certify a class of potential plaintiffs whose sound recordings were fixed over several decades under different recording contracts. More importantly, Sirius XM will have a host of available defenses (affirmative or otherwise) that courts—including the Supreme Court—have recently suggested need to be considered as part of the class certification process.
For example, in the on-going dispute over Google’s digitization of books, the Second Circuit recently delayed class certification to consider Google’s alleged fair use defense.
Putting aside the merits of Google’s claim that plaintiffs are not representative of the certified class—an argument which, in our view, may carry some force—we believe that the resolution of Google’s fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues, including those regarding the commonality of plaintiffs’ injuries, the typicality of their claims, and the predominance of common questions of law or fact, see Fed. R. Civ. P. 23(a)(2), (3), (b)(3). See, e.g., FPX, LLC v. Google, Inc., 276 F.R.D. 543, 551 (E.D. Tex. 2011) (denying plaintiffs’ request for class certification “because of the fact-specific inquiries the court would have to evaluate to address [defendants’] affirmative defenses [including fair use of trademarks]”); Vulcan Golf, LLC v. Google Inc., 254 F.R.D. 521, 531 (N.D. Ill. 2008) (“The existence of affirmative defenses [such as fair use of trademarks] which require individual resolution can be considered as part of the court’s analysis to determine whether individual issues predominate under Rule 23(b)(3).”); see also Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n.12 (1978) (“Evaluation of many of the questions entering into determination of class action questions is intimately involved with the merits of the claims. The typicality of the representative’s claims or defenses . . . and the presence of common questions of law or fact are obvious examples.” (quotation marks omitted)); Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th Cir. 1996) (“[A] court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues.”); cf. Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2561 (2011) (holding that “a class cannot be certified on the premise that [a defendant] will not be entitled to litigate its statutory defenses to individual claims”). Moreover, we are persuaded that holding the issue of class certification in abeyance until Google’s fair use defense has been resolved will not prejudice the interests of either party during the projected proceedings before the District Court following remand. Accordingly, we vacate the District Court’s order of June 11, 2012 certifying plaintiffs’ proposed class, and we remand the cause to the District Court, for consideration of the fair use issues.
Even assuming a class can get certified, there are still significant issues facing the plaintiff, including, but not limited to, whether a public performance right exists in state common law, how to measure damages in the absence of the statutory remedy available under federal copyright, and the scope of individual state courts over out-of-state “infringements.”
Readers will recall a previous post (here) discussing the United States District Court of the Eastern District of Wisconsin finding that Comedy Central’s use of the Samwell’s viral video entitled “What What (In the Butt)” (“WWITB”) was fair use. The copyright owner of WWITB, Brownmark Films, appealed the decision, arguing, among other things, that an unpleaded affirmative defense of fair use is an improper basis for granting a motion to dismiss under Rule 12(b)(6). In an opinion written by Judge Cudahy, the 7th Circuit affirmed the District Court’s ruling.
Much of the 7th Circuit’s opinion is like a First Year Civil Procedure lecture, full of discussions regarding whether Comedy Central’s filing was a 12(b)(6) motion, a 12(c) motion, or a motion of summary judgment. In the end, the 7th Circuit determined that “district court could properly consider an affirmative defense in the context of a motion for summary judgment, which it did here, regardless of the caption [Comedy Central] used.”
Central in the 7th Circuit analysis was the fact that the only 2 pieces of evidence required by the district court to make its decision were the 2 versions of the WWITB videos, which the district court had. In a hilarious footnote, Judge Cudahy reveals himself as an avid South Park viewer:
Adopting [a summary judgment approach] would have given [Comedy Central] greater freedom in setting out its fair-use defense. In its reply brief, Brownmark makes much of the fact that [Comedy Central] mentions Butters’ naïveté, but had not introduced evidence on Butters’ innocent nature. While we do not feel that this case turns on any such naïveté, [Comedy Central] could have introduced previous South Park episodes to show that Butters has repeatedly demonstrated a lack of understanding of sex. See, e.g., Butters’ Very Own Episode (Comedy Central television broadcast Dec. 12, 2001) (perceiving sex as wrestling), see also Cartman Sucks (Comedy Central television broadcast Mar. 14, 2007); Stupid Spoiled Whore Video Playset (Comedy Central television broadcast Dec. 1, 2004). Indeed, in one of these episodes, Butters is dressed in the same teddy bear costume he wears in the WWITB video. Stupid Spoiled Whore Video Playset (Comedy Central television broadcast Dec. 1, 2004).
I can imagine Judges Easterbrook and Posner scatologically discussing the import of Butters sexual innocence in the context of Saddam Hussein and Satan as gay lovers, existentialism in the repeated the death of Kenny, and whether feminists can enjoy the show due to some of its misogynistic characters.
BTW – Samwell is riding this Butt song as long and as hard as he can. He even has an iPhone app!
The 7th Circuit’s opinion is below:
[scribd id=102872285 key=key-2o72miqz6z9favzeqfwf mode=scroll]
Thierry Guetta, a/k/a Mr. Brainwash, is back in court for allegedly using photographs of famous musicians without authorization. This time, however, he’s managed to drag Google into his mess.
By way of background, Guetta was sued in 2010 in the Central District of California by Gene Friedman, a photographer who took one of the most iconic photographs in hip hop, featuring Run DMC:
Guetta made several derivative works, which he commercialized on t-shirts and postcards, including:
To create the Broken Records Work, Guetta caused a digital image of the Photograph to be altered so as to remove most of the detail from its subjects, leaving an outline of the group’s features. … Guetta then had the image projected onto a large piece of wood and painted the image onto the wood. Thereafter, Guetta glued more than 1,000 pieces of broken phonograph records onto the painted wood. The result was a three-dimensional image of Run-DMC created entirely from broken records. (Defendant’s Motion for Summary Judgment)
Guetta claimed that his derivative works were either transformative (and, therefore, fair use under § 107) or did not use copyrightable portions of Friedman’s original (and, therefore, could not constitute infringement).
In this case, the District Judge disagreed with Guetta. Regarding the question of whether the portions of the photograph copied were copyrightable, Judge Pregerson concluded the Friedman “selected and arranged the subjects. Although the court believes that no more is
required, the court also notes that [Friedman] made related decisions about light and shadow, image clarity, depth of field, spatial relationships, and graininess that were all represented in the copyrighted Photograph. [Friedman] also selected the background
and perspective of the Photograph, and all of these particular artistic decisions commulatively result in the Photograph.” Having found the photo copyrightable, Judge Pregerson quickly concluded that Guetta had, indeed, infringed Friedman’s copyright.
Regarding Guetta’s claim that his use was fair because the works were transformative, Judge Pregerson again disagreed, concluding that “[Guetta] has not offered a transformative alternative use of the Photograph image. Both [Friedman] and [Guetta] are artists, and the image was used by both in works of visual art for public display. Although the statements made by those respective artworks and the mediums by which those respective statements were made differ, the use itself is not so distinct as to render Defendant’s use a transformation of Plaintiff’s copyright.”
Judge Pregerson’s opinion is below.
Now, Guetta finds himself a defendant again, this time being sued by the estate of James Marshall for allegedly doing exactly the same thing with Marshall’s photographs as he did with Friedman’s; i.e., taking the photo and manipulating it to look different, while still being able to recognize the artist-subject matter. (Marshall v. Guetta, 12-cv-3423-SJO (C.D. Cal.). So why is Google on the hook? According to the complaint, Google held an event to launch its music service at Guetta’s studio, where Guetta installed a backdrop using blown-up derivative works of Marshall’s photos of John Coltrane and Jimi Hendrix.
And, what does all this have to do with Girl Talk? Peter Friedman argued here that the reason mash-up artist Girl Talk has not been sued by the record labels is because the argument that Girl Talk “transformed the copyrighted materials sufficiently that his work constitutes non-infringing fair use is just too good.” Judge Pregerson’s opinion appears to undercut such arguments. For example, Guetta’s transformation was such that the underlying work was still identifiable (i.e., Guetta’s intent was for viewers to recognize his art as depicting Run DMC or Coltrane or Hendrix, thus capturing the essence of the original photo). The same is obviously true for Girl Talk, who relies on listeners’ recognition of the underlying songs to make his music more popular. Extending Pregerson’s logic, both Girl Talk and the recording artists he samples are are “artists” and though “the statements made by those respective artworks and the mediums by which those respective statements were made differ, the use itself is not so distinct as to render Defendant’s use a transformation of Plaintiff’s copyright.”
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In two recent cases, federal district courts awarded attorneys’ fees to defendants in copyright infringement claims who prevailed on the basis of fair use.
I think the “fair use” defense is the most over-pled defense in copyright cases. For example, in 2010, Warner Bros. Records sued the owner of the pornographic website Reality Kings, alleging that videos shot in nightclubs and private parties featured Warner’s copyrighted music. In some videos, the “actors” allegedly lip-synch the song or perform sexual acts that link thematically with the track (for example, Katy Perry’s “I Kissed A Girl”). According to Reality Kings attorney Marc Randazza, Reality Kings’ unauthorized use was “fair” because when you “… film in a live night club, you’re going to absorb some of the ambient sounds. You are going to hear what the DJ is playing, and if someone can tell me how to shoot at a nightclub and police out the music in the background, I’m all ears.” (read more here). Sometimes, however, a defendant’s use really is fair. And, in even rarer cases, a defendant whose use is fair gets his attorneys’ fees back.
Seltzer v. Green Day, Inc., No. 10-2103 (C.D. Cal. Nov. 17, 2011)
By way of background, on March 23, 2010, Derek Seltzer, an artist, brought suit against Green Day for using Seltzer’s work, Scream Icon, as part of a video backdrop shown during live performances of Green Day’s song East Jesus Nowhere. On August 18, 2011, the court granted summary judgment in favor of Green Day on all claims, finding that “the different visual elements added, including graffiti, a brick backdrop, and (especially) the large red cross over the image, considered in connection with the music and lyrics of East Jesus Nowhere, ‘add something new, with a further purpose or different character’ than Plaintiff’s original work.”
Green Day moved for its attorneys’ fees as the prevailing party under 17 U.S.C. § 505. (“In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”). The district court noted that “The pivotal inquiry is whether the successful defense furthered the goals of the Copyright Act.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994)
The court lays out the Fogerty factors a court considers when deciding whether to award attorney fees to the prevailing party:
These factors are: (1) the degree of success obtained; (2) frivolousness; (3) motivation; (4) the objective unreasonableness of the losing party’s factual and legal arguments; and (5) the need, in particular circumstances, to advance considerations of compensation and deterrence.
The court concluded that:
Just as John Fogerty’s defense of his copyright in “the Old Man Down the Road” vindicated his right and the right of others to compose music in the distinctive “Swamp Rock” style, Staub and the Green Day defendants’ successful defense of the video backdrop and the East Jesus Nowhere performance-experience secured the public’s access to these works and paved the way for the Defendants and others to manipulate and reinterpret street art in the creation of future multimedia compilations. See Fantasy, 94 F.3d at 556. Because the Defendants’ success “enrich[ed] the general public through access to creative works,” paved the way for the creation of new works, and furthered the Copyright Act’s “peculiarly important” interest in demarcating the boundaries of copyright law, the Court finds that the fair use defense of the video backdrop and the East Jesus Nowhere live performance implicated the ultimate interests of copyright and should be encouraged. See id.; Fogerty, 510 U.S. at 527 (defendants “who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them”). .
It probably didn’t help that Seltzer’s attorney had cited to an overturned case as binding precedent (“Plaintiff’s citation to Hustler, a case applying the “dual” standard rejected by the Supreme Court in Fogerty, edges close to an affirmative attempt to mislead the Court.”)
Brownmark Films, LLC v. Comedy Partners, 10-cv-1013 (E.D. Wis., Nov. 30, 2011),
In the South Park “What What in the Butt” case discussed here, the district court granted defendant Comedy Central’s motion to dismiss. Comedy Central moved for its attorneys’ fees. The district court noted the relevant 7th Circuit refinement of Fogerty:
According to the Seventh Circuit, the “two most important [of these] considerations…are the strength of the prevailing party’s case and the amount of damages or other relief the party obtained.” Assessment Techs. of Wisconsin, LLC v. Wire Data, Inc., 361 F.3d 434, 436 (7th Cir. 2004). Furthermore, the Seventh Circuit has specifically noted that, while “prevailing plaintiffs and prevailing defendants are to be treated alike,” the presumption in favor of awarding fees to a prevailing defendant is “very strong.” Id., at 436–37 (refining Fantasy, 510 U.S. at 534; citing Diamonds Star Building Corp. v. Freed, 30 F.3d 536, 506 (4th Cir. 1994)).
The district court determined that
The defendants’ fair-use argument was very strong, and Brownmark’s legal position was objectively unreasonable. The Court took the somewhat rare step of deciding this case at the motion to dismiss stage, precisely because the defendants’ fair-use defense was so strong, satisfying all four fair-use factors. First, the Court found that South Park’s work was a “clear” parody, which one could gather quickly and easily from watching the episode. Second, South Park’s version of the video was transformative, using the series’ own characters and a different recording of the song, even if the words and images were similar. Third, even with those similarities, South Park made many changes to the form of the original and used only enough lines to conjure up the original. South Park’s use was insubstantial. And, fourth, the Court found that South Park’s version of the video would not usurp the market for Brownmark’s original. In fact, in this respect, it is most likely that South Park’s use would have spurred demand for the original, making the viral video’s spread more rapid after its exposure to a national television audience. The satisfaction of these factors shows that the defendants’ case was very strong.
Inquiring further, the Court finds that Brownmark’s legal positions were also objectively unreasonable, and thus their position was frivolous. … Further, the Court is convinced that Brownmark’s motivation in filing this suit was questionable. Not only was Brownmark’s position unreasonable, but it also waited nearly two years to file a lawsuit, only after being repeatedly rejected with warnings that South Park’s use was copyrighted. (Docket #34, Ex. B). This demonstrates an attempt by Brownmark to use the threat of litigation against the defendants as a sort of “sword of Damocles”—hanging by a thread over the heads of the defendants while Brownmark attempted to extract a licensing fee.
However, having decided that the defendants were entitled to attorneys’ fees, the court, in its discretion, decided to reduce the award because of Brownmark’s limited resources; the court decided to “impose a fee that is lower than the $31,525.23 reasonable amount; this final feewill be tied to Brownmark’s size and ability to pay.” It does strike me as a bit counter intuitive to argue, as the court does, that Brownmark was essentially trying to extort Comedy Central, but shouldn’t pay all of Comedy Central’s legal fees, because Brownmark can’t afford it.
The Green Day order is below:
[scribd id=75510852 key=key-228ao6iveakkzm31dnx7 mode=list]
The South Park order is below:
[scribd id=75510869 key=key-hfbmxfyvwuu130gsg9n mode=list]
Why is the United States District Court of the Eastern District of Wisconsin discussing South Park’s butt? In this case Brownmark Films, LLC sued Comedy Partners et al (“Comedy Central”) over a music video entitled “What What (In the Butt)” (“WWITB”), “a nearly four minute ditty regarding the derrière of the singer of the underlying work” that went viral on YouTube and garnered more than 40,000,000 views. The Court describes the case thusly,
“The heart of the video features an adult African American male ensconced in a bright red, half-buttoned, silk shirt, dancing, grinning creepily at the camera, and repeatedly singing the same cryptic phrases: “I said, what what, in the butt” and “you want to do it in my butt, in my butt.” Meanwhile, the defendants are the entities involved in the production of “South Park,” an animated sitcom that centers on the happenings of four foul-mouthed fourth graders in a small mountain town in Colorado.”
This is a ruling on a summary judgment motion by defendant Comedy Central. The issue at hand is whether the South Park episode entitled “Canada on Strike,” in which one of the characters—the naive “Butters Stotch”—is coaxed by his fellow classmates to record an internet video that replicates parts of the WWITB video infringes Brownmark’s copyright. In the South Park episode, the nine-year old Butters makes his own music video featuring the central lines of the original video, while dressed as a teddy bear, an astronaut, and even as a daisy, in the hopes of making money on the Internet. In the episode, Butters’ video, much like the original WWITB video, goes “viral,” with millions watching the clip.
The court examines the procedural issue of whether Brownmark as legal standing to sue as related to copyright interests. It concludes that Brownmark does have standing because it holds a non-exclusive right to the music video in question.
The court next addresses “fair use.” But first, the Court must determine whether the Court, in a motion for summary judgment, can resolve a motion to dismiss in the defendants’ favor because of the existence of fair use as an affirmative defense. The Court concludes that the issue of fair use may be properly addressed because,
“Ultimately, “context is king” in this case in deciding whether the plaintiff has provided in its complaint and the materials referenced in that complaint the necessary information to warrant a dismissal based on an affirmative defense. Here, the amended complaint discusses a very limited context for the alleged infringement.”
The court held that parody is fair use and South Park’s use of Brownmark’s work was parody. The Court readily concluded that the “defendants use of the music video in the South Park episode was “fair”” under the fair use doctrine of copyright law.
“The fair use doctrine allows for a “limited privilege in those other than the owner of a copyright to use the copyrighted material in a reasonable manner without the owner’s consent.” The rationale behind the doctrine is that unauthorized uses of a copyright are permissible when they “advance the underlying constitutional purpose of copyright law: to promote broad public availability of literature, music, and other forms of creative arts.” Specifically, 17 U.S.C. § 107, which codifies common law fair use principles, provides that the “fair use of a copyrighted work” for such purposes as “criticism” and “comment” “is not an infringement of a copyright.” Moreover, the statute provides four guideposts by which to determine whether a particular use is “fair”: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.” (internal citations omitted)
The Court determined that South Park’s use of Brownmark’s copyrighted material was covered by the fair use exception of copyright law as parody. As the court explained,
One only needs to take a fleeting glance at the South Park episode to gather the “purpose and character” of the use of the WWITB video in the episode in question. The defendants used parts of the WWITB video to lampoon the recent craze in our society of watching video clips on the internet that are – to be kind – of rather low artistic sophistication and quality. The South Park episode “transforms” the original piece by doing the seemingly impossible – making the WWITB video even more absurd by replacing the African American male singer with a naive and innocent nine-year old boy dressed in adorable outfits. The episode then showcases the inanity of the “viral video” craze, by having the South Park fourth graders’ version of the WWITB video “go viral,” seemingly the natural consequence of merely posting a video on the internet. More broadly, the South Park episode, with its use of the WWITB video, becomes a means to comment on the ultimate value of viral YouTube clips, as the main characters discover that while society is willing to watch absurd video clips on the internet, our society simultaneous assigns little monetary value to such works. The South Park “take” on the WWITB video is truly transformative, in that it takes the original work and uses parts of the video to not only poke fun at the original, but also to comment on a bizarre social trend, solidifying the work as a classic parody.
Comedy Central’s motion to dismiss was granted, with prejudice. The Court noted the prejudice and its displeasure with what he deems to be a waste of Court time by Brownmark’s lawyers’ incompetence.
The court’s order is below:
[scribd id=70221957 key=key-2mmh0mcwuk44t9bgkxzo mode=list]
Neil Netanel, a professor at UCLA Law School and my former colleague when I was with Fulbright & Jaworski, has written an excellent study of the evolution of how courts apply the fair use doctrine entitled Making Sense of Fair Use, forthcoming in the Lewis & Clark Law Review (v.15, No.3) and available here.
As Prof. Netanel describes, commentators have long complained about the seemingly ad-hoc and arbitrary outcomes of copyright infringement cases in which defendants adopt a “fair use” defense. After reviewing several prominent law review articles that survey the case law in an attempt to determine a predictable pattern in fair use cases, Prof. Netanel conducts his own study and finds that the fair use landscape is less arbitrary than other scholars have suggested.
Prof. Netanel begins by defining the two dominate fair use analysis paradigms: “market-centered” and “transformative use.”
“The market-centered paradigm treats fair use as an anomalous exception to the copyright owner’s exclusive rights, applicable only in cases of irremediable market failure. It owes its origin to Professor Wendy Gordon’s highly influential law review article, published in 1982, Fair Use as Market Failure: A Structural Analysis of the Betamax Case and Its Predecessors, in which Gordon argued that fair use should be available only when the defendant meets the heavy burden of proving both that high transaction costs pose an insurmountable obstacle to copyright licensing and that the use serves an identifiable public benefit that would outweigh any harm caused to the copyright owner by granting fair use.” This interpretation of fair use was adopted by the Supreme Court in Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985).
“The transformative use paradigm … was set out by Judge Pierre Leval in his law review article, Toward a Fair Use Standard, published in 1990, and adopted by the Supreme Court in 1994 in Campbell v. Acuff-Rose [510 U.S. 569 (1994)]. Under this paradigm, the key question in fair use analysis is whether the defendant’s use is ‘transformative,’ not whether the defendant might have obtained a license or the copyright owner would have reasonably consented to the use. The transformative use paradigm views fair use as integral to copyright’s purpose of promoting widespread dissemination of creative expression, not a disfavored exception to copyright holders’ exclusive rights.”
Rather than finding that courts arbitrarily apply fair use analysis, as previous studies have suggested, Prof. Netanel finds that “[since] 2005, the transformative use paradigm has come to dominate fair use case law and the market-centered paradigm has largely receded into the pages of history. Today, the key question for judicial determination of fair use is not whether the copyright holder would have reasonably consented to the use, but whether the defendant used the copyrighted work for a different expressive purpose from that which the work was created.”