Tag Archives: Litigation

Mayday! Mayday! UMG Took Us Down!!

After UMG won its MSJ (order here), Golden Eagle has apparently settled at a full fare price. According to The Hollywood Reporter, the settlement could be worth $30-40mm to UMG.

UMG’s Motion for Summary Judgment

Umg v Inflight (Umg Msj)

Global Eagle’s Response

UMG v Inflight (Inflight Res to UMG MSJ)

Judge Wu’s Tentative Order

UMG v Inflight (Order Re UMG MSJ)

Judge Wu’s Supplemental Order

UMG v Inflight (Supp Order Re UMG MSJ)

Stairway to Heaven or Road to Nowhere?

Randy California (born Randall Wolfe) was a singer songwriter and original member of the 60s psychedelic rock band Spirit, best known for “I Got a Line on You,” from the band’s second album.

A portion of the intro to the song “Taurus,” an obscure track on Spirit’s eponymous 1968 recording, bears a resemblance to introduction of “Stairway to Heaven,” the 1971 release by Led Zeppelin that is counted among Rolling Stone magazine’s 500 greatest songs of all time.

You can listen to “Taurus” and decide for yourself.

What is more interesting to me than whether Jimmy Page lifted the intro of one of the most famous songs in rock history from one of its most obscure is an argument in Led Zeppelin’s motion to dismiss, which alleges that Randy California isn’t the “author” of the song and, therefore, lacks standing to sue. The argument–which appears quite strong–is based on Randy’s first songwriting agreement, executed in 1968 when he was only 16. That agreement, which is provided below, defines the relationship between Hollenbeck Music (the publishing company affiliated with Ole Records, to which Spirit was signed for an exclusive recording contract) thusly: “Publisher … employs Writer to render his services as a songwriter and composer …” This language appears to be classic “work made for hire” under which the Copyright Act treats the employer as the author of the copyrighted work. (See Sec. 101, defining a “work made for hire” as “a work prepared by an employee within the scope of his or her employment.”). Said differently, in this context the “work made for hire” doctrine treats the copyright in the song “Taurus” as if Hollenbeck had actually written the notes in question. Under the Copyright Act’s Sec. 501(b), only the legal or beneficial owner of an exclusive right under copyright has standing to sue for its infringement. Importantly, however, “[a] creator of a work made for hire does not qualify as a beneficial owner even if he or she is entitled to royalties.” Ray Charles Found. v. Robinson, 795 F.3d 1109, 1116 n. 7 (9th Cir. 2015). This appears to be fatal to Randy’s heirs attempt to sue Led Zeppelin for infringement!

ASIDE: If Jimmy Page did copy the intro to Stairway to Heaven, then Hollenbeck may have a claim for infringement, so succeeding on this motion to dismiss is not necessarily a lasting victory for Led Zeppelin.

The exclusive songwriter agreement is here.

Stairway to Heaven (Songwriter Contract)

The motion to dismiss is here.

Stairway to Heaven MTD (2!25!16)

Shiver me timbers! Cox Has No Safe Harbor by Failing to Terminate Pirates

Judge Liam O’Grady of the Eastern District of Virginia has issued his full opinion and order granting partial summary judgment to plaintiff music publisher BMG against cable / ISP-provider Cox Communications. Judge O’Grady found that Cox’s “repeat offender” policy against customers accused of committing copyright infringement by downloading content without authorization using Cox network was insufficient as a matter of law. Cox could not, therefore, take advantage of the “safe harbor” provisions of Sec. 512 to escape secondary liability to BMG.

When Congress passed the Digital Millennium Copyright Act in 1998, it created four safe harbors that protect ISPs such as Cox from direct and indirect liability for copyright infringement when their involvement is limited to certain activities—transitory digital networking communications, system caching, information residing on systems or networks at the direction of users, and information location tools. See 17 U.S.C. §§ 512(a)–(d). As an Internet Service Provider, Cox sought protection as a “mere conduit for transmission” to protect against claims of secondary copyright infringement liability for the unauthorized exploitation of BMG’s copyrights by Cox’ subscribers.

In order for Cox to qualify for this “safe harbor,” however, it must demonstrate that it has “adopted and reasonably implemented, and informed subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers.” 17 U.S.C. § 512(i)(1)(A). Court’s have interpreted this requirement to obligate an ISP such as Cox has to “adopt” a policy that is “reasonable.” As the Copyright Act makes clear, for a policy to be “reasonable,” it must provide “for the termination in appropriate circumstances of subscribers … who are repeat infringers.” See Capital Records, LLC v. Escape Media Grp., Inc., No. 12-cv-6646, 2015 WL 1402049, at *9 (S.D.N.Y. March 25, 2015).

Although Cox sought the Court to find that an “infringer” could only be someone adjudicated as such by a court of competent jurisdiction, Judge O’Grady held that an ISP only requires “knowledge” of infringement by a particular user. While this might seem problematic–since the ISP only gains “knowledge” by receiving take-down notices from copyright owners and, as demonstrated by the “Dancing Baby” case (Lenz v. UMG), the copyright owner might be wrong–in practice, as described below, an ISP only takes actions against a subscriber after receiving multiple take-down notices over short periods of time.

Judge O’Grady details Cox’ Abuse Tracking System (“CATS”), which includes graduated responses to complaints about its customers unauthorized access to copyrighted content. In summary, here is CATS

1st Complaint – Cox does nothing
2nd Complaint – Cox sends an email to the customer
3rd Complaint – Cox sends the same email again
4th Complaint – Cox sends the same email again
5th Complaint – Cox sends the same email again
6th Complaint – Cox sends the same email again
7th Complaint – Cox sends the same email again
8th Complaint – Cox suspends the customers account, placing the customer in a “soft-walled garden,” which means the customer’s landing page is a warning message and link to reactive the account
9th Complaint – Cox sends customer back into “soft-walled garden”
10th Complaint – Cox sends customer to a “hard-walled garden,” a landing page that directs the customer to call Cox, during which call the customer can request reactivation
11th Complaint – Cox sends customer back to “hard-walled garden”
12th Complaint – Cox sends customer back to “hard-walled garden,” but now a higher-level Cox customer service rep must be involved for reactivation
13th Complaint – same as #12
14th Complaint – the customer’s account is considered for termination

Mind you, these 14 complaints against a single account-holder had to occur with a 6 month time period! That’s more than one complaint against a single account-holder every 2 weeks!! But it was not the volume of complaints that Cox had to receive before considering termination that caused it to lose the Sec. 512(a) safe harbor. It was the fact even after receiving 14 complaints, Cox never actually ever terminated anyone.

Initially, Cox “pretended” to terminate subscribers, only to reactive them immediately. As described in an email from Cox’ Manager of Customer Abuse Operations,

if a customer is terminated for DMCA, you are able to reactivate them after you give them a stern warning about violating our AUP and the DMCA. We must still terminate in order for us to be in compliance  with safe harbor but once termination is complete, we have fulfilled our obligation. After you reactivate them the DMCA ‘counter’ restarts; The procedure restarts with the sending of warning letters, just like a first offense. This is to be an unwritten semi-policy..

There were numerous other emails imparting similar instructions.

Cox was more lenient with subscribers illegally downloading copyrighted material because it had little impact on the network; “It does not cause a big problem on the network. Not like spam, Dos attacks, hacking, etc. do.”

In late 2012, Cox abandoned even this illusory termination and simply stopped terminating anyone. BMG introduced evidence that from January 2010 until August 2012, Cox terminated an average of 15.5 account holders a month. Between September 2012 and November 2014, Cox terminated an average of 0.8 accounts per month, notwithstanding the fact that Cox issued 711,000 email warnings and suspensions in response to alleged infringements during this same period. “Cox also admits that of the 22 terminated accounts, 17 of those had also either failed to pay their bills on time or were excessive bandwidth users.”

Again, Judge O’Grady cites to numerous emails in which Cox’ customer service team dismiss knowledge that a subscriber is using the network to access copyrighted content, often because the subscriber is paying Cox a lot of money: “So, the BitTorrent client is running on one of their computers (their child’s, etc.) and they need to uninstall it. This customer pays us over $400/month and if we terminate their service, they will likely cancel the rest of their services. Every terminated Customer becomes lost revenue and a potential Detractor to our Net Promoter Score;” and “This customer will likely fail again, but let’s give him one more change [sic]. [H]e pays 317.63 a month.”

The decision is below:

BMG v Cox Comm. (12!2!15)

Judge Shakes Off Swift Lawsuit

District Judge Gail Standish (C.D. Cal.) has issued a whimsical opinion dismissing without prejudice a songwriter’s claim that Taylor Swift’s “Shake It Off” copied lyrics from his song “Haters Gone Hate.” In her conclusion, Judge Standish quotes several of Swift’s songs:

At present, the Court is not saying that Braham can never, ever, ever get his case back in court. But, for now, we have got problems, and the Court is not sure Braham can solve them. As currently drafted, the Complaint has a blank space— one that requires Braham to do more than write his name. And, upon consideration of the Court’s explanation in Part II, Braham may discover that mere pleading BandAids will not fix the bullet holes in his case. At least for the moment, Defendants have shaken off this lawsuit.

While a nice humorous twist on the often staid language of a federal district court opinion, I did not find this language the most interesting — from a copyright infringement standpoint. Instead, I was drawn to the discussion of what constitutes protectable expression; i.e., sufficiently original. After a brief discussion of internet searches for lyrics containing “haters gonna hate” and/or “players gonna play,” Judge Standish notes, somewhat ominously, that “Braham should consider whether filing a new complaint claiming that his lyrics “Players Gonna Play” and “Haters Gonna Hate” are original would conflict with his duty under Federal Rule of Civil Procedure 11 not to make factually or legally baseless claims.”

Judge Standish’s opinion is below.

 

Brahman v Satv (Taylor Swift Lyrics) (CD Cal. 11-11-15)

‘Oh’ No You Don’t!

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.”

Tufamerica v WB Music (Jay Z 'Oh' Copyright Infringement)

Toto v. Emenim

The SDNY recently found that Toto’s recording contract with Sony did not obligate Sony to pay Toto 50% of royalties from digital sales through Internet retailers such as iTunes.  This outcome is different from the FBT case out of the 9th Circuit, where similar language was interpreted differently.  So, what is the difference?

 

Toto v Sony (9!29!14 Order)

Don’t Fence Me In

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 is (Rap) Genius!

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.

Nas The World Is Mine

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.