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U.S. Copyright Office Publishes Report on Moral Rights

By Marie-Andrée Weiss

The U.S. Copyright Office published on 23 April 2019 a report on moral rights entitled Authors, Attribution, and Integrity: Examining Moral Rights in the United States. Karyn Temple, the Office Director, wrote in her introduction that the report focuses “on the personal rights of individual authors and artists, who have often been excluded in broader conversations about copyright legal reforms.”

This concern echoes the philosophy behind laws in European countries which are called “author’s rights” (droit d’auteur) and protect a work as being the imprint of the author’s personality. As it has been explained, for instance, by the European Court of Justice in Infopaq, a literary work is composed by words “which, considered in isolation, are not as such an intellectual creation of the author who employs them. It is only through the choice, sequence and combination of those words that the author may express his creativity in an original manner and achieve a result which is an intellectual creation.”

Since a work expresses the personality of the author, he or she must then be provided moral rights to protect the integrity of the work, as well as his or her right to be presented as the author.  Moral rights are often presented as the main difference between copyright and author’s rights.

Are there moral rights in the U.S.?

Moral rights can be provided by contracts and licenses, which “have been at the forefront of protecting moral rights in the United States for many years and are commonly used in creative industries for that purpose” (p. 39 and p. 127). But what about the law?

The U.S. only acceded to the Berne Convention for the Protection of Literary and Artistic Works in 1988, in which article 6bis provides for moral rights, independently of the author’s economic rights. The author has “the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation.”

As this right seems to provide authors a way to prevent fair use of their work, including the creation of derivative works, which are protected by the First Amendment, it is not surprising that the U.S. has not embraced the doctrine of moral rights. The report deals with the tensions between the First Amendment and moral rights (p.28), and calls the fair use doctrine “a vital First Amendment safeguard” (p. 30).

Indeed, no seminal moral right law was enacted after the U.S. joined the Berne Convention, as Congress determined, maybe a little bit hastily, that the United States already provided sufficient protection for the rights of attribution and integrity “through an existing patchwork of laws,” including the Lanham Act and some provisions of the Copyright Act (p. 7, p. 24 and p. 36).

However, in 1990 Congress enacted the Visual Artists Rights Act (“VARA”), section 106A of the Copyright Act, which provides authors of narrowly defined “work[s]of visual art” the right “to claim or disclaim authorship in the work, as well as a limited right to prevent distortion, mutilation, or modification of a work that is of recognized stature.”

In 1996 and 1997, the U.S. ratified the WIPO Performances and Phonograms Treaty, article 5 of which provides a moral right to performers who interpret works of art. Congress also considered in this instance that this right was already protected in the U.S. by the existing patchwork of laws, and that there was thus no need to enact a specific law (p. 26).

Congress however did enact in 1998 the Digital Millennium Copyright Act, which added section 1202 to the Copyright Act. Section 1202 prohibits, in some instances, removing, altering, or providing false copyright management information (“CMI”).

Article 5 of the 2012 WIPO Beijing Treaty on Audiovisual Performances gives performers a moral right in their live performances. While the U.S. signed the Treaty in 2012, it has not ratified it yet, and neither have any of the G6’s members.

Finally, some states have their own moral right statutes, for instance, the California Art Preservation Act of 1979 (p.120).

 

No need for a blanket moral right statute 

In its just-released report, the Copyright Office found no need to introduce a blanket moral rights statute at this time (p.9). Instead, it suggested amending the Lanham Act and the Copyright Act, as it “believes that updates to individual pieces of the patchwork may be advisable to account for the evolution of technology and the corresponding changes within certain business practices” (p. 39).

The Office also suggested that Congress could amend VARA. The federal statute only applies to “works of visual art,” which are narrowly defined by Section 101 of the Copyright Act as works existing in a single copy or a limited edition. The report noted several cases denied VARA protection because “the work was considered promotional or advertising material” (p.66). The Office recommended, however, that only commercial art created pursuant to a contract and intended for commercial use be excluded from VARA’s scope (p.68).

The Office also suggested that Congress consider narrowly amending section 43(a) of the Lanham Act so that its unfair competition protections would include false representations of the authorship of expressive works. Section 43(a) applies to “false designation[s] of origin, false or misleading description[s] of fact, or false or misleading representation[s] of fact.” The Supreme Court had put a stop in 2003 to the use of Section 43(a) as a substitute for moral right, finding in Dastar Corp. v. 20th Century Fox Films that the section should not be recognized as a “cause of action for misrepresentation of authorship of noncopyrighted works.”

This Supreme Court decision “resulted in the fraying of one square of the moral rights patchwork as originally envisioned by Congress” (p. 54). At stake in this case was the right of attribution of a work in the public domain, which had been commercialized by a third party without indicating the original author. Right of attribution is one of the standard moral rights.

The Office also suggested that Congress add a new cause of action in a new section 1202A of Title 17, so that the author of a work could recover civil damages if he or she can prove that the defendant knowingly removed or altered CMI with the intent to conceal the author’s attribution information.  Indeed, it “is common practice in the digital world for CMI to be stripped from works, disconnecting a work from its authorship and ownership information” (p.86).

 

Moral Rights and Right of Publicity

The Office recommended that Congress adopt a federal right of publicity law in order to reduce the uncertainty and ambiguity created by the diversity of state right of publicity laws. Almost all of the U.S. states have a right of publicity, whether at via common law, statutory law, or both, but they differ in the length and scope of protection. “As a result, there is significant variability among the protections available to an author depending upon where he or she chooses to live, and the specter of federal copyright preemption looms over many right of publicity claims” (p.117).

The report noted that “the right of publicity had provided authors with causes of action for misattribution of authorship, material alterations to the author’s work, and distribution of the author’s work in connection with inferior packaging and artwork” (p.111).  However, as this right protects the name and likeness of the author or performer, it “cannot address situations where the author’s name or likeness is absent. Thus, the right of publicity can stand as a proxy for the right of attribution against violations resulting from misattribution, but has little to say in cases where the author is not credited at all” (p.113).  It cannot protect the integrity of the work either.

The report briefly noted that “the increasingly accessible video editing technology behind “deepfake” software can not only fundamentally alter the content of an author’s work, but can also lead to social and moral harm for the artists and the subject of the video through malicious use” (p.8). This new technology is likely to trigger new right of publicity laws. For example, New York tried unsuccessfully to enact a new right of publicity statute that specifically addressed the issue of deep fakes.

It remains to be seen if Congress will heed the report’s suggestions. Whether it does or not, the debate on moral rights is likely to continue.

The Controversial European Union Directive on Digital Copyright

By Marie-Andrée Weiss

The EU Directive 2019/790 of the European Parliament and of the Council on Copyright and Related Rights in the Digital Single Market was approved by the EU Parliament on 17 April 2019 and was published on 17 May 2019.  It concludes a long and hard-fought lobbying campaign where authors, internet companies, and the general public fiercely debated the most controversial issues of the Directive, the new related rights of press publishers (Article 15) and the new responsibility regime for online platforms (Article 17).

The Directive also addressed how works in the public domain or out-of-commerce could be used by “cultural heritage institutions,” that is, a library or a museum, and how research organizations could reproduce protected works for scientific research.

 

Facilitating use of content in the public domain: Article 14

Not all of the provisions of the Directive are controversial. For instance, Article 14 provides that reproductions of works in the public domain cannot be protected by copyright, unless this reproduction is original enough to be itself protected by copyright.

This means that museums and other institutions will no longer be able to claim a copyright on reproductions of works in the public domain which are in their collections. It remains to be seen if some of them will claim that the reproductions are original enough to be protected. Museums may change the way they photograph their works, although it would be difficult to claim that a mere reproduction of a painting is original enough to be protected. It could be, however, possible to claim so for the reproduction of a sculpture, a building, or a garment (clothes can be protected by copyright in the EU).

Cultural heritage institutions are, however, granted by Article 6 the right “to make copies of any works or other subject matter that are permanently in their collections, in any format of medium, for purposes of preservation…or other subject matter.” They are thus given the fair use right to entirely reproduce a work, for preservation purposes only, and even for profit. The museum stores will be well stocked.

 

“Out-of-commerce works” Article 8

Collective management organizations which are “sufficiently representative of [relevant] rightholders” will have the right to conclude with cultural heritage institutions a non-exclusive non-commercial license for the use of “out-of-commerce works.” This will, for instance, allow books which are no longer published to be copied and distributed by libraries, and orphan works to be featured in museums. Authors will, however, have the right at any time to exclude their works from this scheme.

 

Data mining

Articles 3 to 5 provide for a copyright exception “for reproductions and extractions made by research organizations and cultural heritage institutions in order to carry out, for the purposes of scientific research, text and data mining of works or other subject matter to which they have lawful access.”

The organizations will have to implement “an appropriate level of security” when storing the works. The rightholder will be able to expressly reserve their rights “in an appropriate manner, such as machine-readable means,” if the work is made available online. It is thus not an opt-in scheme, but an opt-out one, and an author failing to constrain such use by digital marking, or any other method, may not have much recourse.

 

Digital teaching

Article 5 of the Directive provides for a copyright exception for works used for teaching, when provided by an educational establishment, either on-site or online, through “a secure electronic environment accessible only by the educational establishment’s pupils or students and teaching staff.” This definition encompasses MOOCs, but not blogs, even if the sole purpose of the blogger is to provide information about a particular topic.

The two most controversial articles in the Directive are Article 15, which provides a related right to press publishers, and Article 17, which makes platforms liable for content protected by copyright which are illegally shared online.

 

Article 15 (formerly Article 11):  a related right for press publishers

Article 15 provides press publishers established in the EU the exclusive right, for two years, to reproduce the works they publish and to make them available to the public, a right which has been named by some of its detractors “ancillary copyright.” Authors retain, however, the right to independently exploit their works.

Recital 54 of the Directive explains that the wide availability of online news is a key element of the business models of news aggregators and media monitoring services, and a major source of profit for them. However, this makes licensing their publications more difficult for publishers, and thus it is “more difficult for them to recoup their investments.”

Not surprisingly, this proposal was fiercely debated, by news aggregators, of course, but also by non-profit organizations that viewed this new right as a threat to free exchange of information on the Web. The rights provided by Article 15 do not apply, however, “to private or non-commercial uses of press publications by individual users.”

Article 15 does not apply to either “very short extracts of a press publication” or to “individual words,” an exception which can hardly be described as a fair use exception. It is nice to know, though, that one has the right to reproduce a single word without having to pay a fee.

 

Article 17 (formerly article 13):  Towards an EU “DMCA”?

“Online content-sharing service providers” are defined by article 2(6) of the Directive as “provider[s] of an information society service of which the main or one of the main purposes is to store and give the public access to a large amount of copyright-protected works or other protected subject matter uploaded by its users, which it organizes and promotes for profit-making purposes.”

This long definition refers to digital platforms, such as Google or Facebook. They will have to obtain the authorization of the rightholder, for instance, through a license, in order to have the right to share the protected work with the public.

If they do not have this authorization, that is, in almost all cases, they will be liable for unauthorized acts of communication to the public of works protected by copyright, unless they “acted expeditiously, upon receiving a sufficiently substantiated notice from the rightholders, to disable access to, or to remove from their websites, the… works…and made best efforts to prevent their future upload” (Article 14.4(c)).

The platforms will have to put in place “an effective and expeditious complaint and redress mechanism…available to users of their services in the event of disputes.” This requirement is similar to the one put in place in 1998 by the Digital Millennium Copyright Act (DMCA), which provided a safe harbor for online service providers if they “expeditiously” remove or disable access to the infringing material after receiving a DMCA takedown notice.

Several legal scholars, such as Professor Wendy Seltzer and Professor Daphne Keller, have argued that the DMCA is a threat to free speech. Indeed, platforms regularly delete, automatically and zealously, works which are protected by the fair use doctrine upon receiving a DMCA notice. It is likely that the EU scheme will lead to similar overreach.

The Directive is ambiguous as to the way platforms are required to fulfill their new duties. Article 17.8 expressly provides that “application of [Article 15] shall not lead to any general monitoring obligation,” but Article 17.4(b) provides that the platforms must be able to demonstrate that they “made, in accordance with high industry standards of professional diligence, best efforts to ensure the unavailability of [protected] works.” Platforms may be inclined to consider that monitoring content by algorithms is indeed the current “high industry standards of professional diligence.”

 

Next stop: implementation, on a bumpy road

Member States have up to 7 June 2021 to transpose the Directive into their legal systems, since Directives, unlike Regulations, are not directly applicable in the EU.

However, the road to implementation is likely to be a bumpy one. Poland filed in May a complaint to the Court of Justice of the European Union against the EU Parliament and the EU Council, claiming that Article 17 of the Directive would lead to online censorship. The debate over the Directive is likely to continue.

A Study in Trademarked Characters

By Marie-Andrée Weiss

The characters created by Disney, Marvel, and LucasFilms are valuable intellectual property and are protected both by copyright and by trademark. However, a recently decided case in the Southern District of New York (SDNY), Disney Inc. v. Sarelli, 322 F.Supp.3d 413 (2018), demonstrates that preventing the unauthorized use of such characters may not be as easy as expected.

In this case, Plaintiffs are Disney Enterprises, Marvel Characters and LucasFilm, all of which own copyrights and trademarks in many of the most famous characters in the world, such as Mickey Mouse, Hulk, and Chewbacca. These characters were first featured in movies like Frozen, The Avengers or Star Wars, and are now licensed or featured in derivative products such as comic books, video games, or theme parks. Their exploitation is highly lucrative.

When visiting Plaintiffs’ theme parks, one has a chance to meet the characters “in person.” This experience is also offered by Characters for Hire, a New York company offering, as the name implies, character hiring services. The company’s principal owner is Nick Sarelli (Defendant). Characters for Hire offers a service wherein actors dressed in costumes entertain guests during birthday parties or corporate events. For example, actors have allegedly dressed as Mickey, Elsa and Anna from Frozen, Captain America and Hulk from The Avengers, and Luke Skywalker and Darth Vader from Star Wars.

The contracts Defendants provided to their clients contained disclaimer language, stating, for example, that Defendants do not use trademarked and licensed characters. The contracts also warned clients that the costumes may differ from those seen in movies “for copyright reasons,” adding that “[a]ny resemblance to nationally known copyright character is strictly coincidental.”

These disclaimers did not appease Plaintiffs, who sent several cease and desist letters to Defendants before filing a federal copyright and trademark infringement suit and a New York trademark dilution suit.

While Judge Daniels from the SDNY granted Defendants’ motion for summary judgment and dismissed Plaintiffs’ claim for trademark infringement on August 9, 2018, he denied the motion to dismiss the copyright infringement claim and the trademark dilution claim.

 

The descriptive fair use defense failed

Plaintiffs claimed that the use of their trademarked characters to advertise and promote Defendants’ business, along with their portrayal by costumed actors, was likely to confuse consumers as to the origin of the services.

Defendants argued that their use of Plaintiffs’ characters was descriptive and nominative fair use, and that there was no likelyhood of confusion.

Descriptive fair use is an affirmative defense to a trademark infringement suit, as Section 33(b)(4) of the Trademark Act allows “use… of a term or device which is descriptive of and used fairly and in good faith [but] only to describe the goods or services of such party, or their geographic origin.” In other words, a defendant can use plaintiffs’ trademarks in a descriptive sense, or to describe an aspect of his own good or service.

For such a defense to succeed in the Second Circuit, a defendant must prove that the use was made (1) other than as a mark, (2) in a descriptive sense, and (3) in good faith (Kelly-Brown v. Winfrey at 308). This defense failed in the present case, as Defendants had not made a descriptive use of Plaintiffs’ marks. Instead, Judge Daniels found that their ads “were specifically designed to evoke [Plaintiff’s marks] in consumers’ minds…”

 

The nominative fair use defense also failed

Defendants also claimed that they used Plaintiffs’ marks to describe their own products. Such nominative fair use is a defense to a trademark infringement suit if such use “does not imply a false affiliation or endorsement by the plaintiff of the defendant” (Tiffany v. eBay at 102-103). But this nominative fair use defense also failed, as Defendants used Plaintiffs’ marks to identify their own service, which is hiring out characters for parties, rather than Plaintiffs’ trademarked characters.

 

Defendants’ use of characters was not trademark infringement

Judge Daniels used the eight-factor Polaroid test used by the Second Circuit in trademark infringement cases to determine whether Defendants’ use of Plaintiffs’ marks were likely to confuse consumers.

While Plaintiffs’ marks are undoubtedly strong (first factor), the similarity of the marks (second factor), weighed only slightly in Plaintiffs’ favor because Defendants used different names for their characters than Plaintiffs’ trademarked character names, e.g., “Big Green Guy,” “Indian Princess,” and “The Dark Lord” instead of Hulk, Pocahontas and Darth Vader.

The third and fourth Polaroid factors, the proximity of the goods and services, and the possibility that the senior user will enter the market of the junior user, were found to weigh in Defendants’ favor. There was no evidence that Plaintiff has plans to expand into the private entertainment service industry.

The fifth Polaroid factor, evidence of actual confusion, also weighed in Defendants’ favor, as there was no evidence that Defendants’ customers used the names of Plaintiffs’ trademarked characters when referring to Defendants’ services in online reviews or otherwise. Plaintiffs could not provide a survey proving customers’ confusion either.

Judge Daniels found the sixth factor, Defendants’ intent and evidence of bad faith, to also be in Defendants’ favor, since Defendants had put customers on notice that their services were not sponsored by or affiliated with Plaintiffs by using altered versions of Plaintiffs’ characters’ names and by removing Plaintiffs’ characters’ names in their online reviews.

The seventh Polaroid factor, the quality of Defendants’ products, was also in Defendants’ favor, as Defendants’ services, being of a lesser quality than Plaintiffs’, makes it likely that consumers will not be confused as to the source of the services.

The eighth Polaroid factor, consumer sophistication, also was in favor of Defendants, as Plaintiffs did not prove the sophistication level of Defendants’ relevant consumers.

Balancing these eight factors, the SDNY found no likelihood of consumer confusion and denied Plaintiffs’ motion for summary judgment on their trademark infringement claim.

 

Trademark dilution

Plaintiffs chose to claim trademark dilution under New York trademark dilution law, Section 360-1 of New York Business Law, and not under the Federal Trademark Dilution Act. This choice may have been made because the New York law does not require a mark to be famous to be protected, and a plaintiff only needs to prove the mark’s distinctiveness or secondary meaning.

Judge Daniels found that there was a genuine issue of fact as to whether Defendants’ use of Plaintiffs’ marks is likely to dilute Plaintiffs’ marks by tarnishment. A court will have to determine if Defendants provide services of poor quality.

 

Copyright

Plaintiffs argued that Defendants had “copied and used the images, likenesses, personas, and names of Plaintiffs’ characters…to promote and advertise its services online.” Defendants argued in response that the characters in which Plaintiffs own copyrights are based on prior works that are part of the public domain.

Both parties will have more chances to pursue their arguments as Judge Daniels denied the motion for summary judgment on copyright infringement. He found that Plaintiffs had presented as evidence screenshots from Defendants’ website and videos allegedly published by Defendants which had not been properly authenticated. More specifically, they had not been authenticated by someone “with personal knowledge of reliability of the archive service from which the screenshots were retrieved,” citing Specht v. Google, a 2014 Seventh Circuit case.

It is likely that the parties will settle out of court.

Update on EU Copyright Reform – Audiovisual Media Services and Copyright in the Digital Single Market

By Martin Miernicki

Two important legislative projects in the field of European copyright law have recently undergone substantial developments. The revision of the Audiovisual Media Services Directive (AVMSD) is likely to be adopted later this year, whereas the proposed Directive on Copyright in the Digital Single Market (CDSMD) will be subject to an extended debate in the European Parliament.

 

Background

In 2015, the Commission adopted its Digital Single Market Strategy for Europe, calling for a better harmonization of the copyright laws of the EU member states as well as for an enhanced access to online goods and services. Against this background, the proposal for a revision of the AVMSD as well as the proposal for the new CDSMD were made in 2016. The amendment to the AVMSD pursues a variety of policy goals, aiming at creating a clear level playing field for the provision of audiovisual content in the EU, especially addressing online services. The CDSMD contains provisions on the (collective) licensing of certain works and exceptions and limitation to rights of right holders provided for in other European directives on copyright, among these Directive 2001/29/EC. Title IV’s Art 11 and 13 of the proposed directive appear to be most controversial, providing for a right of publishers of press publications in the digital use of their press publications (so-called “link tax”) and an increased obligation of certain platform operators to monitor the content uploaded to their sites (so-called “upload filter”). Both reform projects have been intensely discussed and have yet to be adopted.

 

Current state of the reform projects

On 26 April 2018, the Commission announced a breakthrough in the negotiations with the Council and the European Parliament about the revision of the AVMSD, stating that a “preliminary political agreement” had been reached. This agreement was subsequently confirmed in June 2018. As regards the CDSMD, the Council’s permanent representatives committee agreed to its position on the draft directive on 25 May 2018 for the negotiations with the European Parliament. On 20 June 2018, the Parliament’s Legal Affairs Committee voted to start the negotiations, upholding controversial parts of the proposed CDSMD. However, the European Parliament rejected this decision in early July.

 

What can be expected?

Against the background of these developments, the revised AVMSD is likely to be adopted in autumn or winter, starting the period for the transposition of its rules into national law. It should be noted that Brexit also affects audiovisual media services, and it caused the Commission to publish a notice to stakeholders on this matter earlier this year. The future development of the CDSMD is less clear, as the proposal might be amended as a result of the upcoming debate. At this point, it is expected that the European Parliament will discuss the issue in September.

Full-work Licensing Requirement 100 Percent Rejected: Second Circuit Rules in Favor of Fractional Licensing

By Martin Miernicki

On 19 December 2017, the Second Circuit handed down a summary order on the BMI Consent Decree in the dispute between the Department of Justice (DOJ) and Broadcast Music, Inc. (BMI). The court ruled that the decree does not oblige BMI to license the works in its repertoire on a “full-work” basis.

 

Background[1]

ASCAP and BMI are the two largest U.S. collective management organizations (CMOs) which license performance rights in musical works. Both organizations are subject to so-called consent decrees which entered into force 2001 and 1994, respectively. In 2014, the DOJ’s Antitrust Division announced a review of the consent decrees to evaluate if these needed to be updated. The DOJ concluded the review in August 2016, issuing a closing statement. The DOJ declared that it did not intend to re-negotiate and to amend the decrees, but rather stated that it interpreted these decrees as requiring ASCAP and BMI to license their works on a “full-work” or “100 percent” basis. Under this rule, the CMOs may only offer licenses that cover all performance rights in a composition; thus, co-owned works to which they only represent a “fractional” interest cannot be licensed. In reaction to this decision, BMI asked the “rate court” to give its opinion on this matter. In September 2016, Judge Stanton ruled against the full-work licensing requirement, stating that the decree “neither bars fractional licensing nor requires full-work licensing.”

 

Decision of the court

On appeal, the Second Circuit affirmed Judge Stanton’s ruling and held that fractional licensing is compatible with the BMI Consent Decree. First, referencing the U.S. Copyright Act – 17 U.S.C. § 201(d) –, the court highlighted that the right of public performance can be subdivided and owned separately. Second, as fractional licensing was common practice at the time the decree was amended in 1994, its language does indicate a prohibition of this practice. Third, the court rejected the DOJ’s reference to Pandora Media, Inc. v. ASCAP, 785 F. 3d 73 (2d Cir. 2015) because this judgment dealt with the “partial” withdrawal of rights from the CMO’s repertoire and not with the licensing policies in respect of users. Finally, the Second Circuit considered it to be irrelevant that full-work licensing could potentially advance the procompetitive objectives of the BMI Consent Decree; rather, the DOJ has the option to amend the decree or sue BMI in a separate proceeding based on the Sherman Act.

 

Implications of the judgement

The ruling of the Second Circuit is undoubtedly a victory for BMI, but also for ASCAP, as it must be assumed that ASCAP’s decree – which is very similar to BMI’s decree – can be interpreted in a similar fashion. Unsurprisingly, both CMOs welcomed the decision. The DOJ’s reaction remains to be seen, however. From the current perspective, an amendment of the decrees appears to be more likely than a lengthy antitrust proceeding under the Sherman Act; the DOJ had already partly toned down its strict reading of the decree in the course of the proceeding before the Second Circuit. Yet, legislative efforts might produce results and influence the further developments before a final decision is made. A recent example for the efforts to update the legal framework for music licensing is the “Music Modernization Act” which aims at amending §§ 114 and 115 of the U.S. Copyright Act.

[1] For more information on the background see Transatlantic Antitrust and IPR Developments Issue No. 3-4/2016 and Issue No. 5/2016.

 

Is Embedding a Tweet on a Web Site Copyright Infringement?

By Marie-Andrée Weiss

A 5-page copyright infringement complaint filed last April in the Southern District of New York (SDNY) is being closely watched by copyright practitioners, as it may lead the court to rule on whether a Twitter post incorporating a copyrighted photograph, without permission of the author, is copyright infringement. The case is Goldman v. Breitbart News Network LLC et al., 1:17-cv-03144.

In the summer of 2016, Justin Goldman took a picture of the Boston Patriots quarterback, Tom Brady, walking in the streets in the Hamptons, in New York, with members of the basketball team the Boston Celtics. The picture was of interest as it could be implied from it that Tom Brady was helping the Celtics to acquire star player Kevin Durant.

The picture was published by several Twitter users on the microblogging site, and these tweets were then embedded in the body of articles about Tom Brady’s trip to the Hamptons published by Defendants including Yahoo!, Time, the New England Sports Network, Breitbart and others.

Justin Goldman registered his work with the Copyright Office and filed a copyright infringement suit against the platforms which had reproduced his photograph. Defendants moved to dismiss, claiming that the use was not infringing because it was merely embedding, and also because it was fair use. Judge Katherine B. Forrest denied the motion to dismiss on August 17, 2017, because whether embedding a tweet is equivalent to in-line linking could not be determined at this stage of the procedure.

Defendants, minus Breitbart, then filed a motion for partial summary judgment on 5 October 2017. Plaintiff moved to oppose it on 6 November 2017.

 

The Exclusive Right to Display a Work

Section 106(5) of the Copyright Act gives the copyright owner the exclusive right “to display the copyrighted work publicly.” Section 101 of the Copyright Act defines displaying a work as “to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process or, in the case of a motion picture or other audiovisual work, to show individual images nonsequentially.” Plaintiff argues that “embedding” is one of the processes mentioned in Section 106(5).

 

Is Embedding a Tweet Just Like In-Line Linking?

Defendants claimed that incorporating an image in a tweet is not different from ‘in-line linking,’ which the Ninth Circuit found to be non-infringing in Perfect 10, Inc., v. Amazon.com, Inc.. In this case, the issue was whether the thumbnail versions of copyrighted images featured by Google on its image search result pages were infringing.

The Ninth Circuit had defined “in-line linking” in Perfect 10 as the “process by which the webpage directs a user’s browser to incorporate content from different computers into a single window”. In this case, Google had provided HTML instructions directing a user’s browser to access a third-party website, but did not store the images on its servers. This was found not to be infringing, as Google did not store the images as it not have a have a copy of the protected photographs, and thus did not display then, since to “display” a work under Section 101 of the Copyright Act requires to show a copy of it. This reasoning is known as the “Server Test”.

Plaintiff distinguished the facts in our case from Perfect 10, claiming that his photograph was shown in full size, that it was not “framed” and that it was featured prominently on Defendant’s websites. He argued that the thumbnails in Perfect 10 were low-resolution pictures which users had to click in order to access the full photos, whereas an embedded tweet allows the user to see the full high-resolution image without further maneuvers.

Defendants argued instead that, similarly to the Perfect 10 facts, tweets were embedded using code which directed user’s browsers to retrieve the Tom Brady picture from Twitter’s servers, and the picture was indeed framed, with a light gray box. They had, as publishers, merely provided an in-line link to the picture already published by the Twitter users, and this was not direct copyright infringement. They argued that the embedded tweets were not stored on, hosted by or transmitted from servers owned or controlled by them.

 

Meanwhile, in the European Union…

Defendants argued that an embedded tweet functions as a hyperlink, since clicking on it brings the user to the Twitter site. This case is somewhat similar to the European Court of Justice (ECJ) GS Media (see here for our comment) and Swensson cases. In Swensson, the ECJ had found that posting a hyperlink to protected works which had been made freely available to the public is not a communication to the public within the meaning of article 3(1) of the InfoSoc Directive, which gives authors the exclusive right of public communication of their works. Recital 23 of the Directive specifies that this right covers “any… transmission or retransmission of a work to the public by wire or wireless means, including broadcasting.” The ECJ reasoned that providing a hyperlink is not a communication to a new public and is thus not infringing.

In GS Media, the ECJ found that posting hyperlinks to protected works, which had been made available to the public, but without the consent of the right holder, is not a communication to the public within the meaning of article 3(1) of the InfoSoc Directive either. However, if the links were posted by a person who knew or could have reasonably known that the works had been illegally published online, or if they were posted for profit, then posting these hyperlinks are a new communication to the public and thus infringing.

Could ECJ case law on hyperlinks inspire U.S. courts to revisit Perfect 10?

Remote Recording, Cloud Services, and Private Copying: ECJ Rules on Services by Third Parties

By Martin Miernicki

On 29 November 2017, the ECJ gave its opinion in VCAST v. RTI (C-265/16). The court ruled on the compatibility of an online service (offered by VCAST) – which provides users with cloud storage space for free-to-air terrestrial programs of TV organizations – with Directive 2001/29/EC (the so-called Copyright Directive), and in particular with its article 5(2)(b) (the so-called private copying exception). Upon the selection of the user, the service autonomously picks up the television signal and records the indicated content in the “cloud”.

 

Background & questions referred

The case involved questions relating to the private copying exception as well as the concept of the communication to the public, contained in article 3 of the Copyright Directive. The ECJ has repeatedly given its opinion on both matters. Relevant case law includes Padawan v. SGAE (C-467/08), ACI Adam v. Stichting de Thuiskopie (C-435/12), and Copydan Båndkopi v. Nokia Danmark (C-463/12) (on the private copying exception), as well as ITV Broadcasting v. TVCatchup (C-607/11), Reha Training v. GEMA (C-117/15), and AKM v. Zürs.net (C-138/16) (on the communication to the public). In essence, the referring (Italian) court asked the ECJ whether an online cloud service as described above was compatible with the Copyright Directive.

 

The decision of the court

The ECJ reached the same result as proposed by Advocate General (AG) Szpunar in his opinion and held VCAST’s cloud service is incompatible with EU law. First of all, the court recalled its case law and stated that natural persons can benefit from the private copying exception also in situations where the copying services are provided by a third party (para 35). However, in the opinion of the court, the service at issue did not merely assist users in making lawful reproductions but also, by picking up the television signals, provided access to the protected content (para 38). For this reason, the services in question also qualified as a communication to the public within the meaning of article 3 of the Copyright Directive. Since this act required the consent of the rightholders, the provision of the services at issue infringed their exclusive rights and was hence not permissible under EU law.

 

What does the judgment mean?

The judgement gave the court the opportunity to reconfirm and clarify its opinion on two recurring issues of the more recent copyright case law: First, the lawfulness of the source of the reproduction which is made under the private copying exception; second, the concept of the communication to the public. With regard to the former, the ECJ held that the private copying exception cannot be invoked where the third party provides access to the protected content (para 37). In principle, this is in line with the prior case law of the court. With regard to the latter, the court referred to the principles established in ITV Broadcasting, holding that acts of communication to the public – different than the original transmission – carried out under specific technical conditions using different means of transmissions are subject to the right holder’s consent (para 48). In such circumstances, the new public criterion is irrelevant (para 50). Obviously, the principles established in AKM were, as indicated by the AG, not relevant for the court (para 52-56 of the AG’s opinion).

In this light, providers of online services will have to assess whether they merely enable natural persons to obtain private copies or whether they also provide access to protected content. As illustrated by the court’s decision, this requires a delineation of the different exclusive rights involved. In this context, it is noticeable that the answer given to the national court appears to be broader than might be expected from the grounds of the judgement. The ECJ stated that cloud services as described above conflict with the Copyright Directive where the provider “actively [involves] itself in the recording, without the right holder’s consent”. Apparently, one way to be “actively involved” in the recording is to communicate the work to the public, thereby providing access to the copyrighted content. However, other ways are also conceivable. For instance, it is unlikely that the private copying exception applies to cases where the service provider takes the initiative to make reproductions, or defines its object and modalities (para 25 of the AG’s opinion). It will be up to the court to shed further light on such questions in future cases.