Digital Copyright II

Intro to IP – Prof. Merges

3.3.2010

News Flash

• Reed Elsevier v. Muchnick, Sup Ct. 3.2.2010 – held: unregistered works can be included in class action settlement without federal courts losing jurisdiction

• Follow-on to Tasini case

U.S. universities are getting a glimpse at a plan that would build a small music-royalty fee into the tuition payments they receive from students. If successful, the model — proposed by digital music strategist Jim Griffin on behalf of Warner Music Group — could be expanded to make ISPs the collector of such micropayments … http://blog.wired.com/business/2008/12/warner-music-gr.html

Grokster

• Specific facts

• Holding

Facts

• What did the evidence show about the intent of Grokster’s founders and principals?

• Note how other distribution schemes may differ . . .

Holding p. 602

• “one who infringes a device with the object of promoting its use to infringe”

Liability and product design: Menell

Legal Realism in Action: Indirect Copyright Liability's Continuing Tort Framework and Sony's De Facto Demise (with D. Nimmer), 55 UCLA L. Rev. 143 (2007)

Unwinding Sony, 95 Cal L Rev 941 (2007)

Perfect 10 v. Amazon

• Facts

• Holdings

Which Rights Are Infringed?

Perfect 10 claims that Google’s search engine program directly infringes two exclusive rights granted to copyright holders: its display rights and its distribution rights …. – IPNTA 5th at 705

Fair Use Factors

1. Purpose and character of the use: transformative, trumps “derivative rights market” claim -- ?

2. Nature of the copyrighted work3. Amount and substantiality of the portion

used – trumped by factor 1?4. Effect on the market for the work – “favors

neither party” - ?

IPNTA 5th at 708 Although an image may have been created originally to serve

an entertainment, aesthetic, or informative function, a search engine transforms the image into a pointer directing a user to a source of information. Just as a “parody has an obvious claim to transformative value” because “it can provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one,”Campbell, 510 U.S. at 579, 114 S.Ct. 1164, a search engine provides social benefit by incorporating an original work into a new work, namely, an electronic reference tool.

Korean War memorial

The tide turning?

The U.S. postage stamp based on a photograph of the Korean War Veterans Memorial statues on the National Mall did not constitute a transformative fair use of the copyrighted statues under the Copyright Act, the U.S. Court of Appeals for the Federal Circuit ruled Feb. 25 (Gaylord v. United States, Fed. Cir., No. 2009-5044, 2/25/10).

Caching and Searching: New Norms

• Parker v. Yahoo!, 88 U.S.P.Q.2d 1779 (ED Pa. 2008)

• Owner of copyrighted works claims infringement due to crawling, caching and search-enabling

• Held: Implied license to crawl when works posted online

88 USPQ2d at 1783

Parker contends that he has provided constructive notice to the defendants that he has not granted a license because he registered his works and included a copyright notice on his website.

The Court is persuaded that Parker's complaint conclusively establishes the affirmative defense of implied license.

At the very least, paragraph 24 of his complaint suggests that Parker knew that as a result of his failure to abide by the search engines' procedures, the search engines would display a copy of his works. From Parker's silence and lack of earlier objection, the defendants could properly infer that Parker knew of and encouraged the search engines' activity, and, as did the defendants in Field, they could reasonably interpret Parker's conduct to be a grant of a license for that use.

See also . . .

• Field v. Google, Inc., 412 F.Supp.2d 1106, 1116 (D. Nev. 2006)

• Held: failure to opt-out of crawling, caching, and search-enabling amounts to an implied license to do these things

• Google asserted that the plaintiff had impliedly licensed Google to reproduce his work because he had consciously chosen not to include the no-archive meta-tag on the pages of his website. 412 F.Supp.2d at 1116.

 

The district court agreed, finding that the plaintiff's conscious choice was “reasonably interpreted” by Google to be the grant of a license to Google for that use. Id. The court also noted that the opt-out meta-tag was a “well-known industry standard,” and that it would be impossible for Google to personally contact every website owner to ascertain whether the owner wanted to have her pages listed in search results or be accessible through cached links. Id. at 1112, 1116.The court thus concluded that Google had sufficiently established the defense of implied license . . .

Shifting baseline . . .

• Digital copyright becoming an opt-out regime now

• Presumption is that copying is ok, at least for search purposes

Limits to this being tested

• Google Booksearch controversy

• Current status: District Court in NYC has approved proposed settlement, contingent on certain events . . .

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Key Elements of Settlement

Digital Files Collection

Rightsholders & Registry

Rights License

Digital Files Collection

Digital Files Collection

Rights License

Rights License

Rightsholders & Registry

Key Issue: Should we multiply?

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Creation of Digital Files

Google Book Search (1.60)

Google Partner Program (1.62)

Rightsholder Exclusion Mechanisms:

Opt out (17.33)Removal (1.124, 3.5(a)

No Display Books (1.88)No Preview (1.89)

Fully Participating Library (1.58)

Cooperating Library (1.36)

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Google’s Use of Digital Files

Google Book Search

Broad Other Uses:Non-Display Uses (1.91, 2.2)

Key Business ModelsInstitutional Subscriptions

(1.74, 4.1)Consumer Purchases (1.32,

4.2)Advertising Revenue Model

(4.4)New Revenue Models (4.7)

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Deal is Non-Exlusive

“2.4 Non-Exclusivity of Authorizations. The authorizations granted to Google in this Settlement Agreement are non-exclusive only, and nothing in this Settlement Agreement shall be construed as limiting any Rightsholder’s right to authorize, through the Registry or otherwise, any Person, including direct competitors of Google, to use his, her or its Books or Inserts in any way, including ways identical to those provided for under this Settlement Agreement.”

Will the Registry Grant Other Licenses?

Key Question:How much licensing competition would emerge among

authors if they couldn’t organize collectively?

Incentives aren’t clearCollective mechanism creates

market power that wouldn’t exist otherwise

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Orphan Works and the “Private” Public Domain

Google Settling Parties Usually Want to Maintain Property Status Against

Third Parties:Westlaw/Lexis page numbers fightHatch Waxman patents v. generics

Facilitation of Use of Orphan Works through Opt Out Class

ActionScope of Releases (10.1,

10.2): Third parties excluded

Active Authors

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Unclaimed Funds: Who Gets the Orphan Dollars?

“6.3(a)(i) … (2) then, any remaining Unclaimed Funds will be paid on a proportional basis to the Registered Rightsholders until all such Rightsholders of a Book have received, in the aggregate …”