New Copyright Proposal Addresses Performance Rights

According to the BNA, Rep. Melvin L. Watt (D-NC) introduced the Free Market Royalty Act (H.R. 3219) on September 30, 2013.  See “Rep. Melvin Watt Introduces Bill to Create Performance Right for Recording Artists,” BNA’s Patent, Trademark & Copyright Journal – Daily Update, No. 191 (Oct. 2, 2013).  Rep. Watt stated that this bill provides “a ‘performance right’ that will obligate AM/FM radio stations to compensate performers for the use of their music just as cable, satellite and internet radio are obligated to do.”  Press Release, “Congressman Watt’s Statement on the Introduction of H.R. 3219, the Free Market Royalty Act,” October 1, 2013.  (Note that the index of Rep. Watt’s press releases indicates that this was issued on October 1.  The release itself shows no date.  Congress.gov indicates it was introduced on September 30, and has already been referred to the House Committee on the Judiciary.)

Rep. Watt explains that under current law, when an AM or FM station plays a song, the composer and the publisher both receive royalties and the performer does not.  Press Release.  This bill proposes to level that playing field, and put compensation for music broadcasting on par with international counterparts.  Id.
As of this writing, there are no co-sponsors to the bill.  The text of the bill has not been received by the Library of Congress to post on its website, which states instead:

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Common Questions: Can I Copyright My ‘Knight in Shining Armor’ Story?

The short answer is – perhaps, at least parts of it.  Copyright law protects “original works of authorship fixed in a tangible medium of expression.”  17 U.S.C. § 102.  This protection attaches from the moment at which the expression is recorded – in other words, from the moment the pen hits the paper. 

While fictional stories can contain creative and innovative ways of expressing some common themes, the common themes themselves are not protectable.  These are standard story elements – such as a damsel in distress, who is later saved by the proverbial knight on a white horse (e.g., Rapunzel or Sleeping Beauty), the villain who seeks redemption (e.g., Star Wars), star-crossed lovers whose romance is tragic (e.g., Shakespeare’s Romeo and Juliet), an epic journey through which the hero has several adventures (e.g., The Iliad or the Odyssey), or corruption and betrayal by a close friend leading to a tragic downfall (e.g., Shakespeare’s Julius Caesar).  These story elements have existed for hundreds of years, and can be found even in Greek comedies and tragedies that we studied as students in literature classes or in theater programs.

These basic story elements are not protected under the Copyright Act, because to prevent others from copying them would render storytelling completely impossible.  They are generic, standard building blocks in any story.

Stories that include these elements, however, are not completely beyond the protection provided by the Copyright Act.  Instead, the way the story is told – the prose, the narrative, the alliterative descriptions that bring these story elements to life – are all the kinds of unique expression which the Copyright Act protects. 

If someone were to come along and copy verbatim several chapters of a book (or even a shorter amount), the author could still enforce his or her copyrights (subject to some defenses like fair use, expiration of copyright term or independent creation, joint ownership, etc., which are beyond the scope of this article) because of that exact duplication.  The author could not prevent other stories from being written that include a “damsel in distress” element or a “knight on a white horse” element – because those are the generic elements beyond the protection of the Copyright Act.  They can always pursue an action when exact copying of their original, creative text has occurred.

In a recent case, this dichotomy between the protection of the expression versus the lack of protection of an idea was explored further.  In Rucker v. Harlequin Enterprises Ltd., No. 4:12-cv-01135 (S.D. Tex. Feb. 26, 2013), the plaintiff – an author who had written (but not yet published) the first chapter of a romance novel – sued a book publisher for its publication of a full-length novel that allegedly copied her story about a “tall, dark and handsome,” wealthy and powerful male hero, and a beautiful red-haired heroine with green eyes, who was slender, young and strong-willed.  Rucker at 14-15.  She basically argued that the book publisher copied her idea (which she had submitted in a writing contest), put it into a full-length novel, and published it without her knowledge or consent.

The author did not provide any evidence that the publisher had actually seen her submission, but the Court later concluded that because the works were not substantially similar, there was no need to determine whether the book publisher, in fact, had access to her work prior to its own publication.  Id. at 4 n. 2.   In her complaint, the author identified 40 instances of direct infringement in a summary form, but did not provide any specific examples of them.  Id.at 1.  Because the book publisher provided copies of both works in its motion to dismiss, the Court was able to compare both works side-by-side to determine whether a claim for infringement could survive.  Id. at 1-2.

After reviewing both works, the Court recognized that while there were some similarities between the two works, these similarities were “not in legally protected elements.”  Id. at 12.  The Court explained that “a theme or trope that has long existed is not ‘expression’ that the Copyright Act protects.  Rather, infringement requires copying of constituent elements of the work that are original.”  Id.at 13.  In addition, “material or themes commonly repeated in a certain genre are not protectable by copyright, nor are so-called scenes a faire.”  Id.  “Scenes a faire” are later defined as involving “incidents, characteristics or settings which are as a practical matter indispensable, or at least standard, in the treatment of a given topic, what flows naturally from these basic plot premises.”  Id.(quoting Atari, Inc. v. N. Am. Philips Cons. Elec. Corp., 672 F.2d 607, 616 (7th Cir. 1982)). 

These elements “are not protected because they are strongly affiliated or connected with a common theme and thus are not creative.”  Id.  In other words, there are limited ways available in which these standard story elements can be described.  The Copyright Act does not preclude others from copying these same standard elements, because the ideas themselves are not copyrightable.  Id. at 9 (“Copyright law does not protect an idea, but only the expression of an idea.”) (citation omitted); see also Russ Berrie & Co. v. Jerry Elsner Co., Inc., 482 F. Supp. 980, 986 (S.D.N.Y. 1980) (“shared characteristics of both parties’ Santa toys of a ‘traditional red suit and floppy cap, trimmed in white, black boots and a white beard’ and ‘nose like a cherry’ [were] common to all Santas and not probative of copying.”) (as quoted by Rucker at 13).

Ultimately, the RuckerCourt concluded that “[t]he similarities that [the author] asserts are either stock elements of romance novels or plot elements that naturally flow from the broad themes that the two works share with other works in the same genre.”  Id.at 14.  The Court held that there was no actionable similarity between the two works and dismissed the complaint.  Because the Court held that allowing the plaintiff to amend the complaint would be “futile,” the dismissal was made without leave to amend and with prejudice.

The take-away point from these cases is that unique ways of telling a story will garner protection under the Copyright Act, but one author cannot prevent others from telling stories using the same standard story elements, provided that the other authors tell the stories in their own ways and do not copy verbatim what the original author wrote.

More on the idea/expression dichotomy can also be found in these prior posts:  Common Questions: Can I Copyright My Idea?  and When is a Fictional Character Copyrightable? (and, as later updated).

New Year’s Resolution: Always Read Terms of Service for Social Media Networks!

You should always read very carefully the various terms of service associated with the social media networks in which you participate – particularly with respect to ownership of the material that you post and/or share on these sites.   In other words, do you know who owns what you post?

Recently, one social media site’s public announcement highlighted this question in appalling clarity.  On December 17, 2012, Instagram announced that it had the right to sell any photo that you took and uploaded using its service – in other words, to “commercialize” it.  (SeeCNET’s article about the change in terms: Declan McCullagh, Instagram says it now has the right to sell your photos,” CNET, Dec. 17, 2012.) 
If you are unfamiliar with Instagram, it used to be a standalone company, but was recently acquired by Facebook and is used on Facebook to share customized photos with your networks.
Here’s the rub:  the right to distribute (or not to) is actually an exclusive right set forth in the Copyright Act as being owned EXCLUSIVELY by the copyright owner.  17 U.S.C. §106.  Not by a vendor who handles the distribution.
Unless the author has licensed its ability to redistribute an “original work of authorship fixed in a tangible medium of expression” (as an original photograph surely is) to another, any redistribution of a published work constitutes copyright infringement under 17 U.S.C. §501, and carries certain remedies and penalties depending on the context.
The public outcry in response to this notice was apparently widespread, as Instagram immediately appeared to retract this statement, and stated that users retain the copyrights in their original photographs even when posting them using Instagram’s tools.  Declan McCullagh and Donna Tam, Instagram apologizes to users: We won’t sell your photos,” CNET, Dec. 18, 2012; see also Instagram Blog, “Thank You and We’re Listening,” Dec. 18, 2012.  Its restatement of the policy suggested that Instagram believed the hue and cry to have been solely based on a misunderstanding of the revised terms of use and privacy policies.
 
In this restatement, Instagram explained that ownership rights would not change as a result of this policy, and neither would any privacy settings users have already set.  Current Version of Instagram’s Privacy Policy and Terms of Use, updated Dec. 18, 2012.
The Copyright Alliance points out that this explanation does not meant that Instagram cannot commercialize your images – in fact, the text that Instagram removed was merely a disclosure of the ways in which it “can” use your photos:
“Instagram has issued a statement saying that it has heard its customer’s complaints, is removing the clause that most offended its customers, and reverting to its old terms of use. But ironically, the clause that caused the outrage, and which Instagram says it has removed, was merely a disclosure and acknowledgment by the user of how Instagram could use a customer’s images. Removing that clause alone doesn’t change the license the user grants Instagram. Moreover, even if Instagram reverts to its current terms of service, those terms of use not only permit Instagram to commercialize user posted images in virtually unrestricted ways, they pass the responsibility for paying any royalties or fees owed for such commercialization on to the user who originally posted the works.” (emphasis added).  Read the Copyright Alliance’s full article for more on this point, “Instagram Still Has the Right to Commercialize Your Work (or Why You Should Read Terms of Service Carefully),” Dec. 21, 2012.
The lesson to be learned here is to be proactive with all of your social media use – understand what Terms of Service apply to your use, and whether the company will be using your information in a way with which you are not comfortable.  Review carefully to determine whether by using their site, you automatically grant the site a license to use your content (your text, pictures, video, whatever) without specific notice or obtaining your consent to that specific use. 
And, try to stay on top of changes to these policies in case changes are made that further impose on your privacy or intellectual property rights.  Many of these policies have a “these terms can be modified without prior notice” provision, but the sites may also host blogs that announce new features or changes to their services.  You might want to subscribe to them (through RSS feeds or email) so that you are notified promptly of any advertised changes. 
Here are links to some of the more commonly-used social media sites, and their relevant blogs (if available):
·       Facebook (“Facebook and privacy”; privacy policy; terms of service)
·       MySpace (privacy policy; terms of service; “learn more”)
·       Twitter (blog; privacy policy; status)
·       LinkedIn (blog; community guidelines; privacy policy)
·      Instagram (terms of service; blog)
·       Snapfish (terms of service; privacy policy; sharing FAQ)
·       Google (which owns Google+, YouTube, Blogger, Picasa, and Instagram competitor, Snapseed)
·       Reddit (blog; privacy policy; user agreement; rules; “reddiquette”)
You might also be interested in posts from The Copyright Alliance(their article on Instagram is here) or the Electronic Frontier Foundation(their article on Instagram is here) generally, as they both cover issues like these on a regular basis. 

Court-Ordered Restitution Vacated in Criminal Copyright Infringement Case, Based on Lack of Relevant Evidence

On November 9, 2012, the United States Court of Appeals for the District of Columbia Circuit (D.C. Cir.) vacated a district court’s decision to impose a restitution penalty against Defendant Gregory Fair (“Defendant Fair”) in favor of Adobe Systems in the amount of $734,098. U.S.A. v. Gregory William Fair, No. 09-3120, slip op. at 2 (D.C. Cir. Nov. 9, 2012) (appealing from Crim. A. No. 1:09-cr-00089-1 (D.D.C.)Pacer login required). The D.C. Circuit concluded that the district court had abused its discretion by awarding restitution, when the government failed to meet its burden to prove the amount of Adobe’s losses.
 

The Mandatory Victims Restitution Act (18 U.S.C. § 3663A) (“MVRA”) – upon which this restitution award was based – provides that victims of certain crimes may be awarded restitution to compensate them for their actual losses that resulted from the defendant’s crime. In this case, however, the government only introduced evidence of what Defendant Fair’s actual sales were – and based its request for restitution on that amount. It did not introduce any evidence that Adobe Systems had lost sales as a result of this criminal activity, or that its sales were diverted to Defendant Fair.

Underlying Facts

Defendant Fair pled guilty to charges of criminal copyright infringement (18 U.S.C. § 2319, 17 U.S.C. § 506(a)(1)(a)) and mail fraud (18 U.S.C. § 1341), after spending more than six years (Feb. 2001-Sept. 2007) selling counterfeit copies of outdated Adobe software and upgrade codes on eBay, which allowed his customers to obtain full copies of the current versions of these programs at a fraction of the regular price. Opinion at 3. “For example, a customer could first buy a pirated copy of outdated PageMaker software and an upgrade code from [Defendant] Fair for around $125 and then pay around $200 to Adobe Systems to upgrade to the most current version. The total price paid, around $325, would be less than half of the retail price of the authentic up-to-date Adobe program (approximately $700).” Id. at 2.

According to evidence presented at trial of the completed eBay transactions that filtered through PayPal, “[Defendant] Fair received, and he admitted receiving, approximately $1.4 million from his sales of pirated software on eBay.” Id. at 3. When Defendant Fair objected to the restitution claim, he initially sought a reduction to $455,000, the amount which he had actually withdrawn in currency from the PayPal account. Id.
   
Following the plea agreement, the district court sentenced Defendant Fair to 41 months’ imprisonment and three years’ supervised release – and ordered the $743,098.99 restitution payment to Adobe Systems (the balance of the amount identified on the government’s spreadsheet, less the $24,367 that the Postal Service had already released to Adobe Systems). Id. at 5.

Defendant Fair’s counsel argued that Adobe Systems was capable of distinguishing between its regular customers, and those who sought upgrades as a result of Defendant Fair’s scheme, and instead “chose as a ‘corporate strategy’ to permit [Defendant] Fair’s customers to purchase upgrades but to give no tech support to Fair’s software.” Id. at 5. This suggests two things: 1) that evidence of lost sales could have been available if the government requested it; and 2) that Defendant Fair may have had an argument that Adobe had acquiesced by its conduct (in part) to the so-called “criminal scheme.”

However, the government did not introduce any evidence that Adobe lost any sales due to Defendant Fair’s criminal activities. Instead, the government presented a spreadsheet tallying Defendant Fair’s eBay sales and “unsubstantiated, generalized assertions of government counsel regarding Adobe Systems’ lost sales.” Id. at 11. When presented with the opportunity to present such evidence, the government attorney attempted to shift the burden set forth in the MVRA to the defendant, arguing that because he “created an potential uncertainty in calculating pecuniary harm by selling outdated counterfeit software.” Id. at 12. The government also argued that the lost-profits rationale “makes no sense in the present context because Adobe Systems no longer sells the versions of the software that Fair sold.” Id. The appellate court was unpersuaded.  

On Appeal

The appellate court reviewed the record – and particularly the absence of any evidence of Adobe Systems’ actual losses, and agreed with the analysis of a Tenth Circuit opinion that commented, “we are very skeptical of the implicit suggestion that customers’ purchase of a certain number of copies of low-priced counterfeit software proves that those customers would have agreed to purchase the same number of copies from the legitimate seller for many times more.” Id. at 11 (quoting United States v. Hudson, 483 F.3d 707, 710 (10th Cir. 2009)) (internal quotations omitted). The Fair court also concluded that the government’s evidence in support of its claim for retribution was “merely speculative.” Id. at 12.

The appellate court also recognized that there were other avenues of recovery of restitution: specifically, under the “actual damages” provision for copyright infringement, the copyright owner can recover both actual damages and “any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” 17 U.S.C. § 504(b). These damages were not claimed in this (criminal) case.

Finally, the appellate court also considered whether a remand of any degree was warranted in this case – and concluded that it was not. The appellate court declined to give the government “‘a second bite at the apple’ absent special circumstances,” especially in light of the fact that the government had the explicit opportunity to introduce this type of evidence, and had declined to do. Id. at 15-16.

In summary, it appears that the prison sentence (and 3 years of supervised release) remains, but that the award of restitution alone has been vacated.

Google and Publishers Reach Settlement Over Google Books Lawsuit

On October 4, 2012, Google and the Association of American Publishers (AAP) announced that the publisher plaintiffs and Google have reached a settlement of their dispute over Google’s mass copying and uploading of books (whether in the public domain or still protected by copyright) to which it had obtained access through agreements with several large libraries. These digitized books were then made available for searching and sometimes downloading (in whole or in part) through Google’s Library project. (The docket for the publisher’s lawsuit was The McGraw-Hill Companies, Inc. v. Google Inc., 05 Civ. 8881 (JES) (SDNY).)
 

(Details about the 2005 lawsuit and a proposed settlement that was rejected by the Court can be found in earlier posts.)

According to AAP, Google and the publishers agreed that “U.S. publishers can choose to make available or choose to remove their books and journals digitized by Google for its Library Project. Those deciding not to remove their works will have the option to receive a digital copy for their use.” Andi Sporkin, Association of American Publishers, Press Release (Oct. 4, 2012). Notwithstanding this agreement, U.S. publishers can continue to “make individual agreements with Google for use of their other digitally-scanned works.” Id.

The AFP reports that “publishers will have the option to allow Google to display portions or the entire book content, or to sell the work through Google Play.” Rob Lever, “Google, publishers end long-running copyright case,” AFP (Oct. 4, 2012). Users of the service, then, have the ability to browse up to 20% of books, and then purchase a digital copy through Google Play. Id.; Sorkin, Press Release

The remaining terms of the settlement remain confidential, but it appears that the ongoing litigation between Google and the Authors’s Guild (Authors Guild et al. v. Google Inc., No. 05-08136 (SDNY) (trial court); No. 12-2402 (2d Cir.) (on appeal)) is unaffected by this settlement. “‘The publishers’ private settlement, whatever its terms, does not resolve the authors’ copyright infringement claims against Google,’ the Authors Guild said in a statement Thursday. ‘Google continues to profit from its use of millions of copyright-protected books without regard to authors’ rights, and our class-action lawsuit on behalf of U.S. authors continues.'” Michael Liedtke (AP Technology Writer), “Google, publishers shelve book-scanning suit,” AP (Oct. 4, 2012). That lawsuit remains suspended, pending appeal by Google of the Court’s grant of class certification for the authors whose claims were raised in the complaint. Grant McCool, “Authors Guild v. Google Lawsuit In U.S. Suspended Pending Appeal,” Reuters (Sept. 17, 2012).