Friday, December 30, 2011

Golan v. Holder: Views on Partial Restoration

This past October 5, the Supreme Court heard oral argument in Golan v. Holder. This copyright case seeks to test the ability of Congress to grant copyright protection to foreign works that previously were deemed to be free to the U.S. public -- that is, in the U.S. "public domain."

Petitioner Larry Golan is a symphony conductor and a professor of the University of Denver's Lamont School of Music. Other petitioners are people who claim to rely on the free appropriation of work in the U.S. public domain for their livelihood. The petitioners argue that Congress did not have the power to enact the Uruguay Round Agreements Act of 1994. This legislation added new section 104A to the U.S. Copyright Act, thereby enabling the owner of an eligible foreign work that was in the public domain in the U.S., but still protected under copyright in the foreign source country, to obtain a "restored" U.S. copyright protection in the foreign work. This right to restore a U.S. copyright to a previously "free" foreign work commenced as early as January 1, 1996 if the foreign source country adhered to one of several copyright treaties (the Berne Convention, WIPO Copyright Treaty) or was a WTO member, or if the country was designated in a Presidential proclamation.

Larry Golan complains that prior to January 1, 1996 he was able to perform Prokofiev's Peter and the Wolf and Shostakovitch's Symphony 14, plus many other valuable works, freely -- without paying any royalties. This was so because many great works were created in foreign source countries at a time when the foreign source countries did not adhere to a copyright treaty. As such, these works were not eligible for protection under U.S. copyright law at the time the works were created or at the time the works were introduced into the U.S. Indeed, the current Copyright Act continues to require national eligibility. Current section 104 of the U.S. Copyright Act excludes published works from U.S. copyright protection unless on the date of publication one of the authors was a national or domiciliary of the U.S. or of a treaty country, or a stateless person, or the work was first published in the U.S. or a treaty country, plus other coverage options. So, authors first publishing their work in Ethiopia, Afghanistan, Iran, Iraq or other sourcing states who are not treaty, WIPO or WTO members continue to have their works excluded from copyright protection in the U.S. These works remain free to use today. A complete listing of countries, together with their copyright treaty status, is provided by the U.S. Copyright Office.

There are two primary types of foreign works that are subject to copyright restoration under Section 104A. The first type of work is one that was lost to the public domain because of a mess up. That is, the work is a foreign work that has copyright protection in its source country that is a copyright treaty country, but the owner of the work failed to comply with U.S. formalities. The most common formalities include the obligation to make a timely renewal filing and to include a copyright notice on the published work. The second type of work restored under Section 104A involves a foreign work that was not previously permitted to be copyright protected in the U.S. because of lack of national eligibility. If by January 1, 1996 the foreign source country was a treaty, WIPO or WTO member then this second type of foreign work could receive the benefit of U.S. protection for the first time ever.

Getting back to Larry Golan for a minute, Larry argues that he should be free to use all foreign works in the public domain without paying a royalty notwithstanding how the work came to be in the U.S. public domain in the first place. He argues that once a work is in the public domain, it remains in the public domain forever. To borrow from a religious argument, once a soul arrives in hell it remains in hell forever. This is a stark analogy to be sure, but the impact of Golan's argument on Prokofiev's copyright successors is also stark. Golan does not recognize the possibility of something less stark; such as a temporary or transitional state of purgatory where a soul resides for a period of time subject to removal.

[If the religious analogy is too harsh, then consider a comparable analogy pertaining to a person's presence in jail. A person can be present in jail in one of two ways: by placing himself or herself in jail upon commission of a crime or by being born in jail. Society has completely different interests in a person's presence in jail depending how the person came to be in jail in the first place. It seems to me that we should consider why a person is present in jail before we throw away the key.]

For Golan, the state of copyrightlessness is all or nothing. Either there is a copyright or there is not, he argues, and if there is no copyright then there cannot ever be a copyright. Hence, according to Golan, he should be permitted to conduct Peter and the Wolf, and other nonprotected works, freely without royalty or other restriction.

I do not share Golan's all or nothing views. Indeed, I have two separate views of the restoration of U.S. copyright in foreign works. I have one view as to restored foreign work that was eligible for protection in the U.S. but lost protection due to the owner's mess up -- failure to comply with formalities. I have another, opposite view as to restored foreign works that never previously had the right to U.S. protection.

If a foreign work from a treaty, WTO or WIPO member source country was eligible for copyright protection in the U.S., but if the work lost this protection for failure of the copyright owner to comply with the U.S. recording and notice laws, then I have little sympathy for the resulting public domain status. For the same reason that every person, notwithstanding his or her country of origin or immigration status, who drives a motor vehicle on a U.S. highway is required to comply with U.S. driving laws, every copyright owner was required to comply with U.S. copyright law formalities prior to January 1, 1996. What is good for a U.S. citizen should be good enough for a non-citizen. Everyone should be treated equally. If a foreign citizen does not know the U.S. rules of the road prior to driving in the U.S., then they should read up on the law. If the owner of a foreign work does not know about U.S. copyright formalities, then retain legal counsel or borrow a library book and learn about U.S. copyright law. But it is not appropriate in my view for the owner of a foreign work to bring the work into the U.S. in order to take advantage of the U.S. market and U.S. law, but then complain that the law is too harsh when it comes to failure to comply. To the extent that a foreign work was eligible for copyright protection in the U.S., but lost the protection due to the copyright owner's own conduct, then this type of work should not be given a free pass out of the public domain jail.

A foreign work that was never eligible for U.S. copyright protection, however, is in a completely different circumstance than a work that was eligible but lost protection due to failure to comply with U.S. law. Prokofiev never had an opportunity to obtain U.S. copyright law protection for Peter and the Wolf until January 1, 1996, with the addition of Section 104A to the Copyright Act. Prokofiev never lost pre-existing protection as a result of a mess up on his part. He never had protection -- ever -- because Congress never extended protection to him or to his work created in the early Twentieth Century in the Soviet Union.

I submit that the U.S. public domain should not be viewed as an end in and of itself, but rather as a condition that exists based on how a work is protected, or not protected. If a work is never protected under U.S. copyright, then the lack of any protection is not a condition of being in the "public domain" as much as a condition of non-protection. [The concept of public domain and the concept of non-protection are admittedly nuanced and, in any event, live close to a common border, but they indeed can live separate lives.] In this event, the "public domain" is not a protectable property interest owned by other users but is merely a present condition caused by a lack of protection. Congress has authority in my view to add protection where none ever existed. In this case, the lack of protection is more akin to being born in jail. This is particularly so in that the owner of the work has done nothing to cause the loss of protection. On the other hand, if there previously was protection to a foreign work, but if protection was lost due to a failure on the part of the copyright owner, then this voluntary failure to adhere to required formalities creates a permanent jail -- abandonment to the public domain.

Furthermore, the expectations of users differ depending on how a work came to be placed in the public domain. If a free user knew that the work was protected at a point in time but then lost protection due to faulty conduct by the work's owner, then the free user can be said to have a firmer expectation of continued free use. This differs from the expectation of a free user who knows that a work was never protected through no fault of the work's author. This type of free user expectation is more transitional. Enjoy it while you can, but it may not last.

Public domain need not be considered as an all or nothing proposition. If a copyright owner voluntarily placed a work into the public domain by failing to comply with formalities, or if the copyright terminated for other technical reasons, then the copyright should not be revived. But if an owner of a work never had protection to begin with, then the right to protection should begin at some point. January 1, 1996 is as good a start date as any.

It will definitely be interesting to see how the Supreme Court rationalizes the common restorative treatment that Section 104A provides to two completely different "public domain" conditions. My prediction is that Section 104A will be found to be constitutional as to restorations based on the lack of national eligibility, but unconstitutional as to restorations based on failure to comply with formalities.

Thursday, December 29, 2011

James Joyce and Stephen Dedalus

Today is the 95th anniversary of the first publication in the United States in 1916 of the James Joyce classic Portrait of the Artist as a Young Man. The novel features the Joyce alter ego Stephen Dedalus in a semi-autobiographical examination and rejection of traditional Irish values. The novel is ranked by Modern Library as the third most important English novel. Joyce's other great classic, Ulysses, is ranked No. 1.

James Joyce, c. 1915

Ghost Rider Writer Sues Marvel Comics - And Loses

Yesterday’s decision by Judge Katherine Forrest of the southern district of New York federal court provides a glimpse of insight into the development and ownership of popular comic book characters. The case pits Gary Friedrich, the creator of the Ghost Rider character, against Marvel Comics, publisher of the Ghost Rider comic books.

Ghost Rider is a super hero with a skeletal head emitting fire, riding a fire emblazoned motorcycle. The character became popular, spawning video games and a 2007 Nicholas Cage movie (also starring Eva Mendes and Sam Elliot).

According to the court, Friedrich conceived and developed the Ghost Rider super hero character in the early 1970s, including additional characters of Johnny Blaze, the Ghost Rider’s alter ego, Roxanne Simpson and Crash Simpson. Friedrich conceived and wrote the text for the comic book featuring these new characters. Others also wrote and contributed to some of the episodes.

Friedrich sued Marvel for various causes including copyright infringement. The court easily found that Friedrich did not have a copyright claim in that during the period of time that he developed the Ghost Rider characters, Marvel paid Friedrich by check containing an assignment legend. Friedrich acknowledged that he endorsed the checks, and that the checks "said something about by signing over the check I gave over my rights to * * * Marvel." And then in 1978, Friedrich signed a written assignment document by which he expressly granted "to Marvel forever all rights of any kind and nature" in the work he created.

The court pointed out that whenever anyone endorses a check subject to a condition, he accepts the condition. As such, any right that Friedrich may have had in the Ghost Rider characters were assigned by virtue of his endorsement of the checks containing the assignment language. Further, the court observed that the 1978 assignment "undoubtedly conveyed whatever renewal rights he [Friedrich] may have retained, if any."

So, the bottom line is that endorsing a check with assignment language has consequences, as does the signing of a general assignment document. If you are a graphical artist or writer who creates highly valuable characters, do not endorse checks containing assignment language unless you intend to assign your rights. And do not sign a general assignment document unless you intend to fully assign all rights. If your intent is to assign only certain limited rights, and to retain the balance of the rights, then make certain that the assignment language clearly describes what is being assigned and what is being retained.

Tuesday, December 27, 2011

Resale of Artwork May Yield New Fees to Original Artists

Last week, Congressman Jerrold Nadler from New York and Senator Herb Kohl of Wisconsin introduced into the House and Senate proposed legislation that would effectively tax the resale of valuable works of visual arts (consisting of original and limited edition photographs, paintings, drawings, prints and sculpture), and harm the business of large auction houses, including Sotheby's and Christies. A copy of the jointly introduced bill is set out here. The proposed legislation would compel the payment of 7% of the sale price of visual art sold at auction following the first sale by the original artist, provided that the art sells at auction for at least $10,000, and provided that the auction house sold at auction during the previous year more than $25 million of visual art. Failure to pay the 7% would permit the copyright owner to sue for infringement and recover statutory damages up to $150,000. The fee would be payable to an artist agency with authority to pay a portion of the collected fee to the original artist, or the artist's estate, and a portion to non-profit art museums to help fund purchases of works of visual art.

This proposed legislation borrows from the European concept of droit de suite which permits a form of resale fee to the original artist. It also borrows from a similar California statute that authorizes resale royalties of art auction sales made in California (the California art resale fee is only 5%). Here is the link for the Resale Royalty Act, Cal. Civil Code §986.

It seems to me that there are some issues to be considered with the proposed legislation:

1. Since failure to pay the 7% resale fee subjects the auction house to an infringement claim, the auction house can perhaps avoid paying the fee if it has no concerns about being sued for infringement. This would be the case if the original artist waived or assigned the copyright interest in the visual art to the first purchaser, and if the waiver or copyright interest is transferred as part of each further resale of the art. In this case, there would not be a likely plaintiff with standing to bring an infringement lawsuit if the 7% is not paid. Indeed, and particularly as to lesser known artists, this proposed legislation may encourage auction houses to obtain a "compulsory" assignment of an artist's copyright interest as part of the first sale of the artwork.

2. The owner of a valuable work of visual art can avoid the 7% tariff by auctioning the work at a small auction house with preceding year sales of less than $25 million. Indeed, this legislation may encourage the development of a greater number of small auction houses specializing in a few high value pieces. One potential problem, though, is that the smaller auction houses may not generate sufficient revenue to pay for errors and omission insurance covering the risks associated with the evaluation, valuation and transfer of valuable high-end art.

3. One portion of the proposed legislation provides that visual art would not be subject to the copyright notice provisions of Section 401 of the Copyright Act. Section 401 as presently written does two things. First, it provides that a copyright notice is discretionary, not mandatory (although, prior to 1989, copyright notice was mandatory). Second, Section 401(d) provides that if the copyright notice is employed then an infringer's evidence of innocence shall be given no weight in an infringement trial. So, for new works created after 1989, the use of a copyright notice makes practical litigation sense in order to receive the evidentiary benefit of Section 401(d). Avoiding this evidentiary benefit makes no sense.

4. The task of keeping track of artists and their heirs may be difficult. The Copyright Office, copyright lawyers and copyright users have collectively encountered considerable difficulty with "orphan works." The lack of an obligation under these new bills to compel the filing of contact information for visual art artists will almost certainly cause the loss of resale payments that may come due to original artists or heirs, who may have long forgotten about a lost piece of art.

No progress has yet been made to these new bills and, given the election uproar expected in 2012, it is not completely clear how well these new bills will advance. Of further note, the artist community has not yet joined together to provide a unifying voice in favor of these bills. We will see how all this works out.

2011: An Intellectual Property Year In Partial Review

The year 2011 produced many significant IP cases, some of which were discussed in previous posts in this blog. Here are some highlights:

Georgia State University: College Course Electronic Packets ~

Cambridge University Press v. Board of Regents of University System of Georgia (08-cv-1425, N.D. Georgia). This case remains pending before Judge Orinda D. Evans in the federal court in Georgia. The plaintiffs, Cambridge University Press, Oxford University Press, Inc. and Sage Publications, Inc., seek to prevent the Georgia State University campus library from providing to university students electronic course packets of some or all of the plaintiffs’ copyrighted publications. I originally blogged about this case in my post of June 24, 2011. While Georgia State pays publishers’ royalties for print versions of course packets containing copyrighted publications, it does not obtain permission and pay royalties for electronic course packets. GSU generally argues that providing a few pages or chapters from copyrighted material in electronic form as part of a course packet is fair use in an educational context. Judge Evans conducted a bench trial this past June 2011. The parties are presently engaged in post-trial briefing and the court has not yet made a decision on the copyright merits. It will be interested to learn the court’s infringement and fair use views of copying and electronic distribution of copyrighted material for educational purposes.

Appropriation Art on Appeal: Cariou v. Prince ~

Patrick Cariou v. Richard Prince and Gagosian Gallery, Inc. (08-cv-11327, S.D.N.Y.; 11-1197, 2d Cir.) In my post of March 27, 2011 I wrote about the copyright infringement claim brought by photographic artist Patrick Cariou against well-known appropriation artist Richard Prince. Cariou sued Prince and Gagosian Gallery for infringement of his photos. According to the N.Y. trial court, some 35 photos taken by Cariou of Jamaican Rastafarians were copied and displayed, wholly or partially, by Prince, with some of the Cariou photos having been modified or painted over. Prince argued that his treatment of the Cariou photos amounted to fair use.The trial court held that Prince’s conduct was copyright infringement and that Prince’s use of the Cariou photos did not constitute fair use. The defendants appealed to the Second Circuit Court of Appeals.

To date, amicus briefs have been filed by Google, Art Museums and Association of Art Museum Directors, and The Andy Warhol Foundation for the Visual Arts, Inc. Google’s brief addresses in part the type of transformation that may be required in order to find the existence of fair use, and observes that large scale digitalization by a search engine may amount to sufficient transformation so as to constitute fair use.

The amicus brief of the art museums observes that appropriation art – the use of pre-existing work of another in the creation of new art – has enjoyed a long and admired history, including examples by Picasso, Duchamp (Mona Lisa with a mustache) and Warhol, and evolving through Dadaism and contemporary pop art. The museum amici criticize as flawed the infringement and fair use analysis of the trial court, criticize the direct and vicarious liability imposed on an art museum by the claimed infringing conduct of an artist, and criticize the trial court’s order of impoundment and destruction of Prince’s works. The museum amici argue that the trial court’s decision “could punish cultural institutions and censure educational activities that pose no threat to the original copyright holder, and it could harm the public by limiting access to significant creative works.”

The Andy Warhol amicus brief observes that it is common for artists to appropriate preexisting imagery and that the trial court employed a too narrow view of transformative conduct in finding the lack of fair use. The brief argues that “Cariou’s objective was ‘classical … portraiture.’ * * * His photographs of Rastafarians appear to celebrate the Rastafarians by depicting them respectfully in their actual environment * * *.” The brief suggests that Prince employed Cariou’s original photos for another purpose in creating Prince’s new work. “Whatever Prince’s purpose was, it was not that. Prince uses elements of Cariou’s utopian images to depict a post-apocalyptic world that exists only in Prince’s imagination.” The Warhol brief argues in part that there can be “a wide array of transformative meaning” applied to the use of existing images in creating new art with new expression. The Warhol brief criticizes the trial court’s fair use and injunction analysis.

Cariou’s opening brief will likely be filed in late January 2012 and the briefs of the defendants are not expected to be filed until next March. Oral argument has not been scheduled but may occur prior to the end of 2012. A final decision from the Second Circuit may not come down until sometime in 2013.

Betty Boop: Lost in the Public Domain ~

Fleischer Studios, Inc. v. A.V.E.L.A dba Art & Vintage Entertainment Licensing Agency. This past February 23, 2011, a three-judge panel of the Ninth Circuit issued a bejeepers, good-golly opinion holding that Fleischer Studios lost its trademark and copyright interests in the Betty Boop cartoon character. The court held that the lovable waif was ownerless with no basis for protection from defendants who, without permission, copied the cartoon image onto consumer goods. The court determined that Fleischer failed to establish the chain of title for the copyright and trademark rights. The court further held that the employment of the image of Betty Boop in consumer goods was not an impermissible trademark use, because the image was not being used as a trademark but as a functional product. Of the three judges on the panel, only Judge Susan Graber filed a dissent strongly questioning the basis for the majority decision.

But then on August 19, 2011 the Ninth Circuit panel withdrew its February opinion and issued a revised opinion. The revision did not change the decision but it did revise the trademark analysis. Rather than base the trademark holding on the concept of no trademark use due to aesthetic functionality, the opinion determined that the Betty Boop image was not inherently distinctive and that there was no proof of secondary meaning (even though Fleischer argued that the image had been used on merchandise since 1972). Judge Graber continued to strongly dissent. The Ninth Circuit refused to consider this case en banc.

So, at present the law of merchandise trademark infringement is a bit muddled in the Ninth Circuit. Boop boop be doop. Perhaps the Supreme Court will allow Fleischer’s anticipated petition for writ of certiorari.

Criminalizing an Employee's Computer Use ~

USA v. Nosal. My blog post of May 2, 2011 discussed the Ninth Circuit’s opinion that criminalizes, under the Computer Fraud and Abuse Act, what might otherwise be viewed as innocent computer usage by a company’s employees. In October, the Ninth Circuit agreed to hear en banc the extent to which an employee’s use of a work computer can constitute criminal conduct. Oral argument was held en banc on December 15, 2011. A decision is expected this coming spring. The full en banc oral argument can be watched and heard at this link.

Don't Remove That Credit! ~

Murphy v. Millennium Radio Group. The Third Circuit held that the removal of a credit from a copyrighted work may violate the Digital Millennium Copyright Act

Foreign Internet Posting Triggers U.S. Copyright Law ~

In my July 18, 2011 blog post, I discuss the Florida district court’s holding in Kernal Records Oy v. Mosley that the first publication of an Australian work on the Internet constitutes first publication in the U.S. Publishing by first posting directly to the Internet causes the U.S. Copyright Act to apply to the foreign work for purposes of determining enforceability of the foreign work in the United States.

A New York State of Mind ~

In Penguin Group (USA) Inc. v. American Buddha, an Oregon company that uploaded copyrighted images onto the Internet in Oregon was sued in New York by a New York resident - copyright owner. The New York state appellate court held that a New York copyright plaintiff alleges an injury in New York state for jurisdiction purposes when its copyrighted work is uploaded without permission onto the Internet outside of New York. Bottom line, wherever you are, you may be sued in a New York court if you upload copyright content belonging to a New York resident onto the Internet.

Hot News is now Cold ~

My post of June 20, 2011 discussed the holding in Barclays Capital Inc. v., Inc. This case denied the existence of the so-called “hot news” claim, holding that there is no such thing under copyright law since copyright law cannot protect factual data, including hot, new data. In the Barclays case, a news aggregator was permitted to copy fresh news reports developed by Barclays, thereby using Barclays' own research in direct competition.

More Odds and Ends ~

There are several pending IP cases that may be resolved in 2012. One such case, presently before the Supreme Court, Golan v. Holder, will determine whether copyrights to foreign works lost in the U.S. due to failure to observe U.S. copyright technicalities (e.g., lack of renewal filings, failure to provide copyright notice, etc.) were properly restored in 1994 by the Uruguay Round Agreements Act. Oral argument occurred on October 5, 2011, and a decision is expected this coming spring. Listen to the oral arguments at this link. And, the Supreme Court will likely decide this spring the Mayo Clinic v. Prometheus patent case that posits whether the Prometheus patents underlying a blood test are protectable by patent law, thereby inhibiting a physician’s ability to treat patients. Read the oral argument transcript here

And let us not forget the Google book copying infringement case. Its settlement agreement was rejected by the New York trial court and its status remains unresolved.

Happy New Year, everyone.

Friday, December 2, 2011

The Copyright Office Needs Google

The U.S. Copyright Office needs help. Like an old library, the Copyright Office maintains a card catalog indexing system for its pre-1978 records. And the Copyright Office has a lot of cards, over 46 million. These index cards are housed in wooden drawers contained within row after row of wooden boxes. Updates to the cards have been made in pen directly onto the cards. Recognizing that this type of indexing system has not been in fashion for some time, the Copyright Office is now attempting to join the digital age by scanning its index cards and somehow creating a database of pre-1978 filings going back to 1790.

Maria Pallante explains it this way: "Have you ever attempted to build an electronic index and searchable database of a complex and diverse collection of 70 million imaged historical records? Neither have we. One of the largest card catalogs in the world, the U.S. Copyright Office card catalog comprises approximately 46 million cards."

The Copyright Office has established a blog to allow public comments and suggestions on how best to digitally index and document its pre-1978 records. It also provides updates on its digitization goals and status.

Note to the Register, call Google.