Thursday, May 28, 2015

225th Anniversary of First U.S. Copyright Law

This Sunday, May 31st, marks the 225th anniversary of the first U.S. copyright law enacted under the new Constitution. The Copyright Act of 1790 is set out here. The first federal law allowed for the registration of copyright in "books, maps and charts" by filing with the U.S. District Court in the district where the author or copyright proprietor resided. Registration lasted for 14 years, and could be renewed for an additional 14 year term.

The following week, the very first copyright registration made under the new law was a book entitled "Philadelphia Spelling Book," registered in the U.S. District Court in Philadelphia on June 9, 1790.

Tuesday, May 26, 2015

Lack of Knowledge That A Patent Is Valid Is NOT A Defense To Patent Infringement

The U.S. Supreme Court ruled today, in a case of first impression, that a purported infringer's lack of knowledge that a patent is valid is not a defense to an induced infringement claim. In today's case of Commil USA v. Cisco Systems, the Supreme Court pointed out that an issued patent is presumed to be valid, and that a claim for infringement of an issued patent is a strict liability claim. As such, whether or not an infringer believes that the issued patent is invalid, the good faith believe in invalidity is not a defense. And the defendant infringer cannot introduce evidence of good faith belief of invalidity.

Thursday, May 21, 2015

Can Parmesan Cheese Exist Outside of Parma, Italy?

Trademarks can be tricky, particularly if the trademark contains the name of a geographic region. And more certainly so when the geographically-based name represents a common descriptor for a product.

Consider Scotch whiskey, or parmesan cheese, or Darjeeling tea, Kobe beef, or Roquefort cheese. Each of these products, and numerous others, are described by a geographic region. Many of these products originate and take their names from regions in Europe; Scotch from Scotland, parmesan from Parma, Italy, Darjeeling from an area in West Bengal, India (OK, not Europe, but still), Kobe from Japan's Hyogo Prefecture (ditto), and Roquefort for a region in southern France.

And many of these product originating regions are concerned that similarly named products are manufactured outside of their historical originating zones. For example, the U.S. Department of Agriculture lists some 20 plants in the U.S. that manufacture parmesan cheese.

Today, the World Intellectual Property Organization (WIPO) based in Geneva is enacting what is referred to as the Lisbon Agreement that expands the protection for geographical indicators. This agreement is set out here. The agreement is not being signed by a majority of WIPO members, but by a subset who are extremely concerned with extending legal protections for geographical indicators.

The U.S. is not a signatory to the Lisbon Agreement, and the U.S. Ambassador to the U.N., Pamela Hamamoto, strongly objected to the Lisbon Agreement in that it does not respect IP rights already developed by U.S. businesses. A copy of Ambassador Hamamoto's letter to WIPO is here.

WIPO's Lisbon Agreement does not alter U.S. trademark law, but it could lead to modification of trademark law in European countries that are signatories. U.S. producers of products bearing geographical indicators should be cautious in trading with these signatory countries, and should clearly understanding local IP law.

Wednesday, May 20, 2015

Judge Kozinski Forgot About Oscar Wilde, But The Ninth Circuit Didn't

Napoleon Sarony was a well-known photographer operating in New York during the middle part of the 1800s. He was renowned for taking photos of very famous people, including Samuel Clemens, William T. Sherman, Oscar Wilde and others.

Napoleon Sarony

Sarony took a photograph of Oscar Wilde in 1882, and a dispute thereafter developed over Sarony's ability to claim copyright protection -- and thereby control -- of the photograph. In 1884, in the case of Burrow-Giles Lithographic Company v. Sarony, the Supreme Court determined that a photograph represents copyrightable subject matter and that Sarony, as the photographic author, owned the copyright in the Oscar Wilde photograph.

Sarony's Photo of Oscar Wilde (1882)

The Copyright Office remains in possession of the Sarony photograph submitted as part of Sarony's copyright application, and the photo is displayed periodically in the Copyright Office, located about two blocks from the Supreme Court building in Washington, D.C.

Judge Alex Kozinski of the Ninth Circuit may not have seen the Sarony photo, and may not have remembered the Sarony decision, Contrary to the Supreme Court's 1884 decision, Judge Kozinski maintains that the subject of a photograph owns the copyright and not the photographer. Judge Kozinski's wrong headed views were overturned by the Ninth Circuit.

The case from earlier this week out of the Ninth Circuit reaffirms a basic tenet of copyright law relating to photographs: they are copyrightable, and the author of the photograph is the photographer and not the subject. The Ninth Circuit's recent case does not involve still images, however, but a sequence of still images that is a film that became internationally infamous and despised. But the Sarony principle still applies.

In July 2011, a small time actor, Cindy Lee Garcia, was cast in a cameo role in a film initially entitled Desert Warrior. She was paid $500 to speak two sentences: "Is George crazy? Our daughter is but a child?"

After the film was completed and heavily edited, the original concept of an action-adventure film of Desert Warrior became converted into an anti-Islam polemic and retitled Innocence of Muslims. Garcia's innocently spoken words were overdubbed into "Is your Mohammed a child molester?" Garcia only appeared on screen for five seconds.

Innocence of Muslims was uploaded to YouTube, translated into Arabic, and was blamed for fomenting unrest across the Middle East. Garcia claimed to receive multiple death threats for her role.

Garcia sued to enjoin YouTube from displaying the film online, claiming that she owned a copyright in her performance. The trial court was not impressed and denied the injunction. But on appeal to a three judge panel of the Ninth Circuit, Judge Kozinski granted the mandatory injunction and posited that Garcia would likely have a copyright interest in her photographed performance. "... Garcia might have a copyright interest in her performance ...She can claim copyright in her own contribution ..."

So, back to 1884. The Supreme Court held in the Sarony case that copyright in a photograph belongs to the photographer. The Supreme Court held that Sarony, as the photographer, was the author of the Oscar Wilde photo. Oscar Wilde, the subject, was NOT the author.
"[P]laintiff (Sarony) made the same ... entirely from his own original mental conception, to which he gave visible form by posing the said Oscar Wilde in front of the camera, selecting and arranging the costume, draperies, and other various accessories in said photograph, arranging the subject so as to present graceful outlines, arranging and disposing the light and shade, suggesting and evoking the desired expression, and from such disposition, arrangement, or representation, made entirely by plaintiff, he produced the picture in suit. 
"These findings, we think, show this photograph to be an original work of art, the product of plaintiff's intellectual invention, of which plaintiff is the author ..."
Yet, Judge Kozinski ignored the 1884 Sarony decision by recognizing a performance copyright by an actor in a film, Remember that a film is nothing more than a sequence of related photos. So, if the Sarony decision denied a copyright to the subject of a single photo, then it is difficult to understand how Judge Kozinski can find a copyright in the actor's presentation when multiple photos are taken and laid end to end in a film.

The Ninth Circuit reversed Judge Kozinski the other day, and strongly so. The court noted that the Copyright Office refused to register a copyright in Garcia's performance because "longstanding practices do not allow a copyright claim by an individual actor or actress in his or her performance within a motion picture." The Ninth Circuit determined that an actor cannot claim a copyright in his or her performance independent from the film as a whole. And further held that the actor did nothing to fix his or her performance into the film. The copyright requirement of fixation was accomplished by someone else, perhaps the director or producer, but not the actor.

The Ninth Circuit also noted an important difference between U.S. copyright law and the copyright law of many European countries. In Europe, authors have "moral rights" "to control the integrity of their works so as to guard against distortion, manipulation, or misappropriation." The U.S. copyright law does not recognize a similar moral right for performers. The World Intellectual Property Organization (WIPO), based in Geneva, has attempted unsuccessfully for several years to organize the world's countries into recognizing performance rights in audiovisual works. To date, no treaty recognizing performance rights has developed from WIPO's leadership.

Perhaps some day this may all change. But at present, the Supreme Court's 1884 view that the photographer, not the subject, owns the photographic copyright is being respected by the Ninth Circuit, and not disregarded as by Judge Kozinski.

Tuesday, May 19, 2015

No Does Not Mean No, When It Comes To Copyright Legal Fees

In a case of first impression, the Ninth Circuit held today that attorneys' fees may be awarded to a prevailing copyright owner even though the Copyright Act prohibits an award of fees.

Section 412 of the Copyright Act prohibits an award of attorneys' fees to a prevailing copyright owner if the claimed infringement occurs after first publication and prior to registration of the work, unless the work is registered within three months of first publication. In other words, if the work is not registered within three months of first publication, then no attorneys' fees are awarded as to any infringement that occurs prior to registration. This prohibition is intended to encourage prompt registration of a work following publication.

In today's case of Ryan v. Editions Limited West, the copyright owner failed to register her work within three months of first publication, and the defendant's acts of infringement occurred prior to registration of the work. So, the copyright owner was not awarded attorneys' fees under Section 412.

But wait. The parties entered into an agreement, prior to the claimed infringement, by which Ryan granted a license to Editions Limited West to sell posters of Ryan's art work. The agreement contained a clause that awarded attorneys' fees to the prevailing party in the event of breach. Ryan eventually sued for copyright infringement, among other things, claiming that Editions Limited West violated the license by allowing a third party to sell derivative works -- wall murals -- of Ryan's art. The trial court determined that copyright infringement had occurred. The court also determined that Ryan was entitled to an award of her attorneys' fees under the license even though she was not entitled to an award of attorneys' fees under Section 412 of the Copyright Act.

Editions Limited West appealed to the Ninth Circuit, arguing among other things that the Copyright Act preempts conflicting state law. Because the prohibition on fees under Section 412 is in conflict with a fee shifting clause of a license agreement, Editions Limited West argued that there can be no recovery by Ryan of attorneys' fees at all.

The appellate court acknowledged that this issue -- the preemption conflict between Section 412 and a fee shifting clause -- had not previously been reviewed by the Ninth Circuit and was largely an unanswered question. But the Ninth Circuit determined that there is no conflict -- and no preemption under the Copyright Act -- because rights under the license agreement are not exactly the same as rights under Section 412. That is, the contract contains an extra element not present under a copyright claim; the extra element of consent.

So even though Congress sought to punish a copyright owner for registration delay by denying attorneys' fees, the parties can work around the Congressional prohibition by their private agreement. No other circuit court has specifically determined that the Section 412 prohibition on fees does not work a preemption as to a fee shifting clause in a private agreement. But at least for now in the Ninth Circuit, No does not mean No when it comes to recovering attorneys' fees on a copyright infringement claim when a fee shifting agreement is in place.

Tuesday, May 5, 2015

California's Compelled Resale Royalty on Fine Art is Ruled Unconstitutional on Sales Outside of California

The Ninth Circuit today ruled that California cannot reach outside of its borders to compel the reseller of fine art to pay 5% of the sales price to the artist.

Like the never ending pour of beer into the bottomless stein, California believes that the artist of a piece of fine art should receive 5% of the price on resale of the art -- forever; regardless of the number of times that the art is resold following the first sale, and regardless whether the art is resold outside of California.

Note that the artist was presumably paid when the fine art sold for the first time. The issue here is whether California can compel that additional royalties be paid to the artist for an undetermined number of future resales.

Cal. Civ. Code Sect. 986(a) is part of California's Resale Royalty Act. This section provides that whenever a piece of fine art is sold, the seller is required to pay 5% of the sale price to the artist. If the seller fails to do so, then the artist can sue the seller for this statutory royalty plus legal fees. This section applies by its terms even as to sales that occur wholly outside of California, provided that the artist resides in California.

The Ninth Circuit had no trouble determining that this Section 986(a) violates the dormant commerce clause and must be stricken from the statute as unconstitutional. Specifically, only Congress has the power to regulate interstate commerce, and a state does not have the authority to interfere with interstate commerce when the regulated conduct occurs entirely outside the state's boundaries. This is so even if the impact of the foreign conduct is felt within the state. This is the "dormant" commerce clause.

So, the compelled royalty on out-of-California sales of fine art is stricken and severed from the statute. Yet to be determined is whether this statute can require the payment of a compelled royalty on sales inside of California.The en banc Ninth Circuit remanded the case to the court's three judge panel to determine whether the rest of the California statute is preempted by federal copyright law.

Monday, May 4, 2015

Loose (Customs) Lips Sink Ship(ment)s

The import or export of goods through a U.S. port of entry is challenging enough for shippers, but the inability of Customs to preserve confidential shipping information makes transit through a U.S. port even more unnerving.

A vessel manifest contains much information that might be confidential to an importer or exporter, including the identity of trademarks, goods, quantities and consignees. How helpful would it be to Pepsi, for example, to learn the quantity and sourcing of sugar shipped by Coca Cola? Or, for addidas to learn of Nike's recent shipments. You get the idea.

Certainly, information in a shipping manifest is important data for Custom's regulatory control purposes. At the same time, the public release of the vessel manifest information, that may contain a trade secret which should be kept secret, can lead to unfair competition and anti-competitive effects.

But U.S. law recognizes that the shipping information is generally subject to public disclosure. As Customs explains --
"According to privacy statute, 19 CFR 103.31 (d), the public is allowed to collect manifest data at every port of entry. Reporters collect and publish names of importers from vessel manifest data unless an importer/shipper requests confidentiality."
Customs does permit vessel manifest data that is confidential to be treated confidentially. Confidential information will not be sold by Customs to publishers provided that an importer or exporter files a form with Customs identifying the "names and numbers" to be kept secret. This confidential information can include the names of importers, exporters, consignees and trademarks. In theory.

But whether vessel manifest data is truly confidential depends on whether Customs timely processes the confidentiality request. Currently, Customs is incredibly S L O W to input these requests into its system. The Customs website cautions that it may take "60 - 90 days" to process these requests. Don't believe this. In reality, it has been taking up to six months!

Customs is really sorry about this delay and has been sending this notice recently to upset shippers:
"This is to acknowledge that U.S. Customs and Border Protection (CBP) has received and processed your vessel manifest confidentiality request. We have been understaffed and have a backlog of requests that we are working. Thank you for your patience."
Customs has the staff to sell the vessel manifest information to publishers, but does not have the staff to filter out confidential shipping information from public disclosure.


This coming week, President Obama will be in Portland, Oregon attending an event at Nike's world headquarters, seeking to boost support for his free trade policies. Oregon's Senator Ron Wyden, the Senate's free trade siren, will likely be in attendance providing support. But, why would any importer or exporter prefer to ship through a U.S. port when Customs cannot timely do its job and prevent public dissemination of confidential shipping data? Perhaps the President should fix Customs as the first step in improving free trade. Because the wrongful disclosure by Customs of trade secrets means that, as a practical matter, trading with the U.S. may have regrettable consequences.