COPYRIGHT LAW 2002 Professor Fischer CLASS 27: TECHNOLOGICAL PROTECTION MEASURES, REMEDIES

Fair Use and New Technologies: Google Search Engine Does fair use apply?

Wrap-Up Point: Reverse Engineering The courts have repeatedly held that reverse engineering can be a fair use. See e.g. Sega v. Accolade, Sony v. Connectix.

COPYRIGHT MISUSE Copyright misuse is a common law defense (deriving from patent misuse) that is growing in importance. It has been applied by the 4th, 5th, and 9th Circuits. Copyright misuse is the improper leverage of intellectual property rights into greater monopoly rights than Congress intended - so contrary to public policy

Technical Protection Measures The technical protection provisions in the Digital Millennium Act of 1998 arose out of fears that digital format made copying easy and cheap and existing copyright law provided ineffective protections against piracy of copyrighted works. These provide special legal protections where a copyright owner uses technlogical self-help measures.

DMCA s The DMCA distinguishes between Access Control Measures Copy Control Measures

DMCA section 1201(a)(1): Access Controls No person shall circumvent a technological protection measure that effectively controls access to a [copyrighted] work. This prohibits access to a work, not just access to a copy of the work. Thus this right broadens copyright owner’s rights. Does this result in overprotection?

DMCA 1201(a)(2): Anti- Circumvention Provisons Prohibits manufacturing, importing, offering to public, provide, traffic in technology that is primarily designed to circumvent technological protection measures, has only limited commercially significant purposes except to circumvent technological protection measures, or is marketed by that person with knowledge for use in circumventing technological protections.

1201(b) Rather similar but bars manufacture or trafficking in technologies that are primarily designed or produced for the purpose of circumventing technological measures that effectively protects a right of the copyright owner [as opposed to access to the copyrighted work]

DMCA s (d)-(j) Section 1201 (d)-(j) provides exceptions for, e.g., certain reverse engineering, law enforcement activities, certain library uses, certain encryption research, etc. On October 27, 2000, Library of Congress/Copyright Office issued a final rule identifying 2 classes of works exempt from access provisions

Exemptions following Copyright Office triennial inquiry 1. Compilations of lists of web sites blocked by filtering software applications 2. Literary works, including computer programs and databases, protected by access control mechanisms that fail to permit access because of malfunction, damage or obsoleteness In future there may be a need for more exemptions

REIMERDES Cause of action: DMCA 12(a)(2) Defense: Actions don’t violate DMCA and DMCA violates the First Amendment Did the defense succeed? Why or why not?

JUDGE KAPLAN Finds 1. Violation of 1201(a)(2) 2. Anti-trafficking provisions constitutional under first Amendment 3. Awards injunctive and declaratory relied

APPEAL Second Circuit ruled in November to affirm Judge Kaplan’s order Kathleen Sullivan, the Dean of Stanford Law School and a noted constitutional scholar, argued the appeal for the defendants.

STATUTE OF LIMITATIONS What is the limitations period for civil and criminal copyright actions?

CIVIL STATUTE OF LIMITATIONS 3 years (section 507) Courts are divided on “continuing infringement”, ie.e whether repeated acts of infringement constitutes a single continuing wrong or whether damages must be limited to infringements in last 3 years.

STATUTE OF LIMITATIONS Statute will be tolled if D fraudulently conceals infringement Even absent concealment, statute will be tolled during period when a reasonable person in plaintiff’s shoes would not have discovered infringement.

REMEDIES What remedies are available for civil copyright infringement?

REMEDIES Section 504 A. DAMAGES (either actual damages and profit OR statutory damages) s. 504 B. INJUNCTIVE RELIEF (s. 502) C. SEIZURE/IMPOUNDMENT (section 503) D. COSTS/ATTORNEYS FEES (s. 505) (PROPERTY TYPE OF REMEDIES)

INJUNCTIONS More routine than in many other civil cases Preliminary injunctive relief is generally awarded if P establishes p.f. case on validity and infringement (irreparable injury is presumed) Permanent injunction generally awarded if copyright validity and infringement are found

OTHER NONMONETARY RELIEF Impounding and destruction of infringing articles (section 503)

ACTUAL DAMAGES/PROFITS What are actual damages? (See Frank Music Case)

ACTUAL DAMAGES/PROFITS Actual damages are extent to which market value of copyrighted work has been injured or destroyed by an infringement including fair market value of licensing fee (Davis) If too speculative, will not be awarded Punitive damages are not generally awarded in copyright actions

INFRINGER’S PROFITS What profits is a prevailing plaintiff permitted to recover in a copyright infringement action? What must P prove?

INFRINGER’S PROFITS Prevailing P can recover infringer’s profits if attributable to infringement Plaintiff is only required to prove D’s sales that are reasonably related to the infringement Burden then shifts to D to prove elements of costs to be deducted from sales in arriving at profit. Doubt about computing costs/profits should be resolved in P’s favor.

FRANK MUSIC Had defendant met its burden in proving element of costs to be deducted from sales in arriving at profit? Why or why not? Can a copyright proprietor recover “indirect profits”? How should profits be apportioned? To what extent are joint defendants liable for an award of profits?

STATUTORY DAMAGES What are statutory damages? Can you recover statutory damages as well as actual damages and profits? Are there any prerequisites for statutory damages? See s. 412 When must P elect statutory damages? What amount of statutory damages may a court award? What if infringement willful?

DIGITAL THEFT DETERRENCE AND COPYRIGHT DAMAGES IMPROVEMENT ACT 1999 legislation raising statutory damages by 50% (See supplement)

STATUTORY DAMAGES See s. 504© Statutory damages can be between $750 and $30,000 per work “as the court considers just” For willful infringement, statutory damages can be increased to no more than $150,000. If infringement innocent, statutory damages can be reduced to $200

COMPILATIONS/DERIVATIV E WORKS For purposes of statutory damages, all parts of compilation/derivative work are to be regarded as constituting a single work

ENGEL V. WILD OATS What was the issue for the Southern District of New York? How did it resolve this issue?

COSTS AND ATTORNEY’S FEES See Fogerty v. Fantasy (1994) What was the subject of the split in the circuit? How did the Supreme Court rule on this split?