COPYRIGHT LAW 2006 Professor Fischer CLASS of April REMEDIES AND TECHNOLOGICAL PROTECTION MEASURES

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

Kelly v. Arriba Was Defendant's display on a visual search engine of lower resolution "thumbnails" of copyrighted images appearing elsewhere on the Internet, without the copyright owners' permission, a fair use? What about the display of the full image? Does Google’s visual search engine infringe copyrights?

Kelly v. Arriba Defendant's display on a visual search engine of lower resolution "thumbnails" of copyrighted images appearing elsewhere on the Internet, without the copyright owners' permission, is a protected fair use of those images under the Copyright Act. The court further holds that defendant's display of the full copyrighted image as part of its search engine results, either via inline linking or framing, infringes the copyright owner's right to publicly display the work. Does Google’s visual search engine infringe copyrights?

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? - see Davis case

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/ DERIVATIVE 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?

LESSIG The Future of Ideas

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? Is Judge Posner’s statement in Gonzalez (see supplement) sound?

Law: Protection for Technological Protections WIPO Copyright Treaty of 1996 (WCT) (Art. 11) see (46 members on 3/24/2004) at: entered into force 3/6/2002

WCT Art. 11 Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law.

DMCA Digital Millennium Copyright Act of 1998 (DMCA) is U.S implementing legislation for the WCT – previous attempts to introduce similar legislation prior to the WCT had failed Why did the copyright industries demand additional legal protection for digital works?

Technical Protection Measures The technical protection provisions in the Digital Millennium Act of 1998 responded to 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 technological self-help measures. What is technological self-help/technological protections for copyrighted works? What special protections does the DMCA now provided for technological protections?

DMCA s kinds of protection. The DMCA distinguishes between Access Control Measures (stronger) Copy Control Measures (weaker) Note – not technology-specific

Access Controls: DMCA section 1201(a)(1): “No person shall circumvent a technological protection measure that effectively controls access to a [copyrighted] work…” This prohibits access to a work that is encrypted or protected by similar technologies, not just access to a copy of the work. Thus this right broadens copyright owner’s rights. Does this result in overprotection? Does it destroy fair use?

DMCA 1201(a)(2): Anti- Trafficking Provisions – Access Prohibits manufacturing, importing, offering to public, provide, traffic in technology that is primarily designed to circumvent technological protection measures that effectively control access, 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. How is this different from the access control provisions?

Anti-trafficking: Copy Controls – s. 1201(b)(1) Rather similar to access controls 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]

Penalties under DMCA What civil and criminal penalties are applicable to violations of the DMCA?

Penalties under DMCA S (civil) – injunctive relief, damages (actual or statutory ($200 to $2500 for act of circumvention, device, product etc..; triple damages for repeated violation), costs, attorney’s fees). Reduction possible for innocent violation, special innocent infringer provision for schools, archives, nonprofit libraries. S (criminal) – first offense: fine up to $500,000 and/or imprisonment up to 5 years; subsequent offense: fine up to $1 million and/or imprisonment up to 10 years –exempts schools, archives, nonprofit libraries

Does Fair Use Survive the DMCA?

S. 1201(c) (1) provides: “Nothing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title.” -also doesn’t affect vicarious or contributory liability or free speech rights

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, privacy protection, protection of minors, security testing of computer systems Also – rulemaking provision under s. 1201(a)(1)(B)-(D).

First Triennial Inquiry Are there particular “classes of works” as to which users are, or are likely to be, adversely affected in their ability to make noninfringing uses if they are prohibited from circumventing such technological measures On October 27, 2000, Library of Congress/Copyright Office issued a final rule identifying 2 classes of works exempt from access provisions

Exemptions following first 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

Second Triennial Inquiry Announced Oct. 23, 2003 Exempts 4 categories of works

Exempted category 1 1) Compilations consisting of lists of Internet locations blocked by commercially marketed filtering software applications that are intended to prevent access to domains, websites or portions of websites, but not including lists of Internet locations blocked by software applications that operate exclusively to protect against damage to a computer or computer network or lists of Internet locations blocked by software applications that operate exclusively to prevent receipt of .

Exempted category 2 (2) Computer programs protected by dongles that prevent access due to malfunction or damage and which are obsolete.

Exempted category 3 (3) Computer programs and video games distributed in formats that have become obsolete and which require the original media or hardware as a condition of access. A format shall be considered obsolete if the machine or system necessary to render perceptible a work stored in that format is no longer manufactured or is no longer reasonably available in the commercial marketplace.

Exempted category 4 (4) Literary works distributed in ebook format when all existing ebook editions of the work (including digital text editions made available by authorized entities) contain access controls that prevent the enabling of the ebook's read-aloud function and that prevent the enabling of screen readers to render the text into a specialized format.

Universal City Studios v. Reimerdes CB p. 581 Plaintiffs: 8 major motion picture studios Defendants included (l) Eric Corley a.k.a. Emmanuel Goldstein, publisher of 2600: The Hacker Quarterly Ps alleged violations of DMCA – how did defendants respond?

Jon Johansen: Creator of DeCSS Norwegian teenager: 15 years old when he created DeCSS Prosecuted under s. 145(2) 145(2) of the Norwegian Criminal Code, which punishes "any person who by breaking a protective device or in a similar manner, unlawfully obtains access to data or programs which are stored or transferred by electronic or other technical means." Acquitted in Jan. 2003, under appeal

See an essay by Nowegian professor Jon Bing at: utions/Johansen_DeCSS_case/ _bi ng_johansen_case_summary.html utions/Johansen_DeCSS_case/ _bi ng_johansen_case_summary.html For a Norwegian legal perspective

Protesters at the federal trial (2000) “Electronic Civil Disobedience?”

REIMERDES Cause of action: DMCA 12(a)(2) – anti- trafficking provisions Defense: Actions don’t violate DMCA and DMCA violates the First Amendment/Copyright Clause by obstructing fair use and DMCA violates limits on duration in Copyright Clause

JUDGE KAPLAN Finds (after full jury trial) 1. Posting DeCSS was a violation of 1201(a)(2) that was not protected by statutory exceptions for fair use, good faith encryption research, or security testing or by fair use, as was linking where knew offending material on linked-to-cite and knew unlawful circumvention technology and link created to disseminating that technology.. 2. Anti-trafficking provisions constitutional under first Amendment 3. Awards injunctive and declaratory relief- to deter

REIMERDES 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. Review by the U.S. Supreme Court is not sought

More DMCA litigation Considerable number of cases have been brought under the DMCA Some, such as EFF Fred Von Lohmann, have alleged that the unintended consequences of the DMCA litigation is that it is being used not to control piracy but to stifle competition, to impede free expression and scientific research, and to jeopardize fair use. See: nintended_consequences.html nintended_consequences.html Some prominent commentators like Pamela Samuelson have argued for revision of DMCA Copyright industries counter that the DMCA is necessary to combat the growing problem of piracy

321 Studios Case Which provision of the DMCA was at issue?

321 Studios Case Which provision of the DMCA was at issue? Argument that 321 Studios was violating the anti-trafficking provisions in 1201(a)(2) and 1201(b)(1) by marketing of DVD copying software – DVD Copy Plus and DVD-X-COPY