2. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Lecture 3: Copyright Law

3. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Outline History of copyright The nature of copyright What is copyrightable?

4. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Intellectual Property Copyright Patent Trademark Trade Sectet Non-disclosure and non-competition agreements

5. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS History of Copyright Dates from 15th century (after invention of printing) Originally publisher monopoly (not author) –Granted by the King. King had right of approval –Publisher paid a fee England (1557) –Monopoly granted to the Stationer’s Company England: Licensing Act of 1662 –Illegal to publish anything without a license

6. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS History of Copyright England: Statute of Anne (1710) –Limited royal copyright monopolies to 28 years –“Encouragement of learning, by securing the Copies of Maps, Charts and Books, to the Authors and Proprietors of such copies” U.S. Constitution (1789) First U.S. Copyright Act (1790) –major revisions in 1831, 1870, 1909, 1976

7. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Constitutional Basis U.S. Constitution “intellectual property clause”, Art. I, §8(8) Art. I, §8(8) “Congress shall have Power … To promote the Progress of Science and Useful Arts, By securing for Limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” “The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents,... copyrights and trade-marks. Such jurisdiction shall be exclusive of the courts of the states in patent... and copyright cases.” 28 U.S.C. §133828 U.S.C. §1338 COPYRIGHT PATENT (BOTH EXCLUSIVELY FEDERAL)

8. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Constitutional Basis U.S. Constitution “commerce clause” Art. I, §8(3) Art. I, §8(3) “Congress shall have Power … To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” TRADEMARK, TRADE SECRET (JOINT FEDERAL/STATE)

9. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS What Is Copyrightable? “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” 17 U.S.C. §102 17 U.S.C. §102 (1976) Copyright protection begins at the moment of fixation

10. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS What Is Copyrightable? (1) literary works; (includes software, web pages) (2) musical works, including any accompanying words; (3) dramatic works, including any accompanying music; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (.gif,.jpg,.bmp) (6) motion pictures and other audiovisual works; (flash, streaming video, virtual reality) (7) sound recordings; (.wav files, MP3, etc.) and (8) architectural works. 17 U.S.C. §102 17 U.S.C. §102 (1976)

11. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS What Is Copyrightable? Compilations - “ formed by … assembling... preexisting materials... Coordinated … [so] that the resulting work as a whole constitutes an original work of authorship.” Collective works - a “number of contributions, constituting separate and independent works in themselves,... assembled into a collective whole”, e.g. a magazine, anthology, or encyclopedia. 17 U.S.C. §101

12. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS What Is Copyrightable? Derivative works - “based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.” 17 U.S.C. §101 ported code. C  Java, rehosted systems, gif  jpeg

13. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS What Is Not Copyrightable? Words and short phrases such as names, titles, and slogans Blank forms... designed for recording information [that] do not in themselves convey information Works consisting entirely of information that is common property containing no original authorship, e.g. calendars, weight charts, sports schedules, tables taken from public documents or other common sources. Works of the U.S. Government 37 C.F.R. §202.137 C.F.R. §202.1 (Code of Federal Regulations)

14. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS What Is Not Copyrightable? “Sweat of the brow”, “industrious collection” A work assembled through great labor, but without original authorship, is not copyrightable White pages v. Yellow Pages Feist Publications, Inc. v. Rural Tel. Service Co., 499 U.S. 340 (1991). No “original authorship” in telephone directory.499 U.S. 340 What about databases?

15. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS What Is Not Copyrightable? “In no case does copyright protection... extend to any –idea, –procedure, –process, –system, –method of operation, –concept –principle,or –discovery, regardless of the form in which it is described, explained, illustrated, or embodied in [a] work.” 17 U.S.C. §102

16. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Copyright Ownership Ownership vests originally in the author A “work made for hire” is –a work prepared by an employee within the “course and scope of employment”; –a work specially ordered or commissioned... if the parties expressly agree in [writing] that the work shall be considered a work made for hire. (MUST BE ONE ONE OF 9 SPECIAL TYPES OF WORKS; DOESN’T INCLUDE SOFTWARE!) For a work made for hire the “author” is the employer (called the “employer for hire”)

17. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Works Made for Hire “Course and scope of employment” means that the employer is directing the work - very narrow, e.g. full- time employment. “Special commissioning” only applies to nine types of works, not including software. Example: software written by outside consultants is not owned by the client unless there is an agreement to assign.

18. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Copyright Term “Mickey Mouse Act” 70 years after death of last surviving author Work made for hire: –95 years from first publication –120 years from creation 17 U.S.C. §302 17 U.S.C. §302 Non-renewable Upon expiration, work enters the public domain Termination of transfers. For a period of 5 years beginning 35 years after publication, an author can “take back” his work. 17 U.S.C. §203

19. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Rights Under Copyright Copyright includes the right to: Reproduce the work (includes copies on disk or RAM) Distribute copies by sale, rental, lease or lending (but owner of an authorized copy may sell, rent, lease or lend it) Prepare derivative works Perform the work publicly (recite, act out, play, dance) Display (or transmit) the work publicly 17 U.S.C §106 These are further divisible (very finely) by contract

20. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS What Is Copyright Infringement? “Anyone who violates any of the exclusive rights of the copyright owner... or who imports copies or phonorecords into the United States... is an infringer of the copyright.” 17 U.S.C. §501 17 U.S.C. §501 Direct infringement Contributory infringement –knowingly inducing, causing, or contributing to the infringement Vicarious liability –right and ability to control the actions of a direct infringer but failing to do so + direct financial benefit from infringement

21. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Testing for Infringement There is no copyright infringement without “copying.” Therefore: “independent creation” is a defense Direct evidence of copying is rare. So the test is –access to the original + –“substantial similarity” between the original and the “accused work” in the eye of the “ordinary observer”

22. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Fair Use Fair use of a copyrighted work … for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. 17 U.S.C. §107

23. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Fair Use Tests purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; nature of the copyrighted work [e.g. factual v. fictional]; amount and substantiality of the portion used in relation to the copyrighted work as a whole; and effect [on] the potential market for or value of the copyrighted work (does it reduce the demand for the original?) 17 U.S.C. §107

24. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Copyright Damages Actual damages –Actual damages... as a result of the infringement, and –Any profits of the infringer... attributable to the infringement... not taken into account in computing the actual damages –Copyright owner proves only infringer's gross revenue, infringer must prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work

25. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Copyright Damages Problem: owner may have no damages; infringer may have no profit “Statutory” damages –Owner may elect in lieu of actual damages, between $500 and $20,000 per work, fixed by court –For willful infringement, up to $100,000 –For “innocent” infringement, as low as $200 –Can be elected any time before final judgment

26. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Criminal Copyright Penalties Any person who infringes a copyright willfully (1) for purposes of commercial advantage or private financial gain, or (2) by the reproduction or distribution [in] 180 days [of] copies [with] total retail value > $1,000 Penalties: forfeiture, destruction –1 year, $1000 fine –5 years + fine if > 9 copies with total retail value > $2,500 –10 years, second offense 17 U.S.C. §506(a)17 U.S.C. §506(a), 18 U.S.C. §231918 U.S.C. §2319

27. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Avoiding Infringement Reverse engineering The “clean room”: –Team A studies work, obtains its “method of operation” –Team A writes a specification using no protectible expression from the work –Team B reads the specification and creates a new work –No one is on both A and B Resulting work is “clean” -- not a derivative work

28. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Compulsory Licensing Author can’t refuse User must pay In the U.S., compulsory license for phonorecords of non-dramatic musical works Per-copy royalty: 1.3 cents per minute or 6.95 cents, whichever is greater In Japan, extensive compulsory licensing for educational works, foreign translations, etc.

29. 46-840 ECOMMERCE LAW AND REGULATION SPRING 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS Q A &