1. Digital Copyright II Intro to IP – Prof. Merges 3.3.2010

2. News Flash Reed Elsevier v. Muchnick, Sup Ct. 3.2.2010 – held: unregistered works can be included in class action settlement without federal courts losing jurisdiction Follow-on to Tasini case

3. U.S. universities are getting a glimpse at a plan that would build a small music- royalty fee into the tuition payments they receive from students. If successful, the model — proposed by digital music strategist Jim Griffin on behalf of Warner Music Group — could be expanded to make ISPs the collector of such micropayments … http://blog.wired.com/business/2008/12/warner-music-gr.html

6. Grokster Specific facts Holding

7. Facts What did the evidence show about the intent of Grokster’s founders and principals? Note how other distribution schemes may differ...

8. Holding p. 602 “one who infringes a device with the object of promoting its use to infringe”

11. Liability and product design: Menell Legal Realism in Action: Indirect Copyright Liability's Continuing Tort Framework and Sony's De Facto Demise (with D. Nimmer), 55 UCLA L. Rev. 143 (2007) Unwinding Sony, 95 Cal L Rev 941 (2007)

12. Perfect 10 v. Amazon Facts Holdings

14. Which Rights Are Infringed? Perfect 10 claims that Google’s search engine program directly infringes two exclusive rights granted to copyright holders: its display rights and its distribution rights …. – IPNTA 5 th at 705

15. Fair Use Factors 1.Purpose and character of the use: transformative, trumps “derivative rights market” claim -- ? 2.Nature of the copyrighted work 3.Amount and substantiality of the portion used – trumped by factor 1? 4.Effect on the market for the work – “favors neither party” - ?

16. IPNTA 5 th at 708 Although an image may have been created originally to serve an entertainment, aesthetic, or informative function, a search engine transforms the image into a pointer directing a user to a source of information. Just as a “parody has an obvious claim to transformative value” because “it can provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one,”Campbell, 510 U.S. at 579, 114 S.Ct. 1164, a search engine provides social benefit by incorporating an original work into a new work, namely, an electronic reference tool.

17. Korean War memorial

18. The tide turning? The U.S. postage stamp based on a photograph of the Korean War Veterans Memorial statues on the National Mall did not constitute a transformative fair use of the copyrighted statues under the Copyright Act, the U.S. Court of Appeals for the Federal Circuit ruled Feb. 25 (Gaylord v. United States, Fed. Cir., No. 2009-5044, 2/25/10).

19. Caching and Searching: New Norms Parker v. Yahoo!, 88 U.S.P.Q.2d 1779 (ED Pa. 2008) Owner of copyrighted works claims infringement due to crawling, caching and search-enabling Held: Implied license to crawl when works posted online

20. 88 USPQ2d at 1783 Parker contends that he has provided constructive notice to the defendants that he has not granted a license because he registered his works and included a copyright notice on his website. The Court is persuaded that Parker's complaint conclusively establishes the affirmative defense of implied license.

21. At the very least, paragraph 24 of his complaint suggests that Parker knew that as a result of his failure to abide by the search engines' procedures, the search engines would display a copy of his works. From Parker's silence and lack of earlier objection, the defendants could properly infer that Parker knew of and encouraged the search engines' activity, and, as did the defendants in Field, they could reasonably interpret Parker's conduct to be a grant of a license for that use.

22. See also... Field v. Google, Inc., 412 F.Supp.2d 1106, 1116 (D. Nev. 2006) Held: failure to opt-out of crawling, caching, and search-enabling amounts to an implied license to do these things

23. Google asserted that the plaintiff had impliedly licensed Google to reproduce his work because he had consciously chosen not to include the no-archive meta-tag on the pages of his website. 412 F.Supp.2d at 1116.

24. The district court agreed, finding that the plaintiff's conscious choice was “reasonably interpreted” by Google to be the grant of a license to Google for that use. Id. The court also noted that the opt-out meta-tag was a “well- known industry standard,” and that it would be impossible for Google to personally contact every website owner to ascertain whether the owner wanted to have her pages listed in search results or be accessible through cached links. Id. at 1112, 1116.The court thus concluded that Google had sufficiently established the defense of implied license...

25. Shifting baseline... Digital copyright becoming an opt-out regime now Presumption is that copying is ok, at least for search purposes

26. Limits to this being tested Google Booksearch controversy Current status: District Court in NYC has approved proposed settlement, contingent on certain events...

27. 27 Key Elements of Settlement Digital Files Collection Rightsholders & Registry Rights License Digital Files Collection Rights License Rightsholders & Registry Key Issue: Should we multiply?

28. 28 Creation of Digital Files Google Book Search (1.60) Google Partner Program (1.62) Rightsholder Exclusion Mechanisms: Opt out (17.33) Removal (1.124, 3.5(a) No Display Books (1.88) No Preview (1.89) Fully Participating Library (1.58) Cooperating Library (1.36)

29. 29 Google’s Use of Digital Files Google Book Search Broad Other Uses: Non-Display Uses (1.91, 2.2) Key Business Models Institutional Subscriptions (1.74, 4.1) Consumer Purchases (1.32, 4.2) Advertising Revenue Model (4.4) New Revenue Models (4.7)

30. 30 Deal is Non-Exlusive “2.4 Non-Exclusivity of Authorizations. The authorizations granted to Google in this Settlement Agreement are non- exclusive only, and nothing in this Settlement Agreement shall be construed as limiting any Rightsholder’s right to authorize, through the Registry or otherwise, any Person, including direct competitors of Google, to use his, her or its Books or Inserts in any way, including ways identical to those provided for under this Settlement Agreement.”

31. Will the Registry Grant Other Licenses? Key Question: How much licensing competition would emerge among authors if they couldn’t organize collectively? Incentives aren’t clear Collective mechanism creates market power that wouldn’t exist otherwise

32. 32 Orphan Works and the “Private” Public Domain Google Settling Parties Usually Want to Maintain Property Status Against Third Parties: Westlaw/Lexis page numbers fight Hatch Waxman patents v. generics Facilitation of Use of Orphan Works through Opt Out Class Action Scope of Releases (10.1, 10.2): Third parties excluded Active Authors

33. 33 Unclaimed Funds: Who Gets the Orphan Dollars? “6.3(a)(i) … (2) then, any remaining Unclaimed Funds will be paid on a proportional basis to the Registered Rightsholders until all such Rightsholders of a Book have received, in the aggregate …”