1. COPYRIGHT LAW FALL 2006 Columbus School of Law The Catholic University of America Prof. Fischer November 27, 2006

2. DMCA wrap-up points DMCA gives copyright owner new rights to back up technological protections in the digital environment

3. DMCA s. 1201 (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).

4. 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

5. 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

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

7. 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 email.

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

9. 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.

10. 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.

11. Third triennial Inquiry 6 exemptions – largest number ever Come into effect Nov. 27 Each exemption expires after three years.

12. Realnetworks, Inc. v. Streambox One of the first real analyses of circumventing conduct What about unauthorized inputting of a password? See IMS v. Berkshire (SDNY 2004)

13. Universal City Studios v. Reimerdes CB p. 964 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?

14. 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

15. See an essay by Nowegian professor Jon Bing at: http://www.eff.org/IP/DRM/DeCSS_prosec utions/Johansen_DeCSS_case/20000125_bi ng_johansen_case_summary.html http://www.eff.org/IP/DRM/DeCSS_prosec utions/Johansen_DeCSS_case/20000125_bi ng_johansen_case_summary.html For a Norwegian legal perspective

16. Protesters at the federal trial (2000) http://www.nylug.org/articles/index.shtml?nycdvdcourt “Electronic Civil Disobedience?”

17. 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

18. 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

19. 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

20. 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: http://www.eff.org/IP/DMCA/20030102_dmca_u nintended_consequences.html http://www.eff.org/IP/DMCA/20030102_dmca_u 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

21. 321 Studios Case (CB p. 957) Which provision of the DMCA was at issue?

22. 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

23. Sklyarov/ElcomSoft Prosecution: ND Cal. Rejected First Amendment challenge to DMCA Also found DMCA constitutional under the IP Clause and Commerce Clause

24. Sklyarov/ElcomSoft Prosecution: ElcomSoft was acquitted

25. DMCA- copyright management provisions S. 1202 Kelly v. Arriba Soft – no violation of 1202(b)(1): why not?

26. Fair Use What is fair use? Why does copyright law have a doctrine of fair use?

27. Codification of Fair Use Fair use was originally a judge-made doctrine, but it was codified in the 1976 Act at what provision?

28. Codification of Fair Use Fair use was originally a judge-made doctrine, but it was codified in the 1976 Act at what provision? At 17 U.S.C. section 107 According to this section, how should a court determine whether a use made of a copyrighted work is a fair use that would exempt the use from liability for infringement?

29. Fair Use Factors (1) purpose and character of the use (commercial or non-commercial eg. educational?) (2) nature of copyrighted work (fact or fiction?) (3) amount and substantiality of amount used (4) effect on the market for the copyrighted work Does it make any difference if a work is unpublished?

30. Fair Use Factors (1) purpose and character of the use (commercial or non-commercial eg. educational?) (2) nature of copyrighted work (fact or fiction?) (3) amount and substantiality of amount used (4) effect on the market for the copyrighted work Does it make any difference if a work is unpublished? NO

31. Fair Use is VERY fact-specific Section 107 restates judicial doctrine of fair use Fair use is essentially an “equitable rule of reason” so there is no “generally acceptable definition” Each case must be decided on its own facts There are no bright-line rules, as Justice Souter has stated. Of course, this makes it hard for lawyers to advise clients on when a particular use of a copyrighted work will be a fair use.

32. Fair Use and Parody: The Acuff- Rose case How does Justice Souter apply the 4 fair use factors to analyze whether the rap song’s use of the Roy Orbison song is a fair use? Does it make any difference that the rap song is commercial? Does it matter if the parody is in bad taste, or not funny? Do you agree with Justice Souter’s analysis? Why or why not? Do you agree with the outcome/reasoning in the Barbie case in your supplement?

33. The Cat in the Hat case Why did the court rule against the parody defense for the book on the O.J. Simpson Trial?

34. Annie Leibovitz Naked Gun Case

35. Why did Leibovitz sue over the “Naked Gun” ads. Did fair use apply? Why or why not? Is this consistent with the Dr. Seuss case?

36. Gone With the Wind case Suntrust Bank v.Houghton Mifflin (11 th Cir. 2001) According to the 11 th Circuit, should the The Wind Done Gone be treated as a fair use parody even though it was not comic? Why or why not? Do you agree?

37. Fair Use and unpublished works How does the fact that a work is unpublished affect fair use? (See Harper, CB p. 754, Sundeman (4 th Cir. 1998) (CB p. 760)

38. Additional Fair Use Considerations Do courts ever consider any additional considerations beyond the four s. 107 factors?

39. Additional Fair Use Considerations Amount and substantiality in comparison to D’s work Whether background copying is “substantial” (e.g. Ringgold, Sandoval) Equitable considerations: D’s conduct/bad faith – see NXIVM Corp v. Ross (CB p. 770) P’s conduct e.g. Rosemont (CB p. 775)

40. Seinfeld case: Castle Rock v. Carol Pub. (2d Cir. 1998) Was the preparation and sale of Seinfeld Aptitude Test a fair use, according to the Second Circuit? Why or why not?

41. Fair Use Generally Are all these cases just hopelessly inconsistent? How does one advise a client on the issue of fair use? How, if at all, should the doctrine be changed?

42. Fair Use Generally: To Consider Are all these fair use cases that we read in the last class just hopelessly inconsistent? How does one advise a client on the issue of fair use? How, if at all, should the doctrine be changed?

43. Sega v. Accolade: Intermediate Copying Accolade is a game developer that made and markets game software that was compatible with Sega’s Genesis console, without being a licensee of Sega. How did Accolade make sure its games were compatible with Sega’s console?

44. Sega v. Accolade: Intermediate Copying 1. Reverse engineered Sega’s video game programs - used decompilation to dissasemble object code to source code and created a manual that included description of interface requirements but not code. 2. Relying on information in the manual, Accolade created games for the Genesis.

45. Is Intermediate Copying Infringement? Did the 9th Circuit in Sega find that intermediate copying constituted a copyright infringement where copies were not made available to the public but the fruits of the copying were?

46. Is Intermediate Copying Infringement? Did the 9th Circuit in Sega find that intermediate copying constituted copyright infringement where copies were not made available to the public but the fruits of the copying were? Intermediate copying during the reverse engineering process would infringe even if the end product did not.

47. Is Reverse Engineering Fair Use Did the 9th Circuit in Sega find that reverse engineering was a fair use? How did the 9th Circuit apply the fair use factors?

48. Is Reverse Engineering Fair Use Did the 9th Circuit in Sega find that reverse engineering was a fair use? Yes, “where disassembly provides the only means of access to those elements of the code that are not protected by copyright and the copier has a legitimate reason for seeking such access”. Found 1st, 2d and 4th fair use factors to support Accolade. Particular concern about unfair monopolization fo market.

49. Sony v. Connectix (9th Cir. 2000) Issue\ here: entrepreneur reverse-engineers a console’s operating system to create a rival console that plays Sony games. In Accolade, the entrepreneur reverse engineered the operating system to sell compatible computer games. Thus the reverse engineering resulted in a product that did not compete with the reverse engineered work, whereas in Connectix, it did.

50. Sony v. Connectix (9th Cir. 2000) Issue here: entrepreneur reverse-engineers a console’s operating system to create a rival console - does that matter when considering first and fourth fair use factors?

51. Sony v. Connectix (9th Cir. 2000) Issue here: entrepreneur reverse-engineers a console’s operating system to create a rival console - does that matter when considering first and fourth fair use factors? No - both factors support fair use. Connectix’s Virtual Game Station is transformative and does not just supplant the Sony PlayStation; Connectix is a legitimate competitor.

52. Sony v. Bleem (9th Cir. 2000) What did Bleem do that Sony termed an infringement? Did the 9th Circuit find that Bleem’s use of Sony’s copyrighted work was a fair use? Why or why not?

53. 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?

54. 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?

55. REMEDIES What remedies are available for civil copyright infringement?

56. 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)

57. 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

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

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

60. 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

61. INFRINGER’S PROFITS What profits is a prevailing plaintiff permitted to recover in a copyright infringement action? What must P prove? - see Davis case

62. 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.

63. 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?

64. 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?

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

66. 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

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

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

69. LESSIG The Future of Ideas

70. 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?