Wiley v. Kirtsaeng—Changing Copyright Ownership in the USA?

Wiley v. Kirtsaeng, S.Ct. Docket No. 11-697, one of the most important intellectual property matters to come before the Supreme Court in recent years, re-examines the “first sale” doctrine in copyright law. Stare decisis tells us that owners of the individual copies of copyrighted works are free to resell, lend, or give away their legal copies of books, paintings, software, DVDs, CDs, and so on without permission from the copyright holder, no matter where the copyrighted item originated. Now, though, book publishers, software companies, and the movie and music industries, who want to set different prices for different markets, argue that the doctrine should apply only to goods produced in the U.S.

John Wiley and Sons, a major textbook publisher, is doing battle over this very question with one Supap Kirtsaeng, a student from Thailand who studied at Cornell and USC. The case came into being when Kirtsaeng discovered that textbooks almost identical to those in the U.S. market were considerably less expensive in Asia. Being a money-hungry, entrepreneurial student, he had friends and family members send multiple copies of needed books to him, purchased at Asian prices, which he then resold to his fellow students at less than the cost of the US books but more than he paid for them. When Wiley discovered this, they sued Kirtsaeng for infringing their copyrights in the resold books; the Court of Appeals for the Second Circuit ruled in Wiley’s favor.

Kirtsaeng asks the High Court to reverse the Second Circuit’s ruling, arguing that the first sale doctrine prohibits Wiley from enforcing any copyright against the sale of any work that was previously sold.

This notion goes far beyond this one case. If the Nine Wise Ones decide that the First Sale Doctrine does not apply to copyrighted materials that do not originate in the USA, dissemination of copyrighted materials will need a massive overhaul. At this point, museums freely display copyrighted works; they would lose the ability to do that. Salvation Army and Goodwill Industries, who regularly resell copyrighted works at a deep discount, would be required to pay a royalty for resold works, which, necessarily, would raise the prices and have a heavy impact on cash-poor individuals. Ronald McDonald House, which freely lends copyrighted materials regularly to the families of very sick children staying with them, would have to charge a fee. Much of eBay’s business would come crashing down because the free exchange of already-purchased copyrighted works would be stifled. Even your neighborhood library would feel the pinch, and the free lending library would cease to exist.

And all because the publishers want to enforce different prices in different markets.

I don’t think much of this; I like free, community-supported lending libraries. I like being able to view modern art in museums. When I had cause several years ago to use the services of Ronald McDonald House, I very much appreciated the easy availability of DVDs and video tapes (that dates the time). The thought that the free lending and giving systems currently in effect would come to an end is an anathema to me.

Fair Use and Faulkner

The rightsholder for the works of William Faulkner sued — twice — over infringements of their copyrights.Although the suits were originally poo-poohed, the question asked by the two suits — what are the limits of fair use — is a question that has long plagued copyright holders and infringers alike. Maybe, just maybe, we’ll get a new signpost on the road map to determine what does and does not constitute fair use of a copyrighted work.

The copyrights for the works of William Faulkner, who won the Nobel Prize in Literature in 1949 and died in July, 1962, are handled by Faulkner Literary Rights, LLC, which filed suits against Sony Pictures Classics, Inc. and Northrop Grumman, Inc., a defense contractor, in two different Mississippi federal district courts in October 2012. In both cases, the rightsholder contends that the defendants should have asked them for a license to use Faulkner’s material. Both defendants respond that the cases are frivolous and their use is covered by the fair use doctrine. Sony may have a leg to stand on there, but Northrop Grumman is a defense contractor who ran an ad using Faulkner’s materials in a way that the rightsholder would not have consented to. Is that fair use, too? We shall see….

Copyright Alert System

Huh. Isn’t this interesting. The ISPs are initiating a six-strike system to help enforce copyright.

I’m glad to see the ISPs getting involved more proactively in the enforcement of copyright. The internet is a wonderful invention, but it does lend itself to infringement. Copying without permission is very, very easy in this online world, but that copying may infringe the rights of others. That’s how the recording industry made $millions from the “free” downloading of protected music.

Google and Publishers Settle Their Suit

Well this part of the suit against the Google Library Project is done. The American Association of Publishers (AAP) has settled with Google.

Google, as you may know, took on the ambitious project of digitizing libraries to make that content available online. The Google Books site provides book excerpts for free. Not unexpectedly, this project really bothered copyright owners, and the AAP, the Author’s Guild, photographers and visual artists and several individuals filed suit to stop the project in 2005.

Although the full terms of the AAP settlement are confidential, the settlement, importantly, allows publishers to opt in or out of Google Books, and thus in or out of the digitization project.

The AAP settlement still does not resolve the authors’ separate suits, which are still pending in the Southern District of New York, still presided over by Judge Chin (sitting by designation after his elevation to the Second Circuit Court of Appeals).

HathiTrust Copyright Case Rumbles On….

On September 12, 2011, what purports to be the largest copyright infringement suit in history was filed in the US District Court for the Southern District of New York. At stake are copyrights in digitized works of authorship. Filed by several authors’ guilds from several nations, the suit takes to task the University of Michigan, the University of California, the University of Wisconsin, Cornell University, and the HathiTrust, a partnership formed in 2008 “to contribute to the common good by collecting, organizing, preserving, communicating and sharing the record of human knowledge.” In other words, HathiTrust’s mission is to copy and distribute works of authorship. They have a digital archive of library materials, many of which are protected by copyright under the laws of the United States and other countries.

The universities and HathiTrust, of course, argue fair use. The works in question are so-called “orphan works” — works whose authors cannot be found. Only the University of Michigan has announced that it has suspended the digitization of potentially copyrighted works pending the outcome of the case.

Plaintiffs’ choice of venue is not accidental. They could have brought suit in Wisconsin, Michigan, California, or in any district where the HathiTrust has a member. However, the US District Court for the Southern District of New York encompasses New York City, home to the publishing industry. This court is well versed in copyright law and has a large volume of precedent cases that are favorable to copyright holders.

There was a procedural hiccup in the case not long ago; some defendants, who exist far away from New York City, wanted their depositions to be taken in their own home territory. The attorneys have settled that matter out, but the consequence of this skirmish is that the close of discovery has been pushed back until June 8. This tightens the schedule for summary judgment. US District Judge Harold Baer wanted the summary judgment motions to be fully briefed by July 20. I don’t know if that’s still reasonable, since allowing the necessary time for each side to respond to the other’s papers means that the motions must be filed in mid-June, which is too close for comfort to the end of discovery.

Since Judge Baer has taken July off (Article III judges can do that…), it might be wisest to allow the parties to take July to brief their motions. I doubt that will happen, but it would likely result in a much better product for the Judge to rule on when he comes back.

Meanwhile, this behemoth of a case (which is closely related to the Google digital library case) rumbles on, with next due dates in mid-June when summary judgment motions are due.

Village People Case: You Can Terminate Grants of Copyright, Regardless of Other Authors

Victor Willis, the former lead singer of the Village People, won a victory copyright case pending in the U.S. District Court for the Southern District of California. In Scorpio Music S.A., et al v. Victor Willis, publisher Scorpio Music said Willis was not entitled to terminate grants of his copyright interests in such hits as “Y.M.C.A.” and “In The Navy” under Section 203(a)(1) of the Copyright Act. The judge thought differently: Willis had the right to terminate his grants notwithstanding that there were other co-authors of the works at issue.

The music industry needs to take a deep gulp of air until such time as the case is appealed to the 9th Circuit Court of Appeals. The ramifications of this are huge.

Who Owns the Posting

Suppose you run an internet site that accepts postings from users. Suppose some of those postings are pretty good. Users voluntarily and without payment post to your website.

Who owns the postings?

The answer to this question depends on the Terms of Use on your website and how users access your site.

The author of the posting owns the original copyright in his or her posting. For the website owner to obtain copyright in the author’s posting, there needs to be a written transfer of copyright interest, which can be done with a “click-through” contract for users to access the posting capabilities of the website. It has to be worded correctly, though; this is not a do-it-yourself opportunity. You need your copyright lawyer to draft this clause for you.

Creating the click-through contract does NOT give copyright to the website owner for materials posted before the website requires the click-through contract to access the web posting capability transfers copyright. For those postings, if the website owner wants copyright ownership, the website owner must obtain and register with the US Copyright Office a signed document transferring copyright from the original author of the post.

If the postings can be published as a “collection,” then the website owner may — MAY — own the copyright in the collection, depending on several factors.

Beatles Collection DOES Have Protection Under Copyright

BlueBeat.com tried. They sold digital copies of Beatles music without proper licensing. They can’t do that.

U.S. District Judge Josephine Staton Tucker, who ruled that BlueBeat.com violated the copyrights and presented unfair competition to music company EMI Group and others, is quite correct. Although the judgment she issued does not specify damages for infringement and for unfair competition, the fact that BlueBeat.com created and distributed digital files of Beatles music, evidently based on the complete CD collection of their music makes them liable for what would seem, from an outside viewpoint, to be enhanced damages. This site sold some 67,000 copies for 25¢ per track. iTunes, which has properly licensed the Beatles’ music, sells each track for $1.29.

BlueBeat.com’s owner, Hank Risan, evidently tried to bamboozle the judge by calling his activities “psycho-acoustic simulation”; he claims that this activity results in unique copies of copyrighted music. However, the key word in that sentence is “copies”; Mr. Risan’s “psycho-acoustic simulation” is nothing more than a derivative work; the right to produce derivative works belongs exclusively to the copyright holder.

I don’t know whether BlueBeat might have fared better with a fair use defense. My guess is probably not. However, there are some uses of Beatles’ music that are educational, and the attorney might have stood a better chance of convincing the skeptical District Judge with the “fair use” defense. I dunno; maybe he did pull that rabbit out of the hat. I haven’t read the pleadings.

Anyway, it’s an interesting case, and the judgment gives the remaining live Beatles and the estates of the Beatles who have passed on some good news for the holidays. The judgment also reasserts my faith in the system, which has gotten somewhat battered of late.

Copyright a Chilean Note

The author who said, “estamos bien en el refugio los 33” has registered a copyright on the phrase.

So what, you ask?

That phrase, written in red ink, announced to the world that the trapped Chilean miners were alive and well down there in the broken mine.

That copyright registration has some pretty interesting ramifications.

First, it’s a very (very) short work of authorship; in the USA, one sentence very, very rarely, if ever, qualifies for copyright registration. Senor Ojeda registering his sentence, it seems to me, is something like Capt. James Lovell registering “Houston, we have a problem.” Are we seeing a muddling building between copyright and trademark?

Second, you know there will be movies made about this incident. If the copyright on the note is registered, the moviemakers will have to pay a chunk of money to license the use of the text for their movies, at least for those movies distributed in Chile. If an “author” can register copyright on essentially a tagline, it looks like Chile might be redefining the concept of “authorship.” After all, how much creative thought goes into the statement of the fact that all 33 miners are safe in the mine?

What does the registration of what is essentially a tagline under copyright bode for the future of copyright?