Wednesday, June 30, 2010

Art Litigation: Will Austria Return Egon Schiele's Portrait of Wally?

Today's New York Times obit of Rudolph Leopold makes passing reference to the fact that he was to stand criminal trial in the United States on July 26 on the issue of whether he knew that "Portrait of Wally" (above) - was stolen.  After the Justice Department seized the work, my understanding is that it's been sitting in a warehouse in Long Island City, unseen by the public for over a decade.   So Austria will now have to decide whether it wishes to continue to fight the US government or to throw in the towel and give Portrait of Wally back to the family of the art dealer from whom it was stolen.

I understand that an Austrian paper reported yesterday that Austria would have a majority of the Board positions on the Leopold Museum, which makes it much tougher for Austria to continue to pretend that the Leopold Museum is a "private" institution, the fiction it has used to avoid returning stolen property up until now.

Readers of Austrian tea leaves predict that the death of Hans Dichand, Austria's most powerful man and long-term Nazi sympathizer and anti-Semite, is more significant in determining Austria's approach to the problem.   Leopold was under Dichand's political protection in Austria - he was an extremely powerful media mogul who made and broke politicians daily.  Now that Dichand is dead, there is a much greater likelihood that many of the stolen artworks in the Leopold Museum will be restituted.   Apparently, Dichand had a vast art collection that is not free of controversy.

My previous posts on Rudoph Leopold, the Leopold Museum, and Austria's dithering here.  Perhaps the New York Times will show a renewed interest in the topic of Nazi art looting.   If U.S. papers like the New York Times cover these issues, it has a major impact in Austria.    When U.S. papers ignore the topic, Germany and Austria seem to lose any momentum towards restitution.

Rudolf Leopold, Art Collector, Dies at 85 - Obituary (Obit) -

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Art Litigation - Grosz v MoMA Amicus Curiae Brief on Nazi Spoliation

Jacob Hilsdorf 1910 photograph of Alfred Flechtheim

When artist George Grosz fled Nazi Germany in January 1933, he left his artworks in the care of Jewish art dealer Alfred Flechtheim.   Flechtheim was the premier contemporary art dealer of the Weimar Republic.  You haven't heard his name before and no one in the United States has even cared enough to make a Wikipedia page for him in English, even though our museums are full of works that passed through his hands.   My earlier posts on him here .   Big article in Welt Online today on Flechtheim here.  Use Google Translate to read it if you don't read German, it predicts that the Flechtheim restitution litigation will be the biggest ever filed in Germany.

My firm represents the heirs of George Grosz in trying to obtain restitution of artworks Grosz left with Flechtheim's gallery in 1933.  Our complaint was dismissed pursuant to Rule 12 b 6 of the Federal Rules of Civil Procedure as time-barred based on a settlement communication sent by MoMA Director Glenn Lowry to a representative of the Grosz Heirs, which the MoMA claimed, and the district judge accepted, to be a "refusal" for statute of limitations purposes under New York's demand and refusal rule.

I understand that MoMA made an informal presentation of its position to the NY City Bar Association's Art Law Committee, I am hopeful that we will receive equal time.

The Grosz Heirs appealed to the Second Circuit Court of Appeals, the appeal is now pending.  An amicus brief was filed in support of our position, a list of the Amici and a copy of the brief below:

American Jewish Congress, Commission for Art Recovery; Filippa Marullo Anzalone, Yehuda Bauer, Michael J. Bazyler, Bernard Dov Beliak, Michael Berenbaum, Donald S. Burris, Judy Chicago and Donald Woodman, Talbert D’Alemberte, Marion F. Desmukh, Hedy Epstein, Hector Feliciano, Irving Greenberg, Grace Cohen Grossman, Marcia Sachs Littell, Hubert G. Locke, Carrie Menkel-Meadow, Arthur R. Miller, Carol Rittner, John K. Roth, Lucille A. Roussin, William L. Shulman, Stephen D. Smith and Fritz Weinschenk, In Support of Plaintiffs-Appellants and Reversal

Grosz v MoMA Amicus Brief - Nazi Art Looting

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Trademarks in a Copyrightable Work: TM Owner Shuts Down Museum Exhibit

Museum Exhibits of Sculptures Made From Louis Vuitton Fakes Shut Down

Sculptures of locusts removed from a museum in Japan after the designer complained, HT Techdirt, stories here and here.

Making fine art from materials in which trademarks appear is a common problem.  These locust sculptures were said by the artist to comment on the relationship between authenticity and imitation.

Does an artist need to purchase REAL Louis Vuitton to make a statement about how fake Louis Vuitton is?How is displaying something in a museum perceived to be a commercial endorsement by Louis Vuitton?

Sculptural works are protected by copyright law.  17 USC 102 a 5

§ 102. Subject matter of copyright: In general

(a) Copyright protection subsists, in accordance with this title, in 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. Works of authorship include the following categories:
(1) literary works;
(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;
(6) motion pictures and other audiovisual works;
(7) sound recordings; and
(8) architectural works.

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Tuesday, June 29, 2010

On the Eve of Criminal Trial in U.S., Rudolph Leopold, Collector of Artworks Stolen from Jews, Dies in Vienna

Egon Schiele's Dead City

Art collector Rudolph Leopold died today in Vienna, Austria.

In 1998, D.A. Robert Morgenthau seized two stolen artworks at the Museum of Modern Art that Leopold had loaned to the MoMA:  Egon Schiele's Dead City and Schiele's Portrait of Wally.

Leopold was scheduled to stand criminal trial this summer before the Hon. Loretta A. Preska in the U.S. District Court for the Southern District of New York after Judge Preska determined that Portrait of Wally was stolen.

But MoMA returned the stolen Dead City to the Leopold Museum in Austria.  The Austrian Provenance Commission's head Dr. Christoph Bazil, has repeatedly promised to investigate Dead City's provenance and those of other Schiele's stolen from Fritz Grunbaum that are in the Leopold and Albertina Museums in Vienna, but after 11 years, no report has issued.

Austria purchased Leopold's collection and made Leopold director of the Leopold Museum for life.  It remains to be seen whether Austria will carry through on its promises to investigate and return the stolen works in Leopold's collection.

Article 26 of the 1955 Austrian State Treaty requires Austria to return all property stolen from Nazi persecutees.  Yet Austria has not only failed to return the property, but repeatedly set up enabling legislation designed to frustrate claims and then let the legislation lapse.

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8th Cir: Famous Dave's Magic Words: Copyright Assignments and Settlement Agreements

In Thomsen v. Famous Dave's of America, 2010 WL 2219051 (8th Cir. May 12, 2010), the Eighth Circuit Court of Appeals found the following provision in a settlement agreement to be a valid copyright assignment:

"Al is releasing all copyright, proprietary design and sign work to [Famous Dave's] in all other restaurants that he has worked on with the exception of [signature restaurants]."

Quoting the Ninth Circuit, the Court noted:  "A transfer of ownership requires no "magic words" to satisfy copyright law: even a one-line pro forma statement will do."

The Court found the assignment to be a "clear conveyance".

Practice Tip:  An assignee is considered a "beneficial owner" of a copyright under the Copyright Act 17 U.S.C. 501(b) and is entitled to sue for infringement.   I cover Copyright Ownership and Licensing Litigation in more detail in Chapter 8 of Copyright Litigation Handbook.

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Monday, June 28, 2010

Copyright and The Story of the Long-Armed Buddhist Penguin

If a Penguin gains enlightenment, is he an all-present universal Buddha?

In the first reign of the Lord Obama the Hopeful, Grand Master Dan-Nay set out on the path to bring the power and light of the Master Penguin to the far reaches of the Lord's Empire and even beyond to the barbarian and unenlightened hordes populating the universe.

I wrote on Penguin Group v. American Buddha, 09-1739-cv (June 15, 2010), a case involving New York's long-arm statute and addressing the issue of whether a copyright holder located in New York can sue in Manhattan for an infringement that takes place anywhere in the universe here.

Andy Berger, sympathetic to Penguin, digs in further and has posted Penguin's briefs for easy reading here.

I would appreciate anyone bringing thoughts, articles or posts on this topic to my attention.  This is an important and difficult issue involving due process, the Constitution, the essence of a copyright, and the extent to which New York courts will subject the world to its jurisdiction.  In a rare area of federal law that completely "preempts" state law, our Second Circuit Court of Appeals has made clear that it will defer to New York State's Court of Appeals.  I am curious as to what the really smart law professors will have to say and whether American Buddha will have any amici.

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Sunday, June 27, 2010

CDCA: Politico's Use of Henley Songs Copyright Infringement - Not Fair Use

In Henley v. Devore (SACV 09-481) the Central District of California doled out a "sort of rough justice" and found that a politician whose campaign got a little crazy with a karaoke machine and a mashup campaign video engaged in copyright infringement.  On June 10, 2010, summary judgment was granted, decision below.

All She Wants To Do Is Tax

They’re pickin’ up the taxpayers and
puttin’ ‘em in a jam
And all she wants to do is tax, tax
Liberals been liberals since I don’t know
They’re pickin’ up the taxpayers and
puttin’ ‘em in a jam
And all she wants to do is tax, tax
Liberals been liberals since I don’t know
Well, we barely made twenty ten, the vote
was in doubt
And we finished up the campaign she
could hear the people shout
They said, “Don’t come back here
But if she ever does – we’ll bring more
‘Cause all she wants to do is tax
and break our backs
Never mind the heat comin’ off the street
She wants to party
She wants to get down
All she wants to do is –
All she wants to do is tax
All she wants to do is tax and break our
All she wants to do is tax

From the decision (page 24):

“The [fair use] doctrine has been said to be ‘so flexible as virtually to defy definition.’” Princeton Univ. Press v. Mich. Document Servs., Inc., 99 F.3d 1381, 1392 (6th Cir. 1996) (quoting Time Inc. v. Bernard Geis Assocs., 293 F. Supp. 130, 144 (S.D.N.Y. 1968)). The case-by-case analysis resists bright-line determinations and the resulting decisions inevitably represent a sort of rough justice.

After you read the decision, drop down for a genius mashup video of Sarah Palin yodeling for taxes.  Note to file: yodeling and Sarah Palin is fair use, but Don Henley Barbara Boxer ain't.  Since no one can define "fair use" - justice is really rough these days.

I am one of the few that think electioneering is core political speech that is really really tough to trump and I note that the political history of our nation was forged by anonymous mudslingers slinging every conceivable mockery at one another.  The Supreme Court's jurisprudence on political speech supports this view. 

I think that the district court erred because a politician's campaign video is not commercial speech (see p 18), even though the politicians want $$$$.  In politics, the Supreme Court has ruled that money = speech.   This I believe is at the core of the whole Obama/Hope poster drama, if you look at my posts on Shepard Fairey, it is explained there.

But I been a liberal since I don't know when.
CDCA: No Fair Use - Politico Infringed Don Henley Copyrights

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SDNY: Bernie Madoff Videos and the Copyright Act's Preemption of State Law Claims

" is virtually impossible for violations to go undetected on Wall Street today..."  Bernie Madoff, in the 2007 YouTube interview I posted below.   Watching the video is really like a punch in the stomach, and I didn't even lose any money.

Another Bernie Madoff video was at issue in Stadt v. Fox News Network, 2010 WL 2540957 (S.D.N.Y. June 22, 2010)(SAS).   Stadt had a 2003 copyrighted video of Madoff on vacation.  He licensed it to Fox for a period to be labelled as a "Fox Business Exclusive" for $10K.  After the license ran out, he caught Fox still using it and licensed it for an additional $50K.   After that license ran out, he caught Fox using it again.  After he contacted them, they stopped using it, but wouldn't tell him how many times it was downloaded after the license expired or give any information on how much money they'd made from it.   He sued for copyright infringement and the following seven claims.

1. breach of contract;
2. conversion;
3. breach of fiduciary duty and an accounting;
4. deceptive trade practices in violation of section 349 of New York General Business Law
6. unjust enrichment; and
7. unfair competition

Fox moved to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, raising the issue of preemption.  "Preemption" comes about because the Copyright Act says basically that the Copyright Act exclusively governs copyrights in 17 USC 301.   So if the Copyright Act governs copyrights, how can state law govern copyrights?

State law comes up when someone enters into a contract for the sale (assignment) or rent (license) of copyrightable subject matter.   So a person's act may be both a copyright infringement AND a breach of contract.  Sorting out which state law claims are "equivalent" to copyright infringement claims sounds easy, but in fact requires a careful, fact-based analysis.

Practice Tip:   Where a plaintiff has thrown in the kitchen sink in a copyright pleading and realizes that certain state law claims may not be worth fighting for, prior to any answer or summary judgement motion being filed, the plaintiff may simply file a notice of dismissal without prejudice under Rule 41(a) of the Federal Rules of Civil Procedure.   This is a good idea in copyright litigations because at the end of the day, if one forces a court to resolve weak claims against you, it may affect/reduce an ultimate assessment of attorneys fees.  An alternative, if you see that your Complaint failed to plead necessary elements (your adversary's motion to dismiss is likely to point this out to you, is to cross-move for leave to amend pursuant to Rule 15 of the Federal Rules of Civil Procedure with a Proposed Amended Complaint attached to your papers.

In Stadt v. Fox Network, the district court, Judge Scheindlin considered whether each claim was preempted by copyright or whether Stadt had failed to state a claim:

The Copyright Act expressly provides for preemption of state law.FN29 In Briarpatch Ltd. v. Phoenix Pictures, Inc., the Second Circuit held;

FN29. See 17 U.S.C. § 301(a).

The Copyright Act exclusively governs a claim when: (1) the particular work to which the claim is being applied falls within the type of works protected by the Copyright Act ..., and (2) the claim seeks to vindicate legal or equitable rights that are equivalent to one of the bundle of exclusive rights already protected by copyright law.... The first prong of this test is called the “subject matter requirement,” and the second prong is called the “general scope requirement.” ... The general scope requirement is satisfied only when the state-created right may be abridged by an act that would, by itself, infringe one of the exclusive rights provided by federal copyright law.... [T]he state law claim must not include any extra elements that make it qualitatively different from a copyright infringement claim.... To determine whether a claim is qualitatively different, we look at “what [the] plaintiff seeks to protect, the theories in which the matter is thought to be protected and the rights sought to be enforced.” FN30

FN30. Briarpatch Ltd. v. Pheonix Pictures, Inc., 373 F.3d 296, 305-06 (2d Cir.2004) (emphasis added) (citations omitted).

The court takes a “restrictive view” of what qualifies as an extra element sufficient to shield the claim from copyright preemption.FN31 Nevertheless, “a state law claim is qualitatively different if it requires such elements as breach of fiduciary duty, or possession and control of chattels.” FN32
FN31. Id. at 306. FN32. Id.

Although the court looked only to 17 USC 301(a), let me quote both 301(a) and (b) for you, with screaming loud bold to make reading the statute easier, full statute here:

§ 301. Preemption with respect to other laws:

(a) On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

(b) Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to —
(1) subject matter that does not come within the subject matter of copyright as specified by sections 102 and 103, including works of authorship not fixed in any tangible medium of expression; or
(2) any cause of action arising from undertakings commenced before January 1, 1978;
(3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106; or
(4) State and local landmarks, historic preservation, zoning, or building codes, relating to architectural works protected under section 102(a)(8).

The Judge's conclusion:


For the reasons set forth above, Fox's motion to dismiss the breach of contract claim is denied. Fox's motion to dismiss the breach of fiduciary duty and an accounting, section 349, unjust enrichment, and unfair competition claims is granted. These claims are dismissed with prejudice. Fox's motion to dismiss the conversion claim is granted, and this claim is dismissed with leave to replead.

Stadt v. Fox News Network LLC, 2010 WL 2540957, 7 (S.D.N.Y. 2010).

Conversion under New York State law requires a demand for the return of a chattel, and the holder's refusal to return the chattel.  The court found that plaintiff's hadn't alleged a demand or refusal, so was granted leave to replead.  In copyright cases a conversion claim usually involves something like masters or high quality originals from which copies can be made that the defendant failed or refused to give back.

Chapter 10 of my Copyright Litigation Handbook is titled "Removal from State Court and Preemption".  In it I discuss the preemption doctrine and how it applies in litigation involving copyrighted works.

Will plaintiff really demand the return of the Bernie Madoff video?  Stay tuned.

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Fair Use Fridays: Statue of Liberty in Public Domain

Fair use Friday photo of yours truly by NY real estate guru Paolo Zampolli.  Good example of photographing a public domain sculpture (the copyright expired) and a U.S. government work - the U.S. flag (not subject to copyright).   Despite Paolo's best efforts and the tour of New York Harbor on his luxury speedboat, I did not purchase the Statue of Liberty, despite the excellent price Paolo offered. :-)

Italicized text and images below from

Designed and executed by French sculptor Frederic Auguste Bartholdi, the Statue of Liberty was presented by the people of France to the people of America to honor the friendship between the two nations. The statue's significance has broadened over the years, and it is now recognized throughout the world as a symbol of liberty and freedom. Erected on Bedloe's Island in New York Harbor and dedicated on Oct. 28, 1886, the statue has stirred the emotions of millions.

On Aug. 31, 1876, the Copyright Office issued copyright registration number 9939-G for the "Statue of American Independence" as the Statue of Liberty was first named. The copyright claim was filed in America's centennial year, a decade before the statue was erected in New York Harbor. Deposited with the application in the Copyright Office were two rare images. The first is a photograph of the artist's final study model, believed to be executed in terra cotta. The second image is an artistic rendering of how the statue would appear against the New York skyline after it was finally erected on the pedestal designed by architect Richard M. Hunt. This second image has great significance because it shows a very early version of the statue that most people would not recognize. In the original design, the Statue of Liberty is shown holding in her left hand a broken chain and shackle, which represent freedom newly achieved. Bartholdi later made a major change to his design by placing the chain and shackle, symbolically broken by Liberty, at her feet. He then positioned the familiar tablet, inscribed "July IV, MDCCLXXVI" (July 4, 1776), in her left hand.

In 1984, curators working on the Copyright Office exhibition "By Securing to Authors: Copyright, Commerce and Creativity in America" came across this copyright with rare attached documentation. The historic images described above are on permanent display in the exhibit on the fourth floor of the Madison Building (Monday - Friday, 8:30 a.m. to 5 p.m.), along with documentation for the copyright on the pedestal.

Many images and renderings of the Statue of Liberty, including some that reveal interesting details of this symbol of American freedom, are in the Prints and Photographs Online Catalog. Just type "Statue of Liberty" in the search box. The Historic American Buildings Survey has also documented this work extensively. These images are in the American Memory collection "Built in America." Type "Statue of Liberty Liberty Island" in the search box. The 230 black-and-white photos are older images; the 51 color transparencies offer extraordinary views of the statue during its most recent restoration.

Since the copyright registration and deposit system was centralized in the Library of Congress in 1870, more than 30 million creative works have been registered for copyright protection.

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Thursday, June 24, 2010

Obama Administration's 2010 IP Enforcement Strategic Plan

New report from the Obama Administration's IP Czar
2010 Joint Strategic Plan on IP Enforcement

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Volunteer Lawyers for the Arts Pro Bono Awards

I went to a cocktail party at a very swanky art gallery in Chelsea to celebrate the achievements of lawyers working pro bono for artists and the arts through Volunteer Lawyers for the Arts.

The room was full of celebrity lawyers, friends, adversaries, former adversaries and artists who benefit from the programs.

If you have an interest in being trained for pro bono projects or in participating, visit   Special thanks to Sergio Munoz Sarmiento who runs the excellent Clancco blog which explores the intersection of law and fine art.

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SDNY: YouTube Granted Summary Judgment on Copyright Infringement - No Contributory Liability

In Viacom Int'l Inc. v. YouTube Inc., 07 Civ. 2103 (June 23, 2010 SDNY), Judge Stanton granted summary judgment dismissing contributory copyright infringement claims against YouTube and upheld the safe harbor provisions of the Digital Millenium Copyright Act, 17 USC 512(c) for internet service providers (ISPs).   This was so, even though, as Judge Stanton noted:

From plaintiffs’ submissions on the motions, a jury could find that the defendants not only were generally aware of, but welcomed, copyright-infringing material being placed on their website. Such material was attractive to users, whose increased usage enhanced defendants’ income from advertisements displayed on certain pages of the website, with no discrimination between infringing and non-infringing content.

At issue in the case is who bears the burden of policing for copyright infringements.  Do copyright owners bear the cost, or do ISP's have to act as cops?

In analyzing the legislative history of the DMCA safe harbor provisions, Judge Stanton noted:

The tenor of the foregoing provisions is that the phrases “actual knowledge that the material or an activity” is infringing, and “facts or circumstances” indicating infringing activity, describe knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity in general is not enough. That is consistent with an area of the law devoted to protection of distinctive individual works, not of libraries. To let knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials, impose responsibility on service providers to discover which of their users’ postings infringe a copyright would contravene the structure and operation of the DMCA.

Judge Stanton appeared to be impressed that when Viacom gathered evidence of 100,000 infringing videos and sent a massive takedown notice, YouTube had the videos taken down by the next day.

I discuss Cease and Desist Letters and Declaratory Judgment Actions in Chapter 6 of my Copyright Litigation Handbook.   In Chapter 7, Drafting the Infringement Complaint, I deal with Internet Service Providers.  There is a growing body of case law saying that you have to be pretty specific with your takedown notices and follow the rules in order to trigger liability of an ISP.

In Viacom v YouTube, Judge Stanton notes that providing the URL (uniform resource locator) of the infringement is the type of information that would comply with the specificity required of a takedown notice.

Opinion below:

Viacom v YouTube

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Wednesday, June 23, 2010

DC Cir: RIAAA Must Pay Copyright Owners Late Fees - Ruling on Compulsory Licensing of Musical Works

In Recording Indus. Ass'n of America, Inc. v. Librarian of Congress, --- F.3d --- (D.C. Cir. June 22, 2010), the D.C. Circuit upheld the Copyright Royalty Board's imposition of late fees on the RIAA when it fails to pay copyright owners.

The issue arises in the case of "compulsory licenses" - that is where someone uses a musical work without the owner's permission.   Like a cover band recording a Led Zep tune without the band's permission.  The DC Circuit's decision has a nice explanation of compulsory licensing and how it works.  Excerpt below in italics:

Most songs played on the radio, sold on CDs in music stores, or digitally available on the Internet through services like iTunes embody two distinct copyrights-a copyright in the “musical work” and a copyright in the “sound recording.” See 17 U.S.C. § 102. The musical work is the musical composition-the notes and lyrics of the song as they appear on sheet music. The sound recording is the recorded musical work performed by a specific artist.

Although almost always intermingled in a single song, those two copyrights are legally distinct and may be owned and licensed separately. One party might own the copyright in the words and musical arrangement of a song, and another party might own the copyright in a particular artist's recording of those words and musical notes.

This case involves licenses in a limited category of copyrighted musical works-as opposed to sound recordings. Section 115 of the Copyright Act allows an individual to make and distribute phonorecords (that is, sound recordings) of a copyrighted musical work without reaching any kind of agreement with the copyright owner. That right does not include authorization to make exact copies of an existing sound recording and distribute it; if a musical work has been recorded and copyrighted by another artist, a licensee “may exercise his rights under the [§ 115] license only by assembling his own musicians, singers, recording engineers and equipment, etc. for the purpose of recording anew the musical work that is the subject of the [§ 115] license.” 2 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 8.04[A], at 8-58.5 (2009). For example, a § 115 licensee could pull together a group of musicians to record and sell a cover version of Bruce Springsteen's 1975 hit Born to Run, but that licensee could not make copies of Springsteen's recording of that song and sell them.

The § 115 licensing regime operates in a fairly straightforward manner. When a copyright owner distributes work “to the public,” § 115's provisions are triggered. 17 U.S.C. § 115(a)(1). Once that occurs, anyone may “obtain a compulsory license to make and distribute phonorecords of the work” under § 115 so long as the “primary purpose in making [the] phonorecords is to distribute them to the public for private use.” Id. Assuming the copyright has been registered with the Copyright Office, the licensee owes the copyright owner a royalty for every phonorecord “made and distributed in accordance with the [§ 115] license.” Id. § 115(c)(2). For purposes of the Copyright Act, a phonorecord is “distributed”-and an obligation to pay the copyright owner a royalty created-when “the person exercising the [§ 115] license has voluntarily and permanently parted with” the phonorecord. Id . In other words, the licensee's sale of its recording of the copyright owner's work triggers the royalty payment obligation. See Nimmer § 8.04[H][1], at 8-77.

Because the § 115 license issues without any agreement between the copyright owner and the licensee, the system needs a mechanism to figure out how much the licensee owes the copyright owner and what the terms for paying that rate should be. Although that mechanism has changed over time, the Copyright Royalty Board currently serves as the rulemaking body for this system. See generally Procedural Regulations for the Copyright Royalty Board, 70 Fed.Reg. 30,901 (May 31, 2005) (discussing the history of royalty ratemaking). The Board is a three-person panel appointed by the Librarian of Congress and removable only for cause by the Librarian.FN1 The Board sets the terms and rates for copyright royalties when copyright owners and licensees fail to negotiate terms and rates themselves. See Nimmer § 7.27[C], at 7-243.

FN1. RIAA has not raised a constitutional challenge to the method of appointment of the members of the Copyright Royalty Board. Cf. Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd., 574 F.3d 748, 755-56 (D.C.Cir.2009); SoundExchange, Inc. v. Librarian of Congress, 571 F.3d 1220, 1226-27 (D.C.Cir.2009) (Kavanaugh, J., concurring).

As relevant here, the Copyright Act requires the Board to set “reasonable terms and rates” for royalty payments made under the § 115 license when the parties to the license fail to do so. 17 U.S.C. § 801(b)(1). When establishing terms and rates under that license, the Copyright Act requires the Board to balance four general and sometimes conflicting policy objectives: (1) maximizing the availability of creative works to the public; (2) providing copyright owners a fair return for their creative works and copyright users a fair income; (3) recognizing the relative roles of the copyright owners and users; and (4) minimizing any disruptive impact on the industries involved. Id. § 801(b)(1)(A)-(D).

At specified intervals, the Board holds ratemaking proceedings for licenses issued under the Copyright Act. Section 115 ratemaking proceedings can occur every five years “or at such other times as the parties have agreed.” Id. § 804(b)(4).

In 1996, the parties with an interest in the § 115 license (such as the Recording Industry Association of America, the Songwriter's Guild of America, and the National Music Publishers' Association) agreed on various terms and rates for the compulsory license. They also agreed that the settlement with respect to those terms and rates would expire 10 years later. In 2006, after the parties found they could not reach a new compromise, the Board instituted proceedings to set certain terms and rates governing the operation of the § 115 license. The process was long and complicated, involving 28 days of live testimony, more than 140 exhibits, and more than 340 pleadings, motions, and orders. See Mechanical and Digital Phonorecord Delivery Rate Determination Proceeding, 74 Fed.Reg. 4510, 4511 (Jan. 26, 2009).

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Tuesday, June 22, 2010

10th Cir: Golan v Holder - First Amendment Challenge to Berne Convention's Taking Works Out of Public Domain Retroactively Fails

The 10th Circuit ruled yesterday against a group of distributors of foreign copyrighted works that had fallen into the public domain, but which Congress had restored copyright status by 1994 legislation implementing the Berne Convention, following the Uruguay Round of trade negotiations.

The group, represented in part by Prof. Lawrence Lessig and the Center for Internet and Society, included a man who had composed a marching band song based on a Shostakovitch symphony that had fallen into the public domain.

The situation arose because the US used to have a rule that if you didn't put a copyright notice on your work and register it with the US copyright office, it would fall into the public domain.   Many distributors of foreign copyrighted works failed to put proper notices on them or register them with the copyright office.  Notices and registration are known as "formalities".   For a while, the US was a rare country that required formalities, most didn't, pursuant to the Berne Convention.   The US enacted the Berne Convention Implementation Act in 1988 abolishing the requirement of formalities, but it did not restore copyright protection to foreign works that had fallen out of copyright.  In 1994, Congress restored copyright protection to these foreign works (it was not automatic and involved some bureaucracy).  People who'd used the works or created derivative works were supposed to work out reasonable license fees or have them fixed by the courts.

You can find the requirement of formalities in the Copyright Act of 1909.  I have included the entire 1909 Copyright Act for easy reference as an appendix to my Copyright Litigation Handbook.

The decision has a lot of interesting legislative history, and it's got a lot of litigation history.  (From my memory) it was in district court where plaintiff lost, there was an appeal that plaintiff won with instruction to perform a First Amendment analysis on remand, then plaintiff won again with the district judge holding that the statute violated the First Amendment.  Now, the 10th Circuit reverses, link to decision below:

10th Cir: Golan v Holder - First Amendment Challenge To Removal of Copyrighted Works From Public Domain Fails

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Monday, June 21, 2010

ACTA Update: Endorse A Petition Opposing ACTA

If you would like to voice your concern about the pending Anti-Counterfeiting Trade Agreement, a petition is going out soon, to view it and sign up, the link is below:

PIJIP: - American University Washington College of Law

My comments on ACTA here  and here.

Purchase Copyright Litigation Handbook from West here

Sunday, June 20, 2010

Indiana Jones in the Legal Profession: Cultural Property Law - American Society of International Law

When archaeologists go into the legal profession, they emerge pursuing cases that the rest of only dream about.  If you have an interest in litigating over pirate booty and Cambodian buddhas while coming up with solutions to international terrorism, while pursuing Nazis as terrorists are chasing you, then this is the practice area for you.

Cultural Heritage & Arts Review Here!

The American Society of International Law Interest Group on Cultural Heritage & Arts has released the first issue of the new Cultural Heritage & Arts Review: If you open the attachment in Acrobat Reader, you can access a Table of Contents that allows hyperlink to the articles by clicking on "View" then "Navigation Panels" and then "Bookmarks." The Review also available in the "Group Documents" section of the Interest Group home page.

A limited high quality print edition of this publication will be available soon, at a discounted rate for Members. Please contact Jennifer Kreder at or Christian DeFrancia at if you would like to place an order for a print version.

We are recruiting for editors and writers for the next issue, to be published in the Fall. Please contact us if interested. If you have not yet joined ASIL or the Interest Group, please do so at

For those seeking audio of the recent panel about the proposed U.S. Nazi-looted Art Commission, it is available here: (scroll down to Friday panels).

Check out

The Cultural Property and Archaeology Law Blog here.

The Illicit Cultural Property Blog here.

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SDNY: System of a Down: Mistakes in Copyright Registrations and Supplementary Registrations

System of a Down's Mezmerize on

The Code of Federal Regulations provides for "supplementary registration" in the following cases:

§201.5 Corrections and amplifications of copyright registrations; applications for supplementary registration. (a)  General. (1) This section prescribes conditions relating to the filing of an application for supplementary registration, to correct an error in a copyright registration or to amplify the information given in a registration, under section 408(d) of title 17 of the United States Code, as amended by Pub. L. 94-553. For the purposes of this section: (i)

A basic registration means any of the following:
(A) A copyright registration made under sections 408, 409, and 410 of title 17 of the United States Code, as amended by Pub. L. 94-553;
(B) a renewal registration made under section 304 of title 17 of the United States Code, as so amended;
(C) a registration of claim to copyright made under title 17 of the United States Code as it existed before January 1, 1978; or
(D) a renewal registration made under title 17 of the United States Code as it existed before January 1, 1978; and

(ii) A supplementary registration means a registration made upon application under section 408(d) of title 17 of the United States Code, as amended by Pub. L. 94-553, and the provisions of this section.

(2) No correction or amplification of the information in a basic registration will be made except pursuant to the provisions of this § 201.5. As an exception, where it is discovered that the record of a basic registration contains an error that the Copyright Office itself should have recognized at the time registration was made, the Office will take appropriate measures to rectify its error.

(b)  Persons entitled to file an application for supplementary registration; grounds of application. (1) Supplementary registration can be made only if a basic copyright registration for the same work has already been completed. After a basic registration has been completed, any author or other copyright claimant of the work, or the owner of any exclusive right in the work, or the duly authorized agent of any such author, other claimant, or owner, who wishes to correct or amplify the information given in the basic registration for the work may file an application for supplementary registration. n1 n1 If the person who, or on whose behalf, an application for supplementary registration is submitted is the same as the person identified as the copyright claimant in the basic registration, the Copyright Office will place a note referring to the supplementary registration on its records of the basic registration.

(2)  Supplementary registration may be made either to correct or to amplify the information in a basic registration. For the purposes of this section:

(i)  A correction is appropriate if information in the basic registration was incorrect at the time that basic registration was made, and the error is not one that the Copyright Office itself should have recognized;
(ii) An amplification is appropriate:  (A) To supplement or clarify the information that was required by the application for the basic registration and should have been provided, such as the identity of a co-author or co-claimant, but was omitted at the time the basic registration was made, or

(B)  To reflect changes in facts, other than those relating to transfer, license, or ownership of rights in the work, that have occurred since the basic registration was made.

(iii)  Supplementary registration is not appropriate:

(A)  As an amplification, to reflect a change in ownership that occurred on or after the effective date of the basic registration or to reflect the division, allocation, licensing or transfer of rights in a work; or
(B)  To correct errors in statements or notices on the copies of phonorecords of a work, or to reflect changes in the content of a work; and
(iv) Where a basic renewal registration has been made for a work during the last year of the relevant first-term copyright, supplementary registration to correct the renewal claimant or basis of claim or to add a renewal claimant is ordinarily possible only if the application for supplementary registration and fee are received in the Copyright Office within the last year of the relevant first-term copyright. If the error or omission in a basic renewal registration is extremely minor, and does not involve the identity of the renewal claimant or the legal basis of the claim, supplementary registration may be made at any time. In an exceptional case, however, supplementary registration may be made to correct the name of the renewal claimant and the legal basis of the claim at any time if clear, convincing, objective documentation is submitted to the Copyright Office which proves that an inadvertent error was made in failing to designate the correct living statutory renewal claimant in the basic renewal registration.

In Maxwood v. Malakian, 2010 WL 2010936 (May 18, 2010), SDNY USDJ Sweet analyzed the dilemma of a rock band System of a Down.  The facts were roughly these:

Band invites friend to jam while new album being prepared.
Band member wishes to gift a portion of writer's royalties to friend on one song.
Friend thanks band member in writing for 2% gift of writer's royalties.
When credits sent to SONY by band, the gift is mistakenly identified as a writing credit.
SONY files copyright registration with mistake.
Band notices mistake, asks SONY to fix it.
SONY files supplementary registration, but identifies giftee as a "silent writer".
When mistake pointed out again, SONY finally fixes it and gets it right.
Giftee decides he co-wrote song.
Giftee sues friend who gave him gift.

In a 16 page decision, Judge Sweet analyzes evidence presented at trial.   The court rejects claims of co-authorship, states emphatically that "mistakes are not admissions" and points out the Copyright Office's procedures to correct errors.

"Evidence in a supplemental registration that rebuts information in an original registration similarly rebuts any presumption accorded the facts on the original registration."

citing Estate of Hogarth v. Edgar Rice Burroughs, Inc., 342 F.3d 149, 165-167 (2d Cir. 2003).

The decision is an excellent primer for musicians on how to keep good records of the creative process.  Judge Sweet relied heavily on poetry journals, lyric sheets and spreadsheets created by band members showing writing and royalty splits.

I discuss Copyright Ownership and Licensing Litigation in Chapter 8 of Copyright Litigation Handbook, including disputes over joint authorship.

 Purchase Copyright Litigation Handbook from West here  

Friday, June 18, 2010

Fair Use Fridays: Ripping DVDs For Documentary Films - Is There A Right To High Quality Free Speech?

We know from the recent Salinger/Colting case discussed here that prior restraints on speech must be weighed when we look at injunctions in the copyright infringement context.

But what about in the fair use context?  Let's look at the statute and think about a documentary filmmaker who wants to make a "fair use" of someone else's copyrighted work:

Section 107 of the Copright Act - 17 U.S.C. § 107. Limitations on exclusive rights: Fair use provides:

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.
The Digital Millenium Copyright Act makes it a crime to circumvent encryption to rip someone else's copyrighted materials.  So isn't that criminal statute an impermissible prior restraint on free speech?
Doc filmmakers can't make good quality films without ripping DVDs.  They can get lower quality elsewhere.
The Copyright Office should act soon because the International Documentary Association has asked that the exemptions to the DMCA be reviewed.  HT to Techdirt, Hillicon Valley, reports here.  Mike Masnick at Techdirt is pessimistic, read the link:

Documentary Filmmakers Want DMCA Exemption; But Almost Definitely Won't Get It Techdirt

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Thursday, June 17, 2010

2d Cir: The Long Arm of New York Copyright Holders: Can New York Copyright Lawyers Sue America Without Leaving Manhattan?


Manhattan is a great place to be a copyright lawyer.  Since it is the publishing and advertising capital of the world, there is usually someone here in the infringement food chain.   With a subway ride, we are in court.  But how far will New York law, its long-arm statute, permit New York lawyers to pursue infringers who are not located in New York?

In Penguin Group v. American Buddha, 09-1739-cv (June 15, 2010), Judge Sack wrote an opinion for the Second Circuit certifying the following question to the New York Court of Appeals:

In copyright infringement cases, is the situs of injury for purposes of determining long-arm jurisdiction under N.Y. C.P.L.R. § 302(a)(3)(ii) the location of the infringing action or the residence or location of the principal place of business of the copyright holder?

The question is a major one.   American Buddha put copyrighted Penguin works online, claiming fair use.  People downloaded them outside of New York State.  Is the economic injury felt by the New York copyright holder enough to support long arm personal jurisdiction in New York State?

This is a debate of extraordinary importance for New York.  The District Court dismissed the case for lack of jurisdiction.

Where state law is unclear, a federal appeals court may certify the question to the New York Court of Appeals seeking an answer to the question.  If the NY Court of Appeals says that New York's long arm statute provides no jurisdiction, the District Court's opinion will be affirmed.  If the NY Court of Appeals finds jurisdiction, the Second Circuit has indicated that it will remand back to the District Court for further proceedings.

In the coming year, expect a debate to rage in the copyright community, these are big questions that could reshape our entire legal system and our notions of due process in a digital world.

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Friday, June 11, 2010

Fair Use Friday: Exploiting the Mona Lisa

\Partial image of Double Mona Lisa, After Warhol, (Peanut Butter + Jelly) 1999 Full image here

A basic tenet of copyright law is that once a copyright has expired, it enters the public domain, for all to use.  But when someone adds a copyrightable contribution to a public domain work, that contribution is copyrightable.   So when Andy Warhol made Double Mona Lisa:

Double Mona Lisa (Andy Warhol, 1963)

It is clear that Warhol was using Leonardo Da Vinci's public domain image of the Mona Lisa.   He probably took the image from a photograph of of the Mona Lisa.    The case law says that exact images of public domain works are not protected by copyright.

But now we see Vik Muniz taking Warhol's arrangement of the "double" Mona Lisa - and putting Warhol's name in the title of the work - part of an ancient artistic tradition.  Muniz selects the fine art medium of peanut butter and jelly to execute his work.

Is the borrowing of Warhol's name and arrangement of a PD work ok?  Does the selection of peanut butter and jelly drive the transformative nature of the work?   And would the answer change if Warhol's work were an entirely original composition NOT based on a public domain work?   And does the number of copies matter?

I think Muniz's composition is strikingly original and beautiful masterpiece of 20th Century art. 

Some thoughts for Fair Use Friday.  Meanwhile, watch the video to see whether scientists now believe that the Mona Lisa was pregnant.

Austria Returns Stolen and Extorted Altar Panels to Jewish Heir

According to the article linked below, Austria's Provenance Commission has recommended the return of artwork stolen by the Nazis, but then blocked in Austria by a post-War export ban.  After World War II, Austrian museums used the export ban to systematically extort Jews of their property.

Today, American museums that hold property stolen from Jews systematically extort them in one-sided "settlements" wrapped in great confidentiality, and bury the research to conceal the wrongdoing of the museum's former trustees and employees.   History will view this practice of systematic extortion by the members of the American Association of Museums with the same horror that we view the post-War extortion practices of the Austrian museums.

Austria also let the Leopold Museum keep an extorted work on the false pretext that the government of Austria doesn't own the Leopold Museum, so a law covering "federal museums" doesn't cover it.   This is a scandalous lie, since the government of Austria purchased Leopold's collection and will assume complete control of it on the death of Leopold and his wife.

Leopold brought the stolen Schiele Portrait of Wally into the United States and is supposed to stand trial this summer on the issue of whether or not he knew it was stolen when he brought it here.

Austria Urges Return of Altar Panels to Jewish Heir (Update1)

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Wednesday, June 09, 2010

Synchronizing Art to a Sound Recording: Do Financial Incentives Demotivate Creativity and Problem Solving?

HT to Mike Masnick of Techdirt.  Not only is Dan Pink's video by RSA Animate (embedded below) thought-provoking and relevant to whether or not money stimulates creative activity.  It is also relevant to the core purpose of the Copyright Act and arguments raised in defense of draconian copyright: whether or if financial incentives stimulate creativity.  Studies by the Federal Reserve and MIT raise the question of whether financial incentives actually decrease creativity.

Anyone trying to get more productivity out of an organization without spending more money ought to take these studies very seriously.

Far Copyleft folks see copyrighted works as mere free raw materials for creating new works.  The far Copyright folks see a copyrighted work as a sacred, inviolable and untouchable iconic thing that may only be accessed when, how, for how long and as often as the copyright owner dictates.

Far Copyright folks see a copyright as a complete monopoly from which windfall profits are to be extracted every time a new technology emerges to make a consumer's old licensed copy of a work obsolete or every time a consumer wants to use or dispose of the copy as he or she sees fit. The first sale doctrine lets us resell a car we've purchased without paying the manufacturer. Restraints on the alienation of property are disfavored in the common law because this blocks free economic activity.

Should we have to pay a German copyright holder because we want to make fun of Hitler using the German copyright holder's ridiculously earnest economic exploitation of the Hitler theme in the film Downfall? Or does the exploiter of a theme have to take crap from people who want to laugh at them or laugh at sometimes serious, sometimes silly themes using them?

The issue I think was wrongly decided in Dr. Seuss v. Penguin Books, a Ninth Circuit case decided in 1997.  Here is how the court handled the issue of parody?
It is the rule in this Circuit that though the satire need not be only of the copied work and may . . . also be a parody of modern society, the copied work must be, at least in part, an object of the parody, otherwise there would be no need to conjure up the original work. . . . By requiring that the copied work be an object of the parody, we merely insist that the audience be aware that underlying the parody there is an original and separate expression, attributable to a different artist.

* * *
We now turn our attention to The Cat NOT in the Hat! itself. The first two pages present a view of Los Angeles, with particular emphasis on the connection with Brentwood, given the depiction of the news camera lights. The story begins as follows:

A happy town Inside L.A. Where rich folks play The day away.
But under the moon The 12th of June. Two victims flail Assault! Assail! Somebody will go to jail!
Who will it be? Oh my! Oh me!

The third page reads: "One Knife? / Two Knife? / Red Knife / Dead Wife." This stanza no doubt mimics the first poem in Dr. Seuss' One Fish Two Fish Red Fish Blue Fish: "One fish / two fish / red fish / blue fish. Black fish / blue fish / old fish / new fish." For the next eighteen pages, Katz writes about Simpson's trip to Chicago, the noise outside Kato Kaelin's room, the bloody glove found by Mark Fuhrman, the Bronco chase, the booking, the hiring of lawyers, the assignment of Judge Ito, the talk show interest, the comment on DNA, and the selection of a jury. On the hiring of lawyers for Simpson, Katz writes:

A plea went out to Rob Shapiro Can you save the fallen hero? And Marcia Clark, hooray, hooray Was called in with a justice play.
A man this famous Never hires Lawyers like Jacoby-Meyers. When you're accused of a killing scheme You need to build a real Dream Team.
Cochran! Cochran! Doodle-doo Johnnie, won't you join the crew? Cochran! Cochran! Deedle-dee The Dream Team needs a victory.
These stanzas and the illustrations simply retell the Simpson tale. Although The Cat NOT in the Hat! does broadly mimic Dr. Seuss' characteristic style, it does not hold his style up to ridicule. The stanzas have "no critical bearing on the substance or style of" The Cat in the Hat. Katz and Wrinn merely use the Cat's stove-pipe hat, the narrator ("Dr. Juice), and the title (The Cat NOT in the Hat! ) "to get attention" or maybe even "to avoid the drudgery in working up something fresh." Acuff-Rose, 114 S. Ct. at 1172. While Simpson is depicted 13 times in the Cat's distinctively scrunched and somewhat shabby red and white stove-pipe hat, the substance and content of The Cat in the Hat is not conjured up by the focus on the Brown-Goldman murders or the O.J. Simpson trial. Because there is no effort to create a transformative work with "new expression, meaning, or message," the infringing work's commercial use further cuts against the fair use defense. 9 Id. at 1171.

So if I want to draw former President George W. Bush as Mickey Mouse and parody him by placing him in a Mickey/Minnie scenario, by this logic Disney can stop me from engaging in this core political speech because I am not making fun of Mickey, only of the former President.

How to permit political speech, promote creativity and maximize economic welfare for both copyright creators and society in general are questions implicated in these debates, with the cultural pendulum slowly swinging towards the Remix culture camp. There are a few signs that legal culture is moving in that direction, with judges taking a more expansive view of fair use.

When the Copyright Society had its convention in New Orleans a few years back, I was struck by the plight of Jazz musicians: they didn't have the right to a compulsory license.   So a bunch of white kids doing an exact cover of a Led Zep tune can force Led Zep to license the song at a cheap rate.  

But Jazz - which remixes, rearranges and is an art form that is derivative - can't get a compulsory license, and the changes and modifications to the original can't be protected without an additional license from the copyright owner - even though a sound recording in a cover song can.

According to the jazz musicians, the licensing practices of copyright owners have put them out of making a living and basically strangled their creativity.  It was a heartbreaking presentation. Jazz and its successors which rely on sampling, borrowing, remixing - all activities emanating from African-American traditions - have been severely penalized, to the point of practical extinction.

The Remix movie- with a white kid p/k/a Girl Talk at its center - shows how new technologies open up new creative possibilities.   And as white kids start looking to play a kind of American jazz with video, it is more likely that the courts will be more reluctant to penalize and criminalize that activity.

The video below is also a great example of using art to make a sound recording come alive through a new layer of creative labor.

 Purchase Copyright Litigation Handbook from West here 

Tuesday, June 08, 2010

How To File an Appeal: Useful Checklist for Filing Civil Appeals in the Second Circuit

I have attached a checklist for practitioners who must file appeals with the Second Circuit. The Local Rules have changed, and with the changes wrought by electronic filing, it's a whole new world. I will participate in a CLE program today at 5:30 p.m. starring Catherine O'Hagan Wolfe, Clerk of the Second Circuit sponsored by the Federal Bar Association and the Second Circuit Judicial Council, you can find the program here.   If I come across any new surprises tonight, I will post them.

Practitioner's Checklist for Filing Civil Appeals in the Second Circuit

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