Copyright Law & Live Music: Default Judgments and Unreasonable, Irrational Statutory Damages

THIRD CIRCUIT - COPYRIGHT INFRINGEMENT - STATUTORY DAMAGES - DEFAULT JUDGMENTS - MUSIC LAW

If a defendant in a copyright infringement litigation simply defaults by not showing up in court, is the plaintiff limited to recovering minimum statutory damages?

In Broadcast Music, Inc. v. Crocodile Rock Corporation, --- Fed. Appx. ---- (3d Cir. October 30, 2015), the United States Court of Appeals for the Third Circuit said "no".  BMI was permitted to recover a much greater amount than the statutory minimum and to recover significant attorneys fees.

A circuit court of  appeals reviews a U.S. district court's decisions for error.  Where, as here, a statute gives a district judge discretion in making an assessment, an appellate court must find an "abuse of discretion" in order to reverse the lower court's findings.  In this case, BMI scored $7,000 per copyright infringement, plus more than $67,000 in costs and attorneys fees.  BMI discovered that the Crocodile Rock Café in Allentown PA was having a live music night.  It sent an investigator.  The investigator found one BMI song played at a concert that generated $15,000 in income and four BMI songs played at a concert that generated $180.  BMI tried to get Crocodile Rock to enter into a license agreement, but Crocodile refused.

An entire chapter of my book Copyright Litigation Handbook (Thomson Reuters West 2015-2016) is devoted to the question  of attorneys fees under the Copyright Act.  The reality is that most copyright infringements won't warrant the cost of litigating them, absent the possibility of recovering attorneys fees.  To address this problem and to ensure that authors had robust remedies for redressing injuries to their authorial rights, Congress provided for copyright owners who have timely registered their works with the Copyright Office the option of electing statutory damages.   If a copyright owner elects statutory damages, the owner does not have to prove actual damages to recover.  

Section 504(c) provides that a plaintiff whose works are properly registered may elect an award of statutory damages "in a sum of not less than $750 or more than $30,000".

Instead of awarding $750 per copyright infringement when Crocodile Rock failed to show up in court, the district judge awarded $7,000 per infringement.   For playing five songs, Crocodile Rock was assessed statutory damages totaling $35,000, far more than the two entire concerts had generate.

The Third Circuit found the district judge to be free to assess copyright infringement damages anywhere within the statutory range and that any assessment within the range would essentially be immune from review on appeal.  Thus, just because the infringer did not profit from the copyright infringement, such evidence of a lack of profit would not disturb a district court's determination.  The Third Circuit specifically rejected Crocodile's argument that statutory damages must have some "reasonable rational relation" to the award.

Lesson for copyright owners: register your copyrights regularly, particularly upon publication.  If you do so prior to infringements occurring, you may qualify for statutory damages.   I devote a chapter of Copyright Litigation Handbook (Thomson Reuters West 2015-2016) to handling registration issues with the Copyright Office before you go to court.  Such issues may include correcting, amending, supplementing and expediting copyright registrations.

Lesson for rock star infringers.  If you infringe and don't take the problem seriously it can cost you your entire business.  Waiting until it is too late and then raising a big legal ruckus may make a manageable problem worse.

To read the Third Circuit's opinion, click here.

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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2015-2016) by Raymond J. Dowd
 

Copyright Law v. Trademark Law: Website Developer Can't Snooze On Cybersquatting Claims

Since the dawn of the commercial internet in the late 1990's, the relationships between website developers and corporations have progressed somewhat:  most parties have learned that healthy relationships grow out of  clear expectations and tight contracts.  In the beginning, however, commercial expectations of the parties differed wildly.  Over-aggressive web developers registered intellectual property claims to client IP that did not rightly belong to the developers as a means of locking in corporations to endlessly-escalating development contracts, on the one hand. On the other, corporations over-reached in asserting rights in code that developers intended to and should reasonably have been able to use to service other clients.   Over the years, web maintenance and development migrated in-house to a great extent and corporations hired counsel with greater intellectual property expertise.  Suddenly, even the smallest business enterprise became a publisher on the World Wide Web.  Websites are no longer as mysterious or intimidating as they once were.

A corporation's relationship with a web developer may involve trademark law issues:  trademark registration and logo design, copyright law related to logo creation and design, domain name registration and administration, and administrative and cost issues relating to how a website is modified and updated.  In creating such a relationship, a comprehensive contract is important.

However, there are still plenty of unclear situations where web developers pull out all of the stops and assert a law professor's fantasy hypothetical of intellectual property claims in order to get paid.  Whether the plaintiff is right or wrong, poorly-drafted or non-existent agreements can cause inhouse counsel an endless nightmare.

In D'Agostino v. Appliances Buy Phone, Inc.,  ----- Fed. Appx. --- (3d Cir. December 7, 2015) the Third Circuit dealt with a particularly thorny dispute.   The web developer went to state court in New Jersey and asserted a host of claims against a corporate client, including violations of the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. Section 1125(d)("ACPA").  He also brought fraud, contractual and copyright infringement claims.   And included Google as a defendant.

A litigant's choice of whether to go to federal or state court is an important topic in my book Copyright Litigation Handbook (Thomson Reuters West 2015-2016).  How claims are pleaded may determine the venue.  The cost and procedural implications are profound, since, as a practical matter, losing on initial procedural skirmishes may knock out the other party's claims or litigation budget, leading to settlement.

In D'Agostino, the web developer filed in NJ state court in 2010.  Because he had pleaded federal claims, Google removed the action to federal court.  "Removal" is a very simple, automatic procedure that I describe in Copyright Litigation Handbook.  Web developer then deleted his federal claims, stating that the deletion was "without prejudice" to filing a future federal action.   Web developer fully litigated his non-federal claims in state court an lost.   He then filed the federal D'Agostino action.

The Third Circuit found the web developer's cybersquatting claims to be barred by the doctrine of res judicata.   Under New Jersey law, a litigant must plead the "entire controversy" against a defendant or be barred from later litigation on that point.  Because federal courts do not have exclusive jurisdiction over claims arising under the Lanham Act such as trademark, unfair competition or cybersquatting, the Third Circuit found that the web developer could have and should have asserted the cybersquatting claims if he wanted to preserve them.  Thus, the web developer was barred from asserting cybersquatting claims in D'Agostino.

The web developer's copyright infringement claims had a different outcome.  New Jersey's "entire controversy" doctrine does not extend to claims arising under the Copyright Act, 17 U.S.C. Section 101 et seq.  The reason is that federal courts have exclusive jurisdiction over claims arising under the Copyright Act, and New Jersey law does not require a litigant to assert claims over which the New Jersey court would not have had jurisdiction.  

Thus the web developer's copyright infringement claim jumped the res judicata hurdle.  With respect to the defendant's statute of limitations defense relating to the copyright infringement claim, the Third Circuit found questions of fact as to when the copyright infringement claim accrued that could not be resolved at the pleadings stage and remanded for further findings.

In sum, five years after the initial complaint was filed in state court, the new federal case brings the corporation back to the beginning stages of an entire new litigation.   And the web developer is proceeding pro se.  Good reasons to pay attention to the procedural niceties at the outset of a litigation.

You can read the Third Circuit's D'Agostino opinion here.

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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2015-2016) by Raymond J. Dowd
 

Art Law: Have The Greeks Lost Their Marbles?

 Today I am attending a conference at Fordham Law School:  Looted Art and Cultural Property:  Current Controversies, Future Resolutions organized by the Lawyers Committee for Cultural Property Preservation at Fordham Law School.  The conference was completely sold out.

The breakfast reception was populated with the nation's top art lawyers and museum professionals showing that this conference should be on the calendar of any lawyers practicing in this field.

The keynote:  Lawrence Kaye addressed why the federal courts are ill-equipped to resolve cultural property disputes.

Right now the panel on the Parthenon/Elgin Marbles has launched.   If you have an interest in the topic of cultural heritage preservation, the LCCHP is the organization to join.

The Lawyers' Committee for Cultural Heritage Preservation Seventh Annual Conference

LCCHP is proudly co-sponsoring the event with the Fordham Art Law Society. 

Conference Program

8:00 a.m. – 9:00 a.m.     Registration and Breakfast

9:00 a.m. – 9:15 a.m.     Welcome

9:15 a.m. – 9:45 a.m.     Opening Keynote Address
Lawrence Kaye, Partner and Co-Chair of Herrick, Feinstein's International Art Law Group

9:45 a.m. – 11:00 a.m.     Panel 1: The Parthenon/ Elgin Marbles: New Perspectives on a Centuries-Old Dispute

Moderator: Leila Amineddoleh, Partner at Galluzzo & Amineddoleh LLP; Adjunct Professor at Fordham University School of Law and St. John's University School of Law

James Cuno, President and Chief Executive Officer, The J. Paul Getty Trust
Professor Clemente Marconi from the History of Greek Art and Archaeology at New York University's Institute of Fine Arts
Kevin P. Ray, Of Counsel in the Chicago office of the international law firm Greenberg Traurig, LLP
Irini A. Stamatoudi, General Director, Hellenic Copyright Organization, Hellenic Ministry of Culture and Sports
11:00 a.m. – 11:15 a.m.     Coffee Break
11:15 a.m. – 12:30 p.m.     Panel 2: Recent Developments in Cultural Heritage Restitution Cases: Where Are We and Where Are We going?

Moderator: Elizabeth Varner, Staff Curator, U.S. Department of the Interior, Interior Museum Program; Adjunct Professor, Indiana University Robert H. McKinney School of Law; Board Member, Lawyers' Committee for Cultural Heritage Preservation
Matthew Bogdanos, Assistant District Attorney, Manhattan, Colonel, United States Marine Corps Reserve, and author "Thieves of Baghdad"

Pierre Ciric, Founder of the Ciric Law Firm, PLLC

Howard N. Spiegler, Partner and Co-Chair of Herrick, Feinstein's International Art Law Group
12:30 p.m. – 2:00 p.m.     Lunch and Interview

Susan DeMenil, Documentary filmmaker; President & Director, Byzantine Fresco Foundation
Deborah Lehr, Director, The Antiquities Coalition

Boguslaw Winid, Ambassador of Poland to the United Nations

2:00 p.m. – 3:15 p.m.     Panel 3: Conflict-Related Looting and Destruction of Cultural Property: Is Current Policy Working?
Moderator: Channah Norman, General Counsel, Center of Military History, Department of the Army

Evan Ryan, Assistant Secretary of State for Education and Cultural Affairs
Brian I. Daniels, Ph.D., Director of Research and Programs and lecturer in the Anthropology Department at the University of Pennsylvania
Kate Fitz Gibbon, providing services in the areas of art, museum law, cultural heritage law, and estate planning, Santa Fe , New Mexico

Sandra Cobden, Senior Vice President and General Counsel, Christie's
3:15 p.m. – 3:30 p.m.     Coffee Break
3:30 p.m. – 4:45 p.m.     Panel 4: What is Digital Cultural Heritage and What Can it Do?

Moderator: Thomas R. Kline, Of Counsel, Andrews Kurth LLP; Professorial Lecturer, George Washington University Museum Studies Program; Interim President for the Lawyers' Committee for Cultural Heritage Preservation

Professor Dieter Fritsch, Institute for Photogrammetry at the Universitaet Stuttgart

Marinos Ioannides, Ph.D., Cyprus Technical University and Project Manager, Initial Training Network - Digital Cultural Heritage
Professor Roko Žarnić, University of Ljubljana and co-coordinator of ECTP Focus Area Cultural Heritage (FACH) 
4:45 p.m. – 5:15 p.m.  Closing Remarks
5:15 p.m. – 6:30 p.m.  Reception
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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2015-2016) by Raymond J. Dowd
 

Copyright Law & Dance: Can Mom Sue Music Copyright Holders Who Block Her YouTube Video Of Dancing Baby?

NINTH CIRCUIT - COPYRIGHT LAW - FAIR USE DOCTRINE - DMCA - DIGITAL MILLENIUM COPYRIGHT ACT - TAKEDOWN NOTICES - COPYRIGHT TROLLS - MUSIC LAW - VIDEOS - YOUTUBE





In Lenz v. Universal Music, 801 F.3d 1126 (9th Cir. Sept 14, 2015), the Ninth Circuit considered the question of whether a mother who posted a video on YouTube of Prince's "Lets Go Crazy" had the right to sue Universal Music because it took down her video without properly considering the issue of whether the video was fair use.   The Ninth Circuit Court of Appeals decided that mom had the right to sue and to collect at least nominal damages if the takedown was done without a proper consideration of the fair use doctrine.


This case has been around since 2007 and is truly iconic.   The video on YouTube was posted nine years ago and has been viewed over 1.8 million times.  You can follow Mom on Twitter @edenza


The case turns on the Digital Millenium Copyright Act ("DMCA"), 17 U.S.C. Section 512, which forbids a copyright owner to make a knowing misrepresentation in taking down content.  Below in italics is the court's discussion of the provision:

Section 512(c) permits service providers, e.g., YouTube or Google, to avoid copyright infringement liability for storing users' content if—among other requirements—the service provider “expeditiously” removes or disables access to the content after receiving notification from a copyright holder that the content is infringing. 17 U.S.C. § 512(c). Section 512(c)(3)(A) sets forth the elements that such a “takedown notification” must contain. These elements include identification of the copyrighted work, identification of the allegedly infringing material, and, critically, a statement that the copyright holder believes in good faith the infringing material “is not authorized by the copyright owner, its agent, or the law.” Id. § 512(c)(3)(A). The procedures outlined in § 512(c) are referred to as the DMCA's “takedown procedures.”

To avoid liability for disabling or removing content, the service provider must notify the user of the takedown. Id. § 512(g)(1)-(2). The user then has the option of restoring the content by sending a counter-notification, which must include a statement of “good faith belief that the material was removed or disabled as a result of mistake or misidentification....” Id. § 512(g)(3)(C). Upon receipt of a valid counter-notification, the service provider must inform the copyright holder of the counter-notification and restore the content within “not less than 10, nor more than 14, business days,” unless the service provider receives notice that the copyright holder has filed a lawsuit against the user seeking to restrain the user's infringing behavior. Id. § 512(g)(2)(B)-(C). The procedures outlined in § 512(g) are referred to as the DMCA's “put-back procedures.”

If an entity abuses the DMCA, it may be subject to liability under § 512(f). That section provides: “Any person who knowingly materially misrepresents under this section—(1) that material or activity is infringing, or (2) that material or activity was removed or disabled by mistake or misidentification, shall be liable for any damages....” Id. § 512(f). Subsection (1) generally applies to copyright holders and subsection (2) generally applies to users.

Lenz v Universal Music Corp., 801 F3d 1126, 1131 [9th Cir 2015] op amended and superseded on denial of reh, 13-16106, 2016 WL 1056082 [9th Cir Mar. 17, 2016]


The reason that the case is interesting is that it recognizes a tort in a wrongful takedown.  The Ninth Circuit analogizes 17 U.S.C. 512(f) to a case brought under 42 U.S.C. 1983.  This case is a long way towards giving First Amendment recognition to free expression via video on sharing services such as YouTube.


The Ninth Circuit amended its decision, a good discussion here and Techdirt's take here.


I commend watching the video of the oral argument (YouTube embed below).  When Judge Smith asks Universal's lawyer if he has children or how anyone could doubt that the dancing child was fair use, we have a strong sense of where the case is going.


Fair use is an exception to the copyright law and is codified at 17 U.S.C. 107.   This case is a wakeup call to the music industry in particular, and copyright trolls in general, that there may be a downside to over-aggressive enforcement of copyrights.


My book Copyright Litigation Handbook (Thomson Reuters 2015-2016) discusses the fair use doctrine and how it arises in the context of copyright infringement and takedown actions.


The court found that mom could potentially get nominal damages, but left the important question of whether she would be able to recover attorneys fees for a later date.  As in the context of 42 U.S.C. 1983 which is an action against a governmental actor for violating constitutional rights, the reality is that if folks who have their rights infringed can't find lawyers to fight for them, their rights will be illusory.


Anyone who cares about free speech and free expression on the internet should care about whether mom can share the video of her baby dancing.


For more on copyright law, choreography and The Lawnmower Dance, check out my last post here.

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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2015-2016) by Raymond J. Dowd
 

Copyright Law and Choreography: From The Lawnmower Dance To Bikram Yoga

COPYRIGHT LAW - CHOREOGRAPHY - COMPILATIONS - IDEA/EXPRESSION DICHOTOMY -USEFUL PROCESSES - BIKRAM YOGA - DANCE ROUTINES - COPYRIGHT IN RECIPES - YOGA ROUTINES - DANCE STEPS 












Can copyright law stop dance routines? The Ninth Circuit says no!  In Bikram's Yoga College of India, L.P. v. Evolation Yoga, LLC., 803 F.3d 1032 (9th Cir. Oct. 8, 2015), the Ninth Circuit rejected the Bikram's Yoga College's attempt to stop its former students from using the Bikram method of using a series 26 yoga poses in a 105-degree-heated studio.   Bikram Choudhury wrote a book describing his method in 1979 and made a claim to copyright in the book.   In 2002, the copyright registration was supplemented to claim the "compilation of exercises" contained in the 1979 book.   The 1979 book contained descriptions, photos and drawings of the exercises.


The Ninth Circuit concluded that Bikram's sequence of exercises was not copyrightable because it was an unprotectible idea or process and thus not the proper subject of copyright law.  Section 102(b) of the Copyright Act expressly excludes "any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodies in such work."


Section 102(b) of the Copyright Act codified a copyright law doctrine known as the "idea/expression dichotomy".  That is, "every idea, theory and fact in a copyrighted work becomes instantly available for public exploitation at the moment of publication" - even though copyright law protects the author's original contributions to the expression of the idea.


Here, Bikram sought protection of a useful, beneficial healing process that he described as a "system". The difference between copyright law and patent law is that patents may protect useful processes for limited times - copyright law does not.  As the court observed:  "Consumers would have little reason to buy Choudhury's book if Choudhury held a monopoly on the practice of the very activity that he sought to popularize."  The court drew analogies to the lack of copyright in recipes, bookkeeping methods, or in rules for competitive activities.


The Ninth Circuit further rejected Bikram's claims of a compilation or choreographic copyrights.  With respect to choreography, the court could not find a clear definition, but found that it had to be something more than dance steps or useful routines and pointed out that our days are filled with routinized physical movements that cannot be copyrighted but that have become dance routines, such as mowing the lawn or shaking a Polaroid picture.  The court's decision links to the "How To Do The Lawnmower Dance"  Youtube dance routine embedded at the beginning of this blog post.


The first chapter of my book, Copyright Litigation Handbook deals with the scope of copyright law's coverage. Copyrightability is an important issue and one of the first to be raised in a copyright litigation, usually on a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.  The Bikram case went to the Ninth Circuit Court of Appeals following the district court granting the defendant's motion for summary judgment for copyright infringement pursuant to Rule 56 of the Federal Rules of Civil Procedure.  Visit here to see the table of contents.


You can watch the oral argument below, you might enjoy the exchange over how yoga routines are different from jellyfish sculptures.








 






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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2015-2016) by Raymond J. Dowd
 

Federal Circuit On Slants and Redskins: Trademark and Copyright Registrations Versus The First Amendment

TRADEMARK REGISTRATION - COPYRIGHT REGISTRATION - FIRST AMENDMENT - FREE SPEECH - REGISTRATION OF SCANDALOUS MARKS


In 2006 when I was working on the first version of my book Copyright Litigation Handbook, I went to Washington, D.C. for a tour of the Copyright Office and to visit the former Register of Copyrights and her legal team.  It felt like the last scene of Indiana Jones and the Raiders of the Lost Ark: vast quantities of deposit materials: from telephone books to CDs to pornography, much of it being thrown away.  If deposit material is not selected for the Library of Congress's collection, the deposit material may be discarded.   A fact that sends evidentiary shivers down the spine of every litigator.


It was the pornography that surprised me most.  At the time it was videocassette and DVDs of pornography films stuffed into bookshelves that seemed to go on forever.  Why on earth were significant government resources being devoted to housing, storing and processing legal protections to these offensive materials?   A patient guide explained the whole system to me.


On December 22, 2014 the U.S. Court of Appeals for the Federal Circuit decided In re Simon Shiao Tam, 2015 WL 9287035 (Fed. Cir. December 22, 2015) which struck down as facially unconstitutional Section 2(a) of the Lanham Act which bars the United States Patent and Trademark Office from registering scandalous, immoral or disparaging marks.  15 U.S.C. 1052(a).  A number of en banc dissenters thought the statute should have been held unconstitutional as applied.   A cert petition is expected in March and the U.S.P.T.O. has put a moratorium on refusals of registrations of disparaging marks until the Supreme Court rules.  Until then, examiners have been instructed to simply suspend the applications according to IPWatchdog's report here.

The Slants - Misery Music Video

The plaintiff Simon Shiao Tam was denied registration of the trademark THE SLANTS.  Tam is an Asian-American musician who chose THE SLANTS to express an anti-racist message.


The decision is tremendously long and tremendously interesting.  The reason Copyright Litigation Blog is interested is that both the majority and leading dissenting opinions do a compare/contrast between the copyright registration and the trademark registration process that is highly instructive on the question of whether registration of a trademark implicates or subsidizes government speech.


As I noted above, copyright registrations are issued routinely for pornography.  I am aware of at least one federal case where a while back a judge in the SDNY refused to grant copyright protection to a pornographic work that he found immoral, although the name of the case escapes me now and I have long been skeptical of whether using the federal courts to threaten exposure of alleged downloaders of pornography was anything more than an extortion racket that violated public policy.   But I am not aware of any big moral controversies involving registrations of potentially offensive copyrighted works.   And, as the case explains, this is for good reason.   Copyrights subsist in offensive speech and have long been considered coextensive with the First Amendment.


But historically, trademarks have been treated differently. Trademarks have been considered commercial speech.   And the majority and dissenters differ on whether trademarks subsidize speech, regulate it, or promote certain types of speech over others.


When I read the media coverage of the case, I didn't think that the issue was so important.  But as I read the enormous decision, I listened to The Slants on Spotify.   Not bad!  I visited the Slants' website and found an impassioned discussion of the case by Mr. Tam here.


Tam says that the Federal Circuit hijacked his case in favor of the Washington Redskins, an interview here.


After having read the case, I am persuaded that the issues are of tremendous importance and that this case will have extraordinarily wide consequences for the future of the intersection of trademark and copyright law with the First Amendment.   Judge Dyk's dissent bears close watching.

In Re Tam the Slants - Trademark Registration

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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2015-2016) by Raymond J. Dowd