Six Copyright Law Resources For the Non-Copyright Practitioner

In updating Copyright Litigation Handbook this year for 2014-2015 (now available for purchase here), I came across a number of copyright law resources that should be of interest to attorneys who may not be copyright specialists.  I hope you enjoy this article that I wrote for this month's Federal Lawyer magazine.

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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2012-2013) by Raymond J. Dowd
 

Dunnington Partner Raymond J. Dowd to Keynote NYS Bar Association Trusts & Estates Event

 

 

 

Dunnington Partner Raymond J. Dowd will present the luncheon keynote lecture at the annual meeting of the Trusts and Estates Law Section of the New York Bar Association on January 28, 2015.  The Trusts and Estates Law Section is one of the largest sections of the New York State Bar Association, and its annual meeting attracts over six hundred attendees.  Mr. Dowd will address the topic Nazi Art Looting, Stolen Art and Our Museums: Why The Ghosts of The Past Still Haunt Us.  Tickets to the luncheon are available through http://www.nysba.org/Trusts/.

The Controversy Over Stolen Art In U.S. Museums

Why do American museums contain stolen European artworks acquired during and after World War II?  The National Stolen Property Act and comparable state laws have criminalized transporting, receiving and concealing stolen property for decades, yet the problem persists.  The keynote address will explore the reasons for this and the implications for trusts and estates practitioners.  

The Payne-Aldrich Tariff Act of 1909 cleared the way for America’s wealthiest citizens to import a vast collection of European art into the United States tax-free.  In the 1930s, a dispute between Andrew W. Mellon and the Internal Revenue Service resulted in the allowance of a tax deduction for the fair market value of art donated to U.S. museums. 

Following World War II, affluent American collectors clamored for bargain-priced art to donate to U.S. museums in exchange for substantial reductions on their personal income taxes.  Nazi spoliations and the murders of millions of Jews and others meant that the international markets were flooded with cheap, albeit stolen, artworks.  From 1945 through the early 1960s, the U.S. State Department issued warnings to U.S. museums, collectors, and dealers, advising them not to acquire artworks without solid provenance and requesting that they assist the U.S. in recovering artworks belonging to European citizens.  These State Department warnings were ignored by museums hungry to build world-class collections of European art.  Their donors, buoyed by a strong dollar, bought stolen art on the cheap and took massive tax deductions based on sale prices of comparable pieces from the latest auctions. 

The loophole in the tax code incentivizing donations of stolen art persists today, raising profound questions of tax fairness and abuse of not-for-profit corporations nationwide.  As a result of this breach of the public trust, the American public continues to subsidize museums with tax breaks yet will inherit collections tainted by stolen or undocumented artworks.  As U.S. museums have repeatedly acknowledged, the problem of artworks lacking appropriate provenance documentation in U.S. museums is a tremendous one, raising serious questions about the stewardship of our nation’s museums.

Over the last decade, Mr. Dowd has represented a number of heirs of Holocaust victims and owners in trying to reclaim artworks stolen during World War II faced with laches defenses.  In 2006, Mr. Dowd was retained by the heirs of artist George Grosz to recover three artworks at the Museum of Modern Art stolen from Grosz’s Jewish art dealer Alfred Flechtheim shortly after Grosz fled in January 1933 to New York, where he taught at the Art Students League on 57th Street.  Grosz was declared “cultural enemy number one” by the Nazis, who were enraged by Grosz’s caricatures of Hitler and other prominent party members.  Flechtheim’s inventory of Grosz artwork was stolen (“Aryanized”) in 1933.  Mr. Dowd sued on April 9, 2009, within three years of the MoMA’s trustees refusing to return the artworks.  Under New York’s traditional “demand and refusal” rule, the suit was timely.  However, the Southern District of New York found an “implied refusal” because the MoMA had spent a lengthy amount of time in settlement discussions.  Grosz v. MoMA, 772 F.Supp.2d 473 (S.D.N.Y. 2010).  Mr. Dowd went all the way to the U.S. Supreme Court in challenging this ruling.  403 Fed.Appx. 575 (2d Cir. 2010); 132 S.Ct. (2011)(denying cert.).  MoMA continues to resist sharing evidence necessary for the heirs to demonstrate that the artworks were stolen from Alfred Flechtheim and laundered through Curt Valentin, an agent for the Nazis operating in New York.

In 2008, Mr. Dowd was lead trial counsel in the Southern District of New York the first Holocaust-era art case in U.S. federal court history ever to go to trial: Bakalar v. Vavra, 2008 WL 4067335 (S.D.N.Y. 2008).  The trial judge applied Swiss law to give a 1964 purchaser good title to the artwork.  Mr. Dowd successfully appealed to the Second Circuit, obtaining a reversal and remand for the trial judge to consider evidence of Nazi looting in the record and to apply New York law.  619 F.3d 136 (2d. Cir. 2010).  The trial judge, in decisions affirmed by the Second Circuit Court of Appeals, excluded an expert report by Dr. Jonathan Petropoulos concluding that the artworks were looted from Fritz Grunbaum by the Nazis and instead decided that although the purchaser could not show good chain of title, Grunbaum heirs’ claims were barred by the doctrine of laches, despite there being no evidence that the family knew that any artworks had survived World War II.  819 F. Supp.2d 298 (S.D.N.Y. 2011) aff’d 500 Fed. Appx. 6 (2d Cir. 2012), cert. denied 133 S.Ct. 2038 (2013).  Grunbaum’s heirs continue to advocate for the consideration by the authorities of the expert evidence of Nazi looting of Grunbaum’s collection and for restitution to be made.

On November 4, 2014, Mr. Dowd succeeded in recovering for the heirs of Fritz Grunbaum Town on the Blue River (1910), a watercolor drawing by the Austrian artist Egon Schiele which was auctioned at Christie’s following its recovery.  Grunbaum was a renowned Viennese cabaret performer who had eighty-one Schiele artworks in his apartment when the Gestapo arrested him on March 22, 1938 and deported him to the Dachau Concentration Camp, where he died penniless on January 14, 1941.  Town on the Blue River sold at auction for 2.5 million dollars—more than double Christie’s high estimate—and was the subject of an October 24, 2014 New York Times article, Dispute Over Nazi Victim’s Art: Christie’s and Sotheby’s Differ on Handling of 2 Schieles.  European and American museums and private collectors today hold many artworks stolen from Fritz Grunbaum, and Mr. Dowd continues recovery efforts on behalf of the Grunbaum family.

In Matter of Flamenbaum, 22 N.Y.3d 962, 1 N.E.3d 782 (2013), Mr. Dowd succeeded on behalf of the world-famous Pergamon Museum in Berlin in persuading the New York Court of Appeals to order the return of an ancient Assyrian tablet dating to the reign of King Tukulti-Ninurta II (1200 B.C.).  The tablet went missing when Stalin’s troops invaded and occupied East Berlin in 1945.  It turned up in 2006 during a contested accounting proceeding in Nassau County Surrogate’s Court in a safe deposit box that belonged to a deceased Auschwitz survivor.  Ultimately, the New York Court of Appeals rejected the executor’s argument that the “spoils of war” doctrine permitted the decedent to retain the amulet.  The Court further rejected the argument that the doctrine of laches barred the Museum’s restitution claim.  In the wake of Flamenbaum, it is clear that under New York law, where there is a thief in the chain of title, no subsequent possessor can take good title and that the burden of proving the affirmative defense of laches is a heavy one.

In 2013, Mr. Dowd wrote “Nazi Looted Art and Cocaine: When Museum Directors Take It, Call The Cops” 14 Rutgers Journal of Law & Religion (May 2013).  In the article, Mr. Dowd argues that statutes of limitations and laches cannot be used to launder title to stolen property, that Nazi looted art ought to be treated like contraband or drugs, and that due to the unique facts of World War II and U.S. foreign policy repudiating Nazi acts of property spoliation, U.S. museums should not be able to shield Nazi-era stolen art in their collections from scrutiny and restitution.  In 2013, as a result of advocacy efforts in which Mr. Dowd participated, the Federal Bar Association now advocates that Congress should create a Commission on Nazi-Confiscated Art Claims to assist heirs in recovering Holocaust-era looted assets.

About Ray Dowd

Mr. Dowd’s first case in New York County Surrogate’s Court was Matter of Doris Duke, a dispute over the estate of the American Tobacco heiress.  In 1994, Mr. Dowd successfully petitioned for the removal of Doris Duke’s butler, Bernard Lafferty, and U.S Trust Company as co-executors of the Duke estate.  These efforts aided in the recovery of millions in misspent funds.  Mr. Dowd’s efforts were chronicled in Vanity Fair magazine and on the front pages of New York’s tabloids.  The case garnered worldwide headlines and was immortalized by Hollywood.  As part of the subsequent proceedings, Mr. Dowd succeeded in upholding the first testamentary honorary pet trust in New York State history by using the life of the trustee as the measuring life to create a $100,000 trust fund for Ms. Duke’s dogs.  Mr. Dowd has since litigated numerous contested probate matters, guardianship proceedings, and accountings, including a rare contested adoption proceeding in Surrogate’s Court on behalf of a 9/11 victim.

Mr. Dowd is a partner in the law firm of Dunnington, Bartholow & Miller LLP in New York City.  He currently serves on the Board of Directors of the Federal Bar Association, having served as General Counsel (2011-2012), Vice President for the Second Circuit (2008-2013), President of the Southern District of New York Chapter (2006-2008), on the Editorial Board of The Federal Lawyer (2009-2011), and on the FBA Government Relations Committee (2010-2013).  From 2013-2014, Mr. Dowd served as President of Network of Bar Leaders, a coalition of over fifty bar associations in the Metropolitan New York area.  In 2013, he was appointed to serve on the Planning Committee for the 2014 Second Circuit Judicial Conference titled Cybersecurity in an Age of Cyberterrorism.  Mr. Dowd is the author of Copyright Litigation Handbook (West 8th Ed. 2014-2015) (updated annually).

Mr. Dowd’s practice consists of federal and state trial and appellate litigation, arbitration and mediation.  He served as lead trial counsel in notable cases involving art law, copyrights, trademarks, cybersquatting, privacy, trusts and decedents estates, licensing, corporate and real estate transactions.  He has litigated questions of Austrian, Canadian, French, German, Italian, Russian and Swiss law.

Mr. Dowd lectures frequently on copyright litigation, including the prestigious Copyright Society of the U.S.A.  At the 2009 Prague Conference on Holocaust-Era Assets, he was selected for an expert legal panel, and he has lectured worldwide on the matter of looted art, including at the Jewish Museum in Berlin, Yad Vashem in Jerusalem, the Pennsylvania Academy of the Fine Arts, the San Francisco War Memorial, the U.S. District Court for the District of Columbia, and many chapters of the Federal Bar Association.  In 2007, he co-founded the annual Art Litigation and Dispute Resolution Institute at New York County Lawyers’ Association.  In 2014, Mr. Dowd was selected by the Brandeis Society to deliver a lecture commemorating the 76th anniversary of Kristallnacht.  He currently serves on the Board of Governors and is Chair of the Education Committee at the National Arts Club in New York City.

Mr. Dowd is a graduate of Manhattan College (B.A. International Studies cum laude, 1986) and Fordham Law School (1991), where he served on the Fordham International Law Journal.  He speaks French and Italian.  He is admitted to practice in the State of New York, to the Southern and Eastern Districts of New York, and to the First, Second, Fifth, Seventh, Ninth, and Tenth Circuit Courts of Appeals.

About Dunnington

Dunnington, Bartholow & Miller LLP was selected as a 2014 Top Ranked Law Firm for Intellectual Property by Corporate Counsel/ALM/The American Lawyer.  Dunnington is a full-service law firm providing corporate, litigation, intellectual property, real estate, taxation and estate planning services for an international clientele.  Find out more at www.dunnington.com.

Attorney advertising.  Past results do not guarantee future outcomes.

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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2012-2013) by Raymond J. Dowd
 

Raymond Dowd a Lawyer With an Unconventional Hero

Don Quixote after his battle with the cat - Gustave Dore

For family, friends, colleagues, judges and adversaries who have always known that I preferred to follow the impossible dreams that arise from reading too many books, an interview with me by Amelia Pang from Epoch Times Raymond Dowd a This is New York: Raymond Dowd a Lawyer With an Unconventional Hero.   Follow Amelia's thoughts on New York @ameliapang29.

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 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2012-2013) by Raymond J. Dowd
 

Copyright Law: Copyright, Ethics & Social Media: What The Connected Lawyer Needs to Know

Ray dowd copyright, ethics & social media- what the connected lawyer needs to know- csusa presentation 2.16 from Raymond Dowd

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 Purchase Copyright Litigation Handbook 2011 by Raymond J. Dowd from West here  

The Art of Judging - Late 8th Circuit Judge Richard S. Arnold

Wonderful and humorous presentation by the late 8th Circuit judge Richard S. Arnold, terrific take on the judicial nominations process.

 Purchase Copyright Litigation Handbook 2010 by Raymond J. Dowd from West here  

Federal Judiciary Channel Launches on YouTube

The Federal Judiciary has launched a channel on YouTube, I subscribed and was number 9.   They have posted a number of instructional videos about the court system.  A series of videos on bankruptcy may be helpful to those in that field.

Encyclopedias of Facts About Fiction: J.K. Rowling and Harry Potter

Warner Bros. Entertainment Inc. v. RDR Books, --- F. Supp.2d ---, 2008 WL 4126736 (9/8/2008) S.D.N.Y., Patterson, J.

A Harry Potter fan created a lexicon, available on the internet. The lexicon was popular with everyone, including J.K. Rowling and the people who made films about her books. Rowling wrote on her website "This is such a great site that I have been known to sneak into an internet cafe while out writing and check a fact rather than go into a bookshop and buy a copy of Harry Potter (which is embarrassing)." But when the fan published a book with the website's contents, Rowling sued, claiming copyright infringement. The defense was "fair use".

The court found that the defendant copied from the Harry Potter books, and indeed, copied too much and too clumsily to qualify for the fair use. The defendant failed to properly use quotation marks to indicate "borrowed" text. Also, the defendant borrowed too much expression from the originals. Significantly, Rowling had already prepared two lexicon-type works "Fantastic Beast & Where to Find Them" and "Quidditch Through the Ages", and the defendant had borrowed verbatim many of Rowling's own definitions relating to her Harry Potter fantasy world.

The court noted that there is a usefulness and a demand for reference guides to fictional worlds written by third parties, such as Paul F. Ford's Companion to Narnia: A Complete Guide to the Magical World of C.S. Lewis's The Chronicles of Narnia.

After closely weighing the "fair use" factors, the court issued a permanent injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure against publication of defendant's book. The court found that where a prima facie showing of infringement was made, irreparable harm is presumed, but questioned whether that presumption had survived the U.S. Supreme Court's decision in eBay Inc. v. MercExchange LLC, 547 U.S. 388 (2006).

From the decision, it appears that the court was quite sympathetic to the defendant's apparent underlying goal of publishing a reference guide without Ms. Rowling's consent and was cognizant of the social utility of this type of publication. If the publisher had done a better packaging and editing job, had worked with the plaintiff to remove the more extensive borrowings, provide better citations and added a bit more "scholarly" commentary, it appears that the court would have found fair use.

As in most of these fair use cases, the devil is in the details.

User-Generated Video Uploads Veoh, Napster, Google and Safe Harbors

In Io Group, Inc. v. Veoh Networks, Inc., No. C06-03926 (HRL), a decision dated August 27, 2008 by Northern District of California Judge Harold Lloyd, discussed by PC Magazine here, the court found that the video uploading service found at http://www.veoh.com/ is not liable for copyright infringement.

The Veoh website permits users to view and upload their own videos and to share revenues generated from advertising revenues with Veoh. Veoh automates the process, so Veoh is not engaged in reviewing content before it goes up. You can also watch television shows made available by Veoh's "content partners". I note such shows as CSI and Ugly Betty from Veoh's home page.

The plaintiff sued Veoh claiming that its copyrighted films were posted on Veoh without bothering to give Veoh notice beforehand.

The decision has a great discussion of the technology involved in the uploading and storing process. It also has a thorough discussion of Veoh's user policies and the legislative history relative to the Digital Millenium Copyright Act that provides a "safe harbor" to online service providers who take reasonable measures to ensure that they are not helping copyright infringers. There is an informative discussion of why Veoh's case differs from the facts of Napster, although the underlying facts of Napster were not fully fleshed out. In today's New York Post, the Veoh case was reported as "Copyright case may aid Google".

Judge Lloyd found Veoh's policy to be reasonable, and rejected arguments that a stronger policy which would be more effective in barring people from creating new false user names was mandated as a condition for avoiding copyright infringement liability. He rejected the argument that the possibility of a banned user creating new false user names amounted to no policy at all. He also made clear that the law was designed to permit different approaches to developing an anti-infringement policy.

Certainly, this flexible approach has to be encouraging to Google, whose policies were not 100% effective against people who actively sought to foil them.

Document Production During Discovery: Search and Redact with Acrobat 8 Pro

Redaction is the process of removing information from documents. You can see from the attached image, which is a slide that I recently used in a litigation, I have redacted the title of the slide using Adobe Acrobat 8 Pro.

One of the most tedious and time-consuming jobs in litigation is producing privilege logs and redacting sensitive proprietary information such as trade secrets, medical information, credit card and social-security information from documents. Mistakes are often made, even by the largest and most sophisticated law firms. Computers and technology can ease the problem, but in the end, any mechanical device will make errors that need to be checked by thinking, trained humans.

The combination of high-speed scanning and electronic filing requirements in many courts have forced the electronic age onto many litigators, and now the game is figuring out how to sort through, organize and work efficiently with large quantities of documents in PDF format.

Fortunately, Adobe has created some powerful tools to save time and money. Let's say you have documents that need to potentially be produced to the adversary. Scan them. You can Bates-number them right in Acrobat (Advanced/Document Processing/Bates Numbering/Add). You probably want to break the documents down into PDFs of manageable size. Under the Acrobat "Document" dropdown menu, use "Recognize text using OCR". OCR is optical character recognition. It means that your computer will read the text contained in the PDF as text, rather than as an image. If a PDF is saved as an image, your computer will not pick up any of the words in the text.

To create a privilege log, in looking for attorney/client or work product-privileged documents, one could simply search, say an attorney's name and go through one-by-one each mention. This is a slow process. If you go to the "Advance" dropdown menu, hit Redaction. Then "Search and Redact". A search on the attorney's name will now mark every instance in the document that the attorney's name appears and give you a handy table so that you can jump to each instance the name appears. Since you probable want to eliminate more information than just the attorney's name, you would mark for redaction (see below) all of the privileged information.

To "blacken out" information that you wish to redact, once you have scanned and saved the PDF, go to the "Advanced" dropdown menu. Click on "Redaction". Click on "Show redaction toolbar". Now you can search the entire document to find every instance of a particular word, "Mark for Redaction" and then "Apply Redactions". Make sure to read the help features. Also make sure to save the document with a new name and to make sure to delete metadata as you are leaving the document (a self-explanatory screen pops up as you leave the document).

Why is this redaction function so important? Well, according to Adobe, it really gets rid of the underlying information so that a tech person cannot figure out a way around it. There are some famous instances, reported here and here of people thinking that they'd blacked out information, but people were able to simply look behind the blackened-out portion to find confidential personal information and important government secrets.

Caveat: read the help screens and warnings carefully. OCR is not perfect, and it will not pick up handwriting, images, or text that is not properly aligned. For example, the image above of Chief Inspector Benesch contained both text (the title) and a provenance of the artwork that had been scanned as an image. So if I searched the word "Benesch" to redact, the search function would not pick up the word "Benesch" from the image portion of the slide.

DO NOT WORK FROM ORIGINALS. You must make sure that you have an entire original set saved somewhere safe, because redaction actually removes information, thus destroying the original file. Adobe puts warning screens in to remind you of this. There is no technological shortcut that will bypass a trained set of eyes conducting the review, but proper use of this powerful tool should be a big timesaver.

Of Mice and Men - Copyright Termination Rights

The Second Circuit just reversed a district court decision that had permitted the heirs of John Steinbeck to terminate a copyright grant to Penguin Group.

The issue arose from a termination right granted to authors and their heirs that corresponded to the extension of the copyright term. The logic was that if copyright terms were extended, publishers should not receive an unfair windfall without letting authors or their heirs renegotiate. An historic logic for letting authors terminate is that young authors would often enter into unfavorable agreements and giving them a chance to renegotiate later would compel publishers to reckon with the mature authors' better bargaining power.

Steinbeck's widow had renegotiated a 1938 rights grant in 1994. The Second Circuit found that the 1994 renegotiation was a complete termination of the 1938 rights grant. Steinbeck's widows heirs tried to exercise their termination rights in 2004.

But the Second Circuit found that, applying New York contract law, the 1938 grant had been terminated, giving the widows heirs no pre-1978 rights grants to terminate. Essentially, an author or heirs get one crack at renegotiating.

--- F.3d ----, 2008 WL 3376654 (2d Cir. 2008).

Bates Numbering with Adobe Acrobat 8 Pro

I have just mastered the Bates-numbering function of Adobe 8 Pro. It enables you to Bates-number large quantities of PDF files. Given that most cases are now filed electronically, this makes it that much easier to never see paper in the office. Adobe lets you place a large number of PDFs into one window, reorganize them, then insert a Bates-number into the first page of the first document that then continues throughout the rest of the batch. You can also easily search for documents by Bates number.

Working in a complex international case, I fought for a long time to convince my European counterparts of the wisdom of Bates-numbering. Now that documents number in the thousands, they are convinced of the wisdom!

I don't know how long lawyers have been seriously Bates-numbering documents, but I recently had occasion to review the Nuremberg trial exhibits in the USGPO publication Nazi Conspiracy and Agression (1946). It seems that each international team of prosecutors was using a unique Bates-style system to stamp hundreds of thousands of documents as they were received.

Probably only lawyers could get so worked up about page numbers, but there is nothing worse than collecting useless evidence because you can't tell what a witness was looking at, or fumbling around with mis-numbered or unnumbered pages in a courtroom.

Some Bates-numbering background and history from Wikipedia:

Bates numbering (also known as Bates stamping or Bates coding) is used in the legal, medical, and business fields to place identifying numbers and/or date/time-marks on images and documents as they are scanned or processed (for example, during the discovery stage of preparations for trial or identifying business receipts). Bates Stamping can be used to mark and identify images with copyrights by putting a company name, logo and/or legal copyright on them. This process provides identification, protection, and auto-increment numbering of the images.
Bates numbering is commonly used as an organizational method to label and identify legal documents. During the discovery phase of litigation, a large number of documents might necessitate the use of unique identifiers for each page of each document for reference and retreival. Bates numbering (named for the Bates automatic numbering machine), assigns an arbitrary unique identifier to each page. Such "numbering" may be solely numeric or may contain a combination of letters and numbers (alphanumeric). There is no standard method for numbering documents. Examples of Bates numbers schemes used in tobacco cases may be found here.
Manual Bates stamping uses a self inking stamp with numbered wheels (5, 6, and 7-wheeled models are common) that automatically increment each time the stamp is pressed down on a page (some stamps allow for duplicate documents by only incrementing after two or more presses). Today, preprinted, self-adhesive labels are common as is electronic document discovery (EDD) software that can electronically "stamp" documents stored as computer files by superimpsoing numbers onto them.
The Bates Automatic Numbering Machine was patented in 1891-93 by the Bates Manufacturing Company of Edison, NJ.[1]
Retrieved from "http://en.wikipedia.org/wiki/Bates_numbering"

Copyright, Architecture and McMansions

Architectural Works & Copyright Law:

Would you like fries with that McMansion?

A Joint Meeting of the Construction Law

Committee and the IP Subcommitteeof EMIPS

Date: Tuesday, February 26, 2008

Time: 6:00 pmLocation: NYCLA, 14 Vesey Street; Board Room

Presenters: Raymond Dowd and Braden Farber

Please join us for a discussion of Axelrod & Cherveny v. Winmar Homes(E.D.N.Y. March 6, 2007)http://www.websupp.org/data/EDNY/2:05-cv-00711-46-EDNY.pdf<http://www.websupp.org/data/EDNY/2:05-cv-00711-46-EDNY.pdf > and howcopyright law applies to architectural works under the Architectural WorksCopyright Act.

Our guest speaker, Braden Farber, was lead counsel in theAxelrod case. Pictures of the architectural works at issue are available athttp://www.archpaper.com/news/2007_0501.htm.

Biographies:Raymond J. Dowd is a member of Dunnington, Bartholow & Millers's corporate,litigation and arbitration practice groups. He has broad commercial litigation experience in both federal and state courts, and has representedcopyright, trademark and domain name owners and content providers intransactions and litigation of almost every type, representing bothplaintiffs and defendants. He has conducted numerous bench and jury trials,and arbitrations, and has obtained, enforced, and collected numerousjudgments. In addition, he has provided corporate and transactionalrepresentation for a number of entrepreneurial companies from theincorporation and startup phase through significant growth. Mr. Dowd regularly speaks to trade associations on copyright, trademark andlitigation issues, and participates in organizing continuing legal educationprograms. Additionally, Mr. Dowd is the author of the Copyright LitigationHandbook. (http://www.dunnington.com/biodowd.html).

Braden Farber is a partner at Farber, Brocks & Zane. Mr. Farber specializesin representing architects, engineers, other design professionals andcontractors in construction related matters, and also serves as counsel tomany design firms, property owners, real estate developers and contractors.Mr. Farber is a member of several design professional organizations andsocieties, is a frequent lecturer on relevant topics of interest, and alsoprovides accredited continuing education courses. Mr. Farber also handlesgeneral liability and environmental claims for private and municipal property owners, contractors and other business owners.(http://fbzlaw.com/Attorneys/BradenFarber.php)

*From a New York County Lawyers' Association bulletin. Architecture and copyright is a hot topic. Many builders and architects don't know their rights and how to protect themselves. As we head into a recession, we should see many litigations relating to construction hitting the federal courts under the guise of copyright. Special thanks to EMIPS Chair Olivera Medenica and Construction Law Committee Chair Carol Sigmond for putting this together and getting us NYCLA's prestigious Board Room.

Video Search Engines and Copyright Infringement: Rule of Thumb

If you go to http://www.ditto.com/ and type in "Napoleon Bonaparte" the video search engine will pull up twelve "thumbnail" images of the late, great Emperor. "Thumbnails" are small, low resolution images that since the Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003) have been assumed by courts to be commercially valueless. An example is found at left.

Enter "Perfect 10" a producer of photographs of naturally-beautiful naked women. Perfect 10 sued Google because Google operates a video search engine that gathers thumbnails in response to search queries.

Perfect 10 argued that it had created a market for thumbnails: selling thumbnails to users of cell phones who wanted to use naturally beautiful naked women as wallpaper.

Perfect 10 convinced a California District Court judge to enjoin Google from using its video search engine pending the outcome of the trial. The court found that Google's use of the thumbnails was probably copyright infringement and not "fair use" because of Perfect 10's new commercial use for the hitherto worthless thumbnails.

On May 16, 2007, in Perfect 10, Inc. v. Amazon.com, Inc., ---F.3d---, 2007 WL 1428632 (9th Cir. 2007), the Ninth Circuit reversed. The decision analyzed very carefully why gathering thumbnails, which are mere URL instructions, is really not copying (doesn't violate "display" right and doesn't violate "distribution" right of copyright owner), and how the video search engine's use of the original copyrighted works is "highly" transformative. A careful look at Napoleon's face above might lead the average viewer to agree.

Folks who obssess over Napster, Grokster and all of that will have a field day reading this decision which then covers secondary liability (contributory and vicarious infringement) (Google raised the argument that its video search engine had a substantial non-infringing use). Essentially Perfect 10's argument was that people other than Google were posting Perfect 10 images to their websites without permission and that Google's search engine was then re-copying and re-distributing these infringing works. The Ninth Circuit found that "Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10's copyrighted works, and failed to take such steps."

N.B. - The Ninth Circuit found that Perfect 10 had not really shown that their market for thumbnails was being harmed by Google or that Google users were using thumbnails to create their own wallpaper. When a plaintiff who can show these facts comes back to court in a few years, we may have a new rule of thumb.

Contracts Involving Uncopyrightable Ideas

Copyright does not protect "ideas". It also doesn't protect facts. But if parties agree by contract that one is going to pay another for an idea, that contract may be enforceable. In my mind, prior to doing any research, the lead case on contracts involving ideas is Buchwald v. Paramount Pictures, 1990 WL 357611 (Cal. Superior), 13 U.S.P.Q.2d 1497, 17 Media L. Rep 1257 (Cal. Super. L.A. Co. 1990)(not reported in Cal. Rptr.). When I say "in my mind" - the story of columnist Art Buchwald submitting a 2.5 page treatment to Paramount Pictures, Paramount agreeing to pay him for the idea, and then reneging by making a film called "Coming to America" starring Eddie Murphy based on that idea without paying Buchwald is so memorable.

But when I conducted an "ALLFEDS" search on Westlaw, I found only one case citing the Buchwald case. Beal v. Paramount Pictures Corp., 20 F.3d 454 (11th Cir. 1994). I didn't check the state database. But there were 68 secondary sources citing Buchwald. So it's a case in which the peanut gallery of legal commentators have great interest, but in which the courts have no interest. Over the last month I read Fatal Subtraction: How Hollywood Really Does Business (The Inside Story of Buchwald v. Paramount) by Pierce O'Donnell and Dennis McDougal (Doubleday 1992). It's a pretty good story for a lawyer to read in terms of case strategy, not giving up, and taking risks on some long shot legal theories where a client has really been wronged. O'Donnell had Buchwald's contract involving the story idea upheld and enforced, then turned around and invalidated its "industry standard" net profits provisions as unconscionable (there is a Buchwald II decision).

Arthur Miller, in Common Law Protection for Products of the Mind: An "Idea" Whose Time Has Come, 119 Harv. L. Rev. 703 (January 2006) argues that courts generally require "concreteness" and "novelty" to enforce agreements involving ideas. He provides a good survey of the case law in the area and argues for more federal protection. He claims a gestation period for the article of 56 years - since he was a 2L.

In Cavagnuolo v. Rudin, 1996 WL 79861 (S.D.N.Y.) the court observed that California has no novelty requirement for contracts involving ideas (citing Desny v. Wilder, 299 P.2d 257 (Cal. 1956) nor does New York (citing Apfel v. Prudential-Bach Securities Inc., 81 N.Y.2d 470 (1993).

Where owners of a database used a "shrink-wrap" license to bar licensees from using the database for commercial mailings, the provision was upheld. ProCD Incorporated v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996). Michigan law doesn't require novelty in contract to submit ideas. Wrench LLC v. Taco Bell, 256 F.3d 446 (6th Cir. 2001). In a case criticized by Miller, at least one court let a contract block reverse-engineering because it was forbidden by the license agreement. Bowers v. Baystate Technologies, Inc., 320 F.3d 1317 (Fed. Cir. 2003)(permitting a party to "contract away" a fair use defense of reverse engineering).

California law will create an implied in fact contract in idea submission cases. Levin v. The Gap, 1998 WL 915897 (S.D.N.Y.). But California will require evidence of industry custom to pay for ideas before doing so. Dallier v. Levi Straus & Co., 86 F.3d 1149 (4th Cir. 1996)(unpublished). But for a court to let a plaintiff pursue an implied-in-fact contract, it should be set forth in the complaint. Willis v. Home Box Office, 57 Fed. Appx. 902 (2d Cir. 2003)(unpublished summary order).

Courts struggle with the problem of preemption: the extent to which Copyright law supplants state law in the area of protecting ideas. The law of trade secrets is a related area -protecting "ideas" unprotectable by copyright by keeping them secret or binding a select few through confidentiality agreements.