Significant Damage - US Courts Order Immense Damages for Music Copyright Infringement

The following article was written by Assaad Lyn, who is a US attorney specializing in Intellectual Property, seeking to help artists, entrepreneurs, and creatives by helping them through the legal issues they may encounter so they can keep working on their craft. You can find Assaad's LinkedIn profile here and his website at www.assaadlynlaw.com.

Remember when Napster first came out? It was a peer-to-peer (P2P) file-sharing service that allowed people to download music. While Napster was eventually shut down (and later brought back), the issues of downloading music on P2P networks persist, and was the reason for a court case in the US where the jury gave an unprecedented damages reward.

The case of Sony Music Entertainment v Cox Communications Inc is a class action lawsuit where Sony and other music companies alleged that Cox Communications did not stop ongoing copyright infringement after receiving notice of the alleged behavior. Sony and the others are music companies that make, license, manage, and sell music. As a primer, copyright law separately protects the musical composition (the sheet music and lyrics) and the sound recording (what we hear on radio or streaming services), so Sony had to prove that it owned, controlled, or otherwise managed the works in question.

Once a work of art (such as a book, a movie, or music) is created, ownership in the copyrighted work automatically exists in it. The author of the work can then transfer all or some of these rights to any other party. In order to prove that you are the rightful owner of a copyrighted work, a copyright owner usually registers the copyrighted work with the United States Copyright Office. Luckily, registration is not the only way to prove ownership, and transfer agreements and documents such as licenses can show a chain of title and may suffice to prove ownership. Sony asserts that they protect their copyrights through registration with the United States Copyright Office and through written agreements where they own or control the copyrighted works. Sony was able to prove they own various songs through the online Copyright Catalog, works registered as works made for hire, declarations, and more.

Cox Communications is a broadband communications network, and acts as an internet service provider, or ISP, to customers throughout the United States. Cox Communications has a department with the purpose of monitoring internet security issues, such as copyright infringement (through illegal downloads for example), and has adopted a policy in order to respond to alleged abuse of its network and systems.

The Recording Industry Association of America (RIAA), acting as the agent for Sony, hired MarkMonitor, an anti-piracy company, to scan the internet for infringing file sharing on P2P networks. MarkMonitor participated in the P2P networks in order to gather data from the potentially infringing users, and create infringement notices. MarkMonitor’s reports contained information such as the timestamp of the infringement detection, the date the notice was sent, the Cox user (identified by IP address and port), and more. They then sent the infringement notices to Cox Communications on the behalf of Sony. Cox Communications received and processed those notices through their in house system. The question therefore is, did Cox Communications have enough information to be viewed as contributorily liable for the infringement occurring on its network?

Contributory infringement can be found when one “(1) has knowledge of another’s infringement and (2) either (a) materially contributes to or (b) induces that infringement.” Generally, knowing that infringing activity is occurring on an ISP’s network is not enough to prove contributory infringement. The question is if Cox Communications had enough information in order to do something about the infringing activity. The detailed MarkMonitor reports show that Cox Communications could have acted in various ways, such as, evaluating a subscriber’s activity, or even terminating said subscriber. Since Cox Communications did not take appropriate action after being notified of the infringing activity, the jury found Cox Communications liable for contributory infringement and vicarious liability of over 10,000 works.

Then came the question of damages. Statutory damages in a copyright case in the US can range from a minimum of $750 or more than $30,000. In a case where the infringement was committed willfully, the award of statutory damages can go up to $150,000. The damage amounts are per work infringed, and not simply a total. Cox Communications was fined $99,830.29 per work, resulting in damages for a total of about $1 billion.

It is shocking to see such high damages being awarded in this case, and that an ISP was not protected by the Digital Millennium Copyright Act (DMCA) safe harbor provision. Just because Cox Communications did not do anything about the infringement, does not mean that the infringement was willful. Whether or not this case will affect ISP’s in the future, remains to be seen. As of January 31, 2020, Cox Communications has filed an appeal asking for either 1. a remittitur (lowering of damages), or 2. a new trial.

Just a Little Taste - The CJEU Decides on Whether Music Sampling Infringes Copyright

Having discussed the recent opinion by Advocate General Szpunar in relation to copyright and sampling, the CJEU's decision has been very hotly anticipated, particularly by the music industry. Sampling has become incredibly common in the creation and production of music, and so the potential curtailing of sampling by the CJEU could pose a big problem to artists, producers and labels. Luckily (or unluckily) the CJEU has finally handed down its judgment very recently.

As a short primer, the case of Pelham GmbH v Ralf Hütter and Florian Schneider‑Esleben concerned the song "Metall auf Metall" created by the band Kraftwerk, which comprises of the respondents Hütter and Schneider‑Esleben. The song was sampled in another song called "Nur Mir", which was produced by Pelham in the late 1990s. Kraftwerk allege that Pelham sampled a two-second rhythm sequence from their song, and used it as a continuous loop in "Nur Mir", therefore infringing their copyright. Pelham contested the infringement allegation, and the case then ended up in the CJEU some years later.

The referring court asked the CJEU six questions, which the Court dealt with (mainly) in turn.

The first and sixth questions were dealt with by the CJEU together, which essentially asked "...whether Article 2(c) of Directive 2001/29 must, in the light of the Charter [of Fundamental Rights of the European Union], be interpreted as meaning that the exclusive right granted to a phonogram producer to reproduce and distribute his or her phonogram allows him to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram".

The Court opened with setting the scene, in that the copying of a sound sample, even if very short, must be regarded as a reproduction ‘in part’ of that phonogram within the meaning of the Article. Even so, if a user is exercising their freedom of the arts to create a new, distinguishable phonogram work, that particular use wouldn't be classed as a 'reproduction' under the Article. The Court noted that a balance has to be struck between the rights afforded by copyright, and the rights under the Charter.

Having considered the questions, the Court determined that "…Article 2(c)… must, in the light of the Charter, be interpreted as meaning that the phonogram producer’s exclusive right under that provision to reproduce and distribute his or her phonogram allows him or her to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram, unless that sample is included in the phonogram in a modified form unrecognisable to the ear". In short, an artist would have to utilize a short clip of music in more ways than simply copying it in and the work has to be unrecognizable when compared to the original.

The Court then moved onto the second question, which asked "…whether Article 9(1)(b) of Directive 2006/115 must be interpreted as meaning that a phonogram which contains sound samples transferred from another phonogram constitutes a ‘copy’, within the meaning of that provision, of that phonogram". The Article affords the owner of the rights in a phonogram the right to distribute copies of the work.

Having discussed the legislative backdrop of the provision quite extensively, the Court considered that samples transferred from another phonogram would be a 'copy' under the provision, as they are a 'duplicate' of the part of the work, since the samples contain sounds taken directly or indirectly from a phonogram.

The Court then considered the third question, which asked "…whether a Member State may, in its national law, lay down an exception or limitation, other than those provided for in Article 5 of Directive 2001/29, to the phonogram producer’s right provided for in Article 2(c) of Directive 2001/29" – or in other words, can additional exceptions be provided to the rights afforded to rightsholders in relation to phonograms.

The matter yet again circled around the balancing of interests in terms of the rights in works, and exceptions to those rights allowing for the use of works in specific circumstances (so long as it doesn't conflict with the normal exploitation of a work). The Court answered the question in the negative, considering that Member States cannot lay down additional exceptions outside of Article 5.

The fourth question concerned "…whether Article 5(3)(d) of [Directive 2001/29] must be interpreted as meaning that the concept of ‘quotations'… extends to a situation in which it is not possible to identify the work concerned by the quotation in question".

The Court first focussed on the requirements for quotation, which has to be made "in accordance with fair practice, and to the extent required by the specific purpose", meaning you can't simply copy a work and claim it as a quotation of that work if it exceeds the requirements and purpose of a given quotation. Also, the Court noted that the meaning of 'quotation' is the use of a copyright protected work to "….illustrat[e] an assertion, of defending an opinion or of allowing an intellectual comparison between that work and the assertions of that user", which is typically done through a 'dialogue' with that work.

A key consideration on quotation is that the work needs to be identifiable, which, in sampling, might not be as easy. Without the identification of the sample, it isn't strictly possible to have a 'dialogue' with the work as a part of the quotation. The Court therefore set out that "…the concept of ‘quotations’… does not extend to a situation in which it is not possible to identify the work concerned by the quotation in question". It is a case-by-case question, in terms of sampling, when the copying can be considered as a quotation within the provision.

Finally, the Court dealt with the fifth question, which concerned "…whether Article 2(c) of Directive 2001/29 must be interpreted as constituting measures of full harmonisation".

The Court emphasised that EU law takes precedent over national law, even if it concerns a Member State's constitution, and any national measures shouldn't undermine the effectiveness of the EU in its territory. That also means that EU legislation would have to be transposed into national legislation irrespective of their discretion. The Court therefore concluded that "…Article 2(c)… must be interpreted as constituting a measure of full harmonisation of the corresponding substantive law".

The decision is a big one, and potentially is a big blow to the music industry, but has shown more clarity in the area of quotation. The courts will undoubtedly grapple with this decision in the coming years, particularly due to the nature of whether a sample can be recognized within a different song where it is copied. This writer agrees with the Court, but will wait to see whether, or if at all, the decision will have an impact on the music industry.

No Sample for You – Advocate General Szpunar Scratches Music Sampling under EU Copyright

Since the 1970s music sampling has become a staple in the industry, where parts of songs are taken to create parts of new song, particularly popularised by the rap genre. The practice has been an open secret, where artists freely have taken parts from other songs without much by way of repercussions or issues from a copyright perspective, even though an artistic work has been potentially copied. The matter hasn't been widely litigated, but a recent case in the CJEU is set to determine the issue once and for all at least within Europe. Prior to the full CJEU decision, Advocate General Szpunar gave his consideration on the matter in late 2018.

The case of Pelham GmbH v Ralf Hütter and Florian Schneider-Esleben concerned the band Kraftwerk (a well-known German electronic music band), consisting of the claimants Mr Hütter and Schneider-Esleben. The respondents Mr Pelham and Mr Haas had allegedly electronically sampled approximately a two second rhythm sequence from the Kraftwerk song "Metall auf Metall" in their song "Nur mir". Kraftwerk alleged that this sampling infringed their copyright in their song, with the matter ultimately ending with the CJEU from the German courts.

The CJEU were asked six questions, which will be dealt with in turn below.

The first question in essence asked "…whether Article 2(c) of Directive 2001/29 should be interpreted as meaning that taking an extract of a phonogram for the purpose of using it in another phonogram (sampling) infringes the exclusive right of the producer of the first phonogram… where it is taken without the latter’s permission".

After preliminary considerations, the Advocate General addressed the first question, quickly setting out that the copying of the loop would amount to a reproduction under Article 2 of the Directive. This means that the act would be an infringement of the rights afforded by the legislation to the author. However, the rights could be limited, and potential minimal (de minimis) copying could be allowed, i.e. the copying does not pose a financial threat to the original work or its author.

The Advocate General considered that "…A phonogram is not made up of small particles that are not protectable: it is protected as an indivisible whole… a sound or a word cannot be monopolised by an author as a result of its inclusion in a work". The rights afforded to them, therefore, would only be in the entire (or substantial) part of the song, not individual notes and/or sounds. Even so, the right to reproduce the song, or parts of it, are with the author alone, even though the same sound could be created and used in isolation of that work.

The Advocate General also struggled to formulate a test for de minimis copying, as it would be difficult to draw a line, and decide whether this would be a qualitative or quantitative assessment.

Although the parties (and interested third-parties, tried to argue for the de minimis threshold, the Advocate General was not convinced, and saw the answer to the first question as "…Article 2(c) of [the] Directive must be interpreted as meaning that taking an extract of a phonogram for the purpose of using it in another phonogram (sampling) infringes the exclusive right of the producer of the first phonogram to authorise or prohibit the reproduction of his phonogram within the meaning of that provision, where it is taken without the latter’s permission".

The second question referred to the Court concerned "…whether Article 9(1)(b) of Directive 2006/115 should be interpreted as meaning that a phonogram which contains extracts transferred from another phonogram (samples) is a copy of the other phonogram within the meaning of that provision".

Eric had no interest in sampling Anna's music

This question was briefly considered by the Advocate General, who saw that the meaning of a 'copy' of a work should be interpreted as something "…which incorporates all or a substantial part of the sounds of a protected phonogram and which are intended to replace lawful copies thereof". A sample does not replace the original work, but creates a new independent work. Similarly it does not incorporate all or a substantial part of the sounds of the original work.

The Advocate General therefore set out the answer to the second question as "…Article 9(1)(b) of [the] Directive must be interpreted as meaning that a phonogram which contains extracts transferred from another phonogram (samples) is not a copy of the other phonogram within the meaning of that provision".

The third question asked whether it would be possible for Member States to preclude the application of a national law to allow for the use of works without the consent of their author under Directive 2001/29.

As the exceptions included in Article 5 of the Directive don't include permitting the use of protected works for the creation of other works, the Advocate General fairly considered that "...Article 2(c) of Directive must be interpreted as precluding the application of a provision of the national law... according to which an independent work may be created in the free use of another work without the consent of the author of the work used".

The fourth question asks whether the quotation exception under Article 5(3)(d) of Directive 2001/29 applies when a extract of a song is used in another. While typically only associated with literary works, the Advocate General did concede that it is possible it could apply to musical works as well. However, for a copy to be regarded as quotation, it needs to fulfill two conditions: (i) the quotation must be ‘for purposes such as criticism or review’; and (ii) the extract quoted must be incorporated in the quoting work as such or, in any event, without modification.

Sampling clearly fails both conditions, as the use of the extract is not for criticism or review, or used without modification. The Advocate General clearly therefore answered the question in the negative.

The fifth question concerned the latitude afforded to Member States in transposing the relevant copyright directives into their respective national law. After some degree of discussion, the Advocate General answer the fifth question as "...Member States are required to ensure the protection, in their domestic law, of the exclusive rights set out in Articles 2 to 4 of Directive 2001/29, in so far as those rights can be limited only in the application of the exceptions and limitations listed exhaustively in Article 5 of that directive. Member States are nevertheless free as to the choice of form and methods which they consider appropriate to implement in order to comply with that obligation".

Finally, the Advocate General took on the sixth question, which asked "...how the fundamental rights set out in the Charter are to be taken into account when interpreting the scope of the exclusive rights of phonogram producers" under the above Directives. In effect it is asking whether there exists primacy of the freedom of the arts over the exclusive right of reproduction of phonogram producers.

After some discussion of the issue in relation to both German and EU law, the Advocate General considered that "...the exclusive right of phonogram producers under Article 2(c) of Directive 2001/29 to authorise or prohibit reproduction, in part, of their phonogram in the event of its use for sampling purposes is not contrary to the freedom of the arts as enshrined in Article 13 of the Charter.".

The case is a very interesting one, and the ultimate decision of the CJEU might have huge implications for the music industry, particularly genres that heavily rely on the use of samples in the production of new music. It remains to be seen what the CJEU say later this year, but this writer will, for one, wait for the beat drop with anticipation.

Locked Out - Providers of WiFi Access Not Liable for Copyright Infringement, Says CJEU

As wireless internet connections have become near ubiquitous in our daily lives amongst the cafés, libraries or businesses we visit, so has our appreciation for the facility, especially when traveling when a weary traveler might not have a connection on their smartphone. But underneath these open networks lurks the danger, and question, of possible abuse, and thus liability for those who operate the networks. This matter has been litigated in the European courts for some time now, and after an Advocate General's opinion early this year (discussed more here), many IP specialists have been waiting for the decision in McFadden; something the CJEU finally handed down late last week.

The case of Tobias Mc Fadden v Sony Music Entertainment Germany GmbH dealt with the provision of an unprotected wireless network connection by Mr Mc Fadden at his business selling and leasing lighting and sound systems, which aimed to bring in business and interest for his endeavor.  In late 2010 a song was shared in his network by a third-party (the rights to which Sony Music owned), and Sony subsequently sent Mr Mc Fadden a notice to this effect. Mr Mc Fadden then took the matter to court, seeking a negative declaration of infringement, to which Sony counterclaimed infringement. The matter ultimately ended up in the CJEU, who sought to take on the matter of liability of infringement for the provider of an unprotected wireless network.

The referring court asked eight questions of the CJEU, who took each question in turn to answer the matter.

The first question dealt with whether the provision of an open WiFi connection could fall under Article 12(1) of the E-Commerce Directive, i.e. whether the service would be classed as an 'information society service'. The Court quickly saw that, even in the light of a lack of remuneration (as required by EU legislation in this instance), the service would be classed as an 'information society service' under the Directive if "...the activity is performed by the service provider in question for the purposes of advertising the goods sold or services supplied by that service provider". The provision of the service is clearly therefore equated to one producing a monetary gain, even if not charged for on the outset, possibly therefore being afforded safe harbor protection as a 'mere conduit'.

The CJEU then moved onto questions two and three, which they summarized together as asking whether Article 12(1) of the Directive only requires the provision of the aforementioned service so as to be included, or if further conditions have to be met for it to be deemed as have been provided under the Article. This would include a contractual relationship and the advertisement of the provider's services. The Court concluded that, for the service to have been provided under the provision, the access must not "...go beyond the boundaries of a technical, automatic and passive process for the transmission of the required information, there being no further conditions to be satisfied". This follows recital 43 to the tee, and clearly the mere passive provision of such a service would be deemed to have been 'provided' by virtue of doing only that.

Password required? Not interested!

The Court then answered the remaining questions in a non-sequential fashion, tackling question six first. This asks whether Article 12(1) should be interpreted as including a further condition set out in Article 14(1)(b) (on the removal of infringing content upon notification thereof). The CJEU saw that, as the Articles dealt with very different services (communication services v hosting), the condition does not apply to the provision of more transient services, but to ones that remain more permanent in the provided services (meaning, content hosted on a website stays on said website till removed, unlike in mere transient communication using a wireless connection).

This was followed by questions seven and eight, which the CJEU clumped together, summarizing them as asking whether Article 12(1) includes any further provisions in addition to the one within the Article, which are not expressly mentioned. The Court quickly dismissed this assertion, as further conditions would clearly impede the balance sought by the legislature in the introduction of the provision.

The Court then moved onto question four, which, in essence, asked whether a person (or entity) harmed through the infringement of a right could seek injunctive relief and/or possible costs for the harm caused using the above service to do so. If read in seclusion, the Article does preclude a person harmed from seeking such remedies; however, it does not expressly prevent them from doing so using national authorities to prevent the infringement from continuing. This would seem correct, as Article 12(3) expressly does not preclude national authorities from requiring such actions and/or allowing for the retrieval of costs.

Finally, questions five, nine and ten remained, which asked effectively whether the granting of an injunction such as the above is allowed (and complied with by the provider), when the provider is required to secure their connection through either a password or by monitoring the connection used. The Court emphasized the need to strike a balance between the rights afforded by the Directive and the Enforcement Directive 2004/48, especially when multiple rights are engaged in such an issue (as is the case here). The Court considered the different ways in which IP rights could be protected, and decided that "...a measure intended to secure an internet connection by means of a password must be considered to be necessary in order to ensure the effective protection of the fundamental right to protection of intellectual property". This measure would, according to the Court, protect both rights in intellectual property, as well as the freedom to conduct business through the supply on a wireless connection and the right to information in using the above. One has to, though, provide their details in order to be able to use the connection and therefore be identified if needed.

The CJEU's decision sets out a practical approach to protecting both interests, while not overly restricting the provision of wireless connections. The striking of this balance was key, and the CJEU seem to have settled on the right answer. The measures required are by no means excessive, and afford the provider plenty of protection in the event of the connection's abuse.

Fair and Square - DMCA Takedown Notification Senders Must Consider Fair Use

The DMCA takedown notice has become near universal on the Internet, allowing for those whose rights have been infringed online to have the service provider take down that material or face the music for their ignorance. What this has given rights holders is, arguably, a weapon, which allows them to take down material on a whim with very little or no regard to its actual use or purpose. Often one can accidentally include infringing material, or even use them for a legitimate purpose, yet rights holders have never had to consider these facts, but could assert their rights when ever they wanted to. This changed towards the end of 2015, when the US Court of Appeals addressed the question on what amounts to 'authorization under 17 USC § 512. This writer wanted to discuss this case sooner, and laments his lateness.

The case of Lenz v Universal Music Corporation dealt with Stephanie Lenz, who uploaded a video on YouTube of her young kids dancing to the song Let's Go Crazy by Prince, lasting a lengthy 29 seconds. The video comprises of her two kids, specifically her youngest, bopping to the song, which is audible in the background. Upon finding Ms. Lenz's video, Universal Music lodged a removal request with YouTube, who promptly removed the video. Ms. Lenz sent a counter-notification to YouTube, which was defended by Universal as a legitimate request (and in their correspondence, did not discuss or mention fair use, but asserted plain infringement). Ms. Lenz subsequently sought counsel, and the video was reinstated some time after a second counter-notification was sent, and she pursued further action in the matter, asserting a misrepresentation claim under section 512(f).

The heart of the case lies in section 512, and more specifically, the obligations in places on both the notified and the notified party. Under subsection c, the service provider has to 'expeditiously' remove any infringing material brought to its attention so as to benefit from the safe harbor provisions in the same section, and they have to notify the party who placed the infringing material on their service (the same affords them an appeal process to these notifications as well). Finally, should a rights holder abuse this process, subsection f provides that the person whose material has been removed due to this abuse can subsequently claim for damages due to the misrepresentation made by the notifying party.

A big point of contention in the case was whether a rights holder has to consider fair use under 17 USC § 107 before using the notification process. Although the section does not mandate this, it does, however, stipulate that "...the complaining party has a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law". This would potentially encompass fair use, as that would amount to an authorization for the work's use under law, even if the party who controls those rights objects to the use in some way.

Fair use, who would've thought!?

The Court discussed, although fairly briefly, whether fair use would be an affirmative defense that merely excuses infringement (i.e. does not authorize the use, but merely dismisses a later assertion of infringement should one be put forth), or whether it would be a true authorization and not an affirmative defense. The Court dismissed Universal's argument, and asserted that "...for the purposes of the DMCA — fair use is uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses. We conclude that because 17 U.S.C. § 107 created a type of non-infringing use, fair use is "authorized by the law" and a copyright holder must consider the existence of fair use before sending a takedown notification under § 512(c)". This means that when a rights holder intends to send a notice under the section, they have to make a bona fide assessment on the legitimacy of the use of the work under fair use. Failure to do so would be a misrepresentation under section 512(f).

What followed was the Court's determination on whether Universal should have known that the video was fair use. This is an objective assessment, seeking actual knowledge of fair use on part of the notifier, rather than a simple mistake (using the notifier's subjective good faith knowledge at that time, rather than a standard of reasonable belief or knowledge, for example). The Court saw that Universal had not been 'willfully blind' to the existence of fair use or its application to Ms. Lenz's video. Ultimately, no misrepresentation was found, and Ms. Lenz could not recover damages. One has to still note the closing remarks by Judge Tallman, who handed down the majority's judgment: "Copyright holders cannot shirk their duty to consider — in good faith and prior to sending a takedown notification — whether allegedly infringing material constitutes fair use, a use which the DMCA plainly contemplates as authorized by the law".

This writer was truly surprised this point had never been argued at court, but found Judge Tallman's judgment to be correct. Arguably, fair use (and fair dealing here in the UK) is not merely an affirmative defense, but presents an authorization for the use of copyright protected works for those intended purposes, or within the remit of a given similar provision. Leaving it as merely a shield would encumber those using the works with a heavy responsibility for defending their use at court; one that most of them would not necessarily be able to afford. A stricter authorization allows for this use, and puts the burden on those who wish to assert their rights, and rightfully so, since they benefit the most from their works.

Source: JDSupra

Art Anew - Fan Art and Copyright

A big aspect of the modern scene of artistic expression is fan art. This, to the uninitiated, is using prior existing art, be it movies, music or pictures, as inspiration for your own works, often using the same characters, themes or settings, and constructing your own take on the heroes and heroins of your favorite stories. Prima facie a very innocent activity, and potentially quite beneficial for both parties, fan art is an important part of the creator and audience interaction; a form of silent appreciation and discussion on different views and fantasies of said art works. Even with this in mind, fan art does have its greyer areas, especially when it comes to profitability and potentially gaining from the fame of a work, effectively riding its coattails to success. A great example of fan-art-turned-success is the current hit movie 50 Shades of Grey, which (by many accounts) started its humble life as fan fiction of the popular book/movie franchise Twilight under the moniker "Master of the Universe". Where there is money there are lawsuits to be had, which begs the question: does fan art infringe copyright?

As has been discussed on this blog many of times (for example here and here), copyright protects expression, not ideas. Therefore a fan is more than capable of writing a story using similar elements (putting things simplistically), and won't necessarily be infringing the copyright in the original work your fan fiction or art draws from, or even illustrate those stories, especially if no official illustrations exist. Even with major differences (but not enough to be able to distinguish the work completely), what usually draws the line is the commercial use of your derivative works, at least in the interest of the copyright holders, as for most instances fan works just aren't worth the hassle of taking down or demanding licences for; after all, it's free marketing for your works.

This writer's take on a popular movie character

In terms of fans' derivative works, fair use or fair dealing offer the best avenue of protection should you choose to create your own works from existing copyright protected material. In the UK, under the Copyright, Designs and Patents Act 1988, fair dealing protects a finite set of categories under which the use of copyrighted material can be used without infringing the rights given. These categories, including use for criticism and review and for the creation of personal copies, don't offer a category through which to create new, derivative works. A new exception for use in terms of parody or pastiche (discussed here) clearly would allow for the use of copyrighted material for legitimate parody purposes, however leaving a non-parody based use outside of its scope. Overall, the UK leaves fans in the dark, at least in the fair dealing side of the law. What fans can argue, however, is that their work is a new, original artistic work, meriting protection in itself, much like the original works they've branched out from. Again, this is a rough road to travel, as the characters, settings etc. would have to differ quite significantly from the original piece, or become a story wholly unto its own in its development; something, which would be much harder to prove.

There is hope for fans within the common law, as the scheme for fair use in the US and Canada (more on the newer fair use considerations in Canada can be found here), offers a much more robust and flexible approach to the use of copyrighted material. Fair use allows for the use of copyrighted material assessed through four criteria: the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of the use upon the potential market for or value of the copyrighted work.

If the fan creation in question is created for the purpose of entertainment, i.e. to share with other like-minded fans, and isn't solely to gain from the popularity of the work in a commercial sense (although this, by itself, doesn't negate fair use, so works can be sold and fall under fair use), most likely the work will be fine under the first criterion. If the work where the fan piece derives from is a lesser known, even potentially a non-commercial piece, the more likely it is for the fan piece to not infringe it. The second criterion is hard to assess in itself, without having a concrete example, but offers an insight into an important part of protecting the copyrighted work; the more commercial and/or successful it is, the more likely it is that the potentially infringing fan piece actually is infringing on its copyright. The third criterion is a case-by-case assessment of just how much the fan piece takes from the original work, i.e. how substantial is its use of the work in question. The less elements you use, the less likely it is to infringe, at least prima facie. Finally, the last criterion looks at the effect on the original work. Again, this is much harder to assess without a concrete example; however one can argue that the more commercially successful the fan work is, the more likely it is to affect the value of the original work. It has to be noted that fan pieces existing outside of the remit of the commercialization of the work probably will not infringe the original work, i.e. a song written about Harry Potter, not having been used for the purposes of the films or books.

In Canada the Copyright Act also allows for the creation of non-commercial user-generated content (discussed here) giving fans a real avenue to use works for their own purposes so long as the use isn't commercial. Where the line of commercialization is drawn is hard to say yet, but this writer speculates that small commercial aspects of the works could be forgiven. Other than that, fans are welcome to create their own content in Canada without fear of being sued for copyright infringement - a fact that the UK sorely has missed in its copyright legislation.

Overall the US and Canadian schemes offer much more flexibility and use of copyrighted works for derivative fan works, so long as they comply with the above. This writer for one believes that fan participation should be encouraged by the legislature, yet still protecting the legitimate interests of the copyright holders by not allowing for those works to be overstepped by the (overt) commercialization of fan works, such as an unofficial knitted hat being sold on Etsy. A balance has to be struck between freedom of expression and the protection of legitimate commercial interests, even in the domain of derivative works.

Copyright in Space - The Space Oddity

The worries of the 21st century artist are ones which no other before them has ever had to contemplate, nor even conceive. Due to this some interesting results can unfold in the world of copyright. Unbeknownst to most of us, our outer terrestrial conquests just might impact our creative output, or at least limit it to some extent.

Major Chris Hadfield, a Canadian astronaut who recent spent almost a half a year in space, recorded and shared his take on the David Bowie song "Space Oddity", receiving well over 22 million views on YouTube for the duration of the video's existence on the site. This particular video was made while he was on board the International Space Station, and thus leads us to a peculiar question begging an answer: does copyright apply in space?

The ISS is regulated under the International Space Station Intergovernmental Agreement, which sets out the framework in which the Station and the law operates. Although many other agreements expand on the framework outside of the ISSIA, it is the more important one within this context. As space is potentially beyond any particular jurisdiction, with the added complication of the ISS moving at 7,6 kilometers per second over most countries at any given time, which laws would apply to govern Mr. Hadfield's rendition? According to Article 5 of the ISSIA: "...each [country] shall retain jurisdiction and control over the elements [of the ISS] it registers". This means that any modules, parts of the ship and so forth (called elements), will be under the jurisdiction of the country which owns it (including The United States, Russia, Japan, and Europe respectively). It has been determined by The Economist that the elements in which Mr. Hadfield recorded his famous video would be ones owned by the US and Japan, subjecting his video to the copyright laws of those particular countries.

Phil was busy filming his modern interpretive dance video

Mr. Hadfield's music video does not in itself present much of a legal issue, as the rights for the distribution and recording of the song were duly negotiated between all interested parties; however it still remains a curiosity in the field. The licence for the YouTube distribution of the song has since ended, yet a new agreement is being sought for the continuation of said agreement to satiate our extra terrestrial musical needs.

Nevertheless, space still remains a big question mark, especially in the emerging markets of space tourism and our conquest for Mars or other planets. As J.A. Sterling discusses more in-depth in his article "Space Copyright Law: the new dimension", copyright will face challenges when being applied to our future outside of our blue planet. More specifically, which country's or countries' laws will apply if the work in question is created wholly or partially on another terrestrial body, such as Mars? If the work is created on a space ship or station, much like in Mr. Hadfield's situation, the application of laws is much easier, or at least potentially so; however should you film a video on Mars, it is uncertain which country's laws would apply. This only scratches the surface in relation to the difficulties space can cause in relation to the creation of copyrighted works, and I would advise anyone interested in the topic to read the article above.

In the end the loss of Major Hadfield's song, no matter how eloquent and beautiful it is, is but a temporary bump in the video's existence, which will undoubtedly continue soon (or so one can hope). Space is, indeed, the final frontier - or is it? Only out future beyond the comforts of our home planet will show where copyright will go, or how far at least.

Source: IP Brief

Where Does Piracy Stem From?

Almost as big of a question as how do you stop copyright infringement, if not bigger, is where does it actually stem from? Why do people pirate content for which they should pay for enabling the content creator or creators to benefit from their hard labor. Although a myriad of answers can be given and argued, a recent unearthing of a letter by Google to the Australian Minister of Communications, Malcolm Turnbull, gives the communication company's view as to the question.

In their letter Google's Head of Public Policy, Iarla Flynn, expressed the company's view on the root causes of piracy: "...we believe there is significant, credible evidence emerging that online piracy is primarily an availability and pricing problem". On the face of it, one can agree with Ms. Flynn's assertion. Although blatant entitlement and sheer greed can be the reason for many when it comes to piracy, more often than not this can be pure availability. The most pirated TV show of 2013 was Game of Thrones, which provides the perfect example of this conundrum for many. As such the popular fantasy show is incredibly hard to access all over the world. It is provided as a part of HBO's GO system, which allows for the instant viewing of the channel's shows on-demand alongside its broadcasting on the actual HBO channel. However, the service is only usable in the United States, and even there the pricing can be steep, access costing over 100 dollars a month, as it is included in cable service bundles, being inaccessible to those without a qualifying package. Due to this many clearly have no other option but to pirate the show if they want to follow it as it progresses, or wait until the season is released on DVD and being severely behind on the newest developments discussed at the water cooler. Money isn't necessarily the only issue here either, with delays in the show's airing times contributing to piracy  rates as well.

As a possible solution to this problem is the increasing of availability and making pricing both affordable and equitable. A great example of recent successes proving just that are both Netflix and Spotify. Both services provide the consumer with the opportunity to pay a monthly fee for unlimited listening or watching of music and television. Although regional offerings vary in terms of content, both services have showed success in curbing piracy. Are they the answer to piracy fully? Arguably not. Copyright infringement is all too convenient, easy and has become a part of peoples' daily lives, with the stigma associated with it having almost fully dissipated as a result. There will be no time where people will not abuse that which they have the ability to abuse, and the Internet as a vehicle is no exception.

So what would the answer be? This writer for one would not be an advocate for more strict regulation and surveillance to prevent infringement. This would simply result in the increased disapproval of such actions, as can be illustrated by the recent Internet filtration by the United Kingdom, and only hinder access by those who legitimately want to access content. Arguably the ball is in the content providers' court, and the legislature should encourage the market to react rather than demand more regulation. With recent reforms showing a clear intent to expand freedom in relation to copyright, the onus is more on the providers than ever.

Piracy has been, and will remain, a hot button topic in the scheme of copyright, and rightfully so. Discussion should encourage change on both sides, but still remain sensible enough to prevent over regulation on strict surveillance. Although discussion has been scarce in the US especially, one can only remain hopeful and keep the discussion alive.

Domain Registrar Faces Infringement Liability in Germany

Internet Service Providers have, for a long time, been the favorite target of copyright holders simply because they are often the conduit between the infringer and the material which is being illegally copied, although their liability as secondary infringers has been rejected since. The Internet provides a web of connectivity between a multitude of actors, such as ISPs, computer manufacturers and others, who in some ways, do enable the infringement of copyright, albeit not as their primary function. As with the former Betamax recorders, the simple function of potentially enabling infringement does not incur liability, arguably at least in most instances, however a new challenge was set against web domain registrars in Germany.

In a recent decision (which can be found here, unfortunately only in German), the German Regional Court of Saarbrücken had to decide on the liability of domain registrars, and whether they could be held liable as secondary infringers should the domain owners facilitate the aforementioned infringement. The case concerned the website h33t.com, which acts as a torrent tracker site, much like the more notorious Pirate Bay. The copyright holders of Robin Thicke's song "Blurred Lines", Universal Music, took on the domain registrar Key-Systems, who registered h33t's domain.

Ed was confused about domains

In their decision the Court saw that domain registrars could face liability if the domains they have registered facilitate the infringement of copyright. If they are notified of the potential infringement of copyright, and choose to do nothing about the infringements, they could face liability. The Court imposed a duty to investigate onto domain registrars; a duty which can be argued to be quite onerous, especially for bigger registrars which manage vast numbers of domains. Key-System's general council, Volker Greimann, commented on the decision: "The courts’ definition of what is obviously violating is however extremely broad and the duty to act is expanded to deactivation of the entire domain even if only one file or link is infringing... If left unchallenged, this decision would constitute an undue expansion of the legal obligations of each registrar based in Germany, endangering the entire business model of registering domain names or performing DNS addressing for third parties". One can agree with Mr. Greimann as to the onerous nature of the new duty imposed on registrars, especially when considering the vagueness of the duty and the potential numbers of websites which might infringe copyright in one way or another.

The Court did mention that the infringements in relation to h33t were "...obvious and easy to identify", potentially presenting registrars with protection in cases where infringements are not obvious or are a result of negligence or ignorance. The Court in this instance ordered Key-Systems to prevent the infringement; however what those measures are remains unclear to this writer. Even though the domain is shut down by Key-Systems, its transition to another service outside of Germany can be said to be quick and painless - making the duty to investigate and take action both onerous, and arguably frivolous, as infringers will merely change service providers if their activities can be said to be illegal. Through this Mr. Greimann's argument of it hurting German domain registrars could be said to carry some merit.

Secondary liability has been a hot question since peer-to-peer services have made infringement much easier, and websites which provide users with, for example, torrent links, have become abundant. Whether liability should be extended to all middle actors can be argued to be potentially damaging to the Internet and its function. This writer does not have much insight into German law specifically, and people who might want to hear Universal Music's general council, Mirko Brüß's, arguments can refer to his opinion post here (again in German only).

Source: Bloomberg

Music Playlists and Copyright

Services like Spotify and Pandora have become huge in the last few years, allowing for users to listen to music on-the-go, sorting it according to the type of music they like and even allowing for the creation of custom playlists. Before the era of digital music becoming the predominant format, there were music compilation albums (which still exist believe it or not); an old analog format of a playlist if you will. Collections like Now That's What I Call Music! have been around for decades, selling millions upon millions of copies of albums with a collection of recent (or old) hits put into a convenient playlist on the album. As such there is very little correlation between the old compilation albums and modern digital music services and their playlists, but could playlists actually infringe copyright?

In a recent filing Ministry of Sound have alleged that Spotify have infringed their copyright in their creation of custom playlists which contained the same songs in the same order as what can be found in their compilation albums. These playlists are freely available on Spotify's service and even labeled as "Ministry of Sound". In Ministry of Sound's argument their playlists are protected under copyright as argued by CEO Lohan Presencer: "What we do is a lot more than putting playlists together: a lot of research goes into creating our compilation albums, and the intellectual property involved in that".

Not to be confused with the Ministry of Sound

What some of the readers of this blog, and intellectual property law enthusiasts in general, should notice is that this rationale goes against what has been long since argued in Feist (more of which can be found on this very blog here); effort does not necessarily equal copyright, and copyright does not protect ideas, merely their expression. Although Feist is an American case, this position has been adopted in a similar fashion by the European Court of Justice in Football Dataco and Others, thus applying in the UK.

So should a list of songs be protected under copyright? Arguably no, as the mere presentation of information in a list should not garner protection. Admittedly Ministry of Sounds probably do spend time in the arrangement and selection of the particular songs in any given compilation album, but this is only a collection of information. Each song individually will garner protection, but the listing of those arguably would not. Whether Ministry of Sound are successful is yet to be seen, but this writer in particular does not see their argument going very far.

Source: Digital Music News

Liberation Music Takes on Lawrence Lessig

The haven of the Internet for all that is video, YouTube, often presents an interesting situation for both copyright holders and content distributors. While there are guidelines and measures in place on YouTube's part to prevent infringing material from being uploaded to the website, often this type of content slips through the cracks. In order to address issues such as this, content owners can submit a copyright infringement notification, effectively having the video removed from the service. There have been instances where content has been frivolously claimed to infringing copyright, causing legitimate videos to be removed from the site when there really is no basis for such a claim. In a recent turn of events such a claim was submitted over a video of a lecture by Lawrence Lessig, arguably one of the greatest legal minds in modern copyright; and Mr. Lessig chose to take action.

The Electric Freedom Foundation has taken action on behalf of Mr. Lessig in a recent complaint to the District Court of Massachusetts which involves the takedown of a lecture video by Mr. Lessig entitled "Open". In their complaint the EFF argue that Liberation Music, an Australian record company, have frivolously claimed that Mr. Lessig's lecture, which contained a short piece of the song Lisztomania by Phoenix, infringed their copyright due to the use of the song which is owned by the record company. The EFF claim that the use of the song fell under fair use, and therefore would not be an infringement of copyright.

In addition to seeking the use of the song to being declared fair, Mr. Lessig is also seeking damages under 17 USC § 512, which limits the liability of parties in relation to materials online. While the provision protects certain uses of materials it also provides relief in the instance of misrepresentation, which means that should a copyright holder submit a claim for infringement, knowing that it does not, they can be held liable for damages.

Lawrence Lessig was just as baffled as you were over the claims

In expressing his reason to take action Mr. Lessig stated that: "The rise of extremist enforcement tactics makes it increasingly difficult for creators to use the freedoms copyright law gives them... I have the opportunity, with the help of EFF, to challenge this particular attack. I am hopeful the precedent this case will set will help others avoid such a need to fight." Given the trigger-happy nature of some DMCA takedown claims, Mr. Lessig's position can be argued to being completely valid, but raises the concerning notion that it needed to happen to one of the premier figures of copyright for there to be action taken against these misuses. Should  Mr. Lessig prevail in his claim, companies surely should be more careful when submitting their claims in the future, and providing an avenue for any frivolous claims should the companies not take adequate steps to insure their claims are valid.

Clearly this matter will be taken to court, as Mr. Lessig's intentions are not to seeking merely monetary compensation, but to set a precedent. The future of the case shall be discussed once it has been heard in the District Court sometime later this year.

Source: Ars Technica

Happy Birthday to Us All? The Challenge Over the Well-Known Birthday Song

If there ever has been a song that most people on Earth have heard, it's the one sang in celebration of one's birthday; Happy Birthday to You. The copyright owners of the song, Warner/Chappell Music, have kept the rights in a tight grip, charging as much as $1500 dollars for a single use of the song, but recently the rights to the song have come into question.

In a recent court filing, Jennifer Nelson, an American film-maker, is seeking for the song to be declared to being in the public domain (and having been there since the 1920s) as opposed to under the ownership of Warner/Chappell. If the song were to be declared to being in the public domain, anyone and everyone could be free to use it as they wish.

Birthdays aren't always so happy

The song's origin is in the old folk song of 'Good Morning to All', published as far back as 1893.The rights were subsequently bought by several entities, originally from the authors Patty and Mildred Hill, ending up with Warner/Chappell in 1988. The song brings in 2 million dollars per year for the owners through licensing fees.

Should the courts not make the declaration being sought, the copyright for the song should end sometime in 2016 in Europe, due to the passing of Patty Hill in 1946 and copyright terms extending to 70 years after the death of the last author of the work. Should a European nation have a longer period, the changes made under European Union legislation will not affect that period and the song will enjoy copyright protection for that extended period. In the United States the song's copyright should have expired in 1991, however the period was extended twice; initially by the Copyright Act of 1976 and further by the Copyright Term Extension Act and protection should therefore extend till 2030.

What Jennifer Nelson is arguing in her case is that the song belongs to everyone, and should not be owned by any entity. When thinking of the important role the song plays in a very simple event, the celebration of someone's birthday and the commonality of the song's use, she could have a solid case. Unlike trade marks, copyright doesn't face the effects of genericization, where the trade mark has become eponymous with the product it represents - in other words the name has become intrinsically what most products in that category are called. Even if a song is deemed to being incredibly common or 'everyone's', it is still protected by copyright.

With the great extensions of American copyright terms and the strict nature of copyright as a means to protect your intellectual property, I have my doubts about the song being in the public domain. Albeit not the exact same case, the popularity or commonality of a book doesn't automatically place it out of strict protection and into the free use of the public, so what would make a song any different?

Source: Thomson Reuters

Retrospective - Linking to Trouble

In the days prior to BitTorrent technology, the primary source for any endeavoring online 'pirate' seeking to get their mitts on copyrighted content, was through direct links on websites leading to copies of any specific materials. Before the discussions over the possible liability of Internet Service Providers here in Australia, the issue of whether a website owner sharing links to infringing material (such as songs) would be authorizing the acts of copying that content by posting those links ended up in the Full Federal Court in late 2006.

An imagining of a potential MP3s4Free user

The case of Cooper v Universal Music Australia dealt with the website owned and operated by Mr. Cooper, aptly named "MP3s4Free.com". The site itself didn't host or contain any infringing materials, such as sound recordings, but did however have direct links (hyperlinks) to other sites providing those copies. The file was automatically downloaded to the user's computer once they had clicked the link on Mr. Cooper's site, transferring it from a different server. Although some of the content linked to on the site was legitimate, however overwhelmingly the content was illegal one way or another. Subsequently a number of record companies, including Universal Music, sued Mr. Cooper under the Copyright Act 1968 for the authorization of copyright infringement. 

The provision for the authorization of infringement hinges on whether the operator (Mr. Cooper in this case) has any power in preventing the infringement; the nature of the relationship between the two parties (Mr. Cooper and the user); and whether the operator (Mr. Cooper) took reasonable steps to prevent or avoid the infringement through his service. 

In deciding whether Mr. Cooper had the power to prevent any infringing acts through his website, the Court saw that he indeed did have the power to do so. The Court reached this conclusion in deciding that a person could be deemed to have had the power to prevent the act should they have had the ability to merely not do what was in their power or abilities to do (the posting or allowing the posting of links for example), yet instead did so through some calculated technical measures. What this means is that Mr. Cooper, in actively linking to infringing content, chose to do so and had the power to simply not to post those links on his site. The Court's reasoning is sound, even in its simplicity. If you have a choice between the knowing facilitation of potentially infringing acts, should you choose to do so, you clearly possess a power to prevent any acts occurring from your actions, yet ignore that ability. The intent and capabilities of the operator are imperative.

Should the relationship be one which does not seek to benefit the operator one way or another, it is more likely that there's no authorization on the face of things. The nature of the relationship between the operator and the users is one which is hard to specifically identify, however the Court did establish a relationship in its findings. At first instance (initial court proceedings in lower courts) the primary judge found that as Mr. Cooper's website was very "friendly" and allowed for easy access to the music files being downloaded, overall being very attractive to potential or current users. The more important aspect of this was the financial gain incurred by Mr. Cooper through advertisements on his website, giving the site a commercial aspect. The Court concluded that the nature was one where Mr. Cooper endeavored to benefit from the links to infringing material.

Don't click! 

Finally, did Mr. Cooper take any reasonable steps to prevent the infringing acts through his website? At the bottom of each page there was a link to a Disclaimer, stating that "when you download a song, you take full responsibility for doing so. None of the files on this site are stored on our servers. We are just providing links to remote files". Aside from the mentioned disclaimer, Mr. Cooper took no active part in preventing any acts; merely attempted to exonerate himself by passing the responsibility onto the users themselves. Rightfully so, the Court found that this was not adequate and the Disclaimer was merely a cosmetic touch and was not intended to have any real legal effect. Mr. Cooper was therefore held liable through the authorization of the copying of infringing material through his website.

Thinking ahead, how could one avoid liability through hyperlinks? Clearly it boils down to content filtration or other means of active or automatic prevention, and the reason for your linking. Should you not take active steps, such as through moderation, and complacently sit back and wait for your monthly AdSense check to fall through the letter box, you might be liable. Links in themselves are not bad and often websites welcome outside links to their content, but this can change according to the various Terms and Conditions set by each site. In the United States websites can potentially be protected under the Safe Harbor provisions (a nice example of which was discussed on this very blog), albeit for unknowing facilitation and potential activeness in the stopping of such acts when notified.