Procedures are moving forward to trial in August, 2012 in the seven-year old case Authors Guild, et al. v. Google Inc., No. 05-Civ-8136, after Southern District of New York Judge Denny Chin rejected the parties’ proposed settlement in March. A September 15th status conference in front of Judge Chin provided a clearer picture as to the current status of the case. The parties, and ultimately Judge Chin, agreed to a newly extended schedule on pretrial proceedings, including restarting discovery, as only a small amount of document production has been conducted since 2006.

Judge Chen ordered a discovery and motion schedule that will have the case going to trial in August of 2012. Settlement discussions are expected to continue between the parties during this time. While Google attested to significant progress in the settlement discussions with the Publisher Class, talks with the Author Class are reportedly stalled. Attorneys for the authors expressed less optimism about settlement, even suggesting that Judge Chin appoint a magistrate judge or mediator to assist with negotiations. Google’s attorney rejected the offer. Interestingly, in the status conference, Judge Chin specifically inquired whether plaintiffs (including the Authors’ Guild) wished to expand their complaint beyond Google’s online display of only snippets of books. Plaintiffs accepted the offer and confirmed that their case went beyond online display of snippets, and included copying, scanning, storing and displaying the works as well. An amended complaint will be soon filed.

In a dramatic twist, three days prior to this Google Books status conference, the Authors’ Guild (together with an Australian Society of Authors, the Quebec Writers’ Union and eight individual authors) filed a new lawsuit, this time, against the HathiTrust Digital Library, the University of Michigan, the University of California, the University of Wisconsin, Indiana University, and Cornell University.

By way of background, the HathiTrust, a library partnership created in 2008 by the University of Michigan, receives digital scans of books from libraries following the works being scanned. HathiTrust then creates multiple copies of the scanned files, not simply to back up the books, but with the additional intent to offer public bibliographic information about the books and a full-text search. Unlike Google Books Search, the HathiTrust does not provide full textual results. In response to a search request, HathiTrust merely displays the page numbers where a user can find the searched terms. Should a book be in the public domain or deemed an “orphan work,” HathiTrust will allow users (including students and faculty members) to read the book online and member Universities to download the book.

The complaint alleges copyright infringement against the institutions resulting from scans made as part of the Google Books project and pooled by the Defendant Universities into the HathiTrust. The plaintiffs are seeking an injunction to prevent the HathiTrust from continuing to scan, duplicate and distribute digitized books and to impound the files already scanned (on estimated 7 million books). In addition to the injunctive relief, the plaintiffs are seeking a declaration that the HathiTrust’s scanning, duplicating and distribution of books violates copyright law.

Most interestingly, the complaint against the HathiTrust specifically targets the Orphan Works Project. Orphan works are works that are subject to copyright but for which copyright holders cannot be identified or located after a reasonable search. According to the Authors’ Guild, a simple search (including queries of standard copyright-related databases and phone calls) revealed that 4 out of 166 books identified by the HathiTrust as “orphan” were not. Accordingly, the Authors’ Guild claims that serious issues exist in the process being used by the HathiTrust to identify orphan works.

The saga is far from over. It will be interesting to see how the HathiTrust case (or the “Orphan Wars” as some have called it) plays out parallel to the Google Books case and whether Congress will finally be inclined to resume its efforts toward an orphan works bill.

Lucasfilm Ltd., et al. v. Ainsworth, et al., 2011 UKSC 39

Lucasfilm Ltd. (“Lucasfilm”) sued artist Andrew Ainsworth alleging that defendant infringed upon its copyright in the Star Wars Imperial Stormtrooper helmets by selling replicas of the famous helmets used in the film Star Wars Episode IV – A New Hope. The British Supreme Court unanimously upheld the ruling of the Court of Appeals in favor of Ainsworth under UK law.

The facts were as follows: Between 1974 and 1976, George Lucas worked with artists, including Ainsworth, to develop the visual concept of the Imperial Stormtrooper characters in the film, including their intimidating “fascist white armored suits” and helmets. Ainsworth produced several prototype vacuum-molded helmets for the Stormtrooper characters and, after Lucas’s approval, created 50 helmets for use in the film. Following the enormous success of the films around the world, Lucasfilm continued to earn income stemming from licensing agreements relating to Star Wars, including from licensing models of the Stormtroopers. In 2004, Ainsworth began recreating the helmets and armors from his original tools selling them to the public. Ainsworth sold between $8,000 and $30,000 of goods in the United States. Lucas sued in the U.S. and obtained a $20M judgment. Lucasfilm then commenced proceedings in the English Courts alleging claims under English and U.S. law.

Even though English law also follows a common law system of copyright, it is interesting that that the reasoning of the English court was quite different from the analysis we are familiar with under U.S. copyright law. The issue turned on whether the helmets were “sculptures” or “works of artistic craftsmanship.” Indeed, under English law, only “artistic works” (which include sculptures) are protectable under the Copyright Designs and Patents Act of 1988 regardless of artistic quality. Should the Court determine that the helmet was a “sculpture,” Ainsworth would have infringed upon Lucasfilm’s drawings by the mere fact of producing the helmets.

The High Court concluded, and the Supreme Court agreed, that the helmet was not a sculpture and that Ainsworth did not infringe upon the English copyright. The Supreme Court reviewed the legislative history of the definition of “sculpture” and found that, as opined in prior cases by the Court, not every three-dimensional representation of a concept qualified as “sculpture.” Lucasfilm argued that the helmet had no practical function and served as an artistic piece to make an impression on the filmgoer. The Court disagreed, viewing the helmet as a blend of costume and movie prop expressing the design of a character, which was a purely utilitarian expression. Rather, Court said, it is the film itself, and not the individual props, that is the work of art. Therefore, no copyright was found under English law in the iteration of the Imperial Stormtrooper helmet.

Furthermore, the Court ruled that claims under U.S. copyright laws were valid and Ainsworth infringed under U.S. copyright. The Supreme Court concluded that, should it have in personam jurisdiction over Ainsworth, then a UK court did maintain jurisdiction to try a claim for the U.S. copyright infringement.

Practice Note: This case reminds clients that international considerations are not to be neglected in protecting and enforcing copyright assets. Different strategies may work in different countries. Approaching a client’s IP portfolio with an international perspective is a prudent approach to avoid chattered expectations.

After filing over 275 lawsuits in almost 18 months, it seems as though Righthaven, LLC (“Righthaven”) may have run out of steam.

Righthaven, a Nevada holding company, was founded in early 2010, for the sole purpose of filing copyright lawsuits on behalf of its clients, news content owners (such as Stephens Media).  Its methods involved Righthaven scouring the Internet for republication of news articles and photos, suing the website hosting the infringing content (seeking monetary damages and the transfer of the infringer’s domain name), and then extending a settlement offer. Lawsuits filed by Righthaven have been brought against a wide variety of online publishers, including bloggers, political campaigns, nonprofits, and website operators — almost always without notice or DMCA takedown. Many cases settled swiftly, totaling an estimated $400,000 in aggregate settlement payment.  Righthaven’s founders claim they created the company in order to fight and deter “copyright theft” by bloggers and news aggregators online. Their aggressive enforcement strategies, including suing noncommercial bloggers and nonprofits who cannot afford to litigate, have also garnered much criticism, particularly from the Electronic Frontier Foundation. The critics have described the company as a “copyright troll” and a “settlement factory.”

In the past few months, Righthaven has suffered serious setbacks in the courts. In Righthaven v. Realty One Group, Inc. (D. Nev. Oct. 19, 2010), Righthaven sued a blogger for republication of 8 sentences from a 30-sentence Las Vegas Review-Journal article.  In a rare decision, the court granted the blogger’s fair use defense on a motion to dismiss.  The court noted that the blogger quoted a small percentage of the source article and his “use of the copyrighted material was likely to have little to no effect on the market for the copyrighted news article.” Another example is Righthaven v. DiBiase (D. Nev. April 15, 2011) in which Righthaven sought to have DiBiase’s domain name transferred to them.  In this case, the Court rejected transfer of the domain name stating that “Congress has never expressly granted plaintiffs in copyright infringement cases the right to seize control over the defendant’s website domain.”

Most notably, Righthaven suffered a particularly hard blow recently in Righthaven v. Democratic Underground (D. Nev. June 14, 2011).  In that case, the agreement between Righthaven and its clients, called a “Strategy Alliance Agreement,” was unsealed.  The agreement purported to assign copyrights to Righthaven for the purpose of filing infringement lawsuits, while exclusively licensing back all rights to the client, with Righthaven maintaining no rights, except the right to use. The judge dismissed the lawsuit on the ground that Righthaven had no standing to sue, stating that a “copyright owner cannot assign a bare right to sue,” essentially rejecting Righthaven’s business model. Over three-dozen other cases filed by Righthaven are being held up on appeal over the same issue.

Is it the end of Righthaven?  Most signs point to yes.  In the past two months, Righthaven has stopped filing new lawsuits, let cases lapse due to procedural defects and laid off a number of employees. Steve Gibson, CEO of Righthaven, stated they are awaiting the outcome of numerous appellate rulings in the Ninth Circuit Court of Appeals before resuming their efforts.

Regardless of what happens to Righthaven, this line of cases is particularly instructive in at least three ways:  first, they have allowed the emergence of blog-specific copyright cases and an expansion of the fair use doctrine, which Righthaven intentionally helped create (See Cobalt’s prior post on the topic: The Emerging Blog Specific Copyright Cases). Second, these cases are illustrative of how copyright owners from the traditional news world are continuing to struggle over how to best protect and monetize their content. Finally, the cases raise particularly interesting questions of copyright law relating to standing to sue and the validity of copyright assignments, for which we are awaiting clarification from the Ninth Circuit

Last March, ICANN voted to approve .XXX as a new Sponsored Top Level Domain (sTLD) for the adult industry. The registry responsible for operating and managing the new sTLD is ICM Registry.

During the Sunrise Period (known as “Sunrise B”), which will be open from September 7 to October 28, 2011, owners of registered marks in current use can apply to opt-out of the .XXX process and reserve names in order to ensure that those names are not registered as .XXX domain names by others. At the close of the Sunrise Period, if no conflicting application by an adult-industry applicant has been made, the reserved name(s) will be removed from the pool of domain names available for registration. The opt-out fee is approximately $400.

Sunrise Period B is the only opportunity for trademark owners to proactively block .XXX domains containing their marks and we recommend clients consider it. It’s an easy and relatively inexpensive process that could save your company much hassle and legal fees in the long run, particularly if your trademark is well-known and attractive to cyber-squatters.