Perhaps the most underreported area of copyright infringement in the last decade has been in the home craft and stitching community. The needlepointers have made wholesale, unauthorized copies of patterns; the garment and accessory (patterns which in the ’60’s we paid handsomely to meet our home economics and merit badge requirements) bespoke community have made unauthorized copies galore; and now we have a case involving those plastic cards that we pop into our high tech modern sewing machines.

The Eighth Circuit recently affirmed summary judgement for the craft store that was renting the plastic, memory cards from which the sewing machine takes the direction for producing the embroidery designs. Action Tapes, Inc. V. Mattson (Nos. 05-3309m 05-3520 (8th Cir. Aug 30, 2006).)

The plaintiff, Action Tapes, failed to register the computer software and the requisite source code in the Copyright Office under the 1990 Computer Software Rental Amendments Act.

This, a case of first impression, gives a good map of where the next software embroidery designs plaintiff needs to go to succeed next time.

Those sounds that rudely invade movies, lectures, sermons and other public quiet spaces have a more clinical name: ‘digital phonorecord deliveries’ (DPDs) and now we know that ringtones may be subject to the compulsory licensing under Section 115 of the Copyright Act. A ringtone is a ’snippet’ of music lasting 10 to 30 seconds, often taken from a larger work.

The Copyright Office, in a 35 page ruling held, that ringtones warrant payment for using a ’snippet’ of the larger piece of music:

“We find that ringtones (including monophonic and polyphonic ringtones, as well as mastertones) are phonorecords and the delivery of such by wire or wireless technology meets the definition of DPD set forth in the Copyright Act. However, there are a variety of different types of ringtones ranging from those that are simple excerpts taken from a larger musical work to ones that include additional material and may be considered original musical works in and of themselves. Ringtones that are merely excerpts of a preexisting sound
recording fall squarely within the scope of the statutory license, whereas those that contain additional material may actually be considered original derivative works and therefore outside the scope of the Section 115 license.8 Moreover, we decide that a ringtone is made and distributed for private use even though some consumers may purchase them for the purpose of identifying themselves in public. We also conclude that if a newly created ringtone is considered
a derivative work, and the work has been first distributed with the authorization of the copyright owner, then any person may use the statutory license to make and distribute the musical work in the ringtone. For those ringtones that are covered by Section 115 of the Copyright Act, all of the rights, conditions, and requirements in the Act would apply. For those ringtones that fall outside the scope of Section 115, the rights at issue must be acquired through voluntary licenses.”

The ruling can be found at the Copyright Office web page:

http://www.copyright.gov/docs/ringtone-decision.pdf

This ruling is especially interesting when the Google Print Library Project is relying upon a fair use “snippets” defense to legitimize Google’s wholesale, unauthorized copying of works in copyright. If a snippet of music is subject to compulsory copyright licensing, how could a snippet of text be otherwise?

Digital Rights Management (DRM) is the focus of the the United Kingdom’s “All Party Parliamentary Internet Group” (APIG); and, these are the questions addressed:

1. Does DRM distort traditional trade-offs in copyright law?
2. Do new types of ‘content sharing licenses’ need legislation to be effective?
3. How should consumers be protected when DRM systems are discontinued?
4. What legal protections should DRM systems have from those who wish to circumvent them?
5. What role does the UK Parliament have in influencing the global agenda regarding DRM?

After many meetings and some testimony from interested stakeholders and consumers, the APIG acknowledged that the issues and answers to the questions had eluded easy answer in the complicated technical and ‘hugely fascinating’ area. The following, while not answers, are the APIG recommendations:

A. There should be wider ranging exceptions to the anticircumvention prohibition than presently are on offer;

B. Labeling should be mandatory to mitigate the current consumer confusion around what is permitted and prohibited in their using the digital content that they purchase.

C. Vigilence and care will be needed to preserve the ’single market’ aspirations when confronted with the differential pricing of DRM.

D. The strong position that the government NOT make DRM mandatory.

No Halloween prank was it when three Parisian residents marched first across the Latin Quarter handing out leaflets in which they confess copyright crimes; and then they, and their entourage of 40 waving banner, marched into the Paris police station where they efforted to turn themselves into the highest ranking on-duty officer.

News of their confession campaign had preceded them; and, almost as many armed riot police stood waiting with the forty plus confessees. It was a slow process with some of these foot soldiers in the DRM Resistance offering to confess to by-standers in lieu of the senior officer’s ear. One carried a sandwich board which read ” I LENT MUSIC TO A FRIEND”, and another called out “Not only did I not use an iPod to listen to an iTune, but I also transferred a first run movie to a hand held device, and I am willing to suffer the consequences.”

This demonstation was a protest against the Digital Rights Management (DRM) policies that are creeping into the use of legally purchased songs and videos and in favor of the recent French law which is intended to force compatiblity among all listening and viewing platforms.

In July of 2006, Nestle Waters North America, launched a campaign directed at kids for its new AquaPod waters, specially shaped water bottles designed to promote water-drinking among teens. Included in the campaign were commercials that featured children not obeying their parents and characterizing the parents as “nags.” According to CARU, the self-regulatory agency that requested Nestle remove the ads from the website, one parent wrote “I strongly object to this kind of advertising, which undermines my role and responsibilities as a parent to instill values and a work ethic in my children.”

Nestle agreed to remove the troublesome ads by the end of September.

It now appears that parents are characterized as Zombies on the site. That’s much better.

The advent of the DVR has turned those hard-earned advertising dollars into mush as target customers easily zip past commercials to get to their favorite shows. And while YouTube, GoogleVideo, and other easy-upload sites have been hosting bootlegged-and-previously televised commercials since their inception, only recently has the advertising industry stopped using their legal muscle to take down these rogue postings and adopted a if-you-can’t-beat-’em-join-’em attitude.

Indeed, actually getting consumers to affirmatively seek out commercials seems to be the new craze. And it’s working. In fact, many companies, like Burger King, are using YouTube and other social networking sites, to launch full-scale campaigns. The grainy, slightly do-it-yourself style of the ads is actually adding to their appeal. In some cases, it’s unclear whether the ads are corporate sponsored or created by individuals, another attractive component for the Gen-X-Zers whose mantra seems to be “don’t hard-sell me.”

This ad recently appeared on YouTube, to the delight of consumers. The controversy it sparked is only adding to the commercial’s viewership. Moreover, Smirnoff likely didn’t have to make a million-plus ad buy as it would have for television.

If your spidey senses are tingling because you’re wondering about alcohol beverage control laws, misleading advertising claims, CARU challenges and the like, stay tuned. Ad law is getting interesting again.

At attorney in New York is seeking class action status in a lawsuit filed against Starbuck’s for its coupon campaign that closed early after the tell-a-friend response got out of hand. The Starbucks chain offered its employees an email coupon for a free cup of coffee and allowed the employees to pass the coupon onto friends and family. Evidently having not learned from Napster, within hours, the friends and families contacted numbered in the thousands, and Starbuck’s, inundated with coupons, was forced to shut down the promotion early.

New York attorney, Peter Sullivan, sued. According to the Orange County Register, he believes that “Starbucks should account to the thousands of consumers who relied upon the advertisement, went out of their way to stop by a Starbuck’s and ended up being charged $3.00 for coffee.”

Hardly a “bait and switch” in this attorney’s opinion, (the measure by which a jury is likely to judge the Starbuck’s debacle), Starbuck’s may be able to show that it was merely an honest mistake and a good deed that got out of hand. Moreover, it’s not likely that all that many people went out of their way to get the free drink, considering there’s a Starbuck’s on most corners. Still, it would have been wise for the coffee chain to attach certain restrictions on the coupon.

Practice Pointer:
Viral marketing coupons are popular and companies endeavoring to use them should take certain precautions to insure that it is not overwhelmed with responses. Some examples are as follows:

The FTC is getting serious about children’s privacy. According to the FTC website, xanga.com (and its pricipals, Marc Ginsburg and John Hiler) agreed to pay a whopping $1 Million in civil penalties for violating the Children’s Online Privacy Protection Act (“COPPA”).

According to the FTC, the xanga site allowed users under the age of 13 to sign up for a free account, despite the proscription on the sign-up page. Xanga failed to secure parental permission from those users, even when they used a birthdate that clearly made them underage.

Practice Pointer:
Many companies mistakenly believe that they are in compliance with COPPA guidelines if their content is adult directed or if they post a statement that no one under 13 is allowed to register on the site. In fact, companies may be in violation of COPPA in the following situations:

As the FTC continues to crack down on social sites, the fnes and corrective measures (including scrapping an entire mailing list) that the FTC will require will continue to increase. If you are uncertain whether you should be in compliance, contact us

The District Court of Nevada has found that Adrenaline Sports’ use of the mark WHAT HAPPENS IN VEGAS STAYS IN VEGAS infringes the use by The Las Vegas Convention and Visitors Authority (”Convention Authority”) of the slogan WHAT HAPPENS HERE STAYS HERE.

In December of 2002, the Convention Authority launched its “Vegas Stories” advertising campaign. All of the commercials ended with a display of the words WHAT HAPPENS HERE STAYS HERE. In April of 2003, defendants began using the mark WHAT HAPPENS IN VEGAS STAYS IN VEGAS and obtained a Nevada state registration for the trademark.

In looking at all the Sleekcraft factors, the court found that while the marks are not identical, the terms “here” and “in Vegas” are interchangeable, particularly in light of the fact that in this case, both phrases relate unequivocally to Las Vegas. “Consumers who purchase Defendant’s clothing are not likely to stop and consider the difference between ‘Here’ and ‘In Vegas’ before deciding the purchase such clothing.” Thus, even though other factors (including the marketing channels for the two marks) are distinct, the similarities in the marks coupled with the level of care a purchaser might expend in buying schwag, confusion was likely.

The Children’s Advertising Review Unit (“CARU”) determined that the advertising, aired on Nickelodeon, for a new SpongeBob SquarePants DVD violated the CARU Advertising Guidelines prohibiting advertising placement of a product during the show that features the same characters. Nick was quick to remove the problematic ad placement, noting that human error was the culprit.

Advertisements placed during a show, or directly adjacent to a show, which showcase the subject of the show, tend to lead children to the conclusion that the character (in this case, SpongeBob) is endorsing the product. CARU believes this sort of advertising is unfair to children (and parents).

The 9th Circuit affirmed a lower court decision that Plaintiff’s screenplay The Funk Parlor” was not infringed by the HBO television series “Six Feet Under: The court found that while at a general level, elements of the two shows were similar, the devil was buried in the details.

The court found that both stores took place in a funeral home and began with the death of the family patriarch. Both stories also share a male character who comes home to help run the business after the death, and both stories have family members who end up in strange love relationships, including a character in each screenplay who is romantically involved with her brother.

Notwithstanding these similarities, the Court found that the themes of the stories are vastly different. Moreover, in looking at the setting, mood, and pace of the stories, the Court found significant differences, too.

In finding no copyright infringement, the Court held that the plaintiffs rely heavily on scenes a faire in their argument and do not focus on the actual elements of the story that are unique.

Barney parodist Stuart Frankel, a doctor with a lot of free time, has filed a declaratory relief action against Lyons Partnership, the creators of the lovable character Barney, the Purple Dinosaur. The action, filed in the Southern District of New York, seeks a declaration that Frankel’s website, Stuart Frankel’s Very Small Webpage does not infringe any protected copyright or trademark related to Barney.

The website portion in question pokes fun at the Barney and Friends television show, claiming that Barney leads a double life and in fact is an evil demon. Sources who watch The Barney Show regularly have confimred that this information is not contained in the actual show (notwithstanding the fact that all sources were under the age of four, we stand by the voracity of these statements).

According to the suit, filed in late August of this year, Plaintiff received several threatening letters from Lyons attorney, demanding he cease operating the site or risk legal action. Notwithstanding Plaintiff’s responses — through his counsel — that Lyons attorney speak directly with counsel and stop sending letters to him, the letters kept coming, in form-letter style, directly to Plaintiff. The letters alleged that Frankel had infringed the BARNEY trademarks and copyrights and threatened to have Frankel’s website taken down as a result.

While trademark law does acknowledge parody as a partial defense, it is not a complete defense. The measure of whether a third party’s use of a trademark is fair will be determined under the same standard as any trademark infringement suit, namely, whether the relevant class of consumers believes that there is any affiliation with or sponsorship by the relevant class of consumers. The content of the web page — much like a “sucks” website — seems to establish that Stuart is not a fan of the cuddly character.

From a copyright perspective, parody constitutes a fair use and a complete defense to copyright infringement. Given that the site is non-commercial, and the images of Barney are limited to two, both of which are probably necessary to establish the parody, the plaintiff may well get his wish, but one thing’s for sure: he won’t be a guest on the “Let’s Have Fun with Manners” episode.

Reality television show themes and movie plots are among the theatre forming the new platform for the evolving area of state jurisdiction over ‘idea submission’ theft in New York and California courts. Arising from the case in which Jeff Grosso sued Miramax for Miramax’s movie, “Rounders”, the Ninth Circuit held that while Grosso failed to prove copyright infringement and therefore had no standing in federal court, the issue of idea theft was not pre-empted for resolution in state court.

Since the Ninth Circuit ruled in Grosso v. Miramax, there have been many state cases filed by the emboldened plaintiff’s bar in both New York and California.

In California, four Californians sued Fox Broadcasting in July alledging that the reality television show, “So You Think You Can Dance” was stolen from an idea that the four conveyed in a meeting at Fox in 2003. At that meeting, the four individuals told a Fox executive of the idea and agreed to write, produce and direct it. No outline of the idea was written down; no script was written; no contract was signed; no confirming letter was sent; and no copyright application was filed.

In New York, two cases were filed this summer. The first is a suit against Warner Brothers filed by and author, Matthew Benay, for stealing the idea for the movie, “Samurai”. The second is a suit against NBC by author, Maurice Fraser, who claims to have pitched a reality television show theme and idea which was not acknowledged or paid for, but which is about to be released in the fall show, “World Vision: An American Anthem”.

These Californian and New York plaintiffs are optimistic that their claims of idea theft will fare better than Grosso’s. This month, the California Court threw out Grosso’s state case that “Rounders” was stolen from Grosso’s script, “Shell Game”.

Adding to the complexity, the standards for which ideas and under which contextual circumstances idea theft may be actionable vary widely between New York and California law. Which means that reality television is likely to spawn more litigation as ‘reality’ and television seem to be increasingly entwined.

Although Smack Apparel has been selling colleagiate t-shirt parodies since 1989, the absence of authorizing licenses was not a business oversight. Smack Apparel proudly announces on its website, “Licensed ONLY by the First Amendment” when it uses colors, fonts and near verbatim phrasing of popular college imprimaturs at www.smackapparel.com.

For Duke University - Puke

For Louisiana State - Bourbon Street or Bust

Colleagiate Licensing together with seven schools ( Louisiana University, University of Oklahoma, University of Southern California among them) sued Smack Apparel alledging trademark infringement by school color appropriation.

U.S. District Judge Mary Ann Lemmon of the Eastern District of Louisiana granted summary judgement in favor of Plaintiffs and finding trademark infringement for defendant’s color misappropriation.

Counsel for Plaintiff, Collegiate Licensing, commented that such infringement as that of Smack Apparel, amounted to an estimated detour of over three (3) billion dollars in retail collegiate merchandise which denies the schools of scholarship and endowment monies.

Board of Supervisos of the Louisiana State University et al v. Smack Apparel 04-1593 (2006) E.D. Louisiana.

Dice Corp is in the business of selling software into the niche market of the security and alarm industry; and, as a part of that business was a nonexclusive licensee, a dealer, of an accounting and business software package, THOROUGHBRED. Dice found the THOROUGHBRED license to be cumbersome and restrictive.

So, Dice designed some self help that allowed Dice to sublicense the THOROUGHBRED software multiple new locations and users. The self help was a bit of custom code that facilitated the installation of the licensed code without any of the restrictions - the install code, for instance. Dice sublicensed to several end users using this free wheeling process.

Thoroughbred, the licensor, exercised their rights to audit the sublicenses that Dice was granting; and hired a private detective to verify that there was a whole subset of unauthorized sublicensees that Dice had set up. Thoroughbred sued; and Dice defended that it was contract breach, not copyright infringement.

The trial court in the Eastern District of Michigan on July 21 found that there was copyright infringement, not breach of contract; but, limited the damages to be paid to Thoroughbred to be the amount that Thoroughbred would have gotten but for the unauthorized licenses. This damage calculation is not the amount that the plaintiff was entitled to under the statute, but in favor of keeping the ongoing business relationships going, perhaps enough for Thoroughbred.

Facts as rare as a winning lottery ticket, but not so sweet.

One of the tunes on the “Saturday Night Live” movie is “Disco Inferno”; and the facts surrounding that song’s renewal are the makings of a rare copyright question.

Two collaborators, Kersy and Green, were joint authors to the song when they wrote it in 1977 after the 1976 Copyright Act was passed, but before it was enabled in 1978. So, the song was covered under the 1909 Act, and was granted an initial term of 28 years, plus an opportunity for another 28 years if a timely renewal was filed.

When the time window to file the renewal came up, the joint authors had long previously been assigned to a series of owners. Dreamworks most recently had assigned it on to another assignees finally Dimensional Music Publishing (DMP). The DMP assignee filed the renewal document on January 5th, 2005, which is about as soon after that renewal window opens that anyone can file it.

So, far the facts are fairly standard; and, here is where the anomolous fact comes in: Kersey, one of the two original collaborators and a joint author, both filed a renewal application for the work in his own name; and then died three weeks later. Kersey filed his individual renewal on January 13th, but because Kersey submitted the wrong amount of monies to pay the renewal fees, the renewal was not operative until April 5, 2006.

Why is this a rare combination of facts?

First, because all copyrights expire at the end of a calendar year and the renewal window in which the renewal must be filed extends all twelve months of that renewal window year. Second, although transfer owners eligible to renew the copyrights that the transfer owners has taken by assignment, that right is predicated upon the author being alive when the renewal is effected.

The question of whether the renewal rights vested in DMP in the three weeks before Kersey died is the open issue before Judge Jan Dubois in the Eastern District of Pennsylvia. On July 12th, 2006, the Judge signed an order denying reconsideration of her earlier ruling which made the renewal term vest in the name of DMP. Stay tuned to see if it is appealed. The case is Dimensional Publishing v. Kersey.

This article on page B3 of the New York Times in the July 18th edition is reminscent of the sort of citizen reporting that happened in the McCarthy era. It is Hong Kong this time where young people in otherwise benign organizations are being recruited to report internet sites dispensing unauthorized copies of songs and movies.

The youth reporting is the grass roots end of the chain of reporting that funnels information up to the government. The Customs officials will then verify the internet site and then relay the details on the trade groups such as the RIAA, MPAA and the International Federation of Photographers. The identity of the reporting youngster (average age 11) will be kept secret, or so the Hong Kong government promises.

The Scout Association of Hong Kong reports that this campaign is a great vehicle to teach children good citizenship. The Hong Kong police department defends the campaign saying that it is no different than asking citizens to tell police when they see a crime committed.

A documentary is being filmed. A cell phone rings, playing the “Rocky” theme song. The filmmaker is told she must pay $10,000 to clear the rights to the song. Can this be true? “Eyes on the Prize,” the great civil rights documentary, was pulled from circulation because the filmmakers’ rights to music and footage had expired. What’s going on here? It’s the collision of documentary filmmaking and intellectual property law, and it’s the inspiration for this new comic book. Follow its heroine Akiko as she films her documentary, and navigates the twists and turns of intellectual property. Why do we have copyrights? What’s “fair use”?

The Duke Center For the Study of the Public Domain has this story in a new comic book available for sale or for free download. The Heroine’s name, AKIDO, in this story means ‘the way of harmony’ but the story is anything but the story of harmony….

Berlent v. Focus Features makes the lesson, again, that on the merry-go-round of preliminary injunctions, that old adage, “thems as snoozes loses” never gets stale.

Berlent, a New York composer, sued all the producing parties of the movie, Brokeback Mountain, claiming that the movie theme song was a copyright infringement of Berlent’s own song, “Slow Dance”.

The Southern District of New York never got to the merits, but looked at the timeliness of the filing of the law suit relative to the harm that the action was seeking to prevent. As Berlent filed the action eight months after the first public release of the movie trailer; five months after the soundtrack was released; four months after the movie was released; AND, one month after the Academy awarded “Best Original Score” for the music at issue, the court held that the only rights to be discussed were after a trial. Motion for Preliminary Injuntion denied.

Berlent, in the complaint, acknowledged that he was already in the intolerable position of watching someone else get an Oscar for music that Berlent had written and for which he got no credit. Berlent claims that he only heard the music when a television advertisement presaged the release of the DVD of ‘Brokeback Mountain’.

Pre-emption

Laws v. Sony Music Entertainment, Inc. (9th Cir 5/24/06)

Long ago (1976) in a pre-digital, pre-internet world, Debra Laws, a recording artist, signed a license with Electra Records for Electra to exclusively produce master recordings and to sub-license the resulting recordings.

Fast forward to the digital, internet burgeoning world where Electra licenses to Sony the nonexclusive right ’sample’ from Law’s recordings to integrate those ‘brief samples’ into a Jennifer Lopez DC and music video entitled, “All I Have”. Electra does not communicate or enquire of Law’s inclination to such a sublicense as Electra was the exclusive licensee, and as such was the titular and beneficial owner.

Law, outraged, sued in California state court under much the same analysis that Portia stopped Shylock from extracting his ‘pound of flesh’ pointing out that Shylock could only have a “pound of flesh” without a drop of blood. Law claimed that she had standing in state court under California Publicity Code 3344 which prohibits the misappropriation of one’s voice, image or name.

Electra defended stating that the California Publicity Statute was preempted by the Federal Copyright Law. The Ninth Circuit agree that the California Statute was preempted.

Which just goes to show that Shakespeare is out of step with digital, internet copyright law: You can take the pound of flesh and all the blood you want, if you have an exclusive copyright license. Shylock was way ahead of his time.