Facebook Drops Its New Terms of Service: Time to Breathe Easy?

So last week Facebook dropped its controversial new terms of service. That got us to thinking...what was in the old (and now current) terms of service. More importantly, what should our clients know about uploading their material on the site. What we learned gave us some pause.

1. User Content: In this section, there are two provisions worth knowing. First, the terms make clear that users agree that the use of the site is for "personal, non-commercial use only." Users also agree not to post any videos that "are original art or animation created by you or your friends."

2. User Content Posted on the Site. This section authorizes Facebook to make copies of content as it deems necessary "to facilitate the posting and storage." Users grant Facebook "an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose, commercial, advertising, or otherwise...to prepare derivative works of, or incorporate into other works, such User Content."

We'll focus on the second part and, in particular, the scope of the license granted. First, the license never terminates and can never be cancelled by the user. This is pretty troubling for obvious reasons. Second, the scope of the license includes the right to prepare derivative works. An example of a derivative work would be a film based upon a novel, or a musical based upon a film or a catelogue of songs. The right to create derivative works is frequently among the most valuable to a copyright owner. While the grant is non-exclusive, multiple derivative works are generally not created from the same underlying work.

Obviously, notwithstanding these legal concerns, there is a practical perspective here. There are valid reasons for Facebook to seek these broad rights -- to avoid unintentional infringement, etc. -- and we're not suggesting that Facebook has the intent to run around creating all sorts of derivative works based upon its users' works. It did, however, remind us of the importance of understanding the legal relationships that exist between content creators and sites such as Facebook that provide an outlet for creative content.

RIAA Hits a Wall

Yesterday, the RIAA dropped one of its many file sharing lawsuits after twice being denied a default judgment. In the first decision, a Federal judge in Connecticut concluded that the allegations of distribution and copying were insufficient to state a claim. In denying the first motion for a default judgment, Judge Janet Bond Arterton found RIAA's claim of distribution "problematic." Atlantic Recording Corp v. Brennan, 534 F. Supp. 2d 278 (D. Conn. 2008). In its complaint, the RIAA alleged that the defendant made certain sound recordings available for distribution. To assert a claim of the right to distribute, it must be proved that the defendant actually distributed copies of the copyrighted work. See, e.g., Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1162 (9th Cir. 2007). This decision only underscores the difficulty the courts have had in addressing digital downloads. See, Motown Record Co., L.P. v. DePietro, 2007 WL 576284 (E.D. Pa. Feb. 16, 2007); Interscope Records v. Duty, 2006 WL 988086 (D. Ariz. April 14, 2006).

Shepard Fairey Sues AP: Is Obama Image Fair Use?

So Shepard Fairey has decided to ask a Federal Court to declare that his now famous rendering of President Obama does not infringe upon the AP's copyright in the photograph upon which it is based.  Fairey apparently argues that his use of the photograph is exempt under the "fair use" provisions of the Copyright Act.  The doctrine of "fair use" permits the reproduction of copyrighted material in limited circumstances, such as satire, news reporting, criticism, scholarship, and research.  Section 107 of the Copyright Act also identifies four factors to be considered in whether a particular use is "fair."

1. The purpose of the use, such as whether it is for commercial or nonprofit purposes;

2. The nature of the underlying copyrighted work;

3. The amount of the copyrighted work copied; and

4. The effect on the market or value of the copyrighted work

At first blush, it would appear that the first and third tests would not favor application of "fair use" but the fourth probably would.  This does not appear, however, to present a clear case of "fair use."

Will Amazon Save Book Publishing?

Jeff Bezos of Amazon unveiled the new generation Kindle today, which got us wondering about the future of the publishing industry. The industry is clearly contracting -- imprints closing, massive layoffs, fewer deals are getting made. Could the Kindle change that trend -- or at least staunch the bleeding? At $10, an e-book is a fair bit less than a typical trade paperback and with the ability to download automatically -- not even the iPod can do that -- traditional marketing tools, such as television and radio interviews, can convert sales on the spot. Perhaps it's too soon to tell, but indications are that publishers are embracing the e-book market. We just completed a deal on a backlist title. We also hear that generic devices are around the corner. Any thoughts?

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