Justice Department Eyeballs Google Settlement

In the fast-paced world that is the Google Book Settlement, the Justice Department has decided to review the proposed settlement to determine whether it violates any anti-trust laws. We'll update this post to explain what this means shortly.

Google Book Settlement Stalls

Today, Judge Denny Chin extended the deadline to opt-out of the Google Book Settlement. First, a little history. Several years ago, Google embarked upon an ambitious project to scan every book ever created. Working with several institutional libraries, Google has, thus far, scanned approximately 7 million volumes.

In 2005, the Authors Guild and others commenced a class action against Google alleging that the scanning project infringed upon the individual authors copyright rights. We won't get into the basis for the lawsuit here. In 2008, the parties reached a complicated settlement that addresses Google's prior actions in scanning the 7 million volumes and also grants Google significant rights to continued use of its digital library going forward.

The forward looking aspects of the settlement are unusual. Class action are typically resolved by providing some measure of compensation for prior acts and an agreement that the behavior that led to the class action is not repeated. This settlement is different. The settlement agreement runs 334 pages long (no, that's not a typo) and includes more in attachments (200 pages) than primary text (134 pages). A vast array of rights are implicated in the settlement agreement and a new entity -- the Registry -- is created to administer those rights on behalf of authors.

We represent at least two class members of the Google Book Settlement who received their notice within the last two weeks. We suspect that other clients of ours may be class members, but they have yet to receive any notice. We are pleased that the deadline is extended and thank Gail Steinbeck and Andrew DeVore for their efforts. If you have received a class notice or suspect that you may be a member of the class, we'd be happy to help you understand your rights. We're also interested to know if you have only recently received your notice.

Not McLovin' It

Never underestimate the power of formality. We know that registering a copyright can seem like a pain -- as well as an unnecessary expense. After all, copyright protection exists whether a work is registered or not. Relying on this, many artists opt for the so-called "poor man's copyright." They put their work in an envelope and mail it back to themselves and rest easy knowing that they have fully protected themselves. Well, guess again. As a photographer in Puerto Rico learned, the failure to formally register a work with the Copyright Office can yield harsh results.

Antonio Amador is an artist who specializes in photographs of the Puerto Rican landscape. In 2006, Amador discovered, to his considerable surprise, that the McDonald's restaurant at Luis Munoz Marin International Airport had enlarged copies of two of his photographs on display in the restaurant. To make matters worse, the restaurant had displayed these photographs since 2001. Amador had not given his permission for McDonalds to enlarge and hang his photographs. And Amador had gone through the formalities of registering his copyrights in his work -- one in 2004 and the other in 2006. However, he had published the photographs in 1999 and 2003. Publication under the Copyright Act essentially means that they were offered for sale.

Understandably upset, Amador sued McDonalds seeking statuory damages, which can be up to $150,000. It should have been an easy case to win. After all, the photographs were clearly his, he had observed the formality of registering his Copyrights, and McDonald's clearly infringed upon his rights by enlarging and then displaying copies of the photographs without permission. The result, however, may seem surprising. The United States District Court of Puerto Rico ruled that Amador was precluded from recovering statutory damages and attorneys fees. Amador v. McDonald's Corp. et al., No. 07-1312, 2009 WL 349804 (D.P.R. February 11, 2009). In other words, Amador lost the case.

Here's where Amador went wrong. He did register his work with the Copyright Office, but he waited too long to do so. To be eligible for statutory damages under the Copyright Act, an artist must register the work within three months of first publication or prior to the acts of infringement. In this case, Amador didn't do either. He formally registered his works several years after publication and several years after McDonald's act of infringement.

Before you lick the next envelope addressed to yourself, think of poor Amador. Copyright registration is easy to do and not that expensive. Also, registering the copyright gives you a powerful tool in policing potential infringement.

Doing Time

When considering the consequences of copyright infringement, we tend to think about money damages or an injunction that stops a project dead in its tracks. Would anyone be surprised to learn that you could go to jail for copyright infringement? If so, put on a DVD and actually watch the warning. When you see it, you will learn what Kevin Cogill knows -- that copyright infringement can be criminal and result in up to one year in prison and a $100,000 fine.

Kevin Cogill uploaded nine tracks from the new Guns N' Roses album "Chinese Democracy" to the internet prior to the album release. He was prosecuted for criminal copyright infringement and ultimately pled guilty. In his plea, Cogill admitted that he got the tracks from a third-party, but the source was undisclosed. The uploaded tracks were available for download by the public at large. Through advertising on his website, Cogill profited from the availability of the songs on his website. Now, the government has asked that he be sentenced to six months imprisonment in an effort to deter other infringers. In particular, the government called leaks of pre-release works a "serious and growing commercial threat demanding more of a punishment than a slap on the wrist." The RIAA, the recording industry trade association, in a victim impact statement, claimed that the recording industry lost more than $3 million in sales as a result of Cogill's acts. The $3 million in sales roughly equals 150,000 copies of the album.

Hero Trumps Romantics

If you practice really hard, you could have an opportunity to try your hand at The Romantics' "What I Like About You" on Guitar Hero. Apparently, The Romantics weren't thrilled about video game immortality and they sued. The Romantics et al. v. Activision Publishing, Inc., et al. We'll discuss two theories of interest.

First, The Romantics asserted a violation of their right of publicity. The right of publicity is a state common law concept that protects an individual's right to commercially exploit their own name and likeness. Here, The Romantics sought to protect the sound of their voice, which they claimed was distinctive -- like Bob Dylan is distinctive. Michigan law has never recognized a right to protect the sound of a voice, even a distinctive voice. There is plenty of logic in this. Imagine all of the impressionists that would be out of work.

Second, The Romantics argued that Guitar Hero traded on their name in fame in selling the game -- a claim we lawyers call false endorsement. Again, The Romantics based their claim on their "distinctive sound.". Here too, the Court found no support for this position in the caselaw. On this claim, the Court concluded that The Romantics had failed to establish that the use of the song in the game was likely to cause confusion or mistake between the game version of the song and the original. There was no dispute that the song version of the game was a new recorded version, for which the game publisher had obtained a synchronization license. The result seems right to us. Any dissent?

That's My Catastrophe: The Concept of "Hot News"

Can a news organization assert ownership over -- well -- the news? This interesting question landed on our desk recently. Judge Kevin Castel of the Southern District, in The Associated Press v. All Headline News Corp., 08 Civ. 323 reached back to a 1919 Supreme Court decision to find that the Associated Press ("AP") has a property right to "hot news" that it distributes through its wire service.

All Headline News had essentially created a news service by copying news reports filed by AP reporters and editing them for its own use. The AP sued All Headline, relying on several legal theories, including misappropriation.

Misappropriation of "hot news" was first recognized as a federal common law claim in 1919. International News Service v. Associated Press, 248 U.S. 215 (1919). The Supreme Court was concerned that the unfettered ability to copy the work of another news gathering agency would lead to the end of news gathering by rendering such efforts essentially profitless. By establishing a quasi property right to "hot news," the Court sought to allow news gatherers to enjoy the benefit of their work.

This may sound strange. After all, news is news. How can anyone assert an ownership right to it. Think about patents for drug companies. Since the drug companies spend millions of dollars to create drug products, patent law provides the drug companies with a limited monopoly, to allow them to recoup their up front investment in the new drug. That's the theory at any rate. The analogy holds for news organizations as well. AP spends millions of dollars to report the news. That shouldn't give them a monopoly, of course, but does anybody think it's right that a company like All Headline News should be allowed to simply copy the AP's work without committing the resources to do the reporting.

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."

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