Protecting Copyrights on the Internet:

Latest Approaches and DevelopmentsNavigating Fair Use, Infringement Claims, DMCA Safe Harbor and Secondary Liability Issues

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WEDNESDAY, MAY 13, 2020

Presenting a live 90-minute webinar with interactive Q&A

Lori Chang, Shareholder, Greenberg Traurig, Los Angeles

Stephen M. Doniger, Esq., Partner, Doniger / Burroughs, Venice, Calif.

Randy M. Friedberg, Partner, White and Williams, New York

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Stephen M. Doniger, Esq.,

is a partner with Doniger / Burroughs PC, a boutique law firm with offices in Los Angeles and New York

which handles litigation and transactional matters for, inter alia, clients in the fashion and entertainment

industries. Mr. Doniger focuses his practice on intellectual property and business litigation, is a frequent

speaker and author on IP topics, and has been retained as an expert witness in IP litigation.

DIRECT LIABILITY

The Basics & Recent Developments

ELEMENTS OF DIRECT LIABILITY

Ninth Circuit Model Jury Instruction 17.5:

On the plaintiff ’s copyright infringement claim, the plaintiff has the burden of proving by a preponderance of the evidence that:

• 1. the plaintiff is the owner of a valid copyright; and

• 2. the defendant copied original expression from the copyrighted work.

___

Copyright.gov: “As a general matter, copyright infringement occurs when a copyrighted work is reproduced, distributed, performed, publicly displayed, or made into a derivative work without the permission of the copyright owner.”

Stephen M. Doniger, Doniger / Burroughs PC

7

THE VOLITIONAL CONDUCT REQUIREMENT:

• Like other commercial torts, copyright

infringement requires that the alleged infringer proximately

caused the infringement, i.e., engaged in volitional

conduct that violates one of the rights vested in

a copyright.

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THE PROGENY OF Aereo v. ABC

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I s sue : d id Aereo e l im inate the so -ca l l ed “vo l i t iona l -conduct” requ i rement?

• In American Broadcasting Companies, Inc. v. Aereo, Inc., 134 S.Ct. 2498 (2014), the Supreme Court held that the “transmit clause” prohibits an online service provider from streaming television programs to individual users, rejecting Aero’s argument that it was doing no more than making available content that those users could otherwise access for free with a home antenna, a TV, and a digital video recorder.

• The Court ruled that Aero is not simply an equipment supplier, but rather its activities are “substantially similar” to those of cable television companies.

• Yet the Court recognized that, unlike a cable television system, it is Aero’s subscribers (and not Aero) that activate the antenna.

10

Perfect 10 Inc . v. Giganews Inc . , 847 F.3d 657 (9th Cir. 2017)

BWP Med i a USA I n c . v . T&S So f twa re A s s o c i a t e s , I n c . , 852 F. 3d 436 (5 t h Cir. 2017 )

• The Ninth and Fifth Circuits separately rejected the

argument that the U.S. Supreme Court’s 2014 ruling in ABC

v. Aereo had eliminated the so-called “volitional-conduct”

requirement for accusations of direct copyright

infringement.

• Perfect 10: “Because Aereo did not expressly address the

volitional conduct requirement and the court’s analysis can

be reconciled with it, we conclude that the requirement

was left intact and that the district court did not err in

requiring Perfect 10 to satisfy it.”

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Fox Te lev i s ion Stat ions , Inc . v . Aereok i l le r, LLC , 851 F.3d 1002 (9th Cir. 2017)

• The district court granted partial summary judgment to FilmOn, deciding that it qualified as a “cable system” under the plain meaning of § 111, as well as the Supreme Court’s Aero decision (which had analogized Internet-based retransmission services to cable companies in the course of deciding that Internet retransmissions count as “performances” under the Act’s Transmit Clause, 17 USC § 101).

• Ninth Circuit reversed, holding that the Copyright Act’s Section 111 compulsory license—a provision that gives cable providers like Comcast Corp. easy access to broadcast content for a set price—was not written with web streamers in mind.

• Thus internet streaming services like FilmOn X cannot use the automatic copyright license to stream their broadcast content without the consent of the networks and without negotiations on price.

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EMBEDDING AS DIRECT

INFRINGEMENT

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EMBEDDING AS DIRECT INFRINGEMENT

Rev i s i t i n g Pe r fe c t 10 , I n c . v . Amazon . c om , I n c . , 508 F.3d 1146 (9 th C i r. 2007 )

• Google could not be liable for direct copyright

infringement because it merely “frames” content by

providing an in-line link to another site; i.e., the content is

not stored on Google’s server and thus is not being

displayed or distributed by Google (“the server test”);

• However, “Google could be held contributorily liable if it

had knowledge that infringing Perfect 10 images were

available using its search engine, could take simple measures

to prevent further damage to Perfect 10’s copyrighted

works, and failed to take such steps.”

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EMBEDDING AS DIRECT INFRINGEMENT

Go l dman v . B r e i t ba r t News Ne two r k , L LC , 302 F. Supp.

3d 585 ( S .D.N .Y. 2018 )

• Goldman took a photograph New England Patriots quarterback Tom Brady with Boston Celtics’ General Manager Danny Ainge and others in East Hampton, New York, in July 2016, and uploaded the photo to his own Snapchat story. His work went viral across social media.

• Various online news outlets subsequently “embedded” tweets featuring the photograph within articles about Brady and Ainge on their websites, using HTML code to retrieve the tweets from Twitter’s servers.

• SDNY judge Katherine Forrest granted partial summary judgment for artist, finding that that in-line linking can result in direct infringement, specifically rejecting the Perfect 10 v. Amazon.com “server test” (Aero).

• Certified for interlocutory appeal, but rejected by the Second Circuit.

• Defenses, including fair use, specifically reserved.

15

Free Speech Systems , LLC V. Menzel , 390 F. Supp. 3d 1162 (N.D. Ca l . 2019)

• Free Speech Systems was a declaratory judgment action filed by a website that published a post featuring nine photographs taken by the defendant photographers. The photographer counterclaimed for direct copyright infringement. The website moved to dismiss those claims based on Perfect 10, arguing that the post in dispute merely “pointed” to images hosted at the photographer’s own server and that the website “did not itself store any of the photographs at issue.” Id.

• The court denied the website’s motion to dismiss the direct infringement claim, suggesting that Perfect 10 has no application beyond the context of search engines, and noting that the website identified “no case applying the Perfect 10 server test outside of the context of search engines.”

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EMBEDDING AS DIRECT INFRINGEMENT

The Leade r ' s I n s t . , L LC v . J ac kson , No. 3 :14 -CV-3572-B (N.D. Tex . Ju ly 24 , 2015)

District Court for the Northern District of Texas rejected the Perfect 10’s

“server test,” ruling that “to the extent Perfect 10 [case] makes actual

possession of a copy a necessary condition to violating a copyright

owner’s exclusive right to display her copyrighted works, the Court

respectfully disagrees with the Ninth Circuit.”

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EMBEDDING AS DIRECT INFRINGEMENT

Section 106(5) of the Copyright Act protects a copyright owner’s exclusive right to “display the copyrighted work publicly.” 17 U.S.C. § 106(5). one displays a work when he or she “show[s] a copy of it, either directly or by means of … any … device or process.” id. § 101.

To determine whether a work is infringed under the Copyright Act, a court must “focus on the [work] as presented to, and perceptible by” the public. N.Y. Times co. v. Tasini, 533 U.S. 483, 499 (2001).

The copyright act is not concerned with the “behind-the-scenes way” that content is delivered, “invisibl[y]” to the recipient, Am. Broad. Cos. V. Aereo, Inc., 134 S. Ct. 2498, 2507-08 (2014), and such technical considerations are “not adequate to place [the defendant’s] activities outside the scope of the act,” id. at 2511.

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SOCIAL MEDIA & COPYRIGHTS

What rights do they have to what

we post?

What rights to content owners

have?

What rights do third parties have?

What is infringing???

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Third Parties Cannot Use Your Social Media Content without your

permission.

Agence France Presse v. Morel, 934 F. Supp. 2d 547 (SDNY 2013):

The court roundly rejected AFP’s argument that it could take the benefit of broad license terms contained in Twitter or Twitpic’s terms of service.

The Court recognized that Twitter’s TOS included: “By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) [your content…]”, but concluded that those terms do not “suggest AFP's commercial uses are licensed. If anything, the Guidelines further underscore that the Twitter TOS were not intended to confer a benefit on the world-at-large to remove content from Twitter and commercially distribute it.”

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Is Instagram somehow dif ferent?

• Sinclair v. Ziff Davis, LLC, and Mashable, Inc., Case 1:18-CV-00790 (SDNY 2020):

• The court found that the website Mashable did not infringe the copyright in a photograph owned by Sinclair, despite using it after unsuccessfully asking for a license. Instagram’s terms of service state that it has a license to use works posted to it, and a right to sublicense those works. The Court seemingly concluded that because public Instagram pages offer embedding as an option, Instagram has effectively granted a sublicense to third parties to embed public content.

• A Motion for reconsideration is pending which notes, inter alia, that the relevant TOS provide that Mashable (1) may not “use the Instagram API to simply display User Content […] without our prior permission” (See Sec. A, Par. 16), and (2) must “represent and warrant that you own or have secured all rights necessary to display, distribute and deliver all content in your app or website” (see Sec. D, Par. 9). Finally, it must (3) “comply with any requirements or restrictions imposed on usage of Instagram user photos and videos (“User Content”) by their respective owners. You are solely responsible for making use of User Content in compliance with owners’ requirements or restrictions.” So where’s the grant of sublicense to Mashable?

21

Statute of Limitations

Copyright Infringement has a 3 year SOL

The SOL runs from the last violation under the separate-accrual rule—i.e., when a defendant commits successive violations, the statute of limitations runs separately from each violation. Each time an infringing work is reproduced or distributed, the infringer commits a new wrong. Each wrong gives rise to a discrete “claim” that “accrue[s]” at the time the wrong occurs. Thus, each infringing act starts a new limitations period.

Stone v. Williams, 970 F. 2d 1043, 1049 (CA2 1992) (“Each act of infringement is a distinct harm giving rise to an independent claim for relief.”).

22

Leonard v. Uni ted States

• Leonard took a microscopic photograph of a stem cell in 1996.

• NASA posted the photo to its website in August 2004.

• NASA last updated that page November 2007.

• Leonard filed suit in 2018, the government screamed “SOL!”

The court said “Nope.” A copyright holder has the exclusive right to “display the copyrighted work publicly” and display in this context means “to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process[.]” Given these statutory definitions, the court concludes that “each time a user viewed NASA’s webpage, [Leonard’s] copyrighted Work was displayed on the user’s computer,” and each display is a separately accruing act that “infringes on the owner’s right of public display.” As it is likely that such viewership occurred while the infringing website was online during the three-year window, the court denied the motion to dismiss.

The APL court also found that a website owner that publishes infringing content engages in a separately accruing violative act each time it “distributes” a work in contravention of the artist’s exclusive right to distribute her work. The court rejected the government’s assertion that a distribution occurs when a work is “made available” for distribution, and instead found that NASA’s “act of transmitting the webpage — and the [Leonard photograph] therein — to a user would infringe on this right.” And to the extent this happened within the three-year window, such conduct would be inside the statute of limitations.

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THE DISCOVERY RULE

- Most circuit courts, including the 9th and 2nd, also follow the “Discovery Rule.”

• “The statute of limitations does not prohibit recovery of damages incurred more than three years prior to the filing of suit if the copyright plaintiff was unaware of the infringement, and that lack of knowledge was reasonable under the circumstances. Without the benefit of tolling in this situation, a copyright plaintiff who, through no fault of its own, discovers an act of infringement more than three years after the infringement occurred would be out of luck. Such a harsh rule would distort the tenor of the statute. Section 507(b), like all statutes of limitations, is primarily intended to promote the timely prosecution of grievances and discourage needless delay. It makes little sense, then, to bar damages recovery by copyright holders who have no knowledge of the infringement, particularly in a case like this one, in which much of the infringing material is in the control of the defendant.” Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 706-07 (9th Circ. 2004).

• The Discovery Rule permits a plaintiff to seek damages from the start of the infringement.

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Laches is Not a Defense

Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663

In 2009, Petrella sued MGM for copyright infringement related to the 1980 movie “Raging Bull.” The case was dismissed on summary judgment based on laches because the plaintiff knew of

the claim for over a decade.

The USSC held that the doctrine of laches could not be used to bar a copyright suit that seeks relief for damages that occurred within the three-year timeframe allowed by the Copyright

Act.

”It is hardly incumbent on copyright owners… to challenge each and every actionable infringement. And there is nothing untoward about waiting to see whether an infringer’s

exploitation undercuts the value of the copyrighted work, has no effect on the original work, or even complements it. Fan sites prompted by a book or film, for example, may benefit the

copyright owner. See Wu, Tolerated Use, 31 Colum. J. L. & Arts 617, 619–620 (2008). Even if an infringement is harmful, the harm may be too small to justify the cost of litigation.

If the rule were, as MGM urges, ‘sue soon, or forever hold your peace,’ copyright owners would have to mount a federal case fast to stop seemingly innocuous infringements, lest those

infringements eventually grow in magnitude. Section 507(b)’s three-year limitations period, however, coupled to the separate-accrual rule, see supra, at3–6, avoids such litigation profusion. It allows a copyright owner to defer suit until she can estimate whether litigation is worth the

candle. She will miss out on damages for periods prior to the three-year look-back, but her right to prospective injunctive relief should, in most cases, remain unaltered.”

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Did Petrel la Affect the Discovery Rule?

Petrella stated that “a successful plaintiff can gain retrospective relief only three years back from the time of suit,” which seems inconsistent with the DR. But the Petrella decision also recognized that most circuits follow the DR and could have expressly abrogated the rule but did not do so.

Mitchell v. Capitol Records, LLC, 287 F. Supp. 3d 673 (USDC, WD Kentucky, 2017): Petrella does not require the court to ignore the Sixth Circuit’s “discovery rule” since, inter alia, it did not

specifically abrogate application of the discovery rule, and it acknowledged that other federal courts may still apply the rule. Further, other courts — including in the Second and Ninth

Circuits — have continued to apply the discovery rule to copyright infringement actions even after Petrella.

NOTE: In Rotkiske v. Klemm, 589 U.S. ___, 140 S.Ct. 355 (December 10, 2019), the Supreme Court considered a Third Circuit decision rejecting application of the discovery rule under the Fair Debt Collection Practices Act (FDCPA) one-year limitations period, which states that the period begins on “the date on which the violation occurs.” The Third Circuit had held that the use of the word “occurs” means just that, and that it leaves no room for a discovery rule. The Supreme Court agreed, holding that the word “occurs… unambiguously sets the date of the violation as the event that starts the one-year limitations period.” The Court rejected the

argument that it should “read in” a discovery rule because it is “atextual” and because Congress had written discovery rules into other statutes, indicating that it was not intended in this one.

26

Final thought:The First Sale Doctrine in the

digital age

The First-sale Doctrine (17 U.S.C. § 109) Permits “the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner … without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” In essence, the copyright owner cannot prevent the lawful owner of a copy from selling such copy to another.

But when we transfer a digital file we create a new copy. Thus in Capitol Records, LLC v. ReDigi Inc. (SDNY, 2013), the Court found that the copy was ultimately an unauthorized reproduction—even where the original file was simultaneously deleted—and therefore outside of the protection of the first-sale doctrine.

To sell a digital file, the owner of a copyrighted work may sell or gift the hard drive, ipod, or other memory device onto which the digital file was originally downloaded.

27

Policing and Protecting Copyrights On The Internet

MAY 13, 2020

Lori Chang | changl@gtlaw.com | 310.586.3863

www.gtlaw.com

© 2019 Greenberg Traurig, LLP

• Allen v. Cooper, 140 S. Ct. 994 (March 23, 2020)

• Copyright Remedy Clarification Act of 1990 (CRCA): states “shall not be immune, under the Eleventh Amendment of the Constitution of the United States or under any other doctrine of sovereign immunity” from copyright infringement lawsuits. 17 U.S.C. § 511(a).

• Videographer Frederick Allen sued North Carolina for alleged infringement of videos and images of Blackbeard’s ship wreckage off the coast of N.C., which the state (claiming ownership of the wreckage) posted online and printed in newspapers. Allen argued that the CRCA abrogated states’ sovereign immunity. District court denied motion to dismiss; Fourth Circuit reversed.

• Held (Kagan, J.) (unanimous): Congress lacked authority to abrogate state sovereign immunity under either 1) the Intellectual Property Clause of Article I of the Constitution, or 2) Section 5 of the Fourteenth Amendment.

• Relying on Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999), which held that the Patent Remedy Act did not validly abrogate the states’ sovereign immunity with respect to patent infringement suits.

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2020 U.S. Supreme Court Cases

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• Georgia v. Public.Resource.Org, Inc. (April 27, 2020)

• State of Georgia sued Public.Resources.Org for publishing the entire Official Code of Georgia Annotated (OCGA), including the annotations appearing below each statutory provision that summarized relevant judicial decisions, attorney general opinions, and other reference materials. Annotations prepared by Matthew Bender & Co. pursuant to a work-for-hire agreement vesting the copyright in the State of Georgia. The state argued that while the laws themselves were in the public domain, the commissioned annotations were not. Eleventh Circuit reversed grant of partial summary judgment.

• Affirmed Eleventh Circuit by a 5-4 majority (Roberts, J.); held that the annotations were not copyrightable.

• Held that the “government edicts doctrine” precludes copyright in the annotations because they were authored by an arm of the legislature in the course of its official duties.

• Further noted that the annotations, while non-binding, provide important practical guidance.

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2020 U.S. Supreme Court Cases

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Claims against website owners, social networks, service providers, and other intermediaries

• Direct liability

• Contributory liability

• Vicarious liability

• Inducement

DMCA safe harbors for user conduct/content (17 U.S.C. § 512)

Platform Liability

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© 2019 Greenberg Traurig, LLP

• Intent or knowledge not required. E.g., EMI Christian Music Group, Inc. v. MP3Tunes, LLC, 844 F.3d 79, 89 (2d Cir. 2016) (“Copyright infringement is a strict liability offense in the sense that a plaintiff is not required to prove unlawful intent or culpability . . . ;” citations omitted).

• Direct liability may potentially be imposed for material posted or stored online or transmitted by third parties where there is a volitional act to further the infringement (i.e., where causation is shown).

• E.g., Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), cert. denied, 557 U.S. 946 (2009) (“to establish direct liability. . . , something more must be shown than mere ownership of a machine used by others to make illegal copies. There must be actual infringing conduct with a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner himself trespassed on the exclusive domain of the copyright owner.”); CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 550 (4th Cir. 2004) (holding that a service provider did not engage in volitional conduct sufficient to impose liability for direct infringement where it was “simply the owner and manager of a system used by others who [we]re violating [plaintiff’s] copyrights and [wa]s not an actual duplicator itself.”); Fox Broadcasting Co. v. Dish Network LLC, 747 F.3d 1060 (9th Cir. 2014) (holding that a cable company that provided technology to its subscribers that they could use to make copies was not likely to be held directly liable because Dish itself did not make the copies and direct liability requires a showing of causation—or evidence of “copying by the defendant”).

• American Broadcasting Cos. v. Aereo, Inc., 134 S. Ct. 2498 (2014)

• Fox Broadcasting Co. v. Dish Network LLC, 160 F. Supp. 3d 1139 (C.D. Cal. 2015) (““[t]he volitional conduct doctrine is a significant and long-standing rule, adopted by all Courts of Appeal to have considered it, and it would be folly to presume that Aereo categorically jettisoned it by implication.”)

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Direct Liability

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• Absent active involvement or volitional conduct, merely providing neutral tools that may be used for legitimate purposes (and misused to engage in infringement) should not give rise to direct liability.

• E.g., Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657 (9th Cir. 2017) (affirming dismissal of direct infringement claims against a service provider that made available access to the Usenet and provided a software tool, “Mimo,” that allowed users to view images on the Usenet; to the extent that the tool was used to view infringing content, it was the user, not Giganews, that accessed infringing material); Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (holding that Cablevision was not directly liable for copyright infringement for its operation of a “Remote-Storage DVR System” that allowed Cablevision customers to record programs on central servers at Cablevision’s facilities and play the programs back for viewing at home, where copies were “made automatically upon that customer’s command”).

• EMI Christian Music Group, Inc. v. MP3Tunes, LLC, 844 F.3d 79 (2d Cir. 2016) (affirming findings of direct liability against MP3Tunes, for infringement of album cover art retrieved automatically by the service when a user “sideloaded” (or downloaded) a song, where the MP3Tunes designed its system to automatically retrieve album cover art from Amazon.com, without the proper license, each time a user sideloaded a corresponding song to his or her account)

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Direct Liability

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• Contributory liability: (1) knowledge of infringing activity, and (2) material contribution to infringement.

• Knowledge may be imputed

• Willful blindness. See, e.g., BMG Rights Management (US) LLC v. Cox Communications, Inc., 881 F.3d294, 307-12 (4th Cir. 2018) (holding that contributory infringement may be based on actual knowledge or willful blindness, but not negligence, but must be premised on knowledge or willful blindness of specific instances of infringement).

• Constructive knowledge. See, e.g., Ellison v. Robertson, 357 F.3d 1072, 1077 (9th Cir. 2004) (finding that AOL did not have actual notice when it failed to receive an email sent to it at an old address that it continued to publicize, but that a reasonable trier of fact could conclude that AOL “had reason to know” that infringing copies were stored on their Usenet servers); A&M Records, Inc. v. Napster, Inc., 239 F.3d1004 (9th Cir. 2001) (found evidence of both actual and constructive knowledge, with the latter established bsed on evidence that Napster employees had recording industry experience, had enforced intellectual property rights in other instances, employees themselves downloaded copyrighted songs using the service, and Napster promoted the service with screenshots listing infringing files);

• BMG Rights Management (US) LLC v. Cox Communications, Inc., 881 F.3d 294, 307-10 (4th Cir. 2018) (ruling that contributory infringement may be based on actual knowledge or willful blindness, but not negligence; holding that a jury instruction was erroneous to the extent that it provided that Cox could be found contributorily liability if it “should have known” of infringing activity)

• Material contribution / substantial participation

• Flava Works, Inc. v. Gunter, 689 F.3d 754, 757 (7th Cir. 2012) (contributory liability may be found if the defendant engages in “personal conduct that encourages or assists the infringement.”).

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Contributory Liability

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• Vicarious liability

• Right and ability to supervise the infringing activity

• The “control must be substantial and have practical force . . . .” Faulkner v. National Geographic Society, 211 F. Supp. 2d 450, 473 (S.D.N.Y. 2002), aff’d in part, rev’d in part on other grounds, 409 F.3d 26 (2d Cir.), cert. denied, 546 U.S. 1076 (2005).

• Direct financial interest

• Infringing material must be a draw for customers to establish a causal link between the infringing activity and the financial benefit to the defendant.

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Vicarious Liability

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• MGM v. Grokster, 545 U.S. 913 (2005)

• Requires a showing of intent and affirmative steps taken to induce infringement

• J. Souter: “[O]ne who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

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Inducement

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• Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984)

• Safe harbor: no contributory infringement where instrumentality is capable of substantial noninfringing uses.

• Not applicable to inducement cases.

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Sony Safe Harbor

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• The Digital Millennium Copyright Act, 17 U.S.C. § 512, provide an affirmative defense to claims for damages and attorneys’ fees (i.e., liability limitations) against certain “service providers,” as defined by the statute.

• E.g., ISPs, website owners, search engine services, cloud service providers, blogs, portals, storage lockers, social networks, UGC sites, email providers, e-commerce sites 17 U.S.C. § 512 – protects certain “service providers”

• Independent safe harbors:

• (a) Transitory digital network communications initiated by third parties and neither monitored nor copied by the service provider (i.e., transmitting, routing, and providing connections to infringing materials);

• (b) System caching;

• (c) Storage by users (information stored at the direction of a user);

• (d) linking or referring users to infringing material (the “information location tools” limitation) (e.g., indexing, search engines, hypertext links);

• (e) Distribution of teaching materials by nonprofit educational institutions

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DMCA Safe Harbors

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• Threshold “conditions of eligibility”– a service provider cannot directly profit from infringement, and must:

• Adopt, reasonably implement and inform subscribers and account holders of a policy of terminating the accounts or subscriptions of repeat infringers in appropriate circumstances.

• Policy must be published to users, is reasonable “if, under ‘appropriate circumstances,’ the service provider terminates users who repeatedly or blatantly infringe copyright.” Perfect 10 v. CCBill, 488 F.3d 1102 (9th Cir. 2007).

• Accommodate and not interfere with standard technical measures.

• The statute provides that a “standard technical measure” is one that must be accepted by a broad consensus of copyright owners and service providers. 17 U.S.C. § 512(i)(2).

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DMCA Safe Harbors

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• 17 U.S.C. § 512 (c) – material stored “at the direction of a user”

• Notice and takedown

• Designate and register a DMCA agent with the U.S. Copyright office to receive notifications of claimed copyright infringement.

• Registration is online-only (12/31/2017); renew every 3 years.

• Copyright owners must send substantially compliant notices.

• Service providers must expeditiously disable access to or remove material or activity (or links) identified as infringing in substantially complying notifications.

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DMCA – User Storage Safe Harbor

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• A substantially compliant DMCA takedown notification (17 U.S.C. § 512(c)(3)) should include:

• A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed;

• Identification of the work claimed to have been infringed, or, if multiple works at a single online site are covered by a single notification, a representative list of such works at that site;

• Identification of the material that is claimed to be infringing or to be the subject of infringing activity, and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material;

• Information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available, an electronic mail address at which the complaining party may be contacted;

• A statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the owner, its agent, or the law; and

• A statement that the information in the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.

• Failure to provide URLs could potentially render notice deficient. See Ventura Content, Ltd. v. Motherless, Inc., 885 F.3d597 (9th Cir. 2018); Wolk v. Kodak Imaging Network, Inc., 840 F. Supp. 2d 733, 746–47 (S.D.N.Y. 2012).

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DMCA – User Storage Safe Harbor

© 2019 Greenberg Traurig, LLP

• Knowledge and “red flag” awareness

• Safe harbor is conditioned on a service provider not having “actual knowledge that material or an activity using the material on the system or network is infringing” and, in the absence of such actual knowledge, not being “aware of facts or circumstances from which infringing activity is apparent.” 17 U.S.C. § 512(c)(1)(A).

• Capitol Record v. Vimeo, 826 F.3d 78 (2d Cir. 2016) – mere viewing of challenged content by service provider doesn’t create “red flag” knowledge, even regarding “recognizable” copyrighted material.

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DMCA – User Storage Safe Harbor

© 2019 Greenberg Traurig, LLP

• User storage

• Mavrix Photographs v. LiveJournal, 2017 WL 1289967 (9th Cir. 2017) – genuine issue of fact whether material, reviewed by volunteer moderators prior to upload, was material stored by the employee (or moderator) or at the direction of the user.

• Disputed fact over whether moderators were defendant’s agents.

• Ventura Content, Ltd. v. Motherless, Inc., 885 F.3d 597 (9th Cir. 2018 (held that a service provider does not lose safe harbor protection because it screens user-uploaded videos for illegal content such as child pornography and copyright infringement).

• Suggests LiveJournal limited to where a website or service selects what to post.

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DMCA – User Storage Safe Harbor

© 2019 Greenberg Traurig, LLP

• 17 U.S.C. § 512 (a) – narrower definition of service provider; 5 statutory conditions

• Service provider acts as a ‘conduit’ for the communications initiated by third parties. Ellison v. Robertson, 357 F.3d1072 (9th Cir. 2004) (AOL a “passive conduit” under 512 (a)).

• Safe harbor could be lost if a service provider initiates or modifies a transmission.

• See In re Aimster Copyright Litig., 252 F. Supp. 2d 634 (N.D. Ill. 2002), aff’d on other grounds, 334 F.3d 643 (7th Cir. 2003) (writing in dicta that the Aimster peer-to-peer service “modified” content by encrypting all information transferred between users).

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DMCA – Transitory Digital Network Communications

© 2019 Greenberg Traurig, LLP

• 17 U.S.C. § 512 (b) – 8 specific requirements

• Field v. Google Inc., 412 F. Supp. 2d 1106 (D. Nev. 2006) (holding that Google was entitled to the safe harbor created by section 512(b) for caching websites incident to the operation of its search engine, to allow users to access material when an original page was inaccessible, thus providing archival copies of value to academics, researchers and journalists)

• Intermediate and temporary storage

• Not defined; Field v. Google (14-20 days).

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DMCA – System Caching

© 2019 Greenberg Traurig, LLP

• Lori Chang

• Greenberg Traurig LLP

• (310) 586-3863

• ChangL@gtlaw.com

• Lori Chang is a shareholder at Greenberg Traurig, LLP (Los Angeles) and represents clients in mattersinvolving copyright, DMCA, trademark, the Communications Decency Act, and other internet law-relatedissues. She also represents companies in class action suits brought under the Telephone Consumer ProtectionAct, the Electronic Communications Privacy Act, and other privacy laws.

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About the speaker

Fair Use and the Internet

Randy Friedberg, Esq.

White and Williams LLP

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Content is Everywhere

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Common Myths

• If I give credit to the copyright owner, my use is automatically fair use.

• Agence Fr. Presse v. Morel, 769 F.Supp. 2d 295 (S.D.N.Y. 2011) –The court found that attribution does not exculpate unauthorized copying.

• If I post a disclaimer on my video, my use is fair use.

• “Entertainment” or “non-profit” uses are automatically fair use

• If I add any original material that I created to someone else’s copyrighted work, my use is fair use.

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U.S. Constitution:Article1 - Section 8

• The Congress shall have Power:• To promote the Progress of Science and useful Arts, by

securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

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Purpose of Copyright

• [C]opyright is intended to increase and not to impede the harvest of knowledge…The rights conferred by copyright are designed to assure contributors to the store of knowledge of a fair return for their labors.

• …[The Constitution’s grant of copyright power to Congress] “is a means by which an important public purpose may be achieved. It is intended to motivate the creative activity of authors and inventors by the provision of a special reward….” ”The monopoly created by copyright thus rewards the individual author in order to benefit the public.”

Harper & Row, Publrs. v. Nation Enters., 471 U.S. 539, 545-46 (1985) (quoting Sony, 464 US at 429).

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Copyright & The Internet

• Generally Congress and the courts struggle to respond to the legal issues presented by new technology, leaving laws years behind technology.

• Courts must "[a]pply[] the copyright statute, as it now reads, to the facts as they have been developed" even though Congress might ultimately "take a fresh look at this new technology, just as it so often has examined other innovations in the past.” Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, at 456.

• Copyright laws apply to web content, even if only available electronically the work is still in tangible medium.

• All web users should be cautious about downloading, copying, and disseminating web material.

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What is Fair Use?

• The fair use doctrine is an affirmative defense to copyright infringement.

• Fair use lets people use and adapt a copyrighted work without getting the explicit permission of the owner of that work.

• Under the fair use doctrine, it is permissible to use limited portions of a work including quotes, for purposes such as commentary, criticism, news reporting, and scholarly reports.

• There are not specific number of words, number of musical notes or percentage of work that the courts deem as per sefair use.

• Whether a particular use qualifies as fair use depends on all of the circumstances.

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Why do We Need Fair Use?

• Balances creator’s rights with the interests of the public good.

• Provides safeguard from copyright being used as a form of censorship or monopoly.

• Promotes discourse, culture, criticism and education by excepting activities such as news reporting, teaching, parodying, commentating, etc. from copyright laws that would otherwise be infringing.

• Justice Story: “in truth, in literature, in science and in art, there are, and can be, few, if any, things, which in an abstract sense, are strictly new and original throughout. Every book in literature, science and art, borrows, and must necessarily borrow, and use much which was well known and used before.” Emerson v. Davies, 8 F. Cas. 615, 619 (No. 4,436) (CCD Mass. 1845).

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17 U.S.C. § 107

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Fair Use – Purpose of UseFirst Factor Analysis:

• Is the purpose to supplant or replace the original purpose of the copyrighted work? Or does the junior work provide a new original purpose?

• Is the use commercial or nonprofit educational?• Using copyrighted material for monetary gain leans

toward infringement. • Using copyrighted material for a nonprofit educational

purpose leans toward fair use. • Neither are strictly determinative, i.e., a commercially

successful parody can be fair use.

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Fair Use – Nature of UseSecond Factor Analysis:

• Is the work published?• Unpublished works receive greater protection; author should

be able to determine when work becomes public.

• How creative is the work?• Factual works are more likely to be fair use. Copyright protects

expression rather than ideas or facts.

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Fair Use – Amount of Original Work Taken & Substantiality

Third Factor Analysis

• Courts apply a quantitative and qualitative analysis.

• Quantitative: What percentage of the original work was used? • Higher the amount, lower the odds of fair use.

• Was more of the original work taken than was necessary to satisfy a socially beneficial purpose?

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Fair Use – Amount of Original Work Taken & Substantiality

Cont.• Qualitative:

• Was it the “heart” of the work?

• Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985) (“Ford Case”) - A mere 300 word excerpt of a book in a magazine was found not to be fair use because the quote was the “heart” or most compelling main passage of the book.

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Fair Use – Market Effect of Use

Fourth Factor Analysis• Use that adversely affects the market for the original

work is less likely to be a fair use.

• “Whether unrestricted and widespread conduct of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market” for the original. Nimmer § 13.05[A][4], p. 13-102.61 What would the impact of the junior use be if widespread, i.e. if many people engaged in this type of use, would it harm the market for the original owner of the copyrighted work?

• Does the junior use result in lost sales or other financial damage for the owner of the original work?

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The Four Fair Use Factors Applied to the Internet

• Courts have applied the four fair use factors to alleged copyright infringement involving various online materials:• Blogs, websites and other user-generated internet content;• Books, magazines, news articles and other written text;• Photographs, artwork and images;• Audio and visual material; and• Software.

• Internet materials receive no special protection or unique status under copyright law.

• They are subject to the same fair use analysis as other works.

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Judge Leval on Fair Use

• Pierre Leval. Towards A Fair Use Standard, 103 HARD. L. REV. 1105 (1990)

• “Judges do not share a consensus on the meaning of fair use. Earlier decisions provide little basis for predicting later ones… Confusion is not confined to judges. Writers, historians, publishers, and their legal advisers can only pray as to how courts will resolve copyright disputes.”

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Leval's Article

• Leval argues that the degree to which the junior use transforms the original work should be the guiding consideration for fair use. A fair use must employ the quoted matter in a different manner or for a different purpose from the original use.

• A quotation of copyrighted material that merely repackages or republishes the original is unlikely to pass the test; in Justice Story’s words, it would merely “supersede the objects” of the original. If, on the other hand, the quoted matter is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings, this is very type of activity that the fair use doctrine intends to protect for the enrichment of society.

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The “Fifth” Factor: Transformation

• Not listed in statute but supported by Leval and case law.

• “The goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright . . and the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994)

• 2 Live Crew “Pretty Woman” rap song parodies “Oh, Pretty Woman” ballad; intended “through comical lyrics, to satirize the original work . . . .“

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Transformative Use

• Have you transformed the material from the original work by adding new expression or meaning?

• Have you added valuable new understandings, concepts, or visual elements?

• Works that are satirical, scholarly, educational, researched based etc. are transformative.

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Balancing Fair Use Factors

• All factors should be taken into consideration, and the presence/absence of some can reduce/increase the importance of others.

• Greatest factor: How transformative is the junior work?

• Least important factor: What is the nature of the junior work?

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Blogs, Websites and Other User-Generated Internet Content

• Hoge v. Schmalfedt, 2014 WL 3052489 (D. Md. 2014)(unreported opinion) - The court held that the defendant’s use of copyrighted material from plaintiff's blog, e-book and twitter on his own website was fair use.

• Field v. Google, 412 F. Supp. 2d 1066 (D. Nev. 2006) - The court held that to the extent an internet search engine operator distributed copyrighted works published on an author’s website by allowing access to the works through “cached” links, the use was protected by the fair use doctrine in 17 U.S.C.A. § 107.

• Stern v. Does, 134 S. Ct. 423, 187 (2013) - The court held that listserv members made fair use under 17 U.S.C.A. §107 of another listserv member’s post when they forwarded it to the forensic accounting firm mentioned in the post.

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Books, Magazines, News Articles and Other Written Text

• Authors Guild, Inc. v. HathiTrust, 111 U.S.P.Q.2d 1001 (2d Cir. 2014) - Research libraries’ digitalization of copyrighted books to permit full-text searching of the works was held to be a fair use under 17 U.S.C.A. § 107 by the court.

• Authors Guild, Inc. v. Google Inc., 954 F. Supp. 2d 282 (S.D.N.Y. 2013) - The court held that an internet search engine operator that digitally reproduced millions of copyrighted books was not liable for copyright infringement because its conduct constituted fair use of the protected material under 17 U.S.C.A. § 107.

• Righthaven, LCC v. Jama, 2011 WL 1541613 (D. Nev. 2011) (unreported opinion) - The court found that a nonprofit organization’s posting of a newspaper article in its entirety on its website, purportedly to educate the public about the issues contained in the article, constituted fair use as a matter of law under 17 U.S.C.A. § 107.

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Photographs, Artwork and Images

• S&L Vitamins, Inc. v. Australian Gold, Inc., 521 F. Supp. 2d 188 (E.D.N.Y. 2007) - The court held that an unauthorized internet retailer of a copyright owner’s tanning products made fair use under 17 U.S.C.A. § 107 of copyrighted artwork in thumbnail photographs on its website to sell the owner’s tanning products.

• Bouchat v. Baltimore Ravens Ltd. Partnership, 737 F.3d 932 (4th Cir. 2013) - A professional sports league successfully invoked the fair use defense under 17 U.S.C.A. § 107 to permit fleeting and infrequent use of a copyrighted image in video displayed on the internet.

• Rivera v. Mendez & Compania, 988 F.Supp. 2d 159 (D.P.R. 2013) -The court held that the sponsor of a jazz festival could not sufficiently establish fair use of artwork under 17 U.S.C.A. §107 to warrant summary judgment in its favor, where the artwork had been previously licensed but subsequently used without permission on its Web site.

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Audio and Visual Material

• Fox News Network, LLC v. TVEyes, Inc., 43 F. Supp. 3d 379 (S.D.N.Y. 2014) (unreported opinion) - The court held that a media monitoring service that aggregated television news reports into a searchable online database made fair use of a television news company's copyrighted broadcasts under 17 U.S.C.A. § 107.

• Video Pipeline, Inc. v. Buena Vista Home Entertainment, 67 U.S.P.Q. 1705 (3rd Cir. 2003) - According to the court, a video clip compiler did not make fair use of copyrighted movies or their derivatives under 17 U.S.C.A. § 107 by creating its own movie clip previews for commercial use on the internet.

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Software

• Software Freedom Conservancy, Inc. v. Westinghouse Digital Electronics, LLC, 812 F. Supp. 2d 483 (S.D.N.Y 2011) - The court held that it was not fair use under 17 U.S.C.A. §107 for a distributor of liquid crystal display televisions to post a software developer's copyrighted firmware on its website, despite the distributor's claim that the firmware could not be read by humans and had no use or value except when installed on the television model for which it was written.

• U.S. v. Slater, 348 F. 3d 666 (7th Cir. 2003) - Considering whether a criminal defendant in a copyright infringement action was entitled to have the jury instructed on the fair use exception, the court said that it was preposterous to think that 17 U.S.C.A. § 107 authorized internet piracy.

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Confused?

• You’re not alone! The Copyright Office has stated that “the distinction between fair use and infringement may be unclear and not easily defined.”

• Fair use is a complicated and ever evolving area of copyright law.

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Copyright Office Fair Use Index

• The Copyright Office has created a searchable database listing and summarizing court opinions regarding fair use, including by category and type of use (e.g., music, internet/digitization, parody).

• The intent of the database is to provide a variety of judicial decisions to help both lawyers and non-lawyers better understand types of uses courts have previously determined to be fair or not fair.

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Thanks! Randy M. Friedberg, Esq.

friedbergr@whiteandwilliams.com

212-714-3079

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ENFORCEMENT

Current & Recent Battlegrounds

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STEP 1: REGISTRATIONFo u r t h E s t a t e P u b . B e n e f i t C o r p . v . Wa l l - S t r e e t . c om , L L C , 8 5 6

F. 3 d 1 3 3 8 ( 1 1 t h C i r. 2 0 1 7 ) ; 5 8 6 U . S . _ _ _ , 1 3 9 S . C t . 8 8 1 ( 2 0 1 9 )

• In May of 2017 the 11th Cir. dismissed news organization’s copyright infringement claim for failure to satisfy statutory precondition of registering copyrights, holding that infringement actions may be commenced only after an application for copyright registration is either approved or denied by the Copyright Office.

• Circuit split as other circuits (5th & 9th) followed the application rule.

• Supreme Court granted cert. in 2018 and in March of 2019 ruled that a copyright infringement suit must wait until the copyright is successfully registered by the United States Copyright Office

• Note: Foreign copyrights do not require registrations. See 17 U.S.C. § 411(a).

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DMCATakedown Notices

• Sometimes effective to let third parties know they are

promoting infringing goods or content

• Sometimes a neverending game of whack-a-mole

• Sometimes a good way to identify infringers and their

locations (e.g., YouTube counter-notifications)

• Sometimes a good way to get domestic jurisdiction and

venue.

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JURISDICTION AND VENUESubject Matter Jur isd ict ion &

Extraterr i tor ia l i ty

• Infringements that take place “wholly outside” of the United States are not generally actionable.

• Courts have in the past treated extraterritoriality both as an issue of subject matter jurisdiction and as an element of the substantive cause of action.

• The Supreme Court, in Arbaugh v. Y&H Corp., 546 U.S. 500 (2006), clarified that statutory limitations should presumptively be treated as substantive and not jurisdictional, absent clear congressional intent to the contrary.

• Applying Arbaugh to the Copyright Act, the Federal Circuit has since held that extraterritoriality is not limit on a federal court’s subject matter jurisdiction. Litecubes, LLC v. Northern Light Products, Inc., 523 F.3d 1353, 1368 (Fed. Cir. 2008)

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JURISDICTION AND VENUEPersonal Jur isd ict ion & the “Ser ver Test”

• In the 9th Circuit, the “Server Test” makes the hosting computer the situs of direct copyright liability.

• So, the servers that matter are the servers where the underlying direct infringement occurs

• A plaintiff may also be able to determine what third party servers content is delivered through.

• In TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017), the Supreme Court held that, under the patent venue statute, 28 U.S.C. § 1400(b), a defendant “resides” only in the judicial district in which it is incorporated. TC Heartland restricted filing options for patent plaintiffs, its application to the Copyright venue statute, § 1400(a), is unclear.

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Jurisdiction Under Fed.R.Civ.P. 4(k)(2)

• 4(k)(2) provides that jurisdiction may be exercised over a defendant that is not subject to jurisdiction in any State’s courts of general jurisdiction by serving a summons on that defendant, provided that “exercising jurisdiction is consistent with the United States Constitution and laws.” Fed.R.Civ.P. 4(k)(2)(A)-(B).

• Rule 4(k)(2) contemplates a defendant’s contacts with the entire United States, as opposed to the state in which the district court sits. Thus, “while the test of specific jurisdiction under 4(k)(2) involves the same steps as under 4(k)(1), we must consider appellees ‘contacts with the nation as a whole.’” Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1416 (Fed.Cir. 2009).

• Michael Grecco Prod., Inc. v. Netease, Inc., 3:19-cv-01852-VC (NDCA 2019): Motion to dismiss for lack of jurisdiction brought by Chinese Media conglomerate Netease denied under 4(k)(2) based on allegations in the complaint that

• (1) Netease has tens of millions of users in the U.S. accessing its sites per quarter,

• (2) Netease contracted with a California-based company that operates servers throughout the United States to enable U.S. users to access the sites,

• (3) Netease is registered to do business in Delaware, on the NYSE, and has investor relations offices in NY, and

• (4) Netease has a wholly owned subsidiary based in California.

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DAMAGESStatutor y Damages

• 17 U.S.C. § 504(c) permits plaintiff to elect statutory

damages at any time before final judgment

• Between $750 and $30,000 for innocent infringement

• Up to $150,000 for willful infringement

• Costs and attorney’s fees available. § 505

• Pre-infringement registration required (even for foreign

copyright holders)

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DAMAGESActual Damages

L e ona rd v . S t em t e c h I n t e r n a t i o n a l , I n c . , 8 34 F. 3 d 376 ( 3d C i r. 2 016 ) .

• Andrew Leonard is a photographer who uses electron microscopes to photograph bacteria, viruses, etc.

• At trial, Leonard’s expert testified that a “benchmark” reasonable license fee for similar uses would be between $1,277.10 and $2,569.46

• But, the trial court permitted the jury to consider a multiplier, given the rarity and exclusivity of Leonard’s photographs.

• On appeal, the Third Circuit affirmed.

Presented by: Stephen M. Doniger, Doniger / Burroughs (Venice, CA)

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DAMAGESDMCA Damages

• 17 U.S.C. § 1203 permits plaintiff to elect statutory

damages in the amount of:

• Between $200 and $2,500 for violations of § 1201

• Between $2,500 and $25,000 for violations of § 1202

• Costs and Attorney’s fees are also available

• No pre-infringement registration requirement

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