Ninth Circuit Clarifies that “Willfully” Means “Willfully”
I think most people know that there is such a thing as criminal copyright infringement, i.e., copyright infringement so heinous that the U.S. government will take time from investigating drug deals to investigate the copyright infringement. How heinous? So heinous that even Jammie Thomas-Rasset, who was found liable for allowing 24 song files to be downloaded via a peer-to-peer network, and was found liable for hundreds of thousands or millions of dollars in damage (depending on which jury you ask)—even she did not do something heinous enough. I mean, it really has be terrible, terrible, terrible. Like, industrial-scale terrible.
Actually, that’s technically an exaggeration (though it’s true as to Thomas-Rasset). As a practical matter, the FBI and U.S. attorneys prefer to expend their limited resources on truly large-scale operations*, the law only has two additional requirements that make garden-variety civil infringement into criminal infringement. First, the act of infringement must be committed “willfully.” Second, it must have an economic motivation.**
* Generally speaking, in criminal law, the trend has been to making more and more things illegal (and increase the punishment), then leave it up to prosecutors and police to decide whether … Read More»
Oh, Those Pesky, Pesky Employees!
From a legal* point of view, hardly anything good ever comes out of the employer-employee relationship**, when you think about it. Wrongful termination suits, reams of paperwork to create a “paper trail” to counter wrongful termination suits, making oral promises the company can’t keep, entering into contracts the company isn’t aware of, getting into accidents in the course of their employment (and making the company liable), and so on and on.
* Of course, hiring is based on need. Nobody ever said, “Oh, I’m really desperate for some help, and there’s lots of it, but I’m afraid of the legal ramifications!” Which isn’t to say there aren’t transaction costs to hiring employees.
** The one exception I could think of: works created by employees in their course of their employment are considered to have been created by the employer. Not that this “work made for hire” doctrine isn’t without controversy.
We can add one more thing to the list: when your employees are using a service that your company provides. Let’s say your company is in the business of hosting and publicly performing uploaded content, which might or might not infringe copyright. And let’s say … Read More»
On the Importance of Knowing Just Enough
As we all know by now (quick primer here), the DMCA safe harbor is a marvelous, marvelous thing for internet-related system operators—not just YouTube, but any website that interacts much with its users—but that marvelous protection can be lost if you’re not careful. One way to lose it is to have actual or “red-flag” knowledge of infringing activity on the network. The tendency among service providers, therefore—and something of a perverse incentive—is to remain as ignorant as possible of user activities on the system, unless forced to pay attention via a DMCA takedown notice.
Upload, Infringe, Repeat
But, as the recent Hotfile case demonstrates, complete ignorance isn’t good for your DMCA safe harbor. That’s because you have to promulgate and reasonably implement a policy that terminates repeat infringers. The Hotfile court held that implementing a repeat-infringer policy involves collecting some information.
As I’ve explained here, here and especially here, these repeat-infringer requirements raise several difficult questions that have not be adequately addressed by the courts. In Hotfile, the main question was: what is the minimum you have to do to have “reasonably implemented” a repeat-infringer policy? Folded into … Read More»
Yes, if You Hired Someone to Design it for You.
Remember when Second Life was all the rage? I’ll admit that my memory is a little hazy, but I swear it was a huge deal a few years ago. Anyway, it’s still around, with a new slogan: YOUR IMAGINATION, YOUR WORLD.* If you’re not familiar, Second Life is an interactive virtual world that emphasizes the creation of virtual lands, complete with topography, buildings, etc. Subscribers operate avatars that may move through and interact with these worlds.
* Judging from this promotional video: ALSO BOOBS. Seriously.
Subscribers can also purchase virtual land and “terraform” it—i.e., give it mountains, forests, buildings, beaches, caves—to their liking. These lands can be private—i.e., cut off except for those specifically invited—in which case they’re called “islands.”
In this post, I’ll be discussing a recent decision in a lawsuit about whether terraformed virtual “islands” are copyrightable. More practically, the lawsuit is an object-lesson how badly things can go when copyright is involved in what appears to be “just a business transaction.”
Prelude to an Accidental Copyright Dispute
A teacher (we’ll call her the Teacher) working for a particular school district (we’ll call it the District) … Read More»
The Mysteries of Copyright Ownership
If there were a goldmine in your town—one that produced a worthwhile amount of gold every year and wouldn’t run out for many, many years—you’d probably expect any dispute about who owns it to have long since been resolved. It’s true that the folks you sell you real estate might not actually own it, which is why you buy “title insurance,” but real estate transactions are pretty well-recorded, so such awful surprises are pretty rare, which is why anyone would dare to offer “title insurance.” At a minimum, you wouldn’t expect two different people to be mining the gold without, you know, their coming to blows.
But this sort of thing happens with copyrights and royalty streams with surprising frequency. It can be very difficult to tell how owns a copyright. Copyrights can be sold just like real or personal property can, but you don’t need to record the sale anywhere.* True, transfers of copyright have to be in writing, but many industries that deal with copyright—I’m looking right at you, music industry—suck at keeping records.
Jamaica, where, apparently, they didn’t do paperwork in the 1960′s.
Copyright ownership vests initially in the author, or maybe … Read More»
BitTorrent Swarm ≠ “Transaction or Occurrence”
I used to blog about BitTorrent lawsuits quite a bit, but dropped that in favor of folks who blogged about them much more comprehensively. But there was one BitTorrent lawsuit that I’ve been following pretty carefully because it’s in Tennessee: Dragon Quest Productions, LLC v. Does 1-100, Case No. 3:12-cv-597. The judge* in that case has just severed the case from one case with 100 defendants, to 100 cases with one defendant each. And that’s pretty significant.
* I’m linking to the magistrate’s “Report and Recommendation,” but the judge accepted it in full.
A quick primer about BitTorrent lawsuits. Usually, the plaintiff is the owner of the copyright in either (a) a pornographic film, or (b) a non-pornographic film that didn’t do so well at the box office.* Dragon Quest LLC is definitely in the latter category, its movie, Age of Dragons, having bombed at the box office, despite somehow starring Danny Glover. In either case, the idea is to settle with as many defendants as possible for what lawyers call “nuisance value,” the amount the defendant is willing to pay to avoid the expense and hassle of … Read More»
Lawyers Sue Too Much, Except When They Don’t
Last week, I discussed the scary court decision, Universal Furniture Int’l, Inc. v. Frankel, in which the owners of a company were found liable for their company’s copyright infringement, even though they were not defendants in the original lawsuit against the company. The copyright owner sued the company and won, and then, when the company filed for bankruptcy, the copyright owner filed a separate suit against the owners. As I explained, if the company is small enough, the owners will be too close the acts of infringement to avoid personal liability. To the court, the only question was whether the copyright owner had to re-prove the copyright infringement. The court held that it didn’t have to because the exact same acts of infringement were involved.
So how does one explain Burberry Ltd. v. Horowitz? In that case, Burberry, the well-known clothing manufacturer, brought an action for trademark infringement against a company called Designers Imports, on grounds that Designers Imports was selling counterfeits of Burberry’s clothing. The court agreed, found Designers Imports liable for $1.5 million, and issued an injunction. Somewhat later, Burberry sued one Asher Horowitz for exactly the … Read More»
Since Aaron & Sanders is in the business of (among other things) helping start-ups get started up, one of the most frequent questions Tara and I get is whether it was worthwhile to incorporate or form some similar corporate entity, such as an LLC. The short answer is it depends on (1) whether you will need to be entering in any scary contracts (i.e., if you breach it, will you be personally devastated?), and (2) how many owners would there be (a single owner is about ten times easier and cheaper to form than two owners, then it get more complex and expensive from there).
It’s well known that corporate entities “protect” the owners somehow, but there is often some confusion about what the owners are protected from. Corporate entities protect against contract liability only, and even then, only if you are clear it’s your company and not you who is forming the contract.* And, only if you have been treating your corporate entity as something separate and apart from you (otherwise, the contract creditor can “pierce the corporate veil” and reach your personal assets).
* I.e., In the part where it says who … Read More»
Common-Sense Decision Is a Trap for the Unwary (and Everyone Else)
A surprisingly fertile field for litigation are “multiple listing services” (MLS) and related real-estate websites. Here’s an MLS for Nashville. The Internet completely inverted the information-relationship between real estate agents and prospective buyers. It used to be that the agents’ main advantage was knowledge of what was for sale, but thanks to MLSs, this information is easily accessible. The very powerful National Association of Realtors jealously guards the trademark rights to MLS (to the extent they even exist)*.
* I know this from personal experience, as I have represented two real estate agents who had the temerity to use MLS in one of their domain names. Did you know that Realtor associations have their own highly complex dispute-resolution and enforcement procedures, completely with their own rules of procedure? I was honestly impressed.
This information is obviously of tremendous value, but protecting it is tricky. Data can’t be protected by copyright. Even if “hot news” is a thing, this data isn’t “hot news.” You can place the data behind a wall, but how is the public supposed to access it? You can place anti-scraping language into your terms of … Read More»
Insert Pun Here: “Dead,” “Requiem,” “Past,” “Woody”
A lot of people breathed a huge sigh of relief when a Mississippi federal judge dismissed (at the pleadings stage) claims for copyright infringement stemming from a paraphrase of a well-known William Faulkner quote in a Woody Allen movie. Then a lot of people scratched their heads at the basis: fair use, not something like de minimis (i.e., too short to be actionable)?
The allegedly infringing quote from the movie, Midnight in Paris, is: “The past is not dead. Actually, it’s not even past. You know you said that? Faulkner, and he was right. And I met him too. I ran into him at a dinner party.”
The quote from the Faulkner novel, Requiem for a Nun, one of the Yoknapatawpha novels*: “The past is never dead. It’s not even past.”
* The judge is clearly a much bigger fan of Faulkner than I am. I tried reading The Sound and the Fury in high school and haven’t been back since.