Jonathan Pink — Entertainment, Internet and New Media Partner at Lewis Brisbois, LLP Rotating Header Image

MGM Takes a Beating

Remembering now that I had wanted to mention to you the Supreme Court’s recent copyright ruling in Petrella v. MGM.

The case is just out last week and quite important. It involved the heir to one of co-writers of the three works giving rise to the film “Raging Bull.” I say three works because first there were 2 screenplays (one in 1963 and the other in 1973), and then there was a book (written in 1970). Each work was governed by the 1909 Act, so they required renewal. Under that Act, as the Court held in Stewart v. Abend, if the original author died prior to renewal, his/her heir could renew and recapture all copyright interest unburdened by any assignment previously made by the author.

That’s what happened here. Petrella’s dad had co-written the works with Jake LaMotta, and dad/Jake had entered into deal with UA (a subsidiary of MGM). After her dad died, Petrella renewed the copyright in the ’63 screenplay (but blew the deadline for the other works). She renewed in 1991, and although she contacted MGM and said they were violating her copyright by promoting the film, repackaging, distributing it etc., she didn’t bring her action for copyright infringement until 2009. This was in part because – as she put it – she was waiting for the film to make some money.

MGM moved for summary judgment on the ground Petrella waited too damn long to file suit (and that it had incurred expenses, as a result of that delay). The district court granted MGM’s motion and the appellate court affirmed. MGM expected a slam dunk at the Supreme Court hearing; it had top guns doing its bidding and they did well at oral argument.

The Court surprised them. It held that laches cannot be invoked as a bar to a claim for damages brought w/I the Act’s 3-year window (even where, as in this case, action was filed nearly 2 decades after accrual of claim), although it said that laches may be available to curtail equitable relief at the outset of the litigation. The Court also noted that if Petrella had engaged in any fraud with respect to promising not to file a claim for purposes of luring UA/MGM into investing in the film (something they found had not occurred), MGM could have asserted a defense of estopple.

This case gives us an important copyright ruling as laches had previously been permitted in copyright actions. It’s also important given the Court’s reasoning: e.g., that by permitting a successful plaintiff to gain retrospective relief of only three years back from the time of suit, the copyright statute of limitations itself takes into account the penalty for any delay. Also, it said that laches originally served as a guide when no statute of limitations controlled, which was not the case under the current Copyright Act.

Hope this is helpful.

Jonathan Pink co-Chairs the Entertainment Group at Lewis Brisbois, a national law firm with nearly 1000 attorneys. He is resident in the firm’s L.A. office, and can be reached at jonathan.pink@lewisbrisbois.com.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

Zombie Concerts

So I’m thinking of presenting a talk about the copyright/right of publicity interplay. Think the Tupac hologram at Coachella from a few years back, or the more recent Michael Jackson appearance, using similar post-mortem technology.

These appearances are interesting to me because of the interplay between copyright and right of publicity. Consider copyright first. As it applies here, the US Copyright Act covers the image(s) from which the hologram was created, the hologram, the sound recording of the work the holographic image is performing and the underlying musical composition on the work. And of course different owners own different elements. The creator of the hologram likely owns the rights to it, but not to the underlying images. The record label likely owns the sound recordings used, but the song writer likely owns all – or at least 50% — of the underlying musical composition (with the publishing company likely owning the other half).

The right of publicity is also implicated. While it differs from state-to-state, that right gives all people, famous or not, the right to control the commercial use of their name, image, likeness, and identity. California permits these rights to survive for 70 years after death. Unless assigned, those rights pass like other property. In the case of Tupac, they went to Amaru Entertainment, a company formed by his mother to manage her son’s image.

Tupac was the first to give a post-mortem performance, and now we have Michael Jackson (giving a whole new meaning to his Thriller video). Others are scheduled to follow Elvis, Marilyn Monroe. She will be interesting given the loss of her post-mortem rights of publicity. But the images of her are still protected by copyright law (e.g. the source of the images), so permission will still be required.

It will be interesting to see if more of these zombie performances creep up. I can imagine going to my local bar and seeing Sinatra perform. Maybe they’ll become as ubiquitous as karaoke. If so, my guess is that formalities will slip and copyright/right of publicity permission will not always be obtained. To quote a big music client of mine when I mentioned to him a recent music copyright case I’d handled: “Huh, imagine that happens in our industry!”

I for one found the Tupac event pretty thrilling, but the Michael Jackson redoux a bid of a yawn. Really, a holographic performance by a deceased artist? I might as well watch old film footage of a performance at that point. Well, to a point anyway. I suppose even I would catch the Beatles if they happened to play my neighborhood pub. After all, it raises some really good IP issues and, more fundamentally, points out that death isn’t forever . . . it’s only until your next concert.

Jonathan Pink is Co-Chair of the Entertainment Group at Lewis Brisbois, resident in the firm’s Los Angeles office. He can be reached at 213-580-6312 or at jonathan.pink@lewisbrisbois.com.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

A Debt of Gratitude to Southwestern

I received a request through LinkedIn to write a review of my law school, Southwestern. Just wrote/posted it and thought I’d share a copy with you. It is here:

I have a great fondness for, and owe a debt of gratitude to, Southwestern. I also have a unique perspective with respect to the legal education it offers as my wife was a law student at UCLA at the same time I attended Southwestern.

Southwestern took a chance on me when most other schools saw little to recommend me, a film school graduate who tired of fruitless studio pitches and unfulfilled TV-staff writer promises. It embraced and welcomed my creativity, my non-traditional pre-legal education, and its outstanding professors created real (and long-lasting) relationships – and did not simply regard me as another dollar in the door or seat filler.

Southwestern provided me with a solid, engaging, intellectually invigorating and challenging curriculum. It allowed me the opportunity to obtain a deep understanding of black letter law and its underlying public policy. An active faculty taught me to craft persuasive legal arguments, argue cases, draft strong documents and provide the highest quality of legal representation. The school provided the strategic guidance and practical training I needed to build a vibrant career, generate Fortune 500 clients and practice at some of the world’s leading law firms. Southwestern not only allowed me to transition from film maker to lawyer, it gave me the tools I needed to succeed.

Because my wife attended UCLA Law at the same time, I had the opportunity to directly compare these two schools. To my surprise, the differences were relatively slight. Both had bright students, superb professors and outstanding resources. While it is undeniable that UCLA is a world-class institution, it is also true that Southwestern is too often overshadowed by its L.A. based, university-affiliated brethren. My prediction is that this will change. UCLA or Southwestern? Differences, sure, but they are not as clear cut as you might think. Anyone who has the opportunity to truly compare Southwestern as I did will find that it is a too-often-overlooked gem. And I am thankful for that.

Jonathan Pink is Co-Chair of the Entertainment Group at Lewis Brisbois in Los Angeles. He can be reached at 213-580-6312 or at jonathan.pink@lewisbrisbois.com

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

Are the Copyright Laws Out of Sync with Technology? A Guest Post by Alex “A-Rex” Nguyen

The following is a guest blog written by one of my IP Survey students, Alex “A-Rex” Nguyen. The background on this is Alex had to miss one of our a classes, and asked what he could do as “make up.” I suggested writing a guest blog post on the copyright topic we were to discuss. Here, unedited, is Alex’s guest blog:

There’s no doubt we’ve made revolutionary technological advances in the past couple decades. The leaps and strides in technological progress has exponentiated access to information on a global scale. Today, anyone with a smart phone and a mobile broadband package has a database of infinite knowledge within the palm of their hands. . . literally. However, an inverse correlation exists between technological advancement and the ability for copyright law to protect intellectual property owners. The greater technology grows, the less copyright laws are able to adequately protect copyright owners against infringement.

The ultimate purpose of copyright law is to “ultimately serve the cause of promoting broad public availability of literature, music, and the other arts.” Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984) Congressional copyright legislation seeks to strike a “difficult balance between the interests of authors and inventors in the control and exploitation of their writings and discoveries on the one hand, and society’s competing interest in the free flow of ideas, information, and commerce on the other hand, our patent and copyright statutes have been amended repeatedly.” Id.

With technology constantly developing, the free flow of information and the public availability of artistic works also continues to expand. Public access to information is currently at its pinnacle and continues to reach new peaks. However, unhindered and open access to information comes at a cost – to which copyright owners must bear. Technologies such as third party video hosting websites, which arguably “promote broad public availability” of artistic works, ultimately derogate “the immediate effect of copyright law . . . to secure a fair return for an [artist’s] creative labor.” Id. at 432. Gabriel J. Michael describes these technologies as “disruptive technologies” in his academic article, Anarchy and Property Rights in the Virtual World.

Disruptive technologies conduce insecurity in an artist’s capacity to procure a just financial reward. In theory, these technologies are “capable of commercially significant noninfringing uses.” Id. at 443. However, in reality, these technologies are actually “good for nothing else but infringement.” MGM Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 932 (2005). An incalculable number of consumers, all over the world, use these technologies for the sole purpose of infringement.

So what can copyright owners do to fend off the widespread onslaught of disruptive technology-based infringing activities? [pause for dramatic effect] That’s right – sue.

But wait – waging an all-out Salem reminiscent witch hunt against consumer-infringers is nonsensical because individual consumer-infringers are virtually judgment proof, most of whom lack the financial means to foot the bill arising from copyright infringement litigation. Since litigating against individual consumer-infringers is neither worth the time nor expense, are copyright owners SOL? Not if copyright owners go after the providers of the disruptive technology (i.e. the means used to infringe) under the judicial doctrine of secondary liability.

Secondary liability comes in two forms: (1) contributory liability and (2) vicarious liability. Contributory infringement involves intentionally inducing or encouraging direct infringement. Id. at 930. Vicarious infringement involves profiting from direct infringement while declining to exercise a right to stop or limit infringement. Id.

Disruptive technology providers can be pegged as either contributory or vicarious infringers. Disruptive technology providers can induce or encourage direct infringement with relative ease, like bombarding an unsuspected internet patron with a bunch of surreptitiously placed and strategically timed pop-up advertisements reading “CLICK HERE TO DOWNLOAD AND/OR STREAM [enter favorite celebrity sex tape copyrighted work here] FREE NOW.” Who wouldn’t click on that? Although the world economy is currently in a state of recovery, I’m unaware of many consumers who’d pass up an opportunity for the quasi-proverbial “free lunch.” Such an overt act of advertising in an effort to induce or encourage internet patrons to infringe warrants finding liability under the doctrine of contributory infringement.

Further, disruptive technology providers can effortlessly profit from direct infringement while declining to exercise a right to stop or limit infringement. For instance, third party video streaming websites offer soon-to-be-consumer-infringers the option to pay a subscription fee for ridiculously fast video streaming. Third party streaming websites can also passively profit merely by selling ad space to other not-so-reputable businesses, in the event individual consumer-infringers choose to forego lightning fast video streaming for a choppier video streaming experience. Moreover, despite such rampant ongoing infringement, these websites do little to limit direct infringement by consumers. Taking down one copyrighted work upon request does not change the fact that voluminous copies of that exact same copyrighted work remains fully functional elsewhere on the same website. Effective pre-trial discovery would reveal “evidence [that] goes beyond [the website’s] characteristics or the knowledge that it may be put to infringing uses” to support vicarious liability. See Id. at 937.

Although at first glance the doctrine of secondary liability appears to be an adequate legal measure to protect copyright owners from infringement, most disruptive technology providers operate outside the U.S., which diminishes the secondary liability doctrine’s impact in curbing infringement. The U.S. copyright laws are not so far-reaching as to extend beyond the U.S. border.

Despite the inefficacy of U.S. copyright laws to combat ongoing infringement occurring off American soil, all hope is not lost. The solution need not lie in law. Creators themselves can effectively defend against copyright infringement by producing innovative products and services that not only compensate copyright owners for their work but also provide additional value to consumers. Amazon.com’s Amazon Prime Paid Membership Service is a prime (no pun intended) example. Amazon Prime subscribers pay a fee and receive free 2-day shipping a whole slew of items as well as unlimited streaming of tens of thousands of movies & TV episodes. To top that off, Amazon Prime subscribers also have access to a library of 350,000 Kindle titles. And, in turn, copyright owners get paid for licensing their creative works to Amazon.com.

Providing additional value to consumers through innovative products and services: (1) incentivizes consumers to pay to enjoy copyrighted works; (2) ensures copyright owners get paid for their creative endeavors, (3) facilitates public availability of artistic works and (4) promotes further technological advancement. In sum, everybody’s left satisfied.

[Thanks, A-Rex!]

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

And Now . . . to East Coast for a Look at The Second Circuit’s Approach to the DMCA

Yeah, I know Viacom v. YouTube has been covered before. So go do something else if you’re already hip to all that case had to say. Go on . . . get back to the work you should be doing.

Well, despite the fact that the ruling came out last year, I recently had the opportunity to look at it again in preparation for case I’ll be defending out in New York. Why do these cases always come on the cusp of winter? Just to help me appreciate how nice it is here in California, I suppose.

In any event, my recent review of the Viacom case provides me with this opportunity to write a follow-up to my earlier post re the Digital Millennium Copyright Act’s (DMCA) “safe harbor” provision. So sit back and waste a little more time.

As we’ve discussed, that provision provides immunity to “any entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received” provided certain dictates are followed. 17 U.S.C. § 512(a); see also UMG Recordings, Inc. v. Shelter Capital Partners 667 F.3d 1022 (9th Cir. 2013).

As you’ll recall, UMG Recordings provided the Ninth Circuit with multiple opportunities to reaffirm its long-held position that the “safe harbor” provision is to be applied broadly and liberally. In that case, the Court stated, among other things, that:

• Section 512(c)(1)(A)’s requirement that the service provider have neither “actual knowledge” of the infringing material nor a general awareness of “facts or circumstances from which infringing activity is apparent;” the mere hosting of copyrightable content with the general knowledge that the service could be used to share infringing material will not suffice to meet the actual knowledge requirement under § 512(c)(1)(A)(i); and

• Even with respect to a “red flag” awareness under Section 512(c)(1)(A)(ii), service providers are not responsible for investigating whether material is infringing; the burden of demonstrating infringement rests with the copyright holder, and no assumption to the contrary will be implied.

The UMG Recordings holding was issued at about the same time as the Second Circuit issued its ruling on the same topic in Viacom International, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012) – and indeed it was the Viacom case that caused the Ninth Circuit to revisit its prior ruling.

In Viacom, the Second Circuit issued a ruling that addressed that portion of Section 512(c) that provides a service provider is not liable where it (1) does not have “actual knowledge” of infringing material; and (2) is unaware of “facts or circumstances from which infringing activity is apparent.” 17 U.S.C. § 512(c)(1)(A). As to the latter, the Court held that willful blindness is sometimes equivalent to such knowledge ( 676 F.3d 19, 34-35), and that § 512(c)(1)(B) places a service provider outside the safe harbor if it has “substantial influence” over the user activities from which it benefits. Id. at 38.

Viacom involved a dispute that arose out of YouTube’s hosting of material, much of which infringes third-party copyrights, some of which are held by Viacom and other major studios and networks. Viacom alleged, among other things, that YouTube made a practice of being willfully blind to such infringement, and that such willful blindness deprived YouTube of any safe protection it might otherwise be entitled to under § 512(c). The lower court disagreed, but the Court of Appeals issued a more narrow ruling. Specifically, it took aim at the § 512(c) safe harbor provision absolves service providers of direct or secondary liability for infringement “by reason of the storage at the direction of a user of material” conditioned on the provider not having “actual knowledge” of infringing material or “aware[ness] of facts or circumstances from which infringing activity is apparent,” thus compelling the service provider to “act[] expeditiously to remove . . . the material.” § 512(c)(1)(A). Significantly, the “aware of” provision is also known as the “red flag” provision. Viacom, 676 F.3d at 31.

The Viacom court held that, with respect § 512(c)(1)(A)’s provision regarding knowledge or awareness of specific acts of infringement, while evidence that YouTube knew of the prevalence of infringement was insufficient to invoke the “red flag” rule, YouTube’s internal emails discussing specific infringing clips might well have created a genuine issue of material fact. Viacom, 676 F.3d at 33–34. With respect these emails, however, the Court said that willful blindness may constitute actual knowledge under § 512(c)(1)(A). Id. at 34.

The court defined “willful blindness” as occurring where one “was aware of a high probability of the fact in dispute and consciously avoided confirming that fact.” Id. at 35 (quoting United States v. Aina-Marshall, 336 F.3d 167, 170 (2d Cir. 2003)). It rejected YouTube’s argument that the no-monitoring provision of Section 512(m)(1) nullified the well-recognized common law principle of willful blindness, stating that nothing in the DMCA specifically spoke to that doctrine. Id. at 34-35. It found that §512(m)(1) merely required judges to avoid imposing a monitoring requirement when applying the willful blindness doctrine. Id. at 35. Thus, while it appears that the no-monitoring rule limits in some way the application of willful blindness in the Second Circuit, the Viacom court failed to state precisely how it does so.

Nonetheless, it did provide some guidelines regarding willful blindness in general: consistent with how other courts have applied this doctrine to other federal statutes the Court suggested that an application of this doctrine will follow the well-established two-part analysis: (1) did the defendant have a subjective belief as to a high probability that a specific fact existed; and (2) did the defendant take deliberate actions to avoid learning of that fact. See Viacom, 676 F.3d at 35; see also Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2070 (2011); In re Aimster Copyright Litig., 334 F.3d 643, 650 (7th Cir. 2003). Obviously, this is a fact-specific analysis , but at the very least the Court appears to have recognized that § 512(m)(1) does not depend on “monitoring its service or affirmatively seeking facts indicating infringing activity.”

Also significant from the Viacom case: the Court commented on the meaning of the phrase “right and ability to control” from Section 512(c)(1)(B). In reversing the district court’s holding, it held that “requires something more” than ability to block content but something less than absolute knowledge of specific acts, such as “exerting substantial influence on the activities of users.” 676 F.3d at 38 (citing Capitol Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627, 645 (S.D.N.Y. 2011); c.f. UMG Recordings, Inc. v. Shelter Capital Partners LLC, supra. But it also said that, for safe harbor protections, where the service provider does have “the right and ability to control” the infringing activity, it must not “receive a financial benefit directly attributable” to the activity. Thus, contrary to the Ninth Circuit’s dismissal of the UMG case, it is significant that in Viacom, the Court held that the right and ability to control the infringing activity need not require knowledge of specific infringements.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

A Cool Music Blog

My friend, Ren Hayhurst, writes a cool music blog. I liked it and I think you might, too. Here’s a link: http://rrhmusicfreaks.blogspot.com. Enjoy. JP

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

One More Comment About UMG Recordings, Inc. v. Shelter Capital Partners

 Yeah, I know a lot has been written about UMG Recordings, Inc. v. Shelter Capital Partners, the Ninth Circuit’s reaffirmation of the “safe harbor” provision found in the Digital Millennium Copyright Act (the “DMCA”). I recognize that I have nothing new to add, but because I had the opportunity to revisited this issue recently, I figure why not post it here. 

 In this case, the plaintiffs sued Veoh Networks, Inc. (“Veoh”), alleging direct, vicarious and contributory copyright infringement (as well as inducement to infringe) because Veoh operates a website that allows users to upload videos, something UMG called “mass infringement.” Veoh’s defense principally based on the DMCA, and indeed it moved for summary judgment arguing it was protected by Section 512(c)’s safe harbor provision. That section provides a service provider is not liable for infringement “by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by the service provider if the service provider”: (1) does not have “actual knowledge” of infringing material; (2) is unaware of “facts or circumstances from which infringing activity is apparent;” or (3) acts expeditiously to remove or disable access to infringing material upon gaining such knowledge or awareness. 17 U.S.C. § 512(c)(1)(A). It also provides, however, that where seeking such protection, if a service provider has the right and ability to control the infringing activity, it cannot receive any financial benefits directly from that activity. Id. at (c)(1)(B). Finally, for the safe harbor to apply, the service provider must promptly remove – or take down – the allegedly infringing material upon notification of a claimed infringement made pursuant to the Act’s “takedown” request procedures. Id. at (c)(1)(C).

 Against this statutory backdrop, the district court granted Veoh’s motion for summary judgment, holding that the website had met all requirements of Section 512(c), and therefore qualified for the safe harbor protection. UMG appealed, arguing that that Veoh did not qualify because: (1) the alleged infringing activities did not fall within the meaning of “infringement of copyright by reason of the storage [of material] at the direction of a user;” (2) genuine issues of fact remained as to whether Veoh had actual knowledge of infringement or was aware of “facts or circumstances from which infringing activity [was] apparent;” and (3) evidence had established that Veoh received a financial benefit from the infringing activity and had the right and ability to control it. The Ninth Circuit affirmed the grant of summary judgment, finding that the DMCA protected Veoh as a service provider under 17 U.S.C. Section 512(c) for content placed on its system (or network) at the direction of its users (as opposed content placed there by Veoh itself).

 This decision makes clear the Ninth Circuit’s position that the DMCA’s “safe harbor” provisions are to be read broadly so as to allow for a free flow of information on the Web. Reviewing the Court’s holding, we learn that:

 • The “by reason of” language contained in Section 512(c)’s statement that the allegedly infringing activity “must constitute infringement by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider” (17 U.S.C. § 512(c)(1)) must not be read so narrowly as to mean that the infringing activity must be proximately caused by the mere storage of infringing content before the safe harbor protection will attach. That narrow reading is inconsistent with the language and intent of the statue, which would be rendered superfluous if Section 512(c) did not protect providers who facilitate “access” to the allegedly infringing works.

 • With respect to Section 512(c)(1)(A)’s requirement that a service provider must have neither “actual knowledge” of the infringing material nor a general awareness of “facts or circumstances from which infringing activity is apparent;” and that it act expeditiously to remove or disable access to infringing material upon gaining such knowledge or awareness, merely hosting material that falls within a category of content capable of copyright protection, along with a generalized knowledge that services could be used to share unauthorized copies of copyrighted materials, will be deemed insufficient to impute knowledge. Again, if this were not the case, the safe harbor provision would be rendered meaningless. Therefore, merely hosting a category of copyrightable content with the general knowledge that one’s services could be used to share infringing material will not suffice to meet the actual knowledge requirement under § 512(c)(1)(A)(i) under the holding of this case.

 • With regards to “red flag” awareness under Section 512(c)(1)(A)(ii) (e.g. where the service provider had or should have had constructive knowledge of infringement), the Ninth Circuit said quite clearly that service providers are not responsible for investigating whether material is infringing; the burden of demonstrating infringement rests with the copyright holder. A word of caution, however, the Court did say that a service provider cannot “bury its head in the sand” to avoid obtaining knowledge of infringement. However, where there is no evidence to suggest that the defendant acted in such a way, no assumption to the contrary will be implied.

 • Where notice of such infringement comes from the copyright holder, the latter is required to comply with the notification requirements of Section 512(c)(3).

 Finally, the Shelter Capital case addressed that portion of Section 512(c) which says that, in order to qualify for safe harbor provision, a service provider that has the “right and ability to control” infringing activity must not receive a financial benefit directly attributable to such infringing activity. 17 U.S.C. § 512(c)(1)(B). Relying on that provision, UMG argued that Veoh had the “right and ability to control infringing activity” and therefore did not qualify for the DMCA’s safe harbor. In making this argument, it relied on the Ninth Circuit’s holding in A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001), which held that, for the purpose of finding vicarious liability, a defendant “has the right and ability to supervise” infringing activity where that defendant can locate infringing content and terminate users’ access to the content. However, the Ninth Circuit rejected this argument for several reasons:

 (1) because Section 512(c) does not mention the term “vicarious liability,” thus rendering Napster inapplicable;

 (2) the phrase “right and ability to supervise” (as used in Napster) is different than the phrase “right and ability to control” (as used in Section 512(c) because the word “control” connotes more of an “ability to command” than does the word “supervise”;

 (3) Section 512(c) presupposes that a service provider has the ability to locate infringing content and terminate users’ access as it provides that – in order to qualify for safe harbor protection – it must “remove[] or disable access” to infringing material when it becomes aware of it; and

 (4) because statements Congress has made regarding this Act explicitly state that it intended to protect qualifying service providers who would otherwise be subject to vicarious liability.

 Based on the foregoing, the Court held that, in order to establish a service provider has the right and ability to control infringing material, Section 512(c) requires “something more” than the mere ability to locate infringing material and terminate users’ access. This requires that the service provider must “exert[] substantial influence on the activities of users.” While the Court did not provide a specific definition of what is meant by “substantial influence,” it said such influence may include high level of control over activities of users, or “purposeful conduct” (as was seen in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 912 (2005)).

 The take away from Shelter Capital is that in order to enjoy the inoculation provided by Section 512(c), service providers must take all necessary steps to comply with the dictates of that Act, and diligently removing any infringing material once we receive notice of infringement.

 That’s all for today. Now get back to work!

 

 

Jonathan Pink leads the Entertainment, Internet and Media practice at Bryan Cave, LLP. He can be reached at 310-576-2258 or at

jonathan.pink@bryancave.com

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Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

And the Band Plays On . . .

Trademarks are a valuable asset to any business, and bands are no exception.

Recently, in a lawsuit that pitted former members of the 1980’s punk band, Black Flag, against one another, U.S. District Court judge Dean Pregerson denied one of the band’s three founders, Greg Ginn, a preliminary injunction against two other co-founders and several other of his former bandmates.

Those former bandmates, including Keith Morris, Chuck Dukowski, Dez Cadena, Bill Stevenson, and Descendents’ guitarist Stephen Egerton have been touring as Flag since the beginning of the year. Ginn took umbrage with this, along with efforts by former band member (and co-defendant), Henry Rollins, to obtain federally registered trademarks in the “Black Flag” name and the band’s four-bar logo. Ginn, who began his own revival tour as “Black Flag” shortly after Flag begin hitting the stage in March, sued for trademark infringement. As a step towards blocking Flag’s use of what he saw as trademarks belonging to himself and to his wholly owned record label, SST Records, Ginn filed a motion for preliminary injunction against his former bandmates.

The battle of the bands took place before Judge Pregerson on October 7, 2013. At that time, the Court disagreed with Ginn’s claim that he and SST Records owned the sole rights to use the Black Flag trademarks (the band name and the four-bar logo).

Significantly, the Court ruled that those once proud marks may well have fallen into “generic use” based on a failure to take the precautions to help them live a long and prosperous life. Judge Pregerson reasoned that the marks had been abandoned based on a failure to take any steps to stop the numerous third parties who have used the Black Flag trademarks without a license. The Court adopted the defendants’ argument that the plaintiff’s multi-decade failure to sue third parties over such unlicensed use rendered those marks incapable for serving as an indicia of the marks’ source, thus vastly weakening and limiting the range of protection to which the moving parties were entitled even under the plaintiffs’ theory of ownership. See e.g. Restatement (Third) of Unfair Competition § 18, cmt d (1995); see also 15 U.S.C. § 1127 (mark shall be deemed to be abandoned where any conduct of the owner, including the failure to sue infringers who are making confusingly similar uses of the mark); Signeo USA, LLC v. SOL Republic, Inc., 2012 U.S. Dist. LEXIS 79356 at *22 (N. D. Cal. 2013) (citing GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1207 (9th Cir. 1999).

With respect to the issue of abandonment, the defendants also cited 15 U.S.C. § 1127, defining prima facie “abandonment” of a trademark as nonuse for 3 consecutive years, stating that “[i]ntent not to resume may be inferred from [the] circumstances.”). See also Levi Strauss & Co. v. GTFM, Inc., 196 F. Supp. 2d 971, 976-77 (N.D. Cal. 2002)(courts have applied a partial abandonment theory where the registration describes a class of goods or services on which the trademark owners has ceased using its mark). Specifically, the Flag team argued that neither Ginn nor SST conducted any live musical performances under the name Black Flag for about 27 years absent a 3-concert tour in 2003. However, even taking into account Ginn’s 2003 performance, defendants argued that this still constituted an initial nonuse of 17 years, followed by a second nonuse of 10 years. The defendants argued that even assuming, arguendo, that Plaintiffs ever had any rights in the Black Flag marks for live performances, their 27 years of nonuse constituted prima facie evidence of abandonment.

Also significant, the plaintiffs argued that SST’s continued distribution of Black Flag’s records and merchandise was enough to preserve the relevant trademark rights, the court disagreed. Defendants argued, and Judge Pregerson apparently agreed, that the record label’s distribution of previously recorded works did not, in itself, constitute trademark use with respect to the band’s name or logo. Many labels – like SST — sell phonorecords of many different bands and individual musicians. As such, defendants argued that no label could reasonably argue that it owned the trademark rights in each of its bands’ names by virtue of their phonorecord sales. Likewise, the defendants argued that the sales of merchandise such as buttons, key chains, posters, patches, stickers and apparel did not constitute a trademark use because such uses are considered ornamental. See TMEP § 1202.03 (when a mark is used as a decorative feature on an item, the mark does not serve to identify and distinguish the user’s goods and services and thus does not function as a trademark and does not confer trademark rights). Ornamental matter can confer trademark rights when it serves as a source identifier for a second good or service, such as the performance of live music. However, in this case, the defendants argued the ornamental use could suffice not because SST provided no such services, and Ginn himself had provided virtually none, from 1986 to 2013. According to the defendants, the absence of such performance for nearly three decades – notwithstanding retail distribution – was not sufficient to create trademark rights. At least so far as the motion for preliminary injunction was concerned, Judge Pregerson appeared to agree.

In part based on the foregoing, the Court in this matter ruled that the confluence of a Black Flag and a Flag tour was unlikely to cause any consumer confusion. “The critical determination for confusion is that of prospective purchasers in the marketplace . . . .” Signeo USA, LLC v. SOL Republic, Inc., 2012 U.S. Dist. LEXIS 79356 at *28 (citing Rearden LLC v. Rearden Commerce, Inc., 597 F. Supp. 2d 1006, 1023 (N.D. Cal. 2009)). Specifically, the Court found that there had been tremendous media coverage of the concurrent tours, including articles appearing in the Los Angeles Times, The New York Times, and Rolling Stone. These articles identified and highlighted the differences between the bands, as did the Flag tour posters, which stated the members of the band. Conversely, the Court stated that Ginn had not set forth sufficient and specific evidence of fans being misled. See New Kids on the Block v. News America Publ’g, Inc. 971 F.2d 303 (9th Cir. 1992) (“the trademark laws do not give the New Kids the right to channel their fans’ enthusiasm (and dollars)”).

The takeaway from this ruling is that bands must take affirmative steps to avoid any abandonment of their trademarks. This should take the form of playing live shows every couple of years and diligently pursuing suspected infringers. Finally, it is always prudent for bands to have a “band agreement” that, among other things, lays out the steps for maintaining trademark rights post-performance years. Creativity and good business sense need not be mutually exclusive, especially where bands have access to good legal representation.

Absent such forethought and prudent trademark-preservation conduct, the names of even once-popular bands can go the way of other once popular brands: Yo-Yo, Trampoline, Dry Ice, Shredded Wheat and Escalator. So let the band play on – after all, it’s one of the best ways to preserve its trademark rights.

Jonathan Pink leads the Entertainment and Media practice at Bryan Cave, LLP. He can be reached at 310-576-2258 or at jonathan.pink@bryancave.com. He and his team represented the defendants in this lawsuit.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

Finally a Fair Description of Fair Use

Going back to my class, last week we were discussing nominative and classic fair use in trademark law. I was operating on several days of very little sleep (with less to follow), and as a result prattled on like a blithering idiot when seeking to explain these concepts.

Based on this, I promised to formulate an accurate, clear and concise description of the two. The following is my follow-up on this subject to my class:

I promised to give you a more concise summary of fair use and nominative fair use following our last class. Honestly, between my addled, sleep-deprived state and the confused explanation, I would be surprised if anyone understood what the hell I was saying. I’m certain I didn’t. Anyway, here’s another – more thoughtful – crack at it, along with some citations to assist.

Classic fair use is a defense available to one who, in good faith, uses in a descriptive sense rather than its trademark sense a term that is protected by trademark law. See e.g. Zatarian’s Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786 (5th Cir. 1983) (“fish fry” could be used by competitor as a descriptive term in spite of protected mark, “Fish-Fri”); see also Cairns v. Franklin Mint Co., 292 F.3d 1139, 1150 (9th Cir. 2002) (“classic fair use” concerns the defendant’s use of the plaintiff’s mark to describe the defendant’s own product).

In keeping with the rule set forth in Zatarian, that defense requires proof of three elements. Zatarian, supra; see also Car-Freshner Corp. v. S.C. Johnson & Son, Inc. 70 F.3d 267 (2d Cir. 1995) (same). These are as follows:

First, the term must be used in its descriptive sense. See Packman v. Chicago Tribune, Co., 267 F.3d 628, 641 (7th Cir. 2001) (newspaper’s use of “The joy of six” as headline to describe the happiness associated with basketball team’s sixth championship held to be descriptive use); Radio Channel Networks, Inc. v. Broadcast.com, Inc., 1999 WL 124455 (SDNY 1999), aff’d without opinion, 201 F.3d 432 (2d Cir. 1999) (use of term “radio channel” to label one of several website categories of streaming programming held to be descriptive). Note that this defense is not limited to descriptive marks.

Second, for the fair use defense to apply, the use must have been made in good faith. EMI Catalogue Partnership v. Hill, Holliday, Connors, Cosmopulos, Inc., 228 F.3d 56, 66 (2d Cir 2000); Radio Channel, supra, (knowing use of terms in which another claims a trademark will not constitute bad faith if the challenged terms are used in their descriptive sense).

And third, the term is not used as a trademark. See TCPIP Holding Co., Inc. v. Haar Communications, Inc., 244 F. 3d 88, 104 (2d Cir. 2001) (use of term as web url precluded finding of fair use).

Now we also talked about how fair use applied when comparing two products. You’ll recall how I used the example of the Coke v. Pepsi blind challenge. This was intended to illustrate the use of a trademark to truthfully describe another party’s goods. See e.g. Triangle Publications v. Knight-Ridder Newspapers, 626 F. 2d 1171, 1176 (5th Cir. 1980) (“comparative advertising, when truthful and nondescriptive, is a source of important information to consumers and assists them in making rational purchase decisions”). Thus a mark may be used in good faith to describe a product rather than identify it with a particular source. Id.; see also Smith v. Chanel, Inc., 402 F. 2d 562 (9th Cir. 1968) (duplicate fragrance).

Nominative fair use, on the other hand, concerns the defendant’s use of the plaintiff’s mark to describe the plaintiff’s product. Cairns, supra, 292 F.3d at 1150. The Ninth Circuit has held a commercial user is entitled to a nominative fair use defense where he meets three requirements: (1) the product or service in question is one not readily identifiable without the use of the trademark; (2) only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and (3) the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. New Kids on the Block v. News America Pub., 971 F.2d 302, 308 (9th Cir. 1992). So, with nominative fair use, we’re asking whether the defendant could reasonably identify the plaintiff mark-holder without the use of its trademark. If not, the use is likely to be protective as nominative. Thus, for example, “[j]ust as it is virtually impossible to refer to the New Kids on the Block, the Chicago Bulls, Volkswagens, or the Boston Marathon without using the trademarked names” it would also be virtually impossible for example a Black Flag tribute band to refer to music it played without using the words Black Flag (as in “playing the music of . . .). Brother Records v. Jardine, 318 F.3d 900, 908 (9th Cir. 2003).

I hope this clarifies matters. More confusion when class tomorrow, so stay tuned.

Jonathan Pink leads the Entertainment, Media and Internet team at Bryan Cave, LLP. He litigates copyright, trademark, patent and business issues for film makers, musicians, music publishers, labels and motion picture/television production companies. He may be reached at 310-576-2258 or at jonathan.pink@bryancave.com.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

Back to School!

So — and please try to stifle your laughing here – I’m now teaching a law school class. Let me just say for the record that it is much more difficult than it looks! I have a renewed respect for my prior professors, and all my friends who teach law school. Sheesh, who knew?

I’m teaching an Intellectual Property Survey Course. This means everything that I put include under the IP umbrella: trademark, copyright patent, invasion of privacy (name and likeness misappropriation), unfair competition, etc. There is a lot to cover!

Currently we’re on the trademark section. Last week, in discussing the issue of “use in commerce” – a critical component to trademark law – generated the following question from one of my students:

“In the notes that follow Blue Bell it discusses what constitutes “use” for trademark law. It is broken up into bona fide use and use in commerce. However, in the 1988 Revision Act, use in commerce was defined to mean “the bona fide use of a mark in the ordinary course of trade.” Therefore, is the use in commerce best looked at as “where” the goods must be used. That is defined in the Lanham Act as. “commerce which may lawfully be regulated by Congress.” Where the bonafide use factors are “how” the goods must be used in order to sufficiently establish trademark ownership. Is this an appropriate way of looking at these two concepts?”

As a side note, this is the true problem of teaching bright students: they really make you stretch your thinking. I mean, I can’t really respond, “like I know!” And so I thought about it, and came up with this answer:

“Good question.

The Act of 1988 amended the prior law to add the phrase “the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.” The purpose of this was to eliminate the practice of making a “token use” solely to reserve rights in a mark.

Factors to consider when looking at whether there has been a “bona fide use of a mark in the ordinary course of trade” are: (1) the amount of use; (2) the nature or quality of the transaction; and (3) what is typical use within a particular industry.
The Senate Judiciary Committee report regarding this revision stated that the Committee intended the revised definition of “use in commerce” to be interpreted flexibly so as to encompass various genuine trademark uses, including those made in test markets. The idea is that while under the law prior to 1989, the PTO would accept a minimal use to support the filing, the 1988 revision was intended to require a use that went beyond a minimal “token” use made merely to reserve a purported right in the mark” and replace it with a legitimate use. By way of example, illegitimate transactions have included a single shipment of one jar of salt from one corporate officer to another for no charge; and sale of a few dollars’ worth of women’s sportswear to a cooperating company which immediately returned the goods to the seller. Likewise, even bona fide sales may not qualify as sales “in the ordinary course of trade” if they are too sporadic, casual, or nominal.

In some ways, it’s easier to say what will not qualify for a bona fide use. Here are some examples of factors that weigh against finding of a bona fide use:

(1) a single or infrequent shipments of goods that would typically be sold in larger quantities given industry standards;
(2) “sales” only to friends or family;
(3) a lack of concern as to whether the public has an opportunity to buy the product;
(4) the absence of promotional activities for which the mark was used;
(5) passing off of goods;
(6) a first use followed by no sales for a long period of time; and
(7) merely trying to block competitors rather than establish legitimate trade under the mark.

As we discussed, the “in commerce” requirement can be broad as it includes all commerce that can be regulated by Congress, e.g. not only interstate commerce. So for example goods/services will usually be deemed “in commerce” if they are offered to customers across state lines, or shipped over state lines (with the intent of selling them), and even when they are shipped intrastate with the knowledge that they may ultimately find their way beyond. Thus, in answer to your question, “the bona fide use of a mark in the ordinary course of trade” really comes down to both “where” and “how” the goods are sold.”

In addition to that answer, I also came across a recent (2013) case that seems to address this same issue and hopefully helps further clarify. In Scorpiniti v. Fox Television Studios, Inc., 918 F. Supp. 2d 866 (N.D. Iowa 2013), the Northern District of Iowa addressed the issue of whether a trademark had to be used in interstate commerce in order to qualify for protection under the “use in commerce” requirement.

That case involved a religious television program that sought and obtained a trademark for its show, “The Gate.” Fox Television, on the other hand applied for a mark in its show, “The Gates.” Fox’s show was a crime drama. Scorpiniti filed suit.

Given the overlap in the marketplace, e.g. make believe crime stories and supernatural-magical stories – ok, excuse my bias –, the plaintiff asserted claims of trademark infringement, false designation, and unfair competition under both state and federal law. Fox counterclaimed for cancellation based on non-use and fraud on the USPTO, ultimately moving for summary j.

The District Court granted Fox’s motion, basing its decision, at least in part, on its finding that Scorpiniti was not in fact using its mark, “The Gate,” in interstate commerce. The Court reasoned that the “use in commerce” requirement is met when (1) a mark is “used or displayed in the sale or advertising of services” and (2) either (i) the services are “rendered in commerce” or (ii) the services are “rendered in more than one State or in the United States and a foreign country and the person rendering those services is engaged in commerce in connection with the services.” In light of this, the Court held that because Scorpiniti broadcast its program only in Iowa (and even then without any charge to the consumer), the plaintiff had failed to use the mark in commerce.

Apropos to the foregoing, the Court opined that where a mark holder’s initial activities were “never intended to generate revenue” but instead were intended to “generate a market for services that had not yet been developed but would be offered in the future,” the mark holder did not use its mark in the ordinary course of trade. In other words, the Court deems a use as a token use only. The Court ruled that the lack of a commercial use and the limited geographic sue was insufficient for trademark protection at the time it filed its USPTO trademark application.

So based on this, what happens now? As for Scorpiniti, I suppose he can pray for reversal on appeal.

Jonathan Pink received his MFA from UCLA’s School of Film and Television (1988) and was an award-winning screenwriter before becoming an intellectual property and business lawyer. He leads Bryan Cave LLP’s Entertainment & Media Team as well as the firm’s Internet & New Media Team. He is a trusted advisor to business leaders for whom he provides strategic, legal and business advice. His clients include globally recognized media corporations, Internet companies, visual and performing artists, music publishers, record labels, writers, directors, motion picture producers and a broad spectrum of content creators. He has earned an international reputation for achieving client, company and shareholder goals by aligning legal activities with corporate results, expanding business opportunities, protecting intellectual property interests, managing risk and handling complex litigation in state and federal court. His experience includes cases involving copyright infringement, trademark infringement, patent infringement, misappropriation of name and likeness (rights of publicity), misappropriation of trade secrets, breach of contract, unfair competition, and fraud. He was lead defense counsel in a seminal case invalidating as unconstitutional Section 511(a) of the United States Copyright Act, and co-led the defense of Grammy Award winning, American hip hop artists in series of high-profile copyright infringement lawsuits. Mr. Pink is the author of more than three dozen intellectual property-related articles, and has provided commentary on intellectual property issues to ESPN’s Morning Show, NPR’s All Things Considered, and to the New York Times, the Los Angeles Times, and the Wall Street Journal. In August 2013, he became an adjunct professor at Western State University, School of Law. He can be reached at jonathan.pink@bryancave.com.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.