JOLT Digest

Harry Potter Lexicon Found to Infringe J.K. Rowling’s Copyright
By Miriam Weiler - Edited by Evie Breithaupt

Warner Bros. Entertainment v. RDR Books
S.D.N.Y, September 8th 2008, No. 07 Civ. 09667 
Slip Opinion (hosted by Justia.com)  

This week, Judge Robert P.  Patterson of Southern District of New York, granted a permanent injunction against Defendant RDR Books (”RDR”) and awarded statutory damages to Plaintiffs Warner Brothers Entertainment, Inc.  and J.K.  Rowling (”Warner Bros.” and “J.K.  Rowling”) for the infringement of Rowling’s Harry Potter books.  In this long awaited decision, the court ruled that RDR’s plan to publish “The Lexicon,” an A-to-Z reference guide to Harry Potter facts written by Steven Vander Ark, infringed upon Rowling’s famous series and two of her other works, Quidditch Through the Ages (2001) and Fantastic Beasts and Where to Find Them (2001). 

There was no dispute that J.K. Rowling owned the copyright to the Harry Potter series, the film rights of which had been licensed to Warner Bros., and that Steven Vander Ark had originally copied from the books to create an online reference source called “The Harry Potter Lexicon.” The court applied the Ringgold test for substantial similarity, finding that Vander Ark copied a quantity and quality of material sufficient for infringement when he developed the website into a book to be published by RDR. 

Briefs and relevant court documents are available here.

The Wall Street Jounal provides an overview of the case, and the Vanderbilt Journal of Entertainment & Technology Law features a thorough analysis of the decision.

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Federal Circuit Affirms Economic Interest of Open Source Copyright Holder
By Yelena Shagall - Edited by Evie Breithaupt

Jacobsen v. Katzer 
Federal Circuit, August 13, 2008, No. 2008-1001
Slip Opinion 

On August 13, the Federal Circuit ruled that open source license terms can create enforceable copyright conditions.  In Jacobsen v. Katzer, the Federal Circuit addressed the Northern District of California’s rejection of Jacobsen’s motion for preliminary injunction against competitor Matthew Katzer and Kamind Associates, Inc (”Katzer/Kamind”) for infringement of the terms of an open source license (”Artistic License”).  Jacobsen held the copyright to computer programming code, which he made available for free subject to the Artistic License.  According to Jacobsen, Katzer/Kamind incorporated portions of the code into one of their software packages without following the terms of the license. The district court concluded that the Artistic License was an unlimited non-exclusive license.  The district court held the terms of the license created mere covenants, not copyright conditions, and the defendants were thus not liable for copyright infringement.  At most, they had breached a non-exclusive license.  Breach of contract, unlike copyright infringement, creates no presumption of irreparable harm, and the court rejected Jacobsen’s motion for a preliminary injunction. The Federal Circuit reversed and remanded the district court. 

The Open Source Initiative provides commentary, stating that “the District Court decision was wrong and wrong in a way that could have been a disaster for open source community.”

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D. Mass: MIT Students’ Security Presentation Merits Temporary Restraining Order
By Jon Choate - Edited by Dan Ray 

Mass. Bay Transp. Auth. v. Anderson
D. Mass., August 9th, 2008, No. 08-11364-GAO
Temporary Restraining Order (Hosted by EFF)  

On August 9th, Judge Woodlock of the U.S. District Court, District of Massachusetts granted the Massachusetts Bay Transportation Authority (”MBTA”) a temporary restraining order against Zack Anderson, RJ Ryan, and Alessandro Chiesa, undergraduates at the Massachusetts Institute of Technology (”MIT”). The order “enjoined and restrained” the undergraduates from “providing program, information, software code, or command that would assist another in any material way to circumvent or otherwise attack the security” of the MBTA fare system’s CharlieCard and CharlieTicket.  CharlieCards are reusable stored-value cards, which allow Boston subway riders access at ticket terminals by waiving the card over a designated reader. The system operates wirelessly, and allows riders to add money to their cards both at subway terminals and through online accounts. 

Anderson, Ryan and Chiesa reportedly uncovered several vulnerabilities with the MTBA’s CharlieTicket system while doing research for a Computer and Network Security class. Using this research, the students devised a way in which the CharlieCards can be reprogrammed using $200 worth of equipment; theoretically, this method could increase the stored-value on a card   to more than $600.  The students also discovered that the CharlieCards, which store balance and other information internally, can be read using non-MTBA wireless equipment. Furthermore, according to documents on their research, the three had written software capable of generating and analyzing CharlieCards in order to crack the card’s encryption. 

The MIT students were scheduled to present their research at DEFCON, “one of the oldest running hacker conventions around.” It was this presentation which prompted the August 8th complaint filed by the MBTA against Anderson, Ryan and Chiesa and MIT. The complaint alleges that the students

“(i) claim to have circumvented the security features of the MBTA’s computerized CharlieTicket and CharlieCard fare media systems; (ii) publicly offered ‘free subway rides for life‘ to interested parties over the Internet; and (iii) plan to allow others to duplicate their claimed ‘breaking’ of the Fare Media’s security systems by presenting a paper, releasing software tools, and giving demonstrations at the DEFCON hackers convention this Sunday, August 10, in Las Vegas.”

The complaint further alleges that the students did not provide information regarding how they circumvented the security system to the MBTA and that public dissemination of the information before the MBTA has had an opportunity to correct the flaws will cause “significant damage to the MBTA’s transit system.”  

The MIT Tech covers the story, noting that while  the presentation at DEFCON was cancelled, the presentation slides and confidential vulnerability report the students wrote for the MBTA “are widely available online.” The Tech further reports that the students are being represented by the Electronic Frontier Foundation (EFF) and not by MIT’s lawyers.

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Sixth Circuit Affirms Conviction of Counterfeit DVD Importer 
By Dmitriy Tishyevich - Edited by Nicola Carah 

United States v. Teh
Sixth Circuit, July 31, 2008, No. 06-2371 
Slip Opinion 

On July 31, the 6th Circuit affirmed the conviction of Thiah Teh, who was indicted after airport officials searched his luggage and found what appeared to be 756 counterfeited DVDs and 284 counterfeited DVD sleeve packages.  Teh was found guilty and sentenced to one year of probation under 18 U.S.C. § 545, which imposes fines and up to twenty years imprisonment for “knowingly import[ing] . . . merchandise contrary to law.”  Although the government did not indicate at trial what statutory provision provided the basis for the “contrary to law” element of the § 545 violation, it asserted on appeal that Teh’s actions violated 18 U.S.C. § 2318, which provides felony  penalties for up to 5 years for importing counterfeit labels, documentation, or packaging. 

Teh argued on appeal, inter alia, that a copyright violation could not serve as the basis for a § 545 offense under Dowling v. United States, 473 U.S. 207 (1985), which held that distribution of bootleg sound recordings could not be prosecuted under the National Stolen Property Act (”NSPA”).  The Supreme Court reasoned that, by enacting the Copyright Act, Congress intended to address copyright violations with more precision than the NSPA would allow.  In addition, the Court also expressed concern that civil copyright violations might otherwise come within the ambit of the criminal trafficking statute, which carries significantly more serious penalties. 

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Third Circuit Holds Child Online Protection Act Unconstitutional 
By Anna Lamut - Edited by Nicola Carah 

ACLU v. Mukasey
Third Circuit, July 22, 2008, No. 07-2539
Slip Opinion  

On July 22, the Third Circuit affirmed the United States District Court for the Eastern District of Pennsylvania’s decision, finding that the Child Online Protection Act (”COPA”), 47 U.S.C. § 231, violated the First and Fifth Amendment, and permanently enjoined its enforcement. COPA imposes civil and criminal penalties for anyone who, “for commercial purposes,” knowingly posts “material that is harmful to minors” on the World Wide Web. 47 U.S.C. § 231(a)(1).  While broad, COPA allows web publishers a complete defense if they ”require[] use of a credit card, debit account, adult access code, or adult personal identification number,” “accept[] a digital certificate that verifies age,” or use other similar measures. 47 U.S.C. § 231(c).  COPA has been mired in litigation since it was first enacted in October of 1998, including two trips to the Supreme Court;  this is the third time that the Third Circuit has held the Act unconstitutional. 

Judge Morton I. Greenberg, writing for a unanimous panel with Judges Thomas L. Ambro and Michael A. Chagares, found that COPA failed to meet the strict scrutiny standard for restrictions on constitutionally protected speech. To survive strict scrutiny review, regulation that restricts protected speech must serve a “compelling government interest”, be “narrowly tailored” to serve the interest, and use the least restrictive means available.  The Third Circuit found that COPA served the compelling government interest to protect children, but that it failed to meet the second and third prongs of the test.  The court held that COPA was insufficiently narrowly tailored because, inter alia, minors were broadly defined as any person under the age of 17, and the standard for harmfulness did not require that the material be viewed in context.  In addition, the court found the definition of a “commercial” publisher to be overly inclusive and the affirmative defenses available to such publishers — evidence of the implementation of credit card shields or similar measures — unduly restrictive both to publishers and adults wishing to access the material. Finally, the court held the government failed to demonstrate that internet content filters, deemed a less restrictive option, were less effective than COPA.

The Electronic Privacy Information Center hosts the full text of COPA and related House Report. 

The Center for Democracy and Technology, an online rights advocacy group that filed an amicus brief for an earlier Third Circuit COPA case, lauded the decision. CDT General Counsel John Morris states, “This empowers parents, respects the First Amendment and acknowledges the diverse sensibilities of American families.”

Professor Susan Crawford of the University of Michigan Law comments on the decision, and addresses the possibility that the case will once again return to the Supreme Court. 

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Federal Circuit Affirms Award of Attorney Fees for Inequitable Conduct and Litigation Misconduct
By Christina Hayes — Edited by Stephanie Weiner

Nilssen v. Osram Sylvania, Inc.
Federal Circuit, June 17, 2008, No. 2007-1198
Slip Opinion

The Federal Circuit affirmed the judgment of the U.S. District Court for the Northern District of Illinois granting a motion for attorney fees to Osram Sylvania, Inc. and Osram Sylvania Products, Inc. (collectively, “Osram”) due to the inequitable conduct and litigation misconduct of the appellants pursuant to 35 U.S.C. § 285. Section 285 of the Patent Act authorizes the award of attorney fees to the prevailing party in “exceptional cases.”

The Federal Circuit held that the district court did not clearly err in finding that the case was “exceptional” and that it was within its discretion to award attorney fees to Osram. Appellants argued that Nilssen’s inequitable conduct was “benign” and their litigation misconduct amounted to instances of “harmless oversight” and “permissibly rough litigation tactics.” The Federal Circuit refused to distinguish the inherent contradictory notion of benign inequitable conduct and further noted that the argument ultimately “amount[ed] to little more than an impermissible attempt to reargue the merits of [the district court's] holding.” With respect to the litigation misconduct, the court noted that “it ill behooves an appellate court to overrule a trial judge concerning litigation misconduct when the litigation occurred in front of the trial judge, not the appellate court,” concluding that the district court had sufficient evidence to have concluded that trial misconduct occurred.

Appellants further argued that a finding of inequitable conduct was insufficient to constitute an exceptional case. The court agreed that while there was no per se rule of exceptionality in cases involving inequitable conduct, its precedent provided wide discretion to district courts to award fees in inequitable conduct cases.

Dennis Crouch of Patently-O points out that there was no “individual smoking gun” here and agrees with the appellants’ argument that their actions were reasonable given that Osram was represented by Kirkland & Ellis, “well known for its relentless bull dog litigation style.”
The Patent Hawk also provides an overview of the case.
Filewrapper features an overview as well, complete with a timeline of the case.

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Ninth Circuit Assesses Copyright Damage Awards
By Debbie Rosenbaum — Edited by Stephanie Weiner 

Derek Andrew, Inc. v. Poof Apparel Corp.
9th Circuit, June 11, 2007
Slip Opinion 

The Ninth Circuit reversed and remanded in part the decision of the District Court for the Western District of Washington, which had awarded statutory damages under the Copyright Act for a copyright infringement, as well as attorney’s fees. 

Under § 504(a) and (c) of the Copyright Act, a copyright owner can elect to recover statutory damages for an infringement instead of actual damages and any additional profits.  This is limited, however, by § 412(2), which bars recovery of statutory damages for “any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work.”  17 U.S.C. § 412(2).  The Ninth Circuit held here that § 412 precludes recovery of statutory damages for post-registration infringements where the first infringement in a series occurred before registration.  This was the first time the Ninth Circuit had addressed the provision in the context of post-registration infringement.  In so holding, the court joined several other circuits in rejecting a reading of the Copyright Act that would allow an end run around § 412.

An overview of the case is available at The Patry Copyright Blog and by Michael Atkins of the Seattle Trademark Lawyer Blog
Filewrapper features commentary, including pictures of the trademark in question  

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Second Circuit Holds First Amendment Claim Against School Regulation of Off-Campus Speech Unlikely to Succeed on the Merits
By Jay Gill — Edited by Nicola Carah

Doninger v. Niehoff
Second Circuit, May 29, 2008, No. 07-3885
Slip Opinion

The Second Circuit unanimously affirmed the Connecticut District Court’s decision to deny a motion for preliminary injunction in a case involving a high school’s alleged violation a student’s First Amendment rights. Ms. Doninger filed suit after the high school prohibited her daughter from running for senior-class secretary, a move prompted by the school’s discovery of a blog in which the daughter had posted a “vulgar and misleading message” about administrators and an upcoming school event. The court found that the lower court had not abused its discretion in denying the preliminary injunction on the grounds that the case was unlikely to succeed on the merits.

Scott H. Greenfield of Simple Justice is troubled by the broad application of a “potential for disruption” standard. Greenfield claims that the Second Circuit ruling flies in the face of the Supreme Court’s holding in Tinker v. Des Moines Independent Community School District, 393 U.S. 503 (1969), that students do not “shed their constitutional rights to freedom of speech or expression at the schoolhouse gates.” Instead of protecting the rights of students in the schoolyard, Greenfield says, the Second Circuit is restricting those rights even once the students have left school.

Professor Jonathan Turley views the decision as part of a “steady eradication of student rights” and thinks the decision teaches a “foul lesson to these future citizens.” While he thinks that punishment is warranted when students use vulgar language or behave inappropriately, he thinks this punishment should come from parents and not school authorities.

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Fifth Circuit Holds No Safety Exception to Communications Decency Act ISP Immunity
By Anna Volftsun — Edited by Nicola Carah

Doe v. MySpace, Inc.
Fifth Circuit, May 16, 2008, No. 07-50345
Slip Opinion

On May 16, 2008, the Fifth Circuit unanimously upheld the Western District of Texas, finding Section 230(c)(1) of the Communications Decency Act (“CDA 230”) barred a parent’s claims for negligence and gross negligence against the social networking site, MySpace.com. The suit was brought on behalf of Doe’s 13-year-old daughter, who misrepresented her age to create a profile on MySpace, and was subsequently contacted and allegedly sexually assaulted by a 19-year-old MySpace user.

Julie Doe, a 13-year-old minor, represented her age as 18 when creating a MySpace profile. MySpace defaults all 14-year-old and 15-year-old profiles to “private,” which restricts profile access to confirmed “friends” only. But as a result of Doe’s misrepresentation, her profile was made “public” and viewable by the all other MySpace users, including 19-year-old Pete Solis. Solis contacted Doe, the two exchanged phone numbers, and after communicating several times off-line, arranged a meeting at which Solis allegedly sexually assaulted Doe.

Eric Goldman of the Technology and Marketing Law Blog sees this as a victory for proponents of strong CDA 230 immunity. He notes that several cases leading up to the decision, including Fair Housing Council of San Fernando Valley v. Roommates.com, Mazur v. eBay, and Doe v. FriendFinder, Inc., had evinced a trend towards loosening the immunity provided to internet providers under the statute. While Goldman hopes the MySpace decision will discourage plaintiffs from continuing to bring claims against websites for failing to protect or police its users, he remains “flummoxed by the number of cases [he is] seeing involving teens making poor (and, in some cases, life-altering) decisions using MySpace.”

Sam Bayard of the Citizen Media Law Project is more ambivalent about the outcome. While he believes that the CDA 230 is an important protection for internet service providers, he thinks the decision may have gone too far. He paraphrases John Palfrey of the Berkman Center for Internet and Society, who noted in an internal email:

“MySpace is a powerful corporate intermediary that has broad ability to control the networked public space it makes available to minors and adults alike, and it doesn’t necessarily serve any of the congressional objectives behind CDA.”

Full Text of the Communications Decency Act of 1996 at the US Government Printing Office.

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