By Adrienne Baker – Edited by Ian C. Wildgoose Brown
Schrock v. Learning Curve Int’l, No. 08-1296 (7th Cir. Sep. 9, 2009)
Opinion

On November 5, the Court of Appeals for the Seventh Circuit reversed and remanded a decision of the District Court for the Northern District of Illinois, which had ruled that copyright for a derivative work requires permission from the underlying copyright holder to be valid. The district court’s ruling was based on reasoning in Gracen v. Bradford Exchange, 698 F.2d 300 (7th Cir. 1983). The Seventh Circuit instead held that a valid copyright in a derivative work is created by “operation of law” and not by authority of the copyright owner in the underlying work, unless a contract dictates otherwise. Additionally, the court held that there is no heightened standard of originality for copyright protection in a derivative work.

The Exclusive Rights Blog provides an overview of the case. Rebecca Tushnet’s 43(B)log criticizes the circuit court for not explicitly overturning Gracen and asserts photographs of copyrighted material should not be treated as derivative works.

The dispute in Schrock concerned photographer Daniel Schrock’s copyright infringement allegation against Learning Curve Int’l and HIT Entertainment (HIT). HIT owns the copyright in the “Thomas & Friends” train characters. HIT licensed the right to create and distribute “Thomas & Friends” toys to Learning Curve. Learning Curve hired Schrock to take pictures of the toys for marketing purposes. Years later, the company ceased using Schrock’s professional services but continued to use his photographs in promotional materials. Schrock subsequently registered his photographs for copyright protection and sued Learning Curve and HIT for copyright infringement. The doctrinal issue in this case arose from the district court’s finding that Schrock’s photographs were derivative works, thereby triggering the requirement of permission from the underlying copyright holder under Gracen.

However, the Seventh Circuit held that the district court had misread Gracen. The Seventh Circuit admitted that the permission-to-copyright dicta in Gracen was incorrect because it contravenes the copyright protection requirements as provided in 17 U.S.C. §102(a) of the Copyright Act (“copyright protection subsists . . . in original works of authorship fixed in any tangible medium”). The court acknowledged that parties effectively may alter these rights through contract. Because the record did not include the contracts among Schrock, Learning Curve, and HIT, the court remanded to the district court for further proceedings.

The circuit court also clarified that the “substantially different from the underlying work” language in Gracen does not impose a high standard of originality for copyright protection in a derivative work, but rather reiterates the notion that derivative works must have a “nontrivial distinguishable variation” from the underlying work in order to be granted copyright protection. This requirement applies both to Schrock’s photographs (a derivative work of the toys) and Learning Curve’s promotional materials (a derivative work of the original photographs).

Schrock aligns copyright law in the Seventh Circuit with the requirements for copyright protection provided in the Copyright Act. However, the scope of the holding is uncertain as it is not possible to determine how the “nontrivial distinguishable variation” requirement for copyrightable derivative works will be applied to works outside the realm of photography.

Charges against Craigslist for their “Adult Services” section dismissed by Illinois District Court
By Ye (Helen) He – Edited by Eric Engle

Dart v. Craigslist, Inc., No. 09 C 1385 (N.D. Ill. Oct. 20, 2009)
Opinion

The United States District Court for the Northern District of Illinois held, on Craigslist’s motion for judgment on the pleadings, that Craigslist is not liable for the content posted by its viewers. The court cited Section 230(c) of the Communications Decency Act, concluding that Craigslist, as an Internet classified ads service provider, is immune to civil liability for third party content. The court found Craigslist analogous to an ISP or phone service provider and thus not liable for users’ content and conduct, as opposed to, as plaintiff contended, a newspaper or magazine which may be held liable for its ads.

Bloomberg.com and Eric Goldman’s Technology & Marketing Law Blog summarize the case.

Plaintiff Tomas Dart, the Sheriff of Cook County Illinois, alleges that Craigslist is facilitating prostitution through their erotic (now “adult”) services section, and thus constitutes a public nuisance. Plaintiff sought money damages and to enjoin Craigslist from hosting its adult services section (Compl. P 1; id. at P 27.) Dart claims that Craigslist violated Illinois statute by arranging “meetings of persons for purposes of prostitution and directs them to a place for the purpose of prostitution.” As evidence, Dart cites “The Polaris Project,” an advocacy group against human trafficking, stating that “Craigslist is the single largest source for prostitution, including child exploitation, in the country.”

Craigslist argued that U.S.C. Section 230(c) absolves them of any liability. According to Section 230(c), “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Section 230(e) of the further states that, “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” Craigslist also points out that before posting ads on its website, users must first agree to its Terms of Use. Furthermore, prior to entering the adult services section, users must agree to flag any content that violates Craigslist’s Terms of Use.

In addressing Dart’s allegations, the court reasoned that even if Craigslist were found to violate the Illinois statute, Section 230(e) of the act would control. Furthermore, the court found Dart’s interpretation of “arrange” and “direct” to “strain the ordinary meaning of the terms.” The court reasoned that since it was the users who choose to post such content, even against Craigslist’s express Terms of Use, Craigslist in no way induced anyone to create, post or search for illegal content.

The court’s holding is wise and conservative; to rule otherwise would blatantly disregard the plain meaning of the Communications Decency Act, and invite a slew of litigation. The court does note, however, that the act does not protect online content hosts from all civil liability, warning that Craigslist could be held liable for its own content or if its system were truly designed to encourage or cause the unlawful behavior. Given Craigslist’s existing precautions, it seems this message is directed at the public rather that to Craigslist itself.

Congressional Bills: Heading Down the Series of Tubes Near You?

On October 2, The Washington Post reported that the recent proposed health care legislation has re-sparked debate over openness and online information availability in Congress.  A group of 180 members of Congress have signed a petition to require that all bills be placed online for at least 72 hours before voting.  Advocates say this would allow greater government transparency and give legislators time to actually read the bills before voting.  Opponents maintain that 72 hours online won’t make the bills more accessible to citizens or legislators due to the dense legalese, and they also point out that many bills are already posted online 48 hours in advance.

Don’t lol – Cyberbullying is No Joke in Congress

On September 30, the House Judiciary Committee heard testimony concerning two bills aimed at combating cyberbullying. One bill, the Megan Meier Cyber Bullying Prevention Act, would criminalize cyberbullying, while the other, the Adolescent Web Awareness Requires Education (“AWARE”) Act would provide funding to schools to teach children about cybercrime, including awareness about cyberbullying.  Ars Technica explains that experts at the hearing expressed concerns that the language of the Megan Meier Act would create free speech concerns and be hard to police, though they generally agreed that the AWARE Act took steps in the right direction to combat cyberbullying conduct.

No Pictures Please: Cameras Prohibited in Seventh Circuit Courtrooms

The Wall Street Journal Blog details the order issued by Judge Easterbrook of the Seventh Circuit on September 28th, censuring an Illinois district court judge for allowing the filming of a trial in his courtroom.  Easterbrook explained that the allowance violated policies established by both the Judicial Conference of the United States and the Judicial Conference of the Seventh Circuit, with little elaboration.  The Illinois judge responded apologetically, explaining that he thought he could make an exception to the policies due to the public interest at issue in the case.

By Michelle Yang — Edited by Wen Bu

Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc.
Seventh Circuit, March 14, 2008, No. 07-1101
Slip Opinion

On March 14, the Seventh Circuit affirmed summary judgment by the District Court for the Northern District of Illinois for Craigslist, holding that the online bulletin board did not violate the Fair Housing Act by providing “an electronic meeting place” that hosted, among many other things, illegally discriminatory housing advertisements. The opinion by Chief Judge Easterbrook clarified the potential liability of an online service: as Craigslist was not a “speaker” of the illegal information, it was not liable as a publisher.

Eric Goldman of Technology and Marketing Law Blog analyzes Judge Easterbrook’s reasoning as part of 47 USC 230 Week.
Howard Bashman of How Appealing provides additional links, as well as coverage on the en banc rehearing of a similar case, Fair Housing Council v. Roommates.com, before the Ninth Circuit.
Randy Picker of the University of Chicago Law School Faculty Blog sees the ruling as yet another reason newspapers are dying in the competition against less-strictly-regulated online competitors.
In 2001, Joel Michael Schwarz contributed a JOLT article about liability for third party postings in the context of practicing law over the Internet.

A section of the Fair Housing Act, 42 U.S.C. § 3604(a), prohibits the publishing of advertisements that indicates discrimination based on race and other prohibited classes. A consortium of Chicago law firms sued Craigslist for hosting notices on the website that indicated preferences against minorities and people with children. Although the provision exempts single-family houses rented by an owner with no more than three such houses, many of these notices were for apartments and condominiums falling outside the single-family exemption.

Judge Easterbrook distinguished between newspapers, against which the Fair Housing Act is routinely applies, and Craigslist. The opinion posited that Craigslist, like common carriers such as telephone services, does not create the discriminatory content it carries and would have enormous difficulty screening notices. The website’s thirty-person staff would thus be incapable of vetting the thirty million notices posted monthly. Moreover, a costly increase in staff screening would likely, Judge Easterbrook found, be futile. Instead, the opinion suggested, the Lawyers’ Committee would be better able to identify targets for investigation by Craigslist.

The court also clarified the circuit court’s earlier opinion in Doe v. GTE Corp., 347 F.3d 655 (7th Cir. 2003), regarding the protection for “Good Samaritan” blocking of internet content under the Communications Decency Act of 1996 (“CDA”), 47 U.S.C. § 230. The court held that the CDA forecloses treatment of ISPs and online services as publishers and speakers, but does not grant comprehensive liability for third-party content.

Applying the CDA to the facts of the case, Easterbrook first notes that it is a general statute that applies to the Fair Housing Act, regardless of whether or not Congress had intended it to apply to discriminatory housing advertisements. Since an online service is not a “publisher or speaker” of third party content, Craigslist is not liable under the Fair Housing Act because it is not a “‘speaker’ of the posters’ words,” as would be required for liability under the FHA.