JOLT Digest

District Court Declares Purchasers of Software to Be Licensees
By Anna Volftsun — Edited by Joshua Gruenspecht

MDY Industries, LLC v. Blizzard Entertainment, Inc. et al.
District Court of Arizona, July 14, 2008, No. CV-06-2555-PHX-DGC
Order (via Justia)

The District Court of Arizona entered a summary judgment motion finding that MDY Industries, LLC (“MDY”), creators of a software program called WoW Glider (“Glider”), were liable for contributory and vicarious copyright infringement because their program loaded a copy of a copyrighted Blizzard Entertainment, Inc. and Vivendi Games, Inc. (collectively, “Blizzard”) game into computer memory on the game-owners’ machines against the terms of the game’s End User License Agreement (“EULA”). As part of this decision, the Court also found that over-the-counter buyers of the computer game were licensees rather than owners and were thus bound by the terms in the EULA.

Judge David Campbell ruled that the EULA created a limited license rather than a sale because the title explicitly uses the word “limited” and because several of the provisions contain explicit restrictions on the use of the game which, when read together, prohibit the use of Glider. As licensees rather than owners of the game, users were only allowed to copy it under circumstances dictated by the EULA and were thus guilty of direct infringement when they used Glider because it loaded the game into the user’s RAM. A line of Ninth Circuit cases had previously held this to be “copying,” an exclusive right of the copyright holder under Section 106 of the Copyright Act. MDY was found to be liable for contributory and vicarious copyright infringement because it materially contributed to users’ direct infringement, profited from it, and declined to exercise its ability to stop Glider users from activities infringing the license.

The motions of both parties can be found here.

Public Knowledge argued that because 17 U.S.C §117 reserves to the computer user the right to make RAM copies to run the program, this construction of the EULA will allow Blizzard to retain rights it has never owned. Their amicus brief can be found here, and and Blizzard’s reply can be found here.

The Patry Copyright Blog notes the dismissal of the DMCA claim with approval but finds the copyright ruling to be wrongly decided and to also be a “chilling extension of control” by copyright holders over their products.

Corynee McSherry of the Electronic Freedom Foundation Blog also disagrees with the copyright ruling and notes other recent district court cases under Ninth Circuit jurisdiction which have come out differently, speculating that there will be an appellate decision on this matter soon.

A Note by Christina Hayes published at 22 Harv. J.L. & Tech. touched on whether Blizzard’s EULA could be enforced to limit users’ copyright fair use rights. (more…)

District Court Compels Disclosure of YouTube User Logging Records, Protects Source Code
By Jay Gill — Edited by Sarah Sorscher

Viacom International, Inc. v. YouTube, Inc.
S.D.N.Y., July 1st, 2008, No. 07 Civ. 2103
Order (Provided by Justia)

The District Court for the Southern District of New York partially granted a discovery motion made by Viacom in its copyright suit against YouTube and YouTube’s parent company Google. The order compels Google to produce the contents of YouTube’s logging database, including the login IDs, IP addresses, and viewing information of YouTube users. The court denied Viacom’s motion to compel production of the protected source code for the Google search engine.

Viacom’s complaint alleges that YouTube is directly or vicariously liable for duplication of copyrighted material on youtube.com, and seeks damages of over $1 billion and injunctions against further infringing conduct.

Wendy Seltzer at the Citizen Media Law Project summarizes the bifurcated outcome of the case: “trade secret wins; privacy loses.” Kurt Opsahl of the Electronic Frontier Foundation calls this a “setback to privacy rights,” and argues that some of the login names and IP address information, which the court states are anonymous, can in fact be used to identify individual users.
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Eleventh Circuit Applies Copyright Act’s Collective Works Provision to CD-ROM Collection
By Dmitriy Tishyevich — Edited by Andrew Ungberg

Greenberg v. National Geographic Society
11th Circuit, June 30, 2008, No. 05-16964
Slip Opinion

On June 30, the Eleventh Circuit issued a divided en banc opinion, affirming by a 7-5 vote the panel decision in Greenberg II, which had vacated Greenberg I.

Writing for the majority, Judge Barkett held that National Geographic was privileged to reproduce its print issues. Section 201(c) of the Copyright Act distinguishes between the copyright of each individual work within a collective work — here Greenberg’s photographs — and copyright of the collective work in its entirety, here National Geographic’s “Complete National Geographic” (“CNG”), a CD-ROM collection of all the back issues of the National Geographic magazine. Citing New York Times v. Tasini, Judge Barkett wrote that § 201(c) granted the publisher privilege to reproduce an article contributed by a freelancer when it was part of (1) the collective work to which the author originally contributed; (2) any revision of that work; or (3) any later collective work in the same series. Emphasizing the importance of the context in which the works were presented, Judge Barkett found that the CNG CD-ROM collection qualified as a “revision” under § 201(c) and Tasini’s interpretation of the term.

William Patry comments favorably on the majority opinion on his blog, and notes that a grant of certiorari is unlikely as there is no split in the circuits, and the issues decided are close to Tasini. He previously criticized Judge Birch’s approach as at odds with copyright’s constitutional goal of promoting the progress of science. Law.com provides a summary of the decision and the procedural history 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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District Court Denies Yoko Ono Lennon’s Motion for Injunctive Relief
By Nicola Carah — Edited by Evie Breithaupt

Lennon v. Premise Media Corp.
S.D.N.Y., June 2, 2008, No. 08cv03813
Slip Opinion

The District Court for the Southern District of New York denied Yoko Ono Lennon’s motion for preliminary injunctive relief in a case involving Premise Media Corp.’s use of a fifteen-second clip of the song “Imagine” in Expelled, its controversial documentary about intelligent design. The court found that the plaintiffs failed to show a clear likelihood of success on the merits — required to obtain preliminary injunctive relief — because the defendants were likely to succeed in asserting an affirmative defense of fair use.

The court looked to the fair use factors articulated in § 107 of the Copyright Act of 1976: “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.” Although Expelled is commercial in nature, the court found that the movie’s use of “Imagine” is “highly transformative, and not merely exploitative.” According to the court, the pairing of the lyrics and accompanying music to a sequence of images provided “a layered criticism and commentary of the song.” The court concluded, therefore, that defendants were likely to prevail on their fair use defense.

Expelled is a feature-length film that, according to one producer, “examines the scientific community’s academic suppression of those who ask provocative questions about the origin and development of life.” It is narrated by actor and writer Ben Stein, who graduated as valedictorian from Yale Law School in 1970, and who recently has become a proponent of Intelligent Design theory. (more…)

Supreme Court Leaves in Place Eighth Circuit Test Favoring First Amendment Protection for Fantasy Sports
By Dmitriy Tishyevich — Edited by Evie Breithaupt

Major League Baseball Advanced Media v. C.B.C. Distribution and Marketing
8th Circuit, Oct 16, 2007, cert. denied June 2, 2008
Eighth Circuit Opinion, Supreme Court Order

On June 2, the Supreme Court denied petition for a writ of certiorari from Major League Baseball Advanced Media (“MLB”). MLB had sought to appeal the Eighth Circuit’s decision, which held that the First Amendment interests in public information about baseball and baseball players outweighed the players’ state law right of publicity.

The Eighth Circuit affirmed the district court, which had granted summary judgment to CBC, a producer of fantasy major league baseball games. CBC sought a declaratory judgment that it may use, without license, the names of and information about major league baseball players in connection with its for-profit fantasy baseball products.

The Eighth Circuit found that MLB had provided sufficient evidence to establish a cause of action for violation of players’ rights of publicity under Missouri law. It held, however, that under Supreme Court precedent, a state law right of publicity must be balanced against First Amendment considerations. The court found that the CBC’s First Amendment rights superseded the players’ rights of publicity. The majority noted that information meant only to provide entertainment still enjoys First Amendment protection, and it reasoned that the significant public value of information about “the national pastime” entitles it to substantial protection. It noted also that as the information used by CBC was already available in the public domain, it would be “strange law” if CBC did not have a First Amendment right to use information available to everyone else. The court was not persuaded that CBC had violated the economic interests of the players which the right of publicity seeks to protect, noting that the players were already adequately compensated for their participation in games. It also rejected the argument that the non-economic interests protected by the right of publicity, such as rewarding celebrity labors and avoiding emotional harm, were violated, finding that none of these interests were implicated in the context of fantasy baseball.

Judge Colloton dissented. He agreed with the majority’s analysis of the right to publicity and the application of the First Amendment to fantasy baseball, but disagreed as to its resolution of the contractual dispute between the parties.

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European Court of Justice holds that EU law does not require ISPs to disclose subscriber information

By Daniel Ray — Edited by Wen Bu

Productores de Música de España (Promusicae) v. Telefónica de España S.A.U.
European Court of Justice (Grand Chamber), January 29, 2008
Case C-275/06, 2008 CELEX no 62006J0275 (Jan. 29, 2008)
Opinion

On January 29, the European Court of Justice issued a Grand Chamber ruling in Promusicae v. Telefónica. The court held that European law does not require Internet service providers (ISPs) to disclose their subscribers’ identities to trade organizations for the purpose of civil litigation against them, but that European law also does not prohibit member states from imposing such requirements if the legislation sufficiently balances IP and privacy rights.

David Meyer of ZDNet UK summarizes the decision, and quotes a British ISP spokesperson who claims the ruling vindicated ISPs’ self-policing efforts.
Nikki Tait of the Financial Times cites mixed opinions from copyright holders on whether the Court’s leaving open to member states the option of legislating stricter controls will help protect copyrighted content.
Eric Bangeman of Ars Technica notes that copyright holders still have recourse because criminal charges may be brought against infringers, but that some European nations have been unwilling to press charges for copyright infringement.
Gwen Hinze of the Electronic Frontier Foundation notes that any victory for privacy advocates may be short-lived, as the decision may impel copyright holders to step up their legislative efforts to impose intermediary liability on ISPs or pan-European criminal penalties on filesharers.

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Second Circuit Holds Copyright Class Action Claims Must Be Based on Registered Copyright

By Andrew Ungberg — Edited by Wen Bu

In Re Literary Works in Electronic Databases Copyright Litigation
Second Circuit, November 29, 2007, No. 05-5943-cv(L)
Slip Opinion

On November 29, the Court of Appeals for the Second Circuit vacated and remanded a decision of the District Court for the Southern District of New York to certify a class of freelance authors and accept a settlement of their copyright infringement claims. The claims arose from unauthorized reproduction of the authors’ works on internet sites and web databases.

The Second Circuit vacated the district court’s ruling on jurisdictional grounds. Citing Section 411(a) of the Copyright Act, which provides that claims will not be instituted until preregistration or registration of the copyright claim has been made, the court held that the district court lacked jurisdiction over the claims raised by the majority of the class members, who had not registered their works. The court held that because § 411(a) requires each class member’s claims to be based on a registered copyright, the district court lacked the authority to both certify the class and accept any settlement.

Richard Pérez-Peña of the New York Times reports on the decision.
Google’s William Patry sharply disagrees with the court’s reading of § 411(a).
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Stronger 1st Amendment Review of Expansions in Copyright Protection?

By Nick Bramble

On September 5, the 10th Circuit handed down its opinion in Golan v. Gonzales, No. 05-1259 (10th Cir. Sept. 4, 2007). The court held that the implementation of the Berne Convention on Copyrights (the Uruguay Round Agreements Act § 514) may violate the 1st Amendment by removing some materials–books, films, and songs, mostly–from the public domain and placing them under copyright protection. Generally, the court’s ruling would expand the scope of 1st Amendment review when Congress acts to change copyright law. The court reasoned that if Congress alters the “traditional contours of copyright protection,” then its actions should be subject to strict or intermediate scrutiny. See Slip Op. 05-1259 at 16. The 10th Circuit concluded that URAA § 514 did alter these “traditional contours” by deviating from the “bedrock principle of copyright law that works in the public domain remain in the public domain.” Id. at 16-17. It remanded to the district court to determine whether § 514 was a content-based or content-neutral restriction on speech and to apply the necessary 1st Amendment review.

From the free culture side of the copyright debate, Jack Balkin celebrates the ruling but cautions that its overreliance on Eldred v. Ashcroft’s “traditional contours of copyright law” test might justify expansions of copyright law if it can be shown that new copyright laws “create differences only in degree rather than kind” and “are part of a gradual historical progression of increased copyright protection.” Larry Lessig weighs in on Golan’s relevance to his petition to the Supreme Court to grant review of Kahle v. Gonzales, a recent 9th Circuit ruling that looked less favorably on a similar constitutional challenge to copyright law. William Patry is far less enthusiastic, calling the ruling “the first vindication of an approach argued by Larry Lessig and colleagues that I had thought made no sense at all.”