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Second Circuit: Supreme Court Google Precedent Doesn’t Alter Copyright Law’s Fair Use Analysis

By Sarah Bro on Sep 2, 2021
Posted In Copyrights

Addressing fair use as an affirmative defense to copyright infringement, the US Court of Appeals for the Second Circuit amended its recent opinion, reversing a district court’s summary judgment in favor of fair use. The Court did not change its original judgment but took the opportunity to address the recent Supreme Court of the United States precedent in Google v. Oracle. The Andy Warhol Foundation for the Visual Arts, Inc. v. Lynn Goldsmith, Lynn Goldsmith, Ltd., Docket No. 19-2420-cv (2d Cir., Aug. 24, 2021) (Lynch, J.) (Jacobs, J., concurring).

Lynn Goldsmith and Lynn Goldsmith, Ltd. (collectively, LGL) appealed from a district court judgment that granted summary judgment to The Andy Warhol Foundation for the Visual Arts, Inc. (AWF) on its complaint for a declaratory judgment of fair use and dismissing defendants-appellants’ counterclaim for copyright infringement. The Second Circuit reversed and remanded for further proceedings.

In 1984, LGL’s agency licensed her 1981 photograph of Prince to Vanity Fair for use as an artist reference for creating a rendering of Prince to accompany Vanity Fair‘s profile of the artist. What LGL did not learn until more than 30 years later, shortly after Prince’s untimely death, was that the artist commissioned by Vanity Fair to create the Prince drawing was Andy Warhol and that Warhol had used the photograph to create an additional 15 silkscreen prints and illustrations, known as the Prince Series. In 2017, LGL notified AWF, as the successor to Warhol’s copyright in the Prince Series, of her claims of copyright infringement. AWF responded with a lawsuit seeking a declaratory judgment that the Prince Series works were non-infringing, or, in the alternative, qualified as fair use of LGL’s photograph. LGL countersued for infringement. Relying on the Second Circuit’s 2013 holding in the copyright case Cariou v. Prince, the district court granted summary judgment to AWF, agreeing with its assertion of fair use and considering the Warhol work to be “transformative” of the original.

LGL’s appeal required the Second Circuit to consider the four fair use factors under §107 of the Copyright Act:

The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes
The nature of the copyrighted work
The amount and substantiality of the portion used in relation to the copyrighted work as a whole
The effect of the use upon the potential market for, or value of, the copyrighted work.

In its March 2021 opinion, the Second Circuit rejected AWF’s fair use defense, concluding that the Prince Series was not transformative and substantially similar to LGL’s original photograph.

After the Second Circuit’s initial disposition of the appeal, the Supreme Court issued its decision in Google LLC v. Oracle America, Inc., which discussed the four fair use factors as applied to a computer programming language and found that Google’s copying of certain Oracle application programming interfaces (APIs) “to create new products . . . [and] expand the use [...]

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Paradise Lost: Art Created by AI Is Ineligible for Copyright Protection

By Jodi Benassi on Mar 3, 2022
Posted In Copyrights

The US Copyright Office Review Board (“Board”) rejected a request to register a computer-generated image of a landscape for copyright protection, explaining that a work must be created by a human being to obtain a copyright. Second Request for Reconsideration for Refusal to Register A Recent Entrance to Paradise (Copyright Review Board Feb. 14, 2022) (S. Perlmutter, Register of Copyrights; S. Wilson., Gen. Counsel; K. Isbell, Deputy Dir. of Policy).

In 2018, Steven Thaler filed an application to register a copyright in a work named “A Recent Entrance to Paradise.” Thaler listed as the author of the work the “Creative Machine,” a computer algorithm running on a machine. Thaler listed himself as a claimant and sought to register the work as a “work-for-hire” as the “owner” of the Creative Machine. The Board refused to register the work, finding that it lacked the necessary human authorship. Thaler requested reconsideration, arguing that the “human authorship requirement is unconstitutional and unsupported by either statute or case law.”

After reviewing the work a second time, the Board found that Thaler provided no evidence of sufficient creative input or intervention by a human author. The Board refused to abandon its longstanding interpretation of the Copyright Act, as well as Supreme Court and lower court precedent, that a work meets the requirements of copyright protection only if it is created by a human author. The Board concluded that “A Recent Entrance to Paradise” lacked the required human authorship and therefore affirmed refusal to register. Thaler filed for a second reconsideration.

The Board found that Thaler’s second request for consideration repeated the same arguments as his first request. Relying on the Compendium of US Copyright Office Practices (the Office’s practice manual), the Board found that Thaler provided neither evidence that the work was a product of human authorship nor any reason for the Board to depart from more than a century of copyright jurisprudence.

The Board explained that the Supreme Court of the United States, in interpreting the Copyright Act, has described a copyright as the exclusive right of a human and her own genius going back to 1884. The Board noted that the Supreme Court has repeatedly articulated the nexus between the human mind and creative expression as a prerequisite for copyright protection. The human authorship requirement is further supported by the lower courts. For example, in 1997 the US Court of Appeals for the Ninth Circuit held in Urantia Found. v. Kristen Maaherra that a book containing words “‘authored’ by non-human spiritual beings” can only gain copyright protection if there is “human selection and arrangement of the revelations.”

The Board further explained that federal agencies have followed the courts. In the 1970s, the National Commission on New Technological Uses of Copyrighted Works (CONTU) studied the creation of new works by machines. CONTU determined that the requirement of human authorship was sufficient to protect works created with the use of computers and that no amendment to copyright law was necessary. CONTU explained that “the eligibility of [...]

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Supreme Court to Consider Whether 17 U.S.C. § 411 Requires Referral to Copyright Office

By Amol Parikh on Jul 29, 2021
Posted In Cert Alert

The Supreme Court of the United States agreed to review whether a district court is required to request that the Register of Copyrights advise whether inaccurate information, if known, would have caused the Register to refuse registration of the plaintiff’s asserted copyright. Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., Case No. 20-915 (Supr. Ct. June 1, 2021) (certiorari granted). The question presented is:

Whether the U.S. Court of Appeals for the 9th Circuit erred in breaking with its own prior precedent and the findings of other circuits and the Copyright Office in holding that 17 U.S.C. § 411 requires referral to the Copyright Office where there is no indicia of fraud or material error as to the work at issue in the subject copyright registration.

In the circuit court decision, Unicolors, Inc. v. H&M Hennes & Mauritz, L.P. (9th Cir. May 29, 2020), the Ninth Circuit held that once a defendant alleges that (1) a plaintiff’s certificate of registration contains inaccurate information, (2) “the inaccurate information was included on the application for copyright registration” and (3) the inaccurate information was included on the application “with knowledge that it was inaccurate,” a district court is required to submit a request to the Register of Copyrights “to advise the court whether the inaccurate information, if known, would have caused [it] to refuse registration.”

Supreme Court to Consider Fraudulent Intent in Copyright Registration

By Paul Devinsky on Jun 3, 2021
Posted In Cert Alert, Copyrights

The Supreme Court of the United States agreed to consider whether a copyright registration accurately reflecting a work can nevertheless be invalidated without fraudulent intent. Unicolors Inc. v. H&M Hennes & Mauritz LP, Case No. 20-915 (Supr. Ct. June 1, 2021) (certiorari granted)

The US Court of Appeals for the Ninth Circuit reversed a district court decision awarding Unicolors a copyright infringement award of $800,000 as well as attorneys’ fees. The Ninth Circuit ruled that although Unicolors improperly registered the copyright (in a fabric design) as part of a “single-unit registration,” the district court was wrong to find intent to defraud the US Copyright Office—a requirement for invalidating a registration.

The issue presented is:

Ahoy There: If License Terms Not Clearly Intended to Be a Condition Precedent, It’s a Covenant

By Paul Devinsky on Mar 4, 2021
Posted In Copyrights

The US Court of Appeals for the Federal Circuit held that the US Court of Federal Claims erred by failing to consider defendant’s non-compliance with the terms of an implied license, vacating the claims court’s finding of non-infringement and remanding the case for a calculation of damages. Bitmanagement Software GmbH v. U.S., Case No. 20-1139 (Fed. Cir. Feb. 25, 2021) (O’Malley, J.) (Newman, J., concurring).

Bitmanagement Software filed suit against the US government for infringement of its copyrighted graphics-rendering software, BS Contact Geo. The claims court found that Bitmanagement had established a prima facie case of copyright infringement based on the US Navy’s copying of the software onto all computers in the Navy Marine Corps Intranet, but found that the Navy was not liable for infringement because Bitmanagement had granted the Navy an implied license to make such copies. Bitmanagement appealed, arguing that:

The claims court erred in finding an implied-in-fact license between the parties.
An implied-in-fact license was precluded as a matter of law.
Even if an implied-in-fact license existed, the claims court erred by failing to consider whether the Navy had complied with the terms of the license.

The Federal Circuit did not disturb the claims court’s findings with respect to the existence of an implied license authorizing the Navy to make copies of Bitmanagement’s software.

The Federal Circuit further declined to apply its preclusion rule as set forth in Seh Ahn Lee, i.e., that “the existence of an express contract precludes the existence of an implied-in-fact contract dealing with the same subject matter,” because the Navy and Bitmanagement never actually entered into an express contract with one another. Rather, both parties entered into express contracts with a third party, Planet 9, through which they intentionally chose to conduct their business. The express contracts “do not capture or reflect the discussions that occurred between the Navy and Bitmanagement directly,” nor do they cover the topic of the implied license between the parties, “i.e., the license to copy BS Contact Geo onto all Navy computers.”

With respect to Bitmanagement’s claim that the Navy failed to comply with the terms of the implied license, the Court considered whether a term requiring the Navy’s use of Flexera, a license-tracking software, was a condition that limited the scope of the license, or merely a covenant. The Court explained that a term of a license is presumed to be a covenant—addressable only in contract—rather than a condition, unless it is clear that the term was intended to be a condition precedent. Accepting the lower court’s factual findings that “Bitmanagement agreed to [the] licensing scheme because Flexera would limit the number of simultaneous users of BS Contact Geo, regardless of how many copies were installed on Navy computers,” the Court found that the required use of Flexera was a condition of the license. The Court found there was no reason Bitmanagement would have entered into an implied license that allowed mass copying of its software without the use of Flexera because, absent [...]

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2020 IP Law Year in Review: Copyrights

By Christina (Tina) L. Martini, Jodi Benassi and Cecilia Choy, Ph.D. on Feb 2, 2021
Posted In Copyrights

Executive Summary

Copyright jurisprudence in 2020 was, in many ways, a study in the scope of copyright protection. While certain courts brought century-year-old precedent to the forefront to interpret the scope of copyrights, other courts ruled overruled 40 years of precedent to even the playing field between popular works and works that are less known.

In the wake of the US Court of Appeals for the Ninth Circuit’s pivotal copyright decision in the Led Zeppelin “Stairway to Heaven” lawsuit, several district courts, within and outside California, have relied on the en banc decision to resolve similar issues related to copyright infringement. The defining scope of the Zeppelin decision will have long-lasting effects within the music industry and beyond.

Copyrights

2021 Outlook

There is plenty to look forward to in 2021. We are certain to see big ripples from the Supreme Court decision in Google v. Oracle; whether it will “upend the world” is another story. Certainly the Court may rule on the extent to which software should be afforded copyright protection and the degree to which fair use applies to software copyrights. One thing is for sure—both sides agree that the future of software innovation is at stake. We are also certain to see a rising tide of cases relying on Skidmore v. Led Zeppelin, as we have already seen with the Katy Perry and Ed Sheeran cases. With the elimination of the inverse ratio rule, less popular songs will have a fairer day in court. Finally, once the vaccines allow for the courtroom doors to open again, we expect to see a flood of copyright infringement jury trials that were put on hold in 2020. Indeed, 2021 is looking like a very busy year.

Read the full report.

Two Turntables, No Microphone: Using Technical Diagram Is Not Copyright Infringement

By Jodi Benassi on Dec 10, 2020
Posted In Copyrights

The US Court of Appeals for the Sixth Circuit affirmed a district court’s summary judgment grant with respect to a copyright infringement claim related to technical drawings, and reversed the court’s summary judgment grant related to software source code. RJ Control Consultants, Inc. et al. v. Multiject, LLC, et al., Case No. 20-1009 (6th Cir. Nov. 23, 2020) (Donald, J.)

In 2008, Paul Rogers, through his company RJ Control Consultants (RJC), entered into an oral agreement with his friend Jack Elder, through Elder’s company Multiject. Rogers agreed to develop a rotary turntable control system (not for music, but to control a molding system) for Elder, calling the product “Design 3.”

In 2014, Elder asked Rogers for copies of Design 3’s technical diagrams as well as the software source code “in case something happened” to Rogers. Rogers provided the information to Elder, believing that Elder would not improperly use or disclose the information to others. Three days later, Elder informed Roger that he no longer needed Roger’s services and would instead use RSW Technologies for the assembly and wiring of the system. Elder claimed that he was increasingly concerned with Roger’s pricing and decided to switch out Rogers and RJC for RSW. Multiject and RSW used Design 3, both the technical drawings and the source code, in the assembly and wiring of identical new systems.

In 2016, Rogers obtained two copyright registrations, one for the technical diagrams and one for the source code. RJC filed a complaint for several federal and state law claims, including copyright infringement. Multiject and RSW filed motions for summary judgment on all claims, including dismissal of the copyright claims, which the district court granted. RJC appealed.

Multiject and RSW argued that copyright protection did not extend to the software at issue because the software embodied a procedure, a system and a method of operating an injection molding machine, and that is not eligible for copyright protection. They also argued that the use of copyrighted technical drawings to produce a control system did not constitute copyright infringement of the technical drawings for the same reasons that making a recipe out of a copyrighted cookbook does not constitute copyright infringement of the cookbook. Multiject and RSW asserted that to the extent Rogers sought to protect the “use” of his technical drawings to create something else, he should have sought protection under patent law—not copyright law.

The Sixth Circuit agreed. Because the source code and technical diagrams were registered, the validity of the copyrights was not contested. The Court first considered whether physical copying to reproduce the system contained in the drawings was copyright infringement. The Court noted that whether the drawings were themselves reproduced was a separate question from whether the drawings were used to create the system portrayed in that drawing. The Court found that the “manufacture of the control system from the copyrighted technical drawing was not copyright infringement because the recreation of a control system by using a copyrighted technical drawing is not ‘copying’ for [...]

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Copyright Damages Limited to Three Years Before Lawsuit Filing

By Amol Parikh on May 27, 2020
Posted In Copyrights

Addressing a myriad of issues relating to copyright law, the US Court of Appeals for the Second Circuit found that the discovery rule applies for statute of limitations purposes in determining when copyright claims accrue, but damages are limited to three years before filing of the lawsuit. Sohm v. Scholastic Inc., Case Nos. 10-2110, -2445 (2d Cir. May 12, 2020) (Sullivan, J.).

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What’s the Deal with Comedians?: Too Late for Copyright Claim against Seinfeld

By Sarah Bro on May 19, 2020
Posted In Copyrights

In a non-precedential ruling by summary order, the US Court of Appeals for the Second Circuit affirmed the dismissal of a copyright infringement lawsuit filed against famed comedian Jerry Seinfeld, finding that the defendant’s claims, which accrued in 2012, were time-barred. Christian Charles v. Jerry Seinfeld, et al., Case No. 19-3335 (2d Cir. May 7, 2020) (Summary Order).

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SCOTUS Sinks the CRCA, Confirms States are Immune from Copyright Suits

By Sarah Bro on Apr 2, 2020
Posted In Copyrights

The Supreme Court of the United States issued a unanimous decision invalidating the Copyright Remedy Clarification Act (CRCA), a 1990 statute intended to provide copyright owners with the power to sue a US state government for infringement, and held that states cannot be sued for copyright infringement. Allen v. Cooper, Case No. 18-877 (Supr. Ct. Mar. 23, 2020) (Kagan, Justice) (Thomas, Justice, concurring) (Breyer and Ginsburg, Justices, concurring).

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