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De Minimis Defense Doesn’t Protect Minimal Use of Concededly Infringing Material

The US Court of Appeals for the Ninth Circuit reversed a district court’s grant of summary judgment in favor of the defendant in a copyright case based on a “minimal usage” or de minimis use defense. Richard N. Bell v. Wilmott Storage Services, LLC, et al., Case Nos. 19-55882, -56181 (9th Cir. July 26, 2021) (Wardlaw, J.) (Clifton, J., and Choe-Groves, J., concurring).

Richard Bell took a photo of the Indianapolis skyline and published it on various websites. Eleven years later, he registered the photo with the US Copyright Office. Bell later conducted an online reverse image search of his photo to identify potential infringers and subsequently filed more than 100 copyright infringement lawsuits. One of the sites on which Bell found the photo was VisitUSA.com. The image was only available to those who had conducted a reverse image search or knew the precise web address to the photo. Wilmott Storage Services purchased VisitUSA.com in 2012. In 2018, Bell notified Wilmott that it was displaying the photo without his permission. Wilmott removed the photo in response to Bell’s request. In 2019, Wilmott continued to display a copy of the photo, but at a slightly different address than before. Wilmott explained that its webmaster was supposed to remove the photo but instead only changed the file name. Wilmott subsequently removed the photo.

Bell sued Wilmott for copyright infringement in 2018, asserting that Wilmott infringed his right to “display the copyrighted work publicly” by making it accessible to the public on Wilmott’s server. Assuming infringement, Wilmott filed for summary judgment based on the affirmative defenses of de minimis use, fair use and the statute of limitations. The district court granted summary judgment to Wilmott on the de minimis use defense. Although Wilmott conceded that an identical copy of the photo was hosted on its server, the district court found no infringement. Bell appealed.

The Ninth Circuit noted that it had not previously addressed the issue of whether one “publicly displays” a work where it is accessible only to members of the public who either possess the specific pinpoint address or who perform a particular type of online search—here, a reverse image search. Applying Ninth Circuit precedent from Perfect 10, the Court concluded that Wilmott publicly displayed the photo.

The Ninth Circuit also found that there was no place for an inquiry into whether there was de minimis copying because the “degree of copying” was total since the infringing work was an identical copy of the copyrighted photo. The Court explained that it and a majority of other circuits do not view the de minimis doctrine as a defense to infringement but rather as an answer to the inquiry whether an infringing work and copyrighted work are substantially similar so as to make the copying actionable. The Court reiterated that the de minimis defense applies to the amount of copying, not to the extent of the defendant’s use of the infringing work. The Court also explained that the de minimis copying defense is [...]

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

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:

  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
  4. 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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Unhappy Together: No Right of Public Performance under California Copyright Law

Addressing for the first time whether California law establishes a right of public performance for the owners of pre-1972 sound recordings, the US Court of Appeals for the Ninth Circuit found no such right for music and overturned a district court’s grant of partial summary judgment. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., Case No. 17-55844 (9th Cir. Aug. 23, 2021) (Lee, J.)

In 1971, Howard Kaylan and Mark Volman of the rock band the Turtles formed Flo & Eddie to control the band’s song rights, including the hit song “Happy Together.” In 2013, Flo & Eddie filed a complaint alleging a violation of California common law and statutory copyright law arising out of Sirius XM’s playing of songs to which Flo & Eddie control the rights. Based on California’s copyright statute (Cal. Civ. Code § 980), Flo & Eddie argued that California law gave it the “exclusive ownership” of its pre-1972 songs—including the right of public performance—which required compensation whenever Flo & Eddie’s copyrighted recordings were publicly performed.

The district court granted partial summary judgment to Flo & Eddie in 2014, finding that California law protected sound recording owners’ right of public performance by granting “exclusive ownership” to the music, and therefore, Sirius XM must pay for playing pre-1972 music. The district court reasoned that “the plain meaning of having ‘exclusive ownership’ in a sound recording is having the right to use and possess the recording to the exclusion of others,” and further explained that there is “nothing in that phrase to suggest that the legislature intended to exclude any right or use of the sound recording from the concept of ‘exclusive ownership.’” The district court looked to individual dictionary definitions of the words “exclusive” and “ownership” to craft a broad meaning for the phrase “exclusive ownership,” ultimately finding that it must include the “right of public performance.” Sirius XM appealed.

In an opinion artfully embroidered with classic rock references, the Ninth Circuit found that the district court erred in finding that “exclusive ownership” under § 980(a)(2) included the right of public performance and remanded for entry of judgment consistent with the parties’ contingent settlement agreement. The Court faulted the district court’s dictionary-based approach to statutory interpretation, instructing that “[d]ictionaries and tools of grammatical construction can help determine plain meaning of specific words, but some phrases have a separate or more specialized ‘term of art’ meaning that cannot be stripped away from its historical context or subject matter area.” To that end, the Court took an expressly textualist approach to interpreting California’s law, looking back to common law in the 19th century when California first used the term “exclusive ownership” in its copyright statute in order to inform the understanding of that term as used at the time.

Based on this inquiry, the Ninth Circuit found that there was no recognized right of public performance for music and that California only protected unpublished works. The Court explained the distinction, stating that “[c]ommon law provides a perpetual copyright [...]

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When Pictures Aren’t Pictures: Real Estate Agent-Generated Floor Plans Are Outside Copyright Infringement Exception for Pictorial Representations

Examining whether the Architectural Works Copyright Protection Act enacted in 1990 protects the creation of floor plans, the US Court of Appeals for the Eighth Circuit held that such technical drawings generated for practical, rather than artistic, purposes are not covered by a statutory exception that removes the right to control pictures, paintings, photographs or other pictorial representations of their work from architects. Designworks Homes, Inc. et al. v. Columbia House of Brokers Realty, Inc. et al., Case Nos. 19-3608, 20-1099, -3104, 20-3107 (8th Cir. Aug. 16, 2021) (Arnold, J.)

The facts of the case are relatively simple: In the course of selling designed homes, homebuilders hired real estate agents to generate floor plans for use in their listings. The designers of the homes registered copyrights in the homes themselves, then sued the homebuilders and their real estate agents for copyright infringement.

The issue for the Court was whether 17 U.S.C. § 120(a), a statute designed to limit the scope of copyright protection for architectural works, applied to the floor plans that the real estate agents developed. Section 120(a) excludes from the scope of a copyright in an architectural work “the right to prevent the making, distributing, or public display of pictures, paintings, photographs, or other pictorial representations of the work.” The district court held that the floor plans fell within Section 120(a)’s exclusion and, thus, were not covered by the copyright.

The Eighth Circuit disagreed. Employing numerous canons of statutory construction, the Court held that the functional floor plans were neither pictures nor “other pictorial representations” within the meaning of the statute. Drawing from 1990s dictionaries, the Court reasoned that although a floor plan could conceivably be a picture, context showed otherwise. For example, Congress used the phrase “technical drawings” elsewhere in the copyright statute; thus, had Congress intended to exclude them here, it knew how to do so. Moreover, the types of floor plans at issue here were—in the Court’s view—not similar to the other listed categories of items for which copyright protection had been curtailed as the plans did not have any artistic expression.

Practice Note: Not all hope is lost for the homebuilder or developer. Although the Eighth Circuit declined to expressly consider other defenses, it explained that there were others that very readily could apply, including the doctrine of fair use.




Publisher’s Co-Authorship Claim Arises Under Copyright Act, Invoking Exclusive Federal Jurisdiction

The US Court of Appeals for the Fifth Circuit reversed a district court’s dismissal of a copyright authorship dispute, finding that the district court had exclusive jurisdiction over the case because a book publisher’s claim of co-authorship arose under the federal Copyright Act, not state contract law. Di Angelo Publ’ns, Inc. v. Kelley, Case No. 20-20523 (5th Cir. Aug. 12, 2021) (Higginbotham, J.)

Makeup artist Jentry Kelley and Di Angelo Publications entered into a publishing contract for Kelley’s cosmetics book. Kelley provided Di Angelo with an initial three-page manuscript, which Di Angelo claimed it then transformed into a book while communicating and collaborating with Kelley. The book listed Kelley only as the holder of the book’s copyright. After an initial 1,000-copy print run, Kelley asked Di Angelo to prepare an updated or revised version of the book for sale. Di Angelo claimed it had prepared the updated work when it discovered that Kelley was attempting to work directly with Di Angelo’s printer to reduce the costs she would incur selling the revised edition, which violated the parties’ contract.

After unsuccessful overtures to the printer, Kelley filed a complaint in Harris County, Texas, asking for rescission of the parties’ contract because Di Angelo intentionally misled her regarding publishing costs and overcharged her for publishing services. Kelley alleged that she was the sole copyright owner and that Di Angelo did not develop or have any intellectual property rights in connection with the book. Di Angelo counterclaimed for breach of contract, among other claims, and sought a declaratory judgment that Kelley failed to substantially perform under the contract. Di Angelo alleged that Kelley had prevented it from selling the updated edition of the book.

Following partial summary judgment in favor of Kelley, including on the declaratory judgment claim, Di Angelo filed suit in the Southern District of Texas. Di Angelo disputed Kelley’s claim to exclusive copyright ownership and asserted a single claim for relief: A declaration that Di Angelo owned the copyright in the two editions of the book, as well as any derivative works, and had rights in their printing and distribution. Additionally,Di Angelo alleged that it acquired copyrights in the books by “writing, editing, planning and taking all photographs and making all illustrations, and planning, designing, and arranging the layout” of the book. Kelley moved to dismiss Di Angelo’s declaratory relief claim, characterizing the suit as an end-run around the Harris County rulings against Di Angelo and arguing that there was no federal jurisdiction because Di Angelo’s claim was premised solely on Kelley’s alleged breach of the contract, which was governed by Texas law. Di Angelo responded that resolution of the authorship dispute required the district court to interpret federal copyright law, including definitional and ownership provisions, which the state court lacked jurisdiction to address. The district court agreed with Kelley on the jurisdictional question and granted the motion to dismiss. Noting that the parties’ contract referred to Kelley as the “author,” the district court found that that Di Angelo’s claim [...]

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IP Ownership Considerations in Multi-jurisdictional Software Development Agreements

As a result of the healthcare sector’s growing dependence on software, health IT companies are increasingly taking advantage of globalisation to engage contractors in low wage jurisdictions to develop their user-facing software applications. This can trigger unforeseen legal risks owing to the differing laws across jurisdictions related to the ownership and transfer of intellectual property (IP) rights.

At the most extreme end, best practices in some jurisdictions are unenforceable or even impermissible in others. In view of these issues, it is strongly recommended that a company looking to take advantage of cross-border contracting for critical development eorts should carefully consider the choice of law provisions in their agreements, and engage with local counsel to ensure proper vesting of intellectual property rights.

An inability to demonstrate proper ownership of such rights can be a substantial obstacle for later financings or in corporate activities. Depending on the jurisdictions involved, a contracting company may need to concern itself with at least three types of IP in the software that is developed on its behalf: copyrights, moral or author’s rights, and patents.

Click here to read the full article in our latest edition of International News.




Supreme Court to Consider Fraudulent Intent in Copyright Registration

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:

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.




Not With a Bang but a Whimper

In a non-precedential Order issued by the US Court of Appeals for the Federal Circuit—on remand from the US Supreme Court’s April 2021 decision upholding Google’s fair use defense to Oracle’s copyright infringement claim—the Court recalled its mandate in the case “solely with respect to fair use,” leaving intact the Federal Circuit’s May 2014 judgment favoring Oracle on the question of copyrightability. Oracle America Inc. v. Google LLC, Case Nos. 17-1118; 1202 (Fed. Cir. May 14, 2021)(PER CURIAM). After recalling its mandate, the Federal Circuit issued its order without further briefing by the parties.




Blueprint Blooper: Floor Plan Copyright Infringement Requires Virtually Identical Copying

Addressing whether a home builder’s floor plans infringed the plaintiff’s architectural copyrights, the US Court of Appeals for the Seventh Circuit affirmed a lower court’s entry of summary judgment against the plaintiff, finding that only a virtually identical design would infringe the plaintiff’s “thin copyright” in its floor plans. Design Basics, LLC v. Signature Construction, Inc., Case No. 19-2716 (7th Cir. Apr. 23, 2021) (Sykes, J.)

Design Basics, described bluntly by the Seventh Circuit as a “copyright troll,” holds copyrights in thousands of floor plans for suburban single-family homes. Design Basics sued Signature Construction (Signature) for infringement of 10 of its designs. Discovery showed that Signature held copies of four of Design Basics’ designs, one of which had been marked up by a Signature employee. Signature moved for summary judgment, relying on a 2017 Seventh Circuit opinion in Basic Designs v. Lexington Homes in which the Court found that Design Basics’ copyright protection in its floor plans was “thin.” The district court granted summary judgment against Design Basics, and this appeal followed.

Relying heavily on Lexington Homes, the Seventh Circuit took the opportunity to clarify the elements of a prima facie case of copyright infringement for works with “thin” copyright protection. The Court explained that to establish infringement, the plaintiff must prove (1) ownership of a valid copyright and (2) copying of original elements of the work. Because ownership was not contested in this case, the Court focused on the copying element. The Court explained that “copying” constitutes two separate questions: Whether the defendant actually copied the plaintiff’s protected work (as opposed to creating it independently) and whether the copying constituted wrongful copying, also known as unlawful appropriation.

Because there is rarely direct evidence of copying, circumstantial evidence may be used to infer actual copying, the Seventh Circuit explained. Proving actual copying by circumstantial evidence requires evidence of access to the plaintiff’s work and evidence of substantial similarity between the two works. The analysis of substantial similarity is not limited to the protected elements of the plaintiff’s work; any similarities may be probative of actual copying. However, the unlawful appropriation prong requires substantial similarities to the protected elements of the copyrighted work. The Court noted that the use of the same term for two different tests has caused confusion, and therefore implemented the term “probative similarity” when referring to actual copying, and “substantial similarity” in the case of unlawful appropriation. The Court went on to explain that in the case of thin copyright protection such as this, proving unlawful appropriation requires more than a substantial similarity; only a “virtually identical” plan will infringe.

The Seventh Circuit then turned to the issues of scènes à faire and merger. Citing its detailed analysis in Lexington Homes, the Court noted that arrangements of rooms in Design Basics’ floor plans were largely scènes à faire, deserving no copyright protection. For example, placement of the dining room near the kitchen and a bathroom near the bedrooms is rudimentary, commonplace and standard, and [...]

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Fourth Estate Registration Requirement Defeats Pro Se Copyright Infringement Plaintiff

The US Court of Appeals for the First Circuit affirmed dismissal of a copyright infringement claim for failure to register the copyright, and affirmed summary judgment against plaintiff on related state law claims where the plaintiff was deemed to have admitted statements that undermined its claims. Foss v. Marvic Inc., Case No. 20-1008 (1st Cir. Apr. 12, 2021) (Lynch, J.)

In 2006, sunroom purveyor Marvic contracted with graphic designer Foss to create a marketing brochure. Foss presented a $3,000 estimate, which Marvic paid, and Marvic began using the brochure soon after. In 2018, Foss (pro se) filed suit, demanding $264,000 for alleged copyright infringement on the basis that in 2016, she discovered that Marvic had been using a modified version of the brochure in print and online without asking for or receiving her permission. Foss alleged inaccurately that she had “applied for official U.S. Copyright Registrations” for the brochure.

Marvic moved to dismiss, and Foss filed an amended complaint stating six causes of action, including copyright infringement and five state-law claims. Foss alleged that she had registered the brochure with the US Copyright Office, but in fact she had only applied (after filing the original complaint) for registration. Marvic moved to dismiss the copyright and breach of contract claims. Foss did not oppose, and the district court dismissed the case. Foss then moved to reopen the case, a motion that the district court granted. Foss filed an opposition to Marvic’s earlier motion to dismiss and retained counsel, who first appeared on the day the district court heard Marvic’s motions.

In support of dismissal, Marvic argued that Foss had not established registration of her copyright, noting the then-existing circuit split as to whether mere application or successful registration was required to support a claim of infringement in federal court. The First Circuit stayed the case pending the Supreme Court’s decision in Fourth Estate. After the Supreme Court held that successful registration is required, the district court lifted the stay and dismissed the copyright claim but not the breach of contract claim.

Later, Marvic served a request for admissions, to which Foss’s counsel failed to respond. Marvic moved that the statements in its request be deemed admitted. The district court granted the motion. Two weeks later, Foss’s counsel moved to withdraw, having been suspended from the practice of law.

Foss, pro se again, moved for reconsideration and for more time to respond to the request for admissions, but the district court denied the motions. Marvic moved for summary judgment on the state law claims, which the district court granted, largely relying on Foss’s deemed admissions. Foss appealed.

The First Circuit held that it was not error to dismiss Foss’s copyright claim under Fourth Estate. The Court rejected as waived Foss’s argument that the district court should have stayed the case pending registration since Foss had not sought such relief below. The Court also rejected Foss’s argument that dismissal became improper when the failure to register was cured since the [...]

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