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Novel Derivative Sovereign Immunity Defense Struck as Forfeited

The US Court of Appeals for the Sixth Circuit affirmed a district court decision implementing a preliminary injunction and striking a new defense first asserted in an amended complaint as untimely and frivolous. ACT, Inc. v. Worldwide Interactive Network, Inc., Case Nos. 21-5889; -5907; -6155 (6th Cir. Aug. 23, 2022) (White, Bush, Reader, JJ.)

ACT publishes WorkKeys, a product designed to assess job performance skills. Three of the product’s assessments (Applied Mathematics, Locating Information and Reading for Information) were at issue in this case, and all included various “Skill Definitions” that describe the skills tested by the assessments. ACT and Worldwide Interactive Network (WIN) worked together from 1997 to 2011. During that time, WIN had the authority to develop and sell WorkKeys. After the business relationship ended, WIN began developing and promoting its own assessment tests.

In 2018, competing bids between ACT and WIN to provide educational material to the state of South Carolina showed that WIN’s “Learning Objectives” that were virtually indistinguishable from ACT’s Skill Definitions. ACT brought suit against WIN asserting claims, including copyright infringement, based on WIN’s alleged copying of ACT’s Learning Objectives. The district court granted partial summary judgment to ACT in March 2020 with the additional claims to go to trial, but trial was seriously delayed by COVID-19. During this time, WIN revised its Learning Objectives and claimed they no longer infringed. The district court ordered ACT to amend its complaint to include new allegations regarding the revisions. ACT complied. WIN then asserted a new derivative sovereign immunity defense in its amended answer, to which ACT objected. The district court agreed and struck the defense as untimely and frivolous. The district court entered a preliminary injunction in August 2021 barring WIN from distributing the original and revised Learning Objectives and assessments. WIN appealed, contesting the preliminary injunction and the striking of the defense.

After explaining its jurisdiction, the Sixth Circuit examined whether the district court had abused its discretion in imposing an overly broad preliminary injunction. Both the district court and the Sixth Circuit agreed that ACT was likely to succeed on its copyright claim. WIN’s argument on this issue was primarily based on its belief that the Skill Definitions were not creative or original to ACT and therefore were not copyrightable. The Court stated that while ACT’s selection of the skills was likely not copyrightable, the descriptions and arrangement of the skills were likely protectable. The Sixth Circuit also determined that the district court did not erroneously presume irreparable harm because it did not rely on a presumption but independently found irreparable harm. The Sixth Circuit also stated that the district court properly weighed the parties’ competing interests in the preliminary injunction and found minimal legitimate interest for WIN based on WIN’s business model essentially being infringement of ACT’s intellectual property.

The Sixth Circuit then explained why the district court properly struck the derivative sovereign immunity defense. While states generally enjoy sovereign immunity from suit, private contractors can sometimes obtain certain immunity in connection [...]

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So You Wanna Play with Copyright? “Joyful Noise” Ostinato Isn’t Original Expression

The US Court of Appeals for the Ninth Circuit affirmed a district court’s order vacating a jury award of damages for copyright infringement and granting judgment as a matter of law, explaining that the musical work alleged to have been copied did not qualify as an original work of authorship but consisted only of “commonplace musical elements.” Marcus Gray PKA Flame et al. v. Katheryn Elizabeth Hudson PKA Katy Perry et al., Case No. 20-55401 (9th Cir. Mar. 10, 2022) (Clifton, Smith, Watford, JJ.)

Key Definitions:

  • A musical scale is a sequence of musical notes or tones by pitch.
  • A subset of seven notes is called the minor scale and can be referred to with alphabetic names (A, B, C, etc.) or scale degrees (1, 2, 3, etc.).
  • An ostinato is a repeating musical figure (for example, 3-3-3-3-2-2).

In 2007, Marcus Gray (Flame) purchased an ostinato and used it in the song “Joyful Noise.” The song was released in 2008. While “Joyful Noise” did not achieve significant commercial success or airtime, it received millions of views online. In 2013, American singer-songwriter Katy Perry created “Dark Horse,” which was a hit, resulting in her performance at the Super Bowl halftime show in 2015.

The “Joyful Noise” ostinato consists of notes, represented as 3-3-3-3-2-2-2-1 and 3-3-3-3-2-2-2-6, whereas Dark Horse’s ostinato contains 3-3-3-3-2-2-1-5. Both have a uniform rhythm and equal note duration in time.

Plaintiffs sued Perry and her co-defendants for copyright infringement. Plaintiffs presented circumstantial evidence that the defendants had a reasonable opportunity to access “Joyful Noise” and that the ostinatos in both songs were substantially similar. Plaintiffs did not present direct evidence that Perry and the others had copied elements of the song, instead relying on testimony from their expert musicologist, Dr. Todd Decker.

Decker testified that the ostinatos were similar in many aspects, but he also testified that there was no single element that caused him to believe the ostinatos at issue were “substantially similar” when viewed “in isolation.” The jury also heard testimony from Perry’s expert, who disagreed altogether that the ostinatos were substantially similar.

The jury found that the defendants had a reasonable opportunity to hear “Joyful Noise” before composing “Dark Horse,” that the two songs contained substantially similar copyrightable expression and that “Dark Horse” used protected material from “Joyful Noise.” The jury found the defendants liable for copyright infringement and awarded $2.8 million in damages. The district court vacated the award and granted judgment as a matter of law to defendants, concluding that the evidence at trial was legally insufficient to show that the “Joyful Noise” ostinato was a copyrightable original expression. The plaintiffs appealed.

The Ninth Circuit explained that because the plaintiffs did not present any direct evidence that the defendants copied the “Joyful Noise” ostinato, they were required to show that the defendants had access to the work and that the ostinatos were substantially similar.

The Ninth Circuit began with its analysis [...]

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For Your Information, Eighth Circuit Upholds Copyright Protection for Database Compilation

The US Court of Appeals for the Eighth Circuit addressed the copyright protection afforded to an information database and whether comments made to a reporter while litigation was ongoing violated the disparagement clause in a separation agreement. Ultimately, the Court affirmed a judgment against the defendant for copyright infringement and against its founder for breach of contract. In doing so, the Court upheld the findings that plaintiff’s database copyright was valid, even though it was only entitled to a narrow scope of protection, and that the defendant’s founder’s comments to a reporter violated his contract with the plaintiff. Infogroup, Inc. v. DatabaseUSA.com LLC, Case No. 18-3723 (8th Cir. Apr. 27, 2020) (Benton, J.).

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