1709 Blog: for all the copyright community

Tuesday, 6 December 2016

Wild Boys Sometimes Lose It: Duran Duran fail to reclaim their US copyright

This post is by David Brophy writing on the IPKat

A few weeks after his eighteenth birthday, Duran Duran co-founder Nick Rhodes signed a music publishing agreement assigning his existing and future copyrights to a publisher, as did the other band members. None of them was aged more than 21 at the time.


Had they taken advice from a copyright lawyer at the time (1980), one can imagine a conversation along the following lines:


Duran Duran: Please please tell me now: Is there something I should know? Is there something I should say?
 Lawyer: You mean, is there something you should say, before your copyright goes away?
Duran Duran: That's funny, for a lawyer. But we didn't agree to pay you a hundred quid for your songwriting talents. What do you think about this contract?
Nick Rhodes, co-founder of Duran Duran (photo: Eva RinaldiCC BY_SA 2.0)
Lawyer: Well, you're agreeing here to assign all of your existing and future copyrights worldwide for their full term. That's pretty standard stuff. But there's a new Copyright Act in the United States, just two years old, and it will allow you to reclaim your copyright from the publishers after 35 years. Which is nice, though it does rather assume anyone will be buying your records in 2015 (no offence). 
Duran Duran: Eh thanks. What exactly should we do? 
Lawyer: When the 35 year mark is approaching, you'll simply serve a notice on the publisher. Tell them you want your copyright back, lodge a copy of the Notice with the Copyright Office and hey presto it will revert to you. So in your contract, you could include a clause stating that the assignment is without prejudice to your rights under section 203 of the US Copyright Act to terminate the assignment of the US copyright. 
Duran Duran: They'll never go for it. Have you seen our haircuts? They won't change their standard contract for us. And if they don't sign us up, nobody will.
Lawyer: Well don't worry about it. When Congress was passing the law, they had unequal relationships like that in mind. Here's what they say in House Report 94–1476 introducing the law: 
"A provision of this sort is needed because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited ... Instead of being automatic, as is theoretically the case under the present renewal provision, the termination of a transfer or license under section 203 would require the serving of an advance notice within specified time limits and under specified conditions. However, although affirmative action is needed to effect a termination, the right to take this action cannot be waived in advance or contracted away."  
And it's right here in section 203(5): "Termination of the grant [of a transfer or licence of copyright] may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant." So basically, it doesn't matter what you sign now. You can't contract away the right to claim the copyright back when the time comes. 
Duran Duran: Cool. Now about your fees. We've been thinking. Maybe we can cut you in on the royalties for our first three albums instead? 
Lawyer: Thank you, but my understanding is that you have never even been inside a recording studio. I think I'd prefer the hundred pounds we agreed on. In cash please, boys.
Factual background

This conversation never happened of course, and indeed we don't know if the band took any advice or knew about the possibility of claiming the US copyright back in the future. What we do know is the band members signed a music publishing agreement assigning the "entire copyrights" in their existing and future works for the "full term" of the copyrights, to Gloucester Place Music Ltd (then called Tritec Music Ltd, and now part of the Sony/ATV group).

In 2014, with the 35 year point approaching, band members Nick Rhodes, Simon Le Bon, John Taylor, Andy Taylor and Roger Taylor, duly served Notices under section 203 in respect of 37 songs, including most of their best-known works like "Girls on Film", "Rio", "Hungry Like The Wolf" and "Is There Something I Should Know?".


Gloucester Place Music responded by seeking a determination from the English High Court that such Notices, if not retracted, would represent a breach of contract, i.e. by improperly terminating an assignmentwhich the band members had no right to do.

Effect of contractual agreement


Mr Justice Arnold has decided in favour of the publisher and against the band members. The case is Gloucester Place Music Ltd v Le Bon & Ors [2016] EWHC 3091 (Ch). His decision is based on the fact that the contract was made under English law, and on its proper interpretation the parties are assumed to have been aware when entering into the Agreements, at least in general terms, of the effect of section 203, and to have nevertheless contracted away the US copyright for its full term. He summarised at [44]:


"The language of clause 3(a) is wide and general. Particularly when read together with clause 4, I consider that what the language would have conveyed to a reasonable person having the relevant background knowledge was that the parties' intention was that the "entire copyrights" in the Compositions should vest, and remain vested, in the Claimant for the "full term" of the copyrights. That implicitly precludes the Group Members from exercising rights under US law which have the result that the Claimant's ownership of the copyrights is brought to an end prior to their expiry. Moreover, this interpretation is reinforced by clause 6(b), by which the Group Members promised not to transfer any interest in the copyrights to any other person, which I read in context as meaning any person other than the Claimant. (This is clearer from the wording of clause 6(b) of the Service Company Music Publishing Agreements, which refers to "any person, firm or corporation other than Tritec".) In effect, what the Group Members have done by exercising their rights of termination is to transfer the reversionary interest in the copyrights from the Claimant to themselves."
The reference to "a reasonable person having the relevant background knowledge" was held to include some knowledge of US copyright law. In other words, someone signing a contract such as this was assumed to know, at least in general terms, about the possibility of reclaiming copyright in the US.

Insofar as it goes, this may be a pretty unremarkable interpretation of a contract under English law. But what about the fact that under US law the right to terminate the assignment cannot be contracted away?

Conflict with US law

Arnold J. noted the US law aspect but pointed to the fact that Article 7(1) of the Rome Convention, which provides for effect to be given to the mandatory rules of the law of another country with which the situation has a close connection, does not have the force of law in the United Kingdom by virtue of section 2(2) of the Contracts (Applicable Law) Act 1990.

The issues of US law were treated as questions of fact. No expert evidence had been provided as to the meaning of the US statute, nor had permission been sought to do so. So efffectively they were never brought properly before the court.

The solicitor for the defendants (i.e. the band members and their service companies) had made a statement in his witness statement that:


"As a consequence of Section 203, a US Court would not allow a claim for damages for breach of a contractual agreement because the statutory termination right supersedes any contractual right. This applies whether that contract was governed under English or US law." 
The defendants argued that this was admissible evidence, and was unchallenged. Arnold J had little time for this argument. It was no more than a statement of case with which they could expect the other side to take issue at trial. It was a statement made by an English solicitor who, he noted, claimed no expertise in US law, with no basis given and no citation of any decided cases supporting the assertion, and nor did it address whether the position was the same in the period 1980-1983.

To the IPKat it appears that this failure to introduce evidence as to US law represented a major oversight by the defendants, or at least a very risky assumption that the point was self-evident. This Kat cannot tell whether the outcome would have changed if the judge had evidence that the position as stated by the solicitor was both correct as to the law now and at the relevant time, but the failure to adduce this evidence undermined the defendants' reliance on the US law point.

Nick Rhodes, commenting on the judgment, said "We are shocked that English contract law is being used to overturn artists’ rights in another territory. If left untested, this judgment sets a very bad precedent for all songwriters of our era and so we are deciding how properly to proceed."

The IPKat would like to see the case appealed, and would prefer to see artists free to exercise their statutory rights, but is less convinced that the decision sets a "very bad precedent". A future litigant who introduces strong expert evidence on the US law point would at the minimum ensure that the court would have to consider afresh the conflict of laws question.

Rhodes also commented that the band members signed the agreement as "unsuspecting teenagers ... when we knew no better". This bears out the "unequal relationship" rationale for section 203, and is another reason why it would be extremely interesting to see the US law point properly considered.

Arnold J's decision serves a salutory purpose, reminding anyone signing a publishing agreement that the court will interpret the agreement from the viewpoint of a reasonable person with the necessary background information, including some knowledge of copyright law. This makes obtaining good advice all the more critical when the bargaining position is unequal. 

Posted By David Brophy to The IPKat on 12/06/2016 

Monday, 5 December 2016

THE COPYKAT

This CopyKat from David Liao

Duran Duran lose copyright battle: Under US copyright law, songwriters have an inalienable right to call for a reversion of copyright after 35 years, a provision introduced to help address the imbalance of negotiating power artists tend to have early on in their careers. 1990’s group Duran Duran had sought to use this right to reclaim copyright in their first three albums, Duran Duran, Rio, and Seven and the Ragged Tiger, effectively terminating their agreement with publishers Gloucester Place Music (owned by Sony/ATV via their takeover of EMI Music Publishing). However in a High Court ruling last week, Mr Justice Arnold ruled “not without hesitation” that the contractual interpretation suggested by Gloucester Place was the correct one, and that the “parties' intention was that the 'entire copyrights' in the compositions should vest, and remain vested, in the claimant (Gloucester Place) for the 'full term' of the copyrights.” As such, Duran Duran would have to withdraw its application to have their copyright reverted. The effect of this is to allow English contract law to override statutory rights in another jurisdiction, and sets a troubling precedent for other UK songwriters as a test case.  We wait to hear whether the group will be granted leave appeal.

Symposium - ‘Harmonising European Intermediary Liability in Copyright’. The Institute for Information Law (IViR) of the University of Amsterdam is organising a one-day academic symposium on European intermediary liability on 14 January 2017: In view of the new EU copyright reform package, the symposium will examine the issues surrounding intermediary liability in copyright in Europe, including the extent of duties and remedies which are appropriate to impose on intermediaries and the conditions to govern these. Moving beyond the current safe harbour regime, it will explore avenues towards the adoption of a substantive European system. Spaces are limited and registration is required – see here for more details.

Jersey Boys: The creators of hit musical “Jersey Boys” have been held by a jury in Nevada to have infringed copyright in an unpublished book. The claimant (Donna Corbello) is the widow of Rex Woodward, who had co-written an autobiography with founding member of the Four Seasons Tommy DeVito (as previously covered here on the 1709 Blog). Despite Judge Robert Jones previously noting that historical works are entitled to lesser protection than works of fiction, which suggests only Woodward's expression of these facts or his “unique selection and arrangement” of otherwise unprotectable elements would attract copyright protection, there were eleven similarities identified between the manuscript and the musical. It was not indicated which specific parts of the autobiography were copied but these similarities include the dialogue surrounding songs, the characterisation of individuals, and the description of scenes. It was also decided that the copied material contributed 10% to the show’s success. Damages will be determined at a late trial and a spokesman for the show has told NBC 4 New York “Jersey Boys” plans to appeal this decision – stay tuned.

Getty Images: Getty Images has had a copyright case dismissed without prejudice. Previously covered here by the 1709 Blog, Getty had threatened photographer Carol Highsmith via License Compliance Services (LCS) for copyright licence infringement. Ironically the image in question was one of Highsmith’s own - she had donated it to the Library of Congress, and Getty and its affiliates were subsequently discovered to have made available more than 18,000 of her other photographs. Highsmith responded with a copyright claim of statutory damages of almost $500m. These claims were, however, recently dismissed in a New York District Court, along with other claims that Getty and LCS had charged licensing fees and collected settlements from purported infringers for images they had no right to represent.

Tuesday, 29 November 2016

Corporations Have No Moral Rights over Works in France, Even if They Commissioned It


The French Cour de cassation, France’s highest judiciary court, held on November 16 that a corporation cannot have moral rights over a work, even if it had commissioned the work or if the work was created by one of its employees.  

Article L. 111-1 of the French intellectual property Code (CPI) gives authors both patrimonial and moral rights. Moral rights, which are perpetual, inalienable and imprescriptible, are the right of respect for the author’s name and status, and the right of the respect of the integrity of the work.


In this case, an advertising agency, which rights now belongs to the Maetva corporation, had commissioned a corporation, G. studio, to take photographs of watches to illustrate a catalog published by the Pierre L. corporation, a watchmaker.

The Pierre L.corporation used these photographs a year later for a new advertising campaign, which was featured on bus stops, magazines and online. G. studio found this new use to be infringing, as it claimed that it had only sold the rights in the photographs for their use in the catalog. G. studio sued the Pierre L. corporation for copyright infringement and Pierre L. called Maetva into the proceedings.

As you can see, no physical person is part of the procedure, only corporations. The issue of which corporation owned the patrimonial rights of the photographs was debated in the lower courts, and the Court of appeals found that they belonged to G. studio, as did thus, necessarily, the moral rights

The Cour de cassation refused to rule on the issue of patrimonial rights, arguing that reviewing them would impinge on the exclusive rights of the lower courts to estimate the amount of prejudice. However, it ruled on the issue of moral rights ownership. For the Court, the author, if the author is a physical person, enjoys an inalienable right to respect for his name, his quality and his work. Therefore, even if the author created the work as part of an employment contract, “neither the existence of a contract of employment nor ownership of the material support of the work are likely to confer on the corporation employing the author the enjoyment of that right.” The Cour de cassation did not send the case back to the Court of appeals for remand, as there is no need to estimate the amount in damages for violation of the moral rights, as these rights simply do not belong to G. studio.

Corporations cannot own the moral rights of a work under French law, even if they commissioned it, even if the work was created by an employee, and even if they own the patrimonial rights. The moral rights to the photographs at stake belong to the physical person who took them: whoever she is, she was not a party to this lawsuit. For the sake of this discussion, let’s add that if is true that the photographs were used without mentioning her name, she would have the right to sue Pierre L. for failing to disclose her name, as this is a violation of her moral right to paternity of a work.

Even if the photographer had signed a contract transferring all her rights to the pictures, the contract could not have transferred her moral rights, even if the contract would have explicitly, but illegally, mentioned them as being ceded, because moral rights cannot be transferred under French law.

This case should serve as a warning for corporations acquiring the patrimonial rights of a work in a country which recognizes perpetual and inalienable moral tights, such as France, that the physical person who took the picture retains his moral rights forever. This is the case even if the law of the contract is the law of a country which does not recognize such rights, as in the U.S.; see for instance Paris Court of appeals, February 1, 1989, (D. 1990. 52).



Image is courtesy of Flickr user Flash Columbia  under a CC BY-NC 2.0 license.

Monday, 28 November 2016

Limiting the principle of exhaustion? CJEU prohibits the resale of back-up copies of computer programs

Roosa Tarkiainen
Last month the Court of Justice of the European Union (CJEU) issued its decision in Microsoft, a reference for a preliminary ruling from Latvia concerning the principle of digital exhaustion as applied to computer programmes. 

At the time of the decision, this blog did not comment on it. Thankfully, one of my talented students at the University of Southampton, Roosa Tarkiainen, has come to rescue.

Here's what Roosa writes:

“In its decision on 12 October 2016 the Court of Justice of the European Union (CJEU) held that the acquirer of a copy of a computer program accompanied by an unlimited user licence is not entitled to provide a back-up copy of that program to a new acquirer without the authorisation of the rightholder under Article 4(a) and (c), and Article 5(1) and (2) of Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs. 

This reference for a preliminary ruling from the Criminal Law Division of the Riga Regional Court concerned the interpretation of Article 4(2), and Article 5(1) and (2) of Directive 2009/24 (‘the Software Directive’). Article 10 of the Software Directive repealed the earlier Directive 91/250/EEC of May 1991 on the legal protection of computer programs. The dispute in the main proceedings concerns offences allegedly committed between 28 December 2001 and 22 December 2004. As the Software Directive entered into force five years after the latest date of the offences, the Court in its ruling considered the equivalent provisions of Directive 91/250/EEC instead. 

Background

This reference arose in the context of a dispute between two Latvian nationals, Mr Ranks and Mr Vasiļevičs (‘the defendants’), and Microsoft. The defendants were charged with having sold thousands of copies of various copyright-protected computer software and programs published by Microsoft between 2001 and 2004. The copies had been allegedly bought by the defendants from individuals as used copies, then incorporated into a material medium other than the original material medium, and finally sold through online marketplace www.eBay.com.

The defendants were charged for the unlawful sale, as part of a criminal organisation, of objects protected by copyright. They were found guilty at first instance of all relevant offences under Latvian criminal law and ordered to pay partial compensation.

All parties to the proceedings appealed to the Criminal Law Division of the Riga Regional Court, which set aside the first instance judgment on finding the defendants guilty of the unlawful sale of objects protected by copyright.

The decision was appealed to the Supreme Court which set aside the judgment of the preceding court and referred the case back to that court for re-examination. In the course of the re-examination, the defendants asked the Riga Regional Court to refer questions to the CJEU on the interpretation of Article 4(2), and Article 5(1) and (2) of the Software Directive in the context of the unlawful sale of objects protected by copyright.

The Riga Regional Court asked whether under Articles 5(1) and 4(2) an individual can rely upon the exhaustion of the right to distribute a copy of the program where he has acquired that program with a used licence on a non-original risk where the original disk is damaged and the first purchaser no longer uses it. If the answer to the first question is in the affirmative, then whether that individual has, in reliance of the exhaustion of the distribution right, the right to resell that computer program on a non-original disk to a third person under Article 4(2) and 5(2). 

AG Saugmandsgaard Øe
What the court said

Following the Opinion of Advocate General Saugmandsgaard Øe, the Court began by confirming that the dispute is covered by Directive 91/250 and not by Directive 2009/24. Article 4(c) of Directive 2009/24 contains the rule of exhaustion of the distribution right which provides that the resale of a copy of a program by an initial acquirer on a material medium, accompanied by an unlimited licence for the use of that program, cannot be opposed by the holder of the copyright who sold it in the European Union.

The Court upheld the rule under Article 4(c) following UsedSoft, but quickly dismissed Microsoft’s submission, referred to as the “strict” approach by the Advocate General Saugmandsgaard Øe, ie that the provision applies only to the original material. This is because the rule of exhaustion of distribution concerns the program itself, and makes no distinction between tangible and intangible forms of the copy.

The Court then reasserted the right of reproduction contained in Article 4(a) of the directive, confirming that a lawful acquirer may resell a copy of a computer program provided that it does not adversely affect the reproduction right in the underlying work. This means that the resale has to be authorised by the holder of the copyright, or fall under the exceptions in Articles 5 and 6 of the directive. Under what the Advocate General categorised as the “liberal” approach, the defendants submitted that the rule of exhaustion allows the resale of a copy of a computer program on a non-original material medium if the original medium has been damaged. This is given that that the conditions in UsedSoft, namely that there is an unlimited licence for the use of that program and any other copies are made unusable at the time of resale, are satisfied.

The Court confirmed that in that case, the making of a copy of a computer program on a non-original medium would fall under the exceptions in Articles 5(1) and (2) and would therefore be authorised. Of these exceptions, Article 5(1) provides that a rightholder’s authorisation is not required where any reproduction of the program is necessary for its use, and article 5(2) allows for the making of back-up copies provided that the copy is made by a person that has a right to use that program, and provided that the back-up copy is necessary for that use.

With regard to Article 5(1), the Court distinguished UsedSoft from the present case on factual grounds in that there is nothing to suggest that the defendants initially purchased and downloaded copies of the programs from the rightholder’s website which would have satisfied a reproduction necessary for the use of the program. Nonetheless, the Court went on the affirm that the initial acquirer of a copy of a computer program – where the copyright holder’s distribution right is exhausted under Article 4(c) – is authorised to resell a copy but must make any copy in his possession unusable at the time of its resale. 

More importantly, however, the Court, referring (without much further elaboration) to Painer that Article 5(2) on the other hand must be given a strict interpretation. Having said that, it confirmed that the back-up copy can be only used to meet the sole needs of the person with the right to use that program. This meant that a back-up copy of the program cannot be resold to a third party even if the original one is lost or damaged.  

Following from the above analysis, the Court finally concluded that, under Articles 4(a) and (c), and 5(1) and (2) of Directive 91/250, an initial acquirer is permitted to resell a copy of a computer program because of the principle of exhaustion of the exclusive distribution right of the rightholder. However, that initial acquirer is not permitted to make a back-up copy and sell that back-up copy, even if the original copy initially delivered to him has been lost or destroyed. 

Non-digital exhaustion
Implications of the decision

The decision in the present case raises the question as to whether allowing the resale of the original copy and prohibiting the sale of a back-up copy undermines the principle of exhaustion in relation to computer programs and software. In theory, the substance of a back-up copy is identical to that of the original. 

Therefore by selling a back-up copy, the acquirer is in essence selling the exact same product as he would be if he was selling the original. By creating the barrier to the secondary market for back-ups, it could be thus argued that the exhaustion of the right of distribution becomes redundant. 

However the decision of the Court is justified exactly because of this indistinguishable nature of the back-up programs. Following the Advocate General’s view, the inability to distinguish different types of copies makes it more difficult to combat counterfeits on secondary markets. Prohibiting the sale of back-up copies could thus limit the quantity of unlawful substance on the market, although it may not have been the most technologically efficient method of doing so. Furthermore, the Court was not in the position to depart from the requirement of strict interpretation of the exception in Article 5(2). 

Nonetheless, the decision is significant in that it confirmed the rule in UsedSoft that distribution rights in computer programs are extinguished upon sale, allowing for the creation of a secondary market for these programs under Article 4(c) of the Software Directive. Although questionable on technical grounds, the Court was ultimately carrying out the difficult balancing act between giving effect to free movement in the internal market through the principle of exhaustion, and protecting the rightholder – in this case from being undercut by criminal activities.” 

Thanks so much Roosa!

Wednesday, 23 November 2016

Richard Prince May Offer the SDNY Another Chance to Define Transformative Use of a Work


Richard Prince was sued on November 16 by yet another photographer over the use of a photograph in his New Portraits series. The case is Eric McNatt v. Richard Prince, 1:16-cv-08896, Southern District of New York (SDNY).

Readers of this blog may remember that Richard Prince used various photographs protected by copyright to create his New Portraits exhibition. He had commented, cryptically, or nonsensically, whatever your mood is, below several photographs which had been uploaded by others on Instagram. He then printed the results on canvas to create a series of works, New Portraits, which has been shown in New York. Prince has been sued by some of the copyright holders of the original works (see here and here). One of these cases, Donald Graham v. Prince, is still pending at the SDNY.
This time, it is photographer Eric McNatt who is suing Richard Prince and the Blum and Poe Gallery for copyright infringement. The complaint alleges that Richard Prince reproduced a photograph taken by Plaintiff of Kim Gordon, a founding member and bassist of Sonic Youth, by downloading it from the web, where it had been published with a copyright notice, and uploading it on his own Instagram account. Prince has since deleted this account. Prince then wrote three lines of comments under the photograph:  “Portrait of Kim Gordon,” then “Kool Thang You Make My Heart Sang You Make Everythang Groovy” and finally added a string of music-related emojis.
This Instagram post and its comments was then printed and added to the New Portraits exhibition, which was shown in the spring of 2015 by the Blum & Poe gallery in Tokyo and featured in the catalog of the exhibition.

Will TCA Television Corp. v. McCollum Influence the Outcome of this Case?

The Donald Graham v. Richard Prince case is still pending at the SDNY. On November 4, attorneys for Donald Graham sent a letter to Judge Sidney Stein from the SDNY, who is presiding over the case, to alert him of the recent TCA Television Corp. v. McCollum Second Circuit case (2nd Circ. Oct. 11, 2016), which, in their view, “undermines Defendants ‘motion to dismiss on fair use grounds.”

In TCA Television Corp., the author of the play Hand of God had been sued by the heirs of Abbot and Costello over the use of their famous “Who’s on First” routine. The main character of the play recites the routine verbatim in the play with his trusty (but evil) sock puppet acting as sidekick. Judge Daniels from the SDNY had dismissed the copyright infringement suit, finding the use of the routine in the play to be fair use. The Second Circuit affirmed, but on alternative grounds: the use of the routine was not transformative enough to be fair use, but the heirs had not proven that they owned the copyright in the routine.

Attorneys for Prince sent their own letter a few days later, where they argued that the holding in TCA Television is distinguishable from the case, that the TCA Television case is not even related to fair use and that thus “the entire discussion of fair use is dicta.” They also argue that the Second Circuit did not find the use of the routine to be fair because, according to the Court, “the extent of defendants’ taking is identically comedic to that of the original authors, that is, to have two performers expand on a singular joke in order to generate increasing audience laughter.

Attorneys for Prince also argued in the letter, that, “[b]y contrast, Prince used Graham’s photograph for a highly transformative purpose: as a commentary on social media. This new meaning and message is apparent to any reasonable observer who looks at the artwork. “Prince’s attorneys also argued that “Prince’s transformative purpose [was] to provide a commentary on social media [and thus] required the incorporation of the entire Instagram postto accomplish that purpose. “

Is the use of the McNatt Photograph Transformative Enough to be Fair Use?

What is transformative use? We still do not have a “so transformative it is fair use” test. However, the TCA Television case may influence the McNatt v. Prince case. If we consider that Prince’s purpose for reproducing Eric McNatt’s photograph of Kim Gordon was to comment on social media, as claimed by Prince’s attorneys in the Graham v. Prince case, then it is fair use under Cariou if Prince added something materially new or provided a different aesthetic. The Second Circuit had found in Cariou v. Prince that Prince’s use of Cariou’s photographs was fair use, because he had used them to create new works and had “employ[ed] new aesthetics with creative and communicative results distinct from Cariou.”

Judge Daniels from the SDNY had found in TCA Television that the use of the routine was fair use, explaining that “[t]he contrast between Jason's seemingly soft-spoken personality and the actual outrageousness of his inner nature, which he expresses through the sock puppet, is, among other things, a darkly comedic critique of the social norms governing a small town in the Bible Belt. Thus, Defendants' use of part of the Routine is not an attempt to usurp plaintiffs’ material in order to "avoid the drudgery in working up something fresh." Campbell, 510 U.S. at 580, 114 S.Ct. 1164. Nor is the original performance of the [r]outine "merely repackaged or republished." Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 97 (2d Cir.2014).”

The Second Circuit found that the use was not fair because it had not transformed the routine's aesthetic, it had appropriated the routine extensively, and “[n]o new dramatic purpose was served by so much copying” and “there is nothing transformative about using an original work in the manner it was made to be used.”

If we apply this to our case, then Prince must prove that he used the original work in a different manner than it was made to be used. Should we only look at the comments written by Prince to decide if the use is transformative enough to be fair, or at the ensemble, work and comments? In both ways, the Prince’s work could be considered fair use if proven to be a critique on the desperate banality of social media and social media comments. But is it?

As noted by the Complaint, “Kool Thang You Make My Heart Sang You make Everythang Groovy” is “a transliteration of lyrics to the 1960 song “Wild Thing,”written by Chip Taylor, except that the word “Kool” replaces the word “Wild.” “Kool Thing” is the title of Sonic Youths first major label record single.” As itself, this comment may not be original enough to be protected by copyright yet it is more creative than most social media comments. The emojis chosen by Prince, however, are quite banal and so their banality may comment on banality. Pass the aspirin.

Image is courtesy of Flickr user torbakhopper under a CC BY 2.0 license.

Tuesday, 22 November 2016

Case update – FAPL v. Luxton

This case update from David Liao


Earlier this month the appeal to The Football Association Premier League Limited v Anthony William Luxton was dismissed. In the latest case against publicans who use foreign decoder cards, the Court maintained the distinction between the lawful enforcement of intellectual property rights from any alleged anti-competitive agreements between FAPL and foreign broadcasters to restrict the supply of foreign commercial cards outside the territory in which that broadcaster operates. 

Background: 
In 2014, summary judgment was awarded against Mr Anthony Luxton, who used a satellite card from a Danish broadcaster to show football matches to customers who frequented his public house in Swansea. Despite Mrs Justice Rose expressing concern that the status quo of territorial protection in relation to broadcast licences appeared to be maintained notwithstanding the previous ruling of the CJEU in Premier League v. QC Leisure, she held that, as QC Leisure had effectively decided the plea in this defence, FAPL had a right to prevent the unauthorised communication of its copyright (see here for previous coverage on the High Court case). 

Court of Appeal:
While the Court did not agree that the QC Leisure case had conclusively decided this case, the decision to dismiss the appeal was based on similar reasoning. Lord Justice Floyd did not agree with Luxton that the proceedings were an illicit attempt by FAPL to prevent the use of foreign decoders cards as they were entitled to prevent a domestic card from being used for commercial purposes (nothing to show FAPL would only enforce if foreign domestic). 

In addition, it was held that use of the foreign domestic card was not a direct consequence of FAPL practices or agreements with foreign broadcasters, and at most it only provided the occasion for such use. Due to this insufficient link between Luxton’s infringement of FAPL’s copyright and the alleged anti-competitive practices the appeal was dismissed. 

http://the1709blog.blogspot.co.uk/2011/10/murphys-law-of-licensing.html

http://the1709blog.blogspot.co.uk/2011/09/copyright-vs-competition-law-new-dawn.html

Football Association Premier League Ltd v QC Leisure; Karen Murphy v Media Protection Service Ltd [C-403/08 and C-429/08]

Turtles settle 'Pre-1972' case against Sirius XM

Members of 1960s rock group The Turtles have settled their action against Sirius XM over what the band claimed were unpaid royalties for the use of 'Pre 1972' copyrights. The terms of the settlement were not disclosed. The filing of settlement papers was noted by both The Hollywood Reporter and National Law Journal.


The Turtles
New York’s highest court had heard oral arguments in the case, which was brought by the owner of The Turtles’ 1967 hit song “Happy Together” against Sirius XM Radio. The issue at the heart of the case was  whether the copyright holders of recordings made before 1972 have a common law right to make radio stations and others pay for the use of the recordings (in the US, federal copyright law does not allow for the collection of what is called 'needletime' for post 1972 sound recordings. The lawsuit was filed by Flo & Eddie Inc., the company controlled by two founding members of the band that owns the rights to the recordings. Sirius XM argues it’s not required to pay royalties for recordings made before the federal Copyright Act was changed in 1972 to establish limited protections for recordings.

US District Judge Philip Gutierrez had already ruled that Sirius was liable under state copyright law. Two former band members of The Turtles, working as "Flo & Eddie," were representing a class of thousands of owners of pre-1972 music recordings.

The case was referred to the New York Court of Appeals from the federal appeals court.

In another interesting development, a new case has arising involving royalties for the use of music by broadcasters (rather than sound recordings) which are payable in the USA and are collected by four collection societies. The two largest PROs representing the performing rights in songs – ASCAP and BMI – are regulated by so called 'consent decrees'.  However, there are also two other smaller performing rights organisations in the US – SESAC and the much newer and privately owned Global Music Rights – which sit outside the consent decrees. And now America’s newest performing rights organisation, lobal Music Rights, is being sued by the US radio industry in a bid to force the rights agency to submit to independent arbitration to set the rates broadcasters must pay to play the songs it represents.

http://arstechnica.com/tech-policy/2016/11/just-before-trial-the-turtles-settle-copyright-suit-against-sirius-xm/

http://www.musiclawupdates.com/?p=5525

Thursday, 17 November 2016

The CJEU decision in Soulier: what does it mean for laws other than the French one on out-of-print books?

As reported by the IPKat through a breaking news post, yesterday the Court of Justice of the European Union (CJEU) issued its decision in Soulier and Doke, C-301/15. This is a further updated posted by Eleonora Rosati on the IPKat on the same case, and one we though we shoukd share in the 1709 Blog.





This was a reference for a preliminary ruling from the French Conseil d’État (Council of State) and concerned the compatibility with EU law [read: the InfoSoc Directiveof the 2012 French law to allow and regulate the digital exploitation of out-of-print 20th century books.

The late Marc Soulier, also known as Ayerdhal
As explained more at length hereby introducing into the French Code de la propriété intellectuelle (CPI) a new chapter [Chapter IV - Articles L 134-1 to L 134-9, subsequently amended] to Title III of Book I, this piece of legislation has vested approved collecting societies with the right to authorise the reproduction and the representation in digital form of out-of-print books, while allowing the authors of those books, or their successors in title, to oppose or put an end to that practice subject to certain conditions. 

More specifically, the relevant implementing decree has established a legal framework intended to encourage the digital exploitation of works reproduced in books published in France before 1 January 2001 which are no longer commercially distributed by a publisher and are not published in print or digital format. In that case the right to authorise the reproduction or performance of those books in digital format is exercised, six months after their registration in a publicly accessible database for which the National Library of France is responsible, by collecting societies approved to do so by the Ministry of Culture.

In yesterday's post, I expressed the view that this new CJEU decision might have far-reaching implications, that go well beyond the sole piece of legislation at the centre of the case.

After reading the decision, this seems indeed to be the case.

What the CJEU said

Preliminary remarks

In its 53-paragraph decision, also clarifying that the case had nothing to do with copyright exceptions [so that, in line with the Opinionhere, of Advocate General (AG) Wathelet, Article 5 of the InfoSoc Directive would be irrelevant], the Court noted that the national legislation at issue would call into consideration: (1) the right of reproduction within the meaning of Article 2(a) of the InfoSoc Directive; and (2) the right to authorise the representation under that form and that such a representation constitutes a communication to the public within the meaning of Article 3(1) of that directive.

The actual question referred by the French court should be therefore read as asking whether Article 2(a) and Article 3(1) of the InfoSoc Directive preclude national legislation that gives an approved collecting society the right to authorise the reproduction and communication to the public, in digital form, of out-of-print books, while allowing the authors of those books or their successors in title to oppose or put an end to that practice on the conditions that that legislation lays down.

The other author
at the centre of the case:
Sara Doke
Broad and preventive rights

The Court noted at the outset that the protection conferred by Articles 2(a) and 3(1) of the InfoSoc Directive must be given a broad interpretation. It follows [para 31] that, in line with the Berne Convention, “that protection must be understood, in particular, as not being limited to the enjoyment of the rights guaranteed by Article 2(a) and Article 3(1) of Directive 2001/29, but as also extending to the exercise of those rights.”

The Court then recalled that [para 33] such exclusive rights are preventive in nature, in the sense that any reproduction or communication to the public of a work by a third party requires the prior consent of its author.

The most straightforward consequence of this is that [para 34], subject to the exceptions and limitations laid down exhaustively in Article 5, any use of a work carried out by a third party without such prior consent (of the author) must be regarded as infringing copyright in that work. 

The form and substance of consent

This said, the Court conceded [para 35] that neither Article 2(a) nor Article 3(1) specify the way in which the prior consent of the author must be expressed: those provisions do not require such consent to be necessarily expressed explicitly. Hence, those provisions also allow that consent to be expressed implicitly. An example - said the Court - is what happens in the case of communication to the public in an online environment with the (psychological) notion of ‘new public’ [para 36], as adopted in Svensson.

However, [paras 37-40]

[T]he objective of increased protection of authors to which recital 9 of Directive 2001/29 refers implies that the circumstances in which implicit consent can be admitted must be strictly defined in order not to deprive of effect the very principle of the author’s prior consent.

In particular, every author must actually be informed of the future use of his work by a third party and the means at his disposal to prohibit it if he so wishes.

Failing any actual prior information relating to that future use, the author is unable to adopt a position on it and, therefore, to prohibit it, if necessary, so that the very existence of his implicit consent appears purely hypothetical in that regard.

Consequently, without guarantees ensuring that authors are actually informed as to the envisaged use of their works and the means at their disposal to prohibit it, it is de facto impossible for them to adopt any position whatsoever as to such use.”

Having said so, the Court turned to consideration of the French law, and noted how that legislation does not appear to offer a mechanism ensuring that authors are actually and individually informed. Therefore, it is not inconceivable that some of the authors concerned are not, in reality, even aware of the envisaged use of their works and, therefore, that they are not able to adopt a position, one way or the other, on it. In those circumstances, a mere lack of opposition on their part cannot be regarded as the expression of their implicit consent to that use.

Writer's block for Merpel
But initiatives on out-of-commerce works are not completely out

In all this, the Court did not place an absolute ban on future legislative interventions based on the InfoSoc Directive [and it would seem also on other pieces of legislation, eg the recent proposal of the EU Commission for a Directive on copyright in the Digital Single Markethere]. In fact [para 45]:

Admittedly, Directive 2001/29 does not preclude national legislation, such as that at issue in the main proceedings, from pursuing an objective such as the digital exploitation of out-of-print books in the cultural interest of consumers and of society as a whole. However, the pursuit of that objective and of that interest cannot justify a derogation not provided for by the EU legislature to the protection that authors are ensured by that directive.”

Removing consent

The Court also added that the InfoSoc Directive does not prohibit Member States from granting certain rights or certain benefits to third parties, such as publishers, as long as those rights and benefits do not harm the rights which that directive gives exclusively to authors. 

When the author of a work decides to put an end to the future exploitation of that work in a digital format, that right must be capable of being exercised:

a)  without having to depend, in certain cases, on the concurrent will of persons other than those to whom that author had given prior authorisation to proceed with such a digital exploitation and, thus, on the agreement of the publisher holding only the rights of exploitation of that work in a printed format [para 49]; and
b)  without being subject to any particular formality [para 50].

In conclusion

Article 2(a) and Article 3(1) of the InfoSoc Directive must be interpreted as precluding national legislation that gives an approved collecting society the right to authorise the reproduction and communication to the public in digital form of ‘out-of-print’ books, namely, books published in France before 1 January 2001 which are no longer commercially distributed by a publisher and are not currently published in print or in digital form, while allowing the authors of those books, or their successors in title, to oppose or put an end to that practice, on the conditions that that legislation lays down.

Comment

Yesterday’s decision marked an important moment in CJEU copyright jurisprudence. 

Any freedom left?
From an EU perspective

Although the Court relied on concepts also employed in previous decisions [eg that economic rights must be interpreted broadly and considered preventive in nature], it used the so called author principle [ie the principle that, as a general rule, the author is also the first owner of copyright] to push the boundaries of EU harmonisation further and, by doing so, restrict Member States' legislative freedom.

First, despite contrasting hints in the past in which the CJEU appeared to employ the terms 'authors' and 'rightholders' interchangeably, the Court reinforced the idea that who the InfoSoc Directive intends to grant a 'high level of protection' to is authors.

Secondly, although not referring explicitly to the notion of EU preemption [on which see also here], the CJEU fully embraced it. In this sense, there is no gap between the CJEU judgment and the AG Opinion [paras 55-57], which rejects the view that the national legislation at issue would not affect the protection of copyright because it simply constitutes an arrangement for managing certain rights which the InfoSoc Directive does not preclude. What matters - for both the CJEU and the AG - is whether authors have had the possibility to express their individual consent. 

From a practical perspective

It would appear that, post-Soulier and lacking specific 'EU-endorsed authorisation' to the contrary, national legislative initiatives (including licensing schemes) that fail to incorporate appropriate and streamlined procedures to (1) inform authors of possible future uses of their works, and (2) obtain their relevant, individual, consent are likely to be regarded as incompatible with EU law.

In light of all this one may wonder whether another piece of French legislation, ie the law on freedom of creation, architecture and cultural heritage, is against EU law. 

As this blog reported, among other things this introduced new provisions [Articles L 136-1 to 136-4] into the CPI to regulate the exercise of the exclusive rights of reproduction and representation vis-à-vis automated image referencing services. Article 136-2(1) CPI clarifies that the publication of a plastic artwork, graphic or photographic work by an online communication service is subject to the consent - not of authors - but rather one or more collecting societies appointed to this end by the French Ministry of Culture. It would appear that an author only has the right to indicate which collecting society would undertake this task (lacking such indication, then a presumption would operate in favour of a designated collecting society), but not also authorise the relevant collecting society to authorise the making of acts restricted by copyright.

On a similar note, as suggested by Sylvie Nérisson on the Kluwer Copyright Blog at the time of the AG Opinon, also certain national licensing schemes - including systems of extended collective licensing - may fall short of what EU law requires in terms of authors' consent.  

All in all ... a subtle message from the CJEU
Turning now to the provisions on out-of-commerce works as contained in the recently proposed Directive on copyright in the Digital Single Market, Article 7(1) states that:

"Member States shall provide that when a collective management organisation, on behalf of its members, concludes a non-exclusive licence for non-commercial purposes with a cultural heritage institution for the digitisation, distribution, communication to the public or making available of out-of-commerce works or other subject-matter permanently in the collection of the institution, such a non-exclusive licence may be extended or presumed to apply to rightholders of the same category as those covered by the licence who are not represented by the collective management organisation, provided that: 

(a) the collective management organisation is, on the basis of mandates from rightholders, broadly representative of rightholders in the category of works or other subject-matter and of the rights which are the subject of the licence; 
(b) equal treatment is guaranteed to all rightholders in relation to the terms of the licence; 
(c) all rightholders may at any time object to their works or other subject-matter being deemed to be out of commerce and exclude the application of the licence to their works or other subject-matter."

One may question whether the extension of the licence also to non-members and the fact that the mechanism envisaged by the proposed directive is opting-out rather than opting-in, is fully compliant with Soulier.

A conclusion of the conclusion

In all this, yesterday's CJEU decision does not necessarily mean the end for all these sorts of initiatives - whether at the national or EU levels. 

However, what is (now?) required is a more careful approach by relevant legislators to ensure that the principles established at the level of the InfoSoc Directive and elaborated further in yesterday's CJEU decision are fully respected. 

As a final note - although the CJEU did not bring fundamental rights into the picture this time - as I also discussed here, these may matter in a situation in which authors are deprived of their ability to authorise the making of acts restricted by copyright. In fact, it may be argued that all this could amount to a deprivation of authors' fundamental right to intellectual property protection, as per Article 17(2) of the Charter of Fundamental Rights of the European Union


--
Posted By Eleonora Rosati to The IPKat on 11/17/2016 09:35:00 am