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Protecting Your “.trademark”: ICANN Clarifies Procedure for Objecting to New gTLDs

By Kimberly M. Maynard on Posted in Uncategorized

It has been almost two years since the Internet Corporation for Assigned Names and Numbers (ICANN) announced that it would accept applications for the registration of new generic top level domain names (gTLDs), increasing the number of domain name endings beyond .com, .net, and .gov. ICANN currently is conducting its initial evaluation of the approximately 1,917 applications it received and is expected to release the results at the end of March. In the meantime, ICANN has published the applied-for gTLDs here.

Parties may object to any of the applied-for gTLDs on four bases: string confusion, legal rights, community, and limited public interest. Three different dispute resolution services—ICDR, WIPO, and the ICC—have been appointed to accept and adjudicate the objections. A very broad overview of the objections can be found here and ICANN’s Applicant Guidebook, which includes a section on objections can be found here.

In late January, ICANN hosted its first session outlining some of the more important aspects of filing an objection.  This post gives a brief summary of those guidelines, and includes several links where more detailed information can be found. The first set of bullet points discusses the process in general and parameters that apply to all objections.  The remaining sets of bullet points discuss the objection grounds themselves, as well as procedural aspects particular to the specific dispute resolution service handling each objection.

General Information

  • The current deadline for filing objections is March 13, 2013. (ICANN has already extended this deadline once.)
  • Objectors are required to complete an objection form provided by the dispute resolution services.
  • Within approximately ten days after ICANN releases the results of its initial evaluation of the applications, applicants that have had an objection filed against their application will be notified. Applicants will then have thirty days to file a response to the objection and must use the form provided by the dispute resolution service. 
  • In addition to the requisite form, objectors and applicants may also file arguments of up to 20 pages or 5,000 words (whichever is less).
  • Before the objections are substantively reviewed, objectors and applicants will have a chance to correct any administrative deficiencies in their filings.
  • After applicants file their responses, the various dispute resolution services will appoint experts to adjudicate the objections.
  • Except in very rare instances, objections will be decided on the papers only, without a hearing. Generally speaking, a final decision on the objection will be issued approximately 45 days after an expert panel has been appointed.
  • Each dispute resolution service requires both parties to pay the full fee and all of the expert expenses up front. Although both parties have to pay the full expenses up front, at the end of the process the prevailing party will be refunded the expert expenses, but not the administrative fee.

 With this overview in mind, below is an outline of each objection ground, the dispute resolution service responsible for adjudicating each type of objection, and some of the more important details unique to each objection ground.

String Confusion Objections: International Centre for Dispute Resolution

  • Parties who have an existing domain name and believe that there is a likelihood of confusion between their existing domain name and an applied-for gTLD may file an objection to the applied-for gTLD based on string confusion grounds.  Similarly, a party may file a string confusion objection if that party applied for its own gTLD and believes that there is a likelihood of confusion between their applied-for gTLD and another applied-for gTLD.
  • String confusion objections will be adjudicated by the International Centre for Dispute Resolution, a division of the American Arbitration Association.
  • Objections are filed through the ICDR’s webfile system. Objectors must complete an online form and file a $2,750 filing fee. Applicants will also have to complete an online form and submit the $2,750 filing fee.
  • Objectors and applicants will be required to pay expert fees set by the ICDR.

 Legal Rights Objection: World Intellectual Property Organization

  • Objectors who own a registered or unregistered trade or service mark and believe that there is a likelihood of confusion between the mark and the applied-for gTLD may file a legal rights objection. Similarly, international governmental organizations (“IGO”) with a name or acronym that may be confused with an applied-for gTLD may file a legal rights objection.
  • Legal rights objections are adjudicated by the World Intellectual Property Organization (“WIPO”).
  • WIPO will generally appoint a panel consisting of one expert, although the parties may agree to work together to appoint three member panels.
  • Assuming the parties elect to use a one member panel, each party must pay $10,000, which consists of a $2,000 non-refundable case administration fee and a $8,000 expert fee.  Parties electing to proceed before a larger panel will be required to pay an additional fee.
  • Generally speaking, the panel will review whether, with respect to the objector’s trademark or IGO name or acronym, the applied for gTLD:
    • Takes advantage of the distinctive character or reputation, or
    • Unjustifiably impairs the distinctive character or reputation, or
    • Otherwise creates an impermissible likelihood of confusion.
    • When conducting this review, the panel will look to the:
      • Identity or similarity of the mark/gTLD;
      • Objector’s bona fide acquisition/use of the mark ;
      • Relevant recognition by the public;
      • Knowledge of the objector’s mark, and any pattern of infringement;
      • Applicant’s use (including preparations) of the mark in connection with a bona fide offering;
      • Applicant’s rights in the mark, including whether such acquisition/use has been bona fide, and whether the intended gTLD use is consistent therewith;
      • Whether applicant is commonly known by the mark; and
      • Whether applicant’s intended use would create a likelihood of confusion.

 Community Objection and Limited Public Interest Objection: International Centre for Expertise

  • The International Centre for Expertise, a division of the International Centre for Alternative Dispute Resolution, will adjudicate both community objections.
  • An established institution associated with a clearly delineated community that believes that there is a strong association between the community and the applied-for gTLD may file a community objection to the gTLD. To prevail, the objector must show:
    • The community involved by the objector is a clearly delineated community;
    • Community opposition to the application is substantial;
    • There is a strong association between the community invoked and the applied-for gTLD string; and
    • The application creates a likelihood of material detriment to the rights or legitimate interests of a significant portion of the community to which the string may be explicitly or implicitly targeted.
    • Panels deciding community objections will consist of one expert.
    • Each party must pay a €5,000 filing fee. The expert fee is due shortly after the Applicant files a response and will vary from objection to objection, but likely will be approximately €12,000 for one member panels.

 Limited Public Interest Objection: International Centre for Expertise

  • The International Centre for Expertise also will adjudicate limited public interest objections.
  • Any internet user who believes that an applied-for gTLD breaches the general principles of international law may file a limited public interest objection.
  • Panels deciding limited public interest objections will consist of three experts.
  • Each party must pay a €5,000 filing fee. The expert fee is due shortly after the Applicant files a response and will vary from objection to objection, but likely will be approximately €17,000 for three member panels.

In addition to the objections filed by applicants and other entities, ICANN has appointed an Independent Objector who will file objections solely in the interest of global internet users. The Independent Objector will file an objection to a specific string, but only if no other objections to that string have been filed.

 The Independent Objector’s deadline also is March 13, 2013.  If he files an objection to a particular string and then, later, someone else objects to that same string, then the Independent Objector has the option of withdrawing his objection.  There also is a slight possibility that the objections would be consolidated. More information about the Independent Objector can be found here.

 In sum, there are a lot of details and a lot of rules for each type of objection. The process for application and registration of new gTLDs is still nascent and ICANN already has experienced several hiccups. Probably the most important piece of advice anyone can offer is to check the ICANN website regularly for updates and information.

Publish or Perish: Sony Releases Compilation of 50-Year-Old Bob Dylan Bootlegs to Comply with EU Directive

By Dennis Cohen on Posted in Uncategorized

 

Authorship credit: David McMillan

Exploiting a recent European Union Directive extending the term of copyright for sound recordings, Sony released an 86-track collection of Bob Dylan recordings, including studio outtakes and live recordings from 1962-63.

The Directive, issued September 2011, extends the term of protection for sound recording copyrights by 20 years—from 50 years to 70 years.  But there’s a catch: the copyright holder must “use it or lose it”—to qualify for protection, the work must be published within 50 years of creation.  Recordings by many well-known acts from the British Invasion of the early 1960’s—including the Beatles, the Rolling Stones, the Who and the Yardbirds—are bumping up against that cutoff.  Sony recognized that the 50-year window’s expiration was approaching and released the tracks, gaining the benefit of the extension.

If not released before January 1, 2013, the works would have been dedicated to the public domain in the EU—free for anyone to exploit without requiring the permission of or payment to Sony, Dylan, and/or anyone else.

The archival release, appropriately dubbed “Bob Dylan: The Copyright Extension Collection Vol. 1.,” includes alternative takes of several songs from Mr. Dylan’s second album “The Freewheelin’ Bob Dylan,” such as “Blowin’ in the Wind,” “Bob Dylan’s Dream” and “I Shall Be Free,” as well as multiple versions of some songs that missed the final cut.  There are live performances, as well, including some from the Gaslight Cafe, Carnegie Hall and the Finjan Club in Montreal.

The Directive, named “Cliff’s Law” after the 1960s-era British pop-singer who campaigned aggressively for the extension, is seen as a victory for many aging superstars, including the aforementioned British invaders, as well as American artists like Frank Sinatra, Miles Davis and Mr. Dylan, who recorded in Europe.  In an interview with the BBC, The Who’s Robert Daltrey—an outspoken proponent of the extension—explained that the Directive ensured that artists could continue to receive royalties into their old age.  “They are not asking for a handout,” he said, “just a fair reward for their creative endeavours.”  Indeed, the Directive’s explicit rationale is to eliminate the “income gap” faced by musicians outliving the 50-year term.

Not everyone is as pleased with the extension, however. The Electronic Frontier Foundation points to numerous reports concluding that longer terms will not benefit the smaller acts and session artists whom the Directive was ostensibly designed to protect.  A study by the Center for Intellectual Property Policy and Management at Bournemouth University in England calculates that 72 percent of the financial benefits from the Directive will accrue to record labels, and the vast majority of the remainder to superstar acts—not those musicians identified in the Directive.  And many argue that restricting the public’s access to recorded works for another 20 years will hinder creativity—an outcome some decry as being at odds with a fundamental aim of copyright law.

Expect the matter to be taken up again in another 20 years.  In the meantime, fans of bands like the Beatles and the Rolling Stones should be on the lookout for bootleg releases, as record companies seek to exploit the term extension.

Google Search and Free Speech

By Maryanne Stanganelli on Posted in Uncategorized

On Thursday, the Federal Trade Commission announced that, after its inquiry of almost two-years, it is ending its antitrust investigation into Google.  It finds that Google has not violated antitrust laws in its ordering of search results. 

Google began its search service with its original “ten blue links” organic search results.  Since that time, Google has evolved by leaps and bounds, including in the services it provides and the way it orders its search results.  Nowadays, a Google search may lead to the display of a “universal search” box showing Google’s own services in addition to those familiar “blue links.” Complainants alleged that Google altered its search algorithms to favor its own services and demote services that competed with Google’s, thereby engaging in “search bias.”  After extensive review of evidence, including empirical analyses, white papers from industry participants, and more, the Commission found that “Google adopted the design changes  . . . to improve the quality of its search results and that any negative impact on actual or potential competitors was incidental to that purpose.”  As the F.T.C. is concerned with consumer protection, they could not find that consumers—viewed as those conducting the searches—were disadvantaged by these practices. 

On Saturday, The New York Times published an op-ed article, “Is Google Like Gas or Like Steel?,” explaining how the F.T.C. decision favors freedom of the press and free speech generally.  It supports one of the arguments that had been made in furtherance of Google’s position, that Google’s decisions on how to display its search results are constitutionally protected speech.  The argument analogizes Google’s search-display function to the function of a newspaper editor in choosing which articles to include and where to display them. 

The article distinguishes the F.T.C.’s investigation of Google from the often-compared antitrust investigation of Microsoft in the 1990s.  It makes the case that Google is more akin to the media giant the Associated Press than to Microsoft or a public utility, and references Associated Press v. United States, 326 U.S. 1 (1945).  As was found with respect to the A.P. in that case, Google cannot be regulated exactly like a public utility because of the element of the public interest in the delivery of information to the public.  The article concludes, “[t]his makes regulation of the media difficult.  But regulating speech should not be easy, like regulating a public utility, but hard, as the F.T.C. has correctly found.”

The article was co-authored by Baker Hostetler of counsel Bruce D. Brown.

Girl Under Fire: Alicia Keys Sued for Copyright Infringement over Girl on Fire

By Jessie Schweller on Posted in Uncategorized

Songwriter Earl Shuman sued Alicia Keys for allegedly “sampling” parts of the composition “Hey There Lonely Boy” (“Lonely”) that he co-wrote in 1962. According to the complaint, Keys’ recording of “Girl on Fire” (“Fire”), which is the lead single on her same-titled album, misappropriates a few notes of the composition. Shuman’s composition was recorded by various artists, including Martha and The Vandellas and Ruby and the Romantics, but hit its peak when it was recorded by former Delfonics and Stylistics singer Eddie Holman. In 1969, Holman changed the object of Lonely from “boy” to “girl,” and this rendition went on to rise to No. 2 on Billboard charts. Keys’ Fire currently ranks No. 16 on the Billboard Hot 100 chart, and has gone on to receive international acclaim. The song is also prominently featured in a recent Citibank commercial.

Shuman filed his complaint for copyright infringement in the Central District of California on December 10, 2012. What makes the case interesting is that Shuman’s complaint’s allegations of infringement rely almost exclusively on a November 25, 2012 blog post written by Roger Friedman of Showbiz411. Quoting Friedman’s blog, Shuman’s complaint provides: “There’s another sample (emphasis added) . . . from Eddie Holman’s 1970 classic [Lonely, which] was written by Leon Carr and Earl Shuman, who are both gone to rock and rock and roll heaven.” Mr. Shuman later commented on the post, thanking Mr. Friedman for his “expertise” and letting him know that he is “still here on the ground, writing songs.” Interestingly, both Shuman’s complaint and Friedman’s blog post suggest the existence of a digital sample – that is, the use of Holman’s recording in Keys’ recording. While the use of the term idiomatically in the blog post is of no real moment, the use in the complaint is factually inaccurate and legally imprecise.

This is because Shuman’s infringement claim stems from the way in which Keys (i.e. not Holman) sings the words “lonely girl” at 2 minutes and 24 seconds into Fire. Click here to listen. Shuman alleges that Keys sings “lonely girl” in a way that sounds similar to Holman’s version of Lonely. Specifically, Shuman accuses Keys of copying three notes from Lonely and seeks damages and profits for the unauthorized use. Take a listen below:

The complaint notes that Fire includes a a digital sample of a drum line from Billy Squier’s “The Big Beat.” According to Shuman, the Billy Squier sample was authorized and credited. Regardless of Shuman’s imprecise pleading, Shuman may nonetheless have the opportunity to prove that Fire misappropriated portions of the Lonely composition (even if it did not utilize the sound recording). Stay tuned to see how the California courts decide whether additional credit is due.

The case is Shuman v. Sony Music Entertainment et al., case number 2:12-cv-10572, in the U.S. District Court for the Central District of California.

Court Gives Cold Shoulder to Hot Yoga, Finding Yoga Sequences Not Copyrightable

By Kimberly M. Maynard on Posted in Uncategorized

On Friday, the Central District of California held that a series of yoga poses designed to improve health is not copyrightable, dismissing claims of copyright infringement bought by Bikram Choudhury against Evolation Yoga.  This ruling followed in the footsteps of the Copyright Office’s recent announcement that it will no longer issue registration certificates for sequences of yoga poses designed to improve health.

The California lawsuit was brought by Bikram Choudhury, the originator of the popular hot yoga style, Bikram Yoga.  Bikram Yoga incorporates a series of 26 yoga poses and two breathing exercises performed in the same order and manner in a room of 105 degrees Fahrenheit over the course of approximately ninety minutes (the “Bikram Sequence”).  According to Choudhury, the Bikram Sequence is designed to correct, alleviate, and/or prevent various diseases and ailments.  Defendants are former students of Choudhury who taught the Bikram Sequence—the same 26 poses and two breathing exercises in the same order, manner, and environment—in their own studios, without Choudhury’s permission.  Claiming the Bikram Sequence was copyrightable, Choudhury sued for copyright infringement and also brought claims for trademark infringement, false designation of origin, dilution, unfair competition, unfair business practices, breach of contract, inducing breach of contract.

Considering a motion for partial summary judgment on the copyright claim only, the Central District of California firmly held that a series of yoga poses, including the Bikram Sequence, is not copyrightable because (1) a series of yoga poses designed to promote health, like any exercise routine, constitutes a non-copyrightable fact or idea and (2) a series of yoga poses does not fall into the enumerated categories of copyrightable works under 17 U.S.C. § 102, but is, instead, a non-copyrightable system or procedure.

Key to the court’s ruling is its finding, guided by the Copyright Office’s June 2012 announcement, that yoga poses are exercises.  Exercises do not fall into the enumerated categories of authorship under 17 U.S.C. § 102 and are not copyrightable.   Thus, according to the court, a series of yoga poses, even if the manner in which the poses are arranged is unique, is merely a compilation of non-copyrightable exercises.

The court distinguished the copyrightability of the underlying Bikram Sequence from that of Choudhury’s books and video depicting the Bikram Sequence.  The first—the Bikram Sequence itself—is a compilation of non-copyrightable exercises (facts) and, therefore, is not copyrightable.  The second—books and videos depicting the Bikram Sequence—are “creative work[s] that compile[] a series of exercises.”  The creative expression contained within the books and videos meets the threshold for copyright, but not the “factual” series of yoga poses.

The court also explained why the Bikram Sequence could not find protection as a choreographic work.  The court gave three reasons: (1) “Congress contemplated protection for dramatic works to be something significantly more”, (2) “the preferable forms of pantomimes or choreographic works . . . are ones recorded in the Laban system of notation or as a motion picture of the dance” and (3) the Bikram Sequence “hardly seems to fall within the definition of a pantomime or a choreographic work because of the simplicity of the [Bikram] Sequence and the fact that it is not a dramatic performance.”

Each of these reasons produces more questions than answers, especially when considering the very thin line between a series of yoga poses designed to be taught in yoga studios to students wishing to improve their health and a dance comprised of series of yoga poses set to music (or not) for performance on stage in front of an audience in attendance at a dramatic event.  Is one of these copyrightable, but the other not?  If so, what’s the difference?  The intent of the person who compiled the sequence or the people executing the sequence?  Would the court’s opinion have changed if Choudhury had the Bikram Sequence recorded by Labanotation?

What about other forms or exercise that blur the lines between exercise and dance?  In a footnote, the court noted that copyright registrations issued for the TAE-BO exercise program may not be valid.  This implies that exercise trends derived from dance, such as the ever-infamous jazzercise or the more recently popular Zumba, may not be copyrightable when choreographed for group instruction at a gym but may be copyrightable when choreographed for performance on stage.

For now it is clear that a sequence of yoga poses created for the purpose of improving health is not copyrightable in the Central District of California, but the applicability of the court’s decision to variety of other, seemingly similar situations remains murky.

Leveson on Data Protection in the UK: What Do Allegations of Phone Hacking Have to Do With Data Protection?

By Maryanne Stanganelli on Posted in Uncategorized

Editor’s Note: This post is a joint submission to BakerHostetler’s  Data Privacy Monitor blog.

The much-anticipated Leveson Inquiry on the Culture, Practices and Ethics of the Press (“Leveson Report” or “Report”) was released on November 29, 2012.  The inquiry leading to the Report was initiated as a response to ongoing reports and allegations of systemic phone hacking by the English media.

The 16-month inquiry by Lord Justice Brian Leveson sought evidence from many, including victims and law makers, current and former prime ministers, all leading to the recommendations in the Report.  The leviathan tome – nearly 2,000 pages in length – censures the culture of the media in the United Kingdom for faults including its “tendency . . . vigorously to resist or dismiss complainants,” difficulties in securing an appropriate apology or correction, disregard for accuracy, failure of compliance, and—not least of which—an environment that allowed phone hacking to exist.  Its calls for the end of the current state of self-regulation of the print media by the Press Complaints Commission (PCC) and for independent oversight is a top-level take-away from its findings.  As of December 11th, it is being reported that the replacement to the PCC’s commissioner will be in place in early 2013.

Soon after the issuance of the Report, another story has emerged and seen increased attention, the Report’s potential effect on data protection laws.  Lawyers as well as politicians and journalists alike share concerns that the proposed reforms could chill investigative journalism.  In addition, some of the proposed reforms would have broader effects beyond the media’s gathering and use of personal data.  Overall, the changes seek to significantly strengthen the power of the Information Commissioner’s Office (ICO), particularly in its relation to the press, while narrowing exceptions for the press.  In fuller detail, there are at least five significant changes affecting data protection laws called for in the Leveson Report, and a host of recommendations to the ICO.  The report seeks to: 

  • Narrow an exemption to the UK’s Data Protection Act 1998 (DPA) specific to journalistic usefrom one where data processing is allowed with a “view to” publication, to one where processing is “necessary” for publication. It would remove language granting special weight to freedom of expression when a data controller considers whether the publication is in the public interest, and it would change the consideration whether compliance with the DPA is incompatible with the purpose of journalism from a subjective belief (the reasonable belief of the data controller) to an objective belief that the likely interference with privacy is outweighed by the public interest in publication.
     
    It also seeks to narrow the set of requirements from which the use is exempted.  For example, the data subject’s “right of access” would not be part of the exemption.  The Leveson Report is careful to clarify that the proposal to remove the right of subject access from the exemption is not meant to affect the protection of journalists’ sources.  However, there does not appear to be any attempt to provide a mechanism to discern when data that is subject to an access request relates to the source, which may present a challenge.  The further concern is that such requests could be used to disrupt a journalist’s investigation or obtain information before publication.
     
  • Clarify that the DPA Provides Compensation for ‘Pure Distress’ In Addition to Pecuniary Loss.
     
  • Repeal Certain Procedures That Relate to Journalism and Instead Grant More Power to the Information Commissioner.  The Report hints that the DPA could be amended to give the power to the Information Commissioner (IC) to decide whether publication is acceptable when there are challenges under the DPA.
     
  • Permit Imprisonment for Up to Two Years.  The Report calls for allowing terms of imprisonment of up to two years for offenses of unlawful obtaining of personal data.  The amendment would be applicable generally and not simply to the press.  Leveson sees this amendment as a response to the thriving black market in personal data.  This amendment was initially halted by lobbying by the press arguing that it would hamstring their ability to conduct investigations.  Leveson stresses that a high regard for public interest defenses to this kind of offense should alleviate the concerns of journalists.  The Report seeks to bring into force another amendment for such an enhanced defense for public interest journalism.
     
  • Extend the Prosecution Power of the Information Commissioner’s Office.  The Report recommends extending the prosecution powers of the IC to include any breach of the data protection principles outlined in the DPA.  It advocates for a new duty for the ICO to consult with prosecutors and reconstituting the ICO with a board of commissioners rather than one IC.  The concern here relates to the increased power in the hands of an entire board, which could have an effect on efficiency and independence, particularly where required to consult with prosecutors.

The Report also makes recommendations to the Information Commissioner in  its Executive Summary.  Among these recommendations, the Report suggests that the ICO take immediate steps to publish policies on its functions as well as guidelines and advice for the press to observe in the process of personal data and for individuals on their rights in relation to the use by the press of their data.  It also suggests that the ICO update Parliament on the effectiveness of new measures in its annual report to Parliament, adopt guidelines published in September 2012 for prosecutors on assessing the ‘public interest’ in cases affecting the media, and engage with the police to prepare a long-term strategy in relation to alleged media crime with a view to inclusion of the ICO where appropriate.

Controversial “Six-Strikes” Copyright Alert System Debut Delayed

By Alan Pate on Posted in Uncategorized

The Center for Copyright Information, an organization founded and funded by media industry organizations, their members and Internet Service Providers (ISPs), yesterday announced that it would push back the start date and will likely begin to roll out its long anticipated “Copyright Alert System” in the early part of 2013.  The announcement comes on the day the roll out had previously been rumored to begin. The Copyright Alert System or “CAS” is the result of an agreement among major ISPs and media industry organizations to work together and find new ways to reduce piracy.  According to the Center for Copyright Information, the program is primarily intended to be “educational” in nature.  ISPs, with the help of the third party firm MarkMonitor, will monitor for potentially infringing activity and then Internet users, when suspected of infringing activities, will receive a series of progressive alerts or “strikes” designed to inform them on copyright laws and dissuade them from further infringement.

In the first two of these strikes, users will receive an email letting them know they are suspected of downloading or sharing infringing material.  This email will contain information on ways to avoid illegal file sharing and include some suggestions on where they could seek out the same copyrighted material legally.

The third and fourth strikes will be in the form of an internet “pop-up” or a mandatory page redirect.  Users will be forced to click through some acknowledgement of their infringing activity before they can continue to use their Internet connection.  This way, or so the system is designed, if a user has ignored previous email alerts, an ISP can at least be sure by the third and fourth alerts the user is aware of the strikes.  The alert may also be meant to deal in some measure with the problem of multiple users on one Internet connection or unsecured Internet connections.

By the fifth and sixth strikes, ISPs may implement certain “mitigation measures” if they choose.  According to information on Center for Copyright Information’s website, these may include “throttling” or temporarily reducing internet speeds of the user.  Mitigation measures may also include a requirement that users contact their ISP directly to discuss their infringing activity.  None of the mitigation measures, however, go as far as cutting off a user’s service completely.

The Copyright Alert System has been the subject of heated debate. In addition to concerns of censorship and privacy, concerns have been raised regarding the fact that, in contrast to the recently failed SOPA and PIPA legislation, there is no avenue for appeal to a court of law for suspected infringers.  Instead, those served with “strikes” by their ISP must report exclusively to an arbitration firm hired by the Center for Copyright Information to organize and rule on appeals.  Furthermore, there will be a $35 filing fee for any user who wishes to appeal one of their strikes (which may be refunded should they be successful).

Other concerns that have been voiced include the breadth and collaborative scope of the CAS.  Specifically, some have suggested that with such close and extensive cooperation between all of the major United States ISP’s, certain anti-trust concerns might be implicated.

The most common criticism, however, concerns the general effectiveness of the program.  Will the CAS really do anything to cut down on piracy?  The consensus seems to be that it is doubtful sophisticated pirates will be affected by the CAS.  The use of VPN’s and other common IP masking tools will likely allow diehard pirates to keep downloading and uploading infringing content as they please.  For even unsophisticated infringers, it’s not clear having to click through a series of warnings will be anything more than a minor inconvenience.

However, the Center for Copyright Information has never claimed that the CAS is the end-all be-all solution to piracy.  Rather, it is a “progressive educational system” designed to cut down on some levels of infringement by informing consumers of the law. The CAS is premised on the assumption that most infringers do not even realize that they are infringing.  With this system of alerts, their hope is that the typical Internet subscriber is generally law abiding and would want to refrain from whatever infringing activity triggered an alert.  The Copyright Information Center claims that their research data shows most infringers would in fact “take steps to stop the unauthorized distribution of copyrighted content once alerted that it is occurring on their systems.”  If this is true, and the key to stopping online infringement is addressing some critical information gap between consumers and the copyright law, the CAS may have an impact reducing infringement. With any data regarding the effect on infringing activity some time away, the ultimate effectiveness of the CAS remains to be seen.

Fifty Shades of Gray Market Artwork

By Dennis Cohen on Posted in Uncategorized

Droit moral – the legal doctrine that grants artists a moral right to dictate certain treatment of their artwork even after sale – has a firm foundation in European law and elsewhere, but has never found much support in U.S. jurisprudence.  Certain moral rights are recognized under the Visual Artists Rights Act of 1990, 17 U.S.C. 106A, (VARA) and some state laws, but these are generally less robust than their international counterparts.  American observers often agree that the doctrine not only can undermine basic free market principles, but also may ultimately harm artists by muddying the value of their artwork to potential buyers.  However, the lack of an ongoing moral right in artwork may have produced a new uncertainty in the art market: forgeries.

According to a recent report in the New York Times, the proliferation of quality forgeries is a growing problem in the art world.  The problem is exacerbated by the failure of the U.S. legal system to effectively mark or destroy works identified as fakes, or otherwise remove them from the market.  Instead, the bogus art often slips back into the marketplace, and onto the walls of even high-end collectors.  The venerable Knoedler Gallery and its president were recently accused of selling forged art by Jackson Pollack, Willem de Kooning, Mark Rothko and Robert Motherwell.  Knoedler shut the doors on its 165-year history last year, but it is still litigating the cases, just recently settling one of them last month.  Some experts believe that if droit moral were recognized in the United States, artists and the foundations that protect their works could more easily force these forgeries out of the market for good.  Moral rights often include rights of attribution, integrity, and reputation.  In particular, the right of attribution may be used by an artist to prevent others from using that artist’s name in connection with work, which directly neutralizes the major characteristic of forgeries.  Moral rights, unlike copyright and other rights, are generally not time-limited or alienable.

But do we really want courts and law enforcement making decisions about what ends up in the dustbin, or worse, the shredder?  Sometimes an established forgery is later revisited and declared a genuine and valuable work.  Sometimes a piece of art walks the line between forgery and homage, and can be a worthwhile piece in its own right.  Sure, no one wants the aesthetic and monetary value of a real Pollack or Liechtenstein to decline because of a glut of forgeries.  But once a court orders the sheriff to burn that canvas, there is no going back on that decision.  For these reasons, one of the few moral rights enumerated by VARA is the right to prevent mutilation of certain artwork.

The Need for Careful Diligence in Drafting License Agreements Reinforced By Eighth Circuit Affirmation That a Perpetual, Royalty-Free Trademark License is an “Executory Contract”

By Marc Skapof on Posted in Uncategorized

One of the most powerful tools a chapter 11 debtor has is the ability to assume or reject executory contracts under section 365 of the Bankruptcy Code.  In bankruptcy parlance, when a debtor “rejects” an executory contract, it is considered as though the debtor breached the agreement as of the date it filed for bankruptcy and sheds the debtor’s obligation to perform under the rejected contract.  The non-debtor party receives a claim for damages arising from the debtor’s breach; however, in many cases, it will be worth only pennies on the dollar.  The converse of rejection is “assumption.”  When a debtor assumes a contract, it pays the non-debtor counterparty any monies due under the agreement and requires the non-debtor party to comply with the contract’s terms regardless of whether the non-debtor would rather terminate the agreement.  In addition, a debtor may assign an assumed contract to another party without the counterparty’s consent, subject to certain limited exceptions, so long as the assignee can assure the non-debtor party that it is financially capable of performing its obligations under the agreement.

A debtor’s ability to assume or reject an executory contract raises particular concern for licensors or licensees of intellectual property because trademark, copyright, patent and similar licenses are generally considered executory contracts under the Bankruptcy Code, the assumption or rejection of which may run counter to the non-debtor’s intentions when entering into the license.  Moreover, assumption or rejection of an intellectual property license may occur years after its execution so long as the court considers the agreement “executory.”  So long as both parties have material obligations remaining under the license or agreement in question, it will be considered “executory” for purposes of assumption or rejection.

The Interstate Bakeries Corporation’s chapter 11 caseprovides a clear illustration of how proper diligence and careful drafting is of paramount importance when entering into a license agreement of intellectual property.  The Eighth Circuit Court of appeals upheld a debtor-licensor’s rejection of a trademark license decade’s after its execution.  The practical effect of this rejection was to relieve the debtor of any remaining obligations under the contract, including its requirement to maintain and defend the licensed marks.

The Court affirmed that the perpetual royalty-free trademark license was an executory contract for purposes of section 365 of the Bankruptcy Code and thus subject to assumption or rejection.  The Court reasoned that this was because material obligations remained unperformed by the parties..  The Eight Circuit’s holding creates a circuit split, as it runs counter to the Third Circuit’s decision in In re Excide Technologies, 607 F.3d 957 (3d. Cir. 2010), where a similar agreement was not found to be an executory contract.  The Interstate decision relied primarily on specific provisions of the agreement that the parties conceded were material and serves as an example of how licensors and licensees of intellectual property must take care in drafting their licenses to account for a subsequent bankruptcy.

Under the majority view affirmed by Court, a contract is executory “when the obligation of both the bankrupt and the other party to the contract are so far underperformed that the failure of either to complete performance would constitute a material breach excusing performance of the other.”  The contract at issue here was an asset purchase agreement between Interstate and Lewis Brothers Bakeries (“LBB”) in which LBB paid Interstate $20 million for Interstate’s Butternut Bread business.  Under the agreement, Interstate also granted LBC a “perpetual, royalty-free, assignable, transferable, exclusive license” (the “License”) to use the Butternut mark in the Chicago area.  The License was executed at the same time as the asset purchase agreement.  Fourteen years after the sale to LBB, Interstate filed for bankruptcy in September, 2004.

As part of its bankruptcy case, Interstate moved to reject the License as an executory contract.  LBB objected to the motion, arguing that the neither party had any material obligations remaining under the License so that it could not be rejected.  Both the bankruptcy and district courts, however, pointed to specific provisions of the agreement, which required ongoing performance by the parties to make the License an executory contract.

The Eighth Circuit agreed, pointing specifically to section 5.2 of the License, which provided, in relevant part, that “a failure of [the parties] to maintain the quality and character of the goods sold under the Trademarks. . .” shall constitute a “material breach” giving Interstate the right to terminate the License.  In reaching its decision, the court drew a distinction between the license at issue in the Excide case, which did not contain any materiality provisions and section 5.2 of the License.  The court also focused on the fact that Interstate too had material obligations remaining under the License, including an obligation to maintain and defend the relevant trademarks. 

Although the Interstate decision may be read on the surface as a mere exercise in contract interpretation, the holding illustrates the importance of careful drafting and diligence when contemplating a trademark license agreement.  Despite the fact that the License was perpetual, royalty-free and part of a comprehensive sale, the court looked almost exclusively to the provisions of the License itself in affirming the lower courts.  Thus, if the provisions of a license agreement are recognized by the parties to be material, and unperformed obligations still exist, a court will hold the license to be susceptible to assumption or rejection even if the bankruptcy occurs years after the license was executed.

Hulkamania is Running Wild: Let the Battle Begin (in Court)

By Oren J. Warshavsky on Posted in Uncategorized

Terry Bollea, better known as the professional wrestler with the stage name Hulk Hogan (“Hogan”), is involved in an unattractive legal battle that presents an unusual intersection of the First Amendment, copyright law, and privacy/publicity issues.

Hogan filed two lawsuits arising out of a 2006 sexual encounter with Heather Clem (“Heather”), then the wife of his best friend Todd Clem (“Clem”), the popular radio personality “Bubba the Love Sponge” (pictured to the right).  The 30 minute encounter was taped and pictures and portions of the tape have been leaked on the internet.

In early October, celebrity gossip site Gawker posted a 141 second excerpt of the encounter (available here), fewer than ten seconds of which was the sexual activity.  Hogan’s first complaint was filed against Clem and Heather for making the tape, and the second was against the web-site Gawker for showing excerpts from the tape. The claims in both lawsuits are largely the same: invasion of privacy by intrusion, invasion of privacy by publication, intentional infliction of emotional distress and negligent infliction of emotional distress.  The lawsuit against Gawker was amended last week to include a copyright infringement claim (a copy of the amended complaint is here).  Hogan now claims to own the copyright to the tape and claims to have filed for a copyright registration.  Hogan sought $100 million in each lawsuit.

Clem publicly responded to the complaint against him by stating that Hogan was aware of the taping as well as its public release (various comments can be seen here, here, here, and here).  Now, however, Hogan has settled his claim against Clem and Heather, and Clem now states that Hogan was unaware of the taping and its publication (as discussed here).   

Hogan applied for a temporary restraining order and a preliminary injunction (application here) to prevent Gawker from showing the tape.  Gawker’s opposition (available here), filed on Friday November 2, argued that the First Amendment precludes Hogan’s claims for privacy rights violations and infliction of emotional distress.  Hogan’s amended complaint was filed on Thursday November 8, and, as stated above, for the first time asserts a copyright infringement claim and the allegation that Hogan applied for a copyright infringement claim.  Oral argument was held last week, and MSNBC reports that at oral argument Hogan’s counsel relied heavily on Hogan’s copyright claim. 

Of course, Hogan seeking copyright protection by, inter alia, filing copies of the tape with the Library of Congress (theoretically making the tape available to everyone), seems to belie Hogan’s claim that the excerpts published by Gawker violate his right to keep the tape private.  Likewise, there appears to be a tension between Hogan’s claim that he was unaware of (and did not consent to) the taping while at the same time claiming that he is the author for purposes of copyrightability.  Obviously, with respect to all of these claims the issues concerning the taping, Hogan’s awareness of it, and its publication are all fact intensive.

A ruling on Hogan’s request for an injunction should come soon.  It is unclear whether the copyright issues will be included in the decision, as those issues were not subject to briefing.  However, as this case unfolds, there should be interesting developments on the intersection between the privacy concerns (i.e. the unauthorized taping), the interplay with copyright ownership of the recording, and how both intersect with Gawker’s First Amendment rights.  Stay tuned.