Gibbons Law Alert
In Equals Three, LLC v. Jukin Media, Inc., the United States District Court for the Central District of California presented an informative “fair use” analysis in a dispute between two media companies over viral videos. The Court’s decision highlights the fact-sensitive nature of the doctrine of fair use. It also clarifies the extent to which a use must be transformative in order to be deemed fair use.
We previously reported on the failed attempts by the Conan Doyle Estate, Ltd., to extend the umbrella of United States copyright protection for Sir Arthur Conan Doyle’s pre-1923 Sherlock Holmes-related works. After suffering a setback at the district court level (N.D. Ill.), the Conan Doyle Estate sought a reversal with the U.S. Court of Appeals for the Seventh Circuit. However, the Estate was again denied, with the Seventh Circuit panel unanimously affirming the lower court decision.
We have previously posted our analysis of the oral arguments held before the Supreme Court in American Broadcasting Companies, Inc., et al., v. Aereo, Inc., No. 12-451, this past April. On June 25, 2014, the Supreme Court announced its decision in the case, holding that Aereo performs the television broadcasting companies’ copyrighted works publicly through the function of their service/system within the meaning of the Transmit Clause of the Copyright Act of 1976. The Court tried to carefully limit its holding to only the facts particular to Aereo’s system in order to avoid precluding the development of “cloud computing,” a still burgeoning field of technological and economical promise.
Last week, the Supreme Court heard oral arguments in American Broadcasting Companies, Inc., et al., v. Aereo, Inc., No. 12-451, a copyright action whose outcome could dramatically shape the future of television and cloud computing. Aereo is an internet start-up that uses arrays of dime-sized, customer-specific antennas to stream and store on-demand, over-the-air television, likening its technology as an alternative to an individual using, for example, an antenna and DVR to legally capture and record over-the-air content for private viewing. Fearing the loss of their intellectual property rights and lucrative retransmission fees, a consortium of broadcasters promptly sued Aereo for copyright infringement in March 2012 in the Southern District of New York. The broadcasters sought a preliminary injunction against Aereo, arguing that Aereo’s service amounted to thinly veiled public performances, and therefore, constituted copyright infringement. The SDNY, and subsequently the Court of Appeals for the Second Circuit, both ruled in favor of Aereo, citing the 2008 Second Circuit Cablevision case (Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2nd Cir. N.Y. 2008)), which established the legality of using hosted DVRs to store and replay content to individual subscribers.
Following a status conference held on June 27, it appears that the copyright case relating to ownership rights in the comic book super hero “Ghost Rider” will be going to trial in the Southern District of New York in November. We recently reported that the Second Circuit reversed the lower court’s dismissal of this lawsuit, Gary Friedrich Enters., LLC v. Marvel Enters., Inc., finding a genuine issue of material fact existed as to what rights, if any, Friedrich retained in the character following a 1978 contract he entered with Marvel. We reported additional background on the case here.
Last week, in Gary Friedrich Enters., LLC v. Marvel Enters., Inc., the Second Circuit reversed the lower court’s dismissal of a lawsuit brought by Gary Friedrich, who created the comic book super hero “Ghost Rider,” ruling that Friedrich could maintain his lawsuit against Marvel Enterprises Inc. regarding his ownership rights in the character.
Owners of books and music in physical media form need not fear if ever they decide to sell, rent, or otherwise dispose of these copyright-protected materials. The first-sale doctrine permits such activities by extinguishing a copyright owner’s exclusive right of distribution of copyrighted items that have been lawfully sold or transferred. However, according to a recent federal court ruling, Capitol Records, LLC. v. ReDigi Inc., No. 12 Civ. 95 (S.D.N.Y. March 30, 2012) owners of digital versions of the same works may find it more difficult to sell, rent, or otherwise dispose of their digital files.
Online resellers, used book stores, art galleries, and museums, among others, apparently can now breathe a sigh of relief and continue to display and resell goods originally sold or manufactured outside of the U.S., without the specter of a potential copyright infringement action looming on the horizon. Last week, in Kirtsaeng v. John Wiley & Sons, Inc., the U.S. Supreme Court, on a 6-3 vote, held that the “first sale” doctrine applies to copies of a copyright-protected work lawfully made abroad. Under copyright law, the “first sale” doctrine states that “the owner of a particular copy or phonorecord lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” 17 U.S.C. § 109(a).
Disputes can arise when a design professional prepares plans for an owner and the owner then uses those plans without compensating the architect. In H2L2 Architects/Planners, LLC v. Tower Investments, Inc., a case from the Eastern District of Pennsylvania, the court considered the pleading requirements for unpaid architects to assert claims for payment against owners/developers for architectural design and drawings under federal law.
Like 2012, 2013 promises to be a busy and significant year for intellectual property law. The Supreme Court is slated to decide a number of IP cases, including: Already, LLC d/b/a Yums v. Nike, Inc. (addressing the significance of a limited covenant-not-to-sue on declaratory judgment jurisdiction); Bowman v. Monsanto (determining whether the Federal Circuit erred by not finding patent exhaustion in second generation seeds and created an exception to patent exhaustion for self-replicating technologies); Gunn v. Minton (pertaining to whether federal courts have exclusive “arising under” jurisdiction when legal malpractice claims stem from a patent case); Kirtsaeng v. John Wiley & Sons, Inc. (regarding international copyright exhaustion, i.e., how Section 602(a)(1) and Section 109(a) of the Copyright Act apply to a copy that was legally acquired abroad and then imported into the United States); Federal Trade Comm’n v. Watson Pharm., Inc. (involving whether Hatch-Waxman reverse payment settlement agreements are legal); and most recently, Ass’n for Molecular Pathology v. Myriad Genetics, et al. (regarding the patentability of human genes and whether the petitioners have standing to challenge those patents).