Category Archives: Copyright

Two Unanimous Supreme Court Opinions Regarding the Copyright Act

It was an eventful day for copyright law on Monday, March 4, as the Supreme Court of the United States issued two unanimous opinions, both involving provisions of the Copyright Act.  The decisions were fittingly both issued on the 110th anniversary of the 1909 Copyright Act. The office of our counsel, Nancy Wolff, Cowan, DeBaets, Abrahams & Sheppard LLC,  wrote a review of these decisions and how they will impact copyright infringement cases going forward.

You can read the review of Public Benefit Corp v Wall Street.com and LLC and Rimini Street , Inc v Oracle USA, Inc. here

Supreme Court Hands Down Critical Decisions in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLCand Rimini Street, Inc. v. Oracle USA, Inc.,Resolving Circuit Splits Over Interpretation of Copyright Act Provisions

It was an eventful day for copyright law on Monday, March 4, as the Supreme Court of the United States issued two unanimous opinions, both involving provisions of the Copyright Act.  The decisions were fittingly both issued on the 110th anniversary of the 1909 Copyright Act.

In the first case, Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC,No. 17–571, the Court, in an opinion authored by Justice Ginsburg, resolved a long-standing circuit split over whether a copyright owner can sue in federal court with only a copyright application in hand, or whether a completed registration is necessary.  The Court held that “registration . . . has been made” under Section 411(a) of the Copyright Act—and thus an infringement suit may be instituted—when the Copyright Office grants or denies registration after evaluating the copyright application (coined the “registration approach”) rather than when a copyright owner merely submits the application, materials, and fee required for the registration to begin processing (the “application approach”).

In the second case, Rimini Street, Inc. v. Oracle USA, Inc., No. 17-1625, Justice Kavanaugh delivered the option for the Court, holding that Section 505 of the Copyright Act, which allows a party to recover “full costs,” does not authorize appellate courts to award litigation costs beyond the categories enumerated by Congress in the general costs statute codified at 28 U.S.C. § 1821 and § 1920.  Such “costs” are limited to fees for the clerk and marshal; transcript, copyright, and docketing fees; disbursements for printing and witnesses; and the compensation of court-appointed experts and certain special interpretation services. The Court rejected Oracle’s position that “full costs” under Section 505 included expert witness fees, electronic discovery expenses, and jury consultant fees.

Both of the Court’s determinations are instructive, as they clarify the legal landscape for copyright litigants who have been grappling with inconsistent applications of the Copyright Act for years.

The “registration approach” adopted in Fourth Estateincentivizes copyright owners—more than ever—to register works with the Copyright Office and will likely incite an uptick in registrations. While there were many benefits to registration prior to this decision, now, if a copyright owner fails to register works prior to discovering an infringement, she will have to wait an average of seven months to sue (the Copyright Office’s average processing time), and the work may continue to be infringed without recourse in the interim.  There is, of course, the option of invoking the Copyright Office’s Special Handling process, but it comes with a $800 special handling fee, which may not be an attractive or feasible alternative for some.

Furthermore, creators who have yet to register works and are running up against the three-year statute of limitations for infringement may be out of luck if they file an application and the Copyright Office does not process it in time.  The best practice for content owners is to apply for registration as soon as possible, even before infringement is anticipated or suspected.  Those who have filed lawsuits based on applications that have not yet been processed should take advantage of the Special Handling process, if possible, otherwise the claim may ultimately be dismissed as untimely.

The limitation on recoverable fees fashioned by the Rimini Street decision may also have far-reaching implications, especially for individual creators and litigants who cannot bear high litigation costs without the chance for recovery.  The ruling sounded a death knell for a copyright litigant’s ability to recover fees for expert witnesses, electronic discovery platforms, and jury consultants, which have become increasingly prevalent in copyright cases in the digital age.

For example, while music and software cases have almost always involved experts, matters involving “viral” infringements often call for specialized experts to address novel copyright issues.  In such highly technical cases, retention of a knowledgeable expert may make or break the case, making the choice of whether to hire without the option for recovery of those fees all the more difficult, especially for those unable to afford the costs.  Additionally, as the use of e-discovery platforms has become nearly ubiquitous, payment for such services has become a necessity for a litigant to maintain an equal footing with their opponent.

The Rimini Street ruling will certainly force copyright litigants to face difficult decisions in how they want to proceed with their case, especially if they are facing an opponent with deep pockets who can afford to hire numerous experts, pay for e-discovery platforms, and retain jury consultants.  Clients should discuss their financial limitations with counsel before deciding to commence a copyright action or how to defend against a copyright action, as they may have to bear the burden of certain unrecoverable costs to prevail.

 

CEPIC Statement on Works of Visual Arts in the Public Domain

CEPIC expresses its extreme disappointment at the EU copyright Directive as we see that last minute compromises were reached that will directly hurt CEPIC members specialised in fine art, history and vintage photography. Some of these libraries are attached to cultural institutions and contribute to their financing – this not only by “selling postcards” as the agreed compromise text implies.

Indeed, the provisions related to works of visual arts in the public domain were agreed behind closed doors, following no impact assessment and no consultation with the various sectors that will be affected.

With no evidence as to the advantage to the larger public, the  compromise provisions will directly hurt the legitimate interests of small private businesses who support cultural heritage and in some European countries the cultural sector institutions who have invested millions in the digitization of  photography and contribute, avoiding tax-payer cost, to the preservation and distribution of cultural heritage and its promotion to the wider public. This provision is discriminatory to photographers working for cultural institutions, and in some cases it discriminates against the interests of those cultural institutions themselves who rely on income generation derived from licensing works of visual arts in their collections. In the long run the larger public will suffer from a lack of investment in digitization, indexation and proper documentation of cultural heritage material.

We regret that these provisions were introduced without proper assessment and that the private heritage sector was used as a “pawn” in a larger negotiation. As a result we see that the EU copyright directive will penalise rather than promote large parts of the visual sector.

We ask for Chapter 3 Art. 10 b) and Recital 30 a) to be removed.


Executive Director (Tel. Mobile + 49 177 2332 514) CEPIC Center of the Picture Industry, Tel. Berlin + 49 30 889 101 60, www.cepic.org/contact

The European Commission Has Reached an Agreement Over New Copyright Rules

The European Commission has reached an agreement over new copyright rules, including the controversial Article 13 that will require platforms like YouTube to tackle copyright infringements at the point of upload.

One of the objectives of the of directive is to “reinforce the position of creators and right holders,” helping them to be remunerated for the online use of their content by user-uploaded-content platforms. Read the article on Digital TV Europe.com  here .

CEPIC also reviews the agreement on their site here 

Our DMLA Counsel and Legal Committee is reviewing the agreement and will have further information on its impact on the industry.  Stay tuned.

Copyright Office Releases “Copyright and Visual Works: The Legal Landscape of Opportunities and Challenges”

The U.S. Copyright Office has submitted a letter to Congress detailing the results of the Office’s public inquiry on how certain visual works, particularly photographs, graphic artworks, and illustrations, are registered, monetized, and enforced under the Copyright Act of 1976. The Office sought commentary on the marketplace for these visual works, as well as observations regarding the real or potential obstacles that creators and users of visual works face when navigating the digital landscape. A number of stakeholders raised specific issues they face on a regular basis regarding current copyright law and practices that fall within three general categories: (1) difficulties with the registration process; (2) challenges with licensing generally and monetizing visual works online; and (3) general enforcement obstacles.

The Copyright Office takes these concerns seriously and has already taken steps to address them where it can, most notably with the ongoing Office modernization efforts in preparation for a wholesale technological upgrade to the Office’s systems. In other areas, the Office finds that legislative action is the best solution. The Office continues to strongly support the idea of a small copyright claims tribunal, as well as a legislative solution to the orphan works conundrum. Congress’ action in these two areas would go far to alleviate several important concerns raised by visual artists.

The letter, public comments, and background material are available on the Copyright Office website here

Federal Judge Rules that Esquire’s Use of Photo of Trump at Private Wedding Is Not Fair Use (Bounds Explained)

The decision in Otto v. Hearst Communications, Inc., No. 1:17-cv-04712 (S.D.N.Y. 2018) provides a helpful guide to what is does not qualify as fair use in the context of a news story. Fair use is a limitation on a copyright owners exclusive rights and permits the use of a work without consent. It is codified in the current Copyright Act, and the statute provides examples of what can be considered fair use. Because “news reporting” is an example, it is all too common that popular news websites rely on fair use rather than licensing a photo, asserting that the use is news reporting. But is it?

Read the entire article here

Federal Court Explains the Bounds of Fair Use by a News Organization, Ruling That Esquire’s Use of Photo of Trump at Private Wedding Is Not Fair

by Nancy Wolff, DMLA Counsel

The decision in Otto v. Hearst Communications, Inc., No. 1:17-cv-04712 (S.D.N.Y. 2018) provides a helpful guide to what is does not qualify as fair use in the context of a news story. Fair use is a limitation on a copyright owners exclusive rights and permits the use of a work without consent. It is codified in the current Copyright Act, and the statute provides examples of what can be considered fair use. Because “news reporting” is an example, it is all too common that popular news websites rely on fair use rather than licensing a photo, asserting that the use is news reporting. But is it?

Most likely not. In Otto v. Hearst Communications, Inc., Judge Gregory H. Woods dealt with this issue directly and found that Esquire.com’s use of a photo of Donald Trump at a private wedding in an article about him crashing the wedding was not fair use. The instructive decision, which analyzed the copyright infringement claim and individual components of the fair use defense, provides a clear example of what is not considered fair use in the context of a news story.

In June 2017, Jonathan Otto, a weddinggoer, snapped a photo of Trump, who happened to appear at a wedding held at his golf club in New Jersey. The amateur photographer texted the photo to a friend, only to discover the next morning that his photo had unexpectedly gone viral—first on Instagram, and then splashed across the pages of several online media outlets.

Seeking to protect his rights, Otto, retained counsel and filed for copyright registration. He then enforced his copyright by suing several of the media outlets, including Hearst Communications, Inc., the parent company of Esquire, who had copied and published Otto’s photo, for copyright infringement. In response, Esquire did not dispute that it had copied the photo but asserted a fair use defense arguing that it had used the photo of Trump for news purposes. However, the Court did not buy this argument.

The Court analyzed each of the four fair use factors in detail and explained why, taken together, the factors did not weigh in favor of a finding of fair use. Specifically, he wrote: “Stealing a copyrighted photograph to illustrate a news article, without adding new understanding or meaning to the work, does not transform its purpose—regardless of whether that photograph was created for commercial or personal use.”

While Esquire’s status as a news publication may be important for the fair use inquiry, that fact alone does not make Esquire, or any other media organization, immune from liability under intellectual property laws. Below is an overview of Judge Woods’ analysis and findings on each of the elements of fair use:

Purpose and Character of the Work. First, the Court discussed the purpose and character of Otto’s photo—arguably the most important fair use factor. The judge noted that Hearst’s argument that the use is fair because the photo was created for personal use, and Esquire used it for news, was unpersuasive. While “news reporting” is specifically identified as a potential method of fair use in the statute, courts analyzing this factor still look to the transformativeness of the use of the copyrighted work. For example, did Esquire’s use of the photo in a post describing Trump crashing the wedding add a new meaning or message? Esquire argued that its use did because the article “added commentary regarding the President’s availability for photos at the wedding and broader trend in the President’s behavior.” However, the Court disagreed, concluding that Esquire used the image solely for illustrative purposes—to depict the President’s presence at a private wedding—and did not add anything new to the image.

Nature of the Copyrighted Work. Second, the Court examined the nature of the copyrighted work, such as whether it is expressive or creative versus factual or informational, and whether the work is published or not. While photographs can vary widely on this spectrum, the Court agreed with Esquire’s argument that the image is more factual, because the photo was taken spontaneously to document an event, and Otto did not direct or pose the subjects. As for the publication status of the photo, the parties did not dispute that the image had already been published and disseminated widely before Esquire’s use. Although a copyright owner’s right of first publication is important, the Court found that Esquire’s article did not threaten this right. Consequently, this factor—while far from the most important in the fair use analysis—weighed in favor of fair use.

Amount and Substantiality of the Portion Used. Next, the Court evaluated just how much of Otto’s photograph Esquire used. For its article, Esquire used a slightly cropped version of Otto’s photo, but otherwise did not edit it. As one would assume, the more of a copyrighted work that is taken, the less likely the use is to be fair; however, courts also take the purpose of the use into account, looking back at the first fair use factor. Because it was clear that Esquire used the entirety of the photo and did so without adding new meaning or otherwise transforming the work, the Court found that this factor weighed against fair use.

Effect of the Use on the Potential Market. Finally, the Court considered the effect of Esquire’s use of the photo upon the potential market for or value of the photo. Where the copyright holder has no intention of entering the market, or the inability to do so, courts often find this factor weighs in favor of fair use. However, that is not the case here. Because Otto had acted quickly to protect his rights and was seeking to license the photo, such as to publications like TMZ, the Court found that it was clear that Otto was attempting to enter the market. Esquire’s unauthorized publishing of the same photo destroys the potential market and harm’s Otto’s ability to license the work. As such, the fourth factor also weighed against fair use.

Weighing the four factors together, the Court found that it was evident that Hearst’s use of the image was not fair. “The fact that Hearst’s commercial use did not transform the Photograph’s purpose or add new meaning to the image; the fact that Hearst used the work in its entirety; and the potential harm to any financial opportunities Otto might reasonably pursue for use of the photo, outweigh the fact that the image is factual and published,” Judge Woods concluded.

While any fair use analysis is an inherently fact-driven inquiry, this case is helpful to explain the point that a photo that merely illustrates a newsworthy article, without adding more, is not fair use. If the photo was the news story itself, the result might have been different. This case confirms that images to illustrate articles should be licensed and not just taken

PicRights Extends Global Copyright Enforcement Network To Brazil

New partner in Brazil to monetize infringements for global customers

PicRights Europe GmbH, a global leader in copyright compliance, has added a new enforcement partner in Brazil to monetize copyright infringements for the world’s leading news agencies, stock image agencies and independent photographers. PicRights Brazil will augment PicRights’ long established network in major markets in Europe, North America and the Middle East. No other copyright compliance service offers its clients as much geographical coverage of key markets around the world.

“With the established expertise of Luis Franca and his team, we’re hitting the ground running in Sao Paulo. We’ve already got a significant number of cases ready for enforcement in Brazil in the system,” says Alfred Hoefinger, CEO of PicRights Europe.

Geoff Cannon, VP Sales of PicRights Europe, adds “We’re well aware that copyright infringement is rife in some countries beyond our current scope and we’re working toward solutions that will extend our reach to every part of the world. Our new partnership in Brazil is another big step.”

PicRights’ end-to-end service allows copyright owners to concentrate on their core business while PicRights handles the difficult business of monetizing copyright infringements.

PicRights uses state-of-the-art technology to identify infringements, a team of experienced QC staff to qualify them as enforceable, then distributes the actionable cases to the appropriate enforcement unit for settlement and collection of licensing fees. If PicRights’ enforcement staff is unable to settle a case, it is escalated to a law firm specializing in intellectual property within the relevant jurisdiction to pursue a settlement and if necessary, litigate.

A highly efficient workflow system allows PicRights enforcement teams, legal counsel and clients to collaborate and exchange information quickly, regardless of location. The proprietary payment portal collects all funds and transparently distributes proceeds between copyright owners and service partners.

About PicRights:

PicRights Europe GmbH is headquartered in Switzerland with enforcement operations and professional compliance officers in central and northern Europe (Germany, Austria, Switzerland, France, Benelux and Scandinavia), London (for UK and Ireland), the Middle East (Emirates and Saudi Arabia), Toronto (for USA and Canada) and Sao Paulo, Brazil.

** PicRights is a new Member of DMLA!