In a decision that is already attracting plenty of controversy, comments, compliments and complaints, the Court of Appeals for the Federal Circuit has held that isolated human DNA molecules are patentable, and were validly patented by Myriad, under the (US) Patents Act. See Association for Molecular Pathology et al. v. Myriad Genetics, Inc et al. (Case No 2010-1406, Decided July 29, 2011). The decision reverses in part and affirms in part the decision of Judge Sweet, sitting in the District Court for the Southern District of New York (Case No. 09-CV-4515). Continue reading »
If I told you that Robert Burck had had a haircut, you probably wouldn’t know what I was talking about. But if I told you that while in Times Square last week I noticed that the Naked Cowboy is back performing with a new look, you might even remember the lawsuit he filed last year against Sandra Brodsky, which I commented on here (case 1:10-cv-05539-VM).
Briefly, Burck sued Brodsky for trademark infringement over her use of the Naked Cowgirl label; and her counterclaims included an allegation that he had obtained some of his trademark registrations fraudulently. Continue reading »
On March 22, 2011, Judge Denny Chin handed down his Order rejecting the proposed settlement agreement (the ASA) between The Authors’ Guild et al. and Google (Case 1:05-cv-08136-DC). The Order is relatively short, despite the passage of over a year since the last hearing on the matter, and I thought it would be interesting to use extracts of Judge Chin’s words to create a reliable summary of the decision. The headings, and words, used are Judge Chin’s, except where a filing is indicated.
Comments on the Order itself may follow in a separate posting in due course. The Order is embedded below.
‘The question presented is whether the ASA is fair, adequate, and reasonable. I conclude that it is not.
While the digitization of books and the creation of a universal digital library would benefit many, the ASA would simply go too far. It would permit this class action … to implement a forward-looking business arrangement. … Indeed, the ASA would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case. … [T]he motion for final approval of the ASA is denied.
A. The Facts and Prior Proceedings
Millions of the books scanned by Google … were still under copyright, and Google did not obtain copyright permission to scan the books … I entered an order preliminarily approving the ASA on November 19, 2009 (ECF No.772) …. [H]undreds of class members objected to the ASA. A few wrote in its favor.
B. The ASA
The ASA distinguishes between in-print (Commercially Available) and out-of-print (not Commercially Available) Books. (ASA §§ 1.31, 3.2, 3.3). Google may not display in-print Books at all unless and until it receives prior express authorization from the Books’ Rightsholders. … Google may display out-of-print Books without the prior express authorization of the Books’ Rightsholders, but its right to do so ceases when and if the Rightsholder directs Google to stop.
C. The Objections
The vast majority objected to the ASA. Some 6800 class members opted out.
A. Applicable Law
Under Rule 23(e) of the Federal Rules of Civil Procedure, a settlement of a class action requires approval of the court. Fed. R. Civ. P. 23(e). The court may approve a settlement that is binding on the class only if it determines that the settlement is “fair, adequate, and reasonable, and not a product of collusion.” Joel A. v. Giuliani, 218 F.3d 132, 138 (2d Cir. 2000); see Fed. R. Civ. P. 23(e)(2).
In this Circuit, courts traditionally consider …. the [nine] Grinnell factors [City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974)]. … Public policy, of course, favors settlement.
As a preliminary matter, I conclude that most of the Grinnell factors favor approval of the settlement. … Only two of the Grinnell factors weigh against approval of the settlement: the reaction of the class and defendant’s ability to withstand judgment. … The former … is important. Not only are the objections great in number, some of the concerns are significant. Further, an extremely high number of class members — some 6800 – opted out. … I turn to the objections now.
1. Adequacy of Class Notice
I am satisfied that the class received adequate notice.
2. Adequacy of Class Representation
The adequacy of representation inquiry considers whether “1) plaintiff’s interests are antagonistic to the interest of other members of the class and 2) plaintiff’s attorneys are qualified, experienced and able to conduct the litigation.” Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52, 60 (2d Cir. 2000). … I conclude that there is a substantial question as to the existence of antagonistic interests between named plaintiffs and certain members of the class. … [T]he differences here are troubling.
3. Scope of Relief Under Rule 23
Certain objectors as well as the United States argue that the ASA will improperly use Rule 23 to shape a “forward looking” business arrangement that would release claims not before the Court.
The ASA can be divided into two distinct parts. The first is a settlement of past conduct and would release Google from liability for past copyright infringement. The second would transfer to Google certain rights in exchange for future and ongoing arrangements, including the sharing of future proceeds, and it would release Google (and others) from liability for certain future acts. (See, e.g., ASA §§ 10.1(f), 10.1(g), 10.2(a)). I conclude that this second part of the ASA contemplates an arrangement that exceeds what the Court may permit under Rule 23. As articulated by the United States, the ASA “is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation.” (DOJ Statement of Interest 2, Feb. 4, 2010, ECF No. 922 (“DOJ SOI”)). Moreover, the Rules Enabling Act provides that the rules of procedure “shall not abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072(b).
Although I am persuaded that the parties are seeking in good faith to use this class action to create an effective and beneficial marketplace for digital books, I am troubled in several respects.
a. A Matter for Congress
First, the establishment of a mechanism for exploiting unclaimed books is a matter more suited for Congress than this Court.
The questions of who should be entrusted with guardianship over orphan books, under what terms, and with what safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties. Indeed, the Supreme Court has held that “it is generally for Congress, not the courts, to decide how best to pursue the Copyright Clause’s objectives.” Eldred v. Ashcroft, 537 U.S.186, 212 (2003); accord Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984) (“[I]t is Congress that has been assigned the task of defining the scope of the limited monopoly that should be granted to authors or to inventors in order to give the public appropriate access to their work product.”).
[T]he ASA would also raise international concerns, and foreign countries, authors, and publishers have asserted that the ASA would violate international law. For this reason as well, the matter is better left for Congress.
b. The Scope of the Pleadings
Second, the ASA would release claims well beyond those contemplated by the pleadings. … The case was about the use of an indexing and searching tool, not the sale of complete copyrighted works.
Google would have no colorable defense to a claim of infringement based on the unauthorized copying and selling or other exploitation of entire copyrighted books. Yet, the ASA would grant Google the right to sell full access to copyrighted works that it otherwise would have no right to exploit … And it would do so even though Google engaged in wholesale, blatant copying, without first obtaining copyright permissions. While its competitors went through the “painstaking” and “costly” process of obtaining permissions before scanning copyrighted books, “Google by comparison took a shortcut by copying anything and everything regardless of copyright status.” (Hr’g Tr. 43 (Thomas Rubin, counsel for Microsoft)). As one objector put it: “Google pursued its copyright project in calculated disregard of authors’ rights. Its business plan was: ‘So, sue me.'” (Objection of Robert M. Kunstadt to Proposed Settlement 3, ECF No. 74).
[Footnote 13: “The Google Book Search (GBS) initiative envisioned in the [ASA] is not a library. It is instead a complex and large-scale commercial enterprise in which Google — and Google alone – will obtain a license to sell millions of books for decades to come.”(Letter from Pamela Samuelson to Court (Jan. 27, 2010) (ECF No.893) (“Samuelson Letter”)).]
Applying Firefighters, I conclude that the released claims would not come within “the general scope of the case made by the pleadings.” 478 U.S. at 525. Applying Wal-Mart Stores, I conclude that the released conduct would not arise out of the “identical factual predicate” as the conduct that is the subject of the settled claims. 396 F.3d at 107 (citation omitted).
c. The Interests of Class Members
While it is true that in virtually every class action many class members are never heard from, the difference is that in other class actions class members are merely releasing “claims” for damages for purported past aggrievements. In contrast, here class members would be giving up certain property rights in their creative works, and they would be deemed – by their silence – to have granted to Google a license to future use of their copyrighted works.
4. Copyright Concerns
“Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials.” Sony, 464 U.S. at 431. … Yet, the ASA proposes to expropriate rights of individuals involuntarily. … [T]he notion that a court-approved settlement agreement can release the copyright interests of individual rights owners who have not voluntarily consented to transfer is a troubling one.
A copyright owner’s right to exclude others from using his property is fundamental and beyond dispute. … As counsel for Amazon argued: “[T]he law of the United States is a copyright owner may sit back, do nothing and enjoy his property rights untrammeled by others exploiting his works without permission.” (Hr’g Tr. 46-47 (David Nimmer)). Under the ASA, however, if copyright owners sit back and do nothing, they lose their rights. (See id. at 47). Absent class members who fail to opt out will be deemed to have released their rights even as to future infringing conduct. “Copyright owners who are not aware that the [ASA] affects their interest unknowingly leave Google to decide how their books are used.” Glorioso, supra n.3, at 992. … [I]t is incongruous with the purpose of the copyright laws to place the onus on copyright owners to come forward to protect their rights when Google copied their works without first seeking their permission.
5. Antitrust Concerns
Certain objectors oppose the ASA on antitrust grounds, arguing that (1) certain pricing mechanisms would constitute horizontal agreements that would violate the Sherman Act; (2) the ASA would effectively grant Google a monopoly over digital books, and, in particular, orphan books; and (3) such a monopoly would further entrench Google’s dominant position in the online search business.
The ASA would give Google a de facto monopoly over unclaimed works … [and] … would arguably give Google control over the search market. … The seller of an incomplete database — i.e., one that does not include the millions of orphan works – cannot compete effectively with the seller of a comprehensive product.
6. Privacy Concerns
The privacy concerns are real. Yet, I do not believe that they are a basis in themselves to reject the proposed settlement.
7. International Law Concerns
I need not decide whether the ASA would violate international law. In light of all the circumstances, it is significant that foreign authors, publishers, and, indeed, nations would raise the issue. … The fact that other nations object to the ASA, contending that it would violate international principles and treaties, is yet another reason why the matter is best left to Congress.
In the end, I conclude that the ASA is not fair, adequate, and reasonable.’
Authors, academics, practitioners and even foreign governments have spent much of the last 18 months discussing what the Authors’ Guild lawsuit against Google means for copyright law and for consumers. Many predictions have been made about the implications of a settlement agreement which the parties submitted to Judge Denny Chin in early 2010, when he was sitting as a Federal District Judge in the Southern District of New York.
While some of the reactions have managed to be rational and/or well thought through, the more recent thoughts of interested parties have turned to something much more practical – when will we actually get Judge Chin’s decision?
Recent developments in relation to three dates indicate that we might see Judge Chin’s opinion handed down some time within the next four weeks. Continue reading »
The Court of Appeals for the Second Circuit has amended its Local Rules to provide for expedited appeals in some cases, and to reduce the amount of time for parties to file their main briefs. Both take effect on December 15, 2010.
According to the Clerk’s office:
“Effective December 15, 2010, pursuant to amended LR 31.2(b), the Court of Appeals for the Second Circuit will establish an Expedited Appeals Calendar (‘XAC’) to facilitate the prompt determination of appeals from district court orders that dismiss a complaint for (a) lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1); (b) failure to state a claim upon which relief may be granted under Fed. R. Civ. P. 12(b)(6); or (c) filing a frivolous complaint, or for any other ground specified in 28 U.S.C. §1915(e)(2).”
If an Appellant indicates that its complaint has been dismissed for any of these reasons, the Clerk will notify the parties that the appeal has been placed on the XAC. The expedited schedule will be as follows:
- The Appellant’s brief will be due 35 days from the Clerk’s notification.
- The Appellee’s brief will be due 35 days after the Appellant’s brief.
- The Appellant’s reply will be due 14 days after Appellee’s brief.
Unless an appeal has been placed on the XAC, new cases and cases pending as of December 15, 2010, an Appellant’s main brief will be due no later than 91 days (previously it was 120 days) after the “ready date”. The “ready date” is defined in FRAP 15 and LR 31.2 (a)(1)(A). The Appellee’s brief must be filed no later than 91 days after the filing of the Appellant’s brief.
Appellants and Appellees may be able to file under the previous rule if they have filed a schedule notification prior to December 15, the record is voluminous or the deadline poses an extreme hardship. According to this notice:
“An appellant who files a scheduling notification prior to December 15, 2010 may request a brief filing date pursuant to the prior 120-day rule.
An appellant who files a scheduling notification on December 15, 2010 or thereafter must request a brief filing date pursuant to the new 91-day rule, unless the record is voluminous or the deadline poses an extreme hardship pursuant to LR 31.2(a)(1)(D).
An appellee who files a scheduling notification prior to December 15, 2010 may request a brief filing date pursuant to the 120-day rule.
An appellee who files a scheduling notification on December 15, 2010 or thereafter must request a brief filing date pursuant to the new 91-day rule, unless the record is voluminous or the deadline poses an extreme hardship pursuant to LR 31.2(a)(1)(D).”
Yahoo! reports today that Judge Kimba Wood, in the Federal Court for the Southern District of New York, has issued a permanent injunction against the makers of LimeWire, the P2P file-copying software that allows users to copy files remotely.
The ruling is not yet available publicly, but Yahoo! reports on it as follows:
“Saying that LimeWire’s parent Lime Wire LLC intentionally caused a ‘massive scale of infringement’ involving thousands of works, Wood issued a permanent injunction that requires the company to disable its ‘searching, downloading, uploading, file trading and/or file distribution functionality.’
Record companies ‘have suffered — and will continue to suffer — irreparable harm from Lime Wire’s inducement of widespread infringement of their works,’ Wood wrote.
She called the potential damages ‘staggering,’ and probably ‘well beyond’ the New York-based company’s ability to pay.”
You can read the Yahoo! report here: http://abbr.it/aqRRIw and I will post details of the ruling when it becomes available.
We’re only a few short weeks away from the US mid-term elections and the politicians are filling the air waves with their electoral messages. A few things are common throughout their ads.
First, no-one wants to mention their party. Republicans and Democrats alike are campaigning on a platform of near-independence. Second, no matter what experience you have, it is obligatory to say things like “Washington is broken” (even if that’s all your ad really says) and to tell people that you’ll reform the political establishment (single-handedly, presumably, since no-one wants anything to do with their party). Most people are also talking about creating jobs, in some cases so that small businesses can have more lunchboxes. What is striking is that, so far, every single politician who wants to create jobs says they’ll do it by tax reform or some other fiscal remedy: no-one has had anything to say about protecting the businesses that these entrepreneurs have created or about working with Victoria Espinel, the recently-appointed US IP Czar.
There are a number of explanations for this glaring omission. I suppose it’s possible that the politicians are scared that cyber-terrorists will DDOS their campaigns if they dare mention IP, but I don’t think that’s it. Nor do I think that it is because the system is as good as it can be and there’s no need to tamper with perfection. And I don’t think that it’s because they don’t understand it, although there have been plenty of inches given to the apparent IQ-challenges of some candidates.
Obviously, IP is not on the agenda because it doesn’t win votes, and the reason it doesn’t win votes is because not enough voters understand it. Politicians prefer to use words like “corrupt”, “broken” and “tax” to hit the electorate’s lowest common denominator when they feel the need to adopt a safe, simple, populist message that doesn’t require anyone to think too hard. “Protecting innovation”? Too much effort to explain it; might alienate people.
I gave a talk a while ago to entrepreneurs on what IP was and how it can help them protect and grow their businesses. These were smart people with great ideas, but many of them didn’t know the difference between trademarks, copyrights and patents. They didn’t know what they could do with someone else’s work, and what they could not. They didn’t know about registered rights and unregistered rights. When they left the seminar, though, they were excited at the possibility of new marketing strategies and new lines of product development.
I feel strongly about helping people get on their own two feet and will continue to do what I can to help small businesses. It’s a disservice to voters to assume that they can’t think for themselves and it’s almost naive to say that tax savings will necessarily (yet only indirectly) lead to job creation. What is really needed is more prominent political support for measures that will directly assist enterprises to secure and grow their businesses. A better understanding of intellectual property is central to that.
September 10, 2010 – Bob Marley’s estate has lost its copyright claim against UMG Recordings over various sound recordings made by Bob Marley in the 1970s, including “Catch a Fire”, “Rastaman Vibrations” and “Exodus”.
Judge Denise Cote, sitting in the District Court for the Southern District of New York, held that the albums were “works for hire”, meaning that UMG was their author under the (US) Copyright Act 1909, and gave some consideration to how digital downloads (is there any other type of download?) should be categorized under agreements entered into before the advent of MP3s.
In all, Judge Cote addressed three questions:
- What constitutes a “work for hire” under the Copyright Act 1909?
- Who owns the renewal terms in the sound recordings?
- Had UMG properly accounted for royalties accruing pursuant to digital downloads?
Later on, I’ll tell you what “No Woman, No Cry” actually means…
Judge Cote answered the questions as follows:
1. In the Second Circuit, a work is a “work for hire” if it satisfies the “instance and expense” test. See Martha Graham Sch. and Dance Found., Inc. v. Martha Graham, 380 F.3d 624, 632 (2d Cir. 2004). The “instance” part of the test is satisfied where one party “induces the creation of the work and has the right to direct and supervise the manner in which the work is carried out”, even if that right is not exercised. “What is dispositive”, wrote Judge Cote, “is that [UMG] had the contractual right to accept, reject, modify, and otherwise control the creation of the Sound Recordings”.
The “expense” limb is more interesting. Judge Cote held that because they had been advanced to Bob Marley and were only recoupable against royalties, UMG’s predecessors had borne the expenses of the creation of the sound recordings:
“The fact that [UMG] paid Bob Marley advances against royalties for the creation of the Sound Recordings, combined with the fact that [UMG] advanced the recording costs for the albums that would only be recouped if the albums were succesful, is sufficient to satisfy the expense prong of the instance and expense test”.
That’s interesting: I can understand that UMG bore the risk of the venture, but wonder whether the expense was in fact Bob Marley’s since UMG would be made whole by redirection of cash that would otherwise have gone to Bob Marley’s pocket.
Judge Cote also noted that there was no need for the words “work for hire” to be included in an agreement governed by the 1909 Act (cf. 17 U.S.C. § 101).
Together, these findings created “an almost irrebutable presumption” (according to Second Circuit precedent, in the form of Estate of Burne Hogarth v. Edgar Rice Burroughs, Inc., 342 F.3d 149, 158-63 (2d Cir. 2003)) that the Sound Recordings were works for hire, and no evidence had been introduced to rebut it.
2. Looking at all the evidence, including some that UMG had moved to strike, Judge Cote concluded that UMG was the statutory author and owner of both the initial and renewal terms of the Sound Recordings.
3. Finally, Judge Cote considered which of two definitions applied to downloads of the Sound Recordings. The first definition referred to “Masters”, as defined in the agreements to include “master records”, delivered “via telephone satellite cable or other direct transmission to the consumer over [sic] wire or through [sic] the air”. The second referred to “records” which are “released in formats newly developed as a result of advanced technology”. I would have said it was clear that downloads should fall into the second category, but Judge Cote did not decide the issue, holding instead that it was “ambiguous” since the terms were susceptible of “at least two fairly reasonable meanings”. Accordingly summary judgment on this issue was refused.
Finally, “No Woman, No Cry” is a fairly formal transcription of what is actually being sung. The words are apparently more like, “No woman nuh cry”, which in Jamaica would mean “No woman; don’t cry”.
The case is 08 Civ. 6143 (DLC). Judge Cote’s opinion appears below.
Although it was filed over a week ago, no-one seems to have picked up on Sandra Brodsky’s answer and counterclaim in the infamous Naked Cowboy litigation.
The answer itself is somewhat, em, bare (the first six pages more or less repeat the refrain that the Defendant (who is also known as Sandra Kane) either “lacks sufficient knowledge” or denies the pleading) but there are a few tidbits to hint at where the dispute might be going.
Ms. Brodsky’s answer asserts a variety of affirmative defenses, namely:
- “the applicable statute(s) of limitations”;
- the doctrine of laches;
- the doctrine of estoppel;
- the doctrine of acquiescence;
- the doctrine of waiver;
- the doctrine of unclean hands [don’t go there];
- the doctrine of fair use;
- the free speech provisions of the First Amendment; and
- the doctrine of parody.
She also admits to making obscene gestures while performing, and says she has been performing nude or semi-nude for over four decades (previous reports stated that she was 37 years old, which would make her younger than the Naked Cowboy (aka Robert Burck, who briefly (naturally) entered the race for Mayor of New York last year)).
The counterclaim is interesting too. There are the usual arguments that the Defendant’s acts are outside the statute and even if they aren’t that the registration is invalid. According to the counterclaim, “Naked Cowgirl”:
“is a descriptive term used fairly and in good faith in its primary descriptive sense.”
Furthermore, the Defendant:
“denies that she has used Naked Cowgirl as a trademark or that the NAKED COWBOY mark is capable of functioning as a trademark. [The NAKED COWBOY registration] is invalid because it is generic and/or descriptive without secondary meaning.”
But in a shot below the belt, Sandra Brodsky accuses the Naked Cowboy of extortion and, separately, says his trademark registration was “fraudulently obtained”; she alleges that at the time of his application he had not been using the mark in respect of several of the services applied for and that he must have known that fact when he claimed his application was supported by his “actual use” of the mark in respect of those services.
Finally, Ms. Brodsky has demanded a jury trial. No doubt neither of them will be intimidated by a room full of strangers.
The case is Naked Cowboy v. Brodsky, case 1:10-cv-05539-VM.
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On September 9, 2010, Judge Deborah A. Batts entered an order denying Plaintiff’s Motion in Limine to exclude evidence from trial in the ongoing litigation between the estate of J.D. Salinger and the author of the book “60 Years Later: Coming Through the Rye”.
The motion, which was filed back on June 19, 2009, seeks to exclude exhibits and witness testimony from the docket on the grounds that the witnesses are not qualified to testify as experts. Judge Batts ruled that the motion was premature since the case was not yet scheduled for trial, and dismissed it without prejudice. The entering of the order last week appears to be no more than a formality since Judge Batts had already rejected the motion when she granted Plaintiff’s a preliminary injunction in July 2009 (see footnote 1 to that judgment, albeit referring to June 17, 2009 instead of June 19, 2009, here: 09 Civ. 5095 DAB (S.D.N.Y., July 1, 2009))
Anyone familiar with the litigation will recall that prior to Fredrik Colting (writing as J.D. California) being sued, his book was presented in the UK as a “sequel” to Salinger’s classic. After being sued by Salinger, on the basis that the right to create sequels is one of the exclusive rights reserved for the owners of copyrights in literary works under the Copyright Act, Colting and his representatives have said that the book is a commentary or parody of the original, and/or that it is a work of literary criticism (in order to argue that the book is not a derivative work or that it is otherwise protected by the fair use provisions).
It may be some time before this case reaches trial, although Judge Betts has already held that “Plaintiff is likely to succeed on the merits of its Copyright claim” (09 Civ. 5095 DAB (S.D.N.Y., July 1, 2009)). Until then Colting’s book is likely to remain unavailable on amazon.com, even though it is available outside the US.
The case is Salinger v. Colting, 09 Civ 5095 (DAB).