tag:blogger.com,1999:blog-67396375082821964392024-03-26T23:37:56.694-07:00Legal MinimumA plain-English overview of legal issues that affect creatives and creators, as understood by someone who works in the business. Posts aren't legal advice, my employer isn't responsible for what I say, subscribe if you like what you see.Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.comBlogger94125tag:blogger.com,1999:blog-6739637508282196439.post-28118799963493135102015-03-12T22:41:00.002-07:002015-03-12T22:41:50.971-07:00"Blurred Lines" is clear infringementAm I the only one in the world who thinks the Blurred Lines judgment is right? From the Internet, it sure seems that way.<br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><br data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$3:0" /><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$4:0">Robin Thicke
and Pharrell Williams broke into jail here. From a litigator's perspective I
have no hesitation in saying they are reaping what they sowed. </span></span></span></span><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$4:0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$0:0">"Blurred
Lines" ended up in court when Pharrell and Thicke sued the estate of Marvin Gaye for a declaratory judgment, which
is where you ask a judge to say "this thing you claim isn't true".</span></span></span></span></span><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0"> And
from a copyright lawyer's perspective I say this is a judgment that
shows you can create a derivative work of something without actually
incorporating that work.</span></span></span></span><br />
<br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0">And that principle is nothing new.</span></span></span></span><br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0"></span></span></span></span><br />
<a name='more'></a><br />
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First, the songs. Here's Blurred Lines<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen="" class="YOUTUBE-iframe-video" data-thumbnail-src="https://ytimg.googleusercontent.com/vi/yyDUC1LUXSU/0.jpg" frameborder="0" height="266" src="http://www.youtube.com/embed/yyDUC1LUXSU?feature=player_embedded" width="320"></iframe></div>
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And here's Marvin Gaye's "Got to Give it Up"<br />
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<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen="" class="YOUTUBE-iframe-video" data-thumbnail-src="https://ytimg.googleusercontent.com/vi/kdnyrnLXFhg/0.jpg" frameborder="0" height="266" src="http://www.youtube.com/embed/kdnyrnLXFhg?feature=player_embedded" width="320"></iframe></div>
<br />
Is the one song a derivative work of the other? Based on there being no note-by-note copying, the creators of "Blurred Lines", Pharrell and Robin Thicke, believed no. A jury said yes. And the music industry went crazy claiming it would "kill copyright" by allowing people to "copyright a genre".<br />
<br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0"><br /></span></span></span></span>
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0">But the law has seen this issue before.</span></span></span></span><br />
<br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0">In <i>Suntrust v. Houghton Mifflin</i>, Suntrust Bank (the trustees of the estate of Margaret Mitchell) sued Houghton Mifflin for publishing a book called "The Wind Done Gone" (TWDG). TWDG was based on "Gone With The Wind" (GWTW). It presented itself as a perspective on slavery in the rural south. But there were significant similarities between the two works, including that TWDG:</span></span></span></span><br />
<ol>
<li><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0">Explicitly refers to GWTW in the preface.</span></span></span></span></li>
<li><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0">Reproduces core characters, character traits, and relationships from GWTW (although not their names).</span></span></span></span></li>
<li><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0">Reproduces famous scenes and other elements of the plot of GWTW.</span></span></span></span></li>
</ol>
The general principle in copyright law is that it's not infringement to copy someone's ideas, just the way they expressed them.<br />
<br />
<i>Suntrust</i> is traditionally used in law schools to teach the parody defense. That matters in this context: parody is a type of fair use, and fair use only becomes relevant when you're defending against infringement. Which means the other side showed infringement first. And that happened here: at trial and again on appeal Suntrust demonstrated that TWDG infringed against GWTW. (In case you're curious, Houghton Mifflin convinced the judge TWDG was a parody, and the case eventually settled.)<br />
<br />
<i>Suntrust</i> picks up a theme that I've written about before: that you can infringe by copying things other than the specific wording of a situation, if what you copied is something that is so specific to a particular creation that it is the expression of that creation. The parallel is to using pre-existing characters in new literary works, and the law around this is both settled and unsurprising: if you use a character created by someone else you're infringing them, and if you don't have a defense to that infringement then you need a license.<br />
<br />
I won't reproduce that entire post - it's linked below if you're interested. But it's not that big a stretch to go from saying that it's infringement to copy someone's literary character even if you don't copy any of the words that comprise the description of that character, it's also not a stretch to say you can copy someone's song without needing to take any of its notes.<br />
<br />
The quick-and-dirty test for copyright infringement turns on two points: access to the original work and similarity between the works. Apparently there was some divergent testimony about whether Pharrell and Thicke intended to copy Gaye's work or just used it as inspiration. The jury seems to have concluded it was the former. In any event there is no doubt they had heard it before. So all it took was for a jury to find the two works were similar. And the jury did.<br />
<br />
This is hardly copyrighting a genre. If it is then the IP protection on any character is also a copyright on the genre in which those characters arise. But there's a reason the X-Men or Avengers have never had a character like Superman or Batman, although they have lots of superheroes of their own. Inspiration is fine, but bears risks. When he created the Marvel universe, Stan Lee was undoubtedly inspired by the superhero characters who came before his. But his creation was all his own.<br />
<br />
It may be the case that it's harder not to infringe when creating music because songs are shorter, there's only so many ways to combine chords, etc. But that's a long way from saying that infringement will automatically occur just because of similarity. And in any event music has had this problem for years: sampling in electronic and rap music requires clearing the rights to the sampled music even when it's nothing more than a bass line or a few notes. This case may seem huge, but on the law it's nothing new.<br />
<br />
I admit I have a personal feeling of nostalgia here. I got my start in entertainment law by working on a file in which the new management of Cinar Entertainment sued its old directors, the founders of the company. The new management came into place after the Canadian Broadcasting Corporation ran an exposé on Cinar alleging that they had committed tax fraud under the Canadian entertainment tax credit program. Cinar's management sued the CBC for libel. But it turned out that Cinar may have done exactly the things that the CBC accused them of doing. Ever since then I've had a soft spot for those kinds of lawsuits: where you sue someone for saying you did something you actually did. And, at least according to twelve jurors, that's exactly what Pharrell and Thicke did.<br />
<br />
The easiest way to avoid losing a fight is not to pick it in the first place.<br />
<br />
<br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0">SOURCES:</span></span></span></span><br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0"><a href="http://scholar.google.com/scholar_case?q=suntrust+houghton+mifflin&hl=en&as_sdt=6,48&case=13094222792307527660&scilh=0"><i>Suntrust v. Houghton Mifflin</i></a>, 268 F.3d 1257 (2001) </span></span></span></span><br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0"><a href="http://legalminimum.blogspot.com/2014/01/three-not-so-elementary-tips-for-using.html">Legal Minimum post </a>on pre-existing characters and copyrights. </span></span></span></span><br />
<span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1"><span data-ft="{"tn":"K"}" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body"><span class="UFICommentBody" data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0"><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$text0:0:$8:0">"<a href="http://www.hollywoodreporter.com/thr-esq/marvin-gaye-family-lawyer-how-780743">How I Won </a>the Blurred Lines Trial" </span><span data-reactid=".3l.1:3:1:$comment10152824837069685_10152826495069685:0.0.$right.0.$left.0.0.1.$comment-body.0.$end:0:$0:0"></span></span></span></span>Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com6tag:blogger.com,1999:blog-6739637508282196439.post-1533348661504121732015-01-01T09:04:00.002-08:002015-01-01T09:04:39.142-08:00The California Civil War - first glance at the random thoughts leading to my upcoming bookUp early on New Year's Day. Starting the "outline" (by which I mean random thoughts) for my book that I'll write this year.<br />
<br />
The working title, which anyone who took my Entertainment Law class in 2012 or 2013 will recall, is The California Civil War. It's on the desire for entertainment content companies (Southern California) to ensure that the Internet content pipelines (Northern California) behave in the ways that Southern CA has found so mutually profitable in the past, why Northern CA is fighting back (foreshadowing: it's because of their business model), and why the way it's likely to end won't be in the best interests of consumers.<br />
<br />
Put another way: it's a view from the inside of both the content creation and distribution industry on why the future of the entertainment content that you want to see won't likely be the one you want to see.<br />
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An early hint at what's <span style="font-family: inherit;">to come...</span><br />
<span style="font-family: inherit;"></span><a name='more'></a><br />
<ul>
<li><span style="font-family: inherit;">Should Net Neutrality require Google not to sell ads and not to apply PageRank against search results? Should it require that Facebook can't curate your feed? Why not? Because the people who want you to want Net Neutrality want you to believe that Net Neutrality has a very specific meaning. And they want that for very specific reasons that are in their own interest.</span></li>
<li>Would movie studios and TV networks care so much about Net Neutrality if they didn't also own the content being distributed?</li>
<li>Why does first mover advantage work well for content and not just platforms?</li>
</ul>
That feels like enough for now...<br />
<br />
I think I'm in a good position to write this, having worked in the industry for over a decade (wow...). Added bonus: it'll finally be the thing that gets me back updating here pseudo-regularly. I'll also put up the practical tips that don't make it into the book, but this might give some interesting content too.<br />
<br />
But first, I have to clean up 100,000 spam comments...Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com2tag:blogger.com,1999:blog-6739637508282196439.post-22155222573187277012014-06-25T11:24:00.002-07:002014-06-25T11:24:25.808-07:00Quick thoughts on the Aereo judgment, more to comeI'll give a more full post imminently, but my initial thoughts<br />
<br />
<ol>
<li>The majority opinion is policy, not law. It's telling that they never once reference the prior precedent, Cablevision, except to note that it was the prior precedent. That means they're not giving any meaningful guidance, which is what you do when you're trying to reach a targeted result.</li>
<li>Justice Scalia is 100% right: the Court's ruling replaces widely-accepted rules for service-provider liability with an improvised standard of "looks like cable TV".</li>
<li>There is no reason to limit this reasoning to cable TV. Although the Court takes great pains to say it's not ruling on cloud computing or any other technology, I'm not talking about technology. I'm talking about a method of legal reasoning. If "looks like cable TV therefore is regulated like cable TV" is the test for determining the scope and ambit of a law, then why stop with cable TV? "Uber looks like a taxi therefore it should be regulated like a taxi and be forced to get medallions.". "Food trucks look like a restaurant therefore they should be regulated like a restaurant and be forced to provide restrooms."</li>
</ol>
<br />
Like I said, more to come, but especially #3 concerns me.<br />
<br />
SOURCES:<br />
Aereo judgment <a href="http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf">http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf</a>Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com4tag:blogger.com,1999:blog-6739637508282196439.post-56512521685815349422014-06-04T14:41:00.005-07:002014-06-04T14:41:58.555-07:00The final exam question for my Entertainment Law class<div class="MsoBodyTextIndent" style="margin-left: 0in;">
As I've mentioned in this space, I teach Entertainment Law at the University of Washington every Spring. This year's final exam question is below the jump. Over the next few posts I'll put up some aspects of the answer that I think might be of interest to those of you who are interested in that kind of thing...</div>
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<span style="font-size: 12pt;">NOTE: This exam question is based on a true story.<o:p></o:p></span></div>
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<span style="font-size: 12pt;">It’s Wednesday morning and for some reason you have a
feeling of foreboding. You’ve heard from the person who had this office last
year that every year in the end of May, one of the partners in the firm always
comes in with some completely random question that knocks you off whatever you
were doing for a full day and you wonder where on earth these things come from.
Thankfully today doesn’t look like it’s going to be that kind of day.<o:p></o:p></span></div>
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<span style="font-size: 12pt;">You should have known better.<o:p></o:p></span></div>
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<span style="font-size: 12pt;">At 9:01, in walks Don, a partner at your firm. This doesn’t
bode well for your day. He’s the guy your predecessor warned you about.<o:p></o:p></span></div>
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<span style="font-size: 12pt;">“I have a problem,” he says, which is clearly obvious. He
takes you to a conference room where a client is sitting. “This is Mike
Monahan, a client of the firm.”<o:p></o:p></span></div>
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<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">Mike turns a laptop computer to you. On the screen is a web
browser showing a web comic: </span><a href="http://books.google.com/books?id=zVUbAwAAQBAJ&pg=PA4&lpg=PA4&dq=eve+true+stories&source=bl&ots=iueOUeIFg7&sig=fEyMrJnBbfyv2vHErUZOPw9BJ_w&hl=en&sa=X&ei=6QB-U_22MIOmyAT-7oCgDA&ved=0CH0Q6AEwCTgU#v=onepage&q=eve%20true%20stories&f=false"><span style="font-size: 11.0pt;">http://books.google.com/books?id=zVUbAwAAQBAJ&pg=PA4&lpg=PA4&dq=eve+true+stories&source=bl&ots=iueOUeIFg7&sig=fEyMrJnBbfyv2vHErUZOPw9BJ_w&hl=en&sa=X&ei=6QB-U_22MIOmyAT-7oCgDA&ved=0CH0Q6AEwCTgU#v=onepage&q=eve%20true%20stories&f=false</span></a><span style="font-size: 12pt;">. The comic appears to be about the
activities of a space pirate called Tamir Lenk inside an online video game
called Internet Spaceships. <o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">“Tamir Lenk is my character in Internet Spaceships,” Mike
explains. “I’ve spent about 5 years playing that game and I’m pretty well-known
in it. I got a good enough reputation in the game that the company that owns
it, Sugarcubes LLC, actually hired me to work for them. I don’t play the game
for a living, I work in customer service, but it’s still how I got my job. Now
some guy named Alex Turk has written a comic about Tamir Lenk. Tamir is the
star of the comic but I’ve never heard of Alex Turk. I sent him a DMCA notice
and he said he got a license from Sugarcubes so he doesn’t have to take it
down. Thankfully the whole thing is up on Google Books which is good because
that way at least I didn’t have to buy a copy to show you this monstrosity.<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">You look at the website. Sure enough, Google Books has the
whole comic. Mike continues, “What’s worse is that Turk is making up dialog,
pretending my character said it, and the dialog makes me look like a jerk!”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">“You are a jerk,” Don interjects.<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">“Well yeah,” says Mike, “But no one other than my friends
knows that! I never said those things though and he’s not allowed to say that I
did.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">You don’t really know what to say at this point. Don has
been pecking away at his computer over on the side for a bit. He looks up and
says “There’s a Tamir Lenk video on this game video site called NerdWatcher.
What’s up with that?”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">Mike smiles. “Now this part is good news. I’ve worked out a
deal with the people who own NerdWatcher. NerdWatcher said they’d host any
video I give them about Internet Spaceships. I’ve given them one already – an
in-game video showing one of the many adventures of Tamir Lenk. NerdWatcher can’t
promote it actively because they’re concerned that Sugarcubes would sue them
because apparently Sugarcubes thinks videos like this are copyright
infringement. But my boss at Sugarcubes knows I’m giving NerdWatcher these
videos and she’s totally fine with it. And my account rep at NerdWatcher said
it’s a great way for them to get viewers to the site so they think this is
totally cool. They’re even letting me use my new Tamir Lenk logo.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">You see that the logo is the head of the Tamir Lenk
character from the comic book. Realizing what you’re looking at, Mike says
“Yep, I just took the head of the character from the book. I figure it’s mine
anyway, it’s the same face as on my character in the Internet Spaceships game,
so it’s not like I need permission from some comic book artist to use my own
character’s face.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">“Wait a second,” Don says, “Why would anyone want to watch
these videos? Tell my colleague here about what kind of character Tamir Lenk
is.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">Mike leans back in his chair. “Well, Tamir is a foulmouthed
liar and steals in-game money from people who don’t know better. One state
actually passed a law to say that kids weren’t allowed to play Internet
Spaceships because otherwise they would be exposed to people like me who would
swear at them and steal their money. I’m actually kind of proud of that. And Sugarcubes
tried to ban my character at first, but then when they realized what a celebrity
I am in that environment that’s why they hired me like I said.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">Don looks up from his screen. “The EULA for the game says
that Sugarcubes owns all rights to everything you do in the game and all
derivative works and that you don’t own anything about Tamir Lenk.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">Mike gets a pretty angry expression on his face. He starts
stabbing the table with a pen. “That thing can say whatever it wants! They’re
wrong because I’m the one who created the character. I wrote all the words my
character Tamir says in the game. So it’s my copyright, Sugarcubes doesn’t own
anything, and my being their employee doesn’t change that; I created the
character before I started working at Sugarcubes and I work in the customer
support department so being Tamir Lenk isn’t part of my job. But Sugarcubes says
that since they own the game they can authorize Turk to make the comic and put
Tamir Lenk into it and they even said Turk can take Tamir Lenk and change what
he said in the game to put new dialog in the comic book. I got in a big fight
with the Legal department over this and that’s why I’m here.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">You’re a bit confused. Clearly, so is Don. “Wait a minute,”
Don says, “Go back to the part about him changing the dialog.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">“Fine,” Mike says, “They made Tamir Lenk seem like a
completely different kind of character than I really am. They made me boring,
not funny. That can’t be right though because I created Tamir Lenk so I own the
IP and I get to be the one who decides what he says and how he’s presented to
the world. I want him to be this mean character who is also funny, not some narcissistic
loser, although for some reason in the comic they keep spelling it narcist.
Maybe they spelled it that way to put it on the t-shirts.”<o:p></o:p></span></div>
<div align="center" class="MsoBodyTextIndent" style="margin-left: 0in; text-align: center;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">“What do you mean, the t-shirts?” Don asks.<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">“It gets worse,” Mike says, because you knew he would. “Turk
isn’t just selling comics. He’s also got a line of t-shirts and other
merchandise based on this character called Tamir Lenk the Narcist. I mean, if
he’s going to create this whole mythology around Tamir Lenk, I should be the
one who gets to make the t-shirts and make the money! I had made a bunch of
shirts about my character – check out one of them at <a href="http://i.imgur.com/gfNXhhf.jpg">http://i.imgur.com/gfNXhhf.jpg</a> – but now
no one will buy them because they’re all buying his. On his website he says
that Sugarcubes gave him the exclusive license to make t-shirts, which
shouldn’t matter.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">Mike looks over at you. “I can see your colleague is
curious about why I think anyone would buy t-shirts about Tamir Lenk. Well,
this is part of my viral marketing campaign for the movie rights for a Tamir
Lenk movie. I’ve been talking with NerdWatcher and they’re willing to pay me 5%
of the net profits from any movie they make about Tamir. They said they’d pay
me an extra 5% if I wrote the screenplay which is awesome because since I’m
Tamir they have to accept whatever I write. Best part: I’m just going to adapt
Turk’s comic into a screenplay. I signed an option agreement with NerdWatcher
where they gave me $100,000 already, so even if I never finish the screenplay
this thing is already making me rich.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">Mike jumps up from his chair, as somehow you knew he would.
“I’ve got a meeting tomorrow with NerdWatcher at 9:00 am sharp. We’re signing
the deal then. So if there’s anything I need to know, you had better tell me
before that!” He walks out the door not waiting for you to respond.<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">After Mike leaves, Don drops the bomb. “Unfortunately I’m
leaving for Japan this afternoon for another client, so I need you to handle
this. Please write me a memo about this situation so that I can give it to Mike
and let him know if there’s anything he needs to know.”<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">You’ve been wondering for a while where Don finds these
people. But clearly you have no time to wonder that any longer. Because for
reasons unbeknownst to you, you have to unravel this situation, and the clock
is ticking…<o:p></o:p></span></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<br /></div>
<br />
<div class="MsoBodyTextIndent" style="margin-left: 0in;">
<span style="font-size: 12pt;">Question 1: Address a memo to Don containing an analysis of
all legal issues in the above text.<o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com6tag:blogger.com,1999:blog-6739637508282196439.post-74621024531729124962014-03-04T20:27:00.001-08:002014-03-04T20:27:22.355-08:00From 12 Years a Slave to collective agreements: one possible explanation for the script controversyOn the weekend, 12 Years a Slave won the Academy Award for Best Adapted Screenplay as well as Best Picture. There has been some controversy around the authorship of the screenplay. Apparently Steve McQueen believed at one point that he should have received a writer credit, John Ridley disagreed, and so Ridley ended up with the credit and therefore the award.<br />
<br />
These kinds of things usually don't happen. The Writers' Guild of America has literally over 50 pages in its Collective Bargaining Agreement setting out the criteria for assigning credit and, if there's a dispute between writers, the arbitration method for settling it. So why didn't that happen here?<br />
<br />
Believe it or not, the answer may be found in labor law.<br />
<br />
<a name='more'></a><br />
<br />
In order to work on a theatrically-released film in the USA, writers are usually required to be members of the Writers' Guild of America. But the WGA is, at the end of the day, a union. And under the First Amendment no person can be forced to be a member of a union.<br />
<br />
Writers, just like any other person working for a unionized company, have the right to work onsite and not join the union, so long as they pay certain mandatory contributions. For example since the WGA collective agreement gives the right to health insurance and pensions as well as certain other benefits (known colloquially as "health, pension, and benefits" payments or HPB), if a unionized company wants to hire someone who isn't a member of a union then the person is still required to pay HPB payments. (Usually these are grossed up into the worker's salary.) In the entertainment industry we say that person is paying the "financial core" payments and their status is usually abbreviated as "fi-core".<br />
<br />
The thing is, a fi-core person is only entitled to certain defined benefits, and script arbitration isn't one of them. That matters: under administrative law if a person is a member of a union and they have a grievance they have to use the union grievance rules to pursue it. So those WGA script arbitration provisions are mandatory for WGA members, and one element of them is that the arbitration decision is final.<br />
<br />
But a fi-core individual isn't required to follow the union's rules. That means they can sue. And that means depositions, airing dirty laundry, court judgments, and all sorts of public disclosures and documents that movie studios usually hate.<br />
<br />
I don't know if what I've just described was the case for 12 Years a Slave, but it may be relevant that John Ridley is fi-core. During the last strike he wrote a piece for the LA Times about his decision. This matters too. If Steve McQueen believed that his work deserved a writing credit alongside Ridley's, he may not have had the chance to go to arbitration to get it; he only could do that if Ridley's contract contained a provision creating such a right. That means if he had tried to claim credit he would have had to prove it.<br />
<br />
You might think that he could have just put his name on it - after all, as the producer he controlled the product. But that's not true either: the final cut in a movie always, ALWAYS goes to the studio (unless you're Steven Spielberg or someone with that kind of juice). And if he had put his name on the project as a writer without having proof he, the movie, and the studio would all have been exposed to a lawsuit for copyright infringement: claiming someone else's property as your own is A Bad Thing(TM) and studios tend not to let projects with that kind of uncertainty go to theaters. If that's the case, easier just to let the credit go and agree with the studio you'll never talk about it again. You can look angry at the Oscars later.<br />
<br />
And that's a problem most writers, credited or not, would kill to have.<br />
<br />
<br />
<br />
SOURCES:<br />
John Ridley's explanation of why he went fi-core:<br />
http://www.latimes.com/news/opinion/la-oew-ridley8jan08,0,170282.story#axzz2v3HH7OxPAnonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com1tag:blogger.com,1999:blog-6739637508282196439.post-89856265212501253232014-02-24T12:03:00.000-08:002014-02-24T12:03:08.643-08:00Netflix and Comcast enter agreement to speed up streaming: 5 consequences for you and meI hope you like Netflix. I know I do. Good thing. Because this week the world changed in a way to make Netflix even more likely to be your only real option in streaming media.<br />
<br />
<a name='more'></a><br />
Over the weekend of February 22-23 GigaOm broke the story that Netflix and Comcast had entered into some form of peering agreement. In order to understand why this is important and what its consequences will be both for the Internet and entertainment companies as well as for you and me, it's first necessary to understand what a peering agreement is in the first place. GigaOm actually summarizes it pretty well:<br />
<blockquote class="tr_bq">
Much like your decision to go to one Starbucks over the other (shorter lines, a barista who is more generous with the whipped cream, the distance), multiple factors come into play when the Netflix client determines the server and route it wants to use. So you might end up traveling over a pathway where the parties directly interconnect (Netflix-Comcast), or where there are more than the two parties but the third-party has a peering relationship with the ISP (Netflix-Level 3-Comcast) or where they don’t (Netflix-Cogent-Verizon).</blockquote>
Here's what that means in English (and if you're technical: yes I'm oversimplifying but I don't think I'm introducing inaccuracy):<br />
<ul>
<li>As you may know, the Internet works by way of packets of data being sent from a source to a destination and then being reassembled on the other side. If packet #2 gets to its destination before packet #1, reassembly has to wait until packet #1 shows up. This wait is one aspect of what we experience as lag.</li>
<li>There are lots of different paths that a block of data can take to get from Point A to Point Z: it can go A-Z, or A-B-Z, or A-B-C-D-E-F-Z, etc.</li>
<li>The more stops (or "hops") each packet takes, the longer it takes to get there.</li>
<li>But if the packet goes through a stop where data from Point A is given special fast-track treatment, it spends a lot less time there. Think about getting on a plane: business-class and economy-class passengers both have to go through security, but business-class ones don't wait in a long line, so they can get through faster. Same kind of thing.</li>
</ul>
<div>
So under a peering agreement Netflix and Comcast would have agreed that Comcast will fast-track Netflix's data. As of this weekend when I was writing it wasn't confirmed whether this was a "settlement-free" agreement (where the fast-tracking goes each way) or where Netflix pays Comcast. The Wall Street Journal was reporting that Netflix was paying which makes sense - Comcast has no need to send traffic down Netflix's network.</div>
<div>
<br /></div>
<div>
After all the worries that were raised from the recent Net Neutrality decision that ISPs would use this to "block Netflix", it may seem that deals like this show that those crying the sky is falling were wrong: this deal proves it. But the way I see it, this deal shows why the whole system is broken, and if you're a creator or even a consumer of content you shouldn't feel reassured at all by these developments.</div>
<div>
<br /></div>
<div>
Here's why.</div>
<div>
<br /></div>
<div>
<u style="font-weight: bold;">1. Netflix is now unlikely to challenge the status quo.</u> After the recent Net Neutrality decisions, it is clear that the FCC currently doesn't have the regulatory authority to mandate that ISPs treat all comers equally. But the FCC wasn't the only potentially-interested party. If Company X felt that the ISPs were using their control over the Internet pipe to your house to force you to choose the ISP's offering over Company X's identical offering, that might give Company X grounds to sue under the antitrust laws. After the judgment came down in January, a lot of people hoped Company X might be Netflix. Of all the services that need access to consumers to shove them lots of data, a streaming video provider is right up there. Unlike Hulu, Netflix isn't owned by broadcasters so wouldn't be damaging its other business interests by challenging the status quo. And it has the resources to do it.</div>
<div>
<br /></div>
<div>
Well, no danger of that any longer.</div>
<div>
<br /></div>
<div>
And this matters. You and I don't have standing to challenge this on an industry-wide basis. The best we could do is to find a way to bring a class action against an individual ISP, and even then I don't know if it would work: the contracts we sign usually prohibit class actions, force arbitration, and have all sorts of other procedural scale-tilting mechanisms in favor of the ISPs, and substantively they often allow content throttling and other actions that would make this a really hard case to bring. But an aggrieved competitor would have access to the antitrust laws, with their triple-damages provisions.</div>
<div>
<br /></div>
<div>
<u style="font-weight: bold;">2. Unlike TV, ISPs have no obligation to enter into these agreements.</u> So Netflix has signed a contract with Comcast. Why can't other companies do that too? The short answer is: Netflix was big enough to make it worth Comcast's while to negotiate an agreement. A smaller provider might not have the ability to get Netflix's attention, which risks resulting in fewer providers of content.</div>
<div>
<br /></div>
<div>
In the TV world this has been addressed by legislation. For example, under the Telecommunications Act certain local content providers can designate themselves as "must-carry" channels. If a company wants to provide cable TV services in the area where those "must-carry" channels operate the provider must carry those channels as part of its service offering, which means it also has to pay the channel a license fee.</div>
<div>
<br /></div>
<div>
Put aside the specifics of local TV and look at the bigger picture. Every business has to start small. In the TV environment that usually means as a local channel. In the Internet context that means without a lot of funding. To get from small to big, content providers need to have two things: an offering that differentiates themselves from their competitors, and access to the consumers who will choose them over their competitors. Even where a content creator is able to have the first, if the ISPs won't give them the same kind of treatment as Netflix then they'll never get the second. And then you'll never find out about them, and even if you do you'll find the experience so choppy you'll likely stop using them, and then they're gone.</div>
<div>
<br /></div>
<div>
One "side" point that's actually really important. It might seem that my concern here is hypothetical: why wouldn't a company take money from everyone who wants to negotiate a peering deal? The short answer is time and resources. For every company there are deals that are "too small to be worth it". If a deal will only make a company like Comcast $5,000 or even $50,000, there is just no one staffed with the responsibility to make it happen.</div>
<div>
<br /></div>
<div>
Remember that point. It'll come up again.</div>
<div>
<br /></div>
<div>
<u style="font-weight: bold;">3. The "walled garden" this deal creates will benefit Netflix over competitors.</u> This is one real problem with regulated industries: once there is a regulation there is a cost to comply. Paying that cost, costs money. And money is something that startups often don't have. But their competitors do. Netflix could afford to pay whatever Comcast required, and can afford to pay the other ISPs too. Will their competitors?</div>
<div>
<br /></div>
<div>
Market stabilization is always to the benefit of established providers.</div>
<div>
<br /></div>
<div>
<u style="font-weight: bold;">4. Netflix is not an outlet for average creators.</u> Look at what's available on Netflix: previously-released content, Netflix originals like Orange is the New Black and House of Cards, and continuations of previous content like Arrested Development. Do you think that's the place for small creators to sell their original content? Go back to what I said in #2 above: just like Comcast won't have people to do small deals with small content creators, neither will Netflix. If you don't have a portfolio it can be really difficult to get their attention.</div>
<div>
<br /></div>
<div>
This matters too: it concentrates power into the hands of aggregators who can build a portfolio sufficiently large to be able to deal with Netflix. Again, score one for the big guys.</div>
<div>
<br /></div>
<div>
<u style="font-weight: bold;">5. This deal benefits Comcast and larger ISPs too.</u> Do you think Netflix is going to do these deals with every ISP? Or just the ones that it thinks it needs to deal with in order to provide service to the large majority of its customers? Smaller ISPs, the ones that the courts have speculated would come into existence if large ISPs start throttling services because no Net Neutrality rule would mean they can, won't be able to get on Netflix's radar - my #2 again. And so if you want good Netflix you'll have to go to a bigger ISP that can attract Netflix's dollars.</div>
<div>
<br /></div>
<div>
Sometimes I feel like a broken record on this stuff, the way I always see disruption in the entertainment industry eventually being swallowed up by larger and more established interests. I just wish that sometimes I was also wrong.</div>
<div>
<br /></div>
<br />
SOURCES:<br />
GigaOm article announcing the agreement:<br />
http://gigaom.com/2014/02/23/confirmed-comcast-and-netflix-have-signed-a-peering-agreement/<br />
More information on what exactly is "peering":<br />
https://en.wikipedia.org/wiki/Peering<br />
Verizon v. FCC Net Neutrality judgment:<br />
http://scholar.google.com/scholar_case?q=comcast+net+neutrality&hl=en&as_sdt=6,48&as_ylo=2013&case=15822588394573529055&scilh=0<br />
47 USC 534 (must-carry provision)<br />
http://www.law.cornell.edu/uscode/text/47/534Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com0tag:blogger.com,1999:blog-6739637508282196439.post-21686765660958188692014-02-11T06:47:00.001-08:002014-02-11T06:47:04.616-08:00Jimi Hendrix merchandise sales shows two risks all creators face when basing characters on real peopleYes, I'll admit it, that title is a horrible and tortured pun. You should never have to experience anything like it again. (Okay, I'll stop.) But one seller of Jimi Hendrix merchandise had an experience in Washington State that teaches two valuable lessons to creators of content using the name, image, or likeness of real people.<br />
<br />
(Okay, I promise, I'll really stop now.)<br />
<br />
Experience Hendrix is one of two companies formed by the estate of Jimi Hendrix to exploit the rights to his name, image, and likeness through a series of trademarks the company has registered on certain images of Hendrix, his name, and his signature. They use these marks for basically every Jimi Hendrix product you've ever seen: their business is prolific and quite profitable. But of course as with all famous brands Experience Hendrix isn't the only entity trying to profit from Jimi Hendrix. Andrew Pitsicalis owns or has licenses to several works of art either created by Hendrix or showing him in them, and through various websites (including HendrixLicensing.com) he would sell copies of these works of art, onto which he had placed Hendrix's name, signature, and/or headshot.<br />
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Experience Hendrix sued Pitiscalis for state and federal trademark infringement, and Pitsicalis countersued seeking a declaration that Washington's right of publicity statute (which gives Experience Hendrix the right to be the only one to benefit from Hendrix's right of publicity even after death) was unconstitutional. At trial the judge held that the Washington right of publicity statute was unconstitutional. Each side appealed to the Ninth Circuit Court of Appeals.<br />
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I'm not going to look at the portions of the judgment dealing with trademark infringement. They don't really say much other than if you take a trademark belonging to someone else and use it to sell items of your own, you're probably bad at business. But the right of publicity statute is more interesting. I'll spend some time with that, then discuss two lessons this case should teach content creators.<br />
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The Court specifically dodged the big question of whether Washington's statute is unconstitutional. Since Jimi Hendrix was domiciled in New York when he died, ordinarily it would be New York law to govern his post-mortem rights of publicity, and New York doesn't recognize such a right. So Pitsicalis had argued the statute was unconstitutional because it looked at the estate from the perspective of Washington and not New York law. But the Court limited itself to asking whether Pitsicalis was selling merchandise inside Washington state and, holding that he was, the Court found that Washington law should apply to those sales. And since that Washington right of publicity statute would have prohibited those sales, the Court held that Pitsicalis had no right to make them and he owed damages to Experience Hendrix.<br />
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I'm not sure I agree with that result, but it's not implausible. The general rule is that if you book sales through a website, you've accepted that the place where the purchaser lives has jurisdiction over you - Terms of Use might bind the purchaser but not any third party who might suffer damages from it. Think of it this way: if you're dating someone with a roommate, your partner might be okay with you drinking the last of the coffee, but if it's the roommate's coffee that permission is worthless and you owe them some coffee. Same kind of idea here: the purchaser on the website might have agreed the transaction would be governed by laws other than Washington's but that doesn't mean Experience Hendrix agreed that too. They get to benefit from Washington's laws.<br />
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Okay. You might be justified in thinking that a conflict of laws issue around t-shirt and poster sales is a long way from interesting. But if you're a creator of content and not just t-shirts, there are two principles you need to take away from this case.<br />
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<b><u>1. Legal at home doesn't mean legal everywhere.</u></b> Even if your use of a famous person's name, image, or likeness is legal in one state, it might be illegal in another. Remember: Hendrix himself wasn't subject to Washington law, but sales of merchandise bearing his image were, and when Pitsicalis sold other merchandise in Washington that competed with the official product he broke Washington's law.<br />
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Take this principle and remember it in your own work. For example an older work might be in the public domain in the USA because of a weird quirk in copyright registrations. But in the rest of the world, where registration has never been required to create copyright, it may still be protected. As you consider where to distribute your content, be alive to these kinds of issues. Better to leave money on the table than to spend it on lawyers (I know, it's like biting the hand that feeds me, but it's true).<br />
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<b><u>2. Libel in fiction may be back.</u></b> There's a legal doctrine called libel in fiction that is impacted by this case. I've previously written about that doctrine (see below for the link), which deals with situations where you take a person and convert them into a fictional character but you do so in a way that's defamatory. When I wrote about this last time I said that based on recent judgments the doctrine is gutted to the point of being useless. Today I'm not so sure.<br />
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Washington's personality rights statute grants a pre- and post-death property interest in the use of your name, image, and likeness. The key word in that sentence is "property". If we're supposed to take this statute at face value then that strongly suggests damage to the value of a person's name and reputation is damage to their property. The name of this title of the Revised Code of Washington supports this interpretation: "Personal Property".<br />
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Here's why that matters. Truth might be a defense to libel. But libel is a tort, not damage to property. So defenses to a libel claim aren't relevant to a claim of damage to personal property. And that means if you use someone's name, image, likeness, etc. in your own creative work and they believe that you have damaged them as a result, even if what you said is true it won't help. Even if they're dead their heirs can come after you. And even if none of you lives in Washington they may still be able to sue you there if your creation was purchased by an in-state purchaser. This is a stretch, but I'll admit: I wouldn't have thought Experience Hendrix would win this suit either.<br />
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You learn something new every day... and not always from experience.<br />
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(Okay, I couldn't resist.)<br />
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NOTES:<br />
Judgment in Experience Hendrix v. HendrixLicensing.com:<br />
http://cdn.ca9.uscourts.gov/datastore/opinions/2014/01/29/11-35858.pdf<br />
Legal Minimum post on libel in fiction:<br />
http://legalminimum.blogspot.com/2012/10/a-3-step-guide-to-basing-fictional.html<br />
Washington state personality rights statute (note: the statute is 63.60.010-080, this is the most relevant provision for this discussion):<br />
http://apps.leg.wa.gov/rcw/default.aspx?cite=63.60.030<br />
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Full disclosure: I know Experience Hendrix's lawyer, but he didn't put me up to this article and I didn't even tell him I was writing it.Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com4tag:blogger.com,1999:blog-6739637508282196439.post-4648647380383742642014-01-13T10:57:00.000-08:002014-01-13T10:57:11.007-08:00Three points to help you avoid infringing when using popular source materialEvery year, new versions of classic tales reappear in popular culture. Sherlock Holmes showed up in both movies and television. 2013's breakout surprise hit TV show was based on Washington Irving's "The Legend of Sleepy Hollow". And since the stories and characters upon which these hits are based are often themselves in the public domain, you might be tempted to create your own retellings of these tales too.<br />
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You can, but you need to be careful.<br />
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In a prior post on the character of Sherlock Holmes I made two important points about using pre-existing characters:<br />
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<li>Where there are portions of a character in the public domain and portions that aren't, it's permitted to fork the characters to use only the public domain elements.</li>
<li>Forking characters in this way doesn't infringe on the rights of a copyright holder who might own non-public-domain elements to those characters.</li>
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But what may not be clear is how you can take a public-domain character and make them your own creation such that no one else can use your version of them, and in contrast when you're making too close use of someone else's version of the characters. A recent judgment from Canada gives us 3 good rules to help you make that decision.</div>
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<a name='more'></a>[A quick word on Canada. It's cold. Okay that's two words. Also, since it's a different country from the USA, this might lead some people to think its judgments are of no use here. Not true. Although American lawyers would be ill-advised to cite a Canadian judgment in court, the fundamental principles of copyright law are remarkably similar in all common-law jurisdictions. In particular Canadian law tracks very closely to that of the UK. And so although the terminology might be a bit unusual if you read the judgment, the rules it enumerates are helpful everywhere.]<br />
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As the judgment says, Claude Robinson was a dreamer who created an educational TV program idea based on Robinson Crusoe, "The Adventures of Robinson Curiosity". He shopped it to various companies including Cinar Corporation. Cinar was a well-known creator of children's television shows, benefiting from Quebec's pioneering tax credit system, and since tax credits were easier to obtain for shows created at home finding a Quebec-created show would be a great head start. But they were never able to find funding for the project and so Robinson Curiosity never got out of the water.</div>
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Or so Robinson had thought.</div>
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But then one day he saw the pilot episode of a show called "Robinson Sucroë" with a character based on Robinson Crusoe wearing glasses and a straw hat, living on an island, and interacting with a group of sidekicks. Just like his character. And even though there were differences between the two shows ("Curiosity" had a group of animals as sidekicks while "Sucroë" had people, and "Sucroë" had a band of pirates as villains which doesn't exist in "Curiosity), when Robinson looked into the people behind "Sucroë" he found it was Cinar.<br />
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Concluding that Cinar had infringed his idea, Robinson sued. Almost 20 years later the Supreme Court of Canada rendered its judgment ultimately upholding that Robinson was right and that he was entitled to damages as a result. And in the process, the Court gave 3 principles that we can use to help us create characters that we can call and protect as our own.<br />
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<b>First: Consider the work as a whole, not just a list of its elements.</b> A copyright owner has the exclusive right to reproduce all or substantially all of their work. For a straight copy it's easy to know when unlawful copying has occurred, but not so much for reuse and repurposing. Copyright law doesn't protect ideas, just their expression, so it's always an open question whether copying has occurred when the copier reimagines the original work rather than quoting it directly.<br />
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The answer to this is always a judgment call but this case makes the point in pretty easily-understood terms: look for the thing that constitutes the creative effort made by the author and protect that, not just a laundry list of characteristics. And so if you want to use a character similar to one in someone else's work you have to look at the entirety of the other character and consider whether, by using a character with some similarities, you've taken the essence of that character and copied them. This is directly contrary to the test used to determine copyright infringement in computer software, called abstraction-filtration-comparison. Under that test you would look at the list of features of the program that's accused of being a copy, compare it to the features in the other program, and determine whether so many significant features were copied that the one is a copy of the other. Under the test from the Cinar judgment, that wouldn't work.<br />
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That makes sense. It doesn't matter that Hamlet is Danish. It doesn't even really matter that he was a prince. It matters a lot that his uncle married his mother after killing his father and he's paralyzed by inability to act. If you want to retell the story of Hamlet, you can move the story from Denmark without much trouble. Take away his uncle and there's not much Hamlet left.<br />
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But if you've read my recent post on Sherlock Holmes (and if you haven't, there's a handy link below) you'll know that making a list of characteristics is exactly what that court does and what's necessary to know whether a version of Sherlock or any other public domain character infringes the copyrighted portions of the character or draws only on those elements in the public domain. And Robinson Crusoe is also in the public domain. So that leads to the next point.<br />
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<b>Second: Consider what is really the protected work against which yours is compared.</b> In the Cinar case, the judge held that although the idea of a person stuck on an island interacting with the environment is nothing new, and that the particular story of Robinson Crusoe was in the public domain, "Sucroë" still infringed upon "Curiosity" because of the specific similarities between the way the stories were told in each. Cinar could have avoided infringement by returning to the original Robinson Crusoe story and retelling it in a new way with new characters having new personalities.<br />
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At first glance this may look like it turns my first rule on its head. "Curiosity" was found to be infringing because its cast of characters had the same personality traits as those in "Sucroë". But those personality traits were Robinson's glosses on the original story of Robinson Crusoe, and in the context of retelling a public domain story that's the protected element.<br />
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Again the court was able to find infringement and was right to do so, and this gives some visibility into a way to know when your iteration of a public domain character is different from someone else's. When you adapt a public domain work, by definition the essence of the original creation is someone else's. So the only way to determine whether infringement has occurred is to remove that original creation. This results in something I often refer to as a "doughnut analysis" (if you're feeling healthy or are from New York feel free to substitute a bagel), where you have to cut a hole in the center of what you're looking at and consider only the ring around the edge. In this case Robinson Crusoe was the hole, and the particular characters and elements used to tell that story in "Curiosity" is the doughnut. And when compared to "Curiosity", the "Sucroë" doughnut left an empty taste in the court's mouth.<br />
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Okay, that was a horrible pun. But it contains a morsel of truth: a doughnut analysis is more likely to lead to a finding of infringement than comparing two creative works on their merits. Because the underlying subject material always has to be excised from the analysis a doughnut analysis just leaves less to compare, and so if the two retellings of the same subject seem too similar to each other (as opposed to both being compared to the original) it almost has to be because of the new elements.<br />
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<b>Third: Consider staying closer to the original source.</b> The test for infringement is whether a reasonable person would think the two works are similar. So ask yourself: would an outside observer think that both you and the other creator are both using the same source material, or would they think that you're telling the same story? If the latter, think about changes.<br />
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Two people using the same source material aren't automatically infringing each other. In Hollywood different movies often rework the same source material, sometimes even being released in the same year (<i>e.g.</i> "Dangerous Liaisons" vs. "Valmont"). But when each retelling of the source stays close to the original, it's more likely they will be found to have inspired themselves from the original and not from each other.<br />
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How can you put this into practice? One way is to ask the old writer's question "what happened next?" For example, when Sherlock Holmes woke up this morning, what happened next? If your answer to that sounds like Robert Downey Jr. telling wisecracks, or has him in the modern era updating his blog like Benedict Cumberbatch, you might like to go back to Sir Arthur Conan Doyle's stories (the public domain ones, naturally) and start again.</div>
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[Note: this is perhaps uninteresting to the rest of you, but the Cinar case holds some personal significance to me. I worked on a small part of it when I was a litigator in Montreal (unrelated to any of the elements of this post). I helped hire one of the lawyers on the case, Marc-André Grou, when I was at my last law firm; it was his first job out of law school. Another of the lawyers, Cara Cameron, was a couple of years behind me at McGill law school. And doing work on a different lawsuit involving Cinar Corporation was my introduction to entertainment law. Small world, sometimes...]</div>
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LINKS</div>
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<i>Cinar Corporation v. Robinson</i></div>
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<a href="http://scc-csc.lexum.com/decisia-scc-csc/scc-csc/scc-csc/en/item/13390/index.do">http://scc-csc.lexum.com/decisia-scc-csc/scc-csc/scc-csc/en/item/13390/index.do</a></div>
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Legal Minimum post on Sherlock Holmes</div>
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<a href="http://legalminimum.blogspot.com/2014/01/three-not-so-elementary-tips-for-using.html">http://legalminimum.blogspot.com/2014/01/three-not-so-elementary-tips-for-using.html</a></div>
Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com3tag:blogger.com,1999:blog-6739637508282196439.post-74091172251641143572014-01-06T14:35:00.000-08:002014-01-06T15:26:14.129-08:00The Apple e-books litigation post #1: why did it happen at all?Although the Apple e-books judgment is a few months old, its consequences haven't yet begun to be fully understood. Tthis judgment starts to rebalance the playing field away from bottlenecks and distributors and toward individual content creators in several fundamental ways.<br />
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To understand the significance of the judgment, it's necessary to know what it does (and doesn't) say. And it's 160 pages, so bear with me because I'll have to break this into several parts...</div>
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One of the court's most significant findings is that both Apple and the publishers wanted there to be no price competition for e-books at the retail level. In English, that means (for example) that an e-book copy of Hunger Games sold through Apple's iTunes store would cost exactly the same as a copy sold through Amazon. But more importantly, it would mean that even if Amazon wanted to cut prices, it couldn't.</div>
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Why would Apple have wanted this? Because Apple was trying to start up its iBooks service. All things being equal, if a book is $12.99 at both Amazon and iTunes, customer inertia would lead people to buy books through Apple: the same familiar interface that they've been using to buy music, the same gift cards can be used for both sides, etc. But that only works if Amazon isn't able to be a cheaper alternative, and so Apple needed prices to be stable.</div>
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As for the publishers their motivation is more clear: if Amazon trained consumers to prefer e-books because of price then consumers would make all their purchases through Amazon for their Kindle, as opposed to paper books which can be sold through multiple channels. Amazon would get power over the publishers and could negotiate them down on price.</div>
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A word or two about book pricing might help set context. From a business perspective, it's very labor-intensive for publishers with millions of books in their catalogs to do individual negotiations on each title. Instead they would set the suggested retail price of the book and then offer the book to bookstores at a set percentage of that price. For example, if a book has a suggested retail price of $20 and the bookstore orders at a 50% discount, then the bookstore pays $10 per copy.</div>
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But under antitrust law the publisher isn't allowed to force the bookstore to charge a particular price to consumers; that's why the phrase is "suggested" retail price. So that's why the publishers couldn't force Amazon to keep prices at a certain level. Amazon felt that it would benefit consumers to have access to e-books at low prices and had decided to train consumers to expect e-books to cost $9.99. And, so long as Amazon was the only game in town for e-books, there was nothing the publishers could do about it.</div>
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Okay, you might think, fair enough, but couldn't publishers fight back by just not offering their books as e-books at all? That's actually not as easy as it might sound, for both legal and business reasons.</div>
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<li>For business reasons a publisher couldn't pass on the e-book rights and just take the print versions. Otherwise authors would go find someone willing to pay them for the e-book rights and print publishers would find their products competing with e-books in ways they couldn't control, and many consumers would learn even faster that e-books are less expensive and equal substitutes for print. So they needed to license these rights.</li>
<li>For legal reasons a publisher couldn't license the e-book rights and park on them. If you own a copyright and don't keep it in the market it eventually loses its value. The law recognizes this by saying that if you license rights and don't use them then the owner can force you to give these rights back. So once the publisher has licensed those rights from the author, they have to look for deals. And if Amazon cornered that market, publishers would need to go to Amazon.</li>
<li>For legal reasons a publisher couldn't just say (for example) "If you want Harry Potter as an e-book, you have to take every e-book we offer and pay $15 per unit." Because of a part of the judgment in a 1948 case called <i>US v. Paramount</i> (better-known for being the case that broke up the studio system in Hollywood), copyright owners can't use their rights over one copyrighted work to try to leverage potential distributors of that content to purchase other content. They could try charging $15 for the Harry Potter e-book, but pricing on the other books would have to be independently set.</li>
<li>There's also the business reality that Amazon has significant market power of its own in the print publishing world. If Amazon had insisted that it wouldn't distribute print books unless it got e-book distribution as well, publishers would have had to decide whether to forego that distribution channel for their printed products. And unlike the publishers whose hands are tied by the <i>Paramount</i> case, Amazon as a customer is free to say it won't take print without e-book rights; antitrust law exists to protect customer freedom of choice. According to Publishers Weekly, Amazon had a 29% market share for print books in the first quarter of 2012. That's a lot of money to turn down, but not enough to make Amazon a dominant player in the print business (oversimplifying a bit, if you have 35% share or more you're dominant for antitrust purposes). This is an important distinction: if Amazon was dominant it would be a lot more difficult for Amazon to put conditions on its purchases of print books.</li>
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And let's not forget that e-books were a new market for publishers in a very mature business. The publishing industry has always understood that there are people who won't pay for hardcover books, and after a time window has elapsed the publishers have made trade or mass-market paperback versions available for those customers. E-books represent a way for publishers to sell to those customers, as well as other types of customers who just might not have bought books if there weren't e-versions (<i>e.g.</i> people living in cramped spaces who don't have room for lots of paper, people on airplanes who don't want to take up space in their carry-on luggage, impulse purchasers, etc.).</div>
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Put all of this together and you can see why the publishers would have wanted Apple to come along and be a competitor to Amazon in the e-book market: to create an environment where they would be able to shop their e-book products to several retailers and choose the one that would pay them the most, rather than the one that would charge the least.</div>
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But more importantly, publishers also just wanted e-books to cost more for consumers. They just felt $9.99 wasn't a good price point for consumers to learn that books should cost. They had seen what had happened to the record labels when consumers learned that a digital download of an album should be $9.99 and $0.99 for a single (ironically enough a price point created by Apple) and they didn't want this to happen to books and publishers also. And so they wanted to raise prices. But they felt that if any one publisher acted independently, Amazon wouldn't move its pricing. But if they worked together to force a price hike...</div>
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As I mentioned above, antitrust law exists to protect consumers from things like this. And that's why the Department of Justice decided to investigate. In my next post, I'll discuss what they found and why it will have far-reaching consequences for the way distribution companies think about content.</div>
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LINKS</div>
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<i>US v. Apple</i></div>
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<a href="http://scholar.google.com/scholar_case?q=United+States+Apple+Penguin&hl=en&as_sdt=3,48&as_ylo=2013&case=11752504600784344895&scilh=0">http://scholar.google.com/scholar_case?q=United+States+Apple+Penguin&hl=en&as_sdt=3,48&as_ylo=2013&case=11752504600784344895&scilh=0</a></div>
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<i>US v. Paramount</i></div>
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<a href="http://scholar.google.com/scholar_case?q=paramount+runs+clearances&hl=en&as_sdt=6,48&case=1569249983672754422&scilh=0">http://scholar.google.com/scholar_case?q=paramount+runs+clearances&hl=en&as_sdt=6,48&case=1569249983672754422&scilh=0</a></div>
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"Amazon picks up market share", <i>Publishers Weekly</i></div>
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<a href="http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/53336-amazon-picks-up-market-share.html">http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/53336-amazon-picks-up-market-share.html</a></div>
Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com1tag:blogger.com,1999:blog-6739637508282196439.post-76303503590524981182014-01-02T08:19:00.000-08:002014-01-02T08:19:18.419-08:00Three not-so-elementary tips for using pre-existing characters, my dear author...Being the start of a new year, January 1 (yesterday) saw a whole new set of works come into the public domain. And as that happens, some authors may want to use their characters for their own purposes. But if those characters are used in multiple works and not all of them are available, you might think you can't. Certainly the rightsholders for the later works will want you to think so. Are they right? A recent judgment on Sherlock Holmes gives some insight into this far-from-elementary question.<br />
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The characters of Sherlock Holmes and his assistant Dr. Watson are administered by Conan Doyle Estate, LLC (which I'll call "CDE"). However of the 4 novels and 56 short stories featuring Sherlock Holmes, all 4 novels and 46 of the 56 stories were published in the USA prior to January 1, 1923, which puts them into the public domain. Not surprisingly this drastically reduces their revenue potential, and so CDE's major source of income is licensing the rights to two things: the characters of Sherlock Holmes and Dr. Watson, and the copyright in the 10 short stories that are not yet in the public domain. As rights-managing organizations often do, CDE monitors uses of what it considers its intellectual property quite vigorously.<br />
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Klinger, the plaintiff in the lawsuit, is one of two co-editors of an anthology of newly-created Sherlock Holmes short stories. When she tried to publish the anthology through Random House CDE insisted that Klinger take a license to the characters. Klinger instead brought a lawsuit seeking a declaratory judgment to determine whether the characters are in the public domain. On December 23, Chief Judge Ruben Castillo of the Federal Court for the Northern District of Illinois released a judgment that has far-reaching consequences for both authors and IP owners.<br />
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A few words on the intellectual property status of characters. Under copyright law ideas themselves aren't protected, just the way they are expressed (<i>i.e.</i> the particular text, drawing, photograph, etc.). It's not infringement to have a story that's similar to someone else's story, but if you want to create something that is based on the prior story you either need to get a license to make what's called a derivative work or you need to be engaging in fair use. (I've written a few posts on fair use; see the link below if you need a refresher.) Characters are of course created in the course of creating a copyrighted work and they aren't the copyrighted work themselves, but creators need to be able to control the use of their characters or else they would have less incentive to create them. So the law addresses this by saying that when characters are sufficiently delineated in a particular work that using a character would require you to make use of the thing created in that work, the copyright status of that character is the same as the copyright status of the original work.<br />
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But for Holmes and Watson it's not quite so easy. These characters were created in a work that is now in the public domain, but expanded upon in works that aren't. For example, fans of the genre may know that Dr. Watson had a background as an athlete (first described in "The Sussex Vampire") or that Holmes eventually retired from his detective agency (in "The Lion's Mane"). Each of those comes from a story that is not in the public domain. CDE argued that because Holmes and Watson continued to be developed over time with the addition of traits like these they were still covered by the copyrights on the last stories and wouldn't yet be in the public domain. In opposition to that, Klinger argued that these character traits are just glosses on the pre-existing public domain characters and they should be in the public domain also.<br />
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The copyright status of partially-public characters has come up before in analyses of characters like Amos'n'Andy (<i>Silverman v. CBS</i>) and Superman (<i>Siegel v. Warner Bros</i>), and so Judge Castillo had some guidelines to help with his decision here. Relying on those prior decisions Judge Castillo held that Holmes and Watson are clearly set forth in the public domain stories to the point that they are fully-developed and so these characters are in the public domain, but each element of the character is an "incident of expression" and has to be analyzed separately. So Sherlock Holmes who works at his detective agency is in the public domain and can be used without a license from CDE, but post-retirement Sherlock is covered by copyright and needs a license.<br />
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This judgment clarifies three points for authors and creators.<br />
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1. Characters are protected elements under copyright law. This is more important than it may seem. Copyright law protects creators against "substantial" copying of their works. It is now becoming more clear that just taking a character from a fictional work, even where the new work places that character in a new environment, risks being copyright infringement. Put more simply: don't assume that just because you put Luke Skywalker on a dude ranch that you're okay because it's nothing like Star Wars.<br />
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2. It's okay for characters to fork, and different forks can have different lives. Judge Castillo specifically addresses this: CDE argued that Holmes and Watson needed to be covered under copyright otherwise there would be multiple versions of the same character and Judge Castillo said yes, that's possible, and that's how the law works here. So if you're using a famous character who has gone through various iterations, you need to make sure you get permission all the way up the chain of creators. Example: in some of the Star Wars licensed fiction created before Empire Strikes Back, Darth Vader isn't Luke's father and Luke and Leia aren't siblings; if you want to create something in that version of the universe you may need permission from that author as well as from Lucas.<br />
<br />
3. Creators and their estates can't reboot their characters to extend their protection, but each rebooted character will be a new copyrighted work as a fork of the original. Superman was created in 1938. The movie "Man of Steel" was released in 2013 incorporating the character of Superman. But although "Man of Steel" didn't extend the copyright on Superman the character, the specific iteration of Superman in that movie is copyrighted as of that date. So the new elements introduced in that movie (<i>e.g.</i> working as a fisher in Alaska) would be protected for longer than the original character. And this rule will apply for a character in the public domain as well: Jane Austen's Elizabeth Bennet might be free and available for use, but if you want her to kill some zombies you'll have to talk to Seth Grahame.<br />
<br />
In summary, and as Hollywood shows a bit too often every year, reusing and repurposing well-known characters is one of the most surefire ways for creators to extend the life of a creation and maximize its value. But there are limits. And through cases like this one, we're starting to see where they are.<br />
<br />
<br />
LINKS<br />
Legal Minimum posts on fair use<br />
<a href="http://bit.ly/RjRR88">http://bit.ly/RjRR88</a><br />
<i>Klinger v. Conan Doyle Estate</i><br />
<a href="http://freesherlock.files.wordpress.com/2013/12/klinger-order-on-motion-for-summary-judgment-c.pdf">http://freesherlock.files.wordpress.com/2013/12/klinger-order-on-motion-for-summary-judgment-c.pdf</a><br />
<i>Silverman v. CBS</i><br />
<a href="http://scholar.google.com/scholar_case?case=1156769317965951408&q=Silverman+v.+CBS+Inc.&hl=en&as_sdt=6,48&scilh=0">http://scholar.google.com/scholar_case?case=1156769317965951408&q=Silverman+v.+CBS+Inc.&hl=en&as_sdt=6,48&scilh=0</a><br />
<i>Siegel v. Warner Bros</i><br />
<a href="http://scholar.google.com/scholar_case?q=Siegel+v.+Warner+Bros&hl=en&as_sdt=6,48&case=7097655447773829843&scilh=0">http://scholar.google.com/scholar_case?q=Siegel+v.+Warner+Bros&hl=en&as_sdt=6,48&case=7097655447773829843&scilh=0</a>Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com7tag:blogger.com,1999:blog-6739637508282196439.post-14418293966879940932014-01-01T12:02:00.002-08:002014-01-01T12:02:44.764-08:00Okay, this time I'm *really* backYou are entitled to disbelieve, but I'm really back this time. 2013 brought a ton of personal stuff: some good, some bad, some great, some awful, all huge. But just like 2013, that's in the past.<br />
<br />
Two things became clear to me during the hiatus:<br />
<br />
<ol>
<li>Writing these posts was helpful to keep me sharp. Keeping up on topics of interest and figuring out how to explain them to the world made me understand them more deeply. That's something I can build upon...</li>
<li>I've taught my Entertainment Law class at the University of Washington for 4 years and it's time to update the curriculum. The thing is, most of the topics I cover here would also be good for my students. And teaching doesn't have to be boring, and textbooks don't have to be boring either.</li>
</ol>
<div>
So here's a marker I'm throwing down right now. In 2014 I will work out first iterations of thoughts on this blog, look for comments and criticisms etc., and use those to assemble the thoughts in longer form that I'll make available as an e-book and through CreateSpace for print.</div>
<div>
<br /></div>
<div>
I need you to keep me honest. So if I don't do these things, hold me to them.</div>
<div>
<br /></div>
<div>
On with the show... and thanks for coming back.</div>
Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com3tag:blogger.com,1999:blog-6739637508282196439.post-63803451526861372192013-06-23T10:08:00.000-07:002013-06-23T10:08:06.593-07:00Back after a (too) long hiatusWow, that was a much longer hiatus than I had ever wanted. Many apologies to those who've been checking back during the absence, many thanks for coming back now.<br />
<br />
I'm going to start posting again, and also start working up a book that could both double as a textbook for my course (Entertainment Law at the University of Washington) and also serve a more general audience. Thoughts, input, topics you'd like to see, things you don't care about etc. requested and welcomed!Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com3tag:blogger.com,1999:blog-6739637508282196439.post-51938772538164889712012-12-21T09:18:00.003-08:002012-12-21T13:41:41.679-08:00In its response to the Plaintiffs' amended complaint, Harlequin has nothing new to sayI've had a copy of the Harlequin response to the Plaintiffs' amended complaint in their motion for a class action in the e-books litigation, and I haven't been able to motivate myself to write about it for one simple reason: they had nothing new to say.<br />
<br />
I've only found one item that even bears mentioning, and even that one can be dealt with quickly.<br />
<br />
<a name='more'></a><br />
<br />
Harlequin directs the court's attention to a recent judgment, Cordell v. McGraw-Hill. In that case, McGraw-Hill transferred publishing contracts to its international division for international publication at below-market prices, then paid the authors based on the royalties on those below-market prices. In that case the court held that McGraw-Hill hadn't breached the contract.<br />
<br />
Harlequin raises that case to make this point:<br />
<blockquote class="tr_bq">
"In dismissing plaintiff's breach of contract claim [in the McGraw-Hill case], the court determined that the publishing agreement at issue was unambiguous and expressly provided that foreign royalty payments could be calculated based on sales to the defendant's international division... The same applies here."</blockquote>
But this raises the obvious question: Why should the same principle apply here? The contracts at issue in the e-books litigation specifically don't have the provision that Harlequin invokes from the McGraw-Hill contract: one that says the publisher can transfer inside divisions and pay on the lower intercorporate rate.<br />
<br />
This goes to the bigger argument that the Harlequin plaintiffs are raising: that Harlequin's acts were structured to the detriment of the plaintiffs, that Harlequin knew why it was doing that, and that it did these acts deliberately. If there had been a clause in the contract calling out that Harlequin would transfer these rights to a related company, it would be difficult for the plaintiffs to argue they were taken advantage of: they would have known up front this was a risk and they would have accepted it.<br />
<br />
But that's not the case here.<br />
<br />
Instead, what happened here was that Harlequin never advised the plaintiffs that it might do an intercorporate license to publish e-books. In fact, its entire business practice was that it didn't do intercorporate licenses when it used its various corporate entities in publishing print books. The plaintiffs in their motion show that over and over again: Harlequin treated the European-based royalty-paying entities as exactly that - companies that existed just for financial purposes - and the real work was done by the Canadian company. The authors would have had no reason to suspect that any future e-books business would be conducted otherwise.<br />
<br />
The first phase of the litigation has unfolded as it often does. The plaintiffs have found new and interesting facts that improve their case. And Harlequin has nothing new to say in response.<br />
<br />
Maybe in 2013 Harlequin will wish the Mayan Apocalypse really did happen.Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com3tag:blogger.com,1999:blog-6739637508282196439.post-87090686638266918002012-11-27T07:46:00.000-08:002012-11-27T07:46:03.275-08:00Two reasons museums charge for reproductions (and one consequence)By way of The Digital Reader, I've just read an interesting article that I think misses a very important point. That point leads to two of the bigger and related themes I'll be exploring here in 2013, as well as one of their consequences.<br />
<br />
The article, linked below, laments that many famous works of art aren't available in high-res and so they can't be used in teaching. It sets forth the reason for this as being because museums are overreaching, using their legal rights of control over the environment where these works are stored, or the license terms of their own photos and the websites where they are displayed, as a way to stop otherwise-permitted reproductions of works that would be in the public domain. (I'm oversimplifying but I don't think I'm changing the thrust of the piece; read it and make your own decisions.)<br />
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Yes, if it wasn't for copyright and the control it gives over images and reproductions the museums wouldn't be able to stop this kind of thing. But that's putting the cart before the horse.<br />
<br />
<a name='more'></a><br /><br />
When reading this article I was reminded of a theme I often see in more traditional arts contexts: that pricing models have developed in response to the legal system, and that one underlying reason for the tension between technology and content creators is the way technology undermines those pricing models.<br />
<br />
Here's an example of which I've spoken previously on Legal Minimum: text-to-speech for e-books. In the context of a book-scanning judgment, I've made the point that text-to-speech technology will allow e-books to effectively become audiobooks. Right now, publishers set their pricing based on the idea that it's prohibitively difficult to change the format of a work: you could make any book into an e-book by "just" retyping the entire thing into a word processor and loading the saved file into your reader. It's cheaper just to buy the e-book version so very few people do that. But if there was software to do all the work for you... Currently they will be poorly-narrated, but that won't last forever, and even if it does there will be plenty of people who will put up with the lower quality because of the lower price. Does this mean we need to consider every e-book as a potential audiobook as well?<br />
<br />
I see the museums issue as another instance of this bigger problem. For many people, seeing a high-quality digital reproduction of a work of art may substitute for seeing the actual work. But they can't price these reproductions at a level that will compensate them for the lost visits. Combine that with a legislative/policy environment in many countries that encourages cultural activities to become self-sustaining, and many of these same challenges arise. For many museums, I'd bet that high image pricing is the way they compensate themselves for these lost visits.<br />
<br />
The article compares today's world, where digital images of art exist but are covered by rights management, with the past, where professors could go take images from a physical slide bank. I see that as the same thing as the book example above: back in the day, the only way to get a set of slides was either to go to every museum yourself and take the pictures, get someone else's negatives and make your own slides, or buy them. But now, digital copies make it easier to share. So that source of revenue risks being gone for the museums. And they don't want to change ticket prices to match (in some cases they aren't allowed to by law or terms of their endowment).<br />
<br />
So what does this mean?<br />
<br />
The two themes I hinted at in the lede and to which I'll return in 2013 are:<br />
<br />
<ol>
<li>The legal system doesn't create this kind of thinking. Correlation is not causation. But the way the system is structured invites people in the content creation industry to do things like price their works in the ways I've described above.</li>
<li>Technology is subverting the content creation industry. The industry has accepted the benefits of digital file formats. It hasn't accepted the burdens, and is trying to use the legal system to fight back. And if that doesn't work, you'll see the effect in pricing.</li>
</ol>
<br />
The consequence? There will be less content, mostly killing middle-of-the-road works without broad appeal. And it will cost more to get it.<br />
<br />
Please feel free to use the comments to tell me why I'm wrong.<br />
<br />
<br />
LINKS:<br />
The article that prompted these thoughts:<br />
<a href="http://mfeldstein.com/an-open-letter-to-museums-and-libraries-about-images/">http://mfeldstein.com/an-open-letter-to-museums-and-libraries-about-images/</a><br />
The Digital Reader (read this blog if you care at all about devices)<br />
<a href="http://www.the-digital-reader.com/">http://www.the-digital-reader.com/</a><br />
Legal Minimum article on book scanning judgment:<br />
<a href="http://legalminimum.blogspot.com/2012/10/how-does-hathitrust-book-scanning.html">http://legalminimum.blogspot.com/2012/10/how-does-hathitrust-book-scanning.html</a>Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com8tag:blogger.com,1999:blog-6739637508282196439.post-65198567249607033332012-11-26T06:50:00.001-08:002012-11-26T06:50:43.736-08:00Harlequin plaintiffs bring new allegations, improve their case[NOTE TO READERS: It's been a while since I've posted. Thanks for coming back.]<br />
<br />
On November 2, 2012, the authors(*) in the Harlequin class action upped their game against Harlequin. If they're wrong, they will lose their class certification request. But if they win, they will find themselves making a point that will have repercussions far beyond just e-publishing and authors.<br />
<br />
<a name='more'></a><br /><br />
I've previously summarized the facts of this claim in a post to which I've linked below; if you're new to the topic I'd suggest you go read those, or any of the other summaries around the Web. In a nutshell, the authors signed contracts with a Harlequin entity in Switzerland, but the contracts were administered by the main Canadian Harlequin company and the authors contend this was just a tax strategy from Harlequin. But when it came time to publish e-books, Harlequin licensed the rights from the Swiss company (which I'll call HS) back to the main Canadian company Harlequin Enterprises (which I'll call HE). The publishing contracts with HS had a clause giving 50% royalties for things like e-books to the authors, but the license with HE gave HS only 6-8% of cover price, meaning the authors only got 3-4% (50% of 6-8%). They claim this was unlawful. Not surprisingly, Harlequin disagrees.<br />
<br />
After Harlequin filed a motion to dismiss the lawsuit, the authors amended their claims. They didn't add any new causes of action, meaning they didn't find any new grounds to sue. But the new facts that they have added in support of the old claims aren't very good for Harlequin.<br />
<br />
There are two significant differences between the old and new Complaint, one that looks big on paper and another that I think could be an even bigger deal.<br />
<br />
<br />
The one that looks big on paper, and has gotten a lot of attention, is the inclusion of more allegations to back up the argument that HS is nothing more than a shell for HE. The result of this argument, if the authors win, is that HE will be considered to be the Publisher under the contracts. That would make the 50% royalty payable on the amounts received by HE. Imagine an e-book with a $5.00 cover price. Amazon takes 30% or $1.50, leaving $3.50 per copy. If the authors are successful, they would get $1.75. Up to now they've been getting about $0.12. So that's a big difference.<br />
<br />
They are arguing a doctrine called "alter ego" to make this claim. Unfortunately Batman is not involved. The alter ego argument basically holds that where you have two companies but one is basically a shell that has no independent operation, it's only fair to treat them both as the same company so that they can't do inter-company contracts that operate to deprive you of money you're owed. In order to make that argument, the authors basically have to show that HE acted as though HS was under its control. And they make some pretty compelling claims to this effect, including:<br />
<br />
<ul>
<li>HE referred to HS as being one of its "offices"</li>
<li>HE referred to HS's accounting department as being "our accounting department"</li>
<li>HE told the authors that it was asking them to sign contracts with HS in order to rationalize its business procedures and wouldn't prejudice them or put them in a worse position contractually.</li>
<li>HE handled all administrative tasks for HS, including contract drafting and administration. Although HS sent the royalty statements, HE handled all followup questions.</li>
<li>When authors wanted to obtain reversion rights for their books, which would terminate the publishing contracts and allow the authors to resubmit them elsewhere, authors had these discussions with HE. If HE's staff approved of the decision, they would prepare the documents for HS to sign.</li>
</ul>
<br />
One thing to note. The authors don't have to show all of the above things to be true in order to get their class action. That's what the actual trial is for. Here, they just have to show that they have reasonable grounds to believe those things are true, and then argue that if they are true then there's an alter ego situation.<br />
<br />
That last bit matters. The kinds of things the authors are describing, where there are two companies but one is a shell that executes certain documents for certain reasons but otherwise all of its work is done by employees of another company, that happens more often than you'd think. In fact, it is central to the tax planning strategies of many major companies: they incorporate a company in a tax-advantageous state like Nevada or Ireland and then they route transactions through it, but otherwise the corporate family all acts like one entity. I think the last bullet is going to be very significant: if HE is negotiating the termination of contracts executed by HS, then that may well mean HS can't act independently. That could be critical.<br />
<br />
But to me, the bigger issue is the one that isn't really fleshed out in either the old or the new Complaint: that the 6-8% royalty itself isn't equitable. That is, the authors are contending that even if the court decides that the HE-HS contract gets to be upheld, that doesn't end the conversation. Instead, they would have the court determine whether the 6-8% rate in that contract was fair to the authors, on whose behalf HS was negotiating when it licensed those rights.<br />
<br />
And that argument risks being very interesting. For two reasons.<br />
<br />
First of all, there's the fact that, when Amazon itself invited authors to go into the e-book business, it offered a rate of 70% for the authors, and Apple and B&N aren't too far off. That's a lot higher than 6-8%. Harlequin will be hard pressed to explain why its own inter-company rate should be respected by a court in light of numbers like that.<br />
<br />
But although I know there are other people who disagree with me on this, I think this argument is going to raise a bunch of issues that have already arisen in the music industry. And just as they worked to the artists' benefit there, they will have the same effect here. In a case called F.B.T. Productions, LLC. v. Aftermath Records, Eminem sued his record label for treating purchases through iTunes like sales of a physical good, when they were really just licenses under the terms that purchasers had accepted when they accepted the iTunes Terms of Use. Eminem won this lawsuit, gaining the right to receive 50% of sums received (his contractual right for a sublicense) and not 12-20% (his right for a sale).<br />
<br />
Just as with iTunes downloads, so too with e-books. They aren't sold, they are licensed. Whether that's good for consumers or not, it certainly sets up a very direct parallel between the two situations.<br />
<br />
Played right, I think this could be a big issue for the authors, because it demonstrates that there is absolutely no need for HS to have put HE in the middle of this transaction flow. If the "sale" of e-books is actually a license, then why couldn't HS have been the entity doing business with the e-book retailers and, under the agency model, the customers? Yes, it chose not to. As the authors themselves note in their amended Complaint, Harlequin is entitled to do its tax planning as it chooses. But if its tax planning results in the authors being prejudiced, Harlequin will have to demonstrate why its structure should be held up against them.<br />
<br />
And this could be a very difficult thing for them to do.<br />
<br />
(*) I've seen people refer to the authors as "Plaintiffs". I've slipped from time to time and done that myself. Technically they're not plaintiffs. To bring a class action, you first have to file a motion for authorization to file a class action, and if that's granted then you get to be the class plaintiff. Until then they are technically petitioners to a motion, not plaintiffs to a lawsuit. This may seem picky but of such things are fortunes made...<br />
<br />
LINKS:<br />
Plantiffs' Amended Complaint:<br />
<a href="http://www.harlequinlawsuit.com/uploads/Plaintiff_s_First_Amended_Complaint_Against_Harlequin_11.5.12.pdf" style="background-color: white; color: #1155cc; font-family: arial, sans-serif; font-size: 13px;" target="_blank">http://www.harlequinlawsuit.<wbr></wbr>com/uploads/Plaintiff_s_First_<wbr></wbr>Amended_Complaint_Against_<wbr></wbr>Harlequin_11.5.12.pdf</a><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;"> </span>Legal Minimum post on class action:<br />
<a href="http://legalminimum.blogspot.com/2012/07/four-quick-thoughts-on-harlequin-e.html">http://legalminimum.blogspot.com/2012/07/four-quick-thoughts-on-harlequin-e.html</a><br />
Legal Minimum post on Harlequin's motion to dismiss:<br />
<a href="http://legalminimum.blogspot.com/2012/10/three-reasons-harlequin-shouldnt-get-to.html">http://legalminimum.blogspot.com/2012/10/three-reasons-harlequin-shouldnt-get-to.html </a><br />
Blog posting on FBT Productions case:<br />
http://westlawinsider.com/top-legal-news/eminem-lawsuit-finds-itunes-downloads-to-be-licenses/<br />
<br />Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com19tag:blogger.com,1999:blog-6739637508282196439.post-22402616852539806022012-11-12T07:41:00.003-08:002012-11-12T07:41:52.037-08:00A bunch of travel recentlyI've been on the road but have some interesting topics. Hang tight...Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com1tag:blogger.com,1999:blog-6739637508282196439.post-50149758361700311012012-10-29T10:14:00.002-07:002012-10-29T10:14:29.913-07:00How does the HathiTrust book-scanning judgment affect e-books and audiobooks?Scanning copyrighted works and making them searchable on the Internet sounds to many authors like it shouldn't be legal. But on October 10, a Federal Court in New York released a judgment holding that may be. That judgment raises significant issues for authors, publishers, and consumers, giving new scope to fair use of copyrighted materials in the USA.<br />
<a name='more'></a><br />
The company doing the scanning, naturally, was Google. Google had entered into agreements with various universities including the University of Michigan (operator of the HathiTrust e-book pooling system), the University of Wisconsin, Indiana University, and Cornell University. Under these Agreements Google would be allowed to scan library books and make them accessible to be searched on the Web as well as providing digital versions of the book back to the universities (which would donate them to HathiTrust).<br />
<br />
For works with known authors HathiTrust would have two benefits: full-text searching and access for people with certified print disabilities. For orphan works most of the books in HathiTrust would also be available for full text viewing online (Indiana U didn't allow this).<br />
<br />
Various authors and authors' organizations opposed this plan, including the Authors Guild in the USA and similar organizations in other countries, as well as individual authors. The National Federation of the Blind, among others, got court permission to file a brief as an intervenor. Google's use of the books is not at issue here; there's a separate lawsuit about that. Here, these organizations were claiming that the HathiTrust system violated copyright. And, after applying the fair use tests under US copyright law (which I've written about before, links below), the judge disagreed. And in disagreeing, the judge made 3 holdings that open a door to what could become a very significant change for the e-book and audiobook markets.<br />
<br />
<u style="font-weight: bold;">1. Text-to-speech is transformative use.</u> The first step in determining whether something is fair use is to see whether the use transforms the original work or just copies it. Here the court held that because scanning the books allowed for print-disabled scholars to have access to them through text-to-speech, that would pass the transformative use element of the fair use test. Finding that print-disabled customers aren't considered a significant market, the court determined that providing access to them wasn't the intended use of the original work (which was enjoyment and use by sighted persons). Technology that made these books accessible to such customers would be transformational, and therefore using that technology would be fair use.<br />
<br />
This is a pretty big deal. Usually the transformation has to be something relating to the nature or character of the work. The ordinary example is parody or satire. Straight-up copying without any modification isn't something that courts tend to find to be a transformation. This is one of the first cases, if not the first case, where a court held that just changing the format of a work would transform it.<br />
<br />
<u style="font-weight: bold;">2. Copying the whole book can be permitted in certain cases.</u> The third step in the fair use test is determining whether the amount of copying is reasonable in relation to the purpose for the use. Once the court found that text-to-speech was transformational, it would be very difficult for the court to hold that only partial copies would be permitted. As a result, the court held that HathiTrust was allowed to copy the entire book.<br />
<br />
Although it follows logically from #1 and isn't the first time it has happened, this is also a big deal. Many people seem to think that there's a "10% rule" - there's nothing illegal about copying 10% or less of a work. This case is a very extreme example of why relying on rules like that is a bad idea.<br />
<br />
<u style="font-weight: bold;">3. Technology for print-disabled readers may help fill a mandate under the Americans with Disabilities Act.</u> Under the ADA, institutions are required to help remedy discrimination against and difficulties met by people with disabilities such that they can compete on an equal basis with people not having those disabilities. Since one of the purposes of HathiTrust is to provide print-disabled customers with access to texts, HathiTrust is fulfilling that mission under the ADA by scanning the books and making them available in text-to-speech by using technology.<br />
<br />
But does this mean that only universities and institutions are allowed to provide that technology? Or can the private sector develop technologies for this as well? The answer to this second question becomes very important.<br />
<br />
In a world of e-books, that question becomes very timely. The original versions of the Kindle contained text-to-speech functions. In response to complaints and veiled threats of litigation, Amazon allowed publishers to choose whether or not to enable that function on a book-by-book basis. And the newest Kindles apparently don't offer the feature at all.<br />
<br />
Does this mean an enterprising app developer could fill the gap, developing technology to allow print-disabled readers to convert their Kindle and other books to audiobooks?<br />
<br />
If the answer to that question is yes, then that would raise a very interesting possibility. Under the Sony Betamax judgment, making copies of TV programs was found to be a legal activity because it facilitated time-shifting, and therefore Sony did nothing illegal by developing the Betamax. The movie studios complained that people were going to use the Betamax to do illegal copying of copyrighted content, but the studios lost that argument. (I'll talk a lot more about this judgment in a future background post, trust me!) So on that same reasoning if it's fair use for a print-disabled person to convert a book text-to-speech, it should also be fair use for someone to develop an app to facilitate that.<br />
<br />
But an app like that would likely have a pretty significant impact on the audiobook industry. Publishers have sold audiobook rights separately from print. There's an industry of voiceover professionals who would lose their work if text-to-speech apps became commonplace. And authors would, of course, receive no royalties.<br />
<br />
Of course, Kindle books are protected by DRM. Will that make a difference? Should it?<br />
<br />
I suspect a court will be looking into that before long.<br />
<br />
<br />
LINKS:<br />
HathiTrust judgment:<br />
<a href="http://www.scribd.com/doc/109647049/HathiTrust-Opinion">http://www.scribd.com/doc/109647049/HathiTrust-Opinion</a><br />
Legal Minimum post on fair use criteria:<br />
<a href="http://legalminimum.blogspot.com/2012/08/fair-use-and-unfair-theft-how-can.html">http://legalminimum.blogspot.com/2012/08/fair-use-and-unfair-theft-how-can.html</a><br />
Articles on Amazon phasing out text-to-speech on Kindle:<br />
<a href="http://bits.blogs.nytimes.com/2009/02/27/amazon-backs-off-text-to-speech-feature-in-kindle/">http://bits.blogs.nytimes.com/2009/02/27/amazon-backs-off-text-to-speech-feature-in-kindle/</a><br />
<a href="http://liliputing.com/2012/09/amazon-kills-text-to-speech-with-new-kindle-paperwhite.html">http://liliputing.com/2012/09/amazon-kills-text-to-speech-with-new-kindle-paperwhite.html</a>Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com6tag:blogger.com,1999:blog-6739637508282196439.post-32830902942691565472012-10-25T10:34:00.000-07:002012-10-25T10:34:04.074-07:00"Is this the worst paragraph in your publishing agreement?"The Passive Voice, a blog I follow that has tons of information for authors, has a really important post today entitled "Is this the worst paragraph in your publishing agreement?"<br />
<br />
The advice in here is good for not just authors. App developers and film/TV producers should know about it too.<br />
<br />
<a name='more'></a><br /><br />
Here's an example of the clause in question:<br />
<blockquote class="tr_bq">
The Work contains no matter that the publication or sale of which violates any law or regulation, nor is it in any other manner unlawful, and the Work will not violate any statutory or other copyright or any other right of any third party (including, without limitation, rights of privacy, rights of publicity or moral rights), or be libelous or obscene, or in any way illegal.</blockquote>
The author notes, and I agree with him, that this clause can have very far-reaching consequences. Read the post, even though it's long, because it's totally worth it.<br />
<br />
<br />
LINKS:<br />
The original post<br />
<a href="http://www.thepassivevoice.com/10/2012/is-this-the-worst-paragraph-in-a-publishing-agreement/">http://www.thepassivevoice.com/10/2012/is-this-the-worst-paragraph-in-a-publishing-agreement/</a>Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com2tag:blogger.com,1999:blog-6739637508282196439.post-20661410448459906002012-10-22T08:26:00.000-07:002012-10-22T08:26:11.616-07:00Three reasons Harlequin shouldn't get to have the e-books litigation dismissedOn October 19, Harlequin filed a motion seeking to have the e-books litigation dismissed. They make a lot of interesting arguments. Their lawyers are earning their money. But ultimately these arguments collapse onto themselves. This motion should lose.<br />
<a name='more'></a><br />
<br />
For those of you not aware of the lawsuit, back in July a group of authors went to court to get permission to bring a class action alleging that they were being underpaid for e-books under their publishing contracts with Harlequin. Under these contracts the authors claim they were supposed to receive 50% of e-books revenue received by the Publisher. But, they claim, Harlequin did some inter-company sleight of hand by licensing the e-publishing rights to a related company that paid a 6-8% royalty on e-books, and then the authors received 50% of 6-8% of the sale price (the money received by the Publisher), rather than 50% of the sale price of the e-book (the money received by the related party).<br />
<br />
Because the authors were looking to make this a class action they need court authorization to do that, and so their first step was to file a motion asking for authorization. The motion filed on Friday by Harlequin asks the court to declare that these plaintiffs, and basically any plaintiffs, shouldn't get to sue Harlequin on these facts.<br />
<br />
I've glossed over one thing by saying "Harlequin" and that's important to the motion filed on Friday. The authors had their contracts not with Harlequin Enterprises (HE), the Canadian company that you think of when you think of Harlequin, but rather with either Harlequin Books S.A. (HBSA) or Harlequin Enterprises B.V. (HEBV), a Swiss or Dutch company both of which are related to HE but not the same. So the Publisher under the contracts was HEBV/HBSA, not HE.<br />
<br />
It's this distinction that makes the difference, as far as Harlequin is concerned. Boiling down their arguments, we end up with this:<br />
<br />
<ol>
<li>The authors had no contracts with HE so there can be no breach of contract by HE.</li>
<li>Just because HBSA/HEBV licensed the e-book rights to HE, a related company, that doesn't make HE the "Publisher" under the authors' contracts.</li>
<li>There's no legal basis to say that HE was unjustly enriched by getting to keep the money that the authors think should be theirs, because the authors had a contract and that's all that matters.</li>
</ol>
<div>
The second argument is the interesting one and I'll unpack it a bit.</div>
<div>
<br /></div>
<div>
There's no question that the authors got paid 50% of the money that HEBV/HBSA received. What they want is 50% of the money that HE received. In order to win, they will need to demonstrate that there was something illegitimate about the transaction where HEBV/HBSA licensed the e-book rights to HE (I'll call that the License going forward) so that the judge will say that HE is effectively the "Publisher" under the contracts, rather than HEBV or HBSA. That would then obligate HE to pay the 50% royalty.</div>
<div>
<br /></div>
<div>
The heart of the motion filed on October 19 addresses this argument. Looking at each of the reasons raised by the Plaintiffs, Harlequin attempts to prove that each of them is wrong.</div>
<div>
<ol>
<li>The License wasn't an assignment because HEBV/HBSA didn't intend to give HE any obligations to pay the authors and because the authors' contracts had allowed HEBV/HBSA to license the rights to HE if HEBV/HBSA wanted to.</li>
<li>HEBV/HBSA weren't HE's agents when they contracted with the authors because HE never intended to make HEBV/HBSA into its agents: they were always supposed to be the contracting parties. The License doesn't change that.</li>
<li>HE didn't assume the obligations of the Publisher under the contracts just because it did the work under the contracts in publishing the books, because HEBV/HBSA had the right to delegate work to a related company under those contracts. The License isn't a delegation of work, it's a license.</li>
<li>The court shouldn't pierce the corporate veil and find that HEBV/HBSA were really just the alter ego of HE, as a result treating HE as the "true" Publisher under the contracts. That's not what the License is for. The Plaintiffs don't have any proof that was the case, and so the Plaintiffs shouldn't be allowed to argue it.</li>
</ol>
<div>
But these arguments can all be addressed by 3 responses:</div>
</div>
<div>
<ol>
<li>Of course HEBV/HBSA didn't have any intention to give HE any obligations toward the authors. That was the whole point of the License. The court shouldn't look to the intentions of the people who structured the transaction between themselves, who had every incentive to structure it in the way that gave HE no obligations, and conclude that HE shouldn't have had obligations.</li>
<li>Of course the Plaintiffs don't have any proof that HEBV/HBSA were really just the alter ego of HE. How could they? They haven't been allowed to look into HE's files yet. That's what happens in discovery, and discovery doesn't happen until after this motion.</li>
<li>If HEBV/HBSA had published the e-books then the authors would absolutely have been entitled to 50% of the money. But why couldn't they have published these books? Why did they need to do an inter-corporate License in order to exercise these rights?</li>
</ol>
Ironically Harlequin's #3 argument above makes this last point perfectly. HEBV/HBSA were able to delegate the paperback publishing work to HE and get the job done. They didn't need an inter-company license for that business, which has higher fixed costs including printing, distribution, and marketing. Why then did they need a license for the business operation that has none of those costs?</div>
<div>
<br /></div>
<div>
The only logical conclusion for a court to draw is one based on the different royalty rates: Harlequin chose to delegate the work where the royalty rate makes business sense to Harlequin, but where the royalty rate payable to authors would have made no sense to Harlequin, time for the License. Yes, the authors' contracts allowed Harlequin to do each of these. But there's also a legal doctrine that each side of a contract has to exercise its rights under the contract in good faith.<br />
<br />
The judge should give the Plaintiffs a chance to argue that never happened.</div>
Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com5tag:blogger.com,1999:blog-6739637508282196439.post-24083664441243062762012-10-10T06:55:00.000-07:002012-10-10T07:03:29.897-07:00Why is it so hard to stop patent trolls?In the right hands, patents are good for inventors and for society. The monopoly they give allows for companies to do R&D work and commercialize that work, creating things that are a net gain for all of us.<br />
<div>
<br /></div>
<div>
The problem is, there are also companies out there that never make anything. They just see an issue, think about what kinds of things might somehow be related that issue, and then file patents based just on the description of how something should work rather than on something they've actually done. They never manufacture anything using that patent. They never even have any intention of doing it. Their definition of "doing business" with their patent is to find people who they think are doing something similar to the things described in their patent, contact them, and offer to license or even sell the patent. Meanwhile the companies that license or buy the patent just keep doing what they were doing, making things to try to help the world.</div>
<div>
<br /></div>
<div>
I have, of course, just described startup pharmaceutical companies.<br />
<a name='more'></a></div>
<div>
<br /></div>
<div>
In a nutshell, that's why it's so hard to stop patent trolls (or if you want to be nice, non-practicing entities or NPEs). Because in order to be able to stop something using a law, you have to be able to distinguish it from any legitimate business practice. Otherwise you end up stifling things that the patent system is designed to protect.</div>
<div>
<br /></div>
<div>
I've spent a lot of time thinking about this issue. It's maddeningly difficult to find a way to describe patent trolls in a legalistic way that doesn't accidentally capture legitimate companies that are researching or otherwise working on real technologies that are expensive to bring to market and just don't have the capital to do it. After all, startup pharmaceutical companies</div>
<div>
<ul>
<li>Have no intention of manufacturing products</li>
<li>Can't afford the necessary testing to be allowed to sell products</li>
<li>Have an end game of licensing or selling their patents</li>
</ul>
</div>
<div>
All of these are identical to patent trolls. The real difference is intent: pharma companies would carry their discoveries across the line if they could, and patent trolls never intend to do that. And it's very difficult to legislate intent. Want to put a condition in the law saying you have to intend to create something in order to keep a patent? Won't work: too easy to say "I would but I can't because this infringer came first and stole my market". And sometimes that argument is even true.<br />
<br />
Believe me. There are companies with giant litigation and lobbying budgets out there that are thinking about how to stop patent trolls without all the expense of litigation. Right now they're spending millions of dollars every year on these suits: a patent lawsuit costs about $1M in fees to defend, that's why many companies will settle a case they know they can win. If there was an easy way to distinguish between the trolls and the legitimate businesses, they'd have found it.</div>
<div>
<br /></div>
<div>
And if you've got thoughts, feel free to leave them in the comments.</div>
Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com4tag:blogger.com,1999:blog-6739637508282196439.post-87193362462627118092012-10-08T07:10:00.002-07:002012-10-08T07:10:43.715-07:00A 3-step guide to basing fictional characters on real peopleIn a previous post, I've given a high-level overview of the issues involved in using real people as the basis for your characters. But this raises a very technical issue called libel in fiction. And that can be just as bad as libel in fact.<br />
<br />
Here's three steps to consider if you want to take a real person and use them as the basis for a character in your fictional universe:<br />
<a name='more'></a><br />
<br />
<b>Step 1: Think of what needs to remain and what can change.</b> If you are going to use an exact clone of a real person, you need to get their permission to do this through a name, image, and likeness release (I'll write about these in a future post). But you can often adapt a real person into a fictional character if you do it right.<br />
<br />
This shouldn't be surprising. There are very few truly impossible-to-replicate character descriptions you can write outside of a sci-fi or fantasy setting. So nearly all of us could find many of our personality traits mirrored in someone's fictional characters. If just having a character who resembles a real person was enough to cost you a lawsuit then every author would be breaking the law.<br />
<br />
At the Game Developer's Conference in 2006, I saw Ron Moore (the Executive Producer on the Battlestar Galactica reboot) give a fascinating presentation on making adaptations of pre-existing IPs. Using the example of the Starbuck character he walked through the thought process of what you keep and what you don't, to end up with the essence of the original character in a new form and format. Would it really change if you made your main character from a man into a woman? If so, would those changes maybe make a richer story? Asking yourself questions like these might help you start thinking about how best to work through this step.<br />
<br />
So what do you need to change?<br />
<br />
<b>Step 2: Make sure that you don't just make negative changes.</b> You need to make sure that you don't just make changes that, if you said them about a real person, would be libel.<br />
<br />
In Muzikowski v. Paramount Pictures, Paramount made a film based on the story told by Muzikowski in a book he wrote about his experiences coaching baseball in the inner city. It wasn't presented as an adaptation of his book, just based upon it. Muzikowski sued, claiming that he was defamed by the character in the movie that was based upon him.<br />
<br />
The court disagreed. Looking at the movie-Muzikowski and comparing him to the real person, the court found all sorts of non-defamatory distinctions between the two characters. For example the character in the movie had children of his own, while Muzikowski didn't. The court held that distinctions like these meant that the adaptation was permissible, because the adaptation wouldn't cast Muzikowski in a negative light.<br />
<br />
However, if the only changes were ones that would be defamatory if said about a real person then the court would have found libel. So if you base your child molester character on a real person, make sure that's not the only difference.<br />
<br />
<b>Step 3: Think about what a third party who doesn't know these people would think.</b> That's the proper question to ask.<br />
<br />
Tamkin v. CBS Broadcasting is a case about a LA real estate broker couple, Scott and Melinda Tamkin, who sued CBS over being included in an episode of CSI. In the episode a mortgage broker named Scott Tucker (their last name was changed during editing) is said to be into bondage and porn and is thought to have killed his wife, Melinda, during a particularly rough bout of sex, but really she killed herself and framed him.<br />
<br />
The Tamkins had been working with a writer for CSI on finding him a house, and when they watched the episode they felt they recognized several of their own personality traits in there: Melinda Tamkin was a runner just like Melinda Tucker, and both she and Scott Tamkin and Tucker used prescription toothpaste. In fact, in the original draft of the script the characters were named Tucker, but they changed the name to Tamkin before filming.<br />
<br />
That sure sounds like the Tuckers are the Tamkins, and you'd think the Muzikowski case would be pretty important here to say that CBS shouldn't have let these characters into the episode.<br />
<br />
You'd be wrong.<br />
<br />
The legal test isn't whether the person on whom you've based the character would recognize themselves, or whether their friends would. It's whether a reasonable person hearing the descriptions of each group of people would think the characters are based on the real people. That's a big difference and so the court held that the portrayal of the Tamkins in the CSI episode wasn't libel.<br />
<br />
Truthfully, based on this case I don't really know where the line is any longer. If you can take a person's somewhat-distinguishing personality traits, add a dash of bondage and porn, and then it's okay so long as you change their job... So Tamkin feels like something upon which you maybe shouldn't base all of your characterizations. A safer way would be to use the Muzikowski standard and add a few neutral and positive changes as well as the ones that might make your character more interesting. But either way, you probably have more leeway than you thought.<br />
<br />
<br />
<br />
LINKS:<br />
Muzikowski v. Paramount:<br />
<a href="http://scholar.google.com/scholar_case?q=muzikowski&hl=en&as_sdt=2,48&case=3646680402603178633&scilh=0">http://scholar.google.com/scholar_case?q=muzikowski&hl=en&as_sdt=2,48&case=3646680402603178633&scilh=0</a>
<br />
Tamkin v. CBS Broadcasting:<br />
<a href="http://scholar.google.com/scholar_case?q=tamkin&hl=en&as_sdt=2,48&case=18066934141068720184&scilh=0">http://scholar.google.com/scholar_case?q=tamkin&hl=en&as_sdt=2,48&case=18066934141068720184&scilh=0</a>
Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com8tag:blogger.com,1999:blog-6739637508282196439.post-53471855142418496242012-10-05T07:43:00.000-07:002012-10-05T07:43:55.678-07:00A checklist of 5 things creators could do at the beginning of each monthI like to set various habits at the beginning of the month to get myself in the practice of checking things that bear checking on a fairly frequent basis. If you're a creator, especially an author, here's 5 things that might help you in your work as well as in protecting your work.<br />
<a name='more'></a><br />
<ol>
<li>Register your copyrights. See more in my guest post on The Digital Reader, linked below, for why you should do this. But in a nutshell: if someone rips you off, you'll be glad you did.</li>
<li>Check to see if the rights are reverting in any of your old titles. One good suggestion: make a chart of what books revert when, and cross-reference against your royalty statements to make sure that you're not missing any territories or activities.</li>
<li>Check to see whether any new sales territories or channels have opened up and you've missed it. Example: rumor has it that Amazon is about to add Kindle stores for Japan and China. Do you need to do anything to authorize those territories if that happens?</li>
<li>If you work in historical genres, ask yourself whether anything fell into the public domain this year that might be useful to you. Pride and Prejudice and Zombies may not be your bag, but Seth Grahame's decision to remix one of the most famous works of fiction sure turned out well for him. This is different for different countries and I've put a good reference source for dates below. (Yes, things fall into the public domain based on the year and not the month, but it's still a good habit...)</li>
<li>If you work in sci-fi, technothrillers, or other invention-happy genres, maybe take a look at the database of the US Patent and Trademark Office to find some new inventions that might inspire you. Another interesting prospect is the USPTO's new Ask Patents site, where members of the public will be invited to comment on things like pending patent applications. It's already turning out to be a great source for knowledge about how inventions work as well as discussions about new technologies being created today for use tomorrow.</li>
</ol>
<div>
<br /></div>
<div>
LINKS:</div>
<div>
My post on The Digital Reader about registering copyrights:</div>
<div>
<a href="http://www.the-digital-reader.com/2012/10/03/its-the-first-of-the-month-have-you-registered-your-copyrights/#more-40252">http://www.the-digital-reader.com/2012/10/03/its-the-first-of-the-month-have-you-registered-your-copyrights/#more-40252</a></div>
<div>
Cornell Law School list of dates for public domain:</div>
<div>
<a href="http://copyright.cornell.edu/resources/publicdomain.cfm">http://copyright.cornell.edu/resources/publicdomain.cfm</a></div>
<div>
USPTO new Ask Patents beta site:</div>
<div>
<a href="http://patents.stackexchange.com/">http://patents.stackexchange.com/</a></div>
Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com4tag:blogger.com,1999:blog-6739637508282196439.post-80031771656729059162012-10-03T07:51:00.002-07:002012-10-03T07:51:45.473-07:00Look and feel of your apps and games: two important cases on copycat appsWhat's so special about Angry Birds or Tetris that makes them so lucrative? Why can't someone just create their own versions of these games? Or can they? Two recent judgments on copycat games shed some light on a fast-breaking area of the law that's important for developers to understand.<br />
<br />
Video games are almost unique among copyrightable materials because they can be simultaneously protected under copyright law in multiple ways: the source code in which they are written is protected by literary copyright, and the look and feel are a protected audiovisual work. But there's another interesting issue about video games, which is that they simultaneously have creative and functional content: the art and music vs. the rules that make the game work. This matters: creative content can be copyrighted, but functional content can't.<br />
<br />
At least that used to be the case.<br />
<a name='more'></a><br />
Using Tetris as the example may make this clearer. The blocks and their shapes may be creative artistic expression. But the way they fall, what happens then they fit together and rows get cleared out, that's the rules of the game which are functional. On the old interpretation therefore the rules of the game would have been unprotectible.<br />
<br />
It's that old distinction upon which Xio had relied. Xio created at Tetris clone. They admitted it readily. Their defense was that once you decide to create a block-falling game there are only so many ways you can do that (a legal doctrine I'll describe in a future post called "scenes à faire"), and the rules of a block-falling game can't be protected, so therefore they were legally permitted to rip off Tetris.<br />
<br />
In a judgment issued May 30, 2012, the court disagreed. Although it did hold that the rules of the game were unprotectible, it nonetheless found that the way the rules were given life in Tetris was protected under copyright. The court therefore found the following things to be protected under copyright and held that, because Xio copied these elements of Tetris, the Xio game was infringing:<br />
<ul>
<li>A 20x10 game field</li>
<li>"Garbage" lines that fill a row with randomly-generated blocks for you to need to clear out</li>
<li>Ghost pieces along the bottom that track where a piece would fit if it dropped right now</li>
<li>A preview of the next piece to come along</li>
<li>Changing the piece from light to dark when it is fitted and no longer falling</li>
</ul>
<div>
To my mind this makes sense. The idea of a falling blocks game may not be original and no one should be able to stop the entire world from creating falling blocks games. And rules are functional, not creative. But once you create a game that instantiates these rules, the specific elements that give it its uniqueness should be yours alone even if they're not artistic in the ordinary sense of the word. Xio could have created a game that had a different-shaped field with no garbage lines or ghost pieces; it chose not to, and it did so because Tetris had created a nearly-optimal version of this game. Xio wanted to free-ride on Tetris, not innovate, and so the court reacted accordingly.</div>
<div>
<br /></div>
<div>
But what if your game implementation uses an art style all of its own, rather than being a straight copy? The next judgment to come along may have filled that gap.</div>
<div>
<br /></div>
<div>
Spry Fox is the developer of the popular Amazon Kindle game Triple Town. Here's how Triple Town works: </div>
<div>
<ul>
<li>The game contains a 6x6 grid in which players place objects.</li>
<li>When 3 identical objects connect, they disappear and are replaced by an object one level up in the game's hierarchy: grass --> bushes --> trees --> huts etc.</li>
<li>There are also bears that wander around the map and block you from putting things in certain squares, but if you can trap the bear it becomes a gravestone.</li>
<li>There is also a super-object that can destroy any other object, called an Imperial Bot.</li>
</ul>
</div>
<div>
Spry Fox entered into discussion with 6Waves, an iOS developer, to create a version for the iPod. They talked for a while, until 6Waves told Spry Fox that it was going to discontinue negotiations and that it was launching its own game called Yeti Town. Here's how Yeti Town works:</div>
<div>
<ul>
<li>The game contains a 6x6 grid in which players place objects.</li>
<li>When 3 identical objects connect, they disappear and are replaced by an object one level up in the game's hierarchy: saplings --> trees --> tents --> cabins etc.</li>
<li>There are also yetis that wander around the map and block you from putting things in certain squares, but if you can trap the yeti it becomes a ice cube.</li>
<li>There is also a super-object that can destroy any other object, called an campfire.</li>
</ul>
</div>
Sound familiar? Spry Fox certainly thought so, and sued 6Waves for copyright infringement. And on September 18, 2012, a court held that Spry Fox might be right.<br />
<br />
This is a big deal. Unlike Xio's game which had a very similar art style to Tetris, there is no art in common between Triple Town and Yeti Town: bots aren't campfires, tents aren't huts, etc. But even though the court held that the 6x6 game field wasn't protected, it also held that Spry Fox has taken the rules of its game and "expressed [them] with its own characters, its own setting, and more". And this expression is covered by copyright.<br />
<br />
So when looking at Yeti Town, the court found that some of its elements may be infringing, including:<br />
<ul>
<li>The object hierarchy: grass --> bush --> tree --> hut is very similar to sapling --> tree --> tent --> cabin.</li>
<li>The setting of the game is similar: a snowfield is similar to a meadow, bears and yetis are both animals, etc.</li>
</ul>
<div>
Yes, the court did note that there are differences between the games. But it also noted that a writer who writes a book about "Brett Cutler" and makes him an Alaskan gold miner can still be found to have infringed the plot of Gone with the Wind.</div>
<div>
<br /></div>
<div>
And it's this last point that, although it's consistent with other areas of copyright law, is the biggest development. Although creative content has been inspired by the stories that came before since almost forever, purely superficial changes aren't enough in other creative endeavors to avoid infringement suits. But this principle has never been applied to video games in this way. Instead, video game cases have always focused on things like changes to the audiovisual elements to determine whether there was infringement. For the first time, a court has looked deeper, at the grammar and structure of the game, and found that there is a protected expression there too.</div>
<div>
<br /></div>
<div>
The Spry Fox judgment isn't a final decision on the merits of the case. 6Waves hasn't even had to defend yet. But things keep going Spry Fox's way two things are clear. If anyone used to think that the various app stores were full of knockoffs, I suspect they are about to have an opportunity to change their mind. And any developers that may have made their fortunes by producing ripoffs and clones, they had better put some of that money into their legal budget pretty fast.</div>
<div>
<br /></div>
<br />
LINKS:<br />
Sunstein law article on Spry Fox, also containing screenshots:<br />
<a href="http://www.sunsteinlaw.com/publications-news/news-letters/2012/10/Schecter_201210.html">http://www.sunsteinlaw.com/publications-news/news-letters/2012/10/Schecter_201210.html</a><br />
Spry Fox v. LOLapps (6Waves is also a defendant but the case is reported like this):<br />
<a href="http://www.sunsteinlaw.com//media/show_temp.pdf">http://www.sunsteinlaw.com//media/show_temp.pdf</a><br />
Tetris v. Xio:<br />
<a href="http://scholar.google.com/scholar_case?case=7039389566875417792&hl=en&as_sdt=2&as_vis=1&oi=scholarr">http://scholar.google.com/scholar_case?case=7039389566875417792&hl=en&as_sdt=2&as_vis=1&oi=scholarr</a>Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com8tag:blogger.com,1999:blog-6739637508282196439.post-16943899124657796382012-10-01T07:46:00.002-07:002012-10-01T07:46:29.511-07:00Three reasons the ex-Register of Copyrights doesn't like change (and one reason he's wrong)<blockquote class="tr_bq">
"[Aereo] appears to have been designed by a copyright lawyer peering over the shoulder of an engineer to exploit what appeared to Aereo to be a loophole in the law and shoehorn the Aereo business model into the Cablevision decision"</blockquote>
Designed by a copyright lawyer... He says that like it's bad!<br />
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Okay, maybe I'm kidding. And some background may be helpful.<br />
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Ralph Oman, the retired Register of Copyrights (the person who runs the office that handles copyright registrations), has filed a brief in the ongoing Aereo litigation. Aereo, as you may know, is a service that uses thousands of little antennas to capture over-the-air TV broadcasts and stream them. One stream per subscriber. Why not have one big antenna? Well, that takes some explaining too.<br />
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I've previously written about the Cablevision judgment in another context, but it's the heart of Aereo's business plan. In Cablevision, a cable provider wanted to provide remote DVRs for subscribers who wanted DVR facilities but not in their home. Those subscribers could tell Cablevision to record a program for them and stream it later. Cablevision's activities were found to be legal but only because they were recording an individual copy for each subscriber: if they had been making one master recording and multiple copies, that would be prohibited.<br />
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Aereo works in a very similar way: one stream per subscriber. The networks sued, and the court that heard the case said that Aereo could continue operating because it found the same loophole as Cablevision. The networks appealed, and Oman has taken their side giving three reasons why he thinks the networks should win.<br />
<ol>
<li>Copyright is a property right. Its owners have broad protections and technology shouldn't be able to circumvent those.</li>
<li>US copyright law protects creators' rights in a technologically-neutral fashion without privileging one type of content creation over another.</li>
<li>What Aereo is doing is the type of thing that Congress meant to prohibit, so the court should find that Aereo is breaking the Copyright Act.</li>
</ol>
The thing is, Oman's argument seems almost wilfully blind to one very important thing: digital rights management technology operates every day to prevent activities like fair use permitted to non-creators by Congress. DVDs are copy-protected, and it's illegal to rip even 5 seconds of a DVD because that requires you to circumvent a technology that exists for purposes of preventing copies, even if what you want to do with the 5 seconds would otherwise be fair use. So it's disingenuous for Oman to say that Congress intended to provide broad protections to copyright owners without also noting that Congress intended to give certain opportunities to secondary users.<br />
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Put another way: as well as broad protections for copyright owners, there are limits. A court is totally within its rights to find that Aereo hasn't found one of the latter. But a court can't say that the limit shouldn't exist.<br />
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LINKS:<br />
LegalMinimum post on 1DollarScan that summarizes Cablevision case:<br />
<a href="http://legalminimum.blogspot.com/2012/08/1dollarscan-cablevision-and-two-reasons.html">http://legalminimum.blogspot.com/2012/08/1dollarscan-cablevision-and-two-reasons.html</a><br />
Techdirt article on Oman brief, including embed of the brief:<br />
<a href="https://www.techdirt.com/blog/innovation/articles/20120927/00320920527/former-copyright-boss-new-technology-should-be-presumed-illegal-until-congress-says-otherwise.shtml">https://www.techdirt.com/blog/innovation/articles/20120927/00320920527/former-copyright-boss-new-technology-should-be-presumed-illegal-until-congress-says-otherwise.shtml</a>Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com1tag:blogger.com,1999:blog-6739637508282196439.post-48253283149084065622012-09-28T07:04:00.001-07:002012-09-28T07:04:16.543-07:00Penguin sues authors to recover advancesOn Tuesday, Penguin decided it was finished with the book publishing business.<br />
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That's the only way I can interpret recent litigation developments from Penguin, which decided to sue a group of authors to recover advances paid for books that were never published.<br />
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The list of authors as reported includes some pretty significant names, such as Elizabeth Wurtzel, author of "Prozac Nation", and Ana Maria Cox, ex-editor in chief of the Wonkette political blog.<br />
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I've previously written a series of posts on book publishing (links below) and whether a publisher can sue authors to recover an advance is actually pretty well-traveled ground. The rules are pretty clear:<br />
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<ul>
<li><b>If the author fails to deliver an acceptable manuscript</b> the publisher can get the money back.</li>
<li><b>If the publisher decides not to publish for other reasons</b> even though the manuscript was acceptable the publisher can't get the money back.</li>
</ul>
(I'm trying to get a copy of the Complaint because I also can't figure out how Penguin can sue all of these same people, who would appear to have nothing in common with each other, in one lawsuit. For technical reasons that's usually not possible.)<div>
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But put aside the legalities for a second and let's just focus on the craziness. Any time a publisher pays an author an advance, the publisher is taking a risk. In one view, a publisher paying an advance is basically making the following bets:</div>
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<ul>
<li>This person will be able to produce a manuscript that we will want to publish.</li>
<li>The advance we will pay (using a calculation similar to the one I've set out in a previous post) will not exceed the amount of money we should have paid.</li>
<li>If the advance does exceed the amount of money we should have paid, it's still worth it to have this person for other reasons (e.g. we become popular with authors).</li>
</ul>
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Focus on that last bullet for a second. Paying good advances makes a publisher popular with authors. The more popular a publisher is with authors, the more other authors want to publish with them. So question: why would any publisher risk its reputation with the author community? Especially, as Elizabeth Wurtzel pointed out when contacted by Above the Law for comment on this litigation, when the amounts at issue are relatively small?<br />
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It just doesn't seem to make any sense.<br />
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I'll be back with more updates in the coming days and weeks, no doubt.<br />
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(Thanks to Nate Hoffelder of The Digital Reader for the tip)
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LINKS:<br />
Legal Minimum posts on book publishing including: publishers rejecting manuscripts, whether authors have to give back advances, etc.<br />
<a href="http://bit.ly/LjV4MC">http://bit.ly/LjV4MC</a><br />
Legal Minimum post on calculating royalties and determining the right advance:<br />
<a href="http://bit.ly/Nwz9F3">http://bit.ly/Nwz9F3</a><br />
The Digital Reader (follow this!):<br />
<a href="http://www.the-digital-reader.com/">www.the-digital-reader.com</a><br />
Smoking Gun article about Penguin lawsuit:<br />
<a href="http://www.thesmokinggun.com/buster/penguin-group/book-publisher-sues-over-advances-657390">http://www.thesmokinggun.com/buster/penguin-group/book-publisher-sues-over-advances-657390</a>
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Above The Law article including responses from Elizabeth Wurtzel and analysis:<br />
<a href="http://abovethelaw.com/2012/09/lawsuit-of-the-day-penguin-v-wurtzel-and-other-authors/">http://abovethelaw.com/2012/09/lawsuit-of-the-day-penguin-v-wurtzel-and-other-authors/</a>
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Anonymoushttp://www.blogger.com/profile/14594191055922439424noreply@blogger.com4