Legal Geek No. 55: Google Books Survives with Fair Use at Appeals Court

Welcome back to Legal Geek. This week, we return to the expanding field of copyright fair use with a review of the Second Circuit Court of Appeals decision protecting Google Books from copyright infringement liability.

https://archive.org/details/LegalGeekEp55

Late last week, a three-judge panel in a New York federal court of appeals dismissed a lawsuit brought by an authors' guild against Google, claiming that the copying and digital storage of copyrighted books and other works in the Google Books program was copyright infringement. Just like the lower courts, the Appeals Court determined that Google Books is fair use under copyright law.

The current era of copyright law in the courts is one of reducing rights, as fair use continues to be more and more expansively interpreted. This is possible because fair use is a four factor balancing test which is a very gray area and always fact based. Judges can sometimes bend the facts to fit the factors in the way necessary to end up at a desired result, and some powerful lobbies like the Electronic Frontier Foundation are working to keep the ball rolling towards bigger fair use and less useable copyright enforcement rights.

Returning to the Google Books case, the judges ruled that Google's unauthorized digitizing and copying of the copyrighted works had a purpose that was highly transformative, specifically because it made a whole new resource for electronic access and analysis of data and information contained in this library of works. Furthermore, under another fair use factor, the public display of text provided to the public from the works when searched in Google Books is only a small amount, and these limited snippets are deemed to be an insignificant amount of the work. Additionally, another factor is effect on the market for the original work, and Google Books is not an actual market substitute for the protected aspects of the originals.

That means three of the four fair use factors favored Google rather than the authors. The final factor is the nature of the works, and while that factor almost certainly favors the authors, the balance of the equities favored Google because even though Google is a commercial entity with some profit motivations, this Google Books tool provides a new useful public service that may actually increase the market for the original copyrighted works in view of greater visibility to the public who may need information from the original books.

So Google avoids what would be a devastating loss, as minimum damages for copyright infringement is $750 per work, multiplied by the millions of works in Google Books becomes billions of dollars. Google Books will remain active, subject to a final appeal to the Supreme Court, which the authors' guild plans to petition for.

Even though this case has origins that date back about a decade, the law on fair use has certainly shifted in that time period to favor Google. What may have been a serious gray area case just a few years ago now seems to firmly fall under the side of fair use rather than copyright infringement. When this increase in the scope of fair use leads to truly useful research tools and new options like Google Books, it's easy to defend those organizations fighting for dramatic fair use expansion in the courts.

But one has to wonder if this trend risks going way too far and undermining the legitimacy and value of copyrights across the board. Something to watch as these major decisions continue.

Until next time, keep your fair use factors handy, and your Google tools also!

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Legal Geek No. 54: DC Defends the Superman Trademarks with Vigor!

Welcome back to Legal Geek. This week, we take a look at how DC Comics is continuing to defend the long-standing trademarks in Krypton and Kryptonite against the forces of evil, AKA, trademark dilution.

https://archive.org/details/LegalGeekEp54

Superman started as a comic book in 1938 but further trademarks were developed in 1943 for Krypton and Kryptonite, which of course is the fictional material capable of weakening the Man of Steel. Krypton is a real element on the periodic chart as well as Superman's home planet, but that has not stopped DC Comics from continuing to actively use the mark and establish continued rights of the trademark (via secondary meaning to consumers, if nothing else).

As we've covered before on this segment, part of properly maintaining trademark rights is stopping others from cutting in on the mark and diluting it, such as by confusing consumers about the source of goods and services. The battle likely never ends with marks like Krypton, which have scientific as well as fictional roots. Just this month, DC Comics has actively engaged in legal disputes with two potential competitors using Krypton or Kryptonite marks.

In October 2014, Ravensmoon Productions filed a trademark application to register the Kryptonite Vapor mark and logo that the company uses with electronic cigarette refill cartridges. This product has been sold since 2013 using the mark without much fuss from DC. But many times, the application for a trademark is precisely what causes an original trademark holder to more vigorously defend their own rights, and that's what happened here.

DC Comics recently filed an opposition in the US Trademark Office against the allowance of Ravensmoon's application, and it looks Ravensmoon has no interest in a fight with the Man of Steel. They have announced on their website that the product formerly known as Kryptonite Vapor is now sold as Ravens Moon Vapor. So fear not, citizens of Metropolis, your teenagers won't be confused about whether their favorite vaping cartridges are officially licensed by DC Comics anymore.

While Ravensmoon may be a smaller company not willing to take on the likes of DC Comics, a much bigger company is also now at odds with this Superman IP in a similar fashion. Just this week, DC Comics filed an extension of time to oppose Chevrolet's own trademark applications for Krypton and Camaro Krypton in a class that covers automobiles. This trademark application has led to some rampant speculation about what project Chevrolet has in mind for these trademarks, including some assumptions that it has something to do with DC Comics (which clearly we now know is not the case).

Unlike some other DC superhero like Batman and his bat mobile, there's not an immediate obvious tie between Superman and automobiles. However, the mark is 70 years old and is so strong that consumers very well may assume at this point that Chevy's use of Krypton has something to do with DC Comics. That's the open question that will need to be decided by the Trademark Office or a court if DC Comics goes forth with an opposition or a trademark infringement lawsuit.

It will be fascinating to see what this project is, if it ever sees the light of day, and whether these two mega companies are willing to make a deal over this famous Superman IP. Keep an eye on these giants and the potential rare trademark battle between relative equals as far as legal backing and funding go.

Bottom Line: we can learn a lot from watching creative companies like DC Comics defend trademarks like the Superman IP, and one of this life lessons is to avoid filing trademarks that compete like Ravensmoon and Chevrolet has unless you are ready to fight a tough legal battle.

Until next time, don't go leaping buildings in a single bound without requesting a license from DC Comics.

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Legal Geek No. 53: Work Smartphones and Self-Incrimination

Welcome back to Legal Geek. This week, we review an interesting decision from a Federal Court in Pennsylvania about personal smartphone passwords and whether they are protected under the 5th Amendment.

https://archive.org/details/LegalGeekEp53

The 5th Amendment of the U.S. Constitution provides a number of rights, including the right of a defendant to not be compelled in a criminal case to self-incriminate oneself. Some of the interesting exceptions and limits to this rule were invoked this week in a case involving the Security and Exchange Commission and two defendants being prosecuted for possible insider trading.

More specifically, two former employees of Capital One are being investigated by the SEC for allegedly making over $2.8 million dollars trading on advance company earnings information gained as a part of their former jobs as data analysts for the bank. What led to the ruling this week was the fact that Capital One issues company-owned smartphones for employees, and the SEC wants to access the information on the former employees' phones to scour for incriminating evidence to prove the insider trading occurred.

But the fact that turned this ruling is this: Capital One has employees pick their own private passwords for the phones, and it is company policy to not have employees give this password to the company for security reasons. So even though these employees returned the phones to Capital One when they were fired a few months ago, Capital One cannot access the information stored on these smartphones because the former employees are the only ones who know the password.

The SEC argued under a rule called the collective entity doctrine that these were corporate records possessed by former employees, which are generally not protected by the 5th Amendment. But the court ruled that the confidential passwords chosen and maintained by the former employees could not be deemed corporate records since only the former employees know that information. Indeed, the fact that Capital One asks employees to not keep records of these personal passwords is directly contrary to assuming this is something owned by the corporation.

The SEC then tried to argue a different exception to the 5th Amendment applied, the so called foregone conclusion doctrine. That doctrine causes information to not be shielded from 5th Amendment protection when the government already knows of its existence and location. However, the court disagreed with this argument because the SEC is really on a fishing expedition, and the government agency doesn't know absolutely for certain that incriminating information is on those phones.

So the company and the government both do not have any rights to access data protected by personal passwords kept secret by the former employees and current defendants. The 5th Amendment protects the former Capital One employees from potential self-incrimination based on whatever was stored on those company phones.

The Bottom Line is, despite the 5th Amendment winning the day with these facts, one would be wise to limit all types of personal information you put on company property, whether the computer or smartphone has private personal passwords or not. It can only lead to tough situations if a firing ever occurs.

Until next time, stay smart with personal privacy and hope you never have to rely on the criminal protections offered in the Constitution.

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Legal Geek No. 52: Happy Birthday in Public Domain, and Copyright Terms

Welcome back to Legal Geek. This week, we take a look at the biggest piece of music to hit the public domain of copyright perhaps in history, which happened thanks to a court decision earlier this week. That song, of course, is...Happy Birthday!

https://archive.org/details/LegalGeekEp52

On Tuesday, a California federal court ruled that Warner Music Group no longer holds a valid copyright in this iconic Happy Birthday song. This will end a licensing revenue stream from filmmakers and other users of about $2 million a year, thanks to it costing about $1,500 to acquire a single license from Warner for this property. The decision was based on new fact findings that the company which Warner acquired these rights from in 1988 had only ever gotten a copyright in the melody, not the words, and the melody is too old to still be covered by current copyright terms.

Thus, one of the biggest licensed properties in music is now in the public domain, subject to Warner's appeal of course. But other than the appeal, there are still a couple of interesting questions left.

First, this decision will likely cause further scrutiny in chain of title documents that explain how IP rights like copyrights were sold and transferred all the way from the original owner to the current owner. With copyright rights lasting up to and over a century now, these documents can be difficult to maintain or acquire, leading to decisions like the one against Warner. The documents always win in the legal field.

Second, this decision makes the lyrics of Happy Birthday into an orphan work, which is a term commonly applied to works that are not technically in the public domain but nobody can figure out who actually owns the rights. As copyright terms have extended more and more thanks to Congress, we now have copyright terms of life of author plus 70 years for individuals, and 95 or 120 years for corporations. That makes it very hard to find rightful owners of copyrights that do exist on very old works, a problem that grows more and more with copyright term extensions. One wonders how this iconic property joining the ranks of Orphan Works will affect the debate the next time extension of copyright terms come up, which will likely be soon thanks to the corporate interests of Disney and similar organizations.

The Bottom Line is, we can all finally sing Happy Birthday on YouTube without risking a nasty license demand, and that's a good thing in the face of the crazy long copyright term in the U.S.

Until next time, don't feel too bad for Warner, as this week they also got another federal court ruling that the Batmobile is a protectable character under copyright. Of course, it will likely be hard to make $2 million a year licensing the Batmobile...but holy copyright law, Batman!

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Legal Geek No. 51: Dancing Baby Wins Under DMCA (Sort Of)

Welcome back to Legal Geek. This week, we review the important copyright decision rendered this week by the 9th Circuit Court of Appeals in Lenz v. Universal Music, also referred to as the Dancing Baby DMCA Takedown case.

https://archive.org/details/LegalGeekEp51

Stephanie Lenz is a mother who posted a YouTube video in 2007 of her toddler dancing to a Prince song, which became a viral video. (Insert clip of Prince) On Monday, a panel of 9th Circuit judges decided that Lenz had the right to force Universal Music Group to trial to determine whether that music industry organization had properly considered fair use before sending a DMCA takedown notice in 2007 to force the video off of YouTube.

The DMCA, or Digital Millennium Copyright Act, refers to a 1998 law which heightened penalties for copyright infringement on the Internet, while also adding an exemption from liability for internet service providers like YouTube from liability. The DMCA creates a safe harbor for those service providers who comply with proper takedown notices when a copyright owner asserts content posted is infringing their valid copyright.

The DMCA takedown process works like this: a copyright owner has an agent sent a DMCA takedown notice to a service provider like YouTube, as was the case here where Universal represented the interest of copyright holders to the Prince song used in Lenz's video. If this notice complies with language requirements and is specific enough, the service provider must remove the content and has the option to file a DMCA counter notice if it is believed that it has the rights to publish the content. When this happens, the original submitter of the takedown notice must take the fight to court within 10-14 days, or the content can be republished on the website or service.

In this case, Universal had argued that fair use in copyright is only an affirmative defense and that it was not necessary to worry about this concept when requesting DMCA takedowns. The Court disagreed, indicating that failure to consider fair use before issuing a takedown notice would make a triable question of whether a subjective good faith belief was present that the work was actually infringing the copyright asserted. Although Universal could still avoid the nominal damages that could be awarded for bad faith takedown notices under DMCA by proving it considered fair use, that at least must go to trial to be proven, which is a small win for the plaintiff Lenz.

So does this decision mean the largely automated process of scanning online content and sending mass DMCA takedowns by big companies like record labels and movie studios will no longer work? Not so fast, my friends.

Fair use is a complicated 4 factor balancing test of copyright law which balances various equitable factors like nature of the alleged infringing work and amount of content taken to determine if re-using a copyrighted work is protected as a fair use. It's a complicated topic in and of itself that we will save for another day.

Although it could be argued that computerized algorithms really only consider one of these factors, namely the amount of the work copied, it will likely be difficult to argue that these scanning algorithms are ignoring fair use altogether (assuming the filter applied would let some content through without prompting a DMCA takedown notice). Yet that is what will be required to prove a lack of considering fair use, which would lead to improper takedown notice damages for the copyright owner. Put simply: it will be exceedingly difficult to stop copyright owners from proving a good faith belief when they file takedown notices that are later challenged as improper.

The Bottom Line is, computerized or automated review of online content and mass DMCA takedown notices are here to stay, like it or not. This decision in Lenz clarifies how DMCA conflicts in court will play out when they occur, but it is not a sweeping enough change to dramatically alter how copyright owners do business to protect their IP in today's online marketplace.

Until next time, don't rail against the DMCA process too much, as it does strike somewhat of a good balance between online content creators and those copyright owners with legitimate rights to protect.

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Legal Geek No. 50: SCOTUS Gay Marriage in Obergefell: One for the History Books

Welcome back to Legal Geek. This week, we review the second of the two highlight decisions of the most recent Supreme Court term, which is Obergefell v. Hodges, all about gay marriage. I will also explain why I think this decision, while deemed as groundbreaking as Roe v. Wade and Brown v. Board of Education, is actually less important today than the healthcare decision we covered last month.

https://archive.org/details/LegalGeekEp50

Coming back from Nerdtacular, it strikes me that decisions like Obergefell is built on similar principles as our Frogpants, tadpool, diamond club etc. community. Regardless of your politics and beliefs, there's no denying that the decision to legalize marriage for all persons regardess of sexual orientation is a move for equal treatment of more people, and when we follow the Golden Rule and treat people equally, good communities tend to result.

The decision was based on the Equal Protection clause and due process under the 14th Amendment. The due process clause stops the government from depriving citizens of life, liberty, or property without due process of law. Many previous Supreme Court decisions have deemed "liberty" under the due process clause to include the fundamental rights to marry and have private sexual relations.

This includes decisions protecting interracial marriage in Lawrence v. Texas, protecting the right of prisoners to marry in Turner v. Safely, and protecting the rights of women as equals in marriage in multiple 1980's decisions. Furthermore, Obergefell was a logical extension of the decision 12 years ago making sodomy laws unconstitutional for infringing the liberty of gay people, and the decision 2 years ago to overturn the Defense of Marriage Act, which was just enacted to limit marriage to one man and one woman in 1995!

Furthermore, even Justice Kennedy, who wrote the majority opinion, noted that public opinion was already moving in the same direction as this decision. Thus, this was just the next logical step based on court precedent as well as public opinion.

The right to marry has long been established as a fundamental right, which means there must be a compelling government interest to restrict this liberty. The states argued that the compelling government interest was keeping bonds between biological parents and their children, but this was gutted during oral argument by noting that not all marriages are intended to result in children, and adoptions are just as likely for homosexual couples as for heterosexual couples. There just was not enough argument for leaving this decision to the states instead of applying the Equal Protection clause.

So gay marriage is now legal in all states. The reason I believe this is not as big a deal as the healthcare decision is because healthcare would have gone away completely had that decision gone the other way and perhaps have never come back, while public opinion was eventually going to result in most if not all states reaching this conclusion about gay marriage. Furthermore, this is one small step in the large scale of obtaining equal rights for all parts of the LGBT community, as evidenced by the just-beginning public awareness and discussion of transgender people, so there's still a long way to go here.

The Bottom Line: for at least this court watcher, the decision to uphold Obamacare is a bigger deal than legalizing gay marriage, but both cannot be denied as highly memorable decisions that definitely craft the future of this country, and that is fun to watch, regardless of if you agree with the decisions or the logic.

Until next time, let's continue to strive for and make communities that treat everyone equally and with compassion, as that will make the world a more positive place to be in.

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Legal Geek No. 49: Amazon Search Functionality vs. Trademark Law

Welcome back to Legal Geek. This week, we take a look at a recent Ninth Circuit Court of Appeals Decision that may change the way online retailers do business, all in the name of a stronger trademark law.

https://archive.org/details/LegalGeekEp49

The case was Multi Time Machine vs Amazon, and the decision was handed down earlier this month. Multi Time Machine makes high end military style watches under certain brand names and trademarks like MTM Special Ops. Because MTM closely controls its own distribution, these watches are not available at places like Amazon.

However, when consumers type in MTM Special Ops Watch or similar searches into Amazon's search system, the internal search engine returns a list of other multi-function watches from MTM's competitors, but no statement is made that Amazon does not carry MTM watches. In other words, Amazon tries to be helpful for consumers looking for a type of goods. The only difference from other online retailers is that Amazon does not explicitly respond first with a statement that MTM watches are not available at Amazon.

When MTM sued Amazon for trademark infringement, citing consumer confusion in this process, the Federal District Court ruled in favor of Amazon. But the appeals court reversed this decision, with a 2-1 majority revitalizing a doctrine called initial interest confusion. This is a trademark doctrine that was thought dead in most jurisdictions, but the Ninth Circuit defined it as follows: "initial interest confusion occurs not at the time of purchase, but earlier in the shopping process if the customer confusion creates initial interest in a competitor's product."

If that definition sounds ridiculous, it's because it is. That would cover many other clearly legitimate and long-accepted retailing practices like selling house branded products with similar labeling adjacent to name brand products. The dissenting judge put it best when he responded that "the search results page makes clear to anyone who can read English that Amazon only carries the brands of watches that are clearly and explicitly listed on the web page, as the search results page is unambiguous."

So apparently the fluffy doctrine of initial interest consumer confusion still lives, which means this zombie doctrine could come back to bite unsuspecting litigants. What's most disappointing is that this case is better formulated as a "bait and switch" false advertising claim if anything, but the Ninth Circuit validated the trademark claim by making the law bend to the facts.

On the bright side, the opinion is limited to the Ninth Circuit along the western coast of the U.S. and is also likely limited on its face to internal search functionality of online retailers like Amazon, which makes it easy to design around. Plus, this was just a panel decision sending the case back to a jury, which could still determine that there is no actual consumer confusion here. Worst case scenario, this doctrine could still be gutted by a full en banc panel of the entire Ninth Circuit or even taken to the Supreme Court, if necessary.

Bottom Line: Trademark law serves the interests of business owners and consumers, but it has reasonable limits. When it doesn't, as in this case, it harms businesses trying to help consumers as well as consumers in the long run.

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