Implementing the Orphan Works Directive: the case of Hungary

There is little doubt that 1709 Blog readers will be spending the coming months (especially the forthcoming holidays/end of year celebrations) thinking about future national implementations of Directive 2012/28/EU on certain permitted uses of orphan works [the Orphan Works Directive. By the way: have you remembered to vote in the IPKat/1709 Blog joint poll? You can find it on the left hand side of the IPKat sidebar poll]. 

Some Member States have already taken steps to implement the Directive into their national laws. 

Hungary is one of these, as 1709 Blog friend and copyright enthusiast Péter Munkácsi (Hungarian Ministry of Justice and Public Administration) reports:

"Act CLVIX. of 2013 (also known as 2013 II. IP Amendment Act) contains provisions (Articles 5, 16, 24, 26 ('EU clause') and 27 b)) that have amended Hungarian copyright law to implement part of the Orphan Work Directive. All changes will entry into force on 29 October 2014 [this is also the deadline for national implementations of the Directive, as its Article 9 states]. The second phase of the implementation will continue soon. In fact, Article 25 of the 2013 II. IP Amendment Act authorises the Government to determine detailed rules on uses of orphan works, circumstances relating to fair compensation, register issue, etc.

Since 2009 Hungary has had an orphan works scheme, whose main features include the following:

·         On the basis of the extended licensing system managed by collective management organisations users can obtain licenses for the use of orphan works. However, the rights in works which are under collective rights management are excluded from the scope of the orphan works licensing scheme;

·         Granting licences for the use of an orphan work is within the competences of the Hungarian Intellectual Property Office (HIPO). Licences for the use of orphan works may only be granted for a term not exceeding five years, are only valid in Hungary, and are non-exclusive and non-transferable;

·         Hungarian legislation provides for a publicly available administrative register on orphan works, which is administered by the HIPO;

During the various stages which eventually led to the [partial] implementation of the Directive, an examination was undertaken as regards existing licensing scheme and its relationship with the forthcoming exception or limitation to the rights of reproduction and making available to public, pursuant to Article 6 of the Directive. 

As a result of this reflection, the Act introduces a new Chapter IV/A in the Copyright Act with the title “Uses of Orphan Works”. This Chapter is divided into 3 sub-chapters: (i) General Provisions; (ii) The Licensing for the Use of Orphan Works; (iii) The Use of Orphan Works by Beneficiary Institutions.

Under the “General Provisions”, new Article 41/A(1) defines what orphan works are. The definition complements the elements of the existing licensing system with circumstances relating to the notions of diligent search and good faith. A work or other subject matter shall be considered an orphan, if its rightsholder cannot be identified or located, following an unsuccessful search carried out diligently and in good faith. A separate piece of legislation (to be adopted at the stage of further implementation) will determine the sources which are appropriate for the conduction of a diligent search.

An infamous case of restoration

The main part of the implementation of the directive is “The Use of Orphan Works by Beneficiary Institutions” sub-chapter. Beneficiary institutions (publicly accessible libraries, educational establishments, museums, archives, picture or audio archives, and public media service provider radio and television organisations) will be allowed to use orphan works contained in their collections (archives) for the purpose of digitising and making them available to the public without the need of a licence, if these uses are made in accordance with their public-interest missions, and are intended for the preservation and restoration of, or educational and cultural access to their collections.  

   

Among other things, orphan works include phonograms, cinematographic works or other audiovisual works produced by the public media service provider radio and television organisations up to 31 December 2002 and included in their archives. These works shall be those first published in the EEA or, in the absence of publication, first broadcast in the EEA.

Beneficiaries can   

(i)      make orphan works available to the public in a way that allows the members of the public to choose individually the place and time of access;

(ii)     reproduce orphan works freely for the purposes of digitisation, making available to the public as is stated above, indexing, cataloguing, preservation or restoration.

Public/private partnerships will be possible, in compliance with Article 6(4) of the Directive."

The CopyKat - Fridays fun furballs

The European Parliament’s Legal Affairs Committee has voted unanimously to adopt the Collective Rights Management Directive which would allow online providers to obtain copyright licenses to stream music across E.U. borders. Currently, companies wanting to offer such services must obtain copyright licenses from 28 different member states. The proposed law would allow for a small number of authors’ collective management organizations to operate across EU national borders. “Today’s vote demonstrates that, contrary to some misconceptions, all political groups acknowledge that copyright is compatible with the digital age and can easily adapt to it,” said Marielle Gallo, the French member of Parliament who crafted the law. The full Parliament will vote on the proposed rules in early 2014.

An update on the Beastie Boys spat with toy company GoldieBlox which featured in our last CopyKat update.. In a letter back to the band published on the company's website, GoldieBlox founder Debbie Sterling writes: "We don't want to fight with you. We love you and we are actually huge fans ... Our hearts sank last week when your lawyers called us with threats that we took very seriously. As a small company, we had no choice but to stand up for ourselves. We did so sincerely hoping we could come to a peaceful settlement with you". She continues saying that GoldieBlox still believed that it was within its rights to use the song under Fair Use, but having not been aware of Yauch's wishes previously, would remove it from the advert. "In addition", she said, "we are ready to stop the lawsuit as long as this means we will no longer be under threat from your legal team". Miri Frankel has posted a more detailed look at Fair Use - in this case parody - over on the IPKat website and it's well worth a read http://ipkitten.blogspot.co.uk/2013/11/the-beastie-boys-claim-copyright.html. My own take remains it's an advert - albeit a clever advert which did spark a public debate - and which does indeed parody the original song - but a parody for commercial gain. 

And an update on Robin Thicke's problems - Marvin Gaye's eldest son, Marvin Gaye III, has launched a new lawsuit against Robin Thicke, similar to, but separate from the one launched by his siblings Frankie Christian and Nona which alleged similarities between Thicke's controversial summer hit 'Blurred Lines'  and Gaye's 'Got To Give It Up' - and that Thicke's track, 'Love After War' takes elements of Gaye's 'After The Dance'. According to The Hollywood Reporter, Gaye III's new lawsuit says: "Thicke's 'Blurred Lines' is copied from Marvin Gaye's 'Got To Give It Up', Thicke's 'Love After War' is copied from Gaye's 'After The Dance', Thicke's 'Make U Love Me' is copied from Gaye's 'I Want You'), and Thicke's 'Million Dollar Baby' is copied from Gaye's 'Trouble Man'.

The Guardian reports that a freelance designer who says his work was stolen by an advertising agency working on the Hollywood remake of cult thriller Oldboy has written an open letter to director Spike Lee asking him to intervene. Juan Luis Garcia says posters based on his designs are being used to promote the film, which is released this weekend in the US, despite the fact that he has not been paid for his work or agreed to their use. He says the unnamed agency involved made an "insultingly low offer" when it decided to use his designs, and continued to use them when he declined their offer.

A Plymouth licensee has been convicted of the illegal use of Sky TV after his original acquittal by Magistrates was overturned by the High Court. The Morning Advertiser reports that Stanley Ashton did not have a commercial licence for Sky TV for his pub but showed live football matches from his domestic subscription. The Federation Against Copyright Theft (FACT) appealed the decision and when the case was returned to Plymouth Magistrates Court where Ashton received a two year conditional discharge and ordered to pay £850 costs.

Breaking News: Film Producers and Distributors Obtain Site Block from Paris Court

The Paris Tribunal de Grande Instance (High Court or Distrcit Court) gave its long awaited ruling yesterday in the Allostreaming matter.

Back in December 2011, a group of rights holders for cinematic works (producers and distributors) brought proceedings under Section L.336-2 of the French Intellectual Property Code (which implements Article 8 (3) of the 2001 EU Copyright Directive) seeking an order against ISPs and search engines to prevent access to the notorious Allostreaming website and related sites (which gave access via streaming to a multitude of works without proper authorization).

The Court found that the impugned websites did indeed infringe copyright (unauthorized communication to the public).  It ordered the ISPs to implement the necessary measures to prevent access to a defined list of websites (for 12 months).  The ISPs were ordered to do so by any efficient means and in particular by means of blocking the domain names.  It ordered the search engines to take the necessary steps to prevent the appearance on their services of any result linking to the infringing websites (for 12 months).  In both cases (ISPs and search engines) the Court noted that the plaintiffs could return to Court for an updated order in the event of a change in the circumstances (such as modified domain names).

The Court however rejected the plaintiffs' request that the costs associated with the blocking measures be borne by the ISPs and the search engines.

This decision, handed down just two days after the AG's opinion in the UPC  Telekabel case, adds to the developing case law under Article 8 (3) of the 2001 EU Copyright Directive and Member States' implementing legislation.

In the deserts of Sudan and the Gardens of Japan, From MIlan, to Yucatan, the CopKat is in the can

A split panel of the Federal 9th Circuit Appeals Court has confirmed that DC Comics and its parent company Warner Brothers own the copyrights to Superman, with the court noting that it was ending "another chapter in the long-running saga regarding the ownership of copyrights in Superman - a story almost as old as the Man of Steel himself".  Heirs of Superman co-creator Joseph Shuster filed a copyright termination in 2003 in a move to reclaim rights Shuster had sold to DC Comics in 1938. U.S. District Judge Otis Wright in Los Angeles ruled for DC, finding that a 1992 agreement signed by Shuster's siblings, from which they received lifetime pensions from DC, had revoked a previous 1938 contract. Dissenting panel member Judge Sidney Thomas said that the record was "not sufficient to establish that Joe Shuster's siblings had the authority in 1992 to revoke and supersede his 1938 copyright grant" saying that copyright law in 1992 was such that "no one except the surviving spouse or child could exercise the right of termination"  and that it was not until 1998, "six years after the parties executed the agreement at the center of this appeal," that "Congress extended the termination right to authors' executors, administrators, personal representatives, and trustees".

More on DMCA takedown notices being used to stifle free speech.  Gordon Klingenschmitt, a former Navy chaplain running for office in Colorado had already used the YouTube's takedown system to kill the account of Right Wing Watch, a group that was critical of Klingenschmitt and his politics. TechDirt report that earlier this week, YouTube restored Right Wing Watch's account, after "realizing that he [Klingenschmitt] was clearly using their copyright takedown system to stifle criticism, not for any legitimate copyright purpose." Klingenschmitt then immediately filed yet another "bogus" copyright claim with YouTube, getting their account taken offline again. Moves are afoot to ask YouTube to revitalise it's systems to prevent serial takedown abusers taking accounts offline - and let's not forget those s512(f) actions under the DMCA for false takedowns which can result in damages and legal costs for the injured and non-infringing party - and we blogged about these here - certainly something for Right Wing Watch to consider if Mr Klingenschmitt is indeed materially misrepresenting infringement. Our earlier blog on copyright and free speech here.

The Beastie Boys are seemingly less than impressed with a 'parody' produced by a new toy company called Goldieblox - a video of three girls playing with a Rube Goldberg-type invention and singing alternative lyrics to the Beastie Boys song "Girls." Since the video went up online it has been viewed more than seven million times. Having received a letter alleging copyright infringement, Goldieblox are now seeking declaratory relief in the federal court in the United States District Court in the Northern District of California. It seems lawyers for the Beastie Boys claim that the GoldieBlox Girls parody video is a copyright infringement, is not a fair use and that GoldieBlox's unauthorised use of the Beastie Boys intellectual property is a 'big problem' that has a 'very significant impact.' It might be one to watch as clearly the 'parody' is to promote a commercial concern and sell toys - although it may well have also stoked up a debate on young girl's interest in science and scientific careers. In the original song, the Beasties sang: "Girls -- to do the dishes/ Girls -- to clean up my room/ Girls -- to do the laundry/ Girls -- and in the bathroom/ Girls, that's all I really want is girls." The video replaces those lyrics with: "Girls -- to build the spaceship/ Girls -- to code the new app/ Girls -- to grow up knowing/ That they can engineer that/ Girls. That's all we really need is girls." Despite the fact the video really is a very clever advert for 'toys for future engineers', GoldieBox say that they created the video with specific goals to make fun of the Beastie Boys song, and to further the company's goal to break down gender stereotypes and to encourage young girls to engage in activities that challenge their intellect, particularly in the fields of science, technology, engineering and math. The GoldieBlox Girls Parody Video has gone viral on the Internet and has been recognized by the press and the public as a parody and criticism of the original song." Responding to that claim, Beastie Boys have now said that they simply contacted the company to discuss the matter, because while they agree with the sentiment of the commercial, they do not allow their music to be used in any adverts ever. In fact Adam Yauch who died recently felt so strongly about this that he had it written into his will.  In an open letter to the company, published in the New York Times, surviving members Mike D and Adam Horowitz said: "Like many of the millions of people who have seen your toy commercial 'GoldieBlox, Rube Goldberg & the Beastie Boys', we were very impressed by the creativity and the message behind your ad. We strongly support empowering young girls, breaking down gender stereotypes and igniting a passion for technology and engineering". However, they continued: "As creative as it is, make no mistake, your video is an advertisement that is designed to sell a product, and long ago, we made a conscious decision not to permit our music and/or name to be used in product ads. When we tried to simply ask how and why our song 'Girls' had been used in your ad without our permission, YOU sued US".

Two of the world's biggest news agencies, Getty Images and Agence France-Presse, have been ordered to to pay $1.2 million to a freelance photojournalist for their unauthorized use of photographs posted to Twitter. The jury found that AFP and  Getty wilfully violated the US Copyright Act when they commercially used photos Daniel Morel took in his native Haiti after the 2010 earthquake that killed more than 250,000 people and which had been made available to the public through social media. U.S. District Judge Alison Nathan had already found the two agencies liable for infringement and the trial was to set the level of damages - the jury set the maximum allowable despite the fact AFP had argued the the editor who took the pictures made an innocent mistake, and had thought the pictures were available for reuse. AFP argued that the Twitter user who posted Morel's photos without attribution bore responsibility for the error. 

Hit Me With Your Rhythm Stick is by Ian Drury & The Blockheads

UPC Telekabel v Constantin and Wega: AG opines on site blocks

It's not yet available in English, and our colleague Eleonora has already put it centre-stage with her stunning breaking news post on the IPKat, but this morning's publication on the Curia website of Advocate General Cruz Villalón’s Opinion in Case C-314/12 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH und Wega Filmproduktionsgesellschaft GmbH deserves notice on this blog too, if only so that people checking its database of notes on rulings and opinions will see that we haven't forgotten it. Fortunately the Curia website carries a media release on today's Opinion, reproduced here in relevant part:

"According to Advocate General Cruz Villalón an internet provider can be required to block access by its customers to a website which infringes copyright

Such a court injunction must refer to specific blocking measures and achieve an appropriate balance between the opposing interests which are protected by fundamental rights

According to EU law, Member States are to ensure that copyright holders or holders of related rights are able to apply for an injunction against intermediaries whose services are used by a third party to infringe their rights [referencing Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society]. It is already established that internet providers ["Internet access services", referring to Case C-557/07 LSG-Gesellschaft zur Wahrnehmung von Leistungsschutzrechten and Case C-70/10 Scarlet Extended. The same applies to operators of social networking platforms: see Case C-360/10 SABAM] can in principle be regarded as intermediaries and therefore as persons against which such injunctions, which are aimed at bringing to an end infringements already committed and at preventing further infringements, can be granted. In practice, the operators of illegal websites and the internet providers which make them available online are frequently based outside Europe or conceal their identity, making it difficult to pursue them before the courts.

The Austrian Oberster Gerichtshof ... seeks to ascertain ...  whether a provider which provides internet access only to users of an illegal website is to be regarded as an intermediary in that sense, that is to say as an intermediary whose services are used by a third party – such as the operator of an illegal website – to infringe copyright, meaning that an injunction can also be granted against it. It also seeks clarification of the EU rules on the content and procedure for the issuing of such an injunction.

The Oberster Gerichtshof is called upon to decide ... in respect of a legal dispute between UPC Telekabel Wien, a major Austrian internet provider ... and Constantin Film Verleih and Wega Filmproduktionsgesellschaft .... On application by Constantin Film and Wega, the courts ... granted an interim injunction – in the case of the appellate court without mentioning specific measures to be taken – prohibiting UPC from allowing its customers to access kino.to. By accessing that website, users were able to view by streaming or to download films the rights in respect of which are held inter alia by Constantin Film and Wega, without their consent [In June 2011.... kino.to closed after the German prosecuting authorities took action against its operators]. UPC has no legal relationship with the operators of the website and made neither internet access nor storage space available to them. According to the ... Oberster Gerichtshof, it can, however, be assumed with near certainty that individual UPC customers availed themselves of the kino.to offer.

In his Opinion today, Advocate General Pedro Cruz Villalón takes the view that the internet provider of the user of a website which infringes copyright is also to be regarded as an intermediary whose services are used by a third party – that is the operator of the website - to infringe copyright and therefore also as a person against whom an injunction can be granted. That is apparent from the wording, context, spirit and purpose of the provision of EU law.

The Advocate General is also of the view that it is incompatible with the weighing of the fundamental rights of the parties [the fundamental right of the copyright holder to property vresus the provider’s freedom to conduct a business and its customers’ freedom of expression and information, on which the provider can also rely] to prohibit an internet service provider generally and without ordering specific measures [eg an IP block, where requests are no longer forwarded to the blocked IP address, or a DNS block. DNS (Domain Name System) blocks concern domain names which are used instead of unwieldy IP addresses by users. DNS servers, which are operated by every provider, ‘translate’ domain names into IP addresses. In the case of a DNS block, such translation is prevented] from allowing its customers to access a particular website that infringes copyright. That also applies where the provider can avoid incurring a penalty for breach of that prohibition by showing that it has taken all reasonable steps to comply with the prohibition. Advocate General Cruz Villalón underlines in that connection that the provider of the user has no connection with the operators of the website that infringes copyright and has not itself infringed the copyright.

However, a specific blocking measure imposed on a provider relating to a specific website is not, in principle, disproportionate only because it entails not inconsiderable costs but can easily be circumvented without any special technical knowledge. It is for the national courts, in the particular case, taking into account all relevant circumstances, to weigh the fundamental rights of the parties against each other and thus strike a fair balance between those fundamental rights. When weighing the fundamental rights it must however be taken into account that in future action could be taken in numerous similar cases against any provider before the national courts. Advocate General Cruz Villalón also points out that rightholders must, in so far as possible, claim directly against the operators of the illegal website or their providers".

Court of Appeal upholds High Court decision in SAS v WPL

SAS v WPL is an on-going saga which has been to the High Court, the CJEU, back to the High Court and now to the Court of Appeal. The facts of the case are not simple. They are set out in detail in Arnold J's first High Court decision, but by way of reminder:

Add caption

SAS Institute Inc. (SAS) developed the SAS system, which enables data processing and analysis tasks. A key aspect of the SAS system is that users can write and run their own applications to use the system to manipulate data. These programs had to be written in the SAS language, a programming language developed by SAS meaning that users were then tied to the SAS system to run their own applications.

The defendants are World Programing Limited (WPL), creators of World Programming System, a system which replicated the functions of the SAS components. Crucially, World Programming System was compatible with the SAS language meaning that users were no longer tied to SAS and could use their own applications with World Programming System instead of the SAS system.

 WPL created World Programming System by studying a Learning Edition of the SAS system (supplied under licence) and by consulting SAS's manual. There was no allegation that WPL had access to, or copied, SAS's source code.

A summary of the CJEU's answers and the High Court's subsequent decision can be found here.

Court of Appeal - appeal dismissed

Last week the Court of Appeal dismissed SAS's appeal. Lord Justice Lewison said:

"Although I disagree with some of the judge's reasoning, those disagreements do not affect the ultimate result. Since the appeal is an appeal against the judge's order rather than against his reasons, I would dismiss the appeal."

Without going through each point in the Court of Appeal's decision as to why they agreed with the outcome if not the reasoning of the High Court, it is interesting to consider Lord Justice Lewison's observations on the intellectual creation test.

The intellectual creation test

Readers may recall that one of the more interesting aspects of Arnold J's decision was his use of the "intellectual creation" test rather than the "skill, labour and judgment" test when considering the originality of a programming language. Assuming a computer language is not a computer program, this implied that the test for originality is harmonised for all works rather than just for computer programs, databases and photographs.

More interesting still, Arnold J said that even if he had found that a programming language could be an intellectual creation, it did not follow that it had to be a work, clarifying that the 8 categories of protected works set out at s.1(1) CDPA were still relevant: the CJEU's broader definition of a copyright protected work still did not apply in the UK.

The concept of an intellectual creation was discussed in the Court of Appeal's decision at great length. At paragraph 30 Lord Justice Lewison confirms that the CJEU has taken an expression used in one directive ("intellectual creation" which is used in the Software Directive) and applying it to another (the Information Society Directive). It does so, he says, in order to establish "a harmonised legal framework for copyright".

He then goes on to consider what constitutes an intellectual creation. The essence of the term, he says, is that "the person in question has exercised expressive and creative choices in producing the work. The more restricted the choices the less likely it is that the product will be the intellectual creation (or the expression of the intellectual creation) of the person who produced it."

Lord Justice Lewison then says that the test, "intellectual creation" may not be quite the same as the traditional test under English law. He compares the fact that in the UK databases were by copyright as they contain "labour, skills or effort" before the Database Directive harmonised protection. In most European countries databases were not intellectual creations therefore were not protected. Therefore, he says:

"If the Information Society Directive has changed the traditional domestic test, it seems to me that it has raised rather than lowered the hurdle to obtaining copyright protection."

This is an interesting conclusion as many see the "intellectual creation" test generally being broader than the "labour, skill and judgment" test. I would be interested to know which test readers think is broader?

We then go on to application of this test, and to this blogger this is where the judgment has missed a step: we are never told whether the "intellectual creation" test, as it is to be applied in the UK, is the test for originality or the test for a protected work.

By comparing "intellectual creation" with "skill, labour and judgment" it seems that Lord Justice Lewison was referring to the test for originality. This is confirmed by his view that "intellectual creation" is now the test for determining whether a restricted act has been done in relation to a substantial part of a work (i.e. does the part which has been copied contain the author's own intellectual creation?)

Arnold J said at para 34 of his judgment:

"Counsel for SAS Institute argued that the SAS Language was an intellectual creation, and therefore it was a work. In my view that is a non sequitur.  As counsel for WPL pointed out, there are many intellectual creations which are not works…"

The Court of Appeal does not address this point therefore the question of whether in the UK all intellectual creations constitute works protected by copyright remains unanswered.

Idea v expression

A short post-script on another copyright dilemma which is considered in the Court of Appeal's judgment: where is the line between an idea and the expression of an idea? Lord Justice Lewison says at para 60 of his decision that "what is critical is not the intellectual creation but the expression of the intellectual creation". He clarifies later that the functionality of a computer program (in the sense of what it does and how it responds to particular inputs) falls on the ideas side of the line.

He also reiterates the lovely reasoning of Pumfrey J in Navitaire Inc v easyJet Airline Co Ltd:

"Take the example of a chef who invents a new pudding. After a lot of work he gets a satisfactory result, and thereafter his puddings are always made using his written recipe, undoubtedly a literary work. Along comes a competitor who likes the pudding and resolves to make it himself. Ultimately, after much culinary labour, he succeeds in emulating the earlier result, and he records his recipe. Is the later recipe an infringement of the earlier, as the end result, the plot and purpose of both (the pudding) is the same? I believe the answer is no."

 

Conclusion

All that to say that the Court of Appeal agreed with the High Court, and dismissed the appeal, confirming that copyright cannot protect the look and feel of computer programs.

The FatCat CopyKat - it's all about the money

Loads of money!

The economic contributions of U.S. copyright industries reached new heights last year, for the first time contributing more than $1 trillion to the USA's gross domestic product and accounting for 6.5% of the nation's economy. A new report from the International Intellectual Property Alliance, a private coalition representing the Motion Picture Association of America, the Recording Industry Association of America and others in the computer software, video games, books, newspapers, periodicals, radio, TV and journals sectors, says those industries contributed $1.01 trillion in value-added services to the nation's GDP in 2012. The study is apparently based on data from the Bureau of Economic Analysis and other government statistics.

A group of news agencies have reached an out-of-court settlement with a Croatian websitfor more than 50,000 Euros after the wesbite lifted their pictures and re-used them online without credit. The ten independent agencies, all members of the National Association of Press Agencies (NAPA), sued www.tportal.hr after finding photographs had been lifted directly, mostly from Mail Online, with no attempt having been made to obtain a licence or pay for usage. One image agency had invoiced and sent numerous reminders for the usage, but was constantly ignored.

The Hollywood Reporter tells us that the Russian government plans to form an agency in charge of copyright observance amid a series of moves aimed at cracking down on piracy. The Economic Development Ministry has submitted plans for an Agency for copyright control, which is to be formed on the basis of the existing Patent Agency, but will have much broader authority and would be report directly to government. 

Even more money

TorrentFreak reports that the film and music industries, in the guise of the MPAA and the RIAA, have commented on the U.S. Government’s Internet Policy Task Force' Green Paper. Among other things, the group proposed a “recalibration” of penalties for file-sharers, which currently reach $150,000 per shared file. The MPAA and RIAA, among others, have now responded to this suggestion, stating that the current punishments are proportional, and needed to deter others from file-sharing and related offences. More here.



Now here's an interesting story. It seems the company behind blogging website Wordpress is going to bring two actions under s512(f) of the USA's DMCA for receiving allegedly  bogus DMCA notices. Automattic, the company that runs the super popular blog hosting platform WordPress.com, has filed two separate lawsuits against third parties for "knowingly materially misrepresenting" a case of copyright infringement against two Wordpress blogs: Techdirt reports that the first involved an attempt to remove a series of articles on the RetractionWatch site, run by Ivan Oransky and Adam Marcus, that were critical of cancer researcher and physician Anil Potti, who at the centre of a medical research scandal. The second is against the the actions of the British anti-gay campaign group Straight Pride UK whose organisers gave an interview to student journalist Oliver Hotham, then decided that they didn't like the fact that they "sounded like idiots in the interview", and tried to use the DMCA to take down the article which included the quotes they had willingly given to Hotham in a 'press releaase'.  See our previous blog here. Automattic are seeking damages under s512(f). Automattic's General Counsel Paul Siemniski explains that the company, who were criticised for the Straight Pride UK takedown,  feels that it needs to step up and protect freedom of expression and fight back against DMCA abuse: Hotham, whose original interview revealed Straight Pride UK's admiration of Vladimir Putin "for his stance and support of his country's traditional values", says he is "extremely happy" with Automattic's decision.

We must be brief today - its the 50th Anniversary Dr Who show on British TV this evening and the CopyKat must prepare.  We even have friends who have even paid to go to cinemas to watch the (free to air) transmission live on the big screen. The episode, The Day of the Doctor, will also be broadcast in more than 90 countries at the same time as it airs on BBC One tonight. The 50th anniversary adventure stars Matt Smith, David Tennant and John Hurt as different incarnations of the Doctor.

A blogger investigates the TARDIS

And talking of Dr who, as far as we know there has been no resolution to the copyright claim against the Doctor's time travelling 'Tardis' - but it's all good publicity for the BBC (amazing coincidence the timing of that lawsuit  ..... wasn't it ......). In fact the BBC have been sued over the Tardis before - back in 1996 by the Metropolitan Police - and let's not forget the exterior of the Tardis IS a traditional blue London police box: The boys in blue brought a legal action to challenge the BBC's trade mark application for the shape of the box and the name TARDIS. The BBC Prevailed in 2002 and the hearing officer remarked that even if the police had built up any reputation in the blue police telephone boxes (and back in 1953 there were 685 in London), it would have only been in the area of policing and law enforcement and would not have extended into the goods and services which the BBC had applied to use it for adding "I bear in mind that for most of the period since the police call box was taken out of service, the only sight the public at large would have had of this item of street furniture has been in the TV programme Dr Who, provided by the BBC where it is a Tardis, a fictional time travelling machine with the external appearance of a police box."

Orphans and legitimacy revisited: here's a poll

Last Sunday I innocently posted a short note telling readers that my blogging colleague Eleonora had just published an article in the European Intellectual Property Review in which she cast some doubt on the compatibility of the framework for legislating on orphan works in the UK with the Orphan Works Directive and sundry other items of more-than-just-the-UK legislation.  This post has received an unprecedented volume of comments from readers, which has in turn prompted us to run a readers' poll which asks:

"Does the EU's Orphan Works Directive leave Member States completely free to legislate autonomously in the area of orphan works?"

This poll is a joint venture between the 1709 Blog and the IPKat (who is hosting the poll at the top of his home page sidebar). This morning's IPKat carries an explanatory post that discusses the issues in greater detail. If you are new to this debate, or are unsure what it entails, you may find that post helpful.

The poll closes on 15 December. Do participate, please!

"From IP to NP": Copyright and the Future of Open Source

Earlier this month, this blogger had the privilege of attending a two-day conference organised by the Israel chapter of the AIPPI, "From IP to NP", at the Dan Panorama Convention Center, Tel Aviv.  The "NP" here stood for "net profit" and the central theme of the conference was its focus on prospects for not merely creating and protecting but actually commercialising IP -- including copyright.

This blogger could not cover all of the sessions since many of them were offered in parallel, but he was fortunate that Aner Rabinovitz (a lawyer with the Tel Aviv firm of Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.) was able to capture enough notes on the session entitled  "Copyright and the Future of Open Source" to be able to convert them into a blog post -- so here they are (thanks, Aner!):

This session, chaired and moderated by Professor Michael Birnhack of the Tel Aviv University Law Faculty, addressed the hot topic of using and incorporating open source software (OSS) and code in companies' proprietary products. As Professor Birnhack adequately put it in his opening remarks, open source is no longer (just) the "hippy" way of producing and circling code, as nowadays it is considered a legitimate alternative for code conduct and policy, and companies should approach it appropriately.

First to speak was Adv. Haim Ravia (a partner in Pearl Cohen Zedek Latzer Baratz), on "Open & Closed: Combining OSS and Proprietary Software". Adv. Ravia gave a run-down on the basic elements of OSS compared to "closed" copyright software, first and foremost challenging the common misconception that OSS, advocated as being all about "freedom", is actually free to use however we want. Unlike "free beer", the OSS concept of "freedom" actually comes with a price and is actually quite limiting on its users, and in most ways it is much more similar to "closed" copyright software rather than public domain software (e.g., the HyperText Transfer Protocol which most of us know simply as HTTP).

True, while closed copyright software owners maintain exclusive rights for, inter alia, copying, making derivative works and distributing their works, and more often than not are prohibitive with regards to allowing access to the source code as well as using the work for any purpose whatsoever – OSS licensing is usually much more permissive by nature. However, there are a handful of OSS licensing options and regimes, each based on a different concept of "free", and each complemented with a very different set of legal do's and don’ts.

Adv. Ravia pointed out the two major classes/ideologies of OSS licensing:

1. Permissive licences, which refer to basic copyright principles, but express the owner's wishes to waive most of its exclusive rights with simple and usually non-intrusive provisions, such as simply requiring the licensee to attach a short notice to his OSS-incorporated software. This licence class includes such simple and often short OSS standard licences as BSD, MIT, Apache 2.0 and the ever so gladdening WTFPL (Do What The F*** You Want to Public Licence); and –

2. Reciprocal (or "Copyleft") licences, which are based on the notion that "freedom" is best maintained and spread if those enjoying this "freedom" will be bound to allow others to enjoy the same with their own OSS-incorporated works. This condition of reciprocity (commonly referred to as the "Viral Effect") usually entails having to make your proprietary code and your modifications to the Copyleft OSS code available, as well as several other conditions based on the specific Copyleft licence. Unfortunately, the standard licences associated with this class (to name a few, the GPL, LGPL, MPL and Eclipse) are usually quite long and complicated, which often creates challenges for legal professionals advising their clients on the scope and implications of each licence's virality towards the client's proprietary works. As OSS is "open" and community-based by nature, certain OSS have benefited from a number of contributors and different collaborations and integrations with other OSS components, and are often hard to attribute to each of their contributors and may be subject to different licenses than the principal software, which obviously creates even more challenges for users and legal advisers alike.

Moving from the basics to practice, second to speak was Ms Suzanne Erez (in-house IBM IP Counsel) on the topic "A smarter way to use open source". As Ms Erez pointed out, with OSS' sbusiness benefits (to name a few, open standards which allow companies and developers to skip "re-inventing the wheel" and build on previous efforts, and benefiting from future modifications by the open source community), the question is no longer "SHOULD we use open source", but HOW.

As in-house IP Counsel, Ms Erez shared her own process when asked to set the terms for using a certain OSS in IBM's developments. First is the OSS licence review, specifically for any reciprocity provisions. Second is pedigree review – namely, who were the contributors to the OSS? If these include developers who were employed as such in software companies or conducting research in certain institutions while privately working on the OSS, then perhaps the code was not theirs to license as OSS in the first place. Third is performing a code scan, namely looking and making a list of what's in the OSS package. Fourth – performing an internet search for the OSS and its different components, mainly to see when they were published, and whether or not they have been litigated before. Fifth and last is reviewing the outbound licence terms – namely, the license of the proprietary software designated to include the OSS in question, and advising on the necessary adjustments with regards to the OSS.

Ms Erez continued to emphasize the importance of creating awareness to open source throughout the company (and not just in the legal department), and having a strict company "Open Source Policy" which balances the risks and benefits of using OSS, and considers the different stages of use. For instance, while internal use of OSS during developmental stages may be okay according to most OSS licences (although in some cases may still expose the company to patent infringement claims, especially if the company has a high-profile and is considered to have "deep pockets"), it is important to spread awareness to everyone involved in order to avoid having to take hard decisions or take on unfavorable warranties later on. As open source today is an essential part of the business of most software companies, it is important to learn to use it for your benefit, while avoiding unwanted and unnecessary outcomes.

On that positive and practical note, third speaker Mr Muli Ben-Yehuda (owner of Hypervisor Consulting and Linux Kernel Maintainer) took the stage, to discuss "The Top Three Reasons Open Source Makes (Business & Development) Sense".

From a developer and a researcher point of view, Mr Ben-Yehuda argued that companies should definitely use, build upon, embrace and contribute to open source projects. As an example, Mr Ben-Yehuda argued that today there are very few companies which can sustain the amount of changes and modifications Linux undergoes every day (over 170), which makes it is clear that open source can lead to better software. There are several reasons and incentives explaining that, to name a few – open source contributors are passionate about what they do, while being constantly subject to review and criticism by their peers, as everyone can check you up on your mistakes (similar to peer-review in academia). The diversity of contributors may also create a multicultural effect, especially in medium and large sized project, which usually leads to better results. Also, as open source is not controlled by a single management (as is usually the case in software companies), the better ideas usually get through with no regard to organizational politics and constraints. Lastly, existing open source saves developers from having to keep "re-inventing the wheel" and writing everything from scratch, thus freeing them to focus on their own innovative contributions.

As for the companies and business perspective, Mr Ben-Yehuda pointed to the fact that an organization releasing its proprietary software under an open source licence can gain happier customers, as OSS is open to more and better updates and upgrades than "closed" software, and basically is expected to last longer.

Last to speak was Dr Ron Rymon (founder of White Source Software), on the topic "Enjoying Open Source without Compromising Business". As a novice software entrepreneur, Dr Rymon has experienced the uncomfortable situation where a previous company of his underwent a due diligence process in which it unexpectedly discovered hundreds of open source libraries and licenses used by its developers in connection with the company's proprietary software. This helped him appreciate the need for tools for OSS management, which can enable companies to better enforce their OSS policies, keep in order all OSS licensing documentation, and keep their finger on the pulse with regard to changes and updates for each OSS they used in their product. As Dr Rymon pointed out, while open source is likely to contain security vulnerabilities and other bugs just as any other software, and even though open source communities are often quick to fix those – OSS users are slow to update, as it's difficult and out of scope for developers to be in the know of every such constant updates. Considering that vulnerabilities and restrictions in OSS you use are your responsibility, it is of extremely high importance to keep all of these under control.

In order to do that, Dr Rymon recommends OSS users to adopt a "lifecycle" approach – namely, dealing with issues "at the door" and not post-hoc when it is difficult to discover and expensive to fix, and keeping track of OSS "inventory" and risks in real-time (which can be done using Whitesource's solutions).

Are online T&Cs enforceable?

Thanks to my colleague, Adam Smith-Anthony, who spotted the BBC's recent blog post on online T&Cs.

Some T&Cs are 50,000 words long - that's 20,000 words
 longer than Hamlet.
Which would you rather read?

The question of the enforceability of T&Cs, which often apply to use of a copyright protected work as well as more broadly, comes up time again. See here, here and here for recent posts on the content and enforceability of T&Cs.

The BBC's blog post reports that a woman in the US was asked to pay USD 3,500 for writing a negative review of an online retailer. Her husband had placed an order on KlearGear.com. He had not received the goods after 30 days so tried, and failed, to get in touch with the company at which point PayPal refunded his money. His wife then posted a review on consumer website Ripoff Report in which she said: "there is absolutely no way to get in touch with a physical human being" and accusing KlearGear of having "horrible customer service practices". A quick search reveals that she is not the only one who has had a bad experience with this company. However, she was asked by KlearGear.com to remove her review within 72 hours or to pay a "fine" of USD 3,500 - this they based on a non-disparagement clause in their T&Cs.

The couple refused to pay and now have a black mark against their credit rating. However ultimately KlearGear.com did not seek to enforce their T&Cs.

This story illustrates how few people read T&Cs. Those that do wade through the pages of legal jargon are unlikely to change their course of action. On that basis the BBC comments that the playing field is uneven - you either accept or reject T&Cs. This blogger agrees and see this as an indication that we can expect to see a few more cases on the enforceability of online T&Cs in future.

Calculating damages: every box has a silver lining ...

Redcrier Publications Ltd & Another v Redrup Publications Ltd (t/a Complete Care Training) &John Redrup [2013] EWHC 3481 (IPEC) is a decision of Alastair Wilson QC, sitting as an Enterprise Judge in the Intellectual Property Enterprise Court, England and Wales.

Redcrier produced training manuals and conducted online examinations for care home staff.  These manuals were supplied to subscribing care homes in a cabinet labelled with the words "the silver box" -- this was important to Redcrier because its publicity material included a photograph of a silver box. The business had been founded by John Redrup, the second defendant, who sold it to Redcrier in 2007 but continued to be involved in the business till he left in 2011, somewhat inconveniently taking half of Redcrier's staff with him.  Redrup then set up a competing business (Redrup Publications, the first defendant), copying Redcrier's manuals and updating them. Redrup Publications distributed fliers containing photos of the silver box to Redcrier's customers which offered them : these fliers offered a "seamless transfer" to their upgrade service, while making allegations of a not particularly flattering nature about the manner in which Redcrier ran its business.

At this point Redcrier's patience came to an end. The company sued the defendants for copyright infringement and libel (for which a separate trial was to take place).  Redrup Publications helpfully admitted infringing copyright in the manuals, while Redrup himself denied all liability.

The issue before the IP Enterprise Court was Redcrier's claim for damages based upon (i) infringement of copyright in the silver box photograph which had been so prominently displayed on the first defendant's flier; (ii) damages for loss of upgrade business and (iii) damages from the sale of infringing materials to new customers. The claimants also indicated that they would like an interim payment ahead of a full assessment of the quantum.  The defendants ungenerously offered £50 damages for the use of the photograph.

Alastair Wilson QC sided with Redcrier and ordered an interim payment of a total of £37,450 on the following basis:

* The natural reading of the Civil Procedure Rules, CPR r.25.7(4), was that an amount awarded by way of interim payment should not exceed the amount that was likely to be awarded at the hearing. There was provision in r.25.8(2) for repayment by the claimant in the event of an overpayment -- but the amount of an award should be calculated in a way that made a repayment unlikely to occur.

* In this dispute Redrup Publications had not yet opted between an enquiry as to damages or an account of profits. The authorities demonstrated that a party who was suing on alternative claims was entitled to invoke the r.25.7 jurisdiction if the court was satisfied that one way or another the claimant would recover a substantial sum [this blogger continues to speculate as to whether a claimant should be forced to opt for either an account of profits or an enquiry into damages: the IP Enforcement Directive doesn't require this].

* The silver box photo was intrinsically a fairly trivial one, for which in the ordinary way no willing buyer would pay a very large licence fee. However, it represented a significant feature of Redrup Publications' goodwill and the defendants must have wanted to use it on their fliers in order to capture for themselves some of the benefit of that goodwill.

* What's more, Redrup Publications would never in reality have granted a licence, but the court had to proceed [somewhat meaninglessly] on the basis that the parties were hypothetically willing to negotiate a licence agreement. The offer of £50 was far less than was likely to be awarded in due course, particularly given the fact that the photograph was to be used as part of a campaign to persuade Redrup Publications' customers to change their allegiance and take their business to the defendants. On this basis the likely amount to be awarded when damages were finally assessed would not be less than £750. That sum was ordered to be paid as an interim award.

* There was evidence that Redrup Publications had supplied infringing manuals to customers until mid-January 2013, or maybe even longer. On a conservative basis the infringement lasted for one year. That company did not dispute that it took some update business from Redcrier and, on the current state of the evidence, an appropriately conservative figure for lost customers during the period of infringement was 30, at £150 lost profit per customer per annum.  Each lost customer represented a loss of profits extending over more than one year and it was unlikely that Redcrier would have lost less than an average two years' upgrade business per lost customer. Redcrier had therefore lost £9,000.

* On Redrup Publications' own figures it had made 11.5 sales of infringing material per month to new customers (ie 138 new customers over the period of infringement). Redcrier would probably not have made all of those sales itself, though, since it had just five per cent of the relevant market and it could be taken to have acquired 5% of Redrup Publications' new customers. It had therefore lost seven new customers at £1,150 per customer, totalling £8,050.

* In respect of the remaining 131 customers, Redcrier was entitled to a notional royalty on each infringing manual sold. This royalty would have been quite high because Redrup Publications needed a set of manuals in order to enter the market. The relevant royalties were unlikely to be assessed at less than £150 per customer, leading to a further £19,650 of damages.

It's not often that we see judgments in which the courts go into such detail when dealing with monetary issues, so this judgment is very much welcomed.