THE COPYKAT

This CopyKat from Mateusz Rachubka

Increased Royalty Payments for Songwriters in the US

The US Copyright Royalty Board decided to increase the amount of royalty payments that companies such as Apple, Spotify, Amazon, Google and Pandora would have to make to songwriters and music publishers over the next five years. The streaming companies would now be required to pay 15.1 percent of their revenue, comparing to the previous rate of 10.1 percent. As described by NMPA President & CEO David Israelite, in practical terms “the CRB raised rates for songwriters by 43.8%” and this decision also allows the songwriters to benefit from any agreements concluded by record labels in the free market. As a result the ratio between what “labels are paid by the services versus what publishers are paid” will now significantly improve. Additionally, the CRB has introduced a late fee, up to 18 percent annually, in case any royalty revenue is not paid on time by the streaming company. Although music creators did not manage to get ‘per-stream rate’, the songwriters consider increase in overall rates as a success in the market which is currently dominated by the streaming companies. 

US Senate Introduced the CLASSICS Act 

Senators, both from Republican and Democratic parties, have introduced the CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society), which would impose an obligation on digital services to pay both rightholders and artists for the use of recordings that were created pre-1972. Under the current legal framework, the way in which digital music services pay to use recordings made after 1972 is covered by federal copyright law, whereas the use of works created before 1972 is regulated by state law. This situation has led to many questions and complicated litigation in several states. With the versions of CLASSICS Act introduced in the Senate, now the rates for the use of both pre and after 1972 recordings for digital services will be the same and paid in an identical way. Introduction of the bill will also enable digital platforms to settle any outstanding claims with rightholders, in California. This will allow services to avoid state infringement lawsuits. Nevertheless, in order to do so digital music services would have to pay three years’ worth royalties at the current statutory rate for all the music they have used across the whole country.

The Big Entertainment Companies are Campaigning For Changes in Copyright in NAFTA Negotiations

Recently we have reported that the debate over introduction of ‘Safe Harbour’ provisions to NAFTA agreement is heating up. Now Public Knowledge has explored the proposals that were suggested by the lobbyists for the big entertainment companies. One of the ‘wildest ideas’ was a recommendation not to include ‘Safe Harbour’ provisions into NAFTA. In the view of the lobbyists, they “facilitate child pornography and human trafficking” by allowing internet intermediaries to avoid responsibility for any content that is published on their services. This argument according to Gus Rossi is highly misleading. He argues that without a legal framework exempting online platforms from responsibility for context posted by their users, the intermediaries “would be obligated to censor and control everything their users do on their platforms”.

Another argument proposed by the entertainment industries is that exceptions and limitations are unnecessary in trade agreement, claiming that they are “a barrier to the protection of American artists”. Rossi, again, considers this proposal as widely inaccurate. In fact, in the digital age the US copyright system would not be able to work without fair use provisions. Therefore, the author suggests that with the importance of current negotiations of NAFTA, which may be used in the future as a standard of ‘American-sponsored free trade agreements’, it is important to fight any misconceptions and protect a balanced approach to copyright.

Is the Current Copyright Law Framework in Australia a Deterrent for Creators?

With the ongoing debate on potential reform of copyright law in Australia and adoption of fair use approach, recently two reports were issued, which show that the current framework allowing for narrow ‘fair dealing’ exceptions is considered as a barrier to innovation. Deloitte in its ‘Copyright in the Digital Age’ paper argues that digital technologies could contribute over $139 billion by 2020 to Australian economy if the legal framework will support innovation and allow to maximise opportunities. The study of Australian Digital Alliance revealed that the creators struggle to understand copyright law. For many of them the exceptions are often confusing and seeking permission to reuse copyrighted content often results in expensive fees and time delays. Therefore, suggestions have been made that Australia should reform its framework and follow such countries like the US, South Korea or Sri Lanka, which have broader exceptions to the use of copyrighted content. Fair use provides that each use is assessed on its own merits and does not need to fall within a specific predetermined category. The authors of the report claim that transition to fair use would enable innovation, facilitate new uses of copyright materials, particularly in such areas as data mining and cloud computing, and ultimately lead to “a more competitive and creative (…) society”.

Rightholders Want to Address ‘Value Gap’ Under the EU Copyright Directive

A coalition of rightholder organisations has addressed the new Presidency of the Council of the European Union, currently held by Bulgaria, to find a solution to the issue of ‘Value Gap’ (the Transfer of Value). The Value Gap arises in the situation where there is a “mismatch between the value that online User Uploaded Content (‘UUC’) website services extract from creative content and the revenues returned to the creative community”. With vast amount of content being uploaded by users, the UUC sites generate revenue from the infringing content. At the same time the UUC websites refuse to negotiate “fair or any copyright licences” with rightholders. Therefore, the creators believe that the proposal for Copyright Directive, which is currently being negotiated by the European Parliament and EU member states, should clarify two elements. First of all, that the “UUC services communicate to the public under the EU copyright framework and therefore are obliged to obtain licences for copyright protected works, unless eligible for e-Commerce Directive ‘safe harbours’”. Secondly, those UUC services that play an ‘active role’ in promotion of the content, should not be able to benefit from ‘safe harbour’ provisions.

The issue of Value Gap was also addressed by the President and Vice-President of CISAC. In their open letter to MEPs, Jean-Michel Jarre and Angelique Kidjo noted that the copyright reform offers “a historic opportunity to bring fairer remuneration for creators and drive economic growth and jobs in the creative industries”. Therefore, in their view the EU law should not shield UUC platforms, which “make vast revenues from creative works while not fairly rewarding the creators”. Thousands of artists and authors supporting the European Commission’s proposal believe that with a reform of safe harbour the new copyright Directive  will offer an opportunity to “shape fairer digital market for creators in the 21^stcentury”.  

For further debate on remedying the Value Gap under the proposal for Directive on copyright in the Digital Single Market go here, and here.

If you would like to support European screenwriters and directors in their call for a modernised EU Copyright framework, please click here.

Does One Have to be a Copyright Owner to Sue Over a False Copyright Takedown?

That was the question in the dispute between ISE Entertainment, and Civillico and Longarzo. ISE claimed that it owns rights to ‘The Weekend in Vegas’ ABC show, which until recently the viewers could also download on Amazon.com. The show was however removed following an infringement notice submitted by Civillico and Longarzo. According to Civillico he owned the rights in the show and ISE by being in breach of a deal had no authority to use his work. ISE sued both parties for allegedly violating DMCA section 512(f) by submitting a fraudulent takedown notice. The defendants argued that ISE had never registered the show for copyright, nor applied for a registration and therefore had no standing to make a claim under section 512(f).

This argument was rejected by the US District Court Judge Fitzgerald. DMCA section 512(f) provides that an ‘alleged infringer’ may recover damages from when harmed by misrepresentation that material or activity is infringing (here fraudulent takedown notice). In the view of the Court “neither copyright ownership nor registration are prerequisites to bring” action under section 512(f). Therefore, the Court concluded that ISE as an ‘alleged infringer’ had standing to sue and that ISE has stated a viable 512(f) claim.

Google Will Improve Attribution of Contributors’ Works in its Image Search

Google has reached agreement with Getty Images over a ‘multi-year’ licence, which will end the European Commission complaint, where Getty “had accused Google of effectively being a one-stop piracy shop”. Getty claimed that the users of Google could simply view and download “high-resolution, copyrighted content”, which accordingly enabled copyright infringement and piracy. As revealed by the parties, Google has agreed to reform its approach to copyright in its image search function. The search will now include more prominent copyright disclaimers and will remove view image links to the image URL. In return Google will be able to use Getty Images’ content in its products and services.

CREATes need you!

The  School of Law and CREATe Centre at the University of Glasgow have Two CREATe-related roles now available at the University of Glasgow. There is an opportunity to join the School of Law and CREATe at an exciting point in our development, as part of the University of Glasgow’s ongoing investment in the creative economy. Two positions are now available, as Lecturer in Intellectual Property Law and Graduate Teaching Assistant, at the School of Law-hosted Centre for Copyright & New Business Models in the Creative Economy (CREATe), an international copyright research hub established in 2012 with research funding from the AHRC, EPSRC and ESRC. Please click here to read more about the roles  http://www.create.ac.uk/blog/2018/01/29/two-create-related-roles-now-available-at-the-university-of-glasgow/ 

Informal enquiries about both the above positions may be directed to Professor Martin Kretschmer (Professor of Intellectual Property Law and Director of the CREATe Centre).  Email: martin.kretschmer@glasgow.ac.uk and Tel: +44 141 330 3886

IFPI GLOBAL MUSIC REPORT 2016

The record labels' international trade body, the IFPI, has published its Global Music Report for 2016 with headline news that global recorded music revenues are up 3.2% as digital revenues overtake physical for the frst time. The report highlights: 

-       Digital revenues contribute 45 per cent of industry revenues, overtaking physical’s 39 per cent share

-       Streaming revenues up 45.2 per cent, helping to drive 3.2 per cent global growth

-       Music consumption is exploding globally, but the “value gap” is the biggest brake on sustainable revenue growth for artists and record labels

Downloads remain a significant offering, accounting for just 20 per cent of industry revenues.  Income was down 10.5 per cent to US$ 3.0 billion – a higher rate of decline than in 2014 (- 8.2 per cent).  Full album downloads are still a major part of the music fans’ experience and were worth US$1.4 billion.  This is higher than the level of sales in 2010 (US$983 million) and 2011 (US$1.3 billion).

Performance rights revenue grew. Revenue generated through the use of recorded music by broadcasters and public venues increased 4.4 per cent to US$2.1 billion and remains one of the most consistent growing revenue sources. This revenue stream now accounts for 14 per cent of the industry’s overall global revenue, up from 10 per cent in 2011.


Revenues from physical formats declined, albeit at a slower rate than in previous years, falling by 4.5 per cent compared to 8.5 per cent in 2014 and 10.6 per cent in 2013.  The sector still accounts for 39 per cent of overall global income and remains the format of choice for consumers in a number of major markets worldwide including Japan (75 per cent), Germany (60 per cent), and France (42 per cent).

IFPI’s Global Music Report 2016 also reported a 10.2 per cent rise in digital revenues to US$ 6.7 billion, with a 45.2 per cent increase in streaming revenue more than offsetting the decline in downloads and physical formats.

Total industry revenues grew 3.2 per cent to US$ 15.0 billion, leading to the industry’s first significant year-on-year growth in nearly two decades.  Digital revenues now account for more than half the recorded music market in 19 markets.  

However, the IFPI say that there is a fundamental weakness underlying this recovery. "Music is being consumed at record levels, but this explosion in consumption is not returning a fair remuneration to artists and record labels.   This is because of a market distortion resulting in a “value gap” which is depriving artists and labels of a fair return for their work."

IFPI Chief Executive Frances Moore said: “After two decades of almost uninterrupted decline, 2015 witnessed key milestones for recorded music:  measurable revenue growth globally; consumption of music exploding everywhere; and digital revenues overtaking income from physical formats for the first time. They reflect an industry that has adapted to the digital age and emerged stronger and smarter.

“This should be great news for music creators, investors and consumers. But there is good reason why the celebrations are muted: it is simply that the revenues, vital in funding future investment, are not being fairly returned to rights holders.  The message is clear and it comes from a united music community: the value gap is the biggest constraint to revenue growth for artists, record labels and all music rights holders. Change is needed - and it is to policy makers that the music sector looks to effect change.” 

The IFPI say that the “value gap” arises because some major digital services are able to circumvent the normal rules that apply to music licensing.  User upload services claim they do not need to negotiate licences for the music available on their platforms, or conclude licences at artificially low rates, claiming protection from so-called “safe harbour” rules that were introduced in the early days of the internet and established in both US and European legislation. Its clearly a dig at YouTube who many feel hide behind the DMCA 'safe harbor' provisions - and have an unfair advantage over competitors.

Recently some 400 recording artists, songwriters and groups including the Recording Industry Association of America (RIAA) are calling on Congress to reform existing US copyright law saying that the Digital Millenium Copyright Act (DMCA) is obsolete, dysfunctional and harmful,  and calling for stronger measures against the ongoing piracy troubles they face. The DCMA was signed into law by President Bill Clinton in 1998 and aimed to ready copyright law for the digital age. Christina Aguilera, Katy Perry, Steve Tyler, Lionel Richie and Garth Brooks are just some of music’s biggest names who want to make it harder to pirate music online. The musicians are asking lawmakers to make “drastic reforms” to the Act.

In September 2015 Cary Sherman, the chairman and CEO of the Recording Industry Association of America, has some choice words about the current state of US copyright law. He said that the provisions of the Act were 'largely useless' to combat music piracy and  that under the Digital Millennium Copyright Act, rightsholders had to play a game of whack-a-mole with Internet companies to get them to remove infringing content. But that "never-ending game" has allowed piracy to run amok and has cheapened the legal demand for music. Sure, many Internet companies remove links under the DMCA's "notice-and-takedown" regime. But the DMCA grants these companies, such as Google, a so-called "safe harbor"—meaning companies only have to remove infringing content upon notice from rightsholders.

The IFPI say that the safe harbour rules are being misapplied: "They were intended to protect truly passive online intermediaries from copyright liability.  They were not designed to exempt companies that actively engage in the distribution of music online from playing by the same rules as other online music services. The effect is a distorted market, unfair competition and artists and labels deprived of a fair return for their work."

"Rights holders from across the music community and wider creative sector are committed to changing this legislative anomaly.  They say there is no case for digital platforms that have built major businesses on the back of music and other creative content, to be allowed to seek “safe harbour” refuge while they profit from making music available on the internet."

YouTube’s deals with Universal Music Group, Sony Music and Warner Music have either expired or will this year, the Financial Times reported on Sunday.

http://www.ifpi.org/downloads/GMR2016.pdf

http://musiclawupdates.blogspot.co.uk/2016/04/artistes-call-for-major-reforms-of-take.html 

THE CHRISTMAS COPYKAT

In Canada, the House of Commons has triggered a parliamentary review of Canada's Copyright Act, first passed in 1921, which will be conducted by the Standing Committee on Industry, Science and Technology. TorrentFreak comments that the music industry was quick to weigh in, congratulating government ministers and making it known that the so-called 'Value Gap'  - how the tech giants seem to be good at everything except removing infringing material, and why likes of Google don't seem keen to pay for what drives the likes of YouTube - be high on the agenda. The 2012 Act tackled a number of important issues, such as allowing time and format shifting, plus backup copies, fair dealing and caps on statutory damages for non-commercial scale infringement - and a review of copyright law every five years, a period that expired at the end of June 2017.

And talking of the Value Gap, YouTube has now just signed a second global, multi-year agreement with the Universal Music Group, amid mooted plans to expand its subscription businesses. Universal said the deal would provide its artists more flexibility and pay, and strengthen YouTube's commitment to managing music rights. YouTube reached a deal with the second of the three majors. Warner Music Group, in May. Bloomberg reports that the negotiations come in advance of YouTube's launch of a new paid music service that is expected to go live in March 2018. And not to be left behind, Facebook and Universal Music Group have signed an 'unprecedented global, multi-year agreement' under which UMG licenses both its recorded music and publishing catalogs for video and other social experiences across Facebook, Instagram and VR platform Oculus.

In good news for the recorded music sector, the US Copyright Royalty Board has determined that SiriusXM must pay 15.5 percent of it's revenue for the next five years (beginning in 2018 through to 2022, although the full determination has yet to be posted on the CRB's website while the participants scrutinize the document to make sure proprietary data is not publicly revealed. The rate represents a near 41 percent jump from the 11 percent the service is currently paying, although it's short of the 23 percent that SoundExchange was advocating for. But the Hollywood Reporter it's better than the static rate that SiriusXM was hoping for from the Court. However in a less palatable move, the Board has ruled that pre-existing subscription services (Music Choice and Muzak) will enjoy a reduced rate of 7.5 percent of revenue for the next five years. That is down from 8.5 percent of revenue in the current year that the two services are paying to the industry.

But the battle between the tech behemoths, and giants of the content industries, is in full spate.  Now the likes Google and Facebook are facing off against Hollywood studios and record labels over how to update the North American Free Trade Agreement to protect copyright in the digital age. Silicon Valley is pushing for exceptions to copyright rules for online platforms and Internet service providers it says are needed to keep content flowing on the web. Meanwhile, the U.S. government seems to be taking positions more favoured by companies such as Walt Disney Co. and Time Warner Inc., which are lobbying for stronger protections for copyright owners. The new (US led) proposals for NAFTA would limit allowances for online use of copyrighted material, a position seemingly less supportive of online platforms than existing U.S. law, in particular a watering down of fair-use exceptions and a re-evaluation of 'safe harbor'.  More on Bloomberg here

T Bone

Back to music: A group of 41 recording artists is urging the US Congress to sort out the somewhat odd (and now much litigated) position of pre-1972 sound recording copyrights in US federal law with the new "Compensating Legacy Artists for their Songs, Service & Important Contributions to Society Act"  - or (wait for it, and a a drum roll please)  the CLASSICS Act. The CLASSICS Act would rectify the obvious problems with relying on state level copyright law to establish a performing right for sound recordings,  and create the basis for a royalty to be levied from broadcasters to pay labels (and hopefully recording artistes) for pre-1972 works.  The 41 signatories including T Bone Burnett, Rosanne Cash, Kris Kristofferson, Bette Midler, Bonnie Raitt and Henry Rollins said  “Digital radio makes billions of dollars a year from airplay of music made before 1972. Yet, because of an ambiguity in state and federal copyright laws, artists and copyright owners who created that music receive nothing for the use of their work. The ‘CLASSICS Act’ would correct this inequity and finally ensure that musicians and vocalists who made those timeless songs finally get their due. We urge Congress to pass the CLASSICS Act and other pro-artist reforms quickly”.

The major national sports Leagues in Europe, including the English Premier League and Germany’s Bundesliga  have won a reprieve from the EU who have agreed to exclude them from the scope of a copyright reform that would help make content more easily available online. The entertainment and sports industries have been fiercely lobbying against the European Commission’s proposed reform of EU copyright law to make films and TV programmes more available across borders, arguing it would undermine the financing model of the whole sector. The Commission has said it is not seeking to force anyone to make content more available online, but merely to make it easier for broadcasters to obtain the necessary rights. EuroNews reports that EU member states have now to exclude all sports events, TV programmes co-produced by broadcasters and other third parties, as well as content licensed to a broadcaster by a third party.

The Electronic Frontier Foundation (EFF) has asked the Librarian of Congress to limit the legal barriers people face when they want to repair and modify software-enabled products, so that they, and not manufacturers, control the appliances, computers, toys, vehicles, and other products they own. In comments filed in Washington D.C. today, EFF continued its years-long fight to enable owners and creators to repair, modify, and enhance products, or use snippets of films or songs, free of onerous threats that doing so somehow infringes companies' copyrights. Software-enabled devices and Internet-connected products and appliances are ubiquitous in modern life, and people aren't infringing anyone's copyright when, for example, they choose to permanently disable the embedded, on-all-the-time camera or microphone in their kids' toys, or send their car to their favorite mechanic, rather than high-priced dealerships, to be repaired. “It’s absurd that a law intended to protect copyrighted works is misused instead to prevent people from taking apart or modifying the things they own, inhibit scientists and researches from investigating safety features or security enhancements, and block artists and educators from using snippets of film in noncommercial ways," said EFF Legal Director Corynne McSherry. "The exemption process is one highly flawed way of alleviating that burden."

Facebook has announced that it removed nearly 3 million posts, including videos, ads and other forms of content, from its services during the first half of 2017 following complaints of counterfeiting and copyright and trademark infringement. Aggregate data shows Facebook received about 377,400 complaints from January through June, with many referencing multiple posts. About 60 percent of the reports related to suspected copyright violations on Facebook.

The National Copyright Administration of China (NCAC) has announced that during the 2017 Sword Campaign 1,655 infringing websites were shut down, 274,800 infringing links were deleted and 314 enforcement cases were dealt with (of which 37 transferred for criminal investigation). The Sword Campaign is a flagship initiative led by NCAC in partnership with other Chinese government departments and enforcement agencies. Meanwhile, NCAC released a list of the top 16 copyright enforcement cases for 2017. The leading case on the list was enforcement against the piracy service Youyueyingchuang Technology Ltd. by Beijing Municipal Cultural Enforcement Division (CED). The resulting enforcement action removed the service and imposed a fine of RMB400,000 (approx. £45,000). More here and here (in Chinese).

The CopyKat: A possible point for legal divergence of the UK and EU in light of Brexit? (and much more)

This post was written by Tibbie McIntyre.

Much is spoken of the music ‘value gap’.

It stems from a limitation of liability for hosting providers which host third party content (in the US this is known as ‘safe harbor’). (European legislation can be viewed here, American here.) Essentially, when hosting providers are notified by rights holders of infringing content on their sites, they are required to take down the infringing content. But before such notifications are issued the hosting providers are not liable for the infringing actions of third parties.

YouTube is one of these hosting providers, benefiting from the limitation of liability. It is legally obliged to take down infringing content upon notification from the rights holder.

Meantime, let’s take a look at the music played on YouTube. In 2015, it was estimated that YouTube is responsible for 40% of consumption yet constitutes only 4% of the revenue. Some within the music industry feel that this glaring discrepancy in the numbers is thanks to YouTube’s limited liability. YouTube benefits from a position of strength compared to other streaming firms because in YouTube’s case, the music is already posted online. Spotify et al. must licence and then play.

What does this have to do with Brexit?

Draft Article 13 of the draft Directive on copyright in the digital single market (and Recital 39) is aimed at addressing this value gap by requiring hosting providers to “take appropriate and proportionate measures to ensure the functioning of agreements concluded with rightholders and to prevent the availability on their services of works or other subject-matter not covered by such agreements, including through the use of effective content identification technologies". This basically means that providers – such as YouTube – need to get licenced and implement filtering technologies.

Image in Public Domain

This move has been praised by a group of prominent US musicians, who have lobbied the US government to take similar steps.

It seems positive that the EU is trailblazing in this light.

BUT ….

As pointed out on the IPKat here, Article 13 cannot be implemented without also reforming Article 3 of the InfoSoc Directive and Articles 14 and 15 of the Ecommerce Directive. No one is quite sure yet how this issue will be resolved.

Brexit potentially comes in to play here. No one knows what will happen eventually, but there is always the possibility that the UK government might happen upon this issue and decide to tackle it – it has already been raised by one minister in relation to the Digital Economy Bill 2016-17.

If the UK government presses this issue (with a growing music industry there is no reason why it shouldn’t), the results could be very interesting indeed.

Dancing baby case

The ten year old saga (the baby in the video above should almost be a teenager by now) is rolling on, with the Supreme Court signalling its potential willingness to take the case further. The court has asked the US Solicitor General for his opinion on the matter, suggesting it might proceed with the case.

The district court opinion can be found here, the appeal at the 9^th Circuit can be found here and this issue. The case has also been commented on this blog previously here, and over at the IPKat here and here.

The case centres around whether rightsholders should consider whether a fair use defence applies to content posted online before take-down notices are issued.

Cases where the Solicitor General is asked to offer an opinion are accepted for review more often by the Court. This writer hopes that the justices will look at this case, as it could have a massive impact on how we conduct our lives online.

Follow the yellow brick road

The death knell rang this month for a decade long litigation saga in relation to merchandise relating to The Wizard of Oz, Gone with the Wind and the cat and mouse duo, Tom and Jerry. The 8^th Circuit Court of Appeals again reviewed the dispute, affirming both the $2.57 million judgment and permanent injunction in favour of studio giant Warner Bros.

As background, the defendants (X One X Productions, A.V.E.L.A., Inc., Art-Nostalgia.com, Inc., and Leo Valencia, collectively known as “AVELA”) obtained restored versions of advertising posters and lobby cards for Gone with the Wind, The Wizard of Oz and Tom and Jerry. Images of the famous characters from these films included Dorothy, Scarecrow, Tin Man and the Cowardly Lion from the Wizard of Oz, Scarlett O’Hara and Rhett Butler from Gone with the Wind and the cat and mouse duo Tom and Jerry.

AVELA extracted images from the restored advertising posters and lobby cards and licenced the images they extracted for use on a range of consumer products, including t-shirts, action figures, lunch boxes and playing cards.

The litigation saga began in 2006 when Warner promptly filed suit against the defendant, arguing copyright and trade mark infringement claims under the Copyright Act, Lanham Act and Missouri state law.

An interesting point is that the images on the advertising posters and lobby cards were generated before the films were completed and copyrighted. They were not duly registered in compliance with the copyright notice requirements of the 1909 Copyright Act, 17 U.S.C. §§1 et seq.. The Tom and Jerry images were also never registered, therefore not meeting the legislative requirements of that time period to give copyright notice.  (N.B. some of the images in question had been registered, however protection had not been timeously renewed). This fascinating issue – which was dealt with previously in this long-running saga – on drawing the boundaries between copyrighted works and the public domain in this case can be explored more fully here, here and here.

In the judgement handed down earlier this month, a range of issues were dealt with, including the award of statutory damages (with the appeallate judge finding the $2.57 million against AVELA isn’t disproportionate to the offense)

Importantly, AVELA’s attempt to invoke Dastar failed. Dastar is a Supreme Court judgement handed down in 2003 that holds that trade marks cannot act as a surrogate form of protection of works once copyright has expired.

A telling excerpt from page 10 of the judgement comments on how Dastar does not apply:

“Warner’s asserted trademarks in the characters from the films and cartoons do not run afoul of Dastar. The district court found and AVELA did not dispute that Warner holds registered trademarks in iconic phrases and names from the films and has used the character images for trademark purposes on a host of consumer goods for many years. Images of the film actors in character and signature phrases from the films are not communications, concepts, or ideas that the consumer goods embody as Dastar defines these terms. Products marketed under AVELA’s licenses employ iconic film characters’ pictures to associate the products with Warner’s films, not to copy the film itself. Accordingly, these are trademark claims, not disguised copyright claims, and Dastar does not bar them.”

“The clothes on the hanger do nothing; the clothes on the woman do everything,” – Justice Stephen G. Breyer

This remark was expounded at the Supreme Court earlier this month during a hearing in relation to Star Athletica L.L.C v Varsity Brands, Inc., et al.. The District Court stage can be read here, and the Circuit Appeals stage can be read here. This case has been and will be watched by many across the fashion industry.

The issue at stake in this case is whether designs on cheerleaders’ uniforms can be subject to copyright protection. All parties agree that two-dimensional designs may be copyrighted but the cut and shape of three-dimensional garments may not.

Designs that are utilitarian in nature do not attract copyright protection. Star, the smaller rival of Varsity and the defendant in the original proceedings, contends that the types of designs found on cheerleading outfits – stripes and chevrons etc. – are utilitarian in that they are essential to the function of a cheerleading outfit. This utilitarian function apparently – according to Star – is to “cause the cheerleader to be perceived as slimmer and more curvy than they actually are.”

The sportswear Colossus, Varsity, argued that many, many design variants are available in relation to cheerleading uniforms, yet this clothing still clearly remains for the purposes of cheerleading. In fact, “You can have a white cheerleading uniform worn by a cheerleader with the team name and team logo on it,”

A ruling in this case is expected by June 2017. It will surely be a landmark case for the fashion industry.

THE COPYKAT

This CopyKat from Tibbie McIntyre

The UK Copyright Officers survey – deadline 3^rd April

If you work at a UK library and educational/cultural institution, your organisation is warmly invited to take part in a survey about copyright officers and copyright education here. The survey is available until 3^rd April.

The UK Copyright Literacy page states that the research is regarding “copyright officers or similar specialists in UK libraries and educational / cultural institutions. We want to find out more about the value and status of these positions, the responsibilities that they entail and the ways in which copyright education is delivered. … The findings should be of interest to organisations wishing to benchmark the copyright training and advice services they currently offer.”

Even if your UK library and educational/cultural institution does not have a dedicated copyright officer, your organisation is still invited to participate, as there are questions designed to determine how copyright is managed in the absence of a designated copyright post.

If you have any questions about the survey, please contact ukcopyrightlit@gmail.com.

You can find the survey here until 3^rd April.

Australia NOT to grant safe harbour to Google, Facebook, at al.

The Australian government had recently been seeking to extend its safe harbour provisions to online intermediaries (including Google and Facebook) that rely on user-generated content. The move would have given immunity to online intermediaries for infringing content uploaded onto platforms by users.

Across Europe and the U.S., online intermediaries already enjoy such a safe harbour (European legislation can be viewed here, American here). However, safe harbour provisions have generated much heated debate, with copyright holders arguing that it has led to the copyright ‘value gap’. For example, rights holders have argued that platforms that benefit from the safe harbour rule facilitate nearly half of all music consumption on the internet but represent only around 4% of the revenue generated by the industry.

Also, platforms are only under an obligation to remove infringing content when notification is given by the rights-holder. This leaves copyright holders in the position of eternally having to search YouTube, Facebook et al. for instances of infringement – an eternal game of ‘whack-a-mole’. This topic is coveredhere and here, and reports on controversial measures proposed by the EU to overcome the ‘value gap’ can be found here.

TorrentFreak reports that “Due to what some believe amounts to a drafting error in Australia’s implementation of the Australia – US Free Trade Agreement (AUSFTA), so-called safe harbor provisions only apply to commercial Internet service providers.” This means that platforms allowing the upload of user-generated content may be found liable for infringing content uploaded by 3^rd parties.

Communications Minister Mitch Fifield confirmed in a statement that the amendment had been dropped: “Provisions relating to safe harbour were removed from the bill before its introduction to enable the government to further consider feedback received on this proposal whilst not delaying the passage of other important reforms”.  

Lobbying from a consortium on copyright holders to drop the safe harbour amendment has been intense. The Australian has published a series of articles against implementation of the safe harbour rule, arguing that Google et al. are “ruthlessly exploiting” safe harbour rules in the US and Europe (no links are available as the content is behind a paywall).

What are the implications for platforms that allow 3^rd parties to upload content?

There is legal uncertainty – platforms may be found liable for any acts of infringement by their users. There are a number of options from which the platforms can choose;

1.      Run the risk of being found liable of copyright infringement because of the actions of 3^rd party users, having to pay penalties to copyright holders.

2.      Enter into agreements with copyright holders on a pre-emptive basis, licensing content that 3^rd party users might upload onto the platform.

3.      Implement filtering technology, identifying and blocking infringing content when it is uploaded. (This is also a live issue in Europe.)

4.      Exit the Australian market altogether.

The exemption from liability enjoyed by platforms is an important issue worldwide, and it should be interesting to observe how events unfold in Australia in the coming months.

There are more stairs? – Stairway to Heaven saga continues

This saga has previously been reported on the 1709 blog here and on the  IPKat here. This case deals with the potential infringement of a song by Spirit, ‘Taurus’, by Led Zeppelin in their ‘Stairway to Heaven’.

A 90 page brief was recently filed to the 9^th Circuit Appeals court by the agent of Michael Skidmor, trustee of Spirit guitarist, Randy Woolfe (California). The brief asks the court to reverse the previous finding, where the jury found unanimously in favour of Led Zeppelin in June 2016. This brief also asks for remand for a new trial, including striking the bill of costs.

Copykat will issue updates as and when they come.

By Alf van Beem (Own work), via Wikimedia Commons

Compulsory Licences for “cable systems” do not apply to TV streamers

The 9^th Circuit delivered its ruling in the Fox Television Stations v Aereokiller case on 21 March. The case relates to the TV streaming services provided by FilmOn.

FilmOn provides a service that uses antennas to capture over-the-air broadcast programming – much of it copyrighted – and then uses the internet to retransmit this programming, utilising both subscription and ad-based methods of revenue generation. Essentially, it enables you to watch TV on your computer.

The dispute centred on section 111 of the U.S. Copyright Act (17 U.S.C. § 111), which provides that a “cable system” is eligible for a compulsory license. Such a compulsory licence allows “cable systems” to retransmit “a performance or display of a work” originally broadcast by someone else without having to secure the consent of the copyright holder.

In order to maintain its compulsory licence, the “cable system” must pay a statutory fee to the Copyright Office – as well as complying with other regulations.

FilmOn contended that its services fall under the “cable system” definition and it should therefore be granted a compulsory licence.  

A group of broadcasters (including, inter alia, Fox, NBC Universal, ABC, CBS and Disney Enterprises Inc.) argued that the services provided by FilmOn do not fall under the definition of “cable system” as provided under § 111 and it should therefore not be granted a compulsory licence.

A statement on page 7 the ruling sheds further light on why this issue was so hotly contested by the parties:

“Compulsory licences are highly coveted, in no small part because, according to the Copyright Office, the royalty payments the Act requires cable companies to pay are “de minimis” when compared to the gross receipts and revenues the cable industry collects, a gap suggesting that the government-set rates fall well below market levels.”

Unfortunately, court found itself at an impasse: “The text of § 111 is written in broad terms, and both sides can make plausible arguments about the statute’s purposes and legislative history.”

The court goes on to state “that the meaning of § 111 is ambiguous on the precise question before us”.

To overcome this impasse, the decision hinged on arguments brought by the Copyright Office and the weight the court was willing to give those arguments. The court utilised the Skidmore framework (precedent that allows the court to rely on the arguments of a government agency in cases where there is no clear law).

The Copyright Office argued that FilmOn’s services do not fall under the definition of “cable systems”. Historic Copyright Office arguments have posited “that a provider of broadcast signals [must] be an inherently localized transmission media of limited availability to qualify as a cable system.” Significantly, Congress has for years been aware that the Copyright Office views internet-based retransmission services as not falling under the definition of “cable systems” and has never moved to amend or comment upon this view.

The arguments presented by the Copyright Office were therefore afforded significant deference in this case, since the statute was found to be ambiguous on the issues at stake and the Copyright Office proffered cogent arguments to address matters. The court noted that “To the extent the legislative history provides relevant evidence of § 111’s meaning, we would defer to the Copyright Office’s interpretation of it, seeing as the Copyright Office has a much more intimate relationship with Congress and is

institutionally better equipped than we are to sift through and to make sense of the vast and heterogeneous expanse that is the Act’s legislative history.

In summary, it was on the strength of the arguments brought by the Copyright Office, that court found that “a service that captures copyrighted works broadcast over the air, and then retransmits them to paying subscribers over the Internet without the consent of the copyright holders, is not a “cable system” eligible for a compulsory license under the Copyright Act.”

This story will continue, as FilmOn is arguing two similar cases at the D.C. Court of Appeals and the 7^th Circuit Court of Appeal.