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.
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 9th 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 8th 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.
2 comments:
Hi "Tibbie"
How does YouTube's Content ID functionality play into your 40% consumption/ 4% revenues calculation?
https://support.google.com/youtube/answer/2797370?hl=en
At least in theory it looks like right holders have scope to block or mute content that they do not want to be made available on Youtube.
Important point to flag on the value gap issue: you say "This basically means that providers – such as YouTube – need to get licenced and implement filtering technologies."
The current draft says that platforms have to enter into licensing negotiations OR have appropriate content identification measures in place. That was an important change from a leaked version of the draft directive which said AND.
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