The COPYKAT: from Fallout Shelters to your local library

These days, a cursory search for “copyright” online will likely result in one thing more than any other: headlines about the [insert scary adjective here] draft for the Directive on Copyright in the Digital Single Market. It’s certainly something to keep an eye on, and the CopyKat has covered the DSM Directive here and here. But in other copyright news…

Is Warner Bro's Westworld game a blatant rip-off?

Bethesda Softworks is suing Warner Bros. and Fallout Shelter co-developer Behaviour Interactive over the recently released Westworld. Bethesda Softworks alleges that not only is the mobile game based on HBO’s TV series a “blatant rip-off” of Fallout Shelter, but that it also uses the same code as Fallout Shelter. The lawsuit, filed on 21 June in Maryland District Court, is a civil action for breach of contract, copyright infringement, unfair competition, and misappropriation of trade secrets.

a scene from HBO's hit show, Westworld

The original Fallout Shelter was released in 2015 for mobile devices, and is now available for play on Nintendo Switch, Windows PCs, PlayStation 4, and Xbox One. Fallout Shelter is a free-to-play simulation game, which has in-app purchases, where players build and manage a post-apocalyptic bunker full of workers (Variety). The Westworld game, which is currently available only on Android and iOS mobile phones, allows players to manage a virtual replica of the  theme park from HBO's hit Westworld TV show. The mobile game also features an “underground facility” that is similar to the vault in Fallout Shelter.

Bethesda accuses Warner Bros. of copying “the subtle sway, bounces, and minute movements in idle characters that give them and the scene a constant sense of motion and a distinctive feel as a result of unlawfully copying Bethesda’s code.” With these common elements discussed above in mind, Bathesda asserts that “there is more than a substantial similarity between Fallout Shelter and the Westworld mobile game.” 

Of course, questions of inspiration can be argued either way. Importantly for Bethesda’s case, both Fallout Shelter and the Westworld game share the same developer: Behaviour Interactive. The company, which is Canada's largest independent video game development studio, is also a named defendant in the claim, which states: 

“Warner Bros., sharing a similar consumer demographic, and recognizing Bethesda’s significant success in bringing its Fallout Shelter game to a broad audience on mobile devices, engaged and collaborated with Behaviour to develop a mobile app for its own science-fiction property, Westworld. To bring the Westworld mobile game to market, Behaviour and Warner Bros. utilized Bethesda’s intellectual property without authorization to develop a mobile game with the same or substantially similar gameplay experience as that provided by the copyrighted Fallout Shelter mobile game.”

The evidence continues to stack in Bethesda’s favour, with the publisher pointing out that the Westworld game even included the very same bugs or defects that were present in the early development stages of Fallout Shelter. Bethesda, which also publishes the popular Fallout, The Elder Scrolls, and DOOM games, is seeking an unspecified amount in damages from Warner Bros., and to have the Westworld game removed from app stores.

Social network, media company, host provider, neutral intermediary... what's in a name for YouTube?

Austrian commercial TV broadcaster ProSiebenSat1Puls4 has achieved a key victory in its four-year legal battle with YouTube. According to the Handelsgericht Wien (the Vienna Commercial Court) in its judgement of 6 June 2018, YouTube is not a neutral intermediary, but is rather jointly responsible for copyright breaches that take place on its video platform.

Puls4, a private broadcaster affiliated with the major broadcasting group ProSiebenSat.1, accused YouTube of complicity in copyright infringement. In 2014, Puls4 sued YouTube, arguing that the media giant had allowed Puls4’s stolen content to appear on the YouTube platform. YouTube responded by asserting the Host Provider Privilege set out in Article 14 of the E-CommerceDirective, which in certain situations exempts host providers like YouTube from liability for infringing activities by their users.

Austria's former Chancellor Christian Kern appears on Puls4 TV.

It is important to remember that the Host Provider Privilege only applies if the entity in question indeed qualifies as a “host provider” within the meaning of the E-Commerce Directive. This means that YouTube would have to prove it (a) does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or (b) upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

Speaking to German newspaper Der Standard, Puls4’s CEO Markus Breitenecker explained that if YouTube “leaves its neutral intermediary position and assumes an active role, which could provide it with a knowledge of or control over certain data, it cannot rely on the liability privilege in this respect. And that is exactly what has happened in this case.”

Although (as of 25 June) the official judgement has not been published, the court cited the YouTube’s “links, mechanisms for sorting and filtering, in particular the generation of lists of particular categories, its analysis of users’ browsing habits and its tailor-made suggestions of content.” This led the court to determine that YouTube was prohibited from “playing the role of a neutral intermediary.”

In a statement to The Local Austria, YouTube said it was studying the ruling and “holding all our options open, including appealing” the decision. Both sides have four weeks to petition the court before it issues its binding ruling. In the meanwhile however, YouTube noted that it takes protecting copyrighted work very seriously.

If the preliminary decision is upheld, YouTube must perform a content check upon upload, instead of simply removing copyright infringing content upon notification. In respect of this, the Viennese court stated that “YouTube must in future — through advance controls — ensure that no content that infringes copyright is uploaded.” YouTube began beta testing a feature called Copyright Match last month, which shows rights holders who have had their work stolen and lets them ask YouTube to delete the guilty party’s video.

Although Austrian case law is not binding for other EU member states, the Commercial Court’s judgment sets a precedent for denying Host Provider Privilege to YouTube under EU law. This may encourage similar decisions in the future which are based on the same line of argument.

As Breitenecker put it, “the media companies who call themselves social networks will have to recognize that they, too, have to take on responsibility for the content with which they earn their millions.” 

For creatives in California, a recent employment law case may raise concerns over copyright

A California court ruling from April has raised concerns regarding its potential impact on copyright ownership. In Dynamex Operations West, Inc. v. Superior Court of Los Angeles, the matter before the court was a wage dispute, which required the court to consider the standard to apply in determining whether workers should be classified as employees, or as independent contractors. 

Nowhere in the 85-page judgement is “copyright” or even “intellectual property” mentioned. 

However, in a state with so many media and software companies, the new ruling could affect whether a creator or a company gets to claim ownership as the original author of a work. In deciding if a worker is eligible for statutory employment protections, Dynamex replaced a complex multi-factor consideration with a simple three-part “ABC” test. Now, Californian companies are burdened with the requirement to prove that all three parts weigh against an employment relationship. 

What does this mean for copyright law? The rise of the gig economy, which is characterised by short-term contracts and freelance work, poses new questions for intellectual property ownership. To determine if someone is an employee for purposes of copyright authorship, American Federal courts currently use a test in the US Treasury Department’s Internal Revenue Service code. 

If, however, the courts start looking to the Dynamex case for guidance, people’s expectations might change. Speaking to Bloomberg Law, music industry lawyer Michael S. Poster explained: “If, under California law, a lot more people are going to be treated as employees rather than as independent contractors, chances are that a lot of their work product that they would have retained a copyright interest in might belong to their employer.” 

Although the Copyright Act of 1976 provides authors with initial copyright interests, under the work-made-for-hire doctrine, it is the employer that is considered to be the author. (Section 201(b)). On the other hand, if the author is an independent contractor or freelancer – rather than an employee – ownership is retained by the individual creator, unless there is a contractual agreement to the contrary. 

For participants in the gig economy, the Dynamex ruling could simply prompt media and software companies to hire fewer independent contractors, and instead only hire people as employees. Although the copyright implications of Dynamex are unknown, the decision underscores the need for employers and workers alike to ensure that any contract for services includes a carefully drafted intellectual property rights clause – especially for those in creative industries.

And finally, for those of us still using our local library…

The Digital Economy Act 2017 (Commencement No 6) Regulations 2018 (SI 2018/690) have passed and will come into force this week in England, Wales and Scotland. The regulations give effect to section 31 (lending of e-books by public libraries) of the Digital Economy Act 2017. This impacts the Public Lending Right scheme, which in the United Kingdom is a programme administered by the British Library intended to compensate authors for the potential loss of sales from their works being available in public libraries.

The new section amends the definition of "lent out" in the Public Lending Right Act 1979 (PLRA 1979) thereby extending it to “communication by means of electronic transmission to a place other than library premises.” Being “lent out” now captures the remote lending of e-books and audio-books, resulting in the extension of the public lending right under the PLRA 1979 to remote lending. The provision also amends the Copyright, Designs and Patents Act 1988. 

Copyright in an e-book or e-audio-book within the public lending right scheme is not infringed when borrowed through a public library, provided that the e-book or e-audio-book in question has been lawfully acquired by the public library. Additionally, the lending must comply with any purchase or licensing terms to which the book may be subject.

The CopyKat - how will broadcasters fight back against the app?

Focussing on the latest trends and the latest technologies means that it is easy to be totally ignorant of what's going on in other parts of the world. So the CopyKat was brought out of orbit by an article in the Financial Express of Bangladesh that says "The mushroom growth of compact disc (CD) shops in cities and rural markets reflects, on the positive side, how dearly the Bangladeshis love music. But it does also indicate, on the other side, the extent of acts of 'piracy'. That provides some good reasons for growing worries over the pirated CDs. In a situation where most songs in CDs are pirated ones, both the government and original composers (of such songs) are deprived of a significant amount of revenue and rightful honoraria, respectively [and] could be raised significantly by implementing the copyright law."

Home to an estimated 144 million people, Russia is the world’s ninth biggest country in terms of population. With a recently booming economy, it should be of major importance to the global music business.Yet according to IFPI data, Russia contributed – in total – just US $72.8m to the recorded music industry last year, across digital, physical and public performance (the UK with less than half that population generated $1.33 billion). Whats worse - the market has declined - it was worth $191 million in 2007. Why - well blame it on piracy, corruption, past government inaction and consumers used to 'free' music. In the era of CDs in the 1990s and 2000s physical piracy was "up to 95% of the market.” And now with digital its worse.  Now a recent flurry of government activity has given some hope to the beleaguered music industry and there have been some recent successes in the courts.  In 2011 it seemed that enforcement of already existing infringement laws (including criminal sanctions) would be stepped up, not least to enhance Russia's position at World Trade Organization negotiations. In 2012 Russia's appellate court held that the massive social networking Vkontakte was liable for copyright infringement, upholding the earlier ruling by the commercial (“Arbitrazh”) Court of Saint Petersburg: in November 2014 Russia’s State Duma, the parliament’s lower house, approved a package of amendments to anti-piracy law, covering video, books, music and software, but not photos and among the amendments there was an initiative under which a Web site owner must delete within 24 hours any illegal content, rather than limit access to it, upon an electronic request from a rights’ owner. Now the Russian High Court has been given the power to order ISPs and website hosting companies to permanently block websites that repeatedly infringe copyright. Alongside the launch of services such as iTunes & Google Play and local music services such as Yandex, Torrent sites have  been sent a final notification from the Russian Government telling them that “the systematic violation of intellectual property rights will result in sites providing access to stolen content being blocked forever” and giving a 1st May deadline.

Pink Floyd's Roger Waters has taken a swipe at Silicon Valley in an interview in the Times (02.05.15) saying that he 'grateful' to have gown up in an age when an artist's hard work and talent were rewarded financially and before the music business suffered a 'takeover by Silicon Valley' saying "when this gallery of rogues and thieves had not yet interjected themselves between the people who aspire to be creative and their potential audience and then steal every f**king cent anybody every mad and put it in their pockets to buy f**king huge mega-yachts and Gulfstream Fives. These ..... thieves! It's just stealing. And that they are allowed to get away with it is just incredible". In 2010 Pink Floyd famously sued their record label, EMI, to withdraw their catalogue from iTunes after Apple's platform refused to sell 'Dark Side of the Moon' and other Floyd albums in their entirety - the band did not want individual tracks sold. Waters also takes a pop at consumers, saying he also blames "a whole generation that's grown up who believe that music should be free". Interestingly record labels don't seem to be in Water's line of fire -despite licensing and often being shareholders in many of the digital services Waters berates and paying royalty rates more appropriate for physical product than digital products.  That said, the tech companies have been clever in spotting just how important music is - and monetising that. One of the most interesting set of financial figures I have ever seen is the growth of Apple after it entered the music market. For a over a decade niche 'geeky' computer manufacturer with near static turnover, almost immediately after the launch of iTunes Apple grew to be the biggest corporation in the world dominating in computers ales, notebooks and mobile phones - with music sales just an ancillary - but an ancillary that undoubtedly made Apple ever such a cool brand. From 1992 to 2004 Apple's turnover grew from $7 billion to $8 billion: The iPlayer launched in 2001 and iTunes in 2003 and 2004. By 2005 Apple's turnover was $14 billion, 2006 19 billion, 2007 $24 billion, 2008 $35 billion, 2009 $42 billion and 2010 $65 billion. Now that is growth!

Next week at The Great Escape in Brighton an illustrious panel featuring our friend and IP specialist Amanda Harcourt and Andy Edwards (Board Director at Music Managers Forum), Horace Trubridge (Assistant General Secretary at Musicians’ Union), Jane Dyball (CEO at MCPS/IMPEL), Rob Collins (Label Director at Cooking Vinyl) and Vicky Bain (CEO of the British Academy Of Songwriters, Composers & Authors) who are going to debate THE DIGITAL PIE putting the spotlight on one of the biggest music industry debates of the moment: the division of streaming revenues between each of the stakeholders in music. How are the monies divided between labels, publishers, artists and songwriters, and asking - is the current system fair and sustainable? More on The Great Escape,  Europe's leading festival for new music here - this panel is on Thursday May 14th part of three days of conference panels, debates, workshops and new bands on show which will also ask 'what's the point of record labels anyway', explain music licensing and  'How to sell out gracefully' and investigate whether 'Music marketing is broken'. 

Daniel Voelker, the lawyer representing the 'Prenda Law' trio of attorneys, Paul Hansmeier, John Steele and Paul Duffy and their associated companies before the 9th Circuit Court of Appeals in the hearing into the earlier ruling of US District Court Judge Otis Wright which led to bruising sanctions and a referral to criminal investigators, is having something of a torrid time: ArtsTechnica has an excellent review but here's a little bit  flavour: "The entire proceeding was tainted," Voelker said. "Mark Lutz, the CEO of Ingenuity 13, was not allowed to testify. As soon as they asserted their 5th amendment rights, the judge stopped the proceeding. He can't use that against them." The appellate court disagreed: "Sure he can," responded US Circuit Judge Richard Tallman. "He can draw adverse inferences. The district court was trying to gather facts. Your clients didn't appear for the first hearing." And "Explain to me in simple English how this operation worked—from the beginning," said US Circuit Judge Harry Pregerson. "How did they make their money? Who ran this operation?" "I don't know," Voelker said. "You don't know anything, do you?" Pregerson said before Voelker persisted in arguing that the proceeding was tainted and that the sanctions should be thrown out entirely and Judge Pregerson said "Let's say you're right," said . "Do you want us to send this back and have this turn into a criminal contempt proceeding?" ..... "With a potential penalty of life in prison for criminal contempt?" asked Judge Tallman. "They're prepared to run that gauntlet?" Well, despite the judges' warnings, it seems the Prenda trio want their day in court. 

With a reported 100,000 people accessing illegal streams of the 'fight of the century' between Floyd Mayweather and Manny Pacquiqao using the new Periscope app, despite an injunction (Temporary Restraining Order) banning two other online services from offering free live streams, the CopyKat is wondering if the tweet from Dick Costolo, the CEO of Twitter, owner of Periscope saying "and the winner is ... Periscope" might come back to haunt him. With 'paid for' access to the fight costing anything from £24.95 here in the UK to upwards of $100 elsewhere, the cost of illegal streams via the likes of Periscope and Meerkat is potentially in the tens of millions of dollars, something that likes of HBO, Showtime and Sky TV, who licensed the exclusive rights to the boxing match, will no doubt be most concerned about. Periscope, which is an app (yes, another complexity!) allows a user to broadcast from where he or she is - for example by pointing his iPhone at a TV screen - has been downloaded over 1 million times and was blamed by HBO for facilitating mass copyright infringement after four episodes of the new series of Game of Thrones were leaked and widely shared using the service. The pay-TV offering reportedly generated over $400 million for official broadcasters. Apart from copyright infringement conundrums, the app and the 'social share' concept raises a host of other issues, privacy being at the forefront as the whole world becomes a broadcaster. Hmmmmmmmmm. Much to muse upon! 

The Shark is back: Techtimes tells us that Grooveshark.com may be no more, but a limited version of the website has reappeared  at Grooveshark.io, providing access to most of the same streaming music as the original Grooveshark, but lacking the playlists and other features. It seems a team of users began backing up all the music on the Grooveshark servers before the streaming service was shuttered last week. The group's leader, who calls himself "Shark," claims he has moved 90 percent of Grooveshark's music to the new site and is working on getting the remaining 10 percent.

And finally - a new book: A Newcomer's Guide to the Music Business is "A quick and simple guide to the music business for those on the verge of taking their first steps into the industry". Written by law graduate and music producer Tito Adesanya, who grew up on a notorious NW London council estate, "the book assists newbies in avoiding the basic mistakes the majority make when entering the music business, while also familiarizing prospective newcomers with industry customs, practices, and the type of working environment they can expect to encounter." And its just £4.99!