Une astreinte, c’est quoi? The Ninth Circuit has an answer

On September 26, 2016, the Ninth Circuit held that courts have the right under Federal Rule of Civil Procedure 44.1 on determining Foreign Law to consider foreign legal materials at the pleading stage, including expert testimony and declarations. This allowed the Court to conclude that the French astreinte is not a fine or an award of damages, which now clears the way for the French Plaintiffs to receive compensation for copyright infringement. The case is Sicre de Fontbrune v. Wofsy, 3:13-cv-05957.

The case may be more of interest to federal procedure buffs than copyright buffs, but I offer it to your attention anyway as being one of the longest copyright infringement cases ever.

Pablo Picasso had a close relationship with photographer Christian Zervos and allowed him to take many pictures of his works. This led to the publication of the complete catalogue raisonné, published by Cahier d’Art, a publishing company owned by Christian Zervos, then by his heirs. Twenty-two volumes were published from 1932 to 1970, when Picasso was still alive, and eleven more volumes were published after his death. The thirty-three volumes reproduce some 16,000 of Picasso’s works and are regarded as the ultimate reference of Picasso’s work.

Yves Sicre de Fontbrune, now deceased and represented by the representatives of his estate, bought Cahier d’Art’s publisher  stock in 1979, thus acquiring the intellectual property right in the Zervos catalogue raisonné. Alan Wofsy is an American art editor who reproduced some of Zervos’ photographs in two volumes about Picasso, which he presented in 1996 at the annual Salon du Livre (book fair) in Paris. Mr. Sicre de Fontbrune found this use to be infringing and filed suit in 1996. The Paris Court of appeals ruled in his favor in 2001, awarding him an astreinte and forbidding Alan Wofsy “to use in any way whatsoever [the Zervos photographs] under an astreinte of 10,000 francs per infringement.

« Fait défense à Monsieur Alan WOFSY et à la société ALAN WOFSY & ASSOCIATES de faire usage de quelque manière que ce soit des photographies susvisées sous astreinte de 10.000 francs par infraction constatée, dans les 8 jours suivant signification de la présente décision. »

Under French law, an astreinte is a tool given to the judge so that she can insure that the court’s ecision will be executed. It is independent from damages, as stated by article 34-1 of the July 9, 1991 law, now abolished and replaced by article L. 131-2 of the Code des procedures civiles d’exécution which states the same.

Mr. Sicre de Fontbrune filed a claim at the Paris Court of first instance (TGI) to enforce the astreinte. The Court ruled in his favor in 2012 and ordered Alan Wofsy to pay him 2 million euros in astreinte. Mr. Sicre de Fontbrune then filed a suit in California to enforce the astreinte under the California Uniform Foreign-Court Monetary Judgment Recognition Act (CUFCMJRA), which governs the enforcement of foreign-country judgments which are final and enforceable, and which grant or deny monetary recovery.

Translation of astreinte leads to legal discussion

The English versions of both 2001 Paris Court of appeals judgment and the 2012 Paris TGI’s judgment had translated astreinte as an award of damages. Mr. Wofsy moved to dismiss, arguing that an astreinte is a “fine or other penalty” and that therefore the CUFCMJRA does not apply, as it does not apply to foreign judgments granting a “fine or other penalty.” The District Court granted his motion to dismiss, after having considered the declarations of the experts of both parties on the nature of astreinte in French law. The Ninth Circuit reversed and remanded, as it found an astreinte not to be a “fine or other penalty” under the CUFCMJRA.

Federal Rule of Civil Procedure 44.1 on determining Foreign Law

Federal Rule of Civil Procedure 44.1 on determining Foreign Law gives power to a federal court to “consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence [when determining foreign law]. The court's determination must be treated as a ruling on a question of law.”

The Ninth Circuit found that Rule 44.1 gives the courts a “broad mandate” and that “foreign legal materials-including expert declarations on foreign law can be considered in ruling on a motion to dismiss where foreign law provides the basis for the claim.”

The California Uniform Foreign-Court Monetary Judgment Recognition Act

The Ninth Circuit then undertook the study of the nature of the astreinte in the French legal system, in general, and in particular in this case. To do so, the Court considered the French judgment against Wofsy, the expert declarations of both parties, and materials on astreinte submitted by both parties. It also undertook its own research into American and French law. It concluded that the astreinte was not a fine or an award of damages and thus fell within the scope of the CUFCMJRA.

An easy method to transfer money internationally

The case is interesting as it specifically states that courts may undertake independent judicial research, including research on foreign law, beyond the parties’ submissions (see p. 15). U.S. courts are slowly warming up to the idea of considering foreign law. Justice Stephen Breyer, from the U.S. Supreme Court, published about a year ago a book about the foreign laws which the U.S. Supreme Court Justices have had to consider in the past, which was probably read by many U.S judges.

P.S. The Ninth circuit quoted the United States v. 594,464 Pounds of Salmon, More or Less case, which must be one the best names ever for a case. If any reader knows about a case with a better name, please share it in the comments.

Image of the flags courtesy of Flickr user Pierre Augustin under a CC BY-NC-ND 2.0 license.

Image of money courtesy of Flickr user Devon D’Ewart under a CC BY-NC-ND 2.0 license.  

The CopyKat - that not quite so secret TPP Agreement is back in the news

China's copyright regulator has said that the online music copyright situation has improved since it ordered music providers to remove unlicensed songs in July. Music steaming services had removed more than 2.2 million unlicensed songs as of Friday, said the National Copyright Administration (NCA). Internet companies have also improved their efforts in copyright cooperation, said the NCA. However many commentators such as Billboard saying piracy remains a major issue saying "Well, that deadline has passed, and sites like VeryCD, which allows illegal downloads, and the popular QQ for streaming, are still up and running and still serving up artists like The Beatles". 

Torrent Freak have led with an article headlined "iTunes illegal under UK cpoyright law": TF reached out to the UK Intellectual Property Office, which provided some very clear answers on the recent decision in BASCA v Secretary of State for Innovation and Skills [2015] EWHC 1723 (Admin) saying: “It is now unlawful to make private copies of copyright works you own, without permission from the copyright holder – this includes format shifting from one medium to another,” a spokesperson informed us. The IPO specifically notes that copying a CD to an MP3 player is not permitted. TF says this  means that iTunes’ popular ripping feature, which Apple actively promotes during the software’s installation, is illegal.

The Trans Pacific Partnership Agreement (TPP) continues to attract interest and comment - almost all negative. The latest leaks have revealled that there is a widening disagreement between member nations on the deal’s 'draconian' copyright and intellectual property (IP) provisions which appears to be a split between the USA and almost all of the other 11 potential signatories on a number of copyright provisions. The 12-nation trade pact would put nearly 40 percent of global trade under a trade agreement aimed at spurring growth and closer trade ties between the Asia Pacific region and Western Hemisphere countries. The US's moves to extend the term of copyright beyond life of author plus 70 years is being resisted as are the text that allows authorities to seize and destroy equipment that infringe copyright, as well as “materials and implements relevant to the infringement” such as computers or servers that host such materials. The leak reveals that the U.S. is opposing a measure that would limit these laws to goods “predominantly” used in infringement, instead calling for the seizure and destruction of equipment that committed only 'minor infractions' of these laws according to the International Business Times. TechDirt takes a different tack, looking at the USA's resistance to 'fair use' provisions with the headline "Why Does The TPP Repeatedly Require Stronger Copyright, But When It Comes To Public Rights... Makes It Voluntary?" saying what the USTR is really proposing is a limit on fair use by proposing a rule that would act as a ceiling for the kind of fair use-like protections for the public and making any provisons (in effect) voluntary by using the qualifications that signatories 'shall endeavour' to bring in a fair use scheme - almost all other provisions in the next must be incorporated into signatnories' domestic laws. A Canadian perspective here.

The EFF say this: "For starters, countries are resisting U.S. negotiators' audacious proposal to distort trade secrets law into a weapon against hackers, journalists, and whistleblowers. There are two new proposals in this leaked text, one of which the U.S. itself supports, to allow countries to adopt a narrow safe harbor for whistleblowers in respect of information that exposes a violation of the law. But this is far from enough. The safe harbor isn't compulsory and it doesn't apply to leaks of information that are of vital public interest, but that don't expose illegality—such as the TPP text itself. Another important area of dissent from the U.S. negotiators' hard line appears in the Enforcement section of the IP chapter, in which every single country is now lined up against the U.S. in favor of a remedy for victims of wrongful copyright abuse" with the EFF posing the question "one has to ask why the U.S. administration wishes to prevent its trading partners from adopting a basic protection for victims of copyright trolls that already exists in U.S. law".

Those Turtles

The New York State Broadcasters Association has filed an amicus brief in the Second Circuit U.S. Court of Appeals in case betwewen sixties pop stars the Turtles (Flo & Eddie - Howard Kaylan and Mark Volman) and SiusXM, contesting the lower court's assertion in dicta that the performance rights being established under common law might apply to broadcast radio as well and  arguing that New York state law does not support a common law performance right in sound recordings and saying that upholding such rights would be "impractical and destructive."  "(T)he District Court’s sweeping alteration of the law is unsupported by prior case law, legislative history at the federal level, and the history of the recording and broadcasting industries in New York State," the NYSBA says, adding that "broadcast radio is fundamentally different from satellite radio; broadcast radio is not subscription based and has been a fixture in the music industry for decades.  In fact, broadcast radio is the very medium that made Respondent’s music famous by disseminating it to the public at large at no cost." The brief also argues that "the District Court fashioned a new common law performance right in sound recordings that heretofore never existed," the brief asserted that radio airplay sells music and that common law copyrights for sound recordings have never included performance rights but only against unauthorized reproduction.  And the brief argued that ruling to expand the imputed performance right would result in "financial distress for broadcasters, perverse incentives for artists, and uncertainty for everyone". More here and here. Having prevailed in Claifornia and New York in establishing that state laws protect the public performance of pre-1972 sound recording,  the litigants lost their claim for common law protection of pre-1972 sound recordings in Florida where the judge said no law existed to protect such rights and that the coirt was not disposed to create a new property right which is a matter of the legislature.

Ray Charles

And finally, the United States Court of Appeals for the Ninth Circuit has 'breathed new life' into a case highlighting an interesting intersection of the worlds of estate planning and copyright law. The case in question was initiated in 2012 by the Ray Charles Foundation against 7 of the musician’s 12 children, to block their attempted terminations of copyrights in 51 of Charles’ songs, including “I Got A Woman” and “Hallelujah, I Love Her So.” to get the return of the copyrights. The charitable Foundation was Charles’ sole heir and received the entirety of his estate, including the rights to receive royalties for his songs.  Charles' children, each got a trust worth $500,000 apiece shortly before his death and were required to sign written contracts effectively waiving their rights to any other inheritance. Regular readers will recall the termination right the children are attempting to assert is created under the U.S. Copyright Act of 1976 which allows an artist or his surviving heirs to terminate a copyright 35 years after it was granted.  The Ninth Circuit has now reversed the lower court’s dismissal of the Foundation claim, ruling that the foundation had standing since it receives royalties from the copyrights held by Warner/Chappell Music and so had  standing as a “real party in interest” ruling “It is undisputed that copyright ownership lies with Warner/Chappell, but just as the termination notices affect Warner/Chappell’s ownership of copyrights, they also directly affect the foundation’s right to royalties” and “The foundation is the sole recipient of royalties flowing from Charles’s copyright grants and effective termination would deprive it of the right to receive prospective royalties. We thus have little difficulty concluding that the foundation is litigating its own stake in this controversy.": (Ray Charles Foundation v. Raenee Robinson et al., case number 13-55421, in the U.S. Court of Appeals for the Ninth Circuit.). 

Alex in La La land

This year's Sir Hugh Laddie Annual lecture at UCL's Institute of Brand and Innovation Law (IBIL) was given by the distinguished American judge Alex Kozinski, lately Chief Judge of the US Ninth Circuit. In an introduction given by Daniel Alexander QC (standing in for Sir Robin Jacob who had been delayed), we heard that the Ninth Circuit covers an enormous area stretching from Alaska to Arizona and to Hawaii and Guam with a population of 60 million people within its jurisdiction.

But as Judge Kozinski himself pointed out in his opening remarks, perhaps more significantly the Ninth Circuit includes those two power houses of American creativity and innovation, Hollywood and Silicon Valley. Not for nothing is it also known as the Hollywood Circuit. This means that a lot of important intellectual property cases have been decided by the Ninth Circuit, along with quite a few less worthy ones. The title of the lecture was IP and Advocacy, but it might have been subtitled "Keep it simple, stupid". In an amusing all singing (literally) lecture Judge Kozinski encouraged IP advocates to keep their pleadings and submissions simple, and preferably illustrated by means of helpful analogies which the bench could relate to. I suspect that Sir Richard Arnold who was sitting in the front row might have permitted himself a wry smile at this suggestion. Judge Kozinski then followed his own preaching with an example of what he meant. He cited the case of Galoob v Nintendo, in which Nintendo had alleged that Galoob's add-on software named Game Genie which alowed players to vary the way in which Nintendo's games could be played, infringed Nintendo's copyright. He quoted from the introductory paragraphs of Galoob's submission to the Appeal Court, which was couched in terms of a story about a young teenage girl who perfectly legally read the last page of her book before deciding to start from the beginning, once she was sure it had a happy ending; she subsequently watched a video, and fast-forwarded to the part where she had finished watching previously, and after this she plugged in the Nintendo game cassette along with the Game Genie software and was able to alter certain characteristics of the game, and also jump to a level she had not previously reached. None of these actions resulted in any alteration of Nintendo's code or made copies of it, just as reading the last page of the book or fast-forwarding the video had not infringed the respective copyright in those works. Judge Kozinski said that by means of these few simple sentences, Galoob's counsel had illustrated the futility of Nintendo's case, even though the submission then ran on for another 50 pages or so.

Further amusing examples were quoted, in which we were treated to such musical delights as Johnny Mathis singing When Sunny gets Blue (Fisher v Dees), and Aqua singing I'm a Barbie Girl. The latter was in the context of the case Mattel Inc v MCA Records in which Mattel who make the Barbie doll, sued MCA Records over the Aqua song, instead of realising this was excellent free publicity for their product. Or in the words of Judge Kozinski, they should have just sent over a bottle of Dom Pérignon to MCA. This was the famous case in which the Ninth Circuit court proffered the following advice within their opinion "the parties are advised to chill". Clearly Mattel's lawyers thought otherwise and petitioned the US Supreme Court although SCOTUS declined to hear the case. Judge Kozinski made the point that too often in IP cases the author of the work is too personally involved and affronted by the alleged infringement and so overlooks the bigger picture. He went on to develop the point by saying that seldom is it the case that the dire consequences which plaintiffs argue actually come to pass. From the time of Gutenberg, vested interests have opposed virtually all technological advances, but their fears have proved groundless. He didn't mention the RIAA and the major record labels but few in the audience can have been unaware of the unstated criticism.

Yet more examples were used to illustrate the point: Vestron v HBO on the futility of injunctions in some cases; Sony v Universal City Studios (the Betamax case) on the contention that disasters predicted by plaintiffs seldom turn out as bad as is first claimed - in that case the home theatre market proved to be a goldmine for the creative industry, not its nemesis.

And as I predicted elsewhere, Judge Kozinski then came to the Garcia v Google case. This has been extensively reported here on 1709 and on the IPKat blog and so I won't summarise the case here. However Judge Kozinski saw this as yet another instance where the dire things claimed in submissions never actually happened. This sounded a little like the judge rowing back from his own first appeal court decision to injunct YouTube over the Innocence of Muslims trailer. This was touched on in a question at the end, when the Judge was asked if there had ever been a decision he later changed his mind over. The response was that a court's opinion stands still and reflects the facts at the time, but person who makes the decision moves on and and may develop his views over time.

The lecturer then went on to discuss a couple of cases involving the Right of Publicity, of which the California Celebrities Rights Act is a more comprehensive example. Here the quoted cases were White v Samsung, Wendt v Host International and Douglas v Mattel. He then mentioned the case of New Kids on the Block v News America Publishing Inc in which the defendant ran a poll to find out which member of the group New Kids on the Block was the most popular. This led to News America being sued over issues of trade mark and false endorsement, to which the Ninth Circuit, in an opinion written by Judge Kozinski, developed the doctrine of 'nominative fair use'.

The lecture drew to a close with a brief analysis of when the law is not necessarily the answer. In particular Judge Kozinski highlighted the Streisand effect and also the effectiveness of a well-organised public backlash against an over-zealous litigant, who while he may have the law on his side, can do great damage to his brand by appearing to bully the little guy. In this context he mentioned the trade mark dispute between Vermonster beer and Monster energy drink, and the European case of Louis Vuitton v Plesner (reported here by the IPKat blog).

As perhaps befits a judge from the Hollywood circuit it was a most entertaining evening and a candid look at one face of the American IP legal machine at work.

Veoh ruling adds clarity to US 'safe harbor'

The Ninth Circuit Court of Appeals in the US has issued a clarifying judgment in the action brought by Universal Music Group (UMG) against Veoh. The case explores issues similar to Viacom vs. Youtube and gives further clarity to how the doctrine of "safe harbor" protection from copyright claims under section 512 of the Digital Millennium Copyright Act will be applied.

The clarification follows on from the December 2011 judgment the court gave, where it said that Veoh was protected from copyright liability, and broadly brings the Veoh decision into line with the Second Circuit’s more recent decision in YouTube.

UMG  had pushed three main arguments against Veoh’s right to qualify for safe harbor: 

1.  The appellant argued that the functions performed automatically by Veoh's software didn't fall within the plain meaning of "infringement of copyright by reason of the storage [of material] at the direction of a user." Universal had promoted the theory that the DMCA should be interpreted narrowly to apply to web hosting services, rather than more general services that including hosting capabilities. 

For the Ninth Circuit, Judge Raymond Fisher disagreed :

"UMG's theory fails to account for the reality that web hosts, like Veoh, also store user-submitted materials in order to make those materials accessible to other Internet users. The reason one has a website is so that others may view it. As amici note, these access activities define web hosting - if the web host only stored information for a single user, it would be more aptly described as an online back-up service." 

See no evil, hear no evil .....

2.  UMG also challenged the contention that Veoh was never made aware of infringing material on its network. One reason why the music giant was unsuccessful in the lawsuit at the District level was because Veoh was able to show that it had removed materials after receiving takedown notices; However Universal also pointed to other ways Veoh could had gained knowledge of infringements on the website. 

Judge Fisher noted there are music videos that could legally appear on Veoh and that it's the responsibility of the copyright holder to let the ISP know of what's not legal. 

Safe? With all those rocks?

"Requiring specific knowledge of particular infringing activity makes good sense in the context of the DMCA, which Congress enacted to foster cooperation among copyright holders and service providers in dealing with infringement on the Internet. Copyright holders know precisely what materials they own, and are thus better able to efficiently identify infringing copies than service providers like Veoh, who cannot readily ascertain what material is copyrighted and what is not". 

The ruling continues:

"We therefore hold that merely hosting a category of copyrightable content, such as music videos, with the general knowledge that one's services could be used to share infringing material, is insufficient to meet the actual knowledge requirements....We reach the same conclusion with regard to the [DMCA provision's] inquiry into whether a service provider is 'aware of facts or circumstances from which infringing activity is apparent...'. We hold that Veoh's general knowledge that it hosted copyrightable material and that its services could be used for infringement is insufficient to constitute a red flag." 

Judge Fisher added that a service provider cannot "wilfully bury its head in the sand" -- known as wilful blindness - but saw no evidence of this 

3.  Finally, Universal Music challenged whether Veoh qualified for safe harbor under the provision that entitles an ISP only if it "does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity. Here Judge Fisher seems to put the Ninth Circuit in line with the Second Circuit and the YouTube case: 

"We agree with the Second Circuit and hold that, in order to have the 'right and ability to control such activity' the service provider must 'exert substantial influence on the activities of users.' 'Substantial influence' may include, as the Second Circuit suggested, high levels of control over activities of users, as in Cybernet. Or it may include purposeful conduct as in Grokster" and Veoh's interactions with users didn't rise to that level, the judge said.

https://www.eff.org/deeplinks/2013/03/win-safe-harbors-umg-v-veoh and 
http://www.hollywoodreporter.com/thr-esq/appeals-court-hands-veoh-win-428588