Who Owns the Ink?

Author: Jill Ormond

U.S. copyright laws provide creators the rights to (1) reproduce a work, (2) prepare derivative works, (3) distribute copies of the work, (4) publicly perform the work, and (5) publicly display the work. 17 U.S.C. § 106.

Questions related to these rights arise when an artist creates a tattoo either from his/her design or with input from the client and then inks the tattoo on the client. What rights does the artist retain? Do any of the rights pass to the tattoo recipient? If so, what rights pass? With the increasing popularity of tattoos inked on people including celebrities who frequently appear in public and whose images are reproduced, these questions are becoming legal questions for courts to consider. Most recently, the United States District Court Southern District of New York considered these issues in Solid Oak Sketches, LLC (“Solid Oak”) v. 2K Games, Inc. and Take-Two Interactive Software, Inc. (“Take-Two”), Case No. 16-CV-724-LTS-SDA. See March 26, 2020 Memorandum Opinion and Order.

Solid Oak obtained exclusive copyright licenses from tattoo artists for five tattoos the artists inked on professional basketball players Eric Bledsoe, LeBron James, and Kenyon Martin. One tattoo was based on a photograph provided by a player, the other tattoos included traditional tattoo images (grim reaper, flames, basketball, stars, script, and numbers). Each was created with input from the player. The license agreement was done after the designs had been inked on the players. The rights Solid Oak licensed were not for the application of the tattoos to a person but for use in a clothing line that never came to fruition. According to the case record, Solid Oak’s owner testified that before moving forward with selling apparel he would “need permission from the players . . . to not infringe on their right of publicity.”

Take-Two is a video game developer that annually releases a basketball simulation video game that includes realistic renderings of NBA teams and players. Take-Two licenses its rights to depict the logos, uniforms, and players’ likenesses in their video games from the NBA. Solid Oak alleged that Take-Two infringed its copyrights by including the five tattoos on NBA players Eric Bledsoe, LeBron James, and Kenyon Martin appearing in its video games. After licensing the tattoo designs from the artists, Solid Oak sought to impose an obligation on the NBA players and the video game developer working with them to obtain permission from, and pay license fees to, Solid Oak because the players were realistically depicted with their tattoos in video games.

After years of discovery, experts, motions, and analysis, Defendants moved for summary judgment arguing four points. Take-Two’s initial argument was its use of the tattoos was de minimis because the tattoos were but a “fractional, fleeting part” of the game “‘creating realism’ but no more noticeable than a simulated player’s nose shape or hairstyle.’”

Take-Two next contended that its use of the tattoos was authorized by an implied license because both the tattoo artists and players understood when the tattoos were inked the players had the right to display and recreate the tattoos as part of the player’s likeness. Take-Two supported this argument with declarations from each of the tattoo artists. Also supporting this argument, Defendants established that the players gave the NBA the right to license their likeness. The NBA in turn licensed the right to the players’ likenesses to Take-Two.

Take-Two’s third argument was that judgment should be granted on its counterclaim because its use of the tattoos constituted fair use with each of the four factors—“(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work”—weighing in its favor.

Finally, Take-Two argued Solid Oak’s infringement claim failed because it could not establish ownership of a valid copyright since the tattoos were not independently created by the author. Instead, it presented evidence that the tattoos were copies of pre-existing works or included common elements of tattoos.

The court found Take-Two’s de minimis argument persuasive considering the average game play is unlikely to include the players with tattoos, and even when the players were included, the display of the tattoos was so small and indistinct that they could not be identified or observed. The court also noted that the tattoos were not featured in the game’s marketing materials.

Take-Two’s argument that it had an implied license for use of the tattoos because the tattoos were part of the players’ likenesses was also well-taken. Citing Weinstein Co. v. Smokewood Entm’t Grp., LLC, 664 F.Supp.2d 332, 344 (S.D.N.Y. 2009), the court concluded that an implied non-exclusive license would exist “where one party created a work at the other’s request and handed it over, intending that the other copy and distribute it.”. The court noted that the undisputed facts supported a reasonable inference that the tattoo artists necessarily granted the players nonexclusive licenses to use the tattoos as part of their likenesses, and did so prior to any grant of rights in the tattoos to Plaintiff.

Lastly, the court determined Take-Two was entitled to judgment as a matter of law on its counterclaim because the uncontroverted evidence demonstrated that all four fair use factors weighed in favor of Take-Two and its use of the tattoos constituted fair use. Take-Two’s originality argument was considered by the court when reviewing the nature of the copyrighted work factor instead of invalidating Solid Oak’s copyright.

What’s Next?

The Southern District’s ruling could have an impact on similar cases involving the reproduction of tattoos. IP practitioners can take note of the court’s findings not only with litigation concerning tattoos but also when drafting licenses and right of publicity agreements involving tattoos and clearing rights for creative projects.

About the author: Jill Ormond is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on litigation and transactional matters related to the entertainment industry, including film, animation, gaming, music, live performance and literary. Ms. Ormond’s biography can be found here.

SCOTUS Redefines State “Piracy”

Author: Alison Pringle

The Supreme Court recently ruled in favor of keeping state governments immune from copyright infringement lawsuits in Allen v. Cooper (Case No. 18-877). The decision affirmed the Fourth Circuit’s dismissal of a videographer’s infringement claim against the state of North Carolina.

The Shipwreck Footage in Dispute

The copyrighted material at issue involved footage of wreckage from the Queen Anne’s Revenge, famed pirate Blackbeard’s ship that ran aground off North Carolina’s coast in 1718. Videographer Frederick Allen spent over a decade creating videos and photos of the ship’s underwater excavation. Allen later registered copyrights in the works.

The dispute began when North Carolina used Allen’s footage as part of an online marketing campaign. The State hosts frequent Blackbeard-festivals and its Maritime Museum features artifacts from the Queen Anne’s wreckage. The State used Allen’s works to promote its Blackbeard-related tourism.

Lower Court Rulings

Allen sued for monetary damages after the State posted his photos of the shipwreck online allegedly without payment or permission.

North Carolina argued sovereign immunity precluded Allen’s suit against the State and moved to dismiss. The District Court for the Eastern District of North Carolina refused to dismiss Allen’s claims but the Fourth Circuit reversed, finding Congress had not abrogated the States’ immunity from copyright infringement suits.

The Supreme Court affirmed by ruling Congress lacked a valid constitutional basis to abrogate North Carolina’s sovereign immunity under existing legislation. The ruling required a deep dive into constitutional interpretation and congressional power.

Congressional Action and Constitutional Limitations

Generally, under Eleventh Amendment sovereign immunity, federal courts cannot hear lawsuits brought by individuals against a non-consenting state. However, a court may permit such suits if: (1) Congress has enacted “unequivocal statutory language” abrogating the States’ immunity from suit;1 and (2) a constitutional provision allows Congress to encroach on the States’ sovereignty.2

In the early 1990’s, Congress passed two acts abrogating the States’ sovereign immunity with respect to copyright and patent litigation via the Copyright Remedy Clarification Act (“CRCA”)3 and “Patent Remedy Act” (“PRA”)4—fulfilling the first prong for abrogation based on unequivocal statutory language.5 The remaining issue for the Allen Court was whether Congress had the power to abrogate the States’ immunity from copyright infringement suits via the CRCA.

The Court considered two constitutional provisions that would arguably allow Congress to pass such legislation: Article I, Section 8 and Section 5 of the Fourteenth Amendment.

Congress Lacked Authority to Abrogate State Immunity Under Article I, Section 8

Article I, Section 8, Clause 8, also known as the Constitution’s “Intellectual Property Clause,” gives Congress the power to grant copyrights and patents.6 Under this Clause, copyright holders are entitled to certain “exclusive” rights in their creations and generally have the right to exclude others from using their works without permission.

Allen argued the Intellectual Property Clause should be construed as granting Congress the power to pass legislation abrogating the States’ sovereign immunity as to copyright lawsuits. Allen contended the Intellectual Property Clause could not provide an “exclusive” right to copyright holders if government infringers could pillage their works with immunity. According to Allen, it was “antithetical” to allow any government to infringe the rights Congress has secured:

When states infringe the exclusive federal rights that Congress is charged with securing, Congress can make states pay for doing so.7

The Court rejected this argument under precedent from Florida Prepaid v. College Savings Bank, determining that Article I did not confer such power on Congress.8

In Florida Prepaid, the Court ruled Congress lacked the power to abrogate State immunity from patent litigation pursuant to the Intellectual Property Clause. Thus, the Intellectual Property Clause could not support the PRA. The Allen Court extended its Florida Prepaid ruling with respect to the CRCA: Congress could not use its Article I powers to circumvent the limits sovereign immunity places upon federal jurisdiction. In delivering the Allen opinion, Justice Elena Kagan stated:

[T]he power to ‘secur[e]’ an intellectual property owner’s ‘exclusive Right’ under Article I stops when it runs into sovereign immunity.

With the Intellectual Property Clause negated as a potential source of Congressional authority for the CRCA, the Court next turned to the Fourteenth Amendment.

The CRCA Exceeded Congress’s Authority to Abrogate State Immunity Under the Fourteenth Amendment

The Fourteenth Amendment’s Due Process Clause provides that no State shall deprive any person of life, liberty, or property without due process of law.9 As the Court acknowledged in Allen, copyrights are a form of property.

Section Five of the Fourteenth Amendment authorizes Congress to enforce the commands of the Due Process Clause by creating legislation limiting the States’ authority. Thus, Congress can abrogate the States’ sovereign immunity under this clause. However, this abrogation must be “congruent and proportional” to the Fourteenth Amendment injury.10 In other words, Congress must only create remedies that are a proportionate response to the constitutional rights at issue.

The Allen Court ruled the CRCA exceeded Congress’s Section Five authority because it went too far in abrogating sovereign immunity for any and every infringement suit.

The Court looked to the nature and extent of State copyright infringement at the time of the CRCA’s passing in relation to the scope of Congress’s response. The Court found the CRCA’s broad abrogation of immunity was disproportionate where Congress identified only twelve instances of State-instigated copyright infringement. Further, of those twelve instances, only two constituted willful infringement (i.e. sufficient to raise a constitutional issue.).11 In the Court’s view, these examples did not identify a serious constitutional problem justifying complete abrogation of States’ sovereign immunity against infringement claims.

The Court emphasized that, like the PRA, the CRCA was overly broad where it did not set any limits on abrogation. For example, neither statute confined abrogation to suits alleging willful infringement or infringement authorized by state policy. Rather, both the PRA and CRCA impermissibly “exposed all States to the hilt—on a record that failed to show they had caused any discernible constitutional harm (or, indeed, much harm at all).”

Consequently, the Court ruled the CRCA failed the “congruence and proportionality” test. Evidence of Fourteenth Amendment injury supporting the CRCA was “exceedingly” slight and the CRCA’s “indiscriminate scope” was too out of proportion to any due process problem.

Can States Now Use Copyrighted Material Without Permission and With Impunity?

The Allen ruling presents uncertainty for copyright holders who fear States can now use their works without permission and consequence. For example, as the ruling stands, States can theoretically upload and use copyrighted movies and music onto government websites. As Justice Breyer posited to North Carolina’s counsel during oral argument:

What the state decides to do with its own website, charging $5 or something, is to run Rocky, Marvel, whatever, Spider-Man, and perhaps Groundhog Day, all right? Now, great idea. Several billion dollars flows into the treasury. Okay? Now, if you win, why won’t that happen?12

The future of copyright law as it pertains to States is indeed unclear. However, as the Court noted in its opinion, States generally respect copyright law and intentional infringement is uncommon.13 Additionally, while States are currently immune from infringement suits for monetary damages, copyright holders may still seek an injunction against an individual state employee responsible for the infringement under Ex Parte Young, 209 U.S. 123 (1908). Further, any third parties who facilitate or participate in state-sponsored infringement cannot expect immunity.

The Court also suggested States might be subject to private infringement suits in the future. Justice Kagan invited Congress to create new legislation addressing State copyright infringement that, unlike the CRCA, is narrowly tailored and designed to redress or prevent unconstitutional conduct, stating:

That kind of tailored statute can effectively stop States from behaving as copyright pirates. Even while respecting constitutional limits, it can bring digital Blackbeards to justice.

Read the Court’s opinion in its entirety here.

Alison Pringle is an associate in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on intellectual property and commercial litigation, with an emphasis on trademark, copyright, contract, technology, and privacy disputes. She also counsels clients on transactional intellectual property issues. Ms. Pringle’s biography can be found here.
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1 Seminole Tribe of Fla. v. Florida, 517 U. S. 44, 54 (1996)
2 Kimel v. Florida Bd. of Regents, 528 U. S. 62, 78 (2000)
3 Any State “shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal court” for copyright infringement. 17 U. S. C. § 511(a)
4 Also known as the “Patent and Plant Variety Protection Clarification Act”
5 17 U.S.C. § 511(a); 35 U.S.C. § 296(a)
6 “The Congress shall have power … to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Article I, § 8, cl. 8.
7 Transcript of Oral Argument heard November 5, 2019, p. 3:11-14
8 527 U.S. 627 (1999)
9 Amendment XIV, § 1
10 City of Boerne v. Flores, 521 U.S. 507, 520 (1997)
11 In Florida Prepaid and Allen, the Court defined an unconstitutional infringement as “intentional conduct” for which there is no adequate state remedy.
12 Transcript of Oral Argument heard November 5, 2019, p. 36:17-37:2
13 Copyright Office, Copyright Liability of States and the Eleventh Amendment 103 (1988) (Oman Report)

Introducing the Copyright Small Claims Court

Author: Jing Zhao

On October 22, 2019, the U.S. House of Representatives passed the Copyright Alternative in Small-Claims Enforcement Act of 2019, also known as “CASE.” H.R. 2426 S. 1273, 116th Cong. (1st Sess. 2009)

The Senate still has to vote on CASE before it can become law. If successful, CASE will amend title 17 of the United States Code to establish an alternative dispute resolution (“ADR”) program for copyright small claims, and for other purposes. Disputes over copyright claims of relatively modest value may not be efficient in federal court. CASE’s goal is to create a simpler and more affordable judicial process for these disputes.

Here is what CASE seeks to establish.

Who are the Adjudicators?

CASE will establish a Copyright Claims Board (“Board”) in the Copyright Office that will serve as an alternative forum in which parties may voluntarily seek to resolve copyright claims. S. 1273 § 1502(a). The Board will consist of three Copyright Claims Officers. S. 1273 § 1502(b)(1). There will also be at least two Copyright Claims Attorneys to assist in the administration of the Board. S. 1273 § 1502(b)(2).

What claims would the Board review?

Only straight-forward copyright infringement-related claims and defenses, including (1) a claim for infringement; (2) a declaration of noninfringement; (3) a claim for misrepresentation in connection with a notification or counter notification; (4) respective counterclaims; (5) respective legal or equitable defense; or (6) other related claims arising out of the same infringing activity. S. 1273 § 1504(c).

Exceptions to the claims listed above are (1) claims that are pending in a court, or have been finally adjudicated in a court, (2) claims against a Federal or State governmental entity, and (3) claims against persons or entities residing outside the U.S. S. 1273 § 1504(d).

The Board may also dismiss claims that are too complex or too lengthy to administer. S. 1273 § 1505(f)(3).

What remedies would the Board be able to award?

Damages: Actual damages, profits, and statutory damages. S. 1273 § 1504(e)(1). The total monetary award is capped at $30,000 per proceeding, and $15,000 per claim. Id.

Injunctions: Injunctive relief is given in the form of an agreement between the parties, and the agreement can also include monetary awards. S. 1273 § 1504(e)(2).

Attorneys’ fees and costs up to $5,000, or costs up to $2,500 if a party appears pro se. The Board will only award fees and costs when it finds bad faith conduct. S. 1273 § 1504(e)(3).

Effect of the Board’s determination

CASE Actions are subject to judicial review. S. 1273 § 1503(g). Determination does not preclude litigation or re-litigation and should not be cited as legal precedent. S. 1273 § 1507. While a claim is before the Board, if that same claim is also being litigated in a district court, then the district court should issue a stay. S. 1273 § 1509(a).

Additional information about the ADR program

Participation in the ADR program is voluntary, and parties have the right to pursue their claims in court instead. S. 1273 § 1504(a).

Participants do not have to appear in-person. S. 1273 § 1506(c)(1). Unless physical evidence is necessary, all documents are submitted over the internet. S. 1273 § 1506(c)(2). Participants can be represented by an attorney. S. 1273 § 1506(d).

The statute of limitations for the ADR program is the same as that under the Copyright Act, 3 years. S. 1273 § 1504(b).

What other purpose does CASE serve?

The main purpose of CASE is to establish an ADR program. Its other purpose is to establish a study.

Within 3 years of the Board’s first issued determination, the Register of Copyrights shall conduct a study on the effectiveness of the Board on: (1) whether CASE needs any adjustments, particularly with respect to its claims and damages; and (2) whether the Board needs expansion to offer mediation and other ADR services. The Register of Copyrights is to report its findings to Congress.

What are the pros of CASE?

CASE would give independent creators a practical way to enforce their rights without having to hire an attorney or fight the infringement in court. Music makers and songwriters are big supporters of CASE. Other independent creators that would benefit greatly from CASE are photographers, illustrators, graphic artists, authors, bloggers, YouTubers and other types of creators and small businesses.

What are the cons of CASE?

CASE caters to less sophisticated parties, who will likely be self-represented. CASE Actions may expose these less sophisticated parties to potential abuse. For example, a CASE Action might create greater opportunities for claimants to potentially obtain settlements from unsophisticated and unrepresented defendants because many small claims do not involve damages as high as $30,000. The relatively small amount of damages at issue may deter defendants from engaging counsel and more likely to accede to settlement payments to resolve the claims.

Some observers believe that CASE may create a “default judgment mill.” An accused infringer who fails to opt-out within 60 days of receiving notice of a claim is subject to default. S. 1273 § 1506. Unsophisticated parties may not appreciate the implication of a default. However, by the same token, this opt-out provision would allow more sophisticated defendants to avoid the copyright ADR program, forcing claimants into federal court. S. 1273 § 1505(g)(1).

The effect of CASE and whether it achieves the desired results of providing a sensible, affordable forum for small value claims remains to be seen, if and when CASE is passed and signed into law and enacted.

About the author: Jing Zhao is a registered patent attorney and a member of Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Ms. Zhao has a degree in computer science, and her commercial litigation practice focuses on intellectual property and ERISA disputes, with a special interest in emerging intellectual property and other legal issues in the eSports industry. Ms. Zhao’s biography can be found here.