SDNY: Instagram Sublicense Protects Against Liability for Embedding of Public Posts

Author: Kara Kaplan

As is the case for most social media networks, photos and videos can be shared in seconds and thousands of users can view the same image or video within the first few moments after clicking the post. And, in a matter of minutes, that new funny photo or quarantine workout can be shared with hundreds of followers.

So, how are intellectual property rights being protected in the chaos of evolving social media? More specifically, what is the effect on your intellectual property rights if you have a public profile? In a recent decision, Sinclair v. Mashable Ziff Davis, LLC and Mashable, Inc., No. 18-CV-790 (KMW), 2020 U.S. Dist. LEXIS 64319, at *2 (S.D.N.Y. Apr. 13, 2020), the United States District Court for the Southern District of New York ruled that a photographer’s public Instagram post could be used on other websites, without her prior approval, as a result of Instagram’s Terms of Use.

Copyright & Instagram – Terms of Use

Instagram is one of the most popular social media platforms to date. It allows members to access and share photographs or videos. Accounts can be either private or public. Private accounts require the account holder’s permission to follow the account and see posts or stories. Public accounts do not, and posts are readily available for anyone to see.

In the past, it has been generally understood that in order to avoid copyright infringement, you should obtain permission prior to re-posting or sharing an image, story or video on social media platforms. However, the court in Sinclair concluded that Plaintiff’s claims against Mashable, who re-posted Sinclair’s public Instagram post containing a photograph on Mashable.com, failed as a matter of law and granted Mashable’s motion to dismiss even though Mashable did not have direct authorization from Sinclair for the re-post.

Plaintiff Stephanie Sinclair is a gender and human rights photographer known for her visual expressions of those issues around the world. In this case, Sinclair claimed she owns an exclusive United States copyright in the image titled “Child, Bride, Mother/Child Marriage in Guatemala,” a photograph she took herself and posted to her public Instagram page.

Defendant Mashable, an entertainment and media website, contacted Sinclair and sought a license for that photograph to use in an article for publication on its website. Sinclair was offered $50 for licensing rights. She declined the offer. Mashable posted the article and used Sinclair’s photograph anyway. Sinclair demanded the photograph be taken down, Mashable refused and the lawsuit ensued.

Mashable filed a motion to dismiss the operative complaint, on the primary grounds that it was a sublicensee of Instagram, who granted Mashable sublicensing rights for the re-post. The court agreed, holding that Mashable’s re-post of the photograph was authorized pursuant to a valid sublicense from Instagram.

It is well-recognized that a copyright owner may license her rights to works. And where those licenses permit sub-licenses, the copyright owner cannot bring an infringement lawsuit against that sublicensee. United States Naval Inst. v. Charter Commc’ns Inc., 936 F. 2d 692, 695 (2d Cir. 1991).

Here, the Court reasoned that when Sinclair created an Instagram account, she agreed to Instagram’s Terms of Use. Instagram’s Terms of Use state that all users, including Sinclair, “grant to Instagram a non-exclusive, fully paid and royalty-free, transferrable, sub-licensable, worldwide license to the Contract that you post on or through [Instagram], subject to [Instagram’s] Privacy Policy,” which details the difference between a public and private account.

The important and relevant difference in this case, and between a private and public account, is Instagram’s API. The API allows public posts to be searchable, subject to use, and enables users to embed public content on their websites. Ultimately, because Sinclair posted “Child, Bride, Mother/Child Marriage in Guatemala” on her public Instagram page, she agreed to permit websites, including Mashable, to embed her photograph to its website. According to Instagram’s Terms of Use, such websites are Instagram’s sublicensees.

Sinclair’s rejoinder was that the user agreements are “circular,” “incomprehensible,” and “contradictory;” but the Court disagreed and ruled in favor of Mashable, citing precedent where many similar types of terms of use are upheld as enforceable agreements. The Court stated, “by posting the Photograph to her public Instagram account, [Sinclair] made her choice. This Court cannot release her from the agreement she made.” This case certainly is neither the first nor the last to arise as a result of an Instagram post. Critics argue that this ruling could be detrimental to the creative individuals who rely upon social media exposure for business promotion and growth, while proponents laud the ruling as furthering the social nature of social media platforms like Instagram—i.e., to share content among users.

About the author: Kara Kaplan is an associate in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on transactional and litigation matters involving copyrights, trademarks, and trade secrets. Ms. Kaplan’s biography can be found here.

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)

SCOTUS Grants Google’s Cert Petition in Oracle API Dispute

Author: Mary E. Csarny

On November 15, the Supreme Court granted certiorari in Google v. Oracle, indicating potential resolution on the contentious litigation that has been dubbed Silicon Valley’s “Lawsuit of the Decade.”i On January 6, 2019, Google filed its Petitioner Brief, with Respondent Oracle’s brief due next month.

Background

As followers of this litigation will recall, Oracle sued Google in 2010, alleging Google’s use of the Java programing language and declarations (specifically 37 Java APIs) in building the Android platform amounted to copyright and patent infringement.ii A victory for Oracle would not only result in significant damages for unpaid royalties, but also impact the future of API use. At the District Court, a jury determined Google did infringe the copyright as to the compilable code for the 37 Java API packages, and then deadlocked on the issue of whether the use constituted fair use. The jury found no copyright infringement as to the documentation for the Java API packages, but found infringement as to one snippet of code. However, on the issue of copyrightability of the APIs generally (which was simultaneously tried to the presiding District Court judge), Judge William Alsup concluded that APIs were not copyrightable in the first place as a matter of law.iii The jury found no patent infringement.

On appeal, the Federal Circuit considered the Copyright Act’s legislative history explaining that literary works subject to copyright protection include computer programs to the extent that the expression of original ideas is distinguished from the ideas themselves.iv The Federal Circuit reversed, holding that the structure, sequence, and organization of an API is copyrightable and remanded on the issue of whether Google’s use was a permissible fair use.v Following this reversal, Google filed its first petition for writ of certiorari, with the Supreme Court’s inviting the U.S. Solicitor General to express the United States’ views regarding whether the petition should be granted. The Court denied the petition in accordance with the Solicitor General’s position that no review was necessary.

On remand from the Federal Circuit, a jury determined Google’s use of the 37 Java APIs was protected by the fair use doctrine. Oracle appealed and the Federal Circuit overturned the jury verdict holding that, as a matter of law, Google’s use was not protected by the fair use doctrine.vi

Google’s second and current petition for a writ of certiorari raises two issues: (1) Whether copyright protection extends to a software interface; and (2) whether, as the jury found, the petitioner’s use of a software interface in the context of creating a new computer program constitutes fair use.

What’s Next

When viewed alongside its June 2019 grant of certiorari in Georgia v. Public Resource Org., Inc.vii concerning the copyrightability of legislative annotations in light of the government edicts doctrine, the Supreme Court’s grant of certiorari may indicate a willingness to re-examine copyrightability. The Court’s 21st century copyright jurisprudence has generally favored strengthening protections for copyright holders.viii Indeed, its initial refusal to grant Google’s first petition for certiorari following the Federal Circuit’s holding that APIs are copyrightable at least passively reinforced a broad approach to copyrightability.

The Court’s most recent copyright decisions rely on textualist reasoning and were both unanimously decided. It upheld the lower court’s reliance on the plain text of 17 U.S.C. § 411(a) requiring “registration” (rather than application for registration) to occur before commencing an infringement suit in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, et al.I,ix and limited the statutory damages for copyright infringement to those six categories of costs provided in the federal statute authorizing district courts to award costs in Rimini Street, Inc., et al. v. Oracle USA, Inc., et al.x Although the present matter does not present so obvious a conclusion as Fourth Estate and demands a more technical analysis than required in Rimini Street, the Justices’ textualism in both cases instruct followers of this matter to give particular credence to the parties’ textual arguments. Although much of the narrative surrounding this litigation has focused on the practical impact on technology and innovation,xi the litigants focus briefing on the Copyright Act’s text and judicial interpretation. Google’s petition for certiorari cites the Copyright Act’s exclusion of “method of operation[s]”xii and the correlating legislative history arguably demonstrating Congress’ intent “‘to make clear that the expression adopted by the programmer is the copyrightable element in a computer program’ while ‘the actual processes or methods embodied in the program are not within the scope of the copyright law.’”xiii Oracle, too, presents at least one textualist argument, pointing out that the Copyright Act covers “literary works,” defined as works “expressed in words, numbers, or other verbal or numerical symbols.”xiv

The Court’s last attempt to consider whether innovation in the software space was entitled to copyright protection ended in deadlock,xv but the court has since replaced six justices who appear willing to reface this challenge. Justice Kavanaugh has entered the fray of copyright jurisprudence by authoring the recent Rimini Street, Inc. decision and before his appointment Justice Gorsuch faced the issue of copyrightability of new technologies in the 10th Circuit, where he faced the issue of whether a party held a valid copyright on digital models.xvi He drew guidance from prior Supreme Court reasoningxvii regarding the copyrightability of photographs, finding instructive the Court’s application of copyrightability standards to the new technology of the day.xviii Justice Gorsuch’s conclusion in Meshwerks, that digital models can possess the originality required to be fully protectable in copyright but the particular digital models were not copyrightable might predict his approach to the copyrightability issue in Google v. Oracle.xix

No matter the outcome on the copyrightability and fair use questions raised in Google’s petition, the decision in this case is a much anticipated resolution to the decades-long dispute and could mark a new beginning for the use of software interfaces.
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i Ward, Aaron “Google v. Oracle: Silicon Valley Braces for ‘Lawsuit of the Decade’ as Google Petitions for Cert to decide API Copyrightability” Jolt Digest (March 13, 2019). https://jolt.law.harvard.edu/digest/google-v-oracle-silicon-valley-braces-for-lawsuit-of-the-decade-as-google-petitions-for-cert-to-decide-api-copyrightability.
ii Oracle America, Inc. v. Google Inc., 3:10-cv-03561-WHA (N.D. Cal. Aug. 12, 2010).
iii Oracle Am., Inc. v. Google Inc., 872 F. Supp. 2d 974 (N.D. Cal. 2012).
iv Oracle Am., Inc. v. Google Inc., 750 F.3d 1339, 1354 (Fed. Cir. 2014).
v Id., 1381.
vi Oracle Am., Inc. v. Google LLC, 886 F.3d 1179, 1210 (Fed. Cir. 2018).
vii Georgia v. Public.Resource.Org, Inc., 139 S. Ct. 2746 (June 24, 2019).
viii See “Institutional Fracture” Minnesota Law Review 102:803, 820-821 (2017).
ix Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, et al., 139 S.Ct. 881 (2019)
x Rimini Street, Inc., et al. v. Oracle USA, Inc., et al, 139 S. Ct. 873 (2019).
xi See Hardy, Quentin “Oracle-Google Dispute Goes to Heart of Open-Source Software” NY Times (May 19, 2016) (https://www.nytimes.com/2016/05/20/technology/oracle-google-dispute-goes-to-heart-of-open-source-software.html); Liptak, Adam “Supreme Court to Hear Google and Oracle Copyright Case” NY Times (Nov. 15, 2019) (https://www.nytimes.com/2019/11/15/us/supreme-court-google-oracle.html).
xii 17 U.S.C. 102(b)
xiii Supreme Court Docket No. 18-956, Petition for a Writ of Certiorari p. 17 (citing H.R. Rep. No. 1476, 94th Cong., 2d Sess. 56-57 (1976); S. Rep. No. 473, 94th Cong., 1st Sess. 54 (1975)).
xiv Supreme Court Docket No. 18-956, Brief in Opposition, p. 13 (citing 17 U.S.C. 102(a); 101).
xv Lotus Dev. Corp. v. Borland Int’l, Inc., 516 U.S. 233 (1996)
xvi Meshwerks, Inc. v. Toyota Motor Sales U.S.A., Inc., 528 F.3d 1258 (10th Cir. 2008)
xvii Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884)
xviii Id., 1263.
xix Id. 1266.

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.

Is Playing a Video Game on YouTube a Public Performance?

Author: Jing Zhao

In October 2017, Epic Games sued Konstantin Vladimirovich Rak and two other individuals.1 You may have never heard of Epic Games, but you have likely heard of Fortnite – an online battle-royale game that has become widely popular among the teen and pre-teen populace. Epic Games is Fortnite’s developer and publisher.

The Defendants in Epic Games’ lawsuit created software cheats that allowed players to modify Fortnite to give themselves competitive advantages—known as “cheats” in gaming parlance—over other players. Mr. Rak then created and posted a video on YouTube to advertise his cheats. The video features gameplay and a demonstration of the cheat in action. This was the hook Epic Games needed. In its lawsuit, Epic Games alleges copyright infringement by accusing Defendants of “displaying Fortnite publicly without Epic’s permission.”2

The copyright violation Epic Games refers to is based on 17 U.S.C. § 106(4), which states “[the owner of copyright under this title has the exclusive rights to do and to authorize] in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly.”3

On Epic Games’ Motion for Default Judgment, the United States District Court for the Northern District of California touched upon the “fundamental question of whether playing a video game and posting footage of that gameplay to YouTube, constitutes ‘perform[ing a] copyrighted work publicly’ for the purposes of 17 U.S.C. § 106(4) in the first place.”4 While the Court declined to make a ruling, it did not grant default judgment to Epic Games.5 By late 2018, Epic Games voluntarily dismissed this case.

This raises the question: is playing a video game and posting it online for others a public performance that violates copyright?

In 1989, the Fourth Circuit Court of Appeals in Red Baron-Franklin Park, Inc. v. Taito Corp., found an arcade infringed a video game company’s copyright on a video game when the arcade purchased the video game circuit boards without consent for use in its arcades. The court ruled that video games qualify as an “audiovisual work” as defined by 17 U.S.C. § 1016 and a performance upon activation.7 Thus, the court concluded that playing the video game in an arcade constitutes “public performance.”8

In 1996, in Allen v. Academic Games League of America, Inc., a game developer for board games sued a nonprofit organizer of a tournament for students playing the board game.9 The plaintiff alleged the organizer violated his 17 U.S.C. § 106(4) right to publicly “perform” his games. The Ninth Circuit Court of Appeals affirmed summary judgment in favor of the defendant, holding “the interpretation of ‘play,’ as used to define ‘perform’ in § 101 of the Copyright Act, has generally been limited to instances of playing music or records.”10 The court refused to extend the term “play” to “the playing of games” because “[t]o do so would mean interpreting the Copyright Act in a manner that would allow the owner of a copyright in a game to control when and where purchasers of games may play the games and this court will not place such an undue restraint on consumers.”11

In 2004, in Valve Corp. v. Sierra Entertainment, Inc., the game developer and publisher Valve sued another game developer and publisher Sierra Entertainment for breach of a software publishing agreement involved in Sierra Entertainment’s distribution of Valve’s game in a cyber-café.12 The District Court for the Western District of Washington addressed, in passing, the right to publicly perform video games. Rejecting Sierra Entertainment’s reliance on Allen in its argument that playing video games in public is not a public performance, the court interpreted Allen’s ruling as “whether the performance is fee-based is an important factor in determining whether the performance is public.”13 The court declined to make a definitive ruling on whether playing video games constitutes a public performance, but noted “Red Baron involved the same ‘pay-for-play’ gaming transaction that is at issue in this case [involving playing a video game in a cyber-café].”14

In 2010, in Miller v. Facebook, Inc., the plaintiff is Miller, a software developer and owner of the copyright of a video game called “Boomshine.”15 Miller sued an individual, Yao Wei Yeo, who unlawfully reproduced the “look and feel” of Miller’s game and distributed the game, under the name “ChainRxn,” through Facebook.16 The United States District Court for the Northern District of California held that “Yeo’s alleged publication of the ChainRxn video game for play by Facebook users constituted a public performance of plaintiff’s copyrighted work under 17 U.S.C. § 106(4). Just as Congress considered the ‘reading a literary work aloud’ as a performance rather than display of a literary work, the reading of Boomshine’s copyrighted source or machine code by a computer (resulting in the presentation of the video game to the user) could be seen as an analogous performance of the underlying work. Admittedly, this area of the law is still developing.”17

Under these authorities, it would appear that the Fortnite-cheat video may be a public performance because it involves a pay-for-play gaming transaction. Not only did Mr. Rak publish his video with the intent to sell his cheat software, but each click of his video on YouTube also generates profit. Thus, the profit-driven nature of the video may place it in within the reach of 17 U.S.C. § 106(4).

About the author: Jing Zhao is a registered patent attorney and a member of Gordon Rees Scully Mansukhani’s Intellectual Practice Group. Ms. Zhao has a degree in computer science, and her practice focuses on commercial litigation, employment law and intellectual property, with a special interest in emerging legal issues in the eSports industry. Ms. Zhao’s biography can be found here.
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1 Epic Games, Inc. v. Mendes, Case Number 3:17-cv-06223-LB, U.S. District Court for the California Northern District (San Francisco).
2 Epic Games, Inc. v. Mendes, Case Number 3:17cv6223, Complaint, ¶9.
3 17 U.S.C. § 101 defines what it means to “perform a work” as “to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.” 17 U.S.C. § 101 also defines “public” performance as “(1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”
4 Epic Games, Inc. v. Mendes, 2018 U.S.Dist.LEXIS 98719, at *19-20 (N.D. Cal. June 12, 2018) (edits in original).
5 Id. at *22-23.
6 Red Baron-Franklin Park, Inc. v. Taito Corp, 883 F.2d 275, 278 (4th Cir. 1989).
7 Id. (citations omitted) (“the television monitor displays a series of images and the loudspeaker makes audible their accompanying sounds. The exhibition of its images in sequence constitutes a ‘performance’ of an audiovisual work. Indeed, it is the sequential showing of its images that distinguishes the ‘performance’ of an audiovisual work from its ‘display,’ which is defined as a nonsequential showing of individual images”).
8 Id. at 278-79.
9 Allen v. Academic Games League of Am., Inc., 89 F.3d 614 (9th Cir. 1996).
10 Id. at 616 (citations omitted).
11 Id.
12 Valve Corp. v. Sierra Entm’t, Inc., 431 F.Supp.2d 1091 (W.D. Wash. 2004).
13 Valve Corp., 431 F.Supp.2d at 1097.
14 Id.
15 Miller v. Facebook, Inc., 2010 U.S.Dist.LEXIS 61715, at *1-2 (N.D. Cal. May 28, 2010).
16 Id. at *2.
17 Id. at *14 (citing H.R. REP. NO. 94-1476, at 63 (1976)).

Supreme Court: Copyright Owners Must Register with U.S. Copyright Office Before Filing Suit

Author: Joni Flaherty

In a unanimous decision authored by Justice Ginsburg, the Supreme Court has held that copyright owners must register with the U.S. Copyright Office before commencing a lawsuit to enforce their rights. In Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 586 U.S. ___ (2019), the Supreme Court found that the Copyright Act of 1976 requires that the Copyright Office issue a certificate of registration, and that application for the certificate was not enough prior to commencing suit. The decision resolves a split among circuit courts, favoring the “registration approach” followed by the Tenth and Eleventh Circuits, under which registration by the Copyright Office was required to proceed, and rejecting the “application approach” followed by the Fifth and Ninth Circuit courts. The result turned on the interpretation of the phrase “registration of the copyright claim has been made” in Section 411(a) of the Copyright Act. That section reads:

[N]o civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights. The Register may, at his or her option, become a party to the action with respect to the issue of registrability of the copyright claim.

Fourth Estate, a public benefit online news producer, licensed articles to Wall-Street.com, a news website. When the license expired and Wall-Street.com failed to remove the articles from its website, Fourth Estate brought a trademark infringement claim. Wall-Street moved to dismiss the claims on the grounds that Fourth Estate had applied for, but had not yet registered, copyrights in its articles. Interpreting Section 411(a) of the Copyright Act, the District Court for the Southern District of Florida granted Wall-Street’s motion to dismiss, and that decision was affirmed by the Court of Appeals for the Eleventh Circuit.

The Supreme Court affirmed, citing the practical implications of litigating prior to the Copyright Office’s grant or denial of registration. The Court found that Fourth Estate’s concerns about depriving copyright owners of the ability to timely enforce their rights was “overstated,” and given that the average registration process takes several months (seven months, on average), there was little danger that a diligent copyright owner would be barred by the three-year statute of limitations. The Court also acknowledged exceptions to the rule, and the opportunity for copyright owners to pay an additional fee to rush their copyright application.

As a practical matter, the decision may encourage some copyright owners to promptly register their creative works. The decision may also cause a delay in some infringement suits or lead to more early dismissals of claims, and may also prevent eager litigants from adding a peripheral infringement claim for an applied-for but not yet registered copyright to a complaint.

About the author: Joni Flaherty is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property and Commercial Litigation Practice Groups. Her practice focuses on intellectual property and business litigation, with an emphasis on unfair business practices, trademark claims, and contractual disputes. Ms. Flaherty’s biography can be found here.

The Murky Waters of Authorship in a Software World

Author: Reid Dammann

It is quite common for parties to enter into agreements to develop software. Often times, one party has a general understanding of how they would like the software to function on either the back or front end, and/or how they would like the graphical user interface to be displayed to a user. More often than not, the second party to this kind of an agreement is a software programmer. The software programmer is generally able to understand the requirements and otherwise code such that the software performs the functions that are required when it is executed.

One of the bigger issues that springs out of these kinds of arrangements is authorship. This area is constantly evolving and is more or less a factual question generally reserved for the jury. Authorship becomes an issue when the agreement is silent on the same and the respective programming knowledge base between the parties overlaps, leading to confusion as to who contributed to the resulting source code.

The Copyright Act does not explicitly define the term “author.” However, to gain the Copyright Act’s protection, a person must create copyrightable work that is “original” and “fixed” in a “tangible medium of expression.” Copyright Act, 17 U.S.C. § 102. A work is considered “fixed” when “its embodiment in a copy…by or under the authority of the author, is sufficiently permanent or stable to permit it to be reproduced (emphasis added).” Id. at§ 101. Therefore, the Copyright Act expressly provides that an author can empower another to “fix” the author’s original idea. Both tangibility and originality are necessary to be an “author.” One who has an original idea that is not expressed in tangible form is not an author. Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc., 797 F.2d 1222, 1234 (3d Cir.1986), cert. denied, 479 U.S. 1031, 107 S. Ct. 877, 93 L.Ed.2d 831 (1987) Neither is one who embodies in tangible form another person’s idea, without making any original contribution of his own. The Supreme Court has stated that “[a]s a general rule, the author is the party who actually creates the work, that is, the person who translates an idea into a fixed, tangible expression entitled to copyright protection.” Community for Creative Non-Violence v. Reid, 109 S. Ct. 2166, 2171 (1989). The critical phrase in determining authorship is “by or under the authority of the author.”

That statutory language and the Supreme Court’s guidance produce a definition of an author as the party who actually creates the work—that is, the person who translates an idea into an expression that is embodied in a copy by himself or herself, or who authorizes another to embody the expression in a copy. The definition, however, has limits. When one authorizes embodiment, that process must be rote or mechanical transcription that does not require intellectual modification or highly technical enhancement such as what occurred in M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486 (11th Cir. 1990) (architectural drawings), Geshwind v. Garrick, 734 F.Supp. 644 (S.D.N.Y. 1990) (computer animated film), and Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc., 609 F.Supp. 1307 (E.D. Pa. 1985) (computer program), aff’d, 797 F.2d 1222 (3d Cir.1986), cert. denied, 479 U.S. 1031, 107 S.Ct. 877, 93 L.Ed.2d 831 (1987).

There is a “fundamental distinction” between an “original work” of authorship and “the multitude of material objects in which it can be embodied.” H.R.Rep. No. 1476, 94th Cong., 2d Sess. 53, reprinted in 1976 U.S. Code Cong. & Admin. News 5659, 5666. As the House Report for the Copyright Act’s precursor bill explained: “Thus, in the sense of the bill, a ‘book’ is not a work of authorship, but is a particular kind of ‘copy.’ Instead, the author may write a ‘literary work,’ which in turn can be embodied in a wide range of ‘copies’ and ‘phonorecords,’ including books, periodicals, computer punch cards, microfilm, tape recordings, and so forth.” In questioning the House Report, Professor Nimmer remarked that the solitary act of “setting up the recording session” is “ill-based” for claiming authorship on behalf of the record producer. 1 M. Nimmer & D. Nimmer, Nimmer on Copyright § 2.10[A][b] at 2-146 (1990). Indeed, “this is no more an act of ‘authorship’ than is the act of one who makes available to a writer a room, a stenographer, a typewriter, and paper.” Id.

In S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir. 1989), a Payday employee (Goodman) asserted that she was a joint author. In that particular case, the Court stated that Payday has not presented evidence sufficient to raise a genuine issue of material fact regarding joint authorship. Payday alleges only that Goodman told the programmers what tasks the software was to perform and how it was to sort data. She did none of the coding and does not understand any computer language.

A claim of joint authorship on similar facts was rejected in Whelan Assocs. v. Jaslow Dental Laboratory, 609 F. Supp. 1307, 1318-19 (E.D.Pa. 1985), aff’d, 797 F.2d 1222 (3d Cir. 1986), cert. denied, 479 U.S. 1031, 93 L. Ed. 2d 831, 107 S. Ct. 877 (1987). In that case, a dental laboratory owner commissioned software for use in his business, disclosed to the programmers the detailed operation of his business, dictated the functions to be performed by the computer, and even helped design the language and format of some of the screens that would appear on the computer’s visual displays. The court nonetheless found that the programmer was the sole author of the software. The court’s principal focus was on the creation of the source and object code. The owner’s “general assistance and contributions to the fund of knowledge of the author did not make [him] a creator of any original work, nor even the co-author. It is similar to an owner explaining to an architect the type and functions of a building the architect is to design for the owner. The architectural drawings are not co-authored by the owner, no matter how detailed the ideas and limitations expressed by the owner.”

In Payday, the Court stated “[w]e conclude that the Whelan court’s analysis is sound. Goodman, in our view, is not a joint author of the payroll programs. She did nothing more than describe the sort of programs Payday wanted S.O.S. to write. A person who merely describes to an author what the commissioned work should do or look like is not a joint author for purposes of the Copyright Act.” The Court further stated, “[t]he supplier of an idea is no more an ‘author’ of a program than is the supplier of the disk on which the program is stored. Cf. 17 U.S.C. § 102(b) (no copyright protection for ideas); 17 U.S.C. § 202 (copyright distinct from material object in which work is embodied). We therefore decline to affirm the district court’s grant of summary judgment on the alternate basis of joint authorship.”

In sum, on the one hand, the case law supports the programmer as the author in the situation where the programmer fixes the code into a tangible medium of expression with just a general guidance on how the software is to function from the other party, essentially giving the programmer a large amount of discretion on the expression. On the other hand, as the other party to the agreement contributes more specifically to the project, and even the code itself, along with the programmer, joint authorship emerges as the idea becomes fixed in the source code, therefore reducing the amount of originality provided by the programmer and attributing it to the other party. There is no guarantee of joint authorship for the programmer just because that person wrote the program. If that programmer acts as, essentially, a scrivener, then there may be no authorship at all.

About the author: Reid Dammann is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. His practice focuses on litigation matters involving copyright, trademarks, trade secrets, and patents, with a particular emphasis on software. Mr. Dammann is a registered patent attorney with an advanced dual degree in Computer Science and Electrical Engineering. Mr. Dammann’s biography can be found here.

Go! Fight! Win! Designers Prevail as Supreme Court Extends Copyright Protection to Cheerleading Uniforms and Beyond

Author: Hazel Mae Pangan

On March 22, 2017, the U.S. Supreme Court issued its decision in Star Athletica, L.L.C. v. Varsity Brands, Inc., et al., Case No.15-866, a dispute over whether cheerleading uniform designs qualified for protection under the Copyright Act of 1976.  In the proceedings below, Varsity Brands, Inc. (“Varsity Brands”) sued Star Athletica, L.L.C. (“Star Athletica”) for copyright infringement of five cheerleading uniform designs for which Varsity Brands held 2-dimensional artwork copyrights. Using cheerleading uniforms as an example for what is arguably an expansion of copyright protection to the design of garments and clothing, the Court ultimately held that the designs were protectable.

Procedural History

Under Section 101 of the Copyright Act of 1976, the “pictorial, graphic, or sculptural features” of the “design of a useful article” may be copyright protected as works of art if the features “can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” In this case, the district court granted summary judgment in favor of Star Athletica, holding that the designs were not protectable pictorial, graphic, or sculptural works subject to copyright protection. Rather, the designs simply served the “useful” or “‘utilitarian’ function of identifying the garments as cheerleading uniforms” and thus were not physically or conceptually separable from the “utilitarian” function of the uniform as required for copyright protection under Section 101.

On appeal, the Sixth Circuit Court of Appeals reversed, holding that the uniform designs were “‘separately identifiable’” because the designs could “‘appear side by side’” with a blank uniform—“‘one as a graphic design and one as a cheerleading uniform.’” Moreover, in the Sixth Circuit’s view, the “designs were ‘capable of existing independently’ because they could be incorporated onto the surface of different types of garments, or hung on the wall and framed as art.”

The Court’s Holding

The Supreme Court, with Justice Thomas writing for the majority, affirmed the Sixth Circuit’s reversal, and resolved a circuit split over the correct articulation of the separability test for useful articles. Relying on principles of statutory interpretation, the majority clarified that Sections 101 and 113(a) of the Copyright Act “make clear that copyright protection extends to pictorial, graphic, and sculptural works regardless of whether they were created as free-standing art or as features of useful articles.” The test is “whether the feature for which copyright protection is claimed would have been eligible for copyright protection as a pictorial, graphic, or sculptural work had it originally been fixed in some tangible medium other than a useful article before being applied to a useful article.” In other words, “a feature of the design of a useful article is eligible for copyright if, when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium.” The focus of the test, according to the Court, is “on the extracted feature and not on any aspects of the useful article that remain after the imaginary extraction.” Accordingly, the Court expressly rejected the “physical” and “conceptual” separability distinction in the articulation of the test used by the lower courts, holding that it does not matter whether a feature is physically separable from the useful article because the separability test is only conceptual.

Under this test, the Supreme Court held that one could identify the decorations on the cheerleading uniform designs at issue in this case as “having pictorial, graphic, or sculptural qualities” and that if the “arrangement of colors, shapes, stripes, and chevrons on” the uniforms’ surface “were separated from the uniform and applied in another medium”—like a painter’s canvas—“they would qualify as ‘two-dimensional . . . works of . . . art’” under Section 101.

Marketplace Implications

Writing as amicus curiae in support of Varsity Brands, the Council of Fashion Designers of America (“CFDA”) urged the Court to affirm the Sixth Circuit’s holding that the uniform designs were copyright protectable because a contrary holding would have a “deleterious effect” on the ever-expanding $370 billion American fashion industry, leaving designers vulnerable to copyists and undermining the creativity and effort required for conceiving original fashion and apparel designs. For years, the CFDA and fashion industry have tried to secure legislation specifically granting increased copyright protection to fashion designs.

Under the Court’s majority holding, fashion and apparel designers now have more copyright protection available to them for their designs. Beyond cheerleading uniforms, the Court’s clarification of the separability test extends copyright protection to garments and apparel (and other useful articles and goods) bearing original designs that can be imagined as works of art separate from the useful article on which the designs are affixed.

For a copy of the Court’s slip opinion, click here.

The “Ballers” In Your Court: Defending Copyrightable Expression

HBO’s hit series Ballers came under attack in the U.S. District Court for the Central District of California by a copyright infringement claim filed by plaintiffs, the owners of an original copyrighted work entitled Off Season. The court, after a thorough comparison of the two works, determined plaintiffs failed to satisfy the extrinsic test of substantial similarity and dismissed the case with prejudice on July 25, 2016.1

1. The Copyrighted Works at Issue

Beginning in May 2007, plaintiffs began sharing their original motion picture trailer, a shortened trailer, a screenplay, and a treatment of their story, the Off Season, with colleagues in the television industry. These materials consisted of four separate copyrights, which were the subject of plaintiffs’ single copyright infringement claim in this case.2 According to the complaint, the Off Season materials found their way to a group of producers, a production company, Dwayne “The Rock” Johnson, Mark Wahlberg, and his manager, Stephen Levinson. In or around December 2008, Wahlberg, Johnson, and Levinson confirmed their interest in producing Off Season with plaintiffs, but negotiations ended when removing plaintiffs’ names from the credits became a condition of the proposed agreement.3

The Off Season tells the story of Nathaniel Brandon Hall (“NBH”), the owner of a nightclub called “The Off Season,” which caters to professional football’s elite clientele who need anonymity so that they may engage in their vices out of the public eye, including bribing a detective to ignore the prostitution, violence, and drugs that frequent the club.4 True to its name, the story line takes place entirely during professional football’s off season.

Ballers tells the story of Spencer Strasmore (“Strasmore”), a retired NFL linebacker who currently works for Anderson Financial, a finance management company with a newly opened sports division.5 Strasmore is played by lead actor, Dwayne Johnson, who counsels his young football protégés not to fall into the same financial mistakes he made during his career as a professional athlete.6 The general story line of Ballers also takes place entirely during professional football’s off season.7

Plaintiffs alleged that the Ballers television series borrowed heavily from the Off Season materials and that both works have substantial similarities in plot, setting, characters, theme, mood, dialogue, and pace.8 Plaintiffs depicted both works as “follo[wing] an African American football player who is essentially a business man who tries to monetize his friendships with other professional football players and athletes to help grow his business.”9 However, the court would find on defendants’ motion to dismiss that “the only actual alleged similarities between the two works relate to unprotected elements.”10 “[A]lthough there are some generic similarities between Ballers and the Off Season, there are no similarities between the actual objective details of the works.”11

2. Ballers Defeats the Off Season’s Claims Under the Extrinsic Test

To demonstrate copyright infringement, a plaintiff must show “(1) ownership of a valid copyright, and (2) copying of constituent elements of that work that are original.”12 Copying may be established by demonstrating (1) “that the [defendant] had access to plaintiff’s copyrighted work,” and (2) “that the works at issue are substantially similar in their protected elements.”13

Under Ninth Circuit law, courts employ a two-part test to determine if works are substantially similar: an intrinsic test and an extrinsic test.14 The intrinsic test is a subjective comparison of the total concept and feel of the two works, whereas the extrinsic test is an objective comparison of specific expressive elements which seeks to find “articulable similarities between the plot, themes, dialogue, mood, setting, pace, characters, and sequence of events in two works.”15 As was the case here, a court may dismiss a complaint on a 12(b)(6) motion for failing to satisfy the extrinsic test “because a jury may not find substantial similarity without evidence on both the extrinsic and intrinsic tests.”16

Because access was not in dispute and plaintiffs alleged that defendants read or viewed the Off Season materials, the court further applied the inverse ratio rule to plaintiffs’ claims.17 In so doing, the court “require[s] a lower standard of proof of substantial similarity when a high degree of access is shown.”18 Even under this liberal inverse ratio rule, plaintiffs failed to state a claim of copyright infringement because the alleged similarities between the protected elements of the works were not actual similarities that could result in a finding of substantial similarity under the extrinsic test.19

3. No Similarities Found Between the Actual Objective Details of the Works

The court engaged in a detailed analysis of plot, setting, characters, theme, mood, dialogue, pace and other miscellaneous alleged similarities between Ballers and the Off Season and held that the protectable elements of the works are significantly different.20 By filtering out and disregarding non-protectable elements, the inquiry was “whether the protectable elements, standing alone” were substantially similar.21

Plaintiffs argued that when determining whether Ballers is substantially similar to the Off Season, the court must consider the Ballers script and disregard the television series.22 The court rejected this argument because “published works cause injury under copyright law, [therefore] courts consider the final version of a film, rather than unpublished scripts, when determining substantial similarity.”23

Consequently, upon comparison of the Ballers television series and the Off Season materials that were distributed to defendants, the court found only a few actual similarities between the works, all of which were not protectable expression: (1) the stories are set entirely during professional football’s off season; (2) NBH and Strasmore are both well-dressed football players who are sexually promiscuous, drive fancy cars, and have a cocky attitude; and (3) the basic plot premise is a story about football players during the football off season.24 Even NBH and Strasmore’s respective Latina love interests were held to be “stock characters,” not subject to copyright protection because they were not “sufficiently delineated and especially distinctive.”25

4. Takeaways

Procedurally, the result of defendants’ motion to dismiss provides a powerful message for IP litigators: without specific allegations of extrinsic, objective similarities in copyrightable expression between competing works, a claim for copyright infringement is subject to dismissal with prejudice.26 Plaintiffs’ complaint suffered from overarching generalities with respect to articulable similarities. Moreover, the court considered all the specific documents and materials referenced in the complaint, even though they were not attached to it, without converting defendants’ 12(b)(6) motion into a summary judgment motion.27 This resulted in a comprehensive diagnosis of the content comprising the Off Season and Ballers story line in more than one format at an early stage in the proceedings. Even under a liberal inverse ratio standard, plaintiffs’ complaint failed to state a claim because copyright law “protects expression of ideas, not the ideas themselves,” stock scenes and themes “are not protected against copying.”28

Whether on the offense or the defense, the distinct similarities of a copyrighted work should either be alleged with specificity on the one hand, or articulated with sufficient detail to show no substantial similarity on the other.
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1 Everette Silas, et al. v. Home Box Office, Inc., et al., No. CV 15-9732-GW(FFMx), 2016 U.S. Dist. LEXIS 107944, at *57 (C.D. Cal. July 25, 2016).
2 The court noted that although subject of four separate copyrights, it would discuss the Off Season as a whole on defendants’ motion to dismiss. However, the court conducted a separate evaluation of the treatment, screenplay, trailer, and 10 minute trailer in determining that the Off Season is not substantially similar to Ballers. Id. at n. 7.
3 Id. at *7.
4 Id. at *2-4.
5 Id. at *7.
6 Id. at *27-28.
7 Id. at *34-36.
8 Id. at *10, 23-24.
9 Id. at *26.
10 Id. at *23-24.
11 Id. at *26.
12 Feist Publ’ns, Inc. v. Rural Tel. Servs. Co., 499 U.S. 340, 361 (1991).
13 Cavalier v. Random House, Inc., 297 F.3d 815, 822 (9th Cir. 2002).
14 Id. at *22-23 (citing Cavalier, 297 F.3d at 822).
15 Cavalier, 297 F.3d at 822 (citing Kouf v. Walt Disney Pictures & Television, 16 F.3d 1042, 1045 (9th Cir. 1994)).
16 Home Box Office, Inc., 2016 U.S. Dist. LEXIS 107944, at *20-23 (quoting Kouf, 16 F.3d at 1045).
17 Id. at *22-23.
18 Three Boys Music Corp. v. Bolton, 212 F.3d 477, 485 (9th Cir. 2000).
19 Home Box Office, Inc., 2016 U.S. Dist. LEXIS 107944, at *23-24.
20 Id. at *53-54.
21 Cavalier, 297 F.3d at 822 (quotations omitted) (emphasis in original).
22 Home Box Office, Inc., 2016 U.S. Dist. LEXIS 107944, at *14.
23 Id. at *14-15 (citing Meta-Film Assocs., Inc. v. MCA, Inc., 586 F.Supp. 1346, 1360 (C.D. Cal. 1984)).
24 Id. at *35-36, 41, 49
25 Id. *42-44.
26 See, e.g., Gilbert v. New Line Prods., Inc., No. CV 09-02231 RGK, 2009 U.S. Dist. LEXIS 130675, at *21 (C.D. Cal. Nov. 16, 2009) (dismissing plaintiff’s claim with prejudice after determining there was no substantial similarity because “no additional facts would allow [plaintiff] to prevail in her case”).
27 Id. at *13-14 (citing Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
28 Cavalier, 297 F.3d at 823 (citing Berkic v. Crichton, 761 F.2d 1289, 1293 (9th Cir. 1985)).