Major ISPs and Content Providers Band Together for New Copyright Alert System

July 10, 2011

A group of major Internet service providers (ISPs), content provider organizations and two leading industry associations just announced last week the establishment of the Center for Copyright Information to better educate the public about appropriate online copyright usage and a soon-to-be-implemented uniform Copyright Alert System in hopes of deterring unauthorized Internet use of copyrighted materials.  Included as signatories to the Memorandum of Understanding (the Copyright Alerts MOU), which outlines both initiatives, are the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), Disney Studios, Sony Pictures, Warner Bros., UMG, EMI, AT&T, Verizon, Comcast and Time Warner Cable.

Unlawful sharing, downloads and use of copyrighted materials over the Internet has been the bane of many creators of copyrighted works, particularly the major record labels and movie studios.  The music industry has had some success in pursuing infringement through lawsuits against significant peer-to-peer site operators (e.g., Grokster and LimeWire).  It has also experienced somewhat mixed results and lots of negative PR via aggressive lawsuits by RIAA against individual users.    For their part, ISPs have been burdened with assisting, at least indirectly, in related policing efforts by virtue of administering takedown policies and procedures pursuant to Section 512 of the Digital Millenium Copyright Act (DMCA). 

So, while not abandoning altogether their current practices and rights, the signatories to the Copyright Alerts MOU  will implement a system of uniform notices that content organizations can send to participating ISPs, which will then issue a series of escalating alerts to alleged infringers that seek to halt the alleged infringing activity.  The types of alerts in ascending order are (i) an Educational Step Copyright Alert, (ii) an Acknowledgment Step Copyright Alert, (iii) a Mitigation Measure Copyright Alert Step.  For each step there may also be multiple alert notices provided to an applicable user.  Measures proposed at the Mitigation Step include a reduction in upload/download transmission speeds, a step down to a lower tier service, redirection to a landing page until the matter is resolved, and restrictions on Internet access.  There are several “warning bells” along the alert steps as well as an appeals procedure (although a user is required to pay a $35 fee to pursue an appeal). 

The tenor of the Copyrights Alert MOU and an FAQ on the Center for Copyright Information’s website makes clear that this is intended as a sort of experiment to address a problem for which a solution has long eluded a diverse group of stakeholders.  While it is too early to judge how this will work in practice, it appears to be a constructive effort worth watching.


“Hot News” Doctrine Not So Hot

July 5, 2011

In Barclays Capital, et al. v. Theflyonthewall.com, Inc., Docket No. 1-1372-cv (2nd Cir. June 20, 2011), the Second Circuit U.S. Court of Appeals dealt a significant blow to the viability of the tort of “hot news” misappropriation and thereby gave an additional boost to the status of online content aggregation companies. 

As so-called “new media” companies go, the subset known as content aggregators — such as the Huffington Post or the Drudge Report — have been a curious burr in the side of many, more traditional media businesses engaged in news gathering and reporting.   If content aggregation sites are readily able and without payment to repurpose the efforts of the old line news outfits such as the Associated Press, The New York Times or ABC News, for example, does this threaten the core news gathering and reporting functions of that latter group and, if so, should there be a prohibition on such aggregation activities.

Background of Hot News Doctrine

The “hot news” doctrine is intertwined with copyright law and derives from a 1918 U.S. Supreme Court case involving International New Service (INS) and the Associated Press (AP),  in which INS was prohibited from free riding on the AP’s efforts by taking factual accounts derived from AP news stories and then presenting the news stories as INS’s own reports.  International News Service v. Associated Press, 248 U.S. 215 (U.S. 1918).   The doctrine was later severely limited by the Second Circuit in National Basketball Association v. Motorola, 105 F.3d 841 (2nd Cir. 1997), which addressed a collaboration between Motorola and a reporting service using pagers to transmit with only a few minutes delay game scores and data compiled from various sources and which competed somewhat with the NBA’s own efforts at packaging and selling games data in more or less real time.  The NBA court articulated a multi-factor test for when a hot news misappropriation claim would survive copyright law preemption and ultimately concluded that the hot news claims asserted by the NBA were preempted by copyright law because the actions complained about by Motorola, among other things, did not involve any free riding and thus did not satisfy the elements of a hot news claim. Read the rest of this entry »


Media Law in the Digital Age Conference Presented by Center for Sustainable Journalism and Berkman Center

October 1, 2010

I had the good fortune this past weekend to attend, and participate as a panelist at,  the Media Law in the Digital Age conference at Kennesaw State University.  The conference was jointly organized by KSU’s Center for Sustainable Journalism and Harvard Law School’s Berkman Center for Internet and Society.  The full-day event was truly impressive in the range of material covered around media law and the evolving models for journalism and media in light of digital technologies. 

Among the topics addressed were “Libel and Privacy: Minimizing the Risks of Publishing Online, “Copyright: Using the Works of Others and Licensing Your Own Work,” “Safe Harbors: Managing Online Communities” and “Starting an Independent News Organization.”   A full program agenda and other details may be found here: http://csjconferences.org/medialaw/.    The diverse mix of attendees — about a third each being from the media, academia and the legal profession, with a few business and governmental  organizations also represented — provided energizing  and lively discussions at each of the sessions.  Hats off to the high caliber of the program and the outstanding effort undertaken by the Center for Sustainable Journalism and the Berkman Center to put this together.


Copyright Office Issues DMCA Exemptions

July 31, 2010

The Digital Millennium Copyright Act (DMCA) prohibits circumvention of access control devices in copyrighted works to obtain an unauthorized copy of such work.   However, the DMCA authorizes the Librarian of Congress to make a determination every three years whether certain  classes of work should be exempted from such anti-circumvention restrictions.  In furtherance of that statutory obligation, the Librarian of Congress within the past week designated six classes of work as being exempt from those restrictions.  Thus, as noted in the statement issued by the Copyright Office, “[p]ersons who circumvent access controls in order to engage in noninfringing uses of works in these six classes will not be subject to the statutory prohibition against circumvention.” 

The six classes, briefly summarized, are: (1) use of short portions of certain motion pictures on DVDs for criticism or comment; (2) computer programs that enable wireless telephone handsets to execute software applications for enabling interoperability; (3) computer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network to connect to a wireless telecommunications network; (4) video games accessible on personal computers and protected access control measures to test, investigate or correct security; (5) computer programs protected by dongles that prevent access due to malfunction or damage and which are obsolete; and (6) literary works distributed in e-book format when all existing e-book editions of the work prevent the book’s read-aloud function or of screen readers that render the text into a specialized format.   (Items (2) and (3) have been popularly referred to as the iPhone “jailbreaking” exceptions, which would allow use on iPhones of  apps not authorized by Apple as well as connection with mobile carriers other than Apple’s designated carrier of AT&T.)

Link to Copyright Office Statement:  http://www.copyright.gov/1201/2010/Librarian-of-Congress-1201-Statement.html


Jacobsen v. Katzer Open Source Case Settled

February 28, 2010

Among those who follow open source software issues, the case Jacobsen v. Katzer, et al., No. 2008-1001, 2008 WL 3395772 (Fed. Cir. Aug. 13, 2008), has long been of particular interest since it first popped up on the radar screen a couple of years ago because it is a rare case of open source license terms actually being litigated.   Recently, a settlement was reached in the case, which, when considered with the prior court decisions in the litigation, represents a significant victory for open source licensors. 

At issue were the applicable license terms for the use of certain open source code that was useful for model train controllers.  The license raised issues under California state contract law and federal copyright law. The user, Katzer and his company, Kamind Associates, was being held accountable by the plaintiff on behalf of the Java Model Railroad Interface (JMRI) Project, which originally released the open source code at issue.  Katzer either overlooked the underlying license terms or had not read them closely enough. Parsing through the license terms, the circuit court found that a proviso contained in the Artistic License — which had been adopted by the plaintiff for the software — created a threshold condition to use of the software under the license (thus, giving rise to a copyright-infringement claim) rather than being a mere covenant on the scope of the license rights (which if violated would have resulted only in a breach of  contract claim).  In later proceedings, the U.S. District Court for the Northern District of California in December 2009 granted significant parts of the plaintiff’s motion for summary judgment and denied the defendant’s motion for  partial summary judgment.

Under the terms of the settlement reached February 16, 2010, Katzer is enjoined from using or copying any of the JMRI code or other materials, is prohibited from using certain trademarks and domain names that conflict with the rights of the JRMI Project, and must pay plaintiffs the sum of $100,000 over a period of 18 months.

The takeaway:  open source license terms matter and are ignored by users at their peril.

Link to Settlement Agreement:  http://www.docstoc.com/docs/25847971/Jacobsen-Settlement


Cincom v. Novelis: Federal Copyright Law Trumps State Merger Law

September 28, 2009

Contract boiler plate – or the lack thereof – can be an Achilles heel in a software licensing transaction.  Case in point:  Cincom Systems, Inc. v. Novelis Corp., No. 07-4142 (6th Cir. Sept. 25, 2009).  Affirming the decision of the lower federal court, the U.S. Sixth Circuit Court of Appeals last week held that copyright infringement occurred where there was a failure to obtain the software licensor’s consent to an assignment of a software license agreement that resulted by operation of law under the Ohio merger statute.

This is true even though Cincom’s software continued to be used in the same business operation, at the same facility and on the same computer system as before the merger.  In 2003, Alcan Ohio completed an internal reorganization through a series of mergers in which its operations in Oswego, New York where the Cincom software had been used, ultimately was spun off into a new company, later renamed Novelis Corporation.  The license agreement between Cincom and Alcan Ohio stated that the license was personal to Alcan Ohio, that it was non-transferable and that no transfer was permitted without the prior written approval of Cincom. 

Novelis, as the successor to the subject portion of the former Alcan Ohio business, believed that the Ohio merger statute should control whether a transfer took place.  By Novelis’ reasoning, a transfer by operation of law and the vesting of the former entity’s license rights in Novelis was not the type of transfer sought to be prohibited under the license agreement.  While this might be true with other property, the Sixth Circuit agreed with the lower court that this is not the case with respect to copyrights or patents, transfers of which are controlled by federal law.  Bottom line:  if any entity other than the authorized licensee holds the license without permission of the licensor then the licensor’s copyright has been infringed.

While the assignability of license rights is always a matter of negotiation, assignment clauses in software license agreements frequently include terms that expressly allow assignment to a successor in interest to the business unit that originally licensed the software.  Where such language is not present, counsel reviewing a contract after the fact in preparation for a merger will sometimes take comfort that an assignment of a property interest by merger is one that occurs by operation of law and, thus, third party consent, if otherwise necessary, is not normally required absent an express prohibition against assignment or transfer by operation of law.  Such comfort is misplaced if licenses of patents and copyrights are involved.  In this context, silence is anything but golden and unless you include express permission in the license or obtain consent, copyright infringement will occur.    

Link to Decision:  http://www.ca6.uscourts.gov/opinions.pdf/09a0346p-06.pdf


Veoh Case Illustrates Path to DMCA Safe Harbor

September 26, 2009

A recent decision, UMG Recordings v. Veoh Networks, No. CV 07-5744 AHM (AJWx) (N.D. Cal. Sept. 19, 2009), by a federal district court provides a good example of the tensions sought to be balanced under the safe harbor provisions of the Digital Millennium Copyright Act (“DMCA”) and the way to successfully attain the benefits of one of these safe harbors.  While the Veoh case can be viewed as but one of the many ongoing skirmishes pitting music and film industry giants against emerging video and music sharing websites, the decision serves as useful guidance for sites of all sorts that host user-generated content.   

Veoh operates a widely used video sharing website.  Not surprisingly, users sometimes post unauthorized copies of copyrighted materials, including UMG (Universal) music videos.  Veoh maintains a clear copyright policy that is readily available to its users that prohibits posting of unauthorized content and Veoh’s normal practice is to remove promptly known infringing video postings.  Veoh also employs filtering technology that automatically blocks postings of known infringing content.   Notwithstanding these measures, UMG claimed that Veoh should have known that the type of site it operated would result in the posting of infringing content, that Veoh should have employed filtering technology earlier than it did, and that Veoh failed to remove improper videos based on UMG having merely identified UMG artists by name but not specific copyrighted videos.

Enter the DMCA.  The DMCA attempts to strike a reasonable balance between the need to protect the legitimate rights of copyright holders, on the one hand, and the desire to avoid improper constraints on freedom of expression and also to allow the continued development of electronic communications platforms, on the other.  As part of that balancing act, the DMCA contains in Section 512(c) a safe harbor provision against copyright infringement claims for internet service providers and other operators of websites that store user-generated content.  The safe harbor shields an online service provider from liability if the provider:

  1. Does not have actual knowledge that the content is infringing, is not aware of facts or circumstances that would make apparent that infringing activity has occurred, or upon becoming aware of infringing content, acts promptly to remove or disable access to such content;
  2. Does not receive a direct financial benefit from infringing content where the provider also has the right and ability to control such content;
  3. Upon notification of claimed infringement, responds promptly to remove or disable such content; and
  4.  Has adopted and reasonably implemented a policy that informs users that repeat infringers will have their access to the service terminated.

The Veoh court found that, contrary to the strained contentions of UMG, Veoh easily satisfied each of the safe harbor elements.  The court noted that service providers are not required to take any particular actions just because infringing activity could be taking place and what the DMCA requires is notice of specific works claimed to be infringed not generalized assertions that all works involving a particular artist must be addressed.  Providers are also not required to adopt any particular technology, such as filtering technology, or, if they choose to do so, adhere to a timetable preferred by a complainant.  What is required is that the service provider act reasonably under the circumstances.  For all these reasons, the court held that Veoh in fact acted reasonably and granted Veoh’s motion for summary judgment against UMG.

Like the sturdy little train engine of storybook fame, Veoh has seemingly become the “little website that could,” having now scored at least three successive court victories in as many years against claims of copyright infringement.   However, operators of websites that are further below the radar screen should still take note of this case.  Even though greater attention has been garnered by the music and film industries in notable online copyright cases, the types of well thought out steps implemented by Veoh to address issues of alleged infringement are ones from which any website with contributed content can benefit.