Rossdale cle 4 25-12


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Rossdale cle 4 25-12

  1. 1. Copyright and Trademark Issues on the Internet Rossdale CLE April 25, 2012 Lee Gesmer Gesmer Updegrove LLP Boston, Massachusetts Copyright Gesmer Updegrove LLP 2012
  2. 2. Topics: 2 Digital Millennium Copyright Act (DMCA) Copyright First Sale Doctrine Keyword Advertising/Trademark Computer Fraud and Abuse Act (CFAA) 4.25.2012
  3. 3. Digital Millennium Copyright Act 3 - UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 1022 (9th Cir. 2011) - Viacom Intl, Inc. v. Youtube, Inc., 2012 U.S. App. LEXIS 6909 (2d Cir. N.Y. Apr. 5, 2012) 4.25.2012
  4. 4. 17 USC § 512 Safe Harbors 4§ 512 immunizes Internet intermediaries foruser supplied infringing content but serviceprovider -• Must: comply with statutory notice/take down system• Must: provide storage at direction of a user• Must not: Have actual knowledge or facts/ circumstances• Must not: Derive financial benefit + right/ 4.25.2012
  5. 5. By Reason of Storage at Direction of User 5 “A service provider shall not be liable . . . by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider . . .” § 512(c) 4.25.2012
  6. 6. “By Reason of” Storage - Veoh 6 “language and structure of the statute . . . [and] legislative intent clarify that § 512(c) encompasses the access-facilitating processes that automatically occur when a user uploads a video to Veoh” “web hosts, like Veoh, . . . store user-submitted materials in order to make those materials accessible to other Internet users. . . . if the web host only stored information for a single user, it would be more aptly described as an online back-up service” 4.25.2012
  7. 7. “By Reason of” Storage - Youtube 7 Agrees with Veoh regarding scope of storage safe harbor –“transcoding,” “playback” and “related videos” (automated algorithm) fall within safe harbor Third-party syndication – Youtube licensed videos to Verizon. “Manual selection of copyrighted material for licensing to a third party” => Remanded to determine whether clips-in-suit were licensed 4.25.2012
  8. 8. Actual Knowledge/Facts-Circumstances 8 [the service provider is not liable if it] . . . does not have actual knowledge that the material . . . is infringing; . . . in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent” (Red Flag) § 512(c)(1)(a) 4.25.2012
  9. 9. Veoh - Actual Know./Facts-Circumst. 9 • Actual knowledge/facts and circumstances both require specific knowledge of infringing conduct, not generalized knowledge • Email from Disney CEO to Veoh investor inadequate because the copyright holder did not comply with notice requirements -  deficient notice "shall not be considered under paragraph (1)(A) in determining whether a service provider has actual knowledge or is aware of facts or circumstances from which infringing activity is apparent" 4.25.2012
  10. 10. Youtube - Actual Know./Facts-Circumst. 10“the actual knowledge provision turns on whetherthe provider actually or “subjectively” knew ofspecific infringement, while the red flag provisionturns on whether the provider was subjectivelyaware of facts that would have made the specificinfringement ‘objectively’ obvious to areasonable person” => “Upon a review of the record, we are persuaded that the plaintiffs may have raised a material issue of fact regarding YouTube’s knowledge or awareness of specific instances of infringement” 4.25.2012
  11. 11. Youtube - Willful Blindness Doctrine 11 “Safe harbor not conditioned on service provider monitoring its service or affirmatively seeking facts indicating infringing activity” . . . [DMCA] is incompatible with a broad common law duty to monitor or otherwise seek out infringing activity based on general awareness . . . . . . [therefore] willful blindness cannot be defined as an affirmative duty to monitor. . . . [But the statute does not] abrogate the doctrine. . . . the willful blindness doctrine may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement” 4.25.2012
  12. 12. “Financial Benefit ... Ability to Control” 12 Service provider is eligible for the §512(c) safe harbor only if it - "does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity" 17 U.S.C. § 512(c)(1) (B) => Financial Benefit + Control ≠ Safe Harbor 4.25.2012
  13. 13. Veoh - “Financial Benefit/Control” 13 “Service provider must be aware of specific infringing material to have the ability to control that infringing activity . . . Only then would its failure to exercise its ability to control deny it a safe harbor . . .  "right and ability to control" . . . requires control over specific infringing activity the provider knows about . . .  Of course, a service provider cannot willfully bury its head in the sand to avoid obtaining such specific knowledge . . .” 4.25.2012
  14. 14. Youtube - “Financial Benefit/Control” 14 “importing a specific knowledge requirement into [control/benefit] renders the control provision duplicative of [the actual knowledge provision]. Any service provider that has item-specific knowledge of infringing activity and thereby obtains financial benefit would already be excluded from the [control/benefit] safe harbor . . . for having specific knowledge of infringing material and failing to effect expeditious removal.” 4.25.2012
  15. 15. Youtube - “Financial Benefit/Control” 15 Perfect 10 v. Cybernet Ventures, 213 F. Supp. 2d 1146 (C.D. Cal. 2002) - service provider instituted a monitoring program by which user websites received detailed instructions regarding issues of layout, appearance, and content, and also forbade certain types of content and refused access to users who failed to comply with its instructions => “exerting substantial influence on the activities of users, without necessarily—or even frequently—acquiring knowledge of specific infringing activity” 4.25.2012
  16. 16. Youtube - “Financial Benefit/Control” 16 “the ‘right and ability to control’ infringing activity under § 512(c)(1)(B) requires something more than the ability to remove or block access to materials posted on a service provider’s website . . . The remaining—and more difficult—question is how to define the ‘something more’ that is required . . . we think it prudent to remand to the District Court to consider in the first instance whether the plaintiffs have adduced sufficient evidence to allow a reasonable jury to conclude that YouTube had the right and ability to control the infringing activity and received a financial benefit directly attributable to that activity” 4.25.2012
  17. 17. Attempt to graft Grokster onto DMCA 17 Metro-Goldwyn-Mayer Studios Inc. v. Grokster (U.S. 2005) “... one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative stops taken to foster infringement, is liable for the resulting acts of infringement by third parties” 4.25.2012
  18. 18. Viacom: YouTube is a “Video Grokster” 18 - “[W]e need views, [but] I’m a little concerned with the recent [S]upreme [C]ourt ruling on copyrighted material” - “[S]ave your meal money for some lawsuits!” - “concentrate all of our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil” - “our dirty little secret . . . is that we actually just want to sell out quickly” 4.25.2012
  19. 19. Both courts reject application ofGrokster 19 Veoh - “In light of the DMCAs language, structure, purpose and legislative history, we are compelled to reject UMGs argument that the district court should have employed Napsters vicarious liability standard . . .” Youtube - “a finding of safe harbor application necessarily protects a defendant from all affirmative claims for monetary relief” 4.25.2012
  20. 20. Veoh - Investor Liability (secondary liab.) 20 “The Investor Defendants argue that it would be illogical to impose greater liability on them than on Veoh itself. Although we agree that this would create an anomalous result, we assume without deciding that the suit against the Investor Defendants can properly proceed even though Veoh is protected from monetary liability by the DMCA” “. . . were we to hold that Veoh was protected, but its investors were not, investors might hesitate to provide the necessary funding to companies like Veoh, and Congress purpose in passing the DMCA would be undermined” 4.25.2012
  21. 21. Veoh: Prevailing Def. Denied Atty Fees 21 FRCP 68 –  “If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made” Copyright statute - court "may . . . award a reasonable attorneys fee to the prevailing party as part of the costs" 17 U.S.C. § 505 4.25.2012
  22. 22. Capitol Records v. Redigi – First SaleDoctrine and Digital Recordings 22 “Sell your old songs legally – The world’s first used digital music marketplace - Buy used music insanely cheap” “Store, Stream, Buy and Sell Pre-Owned Digital Music” 4.25.2012
  23. 23. Redigi (2) .... 23 Step One:  file is “space shifted” to “music locker,” verified, fingerprinted, owner’s local copy deleted Step Two:  Owner designates file “for sale” - purchased file is retitled to the new owner Step Three: The new owner can leave the file on Redigi or download 4.25.2012
  24. 24. Redigi (3) .... 24 Capitol’s Argument - - first sale doctrine limited to owner of a “particular copy” (a “material object”) in which a copyrighted work is “fixed,” to “dispose of the possession of that copy” - Digital transmissions do not involve the physical transfer of a material object - Digital resale requires reproduction of the original file and creation of a new copy => Ergo, first sale does not apply 4.25.2012
  25. 25. First Sale Doctrine 25 “. . . the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord” 17 US.C. §109(a) •Copy owner’s rights, as opposed to copyright owner’s rights 4.25.2012
  26. 26. Vernor v. Autodesk (9th Cir. 2010) 26 Garage sale purchaser of software bound by license prohibiting resale? “First, we consider whether the copyright owner specifies that a user is granted a license. Second, we consider whether the copyright owner significantly restricts the user’s ability to transfer the software. Finally, we consider whether the copyright owner imposes notable use restrictions” 4.25.2012
  27. 27. F.B.T. Prods., LLC v. Aftermath Records(9th Cir. Cal. 2010) 27 “where a copyright owner transfers a copy of copyrighted material, retains title, limits the uses to which the material may be put, and is compensated periodically based on the transferee’s exploitation of the material, the transaction is a license” 4.25.2012
  28. 28. MDY v. Blizzard (9th Cir. 2010) 28 EULA for WoW restricted use of “BOT” that played through game levels Yes, but: •Yes - WoW players are licensees •But - the anti-BOT restriction was a covenant rather than a copyright - enforceable condition 4.25.2012
  29. 29. UMG Recordings, Inc. v. Augusto (9th Cir.2011) 29 Unsolicited promo CDs - license or transfer? No agreement in place “Resale or transfer of possession is not allowed ...” Unordered merchandise statute 4.25.2012
  30. 30. Key Word Advertising/TrademarkRosetta Stone v. Google, Inc. (4th Cir. 2012) 30Intent:< 2004 - Google did not allow the use of trademarks askeyword search triggers for unauthorized advertisers orin the body or title of the text of an advertisement> 2004 – Loosened restrictions, but continued toprevent advertisers from using trademarks in ad text orad titles unless authorized; recognized increase in risk.>2009 – Permitted use of trademark terms in ad texteven if advertiser doesn’t own the mark or haveexplicit approval from the trademark owner to use it(resellers, components, compatible parts, info/reviews) 4.25.2012
  31. 31. Rosetta Stone (2) .... 31“Viewing the evidence and all reasonableinferences in a light most favorable toRosetta Stone . . . a reasonable trier offact could find that Google intended tocause confusion in that it acted with theknowledge that confusion was very likely toresult from its use of the marks” 4.25.2012
  32. 32. Rosetta Stone (3) .... 32Actual Confusion: • 5 depositions, confusion as to sponsorship (vs source) sufficient• Rosetta – over 250 complaints• Google admissions - the only effectivetrademark policy is to allow trademark usage forkeywords but not allow trademark usage in adtext - title or body• Google’s internal studies probative as to actualconfusion 4.25.2012
  33. 33. Rosetta Stone (4) .... 33Sophistication of Consuming Public:“internal Google study reflect[s] that even well-educated, seasoned Internet consumers areconfused by the nature of Googles sponsoredlinks and are sometimes even unaware thatsponsored links are, in actuality,advertisements” 4.25.2012
  34. 34. Rosetta Stone (5) .... 34Functionality Defense:Reversed district court’s holding thatGoogle’s use of keywords was functionalContributory Infringement:Remanded – question of fact as to whetherGoogle continued to supply services toknown infringers 4.25.2012
  35. 35. Network Automation v. Advanced SystemsConcepts (9th Cir. 2011)  35 Trademark owner lawsuit against keyword advertiser (compare Rosetta Stone, suing search engine) Network Auto’s ads did not use plaintiff’s trademark Buying keyword ads constitutes a use in commerce (accord: Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir. 2009) (selling keywords is use in commerce) 4.25.2012
  36. 36. Network Automation (2) ... 36 Most relevant factors to likelihood of confusion: (1) strength of the mark; (2) evidence of actual confusion; (3) type of goods/ degree of care likely to be exercised by the purchaser; and (4) labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page 4.25.2012
  37. 37. Network Automation (3) ... 37 Demise of “Initial Interest Confusion”? • “Internet users on the whole exercise a low degree of care.” Brookfield Commc’ns v. West Coast Entm’t Corp.,174 F.3d 1036 (9th Cir. 1999) • “the owner of the mark must demonstrate likely confusion, not mere diversion” . . . [“initial interest” limited to] “misleading and deceptive.” Network Automation, 2011 4.25.2012
  38. 38. Network Automation (4) ... 38 Similar marketing channels: “it would be the rare commercial retailer that did not advertise online, and the shared use of a ubiquitous marketing channel does not shed much light on the likelihood of consumer confusion” => Preliminary injunction vacated 4.25.2012
  39. 39. Louis Vuitton v. Akanoc (9th Cir. 2011) 39 Web host liability/counterfeiting retailers     - $32M damages at trial -"providing direct infringers with server space" qualifies as a material contribution for contributory copyright infringement. De facto notice/takedown for trademarks? See also Tiffany (NJ) Inc. v. eBay Inc., 600 F. 3d 93 (2nd Cir. 2010)  4.25.2012
  40. 40. Computer Fraud and Abuse Act (CFAA) 40 18 U.S.C. § 1030(a)(4): (a) Whoever— (4) knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value . . . shall be punished . . . . 4.25.2012
  41. 41. CFAA - U.S. v. Nosal (9th Cir. 2011) (panel) 41 Company policy "restricted the use and disclosure of all such information, except for legitimate [company] business” "an employee exceeds authorized access ...when he ...violates the employers computer access restrictions -- including use restrictions” 4.25.2012
  42. 42. CFAA - U.S. v. Nosal (9th Cir. 2012) (en banc) 42 “we hold that the phrase ‘exceeds authorized access’ in the CFAA does not extend to violations of use restrictions” (Majority, Judge Alex Kosinski) “This case has nothing to do with playing sudoku, checking email, fibbing on dating sites, or any of the other activities that the majority rightly values. It has everything to do with stealing an employer’s valuable information to set up a competing business with the purloined data, siphoned away from the victim, knowing such access and use were prohibited in the defendants’ employment contracts” (Silverman, dissenting) 4.25.2012
  43. 43. CFAA - U.S. v. Tolliver (3rd Cir. 2011) 43 Upheld CFAA conviction of former bank teller who provided confidential account information to "check runners" who cashed fraudulent checks against the accounts of bank customers No reference to bank policies, but "there was sufficient evidence" that "Tolliver exceeded her authorized access" because "she did not have a business purpose" to access the customers accounts 4.25.2012
  44. 44. CFAA - U.S. v. Teague (8th Cir. 2011) 44 8th Cir. upheld CFAA conviction where employee viewed Obama student loan data, but did not remove/use it Compare: U.S. v. Czubinski (1st Cir. 1997) (“merely” viewing data insufficient - there must be a "showing of some additional end -- to which the unauthorized access is a means”) 4.25.2012
  45. 45. CFAA - Pulte Homes v. Laborers Intern’lUnion (6th Cir. 2011) 45 Labor union "bombarded" employer’s computer systems with emails and voicemails disrupting communications with its customers/ vendors Liable for "knowingly caus[ing] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally caus[ing] damage without authorization, to a protected computer" 4.25.2012