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Tenenbaum: An Alternative View

March 30, 2011 Leave a comment

The Jury Trial Right Is A Right Cherished Worldwide

Many excellent commentaries have been written on SONY BMG Music Entertainment et al. v. Tenenbaum, 721 F. Supp. 2d 85 (D.Mass. 2010)(the “Tenenbaum case”).  E.g.,  Andrew Berger’s at http://urly.it/12jr.  Most conclude that the District Court applied the wrong standard in determining whether the jury award in the case violated due process.  They suggest that if it had only applied the “Williams” standard, rather than the “BMW” or “Gore” standard, it would have recognized that the jury did not overstep its bounds.  While I agree and recommend the commentaries, I think the Tenenbaum Court made even graver errors. It mounted an “as-applied” challenge to the jury’s award that was not itself constitutionally permissible.

 

How can I say this? Very simply, because the Court had already confirmed three things:  It clearly found that the Copyright Act was applicable to the case. SONY BMG Music Entertainment v. Tenenbaum, 672 F. Supp. 2d 217 (D.Mass. 2009) (“Tenenbaum #2″); SONY BMG Music Entertainment v. Tenenbaum, 626 F. Supp. 2d 152, 155 (D.Mass. 2009) (“Tenenbaum #1″) It found the statute itself to be constitutional. Tenenbaum #1 at 152-154.[1] And, it found the jury had been properly instructed on awarding damages under its provisions.  Tenenbaum #3, 721 F. Supp. 2d at 92-93.

In my opinion, once it had found these three things, its constitutional inquiry was at an end.  It could not go on to undertake the analysis it did and unilaterally reduce the jury’s award without either 1) rewriting the statute (by substituting a different statutory damages range), thereby violating separation of powers or 2) substituting its own judgment – for the jury’s – of the amount that should be awarded within the original range, thereby violating the Seventh Amendment.  It wasn’t entitled to do either.[2]

It was the District Court, therefore, and not the jury that violated the Constitution.

The Proceedings Before The District Court:

Under section 504 of the Copyright Act, a plaintiff is entitled to elect his remedy.  He can either choose an “actual damage” remedy or a form of liquidated damages.  In 1999, the United States Congress increased the statutorily-prescribed range for the latter remedy.  As a consequence, a litigant that opts for statutory damages is entitled to recover between $ 750 and $ 30,000 per infringement.[3] Under the Seventh Amendment, the United States Supreme Court has been unequivocal in holding that the amount to be awarded within this range is a matter for a jury, rather than the court.  See Feltner v. Columbia Pictures Television Inc., 523 U.S. 340, 353 (1998)(the right to a jury trial includes “the right to have a jury determine the amount of statutory damages … awarded to the copyright owner” for an infringement).

Consistent with this constitutional imperative, in the Tenenbaum case, the United States District Court for the District of Massachusetts initially left it to a jury to decide how much Sony and RIAA were entitled to recover for the unlawful downloading and file-sharing of their music.  The jury awarded an amount within the range prescribed by the statute- or $ 22,500- for each infringement.[4] On July 9, 2010, the court set aside the jury’s award on the grounds that it allegedly violated defendant’s due process rights.  The District Court made its own assessment of the damages to which it believed plaintiffs were entitled and reduced the jury’s award accordingly.  Specifically, it reduced the per-infringement award from $ 22,500 to $ 2,250 and total award from $ 675,000 to $ 67,500. [5]

As suggested above, after reviewing the decision in detail, I have reluctantly come to the conclusion that it was not the jury, but the District Court that acted unconstitutionally.  It usurped Congress’ role, invaded the province of the jury, and deprived plaintiffs of a property right.  Each of these usurpations violated the Constitution.  The first violated separation of powers principles; the second, the Seventh Amendment; and the third, the Due Process and Just Compensation clauses.

I examine the first two violations briefly.

A.      A Court Cannot Alter A Statutorily-Prescribed Damages  Range Without Violating Separation Of Powers.

It is a fundamental precept of separation-of-powers principles that “the lawmaking function belongs to Congress, U.S. Const., Art. I, §, and may not be conveyed to another branch or entity.”  Loving v. United States, 517 U.S. 748, 758 (1996)(quoting Field v. Clark, 143 U.S. 649, 692 (1892)).  This principle does not mean that only Congress can promulgate rules; it can obviously delegate some of its authority.  Wayman v. Southard, 23 U.S. 1 (1825).

“‘The true distinction . . . is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made.'”

Loving, supra, 517 U.S. at 759 (quoting Cincinnati, W. & Z.R.Co. v. Commissioners of Clinton County, 1 Ohio St. 77, 88-89 (1852)).

It follows that when Congress has specified the remedy or remedies that attach for the violation of a statute, the courts have no authority to rewrite the remedial scheme.  See, e.g., Transamerica Mortgage Advisors v. Lewis, 444 U.S. 11, 20 (1979); National RR. Passenger Copr. V. National Ass’n of Railroad Passengers, 414 U.S. 453, 458 (1974)(when legislation specifies a particular remedy or remedies, that remedy is generally understood to be exclusive); Wilder Mfg. Co. v. Corn Products Refining, 236 U.S. 165, 174-75  (1915)(where a statute prescribes the penalty for an offense or remedy for a statutory violation, “the punishment or the remedy can be only that which the statute prescribes”); Barnet v. National Bank, 98 U.S. 555 (1878).   This is presumably as true where Congress has provided for a range of damages as where it has specified a precise amount.

A court cannot alter the upper or lower limits of the statutorily-prescribed range without usurping the legislative function.  And, while it could always, theoretically, have found the statute to have been unconstitutional on its face, it did not to do that here. (See Tenenbaum #1 at 152-154).  Quite to the contrary, it upheld the facial validity of the Act’s provisions and the instructions it gave regarding their application.  (See Tenenbaum #3 at 92-93). The only fault the District Court found was with the jury’s verdict. See Tenenbaum #3.  Specifically, it took issue with the per-infringement figure the jury chose from within the range prescribed by the statute to remedy the proven infringement.[6]

B.      The Supreme Court’s Punitive Damages Jurisprudence Wasn’t Applicable To The Tenenbaum Case And Did Not Authorize The Court’s Actions.

The Tenenbaum Court premised its right to review the amount of the jury’s award for excessiveness on the Supreme Court’s punitive damages jurisprudence.  Its reliance is misplaced.

In Cooper Industries v. Leatherman Tool, the United States Supreme Court held that a court is not precluded by the Seventh Amendment from reviewing an award of punitive damages because the amount of punitive damages a jury awards in a case is not a “fact” within the meaning of that Amendment.  The Seventh Amendment isn’t implicated, therefore, when a court substitutes its own judgment of what an appropriate punitive damages award would be for that of the jury.

The opposite is true when a court substitutes its judgment of the appropriate statutory damages award for that of the jury. Why the difference?  Because the United States Supreme Court has been unequivocal in holding that the Seventh Amendment affords a plaintiff the

“right to a jury trial on all issues pertinent to an award of statutory damages under 17 U.S. C. § 504(c), including the amount itself.”

Feltner, 523 U.S. at 355; see also page 353 (“The right to a jury trial includes the right to have a jury determine the amount of statutory damages, if any, awarded to the copyright owner.”).  It follows that “if a party so demands, a jury must determine the actual amount of statutory damages under § 504(c) in order “to preserve ‘the substance of the common-law right of trial by jury.'” 523 U.S. at 355 (emphasis added).

By substituting its own judgment as to where within the statutory range the appropriate per-infringement award lay in this case, the Tenenbaum court usurped the decision-making function of the jury and violated the Seventh Amendment.

This conclusion is inescapable since a review of the District Court’s Opinion demonstrates that it engaged in virtually the same calculus it instructed the jury to undertake.  Thus, by its own account, the Court instructed the jury to arrive at a damage figure by considering the following factors:

(a) The nature of the infringement;

(b) The defendant’s purpose and intent;

(c) The profit that the defendant reaped, if any, and/or the expense that the defendant saved;

(d) The revenue lost by the plaintiff as a result of the infringement;

(e) The value of the copyright;

(f) The duration of the infringement;

(g) The defendant’s continuation of infringement after notice or knowledge of copyright claims;

(h) The need to deter this defendant and other potential infringers, and

(i)  The defendant’s “willfulness,” if the jury found the infringements to be willful.

(Tenenbaum #3 at 93, citing Jury Instructions 3, Case No. 03-cv-11661-NG, document #909.)

As Tenenbaum #3 then goes on to demonstrate, the District Court considered precisely these same factors.  Thus, it considered

  • the nature of the infringement in which the defendant had engaged, finding “file-sharing” to be “low on the totem pole of reprehensible conduct” (721 F. Supp. 2d at 116);
  • the defendant’s purpose and intent, noting that Tenenbaum acted “willfully,” although not for “commercial gain,” (see, e.g., 721 F. Supp. 2d at 112, 116 (“Tenenbaum   willfully engaged in thousands of acts of copyright infringement”);
  • the benefit Tenenbaum reaped and/or expense he saved by virtue of the infringement, finding that he saved at least $ 1,500 per year (i.e., the cost of subscribing to a music downloading service, see 721 F. Supp. 2d at 114);
  • the revenue plaintiff lost as a result of the infringements, calculating plaintiffs loss at either $ 1.00/per song or $1,500 per subscription license (see 721 F.Supp. 2d at 114-116);[7]
  • more generally, the value of the copyright, divining from its review of 50 other copyright infringement cases [see 721 F.Supp. 2d at 108-110 and footnote 14] that its value lay somewhere between $ X and $ Y;
  • the duration of Tenenbaum’s infringement, noting that it extended over eight years or 96 months (see 721 F.Supp. 2d at 114 and n. 16);
  • the fact that the infringement continued even after Tenenbaum was told to cease and desist and was put on notice of the claims;  (see at 721 F.Supp. 2d at 116, 119-20); and, finally,
  • defendant’s willfulness (see, again, 721 F.Supp. 2d at 116 (“Tenenbaum willfully engaged in thousands of acts of copyright infringement”).

Since it is the jury, and not the court, that is constitutionally tasked with these fact-finding functions, the Court usurped the jury’s function when it undertook its own analyses and evaluations.  See Feltner; City of Monterrey.

The real constitutional question in Tenenbaum is not whether the jury verdict violated due process, but whether the Judge violated the Seventh Amendment.

C.      The Court Violated The Seventh Amendment A Second Time When It Reduced The Award Sua Sponte.

The Seventh Amendment’s re-examination clause provides that

“in suits at common law, no fact tried by a jury shall be … re-examined … [other than] according  to the rules of the common law.”

U.S.Const., Seventh Amendment.  Because the “common law” this clause alludes to “is … the common law of England,” it only permits facts decided by a jury to be re-examined in the same circumstances they could have been re-examined in 1791Dimick v. Schiedt, 293 U.S. 474, 487 (1935)(Seventh Amendment “in effect adopted the rules of the common law, in respect of trial by jury, as these rules existed in 1791”).

There were only three modes of re-examining such facts at common law:  A court could re-examine them in the context of: (1) granting a new trial, (2) offering the parties a consensual “remittitur,” or (3) in connection with issuing a venire facias de novo writ.[8]

The Seventh Amendment is “a prohibition to the courts of the United States to re-examine any facts tried by a jury in any other manner.”[9] Parsons v. Bedford, 3 Pet. 433, 447-48 (1830)( Story, J).  See also Hetzel v. Prince William, 523 U.S. 208, 211 (1998); Browning-Ferris Indus. of Vermont, Inc. v. Kelco Disposal, Inc., supra; Kennon v. Gilmer, 131 U.S. 22, 29-30 (1889).

The Tenenbaum Court did not reexamine the jury’s facts in any of the three ways permitted by the Amendment.  In other words, it did not do so in the course of granting a new trial, as part of a common-law remittitur or in association with venire facias.

Instead, after conducting its own evaluation of the facts, it simply substituted its award for the jury’s.   It relied on three Court of Appeals’ decisions to justify the substitution:  Bisbal-Ramos v. City of Mayaguez, 467 F.3d 16 (1st cir. 2006); Ross v. Kansas City Power & Light Company, 293 F.3d 1041 (8th Cir. 2002); and Johansen v. Combusion Engineering, Inc., 170 F.3d 1320 (11th Cir. 1999).  None of these cases involved the Copyright Act or, indeed, statutory damages.  Rather, in each, the District Court was reducing a punitive damages award to the maximum that was constitutionally permissible.

As the Eighth Circuit noted in responding to a claim that the District Court’s reduction constituted an improper and unilateral remittitur:

“While the traditional remedy of remittitur does require the plaintiff’s consent in order to comport with the Seventh Amendment right to a jury trial, Thorne, 197 F.3d at 1212, [fn4] the court’s mandatory review of a punitive damages award does not implicate the Seventh Amendment.  The plaintiff’s consent to a constitutional reduction of a punitive damages award is ‘irrelevant’ because the court must decide this issue as a matter of law.”

Ross, 293 F.3d at 1049-1050.

The Eleventh Amendment is in accord:

“… [W]here a portion of a verdict is for an identifiable amount that is not permitted by law, the court may simply modify the jury’s verdict to that extent and enter judgment for the correct amount. …The Seventh Amendment is not offended by this reduction because the issue is one of law and not fact. … No one would dispute that the court, not the jury, has the responsibility for determining this constitutional limit.  Courts decide questions of law, not juries.”

Johansen, 170 F.3d at 1330-1331.

The issue reduces, therefore, to a question of whether there is any reason to believe that the Supreme Court has retreated from its position that “the amount of statutory damages” to be awarded a copyright holder under § 504(c) is a question reserved to the jury.  If it hasn’t retreated from that position- and there is no reason to believe it has- then the Seventh Amendment is implicated by the actions the District Court took in this case and no amount of manipulating the “fact” and “law” labels can avoid that fact.

Indeed, the Seventh Amendment hasn’t simply been implicated, it has been violated in the most fundamental of ways.  In my opinion, there is only one outcome on appeal that would accord with the rule of law: reversal and a remand with directions to reinstate the jury verdict.

The fact that one may or may not personally applaud the outcome is irrelevant.  If one believes in upholding the rule of law, then no other outcome is possible. It is the only outcome that can be reconciled with the manner in which our Constitution has allocated power between Congress and the courts, and judge and jury.

So, even for P2P-ers and file-sharers, much more is at stake than simply money.  The right to have the representatives you elect make the laws in this country is at stake, as well as the right to trial by jury.  Both rights are in jeopardy in this case, even if they are not specifically addressed.[10]


[1] In St. Louis I.M. & S. Ry. Co. v. Williams, 251 U.S. 63 (1919), the Supreme Court considered whether the range of penalties provided for by a particular statute (i.e., between $50 and $300, plus costs and attorneys’ fees) was “so severe and oppressive” and/or “obviously unreasonable” as to “amount to a denial of due process.”  It did not, as the Tenenbaum Court suggests, “squarely consider[ ] the issue of whether a jury’s award … violated the Due Process Clause.” 721 F. Supp. 2d at 95 (emphasis added).

The distinction is an important one for the following reason:  Separation of powers principles make the first type of inquiry appropriate.  The Seventh Amendment makes the second inappropriate, except in accordance with its terms.

While the Tenenbaum Court could always, of course, have undertaken the type of statutory inquiry the Williams case contemplated, it obviously didn’t think it worthwhile.

[2] It could, of course, have offered a remittitur or new trial.

[3] There are only two circumstances under which a statutory award can deviate from that range:  (1) where a defendant is found to have acted “willfully,” damages of up to $ 150,000 per infringement can be awarded, and (2) where a defendant is found to have been an “innocent infringer,” damages as low as $ 200 per infringement can be awarded.  17 U.S.C. §504(c)(2).

[4] Since there were thirty compensable (30) infringements, the jury’s award totaled $ 675,000.

[5] This was the maximum the District Court said was constitutionally allowable given the specific injury before it.

[6] Query whether the fact that the figure falls within the range prescribed by an admittedly constitutional statute immunizes it against a due process challenge, or, indeed, any challenge except in accordance with the Seventh Amendment.  See post at fnotes 8 and 9.

[7] The District Court’s calculation in this regard is totally unrealistic.  Tenenbaum did not simply download music for his own personal use, he electronically uploaded it to a file so it could be shared with ever greater numbers of other Kazaa users.  As anyone familiar with the workings of Kazaa knows, a song or tune so uploaded goes “viral”, and within a short period of time, it is being shared with untold numbers of other users.  Tenenbaum’s actions didn’t simply deprive plaintiffs of one license, therefore; it deprived them of myriad licenses- perhaps millions.

[8]Venire facias de novo (meaning “may you cause to come anew”) is a writ a court uses to summon new jurors when there is some irregularity or impropriety in the constitution of an already-existing jury, or where the verdict that jury has returned is so ambiguous or imperfect that no judgment can be entered upon it.

[9] There is nothing in either the Copyright Act or Feltner that precludes a court from exercising its discretion to propose a common-law remittitur, provided the remitted damages remain within the permitted statutory range and plaintiff is afforded the opportunity to elect between a remittitur (or reduction in damages) or a new jury trial.  Plalintiffs made it clear that they would not have agreed to a remittitur in this case, so a new jury trial would have been required.

[10] Since courts do not reach constitutional issues where they can be avoided, I would not expect the Seventh Amendment issue to be discussed.  There are myriad other grounds on which the First Circuit can reverse.  It is only if it might otherwise affirm the lower court that it might address the issue.  But, in my opinion, affirmance is unlikely.

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To The Olympic Committee: Why Not A “Public Domain” Mascot?

February 28, 2011 Leave a comment

I tweeted this morning about the fact that the 2014 Winter Olympics just chose a polar bear as one of its three mascots.  No sooner did it do so than there was a copyright challenge.  The creator of an earlier mascot from the 1980 Olympics claimed his “teddy bear” has been infringed.

My tweet met with a reply – and very trenchant complaint.  Filemot tweeted back: “@bassesq if it is not fair use to show us the competing mascots its a really boring story.”

Wishing to oblige and thinking it should be fair use to illustrate my news flash by showing a side-by-side comparison of the two mascots, I searched for and found the images on Yahoo.  You can see them here.  http://urly.it/126r

Finding both images uninspiring,  however, I offer the following images in their place.   While they are not the images in contention, they have two advantages over those that are.  They are unquestionably cute and  can be reproduced in many circumstances without infringing copyright.  The first image is in the public domain.  The second, subject to a GNU or Creative Commons license.


It is unlikely, alas, that the Olympic Committee will ever adopt a “public domain” polar bear or Creative Commons “teddy.”   Why?  Because it makes considerable merchandising revenue  from licensing its mascots’ images.

Merchandising aside, however, perhaps we have an idea here:  How about it, Olympic Committee?  How about adding a 3-minute copyright challenge to the sports already featured at the Games?

Puede Decir “No” A La Utilización De Su Nombre En Los Anuncios De Facebook

February 8, 2011 Leave a comment

Clic El Buton "Me Gusta" No Es Hacer Un Respaldo ComercialPor lo tanto, fans de Facebook, que pensó que eran dando apoyo de una forma casual a algún evento, producto, cine, restaurante o establecimiento? Piense otra vez. Tú y tus amigos tal vez pronto encuentren sus nombres y su imagen utilizados en la publicidad del cine o del producto! Y, por si acaso te has preguntado, no, no será compensado por su “respaldo.”

Esta es la consecuencia de la nueva política de Facebook Social de Anuncios, los anuncios que pares anuncios escritos por sus anunciantes con información obtenida de los usuarios de FB.     (Por ejemplo, informacion indicando que “te gusta” una página o evento).

Se da el siguiente ejemplo del tipo de “anuncios sociales” que se crearán:

Supongamos que un establecimiento llamado “Denver Sushi” paga por un anuncio que aparezca en Facebook.  FB dice que puede “par” su anuncio con un rastreo banner o línea que crea que proclama “Nan Gao le gusta Denver Sushi.” Si se hace este apareamiento, cuando los “amigos” de Nan den realizar a una búsqueda que recupe el anuncio de Denver Sushi, es possible que van también activar al “respaldo”.  Resultado final: El pseudo-“respaldo” de Nan Gao aparece en algunas de las páginas de sus amigos de Facebook.

Aparte de ganar dinero para Facebook, parece haber dos objetivos:   Para convencerte de que, si su amigo le gusta a Denver Sushi, usted cavar sus rollos de California, también. Por otra parte, para convencer a los amigos y familiares de Nan tomarla a Denver Sushi para celebrar alguna ocasión.

¿Es este uso de la información de Nan adecuada?

En mi opinión, probablemente no. Por varias razones.

(1) Puede constituir una violación del “derecho a la intimidad” de Nan o de sus “derechos de publicidad”.

Quiero aprovechar la ley de Nueva York como un ejemplo. En virtud del artículo 50 de la Ley de Derechos Civiles de Nueva York, una empresa o corporación no puede usar el nombre de una persona, un retrato o una imagen para la publicidad sin el consentimiento expreso y por escrito de esa persona.

FB ha tratado de satisfacer este requisito mediante la modificación de sus “Términos de Uso” con el fin de asegurarse de que usted dé el consentimiento de forma predeterminada. En otras palabras, indica que usted ha autorizado a FB para utilizar su información como parte de las parejas de anuncios sociales que crea a menos que “opten” expresamente “por no” por el programa. [1] En mi opinion, eso no cortar la mostaza. Usted tiene que ser el que libremente y a sabiendas autoriza a FB a utilizar su información para fines publicitarios. FB no puede autorizar a si mismo. (Sería otra cosa, en mi opinión, si FB establezca al programa de “anuncios sociales” en una forma de “opt-in”, en vez del revés, y equiparó aceptación afirmativa con el consentimiento. Esto probablemente satisfaga el requisito legal.)

Antes de continuar, debo señalar, que FB “Términos de Uso” pretende incluir una clausula sobre “le eleccion de la ley” que indica que regule la ley de California. Dejo a los abogados con licencia en el Estado de California para opinar sobre si las prácticas de FB les va mejor bajo la ley de California. Me sorprendería si lo hicieran. En todo caso, California tiene la reputación de tener leyes de privacidad y “derecho de publicidad” más estrictas que en otros lugares. Después de todo, porque es el hogar de Hollywood, es sensible a la necesidad de proteger a los nombres y los imagines de persona contra la explotacion no autorizada.

(2) Violaciónes posibles de los derechos de autor: Si FB va más allá y añade foto de Nan, avatar o icono al “anuncio + respaldo,” es possible que puede acabar violar no sólo a los derechos de privacidad y publicidad, sino también a los derechos de autor.

Una vez más, FB ha intentado cubrirse. Por lo tanto, sus “Términos de Uso” salgan a decir que usted le da una licencia “no-exclusiva, transferible, sublicenciable, libre de regalías, a nivel mundial para utilizar cualquier contenido de IP que publiques.” Define “contenido de IP” en la moda trabuco como “el contenido protegido por derechos de propiedad intelectual, como fotos y vídeos”. FB “,” Declaración “, Párr. 10.

Una vez más, tengo varias preguntas. En primer lugar, si dicha cláusula puede efectuar una “transferencia” de los derechos en el sentido de la Ley de Derecho de Autor. Ver 17 USC § 201 (d) y 101 (definición del término “transferencia de la titularidad de derechos de autor”). En segundo lugar, aun suponiendo FB puede presumir de haber conseguido algunos derechos de sus usuarios, si alguno de estos derechos “no exclusivo” pueda ser “transferibles” y / o “sub-permisible.” Yo no lo creo.

(3) Publicidad Falsa y Prácticas Comerciales Engañosas: Por último, el uso de FB de nombre de usuario de Nan, la foto o avatar como parte de un anuncio puede dar lugar a una valida causa de accion de “publicidad falsa,” o “las prácticas comerciales engañosas”. Creo que sería una base de buena fe para seguir adelante bajo la ley de Nueva York. Dejo a los abogados admitidos en California para decir si el mismo podría decirse allí.

* * *

Aunque tengo serias dudas sobre la legalidad del programa de “anuncios sociales” del FB y el uso que pretende hacer de su información, ¿por qué esperar hasta que un tribunal decide la cuestion? Usted puede protegerse ahora mismo y decir a FB en términos claros y inequívocos que no puede utilizar a su información en sus “anuncios sociales”.

Esto es lo que debe hacer:

(1) Regístrate en Facebook. Ir a la parte superior y derecha de la página. Despliegue el menú llamado “Cuenta”.

(2) Haga clic en “Configuración de la Cuenta”.

(3) Haga clic en la pestaña a la derecha, llamado “los Anuncios de Facebook.”

(4) Cierre todas las ventanas emergentes, por ejemplo, “Descripción de Ayudas Sociales”.

(5) Entonces, donde dice:

“Permita que los anuncios en las páginas de plataforma muestran mi

información a”. . .

Hay que cambiar la selección de la opción predeterminada, “Sólo mis amigos,” a

* “Nadie”.

(6) Haga clic en “Guardar Cambios”, para registrar el cambio.

(7) Usted tendrá que repetir este proceso una segunda vez en la parte inferior de la página.

Allí, donde dice

“Mostrar mis acciones sociales en los anuncios de Facebook a”,

Otra vez, hay que cambiar la selección de la opción predeterminada, “Sólo mis amigos,” a

* “Nadie”.

(8) Y, otra vez, hay que hacer clic en “Guardar Cambios”.

A menos que usted opta por no dos veces, parece que FB va a interpretar sus acciones como haber dado su consentimiento al uso de su información.

___________________________________________________

Nota al pie:

[1] Por lo tanto, sus “Términos de Uso” se dispone lo siguiente:

Usted puede utilizar su configuración de privacidad para limitar su nombre y su foto de perfil puede estar asociada con contenido comercial, patrocinado, o relacionados (por ejemplo, una marca que te gusta) sirve o mejorados por nosotros. Usted nos da permiso para usar su nombre y su foto de perfil en relación con ese contenido, con sujeción a los límites que tú lugar.

FB ” Declaración de Derechos y Responsabilidades “, Párr. 10 (énfasis agregado)

JUST SAY “NO” TO FACEBOOK’S AD POLICY

February 3, 2011 Leave a comment
Casually “Like” Does Not Mean Formally Endorse

So, Facebook fan, you thought you were casually expressing a “like” for some event, product, film,  restaurant or establishment?  Think again.  You and your friends may soon find your names and likenesses being used to advertise that film or product!  And, just in case you wondered, no, you won’t be compensated for your “endorsement.”

This is the consequence of Facebook’s new Social Ads Policy, which pairs advertisements posted by its advertisers with information derived from FB users’ “social actions.”  FB seems to define social actions  as user-generated postings and indications of user-preferences (e.g., when you indicate that you “like” a page or posting).

It gives the following example of the kinds of “social ads” that will be created:

Assume that an establishment named “Denver Sushi” pays for advertising to appear on Facebook.  FB says it may “pair” that ad with a banner or crawl-line it creates that proclaims “Nan Gao likes Denver Sushi.”   If it makes that pairing, when Nan’s “friends” conduct a search that meta-triggers the Denver  Sushi ad, they may well also trigger the “endorsement.”  End result:  Nan Gao’s pseudo-“endorsement”  ends up being displayed  on some of her friends’ Facebook pages.

Aside from making money for Facebook, there would appear to be two objectives:  To convince you  that, if your friend Nan likes Denver Sushi, you will dig their California rolls, too.  Alternatively, to     persuade friends & family to take Nan to Denver Sushi to celebrate some occasion.

Is this use of Nan’s information proper?

In my view, probably not.  For several reasons.

(1) It may well violate Nan’s “right of privacy’ and/or “right of publicity.”

Let me take the law of New York as an example.  Under section 50 of the New York Civil Rights Law, a company or corporation cannot use a person’s name, portrait or picture for advertising without that person’s express written consent.

FB has attempted to satisfy this requirement by modifying its “Terms of Use” so as to ensure that you give that consent by default.  In other words, it states that you authorize FB to use your information as part of the social ad pairings it creates unless you expressly opt out of the program.[1] As far as I’m concerned, that doesn’t cut the mustard.  You have to be the one to freely, knowingly and expressly authorize FB to use your information for advertising purposes.  FB cannot authorize itself.  (It would be different, in my view, if FB set the “social ads” program up on an “opt-in” basis, and equated affirmatively “opting in” with consent.  That would probably satisfy the legal requirement.)

Lest we get ahead of ourselves, I should note, that FB’s “Terms of Use” purport to contain a choice-of-law provision to the effect that California law governs.  I leave it to lawyers licensed to practice in the State of California to opine on whether FB’s intended practices would fare any better under California law.  I would be surprised if they did.  If anything, California has the reputation for having stricter privacy and “right of publicity” laws than elsewhere.   After all, because it is home to Hollywood, it is sensitive to the need to protect individual’s names and likenesses against improper commercial use.

(2) Possible Copyright Violations: If FB goes further and adds Nan’s photo, avatar or icon to the ad+endorsement pairing, it may end up not only violating rights of privacy and publicity, but also the photo’s copyright.

Once again, FB has attempted to cover itself.   Thus, its “Terms of Use” go on to state that you give it a “non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post.”  It also goes on to define “IP content” in blunderbuss fashion as “content that is covered by intellectual property rights, like photos and videos”.   FB “”Statement,” Para. 10.

Again, I have several questions.  First, whether that clause can even effect a “transfer” of rights within the meaning of the Copyright Act.  See 17 U.S.C. §201(d) and 101 (definition of term “transfer of copyright ownership”).  Second, even assuming FB can claim to have gotten some rights from its users, whether any “non-exclusive” rights it can claim are themselves “transferable” and/or “sub-licensable.”  I do not believe so.

(3)  False Advertising & Deceptive Trade Practices: Finally, FB’s use of Nan’s username, photo or avatar in connection with or as part of a third-party advertisement may give rise to a valid “false advertising,” unfair or “deceptive trade practices” claim.   I think there would be a good faith basis for such a claim in New York.  I leave it to California lawyers to weigh in on the “deceptive trade practices” laws there.

* * *

Although I have serious doubts about the legality of FB’s “social ads” program and the use it intends to make of your information, why wait for a court to rule?  You can protect yourself  now by telling FB in no uncertain terms that it cannot use your information in its “social ads.”

This is what you do:

(1) Sign into Facebook. Go to the top Righthand part of the Page.  Pull down the “Account” Menu.

(2) Click on “Account Settings”.

(3) Click on the Tab at the top of the Page that is furthest to the right,  entitled “Facebook Ads.”

(4) Close any Pop-ups, e.g., “Understanding Social Aids”.

(5) Then, where it says,

Allow ads on platform pages to show my

information to . . .

Change your selection from the default,

  • “Only my Friends”   to
  • “No one.”

(6) Click on “Save Changes,” to record your change.

(7) You will have to REPEAT this process a SECOND Time at the bottom of the Page.

There, where it says

“Show my social actions in Facebook Ads to:”

Change your selection from the default,

  • “Only my Friends”   to
  • “No one.”

(8)  Again, click on “Save Changes.”

Unless you opt out twice, it would appear FB intends to interpret you as having “consented” to its use of your information in advertising.


[1] Thus, its “Terms of Use” provide as follows:

You can use your privacy settings to limit how your name and profile picture may be associated with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us. You give us permission to use your name and profile picture in connection with that content, subject to the limits you place.

FB “”Statement of Rights and Responsibilities,” Para. 10 (emphasis added).

Los Humanos y Elfos Evadieron Una Bala de Derechos de Autor

December 20, 2010 Leave a comment

“]Un guerrero de "World of Warcraft" de época anterior? Imagen de da Vinci [de dominio público a través de Wikimedia Commons]Aquellos de ustedes que están interesados en la ley de copyright de los Estados Unidos debería leer la decisión de la semana pasada por el Tribunal del Noveno Circuito de Apelaciones en el caso que se llama “World of Warcraft” (o “WoW”),  http://bit.ly/gGa3D8.  No, no tiene nada que ver con Orson Welles o HG Wells. Se trata de un universo virtual que muchos de nosotros nunca entrará.

 

Los hechos básicos del caso se resume asi: La parte demandada Blizzard creó un juego en línea (“World of Warcraft”) que ha atraído a millones de jugadores. Al igual que muchos juegos, se trata de varios niveles de dificultad. A medida que avances de una fase a otra, el juego se vuelve más compleja:

…  los jugadores de WoW desempeňan diversas funciones, como los humanos, elfos y monstruos, con el objetivo central de avanzar en el carácter a través de 70 niveles, participando en misiones y participar en batallas con monstruos. Como jugador avanza, el personaje acumula premios como la moneda del juego, armas y armaduras.  El mundo virtual de WoW tiene su propia economía, en que los personajes usan su dinero virtual para comprar y vender artículos directamente el uno del otro, a través de vendedores, o el uso de casas de subastas. Algunos jugadores también utilizan WoW capacidades de chat para interactuar con los demás.

Decisión en la Parte I (A), página 5.

El demandante MDY creó un “bot” (“Glider”) que sustituyen a los jugadores de carne y hueso en las primeras rondas de juego. . . permitiendo a quienes usen el bot atender a otras cosas durante estas rondas y avanzar más rápidamente a niveles avanzados. Cuando Blizzard detectado el “bot”, creó un programa (“Warden”) para impedir a los que usen el “bot” conectir a su servidor. El demandante entonces se crea un programa para eludir Warden y permitir a los que usen Glider seguir jugando. MDY demandó en el tribunal que se declare que no se infrinjan los derechos de Blizzard y Blizzard reconvino.

El Tribunal de Distrito decidió que MDY ha cometido una serie de agravios o daňos. Decidió que era indirectamente responsable de infringir los derechos de autor directo. Decidió que se había violado dos de la DMCA “disposiciones contra la elusión”, diseñada para proteger contra el acceso no autorizado a las obras con derechos de autor. Y decidió que se había cometido la interferencia con las relaciones contractuales, un daňo bajo la ley estatal en véz de la ley federal. (Las relaciones con las cuales interfirieron fueron las que existen entre Blizzard y sus no-bot jugadores).

El Noveno Circuito revocó la sentencia del tribunal inferior en aspectos sustanciales. Tres aspectos de la decisión son más notables:

En primer lugar, el Noveno Circuito determinó que aunque el uso del robot (“Glider”) estaba en violación de los “Términos de Uso” de Blizzard, sólo se ha violado un “pacto contractual” y no un “estado de derecho de autor.” Eso significa que los jugadores que usen Glider no cometieron la infracción de derechos de autor directo, y MDY no podría ser indirectamente responsable de infringir. Este aspecto de la sentencia así puede tener repercusiones mucho más allá de los límites del caso, si sirve como modelo para la eliminación de los recursos (y sanciones) de derechos de autor cuando hay violaciónes de “Términos de Uso.”

En segundo lugar, el Noveno Circuito determinó que a pesar de que la elusión de las defensas de Warden no permiten que exista infracción de derechos de autor, el demandado Blizzard tuvo una causa de acción contra MDY por violar § 1201 (a) (2) de la DMCA. En este sentido, el Noveno Circuito no estuvo de acuerdo con el Circuito Federal, que ha declarado que no puede existir una violación de DMCA en ausencia de una infracción del derecho de autor. Ahora que hay una división entre los circuitos sobre esta cuestión, es posible que el Tribunal Supremo de los Estados Unidos decidirá considerar la cuestión.  En mi opinión, el Noveno Circuito tiene el mejor argumento jurídico sobre esta cuestión en particular.

En tercer lugar, el Noveno Circuito devolvió a la Corte de Distrito el reclamo que trata de la interferencia contractual, porque habia una auténtica cuestión de hecho material. Decidió que la ley federal no reemplaza a la ley estatal en cuanto a este reclamo. Este es un tema sobre el que ha habido un debate considerable en numerosos casos.

En el análisis final, ambos bandos utilizaron una gran cantidad de moneda del mundo real tratando de redefinir al mundo virtual. Ni terminó aniquilando al otro.

Todavia, puede ser que la Corte Suprema va a decidir si ambos puedan seguir jugando … o si uno va a reclamar el terreno de juego entero.

WoW: Humans and Elves Dodge A Copyright Bullet

December 17, 2010 Leave a comment


 

A "World Of Warcraft" Warrior From An Earlier Time Perhaps? Leonard da Vince [Public Domain] via Wikimedia Commons

Those of you who are interested in United States copyright law should read this week’s decision by the Ninth Circuit Court of Appeals in the “World of Warcraft” (or “WoW”) case, http://bit.ly/gGa3D8.   No, it has nothing to do with Orson Welles or H.G. Wells.  It concerns a virtual universe many of us will never enter.

The basic facts of the case are this:  The defendant Blizzard created an online game (“World of Warcraft”) that has attracted millions of players.  Like many games, it involves various levels of difficulty.  As you advance from one round to the next, the   game becomes more complex:

WoW players roleplay different characters, such as humans, elves, and dwarves. A player’s central objective is to advance the characterthrough the game’s 70 levels by participating in quests and engaging in battles with monsters. As a player advances, the character collects rewards such as ingame currency, weapons, and armor. WoW’s virtual world has its own economy, in which characters use their virtual currency to buy and sell items directly from each other, through vendors, or using auction houses. Some players also utilize WoW’s chat capabilities to interact with others.

Op’n at Part I (A), page 5.

Plaintiff MDY created a “bot” (“Glider”) that could stand in for real-live players during early rounds of play . . . permitting users to attend to other things during these rounds and advance more quickly to advanced levels.  When Blizzard detected the “bot,” it created software (“Warden”) that prevented bot-users from connecting to its server.  Plaintiff then created a program to circumvent Warden and permit Glider-users to continue to play.  MDY sued for a declaration that it was not infringing Blizzard’s rights and Blizzard counterclaimed.

The District Court found that MDY committed a variety of torts.  It found that it was secondarily liable for direct copyright infringement.  It found that it had violated two of the DMCA’s “anti-circumvention provisions,” designed to protect against unauthorized access to copyrighted works.  And, it found that it had committed interference with contractual relations, a state-law tort.  (The relations interfered with were those between Blizzard and its non-bot players).

The Ninth Circuit reversed in substantial respects.  Three aspects of the decision are particularly worth noting:

First, the Ninth Circuit found that although the use of the bot (Glider) was in violation of Blizzard’s amended “Terms of Use,” it only violated a “contractual covenant” and not a “copyright condition.”  That meant that players using Glider did not commit direct copyright infringement, and MDY could not be secondarily liable for infringement.   This aspect of the ruling may well have reverberations far beyond the bounds of the case if it serves as a template for eliminating copyright remedies (and penalties) for many “Terms of Use” violations.

Second, the Ninth Circuit found that even though circumvention of Warden’s defenses did not enable there to be infringement, the defendant had a cause of action against MDY for violating § 1201(a)(2) of the DMCA.  In this respect, the Ninth Circuit parted ways with the Federal Circuit which has held that there cannot be any DMCA violation absent an infringement of copyright.  Now that there is a Circuit-split on this issue, the  matter  may well end up before the United States Supreme Court.   In my view, the Ninth Circuit has the better legal argument on this question.

Third, the Ninth Circuit sent the state-law tortious interference claim back to the District Court for trial, finding that there was a material issue of fact in dispute.  It specifically held that the state law claims were not preempted by the Copyright Act.  This is an issue about which there has been substantial debate in numerous cases.

In the final analysis, both sides used up a lot of real-world currency attempting to stake out virtual turf.  Neither ended up annihilating the other.

It may yet be up to the Supreme Court, however, to decide if they can both keep playing … or one is going to get royally hammered.

HarperCollins v. Gawker: Did The Court Get it Wrong?

November 30, 2010 Leave a comment

          It was over in the blink of an eye, the flash of a nanosecond.  It was declared an open-and-shut case.  But was it?  Was the Order the Court entered, requiring Gawker to take down

Copies Of "America by Heart" Were Subject To An Embargo

its sneak-peek postings of pages from Sarah Palin’s new book, legally sound?  Or, might the Court – had it considered the matter a bit longer – have concluded that there were a host of issues that should have precluded it from issuing a TRO?

          Most discussions I’ve seen of the case have focused on the issue of “fair use.”  In other words, they’ve assumed that Gawker infringed HarperCollin’s rights and focused on the question of whether Gawker could make out a defense.

          In my view, there was no need for the Court to rule on the issue of “fair use” in order to dispose of the preliminary application.  It should have denied the request for a temporary restraining order (“T.R.O.”) on threshold grounds.  What do I mean?   Simply this:  Its erudition aside,[1] the Court made four errors.  It reverted, as a practical matter, to an outmoded standard for deciding requests for injunctive relief.  It assumed that plaintiff’s publication right was infringed when, very likely, it wasn’t.  It assumed the existence of “irreparable harm,” when there was very likely no harm.  (Sales and pre-orders may even have been fueled.)  And, finally, it didn’t even examine the question of whether plaintiff’s pre-registration was proper, timely and effective.

          Let’s briefly examine each issue.

 Didn’t Salinger Change The Law?

           The District Court’s decision is really a throwback to an earlier time when copyright violations were presumed to result in injury and injunctions were automatically entered.   That was all supposed to have changed with the Supreme Court’s decision in ebay v. MercExchange, 547 U.S. 388 (2006), and this Circuit’s decision in Salinger v Colting,  607 F.3d  (2010).  Together, they put requests for preliminary and permanent injunctive relief in patent and copyright infringement actions on the same footing as requests for injunctive relief in all other actions.  In other words, they required patent and copyright plaintiffs to satisfy the same five criteria other plaintiffs have to satisfy in order to obtain an injunction:

  1.  that they are likely to prevail on the merits;
  2.  that they’ve suffered irreparable injury;
  3.  that they would not be adequately compensated by an award of damages;
  4.  that the balance of hardships tips decidedly in their favor;  and
  5.  that the public interest would not be disserved by the entry of an injunction.

 For the reasons that follow, it is unlikely, in my view, that plaintiff could have satisfied these requirements.

           The salient facts can be summarized as follows:

If the reports are to be believed, HarperCollins sent out at least a thousand pdfs of Sarah Palin’s new book, America by Heart, to prospective reviewers, bloggers, pundits and traditional media outlets between October 12 and November 17, 2010.  It did so, believing it had a “gentleman’s agreement” that no one would excerpt or review the book prior to its official “release” date, Tuesday, November 23, 2010.  (It had a formal “non-disclosure” agreement with some outlets under which they agreed to respect this “embargo.”) 

           Gawker was either sent or somehow obtained a pdf or digital photograph of the book, and ran with the story.  On November 17, 2010, it posted excerpts from the book – consisting of twenty-one pages – interspersed with a few “snarky” comments.  Sarah Palin shot back with a tweet:

The publishing world is LEAKING out-of-context excerpts of  my book w/out  my permission.  Isn’t that illegal?

HarperCollins then mobilized its legal forces.  On November 19th, they “pre-registered” a copyright claim with the United States Copyright Office and either that day or the next instituted suit.  Sarah Palin was not named as a plaintiff.

 Was HarperCollins’ “Right To Publish” Infringed?

           As it’s pre-registration filing makes clear, Sarah Palin is both the author of the book and “copyright claimant.”  HarperCollins sued as the transferee and owner of certain exclusive rights.  Specifically, it accused Gawker of infringing its rights “by publishing and distributing copies of the Book without permission and disseminating it publicly via the Internet.”  (Complaint at ¶ 22).   

          As copyright lawyers know – but the general public undoubtedly doesn’t – under United States law, a copyright consists of a bundle of six rights, each of which is almost infinitely divisible.  The three that are the most relevant for purposes of this discussion are:

  •    the exclusive right to “reproduce” a book in copies;
  •    the exclusive right to distribute it; and
  •    the exclusive right of public “display.”

 These rights originally belong to the author of a book – in this case, Sarah Palin.  She, in turn, transfers or conveys a subset of her rights to the Publisher.  Any exclusive rights (or portions of rights) she does not convey, she retains.  In my view, it is very likely an exclusive right she retained in this instance, rather than an exclusive right she transferred, that Gawker infringed when it broke the embargo. 

          As copyright lawyers also know – but, again, the public may not – the legal or beneficial owner of specific exclusive rights under a copyright has standing, “subject to the requirements of section 411 [17 USCS § 411] to institute an action for any infringement of that particular right committed while he or she is the owner of it.”  17 U.S.C. § 501(b)(emphasis added).

          It follows that had Sarah Palin herself brought suit or been joined in the action as a plaintiff, the case would have presented closer questions.  She may well have stated a valid infringement claim and been entitled to some relief.  As it is, however, the only one who sued was the Publisher and – as far as I can tell – it did not own the “public display” right.  It was that exclusive right, rather than the exclusive right “to publish” or “distribute” the Book that, in my opinion, Gawker infringed.   

          The two are not synonymous.  First of all, the Copyright Act defines “publication” as “the distribution of copies … of a work” and specifies that “copies” are “material objects … in which a work is fixed.”  17 U.S.C. § 101 (definition of “publication” and “copies”).  Second, it defines “publication” as the “distribution of copies . . . by sale or other transfer of ownership, or by rental, lease, or lending.”  Id.  Gawker did not engage in these activities.

           Equally significantly, the statute states unequivocally that the “public … display of a work does not of itself constitute publication.” 17 U.S.C. § 101 (definition of “publication”).

          So, the threshold legal question the Court should have considered in my view was the following:

By permitting end-users to view pages from the book, did Gawker infringe the  Publisher’s right to distribute the book, or only the exclusive right to “publicly display” it?

        As I understand the facts, Gawker only infringed the latter right and that right belonged to Palin, rather than her Publisher.  While Gawker may have disrupted the Publisher’s marketing plans and interfered with non-disclosure agreements, it did not infringe the Publisher’s right to distribute or publish the Book.

 The Court Found “Irreparable Injury,” When There Was Likely No Injury At All. 

          Copyright infringement is what lawyers call a “tort.”  The claim is only made out if one proves an injury.  Here, there is significant question as to whether the Publisher’s exclusive rights were injured as a result of Gawker’s actions.  Indeed, there is significant question whether it suffered any injury at all.  It is not unlikely that, instead of harming its interests, the sneak peeks and snarky comments increased rather than decreased interest and sales. 

          Without any demonstrable injury to the market for the book and to the Publisher’s excusive rights, a TRO should not have issued.  At a minimum, there should have been discovery on the question of whether the Publisher had suffered cognizable loss. 

Pre-Registration: Was It Proper, Timely and Effective?

           Pre-registration is a relatively new animal in copyright law.  It was introduced in about 2005.  Since then the Copyright Office has promulgated regulations, defining the circumstances under which pre-registration can be made.

          A couple of things are clear from the statute and regulations:  Pre-registration is intended

  •     to apply only to unpublished works
  •     to be effected while a work is still being prepared;
  •     to be made in anticipation of future infringements rather  than to punish those that have already commenced; and, finally,
  •      to be effected prior to the commencement of an                                                infringement that is made the subject of suit.

 None of those criteria appear to have been satisfied in this case.  The work may no longer have even qualified as an “unpublished work” when pre-registration was effected.  Pre-registration was only effected after the work was completed, not while it was still being prepared.  And, finally, by the time pre-registration was effected, the infringement had already commenced. Put another way, the infringement being targeted preceded pre-registration, rather than vice versa. 

          So, in addition to there being questions as to whether the Publisher’s rights of distribution and publication were infringed and whether it suffered any cognizable injury, there is also a substantial question as to whether the action was properly commenced. 

The Bottom Line:

          So, what’s the takeaway?  Well, it depends on whether you’re a lawyer, a business with an on-line presence or simply John or Jane Q Public, citizen-at-large.

          If you’re a lawyer, the takeaway may well be that Salinger v. Colting really hasn’t changed anything.   Injunctive relief will continue to be available on the same terms as it was previously.

          If you’re a business with an on-line presence, you should probably take away 2 lessons:  First, you can’t afford to be unrepresented.  You need a lawyer.  Copyright is a very technical Graphic_gawker_#3_area of the law.  Second, don’t immediately start mouthing off about “fair use.”  Your statement may be taken as an admission that you’ve infringed, when no admission is warranted.  (“Fair use” is what lawyers call an “affirmative defense.” It is only supposed to come into play if infringement has been established.)

          Finally, if you’re simply a member of the public, you might well conclude that both parties gamed the system.  Gawker had the excerpts up for as long as it needed to drive traffic to its site. (After that, it may not have cared whether they were taken down, so it didn’t vigorously defend against the lawsuit.)  By the same token, HarperCollins might be thought to have loved the controversy, its protestations notwithstanding.  So, rather than be concerned with whether it could actually “enjoin” anything, it may simply have brought the lawsuit in order to generate buzz and sales.  It was probably guaranteed that, after all, however the request for an injunction turned out.


[1]   The Judge who ruled in the case, Thomas P. Griesa, is a marvelous jurist who has issued many an important and exquisitely-reasoned opinion over the years. The fact that he got it wrong in this instance is only testament to the fact that even great judges are not infallible. 

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