• The Copyright Office released its latest group of exceptions to the Digital Millenium Copyright Act’s anti-circumvention provision. Wired and cnet news report on the exception for jailbreaking mobile phones.

• Also in DMCA news, Ars Technica discusses the Fifth Circuit decision that bypassing technological protections to access software for a fair use does not violate the DMCA anti-circumvention provision.

• The Supreme Court ruled on patentable subject matter in Bilski v. Kappos. Cnet, The MTTLR Blog, and IP Watchdog give their takes on the decision.

• Patent Docs reports on the memo issued by the USPTO to its examiners in the wake of Bilski. In a similar vein, Patently-O takes a look at the first post-Bilski test cases.

• The case between Joel Tenenbaum and the RIAA has taken another turn as U.S. District Judge Nancy Gertner slashed the jury verdict by 90%, calling it “unconstitutionally excessive.” See the coverage from Wired and Eric Goldman.

• Holman’s Biotech IP Blog looked at the recent limits that the EU Court of Justice has placed on patent protection for gene sequences.

• IP Watchdog has some thoughts on the early stages of a multi-billion dollar lawsuit filed against PayPal by XPRT Ventures, Inc.

Content Which Falls Under Fair Use Is Not Infringing

One of the elements that Lenz had to prove for her 512(f) claim was that Universal knowingly asked YouTube to take down a video that was not infringing. In its brief, Universal tries to claim that this can never happen when it argued that “because fair use is a defense to an otherwise infringing use, Universal could not – under any analysis – have made any misrepresentations (knowing or otherwise) when it notified YouTube that Plaintiff had incorporated “Let’s Go Crazy” into her video without authorization from the copyright owner.”

To understand this difference, it’s helpful to look at criminal law. Defenses to crimes tend to fall into two different categories: “I didn’t do it” or “I did it, but I had to.” One helpful analogy is to look at a self-defense argument in the case of murder. You are still admitting that you killed someone and that that is wrong, but you are also arguing that it should be excused for some other reason (generally that the person you killed was threatening you).

Similarly, Universal is arguing that each and every post that uses infringing content in any way, even those ways explicitly identified by the statute as fair uses, are infringements on copyright. They claim that fair use is an affirmative defense (the self-defense of copyright) which may excuse the infringement after the fact, but which does not change the legal status of the original use.

It is easy to see why Universal would seek such a ruling. If this were the case, Universal or any other copyright owner would not need to take any care when sending out takedown notices to ensure that the use was infringing. It could simply send out notices as it chooses and potentially rely even further upon automated processes to do so.

Fortunately, the judge pointed out, both in this decision and a prior one, that this seems to be clearly wrong. In the prior order, Judge Fogel states that “if copyright owners are immune from liability by virtue of ownership alone, then to a large extent Section 512(f) is superfluous.” This is clearly the correct decision. After all, fair use is even defined in the statute as non-infringing: “Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work…is not an infringement of copyright.”

No Requirement of Monetary Harm, But Must Prove Proximate Cause

This latest decision focused heavily on a discussion of what damages are available to a plaintiff in a case like this. Both parties put forward competing interpretations of the language of 512(f). The relevant language states that a party in violation of the section “shall be liable for any damages, including costs and attorneys’ fees, incurred by the alleged infringer, by any copyright owner or copyright owner’s authorized licensee, or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.”

Lenz argued that the phrase “any damages” should be interpreted to mean “any harm whatsoever” and points out that this language is broader than the “actual damages” language used in other areas of Title 17. Universal contested this reading, stating that the “actual damages” languages was meant as a contrast to statutory damages, not as a form of limitation.  Universal instead argued that, by analogy to common law fraudulent misrepresentation, damages should be limited to economic harm. It also further argued that the misrepresentation must be the proximate cause of the harm, due to the “as the result of” language in the passage above.

Judge Fogel’s decision ultimately draws from arguments put forward by both sides.  He agrees with Lenz on the issue of what damages may be considered, stating that “requiring a plaintiff…to demonstrate in addition not only that she suffered damages but also that those damages were economic and substantial would vitiate the deterrent effect of the statute.” The impact of this decision may be enormous. It’s likely that most plaintiffs who might suit under this section would be just like Stephanie Lenz: individuals whose personal videos were removed. There’s not likely to be economic harm suffered by such a plaintiff, and Fogel’s decision opens the way for such a plaintiff to sue and still recover for other harm, such as the harm to their First Amendment rights. As one of Lenz’s lawyers stated, “what’s important here is that someone who’s had their speech chilled can move forward and bring a lawsuit under 512(f).”

However, Fogel’s decision did place a significant burden upon such plaintiffs when he subsequently found that such damages “must be proximately caused by the misrepresentation of the copyright owner to the service provider and the service provider’s reliance on the misrepresentation.”  He pointed out that were this not the case, plaintiffs could show they have suffered harm merely by filing a suit and thereby incurring costs and fees.

The biggest constraint this puts on plaintiffs is that Judge Fogel interpreted this proximate cause requirement (combined with the fee shifting provisions already in place in 17 U.S.C. § 505) to mean that plaintiffs cannot recover attorney’s fees from after the litigation commences, since those fees are not proximately caused by the misrepresentation. This may end up taking the teeth away from 512(f), as most plaintiffs will not want to bear the brunt of their attorney’s fees when bringing such claims, especially since without monetary harm, their recovery is likely to be relatively low.

Now What?

While it’s unclear what larger impact this decision will have, it has already raised ordinary people’s awareness about the ways in which the provisions of the DMCA could impact their lives and demonstrated first hand what you can do if you experience a takedown. Statistics on YouTube currently indicate that the video has received over a million views and over a thousand comments, which demonstrates the degree to which people have been interested in this controversy. Stephanie Lenz herself seems to have become an activist in this area. Her personal blog indicates that this case has caused her to become interested and explore other topics affecting free speech and fair use. Though Stephanie Lenz may have suffered few monetary damages, it’s easy to see from her writings that she feels the harm to her speech rights very keenly.

• Out-Law reports on a US District Court for the Northern District of California case that clarifies how damages for groundless claims of copyright infringement should be determined.

• Apple is suing HTC over infringement of its user interface patents, but it’s really Google it’s after, says IP Watchdog.

• RealNetworks drops its appeal against a ruling declaring that its DVD-copying software violated the DMCA – Wired reports.

• Is it the car or the driver’s fault? Toyota recall casts doubts on driver’s conviction, says Autoblog.

• BusinessWeek reports that Google is pushing for the U.S. to take a WTO action against China over internet censorship (and see our recent post on the subject here).

• Are you liable if you forward a defamatory e-mail with introductory comments? Eric Goldman reports on a recent California appeals case.

• The E-Commerce Times wonders whether Microsoft is behind Google’s recent antitrust troubles.

• Netflix is being sued for its deal to delay the availability of Warner Brothers DVDs, reports the New York Daily News.

• Out-Law opines that the convictions of Google executives in Italy is not just about Italian law – the problem is with the EU directives Italy implements (see our post on the case here).

• Is that really Yao Ming’s Twitter page?  Twitter is testing out a new verified account feature for celebrities.  See our old post on Twitter-squatting here.

• Wired reports on Max Ray Vision’s thirteen-year sentence for hacking – the longest yet in U.S. legal history.

• The District Court for the Western District of Washington dismisses a lawsuit alleging that Microsoft misled its customers by representing anti-piracy code as a critical security update. ComputerWorld reports.

• The E-Commerce Times looks into codec licensing issues and what it means for the development of the next generation of HTML.

• The Register says Google’s recent take-down of six popular music blogs is further demonstration that the U.S. Digital Millennium Copyright Act is a “ridiculously blunt instrument.”

• Out-Law reports on a UK Court of Appeal ruling upholding two convictions for publishing racially inflammatory material, rejecting the defendants’ argument that English law should not apply because the content was hosted on servers located in the U.S.

• Patently-O examines the expanding jurisprudence of the Federal Circuit.

• The Wall Street Journal Law Blog asks if India is setting the bar too high for patent protection eligibility, especially for pharmaceuticals.

• Patent Docs writes a series of posts debating gene patenting.

• Law Technology News reviews recent case law for online defamation claims against anonymous defendants.

• The Electronic Frontier Foundation (which just turned 20 – happy birthday, EFF!) is fighting to suppress evidence gathered by law enforcement from a suspect’s iPhone without a warrant.

• The New York State Bar Association warns against the ethical pitfalls of social networking, reports Law Technology News.

• Dr. Dre is suing Death Row Records over unpaid royalties and sale of digital copies of “The Chronic” without the proper rights, says Billboard.

• The New York Times discusses the outrage over Google Buzz’s consequences for privacy.

• Can software licensing agreements prevent people from selling their copies of software? The Electronic Frontier Foundation, Public Knowledge, and other organizations have filed an amicus brief urging an answer of “no” to this question in a case before the Ninth Circuit.

The Exclusive Rights of the Artist

Copyright law in the United States is authorized by Article I, Section 8, Clause 8 of the United States Constitution and codified in Title 17 of the United States Code. Copyright applies to “original works of authorship fixed in any tangible medium of expression,” “musical works, including any accompanying words,” and “sound recordings,” among other things.³ The bifurcation of “musical works” and “sound recordings” can be confusing for copyright novices. For the purposes of copyright, composing music, i.e. coming up with a melody and accompanying lyrics and committing them to paper entitles one to a right in that composition. When the song is played and recorded, a separate copyright is created that applies to the recording itself, distinct from the underlying composition. The same person may have the copyright to the composition and the recording, or they could be held by a separate composer and performer.

These two copyrights bestow slightly different sets of rights on the holders. Composers of musical works have the right to a fee (set by statute) for every copy of a recording of their work produced⁴, and an exclusive right to public performance of their work, whether live or on a recording.⁵ Copyright holders for sound recordings have the exclusive right to control reproduction⁶ and distribution⁷ of their recording, but not over the public playing of the recording.⁸ There is an exception – if the public performance involved a digital audio transmission, then the performer needs to clear rights for the sound recording pursuant to 17 U.S.C. § 106(6).⁹

So how does all this apply to John McCain? Let’s start with the rallies. If we assume that McCain’s campaign legally obtained a copy of “Barracuda,” then no rights pertaining to the recording itself are infringed when it’s played at a rally. However, the campaign is on the hook for publicly performing the underlying musical composition: it is the Wilsons’ exclusive right to grant the campaign a license. Had McCain’s aides or a cover band performed the music live, he still would have needed to get the permission of the songwriters. This is the same right your high school chorus and college a capella groups had to (ostensibly) clear before adding a copyrighted song to their repertoires. Based on the artists’ after-the-fact reactions, it seems likely that had the McCain campaign approached each one of the aforementioned artists to seek a license to publicly perform their work, the answer would have been no. But the McCain campaign secured permission through another route: a license from ASCAP, as explained below.

In the case of television or web-hosted videos, the campaign would also have to clear sound recording rights (because the recording is being reproduced in their motion picture work), in addition to the public performance license they would have already secured from ASCAP.

ASCAP and Copyright Collectives

ASCAP (American Society of Composers, Authors and Publishers) and BMI (Broadcast Music Incorporated) are the largest copyright collectives in the United States. A copyright collective serves two primary functions: it assists the copyright holder in monitoring violations and enforcing their copyrights, and it assists an entity wishing to use copyrighted material in identifying copyright holders and negotiating licenses with them.¹⁰ Copyright holders give authority to the collective to licenses their works, enforce their copyrights, collect royalties, and redistribute those royalties to the copyright holders. One type of license, the kind that the McCain campaign presumably obtained from ASCAP, is a “blanket license”, which gives the licensee the right to perform any work from their entire catalog.¹¹

Assuming McCain’s campaign obtained the correct license for the venue, it has the right to play any song in ASCAP’s catalog. Generally, once a copyright holder signs with ASCAP, ASCAP must grant a license to whomever pays the appropriate fee, without regard to whether the copyright holder themselves would choose to grant a license to a potential licensee.¹²

This kind of licensing is not the same as playing a song under a claim of “fair use.” Under “fair use,” no license is sought.Instead, the user of the copyrighted work claims that he or she should not need to seek permission, based on a four-factor test in the Copyright Act.¹³ In contrast, the McCain campaign has purchased rights to the music it wishes to use—rights which the copyright holders, like the Foo Fighters, placed in the hands of ASCAP.

While the McCain campaign’s decision to obtain an ASCAP license has allowed them to keep playing “Barracuda” and “My Hero” over the objections of their composers, it exposes a deficiency in the law. The rationale behind ASCAP was to reduce transactional costs for broadcasters like radio stations who would otherwise have to obtain rights from every artist they played – a time consuming and expensive process. By paying ASCAP, the McCain campaign avoided negotiating with each artist whose work they wanted to use. Assuming the campaign plays enough music to justify paying for a license to ASCAP’s entire catalog, an additional benefit is that this gets around the fact that the artists themselves won’t give a license. This privileges deep-pocketed parties by creating a de facto compulsory license for licenses bought in bulk, while a party with limited resources has no recourse if rebuffed by the individual copyright holder. If the intended policy benefit of this system was to create public access to artists’ works, it does so only on a limited, expensive basis.

Back to the case at hand: if a court ruled that McCain had violated the copyright of the artists (let’s say one of the songs the campaign used wasn’t in the ASCAP catalog), what would he be liable for? Copyright holders can sue for damages, encompassing either the profits made through the infringement or (more relevant here) statutory damages.¹⁴ Statutory damages range between $750 and $30,000 per infringement, at a judges discretion, and can be raised to $150,000 if the infringement is “willful.”¹⁵ Costs and attorney’s fees can also be awarded to the successful filer of an infringement suit.¹⁶ Thus, if McCain did not hold a license to use the works in question, his campaign could be held liable for as little as $750, or as much as $150,000 for each work infringed.

YouTube and the DMCA

McCain’s woes with copyright law didn’t end with music. The campaign also picked a fight with Google over the removal of campaign videos and ads from YouTube. At issue are Google’s responsibilities and McCain’s rights under the Digital Millennium Copyright Act (DMCA). The DMCA, passed in 1998, amended Title 17 of the US Code. One of the most significant provisions of the act, and the one at issue here, was the creation of “safe harbors” from liability for Online Service Providers that hosted infringing materials so long as they abided by certain notification guidelines.¹⁷

The statute provides that a service like YouTube will be safe from liability for hosting infringing content if, upon receipt of a takedown notice, they remove the challenged material in a timely fashion. In order to protect uploaders from abusive takedown notices, the service provider can reinstate the challenged content after a waiting period of 10 business days after receiving a counter-notice from the content uploader if the uploader hasn’t been sued for infringement.¹⁸

The McCain campaign took exception to Google’s removal of campaign ads from YouTube, complaining that the notice-and-takedown regime that YouTube complied with stifled free speech. The campaign requested that YouTube carry out “a full legal review of all take-down notices on videos posted from accounts controlled by (at least) political candidates and campaigns,”¹⁹ including an analysis of whether the challenged material would be covered by a fair use limitation on copyright. McCain’s ads featured excerpts of televised debates and music that drew notices from rights holders, like Warner Music Group, which demanded that YouTube remove a popular McCain ad that featured Frankie Valli’s “Can’t Take My Eyes Off You.”²⁰ Warner is likely the owner of the specific sound recording used in the ad, and asserting its right over the reproduction of the recording made in the ad without its permission.

YouTube responded to the campaign by pointing out that while limiting legal reviews to only official campaign uploads would reduce the burden of reviewing all uploaded content, YouTube, as an intermediary content host, simply was not in a position to perform a substantive legal review of the claims in takedown notices. YouTube Chief Counsel Zahavah Levine noted that “[t]he claimant and the uploader, not YouTube, hold all the relevant information in this regard, including the actual source of any content used, the ownership rights to that content, and any licensing agreements in place between the parties.”²¹

As to assessing fair use, Levine emphasized the uncertainty produced by the complex fact-based balancing test that goes into making a fair use determination, stating that “[l]awyers and judges constantly disagree about what does and does not constitute fair use. No number of lawyers could possibly determine with a reasonable level of certainty whether … videos for which we receive disputed takedown notices qualify as fair use.”²² Levine’s unstated point is that YouTube’s lawyers are being paid to make sure YouTube avoids liability, not make speculative determinations on behalf of its users.

Finally, Levine referred to YouTube’s neutral policies, emphasizing that the company prefers not to favor any category of content or user over another, pointedly adding that “there is a lot of content on our global site that our users find to be equally important [to United States political campaigns], including… political campaigns from around the globe at all levels of government, human rights movements, and other important voices.”²³

A Constant Tension

The McCain campaign’s complaint to Google highlighted one of the central underlying conflicts of copyright: the tension between the exclusive rights of copyright holders and the first amendment’s guarantee of free speech. To the McCain’s campaign, the curtailment of its political speech—one of the most protected and revered categories of speech—was a violation of a fundamental right. University of Virginia Professors Christopher Sprigman and Siva Vaidhyanathan succinctly expressed the sentiment in a Washington Post column: “[u]sing a song to communicate a political message is just the kind of speech the First Amendment was designed to protect.”²⁴ Yet however controversial the results—artists’ songs being used by the candidates they oppose, access to a presidential candidate’s message blocked by a studio that owns the ad’s background music, and the provider of an increasingly important medium for political discourse erring on the side of caution (and maybe censorship) to avoid liability—what we really saw was the current state of the law. Though as Zahavah Levine suggests, perhaps that might change now that a US Senator has felt the practical results of his handiwork, and hasn’t been too pleased.

By Hamilton Falk, Raza Panjwani, TJ Wilkinson and Rajiv Batra

1. One of the authors of this post, being a history major with an affinity for Americana would like to note that presidential campaign songs have a storied history. If you’re capable of recalling your high school American history classes, you may remember that William Henry Harrison’s 1840 presidential campaign got a special mention in your textbook for his campaign jingle, “Tippecanoe and Tyler too.” At some point candidates decided that self-referencing jingles just weren’t doing the trick and turned to popular music. In recent memory, Bill Clinton punctuated the final line of his 1992 convention speech (“and don’t stop thinking about tomorrow!”) by segueing to Fleetwood Mac’s “Don’t Stop.” Bob Dole, on the other hand, got into trouble for riffing on the 60s Motown hit “Soul Man,” using the reprise “I’m a Dole Man” for his 1996 presidential campaign.That earned him a reprimand from the song’s writer, Isaac Hayes.
2. Christopher Sprigman & Siva Vaidhyanathan, Cue ‘Barracuda’, Wash. Post, Oct. 13, 2008, at A21, available athttp://www.washingtonpost.com/wp-dyn/content/article/2008/10/12/AR2008101201630.html.
3. Copyright Act of 1976, 17 U.S.C. § 102(a) (2005).
4. 17 U.S.C. § 115.
5. 17 U.S.C. § 106(4).
6. 17 U.S.C. § 106(1).
7. 17 U.S.C. § 106(3).
8. 17 U.S.C. § 114(a).
9. You can thank the radio station lobby for that exception, since they wanted to only pay once when they played a recording over the air, but didn’t want competition from internet radio stations.
10. Bruce P. Keller & Michael P. Cunard, Copyright Law: A Practitioner’s Guide §4:1:4:C (Incorporating Release No. 9 2007).
11. Id.
12. Harvey Reid, ASCAP & BMI – Protectors of Artists or Shadowy Thieves? (2005), http://www.woodpecker.com/writing/essays/royalty-politics.html.
13. 17 U.S.C. §107.
14. 17 U.S.C. § 504.
15. 17 U.S.C. § 504(c).
16. 17 U.S.C. § 505.
17. 17 U.S.C. § 512(c).
18. 17 U.S.C. § 512(g).
19. Sarah Lai Stirland, Stifled by Copyright, McCain Asks YouTube to Consider Fair Use (2008), http://blog.wired.com/27bstroke6/2008/10/stifled-by-copy.html
20. Id.
21. Letter from Zahavah Levine, Chief Counsel, YouTube, to Trevor Potter, Gen. Counsel, McCain-Palin 2008 (Oct. 14, 2008) (available from Sarah Lai Stirland, YouTube to McCain: You Made Your DMCA Bed, Lie in It (2008) http://blog.wired.com/27bstroke6/2008/10/youtube-to-mcca.html
22. Id.
23. Id.
24. Christopher Sprigman & Siva Vaidhyanathan, Cue ‘Barracuda’, Wash. Post, Oct. 13, 2008, at A21, available at http://www.washingtonpost.com/wp-dyn/content/article/2008/10/12/AR2008101201630.html