When Worlds Collide: The Intellectual Property Basis of a Labor Dispute and Why It Matters to the Future of Hollywood
Filed Under General | Posted on February 10, 2008
By: Kellie Kroyer
On November 5, 2007, over 12,000 television and film writers went on strike, crippling productions and, as of the date of this writing, costing the industry upwards of $1 billion. The strike was the result of three key points of contention which arose during contract negotiations between the Writers Guild of America (“WGA”) and the Alliance of Motion Picture and Television Producers (“AMPTP”).i The first issue involved the WGA’s desire to negotiate a better deal for its writers than the 0.3% residual payments for home video (at the time VHS and Beta, now DVD) sales they agreed to in 1988. The second issue centered around the WGA’s demand for a similar structure to pay writers residuals on “new media”, a medium for which writers currently receive no extra compensation. In the final issue, the WGA sought jurisdiction over writers working on reality shows and animated works.
Of the three issues, the debate over new media is perhaps the most contentious. It is certainly the issue most watched by the other entertainment industry unions, including the Screen Actors Guild (“SAG”), whose own contract with the AMPTP expires on June 30, 2008. New media specifically refers to such recent phenomena as Internet downloads from sites such as iTunes, streaming video that allows users to watch television shows in real time on their computers, straight-to-Internet content like webisodes, and other video on-demand distribution methods such as HBO On Demand. The AMPTP argues that it isn’t clear yet how much money such new media will actually produce, and therefore that the WGA should table their residual demands until at least the 2010 contract talks, when revenue may be more predictable. The WGA feels, however, that they were duped in 1988 into accepting a home video residual percentage that ended up being too low. As the AMPTP now seems unwilling to remedy that discrepancy, the WGA argues that accepting little or no residuals for new media now will leave the union in the same position in future negotiations about that issue. Though each side may have a valid point, it does seem that the policy reasoning behind commonly accepted intellectual property protections justify the WGA demands.
Though it should be noted that there is some debate over the real purpose of residual payments, many do agree that they are paid to writers as compensation for the intellectual property rights they give up when they sell a work to, or write a work for, a film or television studio.ii In the United States, copyright protections vest in the author of a work, the person who conceives of the copyrightable expression, when that person fixes the expression in tangible form. Copyright is very powerful in that it gives the owner the exclusive right to reproduce the work, to prepare derivative works based on the original, to distribute copies of the work, to publically perform the work, and to publically display the work. The main policy justification for giving the author of a work such broad rights is that doing so promotes creativity to the benefit of the public as a whole. In other words, an author’s industriousness is rewarded by allowing that author ample opportunity to profit from his or her work, while the public is rewarded with a better cultural landscape.
However, an exception to the copyright rule occurs with “works made for hire,” – works that are prepared by an employee within the scope of his employment and/or works that a commissioning party pays for the creation of. In such cases, the entity paying for the work, rather than the writer, is deemed the “author”, and receives the copyright protections. It is then arguable that the residual payments a writer receives for subsequent uses of the work are a form of compensation for the copyright protections the writer gave up to the studio. The real world result of residual payments is that they also serve to further the policy goals of intellectual property rights as a whole, by allowing writers to make a living in their chosen craft, even when that work is not necessarily stable or steady by nature. If writers are not given these residual payments, it is foreseeable that less people will be able to make writing a career, and that those who write will only be those that can afford to—in essence leaving the field as something open only those who are wealthy or those who have some reliable, independent source of income. This could affect the quality of television and movies as a whole, by reducing the size of the talent pool, and thus competition within the industry.
It is important to realize that while many may accept arguments as to why the policy behind intellectual property rights supports residuals for writers, it may be harder to convince people that actors deserve to earn residuals as well. This issue will be of particular importance in the coming months as SAG begins its own contract negotiations and will likely seek the same structure of residual payments for new media that the WGA has been lobbying for. Once again, however, the intellectual property rights that actors have may explain why their work is worthy of residual payments as well. Namely, there is a lesser known branch of intellectual property protection known as the right of publicity. Though generally thought of as a right that protects individuals from the unauthorized commercial use of their names, images, likeness, etc., it has been argued that when an actor’s appearance on television or in film amounts to giving up a certain portion of that right which should be compensated.iii After all, when an actor is contracted to do a film, she almost always signs some form of contract giving up her right to control the further copying, distribution, etc. of her image. In addition, just as with writers, residuals provide a means for ensuring that talented actors are able to make a living in their chosen field, rather than leaving the profession open only to those with a wealthy benefactor.
If the intellectual property policy argument is to be believed, then the writers and actors are clearly entitled to residuals for the work that they do. The question of whether or not the percentages proposed by the AMPTP are fair should be weighed in light of the rights these people are giving up. And, quite frankly, if one takes that view, it does seem that 0 – 0.3% of anything is a fairly paltry amount. It might behoove the AMPTP, as they sit down at the bargaining table, to keep in mind the policy goals of intellectual property protections, and to do what needs to be done to protect the quality of the product that they are spending so much time and money to produce.
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i Normally in collective bargaining when two sides reach an impasse, as was the case here, the law provides that the employer may institute their final offer. However the AMPTP is not an employer, but rather an alliance between the major television and film producers.
ii Many consider residuals to be analogous to royalty payments.
iii Looking at actor residuals as compensation for their release of intellectual property rights helps to answer the question of why actors and writers are paid residuals for a given work, but others, such as stagehands, are not. Clearly everyone working on a production is putting in an immense amount of effort, but residuals are not meant to reward labor, specifically. Instead, residuals exist for the same reason that royalties do—as a payment in recognition of the vested intellectual property rights that one has given up by selling their work or image.
The Design Piracy Prohibition Act- Friend or Foe to the Fashion Industry?
Filed Under General | Posted on January 29, 2008
By: Lauren Ciancia
Until recent months, the fashion industry was unique from its artistic counterparts in that intellectual property protection was afforded only to counterfeit goods, namely “any [good] that infringe[s] on a registered trademark or falsely purport[s] to be authentic.”i This may bring to mind the image of a street stand table strewn with imposter Louis Vuitton and Chanel bags offered at a dramatically reduced price from the authentic originals. These narrowly construed protections may be expanding, however, with the introduction of the Design Piracy Prohibition Act (hereinafter “DPPA”) to the Senate on August 2, 2007. The bill was presented by Senator Charles Schumer and its ultimate purpose is to “protect original fashion designs for a period of three years from their registration with the U.S. Copyright Office.”ii While the bill is still pending before the Senate, if it is favorably received, this could result in significant changes in the American fashion industry. As a result, there is a sharp divide among legal scholars and representative members of the fashion community as to the potential benefits of the DPPA. Its proponents include New York’s Council of Fashion Designers of America and well-regarded legal scholars, like Professor Susan Scafidi of Fordham Law. Conversely, its critics include the Los Angeles-based California Fashion Association and Professors Kal Raustiala of UCLA Law and Christopher Sprigman of UVA Law. While there are certainly merits in both positions, I think the DPPA’s proposal in its current form will ultimately infringe upon a designer’s inherent right to freedom of expression under the First Amendment of the United States Constitution.
Proponents of the DPPA point to a number of significant factors to indicate its strengths. As Professor Scafidi indicates in her discussion of the fashion-forward New York-based Ananas handbag line, the DPPA commendably affords IP protection to young up-and-coming designers who are not as well-established as fashion icons like Chanel or Tod’s (to whom copyright protection is afforded in the context of counterfeits).iii Without the DPPA, equally talented but less established designers like Ananas, remain vulnerable to copies not of their label, but of their design. This may manifest itself in a number of ways- for a handbag designer it may be the use of vibrant and unexpected jewel tone colors or the richness of a lambskin exterior. For a clothing designer, the unique design ideas are countless- the billowing kimono sleeve on a blouse, the taffeta empire waist on a cocktail dress, the rich cashmere-alpaca blend in a boyfriend sweater to name a few. Without passage of the DPPA, young designers are potentially threatened by knockoff designers who can turn out desirable imitations of reduced quality at a reduced price. As a result, the mass market may be drawn to these inexpensive alternatives, the product of those who have reaped but have not sown.
Alternatively, critics of the DPPA dwell not on the vulnerabilities of young designers but look more broadly to the vulnerabilities of the fashion industry as a whole if a bill such as the DPPA is enacted. Professors Raustiala and Sprigman make several compelling arguments against the DPPA’s ultimate passage. For one, they point out that fashion is driven from styles and looks of the past thus it would be counterproductive to limit these forms of “copying.”iv For instance, take the “little black dress” envisioned by Coco Chanel in 1926 and imitated by thousands of designers after its grand debut on Audrey Hepburn in Breakfast at Tiffany’s. If the DPPA was enacted at this time, knockoff designers of the Chanel original may have experienced great difficulty producing their own versions of the little black dress, ultimately preventing the mass markets from experiencing a taste of sophistication like Ms. Hepburn. Additionally, if the DPPA was enacted, the fashion industry may have endured serious financial losses considering the tremendous source of revenue in the little black dress by designers across the world.
Proponents of the DPPA, like Professor Scafidi, argue that the mass market is not prevented from participating in new trends as a number of top-flight designers like Isaac Mizrahi, Proenza Schouler, Vera Wang, and Roberto Cavalli team up with the likes of Target, Kohl’s, and H&M to offer affordable lines that resemble their high-end collections.v Although this trend appears poised for continued expansion, I do not think it provides a strong basis for the implementation of the DPPA considering the potential exclusion of what may be deemed unique forms of creative expression. Further, if the DPPA was enacted in conformity with the recent development of high-end designers offering inexpensive clothing lines, it appears as though these highly successful designers would obtain a monopolistic position, cornering both the couture and mass marketed segments of the fashion industry.
Conversely, Professors Raustiala and Sprigman offer an interesting discussion of the legal basis for copyright law. They articulate,
copyright law makes unlawful any use of a copyrighted work that results in a new work that is ‘substantially similar’ to the old. And the standard for substantial similarity is quite low- over many years, in a large number of cases, federal courts have found copyright infringement…where no one would mistake the second work for the first.vi
As a result, if copyright protection was afforded to fashion designs, the DPPA would ultimately impede creative expression and prevent the promulgation of designs that are not only copies of earlier fashions, but further, may prevent the dissemination of design ideas that are completely original but merely resemble or were influenced by prior ideas. Further, the fashion industry is a $350 billion dollar business that although certainly demonstrating its weaknesses, namely in the context of what may be conceived as the exploitation of young designers, has proved wildly successful both in its utilitarian and artistic capacities.vii So, why fix what’s not broken?
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i Council of Fashion Designers of America, CFDA Applauds Introduction of Design Piracy Prohibition Act to U.S. Senate, Aug. 8, 2007, www.cfda.com/index.php?option=com_cfda_content&task=news_display_all.
ii Id.
iii Susan Scafidi, Written Statement on H.R. 5055, “The Design Piracy Prohibition Act” presented to the Subcommittee on Courts, the Internet, and Intellectual Property, U.S. House of Representatives (July 27, 2006).
iv Kal Raustiala and Christopher Sprigman, How Copyright Law Could Kill the Fashion Industry, THE NEW REPUBLIC, Aug. 14, 2007, www.law.ucla.edu/home/News/Detail.aspx?recordid=1188.
v Susan Scafidi, Written Statement on H.R. 5055, “The Design Piracy Prohibition Act” presented to the Subcommittee on Courts, the Internet, and Intellectual Property, U.S. House of Representatives (July 27, 2006).
vi Kal Raustiala and Christopher Sprigman, How Copyright Law Could Kill the Fashion Industry, THE NEW REPUBLIC, Aug. 14, 2007, www.law.ucla.edu/home/News/Detail.aspx?recordid=1188.
vii Id.
Too Many Lawyers in the Kitchen?
Filed Under General | Posted on January 24, 2008
By: L.S.
On June 26, 2007, Rebecca Charles, owner of Pearl Oyster Bar in the West Village, filed suit in the Federal District Court in Manhattan against her former employee, Ed McFarland, chef and co-owner of Ed’s Lobster Bar in SoHo. She alleged trade dress and trade secret infringement. The next day, the New York Times ran an article about the dispute, “Chef Sues Over Intellectual Property (the Menu).” Since then, foodies and lawyers alike have been debating the merits of Charles’ intellectual property claims.
Charles alleged that McFarland’s New England-style seafood restaurant copied “‘each and every element’ of Pearl Oyster Bar”— from the look and feel of the physical restaurant, a potential trade dress infringement, to the Caesar salad dressing recipe, a potential trade secret infringement. Pete Wells, Chef Sues Over Intellectual Property (the Menu), N.Y. TIMES, June 27, 2007. McFarland countered, “I would say it’s a similar restaurant. I would not say it’s a copy.” Id. Focusing on the trade dress claim– should the law permit two “similar” or exceedingly similar New England-style seafood bars in Manhattan? Does Charles have a legitimate trade dress claim or are there just too many lawyers in the kitchen?
On Chow.com, Techdirt.com, and Eater.com, bloggers and blog commentators engage in heated rhetoric to impart their differing opinions on the matter. Some argue that Charles “hardly invented these concepts [white marble bar, grey painted wainscoting, bar stools with wheat straw backs, oyster crackers at each table setting, etc.] ten years ago” and has no right to claim them now as her own. Eater.com, Pearl Oyster Bar v. Ed’s Lobster Bar: Day 2, www.eater.com/archives/2007/06 (last visited January 20, 2008). They claim that McFarland could not open an authentic-seeming lobster bar without including some of these iconic “Maine seafood restaurant” details. Id.
Others defend McFarland by pointing out that people rarely have completely novel ideas about food and restaurants. Chow.com, When Can Chefs Sue Other Chefs?, www.chow.com/stories/10708 (last visited January 20, 2008). Erik Sherman of Eater.com stated, “you need to know when you’ve really done something different and when you owe too much to everyone who has gone before.” Eater.com, Pearl Oyster Bar v. Ed’s Lobster Bar: Day 2, www.eater.com/archives/2007/06 (last visited January 20, 2008). In fact, Ms. Charles herself acknowledged that Pearl Oyster Bar was inspired by a San Francisco restaurant, Swan Oyster Depot. Pete Wells, Chef Sues Over Intellectual Property (the Menu), N.Y. TIMES, June 27, 2007. She further revealed that she learned the Caesar salad recipe, “a signature at Pearl,” from her mother who learned it years earlier from a chef at a Los Angeles Restaurant. Id.
On the other hand, many support Charles’ decision to bring suit and maintain that she “has a right to feel betrayed.” Eater.com, Pearl Oyster Bar v. Ed’s Lobster Bar: Day 2, www.eater.com/archives/2007/06 (last visited January 20, 2008). While the look and feel of Charles’ restaurant exists everywhere in New England, Charles is the one who brought this innovative concept to New York City and turned it into an upscale restaurant. Supporters feel this merits intellectual property protection. Id.
All of these arguments aside, though, Charles’ case will ultimately turn on whether or not Pearl Oyster Bar’s trade dress qualifies as “inherently distinctive.” In the pivotal trade dress case, Two Pesos, Inc. v. Taco Cabana, Inc., the Supreme Court of the United States held that inherently distinctive trade dress is protectable under Section 43a of the Lanham Act without a showing that such trade dress had acquired secondary meaning. Two Pesos v. Taco Cabana, 505 U.S. 763 (1992). Inherently distinctive trade dress exists when a trademark’s nonfunctional “look and feel” is immediately capable of identifying a unique product source. Protection of trade dress serves to “secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers.” Id. at 763.
In Two Pesos v. Taco Cabana, plaintiff Taco Cabana, a Mexican fast food chain in Texas, sued Two Pesos, another Texas Mexican fast food chain. Two Pesos opened years after Taco Cabana with a similar motif—a “festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals.” Id. at 765. Because the court found Taco Cabana’s trade dress inherently distinctive, it prevailed in its suit. While I have frequented neither Pearl’s Oyster Bar nor Ed’s Lobster Bar, it seems as though Charles’ case is analogous to Taco Cabana’s and is certainly capable of achieving the same, victorious result. Her restaurant has a distinctive look with identifiable, “theme” elements. The lawyers, for now, may have found their place in the kitchen.
Making Available
Filed Under General | Posted on January 23, 2008
By: Jason Lunardi
Will an emerging “making available” right enable copyright owners to defeat piracy or will it spell the end of privacy for P2P users?
The Copyright Act of 1976 explicitly grants exclusive rights to authors of copyrighted works. 17 U.S.C. § 106. This bundle of rights includes the exclusive right to: 1) reproduce the work; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies of the work; (4) to perform the work publicly; (5) to display the work publicly; and (6) to perform a sound recording publicly by means of a digital audio transmission.
The Act, however, does not define the word “distribution,” which has created some confusion. This is becoming especially important to clarify the term because it could affect the Recording Industry’s campaign to sue individual peer-to-peer software users for copyright infringement. The record labels would like if the definition were broad enough to allow them to prevail on a suit by merely showing that copyrighted songs were available for download in a shared folder on the defendant’s computer. This would remove the need to show any of the files were in fact actually downloaded. This may also mean that the law could be getting closer to creating a cause of action for “attempted distribution” for having files in a shared folder, regardless if they are actually copied or distributed.
Recently, the Recording Industry has won its first lawsuit to go to trial against an individual infringer, in the case of Capitol v. Thomas. In this case, Thomas was found to have willfully infringed on the record label’s copyrights through the use of the peer-to-peer network, Kazaa. The jury awarded the RIAA statutory damages of $9,250 per song, for a total of $222,000. The interesting part, however, were the jury instructions: “The act of making copyrighted sound recordings available for electronic distribution on a peer-to-peer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown.” This will be a point of appeal that could overturn the case in the future.
The concept of “making available” liability is not new. In the international sphere, the 1996 WIPO Internet treaties provide authors with “the exclusive right of authorizing any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.” Similarly, Article 3(1) of the 2001 E.U. Directive, for example, obligates E.U. member states to provide a “making-available” right.
In the United States, in a criminal context, the government has been successful in prosecuting software piracy (”warez”), even those who merely make available files on a server. Also, as part of the Family Entertainment and Copyright Act, Congress enacted the “Artists’ Rights and Theft Prevention Act of 2005″ or the “ART Act,” which criminalized the willful distribution of pre-release software, movies and music by making it available on a computer network accessible to the public. (see here). In the civil context, there have been a few cases that may shed light on whether “making available” digital files on a network constitutes distribution under the Copyright Act. In Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 (4th Cir. 1997), the court held that even though there was no evidence of an infringing act, when the public library “added a work to its collection, and made the work available to the public, it had completed all the steps necessary for distribution to the public.” Most judges have taken the record labels’ view that making a file available on a peer-to-peer network is the same as infringement. For example, in Interscope v. Duty, the court noted “the mere presence of copyrighted sound recordings in Duty’s share file may constitute copyright infringement.” There are some cases that have ruled in the opposite including UMG v. Lindor, (holding that plaintiffs would need to prove “that defendant actually shared sound files belonging to plaintiffs.”). In Perfect 10, Inc. v. Amazon.com, Inc., 2007 U.S. App. LEXIS 27843 (9th Cir. 2007), the court held that the plaintiff incorrectly relied on Hotaling, and that merely making images “available” is not an infringement.
Having a new exclusive right of “making available” may make sense from the point of a copyright holder, and would bring the United States in line with Europe on the scope of copyright protection. However, an issue that arises is the possibility of a further reduction of computer-users’ privacy. We could expect an increase in the monitoring and tracking activities that have already been employed to attempt to capture peer-to-peer users “actually distributing” files. For some time now the record labels have hired independent companies such as MediaSentry and MedaDefender to patrol the networks for infringing activity. These companies use copyright enforcement tactics including monitoring forums for copyright infringement, and the distribution of decoy files. The also log IP addresses of computers who are monitored during the transmissions of copyrighted or files. On MediaSentry’s website they say that the data they collect is copied and stored in a searchable database. Recently, The University of Oregon refused a request from MediaSentry to provide personal information about suspected file-sharing students that it had been tracking. Last year, MediaDefender was exposed for having set up a decoy file-sharing website, MiiVii, which attempted to lure users into uploading copyrighted content while tracking their activity. If record labels were able to win a copyright infringement action solely by showing that the copyrighted files were available on a shared network, it may only encourage these aggressive tactics by the private enforcement companies. In addition, many users may not even realize that they have shared folders on their computers when they use peer-to-peer networks, and they may not know how to disable the sharing capability.
Whether or not these intrusive methods of monitoring are actually warranted, the issue of “making available” is up for debate again in Atlantic v. Howell, now being heard in Arizona.
Machinima: A New Art Form Faces Legal Uncertainty
Filed Under General | Posted on January 23, 2008
By: Chris Reid
Much digital ink has been spilled over the legal fog surrounding today’s online video games and the rights (or lack thereof) of their players. The confluence of copyright law and videogames may once have seemed to many as best left to academics or bored teenagers. However, one need only look up the sales figures for the 2007 release of Microsoft’s Halo 3 (which shattered US entertainment sales records, grossing $170 Million in its first 24 hours on sale) or the number of people playing Blizzard Software’s “World of Warcraft” (9.3 Million players, as of mid November 2007) to see that the amounts of money at state rival those in Hollywood (and in some cases surpass them).
With financial interests of this size at stake, it is a wonder we have not yet seen any cases involving the growing field of expression known as “Machinima” (pronounced “mah-shin-i-mah”). Machinima is best understood as shooting virtual film: the studio is the world of the video game, the actors are characters in the game, and the camera can range from the screen of another player, to recording features built directly into the game. The result is a low cost, time efficient method for amateur would-be animators to create videos without access to expensive 3d rendering software. Voiceovers in addition to other standard video editing techniques are often employed to enhance the final product. Initially, most machinima projects were humorous in nature, often spoofing on the games used to create them. However, as videogames have sported more and more sophisticated graphical engines, and as online communities dedicated to the art form have grown up (see www.machinima.com for instance, which offers hosting of videos, discussion forums, tutorials, peer feedback, networking and other information for interested machinimsts), there are an increasing number of different applications of the technique, ranging from music videos, to talk shows, to documentaries about the recent riots in the suburbs of Paris. Machinima gained widespread exposure when South Park aired the episode “Make Love, Not Warcraft,” about half of which featured footage “shot” inside the game World of Warcraft.
To date there have not been any cases dealing directly with machinima, but potential legal hurdles abound and are exacerbated by the lack of clear caselaw dealing with videogames. Are machinima videos derivative works? If so, do they constitute fair use? Does it make a difference if the machinimists replace all of the original game characters and environments with custom made content (often called “modding” or “skinning”). What if the video makes use of trademarks?
The End User License Agreement (EULA) which many computer programs (including games) force users to “click through” before installing or using the software often purport to answer some of these questions ex ante. Tellingly, both Microsoft and Blizzard Software (the publishers of the Halo series and World of Warcraft, respectively) recently clarified their stance on machinma (official documents for Halo and World of Warcraft) made using their popular games. World of Warcraft includes a mandatory click-through EULA which initially which strips users of all rights to use the game for anything but its intended purpose, but to which Bizzard’s recent modifications added a new “machinima license” effectively re-granting certain use rights related to machinima. Halo does not require a EULA, so Microsoft’s statement simply attempts to clarify the company’s stance regarding players’ use of its game for machinima purposes. Among other things, the Microsoft statement forbids (1) use of the game to create anything “pornographic or obscene … or otherwise objectionable” (which is somewhat vague), (2) the use of sounds or music from the original game (a reasonable precaution since Microsoft does not own the copyright to all of these assets), (3) extension of the Halo story or “universe” (an inoculation against future suits based on unsolicited “fan fiction”, as happened famously with Rocky IV), and (4) the “sale” of any Microsoft IP (although paid ads on sites hosting Halo-based machinima are allowed).
The vagueness of (1) raises potential first amendment flags, although we might well expect them to come head to head with trademark tarnishment claims (the “actors” of Halo machinima most often use the game’s main character Master Chief who’s green, armored, and helmeted image is ubiquitous in advertisements and marketing materials for the game). When you consider the legal and legislative uproar surrounding a hidden, sexually themed minigame (made accessible only by unauthorized software patches released on the internet) in Rockstar Games’ popular “Grand Theft Auto” title, it is easy to see how companies might become sensitive to the use of their games. Furthermore, adaptations of copyrighted characters into works deemed lewd have not traditionally fared well in courts (see Walt Disney Productions v. Air Pirates , 581 F.2d 751 (9th Cir. 1978)).
In the copyright area, any analysis would involve two steps: first, a determination of whether the machinima video is a derivative work, and second, if so, whether permission from the copyright holder is exempted under fair use. Dealing with the first step requires that we determine which copyrighted work is actually being adapted into the alleged derivative work. In the case of video games this can become tricky, because a game could comprise many overlapping copyrightable elements, all of which combine to form a seamless experience for the user. The characters, the story, the music, the graphical representation of the characters, and the underlying computer code might all be the subject of different copyrights. Furthermore, it has been argued recently, that what few tangentially on-point cases exist all make use of an overly technical analysis when dealing with videogames, one which is ambivalent as to whether it is the code or the user’s end experience that is the subject of the copyright. See Mod as Heck, 8 Minn. J.L. Sci. & Tech. 681). Surely each individual play-through of a videogame does not create a new derivative work, authored by the player, and yet, if this is so, on what grounds is a video capture of a given player’s game experience (which, minus additional user-contributed content such as voiceovers and editing, is essentially what machinima is) classified as derivative?
Finally, even assuming most machinima counts as a derivative work, does the highly transformative, and non-competing nature of many of the videos render them fair use? Halo 3’s sales numbers certainly seem to suggest that, if anything, Halo-based machinima, like the popular Red vs. Blue series have helped build the popularity of the franchise (but see Red vs. Blue’s creators’ sale of their show on DVD, which might weigh against them on the commercial nature factor of fair use analysis).
The above-mentioned issues are only a first pass at the complexities inherent in this new art form. Ultimately, some of them will be resolved outside of court, perhaps with EULAs or some other licensing scheme. Other issues will likely end up in court, giving the judiciary a chance to adapt the law to a new context. And while this may be wishful thinking, we may even see legislation which begins to treat videogames and their offshoots as the distinct legal and artistic issue they truly are. Until then, machinimists and game publishers alike will have to guess.
The Trade Secret Dilemma of Electronic Voting
Filed Under General | Posted on January 9, 2008
By: Joe Quintero
Trade secrets are meant to protect a firm’s intellectual property, but what happens when that protection actually hurts the public at large. This is the very situation that is going on right now in the world of electronic voting machines where there is an ongoing conflict between manufacturer’s and regulators.
After the 2000 presidential election and the voting fiasco that ensued in Florida, there was a big push to move from voting via older “punch card” and “lever” machines to newer, supposedly more accurate, electronic voting machines. As a result in 2002 Congress passed the Help America Vote Act (“HAVA”) with the broad goal of “replac[ing] punch card voting systems . . . and establish[ing] minimum election administration standards for States and units of local governments. . . .” In pursuit of its goals HAVA provides funds for states to update their local election equipment, and many have used these funds to upgrade their systems with computerized electronic voting machines. However, as states have moved to update their voting machines, questions and worry of fraud have arisen.
In a world where computer error and security is a real problem, voters have become worried that their votes can be compromised through poor programming or through breach of election systems by hackers. To combat these threats some states have taken measures to inspect machines, including requiring manufacturers to divulge their election software source codes. However, while problems have been found with some electronic voting machines in recent years, manufacturers have been resistant in turning over their software source codes as they consider them to be trade secrets.
A trade secret, generally, is a something that derives economic value from not being known to or attainable by others who would gain economically from its knowledge; and a firm only enjoys the benefits of a secret if they take reasonable steps to protect it. With this in mind, the voting machine manufacturers are right to be protective of their source codes, after all if they were to become readily available, there would be nothing to stop competitors from exploiting them. So the question becomes, if manufacturers divulge their source codes, do they lose their trade secret protection?
It seems that if manufacturers divulge their secret proprietary information to government approved inspectors, it would undoubtedly be with the agreement, either implied or express, that the secrets not be divulged by inspectors. Any breach of that agreement would undoubtedly be considered a misappropriation on the part of the inspectors, and appropriate legal remedies would be available to the manufacturers. So why, then, are manufacturers still reluctant to hand over their source codes?
It is likely that manufacturers remain reluctant because in many states that require inspections, the codes are inspected by private third parties, not government agencies. Manufacturers may fear leaking, or use of their proprietary information by these parties in their own commercial ventures; and while there are legal remedies if this scenario occurred, the best scenario for a manufacturer would be to keep the information out of the hands of third parties in the first place.
Still, it is in the best interest of the voting public to be sure their voting machines are accurate and secure, therefore a solution to manufacturers’ fears may lie with the approach Nevada uses to inspect its slot machines. The Nevada Gaming Control Board takes it upon itself to inspect the slot machines used in that state’s casinos, and so the Board requires access to all the slot machines and gaming software used in the state. The Board also conducts extensive testing of the software and machines, using very rigorous standards, in its very own secure laboratories, not in those of a third party inspector. It’s possible that by taking this kind of approach to electronic voting machines states could not only increase machine reliability, but alleviate some of the fears manufacturers may have in giving away their source codes.
Still, given that each state is fairly autonomous in handling elections, there are differing standards for voting machines throughout the country. These differing standards have led some manufacturers to cease doing business with states whose inspection standards are more stringent than others. In fact following an unfavorable court ruling in 2005, Diebold, one of the nation’s largest voting machine manufacturers, opted to stop selling its machines to North Carolina.
To curtail the practice of selective selling and to ensure a consistent standard for electronic voting machines throughout the country, the federal government, not state governments should take the role of inspecting voting machines. One way to accomplish this would be to amend HAVA to permit the federal government to certify electronic voting machines sold in the United States and then to tie money received by states under HAVA to their acceptance of federally approved machines. With this plan, states would be free to use non-federally approved machines, but by doing so would forfeit federal funds towards administering their elections.
In addition, manufacturers would have more incentive to hand over their source codes for inspection, while feeling safer that their proprietary information would be kept secret at the same time. Given that states would most likely opt to purchase federally approved electronic voting machines, manufacturers would not be able to dodge certain states with strict standards. In other words, to keep from handing over their source codes manufacturers would essentially have to opt out of selling electronic voting machines in the United States all together. Nevertheless, while essentially being forced to hand over their proprietary information for inspection, manufacturer’s fears of losing their trade secrets would most likely lessen given that their machines and software would only be subject to one inspection system, rather than fifty.
At the current juncture there seem to be great obstacles surrounding ensuring the accurate and secure operation of electronic voting machines, and protecting the rights of those who make those machines. However, it is important to recognize the validity of both sides in this argument and to realize that both represent ideals that are very important to our society. While, my suggestions above may not be perfect, they are a representation of what can be done if we attempt to attack these problems with any eye towards respecting the arguments of both sides and work towards a solution acceptable to all.
Purchasing Music Online
Filed Under General | Posted on December 30, 2007
By: Igor Margulyan
The question of whether American users are in violation of domestic copyright law when purchasing music from foreign websites may not be as murky as it seems. All one has to do is go back to the statutory language. Indeed, some US patrons of the Russian-based online music store, allofmp3.com, have invoked the language of the Copyright Act to ascertain the legality of their actions. Specifically, they rely on one exception in section 602(a) of the Copyright Act that permits individuals to bring copies of copyrighted works into the US without the copyright holder’s authorization as long as the importer brings no more than one copy of each work and intends to use it privately rather than for distribution. Otherwise, the person would be in violation of the copyright holder’s exclusive right of importation.
Evidently, some have explained that purchasing a song from a site, like allofmp3, is analogous to purchasing a CD from legitimate retailer abroad and bringing it into the US, whereby neither action violates the copyright law, because, presumably, both sources are operating legally within their home states. One response to this argument rests on a definitional technicality. It notes that the exception applies only to copies and phonorecords which are statutorily defined as material objects. However, online music, which comes in a form of an electronic signal, cannot be regarded as “matter” in a conventional sense. Thus, downloaded tracks fall outside the ambit of this exception.
Although seemingly sensible, this response may be superfluous if viewed in conjunction with the language of section 602(b) of the Copyright Act. This section essentially tempers the allowances of section (a) by stating that, “[i]n a case where the making of the copies or phonorecords would have constituted an infringement of copyright if this title had been applicable, their importation is prohibited.” The legislative notes on 602(b) explain that it operates to exclude “copies or phonorecords which, although made lawfully under the domestic law of that country, would have been unlawful if the U.S. copyright law could have been applied.” For allofmp3 users this restriction raises the question of whether the operations of the Russian website would have been legal if transferred to the US. In all likelihood, the answer would be “no.”
Allofmp3 derives its inventory primarily though a series of agreements with groups, such as Russian Multimedia and Internet Society (ROMS), which manage copyright holder’s rights. Russian copyright law permits these management organizations to issue compulsory licenses to various parties such as broadcasters even if the copyright holder has given no consent. The unilateral nature of this licensing regime marks the area where Russian copyright law deviates from its American counterpart. Pursuant to section 115 of the Copyright Act, compulsory licenses may not be obtained without the copyright holder’s authorization. Thus, at least to the extent that allofmp3 obtained its music content from licenses that do not bear the owner’s approval, the site’s operation within the US would be deemed in violation of the copyright law. This means that American users who purchase this content fall outside the importation exception simply because allofmp3’s operations would be illegal under the US law.
Amicus Briefs
Filed Under General | Posted on November 20, 2007
Fordham IPLJ cited in Quanta v. LG Electronics Supreme Court Amicus Briefs!
The Antitrust Institute cited to Peter Carstensen’s article, Post-Sale Restraints via Patent Licensing: “Seedcentric” Perspective, from the Fall 2005 Symposium. IBM cited to Katherine White’s article, A Rule for Determining When Patent Misuse Should be Applied, published in Spring 2001.
Read the Briefs on the ABA website: http://www.abanet.org/publiced/preview/briefs/unscheduled.html#quanta.
IPLJ NEWS November 07
Filed Under General | Posted on November 11, 2007
The Volume XVIII Editorial Team is proud to announce our 2007-2008 authors:
Volume XVIII, Book 1
Articles
The Next Ten Years in E.U. Copyright: Making Markets Work
- Tilman
Protection of Intellectual Property Rights in Software Products and How to Accomplish a Technology Transfer Transaction in China
- Felix Miao
Notes
Protecting Public Health from Outside the Physician’s Office: A Century of FDA Regulation from Drug Safety Labeling to Off-Label Drug Promotion
- Katherine A. Helm
The Continuing Controversy Over Business Methods Patents
- Lois Matalen
Big Shop of Horrors: Ownership in Theatrical Design
- Jennifer Womack
Gimme Shelter: Why the Courts Can’t Save Online Guitar Tablature, but the Music Publishing Industry Can (and Should)
- Tara Lynn Waters
Volume XVIII, Book 2
Articles
Beyond Microsoft: Intellectual Property, Peer Production and the Law’s Concern with Market Dominance
-Daryl Lim
Copyright as Quasi-Public Property: Reinterpreting the Conflict Between Copyright and the First Amendment
-Adrian Liu
Towards a New Paradigm in Justifying Copyright: An Universalistic-Transcendental Approach
-Christian G. Stallberg
Notes
A Constitutional Idea-Expression Doctrine: Qualifying Congress’s Commerce Power When Protecting Intellectual Property Rights
-Yavar Bathaee
Entering the DRM-Free Zone: An Intellectual Property and Antitrust Analysis of the Online Music Industry
-Monika Roth
Removing the Greek from Feta and Adding Korbel to Champagne: The Paradox of Geographical Indications in International Law
-Michelle Agdomar
Volume XVIII, Book 3
*IP & New Business Models Special Edition*
Introduction
Brett Frischmann
Articles
Are Universities Patent Trolls?
-Mark A. Lemley
The Mereology of Copyright
-Dan L. Burk
Internet Packet Sniffing and Its Impact on the Network Neutrality Debate and the Balance of Power Between Intellectual Property Creators and Consumers
-Rob Frieden
IP and Americana, or Why Intellectual Property Gets the Blues
-Michael J. Madison
Law & Online Social Networks: Mapping the Challenges and Promises of User-Generated Information Flows
-Tal Z. Zarsky
Notes
Thinking of the Children: The Failure of Violent Video Game Laws
-Gregory Kenyota
The Sufficiency of Computer Crime Laws: Should the Writing of Virus Code be Prohibited?
-Robert J. Kroczynski
Comment
Trying to Understand Software: Why Microsoft v. AT&T was Mistakenly Decided
-Drew J. Koning
Volume XVIII, Book 4
*Where Do We Go From Here? Symposium Edition*
Panel I: The Business Method Patent and the Patent Reform Act of 2007
-John Richards, Jeanne Fromer, Scott Locke, Walter Hanchuck
Panel II: The Death or Rebirth of Copyright?
-Hugh Hansen, Dianne Zimmerman, Brett Frischmann, Robert Kasunic
Panel III: Trademarks v. Free Speech in Cyberspace
-Sonia Katyal, William McGeveran, Brett Frischmann, Robert S. Weisbein\
Notes
TBA
Brit Won the National IP Student Award
Filed Under Journal Updates | Posted on August 8, 2007
Fordham Law Alumnus of ‘07 and previous IPLJ Editor in Chief Britton “Brit” Payne was named the 2007 winner of the national ABA-AIPLA’s Jan Jancin Award. Each year, this recognition is given to one third year law student who excels in the area of intellectual property law. “The Jancin Award recognizes students who have demonstrated the highest level of excellence in intellectual property law courses and activities over his or her law school career,” said Hugh Hansen, Fordham Law Professor and Director of the Annual Conference on International Intellectual Property. “By winning, Brit denominates the best of the best.”
Payne’s accomplishments include serving as editor in chief of the Fordham Intellectual Property, Media & Entertainment Law Journal and secretary of the Entertainment Law Studies Association. One of his papers on copyright law was recognized with a Second Place Nathan Burkan Memorial Prize through the American Society of Composers, Authors, and Publishers, and he graduated with the Thomas F. Reddy, Jr. Prize for earning the highest grades in intellectual property courses.
Payne will be presented with his award, which includes a $5,000 cash prize, at the upcoming ABA-IPLE Meeting in San Francisco, CA. He will begin working as a Copyright Litigation Associate at Darby & Darby P.C. this September.’,'Brit Won the National IP Student Award!