IP/Entertainment Law Weekly Case Update for Motion Picture Studios and Television Networks -- November 21, 2013

Table of Contents

The Authors Guild Inc. v. Google Inc., USDC, S.D. New York, November 14, 2013
Click here to download a PDF of the full decision.

  • District court grants Google’s summary judgment motion, holding that Google’s scanning and indexing of copyrighted books for its Google Books project is transformative, non-infringing fair use.

Plaintiffs brought a class action charging Google with copyright infringement, alleging that Google violated the authors’ copyrights in creating its Google Books project. Earlier in the suit’s procedural history, the plaintiffs had filed a class certification motion, which was granted by the district court. The Second Circuit vacated the class certification, concluding that “resolution of Google’s fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues.” The Second Circuit remanded the case, and the district court, in this decision, granted summary judgment to Google on its fair use defense.

The Google Books project involves the digital scanning of books for Google’s digital library collec-tion. The Books Project actually encompasses two separate programs – the Partner Program and the Library Project. Under the Partner Program, works are displayed with the permission of the rights holders and the partners decide how much of their books are browsable (in snippets or in full). With the Library Project, Google scans entire books that participating libraries provide – some libraries provide only works in the public domain, while others allow in-copyright works as well. Google did not seek or obtain permission from the rights holders to digitally copy or display the in-copyright books.

In scanning books for its Library Project, Google creates an overall index of all scanned books, link-ing each word or phrase appearing in each book with the locations in all of the books in which that word or phrase is found. Users of Google’s search engine can conduct searches of the scanned books and be directed to an “About the Book” page, which includes links to sellers of the books and/or libraries that list the book as part of their collections. For books that are in snippet view, as contrasted with full-view books, Google divides each page into eighths, each of which is a snippet – each search generates three snippets of a work. By performing multiple searches using different search terms, a single user may view far more than three snippets. However, Google takes security measures to prevent users from patching together a complete copy.

Limiting its analysis to the sole issue of fair use, the district court analyzed the Google Books pro-ject under the four “fair use” factors: (i) the purpose and character of the use (including whether such use is of a commercial nature), (ii) the nature of the copyrighted work, (iii) the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and (iv) the effect of the use upon the potential market for or value of the copyrighted work.

With respect to the first factor (the purpose and character of the use), the court emphasized that Google’s use of the books is highly transformative – digitizing them; transforming text into a com-prehensive word index to help readers, scholars, researchers, and others find books; and becoming an important tool for libraries, librarians, and cite checkers to identify and find books. The court likened the display of snippets to the display of thumbnail photographs, which have been held to be fair use, and noted that Google Books is also transformative in that it has transformed book text into data for purposes of substantive research, including data mining and text mining. The court noted that Google Books also does not supplant books, since it adds value to the original and cannot be used as a tool to read an in-copyright book. While Google is a for-profit entity and Google Books is largely a commercial enterprise, the court focused on the project’s educational purposes and overall benefits and noted that Google does not engage in the direct commercializa-tion of the copyrighted works. Accordingly, the court concluded that the first factor strongly fa-vored a finding of fair use.

Turning to the nature of the copyrighted work, the court noted that while works of fiction are enti-tled to greater copyright protection, the vast majority of the books in Google Books are nonfiction. The court also observed that the books at issue have all been published and are available to the public and concluded that these considerations favor a finding of fair use.

With respect to the third factor (the amount and substantiality of the portion used in relation to the copyrighted work as a whole), the court acknowledged that Google scans the full text of books but noted that, in appropriate circumstances, copying the entirety of a work may still be fair use. Here, the court noted that one of the keys to Google Books is its offering of full-text search of books (and thus full-work reproduction is critical to the functioning of the project) and that Google limits the amount of text that it actually displays in response to a search. On balance, the court concluded that the third factor weighed against a finding of fair use but only slightly.

Finally, to economic effect, the court rejected the idea that Google’s scans would serve as a mar-ket replacement for books, expressing doubt that users would take the time and energy to try to get enough snippets to compose an entire book. Instead, the court found it likely that Google Books would allow the scanned works to be discovered by new readers, thus enhancing the sales of the books, to the benefit of the copyright owners.

Weighing the statutory fair use factors together with the consideration that Google Books provides significant public benefits as a research tool and audience generator for copyright holders, the district court held that Google’s project is fair use and that the company cannot be held liable for other direct or secondary infringement.

DuckHole Inc. v. NBCUniversal Media LLC, USDC, C.D. California, October 25, 2013
Click here to download a PDF of the full decision.

  • District court awards attorneys’ fees and costs in copyright infringement action involving plaintiff’s claim that defendants’ Animal Practice infringed its treatment PETS, where plaintiff’s principal was intellectual property law attorney yet proceeded with claims despite lack of substantial similarity.

Defendants’ motion for attorneys’ fees and costs followed the court’s dismissal of copyright infringement claims brought by plaintiff DuckHole Inc. against NBCUniversal and several other production companies involved in producing the television program Animal Practice. Plaintiff alleged that defendants copied ideas from plaintiff’s treatment for a proposed television show, PETS. Defendants’ work, Animal Practice, depicts day-to-day life at Crane Animal Hospital, a fictional privately owned upscale animal hospital in New York City. While the television show features exotic animals, its plot lines largely focus on the personal lives of its ensemble cast of characters. In contrast, the treatment for PETS depicted a city-owned after-hours veterinary clinic.

The court dismissed plaintiff's First Amended Complaint, finding that “PETS and Animal Practice have distinct plots, demonstrating that they are wholly different expressions of the same idea.” Additionally, the elements identified by plaintiff demonstrating similarity “are too generic to be protectable elements.”

Applying the Fogerty test, the court found that plaintiff acted unreasonably in arguing that the protectable elements were substantially similar and that the idea of a sitcom set in an animal hospital was novel enough to support a copyright infringement claim. As to the deterrence factor, the court noted that while NBCUniversal Media “may be capable of shouldering litigation costs, the other defendants are not.” The court also noted that “[d]eterring non-meritorious lawsuits against defendants seen as having ‘deep pockets’ and compensating parties that must defend themselves against meritless claims are both laudable ends.” The court also noted that while plaintiff itself had not been involved in repeated litigation or acted vexatiously, plaintiff’s principal was an experienced intellectual property lawyer, sophisticated in copyright law. Although defendants had made repeated efforts to confer with plaintiff and to avoid litigation, plaintiff refused to engage in settlement discussions. In the court’s view, plaintiff prosecuted its claims despite knowing that its claims lacked merit.

In evaluating defendants’ fee request, the court found that defendants’ total hours and hourly rates were reasonable and consistent with past fee awards in copyright suits in the same district. With the exception of a request for fees associated with DVD copying, the court granted defendants’ request for nontaxable costs in its entirety.

Loomis v. Cornish, USDC, C.D. California, November 13, 2013
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  • District court grants summary judgment in favor of defendant recording artists on plaintiff’s copyright infringement, finding that plaintiff failed to present either a clear chain of access to his work by the alleged infringers, despite corporate receipt, or widespread dissemination of his work.

Plaintiff, a self-employed musician who wrote a composition titled “Bright Red Chords” and later obtained a copyright registration for his work, brought suit against several recording artists as well as the recording companies UMG Recordings, Inc., and Universal Republic Records, alleging that defendants infringed upon his copyright by producing and distributing a musical composition called “Domino.”

As the court noted, because plaintiff lacked any evidence of direct copying, he needed to establish that the Domino writers had access to “BRC” and that the works were substantially similar. Plaintiff had never met with or spoken to the “Domino writers,” nor had he attempted to send his work to them. Instead, plaintiff attempted to establish access to his work through several different chains of alleged connections between the defendants and other individuals having access to “BRC” – some employed at defendant UMG and others not. Specifically, plaintiff identified five “high ranking executives” at UMG who he claimed had access to his work and argued that these individuals exerted such a degree of control over UMG’s artists that defendant writers likely would have received his work.

Noting that “bare corporate receipt” by an individual employed by the same company as the alleged copier is insufficient to establish a triable issue of access, and after reviewing other cases involving chains of access between copyright owners and the work of their alleged infringers, the court rejected plaintiff’s attempts to establish the requisite connection – an overlap in subject matter – between the intermediaries and defendant writers. The court examined in detail the alleged chain of events between each of the intermediaries and the defendant writers and concluded that plaintiff had failed to establish any meaningful connection or overlap between the alleged receipt of his song by any of the five UMG executives and any of the writers. In addition, the court noted that plaintiff’s chain of connection consisted of speculation and supposition, in part based on the positions the UMG executives held at the time (vice president of A&R, for example), and that plaintiff failed to provide concrete evidence rebutting defendants’ evidence that the intermediaries had no connection to or overlap with defendant writers.

The court also examined and rejected plaintiff’s arguments that two non-UMG employees served as conduits to one or more of the defendant writers, again finding that plaintiff had failed to provide any concrete evidence of the connection between the intermediary and the writers. The court specifically rejected plaintiff’s argument that the former guitar player for his band could have served as the conduit to the writers because all three played some role in the creation of a Katy Perry film (the guitar player was a writer, and the defendants were co-producers), finding that plaintiff had not presented any concrete evidence showing how or in what manner the three overlapped. The court also reached the same conclusion with respect to plaintiff’s allegation that an intermediary to whom he gave a copy of his song also worked with three of the defendant writers, finding that plaintiff’s assertion rested solely on his uncorroborated and self-serving testimony that he discovered that information on the Internet.

The district court also rejected plaintiff’s attempt to demonstrate access by showing that the plaintiff's work had been “widely disseminated.” Generally, the court noted, the case law makes clear that in order for a work to be considered widely disseminated, “it must achieve a high degree of commercial success or be readily available in the relevant market.” Here, the court noted that plaintiff’s evidence concerning the availability of “BRC” on the Internet and through various promotions fell far short of the degree of dissemination necessary to support an access claim.

Finally, the court noted that a plaintiff may circumvent the access element by demonstrating an overwhelming “striking similarity” between the works. The plaintiff failed to present any evidence on that issue, however, and the court further noted that evidence of “striking similarity” must show a nearly inescapable similarity that would be obvious to people listening to both works. Accordingly, the court granted defendants’ motion for summary judgment.

Seven Arts Filmed Entertainment Ltd. v. Content Media Corp, USCA Ninth Circuit, November 6, 2013
Click here to download a PDF of the Alert.

  • Adopting Second and Sixth Circuit precedent, Ninth Circuit affirms dismissal of copyright infringement action as barred by Copyright Act’s statute of limitations, where central dispute was copyright ownership and defendant repudiated plaintiff’s ownership more than three years before plaintiff brought suit.

Plaintiff Seven Arts Filmed Entertainment Limited purports to be the owner or assignee of several motion pictures, including Rules of Engagement, An American Rhapsody, and Who Is Cletis Tout? Seven Arts sued Paramount Pictures Corp. and Content Media Corp. PLC for copyright infringement, alleging that Paramount is the licensee of certain distribution rights in and to the motion pictures and that Paramount improperly paid royalties to Content, not Seven Arts. Seven Arts sought a declaration that neither Content nor any of its predecessors-in-interests was the copyright owner of the motion pictures. The district court dismissed Seven Arts’ action as time-barred and Seven Arts appealed.

At the outset, the court distinguished between the accrual of copyright infringement claims and the accrual of claims of ownership. In contrast to copyright infringement claims, which, under the “rolling” concept of looking back three years from filing, accrue at the time of each infringing act, a claim to establish ownership or co-ownership accrues only once, when plain and express repudiation of ownership is communicated to the claimant. Although Seven Arts asserted a claim for copyright infringement, the court found that the dispute was essentially a dispute over ownership. Paramount conceded that it is exploiting the pictures, noted the court, but denies that Seven Arts owns the copyrights.

Guided by the Second and Sixth Circuits, the Ninth Circuit held that, where the gravamen of a copyright infringement suit is ownership, and a freestanding ownership claim would be time-barred, any infringement claims are also barred. The court reasoned that allowing infringement claims to establish ownership where a freestanding ownership claim would be time-barred would permit plaintiffs to skirt the statute of limitations for ownership claims and lead to potentially bizarre results. The court saw no reason not to extend the accrual-upon-express-repudiation rule for claims of co-ownership to claims seeking to establish sole ownership. The court also found inapposite Seven Arts’ contention that Congress’s intent in enacting the statute of limitations was to bar particular remedies, not to extinguish substantive rights.

The court rejected Seven Arts’ effort to distinguish Second and Sixth Circuit precedent on the basis that Paramount was a “putative downstream, third party licensee” rather than a co-author or otherwise “in a close relationship, such as those who transfer copyright ownership via contract.” While the panel acknowledged that extending the accrual-upon-express-repudiation rule to those who are not in a close relationship potentially could introduce uncertainty in copyright enforcement, here the requisite close relationship existed. Where Seven Arts’ CEO and counsel in the appeal personally signed and negotiated contracts with Paramount, Seven Arts was fully aware of Paramount’s interest in, and distribution of, the pictures during the statutory period.

Because it was apparent from the complaint that Paramount clearly and expressly repudiated Seven Arts’ ownership of the copyrights more than three years before Seven Arts brought suit, the Ninth Circuit affirmed dismissal of Seven Arts’ claims as time-barred.

Westlaw decisions are reprinted with permission of Thomson/West. If you wish to check the currency of these cases, you may do so using KeyCite on Westlaw by visiting http://www.westlaw.com/.

Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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