IP/Entertainment Law Weekly Case Update for Motion Picture Studios and Television Networks - May 16, 2012

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Greenspan v. Random House, Inc., USDC D. Massachusetts, May 9, 2012
 Click here for a copy of the full decision.

  • Court dismisses with prejudice plaintiff’s claims of direct, contributory and vicarious infringement, finding no substantial similarity existed between plaintiff’s memoir and defendants’ book and film based on the book.

Plaintiff Aaron Greenspan brought suit against defendants Random House, Inc., Benjamin Mezrich, and Columbia Pictures Industries, Inc., alleging direct, contributory and vicarious copyright infringement, and seeking damages and injunctive relief. Greenspan, who claims to have been one of the inventers of what is now Facebook while an undergraduate at Harvard University, authored Authoritas: One Student's Harvard Admissions and the Founding of the Facebook Era, and self-published the memoir in June 2008. He alleged that the book The Accidental Billionaires: The Founding of Facebook: A Tale of Sex, Money, Genius, and Betrayal, authored by Mezrich and published by Random House in July 2009, is an unauthorized derivative of Greenspan's book. He also alleges that The Social Network, the 2010 film based on Mezrich’s book and produced by Columbia Pictures, also infringes on Authoritas.

Plaintiff alleged similarities between the works, focused mainly on the accounts of meetings between with then-president of Harvard Lawrence Summers and Harvard students. The meeting Greenspan describes in Authoritas involved him, while the meeting in The Accidental Billionaires and the film involved students Cameron and Tyler Winklevoss. Plaintiff’s alleged similarities included descriptions of waiting in the president’s reception area and the receptionist's conduct, Summers' office and his conduct and manner, the appearance and conduct of Summers' assistant, and the response of the students in the meetings. Plaintiff also alleged that an account of Mark Zuckerberg's statement in an Administrative Board hearing in the film is similar to his account of his own frustrations, as written in Authoritas. He also asserted that subtitles for the Authoritas and Accidental Billionaires both included the phrase “the founding of” Facebook and that two chapter titles in the books were either similar or identical. The district court granted defendants’ motion to dismiss, finding that, that plaintiff had failed to sufficiently allege substantial similarities between the works.

Plaintiff must establish both actual copying – that defendants copied the plaintiff's copyrighted material, and actionable copying – that the copying of the copyrighted material was so extensive that it rendered the infringing and copyrighted works substantially similar. On the element of actual copying, the court noted that plaintiff had alleged sufficient facts to establish that defendants had access to his work (he published Authoritas in June 2008 and it was accessible to the general public, Mezrich had contacted Greenspan regarding his knowledge of Facebook’s origins and Greenspan had referred Mezrich to the website for Authoritas, and Mezrich listed Authoritas as a secondary source in the bibliography of The Accidental Billionaires). Focusing its examination on the alleged probative similarities between the works, the court concluded that many of them did not involve copyrightable expressions. Neither the use of the “cliché” phrase “founding of” in the subtitles of the books, nor the use of “Harvard Yard” (a location) and “Veritas” (the Latin word for truth) in chapter headings deserved copyright protection. Similarly, the statement "the president will see you” – another clichéd expression – and fragmentary words and phrases such as "palpable" and "chubby" that Greenspan used in his description of the former president do not deserve protection.

Noting that ideas and facts are not copyrightable, but that plaintiff’s unique expressions of those ideas and facts are, the court parsed the protectable elements of plaintiff’s description of the meeting with Summers from the unprotectable facts and ideas underlying those expressions. For example, the idea of sitting and waiting for a meeting with Summers, and the fact that his office was located in Massachusetts Hall are not protected, but plaintiff’s original expression describing the couch in the waiting area and the location of Massachusetts hall within Harvard Yard should enjoy copyright protection. The pieces of furniture in Summers' office are unprotected facts, but plaintiff's expression of those facts through his choice of particular details would enjoy copyright protection. As to Greenspan's description of Summers' assistant, while the fact of her ethnicity is not protected, plaintiff's description of the assistant taking notes would be. The fragmented phrases that Greenspan wrote that Summers used ("what do you want me to do?" and "I don't see") are not protected, but Greenspan's expression of Summers' unwelcoming manner and inability to see the students' point of view would enjoy copyright protection. And the ideas that the students in the meeting would be upset at "the system" and frustrated at the anticipated punishment for exposing security flaws of the university would not be protected, although Greenspan's original expression of those ideas, his description of his own anger and frustration, would be.

After separating the protectable from the unprotectable elements in Greenspan’s work, the court concluded that the plaintiff's allegations, taken as true, might demonstrate a sufficient degree of similarity to allow it to find probative similarity, but that the alleged copying of from Authoritas was not sufficiently extensive to render the works "substantially similar," and therefore actionable. According to the court, the similarities between the works arose more from the underlying ideas rather than the expressions of those ideas. For example, the court noted that the idea of sitting in Massachusetts Hall waiting for the meeting with Summer appeared in both books, creating an impression of similarity, but that a comparison of the defendants' expression of that idea – describing the age of the couch and the location of Massachusetts Hall based on its proximity to another building and a statue – with the plaintiff's expression – describing the feel of the couch, the shape of Massachusetts Hall, and its location in proximity to Johnston Gate – did not show that the alleged copying was so extensive that an ordinary observer could conclude that the defendants unlawfully appropriated the plaintiff's expression. The court also found that the use of the desk, shelves, and computer in the descriptions of Summers’ office fell within the doctrine of scenes a faire as inherent characteristics of an office and did not support a plausible inference of infringement. In addition, defendants' choice to include details such as antique-looking side tables and an Oriental carpet, as compared to plaintiff's expression, which included the dark African masks, undercuts a finding of extensive copying.

The amount of the alleged copying, in the context of the works as a whole, was also insufficient to support a finding of substantial similarity. The court concluded: “Greenspan and the defendants use similar aspects to express the two different meetings with Summers, including describing the reception area, Summers' office, Summers' conduct and manner, Summers' assistant's appearance and conduct, and the students' responses in the meetings. However, there is no dispute that Greenspan's book and the defendants' works were describing two different meetings which took place at different times, involved different student participants and different subject matter. These meetings were but a very minimal part of the various works as a whole. In context, whatever similarity there may be, it is too quantitatively and qualitatively insignificant to be deemed ‘substantial.’ Greenspan has not alleged sufficient facts to establish that a reasonable, ordinary observer could conclude that the defendants unlawfully appropriated the plaintiff's original expressions.”

The court dismissed, with prejudice, plaintiff’s claim for copyright infringement. Absent a showing of direct copyright infringement, plaintiff’s claims for contributory or vicarious infringement also failed, and the court dismissed those with prejudice as well. Finally, the court dismissed, with prejudice, Greenspan’s claims of unfair competition and false advertising under the Lanham Act, as well as his state law defamation.

Scorpio Music S.A. v. Willis, USDC S.D. California, May 7, 2012
 Click here for a copy of the full decision.

  • District court dismisses music publishers’ declaratory judgment action challenging the validity of co-author’s unilateral notice of termination of copyright grants, holding that a joint author who separately transfers his copyright interest may unilaterally terminate that grant.

Plaintiffs Scorpio Music S.A., a French music publisher, and Can’t Stop Productions, Inc., the exclusive U.S. sub-publisher and administrator of Scorpio’s musical compositions, brought a declaratory judgment action against defendant Victor Willis, the original lead singer of the Village People, challenging Willis’s attempt to terminate his post-1977 grants of his copyright interest in 33 musical compositions (the Compositions), including the hit songs, YMCA, In the Navy and Go West.

Plaintiffs alleged that from 1977 to 1979, they employed Willis to translate lyrics or create new lyrics for French musical compositions owned by Scorpio. The copyright registrations for those works list Willis as one of the writers. Under their Adaptation Agreement, Willis transferred the copyright interest in those works to Can’t Stop Music, in return for which Willis received between 12 and 20 percent of the gross receipts from the works. In January 2011, Willis served plaintiffs with a “Notice of Termination of Post-1977 Grants of Copyright on Certain Works of Victor Willis” with respect to his interests in the Compositions. Plaintiffs brought suit challenging the validity of the termination and seeking a declaratory judgment that Willis has no rights in the copyrights, requiring him to withdraw the notice of termination, and enjoining him from making any claims to the copyrights in the compositions. In the alternative, if the court found that Willis has the right to terminate, plaintiffs seek a declaration that defendant’s reversion of rights be limited to the same percentage ownership as he received under the Adaptation Agreements.

The court declined to rule in plaintiffs’ favor on both requests and granted Willis’s motion to dismiss the action, finding that Willis did have the right to terminate and that he was entitled to reversion of his undivided share in the rights as co-author of the works. Plaintiffs argued that Willis’s notice of termination was invalid because he was the only author who served a notice and that, under the Copyright Act, a majority of all of the authors who transferred their copyright interests in a joint work, whether their transfers were part of the same transaction or separate transactions, must join in a termination for it to be valid. Willis argued that since he was the only person who executed the grants of his copyright interests in the compositions, he alone had the ability to terminate those grants.

The court agreed with Willis, holding that “a joint author who separately transfers his copyright interest may unilaterally terminate the grant." The Copyright Act of 1976 gives authors the right to terminate a transfer of copyright by serving an advanced notice of termination that complies with the specific requirements of the act. An author may terminate the grant at any time during a period of five years beginning at the end of 35 years from the date of execution of the grant. The author must serve the termination notice on the grantee (or grantee’s successor) not less than two and not more than 10 years before the specified date of termination.

According to the court, the issue in the case was whether, where joint authors of a work transfer their respective copyright interests through separate agreements, a single author may alone terminate his separate grant of his copyright interest in the joint work or whether a majority of all the authors is necessary to terminate that grant. The court concluded that the language and purpose of the statute, in conjunction with the law governing the rights of joint authors, permits a joint author who separately transfers his copyright interest to terminate unilaterally that grant.

Section 203(a)(1) of the Copyright Act provides: “In the case of a grant executed by one author, termination of the grant may be effected by that author.” Further: “In the case of a grant executed by two or more authors of a joint work, termination of the grant may be effected by a majority of the authors who executed it.” Noting that, when referring to a grant executed by two or more authors of a joint work, section 203(a)(1) refers to a “grant” in the singular, not “grants,” the court reasoned that, under the plain meaning of the statute, if two or more joint authors join in a grant of their copyright interests, a majority of the authors is necessary to terminate that grant. If a single joint author grants his copyright interest, however, then he alone can terminate his grant.

According to the court, this interpretation is consistent with the law governing the rights of joint authors both before and after the enactment of the Act in 1976. Each co-owner of a joint work has an undivided interest in that work and may, in the absence of an agreement otherwise, transfer his ownership rights to a third party. Congress was aware that a single joint author may grant his interest in the joint work separately from his co-authors or may join in a grant with one or more of his co-authors, and the Act therefore provides that, when two or more authors of a joint work execute a joint grant, a majority of the authors who executed the grant is necessary for termination. Section 203(a)(1) does not require that a joint author enter into a joint grant with one or more of his co-authors, however. Nor does it provide that if two or more joint authors enter into separate grants, a majority of those authors is needed to terminate any one of those grants.

The court rejected plaintiffs’ argument that the singular “grant” means all transfers by joint authors, collectively, even if executed in separate transactions. It concluded: "It would be contrary to the purpose of the [Copyright] Act to require a majority of all joint authors who had, at various times, transferred their copyright interests in a joint work to terminate the legally permissible separate grant by one joint author of his undivided copyright interest in the work. The purpose of the Act was to 'safeguard authors against unremunerative transfers' and address 'the unequal bargaining position of authors, resulting in part from the impossibility of determining a work's value until it has been exploited. Under Plaintiffs' interpretation, it would be more difficult to terminate an individual grant than it would be to make it in the first place."

The court also declined to limit Willis’s ownership in the various compositions based on the percentage royalty compensation he received under the Adaption Agreement – between 12 and 20 percent. Rather, it held that Willis would get back ownership based on the rights he granted, not the remuneration he received for those rights. Absent an agreement otherwise, joint authors shared equally in the ownership of the joint work, even if their respective contributions to the joint work were not equal. If Willis was one of three authors of a musical composition, he would have a one-third undivided copyright interest in the composition. If he granted his copyright interest in the composition and then later terminated that grant, Willis would get back his one-third undivided copyright interest, regardless of what percentage royalty he was paid during Can’t Stop Music’s ownership of the copyright interest.

 

Dash v. Mayweather, USDC D. South Carolina, May 11, 2012
 Click here for a copy of the full decision.

  • In copyright infringement action, court grants defendants’ motions for summary judgment on damages, holding that plaintiff failed to meet his burden of proof under § 504(b) of the Copyright Act because he could not demonstrate a causal link between the alleged infringement and any enhancement to defendants’ revenue, and plaintiff’s evidence of actual damages was speculative

Plaintiff, Anthony Lawrence Dash, brought suit against defendants, alleging that the song Yep, played during defendant Floyd Mayweather, Jr.’s entrance at two of defendant World Wrestling Entertainment’s events infringed a copyright that he holds in a “beat” called the Tony Gunz Beat. Following a contentious discovery dispute involving damages issues, the court bifurcated the case and, as the first phase in the bifurcated proceedings, agreed to consider “the issue of Plaintiff’s entitlement to actual damages and/or a lost profits based measure of damages pursuant to 17 U.S.C. § 504(b).” Section 504(b) allows the copyright holder to recover both actual damages and profits of the infringer attributable to the infringement. After surveying Fourth Circuit precedent, the court affirmed that “summary judgment may be properly awarded to an infringer where there is no conceivable connection between the infringement and the claimed revenues” or where the copyright holder can offer no “more than mere speculation.”

Considering “infringer profits” first, the court noted that while revenues with fixed levels, generated by sources independent of the infringed work, cannot be proper measures of damages under §504(b), revenues generated and collected from the use of the specific infringed work are. Because the parties had stipulated that playing Yep did not increase the defendants revenues beyond what they otherwise would have been, the court found that plaintiff failed to present any evidence demonstrating a “causal link between the alleged infringement and the enhancement of a revenue stream at the WWE events in question.” Based on that finding, the court held that that plaintiff could not recover any of defendants’ profits as damages.

The court also held that Dash failed to demonstrate any actual damages under §504(b). In order to recover actual damages, Dash must demonstrate the market value of the beat – the license fee that Dash would have charged. Dash did not offer concrete evidence sufficient to indicate the actual value of the beat to which he holds the copyright, however. Rather, he offered only evidence comparing fees paid to other entertainers whose music was played at World Wrestling Entertainment events. The court found this evidence to be mere speculation as to the value of his copyrighted beat, noting that the actual damages calculation focuses on the plaintiff’s work, and not anyone else’s.

Because Dash failed to meet his §504(b) burden with respect to a calculation of profits, and failed to present evidence in support of his claim for actual damages, the court granted summary judgment in defendants’ favor on both damages issues. Given that Dash was not entitled to any damages, the court also declined to proceed to the liability phase, and dismissed the case.


For more information, please contact Jonathan Zavin at jzavin@loeb.com or at 212.407.4161.

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.

Published In: Art, Entertainment & Sports Updates, Civil Procedure Updates, Civil Remedies Updates, General Business Updates, Intellectual Property Updates

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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