Changes Ahead in U.S. Copyright Statutory Damages Law

February 18, 2016 · by ·

The U.S. Department of Commerce’s Internet Policy Task Force  (the Task Force), which is led by both the U.S. Patent and Trademark Office (USPTO) and the National Telecommunications and Information Administration (NTIA), published on January 28 a  White Paper on Remixes, First Sale, and Statutory Damages which addresses three issues:

  • 1) the legal framework for the creation of remixes;
  • 2) the relevance and scope of the first sale doctrine in the digital environment; and
  • 3) the application of statutory damages in the context of individual file-sharers and secondary liability for large-scale online infringement.

The Task Force had published a Green Paper, “Copyright Policy, Creativity, and Innovation in the Digital Economy” on July 31, 2013, which had identified these three issues warranting further review by the Task Force.

The Task Force then published a Notice in the Federal Register seeking comment on these issues. It conducted a public meeting in December 2013 and also held roundtables around the U.S., before reviewing comments from stakeholders as diverse as rights holder organizations, Internet-based companies, public interest groups, libraries, academics, and individual authors and artists.

Remixes

Remixes use existing works, some of them still protected by copyright, to create new works, which may be compilations or derivative works under the Copyright Act, or collective works.  As noted by the Task Force, user generated content (“UGC”) “has become a hallmark of the Internet” (p.6).

Some of the remixes, such as fan fiction and fan videos, are created by non-professionals, while others, such as music mashups, are created by professionals and may even be sold. Several stakeholders noted that “the lines between amateur and professional, and between noncommercial and commercial, are often blurred” (p. 7). Others noted that “noncommercial activities can cause harm to the market for the original work or for licensed derivative works” (p.8).

Some remixes are fair use, some are not, and determining what is fair use or not is not easily determinable, even by attorneys or by courts, as noted by some stakeholders (p.10). The Copyright Office maintains an online fair use index to help determine whether a particular use may be fair or not, but this tool alone does not provide an absolute determination of whether a particular use is fair or not.piano rolls

The Task Force did not believe that a compulsory license, such as the one provided by section 115 of the Copyright Act for phono records, would be advisable. At the time this compulsory license was enacted, one company had the monopoly on the piano roll market, and the Task Force has not seen evidence that a similar monopoly exists today for remixes or their licensing.

Also, such compulsory licenses would allow the creation of derivative works, whereas statutory licenses now only permit reproducing, distributing, and public performance of the licensed work, without alteration (p. 26). While the Task Force acknowledged that remixes are “valuable contributions to society… the record has not established a need to amend existing law to create a specific exception or a compulsory license for remix uses” (p. 4).

Instead, the Task Force recommends three goals to be pursued so that remixers would understand when a use is fair or not, and to understand how to obtain licenses.

These three goals are:

  1. developing negotiated guidelines which would provide greater clarity as to the application of fair use to remixes;
  2. expanding the availability of a wider variety of voluntary licensing options; and
  3. increasing educational efforts aimed at broadening an understanding of fair use.

The guidelines could be developed independently or with the collaboration of the government (p. 28) and should be written in language easily understandable by the general public (p.29). The White Paper notes that such guidelines already exist, such as the Principles for User Generated Content Services which aims at “foster[ing] an online environment that promotes the promises and benefits of UGC Services and protects the rights of Copyright Owners.”

As licensing would remain voluntary, authors and rights holders would have the option to refuse granting a license, “especially when the prospective licensee is seeking permission for a use that the author or rights holder considers offensive” (p. 30).

A stakeholder gave the example of the Beatles Hey Jude song used to create an Anti-Semitic work (see note 44 of the White Paper). But such hateful use would probably be fair use, and protected by the First Amendment. Only granting authors a moral right would allow them to bar every use they find offensive. By the way, what is “offensive”?  The Beatles example would be considered offensive by many, if not all, but what about use of a protected work to comment on issues where opinions diverge more, such as political opinions?

First Sale Doctrine

The Task Force noted that works distributed online are often licensed, not sold, and “this could make the resale market obsolete” (p. 35). Some stakeholders noted that the contractual terms of such licenses are often “opaque” (p.39).

Libraries expressed concerns that their use of digital works may be limited, including eBook library loans (p. 47). Indeed, libraries may only lend books thanks to the first sale doctrine, but the Task Force believes that “early government intervention into the eBook market could skew the development of innovative and mutually beneficial arrangements” between eBook publishers and libraries. However, this may change if libraries are not able to “appropriately serve their patrons due to overly restrictive terms imposed by publishers” (p.4).

In order to preserve the first sale doctrine in the online environment, the Task Force believes it is not advisable to extend the first sale doctrine to digital transmissions of copyrighted works, because of the risks that would cause to copyright owners’ primary markets.

The Task Force noted that digital works are offered at lower prices than the hard copies of the works and thus deliver the benefit offered by the first sale doctrine to consumers who may purchase used books and used copies of protected works at a lower price (p.58).

While consumers are not allowed to resell their digital copies, “[i]t is difficult… to determined the value of this lost benefit” as the Task Force does not have “sufficient data to conduct an authoritative  cost-benefit analysis of the trade-offs between the consumer benefits from the first sale doctrine and from licensed online services”(p. 59).

So U.S. law is not (yet) ready to authorize the resale of digital goods.

Statutory Damages

Statutory damages have been applied against individuals sharing files online and against online services found to be secondarily liable for such infringements. Remix artists often refrain from using a protected work, even they believe their use is fair, as fair use can not be accurately predicted and “the threat of high statutory damages can stifle lawful activity” (p.33). Some stakeholders also argued that statutory damages have a chilling effect on innovation and investment (p.80), an assessment disputed by some right holder groups (p. 81).troll

Statutory damages have also allowed the development of a noxious “business model” of massive copyright infringement suits (aka copyright trolls), which abuse the litigation process by filing hundreds of boilerplate copyright infringement suits, using the subpoena power of the courts to find the identity of Internet users. These suits are, however, rarely litigated, but instead are settled after intimidating correspondence (p. 74).

The Task Force recommends three amendments to the Copyright Act so that the needs of copyright owners, users, and intermediaries may be better balanced:

First, the Task Force recommended that Congress add a new paragraph in Section 504 of the Copyright Act to provide a list of factors for courts and juries to consider when determining the amount of a statutory damages award. It proposed the insertion of this new clause in subsection Section 504(c): (p.87)

FACTORS TO CONSIDER — In making any award under this subsection, a court shall consider the following nonexclusive factors in determining the appropriate amount of the award:

(1) The plaintiff’s revenues lost and the difficulty of proving damages.

(2) The defendant’s expenses saved, profits reaped, and other benefits from the infringement.

(3) The need to deter future infringements.

(4) The defendant’s financial situation.

(5) The value or nature of the work infringed.

(6) The circumstances, duration, and scope of the infringement, including whether it was commercial in nature.

(7) In cases involving infringement of multiple works, whether the total sum of damages, taking into account the number of works infringed and number of awards made, is commensurate with the overall harm caused by the infringement.

(8) The defendant’s state of mind, including whether the defendant was a willful or innocent infringer.

(9) In the case of willful infringement, whether it is appropriate to punish the defendant and if so, the amount of damages that would result in an appropriate punishment.

The Task Force explained that these factors “should be weighted holistically” (p. 88).

Secondly, the Task Force recommended amending Section 401(d) and 402 (d) of the Copyright Act to expand eligibility for the lower “innocent infringement” statutory damages awards (p. 97).

Thirdly, the Task Force recommended giving courts discretion to assess statutory damages other than on a strict per-work basis in cases of non-willful secondary liability for large scale online services (p. 97).

Small Claims Tribunal

The Task Force is also in favor of establishing a small claims tribunal, as it believes this “could help diminish the risk of disproportionate levels of damages against individual file-sharers” (p.5). This has been proposed by the Copyright Office itself.

The tribunal would be centralized, in a single location, and would provide for a cap on awards of both statutory and actual damages. There would be limited discovery and counterclaims, and all relevant defenses could be asserted, including fair use. Also, it would not be mandatory to be represented by an attorney, and the tribunal could award costs and fees against frivolous litigants (p. 99). This is a very interesting proposal and I hope it will be implemented soon.

This post was first published on The 1709 Blog.

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Only Thing That Counts is… Fair Use?

February 11, 2016 · by ·

Appropriation artist Richard Prince is famous and is not known by every IP attorney in the U.S., following the Cariou v. Prince case (see earlier blog post here.)  He recently  ‘repurposed’ again more photographs taken by third parties to create this time art presented in his New Portraits exhibition, and a rather lucrative art that is, both for him and for the gallery representing him.

Now, photographer Donald Graham has filed a copyright infringement suit against Prince, the Gagosian Gallery, and its owner Larry Gagosian. Graham claims that Prince used the “Rastafarian Smoking a Joint” photograph without permission in the New Portraits exhibition. Prince presented inkjet prints on canvases of images he had found on Instagram, complete with his own comments as @richardprince4nd. This did not fare well with several authors of the photographs, but so far Donald Graham is the only one who has taken legal action.

It is not the first time that Richard Prince is been sued for copyright infringement. Patrick Cariou, the author of the Yes Rasta photography book, sued Prince after he had used some of the Yes Rasta photographs to create his Canal Zone series, also presented at the Gagosian Gallery. The Second Circuit found this use to be fair. Just like Cariou, Graham had traveled to Jamaica and taken black and white pictures of Rastafarians after gaining their trust. Does that insure that a court will find Prince’s use of Graham’s work to be fair?Prince

This Time, It May Not Be Fair Use

Fair use is a defense to copyright infringement, but it is not fool-proof or automatic. Instead, judges use four non-exclusives factors to determine if a particular use of a work protected by copyright is fair: (1) purpose and character of the use, (2) nature of the copyrighted work, (3) amount and substantiality of the portion taken, and (4) effect of the use on the potential market.

The second and the third factor are likely to favor Graham, as the work reproduced is artistic, and has been reproduced in its entirety. Therefore, the first and the fourth factor will probably decide whether the use is fair or not.

Graham had not posted himself a reproduction of his work on Instagram, but a third party did, without Graham’s authorization. Under the post, Prince added the comment ““Canal Zinian da lam jam”, which may allude to his Canal Zone series, deemed to be fair use, and printed the page featuring the Graham photograph and his comments.

In Cariou v. Prince, the Second Circuit noted that “Prince altered [the Cariou] photographs significantly” (at 699). Adding a nonsensical comment under a photograph, even if one chooses to describe it as poetry, is not a significant alteration of the original work. This point is likely to be debated by the parties, as the Supreme Court stared in Campbell v. Acuff-Rose Music, when explaining the first fair use factor, that “the more transformative the new work, the less will be the significance of other factors, like commercialism, that weigh against a finding of fair use” (at 579).

In Cariou, the Second Circuit explained:

“These twenty-five of Prince’s artworks manifest an entirely different aesthetic from Cariou’s photographs. Where Cariou’s serene and deliberately composed portraits and landscape photographs depict the natural beauty of Rastafarians and their surrounding environs, Prince’s crude and jarring works, on the other hand, are hectic and provocative.”

In our case, one would be at pain to describe Prince’s use of Graham’s photography as being “hectic and provocative. “ It may be considered a provocation, but this does still not make the work “provocative” for fair use purposes.

Prince knows how to provoke: he posted a comment about the Graham suit on Twitter: “U want fame? Take mine. Only thing that counts is good art. All the everything else is bullshit.” Interestingly, fair use protects art whether it is good or not, without the judges having to concern themselves about whether fair use is good art or not, or even if it is art at all, or whether the author of the work is famous or not .

As for the fourth factor, the effect on the use on the market, Graham does license his work, including the work at stake, which was not the case in Cariou, and so Prince’s use may be deemed to have an effect on the market.

A Lucrative Business, Thanks to Copyright

Graham posted on Instagram a view of the New Portraits exhibition, including the print reproducing his own work, and added the hashtag #PrinceofAppropriation. The complaint argues that Prince “has achieved notoriety in the “appropriation art” industry for his blatant disregard of copyright law” (at 23).

All the prints forming the New Portraits exhibition have been sold. The Gagosian Gallery has published a catalog of the exhibition, and, according to the Complaint (at 35) “a gigantic photograph of the Exhibition prominently featuring the Infringing Work on a billboard at 50th Street and West Side Highway in New York City for several months, until at least July 2015.”

As noted in the complaint (at 28), the Gagosian Gallery is aware that copyright law prevents a third party to reproduce its inventory without permission (“All images are subject to copyright. Gallery approval must be granted prior to reproduction.” Therefore, Graham himself would have to ask permission to reproduce the unauthorized reproduction of this work by Prince reproducing the original unauthorized post on Instagram by a third party (dizzy yet?).

This case is on the watch list of every IP attorney in the US.

This post was first published on The 1709 Blog.

Image is courtesy of Flickr user jpmueller99 under a CC BY 2.0 license

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The Paris Court of Appeals Gives Freedom of Expression the Ax in Favor of Droit Moral

February 10, 2016 · by ·

The Paris Court of Appeal recognized on October 13 that the opera Le Dialogue des Carmélites, as staged by Dmitry Chernyakov for the Opera of Bavaria in 2010, had violated the moral rights of the composer and the librettist. The music for the Dialogue des Carmélites was written by Francis Poulenc and its libretto adapted the eponymous theatrical work of Georges Bernanos.

The opera tells the story of a young French aristocrat, Blanche de la Force, who is painfully shy and fearful. As the French Revolution is about to start, she decides to become a Carmelite, or rather, to seek refuge in a convent. After the Carmelites are forbidden by the revolutionaries to be nuns and are ordered to go back to their civil life, they take a vow of martyrdom. Blanche flees the convent. The nuns are later arrested and sentenced to death.
In the last scene of the opera, which is the only scene in contention in this case, the Carmelites go one by one to the scaffold, while singing Salve Regina, a choir which decreases voice by voice after the sound of the ax, repeated regularly by the orchestra, indicates that the blade of the guillotine has cut off yet another head. Blanche suddenly appears at the scene, serene, just before the last nun, the young Constance, is about to be guillotined. Constance dies knowing that Blanche has been able to overcome her fears. The opera ends with Blanche calmly climbing the steps to the scaffold while singing the Veni Creator, and dying. The orchestra then plays again the opera’s motif, first played in its opening, albeit more plaintively this time. The whole scene is chilling.nun

Dmitry Chernyakov chose to place the action of the opera in the contemporary world, not during the French revolution. There is no guillotine in the last scene, and the nuns are instead held prisoners in a shed, waiting to be gased. Blanche suddenly arrives at the scene, albeit not to share the nun’s martyrdom, but to save them one by one, each of the rescues being punctuated, rather oddly, by the sound of the guillotine. Blanche then goes back inside the shed which explodes, killing her. It is unclear whether it is an accident or a suicide.

The heirs of Poulenc and Bernanos, as holders of their moral rights, brought an action in France against the director, the editor of the DVD of the opera, published in France, and the Munich Opera in the person of the Länder of Bavaria. They argued that the staging transformed the end of the work so much that it had distorted it and thus had violated the moral rights of the authors. Under Article L. 121-1 of the French intellectual property code, authors of an original work have a moral right over it, which is perpetual and transferable upon death.
The Tribunal de Grande Instance in Paris rejected the request of the heirs in 2014, concluding that the changes made by the staging were not a distortion violating the moral rights of the authors.

On appeal, by the heirs, the Länder of Bavaria argued that neither the libretto nor the music had been changed, and that only the staging, as performed by the singers during the last scene of the opera, had been modified. The Länder further argued that Mr. Chernyakov’s staging had conferred to the work “a more universal significance and is consistent with the spirit of the original work, since it respects its essential theme, which is hope.” One of the DVD producers argued that the appellants themselves had recognized in their conclusions that neither the libretto nor the music had been modified by the staging, and, that therefore, “the debate is outside the moral right and the legal debate, but is about the interpretation of the work and the artistic and historical controversy.”

The Court of Appeal stated:

“that if some freedom can be granted to the director performing his staging, this freedom is limited by the moral rights of the author and respect for his work, his integrity and his mind, and that this should not be distorted.”

The Court of Appeals admitted that the final scene of the opera as directed by Mr. Tcherniakov does not change the dialogue which is not even spoken during the final scene, nor the music, as the orchestra dutifully played each sound of the falling guillotine even though there was no guillotine on stage. However, the Court noted that these changes are “enigmatic or incomprehensible, or imperceptible to the neophyte.”

For the Court, even if Mr. Tcherniakov’s staging respected the central themes of the opera, which are hope, martyrdom and the transfer of grace, “it profoundly changes the end of the story as intended by [the authors] (…) and is the climax of the story, magnified in Poulenc’s opera, where text and music come into perfect harmony.” The Court of Appeals concluded that the staging had distorted the spirit of the work.

The sale of the DVD is now banned in France, but the heirs have not obtained the complete prohibition of the representation on other stages. This must be welcomed, as it would be dangerous for freedom of expression, particularly freedom of artistic expression, if moral rights could thus become a universal instrument of censorship.

This post was originally published on The 1709 Blog.

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Pas d’atteinte au droit à l’image pour une photo prise dans le cadre professionnel

September 21, 2015 · by ·

Un policier municipal, Mr. Jean-Philippe L., avait été photographié à deux reprises en mars 2012 lors des journées d’échange avec l’école nationale de sûreté de la SNCF. Ces photos avaient ensuite été publiées sur un site internet de la SNCF sans que Mr. L. ait autorisé cette publication. Elles furent retirées à la demande de Mr. L., mais la SNCF refusa sa demande d’indemnisation, estimant que le policier n’avait subi aucun préjudice.

Mr. L. assigna la SNCF aux fins de la condamner à 5000 euros en réparation du préjudice qu’il estimait avoir subi pour atteinte à sa vie privée, telle que …read more

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Publication: biens numériques et biens numériques post mortem

September 17, 2015 · by ·

Les Presses Universitaires d’Aix-Marseille viennent de publier L’ordre public numérique. Libertés, Propriétés, identités. J’ai eu le plaisir d’écrire deux des chapitres de ce livre, Les biens virtuels dans les mondes numériques et Le statut post mortem des données accumulées par les personnes sur Internet et sur les réseaux sociaux. La table des matières complète est disponible ici.

Selon le site des PUAM :

L’hypothèse promue par le présent volume est que l’expertise des risques et des menaces pour les libertés et les propriétés des personnes physiques et morales dans le contexte de la révolution numérique pose, spécialement aux juristes, un …read more

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Don du Sang & Homosexualité : Légalité de la Conservation des Données Sans le Consentement du Donneur

September 11, 2015 · by ·

La Chambre criminelle de la Cour de cassation a

Laurent X. souhaitait faire don de son sang en 2004, mais ce don fut refusé par l’hôpital Saint-Louis de Paris en raison de l’homosexualité du donneur. Un autre établissement hospitalier de la capitale refusa également le don en 2006, expliquant à Mr. X. qu’il était référencé sous le code ” FR 08correspondant à la catégorie ” homosexuel.

Mr. X. déposa plainte pour discrimination à raison de l’orientation sexuelle, réprimé par les articles 225-1 à 225-3 du Code pénal. Le juge d’instruction rendit une ordonnance de refus d’informer, car, selon lui, le don …read more

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Le Scoop Qui N’en Était Pas Un, Mais Qui Porta Atteinte à la Vie Privée d’un Célèbre Acteur

August 6, 2015 · by ·

Le magazine OOPS avait publié en mai 2015 un reportage sur la prétendue relation amoureuse entre l’acteur Leonardo di Caprio et la chanteuse Rihanna, qui selon l’article, serait enceinte, au grand dam de l’acteur. Cette information était présentée sur la couverture du magazine comme un ” SCOOP OOPS ! avec un photomontage des deux célébrités côte à côte. La couverture avait été reproduite sur les affiches publicitaires du magazine, paru durant le Festival de Cannes, auquel Leonardo di Caprio s’était rendu.

L’acteur assigna OOPS en référé d’heure à heure devant le Tribunal de Grande Instance de Paris (TGI), arguant d’une atteinte …read more

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New York State Still Does Not Recognize Post Mortem Right to Publicity

July 21, 2015 · by ·

A New York Senate bill, S560-2015, introduced in May by State Senator John A. DeFrancisco, would provide a post mortem right of publicity to deceased New Yorkers’ estates for seventy years after their death. The bill explicitly refers to these rights as personal property, which can be freely transferrable or descendable, and thus are more akin to intellectual property rights than privacy rights. The Senate bill is the same as New York House bill A7904-2015 . It would be retroactive and “deemed to have existed at the time of death of any individual who died seventy years prior to the effective date of this [law.]”252919487_b6da302500_z

S550-2015 would introduce an article 3-A to New York civil rights law (NYCRL): the new section 32 of NYCRL would forbid the use in New York, for commercial purposes, of the persona of any deceased individual without first obtaining the written consent of the person or persons owning more than fifty percent of the deceased person’s publicity rights. Even though the justification of the bill notes that the “bill provides for a “right of publicity” for deceased personalities,” (my emphasis) the bill only mentions “deceased individuals,” defined as “any natural person who died a domiciliary of the State of New York on or after, or within seventy years prior to the effective date of [the law.]” and so it seems that everybody, famous or unknown, would benefit from this right.

Bill Drafted to Respect First Amendment

However, no consent would be required if the use is not an “advertisement, endorsement or solicitation for the sale of purchase of a product, article or merchandise, good or service, other than for the work itself and the work does not contain an image or likeness that is primarily commercial, not transformative and is not otherwise protected by the First Amendment of the United States Constitution or New York State Constitution” (Section 34).

The bill lists uses protected by the First Amendment. They are: “a play, book, graphic novel or other literary or theatrical work; a work of political or newsworthy value concerning public interest, including a television broadcast or an article, editorial or commentary in a magazine, newspaper, newsletter or other periodical; an original musical composition, musical sound recording or other similar musical work; or an original work of fine art or a work of fine art reproduction.”

A “work of fine art” is broadly defined by Section 30-5 as “a visual rendition including, but not limited to, a painting, drawing, sculpture, mosaic, videotape or photograph; a work of calligraphy; a work of graphic art including, but not limited to, an etching, lithograph, serigraph, or offset print; a craft work in materials including, but not limited to, clay, textile, fiber, wood, metal, plastic or glass; or a work of mixed media including, but not limited to, a collage, assemblage, or work consisting of any combination of [work of fine arts as defined in Section 305]”.

Therefore, artists would be authorized to use the likeness of a deceased personality to create new works, and the list of what would be considered to be fine art is an open one. The bill uses the soon to be archaic “videotape” word, which could, however, be interpreted as encompassing digital videos and probably even holograms. Reviving dead celebrities by holograms is becoming a lucrative commercial venture, but artists could also create holograms of deceased celebrities.

A Broad (Overbroad?) Definition of Persona

The bill defines “persona” as “the name, portrait, picture, voice, signature, photograph, image, likeness or distinctive appearance, gesture, mannerisms or other indicia of a deceased individual” (Section 30-4). This definition of persona is broader than the current definition by NYCR §50 of what is protected by New York right to publicity, that is, an individual’s name, portrait or picture. Readers of the IPKat blog may remember that Lindsay Lohan tried last year to convince a New York court that a video game had infringed her rights to publicity when depicting a blonde woman making the “V” sign, as Ms. Lohan is sweet on doing. But this pose is favored by many teenagers and teenagers alike when taking selfies. Would such a pose be considered a “mannerism an “indicia” protected by the post mortem right to publicity?

No Moral Rights

The bill does not provide any moral right, and this is not surprising as the U.S recognizes only very limited moral rights. Not providing moral rights is, of course, protective of freedom of expression, yet may lead to tensions and possibly lawsuits if a use, otherwise authorized by the new law, would be considered by the right holders as tainting the memory of the deceased. Such tainted use could be pornographic or presenting ideas which were repulsive to the celebrity during her lifetime. However, such uses would likely to be found protected by the First Amendment, unless commercial.

As the New York Senate has concluded its business for its 2015 regular session, this bill will not be enacted this year. It is not the first time that a New York bill providing for a post mortem right to publicity has failed to be enacted, but as some celebrities are now earning millions of dollars years after their demise, New York is likely to eventually join California and other the states which already have post mortem right to publicity statutes. Let’s wait and see what 2016 will bring in Albany.

Image is courtesy of Flickr user Jan Tik under a CC BY 2.0 license.

This post was originally published on The 1709 Blog.

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Did you RT a © today? Photographer Sues Infringers and Retweeters

July 14, 2015 · by ·

A photographer is suing a beverage company which allegedly used without permission one of his photographs on social media. The case is interesting, as the photographer chose to sue not only the company and its employees and contractors, but also the social media users who republished the photograph on social media, by a retweet, or a pin. The case is Dennis Flaherty v. Big Red, 1:15-cv-00566.Dennis Flaherty (Plaintiff) is a professional photographer, living in California. He claims that beverage company Big Red (Defendant) used without permission one of his photographs representing Fort Alamo at night, or a “near perfect copy” of it, to create social media postings marking the 179th anniversary of the Battle of the Alamo, which ended on March 6, 1836. Big Red is located in Texas and thus the photograph “conveys a meaning and a direct relationship” with its place of business. Plaintiff owns the copyright of the photograph and registered it with the Copyright Office.16358615653_6305c3e39a_z

Defendant allegedly added a watermark or logo of BIG RED on the photograph before posting it online and Plaintiff claims that, as such, Defendant placed its registered trademark on the photograph. Plaintiff provided screenshots of alleged social media use of this photograph by Defendant (see here for screen shot of use on Twitter and on Facebook). They show images of Fort Alamo at night, identical or very similar to Plaintiff’s own photograph, with some slight modifications such as deleting a flag pole. Plaintiff is seeking  statutory damages for copyright infringement.

Posting on Social Media as Vicarious Infringement

Plaintiff is also suing John Does, employees or contactors of Big Red who were in charge of creating, monitoring, controlling and editing these social accounts, for vicarious copyright infringement, which “occurred because Defendants have or had a right and ability to supervise the infringing act, and received a benefit or a direct financial interest therefrom.” The complaint alleges that Defendants “received a direct financial benefit” from the infringing use of the photograph, as at was used to “draw…. customers, third parties, internet users, followers… to Defendants business activities.” Plaintiff is seeking actual, or, alternatively, statutory damages for vicarious infringement.

Retweeting as Contributory Infringement

Plaintiff also claims that Defendants induced copyright infringement by distributing the photograph to third parties, that is, social media users who retweeted, pinned or liked the original social media post containing the infringing photograph. Plaintiff claims that, as such, they “stood in the shoes of the Plaintiff and licensed the image to Twitter,” citing Twitter’s Terms of Service which provide that by submitting content, users provide Twitter with a royalty-free license, thus allowing the social media site to make one’s tweets “available to the rest of the world and let others do the same.” Plaintiff is seeking actual, or, alternatively, statutory damages, for contributory infringement as well.

It is very unlikely that Plaintiff will be awarded any damages from any social media user. Plaintiff claims that the contributory infringement was intentional, but proving that it is would be impossible. As noted by Plaintiff himself, the photograph bore the Big Red trademark. As such, social media users were likely to believe that the use was legal, even if they knew that the copyright of the photograph was owned by Plaintiff, as he could very well have licensed it.

But this case got me thinking about copyright small claims courts. If such courts are ever established in the United States, would copyright owners sue social media users who had republished infringing material? Let’s say that social media users would ‘only’ face, for instance, a $50 fee awarded in a small claim court for having retweeted or pinned infringing material. Granted, only people posting under their real name could effectively be sued. But Facebook has a “use only your own name” policy, which is enforced, and many Pinterest or Twitter users post under their real name as a way to promote themselves and to build relationships and contacts. Fearing that retweeting a particular tweet may or may not lead to a fee would certainly have a chilling effect on speech, especially if the fees start to add up. Retweeting an ad may not necessarily contribute much to the marketplace of ideas, but the ad in our case meant to commemorate an historical event, and showcased one of the most famous U.S. monuments.

However, some may argue that having a way to make social users pay a fee for unauthorized use of protected work may eventually lead to people thinking twice before using images found online. The debate is likely to heat up if the issue of copyright small claims courts takes central stage in Congress (not likely for now).

Image is courtesy of Flickr user Jerry Huddleston under a CC BY 2.0 license.

 

This blog post was originally published on The 1709 Blog.

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Delfi v. Estonia: Ice Roads and Chilling Effect at the European Court of Human Rights

July 6, 2015 · by ·

The Grand Chamber of the European Court of Human Rights (EC3090121882_f6eb44f941_zHR) held on June 16, 2015 that the freedom of expression of an Estonian news portal had not been infringed when found liable for defamatory comments posted by third parties on its site. The case is Delfi AS v. Estonia, and has sent ripples online as many fear it signals that the Strasbourg Court may favor protection of reputation over online freedom of speech.

Delfi is one the largest Internet news portals in Estonia and publishes hundreds of news articles every day. At the time of the facts of the case, visitors could leave comments which were automatically uploaded on the site. Delfi did not edit or moderate them, but had a notice-and-take down system which allowed visitors to mark comments as being insulting or hatred-inciting. The system also automatically deleted comments with obscene words.

Delfi published in January 2006 an article about SLK, an Estonian ferry company, claiming that SLK had destroyed public ice roads, used for free in the winter to cross the frozen sea between the Estonian mainland and some islands instead of having to take a ferry. While the article itself was balanced, it triggered 185 comments in two days, 20 of which were offensively derogatory or even threats against L., SLK’s sole shareholder. L.’s attorneys requested Delfi to remove these comments, which it did in March 2006, but refused to pay some 32,000 Euros for damages, as requested by L.

  1. filed a civil suit against Delfi, which was dismissed as the County court found the news portal to be sheltered from liability by the Estonian Information Society Services Act, based on the Directive 2003/31/EC (the e-Commerce Directive). This directive exempts from liability, whether it is copyright infringement or defamation, information society service providers acting as a mere information conduit.
  2. appealed, won, and the case was remanded to the County Court which ruled this time in favor of L., finding the Information Society Services Act inapplicable and holding Delfi to be the publisher of the comments. The Estonian Supreme Court dismissed Delfi’s appeal, reasoning that Delfi was a content provider, not an information society service provider, because it had “integrated the comments environment into its news portal, inviting visitors to the website to complement the news with their own judgments … and opinions”

Delfi then set up a team of moderators in charge of reviewing comments and deleting inappropriate ones, and applied to the European Court of Human Rights (ECHR), claiming that holding it liable for comments posted by third parties on its web site violated its freedom of expression as protected by article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention). The Court found unanimously in October 2013 that article 10 had not been violated [I wrote about the judgment here]. The case was then refereed to the Grand Chamber.

Liability Exemption Provided by the e-Commerce Directive

Recital 44 of the e-Commerce Directive states that “[a] service provider can benefit from the exemptions for ‘mere conduit’ … when he is in no way involved with the information transmitted.” Article 12.1 of the Directive explains that a provider is a “mere conduit” if it did not initiate the transmission, did not select its receiver and did “not select or modify the information contained in the transmission.”

Indeed, Article 14 of the e-Commerce Directive gives providers a safe harbor from liability for information stored at the request of a recipient of the service if it did not have actual knowledge of the illegal activity and if it “expeditiously” removed or disabled access to the information. Providers, however, do not have a general obligation to monitor information they transmit or store nor do they have “a general obligation actively to seek facts or circumstances indicating illegal activity” (e-Commerce  Directive Article 15).

The Supreme Court had found Delfi to be a publisher because it had “integrated the comments environment into its news portal, inviting visitors to the website to complement the news with their own judgments and opinions… [and it] has an economic interest in the posting of comments” (§ 13). Also, Delfi “can determine which of the comments added will be published and which will not be published.” Because Delfi “governs the information stored in the comment environment, [it] provides a content service.” The Supreme Court added that “[p]ublishing of news and comments on an Internet portal is also a journalistic activity”(§ 31).

User-Generated Content, Unprotected Speech and Democracy

Delfi argued that user-generated content (UGC) is of high importance as it often raises “serious debates in society and even informed journalists of issues that were not publicly known” (§ 66). The Court acknowledged this, but pointed out that the Internet allows defamatory and hate speech to be disseminated “in a matter of seconds and sometimes remain persistently available online” adding that “[t]hese two conflicting realities lie at the heart of this case” (§ 110).

The Grand Chamber seemed to attach great importance to the fact that some comments were defamatory, as it further stated that “the risk of harm posed by content and communications on the Internet to the exercise and enjoyment of human rights and freedoms, particularly the right to respect for private life, is certainly higher than that posed by the press (§ 133) and “reiterat[ed] that the right to protection of reputation is a right which is protected by Article 8 of the Convention as part of the right to private life” (§ 137). The Grand Chamber noted that most of the comments published about L. “amounted to hate speech or incitements to violence,” even though only 20 comments over the 185 were offensive (§ 17).

These 20 comments are not protected by Article 10 and thus “the freedom of expression of the authors of the comments is not at issue in the present case” (§ 140). However, one can argue that their freedom of expression has indeed been violated, as their comments were deleted by Delfi and the Estonian Courts found their deletion to be necessary. In his concurring opinion, Judge Zupančič even wrote that “it is completely unacceptable that an Internet portal or any kind of mass media should be permitted to publish any kind of anonymous comments” (Zupančič concurring opinion p.45), a rather surprising statement from a human rights judge, as the right to speak anonymously is a beacon of democracy.

No Violation of Article 10

Article 10 §1 provides for a general right to freedom of expression, which can, however, be restricted under Article 10 §2 as prescribed by law and if “necessary in a democratic society” for various reasons, amongst them protection of the reputation of a third party. Delfi argued that requiring it to monitor third-party content was interference with its freedom of expression which was not “prescribed by law” and was not necessary in a democratic society. It argued further that the Supreme Court judgment had a “chilling effect” on freedom of expression (§ 73).

The Grand Chamber found this interference was indeed prescribed by law, as it was “foreseeable that a media publisher running a Internet news portal for an economic purpose could, in principle, be held liable under domestic law for the uploading of clearly unlawful comments” (§ 128).

The Grand Chamber also found this interference to be “necessary in a democratic society,” which implies, under well settled ECHR case law, that there is a “pressing social need,” the existence of which can be assessed by Member States with “a certain margin of appreciation.” The ECHR only reviews if the interference is “proportionate to the legitimate aim pursued” and if the reasons set forth by the Member State for such interference are indeed “relevant and sufficient” (§ 131).

In order to assess whether the Estonian courts had breached Article 10 of the Convention, the Grand Chamber examined the context of the comments, the liability of the author of the comments as an alternative to Delfi’s responsibility, and the measures taken by Delfi to prevent or remove these comments, and the consequences of the domestic proceedings for Delfi.

The Grand Chamber first examined the context of the comments, acknowledging that the article published by Delfi was balanced, but that such an article may nevertheless “provoke fierce discussions on the Internet” (§ 144). The authors of the comments could not modify or delete them after having posted them; only Delfi “had the technical means to do this” and thus its involvement “went beyond that of a passive, purely technical service provider”(§ 146).

The Grand Chamber then examined then if the liability of the authors of the comments could serve “as a sensible alternative to the liability of the Internet news portal.” The Court was “mindful of the interest of Internet users in not disclosing their identity.” However, this right “must be balanced against other rights and interests.” The Grand Chamber cited the famous Court of Justice of the European Union (CJEU) Google Spain and Google “right to be forgotten” case, noting that the ECJ “found that the individual’s fundamental rights, as a rule, overrode the economic interests of the search engine operator and the interests of other Internet users” (§ 147). The Grand Chamber also cited K.U. v. Finland, where the ECHR held it was not sufficient that the victim of an online crime could obtain damages from the service provider, but must also be able to obtain reparation by the author of the crime”(§ 149), and Krone Verlags GmbH & Co. KG v. Austria , where the ECHR found that shifting the risk of the defamed person obtaining redress to the media company was not a disproportionate interference with the media company’s freedom of expression (§ 151).

As for the measures taken by Delfi, the Grand Chamber first noted that it was not clear whether the Supreme Court held that Delfi had to prevent the posting of unlawful comments or if removing them quickly would have been enough not to be found liable. The Grand Chamber decided that the latter interpretation was the correct one, and that this legal requirement was not a disproportionate interference with Delfi’s freedom of expression” (§ 153). In a joint concurring opinion, Judges Raimondi, Karakas, De Gaetano and Kjølbro noted that interpreting the Supreme Court as having held that Delfi had to entirely prevent postings of unlawful comments “would in practice imply that the portal would have to pre-monitor each and every user-generated comment in order to avoid liability or any unlawful comments. This could in practice lead to a disproportionate interference with the news portal’s freedom of expression” (Raimondi concurring opinion § 7). However, Delfi was found to be required to ‘post-monitor’ each of the comments posted on its site, and this can also lead to a disproportionate interference with its freedom of expression!

The systems put down in place by Delfi, the notice and take-and the automatic deletion of some vulgar words, indicate that it had not completely neglected its duties to avoid causing harm to third parties. They had failed, however, to prevent “manifest expressions of hatred and blatant threats to the physical integrity of L.” (§ 153). The Grand Chamber concluded that Member States could “impose liability on Internet news portals, without contravening Article 10 of the Convention, if they fail to take measures to remove clearly unlawful comments without delay” (§ 159).

Finally, the Grand Chamber found that the fine imposed on Delfi was not disproportionate to the breach, considering it is the largest news portal in Estonia. Also, Delfi did not have to change its business model after having been sued by L.

For all these reasons, the Grand Chamber found that imposing a liability on Delfi for comments posted on its portal was not a disproportionate restriction to its freedom of expression”(§ 162).

The Fuzzy Scope of this Case

The Court established the scope of this case to be about the “duties and responsibilities of Internet news portals, under Article 10 §2… when they provide for economic purposes a platform for user-generated comments on previously published content and some users … engage in clearly unlawful speech” (§ 115), but stated that the case was not about other forums on the Internet such as a discussion forum or a bulletin board “where users can freely set out their ideas on any topics without the discussion being channeled by any input from the forum’s manager; or a social media platform where the platform provider does not offer any content and where the content provider may be a private person running the website as a blog or a hobby (§ 115).

This is an important distinction. However, the Court was not clear enough in its explanation of which online forum is considered a publisher under Delfi. It seems that the Court attached great importance to Delfi benefiting financially from the number of comments posted on its site, including comments which may be defamatory. But a social media platform may also benefit from the numbers of users, whether or not they are actively engaged. For example, a person can visit Facebook or Twitter to read posts, but not post anything herself, but is still considered an as active user because she logged in, and this contributes to the financial value of the site. The same goes for blogs, which count the number of visits and clicks to gauge success, but not necessarily the number of comments. Of course, a social media site which users are not also actively posting and creating content is doomed to fail.

In their dissenting opinion, Judges Sajó and Tsotsoria wrote that requiring “active Internet intermediaries,” which they defined as hosts providing their own content and which open their intermediary services for third parties to comment on that content, to have constructive knowledge on content posted “is an invitation to self-censorship at its worst.” They also noted that “[g]overnments may not always be directly censoring expression, but by putting pressure and imposing liability on those who control the technological infrastructure (ISPs, etc.), they create an environment in which collateral or private-party censorship is the inevitable result.” For Judges Sajó and Tsotsoria, “Internet is more than a uniquely dangerous novelty. It is a sphere of robust public discourse with novel opportunities for enhanced democracy” (Sajó and Tsotsoria dissenting opinion p. 46).

Judges Sajó and Tsotsoria further noted that active intermediaries are now obliged to remove unlawful content “without delay” after publication and find it to be prior restraint. However, prior restraint is censorship before publication. Here, the Grand Chamber favored a system where comments can be freely published, but must be deleted by the site if found to be defamatory or hateful. As such, the Grand Chamber did not promote a notice and take down system, when it is the victim who puts the site on notice, but rather gave intermediaries a general responsibility to expeditiously censor any illegal speech published in their sites. Such a responsibility may give rise to a general corporate censorship over the Web, and significantly chill online speech. The Strasbourg Court took, indeed, an icy and slippery road.

(Image courtesy of Flickr user ThreeIfByBike pursuant to a Creative Commons CC BY-SA 2.0 license.)

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