Blog Marie-Andree Weiss

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

July 6, 2015 · by marie-andree@maw-law.com ·

The Grand Chamber of the European Court of Human Rights (ECHR) 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.

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.
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.)

Filed Under: Free Speech, Internet Law · Tagged: Defamation, e-Commerce Directive, European Court of Human Rights, Free Speech, ISPs, User-Generated Content

Paris Court Denies Copyright Protection to Jimi Hendrix Photograph

July 2, 2015 · by marie-andree@maw-law.com ·

Gered Mankowitz is a British photographer who photographed many famous musicians such as Mick Jagger and Annie Lennox. He took several photographs of Jimi Hendrix in 1967. One of these photographs represents the musician, wearing a military jacket, holding a cigarette and puffing a cloud of smoke while looking at the photographer. An original print recently sold at auction for £2,750.

This photograph was used without authorization in 2013 for an advertising campaign by Egotrade, a French electronic cigarette company. The ad showed Jimi Hendrix holding an electronic cigarette and the “Egotabaco” brand was printed on the ad.

Gered Mankowitz and Bowstir Ltd, the company to which Mr. Mankowitz has assigned his patrimonial rights to the photography, filed suit in France. Bowstir claimed copyright infringement and Mr. Mankowitz claimed droit moral infringement. On May 21, the Paris Tribunal de Grande Instance (TGI), a court of first instance, ruled that the Jimi Hendrix photograph could not be protected by French intellectual property law, as it was not original.

French intellectual property law does not provide a definition of “originality.” Article L. 111-1 of the French Intellectual Property Code provides that “[t]he author of a work of the mind shall enjoy in that work, by the mere fact of its creation, an exclusive intangible property right enforceable against all. This right shall include attributes of intellectual and moral attributes as well as patrimonial attributes.” Article L. 112-1 specifies that the law “protects the rights of authors in all works of the mind, whatever their kind, form of expression, merit or purpose.”

The TGI cited the European Court of Justice (ECJ) Eva Maria Painer. v. Standard Verlags case, where the Court had discussed the originality of a picture taken by a school photographer. For the ECJ, which the TGI cited verbatim,

“[a]s stated in recital 17 in the preamble to Directive 93/98, an intellectual creation is an author’s own if it reflects the author’s personality. That is the case if the author was able to express his creative abilities in the production of the work by making free and creative choices. … As regards a portrait photograph, the photographer can make free and creative choices in several ways and at various points in its production. In the preparation phase, the photographer can choose the background, the subject’s pose and the lightening. When taking a portrait phoograph, he can choose the framing, the angle of view and the atmosphere created. Finally, when selecting the snapshot, the photographer may choose from a variety of developing techniques the ones he wishes to adopt or, where appropriate, use computer software. By making those various choices, the author of a portrait photograph can stamp the work created with his ‘personal touch’” (ECJ 88-92).

Indeed, Recital 17 of Directive 93/98/EEC states that a photograph is original “if it is the author’s own intellectual creation reflecting his personality, no other criteria such as merit or purpose being taken into account.” Article 6 of the same Directive states that photographs are original if “they are the author’s own intellectual creation.” This directive was repealed by Directive 2006/116/EC, of which Recital 16 reprises the same words than Recital 17.

The TGI then examined the Jimi Hendrix photograph. Gered Mankowitz had explained to the court that

“this photograph of Jimi Hendrix, as extraordinary as it is rare, succeeds in capturing a fleeting moment of time, the striking contrast between the lightness of the artist’s smile and the curl of smoke and the darkness and geometric rigor of the rest of the image, created particularly by the lines and angles of the torso and arms. The capture of this unique moment and its enhancement by light, contrasts and the narrow framing of the photograph on the torso and head of Jimi Hendrix reveal the ambivalence and contradictions of this music legend and make the photograph a fascinating work of great beauty which bears the stamp and talent of its author.”

This argument did not convince the TGI as Mr. Mankowitz,

“as doing so, satisfied himself by highlighting the aesthetic characteristics of the photography which are distinct from its originality which is indifferent to the merit of the work, and does not explain who the author of the choices made regarding the pose of the subject, his costume and his general attitude. Also, nothing [in this argument] allows the judge and the defendants to understand if these elements, which are essential criteria in assessing the original features claimed, that is, the framing, the use of black and white, the light decor meant to highlight the subject, and the lighting being themselves typical fora portrait photography showing the subject facing, with his waist forward, are the fruit of the reflection of the author of the photograph or the subject, and if the work bears the imprint of the personality of Mr. Mankowitz or of Jimi Hendrix.”

Since the judges are therefore not able to appreciate whether this photograph is indeed original, the TGI ruled hat the photography lacked the originality necessary for its protection by French law, and that “the failure of the description of the characteristic elements of the alleged originality also constitutes a violation of the principle of defense rights.” The TGI thus concluded that Mr. Mankowitz had no intellectual property rights over the photograph.

By doing so, the TGI did not deny that this particular photography of Jimi Hendrix is not original. Rather, the court was not convinced that originality of the work was the result of choices made by Mr. Mankowitz. This case is less about what is an original work than how to prove that a work is indeed original.

As such, this ruling should give pause to French IP practitioners defending the rights of a photographer, as they must now prove why the author chose the different elements of a photograph and how these choices reflect his personality in such a way that the work is original. However, the case will be appealed, and so the debate on what is an original work, and how to prove, it is still ongoing in France.

Image is courtesy of Flickr user SarahElizabethC under a CC BY-ND 2.0 license.

This post was originally published on The 1709 Blog.

Filed Under: French Copyright · Tagged: Copyright and Photography, French Copyright

French Highest Court “Casse” in Foldable Bag Copyright Infringement Case

July 1, 2015 · by marie-andree@maw-law.com ·

This post is about a recent French case which shows that, while French copyright law protects original handbags, explaining what exactly makes a bag original has to be carefully worded, by the parties of course, but for the courts as well. The Cour de cassation, France highest civil court, “broke” (‘casser’) a holding of the Paris Court of appeals which, after having listed the various elements which made a bag original, found no copyright infringement of this bag evenwhile referring to other original elements of the bag.

Longchamp is a French bag and accessories company. Its most famous model is the Pliage bag, a nylon bag which can be folded to fit in a smaller bag (pliage means ‘folding’ in French). Its success led to the creation of a whole range of Pliage bags, which are now available in nylon and leather, may or may not be foldable, and can even be personalized.

Longchamp discovered in 2010 that bags similar to its Pliage bag were sold online. The company and the original designer of the bag sued the seller and the manufacturer of the bags sold online for copyright infringement. The court of first instance, the Tribunal de Grande Instance de Paris (TGI) rejected their claims. For the TGI, the Pliage bag was indeed protectable, but the defendants had not infringed on any of the plaintiff’s rights. Plaintiffs appealed, but the Paris Court of Appeals confirmed the judgment on September 13, 2013. Longchamp and the Pliage bag designer then took their case to the Cour de cassation.

The Pliage bag is indeed famous. Plaintiffs even claimed on appeal that it is the most copied bag in the world. Appellees did not dispute the originality of the Pliage bag, but argued instead that, because the bag was an original combination of several mundane elements, only this original combination could be protected by copyright, not the separate elements. They further argue that the Pliage bag was a combination of elements ordinarily used by every bag designer, and specific, original characteristics, “namely the specific form of the flap highlighted by the thick stitched sewing, the gold button [closing the snap], highly visible seams on all sides of the leather elements, the combination of brown leather stitched with other materials, and specific proportions.”

The Court of Appeals agreed that the Pliage bag is original, as it combines these elements:

– small flap with snap, located between the two handles and a cap portion of the zipper;

– slightly rounded shape of this little flap, highlighted by a thick stitched sea

– sewing stitches on the front of the bag, in the extension of the flap and evoking the outline of the inner bag;
– affixing of the flap on the back of the bag by a double stitched seam;
– two handles finishing by rounded edges affixed on each side of the bag opening by affixed tabs;
-two small rounded tabs on each end of the zipper which highlight the top corners of the bag, curving upward;
– the trapezoidal shape of the body, seen from the front;
– the rectangular bottom and
– the triangular profile.

The Court of Appeals then compared the Pliage bag with the allegedly counterfeiting bag and did not find it infringes on Pliage. To come to this conclusion, the Court of Appeals noted that the Appellee’s bag had a wider flap, did not feature stitched seams and did not have a small gold button to snap close the front flap. Also, both flaps had different shapes, and the stitches of Appellee’s bag used the same color than the bag’s overall material, whereas the bag’ s stitches contract in color with the body of the bag. The handles of Appellee’s bag did not feature stitches, and the ending part of the handles had a different shape. Also, both bags had different shape, rectangular for Appellee’s bag and trapezoidal for the Pliage bag.

The Court of Appeals noted that Appellee’s bag would have been counterfeiting the Pliage bag if it had used “the distinguishing characteristics of the combination of Longchamp bag model: the specific form of the flap emphasized by the thick stitched sewing, gold button, highly visible seams on all leather parts, the alliance of brown leather stitched with other materials and colors, the specific proportions, which are the dominant elements of the combination giving the model its originality.”

The Court of Appeals found that Appellee’s bag had “its own physiognomy, a particular aesthetic bias which alter the overall visual impression of this model as compared to the Longchamp bag, which precludes any risk of confusion, especially since the discriminating consumer of the famous Longchamp bag would immediately perceive these differences.” Somehow, the right holders of a famous bag would have to meet an even higher burden of copyright infringement proof because their work is famous.

But the Cour de cassation found that, by this ruling, the Court of Appeals had violated article L. 122-4 of the French IP Code, which makes it illegal to reproduce fully or partially a protected work without authorization of the right holder. For the high court, “the existence of a golden button, the alliance of brown leather stitched with other materials and colors, and the « specific proportions » [of the bag] were not the elements that the Court had chosen to assess the originality of the bag, and also, the existence of a likelihood of confusion is irrelevant to the characterization of the infringement of copyright.”

This last phrase is a welcome addition to the French fashion copyright attorney’s toolbox, especially when defending the rights of famous bags, such as the Pliage, or, say, the Birkin, which would otherwise have to convince courts that the sophisticated clientele would never take a $75 plastic Birkin for the real McCoy. French Copyright does not serve as an indication of the source, but, rather, protects the patrimonial and moral rights of the author of the work.

Image is courtesy of Flickr user Maurina Rara under a CC BY 2.0 license.

This article was first published on The 1709 Blog

Filed Under: Fashion Law, French Copyright · Tagged: Fashion Law, FrenchCopyright

Ninth Circuit Panel Held that California Resale Act Violates Dormant Commerce Clause

May 28, 2015 · by marie-andree@maw-law.com ·

Several artists and estates of artists filed three separate class action suits in 2011 against two auctions houses, Christies and Sotheby’s, and with the online retailer and auctioneer eBay, alleging that they had failed to pay them royalties on sales of fine arts, as required by the California Resale Royalty Act, Cal. Civ. Code § 986(a), (CRRA).

Defendants had moved to dismiss, arguing that the CRRA violated the “dormant” Commerce Clause of the U.S. Constitution. The Central District Court of California granted Defendants ‘motion to dismiss in 2012, holding that the CRRA impermissibly violates out-of-state conduct, and thus violates the “dormant” Commerce Clause. On May 5, 2015, an en banc panel of the Ninth Circuit held that the CRAA indeed violates the “dormant” Commerce Clause.

The California Resale Royalty Act

The California Resale Royalty Act (CRRA), Cal. Civ. Code § 986(a), requires that sellers pay the author of the work sold a five percent royalty if the work is a work of fine art, that is, “an original painting, sculpture, or drawing, or an original work of art in glass.”The CRAA applies if the work is sold in California, or if the seller resides in California, or if the sale takes place in California. This type of royalties scheme is also known as droit de suite, and aims at giving artists and their heirs a way to profit from the rising market value of the work. Indeed, the heirs of a deceased artist can assert the artist’s rights for 20 years after the artist’s death, § 986(a)(7). However, sales below $1,000 and those involving an artist who died before 1983 are out of the scope of the CRRA.

The Dormant Commerce Clause of the U.S. Constitution

The Commerce Clause of the United States Constitution, Article I, §8, gives Congress the power to regulate commerce among the several States. This article has been interpreted by the Supreme Court as restricting the States from discriminating or burdening unduly interstate commerce, and this negative aspect of the Commerce Clause, as it limits the power of the States, is referred to as the “dormant” Commerce Clause.

The CRRA, § 986(c)(1), defines an “artist” as “the person who creates a work of fine art and who, at the time of resale, is a citizen of the United States, or a resident of the state who has resided in the state for a minimum of two years” and thus applies to all artists who are U.S. citizens, regardless of the state in which they reside, or to aliens who have resided in California for at least two years.

The Ninth Circuit gave as an example a sale, which would take place entirely outside of California, but which would nevertheless be within the scope of the CRAA, as a sale where “a California resident has a part-time apartment in New York, buys a sculpture in New York from a North Dakota artist to furnish her apartment, and later sells the sculpture to a friend in New York” noting , that, in this case, the CRRA “requires the payment of a royalty to the North Dakota artist—even if the sculpture, the artist, and the buyer never traveled to, or had any connection with, California.” The Court thus, “easily conclude[d] that the royalty requirement, as applied to out-of-state sales by California residents, violates the dormant Commerce Clause” (p. 8), as the CRAA “facially regulates a commercial transaction that takes place wholly outside of [California]’s border”(p. 9). However, the Ninth Circuit found that the CRAA’s provision offending the Commerce Clause can be severed from the remainder of the Act.

s the District Court had found that the CRAA violated the dormant Commerce Clause per se, and that the entire Statute had therefore to be stricken down, it had not addressed Defendant’s two additional arguments, the CRAA’s preemption by the Copyright Act and that it was a taking of private property in violation of the United States and California Constitutions. Therefore, the Ninth Circuit remanded the case to a three-judge panel for considerations of these remaining issues, leaving to the panel’s discretion the decision to address them on the merits or to remand them to the lower court.

This post was originally published in The 1709 Blog.

Filed Under: Copyright, Droit de Suite · Tagged: Dormant Clause, Droit de Suite, Ninth Circuit

TTAB: Fair Use Defense Not Successful in Trademark Dilution Cases if Defendant’s Use is Commercial

May 18, 2015 · by marie-andree@maw-law.com ·

On May 8, 2015, the Trademark Trial and Appeal Board (TTAB) sustained the New York Yankee’s opposition to the registration of three marks because they were likely to dilute by blurring some of the New York Yankees’ famous marks.

The case is interesting because the TTAB firmly stated that the fair use defense in trademark dilution cases, provided by the Trademark Dilution Revision Act, cannot succeed if Defendant’s use is commercial.

IET Products and Services, Inc. (Applicant) was seeking to register “THE HOUSE THAT JUICE BUILT” in class 25 for “T-shirts, baseball caps, hats, jackets and sweatshirts,” THE HOUSE THAT JUICE BUILT in class 21 for “Mugs”, and a design mark showing a top hat atop a syringe. As the TTAB did, we will consider THE HOUSE THAT JUICE BUILT to be one mark, regardless of the quote marks.

The New York Yankees (Opposer) claimed that these three marks were likely to cause dilution by blurring of its design mark featuring a top hat atop a baseball bat and THE HOUSE THAT RUTH BUILT mark.

Dilution by Blurring

Dilution by blurring is defined by Section 43(c)(2)(B) of the Trademark Act as an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” Such dilution can occur even in the absence of confusion or likelihood of confusion, Section 43(c)(1). It suffices that a substantial percentage of consumers are reminded of the famous mark when seeing the junior mark, even if they understand that the origin of the goods or services is not the famous mark.

The Court of Appeals for the Federal Circuit enumerated in Coach Servs. Inc. v. Triumph Learning LLC four factors which must be proven to prevail in a dilution by blurring claim:

(1) the plaintiff “owns a famous mark that is distinctive;

(2) the defendant is using a mark in commerce that allegedly dilutes the plaintiff’s famous mark;

(3) the defendant’s use of its mark began after the plaintiff’s mark became famous; and

(4) the defendant’s use of its mark is likely to cause dilution by blurring or by tarnishment.”

First Factor: Fame

Section 43(c)(2)(A) of the Trademark Act considers that a mark is famous “if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.” Courts may use four non-exclusive factors to determine if a mark is famous, which are:

The duration, extent, and geographic reach of advertising and publicity of the mark.
The amount, volume, and geographic extent of sales of goods or services offered under the mark.
The extent of actual recognition of the mark.
Whether a mark is registered.

The TTAB found the Top Hat Logo design mark of the New York Yankees to be famous for dilution purposes. The mark has been used for more than 50 years and is displayed at Yankees Stadium during the team home games, which have been broadcast on several national networks, such as ESPN or ABC, on the MLB Network. The mark has also been used in connection with sponsorship with other brands, such as Pepsi-Cola, and has been also used on apparel and on the Yankee’s uniforms.

The TTAB also found THE HOUSE THAT RUTH BUILT mark to be famous for dilution purposes. This mark refers to the original Yankee Stadium in New York, which was nicknamed as such after Babe Ruth joined the team in 1920, shortly after the opening of the stadium, and drew huge crowds there because of his slugging abilities and his huge personality. Opposer introduced as evidence some 2,600 newspaper articles published from 2000 to 2007 containing both “Yankees” and “the House that Ruth Built.” The TTAB found it to be “strong evidence not only that the public and press have come to view THE HOUSE THAT RUTH BUILT as an indicator of source for Opposer … but also that it is a famous mark.” The first dilution element is thus satisfied.

The TTAB found that Applicant used its mark in commerce, as an application based on intent to use a mark in commerce under Trademark Act Section 1(b) satisfies the commerce requirement under the Trademark Dilution Act, and thus the second dilution factor was satisfied. Under the third dilution factor, Opposer had to prove its marks became famous before Applicant filed its intent-to-use application. This was the case here, and the third dilution factor was satisfied. The marks were registered, and so the fourth factor was also satisfied, and the TTAB found both Opposer’s marks to be famous.

Fourth Factor: Whether Applicant’s Mark are Likely to Cause Dilution

The Trademark Act enumerates six non-exhaustive factors which a court may consider to determine whether a mark is likely to cause dilution by blurring. These factors are:

(i) The degree of similarity between the mark or trade name and the famous mark.

(ii) The degree of inherent or acquired distinctiveness of the famous mark.

(iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.

(iv) The degree of recognition of the famous mark.

(v) Whether the user of the mark or trade name intended to create an association with the famous mark.

(vi) Any actual association between the mark or trade name and the famous mark.

First Likely to Cause Dilution by Blurring Factor: Degree of Similarity between the Mark and the Famous Mark

When determining whether a mark is likely to dilute a famous mark by blurring, the TTAB does not conduct a Section 2(d) likelihood of confusion analysis, but, rather, examines the degree of similarity or dissimilarity of the marks, in their entireties as to appearance, connotation, and commercial impression, Research in Motion Ltd. v. Defining Presence Marketing Group Inc., 102 USPQ2d 1187, 1198 (TTAB 2012).

The TTAB found that the Applicant’s Top Hat and Syringe design mark does trigger consumers to conjure up Opposer’s famous Top Hat and Baseball Bat design mark. When the two marks are presented side-by-side, “[t]he overall similarity between the two design marks is immediately apparent. Each incorporates a circle and features a similarly patterned top hat resting atop a slender object leaning to the right.”

Applicant argued that its word mark was an “irreverent” version of Opposer’s word mark and “an expressive and jocular reference to the newsworthy and public issue of the use of performance enhancing drugs (“PEDS”) by Major League Baseball (“MLB” players – including players affiliated with Opposer’s baseball club”. For the TTAB, Applicant’s word was sufficiently similar to Opposer’s mark to triggered consumers to conjure up Opposer’s famous word mark.

Second Likely to Cause Dilution by Blurring Factor: Degree of Inherent or Acquired Distinctiveness of the Famous Mark

The TTAB found Opposer’s Top Hat design mark and word mark to be inherently distinctive, and thus this factor favored the New York Yankees.

Third Likely to Cause Dilution By Blurring Factor: Extent to Which the Owner of the Famous Mark is Engaging in Substantially Exclusive Use of the Mark.

The TTAB found no evidence of any third-party use of Opposer’s Top Hat design. Applicant had argued that Opposer’s work mark had already been diluted by seven other marks, such as THE HOUSE THAT FRIED CHICKEN BUILT or THE HOUSE THAT JACK BUILT and produced printouts of their registration and Internet printouts displaying these marks. However, the TTAB was not convinced as “[t]hird-party registrations are not evidence of use” and Internet printouts only prove the existence of these websites, not that the public may have been aware of the information there published. Also, Applicant did not introduce any evidence “as to the extent of the use and promotion by third parties of their HOUSE THAT _____ BUILT marks,” which is necessary to assess whether a particular use is so widespread that it does have an impact on consumer’s perceptions.

Fourth Likely to Cause Dilution by Blurring Factor: Degree of Recognition of the Famous Mark

The TTAB found this factor to be neutral for Opposer’s Top Hat design mark, as there was not enough evidence to infer the degree of recognition of the mark. However the TTAB found THE HOUSE THAT RUTH BUILT to be a widely recognized mark.

Fifth Likely to Cause Dilution by Blurring Factor: Whether User of the Mark Intended to Create an Association with the Famous Mark

Applicant admitted that its marks create an association with Opposer’s marks, but claimed that its Syringe Top Hat design mark and its word marks were fair use. Indeed, Section 43(c)(3)(A) provides for a fair use and a parody defense against dilution claims. However, the fair use defense failed in our case as the TTAB pointed out that “Applicant’s argument ignore[d] the language of Section 43(c)(3)(A)… which limits the fair use exclusion as defined in the statute to use of a famous mark other than a designation of source for the person’s own goods or services.” Also, section 43(c)(3)(C) limits the fair use exclusion to “noncommercial use.” In other words, the fair use defense cannot apply in dilution cases if the use is commercial and acts as a designation of source.

Applicant also claimed that its Syringe Top hat design mark and its work marks were a parody, and that a parody, it was successful because it created an association with Opponent’s design mark. But the parody defense failed, because the TTAB refused to consider the parody defense as part of its assessment of the dilution, because Applicant’s marks were used in commerce.

The TTAB thus strongly signals that parody defenses are not likely to be successful in dilution cases, as it “[found] it virtually impossible to conceive of a situation where a parody defense to a dilution claim can succeed in a case before the Board.” The TTAB expressly stated that this case was an opportunity “to modify [its] prior suggestion in Research in Motion that an alleged parody should be considered as part of [its] dilution analysis even when parody does not provide a safe harbor for a defendant.” The TTAB had followed in its Research in Motion decision the Fourth Circuit Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC 2007 decision. In this case, the Court had held that the dog toy “Chewy Vuiton,” which sold for less than $20 and crudely represented a Louis Vuitton bag was a successful parody of the Louis Vuitton bags and trademarks. Another court, the 10^th Circuit, had found in 1987 that using “Lardashe” as a mark for larger-size women’s blue jeans was a successful and permissible parody of “Jordache” jeans, Jordache Enterprises, Inc. v. Hogg Wyld, Ltd. In Louis Vuitton Malletier, the Fourth Circuit found the pet toy to be “an irreverent, and indeed intentional, representation of an LVM handbag, albeit much smaller and coarse.” In our case, the fact that the goods sold under Applicant’s marks were the same (tee-shirts and mugs) than the ones sold by Opposer may have influenced the TTAB’s decision.

If Applicant would not have, well, applied to register the trademarks, but, instead, would have used them in, say, a blog written to denounce PED use in major league baseball, the parody defense would have likely be successful, as the use would not have been in commerce. The TTAB found the sixth dilution by blurring factor, the actual association between the mark and the Famous mark to be neutral, as only twenty-two shirts bearing Applicant’s marks, and no mugs, had been sold. This was indeed a very limited use of the marks in commerce. However, the marketing plans of Applicant are unclear, and they may very well have anticipated greater sales. The Yankees did not strike out at the TTAB.

Image of Yankee Stadium is courtesy of Flickr user Severin St. Martin under a CC BY 2.0 license.

Filed Under: Sports Law, Trademark · Tagged: Parody, Trademark Dilution, TTAB

Right of Publicity and Freedom of Speech Clash in Manhattan

April 27, 2015 · by marie-andree@maw-law.com ·

This New York Appellate Division case affirmed the First Amendment right of Defendant, a photographer, over the right to privacy of Plaintiffs’ children, whose pictures were taken surreptitiously using a high powered camera lens and became the subject of an art exhibition. The case is Martha Foster et al. v. Arne Svenson, (2015 NY Slip Op 03068).

Defendant Arne Svenson is a photographer. As he explained on his web site, “he has turned outward from his usual studio based practice to study the daily activities of his downtown Manhattan neighbors as seen through his windows into theirs.” The result of this work became the series The Neighbors, which was exhibited in 2013 in New York and Los Angeles, and will be exhibited next year in Denver. Svenson used a telephoto lens,inherited from a bird-watching friend, to take pictures, from his own downtown Manhattan apartment, of people living or working in a building across the street, without their knowledge, taking advantage of its glass facade and open windows.

Defendant took pictures of Plaintiffs’ minor children, then three and one year old, which became part of the exhibition. Plaintiffs asked the defendant to stop selling these pictures, and defendant took down a picture representing the two children together, but kept offering for sale the picture representing Plaintiffs’ daughter alone. Plaintiffs then sent the gallery a cease-and-desist letter, asking it to take down the pictures from its site and to stop selling them. It complied, but the photographs were shown on several media channels reporting about the exhibition, and the address of the building was also made public.

Plaintiff filed a suit against Svenson, claiming invasion of privacy and intentional infliction of emotional distress. The New York Supreme Court, a court of first instance, denied the claim on August 5, 2013 and granted defendant’s motion to dismiss. Plaintiffs appealed.

(I wrote about the New York Supreme Court case here.)

New York’s Statutory Right to Privacy

New York State does not does not recognize a common-law right of privacy, and its only privacy statute, New York Civil Rights Law §§ 50 and 51, is a right of publicity statute. The Appellate Division provides a short history of the New York privacy law in its discussion.

Under § 50, “[a] person, firm or corporation that uses for advertising purposes, or for the purposes of trade, the name, portrait or picture of any living person without having first obtained the written consent of such person, or if a minor of his or her parent or guardian, is guilty of a misdemeanor.” § 51 of the statute provides for injunctive relief and damages. As such, the statute only forbids nonconsensual commercial appropriations of the name, portrait or picture of a living person. If the person whose likeness has been appropriated consents to this use, or if the use is noncommercial, then it is not prohibited.

The New York Supreme Court had noted in the Svenson case that “the question… is whether the photographs used by the photographer in a show or as examples of his art qualified as a commercial use or for the purpose of advertising or trade” and that the New York legislature “also sought to protect the constitutional right of freedom of expression.”

Is Selling Art Commercial Appropriation?

The photographs taken by Defendant had been offered for sale. Does that mean that taking them without authorization constituted commercial appropriation? Plaintiffs were arguing that these photographs were bought and sold in commerce. However, the Appellate Division noted that New York courts “have refused to adopt a literal construction [of “for advertising purpose” and “for the purpose of trade”] because the advertising and trade limitations of the privacy statute were drafted with the First Amendment in mind.”

The Appellate Division also cited its own Nussenzweig v. diCorcia 2007 case, where plaintiff, Erno Nussenzweig, had claimed that defendant, Philip diCorcia, had violated his New York statutory right of privacy when presenting in an art exhibition, and selling to the public, a photograph of Plaintiff taken in the streets of New York. Plaintiff argued that the photographer had made a commercial use of his image. Indeed, diCorcia had grossed about $240,000 from the sale of a limited edition of the photographs from this exhibition, and the photographs had been sold for $ 20, 000 to $30,000 each.

The invasion of privacy action was found to be time-barred in Nussenzweig, but two Justices wrote in a concurring opinion that the artwork “constitutes a matter of general public interest entitled to First Amendment protection.” They noted that plaintiff’s photograph had been published “in both the popular press and art media [which] confirm[ed] that the image is “a matter of legitimate public interest to readers” so as to bring its use within the newsworthiness exception to the privacy statute” and that “the inclusion of the photograph in a catalog sold in connection with an exhibition of the artist’s work does not render its use commercial, as plaintiff suggests [because][i]f the image is a matter of public interest, it is immaterial whether that interest is satisfied by viewing the original in a museum, art gallery or private dwelling or by perusing a reproduction in an art magazine or other publication.”

The Appellate Division concurred with the Nussenzweig concurrence. There was no doubt for the court that Defendant’s photographs must be considered works of art, as even Plaintiffs had conceded that Defendant was a renowned art photographer and that he had assembled photographs to present them in an art gallery exhibition.

For the Appellate Division, the fact that Svenson had made a profit from the sale of the photographs does not render the use of the photographs commercial, citing the Stephano v. News Group Publications 1984 case, where the New York Court of Appeals explained that it was the content of the article at stake, but not the publisher’s motive to increase circulation which determines, under the New York privacy statute, whether a particular item is newsworthy, and thus protected by the First Amendment, or merely commercial.

The Photographs are Protected by the First Amendment

New York courts may find that a particular use of someone’s likeness is protected by the First Amendment and is thus outside the scope of New York Civil Rights Law §§ 50 and 51. In our case, the photographs were presented in an art gallery.

The Appellate Division noted that, “[a]lthough the Court of Appeals has not been confronted with the issue of whether works of art fall outside the ambit of the privacy statute, others courts that have addressed the issue have consistently found that they do,”citing as an example the 2002 Hoepker v. Kruger Southern District of New York (SDNY) case, where the court found that that ”a careful weighing of interests” between privacy and freedom of speech is necessary, and must be done by the courts on a case by case basis. This may be particularly difficult if the protected speech is art, as art is not “newsworthy events or matters of public interest” the protection of which prevails over right of privacy, but stated that “New York courts have taken the position in the right of privacy context that art is speech, and, accordingly, that art is entitled to First Amendment protection vis-à-vis the right of privacy.”

Infliction of Emotional Distress?

Plaintiffs had also argued that the photographs had been obtained in an improper manner and thus should not been exempt from being considered as advertising or trade under the statute. They did not, however, cite any authority supporting this position. The Appellate Division took the view that Plaintiffs were thus arguing that “the manner in which the photographs were obtained constitute[d] the extreme and outrageous conduct contemplated by the tort of intentional infliction of emotional distress and serves to overcome the First Amendment protection.”However, the court did not find that Defendant’s behavior had been outrageous, even if the pictures were taken while the children were inside their home, as Defendant’s actions “certainly do not rise to the level of atrocious, indecent and utterly despicable.” Also, the Appellate Division noted that “the depiction of children, by itself, does not create special circumstances which should make a privacy claim more readily available.”

An Appeal to the Legislature

New York, unlike other States, does not have a general invasion of privacy statute, only a right to publicity statute. While the Appellate Division reluctantly affirmed that there was no cause of action for violation of the New York statute, it added that “in these times of heighted threats to privacy posed by new and ever more invasive technologies, we call upon the Legislature to revisit this important issue, as we are constrained to apply the law as it exists.” It remains to be seen if the New York Assembly will hear this plea.

Image is courtesy of Flickr user cheb.odegaard under a CC BY 2.0 license.

This post was originally published on The 1709 Blog.

Filed Under: First Amendment, Privacy, Right of Publicity, Southern District of New York · Tagged: First Amendment, Right of Publicity, Southern District of New York

Adidas Files Trademark Infringement Suit Against Marc Jacobs Over Stripes

April 15, 2015 · by marie-andree@maw-law.com ·

U.S. law does not grant copyright protection to clothes, because they are considered by the Copyright Act to be useful articles which cannot be protected by copyright. Indeed, under Section 101 of the Copyright Act, “the design of a useful article… shall be considered a pictorial, graphic, or sculptural work [and thus protectable by copyright] only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” That means that if a part of the design of the garment can be separated from the useful part of the garment, this separate part can be protected by copyright.

Fashion companies can also protect some of their designs by applying for a patent or by registering them as a trademark. Such is the case for Adidas’ three stripes design, which is also a registered trademark (the Three-Stripes Mark).

Does that mean that no other designer may feature three parallel stripes, or even four parallel stripes, on a particular garment? This will have to be decided by the District Court of Oregon, where adidas America and adidas AG (Plaintiffs) filed suit on April 8 against Marc Jacobs International, LLC (Defendant), claiming that that a Marc by Marc Jacobs’s jacket featuring four parallel stripes on its sleeves infringes adidas’ Three-Stripes Mark.

Plaintiffs allege that this constitutes trademark infringement, trademark dilution, and unfair and deceptive trade practices. They are asking the District Court of Oregon to permanently enjoin Defendant from manufacturing and selling these models, or other models which would similarly infringe on the Three-Stripes Mark, to stop using this mark, and to order the destruction of goods and materials using the mark. They are also asking the court to award them monetary and punitive damages and to enjoin Defendant to disgorge all profits from the sale of the allegedly infringing goods.

The case is Adidas America, Inc. v. Marc Jacobs, 3:15-cv-00582.

The Three-Stripes Mark

Plaintiffs own several trademarks for three parallel stripes on garments, as, for instance, the registered trademark No. 2,058,619 for “sports and leisure wear, namely shirts” which consists of “three parallel bands positioned along the length of each sleeve of a shirt.” It also owns several trademarks which use the term “3 stripes,” such as THE BAND WITH THE 3 STRIPES mark, which is registered in class 25 for sport and leisure wear.

Plaintiffs contend that the public recognizes these three-stripes as an indication of origin of adidas goods, and listed in its complaint several uses by the media of three stripes “when describing adidas and its products.

Adidas Y-3 line

The adidas Y-3 line is designed by Japanese designer Yohji Yamamoto. It was first introduced in 2002 and is sold in department stores and in adidas’ stores. Many of the Y-3 clothes feature three stripes on their shoulders, front or back, or on the sleeves.

Marc Jacob’s Jacket

Plaintiffs allege that a jacket manufactured and sold by Marc Jacobs infringes the Three-Stripes Mark. The complaint provides photographs of the jacket which features four stripes on its sleeves, a design which the complaint states is likely to be confused by the public for an adidas Three-Stripe Mark.

Similarity and Trademark Infringement

As this is not a copyright infringement suit, but a trademark infringement suit, the court will not examine if both designs are substantially similar. Instead, it will examine if the stripes featured on Defendant’s model is recognized by the general public as an indication of origin of goods, and if there is a likelihood of confusion between the stripes as used by defendant on its jackets and the Three-Stripes Mark. The Oregon district court will use the Ninth Circuit Sleekcraft factors to determine a likelihood of confusion. These factors are the strength of the mark, the proximity of the goods, the similarity of the marks, evidence of actual confusion, the marketing channels used, the degree of care exercised by customers, the defendant’s intent in selecting the mark, and the likelihood of expansion of the product lines.

It remains to be seen if the court will be convinced that four stripes on a garment infringes the Three Stripes Mark. However, if Plaintiffs are unsuccessful in their trademark infringement claim, they may still be successful in their dilution claim.

Trademark Dilution

The complaint also alleges that the Three-Stripe Mark is famous, and that its unauthorized use by Defendant dilutes its distinctiveness in violation of 15 U.S.C. § 1125(c), which entitles the owner of a famous mark to an injunction against a third party using a mark in commerce “that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.”

Since October 2006, when the Trademark Dilution Revision Act was enacted, a Plaintiff only needs to prove a likelihood of dilution, not an actual dilution. The Act defines a famous mark as a mark “widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner,” which may be determined by the courts using several factors, such as the duration, extent, and geographic reach of advertising and publicity of the mark, the amount, volume, and geographic extent of sales of goods or services offered under the mark, and the extent of actual recognition of the mark. The Three-Stripes Mark is certainly famous, and is also certainly distinctive.

Dilution by blurring is defined by 15 U.S.C. § 1125(c) as an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” The law lists several factors which may be used by the courts to determine whether the junior mark is likely to cause blurring, including the degree of similarity between the mark or trade name and the famous mark, the degree of inherent or acquired distinctiveness of the famous mark, the extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark, the degree of recognition of the famous mark, whether the user of the mark or trade name intended to create an association with the famous mark, and any actual association between the mark or trade name and the famous mark.

Therefore, even if the court would find that the stripes on the Marc Jacobs jacket do not infringe Plaintiffs’ trademark, the court may still find that they are so similar as to dilute the Three-Stripes Mark.

Image is Courtesy of Flickr user Kick Photo under a CC BY-ND 2.0 license.

Filed Under: Fashion Law, Trademark · Tagged: Fashion Law, Trademark Dilution, Trademark Infringement

Fox News Files Motion for Interlocutory Appeal in 9/11 Photo Fair Use Case

April 14, 2015 · by marie-andree@maw-law.com ·

Readers of this blog may remember that Judge Edgardo Ramos from the Southern District of New York (SDNY) denied on February 10, 2015 Fox News Network’s motion for summary judgment in a copyright infringement suit filed by the copyright holder of an iconic 9/11 photograph. Fox News had unsuccessfully moved for summary judgment, claiming fair use.

Fox News (Defendant) has now filed on March 19 a motion to certify the February 10, 2015 opinion and order for immediate appeal, under 28 U.S.C. § 1292(b), which gives a district judge the power to certify an order of interlocutory appeal , if he believes that “such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.” Under Second Circuit case law, cited by Defendant, a question of law is controlling if the certified order would terminate the action, or could significantly affect the conduct of the action, or if the issue has precedential value for a large number of cases.

Fox News is arguing that the February 10, 2015 order is presenting the controlling question of law of whether…

“For fair use purposes, whether a secondary user may transform a visual work by placing that work in a new context and for a new purpose, without substantial physical alterations.”

Fox News calls this area of law “murky” and further notes that “guidance is sorely needed” as “the use of visual works on social media… is widespread.”

Transformative Qualities of Social Media

Fox is asking the Second Circuit to recognize a “context-sensitive test” for transformative use, and claims that social media is “transformative by design.” It argues that “transformative qualities of social media are not taken into account when considering a fair use defense” and that the “use’s particular context” should be taken into account in fair use cases. Such finding would have “massive implications for the millions of Americans who use social media on a regular basis.” Fox News also claims that not considering the use of protected works on social media to be fair “would effectively proscribe a wide swath of ongoing online speech. The public has a strong interest in having these fundamental free-speech concerns addressed at the earliest possible juncture. ”

Defendant further argues that it had used Plaintiff’s photo “in an inherently transformative context: on social media.” As social media is not one-way to communication, but rather, a way to share ideas, expression on social media “is thus inherently intertwined with comments and criticism,” two of the purposes expressively mentioned by Section 107 of the Copyright Act.

While this argument alone appears overbroad, as agreeing with it would allow for almost any use of copyrighted work on social media, Fox narrows the argument further along in its memorandum when arguing that interlocutory review is warranted because the order “implicate[d] fundamental free-speech questions,” as its and others’ speech may be chilled “from using copyrighted content on social media to discuss issues of public concern.”

Difference of Opinion Over Appropriate Standard for Transformation of Visual Works

Defendant also argues that certification is warranted because the fair use jurisprudence of the Second Circuit is divided. While cases such as Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P., and Bill Graham Archives v. Dorling Kindersley Ltd. held that a use can be transformative even if the copyrighted work has not been altered, the Second Circuit placed great weight on transformative use in Cariou v Prince. Defendant also cited the Second Circuit Authors Guild, Inc. v. Hathitrust case, where the court asserted that “[a]dded value or utility is not the test: a transformative work is one that serves a new and different function from the original work and is not a substitute for it” (at 96).

Transformative Content or Transformative Purpose?

Fox News is arguing that Judge Ramos relied on Cariou, which conflicts with Bill Graham. It cites ablog post written by Professor Rebecca Tushnet , where she noted that, in Cariou, “the court, despite speaking of purpose, seemed to require transformation of content, contrary to the aims of much appropriation art” and also wrote that “Fox’s purpose… [of use] was an issue of fact, not indisputably different as the publisher’s was in Bill Graham Archives.” Indeed, in Bill Graham, the Second Circuit found that a publisher’s purpose in using copyrighted images of posters in its biography of the Grateful Dead was “plainly different from the original purpose for which they were created” (at 609) and was fair use.

Is publication on social media, a new context for the work, enough to warrant finding of a different purpose? Probably not, but the issue of the respective weight of transformative content and transformative purpose for fair use analysis purpose warrants further discussion in court. Many copyright practitioners and scholars are now rooting for Fox’s motion to be granted, hoping it will lead to another Second Circuit fair use case, which may clarify Cariou.

This blog post was first published on The 1709 Blog.

Image is courtesy of Flickr user Heather Paul under a CC BY-ND 2.0 license.

Filed Under: Copyright, Fair Use ·

Dentist Claiming to Own Copyright in Patient’s Negative Comments about Her Misused Copyright Law

March 24, 2015 · by marie-andree@maw-law.com ·

Going to the dentist is not particularly pleasant, but, at least, one does not usually expect to have to consult a copyright attorney before sitting in the chair.

However, patients of a Manhattan dentist had to sign, before being able to receive any treatment, including emergency treatment, a confidentiality agreement which assigned to the dentist and her dental practice a copyright over any comments made about her or her practice.

One of these patients was not satisfied by Defendant’s dental services and wrote about his dissatisfaction on Yelp and other sites allowing users to comment about services. According to the complaint, Defendant unsuccessfully asked these sites to remove Plaintiff’s comments, sent Plaintiff invoices purporting to charge $100 per day for the posting of these comments, and threatened to file a copyright infringement, breach of contract, and defamation suit if the comments were not removed from the sites.

Several of the dentist’s patients filed a class action suit in November 2011 in the Southern District of New York (SDNY), claiming that, even if Defendant does indeed own the copyright in these comments, they were not infringing under the fair use defense of Section 107 of the Copyright Act. Defendant moved to dismiss but the motion was denied on March 27, 2013, by Judge Paul A. Crotty from the SDNY.

On February 27, 2015, Judge Crotty rendered a default judgment in favor of Plaintiff. The case is Lee v. Makhenevich, 1:11-cv-08665 (SDNY).

For Judge Crotty, the comments posted by Plaintiff were not infringing as they were fair use. Also, for the SDNY,

“[o[btaining the promise by plaintiff… in the [m]utual [a]greement to [m]aintain [p]rivacy… not to publish criticism of defendants, the [a]greement’s purported assignment of copyrights, and the assertion of copyright claims by defendants for the express purpose of preventing the dissemination of [plaintiff]’s [c]ommentary, constitute breaches of fiduciary duty and violations of dental ethics and are subject to the equitable defenses of unclean hands, and, as to such assignment and assertion, constitute copyright misuse.”

Judge Crotty also ruled that

“[Plaintiff]’s assignment and promise in the [a]greement not to publish criticisms of defendant… are null and void for lack of consideration… [that Plaintiff]’s assignment and promise in the [a]greement not to publish criticisms of defendants are null and void for unconscionability… [that] [t]he [a]greement is a deceptive act or practice in violation of Section 349(a) of the New York General Business Law… and [that] [Plaintiff’]’s [c]ommentary is not actionable defamation under New York common law. “

I will only write about the copyright issues in this case.

Using Copyright to Suppress Speech

This case is interesting because it is a textbook example of a case where a party is using copyright to attempt to suppress speech.

The agreement signed by Plaintiff read, in part, that in consideration for the dentist to agree not to provide any lists of patients or personal information to any marketing companies, the patient would “assign… all Intellectual Property rights, including copyrights, to Dentist for any written, pictorial, and/or electronic commentary.” The agreement claimed that dentists are able to provide such information to third parties because of a “loophole” in HIPAA, the federal medical data privacy law, and added further that “Dentist feels strongly about Patient’s privacy as well as the Practice’s right to control its public image and privacy.” The agreement would last five years from the date of the dentist’s last service to the patient, or three years after the termination of the dentist-patient relationship.

HIPAA, however, forbids covered entities, such as MDs and dentists, from disseminating patient information for marketing purpose, so there is no need for such agreement to protect patient’s privacy. The complaint argued that, since there are no “loopholes” in HIPAA, the assignment was null and void for lack of consideration. Judge Crotty agreed.

In his March 2013 order, Judge Crotty referred to all these actions as “aggressive and threatening conduct.” Indeed they were.

After Plaintiff had published negative comments on both Yelp and DoctorBase, he first received a letter from “North East PC/Attn Urgent/Legal” [catchy title, eh?] threatening him with a $100 000 lawsuit because he had violated the agreement. The letter, signed “Corporate Practice”, informed Plaintiff that the letter “shall serve [him] as the only notice prior to litigation” and contained a draft of a complaint which appeared ready to be filed, if the Plaintiff did not comply with the letter’s demands. The office of the dentist also sent Yelp and DoctorBase DMCA takedown notices, telling them that the dentist owned the copyright in the comments and asking them to take the comments down.

On October 17, 2011, Plaintiff received a letter from Defendant’s attorney, which stated that his comments posted online included damaging inferences which denigrate, defame, and cast aspersions upon the dentist and the dental office” and that “according to The Ethics of Medical Justice / Dental Justice Agreements, under the Code of Internet Ethics, your comments are not considered constructive commentaries but rather as personal attacks to the office’s well-being and reputation.” Medical Justice is the company which had written the agreement used by Defendant. The Center for Technology and Democracy filed a complaint in November 2011 with the Federal Trade Commission asking it to investigate Medical Justice, and the company has since stopped proposing such agreements to dentists and MDs.

Copyright Registration

But after having claimed that the comments infringed her copyright, and after having threatened to sue Plaintiff for copyright infringement, Defendant argued that there could not be a copyright infringement suit at all. In her memorandum of law to support her motion to dismiss, Defendant had claimed that the suit had to be dismissed because a copyright registration is a pre-requisite to any copyright infringement suit, but that Defendant had not registered her copyright in the comments.

Judge Crotty noted though, in his March 2013 order, that Plaintiff does not claim that his own copyright has been infringed, but, rather, that his comments “about Defendants’ hardly defensible practices are subject to copyright protection. Defendant’s argument that the copyright must be registered before relief turns the law upside down.”

Fair Use

Instead, Plaintiff claimed that “non-commercial use of copyrighted materials for criticism and comment is a paradigmatic fair use that is not infringing” and that “[t]he posting of [his comments]… can have no effect on their potential market or value because no such value exists.” On February 27, Judge Crotty agreed on that point.

Misuse

Plaintiff also sought a declaration that the agreement’s promise not to publish criticisms, the purported acquisition of copyrights in the comments, and the assertion of copyright claims, constituted breaches of fiduciary duty, violations of dental ethics, and were subject to the equitable defenses of unclean hands and copyright misuse.

Judge Crotty agreed with Plaintiff on these points as well, and awarded him $4,766 in damages.

This post was originally published on The 1709 Blog.

Filed Under: Copyright, Fair Use · Tagged: Copyright, Fair Use, SDNY

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

Paris Court Denies Copyright Protection to Jimi Hendrix Photograph

French Highest Court “Casse” in Foldable Bag Copyright Infringement Case

Ninth Circuit Panel Held that California Resale Act Violates Dormant Commerce Clause

TTAB: Fair Use Defense Not Successful in Trademark Dilution Cases if Defendant’s Use is Commercial

Right of Publicity and Freedom of Speech Clash in Manhattan

Adidas Files Trademark Infringement Suit Against Marc Jacobs Over Stripes

Fox News Files Motion for Interlocutory Appeal in 9/11 Photo Fair Use Case

Dentist Claiming to Own Copyright in Patient’s Negative Comments about Her Misused Copyright Law

Contact

Disclaimer

Disclaimers

Connect