Oh, the Places You’ll Go! (Or Maybe Not)

January 11, 2021 · by ·

The US Court of Appeals for the Ninth Circuit held on December 18, 2020, that the Oh, the Places You’ll Go! comic book infringed the rights of the owner of the Oh, the Places You’ll Go! Dr Seuss book as it is not fair use.

The case is  Dr. Seuss Enterprises, L.P. v. Comic Mix LLC.

Appellant is Dr. Seuss Enterprises (DSE) which holds the copyright to the works of Theodor S. Geisel, aka “Dr. Seuss,” including his final book, Oh, the Places You’ll Go!  (Go!) and runs a product licensing and merchandising program. The Ninth Circuit noted that “Dr. Seuss” was the top licensed book brand in 2017, and a popular choice as graduation present.

Appellee Comic Mix developed and published the Oh, the Places You’ll Boldly Go! book (Boldly) which is a mash-up of the Dr. Seuss book and Star Trek, using elements from each of works. “Mash-up” refers to a work created from combining elements of others works but is not a legal term. If a mash-up uses elements protected by copyright, it may not be infringing if it is fair use. Comix Mix did not seek to obtain a license from DSE, nor did it obtain authorization to use elements of Go!.

DSE considered the mash-up to be infringing and sent several letters to Defendants. It also sent a DMCA takedown notice to Kickstarter, which then took down the fundraising page and blocked the pledged funds. DSE then filed a copyright and trademark infringement suit. Comic Mix had sought to fund the publication of the book by a Kickstart crowdfunding campaign.

Comic Mix moved to dismiss the trademark infringement claims arguing that use of the trademarks in the title, artistic style or fonts of the mash-up book is protected by the First Amendment under the Rogers v. Grimaldi test, which requires judges to examine if (1) the mark has artistic relevance and (2) if so, if use of the work is explicitly misleading. The District Court dismissed Plaintiff’s trademark claim, finding that that use was nominative fair use.

Comix Mix also argued that the mash-up was a parody and thus fair use. While a parody is fair use, fair use can be found by the courts even if the derivative work is not a parody. As defined by the Supreme Court in its 1994 Campbell case, a parody uses elements of the original work to comment, at least in part, on the author of the work. Fair use, in contrast, is determined by examining four fair use factors. The District Court did not find the mash-up to be a parody, but granted summary judgment, because the mash-up was fair use.

DSE appealed and a panel of Ninth Circuit held an hearing on April 27, 2020. DSE’s counsel argued that Boldly! is a “market substitute” for Go! and that it “would compete head-to-head in the graduation gift market.” Comic Mix’s counsel argued it was a parody. .

On December 18, 2020,  the panel reversed the US District Court’s grant of summary judgment, finding that the use was not fair use.

The Four fair Use Factors

The first fair use factor, the purpose and character of the use, weighed against fair use. The use is commercial, and the mash-up is not a parody, as it does not critique or ridicule Dr. Seuss’s works. The panel did not find use of the original work to be otherwise transformative either, but that Boldly! “merely repackaged Go!.” There was no new purpose or character, according to the Ninth Circuit but Boldly! merely recontextualized the original expression. It “[did] not alter Go! with new expression, meaning or message” either, noting that “the world of Go! remains intact, ” and that the derivative work  “was merely repackaged into a new format, ” noting further that the “Seussian world… is otherwise unchanged.”

The second fair use factor, the nature of the work, also weighed against fair use, as Go! is a creative and expressive work.

The third fair use factor, the amount and substantiality of the use, weighed “decisively” against fair use, as both quantitative and qualitative use were substantial. The Ninth Circuit found the copying to be “considerable,” around 60% of the Dr. Seuss’s book, including illustrations, and “took the heart of Dr. Seuss’s works, ”giving as example the use of the “highly imaginative and intricately drawn machine that can take the star-shaped status-symbol on and off the bellies of the Sneetches,” from the Sneetches book.

The fourth and final factor, the effect of the use on the potential market, also weighted against fair use. It is the proponent of the affirmative defense of fair use who has the burden of proof, and the Court did not find that Comic Mix had not proven there was no potential market harm. Comic Mix tried unsuccessfully to argue that fair use is not an affirmative defense and that it was thus DSE which had to prove potential market harm. Counsel for DSE argued during the April 2020 hearing that the District Court had incorrectly place the burden of proof of the fourth factor on DSE, a decision he found to be “inconsistent” with Campbell.

The Ninth Circuit noted that Comic Mix had “intentionally targeted and aimed to capitalize on the same graduation market as Go!” and that it had planned to release Bold! “in time for school graduations,” and that the unauthorized derivative work curtailed Go! ‘s potential derivative market, noting further that DSE “[had] already vetted and authorized multiple derivatives of Go! ”. DSE’s counsel reminded the panel during the April 2020 debate that the Supreme Court had emphasized in Campbell that licensing of derivatives is an important incentive to creation.[

Comic Mix’s counsel argued, curiously, that DSE did not have the right to control the “fair use market for transformative work,” but acknowledged that DSE was entitled to make transformative works. Indeed, this right is provided to DSE by Section 106 (2) of the Copyright Act. The Ninth Circuit noted that DSE “certainly has the right to “the artistic decision not to saturate those markets with variations of their original,” citing Castle Rock Ent., a case where the Second Circuit Court of Appeals stated that  even though the owner of the copyright of the Seinfeld television series “[had] evidenced little if any interest in exploiting this market for derivative works based on Seinfeld, such as by creating and publishing Seinfeld trivia books… the copyright law must respect that creative and economic choice.”

 

Image is courtesy of Flickr user Sarah B Brooks under a CC BY 2.0 license.

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Oh, What a Case (9th Circ. 2020): Works Presented as Factual are Factual when Determining Scope of Copyright Protection

January 7, 2021 · by ·

The U.S. Court of appeals for the Ninth Circuit held on September 8, 2020, in Corbello v. Valli, that the musical Jersey Boys did not infringe plaintiff’s copyright in an autobiography of Tommy DeVito ghost written by Rex Woodward, as it had not copied any protectable elements of the book.

The case is interesting because the Court applied its newly adopted “Asserted Truths” doctrine, holding that an author representing a work as nonfiction cannot later claim that it was fictionalized and thus entitled to full copyright protection.

The facts

Tommy de Vito is one of the founding members of the Four Seasons, with Frankie Valli, Bob Gaudio and Nick Massi. The group produced several hits, Sherry, Big Girls Don’t Cry, Walk Like a Man and December, 1963 (Oh, What a Night) andwasinducted into the Rock and Roll Hall of Fame in 1990.

Rex Woodard ghostwrote Tommy DeVito’s autobiography in the late Eighties (the Work), using taped interviews of the musician and even portions of the F.B.I. file on the Four Seasons obtained under the Freedom of Information Act. The two men, however, did not find a publisher for the book.

Tommy DeVito executed an agreement in 1999 with Frankie Valli and Bob Gaudio, granting them the exclusive rights to his “biography” for the purpose of creating a musical based on the life and music of the Four Seasons. The rights were to revert to DeVito should Valli and Gaudio not exercise their rights within a defined period. In 2004, Valli and Gaudio granted the right to use the name and music of the band, the name and likeness of the musicians, and the story of their lives, to the producers of an upcoming show about the Four Seasons.

DeVito provided access to his unpublished autobiography to the writers of the show, which became the Jersey Boys musical (the Play). It ran on Broadway from 2005 to 2017 and was adapted into a movie in 2014. The musical and the movie tells the story of the four members of the Four Seasons.

Donna Corbello, Woodward’s surviving wife, tried again unsuccessfully to publish the book written by her husband after the show started to run, believing that its success might help sell the autobiography to a publisher.

She discovered then that DeVito had registered the copyright of the Work as sole author and she then filed a supplementary application with the U.S. Copyright Office to add her late husband as a coauthor and co-claimant of the Work. The certificate of registration was amended to list Woodward and DeVito as coauthors and co-claimants of the Work.

The (long) procedure

Corbello then sued DeVito for breach of contract and equitable accounting for the Work’s profits, later adding as defendants the producers of Jersey Boys and Valli and Gaudio, after learning that DeVito provided access to the book, and also sued for copyright infringement. Corbello claimed that the Play was a derivative work of the Book, owned exclusively by the co-authors and thus herself, as lawful successor of her husband.

The U.S. District Court of Nevada issued a summary judgment in 2011, declaring the book a joint work, “because of DeVito’s non-de minimis creative edits.” The Court reviewed the 1999 agreement, found it to be the grant of an exclusive license, which had lapsed, but not a transfer of copyright. Woodard was a co-owner, Corbello a successor in interest.

A panel of the U.S. Court of appeals for the Ninth Circuit reversed in part in 2015. Judge Sack noted in his concurring opinion that the matter would be greatly simplified if the district court would decide on remand that the work is not infringing. But the case nevertheless proceeded to trial after the District had only partially granted summary judgment on remand, holding that, while there was substantial similarity sufficient to avoid summary judgment at least with a thin copyright protection, most of the similarities were based on historical facts. The jury found in favor of Plaintiff. The District Court granted a motion for new trial, which was appealed. The 9th Circuit then reviewed the case de novo.

The Ninth Circuit copyright infringement test

The Ninth Circuit’s substantial-similarity test contains an extrinsic and intrinsic component.

The extrinsic test requires a three-step analysis: (1) identifying similarities between the copyrighted work and the accused work, (2) disregarding similarities based on unprotectable material or authorized use; and (3) determining the scope of protection (“thick” or “thin”) to which the remainder is entitled “as a whole.”

The intrinsic test is conducted only if the extrinsic analysis succeeds. It examines an ordinary person’s subjective impressions of the similarities between two works.

In our case, the Court did not apply the intrinsic test because the extrinsic test failed. The Court applied the extrinsic test to elements of the Work which were “undisputedly factual”. The introduction of Tommy de Vito is about a historical character, the introduction of the Song Sherry is a historical fact, as are the introduction of the songs Big Girls Don’t Cry and Dawn, and as is the description of the induction into the Rock and Roll Hall of Fame. As for comparing the Four seasons and the Beatles, these were unprotectable ordinary phrases. These elements were therefore not protectable.

The new asserted facts doctrine

The Court then applied the extrinsic test to the claimed fictions represented to be facts and presented its new asserted-truth doctrine, stemming from the doctrine of copyright estoppel, under which once a plaintiff’s work has been held out to the public as factual, the author-plaintiff cannot claim that the book is actually fiction and thus entitled to the higher protection allowed by fictional works.

The Ninth Circuit did not believe that copyright estoppel is the right term for the doctrine and named it instead the “asserted truths” doctrine, citing Houts v. Universal City Studios:

“Estoppel” is not, in our view, an apt descriptor for the doctrine at work here.  For one thing, … detrimental reliance is not an element of this doctrine, as “the [so- called] estoppel [is] created solely by plaintiff’s affirmative action and representation that the work was factual.”. For another, application of estoppel concepts often suggests that the party against whom estoppel is applied is in some way culpable….

“Rather than “copyright estoppel,” we will refer to this rule of copyright law as the “asserted truths” doctrine, because it is the author’s assertions within and concerning the work that the account contained in the book is truthful that trigger its application.”

In our case, the Work was presented as a reliable source of factual information about the Four Seasons, even presented as a “complete and truthful chronicle of the Four Seasons.” The Court noted that DeVito had provided a copy of it to Play’s writers when they were researching the history of the Four Seasons, and they viewed it as a factual source “even better than newspaper or magazine articles, because it was co-written by a participant in the events described.”

The Court specified that “the asserted truths doctrine applies not only to the narrative but also to dialogue reproduced in a historical nonfiction work represented to be entirely truthful” and “includes dialogue that an author has explicitly represented as being fully accurate, even if the author was unlikely to have recalled or been able to report the quotations exactly.”

Authors of biographies should thus be well advised to add a disclaimer to their work, claiming that the dialogues, while based on historical facts, are the fruits of the author‘s imagination.

 

This post was first published on the TTLF Newsletter on Transatlantic Antitrust and IPR Developments, Stanford-Vienna Transatlantic Technology Law Forum

Image courtesy of Flickr user Andy Roberts under a CC BY 2.0 license.

 

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

May 28, 2015 · by ·

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.

illus-sleepingbeauty

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.

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