Silicon Valley Media Law Blog

Jumping in with a few thoughts on the 9th Circuit's Roommates.com decision, which came out last week -- some viewpoints include Eric Goldman, Michael Erdman, and Evan Brown.

Roommates was sued for violating the fair housing laws, and it unsuccessfully argued that as an interactive computer service it was immune from liability for the content posted by its users, under Section 230 of the Communications Decency Act.

Under the statute, the immunity does not apply if the service provider also participated as an “information content provider”, by being “responsible, in whole or in part, for the creation or development of the offending content.”

The opinion says it adopts a “common-sense interpretation” of what “developing” is, for the purpose of liability. It says that “[C]lose cases, we believe, must be resolved in favor of immunity, lest we cut the heart out of section 230 by forcing websites to face death by ten thousand duck-bites, fighting off claims that they promoted or encouraged – or at least tacitly assented to – the illegality of third parties.”

Actually ducks are really nice animals (guess that's why we're talking 10,000 bites), so let’s leave them out of this. Chickens of course have sharp beaks, and geese can be rather aggressive, but ducks are generally quite genial, with rounded bills and just some serrated edges-- so ducks may find the reference offensive and should reserve their rights and remedies.  Duck image (c) Tomo.yun, (www.yunphoto.net/en/).

The decision focuses on the term “development” in assessing the site’s involvement in providing user drop-down menus for creating their housing profiles, and in providing search and email notifications relating to the user’s stated housing preferences. The decision found the “additional comments” portion of the site to be covered by the immunity, because it was a neutral tool for users to post their comments.

“The decision interprets the term “development” as “referring not merely to augmenting the content generally, but to materially contributing to its alleged unlawfulness. [emphasis added]” 

“In other words, a web site helps to develop unlawful content, and thus falls within the exception to section 230, if it contributes materially it to the alleged illegality of the conduct [emphasis added].”

It thus associates the CDA immunity analysis with the legally complex notions of contributory liability (and inducement liability), which are areas of some uncertainty in the copyright arena. 

The opinion says there’s more clarity now about the legal standard than there was before: “Our opinion extensively clarifies where that edge lies, and gives far more guidance than our previous cases”.  it does take pains to elaborate on what it means by "development", in seeking to avoid a pedantic interpretation, and there’s certainly a lot here to digest. 

Here’s a word cloud summary of some of the opinion’s lexicon.  These are snippets from the opinion, obviously taken out of context, but after the gestalt of the opinion.

“contributes materially to the alleged illegality of the conduct”

“encourage illegal content”

“designed to achieve illegal ends”

“design your website to require users to input illegal content”

“website directly participates in developing the alleged illegality”

“elicits the allegedly illegal content”

“makes aggressive use of it in conducting its business”

“directly related to the alleged illegality of the site”

“developing and enforcing a system that subjects subscribers to [illegal content]"

“inducing third parties to express illegal preferences”

“enhance, encourage, make easier” the posting of illegal content

“solicit” or “encourage” the harmful content”

“creating a website designed to solicit and enforce [illegal] preferences”

“direct encouragement to perform illegal searches or publish illegal content”

* * * * * * * *

“providing neutral tools”

“generic text”

“simple, generic prompt”

“weak encouragement”

 “development by inference”

“enhancement by implication”

“merely provide a framework”

 “generic search engines”

 “edits are unrelated to the illegality”

 “without prompting or help from the website operator”

“did nothing to encourage the posting of [illegal] content”

 “contrary to the website’s express policies”

“mere classifying user characteristics”

nothing “induces anyone” to engage in illegal conduct

“chat rooms for general use”

“generic message board”

“does not provide any specific guidance”

does not “urge subscribers” to engage in illegal conduct

The 8th Circuit issued an opinion today in the fantasy baseball case, CBC Distribution & Marketing v. MLB Advanced Media, in which MLB asserted that fantasy leagues need permission to use players' names and other data. 

The court affirmed the district court ruling, which held that the First Amendment trumps the player's publicity rights and thus permits usage without a license.  The court also confirmed that the "no-challenge" and "no-use" clauses of the prior license agreement were unenforceable, but not on public policy grounds (as the lower court found), but rather on a technical point about breach of warranty of title in the publicity rights by MLB.  See prior post about the lower court ruling.

My partner Glenn Colton filed an amicus brief in the case on behalf of the Fantasy Sports Trade Association.  Glenn also writes the Week That Was column  for Rotoworld.com about fantasy leagues.  He offered these thoughts on the victory:  

"Today's decision from the 8th Circuit Court of Appeals is a major victory for the fantasy sports industry, fantasy sports players, and most importantly, the protection of free speech and expression. Specifically, the Court ruled that the interests protected by the First Amendment to the United States Constitution outweigh any alleged harms to professional athletes from the use of their names in fantasy sports games.

"Notably, the Court went out of its way to point out how "handsomely" players are already rewarded for their performances and endorsements. In the final analysis, the decision drives another nail in the coffin of Major League Baseball and its players association's attempt to wrest control of the fantasy sports industry from the pioneers that worked long and hard to build and create the thriving national hobby millions enjoy today."

 Here are some interesting posts today on the case:

Staci Kramer on Paid Content

Neil Richards on Concurring Opinions

Mike Madison on Madisonian.net

In anticipation of the appeal of the recent RIAA P2P victory, Fred von Lohmann reviews the "make available" vs. "distribute" debate in the copyright law.   It's more than a sematics issue -- from Ars Technica it appears the defense appeal will challenge the validity of a jury instruction about "making available" as an infringing act.  

A few orthogonal thoughts on the subject:

The "make available" controversy has been around for a while -- the EFF has previously briefed the subject and Eric Goldman has a thorough discussion here.  

And "make available " language was added to criminal liability under Section 506 in 2005:

"by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution. by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution"

even though "make available" is not part of the enumerated statutory rights under Section 106.  

Also the U.S. has signed treaties with "make available" language, but since treaties are not self-executing, that doesn't mean the concept is part of U.S. law.  See prior posts on this here, here and here.

These complexities bring to mind the newly coined term "propagate" to supersede "distribute" and thereby cast a wider net of coverage in version 3 of the GPL:

To “propagate” a work means to do anything with it that, without permission, would make you directly or secondarily liable for infringement under applicable copyright law, except executing it on a computer or modifying a private copy. Propagation includes copying, distribution (with or without modification), making available to the public, and in some countries other activities as well.

 The FSF said it made this change because the term "distribute" alone wasn't getting the job done:

"The term “distribute” used in GPLv2 was borrowed from United States copyright law. Over the years, we learned that some jurisdictions used this same word in their own copyright laws, but gave it different meanings. We invented these new terms to make our intent as clear as possible no matter where the license is interpreted. They are not used in any copyright law in the world, and we provide their definitions directly in the license."

Here are some perspectives on the much-publicized RIAA victory ($220K plus jury verdict) this week against the P2P file-sharer, Jammie Thomas:

Bob Lefsetz takes his music industry to task, with rhetorical flourish:  "What the fuck are we gonna DO ABOUT IT?"

Dennis Crouch compares to "patent sharks" of the 19th century, and resulting patent reform.  Is there such a thing as a copyright troll?

Bill Patry gives us the detailed copyright analysis on the jury instructions -- quite interesting about liability for "making available" versus "downloading". 

Recall Mitch Bainwol's slide deck at NARM in 2005, about "building a brighter future" for the music industry, which cites success of user lawsuits and public approval for same -- "maintaining resolve" and "enhancing deterrence".    

Last there's the IFPI statement on the Thomas case:  "We have always made it clear we are reluctant litigators."   Don't see a press release on the RIAA site.

XM Satellite's motion to dismiss was denied last Friday in Atlantic v. XM Satellite, the copyright infringement case brought by record labels over the XM + MP3 player.   The ruling is here.

XM Satellite sought to dismiss the case on the grounds that its MP3 player is exempt from infringement claims under Section 1008 of the Audio Home Recording Act, which provides:

"No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device [DARD], a digital audio recording medium, … or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog recordings."

The court held that this does not immunize XM Satellite from infringement claims based on operation of its satellite subscription music service in conjunction with the MP3 player functionality -- rather only from infringement claims for selling the device itself:

"[U]nder the AHRA, XM is protected from suit based on actions taken in its capacity as a distributor of audio recording devices, but it is not immunized from suit based on its conduct as a satellite radio broadcaster, or from suit based on its actions as an XM + MP3 content provider."

 "The question presented here is plain: where the conduct alleged in the Record Companies' Complaint falls within the ambit of conduct protected by the AHRA.  The Court finds that because of the unique circumstances of XM being both a broadcaster and a DARD distributor and its access to the copyrighted music results from its license to broadcast only, that the alleged conduct of XM in making that music available for consumers to record well beyond the time when broadcast, in violation of its broadcast license, is the basis of the Complaint, and being a distributor of a DARD is not.  Thus, the AHRA, on these facts, provides no protection to XM merely because they are distributors of a DARD."

 It's an interesting case in terms of thinking about how the Section 114 statutory broadcasting license and the AHRA device immunity relate to each other.

I guess Santa got my letter after all.  William Patry's much-awaited copyright law treatise has been published in seven volumes by Thomson/West, here, with a foreword by Sandra Day O'Connor, no less.  I can't wait to start using it.  

According to Patry, "I did 100% of the research and writing, never using assistants of any kind."  Having worked back in law school as a research assistant on Professor Goldstein's treatise, I have some sense of the nature of this undertaking and am in awe of it.  The table of contents alone is 82 pages, with sections called:  "The straw man of legislative history:  a textualist powerplay" and "the court's bait-and-switch approach to the use of legislative history". 

Patry says in his blog post:

"I think the chapter on statutory interpretation (chapter 2, 284 pages), will be a surprise to those who have assumed that the textualist approach to statutes is the dominant approach, even on the Supreme Court. The chapter represents a painstaking effort to document actual practices. I read far in excess of 1,000 cases, hundreds of law review articles, dozens of books, and of course drawn on my own 8 years in drafting statutes while a federal legislative branch attorney."

He also has started a new blog to support the treatise, called the The Patry Treatise Blog, which I am sure will be a valuable resource in its own right:

"The purpose of this new blog is to start breaking down the one-way nature of treatise writing: I want to provide a forum where people can react to the book and I can both respond and provide further thoughts on things I have written or am thinking about putting in the next supplement."

If you don't yet follow his work, you'll want to.  Here's a brief excerpt of Patry's accomplishments:

"Senior Copyright Counsel, Google Inc. Formerly copyright counsel to the U.S. House of Representatives, Committee on the Judiciary, formerly Policy Planning Advisor to the Register of Copyrights, formerly Law Professor, Benjamin N. Cardozo School of Law; author of numerous treatises and articles (including one on fair use with Judge Richard Posner), including the 7 volume treatise on "Patry on Copyright."

A California appeals court ruled today in Wagner v. Columbia Pictures that Robert Wagner was not entitled to profits from the Charlie's Angels movies under an earlier agreement relating to the television series.

Robert and Natalie Wood had an agreement with Aaron Spelling's production company to develop ideas for a television pilot for ABC's 1974-1975 season.  They came up with Harry's Angels, which was renamed, and the rest is television history.  The agreement with the Wagners for Charlie's Angels provided a 50% share of net profits on:

"the right to exhibit photoplays of the series and from the exploitation of all ancillary, music and subsidiary rights in connection therewith."

In ruling against Wagner, the court concluded that "in connection therewith" applied to the television series, not to theatrical motion pictures.  In coming to this conclusion, the court review the "separated rights" provisions of the applicable Writer's Guild agreement.  Basically, separation of rights means that by way of collective bargaining, the writer retains certain rights, in this case motion picture rights when selling a script, notwithstanding a work-for-hire agreement.  If you're not familiar with the guild overlay on copyrights in the entertainment context, this case is a good introduction.

Happy new year to all.  A case about Charlies Angels seems like a good way to ease into the first full week of the year! 

The Librarian of Congress has issued its periodic rulemaking determination for exemptions to the DMCA anti-circumvention provisions and has found six such exemptions for noninfringing uses, following the recommendations of the Register of Copyrights.   According to the LC's statement:

"The new classes of works will enable film and media studies professors to make compilations of film clips for classroom instruction, make it easier for owners of wireless telephone handsets to continue to use those handsets when they switch to new wireless carriers, and permit the testing, investigation and correction of security vulnerabilities on compact discs that are distributed with access control technology that compromises the security of personal computers."

The new exemption for use of audiovisual works by college professors is important because it represents a determination that the exemption can apply based on a type of use or user, rather than only based on particular types of works (as was concluded in prior rulemakings):

"Therefore, depending upon the circumstances, it can be appropriate to refine a class by reference to the use or user in order to remedy the adverse effect of the prohibition and to limit the adverse consequences of an exemption."

 This may lead to future exemptions for other types of uses and users, on an incremental, case-specific basis for fair use.   However the bar appears to be quite high to achieve an exemption.    Section 1201 requires review of a number of specific factors, in addition to an assessment that the underlying use is noninfringing.  For example, in the current rulemaking, the Register recommended against a general exemption for fair use, as well as an exemption for "space-shifting": 

"In the absence of any persuasive legal authority for the proposition that making copies of a work onto any device of the user's choosing is a noninfringing use, there is no basis for recommending an exemption to the prohibition on circumvention."

The report did not mention the 9th Circuit's ruling in RIAA v. Diamond Multimedia, which established space-shifting to one's portable music player as fair use.  Perhaps the exemption request was considered overbroad, but it would have made helpful to frame the issue with a review of existing authority.

 In any event, the Register considered the case for space-shifting under the Section 1201 factors noted above.  In light of these factors, the Register concluded that an exemption would not be warranted:

"On the whole, the Register's observation in 2003 remains equally apposite today: 'in essence, the commentators seek to have their cake and eat it too -- they want copyright owners to provide works in digital formats, but do not want to live with the reasonable measures copyright owners feels they must take to guard against the risks that this digital distribution entails.'"

"Given the wide availability of the works in a wide array of formats in the digital marketplace, the Register finds no reason for recommending an exemption to the prohibition for purposes of space-shifting activity."

Here's the Streamcast decision, in which the California district court, on remand from the Supreme Court's Grokster ruling, has found Streamcast liable for inducing copyright infringement.  Streamcast was the remaining defendant in the Grokster case, as Grokster settled last November and Sharman Networks is said to have settled in August.  The $50 million settlement that Grokster made is "to be reduced by any judgment against the Grokster Parties," namely pursuant to this ruling.   

And here's some of the initial commentary on the 60 page ruling:

The RIAA press release calls the ruling a "significant victory". 

The EFF's analysis here notes that:

"In finding StreamCast liable for inducement, the court said:

Thus, Plaintiffs need not prove that StreamCast undertook specific actions, beyond product distribution, that caused specific acts of infringement. Instead, Plaintiffs need prove only that StreamCast distributed the product with the intent to encourage infringement.

This is a remarkably broad statement, and is at odds with the Supreme Court's view that an intent to encourage infringement must be accompanied by 'clear expression or other affirmative steps' beyond the mere distribution of a product."

On the Patry Copyright Blog, William Patry discusses the case and comments here that:

 "I have had many discussions with friends about whether Grokster did create a new third theory of liability, separate from the inducement prong of classic copyright contributory infringement. I have taken the position it did and further that it did so deliberately to kill off Sony."

This comment has led to a lively exchange of comments on Professor Patry's blog, including postings signed anonymously by "The Sony safe harbor", asserting "The sky has not fallen, nor have I."

Eric Goldman points us to a terrific resource on online defamation law -- an article entitled Wikimunnity and spreadsheet summarizing the relevant case law on 47 USC 230, the Communications Decency Act.  Both were authored by Ken Myers through the Harvard Berkman Center.  Eric also has a related post relating to online community rating systems. 

Section 230 provides:

 "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."  [Section 230(c)(1)]

It preempts any state to the contrary: "[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section." [Section 230(e)(3)] 

But it does not protect online service providers from liability relating to intellectual property: " Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property."  [Section 230(e)(2)] 

The EFF also has these useful resources on online defamation and Section 230.

Btw Eric has also posted about his fall cyberlaw class at Santa Clara -- the syllabus is a helpful review of legal developments in the past year -- we're glad to have him back here in Silicon Valley!

Here are more reports of the content industry's death at the hands of technology being greatly exaggerated.  According to the EFF, "The Consumer Electronics Association is running an ad this week in Roll Call, the Capitol Hill newspaper, reminding Congress of occasions in the past when the entertainment industries cried wolf about new technologies."   They're highlighting what appears to be a persistent credibility problem -- the quotes are here.  Via Boing Boing.

Eric Goldman has a thoughtful post about a new case, Interscope Records v. Duty, and whether making files available in one's P2P directory constitutes an infringing "distribution" -- including commentary from Fred von Lohmann on how this issue is being "hotly contested on a variety of fronts".   See prior post here on the EFF's amicus brief on this issue.  The issue has also been implicated in the Napster investor liability litigation, as well as in S. 167, which became law last year.  See prior posts on the subject --   here and here.

What's going on in Pasadena?  Just last month the issue decided by the Ninth Circuit was use of a sample in Jennifer Lopez's rap song, see prior post.  This time it's use of a "Flashdance" sequence in J.Lo's music video for the song "I'm Glad" that's the source of the dispute.   This is the album.

In Marder v. Lopez, the Ninth Circuit upholds the validity of a general release relating to  the movie "Flashdance".  The release was executed by  Maureen Marder, a dancer whose life was the basis for the film's story.  The money quote (forgive the pun):

"Furthermore, though in hindsight the agreement appears to be unfair to Marder -- she only received $2300 in exchange for release of all claims relating to a movie that grossed over $150 million -- there is simply no evidence that her consent was obtained by fraud, deception, misrepresentation, duress, or undue influence."

California law governs the release.  The release is attached as an appendix to the opinion, so you can see the language that survived legal challenge. 

Update:  Maureen Marder, the plaintiff, has posted comments on the ruling in our comments section below.   Thanks for sharing your perspective!

 Hilary Rosen blogs in the Huffington Post about the RIAA's tactics of suing consumers.  She notes that the law suits began after she left the RIAA, but acknowledges that the plan was in discussion during her tenure as chairman and CEO. 

"But for the record, I do share a concern that the lawsuits have outlived most of their usefulness and that the record companies need to work harder to implement a strategy that legitimizes more p2p sites and expands the download and subscription pool by working harder with the tech community to get devices and music services to work better together."

What a great quote.  She had previously blogged that this topic was off-limits, with intimations leaning this way, it seemed to us, -- see our prior post regarding same -- and it's terrific to now get her perspective.  We're glad for her leadership in terms of encouraging cooperation between the content and tech communities. 

Here's our take in a quote in this Monday's article on video downloading in the San Francisco Chronicle: 

"It's how you respond to it, whether you embrace it or fight change," she said. "It seems like (Hollywood) is open to embracing it. Though they want to make sure their copyrights are protected, it seems they have more of a balanced approach (and are trying to figure out) how they can participate in these new opportunities rather than just viewing them as competitive, or something that needs to be eliminated. Because then you're protecting your buggy-whip market. At some point you have to say, 'We have cars now.' "

The Federal Trade Commission announced settlement with Take-Two Interactive Software and Rockstar Games over the hidden, sexually explicit "Hot Coffee" content in the "Grand Theft Auto San Andreas" video game.   Here is the released summary of the settlement.  Here is our much shorter summary:  "Don't do it again, or else!"  The settlement is subject to public comment and final approval by the FTC before it becomes effective. 

The FTC had alleged that the game companies engaged in unfair and deceptive trade practices in connection with the marketing of the game.   The game originally had a "Mature" rating which was later changed to "Adults Only" after discovery of the hidden material.    "Respondents did not disclose to consumers that the game discs contained unused, but potentially viewable, nude female skins, and disabled, but potentially playable, software code for a sexually explicit mini-game that the ESRB had not rated." The factual background is laid out in detail in the complaint.

The proposed settlement does not include any current fines but includes compliance requirements and potential fines for noncompliance, to prevent similar incidents in the future.  It extends for twenty years and all directors, officers and other senior personnel are required to sign a statement acknowledging the obligations under the agreement. 

The settlement agreement requires the video game companies to: 

"A.  disclose, clearly and prominently, . . . content relevant to the rating, unless that content has been disclosed sufficiently in prior submissions to the rating authority.

"B.  not misrepresent, expressly or by implication, the rating or content descriptors for an electronic game; and

C.  establish and implement, and thereafter maintain, a comprehensive system reasonably designed to ensure that all content in an electronic game is considered and reviewed by respondents in preparing submissions to a rating authority."

It appears that the video game companies disputed the charges on First Amendment grounds -- the agreement states:

"nothing herein shall constitute a waiver of respondents' right to assert that any of their conduct is or was protected by the First Amendment to the United States Constitution or any analogous provision of a State constitution".

Marty Schwimmer has an edifying post about the flap over who owns the name "Web 2.0". Check it out. See the background on Slashdot; the cease and desist letter from Tim O'Reilly's CMP Media is here. The dispute is over the use of Web 2.0 as service mark for putting on conferences, but given the generic usage of the term, you have to wonder.

William Patry has blogged the recent 9th Circuit case of Laws v. Sony Music Entertainment,Download file.

Recording artist Debra Laws claimed her publicity rights were violated by sampling of her Very Special CD in J.Lo's "All I Have". Laws couldn't make a copyright claim, because the recording was owned and licensed by Elektra Records. The Court held the claim was pre-empted by the Copyright Act:

"On the one hand, we recognize that the holder of a copyright does not have 'a license to trample on other people's rights' . . . . On the other hand, the right of publicity is not a license to limit the copyright holder's rights merely because one disagrees with decisions to license the copyright. We sense that, left to creative legal arguments, the developing right of publicity could easily supplant the copyright scheme."

Thus while this case was clear, there are other cases that are less clear -- such as use of photographs in advertising.

William Patry has this post on the Senate Judiciary Committee hearings yesterday on S. 2644, the Platform Equality and Remedies for Rights Holders in Music Act of 2006.

The text of the bill along with Senator Feinstein's introductory remarks are posted on the DiMA site.

According to Feinstein, the bill is intended to:

"Create Rate Parity -- all companies covered by the government license created in Section 114 would be required to pay a 'fair market value' for use of music libraries rather than having different rate standards apply based on what medium is being used to transmit the music; and

Establish Content Protection -- all companies would be required to use reasonably available, technologically feasible and economically reasonable means to prevent music theft. In addition, a company may not provide a recording device to a customer that would allow him or her to create their own personalized content library that can be manipulated and maintained without paying a reproduction royalty."

Fred von Lohmann says: "Among its provisions is one that would condition the statutory license for webcasting on the use of DRM-restricted formats, which effectively would ban MP3 and Ogg streaming", see EFF Deep Links.

We are waiting for the Ponderous Acronym Elimination Act of 2006 to be introduced. But PAEA doesn't resonate, unfortunately.

Jeff Jarvis has posted here about the state of libel in the blogosphere.

He notes an essay by Glenn Reynolds titled "Libel in the Blogosphere: Some Preliminary Thoughts", which seeks "to account for the paucity of libel litigation relating to weblogs".

The paper was prepared for the upcoming Berkman Center for Internet & Society - Bloggership: How Blogs are Transforming Legal Scholarship Conference. It's on April 28th in Cambridge. More here.

Reynolds has an apt quote from Eric Hoffer that dates to 1963 but seems written for the blogosphere:

"Nothing is so unsettling to a social order as the presence of a mass of scribes without suitable employment and acknowledged status."

The paper posits two main reasons for a lack of online libel litigation:

(1) Section 230 of the Communications Decency Act, which immunizes ISPs and others for publishing third-party comments; and

(2) technological and cultural aspects of the blogosphere, including norms of rapid correction, third-party substantiation, and hostility to legal threats in the form of public exposure and criticism.

It quotes Jarvis who has opined that we need libel laws less online because of the ability of the victim to respond:

"Do we need the courts to confirm for us that the bozo ranting in the corner is indeed, a bozo? Rarely."

Judge Patel in the Northern District of California has ordered UMG and EMI to produce documents relating to the Justice Department's 2001 antitrust investigation of their online music joint ventures. See order filed today, Download file.

The Napster investor defendants argued that the documents should be produced on the grounds that they were subject to the crime-fraud exemption to legal privilege. They argued that UMG and EMI misled the Justice Department in connection with white papers they submitted when they were under investigation, in violation of 18 USC 1001. See prior post.

According to the Court:

"Here the alleged fraud is the preparation and submission of the two White Papers to the DOJ. The White Papers reflect the culmination of the labels' efforts to bring closure to the DOJ antitrust investigation, and are presumably based on extensive investigation into the dealings between the joint ventures and their label parents. UMG and EMI are therefore ordered to produce all previously withheld communications related to the DOJ's antitrust investigation, including but not limited to the following:

(1) internal investigations of the relationship between the labels and the joint ventures, including the disclosure of competitively sensitive information;

(2) communications made in the course of preparing the White Papers;

(3) other communications concerning what information and documents should be produced to the DOJ."

Thus documents otherwise protected by attorney-client privilege are involved. The allegedly false and misleading statements related to the labels' "most favored nations" licensing clauses, as well as to the efficacy of the "firewalls" put in place between the labels and their joint ventures.

This ruling relates to the Napster investors' antitrust counterclaims and copyright misuse defense. Similar claims have been made in a class action filed in March 2006, Bulcao v. Sony BMG, which alleges antitrust violations in the online music space by the major record labels. See prior post.

While this ruling does not address the labels' copyright infringement claims against the Napster investors, it does appear to reflect some ground gained by them in connection with their defense and counterclaims.

The California Supreme Court has ruled today in Lyle v. Warner Bros. Television, Download file, that no unlawful sexual harrassment occurred in connection with sexually explicit talk among writers on the popular "Friends" television show. The case reflects that different rules may apply in the media context where the program involves sexual topics and innuendo. It also reflect that in today's transparent world, even without legal liability, the writers appear to have embarrassed themselves publicly in connection with their conduct, which allegedly included crude talk about the actresses on the show.

Public performance rights organizations saw marked increases in new media revenues in 2005, according to their reported financial results.

ASCAP recently announced a 50% increase in new media revenues in 2005 -- coming in at $8.1 million. However this is still a drop in the bucket compared to traditional revenue sources, which supported total revenues of $749 million in 2005.

BMI's financial results for 2004/2005, which were reported last September, saw a 114% increase in new media revenue, to $11.4 million. Total revenues from all sources were $728 million. According to BMI:

"Tracking the growth of the US market, fees from mobile entertainment (ringtones) accounted for the largest segment of the increase. During the year, more than 500 new digital music providers were licensed, including industry leaders such as the subscription music service Rhapsody, the streaming radio service for mobile services mobZilla, and major wireless carriers."

The QView has blogged a case filed yesterday in Los Angeles Superior Court, Treadline v. Focus Features, in which actor Randy Quaid alleges fraud and misrepresentation led him to waive his usual actor compensation, including profit participation, in what the complaint calls a "movie laundering scheme" behind Brokeback Mountain.

According to the complaint, Quaid was led to believe that the picture was an art house film, and accordingly he sacrificed his seven-figure quote, 5-10% of adjusted gross profit, or 1-5% of first-dollar gross profit. Quaid alleges at least $10 million in damages and seeks recission of the contract as wrongfully procured. Complaint is here.

A class action lawsuit, Bulcao et al v. Sony BMG Music Entertainment et al (06-cv-01752-EMC), has been filed in the Northern District of California against the major record labels, alleging federal and state antitrust violations in the online music space. The complaint names Sony BMG, Sony Corp., Bertelsmann, Time Warner, Warner Music Group and EMI. The suit alleges that in furtherance of a conspiracy to fix inflated prices for music, the defendants restrained the availability of online music. The complaint alleges that:

"Defendants engaged in a prolonged pattern of concerted activity to prevent and delay online music from becoming a competitive alternative to their near monopoly of the CD market. Ultimately, when online music became inevitable, defendants then conspired to fix and maintain the prices for such product."

The complaint contains an interesting chronology of the plaintiffs' perspective on the development of the online music space since the 1990s. It focuses on the labels' joint ventures, MusicNet and pressplay, which were formed in 2001, and alleges that "The financial structure of the joint ventures encouraged Defendant Labels to engage in cartel behavior rather than competition." MusicNet was formed by BMG, Warner and EMI, and pressplay was formed by UMG and Sony. The class period is from March 7, 2002.

The complaint further alleges:

"It was not until the phenomenal success of Apple's iPod portable music players and the creation of Apple's iTunes Music Service in 2003 that defendants finally relented . . . . Thus, widespread distribution of online music through iTunes, to be played on iPods, occurred more than eight years after the underlying technology became widely available."

The complaint notes similar investigations by Eliot Spitzer and the Justice Department.

A related filing notes the pendency of similar antitrust allegations in the continuing Napster litigation, but states that coordination of the cases would not promote judicial efficiency due to the difference in the claims and parties.

The Ninth Circuit has certified,Download file, a very interesting question to the California Supreme Court, in Readylink v. Lynch, namely:

"Does the California Supreme Court's decision in Gates v. Discovery Communications, Inc., . . . and finding no invasion of privacy, under the First Amendment, in the publication of facts about past crimes obtained from public records, apply only to publication by media defendants?"

"Can there be liability under an invasion of privacy theory where a non-media defendant, with a commercial interest in or a malicious motive for publishing facts about a plaintiff's past crimes, does so?"

"Under the commercial speech doctrine, is the speech of a non-media defendant with a commercial interest in or malicious motive for publishing facts entitled to less protection under the First Amendment than that of a media defendant?"

The case involves a lawyer who posted information on his web site about the head of a company that he was suing, in order to solicit potential clients. He pointed to the man's alleged felony record. The company claimed that this is an invasion of privacy, because this information was not newsworthy.

The case is interesting because it goes to a very timely topic -- when is it meaningful or appropriate to make a distinction between the traditional "media" and "non-media" in free speech matters? And where would the line be drawn, in terms of blogs, web sites, and other publications by so-called commercial "non-media"?

The Supreme Court has recognized some limitations on free speech in the commercial context, but the current test under Central Hudson is fairly limited. However in 2002, Nike v. Kasky, the California Supreme Court ruled against Nike in a case involving misleading statements on commercial speech grounds. Here is a good summary of the state of the law from the First Amendment Center.

Creative Commons announced that the first known court case involving its content license was decided on March 9th by the District Court of Amsterdam. See the press release. According to the post by Creative Commons general counsel Mia Garlick, "The case confirmed that the conditions of a Creative Commons license automatically apply to the content licensed under it."
Update: See CC blog post on this.

The case involved former MTV VJ Adam Curry, who posted photos on Flickr under the Creative Commons Attribution-Noncommercial-Sharealike license. A Dutch tabloid printed several photos, thus violating the non-commercial and share-alike terms of the license.

The newspaper claimed that it was misled by the notice on Flickr that "this photo is public", but the court concluded that the newspaper was in the position to investigate and click on the symbol accompanying the notice 'some rights reserved' that appeared with the photos online.

The decision is in Dutch, and we expect it will be translated into English soon. Here are translated excerpts from Creative Commons:

"All four photos that were taken from www.flickr.com were made by Curry and posted by him on that website. In principle, Curry owns the copyright in the four photos, and the photos, by posting them on that website, are subject to the [Creative Commons] License. Therefore Audax should observe the conditions that control the use by third parties of the photos as stated in the License."

"Audax has not observed the conditions stated in the License […]. The claim […] will therefore be allowed; defendants will be enjoined from publishing all photos that [Curry] has published on www.flickr.com, unless this occurs in accordance with the conditions of the License."

Here are the quotes from the CC press release:

"We are very happy with this decision as it demonstrates that the millions of creators who use creative commons licenses are effectively protected against abuses of their willingness to contribute to the commons," said Paul Keller, Public Project Lead for Creative Commons in the Netherlands.

"This decision confirms that the Creative Commons licensing system is an effective way for content creators to manage their copyrights online," said Lawrence Lessig, Creative Commons CEO & Chairman, "The decision should also serve as a timely reminder to those seeking to use content online, to respect the terms that apply to that content."

See also post on Patry Copyright Blog and post on Trademark Law Blog.

Disclosure: we assisted CC in the drafting of its U.S. licenses.

Last April's ruling in France that required removal of DRM preventing personal copying from DVDs has been overturned by France's highest court. See press reports here and here. Via DRM Watch blog.

Jay Rosen of PressThink, at NYU's journalism school, has released picks for top newspaper blogs, as well as a comprehensive summary chart of newspaper blogging activities.

Here are the rankings:

1. Houston Chronicle

2. Washington Post

3. USA Today

4. St. Petersburg Times

5. Atlanta Journal-Constitution

6. San Antonio Express-News

It is interesting to see how traditional news media are integrating blogs and adapting to the unique aspects of blogging, such as voice (point-of-view) and links outside their own networks, including to community blogs. And doing this in accordance with their editorial policies and journalistic standards.

As an aside, Jay contributed his scholarly insights at last year's BlogherCon -- see his terrific distillation. The conference is on again this year, July 28-29th in San Jose.

The FCC released a report to Congress yesterday summarizing its findings on competition in the video marketplace. Summary points from the news release relating to digital video:

"Incumbent local exchange carriers ("ILECs") have reported plans to provide video service. The larger LECs have accelerated their plans to roll out video services. Verizon has received franchises from numerous local communities and began offering multichannel video service, under the brand name "FiOS," in several of them. SBC is planning to deploy an IP-enabled broadband network called "Project Lightspeed," and Qwest and a number of smaller incumbent LECs are offering, or preparing to offer, MVPD service over existing telephone lines using VDSL or ADSL technologies."

"Several major cellular telephone companies are offering video services through handheld devices such as mobile telephones. Verizon Wireless rolled out V-Cast, a service that offers video programming to cellular telephone users, in February 2005."

"The amount of web-based video provided over the Internet continues to increase significantly each year."

"The video industry continues to evaluate the use of advanced compression technologies, such as MPEG-4/H.264 and Microsoft's VC-1, to replace the MPEG-2 standard in order to decrease the amount of bandwidth required to transmit digital video. These advances are expected to allow existing video delivery services to provide more programming and to decrease barriers to entry for new entrants to the MVPD market."

Here are excerpts from the report on Internet video:

"The amount of web-based video provided over the Internet continues to increase significantly each year. As we have reported in the past, many traditional broadcast and nonbroadcast programmers are currently providing streaming and downloadable video content on their Internet web pages, as do many independent content producers. Several companies are also using the Internet, coupled with a television set-top box that allows an on-screen guide, to provide video directly to a television set. In addition, several companies are using Internet Protocol technology to provide facilities-based IP video, as are many independent content producers."

"Streaming Video. Video streamed over the Internet through the web (sent from the content provider to the subscriber in real-time) is still most viable when delivered over broadband networks. Even with the most advanced compression technology available, broadcast quality video is not possible over a 56 kbps dialup connection. Broadcast quality video is possible, however, at 768 kbps with advanced compression/decompression technology (codecs500) and at 1.5 Mbps or higher broadcast quality standard-definition MPEG-2 is possible. Some industry observers continue to believe, however, that widespread adoption of streaming video will only be possible if connection speeds significantly increase over those currently achieved over cable and DSL broadband. As we reported last year, the Internet2 network continues to facilitate high-quality streaming video using its highly reliable 10 Gbps backbone. The Internet2 network, however, continues to primarily serve the research and academic communities."

"Regardless of the fact that there is relatively minimal availability of high-quality video from such high-speed networks as the Internet2, many households continue to access streaming video using dial-up and residential high-speed Internet access connections. The overall number of homes with access to the Internet continues to grow, as does the number of Americans who access the Internet via a high-speed broadband connection. According to one report, as of June 2005, there were approximately 33.7 million residential high-speed Internet access subscribers, representing approximately 48 percent of the 70.3 million residential Internet subscription households. As of January 2005, an average of 14 percent of all Americans had watched some form of streaming video in the past month, and approximately eight percent of Americans had accessed streaming video content in the past week."

"Many traditional programmers continue to offer streaming video on their websites to increase access to and supplement their regular television programming content. For example, CBS News, CNN, Comedy Central, and Nickelodeon offer 24-hour web access to some regularly featured television programming; ESPN.com has partnered with Major League Baseball to provide access to baseball games and baseball highlights; College Sports TV provides access to live video feeds of some college football games; MTV offers access to regularly featured programming and supplemental content; and In2TV, a partnership between AOL and Warner Bros., allows consumers to stream full-length episodes of popular television series from a library of thousands of television programs. In addition, some traditional content producers are also offering new and unique content over the Internet via the web. For example, Scripps Networks has announced that it will launch ten web-based video channels by the end of 2006; AOL continues to offer such exclusive and specialized video content as the Live8 concert and music videos; and Yahoo and Google are both exploring original content for distribution via the web. Clear Channel Communications plans to add original streaming video programming to some 200 local radio stations' web sites. Maxim Magazine plans to offer free streaming video programming on-demand to Internet users via MSN's video streaming service. MTV plans to launch a free hybrid linear video and video-on-demand channel called MTV Overdrive. "The Knot TV" is a 24-hour streaming video channel featuring wedding-related shows."

"Downloadable Video. As we reported last year, we expect that a large amount of video available through the web will be downloadable video. Downloadable video is available on the websites of both traditional programmers and independent producers of video content. There are numerous online services that allow users to download content to a computer hard drive for viewing on a personal computer, television, or mobile video device. In October 2005, Disney's ABC and Apple's iTunes entered into a deal to offer current and past season episodes of ABC and Disney Channel television shows for download from Apple's iTunes Music Store for viewing on a PC or iPod video player. More established efforts to provide downloadable video include offerings from Movielink, Starz! Ticket on Real Movies, ClickStar and CinemaNow. For example, Movielink, a joint venture of Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios, and Warner Bros. Studios, offers movies, television shows, and other popular videos for download on a rental or purchase basis. Some companies are offering or are planning to offer content distribution via the web for independent content producers. DaveTV, Brightcove, and Wi-FiTV provide an Internet-based distribution interface for content producers of all sizes. Some content producers are offering their services directly to Internet users via websites such as Strandvenice.com, which is an online reality channel that offers a 50-minute series pilot episode for free and charges 99 cents for future 30-minute episodes. Akimbo has partnered with producers and distributors of movies and videos to deliver video programming directly to a subscriber's television using the consumer's existing broadband connection. Akimbo provides the subscriber a set-top box that generates an on-screen guide that enables the subscriber to choose programming from a library of video selections. Akimbo then uses IP technology to deliver the video from a central office, over the Internet, to the subscriber's television."

Marty Schwimmer of the Trademark Law Blog has this post about an EFF amicus brief on the issue of whether making content available on the Internet is a violation of the distribution right. This in the context of Elektra v. Barker, (S.D.N.Y. 1:05-cv-07340-KMK filed 8/19/05) a record industry case against a P2P file sharer. Two industry groups have also filed an amicus brief. See EFF site for more.

This issue has also been implicated in the Napster investor liability litigation, see ruling, Download file, and in S.167, which became law last year, see prior posts here and here.

In honor of the holiday, here are some presidential copyright cases:

George Washington's letters, Folsom v. Marsh, Download file

Gerald Ford's memoirs, Harper & Row v. Nation, Download file

Dwight Eisenhower's memoirs, Dastar v. 20th Century Fox, Download file,
and 20th Century Fox v. Dastar, Download file

Now to the honorary ski trip!

Fred von Lohmann has noted a governmental filing by the RIAA and others, which states the position that copying your CD onto your computer is an infringement, notwithstanding what they represented to the Supreme Court during the Grokster case, see prior post.

However as noted by Denise Howell and on Boing Boing, the RIAA web site contradicts this position, unless they are relying on subtle wording to preserve their position that they are granting permission.

"If you choose to take your own CDs and make copies for yourself on your computer or portable music player, that's great. It's your music and we want you to enjoy it at home, at work, in the car and on the jogging trail." [emphasis added]

See RIAA link.

The RIAA's FAQ on Uploads and Downloads makes good use of modal auxiliary verbs in saying:

"Owning a CD means you own one copy of the music, and the U.S. record industry believes you should be able to make whatever personal use you choose. For example, you may make a compilation recording (on tape or on a CD) to use in the car or while exercising. But it's a very different matter - and clearly neither legal nor fair - to make a copy of that CD or even one song available on the Internet for others to take." [emphasis added]

See also the Mitch Bainwol address at the 2005 NARM Convention, in which he says:

"Key Point: Burning and Ripping Are Becoming A Greater Threat than P2P"

but:

"We have no objection to personal use burning."

But to ripping by negative implication?

It's unclear where these statements are heading. In Bainwol's address, he lists under the topic:

"How Do We Build A Brighter Future"

"Pivot To New Products and Services"
-- DualDisc
-- Kiosks
-- Copy Protected CDs

"Win the Messaging War"

It seems unlikely that suing consumers over ripping CDS to their iPODs will help win the messaging war, and it seems a court would quickly jump to pronounce this fair use as in the Rio space-shifting case and create some case law they don't want on the books.

So this may be more about the transition to copy protection and DMCA issues, which was the context of the filing that has raised this issue -- the Copyright Office's anticircumvention rulemaking proceedings.

Thanks to Phil Gomes.

The Copyright Office has released its report on so-called orphaned works, which was commissioned last year by Senators Hatch and Leahy. See prior post on the public comment process. The report concludes that:

1. "The orphan works problem is real.

2. The orphan works problem is elusive to quantify and describe comprehensively.

3. Some orphan works situations may be addressed by existing copyright law, but many are not.

4. Legislation is necessary to provide a meaningful solution to the orphan works problem as we know it today."

The report recommends changes to the Copyright Act's remedies section in the situation where the user performed a "good faith, reasonably diligent search" to try to locate the copyright owner and gave attribution to the source, where possible. See text of proposed legislation, Download file.

In this situation, remedies would be limited to "reasonable compensation" for the use -- no statutory damages. If the use was not for commercial advantange and if the use was stopped upon receiving notice of the copyright claim, no monetary damages would accrue.

In determining "reasonable compensation" the report references the case of Davis v. The Gap, Download file,noting:

"As that decision makes clear, reasonable compensation would equal what a reasonable willing buyer and a reasonable willing seller in the positions of the owner and user would have agreed to at the time the use commenced, based predominantly by reference to evidence of comparable marketplace transactions."

"As the Davis case suggests, the burden is on the copyright owner to demonstrate that his work had fair market value, and such assertion cannot be based on 'undue speculation.'"

No injunctive relief would be permitted if the reuse created a new derivative work with a "significant amount" of the user's new expression.

This proposal seems like a reasonable step to create some flexibility in the system, in light of the confluence of an extended copyright term with no formalities to maintain copyright interests and the fact that copyrights are regularly implicated through today's digital uses.

After a recent order, Download file, denying summary judgment in Harris v. San Jose Mercury News, the plaintiff, photographer Christopher Harris, is seeking to amend his complaint and proceed with a class action against the paper.

The case involves the practice of using photos from books without permission as part of a book review. See prior post. The newspaper is arguing this is fair use, while the plaintiff alleges copyright infringement and DMCA violations from removing the copyright notice from the image.

In a two page order, the Court stated:

"Defendant argues that use of the photo was the equivalent of a pictorial quotation from the book and similarly falls under the fair use exception. Yet the photograph was obviously marked as a copyrighted photograph in the book, both on the page the photograph appeared and then again in the credits in the back of the book. In other words, the photograph was a copyrighted work within a copyrighted work."

"As a result, the Court cannot say as a matter of law that use of a copyrighted photograph in a book review, in which the book clearly states that the photograph is copyrighted, constitutes fair use."

It's not clear why the court couldn't weigh the various fair use factors against each other and make a determination. Contrast the recent case, also in the Northern District of California, in which use of copyrighted music posters in a book about the Grateful Dead was held to be fair use. See prior post.

The MPAA announced suits against consumers in Nebraska and Indiana yesterday for copyright infringement from unauthorized P2P file sharing. See the MPAA announcements, here and here.

It appears that part of the MPAA strategy is public recrimination, as the announcements identify the defendants, label them "Internet thiefs" and state that "Those who have not settled are being named in individual law suits."

Hopefully the MPAA, which has the invaluable benefit of learning from the RIAA's mistakes, has screened out the sympathetic grannies and little kids.

The Nebraska suit against Tara Brown was filed by Sony's Screen Gems, and the Indiana suit against Nada Stjelja was filed by Disney Enterprises.

The new Copyright Royalty Judges appointed this month have their work cut out for them. In accordance with Section 803 of the Copyright Act, they will be looking at compulsory license rates for:

1. Making and distributing phonorecords under Section 115;

2. Noncommercial broadcasting under Section 118;

3. Pre-existing subscription and satellite digital audio radio services under Section 114 and 112; and

4. New XM Radio music subscription service in basic cable package bundle under Section 114 and 112.

This is in addition to its work on webcasting royalty rates, which is already underway -- a 60 day discovery period extends through early March. See prior posts regarding DIMA proposal and SoundExchange (RIAA) proposal.

A committee appointed by the Library of Congress will hold public roundtables on potential changes to the copyright exceptions for libraries and archives set forth in Section 108 of the Copyright Act. The Section 108 Study Group committee members are listed here.

The roundtables will be held in March in Los Angeles and Washington D.C. See the announcement. They will address four main topics:

(1) eligibility for the Section 108 exceptions,
(2) exceptions for copies made for preservation and replacement purposes,
(3) access to digital copies outside the premises of libraries and archives, and
(4) separate treatment for unpublished materials.

The subject of access to digital copies outside the physical premises of libraries is clearly a topic of widespread current interest. Without addressing what may be fair use under Section 107 of the Copyright Act, the committee has published an issues paper that frames the issue as follows:

"Currently section 108 requires that libraries and archives that make digital copies for preservation or replacement purposes restrict public availability of those copies to their premises. . . . Members of the library community have commented that a premises-based view of libraries and archives is anachronistic in the digital age. Libraries and archives, say these commentators, cannot adequately serve their patrons if they operate solely as 'brick and mortar' institutions."

"On the other hand, expanding non-licensed electronic access to digital works presents a very serious concern to publishers, authors and other rights holders, given the ease of copying and re-transmission of digital media, and the growing availability of and markets for licensed copies in digital form."

The issue paper suggests three possible approaches to providing electronic access to library materials, including (i) user community restrictions, (ii) simultaneous user restrictions; and (iii) use of access and copy controls, as well as user agreements.

The Study Group has also posted a useful list of background papers relating to libraries and digital copyright.

The California District Court hearing the remand from the Supreme Court in the MGM v. Grokster case has extended the summary judgment briefing schedule -- the hearing will be May 1st, 2006. See yesterday's scheduling order, Download file.

StreamCast and Sharman Networks remain as defendants in the case. Grokster and related parties settled in November 2005, agreeing to a permanent injunction and payment of $50 million. The settlement covered Grokster Ltd., Swaptor, Ltd., Daniel B. Rung, Matthew A. Rung, and Michael Rung as defendants. The $50 million is to be reduced by any judgment against the Grokster Parties in Jerry Leiber, et al. v. Consumer Empowerment VB a/k/a FastTrack, et al., Case No. CV 01-09923 SVW (FMOx). See the settlement order,Download file, and prior post.

In KISS Catalog v. Passport International, Download file, the District Court for the Central District of California has held that the federal anti-bootlegging statute, 17 U.S.C. 1101, is constitutional.

This vacates an earlier decision, which held that the statute violates the "for limited times" provision of the Copyright Clause. The case was reconsidered on the motion of the United States, which intervened after that ruling.

In finding the statute constitutional, the Court concluded that the legislation was within the scope of the Commerce Clause and not "fundamentally inconsistent" with the Copyright Clause.

"[T]he statute merely proscribes conduct not otherwise addressed, prohibited or protected by the Copyright Clause: the non-consensual recording of a live performance. Stated differently, what Congress regulates here is an unauthorized and (by this statute) unlawful recording of a live performance, not an authorized, protected, and constitutionally-encouraged fixation of an author's original work. Thus, the Statute complements, rather than violates, the Copyright Clause by addressing similar subject matter, not previously protected -- or protectible -- under the Copyright Clause."

This follows the 11th Circuit's holding in US v. Moghadam, Download file. US v. Martignon, which reached the opposite conclusion, is currently on appeal in the Second Circuit. Professor Patry has some excellent background on the anti-bootlegging statute, here, and here.

As if they were ever on. The Napster investor liability litigation continues -- with a motion filed by defendant Hummer Winblad, which alleges that UMG and EMI violated the law (18 USC 1001) by making false statements to the Justice Department during its 2001 antitrust investigation of the major label's online music joint ventures, pressplay and MusicNet.

This filing follows a summary judgment motion made by defendants Bertelsmann and Hummer Winblad, which is set for hearing on February 9, 2006. See prior post.

California's new law regulating access by minors to violent video games was preliminarily enjoined today on the grounds that it violates the First Amendment. The new law would have gone into effect on January 1st. See the opinion in Video Software Dealers Association v. Schwarzenegger, Download file. See prior post for background on the law.

The Court determined that the law failed to satisfy the strict scrutiny test for content-based regulations. The Court leaned on the recent rulings in Illinois and Michigan that yielded the same result.

The Ninth Circuit has issued a ruling in Brothers Records, Inc. v. Jardine,Download file, a dispute between founding members of the Beach Boys. The case is mostly interesting because it involves the Beach Boys, and serves as a reminder of the issues that can arise out of musical group agreements.

Four founding members of the musical group formed Brothers Records, Inc. (BRI). In 1998, after the death of founding member Carl Wilson, BRI granted permission to Michael Love, another founding member, to use the Beach Boys trademark on a nonexclusive basis. Michael Love then teamed up with another original member, Bruce Johnston, to tour as the Beach Boys.

BRI successfully sued Alan Jardine, (another founding member and BRI shareholder and director) for trademark infringement, and obtained an injunction in 2001 preventing him from using the group name. The net of this is that the licensed Beach Boys tour appears to have most of the tour dates compared to the unlicensed activities of Jardine. (Brian Wilson appears to be doing just fine on his own).

Jardine then brought suit alleging breach of fiduciary duties and breach of contract by the other BRI shareholders, and this ruling goes in his favor to permit him to proceed with those claims. The Court held that Jardine's claims were sufficiently distinct from the trademark claims such that he was entitled to litigate them.

The Copyright Royalty Board has commenced a rulemaking process to determine appropriate royalty rates for the transmission and ephemeral statutory licenses for sound recordings that would apply to a new type of service. According to XM Satellite Radio's petition to the CRB:

"This new type of subscription service performs sound recordings on digital audio channels programmed by the licensee for transmission by a satellite television distribution service to its residential customers, where the audio channels are bundled with television channels as part of a `basic' package of service and not for a separate fee."

According to XM Radio's petition, the new service will include a number of its music and non-music audio channels and will be "a part of the DirecTV basic package of service, without requiring payment of a separate subscription fee."

The new service would utilize the statutory copyright licenses provided in 17 U.S.C. 114(d)(2) (for performance by means of subscription digital audio transmission) and 17 U.S.C. 112(e) (for ephemeral recordings solely for use in those transmissions).

Interested parties must respond by January 4, 2006.

In BMG Music v. Gonzalez,Download file, the 7th Circuit has affirmed that a consumer infringed music copyrights by downloading and saving music files, despite her claim of fair use.

Gonzalez downloaded over 1300 songs from the KaZaA P2P file-sharing network. The case focused on 30 of these downloads, as it was disputed whether she owned or later purchased the CD for the other songs.

Gonzalez argued that her downloading was fair use because she was just sampling the songs to determine whether to buy them or not at retail. The Court was unpersuaded by this argument. It noted that she did not delete the songs after deciding not to purchase them. It also noted that the files she downloaded were posted in violation of the copyright law.