2017 was a tumultuous year – even in the copyright world.
In this three-part series, we’re taking a look at the most significant U.S. copyright moments of 2017 from a few different perspectives: what happened on Capitol Hill, in the courts, and in the headlines.
With Congress concentrating on other issues, most changes to copyright law in 2017 came through the courts. A dozen cases made a notable impact, and another six are ones to watch in 2018.
Perfect 10, Inc. v. Giganews, Inc
A dozen cases made a notable impact, and another six are ones to watch in 2018.
In January, the U.S. Court of Appeals for the Ninth Circuit affirmed the lower court ruling in favor of Giganews in Perfect 10, Inc. v. Giganews, Inc., a case involving the unauthorized distribution of photos over Giganews’ servers. The court found that Giganews did not engage in the volitional conduct necessary to be culpable for unauthorized display, distribution, and reproduction of Perfect 10’s images. The Ninth Circuit thus declined to hold Giganews liable for contributory copyright infringement, holding that Perfect 10 “failed to raise a triable issue of fact as to whether Giganews materially contributed to or induced infringement of Perfect 10’s copyrights.” The court also declined to hold Giganews liable for vicarious infringement, holding that the direct financial benefit inquiry requires evidence that a plaintiff’s specific works acted as a “draw” to a defendant’s service, rather than a showing that infringing activity in general acted as a “draw.” Later in the year, the U.S. Supreme Court denied the cert petition in the case.
Fox Television v. Aereokiller
In March, in Fox Television v. Aereokiller [aka FilmOn case] — a case involving whether a service which transmits broadcast television over the internet is eligible for a compulsory license under Section 111 — the U.S. Court of Appeals for the Ninth Circuit, in a reversal of the lower court’s decision, held that internet-based retransmission services are not eligible for a cable compulsory license under Section111 of the Copyright Act. Shortly after the decision and the Ninth Circuit’s denial of FilmOn X’s petition for rehearing en banc, FilmOn X, which also had appeals pending in the DC and Seventh Circuits, settled all its disputes with CBS, Fox, Disney, and NBC.
Star Athletica v Varsity Brands
In June, the U.S. Supreme Court handed down a very important decision to the fashion design industry in the so-called cheerleader uniform case, Star Athletica v Varsity Brands, holding that a feature incorporated into the design of a useful article is eligible for copyright protection if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic or sculptural work — either on its own or fixed in some other tangible medium of expression — if it were imagined separately from the useful article into which it is incorporated. In so holding, the Court explained that copyright affords “no right to prohibit any person from manufacturing [clothing] of identical shape, cut, and dimensions.” and that “two-dimensional designs appearing on the surface of [clothing]” including “combinations, positionings, and arrangements” of shapes, colors, lines, etc. are protectable by copyright.
Lenz v. Universal Music
The Court also denied the petition for cert in the famous dancing baby case, Lenz v. Universal Music, which concerned the liability of a copyright owner under Section 512(f ) for materially misrepresenting in a notification of claim that the challenged material or activity is infringing. The issue at stake was whether a DMCA takedown notice sender formed a good faith belief that material or activity is infringing.
Elsevier Inc. v. Sci-Hub, ACS v. Sci-Hub
Also in June, in Elsevier Inc. v. Sci-Hub — a case involving Sci-Hub’s unauthorized reproduction and distribution of Elsevier’s copyrighted works — the U.S. District Court for the Southern District of New York ruled in favor of Elsevier, awarding the publisher $15 million in damages. Likewise, ACS took Sci-Hub to court, although that verdict included the additional boon of the ability to seek orders against search engines like Google to cut links to Sci-Hub due to its status as an infringer.
Disney v. VidAngel
In August, the Ninth Circuit affirmed a lower court ruling in Disney v. VidAngel, in which VidAngel which was providing a service that decrypts DVDs and filters “objectionable” content from movies and TV shows, and streams the programs to its customers. The U.S. District Court for the Central District of California issued a preliminary injunction against VidAngel, holding that its service violated Plaintiffs’ exclusive rights to reproduce and publicly perform the movie-studio plaintiff’s copyrighted works, and violated DMCA Section 1201(a)(1)(A) by circumventing the technological protection measures on DVDs and Blu-ray discs. It further rejected VidAngel’s argument that a content filtering service complies with the Family Home Movie Act (FMA) as well as its fair use defense.
Penguin Random House v. Colting
In September, in Penguin Random House v. Colting [aka Kinderguides case] — a case involving a series of children’s books that “contain a condensed, simplified version of the plot[s]” of classic American novels — Judge Rakoff of the U.S. District Court for the Southern District of New York ruled in favor of the authors and book publishers, holding that the series of children’s books “infringe[d] upon plaintiffs’ exclusive right to reproduce their novels … and [their] exclusive right to exploit the market for derivative works based on their novels.”
Naruto v. Slatter
Also in September, the famous Monkey-Selfie case — Naruto v. Slater — settled. The case, which PETA brought against photographer David Slater who they alleged infringed the copyright belonging to a monkey, raised the issue of whether a monkey can be considered the author of a photograph. Under the terms of the settlement, Slater agreed to “donate 25 percent of any future gross revenue that he derives from using or selling any or all of the monkey selfies to registered charities dedicated to protecting the welfare or habitat of Naruto and other crested macaques in Indonesia.”
Flo & Eddie v. SiriusXM
In October, in Flo & Eddie v. SiriusXM, a case concerning pre-1972 sound recordings, which are not protected under federal law, and the public performance right, Florida’s Supreme Court stated that, in bringing the case, “Flo & Eddie essentially asks this Court to recognize an unworkable common law right in pre-1972 sound recordings that is broader than any right ever previously recognized in any sound recording” and ruled that “Florida common law does not recognize an exclusive right of public performance in pre-1972 sound recordings.”
The Leaders Institute v. Jackson
In November, in The Leaders Institute v. Jackson, the U.S. District Court for the Northern District of Texas rejected the Perfect 10’s “server test,” in which the Ninth Circuit held that in-line linking (also known as “framing”) images on a website without actually hosting (i.e. copying) those images did not infringe the author’s right of public display. The Dallas court rejected that test, ruling that “to the extent Perfect 10 [case] makes actual possession of a copy a necessary condition to violating a copyright owner’s exclusive right to display her copyrighted works, the Court respectfully disagrees with the Ninth Circuit.” The court went on to say that “the text of the Copyright Act does not make actual possession of a copy of a work a prerequisite for infringement. To display a work, someone need only show a copy of the work; a person need not actually possess a copy to display a work.”
Signature Mgmt. Team v. Doe
Later that month another significant case, this one by the Sixth Circuit in Signature Mgmt. Team v. Doe, held that there is a presumption in favor of unmasking John Doe defendants after a judgment in favor of the plaintiff has been entered. The court explained that “courts must consider both the public interest in open records and the plaintiff’s need to learn the anonymous defendant’s identity in order to enforce its remedy” and that “where a Doe defendant’s speech is found to be beyond the protection of the First Amendment, countering the presumption will require a showing that the Doe defendant participates in a significant amount of other, non-infringing anonymous speech that would be chilled if his identity were revealed.”
U.S. v. BMI
And coming in right under the wire is U.S. v. BMI case, which was decided on December 19. At issue in the case was the Department of Justice’s 100% licensing mandate which it was attempting to enforce under BMI’s consent decree. The U.S. Court of Appeals for the Second Circuit upheld the lower court decision, ruling against the mandate and holding that no provision of BMI’s consent decree prohibits the performing rights organization from engaging in fractional licensing. The decision is tremendous victory for songwriters, composers, and music publishers.
Looking ahead to 2018, there will no shortage of important copyright decisions. In 2017, oral arguments were heard in BMG Rights Management (U.S.) LLC v. Cox Communications in the Fourth Circuit, which involves standards for contributory infringement and repeat infringer policies under the DMCA; Capitol Records v. Redigi, in the Second Circuit, which concerns the applicability of the first sale doctrine to the distribution of digital files; and Oracle v. Google in the Federal Circuit, which relates to whether Google’s use of Oracle’s software code was fair use; Fox News Network v. TVEyes in the Second Circuit, a case involving TVEyes’ service copying of broadcasts from over 1,400 TV and radio stations 24/7 and distributes the content to subscribers under the guise of fair use; and Cambridge University Press v Becker [aka the GSU case] in the Eleventh Circuit, in which several publishers sued for a pattern of illegal distribution of copyrighted book and journal content through digital course management and similar systems controlled by Georgia State University.
In addition, the U.S. Supreme Court is considering the cert petition in Fourth Estate v. Wall-Street.com — a case concerning whether the requirement in Section 411(a) that a “registration of the copyright claim [must be] made” prior to instituting a case for copyright infringement means the application, fee, and deposit must have been submitted, or that the U.S. Copyright Office must have acted to approve or reject the application.
With all these important cases likely to be decided over the next 12 months, 2018 is shaping up to be another important year for copyrights in the courts.