Cirque du Soleil’s Steel Dream is a Legal Nightmare for Justin Timberlake

by Katherine Imp

Cirque du Soleil sued Justin Timberlake last week, alleging that the singer, along with his writers, producers and recording company, “sampled” a portion of Cirque’s song, “Steel Dream” without permission on his 2013 song, “Don’t Hold the Wall”.

Before reading any further, listen to the first 20 seconds of “Steel Dream.” Now listen to Timberlake’s song, beginning at 4:04.

If you were on a jury, would you say that Timberlake and his team used a portion of Cirque’s song in “Don’t Hold the Wall”?

The answer is undoubtedly yes, even if the “Justin Timberlake fan” inside of you is telling you otherwise. Those 15-second tracks are nearly identical.

So can Timberlake and his team get out of this mess?

To answer that question, you first need to understand how “sampling” fits into US copyright law.

“Sampling” occurs when one artist takes a portion of another artist’s song and reuses it in a new song. Note, however, that sampling does not necessarily require use of a pre-existing recording.

Here, Cirque du Soleil has a copyright interest in the composition (codified in 17 U.S.C. § 102(2)) of “Steel Dream” and a second copyright interest in the sound recording (codified in 17 U.S.C. § 102(7)). Thus, even if Timberlake did not use Cirque’s pre-existing recording (that you just listened to on YouTube), he could still be liable for copyright infringement for use of the underlying melody or lyrics.

In the early days of hip hop, no one bothered to get a license to “sample” another artist’s work, but once the music business tanked, publishers and recording companies needed to find more ways to make money. Thus began the trend of requiring a license to “sample” the work of another artist and slapping a copyright infringement claim on anyone who refused to obey.

Under Section 106(2) of Title 17 of the United States Code, the owner of a copyright has the exclusive rights “to prepare derivative works based upon the copyrighted work.” The argument being made by publishers and recording companies (and Cirque du Soleil) is that “sampling” is a derivative work and thus protected under copyright law.

Timberlake now has three arguments he can make:

1. No Copyright Infringement

To establish infringement, Cirque du Soleil must prove that it has a copyright interest in “Steel Dream” and that Timberlake copied elements of the work that were original. “Copying” requires Cirque to prove that Timberlake’s song is “substantially similar” to Cirque’s song and that Timberlake had access to the song.

Timberlake could argue that the similarity is not substantial and that no one from his team saw the show or heard Cirque’s song prior to creating “Don’t Hold the Wall”.

2. Fair Use

17 U.S.C. § 107 allows one artist to use the copyright of another artist without permission in certain, limited situations. In determining whether a particular use is “fair”, courts will consider: the purpose of the use; nature of the copyrighted work; the amount used; and the effect the use has on the copyrighted work’s commercial success.

Timberlake would have to admit to using “Steel Dream” without permission, but could defend himself by arguing that the use was “de minimis” and did not hurt Cirque’s ticket and record sales.

3. De Minimis

Some courts have argued that “de minimis” is available as an alternative to fair use in cases where the violation is “so trivial that the law [should] not impose legal consequences.” Ringgold v. Black Entertainment Television, Inc., 126 F.3d 70 (2d Cir. 1997).

Timberlake could argue that the copyright infringement should be privileged because of the extremely limited use, the lack of harm on Cirque’s sales and the excessive cost of adjudication (a lawsuit like this could cost hundreds of thousands of dollars).

While these may seem like good arguments, courts have been hesitant to side with defendants. In Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792 (6th Cir. 2005), the court ruled that the defendant’s sampling of a two-second guitar chord constituted copyright infringement.

Getting back to my question above: Can Timberlake and his team get out of this mess? Unlikely.

The legal system around sampling is a complete disaster. According to Variety, Timberlake has had several copyright infringement claims filed against him just in the last year alone.

None of the courts want to be responsible for establishing a bright-line rule, and none of the publishers or recording companies want to force the courts to establish a bright-line rule (e.g., by suing the creator of Girl Talk, whose entire work is made up of sampling) for fear that the resulting rule will not be in their favor. And most artists don’t have the money to fight the legal battle so they pay the license fee or wait to get sued and then settle as quickly as possible.

All I can say is, I’m glad I’m not a musician in 2016.

Katherine Imp is a transactional entertainment attorney at Cummins & Associates, Ltd., specializing in production legal, film finance and intellectual property matters. Contact Katherine at @KatherineImp or kimp@cumminsassociates.com.

Disclaimer: The information in this column is intended for general information purposes only and should not be construed as legal advice.

To see the original post, and similar articles, check out Katherine Imp’s SCREEN Magazine column, Street Legal.

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Filed under Copyrights, Entertainment Law, Intellectual Property, music

Are Your Social Media Brand Endorsements and Sponsored Ads FTC Compliant? A Guide for Proper Disclosures

by Jason W. Brooks

Endorsements from a celebrity and/or social media influencer are an important tool used by advertisers to build a brand’s image and persuade consumers. Moreover, it’s understandable that any brand ambassador would like to preserve an “organic” feel when conveying their messages. But the law, governed and enforced by the Federal Trade Commission (“FTC”) under the FTC ACT (15 U.S.C. §§ 41-58, as amended), states that “endorsements must be truthful and not misleading.” FTC relies on its recently updated Guides Concerning Use of Endorsements and Testimonials in Advertising (the “Guides”, as set forth in 16 CFR Part 255) to ensure that consumer products and services are described truthfully online, and that consumers understand what they are paying for. The Guides represent administrative interpretations of laws enforced by the FTC, and therefore failure to adhere to the voluntary compliance requirements set forth therein, may result in law enforcement actions for violations of the FTC Act.

The Guides themselves are not regulations, and so there are no civil penalties associated with them. But if advertisers don’t follow the Guides, the FTC may decide to investigate whether the practices are unfair or deceptive under the FTC Act, and may take corrective action under Section 5 of the FTC Act (15 U.S.C. 45). The following then, shall serve to advise regarding the basic legal requirements you must follow when making sponsored endorsements of any product, service or brand on any of your social media platform.

In short, in order to comply with the FTC, you must clearly and conspicuously disclose your material relationship with any brand which you are endorsing via your social media. The following will provide some guidance as to how and when you should disclose, but as a general rule of thumb, “when in doubt, disclose.

What Is An Endorsement?

According to the FTC, an endorsement means “any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.” Thus, in order to be FTC compliant as the endorser of any brand’s product or service, you must ensure the following with respect to any of your endorsements:

  1. The endorsement must reflect your honest opinion, belief, finding, or experience with respect to the product or service you are endorsing; and
  2. You must have been a bona-fide user of the endorsed product or service at the time you made your endorsement.

[For example, you would not be permitted to tweet about how delicious you believe a particular beverage tastes, if (a) you’ve never actually tried that beverage, or (b) you don’t honestly believe the beverage is delicious].

Material Connections Must Be Disclosed.

In addition to the foregoing requirements, when there exists a connection between the endorser and the seller of the advertised product or service that might materially affect the weight or credibility of the endorsement, that connection must be fully disclosed. In other words, your endorsement of any product or service is subject to enforcement if the brand/advertiser, or someone working for the brand/advertiser, pays you or gives you something of value or provides some other incentive to mention their product on any of your social media.

Required Disclosures Must Be Clear and Conspicuous.

The hard and fast rule is, material relationships between brand and endorser on social media must be clearly and conspicuously disclosed. The FTC has provided specific guidance as to how to address these disclosures on various social media platforms, as follows:

  1. On Twitter, Facebook and Instagram: While there are no specific rules as to how the disclosure needs to be stated, the FTC has taken a firm stance that the limited 140-character space available on Twitter does not change the need to disclose in an endorsement tweet. According to the FTC, “the words ‘Sponsored’ and ‘Promotion’ use only 9 characters; ‘Paid ad’ only uses 7 characters; and starting a tweet with ‘Ad:’ or ‘#ad’ takes only 3 characters” – each of these would likely be effective disclosures, per the Guides. Also note that the disclosure must be made on each and every tweet you make, even if you are tweeting the same message consecutively (i.e. minutes or even seconds apart) or if the tweet is broken up into several parts. The same rules apply to Facebook and Instagram posts, with the caveat that, because you are not limited in space on these alternative platforms, you should err on the side of making your disclosure longer and more obvious, rather than falling back on the same abbreviated text that would be appropriate for Twitter.
  1. Contests & Sweepstakes Rules Need Disclosure: If you are promoting/sponsoring a contest on behalf of a brand, a disclosure is also required. Moreover, the responsibility falls on you (e.g. the contest sponsor) to make sure people entering the contest make the disclosure themselves if the contest requires them to review or promote a product/service. Again, the key is whether the gift would affect the “weight or credibility” of an endorsement, but determining where to set the bar is difficult, so it’s always safer to disclose. For example, if you, as a brand ambassador, are calling upon your social media followers to tweet about, or make an online review of the brand, in exchange for some type of gift or reward, then your call to action must also require that your followers disclose the contest/sweepstakes. Displaying a hashtag like “#contest” or “#sweepstakes” should be sufficient as a disclosure; however, using something like “#BrandXYZ_Rocks” or merely the abbreviated “#sweeps” is not sufficient because the relationship is not deemed obvious enough and people might not understand what the disclosure means.
  1. Video Disclosures Must Be Made Early And Often: For any YouTube or other sponsored online video (e.g. Snapchat, Vine, etc.), it’s not enough to have a disclaimer on the details page. The FTC has stressed that proximity and placement are two determinative factors as to the conspicuousness of the disclosure. Therefore, your disclosure must be made at the beginning of the video and preferably repeated multiple times for longer-form pieces. Similarly, streaming video, such as Periscope or when making a video/mobile game review as a sponsor/ambassador of a gaming company, also needs disclosure throughout the video. As an example, stating throughout your videos or live streams language such as, “Sponsored by [name of the company],” would be sufficient as a disclosure.
  1. Facebook “Likes” Might Require Disclosure: The FTC has not clearly addressed this specific issue yet, however, you should still stick to the same general rule of clearly disclosing if you are acting as a brand ambassador/sponsor to incentivize your followers to “Like” a brand on Facebook. It should be noted however that the FTC is unequivocally against the practice of “fake likes.”

Conclusion.

In summary, whenever you are acting as a Brand Ambassador or Sponsor of any product or service, you must ensure that people get the information they need to evaluate your sponsored statements. If you were given something for free or paid to promote a product or service, clearly state so. You should use clear and unambiguous language and make the disclosure stand out. Consumers (i.e. your social media followers) should be able to notice the disclosure easily and should not have to look for it. And finally, if your disclosures are hard to find, tough to understand, fleeting, or buried in unrelated details, or if other elements in your ad or message obscure or distract from the disclosures, they don’t meet the “clear and conspicuous” standard and you could find yourself the subject of an action from the FTC.

Jason W. Brooks, Esq. is an entertainment attorney and a founding partner of altView Law Group, LLP. Jason specializes in transactional business and legal affairs matters, particularly in the areas of New Media and TV production. Feel free to contact Jason via email: Jason@altviewlawgroup.com or follow him on Twitter: @Jasonbrookslaw.

Disclaimer: The information in this post is intended for general information purposes only and should not be construed as legal advice.

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Producer Threatens CHIRAQ: Copyright Violation or Publicity Stunt?

by Katherine Imp

Recently, with CHIRAQ gearing up for its December 4th debut, producer Roderick Powell accused Spike Lee of copyright infringement, claiming that Lee’s new film has the same “look and feel” of his 2003 feature, A MIAMI TAIL.

Let’s not beat around the bush: A MIAMI TAIL and CHIRAQ are similar. They are both contemporary versions of the Greek comedy, Lysistrata. They both have a female lead and a predominantly black cast. And most notably, they both tell the story of women withholding sex from their men to stop gun violence. But is this enough to constitute copyright infringement?

First, a lesson in copyright infringement:

To establish copyright infringement, the plaintiff must prove: (1) that he, she or it has a valid copyright; and (2) that the defendant copied original elements from the plaintiff’s copyrighted work.

Second, a lesson in Greek mythology:

In Athens, circa 411 BCE, Aristophanes wrote a story about Lysistrata, a woman who attempted to end the Peloponnesian War by persuading Greek women to withhold sex from their men until peace was negotiated.

Third, a lesson in public domain:

The public domain is a realm of material that is unprotected by intellectual property rights. In other words, you can copy the original work of another person or entity without his, her or its permission.

The realm of material in the public domain can be divided into many categories. The most pertinent categories to our fact pattern include:

  • Materials that were previously copyrighted but whose terms have since expired;
  • Materials that predated intellectual property law; and
  • Material that is not protectable under copyright law such as ideas, genres and themes.

In the United States, a copyright term is life of the author plus 70 years, or, if the author is a corporation, 95 years.

Now for an analysis of the facts:

  • Powell needs to prove that he has a valid copyright in A MIAMI TAIL.

Typically, a copyright registration certificate from the US Copyright Office will suffice. Here, a quick search on the US Copyright Office database links RAP Filmworks, LLC, Maverick Entertainment, Inc. and Lions Gate Films, Inc. to the film’s copyright, so further investigation is needed to determine whether Powell actually meets this first requirement.

  • Powell needs to prove the Lee copied elements of A MIAMI TAIL and that such copying was improper under copyright law.

This element can be proven through direct evidence, such as witness testimony, the defendant’s own admission, or photos or video catching the defendant in the act. More commonly, however, copying is demonstrated through circumstantial evidence, such as access to the plaintiff’s work and probative similarities between the works. The type of similarity that is generally regarded as the most “probative” of copying is the existence of common errors, whether factual or aesthetic in nature, between the two works.

Without having seen CHIRAQ, I cannot comment as to the probative similarities between it and A MIAMI TAIL. But if we circle back to the facts above, I’d argue that Powell’s accusations against Lee are nothing more than a publicity stunt. The crux of the story – a woman who told other women to withhold sex from their men to stop the violence surrounding their community – is, if anything, original to Aristophanes. And Aristophanes’ work is in the public domain.

The similarities in genre (comedy) and theme (urban gun violence) also fall within the public domain and are therefore not copyrightable by Powell.

As I see it, Powell saw an opportunity to get more eyeballs on his film by hinting at the overarching similarities between it and a film that is and will be receiving a lot of buzz in the upcoming months. Either that, or he really needs to read up on copyright law.

Katherine Imp is a transactional entertainment attorney at Cummins & Associates, Ltd., specializing in production legal, film finance and intellectual property matters. Contact Katherine at @KatherineImp or kimp@cumminsassociates.com.

Disclaimer: The information in this column is intended for general information purposes only and should not be construed as legal advice.

To see the original post, and similar articles, check out Katherine Imp’s SCREEN Magazine column, Street Legal.

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Filed under Copyrights, Entertainment Law, Motion Picture

Nobody Puts Your 401K in the Corner: Should Dirty Dancing IP Prevail?

by Katherine Imp

Did this title make you think of the 1987 film, Dirty Dancing?

Unless you’ve been living under a rock for 28 years, the answer is probably yes. According to the American Film Institute, “nobody puts baby in a corner” is one of the top 100 greatest movie quotes of all time.

Unfortunately for TD Ameritrade, the creator of “nobody puts your old 401(k) in the corner,” popular quotes generate revenue. And Lionsgate has no intention of giving TD a free pass.

TD Ameritrade’s Dirty Dancing ad spoof ran for seven months before TD received a cease and desist letter from Lionsgate, coupled with a 7-figure settlement demand. On June 26, TD fought back, filing for declaratory relief against Lionsgate in the Southern District of New York. Lionsgate responded by filing its own lawsuit on July 2 in the Central District of California, asserting claims like false association, unfair competition, trademark infringement and trademark dilution.

Who should win?

There is no question that Lionsgate has protection under copyright law. Lionsgate copyrighted the motion picture back in 1987 when Dirty Dancing was first released. However, the Supreme Court has unequivocally held that a “parody” qualifies as fair use. Meaning, TD can use some elements of the film Dirty Dancing without Lionsgate’s permission so long as the use qualifies as a parody.

Trademark law is a little trickier. Trademark law seeks to prevent confusion among consumers as to the origin, sponsorship or approval of goods or services. As a result, the central issue in every trademark infringement case is the likelihood of consumer confusion.

Unlike copyright law, parody is not a defense to a claim of trademark infringement. Instead, the “likelihood of confusion” test requires an analysis of several factors, including freedom of expression concerns.

Last fall, Lionsgate filed trademark applications with the USPTO for use of the quote “nobody puts baby in a corner” in connection with various goods (e.g., paper-based items, clothing, glass and household items). This filing took place one month before the TD ad was released.

In its complaint, Lionsgate also argued that its common law trademark rights (rights to a trademark not registered with the USPTO) date back to 1987.

That said … I’m with TD on this one. For one, TD’s “use” of the Dirty Dancing quote is in connection with the financial services industry, not the goods encompassed in the trademark applications filed last fall. Secondly, TD’s “use” of the quote was intended to amuse, not confuse. In fact, I’d further argue that because the quote is so recognizable, consumers would actually have an easier time distinguishing between a parody and the original.

However, I also understand why Lionsgate won’t back down until it receives a 7-figure settlement check from TD Ameritrade. Lionsgate is an entertainment conglomerate whose sole value is in its intellectual property rights. Giving TD a free pass, regardless of whether the use was proper or improper, opens the door for other third parties to push the boundaries between fair use and infringement.

Whether or not these powerhouses decide to settle or battle it out in court remains to be seen, but one thing is for sure: Nobody puts Lionsgate in a corner.

Katherine Imp is a transactional entertainment attorney at Cummins & Associates, Ltd., specializing in production legal, film finance and intellectual property matters. Contact Katherine at @KatherineImp or kimp@cumminsassociates.com.

Disclaimer: The information in this post is intended for general information purposes only and should not be construed as legal advice.

To see the original post, and similar articles, check out Katherine Imp’s SCREEN Magazine column, Street Legal

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Filed under Copyrights, Entertainment Law, Intellectual Property, Motion Picture, Trademarks

Fox Fights Back on EMPIRE Title for Hit Television Series

by Michael Lovitz

Usually, when Hollywood has a hit, the studio that produced the hit finds itself fighting off claims of copyright infringement or idea theft.  But in the case of Fox’s newest hit show, EMPIRE, it’s a trademark claim that’s first to come to the fore.

As we’re now learning from a complaint filed on March 23, 2015 (Case 2:15-cv-02158) in the Central District of California, a California company called Empire Distribution sent a demand letter to Fox on February 16, 2015, claiming that Fox’s television show had infringed the company’s trademarks; that use of the word “Empire” was likely to confuse the company’s customers, artists, and business partners as to whether the series and its music are affiliated with the company; and further that such use constituted dilution by tarnishment, resulting from the portrayal of the show’s record label head as “a homophobic drug dealer prone to murdering his friends.”

In a follow-up telephone discussion, Empire Distribution demanded through its counsel a payment of $8 million in order to resolve its claims against Fox, and in a second claim letter, provided three options for settling the claims: (1) Fox pay $5 million and include Empire Distribution’s artists as regular guest stars on the series; (2) Fox pay Empire Distribution $8 million; or (3) Fox stop using the word “Empire.”

In response to these claims and demands, Fox brought the March 23rd action against Empire Distribution in the Central District of California.  In its complaint for declaratory relief, Fox notes that defendant Empire Distribution was not formed until 2011; that Empire Distribution has not registered its alleged trademarks; and that the two applications Empire Distribution filed in January 2014 have initially been refused by the USPTO.  Fox goes on to allege that “empire” is a common word in trademark, including in the music and entertainment fields, identifying in California alone companies such as Empire Recordings LLC, Dark Empire Recordings LLC, Empire Entertainment, Inc., and Empire Media Center, and noting there is even a film titled Empire Records.  Fox further alleges that the defendant’s trademark is not famous, given that on a recent Google search for “empire record label,” the company’s website doesn’t appear until the seventh page, and a second search for “Empire Distribution Inc.” listed defendant’s website as the fifth result, with none of the first four references referring to defendant.  Fox has requested relief from the court in the form of a judgment declaring that its use of the word “Empire” as the title of its fictional TV series does not (a) infringe the defendant’s trademark rights, (b) tarnish or otherwise dilute the defendant’s trademarks, and (c) does not violate any applicable common law or statutory unfair competition law.

Michael Lovitz is a partner at Lovitz IP Law, where he practices all aspects of intellectual property law, including copyright, trademark, unfair competition, trade secrets, portfolio management, and licensing and transactional matters.

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The Case of the Copyrighted Sherlock: The Saga Comes to an End

by Michael Lovitz

In December 2013, the Federal District Court for the Northern District of Illinois issued its ruling in Klinger v. Conan Doyle Estate, Ltd., 2013 U.S. Dist. LEXIS 180493 (December 23, 2013), concerning the characters, character traits and other story elements from Sir Arthur Conan Doyle’s series of “Sherlock Holmes” stories, as published through four novels and fifty-six short stories, which focused on the well-known detective and his constant companion Dr. John Watson, along with other related characters and story elements (collectively, the “Canon”). The majority of the Canon’s stories were published prior to January 1, 1923 and in the public domain in the United States; however, the final group of ten short stories, collected and published in 1927 as The Case-Book of Sherlock Holmes (the “Ten Stories”), remain under copyright protection in the United States until the year 2022.

The declaratory judgment action was initiated by Leslie Klinger, a California attorney and one of the world’s leading authorities on the Canon. Klinger had written more than twenty books and numerous articles on the subject of the Canon, and had served as the technical adviser for Warner Brothers on their two recent Sherlock Holmes films. Klinger also authored an award-winning, three-volume, annotated collection of Sherlock Holmes books and stories entitled The New Annotated Sherlock Holmes, published by W.W. Norton in 2004 and 2005. Because the annotated edition republished the Ten Stories, Klinger and W.W. Norton voluntarily sought and obtained a license from Conan Doyle Estate, Ltd. (the “Estate”) for publication of the annotated edition.

Klinger served as co-editor on an anthology containing new and original short stories written by contemporary authors that were inspired by, and featured various characters and story elements from, the Canon. The Random House Publishing Group published the anthology, entitled A Study in Sherlock, in 2011. While preparing the anthology for publication, Klinger and Random House were contacted by the Estate’s agent who asserted exclusive rights in a number of (unspecified) elements of the Canon and demanded that Klinger and Random House enter into a license agreement with the Estate or face litigation for infringement of the Estate’s rights. Although Klinger refused these demands, Random House did enter into the requested license on behalf of itself and Klinger, and published the anthology in October 2011.

The popularity of A Study in Sherlock led Klinger and his co-editor to prepare a second anthology of new and original stories, entitled In the Company of Sherlock Holmes (the “2d Anthology”), and they contracted with Pegasus Books, an independent trade publisher whose books are distributed by W.W. Norton, to publish the new book. Prior to publication of the 2d Anthology, Pegasus was contacted by the Estate’s agent, again demanding that Pegasus and Klinger enter into a licensing agreement, under an implied threat of an infringement action if a license were not to be obtained from the Estate. The Estate requested the new license be on the same terms as the previous agreement with Random House. However, Klinger and Pegasus declined to enter into a license agreement, stating that the 2d Anthology would not contain any story elements or characters introduced in the Ten Stories, but rather only characters and story elements from the Canon that were already in the public domain. The Estate responded and invited “reasonable counter-proposals,” but also advised Klinger and Pegasus:

If you proceed instead to bring out [In the Company of Sherlock Holmes] unlicensed, do not expect to see it offered for sale by Amazon, Barnes & Noble, and similar retailers. We work with those company’s [sic] routinely to weed out unlicensed uses of Sherlock Holmes from their offerings, and will not hesitate to do so with your book as well.

As a result of the Estate’s threats, Pegasus refused to finalize its contract with Klinger to publish the 2d Anthology.

Klinger brought his declaratory judgment action in February 2013 in the federal district where the Estate’s agent was located (the northern district of Illinois), based on the demands and threats made by the Estate and its agent. The Complaint asked the Court to determine, inter alia, the copyright status of a list of specific characters, character traits, dialogue, settings, artifacts, and other story elements in the Canon. The Estate did not respond to the Complaint and so the Court entered a default against the Estate on June 25, 2013. The Court then permitted Klinger to proceed with the filing of either a motion for summary judgment or a motion for default judgment in order that the issues raised in the Complaint get a full adjudication.

Klinger’s Motion for Summary Judgment noted that all of the pre-1923 works were in the public domain, including the novel A Study in Scarlet, in which Holmes and Watson are first introduced, and argued that all of the story elements contained in the 2d Anthology had first appeared in those pre-1923 public domain works. Klinger relied upon the well-established judicial rule that the length of protection for a character or other story element begins when they are first used in a work of authorship, and that the re-use of a character or story element does not extend their copyright protection, noting the following quote from Nimmer on Copyrights:

“What of the situation where an author has used the same character in a series of works, some of which works subsequently enter the public domain, while others remain protected by copyright? Clearly anyone may copy such elements as have entered the public domain, and no one may copy such elements as remain protected by copyright.”

1 Nimmer, supra, §2.12, p. 2-178.30, 2-178.30(1), 2-178-31, citing, inter alia, National Comics Publications, Inc. v. Fawcett Publications, 191 F.2d 594 (2d Cir. 1951). Nimmer also posits that this rule applies equally where the same characters appear both in works that have passed into the public domain and works that remain under copyright protection:

The more difficult question is this: may the character depicted in all of the works be appropriated for use in a new story created by the copier? Assuming the character to be sufficiently developed as to be protectable, arguably such conduct would constitute an infringement of those works that remain in copyright. The better view, however, would appear to be that once the copyright in the first work that contained the character enters the public domain, then it is not copyright infringement for others to copy the character in works that are otherwise original with the copier, even though later works in the original series remain protected by copyright.

 

1 Nimmer, supra, §2.12, p. 2-178.31, citing, inter alia, Columbia Broadcasting Sys., Inc. v. DeCosta, 377 F.2d 315 (1st Cir.), cert. denied, 389 U.S. 1007, 88 S. Ct. 565, 19 L. Ed. 2d 603 (1967).

 

“Just as the copyright in a derivative work will not protect public domain portions of an underlying work as incorporated in the derivative work, so copyright in a particular work in a series will not protect the character as contained in such series if the work in the series in which the character first appeared has entered the public domain.”  1 Nimmer, supra, §2.12, p. 2-178.31, citing, inter alia, Siegel v. Warner Bros. Entm’t Inc., 690 F. Supp. 2d 1048, 1059 (C.D. Cal 2009). As a result, Klinger argued that he should be free to create and exploit new derivative works based on any characters and story elements appearing in those works that had entered the public domain. Finally, Klinger took the position that the story elements contained in the Ten Stories were not eligible for copyright protection, on the grounds that they were merely events, not characteristics, and that copyright protection does not extend to ideas, plots, dramatic situations, or events.

Not surprisingly, the Estate did finally appear in the proceeding once the Summary Judgment Motion had been filed, and filed a response in opposition to the Motion wherein it took the position that the literary characters of Sherlock Holmes and Dr. Watson were not fully created or disclosed in 1887’s A Study in Scarlet novel, but rather were only completed in the final copyrighted stories in which they appeared. During the interim, the characters were developed and shaped by the author, who was continually making changes (both positive and negative) to the characters, their attributes, dimensions, backgrounds and relationships. By way of example, the second marriage for Dr. Watson resulted in him moving out of Baker Street, causing his relationship with Holmes to be substantially altered when Holmes is left to live alone, also altering the characters themselves. Additionally, the Estate noted that the stories featuring the pair were not written in purely chronological order, as the Ten Stories are set at various points earlier in the two characters’ lives.

The Estate also argued that Klinger’s attempt to analogize the current situation, where the Sherlock Holmes stories were an original series of works, to Prof. Nimmer’s views pertaining to characters used in derivative works, was faulty, taking the position that the stories in the Canon were not derivative works under the statute. The Estate additionally argued that because the development of the Holmes and Watson characters was non-linear, it would be impossible to make new uses of those characters without invading the copyrighted character developments contained in the Ten Stories. Finally, the Estate argued that a ruling whereby the pre-1923 story elements and characters would be free for public use, while the further delineations of the characters and story elements retain their protected status should pertain only to two-dimensional “flat” characters and not complex, three-dimensional characters such as Holmes and Watson, and expressed concern that ruling only those increments of expression added by the Ten Stories would be barred from use during the remaining copyright term would have the practical effect of dismantling the characters into a public domain version and a copyrighted version.

The Court agreed with Klinger, ruling that only those story elements and characteristics first appearing the Ten Stories would retain protected status under the copyright law, and the pre-1923 story elements were free for public use. Noting that the Estate’s proposed distinction would run counter to prevailing case law, the Court remarked that adopting the Estate’s position would “extend impermissibly the copyright of certain character elements of Holmes and Watson beyond their statutory period, contrary to the goals of the Copyright Act.” In a case of first impression within the 7th Circuit, the court found that application of the “incremental expression test” was appropriately applied to literary sequels and literary series, and that the Canon consisted of subsequent works “based upon material from a pre-existing work, Sir Arthur Conan Doyle’s first Sherlock Holmes story.” These subsequent works therefore met the definition of derivative works, making the incremental expression test applicable.

The Court, however, disagreed with Klinger on the issue of whether the story elements contained in the Ten Stories were susceptible to copyright protection. Specifically, the Court found that a number of the story elements contained in the Ten Stories comprised characters, character traits and storylines, all of which are copyrightable increments of expression, and were thus protected under copyright. As a result, any stories to be included within the 2d Anthology could not include or incorporate any of the incremental expressions contained in the Ten Stories absent a license from the Estate.

The Estate appealed the district court ruling, and in its briefs focused on two alternate grounds.  The first ground was that the district court lacked subject matter jurisdiction because there was no case or controversy between the parties, and that Klinger’s suit was premature.  The second ground was that, if there were jurisdiction, the Estate was entitled to judgment on the merits because, in the case of a complex literary character appearing in an author’s series of works (such as Sherlock Holmes and Dr. Watson), whose full complexity is not revealed until a later story, remains under copyright until such later story falls into the public domain.  As a result, the Estate argued, the fact that the early stories in which such complex characters appeared are in the public domain does not permit the less-than-fully “complexified” versions of the characters from the early stories to be copied, even if those early stories are themselves in the public domain.

The 7th Circuit, in a ruling handed down May 22, 2014, affirmed the district court ruling and finding against the Estate on both grounds.  First, the Court noted that the Estate had made clear to Klinger that it would seek to prevent the 2d Anthology from being sold through Amazon and other big book retailers “implicitly threatening to sue the publisher, as well as Klinger and his co-editor, for copyright infringement if they defied its threat.”   It was this twin threat – to block distribution of the book and to sue for copyright infringement – that created an actual controversy, rather than a mere potential controversy, and was thus sufficient to merit the bringing of the declaratory judgment action and for the district court to assert (and retain) jurisdiction over the case.

As to the merits of the case, the Court affirmed the ruling of the district court, focusing on the issue of whether copyright protection in a fictional character can be extended beyond the expiration of the copyright because “the author altered the character in a subsequent work” and noting that they could not find any basis in statue or case law for extending a copyright beyond its expiration:

We cannot find any basis in statute or case law for extending a copyright beyond its expiration. When a story falls into the public domain, story elements — including characters covered by the expired copyright — become fair game for follow-on authors, as held in Silverman v CBS Inc., 870 F.2d 40, 49-51 (2d Cir. 1989), a case much like this one.

The Court further noted that the Silverman court also ruled that “a copyright affords protection only for original works of authorship and, consequently, copyrights in derivative works secure protection only for the incremental additions of originality contributed by the authors of the derivative works.” Id. at 49 (emphasis added). Using examples from Shakespeare (Sir John Falstaff) and the Star Wars movies, the Court explained that simply because a later work may provide a fuller, more rounded portrayal of the character does not justify extending the expired copyright of the flatter character from the first works in which they appear. As the Court explains:

From the outset of the series of Arthur Conan Doyle stories and novels that began in 1887 Holmes and Watson were distinctive characters and therefore copyrightable. They were “in-complete” only in the sense that Doyle might want to (and later did) add additional features to their portrayals. The resulting somewhat altered characters were derivative works, the additional features of which that were added in the ten late stories being protected by the copyrights on those stories. The alterations do not revive the expired copyrights on the original characters.

Finally, the Court expressed concern that the Estate’s position could have the negative effect of encouraging authors to write stories involving their earlier characters in an effort to create a perpetual (or near perpetual) copyright protection for characters, such extension not only beyond the limits fixed by Congress but also in violation of the copyright clause of the Constitution.

 

 

Michael Lovitz is a partner at Bowen Hayes & Kreisberg, where he practices all aspects of intellectual property law, including copyright, trademark, unfair competition, trade secrets, portfolio management, and licensing and transactional matters.

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A Primer on Open Source Licenses & the Creative Commons

by Joseph D. Poole

In the last fifty years, with ever increasing speed, computers have changed the way we do business, listen to music, watch television, interact with each other socially, and the way we look at the world in general. At the core of this technology is code or software that tells ever more complex machines to do ever more complex things. The reason this complexity continues to increase is that none of this code is created in a vacuum.

In some cases, the code is so rudimentary that it is not protectable by copyright or patent.[1] However, just as a word or phrase is not subject to copyright, but a book or even an article in a magazine is, so too is more advanced software protected by intellectual property rights. But just as books are made of smaller chunks (i.e. words and sentences that individually may not be protected), code is often based on the code that came before it. The major difference is that code is (far more so than a book) comprised of mathematic formulas. It is more analogous to compare code to contracts, in which the language has a functional purpose.

As programs exponentially grew in complexity over the years, it was not feasible to recreate every aspect of code from binary or basic. “Reinventing the wheel,” as it were, was just as unrealistic and impractical in the programming sense as it is in the legal sense.[2] Thus, programmers sought ways to legitimately use libraries of code created by themselves and others and to share those libraries. In some cases, this was done within a single company, but as start-up software companies rose and fell, libraries that would survive the dangerous life cycle of the turbulent dotcom/dotbomb era were required. Software developers and designers also saw the advantages of efficient bug detection via software libraries, adhering to the mantra that “given enough eyeballs, all bugs are shallow.”[3]

Enter the open source movement: Software for everyone! However, authors of code generally do not want to give away all of their copyright to their works; they merely want to give others access to their works, and they use licenses to do so. The term “open source software” is generally used for any source code made available via license to study, change, and distribute the software at no cost to anyone and for any purpose.[4]

There are many licenses that fall within that definition. Not all of these licenses are created equally however. The largest variance between them is the degree to which they practice “copyleft” as opposed to “permissive” principles.  “Copyleft” is a term used to describe the requirement that “if changes are made to a program’s code, and the changed program is distributed outside an organization, the source code containing the changes must likewise be distributed.” Permissive licenses do not require the modified source code to be distributed or contributed back to the open-source community. Below is a discussion of some of the more common open source licenses, and how the code and the content contained in certain programs are treated differently.

OPEN SOURCE LICENSES

The most common open source licenses that this article will be examining are GPL, LGPL, BSD, Apache, and MIT. GPL is the most “copyleft,” followed by LGPL, but the others are far more permissive. Until recently, GPL was the most widely used open-source license. However, that is changing and now the open-source community has shifted largely to permissive licenses. The most popular community open source projects in recent years have used permissive licenses. Whether “copyleft” or permissive, open-source licensing does require proper attribution (showing where the code came from). How that attribution must occur depends on the license.

  • GNU General Public License (“GPL”)/AGPL GPL is a “viral” license in that any source code that interacts with code distributed under a GPL license must similarly be distributed under a GPL license. A developer can copy, modify, distribute, and even sell the code. However, as they are required to offer the code for free and clearly display the GPL license permitting others to use the code for free, it is unlikely that a developer under a GPL license would ever receive an asking price for the code itself.[5] One way around this is to distribute the GPL licensed software as a service. Affero GPL or AGPL is a variation of GPL designed to shore up this loophole, making it even more “copyleft” than GPL licenses.
  • GNU Lesser General Public License (“LGPL”) LGPL is usually used for software libraries. The software that uses the libraries does not need to be redistributed under the GPL or LGPL licenses, however, any changes to the software of the libraries themselves must be released under and LGPL license. This license is a key shift from the strict “copyleft” licenses AGPL and GPL to something that developers can use on commercial projects without being forced to distribute the source code of those projects under GPL licenses.
  • BSD Licesnes BSD covers a family of permissive open-source licenses, but two stand out: the New BSD License/Modified BSD License, and the Simplified BSD License/FreeBSD License. Both allow developers to use the source code and distribute it without requiring them to distribute the underlying source code. The main difference between the New BSD License and the Simplified BSD License is where the attribution must occur. Both require attribution in the source code files and the documentation for the program, but the New BSD License restricts the use of contributors’ names for endorsement of the derived work without the contributors’ specific provision, and the Simplified BSD license does not. There is also a four clause BSD license that requires attribution in all marketing materials of the program (including every ad and commercial), but that license is no longer widely used.
  • Apache Licenses Apache licenses are used in such open-source license projects as OpenStack, Hadoop, and Android. They are not as simple as BSD, and cover many terms that simpler licenses do not. For example, Apache licenses clearly identify a term and territory (perpetual and worldwide), identify use of the code as fee and royalty free, notify that the license is non-exclusive, and that the grant is irrevocable. Furthermore, Apache licenses attempt to address certain patent issues that other licenses do not.
  • MIT License The MIT license, by contrast, is one of the shortest licenses, and consequently one of the broadest. It is used in such open-source projects as JQuery, Hudson/Jenkins, and nodejs. Essentially, as long as you give proper attribution, you can use MIT licensed code for whatever you want. This makes it a very easy license to use for developers who want to contribute code that can be used on commercial projects.

CREATIVE COMMONS

Open-source licenses are designed to address code, not media. Images, sound, and animation would not be able to properly handle the attributions required under open-source licensing. However, there are many communities that share the same open-source spirit in desiring to share their creative works with others for their use. The Creative Commons (“CC”) thus offers a variety of licenses specifically designed to allow creators to allow their creative works to be used by others. Generally all CC licenses require attribution. Additionally, there are three factors that can be modified, depending on the rights a creator wants to grant or restrict:

  • Share Alike. A work with a “Share Alike” CC license allows for modification of the work and the creation of derivatives, but those derivative works must be licensed under the same license. This is a viral license that follows the work and its derivatives, akin to the “copyleft” licenses discussed above. However, as CC licenses are modular, Share Alike does not in and of itself prevent commercial use.
  • Non-Commercial. A work with this restriction cannot be used for commercial purposes. The CC have attempted to define what a non-commercial use is, identifying commercial uses as those that are “primarily intended for or directed toward commercial advantage or private monetary compensation.” There is also a report published by the CC to help clarify what does and what does not count as commercial.
  • No Derivative Works. This restriction prevents subsequent users from modifying, remixing, tweaking, or otherwise changing the work. If a creator is concerned that their work could be misused, then this restriction makes sense. Share Alike and No Derivative Works are mutually exclusive restrictions, as Share Alike applies exclusively to derivative works.

CC licenses are not designed for software, and generally should not be used for software. However, they do provide plain English and full legal versions of their licenses which allows them to be easily used and understood. This makes them very useful for the collaborative creative projects that have been taking the new media sphere by storm. For those who want to combine creative works and coding, proper use of creative commons licenses separate from the open-source licenses for the underlying code should allow creators to properly protect or distribute their works as they see fit.


[1] See 17 U.S.C. § 102 (defining copyrightable subject matter); 35 U.S.C. §§ 101-103 (defining patentable subject matter as something novel, useful, and non-obvious); see also In re Comiskey, 499 F.3d 1365, 1376-77 (Fed. Cir. 2007) (identifying abstract ideas as non-patentable subject matter).

[2] The equations that make up a section of code have a specific purpose, just as legal language does. The major difference is that altering the terms of a contract is part of the nature of contract drafting (via varying levels of negotiations between two parties), whereas altering code is not as natural; code is often created by a single programmer or team with a common purpose.

[3] Raymond, Eric S., The Cathedral and the Bazaar 30 (1999) (“Linus Law”).

[4] St. Laurent, Andrew M. Understanding Open Source and Free Software Licensing 4 (O’Reilly Media 2008).

[5] See Cameron Chapman, A Short Guide to Open-Source and Similar Licenses, Smashing Magazine (March 24, 2010).

 

Joseph D. Poole is a Los Angeles based attorney working in the areas of intellectual property law and entertainment law.

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