by Lee Gesmer | Aug 6, 2013 | Copyright
An unusual copyright suit recently filed in federal court in Boston is worth a brief comment.
Here are the facts.
In July 2012 someone wrote an offensive, defamatory “complaint” about a Boston attorney on the website Ripoff Report. Because a federal statute (47 USC § 230) protects Ripoff Report from liability for defamatory user generated content (“UGC”), the lawyer could not force Ripoff Report to remove the defamation from the site.* However, he came up with a clever (but, as we shall see, probably ineffective) work-around.
*Ripoff Report does not voluntarily take down UGC.
The lawyer sued the original poster for defamation in Massachusetts superior court, and obtained a default judgment. As part of the relief he was assigned the copyright in the defamatory posting (or, power of attorney giving him the right to assign copyright ownership to himself). He then demanded that Ripoff Report take down the copyrighted material. Ripoff Report refused, and the lawyer has now sued Ripoff Report in federal court in Boston for copyright infringement.
Setting aside the question of whether transferring copyright ownership of defamatory material is a proper remedy for defamation (this implicates First Amendment issues), and whether the defamation at issue is even entitled to copyright protection (it is very brief and non-creative), can the lawyer use this strategy to obtain removal of the defamation from Ripoff Report?*
*More precisely, can the threat of damages for copyright infringement compel Ripoff Report to take down the defamation?
At first blush the attorney’s copyright suit against Ripoff Report faces two significant problems: first, whether the Massachusetts state court had the legal authority to transfer the copyright to him, and second, whether the original author granted rights to Ripoff Report that trump any rights the state court could give to the lawyer.
Let’s take these in reverse order. Paragraph 6 of the Ripoff Report’s terms of service state: “by posting information or content to any public area of www.RipoffReport.com, you automatically grant, and you represent and warrant that you have the right to grant, to [Ripoff Report ] an irrevocable, perpetual, fully-paid, worldwide exclusive license to use, copy, perform, display and distribute such information and content ….” In order to post on Ripoff Report a user must register on the site and agree to be bound by a clickwrap agreement that includes these TOS.
Can an assignment (whether by the court or even the original author) deprive Ripoff Report of this license? Clearly not. Ripoff Report, not the original poster, owns the copyright in this content. (See, e.g., Davis v. Blige, 2nd Cir. 2007 (“exclusive license … conveys an ownership interest”).
The fact that Ripoff Report owns the copyright should end the matter right there. The Massachusetts court had no authority to transfer ownership in a copyright that was not even owned by the defaulting defendant. However, there is the further question of whether the Massachusetts state court had the authority to transfer ownership to the attorney, even if the defendant had still owned the copyright. The copyright statute provides that “when an individual author’s ownership of a copyright, … has not previously been transferred voluntarily by that individual author, no action by any governmental body … purporting to … transfer, or exercise rights of ownership with respect to the copyright … shall be given effect except as provided under title 11.”
Title 11 is the federal bankruptcy statute. Bankruptcy was not implicated in this case, and in any event the bankruptcy laws are administered by the federal bankruptcy courts, not the state courts. Thus, the state court did not have the authority to transfer any rights of ownership in the defamatory material, and therefore any rights the attorney could have acquired by reason of the court order are of no legal effect. Because the attorney does not hold the copyright he has no valid copyright claim against Ripoff Report, and the case should be dismissed.
[Note: I have not provided the name of the attorney or the case, or a link to any pleadings, because I am hoping to spare the attorney involved any further discomfort arising from the Streisland Effect.]
by Lee Gesmer | Aug 1, 2013 | Copyright
Copyright registration requirements can get quirky, and if they aren’t handled properly can result in dismissal of a copyright infringement case (valid registration being a requirement before an infringement case can be filed). An invalid or defective registration can deep-six a copyright plaintiff’s suit on a technicality.
The Fourth Circuit addressed a number of issues associated with copyright registration in Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc. (July 17, 2013), one of which is whether the requirement that assignment of a copyright be in writing (17 U.S.C. § 204) may be satisfied by an electronic signature under E-Sign, 15 U.S.C. § 7001.
In what appears to be the first appellate decision on the question of whether E-Sign applies to the copyright statute’s signed writing requirement, the Fourth Circuit held that it does, and that the e-signature at issue in this case (a click-wrap agreement), was a valid assignment:
The issue we must yet resolve is whether a subscriber, who “clicks yes” in response to MRIS’s electronic TOU prior to uploading copyrighted photographs, has signed a written transfer of the exclusive rights of copyright ownership in those photographs consistent with Section 204(a) [of the Copyright Act]. Although the Copyright Act itself does not contain a definition of a writing or a signature, much less address our specific inquiry, Congress has provided clear guidance on this point elsewhere, in the E-Sign Act.
The E-Sign Act, aiming to bring uniformity to patchwork state legislation governing electronic signatures and records, mandates that no signature be denied legal effect simply because it is in electronic form. … Additionally, “a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.” The E-Sign Act in turn defines “electronic signature” as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”
Although the E-Sign Act states several explicit limitations, none apply here. The Act provides that it “does not . . . limit, alter, or otherwise affect any requirement imposed by a statute, regulation, or rule of law . . . other than a requirement that contracts or other records be written, signed, or in nonelectric form[.]” … Because Section 204(a) requires transfers be “written” and “signed,” a plain reading of Section 7001(b) indicates that Congress intended the provisions of the E-Sign Act to “limit, alter, or otherwise affect” Section 204(a).
While the court’s ruling on E-Sign is significant (if for no other reason than that it is the first clear appellate ruling on this issue since the federal law was enacted in 2000), this case is important in other respects as well. The court held that websites (in this case an MLS service) can acquire exclusive copyright ownership from users using clickthrough agreements, and addressed the registration requirement for collective works.
Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc. (July 17, 2013)
by Lee Gesmer | Jul 31, 2013 | CFAA
This week’s internal report by MIT on its handling of the Aaron Swartz case may be an appropriate time to note that the sound and fury over the Computer Fraud and Abuse Act (the “CFAA”) is not limited to its use in criminal cases like the Swartz prosecution. The controversy extends to the use of this law in civil cases as well.*
*The CFAA may be used as either a civil or a criminal law. However, the words of the statute must mean the same thing in each context. As the court noted in the case discussed in this post, “it is not possible to define authorization narrowly for some CFAA violations and broadly for others.”
In my July 2nd post on AMD v. Feldstein I noted that the case had given rise to two note-worthy decisions. The May 15, 2013 decision, discussed in that post, involved the legalities of the former-AMD employees’ alleged solicitation of current AMD employees in violation of non-solicitation agreements. However, Massachusetts Federal District Court Judge Timothy Hillman issued a second opinion in the case on June 10, 2013, ruling on the defendant-employees’ motion to dismiss claims of civil liability under the CFAA.
Judge Hillman’s June 10th opinion reflects the struggle within the federal courts nationally over how to apply the CFAA. The controversy focuses on the section of the law that imposes criminal and civil penalties on –
whoever … intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains … information from any protected computer. 18 U.S.C. § 1030(a)(2)(C).*
*As Judge Hillman observed, “The breadth of this provision is difficult to understate.”
I discussed the courts’ varied interpretations of this provision in some detail in an August 2012 post. As I stated there, “the issue, on which the federal courts cannot agree, is whether an employee who has authorized access to a computer, but uses that access for an illegal purpose — typically to take confidential information in anticipation of resigning to start a competing company or join one — violates the CFAA.” In that post I discussed several of the conflicting decisions over this issue, including the Ninth Circuit’s influential en banc holding in U.S. v. Nosal.
In considering how to apply the CFAA in this case Judge Hillman described the two possible interpretations of the CFAA. The first, a “technological model of authorization,” requires that an employee violate a technologically implemented barrier in order for his actions to give rise to a violation. Under this model, which the court described as the “narrow interpretation,” the employee would have to (for example) use someone else’s login credentials to access his employer’s computer, or break into (hack) the computer. Another way to view the “narrow interpretation” of the CFAA is that the phrase “without authorization” in the statute is limited to outsiders who do not have permission to access the employer’s computer in the first place.
Under the second model, described as the “broader interpretation,” the employee would be liable under the CFAA if he used a valid password to access information for an improper purpose, for example, obtaining confidential or trade secret information that will be provided to the employee’s new employer, or to a competitor of the current employer.
As Judge Hillman noted, the only First Circuit case to address the scope of the CFAA – EF Cultural Travel BV v. Explorica, Inc. – only created uncertainty over how to apply the statute. At least one Massachusetts district court judge has viewed EF Cultural as an endorsement of the broader interpretation. Guest-Tek Interactive Entm’t, Inc. v. Pullen (Gorton, J. 2009).
Judge Hillman, however, disagreed, distinguishing EF Cultural and concluding that the facts in that case shift it into the realm of “access that exceeds authorization” rather than permitted access for an unauthorized purpose. In what seems to be a clear nod to the Ninth Circuit in Nosal, he held that “as between a broad definition that pulls trivial contractual violations into the realm of federal criminal penalties, and a narrow one that forces the victims of misappropriation and/or breach of contract to seek justice under state, rather than federal, law, the prudent choice is clearly the narrower definition.”*
*A recent case from the district of New Hampshire appears to have reached the same conclusion. Wentworth-Douglas Hospital v. Young & Novis Prof. Assoc. (June 29, 2012).
This is the conclusion that the former AMD employee-defendants wanted the court to reach on their motion to dismiss the CFAA count. However, it turned out to be somewhat of a pyrrhic victory for them.
Although the judge found that “the narrower interpretation” of the CFAA “is preferable” and found that AMD’s “allegations are … insufficient to sustain a CFAA claim under a narrow interpretation of the CFAA,” he declined to dismiss the CFAA claims against the defendants, noting that “this is an unsettled area of federal law, and one where the courts have yet to establish a clear pleading standard.” Instead, he deferred action on this claim until the factual record is complete, meaning the conclusion of discovery.
And, if it was the defendants’ hope to dismiss the federal CFAA claim in order to force the case into state court (which is unclear, since AMD also pleaded diversity jurisdiction), not only did they fail to accomplish this by means of this motion, but the court went so far as to note that “even if the CFAA claims are dismissed at a later date, the pendant state law claims need not be remanded to state courts. … It would be extremely inefficient to remand this case to state court given the quantity of evidence already presented to this Court.”
Bottom line: the defendants won their central legal argument, but did not get their reward. And, this section of the CFAA remains in limbo in the First Circuit, pending final word from the First Circuit Court of Appeals on its proper interpretation.
Advanced Micro Devices, Inc.v. Feldstein
by Lee Gesmer | Jul 30, 2013 | Corporate Law
Click here for direct access to a pdf of this document. This advisory was updated on August 1, 2013, to reference a FAQ issued by DOR on July 31, 2013.
[pdf file=”http://gesmer.com/media/pnc/6/media.386.pdf”]
by Lee Gesmer | Jul 22, 2013 | Copyright, What Were They Thinking
“It was as though she realised for the first time that you – everyone – must, or anyway may have to, pay for your past; the past is something like a promissory note with a trick clause in it which, as long as nothing goes wrong, can be manumitted in an orderly manner, but which fate or luck or chance, can foreclose on you without warning.” Requiem for a Nun, William Faulkner
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For many years the Estate of James Joyce was infamous for its use of copyright law to restrict what many people considered fair uses of Joyce’s works. Now that most of Joyce’s works are in the public domain, it seems that the owner of William Faulkner’s copyrights, Faulkner Literary Rights LLC (“Faulkner”, is stepping up to take its place. But in the “Midnight in Paris” case you’ve gotta wonder: what the heck was Faulkner thinking?
Even many people who have never read a word of William Faulkner will recognize these famous lines: “the past is never dead. It’s not even past.” These words are spoken by the fictional County attorney Gavin Stevens in Faulkner’s novel Requiem of a Nun.
The production of a Hollywood movie oftenrequires the producer to obtain many copyright permissions. However, when Woody Alan’s Midnight in Paris was released in 2011, one of the characters paraphrased these lines from Faulkner. When the protagonist, Gil (played by Owen Wilson) accuses his wife, Inez (played by Rachel McAdams) of having an affair she asks him where he got that idea. He responds that he got the idea from Hemingway, Fitzgerald, Gertrude Stein and Salvador Dali, a response that Inez ridicules because they are all dead. In response, Gil quotes Faulkner: “The past is not dead. Actually, it’s not even past. You know who said that? Faulkner, and he was right. And I met him too. I ran into him at a dinner party.”
The producers of Midnight in Paris may have tried and been denied the right to use these words, or they may not have tried at all, concluding that the use was too minimal, and too transformative, to require a license. Regardless, after the movie appeared Faulkner sued Sony Pictures Classics Inc. in federal court in Mississippi alleging, among other things, copyright infringement. On July 18, 2013 the case was dismissed based on the fair use doctrine. Faulkner Literary Rights LLC v. Sony Pictures Classics Inc.
The federal judge who drew this case, Judge Michael P. Mills,* did his level best to address the Faulkner estate’s case with a straight face, and wrote an opinion that would do any college English major proud. However, he gave himself away when he commented, “how Hollywood’s flattering and artful use of literary allusion is a point of litigation, not celebration is beyond this court’s comprehension.”
*Judge Mills is a graduate of the University of Mississippi and has lived in Mississippi for more than 30 years, although there’s no reason to think he’s ever visited Yoknapatawpha County.
Predictably to everyone except Faulkner, Judge Mills found the movie’s use of the quote highly transformative, a key factor in determining whether a copy qualifies as fair use. The heart of the court’s decision is captured in this quote:
The speaker, time, place, and purpose of the quote in these two works are diametrically dissimilar. Here, a weighty and somber admonition in a serious piece of literature set in the Deep South has been lifted to present day Paris, where a disgruntled fiancé, Gil, uses the phrase to bolster his cited precedent (that of Hemingway and Fitzgerald) in a comedic domestic argument with Inez. Moreover, the assertion that the past is not dead also bears literal meaning in Gil’s life, in which he transports to the 1920’s during the year 2011. It should go without saying that this use is highly distinguishable from an attorney imploring someone to accept responsibility for her past, a past which, to some extent, inculpates her for the death of her child. Characters in both works use the quote for antithetical purposes of persuasion. On one hand is a serious attempt to save someone from the death penalty, and on the other is a fiancé trying to get a leg up in a fleeting domestic dispute. The use of these nine words in Midnight undoubtedly adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.
In addition to its claim of copyright infringement, Faulkner alleged 
violation of the Lanham Act. Faulkner claimed that the film would “deceive or confuse viewers as to a perceived affiliation, connection or association between William Faulkner and his works on the one hand, and Sony, on the other hand.” The proposition that the use of this Faulkner quote in Woody Alan’s movie would confuse viewers as to a perceived affiliation between Faulkner and Sony is, if not an insult to the intelligence of Americans, certainly an insult to the New Yorker(ish) fans of Woody Alan. The judge denied this claim out of hand.
What was Faulkner thinking when it filed this case?
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Bonus content 1 – Letter in which William Faulkner quite his job with the U.S. Postal Service:
October, 1924
As long as I live under the capitalistic system, I expect to have my life influenced by the demands of moneyed people. But I will be damned if I propose to be at the beck and call of every itinerant scoundrel who has two cents to invest in a postage stamp.
This, sir, is my resignation.
(Signed by Faulkner)
Bonus content 2 – A couple of days after this post was published the Wall Street Journal published an extensive article on Faulkner’s attempts to capitalize on William Faulkner’s estate, including an unsuccessful attempt to sell Faulkner’s 1949 Nobel Prize medallion. The article discusses similar efforts by the estates of Hemingway, Fitzgerald, Joyce and Nabokov.
