Private Sector Innovation as a Means of Combating Online Piracy

By Eric W., Jihan S., and Christina I.

   Since the advent of the Internet, the traditional methods to enforce protection of copyrighted material have often not worked. For example, despite strong efforts by the film and recording industries to combat online piracy, the dynamic nature of the Internet has made traditional measures taken through the courts largely ineffective.

   The problems copyright holders face in protecting their works online are many, perhaps the most overwhelming coming from the nature of the Internet, itself. Because of  the  immense volume of information transferred, not only are copyright holders often unable to track single instances of infringement  among the vast amounts of data online, but the inherent anonymity of Internet users makes even the most meager steps to prevent piracy sometimes impossible.  Add to this, the jurisdictional hurdles which may which prevent copyright holders from pursuing infringement claims when users or acts of infringement happen overseas.  In addition, the sheer cost of litigation is immense compared to the small amount of infringers and amounts recoverable that a copyright holder can actually reach.  

   Obstacles that exist when the traditional judicial system applies traditional copyright infringement doctrine within an online context can also be substantial. Not even the biggest players may be able to beat the system.  For example, The Recording Industry Association of America (RIAA) commenced high profile lawsuits and a series of individual lawsuits to combat file sharing of copyrighted music material. The costs of these suits including attorney fees, trials, and even settlements became so large that the RIAA either stopped suing people for infringement or (in 2007) began offering “discount” settlements. In fact, in 2008 the RIAA began to stop  file-sharing lawsuits and announced a 3-strike system for file sharing. However, as of 2009, there have been no major ISP’s that were part of the RIAA’s scheme.

   Another constraint facing the RIAA has been the lobbyist and/or advocates that have vocalized their opposition to the RIAA. One of these organizations is the Recording Artists Coalition. Another obstacle has been judges who seem hesitant to support RIAA in their file sharing cases because the damages and rate of infringement is both enormous and ambiguous. Lastly, copyright lawsuits by the RIAA may be out of touch with the cultural norms of today, as many people do not consider file-sharing stealing, or a serious crime.

   Private companies and artists however have utilized some methods that have proven to be more effective than litigation in the fight against online piracy.

   One method used: some artists have taken control of the distribution of their copyrighted works by offering the work for free or at a low price. An example is Louis CK, a comedian who sold his show “Live at the Beacon Theater” for $5 on his website instead of releasing it on DVD or a premium cable channel. Fans were given the option of paying by PayPal on his website or pirating it. He made well over $1 million in just 12 days, which demonstrates that a good amount of people are actually willing to pay money for something they find worthwhile.  For another method, a rock band who took matters into their hands was the famous band, Radiohead. With their “pay what you want” experiment, they released their new album “In Rainbows” themselves in 2007.  They tested the songs on the Internet through Webcasts then performed a few songs at each show on their summer tour so their fans would be able to recognize those songs.  People paid anywhere from $0 to $212 for the digital copy of?, and the band subsequently sold over 3 million of the physical copies of the album. Using this method, Radiohead sold more records, merchandise, and concert tickets than they had on their three previous albums.

   While these methods are somewhat risky, Louis CK and Radiohead had strategic bargaining power and benefited greatly from these creative releases. Their method fights piracy in a non-repressive way and encourages fans to make complementary purchases, such as tickets to live performances and band merchandise.  Their innovation can pave the way for other artists to achieve similar success. However, it may be more difficult for up and coming artists, without a substantial fan base to be able to release their music in the same fashion.

   Another proven method to deter online piracy is to offer a convenient and inexpensive way to download music. Consumers want an easy way to build their music collections at a reasonable price. Apple’s iTunes store, which offers an extensive library of songs that cost $1.29 or $0.99 is the most well-known example,. The convenience is hard to match especially given the rise of new technologies such as iCloud.

   There are also alternatives that offer free music services, but the drawbacks include advertisements and consumers not being able to play exactly what they want at any time. These alternatives include Pandora Radio, Spotify, and Grooveshark. One advantage for artists is that users will be exposed to new songs, so they might be prompted to buy the album or at least individual songs on iTunes.

   Although online piracy is still a significant problem, hopefully an increasing number of music lovers will be more willing to obtain their music in a legal way that will reward the artists and copyright owners who have created convenient innovations to distribution of their products.

NewsRight: The Digital Revolution the Newspaper Industry has been waiting for

By Adam K., Andrea B., and Charles B.

   NewsRight, a spinoff of the Associated Press joined by 28 other major U.S. news organizations, is an online news registry and licensing corporation.[i] Currently tracking content from 841 newspaper sites,[ii] and with $30 million already invested,[iii] NewsRight licenses and monitors news content and other intellectual property in the digital world. NewsRight uses this information to “bridge the [revenue] gap” that content producers experience online.[iv] 

   Since the mid-2000s, as the Internet forced a shift in traditional publishing paradigms, news media has seen consistent declines in revenue.[v] Not only are readers able to copy and share articles quickly and easily, but also commercial entities have found significant profit in aggregating news stories from a variety of publishers in one simple presentation. The Huffington Post is one such successful example that integrates copyrighted content with its own original content.[vi] Online platforms such as blogs are readily able to take copyrighted content, whether news stories, magazine articles, or pictures, and then republish that content on their own site without paying a license or crediting the original producer.  Readers then opt to visit the blogs instead of the content producers websites, thereby depriving the content producers of the full return on their investment.

   The founding CEO, and former ABC News president, of NewsRight has publically stated, “we’re not a litigation shop.”[vii] The primary purpose of the company is to help correct the current imbalance in the news content marketplace by brokering relationships between publishers and reproducers.[viii] 

   Like its many members, NewsRight sees this practice as siphoning revenue away from those who have to invest to create such content.  Many news-aggregating services are infringing original news content and commercially benefiting.[ix] These aggregators do not incur the cost of hiring reporters to make this content yet see increased readership and revenue, while traditional publishers have seen declining revenue and readership.[x] Enter NewsRight.

   The service begins by cataloguing content that publishers submit, and then tracking the content over the Internet – even when only a small piece is copied and pasted.[xi] This information is used by NewsRight to find unauthorized websites, blogs, aggregators, and newsgathering services using the content and turn them into paying customers by offering license agreements. Because of the newspaper powerhouses backing it, NewsRight could offer aggregators one-stop licensing across hundreds of sites.

   Nonetheless, NewsRight has its fair share of critics who see this consolidation of enforcement power as a threat to non-infringing fair use online.[xii] There are some cases where legal enforcement rights are obvious. For example, commercial aggregators: companies that profit by culling various news reports reproducing and delivering content without authorization.  Critics fear that once NewsRight runs out of commercial targets like Meltwater (who received their summons just a few weeks ago),[xiii] they will turn towards social aggregators whose use is more within the bounds of fair use but may not be able to afford the legal costs associated with any conflict.[xiv] This result could potentially to chill free speech and legitimate fair use of copyrighted material online.[xv]

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[i] Staci Kramer, AP Goes to Its Board to Replace Curley; Hires McClatchy’s Pruitt as CEO, Paid Content (Mar. 22, 2012), http://paidcontent.org/2012/03/22/419-ap-goes-to-its-board-to-replace-curley-hires-mcclatchys-pruitt-as-ceo/ (last visited Apr. 17, 2012); Associated Press, NewsRight lands first customer to license news, Yahoo! News (Mar. 14, 2012), http://news.yahoo.com/newsright-lands-first-customer-license-news-143316458.html (last visited Apr. 17 2012) (such organizations include The New York Times, The Washington Post Co., and Hearst Corporation).

[ii] NewsRight Launch Press Release, http://www.newsright.com/Splash/Press (Last visited Apr. 17, 2012).

[iii] Martin Langeveld, NewsRight’s potential: New content packages, niche audiences, and revenue (Jan. 17, 2012), http://www.niemanlab.org/2012/01/newsrights-potential-new-content-packages-niche-audiences-and-revenue/.

[iv] Andy Plesser, David Westin, “NewsRight” and the Essential Transformation of Digital Journalism (Jan. 7, 2012), http://www.beet.tv/2012/01/newsright.html.

[v] Rick Edmons, Newspapers: By the Numbers, State of the Media (Apr. 11, 2012), http://stateofthemedia.org/2012/newspapers-building-digital-revenues-proves-painfully-slow/newspapers-by-the-numbers/.

[vi] Frederic Filloux, Aggregators: the good ones vs. the looters, Monday Note (Sep. 19, 2010), http://www.mondaynote.com/2010/09/19/aggregators-the-good-ones-vs-the-looters/

[vii] Mathew Ingram, Is the AP’s NewsRight a Carrot or a Stick? (Jan. 6, 2012), http://www.businessweek.com/technology/is-the-aps-newsright-a-carrot-or-a-stick-01062012.html.

[viii] Id.

[ix] Supra, note 6.

[x] Supra, note 4.

[xi] Supra, note 2.

[xii] Mike Masnick, AP Finally Launches NewsRight… And It’s Righthaven Lite? (Jan. 10, 2012), http://www.techdirt.com/articles/20120110/04124117363/ap-finally-launches-newsright-its-righthaven-lite.shtml.

[xiii] AP Files lawsuit against Meltwater News (Feb. 14, 2012), http://www.ap.org/Content/Press-Release/2012/AP-files-lawsuit-against-Meltwater-News.

[xiv] Supra, note 7.

[xv] See Chilling Effects Clearinghouse, http://www.chillingeffects.org/ (last visited, Apr. 18, 2012).

Domain Name Seizure

By Janelle H.

   In an effort to curb copyright infringement, the U.S. government through the Department of Homeland Security (hereafter DHS) is starting to seize domain names from Web site owners using in rem warrants. DHS is then repurposing many of the sites to display anti-piracy public service announcements. Such seizure, however, might be illegal. Under this new seizure process the government is not required to prove its case of direct, willful copyright infringement, nor give owners of the domain name due process. This seizure may also be an unconstitutional prior restraint of free speech.

   In Puerto 80 Projects v. U.S. Dept. Homeland Security, ICE (S.D.N.Y. Aug. 4, 2011), U.S. customs agents seized the domain names Rojadirecta.com and Rojadirecta.org. The sites were suspected of being pirate internet sites used to direct users via links to illegal Web broadcasts of live sporting events and Pay-Per-View shows which violated copyright law. There was, however, no directly infringing material on Puerto 80’s Web site. Puerto 80 filed a petition in district court requesting the domain names be released pending trial on the merits of the case. The judge denied the petition because Puerto 80 did not prove seizure would cause undue hardship and “[t]he main purpose of the Rojadirecta Web site . . . is to catalog links to the copyrighted athletic events. Any argument to the contrary is clearly disingenuous.” Puerto 80’s motion to dismiss is pending oral argument.

I. Government’s arguments that domain name seizure is legal

   The government argues that there is rampant online infringement that must be stopped in order to enforce its own copyright laws and protect copyright holders. Returning the domain names would enable Puerto 80 to continue to violate copyright law. Furthermore, domain owners do not experience obvious financial hardship because, like Puerto 80, owners can simply purchase new domain names in other countries and return to business. The government’s position is that this seemingly drastic measure is necessary because many of these pirate sites are foreign—U.S. courts have no jurisdiction over the individuals who run the sites, so th traditional means of enforcement are not feasible. Lastly, the government argues that there is not a prior restraint on speech because people who participate in the sites’ discussion forums can easily find another platform for their speech online.

II. Problems with the legality of domain name seizure

   A. No direct copyright infringement
   
   The government claims that the Web site owners are subject to forfeit the domain names because they have engaged in criminal copyright infringement. Criminal copyright infringement, however, ordinarily requires a showing of willful, direct infringement. Courts have held that linking is not direct infringement. Regarding secondary liability, Puerto 80, if anything, only engaged in vicarious infringfement.  But since vicarious copyright infringement is not covered by the criminal copyright statute, forfeiture is not legal.

   B. Violation of First Amendment

   The Puerto 80 contained user-generated speech via its discussion forums. In order for the government to impose a prior restraint on this user-generated speech, the government must show: (1) the reason for the ban is a government interest of the highest magnitude, and (2) the prior restraint is necessary. To be “necessary”, the proposed harm must be certain and irreparable. Also, the restraint must be effective to prevent harm and no alternatives to the restraint can exist. In Puerto 80, it is not clear that the government has fulfilled its First Amendment burden. Also, the argument that there is no speech infringement if other forums exist contravenes established First Amendment law: “one is not to have the exercise of his liberty of expression in appropriate places abridged on the plea that it may be exercised elsewhere.” Schneider v. N.J. 308 U.S. 147 (1939). Seizure is overbroad too.

   C. Violation of Due Process

   
   Before the government may impose sanctions, the government must provide notice and a hearing  for the accused to challenge government’s actions, except in extraordinary circumstances. Hamdi. The question is if, as a matter of policy, enforcing copyright law should be one of those rare circumstances when less/no process is acceptable.

   D. Seizure may curb Internet innovation

   Seizures interfere with and disrupt the critical Domain Name System infrastructure of the internet. Also, since the government may seize domains at their discretion, internet developers may have less incentive to put their time, creativity and effort into their domains in the future.

Protecting Hollywood’s Business Model

By Erin H., Corey C., and Annie M.

   At the core of copyright law is the rule that mere ideas are not the subject of copyright, but what may be protected is the artist’s particular expression of those ideas.  This doctrine is called the idea-expression dichotomy.  Due to this doctrine, every idea, theory, and fact in a copyrighted work becomes instantly available for public exploitation at the moment of publication.

   Recently, Larry Montz, a parapsychologist with self-proclaimed clairvoyant abilities, ran up against the idea-expression dichotomy when he attempted to sue both NBC and Syfy for misappropriation of his idea.  Essentially, Montz had developed an idea based on his own proclaimed paranormal experiences for a reality television show that would follow a team of paranormal investigators around the country, documenting their finds.  From 1996 to 2003, Montz and Daena Smoller, his publicist and producer, pitched the idea to television studios and producers, including representatives of NBC and Syfy.  While the studios all claimed that they were not interested, three years later the show Ghost Hunters aired; a reality television show that was essentially the same show as the one Montz had pitched.

   Montz and Smoller filed suit against NBC and Syfy, arguing that they had stolen his idea for a reality-television show without paying him and therefore breached an implied contract to compensate him for his work if they used the idea.  The lower court sided with the studios, determining that Montz’s contract claims were preempted by federal copyright law.  Because of the idea-expression dichotomy, federal copyright law does not protect ideas, and therefore the studios were essentially only “stealing” an unprotected idea and not a protected expression of it.

   

   On appeal, the 9^th Circuit reversed and sided with Montz and Smoller, finding that copyright law did not preempt his claims.  The Court’s reasoning for this relied on the concept that the idea for the show was clearly outside the scope of protectable subject matter that copyright law is designed to cover.  Because of this, the copyright act does not apply at all, and would not bar Montz and Smoller’s breach of implied contract claim.

   So what does this mean for the future?  According to Montz’s attorney, Graham LippSmith, “It's a big issue for the entertainment industry.  It means the little guy is still going to be protected, people trying to find their way into the entertainment industry."  Hollywood’s current business model of informal meetings and interchange of ideas will be protected, as this process is crucial to the development of new ideas and the flourishing of the film industry.  The studios can be guaranteed new ideas, and the “little guy” will be compensated accordingly.  Despite the studios’ position on this case, it is essentially win-win. 

Burning Man's Intellectual Property Terms and Conditions

By Jacob R.

   Burning Man Organization (BMO) describes its annual, weeklong experience in the Nevada desert as an experiment in radical self-expression and self-reliance. For most Burning Man participants (“Burners”), this means taking a short break from the everyday routine of working as a lawyer, barista, or any other profession that does not completely fulfill the human desire to dress in steampunk attire, build post-apocalyptic floats, and cheer on the burning of a large wooden effigy. However, the actions of a few who exploited this safe space for radicalism, provoked BMO in recent years to enforce a strict contract policy to protect the privacy of its participants and to promote the creative goals of the festival. In effect, this policy limits dissemination of photography and video created at the festival and only until a recent change in its language, restricted participants’ traditional intellectual property rights.

           

   BMO's old terms prior to 2011, permitted the display of photographs and videos taken at the festival by participants for personal use, but restricted any third-party display or dissemination of the works. It achieved this by requiring participants to automatically assign copyright of photos or videos taken at Burning Man once any of these works were used for any other purpose than strict personal use.  BMO terms also reserved a right to prevent any videos or photographs of the festival on any public websites if it objected. An advantage to this policy of automatic assignment is that it allowed BMO to use the DMCA takedown process to censor Burning Man images on the Internet. This provides a much quicker route to censorship than spending time negotiating publicity and privacy rights claims as the basis of a takedown.

   Curiously, the old, strict policy additionally prevented ticket holders from using the Burning Man trademark on any website or making any trademark fair use of the mark. Meaning that facebooking, tweeting, and blogging the Burning Man name would be considered a violation of the BMO policy.

   While the limitations of traditional intellectual property rights may seem harsh in BMO's pre-2011 policy, there are legitimate reasons why BMO restricts public Internet access to images of the festival. In the late 1990's and early 2000's over the course of five years, Voyeur Video Inc. videotaped twenty-seven hours of nudity at Burning Man, selling the tapes for $29.95. BMO responded by suing for trespass, invasion of privacy, and publication of private facts. Voyeur Video's exploitation of the radical self-expression threatened the ideals of Burning Man, alarmed the community of Burners, and resulted in the creation of BMO's strict intellectual property policy.

   Recently, BMO changed its policy for the 2011 festival and slightly loosened its restrictions on the dissemination of photography and video from Burning Man festival. Now, ticket-holders and BMO share joint ownership in photographs and videos taken at the festival. Therefore, BMO can still use DMCA takedown methods at will to enforce its censorship of the images of the festival, but participants retain certain rights to control their works. Ticket-holders possess the right to share their works under a creative commons Attribution-Non-Commercial-Share-Alike license. This allows sharing and derivative uses of works so long as they are not for commercial purposes. Also, BMO changed its restrictive language regarding trademarks to permit its ticket-holders to make fair use of Burning Man's trademarks.

   Copyright law is justified in the Constitution as a means to promote artistic expression by creating an incentive for artists to acquire a property right in their work for a limited period of time. Interestingly, BMO also seeks to promote expression in its intellectual property policy, albeit a “radical self-expression,” by protecting its participants from being viewed and judged from the world outside of Burning Man. The type of radical, spontaneous behavior promoted by Burning Man, such as participants running around the desert naked with glitter paint and a ski mask, differs from the type of fixed, tangible expression protected in contemporary copyright law, such as a painting or a photograph. Therefore, it makes sense to adopt a policy to protect this form of radical self expression that competes with copyright law. However, the Burning Man community should continue to seek an acceptable balance to its policy of protecting its ideals with any desire participants may have to distribute expressive works of photography and videography created at the event.

Copyright and Clothing

By Elisa G.

   The Innovative Design and Privacy Prevention Act (IDPPPA) was first introduced on August 5, 2010 by New York senator Charles C. Schumer in an effort to provide more protection to fashion designers. If passed, the bill will offer intellectual property protection in an industry that often depends on the use of copying.

   Currently, nothing in U.S intellectual property law protects the design of practical articles such as clothing. Intellectual property rights, copyright, trademark, and patent laws do not protect the clothing industry and its designers. Previous attempts to solve this problem, most notably the Design Piracy Prohibition Act (DPPA), have failed to win congressional approval.

   The IDPPPA provides limited protection to fashion.  If passed the IDPPA would protect only “unique designs” and only “substantially identical” copies would be illegal. For qualifying designs, the bill would offer protection by prohibiting unauthorized importation, sale, or distribution of any infringing design for three years. Remedies would include statutory damages or an infringer’s profits, injunctive relief, and destruction of infringing articles.

   Supporters of this bill say the ability to receive royalties from the production of knockoffs would encourage the investment of capital in design activity and therefore boost the entire apparel industry. Supporters say that the three-year protection is enough time to award research and development without hindering creativity and progress in products based on the protected design.

   However, the IDPPPA has its share of critics. A strong concern is that the bill will hurt the fashion industry. Critics argue that much of the growth and creativity in fashion depends on imitation. These critics argue that the concept of the “trend” is what sells fashion. Because of this, they argue, copyright protection for clothing fashion would cause prices to rise and the creative cycle to slow down. Others critics argue that once in the hands of lawyers and judges, such a law will expand to harm both designers and consumers. They say that the only people who will benefit from this law are lawyers and those who can afford costly lawsuits.

   According to insiders, the bill is likely to pass. Should intellectual property protection be given to this industry, the result might be that imitation may no longer be the sincerest form of compliment but instead an expensive ticket to the courtroom.

iPhone Jailbreaking and the DMCA

By Sinny T.

   The Digital Millennium Copyright Act (DMCA) was originally enacted to prohibit “circumvention” of digital rights management and “other technical protection measures” used to protect and control access to copyrighted works. The DMCA has since cast a wide net to protect copyrighted material even when the use of the copyright materials arguably may be permissible under fair use guidelines.

   In order to curtail DMCA’s overly restrictive implications, the DMCA provides that the Library of Congress possesses the power to define exceptions under the DMCA for legitimate, non-infringing uses of copyrighted material. Pursuant to this power the Librarian of Congress has recently issued a public statement declaring that it was legal to bypass a cell phone’s operating system (particularly iPhone) on the particular software it will run to get “lawfully obtained” programs to operate.

   Apple, Inc. has maintained tight control over the types of programs allowed to run on the iPhone, namely, applications (a.k.a. Apps) pre-approved by Apple and which only could be purchased through the App Store. But, with the Library of Congress’ new ruling, Apple’s ability to police and prohibit jailbroken iPhones has vanished. A jailbroken iphone allows the user to bypass the restriction Apple places on iPhones to only allow the installation of applications from the App Store.

   Here’s how the argument had developed over this issue between Apple and “jailbreakers”:

   Apple argues that it has the right to control the software on its devices and jailbroken, altered phones infringes upon Apple’s copyright for Apple’s operating system. Apple further argues that altering the phone encourages pirated applications, exposes iPhones to security risks, and hampers the user’s overall iPhone experience.

   Jailbreaking proponents, however, argue that users should be allowed to customize their phones as they see fit and to have freedom to use features or programs that fall outside of the App Store. Furthermore, allowing this ability to customize phones will in fact bolster iPhone sales and appeal when Apple would not have such a restrictive grip over its products and application store.

   The current Library of Congress ruling allows jailbreaking iPhone users a big sigh of relief as to fear of prosecution.  The ruling also alleviates any concerns about bringing a jailbroken iPhone into the Apple Store for repair or analysis. 

   Although negative publicity over the leak of a secret phone prototype and iPhone 4 antenna problems have chipped away Apple’s iron control over its products, sales figures have not been impacted. Consumers continue to purchase Apple products regardless of any government ruling or unsavory publicity.

   The Library of Congress exception has also allowed artists to remix copyright-protected video content for noncommercial work, and renewed its approval for cellphone owners to “unlock” their devices in order to allow its operation under other wireless carriers.

Performing Rights Organizations

By Shoshana L.

    Since the 1909 Copyright Act, copyright holders in the United States have held the exclusive right to the public performance of their works. A public performance occurs “at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” 17 U.S.C. § 110 (2006).

    Enforcing the copyright holder’s right presents a problem. To truly police this right, the holder must monitor a range of performance venues from strip malls to strip clubs. How could one individual, or a small group of owners, hope to enforce their rights against impermissible use across the United States?

Basics of PRS/PRO

    In the music industry, copyright holders are able to employ a type of collective rights administration called Performance Rights Organizations (PRO) or Performance Rights Societies (PRS).  Composers, lyricists and publishers join together as part of an entity which can negotiate licenses, extract royalties and monitor the enforcement of each member’s copyright when performed in public venues, TV and radio. Council of Better Business Bureaus, Music in the Marketplace, 12/14/2007, http://www.bbb.org/us/article/music-in-the-marketplace-3072. The first such group formed in 1914 under the name American Society of Composers, Authors and Publishers (ASCAP). ASCAP’S leadership of songwriters included many important songwriters of the day.

    The composer Victor Herbert, ASCAP’s first president, played the most important part in ensuring the survival of PROs. Mr. Herbert sued a restaurant called Shanley’s for performing his compositions on the piano for the entertainment of diners without paying any compensation to him. When the U.S. Supreme Court ruled upon the matter (in addition to a related suit against Hilliard Hotel Company), Justice Holmes remarked that “[i]f music did not pay, it would be given up. If it pays, it pays out of the public's pocket. Whether it pays or not, the purpose of employing it is profit, and that is enough.” Herbert v. Shanley Co., 242 U.S. 591, 595 (1917). Holmes’ comment, arguably vague, has been interpreted as establishing the legality of PROs, as PROs seek to ensure the profit from copyright goes to copyright holders. See 174th St. & St. Nicholas Ave. Amusement Co. v. Maxwell, 169 N.Y.S. 895, 895 (N.Y. Sup. Ct. 1918). Following ASCAP’s lead, but to represent different interests, two other groups have also arisen: BMI (Broadcast Music, Inc.) and SESAC (Society of European Stage Actors and Composers).

    The efficiency of PROs results from the use of blanket licenses. A blanket license grants a licensee the right to perform any or all the works in the PRO’s repertory. Council of Better Business Bureaus, Music in the Marketplace, 12/14/2007, http://www.bbb.org/us/article/music-in-the-marketplace-3072. Originally, PROs tailored their licenses to the medium and user. As a result of decisions regarding antitrust and unfair competition in New York and the Second Circuit, licenses today are non-exclusive, without discrimination in license rates terms or conditions among similarly situated users. ASCAP’s licenses are not considered a monopoly because artists retain the right and ability to license their works themselves, and ASCAP licenses do not discriminate in price between licenses similarly situated. U.S. v. ASCAP, 1940-1943 Trade Cas. para. 62,104 (S.D.N.Y. 1941). Similarly, when a Buffalo TV station challenged the blanket license in its region, the Second Circuit found options available in single-program licenses for use or source licenses with the copyright holders themselves. Buffalo Broadcast Co., Inc. v. ASCAP, 744 F.2d. 917, 933 (2nd Cir. 1984). It should be noted that ASCAP’s leading competitor, BMI, does not operate under such agreement so writers and publishers may be treated differently. Bernard Korman & I. Fred Koenigsberg, Performing Rights in Music and Performing Rights Societies, 238, PLI/Pat 9, 65 (1986).
   
Monitoring

    Each PRO monitors various public venues to seek out new licenses and enforce existing ones. Based upon the copyright statute, these public venues include restaurants, bars, clubs and hotels where live or recorded music is played; shopping malls; stores that play broadcast or recorded music; spas, gyms or other sites that offer exercise to music; trade shows; conventions; dance studios; skating rinks; private clubs or fraternal organizations; offices and stores that use “music on hold” for telephone customers; sports teams; colleges and universities; amusement parks; bowling centers; and the Internet. Also, businesses traditionally associated with the performance of music such as radio and television networks and stations, and concert promoters are tracked for non-dramatic performance of works. “Dramatico-musical works” are distinguished from “performing rights” and thus must be licensed directly from the copyright holder or a separate organization.

    Initially, ASCAP employed quasi-lawyer sleuths to uncover infringing establishments. In exchange for discovering infringement, the lawyer received the right to represent ASCAP in the case. This practice was criticized as verging on “barratry,” (the overzealous solicitation of legal work), in at least one case. Buck v. Elm Lodge, Inc., 29 U.S.P.Q. 444 (N.D.N.Y. 1936). The criticism led ASCAP to rely solely upon staff to search for infringing establishments, a practice also in place at BMI and SESAC.

    PRO staff members identify establishments through local advertising and other sources which indicate venues that publically play music. Sites which have not previously entered an agreement receive a visit from a field representative. The representative presents the owner with two options: purchase a license to continue using the work or face a copyright infringement suit. The sites which choose to agree to one of ASCAP, BMI or SECAC’s blanket licenses then must cooperate by handing over royalties. Local radio and TV stations generally provide representative samples from which the PRO can determine the number of uses of copyrighted works. Larger venues such as network TV stations and airlines provide complete logs of the music played.

Paying Owners

    Generally, the owners of the establishment which has entered a license agreement are responsible for handing over fees to the PRO. If an establishment pays a service to “pipe in” background music, as by playing a radio station, the service bears responsibility for paying license fees. The Better Business Bureau notes that federal courts have been rather strict in holding an establishment liable for payment. Establishments have attempted and failed to circumvent payment by claiming that performers were hired as independent contractors; or were not paid by the club owner and worked only for tips; or that the owner specifically instructed the musicians not to play copyrighted music; or not to play specific songs; or not to play music in the repertory of a particular performing rights organization; or even that the owner did not know the music actually performed was copyrighted.

    As PROs need money to operate, copyright holders receive a figure less than the performance license. First, PROs deduct operating expenses. The remainder is divided among members based upon two factors. The first measures the quantity of times a particular work is played, determined via a survey which quantifies the appearance of each piece of music at a given venue. The second quantifies the amount of the work performed. Where less than the entire work is used, as with a jingle or TV show themes, the performer receives proportionally less than if the entire song had aired. Korman & Koenigsberg at 74.

    Challenges to legality and fairness continue to be issues for PROs.  However, none to date have succeeded in proving price fixing or antitrust violations. Discontent did, however, lead Congress to enact The Fairness in Music Licensing Act of 1998. The Act, codified at 17 U.S.C. § 513, permits individual proprietors of 7 or fewer non-publically traded establishments in which non-dramatic musical works are performed publically to claim a PRO has demanded an unreasonable license rate or fee and to require the PRO to receive a reasonable license fee.

User Generate Parody Videos and Copyright Owners’ Duty Under DMCA

By James P.

    With the increasing popularity of user-generated content on the Internet and the ease with which users can manipulate media with readily accessible technology, it is no surprise that copyright owners are aggressively fightin to keep unauthorized content off websites like YouTube. At odds with the Copyright Owners’ interest in controlling the use of their content are the rights of individuals to express their own creativity while engaging in a “fair use” of another’s work, often through the creation of parody. A particularly dramatic scene from the 2004 film “Downfall” is a magnet for such parody creators, who superimpose captions over the film, “chang[ing] Hitler's words …  into satirical commentaries on everything from annoying World Cup vuvuzela horns to the collapse of real estate values.” Evangelista, Benny, Parody, Copyright law clash in online clips, San Francisco Chronicle, July 22, 2010 (available online at http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/07/22/BUQV1EHV9G.DTL). In an effort to protect its copyright, Downfall’s producer began utilizing YouTube’s online mechanism for identifying copyrighted works.

    Even though the producer’s and studio’s main argument was that the entire film “Downfall” can be “viewed online in 10-minute increments without compensation for the studio, producers or actors.”  However, the studio’s search for violations “also netted the parody videos,” a significant number of which have been removed pursuant to YouTube’s compliance with the Digital Millennium Copyright Act. The question remains, in its zealous attempt to protect copyrighted work from infringement, what steps must a copyright owner take to ensure that it does not target fair use of a copyrighted work and trigger erroneous takedowns? 

Fair Use Under US Copyright Law

    The fair use doctrine is found in Section 107 of the Copyright Act, 17 U.S.C. Section 107.  Under that section, in order to determine whether a work qualifies for the fair use defense, courts must look at (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. This statute doctrine codifies the federal common-law test articulated in Folsom v. Marsh (1841). As Justice Storey articulated, “[a] reviewer may fairly cite largely from the original work, if his design be really and truly to use the passages for the purposes of fair and reasonable criticism.” Folsom v. Marsh, 9 F.Cas. 342 (1841). To test the reviewers true intentions, Justice Storey articulates a balancing test that “look[s] to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work. I.d. Section 107 applies not only to criticism to all uses of copyright that meet the four-factor balancing test.

Fair Use and the DMCA?

    An unanswered question in Fair Use Doctrine is whether a Copyright owner must undertake an analysis of whether an allegedly infringing work qualifies for the statutory fair use defense before demanding a takedown under the Digital Millennium Copyright Act. The DMCA (17 USCA 1512(c)) creates a safe harbor from copyright infringement liability for an ISP who timely complies with a copyright owner’s notice to take down a work. The notice must be accompanied by an affidavit stating that the owner has a good faith believe that the work in question is infringing. The ISP then must take down the allegedly infringing work.

    Recently, however, the Northern District of CA determined that a copywriter owner must make “a good faith consideration of whether a particular use is fair use” before issuing a takedown notice, reasoning that “[r]equiring owners to consider fair use will help “ensure[ ] that the efficiency of the Internet will continue to improve and that the variety and quality of services on the Internet will expand” without compromising “the movies, music, software and literary works that are the fruit of American creative genius.” Lenz v. Universal Music Corp., 572 F.Supp.2d 1150 (N.D.Cal.,2008). Lenz involved a mother who posted a short clip of her toddler dancing to a Prince song on YouTube, triggering a DMCA notice to YouTube from Universal. The case is currently on appeal to the 9th Circuit Court of appeals. Should the 9th Circuit uphold the District Court’s ruling, Copyright owners must consider whether an allegedly infringing use is indeed a “fair use” before filing a takedown notice in the 9th Circuit.

Do the “Downfall” Parody Videos meet the Statutory Fair Use Test?

    Any inquiry into whether a particular use meets the statutory “Fair Use” test under Section 107 is fact-intensive. For example, the question is not whether the “Downfall” Parody videos as a complete set meet the “Fair Use” requirements. Indeed, there will be cases in which some videos do and some do not. Given the competing interests between the copyright owner and the parody creators, it seems wholly unfair to me that the producer of “Downfall” can systematically scan YouTube for any uses of their film and utilize the DMCA notice and takedown provisions to block all uses, without an inquiry into whether the particular use qualifies as “fair use.”

YouTube’s Compliance with the DMCA’s Safe Harbor Provisions

By Allen K.

Given the revolution of the Internet and the rise in number of uploaded videos to the web, it has become much easier to reproduce and publicly distribute copyrighted works thus increasing the need for copyright protection. Enter YouTube, the revolutionary website that serves as a host for those who want to “Broadcast Yourself.” YouTube allows anyone to upload their videos to the website and publicly broadcast them to the world. This however raises many issues of copyright infringement as many videos are considered to be “derivative works” as they are based upon one or more pre-existing copyrighted works.

Under Title II of the Digital Millennium Copyright Act (DMCA), the Online Copyright Infringement Liability Limitation Act (OCILLA), creates a conditional safe harbor for online service providers (OSPs) against copyright liability. OCILLA requires that OSPs such as YouTube adhere to certain prescribed safe harbor guidelines and promptly block access to allegedly infringing material if they receive a notification claiming infringement from the copyright owner or the copyright holder’s agent. In order to prevent false claims from being made, section 512(f) of the DMCA states that any person who knowingly materially misrepresents that material or activity is infringing may be subject to liability for damages. Once YouTube has verified that the Complainant is authorized to bring the claim, under OCILLA, YouTube is required to remove the video until the alleged infringer provides sufficient evidence that they are in fact authorized to use the content.

OCILLA’s § 512(c) Safe Harbor provision requires that OSPs 1) not receive a financial benefit directly attributable to the infringing activity, 2) not be aware of the presence of infringing material or know any facts or circumstances that would make infringing material apparent, and 3) upon receiving notice from copyright owners or their agents, act expeditiously to remove the purported infringing material.

With thousands of videos uploaded daily and minimal policing by YouTube admin it is nearly impossible for YouTube to identify infringing material. As such, it only makes sense that the copyright owner or someone authorized to act on behalf of the copyright owner assert their ownership rights directly to YouTube. In order to file a copyright infringement notification, the complainant must send a written communication along with certain enumerated requirements. Upon receipt of the Copyright Complaint Web form, YouTube may forward the information provided in the legal notice to the person who provided the allegedly infringing content and claimant information will be published on the YouTube site in place of the disabled content.

As long as YouTube complies with the requirements for a given safe harbor, it is immunized and not liable for money damages. The passage of OCILLA has part of the 1998 DMCA represents a victory for telecom and Internet related industry groups over powerful copyright interests who had wanted service providers to be held strictly liable for the acts of their users.

Google v. China – Just What in the World Is Going on over There?

By Patrick S.

Recently, there has been significant coverage in the news about Google, and other Western companies, and their problems in China. Much of the recent coverage has been driven by Google’s January 12th, 2010 blog posting that it had been the victim of a "highly sophisticated and targeted attack on our corporate infrastructure originating from China." Google's problems with respect to this issue were so severe that it resulted in a full blown diplomatic dispute between the U.S. and China. The US government has stated that Google's allegations against China "raise very serious concerns and questions [and] we look to the Chinese government for an explanation. . . [t]he ability to operate with confidence in cyberspace is critical in a modern society and economy." In response to this and related US criticism, the Chinese government has, either directly or indirectly, provided sharp and highly critical anti-US responses. An example of such a response could be found in the Chinese state-sponsored newspaper (The Global Times), which quoted a Chinese analyst as calling Google’s complaint “a U.S. government-initiated strategy with covert political intentions . . . [and that] [a]s the global landscape is undergoing profound irreversible shifts, the calculated free-Internet scheme [advocated by Google] is just one step of a U.S. tactic to preserve [the U.S.'s] hegemonic domination.” As for Google, after first attempting to resolve its differences with the Chinese government, it has now moved forward with its “doomsday scenario” and formally exited China - no small feat for a publically-listed multinational corporation under tremendous pressure to grow its market-share and revenues.

So, one might ask: just what is all this rancor about? Unfortunately, this is not an easy question to answer. In reality, there are many reasons for Google's concerns with the Chinese government including censorship of Google’s search results and the Chinese rule of law with respect to protection of intellectual property. The focus of this brief commentary will be on Google's concerns related to Chinese violation of Google's most valuable asset - its intellectual property.

Google appears to be claiming that, either directly or indirectly, China (and/or its citizens) played a role in allowing, encouraging or tolerating computer "hackers" to break into Google's IT system and illegally perform a number of actions. Of significant concern to Google (and approximately 30 other western-orientated companies, such as Adobe Systems) was the hackers apparent attempts to access and steal intellectual property, including the Company's most valuable asset - its source code, which is defined as the means most often used by programmers to specify the actions to be performed by a computer. Google’s top-of-the-line search methodology, for example, is powered by patented source code developed by the Company’s two founders, Larry Paige and Sergey Brin.

For a Company such as Google that lives or dies by its proprietary source code, this is a crucial issue. More than anything else, Google is a Company that, through its self-created computer programs (i.e. source code), analyzes user-input search terms, retrieves what it believes to be the most relevant result across the world wide web, and quickly presents that data to the end-users. Google's effectiveness and skill at doing this has allowed it to gain the greatest market share in search-related advertising revenue, and provided the Company with billions of dollars in revenue each year. As such, the processes by which Google performs these activities are highly confidential and valuable.

From a U.S. legal point of view, Google's methods and processes for analyzing user-input search terms would be considered a proprietary trade secret. For instance, Section 1(4) of the Uniform Trade Secrets Act defines "trade secret" as "information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." Court cases from across the U.S. that have considered the issues related to trade secrets have offered significant protection to persons or companies that have invested in and created such trade secrets. For instance, in US West Communications, Inc. v. Office of Consumer Advocate, 498 N.W.2d 711, 714 (Iowa 1993), the Court held that "[t]rade secrets can range from customer information, to financial information, to information about manufacturing processes to the composition of products. There is virtually no category of information that cannot, as long as the information is protected from disclosure to the public, constitute a trade secret. We believe that a broad range of business data and facts which, if kept secret, provide the holder with an economic advantage over competitors or others, qualify as trade secrets." In another opinion, a U.S. Court provided even greater potential protection to those creating trade secrets, holding that, in essence, anything which provides its owner with a competitive advantage can qualify as a trade secret if it is appropriately guarded as such. Prince Mfg., Inc. v. Automatic Partner, Inc., 191 U.S.P.Q. (N.J. Super. Ct. Ch. Div. 1976).

Because of this, under general U.S. legal standards, Google could expect its computer source code / programs /processes to be legally protected. Part of the controversy between companies like Google and China is that western-orientated firms are finding that China may not fully respect western-style intellectual property laws, thus putting companies - like Google - that exist only because of their intellectual property, at great risk. As increasing numbers of western-oriented businesses expand into China due to its large domestic consumer market, manufacturing base, and growth potential, firms such as Google are finding that they may be faced with a lose/lose type of decision: either pull-out of China and ensure protection of their intellectual property but lose out on the tremendous market share growth the market offers, or put the Company's intellectual property at risk but enjoy revenue and market share growth. For companies that rely on the protection of their trade secrets to survive and grow, a country's failure to respect the sanctity of intellectual property could, as Google has shown, be a deal breaker. Whatever the growth benefits of investing in China are, if the country will not vigilantly protect foreigners’ intellectual property and trade secrets, companies will increasingly think twice about investing there - to the detriment of China and western Companies. Further, in some cases, firms already invested in China may decide, as Google did, to pack up and leave.

Apple v. Psystar (and the “Apple tax”): Legal Analysis

by John S.

Apple Computers is perhaps the best in the business at garnishing favorable press. Everyone knows about the iPhone, iPod, and the new iPad from the commercial blitzkrieg surrounding Apple’s key note addresses. In addition to its key note addresses, Apple has also produced a line of popular commercials entitled “Mac v. PC”. These commercials, among other things, tell consumers about Apple’s Mac OS X: an alternative to windows. The commercials suggest that Mac OS X is superior to Windows because of its stability, ease of use, and invulnerability to viruses and malware. What is implied, however, but not immediately clear from watching the commercials is that Mac OS X is only available on Apple computers; if you want the advantages of Mac OS X, then you need to buy an Apple.

This can be a sore point for many consumers, because the starting price of the cheapest Apple computer is the $599 mini, which doesn’t even include a monitor. To get the full Mac OS X experience, a consumer needs to spend at least $1000 (which is about the price of Apple’s cheapest laptop). Computer geeks everywhere are more than happy to tell you that this high entry price is due to the “Apple tax”.

Without digging too deeply into the issue, here is a quick overview of what the “Apple tax” means: an Apple computer costs approximately 15% more than a PC with comparable hardware specifications; this is largely uncontested. This 15% price difference is called the “Apple tax”, and PC fans argue this is the price that Apple charges for the privilege of using a computer with Mac OS X (again assume this simple model for the sake of the argument, there are other points to be made as to aesthetic design, reliability, etc). This poses the question of whether it is fair for Apple to create an extremely competitive and desirable operating system while at the same time confining it to expensive Apple computers.

In April 2008, Psystar felt that this was not fair, and began selling computers with Mac OS X pre installed for the low price of $399. Since Mac OS X will not work on non-Apple hardware, Psystar had to a create a modified version of Mac OS X that bypassed this limitation, and then pre-installed the modified operating system on all of their computers. Predictably, Apple sued Psystar in July of 2008 for copyright infringement, trademark infringement, and software licensing violations seeking statutory damages and a permanent injunction. The resulting Apple v. Psystar case was widely followed by numerous internet communities because it asked, for the first time, not if Apple’s business model was fair, but if it was legal.

Analyzing the Case

The case begins with an analysis of the copyright infringement claims from Apple. To succeed on a copyright infringement claim, Apple had to prove that it was the owner of the copyright, and then prove that Psystar violated one of the exclusive rights granted by the copyright in question. Apple easily demonstrated its ownership of the copyright on Mac OS X, and then alleged that Psystar violated its exclusive reproduction, distribution and derivative works rights.

Reproduction Right

Apple claimed that Psystar violated its exclusive right to copy Mac OS X when Psystar made copies of Mac OS X and installed those copies on its non-Apple computers. Psystar admitted that they made copies of Mac OS X, but in its defense responded with a fair use defense and a statutory defense under §117(a). However, as the judge said in his decision, Psystar failed to properly plead §117(a), never mentioned the four fair use factors, and cited to irrelevant case law in its fair use defense. The court found that Psystar violated Apple’s exclusive reproduction right.

Distribution Right

Apple next contended that Psystar violated its distribution right by offering and selling Mac OS on Pystar computers to the public. Psystar again admitted to violating this right. In its defense, Psystar claimed protection under the First Sales Doctrine. The First Sales Doctrine provides that “the owner of a particular copy...lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of copyright owner, to sell or otherwise disposte of the possession of that copy”. Again the judge wasted little time in dispelling this defense. Psystar’s Mac OS X copies were clearly not protected by the First Sales Doctrine because Psystar’s copies were unauthorized, illegal copies, thus violating the “lawfully made under this title” requirement. The judge also felt the case law Psystar cited was not on point and irrelevant. For these two reasons, the court ruled that Psystar violated Apple’s distribution rights of Mac OS X.

Right to Create Derivative Works

Apple next alleged that Psystar violated its right to create derivative works of Mac OS X. The right to create a derivative work essentially means that Apple has the right to create a work based upon Mac OS X. Apple said Psystar violated this right when it created the modified version of Mac OS X to run on the Psystar hardware. Psystar contended that their modified version of Mac OS X didn’t violate this right because they didn’t modify Apple’s source code. The judge did not find Psystar’s argument persuasive, and pointed out that if one were to remove the files Psystar added to Mac OS X, the operating system would even be able to boot onto a computer. The judge further added that Psystar failed to supported its argument with valid case law, while Apple reinforced its arguments with relevant case law. Again Psystar was found to have infringed on Apple’s copyright.

Contributory Infringement

The last copyright infringement claim brought against Psystar was contributory infringement: “one infringes contributorily by intentionally inducing or encouraging direct infringement.” Psystar was accused of contributory infringement because it sold its unauthorized copies of Mac OS X to the public. Psystar didnt offer a defense on this issue.

Copyright Misuse Defense

However, although it lost on all the copyright infringement claims, Psystar still had a chance to win this case with a doctrine called “Copyright misuse”. Copyright misuse is a defense to copyright infringement which “forbids the use of a copyright to secure an exclusive right or limited monopoly not granted by the Copyright office and which is contrary to public policy.” A misused copyright is invalid and thus cannot be infringed upon.

Psystar argued that Apple’s attempt to use a copyright to tie Mac OS X to Apple hardware constituted copyright misuse because it was violative of public policy. This argument relies on the idea of the “Apple Tax” (discussed above): it is simply unfair to the public to tie a good operating system to extremely expensive hardware.

However, on this issue the law seems not to have supported Psystar’s argument. The court pointed to cases that constituted copyright misuse, and distinguished the copyright use by Apple from those cases. For example, the court first highlighted a 9th circuit decision that invalidated an AMA copyright on a coding system. AMA required contracting parties to ONLY use AMA”s coding system and nothing else. Apple never prohibited purchasers from using competitors products, it simply prevents users from using Mac OS X on competitors products. To be analogous to the AMA coding system, Apple would have had to force users to agree to never use Windows after purchasing Mac OS X. The court’s second illustrative case of copyright misuse was a 4th circuit decision. A company, Lasercomb, required purchasers of its software to agree to forego utilization of the creative ability of all its officers, directors, and employees in the area of of CAD/CAM die-making software (the kind of software that Lasercomb made) for a period of ninety-nine years. Apple’s copyright use was no where near as egregious as Lasercomb, Apple simply tries to control the use of its own software where as Lasercomb tried to control the business practices of its customers; an area clearly outside of Lasercomb’s copyright.

After analyzing the case law, the court felt that Apple’s use of its copyright on Mac OS X was distinguishable and therefore not violative of public policy. Psystar’s copyright misuse defense failed.

Wrap Up

After reading through the case a number of times I was left with a confusing question: why did Psystar let this case go to court? Psystar must have known they were violating Apple’s copyright in one way or another. Even though Pystar had defenses for some of the copyright infringement claims they completely conceded on contributory infringement. This leads me to believe that Psystar felt that they it might actually win on their Copyright Misuse defense. But, by looking at the AMA and Lasercomb precedents for Copyright Misuse (both of which Psystar cited in its response), it was fairly evident that both cases were distinguishable from Apple’s copyright use. So again, why would Psystar let this case go to court when it knew Pystar violated Apple’s copyright AND it should have seen that the Copyright Misuse cases did not support its position? It could have been a serious misjudgment by the attorneys involved or a strong conviction that a judge could be convinced that Apple’s business mode violated public policy and that the “Apple tax” was just plain wrong. Psystar gambled and lost.

Now, as a result of the Apple v. Psystar decision, there is no question that Apple’s copyright on Mac OS X is valid. Open source supporters around the world can continue to groan about the fairness of Apple’s restrictive software, but Apple v. Psystar makes it clear that tying Mac OS X to Apple hardware is legal.

Family Sues Phone Company Over Ad

DALLAS (AP) — A Dallas family has sued Australia's Virgin Mobile phone company, claiming it caused their teenage daughter grief and humiliation by plastering her photo on billboards and Web site advertisements without consent.

The family of Alison Chang says Virgin Mobile grabbed the picture from Flickr, Yahoo Inc.'s popular photo-sharing Web site, and failed to credit by name the photographer who took the photo.

...

The picture of 16-year-old Chang flashing a peace sign was taken at an April church car wash by Alison's youth counselor, who posted it that day on his Flickr page, according to Alison's brother, Damon. In the ad, Virgin Mobile printed one of its campaign slogans, "Dump your pen friend," over Alison's picture.

The ad also says "Free text virgin to virgin" at the bottom.

...

People who post photos on Flickr are asked how they want to license their attribution. The person who posted the photo of Chang chose a sharing license from Creative Commons that allows others to reuse work such as photos without violating copyright laws, if they credit the photographer and say where the photo was taken.

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UC Berkeley, Stanford crack down on illegal downloading

College students beware: Universities are ratcheting up punishments for illegally downloading music and video from your dorm rooms this school year in an effort to tamp down the popular pastime.

Stanford University and UC Berkeley are among schools that have added teeth to their policies to make students think twice about violating copyright laws. The hope, in part, is to keep students from being sued by Hollywood studios, which consider online piracy a threat to their business and are sparing little expense to track down people who illicitly share songs, television shows and films.

The penalties are an acknowledgment by the schools that they have been largely ineffective at keeping students from online file-sharing services like Limewire, Ares and Gnutella, where music by top artists can be swapped for free.

Stanford started a program on Saturday that financially hits students who go astray. If students fail to remove illegal digital downloads from their computers within 48 hours of being asked to do so, the university will sever their campus Internet connections, and they will have to pay $100 to get them restored.

A second offense will require a $500 reconnection fee. A third infraction will cost students $1,000.

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Before Models Can Turn Around, Knockoffs Fly

“If I see something on Style.com, all I have to do is e-mail the picture to my factory and say, ‘I want something similar, or a silhouette made just like this,’ ” Ms. Anand said. The factory, in Jaipur, India, can deliver stores a knockoff months before the designer version.

...

Ms. Anand’s company, Simonia Fashions, is one of hundreds that make less expensive clothes inspired by other designers’ runway looks, for trendy stores like Forever 21 and retail behemoths like Macy’s and Bloomingdale’s.

A debate is raging in the American fashion industry over such designs. Copying, which has always existed in fashion, has become so pervasive in the Internet era it is now the No. 1 priority of the Council of Fashion Designers of America, which is lobbying Congress to extend copyright protection to clothing. Nine senators introduced a bill last month to support the designers. An expert working with the designers’ trade group estimates that knockoffs represent a minimum of 5 percent of the $181 billion American apparel market.

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Virtual sex sparks real lawsuit

TAMPA, Fla. - Kevin Alderman didn't bring sex to "Second Life." He just made it better.

The 46-year-old entrepreneur recognized four years ago that people would pay to equip their online selves - which start out with the smooth anatomy of a Barbie or Ken doll - with realistic genitalia and even more to add some sexy moves.

Business at Eros LLC has been brisk. One of his creations, the SexGen Platinum, has gotten so popular that he's now had to hire lawyers to track down the flesh-and-blood person behind the online identity, or avatar, that he says illegally copied and sold it.

The $45 SexGen animates amorous avatars in erotic positions. It is software code, written in the scripting language of "Second Life" and placed in virtual furniture and other objects. Avatars click on the object and choose from a menu of animated sex acts.

Alderman filed a civil lawsuit in U.S. District Court in Tampa, Fla., last month alleging an avatar named "Volkov Catteneo" broke the program's copy protection and sold unauthorized copies. Alderman, who runs his business from home in a Tampa suburb, allows users to transfer his products, but prohibits copying.

"We confronted him about it and his basic response was, 'What are you going to do? Sue me?"' Alderman said. "I guess the mentality is that because you're an avatar ... that you are untouchable. The purpose of this suit is not only to protect our income and our product, but also to show, yes, you can be prosecuted and brought to justice."

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WhoseTube? Viacom Sues Google Over Video Clips

Viacom, the parent company of MTV, Nickelodeon and Comedy Central, filed a wide-ranging lawsuit against Google on Tuesday, accusing it of “massive copyright infringement.” Viacom said it was seeking more than $1 billion in damages and an injunction prohibiting Google and YouTube from committing further infringement.

Citing the $1.65 billion that Google paid for YouTube, the complaint said that “YouTube deliberately built up a library of infringing works to draw traffic to the YouTube site, enabling it to gain a commanding market share, earn significant revenues and increase its enterprise value.”

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Carol Burnett files $2M copyright infringement suit over portrayal of her Charwoman character

LOS ANGELES -- Carol Burnett has filed a $2 million copyright infringement lawsuit against 20th Century Fox, claiming her cleaning woman character was portrayed on the animated series ”Family Guy.”

Besides copyright infringement, Burnett alleges 20th Century Fox violated her publicity rights.

”’Family Guy,’ like ’The Carol Burnett Show,’ is famous for its pop culture parodies and satirical jabs at celebrities. We are surprised that Ms. Burnett, who has made a career of spoofing others on television, would go so far as to sue ’Family Guy’ for a simple bit of comedy,” said 20th Century Fox Television spokesman Chris Alexander.

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