Software licenses are often complex documents comprised of multiple exhibits, schedules, and terms and conditions, co-authored by lawyers, sales people and engineers. And when disputes over the use of software arise, it is, accordingly, often not simple to sort out what the agreement says. I have written a post over at my law firm’s blog about a recent software copyright infringement case where although software’s end user license agreement (“EULA”) said it was the entire agreement, the court held that it could consider evidence outside the agreement about the term of the license (how long it was for). It’s a noteworthy read to remind us that clear drafting in software and technology agreements (and any kind of agreement for that matter) is crucial.
AF Holdings, represented by infamous copyright trolls Prenda Law, voluntarily withdrew its copyright infringement claims against the defendant, an alleged BitTorrent infringer. Defendant sought to recover his costs and attorney’s fees pursuant to the Copyright Act, which provides that:
In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.
The court found that all factors for an award of costs and attorney’s fees weighed in defendant’s favor:
- Degree of success: There was no dispute that defendant completely prevailed in the case.
- Frivolousness/Objective Unreasonableness: Plaintiff’s case was frivolous and objectively unreasonable in that it never presented any evidence (although it had the opportunity to do so) to support its claim that it had standing to assert a claim for copyright infringement. Moreover, the court found that plaintiff did not do a proper investigation to determine defendant was the one in the household who committed the alleged infringement. Instead, it simply alleged that he fit the best demographic of one who would infringe.
- Motivation: The court found that it did not appear plaintiff was motivated to protect the copyright at issue, but merely to coerce settlements.
- Compensation/Deterrence: The court awarded fees as a deterrent to copyright trolls everywhere: other persons or entities that might contemplate a similar business model that is not intended to protect copyrighted work but instead designed to generate revenues through suits and coerced settlements.
- Furthering the Purpose of the Copyright Act: The primary objective of the Copyright Act is to encourage the production of original literary, artistic, and musical expression for the good of the public. But here, the court found, plaintiff had not acted to protect original expression but rather to capitalize on coerced settlements.
Based on these factors, and after considering the number of hours spent and the hourly rate of defendant’s counsel, the court ordered plaintiff to pay $19,420.38 in attorney’s fees and $3,111.55 in costs (mainly for electronic discovery and deposition costs). Copyright trolls be warned.
AF Holdings LLC v. Navasca, 2013 WL 3815677 (N.D.Cal. July 22, 2013)
Last year, the district court judge overseeing the Google Book Search case certified the plaintiff-authors as a class in the action the Authors Guild filed against Google in 2005. Google opposed the motion for class certification, and sought review of the issue with the Second Circuit. On appeal, the court vacated the class certification, holding that such certification was premature, given Google’s anticipated fair use arguments. The per curiam opinion provided that:
we believe that the resolution of Google’s fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues, including those regarding the commonality of plaintiffs’ injuries, the typicality of their claims, and the predominance of common questions of law or fact
Given that fair use is a fact-specific analysis, this decision seems sensible. And the decision gives Google a powerful new lever in settlement talks — litigation of the copyright claims on the merits just got a lot more expensive for the Authors Guild plaintiffs.
Authors Guild, Inc. v. Google Inc., — F.3d —, 2013 WL 3286232 (2nd Cir. July 1, 2013)
Plaintiff photographer took a photo that Apple used in an April 2010 TV commercial for the iPhone 3GS. The 30-second commercial showed the photo for about 5 seconds. Plaintiff sued for copyright infringement, claiming Apple did not have the proper license to use the photo. She sought to recover Apple’s “indirect profits” on iPhone sales attributed to the infringement. Apple moved for partial summary judgment on the issue of damages, arguing such damages were “impermissibly speculative.” The court granted the motion.
Apple made four arguments showing a lack of a causal nexus between the use of the photo and plaintiff’s claim for profits. First, Apple contended that plaintiff proffered no evidence to support her claim that the photo itself caused any sales. Second, Apple argued that the iPhone was “well established in the consumer marketplace” at the time of the commercial which made it impossible to ascribe iPhone 3GS sales to the use of a single commercial, let alone one image in a single commercial. Third, two additional commercials ran during the time period that the commercial ran, each featuring different applications that can be used on an iPhone. Fourth, overall sales of the iPhone decreased during the relevant time period, February 28, 2010 to May 29, 2010, which is the time during which the commercial aired and the month immediately preceding and following that period.
The court found that plaintiff proffered no evidence that the use of the photo caused any iPhone 3GS sales, nor that the commercial did itself. The photo was integrated into no more than five seconds of a 30–second commercial where numerous images and various product functions were displayed. There was no evidence showing that sales resulted from the mere use of the photo. The court noted that as a threshold matter, it was plaintiff’s burden to establish a causal connection to some portion of profits before Apple would have to carry the burden of apportioning profits that were not the result of infringement. The court found that plaintiff did not proffer any evidence directly related to causation or even a method for showing that the alleged infringement actually influenced customers.
It’s important to note that this decision does not mean Apple has gotten away with copyright infringement. The decision is on the measure of damages, not liability (which remains an open question). Moreover, this case deals just with the question of actual damages under the Copyright Act. Plaintiff may yet assert an entitlement to statutory damages, which could range anywhere from $750 to $150,000.
Thale v. Apple Inc., 2013 WL 3245170 (N.D.Cal. June 26, 2013)
[Updated 7/2/13 to add last paragraph.]
Righthaven LLC v. Hoehn, No. 22-16751 (9th Cir. May 9, 2013)
The copyright holder in certain newspaper articles granted to Righthaven the awkwardly-articulated rights “requisite to have Righthaven recognized as the copyright owner of the [articles] for purposes of Righthaven being able to claim ownership as well as the right to seek redress for past, present, and future infringements of the copyright . . . in and to the [articles].”
After the district court dismissed some of Righthaven’s cases for lack of standing, saying that Righthaven was not an owner of an “exclusive right” as required by the Copyright Act to maintain the suit, Righthaven sought review with the Ninth Circuit. On appeal, the court affirmed the lower court’s holding that Righthaven lacked standing.
The court found that the language used to grant rights to Righthaven did not in itself prove that Righthaven owned any exclusive rights. It held that the language in an assignment agreement purporting to transfer ownership is not conclusive. Instead, a court must consider the “substance of the transaction.” Since a separate agreement between Righthaven and the copyright holder placed limits on what Righthaven could do with any copyright assigned to it, Righthaven did not actually possess the required exclusive rights under the Copyright Act, and therefore lacked standing to sue.
BitTorrent copyright trolling continues despite Prenda Law’s self-implosion. But there is hope that courts are coming to their senses.
Earlier this week Judge Wright issued a Hulk smash order lambasting the tactics of notorious copyright troll Prenda Law and finding, among other things, that the firms’ attorneys’ “suffer from a form of moral turpitude unbecoming an officer of the court.”
Though Prenda Law’s copyright trolling days may be numbered, it is still too early to announce the death of BitTorrent copyright trolling. Copyright plaintiffs are still filing lawsuits against swarms of anonymous accused infringers, and courts are still allowing those plaintiffs to seek early discovery of John Does’ names.
But there is reason to believe that courts are recognizing the trolls’ disingenuous efforts to join scores of unknown defendants in a single action. Last week, a federal court in Ohio (in Voltage Pictures, LLC v. Does 1-43, 2013 WL 1874862) expressly recognized the concern that some production companies have been “misusing the subpoena powers of the court, seeking the identities of the Doe defendants solely to facilitate demand letters and coerce settlements, rather than ultimately serve process and litigate the claims.” Likewise, the court recognized that other BitTorrent plaintiffs have abused the joinder rules to avoid the payment of thousands of dollars in filing fees that would be required if the actions were brought separately.
So the court issued an ominous warning. Though it found that at this preliminary stage it was appropriate to join all 43 accused swarm participants in a single action, the court noted that “[s]hould [it] find that plaintiff has abused the process of joinder, the individual John Doe defendants may be entitled to — in addition to a severance — sanctions from plaintiff, under [the applicable rule or statute] or the Court’s inherent powers.” The court went on to warn that “[w]hile the Court will not automatically hold plaintiff responsible for the alleged abuses of others in its industry, it will not hesitate to impose sanctions where warranted.”
Though it has taken several years of abusive and extortion-like litigation brought by BitTorrent copyright trolls, we may be entering an era where courts will be more willing to require these trolls to show the courage of their convictions. No doubt we have Prenda Law and its possibly-unlawful tactics to thank mostly for this crackdown. Prenda had a good thing going (from its perspective, of course). Too bad it did not abide by the timeless maxim, “pigs get fed, hogs get slaughtered.”
Xcentric Ventures, LLC v. Mediolex Ltd., 2012 WL 5269403 (D.Ariz. October 24, 2012)
Plaintiff Xcentric Ventures provides the infamous Ripoff Report, a website where consumers can go to
defame complain about businesses they have dealt with. Defendant ComplaintsBoard.com is a similar kind of website.
Ripoff Report’s Terms of Service provide that users grant Ripoff Report an exclusive license in the content they post to the site. Based on this right, Xcentric sued various defendants associated with ComplaintsBoard for “encourag[ing] and permit[ing] consumers to post content that has been exclusively licensed to Xcentric.”
Defendants moved to dismiss the copyright infringement claim, asserting they were protected by the safe harbor provision of the Digital Millennium Copyright Act (“DMCA”). The court granted the motion to dismiss, but not because of the DMCA.
The safe harbor provision of the DMCA states that a “service provider shall not be liable for monetary relief” if all of the following requirements are met:
(1) it does not have actual knowledge that the material on its network is infringing;
(2) it is not aware of facts or circumstances that would make the infringing activity apparent;and
(3) upon obtaining knowledge or awareness of such infringing activity, it acts expeditiously to remove or disable access to the copyrighted material.
In this case, Xcentric alleged that defendants actively “encouraged and permitted” copyright infringement by ComplaintsBoard users. The court held that this allegation, if taken as true, could be sufficient to preclude defendants from taking advantage of the DMCA’s safe harbor provisions.
But the court went on to hold that Xcentric had failed to state a copyright claim on which relief may be granted.
Secondary Liability Insufficiently Pled
Xcentric did not allege that defendants directly infringed copyright. Instead, it alleged that by encouraging and permitting users to copy and republish material, ComplaintsBoard was engaged in secondary infringement — either vicarious or contributory infringement.
To state a claim for contributory copyright infringement, Xcentric had to plead that ComplaintsBoard had knowledge of the infringing activity and induced, caused, or materially contributed to the infringing conduct of its users. The court found that Xcentric had not alleged any facts that would lead to a reasonable inference that defendants knew of their users’ republishing Xcentric’s copyrighted content or that defendants had induced, caused, or materially contributed to such republication.
To successfully plead vicarious infringement, Xcentric had to show that defendants had the right and ability to supervise the infringing activity and also had a direct financial interest in those activities. The court found that Xcentric had not put forward enought facts to show that defendants had the right and ability to supervise the infringing activity.
AF Holdings, LLC v. Doe, 2012 WL 3835102 (N.D. Cal., September 4, 2012)
troll plaintiff AF Holdings sued defendant for, among other things, negligence for failing to secure his home wi-fi network. Plaintiff argued that defendant’s inaction allowed a third-party to commit large-scale infringement of AF Holdings’ copyrighted works.
Defendant moved to dismiss for failure to state a claim. The court granted the motion and dismissed the negligence claim.
It held that a defendant like the one in this case had no duty to protect another from harm in this situation of “non-feasance” (i.e, failing to do something) unless a special relationship existed which would give rise to such duty. In law school this principal is articulated through the hypothetical of standing on a lakeshore watching someone drowning — you don’t have to jump in to save the person unless you are a lifeguard (or the victim’s parent, or a member of some other very limited class).
The court found that no special relationship existed here, thus plaintiff had not articulated any basis for imposing on defendant a legal duty to prevent the infringement of plaintiff’s copyrighted works.
We talked about this issue, along with other issues like copyright preemption, as it arose in a different case back on Episode 170 of This Week in Law beginning at about the 19 minute 40 second mark:
Apple using the DMCA to stop early sales of iOS 6.
The infamous Digital Millennium Copyright Act takedown process gets quite a bit of press when content owners such as movie studios and record companies use it to take infringing copies of films or music offline. The safe harbor provisions of the DMCA are at the heart of content-distribution platforms’ defenses against infringement occasioned by users of the platform. (Think Viacom v. YouTube.)
Apple reminds us, however, that the DMCA gives all copyright owners — not just those who own copyrights in content — a mechanism for getting infringing works off the internet. According to this piece on Engadget, Apple has been contacting hosting providers of sites that offer unauthorized copies of the forthcoming iOS 6 for sale.
So the DMCA, acting in the name of copyright protection, provides a remedy for software providers to keep the clamps on parties who may have access to software for their own use (in this case, iOS developers) but go outside the bounds of such use and offer the technology for sale to others.
Facebook, Flickr, 500px and mobile sharing applications such as Instagram have replaced the hard copy photo album as the preferred method for letting others see pictures you have taken. Now photos are easy to take and easy to share. This easiness makes a number of legal questions potentially more relevant.
Let’s be honest — every one of us has been in photos that we do not want others to see. It may be just bad lighting, an awkward angle, or something more sinister such as nudity or drug use, but having a photo like that made public would cause embarrassment or some other type of harm. Sometimes the law affords ways to get embarrassing photos taken down. To the same extent the law can help, the one posting the embarrassing photo puts himself at risk for legal liability.
Invasion of privacy. If someone takes a picture of another in a public place, or with a bunch of other people, the subject of the photo probably does not have a right of privacy in whatever he or she is doing in the photo. So the law will not be helpful in getting that content off the internet. But there are plenty of situations where the subject of a photo may have a privacy interest that the law will recognize.
- “Intrusion upon seclusion,” as its name suggests, is a legal claim that one can make when someone has intentionally intruded — physically or otherwise — upon their solitude or seclusion. Surreptitiously taken photos of a person in her own home, or in a place where she expected privacy (e.g., in a hotel room or dressing room) would likely give rise to an unlawful intrusion upon seclusion.
- “Publication of private facts” is another form of invasion of privacy. A person commits this kind of invasion of privacy by publishing private, non-newsworthy facts about another person in a way that would be offensive to a reasonable person. Posting photos of one’s ex-girlfriend engaged in group sex would be considered publication of private facts. Posting family pics of one’s nephew when he was a kid would not.
Some people enjoy using Photoshop or a similar advanced photo editing application to paste the head of one person onto the body of another. (Reddit has an entire category devoted to Photoshop requests.) This can have drastic, negative consequences on the person who — through this editing — appears to be in the photo doing something he or she did not and would not do. This conduct might give rise to legal claims of infliction of emotional distress and defamation.
Infliction of emotional distress. We expect our fellow members of society to be somewhat thick-skinned, and courts generally do not allow lawsuits over hurt feelings. But when it’s really bad, the law may step in to help. One may recover for infliction of emotional distress (sometimes called “outrage”) against another person who acts intentionally, and in a way that is extreme and outrageous, to cause emotional distress that is severe. Some states require there to be some associated physical harm. A bride who sued her photographer over the emotional distress she suffered when the photographer posted pictures of her in her underwear lost her case because she alleged no fear that she was exposed to physical harm.
Defamation. A person can sue another for defamation over any “published” false statement that harms the person’s reputation. Some forms of defamation are particularly bad (they are called defamation per se), and are proven when, for example, someone falsely states that a person has committed a crime, has engaged in sexually immoral behavior, or has a loathsome disease. A realistic Photoshop job could effectively communicate a false statement about someone that is harmful to his or her reputation.
Since copying and reposting images is so easy, a lot of people do it. On social media platforms, users often do not mind if a friend copies the photos from last night’s dinner party and reuploads them to another account. In situations like these, it’s simply “no harm, no foul.” Technically there is copyright infringement going on, but what friend is going to file a lawsuit against another friend over this socially-acceptable use? The more nefarious situations illustrate how copyright can be used to control the display and distribution of photos.
In most instances, the person who takes a photo owns the copyright in that photo. A lot of people believe that if you appear in a photo, you own the copyright. That’s not true unless the photo is a self portrait (e.g., camera held at arm’s length and turned back toward the person, or shot into the mirror), or unless the person in the photo has otherwise gotten ownership of the copyright through a written assignment (a much rarer situation).
A person who finds that his or her copyrighted photos have been copied and reposted without permission has a number of options available. In the United States, a quick remedy is available under the notice and takedown provisions of the Digital Millennium Copyright Act. The copyright owner sends a notice to the platform hosting the photos and demands the photos be taken down. The platform has an incentive to comply with that demand, because if it does, it cannot be held responsible for the infringement. Usually a DMCA takedown notice is sufficient to solve the problem. But occasionally one must escalate the dispute into copyright infringement litigation.
Some other things to keep in mind
With the protections afforded by free speech and the difficulties involved in winning an invasion of privacy or infliction of emotional distress lawsuit, one can get away with quite a bit when using photos in social media. One court has even observed that you do not need a person’s permission before tagging him or her in a photo.
A person offended by the use of a photo by him or of him may have recourse even in those situations where it is not so egregious as to give him a right to sue. Social media platforms have terms of service that prohibit users from harassing others, imitating others, or otherwise engaging in harmful conduct. The site will likely remove content once it is made aware of it. (I have sent many requests to Facebook’s legal department requesting content to be removed — and it has been removed.) The norms of social media communities play an important role in governing how users treat one another, and that principle extends to the notions of civility as played out through the use of photos online.
Evan Brown is a Chicago technology and intellectual property attorney. He advises businesses and individuals in a wide range of situations, including social media best practices.
Photo credit: AForestFrolic