No copyright liability against founder of competing company for overseeing development of infringing website

oversightAfter defendant left plaintiff’s employment to co-found a competing company, plaintiff sued defendant personally for copyright infringement based on the new company’s website’s resemblance to plaintiff’s website. The infringement theory was interesting – plaintiff alleged that defendant did not commit the infringement himself, but that he was secondarily liable for playing a significant role in the direct infringement by the new company’s employees.

Defendant moved to dismiss the copyright infringement claim. The court granted the motion.

There are two types of secondary copyright infringement liability: contributory liability and vicarious liability. A defendant is a contributory infringer if it (1) has knowledge of a third party’s infringing activity, and (2) induces, causes, or materially contributes to the infringing conduct. See Perfect 10, Inc. v. Visa Int’l Service Ass’n, 494 F.3d 788, 795 (9th Cir.2007) (quoting Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir.2004)). In the context of copyright law, vicarious liability extends beyond an employer/employee relationship to cases in which a defendant has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1022 (9th Cir.2011) (quoting Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 262 (9th Cir.1996)).

In this case, the court held that plaintiff had not alleged enough detail to state a claim of secondary liability against defendant. Instead, the complaint simply recited the elements of contributory and vicarious liability. Specifically, plaintiffs failed to allege:

  • That defendant was uniquely in possession of the original material on plaintiff’s website, but rather plaintiffs alleged that the material was publically available on the website for anyone to read and copy.
  • How defendant, as a non-employee (but founder) of the new company, was personally responsible for the content of the new company’s website. (Interestingly, the court held it was not sufficient to allege that defendant was a founder of the new company. Although plaintiffs alleged some factual details about what was actually copied from plaintiff’s website, they alleged no factual details as to defendant’s personal involvement in the infringement.)
  • Facts that suggested that defendant induced the new company to infringe plaintiff’s website.
  • Facts that suggested that defendant had the right to control and supervise the new company’s employees who were involved in the alleged infringement.

Plaintiff’s attempts to impose secondary liability were (if they had worked) a clever method for accomplishing the same objective as piercing the corporate veil. Granular control by the individual founder could be equated with the “alter ego” aspect of the veil-piercing analysis. The absence of such specific control by the individual defendant, however, left the possibility of liability only with the company.

BioD, LLC v. Amnio Technology, LLC, 2014 WL 268644 (D.Ariz. January 24, 2014)

Does publication on the web give rise to “access” in copyright infringement analysis?

2003lookbackPlaintiff sued defendant for copyright infringement. Defendant moved for judgment on the pleadings (which is essentially the same thing as a motion to dismiss for failure to state a claim except it is after defendant files an answer). Defendant asserted that plaintiff had not pled copyright infringement because under the Seventh Circuit’s “substantial similarity” test to demonstrate infringement, plaintiff had not pled defendant had “access” to the allegedly infringed work.

The court rejected defendant’s argument and denied the motion for judgment on the pleadings on this issue.

In some copyright infringement cases, a plaintiff may not have direct evidence that the defendant committed infringement. In those situations, a finder of fact may infer that infringement has occurred when it is shown that:

  • the defendant had access to the copyrighted work; and
  • the accused work is substantially similar to the copyrighted work.

In this case, defendant argued it never had access to plaintiff’s designs that it was alleged to have infringed. But the court considered the online publication, 11 years ago, of plaintiff’s designs, to find access for purposes of the motion for judgment on the pleadings:

With regard to online publication, in 2003, [plaintiff] first published the [allegedly infringed work] at [its website]. The Internet already was widely used and accessible at that time. Because the non-movant is entitled to reasonable favorable inferences in evaluating a motion for judgment on the pleadings, the online publication is enough to establish access for purposes of denying [defendant’s] motion for judgment on the pleadings.

The court’s decision provides no meaningful analysis as to why publication on the web gives rise to access. It states the finding above in such a conclusory manner as if to indicate it sets forth some per se rule. But one is left to wonder whether other factual nuance would change the answer to the inquiry: What if publication were in 1993 rather than 2003, at a time when many, many fewer people were on the web? What if the publication were behind a paywall for which defendant had no authorization to pass? What if defendant pled it did not utilize the web for this sort of information, or, even more compellingly, not at all?

Skyline Design, Inc. v. McGrory Glass, Inc., 2014 WL 258564 (N.D.Ill. January 23, 2014)

Can a website be liable for linking to infringing content?

Gawker facing Grokster-like challenge in suit by Quentin Tarantino over leaked script.

gawksterThe Hollywood Reporter has covered Quentin Tarantino’s copyright infringement lawsuit against Gawker for publishing links to leaked copies of the script of a yet-to-be-made Tarantino film. The complaint alleges that certain anonymous defendants are directly liable for infringement for uploading the script, and that Gawker is secondarily liable for the infringement.

Going after Gawker that way makes sense, because the site cannot be directly liable for infringement if it did not exploit any of Tarantino’s exclusive rights under Section 106 of the Copyright Act, viz.: the right to copy, distribute, publicly perform, publicly display, or make a derivative work.

None of those rights are implicated by simply publishing a link. So if Gawker is shown to be liable for copyright infringement, it will have to be derived from the direct infringement of the parties who uploaded the content, and/or the infringement occasioned by Gawker users who download the script.

These facts call for an analysis under the Supreme Court’s 2005 Grokster decision, which held that:

[O]ne who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.

The Grokster analysis gets some color in the Ninth Circuit (Tarantino’s suit is pending in federal court in California) in the 2013 case of Columbia Pictures v. Fung (the Isohunt case). In that case, the appellate court held that Isohunt was secondarily liable for the infringement occasioned by its users under the Grokster analysis. Like Gawker, Isohunt’s conduct did not implicate any of the plaintiffs’ Section 106 rights. Instead, its liability was premised on the conduct it undertook to direct users to the acquisition of infringing content.

Gawker is of course no stranger to controversy. Just last week we covered a Florida case dealing with Gawker’s First Amendment rights to publish excerpts of the Hulk Hogan sex tape. This bold move of publishing provocatively certainly continues that trend. But this time that move could face some serious Grokster-like consequences.

Copyright and the JFK Assassination

Fifty years ago today, which was of course long before smartphones with cameras, Abraham Zapruder filmed the assassination of President John F. Kennedy using his 8 millimeter color home movie camera. Not only did the Zapruder film become iconic, its subsequent treatment formed the basis for a later copyright case that presented some interesting issues.

A few days after the assassination, in exchange for $150,000, Zapruder assigned the copyright in the film to Life Magazine (actually its parent company Time Inc.). In 1967, Josiah Thompson wrote a book about the assassination that contained charcoal sketches copied from frames of the Zapruder film.

Time sued for copyright infringement. Defendants moved for summary judgment. The court granted the motion.

Among other things, defendants argued that the frames from the Zapruder film were not entitled to copyright protection in the first place because they lacked originality. The court rejected this argument, noting that:

The Zapruder pictures in fact have many elements of creativity. Among other things, Zapruder selected the kind of camera (movies, not snapshots), the kind of film (color), the kind of lens (telephoto), the area in which the pictures were to be taken, the time they were to be taken, and (after testing several sites) the spot on which the camera would be operated.

The case also had a fair use component. As is still the reality 50 years later, the court observed that “the [fair use] doctrine is entirely equitable and is so flexible as virtually to defy definition.” It cited an earlier decision that called the issue “the most troublesome in the whole law of copyright.”

The fair use analysis is particularly interesting in that it took place, obviously, before the 1976 Copyright Act, which codified the now well-known fair use factors. But it looked to the same language that is now in Section 107 of the Act, which then was merely a passed Hose Bill (H.R. 2512) but still under consideration by the Senate. It wasn’t until more than 10 years later that the factors actually became codified.

The court held that the fair use factors went in defendants’ favor. It noted the substantial public interest in having the fullest information available. And it concluded that people bought the book not for the Zapruder pictures, but because of the theory and explanation set forth in it, supported by the Zapruder pictures. Moreover, there was little, if any, injury to the copyright owner. There was no competition between plaintiff and defendants. And here is a theme that persists to this day, even as recently as the Google Book Search decision: “It seems more reasonable to speculate that the Book would, if anything, enhance the value of the copyrighted work; it is difficult to see any decrease in its value.”

Time Inc. v. Bernard Geis Associates, 293 F.Supp. 130 (D.C.N.Y 1968)

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