Court sides with Apple in copyright dispute over photo in iPhone commercial

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.]

DMCA takedown notices are not just for content

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.

IBM’s Siri ban underscores important business concern over trade secrets

IBM doesn’t let its employees use Siri, out of concern Apple may store and use sensitive IBM data. This decision on IBM’s part underscores an important business concern that companies of all sizes — not just behemoths like IBM — either have or should have.

internet anonymity

Apple’s data usage policy that governs how it treats Siri inquiries says that Apple can use the information it collects to, among other things, improve the service. That’s a pretty broad grant of authority. Because the system that makes Siri available is so complex and multifaceted, Apple could reasonably justify extracting and using the information contained in just about any question people ask Siri. When that information comes from another major player in the competitive space, the implications of the appropriation of proprietary information become obvious.

IBM’s big concern is likely focused squarely on the protection of its trade secrets. State law provides the contours of trade secrets law, so the elements vary from state to state. But in general, a company can enforce its exclusive rights to possess and use information that (1) gives that company a competitive advantage, and (2) which is subject to efforts to keep secret. That latter part — keeping the information secret — is a big reason for nondisclosure agreements, password protected servers, and sensible restrictions on employee use of third party technologies (like social media and search tools like Siri).

Evan Brown is a Chicago technology and intellectual property attorney, representing businesses and individuals in a variety of situations, including matters dealing with the identification and protection of confidential business information.

Photo credit: Spec-ta-cles under this license.

Ninth Circuit: Apple did not engage in copyright misuse by restricting OS X to Apple hardware

Apple Inc. v. Psystar Corp., — F.3d —, 2011 WL 4470623 (9th Cir. September 28, 2011) [PDF]

Back in 2008, Apple sued Psystar for copyright infringement arising from Psystar’s manufacture and distribution of computers preloaded with copies of Mac OS X. Psystar lost at the trial court level, with the judge rejecting its argument that Apple engaged in anti-competitive, “copyright misuse” by requiring in its OS X software license agreement that the operating system be used only on Apple hardware. Psystar sought review of this ruling. On appeal, the Ninth Circuit affirmed.

Copyright misuse is a defense (not an independent cause of action) that one sued for infringement can raise. Courts will find that a plaintiff has engaged in copyright misuse if the enforcement of the plaintiff’s copyright will restrain the development of competing products. In this case, Psystar claimed that Apple’s enforcement of its software license restrained the development of competing hardware.

The court rejected that argument because Apple’s enforcement of its software license agreement, requiring that the software be used only on Apple hardware, did not restrict Psystar from developing its own software. The court found that:

Apple’s [software license agreement] does not restrict competitor’s [sic.] to develop their own software, nor does it preclude customers from using non-Apple components with Apple computers. Instead, Apple’s [software license agreement] merely restricts the use of Apple’s own software to its own hardware. . . . Psystar produces its own computer hardware and it is free to develop its own computer software.

This case solidifies Apple’s approach to enforcing a controlled, closed ecosystem for the distribution of software used for Macs and iDevices. Now that a federal court has found that Apple is not playing unfairly by keeping its users from loading Apple software onto non-Apple hardware, the company can likewise maintain the technological controls that ensure only approved applications are used in connection with the operating systems. Marketplaces for third-party hardware running Apple software would greatly lower the entry barrier for hackers and enthusiasts to play outside of the rules. But this decision from the Ninth Circuit keeps those rules firmly in place.

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