Lucasfilm Case Breaks New Ground for the Enforcement of U.S. Copyrights in the UK

In Lucasfilm Limited v Ainsworth, the Supreme Court of the United Kingdom answered the following question:


Whether the English court may exercise jurisdiction in a claim against persons domiciled in England for infringement of copyright committed outside the European Union in breach of the copyright law of that country.

(Opinion paragraph 50)

The court determined that the answer to this question is yes, English courts may exercise jurisdiction in such a case.  However, the court ruled that its decision is very narrow and does not apply to cases in which an intellectual property right depends on a grant from a foreign state or to cases in which the issue is validity, as opposed to infringement.  Patents are granted by national governments, so the court’s decision does not apply to patent disputes.  In contrast, in the U.S. copyright protection for a work starts when it is fixed in a tangible medium of expression.  17 U.S.C. §102.  This distinction between a right that exists because it is granted by government authority and a right that exists without such governmental action is the foundation for the court’s decision.


This case arises out of the creation of the first Star Wars film, released in the U.S. in 1977.  George Lucas conceived the film’s story line and characters.  He visualized the Imperial Stormtroopers as “threatening characters in fascist white-armoured suits” (Opinion paragraph 2).  Artist Ralph McQuarrie made drawings and paintings of the Imperial Stormtroopers.  Nick Pemberton, a scenic artist and prop maker, and Andrew Ainsworth, the respondent in this case, produced the three-dimensional form for the helmets.  Ainsworth made the vacuum-molded plastic helmets that were used in the film.  All of these events occurred in England, where the film was made.  Lucasfilm is comprised of the three companies that own the copyrights in the artistic works created for the Star Wars films. 

Lucasfilm developed a licensing business around the Star Wars films and characters and licenses models of the Imperial Stormtroopers and their equipment.  In 2004, Ainsworth made versions of the Imperial Stormtrooper helmet and armor, some of which he sold in the U.S.  The value of what he sold was between $8,000 and $30,000.  Lucasfilm sued Ainsworth in U.S. District Court, Central District of California in 2005 and obtained a $20 million default judgment, $10 million of which was for triple damages under the Lanham Act (trademark act).  Lucasfilm also sued Ainsworth in England for copyright infringement under English law, to enforce the U.S. judgment and for claims under U.S. copyright law.

The case went to trial in England in 2008.  The trial court dismissed Lucasfilm’s claims based on English copyright law and held that Lucasfilm’s judgment was unenforceable for lack of personal jurisdiction over Ainsworth.  See my June 1, 2011 and June 15, 2011 posts discussing personal jurisdiction.  Of great interest to IP attorneys, the trial court held that Lucasfilm’s U.S. copyright claims were justiciable (the court can decide the case) in England and, further, that Ainsworth infringed those copyrights.

The Court of Appeal agreed that the U.S. judgment was unenforceable and Lucasfilm did not appeal that ruling to the Supreme Court.  The Court of Appeal also agreed that Lucasfilm’s claims under English copyright law should be dismissed, but disagreed on justiciability of the U.S. copyright claims in England, ruling that those claims should be dismissed, too.  On appeal to the Supreme Court, the two issues were whether the helmet was a sculpture under English law and whether Lucasfilm’s U.S. copyright claims were justiciable in England.  The Supreme Court agreed with the two lower courts on the English law copyright issue and ruled that that claim should be dismissed.  This blog post addresses only the justiciability issue.

The justiciability issue

The court discussed at length the history of the local action rule and the act of state doctrine.  It then discussed the changes in law that have occurred since those legal theories were created, how the breadth of those theories eroded over time and why those theories should not be applied to this case.

The local action rule prohibits an English court from exercising jurisdiction over a case involving a right of title to, right of possession of or trespass to any immovable situated outside of England.  The court articulated four strands to the act of state doctrine:  1.  There is a difference between local and transitory actions and a claim for something that has a definite locality, such as a patent, cannot be heard outside of that locality.  2.  “[A]n act done abroad was only actionable in England if it was actionable as a tort according to English law, that is, was an act, which if done in England, would be a tort.” (Opinion paragraph 62).  3.  “[R]ights in immovables were created by the exercise of the sovereign power of the State, and that controversies relating to such property could only be decided in that State.”  (Opinion paragraph 63).  4.  “Every sovereign State is bound to respect the independence of every other sovereign State, and the Courts of one country will not sit in judgment on the acts of the government of another done within its own territory.”  (Opinion paragraph 65).

Two important developments in European law have undermined any argument that there is a substantial policy reason for the view that actions for infringement of intellectual property rights cannot be brought outside the State in which they are granted or subsist.

(Opinion paragraph 87).

The first important development is that under article 22(4) of the Brussels I Regulation, “there is a fundamental distinction between intellectual property claims which involve the registration or validity of intellectual property rights which are required to be deposited or registered, and those which are not.”  (Opinion paragraph 90).

The second important development is the enactment of Regulation (EC) No 864/2007, which demonstrates that there is no public policy in the European Union against litigating foreign intellectual property rights.  Even though this Regulation came into force on January 11, 2009, and does not apply to the Lucasfilm case, the court considered it a relevant expression of public policy.

In applying the law to the facts of this case, the court emphasized that

the substantial dispute has always been about the ownership of the relevant copyrights and their infringement rather than about their subsistence.

As long as the existence of the U.S. copyrights was not an issue, the court determined that this is the kind of claim that is justiciable in English courts, provided that there is in personam jurisdiction (personal jurisdiction) over the defendant. 

The effect of this decision is to provide Lucasfilm a court in which its U.S. copyright infringement claims could be heard and enforced.  Lucasfilm could not collect its default judgment against Ainsworth for copyright and trademark violations in the U.S., so filed suit in England.  The English trial court and Court of Appeal refused to enforce the judgment Lucasfilm obtained in California because they determined that the California court lacked personal jurisdiction over Ainsworth.  If the U.S. copyright infringement claims were not allowed to be brought in England, Lucasfilm would not be able to enforce those claims anywhere.

Many thanks to Robert C. Cumbow for alerting me to this case.  Bob is a shareholder at Graham & Dunn in Seattle.  His practice focuses on intellectual property, advertising, privacy and Internet issues.  Bob is also an adjunct faculty member at Seattle University School of Law, where he is highly regarded by the students.  I have it on good authority that some of the students even refer to him as “Uncle Bob.”

Photographer Alleges Copyright Infringement Over U.S. Fund for UNICEF’s Use of Photographs

Plaintiff William Anthony Photography, Inc. (WAP) specializes in portrait and editorial photography.  WAP filed suit for copyright infringement against United States Fund for UNICEF (U.S. Fund for UNICEF) in the Western District of Washington.  The dispute centers on whether U.S. Fund for UNICEF exceeded the scope of its license from WAP in its use of WAP’s copyrighted photographs.

WAP’s complaint (pdf) alleges the following:  U.S. Fund for UNICEF’s nationwide BELIEVE IN ZERO campaign began in approximately 2008 and features numerous celebrities.  UNICEF enlisted The Matale Line LLC (Matale Line), a Seattle-based advertising agency, to assist with the campaign.  Matale Line then enlisted WAP to take photographs for the BELIEVE IN ZERO campaign.  WAP was based in Seattle at the time.  “WAP licensed the images to UNICEF for the BELIEVE IN ZERO campaign at a grossly reduced rate because of the limited scope of the license and because of the philanthropic mission of the BELIEVE IN ZERO campaign.”  (Complaint pdf page 2).  The invoices to U.S. Fund for UNICEF for the images limited their use to the BELIEVE IN ZERO “print campaign.”  U.S. Fund for UNICEF paid the invoices without disputing them.  WAP took photos of Nicole Ritchie, Joel Madden, Amare Stoudemire, Lucy Liu, Laurence Fishburne and Alyssa Milano for the campaign.  WAP registered the images with the Copyright Office

After paying the invoices, U.S. Fund for UNICEF unilaterally expanded its scope of use of WAP’s copyrighted images beyond use in the print campaign.  WAP alleges that U.S. Fund for UNICEF’s nationwide use of the images for billboards, bus and train displays and airport video displays (pdf) was unauthorized and exceeded the parties’ agreement for use of the photos only in the print campaign.  WAP further alleges that U.S. Fund for UNICEF’s use of the images for illuminated displays (pdf) in train stations and on the Internet (pdf) was unauthorized and exceeded the parties’ agreement for use of the photos only in the print campaign.  

WAP alleges that U.S. Fund for UNICEF’s acts infringe its copyrights, in violation of 17 U.S.C. §106(a).  U.S. Fund for UNICEF allegedly failed to contact WAP to use the images outside of the print campaign.  WAP alleges willful infringement and requests statutory damages (17 U.S.C. §504(c)), injunctive relief (17 U.S.C. §502), impounding and destruction of the infringing articles (17 U.S.C. §503) and attorney’s fees and costs (17 U.S.C. §505).

This case is William Anthony Photography, Inc. v. United States Fund for UNICEF, Case No. C11-1121 MJP, Western District of Washington at Seattle.

Game Developer Alleges Copyright and Computer Fraud and Abuse Act Violations in Suit Against Unknown Defendants

Plaintiff Square Enix Limited develops, distributes and markets copyrighted computer video games worldwide.  This case concerns “Deus Ex: Human Revolution” (the Game), the eagerly awaited sequel to Square Enix’s “Deus Ex.”  Square Enix is preparing to commercially release the Game around August 2011.  Square Enix is a British corporation located in London, England.

Square Enix alleges the following facts (pdf):  To generate prerelease publicity, Square Enix created an unpublished version of the Game for limited preview to select video game media representatives.  It distributed the Game preview through Steam.  Steam is an Internet game distribution platform operated by Valve Corporation.  Valve is headquartered in Bellevue, Washington, in the Western District of Washington.  “Steam delivers game content using a proprietary file transfer protocol and protects it with digital rights management software.”  (Complaint pdf page 4).  Steam is believed to collect and store information about user accounts, including IP addresses and hardware identification numbers.

Square Enix authorized a reviewer from the Italian video game review magazine “Giochi per il Mio Computer” (GMC) to preview the Game using Steam.  Media representatives who previewed the Game, including GMC and its reviewer, signed nondisclosure agreements agreeing not to reproduce or disclose the Game preview.  Square Enix preregistered its copyright for the Game with the United States Copyright Office.

On May 29, 2011, one or more of Defendants Does 1-15 used the GMC reviewer username and password to log onto the restricted Steam account from an IP address not associated with GMC or its parent company.  One or more of the Defendants accessed and copied the Game preview from the Steam server without authorization and “distributed it to other Defendants and third parties using the peer-to-peer file sharing protocol BitTorrent.”  (Complaint pdf page 4).  Defendants and others then made unauthorized copies of the Game preview.

Square Enix claimed direct, contributory and vicarious infringements of its copyright by the Defendants.  Direct infringement occurs when someone copies a copyrighted work without authorization.  Contributory infringement occurs when someone who knows of the infringing activity assists in someone else’s infringing activity.  Vicarious infringement occurs when someone who has the right and ability to control the infringer’s conduct receives direct financial benefit from the infringement.  “Defendants copied, distributed, displayed, exhibited, performed, and/or created derivative works of the Game Preview, which consisted of a significant and material portion of the Game.”  (Complaint pdf page 5).  Square Enix alleges that Defendants also participated in each other’s infringing conduct and that some of the Defendants who had the ability to control the infringing conduct of others received direct financial benefits from the infringement.

Square Enix also claimed that Defendants violated the Computer Fraud and Abuse Act (CFAA).  The CFAA (18 U.S.C. §1030) protects against a variety of computer abuses arising out of unauthorized access or exceeding authorized access to a computer.  Square Enix alleges that Valve’s server is the computer which Defendants accessed without authorization and/or exceeded authorized access to obtain information they were not entitled to access.  Square Enix stored its proprietary information on Valve’s computer, limited authorized access to the information and was damaged by Defendants’ unauthorized access and/or access exceeding authorization.

This case is Square Enix Limited v. Does 1-15, C11-1045 MJP, Western District of Washington at Seattle.