ASCAP Challenge to Royalties for Mobi Offerings Rejected by Second Circuit

The American Society of Composers, Authors and Publishers (ASCAP) and MobiTV (Mobi) reached an impasse in their dispute about the royalty fees for a license for Mobi to publicly perform works controlled by ASCAP.  At the district court level, ASCAP claimed Mobi owed it $41 million in fees for the years 2003 to 2011.  Mobi calculated that it owed ASCAP $301,257.99 for fees due from November 2003 to July 2009.  The district court ruled that Mobi owed ASCAP $405,000 for fees from November 2003 through March 2010. 

The district court calculated its award using the amounts Mobi pays to cable television networks for content and the revenue Mobi receives from wireless carriers as the revenue base, i.e. the figure from which the royalties are calculated.  ASCAP appealed the case to the Second Circuit Court of Appeals, claiming that the district court should have calculated the royalty rate based on the retail revenues wireless carriers receive from sales to their customers.  The Second Circuit affirmed the district court’s decision.

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Computer Fraud and Abuse Act’s Purpose is to Punish Hacking, Not Corporate Misappropriation, Rules Ninth Circuit

The latest word from the Ninth Circuit is that the Computer Fraud and Abuse Act (CFAA) does not protect employers against misappropriation by its employees and former employees of trade secrets and other confidential company information. 

In U.S. v. Nosal, David Nosal was a former employee of Korn/Ferry, an executive search firm.  Nosal decided to start his own business to compete with Korn/Ferry.  He persuaded current Korn/Ferry employees to use their log-in credentials to download, and provide to him, information kept in a confidential database on a Korn/Ferry computer.  Although the employees were authorized to access the database, Korn/Ferry policies forbid disclosing confidential information.  The federal government indicted Nosal, charging him with CFAA violations, trade secret theft, mail fraud and conspiracy.  The CFAA charges involve violations of 18 U.S.C. §1030(a)(4), “for aiding and abetting the Korn/Ferry employees in ‘exceeding their authorized access’ with intent to defraud.”  (Opinion pdf page 3).

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Loan-Out Corporations Ambush Copyright Grant Termination Rights

I previously discussed the copyright termination of transfer provisions in my post, Termination of Transfer Provision Applies to All Authors, Not Just Musicians17 U.S.C. §203 provides for the termination of a copyright grant 35 years after the grant was made, if the grant was made after January 1, 1978.  Section 304(c) creates a similar right of termination for copyrights that were registered before January 1, 1978.  The law on copyright termination of transfers recognizes the unequal bargaining power between publishers and authors and is an attempt to allow authors and their families the opportunity to reclaim and benefit from the authors’ commercially successful works. 

The effect of loan-out corporations on the implementation of the §203 grant termination provision adds a potentially fatal wrinkle to an author’s ability to successfully terminate a copyright grant.  A loan-out corporation is corporation that is usually wholly owned by one person and is used to “loan-out” that person’s services to employers.  Actresses, musicians and professional athletes often provide their services through loan-out corporations.  Loan-out corporations generally limit the liability of the employee and provide tax benefits.  The use of loan-out corporations dates back to the 1930’s. 

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Rosetta Stone’s Trademark Infringement Suit Against Google Resuscitated by Fourth Circuit

Rosetta Stone sued Google over Google’s keyword search and advertising trademark use policies, contending that those policies create both a likelihood of consumer confusion and actual consumer confusion.  Rosetta Stone asserted that the likelihood of confusion and actual confusion misleads Internet purchasers into purchasing counterfeit Rosetta Stone software.  Rosetta Stone claimed the Lanham Act (trademark law) claims of direct, contributory and vicarious trademark infringement and trademark dilution, and the state law claim of unjust enrichment.

The district court granted Google’s summary judgment motion on the Lanham Act claims and dismissed the unjust enrichment claim.  On appeal, the Fourth Circuit affirmed the district court’s rulings on the vicarious infringement and unjust enrichment claims, but vacated the district court rulings on the direct infringement, contributory infringement and dilution claims and remanded those claims to the district court for further proceedings.

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