Time for a Copyright Misuse Affirmative Cause of Action?

The Copyright Act protects the rights of copyright owners, but it does not necessarily provide relief to those who believe that a copyright owner abuses copyright law by filing copyright infringement lawsuits as a business model.  For example, some adult film companies have been accused of relying on proceeds from copyright infringement actions as their major source of revenue.  James Dore was an anonymous “Doe” defendant in a copyright infringement case filed by New Sensations, Inc., an adult film producer.  New Sensations filed copyright infringement cases against Does believed to have downloaded or distributed its film over BitTorrent, a peer-to-peer network.  Dore settled with New Sensations.  Dore then sued New Sensations and others involved, alleging that “the lawsuit brought against him was initiated in bad faith, harmed his reputation, and formed the basis for attempted extortion.”  (Opinion pdf page 1).

New Sensation and the other defendants brought a Fed.R.Civ.P. 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted.  The district court granted the defendants’ motion regarding the federal law claims.  “The complaint asserts claims for ‘copyright trolling,’ or in the Amended Complaint, ‘copyright abuse.’  Federal law recognizes a claim of ‘copyright infringement,’ 17 U.S.C. § 501, but not ‘copyright trolling’ or ‘copyright abuse.’”  (Opinion pdf page 7).  While the district court is correct in stating there is no claim for copyright abuse, there is a defense to allegations of copyright infringement called “copyright misuse.”  Copyright owners wield a disproportionate amount of power compared to the average consumer.  Maybe it’s time for the creation of an affirmative copyright misuse claim, so that ordinary consumers won’t feel so powerless when faced with corporate copyright infringement claims.

This case is Dore v. New Sensations, Inc., No. 13-10315-FDS, U.S. District Court, District of Massachusetts.

Criminal Copyright Infringement Does Not Equal Strict Liability

This case highlights one of the differences between civil liability and criminal liability in copyright infringement cases.  Julius Liu owned Super DVD, a company that commercially replicated CDs and DVDs for customers.  Replication is a different copying process than making a copy by burning.  Replication involves using a master copy to stamp content onto CDs and DVDs with a molding machine.  Immigration and Customs Enforcement agents obtained a warrant and searched the Super DVD warehouse in July 2003.  Lui was convicted of three counts of criminal copyright infringement and one count of trafficking in counterfeit labels after the grand jury returned the second superseding indictment in February 2010.

Liu appealed his convictions to the Ninth Circuit Court of Appeals.  The Ninth Circuit ordered dismissal of Liu’s conviction on the second count of criminal copyright infringement, ruling that Liu’s counsel was ineffective for failing to raise a statute of limitations defense to that count.  The Ninth Circuit vacated and remanded Liu’s convictions on the other counts, ruling that the district court improperly instructed the jury on the meaning of the words “willfully” and “knowingly” in the context of a criminal case.

Continue reading “Criminal Copyright Infringement Does Not Equal Strict Liability”

Arguably Obsolete Trade Secrets Still Protected By Economic Espionage Act

Hanjuan Jin is a naturalized U.S. citizen of Chinese origin.  She earned a degree in physics from a Chinese university and master’s degrees in physics and computer science from American universities.  She worked as a software engineer at Motorola from 1998 to 2007.  Jin was chiefly involved in working on Motorola’s Integrated Digital Enhanced Network (iDEN).  iDEN technology allows cell phone handsets to also work as walkie-talkies. While on a prolonged trip to China, Jin solicited employment with Sun Kaisens, a Chinese company that develops telecommunications technology for the Chinese military.  After returning to the U.S., Jin bought a one-way plane ticket to China, downloaded thousands of internal, proprietary Motorola documents regarding iDEN and obtained $31,000 in U.S. currency.  She was intercepted by Customs agents at the Chicago airport while attempting to leave the country with the Motorola documents and the cash.

Jin was convicted at a bench trial of theft of trade secrets, under the Economic Espionage Act, 18 U.S.C. §1982.  The trial judge thought that Jin was guilty of economic espionage (§1831), with which she was also charged, but that her guilt had not been proven beyond a reasonable doubt at trial.  Jin was sentenced to 48 months in prison.  She appealed her conviction and sentence to the Seventh Circuit Court of Appeals, arguing that what she took was not a trade secret and that she neither intended nor knew that the theft would harm Motorola.  The Seventh Circuit affirmed the trial court’s decision.

Continue reading “Arguably Obsolete Trade Secrets Still Protected By Economic Espionage Act”

WWE Event Copyright Infringement Damages Claims Smacked Down

This case illustrates the difficulty in proving actual damages and profits damages in copyright infringement cases.  Anthony Lawrence Dash composed “Tony Gunz Beat,” (TGB), an instrumental music track.  Floyd Mayweather, a famous boxer, co-wrote lyrics to TGB and renamed the song “Yep.”  Mayweather used “Yep” as his introductory music for two World Wrestling Entertainment, Inc. (WWE) broadcast events he appeared in.  Dash sued Mayweather, WWE and others for copyright infringement.

As Dash did not register his copyright until after the alleged infringement occurred, he could not recover statutory damages and was limited to proving his actual damages and the infringers’ profits.  The parties requested the district court to rule on whether Dash was entitled to damages before determining whether the defendants were liable for copyright infringement.  The defendants moved for summary judgment on both damages issues.  The district court ruled that Dash was not entitled to receive either actual damages or profits damages.  Dash did not present evidence that TGB had a market value, precluding actual damages.  Dash did not present evidence of a causal link between the playing of his song and an increase in profits received by the defendants, preventing profits damages.  The district court then dismissed the case entirely, including the liability portion of the case.  The Fourth Circuit Court of Appeals affirmed the district court’s decision. 

Continue reading “WWE Event Copyright Infringement Damages Claims Smacked Down”