Stem Cell Photographer’s $1.6 Million Copyright Infringement Jury Verdict Upheld

Andrew Leonard photographs stem cells using an electron microscope.  Due to the technical skill required, he is one of just a handful of such photographers.  Leonard pays a scientific research institution to use its electron microscope.  He obtains cell samples from doctors, scientists and researchers.  Leonard takes the images in black and white, then uses his artistic judgment to add color to the images. 

Stemtech uses distributors to sell the nutritional supplements it formulates.  Stemtech distributors sign a contract and must comply with Stemtech’s policies and procedures manual.  Leonard licensed two of his stem cell images to Stemtech for limited use.  Stemtech failed to pay Leonard the agreed upon licensing fee and exceeded the scope of the license by using the images without a license in its promotional materials.  Further, Stemtech allowed some of its distributors to use Leonard’s images on their websites.  After Stemtech and its distributors refused to pay Leonard for the unauthorized use of his images, Leonard sued Stemtech and its distributors for copyright infringement.  The jury awarded Leonard a $1.6 million verdict against Stemtech on Leonard’s direct, vicarious and contributory infringement claims.  The issues on appeal to the Third Circuit were whether the district court should have granted Stemtech’s motion for a new trial on contributory and vicarious liability and damages and whether Leonard should have received prejudgment interest and infringer’s profits.

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Aereo Publicly Performs and Infringes Copyrighted Works

Aereo’s network receives broadcast television programming through thousands of dime-sized antennas. Aereo makes that programming available to subscribers by streaming the programming over the Internet.  Each subscriber is assigned a dedicated antenna that is not available to any other subscriber for the duration of the selected program.  A personal copy of the selected program is made for each subscriber.  Only the subscriber can access her personal copy.  When the broadcast companies sued Aereo for copyright infringement, the district court denied the broadcasters’ motion for a preliminary injunction.  The Second Circuit affirmed, ruling that Aereo does not publicly perform the transmitted works because the stream to the subscriber is a private transmission.  Read more about the Second Circuit’s decision in my post Unauthorized Streaming of Television Broadcasts Not Infringing.

Copyright owners have the exclusive right to publicly perform the works that they own.  The U.S. Supreme Court majority saw this case as reducing down to two questions:  “First, in operating in the manner described above, does Aereo ‘perform’ at all? And second, if so, does Aereo do so ‘publicly’?” (Opinion pdf page 8).  The Court ruled that Aereo’s activities are both a performance and a public performance.  Aereo infringes by violating the copyright owners’ exclusive right of public performance.

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IP Addresses Not Enough to Identify Copyright Infringers

One of the issues that frequently arises in copyright cases involving BitTorrent, a peer-to-peer Internet filing sharing protocol, is whether an individual defendant can be identified and held liable solely on the basis of an Internet Protocol (IP) address associated with a specific account.  Judge Robert S. Lasnik, Western District of Washington, recently answered that question with an emphatic “No.”  The plaintiff alleged that the defendants infringed plaintiff’s copyright by downloading the movie “The Thompsons” without authorization.

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Haiti Quake Photos Case Offers Multiple Intriguing Issues and $1.2M Jury Award

In late November 2013, a jury awarded Daniel Morel $1.2M against Agence France Presse (AFP) and Getty Images for willfully infringing photos Morel took in Haiti on January 12, 2010, immediately after the earthquake that demolished the country.  Morel, a noted photographer, swiftly contacted AFP and Getty regarding removing his photos from their websites after he found them posted there.  

AFP actually initiated the lawsuit by bringing a declaratory judgment that it did not infringe Morel’s copyrights in his Haiti earthquake photos.  This case presents a number of intriguing issues, including AFP’s and Getty’s claims that they received a license under the Twitter terms of use, AFP’s and Getty’s claims that they were third party beneficiaries of Morel’s Twitter contract, Morel’s contributory infringement and vicarious liability claims against some of the licensees, Morel’s DMCA copyright management information claim, Getty’s claim that it was protected by a DMCA safe-harbor, Morel’s willful copyright infringement claims against AFP and Getty and Morel’s Lanham Act false representation and false advertising claims.  Morel survived motions to dismiss and summary judgment motions brought by AFP and Getty on the way to his jury verdict.  This post discusses why some issues were dismissed, while others remained in the case to be decided by the jury.

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Dish’s Commercial-Skipping Feature Does Not Infringe Fox’s Copyrights

Fox is a major broadcast television network, broadcasting such shows as Glee, Bones and The Simpsons.  Fox owns the copyrights to the television shows airing on its network.  Dish Network is the third-biggest television service provider in the country.  Dish has had a contract to retransmit Fox’s content since 2002.  Dish’s current set-top box with digital video recorder (DVR) and video on demand capabilities is called the “Hopper.”  One of the Hopper’s features is “AutoHop,” which allows users to automatically skip commercials.  AutoHop is available only to users that have recorded programming using Dish’s PrimeTime Anytime service and is normally available the morning after the live broadcast.  AutoHop does not delete the commercials, so that users can still access them if they want to see them.  Dish technicians create the AutoHop feature by watching Fox’s primetime programming to mark the beginning and end of the commercial breaks.

Fox sued Dish in federal court, alleging copyright infringement and breach of contract.  The district court denied Fox’s motion for a preliminary injunction.  The district court ruled that Fox did not demonstrate a likelihood of success on most of its copyright infringement and contract claims.  Although the district court found that Dish likely both breached the contract and infringed Fox’s reproduction rights in making its quality assurance copies, the district court ruled that Fox failed to establish that it would likely suffer irreparable harm resulting from the quality assurance copies and therefore held that Fox was not entitled to an injunction.  The Ninth Circuit Court of Appeals affirmed the district court’s decision.

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Digital Used Music Sales Infringing, Not Protected by First Sale Doctrine

ReDigi Inc. claims that it is “the world’s first and only online marketplace for digital used music.”  (Opinion pdf page 1).  Capitol Records is the copyright owner for numerous songs sold on ReDigi’s website and did not authorize the sales.  Capitol Records sued ReDigi for copyright infringement, alleging direct copyright infringement, inducement of copyright infringement, contributory copyright infringement, vicarious copyright infringement and common law copyright infringement. 

The copyright owner’s exclusive rights under the Copyright Act include the right to make copies, distribute the work and publicly perform the work.  These rights are limited by the first sale doctrine, which allows the lawful owner of a particular copy of the work to sell the work without the permission of the copyright owner.  Last week’s blog post, First Sale Doctrine Not Limited by Geography, Rules U.S. Supreme Court, describes the first sale doctrine in detail.  “The novel question presented in this action is whether a digital music file, lawfully made and purchased, may be resold by its owner through ReDigi under the first sale doctrine.”  (Opinion pdf page 4.)  The district court ruled that it cannot.

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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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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.