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On this week’s Technology Liberation Front podcast, a number of IP luminaries discuss the UMG Recordings v. Augusto case, in which an eBay seller is defending against a copyright infringement claim based on his resale of “promotional” CDs given away by UMG.

Full disclosure: I’m proud to be a member of the team representing Mr. Augusto.

On July 17, Chief Judge Spencer of the Eastern District of Virginia issued an opinion in Tavory v. NTP. This case is a follow-on to the NTP v. RIM patent litigation, and features a number of copyright claims by Tavory, alleging that he had written some of the software at issue. The patents in suit contain source code that Tavory claims to have authored, and Tavory claims that the reproduction of the patents themselves is copyright infringement.

Tavory had a problem, though. He hadn’t registered his copyrights at the time he wrote the software, and no copy of the relevant version of the software existed. Copyright registration, a prerequisite for an infringement suit, requires the deposit of a copy (although in the case of software the requirements are very odd). So what did Tavory do? He tried to reconstruct, from memory, what the relevant version of the source code would have been, and deposited the result.

Turns out you can’t do that.

In explaining why, Judge Spencer sets forth the following gorgeous passage on the doctrinal necessity of the deposit requirement:

In one sense, the deposit requirement serves a gatekeeping function. Effective registration of a copyright is predicated on the submission of some objective indicia of an individual’s authorship. In another sense, the requirement serves an evidentiary function. The copies that are submitted in connection with an application for registration then become part of a record by which claims of infringement are tested. The utility of these functions, as well as our confidence in the integrity of the copyright system, breaks down when recollection is tolerated. That is because memories are inherently unreliable. They are susceptible to influence and subject to change. Time is especially corrosive, and the more time that passes, the more our memories fail. These are simple facts of life, and the Copyright Act deals with these facts by not dealing with them at all. For the purpose of the deposit requirement, the degree to which the registrant relied on his memory does not matter. The Copyright Act does not countenance the validity of any deposit copy that was made with even the slightest reference to recollection.

Accordingly, the court held that Tavory’s copyright registration was invalid, and that the court lacked subject matter jurisdiction.

But the lack of subject matter jurisdiction didn’t keep the court from saying a number of other smart things. The most interesting relates to the copyright “litigation privilege” — the relatively ill-defined idea that infringement that occurs in the course of litigation is sometimes not actionable, either as a fair use or under some independent equitable doctrine. Tavory claimed that NTP’s reproduction of the patents-in-suit in connection with the litigation itself constituted infringement; NTP asserted that copying incident to litigation was fair use.

The court found that NTP’s copying was fair use, holding that, while a categorical rule might be inappropriate, “where, as here, the works produced before the Court are material to the litigation, and where the party offering production of the work has done so without notice or knowledge of another’s claim to copyright, the equities are in favor of fair use.” That would seem to cover nearly all of the prima facie “infringement” that goes on in the course of litigation, and provides needed guidance in a tiny, seldom-litigated corner of copyright law.

UPDATE: My initial post failed to recognize that this opinion contains one of the finest sentences in the Federal Supplement 2d:

In 1993, MTV aired Beavis and Butt-Head, an animated series that centered on two Texas teens and their penchant for petty vandalism, music videos, and “chillaxin’.”

Wondering why it’s relevant? See Kodadek v. MTV Networks, 152 F.3d 1209 (9th Cir. 1998), in which the plaintiff deposited with the Copyright Office drawings he made in 1993, after seeing the allegedly infringing TV show. The plaintiff asserted that the drawings were just like ones he’d given to Mike Judge, Beavis auteur, in 1991.  Turns out you can’t do that.

I’m at the Business Success Using Open Source Software panel at the ABA Annual Meeting in San Francisco. The participants are:

• Katherine Spelman (moderator, Cobalt LLP)
• Pam Samuelson (Boalt Hall)
• David Kappos (IBM)
• Karen Copenhaver (Choate Hall & Stewart; fmr. GC, Black Duck Software)
• David Marr (Sun)

As with all of my liveblogging, these are my impressions of the proceedings and are not for attribution to the participants, and certainly not to me.
David Kappos:

OSS has come a long way in the 20 years it’s been on the scene. It started as a set of programming tools put out by the FSF; we lawyers eventually came to understand and like the GPL, turning copyright law into a tool of inclusion rather than exclusion.

OSS has now grown in an amazing way; there are more than 150,000 OSS projects, dozens of license agreements, Wikipedia, world-class programming tools, Firefox, Linux, and a myriad of business models that make OSS as a development paradigm not only profitable but preferred.

We can’t find a software start-up in the Valley that isn’t using OSS. If you don’t think your clients are using OSS, you have a surprise coming.

And now governments are permitting and even mandating the presence of OSS in their bidding processes.

This brings us to some questions: How does business get profitably conducted around free software? What are the roots of OSS? Can it apply to other fields? Why haven’t other fields adopted open development models? How does the OSS model that works so well for copyrights work for patents? What are the limits of the OSS model, and what’s coming in the future?

A number of business models have emerged around OSS:

• Support and service. This is the Red Hat model. Software is distributed under an OSS license, with services offered for a fee.
• Building block model. This is the TiVo model. Companies are using OSS as a component of their business — embedded Linux, etc.
• Add-on solutions model. This is the IBM model. Using OSS (typically Linux) and offering solutions that build around that and integrate it into larger situations. This is an extremely successful business and scales well.
• Proprietary extension model. This involves developing proprietary software that links to OSS in conformance with the GPL, then donating that proprietary software to the community as its competitive advantage fades. IBm does this with WebSphere.

Most of those business models leverage shared infrastructure. This is all about avoiding spending money on unproductive effort and spending it close to customers’ needs.

Can this work outside of software? Yes. IBM instituted an organization called power.org, where we put a giant amount of architecture information about the power architecture (which is a microprocessor architecture) into the public domain. It’s working: there’s a vibrant community.

What about pharma? An organization called CAMBIA in Australia licenses bio innovations under open principles.

And it works for information, too: Wikipedia and, indeed, the GPL3 process itself. Open development will work wherever there is commonality of problems, opportunity for profit or reputational gain from contributions, and call for open standards for interoperability.

It can work for patents as well as copyrights. IBM donated 500 software patents for free use in OSS. We wanted to make patents less threateing to OSS — and even a tool to promote OSS. Many other companies, including OBM, have announced more pledges since then. Then there was the formation of OIN. Google just joined as a licensee. This is rationalizing the discoursein the OSS/patent area.

Also, Peer-to-Patent is bringing the two areas together. It’s allowing experts from all over the world to submit and comment on prior art. It’s apparent that this is going to be the wave of the future — “the USPTO meets the 21st century.”

So what about efforts to capture the millions of lines of OSS as prior art? We’ve been working on that — there’s lots still to do, but the idea is to categorize the code by patent classes so that they can easily be used by patent authorities.

OSS is on its way to turning patents to a positive force for OSS.

OSS is going to continue to flourish and grow in areas other than software. We had a CodeJam to help solve major world problems, and taking the IP stress out of the system allows people to collaborate better.

OSS is here to stay; it will grow; it will spread to other problems. It is showing that, like copyrights, patents can not only coexist with OSS but fuel its growth. The OSS model with thrive alongside proprietary development, and will create plenty of legal issues along the way.

Pam Samuelson:

I’ll be talking about OSS and competition. I got interested in this when I taught a class with Mitch Kapor. I’ve also written a paper on it.

Two perceptions:

• Proprietary software and OSS are in a deadly war, and one will strangle the other. (This is hyperbole. Eben Moglen writes about “triumph” over proprietary software; Craig Mundie writes similarly harshly about OSS. Pay no attention.)
• FOSS is hostile to IP. (This is also false. Some people who like OSS are also hostile to IP, but nothing inherent in OSS is outside the standard IP narrative.) The specifics of the license don’t matter that much to the developers. It’s a social constitution, a social norm. Not only will you get sued if you violate the license, but you’ll be shunned — and that’s sometimes worse.

I agree with David that FOSS and proprietary software can coexist in the same products, and will increasingly do so. Also, there are some sectors where one or the other will just prevail: avionics software will probably always be mostly proprietary.

But some places, there is head-to-head competition. IE v. Firefox. Linux v. various server OSes. You get more innovation in such situations, and that’s great. Firefox is driving innovation in IE, and vice versa. MySQL has put price pressure on Oracle. And so on.

OSS has significant development advantages: spreading out common work, a supportive community, and it can be (though it is not necessarily) cheaper. It’s certainly easier to modify internally, by its nature.

There are some risks. One is, “who do I call if it breaks?” For this reason, support services can be sold. Forking can lead to incompatability. Patent risks are still real. Linux may now be in a really good place, but not all projects have companies throwing patent licenses at them. And it’s not easy to transition a proprietary product into a successful OSS project. (Netscape had to be rebuilt substantially to make it into an OSS product.)

Overall, OSS can be less risky: less investment than proprietary development, and somewhat less chance for financial reward.

David Marr:

I’ll be talking about the GPL. The area that can be most difficult for us as lawyers — copyleft. Ask them:

• What GPL code is being used?
• What form are the bits in — binary or source?
• What has been done with the bits?

Then you get three hard questions:

• When is the source obligation triggered?
• What must we release?
• How must we release it?

[He has very good slides that explain the answers to these questions, including an amazing slide with a spectrum of situations drawing the line when copyleft attaches. I’ll try to get a copy and post them.]

Karen Copenhaver:

Design that Matters is a company that started a number of years ago. You could graduate from an engineering school without having anything you designed get manufactured. These kids got this idea that people should put their designs up against manufactured products — and that they could put together a portfolio of products that NGOs around the world needed and use them as student design projects. Then the students could put their designs back into the portfolio, if they wished.

The first product was an IV clamp. (They were quite non-intuitive.) The second was a projector for schools. (Turns out school is at night, and there’s no light for books.) The third is a baby incubator. (Existing incubators required consistent electricity and frequent changes to the filters.)

Building a world where it’s easy (but not mandatory) to share — with an open source design model — was the goal. It’s a wonderful story. We’re five years into it, and we’ve never had an IP issue. The sharing rate is very high. The students realize the joy of being permitted to share.

When I think about OSS, I think about making things possible, like Wikipedia, that could not have been imagined before.

The idea I wanted you to get was that world-leading companies are embracing this model as a way to find efficiency — not just as a legal curiosity or a project for hairy geeks. None of us is alone, and OSS is a very sophisticated acknowledgement of our interdependence.

It has restored competition to the software industry, and the compeititon is perfect, due to the ability to fork any project. There’s more and more infrastructure that none of us wants to build alone. It is providing, and is going to provide, a platform for innovation.

[Then some very interesting questions and answers, which went too fast for me to write down.]

It would be my guess that the readers of this blog know more than the average bear about copyright law. So you, like me, have probably been mildly annoyed at times when presented with a copyright warning that goes well beyond a notice of an assertion of exclusive rights granted by the Copyright Act. You know the ones I’m talking about: “This film is protected by copyright law. If you so much as hum a tune found herein, the FBI will burn down your house.”

Well, it seems the Computer and Communications Industry Association is even more annoyed than the rest of us. Wednesday, the CCIA filed a complaint with the Federal Trade Commission alleging that overly-enthusiastic copyright warnings constitute unfair and deceptive trade practices. The complaint points in particular to the NFL’s well-known admonishment that any public use of “pictures, descriptions, or accounts of the game without the NFL’s consent is prohibited” and Major League Baseball’s requirement of the Baseball Commissioner’s “express written consent” to disseminate any “accounts and descriptions” of the game. Of course, that’s all hooey: repeating facts about a sporting event has nothing to do with copyright law, since facts themselves are never copyrightable. Likewise, Harcourt Books’ warning that “No part of this publication may be reproduced or transmitted in any form” just isn’t true; limited portions (and, sometimes, the whole thing) may be reproduced or transmitted for purposes of fair use, and the whole thing may be reproduced or transmitted under certain circumstances under 17 U.S.C. 108.

I’m not entirely sure that this sort of misbehavior is all that harmful: the Commissioner of Baseball could claim he was Marie of Roumania, and it wouldn’t make it so. Misinformed consumers might refrain from lawful activities that they otherwise would have enjoyed, but I’m not convinced that many consumers are cowed by scary legalese. Consumers — rightly or wrongly — do whatever they want and know they won’t get caught; businesses, who will get caught, are sophisticated enough to figure out that these warnings are baloney. If anything, consumers probably identify the exaggerated copyright warnings for what they are, then lump legitimate copyright notices with the hooey, to the overall detriment of consumer copyright compliance. The relief the CCIA requests would no doubt be a good thing: it would enjoin copyright notices that lie about the scope of copyright. But I’m not sure that would have much practical effect other than achieving the (concededly Right and Noble) goal of shielding copyright geeks like me from annoyance.