March 30, 2007

More on Perfect 10 v. CCBill

Here’s a rundown of the key holdings in yesterday’s Ninth Circuit opinion in Perfect 10 v. CCBill.

  1. DMCA section 512 Safe Harbor. The first issue was whether the defendants — a hosting provider and a credit card processor for sites hosting allegedly infringing material — could claim the benefit of the safe harbor from claims of secondary copyright liability found in 17 U.S.C. 512. It’s remarkable how the parties raised issues implicating nearly every nook and cranny of a rather complicated section of the Copyright Act.
    • Termination Policy. In order to get the benefit of the section 512 safe harbor, a service provider must have “adopted and reasonably implemented” a policy for terminating “repeat infringers” in “appropriate circumstances.” 17 U.S.C. 512(i)(1)(A).
      • Such a policy is implemented by having “a working notification system, a procedure for dealing with DMCA-compliant notifications, and if it does not actively prevent copyright owners from collecting information needed to issue such notifications.”
      • Maintaining a record of “most” users in order to identify repeat infringers is sufficient to meet this standard.
      • A repeat infringer policy is always “reasonable” if the service provider responds when it has “knowledge of the infringement.”
      • A service provider’s action or inaction in response to claims of infringement made by other copyright holders are relevant to show whether the service provider’s repeat infringer policy is “reasonably implemented”.
    • Takedown notices.
      • A takedown notice sent pursuant to section 512(c)(3) has effect only if it includes each of the six items required by that section as part of the same document.
      • Of particular importance is the declaration under penalty of perjury required by section 512(c)(3)(A)(vi). This is because “[a]ccusations of alleged infringement have drastic consequences: A user could have content removed, or may have his access terminated entirely. If the content infringes, justice has been done. But if it does not, speech protected under the First Amendment could be removed.”
    • Apparent infringement. A service provider loses immunity if it fails to take action when it is “aware of facts or circumstances from which infrinigng activity is apparent.” 17 U.S.C. 512(c)(1)(A)(ii).
      • Domain names that can be read to imply infringement do not make infringement “apparent.” Here, the court held that the domain names “” and “” were not admissions that the photographs found there were actually illegal or stolen, but were “an attempt to increase [the sites'] salacious appeal.”
      • A poorly-worded copyright disclaimer stating that the webmaster does not “claim any rights to these files, other than the right to post them” did not make infringement apparent.
    • Standard technical measures. There’s a provision in section 512(i) stating that a service provider loses its safe harbor if it interferes with certain narrowly-defined “standard technical measures” that are “used by copyright owners to identify or protect copyrighted works.” Rather cleverly — though, I think, probably erroneously — Perfect 10 argued that accessing sites on the web is such a “standard technical measure,” and by refusing to sell an account to Perfect 10 for access to the website interfered with that measure. This issue was remanded for further factual development, both as to whether website access is a “standard technical measure” under the statute’s definition and whether CCBill blocked Perfect 10′s credit card because it was investigating infringement or because it had previously refused CCBill’s charges.
    • Transitory communications. There’s also a provision in section 512(a) providing a separate safe harbor for service provisers who are “conduits” for infringing content, providing connections without modifying the content. The paradigm case of such a service provider is a network backbone operator. Rather cleverly, CCBill claimed to be just such a conduit, since it sends credit card data from the billing site to the relevant banking systems. Perfect 10 argued that for the safe harbor to apply, the condut must carry the allegedly infringing communications. Recognizing that “[t]he Internet as we know it simply cannot exist if those intervening computers must block indirectly infringing content,” the court held that “[s]ervice providers are immune for transmitting all digital online communications, not just those that directly infringe.”
    • Information location tools. Yet another provision in section 512(d) immunizes service providers who provide “information location tools” that link users to infringing content. Rather cleverly, CCBill claimed that by including a link back to the relevant website in a confirmation email after the user has used CCBill to pay for her subscription, CCBill is operating an “information location tool” and all of its operations are immune from secondary copyright liability. The court rejected this broad reading, holding that the “information location tool” safe harbor thwarts only claims that the provision of links to infringing content gives rise to liability, and does not immunize the linker’s entire operation from claims unrelated to the link.
    • Information posted by users. Section 512 also limits the liability of service providers who provide networked storage space for information uploaded by users. At issue here was whether the defendants met the requirement of section 512(c)(1)(B), that it “not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” The court held that “direct financial benefit” in section 512 imports that term’s meaning from the common law of vicarious copyright liability. In that context, the “direct financial benefit” analysis asks “whether the infringing activity constitutes a draw for subscribers, not just an added benefit.”
  2. Communications Decency Act. The Communications Decency Act, 47 U.S.C. 230, immunizes users and providers of interactive computer services from liability arising out of information posted or transmitted by another. The statute carves out an exception for “intellectual property,” so section 230 does not immunize a service provider from secondary liability for, for example, users’ violations of the Copyright Act (though section 512 does provide such immunity). The court’s important holding here is that “intellectual property” in section 230 means only “federal intellectual property.” Thus, section 230 renders users and providers of online services immune from secondary liability for a another’s infringement of any state-law IP right, such as rights of publicity, trade secrets, and state trademarks. This would also apply to pre-1972 sound recordings, the only class of works still covered by state copyright laws.

This unanimous and straightforward opinion clarifies a large number of open questions related to secondary liability for the infringing acts of others under federal copyright law and under state intellectual property laws. It shows a pragmatic understanding of the risks faced by online service providers in a way that few other appellate opinions have. Further, it shows recent Ninth Circuit appointee Milan Smith to be a clear writer and a thorough legal analyst.

March 29, 2007

9th Cir. Decides Perfect 10 v. CCBill

The Ninth Circuit Court of Appeals today released its decision in Perfect 10 v. CCBill. The opinion deals with DMCA section 512 and CDA section 230. I’ll have more to say once I’m done reading it.

March 21, 2007

That’s Not Trademark Law’s McJob

This story from Der Spiegel reports an attempt by McDonald’s to get the word “McJob” (“a low-paid job with few prospects, typically one taken by an overqualified person”) from the Oxford English Dictionary.

“Dictionaries are supposed to be paragons of accuracy. And it this case, they got it completely wrong,” Walt Riker, a Mickey D’s McSpokesman complained to the Associated Press. “It’s a complete disservice and incredibly demeaning to a terrific work force and a company that’s been a jobs and opportunity machine for 50 years.”

I’m sure the city of Shanghai would prefer that its name couldn’t be used as a verb, and Vidkun Quisling probably wasn’t thrilled to see himself nouned. But language develops in a generative way that’s not centrally controlled. Dictionaries accurately report the way people use language, not the way people should use language. If people constantly misuse, say, the word “hopefully,” it takes on the meaning that’s assigned to it, in dictionaries as on the street. Trademark ownership does not confer a right to control the development of the English language.

March 8, 2007

USPTO Sounds the Alarm on P2P (Curiously)

Via 27B/6 comes news that the United States Patent and Trademark Office has published a report on the dangers of P2P filesharing. Here’s the press release, and here’s the report.

I, too, am very concerned about the dangers P2P filesharing poses to patent and trademark holders. Why, who knows what patents might be infringed by the BitTorrent or FastTrack protocols? The P2P software distributors might be marking their goods with the name of an unrelated firm, in an attempt to pass off their goods as manufactured by another! This menace to inventors and marketers has been brought into your child’s bedroom!

Oh, wait. The report is about copyright infringement, not patent or trademark infringement. And that’s what makes this whole affair rather curious. The USPTO doesn’t administer copyright law; the Copyright Office does. This matters, in part, because the Copyright Office is part of the Library of Congress, which is part of the Legislative branch, whereas the PTO is part of the Department of Commerce, which is part of the Executive branch.

The PTO has attempted from time to time — particularly under Bruce Lehman — to take over the administration of copyright law, but these attempts have been rebuffed. This report was nominally issued by the PTO’s Office of International Relations (the only part of the PTO which has any copyright-related duties, in that it advises foreign governments on all IP issues and deals with all IP treaties), but the report’s connection to any international matter is unclear. One wonders whether this is the start of yet another attempt by the PTO to gain authority over copyright law.

August 24, 2006

Barney Parodist Seeks Declaratory Judgment

The EFF, along with a team at Akin Gump led by Elizabeth Rader, represent Dr. Stuart Frankel in a declaratory judgment action filed yesterday against Lyons Partnership, owners of copyrights and trademarks in Barney, the fictional purple dinosaur. Lyons sent numerous C&D letters to Frankel regarding a parodic page on his website. Highlights of those C&Ds include:

The EFF, it would seem from the exchange of correspondence attached to the complaint, was already a bit peeved at Lyons for sending a C&D in 2001 threatening to sue over the EFF’s mirror of a rather tasteless but nonetheless noninfringing essay about Barney written in 1994 and stored in an archive of BBS textfiles.

There’s certainly room for settlement. However, unconditional capitualtion on the part of Lyons, while the wisest course, may not be the likeliest. I wouldn’t be surprised if Frankel settled for nothing less than a judicial declaration of the parodic nature of his use. He doesn’t have much to lose, since he has some of the best copyright lawyers on the planet working on his side pro bono.

July 21, 2006

TTAB Sanctions Stoller

As reported here at TTABlog, Leo Stoller, the litigious trademark abuser who has not yet sued me for blogging about him here, has been sanctioned by the Trademark Trial and Appeal Board. He’s filed over 1,800 groundless motions for extensions of time to oppose trademark filings, and apparently uses that time to attempt to extract settlement money from the applicants. The order vacates those extensions and bars Stoller from filing more for two years. Thereafter, Stoller will have to file through an attorney — and it seems likely his filings will have to decrease in number or increase in quality, because attorneys (unlike unrepresented litigants like Stoller) can be disbarred for making groundless filings.

On his blog, Stoller vigorously opposes the sanction order (speaking about himself, as he always does on his blog, in the third person). In an amusing twist, Stoller illustrates his argument that the TTAB’s ruling is unconstitutional with this graphic:

Perceptive readers may have noticed that, rather than being a general illustration about unconsitutionality, this image is the logo of the documentary Unconstitutional, which was made, according to its director Robert Greenwald, “to show Americans the extent to which our civil liberties and our freedoms have been trampled upon by our government since 9/11.” (Incidentally, I have two words for geek readers, and I implore everyone else not to look it up. “Constitutional Goatse.” I’m just sayin’.) The film’s title constitutes use of an ordinary English word as a trademark — use that, according to Stoller’s arguments, deserves absolute protection from infringement (say, by using the logo to promote one’s own product or service on one’s blog, which could arguably be blurring or, in the case of an association with Stoller, tarnishment).

It’s always good to see an IP bully be cut down to size. I look forward to reading the D.C. Circuit’s opinion in the inevitable appeal.

May 30, 2006

“[I]f Respondent is a cat from outer space, then it may have something to hide, and this is indicative of bad faith behavior.”

Via The Trademark Blog comes a link to this decision in a UDRP dispute over the domain name The domain name was evidently used by one Mr. Woods as an example of how large companies fail to register obvious domain names. To leaven his presentation, Woods points out that the registration is actually in the name of his cat, Meow.

The opinion is, accordingly, captioned Morgan Stanley v. Meow. Seriously.

The panel holds that the element of bad faith is present, and that Morgan Stanley prevails:

Respondent maintains that it is a cat, that is, a well-known carnivorous quadruped which has long been domesticated. However, it is equally well-known that the common cat, whose scientific name is Felis domesticus, cannot speak or read or write. Thus, a common cat could not have submitted the Response (or even have registered the disputed domain name). Therefore, either Respondent is a different species of cat, such as the one that stars in the motion picture “Cat From Outer Space,” or Respondent’s assertion regarding its being a cat is incorrect.

If Respondent is in fact a cat from outer space, then it should have so indicated in its reply, in order to avoid unnecessary perplexity by the Panel. Further, it should have explained why a cat from outer space would allow Mr. Woods to use the disputed domain name. In the absence of such an explanation, the Panel must conclude that, if Respondent is a cat from outer space, then it may have something to hide, and this is indicative of bad faith behavior.

On the other hand, if Respondent’s assertion regarding its being a cat is incorrect, then Respondent has undoubtedly attempted to mislead this Panel and has provided incorrect WHOIS information. . . .

The rub is that Morgan Stanley had to pay $1,300 to resolve this exceedingly silly matter.

April 28, 2006

Trademark Dilution Revision Confusion

The proposed revisions to the trademark dilution provisions found in section 43 of the Lanham Act have caused substantial confusion regarding whether they change the defenses applicable to section 43(a). The Trademark Blog cuts through the thicket.

April 27, 2006

Podcasting Legal Guide

Creative Commons has just released its Podcasting Legal Guide, prepared by Colette Vogele, Mia Garlick, and the Berkman Center Clinical Program in Cyberlaw.

Congratulations to Colette and Mia on the release of the Guide. I had the pleasure of helping with some revisions, and the guide should prove to be a valuable resource for podcasters.

James Grimmelmann on Self-Appropriation

James Grimmelmann very amusingly and thoughtfully explores the issues raised by a French Connection ad that’s awfully similar to a Groovecutters music video.

Disclaimer Haiku:
West wind seems to say,
"This is not legal advice;
I'm not your lawyer."

(And if you're a client with whom I have a preexisting attorney-client relationship, this still isn't legal advice.)

In case you're wondering, this blog is also not intended as advertising, as a representation of anything but my personal opinion, or as an offer of representation.

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