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Copyrights – What’s Next After Google v. Oracle (Update)

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Copyrights – What’s Next After Google v. Oracle (Update)

This course will provide an overview of copyright law following the U.S. Supreme Court’s landmark decisions in Google v. Oracle and Warhol Foundation v. Goldsmith. In this one-hour course, we will discuss what is and is not protectable by copyright, analyze exclusive copyright rights, as well as fair use. This course will provide an in-depth overview of both Google v. Oracle and Warhol Foundation v. Goldsmith, as well as address several cases that have been or may be implicated following these decisions, and then cover issues that remain to be resolved.

Transcript

The Supreme Court decided a big case in the copyright world in 2021, in Google versus Oracle, and now in 2023, they've now decided the case of Andy Warhol Foundation versus Goldsmith. In this presentation, I'm going to provide an overview of copyright law, including what is generally protectable through copyrights, the exclusive rights granted through copyrights and the defense of fair use. Then I'll go over some of the facts of what happened in Google versus Oracle addressed several cases that have been or may be implicated following Google versus Oracle, including Andy Warhol Foundation versus Goldsmith, and then talk about a few issues that remain to be resolved. So what is a copyright? We need to kind of ground ourselves in the in the in the definitions in order to understand some of these cases that we're going to talk about today. So copyright is a type of intellectual property that protects original works of authorship. As soon as the author fixes the work in a tangible form of expression. So works are original when they're independently created by a human author and they have a minimal degree of creativity. A work is fixed when it's captured either by or under the authority of an author in a sufficiently permanent medium such that the work can be perceived, reproduced or communicated for more than a short time. For example, a work is fixed when you write it down or record it. So what's protectable by a copyright? There's a number of different items that that are able to be protected through copyrights, and these have developed over over the course of time through the different copyright acts that have been put into effect. What you see on the slide are the general categories for copyrights that the US Copyright Office provides for when a work is to be registered. As you will see and as will be important in discussing some of the cases today, literary works can include computer programs and source code under certain circumstances. A computer program is defined as a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result. Copyright protection for a computer program extends to all of the copyrightable expression embodied in the program. The copyright law does not protect the functional aspects of a computer program, such as the programs, algorithms, formatting, functions, logic or system design. So again, you see that with literary works. Some of the other things listed here include musical works, and that can be the words as well as the music. Dramatic works, which can also include any accompanying music can be pantomimes or choreographic works. Pictorial graphic and sculptural works. Motion pictures and other audiovisual works. Sound recordings which are works that result from the fixation of a series of musical spoken or other sounds as well as architectural works. So now that we know what can be protected through a copyright, it's important to think about what is not able to be protected through a copyright. And what we have here on this slide are some of those things that are most commonly identified when we think of things that fall outside of copyright protection. So generally, ideas, systems, processes, if it's not been fixed in a tangible form in, for example, as I've listed here, a choreographic work that's not been notated or recorded or an improvisational speech that's not been written down, if it's a title, a short phrase or a slogan, symbols or designs, those are not protected by copyright, but are typically things that we would look at as protectable through trademarks, variations of typographic ornamentation, lettering or coloring, as well as mere listings of ingredients or contents. So when we think about having a copyright or a copyrightable item or work, we have to think about what getting a copyright or having a copyright in that work actually affords you. So the Copyright Act provides that a copyright holder has certain exclusive rights that depend on the type of copyright involved, and this can include with reproducing a work in copies or phonorecords preparing derivative works based on the work, distributing copies or phonorecords of the work to the public through sale or other transfer of ownership. Performing the work publicly such in the case of a literary musical, dramatic or choreographic work, a pantomime or a motion picture or other audiovisual work displaying the work in the case of some musical dramatic, pictorial graphic or sculptural works, and as well as performing it through a digital audio transmission if it's a sound recording. So in the in the Copyright Act of 1976, this is when we first get the defense of fair use and it's in 17 USC section 107. This sets forth the law of the defense of fair use. Fair use is considered to be a limitation on the exclusive rights associated with a copyright. The fair use of a copyrighted work, including such use by reproduction in copies of phonorecords copies or phonorecords, or by any other means specified by the section for purposes such as criticism, comment, news reporting, teaching, including making multiple copies for classroom use, scholarship or research. This is not an infringement of copyright. And so in determining whether a use is a fair use, we look at various factors listed here on this slide that include the purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes. The nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole and the effect of the use upon the potential market for or value of the copyrighted work. So now we're going to look at the Google versus Oracle case and we'll go back to what led up to the Supreme Court decision in 2021. So this case dealt with a Java SE program, which is a popular open source platform for programmers to write programs in Java, which is one of the most used software languages, a feature of the Java SE platform, as well as other programming platforms, is something called an application program interface, generally referred to as an API. And this is pre written code for performing various standard functions that can be invoked by programmers that are creating applications. Using this pre written code saves the programmer substantial time and effort when he or she designs programs in the Java SE platform. This pre written code was referred to as the Sun Java API. The API in turn involves three different categories of code implementing code which executes specific pre-written tasks. Method calls which select this set of implementing code for a certain task and declaring code which specifies the name of each task and the location of each task in the API. This allows the programmers to specify the implementing code that they wish to call on. When Google set out to design its Android operating system for smartphones, it initially wanted to license Java SE from Sun, including the Sun Java API. But these negotiations fell apart and Google ultimately developed its own platform, which would be compatible with legacy Java applications. Google wrote millions of lines of new code underlying the platform. However, Google copied verbatim approximately 11,500 lines of Java SE declaring code for 37 packages that would call upon certain tasks to be executed, even though it wrote the extensive implementing code that would carry out the tasks. They did this so that developers conversant with the Java language could call upon certain tasks in a manner that was familiar to them. So in 2010, Oracle purchased ownership rights to Java and sued Google for patent and copyright infringement, ultimately seeking over $8 billion in copyright damages. Oracle claimed that Google had violated its copyright in the 11,500 lines of declaring code. As for copyright infringement, this was put to a jury, and the jury found that Google had incorporated the declaring code into its Android platform, but they were hung on whether Google's actions constituted fair use. However, the district court judge then ruled as a matter of law that the declaring code was not copyrightable because it was a system or method of operation, something excluded from the copyright protection by statute. On appeal, the federal Circuit reversed and held that the declaring code was copyrightable and remanded it for another trial. On whether Google's use of the declaring code constituted fair use. Back in the district court, Google won again, persuading a new jury that its use of the declaring code qualified as fair use. But the federal Circuit once again reversed on appeal, stating that there's nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform is that it's copyrightable. If it's original within the meaning of Section 102 A. They also found that the merger defense that was advanced lacked merit. And they said Oracle was right, that Google's copying was an unfair and infringing use of the Java API as a matter of law. The Supreme Court granted Google's petition for cert on both the Copyrightability as well as the fair use issues. So at the Supreme Court, they were asked to look at two issues whether the API declaring code was copyrightable and whether the doctrine of fair use applied. The court largely focused on whether Google's use of the declaring code qualified as fair use, and they concluded that it did. The court first considered what standard and appellate court should use in reviewing a fair use determination. The Federal Circuit had concluded that fair use constitutes a mixed question of law and fact, and that although courts should appropriately defer to a jury's findings of underlying facts, the ultimate question of whether those facts establish fair use is a legal question for judges to decide de novo. The Supreme Court agreed and concluded that the ultimate fair use question primarily involves legal work. They then rejected Google's arguments that the court needs to take a differential approach of considering only whether substantial evidence supported the jury's decision that the use of declaring code constituted fair use and that to do otherwise runs afoul of the Seventh Amendment. On the substance of the fair use arguments, the Supreme Court observed that fair use can play an important role in determining the lawful scope of a computer program. Copyright By providing a context based check to distinguish among technologies and keep a copyright monopoly within its lawful bounds. The Supreme Court then engaged in an analysis of those four factors that the Copyright Office or excuse me, the Copyright Act, sets out as non-exclusive considerations and a fair use assessment. The court concluded that each of these factors weighed in favor of a finding of fair use, characterized the declaring code at issue as distinct from other computer programs, because it is inherently bound together with uncopyrightable ideas which were general task, division and organization and new creative expression, which was Android's implementing code. And they found that its value lies in its efforts to encourage programmers to learn and to use that system so that they will use and continue to use sun related implementing programs that Google did not copy. Accordingly, the Supreme Court concluded that the declaring code is, if copyrightable at all, further than our most computer programs, such as the implementing code from the core of copyright, and that finding fair use on the present facts would be unlikely to undermine the general copyright protections that Congress provided for computer programs. As to the purpose and character of the use, the Supreme Court found that even though Google's use of the code was commercial in nature, this was not dispositive. The court gave weight to the fact that Google copied no more than the necessary portions of the Sun Java API to create a new platform, the Android platform, which is consistent with the creative progress that is the basic constitutional objective of copyright itself. Next, with respect to the amount and substantiality of the portion used, the Supreme Court noted that the 11,500 lines that were copied constituted only about 0.0. excuse me, 0.4% of the total code in the Sun Java API. And it gave weight to the fact that the use was tethered to a valid and transformative purpose. Finally, as to the market effects, the court cited to evidence that Sun itself was poorly positioned to succeed in the mobile phone market, in part because Sun had tried and failed already to enter this market. And so they found that the jury reasonably concluded that Google did not harm the actual or potential markets for Java SE, given that the distinct markets for computers were. Sun had succeeded in establishing Java SE and mobile devices where Google had used elements of Java SE were different in doing so. The Supreme Court distinguished between the value derived from new users being attracted to a program because of its expressive qualities and a program that's valuable simply because users are accustomed to it. The value of using the Sun Java API with the Android platform had more to do with the investment of third parties, the programmers in learning and using Sun Java programs. In Sun's investment in creating the Sun Java API. Looking at these factors in combination, most of the court concluded that Google's use of Sun Java API declaring code did qualify as fair use. In its six two majority decision, the Supreme Court declined to answer the threshold question of whether the declaring code was copyrightable. The court assumed for the sake of argument that the entire Sun Java API was copyrightable in this respect. For many, the court's opinion was a disappointment for and this was for those that were awaiting a ruling that was hopefully going to set out the standards for assessing whether particular forms of software would qualify for copyright protection, and particularly those that wanted an answer to the question of whether APIs would be entitled to protection. There was a dissenting opinion in in the Google versus Oracle Oracle case. And this was authored by Justice Thomas, joined by Justice Alito. And they took issue with both the majority's decision to bypass the Copyrightability question and the conclusion that the use of declaring code was fair use. In this dissent, they argued that declaring code is protected by copyright because it's inextricably bound together with implementing code and the two must typically rise and fall together. Justice Thomas further asserted that the majority's decision on fair use makes it difficult to imagine any circumstance in which declaring code will remain protected by copyright, and that the majority's analysis failed to take account of the differences in the Google and Oracle business models, with the latter centered around licensing its intellectual property, as well as the similar ways in which the two companies use Java Code. The majority found these arguments by Justice Thomas unpersuasive, and they took the view that the dissents, all or nothing approach to the copyrightability of computer programs would be inconsistent with the overall design of the Copyright Act and the copyright framework for other subjects. So now turning to some cases that have been decided following Google versus Oracle, Andy Warhol Foundation for the Visual Arts versus Lynn Goldsmith is a case that had been decided prior to Google versus Oracle. But the Second Circuit revisited following Google versus Oracle. This case centers around a 1981 photograph of prints taken by famous music industry photographer Lynn Goldsmith in her studio. In 1984, Goldsmith's agency licensed the photograph to Vanity Fair for use as an artist reference to create a work of art based on the image. However, Goldsmith did not know that Vanity Fair commissioned artist Andy Warhol to use the photograph as a reference to create an image of prints also unknown to Goldsmith, Warhol relied on her photograph to create a series of 15 additional prints, which were then referred to as the print series. In fact, Goldsmith did not learn of the print series until after Prince's death. When Vanity Fair published its tribute magazine in May 2016, which featured the print series Image on the cover. In that publication, Vanity Fair did not give any credit or attribution to Goldsmith. Goldsmith then registered the photograph as an unpublished work. In 2017, the Andy Warhol Foundation for the Visual Arts sometimes referred to on my slides as they filed an action seeking a declaratory judgment that the print series works were non-infringing, or that they made fair use of Goldsmith's photograph, and Goldsmith countersued for infringement at the district court. They granted summary judgment in favor of largely finding that the print series was a fair use of the Goldsmith photograph because it aesthetically transformed the original work. The court found Warhol's work transformed the original image from that of a vulnerable, uncomfortable person to an iconic, larger than life figure. The well known and signature style of Warhol's artwork was generally discussed, and the court noted that each print series work was immediately recognizable as a Warhol rather than as a photograph of prints. So the Second Circuit, this is where Goldsmith appealed and the Second Circuit reversed the district court decision. The Second Circuit held that the district court had too broadly and subjectively analyzed whether Warhol's work was transformative. The court conducted a detailed analysis of fair use and clarified its prior precedence analysis of fair use. They held that while the alteration of a new work with new expression, meaning or message, whether by the use of new aesthetics, by placing a work in a different context or by any other means, is a sine qua non non of transformativeness. The secondary work must be reasonably perceived as embodying a distinct artistic purpose, one that conveys a new meaning or message from its source material. The court recognized that an overly liberal standard of transformativeness such as that employed by the District Court, risks crowding out the statutory protections for derivative works. The exclusive rights that are reserved to the copyright holder. When the Second Circuit viewed the work side by side. They held that the Prince series was not transformative. The court found that the Prince series was plainly an adaptation of the Goldsmith photograph. Warhol's work retained the essential elements of the Goldsmith photograph without adding to or modifying those elements. The only deviations to the original photograph involved magnifying some elements such as contrast and lighting and minimizing others, filed a petition for rehearing, asking the Second Circuit to reconsider its decision after the Supreme Court decided Google versus. Oracle. The Second Circuit withdrew its original opinion to carefully consider the Supreme Court's most recent teaching on fair use, but again reversed the district court's decision largely on the same grounds as its original decision. They rejected his assertion that Google versus Oracle comprehensively refutes the panel's reasoning. The court found that Google versus Oracle is fully consistent with their original opinion, and they identified how the Supreme Court emphasized the unique context of that case, which was software that may make it less applicable in other contexts, especially when the copyrighted materials serves an artistic function. So the case was then appealed up to the US Supreme Court. And on May 18th, 2023, the Supreme Court issued its decision. On the one hand, it said that the Andy Warhol Foundation licensing of a silkscreen image to the magazine chain Conde Nast violated Goldsmith's copyright in her photo of the rock musician Prince. So they did. They did find that. And then they said that a lower court will now get to decide what Goldsmith is owed by the Andy Warhol Foundation. But it turned out that what the majority in this opinion actually had problems with and what the decision was mostly about was the Warhol Foundation's failure to pay Goldsmith a licensing fee. Back in 2016, it looked like the court sidestepped the larger issue of whether Warhol should have used her image at all. On the other hand, the court said that Warhol's initial creation of the silkscreen might have been fair use and thus not copyright infringement. But how can this be? One minute an artwork may be fair use, but the next minute if you license it to a magazine, it's not. But here's the problem. If Warhol's Prince series was transformative, which would mean that, you know, a way to justify a fair use defense, then the works in the Prince series would be fair use and not copyright infringement. And if they're not copyright infringement, then they might be considered to be independent creative works that could be used as the artist sees fit. So they don't stop being fair use and turn into illegal copying just because the creator sells or licenses them for profit, or at least as many think it should not. Some art experts in looking at this decision have said that if it's fair use, it should be fair use to do whatever you want with it and that it feels like censorship to be told that your form of expression is not really yours and that someone else can decide how much you must pay to express himself and whether he can do so at all. So this may be what's at stake in another passage in the decision where the Supreme Court talks about how a modest alteration to someone else's image, like the change that Warhol made to Goldsmith's adding color to her black and white image and cropping, it might not be enough to permit its reuse. But in that case, that seems to go take care of the basic notion behind appropriation art. That appropriation works because it does so little to alter its source. For example, in the case of Warhol's Campbell's Soups or his Brillo boxes, which look so much like the commercial goods, You're taking this thing, you're not changing it. But that's what the law has a hard time wrapping its head around. There was a fierce dissent in this case by Justice Kagan, and she seemed to agree with what what some of the art experts have said, chiding that the majority might just have to go back to school to learn the basics of art history. She was joined by Chief Justice Roberts, and they claimed that in the majority's ruling, all of Warhol's artistry and social commentary is negated by one thing. Warhol licensed his portrait to a magazine, and Goldsmith sometimes licensed her photos to magazines, too. That is the sum and substance of the majority opinion, at least according to the dissent. Justice Kagan argued that the majority applied a commercialism trumps creativity analysis and that they don't care that even if they looked rather the same, any works that two artists might offer up for licensing would have been completely different kinds of art. A photographic portrait versus a silkscreen piece of appropriation art. And therefore, if the two works are fundamentally unalike, the appropriation shouldn't have to pay just to exist alongside its source. And she noted in the opinion that creative progress unfolds through use and reuse, framing and reframing. One work builds upon what has gone before and later works. Build on that one and so on through time. She also says, in declining to acknowledge the importance of transformative copying, the court today and for the first time turns its back on how creativity works. So, you know, clearly she thinks that this was a wrongly decided decided case. But but in narrowing its decision to the licensing issue, it seems that the majority clearly believes it's left room for creatives to do what they do. But some of the creatives that have spoken out on this seem to be less convinced, including Virginia Rutledge, who's a curator turned lawyer who co-authored a brief in a famous copyright case involving appropriation art by Richard Prince. So they might begin to to slide down the fear hill of seeking licenses for every appropriation they have in mind and not creating anything that they can't license. So there is some concern that this is a now you see it now you don't approach to fair use. That's going to make things uncertain in the world of art, where appropriation and transformation are common practices. And there is some concern that artists, dealers, curators, collectors and others in the art world have to make a case by case guess as to whether a creative work that started out as fair use may lose that defense under copyright law, depending on how it is shown, sold or marketed. And if licensing a work like the Warhol silkscreen image is copyright infringement, it may not just be a question of paying the original photographer a share of the licensing fee. Goldsmith is now entitled as a copyright owner, perhaps to refuse permission to license Warhol's Prince images at all, and this would remove them from the marketplace. So this this could be a potentially dire income outcome for the art world and not just not just the Warhol Foundation. So it's going to be very interesting to see what comes out of this case and whether this is something that is, you know, is narrowly considered to be narrowly decided on its facts or if it's something that has has these broader implications for the art world going forward. It's kind of going back to computers. We have another case that in some some circles has been described as one of the next big cases following Google versus Oracle in the in the computer world. And it's SAS Institute versus World Programming Limited. This case was decided before the Federal Circuit on April 6th, 2023. And while in Google versus Oracle, the Supreme Court sidestepped the copyright ability issue in SAS versus WIPO, the copyright ability issue was front and center. So going back to the district Court, SAS sued for copyright infringement of its SAS system that enables various tasks in data management and analysis. Sas did not accuse of copying lines of code, but they said that WIPO copied the functionality and use of the coding language. Sas, accused of designing its software to execute the same input procedure for used in the SAS system and to produce equivalent outcomes. The District Court dismissed the copyright infringement claims as a matter of law just before the jury trial and after they held this what's been considered to be a unique thing they called a copyrightability hearing. And in that they found that the SAS system software was not entitled to copyright protection. The District Court concluded that after filtering out elements that were in the public domain, factual and data elements, mathematical and statistical elements, process system and method elements and other well known and conventional display elements including tables, graphs, fonts, plots, colors and lines. There were no core creative expressions left to protect. So then SAS appeal focused on the district court's filtration of its software. So the primary arguments on appeal dealt with one copyrightability They said that the SAS material should be deemed copyrightable as a matter of law because of the plethora of creative choices. And even if the individual elements in formatting and design were unprotectable, the overall selection and arrangement should be protectable. Second, they they argued about or raised an issue about the filtration analysis procedure and said that it's the defendant's burden to show what aspects of a copyrighted work are not protectable. And the district court flipped that around by requiring the plaintiff to show what is protectable. They also challenged an aspect of the filtration analysis procedure, saying related to it, calling it a copyrightability hearing. And this is normally an issue for the for the juror or a jury to decide. Although the copyright holder did not raise a Seventh Amendment challenge. And then finally, there was a challenge as to when this filtration analysis procedure because the district court excluded SAS fact and expert witnesses allegedly in an improper manner. So as I said, the federal Circuit decided this case on April 6th, 2023, and they affirmed the district court's ruling first regarding SAS's claim to entitlement to copyright protection. Judge Reyna concluded that the District Court applied an established analytic framework in applying the abstraction filtration comparison test. He agreed with the District Court that SAS established a required threshold of Protectability and that in response w-p established at least a portion of the allegedly infringed elements of the SAS system are not protected by copyright. Judge Reyna then explained that SAS failed to rebut Wpl's assertion and did not otherwise provide evidence in relation to the filtration step under a three part test. He also noted that SAS did not show that its program was eligible for protection at any level of abstraction. Next, Judge Reyna rejected the argument that the copyright ability hearing was inconsistent with the rules, specifically federal rules of civil procedure 52 and 56. He explained that the hearing took the form of a pretrial conference, which is a procedure well supported by the federal rules of civil procedure and within the district court's discretion to manage pretrial matters under circuit case law. Further in this hearing, Judge Reyna indicated that the district court correctly found that a jury would not be able to conduct a proper infringement analysis because SAS had prevailed, had failed to provide evidence on which which of the challenged elements of the SAS system were copyrightable. Finally, Judge Reyna addressed the third issue regarding the exclusion of expert testimony. He explained that expert reports that are unreliable are unhelpful to the jury can be excluded under federal rule of evidence. 702 A. He discussed how the District Court insisted that SAS identify its infringement theory with specificity and how nevertheless SAS expert either refused or was unable to assist the court in clarifying the theory with specificity. Therefore, there was no abuse of discretion that the expert opinion amounted to no more than theoretical speculation. So in conclusion, the majority of the Federal Circuit held that the District Court correctly determined, as a matter of law that SAS failed to establish the elements were copyrightable expressions. Accordingly, the district court's judgment was affirmed. Judge Newman dissented from the court's ruling. She noted that SAS had several registered copyrights, and she indicated that the court's holding that these software programs are not copyrightable is a far reaching change. Her dissent explored in detail why she believed that the district court and majority's ruling contravenes the Copyright Act and departs from long established precedent and practice of copyrightability of computer programs. And she summed up her view in this way. The panel majority does not discuss the selection combination and arrangement of the program elements, although this is a foundation of software software copyrightability as illustrated in precedent, policy and public understanding. Nor does the panel majority resolve the issues raised with respect to the burden of proof. The legal and policy premises of copyrightability of computer programs have heretofore been settled. There is no cause for judicial initiative to disrupt this important area of commercial and societal interest. So clearly she is very. Against the majority's decision and it'll be interesting to see what. Cases may follow in the in the copyright and software context that may. Perhaps further clarify, you know, the Federal Circuit's position on these types of matters. So now let's look at a couple of other cases that have come up after Google versus Oracle in some of the federal district as well as appeals courts. The first case we'll look at is Brittney Goebel, photography versus Sinclair Broadcasting. And this was a case in the District of Maryland from 2021. And in this case, Johnny Goebel was a veterinarian and his wife, Brittany Goebel, he was a photographer were some of the first people to successfully breed a lykoi cat. The Lykoi breed is a relatively new breed of cat with a distinctive werewolf like appearance. As the gobbles began selling these cats, Mrs. Gobble would photograph them in order to advertise and promote the breed. In October 2015, she received copyright protection for various groups of photographs she'd taken of the Cats and the World Entertainment News Network, or Win reached out asking for some pictures to accompany the text of a story they were putting together on the Cats. The gobbles responded and they provided a link to an album of many high res images that she gave permission to be used. But she noted that she did not give permission for the images to be distributed or used in an article or other media that was purposefully derogatory towards the breed. And she also requested that the images be credited to Brittney Gobble. And she said she also wanted them to state that the gobbles were breeding for help. The breed is a natural occurrence and the feral domestic cat population, the first, were born and born in Vonore, Tennessee, or Sweetwater, Tennessee is the towns are close. And she also wanted them to say that we love the public's positive response to the new breed. The photos were provided to the paying subscribers, including Sinclair Broadcasting. An article was published crediting the photos to win. Eventually, the Gobbles wrote to Sinclair, asking them to stop infringing and a lawsuit was later filed. The defendants argued the fair use of the copyrighted photographs and they referenced the Google versus Oracle case and said that fair use depends on context. So so the factors were analyzed for fair use. And in this case, the defendants reproduced photographs without making any change to them and for a commercial purpose. And so this was something that weighed against fair use. They also looked at thick copyright protection for photographs and said Ms.. Gobble clearly made creative choices when taking the photographs. The cats were often posed dressed up with jewelry and clothing, photographed at different angles and appear in settings curated with props, backgrounds and lighting. So these choices demonstrate that they were entitled to what many refer to as thick copyright protection. There was a factual dispute as to the effect of use on the potential market. The plaintiff had to prove either actual commercial market harm or that the widespread availability of the photographs would suppress a demand for the photographs that would have existed absent that availability. So that led to the denial of the summary judgment motion. And nothing, nothing further has happened on that case. So then there was the case in the ninth Circuit from 2021, which is CDK Global versus Brnovich. This evaluated the potential conflict between dealer law and copyright laws when it comes to APIs, which we were talking about before with respect to Google versus Oracle. In this case, you know, if you're not familiar, dealer law prohibits dealer management system or DMS providers from taking any action by contract technical means or otherwise to prohibit or limit a dealer's ability to protect store, share, copy or use data that the dealer stored in its DMS. The dealer law requires dealer management system providers to adopt and make available a standardized framework for the exchange integration and sharing of data with authorized integrators. The law specifies that the framework has to comply with industry security standards and should be implemented using an open application programming interface or API. Unless an API is not the reasonable commercial or technical standard. So CDK argued that the dealer law freed the dealers, authorized integrators to copy its API declaring code. In Cttc's view, the integrators were analogous to Google. The court found that authorized integrators are analogous not to Google but to the individual programmers in Google who use the Java API. Authorized integrators need not copy any of the APIs declaring and implementing code. They have no need to do so. Unlike Google, authorized integrators are not attempting to replicate DMS providers APIs to create their own complementary platforms. All that an authorized integrator needs is to write an API request. Cdk cannot show that the use of its API would necessarily infringe any copyright it might hold. Also, the dealer law did not require or permit copying of any copyrighted data compilations, so dealers and authorized integrators would not infringe a DMS provider's copyright by making copies of the raw data in the DMS databases or even by copying subsets of the data arranged in particular ways by the provider to infringe a copyright, they would have to copy substantially all of a database that the provider has structured in some creative way. The court found that CDK had not shown that such an application of the dealer law is likely, let let alone inevitable. And in the context of a facial challenge, that failure of proof was fatal to its preemption claim. So now we'll look at a case in Florida. And this is from the Southern District of Florida in 2021. And it's the copy life software case. Copy Life Software versus Rothstein. And in this case, the parties are competitors and the business of generating life insurance quotes on the Internet. The defendants asserted that Copy Life's 2010 HTML source code was not copyright protectable because the variable terms needed to calculate life insurance premiums, including sex, amount, health, age and location are generally standard for the life insurance industry and copy life's use of common names for these variables are elements taken from the public domain. Copy Life argued that all the code was protectable and the court agreed that the defendant succeeded in proving that the majority of the programs copied elements are protectable. So why was the computer program not protectable, though? Complex closed menu of limited options from which the end user must select to enable complex program to produce a life insurance quote was deemed to fall within the merger doctrine when the expression is so intrinsic to the communication of a procedure or process. Courts will find that the two have merged and this is typically something that occurs when there's only a limited number of ways to present an idea. And the defendants established that the source code copied for the Organization of the States from a pre-existing library that was inherited that renders that portion unoriginal and thus unprotectable. They did find that portions of copyrighted code that defendants copied are limited to 27 lines, So the copying was insignificant and this lacked quantitative as well as qualitative significance. They also noted that copy life failed to identify distinctive features or elements of its code that make the program especially creative or desirable. So copyright infringement was not found because the plaintiff failed to meet its burden. Now we'll look at a case that was was related to the DMCA or the Digital Millennium Copyright Act. And this was a subpoena to Twitter that was decided by the Northern District of California in 2021. In this case, Bayside Advisory LLC, issued a takedown notice under the DMCA to Twitter, and they requested that six photos be removed. And these were photos that were posted on Twitter by a user at Call Me Money Bags. Bayside subsequently served Twitter with a subpoena for information trying to identify the user of that account. Twitter moved to quash the subpoena. While Bayside moved to compel Twitter to comply with the subpoena, the court subsequently ordered to Twitter to serve all the briefs on the email address associated with the Twitter account and granted permission to the account user to especially appear to submit information regarding the fair use of the photos. So when a party is seeking to discover the identity of an anonymous speaker in connection with the DMCA subpoena, there is an analysis under copyright law and fair use rather than an anonymous speech approach. And in this case, the court found that the speaker failed to meet the test and they were unable to conclude that the user's use of the copyrighted photos constituted fair use because the anonymous speaker did not augment the record in order to meet their burden. In this case, the tweets at issue consisted of statements combined with bayside's photos, along with hashtags that did not convey an obvious meaning. Without evidence regarding the purpose and the meaning of the tweets, they could not say that the use of the photos was transformative or reasonable in relation to the purpose in posting the tweets. So in absence of any evidence from the users about the relevant market or the lack of market harm from the publication of the photos that precluded a finding of fair use. So accordingly, they could not meet the burden of establishing fair use for the purpose of quashing the subpoena. Look at another case related to copyrights. And this is a case from the Central District of California in 2021, National Fire Protection Association versus upvotes. And at issue in this case was whether it was fair use for standards published by. By the plaintiff to be used by the defendant. So the National Fire Protection Association, they published more than 300 standards for installations that include the National Electrical code that's used by tradespeople and professionals in the industry. And they own copyrights and all of the standards that they publish. So Up Codes was a for profit corporation that was founded with the mission to make it easier for industry professionals and lay people to understand how to comply with state and local building codes by putting the building codes on a website for for the public to access for free. So unlike the National Fire Protection Association, their website Up codes website allowed users to download or print the standards that have been incorporated by reference in a jurisdiction for free or to view the standards for free without registering for an account and up codes started uploading the NFPA standards to its website. The court found that up codes reproduced the portions of the code that is law with a transformative purpose. Up codes was a foreign for profit entity. So this weighed against fair use. And this was more significant because the transformative value that they had was low. So they felt that this factor weighed for a finding of fair use for the portions of the code that were incorporated by reference and against defining of use, fair use for the proportions that were not. So the actual text of the laws or the standards is factual, which weighs in favor of a finding of fair use. The NFPA stated that there's no question if anyone could do what up codes is doing, the market for their works would be destroyed. But although the codes on Up Code's website do seem like they would serve as a substitute for NFPA standards, there's not any evidence of any effect on the potential market beyond speculation. So a preliminary injunction was denied because they were not able to show that it was likely that they would prevail on a claim of copyright infringement, particularly in view of this fair use defense. Now have a case, another case from the Central District of California. Warner versus Red-blue Media. And this was a case where the plaintiff was a professional photographer whose work had appeared in various publications and on numerous TV shows. And the plaintiff focuses on photographing dangerous stunts, exotic animals, sideshow eccentricities and people who have overcome incredible obstacles. Every photograph requires many creative decisions about the subject of the photograph, the framing and the background, as well as decisions about the equipment, the shoot's location, the time of day, angle and lighting. The defendant owns and controls the content of two websites and they earn revenue through advertising. And in August of 2018, a member of the plaintiffs staff discovered that several photographs that they had taken appeared in articles on these websites of the defendants without the plaintiff's permission. There was a summary judgment of copyright infringement that was granted. They evaluated the fair use defense and said that defendant's articles added no new expression, meaning or message to the plaintiff's photographs. They minimally had a minimally transformative use, but undisputed commercial use. The defendant admitted that each of the articles copied 100% of the photographs they used, and they noted that the defendant could have covered the strange phenomena discussed in the articles without the photographic illustration. So this unrestricted and widespread conduct of the sort that the defendant engaged in would destroy the market for licensing the plaintiff's work. So now in the in the last bit of this this presentation, we'll look at what's what's next and some of the things related to copyrights and some emerging technologies. So beyond copyright copyrights and computer software and source code, you know, we could have some opinions that come up and we're already seeing some opinions that are implicated by the copyright ability and fair use analysis from the recent Supreme Court decisions, including in the areas of Nfts and the metaverse. So we'll kind of go into that a little bit. So for those that may not be as familiar, you know, the NFT market or Non-fungible tokens is considered to be a, you know, an uncharted territory because anything can be tokenized. It could be, you know, tweets, it can be games, it can be paintings, it can be medical records, you know, anything like that. And in fact, the US Patent and Trademark Office has registered metas and nfts, you know, they are. But, um, but there's some question as to whether the, the laws, particularly the copyright laws from back in the 1970s informed by some, you know, mid 20th century policies are adequate to address some of the challenges of ownership and infringement. So, you know, again, you know, an NFT, you know, is a non-fungible token or a line of lines of alpha numeric script that record a sale of cryptocurrency on a blockchain. So this is, you know, something that, you know, generally describes a sale of the cryptocurrency and it's recorded on the blockchain and which is a digital ledger. So this concept is not necessarily new, but, you know, but we are seeing it with some digital artists that are making sales, you know, of digital files and others are are moving into this this area as we as we speak. So there's there's a lot of, you know, issues about whether there can be, you know, impermanence, you know, fraud and failure that may result in some issues with that. One of the most recent cases was is is related to Hermes and Rothschild. And this was a case that actually there was a permanent injunction entered just recently on June 23rd, 2023. So as background Rothschild was sued over Meta Birkins, which were 100 nfts that were associated with images that depicted the luxury house's prized Birkin handbags covered in colorful fur. And you can see some of the examples here on the slide. Hermes called Rothschild a digital speculator, and the Nfts get rich, Get rich quick scheme that infringed its Birkin trademark and created the false impression that the fashion house endorsed the tokens. So Rothschild said, You know, these works were an absurd statement on luxury goods and immune from the lawsuit based on the protections of the First Amendment. A jury ruled for Hermes and and awarded $133,000 in damages. Hermansen said that Rothschild continued to market his nfts after the jury's verdict, and so he asked the court to force. They asked the court to force him to stop and turn over his remaining tokens and post trial profits. Rothschild told the court that Irma's request went far beyond what is appropriate in a case that involves artistic expression. On February 8th, the jury, as I said, the jury sided with Hermes in its fight and. And they found that there was liability as to trademark infringement and dilution as well as cybersquatting. And he was not shielded by First Amendment protections. And and then in March of 2023, Hermes filed a motion for permanent injunction asking the court to permanently block Rothschild promotion and sale of the nfts because he otherwise he would continue to engage in infringement if he was not stopped. And as I said, on June 23rd, 2023, the court sided with Hermes and denied Rothschild request for judgment of law in favor of in his favor or for a new trial, and granted the permanent injunction on the remedies front. They said that given the likelihood that the continued sale and marketing of the Birkin's nfts will generate confusion as to source among the public. They said that Rothschild and any other persons who are in active concert or participation with him are enjoined from using the Birkin marks or otherwise misleading the public about the source of the metaverse nfts. Also said, in light of the jury's determination that Rothschild was liable for cybersquatting, they ordered Rothschild to transfer the meta birkin.com domain name and related materials back to Hermes. They did decline to order Rothschild to transfer any meta birkin's nfts in his possession, including the smart contract. And then they ordered Rothschild to disgorge any profits he derived from the nfts since the beginning of the trial to the present day, including royalties, transfer income or other financial benefits that he received from resales. So there's a lot of lot of things to unpack here related to nfts and and the potential or lack of potential for a viable, fair use defense. So there is that question. But, you know, but then there was also a question of ownership because these things are so easy to transfer. And and then, you know, what happens to the nfts that were already acquired now that they've been removed from the it was the Opensea platform. And so, you know, when when they were listed or delisted on open opensea, you know, they're still logged on the blockchain. So it's still exists. And and so they, you know, this is this is just one of these trademark and copyright clashes that is likely to continue to play out as the market for nfts in the metaverse come into fruition and the law tries to play catch up. You know, there's there's a lot of lot of different things that we see here. So there's also some other while not mentioned on this slide, I think there's there's some other questions that that are still out there related to what's next, both with copyright copyrights, with software and source code as well as some of these emerging technologies. And and particularly how fair use will, you know, will come into play. You know, for example, there's still a question as to Google versus Oracle whether the case is precedent will be limited just to APIs or only to open source software. You know, we do not yet know, but we do know that there are public policy considerations and kind of the purposes of copyrights that seem to play a significant role in the Supreme Court's decision. So this might provide some guidance for future software copyright litigations. Um, you know, there are some other other questions about, you know, transferable skills and whether whether you can you know, you can or how how easy it is to charge licensing fees for APIs that are developed. You know, are you going to develop your own proprietary APIs rather than pay for licensing? And, you know, can you can you, you know, have that that happen? And, you know, but then also what, you know, is there limitations about what the, you know, what actually constitutes fair use when it comes to, you know, comes to these APIs. So we have a lot a lot of questions, even though we've gotten a lot of gotten a lot of answers over, you know, over the time, you know, since since these decisions have been made, I think there's still a lot to be, you know, to be looked at. And so we'll have to, you know, have to see what, you know, what what courts decide and whether this ends up being something that is, um, you know, an issue that ends up coming back to perhaps the Supreme Court somewhere down the line. But ultimately, you know, the the fair use ruling in Google versus Oracle and then, you know, the recent rulings in in the Andy Warhol case are, you know, are considered to be, you know, kind of telling for their their particular markets in which they they act. So Google versus Oracle it's you know considered to be a victory for software developers and for open Internet. But but because of the decisions in both of these cases. Two sides side sideline some of the maybe more important issues of whether certain things should be copyrighted or truly whether whether the defense defense of fair use, you know, clearly applies. You know, this is still going to lead to some uncertainty that I think we'll see in some future cases that that are making their way through the through the courts, including, you know, some of the ones that we've talked about here today. So I hope that you you've learned a little bit more about some of these recent Supreme Court decisions related to copyrights and what's on the horizons. If you do have any questions or would like further materials on this or any other topics, you can feel free to use the URL below to request or to send me an email. Thanks and have a great day.

Presenter(s)

KDJ
Kirby Drake, JD
Founder
Kirby Drake Law PLLC

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