Month: December 2020

Categories
Copyright

Ninth Circuit Confirms: Fair Use Is an Affirmative Defense to Copyright Infringement

the word "copyright" written on a typewriterThe Ninth Circuit’s recent decision clarifying transformative fair use in Dr. Seuss v. ComicMix gives much to admire (see my deep dive into the opinion here). The court held that a mash-up of plaintiff Seuss’ Oh, the Places You’ll Go! (Go!) with a Star Trek theme—entitled Oh, the Places You’ll Boldly Go (Boldly)—by defendant ComicMix was not fair use since it merely repackaged the original work without new purpose, meaning, message, expression, or character—in other words, it utterly failed to be transformative. That holding should be welcome news for those who are concerned that the rule of the derivative right is being swallowed by the exception of transformativeness.

The Ninth Circuit also addressed another issue of central importance in the fair use doctrine, namely, whether fair use is an affirmative defense such that the burden is on the defendant to demonstrate the absence of likely market harm. That the burden issue even came up is itself remarkable, given the Supreme Court pronouncements and Ninth Circuit precedents on the matter. Nevertheless, this case presented a good vehicle for the Ninth Circuit to confirm that the burden of proving fair use remains with its proponent on each of the factors, including market harm. In this post, I’ll discuss the positions of the parties and the holdings of the courts on this important procedural aspect of fair use.

District Court Holds that Burden Is on Plaintiff to Show Likely Market Harm

One of the issues before the district court was whether Seuss had to show likely market harm under the fourth fair use factor. In its memorandum supporting its summary judgment motion, ComicMix acknowledged that it had the burden of proving fair use: “The proponent of fair use has the burden to show that it applies, because it is an affirmative defense.” However, it argued that, since Boldly is transformative, there is no presumption of market harm, and the “burdens on the fourth factor shift to the plaintiff” to “demonstrate a likelihood of potential harm.” Thus, while acknowledging that it ultimately held the burden of persuasion on market harm, ComicMix argued that Seuss had to produce evidence in order to win on this factor.

The Supreme Court discussed the presumptions and burdens of proof for market harm in Sony and Campbell. In Sony, the Court stated that “every commercial use of copyrighted material is presumptively . . . unfair,” such that, “[i]f the intended use is for commercial gain,” the “likelihood may be presumed” for market harm. And when the use is “for a noncommercial purpose, the likelihood must be demonstrated” with “a showing by a preponderance of the evidence that some meaningful likelihood of future harm exists.” ComicMix latched onto this statement that likely market harm must be demonstrated, despite its use being commercial, to argue that Seuss was required to make a showing on market harm. But that position is inconsistent with what the Court held later in Campbell.

The Supreme Court in Campbell walked things back significantly, explaining that the presumption from Sony only applies in the context of “verbatim copying of the original in its entirety for commercial purposes,” not in “a case involving something beyond mere duplication for commercial purposes.” When “the second use is transformative,” the Court continued, “market substitution is at least less certain, and market harm may not be so readily inferred.” The Court in Campbell thus distinguished verbatim, commercial copies (market harm presumed) and transformative, yet commercial, uses (no such presumption). Importantly, even though there was no presumption of market harm for the transformative use at issue, the Court placed the burden on the defendant to demonstrate an absence of market harm in order to succeed on that factor because “fair use is an affirmative defense.”

This understanding of who has the burden of proof on market harm must be understood in the context of the procedural posture. Fair use is only relevant once the plaintiff has made a prima facie showing of copyright infringement. If both Seuss and ComicMix were to fail in producing evidence on market harm, the factor might be neutral. But that neutrality would only hurt ComicMix—and not Seuss—since ComicMix is trying to overcome Seuss’ prima facie showing of infringement. The Supreme Court in Campbell drove this point home, holding that, in the absence of evidence, “it is impossible to deal with the fourth factor except by recognizing that a silent record on an important factor bearing on fair use disentitled the proponent of the defense . . . to summary judgment.” That “evidentiary hole,” the Court concluded, would need to “be plugged on remand” for the defendant to prevail.

In its opposition memorandum, Seuss started with the premise that ComicMix had the burden of proof on market harm: “As with all affirmative defenses,” ComicMix “bear[s] the burden of proof.” Suess argued that ComicMix could not carry its burden because it did “not offer a shred of admissible evidence about the relevant markets for Go!, derivatives of the [Seuss] Works, and Boldly.” Thus, both parties agreed that fair use is an affirmative defense, with ComicMix bearing the ultimate burden of persuasion on whether its use was fair. The only difference was whether, and to what extent, either party could or should have to demonstrate evidence of likely market harm or its absence.

Despite arguing in its memorandum that the burden of proof was on ComicMix, counsel for Seuss told a different story at the hearing on the motion. The court asked, “What burden, if any, does [Seuss] carry in establishing a likelihood of market harm in this case?” Seuss’ counsel responded that, assuming the use is transformative, there would be no presumption and that Seuss would then have to show market harm. The district court ultimately concluded that Boldly is “highly transformative,” and with Seuss’ concession during oral argument in hand, the court held that Seuss had the burden of introducing “[e]vidence of substantial harm to it . . . by a preponderance of the evidence.” After finding that Seuss “failed to introduce evidence tending to demonstrate that the challenged work will substantially harm the market for its Copyrighted Works,” the court held that the fourth fair use factor was neutral since “the harm to Plaintiff’s market remains speculative.”

Ninth Circuit Holds that Burden Is on Defendant to Show Absence of Market Harm

On appeal to the Ninth Circuit, the parties changed their tune somewhat. In its opening brief, Seuss argued that the district court erred by placing the burden on it to show likely market harm: “fair use is an affirmative defense, and its proponent must show absence of market harm even if the challenged use is transformative.” Moreover, Seuss claimed that since Boldly is nontransformative and commercial, there should be a presumption of market harm. But even if there is no such presumption, Seuss argued that ComicMix had the burden of “offering convincing proof that the plaintiff’s markets will not be harmed by the challenged work.” And, in a footnote, Seuss argued that any concession by its counsel during oral argument before the district court “would not control this Court’s resolution of a purely legal issue: who bears the burden of proof on the fourth factor.”

In its answering brief, ComicMix argued that Seuss’ “failure to present evidence of any negative market effect weighs in favor of fair use.” It contended that there is no presumption of market harm, even though Boldly is commercial, because that presumption does not apply when a work is transformative. As to which party held the burden of proof, ComicMix argued that fair use is not in fact an affirmative defense—a remarkable claim given the holding of Campbell and ComicMix’s contrary position in the district court. To support its argument, ComicMix cited the Ninth Circuit’s decision in Lenz as well as a pair of law review articles to conclude that, “while the proponent of a true affirmative defense generally bears the burden of proof as to all elements, for a standard defense like fair use, it suffices to show that the plaintiff failed to overcome it.”

The citation to Lenz is a puzzling one. The issue there was whether a copyright owner must consider fair use before sending a takedown notice under the Digital Millennium Copyright Act (DMCA). The copyright owner argued that fair use is not “authorized by the law” under the DMCA since it is an affirmative defense excusing conduct that would otherwise infringe. The Ninth Circuit disagreed, finding that this view conflates “an affirmative defense that is labeled as such due to the procedural posture of the case, and an affirmative defense that excuses impermissible conduct.” The court ultimately decided that fair use is “authorized by the law” as a statutory matter, even if it’s an affirmative defense as a procedural one. However, the court said nothing to the contrary about who bears the burden of proof on likely market harm in a context outside of the DMCA—like in overcoming a prima facie case of infringement in litigation over whether a use is fair.

The cites to the law review articles are equally perplexing as they both explicitly acknowledge that the burden of proof rests with the party claiming fair use. The first, Proving Fair Use: Burden of Proof as Burden of Speech by Ned Snow, acknowledges that, “[a]s an affirmative defense, fair use places the burden of proof on its proponent.” The thrust of the article is that, while “the defendant bears the burden of proof” for fair use, it would be better to shift that burden to the copyright owner because of free speech concerns. The second article, Fair Use: An Affirmative Defense? by Lydia Loren, likewise concedes that Campbell “[c]learly . . . placed the burden of producing evidence to support fair use on the defendant.” The article then argues that, as a normative matter, we should put that burden on the copyright owner. Neither of these articles provides any support for the point ComicMix sought to establish, i.e., that the burden of proof is on Seuss.

In assessing the fourth fair use factor, the unanimous Ninth Circuit panel sided with Seuss: “Having found that Boldly was transformative—a conclusion with which we disagree—the district court . . . erred in shifting the burden to Seuss with respect to market harm. That shifting, which is contrary to Campbell and our precedent, led to a skewed analysis of the fourth factor.” The court declined to hold that ComicMix’s nontransformative, commercial use raised a presumption of market harm, though it did recognize that market harm could be inferred from the circumstances. The court made quick work of ComicMix’s argument that fair use is not an affirmative defense and that the burden is on Seuss to show likely market harm: “Not much about the fair use doctrine lends itself to absolute statements, but the Supreme Court and our circuit have unequivocally placed the burden of proof on the proponent of the affirmative defense of fair use.” ComicMix’s argument went nowhere because “Campbell squarely forecloses” it.

To ComicMix’s argument that Lenz compels placing the burden of proving market harm on Seuss, the Ninth Circuit pointed out that Lenz “involved fair use in a different corner of the copyright law,” namely, the safe harbors under the DMCA. The question there was of statutory interpretation under the DMCA, and the analysis was explicitly limited to “that context.” Lenz changed nothing about the procedural burdens in other contexts: “In no way did we deviate from our characterization of fair use as an affirmative defense under § 107. To the contrary, in addition to clarifying that, unlike copyright misuse and laches, fair use is not an excuse to copyright infringement, we reiterated that ‘the burden of proving fair use is always on the putative infringer.’”

Turning to the merits, the Ninth Circuit held that it was ComicMix, “as the proponent of the affirmative defense of fair use,” that “must bring forward favorable evidence about relevant markets.” Given that ComicMix chose to argue instead that it didn’t have the burden of proof, there was only “scant evidence” to consider. ComicMix’s principal evidence was an expert report, but the court found that the “entire report is premised on Boldly being transformative, which it is not, and on the expert’s misunderstanding about fair use and U.S. copyright law.” But even accepting the report’s “methodology and conclusions,” the court found that it still “fails to account for key fourth-factor considerations,” including the fact that Boldly was “intentionally targeted and aimed to capitalize on the same graduation market as Go!” and that “Boldly would curtail Go!’s potential market for derivative works.” Having found that ComicMix failed to carry its burden, the court held that ComicMix’s fair use defense failed as a matter of law.

Conclusion

In Dr. Seuss v. ComicMix, the Ninth Circuit addressed important aspects of the fair use doctrine—and some novel arguments that flew in the face of settled precedent. Not only did the court rein in various overly broad notions of transformative use urged by ComicMix and its amici that would have further eroded a copyright owner’s exclusive right to make derivative works, but it also confirmed the fundamental holding of Campbell that fair use is an affirmative defense, with the burden of proof to show an absence of market harm falling squarely on the party claiming fair use. ComicMix attempted to sidestep its duty by claiming that there was none; it wanted the benefit of fair use without its burden. Thankfully, the Ninth Circuit emphatically rejected this approach as one that would “‘create incentives to pirate intellectual property’ and disincentivize the creation of illustrated books,” contrary to copyright’s constitutional goals.

Categories
Copyright

Ninth Circuit Clarifies Transformative Fair Use in Dr. Seuss v. ComicMix

a gavel lying on a desk in front of booksThis past Friday, the Ninth Circuit handed down its opinion in Dr. Seuss v. ComicMix, a closely watched transformative fair use case. The decision marks an important milestone in the development of the fair use doctrine, especially as applied to mash-ups—where two or more preexisting works are blended together to create a new work. However, the court’s careful explanation of what constitutes transformativeness is not limited to mash-ups, and it will surely be influential for years to come. In this post, I’ll look at the various views expressed by the parties, amici, and courts as to what it means for a use to be transformative, and I’ll explain how the Ninth Circuit’s new guidance on transformativeness reins in some of the overly broad positions that have been urged. This decision should be welcome news for those who worry that a copyright owner’s right to make derivative works has been excessively narrowed by ever-expanding notions of transformative use.

In Dr. Seuss v. ComicMix, the plaintiff, Dr. Seuss Enterprises L.P. (Seuss), was the assignee of the copyrights to the works by Theodor S. Geisel, the late author who wrote under the pseudonym “Dr. Seuss.” Seuss sued the defendants, ComicMix LLC and three individuals (collectively, ComicMix), for copyright infringement over, inter alia, ComicMix’s mash-up of Seuss’ iconic Oh, the Places You’ll Go! (Go!) with a Star Trek theme, entitled Oh, the Places You’ll Boldly Go! (Boldly). The Boldly mash-up featured slavish copies of the images and overall look and feel of Go!, but with the Seussian characters replaced with the crew of the Enterprise from Star Trek and the text and imagery reinterpreted for Trekkies.

ComicMix admitted that it copied Go! to create Boldly, and the issue on appeal was whether its use was fair. The district court held that it was fair use, finding in particular that ComicMix’s mash-up was “highly transformative.” After the decision was appealed to the Ninth Circuit, there were amicus briefs filed for both sides. Some argued that Boldly was transformative, and others argued that it was not. In the opinion for the unanimous Ninth Circuit panel by Judge McKeown, the court held that Boldly wasn’t transformative at all. This decision gives us what is perhaps the clearest explanation of what it means to be a transformative use to date by an appellate court. And the fact that it comes from the Ninth Circuit—the “Hollywood Circuit” as Judge Kozinski once called it—makes it all the more interesting and important.

The issue of transformativeness is primarily analyzed under the first fair use factor, i.e., the purpose and character of the use, but it also weighs heavily on the other three factors. If the use is transformative, courts often ignore the creativeness of the original work, give the copyist more leeway when assessing the amount and substantiality of the use, and overlook the copyist’s effect on the potential market for the original work. As some have observed, in a transformative use case, the fair use analysis tends to collapse into a single factor: Is the use transformative? Indeed, Jiarui Liu published a study last year showing that “transformative use appears to be nearly sufficient for a finding of fair use.” Once the dispositive decisions included in the study found transformative use, they eventually held that there was fair use 94% of the time.

District Court Finds Boldly Is “Highly Transformative”

In the district court, the parties filed cross-motions for summary judgment, with ComicMix claiming fair use. The court had assessed fair use earlier in the litigation when denying ComicMix’s motion to dismiss. There, the court rejected ComicMix’s contention that Boldly was a parody, reasoning that it did not comment on or criticize the original work. Parodies juxtapose the original work for comedic effect, and the necessity of referencing the original justifies the copying. However, the court found that there was no such juxtaposition here, instead noting that Boldly merely used the “illustration style and story format as a means of conveying particular adventures and tropes from the Star Trek canon.” Nevertheless, the court found that Boldly was “no doubt transformative” since it “combine[d] into a completely unique work the two disparate worlds of Dr. Seuss and Star Trek.” Even though many elements were copied, the court reasoned that Go! had been “repurposed” because ComicMix added “original writing and illustrations” that transformed its Seussian pages into “Star-Trek-centric ones.”

The district court ultimately denied the motion to dismiss as it had to take Seuss’ allegations of market harm in the complaint as true and there was no evidence to the contrary in the record. Lacking evidence of market harm, the court found a “near-perfect balancing of the factors” and held that ComicMix’s “fair use defense currently fails as a matter of law.” However, once the court turned to the summary judgment motions, it had a developed record from which to work. On market harm, the court placed the burden on Seuss—despite fair use being an affirmative defense—and found that it failed to demonstrate likely harm to Go! or its licensed derivatives. On the issue of transformativeness, the court adopted and then expanded on its reasoning when addressing the motion to dismiss.

Suess had asked the district court to reassess its fair use analysis given the intervening Federal Circuit decision in Oracle v. Google. In that case, it was not fair use when Google copied computer code verbatim and then added its own code. The court here distinguished Oracle, reasoning that ComicMix did not copy the text or illustrations of Go! verbatim. While ComicMix “certainly borrowed from Go!—at times liberally—the elements borrowed were always adapted or transformed,” and that made Boldly “highly transformative.” Furthermore, the court found that Go! and Boldly served different purposes, with the former aimed at graduates and the latter tailored towards Trekkies. And to Seuss’ argument that Boldly was a derivative work, the court responded that derivative works can be transformative and constitute fair use.

Strangely, when addressing the motion to dismiss and the summary judgment motions, the district court failed to cite the holding of Dr. Seuss v. Penguin Books—even though that binding precedent involved the same plaintiff making similar arguments about a similar mash-up (there, Dr. Seuss and the O.J. Simpson murder trial). In Penguin Books, the Ninth Circuit held that the accused mash-up, The Cat NOT in the Hat! A Parody by Dr. Juice, was neither parody nor fair use. Rather than ridiculing the Seussian style itself, the court held that it merely copied that style “to get attention” or perhaps “to avoid the drudgery in working up something fresh”—as the Supreme Court put it in Campbell v. Acuff-Rose. Indeed, because the mash-up failed to conjure up the substance of the original work by focusing readers instead to the O.J. Simpson murder trial, the court held that there was “no effort to create a transformative work with ‘new expression, meaning, or message’” as required by Campbell.

Amicus Briefs Offer Differing Views on Transformativeness

Once the case was appealed to the Ninth Circuit, amicus briefs were filed on both sides addressing the transformativeness issue. Some argued that Boldly epitomized transformative fair use, and others argued that it was the antithesis. It is difficult to exaggerate the doctrinal gulf between the views of these amici.

The Motion Picture Association (MPA) amicus brief, by Jacqueline Charlesworth, argued that ComicMix’s use was not transformative since it failed to comment on or add new meaning to Go! and instead merely used it as a vehicle to achieve the same purpose—entertaining and inspiring readers. Moreover, ComicMix admitted that it could have used a different book on which to base its mash-up, thus defeating any claim of necessity. The MPA brief explained that Boldly was indeed a derivative work (the district court had expressively reserved the point) as defined by the Copyright Act since it transformed or adapted a preexisting work. The district court had dismissed Suess’ argument that Boldly was a derivative work by pointing out that it transformed and adapted Go!, but the MPA brief called this “troubling logic” since it conflated derivativeness with transformativeness and presumably would make every derivative work a transformative fair use.

Peter Menell filed an amicus brief, joined by Shyam Balganesh and David Nimmer, taking issue with the district court’s “categorical determination” that mash-ups generally are “highly transformative” as it would “undermine[] the Copyright Act’s right to prepare derivative works.” The Menell brief argued that Boldly “might well strike a lay observer as clever, engaging, and even transformative in a common parlance sense of the term,” but this misunderstands the transformativeness inquiry, which turns on whether it “serves a different privileged purpose” such that it survives the “justificatory gauntlet.” The question was whether Boldly “merely supersede[d] the objects of the original” or instead used the copied material “in a different manner or for a different purpose.” Here, the Menell brief concluded, Boldly drew on Go!’s popularity to follow its same general entertaining purpose while adding little “new insight and understanding.”

Sesame Workshop filed an amicus brief by Dean Marks distinguishing transformativeness for derivative works from transformative use under the first fair use factor and arguing that the district court conflated the two. The Sesame brief explained that Boldly was only transformative in the fair use sense if it, per Campbell, added “something new, with a further purpose or different character” as “commentary” and provided “social benefit, by shedding light on an earlier work.” While Boldly did add new material, it did not add “any new meaning or message” or “provide any new insight or commentary on Go!.” It instead delivered “the exact same inspirational message” to appeal to Seuss’ “existing market.” The danger of the district court’s logic, the Sesame brief concluded, is that it “could stand for the proposition that all mash-ups constitute fair use, a holding that would greatly diminish the derivative work right.”

An amicus brief by Erik Stallman on behalf of a group of IP professors, including Mark Lemley, Jessica Litman, Lydia Loren, Pam Samuelson, and Rebecca Tushnet, took a broad view of transformative fair use, arguing that the district court properly did not require Boldly to criticize, comment on, or parody Go! itself. It also claimed that fair use is not an affirmative defense such that the district court properly put the burden on Seuss to show market harm. The crux of the IP professor brief was that, even though on a high level of abstraction both works had the same entertainment purpose, there were nonetheless “differences in expressive meaning or message” that made Boldly transformative. As there were such differences at a lower level of abstraction—e.g., Go! had a “hyper-individualistic character” while Boldly focused on “institutional structures that promote discovery through” combined “efforts”—the IP professor brief concluded that it was transformative in the fair use sense.

Finally, an amicus brief by Mason Kortz on behalf of the Electronic Frontier Foundation (EFF), Organization for Transformative Works, Public Knowledge, and others concluded that “Boldly is a significantly transformative work” that “recasts, recontextualizes, and adds new expression or meaning to Go! in order to create a new, significant work of creative expression.” The EFF brief argued that uses can be transformative even if “they fail to comment on or parody the original” so long as they have different “expressive content and message.” Here, Boldly was transformative because it “adapt[ed] the stylistic, visual, and rhyming elements from Go! to create new expression” and added “new meanings that speak with particularity to the themes of Star Trek beloved by its community of fans.”

Ninth Circuit Holds that Boldly Is Not Transformative

Turning back to the parties, Seuss argued on appeal that ComicMix’s “use was exploitative and intended to grab the attention of potential buyers, not transformative,” since it added no “new purpose or meaning.” ComicMix answered that its use was “highly transformative,” with a “radically distinct purpose and effect,” that crafted “new meanings from the interplay between Star Trek’s and Seuss’s creative worlds.” Judge McKeown, writing for the unanimous Ninth Circuit panel, sided completely with Seuss: While the “fair use analysis can be elusive,” if not metaphysical, “[n]ot so with this case.” The court held that “Boldly is not transformative” and that all of the fair use “factors decisively weigh against ComicMix.”

Quoting Campbell, the court started with the premise that a transformative work “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message,” and a work that “merely supersedes the objects of the original creation” is not transformative. It also noted Campbell’s explanation that commentary with “no critical bearing on the substance or style of the original” and which is used “to get attention or to avoid the drudgery in working up something fresh” has less—if any—claim to fair use. The court then cited to its previous holding in Dr. Seuss v. Penguin Books (mentioned above as having been ignored by the district court below despite the glaring similarities) that the mash-up at issue there merely copied the Seussian style without critiquing it. The court there held that the defendant was only trying “to get attention,” and the court here found that the same result holds true. ComicMix’s “post-hoc characterization” that it was “criticizing the theme of banal narcissism of Go!” or “mocking the purported self-importance of its characters falls flat.”

The court then turned to ComicMix’s argument that, even if Boldly was not a parody or a critique, it was nonetheless transformative since it substituted Seussian characters and elements with Star Trek themes. The court rejected this framing as foreclosed by Penguin Books, noting that it “leverage[s] Dr. Seuss’s characters without having a new purpose or giving Dr. Seuss’s works new meaning.” And without “new expression, meaning or message” that alters Go!, ComicMix merely added “Star Trek material on top of what it meticulously copied” and failed to engage in transformative use. Helpfully, the court laid out three “benchmarks of transformative use,” which it gleaned from Campbell and Ninth Circuit precedent, to explain why Boldly was not transformative: “Boldly possesses none of these qualities; it merely repackaged Go!.”

First, the “telltale signs of transformative use” include a “‘further purpose or different character’ in the defendant’s work, i.e., ‘the creation of new information, new aesthetic, new insights and understanding.’” The court found that Boldly had neither a further purpose nor a different character since it paralleled the purpose of Go! and propounded its same message. Without a “new purpose or character” that would make it transformative, the court found that Boldly “merely recontextualized the original expression by ‘plucking the most visually arresting excerpt[s].”

The second of the “telltale signs” looks for “‘new expression, meaning, or message’ in the original work, i.e., the addition of ‘value to the original.’” The court found that ComicMix likewise failed to do this: “While Boldly may have altered Star Trek by sending Captain Kirk and his crew to a strange new world, that world, the world of Go!, remains intact.” The court’s focus was on whether Boldly changed Go! itself or merely repackaged it into a new format. Here, “Boldly does not change Go!,” and ComicMix’s admission that it could have used another work as the basis of its mash-up indicated that “Go! was selected ‘to get attention or to avoid the drudgery in working up something fresh,’ and not for a transformative purpose.”

The last of the “telltale signs” considers “the use of quoted matter as ‘raw material,’ instead of repackaging it and ‘merely supersed[ing] the objects of the original creation.’” The court, embedding several side-by-side images into the opinion to demonstrate the point, found that Boldly merely repackaged Go!. For the illustrations, the “Star Trek characters step into the shoes of Seussian characters in a Seussian world that is otherwise unchanged.” And for the text, rather than “using the Go! story as a starting point for a different artistic or aesthetic expression,” ComicMix instead matched its structure in a way that “did not result in the Go! story taking on a new expression, meaning, or message.” Since Boldly “left the inherent character of the [book] unchanged, it was not a transformative use of Go!.”

The court concluded that, “[a]lthough ComicMix’s work need not boldly go where no one has gone before, its repackaging, copying, and lack of critique of Seuss, coupled with its commercial use of Go!, does not result in a transformative use.” The first fair use factor thus “weigh[ed] definitively against fair use,” and the court went on to find that the other three factors favored Suess as well—without transformativeness to drive the analysis, ComicMix could not get the court to put its thumb on the scale in favor of fair use. Importantly, the court also rejected the holding below that the burden of proving likely market harm rested on Seuss: “the Supreme Court and our circuit have unequivocally placed the burden of proof on the proponent of the affirmative defense of fair use.” Additionally, the court chastised ComicMix for failing to address the “crucial right” of “the derivative works market,” noting that Boldly would likely “curtail Go!’s potential market for derivative works,” especially given that Seuss had “engaged extensively for decades” in this area.

Conclusion

All-in-all, the Ninth Circuit’s decision is a welcome development to the doctrine of fair use. Since Campbell was handed down over one-quarter of a century ago, the notion of transformativeness has taken on a central role—one that appears to be shrinking the exclusive right to prepare derivative works while expanding what it means to be transformative fair use. The accused work at issue here—Boldly—used the original work to create new expression, but lacking was any justification for the taking. ComicMix could have used any number of works for its mash-up, and the same nontransformative repackaging would have occurred because ComicMix’s purpose would not be tied to the particular work onto which it transposed the Star Trek universe. Thankfully, the Ninth Circuit was able to distinguish the transformative nature of a derivative work from the transformativeness that constitutes fair use. And given the prevalence of mash-ups in today’s culture, one suspects that this opinion will be cited and expanded upon for many years.

Categories
Copyright

CPIP Applauds Congress on Passing CASE Act and Protecting Lawful Streaming Act

U.S. Capitol building

As advocates for individual artists and small businesses in the arts, CPIP is grateful this holiday season for the inclusion of the CASE Act and the Protecting Lawful Streaming Act as part of the end-of-year omnibus and COVID-19 relief package: the Consolidated Appropriations Act, 2021. These measures enjoyed overwhelming support and address longstanding challenges in IP enforcement. While there are many additional obstacles for artists and arts venues to overcome stemming from the pandemic, we are hopeful that these measures, which artists have worked many years to achieve, will be a building block to a more equitable future for independent arts businesses.

Categories
C-IP2 News

Happy Holidays from CPIP!

The CPIP Team sends you and yours our best wishes for a happy, safe holiday season and a Happy New Year!

Categories
Patent Law

Professor Daryl Lim Explores the Doctrine of Equivalents and Equitable Triggers

The following post comes from Yumi Oda, an LLM Candidate at Scalia Law and a Research Assistant at CPIP.

files labeled as "patents"By Yumi Oda

The term “claims” may not mean much to many, but it means the world to most patent practitioners. As Judge Giles Rich once observed, “[t]he name of the game is the claim.” Claims are the “metes and bounds” of a patent application, essentially defining what the inventor invented. In this sense, claims have a notice function to demarcate the scope of the claimed invention, which in turn allows subsequent inventors to “design around” the disclosed invention and come up with new inventions. This is exactly the type of incentive the U.S. Constitution envisioned “[t]o promote the Progress of . . . useful Arts.”

The interpretation of claims (i.e., claim construction) often becomes a central issue in patent litigation. Notably, patent protection is not limited to literal infringement, but may extend to “equivalents” of the patented invention. Rooted in equity, the doctrine of equivalents (DOE) asks whether the accused device contains elements “equivalent” to each claimed element of the patented invention. However, since the DOE affords courts flexibility in expanding claims and undermining the notice function of patent claims, practitioners and judges have long struggled with its inherent conflict.

This is the challenge tackled in a recent paper that was published in the Santa Clara High Technology Law Journal entitled Judging Equivalents by Professor Daryl Lim, a Professor of Law at John Marshall Law School. The paper, which comes from CPIP’s Thomas Edison Innovation Fellowship program, provides a contemporaneous, empirical survey of the law and literature on the DOE over the past 150 years in order to help contextualize its nature and evolution and to chart its future.

The Doctrine of Equivalents

Prof. Lim starts by looking at the origins and scope of the DOE. Claims were in fact not required in earlier patent legislation, so infringement at the time focused on the “essence” of the patented device through an inquiry into equivalence. This earlier tradition persisted even after the requirement for claims was established in 1836. However, with the introduction of “peripheral claims” (claims setting forth the exact boundary of the claimed invention) by 1870, the focus shifted to the literal language of the claims, with equivalents invoked only when required by equity.

Due to what Prof. Lim calls “ad hoc and amorphous boundaries,” as well as the fact-intensive inquiry involved, the DOE remains unruly and challenging to administer. Originally, the Supreme Court formally recognized the DOE in 1853, which may have been justified by the Lockean theory of justly rewarding inventors for their labor. However, in 1950, the Supreme Court shifted its focus and justified the DOE as an equitable safeguard for the defendant’s unjust enrichment. Nevertheless, the DOE was met with skepticism from its early days, and the creation of the Federal Circuit in 1982, although meant to resolve circuit splits, only added to the existing confusion. Moreover, when the Supreme Court set out a couple of limitations to the doctrine in 1997, questions regarding the applicability of these limitations further deepened the division.

Prof. Lim then moves on to describe the history and development of the doctrine in three words: incoherence, incompetence, and irrelevance.

To begin, “incoherence” refers to the courts’ “perennial struggle for clarity.” The Supreme Court has so far employed two alternative tests—“function-way-result” test and “insubstantial differences” test—without clarifying which test should be chosen. Additionally, the Federal Circuit has also failed to provide guidance regarding an appropriate formula, which in turn has forced lower courts to determine equivalents on an ad hoc basis. Prof. Lim partly attributes this “incoherence” to the inherently ambiguous nature of claim construction, which involves a question of law (what the claims mean to a hypothetical “person of ordinary skill in the art”) and a question of fact (whether the accused device falls within the scope of the claim, literally or under the DOE).

This ambiguity has long raised concern in the courts about the jury’s competence in comparing the construed claims to the accused device, which leads to the next issue of “incompetence.” The jurors’ expected incompetence in the face of the complexity of their given task, combined with their substitution bias generally favoring inventors and the Patent Office and procedural limitations resulting in the unreviewable status of their general verdicts, led to the conventional wisdom that judges, who are often “repeat players” in patent litigation, are better suited for this task. However, Prof. Lim’s data notably shows that the jury’s incompetence may in fact have little factual basis.

Finally, Prof. Lim describes a substantial decline in cases where the DOE applies. This “irrelevance” of the DOE now leads us to the question of what role equitable triggers play in this decline.

Equitable Triggers

Equitable triggers can affect how widely or narrowly courts apply the DOE. Surprisingly enough, most (i.e., over 70%) of the cases examined did not even mention equity in any form, despite the doctrine’s equitable origin, suggesting the equitable nature of the cases did not determine their outcomes.

1. Copying. Copying is permitted as an intermediate step of designing around the patent as long as the defendant can show his or her new device “does more than just narrowly escape the claim.” Overall, copying has not been a prominent type of trigger, but it played a significant role in rivalry. In fact, among different types of equitable triggers, patentees were most favored with copying.2. Design-Arounds and Independent Invention. Design-arounds and independent invention (rivals producing their devices without knowledge or notice of the patented device) are justified by the basis of leapfrogging. Consistent with the copying cases, non-rival defendants were significantly more likely to prevail compared to rival defendants.

3. Pioneer Inventions. In contrast, pioneer inventions are justified because of a wide gap between the claimed invention and the prior art. Prof. Lim concludes that pioneer inventions were extremely rare, and no meaningful conclusion was drawn here, indicating that there is little incentive for patentees to even assert pioneer status.

In addition to these equitable triggers, Prof. Lim carefully draws a distinction between the DOE and means-plus-function (MPF), which is another common deviation from the literal meaning of the claims. MPF under 35 U.S.C. § 112(f) allows the scope of claims to be expanded from their literal meaning to capture similar structures described in the specification, performing the same function as the structure recited in the claim, and known at the time of patent filing. In contrast, the DOE expands beyond what has been described in the specification, and limits equivalence to newer technologies developed after the patent grant.

Limitations

Subsequently, Prof. Lim looks at four court-established bars to the DOE, each penalizing patentees “for sloppy or overly aggressive patent drafting and for strategic behaviors that shift the cost of information . . . from an inventor to the Patent Office and the public.” In practice, these limitations allow judges to absolve defendants from baseless patent infringement claims, as shown by summary judgment being the dominant procedural posture.

1. Prosecution History Estoppel. Prosecution history estoppel (PHE) prevents patentees who made a certain type of narrowing amendment from exploiting the DOE and asserting a contradictory, broadening scope of the claims later. Overall, defendants were on the winning side across the almost entire 10-year period in cases where PHE was employed, confirming the conventional wisdom that patentees generally do worse than defendants.2. “All-Elements” Rule. The “all-elements” rule requires the DOE to be applied to individual limitations of the claim, rather than to the invention as a whole. While patentees generally did worse than defendants in these cases, patentees did significantly better in 2009-2018 compared to earlier years.

3. Prior Art Bar. The prior art bar limits patentees to a scope that avoids prior art. Patentees won by a slight margin here—by far the best among the four limitations to the doctrine—because of the patentees’ expertise to navigate prior art arguments and survive summary judgment motions filed by defendants.

4. Public Dedication Rule. The public dedication rule assumes that, when a patentee discloses but fails to claim subject matter, the unclaimed subject matter is dedicated to the public. This is to prevent patentees from filing broad disclosure, while presenting only narrow claims (to avoid the claims being examined in view of more prior art), and then exploiting the DOE later only to capture the broad disclosure. While this rule continues to play a relatively small role, patentees did better more recently, as with PHE and the “all-elements” rule.

In conclusion, Prof. Lim’s paper offers a contemporaneous, doctrinal, and empirical survey of the doctrine of equivalents. And as the first empirical study on “equitable triggers,” it can fill a significant gap in the literature and help evidence-based decisionmaking in patent law and policy.

Categories
Patents Pharma

IP Scholars Question the Legality and Wisdom of Joint AG Proposal to Seize Remdesivir Patents

The following post comes from Colin Kreutzer, a 2E at Scalia Law and a Research Assistant at CPIP.

dictionary entry for the word "innovate"By Colin Kreutzer

While the vaccines are starting to roll out in the fight against COVID-19, the precise timelines for when they will be widely available continue to be uncertain. But we do have treatments currently available under Emergency Use Authorization authority that have been shown to blunt the impact of the coronavirus and reduce the length of hospital stays. The first one these was Gilead Sciences’ antiviral drug, remdesivir. In July, after an initial period in which Gilead donated its production supply, the company announced a price of $390 per vial, or $2,340 for an estimated 5-day course. While the price is lower than what many analysts were expecting, not everyone was happy about it.

In an August joint letter to HHS Secretary Alex Azar, thirty-four state Attorneys General urged him to do what they contend would resolve a problem of access to the drug: use the “march-in rights” provision of the Bayh-Dole Act to seize Gilead’s patent and license it to generic manufacturers. The response to this proposal from many IP experts can be roughly divided into three main points: (1) it is not legal; (2) it is not effective; and (3) it is dangerously unwise.

What Is Bayh-Dole?

The Bayh-Dole Act of 1980 was a watershed event in the growth of the American pharmaceutical industry. It allowed companies and universities to retain the IP rights to inventions that were developed using government-funded research. The goal was to improve the efficiency with which innovations were brought to market and to encourage investment and collaboration between government, university, and private researchers. Previously, many research developments never saw the light of day due to lack of commercialization, and likely many other inventions were never born in the first place. Bayh-Dole is widely regarded as a success story on both sides of the aisle.

What Are March-In Rights?

Since the aim of the law is to spur innovation and development, the march-in rights provision was included to counteract patent owners who “hold out” or fail to commercialize their inventions. Under very limited circumstances, it allows the government to “march in” and force the owners to license their patent on reasonable terms to a third party. Just how limited are those circumstances? So far, the 40-year-old provision has been used exactly zero times. It stands to reason that valuable products don’t need to be forced into the market, and many modern treatments–for cancer, diabetes and hepatitis­, among others–have been invented and commercialized under Bayh-Dole collaborations without any intervention.

It Is Not Legal

Notably absent from the list of Bayh-Dole creations is remdesivir. The law only applies to inventions that are “conceived or actually reduced to practice in the performance of work under a funding agreement,” i.e., things that were invented with government help. It does not apply to every case in which a drug maker has worked alongside a government agency at one stage or another. The AG letter cites $30 million in NIH-funded work on remdesivir. It claims that this funding exposes the drug to the march-in provision. The letter also makes a general appeal to our sense of fairness—the public paid for this, and so it rightly belongs to all of us.

As noted by Stephen Ezell of the Information Technology and Innovation Foundation (ITIF), the total government expenditure is actually closer to $70 million. That number includes additional work performed with USAMRIID, the U.S. Army Medical Research Institute of Infectious Diseases. Both projects took place in 2014. The Army study was investigating Gilead’s library of antiviral compounds for effective Ebola treatments. Remdesivir’s compound gave positive results, but other treatments proved better. The NIH project was a clinical trial to explore whether remdesivir could be used against coronaviruses as a general class. Again, it showed promise. But the relevant coronaviruses at the time (SARS and MERS) did not spread widely enough to make larger studies feasible. The NIH study might have enabled Gilead to home in so quickly on remdesivir as a COVID-19 treatment, and in that sense, it would have played a crucial role. But that is not the same thing as having a hand in the actual invention of the drug.

Critically, under both studies, the drug had already been invented by Gilead. Regarding the NIH work, a HHS spokeswoman told STAT that the department does not consider the march-in rights to apply. And as pointed out by Scalia Law Professor Adam Mossoff, Army lawyers have stated that their contributions did “not qualify USAMRIID as a joint inventor of the compound.” Even if they were joint inventors, the NIH has stated that “the extraordinary remedy of march-in is not an appropriate means of controlling prices.”

As CPIP Executive Director Sean O’Connor explains at The Hill, even if inventorship could be established, march-in rights would still not be legal in this case: “[m]arch-in rights under Bayh-Dole’s Section 203 only authorize the government to grant new licenses if the original funding recipient fails to take steps to bring the invention to the market (achieve ‘practical application’) or reasonably satisfy health or safety needs.”

And yet, while it pales in comparison to the over $1 billion that Gilead expects to spend this year on remdesivir, $70 million sounds like a lot of tax dollars. CPIP Senior Scholar Kristen Osenga argues that proponents of marching in “mislead the public, specifically regarding remdesivir and, more generally and dangerously, regarding government support of scientific research.” She urges people to understand that government collaborations are a great deal for the public, and among the most efficient ways that the government spends our money: “The Milken Institute estimates that the long-term boost to total economic output could be as high as $3.20 for every dollar the NIH invests in biopharmaceutical research. Even conservative estimates peg the value of the NIH at $1.70 of economic activity per dollar spent. If only all government spending were so productive.”

It Is Not Effective

The preceding section alone answers the question of whether Bayh-Dole is a legal means of seizing Gilead’s property rights. Clearly, though, it does not quiet the sentiment felt by many that something else needs to be done. In addition to the price tag, the AG letter speaks of a “dangerously low supply” of the drug. But the letter supports that claim with a dubious comparison of Gilead’s expected production output to every single confirmed case of COVID-19 in the country. It should be clear on its face that this is not a valid manner of determining how many patients would actually benefit from remdesivir. It would have been more appropriate to say that future demand is uncertain. Because of course, supply is only one half of the equation. Demand can vary greatly depending on whether we cooperate as a society to contain this virus.

Gilead has, in fact, licensed the drug to third parties in order to increase supply. Currently, its own production will remain domestic. But Joseph Allen at IPWatchdog notes that in addition to ramping up its own capacity, Gilead has deals with drug makers in Egypt, India, and Pakistan to provide supplies internationally. Mr. Allen is also is a former congressional staffer who worked on the Act with its namesake, Senator Birch Bayh (D-Ind.). He adds that, because march-in seizure is a hostile measure, it would involve a drawn-out legal battle. This would render the process far too slow to be effective in a pandemic.

It Is Dangerously Unwise

Far from being proof in support of the AGs’ position, Gilead’s work with NIH is a clear example of how damaging it would be to abuse the march-in rights provision. We desperately want these types of collaborations to continue. And if companies believe that doing so would expose them to the seizure of their IP, they will act accordingly.

Our intellectual property system provides the necessary incentives for companies to invest massive amounts of money and bring new lifesaving drugs to the world. We even allow patents for new uses of existing drugs. As CPIP Senior Fellow for Life Sciences Chris Holman points out, the next great cure might be hiding in your medicine cabinet. But without incentivizing the R&D expenditures that bring us these wonderful inventions, we may never realize it.

It is hard to worry about the future when the present appears so bleak, but it is critically important to understand why it is dangerous to weaken the incentives that have given us so many lifesaving developments. Even if exercising march-in rights were legal, and even if it could somehow increase production, it is necessary to consider the long-term implications. Taking away a company’s rights and forcing it to sell at close to the cost of production may help with the current situation, but it will likely decimate future research. Who would want to spend billions of dollars on R&D without the knowledge that they can obtain IP rights that will have a predictable value? We should ensure that companies remain strongly incentivized to research new treatments that benefit us all.

Categories
Patents Pharma

Professor Joanna Shepherd Explains Pharmaceutical Product Hopping in New CPIP Policy Brief

pharmaceuticalsCPIP has published a new policy brief by Joanna M. Shepherd, Vice Dean and Thomas Simmons Professor of Law at Emory University School of Law. The brief, entitled The Legal and Industry Framework of Pharmaceutical Product Hopping and Considerations for Future Legislation, discusses the practice of so-called “product hopping,” where a pharmaceutical company turns its focus to newer versions of its existing drugs. The newer versions, which may include extended-release formulations, different dosages, and the like, can be protected by new patents if they independently meet the patentability requirements, including novelty, nonobviousness, and utility. However, these newer versions may not be covered by a state’s automatic substitution laws since there are no generics yet available. Those laws only apply when generic versions are on the market.

Prof. Shepherd explains that the product hopping phenomenon is incentivized by the legal and industry framework in which pharmaceutical companies operate. Indeed, the current system allows generic drug companies to free ride on the extensive research, development, approval, and marketing costs borne by the branded drug companies, and the latter are thus motivated to create new and innovative drugs that will further benefit consumers. Despite these benefits, some suggest that we need legislative changes to rein in product hopping, and some even argue that the practice itself violates the antitrust laws. Prof. Shepherd looks at the existing case law on the antitrust issue—a total of two cases at the federal appellate level—to find points of agreement, and she uses that synthesis to suggest considerations for future legislative efforts to balance the needs of consumers and producers. Finally, Prof. Shepherd warns that any legislation aimed at product hopping should be cautious so as not to ultimately harm consumers, reduce innovation, and increase health care spending.

The Executive Summary and Conclusion are copied below:

***

Executive Summary

Ensuring that Americans can afford health-improving and life-saving drugs should be a top priority for policymakers. However, efforts to reduce drug prices must be made carefully so as not to jeopardize the innovation that creates those critical drugs in the first place.

Recently, in the name of reducing drug prices, the makers of innovative drugs have become targets of antitrust suits alleging that their business practices constitute anticompetitive behavior. One such practice is sometimes called “product hopping.” This is the act of shifting a customer base from an older drug to a newer one with a longer remaining patent life. A generic drug maker is still free to sell the generic version of the older drug once its patent expires, but product hopping prevents the generic drug maker from benefitting from state laws that automatically substitute generic drugs at the pharmacy counter. Because product hopping makes it more difficult for generics to “free ride” on the manufacturers’ efforts, many have argued that the practice is anticompetitive.

Case law in this area is sparse, and there is a troubling uncertainty in the industry about what practices will, and should, trigger an antitrust violation. Current legislative proposals attempt to limit or prohibit the two basic forms of product hopping: the “hard switch,” in which the older drug is pulled from the market and replaced with its newer counterpart; and the “soft switch,” in which the older drug remains for sale, but all marketing efforts are shifted to the new drug.

The purpose of this policy brief is to address broad and vague language within those proposals that run counter to their stated goals and to advocate for clear and reasonable standards for assessing when a business’s activities should be deemed anticompetitive. As discussed further below, language that is too broad in scope could cover normal business practices that should not fall under antitrust law. Vague language would introduce legal uncertainty into the equation and weigh heavily on drug developers’ investment decisions, leading to fewer innovative treatments and higher levels of overall national health care spending.

This brief contains four parts. First, I will discuss the legal and industry framework that incentivizes product hopping. Second, I will discuss the current state of product-hopping case law as laid out in New York v. Actavis and Mylan Pharmaceuticals v. Warner Chilcott. Third, I will present considerations for future product-hopping legislation. The guiding principles for determining anticompetitive practices should be: (1) whether a hard switch eliminates consumer choice with no offsetting consumer benefit; and (2) whether a soft switch includes conduct that significantly interferes with consumer choice to the point at which it is effectively eliminated, with no offsetting consumer benefit. Fourth, I will discuss the potential consequences of legislation that is written too broadly or vaguely.

***

Conclusion

All parties generally agree upon the importance of maintaining choice in the pharmaceutical market. But we must bear in mind that true choice is promoted not only by a competitive marketplace of sellers but also by the continual introduction of new and better treatments. Any new legislation must strike a balance that allows for a free and open market without stifling innovation in medicine. And any new antitrust law should be focused on preventing anticompetitive behavior from all sides, rather than preserving or reinforcing the regulatory advantages to which generic drug makers have grown accustomed. Above all, the law must be clear and unambiguous, so that those who are responsible for bringing innovative medicines to the world are not hampered by the inefficiencies of regulatory uncertainty.

***

To read the policy brief, please click here.

Categories
Copyright

Professor Shyam Balganesh on Understanding Privative Copyright Claims

The following post comes from Liz Velander, a recent graduate of Scalia Law and a Research Assistant at CPIP.

the word "copyright" typed on a typewriterBy Liz Velander

Some argue that modern copyright law is decidedly market-oriented, almost entirely justified in utilitarian terms. By promising authors a set of marketable exclusive rights in their works, copyright is believed to incentivize the production of works of authorship. In his new paper, Privative Copyright, Professor Shyamkrishna Balganesh of the University of Pennsylvania Law School explains that this view produces a clear mismatch when using copyright law to remedy noneconomic harms. This paper was work-shopped at CPIP’s Philosophical Approaches to Intellectual Property research colloquium in 2019 and subsequently published in the Vanderbilt Law Review.

“Privative” copyright claims are infringement actions brought by authors for the unauthorized public dissemination of works that are private, unpublished, and revelatory of an author’s personal identity. They are driven by considerations of authorial autonomy, dignity, and personality rather than monetary value, seeking to redress a particular form of copyright harm that Prof. Balganesh refers to as “disseminative harm.” An example of a privative copyright claim is found in the recent Ninth Circuit case, Monge v. Maya Magazines.

The plaintiffs in the case were a well-known pop music star and her manager, who got married in secret. To maintain the secrecy of the wedding, the couple limited the number of witnesses and took a very limited number of photographs that were intended for the couple’s private use. Through unscrupulous means, the photographs fell into the hands of an individual who sold them to the defendant, a gossip magazine that published them. The district court found for the defendant, concluding that the publisher’s use of the photographs constituted fair use. On appeal, the Ninth Circuit reversed in a rare denial of fair use for a privative claim.

To gain a full understanding of the Ninth Circuit’s opinion in this case, the nature of privative copyright claims in general, and why courts find them troublesome, Prof. Balganesh believes that one must trace the historic evolution of privative copyright claims in Anglo-American copyright law. Modern copyright scholarship is deeply critical of privative copyright claims, believing that the dignitary interests and harms that underlie such claims are best dealt with through privacy law. Prof. Balganesh’s article challenges this dominant view, arguing that privative copyright claims form a legitimate part of the copyright landscape. He demonstrates that protecting an author’s dignitary interest and the underlying commitment to authorial autonomy that motivates these claims have remained important normative goals of copyright law despite the multiple doctrinal variations and updates that the law has gone through over the last three centuries.

Prof. Balganesh explains that in its most basic form, copyright law functions by rendering forms of expressive harm privately actionable. He identifies three types of expressive harm protected by copyright law: (1) appropriative harm, (2) in situ reputational harm, and (3) disseminative harm. Appropriative harm is the primary form of expressive harm that copyright ordinarily centers around, typically resulting from instances of copying. In situ reputational harm originates from the U.S. copyright system’s limited recognition of moral rights protection in the form of the rights of integrity and attribution. A common feature of both rights is they derive from the need to protect an author’s reputation as manifested in the work. The integrity right focuses on protecting against a mutilation or distortion of the work in the recognition that this would impact authorial reputation directly. The attribution right focuses on ensuring that a work is not wrongly attributed to an author, again with the recognition that attributions contrary to the author’s actions and intent to do harm to authorial reputation.

The third category of copyright harm forms the basis of privative copyright claims. It emerges from the mere dissemination or use of a protected work without the creator’s authorization, regardless of the objective utility or value of such actions. The dissemination is harmful not for its economic effects, but instead because of its interference with the author’s unique dignitary interests. In various situations, such as in the Monge case, individuals produce original expression that they intend to keep private or limit to very particular recipients. When fixed in a tangible medium of expression, such as a photograph, the communications become eligible for copyright protection. When such expression is made public, it amounts to a direct infraction of its creator’s personal autonomy.

Prof. Balganesh sees this infraction as two-layered. First, it repudiates the creator’s choice to control whether, how, and when the work is to be shared. Second, it forces the creator to admit to being the author of the work, since elements of the creator’s persona and identity are often apparent on the face of the work. The publication thus forces authorship on the creator, with all its social, legal, and moral implications. Central to disseminative harm is the recognition that the work is personal to its author in a rather distinctive way.

Modern copyright scholarship believes that disseminative harm is best dealt with through privacy law, not copyright law. Prof. Balganesh argues that this approach misunderstands the nature of privative claims in copyright law and the centrality of authorial autonomy that underlies them. He sees it as being drive by three primary concerns: (1) copyright utilitarianism, (2) free speech concerns, and (3) perception that privacy torts are better suited to address dignitary harms.

Prof. Balganesh addresses each of these concerns in turn. First, while copyright law today is often justified exclusively in utilitarian terms, this was not always the case. Privative copyright claims actually predate the utilitarian turn in copyright law. Prof. Balganesh argues that the overt utilitarian turn in copyright law is far from a principled reason to critique the legitimacy of privative copyright claims. To the contrary, normative pluralism has remained a hallmark of the copyright landscape, much like it has for a variety of legal institutions. The logic underlying the functioning of privative copyright claims began to take shape shortly after the passage of the Statute of Anne in 1710. In the three centuries since, they have mutated and adapted to society’s changing concepts of privacy, personal autonomy, and copyright’s coverage of new subject matter.

Second, Prof. Balganesh dismisses the concern that copyright protection for dignitary or privacy interests risks converting authorship into censorship. He explains that copyright has various devices protective of free speech that can come into play in privative claims, the most notable being fair use. Courts use fair use as a stand-in for free speech concerns and balance the fair use factors against the plaintiff’s claims. Given the robustness of these mechanisms, Prof. Balganesh sees no credible free speech concerns with privative copyright claims.

Third, Prof. Balganesh argues that privacy torts are not better suited to protect dignitary interests because the dignitary interests underlying privative copyright claims entail more than just a concern with privacy. They implicate considerations of personality and personal autonomy, in the way of authorial autonomy. Privacy torts, most notably the tort of public disclosure of private facts, focus on representational autonomy and an individual’s ability to control public representations of her persona. They view the denial of such autonomy as emanating from the subject’s choice to keep certain facets of her persona private, and then scrutinize the existence and parameters of that choice rather carefully. The nonconsensual public disclosure of such facts is seen to cast the subject into the public and in turn produce potentially emotional and reputational harm. Privative copyright claims, on the other hand, involve a combination of representational and authorial concerns that an incapable of disaggregation.

With this understanding of privative copyright claims, the Ninth Circuit’s opinion in Monge v. Maya Magazines can be seen in a new light. Recall that the plaintiffs were a celebrity couple who had taken photographs of their secret wedding and the defendant magazine somehow obtained copies of those photographs and published them. The Ninth Circuit’s finding for the plaintiffs demonstrates the difficulty courts have with privative copyright claims and why it is tempting to place them in another legal realm.

The court’s decision was predicated on an analysis of the four fair use factors. Since the fair use doctrine was codified in 1976, courts have grown to place significant reliance on the fourth factor—the potential market harm for the copyrighted work. However, examining the existence (or absence) of market harm for privative copyright claims is an obvious mismatch considering the plaintiff’s work was intended to be kept private. In Monge, the Ninth Circuit refused to acknowledge this mismatch, instead presuming an actual market for the plaintiffs’ photographs because the couple was “in the business of selling images of themselves and had done so in the past.”

The Ninth Circuit’s reasoning is puzzling because, by its own admission, the plaintiffs’ primary (if not exclusive) motivation in retaining the photographs was for their own private use. The photographs were not for sale, they were intended to remain secret. Prof. Balganesh acknowledges that such secrecy has a potential price in that the scarcity renders the information more valuable. But he finds it to be a stretch to presume an actual market for the work.

Prof. Balganesh recommends an alternative approach for courts to use when applying the fair use defense to privative claims. He argues that courts should consider the “dignitary” nature of the work under the second factor, a combination of its being (1) unpublished, (2) private, and (3) embodying expression directly implicating the author’s persona and identity. While this classification should not be dispositive in the overall fair use analysis, it should weigh heavily and influence the interpretation and application of the other factors. The fourth factor, relating to market effect, should be understood as receding in importance once the work is classified as “dignitary” in nature.

Prof. Balganesh’s article makes a strong case for courts to adopt this approach through tracing the historic evolution of privative copyright claims in Anglo-American copyright law. He teases apart the theories behind copyright law and develops a theoretical basis for understanding the workings of privative copyright claims. Privative Copyright is an essential read for a deeper understanding of copyright law.

Categories
CPIP Roundup

CPIP Roundup – December 2, 2020

Greetings from CPIP Executive Director Sean O’Connor

Sean O'Connor

I hope you had an enjoyable, restful Thanksgiving. At CPIP, we’re winding down 2020 while planning our spring and summer events—including biopharma and copyright roundtables, the 2021 WIPO-CPIP Summer School on Intellectual Property, and more.

As usual, our team has been up to many great things. Director of Copyright Research and Policy Sandra Aistars’ Arts & Entertainment Advocacy Clinic co-hosted a virtual clinic with Washington Area Lawyers for the Arts (WALA). The event was a huge success. You can read our write-up here, and a recording of the Rock Creek Kings’ featured performance is available here. Sandra also participated in a November 12 panel hosted by the Law of Intellectual Property (LIP) student organization at the University of Oregon School of Law (home to CPIP Senior Scholar Eric Priest).

I taught my annual workshop on “Public-Private Partnerships–Innovation and Technology Transfer” in the CEIPI-WIPO-INPI Advanced Training Course on Intellectual Property, Technology Transfer and Licensing. I also published an op-ed at The Hill on price controls, explaining why the government cannot seize or bypass pharmaceutical patents.

Our affiliates have also been doing great things as well. Scalia Law Alumna and Arts & Entertainment Advocacy Clinic Adjunct Professor Terrica Carrington and Lateef Mtima of Howard University School of Law and IIPSJ have great quotes in this Billboard article on choreography, copyright, and social justice. CPIP Senior Fellow for Innovation Policy Jonathan Barnett continues to blog at Truth on the Market; you can catch his latest piece here and read his take on how antitrust law can be abused to promote unproductive rent-seeking. Meanwhile Chris Holman, CPIP Senior Fellow for Life Sciences, continues writing for the Biotechnology Law Report, where he serves as Executive Director; his latest article is available here.

Below we highlight new papers from CPIP Edison Fellows Christa Laser (Equitable Defenses in Patent Law), Talha Syed (Owning Knowledge: A Unified Theory of Patent Eligibility), and Tabrez Ebrahim (Artificial Intelligence Inventions & Patent Disclosure).

While 2020’s end-of-year holiday season may well be challenging, I hope you and yours will find a way to share the spirit and renewal of this coming season while looking forward to a successful new year!

Spotlight on Scholarship

a pair of glasses, an apple, and a stack of books

The scholars from our Thomas Edison Innovation Fellowship program continue to publish high quality scholarship and cutting-edge research that promotes the value of intellectual property. Here are some recent publications:

Tabrez Y. Ebrahim, Artificial Intelligence Inventions & Patent Disclosure, 125 Penn. St. L. Rev. 147 (2020)

In his new paper at Penn State Law Review, Artificial Intelligence Inventions & Patent Disclosure, Professor Tabrez Ebrahim of California Western School of Law claims that AI fundamentally challenges disclosure in patent law, which has not kept up with rapid advancements in AI, and seeks to invigorate the goals that patent law’s disclosure function is thought to serve for society. In so doing, Prof. Ebrahim assesses the role that AI plays in the inventive process, how AI can produce AI-generated output (that can be claimed in a patent application), and why it should matter for patent policy and for society. He also introduces a taxonomy comprising AI-based tools and AI-generated output that he maps with social-policy-related considerations, theoretical justifications and normative reasoning concerning disclosure for the use of AI in the inventive process, and proposals for enhancing disclosure and the impact on patent protection and trade secrecy.

To read our blog post summarizing the paper, please click here.

Christa J. Laser, Equitable Defenses in Patent Law, 75 U. Miami L. Rev. 1 (2020)

In patent law, equitable defenses can play an essential role in multi-million-dollar patent infringement cases. Unclean hands, misuse, or estoppel can render a potential verdict unenforceable. Professor Christa Laser of Cleveland-Marshall College of Law dives into the unique and unsettled role of equity in her new paper, Equitable Defenses in Patent Law, which is forthcoming at the University of Miami Law Review. Prof. Laser compares two theories to determine how courts might interpret undefined language governing equitable defenses in patent statutes, and she analyzes whether Congress codified preexisting decisional law or expanded it with the 1952 Patent Act. Finally, Prof. Laser suggests that Congress could delegate its authority to an agency to handle the ever-changing patent landscape.

To read our blog post summarizing the paper, please click here.

Talha Syed, Owning Knowledge: A Unified Theory of Patent Eligibility (forthcoming)

In his new draft paper, Owning Knowledge: A Unified Theory of Patent Eligibility, Professor Talha Syed of Berkeley Law argues that the confusion surrounding patentable subject matter under Section 101 is two-fold. First, it results from our failure to develop a functionality doctrine that can clearly distinguish technological applications of knowledge from other forms of knowledge. Second, he offers a root cause of this failure. There is a distracting preoccupation in patent law with “physicalism,” that is, the notion that a patent is awarded for a thing (tangible or not) rather than for knowledge of that thing. In order to move forward, Prof. Syed states that we must first unwind the physicalist assumptions that are tangled up in our Section 101 analyses. Only then can we develop a functionality doctrine free of those encumbrances.

To read our blog post summarizing the paper, please click here.

Categories
C-IP2 News

#GivingTuesday: A Message from CPIP on Giving Tuesday 2020

CPIP logo

As we enter the holiday season and look ahead to 2021, we hope that you will keep CPIP in mind as you plan your end-of-year giving. Your support is critical to ensuring that CPIP can continue to bring reason and balance to the academic debate on intellectual property (IP) by engaging academics, creators, and innovators in a scholarly dialogue. Through our programs, events, network of scholars, and in-house staff, we have made great strides, but there is more work to be done. CPIP is an academic center and receives neither government funding nor funding from George Mason University, and it is only through the private support of our partners and sponsors that we can fulfill our mission.

To donate to CPIP, please visit: https://cip2.gmu.edu/donate-to-cpip/

You can also support CPIP by:

Your contributions help CPIP:

  • Host conferences, roundtables, fellowship meetings, symposia and colloquia, the WIPO Summer School on Intellectual Property, and many other programs that promote an ongoing dialogue on the importance of IP rights

  • Continue to build and maintain a community of research scholars and innovation industry stakeholders in the U.S.

  • Produce and support the production of a variety of cutting-edge research, scholarly articles, and policy materials that explore the value of IP and contribute to better-informed policy

  • Employ an in-house staff of directors and communications specialists who work tirelessly to plan and execute CPIP programs and events

  • Maintain and grow an international network of scholars, lawyers, and other professionals dedicated to the scholarly analysis of IP

Looking ahead to CPIP’s ninth year of operation, we are proud to be a leading academic voice in the discussion of IP rights and the technological, commercial, and creative innovation they facilitate. We have an exciting lineup of programs and events planned for 2021 as well as research and policy work agendas that will focus on key IP issues. The generosity of our partners and supporters is essential to CPIP’s success, and we thank you in advance for your support.