Category: Copyright

Photography, Portrait Subjects, and Copyright Law

Post author By Joshua Grove
Post date March 14, 2022

By Molly Stech*

*The blog post below and the law review article it links to are the individual thoughts and views of the author and should not be attributed to any entity with which she is currently or has been affiliated.

In a forthcoming article in the Vanderbilt Journal of Entertainment & Technology Law, I review the law and jurisprudence concerning joint authorship and provide an analysis of it with specific emphasis on photographers and portrait subjects. I wrote and edited this paper in conjunction with the George Mason University Scalia School of Law’s 2021-2022 Thomas Edison Innovation Law and Policy Fellowship, and am very grateful for the thoughtful comments I received from Senior Commentators and scholars involved with the Fellowship.

A recent string of litigation in this space, and the general question of ownership interests in one’s own likeness, are what prompted my interest. Paparazzi have filed lawsuits against models and other celebrities for reposting images of themselves on their social media feeds, without permission from or compensation for the photographer. Some celebrities have countersued, but many of these cases settle out of court. In a best-case scenario, paparazzi and their subjects enjoy a mutually-beneficial relationship, but these lawsuits highlight a problematic legal space. It is accepted domestically and abroad that copyright subsists in the vast majority of photographs and that the copyright belongs to the photographer. The bar to copyrightability is notoriously low; it requires only a modicum of creativity.

Photographers have a wide range of creative choices they can highlight to showcase where their authorship lies in a given photograph, including the camera and film used, the angle, the lighting, and the backdrop. What I explore in this paper is the possibility that subjects of photographs may also contribute copyrightable authorship to a given photograph, and may therefore be eligible to be deemed co-authors of certain photographs with the photographer. Copyright law aims to reward creative expression. Nothing in the statute can be read to proactively deny a subject co-authorship. I point out that copyright law is accustomed to doing the hard work of factual analysis (see, e.g., the fair use doctrine) and that any given work, including a photograph, should be considered on its own for purposes of correctly identifying authorial contribution. In some cases, a subject will contribute copyrightable expression by posing her limbs, arranging her facial expression, selecting her garments, or even arranging how her garments fall. So long as the contribution is adequately creative, co-authorship should be hers.

Joint (or Contributing) Authorship: Roadblocks

Two barriers to overcome in reaching this conclusion include some courts’ emphasis on joint authors’ intent; and some courts’ prerequisite that every contribution to a jointly-authored work be independently copyrightable. I address each of these problems in turn and underline that the statute itself does not make these requirements. Admittedly, in U.S. law, these are not easily surmountable obstacles. But, in taking copyright law back to its first principles, I believe the correct answer can be found in reemphasizing creative contribution. A recent case in the United Kingdom demonstrates an admirable flexibility that tailors an assignment of authorship to the degree of authorial contribution. An apportionment of authorship can be discerned from analyzing works one at a time. As mentioned, U.S. copyright law is no stranger to a work-by-work analysis in its fair use doctrine; another example is the idea-expression dichotomy, which provides that the more a work merges with its inevitable expression, the thinner its depth of copyright protection.

Other Thinking on These Issues

Any timely issue is likely to invite the contributions of other scholars, and this topic is no different. Other scholars have suggested sui generis rights for paparazzi subjects; separate types of exclusive rights for social media; and a personality-based right that could stretch copyright-like rights from covering “works” to people themselves. Another scholar argued persuasively for paparazzi subjects to receive an implied license to use photographs of themselves in certain ways. My analysis remains proscribed within copyright law itself, with the baseline argument that authorial creativity, whatever its guise, should be rewarded with rights.

There are other interesting avenues that are being explored to solve a similar problem, and I will follow them with interest. The right of privacy, a fascinating and complex legal discipline, may also offer solutions in the future. My paper mostly sidesteps the phenomenon of revenge porn, for example, and while a copyright argument could be made in the average scenario (no matter who pushes “record,” there are two people potentially offering creative expression to the final film), privacy law may be a more logical solution to protecting those subjects than copyright law. Another related argument that works in my favor, I believe, is rooted in freedom of expression. If copyright law is the engine of free expression, so should it contribute to people having a legal stake in their photographic likeness in order to control or at least contribute to the narrative attached to that photograph.

The paper is available in draft form at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4049946

And it will be available in late 2022 from Vanderbilt’s JETLaw website: https://scholarship.law.vanderbilt.edu/jetlaw/

Bettman Archive, Mikhail Baryshnikov, Eliot Feld’s
Santa Fe Saga, April 14, 1978. © Getty Images

Examples

While a revenge porn video may not make the best example for my analysis, I believe that selfies and photographs of dancers onstage do help demonstrate my view. A selfie is probably a copyrightable work. But in analyzing a given selfie to ascertain where the creativity lies, it will likely be in the pose, the facial expression, and the garments (the subject’s choices) as much as it will be in the framing, the backdrop, and the angle (the photographer’s choices). The photographer and the subject are of course the same person in the case of the selfie, but in deconstructing a photograph and searching for its authorial qualities, an argument certainly exists for the former forms of authorship as much as for the latter. And for a dancer onstage, his or her pose, facial expression, turnout, limb extension, jump arc, makeup, and any number of other attributes cannot reasonably be the result of the photographer’s efforts or talent, although the resulting photograph will of course likely benefit from them.

Conclusion

Co-authorship may exist in certain photographic portraits. It is essential that copyright law reexamine its interpretation of joint authorship in order to better capture and reward the contributions of the parties who offer creative expression to any given copyrightable work.

Tags authorship, copyright, Edison, Molly Stech, photography, Thomas Edison Innovation Law and Policy Fellowship

Just What Is the Case with the CASE Act? A Brief Overview

Post author By Joshua Grove
Post date June 14, 2021

The following post comes from Ryan Reynolds, a 3L at Scalia Law and Research Assistant at CPIP.

By Ryan Reynolds

The phrase “creators have rights, but no remedies” is likely familiar to those aware of the current landscape of copyright protection for individual creators and small businesses (“Creators”). While the Copyright Act of 1976 grants a bundle of rights to Creators for the protection of their works, for years Creators have faced an uphill battle enforcing those rights against infringers. There are many who are optimistic, however, that things might soon change with the passage of “The Copyright Alternative in Small-Claims Enforcement Act of 2020” (CASE Act).

Signed into law as part of H.R. 133, the Consolidated Appropriations Act, [for Fiscal Year] 2021 (“CAA”), the CASE Act creates a Copyright Claims Board (“CCB”) within the Copyright Office to handle small copyright claims (small only in the sense of their relatively modest economic value). As there is some time before the CCB comes into operation, the earliest being December 21, 2021, and the latest June 2022, now is a good time to provide an overview of just what the CASE Act does. Before venturing fully into the mechanics of the CASE Act, however, it is important to first highlight why its supporters felt it was needed.

Why Is It Needed?

Copyright cases are almost exclusively an area of federal jurisdiction, meaning that copyright infringement cases must be brought in a federal rather than state court; however, litigating a copyright infringement case in federal court is anything but easy. First, the average cost of litigating a copyright infringement claim has been estimated at $397,000—a cost that often greatly outweighs any potential recovery for Creators’ works. It is for this reason that many attorneys are simply unwilling to take Creators’ copyright infringement cases, leaving many Creators feeling disenfranchised.

Second, the complexity of the federal court system is often overwhelming for Creators. As stated in the Copyright Office’s 2013 Copyright Small Claims report, “Small copyright owners, who frequently lack experience with federal courts, often find federal litigation too difficult . . . and may be unable to navigate ‘the often complex procedural rules that govern federal litigation . . . .’” As highlighted in the report, even the Copyright Act’s registration requirement—the gateway requirement to launch a copyright infringement claim—can be problematic for Creators. It requires that a copyright owner successfully register, or receive a rejection of registration, from the Copyright Office before launching an infringement claim. Moreover, for a Creator to qualify for statutory damages and attorney’s fees, the Copyright Act requires the registration of the work within three months of its publication, or if unpublished, before the act of infringement. The failure to register within the required time is critical, as without the potential recovery of statutory damages (which can range up to $150,000 per work infringed), a Creator’s recovery would not likely overcome the legal fees incurred litigating the case.

As stated in the report, the result of this cost and complexity is that “federal court is effectively inaccessible to copyright owners seeking redress for claims of relatively low economic value, especially individual creators who are of limited resources.” Enter the CASE Act, which aims to create a less expensive and less procedurally complex alternative to the current system by creating the CCB within the Copyright Office. But how will the CCB operate?

How Will It Operate?

When the CCB becomes operational, a party will have the choice of commencing a copyright infringement proceeding in either federal court or the CCB. In contrast to federal court, and as will be discussed in more detail later, proceedings in the CCB are completely voluntary. Another way in which the CCB differs from federal court is in its authority over copyright infringement claims only where the total damages sought do not exceed $30,000. As to the CCB’s structure, it will be composed of three full-time Copyright Claims Officers. Each of the Officers must have seven years of legal experience; two of them must also have extensive copyright adjudication experience, while one must have extensive alternative dispute resolution experience. The Librarian of Congress will appoint these Officers to staggered six-year terms, and they will be supported by at least two full-time Copyright Claims Attorneys with at least three years of experience.

To make the CCB more accessible to Creators, the CCB’s proceedings aim to be more streamlined and user friendly than federal courts. A proceeding before the CCB begins when the claimant files a claim to the CCB that includes the proper filing fee and a statement of the material facts. In contrast to federal court, the CASE Act only requires a completed application for registration of the claimant’s work(s), rather than a certificate of registration or refusal of registration by the Copyright Office to commence the claim. After the claim is approved for compliance with the law and applicable regulations by a Copyright Claims Attorney, the claimant has 90 days to complete service. After receiving service, the respondent then has 60 days to opt out of the proceeding before it becomes “active”; however, in the “interests of justice,” the CCB can extend this window another 60 days.

The user-friendly goal of the CCB is best exhibited by the Act’s requirement that the proceedings take place solely “by means of written submissions, hearings, and conferences carried out through internet-based applications.” The only exception to this convenience is when there is “material” “physical or other nontestimonial evidence” that otherwise the CCB cannot review. Further, proceedings before the CCB will be more informal than in federal court. There is no requirement for representation by an attorney, there is limited discovery, and the formal rules of evidence do not apply. If the parties do not settle, at the close of the proceeding the CCB must make factual findings based on the preponderance of the evidence and issue a publicly available written determination.

With regard to remedies, the CCB has the authority to award either actual damages, and the respondent’s profits, or statutory damages. If the CCB awards statutory damages, it “may not make any finding that, or consider whether, the infringement was committed willfully,” and if timely registration has been made with the Copyright Office, the CCB can award up to $15,000 for each work infringed, though this is subject to a $30,000 maximum. In an important shift from existing law, however, even if the work was not timely registered, the CCB may still award up to $7,500 for each work infringed to a maximum total of $15,000 in a single proceeding.

Within 30 days of the issuance of the final determination of the CCB, a party can request reconsideration by the CCB. After giving the other parties an opportunity to respond, the CCB may either deny the request or amend the determination. If the CCB denies the request for reconsideration, a party then has 30 days to request the Register of Copyrights to review the CCB’s determination. After giving the other parties time to respond, the Register may deny or remand the proceeding to the CCB for reconsideration. Finally, within 90 days of the final determination, or the post-determination reconsideration, a party can appeal to a U.S. District Court. It is also in federal district court where a party can seek enforcement of the CCB’s determination if the other parties to the matter refuse to abide by its determination. For a visual representation of this process, the Copyright Alliance has put together an informative flowchart.

The CASE Act requires that three years after the CCB becomes operational the Register of Copyrights make assessment of its effectiveness. While whether the CASE Act will create the change hoped for by its supporters is yet to be seen, in my view, the attention given to address the challenges to Creators is critically important.

Tags CASE Act, Consolidated Appropriations Act, copyright, Copyright Act of 1976, Copyright Alliance, Copyright Alternative in Small-Claims Enforcement Act, Copyright Claims Board, court, creators, Librarian of Congress, Register of Copyrights, Ryan Reynolds, small claims

Professor Justin Hughes on “Restating Copyright Law’s Originality Requirement”

Post author By Joshua Grove
Post date May 20, 2021

The following post comes from Ryan Reynolds, a 3L at Scalia Law and Research Assistant at CPIP.

By Ryan Reynolds

In the 89 years following the publishing of the first Restatement of Law in 1932, the American Law Institute’s (ALI) Restatements have become an important tool for those in the legal community to better understand different bodies of law. Despite the success of the Restatements, however, their expansion into different areas of law has not always been received with open arms. Such is the case with the Restatement of Copyright. Since the project was revealed in 2015, many have voiced their skepticism of the project, questioning both its utility and whether its supporters truly want to restate the law or instead reform it. It is against this backdrop that Professor Justin Hughes’ forthcoming article, Restating Copyright Law’s Originality Requirement, finds itself situated.

In his forthcoming article, Prof. Hughes provides a detailed review of the draft Restatement’s treatment of one of the threshold requirements for copyright protection: the “originality” requirement. This requirement is established per §102(a) of the Copyright Act of 1976, which states that “[c]opyright protection subsists . . . in original works of authorship [emphasis added].” To determine whether a work is sufficiently original to be copyrightable, however, the Supreme Court created a two-pronged test in its seminal 1991 Feist Publ’ns, Inc. v. Rural Tel. Serv. Co. opinion. First, the work must be “independently created by the author,” which means that the author created the work without knowingly copying another’s work; second, the work must possess a “modicum of creativity”—which, by all accounts, is a very low bar.

Prof. Hughes concludes that, despite the inspiration for the project “by academics who felt the pace of reform of copyright law . . . has been too slow, [and] in the wrong direction,” the draft Restatement “stick[s] to a centrist, sometimes minimalist, narrative of Feist’s two-step framework.” This notwithstanding, Prof. Hughes notes that there are several “occasional missteps” and “a few points of genuine concern” with the current draft Restatement.

The Draft Restatement’s Treatment of The “Originality Requirement”

As noted by Prof. Hughes, the draft Restatement follows the general framework of Feist with § 5 “‘Originality: In General,’” stating in 5(b) that, “‘[f]or a work to be original, the work must be independently created by its author, as discussed in § 6, and must embody expression that is at least minimally creative, as discussed in § 7.’”

In his review, Prof. Hughes examines § 6 and § 7 respectively, beginning first with § 7’s treatment of Feist’s modicum of creativity requirement.

§ 7’s Treatment of the Modicum of Creativity Requirement

Describing it as the “true heart of the draft Restatement’s originality exercise,” Prof. Hughes commends the draft Restatement for what it does well while also criticizing it on several grounds. As for what he believes it does well, Prof. Hughes approves of the language shift from 7(a)’s, which focuses on “expression that is…minimally creative,” to 7(b) and 7(c)’s, which focuses on the author’s “choices.” While acknowledging that others have criticized the section for “this sleight of hand,” Prof. Hughes believes that this properly reflects the “shift from what courts are supposed to do to what courts actually do [emphasis in original].” As explained by Prof. Hughes, while Feist directs courts to look for a modicum of creativity, the Supreme Court’s 1903 Bleistein v. Donaldson Lithographing Co. decision prohibits judges from making “aesthetic judgments” on what is and is not creative. To resolve this tension, Prof. Hughes explains that courts look to the creative choices in the creation of a work to determine minimal creativity. Therefore, Prof. Hughes believes the draft Restatement’s focus on author’s “choices” accurately reflects the practice of courts; however, as it barely mentions Bleistein, it does not adequately explain to the reader what it is doing.

Further, Prof. Hughes criticizes § 7 for not following its treatment of author’s “choices” consistently where 7(c) is concerned. The relevant language of 7(c) says that “‘[t]he minimal-creativity requirement is not satisfied by choices . . . (such as . . . the tools used to produce the work . . . ).’” Prof. Hughes argues that this provision is incorrect, as “[t]he artist’s choice of which tools to use is part of the creative process. The sculptor’s choice of which chisel to pick up—width of blade, angle of blade, hardness of steel, etc.––may be an expressive choice.”

Another problem Prof. Hughes identifies with the draft Restatement of § 7 is that “Section 7(b) clearly seems intended to limit ‘selection, coordination, and arrangement’ as possible bases for original expression to ‘compilation’ works.” While the current draft of 7(b) states that, “In the case of a compilation [emphasis in original], choices regarding the selection, coordination, or arrangement of elements can satisfy the minimal creativity requirement even if those elements are not themselves original,” the 2018 version “did not have this limitation and was more open-ended.” As expressed by Prof. Hughes, “This intent to limit selection, coordination, and arrangement of bases for minimal creativity to the category of ‘compilation’ works is not an accurate reflection of case law [emphasis in original].”

Prof. Hughes also criticizes the draft Restatement both for what it chooses to say and chooses not to say about creativity. As to the former, while comments to § 7 do not provide a definitive definition of what is or is not original, they do provide a list outlining what minimal creativity requires. While to Prof. Hughes this list is helpful, it is also imperfect and raises concerns. One concern he highlights is its potential to raise the minimal-creativity bar, thereby narrowing copyright’s protections. To this point, Prof. Hughes highlights that, in the draft Restatement’s list, it provides that creativity must be “‘making non-obvious choices from more than a few options.’” As Prof. Hughes breaks down, “[t]hat appellate court dictum is directly contradictory to the Supreme Court’s statement in Feist . . . that the minimal-creativity requirement . . . can be met by ‘some creative spark, ‘no matter how crude, humble, or obvious’’[emphasis in original].”

As to what the draft Restatement chooses not to say about creativity, Prof. Hughes first believes that, to improve, the draft Restatement should “includ[e] . . . a discussion of how choices that manifest individual personality,” such as the decisions of photographers on how they take pictures, are “protectable original expression.” To this point, Prof. Hughes believes that “the most serious shortcoming” of § 7 is the Reporters’ decision not to address Bleistein—which, in the cited words of Prof. Barton Beebe, “‘directly connected ‘originality’ with personal expression.’” Second, Prof. Hughes believes that § 7 should acknowledge “‘intellectual’ choices” as “part of the minimal-creativity equation.”

§ 6’s Treatment of The Independent Creation Requirement

Moving onto his review of § 6, Prof. Hughes first points to its language: “A work meets the independent-creation criterion for originality if the author has contributed some expression to the work without copying that expression from any preexisting work.” While Prof. Hughes believes that the “formulation is ok,” he quickly points out issues he sees with the section’s comments and Reporters’ Notes. First, Prof. Hughes notes that Comment a’s statement “that ‘[f]or expression to be independently created, it must come from the mind of the author’ . . . arguably conflates the two Feist prongs”—a conflation he notes Comment b also likely commits. As Prof. Hughes explains, “the independent production requirement is that the expression be made or brought into the world by a person who had not experienced the same expression previously [emphasis in original],” and therefore “[i]t is not necessary that it ‘come from the mind of the author.’” As Prof. Hughes illustrates, “If a person throws a set of dice one hundred times and writes down the resulting dice totals from each roll on a list, that list was ‘independently-created’ under Feist.”

Prof. Hughes is also critical of the discussion of “novelty” in Comment b, which says that “‘the expression need not be novel or unique.’” While he believes the Reporters’ Notes make an important point, he sees the use of the word “novelty” as simply “too loaded with patent law baggage.” As he explains, the independent-creation standard for Copyright is different from patent law’s “novelty” standard, as “[c]opyright’s independent-creation requirement does not mean that the thing cannot already exist in the world.” Therefore, as there may be confusion in using the word “novelty,” Prof. Hughes recommends removing it altogether.

Lastly, Prof. Hughes also questions the amount of attention the Comments and Reporters’ Notes to § 6 dedicate to nonhuman authorship. After providing an overview of the current limited case law surrounding this issue, he concludes that, while “[t]hese issues are fun conjecture for academics, . . . [they] are so rarefied as to wonder why the draft Restatement discusses them at all.”

Tags ALI, American Law Institute, Barton Beebe, copyright, creativity, Justin Hughes, Restatement of Copyright, Ryan Reynolds, Supreme Court

Artist Roundtable Presented by the Mason Sports & Entertainment Law Association and the Arts & Entertainment Advocacy Clinic

Post author By Joshua Grove
Post date May 5, 2021

The following post comes from Austin Shaffer, a 2L at Scalia Law and a Research Assistant at CPIP.

By Austin Shaffer

On April 6th, the Mason Sports & Entertainment Law Association, in conjunction with the Arts & Entertainment Advocacy Clinic, hosted its Artist Roundtable event. Moderated by Professor Sandra Aistars of Scalia Law, the panel featured musician and producer David Lowery, filmmaker and photographer Stacey Marbrey, and author and director David Newhoff. To kick off the event, Prof. Aistars invited each of the panelists to introduce themselves and highlight any ongoing projects.

About the Panelists

Stacey Marbrey is an award-winning film director, producer, and internationally recognized editorial photographer and has programmed numerous film festivals. Previously, she acted as Program Director for an international film exchange under the auspices of the U.S. Department of State in concert with both the President’s Committee on the Arts and Humanities and the American Film Institute.

David Lowery is an American guitarist, vocalist, songwriter, mathematician, and activist. He is the founder of alternative rock band Camper Van Beethoven and co-founder of the traditional rock band Cracker. Throughout his career in the music industry, Mr. Lowery has worked in nearly every role imaginable, from both the business and music perspectives. Recently, he worked on a small project with limited online CD sales to experiment with a new revenue stream and business model. Mr. Lowery frequently posts at the popular blog “The Trichordist.”

David Newhoff is a writer and copyright advocate. He recently finished his first book, Who Invented Oscar Wilde? The Photograph at the Center of Modern American Copyright. He lives in New York’s Hudson River Valley, where he is currently working on his next book. Mr. Newhoff also writes the popular copyright blog “The Illusion of More.”

How do creative roles intersect with legal issues? What can lawyers do a better job of understanding when engaging with creators?

Mr. Lowery highlighted the importance of the intersection between the arts and legal roles. Unfortunately, he noted, there is a stigma in the artistic community regarding the use of legal action. He commented that, while you should generally attempt to resolve disputes internally, you cannot be afraid to use the legal system to enforce your rights. Even the legally savvy artists can misjudge the scope of the rights to which they are entitled. Mr. Lowery emphasized the need to provide artists with an “intervention”: register your works with the Copyright Office, guarantee your revenue streams with the Mechanical Licensing Collective, and enforce your rights.

On a similar note, Mr. Newhoff echoed the notion that some artists do not fully appreciate the scope of their rights and––perhaps more importantly—their obligations. It is not uncommon, he explained, for creators to assume that their publisher will handle all the legal responsibilities that go into creating a work (i.e., clearing photographs, obtaining permission to publish interviews, etc.). That assumption, however, leaves the author subject to potential liability for copyright infringement. Rather than taking that risk, Mr. Newhoff argued, creators should be proactive in fulfilling their legal obligations.

Commenting on Mr. Newhoff’s observations, Ms. Marbrey remarked that, in many cases, creators wear many different hats and serve in various roles throughout the course of creating a work. Particularly in the film industry, it can be difficult for creators to keep their various duties and obligations separated and organized. Ms. Marbrey argued that this is one problem that lawyers can help to solve. By taking the time to understand the numerous roles in which a single creator may serve, lawyers can help to ensure that creators are getting maximum value out of their efforts.

The Stigma Against Contracts

The panelists each made unique observations on the use of contracts and how their respective industries tend to perceive them. Prof. Aistars pointed out a concerning trend: creators tend to have a negative view towards contracts and consequently refrain from using them. She commented that, in general, no one wants to be the person to involve lawyers in otherwise “friendly deals.”

The panelists shared stories from their careers that demonstrated this stigma. Ms. Marbrey, for example, worked on a collaborative project involving multiple SAG actors. The parties declined to set up a contractual framework to properly address various SAG-AFTRA requirements for actors. Consequently, the production was later paused to renegotiate deals with the actors after the film was already completed. Due to this misstep, the release of the project was delayed.

The panelists concluded that, while it may force some uncomfortable conversations at the onset of a project, creators should become more liberal with their use of contracts. Doing so allows for a mutual understanding between all parties before any time is invested into the creative process.

Current Trends to Watch in Copyright Law

This portion of the discussion offered a unique insight into the development of copyright law from creators’ perspectives. While the conversation was wide-ranging, there were several common topics that the panelists found especially significant.

The panelists came to a consensus that the general agenda of weakening copyright law could cause devastating effects to the creative community. Mr. Newhoff pointed specifically to the ongoing work being done by the American Law Institute (ALI) on a potential Restatement of Copyright. He argued that broadly speaking, the academic world tends to take an anti-copyright law stance. The panelists agreed that this should generate concern from the creative community and that individual creators should strive to have their voices heard as this project continues.

In general, creators tend to have difficulties understanding the scope of fair use. Especially given the recent Supreme Court decision in Google v. Oracle, there is an element of amorphousness to the fair use doctrine. The panelists concurred that, without legal assistance, creators will likely continue to struggle in determining what constitutes fair use and what requires a license to use.

The event concluded with a discussion on how creators can adapt to and update with the digital age. As a threshold matter, Mr. Newhoff argued that it is hard to fit 20th-century copyright doctrine into the 21st-century landscape. Moving forward, some of the copyright laws may need to be updated (or at least monitored) to better facilitate the production of creative works. Optimistically, Ms. Marbrey noted that the “streaming takeover” is exciting for filmmakers. Although streaming can pose tricky and previously unconsidered issues surrounding copyright law, it offers a new way for creators to showcase their works and opens the door to innovative revenue streams.

Tags artists, Arts & Entertainment Advocacy Clinic, Austin Shaffer, contracts, copyright, David Lowery, David Newhoff, event, fair use, film, Google v. Oracle, Mason Sports & Entertainment Law Association, music, panel, Sandra Aistars, Stacey Marbrey, streaming, Supreme Court

Recap of the Supreme Court’s Google v. Oracle Opinion

Post author By Joshua Grove
Post date April 23, 2021

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

By Liz Velander

The Supreme Court finally reached a determination in the decade-long dispute between two of the biggest technology companies in the world, Google and Oracle. Many have long-awaited the Court’s decision in this case, as it had the potential to provide market certainty in the software industry through its copyrightability analysis. The Court ultimately declines to give that certainty by bypassing the copyrightability issue and choosing to base its holding on a fact-intensive fair use analysis. The Court does this so as to “not answer more than is necessary to resolve the parties’ dispute,” “given the rapidly changing technological, economic, and business-related circumstances.” It emphasizes that its holding is narrow, only applies to declaring code, and does not modify its prior cases on fair use. However, by framing its opinion this way, the Court provides new arguments for infringers to use in a fair use defense in the software sphere and beyond. For this reason, the Court’s decision is not as narrow as it sets out to be. It may lead to lower court decisions that broaden the fair use doctrine and limit the copyright protection given to software.

The Court’s decision broadens fair use by using the doctrine to loosen copyright protection for certain types of code, allowing for a more expansive reading of a “transformative use,” and giving great weight to the public benefit of the use. Before it engages in its fair use analysis, the Court states that “fair use can play an important role in determining the lawful scope of a computer program copyright, such as the copyright at issue here.” Fair use “can distinguish between expressive and functional features of computer code where those features are mixed.” It can also “focus on the legitimate need to provide incentives to produce copyrighted material while examining the extent to which yet further protection creates unrelated or illegitimate harms in other markets or to the development of other products.” The Court describes fair use as a “context-based check that can help to keep a copyright monopoly within its lawful bounds.”

To highlight the ability of fair use to accomplish these goals, the Court begins its analysis with the second statutory factor, “the nature of the copyrighted work.” The Court uses this factor to discuss issues that would have come up if it analyzed the copyrightability of Oracle’s material, such as the applicability of the merger doctrine. It then moves to “the purpose and character of the use,” where it adopts an expansive reading of what constitutes a “transformative use.” The biggest impact of the Court’s fair use analysis, however, will likely come from the great weight it gives to the public benefit of the use under the market effect factor. By using fair use to determine “the lawful scope of a computer program copyright,” the Court’s holding may inadvertently broaden the fair use doctrine.

The Nature of the Copyrighted Work

The Court begins its analysis with describing “the nature of the copyrighted work.” The copyright at issue protects a portion of Oracle’s Java SE platform, called declaring code. Java SE has three essential parts: (1) implementing code, (2) method calls, and (3) declaring code. Implementing code tells the computer how to execute the particular task the programmer asks it to perform. Method calls are commands that help the computer carry out the task by choosing the correct programs written in implementing code. The declaring code is how the method call actually locates and invokes the particular implementing code that it needs to instruct the computer how to carry out a particular task.

For each task, the specific method call entered by the programmer matches up with a specific declaring code inside Java SE. That declaring code provides both the name for each task and organizes them within Java SE’s library. In this sense, the declaring code and the method call form a link, allowing the programmer to draw upon the thousands of prewritten tasks, written in implementing code. Without that declaring code, the method calls entered by the programmer would not call up the implementing code.

In this case, Google did not copy the implementing code from Oracle’s Java SE platform; it copied the declaring code. The Court draws a “critical line” between the uncopied implementing code and the copied declaring code under this factor. On one hand is the innovative implementing code and on the other, user-centered declaring code. The Court explains that the writing of implementing code requires balancing considerations as to how quickly a computer can execute a task or the likely size of a computer memory. The Court says that this balancing is “the very creativity that was needed to develop the Android software for use not in laptops or desktops but in the very different context of smartphones.”

Declaring code, the Court says, embodies a different kind of “creativity” because it is user facing. It must be designed and organized in a way that is intuitive and understandable to developers so they can invoke it. As part of a user interface, declaring code differs from most computer code because “its use is inherently bound together with uncopyrightable ideas (general task division and organization) and new creative expression (Android’s implementing code).” For these reasons, the Court concludes that “the declaring code is, if copyrightable at all, further than are most computer programs (such as the implementing code) from the core of copyright.” Therefore, the Court finds that the second factor, “nature of the copyrighted work,” points in the direction of fair use.

The Purpose and Character of the Use

The Court explains that the inquiry into “the purpose and character” of the use turns in a large measure on whether the copying at issue was “transformative,” that is, whether it “adds something new, with a further purpose or different character.” The Court finds that, even though Google copied Oracle’s declaring code verbatim, its use was “transformative” because it furthered the development of software programs.

The Court explains that what Google did is known as “‘reimplementation,’ defined as the ‘building of a system . . . that repurposes the same words and syntaxes’ of an existing system.” Google “reimplemented” Oracle’s declaring code to allow programmers expert in the Java programming language to use the “task calling” system that they had already learned. By using the same declaring code, programmers using the Android platform can rely on the method calls that they are already familiar with to call up particular tasks. Then Google’s own implementing code carries out those tasks.

The Court concludes that Google’s copying was a transformative use. “Google’s purpose was to create a different task-related system for a different computing environment (smartphones) and to create a platform—the Android platform—that would help achieve and popularize that objective.” Such use is “consistent with the creative ‘progress’ that is the basic constitutional objective of copyright itself.” Therefore, the purpose and character of Google’s copying was transformative to the point at which this factor also weighs in favor of fair use.

The Amount and Substantiality of the Portion Used

The Court says that the question here is whether the over 11,000 lines of code Google copied should be viewed in isolation or as one part of a considerably greater whole. On one hand, those lines of code amount to virtually all the declaring code needed to call up hundreds of different tasks. On the other hand, if one considers the entire set of software material in the Java SE platform, the quantitative amount copied was small (only 0.4 percent).

The Court decides to view Google’s copying as one part of a greater whole because the amount of copying was “tethered to a valid, and transformative, purpose.” It explains that Google did not copy the lines because of their creativity but because programmers had already learned to work with the Java SE platform, and it would have been difficult to attract programmers to build its Android smartphone system without them. It describes the portion of the declaring code used at “the key that [Google] needed to unlock the programmers’ creative energies. And it needed those energies to create and improve its own innovative Android systems.” For these reasons, the Court holds that this factor weighs in favor of fair use.

Market Effects

The fourth statutory factor focuses upon the “effect” of the copying in the “market for or value of the copyrighted work.” The Court explains that this requires a court to consider the copyright owner’s potential loss of revenue, the source of the loss, and the public benefits the copying will likely produce. As to the likely amount of loss, the Court states that Oracle was ill-positioned to enter the smartphone market, so the jury could have found that Android did not harm the actual or potential markets for Java SE. As to the source of the loss, the Court finds Android’s profitability has much to do with third parties’ (programmers’) investment in the Java programs and less to do with Oracle’s investment in creating the Java SE platform. It says that the Copyright Act does not protect third parties’ investment in learning how to operate a created work.

Finally, given programmers’ investments in learning the Java SE platform, to allow enforcement of Oracle’s copyright here would risk harm to the public by operating as a lock on innovation. “The result could well prove highly profitable to Oracle (or other firms holding a copyright in computer interfaces). But those profits could well flow from creative improvements, new applications, and new uses developed by users who have learned to work with that interface. To that extent, the lock would interfere with, not further, copyright’s basic creativity objectives.” The Court concludes that the uncertain nature of Oracle’s “ability to compete in Android’s market place, the sources of its lost revenue, and the risk of creativity-related harms to the public, when taken together, convince that this fourth factor—market effects—also weighs in favor of fair use.”

The Court ends its opinion by noting that “the fact that computer programs are primarily functional makes it difficult to apply traditional copyright concepts in that technical world.” While that is certainly true, the Court made its work more difficult by basing its opinion in fair use instead of analyzing the copyrightability of Oracle’s code in the first place.

Tags code, copyright, copyrightability, fair use, Google v. Oracle, Java SE, Liz Velander, software, software development, Supreme Court, transformative use

Professors Balganesh and Menell on “The Curious Case of the Restatement of Copyright”

Post author By Joshua Grove
Post date April 8, 2021

The following post comes from Ryan Reynolds, a 3L at Scalia Law and Research Assistant at CPIP.

By Ryan Reynolds

In 2015, the American Law Institute (ALI) made the announcement that it would restate an area of law that is dominated by a detailed statute—the Restatement of Copyright. ALI’s Restatements have played an important role in the development of the law, with judges, lawmakers, and law students referring to them as important tools in understanding different bodies of law. In the nearly one hundred years since ALI’s formation, however, its Restatement projects have historically eschewed legal fields dominated by statutes, instead focusing on common law topics. Therefore, when ALI announced its plan to create a Restatement of Copyright, there were many who were skeptical of the project.

It is in this context that Professors Shyamkrishna Balganesh and Peter Menell provide insight in their forthcoming article in the Columbia Journal of Law & the Arts, Restatements of Statutory Law: The Curious Case of the Restatement of Copyright. While Profs. Balganesh and Menell support a Restatement of Copyright, they argue against ALI’s application of the traditional Restatement format to an area of law dominated by a detailed federal statute. They argue that such an application ignores the analytical mismatch between the traditional Restatement format and statutory domains that will create more confusion than clarity. To resolve this mismatch, Profs. Balganesh and Menell argue for several modest changes that would allow the project to serve as a template for future statutory Restatements.

Historical Origins of the “Mismatch”

Looking to the origins of ALI, Profs. Balganesh and Menell illustrate that, from the beginning, it purposely avoided areas of law principally governed by statutes. ALI’s conception of its core function then, as now, was to resolve the uncertainty and complexity of American law—which, at the time of ALI’s formation, was derived from judge-made law that lacked general agreements on legal principles. Therefore, ALI provided guidance to judges and those involved in the legal field with the first Restatements of the law. These Restatements distilled black-letter rules of law from the disparate court decisions across the country and were seen as clear statements of the law.

It is for this reason that, soon after ALI approved a Restatement of Business Associations, fear arose among its membership that it was a subject too steeped in statutory provisions to fit the Restatement model. To address this fear, then ALI Director William Draper Lewis prepared a report outlining a framework to adapt Restatements to statutorily dominated legal fields. At its core, this framework advocated for placing the statutory provisions of subjects governed by uniform statutory law front and center. To Mr. Lewis, the primary value of these Restatements would not consist in distilling black-letter rules of law but would instead be the clarification of interpretive principles, providing the relevant judicial and executive efforts surrounding the statutory text.

Despite Mr. Lewis’ efforts, however, ALI ultimately abandoned the project and never revisited the framework of Lewis’ report. Following this affair, ALI’s Restatements avoided direct engagement with fields dominated by statutory law, instead using model codes as an alternative. That changed in 2015 when ALI announced the Restatement of Copyright project.

The “Mismatch” in the Current Restatement Initiative

As Advisors on the Restatement of Copyright project, Profs. Balganesh and Menell take time to outline their experience and criticism of the project’s use of the traditional Restatement model to copyright law. Despite ALI initially indicating that the project would focus on common law features of the Copyright Act, the first circulated draft indicated that its scope had expanded to include federal statutory provisions. To create its distilled black-letter rules of law, Profs. Balganesh and Menell note that the draft paraphrased, condensed, and reworded the statutory provisions of the Copyright Act. These changes were such that the “lack of attention to the text, legislative history, and administrative context of copyright law . . . would not aid busy judges in identifying pertinent sources for interpreting statutory provisions.”

To illustrate their criticism of the mismatch, Profs. Balganesh and Menell provide an in-depth case study of ALI’s efforts to restate the Copyright Act’s distribution right. As they explain, the interpretation of the distribution right has been subject to significant interpretive controversy. With the rise of peer-to-peer file sharing in the early 2000s, the distribution right was the subject of massive litigation. While some courts interpreted a violation of the distribution right narrowly to require proof that sound recordings placed in a share folder were actually downloaded by a third party, other courts read it broadly so that merely “making available” a sound recording through a peer-to-peer network could constitute a violation. As argued by Profs. Balganesh and Menell, the legislative history of the Copyright Act demonstrates Congress’ intention for a broad reading of the distribution right. This legislative history was not considered by a court until the Tenth Circuit’s opinion in Diversy v. Schmidly, where the court held that the distribution right included liability for “making available” copyrighted works to the public. This same interpretation was also reached by the Copyright Office in a 2016 report prepared at the request of the House Subcommittee on Courts, Intellectual Property & the Internet.

At its core, Profs. Balganesh and Menell criticize ALI’s draft of the distribution right for not presenting faithfully all the pertinent interpretive sources and instead improperly stepping into the role of a judge by making an interpretive decision itself. Despite it’s claiming not to do so, Profs. Balganesh and Menell argue that the draft intentionally put aside a meaningful discussion of the legislative history to adopt an interpretation of the distribution right that rejected the “making available” approach to liability. Further, in its formulation of its black-letter law, the draft relied solely upon court decisions interpreting the statute prior to the Diversy decision, where the legislative history was not understood, and at no point presented the language of the statute itself. Despite their raising of these concerns to ALI, Profs. Balganesh and Menell state that ALI only “double[d] down,” committing to its textualist interpretation while “purporting not to take a position.”

Proposed Remedies for the “Mismatch”

To remedy the mismatch in the current project, Profs. Balganesh and Menell first propose that the Restatement should modify its perspective. In the traditional model, Restatements purport to speak from the perspective of an “excellent common-law judge.” When it is extended to statutory areas of law, however, Profs. Balganesh and Menell argue that this perspective is inappropriate. As statutory interpretation relies on the discretion of judges, a black-letter rule prescribing a singular interpretation of the statutory language steps beyond the role of a Restatement to only clarify the law. Profs. Balganesh and Menell propose that the Restatement should instead act to aid judges in exercising their discretion by providing them with a forthright explication of the materials that inform statutory interpretation, such as an overview of the relevant legislative history or interpretive approaches by other courts.

Second, Profs. Balganesh and Menell propose an update to the Restatement template. Keeping with the idea from Mr. Lewis’ report, Profs. Balganesh and Menell propose that the traditional black-letter law section of the Restatement be replaced with the actual and complete text of the statutory provisions. They then propose that the Restatement lay out sources of interpretation available to a judge in the context of the statute. Since interpretation begins with the text of the statute, placing the text front and center, then followed by relevant interpretive tools, respects the role of a judge while ultimately aiding in the interpretive exercise. Last, Profs. Balganesh and Menell propose reworking the preamble to the Restatement of Copyright as an objective primer to the history surrounding the Copyright Act’s formation. Due to the complex and unique history surrounding the Act’s evolution, Profs. Balganesh and Menell argue that such a preamble would allow an interpreter from the outset to see some of the relevant tools and sources that could be used in interpreting its provisions.

Tags ALI, American Law Institute, case study, common law, copyright, distribution right, Diversy v. Schmidly, history, Peter Menell, Restatement of Copyright, Restatements, Ryan Reynolds, Shyamkrishna Balganesh, statutory law, William Draper Lewis

Ninth Circuit Narrows Copyright Owner’s Ability to Receive Multiple Statutory Damages Awards

Post author By Joshua Grove
Post date March 17, 2021

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

By Liz Velander

A recent Ninth Circuit ruling limits the amount a copyright owner can be awarded in statutory damages. In Desire v. Manna, the court found that the Copyright Act only lets owners collect a single award per infringing work in cases with joint and several liability. It held that the Act does not authorize multiple statutory damages awards where one infringer is jointly and severally liable with all other infringers, but the other infringers are not completely jointly and severally liable with one another. Its decision reduced the district court’s award of statutory damages from $480,000 to $150,000.

The facts of the case are as follows: Desire, a fabric supplier, purchased a floral textile design and registered it with the U.S. Copyright Office in June 2015. A few months later, Desire sold a few yards of fabric bearing the design to Top Fashion, which it used to secure a garment order from a clothing retailer. When Desire and Top Fashion later disagreed on the price for more fabric, Top Fashion took the design to rival supplier Manna. Manna then passed the design along to an independent designer, who in turn gave it to a textile manufacturer with instructions to modify it. Manna registered a copyright in the resulting altered design with the U.S. Copyright Office in December 2015.

Manna began selling fabric bearing the altered design to various manufacturers, which used it to create garments that they sold to various clothing retailers. Desire sued Manna, the manufacturers, and the retailers for copyright infringement. As alleged, Manna infringed Desire’s copyright by selling fabric bearing the altered design to the manufacturer defendants. The manufacturer defendants then each allegedly committed a separate ac of infringement in their sales to the individual retail defendants, who in turn allegedly committed acts of infringement in their sales to consumers. Desire did not allege that the manufacturer defendants infringed in concert, nor that the retail defendants acted in concert to infringe Desire’s copyright.

The district court granted partial summary judgment for Desire. It concluded that Desire owned a valid copyright entitled to broad protection and that there were no triable issues of fact as to Desire’s ownership of the initial design or Manna’s and others’ access to it. But there remained issues of triable fact as to whether the altered design was substantially similar to the original and whether defendants willfully infringed. The district court held that if Desire prevailed on these issues, the supplier would be entitled to seven statutory damages awards with joint and several liability imposed amongst Manna, the manufacturer defendants, and the retail defendants.

A jury returned a verdict for the plaintiff, finding that Manna, Top Fashion, and one other defendant, manufacturer ABN, willfully infringed the initial design, and that two other defendants, manufacturer Pride & Joys and retailer 618 Main, innocently infringed. Desire elected to claim statutory damages in lieu of actual damages, as permitted under 17 U.S.C. § 504(c)(1). Under § 504(c), a statutory damage award is limited to $30,000 for innocent infringement and $150,000 for willful infringement.

The jury awarded Desire statutory damages totaling $480,000 after two defendants settled. The district court divided liability under its pre-trial ruling as follows:

1. $150,000 against Manna individually, for copying the design and distributing the fabric bearing the altered design to the manufacturer defendants.

1. $150,000 against Manna and Top Fashion jointly and severally, for Top Fashion’s sale of infringing garments.

1. $150,000 against Manna and ABN jointly and severally, for ABN’s sale of infringing garments.

1. $20,000 against Manna and Pride & Joys jointly and severally, for ABN’s sale of infringing garments to 618 Main.

$10,000 against 618 Main, Pride & Joys, and Manna jointly and severally, for 618 Main’s display and sale of infringing garments to consumers.

The parties appealed. The Ninth Circuit affirmed in part, reversed in part, and vacated the judgment awarding Desire multiple awards of statutory damages. The court began by affirming the district court’s determinations at summary judgment that Desire owned a valid copyright and that the original design was entitled to broad copyright protection. But the Ninth Circuit concluded that the district court erred by permitting multiple statutory damages awards.

The Ninth Circuit looked at the text of § 504(c)(1) to determine whether it authorizes multiple statutory damages awards where one infringer is jointly and severally liable with all other infringers, but the other infringers are not completely jointly and severally liable with one another. § 504(c)(1) permits an owner to recover “an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally.”

The Court concluded that the plain meaning of § 504(c)(1) precludes multiple awards of statutory damages when there is only one work infringed by a group of defendants that have partial joint and several liability among themselves through a prime tortfeasor that is jointly and severally liable with every other defendant. It reasoned that “an award” clearly means one award, and the use of the word “any” means that, if all infringers in the action were jointly and severally liable with at least one common infringer, then all defendants should be treated as one unit.

In this case, Manna was alleged to be the tortfeasor lynchpin. Because “‘an award’ clearly means one award,” and Manna was jointly and severally liable with every other defendant, Desire was entitled to only one statutory damage award per work. The court concluded that its interpretation was most consistent with the Copyright Act’s goal of providing adequate compensation for infringement without giving copyright owners a windfall. However, it acknowledged that its ruling could also run afoul of the purposes of the Act if a copyright owner decided to sue separate infringers in separate actions.

The court wrote in a footnote that “if Manna were not involved at all and Pride & Joys, ABN, and Top Fashion had independently infringed, there could be three awards, even though Pride & Joys, ABN, and Top Fashion were each jointly and severally liable with others in their separate distribution chains. . . . This view treats groups of jointly and severally liable defendants that are not jointly and severally liable with other groups identically to individually liable infringers.”

In a lengthy dissent, Judge Wardlaw disagreed with the majority’s interpretation of § 504(c)(1). She explained that the majority’s decision means “a copyright plaintiff can seek only one award of statutory damages when it joins in a single lawsuit members of independently infringing distribution chains that trace back to a common infringing source. But if the plaintiff brings separate lawsuits against each infringer, or it simply cuts the common source defendant at the top of the chain out of the case, a separate statutory damages award is available against each defendant.”

The majority ultimately decided that such risk was outweighed by the potential for disproportionate awards and the fact that multiple lawsuits could still be filed (and consolidated), regardless of the Court’s ruling on this point. “But even if we are wrong in our appraisal of the multiple-lawsuit risk, as our approach is the only one consistent with the text of Section 504(c)(1), it is not our job to reweigh the merits of several possible approaches.” Given the stark differences in the majority and the dissent regarding the language of § 504(c)(1), this decision could form the basis for further splits and result in an en banc or certiorari petition.

Tags § 504(c)(1), copyright, Copyright Act, Copyright Office, damages, design, infringement, Judge Kim McLane Wardlaw, Liz Velander, Ninth Circuit, statutory damages

Senate IP Subcommittee Considers the Role of Private Agreements and Existing Technology in Curbing Online Piracy

Post author By Joshua Grove
Post date January 28, 2021

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

By Liz Velander

In mid-December, the Senate Intellectual Property Subcommittee, led by its Chairman, Senator Thom Tillis (R-NC), held a hearing entitled “The Role of Private Agreements and Existing Technology in Curbing Online Piracy.” The hearing came ahead of Sen. Tillis’s release of his first discussion draft of legislation to reform the Digital Millennium Copyright Act (DMCA). In his opening remarks, Sen. Tillis stated that reforming the DMCA is one of his top priorities in the 117th Congress, but it may take his entire second term to get a DMCA reform bill across the finish line. The purpose of the hearing was to identify voluntary steps that copyright owners and tech companies can take now to curb online infringement.

The hearing consisted of two panels. Panel I included: Ruth Vitale, CEO, CreativeFuture; Probir Mehta, Head of Global Intellectual Property and Trade Policy, Facebook, Inc.; Mitch Glazier, Chairman and CEO, Recording Industry Association of America (RIAA); and Joshua Lamel, Executive Director, Re:Create. Panel II included: Katherine Oyama, Global Director of Business Public Policy, YouTube; Keith Kupferschmid, CEO, Copyright Alliance; Noah Becker, President and Co-Founder, AdRev; and Dean Marks, Executive Director and Legal Counsel, Coalition for Online Accountability.

Sen. Tillis began the hearing by voicing his opinion on the matter, informed by a year-long series of hearings and months of feedback from creators, user groups, and technology companies. “There is absolutely more big tech can and should do to stop online piracy,” Sen. Tillis said. “Unfortunately, it seems that some in big tech aren’t serious about stopping online piracy, and I don’t know why that is. Maybe it isn’t a priority—or maybe some companies are actually profiting off the piracy on their site. It is clear as day to me that many multi-national, multi-billion-dollar companies simply aren’t using all the tools they have to stop theft from small creators. And that’s wrong.”

Mitch Glazier, Chairman and CEO of RIAA, stated that the problem is that big tech companies aren’t properly incentivized to take steps in combatting online piracy. Keith Kupferschmid, CEO of the Copyright Alliance, explained that Section 512 of the DMCA has been so misinterpreted by the courts that most service providers know that they have little risk of liability and need only do the absolute minimum required under the DMCA to avoid liability.

Mr. Glazier said that one of the most important things Congress can do is to provide the right incentives to encourage voluntary private agreements. He explained that there are two types of private agreements. First, there are individual agreements entered into by copyright owners and technology providers. These can be nimble and evolve with technology. Second, there are standards developed in the marketplace that eventually achieve broad enough consensus and use that they become required. In Mr. Glazier’s view, that is what the DMCA contemplated—a multi-stakeholder standard technical measure (STM) process where there was enough consensus and use that it would be unfair for outliers to compete without using them. Mr. Glazier said that a voluntary system only works if there exist the right incentives, which the DMCA does not currently provide.

The panelists disagreed as to whether Congress needs to reform the DMCA in order to incentivize voluntary agreements. The panelists representing big tech companies asserted that the process is working as the DMCA intended, pointing to the policies and procedures of their platforms and existing content protection technology. Probir Mehta, Head of Global IP and Trade Policy at Facebook, touted Facebook’s content management tool, Rights Manager. Katherine Oyama, Global Director of Business Public Policy at YouTube, pointed to Youtube’s Copyright Management Tools, which include a webform, Content ID, and Copyright Match. These panelists emphasized the significant amount of work their companies undertook to create these technologies, which they view as going above and beyond the requirements of the DMCA.

Members of the IP Subcommittee were very interested to hear how these tools work in practice. Ruth Vitale, CEO of CreativeFuture, testified that most individual creators are not given access to YouTube’s Content ID, nor are they given an explanation for why they are denied. Ms. Oyama stated that while Content ID has eligibility requirements, YouTube built an entirely new tool for smaller creators, Copyright Match, which runs on Content ID itself. She claimed that Content ID is such a powerful tool that, if used improperly, will erroneously take down content that is noninfringing.

Ranking Member Senator Chris Coons (D-DE) wanted to know what the panelists viewed as the path forward. Mr. Kupferschmid said that while voluntary agreements have a role, they cannot address everything. He emphasized that legislative action is appropriate in this circumstance because service providers are not being cooperative. Noah Becker, President and Co-Founder of AdRev, a digital rights management and media technology company, agreed with Mr. Kupferschmid. He explained his business’ revenue-sharing proposition is a better fit for copyright owners that do not want to use YouTube’s monetization tools. In addition to legislation, he explained that there should be some sort of support for the concept of a list of approved vendors, like AdRev, to be able to access copyright APIs on massive platforms. He urged that this would reduce the large cost and technology burden of accessing APIs, making takedowns more affordable for creators.

Sen. Tillis closed the hearing by stating that the parties need to engage with one another in order to avoid a potential legislative overreach. He said that the hearing showed that tech companies must do more to combat online piracy. Sen. Tillis stressed that they have the tools and resources but must find ways to get greater engagement and create voluntary paths to prevent Congress from paving less voluntary ones.

Tags Chris Coons, Congress, Dean Marks, Digital Millennium Copyright Act, DMCA, hearing, Joshua Lamel, Katherine Oyama, Keith Kupferschmid, Liz Velander, Mitch Glazier, Noah Becker, piracy, Probir Mehta, Ruth Vitale, Senate Intellectual Property Subcommittee, Thom Tillis

USPTO-DOJ Workshop on Promoting Innovation in the Life Science Sector: Day One Recap

Post author By Joshua Grove
Post date January 12, 2021

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

night view of Washington, D.C. By Colin Kreutzer

This past fall, the United States Patent and Trademark Office (USPTO) hosted a joint workshop with the Department of Justice (DOJ) entitled Promoting Innovation in the Life Sciences Sector and Supporting Pro-Competitive Collaborations: The Role of Intellectual Property. Nyeemah Grazier and Brian Yeh (USPTO Office of Policy and International Affairs (OPIA)) emceed the day’s events, which focused on the impact of patents and copyrights on collaboration and innovation in the life sciences sector. The goal was to promote dialogue between members of the innovation and legal communities working in the life sciences sector to combat the COVID-19 pandemic. Video of day one of the workshop is available here, and our summary of day two is available here.

Opening Remarks

In his opening remarks, Andrei Iancu (USPTO Director and Under Secretary of Commerce for Intellectual Property ) discussed the main purpose of the workshop—to find ways of accelerating American innovation in the life sciences. “Our goal is to enhance collaboration among innovative companies and researchers to solve one of the most vexing health problems we have faced as a country in the past century.” He highlighted the ongoing collaboration between the USPTO and DOJ as “truly innovative.”

Director Iancu also emphasized the positive impact of the patent system on our economy and quality of life throughout American history. He cited the discovery and development of insulin treatments as an example of how innovations have alleviated suffering and helped treat diseases. As an economic example, he noted the massive biopharmaceutical company Amgen, whose co-founder Dr. Marvin Caruthers had once told him that patents are so critical to life sciences development that, without them, the U.S. “would not have a serious biotechnology industry.” Finally, Director Iancu pointed out a number of pandemic-era efforts that the USPTO has undertaken to keep innovation moving forward.

Session I: The role of patents in research and development of therapeutics, diagnostics, and vaccines, particularly during pandemics

In the first session of the day, Ms. Genia Long (Senior Advisor, Analysis Group) gave a presentation on the relationship between patents and innovation, and the value of innovation in improving the diagnostic and therapeutic arena of public health.

Ms. Long explained that technological innovation is a key determinant of economic and public health progress. Disease and morbidity rates have consistently declined over the last thirty years for many serious illnesses such as heart disease, cancer, HIV, and hepatitis. Much of the overall increase in life expectancy in the United States is attributable to pharmaceutical developments. These sorts of improvements are expected to continue into the future, so long as we continue to incentivize and support development in cutting-edge technologies such as gene and cell therapies.

Ms. Long built on Director Iancu’s comments about the core reason that patents are essential in drug development. The cost of developing a drug is extremely high, while the cost of copying a successful drug is very low. Without granting pharmaceutical companies a limited period of exclusivity in which their costs may be recovered, those massive R&D investments are guaranteed to be a losing bet. Realizing this in advance, of course, companies would choose not to make such investments in the first place. And we would have to do without many of the life-enhancing treatments that we now enjoy.

Ms. Long also discussed the importance of collaboration between all government actors who play a role in this innovation ecosystem. In addition to the patenting process, FDA approval takes a large part of the time and money in bringing a drug to market. The Hatch-Waxman Act provided a patent restoration period, adding time to the end of a patent life to compensate for time lost while seeking approval. But the market exclusivity period has remained steady at about 12 to 13 years. Meanwhile, patent challenges from generic drug makers have increased dramatically. Collaboration is important because pharmaceutical patents are “embedded within a larger and somewhat complex system of rules and incentives which act together to yield market results.”

Session II: Update on USPTO guidance on patentability of life science inventions

Next, Ali R. Salimi (Senior Legal Advisor, Office of Patent Legal Administration (OPLA), USPTO) gave an overview of the most recent USPTO guidance to examiners on disclosure and subject matter eligibility analysis.

Mr. Salimi first discussed the rather convoluted history of patent eligibility under 35 U.S.C. § 101. In brief, the Supreme Court has developed a set of judicial exceptions to the four statutory categories of patent-eligible subject matter: process, machine, manufacture, and composition of matter. The Court views these exceptions as necessary to prevent the basic tools of scientific and technical work from becoming inaccessible. As currently written, those exceptions are laws of nature, natural phenomena, and abstract ideas.

Mr. Salimi outlined the 2012-2014 decisions in Mayo v. Prometheus, AMP v. Myriad Genetics, and Alice Corp. v. CLS Bank, as well as the responses by the USPTO in updating its guidance to examiners. The final result was the 2019 updated patent eligibility guidance (PEG) version of the Alice-Mayo test.

The current form of the test is given in a flow chart shown at 42:50 of the video presentation. Step One of the test asks whether the claim is directed to a statutory category. If so, Step Two then asks if a judicial exception renders the claim ineligible—if the claim does recite a judicial exception, it will still satisfy §101 so long as it integrates the exception into a practical application and recites “additional elements that amount to significantly more” than the exception.

Mr. Salimi finished by briefly discussing the three disclosure requirements under § 112: written description (whether the disclosure demonstrates that the inventor actually had possession of the invention), enablement (whether the description enables a person of ordinary skill to make and use the invention), and best mode (whether the inventor knows and discloses the best mode of carrying out the invention).

Overall, he says the 2019 PEG has been well received by both examiners and practitioners, and it has done much to further the goals of clarity and certainty in patent prosecution.

Session III: Life science patents in practice

In this session, two speakers shared their own experiences with how the patent system protects inventions in the life sciences, promotes innovation and facilitates collaboration in life sciences.

David E. Korn (VP of Intellectual Property and Law at PhRMA) spoke first. As a representative of a trade association of leading biotech firms, he elaborated on the concerns about recovering large investments made in the prior remarks of Director Iancu and Ms. Long.

Mr. Korn explained that not only is the drug development process lengthy and costly, but it is also uncertain. Discovery of an active compound is just the beginning. It is followed by initial laboratory and animal testing. If successful, the developer may file an Investigational New Drug (IND) application and begin phase I and phase II clinical trials. This is followed by larger and longer phase III trials involving thousands of patients. If that is successful, the developer may file a new drug application (NDA) to the FDA and seek approval. Only after this process is the drug ready, and drugs can fail at every step along the way. Mr. Korn said the cost of developing a successful drug can be as much as $2.6 billion when accounting for unsuccessful candidates. He likened the process to a rocket mission in which “everything needs to work perfectly at each stage.”

Moreover, Mr. Korn continued, R&D doesn’t stop after FDA approval. There is ongoing research into new forms, new indications, methods of delivery, and multiple therapies. All of these innovations require additional investment and further FDA approval. He credited a number of laws with supporting pharma innovation and collaboration, including the Hatch-Waxman Act, the Orphan Drug Act, and the Bayh-Dole Act.

Next, Dr. Gaby Longsworth (Director, Sterne Kessler Goldstein & Fox) discussed life sciences patents from the perspective of a practicing patent attorney. Patents do more than allow drug developers to recoup their investments. By offering an alternative to holding information as a trade secret, they allow for more open collaboration and licensing in order to “build a common innovation instead of battling it out in litigation.” Patents can also be sold or used as collateral for a bank loan, providing research incentives and support to smaller companies.

First, Dr. Longsworth gave an overview of the three main forms of small molecule drug applications under the Federal Food, Drug, and Cosmetic Act. An NDA can be filed under § 505(b)(1) for new drug compounds, as well as new formulations or indications of an existing drug. A second type is found under § 505(b)(2), known as the paper NDA, for modifications of previously approved drugs based on safety and effectiveness data of the prior drug. Finally, there is the Abbreviated NDA (ANDA) under § 505(j). This is a duplicate application used by generic manufacturers, and it relies on studies provided in the NDA for the original drug.

Next, Dr. Longsworth discussed the general protection strategies of drug innovators. One goal is to build a strong blocking patent. She explained the importance of understanding the different types of patents available when drafting the application in order to obtain claims that will not be easily designed around. Another goal is to create a patent thicket to deter competition. It can become very difficult and expensive for generic competitors to file an ANDA when there are many patents to analyze, and it becomes more difficult for competing innovators to mount successful attacks at the Patent Trial and Appeal Board.

Panel Discussion I: Are changes to U.S. patent law needed to better support innovation in life sciences and the development of COVID-19 solutions?

After hearing several presentations on the effect of economic incentives on innovation, a panel discussion addressed the question of whether changes are needed to improve innovation, collaboration, or access to medicines. Moderated by Director Iancu, the panel featured: The Honorable Paul R. Michel (Chief Judge, U.S. Court of Appeals for the Federal Circuit (CAFC) (Ret.)), Steven Caltrider (VP and General Patent Counsel, Eli Lilly & Co.), Karin Hessler (Assistant General Counsel, Association for Accessible Medicines (AAM)), Arti Rai (Elvin R. Latty Professor of Law and Director, Center for Innovation Policy, Duke University School of Law), Corey Salsberg (VP, Global Head IP Affairs, Novartis), Hans Sauer (Deputy General Counsel and VP, Biotechnology Innovation Organization), and Hiba Zarour (Head of IP Department, Hikma Pharmaceuticals).

Judge Michel noted the problems with uncertainty in § 101 eligibility of patent claims, which he referred to as a “systemic failure” of the courts. If businesses and venture capitalists cannot reliably predict whether a claim will survive § 101, there is less appetite for investment in R&D, less commercialization, and ultimately fewer new medicines. He credited the 2019 USPTO guidance as an improvement but lamented that the Federal Circuit had not gone along with it. The best hope for clarity would not come from the courts, he said, but through new legislation.

Mr. Salsberg noted that from a medical standpoint, the two most important elements for getting through the pandemic are innovation and collaboration. He said the patent system is the reason we entered this pandemic with “libraries of millions of novel compounds that are ready to test right now.” Likewise, it is why we have the tools to sort through these compounds and identify those that can help with COVID-19.

Speaking for generic manufacturers, Ms. Zarour argued that innovation is not solely dependent upon IP protection: “Innovation will happen.” And while previous speakers had argued that it increases innovation, she cited a study from the Swiss Federal Institute of Intellectual Property that found an upper limit on the benefits of patent protection. At a certain point, the stifling effects of IP protection outweigh the benefits of incentivizing investments. She proposed a solution in which the initial patent for a drug would grant the inventor a period of exclusivity (e.g., 15 years) but subsequent or ancillary patents to the same drug would go into a pool that could be voluntarily licensed. This would strike a balance between the need for innovation with the need for access, and it could prevent the “evergreening” of drug patents.

Ms. Hessler also advocated for such a balance. She agreed that strong innovation incentives are responsible for the thousands of COVID-19 compounds that are already in late-stage clinical trials. At the same time, she used an example previously cited by Dr. Longsworth—a 1,000-patent thicket for a biologic manufacturing process—to argue that excessive protection can unduly impede medical access. She mentioned a proposal to cap the number of patents that can be inserted into the biologics patent dance as being a potential solution.

Ms. Hessler also said that settlement of patent litigation is becoming increasingly difficult due to “a patchwork of inconsistent regulations” and disagreement between state and federal laws. Legal settlements can expedite access of generic and biosimilar drugs by over a decade. Mr. Caltrider agreed that the settlement issue is of great importance, and that states such as California are creating laws that interfere with the federal world of patents.

Mr. Sauer said that collaboration is important in biotech because many companies in that field are small. Licensing and technology transfer are critical to the proper function of our biotech ecosystem. The small innovators must have a secure means of profitably transferring their technology to the larger manufacturers who are better equipped to fully develop and deliver the product to the public.

Mr. Caltrider pointed out that the USPTO has remained open for business since the very beginning of the COVID pandemic. Touching on the initiatives that Director Iancu had mentioned in the opening remarks, he praised the certainty and reliability of our patent system as essential to keep “the machinery working” to promote collaboration and innovation.

Prof. Rai pointed to a recent DOJ business review letter which declined to raise antitrust issues over a collaboration between large manufacturers of monoclonal antibodies. She said that from a COVID perspective, the patent system has been doing great. But she echoed Judge Michel’s remarks about § 101, calling the situation a “mess that needs to be fixed.” Finally, she described a forthcoming study on biologics litigation and a proposal regarding manufacturing process patents that are filed after FDA approval.

Session IV: Copyright and innovation in the life sciences

The final sessions of the day shifted to the role of copyright law in the life sciences. Session IV include three short presentations from: Michael W. Carroll (Professor of Law and Faculty Director, Program on Information Justice and Intellectual Property (PIJIP), American University Washington College of Law (WCL)), Mark Seeley (Consultant, SciPubLaw LLC and Adjunct Faculty, Suffolk University Law School), and Bhamati Viswanathan (Affiliate Professor, Emerson College).

Ms. Viswanathan began with a brief overview of copyright law and the balancing act it performs. Most people think of copyrights in terms of music and literature, but it can also protect software, databases, and other compilations of information. Like the patent system, one goal of copyright law is to promote innovations and investment in copyrightable works. And like patents, there exists an issue of balancing the incentive of ownership rights with access to those works. In the scientific community, copyright law seeks to balance the tendency for sharing and collaboration with the rights of the creators of original works.

Mr. Seely discussed two areas of scientific interest that are protected by copyright: scientific journals and searchable data repositories. He says that scientific knowledge is most valuable “when it is organized, standardized, updated, and indexed.” Publishers of scientific data are a crucial component of the current effort against COVID-19 because they provide useable data about known drugs, potential reactions, and other adverse events. By combining “published content, patents, with tactical mining capabilities and analytics,” these works support the pipeline of new treatments.

Prof. Carroll talked about the manner of distributing research outputs within the copyright system. The internet age has brought opportunities for vast dissemination of information. The challenge presented by open access movements has been in finding ways to utilize the internet’s potential while still protecting the IP rights of authors. Open access promotes innovation because it increases exposure of publications to readers beyond those within the narrow discipline from which the publications come, sparking new ideas in an interdisciplinary environment. It also provides information to under-resourced readers in low-income areas or developing nations. Prof. Carroll presented the standardized copyright licenses he helped develop with the Creative Commons organization, which allow authors to choose the particular terms and conditions under which their works are reused or distributed.

Panel Discussion II: Copyright discussion: Enhancing access to life science: How copyright can create incentives or barriers to building data or information pools, and related licensing

Session IV led immediately to a panel discussion by the presenters. Moderator Susan Allen (Attorney-Advisor, OPIA, USPTO) led a discussion of the role of copyright in disseminating information and supporting licensing models.

COVID-19 has resulted in many publishers voluntarily releasing relevant copyrighted information. Asked how this would affect publishing systems long term, Mr. Seeley was doubtful of any major impact. But he noted that downloads of information were much higher due to this change. If society decides, after the fact, that the emergency release was highly beneficial, it could impact future decisions about information sharing.

Prof. Carroll took the increase as an affirmation that open access systems are helping to fill an unmet need. He added that the pandemic has accelerated another trend towards the growth of pre-print servers—publication vehicles for preliminary results and yet unreviewed materials—but noted the growing pains associated with a public that is not accustomed to this type of early information sharing: “clinically actionable unreviewed results that then make it into the media can actually be harmful.”

Asked what role the government can play in supporting copyrights and information sharing, each panelist weighed in. Mr. Seeley said it’s important that governments do more than mandate certain types of publication and sharing—it should be coupled with funding to help make it happen. Prof. Carroll pointed to the recommendations he and others presented as part of the National Academies of Science, Engineering, and Medicine. He echoed Mr. Seely’s call for better funding of information infrastructure such as repositories, as well as better standardization. Ms. Viswanathan voiced support for initiatives like the Open Science Policy Platform (OSPP) and said she would like to see more empirical research on the impact that it has on business models of various stakeholders.

Closing Remarks

In closing, Mr. Yeh thanked the participants and encouraged all to tune in for day two of the conference, which would “explore different ways to expedite the development and use of therapeutics, diagnostics, and vaccines through competition, collaboration, and licensing.”

Tags Andrei Iancu. COVID-19, DOJ, intellectual property, life sciences, pandemic, USPTO

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

Post author By Joshua Grove
Post date December 28, 2020

the word "copyright" written on a typewriter The 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.

Tags affirmative defense, burden of proof, Campbell, ComicMix, copyright, Dr. Seuss, fair use, Lydia Loren, market harm, Ned Snow, presumption, Sony

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