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Copyrights

Copyright Claims Board Clarifies Service Rules and Opt-Outs

by Jodi Benassi | Mar 17, 2022 | Copyrights

The US Copyright Office issued two final rules for how companies can designate agents to receive claims and how libraries can preemptively opt out of claims before the Copyright Claims Board (CCB). The agency has been drafting rules governing the CCB since it was established in 2020. The new venue is designed to serve as an alternative forum where parties may voluntarily seek to resolve certain copyright claims regarding any category of copyrighted work.

Companies Can Designate Subsidiaries as Agents of Service

Section 37 CFR § 222.6 (Designated service agents) becomes law effective April 7, 2022. This forthcoming rule will allow corporations, partnerships and unincorporated associations to use the same designated agent for process of service for separate legal entities under their direct or indirect common control. This rule will also allow companies with many subsidiaries to designate one service agent for each of its affiliates.

Libraries and Archives Can Preemptively Opt Out

Section 37 CFR § 223.2 (Libraries and archives opt-out procedures) becomes law effective April 8, 2022. Under this new law, a library or archive that wishes to preemptively opt out of participating in CCB proceedings may do so by submitting written notification to the CCB. The notification must certify that the library or archive qualifies for the limitations on exclusive rights under 17 U.S.C. 108, which provides that it is not an infringement of copyright for a library or archive, or any of its employees acting within the scope of their employment, to reproduce a single copy of a work under certain conditions.

Class Action Opt-Out Procedures

Section 37 CFR § 223.3 (Class action opt-out procedures) becomes law effective April 8, 2022. Under the new law, if a party to an active CCB proceeding receives notice of a pending or putative class action arising out of the same transaction or occurrence as the proceeding before the CCB in which the party is a class member, that party may either opt out of the class action or seek written dismissal of the proceeding before the CCB within 14 days of receiving notice of the pending class action.

Paradise Lost: Art Created by AI Is Ineligible for Copyright Protection

by Jodi Benassi | Mar 3, 2022 | Copyrights

The US Copyright Office Review Board (“Board”) rejected a request to register a computer-generated image of a landscape for copyright protection, explaining that a work must be created by a human being to obtain a copyright. Second Request for Reconsideration for Refusal to Register A Recent Entrance to Paradise (Copyright Review Board Feb. 14, 2022) (S. Perlmutter, Register of Copyrights; S. Wilson., Gen. Counsel; K. Isbell, Deputy Dir. of Policy).

In 2018, Steven Thaler filed an application to register a copyright in a work named “A Recent Entrance to Paradise.” Thaler listed as the author of the work the “Creative Machine,” a computer algorithm running on a machine. Thaler listed himself as a claimant and sought to register the work as a “work-for-hire” as the “owner” of the Creative Machine. The Board refused to register the work, finding that it lacked the necessary human authorship. Thaler requested reconsideration, arguing that the “human authorship requirement is unconstitutional and unsupported by either statute or case law.”

After reviewing the work a second time, the Board found that Thaler provided no evidence of sufficient creative input or intervention by a human author. The Board refused to abandon its longstanding interpretation of the Copyright Act, as well as Supreme Court and lower court precedent, that a work meets the requirements of copyright protection only if it is created by a human author. The Board concluded that “A Recent Entrance to Paradise” lacked the required human authorship and therefore affirmed refusal to register. Thaler filed for a second reconsideration.

The Board found that Thaler’s second request for consideration repeated the same arguments as his first request. Relying on the Compendium of US Copyright Office Practices (the Office’s practice manual), the Board found that Thaler provided neither evidence that the work was a product of human authorship nor any reason for the Board to depart from more than a century of copyright jurisprudence.

The Board explained that the Supreme Court of the United States, in interpreting the Copyright Act, has described a copyright as the exclusive right of a human and her own genius going back to 1884. The Board noted that the Supreme Court has repeatedly articulated the nexus between the human mind and creative expression as a prerequisite for copyright protection. The human authorship requirement is further supported by the lower courts. For example, in 1997 the US Court of Appeals for the Ninth Circuit held in Urantia Found. v. Kristen Maaherra that a book containing words “‘authored’ by non-human spiritual beings” can only gain copyright protection if there is “human selection and arrangement of the revelations.”

The Board further explained that federal agencies have followed the courts. In the 1970s, the National Commission on New Technological Uses of Copyrighted Works (CONTU) studied the creation of new works by machines. CONTU determined that the requirement of human authorship was sufficient to protect works created with the use of computers and that no amendment to copyright law was necessary. CONTU explained that “the eligibility of [...]

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2022 IP Outlook Report: The Developments Shaping Copyright Law

by Christina (Tina) L. Martini, Jodi Benassi and Anisa Noorassa | Feb 22, 2022 | Copyrights

Key Takeaways and Outlook for 2022

Like so many things in 2021, a few long-awaited copyright developments have spilled into 2022, with anticipated amendments to key provisions in the Digital Millennium Copyright Act topping the list of legislation to watch.

The key issues we are tracking include the following:

Read the full report.

Change the Look of the Room: Appeal Transferred to Federal Circuit

by Amol Parikh | Jan 6, 2022 | Copyrights, Trademarks

The US Court of Appeals for the Second Circuit transferred an appeal of a preliminary injunction enjoining alleged copyright and trademark infringement to the US Court of Appeals for the Federal Circuit because the operative complaint included six counts of patent infringement and thus arose under patent law. Hudson Furniture, Inc. et al. v. Lighting Design Wholesalers Inc., Case No. 20-3299 (2d Cir. Dec. 21, 2021) (Livingston, CJ; Kearse, Lee, JJ.) (per curiam).

Hudson filed a complaint against Lighting Design alleging patent, trademark and copyright infringement. The district court granted Hudson’s preliminary injunction and enjoined Lighting Design from alleged infringement of Hudson’s copyrights and trademarks. The district court also denied Lighting Design’s motion to dismiss for lack of personal jurisdiction and its motion for reconsideration permitting alternative service of process. Lighting Design appealed the rulings to the Second Circuit.

Hudson asked the Second Circuit to dismiss the appeal, arguing that the appeal arose from a complaint involving patent law claims and thus fell under the exclusive jurisdiction of the Federal Circuit. Under 28 U.S.C. §§ 1292 and 1295, the Federal Circuit has exclusive jurisdiction over interlocutory appeals involving any action that arises under any act of US Congress relating to patents. An action arises under patent law when a well-pleaded complaint establishes that (1) federal law creates the cause of action or (2) the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal patent law.

The Second Circuit agreed that exclusive jurisdiction rested with the Federal Circuit, explaining that the operative complaint included six counts of patent infringement, and the appeal concerned the district court’s ruling on a motion for injunctive relief involving patent law and non-patent law claims. The Court rejected Lighting Design’s argument that patent law did not constitute a substantial part of the overall success of the case since Hudson failed to secure preliminary injunctive related to the patent law claims. The Court explained that Lighting Design’s argument focused on only the second basis for Federal Circuit jurisdiction (whether the right to relief depends on a “substantial question” related to patent law). The Court found that even if it accepted Lighting Design’s argument, the fact that federal patent law created the cause of action was sufficient to establish Federal Circuit jurisdiction under the first basis of jurisdiction. While the Second Circuit agreed with Hudson, it declined to dismiss the appeal and instead opted to transfer the appeal to the Federal Circuit because the original appeal was timely filed in good faith and transferring the appeal was in the interest of justice.

Copyright Office Solicits Comments on Deferred Examination Option

by Amol Parikh | Dec 23, 2021 | Copyrights

The US Copyright Office announced a public study to evaluate the merits of providing an option to defer examination of copyright registration materials until a later request by the applicant. Deferred Registration Examination Study: Notice and Request for Public Comment, 86 Fed. Reg. 70540 (Dec. 10, 2021). To aid in the effort, the Copyright Office is soliciting public comments, which are due by January 24, 2022.

Copyright protection automatically attaches to an original work of authorship as soon as it’s created and fixed in tangible form. Although registration is optional, the US Copyright Act provides significant incentives to encourage registration, which only occurs after the Copyright Office examines the work and determines that it is copyrightable. This process can often take many months. In 2019, the Supreme Court of the United States held that a lawsuit for copyright infringement can be brought only after the Copyright Office registers the copyright. Fourth Estate v. Wall-Street.com, Case No. 17-571 (US March 4, 2019) (Ginsburg, Justice).

There is currently no option to delay or defer examination of submitted application materials. In an effort to modernize its technological infrastructure, the Copyright Office has previously solicited public input concerning the registration process. Respondents have submitted various proposals involving a deferred examination proceeding, some of which included:

Allowing applicants to submit application materials at a discounted fee
Delaying examination but still intaking information about the work into the public catalog
Allowing formal examination to determine whether the work should be registered at a later time for an additional fee
If the work is registered, attaching statutory benefits with an effective date of when the original materials were received.

Commenters have indicated that benefits of permitting deferred examination include more registrations, more timely registrations, expansion of the public record, improved efficiency by removal of the examination step, decreased processing times, lower expenses and more deposits available for the Library of Congress’s collections.

In May 2021, Senator Thom Tillis, the ranking member of the Senate Judiciary Subcommittee on Intellectual Property, sent a letter to the Copyright Office requesting a study on the feasibility, benefits and costs of creating a deferred examination option for an application, including whether an applicant can obtain an effective date of registration upon submission and deposit while choosing to defer examination until a later time. He also asked the Copyright Office to consider whether statutory changes might be necessary to enable such an option.

In order to assess the viability of including a deferred examination option, the Copyright Office is inviting written comments on various subjects, including:

The deficiencies in the current registration process
The potential benefits and drawbacks of a deferred examination option
The possible legal or regulatory framework for the option
The impact of such an option on the Copyright Office, the Library and the ability to bring a lawsuit based on Fourth Estate
Whether the same goals that deferred examination is meant to achieve could be accomplished through alternative [...]

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What a Deal! Car Dealers Retain Control over Their Own Data

by Jodi Benassi | Nov 11, 2021 | Copyrights

The US Court of Appeals for the Ninth Circuit affirmed a district court’s conclusion that there is no conflict between an Arizona statute aimed at strengthening privacy protections for consumers whose data is collected by car dealers and the Copyright Act provision that grants the owner of a copyrighted work the exclusive right “to reproduce the copyrighted work in copies.” CDK Global LLC v. Mark Brnovich, et al., Case No. 20-16469 (9th Cir. Oct. 25, 2021) (Miller, J.)

Car dealers use specialized dealer management software (DMS), which at its core is a database containing information about a dealer’s customers, vehicles, accounting, parts and services. Some of the data includes personal information, such as social security numbers and credit histories. The data is used for a variety of tasks, from financing to inventory management. Dealers also rely on separate software applications for various aspects of their business, such as marketing and customer relations. For those applications to properly function, they must access the data stored in a dealer’s DMS.

CDK is a technology company that licenses DMS to dealers. In the past, CDK allowed dealers to share access to the DMS with third-party companies that would integrate data from the DMS with other software applications. Recently, however, CDK began to prohibit the practice and instead offered its own data integration services to dealers.

In 2019, the Arizona legislature enacted a statute, known as the Dealer Law, to ensure that dealers retain control over their data. There are two provisions of the Dealer Law central to this case. First, the statute prohibits DMS providers from taking any actions (contractual, technical or otherwise) to prohibit a dealer’s ability to protect, store, copy, share or use the data stored in its DMS. Second, the statute requires DMS providers to adopt and make available a standardized framework for the exchange, integration and sharing of data.

CDK sued the attorney general of Arizona for declaratory and injunctive relief, asserting a range of claims. In one of its claims, CDK argued that the Dealer Law is preempted by the Copyright Act, 17 U.S.C. § 101 et seq. CDK asserted that the Dealer Law conflicts with the Copyright Act because the Dealer Law grants dealers and their authorized integrators the right to access CDK’s systems and create unlicensed copies of its DMS, its application programming interfaces (APIs) and its data compilations. CDK argued that in all three respects, the statute conflicts with 17 U.S.C. § 106(1), which grants the owner of a copyrighted work the exclusive right “to reproduce the copyrighted work in copies.” The district court dismissed most of the claims but allowed the copyright preemption claims and a few others to proceed. Following a hearing, the district court denied a preliminary injunction. CDK appealed.

On appeal, the Ninth Circuit found that CDK presented no evidence that the Dealer Law would require the embodiments of CDK’s DMS to persist for a period of more than transitory duration. The Court explained that the reproduction right set forth in [...]

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US Copyright Office Expands Rights to Repair Software-Enabled Devices

by Joshua Revilla | Nov 11, 2021 | Copyrights

The US Copyright Office issued new regulations expanding and strengthening consumers’ rights to repair software-enabled digital devices (such as video game consoles and medical devices) via exemptions to the Digital Millennium Copyright Act.

Under 17 U.S.C. § 1201, it is generally unlawful to “circumvent a technological measure that effectively controls access to” copyrighted works. In response to proposals from several organizations, including the Electronic Frontier Foundation and the iFixit and Repair Association, the Registrar of Copyright (as it has done every three years since 2000) made rulemaking recommendations to the Librarian of Congress; recommendations that have now been adopted as final rules. The new rules create exemptions to make it easier to repair software-enabled devices. In the prior rulemaking sessions, the Register of Copyrights recommended—and the Librarian of Congress adopted—17 groups of exceptions. This session, the Register recommended 14 additional classes of exemptions, all of which have been adopted.

Among the 14 classes of exemptions that were recommended and adopted are the following:

Computer programs that operate the following types of devices, to allow diagnosis, maintenance and repair:
- Motorized land vehicles or marine vessels
- Devices primarily designed for use by consumers
- Medical devices and systems.

This proposed class initially included “modification” in addition to diagnosis, maintenance and repair, but the exemption for modifications was ultimately eliminated. The Register reasoned that including all “modification[s]” would encompass both infringing and noninfringing activities and would implicate the right to prepare derivative works, as well as other issues.

This proposed class, “Computer Programs – Repair,” was initially divided into four general categories: “(1) all software-enabled devices; (2) vehicles and marine vessels; (3) video game consoles; and (4) medical devices and systems.” Not all of the categories made it through, as the Register removed all software-enabled devices from the recommendations. The recommendations stated that this category would have made the class too broad and would have raised the complex question of which types of devices would qualify for permitted repair.

After consideration of all the issues, the Register determined the following three classes had sufficient commonalities to recommend them: Computer programs in devices primarily designed for use by consumers (such as the repairing of optical drives in video games), computer programs in marine vessels and computer programs and data in medical devices and systems. The adopted exemptions expanding the current exemptions for vehicle and device repair and added an exemption for medical devices and systems repair.

The Rules also expand exemptions for consumer-related devices only. In recommending exemptions for device repair, the Register found significant commonalities among uses and users in terms of the diversity of software-enabled devices designed for use by consumers. The Register determined that the narrowed uses of “diagnosis, maintenance, and repair” were supported by the fair use factors, and that the exemption was “not accomplished for the purpose of gaining access to other copyrighted works.” The recommendations also contained a special subset for video games, which narrows the exemption solely to the repair of optical drives. [...]

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Oh the Horror: No Work for Hire in Friday the 13th Screenplay

by Joshua Revilla | Oct 14, 2021 | Copyrights

The US Court of Appeals for the Second Circuit affirmed a summary judgment grant, ruling that an author was an independent contractor when writing the screenplay for a horror film and entitled to authorship rights, and therefore entitled to exercise his copyright § 203 termination right. Horror Inc. v. Miller, Case No. 18-3123 (2d Cir. Sept. 30, 2021) (Carney, J.)

Victor Miller is an author who has written numerous novels, screenplays and teleplays. Sean Cunningham is a producer, director and writer of feature films and is the general partner of Manny Company. Miller and Cunningham were close friends who began working together around 1976 and collaborated on five motion pictures in their first five years working together. Miller was a member of the Writers Guild of America, East (WGA) and was a signatory of their Minimum Basic Agreement (MBA), which was the collective bargaining agreement at the time.

In 1979, the success of the horror film Halloween inspired Cunningham to produce a horror film. Cunningham reached out to Miller and they orally agreed that Miller would write the screenplay for their upcoming project. The two came to an agreement using the WGA standard form. Miller then began developing the screenplay and the two worked closely together in discussing ideas for the film. Miller picked his working hours but was responsible for completing drafts based on the production schedule of the film. Cunningham had no right to assign additional works to Miller beyond the screenplay.

The dispute concerns whether, for Copyright Act purposes, Miller was an employee or independent contractor of Manny Company, of which Cunningham was the general partner. Cunningham argued that he taught Miller the key elements of a successful horror film, that he gave significant contributions and that he had final authority over what ended up in the screenplay. Miller agreed that Cunningham gave notes but stated that Cunningham never dictated what he wrote. The parties agreed that Cunningham did provide the ideas for making the movie killings “personal,” that the killer remain masked and that they kill a major character early. Miller received “sole ‘written by’ credit” as the screenwriter.

Horror Inc. (successor to Georgetown Horror) financed the project and was given complete control over the screenplay and film. Manny assigned its rights in the film and screenplay to Horror, which registered the copyrights. In the registration, Horror was listed as the film’s work made for hire author with a credit given to Miller for the screenplay. The initial film was a huge hit and has spawned 11 sequels.

In 2016, Miller attempted to reclaim his copyright ownership by invoking his termination rights under 17 U.S.C. § 203 and served notices of termination to Manny and Horror. The two responded by suing Miller and seeking a declaration that the screenplay was a “work for hire,” and therefore Miller could not give a valid termination notice. The district court granted summary judgment to Miller, stating that Miller was the author as he did not prepare the screenplay as [...]

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Copyright Claims Board’s Proposed Rulemaking: How to Initiate and Respond to a Claim

by Jodi Benassi | Oct 7, 2021 | Copyrights

In January 2021, Congress enacted the Consolidated Appropriations Act. This legislation incorporates the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2020, which includes revisions to the Copyright Act with the goal of creating a new venue for copyright owners to enforce their rights without having to file an action in federal court. The new venue, called the Copyright Claims Board (CCB), is designed to serve as an alternative forum where parties may voluntarily seek to resolve certain copyright claims regarding any category of copyrighted work.

On September 29, 2021, the US Copyright Office issued proposed rules in the Federal Register to establish the initial stages of a proceeding before the CCB. The proposed rules prescribe how to file a complaint, a process that includes submitting claim and notice forms online and paying a $100 filing fee. The proposed rulemaking notes that the claim form will require less information than what is required under Federal Rules of Civil Procedure, Rule 12, as practice before the CCB will be less complex than practice in federal courts according to the Copyright Office.

After a claim is filed, a copyright claims attorney will review the claim to ensure compliance with applicable regulations. If the claim is approved, the claimant can proceed to serve the claim within 90 days. If the claim is not approved, the claimant has 30 days to file an amended claim. Counterclaims are subject to the same review process. To pass review muster, the claim must “clearly state a claim upon which relief can be granted.” § 224.1.3. Under the proposed rules, a copyright claims attorney must review the claim or counterclaim for unsuitability on the grounds set out in 17 U.S.C. § 1506(f)(3). If the copyright claims attorney concludes that the claim should be dismissed as unsuitable under CASE he or she shall recommend that the CCB dismiss the claim and set forth the basis for that conclusion. The proposed rulemaking notes that the CCB wants to avoid hearing overbroad or clearly implausible claims.

The respondent will have 60 days to opt out after receiving notice of the claim, or it will lose the opportunity to have the dispute decided in a federal court. The proposed rulemaking prescribes that the initial notice form, provided by the CCB, be similar to a summons and would require the claimant to identify the nature (i.e., infringement, noninfringement or misrepresentation) of the claims being asserted. If the respondent does not respond or opt out within 20 days after the claimant files a proof or waiver of service, then the CCB will send a second notice to supplement the initial notice by mail and email. A respondent can opt out online, using a CCB form or by mail.

All comments to the proposed rulemaking must be received no later than October 29, 2021, 11:59 pm EDT.

A Tale of Two Authors: Determining Ownership Rights of Novels Adapted for Theatre

by Tim Dunker | Sep 30, 2021 | Copyrights

The US Court of Appeals for the First Circuit vacated the district court’s opinion and order that Roberto Ramos Perea, the playwright who adapted the novels of prominent Puerto Rican author Enrique Laguerre for theatre, was not a proper copyright owner. Perea v. Editorial Cultural Inc., Case Nos. 19-2119, -2129 (1st Cir. Sept. 13, 2021) (Thompson J.) The issue before the Court was whether Editorial, a publishing company, was liable for copyright infringement after it printed and sold 20,000 copies of the theatrical adaptations of two novels (La Llamarada and La Resaca) written by Laguerre and adapted by Ramos.

In 2001, Laguerre contracted with Producciones Teatro Caribeño, authorizing Ramos to create the adaptation of La Resaca and retain the moral rights (protecting the link between Ramos and his work). The parties again contracted in 2003 for the adaptation of La Llamarada. Laguerre and Editorial entered into a contract in 2002 that gave Editorial the right to print “one edition” of the “dramatic adaptation of La Resaca” for seven consecutive years from the first printing date. Editorial received the right to print up to 25,000 copies of La Llamarada (the novel) in exchange for royalties.

During the district court action, both sides moved for partial summary judgment on the infringement claim. Editorial argued that, pursuant to the Laguerre-Caribeño contracts, Laguerre reserved the printing rights to the adaptations to himself exclusively, and Ramos therefore was not entitled to damages for infringement. Ramos argued that he owned the copyrights in the the adaptations and was entitled to recover for infringement because “(1) Laguerre authorized Ramos to create the Adaptations, therefore those creative works belong to him, or, alternatively, (2) La Resaca and La Llamarada were in the public domain when the Adaptations were written (meaning they were available for public use) and as such Laguerre’s authorization was not required.” The district court eliminated the playwright, Ramos, as the copyright owner and, following a jury trial, entered a judgment against Editorial Cultural awarding damages to Laguerre’s heirs. In dismissing Ramos’ claim, the district court exclusively relied on the language of the Laguerre-Caribeño contracts, under which Laguerre retained publishing rights. The issue on appeal involved which party owned the publishing rights to the adaptations when Editorial sold them in 2013.

The district court did not consider whether the novels were in the public domain when Ramos created his adaptations. Under the 1909 Copyright Act, works created before 1978 retained copyright protection for 28 years (plus an additional 28 years if renewed). The novels were written in 1935 (La Llamarada, not renewed) and 1949 (La Resaca, never registered in the Copyright Office). The First Circuit explained it is clear that both novels had passed into the public domain well before the contracts were signed.

Reviewing the summary judgment orders de novo, the First Circuit found that when Ramos adapted the novels into the play scripts in 2001 and 2003, Laguerre had no copyright interest in either of these novels (or any work derived from them) and [...]

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