Copyright/Intellectual Property

The Challenges facing Print Media: Is Copyright Reform part of the Answer?

20 August 2017

From Hugh Stephens Blog:

This year Canada is required to review and potentially update its copyright legislation. The passage of the Copyright Modernization Bill in 2012 included a statutory five year review. That formal review has not yet begun—it is scheduled to start in late fall—but in the meantime other work that could impact the review of copyright law is taking place. Among these are the cultural policy review that Heritage Minister Melanie Joly has committed to undertake, and a review on media industries, conducted by the Parliamentary Standing Committee on Canadian Heritage.

. . . .

In Canada, as elsewhere, daily newspapers are dying on the vine. (One blog predicts that most British papers will cease print editions before the end of the 2020s). The Standing Committee reported that the number of daily papers in Canada had dropped from 122 to 102 over the past five years. Employment in the Canadian media sector has dropped by 16,500 jobs since 2008, almost half of them in print. The same phenomenon has taken place in the US, UK and other countries. In the broadcasting sector, while it is still profitable, local news coverage (which for most broadcasters in Canada is a condition of licence) has declined in quality and quantity.

The crux of the problem, widely known, is that the advertising dollars that in the past supported print journalism and linear television broadcasting have migrated rapidly online. But more than just shifting online, the bulk of those revenues have not gone to the content creators, but instead to the content indexers and aggregators, and social media platforms.

. . . .

In the words of Duff Jamison, of the Alberta Weekly Newspapers Association;

“I do think that copyright laws were designed before we had this mass digital distribution of content. They probably need to be reviewed and brought up to date…. We put in a possible suggestion. If you click through to a journalist’s story, then at that point perhaps that journalist and the newspaper that employs him should receive a payment. There are ways to get at this.

The two companies, the two oligarchs really, Facebook and Google, take 75% of the digital revenues in Canada. It’s an enormous amount. That’s money that once underpinned our business model. There needs to be some approach through copyright… Is there some way of enacting that type of regulation, which would allow for a better split between the Googles and the Facebooks and the newspapers that are actually generating that content? A great deal of Internet traffic is going to news sites.”

He was echoed by Bob Cox, Chair of the Canadian Newspaper Association;

We need updated copyright laws to protect original work. Papers invest heavily in original journalism, which is then shared, reused, and rewritten by others, often for commercial gain, because the two-decades-old fair dealing law does not take into account the ease of digital reproduction. If newspapers were compensated for their original content and the investment was protected for longer, it would be a significant boost to our revenues.”

Link to the rest at Hugh Stephens Blog and thanks to Paul for the tip.

Share

Surveying the Law of Emojis

17 August 2017

From an article abstract at SSRN:

Everyone loves emojis! It’s easy to see why. Historically, most online communications have emphasized text, and emojis add much-needed emotional content to text-driven communications—and often help people express themselves more precisely.

. . . .

First, questions about what emojis mean will arise in a wide range of legal doctrines, from criminal law to contracts. Our standard interpretative tools generally can handle new communicative technologies, but several aspects of emojis will require careful consideration. Most significantly, senders and receivers will unexpectedly see different versions of an emoji due to technological intermediation, leading them to make reasonable—but different—interpretations of the same communication, with potentially adverse consequences for one or both parties. The article will explore some steps that would reduce the risks of these misunderstandings.

Second, emojis will often qualify for copyright and trademark protection. However, IP protection encourages platforms to differentiate their emoji implementations, which exacerbates the risks of miscommunications and misunderstandings. To mitigate this outcome, IP protections for emojis should be interpreted narrowly.

Link to the rest at SSRN, where you can download the entire paper

Speaking of copyrights covering emojis, following is Paragraph F from Apple’s Pages Software License Agreement:

F. Content and Digital Materials. Title and intellectual property rights in and to any content displayed by or accessed through the Apple Software belong to the respective content owner. Such content may be protected by copyright or other intellectual property laws and treaties, and may be subject to terms of use of the third party providing such content. Except as otherwise provided in this License, (i) this License does not grant you any rights to use such content nor does it guarantee that such content will continue to be available to you, and (ii) you may not use, extract or distribute, commercially or otherwise, on a standalone basis, any photographs, images, graphics, clipart, artwork or similar assets (“Digital Materials”) contained within, or provided as a part of, the Apple Software or Services (including but not limited to any Digital Materials contained within templates, themes or user guides and tutorials), or otherwise use the Digital Materials outside the context of its intended use as part of the Apple Software.

Here’s a link to the Software License Agreement if you would like to read all 254 pages. 🙂

Share

Copyright and the Historical Record

16 August 2017

From Copyhype:

Lawyers rely on history a lot in practice. Common law itself is built on history—we rely on precedent—and when we are interpreting statutory and constitutional provisions, we’ll often turn to history to find insights and help us guide our interpretation.

But, of course, there’s always a danger with using history. Someone who’s trying to make a point may try to find evidence in the historical record to support that point, so there’s a danger of abuse. And perhaps there’s no period more prone to this type of myth and mischief then the Founding period, the period beginning after the end of the Revolutionary War, through the drafting and ratification of the Constitution, and through the first Congress. Because this is when the Constitution was drafted, so a lot of people discussing hot-button topics will try to look at the historical record from the Founding era to find some support for the positions that they are advancing.

And that’s true for copyright law as well, because the constitution does authorize Congress to enact copyright legislation—as well as patent legislation in the same clause, but I’ll be focusing here on copyright (though there is some overlap).

One of the unfortunate trends that a few people have observed is that supporters of a more minimalist copyright, of drawing back the current scope of copyright protection and enforcement, have been trying to advance this narrative that the Founding Fathers would be appalled if they looked at copyright law today, that they intended something completely different from what we see in the statute and in practice.

For example, a few years ago the Electronic Frontier Foundation wrote an article in response to some comments, saying, “Don’t be so sure you’ve got the Founders on your side.” They said, “We suspect that if anyone had described today’s copyright system to, say, Thomas Jefferson, he would have been shocked.”

Instead they advance this alternate narrative, which goes something like this: the Founders conceived copyright for a very narrow utilitarian purpose; authors’ interests aren’t at the central part of this equation; and they are only given protections begrudgingly through a narrow government privilege in order to advance this narrow utilitarian purpose.

The problem is when I look at the historical record that we have in front of us, I don’t see a lot of evidence for this view. Instead, I see evidence for something different about what the Founders intended.

Very briefly, I think it’s good to get some context of the timeline we’re looking at here before delving into the details. The Revolutionary War ends, and the Continental Congress is put together. Around the early 1780s, a number of authors started asking the states to pass copyright legislation. Chief among them was Noah Webster, whose dictionary bears his name, and he was lobbying a number of state legislatures to pass copyright legislation, along with others like John Ledyard, who petitioned the Connecticut General Assembly. In 1783, Connecticut was the first of the states to pass its own copyright legislation.

. . . .

That brings us to the drafting of the Constitution. By August 6 during the Constitutional Convention, there was a first draft. It did not mention copyright or patent law in it, but in the middle of August, James Madison proposed that Congress does have the power to pass copyright and patent legislation, and that was added without debate—or without controversy—and sent to the Committee on Style, which came up with the language that we see today in Article I, Section 8, Clause 8.

So why did they include copyright? Why did the Founding Fathers think copyright was important enough both at the state level and eventually to be given to the federal congress in order to enact? I think we could get some idea if we turn to the proponents who were pushing for copyright. When Noah Webster wrote a letter to one of the Connecticut representatives in favor of passing copyright legislation, he said, “America must be as independent in literature as in politics, and as famous for arts as for arms.” In the same fashion, Joel Barlow, when he wrote to the delegates of the Confederate Congress, said, “America has convinced the world of her importance in a political and military line by the wisdom energy and ardor for liberty which distinguish the present era. A literary reputation is necessary in order to complete her national character. And she ought to encourage that variety and independence of genius in which she is not excelled by any nation in Europe.”

So they thought this was important for the country as a whole, to complete its national character, and set it on equal stage among its international brethren.

. . . .

So the idea was that we’ll give property rights to authors, we’ll create a market for these types of expressive and cultural works, and this will induce people to create these types of great works for the benefit of the public.

Property, of course, was central to the Founding Fathers in general. John Adams famously said, “Property must be secured, or liberty cannot exist.” Property was really important, and they saw copyright as a type of property. By giving authors these exclusive rights, it enabled this marketplace for creative works. This is consistent with other things you hear. When the Continental Congress recommended to the states, the Committee that made that recommendation said they were “persuaded that nothing is more properly a man’s own than the fruit of his study and that the protection and security of literary property would greatly tend to encourage genius, to promote useful discoveries, and to the general extension of arts and commerce.”

Link to the rest at Copyhype

Share

Extra copyright for news sites

18 July 2017

From Julia Reda:

Article 11 of the proposed EU copyright reform/expansion

. . . .

Commission proposal

Anyone using snippets of journalistic online content must first get a license from the publisher. This new right for publishers would apply for 20 years after publication.

Example:
The automatic link previews social networks generate when users share links (showing the article headline, a thumbnail picture and a short excerpt) would require a license, as well as anyone analysing news content on the web like news aggregators, media monitoring services and fact checking services.

Intent:
The Commission wants to generate income for European publishers by allowing them to charge internet platforms for displaying snippets of their content to users. Stated targets are Google, Facebook, Twitter and Pinterest, who use such snippets in the course of linking to news articles.

. . . .

Consequences

  1. Likely to fail: This is an attempt to replicate at an EU level an idea that already 
failed badly in Germany and Spain – only applied more broadly and longer. The German law is likely about to be pronounced invalid in court, while the Spanish one “clearly had a negative impact on visibility and access to information in Spain” (EPRS). Journalists certainly never saw additional remuneration.
  2. Attack on the hyperlink: Because readers need to know what a link leads to before clicking, sites almost always include a snippet of the linked-to content as part of a link. Any limitation on snippets is therefore a limitation on linking.
  3. Limiting freedom of expression and access to information: This provision would restrict not just businesses, but also individuals who publish news snippets, e.g. bloggers. Because a neighbouring right, unlike a copyright, doesn’t require originality to apply to content, it would protect even short and uncreative snippets, such as purely factual headlines.
  4. Boosting fake news: Making it legally risky or expensive to link (with snippets) to news risks disincentivising the sharing of reputable news content. Since “fake news” and propaganda outlets are unlikely to charge for snippets, their content could as a result become more visible on social networks.
  5. News-related startups discouraged, even though this sector is in particular need of innovation and experimentation to find new business models, ways of reaching audiences, fact-checking and combating fake news etc., as technology advances.
  6. Small publishers disadvantaged: Aggregators create a level playing field for independent publishers with less brand recognition to reach audiences.

Link to the rest at Julia Reda

Share

Photographer Broke Due to Copyright Lawsuit by Monkey

17 July 2017

From PetaPixel:

Remember David Slater, the photographer whose camera was hijacked by a monkey and used for a series of selfies that went viral on the Internet? The photographer has spent years fighting a copyright battle in court over the photos, and now he’s broke.

The Guardian reports that the 52-year-old photographer has run out of funds and is now considering coaching tennis and walking dogs as ways to earn a living.

After the original monkey selfie photos went viral on the Web, a takedown request was sent on Slater’s behalf to a publication that shared the images. This sparked a huge debate on whether or not Slater even owned the copyright to the photos, since technically the monkey was the one who shot the images.

Wikipedia took a stand for the monkey, arguing that the photo is in the public domain since it was captured by the monkey and not Slater. PETA then filed a lawsuit against Slater on the monkey’s behalf to have the copyright assigned to the monkey.

The US Copyright Office stated in 2014 that it can’t assign copyright to animals, and a judge ruled in 2016 that the monkey can’t own copyright to the famous selfie.

Since then, the case has gotten bumped up to a US federal appeals court, which heard arguments this week, but Slater didn’t have the funds to attend the hearing in San Francisco and was forced to watch a livestream from his home in the UK.

Link to the rest at PetaPixel 

 

Share

Europe’s Geo-Blocking Debate: Booksellers on the Ropes

9 July 2017

From Publishing Perspectives:

To outsiders, the details of European booksellers’ argument with geo-blocking may come as a surprise.

For one thing, geo-blocking not about “portability” of ebooks and other digital products which consumers have already purchased. For another, the booksellers—at least as represented by the European & International Booksellers Federation (EIBF)—not opposed to selling e-books across borders.

What the EIBF is protesting against, however, is the EU’s proposed legislation on rollback of geo-blocking, because it forces them to sell ebooks to users in all EU countries. This requirement to service the union’s wide range of member nations’ varying taxation levels, fixed prices, and other constraints is too costly for many booksellers to bear.

In April 2017, the European Parliament issued a draft law outlining instances in which geo-blocking—restricting content sales and access to services based on the user’s location—would no longer be allowed. Included in this proposed legislation is an end to geo-blocking sales of ebooks across the EU.

Link to the rest at Publishing Perspectives and thanks to Paul at The Digital Reader for the tip.

Share

Global publishing giant wins $15 million damages against researcher for sharing publicly-funded knowledge

9 July 2017

From Privacy News Online:

It’s not every day that one of the world’s largest publishing companies is awarded $15 million in damages for copyright infringement against a site set up by a Kazakh neuroscientist. That makes the almost total lack of wider coverage of Elsevier’s win in New York against Sci-Hub surprising. But it is only the latest development in a saga that is of great interest for the deep flaws it exposes in both scientific publishing and copyright itself.

The court awarded $15 million damages to the scientific publisher on the basis of 100 articles published by Elsevier that had been made available without permission on Sci-Hub and a similar site called LibGen. At the time of writing, Sci-Hub claims to hold 62 million scientific research papers – probably a majority of all those ever published – most of which are unauthorized copies. According to a report in the scientific journal Science last year, it is Elsevier which is most affected by Sci-Hub’s activities:

“Over the 6 months leading up to March [2016], Sci-Hub served up 28 million documents. More than 2.6 million download requests came from Iran, 3.4 million from India, and 4.4 million from China. The papers cover every scientific topic, from obscure physics experiments published decades ago to the latest breakthroughs in biotechnology. The publisher with the most requested Sci-Hub articles? It is Elsevier by a long shot – Sci-Hub provided half-a-million downloads of Elsevier papers in one recent week.”

Those figures help to explain why Elsevier has been pursuing Sci-Hub doggedly for some years. Back in December 2015, the same New York judge who has just awarded the $15 million to Elsevier issued a preliminary injunction against the site’s operator. Access to the original domain – sci-hub.org – was suspended, but it carried on using a different domain. Its servers, meanwhile, remain beyond the reach of US law, since they are located in Russia. In the age of VPNs, attempts to block the site are similarly pointless.

. . . .

Most of the papers published by Elsevier and the other academic publishing houses and found on Sci-Hub were written by scientists and academics whose research grants were paid for by the public. Once written those papers were submitted to a relevant journal, where an editor or editorial board chose which ones should be considered for publication. To that end, the papers were passed to referees who scrutinized them as part of the peer review system, whereby fellow academics read the text, and judge whether it deserves to be published as is, or needs revisions and corrections. Typically, neither editorial boards nor peer reviewers are paid for their work, which is carried out as a kind of academic responsibility accepted by all as part of the job, and done for the greater good of society.

That is, most of the work writing, checking and editing a paper is carried out completely for free. The only costs that academic publishers incur are typically for production, which are limited if publication is purely digital, as is increasingly the case. Given the extremely efficient nature of the academic publishing system, it will come as no surprise to learn that leading companies in the sector – including Elsevier – have consistently achieved profit margins between 30% and 40%, levels almost unheard of in other industries.

Such elevated profit margins have come as the prices paid by academic libraries to subscribe to titles have increased rapidly. While the cost of living increased by 73% between 1986 and 2004, the expenditure by research libraries on subscriptions to academic journals went up by 273% in the same period. The trend has continued since then.

Link to the rest at Privacy News Online and thanks to Paul at  The Digital Reader for the tip.

Share

Hoopla Digital and HarperCollins Disrupt Library E-Lending

25 June 2017

From Copyright and Technology:

An announcement this week by hoopla digital and HarperCollins augurs big changes in the ways that public libraries make e-books available. It sets the stage for realignment of the relationships between publishers and libraries, and it could have longer-term ripple effects on the entire e-book market.

For more than a decade, public libraries have been able to “lend” e-books using a certain model: the library “acquires” a title through an e-lending platform such as OverDrive; the library then has one “copy” that it can make available to patrons at a time. The platform sends each patron a DRM-protected file that allows reading for up to the library’s lending period. If one patron has the e-book “checked out” then another patron can’t read it until the period expires or the first patron “returns” it.

The library technologist Eric Hellman calls this model “Pretend It’s Print (PIP),” while the industry term is “one copy, one user.” PIP is an apt term because the library pays a fixed price for the title, just as it would do if it were acquiring a print book, and the publisher can account for it much as if it were a sale. If a library wants to enable more than one patron to read the title at a time, it has to “acquire” multiple “copies.”

. . . .

Hoopla digital, an OverDrive competitor, is a digital “lending” platform for libraries run by Midwest Tape, a leading supplier of library-ready physical media products (such as CDs, DVDs, and Blu-ray discs). It had been licensing digital audiobooks from HarperCollins since last year (as well as from many indie publishers). The new deal expands the relationship into e-books. HarperCollins will make over 15,000 titles available, though apparently not including frontlist titles.

What’s new here? Instead of libraries paying a fixed upfront price, as in the PIP model, they pay per “loan,” and there are no longer any limits on how many people can read an e-book at the same time. This is a boon to library patrons: it means that all titles can be available at any time, with no waiting lists. Otherwise the reader experience is much the same as with PIP, as is the technology used to deliver and display e-books.

The innovation is really on the financial and licensing side. At a basic level, this arrangement is risky for libraries. With the hoopla digital model, Libraries can’t budget for “acquisitions” as they have done with print books for centuries; instead they have to bear less predictable costs that rise and fall with demand for titles. At the same time, it enables libraries to license long-tail titles that they wouldn’t normally “acquire” because they don’t expect sufficient demand to make the one-time price worthwhile. That’s another benefit to users.

Publishers, meanwhile, get paid based on actual readership, not on a per-title basis. That’s good for them conceptually, because it makes libraries more like channel partners. So why are publishers slow to embrace this model — which hoopla digital has offered for e-books since 2014?

One reason is author contracts. Many author contracts don’t provide for handling royalties on much other than simple book purchases. From the perspectives of rights management and royalty processing, both e-book retail and PIP library e-book revenues can be treated similarly to print book sales. Things get difficult for publishers when they license into access models that fall short of purchases: sometimes they have to pay authors for each access as if it were a purchase, even if a user only reads a few pages, because the author contracts won’t allow otherwise.

. . . .

Trade book authors typically own copyrights in their works and only license publishers for specific purposes, such as print book sales; so publishers have little flexibility to enter into innovative license agreements without having to renegotiate author contracts. And renegotiating author contracts is, to put it mildly, not scalable.

. . . .

CPC is tantamount to an e-book rental model. (When I asked Eric Hellman for a name for this model along the lines of PIP, he replied “it’s just rental.”) Some early e-book services in the U.S. offered rentals, which were met with indignant backlash from people who insisted that “ownership” was the only acceptable model — never mind that whether you actually own a downloaded e-book is debatable — and that rentals were some sort of evil plot to deprive people of their rights (although e-book rental has been successful outside the U.S., such as in Japan and South Korea). Now libraries are eagerly embracing rentals, albeit ones users only pay for indirectly through taxes; Hoopla digital has already signed up public library systems in Boston, Philadelphia, Chicago, San Francisco, and Los Angeles.

Link to the rest at Copyright and Technology 

PG says this one more problem for traditional publishers who have used publishing contracts that provide for different (usually higher) royalties for the licensing of rights than they do for the sales of physical books or the “sales” of ebooks (which Amazon and others say are “licensed, not sold” to Amazon customers by publishers).

So far, most publishers have ignored this problem (by choosing the lower royalty rate for ebooks by pretending they are sold, of course) instead of facing it by amending their publishing contracts for ebooks to clarify royalties (and hopefully raise them for authors).

PG has written extensively about this problem, for example, here and here.

Share

Supreme Court’s Lexmark Decision Expands Scope of Patent Exhaustion Defense

3 June 2017

From Fenwick & West LP:

For the fifth time this session, and following fast on the heels of its landmark decision in TC Heartland v. Kraft Foods earlier in May, the Supreme Court again reversed the Federal Circuit. The case, Impression Products, Inc. v. Lexmark International, Inc., significantly expands the scope of the patent exhaustion doctrine. The doctrine of patent exhaustion limits the rights that remain available to a patentee following the initial authorized sale of a patented item. In a 7-1 opinion issued on May 30, the Supreme Court reversed the Federal Circuit analysis concerning both domestic and foreign sales, overturning more than two decades of precedent at the lower courts. It held that “a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale.”

This case arises from a dispute between Lexmark, a manufacturer of printer cartridges, and resellers of its cartridges. Lexmark makes proprietary toner cartridges for printers, which it markets and sells both internationally and domestically. The Lexmark cartridges are sold either at full price, or at a discounted rate under its return program. Each return program cartridge carries a contractual single-use/no-resale obligation on the purchaser not to refill the cartridge with toner and reuse it. Other companies known as “re-manufacturers” acquire empty Lexmark cartridges (including ones sold under the return program) from purchasers in the United States and abroad, refill them with toner, and then resell them at lower prices.

Lexmark brought a patent infringement suit against several of these resellers. The litigation proceeded until only a single count of infringement remained against a single defendant, Impression Products. Impression Products did not contest the enforceability of Lexmark’s patents, or that the patents covered the cartridges that Impression Products imported and sold. Rather, Impression Products contested liability based solely on the defense of patent exhaustion and moved to dismiss Lexmark’s claim of infringement with respect to both cartridges sold domestically and those sold abroad.

With respect to cartridges that Lexmark sold domestically, the district court found that the doctrine of patent exhaustion barred Lexmark’s claims, even for cartridges subject to the post-sale use restrictions of Lexmark’s return program.

. . . .

Sitting en banc, the Federal Circuit ruled in favor of Lexmark on both the domestic and international exhaustion issues, holding that the neither Quanta nor Kirtsaeng overruled the limits on patent exhaustion under prior Federal Circuit case law.

. . . .

The Lexmark Court first considered the question of whether a patentee that sells a patented article domestically subject to express restrictions on a purchaser’s right to reuse or resell the product may then enforce those restrictions by bringing a lawsuit for patent infringement. In examining this question, the Lexmark Court drew heavily from its prior patent exhaustion decisions in Quanta and United States v. Univis Lens Co., 316 U. S. 241 (1942). These cases uniformly held that the first authorized sale in the U.S. of a material object terminates patent rights associated with that object and leaves a patentee without the ability, under patent law, to control the use or disposition of the product after the initial sale. These cases, however, left open the possibility that a patentee may still be able to place contractual restrictions on the use of the items it sold.

With Lexmark, the Supreme Court slammed that door shut. Indeed, all eight Justices agreed that—under the patent exhaustion doctrine—Lexmark’s sale of the cartridges extinguished the asserted patent rights, notwithstanding the contractual restrictions on reuse Lexmark attempted to place on the articles prior to sale. The Court based its decision not only on its prior patent exhaustion cases, but also on its copyright ruling in Kirtsaeng, which addressed the first sale doctrine codified at Section 109(a) of the Copyright Act. It explained its view that: “This well-established exhaustion rule marks the point where patent rights yield to the common law principle against restraints on alienation.”

. . . .

The Court noted that, while “[i]t is true that a patented method may not be sold in the same way as an article or device, [m]ethods nonetheless may be ‘embodied’ in a product, the sale of which exhausts patent rights.” Quanta also held that the patent exhaustion doctrine applied if the item sold is only a component of a device but “the incomplete article substantially embodies the patent because the only step necessary to practice the patent is the application of common processes or the addition of standard parts.” In other words, if an item “embodies essential features of the patented invention,” including method claims, and “their only reasonable and intended use was to practice the patent,” the sale of the item will exhaust the claim.

The Lexmark decision does nothing to disturb the Quanta framework. Accordingly, under the combination of Lexmark and Quanta, patent exhaustion applies where critical components of a claimed apparatus or method are sold by the patentee either domestically or internationally.

. . . .

The Lexmark Court suggested two situations where patent exhaustion may not apply.

First, because the doctrine depends on an initial sale, it may not apply where a patentee distributes a patented article pursuant to license, as opposed to in an outright sale. As the Court noted, “[a] patentee can impose restrictions on licensees because a license does not implicate the same concerns about restraints on alienation as a sale.” After all, “a license is not about passing title to a product, it is about changing the contours of the patentee’s monopoly.” By contrast, “[p]atent exhaustion reflects the principle that, when an item passes into commerce, it should not be shaded by a legal cloud on title as it moves through the marketplace.” It is, of course, common to distribute software, firmware, and other technology via license rather than sale, and thus patent exhaustion may be inapplicable for such distributions.

Second, patent exhaustion may also not apply where the unauthorized sale of a patented article occurs.

Link to the rest at Fenwick & West LP and thanks to Colleen for reminding me to post on this topic.

Colleen wondered if the Lexmark decision might have an impact on ebooks and the first sale doctrine that permits the resale of printed books by the purchasers thereof without restriction.

PG could hold forth on this topic at great length, but, in a reversal of his usual practice, he will restrain himself on this occasion.

The Lexmark decision is of interest to traditionally-published authors because it clearly distinguishes between the rights of the patent holder if a product embodying the patented apparatus is sold or if it is licensed.

If the product is sold, the patent is exhausted and the patent owner has no further rights to prevent anybody from doing almost anything with the product, including refill it. If the product is licensed, but not sold the patent holder may be able to control what happens to the product later on.

A US Circuit Court of Appeals has held that there is a distinction between licensing and sales under copyright law. PG has previously posted about this decision, FBT Productions LLC v. Aftermath Records, 621 F.3d 958 (9th Circ. 2010).

The FBT case involved the rapper, Eminem. For iTunes downloads, Eminem’s publisher was paying the same royalties as would have been due upon the sale of CD versions of the songs. Eminem contended that the relationship between the publisher and iTunes was a license of a subsidiary right, for which a much higher royalty was due under the singer’s publishing contract.

Ultimately, the court held that downloaded songs were licensed, not sold. Elements of the court’s decision were that only a single master copy of the song was provided to iTunes and Apple then made copies for downloading by the customer as opposed to Apple selling a separate CD to each purchaser.

The impact on authors comes with ebooks.

The Terms of Use for ebooks on the websites of Amazon, Barnes & Noble, Kobo, etc., say that ebooks are licensed to the purchaser, not sold to the purchaser.

For a long time prior to the Eminem case and, unaccountably, after the Eminem case, a great many publishers provided boilerplate royalty provisions that paid a percentage of the net income from each ebook sold by the publisher. Typically, this percentage is 25%. Quite often in a separate subsidiary rights section of the contract, a much higher percentage royalty is paid for the licensing of the author’s books.

The Lexmark case addresses a point of great concern to publishers – pirated copies of ebooks.

If a court were to apply the Lexmark reasoning to copyrights, the first sale of an ebook would exhaust all of the rights the publishers hold via their contracts with authors and ebooks could be freely resold on the used books market just like printed books are. If ebooks are licensed, resale of ebooks can be restricted. But higher royalty rates would seem to apply.

Finally, a bit of background – The Federal Circuit is an appeals court that only handles appeals from decisions of US District Courts on patents (plus a bunch of even more obscure items), regardless of the location of the original action.

US Circuit Courts of Appeal handle appeals of decisions within a particular geographical area, e.g. the Third Circuit Court of Appeals handles appeals of cases tried in Pennsylvania, New Jersey, Delaware, and the Virgin Islands.

Sometimes the various circuit courts of appeal issue conflicting decisions. That requires the US Supreme Court to straighten out the conflicts.

The theory behind the establishment of the Federal Circuit is that patent law is its own weird little area of the law, sometimes with a lot of technology and math thrown in, and that judges who specialize in hearing cases of that sort will usually be able to handle those appeals more efficiently.

As with the Circuit Courts of Appeal, decisions of the Federal Circuit can be appealed to the Supreme Court. The Supreme Court declines to hear most appeals from any of the lower appellate courts, however.

Lately, the Federal Circuit has gone off on a few frolics of its own and the Supreme Court has accepted more appeals in order to straight the law out.

Share

Google Is Not Going the Way of Kleenex, Cellophane, or Aspirin

20 May 2017

From Fortune:

“Google” is not generic—at least not according to a federal appeals court.

In an important trademark ruling, the 9th Circuit Court of Appeals found that “googled” may have become a synonym for Internet searching, but that doesn’t mean the company can’t protect its name.

The ruling, handed down in San Francisco this week, involved a man who registered hundreds of website names such as “GoogleDisney.com” and “GoogleBarackObama.com.” After Google persuaded Internet regulators to hand over the names, the man sued to strip Google of its trademark, arguing the word “google” had become generic.

. . . .

This has happened to other brands in the past, including Kleenex. Under federal law, anyone can wipe out a trademark—and the legal protection it offers—if they can show most of the public thinks of the mark as a common word for a good or service. This phenomenon is known as “generocide.”

But the appeals court says this isn’t the case when it comes to Google. The court reviewed evidence, including lyrics from the rapper T-Pain that say “Google my name,” to acknowledge people use the word “googled” as way to say “search the Internet.”

This isn’t enough, though, to invalidate Google’s trademark. As the court explains, people still regard Google as a brand in its own right, even if its name is also a verb.

To make the point, the appeals court cited an earlier decision involving a restaurant that replaced customers’ order for “a coke” with a non Coca-Cola beverage. In that case, Coke won the case because the restaurant failed to show people thought of cola and Coke interchangeably.

Link to the rest at Fortune

Share
Next Page »
Share