On July 27, Google Inc. asked U.S. Circuit Judge Denny Chin to dismiss a lawsuit from the Authors Guild over the company’s plan to digitize books and provide excerpts through their search engine service. Google filed a motion seeking dismissal and arguing their actions fall under fair use and also provide a benefit to the public and the authors themselves. The Authors Guild also filed for summary judgment. Both parties’ motions are set for oral argument on Oct. 9.
The case has been ongoing since The Authors Guild, along with The American Society of Media Photographers and other parties, sued Google in 2005 claiming the company’s plan to create an online literary database was carried out without permission from copyright holders. Google estimated it has already scanned more than 20 million books and posted excerpts from over 4 million. The process began when Google entered agreements with public and university libraries to digitize and upload information for their Google Books service. So far, Google says works have been scanned from Harvard University, Oxford University, Stanford University, the University of California, the University of Michigan, and the New York Public Library. Judge Denny Chin began hearing the case as a trial judge and has retained jurisdiction after being elevated to the Federal Appeals Court in 2010.
The Authors Guild believes that Google’s actions constitute massive copyright infringement. Google argues, however, that their Google Books service actually furthers the objectives of copyright law by providing significant public benefits. Google believes their service even provides a benefit to the authors themselves and argues the authors have failed to prove Google Books displaced any book sales whatsoever. Google Books, the company argues, actually makes the authors’ works more easily available and may have even increased sales. Additionally, Google argues that Google Books constitutes fair use since it creates significant benefits without diminishing the value of the copyrighted works in question.
Previously, in March 2011, Judge Chin rejected a $125 million settlement reached between the plaintiffs and Google. While this may seem unreasonable, the Judge believed the proposed settlement was far too broad. Judge Chin accused Google of using the settlement to implement a business plan that would leave them with a monopoly to copy works without permission. The settlement went beyond the bounds of the litigation and would strengthen Google’s control over the search engine market. The United States, Amazon.com, and Microsoft had raised antitrust concerns following the first proposed settlement. Further talks to reach an alternate settlement between the parties were unsuccessful. In May, the judge granted class-action status to the plaintiffs, allowing photographers and graphic artists to join the suit.
The Kirtsaeng case follows the Supreme Court’s December 2010 decision in Costco Wholesale Corp. v. Omega, which centered on the first-sale doctrine, which usually entitles the owner of a lawfully produced copyrighted work to resell it without permission from the copyright holder. The Supreme Court split 4-4, with Justice Elena Kagan not taking part. The court did not issue a written opinion, but held that the first-sale doctrine did not apply to foreign goods. The Second Circuit’s Kirtsaeng decision relied on the Supreme Court’s Costco ruling.
In the present case on appeal, Supap Kirtsaeng, a graduate student at the University of Southern California, sold John Wiley textbooks on eBay. The books were purchased in Asia by his family and friends and shipped into the U.S. to be sold on eBay. The Second Circuit upheld a verdict against Kirtsaeng and held that the first-sale doctrine only applied to goods manufactured in the U.S. The decision by the Second Circuit may have some strange implications that give foreign manufacturers greater control over their products than U.S. manufacturers. In particular, the Association of Art Museum Directors is concerned that museums may be barred from displaying foreign works of art.
According to the brief, the American museums believe they could lose their ability to acquire and display foreign-made, copyrighted pieces. Under the ruling, the museums argue, any gallery that displays a foreign work is potentially infringing on a copyright. The museums were long protected under Section 109, but would now have to rely on fair-use arguments with little precedent.
The museums also argue that any foreign works protected by copyright law should also be subject to the law’s limitations. Section 109 limits the protections under the Copyright Act by allowing owners to manage lawful copies of a copyrighted work without permission from the copyright holder. Normally, public performance without permission is a clear violation of copyright, but Section 109(C) provides an exception for owners of lawful copies:
(c) Notwithstanding the provisions of section 106 (5), the owner of a particular copy lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to display that copy publicly, either directly or by the projection of no more than one image at a time, to viewers present at the place where the copy is located.
This exception allows museums to display works publically without obtaining a license from the copyright holder, a practice that could be prohibitively expensive. The museums may have no choice when it comes to foreign art, however, since the Second Circuit ruled that Section 109 applies only to American-made works. In addition to being wildly expensive, licensing could be impossible for museums when the copyright holder is unknown or unavailable.
One argument made in the amicus brief is that Section 104 of the Copyright Act makes all eligible works subject all protections and limitations of the act. There is no distinction for works based on origin in the act; therefore, Section 109 limits the rights of every copyrighted work, regardless of where it was produced. The court below, according to the brief, erred by finding that the text of Section 109 was ambiguous. Instead of finding ambiguity and selectively interpreting the text of the Copyright Act, the court should have read Section 104 as establishing that all protections, remedies, and limitations of the entire Copyright Act apply to all works and all copies by extension.
The brief also argues that the broad interpretation of Section 109 does not conflict with Quality King Distribs., Inc. v. L’anza Research Int’l, Inc., 523 U.S. 135, 150 (1998). In that case, the Supreme Court left open the possibility that all copies that receive protection under U.S. law are subject to the limitations of Section 109. The exception for foreign works, the museums argue, is a result of unnecessary judicial interpretation. The brief argues that no foreign work should receive more or less than a domestic work since there is no clear grant in the statute, since, in the few times Congress has prescribed special treatment for foreign works, they have done so with explicit language. For example, the brief argues that Congress could have chosen the words “lawfully made in the United States,” rather than “lawfully made under this title,” for Section 109. Therefore, there is no reason to interpret the statute differently for foreign made works than for domestic ones.
In its conclusion, the brief pleads for the Supreme Court to reverse the decision below. The museums believe that the court should find that if the copyright owner authorized the first distribution abroad, then imported foreign copies can be distributed or publicly displayed within the U.S. without permission. Doing so would preserve the statutory exception that allows museums across the country to display works of art without fear of unnecessary copyright litigation.
In Dish Network LLC v. American Broadcasting Cos et al, a U.S. District Judge in Manhattan, Laura Taylor Swain, granted a motion by Fox to dismiss copyright and contract claims by Dish. The claims result from Dish’s new AutoHop feature, which allows viewers to skip commercials. In order to achieve a more favorable ruling, Dish filed preemptively in New York, only hours before claims by CBS, Fox, and NBC were filed in California. Dish’s New York dispute involves ABC, CBS, Fox, and NBC.
After the judge’s ruling, the issue will be tried in both New York and California on several different issues. Dish’s claims against Fox, and copyright claims against CBS and NBC were all dismissed to be heard in California. Dish’s contract claims against CBS and NBC, however, will proceed in New York since the companies failed to assert those claims in California. All claims by Dish against ABC also remain in New York.
Dish filed the suit in New York District Court primarily to preempt suits by CBS, Fox, and NBC in California. In fact, the networks filed suits against Dish in Los Angeles only hours after the New York case was filed. The networks are concerned that Dish’s ad-skipping feature will result in a severe decline in advertising and believe that it violates their copyrights and licensing agreements with Dish.
In court, Dish argued that the case should be tried in New York since they filed first and the contracts with ABC and CBS required it. Dish’s New York filing sought a declaratory ruling that their AutoHop service does not violate copyright law, but the judge said Dish did not specify the copyright or licensing agreements that may have been violated. The judge also said that part of the claim belonged in California and that Dish filed primarily to avoid a case there. As a result, the judge believed Dish’s filing was improperly anticipatory and dismissed some of the claims. The judge also ordered the parties to coordinate the trials to avoid inefficiencies.
Dish likely tried to have the case litigated in New York partly because of a favorable Second Circuit ruling in Manhattan. In Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), the court granted summary judgment for Cablevision that their proposed RS-DVR system did not infringe as reproductions or public performances. In examining the potential audience, the court found that single subscribers using a DVR did not constitute a Public Performance. Presumably, Dish thought this ruling made New York a more favorable venue to hear the copyright issues that arise from their DVR’s AutoHop capability.
In the trial, Dish will also rely on the Supreme Court’s ruling in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). Known as the “Betamax Case,” the Supreme Court decision ruled that individual time shifting or recording complete television programs constitutes fair use. The court held that VCR manufacturers could not be held liable for infringement, and the case has been at the center of recent technological copyright issues like file sharing. While there is a clear parallel between VCRs and DVRs, Dish’s case is complicated by the AutoHop’s alteration of the broadcast since, in the original Betamax ruling, the court noted that the entire work was merely reproduced at a different time in its entirety. Dish has maintained, however, that the AutoHop does not alter the broadcast signal or delete commercials. According to Dish, the AutoHop skips commercials by fast-forwarding them, not by removing them.