On July 3, the Library Copyright Alliance filed an amicus brief with the Supreme Court as a result of their decision to review the Second Circuit’s decision in John Wiley & Sons v. Kirtsaeng. The decision interpreted the first-sale doctrine, which allows legal owners to resell, lend, or dispose of copyrighted works after purchase, to apply only to works manufactured in the United States. As a result, foreign manufacturers have greater control over their products under U.S. law. Many organizations like libraries and museums have submitted amicus briefs urging the Supreme Court to reject this interpretation since they depend on the first-sale doctrine to operate.
In December 2010, the Supreme Court faced a similar issue in Costco Wholesale Corp. v. Omega. In that case, the Supreme Court held that the first-sale doctrine only applied to U.S. manufactured works. The unwritten ruling was based on a 4-4 split by the court. Justice Elena Kagan did not take part, since she was involved in the issue as the Solicitor General. When Kirtsaeng reaches the Supreme Court next year, however, she could be the deciding vote that finally determines the issue.
In the Kirtsaeng case, the Second Circuit upheld a jury award of statutory damages to John Wiley & Sons, after Supap Kirtsaeng sold foreign copies of their books on eBay. Kirtsaeng’s family and friends mailed him books purchased abroad, which he sold on eBay to U.S. customers. Relying heavily on the Supreme Court’s Costco ruling, the Second Circuit ruled that the first-sale doctrine did not apply since the books were manufactured abroad and that Kirtsaeng could be held liable.
While the outcome of the case certainly has important implications for public services like libraries and museums, many companies or businesses that deal in foreign-made goods, including CostCo Wholesale Corp. and the National Association of Chain Drug Stores, have also submitted briefs to the court urging them to overturn the decision. The Supreme Court’s decision has a great impact on the lawful, yet unofficial, sale and trade of goods. Also known as the gray market, these unofficial sales are a $63 billion industry. The court’s decision could cripple the industry’s ability to avoid liability for a variety of unauthorized transactions by the owners of legal copies. Much like the Library Copyright Alliance, these businesses could be exposed to litigation due to extra rights afforded to foreign manufacturers under the Second Circuit’s decision.
The libraries maintain that the decision effectively outlaws the way they operate by taking away their ability to lend any foreign books. It does not make sense, they argue, for the law to differentiate between owners’ rights merely based on the location their legitimate copies were produced. Under the Second Circuit’s interpretation, the law would also reward and incentivize sending publishing or production to other countries. The libraries believe Congress would never have intended this kind of reward for outsourcing.
According to a press release by the American Library Association, U.S. libraries currently contain over 200 million books from foreign publishers that would be in jeopardy if the decision is upheld. Even more books from U.S. publishers may have been printed elsewhere, and libraries would be in danger of copyright liability if they lent out any books that did not indicate they were printed in the U.S. While it’s unlikely that copyright holders would bring claims, the libraries do not want to engage in unlawful conduct just because the chances of getting caught are low.
The libraries would like the Supreme Court to overturn the decision and find that the “lawfully made” language in Section 109 of the Copyright Act applies to all works protected under it, but that would protect Kirtsaeng from liability under the first-sale doctrine. If the court chose not to accept this approach, the libraries urge them to adopt the Denbicare exception. The Denbicare exception, from a 1996 Ninth Circuit case, allows parties to assert a first-sale defense if foreign copies are authorized for domestic sale. This interpretation would likely result in liability for Kirtsaeng since he was not authorized to sell the books in question by John Wiley & Sons.
On May 30, 2012, a Federal District Court in New Jersey granted summary judgment to Tetris in an infringement case against Xio Interactive, Inc. for their iPhone game “Mino.” In Tetris Holding, LLC v. Xio Interactive, Inc., the judge ruled that Xio infringed upon Tetris’ copyright and trade dress. The decision is an important gain for game developers, who are often offered little protection against infringement by game studios who produce clones of popular games for profit.
Many game developers have trouble protecting their intellectual property rights against companies who create clone games to cash in on successful designs. Clones copy the look, feel, and mechanics of a popular game for a profit, but, until recently, the original developers had trouble proving these clones crossed the line into copyright infringement. Often, developers like Xio successfully argued that they copied only functional elements of the game, such as the underlying rules or theme, and not that game’s particular expression of them. The New Jersey court ruled for Tetris, however, holding that Xio’s clone copied various parts of “Tetris” that may have been acceptable individually, but, taken together, constituted infringement.
While the holding is well argued, the court may also have ruled for Tetris after Xio openly admitted to downloading Tetris’ own iPhone game when seeking to create “Mino.” While they did not copy the actual underlying coding for Tetris’ game, Xio did not deny widespread copying of Tetris’ features and design. Additionally, Xio did not deny spending money to research copyright law and concluding they could imitate “Tetris” if they stuck to the game’s functional elements.
For this conclusion, Xio leaned heavily on the merger and scenes a faire doctrines to conclude that most of Tetris’ content could not be protected. Since only expression is copyrightable, the underlying ideas of a game are not protected. For example, while “Mario” is protected from wholesale copying, creating a game around an Italian plumber who saves a princess might not be copyright infringement. Stemming from this expression/idea theory, the doctrine of merger limits copyright protections when there are few ways of expressing a given idea. Since the expression and idea are so closely related, if the law offered standard copyright protection, the copyright holder would receive a near monopoly on the idea. To avoid these idea monopolies, the merger doctrine reduces copyright protection when an idea and its expression merge. Similarly, Scenes a Faire limits expression that is widely used and commonly associated with a given genre. Relying on these two doctrines, Xio argued that any expression found in “Tetris” is unprotectable since it is so closely related to the game’s underlying rules and ideas.
The judge disagreed, however, and held that Xio’s theory would only preclude protection for expression that is inseparable or integral to an idea. Xio’s articulation of merger and Scenes a Faire is dangerously broad and could have precluded any protection whatsoever for game developers. The court’s adoption of a narrow view ensures that developers will be protected while also preserving merger and Scenes a Faire for difficult cases where an idea and expression are almost inseparable.
Specifically, the judge found Xio copied the individual Tetris pieces, the dimensions of the playing field, the display of garbage lines, the appearance of shadow pieces, the display of the next piece, the color changes when pieces land, and the playing field automatically filling in when a player loses. The court found this expression was not inseparable from the underlying ideas of the game, and while taking a single one of these elements may not have been infringement, Xio’s wholesale replication constituted copyright infringement.
The court also held that Xio infringed on Tetris’ trade dress in creating “Mino.” Trade dress is a legal protection designed to protect consumers from purchasing goods that imitate another product. Trade dress tries to prevent knock-offs and counterfeits from being sold as the genuine product. Xio similarly sought to argue that Tetris’ trade dress was functional and did not deserve protection. The court also rejected this argument and held that many of the design choices in Tetris are not related to function.
While many have expressed concerns that the decision will stifle creativity and encourage copyright holders to pursue frivolous lawsuits, the decision will help protect copyright holders against clone producers like Xio. Given Xio’s unapologetic, wholesale reproduction of “Tetris,” there is a good chance that this decision will not harm genuinely new creative games that simply share elements or inspiration with their predecessors.
In 1998, Congress passed the Digital Millennium Copyright Act, which includes a variety of provisions to address intellectual property concerns including things like digital material and the Internet. In addition, the DMCA updated U.S. law to implement two World Intellectual Property Organization treaties from 1996. The DMCA strengthens penalties for digital piracy, including criminal penalties for tampering with anti-piracy measures in software. The manufacture of software or devices to circumvent copyright protection measures is also prohibited. There are several exceptions to these penalties, including law enforcement, libraries, and educational institutions, as well as a temporary exception for copying data while repairing your computer. Although it includes these new penalties, Title 1 of the DMCA specifies that there are no changes to the existing copyright infringement rights, remedies, or defenses. The DMCA also exempts foreign copyright holders from the U.S. law that requires copyrights to be registered with the U.S. Copyright Office before an infringement lawsuit can be filed. Stone Law can help you navigate the DMCA’s technological provisions and penalties and protect your rights.
The DMCA makes a special provision for internet service providers that absolves them of copyright infringement liability provided they follow specified guidelines. ISPs can avoid liability if they follow the Act’s guidelines. One requirement is that ISPs block access to any infringing material after they receive notice of an infringement claim from a copyright holder. Additionally, ISPs are required to implement a policy for terminating repeat infringers. ISPs can neither benefit directly from infringement nor have knowledge that would make infringement apparent. Once they are notified of infringing material, ISPs must remove the offending material promptly. If they comply with the DMCA, ISPs are immune from monetary damages, but may be ordered by a court to take action, including blocking infringing content. Not only do ISPs benefit by avoiding liability, but also the notification system allows them to rely on others to determine whether material is infringing. It can be unclear whether material infringes on a copyright, and the DMCA allows ISPs to avoid making that complex decision. Copyright holders are also given the right to subpoena ISPs for the identification of copyright infringers. If you believe your copyright has been infringed upon by someone, Stone Law’s experienced intellectual property attorneys can help you subpoena the necessary records to determine the best way to protect your rights.
While copyright holders can benefit from the DMCA, there are several requirements for the notice they give to ISPs to be adequate. If you believe that information online infringes on your copyright, Stone Law can help you draft and send notification to have it removed. A copyright holder’s notification to an ISP must include:
– A signature of an authorized agent of the copyright holder
– Identification of the copyrighted work(s)
– Information on the infringing materials or activity and how the ISP can locate it.
– Contact information for the party alleging infringement
– A good faith statement that the material is not authorized by the copyright holder, an agent, or the law.
– A statement that the information in the notification is accurate and the party filing it is authorized to do so under penalty of perjury.
Adequate notice is required before an ISP can take action to remove infringing content. It can be difficult to compile the notice required before an ISP can remove infringing content. In order to ensure that removal is not delayed, Stone Law can help you prepare and send adequate notice to an ISP.
If you believe your content has been unnecessarily taken down by an ISP, you can file a counter-notice, stating a good faith belief the material should not have been taken down. Stone Law can help you prepare an adequate counter-notice and navigate any following lawsuit.
The DMCA is part of the body of digital copyright law that is still developing, and, as a result, the rights and remedies available to you can be confusing. Contact us for help if you have concerns about your rights as a copyright holder or if you believe your content has been mistakenly removed.