BMI Rate Court Judge KO’s DOJ on 100% Licensing

In what had been scheduled to be a mere pre-motion conference, the federal district judge overseeing the BMI Consent Decree, Louis L. Stanton, decided to hold a hearing on Friday, September 16. He then issued a six-page Opinion and Declaratory Judgment, ruling against DOJ’s interpretation of the decree which would have required 100% or “whole work” licensing:

The phrase in Art. II (C) of the Consent Decree defining BMI’s repertory as “those compositions, the right of public performance of which [BMI] has… the right to license or sublicense” is descriptive, not prescriptive. The “right of public performance” is left undefined as to score or form, to be determined by processes outside the Consent Decree. The Consent Decree neither bars fractional licensing nor requires full-work licensing.

Please read my prior post for more background, including a discussion on what is meant by the 100% or whole work licensing sought by the Justice Department as opposed to the fractional licensing regime under which ASCAP, BMI and the rest of the music industry operate.

Both BMI and ASCAP have operated on a fractional licensing basis for all of the 75 years since the consent decrees were entered into, offering licensees for only that percentage of a particular work that each respective performing rights organization (PRO) controls pursuant to its agreements with its member copyright owners and pricing their licenses accordingly. And both PROs declared the Court’s decision to be a major victory for songwriters.

After a brief recitation of the facts, including DOJ’s outlining its position last month and BMI’s seeking a declaratory judgment in support of fractional licensing, Judge Stanton began his discussion by stating: “Nothing in the Consent Decree gives support to the  [Antitrust] Division’s views.” He went on hold that the BMI Consent Decree “does not address the possibilities that BMI might license performances of a composition without sufficient legal right to do so, or under a worthless or invalid copyright, or users might perform a composition licensed by fewer than all of its creators.” The Court supported its conclusion by relying on Section XIV (D) of the Consent Decree, which reads as follows:

Nothing in this Article XIV shall prevent any applicant from attacking the aforesaid [rate court] proceedings or in any other controversy the validity of the copyright of any of the compositions in defendant’s repertory nor shall this Judgment be construed as importing any validity or value to any of said copyrights.

The Court construed this provision to mean that “[q]uestions of the validity, scope and limits of the right to perform compositions” are left, like the redress of copyright infringement, to determinations outside of the application of the Consent Decree. Neither DOJ in its statement, nor the Copyright Office in its memorandum addressing 100% licensing, nor BMI in its application for a declaratory judgment, cited Section XIV (D).

Judge Stanton then distinguished the situation where he had ruled in the Pandora case that the BMI decree forbids the partial withdrawal of rights by publisher members (i.e., where BMI would not be authorized to license performances online services like Pandora, leaving the publishers to license such services directly.  With regard to “partial withdrawal,” the Court, quoting its prior decision in the Pandora case, stated that “[t]he BMI Consent Decree requires that all compositions in the BMI repertory be offered to all applicants” that seek a license.

Judge Stanton’s quick and summary rejection of 100% licensing gives BMI a knockout victory over DOJ. However, this is not the end of the matter. ASCAP is governed by a separate but very similar Consent Decree that is overseen by its own Rate Court judge, Denise Cote, also of the Southern District of New York. Either ASCAP or DOJ could seek a declaration from Judge Cote, who could rule contrary to Judge Stanton. Similarly, DOJ could appeal Judge Stanton’s decision to the Second Circuit, regardless of whether Judge Cote rules on the issue. Moreover, as DOJ’s review of the ASCAP and BMI Consent Decrees encompassed several other issues besides 100% licensing, ASCAP has already started the process of seeking relief from Congress – something even DOJ suggested. BMI beat DOJ in the first battle but the war wages on.

The De Minimus Exception to Infringement is Now in Vogue for Sound Recordings

On June 2, a divided panel of the Ninth Circuit affirmed the district court’s granting of summary judgment to defendants and vacated an award of attorney’s fees in the case of VMG SalSoul, LLC v. Ciccone. Plaintiff alleged that Madonna’s mega-hit, Vogue, infringed both the copyright in the composition and the copyright in the sound recording of the song, Love Break, recorded several years earlier by defendant, Shep Pettibone, who also worked on the recording of Vogue. Pettibone sampled, altered and incorporated the “horn hit” from Love Break into Vogue.

The “horn hit” consists of two forms, a single and a double hit, and occurs 27 and 23 times, respectively during the course of the 1982 recording of Love Break that is 7:26 in duration. By contrast, the “horn hit” sampled in Madonna’s 1990 recording of Vogue, is sampled solely from the single hit and is pitched a half tone higher than the original “horn hit” in Love Break. There are two versions of Vogue in issue: the “radio edit” that’s 4:53 in duration and contains one “single hit” and three “double hits” and the “compilation version” that’s 5:17 in duration and contains one “single hit” and five “double hits.” The single “horn hit” lasts less than a quarter of a second and the double “horn hit” also clocks in at less than a second in duration. The Court’s opinion includes the musical notation for both versions of the “horn hit” as heard in Love Break and in Vogue.  You can listen to the respective recordings here and here.

The Ninth Circuit had previously established the de minimus exception to copyright infringement for musical works in the 2003 case, Newton v. Diamond, where the court noted that the unauthorized use “must be significant enough to constitute infringement,” and that a plaintiff “must show that the copying was greater than de minimus.” Quoting Newton, the Court stated that a “use is de minimus only if the average audience would not recognize the appropriation.” After analysis, including listening to both recordings, the court held that the appropriation of both the underlying musical work and the master recording of the two versions of the “horn hit” was de minimus.

Addressing the alleged copyright infringement in the sound recording, the Court stated:

After listening to the audio recordings submitted by the parties, we conclude that a reasonable juor could not conclude that an average audience would recognize the appropriation of the horn hit. That common-sense conclusion is borne out by dry analysis. The horn hit is very short – less than a second. The horn hit occurs only a few times in Vogue. Moreover, the horn hits in Vogue do not sound identical to the horn hits from Love Break. As noted above, assuming that the sampling occurred, Pettibone truncated the horn hit, transposed it to a different key, and added other sounds and effects to the horn hit itself. The horn hit then was added to Vogue along with many other instrument tracks.  Even if one grants the dubious proposition that a listener recognized some similarities between the horn hits in the two songs, it is hard to imagine that he or she would conclude that sampling had occurred.

In applying the de minmus exception to sampling of sound recordings, the Ninth Circuit explicitly broke with the Sixth Circuit, the only other circuit to directly address the issue. In the 2005 case, Bridgeport Music v. Dimension Films, the Sixth Circuit adopted a bright-line rule, summarized by the Ninth Circuit as follows: “For copyrighted sound recordings, any unauthorized copying – no matter how trivial – constitutes infringement.”

Plaintiff, however, argued that there was a statutory basis for treating sound recordings differently from other copyrighted works and that the de minimus exception should not apply. The Court looked at Section 102, the list of copyrightable types of works, and found no basis to treat sound recordings differently from other copyrightable works, such as literary works. Similarly, in addressing the “bundle of rights” of Section 106, the Court concluded:

Again, nothing in that provision suggests differential treatment of de minimus copying of sound recordings compared to, say, sculptures. Although subsection (6) deals exclusively with sound recordings, that subsection concerns performances; nothing in its text bears on de minimus copying.

Plaintiff’s main statutory argument apparently was premised on the third sentence of Section 114(b), which reads as follows:

The exclusive rights of the owner of copyright in a sound recording under clauses (1) and (2) of section 106 do not extend to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording. As the Court pointed out, this section is a limitation on a copyright owner’s rights and states that “sound alike” recordings that do not incorporate a separate master recording (i.e., no sampling) are permissible.

Addressing this provision dealing with sound-alike recordings, the Court stated:

But the quoted passage does not speak to the question that we face: whether Congress intended to eliminate the longstanding de minimus exception for sound recordings in all circumstances even where, as here, the new sound recording as a whole sounds nothing like the original.

The Sixth Circuit’s Bridgeport decision was premised on an interpretation of Section 114(b) that the Ninth Circuit explicitly rejected, knowing that doing so would create a split in the circuits and uncertainty in this area of the law. The Court noted that as a practical matter, the circuit split already exists as district courts outside the Sixth Circuit have almost uniformly declined to follow Bridgeport Music’s bright line rule.  However, the Court did reverse the award of attorney’s fees:  “It plainly is reasonable to bring a claim founded on the only circuit-court precedent to have considered the legal issue, whether or not our circuit ultimately agrees with that precedent.

In dissent, Judge Silverman defended the Bridgeport precedent:

I find Bridgeport’s arguments well-reasoned and persuasive. Equally compelling is, I think, Congress’s Silence in the wake of Bridgeport, especially in light of the fact that the Sixth Circuit explicity invited Congress to clarify or change the law if Bridgeport’s bright-line rule was not what Congress intended. While it’s true that congressional inaction in the face of judicial interpretation is not ironclad evidence of Congressional approval, it’s not chopped liver, either. In this case, Bridgeport has not been hiding out in the woods, waiting to be found; it has been governing the music industry in Nashville and elsewhere for eleven years.

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My own view is that the Ninth Circuit got it right here. There is no reason to treat sound recordings differently from other types of copyrighted works and the de minimus exception should apply where appropriate. Sampling is merely a form of aural collage art and there is no doubt that a court would find the incorporation of small snippets a copyrighted work of visual art such as a painting or photograph in another painting, photograph or sculpture either to constitute fair use or a non-actionable de minimus appropriation. In sum, Madonna has made de minimus usage as in vogue in copyright as she has long done with her clothing.

Are Transformative Fair Use Principles Foul To Musicians?

[Note: This is part two of a two-part article that was previously posted on NewMusicBox, a site for composers and fans of contemporary classical and other experimental music, on September 17, 2015.]

In my previous post, I sped through the history of fair use from Justice Story to the current statute and strolled through a few examples of the analysis that’s typically used when applying the four factors of Section 107 of the Copyright Act, the statutory test for fair use.

But while courts always construe the statutory factors, the “real” fair use test—at least since the mid-1990s—is nowhere in the statute. Instead, the dispositive inquiry is whether the usage is “transformative.” So, what is “transformative use” and where did it come from?

A) Transformative Use, Music and Parody

The “transformative use” test comes from an influential 1990 Harvard Law Review article by Judge Pierre N. Leval. But since neither articles, books, nor blog posts have any legal effect unless adopted by a court (or legislature), it’s the Supreme Court’s casting of Judge Leval’s concept that defines “transformative use.” In the 1994 case, Campbell v. Acuff-Rose Music, the high court, citing the Leval article in its analysis under the first factor, defined “transformative use” as follows:

The central purpose of this investigation is to see, in Justice Story’s words, whether the new work merely “supersede[s] the objects” of the original creation (“supplanting” the original), or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is “transformative.” (Citations omitted).

If that sounds kind of vague, it is. And while ambiguity is often cultivated in the arts, it’s not so good in a legal standard. And as applied, it sometimes seems like a transformative use of Justice Stewart’s “I know it when I see it” test.

In Campbell, the Supreme Court established that parody can be a form of fair use. The case concerned 2 Live Crew’s use of part of the Roy Orbison hit, “Oh, Pretty Woman,” in their similarly titled song,Pretty Woman,” despite being denied permission for the usage.  The band used the introductory guitar riff and the first part of the chorus before moving on to new material that was deemed to mock the original tune. The Court found that 2 Live Crew’s use of Orbison song was “transformative” in that it did not merely reproduce and appropriate the original composition.

In reaching this conclusion, the Court established guidelines for determining whether a use would be a “parody” in the legal sense, i.e., one for which permission of the copyright owner of the parodied work would not be required: first, only so much as is necessary to conjure up the original work was to be used; and second, the parody must comment in some way on the original work. In other words, it wouldn’t be a “fair use” parody to write new lyrics to an underlying song that talked about something else. And as the Supreme Court noted, a parody protected by fair use need not be funny or artistically successful.

In other words, one can’t write new lyrics to every line in a Michael Jackson song as an ode to multifarious foodstuffs and expect it to be a protected parody. That’s why Weird Al gets permission for his “parodies” even though he obliquely cites fair use on his website.

These principles were more recently applied in Bourne Co. v. Twentieth Century Fox Film Corp., a 2009 decision from the Southern District of New York (district courts being the federal trial courts) involving the Family Guy episode, “When You Wish Upon a Weinstein.” The show featured a song called “I Need a Jew” that used elements of the Disney classic, “When You Wish Upon a Star.” Defendants, including the show’s auteur, Seth MacFarlane, had sought permission from Bourne but were denied.

MacFarlane had the chutzpah to use it anyway and the court concluded that Peter Griffin’s plaintive pleading was a fair use parody of Jiminy Cricket’s crooning in Pinocchio. Relying on Campbell, the Supremes stated: “[t]he Court finds that the new work is transformative; consequently, the first factor weighs in favor of a finding of fair use.”

B) Transformative Use in Dramatic and Visual Arts Cases

But now let’s look at a 2015 parody case from the same court involving another of the performing arts. In Adjmi v. DLT Entertainment, Ltd, the Southern District held that an Off-Broadway stage play, 3C, was a fair use parody of the iconic seventies sitcom, Three’s Company. There, “[t]he parties agree that 3C copies the plot, premise, characters, sets and certain scenes from Three’s Company.” After applying the four factors, the Court held:

The Play is a highly transformative parody of the television series that, although it appropriates a substantial amount of Three’s Company, is a drastic departure from the original that poses little risk to the market for the original.

Apparently, as long as you’re not mocking music, it seems you can take an awful lot of material, including entire scenes, so long as you’re making some sort of statement about the original.

But most fair use cases don’t involve parodies. Moving to the visual arts, Blanch v. Koons, addresses notorious appropriation artist Jeff Koons’s incorporation of—among other images—a cropped, rotated, and altered portion of a copyrighted photograph of a woman’s legs and feet from a shoe ad into a massive collage painting. The Second Circuit (circuit courts being the federal appeals courts between the district courts and the Supreme Court) held that Koons’s use of the magazine ad photo was transformative in that his change of colors, background, media, and size of the objects had an entirely different purpose and meaning from the original, as Koons’s work was commenting on “the social and aesthetic consequences of mass media.”

In the 2013 case Cariou v. Prince, the Second Circuit moved the dial further towards finding transformative (and therefore fair) use in appropriation art. At issue were 35 of Cariou’s black and white photographic portraits of Jamaican Rastafarians that were published in a book and which Richard Prince incorporated into large-scale artwork that altered the images, including cropping, coloring, and obscuring faces with painted “lozenges.” Some of Cariou’s and Prince’s works were reprinted in the court’s opinion. The Court found fair use with respect to 25 of the photos, reversing the district court’s contention that the “transformative use” had to comment somehow on the original photos as in parody cases:

The law imposes no requirement that a work comment on the original or its author in order to be considered transformative, and a secondary work may constitute a fair use even if it serves some purpose other than those (criticism, comment, news reporting, teaching, scholarship, and research) identified in the preamble to the statute.

As to the remaining five Cariou photos, the Court noted that “Prince did little more than paint blue lozenges over the subject’s eyes and mouth, and paste a picture of a guitar over the subject’s body.” What’s striking, however, is that even with respect to these uses, the Second Circuit thought that even they could be deemed to constitute fair use and kicked the case back to the district court to make that determination. As we’ll see, the Cariou court’s expansive view of transformative use has its critics.

The Second Circuit has also ruled that the copying of entire posters, albeit in greatly reduced size, in a 480-page coffee table book about the Grateful Dead was fair game. The images appeared along with timelines and commentary about the band. The Court’s opinion stated that “the first fair use factor weighs in favor of [defendant] because [defendant’s] use of [plaintiff’s] images is transformatively different from the images’ original expressive purpose and [defendant] does not seek to exploit the images’ expressive value for commercial gain.” In reaching this conclusion, the Court cited an earlier case which held a search engine’s use of thumbnail reproductions of images was highly transformative. In case you were wondering, this is why I’m pretty sure my reduced-scale cell phone photo of the Chutzpah game reprinted in last week’s post is likely a transformative fair use.

C) A Fair Use Remix: Applying the Standards From Non-Music Cases to Musical Examples

But as this post is running long and my readers’ patience is no doubt growing short, let’s see what happens when we apply standards from these other cases to a few music hypotheticals:

1. As we know, reproducing an entire visual work, although in greatly reduced size, can be considered a transformative, and ultimately fair, use. Now imagine posting an entire John Adams or John Corigliano score, or even the complete sheet music to a Taylor Swift song – in miniature – without permission.

2. We also know from the Three’s Company case that taking entire scenes from a TV show is now fair game if you’re doing a parody of the underlying work. Now envision using a whole scene from an Adams opera or Sondheim musical or an entire Beatles song in a musical parody.

3. We’ve also learned from the appropriation art cases that taking recognizable portions of copyrighted works and creating a collage or visual remix can be a transformative fair use. Now try claiming fair use when taking twenty seconds of a recording of “Satisfaction” or any other famous song and putting it into a film or sampling several snippets of it in your own recording.

4. As was demonstrated in the Koons and Cariou cases, the recasting—including changing the color and background of a work—can be a transformative use. Now picture “recasting” the setting of an orchestral work by “coloring” it for concert band.

I’m guessing that most of my musician readers are chuckling at these, knowing that it would take chutzpah to claim any of the above to be a “fair use” of the music. Working backwards, we call the fourth example making an “arrangement” for which permission is clearly required. The two uses in the third hypothetical are typical examples requiring synch and sampling licenses, respectively. As for the second hypothetical, we know from the Family Guy decision that the more restrictive standard set out in the 2 Live Crew case two decades earlier still applies to musical parodies. And anyone who posts an entire piece of copyrighted music stands a good chance of being subject to a DMCA takedown notice or worse, as reprints of only a few bars are typically licensed.

Mind you, I’ve only cited a handful of the myriad fair use cases and all of them so far have been from courts in New York City. While federal courts throughout the country hear copyright cases, the New York decisions are particularly influential because of the copyright-based industries centered there, such as publishing, music, theater, advertising, and fashion. And not surprisingly, Judge Leval, the progenitor of transformative use, served as a judge both in the Southern District and on the Second Circuit.

If you’ve read my arrangements post you may be thinking that this whole “transformative use” thing sounds a lot like making a “derivative work,” something the copyright owner has the right to grant or deny approval. You’re not alone and last year at least the Seventh Circuit, in finding fair use in another appropriation art case, agreed:

We’re skeptical of Cariou’s approach, because asking exclusively whether something is “transformative” not only replaces the list in §107 but could also override 17 U.S.C. §106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2). Cariou and its predecessors in the Second Circuit do not explain how every “transformative use” can be “fair use” without extinguishing the author’s rights under §106(2). We think it best to stick with the statutory list, of which the most important usually is the fourth (market effect). [Citations omitted]

[Click here for my more recent and detailed discussion of tranformative fair use versus protected derivative works in light of Judge Leval’s Google Books opinion.]

So why does music seem to have more restrictive standards for fair use than other creative arts? A clue is in the quotes from the cases. With respect to music, there’s a well-established market for these uses, including licensing arrangements, reprints, synchs, and samples, all of which are treated as derivative works. And courts are very reluctant to disrupt the marketplace— even one as dysfunctional as music licensing. This goes back to the first principles of the Copyright Clause, to Justice Story’s fair use test from nearly 175 years ago (“…the degree in which the use may prejudice the sale, or diminish the profits…”) and the fourth factor of Section 107. Ironically, it was the famous Southern District “Thou shalt not steal” case that essentially created the sampling marketplace.

And given the steep decline in mechanical royalties and the paltry payments from streaming, permissions, synch, and sampling uses are among the few areas where musical creators can reasonably be compensated. Do we really want to change this in order to expand fair use? While doing so would greatly enlarge the creative pallet available for new works, it would deny the owners of existing works the fundamental right to say “no” to uses of their works they don’t like and limit the creators of both the underlying and new works to profit from them. Whether or not such a reshaping of the fair use landscape is a good thing or not is a policy debate to be had elsewhere.

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So what does our slog through the thicket of fair use jurisprudence tell us? Clearly, fair use is a continually evolving doctrine and in recent years some courts and commentators have viewed fair use broadly, like a “right” at least as applied to creative works other than musical ones. In fact, in a bit of hot news, on September 14, the Ninth Circuit in California issued a 34-page fair use opinion in the “dancing baby” case, the one where a mom posted a 29-second video on YouTube that showed her toddler dancing to Prince’s song, ”Let’s Go Crazy” and Prince’s publisher, Universal Music, told her to take it down.

The Court held that a copyright owner must consider whether the online usage is protected by fair use prior to sending a takedown notice under the Digital Millennium Copyright Act of 1998 (DMCA). In reaching this decision, the Ninth Circuit confronted the issue of whether a fair use is an “affirmative defense” or a “right” and, at least for purposes of the DMCA, views it more like a right as fair use is “authorized by law.” Of course, any “consideration” of fair use involves application of the detailed analysis discussed above, including the application of “transformative use” under the Section 107 factors and increasingly complicated case law.

So how should one determine if a use is fair or foul? Especially if you’re a musician, you should be guided by the preamble to Section 107 and focus on traditional areas like “criticism, comment, news reporting, teaching, scholarship, or research.” Otherwise, be prepared to seek permission or at least the counsel of an experienced lawyer so that you don’t take a gamble on fair use and make schlimazels of your collaborators, commissioners, publishers, and presenters.

Google Books’ Dubious Distinction Between Transformative Use and Derivative Works

Given its prior ruling in last year’s substantially similar HathiTrust case, the Second Circuit’s October 16 decision in The Author’s Guild v. Google, Inc. was as inevitable as the Cubs failing to win the World Series. Still those in the content creating community feel it’s fundamentally unfair that Google gets to scan millions of copyrighted books in their entirety without paying a dime for the privilege under the banner of fair use. The opinion, written by Judge Pierre N. Leval (Mr. Transformative Use, himself), not surprisingly held that Google’s usage was a transformative, and therefore fair, use under the Supreme Court’s 1994 decision in Campbell v. Acuff-Rose Music, which had relied upon Judge Leval’s own Harvard Law Review article advocating a transformative use analysis.

The facts are briefly as follows: Google digitally scanned more than 20 million of books that were submitted by participating university libraries – but without the consent of the rights holders – to create a searchable database for these materials. In return, the submitting library gets a digital copy of each work it submitted, providing that the library agrees to use the digital copy only in compliance with copyright laws. The database, which can be searched online by the public for free, provides a list of works containing the key terms searched as well as snippets from each book containing the search terms in context. Google has built in safeguards that limit the number of snippets and the amount of text displayed so that a searcher cannot obtain a copy of the book, or a substantial portion of it, simply by doing repeated searches.

I’ll leave it to others to critique the Court’s analysis of the finding of fair use under the four factors of Section 107 of the Copyright Act. My focus is on the opinion’s distinction between “transformative” fair uses of copyrighted works, for which no permission is needed, and the creation of “derivative works” as defined in Section 101 and for which authorization from the copyright owner is required pursuant to Section 106(2).

Judge Leval, in pages 17 through 19 of his opinion, including a lengthy footnote 18, appears to address the Seventh Circuit’s issues with the transformative test, particularly as voiced in Judge Easterbrook’s opinion in last year’s Kienitz case, which I’ve previously written about. Kienitz concerned alterations to a copyrighted photograph of the mayor of Madison, Wisconsin. The District Court found that the usage was fair, relying on a “transformative use” analysis.

Although the Seventh Circuit affirmed the result, it rejected the transformative use approach as articulated in the Second Circuit’s much-criticized Cariou decision, finding a conflict with protected derivative works:

Fair use is a statutory defense to infringement. The Copyright Act sets out four non-exclusive factors for a court to consider. The district court and the parties have debated whether the t-shirts are a “transformative use” of the photo – and , if so, just how “transformative” the use must be. That’s not one of the statutory factors, though the Supreme Court mentioned it in Campbell v. Acuff-Rose Music, Inc. The Second Circuit has run with the suggestion and concluded that “transformative use” is enough to bring a modified copy within the scope of §107. Cariou applied this to an example of “appropriation art,” in which some of the supposed value comes from the very fact that the work was created by someone else. We’re skeptical of Cariou’s approach, because asking exclusively whether something is “transformative” not only replaces the list in §107 but could also override 17 U.S.C. §106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2). Cariou and its predecessors in the Second Circuit do not explain how every “transformative use” can be “fair use” without extinguishing the author’s rights under §106(2). We think it best to stick with the statutory list, of which the most important usually is the fourth (market effect). (Citations omitted)

While agreeing with Judge Easterbrook that the fourth factor is the most important, Judge Leval also noted that the Supreme Court stressed the importance of the first factor, the “purpose and character of the use,” in making a determination of fair use. Citing Campbell (but coyly omitting the Supreme Court’s approving citation – more than Judge Easterbrook’s mere mention – of his own seminal article promulgating the concept of transformative use), Judge Leval wrote: “The more the appropriator is using the copied material for new, transformative purposes, the more it serves copyright’s goal of enriching public knowledge and the less likely it is that the appropriation will serve as a substitute for the original or its plausible derivatives, shrinking the protected market opportunities of the copyrighted work.”

Judge Leval further elaborated: “In other words, transformative uses tend to favor a fair use finding because a transformative use is one that communicates something new and different from the original or expands its utility, thus serving copyright’s overall objective of contributing to public knowledge.” But, as the Court’s opinion cautions: “The word ‘transformative’ cannot be taken too literally as a sufficient key to understanding the elements of fair use. It is rather a suggestive symbol for a complex thought, and does not mean that any and all changes made to an author’s original text will support a finding of fair use.“ Fair enough, but how is this dictum helpful in practice?

Here’s how the Second Circuit addressed the tension between transformative fair use and protected derivative works:

A further complication that can result from the oversimplified reliance on whether the copying involves transformation is that the word “transform” also plays a role in defining “derivative works,” over which the original rights holder retains exclusive control…..The statute defines derivative works largely by example, rather than explanation. The examples include “translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgement, condensation,” to which list the statute adds “any other form in which a work may be…transformed (emphasis added). As we noted in Author’s Guild v. HathiTrust, “[p]aradigmatic examples of derivative works include the translation of a novel into another language, the adaptation of a novel into a movie or play, or the recasting of a novel as an e-book or an audiobook.” While such changes can be described as transformations, they do not involve the kind of transformative purpose that favors a fair use finding. The statutory definitions suggest that derivative works generally involve transformations in the nature of changes of form. By contrast, copying from an original for the purpose of criticism or commentary on the original or provision of information about it, tends most clearly to satisfy Campbell’s notion of the “transformative” purpose involved in the analysis of Factor One.” (Citations omitted)

I’m doubtful the foregoing answers Judge Easterbrook because even this formulation of transformative use sounds like it could cover a lot of protected derivative works as translations and abridgements of texts and arrangements of musical works surely expand their utility and often communicate something new. For example, the Southern District of New York recently held that taking the characters, settings and entire scenes from the TV series, Three’s Company, and adapting them into a stage play (a mere “change of form” and presumably a derivative work under Judge Leval’s revised formulation), was a transformative fair use that parodied the original.

As I’ve previously written, the transformative use test remains amorphous and something akin to a restatement of Justice Stewart’s “I know it when I see it” standard where wholesale copying of large swaths or entire works can be found to be fair use if transformative. As the Court concluded in its epic footnote 18: “Attempts to find a circumspect shorthand for a complex concept are best understood as suggestive of a general direction, rather than as definitive descriptions.” Yeah, right.

Despite the not terribly helpful attempts to define the ineffable, the quoted portion of the Court’s opinion does posit two instances of transformative use that do not appear to conflict with the general understanding of what constitutes a derivative work: 1) where the use of the underlying work is to comment on or criticize it; and 2) where the use provides information about the work. The Second Circuit cited Campbell as an instance of the former and clearly views Google’s actions as an example of the latter:

Google’s making of a digital copy to provide a search function is a transformative use, which augments public knowledge by making available information about Plaintiffs’ books without providing the public with a substantial substitute for matter protected by the Plaintiffs’ copyright interests in the original works or derivatives of them.

However, in Campbell, the Supreme Court pointed out that the musical parody of Roy Orbison’s iconic “Oh, Pretty Woman,” used only as much as was needed to conjure and comment upon the original song. Here, the Second Circuit blesses the copying of millions of complete works in the name of transformative use. There’s no doubt that Google’s database is incredibly useful and can provide substantial benefits to the public. However, as with derivative works, there are lots of really useful and beneficial things for which licenses are routinely obtained.

Transformative use analysis can be a helpful tool in applying the first statutory factor but it shouldn’t override all four §107 factors as it seems to do under current Second Circuit jurisprudence. And however formulated, it doesn’t adequately distinguish between fair and derivative uses. There is, however, one other point on which the estimable judges Leval and Easterbrook agree: fair use is an affirmative defense, as pointed out in Campbell. However, this seems to conflict with the Ninth’s Circuit’s recent opinion in the “dancing baby case” where, in the context of DMCA takedown notices, it states that fair use is something that is substantively “authorized by law.” Perhaps it’s time once again for the Supreme Court to transform fair use jurisprudence by providing some clarity to the concept.

Why the RIAA Indirectly Sued Aurous For Willful Copyright Infringement

The Recording Industry Association of America (RIAA) wasted no time in going after the new streaming site, Aurous. A mere three days after its “alpha” launch, RIAA’s constituent major labels, Atlantic, Warner Bros., UMG Recordings, Sony Music and Capitol Records (the entities that have standing to sue) filed their copyright infringement action against the company and its founder and principal designer, Andrew Sampson. The 20-page complaint, filed October 13, seeks temporary and permanent injunctive relief, statutory damages for “willful” infringement in the amount $150,000 (or, alternatively actual damages to be proven at trial), as well as costs and attorney’s fees, pursuant to Copyright Act §§501-502 and §§504-505.

So what is Aurous and why is the RIAA so miffed? In an interview in Billboard the day before the suit was filed, Sampson explained that the service is a mere music player, or an aggregator of other players:

At the most fundamental level, it’s a music player like any other. What stands out is that it can take advantage of other existing platforms and piggyback off those, and integrated those into platform…..You have YouTube, Spotify playlists, Apple Music playlists — the end goal, once we’re out of alpha, is to put those playlists into our app, and it’ll do the rest of the work. So you can listen from anywhere that you have a playlist.

Obviously, the RIAA sees a more sinister operation, one that offers access to pirated music files through the BitTorrent network, but with an interface that makes it much easier for ordinary non-geeks to use. As touted on the Aurous site: “Aurous is BitTorrent Music for Your Dad.“ The complaint makes a less flattering comparison: “Like Grokster, Limewire or Grooveshark, it is neither licensed nor legal.” RIAA alleges that Aurous is set up to receive music exclusively from overseas pirate sites. The complaint further alleges that Aurous unfairly and unlawfully competes with legitimate, licensed sites such as Apple Music, iTunes, Google Play, Rhapsody and Spotify.

The complaint contains three counts of infringement: 1) inducement of copyright infringement, 2) contributory copyright infringement, and 3) vicarious copyright infringement. Notice that neither defendant is sued for actual, direct copyright infringement.

Why is this? Since the heady, ‘ster crazy days of Napster, Grokster, Aimster and other first generation pirate sites, newer avatars of unlicensed free services are careful not to upload any content on its own servers. Instead, they act as convenient portals for users to search and access allegedly infringing files stored elsewhere. Aurus, the so-called “Popcorn Time for music,” apparently does not store files on its systems. That’s why defendants aren’t alleged to be committing any actual infringement themselves. So what are these three distinct, but related claims of indirect infringement?

Inducement of copyright infringement, as described by the Supreme Court in the Grokster decision, is where “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” That is precisely what RIAA alleges:

Defendants have designed and launch and are operating Aurous with the object of promoting its use to infringe Plaintiff’s copyrights. Defendants knowingly and intentionally induce, entice, persuade and cause users of Aurous to infringe Plaintiff’s copyrights in their sound recordings….

Contributory infringement is where a party has knowledge of another person’s direct infringement and engages in “substantial” participation in the infringement. Here, RIAA alleges: “Defendants have specific, actual, and constructive knowledge of both the infringing activity at the sources of unauthorized copies of Plaintiff’s works that Aurous locates and to which it links, and of the infringing activity of Aurous’s users.” Together, the first two counts amount to Aurous touting that they’ve got lots of infringing files for you to find (inducement) and then they provide the tools to make it easy for you to access these files they know or should know aren’t legit (contribution).

So what’s vicarious copyright infringement? That’s where a defendant has the right to supervise or control the conduct of the actual infringers and also receives a “direct financial interest” in the infringing activity. While this theory of liability is an outgrowth of the doctrine of respondeat superior, there need not be an employer-employee relationship, as is the case with Aurous and its users. Vicarious copyright infringement is the theory upon which performing rights organizations like ASCAP and BMI are able to hold the owners of nightclubs that perform music without a license liable even though the club may be owned by a corporate entity. This basis of copyright infringement allows RIAA to sue Sampson individually without having to “pierce the corporate veil.”

Here’s how RIAA alleges the elements of a vicarious liability claim:

By providing and operating their service, Defendants are receiving a direct financial benefit from copyright infringement in the form of a growing base of users that Defendants can monetize now or later with advertising and other methods of generating revenue. Defendants have stated their intention to display advertising on Aurous. Defendants have the right and ability to stop or limit the infringing activity occurring via their service but they take no steps to do so. Defendants are able to supervise or control the infringing activity of their users in many different ways, including by deciding the sources from which Aurous can and cannot retrieve music files, and through the ability to remotely alter the behavior of the Aurous service by issuing automatic updates to software installed on users’ computers.

Aurous promptly tweeted its view of RIAA’s “direct financial benefit” claim: “@RIAA principle [sic] complaint is that we’re ‘profiting’, anyone see any ads? We sure don’t.” The complaint doesn’t allege any specific activity by Sampson other than to state that “he describes himself as the lead software developer for the Aurous service and the individual responsible for decisions regarding the service” and that he’s the company’s President.

So now you know why RIAA doesn’t allege any direct infringement by defendants but instead bases its claim on three related and often overlapping theories of indirect copyright infringement. The word “aurous” means something that’s made of or contains gold. Whether Aurous might be a gold mine for RIAA or the defendants depends upon whether the court buys the RIAA’s assertion that Aurous is “illegally profiting from piracy by free riding on the creative efforts and investments of others” or takes the EFF‘s view that “[o]nce again, @RIAA asks a court to order the entire world to block & filter an app they don’t like.” Apparently, the Florida federal district court seems inclined towards the former, having issued a temporary restraining order effectively shuttering the site until a hearing on a motion for a preliminary injunction scheduled for October 28.

Update: On December 10, 2015, it was announced that RIAA and Aurous reached a settlement whereby Aurous would pay $3 million and shut down permanently. Considering that the site barely launched before RIAA sued, this is a tremendous victory for RIAA against a site that blatantly used copyrighted songs without authorization.

The Second Circuit Terminates Copyright in Santa Claus Song

In its October 8 decision in Baldwin v. EMI Feist Catalog, Inc., the Second Circuit reversed the District Court’s granting of summary judgment to defendant music publisher, holding that a 2007 termination notice effectively severed a portion of EMI’s US copyright interest in the Christmas classic, Santa Claus is Coming to Town (the “Song”). The Song was written by J. Fred Coots and Haven Gillespie. Plaintiffs are Coots’s statutory heirs.

In order to understand the Court’s 40-page opinion, one must briefly delve into the differences between the Copyright Act of 1909 and the current copyright law, the Copyright Act of 1976, which became effective as of January 1, 1978. Works created since 1978 enjoy a copyright term of life of the author(s) plus 70 years. Under the 1909 Act, the US copyright consisted of two distinct terms, an initial term of 28 years, followed by a renewal term of an additional 28 years. One reason for the bifurcated term of copyright under the 1909 Act was to give authors such as songwriters a second chance to negotiate for the value of their creations as fledgling artists often lack the information or bargaining power to do a good deal. However, writers often, but not always, assigned both the initial and renewal terms of US copyright to the grantee, here a music publisher. This assignment of both terms was valid so long as the assigning author lived into the renewal term so that the grant of those rights would vest.

When the 1976 Act was passed, it included some provisions that affected copyrights under the 1909 Act. First, it extended the renewal term so that a pre-1978 copyright would last for a total of 75 years. Second, the 1976 Act introduced similar, but not identical, termination provisions for both old and new copyright assignments, allowing authors or their statutory heirs (who are often different from, and for copyright purposes superior to, those designated under a will or state intestacy statutes), another chance to reclaim their share of the US copyright. Although termination notices can be served prior to the effective date, no termination of a US copyright interest can be effective until 35 years after the original assignment was made.

Section 203 governs terminations of copyright assignments occurring after January 1, 1978 and Section 304(c) covers those that occurred pre-1978. Since book and music publishers had better lobbyists than struggling writers, the termination provisions are deliberately difficult to execute. Both Section 203 and 304(c) require that the termination notice must: a) be served within a specific window of time, b) contain all of the required information including the date of the grant to be terminated, c) be served on the proper party, d) be executed by the author or the requisite percentage of statutory heirs; and e) be recorded in the Copyright Office. The details are contained in the statutory provisions and the Copyright Office regulations for terminations.

Both Sections 203 and 304(c) contain an additional clause: terminating parties cannot re-assign their post-termination US copyright interest until after the effective date of the termination – except they may do a new deal covering the post-termination period prior to the effective date with the party whose rights are being terminated. This gives the incumbent rights holder a leg up in negotiations and it is often the case that termination notices are used by authors and heirs merely as leverage to get a better deal with their current publisher.

With this somewhat simplified legal background, let’s review the salient facts in our Santa Claus suit. Coots and Gillespie wrote the Song and assigned the copyright to Feist, EMI’s predecessor-in-interest, in 1934. Copyright for the song was registered later that year. However, Coots didn’t assign his renewal rights in the 1934 agreement but did so separately in a 1951 agreement. A renewal registration was timely filed in 1961 as was required under the 1909 Act to prevent the copyright in the Song from going into the public domain. As of 1961, the copyright in the song was due to expire at the end of 56 years, in 1990.

In September 1981, Coots served a notice under §304(c) terminating the 1951 agreement, effective as of October 1990. By that time, the 1976 Act had passed and the copyright in the Song was now due to expire in 2009. Coots’s attorney sent the termination notice to the Copyright Office for recordation, as required by the statute. Under the doing a deal with the current publisher exception, Coots’s lawyer then engaged in negotiations with the music publisher to secure a new (and presumably better) deal. This usually consists of one or more of the following: the writer receiving a larger percentage of royalties, the writer being paid an acquisition fee for the post-termination term and the writer receiving a hefty recoupable advance on post-termination royalties.

The new deal concluded with Coot’s signing a 1981 agreement and the assignment clause included the usual boilerplate: “all rights” including “all renewals and extensions” of the copyright as well as “reversionary and termination interests” pursuant to section 304. The 1981 agreement further stated that the termination notice was filed in the Copyright Office and, in addition to payment of royalties, included a “non-recoupable bonus” (i.e., an acquisition payment) of $100,000 for the post-termination rights. After the 1981 deal was done, apparently Coots’s lawyer contacted the Copyright Office and the unrecorded termination notice was returned to him.

With the passage of the Sonny Bono Copyright Act of 1998, the term of pre-1978 copyrights was again extended (as were post-1978 copyrights from life plus 50 years) for another twenty years, bringing the duration of copyright protection for pre-1978 works to a total of 95 years. As a result, the Song now would not enter the public domain until 2029. Moreover, the 1976 Act added yet another termination provision for an author or his statutory heirs to obtain these final twenty years of copyright protection. However, this provision, section 304(d), stipulates that it is available only if there had not been a prior exercise of termination rights under section 304(c).

Although the Coots heirs served a section 304(d) termination notice with respect to the 1951 agreement in 2004 (under the theory that because the prior 304(c) notice had not been recorded it was a nullity), EMI and the Coots heirs ultimately agreed (at least at that time) that any termination rights should be directed against the 1981 agreement in accordance with §203, governing post-1978 grants.

So in early 2007, the Coots heirs served – and recorded—a notice of termination of the grant under the 1981 agreement pursuant to §203, with an effective date of December 15, 2016. EMI offered the heirs $2.75 million for their post-termination copyright interest but that offer was rejected as being too low. Because of additional complications dealing with “publication” rights, the Coots heirs subsequently served another termination notice in 2012, with an effective date of December 2021. The lawsuit over the Song about red-suited St. Nick ensued.

The District Court held that since the 1981 termination notice (under §304(c)) was never recorded, the termination of the 1951 agreement was ineffective and therefore EMI still controlled the copyright as a pre-1978 grant (here, 1951) cannot be terminated pursuant to either notice served pursuant to §203, which only covers post-1978 transfers.

The Second Circuit reversed, holding that the 1981 agreement superseded the 1951 agreement and that latter agreement was properly terminated by the 2007 notice pursuant to §203. While EMI argued that the 1981 agreement conveyed only post-termination rights, the Court held that the parties’ intent was such that the 1981 agreement, which was executed by Coots himself rather than his statutory heirs (thereby not running afoul of prior Second Circuit precedent in the Penguin Group v. Steinbeck case), replaced the 1951 contract, even in the absence of an integration clause, based upon the broadness of the grant.

What do we take away from all this? First, exercising termination rights is complicated. Second, you may have noticed that I’ve consistently referred to the “US copyright” in discussing the case. That’s because the statutory termination provisions, whether under §203 or §304, apply only to US copyrights. By contract, songwriters and other creators typically assign worldwide rights, although recent vintage agreements assign rights “throughout the universe.” So, EMI will still continue to own the rights corresponding to Coots’s share outside of the US, despite the effect of a valid termination notice.

What does that mean? By music industry convention, the US interest is typically valued at 50% of the economic value of the worldwide copyright and the rest of the world constitutes the remaining 50%. So let’s say someone wants to do a synch deal to use the Song in a feature film and the producers pay $40,000 for a worldwide, all rights buyout for several seconds of underscore in an upcoming Christmas caper. By custom, the party that owns the US rights would collect $20,000 and the party that controls the rest of the world would also get $20,000.

Mind you, these fees only cover the composition; the rights to the master recording of the composition would be separately licensed and would command a commensurate fee. And remember, this case only concerns Coots’s share of the Song. As to that of his co-writer, Gillespie, ASCAP’s online database indicates that the US rights are controlled by another publisher (but it’s possible EMI may still control world-ex US rights). So while Santa Claus may no longer be coming to towns in the US for EMI, it’s still possible St. Nick may sojourn through a few foreign cities on its behalf.

Did the Joker Write the Ninth Circuit’s Batmobile Decision?

In DC Comics v. Towle, the Ninth Circuit recently upheld the district court’s summary judgment determination that the Batmobile, as it appeared in at least two very different iterations created more than twenty years apart, constitutes a single copyrighted “character.” No joke.

The case involved Towle’s creating and selling Batmobile replicas, specifically the car used in the campy 1960s series starring Adam West as the Caped Crusader and the one used in the 1989 feature film starring Michael Keaton. Both the original vehicles and Towle’s replicas are pictured in the appedices to the Court’s opinion, which I strongly encourage my gentle readers to examine before proceeding further.

The Court commenced its learned discourse by exclaiming, “Holy copyright, Batman!” Following that was a discussion of the copyrightability of characters, citing such precedents as James Bond, Godzilla and Batman himself, all of whom have appeared in various guises over the years. Curiously, nowhere does the Court refer to any particular copyright registration for the Batmobile (or even one for any particular comic book issue depicting it, for that matter) despite summarily rejecting Towle’s argument on that point in a footnote.

The Court distilled its discourse on copyright in a character into a tripartite test:

We read these precedents as establishing a three-part test for determining whether a character in a comic book, television program, or motion picture is entitled to copyright protection. First, the character must generally have “physical as well as conceptual qualities.” Second, the character must be “sufficiently delineated” to be recognizable as the same character whenever it appears. Considering the character as it has appeared in different productions, it must display consistent, identifiable character traits and attributes, although the character need not have a consistent appearance. Third, the character must be “especially distinctive” and “contain some unique elements of expression.” It cannot be a stock character such as a magician in standard magician garb. Even when a character lacks sentient attributes and does not speak (like a car), it can be a protectable character if it meets this standard. (Citations omitted).

Now let’s briefly examine how the Court determined that the Batmobile satisfies this standard. The Court found that the Batmobile has “physical as well as conceptual qualities” in that the car is always “sufficiently delineated” in that it’s “equipped with high-tech gadgets and weaponry used to aid Batman in fighting crime” and that is “almost always bat-like in appearance.” The Court also noted that “[n]o matter its specific physical appearance, the Batmobile is a ‘crime-fighting’ car with sleek and powerful characteristics that allow Batman to maneuver quickly while he fights villains.” The Court further stressed: “Equally important, the Batmobile always contains the most up-to-date weaponry and technology.”

Let’s unpack this for a moment by substituting “Buick” for “Batmobile.” Does anyone really believe the state-of-the art technology in a 1966 Buick even remotely resembles that of a 1989 or 2015 model? And while the Batmobile “almost always” has bat-like features, how much does a 1966 Buick Regal bear any resemblance to its 1989 counterpart other than in its name? Or in copyright speak, assuming there was a registration for the design of the 1966 car, what copyrightable elements (expression) are incorporated into the 1989 version to merit it being considered a derivative work of the prior model? Indeed, do the two cars in question in this case look anything alike other than both being long and black? Moreover, the Court noted that Towle’s replicas did not exactly copy the originals used in the TV show and the film, although he did sell kits and accessories to customize the cars to more closely resemble them.

What the Court is describing sounds more like the “idea” of the Batmobile rather than any particular expression of it. The Court’s justification for copyrightable status seems to fly in the face of idea/expression dichotomy, codified in Section 102(b) of the Copyright Act in that ideas can’t be copyrighted, but only the particular expression of them. And that’s the problem in granting copyright protection to characters, especially those with non-speaking roles.

Plaintiff’s tiff with Towle seems to have been driven by his calling his replicas “Batmobiles” and trading upon that name, including using the domain name, batmobilereplicas.com. That, of course, is the province of the trademark law, not that of copyright, as names, titles and short phrases aren’t copyrightable. DC Comic’s complaint, did, in fact, allege trademark infringement and a cursory review of the PTO’s online database shows no fewer than four live registrations under the “Batmobile” moniker.

But assuming the Joker did not write the opinion, the Ninth Circuit hath now decreed that the Batmobile is a copyrighted character. So as the Riddler would say, riddle me this:

Since the Court did not identify any specific copyright registration, how long does the copyright in the Batmobile last? Assuming we can pin a date on any early version, it would seem that an ancient avatar would eventually fall into the public domain, although original, copyrightable features added to later iterations could not freely be used so long as they remained under copyright — at least following the Sherlock-like logic of Judge Posner’s 2014 opinion in Klinger v Conan Doyle Estate, Ltd. In other words, at some point the 1960s Batmobile will be free for joy rides across the public domain while the 1989 model may not be.

And as I’m assaying the character of the Riddler, I’ll throw one out that my criminal colleague, the Joker, would truly enjoy:

We know from the Supreme Court’s decision in Campbell v. Acuff Rose Music, that parody is a form of fair use. And recent decisions have held that in some circumstances entire characters and scenes as well as entire works of visual art can be copied for fair use purposes, including parody. Since we know that Towle didn’t copy the copyrighted cars completely, what if instead of black, he had painted his replicas pink with purple polka dots and called them Clown Caper Cars instead of Batmobiles? Couldn’t that be construed as a comedic commentary on the serious, macho characteristics of the Caped Crusader and his avenging automobile?

And let’s magnify the mischief by assuming that Towle whispers in his buyer’s ear that she can paint the clown car black once it’s paid for and she drives it off the lot. Wouldn’t that be an application of the first sale doctrine under Section 109(b) in that “the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” At least viewed through the lens of the Ninth Circuit’s brand new dancing baby case, a fair use of a work, such as “transforming” it into a protected parody, constitutes a new work that is “lawfully made.” Perhaps a future Special Guest Villain will have better luck if he avails himself of clever legal counsel prior to producing copycat cars.

Finally, if the Batmobile is now a copyrightable character, will Wonder Woman’s bracelets and Thor’s hammer be appearing as characters in cases at a courthouse near you?

Unfortunately, we can’t tune in tomorrow for the solution to these copyright conundrums as they will be riddles for future courts to unravel.

A Happy Birthday to a New Public Domain Song

I originally wrote about Marya v. Warner/Chappell Music, Inc., the “Happy Birthday To You” case, in June 2013 when the case was originally filed in the Central District of California. Last week, Chief Judge George H. King, in a 43-page opinion, granted plaintiffs’ motion for summary judgment in their declaratory judgment action, holding that the song is in the public domain. The suit only concerned the lyrics as the parties agreed that the melody to the song had long ago entered the public domain. The dispute arose when filmmaker, Jennifer Nelson, wanted to use the ditty in a documentary about the song and  Warner/Chappell wanted a $1500 fee to it in her film. Like most of us, she felt the song was in the public domain and the lawsuit ensued.

The case is interesting from an evidentiary point of view because Judge King disallowed the usual presumption of the validity of the 1935 copyright registration for a piano arrangement of the song. The registration referenced new material to an existing work (i.e., a derivative work registration) and the parties agreed that sole author listed for the new material did not write any of the lyrics to the song.

The Court denied plaintiff’s motions on the basis that copyright to the lyrics was either forfeited by a 1922 publication of the song without a copyright notice or was somehow abandoned  by the Hill sisters, who wrote the original version of the song in 1893. However, the Court ruled that the Hill sisters never transferred the copyright in the lyrics to Summy Co., Warner/Chappell’s predecessor-in-interest. Accordingly, the copyright registration relied on by Warner/Chappell covers only the particular piano arrangements of the song and not the underlying lyrics.

I’m reproducing the heart of my 2013 post below, not to show how prescient I was in predicting the outcome, but because I used the case involving the universally known song to review a few basic principles of copyright law. As we’re still near the start of the school year, now is as good a time as any to review them again.

What is the public domain? The public domain is the body of works, music, novels, plays, texts, etc., that is no longer (or never was) protected by copyright and is therefore free for anyone to use or adapt.

When is a song in the public domain? As they say in Facebook status land, “it’s complicated.”  For songs written since 1978, a U.S. copyright lasts for the life of the author (or last surviving author if there’s more than one) plus seventy years. If there’s no author, such as a work-for-hire, the term is 95 years. For older works, the U.S. used to have a system of an initial term and then the copyright had to be renewed for, you guessed it, the “renewal term.” For these older copyrights, the initial term was 28 years and the renewal term, through various extensions, was increased to 67 years, for a total of 95 years.  There’s more to it than this, but basically, if a work was written prior to 1923, it’s most likely in the public domain here. Maybe you’re thinking that’s an awfully long time when the Constitution says that copyrights are supposed to be “for limited times.” Larry Lessig thought so when he challenged the 1998 Sonny Bono Copyright Term Extension Act but the U.S. Supreme Court strongly disagreed.

Do I need to get a license to sing “Happy Birthday to You” to my kid at my backyard barbecue? Even assuming the song is still under copyright – and as we’ll soon see that’s a big assumption – the answer is still “no.” U.S. Copyright law gives copyright owners a certain bundle of rights. Among them is the exclusive right to authorize “public performances.” A backyard barbecue, a birthday party in your basement and most other gatherings among “a normal circle of a family and its social acquaintances” is a private performance for which no permission is needed.

What if I sing the song at a gig or at a party of 500 of my closest friends and acquaintances? You’re probably safe to sing the song – or any other copyrighted song. Most public venues where music is performed (concert and catering halls, clubs and stadiums) or broadcast (TV and radio stations) have licenses from “performing rights organizations” such as ASCAP,BMI and SESAC. These companies issue “blanket” licenses to venues and broadcasters (and web sites, too) which allow the licensee to perform all the works in their respective repertories as much as they want.

Why would a filmmaker need a license? The permission that Warner/Chappell sought from Ms. Nelson for her film is known as a “synchronization” or “synch” license because the user is synchronizing music to picture. Whenever a pre-existing copyrighted song is used in any audio-visual work, such as a film, TV show, TV ad or videogame, a synchronization license is required from the copyright owner, usually a music publisher. If you’re using pre-recorded music, then you need permission from both the music publisher of the song and the copyright owner of the recording, typically a record label.

What if I post a video of my kid dancing to a Justin Bieber song? Putting aside issues of taste, technically, you’d need synch licenses from the music publisher(s) of the song and from The Bieb’s label although the actual performance of the video may be covered if the site has licenses from the performing rights organizations. As a practical matter, unless your home video is generating millions of views or you’re selling truckloads of DVDs it’s unlikely that anyone will come after you for a technical violation [unless it’s a video involving a Prince tune and a dancing baby].

So, is “Happy Birthday to You” in the public domain? That’s for the court to decide, but if the facts are as alleged in the complaint and as cited in the  news reports and elsewhere, it seems that the song would be “PD” as we music types say.  The melody is said to come from a song called “Good Morning to All” written in 1893 and, the combination of music and lyrics is said to have appeared in print in 1912, possibly earlier. By my reckoning, if these are the facts, both 1912 and 1893 are prior to 1923. At least one legal scholar, Robert Brauneis, has written a 68-page article (with 320 footnotes!) in which he concludes that the song is in the public domain.

How can Warner / Chappell claim the song is still under copyright? Again, the facts will play out in the lawsuit, but it seems that W/C has a 1935 copyright registration, crediting different writers as the creators of the song. The complaint alleges that this registration is for a piano /vocal arrangement of the song.  Another of the things in the “bundle of rights” a copyright owner gets is the right to make a “derivative work” of the underlying work, such as an arrangement or adaptation. Turning a novel into a film constitutes making a derivative work, which is why the novelist gets paid when the film is made.

For example, the song “Simple Gifts” is a Shaker hymn from the nineteenth century.  Most people know it from Aaron Copland’s arrangement of the tune in his ballet, “Appalachian Spring.” As the original song is PD, anyone can perform the original melody and lyrics or make their own arrangement. But, if you want to use Mr. Copland’s treatment of the work you’ll need permission from Copland’s publisher, Boosey & Hawkes.  So, if the underlying song, “Happy Birthday to You” turns out to be in the public domain, anyone can use it and make their own arrangement of it, as long as they don’t use any particular copyrighted arrangement of the work, such as ones owned by Warner / Chappell.  And, of course, you can write a new song, with your own melody and lyrics, and call it “Happy Birthday to You” as titles are not copyrightable

It will be interesting to see if Warner/Chappell appeals. If not, all of us, including restaurant employees everywhere, can freely sing the “Happy Birthday” song without fear of facing infringement liability.

Bieber, Usher and the Fourth Circuit Dancing About Architecture

On a certain level, the June 18 decision from the Fourth Circuit in Copeland v. Bieber is fairly routine, with only the click-bait of pop star defendants Justin Bieber and Usher setting the case apart from any other copyright infringement case involving music. However, since this is an appellate decision, unlike the jury verdict in the Blurred Lines case which involved far more ink spilling and hand wringing, one might think there would be some precedential value here.

As we’ll see, this precedential value is somewhat limited as the Court merely reversed the granting of defendants’ motion to dismiss and remanded the case back to the trial court. However, the case does provide a primer as to what needs to be proved in a copyright infringement action involving music as well one in the limitations of trying to describe distinctions in two different songs.

Plaintiff Copeland alleges that Bieber and Usher infringed plaintiff’s song, entitled Somebody to Love in three different versions of their song, also called Somebody to Love. Absent direct proof of copying, a plaintiff must prove defendant(s) had access to his work and that the allegedly infringing work is “substantially similar” to plaintiff’s work. Defendants did not deny access to plaintiff’s song – only that their work and his were not “substantially similar.”

Here’s where the fun begins. To analyze whether there’s substantial similarity between the two works, the Court actually considers two different types of similarity: intrinsic similarity and extrinsic similarity. “Intrinsic similarity” is whether the intended audience, here the general public, taking into account all elements of the work (including non-copyrightable ones such as the song’s title or “feel”) could reasonably determine that the two songs in question are “substantially similar.”

On the other hand, “extrinsic similarity” purports to be an objective view of the original elements (and only the original elements, i.e., the copyrightable expression) in the two works. In other words, this is where two experts go to battle by picking apart specific original components of the two songs (such as the melody and lyrics) in a process the Court referred to as “analytic dissection.” (Parenthetically, despite plenty of analytic dissection by two highly qualified experts in the Blurred Lines case, the jury – and the popular press – seemed to focus far more on intrinsic, rather than extrinsic similarities.)

The Fourth Circuit undertook a de novo review as to whether a reasonable jury, taking into account the “total concept and feel” (which, again, may include both copyrightable and non-copyrightable elements), could find sufficient “intrinsic” similarity to support a finding of infringement. The Court started by listening to all four songs (plaintiff’s and the three versions of defendants’). The Court treated the three versions of defendants’ song as one: “By the unscientific intrinsic standard, the three Bieber and Usher songs are not just substantially similar to one another; they are the same.”

The Court first noted that although plaintiff’s song and defendants’ were in different genres (“the Copeland song is squarely within the R&B subgenre, while the Bieber and Usher songs would be labeled dance pop, perhaps with hints of electronic”), such differences in feel are not dispositive on the issue of substantial similarity:

For if a difference in genre were enough by itself to preclude intrinsic similarity, then nothing would prevent someone from translating, say, the Beatles’ songbook into a different genre, and then profiting from an unlicensed reggae or heavy metal version of “Hey Jude” on the ground that it is different in “concept and feel” than the original.

Fair enough. But what was the “intrinsic” similarity” the Fourth Circuit found which required reversal? The Court focused on similarities in the chorus or “hook” of both songs, which is typically the most important – and most repeated – part of any song. The Court then noted certain substantial similarities, in addition to the use of the uncopyrightable element of the title in the chorus:

It is not simply that both choruses contain the lyric “somebody to love”; it is that the lyric is delivered in what seems to be an almost identical rhythm and a strikingly similar melody. To us, it sounds as though there are a couple of points in the respective chorus melodies where the Bieber and Usher songs go up a note and the Copeland song goes down a note, or vice versa. In our view, however, a reasonable jury could find that these small variations would not prevent a member of the general public from hearing substantial similarity…. In both the Copeland song and the Bieber and Usher songs, the singing of the titular lyric is an anthemic, sing-along moment, delivered at high volume and pitch.

That’s pretty much the extent of the analysis, folks. Without the ability to hear, as the Court did, plaintiff’s and defendants’ songs side by side, how is this at all helpful? As anyone who’s clicked on my bio knows, I studied music in college, have represented composers and songwriters of various stripes and have done a fair amount of songwriting myself. And I can’t make much sense of the Court’s musical descriptions – and I doubt most other practitioners would find much guidance here, either.

In copyright cases involving visual works, courts routinely include pictures of the works in question, either directly in the text of the opinion or in an appendix. In this digital age, there’s no reason not to do the same with musical works, such as having a link to recordings on YouTube, SoundCloud, or the parties’ web sites. The Court, as the Supreme Court does with its summary syllabus, can include an appropriate disclaimer. Perhaps then these cases wouldn’t reflect the oft-quoted quip (that may have originated with Martin Mull) that “writing about music is like dancing about architecture.”

So what’s the takeaway here? For practitioners, if there’s any similarity at all in the “hook” in two songs, especially if they both include the title phrase, a plaintiff is likely to survive a motion to dismiss. That’s a boon for litigators and a bane for pop stars. Of course, here we can expect Bieber, Usher & Co. to move for summary judgment after discovery.

And finally, it’s nice to see law clerks in a Circuit other than the Second and Ninth (and at least regarding music, the Sixth), having some fun with a high profile infringement case.

The Director’s Cut Out of the Copyright by the Second Circuit

In its June 29 opinion in 16 Casa Duse, LLC v. Merkin, the Second Circuit, citing the Ninth Circuit’s en banc decision in Garcia v. Google, held that a director does not have an independent copyrightable interest in a motion picture. In addition to affirming the District Court’s granting of summary judgment in favor of plaintiff producer, the Court’s 40-page decision also affirmed the plaintiff’s award of costs and attorney’s fees.

Plaintiff’s principal, Robert Krakovski, is the producer of a short film called Head’s Up. Krakovski purchased the film rights from the author of the underlying work and asked defendant, Alex Merkin, to direct the film for a fee of $1500.

Krakovski then proceeded to do what producers do: he assembled the film’s crew of about 30 people, including additional producers, cameramen, technicians and actors. He made all final hiring decisions. All personnel except Merkin entered into written work-for-hire agreements which stated that plaintiff would own and control all of the results of their collective efforts, including the worldwide copyrights to the film.

Krakovski clearly intended that Merkin sign a similar work-for-hire agreement while Merkin balked at this by refusing to respond to Krakovski’s emails. Meanwhile, Krakovski moved forward with the production, including scheduling, and scouting locations. Krakovski was still trying to get Merkin to sign an agreement a week before shooting was to commence. Despite the lack of a written agreement, Merkin directed the three days of shooting for the film.

Thereafter, with the main work-for-hire agreement still not signed, Krakovski asked Merkin to edit the film and the parties, sometimes directly and sometimes through Merkin’s lawyer, Reichman, attempted to negotiate a “media agreement,” which would have included the work-for-hire language. Krakovski provided Merkin with a hard drive of a rough cut of the film for Merkin to edit — despite their being no finalized agreement.

Notwithstanding his concession that Krakovski owned the rights to the screenplay, Merkin asserted that he owned the rights to the “rough cut” of the film and that Krakovski could not use Merkin’s work in the final film without his permission. While the dispute continued, Merkin registered a copyright in the “raw footage for the film Head’s Up” without informing Krakovski and listing himself as the sole author.

Krakovski submitted the film to various festivals and scheduled a private screening in New York City, which was to be followed by dinner at a nearby restaurant which he reserved with a non-refundable deposit. However, Merkin  crashed the party with a purported “cease and desist” notice to the screening venue, which made the venue cancel the screening, which, in turn made Krakovski lose his deposit with the restaurant. The lawsuit followed.

Plaintiff sought a judgment declaring: a) that plaintiff did not infringe defendants’ copyright; b) that defendants owned no copyright interest in the film; and (c) that Merkin’s copyright registration was invalid. Plaintiff also asserted state-law claims for tortious interference as well as attorney’s fees under both Section 505 of the Copyright Act and 28 U.S.C. § 1927. Defendants asserted various claims, including a judgment that a director of a film is an “author” for purposes of copyright.

The District Court granted summary judgment to plaintiff on all claims and assessed attorney’s fees against Merkin and sanctions against his attorney, Reichman. After some additional motions and submissions, the District Court entered a final order assessing damages from the canceled screening event in the amount of $1,956.58 and costs and attorney’s fees of $185,579.65, $175,634 of which Merkin and Reichman would have joint and several liability, with the remaining $9,945.65 assessed solely against Reichman. Merkin and Reichman appealed.

The Second Circuit framed this issue as follows:

This case requires us to answer a question of first impression in this Circuit: May a contributor to a creative work whose contributions are inseparable from, and integrated into, the work maintain a copyright interest in his or her contributions alone? We conclude that, at least on the facts of the present case, he or she may not.

Turning to the copyright claims, the Court first stated that the parties agree that they are not “joint authors” under §101 of the Copyright Act as joint authorship requires the intent of the parties to create a merged, unitary whole and such intent was clearly lacking. A finding of joint authorship (which would include one of joint ownership since the copyright would vest in the film’s authors) would preclude any claims of either infringement or tortious interference since you can’t infringe (or interfere with) your own work against your co-owner. The parties also agreed that Merkin’s efforts cannot be deemed a work-for-hire as he never signed a written agreement to that effect as required by statute.

Having disposed of the copyright preliminaries, the Court then turned to the key issue as to whether Merkin’s contributions to the film could be separately copyrightable:

We have never decided whether an individualʹs non‐de minimis creative contributions to a work in which copyright protection subsists, such as a film, fall within the subject matter of copyright, when the contributions are inseparable from the work and the individual is neither the sole nor a joint author of the work and is not a party to a work‐for‐ hire arrangement. We answer that question in the negative on the facts of the present case, finding that the Copyright Actʹs terms, structure, and history support the conclusion that Merkinʹs contributions to the film do not themselves constitute a ʺwork of authorshipʺ amenable to copyright protection. (citation omitted).

The Court bolstered its conclusion by endorsing the Ninth Circuit’s recent en banc decision Garcia v. Google which reversed Judge Kosinski’s opinion holding that an actor may have a separately copyrightable interest in her performance:

We agree. Filmmaking is a collaborative process typically involving artistic contributions from large numbers of people, including—in addition to producers, directors, and screenwriters—actors, designers, cinematographers, camera operators, and a host of skilled technical contributors. If copyright subsisted separately in each of their contributions to the completed film, the copyright in the film itself, which is recognized by statute as a work of authorship, could be undermined by any number of individual claims.

The Court  therefore concluded these contributions are not independent “works of authorship” under the Copyright Act, unlike free-standing, independent original works such as dances or songs that may be incorporated into a film.

Having disposed of Merkin’s claim to copyright in his contribution to the film, the Court then turned to his claim to own the copyright in the raw footage from which the final film was to be fashioned. Since the parties are not “joint authors,” the analysis then turned to which party was the “dominant author” of the film.

The Second Circuit agreed with the District Court that notwithstanding Merkin’s significant contributions (e.g., camera work, lighting, blocking, actor’s delivery of lines, wardrobe, etc.), Casa Duse “exercised far more decision making authority” particularly with respect to its “agreements with outsiders” noting that plaintiff executed all relevant third-party agreements for the production. As dominant author, the Court concluded that plaintiff owns the copyright in the finished film  — as well as the underlying raw footage.

The Court did throw Merkin a bone, finding that he did not engage in tortious interference with business relations under New York law. Finally, the Court upheld the joint and several liability for costs and attorney’s fees against Merkin and Reichman. First the Court noted that even though plaintiff did not file the copyright registration in issue and sought a declaration of non-infringement (as opposed to seeking damages for copyright infringement), attorney’s fees were nonetheless available under §505 of the Copyright Act. And the joint and several liability was appropriate under 28 U.S.C. §1927.

The holdings of both this case and the Ninth Circuit’s Garcia decision that inseparable, integrated contributions to a motion picture are not independently copyrightable will probably have somewhat limited application as actors, directors and other contributors routinely sign work-for-hire agreements.  And the Second Circuit took pains to limit its holding to the particular facts presented. It will be interesting to see how these holdings may be applied to other collaborative efforts, such as creating and recording popular songs, although work-for-hire agreements are commonplace there as well. As for disputes between “collaborators” who are clearly not joint authors, the Second Circuit’s guidance (even absent a specific test) as to who is a “dominant author” and therefore the owner of the copyright in the work, should be helpful.