Righthaven Copyright Suits and the Fair Use Defense

In a major setback to Righthaven, LLC in one of its copyright infringement cases, a federal judge recently ruled that defendants Kayse Jama and the Center for Intercultural Organizing (“CIO”) engaged in fair use as a matter of law when they posted an article from the Las Vegas Review-Journal (“LVRJ”) that was copyrighted by Righthaven (For background on Righthaven and its business model, see “Copyright Infringement in the Digital Age: Is Righthaven Using the Right Solution?”).
Using the four-factor legal standard for fair use (purpose and character of the use; nature of the copyrighted work; amount/substantiality of the portion used in relationship to the work as a whole; and effect of the use upon the potential market), Judge James Mahan ruled that Jama and CIO met all four criteria necessary to constitute fair use. One of the most surprising aspects of this ruling involves the third factor. Even though the defendants copied the article in its entirety, the judge ruled that the amount was reasonable. Mahan reasoned that because the purpose of the use was to educate the public, and the work was factual, “it would have been impracticable for defendants to cut out portions of the article or edit the article down.”

Regarding the fourth factor of fair use, the opinion also questions whether Righthaven, which is not itself a newspaper and is merely using the copyright to file infringement lawsuites, can claim LVRJ’s market as its own.

It remains to be seen how this ruling will affect the numerous other cases that Righthaven has filed against bloggers who have posted LVRJ content, but if the posting of an entire article can be considered fair use, and if Righthaven does not have an actual market to base its claims upon, this could jeopardize its other claims of copyright infringement.

Stitch Designs: A New Standard for Trademark Dilution?

Michael Atkins recently published an interesting post on his “Seattle Trademark Lawyer” blog entitled “Ninth Circuit Changes Dilution Standard”.  Unlike trademark infringement, which requires a likelihood of confusion between two marks, trademark dilution 

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only applies to famous marks. If a mark lessens the capacity of a famous mark to identify and distinguish good and services, it may be diluting the famous mark. In a case involving the stitch designs on the pockets of Levi Strauss and Abercrombie & Fitch jeans, the Ninth Circuit reversed the district court’s decision, stating that the two marks no longer need to be “identical or nearly identical”.  Atkins posted side-by-side drawings of the two stitch designs.  Take a look and draw your own conclusions.

Righthaven Copyright Suits – An Update

Several months ago, we published a blog post entitled “Copyright Infringement in the Digital Age: Is Righthaven Using the Right Solution?” discussing a spate of lawsuits filed by Righthaven, LLC against bloggers who posted content copyrighted 

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by Stephens Media, the publisher of the Law Vegas Review-Journal.

Copyright and trademark attorney Ron Coleman, owner of the “Likelihood of Confusion” blog, recently posted an update on this topic.  Coleman, along with Las Vegas attorneys Marc Randazza and J. Malcolm DeVoy, filed an amicus brief on behalf of the Media Bloggers Association in one of these lawsuits.  This brief, which is posted in its entirety on Coleman’s blog, calls into question the propriety and scope of copyright statutory damages in this type of lawsuit. Much is at stake because statutory damages can greatly simplify the Plaintiff’s task of having to otherwise prove up actual damages.


Hip2Save Founder Appears on TodayShow.com

We like to watch our clients succeed!  Client Collin Morgan of Hip Happenings, LLC, recently appeared on the today’s Money segment of TodayShow.com discussing “5 Tips for the Coupon Newbie.”  Here’s the link to the video.

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Collin is the founder of Hip2Save.com, a highly successful blog dedicated to helping people save money.  As noted on her blog, this is Not Your Grandma’s Coupon Site.

We wish Collin and Hip2Save continued success!  See her blog at Hip2Save.com.


Who Really Owns Facebook … And Why

Social networking giant www.facebook.com was in the news again recently when the Wall Street investment firm Goldman Sachs pumped $500 million into the enterprise.  With a membership of more than 500 million subscribers and an estimated value of about $50 billion, Facebook more closely

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 resembles a sovereign state than a website.  Because of its high monetary value and seemingly limitless growth potential, a number of people have attempted to lay claim to this cyber-goldmine.  One such prospector, Paul D. Ceglia, is staking his claim on a nearly eight-year-old contract he allegedly entered into with Mark Zuckerberg, the founder and CEO of Facebook, Inc.

Ceglia claims that in the spring of 2003, he contracted Zuckerberg (a student at Harvard University at the time) to develop a database and programming language called StreetFax.  According to the contract, Zuckerberg was to be paid $1,000 for his work on the StreetFax project.

Under current copyright law, whoever creates an original work of authorship, such as a computer program, is considered its author.  The author is also the owner of copyright unless there is either a written agreement assigning the copyright to another person or entity, or the work was created by an employee in the course of his employment.  In cases of works made for hire (either by agreement or by employer-employee relationship), the employer or commissioning party is considered to be the author.

Because Zuckerberg was an independent contractor, a relatively simple work-for-hire agreement between him and Ceglia could have been drafted to assign the rights to the StreetFax software to Ceglia.  However, the matter was complicated by another project that Zuckerberg was working on, a project in which Ceglia wanted to invest.  This project eventually developed into the multi-billion dollar venture known as Facebook.

Rather than draft a separate investment agreement for the Facebook project, an agreement entitled “‘Work for Hire’ Contract” was drawn up that comingled the two projects.  Ceglia agreed to pay Zuckerberg $1,000 for half interest in the StreetFax software and an additional $1,000 for half interest in the project “designed to offer the students of Harvard university [sic] access to a wesite [sic] similar to a live functioning yearbook with the working title of “The Face Book‘.”  Regarding “The Face Book,” Ceglia was to acquire an additional 1% interest for each day the project was delayed beyond the completion date of January 1, 2004.  Since Zuckerberg didn’t complete the project until February 4, 2004, Ceglia claims he now owns 84 percent of Facebook.

After Ceglia finally filed suit against Zuckerberg and Facebook, Inc. in state court in upstate New York on June 30, 2010, the judge issued a temporary restraining order preventing Zuckerberg and Facebook from selling or transferring any assets.  The case has since been removed to federal court, where Zuckerberg and Facebook filed a motion to dissolve the TRO.  A hearing on this motion was held July 20, and the TRO was allowed to expire three days later.

There are a number of problems with Ceglia’s case. First and foremost is whether his claim is barred by the statute of limitations, which in New York State is six years for contracts.  Assuming he somehow overcomes this legal obstacle, there is a question as to whether Zuckerberbg actually signed the contract, which was neither witnessed nor notarized.  During the hearing, Facebook’s attorney stated that “whether he signed this piece of paper, we’re unsure at the moment,” but also claimed that there were “serious questions” about the contract’s authenticity.

Another problem is the chronology of events. The contract was allegedly signed on April 28, 2003, but Zuckerberg didn’t register the domain name thefacebook.com until January 2004, and even the predecessor to The Face Book, Facemash, wasn’t created until late autumn of 2003.

It remains to be seen how this case will finally be decided, but one thing is certain.  Since no one knows in advance what the ultimate value of intellectual property like software will be, it’s vitally important to clearly establish from the beginning who owns the rights to such intangible assets.


Hard Knocks Over Hard Rock

What can happen when an international corporation goes after a local disc jockey at a college radio station in Amarillo, Texas for trademark infringement?  If the DJ is internet savvy and makes enough noise about it, the corporation may back down.

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In the summer of 2010, Brian Basher, music director atKACV FM 90, Amarillo College’s radio station, began hosting a 2-hour weekly syndicated radio program calledHard Rock Nights that airs on over 20 affiliates and in three countries.  In order to promote this show, Basher registered the domain name www.HardRockNights.com.  In November of 2010, the Business Affairs Department of Hard Rock Café International (HRCI), owner of the cafés, hotels and casinos that bear the Hard Rock name, sent Basher a cease and desist notice by email. The notice, cryptically signed by “/ipenforcement/”, demanded that Basher transfer the domain name, take down all content, and cease and desist from registering any similar domain names or using any terms that are confusingly similar to HRI’s famous trademark.


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Undeterred, Basher began using Facebook, Twitter, blogs and online press releases to publicize his predicament.  Fans and friends followed suit by drumming up support for the beleaguered DJ.  About a day after receiving the cease and desist notice, Basher received a second letter, this time from the Senior Director of Business Affairs at HRCI, stating that his intended use of www.HardRockNights.com “would amount to non-infringing use of the term hard rock.”  The second notice also revealed that HCRI “automatically issued, via its monitoring service provider, its cease and desist notice.”  Although the second notice thanked Basher for the “additional information” he provided as to how he intended to usewww.HardRockNights.com, Basher insists that he provided no such information to HRCI.  It would appear that HRCI withdrew its notice in response to the negative publicity received in social media.

Automated software may be a cost effective way to initially identify potential infringers, but in this case, spitting out a cease and desist notice without first reviewing the evidence resulted in unwanted publicity and an avoidable retraction.


Geek Squad v. God Squad

One of the more important requirements for maintaining a trademark is policing, the zealous pursuit of anyone who uses the mark without the owner’s permission. Unauthorized use, even parody in some cases, can tarnish the owner’s brand and cut into sales (See Trademarks & Parodies: The North Face versus The South Butt).  But what about when that use

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is in a totally unrelated field and the profits derived are spiritual rather than monetary in nature?

For the past several years, Father Luke Strand, an associate pastor at the Holy Family Parish in Fond du Lac, Wisconsin, has been driving around in his Volkswagen Beetle® with decals attached to the doors that read: God Squad.  Anyone who’s needed technical support for electronic equipment in recent years is probably familiar with the Geek Squad® vehicles that transport “techies” from local Best Buy® stores on their house calls. Because the Geeks likewise drive VW’s with a similar logo, Best Buy decided to write a cease-and-desist letter, demanding that Father Strand remove the infringing logo from his car. Father Strand has since complied with Best Buy’s demands.  Not totally unsympathetic to the priest’s mission, Best Buy offered to help him design a substitute logo that wasn’t as confusingly similar to their own.

What legal rights does Best Buy have in this case? According to records of the U.S. Patent and Trademark Office, BBY Solutions, Inc. (a subsidiary of Best Buy) is the owner of four federal registrations and a pending application for the Geek Squad logo.  The goods protected by these registrations include a variety of computer peripherals and accessories, and even t-shirts; the services protected include the installation and repair of a wide range of consumer electronics. But none of the registrations claim Christian ministry services.

Does this mean that Best Buy has no grounds to go after Father Strand?  Not necessarily.  U.S. trademark law provides certain rights against dilution of so-called “famous marks” when those marks are “tarnished” or “blurred” by unauthorized use, even if that use isn’t in the same area of goods or services as the famous mark. Tarnishing involves the use of a mark in a disparaging or unsavory way, like using the Coca-Cola logo on bubble gum made to resemble cocaine. Blurring refers to the lessening of a famous mark’s selling power through use with unrelated goods or services. Although there’s no apparent evidence that Father Strand tarnished the Geek Squad logo, a case might be made that over time, consumers could associate the Geek Squad less with fixing computers and more with saving souls.

Another possible ground for infringement involves trade dress. Had Father Strand affixed the God Squad logo on the doors of a Chrysler PT Cruiser® or a Nissan Cube®, Best Buy probably wouldn’t have a case.  But because the Volkswagen Beetle® is so closely associated with the Geek Squad, like the distinctive shape of the Coca-Cola® bottle, the “feel” of the vehicle could be considered trade dress. Maybe if the doors and roof of Father Strand’s care were white, an even stronger case could be made.

Any business has the right to defend its intellectual property from infringement. But when a Goliath like Best Buy goes after a David like Father Strand, the negative publicity can sometimes outweigh whatever benefit might be derived. Sometimes a fight with David is more fight than Goliath wants. And it doesn’t take a clergyman to know who ultimately won the first match between David and Goliath.


Copyright Infringement in the Digital Age: Is Righthaven Using the Right Solution?

Before there was an Internet, wholesale infringing on someone’s copyright could be a time consuming and capital intensive endeavor. Through most of the last century, would-be infringers needed a printing press, and even with the advent of the mimeograph and copy machines, paper and distribution channels were required.  But today, a copyrighted work that is posted online can be easily copied and distributed throughout the world with a few clicks of a mouse.  In the case of pirated software and other high-ticket items, it may make sense to go after the infringers. But what about infringers that cut and paste articles from online newspapers and 

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magazines on their own websites or blogs?  Is it cost effective to take them to court?

In March 2010, Stephens Media, publisher of the Las Vegas Review-Journal, began selling copyrights to that paper’s content to Righthaven, LLC, a company whose CEO, Steve Gibson, is an attorney practicing law in Nevada. Since then , Righthaven has been scouring the Internet for Review-Journal articles that have been posted without permission from the copyright holder. By the end of July 2010, Righthaven had filed at least 80 copyright infringement lawsuits in Nevada federal district court against a variety of website owners and bloggers.

Gibson’s strategy for going after copyright infringers is a bit unorthodox. The standard procedure before filing a copyright infringement suit is to send a cease and desist letter, giving infringers an opportunity to stop their activities before taking them to court. In addition, under the Digital Millennium Copyright Act (“DMCA”), there are provisions for sending a “takedown notice” to an infringing website before taking further legal action. Righthaven has apparently done neither, choosing instead to serve its infringers with federal lawsuits without prior warning. Faced with the prospect of going to trial on Righthaven’s turf, many of the defendants have chosen to settle early in the case.

Since few of these infringers make any money from their websites or blogs, and even fewer, if any, operate online publications that directly compete with the Review-Journal, some argue that such cutting and pasting could be defended under the “fair use doctrine” of the U.S. Copyright Act. Under this doctrine, some copying without permission is considered “fair use” (and therefore not infringement) depending on the purpose and character of the use, the nature of the copyrighted work, the amount of the copyrighted work being copied, and the effect of that copying has on the potential value of the copyrighted work.  Since many of the website owners and bloggers seek only to inform and educate their readers and not to turn a profit, fair use might be a viable defense in some cases.  But from Righthaven’s point of view, the unauthorized posting of its copyrighted content greatly reduces the potential value of that content by driving traffic away from the Review-Journal’s website and decreasing its advertising revenues.

It remains to be seen whether Gibson’s strategy will prove profitable for Righthaven over the long haul. In a similar move against music file sharing, the Recording Industry Association of America (RIAA) sued approximately 20,000 infringers over five years, spending $64 million in legal costs but only recovering $1.3 million in damages and settlements. However, if suing for infringement of Review-Journal content turns out to be a money making operation, Stephens Media controls over 70 other newspapers in nine states which could join the fray, with the possibility of other media groups to follow. In the meantime, website owners and bloggers can avoid possible liability to linking to articles of interest rather than copying the entire content directly onto their sites.  Getting permission to use content is the safest course.


The JSPIPE: Coordinating Efforts to Secure IP Rights

Intellectual property (IP) is a valuable asset, not only for the producers and creator of this intangible property, but also for the overall economy that benefits from the innovation and creativity this property represents.  However, the value of intellectual property is greatly reduced when
unauthorized users are allowed to exploit this property through counterfeiting, piracy and other illegal activities. Enforcing IP rights in a global economy requires a coordinated effort among a variety of governmental agencies.  The federal government recently announced a plan to improve those efforts.

The 2010 Joint Strategic Plan on Intellectual Property Enforcement (JSPIPE), a 65-page document, was issued in June 2010 by Office of the Intellectual Property Enforcement Coordinator (IPEC).  The JSPIPE coordinates the efforts of eight government agencies: the Departments of Agriculture, Commerce, Homeland Security, Justice and State; as well as the Food and Drug Administration, United States Trade Representative and the Copyright Office.  A total of 33 Enforcement Strategy Action items are organized into six categories: (1) Leading By Example; (2) Increasing Transparency; (3) Ensuring Efficiency and Coordination; (4) Enforcing Our Rights internationally; (5) Security Our Supply Chain; and (6) Building a Data-Driven Government.

Click here to read the entire document.