A Real Life Clash of the Titans: Three Year Battle Heading Towards an Epic Showdown

Court documents including motions for summary judgments made by Google and media- giant Viacom were made public this Thursday, and boy were they shocking.

The motions were made in regards to a 2007 suit filed by Viacom against YouTube for an alleged 160,000 instances of copyright infringement, with Viacom seeking damages exceeding one billion dollars. Google, who owns YouTube, has defended itself stating it complies with U.S. copyright laws, and takes appropriate steps to remove infringing content from its YouTube website. The unsealed documents are filled with surprising allegations and internal correspondence from YouTube founders that spurred Google to respond with some shocking claims of its own.

Viacom Strikes

Google hopes to shield itself from liability under the Digital Millennium Copyright Act’s Safe Harbor provision, which allows a host of copyrighted material protection from infringement charges if it complies with valid takedown requests from copyright owners, and does not profit from the infringement of protected content.

The DMCA limits the liability of service providers for infringing material on websites (or other information repositories) hosted on their systems.  It applies to storage at the direction of a user.  In order to be eligible for the limitation, the following conditions must be met:

• The provider must not have the requisite level of knowledge (actual or apparent) of the infringing activity.

• If the provider has the right and ability to control the infringing activity, it must not receive a financial benefit directly attributable to the infringing activity.

• Upon receiving proper notification of claimed infringement, the provider must expeditiously take down or block access to the material.

When Google purchased YouTube in 2006 for $1.65 billion, it was the number one website for hosted video content. Viacom argues that YouTube profited from hosting infringing content through ad sales and web traffic, and therefore Google should not receive safe harbor from liability. Citing several emails from YouTube founding members, Viacom contends the founders built up popularity for their website by turning a blind eye, and allowed copyrighted content to remain on their website in hopes of becoming the next Napster. This argument would be difficult to prove but for the emails between YouTube founders, especially one particularly damaging email from YouTube co-founder Steve Chen where he says “if you remove the potential copyright infringements …  site traffic and virality will drop to maybe 20% of what it is.”

Google may have further difficulty arguing for Safe Harbor protection if Viacom can establish that the YouTube founders had the requisite knowledge that infringing content was being hosted on their website. According to the released court documents, the founders’ emails show they were aware YouTube was hosting copyrighted content, but considered moving the website rather than takedown the content. In one email, one founder scolded the others, stating “please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.” It is important to note that the email excerpts are from Viacom’s motion for summary judgment, and what they claim are undisputed facts, but have not yet proven to be accurate. Google claims the emails were grossly misrepresented, omitting words that completely changed the context of the emails altogether.

Google Responds

Viacom may have made some strong allegations, but Google dropped some huge bombshells of their own, accusing Viacom of deliberately uploading content to YouTube in attempts to bolster their argument that the website hosted copyrighted materials.

From Google’s blog post this past Thursday:

For years, Viacom continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there. It hired no fewer than 18 different marketing agencies to upload its content to the site. It deliberately “roughed up” the videos to make them look stolen or leaked. It opened YouTube accounts using phony email addresses. It even sent employees to Kinko’s to upload clips from computers that couldn’t be traced to Viacom. And in an effort to promote its own shows, as a matter of company policy Viacom routinely left up clips from shows that had been uploaded to YouTube by ordinary users. Executives as high up as the president of Comedy Central and the head of MTV Networks felt “very strongly” that clips from shows like The Daily Show and The Colbert Report should remain on YouTube.

If Google’s allegations are true, they could take a big bite out of Viacom’s case. If Viacom deliberately uploaded protected content to YouTube through alias accounts, Google can argue they have no duty to remove content posted by the actual copyright owners since no infringement exists when the content in question was in control of its owner. In other words, if Viacom had the ability to post the content onto YouTube, Viacom also had the ability to remove said content as well. This is a strong argument for Google; however, Viacom is alleging over 160,000 instances of copyright infringement, which may not all be the result of Viacom posting content itself.

This case is shaping up to be the biggest copyright case since Napster, and may ultimately help better-define the duties placed on website hosts and ISPs in regards to DMCA takedowns and obligations to self-police. Many consider the lawsuit an egregious case of sour grapes on the part of Viacom, who failed to purchase YouTube after repeated attempts, questioning why Viacom is suing a company it once believed “would make a transformative acquisition … that would immediately make [them] the leading deliverer of video online, globally.”

A ruling on both sides’ motions is set for a June. Stay tuned for more fireworks.

Sources:

Viacom’s  Statement of Undisputed Facts

Google’s Statement of Undisputed Facts

Rejected: A Lesson in Scandalous or Immoral Trademarks

On Monday, the United States Supreme Court rejected an appeal from a group of Native Americans asking the court to cancel registration of the Washington Redskins trademark due to its derogatory nature. The court’s rejection means the Washington Redskins retain federal protection for the Redskin mark and may continue to use the name. You may recall the USPTO’s infamous decision to grant protection for the mark “Redskins” a term many feel is derogatory towards Native Americans.

* It is important to note this legal battle never affected the Washington’s ability to use the Redskin name, but instead was limited to whether the Redskins mark would retain federal trademark registration and protection.

While the case may have received its proverbial nail in the coffin, it does shed light into an often misunderstood area of trademark law.

Absolute Bar to Registration

Federal trademark law bars registration of marks comprised of immoral, deceptive, or scandalous matter. This provision of the current Lanham Act of 1946, which governs trademark law today, is a carry over from the original Trademark Act of 1905.  While the issue is addressed on a case by case basis and examples of what is and is not permissible vary greatly, in general, the Act barsmarks that are shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable; and give offense to the conscience or moral feelings.

According to the Trademark Manual of Examining Procedure, all examiners must provide sufficient evidence to support their decision to deny trademark registration due to immoral or scandalous matter. This evidence may come in the form of dictionary definitions, relevant articles, and even internet websites. This evidentiary standard does not exist in a vacuum, however, and is somewhat flexible. Courts have ruled the examining attorney must make this determination not in isolation, but in the context of the goods in the marketplace and in view of contemporary attitudes.

Some have criticized this evidentiary standard as too flexible and gray. There are some marks that on their face seem scandalous or immoral but have nevertheless earned federal registration. In 2007, a mark containing a derogatory term for a lesbian was approved by the USPTO after it was previously rejected. Attorneys for the applicant argued that the mark was a source of honor and pride, and not considered derogatory by a substantial portion of the gay and lesbian community. The attorneys stressed the applicant’s intent was not to disparage, discriminate, or otherwise offend the gay community through the use of the mark. Even so, the examining attorney rejected the mark stating, “we’re looking out for the sensitivities of the general public more than that of a specific applicant.” However, four years after the initial application was filed, the Trademark Trial and Appeal Board allowed registration of the mark after considerable amounts of testimony was given on the empowering nature of the questionable term contained in the trademark.

So how does one seemingly offensive mark earn protection when another is rejected?

When determining whether a mark is scandalous or immoral an examiner must consider the context of the applicable marketplace for the goods or services identified in the trademark application. In the aforementioned case, the applicant’s mark earned protection mainly because the marketplace for the goods associated with the mark was the gay community who did not find the mark disparaging. Also factoring into the decision to register the mark is the requirement for examiners to consider the nature of the mark in light of contemporary standards.

This leads me to wonder what would happen if the Washington Redskins applied for the mark in today’s society. Do you think a substantial composite of the general public find the term “Redskin” disparaging, barring it from registration?

I would love to hear your comments on this post.

Musicians Just Made a New Best Friend in Google

Google has turned its attention to music with three new services that will benefit both fans and artists alike.

Now when Google users run a search for a music-based topic such as an artist, song title or lyrics, they will receive search results including links to audio previews of songs provided by one of Google’s new partners Lala and MySpace’s iLike. After listening, users can purchase songs through links appearing alongside the song previews.

Have you ever heard a song you liked but did not know its artist? Google has solved this longstanding annoyance by implementing a lyrics search feature, allowing users to type a few lines from a song and receive its song title and artist information along with the aforementioned song previews. As if these new features weren’t great enough already, Google has partnered with Pandora, iMeem and Rhapsody to help users discover new music based on their current favorite artists.

These new services are Google’s attempt to tap into the large market of users searching the web for music-related content, which according to Google, amount to 2 out of the top 10 searches on Google today. And, while each of Google’s new music partners offer great services individually, having them all consolidated and incorporated into Google searches is a more convenient way for users to find and purchase music online. This convenience, along with greater accessibility to legal licensed music, are both paramount when illegal music file sharing continues to be commonplace.

Source

ASCAP Takes One on the Chin: Court Rules Ringtones are not Performances

Although many of them are very annoying, popular song ringtones have become a staple in the cell phone industry, amounting to a multibillion-dollar business globally. Even though fees are already collected for ringtone downloads, ASCAP wants to charge cell phone carriers additional fees each time a user’s phone rings. However, thanks to this week’ decision from the New York U.S. District Court, cellphone carriers are not required to pay additional performance royalties each time a ringtone is played or downloaded.

To recap, back in June ASCAP sued Verizon and AT&T, arguing that each time a cell phone rings in a public place, the phone user violates copyright law, and therefore wanted phone carriers to pay performance royalties for ringtones. ASCAP’s argument stemmed from the fact that some cell phone carriers have paid performance royalties in the past and that some continue to do so today. In an amicus brief, the EFF disagreed and argued that requiring performance royalty payments for ringtones would be like charging a driver for listening to a song on the radio with the windows down.

This past week, the federal court agreed with Verizon and AT&T and issued two important rulings. First, a cell phone ringtone played or heard in public does not constitute a public performance of a copyrighted work. The judge declared, “when a ringtone plays on a cellular telephone, even when that occurs in public, the user is exempt from copyright liability, and [the cellular carrier] is not liable either secondarily or directly.” The judge’s decision relied upon section 110(4) of the U.S. Copyright Act that provides an exemption for performances made “without any purpose of direct or indirect commercial advantage.” Pertaining to ringtones, the songs played on phones function more as call alerts rather than performances as they are defined under copyright law.

The court also ruled that a ringtone download does not constitute a public performance of a copyrighted work. This ruling echoes previous sentiments regarding song downloads and is important for cell phone carriers and other digital music distributors alike. Cell phone carriers already pay royalties each time a ringtone is downloaded by a user, and charging additional performance royalties for downloads would be “double-dipping” on the part of ASCAP.

The federal court’s ruling strengthens the principle that digital downloads of a musical work do not constitute a performance as defined under copyright law, and ASCAP’s loss may hurt its chances at lobbying efforts to have Congress expand copyright law’s definitions for public performance of copyrighted works. You may recall earlier this year ASCAP began a campaign to require performance royalties be collected in addition to mechanicals for streaming audio and downloads on iTunes and other digital distribution services even when songs are enjoyed in a private setting.

Source

The Ruling

Apple to Woolworths: Your Apple Falls too Close to Our Tree

In 2008, Australian company Woolworth’s Supermarkets shed its previous Safeway name and rebranded itself with a flashy new logo comprised of a stylized ‘W’ resembling a piece of fruit. Apparently, the new logo is intended to supplement Woolworth’s famous “Fresh Food People” tagline.

With a storied history of policing its famous trademarks, Apple Computers’ attorneys are attempting to block Woolworth’s trademark application with Australia’s IP agency, arguing the new Woolworth logo too closely resembles its well-known apple mark, and would cause a likelihood of consumer confusion.

On the surface, it seems unlikely a consumer would associate the Woolworth logo with Apple Computers and its products, however, Woolworth’s trademark application requests blanket protection for all product fields including electronics and technology. To date, Woolworth has branched out into the electronics market, already selling cell phones, and it’s not too big of a stretch to anticipate Woolworth selling products like computers or other devices in direct competition with Apple. This request for such broad protection, combined with the fact that Apple Computers have been expanding retail stores internationally, bolster Apple’s argument the IP agency reject Woolworth’s application.

Apple has a history of policing its famous trademark. Here are some marks Apple argued were too similar to its own:

From Left to Right: Woolworth, Victoria School of Business Technology, New York City Green Campaign

Source

Warner Music Group & YouTube Kiss & Make Up

Photo Attribution: http://bit.ly/3Oa2PP

Warner Music Group and YouTube are close to finalizing a deal which would bring Warner’s music catalog back onto the internet’s most popular video website.

The impending deal appears to end a feud between the two media giants that began after negotiations to renew their licensing contract fell apart.

Last year, unhappy with the ad revenues it was receiving, Warner issued this statement, “We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide.” Contract talks ceased and Warner pulled its content from YouTube, barring users from including Warner’s songs in their video clips.

However, it appears the two companies have made up, and now Warner’s recording artists and music fans stand to benefit.

While the details of the deal have not been made public, sources close to the agreement claim that Warner will retain the majority of revenue from advertisements appearing alongside music videos, and could sell advertising space to third parties wanting to sponsor particular musicians and videos. In return, Warner would be unable to create its own independent video music site such as Universal’s forthcoming Vivo service.

Most importantly, the agreement ensures YouTube’s dominance over online media content, having licensing deals in place with the big four recording companies in addition to a rumored deal with major movie studios to bring streaming movie rentals to YouTube.

Sources: Wall St. Journal. MacWorld

Will Work for Pennies: Music Publishers Seek More for Digital Downloads

The price of digital music and movie downloads could be on the rise.

ASCAP, BMI, and other royalty collection groups have begun lobbying Congress to pass legislation to require music users and online digital distributors to pay performance fees each time a song, TV show or movie is downloaded. To grasp the significance of these new demands you have to understand a little bit about how artists and music publishers are compensated.

Mechanical Rights

U.S. copyright law grants songwriters and music publishers the right to license to others the ability to record a particular musical composition. However, once a composition has been recorded and released to the general public, any other artist may use the musical composition, but not the actual sound recording, as long as they pay fees to the writer and music publisher. The amount of these fees are set on a statutory basis and are known as mechanical royalties.

Performance Rights

Where mechanical licenses cover the right to record and distribute music, performance royalties compensate writers and publishers each time a song is played or “performed.” Examples of performances include songs played over the radio, background music in a television show, and even music played while you are on hold with a phone operator.

It would be cumbersome for an artist to negotiate and collect royalties each time their music was performed. To make it easier on artists, organizations were formed to negotiate royalty rates with music users and then collect and distribute those royalties back to the music writers and publishers.  In the United States, the two major organizations are the American Society of Composers, Authors & Publishers (ASCAP) and Broadcast Music Inc. (BMI).

The Issue

These organizations along with many music publishers believe mechanical fees do not adequately compensate artists and music publishers in the arena of digital distribution, and now look to extend their collection process to include royalties in three key areas: downloads of music, downloads of movies and television shows, and song snippets or samples.

These royalty groups argue that artists and composers are loosing out on royalties they should otherwise be receiving.

The CEO of Universal Music Publishing Group, David Genzer stated, “In the U.S. while we do get paid mechanicals from iTunes, we are not getting any performance income from Apple yet,” “(On iTunes) you can stream radio, and you can preview (tracks), things that we should be getting paid performance income for.” The desire to collect performance royalties is not limited to just music downloads. Genzer continued, “Also, if you download a film or TV show, there’s no performance (payment) and typically there’s no mechanical (payment) either.”

TV & Film Downloads

Copyright law already provides songwriters and publishers a revenue stream for music used in TV and film. When a song accompanies visual images, the copyright holder is compensated through a synchronization license. Common examples include songs used in television programs, commercials and movies. Although paying copyright holders for the use of their works is important, some consider collecting both performance royalties and synchronization fees as “double-dipping.”

Others like David Israelite, president of the National Music Publishers Association disagree. He stated, “If you watch a TV show on broadcast, cable or satellite TV there is a performance fee collected, but if that same TV show is downloaded over iTunes, there’s not. We’re arguing that the law needs to be clarified that regardless of the method by which a consumer watches the show there is a performance right.”

The lobbying groups face an uphill battle in their efforts for reform, and their success will depend upon whether downloading a song, TV show or movie can be considered a performance.

Under U.S. copyright law, the exclusive right to perform is limited to public performances. The Copyright Act was not enacted to restrict the private performances of copyrighted works. This important distinction allows you to privately listen to a song  for free, where a radio station must pay royalties when it plays that same song. Attaching a performance fee to a digital download may blur the line between the definition of a public and private broadcast of copyrighted material.

Song Snippets & Previews

Right now you can listen to small samples of songs without any compensation owed to songwriters or publishers. This makes sense since a user has not performed a full version of a song. However, the royalty groups want performance fees collected for even small song snippets. For instance, each time you visit the iTunes store and listen to a 30-second preview of a song, Apple would have to payout royalties. This makes more sense when it applies to steaming radio and full songs, but less when it applies to mere previews.

Undoubtedly, collecting performance royalties on mere previews would drive up the price for digital downloads. You cannot help but wonder if the lobbying efforts would be worth the negative backlash, not to mention the potential decline in digital download sales. Digital distribution has thrived not only because of its convenience, but also the price for digital content has remained competitive with the traditional CD format. Who will buy a digital album if the price exceeds that of a CD? Fortunately, a 30-second sample probably qualifies as fair use under current copyright law.

Source: Cnet