Don’t Film Me, Bro!
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DOMINION v. FOX SETTLEMENT
https://apple.news/AsgC0iiY1SvKcGIC-cYPjAg
https://player.fm/series/2738868/359838081
https://www.cnn.com/2023/03/31/media/fox-news-dominion-lawsuit/index.html
https://news.bloomberglaw.com/esg/fox-murdochs-face-new-lawsuit-after-788-million-dominion-deal
FOX and Dominion have settled for $787.5 M. This settlement was reached two hours into the start of their trial, after it was already postponed a day.
This case took over headlines, globally, as the trial ramped up. Many splashy facts came out of discovery, Rupert Murdoch (CEO fo FOX Corp.) was reportedly set to testify, and Judge Eric Davis assigned a Special Master to investigate “discovery issues” from FOX after he had sanctioned them for withholding evidence.
But most interesting is the landmark 130-page ruling, wherein Delaware Superior Court Judge Eric Davis dismantled nearly all of FOX’s defenses.
- Judge Davis decided that there was no need for a jury to establish that the broadcasts were false. The well-circulated quote from the ruling, with italics, capitals, and bold formatting:
- Statements are either “fact” or “mixed opinion”, but not “pure opinion,” which would have allowed FOX the protection of the First Amendment.
Davis wrote, “The context supports the position that the statements were not pure opinion when they were made by newscasters holding themselves out to be sources of accurate information.”
Judge Davis additionally wrote that even if the statements were opinion, Fox News would not be protected under the Constitution, due to them appearing to charge Dominion with the serious crime of election fraud.
- Statements were defamatory per se. Effectively, Dominion’s reputation was so slandered that they did not need to prove damages to hold FOX liable.
FOX’s main statements were: “[FOX] claimed that Dominion committed election fraud; manipulated vote counts through its software and algorithms; is founded in Venezuela to rig elections for dictator Hugo Chavez; and paid kickbacks to government officials who used the machines in the Election… The Statements also seem to charge Dominion with the serious crime of election fraud. Accusations of criminal activity, even in the form of opinion, are not constitutionally protected.”
- FOX cannot invoke the Neutral Report Privilege because the reports were “not made in good faith” and they were “not disinterested”. “[Fox News’] failure to reveal extensive contradicting evidence from the public sphere and Dominion itself indicates that its reporting was not disinterested.”
(NEUTRAL REPORT PRIVILEGE REQUIREMENTS: i) A responsible, prominent organization or individual / ii) Makes a serious charge on a matter of public interest / iii) Against another public figure or organization / iv) The charge is accurately and disinterestedly reported.)
- FOX cannot use Fair Report Privilege because, the accusations being made after the election, this defense does not fit the timeline of their reporting (to lawsuits that sought to overturn the 2020 election).
(FAIR REPORT PRIVILEGE REQUIREMENTS: i) Your source is an official public document or statement by a public official on a matter of public concern / ii) You properly attribute the information to that source / iii) You fairly and accurately portray the information from the document or statement.)
This ruling knocked down nearly all legal arguments for FOX except for actual malice. Actual malice (set by NYT v. Sullivan) is a notoriously difficult standard to meet. Judge Davis input in his ruling: “Actual malice can be proven ‘through the defendant’s own actions or statements.’ But actual malice can also be determined through the subjective determination of whether the defendant entertained serious doubts as to the truth of the statement, which can be proven by inference.”
So what happens now…?
It seems the Special Master has been dropped.
Smartmatic v. Fox News. Another costly defamation lawsuit looms for FOX– Smartmatic is another election technology company who filed a $2.7B defamation suit against FOX in February 2021. A Smartmatic spokesman said: “Dominion’s litigation exposed some of the misconduct and damage caused by Fox’s disinformation campaign. Smartmatic will expose the rest.”
The lawyers for Smartmatic held the previous record for largest settlement in the history of American media defamation, $177M for Beef Products, Inc. et al. v. American Broadcasting Companies, Inc. et al..
(Jon J’s additional note: The Dominion lawsuit has had other rippling effects, as this defamation suit spawned shareholder litigation, and Fox on April 24, 2023 made news by abruptly firing Tucker Carlson, though the reasoning why has not been stated publicly by Fox)
BAD SPANIELS ORAL ARGUMENTS
https://www.cnn.com/2023/03/21/politics/jack-daniels-bad-spaniels-dog-toy-supreme-court/index.html
https://newrepublic.com/article/171333/jack-daniels-parody-chew-toys
https://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1153&context=aublr
Background:
Jack Daniel’s Properties, Inc. v. VIP Products LLC. Docket No. 22-148, United States Supreme Court, on appeal from the Ninth Circuit
As we first discussed in Episode 154, VIP Products produced and marketed a dog toy in the shape of a bottle of Jack Daniel’s Tennessee Whiskey that also bore a striking resemblance to the spirit maker’s distinctive black and white label. The dog toy spoof used the name Bad Spaniels Tennessee Carpet. Jack Daniel’s sued the company for trademark infringement, which eventually led to a bench trial.The district court found that the dog toy infringed and diluted Jack Daniel’s trade dress. However, the Ninth Circuit reversed the lower court, holding that the Rogers test from Rogers v. Grimaldi should have been applied. That test asks (i) whether the allegedly infringing use of the mark was artistically relevant to the expressive character of the underlying work and (ii) whether the allegedly infringing use misleads consumers as to source. The Ninth Circuit also reversed the lower court’s finding of tarnishment due to First Amendment free speech protections.
On appeal to the US Supreme Court, Jack Daniel’s argued that the toy was not an expressive work protected from trademark infringement by the first amendment. Specifically, the Rogers test protects an artistic work under the first amendment unless (i) the artistic work has no artistic relevance to the underlying work or, (ii) if artistic relevance is present, the title explicitly misleads as to the course or content of the work. Oral arguments in the case occurred on March 22, 2023.
Notably, Justices Kagan, Jackson, and Sotomayor seemed to lean in favor of Jack Daniel’s as they each asked pointed questions about whether this dog toy was an artistic expression at all. Justice Kagan remarked that the dog toy was merely an “ordinary commercial product” using Jack Daniel’s as its source identifier and that it shouldn’t receive special protection under Rogers. A dog toy is utilitarian consumer product as opposed to an artistic work. The three justices also noted that Rogers was generally applied in very different cases from the one at issue. Kagan also noted “maybe I just don’t have a sense of humor” in response to VIP’s counsel stating that the dog toy was a parody. Justice Alito discussed why the first amendment may have precedent over the Lanham Act, though Jack Daniel’s counsel, Lisa Blatt, commented that trademarks have been around since the 1500’s and well predate the first amendment. Justice Alito also commented on the low risk to the spirit maker of any real-world confusion posed by the dog toy. Justice Gorsuch advanced the notion that the lower courts had given short shrift to the parody argument and questioned whether a remand was due under that basis. VIP’s counsel initially resisted a remand on this basis but Gorsuch noted, “most lawyers don’t stand at the lectern and oppose a win.”
A ruling is unlikely to come for a while, though it seems as if the justices did not seem too intent on a watershed opinion that would shake up the first amendment landscape. One of the justices even mentioned the confusion and danger of overturning a long standing test that courts had come to rely on. Whichever way the court falls, it doesn’t appear that we are slated for a major paradigm shifting opinion.
APPLE LOSES TRADEMARK FIGHT
United States Court of Appeals for the Federal Circuit
CHARLES BERTINI, Appellant v. APPLE INC., Appellee
Bertini, a professional jazz musician, has used the mark APPLE JAZZ in connection with festivals and concerts since June 13, 1985. In the mid-1990s, Bertini began using APPLE JAZZ to issue and distribute sound recordings under his record label.
Apple Corp., the Beatles’ record company, had registered the mark APPLE in August 1968 for “gramophone records featuring music” and “audio compact discs featuring music”. Apple Corp. and Apple Inc. became involved in a Trademark dispute over the use of APPLE and in 2007, they reached a settlement in which Apple Inc. purchased Apple Corps. Registration No. 2034964 covering the APPLE mark. Apple Corps has continuously used its APPLE mark on gramophone records, and other recording formats since August 1968. Since 2007 that use has been under a licensing agreement with Apple Inc.
In 2015 Apple Inc. sought to register its APPLE MUSIC mark for 15 broad categories of services, from the production and distribution of sound recordings, to presenting live musical performances, to providing websites featuring entertainment and sports information. Bertini opposed Apple’s registration of APPLE MUSIC on the ground that it would likely cause confusion with Bertini’s common law trademark APPLE JAZZ.
The parties also agreed there was a likelihood consumers would confuse Bertini’s use of APPLE JAZZ with Apple’s use of APPLE MUSIC. Apple argued, however, it was entitled to an earlier priority date of August 1968 based on trademark rights it purchased from Apple Corps.
The Trademark Trial and Appeal Board (T.T.A.B.) issued a final decision dismissing Bertini’s opposition. The Board found Bertini’s common law mark APPLE JAZZ is inherently distinctive and that Bertini may claim a priority date of June 13, 1985 for APPLE JAZZ in connection with “[a]rranging, organizing, conducting, and presenting concerts [and] live musical performances.” However, the Board found Apple Corps continuously used its APPLE mark on gramophone records, and other recording formats, since August 1968. It further found Apple was entitled to tack its 2015 use of APPLE MUSIC onto Apple Corps’ 1968 use of APPLE and thus had priority over Bertini. The Board accordingly dismissed Bertini’s opposition and denied Bertini’s subsequent motion for reconsideration. Bertini appeals.
On appeal to the U.S. Court of Appeals for the Federal Circuit, the Court first clarified Trademark rights and tacking. The Court explained that Trademark rights arise from the use of a mark in commerce and that the party who first uses a distinctive mark in connection with particular goods or services has priority over other users. The Court said, “Recognizing that trademark users ought to be permitted to make certain modifications to their marks over time without losing priority,” trademark owners may, in limited circumstances, “clothe a new mark with the priority position of an older mark.” This doctrine is known as “tacking.”
The standard for a trademark owner to invoke tacking is strict. The party seeking to tack bears the burden to show the old mark and the new mark “‘create the same, continuing commercial impression’ so that consumers ‘consider both as the same mark.’” Hana Fin., Inc. v. Hana Bank, 574 U.S. 418, at 422 (2015). The commercial impression of a trademark is “the meaning or idea it conveys or the mental reaction it evokes,” including the information it conveys with respect to source. Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158, 1164 (9th Cir. 2013)
Before answering the question of whether Apple, Inc has met the standard required for invoking tacking, the Court said, “This case raises a question of first impression regarding the appropriate tacking standard in the registration context: whether a trademark applicant can establish priority for every good or service in its application merely because it has priority through tacking in a single good or service listed in its application.” This raises a question regarding the scope of the tacking inquiry. Tacking cases have focused on whether a trademark owner can tack two different marks which have been used for the same goods or services. The Court had not previously addressed the appropriate standard for tacking uses on different goods or services.
Apple seeks to register its APPLE MUSIC mark for 15 broad categories of services and attempts to claim priority for all these services by tacking onto Apple Corps’ 1968 use of APPLE for gramophone records. Tacking a mark for one good or service does not grant priority for every other good or service in the trademark application. An opposer can block a trademark application in full by proving priority of use and likelihood of confusion for any of the services listed in the trademark application. Tuxedo Monopoly, Inc. v. Gen. Mills Fun Grp., Inc., 648 F.2d 1335, 1336 (CCPA 1981) The reverse is not true. The trademark applicant cannot establish absolute priority for the full application simply by proving priority of use for a single service listed in the application.
Bertini’s use of APPLE JAZZ overlaps with two of the services in Apple’s application: production and distribution of sound recordings; and arranging, organizing, conducting, and presenting live musical performances. The Court noted, “even assuming Apple is entitled to tack its use of APPLE MUSIC for production and distribution of sound recordings onto Apple Corps’ 1968 use of APPLE for gramophone records, this does not give Apple priority as of 1968 for live musical performances.”
The T. T. A. B. held tacking requires the new and old goods or services be “substantially identical.” Goods and services are substantially identical for purposes of tacking where the new goods or services are within the normal evolution of the previous line of goods or services. The question is, at least in part, whether consumers would generally expect the new goods or services to emanate from the same source as the previous goods or services.
To establish tacking, the Court said, “Apple must therefore show live musical performances are substantially identical to gramophone records. No reasonable person could conclude, based on the record before us, that gramophone records and live musical performances are substantially identical. Nothing in the record supports a finding that consumers would think Apple’s live musical performances are within the normal product evolution of Apple Corps’ gramophone records.”
Accordingly, the Court determined that Apple is not entitled to tack its use of APPLE MUSIC for live musical performances onto Apple Corps’ 1968 use of APPLE for gramophone records. Because Apple began using the mark APPLE MUSIC in 2015, Bertini has priority of use for APPLE JAZZ as to live musical performances. The Court therefore reversed the Board’s dismissal of Bertini’s opposition to Apple’s application to register APPLE MUSIC.
INTERNET ARCHIVE LIABLE FOR ONLINE LIBRARY
https://torrentfreak.com/internet-archive-is-liable-for-copyright-infringement-court-rules-230325/
https://kipcurriercopyright.blogspot.com/2023/03/why-internet-archives-copyright-battle.html
https://kipcurriercopyright.blogspot.com/2023/03/publishers-beat-internet-archive-as.html
United States of District Court Southern District of New York
A US district judge ruled in favor of book publishers (including Hachette, Harper Collins, John Wiley and Penguin Random House) suing an online book lending library, called Internet Archive (IA) for copyright infringement in a summary judgment.
This case dated back in 2020, where the book publishers sued IA for copyright infringement, equating their operation as piracy.
The IA library is an online library operated by a non-profit organization, that scans physical books and then lends the digital copies to patrons, mainly libraries, in an ebook format without permission from the book publishers.
Both parties moved for a summary judgment and IA thinks it has a fair use defense. The Judge goes through the fair use factors and concludes that all the four factors weigh strongly in favor of the publishers. The first and fourth factors are the most important.
1. Purpose and character of the use: whether the use is transformative as well as whether it is commercial.
IA argued the digital copies of the physical book transformed the original work, with the absence of profits as well as their operation that one patron at a time can borrow the book for each copy. Court disagreed that those are strong defense and doesn’t seem to care whether the organization is non-profit because IA can still benefit through donations and other means.
2. Nature of copyrighted work: favor Book publisher: copyrighted work where the publishers have the publishing rights – favor book publisher
3. amount and substantiality of the portion used: favor Book publisher
4. Whether the IA’s operation affects the potential book market for the books in suit or the value of the books in suit.
Court agreed there’s a thriving ebook licensing market for libraries. And it disagreed with IA’s argument that there’s no negative correlation between its lending service and the sales volume by book publishers. The ultimate question, the court said is “whether the infringing use posing recognizable harm in the relevant market, in this case the market for authorized library ebook license.” And the court thinks the harm is evident.
THe IA’s director, Chris Freeland, said there will be an appeal.
AFROMAN – DON’T FILM ME BRO! COOLEY V. FOREMAN
https://s3.documentcloud.org/documents/23721379/afroman-complaint.pdf
https://www.npr.org/2023/03/24/1165822372/afroman-police-raid-lawsuit-music-videos
nolo.com/legal-encyclopedia/recording-the-police-legal.html
Joseph Edward Foreman, more widely known as “Afroman”, has been sued by several police officers who raided his Ohio home while executing a search warrant that was issued for probable cause of drug trafficking and kidnapping. Foreman was never charged following the raid. Foreman says investigators confiscated a vape pen, a joint and $4,000 in cash that investigators believed to be the proceeds of drug trafficking.
Foreman was outraged by the raid, and immediately vocal. Foreman (Afroman) created several songs about the raid and set them to music videos, which include footage of the raid. The ones referenced in the suit are titled “Will You Help Me Repair My Door” and “Lemon Pound Cake” (the latter to the tune of “Under the Boardwalk”). Lemon Pound Cake is based off of a moment in the footage from Foreman’s home when a Sheriff on the raid did a double-take at a lemon pound cake on Foreman’s counter.
Foreman also posted images on social media of the officers who conducted the search and sells merchandise, like printed t-shirts, with photos of the police officers and of the judge who signed the search warrant. The videos have millions of views, and Foreman himself posted on Instagram thanking one of the officers for helping him get 5.4 million views on TikTok (this post brought up in the lawsuit).
Seven police officers are suing Foreman for violation of the Ohio right of publicity and the common law right of privacy. They allege that Foreman is using their images for “commercial purposes, to promote his ‘Afroman’ brand,” sell products, and promote his tour.
The filing also said that the rapper’s actions has caused them to suffer “humiliation, ridicule, mental distress, embarrassment and loss of reputation.” It listed several counts of unauthorized use of their personas and invasion of privacy. The officers are seeking damages and a court injunction to remove the material.
Under the Ohio Right of Publicity Statute, the following are required: i) use of any aspect of an individual’s persona / ii) for a commercial purpose / iii) during the individual’s lifetime or the 60 years after the date of the individual’s death / iv) without written consent.
There are, additionally, many statutory exceptions that could apply. Particularly, “dramatic,” “historical” “audiovisual” and “musical” works, for material of political or newsworthy value, and for reporting on issues of public interest.
Most courts have allowed filming police under the First Amendment, unless it creates a safety issue, interferes with an officer’s duties, or violates privacy rights.
“Police officers may be protected by qualified immunity against claims for damages for most of their misconduct, but they are not immune from public criticism.” (Public Citizen)
Foreman plans to counter sue. “I want to sue them for stealing my money, I want to sue them for writing ‘kidnapping’ on a warrant and making me suffer financially in my industry because just that accusation makes people raise an eyebrow about you,” he adds.
DISCOVERY RULE IN THE COPYRIGHT SPOTLIGHT
MARTINELLI V. HEARST
https://law.justia.com/cases/federal/appellate-courts/ca5/22-20333/22-20333-2023-04-13.html
- Caption: Martinelli v. Hearst Newspapers, L.L.C.; Hearst Magazine Media, Incorporated
- JX: Fifth Circuit (appealed from District court of Southern District of Texas)
- Note: this was a 3 judge panel.
- ISSUE: is the Discovery rule still valid ( Statute of limitations begins to run “once the plaintiff knows or has reason to know of the injury upon which the claim is based” )
- Parties
- Plaintiff: Antonio Martinelli
- Also appellee
- Hired by sothesby’s international realty to photograph an irish estate owned by the Guiness family
- Defendant: Hearst Newspapers/Hearst Magazine Media
- Appellant.
- News publication that reused Martinelli’s photographs on (1) a web-only article displayed on the Houston Chronicle, San Francisco Chronicle, Times Union, Greenwich Time, and The Middletown Press on March 7, 2017; (2) a different web-only article published six days after (March 13, 2017) on the same websites ; and (3) a web-only article for the Elle Decor magazine after the second article (March 14, 2017).
- Plaintiff: Antonio Martinelli
- Intro/background
- Martinelli discovered the (first) Houston Chronicle article on November 17, 2018. He discovered the other articles between September 2019 and May 2020.
- He says he could not have discovered his photographs being used with reasonable diligence sooner than that.
- Martinelli sued on October 18, 2021, and amended his complaint on February 11, 2022 to include hearst magazine media, Inc, the owner of the Elle Decor copyrights.
- The claims were brought within 3 years of discovery, but not within three years of the infringements occurring.
- The Hearst Defendants argued that Petrella and Rotkiske, overruled the discovery rule, and changed the test to be one that applies when the infringement occurred.
- The District court rejected this argument, and Hearst Defendants appealed.
- Martinelli discovered the (first) Houston Chronicle article on November 17, 2018. He discovered the other articles between September 2019 and May 2020.
- Court’s logic.
- Petrella did not address whether discovery or occurrence begins the statute of limitations for copyright claims (instead focusing on the three year lookback, and how separate infringements have separate limitation periods).
- Rotkiske stated that an attempt to add a discovery rule into a statute where Congress did not include it was improper. However, this was for a Fair Debt Collection Practices Act, where the statutory language was clear on when the claim started.
- If there were two plausible interpretations, the adopted construction is typically the one that happens when the cause of action accrues.
- The court determined that if the only plausible construction is that discovery rule applies, then that should be the interpretation.
- For copyright infringement, the language doesn’t state that the claim starts from the date of violation.
- The court cited Second and Ninth Circuit rulings post Petrella and Rotkiske to support this.
- For copyright infringement, the language doesn’t state that the claim starts from the date of violation.
- The court determined that if the only plausible construction is that discovery rule applies, then that should be the interpretation.
- If there were two plausible interpretations, the adopted construction is typically the one that happens when the cause of action accrues.
- Ruling: Yes, discovery rule still applies.
MINDEN PICTURES V. COMPLEX MEDIA
- Caption: Minden Pictures, Inc. V. Complex Media, Inc.
- JX: Southern District of New York (second circuit).
- ISSUE: is the Discovery rule still valid for seasoned litigants.
- Parties:
- Plaintiff: Minden Pictures, Inc. (a wildlife and nature photography licensing agency that licenses photographer works and markets them for editorial, advertising, corporate and non profit use.)
- Plaintiff registers its works, and engages technology companies that dan detect infringement through crawlers (basically programs that go through the internet to find things).
- It is also a frequent litigant, having filed more than 100 cases against infringers.
- Defendant: Complex Media, Inc. A company that operates the website www.complex.com
- Plaintiff: Minden Pictures, Inc. (a wildlife and nature photography licensing agency that licenses photographer works and markets them for editorial, advertising, corporate and non profit use.)
- Background information
- The photograph was uploaded in July 2012. Roughly 10 years later, on May 18, 2022, Plaintiff filed the lawsuit, and Defendant filed a motion to dismiss.
- Arguments.
- 1) Claim only accrued when it saw the photo in March 2022.
- Court stated that a seasoned litigator should have discovered infringement sooner, within the statutory time period.
- 2) Statute of limitations ran anew every time the photograph was transmitted to a user’s computer.
- Court stated this is at odds with the text and interpretation of Title 17, that “distribution” is synonymous with “Publication”
- When reviewing, the court determined the only case on point for plaintiff was APL Microscopic, LLC v. United States (US Court of Federal Claims), which has since been rejected and no district court had followed APL’s logic since it was decided.
- 1) Claim only accrued when it saw the photo in March 2022.
- Ruling: Discovery rule applies, but the burden is on seasoned litigators that should know when an infringement has occurred to show an explanation for delayed filings.
SULLIVAN V. FLORA, Inc. (AGAIN, THIS TIME WITH DAMAGES) )
https://law.justia.com/cases/federal/appellate-courts/ca7/22-2386/22-2386-2023-03-31.html
https://docs.google.com/document/d/1DpO-l-8rwqG5eT61VAr2mJCDTNcrQBJByNqZEC_ROH8/edit (EP 130: we discussed the impact of Sullivan v. Flora before here).
https://amyleesullivan.com/flor-essence-video/2013/7/19/flor-essence-1-detox-in-the-us (the images in question)
- Caption: Sullivan v. Flora, Inc.
- JX: Seventh Circuit (appealed from District court of Western District of Wisconsin)
- Note: this was a 3 judge panel.
- ISSUE: What exactly are the damages?
- Parties
- Plaintiff: Amy Lee Sullivan (DBA Design Kit)
- Also appellee
- Hired by Joseph Silver to produce the ads for 7 Sources and Flor-essence.
- These ads were drafted for two individual ad campaigns.
- Defendant: Flora Inc.
- Appellant.
- Flora manufactures herbal supplements, and hired Joseph Silver to produce ads for “7 Sources” and “Flor-essence”
- Plaintiff: Amy Lee Sullivan (DBA Design Kit)
- Intro/background
- Sullivan was indirectly hired by Flora to create images and drawings for two ad campaigns.
- IMPORTANT NOTE: The court describes the images/drawings poorly. From digging a little further, the ads were drawn like infographics to be displayed as a video with limited information, and some of the illustrations drawn were background textures.
- Sullivan granted Flora an exclusive license to use the images for only those two ad campaigns.
- Flora used the images beyond the agreed upon ad campaigns.
- Sullivan registered two illustration collections with 33 individual illustrations in the collections.
- Sullivan then sued.
- Sullivan was indirectly hired by Flora to create images and drawings for two ad campaigns.
- Prior Litigation
- Flora had been found to have willfully infringed on the copyrights
- The lower court issued statutory damages for all 33 drawings. Flora appealed on the question of if the damages should be based on per drawing, or based on the collections.
- Plaintiffs can seek statutory or actual damages
- For the purposes of this statute, a separate statutory damage is warranted for each “one work” with a compilation being considered “one work”
- Flora had argued that the registration was faulty on the basis of the images being jointly authored. This was determined to be a question of fact for the jury.
- Trial was split into three phases to determine (1) liability and willfulness; (2) authorship; and (3) Damages.
- The jury found the first two for Sullivan, and awarded her 3.6 Million in statutory damages and over 145k in actual damages.
- FIRST APPEAL: Answered the question about how damages were calculated based on how they were copyrighted. The court determined the focus was the independent economic value, and remanded the matter to the lower court for that court to determine damages from the economic value of the illustrations, specifically whether all 33 illustrations had independent economic value, or if it was the compilations.
- REMAND IN LOWER COURT: The lower court did not re-open discovery to let Flora litigate the value, and issued summary judgment in favor of Sullivan.
- Flora sought to re-try and re-litigate the issue of damages for value. During trial, Flora did not provide an expert to testify as to damages, and did not call witnesses during the damages stage.
- Court’s logic
- The first part of the court’s logic is whether the issues were waived or were part of the first remand back to the court.
- Issues that could have been but not raised on appeal are waived. The court determined that Flora had indeed argued that the awards should have been limited as an alternative argument, stating the standard is “one award per registration.”
- The court stated that Flora had waived its arguments regarding joint authorship issues.
- Regarding the mandate as part of remand, the Circuit Court determined that since the record was insufficient on the facts relevant to statutory damages, the district court needed to determine what was necessary to get those facts.
- While the Circuit Court stated that the lower court did not abuse its discretion, since the lower court did not supplement the record and ruled on the facts available, it did not address the Circuit Court’s issues.
- However, this does not extend to issues regarding infringement, which were deemed litigated and decided properly by the jury.
- While the Circuit Court stated that the lower court did not abuse its discretion, since the lower court did not supplement the record and ruled on the facts available, it did not address the Circuit Court’s issues.
- What is actually the determination of separate economic value?
- Was it a compendium of works (like an album), was it distributed as multiple protected works, produced together or separately?
- Flora tried to argue there was none based on of an invoice, that Sullivan never sold the illustrations on their own, that Flora-specific content impacted the independent economic value and that the background textures were worthless.
- The District court discounted the invoices, the Circuit Court determined it was relevant, and would show that selling the illustrations as two products, rather than 33, supports the argument that the 33 would lack independent economic value (as would the registration of two works, rather than 33).
- This is in line with the Ninth Circuit’s determination that how the works are registered may be relevant to determine if there’s an independent economic value.
- As for the other issues, the Circuit Court similarly found the issues as favoring Flora, determining the district court did not properly address such issues, and that material issues of fact remained.
- Was it a compendium of works (like an album), was it distributed as multiple protected works, produced together or separately?
- The first part of the court’s logic is whether the issues were waived or were part of the first remand back to the court.
- Ruling.
- The court affirmed in part, remanded in part, and reversed in part, determining Flora can argue and Ultimately, the court’s decision could be seen to favor Flora.
- Effect. When we last discussed Sullivan, it was in reference to Cox’s appeal to the Supreme court regarding a billion dollars in damages, and how the difference in approach between circuits made the issue ripe for appeals, and case law and differences between circuits continue to mount. Moving forward, attorneys should keep in mind that the independent economic value is not an “all or nothing” test, but could signal a middle path, where some works are less valuable than others.
PSA: ABA HACK affects 1.4 Million lawyers – change your passwords NOW!
A data breach of the American Bar Association’s servers may have given hackers access to user credentials for as many as 1,466,000 members, past and present, of the largest association of lawyers in the world
In a statement, the ABA said:
“On March 17, 2023, the ABA observed unusual activity on its network. The association immediately activated its incident response plan and retained outside cybersecurity experts to assist with the investigation. The investigation determined that an unauthorized third party gained access to the ABA network and may have acquired usernames and salted and hashed passwords to access accounts on a prior version of the ABA website, which was replaced by a new platform in 2018. These older usernames and salted and hashed passwords may provide access to the current ABA Career Center. The passwords were not exposed in plain text. For many individuals, the password may have been the default password assigned by the ABA when the account was created. No sensitive personal or financial information was breached.”
ABA recommends that members change their passwords on the site and any other sites utilizing the same credentials.
All ABA members are advised to also watch for spear-phishing emails impersonating the ABA, as threat actors may use them to access further personal information.
This serves as a good reminder to us all that we have a duty of competence when it comes to our use of technology, and password and data security are certainly a part of that. So, if you’re hearing this, and haven’t already done so, please go change those passwords.