Artificial cosmoi and the law (2nd edition) A conference organised by UCL Centre for Law, Economics & Society Monday 30 July 2018 9am - 5pm at History Museum of Athens, 5 Tholou Street, Plaka, 10556 Athens, Greece
Transformative general-purpose technologies have resulted in the “fourth industrial revolution”: Blockchain, Big Data and Data Science, gene editing through CRISPR, Artificial Intelligence and machine learning. Robots are leading to rapid changes in the way services are offered, products are manufactured, and commerce is made, leading to the emergence of new industries/spheres of economic activity. Data collection is very extensive. There are legitimate concerns on privacy violations, and a need to a regulatory solution to guard privacy without killing the benefits of digital platforms. A new key area of business activity, platforms, bring together disparate sets of users, such as cardholder and merchants in a credit card platform or drivers and customers in Uber. Currently, the five most valuable firms in the world (Amazon, Apple, Facebook, Google, and Microsoft) are platforms. The development of blockchain and decentralised ledger technology may challenge the dominance of digital platforms and lead to a more decentralised economic system. “Winner-take-most” competition with the emergence of “superstar firms” may raise competition concerns but has also arguably led to a decline in labour’s share. Automation may relieve humans from certain tasks, so that they can spend time on more valuable work, or it can lead to the splitting up of activity previously exercised by humans in various activities, some of which may be automated. It can eventually replace an entire job once performed by a human, thus having important implications on employment in certain economic sectors and/or social inclusion.
Legal systems have been conspicuously slow in adapting to the needs of society and to the development of new technologies. When, even with delay, law reacts to societal changes, it usually has just a restricting function: it prohibits rather than enables certain types of activities. Thus, the law is a rather poor instrument in dealing with the cataclysmic changes brought by the very rapid developments in technology. These touch upon all aspects of social life, ranging from issues of employment and intellectual creation, or more generally the creation of resources, to new modes of data and AI-driven governance, affecting multiple environments, reaching from the streets and hospitals to the financial system and the battlefield. For the law to remain relevant, it will have to rapidly adapt to these challenges, so it can remain at the epicenter rather than the periphery of social and business activity. It is also important that technology entrepreneurs be cognizant of the crucial importance of the legal system and of the necessity of adaptive changes to it when designing their business models, since ignoring the role of the law may jeopardize their innovative efforts and disruptive innovations. The second edition of the "Artificial cosmoi and the Law" conference aims to explore the interactions between law and new general purpose technologies, such as blockchain, Artificial Intelligence and gene-editing, but also more broadly to reflect on the legal construction of digital capitalism.
Emilios Avgouleas, Chair in International Banking Law and Finance, University of Endiburgh
George Dimitropoulos, Assistant Professor, HBKU
Nick Economides, Professor at NYU Stern Business School
Hamid Ekbia, Professor of informatics, Indiana University Bloomington
George Flouris, Foundation for Research and Technology - Hellas (FO.R.T.H.)- Institute of Computer Science (I.C.S.)
Sotiris Georganas, Reader in Behavioural Economics City University London
Carsten Gerner Beurle, Professor of Commercial Law, UCL
Yiannis Golias, Rector, National Technical University of Athens
David Grewal, Professor of Law, Yale Law School
Christos Hadjiemmanuil, Professor of International and European Monetary and Financial Institutions at the University of Piraeus & Visiting Professor, Department of Law, LSE
Alexey Ivanov, Director, HSE Skolkovo Institute for Law & Development
Michael Jacobides, Professor of Strategy and Entrepreneurship; Sir Donald Gordon Associate Professor of Entrepreneurship and Innovation, London Business School
Aggelos Kiayias, Chair in Cyber Security and Privacy and director of the Blockchain Technology Laboratory at the University of Edinburgh
Mihalis Kritikos, Policy Analyst, European Parliament
Ioannis Lianos, Chair in global competition law and public policy, Director of the Centre for Law, Economics and Society, UCL
Bjorn Lundqvist, Associate professor of Law, University of Stockholm
Manos Mastromanolis, Assistant Professor of Commercial Law at the Faculty of Law of the University of Athens
Alexandra Mikroulea, Associate Professor in the Faculty of Law at the Athens University
Greg Pelecanos, Partner, Ballas, Pelecanos LLP
Alexandros Seretakis, Assistant Professor, Trinity College Dublin
Kostantinos Stylianou, Lecturer in Competition Law and Regulation, University of Leeds
Dimitris Tzouganatos, Professor of Competition Law at the University of Athens, Faculty of Law
Nikos Vettas, General Director of the Foundation for Economic and Industrial Research IOBE & Professor of Economics, Athens University of Economics & Business
Alexandros Varveris, Special Laboratory Educational Staff and Deputy Director of the Lab of Law and Informatics, Law School, UoA,
Angela Walch, Associate Professor at St. Mary’s University School of Law
Georgios Yannopoulos, Assistant Professor for IT Law and Legal Informatics, Director of the Lab of Law and Informatics, Law School, UoA
It's been an exciting few weeks for copyright around the world. This CopyKat takes a look at three "David vs Goliath" disputes, in which parties (respectively) include the US Government, Fifa and an 8 year-old boy, and one of Africa's largest telecoms companies. Also in the news: YouTube rolls out its anticipated Copyright Match tool, copyright collecting societies in Kenya continue to struggle with accountability, and China launches an IPR awareness campaign.
Lady Liberty "faceswap" will cost the United States Postal Service $3.5M
Between 2011 and 2014, the United States Postal Service (USPS) used an image of the Statue of Liberty for its Forever Stamp series (a type of First Class postage stamp). Unfortunately for the USPS, the image they chose was not actually of the famous statue that towers over New York Harbor designed by French sculptor Frédéric Auguste Bartholdi in 1886. Instead, the image they chose was actually Robert S. Davidson's replica Statue of Liberty which looks over the New York-New York Hotel & Casino in Las Vegas. Davidson sued for – and won – nearly $3.5 (£2.6) million in royalties, plus interest.
As reported by Artsy, an eagle eyed stamp collector identified the mix-up in 2011. The USPS was made aware of the goof in 2013, but went on to print another 1.13 billion stamps with the replica’s image. For context, the judgement cited that the USPS made some $70 million in revenue resulting from sales of this Lady Liberty stamp alone.
The statues in NYC (left) and Las Vegas (right).
The Post Office purchased the photo used on the stamp from the image service Getty for $1,500 (£1,140). However, the license only covered the rights to Getty's photograph of the statue — and not the statue itself. The USPS neglected to seek permission from Davidson, likely because they simply assumed what it was using was in the public domain.
In its defense, the USPS asserted that the statue is a replica and accordingly, contains no truly original work. If true, this would render Davidson’s copyright claim invalid, and the government would owe nothing for its use of the replica statue’s image.
Davidson was therefore tasked with proving that his copyright in the statue was valid, which under US law requires only a showing of “some minimal degree of creativity” and that it was his own “independent creation” of those original elements.
By way of reminder, the focus is on the expression of an original idea and not the idea itself (Oracle Am., Inc. v. Google Inc., 2014). As such, Davidson’s statue did not need to be wholly original, but rather a “new and original expression” of some previous work or idea – namely, the famous Bartholdi statue.
Davidson argued in his lawsuit that he wasn't trying to create a replica of the original, but rather to craft a fresher, more feminine version. As was later quoted in the ruling, he “envisioned his mother-in-law as inspiration ... and viewed her picture every night during the construction of the face of the statue."
The Court examined photographs and was satisfied that Davidson “succeeded in making the statue his own creation, particularly the face. A comparison of the two faces unmistakably shows that they are different.” Ultimately, the Court agreed that Davidson’s statue “evokes a softer and more feminine appeal. The eyes are different, the jaw line is less massive and the whole face is more rounded. “
The USPS’s defense that the stamp fell under the fair use exemption was rejected by the Court. As the USPS printed “billions of copies and selling them to the public as part of a business enterprise … so overwhelmingly favors a finding of infringement that no fair use can be found.”
In case you’re wondering how the USPS – which is a US government agency – can be successfully sued for copyright infringement, 28 U.S.C. § 1498(b) waives sovereign immunity for claims of copyright infringement against the federal government “for the recovery of his reasonable and entire compensation as damages for such infringement.”
YouTube's "Copyright Match" offers enhanced screening technology (for a selected few) As the CopyKat mentioned last month, YouTube has been beta testing a feature called Copyright Match, designed to find re-uploads of content on other channels. The tool will point content uploaders (creators) to instances where their work has been stolen, and allow them to request that YouTube delete the guilty party’s video on the grounds of copyright infringement. Last week, YouTube channels with more than 100,000 subscribers received access to the new tool.
When a creator uploads a video to the Copyright Match tool for review, other video uploads on different channels will then be scanned to detect similar content has been uploaded. Fabio Magagna, the product manager for the Copyright Match Tool, explained on the YouTube Creators blog that “when there is a match, it will appear in the ‘matches’ tab in the tool and you can decide what to do next”.
Although YouTube already offers an automated copyright-flagging system called Content ID, Copyright Match is different because it’s designed especially for YouTube creators who have problems with unauthorized re-uploads.
By YouTube’s own admission, the Copyright Match is “a powerful feature,” which will be monitored closely in its early stages. Magagna noted that the software will continue to expand over the coming months, “with the long-term goal of making it available to every creator in the YouTube Partner program.” The company insists that takedown requests will be reviewed to make sure they comply with YouTube’s copyright policies.
The introduction of Copyright Match comes at a time of intense debate surrounding user-uploaded content on social media platforms such as YouTube. In particular, The European Parliament recently voted to reject a new copyright directive. At the heart of controversy for many was Article 13, a section of the proposed directive that focuses on the use of copyrighted material uploaded by users.
Fifa takes down celebratory World Cup dance video: is this a step too far?
The World Cup is the largest single sporting event on Earth, with nearly half the world’s population tuning in. With England’s (somewhat surprisingly!) good run up to the Semi-Finals, fans of the Three Lions were especially eager to show their support.
When England’s captain Harry Kane scored a goal against Tunisia, a mother filmed her 7-year old boy celebrating the moment. She subsequently posted the short 5-second clip of him dancing in the living room on Twitter. However, FIFA - Football's ruling body - ordered the clip removed from Twitter. FIFA claimed the clip infringed their copyright, as viewers could see blurred football action from the family's TV in the background.
Speaking to the Mirror, Kathryn Conn explained that her son “is a massive Spurs fan and he absolutely worships Harry Kane so he started dancing around in the living room. All you can see on the TV in the background is a really blurry replay of the goal. It's hardly visible."
England captain Harry Kane won the Golden Boot for most goals scored in the tournament.
According to Conn’s tweet on the subject, the copyright notice from Twitter was brought under the US Digital Millennium Copyright Act. Several sources including iNews report that Fifa issued a letter stating: “On behalf of Fifa, we hereby assert that your making available and/or promoting of the protected content on your platform is not authorised by Fifa, its agent nor the law and that your activities in this regard serve as a serious infringement of Fifa’s exclusive rights.”
By way of background, Fifa reports on its finances page that around 95% of its revenues come from the sale of television broadcasting, marketing, and licensing rights related to the FIFA World Cup. From the 2014 World Cup in Brazil, Fifa hauled in $4.8 billion in revenue, which turned a $2.6 billion profit for the association (which is then re-invested into development projects). Compared to ticket sales earned $527 million, Fifa’s broadcast revenue topped $2.43 billion, while sponsorship fees brought in $1.6 billion.
To date, Fifa’s intellectual property portfolio contains 14,000 trade mark registrations, about 300 registered designs, and 150 copyright registrations covering 157 jurisdictions overall. As is made clear in its 30-plus pages of official guidance on brand protection, Fifa has millions of reasons to be protective of its intellectual property.
Fifa engages in active surveillance and brand protection, which includes court proceedings to halt an infringing situation and seek financial compensation for any damages suffered. However, sharing official content belonging to FIFA by fans without any commercial benefit is expressly permitted, as per the branding guidance. Curious by nature, this CopyKat’s therefore wonders why an account with barely 200 followers was singled out in this instance.
Did Safaricom steal Songa app from former employee?
Gikunda claims that he created the music app between 2012 and 2016. In 2013, while working as a developer at Radio Africa, the Chief Executive at Radio Africa Patrick Quarcoo “persuaded Gikunda to partner with him to ensure that the product gets to market” (IPKenya). According to Gikunda, Quarcoo proposed that that once Radio Africa’s Board of Directors sanctioned its participation in his app, they would share out the ownership of the app. The ownership was proposed at Radio Africa – 40%; Gikunda- 30%; Quarcoo- 20%; and the remaining 10% to a strategic partner.
In 2016 Gikunda left Radio Africa (under less than favourable circumstances) and says that after his resignation, Quarcoo sold the app to Safaricom without consulting him. Gikunda had not been “involved in the process at any stage, and neither has he benefited from it; despite the claims he created the platform” (innova8tiv). As with most intellectual property disputes arising between (former) employees and their bosses, establishing the ownership of the copyright subsisting in the Songa app lies at the heart of this matter. Gikunda is asking the High Court to compel Safaricom and Radio Africa to reveal how much money they have made from ‘Songa by Safaricom’ and is seeking damages.
To be successful in his claim, Gikunda will need to establish that he created his app outside the scope of his employment with Radio Africa, and that the app currently used by Safaricom is a reproduction or adaptation of his original app. To complicate matters, Gikunda’s app has been known under a variety of other names, including ‘NakedGroove’, ‘The Platform’, ‘The Music Platform’ and ‘RAMP’ – the latter being an abbreviation of either ‘Radio Africa Music Player’. Additionally, neither Gikunda nor Radio Africa obtained copyright registration, which further confuses the evidence.
This calls into question whether or not Gikunda made the program as part of his employment with Radio Africa (see also the work-for-hire doctrine), as well as the enforceability of moral rights for digital works. To achieve an injunction against the companies, which Gikunda is also seeking, he will need to prove that damages alone are an insufficient remedy.
Copyright woes continue for Kenyan collecting societies
Kenya's High Court
Elsewhere in Kenya, the complicated saga of the copyright collecting societies continues. Most recently, the High Court (pictured) ordered the Music Copyright Society of Kenya (MCSK) to account for the money it has collected as royalties and licence fees since January 1st 2017. Justices RN Sitati, DS Majanja and TW Cherere have given the MSCK thirty days to comply with the order (The Star).
In 2015, it was noted that MCSK's disbursement of royalties to artists has been decreasing for several years. The Kenya Copyright Board (KECOBO), the government organisation tasked with enforcing copyright in Kenya, established a minimum standard of 70% of revenue to be given back to artists. However, MCSK’s disbursement rates to musicians has fallen to 58.9% of collected revenue. Although MCSK was once Kenya’s largest royalty-collecting body, KECOBO revoked its licence in February of 2017 when MCSK failed to provide audited financial statements. The move came amidst allegations from local artistes over embezzlement of their royalties by MSCK.
As the CopyKat discovered back in May, Kenya is not the only African country to be experiencing problems with copyright collecting societies: power struggles with the Copyright Society of Nigeria (COSON) and the Nigerian Copyright Commission continue.
Copyright awareness comes to China
China has launched a four-month campaign to protect the intellectual property rights. First announced in September, the campaign is seen by many as an attempt to alleviate major concerns among foreign investors, including those in the United States.
China’s lack of strong intellectual property rights protection measures “frequently draw complaints from foreign investors and have been a long-standing focus of attention at annual talks with the US and Europe” (South China Morning Post). The Trump administration has officially launched a probe into alleged Chinese intellectual property theft which, amongst other things, led the United States to impose punitive tariffs on Chinese products.
The campaign, which will last for at least four months, has been jointly launched by the National Copyright Administration of China (NCAC), the Cyberspace Administration, the Ministry of Industry and Information Technology and the Ministry of Public Security.
It will target key areas including unauthorized republication of news and plagiarism on social media, unauthorized broadcasting of copyrighted content on short video sharing apps, and copyright violations by setting up overseas servers. The campaign will also push service providers to enhance their internal supervision systems (China Daily).
Chairman Mao Memorial Hall in Beijing
In 2012, an article on Forbes argued that “IP protection will always be an uphill struggle in China and for companies doing business there,” as individual rights – including intellectual property rights – may be in some instances at odds with traditional Chinese society.
A more recent Reuters article from April of this year explained that while Chinese IP protection laws are comparable to U.S. and European legal standards, the weakness lies in implementation, with high levels of bureaucracy. In particular, “court decisions applying on a provincial level rather than nationally, and judges often having different interpretations of the laws.”
In China, many consider that “even the education system works against an embrace of IP protection,” and until IP infringement is seen as an immediate threat to economic success, “few will really care.” Will a potential trade war be the impetus China needs to close the gap?
Proposal for Copyright in the DSM Directive – Where are we Heading Now?
Following the vote of EU Parliament’s Legal Affairs Committee (JURI) in favour of the Directive for Copyright in the Digital Single Market (known as Copyright Directive) last week the plenary session of the European Parliament has rejected the proposal that aimed at updating the rules for the digital age [reported here]. After a number of protests from the internet platforms, including Wikipedia blocking access to its websites, and opponents who believed that the Directive, if adopted in such shape, would limit internet freedom and creativity, MEPs have decided that the proposed changes require further debate. The rejected bill aimed to strengthen the enforcement of copyright rules online, wit the new provisions in Article 13 requiring internet intermediaries to monitor their platforms anc put filtering mechanisms in place which would detect copyright infringement and block the infringing content. Article 11, known as ‘link tax’ planned to require online platforms such as Google and Facebook to buy licences from media and news companies before providing links to their stories. This, opponents argued, could prohibit anyone from providing commercial service to use snippets from online articles without obtaining a licence from publishers. In the letter addressed to MEPs 70 internet leaders shared concern over the proposal saying that the proposed changes would take “an unprecedented step towards the transformation of the Internet from an open platform for sharing and innovation, into a tool for the automated surveillance and control of its users”. On the other hand, artists and music industry strongly supported enactment of new copyright rules. Sir Paul McCartney urged MEPs in a letter to “uphold the mandate on Copyright and Article 13” and wrote that the proposed Directive would address the value gap and ensure “a sustainable future for the music ecosystem and its creators, fans and digital music services alike”. Michael Dugher, UK Music CEO believed that the changes could “end an injustice that has seen Google’s YouTube and other big tech firms ripping off creators for far too long”. The body had previously accused Google of spending €31 million on lobbying operation that was aimed at issues related to the digital copyright reforms. It's not over yet - and the rejection mans that proposals will now be further considered after a rarely invoked Parliament procedure was used, and now MEPs will have a month to propose their amendments with a new vote likely to take place in September. Until then the increasingly raucous debate, which already brought a lot of attention, is likely to get even more heated.
While most of the eyes were focused on the vote in the European Parliament, the Regional Court of Hamburg has ruled in favour of German Collecting Society GEMA regarding the liabilities of the UseNeXT platform. According to GEMA, UseNeXT together with its owner Aviteo should be liable for copyrights of its users who shared unlicensed music and movie content through the Usenet platform. In the view of the Court, under German law internet platforms such as UseNeXT may be liable for copyright infringement of its users, where the business model promotes in a certain way, the uploading and distribution of copyrighted material that is unlicensed. The Court also considered that Aviteo is liable for the infringement in this case on the basis that it provides tools that aim to seek out music and movie files. Dr Tobias Holzmüller from GEMA believes that this case is a great success for the songwriters and publishers that are gathered in the society and creates “an important precedent for claims for damages in the field of internet piracy,” where online platforms “cannot hide behind legal principles.” Although the ruling is favourable for GEMA it is not yet binding as Aviteo can bring an appeal.
The US District Court in Dallas has ruled that Facebook-owned Oculus which specialised in the development of VR devices is required to pay $250 million for using ZeniMax’s computer code in its virtual reality headset, which is popular among video gamers. After the acquisition of Oculus by Facebook in 2014, ZeniMax brought a lawsuit which alleged that when one of its employees had left the firm and stolen ZeniMax’s intellectual property. Judge Ed Kinkeade has affirmed the jury’s decision awarding ZeniMax $200 million for breach of contract and $50 million for copyright infringement. The judge, however, decided not to award an additional $250 million which was claimed against Oculus co-founders. Additionally, ZeniMax’s request to ban sales of Octopus headsets was rejected. According to ZeniMax, Oculus continuously infringes its copyright and therefore “a permanent injunction is the only way to stop it.” Oculus viewed the infringement of copying seven lines of the code as insignificant given that the software consisted of over 42 billion lines.
Ed Sheeran has been hit with another copyright infringement lawsuit. Having settled a conflict in relation to ‘Photograph’ [more details here], this time he has been accused by the heirs of Marvin Gaye of copying ‘Let’s Get It On’ song in his ‘Thinking Out Loud’ composition. The lawsuit was brought by Structured Asset Sales (SAS) and follows a failed attempt by SAS to join the previous Townsend (Gaye’s heir) action, which was turned down on 11 June 2018. Now SAS has filed the lawsuit itself and seeks $100 million in damages for the portion of Gaye’s song that they own. As argued by the owners in their action against Ed Sheeran and co-writer of the song, Amy Wadge, ‘Thinking Out Loud’ takes many elements from Gaye’s song, such as “the melody, rhythms, harmonies, drums, bass line, backing chorus, tempo, syncopation and looping.” 1709 readers will no doubt remember that in 2015 the owners of Gaye’s song catalogue filed and ten won a successful (if somewhat controversial) suit against Robin Thicke and Pharell Williams’ “Blurred Lines” hit and accused them of copying ‘Got to Give it Up’ song.
YouTube’s Content ID system aims at ensuring that copyrighted content is not used without the author’s permission. The system has, however, some limitations and there are situations where it makes mistakes that result in the wrong content being taken down and demonetised [previously reported here]. This time, Paul Davids, who is a Dutch YouTuber known for his videos where he plays various famous guitar riff, last month has received a copyright infringement notice from the Content ID system for one of his videos. As he claims it turned out to be his own video that he had infringed upon. The author was particularly shocked when he found out that someone else took his original track, “added vocals and guitar to make their own track, and uploaded it to YouTube”. As a result of the notice, all the money which were earned from the video rather than to the original author were directed to the person who has copied his content. Following the appeal procedure, YouTube has resolved the matter in favour of the original author.
Last year, following a use of a piece of library music called ‘Eminem-esque’ in their 2014 election campaign advert, a Wellington High Court in New Zealand has found that the music used by the National Party had substantially copied the Eminem’s song ‘Lose Yourself’ [discussed here]. Accordingly, the Court has ordered the National Party to pay NZ$600,000 as the "hypothetical licence fee that would have been charged” had the publisher given permission to use the copyrighted work. Now, the political party has appealed to the Court of Appeal aiming to lower the amount that they have to pay in damages for their copyright infringement. In the opinion of the Nationals’ lawyer, the Court relied on the advice of an expert who had no relevant experience in New Zealand and the if fact the ad campaign only ran for 11 days. Therefore, no premium prices should be charged. As reported by NewsHub, the decision is reserved, meaning that the outcome a decision may be known in several weeks or months. Conversely, the rights owners believe the damages are insufficient!
European MEPs who voted on the Copyright Directive in Strasbourg today have failed (by a small majority) to move the legislative process forwards whereby the European Union Council, Commission and Parliament could have negotiated a final text for passage into law. The vote was close, with 278 in favour, 318 against and 31 abstentions. The outcome rejects the earlier Legal Committee decision to approve the draft law, which will now be sent back to parliament for further discussion.
The battle to update the EU’s copyright laws, the first since 2001, has sparked fierce lobbying from opponents to the led by internet giants such as Google and free specch advocates (see our previous post), with the backing of celebrities such as Stephen Fry and Tim Berners-Lee, and those in favour of the plans such as film companies and record labels and artistes who included the former Beatle, sir Paul McCartney and James Blunt.
The cultural and creative sectors, and rights owners will be more than disappointed. Anders Lassen, president of the European Grouping of Societies of Authors and Composers who backed the rule changes, said the vote was a “missed opportunity”, and PRS for Music’s Chief Executive, Robert Ashcroft said this
“It is perhaps unsurprising considering the unprecedented level of lobbying and the comprehensive campaign of misinformation which has accompanied this vote that MEPs want more time to consider the proposals. The vote showed that many MEPs across the various European political parties understand the importance of fixing the transfer of value and of a well-functioning market for copyright. We appreciate their support and hope that as we move forward to the Plenary debate in September, more MEPs will recognise the unique opportunity to secure the EU’s creative industries. “From the outset our primary focus of this legislation has been concerned with whether or not the internet functions as a fair and efficient marketplace – and currently, for artists and authors, it doesn’t. They want their creative works to be heard, they embrace technology, but they want to be paid fairly. We will continue to fight for what we believe is their freedom and a fair use of their creative works.” MEPs will now have to go back to the drawing board this summer before the proposals are voted on again in September.
Following on from previous CopyKats, the noise around the proposed changes to EU copyright law has reached a crescendo - and it's not just the tech giants and content behemoths who are lobbying at all levels, the former against changes, the latter very much in favour of the main changes in the Directive for Copyright in the Digital Single Market (known as Copyright Directive) which was approved by the European Parliament's Committee on Legal Affairs on the 20th June 2018.
The most controversial provisions are in the current draft of Article 13, which requires internet platforms to perform automatic filtering of the content that their users have uploaded. As the CopyKat reported, a group of over 70 internet leaders including Vint Cerf and British physicist and computer scientist Tim Berners-Lee.addressed Members of the European Parliament (MEPs) by sharing their concerns regarding the proposed text of the Directive. In their June 12th letter they said “Article 13 takes an unprecedented step towards the transformation of the Internet from an open platform for sharing and innovation, into a tool for the automated surveillance and control of its users” making the argument that this requirement goes against the previously established balance in the E-Commerce Directive and the ‘Safe Harbour’ provision in Article 15 of the InfoSoc Directive, where users uploading content are solely responsible for its legality, whereas platforms may be required to take down illegal content once it is brought to its attention.
Julia Reda, Member of the European Parliament, (for the Pirate Party) agreed with the internet gurus, criticising the high error rate expected from the algorithms and the resulting blocking of content. Reda describes on her website a phenomenon called "Startup killer". And Reda suggests that the filters will be so complex that they can only be developed by the big US tech giants. Small companies and start-ups will not be able to afford the programming and so every small platform that offers user-generated content will have to acquire their filter system from the big players. Reda then suggests that this creates a monopoly for the likes of Google.
Article 11 is the other main focus of attention. This would require of a new level of engagement between platforms and news creators and providers. Reda writes, "The automatic link previews social networks generate when users share links (showing the article headline, a thumbnail picture and a short excerpt) would require a license, as well as anyone analysing news content on the web like news aggregators, media monitoring services and fact checking services." This is the so called 'Link Tax'.Reda also claims that that Article 11 could limit freedom of expression and access to information, boost fake news, discourage startups and small publishers saying "Making it legally risky or expensive to link (with snippets) to news risks disincentivising the sharing of reputable news content. Since “fake news” and propaganda outlets are unlikely to charge for snippets, their content could as a result become more visible on social networks."
But Google, one of the leading lights in the battle against the proposed changes, has faced criticism. The Financial Times reports that Google has been accused of encouraging news publishers participating in its Digital News Initiative to lobby against proposed changes to EU copyright law at a time when the beleaguered sector is increasingly turning to the search giant for help. Google itself opposes the copyright directive, which it says would impede the free flow of information, and in a recent email to publishers suggested they contact members of the European Parliament to express their views. The search engine has developed close ties with publishers via its DNI programme, which provides support for digital journalism as well as innovation grants from a €150m fund. Angela Mills Wade, executive director of the European Publishers’ Council, said Google was trying to preserve the status quo. “It seems to be arguing for the news eco-system of today to continue,” she told the FT. “We feel that Google has largely created a news eco-system where it is apparently perfectly acceptable for companies to go around helping themselves to news media content for their own purposes.”
EU-based media organisations have hailed the Copyright Directive in a joint statement calling it “a crucial stand for the future of a free, independent press.” “The internet is only as useful as the content that populates it.” The statement also applauded Article 11, known as the “neighbouring right,” for “encouraging further investment in professional, diverse, fact-checked content for the enrichment and enjoyment of everyone, everywhere.”
So - who else is having a say? Well first off, a group of open science advocates have made the point that the new proposals will conflict with Europe’s principles of open science and freedom of expression. Vanessa Proudman, European Director of the Scholarly Publishing and Academic Resources Coalition (SPARC), a science-advocacy group in Apeldoorn, the Netherlands said “Copyright law must not hamper open science. The EU has made significant headway towards open access of research funded by European citizens. The proposed new rules would clearly impede further progress, threatening the visibility of Europe’s research". Maria Rehbinder from the Association of European Research Libraries said “We really don’t want further paywalls on top of any research materials libraries have paid for already”.
One of the high profile stories circulating the internet is that Article 13 would impact the creation and sharing of memes - not least as memes often use copyrighted images from popular films and TV shows. Global News reports "Pepe the Frog, the “Distracted Boyfriend” meme and Arthur’s balled-up fist are all under threat. So are reactions GIFs such as the one of a confused Zach Galifianakis, or the clip of Steve Carrell shouting ‘No!’ in The Office. EU lawmakers may inadvertently destroy the internet’s robust meme culture with a proposed law designed to fight online piracy. One article in the legislation would force online platforms such as Google, Facebook, YouTube and Twitter to automatically censor copyrighted content uploaded by anyone who isn’t licensed to share it." So called mash-ups and re-mixes have been given the same attention with their presumed demise highlighted. Matt made the point in the last CopyKat that a filtering and blocking system could lead to some major mistakes. Whilst the Dancing Baby vs Princecase is now settled, at the heart of that was ine question of whether the mother in question, Stephanie Lenz, could use fair dealing as a defence - or at least whether the rights owners (Universal Music took a lead) issuing the take down should have considered the doctrine before removing the video of the toddler dancing to Prince's music. As Matt argued "many mistakes will occur .... a lot of content may be removed or blocked because of the system being unable to recognise what falls under exception or limitation, such as parody or quotation, and how they differ across the various Member States. Additionally, the proposed text by Commission and compromise texts of the Parliament and the Council does not contain any provision which will bring either clarity or consistency in defining “which Internet platforms would be required to comply with the provision, and which may be exempt”.
AbovetheLaw give the example of a simple mistakes - In 2013, Fox sent a take down notice against a book by Cory Doctorow because the book and one of Fox’s hit television shows shared the same name: Homeland. They add: "Remember the Super Bowl ad Chrysler released this year, using the words of Martin Luther King, Jr. to sell a Dodge Ram truck? One viewer cleverly replaced the original audio of the ad, which highlighted the importance of service, with audio from another portion of the same MLK speech that instead criticized consumer culture, including a line calling out Chrysler by name. This version of the ad was flagged by YouTube’s content ID and taken down, but was later restored because it is obviously a fair use. The very fact that it was removed at all, though, demonstrates the inability of automated systems to determine whether a use is criticism, parody or some other non-infringing use."
Back in August 2013 Lawrence Lessig filed a federal complaint after YouTube forced the Harvard University law professor and Creative Commons co-founder to take down a video of a lecture that featured people dancing to a copyrighted sound recording. Supported by the Electronic Frontier Foundation (EFF), Lessig said: “The rise of extremist enforcement tactics makes it increasingly difficult for creators to use the freedoms copyright law gives them. I have the opportunity, with the help of EFF, to challenge this particular attack. I am hopeful the precedent this case will set will help others avoid such a need to fight. The company who issued the take down issued an apology.
“It’s a blunt instrument and it’s going to lead to lots of over-censorship,” Jim Killock, head of the U.K.-based Open Rights Group, told Global News. And he is not alone - numerous civil rights groups have pointed out that the proposed changes could be used to restrict freedom on the internet and could be used to censor content and sharing. Communia, which advocates policies that expand the public domain and increase access to and reuse of culture and knowledge, and seeks to limit the scope of "exclusive copyright to sensible proportions that do not place unnecessary restrictions on access and use", issued a key recommendation to delete Article 13 from the proposal "as it addresses a problem that lacks empirical evidence confirming its existence. Article 13, as drafted by the Commission, would limit the freedom of expression of online users and create legal uncertainty that has the potential to undermine the entire EU online economy. As such it is unworthy of being included in a Directive proposal that is intended to modernize the ageing EU copyright framework".
InfoJustice was scathing on the automatic filtering proposals saying: "The upload filtering proposal stems from a misunderstanding about the purpose of copyright. Copyright isn’t designed to compensate creators for each and every use of their works. It is meant to incentivize creators as part of an effort to promote the public interest in innovation and expression. But that public interest isn’t served unless there are limitations on copyright that allow new generations to build and comment on the previous contributions. Those limitations are both legal, like fair dealing, and practical, like the zone of tolerance for harmless uses. Automated upload filtering will undermine both. What began as a bad idea offered up to copyright lobbyists as a solution to an imaginary “value gap” has now become an outright crisis for future of the Internet as we know it. Indeed, if those who created and sustain the operation of the Internet recognise the scale of this threat, we should all be sitting up and taking notice."
Of course neither side wants to give ground: The recorded music sector's main lobby group, the IFPI, said Article 13 restores fairness to the digital market. It’s about looking out for workers in the creative industries, helping to secure them a future that is financially viable where we continue to benefit from their services" and a cross section of rights owners from the music, film, sports and television sectors (amongst others in the cultural and creative industries) have now sent a letter to MEPs pointing to "a cynical campaign from tech companies flooding the inboxes of MEPs with scaremongering that the copyright directive would be the end of the internet" adding "Please note that this is the 20th anniversary of their first claim that copyright provisions would break the internet. And it has never happened." And the actual creators of music from across Europe are calling on MEPs to protect Europe’s status as a global hub for culture saying that the tech giants must pay fairly for content hosted on their platforms. Robert Ashcroft, Chief Executive of PRS for Music, said: “After three years of debate, one of the most controversial pieces of legislation ever to come before the European Parliament is about to go to the vote. This is about copyright and specifically about the rights of creators versus those of the Internet giants; it is about the way the Internet functions as a fair and efficient marketplace. It is a debate we must win if we want to secure our creative community into the next decade.” Jimbo Barry, producer and songwriter, known for co-writing hits for The Script, said: “I do worry about the sustainability of the professional music industry, as a songwriter. If copyright becomes free for the music that I write, and I don’t get paid in any sense for the music being used either on the radio or the platforms online, then logically, I won’t be able to sustain myself as professional. I hope that the fight for copyright for songwriters improves and that songwriters are just able to sustain the work that they love.
It will be left to MEPs to address the balance that is surely needed: “Creators and news publishers must adapt to the world of the internet as it works today,” rapporteur Axel Vossn MEP), said in a European Parliament Committee on Legal Affairs news release.“The Committee position aims to ensure that widely recognised and observed copyright principles apply to the online world, too.”
The legislation will now be debated in ‘trilogue negotiations’ where EU legislators and member states debate proposed legislation. The next plenary vote on the copyright review is due to take place on July 5th, and the final vote of the full plenary of the European Parliament is expected to take place in December. However, the decision of the JURI Committee which approved the proposed text, certainly increases the likelihood of Articles 11 and 13 becoming law - but it's going to be a battle!
These days, a cursory search for “copyright” online will likely result in one thing more than any other: headlines about the [insert scary adjective here] draft for the Directive on Copyright in the Digital Single Market. It’s certainly something to keep an eye on, and the CopyKat has covered the DSM Directive here and here. But in other copyright news…
Is Warner Bro's Westworld game a blatant rip-off?
Bethesda Softworks is suing Warner Bros. and Fallout Shelter co-developer Behaviour Interactive over the recently released Westworld. Bethesda Softworks alleges that not only is the mobile game based on HBO’s TV series a “blatant rip-off” of Fallout Shelter, but that it also uses the same code as Fallout Shelter. The lawsuit, filed on 21 June in Maryland District Court, is a civil action for breach of contract, copyright infringement, unfair competition, and misappropriation of trade secrets.
a scene from HBO's hit show, Westworld
The original Fallout Shelter was released in 2015 for mobile devices, and is now available for play on Nintendo Switch, Windows PCs, PlayStation 4, and Xbox One. Fallout Shelter is a free-to-play simulation game, which has in-app purchases, where players build and manage a post-apocalyptic bunker full of workers (Variety). The Westworldgame, which is currently available only on Android and iOS mobile phones, allows players to manage a virtual replica of the theme park from HBO's hit Westworld TV show. The mobile game also features an “underground facility” that is similar to the vault in Fallout Shelter.
Bethesda accuses Warner Bros. of copying “the subtle sway, bounces, and minute movements in idle characters that give them and the scene a constant sense of motion and a distinctive feel as a result of unlawfully copying Bethesda’s code.” With these common elements discussed above in mind, Bathesda asserts that “there is more than a substantial similarity between Fallout Shelter and the Westworld mobile game.”
Of course, questions of inspiration can be argued either way. Importantly for Bethesda’s case, both Fallout Shelter and the Westworld game share the same developer: Behaviour Interactive. The company, which is Canada's largest independent video game development studio, is also a named defendant in the claim, which states:
“Warner Bros., sharing a similar consumer demographic, and recognizing Bethesda’s significant success in bringing its Fallout Shelter game to a broad audience on mobile devices, engaged and collaborated with Behaviour to develop a mobile app for its own science-fiction property, Westworld. To bring the Westworld mobile game to market, Behaviour and Warner Bros. utilized Bethesda’s intellectual property without authorization to develop a mobile game with the same or substantially similar gameplay experience as that provided by the copyrighted Fallout Shelter mobile game.”
The evidence continues to stack in Bethesda’s favour, with the publisher pointing out that the Westworld game even included the very same bugs or defects that were present in the early development stages of Fallout Shelter. Bethesda, which also publishes the popular Fallout, The Elder Scrolls, and DOOM games, is seeking an unspecified amount in damages from Warner Bros., and to have the Westworld game removed from app stores.
Social network, media company, host provider, neutral intermediary... what's in a name for YouTube?
Austrian commercial TV broadcaster ProSiebenSat1Puls4 has achieved a key victory in its four-year legal battle with YouTube. According to the Handelsgericht Wien (the Vienna Commercial Court) in its judgement of 6 June 2018, YouTube is not a neutral intermediary, but is rather jointly responsible for copyright breaches that take place on its video platform.
Puls4, a private broadcaster affiliated with the major broadcasting group ProSiebenSat.1, accused YouTube of complicity in copyright infringement. In 2014, Puls4 sued YouTube, arguing that the media giant had allowed Puls4’s stolen content to appear on the YouTube platform. YouTube responded by asserting the Host Provider Privilege set out in Article 14 of the E-CommerceDirective, which in certain situations exempts host providers like YouTube from liability for infringing activities by their users.
Austria's former Chancellor Christian Kern appears on Puls4 TV.
It is important to remember that the Host Provider Privilege only applies if the entity in question indeed qualifies as a “host provider” within the meaning of the E-Commerce Directive. This means that YouTube would have to prove it (a) does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or (b) upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.
Speaking to German newspaper Der Standard, Puls4’s CEO Markus Breitenecker explained that if YouTube “leaves its neutral intermediary position and assumes an active role, which could provide it with a knowledge of or control over certain data, it cannot rely on the liability privilege in this respect. And that is exactly what has happened in this case.”
Although (as of 25 June) the official judgement has not been published, the court cited the YouTube’s “links, mechanisms for sorting and filtering, in particular the generation of lists of particular categories, its analysis of users’ browsing habits and its tailor-made suggestions of content.” This led the court to determine that YouTube was prohibited from “playing the role of a neutral intermediary.”
In a statement to The Local Austria, YouTube said it was studying the ruling and “holding all our options open, including appealing” the decision. Both sides have four weeks to petition the court before it issues its binding ruling. In the meanwhile however, YouTube noted that it takes protecting copyrighted work very seriously.
If the preliminary decision is upheld, YouTube must perform a content check upon upload, instead of simply removing copyright infringing content upon notification. In respect of this, the Viennese court stated that “YouTube must in future — through advance controls — ensure that no content that infringes copyright is uploaded.” YouTube began beta testing a feature called Copyright Match last month, which shows rights holders who have had their work stolen and lets them ask YouTube to delete the guilty party’s video.
Although Austrian case law is not binding for other EU member states, the Commercial Court’s judgment sets a precedent for denying Host Provider Privilege to YouTube under EU law. This may encourage similar decisions in the future which are based on the same line of argument.
As Breitenecker put it, “the media companies who call themselves social networks will have to recognize that they, too, have to take on responsibility for the content with which they earn their millions.”
For creatives in California, a recent employment law case may raise concerns over copyright
A California court ruling from April has raised concerns regarding its potential impact on copyright ownership. In Dynamex Operations West, Inc. v. Superior Court of Los Angeles, the matter before the court was a wage dispute, which required the court to consider the standard to apply in determining whether workers should be classified as employees, or as independent contractors.
Nowhere in the 85-page judgement is “copyright” or even “intellectual property” mentioned. However, in a state with so many media and software companies, the new ruling could affect whether a creator or a company gets to claim ownership as the original author of a work. In deciding if a worker is eligible for statutory employment protections, Dynamex replaced a complex multi-factor consideration with a simple three-part “ABC” test. Now, Californian companies are burdened with the requirement to prove that all three parts weigh against an employment relationship.
What does this mean for copyright law? To determine if someone is an employee for purposes of copyright authorship, American Federal courts currently use a test in the US Treasury Department’s Internal Revenue Service code. If, however, the courts start looking to the Dynamex case for guidance, people’s expectations might change. Speaking to Bloomberg Law, music industry lawyer Michael S. Poster explained: “If, under California law, a lot more people are going to be treated as employees rather than as independent contractors, chances are that a lot of their work product that they would have retained a copyright interest in might belong to their employer.”
The rise of the gig economy, which is characterised by short-term contracts and freelance work, poses new questions for intellectual property ownership.
Although the Copyright Act of 1976 provides authors with initial copyright interests, under the work-made-for-hire doctrine, it is the employer that is considered to be the author. (Section 201(b)). On the other hand, if the author is an independent contractor or freelancer – rather than an employee – ownership is retained by the individual creator, unless there is a contractual agreement to the contrary.
For participants in the gig economy, the Dynamex ruling could simply prompt media and software companies to hire fewer independent contractors, and instead only hire people as employees. Although the copyright implications of Dynamex are unknown, the decision underscores the need for employers and workers alike to ensure that any contract for services includes a carefully drafted intellectual property rights clause – especially for those in creative industries.
And finally, for those of us still using our local library…
The new section amends the definition of "lent out" in the Public Lending Right Act 1979 (PLRA 1979) thereby extending it to “communication by means of electronic transmission to a place other than library premises.” Being “lent out” now captures the remote lending of e-books and audio-books, resulting in the extension of the public lending right under the PLRA 1979 to remote lending. The provision also amends the Copyright, Designs and Patents Act 1988.
Copyright in an e-book or e-audio-book within the public lending right scheme is not infringed when borrowed through a public library, provided that the e-book or e-audio-book in question has been lawfully acquired by the public library. Additionally, the lending must comply with any purchase or licensing terms to which the book may be subject.
Whilst everyone’s focus was on the implementation of GDPR, the Coreper (Council's permanent representatives’ committee) has agreed its position on a draft Directive on Copyright in the Digital Single Market [DSM Directive] (previously covered on IPKat here). The main objective of the Directive is to modernise the copyright framework and adapt it to the digital age. The compromise text of the Council would create a new right for press publishers for the online protection of their press publications, addresses the value gap between rightsholders and online platforms (covered previously on CopyKat), encourages collaboration between online content sharing services and rightsholders and seeks to create exceptions to copyright on text and data mining. (Full text of the agreed position is available here)
Nevertheless, there are many views which believe that rather than improving protection of the copyrighted material, the Directive will cause a lot of harm. One of them is MEP Julia Reda (Pirate Party, Germany), who notes that the reform may require paying money (link tax) by “merely linking to a news site” and that concerns about how that might negatively impact the entire internet “are being woefully ignored”. Furthermore, she points out at the provision which will “make platforms directly liable for all copyright infringements by their users”. The platforms will be able to avoid “unreasonable liability if they can show they’ve done everything in their power to prevent copyrighted content from appearing online – namely, by deploying upload filters”. Such obligation will be particularly harmful to small and mid-size companies making it nearly impossible for many of them to function in the EU. The Directive, apart from the motivation to harmonise the laws across the EU, also aims to “level the playing field” between big international internet companies and traditional publishers. As observed by Sterling the introduction of new provisions rather than improving the situation of publishers, is likely to cause damage to both users and publishers interests. ‘Save your internet’ campaign believes that adoption of Article 13 of the Copyright Directive proposal, which requires online services to take ‘effective and proportionate’ action to prevent copyright infringements, will in fact, “impose widespread censorship of all the content you share online”. According to Centrum Cyfrowe, the “ongoing reform could be a chance to make life easier, work more productive and fun - well - more fun! Instead, the reform misses the right perspective on the future”. Therefore, many of the organisations still believe that the public should now reach out to MEPs before the reform becomes the law, in order to address the concerns related to proposed changes. The debate on the new DSM Directive is definitely going to be the one worth watching.
Being currently one of the most popular games and attracting millions of players, Fortnite and PlayerUnknown's Battlegrounds (PUBG) relying on the concept of ‘last player standing’ online games, although being similar, so far have managed to co-exist together on the market. Nevertheless, recently the makers of PUBG have filed a lawsuit in South Korea against producers of Fortnite (Epic Games) for alleged copyright infringement. Although the report does not specifically mention the claims, PUBG accuses Epic Games of copying user interface and game items. PUBG makers have been quite active in chasing app developers who copied specific elements from their game, as well as, PUBG cheaters. Nonetheless, the lawsuit against Epic Games is surprising, given the number of active users playing the Fortnite game. TorrentFreak believes that the lawsuit will not cause an end to the Fortnite game, with a high possibility of a settlement, or a court order requiring to alter certain elements of the game.
The Michael Jackson estate has sued ABC, as well as its parent company Disney for using without their permission Jackson’s music videos, songs, live video footage from the concerts and also extracts from ‘This is It’ movie, in a documentary called ‘The Last Days of Michael Jackson’, which aired in May. As reported by CMU Daily, the estate has criticised the programme before the broadcast, given that they have not been consulted about the documentary. Howard Weitzman, representing the estate confirmed the lawsuit by saying that "Disney and ABC committed wilful and intentional copyright infringement when they used the estate's copyrighted materials without the estate's permission”. In response to the lawsuit, ABC has defended the broadcast by saying that the documentary “explored the life, career and legacy of Michael Jackson, who remains of great interest to people worldwide, and did not infringe on his estate’s rights”. Given that ABC was stating that the documentary will be a news programme and therefore its use of third-party materials is legal, it is believed that the defendants will rely on a ‘fair use’ defence.
The long-lasting battle between the family of late Egyptian film composer Baligh Hamdi and Jay-Z over the moral rights (previously discussed by CopyKat here) has now been decided by the US Court of Appeals for the Ninth Circuit. The family in its claim filed in 2007 has accused Jay-Z of sampling in his ‘Big Pimpin’’ track samples of the song ‘Khosara’ created by Hamdi. In its 2015 the District Court has ruled that the family lacked legal standing against Jay-Z given that in 2002, the family has transferred all of his economic rights to Egyptian individual Mohsen Jaber, including the right to create derivative works adapted from “Khosara”. In its ruling, the Ninth Court held that in order to “have standing to sue for copyright infringement alleged to have been done by JayZ’s adaptation of ‘Khosara’, [the family] must have retained the exclusive right to prepare derivative works of ‘Khosara’, such as Big Pimpin’”. In relation to the moral rights argument, the Court ruled that with the notion that an author’s work is “almost universally understood to be an extension of the author’s personhood”, moral rights aim to protect the creator’s “personal or moral interests” in the work. Therefore, moral rights are not transferable to another party. The appeals court has also agreed with the representatives of Jay-Z who brought an argument saying that the case was entirely about moral rights under the Egyptian law and therefore should not be pursued in the US court. The court has ruled that moral rights that the family retained by Egyptian law are not enforceable in a US federal court. Circuit Judge Carols Bea added that “even in Egypt, [the family’s] moral rights would be insufficient to win him anything but an injunction”. Attorney Christine Lepera representing Jay-Z said that this decision “provides an important road map regarding the distinction between moral rights which are not actionable in the United States, and the economic right in a copyright, which is". The decision, therefore, sets an important precedent regarding the moral rights of foreign creators in the US. (Law 360)
In 2015 Spotify was sued by musician David Lowery, who claimed that the music service had unlawfully reproduced and distributed songs without obtaining owner’s permission. A similar case was filed separately later by songwriter Melissa Ferrick. The two cases were consolidated and earlier this year the parties have agreed on a settlement fee. The proposed deal was however opposed by over 500 musicians and copyright owners, who called it as “grossly insufficient”. In its recent decision, District Judge Alison Nathan at the US District Court for the Southern District of New York overruled those objections and decided to approve the settlement between the parties. According to the settlement, Spotify will pay $43.45 million for past streaming, The settlement also provides a process for class members who had claimed relief to receive ongoing royalties for future streaming and will cover any copyright owner whose songs or musical compositions were made available between Dec. 28, 2012 and June 28, 2017. As noted in the settlement order, there are more than 535,000 potential Class Members. Together with ensuring payment of past and future compensation, the new settlement details a process where Spotify and the class counsel “will work collaboratively to improve the gathering and collecting of information about composition owners to help ensure those owners are paid their royalties in the future” (MusicWeek). As noted by District Judge Nathan, the objectors tend to focus on the value of the immediate payment while largely ignoring the future royalty payment programme and the non-monetary benefits that the settlement provides”. Therefore, it should be considered that “the amount of the settlement is not unreasonable”. In Nathan’s view, the settlement is “fair, reasonable and adequate”.
In the ongoing debate whether online platforms can be liable for copyright infringement, the Commercial Court in Vienna (Handelsgericht) has ruled this week that YouTube is not a neutral host provided and it must prevent third parties from uploading copyright infringing content. The preliminary decision of the Court, which is not yet legally binding, related to a suit filed in 2014 by Austrian commercial TV channel Puls 4 against YouTube, after the content from its channel, which was protected by copyright was uploaded to the platform. YouTube has argued that it provided a technical service and therefore fell under the scope of the ‘Safe Harbour’ exemption under the EU’s E-Commerce Act, which provides that intermediaries providing technical service are not liable for the content uploaded by their users. Handelsgericht has disagreed with this argument say that YouTube’s activity in “sorting, filtering and linking” content on its platform, “in particular by creating tables of contents according to predefined categories” helps determine the surfing behaviour of its users. If the decision is held up, it may have an enormous impact not only on YouTube but also on other services such as Facebook, which would be required to monitor the content that appears on their websites. Now both parties have four weeks to petition the court before the binding ruling is issued. It is also expected that if the ruling stands, YouTube will appeal.
As the world comes together today to panic about celebrate the GDPR coming into force, this COPYKAT follows the money.
Stock photo companies: uncertain standing? When a photographer licences their work to a stock photo company, is that company entitled to bring a copyright infringement claim if those images are subsequently used unlawfully? The answer, at Federal District level in the United States at least, is "maybe".
In May 2012, stock images company DRK Photo sued textbook publishing giant McGraw-Hill for alleged copyright infringement. DRK claimed that McGraw-Hill printed and distributed textbooks containing licensed images (636 unique photographs in total) which exceeded its licence agreement. However, the Court issued a summary judgement in favour of the defendants, because DRK failed to demonstrate any adequate ownership in the copyrights to confer standing. The case, DRK Photo v. McGraw Hill et al, was then heard on Appeal from the United States District Court for the District of Arizona. The Ninth Circuit affirmed the district court's verdict in favour of McGraw Hill.
This case turned on a seemingly nuanced point of blackletter law, which reinforces the importance of careful drafting in intellectual property assignments and licensing agreements. Section 501(b) of the Copyright Act allows the “legal or beneficial owner of an exclusive right under a copyright” to sue for infringement. Unhelpfully, the Copyright Act does not define “beneficial owner.” The question before the Court was therefore whether the right to sue extends to an assignee, who has pre-existing interests in the copyright, and is subsequently injured by infringement.
A key precedent was established in the 1969 case of Prather v. Neva Paperbacks, Inc., which held that an assignee is a proper party to bring suit for copyright infringement. As recently as 2015, Minden Pictures, Inc. v. John Wiley & Sons, Inc held that a stock photography agency, serving as the exclusive licensing agent for allegedly infringed photographs, did have standing to sue for infringement under the Copyright Act.
In its claim against McGraw Hill, DRK contended that Minden created “a bright line rule” that all stock photography agencies have standing to bring copyright infringement claims, by virtue of their agreements with their photographers. In his judgement, Judge Hawkins slapped down DRK for “reading Minden too broadly.”
The decision went on to cite the 2005 case of Silvers v. Sony Pictures Entertainment, Inc, which reaffirmed the principle that a party with no ownership interest has no standing to sue, as “the Copyright Act does not permit copyright holders to choose third parties to bring suits on their behalf.” In evaluating the licence agreements between the photographers and DRK, the Court found that those photographs were under non-exclusive licenses. Accordingly, DRK could not be deemed the legal owner of any exclusive right pertaining to the images.
Freelancers finally make (some) bank.
In 2001, nearly 3,000 freelance journalists filed a class-action lawsuit for copyright infringement against some of the country’s biggest publishers, including The New York Times. It’s taken 17 years, but the cheques are finally in the mail.
The case, Re Literary Works in Electronic Databases Copyright Litigation (or simply “Freelance”) concerned the copyright relationship between freelance authors, print publications, and electronic databases. In particular, the lawsuit alleged that publishers – including the New York Times, TIME, and Economist – shared licensed articles written by freelancers to the Lexis/Nexis electronic database and other digital indexers, without first obtaining the writers’ approval.
James Gleick was previously a reporter and editor for The New York Times for 10 years. He is now the president of the Authors Guild and one of the named claimants in the case. He explained, “the argument that we made was the writers got paid for one-time use. We sued The Times because they sold copyrighted work by not just their staff, but also freelance writers. And the correct thing to do would have been to ask the freelance writers for permission and then pay the writers.”
Settlement was nearly reached in 2005, but negotiations stalled over disagreement regarding writers who had not registered copyrights for their work. In the United States, registration with the US Copyright Office is required before a suit for copyright infringement may be brought in federal court. However, the 2010 Supreme Court ruling Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 held that the settlement proceedings could continue.
The parties again reached what seemed to be a final agreement in 2014, only to endure four more years of delays caused by 41,000 objections challenging specific claims under the revised settlement agreement (Publishers Weekly). This tactic appears to have paid off for the defendants, however, as the final pay-out for the freelancers equalled only 50% of the $18 million liability cap negotiated in the initial settlement agreement.
Writing about her experience as a class member for LA Observed, Ellen Alperstein explained: “Did I receive what I was due? Nah. But more important than my check for $2,555.77 was confirmation that my work has value that our justice system respects. That organizations such as the ASJA served a vital role in my nascent career, educating me about writers' rights and my responsibility in advocating for them.”
Nightmare in Nigeria for Copyright Society.
Controversy surrounding the Copyright Society of Nigeria (COSON) reached epic proportions earlier this month, as power struggles between the organisation and the Nigerian Copyright Commission (NCC) rumble on (Daily Trust).
Following a General Meeting of COSON in December 2017, several members sent a petition to the Governing Board to request an investigation regarding certain decisions made at the meeting. The Commission then issued directives to COSON Management, requesting that the irregularly-made decisions not be implemented. COSON Management failed to comply, and subsequently had its license revoked in line Regulation 19 (2) of the Copyright (Collective Management Organizations) Regulation 2007.
The continuing defiance of COSON Management is, according to Ezekude, “a clear indication of COSON’s unwillingness to operate within the framework of the Copyright Act” (4Traders). In return, COSON has called directly upon Nigeria’s President, Muhammadu Buhari, to immediately relieve Afam Ezekude of his position as the Director General of the NCC (today.ng).
By way of background, COSON was established in 2010 as the sole collective management organisation approved by the Nigerian Copyright Commission (NCC) to act on behalf of musicians and owners of sound recordings in Nigeria. In particular, COSON undertakes negotiating, granting copyright licences and collecting royalties, and curbing the “biting case of piracy that has plagued the Nigerian music industry.” (Music in Africa).
Before COSON was founded, multiple entities had promised to represent the interest of musicians and other creatives, including the Nigeria Copyright Council, Music Collective Society of Nigeria and the Performing Musicians Association of Nigeria. Their failure to deliver on these promises led to the call for a singular collective management organisation as a result. Ultimately, it was COSON which obtained support of other national associations and the permission to collect royalties on behalf of Nigerian artists.
When first established, COSON was heralded as “one of the most important developments in the Nigerian entertainment industry in the last fifty years“ (Lessons for Africa). Unfortunately, this ongoing drama will provide little comfort to Nigeria’s creatives.
Speaking to The Nation on the subject, Nigerian artist Paul Play Dairo stated: “When you have a monopoly, this will not be flexible. They will take things for granted. I don’t know why Nigerians feel that only one collecting society will solve their problems. And also, as a concerned Nigerian musician, I believe that I have the right to protect my intellectual property, I have the right to choose the collecting society that I want to join.”
Smokey Robinson supports CLASSICS for fairer compensation.
As the CopyKat previously covered, copyright legislation is soon to be updated in the United States. Earlier this month, Motown legend Smokey Robinson joined a number of other entertainers before the United States Congress to throw weight behind stronger copyright protections for artists and rights owners. The proposed Music Modernisation Act (MMA) has received wide bipartisan support from Democrats and Republicans alike. Musicians from all backgrounds likewise welcome the new payment provisions in particular, as many assert that making a living off sales of albums and CDs is "a thing of the past" as users increasingly turn to streaming.
The MMA will be comprised of several separate titles (sections). Title II, entitled “Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society (CLASSICS) Act” will focus on public performance rights for pre-1972 recordings. If passed, musicians with pre-1972 recordings will receive royalty payments when their tracks are played on the radio, with royalties then allocated for recordings played on the Internet, cable, and satellite radio.
This will amend current copyright law, which only protects music produced after Feb. 15, 1972. Robinson explaining that musicians deserve to be compensated in the same way, regardless of the recording dates of their particular music. The CLASSICS Act is intended (inter alia) “to fix the quirk in the law that created this loophole” (Variety).
“The records of the 50’s and 60’s aren’t called “classics” because of their age,” he noted. “They’re called classics because of their greatness. They still resonate today. They add value to our lives and bring people together. They define America.”
Robinson then detailed that during an audit of a digital services company several years ago, he discovered the company owed him $250,000 in royalties. After confronting them, he was offered $12,000 and told, “If you don’t like it, sue us.” In his written testimony, Robinson explained that few artists have the financial resources to commence legal proceedings, and would therefore benefit from statutory damages protection. You can watch a clip of Robinson answering Senator Cornyn’s question about statutory damages here.
Inspired by our friends at The IPKat and the post that Ebhlin Vardy published this morning, we also wish to let our readers know that tomorrow the EU General Data Protection Regulation EU (2016)/679 (GDPR) comes into force in all EU Member States.
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The International Framework for the Protection of Authors: Bendable Boundaries and Immovable Obstacles
Thursday June 7th 17.30-19.30 CITY UNIVERSITY LAW SCHOOL
The international framework within which authors’ rights in their works are protected and exploited is often the topic of debate in the context of the reform of national copyright laws: Professor Sam Ricketson takes a pragmatic approach to identifying the “immovable obstacles” to reform, while seeking to expose the potential flexibilities and gaps – the “bendable boundaries” - within the international framework that may enable the realisation of some, at least, of the objectives of those who would seek to reform and reformulate copyright laws. It may be that there is a brave new world for the protection of authors’ rights that is embedded within the interstices of the present international framework that is waiting to be uncovered and realised. Why not attend this free seminar to find out more!
Professor Sam Ricketson (University of Melbourne) holds degrees from the Universities of Melbourne and London, and is a Fellow of the Academy of Social Sciences of Australia and Australian Academy of Law.
Location: AG07b College Building City, University of London St John Street
THE SEMINAR IS FREE BUT YOU NEED TO SIGN UP FOR THIS EVENT