This week, we’re chatting with IPLJ’s Volume 27 Online Editor and former host of the Fordham IPLJ Podcast, Anthony Zangrillo. Anthony is now an associate with Weil Gotshal in the firm’s Capital Markets practice. As a staff member on IPLJ, Anthony wrote a blog post about Universal and Disney’s arrangement regarding Marvel IP in theme parks. We chat about life as a first-year associate, Anthony’s experience using Moviepass in the wake of their recent privacy controversy, and whether Universal and Disney might be revisiting the terms of their agreement in the wake of Black Panther’s success.
This is the final episode for the Volume 28 staff. Look out for some bonus content over the summer, and another season of all-new episodes this fall.
This week, Staff Correspondent Mike Rivera speaks with Conor Tucker, a litigation associate at Irell & Manella in Los Angeles. This year, IPLJ published Conor’s article regarding the Defend Trade Secrets Act of 2016. Conor explains the ways in which the DTSA was inspired by the Economic Espionage Act of 1996, and the massive, unexpected jurisdictional issues that were created by this newly expanded federal protection of trade secrets.
This week, Staff Correspondent Fannie Law speaks with Professor Schlomit Yanisky-Ravid, a visiting professor at Fordham Law and an expert on artificial intelligence and intellectual property law. Professor Yanisky-Ravid is the head of the Fordham Center on Law and Information Policy AI-IP Project, researching the impact of advanced technology, such as artificial intelligence and blockchain. She talks about her work with AI-created content and its application to current copyright law. She also discusses the implementation of new models to resolve the challenges that AI presents for intellectual property law.
At present, it is unclear whether street art and graffiti are eligible for copyright protection in the United States. While art depicted on public walls is likely to fall within the types of works protected by copyright law,2 unauthorized placement of such works raises the question of whether copyright protection can attach to art resulting from criminal conduct.
This dilemma is exemplified by a case that H&M brought against artist Jason “Revok” Williams in March of 2018.3 After noticing his graffiti work in the background of an H&M ad campaign, Mr. Williams sent a cease and desist letter asserting copyright infringement.4 In response, H&M filed a complaint seeking a judicial declaration that Mr. Williams did not have copyright in graffiti created through illegal acts.5 Ultimately, the legal question was not resolved because severe public backlash caused H&M to withdraw its complaint just one week after it was filed.6
The early conclusion of the H&M case means that creators of illegally placed street art and graffiti may not enjoy exclusive rights to the reproduction, sale, and display of their works.7 However, litigation in another case has cautiously determined that graffiti artists enjoy moral rights to their works under the Visual Artists Rights Act of 1990 (“VARA”).8 This amendment to U.S. copyright law stipulates that a work of visual art is eligible for the independent right of attribution and integrity, including the right to prevent the intentional or grossly negligent destruction of a work of recognized stature.9
In Cohen v. G&M Realty L.P.,10 twenty-one plaintiff graffiti artists attempted to save their works from redevelopment of the 5Pointz property in Queens, New York. As the defendant property owner whitewashed the plaintiff’s works before trial, the plaintiffs’ sole recourse was to seek monetary damages. The Eastern District of New York held that “a plethora of exhibits and credible testimony” resulted in a finding that almost all of the plaintiffs’ works easily achieved “recognized stature.”11 Not only did the plaintiffs demonstrate that the 5Pointz works appeared in multiple media and news outlets, but the plaintiffs’ expert detailed the craftsmanship and importance of the works to the wider art world.12 As a result, the Court awarded the plaintiffs total damages of $6,750,000.13
The outcomes in H&M and Cohen uniformly signal a strong social recognition of graffiti as valuable public art. However, the legal ramifications of illegally placed street art and graffiti remain unclear. Because the property owner in Cohen provided permission for artists to display their work,14 the Court was not required to consider the effects of criminal conduct upon the creation of visual art. Therefore, the unauthorized placement of graffiti remains subject to legal challenge. Furthermore, the defendants in Cohen filed a Notice of Civil Appeal on February 23, 2018.15
For the time being, one could say that copyright is indeed for losers. However, the identity of the losers has yet to be determined.
Music enhances many everyday activities and makes them more enjoyable. Whether it involves smooth jazz while reading, lively modern tunes while cooking, or classic rock while cruising on the highway, there is a certain undeniable and abstract kick to doing things with music. This concept is something that video game developers have subsequently sought to capitalize on when designing new products. However, the legal protections around music have resulted in a bizarre situation for some video game consumers.
Believing the inclusion of hit songs will enhance consumers’ immersion and overall level of enjoyment, video game developers generally seek to license assorted tracks from the various rights holders.1 These tracks can be licensed for a one time “buy-out” fee which covers all copies of a game sold within the agreed upon term, usually five to ten years.2 So, what happens when that term expires? In the case of physical media like game disks for consoles, there isn’t much a game publisher can do, as the licensed tracks are hard-coded onto those disks. Releasing and adding new content after the game’s purchase is easy enough; the new content is simply stored on local memory rather than the disk. However, content like licensed songs that arrived on the base disk generally cannot be removed, as the consumer can simply play offline away from any content-removing patches.
Contrast this, however, with consumers who purchase games for their PC through digital distribution systems on the internet like Steam. Games purchased in this manner are downloaded and stored in such a way that their coding can be substantially altered via updates, either supplementing content by adding code or cutting content by altering the existing code. It is this latter situation that is currently angering consumers within the context of expiring music licenses.
The popular game Grand Theft Auto IV, which was released back in 2008, turns ten years old later this month.3 Consequently, several of the music licenses from the base game are set to expire.4 This is a significant development for a game like Grand Theft Auto IV, where licensed songs play on the in-game radio to further add to the game’s expansiveness, significantly adding to the appeal of the game. The game’s publisher, Rockstar, is currently set to issue an update that modifies the game’s code, thereby removing a number of songs for all consumers that purchased the game via digital distribution.5
For Rockstar, this same issue last arose in 20126 and 2014,7 when similar updates to earlier installments of the GTA series prompted consumer backlash for lack of warning and removal of content they had already paid for. The removal of content based on the expiration of a music license is fairly understandable on its face – the license allowed use for a certain amount of time, and that time has since expired – but it is the fragmented effect on different consumers that should give one pause for concern.
As it stands, consumers that purchased the game through Steam and other digital distributors are disproportionately affected by this removal of content. Certain console owners supposedly will be prompted to download a digital copy of the game sans the songs under the expired licenses,8 but realistically, there is nothing stopping the console consumer from disconnecting from the internet and playing the game, music and all, indefinitely. This raises the question of whether the removal of content post-purchase is proper, given that some consumers would be entirely unaffected. Both console consumer and digital distribution consumers paid the same $60 price at launch,9 so why are only some consumers having content they paid for taken away? This issue of equity is something that must be addressed soon, as more and more media consumption moves to digital distribution.
As of now, this removal of content post-purchase appears to be a problem unique to video games. With other media like TV shows and movies, sale of physical media like DVDs is generally prohibited when the work in question still contains music under expired licenses.10 These works can still be streamed through services like Netflix, but only if the subject music is cut out or replaced.11 However, as movies and TV shows become more and more available for digital purchase,12 one can easily imagine something similar happening with digital copies of these media through Amazon, iTunes, or Paramount. If this issue isn’t addressed, there may very well be a day when people will be shocked to realize they can no longer listen to Aerosmith’s hit “I Don’t Want to Miss a Thing” at the end of their digital copy of 1998’s Armageddon, and surely that is a future that no one desires.
Earlier this year, the Copyright Royalty Board (“CRB”) raised the royalty rate for songwriters on streaming platforms such as Apple Music and Spotify from 10.5% to 15.1%.1 The 43.8% increase, imposed after a four-month trial between songwriters and streaming services, was the greatest royalty jump in CRB history.2
Songwriters everywhere will appreciate greater revenue from streaming services, but the CRB’s decision will have a profound impact on independent artists, which are artists not affiliated with a major record label.
The popularity of streaming services has been surrounded by the narrative that streams were paying out significantly less royalties than digital downloads or radio plays.3 Because independent artists receive most of their income through music sales, many were reluctant to jump into deals with streaming services.4 On the other hand, independent artists saw streaming as an opportunity to expand their fan base and increase their revenue via performances and merchandise.5 The most recent CRB decision to increase revenues helps hedge that bet for independent artists.
Independent labels and artists have performed extremely well on streaming platforms because artists no longer need to be affiliated with a major label to negotiate a distribution deal.6 Streaming services are an open door for independent artists, and the services’ data-driven playlists, like Spotify’s Discover Weekly, work favorably for independent music.7 Analytics have helped listeners reach lesser known artists based on their music preferences.8
Analytic-driven services help independent artists collect data about their audiences as well.9 New applications like AWAL Insights have paired with streaming services to provide independent artists with listeners’ locations, genders, ages, and time of listening across multiple streaming services.10 The application can also provide benchmarks against similar artists and recommendations for driving engagement.11
Chance the Rapper, Macklemore, and The Lumineers are among many artists who have found various ways to gain a large following without help from a major record label. Social media helped launch The Lumineers when people shared “Ho Hey” after it debuted at the end of a CW TV show. Streaming catapulted the folk band to a triple platinum debut album and made “Ho Hey” a number one hit.12 Macklemore and producer Ryan Lewis used online buzz through YouTube views to propel themselves to six million downloads for their eventual lead single, “Thrift Shop.”13 ’
Chance the Rapper prominently used all the above tactics to become the first streaming-only artist to take home a Grammy.14 Chance released free music via SoundCloud as a promotional tool to attract an audience toward his social media and build his brand.15 After performing frequent open mic nights, Chance received a high-profile co-sign from Childish Gambino, and later, Kanye West.16
Although record labels are still considered imperative for artists to achieve mainstream commercial success, streaming services have paved a way for independent artists to reach broader audiences. Artists and their management teams are using business savvy techniques to gain popularity in the music world without having to fear that a major label will usurp creative control of their music.
With some artists utilizing a streaming platform as their primary means of fan outreach and distribution, members of the music industry have pondered the possibility of Spotify and Apple Music becoming major labels of their own.17 If economically feasible, the dynamics of the music industry would surely shift, and the term “independent artist” will most likely be redefined.18 No matter the trajectory of streaming and the music industry, now that the CRB has provided improved royalties for songwriters, the era of popular independent artists will continue.
This week, we’re talking with Sally Hubbard. Sally is a senior editor at the Capitol Forum, where she primarily covers antitrust issues. Sally was a featured panelist at this year’s IPLJ Symposium, speaking on the topic of Safeguarding Information Integrity in the Era of Fake News. Sally is also the founder and host of the Women Killing It! Podcast, where she interviews women at the top of their careers about what has worked for them, how they got where they are today, and what they wish they knew earlier. Sally and I chatted about the relationship between consolidated market power and gender and racial inequality.
Read Sally’s article in Forbes, and subscribe to her podcast, Women Killing It!, on Apple Podcasts or wherever you get your podcasts.
The EU General Data Protection Regulation (GDPR) will enter in force on May 25, 2018 and will bring about the greatest change in European data protection and data security. The GDPR is an EU regulation regarding processing, storage, and use of personal data.1
The GDPR was designed to harmonize data privacy laws across the European Union and lays down rules relating to the protection of natural persons with regard to the processing of personal data and rules relating to the free movement of personal data according to Article 1 sec. 1 of the GDPR.2 The purpose is to ensure that data subjects have greater control over their personal information.3 Data subjects especially have the right to actively consent to every use of personal data, as well as a right to be forgotten and the right to have their data be portable.4
Whereas the territorial scope of EU-Regulations usually applies to controllers who are based in the European Union or who have a subdivision in the European Union, the GDPR has expanded its territorial scope. The territorial scope of the GDPR differs from the previous directive regarding data protection since the territorial scope is increased to an extra-territorial applicability.5 The GDPR applies to companies based in the European Union and multinational corporations that do business in the European Union. The GDPR can also apply to U.S. companies that have no direct business operations in one of the 28 member states of the European Union.6
The GDPR protects the rights of European citizens residing in the European Union.7 According to Article 3 section 1 GDPR the Regulation applies to the processing of personal data in the context of the activities of an establishment of a controller or a processor in the Union, regardless of whether the processing takes place in the Union or not.8 Article 3 section 2 of the GDPR provides that the GDPR applies to the processing of personal data of data subjects who are in the Union by a controller or processor not established in the Union, where the processing activities are related to the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the Union. The GDPR also applies to the monitoring of behavior as far as the data subject’s behavior takes place within the Union.9 According to Art. 3 GDPR, the GDPR applies to all companies based in the European Union, irrespective of the place of processing. In addition, the GDPR will also apply if companies located in the United States only offer goods or services (also free of charge) to European residents or observe their behavior.10 For example, if a US-based provider creates profiles of consumers residing in the European Union for sales promotion purposes, he must comply with the GDPR. The application of the GDPR does not require a financial transaction.11
The GDPR is not applicable for every company that offers online services like homepages. The scope of application requires that a U.S.-based company targets data subjects residing in the European Union. Targeted marketing can be conducted by offering goods or services in a language spoken in a member state, offering shipping to member states or offering a payment in Euro.12 U.S. businesses that aren’t based in a member state of the European Union have to review if the GDPR will apply to them according to Article 3 GDPR.
Regulation 2016/679/EC of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC, 2016 O.J. L119/1 [hereinafter GDPR].↩
Gone are the days when seemingly non-malicious Internet users could inadvertently pierce copyright protections as they scoured the Internet for high-resolution images by way of Google’s image search function. A small but important change has been made by Google in an attempt to prevent such violations with the removal of the “view image” button that appeared when users clicked on a searched image.
Since the introduction of large secluded high-resolution images to Google Image Search in 2013, the “view image” button had been an extremely useful and convenient tool for users to engage in seemingly benign activity while skirting copyright protections without a second thought.1 While, of course, there are plenty of legitimate and legal uses of copyrighted material published on the internet, photographers, publishers, and stock image sites have long felt slighted by Google’s lack of copyright protections.2 In fact, this challenge to the rights of these internet stakeholders reveals that while we use the internet “freely,” it comes at a great cost to the producers of our content, particularly when private profit is gained for those – like Google – who provide an avenue to content rather than those – like Getty Images and its photographers – who create copyrighted content.
As a result of the disharmony between Google’s user-friendly agenda and content creators’ rights to protect what is theirs, Getty Images filed a legal complaint in April 2016 to the European Commission against Google.3 The complaint accused Google of promoting piracy and of engaging in “anti-competitive practices by promoting its own products and … reducing the need for users to visit the original source website.”4 As a consequence of the complaint, in a settlement agreement reached earlier this year, Google and Getty Images entered into a partnership for a multi-year global licensing agreement where Google may use Getty Images’ photos in its products.5 As part of the settlement, Google agreed to make changes to Image Search to protect photographers’ copyrighted images and to drive user traffic to websites. Those changes included making copyright attributions more noticeable, removal of the “Search by Image” button and, most notably, the removal of the “view image” button.6
Seemingly a step in the right direction by Google to protect copyrighted material and an adequate change for Getty Images to resolve their concerns, the small changes seem like nothing more than a step to frustrate users rather than a step to actually guarantee any copyright protections. The changes have been criticized as being “awful,” “user-unfriendly,” and as having “degraded the product.”7 In addition, although the “View Image” button is no longer on display, the buttons function can be imitated easily. This can be accomplished by all internet users by right clicking on a selected image and opening the image in a new tab, adding a simple extension to an internet browser that imputes the “view image” button back to its original place, or by using a different search engine such as Bing or Startpage which still have the “view image” button in place on their image searches.8 In an age where users have become accustomed to a largely user-friendly internet, and companies have benefitted from such ease of use, legal entities will have to strike a balance between protecting the rights of copyright holders and user friendliness so as to neither disrupt what has made the internet such an invaluable resource nor to overturn the benefits of protecting materials through copyright laws.
Liam Tung, Google Image Search: Here’s Why the View Image Button Just Vanished, ZDNet (Feb. 16, 2018, 12:01 PM GMT), https://www.zdnet.com/article/google-image-search-heres-why-the-view-image-button-just-vanished/ [https://perma.cc/643P-YZPR].↩
Jacob Kastrenakes, Google Removes ‘View Image’ Button from Search Results to Make Pics Harder to Steal, Verge (Feb. 15, 2018, 4:41 PM), https://www.theverge.com/2018/2/15/17017864/google-removes-view-image-button-from-search-results [https://perma.cc/AWE2-TU6X].↩
Indo-Asian News Service, Google Can Now Display Getty Images Content in Search Results, Gadgets 360 (Feb. 12, 2018), https://gadgets.ndtv.com/internet/news/google-can-now-display-getty-images-content-in-search-results-1811757 [https://perma.cc/56D6-GVT9].↩
IANS, With Google Removing ‘View Image’ Button, Microsoft’s Bing to Make Big Gains, Economic Times (Feb. 19, 2018, 5:12 PM), https://economictimes.indiatimes.com/magazines/panache/with-google-removing-view-image-button-microsofts-bing-to-make-big-gains/articleshow/62982295.cms [https://perma.cc/V3VN-MDB5].↩
In today’s era of digital communications, where data can be stored and accessed from almost anywhere in the world, and where privacy is becoming an increasing concern, how exactly do regulations come into play? For instance, can an email provider in the United States be compelled to turn over email content stored in another country? Where does one draw the line between privacy and the government’s investigation powers?
These were some of the questions posed in the highly anticipated case of United States v. Microsoft1 which began in 2013 when a New York federal judge granted the government’s application for a warrant under § 2703 of the Stored Communications Act (SCA) to obtain email content and information from Microsoft associated with a suspected drug trafficker.2
Microsoft refused to provide the email content stored in Ireland, saying that the term “warrant” carries territorial limitations, meaning that U.S. law enforcement officers may be directed by a court-issued warrant to seize items in the U.S. only.3 The government, on the other hand, argued that the warrant was similar to a subpoena, which requires the recipient to deliver the records to the government, regardless of location.4
After the district court ruled against Microsoft and held the company in civil contempt for refusing to provide the content, Microsoft appealed to the Second Circuit, which reversed the district court’s ruling.5 The Second Circuit found that because the SCA is silent as to its territorial reach, it must be read consistently with the presumption against extraterritoriality and thus does not apply abroad.6
The case was elevated to the Supreme Court for oral arguments,7 but came to an abrupt end upon the passage of the CLOUD (Clarifying Lawful Overseas Use of Data) Act on March 23, 2018.8
Prior to the CLOUD Act, the U.S. could only access data stored overseas through mutual legal-assistance treaties (MLATs).9 With a MLAT, nations could put in writing the terms of willingness to help each other with legal investigations.10 The Senate votes on each MLAT, which must receive a two-thirds approval to pass.11 Through the CLOUD Act, U.S. law enforcement officials at any level, from local police to federal agents, can compel tech companies to turn over user data, regardless of where the company stores the data.12 The CLOUD Act also gives the executive branch the ability to enter into “executive agreements” with foreign nations, which could allow each nation to get its hands on data stored overseas, no matter the hosting nation’s privacy laws.13 These agreements do not require congressional approval.14
As a result of the CLOUD Act, the Department of Justice (DOJ) moved on March 30, 2018 to drop the Microsoft lawsuit as moot.15 A few days after, Microsoft filed a response agreeing with the DOJ’s motion.16 In effect, both the government and Microsoft agreed that the newly passed CLOUD Act renders the lawsuit meaningless.17
According to Microsoft President Brad Smith, “the passage of the CLOUD Act is an important milestone in the journey to modernize the law, enable enforcement officials to do their jobs and protect people’s privacy rights across borders.”18 He added that “[w]hile the CLOUD Act creates new rights under new international agreements, it also preserves the common law right of cloud service providers to go to court to challenge search warrants when there is a conflict of laws – even without these new treaties in place.”19
The dispute, however, is not yet over. The DOJ obtained a new search warrant requiring Microsoft to turn over the emails pursuant to the CLOUD Act.20
While the CLOUD Act appears to resolve the gap in the SCA, some activists think that the new law could open the door to increased surveillance and erode protections for human rights.21 Significantly, the CLOUD Act allows for the president to enter into executive agreements with foreign governments covering data collection on criminal suspects.22 Thus, while the CLOUD Act makes allowances for entering into agreements with countries that respect the rule of law, repressive governments could benefit from the legal agreements allowed under the act.23
According to David Ruiz of the Electronic Frontier Foundation (EFF), with the CLOUD Act in place, “US and foreign police will have new mechanisms to seize data across the globe.”24 “Your private emails, your online chats, your Facebook, Google, Flickr photos, your Snapchat videos, your private lives online, your moments shared digitally between only those you trust, will be open to foreign law enforcement without a warrant and with few restrictions on using and sharing your information.”25
Joshua Rich, partner at McDonnell Boehnen Hulbert & Berghoff LLP and chairman of the firm’s Trade Secrets Practice Group also pointed out that the CLOUD Act may result in “some backlash in the international arena.”26 Rich also noted that “communications that take place outside of the U.S., if relevant to an investigation, could be subject to disclosure, which may anger citizens in foreign countries with stricter privacy laws. This backlash could translate to users turning away from U.S. email providers.”27
While the CLOUD Act is a step forward in terms of closing the Microsoft case, a lot of questions still remain. It will be interesting to see how the Microsoft warrant will be treated in light of the CLOUD Act, and more importantly, how the new law will impact the government’s power to obtain data from overseas considering the growing number of privacy regulations.
Matthew Kahn, Microsoft-Ireland Oral Argument Preview: Will the Supreme Court Stave Off Data Localization?, Lawfare (Feb. 26, 2018), https://lawfareblog.com/microsoft-ireland-oral-argument-preview-will-supreme-court-stave-data-localization [https://perma.cc/5E28-UJ2Z].↩
Paul Hastings LLP, Recap: Oral Arguments in United States v. Microsoft Corp., Lexology (February 28, 2018), https://www.lexology.com/library/detail.aspx?g=30e6123b-8229-4526-a18e-9d4c4bdaec5e [https://perma.cc/244N-RLMQ].↩
Karlin Lilington, US Cloud Act ends Microsoft Dublin email case with a whimper, Irish Times (April 5, 2018), https://www.irishtimes.com/business/us-cloud-act-ends-microsoft-dublin-email-case-with-a-whimper-1.3450643 [https://perma.cc/9A9P-6FRX].↩
Ellen Nakashima, Justice Department asks Supreme Court to moot Microsoft email case, citing new law, Washington Post (March 31, 2018), https://www.washingtonpost.com/world/national-security/justice-department-asks-supreme-court-to-moot-microsoft-email-case-citing-new-law/2018/03/31/e3c46e60-34f6-11e8-8bdd-cdb33a5eef83_story.html?utm_term=.98af897fde13 [https://perma.cc/NA6V-X8WV].↩
Rob Lever, New US law changes rules for cross-border data requests (March 23, 2018), France24, http://www.france24.com/en/20180323-new-us-law-changes-rules-cross-border-data-requests [https://perma.cc/H4QL-K6Y2].↩
Lauren Williams, How will the CLOUD Act work?, FCW (April 5, 2018), https://fcw.com/articles/2018/04/05/cloud-act-in-practice.aspx [https://perma.cc/VZR7-8RAF].↩