Articles Posted in Intellectual Property

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The Digital Millenium Copyright Act (DMCA) contains a “safe harbor” provision that protects internet service providers that feature user-directed content from liability for copyright infringement. In UMG Recordings, Inc. v. Shelter Capital Partners, L.L.C., the Ninth Circuit Court of Appeals reviewed the requirements for “safe harbor” protection, upholding the broad interpretation that “safe harbor” has received from numerous courts in prior decisions.

Veoh is an online service, launched in 2005, that allows users to upload and share videos, view other users’ videos, and view authorized content from copyright holders. During the upload process, Veoh’s software applies various automated processes to make video files available to users via streaming in a common, accessible format. Veoh’s revenue comes from advertising, but access to all of its content remains free of charge. Users who wish to upload content must agree to Veoh’s terms of use, which prohibit uploading copyrighted content without permission. Veoh also uses filtering software to prevent uploading of infringing content.

UMG Recordings is one of the world’s largest music publishers. Its activities include music production, music distribution, and music video production. It owns an extensive catalog of copyrights. Veoh concedes that users were able to access and download content copyrighted by UMG, despite its efforts to prevent copyright infringement. Veoh has removed material alleged to be infringing on UMG copyrights, based on notices from the Recording Industry Association of America (RIAA).

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The list of generic top-level domains (gTLD’s), such as “.com” or “.edu,” has changed very little over the history of the internet, until recently. Between January and May of 2012, the Internet Corporation for Assigned Names and Numbers (ICANN) accepted applications for new gTLD’s. It reportedly received more than two thousand applications, many of which may go live by the start of 2013, after review by ICANN. Trademark owners should be aware of their rights, in the event that someone else attempts to register an infringing gTLD.

ICANN recognizes several different types of top-level domains, and the most well-known, and widely available, TLD’s are the generic TLD’s. Seven original gTLD’s became available in the 1980’s, .com, .edu, .gov, .int, .mil, .net, and .org. Three of these, .com, .net, and .org, have been available to registrants with no restrictions. ICANN added new gTLD’s over the years, such as .biz, .info, and the recently-added .xxx, making a current total of twenty-two. In June 2011, ICANN took an unprecedented step of allowing applications for new gTLD’s beginning in 2012. The application process requires filing a complicated packet of materials and a non-refundable fee of $185,000 payable to ICANN.

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The internet and social media have allowed people, businesses, and brands to communicate and interact more than ever before. As much benefit as that brings, it also brings significant risks to the reputation of both people and brands. The internet allows people to post using a pseudonym, or to appropriate someone else’s name. The appropriated name could be that of a prominent individual or (“public figure”), but online “persona hijacking” can affect anyone.

Generally, the motive of most persona hijacking is profit or fraud. Someone may appropriate the name or likeness of a famous person to profit from public goodwill towards that person. It could include setting up social media accounts, e-mail addresses, or websites using the person’s name, or some other effort to spoof the person’s identity. For a person who is not famous, persona hijacking may serve a function much like identity theft, using that person’s credentials to obtain, for example, fraudulent credit.

In some cases, the purpose of persona hijacking is to submit a person’s name to criticism or parody. The line between legitimate commentary and unlawful harassment, however, can be very fine, and parody can easily become a “false light” portrayal of a person. Use of a person’s name or likeness for the purpose of criticism or parody may, in certain limited circumstances, be protected by the First Amendment. In other cases, it may constitute unlawful infringement of a person’s trademark rights or right of publicity.

A person who uses their own name in commerce, usually someone prominent in business or entertainment, may obtain trademark protection. This generally prohibits others from using the name commercially. For most people, the right of publicity prohibits use of their name or likeness without their consent, especially for commercial purposes. The Fair Use doctrine, however, may allow use of a name or likeness for legitimate criticism or parody, where it is clear that the work is not originating from the person being appropriated.

You can take several steps to protect yourself from online persona hijacking:

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In general, small businesses are often a labor of love for their owners. They require a massive commitment of time and energy to build, nurture, and grow, but along the way, small businesses can get caught in a wide variety of legal quagmires. Understanding these risks, and knowing how to prepare for and mitigate them, is key to avoiding time- and resource-consuming legal disputes that can hinder or even ruin a business. Legal risks of small businesses could fit into seven very broad categories:

1. Maintaining a Safe and Secure Premises: Brick and mortar businesses may encounter claims from customers or others injured by an unsafe condition on business property, such as a broken step or a spilled substance on the ground. Regular maintenance of the premises, along with liability insurance, can mitigate this risk.

2. Consumer Complaints: Businesses that do not promptly respond to customer complaints about products or services may encounter legal claims. Customers should receive prompt responses to reasonable complaints or concerns.  All advertising and marketing materials must accurately portray the company’s products or services in order to avoid deceptive trade practice claims.  Robust quality control may help a business avoid putting faulty or defective products into the marketplace. This can help companies avoid product liability claims.

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Copyright law, which protects a person’s rights to his or her own creative works, dates back nearly to the invention of the printing press. It protects a creator’s ownership of a creative work and the rights to use the work publicly. It also gives a creator remedies against anyone who infringes those rights. Where trademark law protects brand names, logos, and other “marks” representing a product or service, copyright law protects creative works like novels, songs, photographs, designs, or software. Computer technology, particularly the internet, has made copyright infringement quite easy and created new challenges for copyright owners.

Nearly any original creative work has copyright protection. Online, this can include graphics and designs, text, photo or video files, music, or code. A website created for a business most likely contains content subject to the protections of U.S. copyright laws. Technically speaking, copyright protection applies the moment a work is created in a physical form, which includes creation as a digital file. While copyright laws apply to a work upon its creation, enforcement is very difficult unless the creator takes additional steps to document the work’s creation and ownership with the government.

The U.S. Copyright Office allows copyright owners to formally register their works in a central location. Registration may deter others from infringing on a work, and it allows a copyright owner to effectively defend a work through the litigation process. Evidence of registration with the Copyright Office serves as prima facie evidence of ownership in a legal dispute. Most importantly, registering a work in a timely manner allows the owner to claim statutory damages in an infringement suit. Courts can award damages of up to $150,000 per act of intentional infringement, but only if the copyright owner follows the registration procedures.

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Companies cannot survive, let alone thrive, in today’s business environment without an Internet presence. Businesses and brands maintain websites and social media profiles in order to advertise and market products and services, but also to interact with customers. Social media in particular has given businesses an unprecedented ability to reach out to customers and to respond to their concerns. With this ability, however, comes the risk that unauthorized third parties will register an Internet domain with a company’s or brand’s name, or a deceptively similar name, and create a misleading or even harmful website. The practice of registering an Internet domain using the name of a trademarked brand is often known as “cyber-squatting.” Businesses and people who are the victim of cyber-squatting have remedies through a process established by several organizations that oversee and regulate Internet domain names.

The Internet Corporation for Assigned Names and Numbers (ICANN) is a private nonprofit corporation based in Los Angeles, California. It represents a collaboration between government agencies and several private organizations. ICANN has final responsibility for assignment of domain names, IP addresses, and other identifying information used by machines on the Internet.

In order to effectively handle disputes or complaints relating to domain name registrations, ICANN enacted the Uniform Domain Name Dispute Resolution Policy (UDRP). Anyone who owns or registers a domain name with a “.com,” “.org,” or “.net” top-level domain has agreed to abide by the terms of the UDRP by virtue of their agreement with their domain name registrar.

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U.S. News recently reported that since mid-2010 over 220,000 individuals have been sued in mass copyright lawsuits regarding the sharing of files over bittorrent. However, with the growth of these types of lawsuits, courts are concerned because of the possibility that subpoenas to obtain internet subscriber information may bring in innocent parties in litigation and improper joinder of parties.

Generally, Bittorrent is a peer-to-peer internet file-sharing protocol that allows a “swarm” of users to download and upload content from each other simultaneously. A user who supplies an entire copy of a file is called a “seeder,” while users in the process of downloading a file who have not yet completed their downloads are called “peers.” Peers download portions of the file at random, and upload those portions to other members of the swarm. Peers do not choose which pieces are downloaded and they do not choose who to share those portions with. Nevertheless, a peer is able to see the IP addresses of the other swarm members. Accordingly, it is possible for a copyright owner to join a swarm and obtain the IP addresses of the users sharing a given file.

It seems that bittorrent litigation will not be slowing down. Thus, courts are now more resistant to mass-joinder cases clogging up their dockets especially when the plaintiffs have no intention of litigation, but rather are merely seeking identifying information and authorization to pursue discovery in the interest of gaining settlement leverage. As more defendants file motions to quash suggesting that that they did not participate in the alleged activity, courts are also becoming sensitive to the idea that IP addresses may not be as likely to identify defendants as previously suspected. Plaintiffs, on the other hand, continue to refine their practices and theories of liability. See Liberty Media Holdings LLC v. Hawaii Members of Swarm…, Case No. 11-CV-00262-DAE-RLP, (Jan. 30, 2012 Order, denying motion to dismiss as to direct and indirect infringement and civil conspiracy, but dismissing allegation that failure to secure WiFi amounts to actionable negligence).

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Megaupload.com was among the world’s biggest file-sharing sites with 150 million registered users and about 50 million hits daily. It was big enough that it earned founder Kim Dotcom $42 million in 2011.

The movie industry objected that the site was making money off pirated material; even though, Megaupload is based in Hong Kong and the founder was living in New Zealand, some of the alleged pirated content was hosted on leased servers in Virginia, which was sufficient for U.S. prosecutors to take action.

Thereafter, the site was closed and its founder and three Megaupload employees were arrested in New Zealand on allegations by American prosecutors that they facilitated millions of illegal downloads of films, music and other content, costing copyright holders at least $500 million in lost revenue.

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In January 2011, the University of Minnesota filed suit alleging that a website operator violated copyright law by posting a widely-used psychological test online. The psychological test, which is known as the Minnesota Multiphasic Personality Inventory (“MMPI”), was developed to assess personality traits and help diagnose mental disorders. This test contains more than 500 statements which test takers are supposed to mark either true or false. Over the years, MMPI has become one of the most commonly used psychological tests. The lawsuit alleges that a New Zealand-based Web operator named Andrew Dobson illegally posted the statements and software that claimed to interpret the answers to two websites.

The university’s main concern is to avoid exposure of the test questions to ensure validity of responses because if test-takers have seen the test before, then any responses may be invalid. The University’s lawyer stated that the lawsuit was filed to ensure the websites did not repost the tests. In addition, if the websites cooperate, the lawsuit will likely be withdrawn.

This topic is an example of how intellectual property can be obtained and abused by a third party without legal justification. Intellectual property refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce. Intellectual property is divided into two categories: (1) Industrial Property which includes patents for inventions, trademarks, industrial designs and geographical indications; and (2) Copyright which includes literary works (e.g., novels, poems and plays), films, music, artistic works (e.g., drawings, paintings, photographs and sculptures) and architectural design. The legal rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and broadcasters in their radio and television programs.

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Google, Inc., which is currently the world’s largest Internet search company, lost its bid to seal legal documents in a patent-infringement lawsuit filed sometime in 2010 by Oracle, Corp. (ORCL). Google’s attempt to seek protection of portions of a transcript related to expert witnesses under the attorney-client privilege was futile.

The United States District Court stated that:

The document is “an incomplete draft of an e-mail message” and “never was sent to anyone.” Thus, the document is not a communication of any type, much less a communication protected by the attorney-client privilege.”

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