Copyright Opinions
Second Circuit Permits Distribution of Cloud-Based
Samples, But Declines to Consider "Novel" Cloud Storage
Infringement Issue: Smith v. Barnesandnoble.com, LLC, No.
15-3508 (2d Cir. October 6, 2016)
Jacobs, J. In a copyright infringement suit, the Second
Circuit affirmed the district court's summary judgment for
defendant on a contract defense. A customer accessed a book that
defendant Barnes & Noble had uploaded to a cloud-based digital
"locker" pursuant to a distribution agreement, after
termination of the agreement. Barnes & Noble prevailed on
summary judgment in the district court on the ground that providing
access to the book sample did not constitute direct or contributory
infringement under Cartoon Network, LP, LLP v. CSC Holdings,
Inc., 536 F.3d 121, 131–33 (2d Cir. 2008) and the
"Sony-Betamax rule" of Sony Corp of America
v. Universal City Studios, Inc., 464 U.S. 417, 442 (1984). The
Second Circuit "decline[d] to decide the infringement issue in
the novel context of cloud storage, particularly given the sparse
facts of the case," instead affirming on the basis that
plaintiff's distribution agreement explicitly permitted
distribution of samples and did not provide for termination of the
license upon termination of the distribution agreement.
Use of "Who's on First?" Was Not Fair Use,
But Routine Is in Public Domain: TCA Television Corp. v.
McCollum, No. 16-134-cv (2d Cir. October 11,
2016)
Raggi, J. In a copyright infringement action involving
Abbott and Costello's iconic Who's on First?
routine, the district court dismissed the action on the grounds
that defendants' verbatim incorporation in their play of more
than a minute of Who's on First? was fair use as a matter of
law. The Second Circuit rejected those grounds for dismissal,
holding that all four statutory factors of 17 U.S.C. § 107
weighed against a defense of fair use. In particular, the Second
Circuit held that the use was not "transformative,"
concluding that defendants' play "may convey a dark
critique of society, but it does not transform Abbott and
Costello's [r]outine so that it conveys that message"
(emphasis in original). The Second Circuit nevertheless affirmed
the district court's dismissal on the ground that plaintiffs
had failed plausibly to plead ownership of a valid copyright,
holding that—as a consequence of various contracts relevant
to rights in Who's on First?—the routine had
lapsed into the public domain.
Second Circuit Rejects DMCA Safe Harbor Judgments for
MP3Tunes: EMI Christian Music Group, Inc. v. MP3tunes,
LLC, Nos. 14-4369-cv, 14-4509-cv (2d Cir. October 25,
2016)
Lohier, J. In a copyright infringement suit involving an
internet service provider (ISP)—which provided a digital
"locker storage" service and a related searchable index
of free music on the internet—the Second Circuit affirmed in
part, vacated in part and reversed in part various rulings of the
district court. First, the Second Circuit vacated the district
court's grant of partial summary judgment for defendants under
the Digital Millennium Copyright Act's (DMCA) ISP safe harbor
provisions, specifically addressing the safe harbor's
requirement that an ISP "adopt[] and reasonably
implement[]" a policy for terminating accounts of "repeat
infringers"—which the district court limited to mean
"blatant" or willful infringers. The Second Circuit
rejected this definition of "repeat infringers" as
"too narrow" in view of the DMCA's text, structure
and legislative history, and held that a reasonable jury could have
found that defendants did not meet the repeat-infringer policy
requirement. Second, where the jury had found that defendants had
"red-flag knowledge" or willful blindness with respect to
certain categories of plaintiffs' songs and were thereby barred
from safe harbor protection, the Second Circuit reversed the
district court's grant of JMOL for defendants as to the
categories of "MP3s from major labels issued before 2007, and
all songs by the Beatles," finding sufficient evidence from
which the jury could have inferred knowledge by defendants that
digital copies of such songs had not been authorized. The Second
Circuit further rejected the district court's reasoning that
barring safe harbor protection on these grounds would—in
contravention of the DMCA—impose a duty to monitor or
affirmatively seek out infringement.
Trademark Opinions
570-Word List of Character Names Does Not Function as
Trademark: In re Light, Nos. 2014-1597, 2014-1598 (Fed.
Cir. October 7, 2016) (non-precedential)
Lourie, J. The Federal Circuit affirmed the Trademark
Trial and Appeal Board's (TTAB) rejection of applications to
register two marks—each of which consisted of stylized
wording accompanied by a list of fanciful names of fictional
characters comprising over 500 words in columnar format—on
the grounds that the marks "merely convey[ed]
information" and did not function as source-identifying
trademarks. Where the TTAB found that the "sheer number and
visual display of the words in the applied-for matter" would
make it "significantly more difficult" for the public to
perceive the putative marks as "unitary trademark[s],"
the Federal Circuit held that "[a]lthough there is no limit on
the number of words that can make up a trademark, the Board
correctly found here that the exhaustive list of characters . . .
weighs in favor of finding no registrable trademark." The
court further rejected the applicant's claims of acquired
distinctiveness, on the ground that she had not presented
sufficient evidence that she had promoted the matter as a
trademark. Finally, the court affirmed the TTAB's rejection of
certain proposed amendments to the marks as "materially
altering the original subject matter."
En Banc Ninth Circuit Applies Octane Fitness and
Highmark to Fee-Shifting Under Lanham Act: Sunearth, Inc. v.
Sun Earth Solar Power Co., Ltd., Nos. 13-17622, 15-16096 (9th
Cir. October 24, 2016)
Per curiam. Without discussing the underlying case, the
Ninth Circuit en banc adopted the Supreme Court's fee-shifting
analysis of Octane Fitness, LLC v. ICON Health & Fitness,
Inc., 134 S. Ct. 1749 (2014)—a case under the Patent
Act—in the context of the Lanham Act's provision for
awarding attorney fees in "exceptional cases":
"[D]istrict courts analyzing a request for fees under the
Lanham Act should examine the 'totality of the
circumstances' to determine if the case was exceptional . . . ,
exercising equitable discretion in light of the nonexclusive
factors identified in Octane Fitness and [Fogerty v.
Fantasy, Inc., 510 U.S. 517 (1994)], using a preponderance of
the evidence standard." The Ninth Circuit further held,
following the rule of Highmark Inc. v. Allcare Health
Management System, Inc., 134 S. Ct. 1744 (2014)—also
addressing the Patent Act—that its "review of [a]
district court's decision on fees awarded under the Lanham Act
is for abuse of discretion."
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