Listen up, all you internet users (which is basically everybody but my mother, who still views the Internet as the work of the devil, and will quote from the book of Revelation in support of her theory).  Three bills you need to be aware of, because they may change the way you view (or more correctly, the way you are allowed to view) the Internet.  and from what I’m reading, there are some pretty darned big sites and companies that are ready to either “go dark” in protest (Wikipedia, for example, which is where I do most of my legal research) or lend a big supporting hand to the protests of the current bills being considered (Google is one – who can live a day without Googling something?  I mean for cryin’ out loud the Company has made itself into a verb!!).  Those bills are:

Welcome one and all to something that will undoubtedly change both history and the world as we know it:  the first installment of what will hopefully be a regular publication which we have decided to call From the “What the…?”File.  Basically, I’ll be picking up on out-of-the-mainstream stuff which any of us could have lived without knowing, but it will at least be stuff that is both interesting and has a bit of a twist.  At least in theory, anyway.  So, without further ado, here goes the collector’s item first issue.  I can confidentially say that that when you’re done, you too will be saying “What the…?”

European Copyright – The Write Stuff?

OK, not many of us care about Euro Copyright issues – I fully admit that.  But this is actually kind of interesting (even if it is Euro-centric).  It seems that way back in 2006, a Hollywood-funded, Netherlands-based anti-piracy group (known as ‘BREIN’, and please don’t ask me what it stands for) asked a musician to compose music for an anti-piracy video. The video in question was to be shown at a local film festival, and under these strict conditions the composer accepted the job.

However, the anti-piracy ad was recycled for various other purposes apparently without the composer’s permission. When the composer bought a Harry Potter DVD early 2007 (presumably a licensed one), he noticed that the campaign video with his music was on it. According to the composer And this was no isolated incident. He is now claiming that his work has been used on tens of millions of Dutch DVDs, without him receiving any compensation for it. The total claimed lost revenue is roughly a million Euros (which is about $1.3 mil US). 

But wait -- there’s more.  You’d think that the guy would have received some collection support from local rights societies.  You’d think.  But soon after he discovered the unauthorized distribution and after contacting a local music royalty collection agency not only did he not receive any royalties, one of their Board members offered to help ONLY if the composer assigned all his rights to the organization AND gave the guy a third of what was collected.   Ultimately the board member resigned and the anti-piracy group denied it was their fault in the first place.  But what’s more shocking – that anti-pirates are pirates themselves, or that there is corruption in the music industry? Hmmm – tough question.

Former NBA legend Bill Russell has recently brought a suit against the National Collegiate Athletic Association (“NCAA”) (Russell v. NAT’L Coll. Athletic Ass’n., 11-04938, U.S. District Court, Northern District of California).  Russell’s suit is one of several the NCAA is currently facing revolving around alleged violations of federal antitrust laws.  Russell alleges the NCAA used his likeness from his days as a collegiate athlete at the University of San Francisco, where he led the men’s basketball team to national championships in 1955 and 1956.  He also claims that the NCAA has violated federal antitrust laws by preventing former student athletes (football and basketball) from being compensated for the commercial use of their images and likenesses.  Russell alleges that the NCAA sells videos of the championship games he led his team in for $150, without compensating the featured athletes.

The Topps Company (“Topps”) is suing fellow baseball trading card manufacturer Leaf Trading Cards (“Leaf”) for copyright and trademark infringement in a lawsuit recently filed in federal court (The Topps Company, Inc. v. Leaf Trading Cards, LLC, USDC SDNY, No. 11-civ-5585).  Topps claims that Leaf does not have the right to use pictures of old Topps cards featuring the company’s logos and players it has under exclusive contract.  The dispute arose over Leaf’s recent advertisement for its “2011 Leaf Best of Baseball” product.  The Best of Baseball pack, available to collectors, consists of one Leaf-created cut signature card and a PSA or BGS graded and authenticated card previous issued by various other manufacturers.  Some of the cards included in the packs are a 1952 Topps Mickey Mantle, a 1972 Carlton Fisk rookie, a 2001 Albert Pujols rookie, as well as cards autographed by teenage phenom Bryce Harper. One-pack boxes have been selling at retail for $235-275.

Boston University graduate student, Joel Tenenbaum, recently was ordered to pay $675,000 to record companies and the Recording Industry Association of America, for copyright infringement. The award was based on his having illegally downloaded and distributed 30 music files from the Internet. The award was made by a jury in the United States District Court for the District of Massachusetts.

Before the trial began the court excluded Tenenbaum's fair-use defense. On the stand Tenenbaum admitted that he had downloaded the music to his computer. Based on his testimony the court ruled against Tenenbaum on liability and held that the jury had only to determine the amount of damages to award.

At closing the defense argued that Tenenbaum was only a "kid" who had done what many other "kids" had done. The defense suggested that the jury should award 99 cents for each of the 30 songs Tenenbaum had downloaded - the sum he would have had to pay if he had legally purchased each song from an online music seller. The jury didn't buy the argument. It awarded $22,500 per song for a total of $675,000, although it could have awarded significantly more.

Tenenbaum has stated that he intends to appeal the award. In addition to the rejection of his fair-use defense, he also intends to argue that the award of statutory damages is unconstitutional.

This verdict suggests that jurors are still willing to award significant damages in copyright infringement cases, even in a situation where the infringing activity may be characterized as commonplace and something to be attributed to youthful indiscretion.

In the past the RIAA and record companies have settled many of their infringement cases for nominal sums. Given the results of this trial, settlement seems to be a far better defense strategy than taking the risk of a significant loss. Given the magnitude of the verdict the RIAA and record companies understandably may be less inclined to settle future cases for nominal sums.

The Eastern District of Texas has struck again and in denying post trial motions, awarded Patent Holder i4i Limited Partnership a judgment against Microsoft of $290 Million and more importantly, issued a permanent injunction against Microsoft prohibiting the future sale of Microsoft Word 2003 and 2007 if it contains the infringing elements (which it currently does). This is a blow to Microsoft not in terms of the relative pocket change to them of $290 Million, but in having to deal with the injunction. The court applied the four prong test set forth in eBay v. MercExchange and found that i4i proved all four factors for permanent injunction. Microsoft promises an appeal, but the court appears to have applied the correct law to the request for injunction and this might make it tough going for Microsoft. The court threw Microsoft a small bone when it set the injunction date out 60 days but Microsoft will need to either obtain a Federal Circuit stay of the injunction or do a quick design around or patch. Of course, Microsoft could always acquire the claimant i4i - for say $290 Million. The judge did not appear to believe that Microsoft was too big to enjoin, or that threatening the incredible pervasiveness of Word was a disservice to public policy. He found no such issue in prong four of the eBay test. There are numerous issues with which the Federal Circuit might find a problem on the merits of the ruling, but a jury spoke, a judge denied post trial motions and issued a permanent injunction. The written opinion is very strongly worded and strikes down every Microsoft argument. We will monitor for at least the next 60 days.

i4i v Microsoft Order.pdf (497.03 kb)