U.S. Supreme Court holds that a buyer of a copy of a copyrighted work lawfully manufactured abroad is free to import that copy into the United States and sell it or give it away without obtaining permission to do so from the copyright owner.

by Allen M Lee22. March 2013 10:01

In Kirtsaeng v. John Wiley & Sons, Inc., the U.S. Supreme Court has held that the “first sale” doctrine, which allows the owner of a copy of a copyrighted work to sell or otherwise dispose of that copy as he or she wishes, applies to copies of a copyrighted work lawfully made abroad.

Section 106 of the Copyright Act grants “the owner of copyright” certain exclusive rights, including the right “to distribute copies . . . of the copyrighted work to the public by sale or other transfer of ownership.” 17 U. S. C. § 106(3).  This right is qualified by, among other things, the first sale doctrine, which provides that a purchaser of a work protected by copyright is permitted to freely sell or otherwise dispose of that copy without the permission of the copyright owner.  17 U.S.C. § 109(a) (“the owner of a particular copy . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy”). 

However, prior to Kirtsaeng, courts were divided as to whether the first sale doctrine applied to works that were made by the copyright owner outside of the United States.  Under 17 U.S.C. § 602, importation into the United States of so called “gray-market goods” constituted an infringement of the copyright owner’s exclusive right to distribute copies of his or her work.  See 17 U.S.C. § 602(a)(1) (“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501”).

In Kirtsaeng, the Court held that that the first sale doctrine applies to copies of a copyrighted work lawfully made abroad.  Accordingly, a buyer of a copy of a copyrighted work lawfully manufactured abroad is free to import that copy into the United States and sell it or give it away without obtaining permission to do so from the copyright owner.

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U.S. Supreme Court holds that a buyer of a copy of a copyrighted work lawfully manufactured abroad is free to import that copy into the United States and sell it or give it away without obtaining permission to do so from the copyright owner.

by Allen M Lee22. March 2013 09:18

In Kirtsaeng v. John Wiley & Sons, Inc., the U.S. Supreme Court has held that the “first sale” doctrine, which allows the owner of a copy of a copyrighted work to sell or otherwise dispose of that copy as he or she wishes, applies to copies of a copyrighted work lawfully made abroad.

Section 106 of the Copyright Act grants “the owner of copyright” certain exclusive rights, including the right “to distribute copies . . . of the copyrighted work to the public by sale or other transfer of ownership.” 17 U. S. C. § 106(3).  This right is qualified by, among other things, the first sale doctrine, which provides that a purchaser of a work protected by copyright is permitted to freely sell or otherwise dispose of that copy without the permission of the copyright owner.  17 U.S.C. § 109(a) (“the owner of a particular copy . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy”). 

However, prior to Kirtsaeng, courts were divided as to whether the first sale doctrine applied to works that were made by the copyright owner outside of the United States.  Under 17 U.S.C. § 602, importation into the United States of so called “gray-market goods” constituted an infringement of the copyright owner’s exclusive right to distribute copies of his or her work.  See 17 U.S.C. § 602(a)(1) (“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501”).

In Kirtsaeng, the Court held that that the first sale doctrine applies to copies of a copyrighted work lawfully made abroad.  Accordingly, a buyer of a copy of a copyrighted work lawfully manufactured abroad is free to import that copy into the United States and sell it or give it away without obtaining permission to do so from the copyright owner.

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U.S. Supreme Court holds that a buyer of a copy of a copyrighted work lawfully manufactured abroad is free to import that copy into the United States and sell it or give it away without obtaining permission to do so from the copyright owner.

by Allen M Lee22. March 2013 09:18

In Kirtsaeng v. John Wiley & Sons, Inc., the U.S. Supreme Court has held that the “first sale” doctrine, which allows the owner of a copy of a copyrighted work to sell or otherwise dispose of that copy as he or she wishes, applies to copies of a copyrighted work lawfully made abroad.

Section 106 of the Copyright Act grants “the owner of copyright” certain exclusive rights, including the right “to distribute copies . . . of the copyrighted work to the public by sale or other transfer of ownership.” 17 U. S. C. § 106(3).  This right is qualified by, among other things, the first sale doctrine, which provides that a purchaser of a work protected by copyright is permitted to freely sell or otherwise dispose of that copy without the permission of the copyright owner.  17 U.S.C. § 109(a) (“the owner of a particular copy . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy”). 

However, prior to Kirtsaeng, courts were divided as to whether the first sale doctrine applied to works that were made by the copyright owner outside of the United States.  Under 17 U.S.C. § 602, importation into the United States of so called “gray-market goods” constituted an infringement of the copyright owner’s exclusive right to distribute copies of his or her work.  See 17 U.S.C. § 602(a)(1) (“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501”).

In Kirtsaeng, the Court held that that the first sale doctrine applies to copies of a copyrighted work lawfully made abroad.  Accordingly, a buyer of a copy of a copyrighted work lawfully manufactured abroad is free to import that copy into the United States and sell it or give it away without obtaining permission to do so from the copyright owner.

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U.S. Supreme Court affirms Ninth Circuit holding limiting the First Sale doctrine to works that are legally made and sold in the United States

by Allen M Lee5. July 2011 12:03

Under the First Sale doctrine, codified in 17 U.S.C. § 109(a), once a copyright owner consents to the sale of a copy of his work, he may not thereafter exercise the distribution rights with respect to those copies.  Section § 109(a) provides in pertinent part:

 

Notwithstanding  the provisions of section 106(3), the owner of a particular  copy . . . lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy . . . .

At issue in Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. Cal. 2008), was whether the First Sale doctrine applies where the works are made outside the United States and sold here. The Ninth Circuit held that the First Sale doctrine does not apply.  On appeal, the U.S. Supreme Court issued a decision without analysis affirming the judgment in a 4-4 Split Decision.   Costco Wholesale Corp. v. Omega, S.A., 2010 U.S. LEXIS 9597 (U.S. Dec. 13, 2010) (affirmed by an equally divided Court).

In Omega S.A., defendant Costco Wholesale Corporation (“Costco”) purchased watches bearing Omega, S.A.’s (“Omega”) copyrighted designs on the “gray market” in the following manner:  Omega manufactured the watches in Switzerland and sold them to authorized distributors overseas.  Other third parties then purchased these watches and sold them to a New York distributor, which then sold the watches to Costco, who then sold the watches in the U.S.  Omega filed a lawsuit alleging that Costco’s sales of its watches constituted copyright infringement because it violated Omega’s exclusive right to distribute copies under 17 U.S.C. § 602(a) and 106(3).  These sections provide in pertinent part:

 

17 U.S.C. § 602(a):

Importation into the United States, without the authority of the owner of copyright under this title, of copies . . . of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies . . . under section 106, actionable under section 501.

 

17 U.S.C. § 106(3):

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights . . . to distribute copies . . . of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.

In reaching its decision, the Ninth Circuit applied its prior precedent, including the presumption against extraterritoriality, which states that a U.S. statute "applies only to conduct occurring within, or having effect  within, the territory of the United States, unless the contrary is clearly indicated by the statute."  Omega S.A. at 987-88 (“the [Copyright] Act presumptively does not apply to conduct that occurs abroad even when that conduct produces harmful effects within the United States”).  Therefore, Section 109(a) applied only to copies lawfully made and sold in the U.S., and not to copies made overseas.  Since the Omega watches sold by Costco were not made in the U.S., Section 109(a) was not available as a defense to copyright infringement. 

As a result of Omega S.A., retailers in the Ninth Circuit that resell goods manufactured from abroad, and purchased and imported into the U.S. by third parties, must obtain consent from the copyright owners prior to reselling the goods.  Similarly, importers of such goods must obtain consent from the relevant copyright owners prior to resale.

 

Allen M. Lee  Mr. Lee’s practice focuses on business, corporate and intellectual property matters, including the creation, protection and exploitation of intellectual property assets.  For more information contact: Allen M. Lee, a Professional Law Corporation, Tel: (408) 249-2735, Email: info@allenmlee.com, Internet: www.allenmlee.com.

 

 

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Can copyright protection attach to book titles, short phrases or slogans?

by Allen M Lee29. December 2010 11:41

Q:  Can copyright protection attach to book titles, short phrases or slogans?

A:  Probably not, but this may change depending on how much protectable content there is.  The general rule is that “a combination of unprotectable elements is eligible for copyright protection only if those elements are numerous enough and their selection and arrangement original enough that their combination constitutes an original work of authorship.”  Satava v. Lowry, 323 F.3d 805, 811 (9th Cir. Cal. 2003).  The majority of courts have held that titles and short phrases do not meet this minimum requirement. 

See, e.g., Narell v. Freeman, 872 F.2d 907, 911 (9th Cir. Cal. 1989) (“Ordinary phrases are not entitled to copyright protection. . . Phrases and expressions conveying an idea typically expressed in a limited number of stereotyped fashions are not subject to copyright protection.”); Yu Zhang v. Heineken N.V., 2010 U.S. Dist. LEXIS 121084 (C.D. Cal. May 12, 2010) (“Words and short phrases such as names, titles, and slogans; familiar symbols or designs; mere variations of typographic ornamentation, letter or coloring are not subject to copyright.”); Alberto-Culver Co. v. Andrea Dumon, Inc., 466 F.2d 705, 710 (7th Cir. Ill. 1972) (“ 'Brand names, trade names, slogans, and other short phrases or expressions cannot be copyrighted, even if they are distinctively arranged or printed.”); CMM Cable Rep v. Ocean Coast Props., 97 F.3d 1504, 1520 (1st Cir. Me. 1996) (“copyright protection simply does not extend to “words and short phrases, such as names, titles, and slogans”).

Further, the U.S. Copyright Office's regulations specifically exclude from copyright protection “words and short phrases such as names, titles, and slogans . . . .” 37 C.F.R. § 202.1(a). The Second Circuit has endorsed this principle as a “fair summary of the law.”  Kitchens of Sara Lee, Inc. v. Nifty Foods Corp., 266 F.2d 541, 544 (2d Cir. 1959). 

It should be also noted that copyright protection protects only against copying of the actual expression of an idea, and does not protect the idea itself.  Kay Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 208 (3d Cir. Pa. 2005) (“It is a fundamental premise of copyright law that an author can protect only the expression of an idea, but not the idea itself”).

 

Allen M. Lee  Mr. Lee’s practice focuses on business, corporate and intellectual property matters, including the creation, protection and exploitation of intellectual property assets.  For more information contact: Allen M. Lee, a Professional Law Corporation, Tel: (408) 249-2735, Email: info@allenmlee.com, Internet: www.allenmlee.com.

 

 

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Ninth Circuit Announces Rule for Determining When a Software User is a Licensee Rather than an Owner of the Product

by Allen M Lee15. September 2010 08:25

On September 10, 2010, the Ninth Circuit announced in Vernor v. Autodesk, Inc., No. 09-35969 (9th Cir. Sept. 10, 2010), a rule for determining when a software user is the owner or a mere licensee in a software program.  This distinction is important, because under copyright law, owners are free to resell their copies of their software program under the first sale doctrine, whereas licensees are not unless otherwise permitted under their respective license agreements.

Under the first sale doctrine, codified in 17 U.S. C. § 109, “the owner of a particular copy . . .  is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy . . .”  However, Congress specifically excluded owners of software from renting, leasing or lending copies of software programs for direct or indirect commercial advantage.  See 17 U.S.C. § 107(b)(1)(A).

The Court held that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions. 

In Vernor, the software program at issue was Autodesk’s AutoCAD Release 14, which is sold pursuant to a software license agreement (“SLA”).  The SLA stated that Autodesk retains title to all copies of the program, and that customers could not rent, lease or transfer the software.  Further, the SLA imposed significant use restrictions, including prohibitions on modification or disassembly of the software, removal of any proprietary notices or marks, use outside the western hemisphere, and use for commercial purposes if the software was labeled for educational use only. Applying these facts, the Court determined Autodesk only granted users a license and not ownership in the program.  As a consequence, the first sale doctrine was not applicable to any subsequent resales of the software, thereby making such resales potentially infringing.

 

Allen M. Lee  Mr. Lee’s practice focuses on business, corporate and intellectual property matters, including the creation, protection and exploitation of intellectual property assets.  For more information contact: Allen M. Lee, a Professional Law Corporation, Tel: (408) 249-2735, Email: info@allenmlee.com, Internet: www.allenmlee.com.

 

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U.S. Supreme Court declines to review important copyright case involving legality of remote storage DVR systems

by Allen M Lee30. June 2009 11:33

On the final day of its term, the U.S. Supreme Court declined to review an important copyright case involving the legality of “remote storage digital video recorder” (“RS-DVR”) systems.  At issue in the case was whether Cablevision’s RS-DVR system directly infringed on the copyrights owned by plaintiff content providers, which included Hollywood studios and television networks such as Twentieth Century Fox, University City Studios, Paramount Pictures and Disney. 

RS-DVR systems allow television viewers to record television programs and play them back later at their convenience.  However, unlike stand-alone digital video recorder (“DVR”) systems like those offered by TiVo, the cable programming is stored on central hard drives housed and maintained by the cable operator, not stand-alone DVR devices owned by the consumer.

In declining to review the case, the high court left standing a decision by the Second Circuit Court of Appeals, Cartoon Network v. CSC Holdings, 536 F.3d 121 (2nd Cir. 2008), which had held that Cablevision’s RS-DVR service did not infringe on plaintiffs’ copyrights.  In this case, plaintiffs advanced three reasons why the RS-DVR system directly infringed on their copyrights.  First, plaintiffs claimed that their exclusive rights of reproduction under the Copyright Act were violated when the cable content stream was stored in Cablevision’s RS-DVR buffering system. Second, plaintiffs claimed that their exclusive rights of reproduction were violated when the buffered content was then copied onto Cablevision’s central hard disk system.  Lastly, plaintiffs claimed that their exclusive rights of public performance were violated when the content was then transmitted from Cablevision’s central hard disk to the customer in response to a playback request. 

The Court of Appeals rejected all three claims.  The court framed plaintiffs’ first claim as whether, by buffering the data that make up a given work, Cablevision “reproduce[s]”  that work “in copies”  [under 17 U.S.C. § 106(1)], and thereby infringes the copyright holder’s reproduction right.  As defined in the Copyright Act, “copies” are “material objects . . . in which a work is fixed by any method . . . and from which the work can be . . . reproduced.”   17 U.S.C. § 101.  The Act also provides that a work is “fixed” in a tangible medium of expression when its embodiment . . . is sufficiently permanent or stable to permit it to be . . . reproduced . . . for a period of more than transitory duration.” Id.  Applying these definitions, the Court held that for a work to be “fixed” and thus copied, (1) the work must be “embodied” in that medium, i.e., placed in a medium such that it can be perceived, reproduced, etc.  from that medium; and (2) it must be embodied in that medium “for a period of more than transitory duration.”  Applying this test, the court then found that since the data remained in Cablevision’s buffer for a mere 1.2 seconds, the duration requirement was not met and thus the RS-DVR did not create “copies” as defined by the Copyright Act.

Regarding plaintiffs’ second claim, the court found that an important distinction between direct copyright infringement, the claim raised by plaintiffs, and contributory copyright infringement, a theory of liability which was expressly disavowed by plaintiffs, was some element of volition or causation.  The court found that because it was the customer who directed that the copy be made, and not Cablevision, there should be no finding of direct infringement.  Using an analogy, the court found that Cablevision’s case more closely resembled the situation of a copy shop proprietor who simply allows his customers to use the photocopier machines on his premises, as opposed to a copy shop proprietor who actually volitionally operates a photocopy machine to make copies for the customer. 

Regarding plaintiffs’ last claim, the court addressed the question whether Cablevision “transmit[s] . . . a performance . . . of the work . . . to the public”, as these terms are defined in 17 U.S.C. § 106(4).  In answering this question, the court found that the proper inquiry was the scope of the potential audience that was capable of receiving the particular transmission of a performance.  In doing so, the court rejected plaintiffs’ claims that the proper audience to be considered should include the potential audience of the underlying work, in this case plaintiffs’ content.  Applying this definition, the court found that the “performance” at issue was the transmission from the RS-DVR service and not plaintiffs’ original content.  Because the audience for this content was limited to the subscriber who made the work, there was no transmission “to the public.” 

Among other things, Cartoon Network v. CSC Holdings provides greater guidance into what constitutes direct copyright infringement in cyberspace as new methods of media delivery are developed, and how the law of copyright is adapting to meet these new technologies.  

 

Allen M. Lee  Mr. Lee’s practice focuses on business, corporate and intellectual property matters, including the creation, protection and exploitation of intellectual property assets.  He counsels clients on business formation, general corporate matters, trademark, copyright, trade secret, patent, licensing, internet and domain name issues, among other things.  For more information contact: Allen M. Lee, a Professional Law Corporation, Tel: (650) 254-0758, Fax: (650) 967-1851, Email: allen@allenmlee.com, Internet: www.allenmlee.com.

 

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When working with independent contractors, particularly when outsourcing software development, it's important to establish who owns what

by Allen M Lee16. December 2008 21:36

When working with independent contractors, particularly when outsourcing software development, it's important to establish who owns what. Otherwise, you could end up in a situation where you don't own the code you paid for.

Under the Copyright Act of 1976, the author of a work is the owner of the copyright unless the work is a work for hire. A work for hire is defined under 17 U.S.C. § 101 as (1) a work prepared by an employee within the scope of his or her employment, or (2) a work that is specially ordered or commissioned and falls into one of nine specifically-defined categories of works. These categories are as follows:  (i) Contribution to a collective work, (ii) Part of a motion picture or other audiovisual work, (iii) Translation, (iv) Supplementary work, (v) Compilation, (vi) Instructional text, (vii) Test, (viii) Answer material for a test, and (ix) Atlas.  Most importantly, the parties involved in the work-for-hire transaction must also expressly agree in a written instrument signed by both of them that the work shall be considered a work made for hire.

If you work with an independent contractor and not an employee, definition (1) above does not apply. 

If a work was not created as a result of a situation described in Definition (1) or (2), then it is not considered a work made for hire, and the person who does the hiring does not own the work. Instead, the work is owned by the person who created it. The only way that a hiring party can own the work in such a case is if the copyright in the work is transferred to that party by the owner.  Ideally, it is best to consult an attorney prior to retaining the independent contractor to ensure that, if needed, any proposed contract would transfer ownership of the copyright to the commissioning party.

If you've already gone through the process without fulfilling (1) or (2) above, there's still hope. If you contributed your labors to the code, a valid argument might be made that this is a joint work. A joint work is defined as one that is prepared by two or more authors with the intention by such authors that their contributions be merged into inseparable or interdependent parts of a unitary whole. 17 U.S.C. § 101. In a joint work, each contributor automatically acquires an undivided ownership in the entire work.

However, a person who merely describes to an author what the commissioned work should do or look like is not a joint author for purposes of the Copyright Act. To be an author one must supply more than mere direction or ideas: one must "translate an idea into a fixed, tangible expression entitled to copyright protection."  S.O.S., Inc. v. Payday, Inc., 886 F.2d1081, 1087, 12 U.S.P.Q.2d (BNA) 1241 (9th Cir. 1989).  See also Ashton-Tate Corp. v. Ross, 916 F.2d 516, 16 U.S.P.Q.2d (BNA) 1541 (9th Cir. 1990), where the court held that a person who merely gives a programmer a list of computer interface commands that he wants included in the program being written is not a joint owner in the copyright of the work. To become a joint owner of a copyright, one's contribution to the work must itself be copyrightable.

As they say, an ounce of prevention is worth a pound of cure.  In protecting your intellectual property, there are a number of important questions like the above to ask yourself.  If you know the answers, you will be better prepared in case there's a conflict between you and the people you work with. 

Allen M. Lee  Mr. Lee’s practice focuses on business, corporate and intellectual property matters, including the creation, protection and exploitation of intellectual property assets.  He counsels clients on business formation, general corporate matters, trademark, copyright, trade secret, patent, licensing, internet and domain name issues, among other things.  For more information contact: Allen M. Lee, a Professional Law Corporation, Tel: (650) 254-0758, Fax: (650) 967-1851, Email: allen@allenmlee.com, Internet: www.allenmlee.com.

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