COPYRIGHTS: Hosts of the Content of Others That Infringe Copyrights Have Reduced Liability
Last month the U.S. Supreme Court decided that Cox Communications was not liable to Sony for “contributory” copyright infringement based on Cox’s customers’ music piracy, even though Cox knew that the infringement was happening. The court said that an internet service provider “is contributorily liable for a user’s infringement only if it intended that the provided service be used for infringement.” What is required to prove that the service is intended to be used for infringement? The court explained that the requisite intent exists “only if the party induced the infringement or [if] the provided service is tailored to that infringement.”
The court pointed out that Cox “neither induced its users’ infringement nor provided a service tailored to infringement.” Sony had no “evidence of … marketing … to promote” infringement – and there was considerable evidence that “Cox repeatedly discouraged infringement.” As for tailoring its service to infringement, “Cox simply provided Internet access, which is used for many purposes other than copyright infringement.” The court emphasized that “mere knowledge that a service will be used to infringe is insufficient to establish the required intent to infringe” – as a matter of “contributory” copyright infringement.
Before ISPs or website operators celebrate, however, consider the issue that was not before the court. The other type of secondary copyright liability is “vicarious” liability. This was not before the court because the original jury in the case thought that Cox had committed only contributory liability. Vicarious liability for copyright infringement occurs when a party has the right and ability to control infringing activity and derives a direct financial benefit from it (even if it was unaware of the infringement). So if Cox had been charging its customers based on the number of music downloads, we can bet that Cox would have been liable for vicarious copyright infringement. Lastly, we must note that this case only decided an issue of US copyright law, which is not identical to other countries’ copyright laws.
COPYRIGHTS: AI Is Nothing More Than the Modern Version of a Paintbrush, Except That You Have to Prove That You’re More Creative than the Brush
Two months ago the U.S. Supreme Court left in place a previous ruling that copyright protection extends only to human authorship. Stephen Thaler is a computer scientist who developed the “Creativity Machine,” which he described as an artificial intelligence system capable of autonomously generating creative works. Thaler submitted an application to the U.S. Copyright Office to register copyright in the artwork titled “A Recent Entrance to Paradise,” and specifically identified the AI system as the author. The Copyright Office, plus two levels of federal courts, explained that U.S. copyright law “protects only works of human creation,” and the Copyright Act “requires all eligible work to be authored in the first instance by a human being.” To some of us, this legal outcome was not surprising. A paintbrush may be essential to the creation of some visual artwork, but no one names the paintbrush as a co-author.
There is one important implication of this for legal planning, though. Traditionally, employees have signed agreements when they’re hired that assign to their employer basically all ownership of intellectual property that they create for the employer. Those agreements often just state that works protected by copyright “are owned” from inception by the company. Inventions protected by patent law, however, are subject to more elaborate requirements of documentation and cooperation. We now, however, see that a company’s ability to claim copyright protection in works where employees are using AI requires fairly detailed description of the person’s creative contribution to the work. Companies that want to be very rigorous about this will revise their IP ownership agreements with employees, at least on a going forward basis. Alternatively, though, since the company is legally entitled to ownership of the work, carefully instructing current employees under their current agreements about documenting their creative contributions to the works should produce the same legal result.
TRADEMARKS: Will Your Cease-and-Desist Letter Prompt a Preemptive Lawsuit Against You?
There is a “Book Society” in California that operates a bookstore and wine lounge in a retail location under that name, with memberships for those who want special perks that are offered. In Colorado there is an independent bookstore called the “Denver Book Society.” The Colorado company has sued the California company in federal court in Colorado. According to the complaint, California company sent a cease-and-desist notice in February to the Colorado company, with demands that the Denver store cease operations and remove signs, merchandise and social media handles.
There are various nuances to the case. The California company has a federal trademark application pending, and it claims that its wine lounge and membership perks are among its distinct features that can be protected by its “Book Society” brand. We might consider these issues some other day.
The current takeaway, however, is more broadly applicable under intellectual property laws – whether trademark, copyright, patents, or trade secret. The Book Society appears to operate from one location in California. Can it really be dragged into court in Colorado, assuming that it has no activities there? While the case is so new that the issue has not been decided by the judge, intellectual property lawyers have long advised clients to assume that the answer is “Yes,” which has been the outcome in other cases. The idea is that when you send any kind of cease-and-desist letter into a jurisdiction and make demands on a business that is located there, you have agreed that there is a controversy in that jurisdiction, and you should expect to have to litigate there.
