5th Circuit decision on "innocent infringer" damages reduction defense in copyright case

The 5th Circuit recently whacked a defendant found liable for copyright infringement by downloading, and possibly sharing, 37 of the plaintiff’s copyrighted songs through a peer-to-peer file-sharing network. Maverick Recording Co. v. Harper, No. 08-51194 (5th Cir. Feb. 25, 2010).

The district court had entered summary judgment of infringement. The plaintiff requested minimum statutory damages of $750 per song under 17 USC § 504(c)(1), but the defendant argued that she was an innocent infringer and therefore should be liable only for the 17 USC § 504(c)(2) reduced amount of $200 per song. The district court found that the defendant’s testimony—that she was too young to understand that such free downloading and sharing constituted copyright infringement—created a trial issue.

The copyright owner accepted the $200 per song judgment, but reserved the right to appeal the innocent infringer issue if the infringer appealed. The infringer appealed.

Bad idea.

The Fifth Circuit affirmed the infringement finding and threw out the infringer’s weak due process argument (to paraphrase the defense: “$200 per song is unconstitutional given that I was young and naive”). The Fifth Circuit then found that the infringer’s "young and ignorant of the law" argument immaterial to the “innocent infringement” defense as well because the copyright owner put copyright notices on its “phonorecords” (e.g., CDs). Even though there was no evidence that the file-downloading infringer ever saw a CD, 17 USC § 402(d) prohibits the “innocent infringement” reduction where the infringer had “access” to the “phonorecord,” a point that the infringer failed to contest. Having stripped away the innocent infringer reduction, the Fifth Circuit remanded for entry of judgment for the amount the copyright owner originally requested: $750 per song.

5th Circuit decision on the requirement that copyright transfers be in writing

In its recent decision in Lyrick Studios, Inc. v. Big Idea Productions, Inc., No. 03-10837 (Aug. 5, 2005), the 5th Circuit addressed the requirement in section 204(a) of the Copyright Act that copyright transfers be in writing. The general fact pattern is probably pretty common: the copyrighted matter was commercially successful, and the parties acted for a while like there was an agreement, but then the relationship soured and the original creator decided to do business with someone else. So the jilted business partner tries to cobble together a bunch of things that aren't agreements on their own, but, the argument goes, together -- voila! -- they constitute a "writing."

Well, no dice, said the 5th Circuit. The Court not only examined the documents in detail, but it also examined several other other cases involving disputes about whether a sufficient writing existed. So this case is one to keep in mind if you're facing this sort of question.

There's some other interesting stuff in the opinion about what happens to preliminary injunction bonds when the winner of the case keeps changing. (The copyright owner won a preliminary injunction, posted a bond, lost at trial, lost the bond, then won on appeal and wanted the money back.)

5th Circuit decision on copyrightability of garment designs

In Galiano v. Harrah's Operating Co., Inc., No. 04-30521, -30806 (5th Cir. July 8, 2005), the 5th Circuit addressed the copyrightability of clothing designs.

The case involved uniforms for casino employees. The plaintiff, an independent clothing designer, designed them for Harrah's, and Harrah's began ordering the plaintiff-designed uniforms from third-party clothing suppliers, since the plaintiff didn't have the capacity to manufacture the uniforms. After the contract between the plaintiff and Harrah's ended, Harrah's kept ordering plaintiff-designed uniforms from the suppliers. The designer somehow felt aggrieved by this--the opinion doesn't explain exactly why--and so she sued, "weaving" her law "suit" out of the "fabric" of copyright law.

All agreed that the uniform designs were very creative, but the district court nevertheless found the copyright claim "torn": it held that the designs were not entitled to copyright protection because the uniforms' artistic elements weren't conceptually separable from their utilitarian aspects. "Dressing up" the issue in this fashion, the district court held that the definition of "pictorial, graphic, or sculptural works" (17 USC § 101) didn't "fit". Under this definition, copyright protection "vests" in useful articles only if the design of them "incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article."

There are many variants of the "conceptual separability test" out there, including the 7th Circuit's recent and lengthy decision in Pivot Point International, Inc. v. Charlene Products, Inc., 372 F.3d 913 (7th Cir. 2004), but the 5th Circuit said none of these "one-size-fits-all" tests really "suited" the case, and so "skirted" around the question of whether to adopt a general test. Instead, it decided to "fashion" a rule specifically for, and explicitly limited to, garment design cases only: the likelihood-of-marketability test.

Under the new likelihood of marketability test, a garment design is entitled to copyright protection upon a showing that it has "actual or potential market value as a stand-alone piece of artwork," (Slip Op. at 10), i.e., "the capacity of the item to moonlight as a piece of marketable artwork." (Id.) Because the plaintiff had made no showing under this newly-adopted test--but who knows what was in her "briefs"--the case against her was all but "sewn up": the 5th Circuit affirmed summary judgment in Harrah's favor.

5th Circuit copyright decision involving the registration requirement and "probative similarity"

The 5th Circuit recently handed down a lengthy decision that addresses several basic copyright issues. Positive Black Talk Inc. v. Cash Money Records Inc., No. 03-30625, concerned a dispute between two New Orleans based rappers, each of whom recorded a piece called "Back that A** Up" (which the court dryly described as a "poetic phrase"). Here are some highlights:

First, there was a jurisdictional issue. The plaintiff filed suit the same day it mailed the application to register the copyright to the Copyright Office. Four days later, the Copyright Office received it. The case then went all the way through a jury trial. Although the 5th Circuit has previously held that a valid copyright registration is a jurisdictional prerequisite to a copyright suit, it has also interpreted this to require only that the Copyright Office receive the application, deposit, and fee before the plaintiff files suit. Here, it was even more lenient, holding that, although there was no subject matter jurisdiction when the suit was filed, the jurisdictional defect was cured when the Copyright Office received the application materials. The court relied on Supreme Court cases under other jurisdictional rules that permit courts to overlook "procedural-jurisdictional" defects that were cured before final judgment based on "considerations of finality, efficiency, and economy." (p.12).

On to the merits. The court's holding require some background. Copyright infringement requires (1) ownership of a valid copyright and (2) copying of protected elements of the plaintiff's work. The "copying" element is proven by (a) factual copying and (b) substantial similarity. Because copying's hard to prove, it can be inferred from (i) proof of access and (ii) "probative similarity."

The court first held that the "probative similarity" element doesn't require the "whole of the defendant's work [to] replicate[] the whole of the allegedly copied work." Instead, "the jury must consider the whole of the first work (including both copyrightable and non-copyrightable parts) and the whole of the second work and then compare the two works, looking for any similarities between their constituent parts." (p.17)

The court went on to say that, "In order to avoid confusion, a district court should explain that the purpose of the probative similarity inquiry is to determine whether factual copying may be inferred and that this inquiry is not the same as the question of substantial similarity, which dictates whether the factual copying, once established, is legally actionable." (p.18.) A "jury may find that two works are probatively similar if it finds any similarities between the two works (whether substantial or not) that, in the normal course of events, would not be expected to arise independently in the two works and that therefore might suggest that the defendant copied part of the plaintiff's work." (p.19)

Once copying is found, the court noted that the "substantial similarity" element must take into account "must take into account the qualitative importance of the copied material to the plaintiff's work" -- NOT whether it constitutes a substantial portion of defendant's work. (p.26 n.12). Further, the substantial similarity must focus on a comparison of the two parts of the works that are similar, not the works as a whole. (pp. 25-28.)

The court also held that newspaper articles that contained statements that the district court did not err in excluding newspaper articles that stated that the two songs were quite similar. The court said that "the question of substantial similarity is typically left to the fact finders' own impressions. Thus, a court could reasonably conclude that the views of persons not on the jury and not qualified to give an expert opinion on substantial similarity should not be admitted." (p.37.)

These look to be the major points, though court discussed a host of other topics too.