Fourth Estate Public Benefit v. Wall-Street com, LLC

“Registration” of a copyright is a precondition to filing suit for copyright infringement. 17 U.S.C. § 411(a). This appeal requires us to decide an issue that has divided the circuits: whether registration occurs when an owner files an application to register the copyright or when the Register of Copyrights registers the copyright. Compare Cosmetic Ideas, Inc. v. IAC/Interactivecorp, 606 F.3d 612, 619 (9th Cir. 2010) (concluding that registration occurs when the owner files an application), with La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1197 (10th Cir. 2005) (concluding that registration occurs when the Register approves an application), abrogated in part by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 157 (2010). Fourth Estate Public Benefit Corporation filed a suit for infringement against Wall-Street.com and Jerrold Burden. The complaint alleged that Fourth Estate had filed an application to register its allegedly infringed copyrights, but that the Copyright Office had not registered its claims. The district court dismissed the action because Fourth Estate failed to plead compliance with the registration requirement, 17 U.S.C. § 411(a). Because registration occurs when the Register of Copyrights “register[s] the claim,” id. § 410(a), we affirm.

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SoundExchange, Inc. v. Muzak LLC

This case pits SoundExchange, a nonprofit entity, charged with the responsibility of collecting royalties for performing artists and copyright owners of music, against Muzak, a company that supplies digital music channels to satellite television networks who, in turn, sell to subscribers. SoundExchange sued Muzak under the Copyright Act in district court, claiming that Muzak underpaid royalties owed. The district court dismissed SoundExchange’s complaint. (From the point of view of classic administrative law, the Register of Copyrights, to which we normally are obliged to defer, plays a rather unusual role.) Although the case is close – the controlling statute is dreadfully ambiguous – we conclude that SoundExchange has the better position, and therefore reverse the district court.

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Mavrix Photographs, LLC v. LiveJournal, Inc.

Digital Millennium Copyright Act

The panel (1) reversed the district court’s holding, on summary judgment, that the defendant was protected by the safe harbor of the Digital Millennium Copyright Act from liability for posting the plaintiff’s photographs online and (2) vacated a discovery order.

The panel held that the safe harbor set forth in 17 U.S.C. § 512(c) would apply if the photographs were posted at the direction of users. The defendant, a social media platform, posted the photographs after a team of volunteer moderators, led by an employee of the defendant, reviewed and approved them. The panel held that whether the photographs were posted at the direction of users depended on whether the acts of the moderators could be attributed to the defendant. Disagreeing with the district court, the panel held that the common law of agency applied to the defendant’s safe harbor defense. Because there were genuine factual disputes regarding whether the moderators were the defendant’s agents, the panel reversed the district court’s summary judgment and remanded the case for trial. The panel also discussed the remaining elements of the safe harbor affirmative defense. If an internet service provider shows that the infringing material was posted “at the direction of the user,” it must then also show that (1) it lacked actual or red flag knowledge of the infringing material; and (2) it did not financially benefit from infringements that it had the right and ability to control. The panel held that to fully assess actual knowledge, the fact finder must consider not only whether the copyright holder has given notice of the infringement, but also the service provider’s subjective knowledge of the infringing nature of the posts. The panel held that to determine whether the defendant had red flag knowledge, the fact finder would need to assess whether it would be objectively obvious to a reasonable person that material bearing a generic watermark or a watermark referring to the plaintiff’s website was infringing. When assessing the service provider’s right and ability to control the infringements, the fact finder should consider the service provider’s procedures that existed at the time of the infringements and whether the service provider had “something more” than the ability to remove or block access to posted materials.

Finally, the panel vacated the district court’s order denying discovery of the moderators’ identities.

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BWP Media USA, Inc. v. T & S Software Associates, Inc.

This appeal is about whether “volitional conduct” is required to establish a claim for direct copyright infringement. Defendant T&S Software Associates, an internet service provider, hosted an internet forum on which third-party users posted images that infringed copyrights owned by plaintiffs BWP Media USA and National Photo Group. The plaintiffs sued T&S for direct and secondary copyright infringement. The district court granted summary judgment in favor of T&S. The plaintiffs appeal the district court’s direct infringement holding. We AFFIRM.

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Fox Television Stations, Inc. v. Aereokiller LLC

Reversing the district court’s partial summary judgment in favor of defendants, the panel held that a service that captures copyrighted works broadcast over the air, and then retransmits them to paying subscribers over the Internet without the consent of the copyright holders, is not a “cable system” eligible for a compulsory license under the Copyright Act.

Under § 111 of the Act, a “cable system” is eligible for a so-called compulsory license that allows it to retransmit “a performance or display of a work” that had originally been broadcast by someone else—even if such material is copyrighted— without having to secure the consent of the copyright holder. So long as the cable system pays a statutory fee to the Copyright Office and complies with other regulations, it is protected from infringement liability.

The panel concluded that § 111 was ambiguous on the question presented. Deferring to the Copyright Office’s interpretation, the panel held that Internet-based retransmission services are not eligible for the compulsory license that § 111 makes available to “cable systems.”

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Star Athletica v. Varsity Brands

A feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work—either on its own or fixed in some other tangible medium of expression—if it were imagined separately from the useful article into which it is incorporated. That test is satisfied here. Pp. 3–17.

(a) Separability analysis is necessary in this case. Respondents claim that two-dimensional surface decorations are always separable, even without resorting to a §101 analysis, because they are “on a useful article” rather than “designs of a useful article.” But this argument is inconsistent with §101’s text. ”[P]ictorial” and “graphic” denote two-dimensional features such as pictures, paintings, or drawings. Thus, by providing protection for “pictorial, graphical, and sculptural works” incorporated into the “design of a useful article,” §101 necessarily contemplates that such a design can include two dimensional features. This Court will not adjudicate in the first instance the Government’s distinct argument against applying separability analysis, which was neither raised below nor advanced here by any party. Pp. 4–6.

(b) Whether a feature incorporated into a useful article “can be identified separately from,” and is “capable of existing independently of,” the article’s “utilitarian aspects” is a matter of “statutory interpretation.” Mazer v. Stein, 347 U. S. 201, 214. Pp. 6–10.

(1) Section 101’s separate-identification requirement is met if the decision maker is able to look at the useful article and spot some two or three-dimensional element that appears to have pictorial, graphic, or sculptural qualities. To satisfy the independent-existence requirement, the feature must be able to exist as its own pictorial, graphic, or sculptural work once it is imagined apart from the useful article. If the feature could not exist as a pictorial, graphic, or sculptural work on its own, it is simply one of the article’s utilitarian aspects. And to qualify as a pictorial, graphic, or sculptural work on its own, the feature cannot be a useful article or “[a]n article that is normally a part of a useful article,” §101. Neither could one claim a copyright in a useful article by creating a replica of it in another medium. Pp. 7–8.

(2) The statute as a whole confirms this interpretation. Section 101, which protects art first fixed in the medium of a useful article, is essentially the mirror image of §113(a), which protects art first fixed in a medium other than a useful article and subsequently applied to a useful article. Together, these provisions make clear that copyright protection extends to pictorial, graphic, and sculptural works regardless of whether they were created as freestanding art or as features of useful articles. P. 8.

(3) This interpretation is also consistent with the Copyright Act’s history. In Mazer, a case decided under the 1909 Copyright Act, the Court held that respondents owned a copyright in a statuette created for use as a lamp base. In so holding, the Court approved a Copyright Office regulation extending protection to works of art that might also serve a useful purpose and held that it was irrelevant to the copyright inquiry whether the statuette was initially created as a freestanding sculpture or as a lamp base. Soon after, the Copyright Office enacted a regulation implementing Mazer’s holding that anticipated the language of §101, thereby introducing the modern separability test to copyright law. Congress essentially lifted the language from those post-Mazer regulations and placed it in §101 of the 1976 Act. Pp. 8–10.

(c) Applying the proper test here, the surface decorations on the cheerleading uniforms are separable and therefore eligible for copyright protection. First, the decorations can be identified as features having pictorial, graphic, or sculptural qualities. Second, if those decorations were separated from the uniforms and applied in another medium, they would qualify as two-dimensional works of art under §101. Imaginatively removing the decorations from the uniforms and applying them in another medium also would not replicate the uniform itself.

The dissent argues that the decorations are ineligible for copyright protection because, when imaginatively extracted, they form a picture of a cheerleading uniform. Petitioner similarly claims that the decorations cannot be copyrighted because, even when extracted from the useful article, they retain the outline of a cheerleading uniform. But this is not a bar to copyright. Just as two-dimensional fine art correlates to the shape of the canvas on which it is painted, two dimensional applied art correlates to the contours of the article on which it is applied. The only feature of respondents’ cheerleading uniform eligible for a copyright is the two-dimensional applied art on the surface of the uniforms. Respondents may prohibit the reproduction only of the surface designs on a uniform or in any other medium of expression. Respondents have no right to prevent anyone from manufacturing a cheerleading uniform that is identical in shape, cut, or dimensions to the uniforms at issue here. Pp. 10–12.

(d) None of the objections raised by petitioner or the Government is meritorious. Pp. 12–17.

(1) Petitioner and the Government focus on the relative utility of the plain white uniform that would remain if the designs were physically removed from the uniform. But the separability inquiry focuses on the extracted feature and not on any aspects of the useful article remaining after the imaginary extraction. The statute does not require the imagined remainder to be a fully functioning useful article at all. Nor can an artistic feature that would be eligible for copyright protection on its own lose that protection simply because it was first created as a feature of the design of a useful article, even if it makes that article more useful. This has been the rule since Mazer, and it is consistent with the statute’s explicit protection of “applied art.” In rejecting petitioner’s view, the Court necessarily abandons the distinction between “physical” and “conceptual” separability adopted by some courts and commentators. Pp. 12–15.

(2) Petitioner also suggests incorporating two “objective” components into the test—one requiring consideration of evidence of the creator’s design methods, purposes, and reasons, and one looking to the feature’s marketability. The Court declines to incorporate these components because neither is grounded in the statute’s text. Pp. 15–16.

(3) Finally, petitioner claims that protecting surface decorations is inconsistent with Congress’ intent to entirely exclude industrial design from copyright. But Congress has given limited copyright protection to certain features of industrial design. Approaching the statute with presumptive hostility toward protection for industrial design would undermine that choice. In any event, the test adopted here does not render the underlying uniform eligible for copyright protection. Pp. 16–17.

799 F. 3d 468, affirmed.

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Geophysical Service v. TGS-Nopec Geophysical

Canada has a law that requires companies who gather seismic data about the Earth’s substructure to submit their findings to the Canadian government. After a period of confidentiality, the Canadian agency that compiles this data is then apparently permitted to release it to members of the public upon specific request. In this case, a Houston company requested seismic data from this Canadian agency pursuant to that law, and the Canadian agency sent copies of a particular Canadian company’s seismic data to the United States. The Canadian company then sued the Houston company, alleging copyright infringement.

We are called upon to determine whether the act of state doctrine forbids a United States court from considering the applicability of copyright’s first sale doctrine to foreign-made copies when the foreign copier was a government agency. We hold that it does not. We must also decide whether the inapplicability of the Copyright Act to extraterritorial conduct bars a contributory infringement claim based on the domestic authorization of entirely extraterritorial conduct. We hold that it does. Accordingly, we affirm in part, reverse in part, vacate in part, and remand.

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Flo & Eddie v. Sirius XM Radio

Defendant-Appellant Sirius XM Radio, Inc., appeals from the November 14, 2014 and December 12, 2014 orders of the United States District Court for the Southern District of New York (McMahon, J.) denying its motions, respectively, for summary judgment and for reconsideration in connection with Plaintiff-Appellee Flo & Eddie, Inc.’s copyright infringement suit. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5784 (CM), 2014 WL 7178134 (S.D.N.Y. Dec. 12, 2014) (denial of motion for reconsideration); Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F. Supp. 3d 325 (S.D.N.Y. 2014) (denial of motion for summary judgment). We previously concluded that the appeal raised a significant and unresolved issue of New York law that is determinative of this appeal: Is there a right of public performance for creators of pre-1972 sound recordings under New York law and, if so, what is the nature and scope of that right?

We certified this question to the New York Court of Appeals. Flo & Eddie, Inc. v.Sirius XM Radio, Inc., 821 F.3d 265 (2d Cir. 2016). The Court of Appeals accepted certification and responded that New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 2016 WL 7349183 (N.Y. Dec. 20, 2016).

In light of this ruling, we REVERSE the district court’s denial of Appellant’s motion for summary judgment and REMAND with instructions to grant Appellant’s motion for summary judgment and to dismiss the case with prejudice.

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Design Data Corp. v. Unigate Enterprise

The panel affirmed in part and reversed in part the district court’s summary judgment in favor of the defendants in an action under the Copyright Act.

Design Data Corporation alleged that Unigate Enterprise, Inc., infringed the copyright on Design Data’s computer aided design program by downloading an unauthorized copy of the program and importing and distributing within the United States program output generated by a Chinese contractor using an unauthorized copy of the program. The panel reversed the district court’s summary judgment on the downloading claim. The panel held that there was a material question of fact whether Unigate’s download was more than an insignificant violation of Design Data’s copyright.#

The panel affirmed the district court’s summary judgment on the importation-and-distribution claim. The panel held that the copyright in the program did not extend to the program’s output of images and files. The panel also affirmed the district court’s decision to refuse Design Data a further opportunity to amend its complaint.

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Perfect 10, Inc. v. Giganews, Inc.

The panel affirmed the district court’s judgment in favor of the defendants in a copyright case involving the Usenet, an international collection of organizations and individuals whose computers connect to one another and exchange messages posted by Usenet users.

Defendant Giganews, Inc., owns and operates several Usenet servers and provides its subscribers with fee-based access to content stored on its own servers as well as content stored on the servers of other Usenet providers. Defendant Livewire Services, Inc., provides its subscribers with access to the Usenet content stored on Giganews’s servers. Plaintiff Perfect 10, Inc., owns the exclusive copyrights to tens of thousands of adult images, many of which have been illegally distributed over Giganews’s servers.######### The panel affirmed the district court’s partial dismissal and partial grant of summary judgment on Perfect 10’s direct copyright infringement claim. The panel held that causation, also referred to as “volitional conduct,” by the defendant is one of the elements of a prima facie case of direct infringement. The panel held that the volitional conduct requirement was not met on Perfect 10’s theories that the defendants directly infringed its display rights and distribution rights. The panel concluded that the evidence showed only that Giganews’s actions were akin to passively storing material at the direction of users in order to make that material available to other users upon request, or automatically copying, storing, and transmitting materials upon instigation by others. The volitional conduct requirement also was not met as to the claim that Giganews directly infringed on Perfect 10’s right to reproduce by uploading infringing content onto the Usenet or Giganews’s servers.

The panel held that Giganews was not liable for contributorycopyright infringement because Perfect 10 failed to raise a triable issue of fact as to whether Giganews materially contributed to or induced infringement of Perfect 10’s copyrights. The panel held that there were no simple measures available that Giganews failed to take to remove Perfect 10’s works from its servers. The panel affirmed the district court’s summary judgment on Perfect 10’s vicarious infringement claim. The panel held that Perfect 10 failed to demonstrate a causal link between the infringing activities and a financial benefit to Giganews. The panel affirmed the district court’s award of attorney’s fees to the defendants under the Copyright Act and its denial of defendants’ request for supplemental fees. The panel also affirmed the district court’s denial of defendants’ request to amend the judgment to add a judgment debtor as Perfect 10’s alter ego.

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