Cyberlaw Cases

The Library Alliance has posted an infographic trying to explain all the possible outcomes of the GBS lawsuit. I’m not sure they’ve got them all down correctly, but it’s an interesting way to represent the situation. At the very least, it shows that the battle over the Settlement is far from over.

Judge Chin has released an order for the list of speakers at the Google Book Search settlement fairness hearing, scheduled for Feb. 18.

Speaking in Opposition:

1. Sarah Canzoneri, a member of the Children’s Book Guild
2. Scott E. Gant (author and class action specialist)
3. Microsoft
   
4. Amazon.com
5. Science Fiction & Fantasy Writers of America and the American Society of Journalists and Authors
6. Professor Pamela Samuelson, UC Berkeley
7. Cindy Cohn (EFF), on behalf of the Privacy Authors and Publishers
8. Yasuhiro Saito, on behalf of the Japanese P.E.N. Club et al.
9. The French Republic
10. The Federal Republic of Germany
11. The State of Connecticut
12. Questia Media
13. AT&T
14. Cynthia Arato, on behalf of the New Zealand Society of Authors
15. Consumer Watchdog
16. EPIC
17. Open Book Alliance
18. Andrew Devore, on behalf of Arlo Guthrie, Julia Wright, Catherine Ryan Hide, and Eugene Linden
19. Matthew Weiss, on behalf of Darlene Marshall
20. VG WORT

Speaking in Favor:

1. The Institute of Intellectual Property & Social Justice, Howard University School of Law
2. Sony Electronics
3. National Federation of the Blind
4. Paul N. Courant, University of Michigan Library
5. Center for Democracy & Technology

Each of the above parties will have only five minutes to make its case. After that, the DOJ speaks, then the parties. Should be quite a hearing!

Earlier this week, Judge Gertner entered judgment to the tune of $675,000 in Sony BMG v. Tenenbaum. Nothing particularly surprising there. This was the number arrived at by the jury, based on a statutory damages calculation of $22,500 per infringed work.

The court also issued an injunction barring Joel Tenenbaum from infringing plaintiffs’ work in the future, and requiring him to destroy all infringing copies of plaintiffs’ works. Again, all pretty standard fare.  But a couple issues of note crop up in the court’s memorandum on the issue of injunctive relief. First, the court rightly refused the record labels’ effort to enjoin Tenenbaum from “promot[ing] … using the Internet or any online media distribution system to infringe copyrights,” recognizing the First Amendment implications of such an ambiguous prior restraint.

More troubling is the court’s treatment of the standard for injunctive relief. A permanent injunction requires a showing that the harm at issue is irreparable and that monetary damages are inadequate. If you are not a copyright litigator, you might wonder how plaintiffs who are to receive $675,000 in damages for sharing 30 songs could argue with a straight face that they have suffered irreparable harm for which money alone cannot possibly compensate.
Continue Reading »

As reported on Google’s Public Policy Blog and in the New York Times, the Authors Guild, the AAP members, and Google have announced their amended settlement in the Book Search case.

The amended settlement attempts to address a number of the objections raised regarding antitrust issues, international copyright ownership, pricing, and access to out-of-print and/or orphaned works. It also has provisions for Open Access options for rightsholders, such as the option to put a Creative Commons license on your work. There do not seem to be any amendments to address reader privacy concerns, at least not directly.

No dates for filing objections or a fairness hearing have been set, but the parties have requested the following:

• December 14 – Supplemental Notice commences.
• January 28 – Class member Opt outs are due.
• February 4 – DOJ comment on settlement is due.
• February 11 – Plaintiffs’ motion for final settlement approval is due.
• February 18 – Final fairness hearing occurs.

Update: Judge Chin has granted preliminary approval to the amended settlement and agreed to hold the fairness hearing on February 18, 2010.

As has been reported in the press, Judge Chin held a short hearing today on the GBS Settlement and gave the parties until November 9, 2009 to submit an amended settlement agreement to address the concerns raised. There are no official dates for responses to be filed, but there was some indication that the Court would hold a new fairness hearing in December or early January 2010.

Case and Court:

• Vernor v. Autodesk, Inc. (W.D. Wash.).

In this blog’s previous coverage of the “Copy Ownership Cases,” I attempted to briefly summarize three important cases where ownership of copies is critical and so did not delve into a detail relevant to this update.

The decision in Vernor v. Autodesk from May of 2008 was a decision on Autodesk’s motion to dismiss the case. Motions to dismiss are among the first motions one might file in a federal case and occur prior to the exchange of documents or the deposition of witnesses that occurs during the discovery process. Typically once that discovery process is complete, the parties may bring motions for summary judgment in which a party will argue that, based on the undisputed facts, and resolving any disputed fact in favor of the other party, the court can simply apply the law to those facts and rule in their favor. In a grand demonstration of the ability of opposing lawyers to take on diametrically opposed world views, parties often both file such summary judgment motions, which are called “cross-motions” for summary judgment.

Such cross-motions for summary judgment were filed in Vernor v. Autodesk and the court held oral argument on the motions on Tuesday, Sep. 29, 2009. A few news outlets covered the oral argument: PC World, Zeropaid, Slashdot.

With somewhat dizzying speed, the court issued its opinion on the cross-motions for summary judgment the next day, Sep. 30, 2009. Having seventeen months to consider any new developments, the court was obviously not persuaded that anything important had changed as it reached the same conclusions for the same reasons, and directed the clerk to enter final judgment for Vernor.

The court’s opinion is, like its earlier opinion, careful, methodical, well-researched, and thorough. So many courts addressing the issue of copy ownership have dispensed with the question just by noting that software distributors claim to merely “license” and not to sell their software. The Vernor court finally cuts through this misleading way of framing the question by noting that “the use of software copies can be licensed while the copies themselves are sold.”

The court explains again why the Ninth Circuit precedent that it is bound to follow, United States v. Wise, requires the result that Vernor is the owner of the copies of the software. “Wise requires the court to look at a transaction holistically, and the court finds no basis for the conclusion that an agreement to permit perpetual possession of property can be construed as reserving ownership.” This is the key factor in copy ownership cases: perpetual possession. When a transaction results in an individual being entitled to perpetual possession of the copy, as was the case for Vernor, then courts should find that such individuals are owners of their copies, entitled to a “first sale” right to resell the copy if they so choose.

Autodesk now has to decide whether to appeal this ruling and has to do so without the benefit of Ninth Circuit guidance in UMG Recordings, Inc, v. Augusto, which has all the briefs filed but has not yet had oral argument and MDY Industries LLC v. Blizzard Entertainment, Inc., in which the briefing on appeal is still ongoing. Decisions in either of these cases could greatly clarify how things will go for Vernor and Autodesk, but the Ninth Circuit’s decisions in these cases are likely over a year away. However, the Vernor court has now, twice, provided a valuable roadmap for future courts that address the issue of copy ownership.

See Also:

• Thom Holwerda, Judge Sides with Vernor, Slams Autodesk, OS News (Oct. 1, 2009).
• Nancy Gohring, In Autodesk Case, Judge Rules Secondhand Sales OK, PC World (Oct. 1, 2009).

This just in: The GBS plaintiffs have filed a motion to adjourn the fairness hearing so they can negotiate with Google and the DOJ (and perhaps others as well) in light of the concerns expressed in the filings so far. They have asked for a status conference with the judge on November 6, 2009 to provide an update at that time. Google has not opposed the motion.

Update: The motion has been granted.

The U.S. Department of Justice has filed a statement of interest in the Google Book Settlement case. As James Grimmelmann notes, it addresses mainly two issues: (1) competition and (2) the adequacy of the class representatives.

It is worth noting that the DOJ brief clearly recognizes the difficulty that the orphan works problem presents to both sides of the equation. On the one hand, the Settlement provides access to many out-of-print works that may, in fact, be orphaned and thus essentially impossible to license without some kind of massive settlement or legislative efforts. This weighs heavily in favor of approval and the pro-access benefits that would flow from it. On the other hand, it is exactly this inaccessibility that raises the class representative concern. How can a group of plaintiffs and their lawyers represent people who are impossible to find? This raises notice concerns and potential objections to approval.

In light of this and other concerns, the DOJ proposes something of a wait-and-see approach to the Settlement. Wait and see what the parties say in response to these concerns and then if they do not go far enough, reject the Settlement and force them to modify it.

For those of you following the Google Book Search Settlement case (currently #1 on our list), September 8 was the deadline for filing objections and amici. (The original date was Sept. 4 but due to maintenance on the Court’s Electronic Filing System, it was extended to Tuesday morning). The “fairness” hearing where Judge Chin will consider the fairness, adequacy, and reasonableness of the settlement is still scheduled for October 7, 2009.

There were many filings, most of them well-chronicled here and  here on Prof. James Grimmelmann’s blog. Of particular note for their entry into the debate are:

1) Several groups of European publishers who have now explicitly raised concerns about the impact of the Settlement on the Berne Convention and other international treaty obligations; and

2) Several state Attorneys General who are concerned about the legality of the Book Rights Registry administering any unclaimed funds under the states’ non-profit and charity laws.

It is also worth noting that there have been numerous amici filings in support of the Settlement, most emphasizing the profound benefits it offers in terms of increased access to information and knowledge, especially for historically disadvantaged groups and those with disabilities.

Finally, I should note that I am counsel on the brief for the Privacy Authors and Publishers (including EFF and the ACLU) and thus, this blog post (and the original in the top 10 list) are my own opinions and should not be construed as those of any of my clients in this matter.

Cases and Court:

• The Authors Guild v. Google, Inc. (S.D.N.Y.).
• The McGraw-Hill Companies, Inc. v. Google, Inc. (S.D.N.Y.).

Background:

Since 2005, Google has digitally scanned over 10,000,000 books from various libraries, indexed them in its search database, and for those books under copyright and not part of its Partner Program, displaying so-called “snippets” of their content – up to three portions each no more than 8-12 lines in length – without permission from the copyright owners. As a result, a group of authors and publishers filed suit, now as a class action, for copyright infringement. Google has responded with several defenses, including the assertion that everything it is doing is a fair use under Section 107 of the Copyright Act.

Last October, the parties announced a proposed settlement of the case. The settlement agreement is over 300 pages and quite complex. It has many supporters as well as critics. Objections to the settlement can be filed up until September 4, 2009. On October 7, 2009, Judge Denny Chin will hold a hearing on whether the proposed settlement is “fair, reasonable, and adequate” to the class members. Continue Reading »

Cases and Courts:

• UMG Recordings, Inc. v. Augusto (C.D. Cal.), appealed to (9th Cir.).
• MDY Indus. LLC v. Blizzard Entm’t, Inc. (D. Ariz.), appealed to (9th Cir.).
• Vernor v. Autodesk, Inc. (W.D. Wash.).

Background

The so-called “license versus sale” distinction that arises with respect to copies of software or music will confront the Ninth Circuit in three upcoming cases. In UMG Recordings, Inc. v. Augusto,¹ the district court found that, notwithstanding “not for resale” labels, the initial recipients of “promo CDs” owned them and were thus entitled to sell the CDs to others.

In MDY Indus. LLC v. Blizzard Entm’t, Inc.,² the district court held that purchasers of Blizzard’s World of Warcraft software are not owners of their copies of the software, and hence are not entitled to a Section 117 defense that would allow the owner of a copy of a computer program to make a copy of the program, provided such copy is created as an essential step in the utilization of the program.

Finally, in Vernor v. Autodesk, Inc.,³ the district court found that the transfer of Autodesk’s AutoCAD software to a third-party was a sale, and that Vernor, having acquired AutoCAD from the third-party, could invoke the first sale doctrine in order to resell his copies of AutoCAD on eBay without liability for direct or indirect copyright infringement.

These cases present the Ninth Circuit with multiple opportunities to revisit its decisions in the license versus sale context. The Vernor court wrote that these precedents are in irreconcilable conflict, which it could only resolve by following the earliest precedent. Continue Reading »

1. UMG Recordings, Inc. v. Augusto, 558 F. Supp. 2d 1055 (C.D. Cal. 2008). [↩]
2. MDY Indus. LLC v. Blizzard Entm’t, Inc., 89 U.S.P.Q.2d 1015 (D. Ariz. 2008). [↩]
3. Vernor v. Autodesk, Inc., 555 F. Supp. 2d 1164 (W.D. Wash. 2008). [↩]