Overall, the decision is not too surprising. Class action law gives judges like Chin quite a bit of discretion in approving or rejecting settlements in terms of whether or not they are considered “fair, adequate, and reasonable.” That’s a lot of wiggle room, especially for uncharted waters such as the GBS case. With over 500 submissions, Chin had quite a bit to consider.

In summary, Chin rejected the proposed settlement for five key reasons: (1) It overreached in trying to license orphan and international works; (2) it tried to settle legal issues that were not part of the original lawsuit (e.g. full display of books online); (3) Congress is better suited to craft the right legal rules for the future of online books than a class-action lawsuit; (4) there was significant diversity of opinion among the class of plaintiffs as to the right outcome of the case; and (5) it raised anti-trust concerns, especially regarding metadata markets such as search results related to the Google Book corpus. Chin suggests at the end of the order that changing the prospective relief licensing scheme from “opt-out” to “opt-in” might mitigate these concerns and lead to approval down the road.

The following were passages I found most interesting in the order:

• “The questions of who should be entrusted with guardianship over orphan books, under what terms, and with what safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties. Indeed, the Supreme Court has held that “it is generally for Congress, not the courts, to decide how best to pursue the Copyright Clause’s objectives.”
• Second, the ASA would release claims well beyond those contemplated by the pleadings. This case was brought to challenge Google’s use of “snippets,” as plaintiffs alleged that Google’s scanning of books and display of snippets for online searching constituted copyright infringement. Google defended by arguing that it was permitted by the fair use doctrine to make available small portions of such works in response to search requests. There was no allegation that Google was making full books available online, and the case was not about full access to copyrighted works. The case was about the use of an indexing and searching tool, not the sale of complete copyrighted works.”
• “While the named plaintiffs and Google would argue that these authors can simply opt out, the comments underscore certain points. First, many authors of unclaimed works undoubtedly share similar concerns. Second, it is incongruous with the purpose of the copyright laws to place the onus on copyright owners to come forward to protect their rights when Google copied their works without first seeking their permission. Third, there are likely to be many authors — including those whose works will not be scanned by Google until some years in the future — who will simply not know to come forward.”
• “The ASA would arguably give Google control over the search market.”
• “The ASA would broadly bar ‘direct, for profit, commercial use of information extracted from Books in the Research Corpus’ except with the express permission of the Registry and Google.”
• “Google’s ability to deny competitors the ability to search orphan books would further entrench Google’s market power in the online search market.”
• “The privacy concerns are real. Yet, I do not believe that they are a basis in themselves to reject the proposedsettlement.” … “I would think that certain additional privacy protections could be incorporated, while still accommodating Google’s marketing efforts.”
• “The fact that other nations object to the ASA, contending that it would violate international principles and treaties, is yet another reason why the matter is best left to Congress.”
• “As the United States and other objectors have noted, many of the concerns raised in the objections would be ameliorated if the ASA were converted from an opt-out settlement to an opt-in settlement. I urge the parties to consider revising the ASA accordingly.”

MDY Indus. LLC v. Blizzard Entm’t, Inc., Nos. 09-15932, 09-16044 (9th Cir. Dec. 14, 2010).

Today the Ninth Circuit gave a mixed result to both parties. We have previously discussed this case as part of the three copy ownership cases before the Ninth Circuit.

Overview:

• MDY is not liable for secondary copyright infringement because Blizzard’s “no-bots” provision was merely a contractual “covenant” and not a condition whose violation would amount to copyright infringement. To be such a condition it must be a “restriction[] that [is] grounded in [a copyright holder's] exclusive rights of copyright.”
• Following Vernor, users of World of Warcraft are not owners of their copies of the software (madness!) and therefore are not entitled to a Section 117 defense.
• The Ninth Circuit really, really, really hates the Federal Circuit’s Chamberlain decision and explicitly rejects the idea that there should be a nexus with infringement before a violation is found of the anti-circumvention provision regarding access controls in 1201(a)(1).
• A tortious interference with contract claim under Arizona law is not preempted by the Copyright Act.

Upshot:

• The court is grasping towards the right sort of resolution to the condition/covenant distinction, but doesn’t really give us enough to sort out tough cases.
• The holding on copy ownership turns out to be entirely unnecessary since the secondary copyright liability was resolved based on the condition/covenant distinction instead.
• Your garage door openers may start coming with lengthy EULAs in the Ninth Circuit and it just might end up being a DMCA violation to buy a replacement opener made by a third party. (More madness.) Some of the sanity that Chamberlain brought to DMCA jurisprudence slipped away today.

See also:

• Corynne McSherry, A Mixed Ninth Circuit Ruling in MDY v. Blizzard: WoW Buyers Are Not Owners – But Glider Users Are Not Copyright Infringers, EFF DeepLinks (Dec. 14, 2010).

United States v. ASCAP, No. 09-0539 (2d Cir. Sep. 28, 2010).

The Second Circuit Court of Appeals today affirmed the district court’s decision that a download of a digital file containing a musical work is not a “public performance” of that musical work. This is a win for Yahoo! Inc. and RealNetworks, Inc. who persuaded the court that since file downloads were not contemporaneously audibly perceptible, they were not public performances as defined in the Copyright Act.

The Court adopts and defends its interpretation of public performance from Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), which required a performance to be created by the act of transmission, not simply a transmitting of a recording of a performance.

See also

• Mike Masnick, Appeals Court Tells ASCAP: A Download Is Not A Performance, TechDirt (Sep. 28, 2010).
• Mark Hefflinger, Appeals Court: Music Downloads Not ‘Public Performances’, Digital Media Wire (Sep. 28, 2010).

Travis Kaya, Academic Libraries Add Netflix Subscriptions, Chron. of Higher Ed. (Sep. 18, 2010).

The article touches on the conflict between a professor’s fair use argument for classroom use of the rented DVDs (or use of the streaming service via the library’s subscription) and the college libraries’ potential violation of Netflix’s terms of use.

I don’t know Netflix’s arrangements with copyright owners, but as to streaming, I presume they pay per stream, so the copyright owner isn’t clearly harmed if faculty use the streaming service. Instead, copyright owners are compensated.

As to the tangible DVDs, to the extent this means fewer libraries purchase the DVDs themselves, that’s a potential revenue loss for the copyright owners, but it’s not as if Netflix isn’t paying for its copies of the DVDs. So, if more libraries take this approach, Netflix will have to keep more copies of each DVD on hand, resulting in at least some (but perhaps fewer) sales of the DVDs. Whereas before there was an inefficiency of distribution at work where libraries kept on hand copies of discs they weren’t using or used infrequently, they’ve now found a distributor in Netflix who can get the disc to them quickly enough that it’s more efficient to have this subscription rather than their own under-utilized storehouse of discs.

Regardless of whether copyright owners through copyright or Netflix through contract can prevent this activity by libraries, should they be able to? Are copyright owners entitled to an inefficient distribution market?

See also:

• Mark Giagrande, In The News, Law Librarian Blog (Sep. 20, 2010).
• Rebecca Fitzgerald, Using Netflix at an Academic Library – a TTW Guest Post, Tame the Web (Sep. 9, 2010).

Recognizing that lawsuits can bring more unwanted attention, one organization has taken a different tack. The group Medical Justice, which helps protect doctors from meritless malpractice suits, advises its members to have patients sign an agreement that gives the doctor copyright over a Web posting if the patient mentions the doctor or practice.

Dr. Jeffrey Segal, chief executive of Medical Justice, said about half of the group’s 2,500 members use the agreement.

“I, like everyone else, like to hear two sides of the story,” he said. “The problem is that physicians are foreclosed from ever responding because of state and federal privacy laws. In the rare circumstance that a posting is false, fictional or fraudulent, the doctor now has the tool to get that post taken down.”

This so-called “agreement” strikes me as both legally and ethically suspect. Not only does copyright law generally require written assignments of copyright to be for some kind of payment (what is the payment here? The medical treatment? I thought that was what health insurance and co-pays were for?) but unless it is a work-for hire or some other kind of ongoing employment relationship, you generally can’t force people to assign their copyright in a web posting before it is written.

Moreover, such an agreement seems unethical under the American Medical Association Ethics Code. AMA Ethics Opinion 8.03 states:

Under no circumstances may physicians place their own financial interests above the welfare of their patients. The primary objective of the medical profession is to render service to humanity; reward or financial gain is a subordinate consideration. For a physician to unnecessarily hospitalize a patient, prescribe a drug, or conduct diagnostic tests for the physician’s financial benefit is unethical. If a conflict develops between the physician’s financial interest and the physician’s responsibilities to the patient, the conflict must be resolved to the patient’s benefit.

Since the main concern of Medical Justice appears to be preventing harm to the physician’s reputation (and thus financial interest), forcing patients to assign away their copyrights in exchange for medical care strikes me as close if not over this line. It certainly is not putting patients first. When a patient goes to see a doctor, they are often anxious, in pain, or worried and thus in a very psychologically vulnerable position, or what the law often calls a position of “duress” where they will often sign documents without giving them proper consideration. This hardly seems to me to be a fair time to demand they assign some unknown number of future copyrights to their doctor; instead it feels like a huge power grab by the physician.

Moreover, as Dr. Segal states in the article, these so-called “assignments” of copyright become a “tool” to take posts down from the Web. One can surmise that he intends for these doctors to invoke the notice-and-takedown provisions of Section 512 of the DMCA as a convenient way to censor criticism and cajole websites like Yelp! to remove the postings. However, this too strikes me as unethical and a potential abuse of the DMCA system. The DMCA takedown system was meant to allow copyright owners whose works were being posted online by others and costing them sales of copyrighted goods (e.g. movies and music) to enjoy an expedited process for stopping infringement and limiting economic harm to their content.

Here, it is clear that these web postings have no economic value as content to the physicians — rather they are, at best, potentially harmful to their reputations (note again, though, that this would likely be a violation of their ethical duty either way).

I should note that much of this is speculation on my part. I have not seen this so-called agreement and have not heard of any doctor taking things off the web based on it; but it does strike me as ironic that a group like Medical Justice, which proclaims its mission as “relentlessly protecting physicians from frivolous lawsuits” would embrace and endorse potentially frivolous, unethical, and abusive legal documents and actions to further its goals.

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!

Jacobsen v. Katzer, (N.D. Cal.)

We recently covered the summary judgment arguments in the model railroad free software case. Just days later a decision from the court granted Jacobsen victories on virtually every issue suitable for resolution on summary judgment.

Summary judgment was granted in favor of Jacobsen on the Anticybersquatting Consumer Protection Act (ACPA) claim, on his copyright infringement claim, on Defendant’s counterclaim for copyright infringement, and partial summary judgment on the DMCA Copyright management information claim (on everything but the knowledge and intent elements).

We had previously highlighted the actual damages issue as particularly noteworthy, and while the court does not reach an award of damages in this ruling, the court wrote,

“[T]he Court may assume at this procedural stage that there is some value for the expenditure of time invested in the JMRI Project and that it therefore has some monetary value.”

and

“[T]he Court is unpersuaded that Plaintiff cannot prove damages.”

The parties are supposed to attend another settlement conference shortly and the writing is on the wall on this one, so if both parties adopt reasonable positions going in to that conference, they should come out with a resolution. Timing will be interesting, however, as the Federal Circuit appeal on irreparable harm is slated for oral argument on Jan. 4, 2010, and that appeal might not go forward if a settlement is finalized beforehand.

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.

To avoid this somewhat inconvenient question, courts developed a presumption of irreparable harm in cases of infringement. This presumption owes its origins as much to concerns over judicial economy as to any principled stance on the nature of the harm suffered by rights holders. In 2006, the Supreme Court in eBay v. MercExchange rejected this shortcut in the context of permanent injunctions in patent cases. Right-minded courts have subsequently applied eBay’s insistence on some factual showing of irreparable harm in copyright as well as patent cases.¹ Unfortunately, Judge Gertner didn’t follow their lead, allowing plaintiffs to skate by purely on reliance on the presumption.

But the juiciest document the court provided this week was the memorandum detailing its rationale for rejecting Tenenbaum’s proffered fair use defense. The analysis of the four factors is hardly surprising.  Spoiler alert: Tenenbaum loses on all of them. But there are some notable aspects of the court’s opinion.

First, the court goes to great lengths in dicta to clarify the scope of its conclusion.  This is not an opinion that says downloading or sharing copyrighted works over peer to peer networks can never constitute fair use.  There are factual scenarios under which such a defense might be plausible: downloading songs to sample and then promptly deleting them, space shifting music you’ve already acquired legally, and obtaining content not available for legal purchase elsewhere.  None of those facts, of course, were argued by Tenenbaum’s counsel, largely I suspect because they simply were not true.

Second, speaking of Charlie Nesson & Company, the court’s opinion includes an atypical if not entirely shocking admonishment of Tenenbaum’s counsel, describing the defense as “truly chaotic” and offering a skeletal and incomplete account of the bizarre behavior Team Tenebaum, and Nesson in particular, exhibited throughout the litigation.

Third, and most importantly, the court may have tipped its hand regarding the most important outstanding issue in the Tenenbaum litigation: the argument that the statutory damages provisions of the Copyright Act as applied to Tenenbaum’s activity faces serious constitutional challenges. Towards the end of its opinion the court writes:

As this court has previously noted, it is very, very concerned that there is a deep potential for injustice in the Copyright Act as it is currently written. It urges — no implores — Congress to amend the statute to reflect the realities of file-sharing. There is something wrong with a law that routinely threatens teenagers and students with astronomical penalties for an activity whose implications they may not have fully understood. The injury to the copyright holder may be real, and even substantial, but, under the statute, the record companies do not even have to prove actual damage.

The court here displays some sympathy to the claim that copyright statutory damages impose liability, in the court’s words an “astronomical penalt[y],” that is entirely untethered to the actual harm copyright holders suffer. This a hopeful sign for Tenenbaum. On the other hand, the court might be signaling its inclination to leave Congress rather than the courts holding the bag. Here’s hoping for a little judicial activism.

See also:

• Mark Giangrande, Fair Use Argument Falls Flat in File Sharing Case, Law Librarian Blog (Dec. 9, 2009).
• Nate Anderson, How Team Tenenbaum missed a chance to shape P2P fair use law, Ars Technica (Dec. 7, 2009).
• Ben Sheffner, Some additional thoughts on the Tenenbaum fair use opinion: mainly right on fair use, but why all the dicta?, Copyrights & Campaigns (Dec. 7, 2009).

1. For a discussion of the dubious presumption of irreparable harm after eBay, see Pamela Samuelson & Krzysztof Bebenek, Why Plaintiffs Should Have to Prove Irreparable Harm in Copyright Preliminary Injunction Cases, J.L. & Pol’y for the Info. Society (2009).

Jacobsen v. Katzer, (N.D. Cal.)

Occasionally we will blog about “Other cases to watch” that are not on our Top 10 list.

On Friday, Dec. 4, 2009, I attended the oral argument in Jacobsen v. Katzer on the parties’ cross-motions for summary judgment. This case has made one trip to the Federal Circuit already and has oral argument in another appeal scheduled for Jan. 4, 2010. It seems to be less recognized that at least two interesting issues remain in the case at the district court level: 1) the alleged infringement of the selection and arrangement of certain data, and 2) the appropriate method of calculating actual damages to a free software project that, through failure to timely register its copyrights, is not eligible for statutory damages.

Background

In Jacobsen’s first appeal, the Federal Circuit vacated and remanded the denial of Jacobsen’s motion for a preliminary injunction premised on an allegation of copyright infringement. Jacobsen, a UC Berkeley physics professor, leads the Java Model Railroad Interface (JMRI) free software project which, at the time of this dispute, was provided under the Artistic license. The key issue on the first appeal was whether the alleged breach of a free software license, such as the Artistic License, provided JMRI with a cause of action for copyright infringement or merely for breach of contract.

This distinction was rightly seen as critical to the ability of free software projects to enforce their licenses, because copyright actions can bring the possibility of injunctive relief, statutory damages, and attorney’s fees, whereas contract claims generally cannot, unless specifically provided for in the contract. Given the limited resources of many community-based free software projects, each of the above could make the difference between the practical ability or inability to resolve a license breach.

The Federal Circuit held that Jacobsen was entitled to bring a copyright infringement claim, and did so in language that broadly affirmed free software licensing schemes in general. The court wrote,

Copyright holders who engage in open source licensing have the right to control the modification and distribution of copyrighted material… The choice to exact consideration in the form of compliance with the open source requirements of disclosure and explanation of changes, rather than as a dollar-denominated fee, is entitled to no less legal recognition.

That decision was hailed as a strong endorsement of the enforceability of both free software and Creative Commons licenses, with Lawrence Lessig calling it “a very important victory.”

On remand, however, the district court again denied the preliminary injunction, this time for failure to show specific and actual harm suffered or imminent as a result of the alleged infringement. That decision has also been appealed to the Federal Circuit.

Proceedings in the District Court

While the appeal on the preliminary injunction has been pending, the case has proceeded in the district court. Both sides filed motions for summary judgment on the remaining issues in the case:

Spolier Alert: Judge’s Notice of Tentative Ruling.

Jacobsen moved for partial summary judgment on the liability but not damages portions of his claims for cybersquatting and copyright infringement. He also moved for partial summary judgment on his claims for removal of and distribution of false copyright management information under 17 U.S.C. § 1202, but not on the intent element of that claim. Finally, Jacobsen also moved for summary judgment on Katzer’s counterclaim for copyright infringement. Katzer separately moved for summary judgment on Jacobsen’s copyright and DMCA claims.

Cybersquatting

“decoderpro” is a registered trademark of Jacobsen’s and he alleges that Katzer violated the Anti-Cybersquatting Protection Act (ACPA), 15 U.S.C. § 1125(d), when he registered decoderpro.com and later transferred it to another individual, purportedly under the condition that it not be transferred to JMRI. Katzer writes, “Assuming that Plaintiff can prove ownership, Defendants concede that all of the other elements to prove a cybersquatting claim are met, with the exception of Defendants’ bad faith intent to profit from the mark.” However, Katzer’s Opposition does almost nothing to address the nine non-exhaustive statutory factors indicative of bad faith and instead simply alleges it is a disputed question of fact. A simple search of TESS makes Jacobsen’s ownership of the mark clear, so this claim should come down to whether the court feels sufficient evidence of bad faith intent to profit has been shown, much of the evidence for which was redacted in Jacobsen’s brief. The court’s Dec. 3 tentative ruling makes no mention of the ACPA claim and asks no questions regarding it. It also was not discussed at oral argument. This suggests to me that the court has made up its mind on this issue and it seems extremely likely to me that Jacobsen will prevail on the ACPA claim. Under 15 U.S.C. § 1117(d), the court may award “statutory damages in the amount of not less than $1,000 and not more than $100,000 per domain name, as the court considers just.”

Copyright Infringement

Jacobsen’s copyright infringement claim would probably be unremarkable in any other case that lacked so many precedent-making issues, and perhaps it remains unremarkable despite this context. However, it is an assertion of a fairly thin copyright on behalf of a free software project that otherwise is extremely generous in granting permissions for downstream copying, modifying, and distributing its works. To be fair, Jacobsen, who was also in attendance at oral argument, clearly does not relish litigation and would prefer to write model train software in peace. Only when Katzer sent demand letters requesting significant patent licensing fees and when Katzer’s allegations made Jacobsen feel that his reputation and even job were jeopardized did he determine that litigating the case to clear his name was essential. Furthermore, if Jacobsen’s allegations are true, it is one thing for a free software project to grant a generous license to those who agree to abide by its terms, including particularly attribution, and quite another thing for that free software project to be expected to acquiesce in someone stripping out all such attributions and passing off the project’s work as their own for commercial gain. Nonetheless, because the copyrighted work at issue in this case is a selection and arrangement of data, it represents a type of copyrighted work that many free software proponents would, in many cases, prefer not be copyrightable at all.

Originality in Compilations

Model trains can be outfitted with a decoder that intercepts signals sent along the track to control the train’s speed, direction, lights, etc. Train manufacturers provide decoder files that detail which signals their decoders are responsive to and the National Model Railroad Association (NMRA) publishes standards and recommended practices for these systems.

Jacobsen explains that 102 files defining 291 decoders of the 500 decoders available on the market are at issue in this claim. JMRI developers chose the decoders they found most interesting and useful, and then structured the resulting definition files in a unique way, not based upon manufacturer or NMRA approaches, but reflecting the judgment of the JMRI developers as to their preferred arrangement, particularly choosing an arrangement appropriate for integrating these files with the rest of the JMRI software.

Katzer admits that JMRI’s files were downloaded (but this is permissible under the Artistic License) and admits to modifying the files, and distributing those modified versions. Were the license’s conditions followed (i.e., were changes noted and the copyright notices not stripped out) even modifying and distributing the files would have been permissible. However, since Katzer did not abide by the terms of the license, his defense rests on the argument that the elements of the work he ultimately distributed are not copyrightable.

One example discussed at length, includes a comparison of a small portion of one of these decoder definition XML files called QSI Electric. The files define multiple “Configuration Variables” (CV). The first CV in JMRI’s version of the file (which runs for 16 pages) is:

<variable label="Primary Address" CV="1" comment="Short address"
 item="Short Address" default="03">
 <shortAddressVal/></variable>

The comparable CV in Katzer’s version of the file (which runs for 36 pages) is:

<CV INDEX="1">
 <DEFAULT>3</DEFAULT>
 <MIN>0</MIN>
 <MAX>255</MAX>
 <NAME>Primary Address</NAME>
 <BITS BITS_DEFINED="NO" />
 <BIT_DEFINITION>
  <BIT_0 />
  <BIT_1 />
  <BIT_2 />
  <BIT_3 />
  <BIT_4 />
  <BIT_5 />
  <BIT_6 />
  <BIT_7 />
 </BIT_DEFINITION>
 <DATE_MODIFIED />
 <BitMask />
 <stringList />
</CV>

Katzer used this comparison to illustrate how certain default values or word choices were taken by JMRI developers from manufacturer manuals or NMRA standards, which Jacobsen acknowledges. However, Jacobsen objected to this bit-by-bit deconstruction of the work when analyzing originality, arguing that the issue instead was whether the selection and arrangement of JMRI’s decoder definition files, when viewed in the aggregate, is original. However, even when considering just this file, Jacobsen argued that evidence of creative selection is evident from the JMRI developer’s choices to omit or combine numerous CVs used by NMRA and in manufacturer manuals, particularly those for speed which JMRI handled differently. When Katzer engaged in wholesale translation of JMRI’s files into his format, he frequently duplicated these sorts of selections and omissions. The court seemed to be leaning towards a finding of sufficient originality and hence of copyrightability when Judge White asked something to the effect of: “Isn’t there enough in the record to show sufficient originality?”

One of the cases Jacobsen relies on is Key Publications, Inc. v. Chinatown Today Pub. Enterprises, Inc., 945 F.2d 509, 514 (2d Cir. 1991). In that case a telephone directory prepared for the Chinese-American community was held copyrightable because the selection and arrangement of the listings displayed sufficient originality. The selection of businesses to include was found original despite the fact that some were taken from another earlier restaurant directory and because of some decisions made to omit certain businesses. The arrangement of the listings were also held sufficiently original because the categories were not mere mechanical groupings or copied wholesale from elsewhere, and instead used some categories of special interest to the Chinese-American audience.

However, despite a finding of copyrightability for the directory, the allegedly infringing publication in that case was held non-infringing because it contained only 28 categories as opposed to plaintiff’s 260 and of those, only three appeared to be duplicate categories. Additionally, the selection of listings showed that only 17% of plaintiff’s 9,000 listings also appeared and that no sizable category was copied in its entirety.

Katzer claims that he only distributed decoder definition files for 107 of the 291 decoders covered by JMRI’s files. This then might be marginally comparable to using only 28 of 260 categories in a telephone directory. However, Katzer offers less evidence that the files for those 107 decoders do not duplicate the selections made by JMRI. That is, this would be like identically duplicating the listings in 28 of the 260 categories in a telephone directory. Had the defendant in Key Publications done that, the court’s reasoning suggests it likely would have found infringement.

Infringement of Compilations

Whether Katzer’s files substantially duplicate the selections made by JMRI developers for those 107 decoders is a factually-intensive inquiry that I have not undertaken. However, it does seem to me that Katzer should have attached an enormous exhibit to one of these summary judgment briefs detailing precisely how the files for those 107 decoders contain selections that differ from those made by JMRI developers. If there is an exhibit that would show this, then I cannot find it and it was not discussed at oral argument. Absent such evidence, I think Katzer fell into a trap of working from another’s compilation to create one’s own. Even where the underlying data is in the public domain or has an independent source, someone’s compilation of that data may reflect selections and omissions from those independent sources that one will inadvertently duplicate if one simply makes a wholesale translation of their compilation into your own format. Feist and Key Publications both acknowledge that, “Compilers operating under different principles of selection are not obligated to repeat factual research already undertaken and completed by others.” However, when working from another’s compilation, one must be sure to use a principle of selection other than “take everything.”

Thus, assuming one agrees with existing precedent that provides copyright protection to original selections and arrangements of otherwise uncopyrightable data, this appears to be a case that even those free software proponents who favor free and easy re-use of such data can still accept as a case of a thin copyright that deserved protection and that was infringed. It is, however, a fairly close case.

Actual Damages

Like many community-run free software projects, JMRI did not bother to register its copyrights until after they discovered a case of potential infringement. Under 17 U.S.C. § 412, registration before the commencement of the infringement¹ is a prerequisite to an award of statutory damages and attorney’s fees under sections 504 and 505. This means that Jacobsen can only seek actual damages for infringement as opposed to statutory damages. This case should serve as an enormous red flag to free software projects who would want to enforce their copyright in the event of an infringement that they should be taking the necessary steps to register their copyrights before any enforcement issues arise.

The district court is thus faced with another issue of first impression: What is the proper method of determining the actual damages incurred by a free software project whose copyright is infringed, when that project provides its software at no cost to the entire world (on the condition that the recipient abide by the accompanying license)?

Katzer argues that, in the Ninth Circuit, the appropriate approach to determining actual damages is to ask “what a willing buyer would have been reasonably required to pay to a willing seller for plaintiff’s work.” Frank Music Corp. v. Metro Goldwyn-Mayer, 772 F.2d 505, 512 (9th Cir. 1985). Katzer then argues that since JMRI’s decoder definition files have always been available for download at no cost, they have no market value, and JMRI has not suffered any actual damages. Again, since so many free software projects fail to timely register their copyrights and would also be forced to pursue actual damages, a decision that accepted Katzer’s argument here could permit widespread consequence-free infringement.²

Jacobsen responds that he is entitled to recover the value of the misappropriated work, citing to Sid & Marty Krofft Television Productions, Inc. v. McDonald’s Corp., 562 F.2d 1157, 1174 (9th Cir. 1977), which explains that a copyright owner may recover as actual damages “the reasonable value, if any, of plaintiffs’ work including the publication and republication rights therein, and the value, if any, to defendants of the use of plaintiffs’ works”, where “the value of use” “amounts to a determination of what a willing buyer would have been reasonably required to pay to a willing seller for plaintiffs’ work.”

Thus the parties largely agree on the appropriate legal standard for determining actual damages. They simply have a different view on how that standard applies to the facts of this case and Jacobsen contends that there is a factual dispute regarding damages that precludes summary judgment on this issue. Jacobsen has provided estimates of the time spent by JMRI developers and testimony regarding appropriate hourly rates for such work. Katzer dismisses this as the “acquisition cost” and not what a willing buyer would be willing to pay for a work that is provided at no cost over the internet. Jacobsen counters that the work is provided at no cost only under the terms of the license and so the appropriate hypothetical is to imagine that Katzer had come to JMRI and asked, “What would I have to pay to take a substantial portion of your decoder definition files and translate them into my own format, if I intend to strip out the attribution information, purport that the work is my own, and sell it to the world?” Faced with that question, JMRI developers probably would have been unwilling to provide the work at nearly any price as one of the few rewards they receive for their work is reputational, which can only arise through accurate attribution.

Instead of an approach that values the time of JMRI developers at zero or an approach that imagines JMRI developers being asked to “sell out” the more reasonable approach seems to be the one taken by Jacobsen’s expert which asks what Katzer would have had to spend to duplicate the work that he took. If Katzer had hired developers to make all the creative selections that JMRI developers made, Jacobsen’s expert concludes he would have spent between $153,000 and $157,600.³

What’s at Stake?

The most interesting issue remaining at the district court is how to evaluate actual damages for infringement of a free software project’s copyrighted work, which is distributed at no cost online, under the terms of a free software license. One of the lessons of the Federal Circuit’s opinion in this case was that exacting “consideration in the form of compliance with the open source requirements of disclosure and explanation of changes, rather than as a dollar-denominated fee, is entitled to no less legal recognition.” Thus when that compliance is found wanting, it cannot be that no remedy is available. Instead, it makes sense that the value of the use to the infringer can be reflected in an estimate of what he would have spent had he prepared the work without the benefit of infringed work. It will be interesting to see how the court comes out on this issue.

See also:

• JMRI, Jacobsen v. Katzer Docket.
• SFLC, SFLC Files Amicus Brief in Jacobsen v. Katzer, SFLC News (Jun. 15, 2009).
• Mike Madison, Jacobsen v. Katzer Continues, madisonian.net (Jan. 13, 2009).
• Pamela Jones, Court of Appeals for Federal Circuit Overturns Jacobsen v. Katzer – Ruling as text, Groklaw (Aug. 13, 2008).

1. Unless the work is registered within three months of publication.
2. If the infringement were done for profit, free software projects could alternatively seek to recover the infringer’s profits, but Katzer claims he suffered a net loss on his allegedly infringing product and in either that scenario or with infringement done not-for-profit, free software projects would likely be left with no monetary remedy.
3. I have been unable to find a rebuttal expert report from Katzer.