Copyright Infringement

October 4, 2013

Malibu Media Files Seven New Copyright Infringement Lawsuits Against John Doe Defendants

Indianapolis, Indiana — An intellectual property attorney has filed seven new copyright suits in the Southern District of Indiana on behalf of Malibu Media, LLC of Los Angeles, California alleging that seven John Doe defendants infringed Malibu Media’s copyrighted works.

Copyright lawyer Paul Nicoletti is again in federal court on behalf of Malibu Media asserting infringement of the company’s intellectual property. In this current round, Malibu Media’s latest incursion into the federal court system, seven new and nearly identical lawsuits have been filed against anonymous John Doe defendants, each claiming copyright infringement. The Defendants allegedly used the BitTorrent file-sharing protocol to illegally download, copy and distribute elements of various works of Malibu Media’s copyrighted material.

Malibu Media seeks a permanent injunction barring the Defendants from engaging in infringing activities; an order by the court to remove infringing materials from all computers of each Defendant; an award of statutory damages of $150,000 per infringed work and reasonable attorneys’ fees and costs.

Practice Tip: There is a significant disparity in the dollar amount awarded in default judgments against defendants in copyright infringement cases involving BitTorrent. In two separate cases, Judge William T. Lawrence recently ordered two defendants who failed to appear to pay $20,000 for the copyright infringement that was deemed to have been admitted by the defendants’ failure to defend against the allegations. See here and here. However, in a similar case, Judge Jane Magnus-Stinson ordered an entry of default judgment against a defendant for $151,425, the full amount requested.

September 19, 2013

TCYK Sues Nine John Doe Defendants for Copyright Infringement of “The Company You Keep”

By Overhauser Law Offices, LLC

Hammond, Indiana — Copyright lawyers for TCYK LLC of Los Angeles, CA sued for copyright infringement in the Northern District of Indiana alleging that John Does 1-9, all allegedly located in Indiana, infringed the copyrighted work “The Company You Keep,” which has been registered by the U.S. Copyright Office.

The movie stars Robert Redford, Susan Sarandon, Shia LaBeouf, Anna Kendrick, Julie Christie and Nick Nolte. It was directed by Robert Redford. TCYK alleges that the infringing transfer and copying of this movie, which was released on DVD on August 13, 2013, was accomplished by Defendants using BitTorrent, a peer-to-peer file-sharing protocol. Specifically, the Doe Defendants are accused of deliberately participating in a peer-to-peer “swarm,” and illegally reproducing and/or distributing portions of the movie in digital form with other Defendants. TCYK indicates in its complaint that it used geolocation technology to determine that the Doe Defendants were located in Indiana.

The complaint lists a single count of copyright infringement. Copyright attorneys for Plaintiff ask the court for permanent injunctions prohibiting infringement of Plaintiff’s movie; the destruction of all copies of infringing works in any Defendant’s control; judgment that Defendants have willfully infringed Plaintiff’s copyrighted work; judgment that Defendants have otherwise injured the business reputation and business of Plaintiffs; for actual damages or statutory damages; and for attorneys’ fees and litigation expenses.

Practice Tip #1: The impact of distributing large files on servers and networks can be reduced by using BitTorrent. Instead of downloading a file from a single server, the BitTorrent protocol allows users to join a “swarm” of hosts, each of which downloads and uploads data from the others simultaneously.

Practice Tip #2: TCYK has filed dozens of lawsuits in federal courts claiming copyright infringement of “The Company You Keep”, including courts in Indiana, Florida, Illinois, Minnesota, Ohio and Wisconsin. It is estimated that thousands of defendants have been sued by TCYK on the allegation that they have infringed this copyrighted work. TCYK is also featured in an interesting article on the growing practice of using the court system to monetize infringement committed by individual infringers.

Practice Tip #3: It is curious that apparently neither the filing fee nor form AO 121 (Report on the Filing or Determination of an Action or Appeal Regarding a Copyright) was submitted to the court in conjunction with the filing of this complaint.

September 6, 2013

Texas Roadhouse Sues Multiple Restaurants Operating as “Texas Corral” or “Amarillo Roadhouse”

By Overhauser Law Offices, LLC

Grand Rapids, Michigan — Trademark lawyers for Texas Roadhouse, Inc. and Texas Roadhouse Delaware LLC, both of Louisville, Kentucky (collectively, “Texas Roadhouse”) sued for trademark infringement in the Western District of Michigan alleging that the Defendants, including those doing business as multiple Texas Corral restaurants located in Indiana (collectively “Texas Corral”), as well as one Amarillo Roadhouse restaurant, also located in Indiana, infringed the service mark TEXAS ROADHOUSE, Trademark Registration Nos. 1,833,533; 2,231,309; and 2,250,966, which have been registered by the U.S. Trademark Office.

Texas Roadhouse operates a Texas-themed restaurant chain. The first Texas Roadhouse restaurant opened in Clarksville, Indiana in 1993. As of March 2013, there were 397 Texas Roadhouse restaurants in 47 states and three countries.

Texas Roadhouse contends that each of the restaurants is required to comply with strict exterior and interior design requirements so that the look and feel is substantially identical across all Texas Roadhouse locations. It lists three U.S. Service Mark Registrations that include the mark “Texas Roadhouse” and asserts that each of them is incontestable. Texas Roadhouse also claims ownership of various unregistered marks that include the word “Texas” and “Roadhouse” as well as copyright protection, including a U.S. Copyright registration, of its marquee. Finally, Texas Roadhouse claims intellectual-property rights in the trade dress of its restaurants, including the look of the exterior design of the building, the interior décor, the music and the menu.

Texas Corral, against which Texas Roadhouse filed this complaint, also operates casual, western-themed, family restaurants. It owns and operates nine restaurant locations doing business under the name “Texas Corral.” A total of ten locations are at issue in this lawsuit. Six Indiana cities have “Texas Corral” restaurants: Highland, Merrillville, Portage, Michigan City, Martinsville and Shelbyville. Texas Corral also purportedly owns and operates a location that does business as “Amarillo Roadhouse” in Indiana, which is also at issue in this trademark-infringement lawsuit. In addition, three other Texas Corral restaurants have been listed in the complaint: two in Michigan and one in Illinois.

Also listed in the complaint are Paul Switzer, asserted to be the franchisor/licensor of Texas Corral restaurants and Victor Spina, asserted to be a franchisee/licensee. “John Doe Corp.,” a fictitious name intended to represent entities or individuals whose actual identity is not currently known to Texas Roadhouse, is also listed as a Defendant.

In the complaint, trademark attorneys for Texas Roadhouse assert that Texas Corral and Amarillo Roadhouse routinely use trade dress, trademarks, service marks, trade names, designs or logos that are confusingly similar to or copies of intellectual property owned by Texas Roadhouse. This purportedly infringing use is asserted to be visible in signage, print and electronic promotional materials, menus, décor, building design and websites.

Texas Roadhouse’s complaint against Texas Corral and Amarillo Roadhouse lists the following:

· Count I: Trade Dress Infringement

· Count II: Federal Trademark Infringement

· Count III: Trademark Infringement Under Mich. Comp. Laws § 429.42

· Count IV: Trademark Infringement Under Ind. Code § 24-2-1-13

· Count V: Trademark Infringement Under Common Law

· Count VI: Copyright Infringement Under 17 U.S.C. § 101 et seq.

· Count VII: Unfair Competition Under Michigan and Indiana Common Law

Texas Roadhouse asks for a judgment that Texas Roadhouse owns enforceable rights in the Texas Roadhouse intellectual property and that all registrations for the Texas Roadhouse intellectual property are valid; a judgment that the Defendants have been and are directly or indirectly infringing the Texas Roadhouse intellectual property; a judgment that the Defendants have been and are engaging in unfair competition by their unauthorized use of the Texas Roadhouse intellectual property; a judgment that Defendants acted deliberately, willfully, intentionally or with malicious intent; an injunction against Defendants prohibiting infringement; damages, including treble damages; a judgment that this case is exceptional and that the Defendants be ordered to pay all of Texas Roadhouse’s attorney fees associated with this action pursuant to 15 U.S.C. § 1117 and 17 U.S.C. § 505; and a judgment that the defendants be ordered to pay all costs and expenses incurred by Texas Roadhouse in this action.

Practice Tip:

The U.S. Supreme Court has addressed the requirements for trade dress protection in a similar context. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992). At issue in Two Pesos was similar restaurant décor. Taco Cabana had sued rival Two Pesos for copying the look of its restaurant, described as “a festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.” The lawsuit alleged that Two Pesos had imitated this scheme and had thereby infringed on Taco Cabana’s trade dress. Among the issues considered was whether trade dress which was inherently distinctive must also be shown to have secondary meaning to be granted protection under the Lanham Act. The Supreme Court held that trade dress which is inherently distinctive is protectable under § 43(a) of the Lanham Act without a showing that it has acquired secondary meaning, since such trade dress itself is capable of identifying products or services as coming from a specific source.

Also at issue in this case, among other matters, will be the eligibility of the words “Texas” and “Roadhouse” for protection under federal and Indiana intellectual-property laws. Under the Lanham Act, a federal law, the holder of a mark may ask the United States Patent and Trademark Office to register the mark on the principal register. 15 U.S.C.A. § 1051, et seq. Marks that are “primarily descriptive” and “primarily geographically descriptive” of the goods or services with which they are associated are not eligible for registration on the principal register unless they have “become distinctive of the applicant’s goods in commerce.” 15 U.S.C.A. § 1052(e), (f). Thus, registration of a descriptive mark on the principal register requires a showing of secondary meaning.

Although the Lanham Act protects both registered and unregistered marks, registration is desirable because it constitutes prima facie evidence of the mark’s validity. See 15 U.S.C.A. §§ 1057(b), 1115(a). Thus, federal registration of a mark “‘entitles the plaintiff to a presumption that its registered trademark is not merely descriptive or generic, or, if merely descriptive, is accorded secondary meaning.'” The plaintiff bears the burden, however, of establishing that an unregistered mark is entitled to protection.

The Indiana Trademark Act is similar, and in some respects identical, to the Lanham Act. Although Indiana’s body of trademark law is relatively undeveloped, the General Assembly has specified that the Indiana Trademark Act “is intended to provide a system of state trademark registration and protection that is consistent with the federal system of trademark registration and protection under the Trademark Act of 1946.” Ind. Code Ann. § 24-2-1-0.5. Moreover, “[a] judicial or an administrative interpretation of a provision of the federal Trademark Act may be considered as persuasive authority in construing a provision of the Indiana Trademark Act.

The Indiana Trademark Act’s definitions of “trademark” and “service mark” track the Lanham Act’s definitions of those terms nearly verbatim. See I.C. § 24-2-1-2(8), (9). Like the Lanham Act, the Indiana Trademark Act does not adversely affect common-law trademark rights. See I.C. § 24-2-1-15. Registration of a trademark or service mark with the office of the Indiana Secretary of State provides a registrant with a remedy for the infringement thereof under the Indiana Trademark Act. I.C. § 24-2-1-14(a). Like the Lanham Act, the Indiana Trademark Act prohibits the registration of marks that are “primarily geographically descriptive or deceptively geographically misdescriptive of the goods or services[.]” I.C. § 24-2-1-3. This provision does not, however, prevent the registration of a mark that is used in Indiana by the applicant and has become distinctive of the applicant’s goods or services. In other words, a geographically descriptive mark may be registered under the Indiana Trademark Act if it has acquired secondary meaning.
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September 5, 2013

Common Themes Between Elton John’s “Nikita” and Hobbs’ “Natasha” Insufficient to Support Claim of Copyright Infringement

By Overhauser Law Offices, LLC

Chicago, Illinois – The United States Court of Appeals for the Seventh Circuit has affirmed the judgment of the Northern District of Illinois, Eastern Division. Copyright lawyers for Guy Hobbs of the United Kingdom had sued alleging copyright infringement by Elton John and Bernie Taupin of the United Kingdom of Hobbs’ copyrighted work “Natasha” which has been registered in the United Kingdom. The district court dismissed the complaint and the appellate court affirmed.

While working on a Russian cruise ship, Hobbs composed a song entitled “Natasha” that was inspired by a brief love affair he had with a Russian waitress. He tried to publish his song, but was unsuccessful. A few years later, John and Taupin released a song entitled “Nikita” through a publishing company to which Hobbs had sent a copy of “Natasha.” Believing that “Nikita” was based upon “Natasha,” Hobbs eventually demanded compensation from John and Taupin. He ultimately filed suit asserting a copyright infringement claim and two related state-law claims. The Defendants asked the district court to dismiss Hobbs’ complaint for failure to state a claim.

In supporting his claim for copyright infringement in the district court, Hobbs asserted both traditional copyright infringement of individual elements of “Natasha” and also copyright infringement based upon “Natasha” as a combination of similar elements that would be unprotectable individually.

After considering Hobbs’ first argument of copyright infringement, the district court concluded that the elements identified were not entitled to copyright protection when considered alone.

Hobbs’ second legal theory to support a claim of copyright infringement was that the unique selection, arrangement, and combination of individually unprotectable elements in a song could be entitled to copyright protection. The district court also rejected Hobbs’ “unique combination” argument because it interpreted the law, as stated in Peters v. West, 692 F.3d 629, 632 (7th Cir. 2012), to preclude Hobbs’ copyright infringement claim based upon a combination of similar elements that are unprotectable individually. Despite rejecting Hobbs’ “unique combination” argument in this set of circumstances as an impermissible application of copyright law, the district court nevertheless considered the facts under this theory.

In defending his “unique combination” theory, Hobbs identified a number of allegedly similar elements between the two songs. He argued that his selection and combination of those elements in “Natasha” constituted a unique expression entitled to copyright protection, and that the Defendants’ similar use of those elements in “Nikita” supported a claim for copyright infringement. Hobbs identified the following allegedly similar elements that are found in both songs:

· A theme of impossible love between a Western man and a Communist woman during the Cold War;

· References to events that never happened;

· Descriptions of the beloved’s light eyes;

· References to written correspondence to the beloved;

· Repetition of the beloved’s name, the word “never,” the phrase “to hold you,” the phrase “I need you,” and some form of the phrase “you will never know”; and

· A title which is a one-word, phonetically-similar title consisting of a three-syllable female Russian name, both beginning with the letter “N” and ending with the letter “A.”

The district court held that the similar elements, even when considered under the “unique combination” theory, still could not support a claim for copyright infringement. It also concluded that the Copyright Act preempted Hobbs’ state-law claims.

The sole issue for appeal was Hobbs’ “unique combination” theory. The Seventh Circuit held that Hobbs failed to state a claim for copyright infringement because, even when the allegedly similar elements between the songs were considered in combination, “Natasha” and “Nikita” did not share enough unique features to give rise to a breach of the duty not to copy another’s work. It held that, although both songs contained the idea of an impossible love affair due to a conflict, each song expressed this general idea differently. That is, “Natasha” and “Nikita” tell different stories about impossible romances during the Cold War. Thus, as a matter of law, they were not substantially similar and the dismissal of Hobbs’ claim for copyright infringement was affirmed.

Practice Tip #1:

The Seventh Circuit declined to decide whether Hobbs was correct when he argued that a unique selection, arrangement, and combination of individually unprotectable elements in a song can support a copyright infringement claim. Instead, careful review of both songs’ lyrics reveals that Hobbs’ first four allegedly similar elements are expressed differently in “Natasha” and “Nikita.” The remaining similar elements were standard fare in popular love songs and, thus, could not serve to serve as evidence that infringement had occurred.

Practice Tip #2:

The Copyright Act does not protect general ideas, but only the particular expression of an idea. Additionally, even at the level of particular expression, the Copyright Act does not protect incidents, characters or settings which are as a practical matter indispensable, or at least standard, in the treatment of a given topic.

However, there is a wealth of authority recognizing that, in certain situations, a unique arrangement of individually unprotectable elements can form an original expression entitled to copyright protection. See Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 362 (1991) (“The question that remains is whether [the plaintiff] selected, coordinated, or arranged these uncopyrightable facts in an original way.”); JCW Invs., Inc. v. Novelty, Inc., 482 F.3d 910, 917 (7^th Cir. 2007) (“[T]he very combination of these [unprotectable] elements as well as the expression that is [the work itself] are creative.”); Bucklew v. Hawkins, Ash, Baptie & Co., 329 F.3d 923, 929 (7th Cir. 2003) (“[I]t is the combination of [unprotectable] elements, or particular novel twists given to them, that supply the minimal originality required for copyright protection.”); Roulo v. Russ Berrie & Co., 886 F.2d 931, 939 (7th Cir. 1989) (“While it is true that these elements are not individually capable of protection, just as individual words do not deserve copyright protection, it is the unique combination of these common elements which form the copyrighted material.”); see also Stava v. Lowry, 323 F.3d 805, 811 (9th Cir. 2003) (“It is true, of course, that a combination of unprotectable elements may qualify for copyright protection.”); Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996, 1003-04 (2d Cir. 1995) (“As the Supreme Court’s decision in [Feist] makes clear, a work may be copyrightable even though it is entirely a compilation of unprotectible elements.”).

Practice Tip #3:

Although Hobbs brought his action twenty-seven years after “Nikita” was authored and eleven years after Hobbs allegedly first encountered “Nikita,” the Defendants did not raise the three-year statute of limitations, see 17 U.S.C. § 507(b), as a defense in their motion to dismiss.

August 28, 2013

Another BitTorrent Defendant Ordered to Pay $20,000 in Default Judgment

By Overhauser Law Offices, LLC

Indianapolis, Indiana – The United States District Court for the Southern District of Indiana has granted a motion by Malibu Media of Los Angeles, California for default judgment against Kenny Griffith for infringement of the copyrighted work “Slow Motion” which has been registered by the U.S. Copyright Office.

In its complaint, Malibu Media alleged that Griffith and others directly and contributorily infringed its copyrighted work when they downloaded and disseminated without authorization, all or a portion of a movie owned by Malibu Media titled “Slow Motion” using BitTorrent, a peer-to-peer file sharing protocol. The initial complaint was served upon eight defendants but was later severed. Discussed in this opinion are the allegations, findings and judgments against Griffith only.

Malibu Media served Griffith with a summons and complaint on January 5, 2013. He did not respond. On April 1, 2013, default was entered as to Griffith by Southern District of Indiana Judge William T. Lawrence. By virtue of this entry of default, it was established as a factual matter that Griffith had uploaded and downloaded all or a portion of the copyrighted work without authorization, and had also enabled countless unknown others to obtain the work in the process.

In the current default-judgment opinion, the court addressed requests by copyright attorneys for Malibu Media for two separate injunctions, for damages, for attorney’s fees and for costs.

The first injunction sought injunctive relief pursuant to 17 U.S.C. §§ 502 and 503. The court noted that, under § 503(b), a court may order the destruction of all copies made or used in violation of the copyright owner’s exclusive rights. Given the nature of the infringement that occurred in this case — participating in a “swarm” and downloading and uploading copyrighted work — the court found that this injunction was particularly appropriate.

The second injunction sought asked the court to prohibit Griffith “from directly, contributorily or indirectly infringing [Malibu Media’s] rights under federal or state law in the Work, including, without limitation, by using the internet, BitTorrent or any other online media distribution system to reproduce (e.g., download) or distribute the Works, or to make the Work available for distribution to the public, except pursuant to a lawful license or with the express authority of [Malibu Media].” The court held that such an injunction was simply a mandate that Griffith follow copyright laws and that the injunction was therefore unnecessary.

The court also denied Malibu Media’s request for attorney’s fees and costs, noting that the fees submitted seemed to reflect legal work done not only in the furtherance of the lawsuit against Griffith, but also seemed to pertain to other related lawsuits involving the previously joined defendants. As a result of these ambiguities, the court denied Malibu Media’s request for costs and attorney’s fees but indicated that it would be willing to entertain such motions — for attorney’s fees incurred as to Griffith only — upon the entry of final judgments as to all defendants in related cases.

Finally, Malibu Media sought statutory damages in the amount of $20,000. The court cited “Congress’s recognition of the ‘disturbing trend’ of internet piracy” and found that amount to be just under the circumstances.

Practice Tip:

Deciding to simply ignore a complaint, as Kenny Griffith apparently did, can be a costly error. Failing to present the defendant’s version of the facts and arguments results in the court considering only the plaintiff’s side of the story. Here, because the defendant chose to leave the complaint unanswered, the well-pled allegations of the plaintiff relating to liability were taken as true.

After the entry of default judgment, the court then conducted an inquiry to ascertain the amount of damages with “reasonable certainty.” Again, in such circumstances, it serves a defendant well to plead his case — to present the court with reasons that the plaintiff should not get 100% of what he requests.

Under 17 U.S.C. § 504(c)(1), a copyright owner may elect actual or statutory damages. Statutory damages range from a sum of not less than $750 to not more than $30,000. The determination of the exact amount is left to the discretion of the court. In this case, Malibu Media asked the court for $20,000 and the court, having no arguments from the defendant to suggest that this was excessive, granted the entire amount.

Overhauser Law Offices, the publisher of this website, has represented several hundred persons and businesses regarding copyright infringement and similar matters.

August 22, 2013

U.S. Department of Commerce Produces Comprehensive Analysis Addressing Copyright Policy, Creativity, and Innovation in the Digital Economy

By Overhauser Law Offices, LLC

Washington, D.C. — The U.S. Department of Commerce recently released a green paper on Copyright Policy, Creativity, and Innovation in the Digital Economy (the “Green Paper“) to advance discussion on a set of policy issues critical to economic growth. The Green Paper discusses the goals of maintaining an appropriate balance between rights and exceptions as the law continues to be updated; ensuring that copyright can be meaningfully enforced on the Internet; and furthering the development of an efficient online marketplace.

The Green Paper is the most thorough and comprehensive analysis of digital copyright policy issued by any administration since 1995. The report is a product of the Department of Commerce’s Internet Policy Task Force (“IPTF”) with input from the U.S. Patent and Trademark Office (“USPTO”) and the National Telecommunications and Information Administration (“NTIA”). Through the IPTF, the USPTO and NTIA will solicit further public comments and convene roundtables and forums on a number of key policy issues.

“Copyright law strikes a number of important balances in delineating what is protectable and what is not, determining what uses are permitted without a license, and establishing appropriate enforcement mechanisms to combat piracy, so that all stakeholders benefit from the protection afforded by copyright,” said U.S. Secretary of Commerce Penny Pritzker. “Ensuring that our copyright policy provides incentives for creativity while promoting innovation on the Internet is a critical and challenging task. The Green Paper released today is an important step toward ensuring that the United States’ creative industries continue to have a substantial impact on strengthening our nation’s economy.”

Copyright has been a vital contributor to U.S. cultural and economic development for more than two hundred years, fostering the production and dissemination of the valuable expression that has put America at the forefront of the global creative marketplace. Maintaining a balanced and effective copyright system should continue to drive the production of creative works while at the same time preserving the innovative power of the Internet and the free flow of information. The Green Paper provides a comprehensive review of current policy related to copyright and the Internet, and identifies important issues that call for attention and development of solutions. The solutions may entail a combination of legal remedies, technology, private sector cooperation, and public outreach and education, along with the continued development of options to legally access copyrighted works.

In the Green Paper, the IPTF proposes the following actions:

· Establishing a multi-stakeholder dialogue on improving the operation of the notice and takedown system under the Digital Millennium Copyright Act (“DMCA”).

· Soliciting public comment and convening roundtables on:

o The legal framework for the creation of remixes;

o The relevance and scope of the first-sale doctrine in the digital environment;

o The application of statutory damages in the context of individual file-sharers and secondary liability for large-scale online infringement;

o The appropriate role for the government, if any, to help improve the online licensing environment, including access to comprehensive public and private databases of rights information.

“Copyright protection is a foundation for creative services and products that drive a significant part of the U.S. economy,” said Acting Under Secretary for Intellectual Property and Acting USPTO Director Teresa Stanek Rea. “The Internet must continue to support a legitimate market for copyrighted works as well as provide a platform for innovation and the introduction of new and dynamic services that drive digital commerce.”

“We see a digital future in which the relationship among digital technology, the Internet, and creative industries becomes increasingly symbiotic,” said Assistant Secretary of Commerce for Communications and Information and NTIA Administrator Lawrence E. Strickling. “In this digital future, the rights of creators and copyright owners are appropriately protected; creative industries continue to make their substantial contributions to the nation’s economic competitiveness; online service providers continue to expand the variety and quality of their offerings; technological innovation continues to thrive; and consumers have access to the broadest possible range of creative content.”

The Green Paper reiterates the Administration’s support for legislation creating a public performance right for the broadcasting of sound recordings and enabling prosecutors to seek felony penalties for unauthorized streaming to the public. It supports congressional or regulatory attention to determine how best to rationalize rate-setting standards for different types of music services; reform music licensing, particularly the mechanical license for musical compositions; and ensure consumers can unlock their cell phones, subject to applicable service agreements. It supports the U.S. Copyright Office’s work to address the problems of orphan works and mass digitization, consider possible small-claims procedures, update the statutory exception for libraries, and improve public registration and recordation systems. The Green Paper also supports and encourages enhancing public education and outreach efforts.

With respect to the difficulties in enforcement against websites dedicated to infringement, the Green Paper encourages ongoing voluntary initiatives, such as those facilitated by the U.S. Intellectual Property Enforcement Coordinator (“IPEC”), that benefit all parties and are consistent with the principles of privacy, free speech, competition, and due process, and states that the IPTF will follow these developments and assess their impact in order to determine whether additional action is needed. The USPTO has also extended its request for comments regarding the processes, data metrics, and methodologies that could be used to assess the effectiveness of cooperative agreements and other voluntary initiatives to reduce intellectual property infringement. This comment solicitation is part of the Administration’s 2013 Joint Strategic Plan for Intellectual Property Enforcement.

Then-Secretary of Commerce Gary Locke launched the IPTF in April 2010, bringing together the USPTO and NTIA, as well as the International Trade Administration (“ITA”), the National Institute of Standards and Technology (“NIST”), and the Economic and Statistic Administration (“ESA”) to conduct a comprehensive review of privacy policy, copyright, global free flow of information, cybersecurity, and their respective relationships to innovation in the Internet economy. In preparing the Green Paper, USPTO and NTIA held more than a dozen listening sessions with interested stakeholders, convened a symposium, received hundreds of public comments, and reviewed comments submitted to other agencies on relevant topics. The IPTF will consider feedback it receives from public comments, roundtables and forums to determine how the current copyright framework can be improved to serve creators, right holders, service providers, consumers, innovation, and national economic goals.

The Green Paper can be found online at: http://www.uspto.gov/news/publications/copyrightgreenpaper.pdf.

Practice Tip: Among the issues to be considered as part of this initiative, public comment will be solicited regarding the application of statutory damages in the context of individual file-sharers. This subject has created a considerable range of response from the judiciary. On one end of the spectrum are opinions, for example, one citing a “disturbing trend of internet piracy“ and another which assessed statutory damages of $150,000 in an illegal-downloading case in which the defendant did not appear to answer the allegations of infringement.

On the other end of the spectrum are opinions such as Judge Otis Wright’s scathing indictment of copyright trolls. In Judge Wright’s opinion, he details the abuse of the legal process committed under the authority of The Copyright Act. In the now-famous “Star Trek”-themed order, Judge Wright began by opining, “Plaintiffs have outmaneuvered the legal system. They’ve discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle–for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn. So now, copyright laws originally designed to compensate starving artists allow, starving attorneys in this electronic-media era to plunder the citizenry.”

Among other measures in this case, the Court awards attorney’s fees and costs in the sum of $40,659.86 to the defendant. It then, as a punitive measure, doubled the award, yielding $81,319.72.

Judge Wright later concluded with an explanation for the sanctions which he was imposing against the attorneys in the case, “though Plaintiffs boldly probe the outskirts of law, the only enterprise they resemble is RICO. The federal agency eleven decks up is familiar with their prime directive and will gladly refit them for their next voyage. The Court will refer this matter to the United States Attorney for the Central District of California. The will also refer this matter to the Criminal Investigation Division of the Internal Revenue Service and will notify all judges before whom these attorneys have pending cases. For the sake of completeness, the Court requests [defense counsel] to assist by filing a report, within 14 days, containing contact information for: (1) every bar (state and federal) where these attorneys are admitted to practice; and (2) every judge before whom these attorneys have pending cases.”

August 21, 2013

Judgment of $151,425 Granted Against Defendant Who Failed to Answer Allegations of Illegal Downloading of Pornography

By Overhauser Law Offices, LLC

Indianapolis, Indiana — The Southern District of Indiana has granted a motion for default judgment by CP Productions, Inc. (“CP”) of Arizona, which had sued Gerald L. Glover, III (“Glover”) of Indianapolis, Indiana alleging infringement of the copyrighted work “GH Hustlers — Maryjane’s Second Visit” which has been registered by the U.S. Copyright Office.

CP produces adult-entertainment content. Copyright lawyers for CP filed suit in the Southern District of Indiana alleging that Glover and his joint tortfeasors, without Plaintiff’s authorization or license, downloaded CP’s copyrighted work via the Internet. Specifically, it was alleged that they had, knowingly and illegally, reproduced and distributed CP’s copyrighted creative work, and materially contributed to the infringing conduct of others by acting in concert via the BitTorrent file-sharing protocol. CP also alleged that Glover was a serial infringer of copyrights in adult content stating that agents for CP had observed him infringing on multiple copyrighted works involving adult content.

In the complaint, CP’s attorneys listed counts of copyright infringement, civil conspiracy and contributory infringement. CP sought statutory damages of $150,000 under the Copyright Act, 17 U.S.C. § 504 for Glover’s alleged willful infringement of CP’s copyright. CP also asked the court for attorneys’ fees and costs of $1,425 under 17 U.S.C. § 505, for a total judgment of $151,425. Glover did not respond to the complaint.

Because he had failed to plead or otherwise defend in this action, despite having been properly served with a summons and a complaint, Judge Jane Magnus-Stinson ordered an entry of default against Glover for $151,425, the full amount requested.

Practice Tip: When a defendant fails to appear to address assertions of wrongdoing made by a plaintiff, the court takes as true all of the plaintiff’s well-pled allegations. On Friday, we blogged about a default-judgment case wherein the defendant was ordered by the court to pay $20,000 for illegally downloading copyrighted material. As the Glover case shows, however, damages for illegally downloading copyrighted material can be much higher.

August 16, 2013

Default Judgment of $20,000 Granted in Copyright Infringement Case Involving BitTorrent

By Overhauser Law Offices, LLC

Indianapolis, Indiana —The Southern District of Indiana has granted a default judgment to Malibu Media, LLC of Los Angeles, California in its lawsuit against Robert Johnson of Indianapolis, Indiana for copyright infringement of the work “Pretty Back Door Baby.”

In its complaint, Malibu Media alleged that Johnson and others directly and contributorily infringed its copyrighted work when they downloaded and disseminated without authorization, all or a portion of a movie owned by Malibu Media entitled “Pretty Back Door Baby” using BitTorrent, a peer-to-peer file sharing protocol. The initial complaint was served upon eleven defendants but was later severed. Discussed in this opinion are the allegations, findings and judgments against Johnson only.

Malibu Media served Johnson with a summons and complaint on March 8, 2013. Johnson did not respond. On April 12, 2013, default was entered as to Johnson by Southern District of Indiana Judge William T. Lawrence. By virtue of this entry of default, it was established as a factual matter that Johnson had uploaded and downloaded all or a portion of the copyrighted work without authorization, and had also enabled countless unknown others to obtain the work in the process.

In the current default-judgment opinion, the court addressed requests by Malibu Media for an injunction, for damages, for attorney’s fees and for costs.

The injunction sought asked the court to prohibit Johnson “from directly, contributorily or indirectly infringing [Malibu Media’s] rights under federal or state law in the Work, including, without limitation, by using the internet, BitTorrent or any other online media distribution system to reproduce (e.g., download) or distribute the Works, or to make the Work available for distribution to the public, except pursuant to a lawful license or with the express authority of [Malibu Media].” The court held that such an injunction was simply a mandate that Johnson follow copyright laws and that the injunction was therefore unnecessary.

The court also denied Malibu Media’s request for attorneys’ fees and costs, noting that the fees submitted seemed to reflect legal work done not only in the furtherance of the lawsuit against Johnson, but also seemed to pertain to other related lawsuits involving the previously joined defendants. As a result of these ambiguities, the court denied Malibu Media’s request for costs and attorney’s fees but indicated that it would be willing to entertain such motions upon the entry of final judgment as to all defendants in related cases.

Finally, Malibu Media sought statutory damages in the amount of $20,000. The court cited “Congress’s recognition of the ‘disturbing trend’ of internet piracy” and found that amount to be just under the circumstances.

Practice Tip:

Deciding to simply ignore a complaint, as Robert Johnson apparently did, can be a costly error. Failing to present the defendant’s version of the facts and arguments results in the court considering only the plaintiff’s side of the story. Here, because the defendant chose to leave the complaint unanswered, the well-pled allegations of the plaintiff relating to liability were taken as true.

After the entry of default judgment, the court then conducted an inquiry to ascertain the amount of damages with “reasonable certainty.” Again, in such circumstances, it serves a defendant well to plead his case — to present the court with reasons that the plaintiff should not get 100% of what he requests.

Under 17 U.S.C. § 504(c)(1), a copyright owner may elect actual or statutory damages. Statutory damages range from a sum not less than $750 to not more than $30,000. The determination of the exact amount is left to the discretion of the court. In this case, Malibu Media asked the court for $20,000 and the court, having no arguments from the defendant to suggest that this was excessive, granted the entire amount.

Overhauser Law Offices, the publisher of this website, has represented several hundred persons and businesses regarding copyright infringement and similar matters.

August 15, 2013

Consumer Health Information Sues Amylin and Eli Lilly for Copyright Infringement of Patient Education Materials

By Overhauser Law Offices, LLC

Indianapolis, Indiana — Copyright lawyers for Consumer Health Information Corp. (“CHIC”) of Virginia sued Amylin Pharmaceuticals, Inc. and Amylin Pharmaceuticals, LLC (collectively, “Amylin”), both of Los Angeles, California and Eli Lilly & Co. (“Lilly”) of Indianapolis, Indiana (collectively, “Defendants”) alleging copyright infringement of works that CHIC created for Defendants’ use.

CHIC is an entity with expertise in patient engagement and patient-adherence strategies, health literacy and patient education program development for prescription drugs, over-the-counter products and medical devices.

Amylin and Lilly are primarily engaged in the research, development, manufacture, marketing and sale of pharmaceutical medicines and devices. In 2005, as part of a joint venture, they introduced the pharmaceutical drug Byetta to the marketplace. Byetta is an injectable prescription medicine that may improve blood-sugar control in adults with type 2 diabetes mellitus. As part of this joint venture, CHIC asserts that Amylin and Lilly agreed to share in the costs incurred and profits derived from Byetta.

In its copyright complaint, CHIC’s intellectual-property counsel states that, after the launch of Byetta, Defendants experienced poor sales as a result of poor patient compliance. CHIC asserts that patients had a difficult time understanding the materials that came with their medication and, thus, had a difficult time administering the drug properly. Many patients stopped taking Byetta because of these difficulties. As a result, patients stopped re-filling their Byetta prescriptions and sales of Byetta were poor.

CHIC contends that, in November 2005, Amylin and Lilly contacted CHIC to develop a strategy to improve the sales of Byetta by improving patients’ understanding of how to use the medication and by motivating patients to stay in treatment. A contract for the work was proposed by CHIC but not immediately approved by Defendants. Amylin and Lilly provided additional related projects to CHIC between December 2005 and mid-March 2006 and CHIC indicates in its complaint that it completed these projects.

CHIC asserts that, by mid-March 2006, it still had not been paid. It threatened to stop work until its proposal was approved and payment for all past work on the patient-education project was received. In response, Amylin and Lilly partially approved CHIC’s proposal. They, however, apparently demanded that a different version be signed and insisted that CHIC agree to Defendants’ terms, as outlined in their Master Service Agreement (“MSA”), regarding the assignment of copyrights.

The complaint states that, by this time, CHIC had expended significant time and expenses in furtherance of the Byetta project. CHIC claims that it was in jeopardy of imminent financial ruin if Amylin and Lilly did not pay for the services already rendered and that Defendants refused payment unless and until CHIC signed Defendants’ MSA. CHIC contends that it had little choice but to execute the MSA, which it did in March 2006.

In Section 4(a) of the MSA, the parties purported to designate CHIC’s creation of the patient-education materials as works made for hire under 17 U.S.C. § 101 and, in turn, CHIC purported to assign its interest in the work-for-hire copyrights to Defendants.

CHIC contends, however, that the patient education materials which it created did not qualify as works for hire, stating that the patient education materials were not “instructional texts” or “textbook materials.” Moreover, it states that the materials were not used and were not designed to be used in “systematic instructional activity” or as part of a “curriculum.” Finally, it asserts that the materials were not part of a teaching method established by an educational institution or the government. Rather, it claims that the materials were prepared for general readership for use in marketing a pharmaceutical product commercially, both nationally and internationally. It concludes that, because the patient education materials did not qualify as works for hire, CHIC did not transfer any copyright interests to Defendants through section 4 of the MSA.

CHIC continues its assertions by claiming that, throughout the last seven years, Defendants have copied and used CHIC’s works in an effort to derive profits from the marketing and sale of Byetta. Defendants have earned gross profits in excess of several billions of dollars from the allegedly unauthorized use, copying, and publication of CHIC’s works. As such, CHIC contents that Defendants’ profits gained from the use, copy, and publication of CHIC’s works rightfully belong to CHIC.

In the complaint, copyright attorneys for CHIC allege a single cause of action: copyright infringement. CHIC asks the court for damages, attorneys’ fees, costs of court, and pre-judgment and post-judgment interest.

Practice Tip: What seems to have begun as a garden-variety contract dispute has been transformed into a copyright case which will presumably turn in no small part on the term of art “work made for hire.”

Under 17 U.S.C. § 101, a “work made for hire” is (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.

July 31, 2013

Riders Choice Sues Golden West Saddle Blankets for Declaratory Relief

By Overhauser Law Offices, LLC

Terre Haute, Indiana — Copyright lawyers for Riders Choice, LLC d/b/a Show and Tell Saddle Blankets (“Riders Choice”) and Loni Rhodes (“Rhodes”; collectively,”Plaintiffs”) of Center Point, Indiana sued for declaratory relief over allegations of copyright infringement made by Lori Heckaman (“Heckaman”) d/b/a Golden West Saddle Blankets (“Golden West” or “Defendant”) of Gainesville, Texas.

Riders Choice, sometimes operating as “Show and Tell Saddle Blankets,” makes and sells products related to horseback riding, including hand-woven saddle blankets with colorful geometric designs. Rhodes owns Riders Choice. Heckaman, doing business as Golden West Saddle Blankets, also makes and sells products related to horseback riding, including blankets with colorful geometric designs.

Intellectual property counsel for Heckaman sent two cease-and-desist letters to Rhodes and Riders Choice, the first on June 14, 2013 and the second on July 2, 2013. The first cease-and-desist letter asserted that the designs on Heckaman’s blankets were copyrighted and alleged against Rhodes and Riders Choice claims for copyright infringement based on Rhodes’s and/or Riders Choice’s manufacture, marketing and sale of its own blankets. The second cease-and-desist letter made similar allegations. Claims were also made against Rhodes and Riders Choice for business interference, unfair competition and misappropriation of trade secrets based on Rhodes’s and/or Riders Choice’s marketing of Riders Choice’s blankets and alleged copying of Golden West’s weaving and design methods.

Both cease-and-desist letters threatened Rhodes and/or Riders Choice with imminent litigation if Rhodes and/or Riders Choice did not comply with Defendant’s demands, the first by writing “we will have no choice but to advise our client to protect her interests by instituting a suit in a court of competent jurisdiction,” and the second by writing that although “Golden West prefers to resolve this matter without the necessity of court intervention, all necessary action will be taken if a voluntary agreement cannot be reached.” Both cease-and-desist letters demanded that Rhodes and/or Riders Choice stop marketing, selling and producing its blankets. Further, a July 3, 2013 e-mail threatened Rhodes and Riders Choice with imminent litigation by writing that if Rhodes and/or Riders Choice did not “refrain from promoting, marketing, producing, and selling saddle blankets,” Heckaman would have “no choice but to seek available remedies.”

In response, copyright lawyers for Riders Choice filed a complaint under the Declaratory Judgment Act. In the complaint, Plaintiffs assert that blankets with similar designs are widely produced and sold by third parties, that they did not believe that Heckaman had registered any of her designs with the U.S. copyright office, that the blankets Riders Choice sells are original works designed by Rhodes and that every blanket Riders Choice sells is unique in that no two blankets are sold with an identical pattern. They further asserted that Rhodes learned these methods from books and other publicly available materials unaffiliated with Heckaman and that Rhodes had never copied Defendant’s designs.

In the complaint, Plaintiffs ask for judgments of:

· Count I — No Copyright Infringement

· Count II — No Business Interference

· Count III — No Unfair Competition

· Count IV — No Misappropriation of Trade Secrets

Plaintiffs request that the court: (a) declare that Rhodes’s and Riders Choice’s blankets did not in the past and do not now infringe any of Defendant’s valid copyrights; (b) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in business interference against Defendant based on the sale, marketing or production of blankets; (c) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in unfair competition against Defendant based on the sale, marketing or production of blankets; (d) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in the misappropriation of trade secrets from Defendant based on the sale, marketing or production of blankets; (e) award to Plaintiffs their costs and attorneys’ fees.

Practice Tip:

As with a patentee who believes that his or her patent is being infringed, holders of copyrighted materials often will send a “cease-and-desist letter” — a letter demanding that the purported infringer cease infringing. To aid in convincing the accused infringer to meet its demands, the holder of the intellectual property may be tempted to use language such as plans of “instituting a suit” and seeking “court intervention,” as Defendant did here.

As this case demonstrates, this strategy may backfire. By using such language, the Defendant can create an “actual controversy” for purposes of the Declaratory Judgment Act. Thus, the party alleging infringement (the natural plaintiff in an infringement suit) may instead find itself being sued by the alleged infringer (the natural defendant), often in a jurisdiction that would not have been the first choice of the owner of the intellectual property.

One approach that may have yielded better results for Golden West might have been to approach the accused infringer with an offer to license the purportedly protected intellectual property. With carefully crafted language, such a proposal might have served to put Riders Choice on notice of Golden West’s belief that infringement was occurring without going so far as to create an “actual controversy” sufficient to support a lawsuit under the Declaratory Judgment Act.