Formally known as Thomas B. James or Thomas James, Tom James is an attorney at the Law Office of Tom James in Cokato, Minnesota. Copyright, trademark, business law, nonprofit organization, appeals and appellate practice. Admitted to practice in Minnesota, the Federal and 8th Circuit Courts of Appeals, and the United States Supreme Court. Also a continuing education instructor.
Jack Daniel’s Products claims trademark rights, including trade dress, in the distinctive shape and label of its whiskey product. VIP Products has made a dog toy called “Bad Spaniels.” It has a very similar shape and label. Jack Daniel’s sued VIP, asserting trademark infringement and dilution claims.
The district court ruled in favor of Jack Daniel’s, finding that the dog toy was likely to confuse consumers about the source of the product and tarnish the Jack Daniel’s brand. The Ninth Circuit Court of Appeals however, reversed. The dog toys, the Court ruled, are parody goods protected as expression by the First Amendment.
The Second, Seventh and Eighth Circuit Courts of Appeals have taken different approaches regarding the scope of First Amendment protection for parody goods. The Supreme Court granted certiorari to resolve the split in the circuits.
The Trademark Dilution Revision Act
The Trademark Dilution Revision Act expressly excludes parody from dilution liability. It applies, however, only when the challenged use is “other than as a designation of source for the person’s own goods or services.” 15 U.S.C. § 1125(c)(3)(A)(ii). Thus, the Act covers parody advertisements or other parodic references to a product in a magazine, movie or other traditional form of artistic or literary expression, but it does not reach situations where a parody mark is used as a designation of source.
Rogers v. Grimaldi
As discussed in a previous blog post, the Second Circuit Court of Appeals ruled, in Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989), that the use of a trademark in the title of a film or other artistic work is not actionable unless “the title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.” Id. at 999.
In the Jack Daniel’s case, the district court held that the rule articulated in Rogers is limited to the use of a trademark in the title of a film or other artistic work. The Ninth Circuit Court of Appeals did not agree that the rule is so limited.
The case squarely raises the question whether and to what extent the First Amendment insulates makers and sellers of parody goods from trademark liability.
A decision in this case will be coming in a few months. It is difficult to predict what it will be. Many legal scholars, I am sure, will frame the issue as whether the Court will choose to extend Grimaldi to parody goods, on one hand, or to limit the case to its facts, on the other. Another possibility, however, is that the Court might choose to disapprove Grimaldi altogether. As usual, we will just have to wait and see.
Wavy Baby Shoes test the limits of the First Amendment and trademark rights. Cokato Minnesota attorney Tom James explains what Vans v. MSCHF is about.
The owner of a trademark has the exclusive right to use it in commerce. The scope of the right is geographically limited, but if it is registered with the USPTO, then the owner’s exclusive right extends throughout the entire United States. The United States Constitution, however, also protects rights of speech and press freedom. What happens when these rights collide?
The U.S. Court of Appeals for the Second Circuit is now considering a case squarely raising that question, Vans v. MSCHF Prod. Studios, No. 22-cv-2156 (WFK)(RML), 20223 WL 1446681 (E.D.N.Y. April 29, 2022), argued, No. 22-1006 (2nd Cir. Sept. 28, 2022).
MSCHF is a New York art collective that creates and sells irreverent art products such as “Jesus shoes” and “Satan shoes.” It also allegedly created and sold about 4,000 pairs of what it calls “Wavy Baby” shoes, described as a parody of Van’s “Old Skool” skate shoes and the “digital shoes” that Van’s sells in computer games. MSCHF designed the shoe by applying a “liquify” filter to an image of an Old Skool shoe. The shoes are distributed with a warning that the consumer assumes the risk that the wavy sole may cause injury or death.
Vans sued MSCHF for trademark infringement. (Trade dress, including product design, can function as a trademark.) MSCHF asserted a First Amendment defense, arguing that Wavy Baby Shoes are protected parodic or artistic expression. The district court rejected the defense. An appeal to the Second Circuit Court of Appeals followed.
Nominative Fair Use
It is a longstanding principle of trademark law that merely mentioning or referring to another person’s trademark is not trademark infringement. This kind of use of a trademark, called nominative use, helps protect values central to the First Amendment. If people were not allowed to even mention another person’s trademark, then criticism and commentary about a company or its products and services would be severely hamstrung. Likewise, a photographer’s or artist’s ability to sell cityscape paintings and pictures would be severely hampered if including even a single company name or logo in it could open the artist to liability for trademark infringement.
Nominative use is a relatively easy concept to apply. If a trademark is used in a way that is not likely to confuse a consumer about the source of a product or service, then the use is not infringing. In most cases, nominative uses of trademarks are not likely to mislead any reasonable consumer about the source of a product.
Parody is another area where the First Amendment may trump trademark rights. It is an explicit statutory defense to a trademark dilution claim. Courts have used the First Amendment to extend the defense to infringement claims, too, provided certain conditions are met.
To qualify for protection, a parody product must convey two contradictory messages: (1) That it is the original; and (2) that it is not the original. That is to say, it must be sufficiently similar to the original that consumers understand the reference, but at the same time, it must also be sufficiently distinguishable that consumers are not likely to think it comes from the same source as the original. To work as parody, the second message must communicate some articulable element of ridicule, mockery, or irreverent commentary. This is consistent with the traditional trademark infringement “likelihood of confusion” requirement. A seller of a trademarked product is not likely to also sell products that mock, ridicule or make fun of the product and/or its seller.
In this case, the district court found that the Wavy Baby shoes satisfied the first element of a parody: They conveyed enough similarity to the Old Skool trademark to enable consumers to understand the reference. The court, however, found that the second message had not been communicated clearly enough, that the shoes and their packaging had failed to clearly communicate a satirical message.
In reaching its decision, the court found it significant that the Wavy Baby shoe is a “competing product” that does not “incorporate clear puns and parodic references.”
The main point MSCHF is raising on appeal is that the district court should have applied the rule announced in Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989). In that case, Ginger Rogers sued Grimaldi and MGM for producing and distributing a movie called Ginger and Fred. The movie was about a different pair of dancers who had been compared to Fred Astaire and Ginger Rogers. The Second Circuit Court of Appeals held that the use of the phrase was artistically expressive and therefore not actionable as trademark infringement. MSCF contends that Wavy Baby Shoes, too, are artistically expressive, and that Rogers, therefore, should apply.
Vans argues that Rogers is distinguishable because that case did not involve infringing trade dress used to sell goods that compete with the trademark owner’s goods. “Since Rogers was decided, the courts in the Second Circuit have uniformly limited its application to expressive works such as books, movies, and video games.” Vans Br. at 31, Dkt. 75 (July 22, 2022). Vans maintains that “[t]here is no basis under Rogers or later authority to expand this holding to a commercial product that incorporates a competitor’s trademarks and trade dress,” id. at 33.
Assuming the Court does not disturb the district court’s anti-parody findings, the Court will need to decide whether the Rogers v. Grimaldi test should be extended to products, on one hand, or limited to traditional expressive works (e.g., books and movies), on the other. In any event, it is hoped that the Court will take the opportunity to clarify the relationship between parody goods doctrine and the Rogers test.
Contact attorney Tom James
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The Internet has created an existential crisis for copyrights. Well, not really. It has impelled some people to consider, for the first time, the rationale for copyrights and the legal protection of them. That sounds a lot less dramatic and thrilling than “existential crisis,” though.
The two frameworks
There are two basic frameworks for thinking about copyright law: deontological and utilitarian. Deontological approaches focus on rights and duties. Utilitarian approaches focus on the usefulness of copyrights in promoting or accomplishing some social good.
In simpler terms, we can think of copyrights as deserving of protection because respecting individual property rights is a moral good. That is the deontological way of thinking about them. On the other hand, we can think about protecting copyright in terms of how protecting copyrights benefits society – the greatest happiness for the greatest number of people. That is the utilitarian approach.
Generally speaking, European countries have tended toward the deontological, while the United States has tended toward the utilitarian. Droites de suite, the rights of an artist to attribution and integrity (the rights to be credited as author and to the preservation of the integrity of a created work) originated in Europe. The United States Constitution, by contrast, declares that the purpose of giving authors and inventors exclusive rights is simply “[t]o promote the Progress of Science and useful Arts,” (U.S. Const. Art. I, sec. 8(8)), a clearly utilitarian expression of the rationale for protecting intellectual property.
These are just generalities, of course. The amendment of the U.S. Copyright Act to include protection for the integrity and attribution rights of visual artists is an example of how the European approach has been “coming to America.” At the same time, European policy-makers are increasingly influenced by utilitarian ways of thinking.
The difference between the two approaches comes into sharp relief in the area of Fair Use. Viewing copyright as a personal right and infringement as a moral wrong, the concept of “fair use” is difficult to justify. Instead, resort is usually had to utilitarianism, the idea that infringement of individual rights can be justified if it makes a lot of people happier (the “public benefit” consideration in fair use analysis.)
The nature of the right
German law developed on a view of copyright as a personality right. Personality rights are recognized to some extent in American law, too. In the United States, however, only a person’s name, voice and likeness are considered to be elements of a person’s “personality.” The products of one’s mind, the works the person creates, are not. Those things are considered property rights in the United States.
Among those who view copyrights as property rights, there is a divide between those who view them as natural rights and those who view them solely as creatures of positive law. John Locke is the most celebrated proponent of the natural rights theory. Proponents of the positive law approach (as I call it, for purposes of this blog post) do not view authors’, artists’ and inventors’ rights as inalienable natural rights, but as rights the law will protect if and only to the extent that a government sees fit to create a law protecting them.
Proponents of the view that copyrights are solely the creatures of positive law, of course, measure the value of copyright protection in terms of public benefit. If, for example, they think that an Internet free from the restrictions of prohibitions against copyright infringement will make a great number of people happy (“public benefit”), then they will likely advocate for laws and interpretations of laws favoring a broad and expansive “fair use” exception to copyright protection.
The slack of utilitarian tension
Differences of opinion can arise among those who adopt the utilitarian approach to copyright because a variety of conflicting arguments about what will best promote the greatest happiness for the greatest number of people exist.
On one hand, there is the incentive theory expressed in the Intellectual Property Clause of the U.S. Constitution. The idea expressed there is that giving creators rights in their creations will ultimately lead to scientific and artistic progress. Protecting copyrights might not be enough to incentivize creativity but failing to protect them can be a disincentive to creative effort.
Conflicting with this, there is the argument that allowing more people to access and use other people’s ideas and inventions facilitates progress. This is the thought behind Open Source and other approaches focusing on the benefits of social collaboration in the development of ideas and inventions.
Anyhoobie, that is the nutshell version of the philosophy of copyright. Feel free to explore the subject in greater depth on your own. Philosophy can be fun, right? Right?
Who Am I?
That, too, is a great philosophical question. In my case, it is easy to answer. Cokato, Minnesota attorney Thomas James.
The U.S. Supreme Court will soon hear Andy Warhol Foundation for the Visual Arts v. Goldsmith. Attorney Thomas James explains what is at stake for photographers
In a previous post, I identified the Second Circuit’s decision in Andy Warhol Foundation for the Visual Arts v. Goldsmith as one of the three top copyright cases of 2021. It has since been appealed to the United States Supreme Court. Oral argument is scheduled for October 12, 2022.
The underlying facts in the case, in a nutshell, are these:
Lynn Goldsmith took a photograph of Prince in her studio in 1981. Later, Andy Warhol created a series of silkscreen prints and pencil illustrations based on it. The Andy Warhol Foundation sought a declaratory judgment that the artist’s use of the photograph was “fair use.” Goldsmith counterclaimed for copyright infringement. The district court ruled in favor of Warhol and dismissed the photographer’s infringement claim.
The Court of Appeals reversed, holding that the district court misapplied the four “fair use” factors and that the derivative works Warhol created do not qualify as fair use.
The United States Supreme Court granted the Warhol Foundation’s certiorari petition.
In this case, the U.S. Supreme Court is being called upon to provide guidance on the meaning and scope of “transformative use” as an element of fair use analysis. At what point does an unauthorized, altered copy of a copyrighted work stop being an infringing derivative work and become a “transformative” fair use?
In the chapter on copyright in my book, E-Commerce Law, I predicted a case like this would be coming before the Supreme Court at some point. As I noted there, a tension exists between the Copyright Act’s grant of the exclusive right to authors (or their assignees and licensees) to make modified versions of their works (called “derivative works”), on one hand, and the idea that making modified versions of copyrighted works is transformative fair use, on the other. The notion that making changes to a work that “transform” it into a new work qualifies as fair use obviously threatens to swallow the rule that only the owner of the copyright in a work has the right to make new works based on the work.
Lower courts have not been consistent in their interpretations and approaches to the transformative use concept. The Warhol case presents a wonderful opportunity for the Supreme Court to provide some guidance.
Campell v. Acuff-Rose Music
The “transformative use” saga really begins with the 1994 case, Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994). Unable to secure a license to include “samples” (copies of portions) of the Roy Orbison song, “Oh Pretty Woman” in a new version they recorded, 2 Live Crew proceeded to record and distribute their version with the unauthorized sampling anyway, invoking “fair use.”
In a decision that took many attorneys and legal scholars by surprise, the Supreme Court held that 2 Live Crew did not need permission to copy and distribute the work even though the work they created involved substantial copying of the Orbison song. To reach this conclusion, the Court propounded the notion that copying portions of another work — even substantial portions of it — may be permissible if the resulting work is “transformative.” This, the Court held, could hold true sometimes even if the newly created work is not a parody of the original.
In the years that followed, courts have struggled to determine what is a “transformative” modification of a work and what is a non-transformative modification of it. Some courts have demonstrated a willingness to apply the doctrine in such a way as to nearly nullify the exclusivity of an author’s right to make modified versions of his or her works.
Courts have also demonstrated a lack of consistency with respect to how they incorporate and apply “transformativeness” within the four-factor test for fair use set out in 17 U.S.C. Section 107.
Why It Matters
This might seem like an arcane legal issue of little practical significance, but it really isn’t. People are already pushing the transformative use idea into new realms. For example, some tattoo artists have claimed in court filings that they do not need permission to make stencils from photographs because copying a photograph onto skin is a “transformative use.”
Of course, making and distributing exact copies of a photograph for sale in a stream of commerce that directly competes with the original photograph should not be susceptible to a transformative fair use claim. But how far can the claim be carried? If copying a photograph onto somebody’s skin is “transformative” use, would copying it onto somebody’s shirt also be “transformative”?
Clarity and guidance in this area are sorely needed. Hopefully the Supreme Court will take this opportunity to furnish it.
Thomas James (“The Cokato Copyright Attorney”) explains how Hachette Book Group et al. v. Internet Archive, filed in the federal district court for the Southern District of New York on June 1, 2020, tests the limits of authors’ and publishers’ digital rights in their copyright-protected works.
The gravamen of the complaint is that Internet Archive (“IA”) allegedly scanned books and made them freely available to the public via an Internet website without the permission of copyright rights-holders. Book publishers filed this lawsuit alleging that IA’s activities infringe their exclusive rights of reproduction and distribution under the United States Copyright Act.
As of this writing, the case is at the summary judgment stage, with briefing currently scheduled to end in October, 2022. Whatever the outcome, an appeal seems very likely. Here is an overview to bring you up to speed on what the case is about.
The undisputed facts
Per the parties’ stipulation, the following facts are not disputed:
The case involves numerous published books which the publishers who filed this lawsuit (Hachette Book Group, HarperCollins, Penguin Random House, and John Wiley & Sons) have exclusive rights, under the United States Copyright Act, to reproduce and distribute.
Internet Archive and Open Library of Richmond are nonprofit organizations the IRS has classified as 501(c)(3) public charities. These organizations purchased print copies of certain books identified in the lawsuit.
The core allegations
The plaintiffs allege that IA obtains print books that are protected by copyright, scans them into a digital format, uploads them to its servers, and then distributes these digital copies to members of the public via a website – all without a license and without any payment to authors and publishers. Plaintiffs allege that IA has already scanned 1.3 million books and plans to scan millions more. The complaint describes this as “willful digital piracy on an industrial scale.”
First sale doctrine
One justification that is sometimes advanced for making digital copies of a work available for free online without paying the author or publisher is the so-called “first sale” doctrine. This is an exception to copyright infringement liability that essentially allows the owner of a lawfully acquired copy of a work to sell, transfer or lend it to other people without incurring copyright infringement liability. For example, a person who buys a print edition of a book may lend it to a friend or sell it at a garage sale without having to get the copyright owner’s permission. More to the point, a library may purchase a copy of a print version of a book and proceed to lend it to library patrons without fear of incurring infringement liability for doing so.
The doctrine does not apply to all kinds of works, but it does generally apply to print books.
The first sale doctrine only provides an exception to infringement liability for the unauthorized distribution of a work, however. It does not provide an exception to liability for unauthorized reproduction of a work. (See 17 U.S.C. § 109.) Scanning books to make digital copies is an act of reproduction, not distribution. Accordingly, the first sale doctrine does not appear to be a good fit as a defense in this case.
“Controlled digital lending”
Public libraries lend physical copies of the books in their collections to library patrons for no charge. Based on this practice, a white paper published by David R. Hansen and Kyle K. Courtney makes the case for treating the distribution of digitized copies of books by libraries as fair use, where the library maintains a one-to-one ratio between the number of physical copies of a book it has and the number of digital “check-outs” of the digital version it allows at any given time.
The theory, known as controlled digital lending (“CDL”), relies on an assumption that the distribution of a work electronically is the functional equivalent of distributing a physical copy of it, so long as the same limitations on the ability to “check out” the work from the library are imposed.
Publishers dispute this assumption. They take the position that there are important differences between e-books and print books. They maintain that these differences justify the distribution of e-books under a licensing program separate and distinct from their print book purchasing programs. They also question whether e-books are, in fact, distributed subject to the same limitations that apply to a print version of the book.
Whether a particular kind of use of a copyright-protected work is “fair use” or not requires consideration of four factors: (1) the nature of the work; (2) the character and purpose of the use; (3) the amount and substantiality of the portion copied; and (4) the effect of the use on the market for the work.
Supporters of free access to copyrighted works for all tend to focus on the “character and purpose” factor. They can be relied upon to argue that free access to literary works is a great benefit to the public. Authors and publishers tend to focus on the other factors. In this case, it seems possible that the factors relating to the amount copied and the effect of the use on the market for the work could weigh against a finding of fair use.
The federal district court in this case is being called upon to evaluate those factors and decide whether they weigh in favor of treating CDL – or at least, CDL as IA has applied and implemented it – as fair use or not.
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The Cokato Copyright Attorney (Minnesota lawyer Thomas B. James) will be following this case closely. Subscribe for updates as the case makes its way through the courts.
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Need help registering a copyright or trademark, or with a copyright or trademark problem? Contact Cokato, Minnesota attorney Tom James.
It happened. “The” is a registered trademark now. The USPTO issued a registration certificate for the word “The” to Ohio State University (Sorry; the Ohio State University) on June 21, 2022. How did this happen, and what does it mean?
The The Saga
The legal quest to own “the” began on May 6, 2019, when Marc Jacobs Trademarks, LLC (MJT) filed an application with the United States Patent and Trademark Office (USPTO) to register the word as a trademark for use on clothing, bags and similar merchandise. MJT claimed a first use date of December 3, 2018.
On August 8, 2019, the Ohio State University filed its own application to register the word as a trademark for use on clothing. The university claimed first use in commerce at least as early as August, 2005.
Due to the earlier filed MJT application, the examining attorney issued an office action to the Ohio State University. It referenced the earlier filed MJT application as a potential bar to registration of the Ohio State University claim. The application was suspended pending the outcome of MJT’s “the” application.
MJT’s application was published for opposition on October 27, 2020. The Ohio State University filed an opposition. The Ohio State University alleged that;
[MJT’s THE mark] “so resembles Ohio State’s THE mark as to be likely, when used on or in connection with the applied-for goods, to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association of MJT with Ohio State, or as to the origin, sponsorship or approval of the applied-for goods or commercial activities by Ohio State, all in violation of § 2(d) of the Trademark Act….”
Opposition of The Ohio State University in re: TM Application No. 88416806
It appears that the parties have reached a cooperative use agreement of some kind. The opposition has been withdrawn and the opposition proceeding has been terminated.
Ornamentation vs. The Registered Trademark
Both companies have faced objections from examining attorneys that their uses of the word “the” on clothing were ornamental. A decorative use of a word, symbol, design, etc. that does not function as an identifier of the source of a particular product or service is not sufficient to satisfy the “use in commerce” requirement for trademark registration.
After the USPTO rejected the MJT application in March, 2020, MJT filed a successful request for reconsideration. That led to the publication for opposition to which the Ohio State University responded. The USPTO issued a Notice of Allowance on October, 2021. The MJT application is still pending in the USPTO.
The Ohio State University initially encountered the same kind of resistance from the USPTO. The university remedied the problem, however, by showing that it wasn’t just using the word ornamentally; it was also putting it where trademarks usually go, such as inside the shirt at the back of the neck and on its website.
That satisfied the examiner. The mark was published for opposition, and on June 21, 2022 a registration certificate issued.
Scope of The Registered Trademark
Does this mean nobody can use the word “the” in a trademark anymore? No.
To begin with, the Ohio State University has only registered it in Class 25. Class 25 consists of sports and collegiate athletics clothing.
The ultimate question, in all cases, is whether another company’s use of the word would be likely to confuse consumers as to the origin of a product or service. The Tax Curative Institute should have very little to fear from the Ohio State University’s registration of “the” as a trademark for collegiate and athletic clothing.
What about displaying the word on clothing, though? Does the Ohio State University’s ownership of the “the” trademark for clothing mean that no one can display the word “the” on a T-shirt now?
Not necessarily. Purely ornamental uses of the word should not expose a T-shirt seller to a risk of infringement liability. For example, a company selling T-shirts emblazoned with the band name “The Slants” should not have to worry about being sued by the Ohio State University.
Of course, unless they have a license from The Slants, they might encounter some pushback for using the band’s name. That’s because the band owns a trademark in their name (“Slants”). Merely using the word “the,” however, should not be a problem. Consumers are not likely to think that every shirt they come across originates from The Slants merely because it has the word “the” on it.
The Copyright Claims Board (aka “Copyright small claims court”) opened on schedule, on June 16, 2022. Echion CLE is offering educational courses.
The Copyright Claims Board (“copyright small claims court”) launched today (June 16, 2022), on schedule.
The New Copyright Claims Board
The new “copyright small claims court” is not really a court. It is an administrative tribunal. It will, however, function very much like a court.
Court rules, such as the Federal Rules of Civil Procedure and the Federal Rules of Evidence, do not directly apply.
The new tribunal was created by the CASE Act of 2020. The filing fee is considerably lower than court filing fees. It is empowered to hear and decide copyright infringement and DMCA notification misrepresentation claims. Claims in excess of $30,000 (exclusive of attorney fees and costs) are not eligible.
Some worry it will give copyright trolls more ammunition. There are, however, some provisions in the Act that offer protections from copyright trolls.
“Copyright Small Claims Court” CLE
I will be teaching a CLE webinar for attorneys and paralegals about this new tribunal – jurisdiction, applicable law, procedure, forms (claim, response and counterclaims), evidence, hearings, appeals, potential constitutional challenges, and more.
This course has been approved for 2.0 attorney CLE credits by the Minnesota Board of Continuing Legal Education. Because Minnesota is an approved jurisdiction, attorney CLE credits may also be available in Alaska, Arizona, Arkansas, Connecticut, Florida, Guam, Hawaii, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Northern Mariana Islands, Wisconsin, and other jurisdictions. Check the Echion CLE course page for information and updates.
Paralegal CLE credits:
NALA has approved this course for 2.0 paralegal continuing education credits.
What could the new Copyright Claims Board (“copyright small claims court”) mean for you?
The Copyright Claims Board is scheduled to begin accepting claims on June 16, 2022. What could this mean for you?
The Purpose of the Copyright Claims Board
Due in large part to the Internet, copyright infringement is rampant. In many cases, however, enforcing copyrights in federal court is prohibitively expensive.
To begin with, there is a $350 filing fee and an additional $52 administrative fee, for a total of $402, just to get a case underway. After that, there will be subpoenas, depositions, witness fees, transcript costs, etc. Moreover, because copyright litigation is complex, litigants usually find it necessary to hire an attorney. Add these additional expenses to the $402 filing fee, and a copyright owner can be looking at paying thousands of dollars just for a chance at enforcing his or her rights.
Under these circumstances, many infringement victims reasonably conclude that enforcing their rights against an infringer does not make good financial sense.
Congress enacted the CASE Act of 2020 to address the problem by creating an administrative tribunal that will hear small infringement claims. The new tribunal will have a lower filing fee and is supposed to be simple enough for a person to use without needing a lawyer.
Do you need to worry?
The definitions of copyright and copyright infringement are broad enough that everybody has probably been guilty of it at one time or another. A fair number of people have probably infringed copyrights multiple times. It is possible, for example, for an email message to be protected by copyright, so forwarding it without permission could be infringement. Photographs, memes, music, videos, essays, etc. are all potentially protected by copyright. Copying and sharing them on social media without permission could be infringement.
In some cases, a defense like fair use or implied license might provide some protection. Many people, however, misunderstand these defenses. They often interpret them much more broadly than is warranted.
The main reason copyright owners have not been suing infringers is not that they believe the infringers may have a valid defense. It’s that the cost of litigation has been too high, relative to the amount of damage suffered. The CASE Act is designed to reduce those costs considerably. Consequently, Internet users and other everyday people would be well advised to be a lot more cautious about sharing other people’s content.
A lot of people have the misimpression that so long as they are not making a profit from infringing a copyright, they are safe from a lawsuit. This is not true. Neither profit nor intent to profit needs to be proven in order to win a copyright infringement case. A copyright owner does not have to prove actual damage. He or she can request, and be awarded, statutory damages instead. These are damages that are authorized by statute without need for proof that the infringement caused any actual harm.
The CASE Act authorizes the CCB to make an award of up to $15,000 statutory damages per work when a timely registered copyright has been infringed, and up to $7,500 per work when an unregistered one has been infringed. (The total that may be awarded in one proceeding is $30,000.)
Because CCB proceedings are voluntary, you have the right to opt out if you are served a CCB claim. The copyright owner is then free to file the claim in federal court. The range of remedies is broader and the amount of damages that may be awarded is higher in federal court.
Deciding whether or not to opt out will require careful consideration of the strength of the claim(s) and defense(s), the likely costs that each side will incur, and the level of exposure to damages and attorney fee awards in each kind of proceeding.
Why everyone should learn about the CCB
If you are a copyright owner, there is a very good chance that people have been infringing it, especially if you have displayed or published it online. The new CCB might make it feasible for you to do something about it even if you do not have the financial resources to file an infringement lawsuit in court.
If, like nearly everybody, you have shared a photograph, drawing, meme, music, recording, story, article, commentary, or email message that someone else created, without their permission, there is a chance that somebody may file a CCB claim against you.
If you are an attorney, you should know about all available avenues of recourse for copyright owners whose works have been infringed so that you can advise and represent your clients competently. Because more everyday people are likely to sue and be sued for copyright infringement than ever before, even attorneys whose primary area of practice is not intellectual property law should familiarize themselves with this new agency and the claim process.
I will be teaching courses on the new Copyright Claims Board and the new “small claims” process for copyright infringement. Some will be for non-attorneys; others will be for attorneys and paralegals. The first of these is being offered for continuing legal education credit for attorneys and paralegals through Echion CLE. It is an online webinar that will be offered on two different dates:
Dubbed the “copyright small claims court,” the new administrative tribunal is a voluntary process for claims totaling up to $30,000. Although located in Washington, DC, proceedings will be conducted entirely electronically and remotely. It will not be necessary to travel to file or attend a hearing.
A party who is served a claim that has been filed with the CCB has a right to opt out. The party filing the claim then has the right to file the claim in court instead. The statute of limitations period is tolled while a CCB claim is pending.
The CCB has the power to issue a determination by default if a party fails to respond to a properly served claim or fails to participate in the proceeding without exercising the opt-out right. The CCB may also dismiss or issue a default determination against a claimant who fails to prosecute the claim, misses a deadline, or otherwise fails to comply with board rules.
Although registration is required before a final determination can be issued, it is not necessary to wait until an application has been either granted or denied before filing a claim. It is enough if an application to register the copyright has been filed.
Limitation on remedies
Total damages awarded cannot exceed $30,000. A claimant may elect either statutory damages, on one hand, or actual damages or lost profits on the other. A respondent may file a counterclaim, provided it is related to the original claim.
The CCB does not have the power to issue injunctions. It can, however, include in its determination a requirement that a party stop or modify certain activities if the party has agreed to do so.
Attorney fees and costs are not recoverable unless the other party has acted in bad faith. There is a $5,000 cap if the other party is represented by an attorney. Otherwise, the cap is $2,500. In some extraordinary circumstances, a higher amount may be awarded.
Review and appeal of CCB decisions
If you disagree with a CCB determination, review is available through:
Request for CCB reconsideration
Request for review by the Register of Copyrights
Judicial review is available only under limited circumstances.
If an infringer fails to pay the amount the CCB has ordered, the claimant may bring an action in federal district court to enforce payment.
Registration, forms and handbook
The CCB promises to have forms, handbook and the ability to begin registering users publicly available by June 16.
The anthropomorphic machine Arthur C. Clarke envisioned in his 1968 sci-fi classic, 2001: A Space Odyssey, is coming closer to fruition. If you hop online, you can find AI-generated music in the style of Frank Sinatra (“It’s Christmas time and you know what that means: Oh, it’s hot tub time”); artwork; and even poetry:
People picking up electric chronic,
The balance like a giant tidal wave,
Never ever feeling supersonic,
Or reaching any very shallow grave.
Hafez, a computer program created by Marjan Ghazvininejad
Pop rock lyricists should be afraid. Very afraid.
Or should they? Could they incorporate cool lyrics like these into their songs without having to worry about being sued for copyright infringement?
A Recent Entrance to Paradise
The question whether copyright protects AI-generated material could be making its way to the courts soon. This year, the U.S. Copyright Office reaffirmed its refusal to register “A Recent Entrance to Paradise,” an image made by a computer program. Steven Thaler had filed an application to register a copyright in it. He listed himself as the owner on the basis that the computer program created the artwork as a work made for hire for him. The Copyright Office denied registration on the grounds that the work lacked human authorship.
The decision seems to be consistent with their Compendium of U.S. Copyright Office Practices, which states that the Office will not register works “produced by a machine or mere mechanical process” that operates “without any creative input or intervention from a human….” U.S. COPYRIGHT OFFICE, COMPENDIUM OF U.S. COPYRIGHT OFFICE PRACTICES § 602.4(C) (3d ed. 2021). Whether the Copyright Office is right, however, remains to be seen.
The Ninth Circuit has held that stories allegedly written by “non-human spiritual beings” are not protected by copyright. Urantia Found v. Kristen Maaherra, 114 F.3d 955, 957-59 (9th Cir. 1997). “[S]ome element of human creativity must have occurred in order for the book to be copyrightable,” the Court held, because “it is not creations of divine beings that the copyright laws were intended to protect.” Id.
Of course, if a human selects and arranges the works of supernatural spirit beings into a compilation, then the human may claim copyright in the selection and arrangement. Copyright could not be claimed in the content of the individual stories, however.
In Naruto v. Slater, 888 F.3d 418, 426 (9th Cir. 2018), the Ninth Circuit denied copyright protection for a photograph snapped by a monkey. That humans manufactured the camera and a human set it up did not matter. In the case of a photograph, pushing the button to take the picture is the “creative act” that copyright protects. According to the Ninth Circuit, that act must be performed by a human in order to receive copyright protection.
Copyright also cannot be claimed in configurations created by natural forces, such as a piece of driftwood or a particular scene in nature. Satava v. Lowry, 323 F.3d 805, 813 (9th Cir. 2003); Kelley v. Chicago Park Dist., 635 F.3d 290, 304 (7th Cit. 2011).
Half a century ago, when computer programs were a relatively new thing, Congress created the National Commission on New Technological Uses of Copyrighted Works (“CONTU”). Their charge was to study “the creation of new works by the application or intervention of  automatic systems of machine reproduction.” Pub. L. 93-573, § 201(b)(2), 88 Stat. 1873 (1974).
CONTU determined that copyright protection could exist for works created by humans with the use of computers. “[T]he eligibility of any work for protection by copyright depends not upon the device or devices used in its creation, but rather upon the presence of at least minimal human creative effort at the time the work is produced.” CONTU, FINAL REPORT 45-46 (1978).
In its decision on Thaler’s second request for reconsideration, the Office viewed this finding as consistent with the Copyright Office’s view at the time:
The crucial question appears to be whether the “work” is basically one of human authorship, with the computer merely being an assisting instrument, or whether the traditional element of authorship in the work (literary, artistic, or musical expression or elements of selection, arrangement, etc.) were actually conceived and executed not by man but by a machine.
U.S. COPYRIGHT OFFICE, SIXTY-EIGHTH ANNUAL REPORT OF THE REGISTER OF COPYRIGHTS FOR THE FISCAL YEAR ENDING JUNE 30, 1965, at 5 (1966).
In the Copyright Office’s view, a manuscript typed into a file using word processing software would be a work of human authorship, but a story created by a program that selects words on its own would not be.
Work made for hire
Thaler made a novel argument that the computer program made the work for him as a “work made for hire.” The Copyright Office rejected this claim, as well.
A work made for hire is one that is created in one of two ways: (1) by an employee within the scope and course of the employment; or (2) pursuant to an independent contract in which the parties explicitly agree that the work to be created is a “work made for hire.”
The problem here is that in both cases, a contract is required. Computers and computer software cannot enter into contracts. There are programs that can facilitate the process of contract formation between humans, but the programs themselves cannot enter into contracts. Computer programs, even autonomous ones, are not legal persons. Nadi Banteka, Artificially Intelligent Persons, 58 Hous. L. Rev. 537, 593 (2021) (noting that a legal person must be either an individual human or an aggregation of humans.)
AI systems for generating works typically operate by means of an algorithm that analyzes data and synthesizes output according to an algorithm. The creator of the system typically inputs a large volume of works of the kind sought to be generated as output. The program may then analyze the works as data, searching for identifying patterns. An algorithm to generate a song that sounds like a Frank Sinatra song, for example, might rely on an inputted database consisting of numerous Frank Sinatra songs. The algorithm might then instruct the computer to search for patterns like tempo, melodic phrasing, voice pitch and tone, instrument tones, commonly used words and phrases, rhyme patterns, and so on.
Copyright does not protect facts and information. Hence, databases do not receive copyright protection. Algorithms also do not receive copyright protection. They are ideas, not expressions. The source code used to communicate them may be protected, but the algorithms themselves are not.
Computer programs and screen displays
The Copyright Office generally deems the screen displays generated by a computer program to be expression capable of receiving copyright protection as such. In the United States, copyright in a screen display can be claimed in connection with the registration of a copyright claim in the software program.
The question, really, is: As between the programmer and the user, how do we determine which one “creates” a screen display? When do we say neither of them does? For example, a poetry-generating software programmer might direct the program to display words a user types in the form of a four-line verse in iambic pentameter that follows an A-B-A-B rhyme scheme and relies on other programmer-defined parameters to construct sentences around them. At what point along the continuum of specificity in the programming do we say that the output is or is not a product of the programmer’s creative mind? By the same token, how much input does the user need to provide in order to be considered an author of computer-generated work? Are there times when the programmer and user should be regarded as co-authors?
Alternatively, should we say, with the U.S. Copyright Office, that output generated by AI machines is not protected by copyright at all, that it is in the public domain? That would certainly seem to disincentivize innovation and creativity, contrary to the intent and purpose of the Copyright Clause in Article I of the U.S. Constitution.