Intellectual Property Law

Chapter 15 Lecture Notes

Major points addressed in the chapter include the following:

1. Courts and Congress continue to be faced with issues that were unimagined a few
years ago. Both struggle with the complexity and balance between protecting the
rights of authors and promoting the progress of science and useful arts.

2. Computer programs (including apps) and websites are acceptable for copyright
registration as literary works. Copyright protection extends to all of the copyrightable
expression embodied in a program but is not available for ideas, systems, algorithms,
etc.

3. Copyright protection extends to screen displays as well, if they possess copyrightable
material. Mere computer menus or blank forms are usually not protectable.

4. A single registration is sufficient to protect a computer program, including its related
screen displays and accompanying user manuals. The Copyright Office recommends
filing online, using Form eCO and uploading the deposit material (source code)
electronically.

5. Because computer programs often contain proprietary information and trade secrets,
the Copyright Office has developed alternative deposit requirements and allows trade
secret portions of the source code to be blocked out. Applicants reluctant to deposit
even blocked out materials can apply for a registration under the rule of doubt.
Copyrightability can later be determined by a court.

6. Placement of the notice of copyright for computer programs can be on printouts, at
the user’s screen or terminal at sign-on, or on a label affixed to the packaging.

7. Video game elements can be copyrightable as audiovisual works apart from the
underlying computer program.

8. Each separately published version of a computer program or website should be
separately registered (assuming it contains sufficient new or revised authorship).

9. Although copyright owners have exclusive rights to reproduce their works and
prepare derivative works based thereon, the Act contains special exceptions relating
to computer programs allowing a backup copy of the program to be made by a user
and allowing some modifications of programs for an owner’s own use, such as
improving the program or its speed. Such uses do not constitute infringement. Users
cannot, however, make copies of computer programs for commercial distribution.

10. Infringement of computer programs involves difficult issues, generally because the
issues are highly technical, unfamiliar, and complex. Thus, experts are often relied
upon rather than the ordinary observer referred to in other infringement actions.

11. If specific instructions in a computer program are the only means of accomplishing a
task, under the merger doctrine, another may use the program without infringing the
work. Moreover, hardware and software standards, specifications, and compatibility
requirements are unprotectable scènes à faire inasmuch as their expression is dictated
by external factors.

12. In determining infringement of computer programs, many courts use the abstractionfiltration-
comparison test.

13. Reverse engineering (disassembling a computer program to understand its functional
elements) may be a permissible fair use of a copyrighted work (where disassembly is
the only way to gain access to the ideas and functional elements embodied in a
computer program and there is a legitimate reason for seeking such access).

14. Under the first sale doctrine, once a lawful first sale of a copyrighted work occurs,
the purchaser is free to sell it or rent it to others. To prevent widespread loss of
revenue that would result if one person could buy a computer program and then sell it
to others, software developers implemented the practice of licensing rather than
selling their programs. The license is often called a shrink-wrap license inasmuch as
it comes into existence once the purchaser opens the shrink-wrap on a package.
Because the transaction is a license rather than a sale, no first sale doctrine concerns
are implicated.

15. Software that is licensed electronically is often referred to as having been effected by
a click-wrap transaction.

16. Shrink-wrap and click-wrap licenses are valid (just like other contractual agreements)
so long as their terms are not unconscionable. For click-wrap licenses, allowing users
to show assent to license terms by clicking “OK” or “I agree” before proceeding to
download material is critical.

17. Software piracy is a significant economic concern, internationally as well as in the
United States, causing loss of revenue to software makers. Software makers often join
associations that exist to educate the public and businesses about copyrights in
software and to locate infringers. They also offer rewards to those who report
verifiable instances of piracy.

18. Copyright protection exists for computer databases, which are usually compilations
(for example, Westlaw’s database of federal court cases), so long as there is original
authorship in the selection and ordering of the data. Congress has considered
legislation that would protect databases created through a significant investment of
time (contrary to Feist, which held that a phone directory that contained no original
authorship was unprotectable, even though it was created through substantial effort or
sweat of the brow). Many European countries provide protection to certain databases.

19. Because it is so easy to make electronic copies of works and transmit those works to
millions of people, the intersection of copyright and cyberspace communication
presents unique issues. Vigorous debate exists over the balance between the need for
free dissemination of material and the need of authors and artists to be protected.

20. The U.S. Trade Representative releases an annual report that includes a list of
“notorious markets” engaged in counterfeiting and piracy and a list of countries
placed on its Priority Watch List so the United States can attempt to work with these
countries to improve their IP protections.

21. Authors concerned about unauthorized reproduction and dissemination of their works
by electronic means can include notices with their works to remind users that further
reproduction or transmission is unauthorized and may constitute infringement.

22. A number of proposals have been advanced to protect works from unauthorized
reproduction and distribution over the Internet, including metering use, developing
secure encryption processes, and so forth.

23. Technologies used to protect digital works from unauthorized copying and
reproduction are called digital rights management and there are a wide variety of
these techniques used to deter piracy, including metering uses of copyrighted works,
installing encryption devices, making “one use” DVDs, using digital and audio
watermarks or “fingerprints,” and installing devices that monitor and track digital
uses.

24. Circumventing digital rights management devices or measures is forbidden under the
Digital Millennium Copyright Act.

25. In 1998 Congress enacted the Digital Millennium Copyright Act (DMCA) to expand
copyright protection for digital works. Some of the most critical provisions of the
DMCA are as follows:

• Prohibitions against acts that circumvent technological protection measures
• Provisions forbidding trafficking in products or technology that are used to
circumvent copyright protection measures
• Provisions forbidding removal or tampering with copyright management
information (for example, removal of digital or audio watermarks)
• Safe harbor provisions insulating online service providers (such as YouTube or
Yahoo!) from liability for acts such as transmitting or linking to unauthorized
content (if the provider meets certain criteria such as adopting policies to
terminate service of repeat offenders). These “takedown provisions” are highly
detailed, both for owners of copyrighted content and for the service providers.

26. Both civil and criminal penalties can be imposed for violations of the DMCA.

27. Some of the cases/issues that have arisen under the DMCA are as follows:

• Cases prohibiting the dissemination of DeCSS, a software program that enables
users to descramble the encryption code that protects DVDs
• A case immunizing eBay from liability for the sale of fake goods
• A case allowing circumvention of DRM methods for the purpose of testing,
studying, or correcting flaws
• A case holding that YouTube was entitled to the safe harbor provisions of the
DMCA because mere generalized knowledge (rather than particular knowledge)
that infringing activity was occurring on its site was not sufficient and because it
promptly removed infringing content after receiving takedown notices under the
DMCA
• Requirements imposed on radio stations to pay royalties when their broadcasts
(called webcasts) are transmitted over the Internet (a practice called streaming).
The Copyright Office has established royalty fees for such.

28. Sound recordings of pre-1972 music over the Internet or satellite radio may be played
without paying any royalties due to the fact that sound recordings were not protected
under federal law until 1976. (Nevertheless, both Pandora and SiriusXM paid money
in 2015 to broadcast the pre-1972 recordings.) Royalties must be paid for sound
recordings of post-1972 music played on those platforms.

29. Some of the most challenging cases and issues arise out of the widespread piracy of
music and movies over the Internet. The battle to stop music piracy is fought chiefly
by the Recording Industry Association of America (RIAA), and the battle to stop
movie piracy is fought by the Motion Picture Association of America (MPAA).

30. RIAA initially focused on file sharing services, such as Napster, which was ultimately
shut down. The RIAA then began pursuing individual users, such as college students,
and suing them for copyright infringement. In mid-2005, the Supreme Court held that
defendants Grokster and StreamCast were liable for copyright infringement because
they distributed devices with the object of promoting their use to infringe others’
copyrights. Grokster (and others) have thus stopped distributing their peer-to-peer
software. Some services have shut down and others have converted to subscription
services.

Other recent cases include the following:

• ReDigi. ReDigi was an Internet marketplace where users could sell digital content
to each other. The Southern District of New York held that there was no digital
first sale doctrine (such as the first sale doctrine that exists for printed material
such as books) that would allow the resale of digital content.
• Aereo. Aereo used tiny antennas to capture television signals, a practice the
Supreme Court held was infringement of the television broadcasters’ rights.
Aereo has filed for bankruptcy.
• Hotfile. Hotfile allowed users to store allegedly pirated movies in “cyberlockers,”
a practice held to be infringement. Hotfile has shut down.

After the Jammi Thomas-Rasset and Lime Wire cases (which the RIAA won, but
only after years of expensive litigation), the RIAA abandoned its policy of suing
individual infringers and has begun focusing on working with online providers to stop
piracy.

31. The music labels and movie industry have tried a variety of methods to thwart piracy,
including digital and audio watermarks, no-copy technology, dummy files, and
offering paid music and television/film subscription services. The industry has also
turned to Congress for help and many bills have been introduced to stop music and
movie piracy over the Internet.

32. A newer trend in copyright infringement litigation is to name numerous “Doe”
defendants and then use the discovery process to determine the actual identities of
these defendants. Courts appear to be scrutinizing these cases carefully and using
federal rules relating to joinder to weed out many of these cases.

33. The Family Entertainment and Copyright Act of 2005 affects the entertainment
industries in several ways: It imposes criminal penalties for camcording movies in a
movie theatre; in criminalizes uploading a movie before its commercial release; it
authorized copyright preregistration of certain works (such as movies); and it allows
private individuals to filter out profanity, violence, and other objectionable matter
from movies.

34. In mid-2011, the major Internet service providers (including AT&T and Comcast)
entered into an agreement called the Copyright Alert System with media and
entertainment companies such as the RIAA and the MPAA, by which the providers
agreed to adopt a graduated response plan to handle repeat copyright infringers. The
program is administered by the Center for Copyright Infringement. After several
“warnings” are issued, Internet service providers may engage in “mitigation”
measures, such as reducing the Internet speed of repeat offenders.
35. The Prioritizing Resources and Organization for Intellectual Property Act (PRO IP
Act) of 2008 created the new IP “Czar” or Intellectual Property Enforcement
Coordinator, increased civil penalties for copyright infringement, and allows for the
seizure and auctioning of any computer or network hardware used to facilitate a
copyright crime.

36. Under the NET Act, criminal penalties for copyright infringement have been
enhanced. The statute of limitations for criminal copyright infringement was recently
increased from three years to five years.

37. Some copyrighted works are called orphan works (because no copyright owner can
be found for them). Those who wish to use the works are burdened by the costs of
trying to locate the owners of the works. The Register of Copyrights has
recommended that Congress enact legislation so those who use orphan works are not
penalized if they have made reasonable efforts to locate the owner.

38. Ringtones in cell phones are subject to statutory licensing and thus can be used so
long as the statutory license fee is paid.

39. The Higher Education Opportunity Act requires that colleges that receive some
federal aid must implement some antipiracy procedures.

40. The White House favors legislation giving sound recording owners public
performance rights when their songs are played on terrestrial or AM/FM radio.

41. A number of pirate websites have been seized by the Immigration and Customs
Enforcement service.

42. Although legal documents (for example, court briefs) are likely subject to copyright
protection, use by others (such as Westlaw) is likely to be seen as a permissible fair
use.

43. Following are some new and cutting-edge copyright issues:

• The use of “thumbnails” displayed on a computer screen is generally permissible
• White hat hackers would like to be able to circumvent DRM for the purpose of
exposing security and other flaws in items such as cars
• Twitter, Facebook, and Pinterest postings are subject to ordinary or standard
copyright principles (although most Twitter postings will not qualify for copyright
protection due to their brevity).
• Live streaming apps likely violate copyright law; moreover, they likely violate the
terms of one’s ticket “contract” when one attends a concert or sporting event
• Using a 3D printer to reproduce another’s copyrighted work is an infringement
• News aggregators may violate copyright rights of others when they “scrape”
content or reproduce headlines from other sources. Most aggregators now enter
into licenses with others to use their content.

44. At the time of the writing of the text, ACTA (the Anti-Counterfeiting Trade
Agreement) had been finalized but not entered into force. It would require criminal
penalties for certain acts of counterfeiting and piracy.

45. The Second Circuit held in 2015 that the Google Books project (by which Google has
digitally scanned millions of print books) is a permissible fair use, primarily because
the use is highly transformative and the amount of material displayed (the “snippets”)
is relatively small. In 2016, the Supreme Court declined to hear an appeal in the
Authors Guild v. Google case, thus leaving the Second Circuit’s ruling intact.

46. A section of the DMCA, the Vessel Hull Design Protection Act, provides for
protection for original designs of boat vessel hulls. Vessel hull design protection
draws concepts from copyright and patent law. An application for registration must
be made with the Copyright Office within two years of the design first being made
public. The term of protection is ten years. Protection is not available for designs that
have received patent protection.

47. Semiconductor chips are protected under special statutes. Copyright statutes were
inadequate because copyright law does not protect useful articles (such as chips) and
patent law does not protect obvious inventions. Moreover, obtaining a patent is a
lengthy process and chips were often obsolete before patents for them were granted.

Thus, Congress enacted the Semiconductor Chip Protection Act in 1984, which
creates an entirely new form of intellectual property right in semiconductor chips, one
that is different from either copyright or patent law, although many of the concepts
relating to protection, registration, and infringement draw from copyright law.

48. The Semiconductor Chip Protection Act protects mask works (the stencils used to
etch, pattern, or encode an electronic circuit on a semiconductor chip). Protection for
a mask work commences on the date the mask work is registered with the Copyright
Office or the date on which it is first commercially exploited, whichever occurs first.
Protection lasts for ten years (assuming it is registered with the Copyright Office
within two years after commercial exploitation).

49. The concepts used to determine infringement of copyrights generally are applicable to
mask works.

50. Registration of a mask work is highly similar to that for registration of copyrights;
however, an application must be made within two years after the work is first
commercially exploited or protection for the mask work terminates.

51. Infringers of the exclusive rights of mask work owners may be sued for infringement
in federal court, if the owner has registered the mask work.