Posts in Copyright

By Patrick B. Monahan
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On November 30, 2018, the U.S. Copyright Office announced changes to the procedures governing registration of groups of issues of serials and newsletters. These changes, which went into effect on December 31, 2018, eliminate paper filing and also formalize existing Copyright Office policy regarding the meaning of a “work,” which can affect the statutory damages available for a registered serial or newsletter.

General Changes to Group Registration Applying to Both Serials and Newsletters

First, the rule change states that a group registration of works “covers each issue in the group and each issue is registered as a separate work or a separate collective work (as the case may be).” This change makes clear that the relevant “work” eligible for statutory damages in infringement litigation under the Copyright Act is each issue of a given newsletter or serial, not each group registration of issues. This change codifies what had long been the position of the Copyright Office.

Second, the Copyright Act provides that, unless exempted by the Copyright Office, copyright holders must submit two copies of each work they publish for the use of the Library of Congress. In the rule change, the Copyright Office has provided clearer guidance on how publishers can comply with this requirement. If a serial or newsletter is published in the United States in hard-copy format, the publisher is expected to provide the Library of Congress with two complimentary hard-copy subscriptions unless the publisher is notified otherwise. Conversely, if a serial or newsletter is only published in the United States in electronic format, the publisher is not expected to provide the Library of Congress with any subscriptions unless a formal demand is issued.

Procedural Changes to Group Registration of Serials

Serials are works, such as a weekly magazine, published in successive issues bearing numerical or chronological designations and intended to be continued indefinitely. Effective December 31, 2018, the Copyright Office generally requires all applicants, unless they can demonstrate hardship necessitating paper application, to register groups of serial issues using the eCO online application system found at https://eco.copyright.gov, uploading each issue in searchable PDF format. Form SE/Group, the paper application form currently accepted by the Copyright Office, will eventually be discontinued, and applicants are required to upload each issue of a given newsletter in searchable PDF format. The Copyright Office will continue to accept paper applications for group registration of serials for a twelve-month grace period.

The rule change also codifies several existing Copyright Office requirements regarding group registration of serials:

• Each application must include at least two serial issues,
• Each issue in an application must be a work made for hire,
• The author and copyright claimant of each issue in a given application must be the same person or organization,
• Each issue in an application must be an all-new collective work that has not previously been published, and
• Each issue in an application must be distributed as a self-contained collective work.

Finally, the rule change eliminates the requirement that a group of serial issues on a given application must have been published within a three-month period in the same calendar year. However, please note that pursuant to the Copyright Act, in order to be eligible for statutory damages awards in copyright infringement litigation, applications for group registration of serials still must be submitted within three months of the date of publication of the final issue in the group.

Procedural Changes to Group Registration of Newsletters

Newsletters are a type of serial, namely, a specialty, non-general interest periodical published at least twice weekly and unavailable at retail outlets. Effective December 31, 2018, the Copyright Office generally requires all applicants, unless they can demonstrate hardship, to register groups of newsletters using the eCO online application system. Form G/DN, the paper application form currently accepted by the Copyright Office, will be discontinued, and applicants will be required to upload each issue of a given newsletter in searchable PDF format. Please note that there is no grace period for group registration of newsletters – as of December 31, 2018, paper applications will no longer be accepted.

The updated rule removes several existing requirements of newsletters:

• Newsletters need not be collective works,
• Newsletters need not be works made for hire, and
• Groups of newsletters no longer need to be submitted within three months of publication of the last published issue for registration purposes. However, as is the case with serials, please note that pursuant to the Copyright Act, in order to be eligible for statutory damages awards in copyright infringement litigation, applications for group registration of newsletters still must be submitted within three months of the date of publication of the final issue in the group.

A Note on File-Naming Conventions

For both serials and newsletters, the Copyright Office requires that applicants use a particular file-naming convention for issues to be uploaded as part of the online application process.

For serials, the following convention should be used:

• If an International Standard Serial Number (“ISSN”) has not been assigned to the serial, each issue file should be named:
• “GRSE_[title_of_serial]_[date_of_publication YYYYMMDD].pdf” (for instance, the file name for the August 1, 2018 issue of Fashion Weekly would be “GRSE_fashion_weekly_20180801.pdf”.
• If an ISSN has been assigned to the serial, each issue should be named:
• Similarly, for newsletters, the following convention should be used:
• “GRSE_[ISSN number]_[date of publication YYYYMMDD].pdf” (for instance, the file name for the August 1, 2018 issue of a serial with ISSN 1234-5678 would be “GRSE_12345678_20180801.pdf”.
• If an ISSN has not been assigned:
• “GRNL_[title_of_newsletter]_[date of publication YYYYMMDD].pdf”.
• If an ISSN has been assigned:
• “GRNL_[ISSN_number]_[date of publication YYYYMMDD].pdf”.

For more detailed instructions, consult the respective help texts for serials (https://www.copyright.gov/eco/help-serial.html) and newsletters (https://www.copyright.gov/eco/help-newsletters.html).

If you have any questions about the foregoing, or about the eCO online filing system, please do not hesitate to contact us.

The changes are set forth in 37 CFR Part 201 and 37 CFR Part 202 of the Code of Federal Registrations. For more information, the Federal Register entry announcing the rule changes is available at https://www.federalregister.gov/documents/2018/11/30/2018-26091/group-registration-of-newsletters-and-serials.

Preston Woods & Associates LLC v. RZ Enterprises USA Inc. (4:16-cv-01427)

By Matthew F. Abbott
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A recent verdict in the Southern District of Texas may put a novel issue before the Fifth Circuit concerning the scope of statutory damages available under the Digital Millennium Copyright Act (“DMCA”). Under 17 U.S.C. § 1203(b), statutory damages are multiplied by “each violation” of the DMCA, and the interpretation of what constitutes a “violation” could result in a significant increase or decrease in the amount of statutory damages awarded to DMCA plaintiffs.

Background

Plaintiff Preston Wood & Associates, LLC (“Preston Wood”) is an architectural design firm that owns copyrights in various architectural works and technical drawings. Preston Wood licensed some of its works to Defendant Urban Living, a real estate developer.  The lawsuit alleges, inter alia, that Urban Living engaged in unauthorized distribution of Preston Wood’s copyrighted works as part of its marketing materials.  Preston Wood further alleged that Urban Living knowingly distributed these works after removing Preston Wood’s “copyright management information” (“CMI”), in violation of the DMCA.

$28.8 million DMCA award

Following a trial in August 2018, the jury found that Urban Living had directly and contributorily infringed Preston Wood’s copyrights, and awarded Preston Wood $7,539.60 in actual damages for copyright infringement. In regard to the DMCA claims, the jury found further that Urban Living had committed 11,516 violations, based on evidence of the number of recipients to whom Preston Wood’s copyrighted works had been distributed. The jury awarded $28,790,000 in statutory damages, which represented the statutory minimum of $2,500 per violation for each of the 11,516 violations.

Judge David Hittner upheld the jury’s finding and entered judgment for the plaintiff in the amount of $28,797,539.60 which included the statutory damages under the DMCA, as well as actual damages and a permanent injunction. Defendant has stated its intent to appeal this ruling pending the disposition of currently pending post-trial motions.

Damages “for each violation” under the DMCA

Under the DMCA, 17 U.S.C. § 1203(c)(3)(B), a plaintiff electing statutory damages may recover an award “for each violation” of the statute. A significant dispute arose following trial as to what constitutes a “violation” of the DMCA.  Urban Living moved for entry of judgment awarding Preston Wood $5,000 in statutory damages.  Urban Living argued that, as matter of law and based on the evidence at trial, it had only committed two violations of the DMCA: first, when uploading the image of the copyrighted work to its website, and second, when sending an “email blast” containing the copyrighted work to many thousands of recipients.  Urban Living asserted that the number of recipients is irrelevant in determining the number of violations, citing McClatchey v. Associated Press, 2017 WL 1630261 (W.D. Pa. 2017), in which the court found that defendant had committed a single violation of the DMCA by publishing a copyrighted photograph via its wire service.  Urban Living further argued that awarding even minimum statutory damages for the 11,516 violations found by the jury would result in a windfall recovery for Preston Wood when compared to the amount of actual damages, and such award should be remitted by the district court.

In response, Preston Wood argued that the DMCA should be construed according to its unambiguous plain meaning – i.e., since the DMCA expressly prohibits “distributions” of copyrighted materials with their CMI removed, each such distribution to an individual recipient is a violation of the statute.  Preston Wood further argued that McClatchey and other cases cited by Urban Living were distinguishable, were not decided on a full evidentiary record as to the nature of the distributions and did not establish a rule under the DMCA that the number of recipients of materials was irrelevant.

In its November 8, 2018 Order, the Court declined to remit the jury award, and entered Final Judgment against Urban Living for statutory damages under § 1203(b) in the amount of $28,790,000. Urban Living has subsequently moved for approval of a supersedeas bond in order to appeal, and has taken the position that the bond need only account for $23,381.85 of the $28,797,539.60 judgment.   Additionally, Urban Living has moved for a new trial arguing that the jury’s finding that Urban Living violated the DMCA is supported by insufficient evidence.  Both motions have been briefed and are pending before the Court.

Potential implications

If the case is appealed and the Fifth Circuit rules in favor of Urban Living, it will greatly limit statutory damages where a defendant has performed a limited number of distributive acts, regardless of how many individuals actually received the DMCA-violative materials as a result of those acts. Alternatively, a ruling in favor of Preston Wood could subject DMCA defendants to potentially tens of millions of dollars in statutory damages for a single distributive act, such as sending a single email to their mailing list.  Either result will have a substantial impact on the scope of recovery of statutory damages for violations of Section 1202 of the DMCA in the Fifth Circuit.

By Suzanna M. M. Morales
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In a case that highlights the level of creativity required for copyright protection, the U.S. District for the Northern District of Illinois held that a company that sells bonds may have valid copyrights in documents relating to offering those bonds.

Plaintiff UIRC-GAS Holdings, Inc. sells bonds to finance the purchase and operation of property leased to the federal government. UIRC created forms related to the offering of those bonds (“UIRC Forms”) and obtained federal copyright registrations for these works from the U.S. Copyright Office. Defendant William Blair & Company, LLC, an investment banking firm, acted as the placement agent for UIRC and used the UIRC Forms for some of those bond offerings. Blair also assisted Rainier, a competitor of plaintiff, with a similarly-structured bond offering. UIRC sued Rainier for copyright infringement of the URIC Forms and subsequently settled. Then, plaintiff sued Blair and a former employee of Blair, alleging copyright infringement of the same URIC Forms.

The decision

Blair moved to dismiss UIRC’s claims related to the content of the URIC Forms, claiming that some of the definitions contained therein were sentence fragments and definitions that are “driven entirely by utilitarian considerations” based on the structure of the bond and are therefore not eligible for copyright protection. Blair argued that the plaintiff was trying to own a concept for the type of bond offering. Blair also claimed that descriptions of the U.S. government’s leasing structure, necessary to the type of transaction covered by the URIC Forms, are not protectable under copyright law because they are simply facts about the transaction.

To survive a motion to dismiss, a plaintiff only needs to show that its complaint contains enough facts to state a plausible claim. Blair argued that UIRC did not do this because the URIC Forms did not possess the minimal level of creativity necessary for copyright protection. The court, however, held that UIRC had at least included sufficient facts and assertions in its complaint to allege viable copyright rights in the UIRC Forms and to support a viable claim for copyright infringement of those rights.

Ideas v. expression in copyright law

The case highlights a critical dichotomy in copyright law, that copyright law protects the expression of an idea, not the idea itself. For example, copyright protection is not available for the idea of a fictional detective character. On the other hand, copyright law protects movies and books expressing the story of such a detective. Further, a copyrighted work must contain a minimal level of creativity for that expression to be eligible for protection under the copyright laws.

Here, Blair claimed that the UIRC Forms, by their nature, had to describe the underlying concept of government leases, which are non-protectable facts. Blair argued that UIRC was the first to offer this type of bond, and that, by claiming copyright protection in the UIRC Forms, UIRC actually is trying to monopolize the market for this type of transaction. Blair claimed that there was no other way to express the underlying idea of the bond, and that UIRC’s complaint did not even claim the minimal level of creativity in the content of the UIRC Forms necessary for copyright protection. The court disagreed, holding that the terms and definitions in the UIRC Forms contained at least a minimal level of creativity in expressing the leasing structure.

Although a contract or other legal document can be copyrightable, such documents frequently contain relatively common terms and language, so that it may be difficult to prove that the document, or portions thereof, was an original creative work. This case seems to differ because the type of transaction is new, and UIRC apparently created the documents specific to the purpose of effectuating the sale of these bonds.

Following this motion to dismiss, the case will now go forward. We will monitor this case for a decision on whether UIRC’s bond documents are original works entitled to copyright and whether Blair copied a copyrighted work of UIRC. Subsequent decisions in this case may have a lasting impact on the scope of copyright protection for transactional documents and forms in the future.