In his opinion, federal judge Lewis Kaplan boiled the complaint down to a dispute over the sampling of a single word, or rather the exclamation – “oh”, which, as mentioned above, appears 42 times in the allegedly infringing song and lasts for all of 0.03 seconds. In addition to pointing out that the two songs are entirely different, the judge indicated that the sampled exclamation appears only in the background and is not featured in the lyrics or the melody of the alleged infringing recording.

While analyzing the existence of substantial similarity between the two works, which is the legal standard for proving copyright infringement, the judge assessed their quantitative and qualitative similarity. While the judge ultimately decided on the substantial similarity standard, he mentioned as a side note that “oh” may not even be a protectable element as it is a “single and commonplace word” which standing alone “is not deserving of copyright protection”. The judge however shied away from deciding the case on this point and proceeded to do so on the substantial similarity inquiry.

As to the elements of the substantial similarity test, the judge refused to adopt the plaintiff or defendant’s proposed analytical framework which focused either on the substantiality of the element copied or the literal similarity of the copied portion. The court applied instead a “quantitative and qualitative significance” test which measured the overall similarity of the works and sought to establish whether, as a whole, the works were made similar by the copying.

Judge Kaplan quickly did away with the quantitative inquiry by pointing out that the copied portion constitutes but a fraction of the overall work. As to the qualitative element of the test, the judge spent a bit more time wrestling with this prong. At the offset of the discussion, the judge brushed off “adverbs and adjectives that imaginative counsel use” to describe the infinite significance of the exclamation “oh” in the original work. According to plaintiff’s counsel “oh” “sets the exuberant tone for the remainder of the work” and without it, the work “would be materially diminished.”

The judge instead focused on Oh’s role in the lyrics of the song and how creatively it has been performed in the original work. Not surprisingly, the judge concluded that there is no particular significance of “Oh” in the message conveyed by the song and that it “is not the heart of the composition.” Further, Oh is used only once in the original work and it lasts but a fraction of a second.

Based on that analysis, the court concluded that that the qualitative prong is also not met and the two works are not substantially similar such as to sustain a copyright infringement charge. While the case was decided based on the substantial similarity test, the judge found it necessary to single out and dismiss one of plaintiff’s arguments as erroneous and misguided. The argument in question was that using the copied element 42 times changes the equities of the substantial similarity test in plaintiff’s favor. The judge makes it clear that the element must figure significantly in the original work, rather than the allegedly infringing work and the numerous use of “oh” did not contribute to the question whether its copying contributed to the qualitative similarity to the original work. The judge further explained that that “factual copying and actionable copying are not coexistive concepts” which is unquestionably samplable music bit to the sample music artists’ ears. Sampling has been for the past couple of decades a very popular and lucrative new-old form of music making which involves the amalgamation of excerpts of pre-existing recordings, amounting to works which sound entirely different than any of the samples they contain and which have enjoyed significant following. Acclaimed artists such as Moby and Fat Boy Slim have made wildly successful careers by making new renditions of and stitching up old recordings. The controversy arises out of not paying royalties to the artists whose recordings are being sampled and this opinion adds another piece in the ever evolving standard of sampling legally.

As many things copyright, the issue is complex, not least because both sides of the picket line sport convincing arguments. On the sampled artists side: they have created value, which has been used to the prominence and enrichment of another and they should be compensated against free riding on their efforts. On the sampler side: the resulting work usually has absolutely no resemblance to any one of the sampled works and the value of the piece rests with the choice of and stitching up of the sampled works. And as is usually the case, the truth and justice probably lays somewhere midway of those two positions. What we can say in the aftermath of the “Oh” case is that it is a “free for all” for short exclamations contained in pre-existing works – that is, until another federal judge says otherwise.

Read the entire opinion here.

While the bill has not become law yet, its very introduction is a testament to the power of social activism. An online petition, available on the White House website, against the de-legalization of cellphone unlocking has been collecting signatures ever since the change and is now up to over 114,000 signatories. Indeed, the petition has been up even before the exemption phaseout took effect. Responding to the staggering number of petitioners, the White House seemed to unequivocally agree with them, adding that the Administration “would support a range of approaches to addressing this issue, including narrow legislative fixes in the telecommunications space that make it clear: neither criminal law nor technological locks should prevent consumers from switching carriers when they are no longer bound by a service agreement or other obligation.”

On March 4, the FCC echoed the Administration’s sentiment, issuing a statement of its own in support of the petitioners’ position. A response to the petition and the White House statement from the Library of Congress was issued that same day arguing that while the Copyright Office is open to re-visiting its decision on the matter, it may not propel a permanent exemption to the DMCA.

The Wireless Device Independence Act bill was introduced a couple of days after the White House articulated its support for the petitioners. Read a detailed discussion of the controversy here.

Apparently, Gradiente Eletronica SA registered the the iPhone trademark in 2000 for goods in Class 9, which includes mobile devices and accessories, which was seven years before Apple launched its iconic iPhone. This ruling will be officially announced on Febryary 13, after which Apple may choose to appeal the decision in Brazilian courts. As Apple’s smart phone market share in North America and Asia is rapidly slipping away, this decision may carry serious implications for the company since Brazil is the largest and fastest growing smart phone market in Latin America.

In a delicious ironic twist, the company which owns the iPhone trademark in Brazil is a manufacturer of electronic appliances – its smart phone product is called “iPhone” and uses the Android operating system.

The tools available on the website provide a very general information in English about a registered mark and there do not appear to be any supporting documents available, such as trademark application or administrative proceeding history.  Still, this tool demonstrates China’s desire to move away from hostility toward intellectual property protections for foreign businesses operating in China.

In a related development, the Beijing First Intermediate People’s Court recently issued a research report discussing the rampant cyber-squatting practice in China of beating famous international marks to a registration in the hope of selling the marks later. The court also has issued some recommendations on what measures to take to discourages malicious use the the trademark registration system.

The Copyright Office had included the cellphone unlocking technology in its triennial list of exemptions twice – in 2006 and in 2010. The exemption defines the circumventing technology as “computer programs in the form of firmware that enable wireless telephone handsets to connect to a wireless telephone communication network, when circumvention is accomplished for the sole purpose of lawfully connecting to a wireless telephone communication network.”

The Copyright Office’s reasoning behind adopting this exemption was that the phone locking technologies “do not appear to actually be deployed in order to protect the interests of the copyright owner or the value or integrity of the copyrighted work; rather, they are used by wireless carriers to limit the ability of subscribers to switch to other carriers, a business decision that has nothing whatsoever to do with the interests protected by copyright.” In other words, the DMCA would have an undesirable effect if applied without the exemption because it would punish behavior which does not harm the owners’ copyright interests, but rather, their business interests, which is beyond the scope of the DMCA.

Prepaid cellphone companies have been in the front trenches of the battle against this exemption and have been litigating against it ever since it was put in place. Their main argument was that their business model of providing sharply discounted cellphones in exchange for locking down customers to a particular wireless network was being harmed by consumers who do not remain subscribers for long enough to justify the discount and by the emergence of an industry centered around exporting unlocked cellphones.

In its last DMCA exemption installment, the Copyright Office took under consideration what is still mainly a business harm resulting from cellphone unlocking and weighed it against the availability of unlocked phones and the changing market place. In the end, the harm suffered by the prepaid phone industry carried the day and the exemption was retired. The Copyright Office’s explanation of this decision is that “with respect to new wireless handsets, there are ample alternatives to circumvention. That is, the marketplace has evolved such that there is now a wide array of unlocked phone options available to consumers.”

Cellphone owners who purchased their phones prior to January 20, 2013 are still protected by the exemption, but unlocking of cellphones purchased after that could be prosecuted under the DMCA.

In United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012), the defendant was a Goldman Sachs employee who allegedly took off with the company’s high frequency trading system algorithms and implemented them on his new employer’s systems. The court pointed out in its opinion that Mr. Aleynikov had been the highest paid programmer in his group, earning a yearly salary of $400,000 (not counting the generous bonuses Goldman Sachs is known to hand out). Aleynikov joined his new employer at a yearly salary of $1 million and was expected to develop a trading system, with functionality similar to that of Goldman’s, within 6 months of his employment – a task that normally would  take years to complete. At his last day at Goldman, minutes after his going away party, Aleynikov apparently uploaded 500,000 lines of code to his new employer’s servers. Later Mr. Aleynikov was arrested in fitting style by the FBI at the Newark Liberty Int’l Airport, carrying a potion of the incriminating  code with him.

Mr. Aleynikov was prosecuted under the National Stolen Property Act, 18 U.S.C. § 2314 and the Economic Espionage Act, 18 U.S.C. §1832 in the United States District Court for the Southern District of New York. The case was tried before a jury which found for the prosecution and  Aleynikov was sentenced to 8 years of  imprisonment, one of the toughest sentences ever imposed under the EEA.

On appeal, the Second Circuit concluded that the defendant’s actions did not violate either statute and vacated the conviction. The issue under the NSPA was whether the defendant stole “tangible goods” as defined in the statute; under the EEA, the issue was whether the code was a product “produced for or placed in the interstate or foreign commerce.”

On the first issue, the court held that the statute does not apply to intangible goods, which effectively meant that it may not be used for prosecuting stolen source code offenses. According to the court, if Aleynikov had seized the code as it was embodied in a Goldman-owned CD or flash drive, that act would be covered by the statute. The court spun an even thinner web when it reasoned that the interstate transportation of the code on a memory drive was again not transportation of stolen goods because the affixing of the intangible property to Aleynikov’s drive did not transform it from an intangible stolen property into a tangible one.  Ironically, Aleynikov’s arbitrary decision to upload the code electronically to a remote server, rather than copy it to a memory drive, would save him from serving half a dozen years in prison.

In discussing Aleynikov’s actions under the EEA, the court concluded that this statute did not apply either, because Goldman had not placed this particular code in “interstate or foreign commerce,” but rather was using it for its internal operations. Again ironically, the same feature that defeated the government’s case under the EEA, the fact that the code was not offered for sale or licensing, would be essential in establishing it as a trade secret because it is a measure for shielding it from prying eyes.

Possibly disconcerted by the curious result in this case, Congress has now approved an amendment to the EEA which affirmatively protects in-house, intangible trade secrets. The bill is drafted to “clarify the scope of the Economic Espionage Act of 1996″ and it expands the statute to include goods as well as services, which covers intangible property such as source code. The amendment also adds the phrase “a product or service used in or intended for use in … interstate or foreign commerce,” which disposes of the requirement that the trade secret be offered for sale or licensing in interstate commerce. Based on this, it would suffice that the trade secret be used in interstate or foreign commerce. These two changes service as direct “fixes” to the Aleynikov decision – now it remains for them to be tested in Federal court before financial services employers may safely exhale.

The new system is meant to make the process of enforcing copyrights less complex and more accessible to individual copyright owners and small businesses. Claimed damages for cases filed with the small claims track may not exceed £5,000 and there is no requirement that the claimant retain legal representation which would significantly reduce the costs of pursuing infringers. There have been proposals from the Ministry of Justice to increase the damages limit to £10,000 which, if adopted, will go into effect early next year. The fee for filing a claim ranges from £300 – £120 depending on the amount of damages claimed.

Unlike in the United States where successful parties usually shoulder their own legal fees, the United Kingdom usually awards legal expenses to the winner. Should a party to a case in the small claims track choose to retain legal representation, however, the fees payable by the losing party are capped at £260 plus £90/day for lost earnings of parties and witnesses attending the hearing.

For more information, read PCC’s guide on how to submit a small claims track case, or visit PCC’s website: http://www.justice.gov.uk/courts/rcj-rolls-building/patents-county-court

Reportedly, SPT struck a deal with MTV Networks to distribute various clothing and luggage goods carrying MTV branding in 30 countries in Latin America and the Caribbean and only discovered MTV had licensed out rights it had not registered, after getting in hot water with the local authorities.  According to the complaint, the merchandise was “seized by authorities as infringing upon the trademark, copyright and proprietary rights of third parties.”  This lawsuit has embarked upon the very hairy waters of international trademark protection, so hopefully it will have its day in court and the legal community will get the benefit of a federal judge entangling it.

MTV/Viacom is an unusual suspect to get into this kind of trouble over failing to secure international trademark rights.  Small companies are more commonly seen finding themselves in this position because they do not have budgets to hire an attorney to do due diligence and certainly not to hire in-house counsel.  And then there is the cost of securing international trademark rights which can run into the millions when adding up the filing fees for each country and local counsel for policing the marks.  While the Madrid Protocol (an international treaty allowing registration of marks in multiple countries with one filing), alleviates significantly the administrative burden of registration, the cost of the filing fees and policing are still substantial.  Granting trademark rights is essentially granting a monopoly over the use of a certain name, image, slogan, etc, in the marketplace of that country, so it is not surprising that nations place a high price to giving away these rights, in particular to foreign companies.

Another point worth mentioning is that not registering the marks may have been a calculated risk for MTV and the network may still pull out of this one with only a few bruises on its wallet.  It is a bit hard to believe that this was merely an oversight on the part of MTV’s savvy army of lawyers, it is more likely that the burden of cost and process of registering the marks outweighed the fear of getting sued.  In the United States, the entity which uses a mark first in commerce obtains the rights to that mark, in most other countries, the mark belongs to the first to register it.  It may well be the case that MTV’s legal team did their research and determined that a brand as famous as MTV need not be registered in every country it is used and MTV, as I am sure, does a good job excluding local entities with substantial public exposure from using it.  However, most “first to use” countries tend to have a background in the British legal tradition, so there is a high likelihood that the Latin American countries, where SPT had problems, follow the “first to register” doctrine, vesting all rights to a mark in the entity which first registered it in that country, rather than the one which first used it in commerce.

Even if SPT has a chance of winning this or of getting a sweet settlement, a better route for asserting its rights might have been the preventive one – due diligence and indemnification.  It is quite standard for the licencee to ensure that the intellectual property rights being assigned exist before signing a contract, especially as large as this one.  Also, every licensing agreement should obligate the licencor to warrant that it owns all the rights it is bestowing, and failing that, the indemnification clause would save the day for the licensee and MTV would have had to pick the tab contractually for SPT’s legal troubles in Latin America.

Aereo’s second defense to copyright infringement of the exclusive right to public performance was that the performance occurs not at Aereo’s will, but at the will of the viewer – it is he/she who controls the operation of Aereo’s system and initiates the performances. In its decision denying the broadcasters’ request for preliminary injunction, the court went into a very detailed analysis of whether Aereo’s technological setup and transmission of plaintiffs’ content, amounts to a public performance and did not reach Aereo’s “willful performance” argument.

At stake in this stage of the litigation was whether the court should pull Aereo’s plug before the conclusion of the case to prevent any further copyright infringement of plaintiffs’ content. The broadcasters’ motion for a preliminary injunction was based on the part of Aereo’s functionality which allows contemporaneous viewing of copyrighted programs – in other words – the service allowing Aereo subscribers to view programs at the same time as viewers watching them on their televisions.

A major disputed point was the tiny antennas’ ability to function independently of each other, which is essential to showing that every Aereo transmission to a subscriber is unique, and therefore private. The broadcasters contended that the antennas are too small to be able to handle the bandwidth necessary to provide the service and their expert claimed that the antennas function in unison and multiple antennas need to be engaged to deliver content to each subscriber. Aereo’s expert, on the other hand, insisted that each time a subscriber uses its service, a dedicated antenna is ascribed and that antenna alone is doing all the heavy lifting necessary.

The court was not persuaded by the broadcasters’ expert witness who performed a number of experiments on the antennas concluding that they could not function independently. For the court, Aereo’s proposition that a sufficiently strong signal may overcome the obstacles associated with the size of the antennas was more persuasive. The seemingly insignificant factual finding in Aereo’s favor, that its antennas function independently, may prove quite important because it would affect not only the decision on the preliminary injunction but, if it stands on appeal, but it may also strongly tilt the outcome of the ultimate question – whether Aereo is engaging in unauthorized public performance of copyrighted content.

To determine whether it should grant a preliminary injunction for the broadcasters, the court also looked to its controlling precedent – Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision“). In Cablevision, the technology in question allowed customers who did not have DVRs to record cable programs at Cablevision’s remote facilities and view them at times and locations of their choosing. Similarly to Aereo’s position, Cablevision’s argument was that each of its customers wishing to record a program had a unique copy of that program created and only that customer could play the program back from that copy. Like Aereo, Cablevision also argued that its technological setup privately performed the copyrighted content and did not infringe the copyright owner’s exclusive right to public performance.

In Cablevision, the Second Circuit clearly defined how it interprets the meaning of “public performance” within the copyright framework. The court reasoned that it did not matter that the same copy of the content broadcasted was then transmitted to multiple viewers because each such transmission was a separate performance of the content.  Thus, the inquiry as to whether that performance was public should be focused on the manner in which the re-transmission reaches the viewer and not on the manner in which the content reaches the re-transmitter. In other words, the relevant question is: who is capable of receiving the re-transmitted performance? If it is multiple people, then the performance is public, if it is one person, then it is private. In the Cablevision context, the court concluded that a performance of a unique copy of a program sitting on the Cablevision system, which may only be viewed by one customer was a private performance and did not infringe the copyright owners’ exclusive right to publicly perform it.

The broadcasters in Aereo’s case argued that Cablevision should not apply because Aereo is merely using a “technological gimmick” to re-transmit the very copy the broadcasters are transmitting because the customers are able to watch the content at “real-time” – with minimal or no delay. The court rejected this argument stating that Aereo’s transmissions, like Cablevision’s, are of a unique copy on Aereo’s system and the viewer’s ability to watch the program contemporaneously with its broadcast was not legally significant. To reach this conclusion, the court distinguished the process of “buffering,” which merely serves as a fleeting repository for the copyrighted content, with Aereo’s storing of the content, even when the “watch” function is engaged. The significance of this is that Aereo’s system makes a copy from which the content is separately performed for the viewer, as opposed to a “buffer” which would effectively retransmit the “master” copy broadcasted by the plaintiffs.

The court further rejected plaintiffs’ contention that, for Aereo to be effectuating a performance separate from the broadcasted performance, there needs to be a “break in the chain of transmission” or “complete” time-shifting (meaning that a complete copy of the program must be stored before it is performed for the viewer). Even if this was an inquiry relevant to other issues, such as  Aereo’s use amounted to fair use or whether it copied copyrighted content without permission, it was not an inquiry relevant to the determination whether there was an unauthorized public performance of copyrighted content. Finally, the ability to view Aereo’s transmissions on a number of different devises, such as smart phones and iPads, as opposed to a television set or a single devise was immaterial to the discussion.

Having concluded that plaintiffs would not likely prevail on the merits of the public performance claim, the court runs through the remaining preliminary injunction factors to facilitate the anticipated appeal of its decision which promptly followed. Once again the the stakes in this case have been raised – it not only gives the federal courts an opportunity to precisely define the meaning of “public performance” within the copyright framework, but it is also representative of the times we live in – another battle between the technological titans of yesterday with those of tomorrow.

Apparently, the contract did not envision that the recorded music could be digitized sometime in the future, but as worded, rights to such digitization would remain with the label, allocating no royalties for the band. Universal, however, may not release the digital versions of the catalogue without the authorization of the band. And this miniscule piece of control left to the musicians is what Def Leppard is using to “game” the contract and get, what they believe is well deserved revenue for their work.

This project has put the band down an exciting yet difficult trip down history lane. Without a doubt they are enjoying reliving their glory days. According to the frontman, Joe Elliott, they are planning to make a good faith effort to recapture the exact same sound, voice, timing they had 30 years ago. Covers for epic hits like Rock of Ages and Pour Some Sugar on Me have already been recorded and are set to be released at the same time as Rock of Ages, the film, starring Tom Cruise.

This is not a unique case of successful artist retaliating against a record label. It is hard to forget “The artist formally known as Prince” and the beautiful, but ineffable symbol Prince used to go by in the 90s to avoid a $100 million contract he signed with Warner because the record company was trying to rein in his creative output to preserve his niche. Another cautionary tale is the Beatles catalogue copyrights which landed in the hands of Michael Jackson through his partial ownership of Sony/ATV.