Novell Prevails in Long-Running Dispute over Ownership of UNIX Copyrights - And Open Source Software Moves On

The dispute between The SCO Group and Novell, Inc. over the ownership of copyrights in the code to certain versions of the UNIX operating system, which started eight years ago, appears to have been handed its retirement papers by the Tenth Circuit. Yesterday, on the case’s second visit to the circuit, the court upheld the jury verdict in Novell’s favor on the issue of copyright ownership. The SCO Group v. Novell, Inc., No. 10-4122 (10th Cir. Aug. 30, 2011).

The case is important because the issue of UNIX copyright ownership underlies the copyright litigation campaign that SCO commented in 2003, targeting the LINUX open source operating system. When SCO filed multiple lawsuits claiming that the LINUX OS infringed its UNIX copyrights, it raised concerns that users of LINUX could be held liable for infringement, and subject to the payment of royalties to SCO. The ruling that SCO does not own the copyrights that it asserted in those litigations puts an end to that threat.

Despite the concerns raised in 2003 that the threat of copyright litigation and royalty payments would stall not only the adoption of the LINUX OS but also other open source software, users appeared to factor in the threat of future liability. Both LINUX and other open source software projects marched on as the SCO litigations ground on.

Last week, the LINUX OS turned 20. As this CNN article observes, LINUX is now invisible and ubiquitous. While its share of the desktop operating system remains miniscule, LINUX code is present in 30% and 43% of tablets and smartphones, respectively, as part of the Android operating system.  And LINUX code is present in the firmware of countless other devices, and is pervasive in enterprise data systems.

As for open source generally, as long as we’re keeping score, it’s a good time to note that the Apple operating system is based on open source code as well. In fact, it has the same roots as the code at issue in SCO v. Novell – the earliest versions of the UNIX operating system.

Notwithstanding that SCO may seek en banc review and even file a petition for certiorari to the U.S. Supreme Court (it’s done that before), the SCO v. Novell case appears to be, finally, over. Ultimately, the related SCO litigations, including its copyright infringement case against IBM, will fold up as well.

There are a few lessons for technology lawyers in the SCO v. Novell litigation, which you can read about in our prior blog post.

The SCO v. Novell endgame doesn’t seem to have gotten a lot of press, at least so far. Perhaps this is because attention has already turned to the next big “open source” battle – the complex web of litigations involving Google’s Android operating system. This time, the battle isn’t for the desktop, it’s for mobile market share.

Posting of Entire News Article is Fair Use, Says Judge in Righthaven Copyright Litigation

UPDATE: On April 22, the court in Righthaven v. Jama and the Center for Intercultural Organizing issued a written opinion reflecting its earlier bench ruling that the posting of an entire news article on the CIO Web site was fair use as a matter of law.

There are a few differences between the bench ruling, as reflected in news reports, and the opinion as issued. The opinion includes a number of conclusions that are likely to be controversial, including the following:

  • The defandant’s re-posting of an entire news article to educate the public is transformative from the current copyright holder’s use, which is "nothing more than litigation-driven."  Thus, the court said, the defendant’s use “does not constitute a substitution for plaintiff’s use.”  (The court did note, however, that the former copyright owner did use the article for news-reporting purposes.)
  • The purpose of the use was non-commercial because the defendant was an educational, non-profit organization.
  • The purpose of the news article is informational and thus the work entitled to less copyright protection than a “creative work of entertainment.”
  • The use of the entire article was reasonable because the purpose was to educate the public and the factual nature of the information made it "impracticable" to cut the article or edit it down.
  • No market harm was demonstrated by the plaintiff.

Righthaven, LLC v. Jama and Center for Intercultural Organizing, 2:10-cv-01322-JCM -LRL (D. Nev. April 22, 2011).

*****  ORIGINAL POST ****

We recently wrote on the copyright enforcement lawsuits brought by Righthaven LLC, the intellectual property enforcement firm, and in particular, on a pending ruling on the issue of fair use in the Righthaven litigation against the Center for Intercultural Organizing (CIO).

On Friday, March 18, Judge James Mahan, who is presiding over Righthaven LLC v. CIO in the District of Nevada,  announced that he would dismiss Righthaven's lawsuit on the grounds of fair use. The lawsuit involves the posting of an entire article from the Las Vegas Review-Journal on the organization's Web site. According to a news article in the Las Vegas Sun, Judge Mahan indicated the following in a ruling from the bench:  

  • that the CIO was using the article for educational purposes and not to raise money;   
  • that the article was primarily factual as opposed to creative;  
  • that its use did not harm to the market for the article.   
  • that Righthaven was remiss for not notifying CIO in advance of the lawsuit.  
  • that the copyright in the article, once transferred to Righthaven by the Las Vegas Review-Journal, was entitled to lesser protection under the Copyright Act.   
  • that the use of the copyright in the article (presumably as the basis for a lawsuit) has a chilling effect on free speech and doesn't advance the purposes of copyright. 

In response to the statement by Righthaven's attorney that the company intended to appeal, the judge commented, according to the Las Vegas Sun article: "I realize this is going to be appealed. I tell litigators 'that's why God created San Francisco," (i.e., the location of the U.S. Court of Appeals for the Ninth Circuit.
 
See Steve Green, "Righthaven loses second fair use ruling over copyright lawsuits," (Las Vegas Sun, March 18, 2011), available here.
 

The Righthaven Lawsuits: What is Fair Use of Online Publications?

** UPDATE March 22, 2011:  On March 18, the court dismissed Righthaven's copyright action against the Center for Intercultural Organizing on the grounds of fair use. See further discussion in this post. **

Righthaven LLC is an intellectual property enforcement firm that was formed by a group of copyright attorneys and Stephens Media, the publisher of the Law Vegas Review-Journal. The company has been making a name for itself; since early 2010, has brought two hundred copyright infringement suits in the District of Nevada alone against Web site owners, forum operators and bloggers alleged to have unauthorized copies of the Review-Journal’s articles on their sites. Recently, it has added other media company clients and expanded its enforcement efforts to other federal districts.
Righthaven is also drawing considerable fire from critics who have denounced the company as a copyright troll, and an attack dog. The criticism is directed at Righthaven’s business model.

The lawsuits target individuals and small, usually non-profit entities and other Web sites that have failed to take advantage of the DMCA safe harbor protection against liability for material posted by a third party. Righthaven makes no takedown demands prior to filing its complaints, which seek not only damages but transfer of the defendant’s domain name. The company then presses for a quick settlement.

So far, about half of the Righthaven lawsuits have settled, probably for the low four figures. Righthaven Lawsuits, a Web site that tracks the Righthaven litigation, estimates that Righthaven has taken in about $364,000 thus far.  But some Righthaven targets are fighting back, raising defenses such as copyright fair use and implied license, in several cases with the assistance of the Electronic Frontier Foundation.

Righthaven’s lawsuits in the District of Nevada have so far yielded two rulings on the copyright fair use defense and the doctrine of implied license, and may soon yield further rulings on those issues. These opinions should be noted by content owners. The opinions in Righthaven v. Klerks and Righthaven v. Realty One Group suggest a broad view of the fair use doctrine in the online context, and perhaps a potentially even broader view of the application of the doctrine of implied license.

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Ninth Circuit Says DMCA Anticircumvention Provision Gives New, Access-Prevention Right to Copyright Owners - MDY v. Blizzard, Part II

As we related in Part I of this post, Blizzard Entertainment, distributor of the World of Warcraft game software and the operator of the servers that enable online game play, sought to block the use of automated game playing software by deploying anti-bot software, WoW Warden. But MDY Industries, the distributor of the Glider bot software, countered that move by re-engineering Glider to evade detection by Warden and enable users to continue access WoW’s servers while using the bot. This feature of Glider is the basis for Blizzard’s claims that MDY violated the provisions of the Digital Millennium Copyright Act that prohibit trafficking in software and other devices that enable circumvention of copyright protection technologies.

In MDY Industries, LLC v. Blizzard Entertainment, Inc., the Ninth Circuit commenced its analysis of the DMCA issues by parsing the complex interconnection between the two parallel prohibitions in the anticircumvention provisions: the prohibition in Section 1201(a) against the circumvention of a technological measure that “effectively controls access to a work protected under this title,” i.e., a copyrighted work; and the prohibition in Section 1201(b) against the circumvention of a technological measure that “effectively protects a right of a copyright owner.” It is important to note the difference between the two sections: Section 1201(a) protects measures that limit access to a copyrighted work, while Section 1201(b) protects measures that protect a right of a copyright owner.

The appeals court concluded that a copyright owner’s rights in Section 1201(a) are, in effect, broader than a copyright owner’s rights under Section 1201(b) because “preventing ‘access’ to a protected work in itself has not been a right of a copyright owner arising from the Copyright Act.” And thus, the court said, “we read this term as extending a new form of protection, i.e., the right to prevent circumvention of access controls, broadly to … copyrighted works.”

The court explicitly rejected the argument that Section 1201(a) should be more narrowly construed, and should only be applied where there is a “nexus” between the access sought to be prevented and a copyright owner’s rights under the Copyright Act. Such a nexus was required by the U.S. Court of Appeals for the Federal Circuit in Chamberlain Group, Inc. v. Skylink Technologies, Inc. (Fed. Cir. 2004), where a manufacturer of garage door openers that contained copyrighted firmware unsuccessfully sought to use the anticircumvention provisions to bar the use of third-party replacement controls that required access to the firmware in order to activate the opener.

As the Ninth Circuit in MDY v. Blizzard acknowledged, in Chamberlain, the Federal Circuit “feared that Section 1201(a) would allow companies to leverage their sales into aftermarket monopolies, in tension with antitrust law and the doctrine of copyright misuse.” The Ninth Circuit concluded that the policy concerns that the Federal Circuit relied on in Chamberlain were not present in MDY v. Blizzard, and that the potential interplay between antitrust law and Section 1201(a) could be reserved for future cases. And in any event, the Ninth Circuit concluded, those policy concerns should not prevail over the plain language of the statute, and the legislative history that it carefully and extensively examined.

The Ninth Circuit also left for future consideration the issue of whether fair use is a defense to a prima facie violation of Section 1201, because MDY did not claim that the use of Glider was protected by the doctrine of fair use.

The next question the court tackled is whether Blizzard’s Warden software either “effectively controls access” to a copyrighted work or “effectively protects a right of a copyright owner.” And that requires understanding of how the WoW software is structured, and how the Warden program works.

The WoW software consists of two components: a game client that is installed on the user’s computer, and game elements that are available only when the user is connected to the WoW servers. The court divided the protectable elements of the WoW software into three “buckets”: the literal elements of the software (the game client’s software code that resides on the user’s computer), the individual non-literal elements (individual components, such as recorded sounds and images that are stored locally and called up by the game client software in the course of play) and the game’s dynamic, non-literal elements, the “real-time experience of traveling through different worlds, hearing their sounds, viewing their structures, encountering their inhabitants and monsters, and encountering other players.” This last element is only available when the user is connected to the WoW servers.

The Warden program has two functions: first, it scans the random access memory (RAM) of a user’s computer before the user connects to WoW’s online game servers to see if a bot is running, and second, it periodically scans the user’s RAM to look for patterns of code that it has identified as belonging to bots and other cheating software. When it detects a bot before the user has connected to a game server, it prevents the user from logging on to the server, and if it detects a bot during play, it boots the player from the server.

Given the manner in which Warden functions, the court concluded that it does not prevent access to either the of the WoW elements that are stored locally on a user’s computer, because those elements are accessible to a user despite the presence of Warden. But Warden does prevent access to WoW’s dynamic, non-literal elements that are accessible only when connected to Wow’s servers. Accordingly, the appeals court found that Warden is a technological measure that “effectively controls access” to a copyrighted work, and that MDY had engaged in trafficking in a technology, Glider, that circumvents that control, in violation of Section 1201(a)(2).

MDY was not found to violate Section 1201(b). Blizzard argued that Warden effectively protected its right against unauthorized copying in various respects, but the court disagreed. Because WoW gamers are authorized to load the game code into RAM, a user of Glider who continues to load code into RAM despite Warden’s efforts to interrupt that process are not infringing, the court found. And, because WoW players using Glider who are able to log on to the game server and access the dynamic non-literal elements of the game despite Warden’s efforts, Warden doesn’t “effectively” protect against copying.

For Blizzard, although the ruling is a mixed bag, the result is certainly not a total loss. At the end of the day, its Section 1201(a) trafficking claim survived with respect to protecting WoW’s dynamic, non-literal elements from copying, and is likely to be sufficient basis for the district court to reissue an injunction and award of damages. Although summary judgment on Blizzard’s tortious interference claim was vacated, it may still press that claim on remand.

For users of software and other copyrighted works, the aspects of the ruling dealing with the issue of contract covenants and copyright conditions narrows the circumstances under which they might be found to be copyrighted infringers, should they violate a provision in a Terms of Use or similar document. Accordingly, service providers may be limited in using the stern remedies of the Copyright Act to control unwanted access to their systems, at least in the Ninth Circuit. In that respect, see, e.g., Facebook, Inc. v. Power Ventures, Inc. (N.D. Cal. May 11, 2009), discussed here.

For device manufacturers who, like the garage door opener manufacturer in Chamberlain, wish to use the DMCA anticircumvention provisions for competitive advantage, the ruling may present new possibilities for structuring their products. And of course, copyright owners generally will be advantaged in their efforts to use technical means to block unauthorized access to their works.

For the DMCA itself, the ruling in MDY v. Blizzard sets up a circuit split on the construction of the anticircumvention provisions, and presents the possibility of U.S. Supreme Court review. Or possibly, a reexamination of the ruling by the Ninth Circuit en banc, a remedy that either or both sides in the case might well seek.
 

Ninth Circuit Rules on License Conditions versus Contract Covenants in Dispute over World of Warcraft Bots - MDY v. Blizzard, Part I

Playing World of Warcraft, the world’s most popular massively multiplayer online role-playing game (MMORPG), can be, well, a drag. As the parents, teachers and spouses of gamers know all too well, playing through the 70 or more levels of the game in order to amass desired virtual currency, weapons and armor can be extremely time-consuming. So some gamers have resorted to the use of bots (automated game-playing software robots) to make their way more quickly from the more tedious early levels of the game to the more interesting upper levels. Michael Donnelly developed WoW bot software (Glider) for his own use and it worked so well that he decided to sell it to other gamers. And that worked well, too. In a few years, Donnelly (incorporated as MDY Industries) had gross revenues of $3.5 million from sales of Glider licenses. 

For Blizzard Entertainment, the distributor of WoW software and the operator of the servers that enable online game play, bots are, well, a drag. Other gamers complain that they constitute cheating, and Blizzard potentially loses revenue when gamers finish the game sooner rather than later. So Blizzard added a provision to the WoW Terms of Use prohibiting the use of bots and similar third-party software. WoW also deployed a software solution, WoW Warden, that checks gamers’ computers for prohibited software and prevents their access to the server if it is present. Warden works only so-so at blocking Glider-using players, though, and it costs a lot of money to deploy and maintain.

So Blizzard also sent its lawyers to Donnelly’s home to personally demand that he cease selling the Glider program. (Whether he called them Worgen and tried to repel them with his Corpse-Impaling Spike is not part of the record.) Donnelly subsequently filed an action seeking a declaratory judgment that his sale of the Glider program did not infringe Blizzard’s copyrights, and Blizzard responded with counterclaims under copyright law, the Digital Millennium Copyright Act and state law.

Game on.

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Ninth Circuit Rules on License versus Sale of Software

The Register of Copyrights may have concluded that precedents defining the difference between a license and a sale of software are conflicting (see our prior blog post on that point), but a panel of the Ninth Circuit had no difficulty in resolving the issue in its recent opinion Vernor v. Autodesk, Inc., 2010 U.S. App. LEXIS (9th Cir. Sept. 10, 2010). The panel reconciled a series of prior panel rulings deemed inconsistent by the lower court, and ruled that proposed resales of packaged software via an eBay auction were not protected by the copyright first sale doctrine because the initial transaction between the software developer and its transferee was a license, not a sale.

The ruling will please software developers seeking to limit resales and other downstream transfers of their products, and will likely also benefit content owners who distribute their content digitally. In brief summary, the court held that “a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions.”

The transaction between Autodesk and its transferee was deemed to have met that test without difficulty. Licensing attorneys should take note of the specific factors that the court considered:

  • The software was initially transferred by Autodesk pursuant to a Softtware License Agreement that expressly retained title to the software.
  • The SLA included express prohibitions against further transfers or leases of the software without the developer's express written consent; use outside the Western Hemisphere; modifications, translations or reverse-engineering; removal of proprietary marks on the software or related documentation; or circumventing any copy protection device.
  • The SLA also provided for termination of the license for unauthorized copying by the licensee, or for failure to comply with other license restrictions.

The appeals court rejected the argument that the dispositive factor in distinguishing a license from a sale is whether the transferee was entitled to retain possession of the copy of the copyrighted work in question. The court also rejected the argument that is ruling created a split of authority with the Federal and Second Circuits.

There are some other elements pertinent to the transaction that the court recited in the opinion although it did not specify that these affected the determination of the license/sale issue, perhaps in order not to unduly narrow its ruling. Nevertheless, note should be taken of them.

  • The SLA accompanying the software had to be accepted before installing the software. If a customer chose not to accept the SLA, the software could be returned for a full refund.
  • The developer offered several different SLAs with different terms for commercial, educational institution and student users, with the commercial license (which applied to the software at issue) being the most expensive, but with the fewest restrictions.
  • The SLA provided that if the software is an upgrade of a previous version, the customer must destroy any previously licensed copies, including those resident on a hard drive; the developer reserved the right to require proof that the copies had been destroyed.
  • The developer utilized license enforcement measures that included the use of serial numbers attached to each copy. Customers were also required to input a separate activation code, obtain from the developer, within a month after installing the software. This code could be reused, however.

The Ninth Circuit panel heard oral argument in Vernor v. Autodesk in June. On the same day, the same panel heard arguments in two other cases that presented similar or related issues. The appeal from the ruling in  MDY Industries, LLC v. Blizzard Entertainment, Inc. (D. Ariz. 2008) concerns whether a purchaser of a copy of a videogame is the owner of the copy under 17 U.S.C. § 117(a).  The appeal from the ruling in Universal Music Group v. Augusto (C.D. Cal. 2008) concerns ownership of a copy of a music recording on a promotional CD.

The court has yet to release opinions in those cases.

 


 

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Register of Copyrights Says "Who Knows?" on Ownership of Computer Program Copies

Who owns the firmware on a smartphone, the device manufacturer or the purchaser?  Ownership of copies of computer programs is a thorny issue with which the federal courts have grappled in numerous cases. The issue arose during the most recent round of triennial rulemaking that resulted in the promulgation of a new set of exceptions to 17 U.S.C. § 1201(a), which prohibits the circumvention of technological measures deployed to limit access to copyrighted works.

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Logo, Copyright Notice and Link on Web Site Constitute "Copyright Management Information" under DMCA

The "copyright management" provision of the Digital Millennium Copyright Act, 17 U.S.C. § 1202, prohibits the provision or dissemination of copyright management information that is false, as well as the removal or alteration of copyright management information. An issue that has divided federal courts is whether the scope of this section is limited to digital copyright management systems such as digital rights management technologies, or whether it extends to the removal or alteration of copyright information that is affixed to or associated with works by more traditional means. For example in IQ Group, Ltd. v. Wiesner Pub., LLC, 409 F. Supp. 2d 587 (D.N.J. 2006), the court ruled that section 1202 was intended to cover "copyright management performed by the technological measures of automated systems," but not "copyright management performed by people." But several other courts addressing the issue have disagreed, including Associated Press v. AllHeadline News Corp., 608 F. Supp.2d 454 (S.D.N.Y. 2009), in which the court concluded that there was no textual support in the DMCA for limiting the copyright management provision to technological copyright management systems.

In Wayne Cable v. Agence France Presse, et al., 2010 U.S. Dist. LEXIS 73893 (N.D. Ill. July 20, 2010), Cable, the photographer-copyright owner, authorized a realtor to display his photographs of a home on the realtor's Web site with the proviso that the display include attribution of his authorship and a link to his own own Web site. The Web site included a credit line attributing the photographs to “Photos©2009 wayne cable, selfmadephoto.com.” The copyright notice was encoded as a link to Cable’s own Web site. Cable alleged that the photographs were subsequently copied by defendant Agence France Presse without his permission and displayed elsewhere without attribution. AFP moved to dismiss the DMCA claim, contending that Cable failed to allege that the attribution information functioned as a component of an automated copyright protection or management system and thus it did not constitute "copyright management information" within the scope of the DMCA.

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In Assessing Employee Status in Copyright Ownership Disputes, Technology Start-Ups Are a Special Case, Says the Ninth Circuit

A technology start-up company can be an informal environment - both Apple Computer and Hewlett-Packard famously started out in garages, and Yahoo!, Google and Facebook were developed, initially at least, in college dorm rooms. But informality can, and frequently does, lead to legal disputes down the road. In JustMed, Inc. v. Byce, 2010 U.S. App. LEXIS 6976 (9th Cir. Apr. 5, 2010), the Ninth Circuit was faced with a dispute over ownership of the source code for a program that operated a digital audio device.

Michael Byce, the programmer who wrote most of the code in question, claimed to be an independent contractor and thus the author, and copyright owner, of the code. JustMed claimed that Byce was an employee and that the code was a work for hire, with copyright ownership vested in the company. The appeals court concluded that the well-established factors for making the intensely fact-sensitive determination of employee status should be weighed specially in light of the fact that the company involved was a technology start-up and the activity in question was computer programming.

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Jacobsen v. Katzer: Open Source Software Project Gains Key Rulings in Copyright Infringement Litigation

Jacobsen v. Katzer involves a dispute over rights in software code distributed pursuant to the open source Artistic License. Last year the case yielded one of the very few judicial rulings dealing with open source software. As we wrote at the time, the U.S. Court of Appeals for the Federal Circuit rejected the argument that open source licenses are enforceable only in a breach of contract action. In a broadly worded opinion that endorsed the open source approach to licensing, the court held that open source license restrictions are enforceable under U.S. copyright law, thereby making the federal courts, and the potent remedies under the Copyright Act, available to open source licensors.  
 
The case was remanded to the district court for further proceedings, and has now yielded another ruling favorable to the plaintiffs on a number of critical points, including eligibility of software code that is distributed for free for copyright infringement damages.  Jacobsen v. Katzer, No. C 06-01905 (N.D. Cal. Dec. 10, 2009) .

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Vernor v. Autodesk and the First Sale Doctrine: The District Court Has Nothing Further to Add, Judgment for Reseller

Vernor v. Autodesk, Inc. is a closely followed case in which an eBay reseller of software argues that his resales are protected by the copyright first sale doctrine, and software company Autodesk is arguing that because the AutoCad software Mr. Vernor is auctioning on eBay is licensed, not sold, Mr. Vernor is not an owner of the copies within the meaning of the doctrine. Vernor instituted this action seeking a declaratory judgment that his resales did not constitute direct or contributory copyright infringement.

In May 2008, the court denied Autodesk's motion for summary judgment dismissing Vernor's complaint. As we blogged at the time, the court ruled that the original transation between Autodesk and Vernor's transferor (an architectural firm that purchased the AutoCAD software for use in its practice) constituted a sale, and thus the subsequent transfer of the software to Vernor was a further sale protected by the first sale doctrine. Following discovery, the court has now concluded that there are no materially relevant facts different from those before the court, and that judgment should be entered in favor of Vernor.

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The Beat Goes On: In SCO v. Novell, Tenth Circuit Remands UNIX Copyright Ownership Issue for Trial

The Tenth Circuit has ruled in the closely watched SCO v. Novell appeal, and while it upheld a judgment in favor of Novell for royalties due from The SCO Group, the appeals court remanded for a trial on the issue of ownership of the copyrights in the UNIX code that is at the heart of SCO's copyright litigation against IBM over its contribution of code to the Linux operating system.

The SCO v. Novell case is one of a complicated series of litigations that commenced in 2003 when SCO claimed that copyrights in the UNIX code that it acquired as a result of a transaction with Novell in 1995 were infringed by IBM and users of the Linux OS. When Novell publicly stated that SCO did not acquire the copyrights in as a result of the 1995 transaction, SCO sued Novell for slander of title. The issue of ownership of the code was the subject of the 2007 ruling by the U.S. District Court in Nevada from which SCO appealed.

In a lengthy opinion, the Tenth Circuit reviewed the evidence and arguments presented on the motion for summary judgment and concluded that the issue of should not have been resolved summarily. The court recognized Novell's "powerful arguments" in support of its interpretation of the transaction, and allowed that there might be cause "to discount the credibility, relevance, or persuasiveness" of SCO's extrinsic evidence in support of its view of the transaction. Nevertheless, the court said, "when conflicting evidence is presented such that the ambiguities in a contract could legitimately be resolved in favor of either party, it is for the ultimate finder of fact—not the court on summary judgment—to interpret the contract."

Judge Dale Kimbell, who presided over both the SCO v. Novell litigation and the underlying SCO v. IBM litigation in the District of Nevada since 2003 has already filed a notice of recusal, and both  matters have been reassigned.

Meanwhile, it remains to be seen whether SCO will survive to press forward with the Novell and other litigations, including the underlying copyright infringement case against IBM, which had been stayed pending the outcome of SCO v. Novell and by SCO bankruptcy filing. SCO filed a Chapter 11 petition in the District of Delaware shortly after the district court's ruling in SCO v. Novell in 2007. The bankruptcy proceeding ground on as the appeal to the Tenth Circuit was pending, with SCO having yet to file a reorganization plan. On August 5, the bankruptcy court ordered the appointment of a Chapter 11 trustee to take over management of SCO. As recognized in SCO's 8K filing following the order, "the Chapter 11 Trustee will have, upon appointment, authority over the Debtors’ assets and affairs and the future course of the Debtors’ litigation against Novell, IBM, et al."

SCO also appealed from the district court ruling awarding Novell $2.5 million plus in royalties, but on that issue the Tenth Circuit affirmed, so the favorable ruling on copyright ownership brings no monetary relief for SCO's remaining financial resources.

The SCO Group, Inc. v. Novell, Inc., No. 08-4217 (10th Cir. Aug. 24, 2009)
 

Heads Up for a Ruling on the '"Remote DVR" Petition for Certiorari

UPDATE: The U.S. Supreme Court denied the petition for certiorari on June 29, 2009.

***

The petition we are talking about here is the petition for certiorari filed in the US. Supreme Court in the case more formally known as The Cartoon Network LP, LLP  v. CSC Holdings, Inc. (2d Cir. 2008), petition for cert. filed sub nom. Cable News Network, Inc. v. CSC Holdings, Inc. The dispute concerns Cablevision's plans to deploy a remote DVR system that would permit subscribers to record content broadcast over the Cablevision network to remote servers maintained by Cablevision, for playback at will. Cablevision brought the action seeking a declaratory judgment that the deployment and use of the system would not infringe the copyrights of content owners who provide programming to Cablevision.

Talking about video recorders and copyright is, of course, a U.S. Supreme Court déjà vu moment – the Court ruled in 1984 in Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984), that the sale of home video recorders used to tape television program for later viewing did not constitute contributory copyright infringement.

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Facebook Takes a Page from Ticketmaster's Playbook: Block Unauthorized Web Site Access with Carefully Drafted Terms of Use

In 2007, Ticketmaster brought a multi-count complaint against RMG Technologies, a software company that supplied ticket brokers with software that enabled them to automatically and rapidly access Ticketmaster’s Web site, to the detriment of ordinary users seeking tickets to popular events. The Ticketmaster v. RMG complaint was notable for stating a series of claims that leveraged the allegation that RMG’s access to the Web site for the purpose of creating its software, as well as the subsequent use of the software, violated the Ticketmaster Terms of Use and was thus unauthorized. Ticketmaster’s claims included breach of contract, copyright infringement, violation of the anticircumvention provisions of the Digital Millennium Copyright Act, and violation of the Computer Fraud and Abuse Act. Based on these claims, Ticketmaster succeeded in obtaining a preliminary injunction against the distribution of the software and a $18.2 million default judgment against RMG.

In December 2008, Facebook filed a similarly framed complaint against Power Ventures, the operator of Power.com, an online service that allows social networking users to access all of their accounts through one interface. In Facebook, Inc. v. Power Ventures, Inc. (N.D. Cal. May 11, 2009), Judge Jeremy Fogel denied Power Ventures's motion to dismiss Facebook’s claims of copyright infringement, violation of the anticircumvention provisions of the DMCA, and violation of federal and state trademark infringement laws for failure to state a claim. Judge Fogel acknowledged the similarity of Facebook’s copyright claims against Power Ventures to the claims in Ticketmaster’s litigation against RMG. Slip op. at 5.

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Free Software Foundation Files First Copyright Infringement Complaint to Enforce its GNU Licenses

 The Free Software Foundation has filed a copyright infringement complaint against Cisco Systems. The complaint alleges that Cisco's Linksys products contain certain works in which the FSF holds the copyright, but Cisco has not complied with the requirements of the licenses pursuant to which the FSF makes the works available.
 
This is the first copyright infringement action ever filed by the FSF, according to the press release announcing the filing of the action. The filing of the lawsuit follows on the ruling by the United States Court of Appeals for the Federal Circuit last August in Jacobsen v. Katzer that open source licenses are enforceable under copyright law.

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Let's Go Crazy: What Does It Mean to "Consider" Fair Use?

Stephanie Lenz posted a homemade video on YouTube.com, depicting her toddler son dancing in his walker, with the song "Let's Go Crazy" by "the artist professionally known as Prince" playing in the background. Several months later, attorneys for Universal Music, owner of the copyright in the recording, sent a takedown notice pursuant to § 512(c) of the Digital Millennium Copyright Act, which requires that the notice include among other things "a statement that the complaining party has a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law." The video was promptly removed. Lenz responded with a DMCA counter-notification, and the video was re-posted several weeks later.

Lenz then instituted suit against Universal for damages and attorney fees under § 512(f) of the DMCA, alleging that in issuing the takedown notice, Universal lacked the statutorily required "good faith belief" that her use of the song was infringing. In the latest ruling in the action, Judge Jeremy Fogel in the Northern District of California ruled that the takedown provisions of DMCA § 512(c) require a copyright owner to "consider the fair use doctrine in formulating a good faith belief that 'use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.'" Lenz v. Universal Music Corp., No. 07-3783 (N.D. Cal. Aug. 20, 2008) (emphasis added).

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RAM Copying - An Issue of More Than Transitory Duration

In The Cartoon Network LP, LLP v. CSC Holdings, Inc., No. 07-1480 & 07-1511 (2d Cir. Aug. 4, 2008), the Second Circuit considered several important issues on the way to concluding that Cablevision's proposed operation of a remote digital video recorder (RS-DVR) system does not infringe the rights of reproduction and public performance of its program providers.

Perhaps the most important issue in the case for new media lawyers is the court's treatment of the issue of RAM, or buffer, copying. The Second Circuit concluded that while a copy in RAM may a "copy" under the Copyright Act, it is not a copy as a matter of law. In so ruling, the Second Circuit took on not only the oft-cited (and oft-criticized) Ninth Circuit opinion in MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993), it also took on the opinion of the Copyright Office, and arguably created a split in the circuits on the issue.

It should come as no surprise that the RAM copying discussion in The Cartoon Network case has been much commented on. The opinion leaves open many questions for resolution in future cases. The issue of the copyright status of such copying will doubtless recur. As the district court noted in its (overruled) opinion, “All digital devices utilize transient data buffers, which are regions of memory that temporarily hold data.” Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., 478 F.Supp.2d 607, 613 (S.D.N.Y. 2007).

Considering the fundamental nature of the issue, below is a review of the court's ruling with links to resources addressing the issue, including prior cases, a recent ruling, and some of the amicus briefs submitted in the case.
 

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Federal Circuit Says Open Source License Conditions are Enforceable as Copyright Condition

There are so few judicial opinions dealing with open source licenses that any single one is of great interest, but the pro-open source ruling of the Court of Appeals for the Federal Circuit in Jacobsen v. Katzer, No. 2008-1001 (Fed. Cir. Aug. 13, 2008) easily goes to the top of the charts of this small category. This is a highly significant opinion that will greatly bolster the efforts of the open source community to control the use of open source software according to the terms set out in open source licenses.

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Eleventh Circuit En Banc Rules in "Old Wine, New Bottles" Dispute Over CD-ROM Version of National Geographic Magazine

Greenberg v. National Geographic, in which photographers seek royalties for the inclusion of their works in the CD-ROM version of the National Geographic Magazine, is a case with legs, that's for sure. First filed ten years ago, it has been argued at the circuit court level three times, with several trips back to the trial court and at least one petition for certiorari to the U.S. Supreme Court. Only a few weeks after the first Eleventh Circuit court ruling in the case, the U.S. Supreme Court rendered its opinion in New York Times Co. v. Tasini, 533 U.S. 483 (2001), finding that freelance writers of newspaper articles are entitled to royalties for the inclusion of their works in an electronic database. Subsequent proceedings in Greenberg have sought to grapple with the applicability of the Tasini ruling that the disaggregation of the articles in an electronic database was outside the privilege provided in § 201(c) of the Copyright Act for a "revision" of a collective work under.

 In the latest opinion in Greenberg, the en banc ruling on June 30, the majority held that the CD-ROM version of the National Geographic Magazine is a privileged "revision" under § 201(c) because the CD-ROM presentation, unlike the electronic database in Tasini, replicated the "contextual fidelity" of the original collective work. That means, of course, that the plaintiff photographers whose works were included in the original, print version of the magazine, unlike the freelance writers in Tasini, are not entitled to royalties for the inclusion of their works in the CD-ROM version. There are two vigorous dissents.

 

 

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District Court Points to Conflicting Ninth Circuit Precedents on Copyright First Sale Doctrine

Some commentators on the ruling of the District Court in Vernor v. Autodesk [citation] are touting it as a victory for the applicability of the copyright first sale doctrine to licensed software, and while that is literally true in terms of the result in the case, it may not remain in the "win" column in the long run.  In ruling on the issue, Judge Richard A. Jones sent a clear signal, something like a really loud shout, to the parties and to the appellate court to the effect that precedents in the Ninth Circuit on the copyright first sale doctrine are conflicting and need to be reconciled.  Continue Reading...
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