Copyright law preempts certain state law personal rights, including misappropriation of someone’s likeness or identity.  For example, the right of an individual to prevent a third party from exploiting that person’s image or voice is trumped when that third party purchased the rights to the sound recordings (i.e. the copyright) of that person’s voice.

Similarly, someone like celebrity blogger Perez Hilton might argue (and did argue in a recent lawsuit, somewhat successfully) that he had protection under copyright law (as “fair use”) to copy someone else’s copyrighted photographs.  And Hilton might further argue (and did argue in that same lawsuit, although not as successfully as his fair use argument) that his copyright claim preempts any attempt by that aggrieved copyright holder to pursue other legal arguments against Hilton.

And THAT, in beautiful incoherent summary, is how Perez Hilton might make some very good law and teaching on federal copyright law!  Like OMG!

Perez Hilton v. X17

In 2007, celebrity gossip blogger Mario Lavandeira, better known as Perez Hilton, was sued by the paparazzi photo agency X17 for copyright infringement in using its photos without permission, nor offering any form of compensation, nor acknowledging where the pictures came from.  X17 sued for copyright infringement and for “hot news” misappropriation.

The term and theory of “hot news” comes from the 1918 Supreme Court case of International News Service v. Associated Press in which the AP accused International News Service of purloining stories that required time, money, and journalistic effort to produce. The news is “hot” due to the fact that the news is of interest largely due to its freshness – or hot-ness.

It’s easy to see why X17 would claim Perez Hilton’s actions constituted hot news misappropriation. Paparazzi are known to camp outside celebrities’ houses and hotspots for hours just to snap one decent picture. For X17, this is the nut of their business.  Inarguably, much value in that business is dissipated if its exclusivity or first-in-time status is lost.

Undoubtedly, too, many of the visitors to Hilton’s site may believe he is the first to feature these photos.

An argument could be made, though, that the celebrity photographs of paparazzi should not legally constitute “hot news”.  It might be noted, for example, the lack of “news” value in the photos, certainly in the sense of comparison with the “hot news” subject matter traditionally protected by the International News Service doctrine.  That question may be litigated in the X17 case, including Hilton’s argument that “hot news” applies only to text (and not to photographs). The immediate interest here, though, is Hilton’s defense argument that X17’s claim of “hot news” misappropriation should be dismissed as preempted by the federal Copyright Act preempted it.

Hilton argued that his use of the photographs was permitted as “fair use”, a claim that would kick in the federal Copyright Act and therefore any claim that the Copyright Act preempts a state law claim of “hot news” misappropriation.  If the Copyright Act did indeed preempt the state law claim, then X17’s claim of “hot news” misappropriation would be automatically rejected.  X17 would then have only a possible claim of copyright infringement, and would have to persuade against an argument of fair use.

California’s Central District Court denied Hilton’s preemption motion, however, ruling that the federal Copyright Act does not preempt California’s state-law “hot news” misappropriation claim.

Copyright Preemption

The court noted that Congress’ 1976 amendments to the Copyright Act did establish the doctrine that federal copyright generally preempts state law claims, but highlighted two important conditions:

1. The work must fall within the scope of the Copyright Act.
2. The rights of the owner claimed under the state law must be equivalent to those rights protected by the Copyright Act.  If any rights other than reproduction, performance, distribution or display of the work are involved under the state law, then the state law is not considered equivalent and thus not preempted.

Put another way: Person A owns copyright to a work.  Person B claims rights to make some use of the copyright work under a fair use or other copyright argument. Person A claims that Person B has infringed Person A’s copyright, and further claims that Person B has violated a non-copyright state law right of Person A – even conceding the validity of Person B’s fair use claim.  Person B responds that Person A’s non-copyright state law claim against Person B is “preempted” by the Copyright Act, and therefore the non-copyright state law claim should be dismissed.  Person A responds that Copyright Act preemption is not applicable in this case because Person A’s state law claim seeks to protect rights that are different – i.e. not “equivalent to” – Person A’s rights under the Copyright Act.

In the Perez Hilton case, the court cited cases where “hot news” misappropriation was found to involve protection of rights other than reproduction, performance, distribution or display.  The time-sensitive, first-to-break-the-story element of hot news, for example, is not a right “equivalent to” the essential rights protected by the Copyright Act.  Nor is the protection of investment from gathering time-sensitive information.

In rejecting Hilton’s claim, the court distinguished misappropriation from copyright infringement.  Misappropriation – or, in plain English, theft – seems pretty much another way of saying copyright infringement.  And there is clearly and obviously overlap, but the essentials of the two claims are different.  As the court noted, the essence of misappropriation is a claim of improper use for a trade purpose, while copyright infringement generally involves improper or unauthorized use for an expressive purpose.

Kind of subtle to the point of seeming meaninglessness, but the distinction does have legal significance as shown in these cases.  The main significance is that the requirements for establishing the two claims are different.  Thus, a defendant in a copyright infringement case could argue – as Perez Hilton argued here – that his use of the copyrighted material was fair use under copyright law.  But if a plaintiff can show misappropriation – that is, access to the “stolen” property, actual taking of the property, and no valid claim of “right” to taking the property under property law – then the defendant’s copyright defense would not matter.

NFL Films

In another recent copyright preemption case, the US Third Circuit Court of Appeals held that federal copyright law does not preempt a state law right of publicity claim in Pennsylvania.  A state law right of publicity claim involves a person’s exclusive right to promote everything about themselves – including appearance and voice.  Like many right of publicity cases, the Pennsylvania case involved a claim of unauthorized or false endorsement of a product or service.

The case was brought by the estate of John Facenda, a man with a particularly distinct voice, one that many football fans referred to as “The Voice of God” for his voiceover work with NFL Films from 1965 until his death in 1984.  Under his contract with NFL Films, Facenda granted NFL Films exclusive rights to use his voice and image for any purpose except an endorsement of a product or service.

In 2005, NFL Films used Facenda’s voice in a TV special on the making of the Madden NFL ‘06 video game.  Facenda’s son Jack sued NFL Films, claiming it had violated his father’s right of publicity by using Facenda’s voice to endorse the video game.  The Third Circuit decision was an appeal of a summary judgment ruling in favor of the Facenda family in the District Court.

NFL Films argued that its rights to exploit the copyright to Facenda’s voice – by way of the rights it obtained under its contract with Facenda – preempted Facenda’s state law right of publicity claim.  The appeals court rejected the NFL Films’ preemption claim, finding that the privacy rights sought to be protected under state law – right of publicity, right to exploit your name and image, right to endorse products – were not “equivalent” to rights protected by the Copyright Act and held by NFL Films under its contract.

As with Perez Hilton, here we turn again to the issue of whether a work is used for creative or commercial purposes.  NFL Films argued that its program was a documentary, and since noncommercial therefore purely expressive – a core copyright subject.  Facenda’s family, however, persuaded the court that the program was essentially promotional material for a commercial product, a video game.  Of some significance to the ruling was determining whether Facenda’s voice had commercial value, something NFL Films was unable to refute.

*            *            *

It might be of interest that Perez Hilton now acknowledges the source of most photos on his site.  That might buttress his fair use arguments, though not likely relieve his exposure to misappropriation claims.  The NFL Films case is conceptually baffling because the commercial nature of the NFL’s self-promotion always seemed so obvious.  Not least including the “Voice of God” wrap-up summaries every Sunday.  Like so many areas of intellectual property law (READ: Tassini), the case might simply argue for better contract drafting rather than any serious reconsideration of policy.  That makes the NFL Films case materially different from Perez Hilton’s since it turns on questions of contract interpretation as much as arcane concepts of copyright.

Similarly, someone like celebrity blogger Perez Hilton might argue (and did argue in a recent lawsuit, somewhat successfully) that he had protection under copyright law (as “fair use”) to copy someone else’s copyrighted photographs.  And Hilton might further argue (and did argue in that same lawsuit, although not as successfully as his fair use argument) that his copyright claim preempts any attempt by that aggrieved copyright holder to pursue other legal arguments against Hilton.

And THAT, in beautiful incoherent summary, is how Perez Hilton might make some very good law and teaching on federal copyright law!  Like OMG!

Perez Hilton v. X17

In 2007, celebrity gossip blogger Mario Lavandeira, better known as Perez Hilton, was sued by the paparazzi photo agency X17 for using their photos without requesting permission, offering any form of compensation, or acknowledging where the pictures came from. They sued for copyright infringement and for “hot news” misappropriation.

The term and theory of “hot news” comes from the 1918 Supreme Court case  International News Service v. Associated Press in which the Associated Press accused the International News Service of stealing stories that required time, money, and journalistic effort to produce. The term “hot” refers to the fact that the news is brand new. Thus, taking news from someone else prevents them from claiming they broke the story. You can see why X17 would claim this is in the same vein of their problem with Lavandeira. Paparazzi are known to camp outside celebrities’ houses and hotspots for hours just to snap one decent picture. For X17 and its employees, for Lavandeira to copy those pictures and post them on his for-profit site is a gross misappropriation of work. In addition, some of the millions who visit Lavandeira’s site may believe he is the first to feature these photos.

Lavandeira filed to dismiss the hot news misappropriation, claiming that the federal Copyright Act preempted it and that hot news applied only to written words, not photographs.  If federal copyright law preempted California’s general tort of misappropriation, Lavandeira would argue that his right to take the photographs was protected by the Copyright Act under the fair use doctrine.  He claimed the photos were fair use because he took them off the public space of the Internet.  California’s Central District Court denied the motion, saying that the Copyright Act does not preempt hot news and that photographs can constitute hot news.

As the court explained in its denial of the motion, the 1976 amendments to the Copyright Act established that copyright preempts state law, with two conditions:

1. The work must fall within the scope of the Copyright Act.
2. The rights claimed under the state law must be equivalent to those protected by the Copyright Act.  If anything other than reproduction, performance, distribution or display is involved under the state law, than the state law is not considered equivalent and thus not preempted.

Or put another way: Person A might claim rights to do something because they own a relevant copyright (or have a plausible fair use claim to use the copyright).  Person B claims that Person A has violated some other right of Person B – even conceding the validity of Person A’s copyright claim.  Person A responds that Person B’s non-copyright claim against Person A is “preempted” by the Copyright Act, and therefore should be dismissed.  Person B responds that preemption is not appropriate in this case because Person B’s particular claim has elements different than what’s covered by the Copyright Act.

In the Perez v. X17 case, the court cited precedent in a number of cases in which other courts held that hot news misappropriation involved elements other than reproduction, performance, distribution or display.  The time-sensitive, first to break the story element of hot news, for example, is not an essential part of the Copyright Act.  Nor is the investment of gathering time-sensitive information.

The court’s denial of Lavandeira’s claim reiterated that misappropriation and copyright infringement are not necessarily the same thing. Misappropriation of a work generally involves using it for trade purposes whereas copyright infringement generally involves using it for expressive purposes.  Though the Perez v. X17 case was eventually settled for an undisclosed amount and dismissed, it remains a clear example of the limitations on federal copyright preemption.

NFL Films

In Facenda v. NFL Films, Inc. et al., the U.S. Court of Appeals for the Third Circuit found that federal copyright law does not preempt Pennsylvania’s right of publicity law. Right of publicity simply means that you have the exclusive rights to everything about you – from your appearance to your voice. The case involved the estate of John Facenda, a man with a particularly distinct voice, one that many football fans referred to as “The Voice of God” for his work with NFL Films from 1965 until his death in 1984.  Before his death, Facenda signed a release that said NFL Films had the exclusive rights to use his voice and image for anything except an endorsement of a product or service.

In 2005, the NFL used Facenda’s voice in a TV special on the making of the Madden NFL ‘06 video game. Facenda’s son Jack sued NFL Films, claiming they had violated his father’s right of publicity and were using John Facenda’s voice to falsely endorse the video game. After the U.S. District Court for the Eastern District of Pennsylvania granted a motion for summary judgment for both of these claims, NFL Films appealed to the Third Circuit.

Given the release from Facenda, NFL Films hoped that federal copyright law would preempt the Facenda Estate’s right of publicity claim. As with the Perez Hilton case, the court dismissed the preemption claim on the grounds that the state law involved something outside the scope of copyright infringement. The right of publicity claim involved determining whether or not Facenda’s voice had commercial value, something NFL Films could not deny.

Here again we return to the issue of whether a work is used for creative or commercial purposes. While NFL Films argued that its TV special using Facenda’s voice was a documentary and thus protected under the First Amendment and the Copyright Act, Facenda’s Estate argued that the show was just promotional material for the video game. The Third Circuit sided with Facenda’s Estate, agreeing that the TV special was essentially an infomercial for the video game. Again, as with the Perez Hilton case, the use of the work for commercial purposes counted against the federal copyright preemption claim.

*            *            *

In a nutshell, if you’re making money off someone else’s work and you get sued based on a state law, it’s likely that claiming federal copyright preemption won’t fly.

As for the impact of these cases on the people involved, Perez Hilton now acknowledges the origin of most photos on his site.  It remains unclear, however, if sports leagues now put more explicit language in contracts with their stars and more thought into whether a documentary could be construed as a commercial.

As I wrote:

Because like a lot of things that the internet did not change, it did not change the law of libel.  In terms of what the internet did change, two things in particular are striking: First, the now potentially worldwide audience for anything published.  And second, and sometimes of even more significance, the removal of barriers to entry.  Or put another way: Everyone is a prospective publisher.

Several recent stories vividly illustrate the point, including an article in last Thursday’s New York Times about suicide chat rooms and prominent recent lawsuits in New Jersey and Louisiana involving attempts to “out” the names of anonymous online authors.

The Times reported that a Minnesotan named William F. Melchert-Dinkel was charged with aiding the suicide deaths of a British man in 2005 and a Canadian woman in 2008.  Whatever can be said of his actions (and whatever might be deemed “just words”), Melchert-Dinkel’s actions were done solely via the internet and solely in the form of words.

The case is novel for several reasons, including the location of the presumed “conduct” – in Minnesota?  In Canada?  In the UK? – as well as the not-so-novel questions of individuals being held accountable for words alone.

Libel, of course, is all about words – no need to argue the fine points of conduct versus speech – so the Louisiana suit involving Jefferson Parish interim president Steve Theriot raises no real conduct issues.  Lucy Dalgish of the Reporters Committee for Freedom of the Press is quoted in a Times story on Theriot, saying “Cases involving anonymous commenters are now ‘where the action is in libel suit,’” and Dalgish appears right, if only for the fairly predictable result of expanding to the sky both the publishing ranks and a prospective publisher’s audience.

Put another way, we are not in Louisiana anymore.  As Randall Stross wrote last week in “Digital Domain”,

… [T]he online world … is already a very open and connected place, thank you very much.  Densely interlinked Web pages, blogs, news articles and Tweets are all visible to anyone and everyone.

In the Louisiana case, the allegedly libelous statements (including “just another Jefferson Parish politician thug mobster”) were made by registered users of the website of the New Orleans Times-Picayune, known as Nola.com.  That is, the names are known to Nola, and the suit seeks their disclosure but does not claim defamation by the website.

In the New Jersey case, Too Much Media v. Hale, a website operator unsuccessfully sought to protect the identity of third party contributors to her site as “sources” covered under New Jersey’s reporter’s “shield” law.  The New Jersey appellate court ruled that the website operator could not claim the shield law’s protective rights because her publishing activity did not qualify her as a journalist.  Perhaps the most interesting passage by the court was this one, giving the back-of-the-hand to a claim of 1st Amendment privilege by every Tom, Dick and Harry with a webcam and an internet connection:

However, the fact of presenting information on a new, different medium, even if capable of reaching a wider audience more readily, does not make it “news,” for purposes of qualifying for the newsperson’s privilege.  Simply put, new media should not be confused with news media. There is, of necessity, a distinction between, on the one hand, personal diaries, opinions, impressions and expressive writing and, on the other hand, news reporting. The transmission or dissemination of a “message” through the new medium of the Internet, or the display of one’s content or comment thereon, does not necessarily entitle the author or writer to the same protection as a “newsperson.”

The separate subject of what constitutes a “journalist” for shield law and other 1st Amendment press protections is a subject for another day and a different blog.  And one might lament the clearly conservative (some would say “stuck in the mud” crankiness) recalcitrance of the New Jersey court.  But the broader law of these cases is not new or even particularly reactionary: Words have consequences in our society and published words have even greater consequences.  Now take those published words and publish them even wider, and lower the barriers to publish, and the consequences can get quite interesting.

Commentary on the episode leaned heavily to the view of “what gall!” of Apple to presume rights to regulate content.  So, for example, Rob Pegoraro wrote in the Washington Post last week:

If this conduct seems arbitrary, that’s because Apple gives itself that liberty.  The Cupertino, Calif., company’s iPhone developer agreement, as published by the Electronic Frontier Foundation, says Apple can reject an application “at any time” if it thinks rejection would be “prudent or necessary.”

Pegoraro commented that Apple had subsequently “relent”-ed, and presumably characterizing Apple’s conduct as “arbitrary” was appropriate.

And indeed, “arbitrary” may be appropriate, although usually typically the word is thrown around in characterizations of government action like “arbitrary and capricious”.  The stuff of epochal Supreme Court 4th Amendment cases challenging the Bush Administration, for example.

Two thoughtful takes on a broader related point were published in the last week, first by Michael Kinsley in the Atlantic and by William McGurn in the Wall Street Journal.  Both are worth reading if only to appreciate contrarian views when society of a collective pile-on of “The Man” (aka Apple).  Michael Kinsley, in particular, is as usual vibrant, his arguments are entertaining and his conclusions read as if seemingly inevitable.

Kinsley and McGurn both suggest that journalists from traditional media (daily newspapers, presumably) usurp the 1st Amendment as their own unique sword AND shield, most recently illustrated with an explosion of “shocking, just shocking!” at the Supreme Court’s Citizens United case recognizing strong 1st Amendment rights for corporations, and similarly the collective “huh?” in response to the more recent Gizmodo/Apple smackdown in California.  In Citizens United, the simple idea (as the Court did write) that the 1st Amendment really does prevent the government from playing favorites with speech OR with speakers – in and of itself, a full-throated empowering of the 1st Amendment – was lost in the din of criticism focusing instead on the seemingly pro-corporation and pro-money line-up of the Justices.

In the Gizmodo/Apple “situation”, much frothing was done over Apple’s “Gestapo-like” tactics, actions that would have made the Chicago Police blush.  Yet here too, a 1st Amendment angle was missed.  No, not the argument about bloggers being journalists: McGurn strongly supports Gizmodo’s argument that bloggers are in fact journalists and thus eligible for the same protections as more traditional media organizations.

Media types will argue – with some credibility – that for both historical and for good public policy reasons, the press MUST have a special place under the 1st Amendment.  And a problem – a serious one – for those opposing this view is a quick reading of the 1st Amendment itself, namely something about “Congress shall make no law … abridging the freedom of speech, or of the press”. This space today is not intended to be the place to debate the issue, suffice for now to say pretty clearly that the Amendment applies specifically to the press – not just freedom of speech.

But again, that issue is for another day.  Citizens United seemed to get under skins not for any challenge to the press, but to a seeming elevation of the 1st Amendment protections for speakers who were NOT the press.  To many observers, that in turn, seemed to challenge the “special” place of the press in American society simply by even hinting that others might share similar rights.  William McGurn in the Wall Street Journal put it this way:

These days, alas, too many journalists and politicians assume that a free press should mean special privileges for a designated class. The further we travel in this direction, the more the government will end up deciding which Americans qualify and which do not.

I think this is an apologist’s perversion of Citizens United.  As a lawyer working with and for new media individuals and companies, I am sympathetic to the arguments for a robust 1st Amendment and, in particular, special protections (including “shield” laws) for the press.  Kinsley and McGurn both offer excellent perspectives on the harm done to the press by the press itself with arguments and assumptions, to the effect, that (a) by virtue of these protections, “the press” must be given unquestioned and great deference and assumptions of infallibility – and immunity from laws such as libel, and (b) the idea, blossoming with blogs and microblogs and reduced barriers to entry into media through online publishing, that anyone who “publishes” is a journalist – and therefore is automatically eligible for these great protections.

Nonetheless, sensitivity to these problems must still recognize the realities of “new media”, a field which potentially includes a publisher group a LOT broader than news media and bloggers.

Spend any time on the Internet and – like the naif in the ‘Casablanca’ gambling room dumbfounded when the wheel comes up 22-black twice in a row – one’s bound to ask, ‘Say, are you sure this place is honest?’

This sort of thing seems oddly hilarious and at the same time naïve in the same way as the fool in Casablanca, in whose defense one could at least say it was a different time.  Last I checked, there was no giant sign over the entrance to the internet saying “tread warily here”, although Felten’s point about the sensitivity of individuals to words being written about them is hardly a new concept.  Just one small point of reference: I handle a fair amount of pre-publication review of publications for libel (i.e. in advance of actual publication), and one thing I usually drill into my publishing clients is being somewhat sensitive to the litigatory likelihood of the person about whom words are being published.

I’m not saying shy away from controversial journalism, and it’s advice that probably did not compel the muckracking vision of Woodward and Bernstein or the “American Century” mantra of Henry Luce.  Nonetheless, don’t ask a libel lawyer for advice unless you’re willing at least to consider whom you’re writing about if one of your goals is simply to avoid getting sued.

Because like a lot of things that the internet did not change, it did not change the law of libel.  In terms of what the internet did change, two things in particular are striking: First, the now potentially worldwide audience for anything published.  And second, and sometimes of even more significance, the removal of barriers to entry.  Or put another way: Everyone is a prospective publisher.

A third and possibly even more “magical” contribution of the internet to the law of libel involves imaginative expansion of the types of publishing that can be libelous.

Example number one is a suit Felten writes about against Yelp by a California veterinarian, claiming that Yelp’s rating system results in fraudulently produced and therefore libelous reviews of services (such as the veterinarian’s) derived from rankings that are at least partially driven by competitor’s purchasing of Yelp local advertising.  Yelp defended its case and its rating system, arguing that its reviews are “completely independent of advertising – or any sort of manipulation.”  With thinly veiled sarcasm, Felten notes that Yelp coupled its vigorous defense with a simultaneously announced discontinuance of the challenged ratings process based on advertising.

Much of libel litigation on the internet – and much of privacy law, and similar torts involving personal reputation and privacy matters generally – focuses first on the “outing” of anonymous bloggers, commenters and other sources of allegedly defamatory commentary, product reviews, critiques and what not.  That anonymity, in turn, owes its robustness to the late-1990s Communications Decency Act (CDA) and Digital Millennial Copyright Act (DMCA) laws protecting internet service providers and website operators from liability for copyright infringement or defamatory conduct of users of the operators’ web forums, chat rooms, product review pages, YouTube and on and on.

So, on the one hand there are the ISPs and websites (AOL in the early years, Craigslist and Roommates.com in more recent years) taking advantage of the largely “see no evil” legal protections accorded by laws like the CDA and the DMCA: That is, with only modest simplification, as long as the copyright infringer or defamer is an unrelated third party user of the website, the website operator is immune from liability.

That is the one hand.  The “other hand” view is not exactly “opposite”, but it may be moving to be different. While the national default position remains quite protective of operators’ right to refuse to disclose users’ names and identities, recent state appeals court cases – including a leading early 2000s New Jersey case, Dendrite, the more recent Brodie case in Maryland, and Solers in the District of Columbia  - have chipped away at the efforts of website operators to extend their CDA and DMCA legal immunities to include non-responsibility for identification of anonymous content posters.

But with the exponential increase in lawsuits filed over libel and other torts for online activity, one might expect a continuing degradation of these protections for website operators under the withering onslaught of contributory and/or vicarious liability arguments.  The YouTube-Viacom lawsuit goes on (and on, and on, and on) seemingly tackling these very arguments, albeit in the copyright infringement arena rather than libel.

As media lawyers never tire of writing, though, the internet did not do away with the First Amendment and the law is still the law.  So, as David Johnson wrote last year in his “Digital Media Lawyer Blog”:

The amount of First Amendment protection offered to anonymous speech, like all other protected speech, varies with the class of speech involved. For example, where disclosure of a speaker’s identity would chill his ability to exercise his political rights, the U.S. Supreme Court has absolutely refused to permit disclosure of his identity. NAACP v. Alabama ) (1958) [Citation omitted]; Talley v. California (1960) [Citation omitted]. On the other hand, the Court has found that defamatory and libelous speech gets no Constitutional protection. Chaplinsky v. New Hampshire (1942) [Citation omitted].

The reality is that, even without success of plaintiffs’ lawyers in breaching these powerful immunity barricades, website operators and publishers always have the prerogative of becoming more aggressive in re-writing – and then enforcing – website terms of use.

We do see this starting to emerge with the increasing sophistication of content-sharing services owned by e larger and more traditional media organizations (Hulu is a decent example).  With increasingly locked-down commercial control over content distribution, the industry’s arguments about the effectiveness and sufficiency of self-policing against personal privacy torts and reputation torts and copyright infringement could become more and more credible.

Here’s an interesting dilemma for a potentially dominant technology or communications platform: Early Twentieth Century Supreme Court cases found a “public” (and therefore “government” and therefore subject to regulation) role of company towns and their attempts to enforce “private” laws through company-supported police powers.

What happens if Apple’s shiny new iPad gizmo becomes the de facto town square?  Or put more succinctly: What happens when newspapers, magazines and speech generally – presumably limitless and unfettered in the age of the internet – become practically available only on a receiving device available only (or largely) through Apple?

I suspect that antitrust law would be invoked and could sort this out, but that usually happens way down the pike and well after the market – and its implications and winners and losers – has fairly settled out.

But if the case involving Apple’s rejection of cartoonist Mark Fiore’s iPhone app – at least, its rejection before he won the Pulitzer Prize last week – demonstrates anything, it may be nothing new at all.  After all, Apple never pretended to be anything but discriminatory in its editorial control of its “App Store”.  Apple’s same license language quoted by Chittum in the CJR (“Applications may be rejected if they contain content or materials of any kind … that in Apple’s reasonable judgement may be found objectionable, for example, materials that may be considered obscene, pornographic, or defamatory”) is no more or less restrictive or arbitrarily discriminatory than similar language found in Terms of Service found on the most established websites.  Here, then, from the Terms of Service for the New York Times website:

You acknowledge that any submissions you make to the Service …. may be edited, removed, modified, published, transmitted, and displayed by The New York Times Company and you waive any rights you may have in having the material altered or changed in a manner not agreeable to you” (emphasis added).

And these restrictions don’t even bother qualifying themselves with the gratuitous “reasonable judgement” conceded by Apple.

Could this really be more about control of distribution on the Internet?  Or about … control of the Internet?  Apple’s success in transforming music distribution with its ubiquitous iPod (yes, iPod with an “o”) seemingly resulted from simply building a better design than.  While Apple’s limitations in transforming music distribution seemingly resulted solely from Apple’s inability to cut deals with all music labels.

Why should textual content distribution really be any different?  Last fall, Rupert Murdoch’s News Corporation threatened to limit the availability of its content through Google and other search.

Presumably, the New York Times or CJR could do the same through the iPad, Kindle, Sony Reader or Barnes & Noble Nook.

(Although the telling takeaway from the News Corp. experience may be Google’s proverbial shrug in response.)

In a New York Times story last week about the Pulitzer cartoon incident, cartoonist Fiore waxes philosophic: “Sure, mine [iPad app] might get approved, but what about someone who hasn’t won a Pulitzer and who is maybe making a better political app than mine?  Do you need some media frenzy to get an app approved that has political material?”  Well, not necessarily, and it does seem kind of silly that Steve Jobs would now personally reach out to Fiore.  But then again, why would Apple not want to grant a popular political cartoonist a presence on its popular reading tablet?  And why shouldn’t Apple be able to simply make a business decision that some sort of threshold public interest in the application need be attained to merits Apple’s attention?  The alternative presumably would require that Apple embrace all political speech and all potential demands for its desktop space.

We’ve seen this before in other areas of the law.  An example is the perpetually swinging pendulum of 1st Amendment Establishment Clause governance, where on the one hand government must permit and not inhibit all religious comers, or then affirmatively not allow anybody to do anything.

But back to the original question (or back to our question of original intent?): Why should Apple – a private company with a private commercial product – be required to conform with either view of an “open” forum of speech?

The first will be Monday April 19th at 2pm, and called “Is this Barack Obama’s Real Facebook Page? Domains, Twitter Handles, Online Presence – real or fake? Intellectual Property, Cyber Identity, and More!”.  I will be joined on the panel by Jason Torchinsky of Holtzman-Vogel, Matt Sanderson of Caplin & Drysdale and Neal Seth of Baker Hostetler.

The second will be Tuesday April 20th at 10:30am, and called “Laws Affecting Digital Communications – Copyright, Privacy, Elections/FEC, Advertising, Libel, Contract Law, etc.  Rules, Regs, Fines and Community “Standards” Applicable to Communicating in Digital Media.”  On this panel, I will be joined by Jason Torchinsky of Holtzman-Vogel and John Stewart of Crowell & Moring.

Details at polc2010.com/.

From this perspective, a more alarming (from the publishing industry’s perspective) competitive threat on the market today is the low-cost pricing of hardcover books (including current bestsellers) at places like Target, Costco and Walmart.  The fact that Amazon agrees to raise the basic Kindle book price helps alleviate publishers’ pain only so long as the electronic book market seriously impacts the book purchase market and – which is nowhere near the case – and only so long as Amazon (and a very few smaller competitors) dominate electronic retail – which they do.

And this is precisely the point book industry veteran Jason Epstein makes in his March 11th essay in The New York Review of Books, “Publishing: The Revolutionary Future.”  For the book publishing industry has been reeling since well before the appearance of the Kindle or Sony Reader or, for that matter, since well before the digital migration.  Admits Epstein, “This historic shift” of digitalization “will radically transform worldwide book publishing, the cultures it affects and on which it depends.”  However, why the shift remains so difficult for traditional book publishers has much to do with decades-old trends:

“Meanwhile, for quite different reasons, the genteel book business that I joined more than a half-century ago is already on edge, suffering from a gambler’s unbreakable addiction to risky, seasonal best sellers, many of which don’t recoup their costs, and the simultaneous deterioration of backlist, the vital annuity on which book publishers had in better days relied for year-to-year stability through bad times and good.  … The resistance today by publishers to the onrushing digital future [arises] from the understandable fear of their own obsolescence and the complexity of the digital transformation that awaits them, one in which much of their traditional infrastructure and perhaps they too will be redundant.”

Epstein thoughtfully weighs consumer misperceptions about e-books with the publishers’ dilemma.  Consumers, not surprisingly nor unreasonably, might think that electronic book pricing should benefit from the avoidance of the physical costs of publishing, most obviously inventory, manufacturing, paper and distribution.  Of course the industry wants to maintain or even increase profits, which includes covering losses from poor sellers in both print and electronic.  Whether true or not, it is not the whole story.  The reality of publishing still very much involves the huge majority of bookselling in print, via physical retail stores or online sellers.  Put another way, one great obstacle to the evolution of publishing is the lack of evolution in the buying market.

As Epstein later told NPR for its story, “One thing that publishers do have to consider in thinking of pricing is that they don’t want to liquidate their existing retail structure by making it so inexpensive to get an e-book that people won’t go to bookstores at all and then publishers will have no place to sell the 90 percent of the books they do create in the physical form.”

On the other hand, Epstein’s own writing on the subject – a much broader futurism on the limitless possibilities of a digital publishing landscape – seems quite a bit more sanguine about publishing’s future than might be gleaned from the quotes in his subsequent interview for NPR’s story.

Nonetheless, his sympathies obviously lie with a stodgy but (in his view) celebrated industry generally apoplectic about both present and future.  He doesn’t seem to lack any confidence that the industry can survive and thrive (“The more adaptable of today’s general publishers will survive the redundancy of their traditional infrastructure but digitization has already begun to spawn specialized publishers occupying a variety of niches staffed by small groups of like-minded editors ….”).  But he offers compelling economic and cultural arguments for why the market publishers currently resist basement-rate pricing for e-books as well as why, inevitably (if not immediately) the market will absorb and reflect the business reality “with or without the cooperation of [publishing’s] current executives”.

For a group that tends to dispute everything even a position that would presumably only side in their own interest, academics too must conced the legal ambiguity of the copyright law’s “work for hire” doctrine when applied to the academic setting.  What probably not in dispute is, as one commentator describes it, that “Traditionally, it was presumed that educators owned copyrights to academic work they have authored or created.”

True, it was (and is still) assumed, but it was never codified in the Copyright Act and never directly established by caselaw.  That too is not in dispute.  Thus to characterize a theoretical university’s position, on the bare facts of the employment relationship: “Educational institutions … claim an interest in the work and point to the faculty’s use of their resources in its creation.  Institutions also can assert that producing such work is part of the educators’ employment obligation.” (http://ow.ly/18O9A)

To be sure, with exceptions for adjuncts and other guest lecturers, most teachers would be considered employees of their colleges and universities.  It is hard to imagine that most teachers would care to dispute that claim, as evidenced by their benefits eligibility, academic protections and broad use of school resources, among other obvious indicia.

The reality is – or, until recently, was – that none of this really mattered.  Not much was at stake in the pre-online and –distance education days.  In one of the rare but prominent pre-internet era cases addressing the issue at all, an “academic exception” to the copyright work for hire doctrine was acknowledged based both on tradition and policy.  The University of Chicago’s and Federal Judge Richard Posner wrote for the 7th Circuit in Hays v. Sony Corp. of America (847 F.2d 412, 416 (7th Cir. 1988)):

“Although college and university teachers do academic writing as part of their employment responsibilities and use their employer’s paper, copier, secretarial staff, and (often) computer facilities in that writing, the universal assumption and practice was that (in the absence of an explicit agreement as to who had the right to copyright) the right to copyright such writing belonged to the teacher rather than to the college or university.

“Nevertheless it is widely believed that the 1976 Act abolished the teacher exception [citations omitted] – though, if so, probably inadvertently . . . .  To a literalist of statutory interpretation, the conclusion that the Act abolished the exception may seem inescapable . . . .  But considering the havoc that such a conclusion would wreak in the settled practices of academic institutions, the lack of fit between the policy of the work-for-hire doctrine and the conditions of academic production, and the absence of any indication that Congress meant to abolish the teacher exception, we might, if forced to decide the issue, conclude that the exception has survived.”

In any event, a university’s hard-line position on this might only be ‘theoretical’ because, as noted by the Sloan Consortium, “[m]any institutions have created policies that formally recognize the academic exception and have voluntarily given faculty ownership of scholarly and teaching works.”

Any actual kerfuffle over this issue was one of recent making, illustrated by a dispute about ten years ago between Harvard Law School and Harvard law professor member Arthur Miller.  Without permission from Harvard, Miller had contracted with Concord University School of Law to videotape law lectures for use by Concord’s students.  This despite Harvard’s policy prohibiting faculty from outside teaching without permission.  (Miller evidently argued that, since the sessions were videotapes only and not live lectures, he was not technically “teaching” and not thereby violating the Harvard policy.)

As already noted, this issue hardly mattered until the relatively recent rise of the internet and the accompanying explosive commercial growth of online education.  In 2000, for example, the New York Times described this venture involving Williams College:

“Global Education Network, a company founded partly by Herb Allen, the president of the venture-capital firm Allen & Co., has approached Williams and Brown University, among others, with an invitation to contribute course material to a proposed for-profit Web site providing on line liberal arts education for adults.  Officials at Williams have said that the venture could earn the institution upwards of $250,000 per year, per course, for up to 10 courses.”

The looming academic food fight was noted only in parenthetical, discussing a different venture involving the University of Chicago where “Payment to participating professors has not yet been set.”

So, then, there is academic research and publishing tradition, there is copyright “work for hire” doctrine, there is caselaw including from one of the foremost conservative federal judges (and, not incidentally, academic heavy-weight).  There is analogy from patent law and university technology transfer practices, where inventions and discoveries are almost always owned by the institution for which a researcher works.  But there is no “academic exception” to “work for hire” doctrine, leaving faculty and non-faculty researchers and teachers potentially subject to the uncertainties of a fast-changing academic and commercial marketplace.  Academic copyright and research policies have attempted to allay faculty concerns, as have teacher participation in commercial ventures like those described above for Williams and Chicago.

I will write more on this subject shortly.

Significance of “Work Made for Hire”: The significance of a work being deemed “work made for hire” is that the beneficiary of that designation owns full copyright in the work outright and exclusively.  Thus, as between an employee an employer, the employer owns the copyright to any works created by that employee within the scope of his or her employment.  Likewise for a party contracting for the creation of a work from a non-employee.

“Work Made For Hire” and Non-Employees: For a work created by a non-employee to qualify as “work made for hire”, all three of the following criteria must be satisfied:

1. The work must be specially ordered or commissioned. In other words, the thing being contracted for must be something newly created for purposes of the particular transaction at issue, as opposed to sale or license of something already existing.

2. The work must be the subject of a written agreement or other written material, created and signed by both parties prior to beginning the work, stating their mutual intent that the work is to be considered “work made for hire”.

3. The work must fall into one or more of the nine categories enumerated in the Copyright Act, 17 USC §101.  These categories are:

a. A translation;

b. A motion picture contribution or other audiovisual work;

c. A collective work contribution (example: a magazine article, or contribution to an anthology or encyclopedia:

d. An atlas;

e. A compilation;

f.  An instructional text;

g. A test;

h. Answer material for a test; or

i. A supplemental work such as a preface to a book, a foreword, illustration, or musical arrangement.

Disputes as to “work made for hire” arise under several common areas, in particular these:

1. The distinction between an employee and a non-employee or independent contractor.  This issue was addressed in 1989 by the US Supreme Court in Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989).  A common scenario involves a party who commissioned a work in the absence of a written agreement as to “work made for hire”, arguing that the author or artist was in fact a statutory employee.  An employee might also argue that, while conceding the employee-employer relationship, nonetheless the work was created outside of the scope of the employment relationship.

2. Nonqualification of the relevant work under one or more of the nine categories enumerated in the Copyright Act.  Addressing this point, contracts often have an “belt and suspenders” kind of clause involving language providing that in the event a work is deemed not a “work made for hire” that, nonetheless, the author has agreed to an assignment of the full copyright to the commissioning party.  This is common particularly with software development agreements, since software is clearly not an included category in Section 101 of the Copyright Act.

Copyright Act of 1976:

http://www.copyright.gov/title17/

Other resources:

http://www.developerdotstar.com/mag/articles/daniels_softwarecopyright.html

http://www.metrocorpcounsel.com/current.php?artType=view&artMonth=July&artYear=2009&EntryNo=8329

http://www.theiplawblog.com/archives/-copyright-law-ownership-issues-underlying-the-work-made-for-hire-doctrine.html