Readers may be surprised to learn how often we are consulted by clients who face the following predicament: an individual or group of people get together to start a business. Working out of a home, or a garage, or a small workspace, they create a product or come up with a service that they think they can sell and proceed through sheer will and hard work to get the product or service to a point where the product really takes off.
Sounds like a success story, right? And it is. But then what too often happens is problems arise. Infighting starts about who created what, who owns what rights and who is entitled to what payments. And of course competitors notice the success of the product or service and before long knock-offs start appearing.
To do as much as is possible to protect against the foregoing problems and other intellectual property issues, we offer the following tips:
- Protect your intellectual property before you do anything else – consult with an experienced intellectual property attorney who can help identify what intellectual property rights exist and how best to protect them. Make sure you budget sufficient funds for legal advice and intellectual property protection – it will be money well spent in the long run.
- Put agreements in place to define specifically who created what intellectual property, who owns what and who gets what payments – such agreements can include corporate shareholder agreements, LLC operating agreements, license agreements, and assignment agreements. Also address at the front end what will happen if one or more of the founders wants out or if the success of the business fades – it is important to consider at the front end what will happen to the business assets and intellectual property down the road. The key is everything must be in writing – do not rely on trust, handshake agreements, oral agreements or any non-written agreement!
- A non-disclosure/confidentiality agreement is essential and must be in place before you discuss your product with anyone – and this includes not only potential vendors, business partners, etc. but also visitors to the place of business, friends, etc. if any protected details of products or services will be disclosed.
- Make sure to protect ownership through appropriate agreements – all employees and independent contractors should execute appropriate assignment agreements and work made for hire agreements. This is especially important with respect to website design and maintenance, marketing activities, outside sales people, and customer lists. It bears repeating: everything must be in writing!
- Put appropriate agreements in place if others will use your intellectual property to make sure there is no question who owns what and what uses can be made of the intellectual property.
On June 21, 2016, we published a post discussing an effort by the State of California to obtain copyright protection for public records. The proposed legislation sought to give copyright protection to public records created using taxpayer funds (such as maps, hearing transcripts, legislative reports, etc.), and would have authorized state and county governments to control and even prohibit their use. The proposed legislation met with strong opposition, primarily from free speech and open government advocates. Fortunately, the author of the controversial legislation (Assemblyman Mark Stone of Monterey Bay) saw the error of his proposal and has abandoned the proposed legislation.
The California Assembly recently passed a measure that would allow the state government to obtain copyrights for materials that it creates. Critics, such as the Electronic Frontier Foundation, claim that this measure could suppress the dissemination of government funded works. The measure, AB 2880, was passed by a vote of 76-3. Peter Scheer, Executive Director of the First Amendment Coalition, says that the assembly is stepping into a hornet’s nest, noting that the federal government itself does not claim copyright protection in its public works. Jim Ewert, General Counsel for the California Newspaper Publishers Association, says that his concern is the potential for an agency to use copyright as a means to limit the public’s ability to use records that a state or local agency has created. The California Chamber of Commerce has also come out against the proposed legislation.
Copyrights are very powerful rights but often are not fully understood or protected by business owners. Here are some important tips about copyrights with which all businesses should be familiar:
- Register: Businesses should identify and register their copyrights within 90 days of the publication of the copyrighted work.
- Notice: Even though not required, we strongly recommend that businesses place an appropriate copyright notice on all copyrighted works to discourage infringement and cut off the “innocent infringer” defense.
- Rights: All businesses must make sure that they have the right (documented in writing) to use any copyrighted materials created by others. Copyright issues sometimes can be hard to spot so we strongly recommend that businesses retain an experienced intellectual property attorney to conduct a periodic intellectual property audit.
- Agreements: All businesses must make sure they have appropriate written agreements in place with employees and other creative personnel regarding ownership and use of copyrighted materials (including, most particularly, materials created by employees and contractors) as well as agreements establishing the right to use copyrighted materials owned by others.
- Insurance: Businesses involved in any way in areas that involve the creation and use of copyrighted materials should explore obtaining insurance for infringement claims. Please note that most commercial general liability policies do not cover intellectual property claims – the purchase of separate coverage usually is required.
- Infringement: Businesses should take seriously any infringement of its copyrighted materials as well as claims of infringement asserted by third parties. In both situations, the business should promptly consult with an experienced copyright lawyer to determine an appropriate and cost-effective course of action.
On September 30, 2015, we posted about a recent case that addressed whether decorative aspects of cheerleader uniforms could be the subject of copyright protection. Our September 30 post can be found here: https://affinitylaw.wordpress.com/2015/09/30/three-cheers-for-the-wood-flooring-recent-cases-confirm-copyright-protection-for-cheerleader-uniforms-and-wood-flooring-pattern/
The United States Supreme Court recently decided to review the case. More information can be found in this recent article in The Hollywood Reporter: http://www.hollywoodreporter.com/thr-esq/supreme-court-hear-fight-cheerleader-889321
As the article notes, while the case nominally is about cheerleader uniforms, the Supreme Court’s decision could have far-reaching implications for Hollywood and could set boundaries on the copyright protection afforded to costumes. Stay tuned to this space for updates.
Many of our readers may have read with interest the recent media about the copyright litigation concerning Led Zeppelin’s iconic “Stairway to Heaven” where the owners of the rights to a song entitled “Taurus” put out by the 60s band Spirit have sued Led Zeppelin for copyright infringement by the song “Stairway to Heaven.” This is just the latest in a long line of lawsuits involving alleged infringement and plagiarism of the rights to popular songs. Accusations of musical plagiarism are a recurring phenomenon, but only rarely end up being heard in formal legal proceedings. Many readers will remember the 2015 case where a jury awarded damages of $7.2 million against Robin Thicke and Pharrel Williams for infringing the copyright in Marvin Gaye’s “Got to Give It Up.” These artists settled out of court because their songs too closely resembled songs by other artists:
Given the enduring popularity of “Stairway to Heaven,” the potential infringement damages could be massive – it will be interesting to see if Led Zeppelin chooses to litigate or settle out of court. Stay tuned.
While The Scope Of Copyright Protection Is Broad, Two Recent Cases Involving Yoga Positions And Recipes Show That There Are Limits
In a recent post in this space, we commented on several cases that illustrated that the scope of copyright protection is extremely broad (see here: https://affinitylaw.wordpress.com/2015/09/30/three-cheers-for-the-wood-flooring-recent-cases-confirm-copyright-protection-for-cheerleader-uniforms-and-wood-flooring-pattern). Two recent cases show that while copyright protection is broad, there still are limits:
Bikram’s Yoga College of India, L.P. v. Evolution Yoga, LLC: In this well-publicized case, the issue was whether a sequence of 26 yoga positions and two breathing exercises practiced in a specific order, called the “Sequence” and developed by Bikram Choudhury (a seminal figure in making yoga so popular in the United States and throughout the world and the creator of Bikram Yoga, sometimes called “hot yoga”), could qualify for copyright protection. In 1979, Choudhury published the book “Bikram’s Beginning Yoga Class” that includes descriptions and photographs of the Sequence in practice. In 2002, Choudhury also registered a copyright on the “compilation of exercises” contained in his book. In 2009, the defendants founded their own yoga studio and offered “hot yoga” classes that included the Sequence. Choudhury sued for copyright infringement claiming that the defendants infringed on his copyrighted works by offering yoga classes featuring the Sequence.
On October 8, 2015, the Ninth Circuit Court of Appeals held that the Sequence falls squarely within the exclusion detailed in Section 102(b) of the Copyright Act, which excludes from copyright protection “any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated or embedded in such work.” The Ninth Circuit found the Sequence was a process for obtaining physical and emotional fitness and was, therefore, not copyrightable.
Tomaydo-Tomahhdo, LLC v. Vozary: The issue in the Tomaydo-Tomahhdo case was whether a book of recipes could qualify for copyright protection. The plaintiff was a restaurateur who created and ran a successful restaurant and delivery catering business. In 2012, the plaintiff assembled a book of recipes that had been developed for the restaurant. The defendant was a former partner in the plaintiff’s business. He copied the plaintiff’s recipes and used them in a competing catering business, and the plaintiff sued him for copyright infringement.
On October 20, 2015, the Sixth Circuit Court of Appeals held there was no copyright infringement because neither the recipes themselves nor the book which compiled the recipes were entitled to copyright protection. In so holding, the Sixth Circuit explained that the recipes themselves are not covered by copyright because they are simply listings of facts (i.e. the ingredients) and functional instructions how to assemble the ingredients. Likewise, the Sixth Circuit held that the recipe book did not have any originality (such as original commentary, pictures, etc. by the author) that qualified for copyright protection separate from the recipes themselves.
In both the Bikram Yoga case and the Tomaydo-Tomahhdo case, the parties claiming copyright protection may have been able to take steps to protect their intellectual property other than merely claiming copyrights in the materials addressed by those cases. As always, we highly recommend that businesses consult with experienced intellectual property counsel to assess what IP protection may be available to the business.
Three Cheers for the Wood Flooring! Recent Cases Confirm Copyright Protection for Cheerleader Uniforms and Wood Flooring Pattern.
Two recent cases show that the bar to obtain copyright protection is very low, and that designs on a variety of media can qualify for copyright protection if the design is not functional and demonstrates a minimal level of creativity:
Varsity Brands v. Star Athletica: The issue in the Varsity Brands case was whether the decorative designs on cheerleading uniforms were eligible for copyright protection. By way of background, the Copyright Act does not provide copyright protection for the functional aspects of clothing but it is possible to obtain copyright protection for purely decorative features of clothing. Where to draw the line between these two bedrock principles of copyright law in the fashion design context has perplexed many courts over the years.
In the Varsity Brands case, the Sixth Circuit Court of Appeals held that the decorative elements of a cheerleading uniform (such as chevrons, stripes, etc.) could be “identified separately from, and are capable of existing independently of, the utilitarian aspects of [the] uniforms” and consequently that the graphic designs on cheerleading uniforms are copyrightable subject matter if sufficiently creative. The court’s holding in such regard is an application of the copyright doctrine known as the “separability” doctrine.
In so holding, the Sixth Circuit was careful to distinguish between fabric design and dress design. Fabric design covers designs printed on a finished garment and have been treated by the courts as features that are not functional and therefore are subject to copyright protection. Dress design graphically sets forth the shape, style, cut and dimensions for converting fabric into a finished garment and has been held to be functional and thus not capable of copyright protection.
Home Legend LLC v. Mannington Mills, Inc.: The issue in the Home Legend case was whether a two-dimensional laminate flooring design qualified for copyright protection. By way of background, laminate flooring consists of three functional layers. Laminate flooring manufacturers then add a decorative layer called “décor paper” which places two-dimensional artwork on top of the laminate flooring.
The decorative layer at issue in the Home Legend case was a layer that simulated the distressed look of a maple floor after years of wear and tear. The Eleventh Circuit Court of Appeals held that the design was separable from the flooring itself (another application of the separability doctrine) and displayed a sufficiently minimum level of creativity to “hurdle the low bar of copyright originality.”
Ninth Circuit Rules En Banc That Actors Do Not Have Protectable Interests In Their Individual Film Performances
On January 7, 2015, we posted about the case of Garcia v. Google, Inc., which was a case then-pending in the Ninth Circuit Court of Appeals that raised the issue whether an actor has a protectable interest in his or her individual film performance. (See Here for prior post: https://affinitylaw.wordpress.com/2015/01/07/do-actors-have-protectable-copyright-interests-in-their-own-individual-film-performances/). While the case arose in the unique context of an actor’s performance in what she believed was a regular film being re-cut into an anti-Islamic propaganda film, the case nevertheless had important implications in the copyright field and for the entertainment and film industries.
On May 18, 2015, an en banc panel of the Ninth Circuit issued its decision in the Garcia case and (as expected by most copyright lawyers), the Ninth Circuit held that actors do not enjoy a copyright interest in their individual performances – primarily because they do not fix their “acting performance in a tangible medium, as required by 17 U.S.C. § 101.” Thus, the actor cannot be the author or owner of the work since the fixation is done by the film crew, not the performers.
The Ninth Circuit also rejected the arguments that actors in a film enjoy privacy right protections, any “right to be forgotten,” or any protection from emotional distress arising from copyright law.
The Ninth Circuit en banc decision in Garcia can be found here: http://cdn.ca9.uscourts.gov/datastore/opinions/2015/05/18/12-57302.pdf
While the answer to the question posed by the title of this post may seem simple at first blush, a recent decision by the Ninth Circuit Court of Appeals has created significant uncertainty and created the spectre of possible Supreme Court intervention to answer this important copyright law question.
The factual scenario that gives rise to this question is where an actor is not the “author” of an entire film for copyright purposes but rather only plays a small role in the film. Under such circumstances, does the actor nevertheless own a protected copyright interest in his or her own individual performance such that the performance can be licensed or the actor can control the use of his or her performance (such as through the editing or distribution process)?
In Garcia v. Google, Inc., a divided three-judge panel of the Ninth Circuit Court of Appeals touched off a firestorm of copyright controversy when it suggested that there could be multiple copyright interests in a fixed work like a film. The majority in the Garcia case explained its decision by stating that “nothing in the Copyright Act suggests that a copyright in a creative contribution to a work simply disappears because the contributor doesn’t qualify as a joint author of the entire work.” The majority ultimately ruled that “[a]n actor’s performance, when fixed, is copyrightable if it evinces some minimal degree of creativity” such that an actor may “assert a copyright interest only in the portion of [the work] that represents her individual creativity.”
Perhaps the facts of Garcia explain the decision to some extent. In Garcia, the plaintiff performed a small role in what she believing was going to be a feature-length film entitled “Desert Warrior.” However, after filming was complete, the footage was re-cut into a short film that was an anti-Islamic propaganda piece and was distributed via the Internet over the You Tube service. Subsequent to the release of the film, the plaintiff received death threats and became the subject of a fatwa issued by a Muslim cleric.
The plaintiff claimed ownership in the copyright to her performance and, since she never authorized the broadcasting of her performance on You Tube, the plaintiff demanded that Google (the owner of You Tube) take down the film from You Tube pursuant to the requirements of the Digital Millennium Copyright Act. Litigation ensued when Google refused to do so and, to date, the Ninth Circuit has sided with the plaintiff.
The Ninth Circuit decision in Garcia is at odds with a recent decision of a trial court in the Southern District of New York in the case of 16 Casa Duse LLC v. Merkin, where the court held that an actor does not own a copyright interest in his or her individual performance, stating that where “two or more parties each independently make independently copyrightable contributions to a work . . . the dominant author is the sole author.”
The 16 Casa Duse case is on appeal to the Second Circuit Court of Appeals and the Ninth Circuit granted en banc review and heard argument in the Garcia case on December 15, 2014. Assuming the Second Circuit affirms the trial court in 16 Casa Duse and the full panel of the Ninth Circuit affirms the Garcia decision (which may not happen given the en banc review), we will have a split among two of the most prominent courts of appeal in the geographic areas where the large majority of films are made in the United States. In such case, Supreme Court review would seem inevitable. Stay tuned . . . .