Beware: Copyright Trolls Have Landed in Tennessee

It was only a matter of time before copyright trolls filed a bit-torrent lawsuit in Tennessee, like they've done in so many other jurisdictions across the country.  Over the past couple of years, I have helped individuals who find themselves at the opposite end of one of these lawsuits.  Now they've come to roost in our own backyard, filing suit on behalf of "Inseparable Prez" against more than 80 unknown defendants in Nashville, and more than 70 in Knoxville.  I imagine this is just the tip of the iceberg.  (For a 2012 article in the ABA Journal where I'm quoted on the copyright troll problem, see here.)

I am a strong believer in our copyright system, and I represent rights-holders every day against infringers.  But this is a different animal.  While owners of copyrights have every right to enforce and protect their copyrights, the technique the trolls are employing here is a modern twist on the old-fashioned shake down.  In my opinion, their methods are questionable at best and close to extortion at worst.

Their methods are similar wherever they go.  They obtain IP (Internet protocol) addresses of individuals they suspect have used a "bit-torrent" device to access movie content without paying for it.  They then file suit in federal court against multiple "John Does" and attach a list of the IP addresses as an exhibit to the complaint.  Next, they file a motion explaining that they need a subpoena to order the ISPs (Internet service providers, such as Charter or Comcast) to reveal the identity of individuals associated with each particular IP address.  By law, the ISPs are required to reach out to the John Does and tell them they have 30 days to file a "motion to quash" the subpoena, or otherwise settle the lawsuit.  If the individuals take no action, the ISPs will release their identities to the Plaintiff, after which the Plaintiff will amend the complaint to name the individual in the copyright infringement action -- for all the world to see.

Some courts have found several problems with the Plaintiffs' methods in these cases.  First, these Plaintiffs are suing IP addresses, not individuals.  Second, many of the individuals may not reside in Tennessee -- in legal terms, the court has no personal jurisdiction over them.  Third, they are attempting to "join" multiple defendants into a single action, when they involve completely different facts.  The only thing linking them together is that they allegedly accessed the same movie without permission, but all on different days and times, and all in different places.  When faced with copyright trolls in West Virginia, the federal court there dismissed the entire action, forcing those attorneys to pack their bags and find a friendlier location -- Washington, D.C. 

There are also practical problems with this approach to suing for copyright infringement.  I'll be the first to disagree with people who believe that everything on the Internet should be free.  But plenty of the folks who receive these letters from their ISP never actually accessed these movies.  Some did, but plenty of them merely neglected to password protect their wireless router, or trusted their teenage children to use the Internet responsibly.  Defending one of these lawsuits is time consuming and expensive, so many people choose to settle.  Others need to settle to protect their anonymity, either because they work in the entertainment business and their credibility is on the line, or because they're high profile individuals, or because the movie in question is x-rated and they don't want their names associated with the title. 

Individuals who receive one of these letters from their ISPs should contact a qualified attorney familiar with this area to seek advice and possible representation.   Another good option is to read over the subpoena defense resources provided by the EFF (Electronic Frontier Foundation).

Using Pinterest without Committing Copyright Infringement

            Pinterest is a platform that is gaining popularity like Facebook and Twitter did a few years ago.  Its users report an addiction stronger than Starbucks coffee.  Pinterest invites users to find images that other people have posted on the web and add them to the Pinterest user’s virtual pin board.  It has the potential to drive tremendous traffic to business websites and to help them sell products and services, but most of the images selected by each Pinterest user are “owned” by someone else under U.S. Copyright Law, presenting many pitfalls to be sued for copyright infringement.

            Copyright law in the United States protects all original content from the moment of creation for the life of the author plus 70 years, whether or not it is registered with the Copyright Office and whether or not it bears the copyright symbol of ©.  The copyright laws give exclusive rights to the author to publish, distribute, and make derivative works of the original work of authorship.

            Many people think that giving attribution to the original source is good enough, but attribution and permission are two different things.  How do you use Pinterest without committing copyright infringement?  Here are eight practical tips to minimize your exposure to claims of copyright infringement:

1.      Use your own content.  By using your own content, such as photographs that you personally take, you minimize the risk of copyright infringement.  (There is still a risk of copyright infringement if, for example, you photograph then pin an entire poem that belongs to someone else.)  The trade-off of using your own material on Pinterest is that you are giving Pinterest a “non-exclusive, royalty-free, transferable, sub-licensable, worldwide license to use, display, reproduce, re-pin, modify . . . , rearrange and distribute” your content, according to its updated Terms of Service.  By pinning it on Pinterest, you give up your exclusive rights to that work whenever you pin it on Pinterest.

2.      Get permission.  The surest way to avoid claims of copyright infringement is to get permission from the owner of the work that you wish to pin.  Get it in writing.

3.      Use the “pin it” button.  If a content owner encourages users to share their material with the Pinterest “pin it” button, arguably the content owner is giving you an implied license to pin it.

4.      Give attribution.  Whenever you pin something that belongs to someone else, be sure to attribute the original source.  This will not protect you from a claim of copyright infringement if you’re lacking actual permission, but it may minimize your exposure.  A further tip:  don’t just upload directly from Google Images.  When you do that, Pinterest gives the attribution to you by stating “uploaded by user,” rather than giving it to the original source.

5.      Pin products rather than art.  This is based more on common sense than the law, but businesses selling products presumably want to get the word out about their products and appreciate the free word of mouth publicity you’re generating on their behalf.  Some artists appreciate you pinning their work, too, but many artists make money selling or licensing original works, and would argue that you’re driving down the value of their work.  (Caveat: some brand owners may assert claims of trademark infringement if you use their marks without permission.)

6.      Limit your pinning to repining.  When you re-pin material that has already been pinned on someone else’s board, you arguably have the protection of Pinterest’s Terms of Service, which explain that no one should pin anything on Pinterest unless they have the right to do so.  Thus, if ever sued for copyright infringement, you could argue that you had a good faith belief, based on Pinterest’s Terms of Service, that any material you re-pinned was originally posted on Pinterest by someone who had rights to put it there.

7.      Be careful when pinning for profit.  A defense many people point to when sued for copyright infringement is the Fair Use Doctrine, which looks at four factors, one of which is the nature of the copying, and whether it is commercial (meaning, for money) or not.  It is harder to successfully argue fair use when the copying is done for profit than for a hobby or educational purposes.

8.      Pin less than an entire image.  Back to the Fair Use Doctrine: it’s harder to succeed with this defense when you’ve copied the entire image of a work belonging to someone else.  Consider copying only a small portion of the image instead.

            Using Pinterest is a lot like riding in a car.  In a car, you can use a seat belt, turn on your lights, and pay attention to the road to avoid accidents, but you can still be hit.  These are some tips to help you minimize the risk of being sued for copyright infringement when using Pinterest.  The smarter you are, the lower your risk; the more aggressive you are, the higher your risk. 

            Businesses have a lot to gain by using Pinterest, mainly driving traffic to their websites and building brand identity, loyalty, and interaction with customers.  To help protect your business from exposure to lawsuits when using Pinterest, consult a qualified intellectual property lawyer who can tailor advice to your unique situation.  The above tips are not intended as legal advice.

Three Days in January that Made Copyright History

Three days in January 2012 witnessed some of the most important events in recent history in the world of copyright.

On January 18, the Supreme Court issued Golan v. Holder, which held that Congress is empowered remove works like the symphony classic Peter and the Wolf from the public domain in the United States, preventing orchestras, musicians and others from using these works unless they get permission and pay a license fee to the copyright holders.

On the same day, the technology community mobilized millions of people to voice their disagreement with SOPA and PIPA, two bills supported by the entertainment industry that were designed to fight online piracy. After blackouts by Wikipedia and protests encouraged by tech giants like Google, by January 19 most members of Congress had withdrawn their support for both bills.

On January 20, the United States arrested Kim Dotcom. He was arrested in Auckland, New Zealand for a file-sharing site called Megaupload.com that was based in Hong Kong. The site allegedly generated over $175 million by illegally copying and distributing music, movies and other copyrighted material without authorization.

What does all of this tell us? Three important things.

First, protection of our country’s intellectual property relies on international cooperation. For us to arrest Mr. Dotcom, who is alleged to have stolen millions from American content creators, we needed the help of authorities in Hong Kong and New Zealand. Which is where Golan v. Holder comes in: no one likes hearing that Peter and the Wolf and other classics have fallen out of the public domain and back into exclusive ownership, but for our country to benefit from international copyright treaties, we also must abide by them. International treaties are what prompted Congress to pull certain works out of the public domain, and what prompted the Supreme Court to reach the conclusion it reached in that lawsuit.

Second, if we didn’t recognize it before the rise and fall of SOPA and PIPA, there’s no denying the tension between content creators and content providers; between the entertainment industry and the technology industry. Our technology is intertwined with our entertainment and our content, so we need these camps to work together. Unfortunately for now, the tension is insurmountable: technology camps want free flow of information while content creators want protection for their original works. Ultimately, these two teams will have to reach a compromise, and Congress cannot ignore the need to protect American intellectual property from online international piracy, like the theft allegedly coordinated by Mr. Dotcom.

Finally, the online protests of SOPA and PIPA mobilized a new segment of concerned citizens. Google claims it gathered over seven million signatures in 24 hours in opposition to the bills. The implications of that statistic are at the same time impressive, intimidating and infinite.

Recent Interview on TV about Recapturing Copyrights

Recently my law partner, Stephanie Taylor, and I were interviewed by Jesse Goldberg, on his show, “Mind Your Own Music Business.”  Following up on an article that I wrote for The Tennessean, we discussed copyright recapture rights. 

This is a very important issue right now for any authors and heirs of original works who transferred rights in their copyrights in the past under the 1976 Copyright Act, which affects works first published on or after January 1, 1978.  Thirty-five years after the initial transfer, a five year window opens up during which the authors/heirs may provide notice of their desire to recapture the copyrights that they previously transferred.  To make it more complicated, authors and heirs must provide notice of their intent to recapture no earlier than ten, and no later than two, years prior to the notice being effective.   Thus, for those authors wishing to recapture copyrights that they transferred in 1978 (for which the five year window opens up in 2013 and runs through 2018), the minimum two-year notice prior to the five year window is right now in 2011. 

We discussed a variety of issues, many of which have not made their way to the courts yet, but surely which will require litigation.  These included whether sound recordings are considered works for hire, and thus not eligible for recapturing; whether session musicians, producers, sound engineers, and others might qualify as authors; and the gap grant problem for those authors who entered into contracts transferring their copyrights pre-1978, but who didn’t create or publish their works until after January 1, 1978.  We also discussed how Nashville courts likely will be called on to decide some of these significant legal issues in the coming years, given Nashville’s importance in the entertainment, publishing, and technology industries. 

As soon as the show airs on TV and is up on the web, I'll update this post and provide links.

Using Technology to Tap into New Sources of Revenue: Highlights of Technology Panel at Bone McAllester Norton

Recently my law firm hosted a panel on technology.  It was a packed audience, and more guests showed up than rsvp’d, showing us that this was a topic that people really want to know more about.  Usually law firms invite clients and friends to hear about risks or changes in the law.  This event was all about business opportunity.

Since the beginning of 2011, I’ve given 1-2 speeches a month on the legal issues involved in using social media.  These talks typically have revolved around social media as a marketing tool, but not necessarily linked directly with creating new revenue.  At our tech panel, we wanted to focus instead on how companies and individuals can use technology to create new streams of revenue.  How can they tap into new revenue sources by creating their own apps, games and contests?  And what is on the horizon that none of us has even contemplated?

We invited an expert panel, comprised of David Owens of Vanderbilt University Owen Graduate School of Management, Nicholas Holland, CEO and Founder of CentreSource, and two of our clients, Parker Polidor, CEO and Co-Founder of Cell Journalist and Carter Hopkins, CEO and Co-Founder of City Streak, LLC.  Our audience was made up of leaders of financial institutions, educational institutions, technology companies, start-ups, developers, and venture capital firms.  We asked our panel and our audience to focus on three things:  (1) using technology to create new revenue streams, (2) tapping into the growing technology sector here in Nashville, rather than shipping assignments out of state to Silicon Valley or Texas, and (3) using our panelists’ stories as inspiration.

David Owens kicked off the discussion by talking about how companies that develop technology these days are recruiting high school students and high school graduates rather than college graduates, because young people are so connected with technology these days.  He talked about how younger people are physically developing stronger hands, fingers and forearms as a result of constantly using Smartphones, and how marketing firms are beginning to place signs and advertisements at foot level and knee level in stores, rather than overhead, because our bodies are getting used to looking down at a hand-held device all day, rather than looking up.  These are just some of the physiological and physical changes that are taking place from an evolutionary perspective, based on our recent adoption of certain technological devices.

Nick Holland did a great job providing an overview of how businesses can tap into technology from a variety of perspectives and in order to accomplish multiple goals.  His company is one of the fastest growing technology companies in America, and its based right here in Nashville.  Already as a result of our panel, members of the audience have hired CentreSource to help them with their needs.  This is great for them, for CentreSource, and for Nashville.

Parker Polidor shared his company’s amazing story, which deserves far greater recognition in Nashville than it currently has.  Cell Journalist is one of the biggest connectors and providers of user-generated content (UGC), such as videos of the floods captured from the Northeast over the past few weeks on individuals’ cell phones, which they then upload to various local and national news stations across the country.  As a direct result of the panel that we hosted, Cell Journalist was approached by one of the nation’s largest media conglomerates and is in the process of negotiating additional work.

Finally, Carter Hopkins, who was the youngest person in the room, and had just graduated from college at SMU in May 2010, captivated the audience by telling his story of how he and his business partner invested just over $10,000 to start this company, which already has thousands of fans and followers on Twitter and Facebook.  His company is similar to a combination of The Amazing Race and Groupon, which lets its target audience of individuals in college and recent graduates go on scavenger hunts in urban locations around the country.  They hunt for prizes and the game is based on speed and skill.  They also realize that they are in a unique position to help companies promote their products and services by incorporating them into the scavenger hunt as clues.  One of my take-aways from the morning was a conversation after the event with one of the older attendees, who said how inspired she was by Carter’s presentation.  She said it got her wheels spinning and that she is already thinking about new ways she can incorporate similar concepts into her own app.

Entertainment Industry's New Copyright Alert System May Create New Form of Evidence in Copyright Infringement Lawsuits & Lead to Higher Damages

It was big news earlier this month when many of the big entertainment companies entered into an agreement with Internet service providers (ISPs) regarding efforts they will take to self-regulate and self-police copyright infringement. The name of this plan is the "Copyright Alert System."

According to the Wall St. Journal and the Center for Copyright Information, the plan has six steps, from the mildest (in issuing warnings), to the intermediate (in requiring users to acknowledge that they received notice), to the most severe (in slowing down the speed at which alleged infringers may access the Internet).

As a copyright lawyer who goes to court to resolve disputes, I am most interested in the intermediate step. It strikes me that if users are forced to acknowledge that they have received a warning that their conduct may constitute infringement and yet they proceed forward anyway, the fact that they acknowledged such warning may be used against them in a copyright infringement action. The ISPs will not be releasing the identity of these users voluntarily. But a court can always grant permission to subpoena material showing that they took this intermediate step. This new policy may be opening up a whole new world of evidence of willfulness that can be used against people who knowingly infringe on others' copyrights. And willful infringement entitles copyright plaintiffs to increased money damages.

"Always On," Consumers Expect Businesses to Embrace Technology Even More

In this new iPhone world, where consumers can download an app at the press of a button, businesses must embrace technology or risk being left behind.  When I say embrace technology, I'm not talking about just having an Internet presence or just using social media for marketing.  I mean using technology to create new apps, tools or games that let you instantly connect and engage with your customers.


Brian X. Chen, a writer for Wired Magazine, was recently interviewed on NPR's Fresh Air from WHYY.  Here's a link to the story and the interview.  In the interview, he discussed his new book, Always On: How the iPhone Unlocked the Anything-Anytime-Anywhere Future -- and Locked Us In. 

From a business perspective, the most fascinating part of the book is Chen's comment on how consumers' expectations have changed in light of the way the iPhone lets them unlock worlds of knowledge in the swipe of their phone screen.  In an excerpt from his book, he writes: "The iPhone changed our standards for what we expect from technology, and as a result, businesses are being forced to give us more for our money. We don't want seven pieces of hardware to perform seven different tasks; we want a single gadget capable of doing anything-anytime-anywhere. Soon, manufacturers will no longer be able to sell single-function gadgets lacking an internet connection because those gadgets will soon be obsolete. Consequently, a large number of companies and industries find themselves threatened because a downloadable app can easily replace nearly any dedicated, single-use product."

How is your business using technology to satisfy consumer expectations?  What app could you develop to keep your customers engaged?  Are you thinking from the mindset of a customer who owns an iPhone, and who expects information immediately? No matter your industry -- entertainment, publishing, banking, technology, professional services, arts, health care, environmental -- customers want more from you, and they expect it in the form of instantly accessed technology.

Want to Limit Liability Against Copyright Infringement Claims when Hosting User Content on your Website?

If you host a website that invites the public to submit content, often called UGC (or User Generated Content), you may want to read the recent summary judgment decision in Arista Records LLC v. Myxer Inc. and stay tuned to the final outcome at trial.  Website hosts that allow UGC run the risk of being sued for copyright infringement, among other claims, because users sometimes submit material whose copyright belongs to someone else.  If a copyright owner sues you for copyright infringement in your role as a website host, one of the most common defenses asserted is that the web hosting is protected under the DMCA (Digital Millennium Copyright Act). 

On April 1, 2011, a federal court in California issued the above decision in a case pitting content owners against website hosts.  UMG Records and other music companies sued Myxer and its principals for copyright infringement because Myxer hosts a website that invites the public to upload music and then download it as ring tones on cell phones.  Myxer doesn't pay UMG anything, and UMG argues that it loses money every time a ring tone is downloaded through Myxer.

Myxer asserted two primary defenses: that its use was fair use and that it was protected by the DMCA's "safe harbors."  On summary judgment, the court rejected Myxer's fair use defense, finding that converting the songs into ring tones did not qualify as a "transformative" use and finding that Myxer's business model likely cut into UMG's market. 

But the court kept alive Myxer's DMCA defense.  It found that genuine issues of fact existed regarding Myxer's implementation of a DMCA policy and regarding the speed with which it removed allegedly infringing material.  Now it will be up to Myxer to prevail on this defense at trial.

Just like Myxer is hoping to do, businesses that allow the public to post content on their websites may limit their liability against copyright infringement lawsuits by following some steps under the DMCA.  As a ground rule, if you create or direct content on your website that infringes on another's copyright, you can't turn to the DMCA for help.  But if all you do is host content created by others, to get the benefits of DMCA protection you need to (1) adopt a  DMCA policy and communicate it to your users, (2) appoint a DMCA agent, (3) follow the DMCA steps of quickly responding to accusations of hosting material that infringes another's copyright, (4) permanently remove repeat infringers, and (5) receive no financial benefit directly attributable to any infringing activity on your site. 

To read more about how to protect your business under the DMCA, check out this great resource from the EFF (Electronic Frontier Foundation), or contact an attorney with experience in copyrights and intellectual property law.