Wednesday, 29 March 2017

GS Media and its implications for the construction of the right of communication to the public within EU copyright architecture: a new article

In its 2016 decision in GS Media, C-160/15 the Court of Justice of the European Union (CJEU) sought to clarify under what conditions the provision of a link to a work protected by copyright made available on a third-party website (where it is freely accessible) without a licence from the relevant rightholder falls within the scope of the right of communication to the public within Article 3(1) of the InfoSoc Directive.

In its decision the CJEU held that whether linking to unlicensed content falls within or outside the scope of Article 3(1) of the InfoSoc Directive depends – crucially – on whether the link provider has a profit-making intention or knowledge of the unlicensed character of the work linked to.

This new article of mine - which will be published in Common Market Law Review - assesses the implications of the GS Media decision in respect of linking, and - more generally - the construction of the right of communication to the public.

The main conclusion is that GS Media imposes a re-consideration of what amounts to an act of communication to the public. Yet, the forthcoming CJEU decisions in pending references for a preliminary ruling (Filmspeler, C-527/15, and Ziggo, C-601/15) might lead to a relaxation of the concept of 'indispensable intervention', thus broadening the notion of who makes an act of communication to the public.

Ultimately the discussion undertaken in this contribution suggests that the concept of ‘communication to the public’ has been undergoing an evolution. The next frontier for Article 3(1) of the InfoSoc Directive appears to be not just a determination of what amounts to an act of communication to the public, but also who makes an act of communication to the public. The latter in particular is the next question for the CJEU to tackle, and also poses significant – and not entirely worked out – challenges to EU policy- and law-making.


The Future of Copyright post Brexit

On the day that the UK begins the process of leaving the EU, it is an appropriate moment to take a look at where copyright in the UK might go from here. Of course, much will depend on what sort of overall trade deal is finally agreed between the UK and the EU, but given that copyright is not a core competence of the EU, I suggest this provides the UK with an opportunity to pick out the best bits of the current European acquis but at the same time to discard some of the more bizarre developments, whilst obviously remaining compliant with our wider obligations under treaties such as the WIPO copyright treaty (WCT),  the WIPO phonograms treaty, TRIPS etc. There's a lot to unpick so apologies in advance for the length of this posting

Ideally this affords the UK the opportunity for a new Copyright Act, to replace the Frankenstein monster which the 1988 CDPA has become. But given the fact that Parliamentary time is going to be in short supply over the next few years because of the adjustment to the statutory law in all areas, that is probably not going to be a high priority. At best we might hope to reduce the number of lacunae and other features which impede development of the creative industries so that they can become even more competitive in the world marketplace, whilst not so radically different to the rest of the EU that it makes trade with the remaining member states problematic. But of course we must ensure that the relationship between the rights of creators and the rights of the public remains in balance. We also need to distinguish between those parts of the EU law which have been introduced to UK law by statutory instrument alone, and those which have been fully incorporated into the CDPA itself. The former can, in the main, be revoked by ministerial authority but they can't be amended by ministers as the authority for them often rests on section 2(2) of the European Communities Act 1972 which is likely to be an early casualty in the cull of legislation. As already mentioned, I don't think Parliamentary time will be available to do much to the CDPA itself, and thus it is reasonable to assume its provisions will remain unaltered at least in the medium term.

Here is my list of suggestions for areas which might need to be examined in the shorter term, grouped loosely under the headings of the main EU Directives:

Copyright term. There seems little point in trying to revert to the previous term of lifetime plus fifty years, which though arguably a desirable step in the right direction for copyright generally, would cause immense difficulties in trading with partners like the USA, who are hell-bent on forcing other nations to come up to the plus 70 years standard (vide TPP and the changes to Canadian copyright law). But we do have the opportunity to tidy up the situation regarding previously unpublished works which currently will not become free of copyright until 2039, even though in some cases the authors died in the nineteenth century or earlier. And I would advocate removing the little-understood and unnecessary provision of the original Article 10 of the Copyright Term Directive (03/98/EEC). This was the principal cause of many works (particularly photographs) having their copyright revived merely because some EU member states previously had a term of protection which exceeded the lifetime plus 70 years rule. The copyright term for cinematic and audiovisual works, sound recordings and broadcasts should remain as they currently are, which obviously includes the new term for sound recordings (phonograms) of 70 years from the date of fixation to accord with the afore-mentioned Phonograms Treaty.  However, this might be the opportunity, under the ambit of wider rationalisation of copyright, to look again at some other types of work such as computer programs and databases - more on this in a moment. Articles 4 and 5 of the Term Directive introduced fixed length terms for, respectively, previously unpublished works (the so-called and confusing Publication Right), and for certain scientific publications.  Since the latter was not adopted by the UK, we need only consider the former. Such fixed terms are anomalous when we already have the lifetime of the author plus 70 years as a simple yardstick. Clearly the purpose of this provision was to encourage the publication of such works by giving the publisher a monopoly right, but does this really serve the public good? The recitals provide absolutely no justification for introducing this extra right. I suggest that if a work is in the public domain by virtue of the lifetime + 70 rule, then all that a publisher of a previously unpublished work should be entitled to is the existing protection for the typographical layout of his published edition under section 8 CDPA. If other publishers also wish to compete in the same market place, by publishing the same work, then the public benefits. We have many different editions of Shakespeare's plays or Sherlock Holmes stories by different publishers, so why not the same economic playing field for a previously unpublished Shakespeare sonnet or the private letters of Arthur Conan Doyle?  Let's face it, the impediment to publishing an unpublished work is less about the financial incentive and all to do with who controls access to the original work itself. 

Article 6, concerning the protection of photographs, is largely pointless and since it has not been directly incorporated into UK law, it can be safely jettisoned. 

Chronologically we next come to the InfoSoc directive. Before moving to the most problematic part - Article 5 - we need to take a look at Articles 2 to 4 in the light of our obligations under the WCT, and to a lesser extent, Berne.  The WCT introduced the specific concepts of the Distribution Right and the Right of Communication to the Public (including the making available concept) but did so in outline terms only. The InfoSoc Directive expanded on these outlines and added the Reproduction Right. While there is nothing contentious about Articles 2 - 4 as statements of the principal components of copyright, they do blend together the traditional forms of literary, musical, dramatic and artistic works along with performers rights, films, sound recordings and broadcasts in a way which is, in my view, unhelpful. The CDPA clearly delineates copyright from performers' rights, and also treats broadcasts separately. If the CDPA is to remain in its current form, the UK should abandon the EU definitions of the three rights as given in Articles 2 to 4 and rely on the CDPA definitions, which do not conflict with the WCT.

Article 5 has been subject to so many referrals to the CJEU that even the most europhile of commentators should admit, it is poorly expressed. The UK has now adopted into the CDPA the majority of the exceptions provided for in Article 5 and so that is where we stand. However the case-law clarifying Article 5 emanating from the CJEU is a major problem, largely because we cannot say this is settled law yet. In particular we have the CJEU's wide-ranging and, arguably, equally confusing set of decisions about what constitutes an act of communication to the public. In part this is because both the CDPA and the InfoSoc Directive fail to take account of the Internet as it operates today, but it also reflects the fact that the interpretations of the CJEU have to take account of the smooth running of the internal market. Henceforward that will not be a primary concern of the UK courts. But completely abandoning all CJEU case-law would leave a large hole in the UK common law which the courts would need to fill with their own decisions, otherwise the law becomes uncertain. It is arguable that this has happened to the extent that some cases like FAPL v Murphy, or the Meltwater trilogy, have resulted in good precedents made by the UK courts, albeit backed up by CJEU referrals. But until a case is brought to the courts, they can't make the new case-law which is required to fill the vacuum. For instance, we haven't so far had any cases in the UK which engage the issues raised by Svensson, Bestwater, GS Media et al. And assuming that no such cases arise before the end of our membership of the EU, how should the UK courts treat such issues thereafter? Clearly the decision on how much if any of the existing European acquis is to be followed by the UK courts in future extends well beyond just copyright issues, but it does no harm to consider some of the issues in isolation.  

The other main area covered by the InfoSoc Directive is the use of TPMs, and rights management information. Again these provisions have been incorporated into the CDPA and there is no pressing reason to alter the statute in this area at this stage. However, clearly, technological changes in DRM and similar methods may well require changes to the law in the not too distant future.

I don't propose to make any suggestions on the Enforcement Directive. The provisions are largely common-sense and reflect how the UK courts operate in any case.  

Examination of the Computer Programs Directive and the Databases Directive, while bearing in mind obligations under the WCT, provides an opportunity to launch off in different direction. Notwithstanding the fact that the WCT defines a computer program as a literary work, we should recognise both these types of work as being entirely different in character to other copyright works. Not least among the reasons for doing so, is the fact that both have utterly different economic lifetimes. I challenge any reader to name a single computer program which will be in use even fifty years after its creation, let alone the lifetime of its author plus 70 years. Thus the need for such a ridiculous period of protection is laughable. The potential period for copying the programs of others can be measured in under a decade. To reverse the well-known words of Peterson J in a 1911 case, what is not worth copying is prima facie not worth protecting. Furthermore in today's world, there is virtually nothing 'literary' about the process of writing code. Add to that the fact that most largescale software is created by teams of programmers, usually on contracts of employment, this means that tying the period of protection to the lifetime of individuals becomes increasingly difficult to monitor, especially when ownership of the copyright vests in the employer. And we are only a few years from the point where most if not all software will be computer generated in its entirety and the black letter law has virtually no provision for this circumstance. There is also the additional issue of a lack a workable definition of 'software' or 'computer program', as evidenced by the numerous cases in the USA concerning APIs and the like.

Something similar applies to databases. But of course the period of protection here is not based a human lifetime, nor is the driving force the sort of creativity one finds in the world of the writer or musician. Like software, the use of computers to automate the process of database creation masks the true nature of any human creativity or genuine innovation. Add to this the fact that the law as it stands at present means that just adding new data to a database extends to duration to the (notionally fixed term) period of protection, even when this is may be done by the afore-mentioned computer output rather than a human.  Theoretically this could lead to perpetual protection of a database. It is hard to see any common features between database right and true copyright, and it is time to move it out from under the copyright umbrella completely. This would mean we no longer have to shoe-horn such alien 'rights' into the framework for fair-dealing or moral rights, for example.

Next is the eCommerce Directive. Given the fact that CDPA is largely oblivious of the existence of the internet in general, and the commercial nature of much of the world wide web in particular, the provisions of the eCommerce Directive are a fairly useful update and should be retained at least until something more up-to-date can be drafted to encompass new on-line developments. Obviously references to the internal market can be ignored, as can a few of the minor provisions (such as those found in Art 10). All of this could be done with a revised version of SI 2002/2013, as the CDPA does not reflect most of the Directive.

And the last two major Directives can also provide useful adjuncts to the UK law. The world of Collective Rights Management clearly relies on cross border co-operation and so documents like Directive 2014/26/EU provide a useful framework. The Orphan Works Directive also provides a useful set of criteria and practices for institutions to follow, but given their considerable overlap with the separate UK Orphan Works system there is scope for a single unified approach post Brexit which puts the IPO rather than the EUIPO at the centre of the registration process, albeit without precluding the idea of reciprocal links between the two Offices.

It is not sensible to consider here any future developments in EU copyright law which might span the next two years.  Firstly because the EU institutions have not agreed all of the provisions yet, and secondly, the likely timescale for implementing any new directives will probably fall outside the two-year negotiating window.
 
Conclusion. A steady-as-we-go approach to de-coupling UK copyright should work well. There remains concern about certainty in the law, especially where the creative industries are concerned, but as this will form part of a much wider uncertainty, it is manageable. Our specialist courts have all the necessary experience and tools to fill the gap left by shearing off much of the current European acquis which not already reflected in the CDPA. But reform of the overall copyright legislation is, as Sir Richard Arnold has advocated on several occasions, pressing if the law is to keep up with the pace of technological change. To do otherwise is to be forced to retain the legal fiction that a computer program is just like a book.  

Tuesday, 28 March 2017

Custodial sentence appropriate for sustained online infringement

In an interesting decision, the Court of Appeal in London has upheld a custodial sentence imposed on Wayne Evans by HHJ Trevor Jones at the Crown Court in Liverpool for two offences of distributing an article infringing copyright contrary to section 107(1)(e) of the Copyright Designs & Patents Act 1988 and also to a further offence of possessing an article for use in fraud contrary to section 6(1) of the Fraud Act 2006.

Evans operated a number of websites which were responsible for the illegal distribution of licensed and copyrighted material. He did not himself have the material on his own websites, but he facilitated internet users by operating websites which permitted them to go elsewhere in order to find digital material via what are called "torrent" websites which permitted such downloading. The appellant himself had three websites which he administered. They were hosted through a proxy server, a computer system or application which facilitated access to material on the internet and which also provided a degree of anonymity to those who were supplying or accessing it and which bypassed other sites which might have been blocked by UK internet service providers. The three website also shared an internet protocol address. They were set up using the same email account registered to the appellant. He had no licence or permission for his activities from the UK's performing right and mechanical copyright organisation PRS for Music.

Evans (39) had no previous convictions of any kind. He pleaded guilty, at what was accepted to be the first practical moment. But the court imposed a twelve month custodial sentence on the first count: on the second count he was sentenced to 6 months' imprisonment. On the third count, the count of possessing an article for use in fraud, he was sentenced to 10 months' imprisonment. All sentences were stated to run concurrently. Consequently the total sentence was one of 12 months' immediate imprisonment. 

The Court of Appeal noted that there was no Definitive Guideline issued by the Sentencing Council in respect of offences contrary to section 107 of the CDPA 1988 However, the Definitive Guideline issued by the Sentencing Council with regard to fraud, bribery and money laundering offences did apply to count 3 on this particular indictment: that is to say, possessing an article for use in fraud. By reference to that Guideline, it was common ground before the judge on this count that this was a case of high culpability and greater harm and that the relevant starting point was one of 18 months' custody for such an offence: with a category range of 36 weeks' custody to 3 years' custody.

But nevertheless, Evans appealed the sentence and argued that  a total sentence of 12 months imprisonment was excessive in the circumstances of this particular case. In particular, it was said that such a sentence failed sufficiently to acknowledge that the appellant was not motivated by financial gain and scarcely did gain. It is said also that he had mental health issues and related personal mitigation. He was of previous good character and was most unlikely to re-offend. In that regard, emphasis was put on the pre-sentence report which contained views precisely to that effect and also explained the difficult personal background of the appellant. The appellant argued that whilst this offending did cross the custody threshold, the resulting sentence could and should have been suspended and, further or alternatively, could and should have been a shorter sentence in terms of length.

But the Court upheld the original sentence, placing weight on the deterrent effect of the sentence despite the fact there was no evidence to suggest that the appellant had made any significant sums of money out of these activities, on the loss suffered by the music industry (although the loss estimated by PRS for Music was considered 'notional'), and the sustained nature of the offending, which continued even after Evans had received cease and desist notices (which Evans ignored) with Lord Justice Davis saying:

The appellant may not have been motivated by gain for himself. But there was undoubtedly a real loss to the owners of the relevant copyrights and related performers. Further, quite apart from such loss as could be identified and quantified, such offending always has a wider detrimental impact on the music industry and its profitability: and the music industry is an important economic contributor to society. That detriment is none the less real for being difficult to quantify. As has, in fact, long been established in the context of intellectual property offending, an element of deterrent sentencing is justified in this context; not least also because of the difficulty in tracking down and investigating such offending. Most certainly here the appellant had strong personal mitigation. But his conduct was sustained and he persisted in it even after receiving the cease and desist notices. He carried on his activities for a lengthy period of time and he used sophisticated equipment for the purpose.

http://www.bailii.org/ew/cases/EWCA/Crim/2017/139.html

Sunday, 26 March 2017

THE COPYKAT

This CopyKat from Tibbie McIntyre

The UK Copyright Officers survey – deadline 3rd April

If you work at a UK library and educational/cultural institution, your organisation is warmly invited to take part in a survey about copyright officers and copyright education here. The survey is available until 3rd April.

The UK Copyright Literacy page states that the research is regarding “copyright officers or similar specialists in UK libraries and educational / cultural institutions. We want to find out more about the value and status of these positions, the responsibilities that they entail and the ways in which copyright education is delivered. … The findings should be of interest to organisations wishing to benchmark the copyright training and advice services they currently offer.”

Even if your UK library and educational/cultural institution does not have a dedicated copyright officer, your organisation is still invited to participate, as there are questions designed to determine how copyright is managed in the absence of a designated copyright post.

If you have any questions about the survey, please contact ukcopyrightlit@gmail.com.

You can find the survey here until 3rd April.


Australia NOT to grant safe harbour to Google, Facebook, at al.

The Australian government had recently been seeking to extend its safe harbour provisions to online intermediaries (including Google and Facebook) that rely on user-generated content. The move would have given immunity to online intermediaries for infringing content uploaded onto platforms by users.

Across Europe and the U.S., online intermediaries already enjoy such a safe harbour (European legislation can be viewed here, American here). However, safe harbour provisions have generated much heated debate, with copyright holders arguing that it has led to the copyright ‘value gap’. For example, rights holders have argued that platforms that benefit from the safe harbour rule facilitate nearly half of all music consumption on the internet but represent only around 4% of the revenue generated by the industry.

Also, platforms are only under an obligation to remove infringing content when notification is given by the rights-holder. This leaves copyright holders in the position of eternally having to search YouTube, Facebook et al. for instances of infringement – an eternal game of ‘whack-a-mole’. This topic is coveredhere and here, and reports on controversial measures proposed by the EU to overcome the ‘value gap’ can be found here.

TorrentFreak reports that “Due to what some believe amounts to a drafting error in Australia’s implementation of the Australia – US Free Trade Agreement (AUSFTA), so-called safe harbor provisions only apply to commercial Internet service providers.” This means that platforms allowing the upload of user-generated content may be found liable for infringing content uploaded by 3rd parties.

Communications Minister Mitch Fifield confirmed in a statement that the amendment had been dropped: “Provisions relating to safe harbour were removed from the bill before its introduction to enable the government to further consider feedback received on this proposal whilst not delaying the passage of other important reforms”.  

Lobbying from a consortium on copyright holders to drop the safe harbour amendment has been intense. The Australian has published a series of articles against implementation of the safe harbour rule, arguing that Google et al. are “ruthlessly exploiting” safe harbour rules in the US and Europe (no links are available as the content is behind a paywall).

What are the implications for platforms that allow 3rd parties to upload content?

There is legal uncertainty – platforms may be found liable for any acts of infringement by their users. There are a number of options from which the platforms can choose;
1.      Run the risk of being found liable of copyright infringement because of the actions of 3rd party users, having to pay penalties to copyright holders.
2.      Enter into agreements with copyright holders on a pre-emptive basis, licensing content that 3rd party users might upload onto the platform.
3.      Implement filtering technology, identifying and blocking infringing content when it is uploaded. (This is also a live issue in Europe.)
4.      Exit the Australian market altogether.

The exemption from liability enjoyed by platforms is an important issue worldwide, and it should be interesting to observe how events unfold in Australia in the coming months.

There are more stairs? – Stairway to Heaven saga continues

This saga has previously been reported on the 1709 blog here and on the  IPKat here. This case deals with the potential infringement of a song by Spirit, ‘Taurus’, by Led Zeppelin in their ‘Stairway to Heaven’.

90 page brief was recently filed to the 9th Circuit Appeals court by the agent of Michael Skidmor, trustee of Spirit guitarist, Randy Woolfe (California). The brief asks the court to reverse the previous finding, where the jury found unanimously in favour of Led Zeppelin in June 2016. This brief also asks for remand for a new trial, including striking the bill of costs.

Copykat will issue updates as and when they come.

By Alf van Beem (Own work), via Wikimedia Commons
Compulsory Licences for “cable systems” do not apply to TV streamers

The 9th Circuit delivered its ruling in the Fox Television Stations v Aereokiller case on 21 March. The case relates to the TV streaming services provided by FilmOn.

FilmOn provides a service that uses antennas to capture over-the-air broadcast programming – much of it copyrighted – and then uses the internet to retransmit this programming, utilising both subscription and ad-based methods of revenue generation. Essentially, it enables you to watch TV on your computer.

The dispute centred on section 111 of the U.S. Copyright Act (17 U.S.C. § 111), which provides that a “cable system” is eligible for a compulsory license. Such a compulsory licence allows “cable systems” to retransmit “a performance or display of a work” originally broadcast by someone else without having to secure the consent of the copyright holder.

In order to maintain its compulsory licence, the “cable system” must pay a statutory fee to the Copyright Office – as well as complying with other regulations.

FilmOn contended that its services fall under the “cable system” definition and it should therefore be granted a compulsory licence.  

A group of broadcasters (including, inter alia, Fox, NBC Universal, ABC, CBS and Disney Enterprises Inc.) argued that the services provided by FilmOn do not fall under the definition of “cable system” as provided under § 111 and it should therefore not be granted a compulsory licence.

A statement on page 7 the ruling sheds further light on why this issue was so hotly contested by the parties:

“Compulsory licences are highly coveted, in no small part because, according to the Copyright Office, the royalty payments the Act requires cable companies to pay are “de minimis” when compared to the gross receipts and revenues the cable industry collects, a gap suggesting that the government-set rates fall well below market levels.”

Unfortunately, court found itself at an impasse: “The text of § 111 is written in broad terms, and both sides can make plausible arguments about the statute’s purposes and legislative history.”

The court goes on to state “that the meaning of § 111 is ambiguous on the precise question before us”.

To overcome this impasse, the decision hinged on arguments brought by the Copyright Office and the weight the court was willing to give those arguments. The court utilised the Skidmore framework (precedent that allows the court to rely on the arguments of a government agency in cases where there is no clear law).

The Copyright Office argued that FilmOn’s services do not fall under the definition of “cable systems”. Historic Copyright Office arguments have posited “that a provider of broadcast signals [must] be an inherently localized transmission media of limited availability to qualify as a cable system.” Significantly, Congress has for years been aware that the Copyright Office views internet-based retransmission services as not falling under the definition of “cable systems” and has never moved to amend or comment upon this view.

The arguments presented by the Copyright Office were therefore afforded significant deference in this case, since the statute was found to be ambiguous on the issues at stake and the Copyright Office proffered cogent arguments to address matters. The court noted that “To the extent the legislative history provides relevant evidence of § 111’s meaning, we would defer to the Copyright Office’s interpretation of it, seeing as the Copyright Office has a much more intimate relationship with Congress and is
institutionally better equipped than we are to sift through and to make sense of the vast and heterogeneous expanse that is the Act’s legislative history.

In summary, it was on the strength of the arguments brought by the Copyright Office, that court found that “a service that captures copyrighted works broadcast over the air, and then retransmits them to paying subscribers over the Internet without the consent of the copyright holders, is not a “cable system” eligible for a compulsory license under the Copyright Act.”

This story will continue, as FilmOn is arguing two similar cases at the D.C. Court of Appeals and the 7th Circuit Court of Appeal.

Friday, 24 March 2017

Cable retransmission within reception area copyright free?!

A few days ago the Court of Justice of the European Union (CJEU) issued yet another judgment on the right of communication to the public within Article 3(1) of the InfoSoc Directive: it is Staatlich genehmigte Gesellschaft der Autoren, Komponisten und Musikverleger registrierte Genossenschaft mbH (AKM) v Zürs.net Betriebs GmbH, C-138/16.

In a reference for a preliminary ruling from the Commercial Court of Vienna, the CJEU was asked to determine whether the transmission of broadcasts by “communal antenna installations” is subject to the authorisation of the relevant rightholder in that it falls within the scope of Article 3(1) of the InfoSoc Directive. 

The 1709 Blog is delighted an analysis of the decision by Professor Dirk Visser (Leiden University), which has also been pubished on the Leiden Law Blog.

Here's what Professor Visser writes:

"Is cable retransmission within the reception area of the original broadcast copyright free? 

In a ruling on 16 March 2017 the CJEU seems to answer this question in the affirmative. If this is indeed the case, it constitutes a new ‘game changer’. It implies that there would no longer be a need to pay for the cable retransmission of national television programmes from for example the Dutch national public broadcaster NPO and the commercial broadcasters RTL and SBS.

According to the CJEU, there is no copyright-relevant ‘communication to the public’ in the case of "simultaneous, full and unaltered transmission of programmes broadcast by the national broadcasting corporation, by means of cables on national territory […] provided that it is merely a technical means of communication and was taken into account by the author of the work when the latter authorised the original communication". In this case, according to the Court, there is no ‘new public’, and therefore no copyright-relevant communication which requires separate permission from the rightholders.

Prof Visser
In the early 1980s, the Dutch Supreme Court (Hoge Raad) ruled that in the case of cable retransmission within the reception area, there is a ‘communication to the public’. The Dutch Supreme Court decided that a ‘new public’ was not required; the only thing that mattered was if there was another ‘organization’ involved, for example the operator of a central antenna installation. Later, the copyright status of cable retransmission was codified in a separate EU Directive.

In recent years the CJEU has introduced the ‘new public’ criterion again, but reframed the criterion and explained that in most cases there is a ‘new public’. In cases of cable retransmission or broadcasts in hotels, cafes, spas and rehabilitation centres, there is always a ‘new public’ that was ’not taken into account by the author of the work when the latter authorised the original communication’.

Internet retransmission of a TV signal within the reception area of the original broadcast was, according to the Court, relevant to copyright anyway because this was a different transmission technology. Whether or not a new public is reached would be irrelevant here.

But now suddenly the CJEU has found that people in Austria who just watch the public service channel via cable, have already been taken into account in the satellite and terrestrial broadcast, and therefore no permission or payment is required for this type of transmission. This is an understandable argument in itself, but it is certainly contrary to what has been assumed in the legislation and case law over the past twenty to thirty years. The ‘other technique’ of cable retransmission is apparently irrelevant.

The CJEU decided in this case without the opinion of the Advocate-General in a small chamber, so maybe it is a slip. If not, this could be a real game changer in the area of audio-visual copyright."

Wednesday, 22 March 2017

R.I.P. Conceptual Separability Test


The US Supreme Court held on March 22, 2017 that a feature incorporated into the design of a useful article is eligible for copyright protection “if, when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium.” The case is Star Athletica LLC v .Varsity Brands. Justice Thomas wrote the opinion of the Supreme Court.
Conceptual Separability is Much Safer
Readers of this blog may remember that this case is about whether cheerleading uniforms can be protected by copyright. Both parties are creating and selling cheerleading uniforms. Varsity Brands has registered some 200 copyrights for two-dimensional designs appearing on the surface of their uniforms and other garments. It sued Star Athletica for copyright infringement, claiming that its competitor had copied five of its designs protected by copyright. The Western District Court of Tennessee granted summary judgment to Star Athletica, reasoning the designs could not be protectable by copyright, as they could not be separated from the utilitarian function of the uniforms (see here for more). On appeal, the Sixth Circuit Court of Appeals reversed, finding Varsity's designs to be copyrightable graphic works. The Supreme Court affirmed.

Useful articles cannot be protected by copyright, but a pictorial, graphic, or sculptural work incorporated in the useful article can be protected if it is separable from the useful article. However, such design must be capable of being “identified separately from, and [must be] capable of existing independently of the utilitarian aspects of the article,” 17 U.S.C. § 101. The design can be physically separable or “conceptually separable” from its utilitarian aspect. Physical separability occurs if the feature seeking copyright protection can “be physically separated from the article by ordinary means while leaving the utilitarian aspects of the article completely intact,” Compendium §924.2(B). This is easily understandable, but conceptual separability, which applies if physical separability by ordinary means is not possible, is the stuff [bad] dreams [of IP attorneys] are made of. Or, at least, it was, as today’s opinion signals its demise.

The first part of the new test requires that the design seeking copyright protection must be able to be perceived as a two or three-dimensional work of art separate from the useful article. This was the case here. Justice Breyer dissented from the majority, reasoning that the designs on the cheerleading uniforms are not separable because if one would remove them from the uniforms and place them on another medium of expression, such as a canvas, it would create “pictures of cheerleader uniforms.” But Justice Thomas wrote that this does not prevent these deigns to be protected by copyright, because

“[j]ust as two-dimensional fine art corresponds to the shape of the canvas on which it is painted, two-dimensional applied art correlates to the contours of the article on which it is applied.  A fresco painted on a wall, ceiling panel, or dome would not lose copyright protection, for example, simply because it was designed to track the dimensions of the surface on which it was painted” (p. 11).

The second part of the new test requires that the design must be able to exist apart from the utilitarian aspect of the article, as its own pictorial, graphic, or sculptural work. If it can’t, then it is one of the useful article's utilitarian aspects. Thus, the design itselfcannot be itself a useful article (p. 7).

This interpretation is consistent with Mazer v. Stein, a 1954 Supreme Court case studied by all U.S. copyright students. Justice Thomas noted that two of its holdings are relevant in our case (p. 9).  The Court held in 1954 that a work of art which serves a useful purpose can be protected by copyright. In the case of Mazer v. Stein, it as was statue which served as a lamp base. The Court also held in 1954 that a work of art is copyrightable even if it was first created as a useful article. Justice Thomas specified that, in our case, the Court interpreted the Copyright Act in a way which is consistent with Mazer v. Stein as today’s opinion “would afford copyright protection to the statuette in Mazer regardless of whether it was first created as a standalone sculptural work or as the base of the lamp.

R.I.P. conceptual separability test. Justice Thomas explains it is no longer needed, as “[c]onceptual separability applies if the feature physically could not be removed from the useful article... Because separability does not require the underlying useful article to remain, the physical-conceptual distinction is unnecessary” (p.15).

Justice Thomas clarified the scope of the opinion as such:

To be clear, the only feature of the cheerleading uniform eligible for a copyright in this case is the two-dimensional work of art fixed in the tangible medium of the uniform fabric. Even if respondents ultimately succeed in establishing a valid copyright in the surface decorations at issue here, respondents have no right to prohibit any person from manufacturing a cheerleading uniform of identical shape, cut, and dimensions to the ones on which the decorations in this case appear” (p. 12).

But what makes a particular uniform feature of stripes and chevrons particular, is it because they are applied on the uniform, or because the uniform is cut in such a way and uses such contrasting colors  on which the designs are appearing?

Justice Ginsburg concurred, but she took the view that “[c]onsideration of [the separability] test is unwarranted because the designs at issue are not designs of useful articles. Instead, the designs are themselves copyrightable pictorial or graphic works reproduced on useful articles… [and may thus] gain copyright protection as such” (p. 23 and p. 24).

Should we cheer? Time will tell.