Spike Lee, WIPO, the UDRP, and the Cult of Domain Name Personality

Spike Lee, the Knicks loving, media controversy courting, director of such movies as "He Got Game" and "She Hate Me" found his unusually high profile name for a director hijacked by a cyber squatter in the Philippines. Anyone familiar with domain name registration knows that all it takes to get an unregistered name is $15 (or less) and a dream. The automated registrar process requires virtually no verification and is almost entirely anonymous, save the requirement for a contact name for the registrar and ICANN's databases. Hence, if I wanted to, I could register the name of my local church chaplain and direct it to a porn site, without any notification. And that is exactly what Mercedita Kyamko, of Angeles City, Philippines did to Spike. In fact, Spike was in esteemed company, as Mercedita had already done the same to Carlos Santana of the rock band Santana.

Fortunately, Spike availed himself of the inexpensive and accessible Uniform Dispute Resolution Policy “UDRP.” This is an arbitration policy that registrars authorized to lease domain names impose upon the registering party. So when you register a domain name, you are agreeing to be subject to this policy and arbitration as opposed to litigation in court, if a third party claims that you are “cybersquatting” a domain name. Third parties can initiate an arbitration proceeding through a variety of bodies, including the U.N.’s World Intellectual Property Organization . The fee for such arbitration is a flat fee and associated attorneys fees are typically lower to file and argue these arbitrations. This is a significant savings over having to file a court action in a local court. How hard would Spike’s life be if he had to file a court action in the Philippines, or even in New York? In fact most often, the cybersquatter defaults, just as Mercedita did.

Spike prevailed and regained control of his name and his dignity. Wahab, Riveles & Medenica is well versed in arbitration under the UDRP and has used it to successfully and inexpensively defend the domain name rights of businesses that depend on them for success.


Kaiser Wahab

If Napster was Playing Foul, then why does Grokster Get Away With It?

Peer to peer (P2P) file sharing scored a big win in the 9th circuit with the Grokster decision. But how do you reconcile the Grokster decision with the earlier and infamous Napster case that caused such uproar in the file-sharing community? Although both cases involved the use of file-sharing software to facilitate the exchange of infringing materials, the Grokster court drew a drastic distinction by refusing to impose blanket liability on the file-sharing software defendants because the infringing files did not reside on a central server within the file-sharing software’s control.

To better appreciate the impact of Grokster it is necessary to understand the nature of P2P and the extent of protection granted to copyrighted works under federal law. At issue in both Napster and Grokster were the contributory and vicarious provisions of the Copyright Act. Almost everyone knows that copying or distributing a copyrighted work, such as a CD or a song, without the author’s permission is a violation of the Copyright Act. A less well-known fact, however, is that such direct copyright infringement can also impose liability upon anyone whose indirect contribution or supervision furthers the infringing act at issue.

Under the contributory copyright infringement section of the Copyright Act, a defendant can be found liable for copyright infringement where there is: (1) direct infringement by a primary infringer, (2) knowledge of the infringement, and (3) material contribution to the infringement. Similarly, under the vicarious copyright infringement provisions, a defendant can be found liable for copyright infringement where there is: (1) direct infringement by a primary party, (2) a direct financial benefit to the defendant, and (3) the right and ability to supervise the infringers. A crucial element in both provisions is that the defendant must have a certain ability to control the infringing material by either contributing to or supervising the infringing act.

This ability to control was precisely at issue in both Napster and Grokster. In both cases, the court found that there was indeed direct infringement and specific knowledge of the infringing acts by the defendants. On the third prong of the analysis, however, the court differed in its determination. The reason for this differing outcome lies in the softwares’ fundamental structures.

In peer-to-peer networking, the information does not reside on central server but rather on each individual computer that is connected to the peer-to-peer network. Because this information is decentralized, and because each user wants to search for specific information, the software must provide some method of cataloguing or indexing the available information. The software connects each individual user, via the internet, to others using the same or similar software thereby creating a network of users. But without a method of indexing the available information, no user could access or search for the desired information.

There are currently three methods of cataloguing information: (1) a centralized indexing system where all files are maintained on centralized servers, (2) an entirely decentralized system where each computer maintains a list of its files, and (3) a “supernode” system where a select and shifting number of computers act as indexing servers.

Napster relied on the first system of indexing by employing a proprietary centralized indexing software architecture whereby available files were indexed on servers it owned and maintained. Accordingly, the Napster court found defendants liable for copyright infringement because Napster provided the sites and facilities for direct infringement and failed to police such premises to prevent ongoing copyright infringement by its users.

Grokster, however, relied on the “supernode” system whereby a select number of computers on the network act as indexing servers. In other words, any computer on the network can function as a supernode as long as it meets certain technical requirements. This essential difference between Napster and Grokster was crucial in the court’s determination. Because Grokster’s system was decentralized, the court could not find, as it did in Napster, that Grokster provided the sites and facilities to contribute to direct copyright infringement by its users, nor could it find that Grokster could supervise such activities. The court indeed highlighted the fact that the infringing materials never resided upon Grokster’s computer and that Grokster did not have the right to suspend its users’ accounts regardless of its knowledge of infringing activity. Accordingly, the court found that Grokster was not liable for contributory of vicarious copyright infringement.

What is interesting about these cases is that Napster and Grokster perform almost exactly the same function by allowing users to swap and download information, whether infringing or not. Yet, within a few years of each other, one is found liable for copyright infringement and other is not. As the Grokster court correctly notes: “[W]e live in a quicksilver technological environment with courts ill-suited to fix the flow of internet innovation.”

Olivera Medenica

Woodie Guthrie Settles with JIBJAB Media

In a quiet twist that brings an end to what promised to be a classic showdown hinging on the application of the parody exception to copyright, Woodie Guthrie, famed folk song writer and performer, settled his lawsuit against popular web comic portal http://www.jibjab.com. At issue was the parodical version of the song "This Land is Your Land" in a Flash Animated web cartoon, featuring talking bobbing heads of George W. Bush and John Kerry. The talking heads trade shots about who is more qualified to lead the nation, while singing a modified version of the song. Although the song's lyrics were modified, the main refrain and the melody were left intact.

Contrary to the song's vision of sharing, Guthrie maintained that the song was illegally employed and that the modifications were too minor to escape copyright infringement. On the other hand, JibJab maintained that the song was a parody of the classic original and therefore was not an infringement under the Copyright Act, meaning that no license was necessary for its use. In the end however, the parties did live up to the song's ideals and dropped their claims against each other. Due to the settlement, a major confrontation regarding a difficult facet of the Copyright Act was avoided. Hence, the motto "this song is your song" does not apply simply because parody is invloved.

Since its July debut the movie has been seen by over 9 million users, proving the net is destined to become the entertainment vehicle of choice.

Kaiser Wahab

Documentary Depiction Releases Versus the General Release

Typically, documentary subjects are cleared for use in the documentary through a "depiction" release. This release is similar to a general release, but the grant of rights, in addition to the usual language covering likeness, voice, etc., extends to “personal identification,” “personal experiences,” “incidents,” and generally events that are based in the party’s real life. Although, one can for practical purposes distinguish long sit down interviews from significantly shorter “man on the street” interviews, one should try to use a depiction release with as many interviewees as possible. And logically, the more the interviewee reveals about his/her life, the more the need for the release. Also, the fact the news crews do not typically use release forms when conducting field interviews is due to the fact their use of the person is “journalistic” (i.e., the footage deals with something newsworthy that happened that day and will be used to convey the event to the viewers). As a result, they are not likely treading on the interviewee’s “right of publicity” (this is the right that most release forms address).



Kaiser Wahab

Offering Papers Business Plans and "Pari Passu"

I was recently asked what this term means. The term typically appears in investment instruments (everything from shareholders agreements to mutual fund regulations). “Pari Passu” generally means that an equity party shall have the same rights as another equity party. In plain English that usually means that one investor shall receive the same Return on Investment (ROI) as another investor.

Kaiser Wahab

Media Industry Must Go the Distance After Setback by Grokster Ruling

MGM et. al. v. Grokster, 03-55894 (9th Cir. August 19, 2004). 9th Circuit affirms partial dismissal of summary judgment motion for copyright infringement claims against Grokster based on contributory and vicarious infrignement arising from Grokster's peer-to-peer software.

Discussion of Case and its Significance at Corante

Trademark Registration Can be Used to Force an Out of State Infringer Using your Mark on the Internet into New York Federal Court

Did you know that federal trademark registration can be used to force an out of state infringer using your mark on the Internet into New York federal court? New York federal courts have held that use of a registered mark that potentially confuses, deceives, or misleads a New York computer user may give the court jurisdiction over the infringing party.

So, for example, you have federally registered a logo and a California company uses it to pass off imitation goods on their web site which is accessible in New York. You can use that as a basis to get that infringing party into New York federal court at their expense and inconvenience. This saves you time, money and trouble, and may exert enough pressure in itself to get the infringing party to cease and desist. This is another huge advantage to federal trademark registration.

New York Long Arm Jurisdiction for actions sounding in trademark is fairly aggressive. Under the basic standard, harm of lost sales or customers arising out of potential likelihood of confusion (the basis of trademark infringement) has been sufficient for asserting in personem jurisdiction over an out of state defendant. However, in those instances where there is no conceivable possibility or actual harm to computer users “within the state,” such jurisdiction has not been found. So, in gauging the relative value in asserting a motion to dismiss on jurisdiction grounds, you must determine if your client’s use of the subject mark or a mark that potentially confusingly similar has sufficient potential to confuse or deceive a New York computer user.

The following is an excerpt from Starmedia Network, Inc. v. Star Media, Inc., 64 U.S.P.Q.2D (BNA) 1791 and offers an example:

Under New York law, injury "within the state" includes harm to a business in the New York market through lost sales or customers, as well as harm and threatened harm in the New York market resulting from the confusion and deception of New York computer users. See Citigroup Inc. v. City Holding Co., 97 F. Supp. 2d 549, 568 (S.D.N.Y. 2000); American Network v. Access America/Connect Atlanta, Inc., 975 F. Supp. 494, 497 (S.D.N.Y. 1997). Plaintiff's allegations of harm resulting from the potential for confusion and deception satisfy the requirement of an injury "within the state." See Cable News, 2000 WL 1678039, at *4; Telebyte, Inc. v. Kendaco, Inc., 105 F. Supp. 2d 131, 135-36 (E.D.N.Y. 2000).

Kaiser Wahab

Fair Use is Not Absolute--Copyrighted Video Clips as Short as 2 Seconds can Lead to Liability

Question:
I was recently asked if the use of 2 second long coyrighted music video clips in a cable access show under consideration to be picked up by Canadian Brodcasting would pose problems, if they are not cleared. Often people consider fair use to be a magic shield against copyright infringment. This is rarely the case.

Answer:
The use of unlicensed copyrighted video clips with regard to American Copyright law falls under the doctrine of “Fair use.” Under Canadian Law a similar concept is called “Fair Dealing.” Fair Use and Fair Dealing are defenses to an unlicensed use of copyrighted materials, which would be a copyright infringement. I will speak about fair use. This concept is truly difficult to pin down and is often misunderstood. Generally speaking, it is possible to use unlicensed copyrighted materials under certain circumstances. For example, educational use (e.g., libraries, classrooms, etc.) is a classic fair use category. However, many also mistakenly believe that non-profit use (i.e., use of the material does not bring revenue to the user) is automatically a fair use—this is not so. However, when such an unlicensed use generates revenue or is for a commercial purpose (as in your case), that typically weighs against finding fair use. Also, the length of the clips are an issue—obviously the less copyrighted material one uses the better chance there is a fair use. In addition, there are other factors that are beyond the scope of a short response.

So, the final answer to the question is that “it depends.” It rarely pays to take a chance on copyright infringement, especially if the clips are from well known videos. One may want to either acquire a license or remove the copyrighted clips, as copyright infringement has been found in other cases for video clips as short as two seconds.

Kaiser Wahab

Basic Definition of a Film Distributor

Recently I was asked about the middlemen that broker deals with theaters and other exhibitors. Once a filmmaker gets a movie in the can, it is the job of the "distributor" to get it promoted and seen. Typical distribution agreements grant a distributor exclusive rights to distribute a film on a worldwide basis or within particular regions, for a pre-negotiated fee; usually a percentage of revenue. Regions are generally divided into the Domestic Market (U.S. and Canada) and International, which are all the rest of the territories divided either by country, i.e., the U.K., France, etc. or by region, i.e., Australia. A major distributor with worldwide scope may take all worldwide rights or just one or a few regions. The rights, which they acquire is negotiable depending on what leverage the producer has.

So for example, you've made a film and you are based in Kentucky, with no contacts in France. You would then license a distributor or distributors with relationships there to rent prints for your film for exhibition in that region. However, some distributors will be contracted only to distribute video or other exploitations of the film.

Usually, the distributor will receive a percentage of the revenue generated from the exhibitors in addition to any costs it picks up (and there are many). The license you grant to the distributor is based primarily on your (or the production company's) copyright to the movie, the script, and other underlying elements (music, etc.).

Distributor agreements and arrangements can become very complex and distributors should be screened thoroughly for reliability and trustworthiness. No producer/filmmaker should enter the fray without good legal counsel and a solid understanding of how the distribution system works.

Kaiser Wahab

LLC Liability Protection is not Unlimited

How much protection do LLCs really give you? Well, it depends. In New York, forming an LLC can give you significant tax benefit and a more flexible business model than the old-fashioned corporate form. But this flexibility has its limits. Increasingly, New York courts apply the doctrine of "piercing the corporate veil" to LLCs where its members have exercised complete dominion over the LLC's business assets to further personal goals to the detriment of another. In other words, courts have created a sister "piercing the LLC veil" theory allowing an injured party to reach the personal assets of the LLC's members. To read more about this topic, look for WRM Partner Olivera Medenica's upcoming article publication entitled "Does your LLC protect your personal assets? You tell me."

Olivera Medenica