New Rules applying to IP Licenses in Europe starting May 1, 2014

On March 21, 2014 the European Commission, pan-European enforcer of antitrust rules, adopted a new version of its Technology Transfer Block Exemption Regulation and accompanying Guidelines. The new Regulation, which will take effect on May 1, 2014 once the Regulation currently in force expires on April 30 (the “old Regulation”), continues along the same lines and exempts certain categories of licensing agreements from the prohibition against anti-competitive agreements envisaged in Article 101 of the Treaty on the Functioning of the European Union (“TFEU”). If a certain agreement falls under the Regulation, the agreement will be “deemed to have no anticompetitive effects or, if they do, the positive effects outweigh the negative ones”. The most radical changes relate to termination and grant-back clauses (which will never be exempted), passive sales (which can never be hindered in accordance with other EU legislation) and IP settlements and pools (for which additional guidance is provided).

While the new Regulation and Guidelines will start applying in a few days, a one-year transitional period (until April 30, 2015) is contemplated in Article 10 of the new Regulation. This transitional period grants the benefits of the Block Exemption to all those agreements which were compliant with the old Regulation yet non-compliant with the new Regulation.

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Proving a Likelihood of Confusion Remains an Uphill Battle for Trademark Owners in Keyword Advertising Cases

How confused are you when you search terms and see paid advertising generated as the result of the keywords you inserted? An increasing number of cases show a likelihood of confusion is a difficult element to meet by plaintiff trademark owners.

People use search engines to weed through millions of products that are available on the Internet. Search engines have thus become an important marketing tool to direct web traffic to businesses and a major source of revenue for search engine providers, such as Google.  Search engine providers sell search terms or keywords to advertisers, allowing advertisement links to appear on the results page when the purchased keywords are searched. Google generated over 50 billions in revenue for its advertising program in 2013.

In 2004, Google updated its Adwords advertising policy permitting advertisers to purchase trademarks as search terms with or without the trademark owners’ approval. Thus, if a soft drink company buys a keyword “coca cola,” anytime a user searches the term “coca cola,” Google would display both the paid advertising listings that would show the soft drink advertiser’s link and the free organic search results. This controversial policy resulted in more than 20 lawsuits filed against Google.

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2014 Symposium: Fair Use for Free, or Permitted-but-Paid?

BTLJ is excited to welcome Jane C. Ginsburg of Columbia Law School on April 3–4, 2014 to the 18th Annual BTLJ/BCLT Symposium: The Next Great Copyright Act.

This is a summary of Professor Ginsburg’s topic of discussion and forthcoming article:

Fair use has gone off the rails, first with the Sony “Betamax” decision, and more recently with the transformation of “transformative use” from a factor fostering new creativity to one favoring new copyright-dependent business models and socially beneficent reiterative uses.  We should cease muddling authorship-grounded fair uses with judge-made exceptions whose impetus derives from distinct considerations.  Moreover, I suggest that the other exceptions should not always produce free passes.  Instead, I propose that many of the current social subsidy fair uses and market failure fair uses be “permitted but paid,” and explore how we might implement that proposal.

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2014 Symposium: Copyrightable Subject Matter in the Next Great Copyright Act

BTLJ is excited to welcome R. Anthony Reese of UC Irvine School of Law on April 3–4, 2014 to the 18th Annual BTLJ/BCLT Symposium: The Next Great Copyright Act.

This is a summary of Professor Reese’s topic of discussion and forthcoming article:

Drafting the Next Great Copyright Act will require defining the scope of subject matter protected by the Act. This key aspect of framing a revised copyright statute determines what can and cannot be protected by copyright and represents Congress’s judgment about which creations of authors need copyright’s protection and which should remain free from claims of ownership that would restrict copying. This Article proposes four principles to guide the drafters of the Next Great Copyright Act in framing the act’s subject matter provisions. First, Congress should expressly enumerate all of the categories of works that are protected by the statute, and should not draft the statute to allow Courts or the Copyright Office to recognize copyright in additional, unenumerated categories. Second, Congress should decide which categories of work to actually protect, and should not simply grant protection to everything that constitutes the “Writing” of an “Author” under the Constitution’s Copyright Clause. Third, Congress should define each of the categories of copyrightable works to which it grants statutory protection. And fourth, Congress should grant copyright protection to a compilation or a derivative work only if that compilation or derivative work falls within one of the expressly enumerated categories of protectable works.

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2014 Symposium: Copyright Licensing and Fair Use

BTLJ is excited to welcome Rebecca Tushnet of Georgetown Law School on April 3–4, 2014 to the 18th Annual BTLJ/BCLT Symposium: The Next Great Copyright Act.

This is a summary of Professor Tushnet’s topic of discussion and forthcoming article, All of This Has Happened Before and All of This Will Happen Again:

Claims that copyright licensing can substitute for fair use are nothing new.  This cycle’s variation in the licensing debate, however, offers a few tweaks.  First, the new licenses often purport to allow the large-scale creation of derivative works, rather than the mere reproduction that was the focus of earlier blanket licensing efforts.  Second, the new licenses are often free, or even offer opportunities for users to profit.  Rather than demanding royalties, copyright owners just want a piece of the action—along with the right to claim that unlicensed uses are infringing.  In a world where licenses are so readily and cheaply available, the argument will go, it is unfair not to get one.

These new attempts to expand licensing in ways that take into account the digital economy and the rise of “user-generated content” also face a fair use doctrine that is in some ways less favorable to copyright owners than it was several decades ago, when a few key decisions supported the rise of (allegedly) blanket reproduction licenses.  While copyright owners have lost some significant cases in court, they are trying to change the facts on the ground to achieve many of the same benefits that they could get from a legally established right to license transformative uses.  This short paper will describe recent innovations in licensing-by-default in the noncommercial or formerly noncommercial sphere  and discuss how the licensed versions differ from their unlicensed alternatives in ways both subtle and profound.  These differences, which change the nature of the communications and communities at issue, help explain why licensing can never substitute for transformative fair use, even when licenses are routinely available.

Initiatives such as YouTube’s Content ID, Getty Images’ new free embedding of millions of its photos, and Amazon’s Kindle Worlds all attempt to get internet users accustomed to copyright owner supervision—with a very light, rarely visible touch—of uses that are individually low-value but might produce some aggregate income, or at least some consumer behavior data that could itself be monetized.  While there’s room in the copyright ecosystem for these initiatives, it would be a grave mistake to conclude that the problem of licensing has finally been cracked and that fair use can now, at last, retreat to a vestigial doctrine. Ultimately, as courts have already recognized, the mere desire of copyright owners to extract value from a market—especially when they desire to extract it from third parties instead of licensees—should not affect the scope of fair use.

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2014 Symposium: Reforming Section 108 for Libraries and Archives

BTLJ is excited to welcome David R. Hansen of UNC Law School on April 3–4, 2014 to the 18th Annual BTLJ/BCLT Symposium: The Next Great Copyright Act.

This is a summary of Mr. Hansen’s topic of discussion and forthcoming article:

U.S. libraries, archives, and museums are stewards of some of the largest collections of copyrighted content in the world. These institutions hold well over 2.8 billion items, the vast majority published since 1922, the year in which the public domain effectively ends for many users in the United States. This article is about how Section 108 reform can help (and potentially hurt) these organizations in their efforts to preserve and make this content more available to the world.

The existing law of fair use, first sale, and statutory limitations on remedies are all critically important tools for further opening library and archive collections to the world. Indeed, with current library practice, Section 108 is of little use for many library projects; the flexible doctrine of fair use is relied upon instead. Any effort to reform Section 108 must, as its first goal, preserve the availability of fair use and these other tools. But within that context, a modest update to Section 108 could provide an important safe harbor for libraries and archives that seek more certainty about making their collections available online.

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2014 Symposium: Legislating Digital Exhaustion

BTLJ is excited to welcome Aaron Perzanowski of Case Western Reserve University Law School and Jason Schultz of New York University Law School on April 3–4, 2014 to the 18th Annual BTLJ/BCLT Symposium: The Next Great Copyright Act.

This is a summary of the authors’ topic of discussion and forthcoming article:

The shift to a digital distribution model, from one premised on selling physical artifacts to one defined by transferring data, is among the most important changes in the markets for copyrighted works since the enactment of the 1976 Copyright Act. The disconnect between our current statutory rules and this new reality of the copyright marketplace is particularly evident when it comes to the question of exhaustion. The first sale doctrine in Section 109 was constructed around a mode of distribution that is rapidly becoming obsolete. As a result, the benefits and functions it has long served in the copyright system are at risk. Building on our earlier work, this Article will argue that a meaningful exhaustion doctrine should survive the digital transition. After explaining the two primary hurdles to digital exhaustion under the existing statutory regime, we outline two possible approaches to legislating digital exhaustion, concluding that a flexible standards-based approach that vests considerable authority with the courts is the better solution.

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The Computer Fraud and Abuse Act: Circuit Split and Efforts to Amend

The Ninth Circuit’s 2012 decision in United States v. Nosal created a circuit split regarding the interpretation of the phrase “exceeds authorized access” in the Computer Fraud and Abuse Act (CFAA).  The Ninth Circuit (since joined by the Fourth Circuit) held that one “exceeds authorized access” to a computer by violating an access restriction (e.g., do not access File X), but not by violating a use restriction (e.g., do not use the computer for non-business purposes).  This interpretation conflicts with the First, Fifth, Eighth, and Eleventh Circuits, which have held that use restrictions are within the scope of “exceeds authorized access.”

This post compares the Ninth Circuit’s access-only interpretation of the CFAA with the use-and-access interpretation, and suggests these two positions are not that different.  This post then discusses the alternative, code-based interpretation and recent efforts to amend the CFAA.

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Canada’s Approach to Intermediary Liability for Copyright Infringement: the Notice and Notice Procedure

In 2012, Canada adopted the Copyright Modernization Act as a comprehensive reform of Canadian copyright law and addressed the issue of liability for copyright infringement by online intermediaries. Rather than adopting a “Notice and Takedown” procedure like the United States did at § 512 of the Digital Millennium Copyright Act (DMCA), Canada’s new Copyright Act enacts a “Notice and Notice” procedure at §§ 41.25 and 41.26. Those provisions are not yet in force, but the Canadian Government announced in October 2013 that they would be in the “near future.”

This post describes the differences between the respective approaches of the United States and Canada, addresses their pros and cons, and discusses how the recently leaked Trans Pacific Partnership agreement may require a harmonized approach in the two countries.

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A Futile Effort? Efforts to Clarify the Entire Market Value Rule

Company A owns a patent that tells the difference between CDs and DVDs. Company B infringes on A’s patent by incorporating A’s technology into the laptops B manufactures, which incorporates thousands of other patents. Generally in calculating damages, total royalties awarded equal the royalty base multiplied by the royalty rate. Should the proper royalty base be the value of all the infringing laptops sold or the value of all infringing disc-drives sold? Suppose there was some evidence customers were buying the infringing laptops because of A’s patent?   This hypothetical, based on LaserDynamics Inc. v. Quanta Computer, Inc., illustrates an area of patent reform subject to debate regarding the proper scope of the Entire Market Value Rule (EMVR). Company B may pay hundreds of millions more in damages in this multi-component patent case depending on whether EMVR applies yet the present case law describing when EMVR applies is murky. Despite efforts by the Federal Circuit to clarify EMVR’s application, uncertainties remain. This post reviews some of the present uncertainties and surveys commentary regarding EMVR.

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