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Ruling Imagination:Law, Art & Creativity

Bow down to your corporate overlords and accept that being cheated is merely the way consumer culture works.

11/2/2015

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Back in 2009, I wrote 2 guest posts (Part 1 & Part 2) for Karl Bayer's Disputing Blog about contractual arbitration clauses that deprive individuals of any realistic way of holding corporations responsible for ways in which those corporations cheat individuals. The clauses do so by requiring in virtually any purchase or loan--without any possibility of negotiating otherwise--that individual, rather than class, arbitration be used to resolve any disputes that might arise between the corporation and the individual. By eliminating the possibility of class action lawsuits, these arbitration clauses effectively deprive individuals of any legal remedy; the corporations always have enough money to make the process too expensive for the individual to pursue on his or her own.

In 2008, recognizing the injustices at work, courts were increasingly refusing to enforce those arbitration clauses. But in 2011 the Supreme Court stopped that trend in its tracks, upholding the legitimacy of contract clauses that require consumers to arbitrate individually any disputes over their transactions. The result, as I predicted and as the New York Times makes clear in a 2-part series (Part 1 & Part 2) this past weekend, is that there is no longer any legitimate opportunity to hold companies responsible for actions that cheat consumers. Even more alarmingly, as the Times discusses, "at stake are [also] claims of medical malpractice, sexual harassment, hate crimes, discrimination, theft, fraud, elder abuse and wrongful death." 

In Part 2 of my 2009 pieces I laid out at length the reasoning courts had engaged in prior to 2011 and that the Supreme Court rejected. As I wrote back then:

Fortunately, however, courts have very recently begun to refuse to enforce mandatory arbitration clauses in consumer transaction because they are recognizing, as the Pennsylvania Law Encyclopedia quoted above states, there are “grounds in law or in equity” for doing so. Two years ago, in Douglas v. Talk America, (9th Cir. 2007), the plaintiff challenged, by means of a class action complaint, the validity of an amendment made to the contract governing his telephone service. The amendment to the contract, among other things, required arbitration of all disputes arising under the contract. Moreover, the amendment was made unilaterally and without any notice other than the posting of the revision on the defendant’s web site. The U.S. Court of Appeals for the 9th Circuit, applying California law, held that the amended contract, including the arbitration provision, was unenforceable and dismissed the defendant’s motion to compel arbitration. The court rejected the reasoning applied by the New York courts that the plaintiff had “meaningful alternative choices for telephone service.” Id. at 8. The court also made clear that, absent the inclusion of the arbitration clause in the defendant’s unilateral modification of the original contract, a relinquishment of the right to bring a class action also “may be” unenforceable under California law, though it would be enforceable under New York law. Id. at 8-9. Douglas, however, may be of limited use as precedent in challenging mandatory arbitration clauses even outside of New York because the arbitration clause was added by means of the defendant’s unilateral amendment to the contract, an amendment that was unenforceable merely by virtue of the fact that a party can’t unilaterally change the terms of a contract; it must obtain the other party’s consent before doing so.” Id. at 4 (citations omitted).

This 9th Circuit’s reasoning in Douglas was extended in Harris v. Blockbuster, Inc. (N.D. Tex. April 15, 2009). In Harris, the court, applying Texas law, refused to enforce a mandatory arbitration clause in an online transaction despite the fact the clause was in the original contract and the contract had not been amended. Nonetheless, the court reasoned that the contract was unenforceable merely because the defendant had reserved the right to unilaterally amend its all of its terms, including the arbitration clause. Thus, the court concluded, the original contract had been “illusory.” Harris represents an extension of Douglas in that the right to amend even in the absence of amendment voids the entire contract. Nonetheless, as a matter of contract doctrine the case is problematic, at least outside of Texas. Generally, courts will find consideration supporting a contract that has not been amended, even if the contract purports to grant a right of unilateral amendment. Given the presence of consideration, the unmodified original contract would not be “illusory.” Indeed, the court in Douglas seemed to be operating on the assumption that under California law the contract in that case would have been enforceable had it not been amended (though the unmodified original contract in Douglas did not require arbitration).

Even more recently, however, the New Mexico Supreme Court faced squarely the consumer protection concerns implicated by mandatory arbitration clauses and refused to enforce a mandatory arbitration clause in an online transaction without engaging in strained academic application of the doctrine of consideration. Fiser v. Dell Computer Corp., ___ P.3d ___ (N.M. June 27, 2008). Instead, the court in Fiser struck down the arbitration provision and class action waiver precisely because the agreed upon arbitration procedure would preclude class action arbitration or litigation and was therefore “contrary to fundamental New Mexico public policy.” Id. at 4. The plaintiff in Fiser had filed a class action complaint against Dell Computer alleging, among other things, violations of New Mexico’s laws governing unfair business practices and false advertising. The complaint alleged that Dell Computer had “systematically misrepresent[ed] the memory size of its computers.” Id. at 3. Importantly, the complaint also alleged that the monetary damage suffered by each class member was only $10-$20. Id. Dell moved to stay the class action and compel arbitration of the plaintiff’s individual claim based on the mandatory arbitration clause set forth in the online agreement pursuant to which the plaintiff had purchased his Dell computer. Id. at 3-4. The trial court granted the motion, the court of appeals affirmed, and the New Mexico Supreme Court granted the plaintiff’s petition for a writ of certiorari. Id.

The court made clear that “New Mexico strongly supports the resolution of consumer claims, regardless of the amount of damages alleged.” Id. at 4. Moreover, the court noted, for precisely the reasons discussed above, that the class action is a vital means of enforcing consumer rights:

The opportunity to seek class relief is of particular importance to the enforcement of consumer rights because it provides a mechanism for the spreading of costs. The class action device allows claimants with individually small claims the opportunity for relief that would otherwise be economically infeasible because they may collectively share the otherwise prohibitive costs of bringing and maintaining the claim. See, e.g., 1 Alba Conte & Herbeli B. Newberg, Newberg on Class Actions § 21 1.6, at 26 (4th ed. 2002). “In many cases, the availability of class action reIief is a sine qua non to permit the adequate vindication of consumer rights.” State ex reI. 2 Dunlap v. Berger, 567 S.E.2d 265, 278 (W. Va. 2002). “The class action is one of the few legal remedies the small claimant has against those who command the status quo.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 186 (1974) (Douglas, J., dissenting in part).

Id. at 5-6.

Given (a) the importance public policy objective, expressed through a number of different consumer protection statutes, to protect consumers against wrongdoing and (b) the necessity of the class action to remedy and deter such wrongdoing when the consumer has so little at stake the device is the only rational means at his disposal to do so, the court felt compelled to hold that the mandatory arbitration clause was void:

[B]eyond merely a procedural tool, the class action functions as a gatekeeper to relief when the cost of bringing a single claim is greater than the damages alleged. When viewed in this light, a contractual provision that purports to ban class actions for small claims implicates not just the opportunity for a class action but the more fundamental right to a meaningful remedy for one’s claims. This Court has recognized that the right of access to the courts is part of the right to petition for redress of grievances guaranteed by both the United States and New Mexico constitutions. Jiron v. Mahlab, 99 N.M. 425, 426, 659 P.2d 311, 312 (1983); see also U. S. Const. amends. I, XIV; N.M. const., art. II, § 18. While the class action ban may or may not rise to the level of a constitutional violation, a prohibition on class relief where there is no meaningful alternative for redress of injury certainly does not provide for effective vindication of rights. See Mitsubishi Motors Corp., v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 (1985) (“[S]o long as the prospective litigant effectively may vindicate its statutory cause of action in the arbitral forum, [a] statute will continue to serve both its remedial and deterrent function.”).

Id. at 7-8. In short, “by attempting to prevent him from seeking class relief, [Dell Computer] has essentially foreclosed the possibility that Plaintiff may obtain any relief.” Id. at 8 (emphasis in original).

Five days after the decision in Fiser, on July 2, the Supreme Judicial Court of the Commonwealth of Massachusetts followed the New Mexico Supreme Court’s lead and struck down contact provision in a consumer contract requiring individual arbitration of disputes because the enforcing it would be “contrary to the fundamental public policy of the Commonwealth favoring consumer class actions.” Feeney v. Dell, Inc., ___ N.E.2d ___ (Mass. Jul. 2, 2009). The plaintiff in Feeney had filed a class action complaint alleging that Dell Computer (again) had “improperly collected Massachusetts sales tax on the purchase of optional service contracts sold in connection with the purchase of Dell computers when . . . no such tax was due, and that the collection of such tax violated the Massachusetts consumer protection act.”

First, the court in Feeney made clear that technical contract doctrine was not going to stand in the way of vindicating consumer rights, stating that “[i]t is ‘universally accepted’ that public policy sometimes outweighs the interest in freedom of contract, and in such cases the contract will not be enforced.” Public policy requires disregarding mandatory arbitration clauses because “the class action . . . ‘was designed to meet a pressing need for an effective private remedy’” and “’traditional technicalities are not to be read into the statute in such a way as to impede the accomplishment of substantial justice.’” In addition, the class action is a means of achieving substantial justice in consumer contracts because “[p]ermitting consumers to sue as a class cure[s] the defect inherent in the consumer protection statute that no matter how egregiously a consumer might have been wronged, ‘the economics of a litigation designed to seek redress precluded an effective attack.’” (citations omitted.) And, of course, “[t]he right to a class action in a consumer protection case is of particular importance where . . . aggregation of small claims is likely the only realistic option for pursuing a claim.”

An additional point the court emphasized in Feeney is the class action’s deterrent effect: “Permitting Dell to prohibit class actions against it through its contracts with its customers would . . . undermines the public interest in deterring wrongdoing. Finally, the court observed that “the loss of an individual consumer’s right to bring a class action negatively affects the rights of those unnamed class members on whose behalf the class action would proceed.” The court made clear that it was not averse to class arbitrations and made a point of the fact they are available:

[C]lass arbitrations do in fact occur. See In re Am. Express Merchants’ Litig., [554 F.3d 300, 310 n.7 (2d Cir. 2009)], quoting Clancy, An Uninvited Guest: Class Arbitration and the Federal Arbitration Act’s Legislative History, 63 Bus. Law. 55, 56 (2007) (“It is apparent that ‘[c]lass arbitration is a swiftly growing phenomenon'”); McKee v. AT&T Corp., 164 Wash. 2d 372, 395 (2008) (“Class actions are often arbitrated”). Moreover, a majority of the Justices of the United States Supreme Court has, at least implicitly, indorsed class arbitrations as consistent with the FAA. See Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976, 992 (9th Cir. 2007), citing Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 454 (2003).

Accordingly, the court left the door open to the approval of contract provisions requiring class arbitrations, limiting the force of its ruling to “small value” consumer transactions in which any “clause effectively prohibit[s] class proceedings in any forum.” (emphasis added.)

Contract law should not be a means of enforcing performance of actions whose legitimate purposes are being perverted in a particular deal. The purpose of arbitration is not to be a procedural snare to trap a party into a situation in which he can get no feasible remedy for a legal wrong; its purpose is to promote efficient dispute resolution. Courts finally, in the last month, are making this point explicit. No doubt these issues will continue to be litigated in the immediate future; already, at least one firm has announced that it will be filing a class action against Amazon for breach of the Kindle end user license agreement in connection with Amazon’s recall of 1984 and Animal Farm. More importantly, the U.S. Supreme Court, toward the end of its recent term, has agreed to hear Stolt-Nielsen S.A., et al. v. AnimalFeeds International Corp., in which the Court will decide “[w]hether imposing class arbitration on parties whose arbitration clauses are silent on that issue is consistent with the Federal Arbitration Act.”

Courts are acting in legitimate ways when they require disputes to be resolved in ways that provide relief for and deterrence of wrongdoing. Institutions that administer arbitrations are beginning to recognize the problems as well. This month, the National Arbitration Forum (“NAF”) has entered into a consent decree, settling a suit brought by the Minnesota Attorney General, pursuant to which the NAF has agreed to refrain from arbitrating consumer transactions altogether. And the American Arbitration Association (“AAA”) has voluntarily imposed a moratorium on the administration of debt collection arbitration programs in all consumer transaction cases. It is time for legislatures to step in as well.

Unfortunately, of course, I was wrong. By a 5-4 vote in 2011 in ATT Mobility LLC v. Concepcion, 533 U.S. 333, the U.S. Supreme Court ruled that the Federal Arbitration Act of 1925 was inconsistent with the court decisions I had commented favorably upon in 2009 and held that an arbitration clause contained in a contract necessarily limited to the consumer to individual, rather than class, arbitration. Since there is rarely enough money at stake in consumer purchases to warrant taking on a company in an expensive (as well as secret and non-appealable) arbitration, the result is that consumers are left in most situations with no legal course of action to take in response to being cheated in those purchases. As a result, as the Times points out,
For companies, the allure of arbitration grew after a 2011 Supreme Court ruling [that is, ATT v. Concepion] cleared the way for them to use the clauses to quash class-action lawsuits. Prevented from joining together as a group in arbitration, most plaintiffs gave up entirely, records show.
​Citizens United was an alarming empowerment of corporations over individuals. But perhaps nothing has done for harm to individuals in their struggles with the corporate "persons" who sell them everything they must buy as the 5-4 decision of the Roberts' Court in ATT Mobility LLC v. Concepcion. 
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The use of pop songs by politicians--an utterly unresolved issue

10/27/2015

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:Samuel Whitesell does a service in summarizing several instances of the political use of pop songs without permission, but is entirely misleading in 2 respects. First, he implies that in each instance the "cease and desist letter" sent by the pop artist has some legal force in and of itself. As I've previously explained:
​A cease and desist letter has no force in and of itself: all it does is declare the copyright holder's belief that a work infringes a copyright and his threat to enforce that belief by means of a lawsuit if the alleged infringer doesn't stop what he is doing. The threat, however, is often an empty one. 
It should go without saying, of course, that not only is the threat often an empty one; the mere fact a lawsuit is filed proves nothing regarding the legitimacy of the lawsuit's claims. 

More importantly--and I can't say it often enough--copyright is not "property" in the sense your car or your home is; copyright does not give its owner the right to extract every last bit of economic value that inheres in the copyrighted work. We are not a society oriented only toward property ownership. Free expression, based primarily in the First Amendment of the Bill of Rights, is also foundational to our society. It is exposure to ideas, and not to their particular expression, that is vital if self-governing people are to make informed decisions.

There is, however, an inherent tension here. While the First Amendment disallows laws that abridge
the freedom of speech, the Constitution's Copyright Clause calls specifically for such a law. The First Amendment gets government o speakers' backs, while the Copyright Act enables speakers to make money from speaking and thus encourages them to enter the public marketplace of ideas.
​
Whitesell, unfortunately entirely ignores these issues in discussing whether the political use of pop songs might constitute fair use, but balancing the conflict between copyright and free expression is precisely the purpose of the fair use doctrine, as recognized in In SunTrust Bank v Houghton Miin Co., 268 F.3d 1257, 60 U.S.P.Q. 2d 1225, 14 F.L.W. Fed. C, 1391 (2001, 11th Cir.), rehearing denied en ban, 275 F3d 58 (11th Cir. 2001). In Sun Trust, the owners of the copyright to Gone With the Wind sued the publisher that owned the rights to The Wind Done Gone, a critique of the depiction of slavery and the Civil-War era American South and that used and drew upon the characters and story line from Gone with the Wind. The court ordered the lawsuit dismissed because The Wind Done Gone's use of the characters and story line from Gone with the Wind constituted fair use. In doing so, the court made clear that "First Amendment privileges are . . . preserved through the doctrine of fair use" and that to hold otherwise would jeopardize "over 200 years" of the constitutional "guarantee that new ideas, or new expressions of old ideas, would be accessible to the public."
​
Political speech, of course, is at the heart of the First Amendment protection of free speech. It should be no surprise, therefore, that Whitesell cannot point to one single court decision that has ever ruled the political use of a pop song to be illegal. In fact, in the only case I am aware of that is remotely similar to the situations in which, as Whitesell points out, pop artists sent cease and desist letters, is Master Card Int'l Inc. v. Nader 2000 Campaign Committee, 00 Civ. 6068 (GBD) (S.D.N.Y. 2004). In that case, the court granted the motion for summary judgment filed by the defendant, Ralph Nader's 2000 Presidential Campaign Committee, and dismissed plaintiff Mastercard's lawsuit, which alleged, among other things, that a Nader campaign advertisement that borrowed heavily from Mastercard's "priceless moments" television ads infringed on Mastercard's copyright. 
Are some of the political uses of pop songs non-infringing? I honestly don't know. I do know it's a question that is unresolved. I know too that, as Dan Kennedy puts it here in connection with a situation Whitesell does not mention,
​​[T]here’s an argument to be made . . . that the ad should be considered fair use: it’s political speech, which traditionally receives the highest level of First Amendment protection; [and] it’s not taking a penny out of [the artist's] pockets, the most important element in the four-part fair-use balancing test . . . .
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Once you realize copyright does not give its owner the right to extract every last bit of economic value that inheres in the copyrighted work, it's pretty obvious there's no good reason to stop the Google Library Project.

10/19/2015

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The United States Court of Appeals for the Second Circuit has affirmed the trial court's decision (pdf)  that the Google Library Project does not infringe the copyrights of the books it has copied and made available for electronic search. The decision is being described as a "powerful" one, and I think that's right. But I think too that attitudes have changed considerably since the Library Project was first announced in 2005. There is a growing understanding of copyright's limitations, of the fact that copyright is not a property right of the sort one has in personal or real property. And once you realize copyright does not give its owner the right to extract every last bit of economic value that inheres in the copyrighted work, it's pretty obvious there's no good reason to stop the Google Library Project. Set forth below are my sentiments to that effect back in 2008. Herb Mitgang, the first named plaintiff among the authors who claimed the Project infringed their copyrights, died in 2013.

What are you thinking, Herb Mitgang? August 7, 2008

The knee-jerk reaction some writers and other artists have to any unauthorized use of their copyrighted works often baes me. Artists often react viscerally to any unauthorized use of their creations even when doing so fails to serve, as far as I can tell, any legitimate personal interest they might have. It's as if they simply think: it's my property, and no one can touch it unless I tell them they can! The Association of American University Presses provides a useful summary of the Google Book Search Program:

​Many university and scholarly presses have participated enthusiastically in the Publisher program, which allows their print publications to be indexed and displayed to an appropriate extent through Google's beta online index of print materials while protecting their own, their authors' and third parties' rights. The Library program has proven controversial, as Google plans to scan, digitize, and copy not only public domain works from ve world-class research libraries, but also the in-copyright collections of at least some of those libraries. The libraries are the Bodleian at Oxford University, Harvard University Library, the University of Michigan Library, the New York Public Library, and Stanford University Library. 

​It is important to understand that Google is not merely copying the libraries' collections in order to make them available electronically to the world. Instead, Google Book Search allows its users to search the entire database of what Google has thus far scanned. For works by authors who have granted Google permission, a user of the Book Search can scan read the entire text. But for those who have not expressly provided that permission, a search through Book Search will turn up only books containing the searched terms along with snippets of approximately 3 lines around the searched terms. In short, Google Book Search is a boon to researchers, allowing them to locate books relevant to their research in libraries they could not possibly ever have visited. They then can obtain the books, either through inter-library loans or through online purchases. Without Google Book Search, in other words, myriads of profoundly useful books scattered around the world would remain utterly invisible to the vast majority of people with interest in them.

Which brings me to Herbert Mitgang. Mitgang is one of the named plaintis in the Authors Guild lawsuit seeking to shut down the Google Library Project. Mitgang was born in 1920, and since the 1950s he has been a prolic writer in numerous genres, from journalism to ction to biography. Among his books are three on Abraham Lincoln. Mitgang, however, is hardly a household name. His books on Lincoln are still in print, but, despite my acquaintaince with several amateur Lincoln-obsessed readers, none of them have read any of Mit- gang's Lincoln books. Mitgang is 87 years old. It seems quite likely therefore that, within a decade or so, the only feasible way Lincoln researchers will be able to obtain his books will be from the collections being scanned by the Google Library project. In short, I cannot begin to imagine why Mitgang wants to shut down the Google Library Project. Without it, his books will likely fade into oblivion. On the other hand, if the Google Library Project is a success, there is every possibility that future Lincoln researchers might come across and use Mitgang's Lincoln books. I wish I could get in a room and ask him: Why are you doing this? Do you really want your life's work to disappear entirely from the sight of future researchers? 

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The good poet steals and makes what he steals something different.

10/2/2015

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From Austin Kleon
 "One of the surest of tests is the way in which a poet borrows. Immature poets imitate; mature poets steal; bad poets deface what they take, and good poets make it into something better, or at least something different. The good poet welds his theft into a whole of feeling which is unique, utterly different from that from which it was torn; the bad poet throws it into something which has no cohesion. A good poet will usually borrow from authors remote in time, or alien in language, or diverse in interest." 

--T.S. Eliot, “The Sacred Wood.”
​This is one of the quotes that opens Steal Like An Artist, and I go back to it occassionally to remember that Eliot had it all laid out almost 100 years ago. It’s actually quite different than the “good artists copy, great artists steal” quote that is usually (mis)attributed to Picasso. What Eliot is talking about is transformation — not just taking things out of context, but re-contextualizing them. (Godard put it, “It’s not where you take things from — it’s where you take them to.”) Actually, as Eliot points out, it does matter where you take things from — a good poet borrows from poems “remote in time, or alien in language, or diverse in interest.” So: steal from the past, steal from another language or culture, or steal from someone who’s writing about another subject. 
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Sometimes I get things right: Lenz v. Universal Music Group

9/28/2015

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Sometimes I get things right. And sometimes, of course, I get them wrong. But I'm happy when I get them right, and I like to remind people that once in a while I am. Back on August 27, 2008, I wrote the following about the lower court's decision in Lenz v. Universal Music Group, which, recently, the U.S. Court of Appeals for the Ninth Circuit essentially affirmed (pdf) and is being commented upon in terms remarkably similar to those I used 7 years ago, though I have not among the commentaries I have read seen much emphasis on the real problem the decision addresses--copyright overclaiming:

The uses and abuses of the differences between the law on the books and the law in action (with a particular emphasis on copyright overclaiming) (2008-08-27 00:17)(original links omitted)

It's pretty obvious law and behavior often diverge. In some cases, that divergence arises from ambiguity
and the realities of human relationships. How do you respond when a valued customer arguably breaches his contract with your client? Quite possibly, if not likely, your client will be better served by ignoring the breach of the written obligation and keeping the customer satisfied. As Charles L. Knapp, Nathan M. Crystal, and Harry G. Prince write in the preface to the casebook I use in my Contracts course:
​[I]n real life there is likely to be not just one answer to a clients problem but a whole range of possible answers, some of which are clearly wrong, but many of which are at least plausibly right, in varying degrees. Living with ambivalence and uncertainty is not always pleasant, but the ability to do so is surely a more necessary lawyering skill than mastering the niceties of citation form.
​Some lawyers and clients, however, abuse this gap between law and behavior. I am not referring to
the everyday, harmless disregard of the "rules." How often do you strictly obey the speed limit? But, as Judge Richard Posner writes, this "dichotomy long noted by legal thinkers between the law on the books and the law in action" is a particular problem in copyright law. Often the mere threat of an infringement
action can extract money from someone using copyrighted material in a legitimate way. The problem, of
course is exacerbated considerably because the copyrights to so much of our media are owned by corpo-
rate conglomerates. Who is going to ght Disney, even if he's right? Another problem is the widespread
ignorance in the media about copyright. As Posner writes:
​The result is a systematic overclaiming of copyright, resulting in a misunderstanding of copyright's breadth. Look at the copyright page in virtually any book, or the copyright notice at the beginning of a DVD or VHS recording. The notice will almost always state that no part of the work can be reproduced without the publisher's (or movie studio's) permission. This is a denial of fair use. The reader or viewer who thumbs his nose at the copyright notice risks receiving a threatening letter from the copyright owner. He doesn't know whether he will be sued, and because the fair use doctrine is vague, he may not be altogether confident about the outcome of the suit. The would-be fair user is likely to be an author, movie director, etc. and he will find that his publisher or studio is a strict copyright policeman. That is, since a publisher worries about expansive fair uses of the books he publishes, he doesn't want to encourage such uses by permitting his own authors to copy from other publishers' works. So you have a whole "law in action" law invented by publishers, including ridiculous rules such as that any quotation of more than two lines of a poem requires a copyright license.
Universal Music recently was, at least for the moment, slapped down in a particularly absurd instance of
copyright overclaiming. Universal sought to remove Stephanie Lenz's 29 second video of her son dancing
to Prince's "Let's Go Crazy" from YouTube via a takedown notice under the Digital Millennium Copyright Act (the "DMCA"). Lenz in turn sued Universal on the grounds that in sending the takedown notice Universal knowingly misrepresented that Lenz's video was infringing. Remarkably, Universal argued that a copyright holder need not consider whether the use of copyrighted material is legitimate fair use before sending a takedown notice. The DMCA provides, however, that a copyright owner can send a takedown notice only if he has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law. If use of copyrighted material constitutes fair use, it is "authorized by the law." And there is no question that determining fair use can be a difficult and complicated determination. But not in not in Stephanie Lenz's case. Thus, it should be no surprise that U.S. Federal District Court Judge Jeremy Fogel rejected Universal's argument that, before sending a takedown notice to YouTube, it did not need to even consider whether the presence of Prince's "Let's Go Crazy" in the video was a fair use . Accordingly, the judge refused to grant Universal's motion to dismiss Lenz's case. In his decision [in 2008] Judge Fogel wrote:
An allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sucient to state a misrepresentation claim pursuant to . . . the DMCA. Such an interpretation of the DMCA furthers both the purposes of the DMCA itself and copyright law in general. In enacting the DMCA, Congress noted that the provisions in the bill balance the need for rapid response to potential infringement with the end-users [sic] legitimate interests in not having material removed without recourse.
​Not everyone has the guts of Stephanie Lenz. That's a problem. The Universals of this world have all the
money. Recently, the Electronic Frontier Foundation noted that another "federal judge denied copyright
infringement allegations from Universal . . . arming an eBay seller's right to resell promotional CDs
that he buys from secondhand stores."
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King v. Burwell explained well

6/25/2015

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Professor Paul Campos gives an excellent explanation of today's Supreme Court decision in King v. Burwell upholding the Obama administration's interpretation of the Affordable Health Care Act. I agree with him wholeheartedly--it was an easy case that, under normal political circumstances, would not have been brought in the first place and, even if it had been, would have been dismissed swiftly in a trial court and never again been disputed. I have to say too that Chief Justice Roberts wrote a terrific opinion (pdf), briefly (for a Supreme Court opinion) setting forth the reasoning and precedent supporting the correct outcome. Another good explanation here.
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When winning is losing

6/15/2015

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From any lawyer's perspective (and the clients on both sides of the actual lawsuit), having the court rule that you are "right" but award no damages or other relief is losing. 
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Fair Use and the Art of Lawyering (or Hats Off to David Admji)

4/15/2015

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PictureDavid Admji isn't the first person to parody Three's Company, but he may be the first who had to sue to establish the legitimacy of doing so.
The decision finding that the play 3C is a non-infringing fair use of the 70's sitcom Three's Company is more interesting to me from a lawyering standpoint than it is as a decision on fair use (with respect to which, I think, the outcome was fairly obvious). 

What is striking to me is that the playwright, David Admji, brought the lawsuit as a declaratory judgment action against DLT Entertainment Ltd., the owner of the copyright in Three's Company. Typically, I would not advise a client to instigate litigation to resolve whether a work is non-infringing. The fact that DLT Entertainment had sent a "cease and desist letter" to Adjani and that the lawyers for DLT continued, in subsequent correspondence to insist that 3C infringed the copyright in the sitcom would not typically change the content of my advice. A cease and desist letter has no force in and of itself: all it does is declare the copyright holder's belief that a work infringes a copyright and his threat to enforce that belief by means of a lawsuit if the alleged infringer doesn't stop what he is doing. The threat, however, is often an empty one. Even if the threat is genuine, however, the recipient of the cease-and-desist letter gains little, if anything, by initiating a lawsuit rather than continuing what he is doing and waiting to see whether in fact the copyright holder will sue. In short, it's the same as far as the alleged infringer is concerned if he's the plaintiff in a lawsuit in which he is asking a court to rule that his work is non-infringing or he's a defendant in a lawsuit brought by a copyright holder seeking a court order that his work is infringing. Given that the threat of a lawsuit often is often just so much posturing, there's nothing to be gained and plenty to be lost (if only attorney's fees) by initiating the lawsuit.

The mistake of overreacting to a cease-and-desist letter is, I think, at the heart of the never-resolved lawsuit between Shepard Fairey and the Associated Press over Fairey's Obama Hope poster. Fairey had displayed the poster and, as a result, received a cease-and-desist letter from AP. In response, he sued AP in the United States District Court for the Southern District of New York. There was no real reason for Fairey to sue, however. AP might never have brought the lawsuit; moreover, if it did, Fairey would be in no worse a situation as a defendant than as a plaintiff. The case eventually settled after more controversy than it ever deserved, primarily because of Fairey's destruction of digital evidence in his possession that would have made identification of the photo on which he had based the poster's image easy (a move that was stupid but really of no great significance vis-a-vis the fair use question). The terms of the settlement have never been disclosed, so the cost to Fairey of having brought the lawsuit is unclear; nevertheless, there was, at one point, the real possibility that no lawsuit would have ever been brought, a possibility Fairey himself foreclosed by initiating formal legal proceedings. 

Adjmi, however, was in a different position than Fairey in a significant respect. As Judge Preska stated in the first paragraph of her opinion, Adjmi wants to publish 3C and license others to use material from it and "therefore brings this action seeking a declaration that 3C does not infringe DLT's copyright in Three's Company." In other words, no one would publish Adjmi's play or agree to pay money for a license to use material from it without Adjmi first being able to guarantee to them that 3C did not infringe DLT's copyright. I have to hand it to Adjmi and/or his lawyers--bringing the lawsuit must have cost a pretty penny. In fact, the cost of obtaining such a legal guarantee (available only via a lawsuit or consent by the copyright holder) would block most people from even trying to get it; had Adjmi been like most people, the result would have been that he would never be able to publish or license his work. That, precisely, is what the problem is with copyright overclaiming. 

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So we own and owe what we know.

4/2/2015

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from "The Invention of Influence," by Peter Cole

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Freud could never be certain, he said,
in view of   his wide and early reading,
whether what seemed like a new creation
might not be the work instead
of   hidden channels of memory leading
back to the notions of others absorbed,
coming now anew into form
he’d almost known within him was growing.
He called it (the ghost of a) cryptomnesia.
So we own and owe what we know.


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You can satirize "Three's Company." I still think you can satirize "Catcher in the Rye" as well, though we may never know for sure. 

4/2/2015

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The United States District Court for the Southern District of New York ruled on Tuesday that the Off Broadway play “3C,” a reimagining of the TV hit “Three’s Company,” did not infringe the copyright of the decades-old sitcom. As the New York Times reported: "In an exhaustive 56-page ruling, Judge Preska decided that though the play appropriated a substantial amount of material from 'Three’s Company,' it was also a 'highly transformative parody of the television series” and represented a significant enough departure to pose “little risk to the market for the original.'”

I have yet to read the opinion, but my initial reaction is that the decision makes perfect sense: works playing off of known earlier works have been part of literature for as long as literature has existed. I also wonder whether the significance of the Southern District's initial decision, by Judge Deborah Batts, to preliminarily enjoin the publication of 60 Years Later: Coming Through the Rye has been even further eroded by Judge Preska's decision. Judge Batts' decision, which was not a final order but instead preliminarily enjoined publication of 60 Years Later, exists in limbo anyway, given that it was reversed on appeal for the failure by Judge Batts to make any finding or cite any evidence that 60 Years Later threatened "irreparable harm" to Catcher in the Rye. 

Set forth below is the post I wrote on July 9, 2009 strongly taking issue with Judge Batts' decision in the Catcher in the Rye case. Interestingly, it is not the only time I have found Judge Batts' grasp of the intersection between copyright and art lacking. The United States Court of Appeals for the Second Circuit last year reversed her decision finding that that Richard Prince had infringed Patrick Cariou's photographs of Rastafarians in creating works that consisted of painting (to various degrees) over reproductions of those photographs. I wrote about Cariou v. Prince extensively at the time of the trial before Judge Batts and, subsequently, here.

How good a literary critic was the judge in the Catcher in the Rye case? (July 7, 2009)

Will the judge's decision that 60 Years Later: Coming Through the Rye infringes J.D. Salinger's copyright in 
Catcher in the Rye stand up on appeal? In essence, the decision turns on whether Coming through the Rye is a commentary and criticism of Catcher in the Rye or, instead, an eff ort to cash in on the copyrighted character of 
Holden Caulfi eld. In other words, does Coming through the Rye stand on its own as an original work? I can't tell 
for sure without reading it myself, of course. Nevertheless, there are problems in the judge's decision that cast 
it, in my mind, in some doubt.

Most troubling is the judge's conclusion that Coming through the Rye cannot be deemed to comment
on the original because Holden in the former (at age 16) is identical to Holden in the latter (at age 76.) 
The judge stated: "First, Colting's assertion that his purpose in writing was to critically examin[e] the character Holden,
and his presentation in Catcher [in the Rye] as an authentic and admirable (maybe even heroic gure is problematic
and lacking in credibility. To support that point, the judge refers to the sworn declaration
submitted by Martha Woodmansee on behalf of Colting,
quoting Woodmansee's statement that "[r]eaders 
familiar with [Catcher in the Rye] will anticipate the same laconic observations and reactions they associate 
with Holden Caul eld. What do they get from the 76 year old C [as the Caulfield character is called in 
60 Years on]? They get much the same kinds of observations and reactions, but coming from a 76 year old and applied to a world much changed in the 60 intervening years, such observations and reactions fall flat. They reveal a character whose development was arrested at 16, who instead of growing up could only grow old." 

The judge also quotes Woodmansee's statement that t"he observations and reactions of Mr. C evoke [in style and content] vintage Holden Caul eld, and coming from a 16 year old, they seemed honest and endearing. Coming
from the 76 year old C, however, they seem pathetic."

In short, the judge concluded that Coming through the Rye was not a parody of Catcher in the Rye
because Holden in the new work was merely a copy, not an original character. She stated that it is hardly
a parody to merely put the same character in a new situation: It is hardly parodic to repeat that same
exercise in contrast, just because society and the characters have aged.

That is odd reasoning. One of the principal criticisms of Catcher in the Rye since its publication is
that Holden did not develop at all emotionally or intellectually through the course of the book's story.
"John Aldrige wrote that in the end, Holden remains what he was in the beginning  [cynical, de fiant,
and blind. As for the reader, there is identi cation but no insight, a sense of 'pathos but not tragedy.'
This may be Salinger's intent, as Holden's world does not possess sucient humanity to make the search
for humanity dramatically feasible." In other words, by depicting a 76 year old Holden who is no diff erent
than Salinger's 16 year old Holden, one might conclude that the author was parodying the self-absorbed,
dense, and unreflective 16 year old (as well as the author, who contributed nothing to the creative
life of the society from which had done everything to withdraw after 1964). 

Indeed, Woodmansee submitted a declaration as a literary expert and in it takes the same characterization of the "young" and the "old" Holden the judge seizes upon and sees it precisely as parody. Her testimony is that "Mr. C" in Coming through the Rye is "a character whose development was arrested at 16, who instead of growing up only grows old. This is a devastating critique of Holden Caul eld in particular, of [Catcher in the Rye] generally, and of its author J.D. Salinger, whoseapparent inability to develop his hero reveals him to be burned out." (emphasis added)
Is Coming through the Rye fair use.? I think on appeal it might well be found to be . It's interest-
ing that we make our judges literary critics in these cases. Why do I doubt the judge's crtiticism?
Because it seems to simplistic and because, knowing Martha Woodmansee personally, I feel far more
con dent in her abilities as a literary critic than I do in the judge's.
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    Peter Friedman is a lawyer, artist representative, speaker & writer who's written for years on the impact of law on creative endeavors and law itself as a creative endeavor. From 2008-2012, he wrote Ruling Imagination: Law & Creativity, selections of which are republished here and the entire archive of which is available from the Internet Archive's Wayback Machine here and in pdf format here. In addition, he has written about copyright and fair use at What is Fair Use?

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