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    The Briefing by Weintraub Tobin

    In The Briefing by Weintraub Tobin, intellectual property attorney Scott Hervey and his guests discuss current IP issues related to trademark, copyright, and entertainment, as well as IP litigation and intellectual property in the news.

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    Latest Episodes:
    Brandy Melville Doubles Down Against Redbubble May 10, 2024
    Show notes

    Brandy Melville Doubles Down Against RedbubbleThe ongoing dispute between Brandy Melville and Redbubble over trademark and copyright infringement continues. Despite previous setbacks, Brandy Melville has filed a new lawsuit against Redbubble, alleging the sale of counterfeit products and copyright infringement. Scott Hervey and Jamie Lincenberg from Weintraub Tobin explore the history of the dispute, the claims made in the new complaint, and potential legal strategies moving forward.

    Get the full episode on the Weintraub YouTube channel here or listen to this podcast episode here.

    Show Notes:

    Scott We have covered Brandy Melville’s dispute with Redbubble, including the Ninth Circuit’s refusal to hold Redbubble liable for contributory copyright infringement because Redbubble didn’t know or have reason to know of specific incidents of infringement by its users and the Supreme Court’s refusal to take on Brandy Melville’s certiorari petition. Despite these significant setbacks, Brandy Melville seems determined to hold Redbubble accountable and has filed a new lawsuit against Redbubble. I’m Scott Hervey from Weintraub Tobin, and today I’m joined by Weintraub lawyer Jamie Lincenberg to talk about this update in the Brandy Melville Redbubble Dispute on this installment of “The Briefing” by Weintraub Tobin. Jamie, welcome back to the briefing.

    Jamie Thanks, Scott. I’m glad to be here and happy we can jump into this Brandy Melville Redbubble case again.

    Scott This is our third conversation about Brandy Melville Redbubble, and I have the feeling that it will not be our last. Before we dive into this new complaint, can you take us back through the history of the Brandy Melville Redbubble dispute?

    Jamie Sure. The dispute began in 2018 when Brandy Melville, the popular clothing retailer, brought a trademark infringement suit against Redbubble, an online marketplace that allows independent artists to upload their own designs for on-demand printing on various items of merchandise. Brandy Melville had found products on Redbubble’s website that infringed the company’s trademarks. Initially, the District Court had found Redbubble liable for both willful contributory counterfeiting of the marks and contributory infringement of the marks. Then, on appeal, the Ninth Circuit Appellate Panel overturned much of the lower Court’s findings.

    Scott And then, as we know, the Supreme Court denied certiorari to Brandy Melville’s petition, thus letting stand the Ninth Circuit’s holding. So here we are again. Brandy Melville filed a new complaint against Redbubble on March 29, 2024, which alleges that Redbubble is advertising, creating, and selling counterfeit Brandy Melville products, which incorporate exact replicas of the Registered Chilled Since trademark and Radio Silence trademark. They’ve added a couple of new causes of action that we’ll talk about, such as a claim that these products infringe and include exact because of the Registered Comic Eyes copyrighted design.

    Jamie The trademark claims made in this new complaint are mostly the same as the trademark claims Brandy Melville made in its case against Redbubble the first time around. So, Unless Brandy Melville alleges a failure to redress specific instances of infringement or infringers, it may seem the same result as the first case.

    Scott I agree. But it’s worth noting that This new complaint does seem to focus on this heightened standard imposed by the Ninth Circuit. Brandy Melville claims that Redbubble continued to sell counterfeit items bearing one or more of the exact same designs and brands even after Brandy Melville had previously reported them to Redbubble. Brandy Melville also contends that Redbubble has been, and continues to be aware of, and contributing to the infringement of its trademarks and that it creates and distributes the infringing and counterfeit goods to end consumers and facilitates financial transactions. Brandy Melville also includes as an alternative basis for its contributory trademark infringement that Redbubble has remained woefully blind to the infringement and/or counterfeiting of the Brandy Melville trademarks.

    Jamie Yeah, and the complaint also alleges direct copyright infringement and contributory copyright infringement claims against Redbubble. These claims weren’t raised in the first lawsuit.

    Scott That’s right. In copyright law, direct infringement occurs when a third party reproduces, distributes, displays, or performs a copyrighted work or prepares a derivative work based on a copyrighted work, all without authorization from the copyright owner. In support of its direct copyright infringement claim, Brandy Melville contends that Redbubble infringed Brandy Melville’s copyrighted works by displaying, distributing, and selling products bearing Brandy Melville’s copyright without their permission.

    Jamie Contributory infringement happens if a party, with knowledge of the infringing activity, induces, causes, or materially contributes to the infringing conduct of another. Material contribution can be found where the party is providing services to the infringer and has an ongoing relationship with the direct infringer. In support of its contributory copyright infringement claim, Brandy Melville argues Redbubble has been and continues to be aware of and contributing to the infringement of Brandy Melville’s copyright on its site. The infringing products are prominently displayed and promoted on Redbubble’s website. Redbubble’s website is configured so that a search for Brandy Melville or other Brandy Melville trade names will lead directly to those infringing goods. Redbubble creates and distributes the infringing goods to the end consumer and facilitates all financial transactions.

    Scott Yeah, that’s right. That’s what Brandy Melville alleges to be the case. Now, contributory copyright infringement would require actively encouraging or inducing infringement through specific acts or by distributing a product, distributees use to infringe copyright. If the product is not capable of substantial or commercially significant non-infringing uses.

    Jamie I am certain there is enough evidence that Redbubble’s platform has commercially significant non-infringing uses, so the hook for establishing contributory infringement would hinge on showing that Redbubble actively induces infringement through making its platform available to users.

    Scott Yeah, and it sounds like it’s going to be tough to prove.

    Jamie Redbubble will certainly argue that it’s immune from copyright infringement based on user material posted to its websites, based on Section 512 of the Copyright Act, which shields online service providers from monetary liability as long as service providers cooperate with copyright owners to remove that infringing content.

    Scott Right. Yeah. You’re talking about the safe harbor and notice and takedown provisions of the DMCA. Brandy Melville would have to show that Redbubble in order for Brandy Melville to get around Redbubble’s safe harbor rights under the DMCA, Brandy Melville would have to show that Redbubble failed to remove specific infringing content after notice. It will be interesting to see how both Redbubble and Brandy Melville deal with this. I am certain that Redbubble will file a motion to dismiss, so we’re going to see that in the near future.

    Jamie Scott, why do you think Brandy Melville didn’t raise the copyright claim in the It’s an earlier lawsuit?

    Scott So this is me just speculating. I would imagine that they considered the copyright claim and thought that it would probably be precluded by the safe hardware provisions of the DMCA. And at that point, they maybe didn’t have enough evidence that Redbubble was failing to take down infringing content once they were receiving notice. It’s interesting the arguments that Redbubble is making in the trademark part of their argument and the copyright part of their argument relating to Redbubble’s failing to address specific instances of infringement. What Brandy Melville seems to be arguing, as opposed to arguing about specific actors, they are arguing about specific material that is being infringed. When you read their complaint, they talk about specific trademarks that are being infringed, probably by a wide variety of different users on the Redbubble platform. It’s a different take on this argument about redressing specific instances of infringement. They’re saying that Redbubble failed to address specific instances of infringement of specific pieces of Brandy Melville IP, not fail to address specific instances of infringement by certain infringers. So, we’ll see how that one plays out. I think Brandy Melville is going to have a tough time with its copyright claim, though, against Redbubble.

    Jamie What do you think their strategy will be with the second lawsuit?

    Scott There’s a business purpose to lawsuit sometimes, right? And I am certain that there is a strategy behind Brandy Melville filing this second complaint against Redbubble. And as long as they have a good faith basis upon which to file a claim, I suspect that Brandy Melville will continue to file multiple causes of that, multiple claims against Redbubble. And I believe that there’s a strategy to… Because as long as Redbubble is making money off of the transactions, as long as Redbubble is making more money off the transactions, then it costs Redbubble to defend these claims. Redbubble has no business incentive to deal with this, essentially, right? But the minute it costs Redbubble more to defend the claims, they’re going to have to come up with a business solution. Now, one of the other things that Brandy Melville could do is Brandy Melville could go after the printers. The way that Redbubble works is a user uploads an image, somebody buys an item with that image on it, and the order is sent to a local manufacturer shop that prints whatever it is, the shirt, the cup, the whatever. They’re independent from Redbubble. Well, Brandy Melville could go after those printers. There may or there may not, be an indemnity provision in the printer’s contract with Brandy Melville. But if Brandy… Sorry, with Redbubble. With Redbubble, right? If Brandy Melville starts suing enough of those printers, pretty soon it’s going to be hard for Redbubble to find printers that will do work for them. And although it’s not a great PR look, and they’d have to really think hard about the correct defendant in this, the direct defendant But Brandy Melville, could sue the users as well. They could send a message, Find the right defendant so that there’s not a PR backlash against Brandy Melville. But they could find the right plaintiff, write the defendant, sorry, and really go after them because both the defendant and the defendant would be liable for direct trademark infringement and direct copyright infringement. There’s no DMCA safe harbor that they would be able to take advantage of, and going after the printers as well. If you take off the printer infrastructure and you create this fear amongst the users of being sued by Brand new Melville, it might then create a business rationale for Redbubble to deal with this.

    Jamie Yeah, that’s an interesting thought. I had not thought about the printer’s liability in all of this, but you’re right. That’s certainly an avenue that Brandy Melville could explore, although there’s much more to be considered with that in the same way that going after individual people that could cause some PR backlash if they’re going after local printers or things like that.

    Scott Yeah, I agree. You have to navigate the PR waters. All of a sudden go from being a victim to being the bully. But if they’re not getting results with the campaign of causing financial harm to Redbubble by constantly suing them, then they need to cut the legs out from under the chair in some other way.

    Jamie Right. Well, we’ll see where this second lawsuit gets them.

    Scott We certainly will. Absolutely. Thank you for listening to this episode of “The Briefing.” We hope you enjoyed this episode. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. If you have any questions about the topics we covered today, please leave us a comment.


    How “knockoff” Furniture Landed Kim Kardashian in an IP Lawsuit May 03, 2024
    Show notes

    How “knockoff” furniture landed Kim Kardashian in an IP lawsuitKim Kardashian faces a lawsuit from the Donald Judd Foundation for allegedly using and promoting knockoff furniture in her office tour video. While Kardashian’s counsel denies liability, the case underscores the importance of due diligence in endorsements. Scott Hervey and Jamie Lincenberg from Weintraub Tobin dissect the legal drama in this installment of “The Briefing.”

    Get the full episode on the Weintraub YouTube channel here or listen to this podcast episode here.

    Show Notes:

    Jamie Last week, the art world was buzzing with yet another dupe scandal. Kim Kardashian has been sued by the Donald Judd Foundation for using and promoting knockoffs of the late designer’s furniture. We will dive into the details of this case on today’s episode of “The Briefing.” I’m Jamie Lincenberg of Weintraub Tobin, and I’m joining my colleague, Scott Hervey, on today’s episode of “The Briefing.”

    Scott Thank you for joining me today, Jamie. Can you provide us with a recap of how this case came about?

    Jamie Of course. Yeah. In a lawsuit filed just two weeks ago on March 27th in California’s district Court, the foundation of artist Donald Judd, who passed in 1994, known famously for his minimalist designs, is suing reality television star and entrepreneur Kim Kardashian and the Los Angeles-based interior design firm, Clements Design, the company who’s been faulted for fabricating and selling allegedly infringing tables and chairs to Kardashian. The lawsuit asserts that the firm sold Kardashian fakes of Judd’s tables and chairs for the offices of Skin by Kim, which is Kardashian’s skincare company, and accuses Kardashian of false endorsement and Clements Design of trademark and copyright infringement, false advertising, and unfair competition.

    Scott So this dispute stems originally from a video Kardashian posted on her personal YouTube account. Where she gave a tour to her followers of the Los Angeles office of her skincare brand, Skin by Kim. It’s just a typical house tour, office tour-type video that influencers do. In this video, while showing a large communal kitchen and dining room, Kardashian said, “If you guys are furniture people, I’ve really gotten into furniture lately. These Donald Judd tables are really amazing, and they totally blend in with the seats.” As of late January of this year, the video had been viewed more than 3.6 million times, and this video was then subsequently removed from YouTube a few days after the lawsuit was filed.

    Jamie That’s right. So shortly after the video was posted, the Judd Foundation contacted Kim Kardashian and Clements Design, demanding that those furnishings in question be destroyed or recycled and that Kardashian issue a public statement. Kardashian ultimately declined to replace the furniture, retract the video, or issue a corrective statement. Her reps instead offered to update the caption information in the video and to create a separate social media post in which she would promote the Judd Foundation. The foundation rejected that as that would, of course, still allow the knockoff furniture to remain in the video online.

    Scott When the foundation learned that Clements Design, which is a well-known celebrity design firm, and apparently, they also custom-make furniture pieces. When they learned that Clements Design had made the knockoff furniture, it asked for an agreement that the design company would never make and sell fake Donald Judd furniture again and that it would return and recycle Kardashian’s furniture, according to the complaint. But the design company rejected both requests and denied the foundation’s rights to the furniture design.

    Jamie So, the foundation has now filed suit and is seeking injunctive relief, a retraction of the video by Kim Kardashian. Issuance of a corrective statement, recycling of the inauthentic furniture, and any profits that Kardashian and Clements’ design may have received from the purported misrepresentation of the tables and chairs in question, as genuine Judd works.

    Scott The foundation argues that consumers are likely to believe that the Judd Foundation and the Donald Judd brand are connected or affiliated with or otherwise sponsored or endorsed by Kardashian, which is particularly is misleading because the Judd Foundation categorically prohibits customers from using purchased Judd, Donald Judd furniture from marketing and promotional purposes.

    Jamie In an online statement, Rainer Judd, Judd’s daughter who leads and is the President of the foundation, says that the furniture in question is irrefutably fake and that the existence of inauthentic furniture undermines the integrity of Judd’s original work, which includes specifications of design, craftsmanship, and materials. In its argument, the foundation cites a design proposal, Clements Design created for Skin by Kim, that includes dining tables in the style of Donald Judd and dining chairs in the style of Donald Judd. The accompanying illustrations of the products being offered, as the lawsuit claims, are actually photos of authentic Judd furniture. His, and I might pronounce this wrong, La Mansana Table 22 and Chair 84, which are iconic pieces amongst furniture designers and collectors since they were first produced in 1982.

    Scott The lawyer for the foundation says that this case is about protecting the intellectual property rights of the Judd Foundation, including its trademark and copyrights. The fake furniture has the ability to cause massive consumer confusion, with millions of Kardashian followers being misled to believe that the furniture in Kardashian’s office is real Donald Judd furniture. The Judd Foundation claims that this undermines the foundation’s ability to control the quality of the works created using Judd’s iconic designs and the goodwill that exists in those creations.

    Jamie Kardashian’s outside counsel has denied any liability in this matter, and Clements Design has issued a statement that the foundation’s claims have absolutely no merit. We’ll need to keep up with the case to see where it goes. But in summary, I do think that this brings up a really important and relevant topic today, where in today’s world, copies and dupes and knockoffs, however you want to define it, seem to really be everywhere. These influencers and celebrities with massive audiences need to take responsibility for their actions. It’s a lesson to truly do your due diligence before maybe touting around the name of an artist or brand. When you’re not 100% sure that it’s the real thing. I do see this happen all the time. Scott, do you have any insights or takeaways from this as well?

    Scott Yeah. Look, we all know that in an endorsement situation, the endorser, so usually a celebrity or some influencer, has a truthfulness requirement under FTC guidelines. We did a whole podcast episode on that. They have an obligation to make sure that what they’re saying is truthful. Not only the endorser does, but the brand does as well. However, my understanding of this particular post is that it was editorial. This is not commercial speech. This was not an endorsement of Clements Design. At least, this is my understanding. I didn’t see any indication that this was a sponsor, that the office tour that Kim Kardashian did was a sponsored post that was sponsored by Clements Design. I’m going to go with my understanding that this is all editorial.

    Jamie Yeah, I think you’re probably right on that,

    Scott. And that’s probably why the foundation only brought that one cause of action against Kardashian, the false endorsement claim. Scott Right. I mean, they did bring a bunch of other claims against Clement’s designs, and we’ll see how that shakes out, it’ll be interesting. But we’re really just talking about the endorser liability, Kim Kardashian’s potential liability here. Look, if this were an advertisement or commercial speech if this were not editorial, but if Clements Design had paid her, then she may have liability under the false endorsement claim under the Lanham Act and maybe under other claims as well. But because this was not a paid-for speech, because this seems to be just purely editorial, I don’t think it meets the requirements of the claim under Section 1125A because it’s not used in connection with goods or services. I think that the Judd Foundation will have a tough time. I agree with you that endorsers have a huge obligation to make sure that when they are giving commercial speeches, they are giving paid endorsements and that what they’re saying is truthful because they have their own individual liability and issues dealing with the FTC. But in editorial, unless she knew that this was not true or unless I mean, I don’t know. I could see her saying that Kim Kardashian, she was under the mistaken belief that in the style of Donald Judd meant Donald Judd, that the two are interchangeable, that the style of Donald Judd is Donald Judd. I could see her taking that position and really having that understanding and not meaning to imply that these particular pieces of furniture were made by Donald Judd, which would be literally impossible because he’s dead. I guess we’ll see how this shakes out. As for your take on endorser liability and endorser responsibility, I agree, but I don’t think that Kim Kardashian truly faces any liability here.

    Jamie Right. Well, I do wonder why her camp didn’t just take the video down. What was the harm? I think about when the foundation first approached them and said, “This is not true Donald Judd furniture, and you are posing as if it was; please take this video down.” I don’t know. I don’t know why, but I guess the tour of the office was very important.

    Scott Well, I think the Judd Foundation was asking for a lot more than that in their initial letters. Weren’t they asking her to destroy the furniture? It’s like, No. I mean, even though it’s not designed by, I mean, made by Donald Judd, it’s still custom-made furniture. It’s still beautiful, and I’m sure it was very, very, very expensive. Unless the foundation is going to pony up the money for Kim Kardashian to buy new furniture, I mean, it would be fiscally irresponsible for her to destroy that furniture.

    Jamie I don’t know. I don’t think she needs anybody’s money at this point. Scott Well, I mean, and by the way, I don’t think any judge would require the destruction of that furniture. We’ll see. We’ll see. Hey, thanks for bringing this case to our attention; it was quite interesting. We’ll follow it as it goes on. Jamie We will.

    Scott Thank you for listening to this episode of “The Briefing.” We hope you enjoyed this episode. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. If you have any questions about the topics we covered today, please leave us a comment.


    Authors Get Mixed Results with Initial Skirmish in OpenAI Lawsuit Apr 26, 2024
    Show notes

    Authors Get Mixed Results with Initial Skirmish in OpenAI Lawsuit (1)Delve into the complexities of vicarious infringement and DMCA violations in AI training. Scott Hervey and James Kachmar from Weintraub Tobin dissect the recent district court ruling on OpenAI’s copyright infringement allegations on this installment of “The Briefing.” Watch this episode on the

    Weintraub YouTube channel here or listen to this podcast episode here.

    Show Notes:

    Scott As we have previously reported, in 2023, several authors, including the comedian Sarah Silverman, filed putative class action lawsuits against OpenAI’s ChatGPT, alleging various copyright infringement claims. On February 12th, 2024, a district court in the Northern District of California issued its order and ruled on the OpenAI defendants’ motion to dismiss various claims in the two pending putative class action lawsuits. I’m Scott Hervey from Weintraub Tobin, and I’m joined today by my partner, James Kachmar, and we’re going to discuss the Court’s order on this installment of “The Briefing by Weintraub Tobin. James, welcome back to “The Briefing.”

    James Thanks, Scott. It’s good to be back.

    Scott So, James, could you give us some background on these cases?

    James Sure, Scott. The author plaintiffs alleged that OpenAI infringed on their published works by using these works to help train its Large Language Model or LLM. Basically, OpenAI is alleged to have scanned the books into their system to help train the language models. The authors claim that because these books are protected by copyright law, using them in this training and the output generated by OpenAI, which the app is known ChatGPT, by summarizing their books, constituted an infringement of their copyright protections in their works. The plaintiffs in the two separate lawsuits alleged similar claims against OpenAI for both direct and vicarious copyright infringement under the Copyright Act, as well as violation of Section 1202(b) of the Digital Millennium Copyright Act or DMCA, which is removal of copyright management information. The OpenAI defendants moved to dismiss all the claims alleged by the author plaintiffs, with the exception of the first cause of action for direct copyright infringement. It’s a bit unclear from the Court’s order as to why the defendants did not move to dismiss that claim as well.

    Scott Yeah, I found that to be interesting. The Court began by recognizing the general rules that govern motions to dismiss in federal actions. In essence, to survive such a motion, a plaintiff must plead enough facts to state a claim to relief that is plausible on its face. In essence, the plaintiff must allege sufficient factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged.

    James That’s correct, Scott. Let’s first look at the vicarious copyright infringement claim. The Court noted that the Copyright Act grants the copyright holder exclusive rights to reproduce the copyrighted work and any copies thereof, to prepare derivative works, and distribute copies of the copyrighted work to the public. However, the Court noted that the mere fact that a work is copyrighted does not mean that every element of the work may be protected.

    Scott That’s right. To allege a valid copyright infringement claim, the plaintiff must show that one, he or she owns a valid copyright in the work alleged to be infringed, and two, that the defendant copied aspects of protectable aspects of his or her work.

    James That’s right, Scott. The Court was really focused on this second prong, which really contains two separate components: copying and unlawful appropriation of a copyrighted work. Generally, a plaintiff can satisfy these elements by showing that the defendant had access to the plaintiff’s work and that the two works share similarities probative of copying, while the hallmark of unlawful appropriation is that the work shares substantial similarities.

    Scott The Court noted that a claim of vicarious infringement requires a threshold showing of direct infringement.

    James Right. The OpenAI defendants sought to dismiss the vicarious infringement claim on the grounds that, number one, the plaintiffs did not allege direct infringement occurred. Two, that there was allegation that the OpenAI defendants had the right and ability to supervise. Three, there was no allegation that the OpenAI defendants had a direct financial interest. For the Court’s order, it’s really that first element that it focused on in its order.

    Scott Ok. The author plaintiffs argued that because the defendants directly copied the copyrighted books to train the language models, they did not need to show a substantial similarity between the two works.

    James That’s right. They were relying on a 2012 Ninth Circuit case, Range Road Music, Inc., Versus East Coast Foods. That really involved a cover band playing songs in a venue and copying other musicians’ music that had been copyrighted. The Court here said that the plaintiffs were apparently misunderstanding the holding in Range Road because the Court there excused them, the plaintiffs in that case, from having to show substantial similarity because it was the actual songs that were being played in the venue. The Court noted here that the author plaintiffs had not alleged that ChatGPT outputs contained direct copies of the copyrighted books. Therefore, the plaintiffs really had to allege that there was a substantial similarity between the outputs of ChatGPT and the copyrighted materials. For example, if ChatGPT was asked, “Can you read me Chapter 2 of Sarah Silverman’s book?” That may have been evidence of direct infringement, but here, it was more summarizing what the themes or meaning of the books were. The Court decided to give them leave to file an amended complaint to try to correct this to just satisfy the substantial similarity element.

    Scott That’d be interesting if they do, in fact, amend the complaint, and then the Court rehears, we’ll It probably will be another motion to dismiss. If it really is about summarizing themes and concepts, there’ll be an entire argument over whether or not those in and of themselves are protectable under the Copyright Act. Let’s talk about the DMCA claim because this is an interesting one. The DMCA is part of the US copyright law, and it was added in 1999. The DMCA stands for, as you said previously, the Digital Millennium Copyright Act. The DMCA was meant to address the relationship between the copyright and the internet in 1999. There are three main parts of the DMCA. It is when establishing protections for online service providers in certain situations if their users engage in copyright infringement, including by creating the notice and takedown system, which allows for copyright owners to send a notice to an online service provider about infringing material and instructing that service provider to take down that infringing material. Encouraging copyright owners to give greater access to their works in digital formats by providing them with legal protections against unauthorized access to their works, for example, hacking passwords or circumventing encryption technologies. And three, making it unlawful to provide false copyright management information. For example, the names of authors, the names of authors and copyright owners, and the titles of work, or to remove or alter that type of information in certain circumstances. Now, here, the plaintiffs alleged the violation of the provisions of the DMCA dealing with copyright management information and the removal thereof. So, James, how did the Court treat this claim?

    James Well, Scott, the Court recognized that one of the essential elements in stating a claim under this portion of the DMCA is alleging what CMI was removed or altered. Then, you must show the requisite mental state, showing that you know or have reasonable grounds to know that removing the CMI would enable, induce fa, facilitate, or conceal infringement.

    Scott Yeah, and the plaintiffs allege that OpenAI defendants had, by design, removed CMI from the plaintiff’s copyrighted books during this large language model training process. But this wasn’t enough for the Court, was it?

    James No. The problem the Court found was that in the allegations in the, there was nothing specific to support the claim that the CMI had been intentionally removed. In fact, in the complaint, they cited some of the summaries produced by ChatGPT, which referred to the plaintiffs by name, basically identifying the author of the work. The Court said that even if the plaintiffs could show that the OpenAI defendants had knowingly removed CMI during the training process, they had not alleged how admitting CMI and the copies used in the training gave defendants reasonable grounds to know that ChatGPT’s output would induce, enable, facilitate, or conceal infringement, especially since it was identifying the authors by name.

    Scott Yeah. The plaintiff presented another unique argument to the Court that OpenAI’s refusal to state which books it was using to train its models would deprive ChatGPT users from knowing if any output is infringing.

    James Right, and it’s an interesting claim and position, but what the Court said is there’s no legal authority out there. Plaintiffs did not cite any in opposing the motion to dismiss to support that theory of violation.

    Scott Are we expecting an amended complaint here, James?

    James Yes. I would assume that the plaintiffs will not give up this easily and will try to amend, especially since their first cause of action is still technically viable.

    Scott Yeah. If they do file an amended complaint, you can be almost certain that OpenAI will again move to dismiss the claims, and they probably will raise some preemption issues and other state law claims. We definitely have not seen the last of this specific case or AI training cases in general. James, thanks for bringing this one to our attention.

    James Thank you for listening to this episode of “The Briefing.” We hope you enjoyed the episode. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. If you have any questions about the topics we covered today, please feel free to leave us a comment. Thanks, Scott.


    Tennessee’s ELVIS Act Isn’t What You Think Apr 19, 2024
    Show notes

    Tennessee’s ELVIS Act Isn’t What You ThinkELVIS Act —Breaking down the Ensuring Likeness, Voice, and the Image Security Act of 2024. Scott Hervey and James Kachmar from Weintraub Tobin discuss its impact on AI audio technology and how it protects musicians in the next installment of “The Briefing.”

    Watch this episode on the Weintraub YouTube channel here or listen to this podcast episode here.

    Show Notes:

    Scott: Tennessee’s ELVIS Act isn’t what you think. The acronym stands for Ensuring Likeness, Voice, and the Image Security Act of 2024. It’s about protecting a musician’s voice from AI clones. The bill was signed into law on March 21st, 2024, amid a growing concern by the music industry and musicians over AI soundalikes and deep fakes. I’m Scott Hervey from Weintraub Tobin, and I’m joined again by my partner, James Kachmar, to talk about this bill and its impact on the nascent AI audio space in this episode of “The Briefing” by Weintraub Tobin. James, welcome back to “The Briefing.”

    James: Thanks, Scott.

    Scott: So, James, let’s dive right into this bill and see what it does and doesn’t do. So, this bill amends Tennessee’s existing right of publicity statutes. Tennessee’s existing law has previously provided that individuals, or in the case of a deceased individual, their estate, have a proprietary right in the use of that person’s name, photograph, or likeness in any medium, in any manner. Now, one could probably have argued that likeness included voice, but this bill now makes it clear that a person’s voice is among the personal property rights this statute now protects. James: Right, Scott. And in the bill, voice is defined as a sound in a medium that is readily identifiable and attributable to a particular individual, regardless of whether the sound contains the actual voice or a simulation of the voice of the individual. So essentially, a soundalike.

    Scott: That’s right. So, let’s talk about what this bill protects against. Tennessee’s right of publicity statute now protects against the use of a person’s name, photograph, voice, or likeness for the purpose of advertising products, merchandise, goods or services, or for the purposes of fundraising, solicitation of donations, purchases of products, merchandise, goods, or services. The bill also adds new language which provides that a person will be civilly liable If they publish, perform, distribute, transmit, or otherwise make available to the public an individual’s voice or likeness with knowledge that the use of the voice or likeness was not authorized by the individual.

    James: So, Scott, I assume that this bill is going to put a target on AI voice companies for possible lawsuits?

    Scott: Yeah, it does. It absolutely does. The bill provides for civil liability for any person that distributes, transmits, or otherwise makes available an algorithm, software tool, or other technology, service, or device, the primary purpose or function of which is the production of an individual’s photograph, voice or likeness without authorization from the individual.

    James: Scott, do I understand the bill correctly that not only the individual performer will have a cause of action, but it also gives record labels a right to sue for violations?

    Scott: Yeah, absolutely. That’s right. The bill adds a paragraph to the section that discusses remedies for violations of the section. This new paragraph states that well where a person has entered into a contract for an individual’s exclusive personal services as a recording artist or an exclusive license to distribute sound recordings that capture an individual’s audio performances, an action to enforce the rights set forth, and this part may be brought by the person or individual. So, in other words, record labels.

    James: I’m sure there’s a lot of them in Nashville, Tennessee. Scott, even though the statute does not appear to be limited to commercial advertising, previous federal court decisions have limited its scope to the advertising or promotional context. And have excluded performances, sports broadcasts, websites, and creative works from its reach. The new language from this bill seems to also target creative works, such as the fake Drake AI song, and other AI soundalike recordings.

    James: I agree with you, and I think that this may be problematic.

    Scott: In what way?

    James: Well, if an artist or a recording label attempts to sue under the statute for an AI soundalike recording that is a creative work, such as the AI Johnny Cash cover of Barbie Girl, well, I think that may run afoul of Section 114B of the Copyright Act. Now, Section 114B permits soundalikes. A publication by the US Copyright Office specifically says that, quote, Under US copyright law, the exclusive rights and sound recordings do not extend to making independently recorded soundalike recordings. If that isn’t clear enough, the notes to Section 114 by the House Judiciary Committee provide as follows quote: Section B of Section 114 makes clear that statutory protection for sound recordings extends only to the particular sounds of which the recording consists and would not prevent a separate recording of another performance in which those sounds are imitated. Mere imitation of a recorded performance would not constitute a copyright infringement, even where one performer deliberately sets out to simulate another’s performance as exactly as possible, end quote.

    Scott: So, when the inevitable lawsuits start to get filed as a result of this new law, do you think a potential defendant has a good preemption argument?

    James: I do think they have a good preemption argument.

    Scott: I guess we’ll just have to wait and see and assume we won’t have to wait too long for that.

    James: I conclude James, that you’re correct in that. Thank you for listening to this episode of “The Briefing.” We hope you enjoyed this episode. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. If you have any questions about the topics we covered today, please leave us a comment.


    Navigating the Legal Risks for Brands in Social Media Marketing – Part 2 Apr 12, 2024
    Show notes

    Safeguard your brand in the world of social media marketing, from IP infringement risks to FTC guidelines compliance. Scott Hervey and Jessica Marlow from Weintraub Tobin continue the discussion on legal risks brands face in part 2 of our social media marketing series on “The Briefing.”

    Make sure to catch Navigating the Legal Risks for Brands in Social Media Marketing – Part 1.

    Watch this episode on the YouTube channel here

    Show Notes:

    Scott:
    Brands spend a lot of money on social media marketing, and that amount continues to grow. According to a recent survey, ad spend on social media is projected to reach 129 billion in 2024. However, social media marketing presents unique legal issues, not generally present in more traditional advertising. Last week, we discussed the legal risks for the celebrity endorser in social media marketing. This week, I’m joined again by my partner, Jessica Marlow, and we’re going to discuss the legal risks for brands in social media marketing. I’m Scott Hervey with Weintraub Tobin; this is “The Briefing.” Jessica, welcome back.

    Jessica:
    Pleasure to be back.

    Scott:
    Last week, we discussed the risks celebrities or influencers face in social media marketing. Today, we’re going to talk about the risks brands face in social media marketing. Let’s first talk about FTC compliance. Like influencers, brands have FTC compliance requirements. As you mentioned last week, Jessica, we did an entire episode on this.

    Jessica:
    Right, but let’s review a few points because it seems that this can be one of the biggest blind spots for brands.

    Scott:
    Sure, you’re right because this really is the biggest blind spot for brands. Previously, the FTC would hold an advertiser liable for misleading or unsubstantiated statements made through endorsements when there is a connection between the advertiser and the endorser. Now, the FTC has recently deleted the wording when there is a connection between the advertiser and the endorser. So generally, there’s always a connection between an advertiser and an endorser because it is, after all, a marketing or a promotional message. However, the FTC pointed out that a connection is not always needed for an advertiser to be liable for an endorsement. If, for example, an advertiser retweets a positive statement made by an unrelated third party or publishes in an advertisement a positive review by an unrelated third party, those statements or reviews become endorsements for which an advertiser may be liable. The despite the lack of any connection.

    Jessica:
    Right. Then, there are performance claims. Performance claims must be for the typical result. If the results being hyped are atypical, then the advertiser must clearly and conspicuously disclose the generally expected performance in the depicted circumstances. To be effective, the disclosure must alter the net impression of the advertisement so that it’s not misleading. Scott: If the brand is reposting content from a paid endorser or someone who received anything of value to make that initial post, the brand must make sure that the material connection between the brand and the endorser is conspicuously disclosed.

    Jessica:
    In boosting, upvoting, reposting, pinning, or liking consumer reviews of products, a brand should not take action that have the effect of distorting or otherwise misrepresenting what consumers think of their product. This includes suppressing or deleting negative reviews or comments.

    Scott:
    Like risks with FTC compliance, similar to influencers, brands also face IP infringement risks. In an influencer marketing campaign, a brand will hire an influencer to create content for the purpose of endorsing and promoting a product. Even though the contract between the brand and the influencer generally requires the influencer to create the original content and not use content that belongs to someone else, sometimes that doesn’t happen. Sometimes an influencer may use, whether intentionally or unintentionally, content that doesn’t belong to them. If that happens in an integration post, the brand faces a risk of being tied up in the copyright infringement case.

    Jessica:
    True. As an example, let’s look at the O’Neill versus Ratajkowski case. In that case, model Emily Ratajkowski posted a photo of her outside of a flower shop in downtown Manhattan. The photo showed Ratajkowski with her face covered by the bouquet of flowers. O’Neil sued Ratajkowski and her loan-out company for copyright infringement. But it’s important to note that the content used doesn’t necessarily have to be the entire photo. It could be many things, an image, footage, or even music. The infringement by the influencer may not be intentional. It’s amazing how many people who make their living by posting content think that if something’s on the internet, it’s available to be used.

    Scott:
    That’s so true. Even though the agreement between the brand and the influencer may have an indemnity provision, as we said last week, indemnity is only as good as the indemnitor’s pocketbook. While an influencer may contractually have an obligation to indemnify the brand, if the influencer doesn’t have the resources to mount a defense, the defense will end up falling on the brand.

    Jessica:
    Right. Occasionally, brands will use UGC or user-generated content on a brand’s social media account. What may be okay in an ordinary person’s post, such as a photograph with multiple cosmetic brands, could become trademark infringement if a brand were to post the same image on its own social media accounts.

    Scott:
    That’s right. That could present a big problem for a brand. It’s not so much of the risk that comes from the brand’s interaction with the person that originally created the post or its interaction with the UGC. It’s more that the brand’s social media manager not really understanding the the complexity of the risks involved in using that post as an endorsement.

    Jessica:
    Sometimes it’s also social media representatives who also believe that just because something is on the internet means it’s available to be used, or they think that just because an image is in a meme generator, that meme that includes someone else’s image may be freely used by the brand. Failing to understand that just because content is on the internet doesn’t mean it’s available for use can be legally problematic for a brand. Similarly, failing to review the license agreement or terms of use for that meme generator site or photo library site could also be legally problematic. I can’t tell you how many times I’ve looked into a library or a meme site’s terms of use, and I found that they make no representations or warranties whatsoever about having any licenses and don’t provide any indemnity.

    Scott:
    Another area where I see brands have issues with is using a stock library where they fail to understand the limitations on the usability of image designated as editorial only. Generally, when an image is designated as editorial only, this means that some type of necessary clearance element, an element that would make the image safe for commercial use, is missing if a brand uses an image that is marked as editorial only, that could have fairly significant legal issues.

    Jessica:
    True. If that stock photo contains an image of a person and that person’s rights have not been cleared, then the brand could be facing a right of publicity lawsuit, and if that person is famous, a false endorsement claim.

    Scott:
    So, as you can see, there are a fair number of risks that need to be navigated when it comes to brands and social media marketing. Now, these risks can be navigated. We do it all the time, and brands do it all the time. But, it does require thoughtfulness. I think one key takeaway here, Jessica, tell me if you agree, is start with a general understanding that just because it’s on the internet doesn’t mean that it’s available for use. And treat clearance as if you were producing a television show. We take television clearance very seriously, but somehow, for whatever reason, that doesn’t seem to translate all the time to digital marketing. I think if brands and their staff approach digital marketing with that degree of caution, there might not be so many issues.

    Jessica:
    I agree completely. It really comes down to doing your due diligence, because if you don’t, the potential liability could be massive.

    Scott:
    I understand that digital marketing moves fast, but liability is expensive, and it’s worth slowing it down just a little bit.

    Jessica:
    Absolutely. Where’s to live by? Yeah.

    Scott:
    Thanks for joining us again, Jessica.

    Jessica:
    Thank you for listening to this episode of “The Briefing”. We hope you enjoyed the episode. If you did, please remember to subscribe, leave us a review, and share the episode with your friends and colleagues. If you have any questions about the topics we covered today, please leave us a comment.


    Navigating the Legal Risks for Brands in Social Media Marketing – Part 1 Apr 05, 2024
    Show notes

    Navigating the Legal Risks for Brands in Social Media Marketing - Part 1 (1)Delve into the legal terrain of influencer marketing from IP infringement risks to FTC guidelines compliance. Scott Hervey and Jessica Marlow from Weintraub Tobin navigate the complexities of brand deals with expert insights on safeguarding your brand partnerships on this episode of “The Briefing.”

    Watch this episode on the Weintraub YouTube channel here.

    Show Notes:

    Scott:
    Influencer social media marketing is big business, whether it’s a brand integration on Instagram by an influencer or a long-term brand endorsement deal by an A-list movie star. Each deal is different, but there are similar issues that are apparent in all brand deals. I’m Scott Hervey with Weintraub Tobin, and I’m joined today by my partner, Jessica Marlow. Today is part one of our profile on understanding and navigating risks in brand marketing deals on today’s installment of “The Briefing” by Weintraub Tobin.

    Jessica, welcome back to “The Briefing.”

    Jessica:
    Thank you. Happy to be back.

    Scott:
    This is something we both deal with frequently from both the brand and the talent side. There are certain risks that celebrities and brands have to navigate in these types of deals. Making these risks more prevalent is the fact that we’re talking about digital marketing, where things tend to move quicker. And for whatever reason, people, even marketing professionals, may sometimes believe that the laws applicable to terrestrial or regular advertising don’t apply to the Internet. Let’s talk about our top general risks from a talent perspective and how to deal with them. Now, we have a bunch of lawyers that listen to our podcast, and you might have a different list, and we would love to hear from you if you think we should have covered something that we didn’t. But this is what we think are the top legal issues in a talent brand deal.

    Jessica:
    One of the major risks is IP infringement. Now, this is multifaceted, and the risk of infringement comes from a few different places. First, there is infringement risks that the celebrity or influencer imposes on themselves, which can happen in a few ways. The first way is by using content where the copyright is owned by a third party, for example, where a celebrity or influencer posts an image that they don’t own. You’ve covered a few cases on “The Briefing” about this.

    Scott:
    That’s right. One of the more well-known case is what is O’Neill versus Ratajkowski. While that case didn’t necessarily involve brand marketing, it’s a perfect example of this type of risk. In 2009, O’Neill, who was a professional paparazzi, took a photo of Ratajkowski outside of a flower shop in downtown Manhattan. Now, the photo showed Ratajkowski with her face covered by this bouquet of flowers. O’Neill subsequently registered his photograph with the Copyright Office. Now, shortly after O’Neill posted the photo online, Ratajkowski posted the photo on her own Instagram account. The photo she posted was the same, except that she added the words “Mood Forever” to the bottom of the Instagram post. Now, O’Neill, of course, sued Ratajkowski and her loan-out company for copyright infringement.

    Jessica:
    Right. And Ratajkowski tried to get out of the case on a fair use defense on a motion to dismiss, but she was unsuccessful. And this case was before the Supreme Court ruling in Warhol versus Goldsmith. Under the new fair use analysis, it’s almost certain that Ratajkowski would not have had a fair use defense.

    Scott:
    Yeah, that’s true. And this type of liability isn’t just limited to cases where the photo that is used makes up the entire post. This type of potential liability can exist where the third-party photo only makes up a portion of the poster video.

    Jessica:
    Right. It’s just not limited to photos. This could be a video or other similarly copyrighted, protected material like music or logos.

    Scott:
    Yeah, and music can be a bit tricky. You would think that almost everyone would understand that you can’t just use your favorite band sound recording in a YouTube video or Instagram story. Unless, of course, it’s offered as music library content from the platform. But you still see that happening.

    Jessica:
    True. But where there tend to be more problems with music is not in the use of the sound recording, but in the use of the composition. As you know, there are two copyrights in music. One copyright covers the actual sound recording, and those rights are generally owned by the record company. The other copyright is in the composition, meaning the actual music and the lyrics. The copyright in the composition is generally owned by either a music publisher if the song have a publishing deal, or by the songwriters themselves. When you normally see issues of publishing is where the celebrity or influencer performs as in sings the song.

    Scott:
    Now, normally, if you are a celebrity or influencer and you want to record the performance of a song, you have to get what is called a synchronization license from whoever holds the publishing rights in the music, whether that be the publisher or the songwriters. Without obtaining a sync license, your recording and subsequent broadcast of the performance of the song is copyright infringement.

    Jessica:
    So not only is this a potential issue for the endorser with the owner of the copyright, but this also could result in a big issue for the brand. First, it’s likely to constitute a breach of the agreement with the brand and result in the endorser not getting paid. Also, if there’s any action by the copyright holder, then the endorser will likely have to indemnify the brand.

    Scott:
    Yeah, that’s right. Now, there is another type of infringement risk that an endorser potentially faces. And this one usually comes as a big surprise to endorsers and, frankly, their agents. That’s the endorser’s exposure to either a trademark or a copyright infringement claim based on something the brand does. Now, we previously talked about a trademark case where Molly Sims was sued for trademark infringement, all because of a of a sponsored post she did for a beauty product, which another cosmetic company claimed infringed its trademark.

    Jessica:
    I remember that case well. Sims’ involvement in the matter was no different than any other influence or marketing campaign. As part of a product launch, the defendant cosmetic company hired Sims to post a review of its product on her blog. Sims’ blog post acknowledged that the review was sponsored, as she’s required to for the FTC, and included a link to the defendant’s website. The plaintiff, a competing cosmetic company, sued the defendant cosmetic company and Sims for trademark infringement and other related claims.

    Scott:
    So Sims tried to get out of the case early, but the court denied her motion to dismiss. In order to establish direct trademark infringement, the plaintiff must establish the use of its mark by the defendant in commerce and the likelihood of confusion. The judge found that the plaintiff had adequately pled that the blog post was likely to cause confusion as to the source of the product and that Sims’ post was essentially advertising, thereby satisfying the use and commerce requirement. Sims raised some arguments why her use should not constantly trademark infringement as a matter of law, including that the blog post was non-commercial editorial speech. The court said that because this was paid content, it crossed the line from editorial or consumer commentary to commercial use.

    Jessica:
    Most endorsers don’t appreciate that a one-off integration for a brand could land that endorser right in the middle of a trademark infringement case. This is why we always fight hard to get indemnity from the brand in every deal we do. But as mentioned in your coverage of the Sims case, indemnity is only as good as the solvency or the corporation of the indemnitor.

    Scott:
    Speaking of solvency of the indemnitor, this brings to mind the rash of promoter liability lawsuits against the celebrity endorsers from the fallout over FTX’s bankruptcy. If I told Tom Brady, Giselle Bündchen, Steph Curry, and Shaquille O’Neal that they could face potentially millions in civil liability all because they just appear in a TV ad for FTX, they and their agents probably would have laughed me out of the room. But that’s what’s happening now. Tom Brady, Giselle Bündchen, Steph Curry, Shaquille O’Neal, and others are all defendants in massive lawsuits seeking to hold these celebrities liable for the money’s lost by FTX customers. The customers claim that the celebrities were promoting unregistered securities which fall under the Regulatory Authority of the Securities and Exchange Commission. Under federal law and securities law, anyone who promotes a securities offering has a legal duty to ensure that the information they publish is complete, accurate, and not misleading.

    Jessica:
    And not only is there potential civil liability, but there’s also potential liability from the SEC. In March 2023, the SEC announced charges against multiple celebrities who were accused of participating in a fraudulent scheme to promote TRX and BitTorrent cryptocurrency securities. The SEC alleged that the celebrities violated federal law by illegally touting the TRX and the cryptocurrency without disclosing that they were compensated for doing so and the amount of compensation. And these penalties can be substantial. In October 2022, Kim Kardashian entered into a $1.26 million settlement with the SEC following its investigation of her online promotion of EMAX tokens. According to the SEC, Kardashian failed to disclose the payment that she received when promoting the crypto asset security on social media.

    Scott:
    And your example is a perfect lead in for the next potential legal landmine, and that’s an endorser’s failure to comply with the FTC disclosure guidelines.

    Jessica:
    Right. That is a big issue. We did an entire episode on that and the recent changes to the FTC guidelines, so our audience should certainly listen to that episode. Scott, I think we should cover on an additional episode sort of the risks related to product liability and when an endorser is promoting a product, particularly if we’re talking about food or skincare or makeup, ingestible, vitamins, those sorts of products, and where the liability could ultimately lead for our celebrities and our influencer clients.

    Scott:
    Yeah, absolutely. That’s a huge topic and certainly would need its own episode.

    Jessica:
    Absolutely. But next week, we’re going to cover the company side of the legal risk coin.

    Scott:
    Yes, we are. I’m looking forward to that. Jessica, thanks for joining me today.

    Jessica:
    Thank you for listening to this episode of “The Briefing.” We hope you enjoyed the episode. If you did, please remember to subscribe, leave us a review, and share the episode with your friends and colleagues. If you have any questions about the topics we covered today, please leave us a comment.


    Defamation by Docudrama – Inventing Anna (ARCHIVE) Mar 29, 2024
    Show notes

    The Briefing Defamation by Docudrama – Inventing Anna (ARCHIVE)

    In this episode of The Briefing by the IP Law Blog, Scott Hervey and Josh Escovedo discuss a defamation dispute between Rachel Williams – a victim of con artist Anna Sorokin – and Netflix, over her portrayal in the docudrama “Inventing Anna.”

    Watch this episode on the Weintraub YouTube channel here.

    Show Notes:

    Scott: Netflix finds itself mired in yet another defamation and false light lawsuit, this one brought on by its portrayal of Rachel Williams, the Vanity Fair photo editor who’s friendship with Anna Delvey – who passed herself off as German heiress Anna Sorokin. Williams’ complaint raises some interesting questions about the portrayal of Williams in the program. We are going to discuss this lawsuit on the next installment of the Briefing by the IP Law Blog

    Scott: Rachel Williiams does not come across well in the Netlix program, Inventing Anna. Rather, she comes across as a privileged, freeloader, who sponges off of Sorokin and then abandons Sorkin when Sorkin’s real situation comes to life. So, let’s talk about what Williams will have to establish in order to move her claim forward.

    Josh: Williams. brings claims for defamation and false light. For her defamation claim Williams will have to establish: that the statements were defamatory; that the statements were published to third parties; that the statements were false; and that it was reasonably understood by the third parties that the statements were of and about herf. Since Williams is a public figure – she published a story in Vanity Fair and a book about her experiences with Sorkin – she must also prove by “clear and convincing evidence” the statement was made with “actual malice” meaning that the defendant knew the statement was false, or had serious doubts about the truth of the statement. In most states, libel is defined similarly.

    Scott: A false light claim is a type of invasion of privacy, based on publicity that places a person in the public eye in a false light that would be highly offensive to a reasonable person, and where the defendant knew or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the aggrieved person would be placed. A false light claim is equivalent to a libel claim, and its requirements are the same as a libel claim, including proof of malice.

    So, in order for Williams to prevail on both her false light and defamation claims, she would have to demonstrate that her portrayal in Inventing Anna was (1) assertions of fact, (2) actually false or create a false impression about her, (3) are highly offensive to a reasonable person or defamatory, and (4) made with actual malice.

    Josh: Actual malice would be established by showing that Netflix deliberately portrayed Williams in the hope of insinuating a defamatory import to the viewer, or that Williams knew or acted in reckless disregard as to whether her portrayal would be interpreted by the average viewer as a defamatory statement of fact.

    Scott: So, let’s take a look at the various portrays of Williams she claims to be actionable. Williams notes a scene in episode 2 where Sorokin’s friend Neff Davis states or implies that Williams used to be Sorokin’s best friend, but Williams dropped her as a friend because she was

    jailed and could not pay for Williams’ social life and clothes. Williams claims that these scenes are false. Williams was friends with Sorokin because she liked her, not because Sorokin would pick up the tab, and she did not drop Sorokin as a friend because Sorokin was no longer able to pay for her social life and clothes, but rather because she discovered that Sorokin had made the fraudulent statements and promises which induced her to incur significant liabilities, and that Sorkn was a liar and a con artist. That Sorokin never bought clothes, shoes, earrings, or a bag as gifts for Williams, who never wore Sorokin’s clothing or accessories and never told

    Neff that Sorokin had bought her clothes. Williams claims that the statements are defamatory because Williams is falsely portrayed as a disloyal and opportunistic friend, a sponger, and a freeloader.

    Josh: There are other scenes referenced by Williams which portray Williams as a freeloader or a false friend. For example, a scene in episode 5 where Williams is portrayed in attempting to convince Sorkin to pay for an expensive hairstyle for Williams and a scene in episode 6 where Williams is portrayed trying to get Sorkin to pay for a more expensive hotel room in Moracco. Williams claims. Williams claims that this scene is false and never happened. Williams never tried to get Sorokin to pay for an expensive hair stylist for her, and Sorokin never paid for her hair. Also, Sorokin made the arrangements with the Hotel herself, and Williams did not make any suggestions to her about the accommodation there. Williams also takes offense to her being portrayed in the program as not paying for any dinner, drinks or spa outings with Sorkin. Williams claims that this wrongfully portrays her as a freeloader. IN the complaint Williams claims that she regularly paid her way.

    Scott: In the complaint Williams also takes issue with a scene in episode 6where Williams is portrayed as abandoning Sorkin in Morocco. After the scenes depicting the problems with the credit cards at the Hotel and the private museum tour, Williams tells Anna who is alone in her room, drinking heavily and depressed, that she is leaving. Sorokin begs her not to leave her, but Williams leaves anyway. According to the complaint, Williams had a pre-existing business meeting in France and Williams had told Sorkin prior to the pair leaving for Morocco, that she (Williams) would be leaving on a certain date and that Williams left Morocco Sorkin was not sad or depressed. Williams alleges that The statements in these scenes are defamatory because Williams is falsely portrayed as a fair weather friend who abandoned Sorokin when she was alone, depressed and in trouble in Morocco, and needed help and support. These are negative personal traits or attitudes that Williams does not hold.

    Josh: Another set of interesting allegations has to do the programs treatment of the charges from Williams and Sorokin’s Morocco trip on Williams’ company credit card. The program portrays Williams as not being entirely upfront with her employer, Vanity Fair, about the charges. In fact in the program there is an exchange between Williams and one of her supervisors where Williams is portrayed feigning knowledge of the outstanding charges; essentially Williams is portrayed as lying to her employer. Williams states that this is a false statement and/or attribution in that she never lied to her employer about this charge, but rather, she voluntarily told her employer that a large personal charge had been placed on her Business Amex and that she accepted responsibility for it.

    Scott: Before the court even gets to the question of whether Williams’ portrayal is defamatory, the court would first have to determine whether her portrayal was substantially true. If the court determines that a statement is substantially true, that’s the end of the defamation and false light claim. Its only after the court determines that the statement or portrayal is not substantially true that the court will consider whether the statements or portrayals are statements of fact or the dramatized opinion of the producer.

    Josh: In deciding whether a statement is substantially true, courts typically compare the language or portrayal with the actual truth to determine whether the truth would have a different effect on the mind of the average reader/ viewer. Taking the allegations in the complaint as true – that Williams did not say or act in the way she is portrayed in the series, I think the court would not find the various complained of portrayals as being substantially true,

    Scott: I agree Josh. Williams’ portrayal in the series was was commented on by a few media outlets. In an article entitled “Inventing Anna has a brutal vendetta against Rachel Williams – is Netflix bitter she sold her story to HBO?”, the Independent wrote, “Inventing Anna really, really wants us to hate Rachel Williams… Williams features as a character in Inventing Anna, a show which seems hellbent on making her out to be the worst person in the world…The New York Post wrote “Shonda’s most insane move, however, is treating poor Vanity Fair photo editor Rachel Williams like she’s the Wicked Witch of the West. The complaint also alleges that, as a result of Netflix’s portrayal, Williams was subjected to substantial online abuse, negative in-person interactions and negative characterizations in podcasts. The complaint includes a representative sample but notes that Williams has received thousands of similar abusive messages. The allegation is that if Williams was not falsely portrayed in this manner, she would not have been subject to this negative treatment by the public.

    Josh: If a statement/portrayal is not truthful, then the next question would be whether an average, reasonable viewer, watching the scenes in their original context, would conclude that they are statements of fact and not the dramatized opinion of the producer. The 9th Cir believes that viewers of this type of programming know that they are “more fiction than fact.” however New York does not go this far. In Fairstein v. Netflix, the United States District Court for the Southern District of New York declined to conclude that viewers of When They See Us would assume the program is “more fiction than fact” but rather that the dialogue in the dramatization “is not a verbatim recounting of the real-life participants and is intended to capture the essence of their words and deeds.”

    Scott: According to the Fairstein court, the key to determining the difference between non-actionable statements of opinion and actionable statements of facts (or an opinion that implies that it is based upon facts which justify the opinion) is the implication that the statement is based on undisclosed facts known to the defendants. So, is. Williams’ portrayal the unactionable, dramatized opinion of the producers, or is her portrayal based on, or does it appear to the average, reasonable viewer to be based on undisclosed facts known to the producers?

    Josh: The producers include a very conspicuous disclaimer at the beginning of every episode. The disclaimer generally states “This story is completely true, except for all the parts that are total bullshit or totally made up.” Usually disclaimers give the producer some room to claim that a work or parts of a work are dramatized opinions. However, as the United States District Court for the Central District of California pointed out in Gaprindashvili (Ga prin dash vill) v. Netflix (the Queens Gambit defamation suit), the presence of a disclaimer is a “factor in the analysis, albeit not a dispositive one.”

    Scott: That’s right Josh, in that case the court found that Gaprindashvili ((Ga prin dash vill) had plead sufficient facts to support her defamation claim and the court reminded Netflix that works of fiction are not immune from defamation suits if they disparage real people.

    Josh: The distinction between fact and opinion is an issue of law for the courts, and the determination will be based on the court’s assessment of how the statement would be understood by the average person exposed to the statement in its full context. I think it’s possible that the court will find that as to some of the depictions, especially the scenes in which Williams is portrayed as a less than truthful and forthcoming employee of Vanity Faire, the average viewer would not have a reason to conclude that such actions reflect a dramatized opinion of the filmmakers and such viewer could fairly conclude that the depiction was based on undisclosed facts known to the defendants.

    Scott: Let’s look at the remaining elements as I think they somewhat run together – actually false or create a false impression about her, (3) are highly offensive to a reasonable person or defamatory, and (4) made with actual malice. I think the media stories on the negative depiction of Williams and the evidence of the hatred being aimed at her online establish that a false impression was made and that this false impression was highly offensive to a reasonable person. As for actual malice, Williams would have to show that Netflix deliberately portrayed Williams in the hope of insinuating a defamatory import to the viewer, or that Williams knew or acted in reckless disregard as to whether her portrayal would be interpreted by the average viewer as a defamatory statement of fact.

    Josh: The Complaint has a separate section devoted entirely to establishing actual malice. According to the complaint, the production had hired a researcher whos job it was to investigate the Sorokin story and provide the research to the writers. . Shonda Rhimes, the executive producer and creator of the Series, explained in an interview, “We were telling a story that was based on fact, so needed a document to build an extensive timeline of events, to dig into little things that we weren’t even sure were going to matter. For this particular show, having someone who has read every transcript of the trial, who was paying close attention to every detail in Anna’s life, was really, really important, because we wanted to know what we were thinking. We wanted to know what we were making up; we didn’t want to be making things up just for the sake of it.” She added, “we wanted to intentionally be fictionalizing moments versus just accidentally be fictionalizing them.”

    Scott: The complaint also points to the fact that the New York post article upon which the series is based does not contain any negative portrayal of Williams. Also, the fat that Williams had published the Vanity Fair article and book, My Friend Anna. Also, it appears that Williams’ attorney sent Netflix two letters during the shows production expressing concern that Williams would be portrayed falsely- Based on the complaint it seems that Netflix was likely on notice.

    Netflix doesn’t shy away from a lawsuit and if what they have done in previous indicators I expect Netflix will hit back hard, arguing that the portrayals are substantially true…to the extent they are not the producer’s dramatized opinion. We will have to see where this case goes


    Truth Maybe Crazy, But Truth Just Got Kanye West Out of a Defamation Case Mar 23, 2024
    Show notes

    Truth Maybe Crazy, But Truth Just Got Kanye West Out of a Defamation Case (1)

    Discover how truth became the ultimate defense in the legal battle between Cynthia Love and Kanye West. Join Scott Hervey and Eric Caligiuri from Weintraub Tobin as they unpack the court’s ruling on whether displaying historical footage amounts to defamation on this episode of ‘The Briefing’.

    Watch this episode on the Weintraub YouTube channel here.

    Show Notes:

    Scott:
    Truth is a defense to a defamation claim. So, it would be no surprise to think that displaying a recording of the way someone actually behaved at some past date would also not be defamation. That assumption was put on trial, literally, in the case of Cynthia Love versus Kanye West in the Central District of Illinois. I’m Scott Hervey from Weintraub Tobin, and I’m joined today by Weintraub lawyer and frequent guest of “The Briefing,” Eric Caligiuri, to talk about this case and the court’s ruling on today’s episode of “The Briefing.”

    Eric, welcome back to “The Briefing.”

    Eric:
    Good to be here again, Scott. So, Scott, can you tell us a little bit about the history of the case?

    Scott:
    Sure. Absolutely. So, in 2003, Cynthia Love appeared in a Kanye West music video for “Talking Through The Wire.” Love apparently does some short dance number in a barbecue restaurant before asking West for some change. She, according to the complaint and according to the court documents, she looks unsteady and sounds slurred. Fast forward to 2022, when Netflix released a docuseries called “Jeen-yuhs,” a Kanye trilogy, which included clips of Love from that music video, plus previously unreleased footage, all totaling about two minutes of screen time. Love took issue with how she was portrayed in the clips taken in that barbecue restaurant decades ago, and so she sued.

    Eric:
    The basis of her claim is that the documentary captures Love at her darkest moments, and that is not who she is now. Love bases her defamation claims on the grounds that she is not the same person now that she was in 2003 when they made the music video.

    Scott:
    That’s right, Eric. That’s the basis of her complaint for defamation, false light, and other causes of action. On the defendant’s motion to dismiss, the court analyzed Love’s defamation claim. Now, under Illinois law, to state a defamation claim, a plaintiff must present facts showing that the defendant made a false statement about the plaintiff, that the defendant made an unprivileged publication of that statement to a third party, and that this publication caused damages.

    Eric:
    Similar to California law, in Illinois, truth is an absolute defense to defamation. True statements cannot support a defamation claim.

    Scott:
    That’s correct. And the court found that any allegations about Love in the “Jeen-yuhs” docuseries were true. The docuseries included real-world, real-life clips of Love without doctoring the content or adding any false material. It shows true clips of a real event. The court noted that the docuseries makes clear that the footage is from 20 years ago, and the fact that Love later turned things around does not make the footage from years earlier false.

    Eric:
    So, a defamation claim fails if the allegedly defamatory statement is a historical truth, even if it’s not necessarily the current truth.

    Scott:
    That’s right. If a defamatory statement is a historical truth, even if it’s not currently true, it’s true, and the defamation claim must fail. The “Jeen-yuhs” video accurately portrayed Love in a moment of time several decades ago. The video does not suggest that Love in this day remains in an intoxicated state or anything of that sort. The video shows a past truth without suggesting that the past is the present. The footage is historically accurate. So Love’s defamation claim and false like claim fail.

    Eric:
    There were other claims, too. A violation of publicity rights and intentional infliction of emotional distress.

    Scott:
    That’s right, and the court made short work of the right of publicity case, finding that the exemption for audiovisual works under the Illinois right of publicity law covered the docuseries. And as for the intentional infliction of emotional distress, the court had this to say, “A lighthearted dance by some barbecue is not extreme or outrageous. If anything, dancing while a little intoxicated near some barbecue is an all-American activity. It sounds like the 4th of July, lots of viewers might think, been there, done that.” As an aside, kudos to Justice Steven Seeger for the United States District Court for the Northern District of Illinois, the Eastern Division, for writing quite a pithy order.

    Eric:
    Scott, you work with a lot of production companies. Does this case surprise you at all?

    Scott:
    The ruling didn’t surprise me. Given that truth is a complete defense to a defamation claim, it is important for producers to understand that the reason the defamation case was dismissed is due in large part to the fact that the producers didn’t try to apply the footage out of context or otherwise manipulate matters to give an inaccurate impression. If the producers used the footage in a manner to imply that the footage was of a recent event, or that Love hadn’t changed her mannerisms from 20 years ago, the results might have been much different.

    Eric:
    Thanks, Scott. That was a really interesting case. Thanks for bringing that to our attention.

    Scott:
    Thank you for listening to this episode of “The Briefing.” We hope you enjoyed this episode. If you did, please remember to subscribe, leave us a review and share this episode with your friends and colleagues, and if you have any questions about the topics we covered today, please leave us a comment.


    The Patent Puzzle: USPTO’s Guidelines for AI Inventions Mar 15, 2024
    Show notes

    The Patent Puzzle USPTO's Guidelines for AI Inventions

    Can AI inventions be patented? Scott Hervey and Eric Caligiuri explore recent USPTO guidance on patenting AI-assisted inventions in this installment of “The Briefing” by Weintraub Tobin.

    Watch this episode on the Weintraub YouTube channel here.

    Show Notes:

    Scott:
    Can AI inventions be patented? Can inventors use AI assistance in the creation of an invention, and can that invention be patented? On February 12, 2024, the United States Patent and Trademark Office issued guidance on the patentability of inventions developed with the assistance of artificial intelligence. I’m Scott Hervey from Weintraub Tobin, and I am joined today by Weintraub lawyer and frequent guest to the briefing, Eric Caligiuri, to discuss this new development in patent prosecution on this episode of “The Briefing.” Eric, welcome back to “The Briefing.”

    Eric:
    Good to be here, Scott.

    Scott:
    So, Eric, the USPTO recently issued a guidance statement that addressed the listing of non-humans on patent applications. Now, this seems to stem from the various patent applications filed by Stefan Thaler or Thaler, which lists his AI tool device for the autonomous bootstrapping of unified sciences, or DABUS, as the inventor. The USPTO denied these applications, and this denial was upheld by the Federal Circuit.

    Eric:
    Right, Scott, in the guidance, the USPTO explained that AI systems and other non-natural persons cannot be listed as inventors on patent applications or patents. The USPTO reasoned that the US Supreme Court has indicated that the meaning of invention in the patent act refers to the inventor’s conception. Similarly, the Federal Circuit has made clear that conception is the touchstone of inventorship. Conception is often referred to as a mental act or the mental part of the invention. Specifically, it is the formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is hereafter to be applied in practice. Because conception is an act performed in the mind, it has to date been understood as only performed by natural persons.

    Scott:
    Eric, there has been some question about the patentability of inventions created using AI tools. The USPTO issued guidance on this issue as well.

    Eric:
    That’s right. The USPTO explained that while AI-assisted inventions are not categorically unpatentable, the inventorship analysis should focus on human contributions, as patents function to incentivize and reward human ingenuity. Thus, patent protection may be sought for inventions created through the use of AI tools under specific circumstances.

    Scott:
    So the USPTO made it clear that inventions created through the use of AI tools are not per se unpatentable.

    Eric:
    That’s correct. The USPTO said that there are no specific sections of the patent act that support a position that inventions that are created by natural persons using specific tools, including AI systems, result in improper inventorship or otherwise unpatentable. The statutes only require the naming of natural persons who invented or discovered the claimed invention. Irrespective of the contributions provided by an AI system or other advanced technology system.

    Scott:
    So, Eric, what are the circumstances under which a creator or inventor using an AI tool can claim ownership of the invention?

    Eric:
    In the context of AI-assisted inventions, natural persons who create an invention using an AI system or any other advanced system must still contribute significantly to the invention. There is no requirement for a named inventor to contribute to every claim in an application or patent. A contribution to a single claim is sufficient. However, each claim must have been invented by at least one named inventor. In other words, a natural person must have significantly contributed to each claim in a patent or patent application. In the event of a single person using an AI system to create an invention, that single person must make a significant contribution to every claim in the patent or patent application. Inventorship is improper if any patent or patent application that includes a claim in which at least one natural person did not significantly contribute to the claimed invention, even if the application or patent includes other claims invented by at least one natural person.

    Scott:
    In determining whether a person significantly contributes to an invention created using AI tools, the USPTO will look to the same test it uses to determine inventorship in claimed joint inventions, right?

    Eric:
    Correct. The USPTO looks at the Pannu factors. Each inventor must contribute in some significant manner to the conception or reduction to practice of the invention, make a contribution to the claimed invention that is not insignificant in quality when that contribution is measured against the dimension of the full invention, and do more than merely explain in the real inventor’s well-known concepts and or the current state of the art.

    Scott:
    So, Eric, what can applicants expect when filing an application for an invention created using AI tools?

    Eric:
    When applying the Pannu factors to determine whether natural persons significantly contributed to an AI-assisted invention? This determination is made on a claim by claim or a case by case basis, and each instance turns on its own facts. While the USPTO generally presumes those inventors named on the application data sheet are the actual inventor or joint inventors of the application, patent examiners will carefully evaluate the facts from the file record or other extrinsic evidence when making determinations on inventorship. When the facts or evidence indicates that the named inventor or joint inventors did not contribute significantly to the claimed invention, the civic claim and possibly the entire application may be rejected.

    Scott:
    No inventor wants to go through the time and expense of filing a patent application only to have it rejected. We know that an inventor must significantly contribute to the creation of the invention, and such contribution must meet the Pannu factors. What else can the inventor consider?

    Eric:
    Agreed. The USPT of them provided the following non-exhaustive list of principles that can help determine whether an AI assisted invention is patentable. First, merely recognizing a problem or having a general goal or research plan to pursue does not rise to the level of conception. A natural person who only presents a problem to an AI system may not be a proper inventor or joint inventor of an invention identified from the output of the AI system. However, a significant contribution can be shown by the way the person constructs the prompt and view of a specific problem to elicit a particular solution from the AI system.

    Scott:
    Now, reducing an invention to practice alone is not a significant contribution that rises to the level of inventorship.

    Eric:
    That’s right. A natural person who merely recognizes and appreciates the output of an AI system as an invention, particularly when the properties and utility of the output are apparent to those of ordinary skill in the art, is not necessarily an inventor. However, a person who takes the output of an AI system and makes a significant contribution to the output to create an invention may be a proper inventor. Alternatively, in certain situations, a person who conducts a successful experiment using the AI system’s output could demonstrate that the person provided significant contribution to the invention, even if that person is unable to establish conception until the invention has been reduced to practice.

    Scott:
    A natural person who develops an essential building block from which the claimed invention is derived may be considered to have provided a significant contribution to the conception of the claimed invention, even though the person was not present for or a participant in each activity that led to the conception of the claimed invention.

    Eric:
    Correct. In some situations, the natural person who designs, builds, or trains an AI system in view of a specific problem to elicit a particular solution could be an inventor, where the designing, building, or training of the AI system is a significant contribution to the invention created by the AI system.

    Scott:
    Maintaining intellectual domination over an AI system does not, on its own, make a person an inventor of any inventions created through the use of the AI system. Right?

    Eric:
    Exactly! A person simply owning or overseeing an AI system that is used in the creation of an invention without providing a significant contribution to the conception of the invention does not make that person an inventor. The USPTO reminded applicants that they still have a duty to disclose, and in applications for AI-assisted inventions, this information could include evidence that demonstrates a named inventor did not significantly contribute to the invention because the person’s reported contribution was made by the AI system.

    Scott:
    Thanks, Eric, that was quite fascinating. Actually, I’m quite fascinated by the USPTO; having said that, a significant contribution could be shown by the way a person constructs the prompts in view of a specific problem to elicit a particular solution from the AI system. I think that’s, that’s pretty groundbreaking, right? I mean, that’s basically saying that an inventor could be considered to have significantly contributed to an invention that is created due to the output of a generative AI system based solely on the structure and construction of the prompts that they feed into the system. I think that’s pretty groundbreaking. Would you agree?

    Eric:
    No, I totally agree with that. I mean, essentially, what you’re saying is, based solely on the inputs into the AI system, they could potentially be considered an inventor, assuming that those inputs significantly contributed, I guess, to the output, which would be the conception of the invention.

    Scott:
    Yeah, I guess it has to do with the, it seemed from at least that statement that it seemed to be the work that goes into structuring the input, creating and structuring the input. Fascinating. I think we’ll definitely have to keep our eye on future patent applications that are filed based on the use of AI tools and see how this all shakes out. Thanks again, Eric, for bringing this to our attention.

    Eric:
    Thank you for listening to this episode of “The Briefing.” We hope you enjoyed the episode. If you did, please remember to subscribe, leave us a review and share this episode with your friends and colleagues, and if you have any questions about the topics we covered today, please leave a comment.


    How Far Back Can You Go: Supreme Court to Decide Circuit Split on Recovery of Copyright Damages Mar 08, 2024
    Show notes

    How Far Back Can You Go Supreme Court to Decide Circuit Split on Recovery of Copyright Damages

    How far back can a plaintiff recover damages in a copyright infringement case? Scott Hervey and Jamie Lincenberg discuss this contested copyright law question in this installment of “The Briefing” by Weintraub Tobin.

    Watch this episode on the Weintraub YouTube channel here.

    Show Notes:

    Scott:
    Just how far back can a plaintiff in a copyright infringement case go in recovering damages? I’m Scott Hervey of Weintraub Tobin, and today, I’m joined by my colleague Jamie Lincenberg. We will take a look at an important and contested question in copyright law, which is headed to the Supreme Court this spring, on today’s episode of “The Briefing” by Weintraub Tobin.

    Jamie, welcome back, and thank you for joining us today.

    Jamie:
    Thanks, Scott. Happy to be here.

    Scott:
    Jamie, can you tell us more about the topic that we’re diving into here?

    Jamie:
    Of course. In the case of Nealy versus Warner Chappell Music, the Supreme Court will be discussing the question of when the clock starts ticking in the Copyright Act’s three-year statute of limitations and whether a copyright claim plaintiff can recover damages beyond the three years from when the claim was filed. The justice’s decision to hear this case highlights a circuit split on the matter. The case began in 2018 when music producer Sherman Nealy filed a lawsuit against Warner Chappell Music and Artists Publishing Group. It was a run-of-the-mill copyright infringement case in which Nealy claimed that Flo Rida’s 2008 song “In The Sir” featured an unlicensed sample of a 1984 track that Nealy had owned. And now, almost six years later, Nealy’s lawsuit is headed to the Supreme Court to answer the unresolved questions of whether damages in a copyright case are limited to just the last three years before the case was filed or can damages go back for years, potentially dramatically increasing the amount of damages that a plaintiff can recover?

    Scott:
    The debate at the center of the case against Warner Chappell goes back to the case of Petrella versus MGM, when the Supreme Court ruled that the movie studio MGM could be sued for copyright infringement over the Scorsese-directed film “Raging Bull”. Great film, by the way, even though the case was filed decades after the film had first been released in 1980, MGM argued that such a long delay was unfair, but the Supreme Court decided that the Copyright act has a three-year statute of limitations that resets with every new infringement.

    Jamie:
    Yeah, that’s right. Under the court’s interpretation of the law in that case, as long as copies of allegedly infringing material, whether a book or a song or movie, had been sold during the three years prior to the lawsuit, it was ripe for a copyright case. Unsurprisingly, that ruling then led to a burst of infringement cases that had been long delayed, including a high-profile lawsuit against Led Zeppelin over the very popular 1971 song “Stairway to Heaven.”

    Scott:
    But with respect to the awarded damages in the Raging Bull case, the late Justice Ruth Bader Ginsburg stated that a successful plaintiff can gain retrospective relief only three years back from the time of the suit. No recovery may be had for infringement in the earlier years. Profits made in those years remain the defendants to keep. In the years since the rulings in the New York U. S. Court of Appeals for the Second Circuit have abided by that decision, and copyright accusers have not been awarded damages for any conduct past that three-year mark. In 2021, the judge of the Nealy case cited “Raging Bull” and ruled that Nealy was not entitled to damages from earlier than 2015. Nealy said he had only learned of the illegal sample in 2016 and wanted damages dating back to the song’s release in 2008, and the judge cited the Supreme Court’s binding precedent in “Raging Bull” that had explicitly limited damages to the three years prior.

    Jamie:
    That’s true, Scott, but that’s actually not the case in the US Court of Appeals for the 9th Circuit, which covers California and has held that if a plaintiff can prove they only recently discovered the fact that their copyright was infringed, they can seek damages going back all the way to the very first infringement. So we’re talking about potentially decades worth of damages. And earlier this year, the US Court of Appeals for the 11th Circuit overturned that 2021 ruling in the Nealy case. Siding with the 9th Circuit’s approach, the appeals court held that a copyright plaintiff may recover relief for infringement occurring more than three years before the lawsuit’s filing, so long as the plaintiff’s claim is timely under the discovery rule, a rule under which a claim accrues when the plaintiff discovered or should have discovered the infringement. The 11th Circuit stated that the Supreme Court’s ruling in Petrella does not apply the statute of limitation under the discovery rule but only under the injury rule, a rule under which the claim accrues at the time of infringement, and that Nealy’s late discovery of the infringement was an entirely different situation than the one dealt with in “Raging Bull,” and any similar discovery rule cases would be able to seek damages as far back as they want.

    Scott:
    Warner Chappell has now appealed that decision to the Supreme Court, arguing that the discovery rule approach unfairly expands the financial exposure of a copyright defendant and could potentially lead to an onslaught of frivolous and maybe not-so-frivolous lawsuits aimed to extract settlements and that the discovery rule should actually be inapplicable to the case because the statute of limitations commences at the time of the infringement, which is the injury rule, making completion of the cause of action or marking the completion of the cause of action. Additionally, Warner asserts that applying the discovery rule would contravene Congress’s original intent, as language pertaining to the discovery rule is intentionally absent from the federal copyright laws. According to Warner Chappell, an artist publishing group, the plain language of the Copyright Act is unambiguous and says that a civil action must be commenced within three years after the claim has accrued, and the Supreme Court needs to look at what Congress had in mind when they drafted the term accrued. According to Warner Chappell and Artist Publishing Group legal dictionaries, as well as many Supreme Court decisions, support the idea that a cause of action accrues at the time of injury. They also assert that the Supreme Court has already recognized a three-year time limit for copyright plaintiffs to seek relief under the Copyright Act in the MGM “Raging Bull” decision.

    Jamie:
    On the other hand, Nealy argues that this challenge on the discovery rule exceeds the scope of the issue presented to the Supreme Court, as the lower courts already presume the application of the discovery rule in this case, and that introducing a separate damages bar, a cap on damages that can be awarded to a plaintiff in federal copyright cases, would undermine Congress’s purpose, as copyright law does not impose such a bar. So now here we have the two courts that really contain the majority of the country’s creative industries directly divided over how this segment of copyright law works. The case has big implications for copyright heavy industries such as music and film, and will unquestionably affect the scope of infringement cases initiated by copyright holders, as well as alter the burden of proof for each party in future cases. If the Supreme Court ruled in favor of Nealy, it would almost certainly encourage a surge of lawsuits similar to what happened after the Petrella MGM case. And as Nealy’s attorneys argued at an early stage of his case, when it comes to long-delayed copyright claims, the vast bulk of damages will typically fall outside of the three-year limit.

    Scott:
    This means music labels and publishers are also watching this case closely. In brief, the Recording Industry Association of America and the National Music Publishers Association didn’t advocate for either side, but they did urge the justices to take on a case that is vitally important to the music industry. In support of Warner Chappell and Artist Publishing, the Association of American Publishers argues that the discovery rule burdens publishers who face extensive discovery costs and potential exploitation by plaintiffs aiming to leverage settlements. They argue that it is generally difficult for publishers to keep track of the ownership or license relating to photos or illustrations used in the books that they published and that plaintiffs have tried to take advantage of these difficulties to obtain the amount of settlement price that is higher than the actual advantage to the defendant publishers or the lost value to the plaintiffs. On the other hand, the Authors Guild, in support of the plaintiffs, contends that the discovery rule enhances artistic development by safeguarding artist’s rights suggesting that the rule preserves an artist’s ability to sue for infringement that could not have been reasonably discovered earlier by extending the time period for legal action. They point out that the development of the Internet and technology has presented challenges for copyright holders to identify and respond promptly to infringements. About a dozen organizations have also filed amicus briefs in the case, most of them urging the court to at least analyze and provide guidance on the discovery rule and the injury rule at hand.

    Jamie:
    Scott, I’m curious if you have a prediction on how the justices might rule on this case. My inclination is that they will side with the 11th Circuit here in favor of Nealy.

    Scott:
    I don’t like to make calls because I’ve ended up being wrong on so many of them. It’s interesting, though. You look at the plain language of the Copyright Act and it uses the accrual language. It doesn’t use language relating to the discovery rule but rather the injury rule. I think that the Supreme Court’s precedent in the MGM case, the “Raging Bull” case, does set the standard. So I think that the petitioners, Nealy, I think they would have a very tough road to hoe and a tough argument to make and a tough precedent to overcome. I think that the chances are favorable that the Supreme Court may double down on its past decision and hold that the damages that are recoverable are reflective of the limitation period and that you can’t go back further than that. But I’ve been wrong before. The one thing that I will say is if they do find that the plaintiff is able to pursue damages further back than the three-year limitation period, then these cases, as they evolve, will all be about establishing that the plaintiff either knew or should have known of the infringement well prior to the three years running. And with regard to Nealy, I’m sorry, how could Nealy have not been aware of this song in the air? I mean, please. There’s no way that a person that maybe goes to social events or goes to a club or there’s no way or has children in college. There’s no way that they would have been unaware of this song up until when was it? 2015? 2015? 2014? 2015? No way. But I have no concrete proof of that. But that’s just kind of my, well.

    Jamie:
    I might have to stop you there because, and I don’t know all the details of this piece, but there is a portion of time, a few years when Nealy was in jail and was not part of pop culture and wasn’t going to know all the new songs coming out so

    Scott:
    I don’t know. Don’t they? I mean, I think people, I think you’re allowed to have a radio in jail.

    Jamie:
    Never been to jail. I don’t know how it works.

    Scott:
    I don’t know, I think you’re allowed to radio in jail.

    Jamie:
    I think, at the very least, Scott, the invested parties here, whether part of the case or not, are looking forward to at least having some guidance.

    Scott:
    Yeah, I definitely agree that there needs to be guidance. The Supreme Court does need to chime in because what you have now is a race to the courthouse between New York and California. And it depends if you’re the plaintiff or the defendant, and what that doesn’t do, it doesn’t encourage resolution of disputes. What it encourages is a side to quickly file a lawsuit, even if there’s a whiff of some type of dispute, so that they are able to obtain jurisdiction and jurisdiction over a case in a locality that is more favorable to their position. And that doesn’t do anybody any good. So we’re going to have to watch this one really carefully and either it will be status quo or it’ll be a whole new bag for copyright plaintiffs. Jamie, thanks a lot for bringing this to our attention.

    Jamie:
    Yeah, thanks, Scott.

    Scott:
    Thank you for listening to this episode of “The Briefing.” We hope you enjoyed this episode. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. And if you have any questions about the topics we covered today, please leave us a comment.


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