When Copyright Goes Bad

Consumers International produced a video called “When Copyright Goes Bad,” which discusses current issues arising from technology that allows for easy copying of copyrighted works and copyright laws.

9th Circuit Court Finds Software Coder was an Employee & Employer Owns Copyright on Code

JustMed, Inc. v. Byce is a copyright case decided by the Ninth Circuit Court of Appeals.  It involved the question of who owned the copyright to software code created by Michael Byce – Micheal or JustMed, Inc.?  The general rule of copyright law is that the creator of a work owns the copyrights to the work.  Michael was the creator of the software code in dispute so he claimed he owned the copyrights to the code, which he took with him when he parted ways with JustMed.

There are two exceptions to the general rule of copyright ownership:

  1. The work is created by an employee who created the work within the scope of the employee’s employment.  When this occurs, the employer is the owner of the copyrights for the work.  For example if Disney hires Bart Simpson to draw images for a new cartoon movie, Disney owns the copyrights to the works that Bart creates for his job.
  2. The work is created under a contract called a “work for hire” agreement in which the creator of the work agrees in the document signed by the creator that the other party to the agreement owns all copyrights to the works created pursuant to the work for hire agreement.  This is a contract that everybody should use when hiring somebody to take pictures, write copy, design websites, create images or write software.

In JustMed, Michael claimed he was an independent contractor and therefor the owner of the copyrights to the softwared.  JustMed argued that Michael created the code as an employee of JustMed within the scope of his employment and therefor it was the owner of the copyrights.  The Court found that JustMed was the owner of the copyright even though it did not dot the “i”s and cross the “t”s with respect to properly documenting the employer / employee relationship.  The Court said:

“As a small start-up company, JustMed conducted its business more informally than an established enterprise might. This fact can make it more difficult to decide whether a hired party is an employee or an independent contractor, but it should not make the company more susceptible to losing control over software integral to its product.”

Reading between the lines it appears to me that the employer won because when it looked at the big picture it found that the employer was a software development company, Michael’s sole task was writing software code for the company and the employer paid him for the services.  The Court found that Michael created code within the scope of his employment and therefor JustMed owned the copyrights to the code Michael created.

The employer could have avoided the lawsuit and the problems with the coder if it had required the coder to sign a work for hire agreement.  If you are hiring somebody to create copyrightable work and need a work for hire agreement or an employment agreement that contains copyright language the protects your ownership of the copyrights, call me at 602-906-4953, ext. 1.  I prepare these types of agreements.

See the Court’s opinion.

Group Plans 50,000 Copyright Infringement Lawsuits Against Movie Downloaders

THR, Esq.:  ” more than 20,000 individual movie torrent downloaders have been sued in the past few weeks in Washington D.C. federal court for copyright infringement.  A handful of cases have already settled, and those that haven’t are creating some havoc for major ISPs.  The lawsuits were filed by . . . the US Copyright Group, on behalf of an ad hoc coalition of independent film producers.  So far, five lawsuits have been filed against tens of thousands of alleged infringers . . . .”   See the complaint filed in one of the lawsuits.

Obama Doing Congress’ Job & Working In Secret to Expand Copyright Law

The Washington Post published an article on March 26, 2010, called “Anti-counterfeiting agreement raises constitutional concerns.”  The authors are Harvard Law School professors  Jack Goldsmith and Lawrence Lessig.  The article starts:

“The much-criticized cloak of secrecy that has surrounded the Obama administration’s negotiation of the multilateral Anti-Counterfeiting Trade Agreement was broken Wednesday. The leaked draft of ACTA belies the U.S. trade representative’s assertions that the agreement would not alter U.S. intellectual property law. And it raises the stakes on the constitutionally dubious method by which the administration proposes to make the agreement binding on the United States.”

This Anti-Counterfeiting Trade Agreement is a big deal.  If President Obama signs an executive order agreeing to ACTA , copyright law would be substantially changed without any input from Congress.  The United States Constitution provides that Congress makes U.S. law and the President enforces those laws.  President Obama intends to make law and enforce it and bypass Congress altogether.  This is the subject of the Washington Post article.

For more on this important topic, including some of the proposed new copyright laws contained in the current version of ACTA, see Temple Law School Professor David Post’s article on ACTA called “Outrageous Treaty Nonsense, or The Copyright Tail Wagging the Internet Dog.”  See also Public Knowledge on ACTA and the Electronic Frontier Foundation on ACTA.

ISP Not Liable for Customers’ Illegally Downloaded Movies, Court Rules

Bloomberg:  “Hollywood’s biggest movie studios, including Walt Disney Co. and Paramount Pictures, lost a suit seeking to stop customers of Australia’s Iinet Ltd. from illegally downloading movies in a ruling that may set a precedent for the industry.  Iinet, Australia’s third-biggest Internet service provider, didn’t authorize copyright infringements and shouldn’t be held liable for the actions of its customers, Justice Dennis Cowdroy told the Federal Court in Sydney today, as he dismissed the suit.  The suit, led by Village Roadshow Ltd.’s Roadshow Films, sought to stop Iinet customers from using BitTorrent software to download films . . . . “

See “Film industry loses iiNet download case.”

Award Cut to $54K from $1.92M in Music File-Sharing Case

Information Week:  “A Minnesota woman fined nearly $2 million for illegally downloading music has seen the fine reduced from that ‘monstrous’ amount by a U.S. District Court judge who dropped the fine to $54,000.  Jammie Thomas-Rasset, a single mother with four children, said she is seeking a way to have the fine — leveled after she lost a case with the Recording Industry Association of America — reduced even further. . . . In his opinion, Judge Michael Davis said, ‘The need for deterrence cannot justify a $2 million verdict for stealing and illegally distributing 24 songs for the sole purpose of obtaining free music’.”

Digital Piracy Hits the E-book Industry

CNN Tech:  “When Dan Brown’s blockbuster novel ‘The Lost Symbol’ hit stores in September, it may have offered a peek at the future of bookselling.  On Amazon.com, the book sold more digital copies for the Kindle e-reader in its first few days than hardback editions.  This was seen as something of a paradigm shift in the publishing industry, but it also may have come at a cost.   Less than 24 hours after its release, pirated digital copies of the novel were found on file-sharing sites such as Rapidshare and BitTorrent.  Within days, it had been downloaded for free more than 100,000 times.”

Gary Fung’s Torrent Sites Liable for Contributory Copyright Infringement

The Digital Media Lawyer Blog:  “The copyright infringement claims brought against Canadian Gary Fung and his .torrent sites have at last been resolved. On December 21, 2009, Judge Wilson of the Central District of California found Fung and several of his .torrent sites liable for inducement of copyright infringement.  Wilson’s decision was based largely the same grounds on which other operators of peer-to-peer filing sharing were found liable in Grokster, Napster and Usenet.  To be liable for inducing copyright infringement, a defendant must have knowledge of another’s infringement and undertake purposeful acts aimed at assisting and encouraging this infringement. . . . This means that the plaintiff must first show that there has been an act of direct infringement by third parties. . . . In the case of peer-to-peer filing sharing, infringement can occur both when a copyrighted work is uploaded (this violates the copyright holder’s distribution right) and when it is downloaded (this violates the copyright holder’s reproduction right).”

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