Artists Making Merch Should Avoid Copyright Confusion

Ars Technica posted an article last month about copyright and tee shirt design that, in my view, jumps past the real story and may confuse a few independent artists out there that they’re operating in some new realm of IP law.

The internet industry sells a message of opportunity, and it is absolutely true that the combination of e-commerce platforms and on-demand production does create new avenues for creators to earn revenue from their work. Willie Clark’s article describes a network of artists who are currently making at least a portion—if not the lion’s share—of their living from the sale of tee shirts that feature their original designs. All good.

But in a world without copyright protection, there is not much to stop either a sole actor or a predatory website from appropriating the artists’ designs and selling tee shirts or other merchandise by leveraging exactly the same tools available to the artists. Clark cites a few artists who are quite sensitive to this issue; and in my view, this is one of the major challenges of internet economics: it assumes everyone will behave ethically, and when they don’t, the tools easily enable cannibalization of the very same opportunities they create.

Clark’s real focus is on the legal status of sites and/or artists in cases where high-profile, corporate-owned IP may be involved. He asks, “If big media has legal muscle, why can you buy Link racing Harley Quinn on a shirt?” Okay, that’s a sub-head, and Clark can be forgiven for not quite answering the question—especially because there isn’t a general answer other than to say that if you go printing merch with copyrighted material belonging to major rights holders, be careful. Clark writes the following:

“While there hasn’t been a high-profile case involving a big pop culture IP and an online T-shirt company yet, there have been similar situations. Mitch Stoltz, senior staff attorney with the Electronic Frontier Foundation, pointed to one court case where T-shirts overall had been tested. And in Kienitz v. Sconnie Nation, LLC, the court ruled in favor of a shirt that used another photographer’s photo as the basis for the design.”

The indie artist should not be confused by this statement into thinking that the internet-spawned tee shirt trade has entered some new gray area of copyright law. For one thing, in the Keinitz case cited, the tee shirts are barely relevant. The appellate court refers to the substantial amount of alteration made to an original photograph and to the lack of potential market harm to the original in affirming fair use. The image at issue could have been fixed onto any medium, and the legal considerations would have been almost identical. But, if the tees had served as a substitute for the rights holder’s licensed—or potentially licensed—merchandise, that would be a very different story, which brings me to the next quote.

“Stoltz also mentioned one other reason companies may be OK with leaving such sites operational: free advertising. ‘This is free marketing for them, and they know it,’ Stoltz said. ’It’s not really good marketing strategy to go suing your fans and the websites that they like to use.’”

This is a familiar refrain from the EFF, and from the larger community of copyright skeptics and outright antagonists. This idea that appropriation serves as free advertising is, for instance, a common rationalization for large-scale piracy. But it’s not an argument that actually carries much weight with most rights holders, least of all the majors. So, if you’re an independent artist, considering making a tee with a Harley Quinn-based design on it, I would not take this “free marketing” message to heart because it almost certainly is not how rights holder DC Comics will consider the use.

A fair use of an illustrated character really has to comment upon the work in a way that goes beyond mere re-interpretation. Otherwise the use on a tee shirt will very likely be seen in court as counterfeit merchandise—an unlicensed “display” of a protected work. Moreover, characters are very often covered by trademark and copyright, which gets into a whole other set of motivations for the owner to consider enforcement. For instance, trademarks must be enforced or they can be lost, which is not true of copyright.

Likewise, the discussion of the DMCA in the Ars Technica article can be confusing because the DMCA has no bearing whatsoever in the trademark universe and, as Stoltz is correctly cited, has no authority in the world of infringements beyond cyberspace. Tee shirts and other merch are physical media, so the artist, the site, and/or the manufacturer could be liable in a context that has nothing to do with the digital market.

It is certainly true that fair use exists in order to allow artists to comment upon copyrighted works without the rights holder’s permission, and commentary is a critical part of creativity, social discourse, advocacy, etc. But merch can be tricky, and unless artists want to spend more time thinking about fair use doctrine than making art, it’s probably better to focus on creating original expressions. And apropos of the top of this post, it would be far more beneficial to the creative community—and society—to figure out how independents can better protect their rights in the digital market than it would be to keep looking for ways to use works belonging to other rights holders.

Angels and Monkeys at Appeals Court

Photo sources by artush & prudkov

Readers can be forgiven for focusing on court news other than copyright stories these days, but lest you think all the fun is emanating from the White House, here are two items of note this week…

VidAngel Appeals Injunction

The Ninth Circuit, in the spotlight for ruling against Trump’s executive order known as the travel ban, heard oral arguments on June 8 in the Disney v. VidAngel case. As described in this post, VidAngel’s business model is effectively a Video On Demand (VOD) service that provides filtering for consumers who want to see mainstream fare without “objectionable” scenes that might include sex, nudity, profanity, blasphemy, and (I don’t know) rainbows?

The studios sued on the grounds that VidAngel’s model violates the rights of reproduction and public performance under Section 106 of the Copyright Act as well as prohibitions against “ripping” DVDs under Section 1201 of the DMCA. VidAngel has tried to argue that its business model is legal because its customers have the right to “filter” under the provisions of the Family Home Movie Act (2005). In December of 2016, the District Court for the Central District of California granted an injunction, pausing VidAngel’s activity, holding that the studios would be expected to prevail on the merits across all triable issues. VidAngel then appealed that injunction to the Ninth Circuit.

As Ashley Cullins reports for The Hollywood Reporter, a hot mic captured Judge Carlos T. Bea whisper to his colleague Andrew D. Hurwitz, “I think this one’s a lot easier,” meaning, of course, in contrast to the travel ban debacle, but quite possibly indicating that the District Court’s injunction will be allowed to stand. Attorney Donald Verrilli, counsel for the studios, stated, “What they’re essentially saying is ‘if we filter, we can stream without a license.’” And that about sums it up. Meanwhile, he also was clear to state that his clients are not opposed to filtering as permitted by the FMA, adding that technology provider ClearPlay, which enables home filtering, filed an amicus brief on behalf of the studios.

Assuming the injunction is sustained and the case is remanded for trial, it will be interesting to see if VidAngel’s executives decide that their evangelical mission is more important than a return on investment. Because it seems quite clear that there is nothing legal about their business model.

Who Knew Copyright for Monkeys Was Still in Play?

In a more extreme example of ideologically-charged litigation, also on appeal at the Ninth Circuit, it turns out that the organization PETA (People for the Ethical Treatment of Animals) is still ape over the idea that a primate can own a copyright. For anyone who missed it, the animal rights organization, in September of 2015, sued British photographer David Slater and US publisher Blurb on the grounds that both had infringed the copyrights of a Sulawesi black crested macaque who apparently snapped her own photograph with Slater’s camera. Under the circumstances, Slater’s copyright ownership of the image was called into question by the Wikimedia Foundation and was debated online—in good faith and bad—by various constituencies.

In my view, Slater’s claim has merit if, as described on his blog, he purposely set up the camera and used what he’d learned about the monkeys’ curiosity to create the conditions for the selfie to be made. He writes …

“I put my camera on a tripod with a very wide angle lens, settings configured such as predictive autofocus, motorwind, even a flashgun, to give me a chance of a facial close up if they were to approach again for a play. I duly moved away and bingo, they moved in, fingering the toy, pressing the buttons and fingering the lens. I was then to witness one of the funniest things ever as they grinned, grimaced and bared teeth at themselves in the reflection of the large glassy lens.”

Based on American case law to date, this non-attorney thinks that should be sufficient to hold that Slater owns the copyright, whereas if the camera were in fact picked up serendipitously by the macaque and snapped—conditions that would almost never produce the image in question, by the way—Slater’s claim would probably be very weak under U.S. law. Regardless, only PETA would think to argue that the monkey herself can own a copyright; and in their complaint, they relied on the testimony of primatologist Dr. Antje Englehardt as a “next friend” of the monkey plaintiff.

As of last week, however, counsel for the defendants have stated that PETA should be viewed by the court as lacking the standing to represent the macaque’s interests in light of the fact that Dr. Englehardt was recently arrested for harassing PETA’s lead counsel. “Regardless of the merits or outcome of the criminal case against Dr. Engelhardt,” write Slater’s attorneys, “its very existence is a relevant consideration on whether PETA can adequately represent the interests of Naruto,* notwithstanding the documented animosity that has developed between PETA and Dr. Engelhardt.” Okay but…

A “next friend” in common law is a person who represents another person because the latter is either a minor or has been deemed incompetent—not because he/she has been deemed a monkey! While pundits like Mike Masnick at Techdirt focus attention on the non-existence of any copyright in the “monkey selfie” (which is debatable as described), what is unquestionably non-existent in this case is any animal’s standing to enforce a copyright in U.S. court.

This was made quite clear when Judge Orrick of the California District Court for the Northern District stated that he could find no evidence in the statute that animals are entitled to own a copyright in the United States. That ought to about settle the matter. Because, frankly, whether one takes a utilitarian view of IP, a natural rights view, or some combination of the two, Orrick’s holding should seem forbiddingly tautological for most plaintiffs, even those with the anthropomorphic zeal of PETA.

*PETA has named the macaque “Naruto,” though Slater states that the monkey is a female others have named “Ella.”

Can We Ever End Legalized Piracy?

Creators of every stripe must watch Miranda Mulholland’s May 24th speech delivered to the Economic Club of Canada. The musician, composer, and label-owner, with nearly 20 years of professional experience, does an excellent job of contrasting the realities of being a professional creator in today’s market against the rhetorical promises of the corporate leaders who designed that market. In addition to answering some of the classic tech-utopian “advice”—adapting, selling CDs at venues, touring, etc.—Mulholland focuses broadly on the subject of accountability and the fact that what we normally call “piracy” occurs on legal platforms. She says …

“Let’s look at the biggest music service in the world – YouTube. Did you know that 82% of YouTube users use it for music? It is supported by advertising and it is based on user uploaded content. But wait. Running a commercial site based on unauthorized uploading of copyrighted music is illegal, right?

YouTube says, it isn’t our fault – we are just the shop window. We didn’t put the items in the window, so we are not accountable for them. We are a passive intermediary. We are not liable for this massive copyright infringement.”

Because YouTube is currently a mix of licensed and unlicensed music, it is hard to get a fix on the percentage of infringing v. non-infringing uses. Anecdotally, though, musicians like Mulholland tell this story time and again. Still, she hardly asserts that business should return to the way things were before the digital revolution but instead looks forward, recommending specific actions that artists, industry, consumers, and government can take to get the formula right. And with very subtle differences, what’s good for Canada is good for the U.S. Her top item for government: End Tech Company Safe Harbors. (Okay, they spell it harbours up there.)

As has been widely reported by countless independent artists as well as large rights holders, the intended balance in the provisions of the 1998 Digital Millennium Copyright Act was soon overwhelmed by the unforeseen volume of copyright infringement on legal platforms. And because the largest of these platforms YouTube is part of a $700 billion-dollar empire called Google (Alphabet), litigation is an economic non-starter. Moreover, the major rights holders remain in an awkward limbo comprising negotiated deals with YouTube while still sending millions of notices of infringement of their works on the site.*

Since 2015, the US Copyright Office has been conducting a review of the DMCA; and many artists and creators have for several years been advocating some type of Take Down/Stay Down provision. One way or another, based on the case law to date and the financial power of providers like Google, it does seem as though only legislative action can recalibrate the intended compromise with rights holders by, among other things, clarifying the statutory conditions a service provider must meet in order to retain the liability shield known as the “safe harbor.”

Of course consumers will be told—and have been told—that any revision to the safe harbor conditions in the DMCA will destroy innovation, free speech, and the internet itself. We know the play. The Internet Association, along with “digital rights” activists like EFF will come out in full force against any proposed change. And they will all claim to be acting on behalf of consumers. But the bottom line is this: the DMCA presently enables massive corporations to grind up the dreams and labors of independent creators; and over time, consumers who want new works—or who wish to become creators themselves—will very likely find themselves part of the piling dust.

Based on just a sampling of the anecdotal experiences described by rights holders, both large and small, who attempt to use DMCA for enforcement, it is very likely that YouTube would be found to have already abrogated its “safe harbor” shield through non-compliance with one or more provisions of the DMCA as written. Of course, for us to prove this, somebody would have to file a new copyright infringement claim against the company, and that won’t happen—not because a plaintiff would lack standing on the merits, but because Google is simply too big to sue. Ironically enough, though, the perception endures that the 300lb gorillas in this story are still Hollywood and the recording industry.

Viacom v. YouTube Is Unfinished Business

Readers probably remember that ten years ago, when YouTube was new, and only recently acquired by Google for $1.65 billion, the video platform was sued for infringement and vicarious infringement by a class of rights holders led by Viacom. In 2010, the District Court granted a summary judgment in favor of YouTube, holding that the platform was entirely shielded by §512 of the DMCA; but on appeal in 2012, the Second Circuit called the lower court decision “premature,” finding that there were several triable issues of fact, and remanded the case back down.

Because the parties settled in March of 2014, just days before a new round of oral arguments was scheduled back at the Second Circuit, we’ll never know whether or not the rights holders would have been able to demonstrate to a jury that YouTube was failing to comply with key provisions in the DMCA and thus forfeit its safe harbor. What we do know is that Viacom had provided evidence that YouTube’s founding executives, in its earliest days, were making calculated decisions to not remove material they knew to be infringing because the content was driving traffic. We also know that the circuit court held that there were statutory issues warranting further discovery where YouTube might have been found wanting in holding up its end of the DMCA bargain.

The circuit court opinion also cites YouTube’s own internal audit at the time, which revealed that 60% of its content was copyrighted content and that only 10% of that material was authorized. So, it is no exaggeration to say that while the Viacom case dragged on, YouTube grew its dominant position on the backs of creators, who were involuntarily “sharing” their work for no return.

Since 2010, the platform has grown from 24 hours of video uploaded every minute to 300 hours every minute; and the assumption has been that a service provider cannot know, amid all that material, what is and is not infringing. Indeed, one of the formative principles of DMCA was that ISPs would not have to affirmatively monitor for infringement, but would instead be required to respond to each individual infringing use upon notification by the rightful owner of the copyright.

The flaw in this mechanism is now obvious and its consequences for creators are clear. A platform like YouTube is able to monetize infringements at warp speed while responding to claims at the pace of a horse and buggy by contrast—all while generating so much ad revenue that the company becomes untouchable via litigation. At the same time, shielded from liability for mass infringements on its own platform, YouTube enjoys an aggressive bargaining position that has enabled it to pay far lower rates than competing services for those works they do license.

There is a disconnect between the intent of the DMCA and the manifest reality. And what’s falling through the statutory cracks are the middle-class livelihoods of thousands of creators like Miranda Mulholland. Meanwhile, the promise that digital-age models replace old models for the artists who learn to “adapt” has been consistently disproven by creators who have actually done everything the digital gurus told them to do.

I suspect the prospect of ending safe harbors, as Mulholland proposes, is a non-starter. The principle of limiting liability for sites hosting User Generated Content remains sound; and it cannot be discounted that a site like YouTube must also manage an appeals process for wrongful claims against creators who build successful channels on the site and do not carelessly infringe copyrights. Nevertheless, it cannot be denied that YouTube walks, talks, bargains, and earns money like a very actively-managed distribution network rather than the “dumb pipe” they claim to be when threading the loopholes of the DMCA.

While digital rights activists criticize every possible solution—from voluntary measures to legislative amendment—the fact is we now have 20 years worth of data not available to the authors of the DMCA in 1998. These data show what artists like Miranda Mulholland have tried repeatedly to explain on the most human level—that they’re getting clobbered by an industry making fortunes from their labor. Copyright law has always had to evolve when confronted with new technologies and new paradigms. And in context to the lifespan of the public internet, the DMCA is ancient history.

*The irony is not lost on me that Mulholland’s video is best shared via YouTube, but that’s part of the challenge. They’re pretty much the only game in town.

The Illusion of More

Dissecting the digital utopia.

Category: Copyright