Category: Intellectual Property

The Server Rule Has to Go

section 1201

On September 17, a California District Court dismissed the complaint in Hunley et al v. Instagram, in which the plaintiff class accused the Facebook-owned social platform of “encouraging, inducing, and facilitating third parties to commit widespread copyright infringement” by means of the company’s promotion of its embedding tools. Through Instagram’s marketing the ability for third parties to display images by means of embedding (copying code that points to the image file on Instagram’s servers), Photographer Alexis Hunley et al argue that the platform induces other parties to infringe photographic and other works.

But in order to proceed with an allegation of secondary liability against Instagram, those third party users must be considered alleged direct infringers by the court; and according to Ninth Circuit precedent, parties who cause the display of works by means of embedding (aka “in-line linking”) do not infringe the display right (§106(5)) of the author.

The precedent, written in the case Perfect 10 v. Amazon (2007), is known as the “server rule” because it holds that if a person causes the display of a work by pointing to a location on a server he does not control (i.e. where he has not stored the copy of the work), then §106(5) is not implicated. In a few recent cases, courts in the Second Circuit have held the opposite view, finding, quite reasonably, that when a party causes a work to be displayed by any means, then the work has been, well, displayed. (See discussion in posts here and here.)

So, in Hunley, there was little doubt the district court would be bound by the controlling precedent, but if and when this circuit split is ever resolved, it is the Second Circuit’s reading of the law that common sense must favor. In fact, if the server rule question is ever presented to the Supreme Court, the district court’s five-page opinion in Hunley emphasizes the error in Perfect 10 when it describes that decision as having been based on the “plain language of the statute.” No, I don’t think it was.

Perfect 10 may be a plausible reading of the statute, but it is neither a plain reading nor a particularly sensible or fair one. §106(5) of the Copyright Act protects the author’s exclusive right to “display the copyrighted work publicly,” and any party who displays a work without license (exceptions notwithstanding) is an infringer. The plain-text definition of “display” in §101of the law is “to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process …” [emphasis added]. And just to cover all bases, “copies” are defined thus:

“Copies” are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

Nowhere in these statutory definitions—read independently or interdependently—does the text indicate that while using a “device or process” to cause a public display, the user of a work will only implicate the author’s exclusive right if he displays the copy which he caused to be made of the work. Reading the text as the Ninth Circuit does is a strained and creative interpretation, not a strict one. In fact, as Professors Jane Ginsburg and Luke Budiarjo argued in a 2019 paper, the server rule has been “converting the display right into an atrophied appendage of the reproduction right.”

If we were to apply the server test in any context other than the internet, it would not survive as a defense in court—not even in the Ninth Circuit. In 2007, perhaps the court in Perfect 10 was distracted by the technology and failed to recognize that “finding” a work online and making unlicensed use of it online is not legally distinguishable from doing the same thing in physical space. It should not matter that “in-line linking” happened to accomplish the purpose of display by technologically novel means. And while it is often true that statutory language can be out of step with a new paradigm, that does not seem to be the issue here.

If Perfect 10 were a textually defensible reading of the statute, then the server rule’s abuse on the display right and common sense would be a forgivable legal loophole in need of repair. Instead, it is simply bad law and should be overruled, either by the Ninth Circuit Court of Appeals itself, or by the Supreme Court, if and when that opportunity is ever presented.

Photo: by: AndreyPopov

Fifth Circuit Delivers Maddening Opinions in Bynum Copyright Suit

In the continuing saga of state actors getting away with copyright infringement, let’s look at the story of author/publisher Michael Bynum and his book about the legendary “12th Man” of the Texas A&M University (TAMU) football team. The tale, which has been passed down through generations of Aggies and other football fans, describes the “Dixie Classic” of 1922, when the Texas A&M team sustained so many injuries that it faced a potential forfeit for lack of players. The Aggie coach called upon a sophomore basketball player named E. King Gill, who was watching in the stands, and asked him to suit up and be ready to sub in if needed. Gill did as the coach requested, and although he was never sent onto the field, his willingness to stand at the ready has fed Aggie lore, and Texas A&M marketing, for the past century.

Bynum, who has been a sports historian for 44 years, formed a collaborative relationship with the Texas A&M Athletic Department while working on the story, which he described in an email to me as “the first and only serious effort to tell the full story of E. King Gill.” In 2010, while seeking photographs for the project, Bynum sent a PDF “draft in progress” of his manuscript to TAMU’s Associate Director of Media Relations, Brad Marquardt. The PDF included a notice of copyright and a first chapter, created as a work made for hire (WMFH) by a writer named Whit Canning, whom Bynum had paid to write a short bio about Gill. Then in 2014, in connection with a fundraising campaign, Marquardt not only directed his secretary to retype the Gill Biography and omit the copyright information, but also to edit the byline in order to make it appear as though TAMU, rather than Bynum, had contracted Canning to write that material.

Bynum’s work was then published and distributed by Marquardt and others in the Athletic Department, both physically and online. “At this point the 12th Man Book has not been published because Texas A&M University gave it away to more than 350,000 readers in 2014. The guts of this story has already been read by the key people who would have wanted to buy it (and read it properly),” Bynum says.

So, let’s jump to 2017, when Bynum and his publishing company Canada Hockey, LLC (D/B/A Epic Sports) filed suit against the TAMU Athletic Department, the TAMU 12th Man Foundation, and employees of the Athletic Department, including Brad Marquardt. The allegations included direct copyright infringement, contributory and vicarious infringement, violation of DMCA §1202 for removal of copyright information, and violation of the Takings Clauses of both the Texas State and U.S. Constitutions.

Concurrent Takings Opinions Mired in Theory About the Nature of Copyright

Readers know by now that states and state actors are immunized by the Eleventh Amendment from federal suit and that, in Allen v. Cooper (2020), the U.S. Supreme Court affirmed that Congress lacked the authority to abrogate state immunity when it passed the Copyright Remedy Clarification Act (CRCA) of 1990. Thus, Bynum presently runs into the same wall as any other rightsholder when a state entity like a university commits infringement in violation of the federal statute. Proponents of sovereign immunity argue that denying a copyright owner the ability to bring federal infringement actions against states is not unconstitutional because “alternative” remedies are available, most notably takings claims. But, it is in the Fifth Circuit’s consideration of the takings claims where the court’s pair of recent opinions, both delivered on September 8 (here and here), is infuriating in several ways.

For context, a plaintiff may override sovereign immunity and sue a state or state actor in federal court, if he can demonstrate a constitutional violation and show that there is no remedy available in state court—which together would rise to a violation of due process. Thus, we see copyright holders, who are presently barred from pursuing statutory claims under the Copyright Act, allege that state infringements violate the Fifth Amendment’s prohibition against taking private property for public use without due process.

But in Bynum’s case, particularly because the Texas Constitution’s Takings Clause is more expansive than the Fifth Amendment, the Fifth Circuit opined that Bynum has a path to a remedy in state court and, therefore, TAMU’s immunity from litigation in federal court is not abrogated. This comes on the heels of photographer Jim Olive failing to plea a takings claim under that same clause, as discussed in this post. (Head spinning yet? Hold my beer.)

No person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made. – Takings Clause, Texas State Constitution –

In finding a path to state remedy for Bynum, the court refers to Olive, in which the Texas Supreme Court held that “copyrights are not property” subject to a per se takings claim. But the Fifth Circuit then avers that these plaintiffs could pierce the immunity bubble if, for instance, they were to argue the “damaged” or “applied” prongs of the Texas Takings Clause under the doctrine of a “regulatory taking.” What’s that? (Drink my beer and open another.)

A regulatory taking in a copyright context would theoretically apply where the plaintiff can show, through a multi-factor test, that the value of his property is either “damaged or destroyed” as a result of a state regulation. Not only is this highly speculative—especially after the highest court in the state has already said that copyrights are not property—but what, you might ask, would be the “regulation” in this case? Allegedly, it would be Texas’s own sovereign immunity doctrine in its state constitution. So, is it really plausible that a plaintiff can pursue a regulatory takings claim under any of the prongs of the Texas clause? And, of course, this supposed remedy would vary from state to state. (Skip the beer, open the bourbon).

But the appeals court did not end its analysis by pointing to a door Bynum cannot realistically walk through. Instead, it further observed that, “the Supreme Court has not ruled whether copyrights are property subject to a takings claim, but this is not a subject of first impression here.” What the Fifth Circuit is referring to is Porter v. United States, a 1973 case involving the widow of Lee Harvey Oswald and Oswald’s unpublished writings, in which the court held that “infringement of copyright, whether common law, or statutory, constitutes a tort.” [Citations omitted]. And, at the same time, the opinion in Bynum also mentions that nothing in Texas tort law provides a path to remedy. (Take a shot.)

So to recap, the Fifth Circuit told Mike Bynum that he is barred from a claim in federal court, in part because there is a state remedy available under Texas’s Takings Clause, but only under the doctrine of a “regulatory taking,” which is uncertain at best,[1] and then the court also affirms its jurisdictional position that copyrights are not property subject to a takings claim. Meanwhile, several court opinions since 1973, including SCOTUS in Allen, unequivocally describe copyrights as a form of property.

What is Copyright Anyway?

Now, for the bonus round, raise a glass, and let us consider the same court’s opinion regarding the qualified immunity of Mr. Marquardt pursuant to Bynum’s claim against him. Akin to state sovereign immunity, qualified immunity extends to government officials themselves, and in considering whether Marquardt retains his immunity in this case, the court recites the standard as follows:  “To establish that qualified immunity does not apply, the plaintiff must prove that the state actor (1) violated a statutory or constitutional right, and (2) that the right was ‘clearly established’ at the time of the challenged conduct.”

The court here dismissed Marquardt’s plea for immunity, primarily on procedural and jurisdictional grounds, but I want to call reader’s attention to the use of the word right in both conditional clauses cited by the court. Because the statutory right which Marquardt allegedly violated (and had every reason to know he was violating) was Mr. Bynum’s right to exploit his copyrights.

So, are copyrights property subject to a takings claim? They should be held as such because a) this appears to be only potential remedy to state infringements at present (see Rick Allen v. North Carolina); and b) because copyrights share relevant qualities with other forms of property that can be transferred, protected, or effectively stolen from individuals. But …

Copyright law fundamentally protects an individual’s right to exploit a particular form of property (intangible property) in specific and limited ways. Thus, copyright is a little bit like any other civil right insofar as a court may apply very similar analysis as it would to find that a government official violated a speech or religious right of an individual and is, therefore, not immune from litigation. And, as discussed in my last post, state copyright infringement may also result in compelled speech.

So, it is little wonder the courts are in semantic knots over these matters. It is not uncommon in jurisprudence that copyrights are alternately described as property-like or rights-like in briefs and opinions, but when considering remedies for infringement under the federal statute, that dual identity does not tend to result in dismissal. It is only because SCOTUS held in the 1990s that state infringement claims lead to constitutional collisions that copyright owners today seek a workaround through takings claims, and the courts find themselves delving into the metaphysics of copyright to ask how property-like it is. But how could it be otherwise when considering a remedy most often applied to the taking of real estate for public use?

People of good intent may debate ad infinitum as to whether copyright is more akin to a civil right or more akin to personal property. But for the purposes of due process with regard to state infringements, assuming a claim like Bynum’s winds up at the Supreme Court, that Court should affirm that copyrights are property and that state infringements can be remedied by proving a taking has occurred. It may seem a bit like asking a basketball player to suit up for a football game, but creators deserve a solution when state actors deprive them of the fruits of their labor.

[1] Note that the Copyright Office report on state sovereign immunity also commented that takings claims and other alternatives are untested, and likely inadequate, remedies.

State Copyright Infringement Should Be About Justice

And it’s a shame that justice will not be the basis on which it is corrected. If it ever is.

Recently, the U.S. Copyright Office published its report on copyright infringement by states and state actors in response to the present circumstance whereby states are immunized against litigation for unlicensed use of protected works. As the Supreme Court held in the late 1990s, and affirmed in Allen v. Cooper (2020), Congress lacked the authority, under its Article I powers, when it explicitly abrogated Eleventh Amendment state sovereign immunity in federal suits against states for infringements of intellectual property.

I have written extensively on the background of sovereign immunity, and this post will provide a detailed account of where things stand and how they got that way. But the big bullet point of the moment is that the USCO was asked by Congress to report on the scope and nature of state infringements to discover whether a foundation exists for yet another run at legislative abrogation of state immunity for IP enforcement. The report was requested after the Supreme Court in Allen, even while acknowledging the injustice of the outcome, indicated that any new laws that set aside immunity would have to be based on evidence of widespread “intentional and reckless” infringement by state actors.

Intentional and reckless are evidentiary standards for which stakeholders representing state entities (e.g. university libraries) advocate a high bar that the alleged infringer must be proven to have knowingly made unauthorized use of a work. Conversely, entities like the National Press Photographers of America (NPPA) advocate the lower bar that the alleged infringer must act upon “something more than negligence.” Personally, I tend to think that unless one is somehow unaware that copyright law exists in the U.S., the default assumption should be that using a work without obtaining permission is most likely an infringement.

Too Much Focus on Volume and Frequency

Meanwhile, it seems that a significant injustice in this whole mess is the idea that Congress should be required to gather evidence of a large volume of state infringement presently occurring in order to meet what is called the “congruent and proportional” standard for abrogating Eleventh Amendment immunity in order to protect creators. The principle of the standard is sound enough. For a law to encroach upon a constitutional right, it must remedy a constitutional harm in a manner that is proportional to the injury being done to the first right. And in Allen, the Court held that when Congress abrogated immunity in 1990 for copyright infringement (with the CRCA), it failed to do so based on sufficient evidence of state infringements necessary to meet the “congruent and proportional” standard.

Consequently, it seems reasonable to worry that injustice may be perpetuated as a result of too much emphasis on the volume and frequency of measurable infringements because that is not how laws protecting individual rights are supposed to work. On the contrary, many laws of this nature are often meant to address minority interests in which individual rights may be infrequently yet substantially infringed—as is the case with laws mandating access to public facilities for persons with disabilities.[1] And in addition to the fact that a single copyright infringement by a state actor can do significant economic harm to an independent creator or small business (even causing self-inflicted harm to the state itself), the emphasis on quantity and frequency of infringements nationwide elides a principle beyond economics that has been woefully diminished in the whole state immunity narrative.

It is potentially regressive in many areas of national policy that the Supreme Court determined that Congress’s Article I powers do not extend to abrogating state immunity, even for the purpose of writing explicit and narrowly-tailored federal laws. And I would argue that state copyright infringement is a challenge that emphasized the nature of this dysfunction. Because of all the authorities granted to Congress in Article I, only the IP clause empowers it to pass laws with the express purpose of protecting a unique set of rights secured to individual citizens. And copyright is further distinguishable from its twin, patent law, because most of the works copyright protects are creative, personal expressions that are unavoidably intertwined with the authors’ speech rights.

So, when a state or state actor infringes copyrights, the implications are, of course, financial, but quite often much more than financial. They are acutely felt, unconstitutional violations of individual liberty. So, while I certainly hope that, for instance, Rick Allen prevails in his copyright takings claim in North Carolina, it is at the same time unfortunate that the sovereign immunity narrative is limited to treating copyright as strictly analogous to ordinary property because this view overlooks a fundamental injustice—one that is not ignored in the private sector.

Compelled Speech is an Inevitable Byproduct of Sovereign Immunity

To illustrate the point, imagine the following hypothetical that I wish we could call farfetched:  Imagine a TV commercial or promo video produced by a state-funded entity that uses music without license, written and performed by feminist icon Beyoncé, to endorse Texas’s draconian anti-abortion law. Not only would the state actor have committed prima facie copyright infringement, but any reasonable observer would consider this use of the artist’s music to be an even greater crime of compelled speech. When creative works like music are used via compulsory license at political rallies, compelled speech may occur in those instances; but in a case in which a state-funded entity or state-employed individual uses a work to convey a specific message to which the creator(s) may be profoundly opposed, the speech infringement argument is even stronger.

As I say, I wish this was an unrealistic hypothetical, but the current state of our politics indicates that it is not. And I concocted the Beyoncé scenario to draw attention to the kind of personal, and not merely financial, injury that nearly any creator experiences when her work is misused. One could easily reverse the narrative and imagine a Christian rock band’s music appropriated to endorse abortion rights, and the principles would be the same.

But, of course, most creators are not Beyoncé. They are small, independent authors of works, and the more likely scenario is one in which, perhaps a photograph is used to endorse a message with which the photographer disagrees. Unless the photographer and photograph are quite well known, the compelled speech argument would be more difficult to make, though it would still be felt by the creator of the work. In fact, in the NPPA’s written comments of September 2 to the Copyright Office, the organization stated the following:

Simply put, with state sovereign immunity for copyright infringement, states are free to present and promote their messages by using copyrighted works against the wishes of the journalists and artists who created them. A state that opposes same-sex marriage, for example, could use the images taken by a wedding photographer to promote its position on “family values.” Each infringing use of imagery, if committed by a state actor, would amount to unconstitutional forced speech.

But in any similar circumstance other than a state infringement, the author is able to enforce her copyright rights to prevent a use of which she does not approve, whether for creative, cultural, financial, or political reasons. It is, in fact, not necessary for an owner of a work to provide a reason to take enforcement action against a clear case of infringement or to deny permission to use a work in a certain way.

As was widely discussed seven years ago, the Beastie Boys sued toy company GoldieBlox for using one of their songs for the simple reason that the band does not want its music used for advertisements of any kind.[2] And no further explanation is required. So, if a commercial entity can be prevented from using a protected work to engage in speech the author chooses to shun for any reason, it should be imperative that a state actor must be equally restricted from engaging in compelled speech, as this is an unequivocal violation of the First Amendment.

So, with regard to the congruent and proportional standard, copyright infringement should not be viewed solely in terms of financial harm or through the limiting metrics of volume and frequency. It should instead be understood that copyright is unique by conferring property-like ownership in the products of individual expression, which are simultaneously protected by another (and many feel the most sacred) constitutional right. Hence, any perceived injury to the Eleventh Amendment (historical debate on its meaning notwithstanding) should be substantially overwhelmed by the amount of constitutional heft embodied in the principles of copyright.

[1] The USCO report cites Tennessee v. Lane and the abrogation of immunity to enforce the Americans with Disabilities Act.

[2] At least it did not at the time. I have not checked to see if the Beasties have since changed their policy.