Category: Intellectual Property

Skin in the Game: World IP Day 2019

The theme of year’s World IP Day celebration is sports.  And although I’ve never been what you might call a major sports fan, it does occur to me that the business of athletics is about as IP-rich and environment as one might imagine.  Covering all the bases, as it were, the world of professional sports is steeped in every kind of intellectual property you can name—from broadcast rights under copyright that enable the majority of fans to watch games and events, to trademarks and patents for all that equipment, to publicity rights that popular athletes negotiate for their endorsements of goods and services.  And that doesn’t even include all the IP-related activity spawned by sports like photography, journalism, biography, gaming, etc.

The World Intellectual Property Organization (WIPO) summarizes this year’s attention on athletics as follows:

The global sports ecosystem is made up of a complex web of players and commercial relationships underpinned by IP rights. The strategic use of these rights has, to a large extent, enabled the rapid growth of the global sports industry, and will continue to play a central role in the future evolution of sports in a rapidly evolving and evermore technology-driven landscape. A focus on IP and sports also offers significant opportunities to foster the social, economic and cultural development of all nations.

And that’s all well and good from the thirty-thousand-foot perspective, but perhaps one of the most significant narratives in regard to athletics is not so much that we could unpack all the IP related to the career of Serena Williams or Lionel Messi, but that we might instead recognize the significance of IP for the kid who just signed up for little league or junior hockey or Tae Kwon Do.  Because the likelihood that her parents are going to buy equipment online is quite high, and unfortunately the growth of global e-commerce has also fueled a companion growth in e-counterfeiting.  And right now, the safeguards for that new athlete are inconsistent at best.

A counterfeit jersey is bad for business, but it isn’t going to get anyone killed.  That may not be the case with counterfeit ski boots or a face-mask or padding.  While that comment may seem alarmist, the present condition is that online counterfeiting is already outpacing enforcement—especially for any business that is not yet a mega-brand.  I don’t mean to suggest that the mom buying sporting goods on Amazon for will automatically be presented with counterfeits more often than the real thing, but the probability is increasing that she will see counterfeits alongside the real thing and will not be able to tell the difference.

How often have you shopped for a product online and found what you were looking for at a price that seemed unrealistically low?  That’s because the counterfeiter, most likely operating in China, has infringed the brand’s trademarked logo, infringed the copyrighted photograph of the real product to feature online, and will ship you an inferior-grade knock-off made by some company you’ve never heard of and never will.  Again, if it’s earbuds that don’t work well, lesson learned.  If it’s protective gear, different story.

Unfortunately, neither the current legal frameworks nor prevailing cultural attitudes about online infringement have kept pace with the counterfeiters’ ability to move very fast and break many things.  The narrative that began more than twenty years ago as the alleged “victimless crime” of music piracy today frustrates the urgency to address online counterfeiting of physical goods where the clearly-identifiable victims may be consumers buying inferior products and/or small businesses that can been wiped out by rampant counterfeiting.  (See 2018 article in the Atlantic.)

While Amazon states that it devotes considerable resources to weeding out bogus suppliers—and no doubt they do—the fulfillment giant (along with many other e-commerce sites) remains shielded by 90s-era “safe harbors” that indemnify web platforms for third-party copyright infringement under the DMCA and for third-party harm in nearly all other forms under Section 230 of the CDA.  So, inasmuch as Amazon may indeed be working to mitigate counterfeits, the fact remains that, to-date, the company has no skin in the game.  It’s buyer beware.  Except you will not actually see that warning at the top of their webpages.  

And that point raises one of the most blatant hypocrisies when it comes to intellectual property in the digital age.  As a trademarked brand itself, Amazon et al are a beneficiaries of the underlying value of trademark law, which is to foster consumer confidence.  But the brand identities protected by those marks are anathema to the aforementioned lack of liability when it comes to protecting consumers or the trademarks of the legitimate suppliers that sell their products on their platforms.  

To be clear, I’m not dinging Amazon because they’re so terrible but rather because they are the largest and almost certainly the best in the business.  Removing infringing material from Amazon can be costly and time-consuming, but it’s a cakewalk compared to, say, Alibaba whose obfuscating takedown process is like following assembly instructions written in badly-translated Chinese to English.  But foreign-based sites and trade negotiations notwithstanding, it is time to get our own house in order when it comes to the presumed “neutrality” of web platforms, and WIPO’s attention to sports this year makes a good a case as any for doing so.

E-commerce sites like Amazon, EBay, Wal-Mart, et al are not strictly “neutral highways on which goods travel.”  They are toll roads that collect fees for every transaction, and they have brand names protected by law for the benefit of the consuming public.  While it seems neither fair nor tenable to hold these platforms responsible for every bad actor who slips through the cracks, it is likewise unacceptable to resign ourselves to a lazy policy of saying “cracks happen.”  

In this regard, I am reminded of former Senator Franken’s pointed question to Facebook in November 2017 as to why the company could not connect two dots linking American political ads being paid for in rubles and conclude that there might have been a problem.  By the same principle, we should expect a robust data company like Amazon to identify various yellow flags that would indicate the Rawlings product being offered is not the real deal.  So, while it is certainly true that the world of professional sports is complexly intertwined with every type of IP, sometimes it is the most basic stories that make the best policy arguments.  And what can be more basic than buying your kid a batting helmet?

When Fair Use Threatens the Derivative Works Right

At the same AI and copyright round-table referred to in my last post, Stephen Carlisle of Nova Southeastern University posed this question:  Is the application of “transformative” analysis under the fair use doctrine threatening to extinguish the derivative works right?  This grabbed my attention, partly because it jibed with comments I made in at least two posts about Brammer v. Violent Hues; but for readers who don’t follow copyright law for fun, I’ll try to explain …

Section 106(2) of the U.S. copyright law grants authors the exclusive right to prepare derivative works.  So, the filmmaker who wants to adapt your novel into a movie must obtain your license to prepare a “derivative work” based on said novel (a.k.a the “underlying work”).  If the film creates original visual material, like a creature that might make a cool action figure, the action-figure producer would have to obtain the filmmaker’s license to prepare a derivative work based on that original design. If another party proposes a Netflix series based on minor characters from the novel, that license may remain with you as the original book author; with the filmmaker who made the first adaptation; or be shared depending on certain variables and agreements.

Suffice to say, derivative works are nearly always some use of underlying material in a new context; and  for the purposes of this post, it is fair to summarize the opinion in Brammer as holding that the use of a whole work in a new context from its original purpose was “transformative” under a fair use analysis.  So, because Brammer is an extreme example of a broader effort by certain parties to push the boundaries of fair use, this is what Carlisle was driving at with his comment; and he further noted that the word transform is part of the statutory definition of a derivative work …

A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.”

So, it is not hard see how a misreading of “transformative” in a fair use analysis can end up validating infringement of the author’s derivative works right.  Moreover, once that “transformative” box is checked, the likelihood of finding fair use increases considerably.  This is reasonable enough when a use is made to produce a truly new expression; but when “transformative” becomes synonymous with “placed in a new context,” the courts are in danger of abrogating the foundation of nearly all licensing protected by the bundle of rights vested in the author.

Almost the only check on such a reading of “transformativeness” is factor four of the fair use test, which assesses the commercial nature of the use; and unfortunately, commerciality may be equally misconstrued.  For instance, if monster maker Jordu Schell sculpts an original creature he intends to sell as a limited-edition piece to collectors, his exclusive right under 106(2) prohibits some not-for-profit entity from 3D printing miniature copies of the monster to give away at a fundraising event. 

But based on the flawed fair use analysis in Brammer, the not-for-profit defendant could argue that their use is “transformative” because 1) it is very different from the context of fine-art collectors; 2) because their use was communicative rather than expressive;  and 3) because their use was non-commercial on the basis that they did not sell the figurines.  Prior to all the confusion sown by these squishy “transformative” arguments, any court should easily be able to call bullshit on such reasoning and recognize that the defendant would have infringed Schell’s exclusive right to prepare derivative works.  End of discussion.

Like fair use, the derivative works right was codified in the 1976 Copyright Act, but its emerging principles can be found in caselaw dating back to at least the mid eighteenth century in both the U.K. and the U.S.  With the development of photography, followed by sound recording, motion pictures, etc., new technologies naturally fostered new ways to use the “heart” of an underlying copyrighted work.  And because law is usually slower than invention—let alone a thorough understanding of a new medium—there are several examples throughout the nineteenth century in which one could argue that copyright law was conveniently interpreted beyond statutory rationale to find infringement.

Scholar Oren Bracha offers such an analysis with respect to the case he considers seminal in the development of the derivative works right.  In Kalem Co. v Harper Brothers (1911) the fifteen-minute, silent film adaptation of Ben Hur was held by Justice Holmes to have infringed the authors’ exclusive right to “dramatize” their works under the statutory amendment of 1891.

There are actually a number of moving parts in to this particular case, but simply put, Bracha contends that Holmes stretched the meaning of “dramatize” in order to encompass the very new medium of motion pictures and then shoehorned a rationale to find contributory infringement. “The Kalem decision was thus a crucial transitory moment,” he writes.  The decision’s rationale was already based on the new model of copyright, but its legal reasoning still relied on manipulating the doctrines that were rooted in the the traditional print-bound model.”

One can interpret Holmes’s opinion in Kalem as legislating from the bench (although he did have ample precedent that copyright protects intangible expression*) or as a prescient understanding of copyright’s transition into the technological 20th century.  Or perhaps a bit of both.  That case was decided one year before the category “motion pictures” was added to U.S. copyright law and ninety years before the first Harry Potter movie was released.  And I doubt that anyone today would support Warner Bros. building a mega-franchise based on those books without honoring J. K. Rowling’s exclusive right to “prepare derivative works.”  

Presently, we are in the midst of another transitory period with new technologies allegedly posing new challenges to copyright law.  At least that’s the headline. But I’m not convinced that copyright is nearly so challenged in the 21st century as it was during the 19th.  No matter how one analyzes Holmes’s opinion in Kalem, there is no denying that he was contending with something truly revolutionary that challenged the court to consider the nature of copyright.  By contrast, a lot of tech companies today will liberally appeal to the virtue of innovation as a rationale to circumvent, ignore, or amend copyright law—including the effort to make “transformative” mean whatever serves the interest of the moment. But how many of the major “innovators” have actually invented something that poses new questions about copyrighted works and the exclusive rights of authors?

Returning to Brammer, for example, publishing a photograph on a website hardly requires a major theoretical inquiry in order to compare that conduct to publishing a photograph in a magazine or a brochure.  It’s just a different form of “reproduction” and “display” and should be about ten minutes work for any court.  Likewise, most of the major platforms are just variations on the capacity to display or broadcast creative works through computer networks—a fairly new experience for us as consumers, but not necessarily as groundbreaking from a copyright perspective as the platform owners would have us believe.

The relative novelty of streaming or downloading music and video doesn’t come anywhere close to posting the legal challenges triggered by the seminal technologies invented between the 1830s and the 1890s.  And in case after case, those courts generally tracked the “essence” of the author’s work as it was used in contexts far more exotic than almost any 21st century use trying to bamboozle us with notions of “transformativeness.”

It was out of that extraordinary period of invention—concurrent with the evolution of fair use doctrine—that the derivative works right was given shape and eventually added to the bundle of rights vested in the author.  To date, it seems to me that no technology or model has yet been invented that would justify the fair use doctrine encroaching upon the derivative works right.  Yet if decisions like Brammer are allowed to stand and various tech businesses had their way, that’s exactly what would happen.

*Turner v. Robinson (UK); Daly v. Palmer; Burrow-Giles v. Sarony; et al

Is “Machine Learning” Copying or Reading?

machine reading

I recently attended a round-table discussion on the subject of artificial intelligence and copyright.  The first of several engaging topics I thought warranted a post was the question of “machine learning,” which I put in quotes here with respect to one scholar who admonished against anthropomorphizing AI by using words for human activities to describe the actions of computers.  I think that view is fundamentally correct, though there is also grounds for analogy, as will be made clear by the following premise:

When you read a book, even if we might say, by way of analogy, that you are “copying” the content of that book onto your brain, this clearly does not infringe §106(1) of the copyright law proscribing unauthorized copying.  Since the author naturally hopes that you will read her book, such a prohibition would be absurd, even if you had an eidetic memory and could, if prompted, recite the entire work verbatim.  But if you used that gift to type from memory the entire book and made that document available, you would then violate more than one statute under the copyright law.

So, the question raised in regard to “machine learning” is whether the computer scientist who wishes to feed a corpus of books—say the anthology of American literature—into an AI should be required to obtain licenses for the works still under copyright.  Thus, the first analysis is whether the act of “copying” can be said to occur in this circumstance any more than it would be for the human reader who consumes the same body of literature.

It strikes me that if what the AI does in this case is ingest the corpus of books and almost instantly deconstructs those works by synthesizing them through a neural network, then the computer scientist has a pretty solid argument that no copying has taken place.   If the machine does not retain intact copies of works—or even large sections of works—-with the purpose of making those intact copies available to the human market, then this “machine reading” process is arguably analogous to the human whose reading does not infringe §106(1) of the copyright law.

That said, intent of the computer scientist may be a significant factor.  For instance, if the training of the AI will have a commercial purpose, this may suggest a requirement to license the works under copyright.  But intent can be very tricky on the leading edge of science because it is neither realistic, nor even desirable, to insist that every researcher know exactly where his experiments will lead.  This would nullify the process of discovery whence many great achievements have been made; hence, discovery is justification itself, and I suspect the tech companies would appeal to this rationale in regard to “machine learning.”

If the computer scientist’s goal is to see whether he can get his AI to “learn” about the American experience through literature, but he does not have a particular product or service in mind at the outset, it seems that copyright owners would be on fairly shaky ground to enjoin his use of the books.  As long as nothing that comes out the other end looks like any of the products that went in, it strikes me that this experiment exists beyond the statutory framework of copyright law.

Of course this portrait of the individual scientist beavering away in his modest lab to see what he may discover is not what is taking place in reality. We know perfectly well that major AI experimentation occurs in the R&D labs of companies like Google and Facebook, who are well shielded by trade-secret law from divulging what they are working on or for what purpose.  Like any other corporations, they are free to announce a new product or service without telling the public how they arrived at the latest result.

So, even if the use of copyrighted works as source material resulting in a commercial end might recommend some type of licensing regime, it may be very difficult to identify the threshold when the blind process of scientific discovery becomes a clear intent to exploit a commercial opportunity.  And, as mentioned, these companies would be under no obligation to divulge that eureka moment to anyone.  

On the other hand, the moment Google or Facebook did announce that new product, rightsholders could justifiably complain that a massive, highly-profitable corporation has used potentially billions of dollars worth of material without paying for any of it.  As one scholar at the round-table noted, tech companies may not use raw silicon for free, so why should they get to exploit millions of creative works for free, no matter what they’re turning that data into?

It’s a good question.  One that would seem to suggest a new subsection of the copyright law, and this would certainly be consistent with the fact that new forms of exploitation of works may demand equally new forms of compensation.  If nothing else, that type of statutory response could spare us all the tedious and false harangue that insists “copyright owners just want to stand in the way of innovation.”

That argument prevailed for far too long, and now the so-called innovators have a lot of splainin’ to do about their culture of blind disruption for the sake of disruption. Especially in light of the fact that AI may have some very profound effects on society as we know it, maybe this time around the copyright owners should be treated like experienced voices in the conversation rather than canaries wasting their breath in the proverbial coal mine.