Wednesday, April 2, 2014

The “It”s Complicated” relationship between social media and Australian copyright law - Can the ALRC’s fair use exception help?


by Amanda Parks (Australia)

Following Oxford Dictionaries’ decision to crown “selfie” as “Word of the Year” for 2013, we saw a particularly famous one “break” Twitter and spark a copyright debate earlier this month: Oscars host Ellen Degeneres shared a star-studded photo that was retweeted over 2 million times in 2 hours.

Questions quickly arose about why the Associated Press sought her permission to share it when it was Bradley Cooper who pressed the button.


What happens on social media is a hot topic in any discussion about how copyright laws do and should operate in the online world.

Last month, the Australian Law Reform Commission (ALRC) concluded its 18-month enquiry, Copyright and the Digital Economy (ALRC Report 122), in which it considered whether and how the Copyright Act 1968 (Cth) (Act) should be updated to account for developments in the digital sphere.

While the sharing of content on networks like Facebook and YouTube has spread with great contagion, many social media users do not realize that their activities may involve breaches of copyright (however harmless those breaches may seem to some). Copyright concerns can arise when users share, as they often do, content constituting or incorporating all or part of someone else’s material.

Consider these two recently-observed examples:


Example 1
Facebook User A posts a status update in the following terms: “Where do you guys find all of your great cover photos? I often see things that I like when I’m browsing the internet, but I don’t want to infringe copyright.”

Facebook User B responds: “If it’s on the internet and it’s not watermarked, it’s fair game”.

Within a day, User A has thanked User B for the “advice” and replaced her old photo with an image that has almost certainly been copied from a website.

Example 2
Another Facebook user celebrates Australia Day by posting an artist’s creative image of the Sydney Opera House to her personal page, with the following comment: “Taking this opportunity to share some love through art. If you like this post, you will receive an artist and will need to post an image of his/her art. Let’s share some art love.”

Predictably, this receives several “likes” from other users who continue to post the works of their allocated artists, and so the snowball rolls on.

Most likely, these Facebook users would be found to have infringed copyright in the works they shared because their conduct does not fit within an existing fair dealing exception, such as use for the purpose of criticism or review (sections 41 and 103A) or parody or satire (sections 41A and 103AA). Equally likely is the probability that they are completely unaware that their conduct infringes others’ rights. These examples illustrate the point often made by proponents of fair use; there is a disconnect between what the law actually allows and what many assume it allows.

Some argue that such content-sharing activities should not constitute infringement, and Australian laws should better reflect the public’s expectations and the realities of being online. So, would these activities constitute infringement under the ALRC’s proposed fair use exception?

The proposed exception

In its Final Report tabled in Parliament on 13 February, the ALRC recommended that the existing fair dealing provisions be replaced with a flexible fair use exception that should include:
  • An express statement that a fair use of copyright material does not infringe copyright.
  • A non-exhaustive list of “fairness factors” to be considered in determining whether a use is fair, being the:
    • purpose and character of the use;
    • nature of the copyright material;
    • amount and substantiality of the part used; and
    • effect of the use upon the potential market for, or value of, the copyright material.
A non-exhaustive list of illustrative uses or purposes that may qualify as fair use, including (among others):
  • criticism or review;
  • parody or satire;
  • reporting news;
  • quotation; and
  • non-commercial private use.
“Social use” was deliberately excluded from the “illustrative purposes” list; the ALRC considered that social use will often not be fair, particularly where it harms rights holders’ markets and is not “transformative” (meaning use for a different purpose than that for which the material was created).

The ALRC also clarified that social use should not be interpreted as falling within “non-commercial private use” because many social uses are not private (citing as examples the acts of sharing copyrighted songs or videos on YouTube or Facebook).

Nevertheless, the ALRC indicated that certain social uses of copyright material (particularly transformative uses) may be fair, such as use for the purpose of creating and sharing user-generated content.

A particularly popular type of user-generated content is the meme, a classic example of which is “Grumpy Cat.” For those who missed this, it involves a photo of a cat overlaid with varying comedic captions playing on the cat’s less-than-impressed facial expression.

Currently, the act of sharing “Grumpy Cat” with 800 Facebook friends might be an exception to infringement if it can be viewed as a parody or satire, but not all memes can be so classified.

Under the proposed fair use exception, there would be more scope for this to be considered an exception, as the primary question would not be whether the meme is a parody or satire, but rather, whether the use of the relevant copyright work is fair.

Ultimately, the ALRC concluded that social use must be considered on a case-by-case basis by reference to the fairness factors.

Commentary

It is unclear when the government will formally respond to the ALRC’s Final Report, but Attorney General George Brandis delivered a speech to the Australian Digital Alliance on 14 February in which he said he remains unpersuaded that a fair use exception is the best direction for Australian law (though he maintained that he will “bring an open and inquiring mind to the debate”).

As content-sharing on social media is unlikely to abate, copyright owners should evaluate how, or whether, to take action. Some might consider taking proactive steps to prevent their content from being shared, such as displaying copyright notices on websites or applying watermarks to images.

Others may actually benefit from having their work shared on social networks; there is arguably no better advertising and no faster way to be “discovered.”

Those eager to share their work may want to consider making it available via Creative Commons; there are several standard licences which allow artists to select the terms upon which they are content for their works to be shared, and help to ensure that those who make their works available are appropriately credited.

While we wait to see whether the proposed fair use exception will become law, it is worth evaluating whether something can be gained by swimming with, not against, the social media current.

Similar moves afoot in the United Kingdom


by Jonathan Ball (United Kingdom)

Under the current UK law, largely contained in the Copyright, Designs and Patents Act 1988 (the “CDPA”), defences to copyright infringement are limited to the so-called “fair dealing” exceptions that are very similar to the current law in Australia, and similarly narrowly construed, such that the act complained of must fall within the scope and purpose of those acts set out in the relevant sections of the CDPA, and must also be “fair.”

If the act does not fall within one of the defined exceptions set out in the CDPA, it will be deemed unlawful no matter how “fair” the act may be.

The Hargreaves Report in November 2010, which had been commissioned by the UK government to investigate updating of UK law in part to cope with modern technology recommended additional copyright exceptions and building adaptability into the legislation to allow it to cope with future technologies not currently envisaged, but it did not endorse a move to an open ended US style “fair use” doctrine.

On 27 March 2014, the UK Government published draft statutory instruments which include exceptions for parody, personal copying, text mining, and further exceptions to expand the current exceptions for research and education.

Although these new exceptions aim to improve the current situation where minor acts of copying which benefit consumers, society and the economy are currently unlawful, they do not amount to open ended principles based exceptions.

The exceptions within these statutory instruments will become law on June 1, 2014, assuming both Houses of Parliament affirm them.

Friday, March 28, 2014

Suburban Melbourne soccer club takes on Manchester City over Melbourne Heart rebrand


by Eliza Danby (Australia)

Manchester City’s takeover and proposed reinvention of the beleaguered Australian A-league club Melbourne Heart has excited soccer fans across the city, but one portion of the population is less than impressed. A suburban club that has competed as “Melbourne City” for over two decades looks likely to face a David and Goliath like struggle if it wants to keep using its team name.

Steps taken by Manchester City indicate it wants to use the name Melbourne City, instead of Melbourne Heart, as part of a total brand overhaul that includes a change in coach, uniform and colours. Related entities of Melbourne Heart’s new owners recently lodged an application to register the business name “Melbourne City FC”, purchased the domain name MelbourneCityFC.com.au and applied to register the trade mark “Melbourne City Football Club”. The suburban Melbourne City responded a week later by also making an application to have its name included on the register of trade marks.

The suburban Melbourne City was incorporated as the Melbourne City Football Club Inc. in 2005 and claim to have used the mark since 1991. If this is proven to be correct then, as the first user of the mark, it could be successful in its opposition to Melbourne Heart’s application.

At this stage, both clubs’ have been issued adverse examination reports by the Australian trademark office, and will need to provide further information in support of their application before registration is either approved or denied. Stay tuned for the outcome of their applications.
Commentary

The Melbourne City story is a timely reminder that all businesses, big and small, should secure brand protection from the outset. Registered marks are much easier to enforce than those that are unregistered. Before launching publicly a brand name or logo, make sure you undertake the relevant searches to determine its availability for use in the region you wish to operate.


This article was prepared by Eliza Danby (eliza.danby@nortonrosefulbright.com / +61 3 8686 6494) of Norton Rose Fulbright’s Australia’s Intellectual property group.

Wednesday, March 5, 2014

Lance Armstrong’s “secret weapon” claim constitutes non-actionable “puffery”


by Kathy Grant (United States)


Immersed in a mire of recent legal woes, Lance Armstrong, once one of the most famous and idolized athletes in the world after winning seven Tour de France titles, can take some comfort from the recent holding of a federal judge in Los Angeles.

Last week, the court found that Armstrong’s advertising pitches on behalf of FRS Co., claiming that the company’s energy and sports drinks, concentrates, chews and powders were his “secret weapon” for success constituted non-actionable “puffery,” rather than a violation of California state law prohibitions on false advertising and unfair competition. See Martin v. FRS, 13-01456, U.S. District Court, Central District of California (Los Angeles).

Armstrong was a spokesman for, and an equity owner of FRS Co. from April 2007 until late 2012.

 In a series of advertisements, FRS used the phrase “Lance Armstrong’s Secret” and “Lance’s Secret Weapon” in reference to its energy products.

During a nationally televised interview with Oprah Winfrey in January 2013, Armstrong acknowledged that he had used banned performance-enhancing drugs during his athletic career to enhance his cycling performance, including in all seven of his Tour de France victories.

The lawsuit, a class-action brought on behalf of all people who bought FRS products “based in whole or in part” on the Armstrong marketing campaign from 2007 to 2012, alleged that if the plaintiffs had known that illegal performance-enhancing substances, and not the use of FRS products were responsible for Armstrong’s athletic success, they would not have purchased FRS products, or would have purchased fewer products and paid a lower price for the products they purchased.

In finding that Armstrong and FRS’ statements describing the energy products as a “secret weapon” constituted non-actionable puffery, the court noted that puffery involves “outrageous generalized statements, not making specific claims, that are so exaggerated as to preclude reliance by consumers.”

The court noted that the distinguishing characteristics of puffery are “vague, highly subjective claims as opposed to specific, detailed factual assertions.” In finding that the phrase “secret weapon” fell within this description, the court observed that the phrase is unquantifiable, and “says nothing about the specific characteristics or components of FRS products.”

The court further found that the plaintiffs’ allegations involving the “secret weapon” statements required a reasonable consumer to make an unreasonable inference, namely that an energy drink could be “the proprietary reason a decorated cyclist achieves success.”

The court commented that such an inference requires a reasonable consumer to discount extensive training, natural ability or “even illegal [performance enhancing drug] use.” The court further observed that after advertising a product, it is no longer a “secret,” making the “secret weapon” campaign a “self-defeating concept.”

Because the court reached its conclusion concerning the advertising at issue at the motion to dismiss stage, the court granted the defendants’ motion to dismiss with leave for the plaintiffs to amend their complaint. The deadline for the plaintiffs to file an amended complaint stating false advertising and unfair competition claims against Armstrong and FRS is March 18, 2014.


This article was prepared by Kathy Grant (Katharyn.grant@nortonrosefulbright.com / + 1 210 270 7182) of Norton Rose Fulbright’s United States’ Intellectual property group.

Thursday, February 13, 2014

FTC hosts public workshop on BioSimilar drug competition


by Kathy Grant (US)

On February 4, 2014, the Federal Trade Commission (“FTC”) hosted a day-long public workshop on “Follow-on Biologics: Impact of Recent Legislative and Regulatory Naming Proposals on Competition” to discuss the potential impact of state regulations and naming conventions on competition involving biologic medicines and follow-on biosimilar drugs. The workshop reflects the FTC’s renewed interest in a topic on which it has largely been silent since the June 2009 release of its report on follow-on biologic drug competition.

Biologics comprise some of the best-selling and fastest-growing pharmaceutical brands on the planet, and include all three of the world’s top-selling drugs -- AbbVie’s Humira®, Johnson & Johnson and Merck & Co.’s Remicade®, and Amgen and Pfizer’s Enbrel®.


Biologics are derived from living organisms or manufactured in living cells using recombinant DNA biotechnologies. Unlike more common chemically synthesized small-molecule drugs, biologics generally exhibit high molecular complexity, and may be quite sensitive to changes in manufacturing processes. Moreover, because no two cell lines, developed independently, can be considered identical, biologic products cannot be fully copied.

Biologics are often expensive compared to conventional treatments, and patient access to biologics is often restricted because of cost. These cost issues led Congress to enact the Biologics Price Competition and Innovation Act of 2009, requiring the FDA to develop an abbreviated pathway for approval follow-on biologics, similar to the pathway for approval of “generic” drugs. Follow-on biologics include “biosimilars” that are expected to produce the same clinical results as previously approved biologic products, and “interchangeable” biologics, that may be substituted for brand biologics without the intervention of a health care provider. Notwithstanding its authority, and the availability of some biosimilar products in Europe, the FDA has not yet approved any follow-on biologic for sale in the U.S. However, biosimilars are drawing increased attention since twelve biologics with combined global sales of more than US $67 billion (including Humira, Remicade and Enbrel) will lose patent protection by 2019.

In opening remarks, the FTC reiterated its desire that competition in the biosimilar industry be as vigorous as possible, consistent with patient safety. It further noted that to the extent regulations or restrictions are necessary, they should be no broader than necessary to protect consumers from significant harm. Subsequent discussion focused on two main topics: the anticipated competitive impacts of enacted and proposed state laws that impose certain requirements (e.g., physician notification) when biosimilars are dispensed to patients at the pharmacy; and whether the existing paradigm for naming medicines that employs a proprietary trade name and a nonproprietary name reflecting certain scientific characteristics of the product, should be used for biologics and follow-on biologics. In both discussions, debate focused on whether notification and naming measures that tend to emphasize differences between biologics would needlessly inhibit the development and use of biosimilars, or whether such measures were justified by pharmacovigilance concerns, including the desire to be able to track problems to specific biosimilar products.

Slides and a video transcript of the workshop are available on the FTC website. The FTC will continue to accept public comments regarding topics discussed at the workshop until March 1, 2014.


This article was prepared by Norton Rose Fulbright lawyer Kathy Grant (katharyn.grant@nortonrosefulbright.com / +1 210 270 7182) of the US Intellectual property group in San Antonio.

Wednesday, February 12, 2014

Improper DMCA takedown notice may lead to liability


by Justin Haddock (US)

According to a January 22, 2014 ruling from the U.S. District Court for the Northern District of California, an incorrectly-chosen takedown notice may constitute a violation of the Digital Millennium Copyright Act (DMCA).

CrossFit and its DMCA takedown notice


In Crossfit, Inc. v. Alvies, plaintiff CrossFit, Inc. brought a trademark infringement action against Jenni Alvies for content posted on Alvies’ Facebook page and Blogspot blog. CrossFit, the company that created the very popular fitness training program and training certification program, currently owns multiple federal trademark registrations and applications for the mark CROSSFIT, including in connection with fitness training services, nutritional shakes and software to track workout progress.

Alvies, allegedly without authorization from CrossFit, created the blog “crossfitmamas.blogspot.com” and a “CrossFit Mamas” Facebook page, on which she posted daily workout routines and on which other individuals would post updates on their workout progress. Alvies additionally sold nutritional shakes through the blog and paid for Google AdWords advertising for her websites.

During the course of several exchanges – including demands from CrossFit that Alvies remove all use of the CROSSFIT trademark from these sites and cease sales and advertising – CrossFit sent a takedown notice to Facebook under the DMCA, requesting the removal of Alvies’ “CrossFit Mamas” page.

CrossFit eventually sued Alvies for trademark infringement and dilution (among other causes of action), and Alvies made several counterclaims. Among them, Alvies requested a declaratory judgment regarding CrossFit’s decision to file a takedown notice under the DMCA, which provides remedies to copyright infringement, when CrossFit was in fact asserting infringement of its trademark rights.

In relevant part, the DMCA holds that any proprietor who materially misrepresents that certain material infringes its copyrights is liable for damages incurred by the alleged infringer. 17 U.S.C. § 512(f). Alvies claimed that CrossFit made a material misrepresentation by invoking the DMCA to assert its trademark rights, which are not covered by the Act. CrossFit moved to dismiss this counterclaim, arguing that Facebook offered a similar takedown notice for trademark rights, and thus Alvies did not incur any damages, since the allegedly infringing content would have been removed regardless.

The Court denied CrossFit’s motion to dismiss the counterclaim, holding that it would not speculate about what action Facebook would have taken had Facebook received a trademark takedown notice. The Court held that Alvies allegedly received income from her activities, and thus arguably suffered damage when the source of this income was removed via an improper DMCA takedown notice.

Lessons for removing content from social media websites


Notwithstanding any future appeal by CrossFit, the Alvies opinion may allow some social media users who have infringed another’s copyright or trademark rights to place monetary liability on the holders of those rights. Thus, companies seeking to remove material from social media websites such as Facebook should read carefully which procedures to follow for which types of rights the company is asserting. Such procedures are usually provided via an online form or in detailed instructions provided by the social media company itself. For the reader’s reference, the following links (current as of the date this article was posted) provide information on procedures and requirements for assertion of intellectual property rights violations by social media users:


Read the full Alvies opinion here.


This article was prepared by Justin Haddock (justin.haddock@nortonrosefulbright.com / +1 512 536 3024) is a lawyer in Norton Rose Fulbright’s Austin intellectual property practice.

Tuesday, February 11, 2014

The color magenta: T-Mobile secures preliminary injunction against AIO Wireless


by Saul Perloff (US)

Last August, T-Mobile filed a trademark infringement suit against AIO Wireless (a subsidiary of AT&T Inc.) accusing AIO of trying to replicate T-Mobile’s magenta color scheme. T-Mobile US Inc. et al, v. AIO Wireless LLC, CV H-13-2478 (S.D. Tex. filed Aug. 23, 2014). T-Mobile owns a number of registered trademarks incorporating the magenta color sometimes described as Pantone Process Magenta.


In its complaint, T-Mobile claimed that launch of AIO in May 2013 and its use of a magenta color scheme in marketing and promotional materials was timed to coincide with T-Mobile’s announced strategy to move away from contract-based mobile services plans.

T-Mobile alleged that AIO’s use of the magenta color was “likely to dilute T-Mobile's famous magenta color trademark, and to create initial interest confusion as to the source or affiliation of AT&T's subsidiary's business.” Complaint at 1-2.

On January 22, 2014, US District Judge Lee Rosenthal of the Southern District of Texas entered an order granting T-Mobile a preliminary injunction against AIO enjoining the company from “using large blocks or swaths of Pantone 676C or similar shade” in its advertising and marketing. Order at 2.

The court was apparently convinced that T-Mobile is likely to succeed in proving that AIO’s use of Pantone 676C in its marketing and store design is confusingly similar to T-Mobile’s use of Pantone Process Magenta in its marketing and store design. Id at 1. While the court’s order references findings of fact and conclusions of law in support of the ruling, no such document is currently available to the public.


Authored by Norton Rose Fulbright lawyer Saul Perloff of the US Intellectual property group in San Antonio.

Friday, February 7, 2014

Olympic Games, Your Brand, and Online Security


By Sue Ross (US)


For brand owners, the Olympic games can be an opportunity to showcase their goods and services to a worldwide audience.

The top-tier sponsors pay substantial sums to reach that global audience, who may be watching the games at the time most convenient to their local time zones.

That 24/7 demand calls for web sites and other online presence that are robust and available (ideally) 24/7—no down time. Advertisers can enhance their popularity with current customers and try to attract new ones. But popular brands can also attract hackers and “hactivists.”

According to the United States Computer Emergency Readiness Team (US-CERT) and the National Cybersecurity and Communications Integration Center (NCCIC), the hacktivist group known as Anonymous Caucasus has issued threats against any company that finances or supports the Olympic games. 

That group has reportedly been linked to distributed denial of service attacks on Russian banks in October of 2013.

Brand owners should be especially vigilant during the Olympic games, watching for unusual activity not only on their web sites but also on their social media accounts. 

Marketing and IT should work closely to spot suspicious behavior and take prompt action.

It would also be a good time to review/update the disaster recovery/business continuity plans to test what steps a brand owner would take if its web site, Twitter account, Facebook page, etc. were compromised. 

Check to see if those plans cover potential risks like these: 
  • What would you do if your web site was suddenly superseded by a hacking organization’s message?
  • What if your Twitter account were compromised and messages were sent out under your company’s name? 
  •  How do you salvage your brand’s goodwill if your Facebook page is defaced?

Prepared by Sue Ross (susan.ross@nortonrosefulbright.com / +1 212 318 3280) of Norton Rose Fulbright’s US Privacy, competition and data protection team.