Although the California Appellate Court, Second Appellate District, has designated the actual opinion as NOT FOR PUBLICATION (this means you must consult the rules of the court before you cite this case), this past May, two former members of the famed rock band The Doors were held to have engaged in false advertising under California law by advertising a concert band using that name. Although a jury found the band members not guilty of trademark infringement or unfair competition, the appeals court agreed with the trial court that “false advertising” claims are not the same, and upheld a permanent injunction against the individuals using the name “The Doors,” or any name containing that name. The court’s ruling also precludes the use of the name, voice or likeness of deceased band member Jim Morrison, in promoting concert ticket sales, citing prohibitions under the California statute regarding rights of publicity. Rimon knows publicity and privacy, in California—and throughout the United States and the world. Always know before you show. Call us, we can help.
Literally as this issue headed to press, the Supreme Court released its unanimous decision in the case of Metro-Goldwyn-Mayer Studios v. Grokster—a decision that is likely to have monumental consequences for years to come. To summarize the basic issues, for many years peer-to-peer file-sharing networks have relied on the 1984 Sony v. Universal Studios decision (“Betamax case”) which held the distribution of a commercial product capable of substantial noninfringing use could NOT give rise to contributory liability unless the distributor had actual knowledge of specific instances of infringement and failed to act. With peer-to-peer file-sharing, the network software architecture is decentralized, making it unlikely that the provider of the file-sharing software (in this case Grokster and StreamCast) could actually know of any specific instances. Even the theories of vicarious infringement were thrown out by the lower courts because neither Grokster nor StreamCast monitored, controlled or supervised the use of the software (nor did they have an independent duty to police against infringement).
Enter the Supreme Court, which agreed to hear the case on appeal from the 9th Circuit, which held that Grokster and StreamCast could not be liable for contributory infringement because there was no ability to prove actual knowledge and the software was capable of substantial non-infringing use. To give readers context, evidence was introduced indicating that on the FastTrack and Gnutella networks, more than 100 million copies of file-sharing software had been downloaded and billions of files are shared across those networks each month! The court noted “the probable scope of copyright infringement is staggering.”
So the Supreme Court overturned the 9th Circuit decision—but not for the reasons you might think. In my view, the Supreme Court did not overturn or even modify the Betamax case. Distributors of peer-to-peer file-sharing software using a decentralized indexing system to share copyrighted songs and movies, and which is capable of substantial non-infringing use, cannot be held liable for contributory infringement absent showing the distributors had specific knowledge and made a material contribution to direct infringement. The court also confirmed that software distributors cannot be held liable for vicarious infringement without showing the ability to block direct infringement by users.
The Supreme Court went to great pains in overturning the 9th Circuit to note “this case is significantly different from Sony and reliance on that case to rule in favor of StreamCast and Grokster was error.” The Sony case applied to distribution of a product that had both lawful and unlawful uses and sought to impose liability because Sony knew some users might use the product unlawfully. That case held it is inequitable to impute fault and corresponding secondary liability based on the unlawful acts of others, where the product has substantial lawful utility.
In a decision sure to be appealed but hailed as groundbreaking, the New York Court of Appeals, on April 5, 2005, held that rights to performances recorded before 1972 are protected under state common law, even after they have been put on the market. The ruling extends, until 2067, common law copyright protection for recorded music to companies that own rights to pre-1972 recorded performances. They can now prevent others from releasing their own versions. Since Congress did not extend statutory protection to recordings created before February 15, 1972, the court held there is common-law copyright protection in New York for sound recordings made prior to that date (i.e., since sound recordings made before 1972 are not covered by the federal copyright act, common law protection remains in place). In this case, Capitol’s claim against Naxos (who had remastered the recordings and began selling CDs) for infringement of common-law copyright in the original recordings was upheld. Common-law copyright traditionally has protected only unpublished works, but the New York holding concludes that the musical performances were unpublished, even though commercially sold to the public for decades. Go figure.