This post is authored by Fox Rothschild partner Christopher P. Beall:

Sabrina Spellman, she of the twitchy, witchy Archie Horror comic world in the Netflix reboot The Chilling Adventures of Sabrina, released last month with two 10-episode seasons, already has her hands full, what with teen angst, lust, occult powers, and a coming of age quandary.

Now, though, she also has those hellhounds known as lawyers on her trail.

The case, United Federation of Churches v. Netflix, was filed last Thursday (11/9/2018) in Manhattan federal court, asserting claims of copyright infringement and trademark dilution, on the basis of the television show’s use of a Baphomet sculpture as part of the set of the Academy of Unseen Arts, a prep school for witches that Sabrina attends.

The sculpture in the show bears striking similarities with a sculpture created by the plaintiff, which operates under the name The Satanic Temple, when the Temple battled for equal rights for its monument in Oklahoma after a court fight involving a monument of the Ten Commandments.  When the Oklahoma Supreme Court held that the Ten Commandments display at the Oklahoma State Capitol was prohibited as an unconstitutional establishment of religion on public property, the Temple dropped its effort to install its Baphomet sculpture there.  It has, however, indicated it wishes to install one of its sculptures at a similar display in Arkansas.  The Temple’s Baphomet sculpture attracted worldwide attention when it was unveiled at ceremony in Detroit in 2015 (https://www.bbc.com/news/magazine-33682878).

In the new case, the copyright claim here presents important questions focused on the intersection of free speech and copyright rights.  The Baphomet figure is itself an occult image that dates back at least 160 years, and in that sense, the original source of both the Temple’s sculpture and the Sabrina set is in the public domain and free for anyone to use.  However, the Temple’s sculpture – and the Sabrina set – use a unique composition of two children, a white girl and a black boy, staring fawningly up at the godhead.  (The public domain version of Baphomet is also different in that it is a hermaphrodite with female breasts, whereas the version created by both the Temple and for the television show depicts a well-muscled male chest.)

Because it appears that at least significant parts of the television show’s version of the Baphomet figure imitate the Temple’s sculpture, and because the originality of the Temple’s sculpture has been confirmed, at least at a prima facie level, through a copyright registration obtained by the Temple, the resolution of this case likely will come down to the notoriously flexible standards of the Fair Use Doctrine.  In that regard, the court will have to wrestle with the conundrums of whether the television show’s depiction of Baphomet is a critique or commentary on the Temple or the Temple’s sculpture, whether the Sabrina version is transformative because of its setting in a fictional school for witchcraft, and whether this latest version harms the market value of the Temple’s sculpture.  Ironically, on that last factor of the fair use analysis, the Temple’s lawsuit itself may in fact undercut its own case because of the instant celebrity created for the Temple’s sculpture by virtue of the news coverage of the litigation.

The Temple also asserted trademark dilution claims. These do not appear to be viable for a variety of reasons including the fact that the Temple’s sculpture cannot be said to be “famous” nationally, or even in New York,

While Sabrina might have solved this challenge with one of her magic spells (or a production lawyer who pushed back on the clearance work for the show’s set design), the court here will now have to untangle a very interesting copyright riddle that goes to the core of just how much free expression is allowed when using copyrighted imagery.

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Small low-power AM radio stations across the country may be in for a big boost.  The Federal Communications Commission (FCC) proposed regulations last month to increase the power of more local stations while scaling back some of the interference protections currently enjoyed by the 57 Class A 50,000 watt stations which dominate the nation’s AM dial.

At present, small AM stations are obligated to limit their signal strength at certain times to avoid encroaching on Class A stations’ service.  This allows Class A stations to span thousands of miles across the country, especially at night.  But the FCC questions whether such protections are still relevant in the digital age as an increasing number of Americans who listen to the radio do so through the Internet or satellite radio.

According to a study conducted by the Pew Research Center, 44% of cellphone owners in the U.S. streamed radio stations through their phones while driving in 2018 as opposed to just 6% in 2010.  Further, the study revealed podcast listenership has increased dramatically over the last decade from 18% in 2008 to 44% in 2018.  With respect to satellite radio, over 33 million Americans currently subscribe to Sirius XM Radio according to a study conducted by Statistica.   However, the Pew study indicated 90% of Americans aged 12 and older listen to terrestrial AM or FM radio broadcasts in a given week, suggesting traditional radio remains alive and well.

Critics of the FCC’s proposal claim increased interference from small stations will significantly hamper the signals for the nation’s most popular broadcasts, causing AM listenership to drop.  Additionally, they contend that signal interference may reduce the effectiveness of Class A stations’ emergency broadcast systems, which depend on uninterrupted service.  Conversely, supporters of the new regulations say these concerns are overblown and the AM dial could benefit greatly by the increased viability of diverse and community-centered regional radio.

Public comments on the proposed regulations are due in December.  The FCC will then have thirty days to consider this feedback and issue a reply.

Shortly after the 2015 debut of the hit Fox Television show Empire, Clayton Tanksley sued the studio, distributor, producer and creators of Empire for copyright infringement and related claims in the United States District Court for the Eastern District of Pennsylvania.  Tanksley’s claims stem from an alleged 2008 meeting with Empire’s creator and producer, Lee Daniels during a film competition sponsored by the Greater Philadelphia Film Office called Philly Pitch.  (The Film Office also was sued by Tanksley.)  Following the event, Tanksley claims to have discussed with Daniels a three episode television series he created and copyrighted called Cream, which was about an African American record executive who runs his own hip-hop label.  He also claimed to have provided Daniels with a DVD and script for the Cream series.  Tanksley’s complaint alleged that Cream and Empire are “strikingly substantially similar” in many respects, including the main and supporting characters, scenes and the overall themes of both works.

Copyright law protects the expression of ideas but not the ideas themselves.  Thus, in order for a plaintiff to prevail in a copyright infringement action he must demonstrate substantial similarity in the protected expression between the two works and not merely the fact that they share similar ideas or themes.  In dramatic works such as Empire and Cream, scènes à faire or plot elements that flow predictably from a general idea are unprotected.  For example, in “a film about a college fraternity … parties, alcohol, co-eds, and wild behavior would all considered scènes à faire and not valid determinants of substantial similarity.”  Tanksley v. Daniels, et al., No. 17-2023, p. 16, — F.3d – (3d. Cir. 2018).

Under that standard, the defendants moved to dismiss the complaint, arguing primarily that the two works were not substantial similar in protected expression.  In deciding defendants’ motion, the court performed a side-by-side analysis of Empire and Cream to determine whether a lay-observer would believe that the copying was of protectable aspects of Tanksley’s series.  The trial court granted the motion to dismiss, finding that the two works contain “dramatically different expressions of plot, characters, theme, mood, setting, dialogue, total concept and overall feel.”  And while the general idea of the two series revolved around African American music moguls, that was not protectable under copyright law.

Tanksley appealed to the Third Circuit raising primarily two arguments:  (1) the question of substantial similarity is too fact-intensive to be resolved on a motion to dismiss; and (2) the trial court erred in finding no substantial similarity between Empire and Cream.  As to the first argument, the court determined that certain works, including dramatic works, may be evaluated in a side-by-side comparison at the motion to dismiss stage and dismissed if “no trier of fact could rationally determine the two works to be substantially similar.”  The appellate court rejected plaintiff’s argument that the trial court erred in rendering its decision without the benefit of witness testimony, documentary evidence or expert analysis holding this was irrelevant to the dispositive question of how the two works would appear to a layman viewing them side by side.

As to the second argument, the Third Circuit determined that the trial court properly concluded that there was no substantial similarity of protected expression between Empire and Cream.  As the court concluded, aside from superficial, general similarities between the two shows, they were not substantially similar as a matter of law.  “The shared premise of the shows – an African-American, male record executive – is unprotectable.  These characters fit squarely within the class of ‘prototypes’ to which copyright protection has never extended.”  Thus, the Third Circuit agreed with the trial court that as to the protectable expression of plot, characters, theme, mood, setting, dialogue, total concept, and overall feel, no reasonable jury could conclude that Empire and Cream were substantially similar.

In dueling motions for summary judgment over copyright infringement claims, The Warhol Foundation butts heads with a photographer whose photo was a source for Warhol’s “Prince Series.”

Lynn Goldsmith is a self-described “rock and roll photographer” who has been photographing music legends since the early 1970s. The photograph in question was from a 1981 shoot she did for Newsweek with the late pop star Prince. Goldsmith says she licensed the photo to Vanity Fair for a one-time use as an artist reference for an illustration, and that’s how the photograph ended up in the hands of Pop Art pioneer Andy Warhol. Warhol used the photo as the basis for one of his iconic celebrity portraits, producing 12 paintings, two drawings, and two unpublished prints (the “Prince Series”).

In April 2017, Warhol’s estate sued Goldsmith, asking the court for a declaration that the use of the photo in the Prince Series does not violate Goldsmith’s copyright because Warhol’s works were “entirely new creations.”  Goldsmith responded a few months later, filing a counterclaim for copyright infringement.

Now, the District Court for the Southern District of New York must decide whether Warhol’s use of the photograph infringes upon Goldsmith’s copyright.

The Warhol Foundation argues that the Prince Series doesn’t count as an infringing derivative work because it does not contain any of the protectable elements of Goldsmith’s photograph. “Warhol’s signature silk-screen technique (and, in some cases, freehand drawings) deliberately stripped away every protectable element of the underlying photograph… the result… is that the only commonality remaining between Warhol’s Prince Series and [Goldsmith’s] photograph is the rough outline of Prince’s face – which cannot be copyrighted as a matter of law.”

Furthermore, even if Warhol’s Prince Series does contain derivative works, The Warhol Foundation says that Warhol made fair use of Goldsmith’s photo by “transforming” not only the photograph itself, but also the message it conveys. Among other artistic choices, Warhol: “deliberately cropped Prince’s head so that it appears disembodied… stripped away the range of tones and texture… painted many of the works with multiple layers of bright and exotic acrylic paints; and superimposed a floating, freehand sketch of the outline of Prince’s head.” Warhol transformed the message as well, the Foundation argues, creating an image of Prince “as an icon, not a person,” to comment on the impact of “celebrity and contemporary conditions of life.” The Second Circuit, the Foundation points out, has recognized this very quality in Warhol’s art, noting that “[m]uch of Andy Warhol’s work, including work incorporating appropriated images … comments on consumer culture and explores the relationship between celebrity culture and advertising.” Cariou v. Prince

Finally, the Foundation argues that Warhol’s art market is distinct from Goldsmith’s. While Warhols go for hundreds of thousands of dollars at the finest art galleries and auction houses, Goldsmith typically sells her photographs for low single-digit thousands, primarily through galleries that focus on rock-and-roll photographs and memorabilia.

For her part, Goldsmith cautions that this case may have catastrophic consequences for photographers. She argues a holding that Warhol’s “superficial revisions” constitute transformative use would “give a free pass to appropriation artists and destroy derivative licensing markets for commercial photographers whose works are used without permission.”

It’s worth noting that, in a landmark decision where the California Supreme Court applied the copyright fair use “transformative use test” as the First Amendment test for protected speech in the right of publicity context, the Court specifically pointed to Andy Warhol’s celebrity portraits as a paragon of what should be deemed a transformative use of a celebrity’s image: “Through distortion and the careful manipulation of context, Warhol was able to convey a message that went beyond the commercial exploitation of celebrity images and became a form of ironic social comment on the dehumanization of celebrity itself.” Comedy III Productions, Inc. v. Saderup, Inc., et al. 

Goldsmith points out that things have changed since Warhol’s time: “In today’s digital world, anyone can easily modify a photograph on a computer to add high contrast, coloration and artifacts.” Warhol, she argues, “did little more than that.”

The Southern District of New York will decide if it agrees.


Charlie Nelson Keever is a law clerk in the firm’s Litigation Department, based in its Los Angeles office.

We last blogged here about the Second Circuit’s denial of TV Eyes’ fair use defense in a lawsuit brought by Fox News. Now the Wikimedia Foundation (owner of Wikipedia), joined by other free press advocacy groups, have filed an amicus brief in support of TVEyes’ petition for the Supreme Court review.U.S. Supreme Court building in Washington, DC

TVEyes is a subscription service that records massive amounts of television content and compiles it into a searchable database of 10-minute clips. Its subscribers range from the New York Times to the Department of Defense. Fox News brought a copyright infringement action against TVEyes in 2013. The Second Circuit handed down a decision in February upholding the network’s claims. TV Eyes has appealed this decision to the Supreme Court.

The Wikimedia brief warns of dire consequences if the circuit court ruling is allowed to stand, stating that it permits copyright owners to “stifle criticism and undermines established fair use principles that are vital for media commentary.” It notes further: “In today’s fast-paced and increasingly polarized media landscape, researchers, commentators, and critics must be able to record, search, watch, and compare the original visual recordings of relevant broadcasts. Such comprehensive tools can only be maintained by commercial services like TVEyes.”

The amici questioned the Second Circuit’s balancing of the four fair use factors. The court found the fourth factor dispositive, in that the TVEyes service harmed the ability of Fox News to benefit from its copyrights by licensing clips directly. The Wikimedia brief challenges that conclusion, asserting that the existence of a direct market for Fox News clips is “theoretical,” and one that Fox would be “unlikely to authorize.”

Fair use analysis always requires a balancing of the copyright holder’s statutory monopoly against the benefits of free dissemination of content. Frequently, this involves purely commercial interests on both sides, but some fair use cases, particularly those involving matters of public concern, implicate larger values. It has been 20 years since the Supreme Court issued a major fair use decision. Advocates on both sides will be watching to see whether it will use this case to clarify a contentious doctrine.

One copyright lawsuit says the answer is “no.”

In a case against Take Two Interactive, the maker of the popular “NBA 2K” video game franchise, Solid Oak Sketches LLC argues LeBron James can license his likeness, but cannot license images of his tattoos due to copyright law.

Solid Oak claims it owns the images of multiple NBA players’ tattoos including LeBron James, Eric Bledsoe, and retired player Kenyon Martin, in a September 22, 2018 filing that opposed Take Two’s motion for summary judgment.

“NBA 2K” games allows users to play simulated NBA basketball games – complete with life-like images of prominent NBA players. With a spot-on depiction and digital recreation of an athlete like LeBron James comes the depiction of his tattoos – many of which are recognizable to fans and gamers alike – and the ensuing battle over who has ownership and control to license those images.

Solid Oak purchased the copyright to the images of the tattoos from actual tattoo artists. Now the company claims it – alone – owns the copyright to the tattoos. Take Two claims that James gave it permission (through the NBA as a third party) to use his name, image, and likeness in the video game. So, who’s right? Both parties could be.

Dual rights in a photo

Solid Oak’s recent motion argues there are two rights that content creators (and licensors) must be aware of when dealing with a photograph. First, the right of publicity, including name, image, likeness and how those can be used commercially. This means James can give a company permission to use his name, photos of him, and generally the way he looks in an advertisement, for example, to generate revenue. Solid Oak does not assert any interest in this right.

What it does assert is that it owns the copyrighted image of James’s tattoos. A copyright contains a bundle of rights, including the rights of reproduction and public display. According to Solid Oak, both of these rights were infringed by depiction of the tattoos in NBA 2K.

As a result, Solid Oak concedes that LeBron James owns his right of publicity, but argues that he has no power over use of the copyrighted image of tattoos on his body.

LeBron James: ‘I Have the Right to Have My Tattoos Visible When People or Companies Depict What I Look Like”

LeBron James feels differently. On Friday August 24, 2018, he testified on behalf of Take Two, stating “my understanding is that the tattoos are a part of my body and my likeness, and I have the right to have my tattoos visible when people or companies depict what I look like.”

Take Two argues that a ruling in Solid Oak’s favor would allow it to “shake down” any TV show or program. This could include NBA games broadcast on TV where well-known players and their tattoos are visible.

Does this mean LeBron James and other players could potentially violate copyright laws by simply appearing onscreen?

Potential Slippery Slope

Take Two argues there is a risk of chilled speech and content suppression if the court rules NBA players must secure licenses from tattoo artists prior to making appearances.

Earlier this year, Take Two argued its use of the tattoo images is protected under the fair use doctrine and the de minimis standard. However, U.S. District Court Judge Laura Taylor Swain declined to dismiss the case in March on either ground, seeking more facts.

One solution could be for NBA players to obtain signed releases from tattoo artists for each appearance depicting the player. The downside is this would significantly increase the burden on players to clear each appearance with a third party, leaving them with little control. This could be the result if the court rules in Solid Oak’s favor.

LeBron James was the highest rated player in “NBA 2K17,” indicating his prominence in the game, particularly with game users. But how big is the market for tattoo licensing? One expert for Take Two claims there is no tattoo licensing market for video games. Now, it is up to the court to weigh expert testimony on user preferences in “NBA 2K” and just how prominently the tattoos are displayed.

The court’s decision will likely affect the longstanding relationship between tattoo artists and NBA players – for better or for worse.


Mikella Persons Wickham is a law clerk in the firm’s Entertainment Department, based in its Los Angeles office.

Among copyright lawyers, Stairway to Heaven may become known not just for its abstract lyrics and acclaimed guitar solo, but also for the legal rulings that upended a jury verdict of non-infringement and sent the parties back to the District Court for a second trial to determine if the classic Led Zeppelin song was the product of copyright infringement.

50664380 - slippery stairs warning signIn brief, the copyright owner of the song Taurus, which was written in 1966 and first performed several years before Stairway to Heaven’s 1971 release, claimed that the latter infringed the former.  Although the jury found that the band, including Stairway to Heaven songwriters Jimmy Page and Robert Plant, had access to Taurus, they found that the two songs were not substantially similar and, thus, that there was no infringement.  The Ninth Circuit’s ruling last week addressed multiple issues, three of which are discussed below.

First, the Ninth Circuit faulted the District Court for its failure to include a jury instruction that the selection and arrangement of non-protectable musical elements is protectable under the Copyright Act.  The opinion notes that this was not a new legal principle and that, more than ten years earlier, the Ninth Circuit had affirmed a substantial similarity finding based on the manner in which five unprotected musical elements appeared in the works at issue in that case.  The Ninth Circuit rejected Defendants’ argument that the omission of the instruction was “harmless error.”  The Court found that the exclusion “severely undermined” Plaintiff’s ability to establish extrinsic substantial similarity, noting that Plaintiff’s expert had testified that the required similarity existed because Taurus and Stairway to Heaven incorporated the same five musical elements (some protected, some in the public domain) in the same way.

Second, the Ninth Circuit ruled that reversal was required because two of the District Court’s jury instructions regarding “originality” imposed too heavy a burden on the Plaintiff.  These instructions stated that (i) elements in the public domain or included in prior works, and (ii) common musical elements like chromatic scales, arpeggios and sequences are not protected by copyright.  The Court faulted these instructions for failing to clarify that the selection and arrangement of non-protected musical elements could qualify for copyright protection and ruled that they “undermined” Plaintiff’s expert’s testimony that Taurus and Stairway to Heaven were substantially similar because of the manner in which they combined unprotected elements.

Third, the Ninth Circuit agreed with the District Court that the Plaintiff could only rely on the copy of Taurus’s music composition deposited with the U.S. Copyright Office, and not also on sound recordings to prove substantial similarity because Taurus was released prior to Congress’s extension of copyright protection to sound recordings in 1972.  Significantly, however, the Ninth Circuit ruled that sound recordings of Taurus should have been played for the jury during cross-examination of Led Zeppelin member Jimmy Page to prove access.  Even though it accepted that the recordings were relevant to access, the District Court excluded them under Federal Rule of Evidence 403 because of its concern that jurors would consider them for purposes of substantial similarity.  The Ninth Circuit deemed this an abuse of discretion that deprived jurors of the opportunity to evaluate Page’s demeanor both when he was questioned about access and when he listened to the recordings.  The Ninth Circuit found the risk of juror confusion “relatively slight” and that it could be “further reduced” by admonishing the jury to only consider the recordings for purposes of access and not also substantial similarity.

In March of this year, the Second Circuit reversed a decision by the District Court and held that the video clipping service operated by TVEyes infringed Fox News’ copyrights. We covered this decision in a previous blog. TVEyes is now attempting to bring the matter to the Supreme Court in what could be a landmark case regarding fair use of newsworthy content.U.S. Supreme Court building in Washington, DC

TVEyes is a subscription service that records essentially all television broadcasts on 1,400 channels on a 24/7 basis. By using the closed-captioned content that accompanies the recorded broadcasts, it is able to create a text-searchable database of the contents of each clip. TVEyes subscribers can run searches that return a list of video clips containing the searched terms. Each clip runs for 10 minutes and begins shortly before the search term appears in the clip. In addition to news organizations such as the New York Times, its subscribers include the U.S. Department of Defense, the United Nations, professional sports leagues and even the White House.

Five years ago, Fox News brought suit against TVEyes for copyright infringement based on its “verbatim reproduction” of Fox’s broadcasts. TVEyes countered by asserting a fair use defense. The District Court agreed and dismissed Fox’s claims, but the Second Circuit reversed and remanded the case with instructions to enjoin TVEyes from making available to clients the ability to watch the 10-minute clips retrieved from TVEyes’ client search requests. (Fox did not object to TVEyes’ creation of a text-searchable database, only to its delivery of clips.) The court held that two elements of TVEyes’ use favored Fox. First, by making 10 minutes of content available, TVEyes delivered “virtually the entirety of the Fox programming that TVEyes viewers want to see and hear.” Second, and most important, TVEyes’ service was sufficiently competitive to potentially deprive Fox of revenues that it could have been receiving from its own program of searchable access to its broadcasts. The very success of TVEyes’ service was strong evidence of the existence of a market for searchable clips.

The Second Circuit contrasted this to Google’s actions – which were found to constitute fair use – in Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015) (“Google Books”). In that case, Google made unlicensed text-searchable copies of millions of books for which searches retrieved “snippets” of the books containing the search terms. Unlike TVEyes’ 10-minute video clips, these “snippets,” according to the Second Circuit, “abbreviated to ensure that it would be nearly impossible for a user to see a meaningful exposition of what the author originally intended to convey to readers.”

TVEyes is now seeking to argue its case to the Supreme Court. It argues that its case presents an opportunity to resolve a split between circuits over “a question of exceptional importance, including the proper balance under copyright law between the interests of a copyright holder and the First Amendment right to criticize and comment upon the copyright holder.” TVEyes also notes that the Court has not addressed fair use for over 20 years, since it articulated the doctrine of transformative use in the case of Campbell v. Acuff-Rose Music.

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The FCC’s reexamination of the Children’s Television Act (CTA), which sets forth a myriad of rules and regulations with respect to the broadcasting of children’s programming, has entered the next phase as the deadline to submit public comments passed on Monday.  FCC Commissioner Michael O’Reilly announced in January as part of the FCC’s media modernization campaign that the commission will consider rolling back regulations under the CTA.  O’Reilly’s announcement has sparked heated debate amongst dozens of broadcasters, media companies, and public interest groups as to what, if any, changes should be made.

The CTA was first passed by Congress in 1991 to require broadcasters to air some amount of standard-length educational and informational programming specifically designed for children under 17 years old.  Although no minimum requirement of programming hours was imposed at that time, the law’s regulations strengthened over the years and now require broadcast companies to air an average of three hours of children’s programming per week between the times of 7 a.m. and 10 p.m.  Additionally, core children’s programming must run at least 30 minutes in length, be regularly scheduled weekly, and be labeled throughout the episode with an “E” or “I” symbol.  Broadcast networks are also required on a quarterly basis to specify in writing the objective of their current and prospective programming, target child audience, and various other data requiring voluminous paperwork to be filed with the FCC.  Non-compliance with any of these requirements jeopardizes a broadcast company’s ability to renew its license.

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Of course, a lot has happened in media over the 27 years since the CTA’s passing.   The explosion of the Internet and proliferation of alternative means of media consumption including over-the-top providers, subscription services, video-on-demand content, and paid television means traditional broadcast is no longer the primary means through which anyone, let alone kids, consumes content.  O’Reilly argues broadcasters are at a further disadvantage in this increasingly competitive field by having to contend with the CTA’s outdated regulations which he claims are costly and unduly limit creativity.

Specifically, the FCC is considering elimination of the requirement that core programming be at least 30 minutes in length.  O’Reilly cites “Schoolhouse Rock” and “In the News” as examples of shorter programs with notable success that were killed off by the CTA.  Also on the chopping block is the requirement that children’s programming be between 7 a.m. and 10 p.m., the requirement that programming be regularly scheduled weekly, and the mandate that broadcast networks submit extensive paperwork regarding their programs on a quarterly basis as opposed to O’Reilly’s recommendation to require the materials annually.

Critics of the proposed changes claim unwinding the CTA would result in less children’s programming on broadcast television, which disproportionally impacts millions of low income families who do not have access to the Internet or alternative means of media consumption. O’Reilly counters arguing deregulation will not eliminate children’s content from broadcast television but will rather allow broadcasters greater flexibility to design more cost-effective means of providing this content.  There is no evidence the CTA has enhanced children’s programming since the 1990s, argues O’Reilly, and the market for this programming is strong enough to sustain itself without heavy regulation.  For instance, O’Reilly cites PBS Kids (a 24/7 children’s content provider) which was licensed to approximately 100 stations nationwide covering 90 percent of U.S. television households.

The FCC is required to issue a reply to public comments by October 23 and thereafter determine an appropriate regularly scheme.  Note, the CTA’s regulations requiring kid-appropriate commercials when broadcasting children’s programming are not part of this reexamination and are expected to remain in full force.

After losing on its first attempt, the Walt Disney Company managed to turn the tables on Redbox to obtain a preliminary injunction against Redbox’s sale of movie download codes.

The case arose out of Disney’s marketing of  “Combo Packs” of Disney movies, which include a DVD, Blu-Ray disc and digital download code. Redbox was legally purchasing the Combo Packs, then opening the packages and selling the download codes on its website separately from the physical discs. This, Disney claimed, encouraged consumers to violate the terms of copyright licenses set forth on printed inserts in the Combo Packs and warnings on the download websites Disney Movies Anywhere and RedeemDigitalMovies, which purport to restrict use of the codes only to the owners of the discs.

Disney applied for a preliminary injunction in February of this year. The motion was denied, but on surprising grounds. Both parties focused their arguments on the first sale doctrine, which they expected would be dispositive. The first sale doctrine provides that once a copyright owners permits the sale of a copy of its work, it cannot prohibit subsequent sales or transfers. Both sides agreed that this doctrine permitted Redbox to sell or rent the DVD and Blu-Ray discs without restriction. Redbox asserted that the paper slips containing the download codes were legally indistinguishable from physical discs. Disney’s response was that the codes were not equivalent to copies of the movies, but only keys to permit consumers to create copies on their own computers.

District Judge Dean Pregerson sided with Disney on the first sale issue, but refused to grant the injunction on the grounds of misuse of copyright. The misuse claim turned on the rather narrow ground that the specific language of the license agreementsfor the download codes was unduly restrictive. The license agreements for downloads on the RedeemDigitalMovies required redeemers to represent that the are currently “the owner of the physical product that accompanied the digital code at the time of purchase.” Similarly, the terms of use on the Movies Anywhere website only allow registered members to “enter authorized . . . Digital Copy codes from a Digital Copy enabled . . . physical product that is owned by [that member].” The court interpreted this to mean that if a consumer transferred ownership of the physical disc (clearly permitted under the first sale doctrine), she would forfeit the right to download the digital copy.

As I discussed in a previous blog, this decision offered Disney the simple recourse of redrafting the license terms on Combo Pack boxes and download sites. The studio did so, beginning with the Black Panther Combo Pack, and renewed its quest for a preliminary injunction. The new language does not condition download rights on ownership of the discs, but states, “Digital code redemption requires prior acceptance of license terms and conditions,” and further, that “The digital code contained in this package may not be sold separately.” Judge Pregerson found that these changes were sufficient to overcome Redbox’s claims of copyright misuse: “Under the old terms, a Combo Pack owner who disposed of the discs was indeed left with a worthless code because continued possession of the discs was a condition of digital access. Now, however, digital access is conditioned not on possession of the discs, but on the manner of Code acquisition. A Combo Pack owner who disposes of the discs is left with the same digital access rights he or she always possessed.”

Although Redbox can continue to sell codes subject to the old licenses, this decision will presumably shut down future sales. More importantly, the case establishes a precedent under the first sale doctrine that will certainly be welcome to content owners seeking to control their digital rights.