Justia U.S. 3rd Circuit Court of Appeals Opinion SummariesArticles Posted in Copyright
Pyrotechnics Management Inc v. XFX Pyrotechnics LLC
Pyrotechnics manufactures and sells hardware (a control panel and a field module) and software that control fireworks displays under the “FireOne” brand. Since around 1995, Pyrotechnics’s hardware has used a proprietary protocol. Pyrotechnics’s Romanian competitor, fireTEK, reverse-engineered Pyrotechnics’s hardware to learn its communication protocol. In 2018, fireTEK developed a router that could send analog signals to Pyrotechnics’s field module just like those sent by Pyrotechnics’s control panel.; fireTEK promoted its router as a replacement for Pyrotechnics’s control panel. Pyrotechnics filed a seven-page document describing its protocol (Deposit Copy) with the U.S. Copyright Office and received a Certificate of Registration, indicating the copyrighted work is “text.” Pyrotechnics asserts that it submitted the Deposit Copy as “identifying material” for its protocol under 37 C.F.R. 202.20(c)(2)(viii). Pyrotechnics claims the protocol was first published when it was embedded inside its hardware in 1995.Pyrotechnics sued fireTEK for copyright infringement, tortious interference with prospective contractual relations, and unfair competition, 17 U.S.C. 411(a). The district court entered an injunction. The Third Circuit vacated, finding the copyright invalid. Pyrotechnics’s digital message format is an uncopyrightable idea and the individual digital messages described in the Deposit Copy are insufficiently original to qualify for copyright protection. View "Pyrotechnics Management Inc v. XFX Pyrotechnics LLC" on Justia Law
Silvertop Associates Inc. v. Kangaroo Manufacturing Inc.
The parties dispute the validity of a copyright in a full-body banana costume. The Third Circuit applied the Supreme Court's decision in Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002 (2017), and held that the banana costume's combination of colors, lines, shape, and length (i.e., its artistic features) are both separable and capable of independent existence, and thus are copyrightable. The court held that the merger doctrine did not apply in this case, because copyrighting Rasta's banana costume would not effectively monopolize the underlying idea because there are many other ways to make a costume resemble a banana. Furthermore, the scenes a faire doctrine was inapplicable. Therefore, the district court did not err when it held that Rasta was reasonably likely to prove ownership of a valid copyright. View "Silvertop Associates Inc. v. Kangaroo Manufacturing Inc." on Justia Law
TD Bank NA v. Hill
Hill built Commerce Bank from a single commercial bank location in 1973 by emphasizing customer loyalty through initiatives such as extended hours, quick account openings, and free perks. His success brought personal acclaim. The relationship between Hill and Commerce soured, culminating in Hill’s 2007 termination and TD Bank’s acquisition of Commerce for $8.5 billion. The publication of a book Hill had written during his Commerce tenure was canceled. In 2012, Hill wrote a new book. TD filed a copyright lawsuit alleging that parts of the 2012 book infringe the earlier book. In enjoining Hill from publishing or marketing his book, the district court concluded that TD owned the copyright under a letter agreement and that Hill’s book irreparably violated its “right to not use the copyright.” The Third Circuit vacated the injunction, reasoning that the district court had made “sweeping conclusions” that would justify the issuance of an injunction in every copyright case. Instead of employing “categorical rule[s]” that would resolve the propriety of injunctive relief “in a broad swath of cases,” courts should issue injunctive relief only upon a sufficient showing that such relief is warranted under particular circumstances. Although the agreement between the parties did not vest initial ownership of the copyright by purporting to designate the manuscript a work “for hire,” it did transfer any ownership interest Hill possessed to TD, so Hill’s co-ownership defense fails. View "TD Bank NA v. Hill" on Justia Law
Posted in: Civil Procedure, Copyright, Intellectual Property, Labor & Employment Law
In re: McGraw-Hill Global Education Holdings, LLC
The Photographers entered into representation agreements with Corbis, a photography agency, providing Corbis authority to sub-license their works to third parties on a non-exclusive, fixed-duration basis. The agreements include forum selection clauses and give Corbis sole authority to make and settle claims for unauthorized use of images. If Corbis declines to bring such a claim within 60 days, the Photographers may bring actions. Corbis sub-licensed their photographs to McGraw-Hill. The invoices included the name of the photographer responsible for the work and incorporated Corbis’ standard “Terms and Conditions,” which included mandatory, exclusive forum selection clauses. The Photographers each brought a copyright action against McGraw-Hill in the Eastern District of Pennsylvania. McGraw-Hill moved to transfer venue under 28 U.S.C. 1404(a), arguing that the disputes implicate the Corbis–McGraw-Hill agreements, under which the proper venue was the Southern District of New York. One judge denied the motion, reasoning that the claims are based purely on copyright law, so the action is not a “dispute regarding th[e] Agreement[s],” and not subject to the forum selection clauses. Another judge reasoned that the copyright claims depend upon the interpretation of the Corbis–McGraw-Hill agreements so that the photographer was subject to the forum selection clause as an intended third-party beneficiary. In consolidated actions, the Third Circuit concluded that the photographers are not bound because they are not intended beneficiaries of the agreements, nor are they closely related parties. Because the erring district court’s mistakes were not clear or indisputable, the court declined to grant mandamus relief. View "In re: McGraw-Hill Global Education Holdings, LLC" on Justia Law
Posted in: Contracts, Copyright, Intellectual Property
Tanksley v. Daniels
In 2005, Tanksley, a Philadelphia actor and producer, created a three-episode television pilot, Cream, for which he received a copyright. In 2015, Fox Television debuted a new series, Empire, from award-winning producer and director Lee Daniels. Tanksley sued, claiming that Empire infringed on his copyright of Cream. The district court found no substantial similarity between the two shows and dismissed. The Third Circuit affirmed. Superficial similarities notwithstanding, Cream and Empire are 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. Considering the protectable elements of Cream, “no reasonable jury, properly instructed, could find that the two works are substantially similar.” View "Tanksley v. Daniels" on Justia Law
Posted in: Copyright, Entertainment & Sports Law, Intellectual Property
Leonard v. Stemtech Int’l, Inc
Leonard takes photographs of stem cells using electron microscopes. Only a few photographers engage in this highly technical type of photography. The images first appear in black and white, and Leonard uses his “artistic judgment” to enhance the photos in color. Leonard created the images at issue in the 1990s but did not register them with the Copyright Office until 2007, when he planned to file suit. Stemtech “formulates” and sells nutritional supplement products through thousands of distributors. In 2006, Stemtech contacted Leonard about using Image for its internal magazine and its website. Stemtech declined to license the image for website use because the price was too high but used the image twice in its magazine. Leonard billed Stemtech $950 but was only paid $500. Stemtech then used the images without a license in its other promotional materials, including websites, In 2007, Leonard discovered his images on numerous Stemtech-affiliated websites. He took screenshots of and archived the webpages and retained copies of emails he sent to the contacts on various sites. When Stemtech refused Leonard’s requests, Leonard filed suit for copyright infringement. A jury returned a $1.6 million verdict in Leonard’s favor. The Third Circuit affirmed, rejecting challenges to various rulings, but vacated the district court’s denial of Leonard’s request for pre-judgment interest. View "Leonard v. Stemtech Int'l, Inc" on Justia Law
Brownstein v. Lindsay
Brownstein and Lindsay worked at LSDI, a direct mailing list company. In 1993 Lindsay began developing rules for categorizing names by ethnicity. Lindsay enlisted Brownstein to create computer programs that did everything from rewriting names into proper data format to turning the rules into computer code. The combined system of Lindsay’s rules and Brownstein’s computer code was called the LCID. Lindsay received a copyright registration for the rules in 1996, entitled “Ethnic Determinant System — Knowledge and Rule/Exception Basis,” including a copy of Brownstein’s programs as a “deposit copy” for the registration, 17 U.S.C. 407(a) and referencing associated “computer process” and “codes.” Lindsay listed herself as the only author. She gave Brownstein a copy of the registrations. He claims that he never reviewed them. Subsequently, LSDI demanded that Lindsay turnover the copyright registration. Lindsay and Brownstein left LSDI in 1997. Lindsay handled all business affairs and, over the next several years, executed several agreements to form new business entities to promote and transfer ownership of the LCID. There were several lawsuits with LSDI. In 2009, Brownstein left on bad terms, filed an oppressed shareholder lawsuit, and sought his own copyright registrations. He then sought a declaratory judgment of joint authorship of LCID under the Copyright Act. The district court found the claim time-barred and insufficient on the merits. The Third Circuit remanded, holding that an authorship claim accrues when a plaintiff’s authorship has been “expressly repudiated” and that courts have no authority to cancel copyright registrations. View "Brownstein v. Lindsay" on Justia Law
Murphy v. Millennium Radio Grp
In 2006 the photographer took a picture of radio personalities for use in a magazine. An employee of the radio station scanned the picture, cutting off credit lines, and posted it on the internet. After the photographer's attorney contacted the station, the personalities made disparaging remarks about the photographer on the air. The photographer alleged violations of the Digital Millennium Copyright Act, 17 U.S.C. 1201, the Copyright Act, 17 U.S.C. 101, and defamation under New Jersey law. The district court entered summary judgment in favor of the defendants. The Sixth Circuit reversed. A cause of action under the DMCA may arise whenever the types of information listed in the statute and conveyed in connection with copies of a work, including in digital form, is falsified or removed, regardless of the form in which that information is conveyed. The fact that the photographer's name appeared in a printed gutter credit near the image rather than in an "automated copyright protection or management system" does not remove it from the protection of the Act. The trial court erred in finding "fair use" in the station's commercial use of a commercial photographer's copyrighted image. The photographer was given inadequate opportunity for discovery on the defamation claim.
Posted in: Communications Law, Copyright, U.S. 3rd Circuit Court of Appeals
William A Graham Co v. Thomas Haughey, et al
In 1991 defendant left his job with an insurance brokerage for one with competitor and took two binders of print material for use by the competitor. After discovering the infringement, the employer filed suit in 2005 under 17 U.S.C. 101. There were no actual damages; the court awarded $16,561,230 from the competitor and $2,297,397 from the employee, representing about 70 percent of the competitor's profits, and 75 percent of the employee's commissions. On remand, the district court found that the award was not excessive and awarded interest: $4,112,859 against the competitor and $570,542 against the employee. The Third Circuit affirmed. The amount does not "shock the conscience" and, although the statute does not refer to pre-judgment interest, the award is consistent with the Copyright Act. The court rejected an argument that interest should be calculated from the time the infringement was discovered. The date of a claim's accrual is not changed by tolling of the limitations period.