Copyright

Protecting the Benefit of a Seller’s Bargain in Real Estate Contracts

TLR BLOG

By Matthew Ingber*

Originally published in Volume 30 | Number 3 in 2014 in the Touro Law Review

*Matthew is an associate attorney at Brown Altman & DiLeo, LLP and handles all matters involving land use and zoning law, municipal law, commercial and residential transactional real estate, and commercial litigation.  Matthew has obtained municipal approvals throughout Long Island for national restaurant chains, gasoline station retailers, and alternative energy companies.  Matthew graduated summa cum laude from Touro Law Center in 2015.  He was a member of the Touro Law Review and served as an Issue Editor.

I. INTRODUCTION

Courts measure damages for breach of a real estate contract based on the difference between the contract price and the fair market value of the property at the time of the breach,[1] which seeks to protect the injured party’s expectation interest.[2]  This measure usually provides an injured seller with an adequate remedy in the event of a buyer’s breach[3] but “[i]n some cases, the actual loss suffered as a result of a breach exceeds the amount yielded by that formula.”[4]  In American Mechanical v. Union Machine Co.,[5] the buyer contracted to purchase the vendor’s real estate for $100,000.[6]  The property was then resold for $55,000, and the seller sought to recover the difference between the original contract and resale price.[7]  Although the court recognized that the general measure of damages sometimes inadequately protects the benefit of the injured seller’s bargain,[8] the court failed to formulate an alternative measure to address the problem.

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Solving the Riddle! Bridging the Gap in the Federal Circuit’s Definition of “Regular and Established Place of Business” to Prevent Patent Trolls from Forum Shopping

TLR BLOG

By Michael A. Morales*

Originally published in Volume 43 | Number 2 (Article 14) in the Touro Law Review, in 2018.

*Michael is the former Editor-In-Chief of the Touro Law Review. He graduated Summa Cum Laude as Salutatorian of the Part-Time Division in 2019. He is currently working as an associate attorney at Ropes & Gray, LLP, where he focuses on intellectual property law.

I. INTRODUCTION

Although patent trolls have manipulated the United States patent system, one way to discourage and prevent them from exploiting the weaknesses in the system, and ultimately harming innovation, is through the combination of reasoned policy analysis and patent venue reform.6 For many years, the United States District Court for the Eastern District of Texas has provided a haven for patent trolls to bring patent infringement lawsuits because it tends to favor patent- owners.7 Therefore, patent trolls typically file patent infringement lawsuits in the Eastern District of Texas instead of other more convenient districts to increase their likelihood of a favorable outcome.8 Such forum shopping, which is part of the patent troll business model, provides a litigation advantage to a party in a patent infringement lawsuit.9 This Note will argue that courts should apply venue law in a manner that limits a litigant’s ability to forum shop for a favorable forum, such as the Eastern District of Texas, in patent infringement lawsuits. This Note will propose several factors that courts should use to determine whether a party has filed a patent infringement lawsuit in a proper venue according to the patent venue statute.10 It will explain why each factor limits a patent troll’s ability to forum shop, thereby fostering innovation and supporting Congress’s goal for implementing the patent system.11

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Court Case Has ‘Sirius’ Impact on Common Law Copyright in NY

TLR BLOG

By Luann Dallojacono, J.D. Class of 2018 Touro Law Review Junior Staff Member

It’s 1967, and the band The Turtles has a no. 1 hit.[1] “So Happy Together” has people imagining me and you day in and day out.[2]

Fast-forward almost five decades later, and in 2013, the song is the subject of several lawsuits pitting the 1960s band against satellite radio giant SiruisXM.[3] Flo & Eddie, Inc., the company that controls the Turtles’ music and that is owned by original band members Mark Volman and Howard Kaylan sued SiriusXM in California, Florida, and New York for playing the band’s songs without the company’s permission.[4]

Flo & Eddie filed three class action suits claiming copyright protection under state law.[5] The plaintiffs were independent artists and record companies, including Flo & Eddie. [6] The suits have since uncovered some confusion about the applicability of copyright law to sound recordings made prior to 1972 and whether certain state’s laws allow the owners of those songs to control performing rights for the recordings.[7] As the New York District Court put it, “The long and short of this is—Sirius makes multiple copies, temporary, permanent, whole or partial, during its broadcast process; and it performs the copies it makes. Furthermore, as to pre–1972 sound recordings, it does so without obtaining licenses or paying royalties.”[8]

The parties are in the process of settling in California after Sirius was found liable under California law.[9] Sirius agreed to pay at least $25 million for playing pre-1972 recordings without a license and $5 million for each victory in state court if Flo & Eddie won its cases in New York, California and Florida.[10] The settlement also includes $59 million for a 10-year license for recordings by the plaintiffs at a 5.5% royalty rate.[11]

But legal developments last month may have some questioning the settlement. In February, Sirius saw victory when the case was dismissed in New York, overturning rulings in 2014 by the U.S. District Court.[12] The dismissal also reduced the amount of the settlement reached in California by $5 million as per the settlement agreement.[13]

The New York District Court described the case as one about copyright in sound recordings, which are media in or on which a particular performance of a song is fixed.[14] Congress gave sound recordings copyright protection in 1971 and in 1995 added a “limited public performance right” for sound recordings to give copyright holders of sound recordings the “exclusive right . . . to perform the copyrighted work publicly by means of a digital audio transmission.”[15] However, the 1971 Act has an important limitation in that recordings made prior to February 15, 1972, do not qualify for federal copyright protection.[16] Congress left the issue of pre–1972 sound recordings to the states.[17]

The Turtles’ recordings were all fixed before that February date in 1972, leaving none eligible for copyright protection under federal law.[18] Thus, Flo & Eddie looked to state law.[19] In New York, the company argued that pre–1972 sound recording owners have rights and remedies under the common law, which covers pre–1972 sound recordings and prohibits reproducing and publicly performing the recordings.[20]

This past February, New York’s Second U.S. Circuit Court of Appeals accepted a December 20, 2016, ruling by the state Court of Appeals holding that New York common-law copyright does not protect public performance for creators of sound recordings made before 1972.[21] The issue came before the high court after the Second Circuit Court of Appeals certified the following question to the court: “Is there a right of public performance for creators of sound recordings under New York law and, if so, what is the nature and scope of that right?”[22] It was an issue of first impression for the Court of Appeals.[23] After an exhausting look at relevant case law, the court concluded that New York’s common law has not recognized a right of public performance for those who have created sound recordings prior to 1972. [24] The court noted that recognizing such a right would rattle societal expectations and carry with it extensive economic consequences as well as pervasive and widespread ramifications. [25] The issue would be more appropriately addressed by the legislature, the court added.[26] Judge Rivera dissented and came to the opposite conclusion. [27] She argued that the benefits of a right of public performance coupled with the creator’s desire to be compensated for his or her labor in making the recording pair well with society’s interest in protecting artists and their works from exploitation.[28] She also said that the right aligns well with increasing the public access to artists’ endeavors, the expectations of the music industry, and the fact that “Congress has placed a time limit on common-law protections for pre-1972 sound recordings while providing a limited right of public performance for all sound recordings made after February 15, 1972.”[29]

Sirius also won the Florida case in 2015, making its legal record 2-for-3.[30] Perhaps it is as the singer Meat Loaf would say: “Two out of three ain’t bad.”[31]

 

[1] See Ben Sisario, SiriusXM Agrees to Pay Up to $99 Million to Settle Turtles-Backed Copyright Suit, N.Y. Times (Nov. 29, 2016), https://www.nytimes.com/2016/11/29/arts/music/turtles-siriusxm-1972-copyright-settlement.html.

[2] The Turtles, So Happy Together (White Whale Records 1967).

[3] See Sisario, supra note 1.

[4] See Sisario, supra note 1.

[5] Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F. Supp.3d 325, 335 (S.D.N.Y. 2014); see Sisario, supra note 1.

[6] See Sisario, supra note 1.

[7] Ben Sisario, SiriusXM Agrees to Pay Up to $99 Million to Settle Turtles-Backed Copyright Suit, N.Y. Times (Nov. 29, 2016), https://www.nytimes.com/2016/11/29/arts/music/turtles-siriusxm-1972-copyright-settlement.html.

[8] Sirius, 62 F. Supp.3d at 334.

[9] In California, Flo & Eddie alleged violations of Cal. Civ. Code § 980(a)(2) and California’s Unfair Competition Law, Cal. Bus. & Prof. Code § § 17200, et seq., conversion, and misappropriation. The court granted the company’s motion for summary judgment on all causes of action insofar as the claims are based on Sirius XM’s public performance conduct. See Flo & Eddie Inc. v. Sirius XM Radio Inc., No. CV 13-5693 PSG RZX, 2014 WL 4725382 at *12 (C.D. Cal. 2014). See also Jonathan Stempel, Siruis XM Wins Dismissal of Turtles Copyright Lawsuit in New York, Insurance Journal (Feb. 21, 2017), http://www.insurancejournal.com/news/east/2017/02/21/442442.htm; Jonathan Stempel, Sirius May Settle Music Copyright Suit Brought by The Turtles for $100M, Insurance Journal (Nov. 20, 2016), http://www.insurancejournal.com/news/national/2016/11/30/433536.htm.

[10] See Sisario, supra note 1; Stempel, Sirius XM Wins Dismissal, supra note 9.

[11] See Sisario, supra note 1.

[12] Stempel, Siruis XM Wins Dismissal, supra note 9.

[13] Stempel, Siruis XM Wins Dismissal, supra note 9.

[14] 17 U.S.C. § 101; See Sirius, 62 F. Supp. at 335–36.

[15] 17 U.S.C. § 106; See Sirius, 62 F. Supp. at 336.

[16] 17 U.S.C. § 301(c); See Sirius, 62 F. Supp. at 336.

[17] See Sirius, 62 F. Supp.3d at 336.

[18] Id.

[19] Id.

[20] Id.

[21] See Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 28 N.Y.3d 583, 610 (2016); Stempel, Siruis XM Wins Dismissal, supra note 9.

[22] Sirius, 28 N.Y.3d at 589.

[23] Id. at 595.

[24] Id. at 594-603.

[25] Id. at 606.

[26] Id.

[27] Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 28 N.Y.3d 583, 617 (2016) (Rivera, J., dissenting).

[28] Id. at 620-21.

[29] Id.

[30] Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-23182-CIV, 2015 WL 3852692 at *1 (S.D. Fla. 2015).

[31] Meat Loaf, Two Out of Three Ain’t Bad (Epic Records 1977).

 

The Clash Between Parody and Copyright Infringement

TLR BLOG

By Daniel Pojero, J.D. Class of 2017 Touro Law Review Senior Staff Member

Parody and copyright infringement are constantly at odds within intellectual property law because of their paradoxical relationship. While copyright protection ensures an author exclusive rights to his or her original work of authorship, a parodist may rely on the Fair Use defense to forestall any liability for infringement, even though the parodist has copied part of the original work.[1] A parody is a method of criticism that operates by closely imitating a work for comic effect or ridicule; so a parody necessarily makes use of another creative work.[2] This is where the conflict between the two concepts exists.[3] Where typically a license is required to make use of a copyrighted work, the author is unlikely to grant permission or a license to a parodist since a parody by its nature will make fun or ridicule the author’s work.[4] Thus, the parodist employs the Fair Use affirmative defense, which allows for a reasonable and limited use of the copyrighted work without the author’s permission.[5]

Recently, Dr. Seuss Enterprises, L.P. (“Dr. Seuss”) filed a complaint against, inter alia, ComicMix LLC (“Comicmix”) in the Southern District of California for Copyright Infringement, Trademark Infringement, and California statutory Unfair Competition, seeking to enjoin ComicMix from distributing its alleged infringing work, “Oh the Places You’ll So Boldly Go.”[6]   Relying on the sustained familiarity of Dr. Seuss books, the alleged infringing work juxtaposed the recognizable Dr. Seuss theme, illustration, and stylization with the Star Wars characters.[7] The complaint was filed on November 10, 2016, and the Defendant, ComicMix, has not yet filed an answer.[8] Dr. Seuss alleges that ComicMix has misappropriated protected copyright elements into the infringing work, such as the title, story arc, characters, and illustrations.[9] The infringing work appears to recreate entire pages from the Dr. Seuss books with meticulous precision.[10]

ComicMix is likely to assert that its work is a parody that falls within the parameters of the Fair Use doctrine.[11] The courts have struggled with parody cases when ascertaining whether the parody falls within the scope of Fair Use, or if it is instead an infringing work.[12] The Copyright Act articulates criticism as one of the purposes behind Fair Use.[13] A parody is a transformative use of a well-known work that critiques or ridicules the original.[14] Therefore, the issue becomes whether there is an implication that parody enjoys more latitude than other types of works when Fair Use is asserted. If parody fails to be protected by the Fair Use doctrine, then the result could be the disappearance of parody as an artistic form of social criticism and comment.

Consequently, it must be determined by the Courts what constitutes a valid parody under the Fair Use doctrine.   Copyright Act section 107 enumerates four factors that must be analyzed to determine whether a use of a copyrighted work is fair use.[15] The first factor analyzes the “purpose and character of use, including whether the use is commercially motivated or instead is for non-profit educational purposes.”[16] The court analyzes the first factor by evaluating to what extent the use is transformative.[17] The use of the copyrighted material must be productive and put forth the copied material in a different manner or with a different purpose from the original.[18]  Where the alleged infringing work can be a substitute or makes the purchase of the original unnecessary, it is highly unlikely that the court will sanction it as being fair use of the original.[19]

The second factor ascertains the nature of the copyrighted work.[20] This factor recognizes that certain types of works are more deserving of copyright protection than other types of works.[21] Creative works do not enjoy as large a scope as do informational works designed to inform or educate its audience.[22]

The third factor looks to the “amount and substantiality of the copying in relation to the copyrighted work as a whole.”[23] This factor evaluates whether the quality and value of the copied portions are reasonable in relation to the purpose of the copying.[24]   Unfortunately, no black line rule exists. Courts have held that use of an entire work constituted fair use, whereas in other instances using a mere fraction of the work did not qualify as fair use.[25] The Supreme Court, however, with respect to parody, has held that “[c]opying does not become excessive in relation to parodic purpose merely because the portion taken was the original’s heart.”[26] A parody enjoys more leniency here because it must use enough of the original work to conjure up a recognizable allusion to the work it is aiming to ridicule.[27]

The fourth factor evaluates the “effect upon the potential market or value” of the plaintiff’s copyrighted work.[28] The Second Circuit articulated this factor as a balancing between the benefit the public will derive if the use is permitted and the personal gain the copyright owner will receive if the use is denied.[29] If the adverse effect the alleged infringing use will have on the copyrighted work is minimal, then less public benefit need be shown to justify the use.[30] However, in the parody context, although a parody may aim at destroying the artistic or commercial value of the original work through its criticism, this sort of market effect does not produce a cognizable harm under the Copyright Act.[31] The Court must differentiate between fierce criticism that quashes demand and copyright infringement that usurps it.[32]

Whether ComicMix’s work satisfies the elements of fair use in the context of a parody will be the main issue decided by the court. ComicMix must show the juxtaposition of Dr. Seuss’s theme and stylization with the Stars characters conjures up the reasonable perception of a parody.[33] The fair use factors are a multifaceted analysis of assessing where the author’s exclusivity should stop to best serve the overall objectives of copyright law.[34] A dynamic interrelationship exists between the factors because the factors build upon each other to create the concept of fair use.[35]

[1] 4-13 Nimmer on Copyright § 13.05 (2015).

[2] Id.

[3] Id. On one hand, copyright protection does not permit copying of a work, and on the other, fair use allows for copying when the four factors of fair use are satisfied.

[4] See generally Rich Stim, Summaries of Fair Use Cases, Stanford University Libraries: Copyright and Fair Use (Nov. 26, 2016) http://fairuse.stanford.edu/overview/fair-use/cases. Weird Al, a parodist, relies on obtaining licenses to conduct his work, rather than relying on fair use, which begs the question if a parodist should be required to obtain a license since it is conceivable that an original author will license their work to parodists.

[5] Black’s Law Dictionary 676 (9th ed. 2011). 4-13 Nimmer on Copyright § 13.05 (2015).

[6] Pls.’ Compl. Dr. Seuss Enter., L.P. v. ComicMix LLC, No. 3:16-cv-02779-JLS-BGS at 1-4 (S.D. Cal. 2016) Complaint filed November 10, 2016.

[7] Id.

[8] Id.at 5-11.

[9] Pls.’ Compl. Dr. Seuss Enter., L.P., No. 3:16-cv-02779-JLS-BGS WL 274176015.5 (S.D. Cal. 2016).

[10] Id. at 6-9. Example images are provided within the Plaintiff’s Complaint.

[11] Id. at 10.

[12] 4-13 Nimmer on Copyright § 13.05 (2015).

[13] 17 U.S.C. § 107(2016).

[14] Black’s Law Dictionary 1226 (9th ed. 2011).

[15] 17 U.S.C. § 107(2016).

[16] Id.

[17] Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 591-92 (1994).

[18] Id.

[19] Peter Letterese & Assocs. v. World Inst. of Scientology Enters., 533 F.3d 1287, 1315 (11th Cir. 2008).

[20] 17 U.S.C. § 107(2016).

[21] Cambridge Univ. Press v. Patton, 769 F.3d 1232, 1268 (11th Cir. 2014). See generally Diamond v. Am-Law Corp., 745 F.2d 142 (2d Cir. 1984) (stating informational works may be more freely published).

[22] Id.

[23] 17 U.S.C. § 107(2016).

[24] Peter Letterese & Assocs. v. World Inst. of Scientology Enters., 533 F.3d 1287, 1314 n.30 (11th Cir. 2008).

[25] See e.g., Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 566 (1985) (copying a few hundred words from a book was too much to quote from essentially what was the “heart of the book”; Bill Graham Archives, LLC. v. Dorling Kindersley Ltd., 386 F. Supp. 2d 324, 330–331 (S.D.N.Y. 2005) (reformatting the entirety of plaintiff’s images into thumbnail images constituted fair use.

[26] Campbell, 510 U.S. at 588 (1994).

[27] Id.

[28] 17 U.S.C. § 107(4).

[29] MCA, Inc. v. Wilson, 677 F.2d 180 (2d Cir. 1981).

[30] Id.

[31] Campbell, 510 U.S. at 591-92 (1994).

[32] Id. at 592.

[33] Id. at 582.

[34] Campbell v. Acuff-Rose: Justice Souter’s Rescue of Fair Use, 13 Cardozo Arts & Ent. L.J. 19, 22 (1994).

[35] Id. at 23. See Campbell, 510 U.S. at 577-78.