Report

On

Copyright
Infringement

Submitted By:

Sandhya Rana 31228

Nitya Hajela 31263
Ruchika Tayal 31291

Submitted On: 9-Feb-2009

TABLE OF CONTENTS
ABSTRACT................................................................................................. ..................4
ACKNOWLEDGEMENT.............................................................................................. ....5
1. COPYRIGHT.................................................................................... .........................6
1.1 INTRODUCTION................................................................................... ..................6
1.2 HISTORY .................................................................................................. .............6
1.2.1 STATUTE OF ANNE (1710)..................................................................................6
1.2.2 BERNE CONVENTION (1186) .............................................................................7
1.2.3 OTHER INTERNATIONAL CONVENTIONS.............................................................7
1.3 SCOPE..................................................................................................... ..............7
1.4 EXCLUSIVE RIGHTS ............................................................................................. ..7
1.5 DURATION........................................................................................ .....................8
1.6 LIMITATIONS & EXCEPTIONS TO COPYRIGHT.........................................................8
1.6.1 IDEA-EXPRESSION DICHOTOMY .........................................................................8
1.6.2 FIRST-SALE DOCTRINE AND EXHAUSTION OF RIGHTS .......................................9
1.6.3 FAIR USE AND FAIR DEALING ............................................................................9
1.6.4 TRANSFER AND LICENSING .............................................................................10
1.6.5 SIMILAR LEGAL RIGHTS ...................................................................................10
1.6.6 DEFINITION OF "COPY".....................................................................................11
1.6.7 TYPEFACES ....................................................................................... ...............11
1.6.8 ACCESSIBLE COPIES ................................................................................. .......11
2. COPYRIGHT INFRINGEMENT..................................................................................11
2.1 INTRODUCTION................................................................................. ..................11
2.2 REMEDIES AGAINST INFRINGEMENT...................................................................12
2.3.1 OWNERSHIP OF A VALID COPYRIGHT...............................................................12
2.3.2 PROOF OF ACTUAL COPYING............................................................................13
3. CASES OF COPYRIGHT INFRINGEMENT..................................................................14
3.1 CCH CANADIAN LTD. V. LAW SOCIETY OF UPPER CANADA (2004).......................14

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3.1.1 BACKGROUND........................................................................................ ..........14
3.1.2 RULING............................................................................................................. 14
3.1.3 SIMILAR CASES................................................................................................16
3.2 MGM STUDIOS, INC. V. GROKSTER, LTD. (2005) .................................................16
3.2.1 BACKGROUND........................................................................................ ..........16
3.2.2 RULING............................................................................................................. 17
3.2.3 EFFECTS OF THE DECISION..............................................................................17
3.3 WARNER BROS. & J. K. ROWLING VS. RDR BOOKS (2008)...................................18
3.3.1 BACKGROUND........................................................................................ ..........18
3.3.2 PLAINTIFFS’ ALLEGATION.................................................................................18
3.3.3 DEFENDANT’S CLAIM ......................................................................................19
3.3.4 THE TRIAL.............................................................................. ..........................19
3.3.5 VERDICT..................................................................................................... ......20
3.3.6 IMPLICATIONS..................................................................................................20
3.4 CASTLE ROCK ENTERTAINMENT, INC. V. CAROL PUBLISHING GROUP, INC. (1998)
................................................................................................ .................................21
3.4.1 CASE FACTS.....................................................................................................21
3.5.2 RULING OF THE APPEALS COURT.....................................................................21
3.5 UMG SUES MYSPACE FOR COPYRIGHT INFRINGEMENT (2006)............................24
3.5.1 CASE FACTS.....................................................................................................24
3.5.2 PLAINTIFF’S ALLEGATION.................................................................................25
3.5.3 DEFENDANT’S CLAIM.......................................................................................25
3.5.4 COURT VERDICT.................................................................................... ...........26
3.6 YAHOO SUED BY SUPER CASSETTES INDUSTRIES (2008)....................................26
3.6.1 CASE FACTS.....................................................................................................26
3.6.2 PLAINTIFF’S ALLEGATION.................................................................................26
3.6.3 DEFENDANT’S CLAIM.......................................................................................28
REFERENCES................................................................................................... ..........29

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ABSTRACT

Copyright represents a balance of the interests of owners and users, which recognises that the owner
should not be entitled to restrain use of copyright material, which does not harm the integrity of the
material and the owner’s commercial expectations which are legitimate

With the advance of technology, our economy has become increasingly dependent on the storage, transfer,
and manipulation of information. As a result, issues relating to copyright are taking on a greater
importance. However, the same technological advances have made violations of these protections much
easier to achieve, sometimes to the point of requiring only a trivial amount of effort.

These forces have created two competing viewpoints in our society. The first viewpoint is typically
associated with the creators and distributors of copyrighted works, and holds that the relative simplicity of
violating a copyright requires strengthening of copyright laws and increasing the severity of punishments
for such violations. Opposed to this is the idea that technological advances have made the concept of
copyright protection obsolete, necessitating the abolishment of the legal structures which enforce those
protections. The battle between these views has become prominent in recent years, with both sides using
increasingly heated rhetoric to advance their viewpoint.

In this report, we analyze some of the cases of copyright infringement, with a view to understand the
various factors that are at play and to further enhance the knowledge of protection of intellectual property
rights.

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ACKNOWLEDGEMENT

We would like to express my sincere gratitude to Professor Ganesh Hingmire, under whose
guidance this report was made and who took out valuable time to provide valuable insights into
cases of copyright infringement.

Also we extend our sincere thanks to our colleagues and fellow students for their invaluable
inputs and help.

9–Feb–2009

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1. COPYRIGHT

1.1 INTRODUCTION

Copyright (or ©) is a form of intellectual property which gives the creator of an original work exclusive
rights for a certain time period in relation to that work, including its publication, distribution and
adaptation; after which time the work is said to enter the public domain. Copyright applies to any
expressible form of an idea or information that is substantive and discrete. Some jurisdictions also
recognize "moral rights" of the creator of a work, such as the right to be credited for the work.

An example of the intent of copyright, based in the United States Constitution, is simply to promote the
progress of science and arts by securing for limited period of time the exclusive right of the creator.

Copyright has been internationally standardized, lasting between fifty to a hundred years from the author's
death, or a finite period for anonymous or corporate authorship; some jurisdictions have required
formalities to establishing copyright, most recognize copyright in any completed work, without formal
registration. Generally, copyright is enforced as a civil matter, though some jurisdictions do apply
criminal sanctions.

Most jurisdictions recognize copyright limitations, allowing "fair" exceptions to the author's exclusivity of
copyright, and giving users certain rights. The development of the Internet, digital media, computer
network technologies, such as peer-to-peer file sharing, have prompted reinterpretation of these
exceptions, introduced new difficulties in enforcing copyright, and inspired additional challenges to
copyright law's philosophic basis. Simultaneously, businesses with great economic dependence upon
copyright have advocated the extension and expansion of their copy rights, and sought additional legal
and technological enforcement.

1.2 HISTORY

1.2.1 STATUTE OF ANNE (1710)

The concept of copyright originates with the Statute of Anne (1710) in Britain. It established the author of
a work as the owner of the right to copy that work and the concept of a fixed term for that copyright. It
was created as an act "for the encouragement of learning", as it had been noted at the time that publishers
were reprinting the works of authors without their consent "to their very great detriment, and too often to
the Ruin of them and their Families". As such, copyright was first created with the intention that authors
might have some control over the printing of their work and to receive some financial recompense, so that
this would encourage them to write more books and thus to aid the flow of ideas and learning. As the act
itself says: "for the encouragement of learned men to compose and write useful books".

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The Statute of Anne was the first real copyright act, and gave the authors rights for a fixed period, after
which the copyright expired. Copyright has grown from a legal concept regulating copying rights in the
publishing of books and maps to one with a significant effect on nearly every modern industry, covering
such items as sound recordings, films, photographs, software, and architectural works.

1.2.2 BERNE CONVENTION (1186)

The 1886 Berne Convention first established recognition of copyrights among sovereign nations. Under
the Berne Convention, copyrights for creative works do not have to be asserted or declared, as they are
automatically in force at creation: an author need not "register" or "apply for" a copyright in countries
adhering to the Berne Convention. As soon as a work is "fixed", that is, written or recorded on some
physical medium, its author is automatically entitled to all copyrights in the work, and to any derivative
works unless and until the author explicitly disclaims them, or until the copyright expires. The Berne
Convention also resulted in foreign authors being treated equivalently to domestic authors, in any country
signed onto the Convention. The UK signed the Berne Convention in 1887 but did not implement large
parts of it until 100 years later with the passage of the Copyright, Designs and Patents Act of 1988. The
USA did not sign the Berne Convention until 1989.

1.2.3 OTHER INTERNATIONAL CONVENTIONS

The United States and most Latin American countries instead entered into the Buenos Aires Convention in
1910, which required a copyright notice (such as "all rights reserved") on the work, and permitted
signatory nations to limit the duration of copyrights to shorter and renewable terms. The Universal
Copyright Convention was drafted in 1952 as another less demanding alternative to the Berne
Convention, and ratified by nations such as the Soviet Union and developing nations.

1.3 SCOPE

Copyright may apply to a wide range of creative, intellectual, or artistic forms, or "works". Specifics vary
by jurisdiction, but these can include poems, theses, plays, other literary works, movies, dances, musical
compositions, audio recordings, paintings, drawings, sculptures, photographs, software, radio and
television and broadcasts. Copyright does not cover ideas and information themselves, only the form or
manner in which they are expressed.

1.4 EXCLUSIVE RIGHTS

Several exclusive rights typically attach to the holder of a copyright:

 To produce copies or reproductions of the work and to sell those copies (mechanical rights;
including, sometimes, electronic copies: distribution rights)
 To import or export the work
 To create derivative works (works that adapt the original work)
 To perform or display the work publicly (performance rights)

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  To sell or assign these rights to others
 To transmit or display by radio or video (broadcasting rights)

The phrase “exclusive right” means that only the copyright holder is free to exercise those rights, and
others are prohibited from using the work without the holder’s permission. Copyright is sometimes called
a “negative right”, as it serves to prohibit certain people (e.g., readers, viewers, or listeners, and primarily
publishers and would be publishers) from doing something they would otherwise be able to do, rather
than permitting people (e.g., authors) to do something they would otherwise be unable to do. In this way it
is similar to the unregistered design right in English law and European law. The rights of the copyright
holder also permit him/her to not use or exploit their copyright, for some or all of the term.

There is, however, a critique that rejects this assertion as being based on a philosophical interpretation of
copyright law that is not universally shared. There is also debate on whether copyright should be
considered a property right or a moral right. Many argue that copyright does not exist merely to restrict
third parties from publishing ideas and information, and that defining copyright purely as a negative right
is incompatible with the public policy objective of encouraging authors to create new works and enrich
the public domain.

The right to adapt a work means to transform the way in which the work is expressed. Examples include
developing a stage play or film script from a novel, translating a short story, and making a new
arrangement of a musical work.

1.5 DURATION

Copyright subsists for a variety of lengths in different jurisdictions. The length of the term can depend on
several factors, including the type of work (e.g. musical composition, novel), whether the work has been
published or not, and whether the work was created by an individual or a corporation. In most of the
world, the default length of copyright is the life of the author plus either 50 or 70 years. In the United
States, the term for most existing works is a fixed number of years after the date of creation or
publication. In some countries (for example, the US and the UK), copyrights expire at the end of the
calendar year in question.

In India, the duration of the copyright is the life of the author plus 60 years.

1.6 LIMITATIONS & EXCEPTIONS TO COPYRIGHT

The expression ‘limitations and exceptions to copyright’ refers to situations in which the exclusive rights
granted to authors, or their assignees under copyright law do not apply.

1.6.1 IDEA-EXPRESSION DICHOTOMY

The idea-expression divide or idea-expression dichotomy is a concept which explains the appropriate
function of copyright laws, which are generally designed to protect the fixed expression or manifestation

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of an idea rather than the fundamental idea itself. The case of Baker v. Selden was the first U.S. Supreme
Court case to fully explain this doctrine, holding that exclusive rights to the "useful art" (in this case
bookkeeping) described in a book was only available by patent; the description itself was protectable by
copyright.

1.6.2 FIRST-SALE DOCTRINE AND EXHAUSTION OF RIGHTS

Copyright law does not restrict the owner of a copy from reselling legitimately obtained copies of
copyrighted works, provided that those copies were originally produced by or with the permission of the
copyright holder. It is therefore legal, for example, to resell a copyrighted book or CD. In the United
States this is known as the first-sale doctrine, and was established by the courts to clarify the legality of
reselling books in second-hand bookstores.

Some countries may have parallel importation restrictions that allow the copyright holder to control the
aftermarket. This may mean for example that a copy of a book that does not infringe copyright in the
country where it was printed does infringe copyright in a country into which it is imported for retailing.
The first-sale doctrine is known as exhaustion of rights in other countries and is a principle that also
applies, though somewhat differently, to patent and trademark rights. It is important to note that the first-
sale doctrine permits the transfer of the particular legitimate copy involved. It does not permit making or
distributing additional copies.

1.6.3 FAIR USE AND FAIR DEALING

Copyright does not prohibit all copying or replication. In the United States, the fair use doctrine, codified
by the Copyright Act of 1976, permits some copying and distribution without permission of the copyright
holder or payment to same.

The statute does not clearly define fair use, but instead gives four non-exclusive factors to consider in a
fair use analysis. Those factors are:

 The purpose and character of the use

 The nature of the copyrighted work
 The amount and substantiality of the portion used in relation to the copyrighted work as a whole
 The effect of the use upon the potential market for or value of the copyrighted work

In the United Kingdom and many other Commonwealth countries, a similar notion of fair dealing was
established by the courts or through legislation. The concept is sometimes not well defined; however in
Canada, private copying for personal use has been expressly permitted by statute since 1999. In Australia,
the fair dealing exceptions under the Copyright Act 1968 are a limited set of circumstances under which
copyrighted material can be legally copied or adapted without the copyright holder's consent.

Fair dealing uses are research and study; review and critique; news reportage and the giving of
professional advice (i.e. legal advice). Under current Australian law it is still a breach of copyright to

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copy, reproduce or adapt copyright material for personal or private use without permission from the
copyright owner. Other technical exemptions from infringement may also apply, such as the temporary
reproduction of a work in machine readable form for a computer.
Educational use is regarded as ‘fair use’ in most jurisdictions, but the restrictions vary wildly from nation
to nation.

1.6.4 TRANSFER AND LICENSING

A copyright, or aspects of it, may be assigned or transferred from one party to another. For example, a
musician who records an album will often sign an agreement with a record company in which the
musician agrees to transfer all copyright in the recordings in exchange for royalties and other
considerations. The creator (and original copyright holder) benefits, or expects to, from production and
marketing capabilities far beyond those of the author.

A copyright holder need not transfer all rights completely, though many publishers will insist. Some of the
rights may be transferred, or else the copyright holder may grant another party a non-exclusive license to
copy and/or distribute the work in a particular region or for a specified period of time. A transfer or
license may have to meet particular formal requirements in order to be effective. Under Australian law, it
is not enough to pay for a work to be created in order to also own the copyright. The copyright itself must
be expressly transferred in writing.

Under the U.S. Copyright Act, a transfer of ownership in copyright must be memorialized in a writing
signed by the transferor. For that purpose, ownership in copyright includes exclusive licenses of rights.
Thus exclusive licenses, to be effective, must be granted in a written instrument signed by the grantor.
Transfers of copyright ownership, including exclusive licenses, may and should be recorded in the U.S.
Copyright Office. (Information on recording transfers is available on the Office's web site.) While
recording is not required to make the grant effective, it offers important benefits, much like those obtained
by recording a deed in a real estate transaction.

Copyright may also be licensed. Some jurisdictions may provide that certain classes of copyrighted works
be made available under a prescribed statutory license (e.g. musical works in the United States used for
radio broadcast or performance). This is also called a compulsory license, because under this scheme,
anyone who wishes to copy a covered work does not need the permission of the copyright holder, but
instead merely files the proper notice and pays a set fee established by statute for every copy made.
Failure to follow the proper procedures would place the copier at risk of an infringement suit. Because of
the difficulty of following every individual work, copyright collectives or collecting societies and
performing rights organizations (such as ASCAP, BMI, and SESAC) have been formed to collect
royalties for hundreds (thousands and more) works at once. Though this market solution bypasses the
statutory license, the availability of the statutory fee still helps dictate the price per work collective rights
organizations charge, driving it down to what avoidance of procedural hassle would justify.

1.6.5 SIMILAR LEGAL RIGHTS

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Copyright law covers the creative or artistic expression of an idea. Patent law covers inventions.
Trademark law covers distinctive terms, marks, and names that are used in relation to products or services
as indicators of origin, as does (in a similar fashion), Trade dress and Design patents cover the look or
appearance of a manufactured or functional article. Trade secret law covers secret or sensitive knowledge
or information.

Although copyright and trademark laws are theoretically distinct, more than one type of them may cover
the same item or subject matter. For example, in the case of the Mickey Mouse cartoon, the image and
name of Mickey Mouse would be the subject of trademark legislation, while the cartoon itself would be
subject to copyright. Titles and character names from books or movies may also be trademarked while the
works from which they are drawn may qualify for copyright.

Once the term of a copyright has expired, the formerly copyrighted work enters the public domain and
may be freely used or exploited by anyone. Courts in the United States and the United Kingdom have
rejected the doctrine of a common law copyright. Public domain works should not be confused with
works that are publicly available. Works posted in the internet for example, are publicly available, but are
not generally in the public domain. Copying such works may therefore violate the author's copyright.

1.6.6 DEFINITION OF "COPY"

There are different approaches to the issue of what is a "copy" of a copyright-protected work. For
example, several important rights under United States copyright law exist only for “copies” of works –
material objects in which the work is embodied. A three-dimensional counterpart of a two-dimensional
drawing is usually not a “copy” of the drawing, under United States copyright law.

1.6.7 TYPEFACES

In typography, a typeface is a set of one or more letters, in one or more font sizes, designed with stylistic
unity, each comprising a coordinated set of glyphs. In the United States, the Copyright Office maintains
that typeface designs are not covered by copyright, and it will not accept applications for their
registration.

1.6.8 ACCESSIBLE COPIES

It is legal in several countries including the United Kingdom and the United States to produce alternative
versions (for example, in large print or Braille) of a copyrighted work to provide improved access to a
work for blind and visually impaired persons without permission from the copyright holder.

2. COPYRIGHT INFRINGEMENT

2.1 INTRODUCTION

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Copyright infringement (or copyright violation) is the unauthorized use of material that is covered by
copyright law, in a manner that violates one of the copyright owner's exclusive rights, such as the right to
reproduce or perform the copyrighted work, or to make derivative works.

For electronic and audio-visual media, unauthorized reproduction and distribution is referred to as piracy.
The practice of labeling the act of infringement as "piracy" actually predates copyright itself. Even prior
to the 1709 enactment of the Statute of Anne, generally recognized as the first copyright law, the
Stationers' Company of London in 1557 received a Royal Charter giving the company a monopoly on
publication and tasking it with enforcing the charter. Those who violated the charter were labeled pirates
as early as 1603

2.2 REMEDIES AGAINST INFRINGEMENT

In case of infringement of copyright a civil suit can be instituted in the district court or High Court having
jurisdiction to try the suit. A suit must be filed within the period of 3 years from the date of infringement
There are three types of remedies available against infringement of copyright namely, civil, criminal and
administrative

 CIVIL REMEDIES include injunction, damages or account of profits, delivery-up of infringing

copies & damages for conversion.

 CRIMINAL REMEDIES grant imprisonment which may extend from a minimum period of 6
months to a maximum of 3 years with a fine of around Rs. 50,000/- to 200 lakhs, & seizure of
infringing copies & delivery-up of infringing copies to the owner of the copyright.

 ADMINISTRATIVE REMEDIES consist of moving the Registrar of copyright to ban the

import of infringing copies into India & delivery-up of the infringing copies confiscated to the
owner of the copyright.

2.3 INFRINGEMENT SUIT IN U.S.

U.S. law requires a copyright holder to establish ownership of a valid copyright. Assuming the plaintiff
proves ownership of a valid copyright, the holder must then establish both actual copying and improper
appropriation of the work. The burden lies with the plaintiff to establish these three elements in what is
known as the prima facie case for infringement

2.3.1 OWNERSHIP OF A VALID COPYRIGHT

A plaintiff establishes ownership by authorship (by the plaintiff itself or by one who assigned rights to the
plaintiff) of
(1) an original work of authorship that is
(2) fixed in a tangible medium (e.g. a book or musical recording).

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Registration is not required for copyright itself, but in most cases is a jurisdictional requirement to bring
the suit. Registration is also useful because it gives rise to the presumption of a valid copyright, and
eliminates the innocent infringement defense, and (if timely made) it allows the plaintiff to elect statutory
damages, and to be eligible for a possible award of attorney fees.

Works that are not sufficiently original, or which constitute facts, a method or process cannot enjoy copy
protection. U.S. Courts do not recognize the "sweat of the brow" doctrine, which originally allowed
protection for those who labored to collect and organize facts. To combat this, business which assemble
databases of information have relied on contract law where copyright law offers no protection. For a work
to be original, it must possess a "modicum of creativity", which is a "low threshold" although some
creativity must exist.

Copyright protects the fixed expression of ideas, but not the ideas themselves. (Ideas are protected by
patents). Nevertheless, an expression must exist in a fixed tangible medium. A movie script writer who
discusses a plot idea which has not yet been written would not be protected if another heard his idea and
wrote a screenplay himself.

2.3.2 PROOF OF ACTUAL COPYING

A plaintiff establishes actual copying with direct or indirect evidence. Direct evidence is satisfied either
by a defendant's admission to copying or the testimony of witnesses who observed the defendant in the
act. More commonly, a plaintiff relies on circumstantial or indirect evidence. A court will infer copying by
a showing of a ‘striking similarity’ between the copyrighted work and the alleged copy, along with a
showing of both access and use of that access. A plaintiff may establish access by proof of distribution
over a large geographical area, or by eyewitness testimony that the defendant owned a copy of the
protected work. Access alone is not sufficient to establish infringement. The plaintiff must show a
similarity between the two works, and the degree of similarity will affect the probability that illicit
copying in fact occurred in the court's eyes. Even then, the plaintiff must show that the copying amounted
to improper appropriation. Indeed, the US Supreme Court has held that not all copying constitutes
infringement and a showing of misappropriation is necessary.

2.3.3 MISAPPROPRIATION

A copyrighted work may contain elements which are not copyrightable, such as facts, ideas, themes, or
content in the public domain. A plaintiff alleging misappropriation must first demonstrate that what the
defendant appropriated from the copyrighted work was protectable. Second, a plaintiff must show that the
intended audience will recognize substantial similarities between the two works. The intended audience
may be the general public, or a specialized field. The degree of similarity necessary for a court to find
misappropriation is not easily defined. Indeed, "the test for infringement of a copyright is of necessity
vague.”

Two methods are used to determine if unlawful appropriation has occurred: the subtractive method and
the totality method.

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  The subtractive method, also known as the "abstraction/subtraction approach" seeks to analyze
what parts of a copyrighted work are protectable and which are not. The unprotected elements are
subtracted and the fact finder then determines whether substantial similarities exist in the
protectable expression which remains. For instance, if the copyright holder for West Side Story
alleged infringement, the elements of that musical borrowed from Romeo and Juliet would be
subtracted before comparing it to the allegedly infringing work because Romeo and Juliet exists
in the public domain.
 The totality method, also known as the "total concept and feel" approach takes the work as a
whole with all elements included when determining if a substantial similarity exists. The
individual elements of the alleged infringing work may by themselves be substantially different
from their corresponding part in the copyrighted work, but nevertheless taken together be a clear
misappropriation of copyrightable material.

Modern courts may sometimes use both methods in its analysis of misappropriation. In other instances,
one method may find misappropriation while the other would not, making misappropriation a contentious
topic in infringement litigation.

3. CASES OF COPYRIGHT INFRINGEMENT

3.1 CCH CANADIAN LTD. V. LAW SOCIETY OF UPPER

CANADA (2004)

CCH Canadian Limited v. Law Society of Upper Canada, is the landmark Supreme Court of Canada case
that establishes the bounds of fair dealing in Canadian copyright law. The Law Society of Upper Canada
was sued for copyright infringement for providing photocopy services to researchers. The Court
unanimously held that the Law Society's practice fell within the bounds of fair dealing.

3.1.1 BACKGROUND

Since 1954 the Law Society of Upper Canada offered request-based, non-profit photocopying services to
students, members, judiciary, and authorized researchers at their "Great Library in Osgoode Hall. The
Law Society provided single copies of legal articles, statutes, and decisions to those who requested.

The Law Society argued that the service they offer is necessary to providing equal access the library’s
collection of legal materials. Many of the materials are non-circulating which makes access to the original
copies difficult to those who do not work near-by.

Three of the largest publishers of legal sources, CCH Canadian Limited, Carswell Thomson Professional
Publishing and Canada Law Book Inc., sued the Law Society for copyright infringement.

3.1.2 RULING

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The unanimous judgment of the court was given by Chief Justice McLachlin. The Court held that the Law
Society did not infringe any copyright when single copies of decisions, statutes, regulations, etc. were
made by the library.

The court was asked four questions:

 Are the Publishers' Materials "Original Works" Covered by Copyright?
 Did the Great Library authorize copyright infringement by maintaining self-service photocopiers
and copies of the publishers' works for its patrons' use?
 Were the Law Society's dealings with the publishers' works "fair dealing/s" under s. 29 of the
Copyright Act?
 Did Canada Law Book consent to have its works reproduced by the Great Library?

In referencing Théberge v. Galerie d'Art du Petit Champlain inc., McLachlin emphasized the importance
of balancing “the public interest in promoting the encouragement and dissemination of works of the arts
and intellect and obtaining a just reward for the creator.”

1. SUBSISTENCE OF COPYRIGHT

To answer the first issue, the Court looked at what is considered the meaning of “original work”.
McLachlin rejected “minimal degree of creativity” test but agreed with the assessment of the
“sweat of the brow” approach and finds it too low a requirement. Instead, McLachlin takes the
middle ground by requiring “that an original work be the product of an exercise of skill and
judgment”. Most importantly, it is required that the work “originate from an author and is not
copied from another work”. In concluding, she noted that head notes, summaries, and topical
indices are sufficient exercises of skill and judgment that they are “original” works. Thus, in
copying the material the publishers could only enforce infringements against copying. However,
she also notes that the judgments themselves are not copyrightable, nor are the typographical
corrections done by the editors sufficient to attract copyright protection.

2. AUTHORIZATION

The second issue asks whether, by providing library patrons with access to photocopiers, the
library was authorizing copyright infringement. McLachlin dismissed this argument by stating
that providing access did not suggest sufficient “authorization” to violate copyright. It is
presumed that a patron with access to the machines would use them lawfully.

3. FAIR DEALING

When claiming “fair dealing” the claimant must show that

1) The dealing was for the purpose of either research or private study and that
2) It was fair.

In interpreting “research” the Court states that it “must be given a large and liberal interpretation
in order to ensure that users' rights are not unduly constrained.” Consequently, it is not limited to

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 private and non-commercial contexts. Therefore, the library made the copies for research
purposes. McLachlin then examined the meaning of “fair” in the contexts of “dealings”. She cited
Lord Denning in Hubbard v. Vosper when he describes fair dealing as being a “question of
degree” that cannot be defined concretely.

She follows this by adopting the reasoning of Linden JA, which incorporated English and US
views, in defining six factors to determine fairness.
 the purpose of the dealing
 the character of the dealing
 the amount of the dealing
 alternatives to the dealing
 the nature of the work
 the effect of the dealing on the work.

In application of these factors to the facts McLachlin found that, given the restrictions put in place
by the Law Society for copying the materials, the library was acting fairly. McLachlin decided not
to answer the fourth issue.

3.1.3 SIMILAR CASES

Williams & Wilkins Co. v. United States, 1975, was an important intellectual property decision by the
federal Court of Claims, later affirmed by a per curiam opinion from an evenly divided United States
Supreme Court, with only eight justices voting. The decision held that it was a fair use for libraries to
photocopy articles for use by patrons engaged in scientific research.

This decision, written by Judge Oscar Davis, has been cited as part of the trend in which the courts will
take a cautious approach to intellectual property issues raised by the advent of new technology. Rather
than enforce the rights of the author articles by placing a prohibition on such copying, the Court in this
case held that this was not prohibited by the law as written, leaving it to the United States Congress to
address the issue through legislation.

3.2 MGM STUDIOS, INC. V. GROKSTER, LTD. (2005)

A US Supreme Court decision in which the Court unanimously held that defendant P2P file sharing
companies Grokster and Streamcast (maker of Morpheus) could be sued for inducing copyright
infringement for acts taken in the course of marketing file sharing software. The plaintiffs were a
consortium of 28 of the largest entertainment companies (led by Metro-Goldwyn-Mayer studios).

3.2.1 BACKGROUND

The case is frequently characterized as a re-examination of the issues in Sony Corp. v. Universal City
Studios, (1984), a case that protected VCR manufacturers from liability for contributory infringement.
MGM wanted makers of file sharing technology held liable for their users' copyright infringements. In

Copyright Infringement | Business Law Page 16

Sony, the court held that technology could not be barred if it was "capable of substantial non-infringing
uses.”

Grokster came before the Supreme Court having already won in two previous courts. The United States
District Court for the Central District of California originally dismissed the case in 2003, citing the
Betamax decision. Then a higher court, the Ninth Circuit Court of Appeals, upheld the lower court's
decision after acknowledging that P2P software has legitimate and legal uses.

Computer and Internet technology companies such as Intel, and trade associations including firms such as
Yahoo! and Microsoft, filed amicus curiae briefs in support of the file sharing companies, while the RIAA
and MPAA both sided with MGM. A list of briefs filed in the case is available at copyright.gov and
eff.org. Billionaire Mark Cuban partially financed Grokster's fight before the Supreme Court

3.2.2 RULING

The opinion was authored by Justice Souter, who wrote: "We hold that one who distributes a device with
the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative
steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

While the Court unanimously concurred that Grokster could be liable for inducing copyright
infringement, there was considerable disagreement over whether the case is substantially different from
the Sony case, and whether the precedent established by Sony should be modified.

The Court as a whole chose not to reexamine the Betamax precedent in the decision. It was reviewed only
as necessary to properly detail the issues involved in this case. Instead, a new and - as several critics have
contended - ambiguous test was developed to determine whether the software in question is not protected
by the Sony ruling. Briefly stated, it had to be shown that the distributors of the program have advertised
and/or otherwise induced its use for copyright infringement; if this intent can be shown, additional
contributory aspects may be relevant. For example, MGM et al. had asserted that the defendants' refusal to
incorporate protocols that would filter copyrighted materials from the file-sharing network constitutes an
intent to promote copyright infringement.

Justice Souter notes that "...in the absence of other evidence of intent, a court would be unable to find
contributory infringement liability merely based on a failure to take affirmative steps to prevent
infringement, if the device otherwise was capable of substantial non-infringing uses. Such a holding
would tread too close to the Sony safe harbor.”

Indeed, the decision does seem to leave sufficient leeway for developers in creating new products, as it
establishes guidelines to compliance with existing copyright law, and holds liable the distributors rather
than developers for copyright infringement.

3.2.3 EFFECTS OF THE DECISION

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On November 07, 2005 Grokster announced that it would no longer offer its peer-to-peer file sharing
service. The notice on their website said, "The United States Supreme Court unanimously confirmed that
using this service to trade copyrighted material is illegal. Copying copyrighted motion picture and music
files using unauthorized peer-to-peer services is illegal and is prosecuted by copyright owners."

As part of a lawsuit permitted by the MGM Studios v. Grokster Supreme Court decision, Grokster was
forced to pay $50 million to the music and recording industries. As of January 10, 2009, visiting the
Grokster website displays this message: "Your IP address is <your IP> and has been logged. Don't think
you can't get caught. You are not anonymous.“

Fearing lawsuits similar to MGM v. Grokster, Mark Gorton, the CEO of the firm that produces LimeWire,
said that he planned to stop distributing his file sharing program. In order to download the free LimeWire
client, users must now first agree to the statement "I will not use LimeWire for copyright infringement."

3.3 WARNER BROS. & J. K. ROWLING VS. RDR BOOKS

(2008)

Warner Bros. Entertainment, Inc. and J. K. Rowling vs. RDR Books is a copyright lawsuit brought on 31
October 2007 by the media company Warner Bros. and Harry Potter author J. K. Rowling against RDR
Books, an independent publishing company based in Muskegon, Michigan. Lawyers for Rowling and
Time Warner argued that RDR's attempt to publish for profit a print facsimile of The Harry Potter
Lexicon, a free online guide to the Harry Potter fictional universe, constituted an infringement of their
copyright and a violation of fair use. The trial was held from 14–17 April 2008 in the United States
District Court for the Southern District of New York. In September, 2008, the court ruled in Rowling's
favor, and publication of the book was blocked.

3.3.1 BACKGROUND

J K Rowling is the author of the world famous Harry Potter Book Series. RDR Books is an independent
publishing company based in Muskegon, Michigan. In 2000, Steve Vander Ark, a librarian from Grand
Rapids, Michigan, created the Harry Potter Lexicon, an online encyclopedia of the Harry Potter book
series that collected and reorganized various facts from the novels into a searchable form.

In August, 2007 Vander Ark was contacted by Roger Rapoport, President of RDR Books, and asked about
the possibility of publishing a for-profit print version of the site. Rapoport assured Vander Ark that such a
publication would be legal and he added an addendum to the contract that stated that RDR Books would
act to defend him in any future lawsuits.

On 31 October 2007, Warner Bros. and Rowling sued RDR Books to block the book's publication.

3.3.2 PLAINTIFFS’ ALLEGATION

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Rowling referred to the Lexicon as "wholesale theft of 17 years of [her] hard work". Rowling, who
previously had a good relationship with Vander Ark, reiterated on her website that she planned to write a
Harry Potter encyclopedia, and that the publication of a similar book before her own would hurt the
proceeds of the official encyclopedia, which she planned to give to charity.

In their suit, Rowling's lawyers also asserted that, as the book describes itself as a print facsimile of the
Harry Potter Lexicon website, it would publish excerpts from the novels and stills from the films without
offering sufficient "transformative" material to be considered a separate work.

On 16 January 2008, Rowling and Warner Bros. filed their full, 1,100 page complaint against RDR
Books, citing that the book "compiles and repackages Ms. Rowling's fictional facts derived wholesale
from the Harry Potter works without adding any new creativity, commentary, insight, or criticism.
Defendant's attempt to cloak the Infringing Book in the mantle of scholarship is merely a ruse designed to
circumvent Plaintiffs' rights in order to make a quick buck."

JK Rowling and Warner Bros. claimed that RDR's argument that the book is ‘transformative’ is wrong
because the book does not create "new information, new aesthetics, new insights and understandings”.
The statement also claimed that the book is devoid of analysis, commentary or anything else rising to the
level of scholarship and that, "Of the book's 2437 entries, 2034 simply lift information straight from the
series."

3.3.3 DEFENDANT’S CLAIM

A group of intellectual property lawyers at Stanford Law School said they would help defend RDR Books'
right to publish. Fair Use Project Executive Director Anthony Falzone said the Lexicon is protected by
U.S. law that has long given people "the right to create reference guides that discuss literary works,
comment on them and make them more accessible."

RDR Books in their official memorandum stated that "[Rowling] appears to claim a monopoly on the
right to publish literary reference guides, and other non-academic research, relating to her own fiction.
This is a right no court has ever recognized. If accepted, the right would dramatically extend the reach of
copyright protection, and eliminate an entire genre of literary supplements.”

David Hammer, lawyer for RDR, claimed that the need for a reference guide was greatest when the work
being discussed is most creative, and fantasy is presumably the most creative form of literature

3.3.4 THE TRIAL

The trial began on 14 April 2008 in the United States District Court for the Southern District of New
York, Robert P. Patterson, Jr. presiding as the judge with Rowling testifying on day one and Vander Ark
testifying on day two. The plaintiffs made their closing remarks on the third day of the trial. Rowling
claimed that "This case is about an author's right to protect their creation." In addition, she claimed that
the Lexicon was "sloppy, lazy" and "filled with errors," though RDR Books lawyer Anthony Falzone
noted that "Copyright law does not permit an author to suppress a book because she doesn't like it."

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Each side employed a literary expert to testify whether or not the Lexicon had copied text without
attribution. Rowling's lawyers said that the Lexicon consists largely of information taken from the books
and contains little interpretation or analysis.

3.3.5 VERDICT

On 8 September 2008, Judge Patterson decided the case in Rowling's favor, claiming that "because the
Lexicon appropriates too much of Rowling's creative work for its purposes as a reference guide, a
permanent injunction must issue to prevent the possible proliferation of works that do the same and thus
deplete the incentive for original authors to create new works.”

Patterson awarded the plaintiffs $750 for infringement of each of the seven Harry Potter novels and $750
for infringement of each of two official companion books (i.e., Quidditch Through the Ages and Fantastic
Beasts and Where to Find Them); the minimum amount possible, "since the Lexicon has not been
published and thus plaintiffs have suffered no harm beyond the fact of the infringement.” Patterson was
careful to draw a distinction between the Lexicon book and other potential guidebooks saying, "While the
Lexicon, in its current state, is not a fair use of the Harry Potter works, reference works that share the
Lexicon's purpose of aiding readers of literature generally should be encouraged rather than stifled".

Patterson ruled. "The Lexicon’s verbatim copying of highly aesthetic expression raises a significant
question as to whether it was reasonably necessary for the purpose of creating a useful and complete
reference guide."

Patterson rejected Rowling's argument that the book interfered with her plans to write a Harry Potter
encyclopedia, saying, "the market for reference guides to the Harry Potter works is not exclusively hers to
exploit or license, no matter the commercial success attributable to the popularity of the original works."

3.3.6 IMPLICATIONS

Matthew Rimmer, an Australian law expert, commented that the ruling "is an important precedent in
respect of the defense of fair use and it represents a victory of authorial rights over the freedoms of
secondary users of copyright works. The case leaves the way open for future conflict over derivative
works, character merchandising and fan fiction based upon the Harry Potter series."

David Ardia of the Citizen Media Law Project opined that, "there is some good news in the opinion for
fair use advocates. First, the court concluded that reference guides such as the Lexicon are transformative
in character and in order to fulfill their purpose they must be able to "make considerable use of the
original works. Second, reference works don't lose their transformative nature just because they lack
analysis or commentary. The court rejected Rowling's argument that the Lexicon is not transformative
because it fails to add these elements. Third, copyright holders cannot exert exclusive control over the
market for reference works. According to Judge Patterson, even a copyright holder as eager as Rowling is
to control through licensing all related markets must face limits."

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3.4 CASTLE ROCK ENTERTAINMENT, INC. V. CAROL
PUBLISHING GROUP, INC. (1998)

3.4.1 CASE FACTS

Castle Rock Entertainment Inc. v. Carol Publishing Group was a U.S. copyright infringement case
involving the popular American sitcom Seinfeld.

Castle Rock is the copyright holder and producer of each episode of the sitcom, Seinfeld. Beth Golub
wrote SAT: The Seinfeld Aptitude Test a 132-page book containing 643 trivia questions and answers
about the events and characters depicted in Seinfeld through her publisher, Carol Publishing Group. The
book contained 211 multiple choice questions, in which only one out of three to five answers were
correct; 93 matching questions; and a number of short-answer questions.

The book drew from 84 Seinfeld episodes that had been broadcast as of the time that the Carol Group
published The SAT. While Golub had created the incorrect answers, the questions and correct answers
were grounded in some part to a Seinfeld episode. A significant number of questions contained dialogue
from the show. The name "Seinfeld" was displayed prominently throughout the book, and it contained
pictures of the show's actors on several pages. The back cover contained a disclaimer which read, "This
book has not been approved or licensed by any entity involved in creating or producing Seinfeld."

In November 1994, Castle Rock contacted Carol Publishing Group concerning its copyright and
trademark infringement claims. Carol Publishing continued to publish The SAT and in February 1995,
Castle Rock filed an action in Federal District Court alleging federal copyright and trademark
infringement and state law unfair competition. Both defendant and plaintiff moved for summary
judgment.

Castle Rock succeeded in its motion for summary judgment. The Federal District Court for the Southern
District of New York held that Carol had infringed on Castle Rock's copyrights in Seinfeld and further
that the copying was not fair use. The district court entered final judgment against Carol and awarded
Castle Rock $403,000 with interest in damages. It permanently enjoined Carol from publishing or
distributing The SAT, and ordered that all copies in Carol's possession be destroyed. Carol appealed.

3.5.2 RULING OF THE APPEALS COURT

 PLAINTIFF HAS A PRIMA FACIE CASE FOR COPYRIGHT INFRINGEMENT

The appeals court noted that there was no dispute as to whether Castle Rock owned a valid
copyright in Seinfeld nor was it disputed that Carol Publishing copied material from the shows.
The question was only of misappropriation of protectable material.

The appeals court employed both a "qualitative vs. quantitative" method and a "total concept and
feel" approach in determining if Carol Publishing had misappropriated Seinfeld.

Copyright Infringement | Business Law Page 21

 The qualitative vs. quantitative approach sought to determine if the quality of the copied work
was actionable in an infringement lawsuit and if the quantity of the copied work was enough to
stake a claim. The court chose to take the Seinfeld series as a whole, rather than compare the
quantity of copied work from each of the 84 episodes individually. Altogether, the SAT contained
643 fragments from the entire series. The court held that this was a sufficient quantity of copying
to overcome the de minimis1 threshold alleged by Carol Publishing. When analysing the quality of
the copied material, the court rejected the defendant's position that Seinfeld trivia constituted facts
and was therefore not covered by copyright protection. It reasoned that the "facts" portrayed in
Seinfeld originated in the fictitious expression by the writers of the show. The court noted that the
book did not quiz readers on such facts as the location of the Seinfeld set or the biographies of the
actors, but on characters and events springing from the imagination of the show's authors.
Normally, the court would have eliminated those elements that did not meet the quality
requirements through the subtraction method in misappropriation analysis, but in finding nothing
to subtract the court held that the plaintiffs had established a prima facie2 case.

Nevertheless, Carol Publishing urged the court to consider the "total concept and feel" approach
rather than the subtraction method. The court noted that because the two works were of different
genres, other approaches would be less helpful. An "ordinary observer", the intended audience,
might be misguided in the differences between a book and television program to accurately
compare each work's total concept. The book contained no theme or plot, but only a random and
scattered collection of questions, its only concept being a test of Seinfeld trivia. From this
analysis, the court justified its approach and illustrated the possible different outcome it may have
reached had it accepted the defendant's proposed analysis.

 DEFENDANT'S INFRINGEMENT DOES NOT CONSTITUTE FAIR USE

The court provided a substantial analysis of Carol Publishing's fair use defense. Of particular
interest was its handling of the "transformative use" standard established in the Supreme Court's
opinion in Campbell. The court noted that the fundamental purpose of the fair use doctrine is
"promoting the Progress of Science and Useful Arts."

1. TRANSFORMATIVE USE UNDER THE PURPOSE & CHARACTER

STANDARD

The court held that the book's intended commercial use weighed against a finding of fair use. In
citing Campbell, "no man but a blockhead ever wrote, except for money." But the court further
held that the more critical inquiry was whether The SAT merely supplanted the Seinfeld episodes
or rather if it added something new, providing new insights, new aesthetics in the manner that the
fair use doctrine was meant to enrich society.

1
De minimis is a Latin expression meaning about minimal things, meaning that the law is not interested in trivial matters. In a
more formal legal sense it means something that is unworthy of the law's attention.
2
In common law jurisdictions, prima facie denotes evidence which (unless rebutted) would be sufficient to prove a particular
proposition or fact.Most legal proceedings require a prima facie case to exist, following which proceedings may then commence
to test it, and create a ruling.

Copyright Infringement | Business Law Page 22

 The defendant's claimed two arguments of transformative qualities in The SAT: first that the
subject matter of the work did not bar a finding of fair use, and second that the book was a
critique of the show. Specifically, the defendant's stylized The SAT as a work "decoding the
obsession with and mystique that surrounds Seinfeld by critically restructuring Seinfeld's
mystique into a system compete with varying levels of 'mastery' that relate the reader's control of
the show's trivia to knowledge of and identification with their hero, Jerry Seinfeld." In response,
Castle Rock retorted that "had defendant's been half as creative in creating The SAT as were their
lawyers in crafting these arguments about transformation, defendants might have a colorable fair
use claim."

The court rejected defendant's arguments holding that any transformative purpose posed by the
book was slight or non-existent. It concluded that the purpose of the book was to entertain the
Seinfeld audience with a book about Seinfeld, much the same purpose as the television show.
Finally, the court noted a potential source of confusion between the "transformative use" doctrine
and derivative works. The court emphasized that derivative works were based upon pre-existing
works. They transformed an original work into a new mode of expression, but unlike a work of
fair use expression, a derivative work's purpose was not transformed. In addition, when a
derivative work transformed an original work into a new mode of expression such that little
similarity remained, it would not infringe the copyright of the original work.

2. NATURE OF THE COPYRIGHTED WORK

The court looked to the second statutory factor under the Copyright Act of 1976: the nature of the
copyrighted work. A work's nature "calls for recognition that some works are closer to the core of
intended copyright protection than others, with consequence that fair use is more difficult to
establish when the former works are copied." The court held that the nature of Seinfeld was
fictional, and the second factor tends to favour works based on fact. Works of fiction generally
enjoy greater copyright protection because of their higher content of protectable material.
However, the court noted that transformative use can lessen the importance of the nature of the
copyrighted work, but since The SAT held slight or non-existent transformative purpose, the
fictional nature of Seinfeld disfavoured a finding a fair use.

3. AMOUNT AND SUBSTANTIALITY OF THE PORTION TAKEN

The third factor analysed by the court was whether the portion of copying furthered the purpose
and character of use or whether it went beyond what was necessary. Here again, the
transformative use affected the court's analysis. Use of a substantial part or the "heart" of a
protected work is justified when the character of the work is criticism or parody, because these
expressions necessarily demand a greater quantity to be useful. The court reasoned that a greater
degree of material from Seinfeld would be necessary for an accurate critique of the show's
"nothingness", but because the court found little transformative use for the purposes of critique,
this weighed against defendants. Indeed, the court reasoned that the 643 copied elements in the
trivia questions was a substantial portion taken for the rather "straight forward" commentary of
Seinfeld's meaninglessness, and this weighed against fair use.

Copyright Infringement | Business Law Page 23

 4. EFFECT OF USE ON THE MARKET

The court noted that the fourth factor was not to be given the greatest weight, but to be taken
equally with the other three in a determination of fair use. The analysis for market effect does not
look to whether the secondary work detracts from market of the copyrighted work, but rather does
it substitute the market of the original (the nature of copyright as a monopoly on publication does
not permit a substitution). The court held that the differences in form between The SAT and
Seinfeld and the lack of transformative purpose made the book a derivative work in a derivative
market. Because the SAT was the only Seinfeld trivia book in existence, it completely substituted
this derivative market for the show. The court further reasoned that even though Castle Rock did
not intend to enter the trivia book market, the existence of The SAT effectively usurped their right
to do so. If the derivative market was one that the copyright holder would generally develop or
license, a secondary author would be barred from entering it. On the other hand, if the market was
one generally protected by fair use, such as criticism, parody, or academic scholarship, the
copyright holder could not enter those markets and attempt to preclude secondary authors from
entering.

5. OTHER FACTORS AFFECTING FAIR USE

The court noted that the four factors enumerated in the fair use statute are not exclusive, but are
only a guide in the analysis. The court held that it was irrelevant whether Carol Publishing
continued to distribute The SAT after Castle Rock notified it of its infringement claim, because
such distribution would have been justified if the book was a fair use of Seinfeld. The court
concluded that other considerations affecting fair use such as the 1st Amendment and the public
interest were not relevant to the case. When taking all factors together, the court held that the
book was not fair use. In a final footnote, the opinion provided an answer key to all trivia
questions contained therein.

3.5 UMG SUES MYSPACE FOR COPYRIGHT INFRINGEMENT

(2006)

3.5.1 CASE FACTS

On November 17, 2006, Universal Music Group (UMG), a leading music publishing and record company
sued MySpace, a popular social networking site in the US, for copyright infringement of the work of its
artists.

With over 100 million users, MySpace, based in California, USA and owned by media conglomerate
News Corporation (News Corp.), is a popular social networking site that allows users to host their

Copyright Infringement | Business Law Page 24

personal webpages. It allows users to share photos, create blogs, upload music / videos, and build their
own network of friends. It also has an internal search engine and an e-mail system.

3.5.2 PLAINTIFF’S ALLEGATION

At the heart of the lawsuit is the frequency with which MySpace users upload videos to their personal
pages. The lawsuit, filed in the U.S. District Court for California's Central District, alleged that MySpace
helped its users to upload music videos and participated in the infringement process by re-formatting the
videos so that they could be shared among other users.

UMG further alleged that most of the content posted on MySpace was not "user-generated" and was
copied from content owners. Commenting on this, UMG said, "The foundation of MySpace is its so-
called 'user-generated content.' However, much of that content is not 'user-generated' at all. Rather, it is
the 'user-stolen' intellectual property of others, and MySpace is a willing partner in that theft."

UMG said that MySpace would have to pay UMG, US$ 1,50,000 as damages for each unauthorized
music or video posted on its site. UMG had already identified 60 copyright violations. Peter Lofrumento,
spokesperson for UMG, said, "Businesses that seek to trade off on our content, and the hard work of our
artists and songwriters, shouldn't be free to do so without permission and without fairly compensating the
content creators."

3.5.3 DEFENDANT’S CLAIM

MySpace called the lawsuit "meritless" and claimed its procedure for removing illegal downloads puts it
in compliance with the Digital Millennium Copyright Act. MySpace felt that UMG'S decision to file a
lawsuit was unfortunate and that the fine imposed was unjust. A spokesperson for MySpace, said,
"MySpace provides an extraordinary promotion platform for artists – from major labels to independent
acts – while respecting their copyrights. We have been keeping UMG closely apprised of our industry-
leading efforts to protect creators' rights, and it’s unfortunate they decided to file this unnecessary and
meritless litigation. We provide users with tools to share their own work - we do not induce, encourage, or
condone copyright violation in any way."

MySpace also said that it had made efforts to launch a new copyright protection tool, an audio
fingerprinting technology. The technology included a filtering system that automatically prevented
unauthorized music from being copied to another site. A release from MySpace, said, "We proactively
take steps to filter unauthorized music sound recordings and have implemented audio fingerprinting
technology. We will continue working to be the gold standard in protecting creators' rights."

Analysts cited MySpace as an example of the rising popularity of social networking and user generated
content in the Web 2.0 era. The term Web 2.0 was used to refer to second-generation websites where in
users could design their own pages, contribute content, and be a part of an online web community. There
was also evidence of the money making potential of these websites.

Copyright Infringement | Business Law Page 25

In August 2006, Google Inc. (Google), the leading online search engine, entered into a deal with Fox
Interactive Media (Fox Media), the parent company of MySpace. As per the deal, Google would pay Fox
Media US$ 900 million over a period of three years for the right to provide web search results and
sponsored ad links in MySpace.

But a main challenge for these Internet firms was the copyright issue as many users would post music or
videos for which they did not have the copyright. Some legal experts opined that websites like MySpace
sought protection through the 1998 Digital Millennium Copyright Act, a copyright law in the US, which
exempted Internet service providers from any liability as long as they removed the copyright infringing
material when notified of the violation. Moreover, given the backing of a large conglomerate like News
Corp., MySpace would have the resources to deal with any legal challenges. However, some analysts
expected MySpace to reach a settlement with UMG on the lawsuit.

3.5.4 COURT VERDICT

The Court finds that OMM did transgress its duties to UMG, but DENIES Plaintiff’s motion because a
number of factors, in the aggregate, enable the Court to fashion a remedy that achieves the purposes of the
applicable ethical rules without depriving Defendants of their right to select their own counsel. Those
factors include MySpace’s abandonment of the contentions and efforts that created the conflict; the
absence of any actual disclosure of confidential information; and the Court’s exercise of its inherent
authority to preclude MySpace from pursuing such conflict-triggering matters. In addition the Court will
require MySpace to reimburse UMG for its substantial attorney’s fees.

3.6 YAHOO SUED BY SUPER CASSETTES INDUSTRIES

(2008)

3.6.1 CASE FACTS

The Delhi High Court in India passed an interim injunction on Friday that prohibits Yahoo Video from
streaming copyright content from Indian music company, Super Cassettes Industries, according to the
lawyer representing the Indian company in this case. The court, after finding a prima-facie case, also
issued a notice to Yahoo and its Indian subsidiary.

The music company, which uses the brand T-Series, is seeking a permanent injunction and damages for
the alleged dissemination and display of its copyrighted content on Yahoo Video.

3.6.2 PLAINTIFF’S ALLEGATION

Super Cassettes Industries has filed the case against Yahoo under Indian copyright laws. A "cease and
desist" notice regarding the streaming of the copyright content was served on Yahoo and its Indian
subsidiary in late February, Super Cassettes Industries' lawyer Rahul Ajatshatru said Monday. Yahoo did
not remove the content identified in the notice, and instead asked the Indian company to follow

Copyright Infringement | Business Law Page 26

procedures laid down by Yahoo for reporting misuse of copyright content, Ajatshatru said. Yahoo ignored
a second notice sent by the Indian company in March.

Copyright Infringement | Business Law Page 27

3.6.3 DEFENDANT’S CLAIM

Yahoo will not comment on the case as the matter is before a court, a company spokeswoman said. Super
Cassettes Industries last year sued YouTube, owned by Google, for similar reasons. It obtained an interim
restraining order on YouTube in that case too, though the case has not been finally disposed.

The disputes pitting Yahoo and Google against Super Cassettes Industries points out to the differences
between Indian laws and the copyright infringement and takedown provisions of the U.S. Digital
Millennium Copyright Act (DMCA).

While Internet companies like Yahoo offer to remove copyright content that has been put up on their web
sites without permission, after sufficient proof is provided of the ownership of the copyright and its
misuse, Indian content providers demand that Internet companies take responsibility for identifying
misused copyright material and taking it down from their sites.

Super Cassettes publishes large numbers of videos and music cassettes, and it is not possible for the
company to spend time and resources to monitor copyright infringements on sharing sites like those of
Google and Yahoo, Ajatshatru said.

3.6.4 RULINGS

Along with issuing notice to Yahoo, the Delhi High Court also passed an interim-injunction against Yahoo
and specifically ordered that Yahoo, its officers, agents, servants and representatives, are restrained from
reproducing, adapting, distributing or transmitting in any manner on their website or otherwise, infringing
the copyright of T-Series in any manner, whether films and songs and underlying copyright works,
without obtaining an appropriate license from T-Series." Hearing in the Yahoo case had been posted for
September-end, 2008.

With its interim order, the Delhi High Court also appears to have put on Yahoo the onus for identifying
and removing misused copyright material from Super Cassettes Industries on Yahoo Video.

Copyright Infringement | Business Law Page 28

REFERENCES

 Journal of Intellectual Property Rights Volume 2 January 1997

 http://www.hg.org/article.asp?id=5298

 http://www.pcworld.com/businesscenter

 http://www.msnbc.msn.com

 http://www.icmrindia.org/business%20Updates/micro%20casestudies/IT%20&%20Systems/MCI
T0005.htm

 http://www.copynot.com/Copyrightlaw.html

 http://www.hg.org/article.asp?id=5298

 Linda Greenhouse, "Lively Debate as Justices Address Filesharing", New York Times, March 30,
2005. (http://www.nytimes.com/2005/03/30/technology/30bizcourt.html?_r=1 )

 Roben Farzad and Saul Hansell (2005-06-28). "Sharing Culture Likely to Pause but Not Wither",
The New York Times. Retrieved on 20 July 2006.
(http://www.nytimes.com/2005/06/28/technology/28peer.html?pagewanted=1&ei=5090&en=41f5
ea71b5f92739&ex=1277611200&adxnnl=1&partner=rssuserland&emc=rss&adxnnlx=115341190
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http://ssrn.com/abstract=965720

Copyright Infringement | Business Law Page 29