The Prior Art

Copyright Suits Can't Keep Potential Blockbusters out of Theaters

By Andrew Goldberg

Copyright infringement suits hang over two highly anticipated blockbuster sequels set for release over the Memorial Day weekend.

In one case, a federal district court judge in Missouri ruled Tuesday that The Hangover Part II could open as scheduled Thursday, despite an attempt by tattoo artist S. Victor Whitmill to enjoin the film over its use of boxer Mike Tyson's famous face tattoo. Whitmill created the tattoo for Tyson, and it appears in the movie encircling the left eyes of both Tyson, who makes a cameo appearance, and the character played by actor Ed Helms.

Whitmill sued Warner Bros. in April for copyright infringement, alleging that the tattoo in the movie is a duplication of his distinctive creation.

“There is substantial similarity between the copyrightable expression in the Original Tattoo and the Pirated Tattoo,” Whitmill argued in his complaint, filed by lawyer Geoffrey Gerber of the St. Louis-based BrickHouse Law Group, on April 28 in the Eastern District of Missouri. [Download Whitmill Complaint]

“Mr. Whitmill has never been asked for permission for, and has never consented to, the use, reproduction, or creation of a derivative work based on his Original Tattoo, including the Pirated Tattoo,” the suit argues. “Nor has he ever been asked or agreed to the public display and distribution of a motion picture containing the Pirated Tattoo, or to the use of any of his other exclusive rights in the Original Tattoo under the Copyright Act.”

Represented by attorneys with Schiff Hardin, Warner Bros. argued that any delay in the release of the movie would cause it enormous financial losses while also subjecting the studio to massive damages claims by movie theaters over lost ticket sales.

“Plaintiff seeks to enjoin the distribution of a major motion picture--and to do so just days before its national release on more than 7,000 screens in over 3,600 theatres,” the Schiff Hardin lawyers wrote in their brief opposing a preliminary injunction. “The harm to Warner Bros. and numerous third parties from such an injunction would be devastating.”

District Court Judge Catherine D. Perry agreed, declining to deprive Hangover fans of a chance to see the sequel over the holiday weekend, but also, according to Gerber, delivering some sobering news to the studio about its potential liability at trial.

“Judge Perry said that my client has a ‘strong likelihood of success’ on the merits and will probably win the case at trial for money damages,” Gerber--who noted that the judge said most of Warner Bros.’ defenses were “just silly”--said in an interview with The Prior Art.

 “We lost a motion for a preliminary injunction, so we’re obviously disappointed that our client is being irreparably harmed by the widespread release of the movie,” said Gerber. “But at the same time, we understand and appreciate the judge’s concern for innocent third parties likely to be harmed by an injunction – like movie theaters – who shouldn’t be held responsible for Warner Bros.’ conduct.”

Frederick Sperling, a partner in Schiff Hardin’s Chicago office who is representing the studio, says that  “the court’s ruling protects the interest of the public as well as those of Warner Bros.” Sperling adds that “Warner Bros. believes the claims against it are without merit and intends to vigorously defend its rights.”

Although the amount Whitmill ultimately decides to ask for in damages will be based on how well the movie does at the box office and in DVD sales, there’s reason to believe the figure will be substantial. The Hangover grossed over $277 million in the U.S. and over $467 million worldwide, according to Box Office Mojo, a site that tracks box office results. Still, to be compensated, Whitmill must show how much the infringement itself contributed to Warner Bros.’ profits from the film.   

Calling Whitmill’s copyright claim “radical,” Warner Bros. argues in its opposition brief that “the very copyrightability of tattoos is a novel issue,” and that the plaintiff is not entitled “to control the use of a tattoo that he created on the face of another human being.” In any event, the studio says, the tattoo on the face of Ed Helms in the sequel constitutes a fair use parody of Tyson’s tattoo, and the plaintiff shouldn’t be allowed to sue over it now because he never objected to the use of tattoo in the first movie (Tyson made a brief, memorable appearance in that film as well). [ Download Warner Bros. Opposition to Injunction]

“They put the tattoo in every trailer and every single television commercial, and almost all of the print advertising. And they put an $80 million marketing budget behind it to sell this movie. That’s not a parody. It’s a straight up commercial use of someone else’s art,” Gerber told The Prior Art. “I saw absolutely no parody and the judge saw no parody,” he said.

Another film that won’t be prevented from opening this weekend but also still faces a copyright infringement suit is DreamWorks Animation’s Kung Fu Panda 2. That suit was filed against DreamWorks in February by Jayme Gordon, another artist.

Unlike Whitmill, Gordon, who is represented by Fish & Richardson and Duane Morris, never sought  to block the nationwide premiere of the sequel over the copyright issue. He is, however, hoping to take a big bite out of the studio’s past and future profits from the movies about Po, the paunchy Kung Fu-fighting panda.

Gordon claims that the studio copied many of the characters, plot elements, and settings in the movie from his illustrated literary works. Specifically, he alleges that Po, the portly panda voiced by Jack Black, is a virtual double for Kidd, a giant panda that Gordon first drew in the early 1990s. Gordon further contends that both pandas are supported by a group of the same five fighting animals and befriend small red panda kung fu masters who use chopsticks while fighting.

In an answer to the complaint filed on May 6, DreamWorks, represented by Foley Hoag and Loeb & Loeb, denies Gordon’s allegations. It acknowledges that while the plaintiff did indeed submit an unsolicited package to DreamWorks in October 1999, that package was rejected and returned uncopied in accordance with the company’s policy regarding unsolicited material. [ Download Panda - Answer by Dreamworks]. (Gordon filed an Amended Complaint in the case on April 19, reasserting his claims against the studio.) [ Download Gordon Amended Complaint]

DreamWorks also asserts several affirmative defenses in its court filing, including that its work was independently created and that Gordon’s suit, which wasn’t filed until more than two years after the release of Kung Fu Panda in 2008, is no longer timely.

Whatever happens at the box office, it’s sure to be a busy summer in court for Hollywood’s copyright lawyers.

Standing Still: Righthaven Litigation Campaign Hits New Roadblock

By Andrew Goldberg

Could it be the beginning of the end for Righthaven?

The Las Vegas-based copyright holding company, which has endured a string of legal setbacks in the last couple of months, suffered another one last week when a federal judge in Colorado halted all the copyright infringement suits brought by Righthaven in the state pending a review of whether the company has the legal standing to sue over an airport security pat-down photo originally published in the Denver Post.

"Because there are serious questions as to whether my exercise of subject matter jurisdiction over Righthaven's claim of copyright infringement is proper, I think it most prudent to stay the proceedings in all pending cases in this District in which Righthaven is the named Plaintiff," wrote Judge John Kane in an order issued last Thursday. "Should I find that I lack subject matter jurisdiction over Righthaven's claim of copyright infringement, it is likely that I will be required to dismiss all pending actions." [ Download Righthaven - Judge Kane Order]

The stay issued by the court in Colorado follows a decision last month by a federal judge in Nevada to unseal the licensing agreement Righthaven signed with its other newspaper partner, the Stephens Media-owned Las Vegas Review-Journal. That agreement, which was unsealed at the request of the Electronic Frontier Foundation, revealed that Righthaven had been granted the right to bring infringement actions but had not actually been granted full copyrights in the articles over which it was suing. 

Is The Dot Future Now? The ABC's of the New gTLDs

Last week, the House Judiciary Subcommitte on Intellectual Property, Competition, and the Internet held a hearing on ICANN's new generic top-level domain (gTLD) program, which would greatly expand the number of Internet suffixes to potentially include anything and everything from .music to .cars. At the hearing, congressmen from both sides of the aisle, as well as trademark owners, expressed concerns about the new proposal, ranging from the costs to the potential for trademark infringement.

Jeff Neuman, the VP for Law and Policy at Neustar -- a company that is serving as the technical registry backend provider for many new top-level domains -- attended the congressional hearing. As the head legal counsel for all the domain name registries, mobile registries, and media services at Neustar, and as the Vice Chair of the Generic Name Supporting Organization, a council that is part of ICANN's policy arm, Neuman is well acquainted with the new gTLD process. He agreed to help get Prior Art readers up to speed. The following is an edited transcript of our phone conversation:

The Prior Art (TPA): Who can apply to create and run a new gTLD?

Jeff Neuman:  This new round of generic top-level domains (gTLDs) is the first unlimited round that they’re opening pretty much ever.  So technically, it’s open to anyone. There are no restrictions on who applies. But it’s a very stringent process that’s been developed over the last seven years through ICANN’s policy development process and through consultations with governments around the world, intellectual property attorneys, and a whole host of industry associations and groups. There is a significant barrier to entry in the application fee itself. In order to apply, you have to pay ICANN an application fee of $185,000. Because of that, we see two types of applications: One type is for very large companies and large brand owners to expand their presence online, as a great marketing tool for those large companies. We also see, somewhat to a lesser extent, a market there for new generic spaces, whether that be for a .web, a .music, or a .hotel. So you can have some very generic spaces like that, but also a number of corporations have come forward that have expressed an interest in applying for a new gTLD to represent their company. Companies that have already come forward include Canon, Hitachi, and IBM.

TPA:  Are there any limits on what can be registered as a new gTLD?

Neuman:  It’s anything under the sun up to 63 characters. Remember, this is all to the right of the dot, so this is all at the top-level.

TPA:  So how will ICANN decide which gTLDs will be chosen?

Neuman:  There is a 350-page applicant guidebook that is in the final revision state. ICANN is supposed to come out with its very final one on May 30. There are a bunch of objective criteria that they have to use and they really try to make it as objective as possible so as not to bring any subjectivity into the  decisionmaking of saying, well, we like the example of a .television and a .radio but we don’t like the example of .law. It’s really not up to ICANN to make subjective decisions as to what words or strings they allow. It’s more of looking at who is the applicant. Does the applicant have the financial, technical, business wherewithal to actually run a top-level domain? For those that claim to represent what’s called a community, do they have community support to run that top-level domain?

TPA:  What about the potential for trademark infringement if one company registers a gTLD containing the trademark of another company?

Neuman:  If I wanted to apply for someone else’s trademark – For example, if I wanted to apply for a .apple and I’m not the Apple corporation, and I’m doing it in a way that infringes on Apple’s trademarks --  there’s a process for [the trademark owner] to come in and object to that. There are rules and restrictions. If I wanted to apply for something that’s deemed to be morally objectionable by governments or by certain classes of citizens, then there’s an objection process as well for that to make sure that I don’t apply for something like a .nazi, to make sure that governments are okay with what’s being proposed.

Google Loses Newspaper Copyright Case in Belgium

By Andrew Goldberg

Google is prohibited from publishing snippets of, or even linking to, articles and photos from Belgian newspaper websites, a Belgian appeals court ruled this week.

The decision, which upholds a lower court’s 2007 copyright ruling forcing Google to remove all content and links from French-and-German-language newspapers in Belgium, is surely a setback for the search giant, but is also potentially an even bigger blow to innovation in Europe.

“We believe that referencing information with short headlines and direct links to the source -- as it is practiced by search engines, Google News and just about everyone on the web -- is not only legal but also encourages web users to read newspapers online," Google told Bloomberg in a statement following the ruling.

The court's decision could impact Google's ability to introduce other news initiatives. More than a year before Google announced One Pass in the U.S., -- its forthcoming effort to help publishers sell digital subscriptions -- it unofficially unveiled Fast Flip, an experimental future news service designed to revolutionize the way readers browse their favorite publications on the web.

RPX Announces Price of IPO

RPX Corporation, which bills itself as a defensive patent aggregator and aims to neutralize NPEs (aka patent trolls) by buying up patents and licensing them to clients for an annual subscription fee, announced today that its initial public offering exceeded expectations, raising approximately $159.6 million.

The company, co-founded by Intellectual Ventures veterans John Amster and Geoffrey Barker, filed for the IPO in January and had hoped to raise $100 million. The offering, however, priced higher than anticipated, bringing in $19/share compared to an anticipated $16 to $18/share.

As of the end of March, RPX had lined up 80 clients, including hightech heavyweights like Google, Cisco, Nokia, and Verizon. It brought in $94.9million in revenue in 2010.

RPX began trading today on the Nasdaq exchange under the "RPXC" ticker symbol. The stock initially spiked to $24.36 before falling to $23.05 in early morning trading.