Beatles documentary reproducing twelve songs in their entirety is not fair use

Author: Eleonora Rosati (University of Southampton and e-LAWnora)

Sony/ATV Music Publishing LLC & Another v WPMC Ltd & Another [2015] EWHC 1853 (Ch), Chancery Division, England and Wales, 1 July 2015

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpv144, first published online: September 2, 2015

In his decision Arnold J ruled, among other things, that the unauthorized use of twelve songs by the Beatles for inclusion in a documentary on their first US concert could not be considered fair use under §107 of the US Copyright Act.

Legal context

The Beatles in 1964

What the High Court had to determine in this case was (1) whether (under English law) a collateral contract to grant a synchronization licence was concluded during the negotiations between the claimants and the defendants; (2) whether (under English law), if no collateral contract was concluded, the claimants were estopped from denying that they had granted a synchronization licence; (3) whether the exploitation of the documentary in the US (currently subject to consideration in parallel US proceedings) would infringe the US copyrights in the works, or whether instead the fair use defence under §107 of the US Copyright Act would apply.

Facts

In 1964 the Beatles held their first US concert at the Washington DC Coliseum. On that occasion the group performed twelve songs. The 35 min concert was videotaped for subsequent exhibition at cinemas and theatres across the US.

In 2009 one of the defendants (Iambic) acquired a copy of the master tape of the concert video to make a documentary of the concert. Subsequently it transferred the rights to the tape to the first defendant (WPMC). Between 2009 and 2010 Iambic negotiated with the claimants (collectively SATV, holders of the rights to the relevant Beatles songs) for a licence to reproduce and otherwise exploit the works as part of the soundtrack to the documentary. No synchronization licence was executed as a result of these negotiations.

In 2012 SATV discovered that the documentary was being promoted by a means of a website and a trailer. SATV thus brought proceedings in both the UK (where the documentary had been made) following the UK Supreme Court decision in Lucasfilm Limited and Others v Ainsworth and Another [2011] UKSC 39, and the US (this being the defendants' principal target market).

Analysis

In relation to the issue whether a collateral contract to grant a synchronization licence was concluded during the negotiations, Arnold J held that no contract could be considered to subsist between the claimants and the defendants.

Turning to the point whether, if no collateral contract was concluded, the claimants were estopped from denying that they had granted a synchronization licence, the judge relied on Motivate Publishing FZ LLC and Another v Hello Limited [2015] EWHC 1554 (Ch) to hold that the defence of proprietary estoppel is not available in a case like the one at hand, ie a ‘subject to contract’ case.

Finally Arnold J considered whether the exploitation of the documentary in the US would be eligible for the application of the fair use defence under §107 of the US Copyright Act. Among his preliminary observations, the judge addressed criticism of the fair use doctrine as being ‘indeterminate and unpredictable’ (para 100). He recalled that over the previous decade scholarly research in this area ‘has demonstrated that what at first blush may appear to be an amorphous mass of individual decisions can be analysed and categorized in the same way as other areas of common law (negligence, for example)’ (para 100).

The judge then undertook his analysis of the four fair use factors within §107 as the US Supreme Court interpreted them in Campbell v Acuff-Rose Music (92–1292), 510 US 569 (1994). With particular regard to the first three factors, he rejected the claimants' argument that, to succeed in a fair use defence, the defendant must show that no more has been taken of the protected work than is necessary for the transformative purpose. Instead, ‘what the defendant must show is that the amount taken is reasonable, and not excessive. If no more is taken than is necessary, then that will be reasonable. The defendant does not have to show that he has taken the minimum necessary, however’ (para 107).

The judge also accepted WPMC's contention that ‘it can be fair use to copy the whole of the copyright work where this is justified by the transformative purpose, particularly but not exclusively if the copy is not a high quality one (eg where an image is reduced in size)’ (para 108).

This said, Arnold J ruled, however, that the inclusion of the copyright works in the documentary could not be considered fair use because the Beatles' songs in it ‘are expressive works within the core of copyright protection; the use is a commercial one; the use is only partly transformative; the [c]opyright [w]orks are reproduced in their entirety; the extent of the reproduction is excessive having regard to the transformative purpose; and to permit such use would be likely to damage the market for, or potential value of, the [c]opyright [w]orks’ (para 122).

Practical significance

Besides issues relating to existence of a contract and proprietary estoppel, the importance of this case lies in the appreciation of the fair use doctrine by a court outside the US. In reviewing the relevant fair use factors, not only did Arnold J address the main criticisms against this doctrine but also provided a clear overview of the current law on fair use.

Considering the sometimes contrasting approaches at the level of US courts, this judgment sheds light on controversial aspects of the fair use doctrine. By tackling issues such as transformativeness, Arnold J clarified both that: (1) what is required for a finding of fair use is that the defendant proves that what he/she has taken from the original work is reasonable, rather than the minimum necessary, and (2) reproduction of a work as a whole does not prevent per se a finding of fair use.

Good faith belief of patent invalidity not a valid defence to induced infringement

Author: Kevin Winters (Trainee Solicitor Shepherd and Wedderburn, Edinburgh)

Commil USA, LLC v Cisco Systems, Inc 575 U.S. __ (2015)

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpv131, first published online: August 20, 2015

The United States Supreme Court has held that it is no defence to induced infringement that the alleged infringer had a good faith belief that the patent was invalid.

Legal context C

Commil USA, LLC (‘Commil’) claimed that Cisco Systems Inc (‘Cisco’) had induced other parties to infringe Commil’s rights under 35 U.S.C. §271 (b) of the Patent Act through the selling of infringing wireless equipment to other parties.

Facts

Commil USA, LLC, originally brought proceedings against Cisco Systems, Inc, for both direct and induced infringement of its patent for a method of implementing short-range wireless networks. Cisco Systems, Inc, made and sold wireless equipment.

In the District Court, Cisco objected to the instruction given to the jury concerning Cisco's alleged induced infringement. The court directed the jury that they could find Cisco guilty of induced infringement if “Cisco actually intended to cause the acts that constitute … direct infringement and that Cisco knew or should have known that its actions would induce actual infringement”.

After the jury found Cisco liable for induced infringement, the US Supreme Court gave its ruling in Global-Tech Appliances Inc v SEB SA 563 US __ (2011), holding that in an action for induced infringement it must be shown that the alleged inducer knew that induced acts were infringing. Cisco therefore argued that the District Court's instruction to the jury was wrong, as it did not indicate that knowledge of the inducement was necessary. Cisco appealed the decision to the US Court of Appeals for the Federal Circuit (CAFC) which held that the District Court had acted erroneously in its instruction to the jury. This component of the case is to be the subject of a new trial, with the knowledge element to be added to the jury's directions.

At issue before the Supreme Court was the District Court's refusal to allow Cisco to adduce evidence that it had a ‘good faith’ belief that Commil's patent was invalid. The CAFC considered that the District Court erred in finding Cisco's evidence inadmissible, on the basis that such ‘evidence of an accused inducer's good-faith belief of invalidity may negate the requisite intent for induced infringement’. The Supreme Court agreed to consider the question whether a good faith belief in invalidity was a defence to induced infringement.

Analysis

The Supreme Court held that Cisco's ‘good-faith’ belief in the invalidity of Commil USA's patent was no defence to a claim of induced infringement, on the following grounds:

Infringement and invalidity are separate issues

The court pointed out that infringement and validity under the Patent Act 35 U.S.C. are treated as separate issues: non-infringement and invalidity are distinct defences which are available to defendants to raise either individually, or together. The court took the view that, if it were to interpret the terms of the legislation so to allow a defence of belief in patent invalidity, it would combine the two issues.

Preserving the presumption of patent validity

There was concern expressed that, if the court allowed a good-faith belief of invalidity to exist, this would destabilize the presumption in US patent law that a patent is valid. This presumption removes the need for plaintiffs to prove that their patent is valid before they bring a claim. If belief in invalidity was to be a defence to induced infringement, the court felt that the presumption of validity would be lessened, allowing a defendant to avoid liability for infringement if it could demonstrate a reasonable belief that the patent was invalid. This was deemed to be contrary to the ‘clear and convincing’ standard set by Congress that must be met to rebut the presumption.

The need to avoid negative consequences

The court believed that the creation of a defence of belief in invalidity would have a negative impact on litigation. The availability of the defence for a claim of infringement wold incentivize would-be infringement inducers to argue a theory of invalidity, the truth of which a court would find more difficult to ascertain than matters concerning patent infringement. The result of this would be that those accused of inducing infringement would be able to rely more easily on a defence of belief of invalidity, more than non-infringement. The court was also wary of the impact such a defence would have on juries, requiring the separation of a belief of patent validity from validity itself.

Practical concerns

It was pointed out that alleged inducers of patent infringement, who believe that a patent is invalid, already have a variety of ways to obtain evidence of this. They can approach a federal court to declare the patent invalidity, raise the affirmative defence of invalidity, pursue ex parte re-examination of the patent by the Patent and Trademark Office or seek inter partes review of the patent at the Patent Trial and Appeal Board.

Practical significance

This case sends an important message to would-be infringement inducers of patents: ignorance of patent validity is no defence to a claim of induced infringement. The court appears to have no appetite to create new avenues to establish patent invalidity beyond those already available, nor to disrupt the underlying presumption of validity. Organizations involved in the creation and selling of products and services that risk inducing patent infringement cannot rely on their belief that a patent is invalid—they will have to challenge the validity of the patent head-on if they are to escape liability for inducement.

The court then made brief comments in respect of patent trolls, and their often frivolous claims of patent infringement. While alleged inducers may not be able to rely on a defence of a belief in patent invalidity, the court did encourage them to use the avenues available to certify invalidity. Furthermore, it also emphasized the role of the district courts in sanctioning attorneys that raise frivolous claims, and award attorney's fees in certain circumstances.

This decision appears to have either raised an inconsistency in the court's jurisprudence, or qualified the law on knowledge and patent infringement. In Global-Tech, the court held that in an action for induced infringement of a patent, a defendant must know that its acts constitute infringement. However, in the present case, the Supreme Court held that the knowledge element for induced infringement concerns infringement and not validity, as such a good faith belief that a patent was invalid did not vitiate knowledge of induced infringement. The question arises: how is an inducer who believes a patent to be invalid, to know that what it is doing will be patent infringement? Given that it is unlikely that the Supreme Court will answer this question in the near future, alleged inducers would be well advised to ensure a patent's invalidity to avoid being embroiled in a claim for induced infringement.