Copying as Brand-Building

Gangnam Style is now the most-viewed video on YouTube in history. Along the way, Psy tolerated dozens and dozens of Gangnam knockoffs, copies that ordinarily would fall afoul of copyright law.

Over at Techdift, Glyn Moody notes that this “relaxed attitude” toward copyright infringement has helped make him very rich. This underscores an important point about the upside of copying. Copies can serve as powerful advertisements, and can help build a brand that can then be monetized in many ways. Copies are particularly potent ads because they are authentic efforts by consumers and, in this case, fans, rather than the work of professionals paid to make us think we want Product A or B.

The many copies of Gangnam Style fit this model perfectly, and helped build the viral juggernaut that made a formerly-unknown Korean singer into a house hold name around the world.

Here’s Techdirt’s take:

Ah yes, the maximalists will retort, this free-and-easy, laid-back approach [to copying] is all very nice, but it doesn’t put food on his table, does it? If you want to make a living from this stuff, you’ve got to enforce copyright to stop all those freeloaders ruining your business. Well, maybe not:

With one song, 34-year-old Park Jae-sang — better known as PSY — is set to become a millionaire from YouTube ads and iTunes downloads, underlining a shift in how money is being made in the music business. An even bigger dollop of cash will come from TV commercials.

From just those sources, PSY and his camp will rake in at least $8.1 million this year, according to an analysis by The Associated Press of publicly available information and industry estimates.

The AP story quoted above goes on to give a detailed breakdown of where that money comes from. Interestingly, it’s mostly from things not directly connected with either his music or video:

It is television commercials that are the big money spinner for the most successful of South Korea’s K-pop stars. PSY has been popping up in TV commercials in South Korea for top brands such as Samsung Electronics and mobile carrier LG Uplus.

Chung Yu-seok, an analyst at Kyobo Securities, estimates PSY’s commercial deals would amount to 5 billion won ($4.6 million) this year.

This is yet another great example of how artists can give away copies of their music and videos to build their reputations and then earn significant sums by selling associated scarcities — in this case, appearances in TV commercials. Now, not every musician may want to take that route, but there are plenty of other ways of exploiting global successes like Gangnam Style — none of which requires copyright to be enforced.

More Hobbits

"Age of the Hobbits"We’ve earlier written about both Hobbits and the genre of “mockbusters”–movies that look and sound a lot like another famous (or likely to be successful) film.  For the most part these mockbusters, many made by an outfit called The Asylum, have been released despite the angst Hollywood studios had over titles such as American Warships and Transmorphers: Battle of Man.

But recently, the legal tide turned. Warner Bros, New Line and MGM sued The Asylum on the grounds that its mockbuster Age of the Hobbits infringed on their trademarks in the forthcoming Peter Jackson film The Hobbit: An Unexpected Journey. A California judge agreed. As the Hollywood Reporter explains,

The Asylum is known for its low-budget films that often trade on the hoopla surrounding major Hollywood releases. Past films from the company include 2012 Doomsday, Transmorphers: Fall of Man, Battle of Los Angeles and American Warships — which originally was titled American Battleship until Universal sued to have it changed shortly after that studio’s Battleship hit theaters. The movies have gotten underneath Hollywood’s skin over the years, but thanks in part to a 1993 court ruling over a rip-off of Disney’s Aladdin, many believed there wasn’t much legal recourse.

Age of the Hobbits was scheduled to be released Tuesday; The Hobbit hits theaters Friday.

In his decision, Gutierrez pointed to a trademark registration from the plaintiffs on “Hobbit,” covering “printed matter, namely posters, art prints, postcards” and says that it covers Asylum’s use of the term in its posters promoting its own movie. The word “Hobbit,” however, isn’t covered in any trademark registration as a movie title, leading the judge to consider whether the mark is distinctive and has developed a secondary meaning in the marketplace.

The judge was impressed with the evidence of consumer association on “Hobbit,” including a survey conducted by plaintiffs of randomly selected respondents. “The survey results showing that nearly 50 percent of respondents associated the term ‘Hobbit’ with the trademark holder is thus persuasive evidence that the Hobbit Marks have acquired secondary meaning,” he wrote.

After determining that, Gutierrez moved on to the issue of likelihood of confusion. The Hobbit’s makers can’t claim exclusive rights to fantastical images of swords, mythical creatures and the like, but the judge saw the imagery in the posters in connection with the use of the term “Hobbit” and said that “one is immediately struck by the similarity.” Even the slight difference in titles isn’t enough to avoid confusion, he added.

As for Asylum’s contention that “Hobbit” is separate from the J.R.R. Tolkien universe, the judge didn’t buy it.

“Asylum’s argument appears to ignore the connection between the term used to describe Homo Floresiensis and Tolkien’s hobbits,” the judge writes. “Asylum treats the use of the two terms as completely unrelated, but the terms are in fact closely related: Scientists gave Homo Floresiensis the nickname ‘Hobbit’ because its appearance resembled Tolkien’s hobbits, as described in his novels. … Given that Homo Floresiensis received the nickname ‘Hobbit’ specifically because of its resemblance to Tolkien’s fictional hobbits, the Court finds Asylum’s argument that its movie is wholly unrelated to Tolkien’s work because it is about Homo Floresiensis to be disingenuous.”

The Nuclear Option

A few weeks ago the Republican Study Committee put out a report entitled  “Three Myths About Copyright Law and Where To Start To Fix It.” As many noted, this was a smart and unusual report, but as things turned out, its influence was quite short-lived. The report was retracted and vanished quickly from the RSC website.

Now, the staffer behind it has been shown the door. As the Washington Examiner reports

The staffer who wrote the memo, an ambitious 24-year-old named Derek Khanna, was fired — even before the RSC had decided on other staffing changes for the upcoming Congress. The copyright memo was a main reason.

Republicans are surprisingly close to the entertainment industry. For instance, Mitch Glazier, as a Republican House Judiciary Committee staffer in the late 1990s, played a key role in drafting GOP bills expanding copyright before cashing out to the industry. He now runs the Recording Industry Association of America, a $4 million-a-year lobby operation that fights for more government protection of record labels.

So Republican politicians, with their sensitivities to K Street and their general pro-big-business tendencies, are not eager to roll back the extraordinary government protection for Hollywood and Nashville. But free-market think tanks and writers are banging the drum.


Apple v. Samsung Redux

Yesterday in San Jose the great tech battle of the decade–Apple vs. Google Samsung– opened a new chapter. And in keeping with the holiday spirit, Judge Lucy Koh is asking for “global peace.”  From the San Jose Mercury News:

Urging the world’s largest smartphone makers to settle their differences, a federal judge said she will issue rulings aimed at resolving a multifaceted legal battle between Apple Inc. and Samsung Electronics.

“I think it’s time for global peace,” U.S. District Judge Lucy Koh told lawyers for the two electronics giants, during a court hearing Thursday in San Jose.

Koh appeared ready to trim a $1 billion jury verdict Apple won over Samsung Electronics this summer. She said over the next several weeks she would issue a series of rulings to address the many legal issues raised at the hearing.

Samsung is seeking a new trial or a reduction of the verdict that resulted from a lawsuit Apple filed in 2011. Apple, on the other hand, urged the judge to add millions more to the award and permanently ban the U.S. sales of eight Samsung smartphone models a jury in August said illegally used Apple technology.

The Korea Times

美, ‘캘리포니아 평결 뒤집어야’

* 애플은 태초부터 모방꾼
* 특허분쟁은 법정에서 이기는 경쟁력 있는 도구
* 애플, `애플 세금’ 노려

The English-language Korea Times recently interviewed both of us regarding the 2nd biggest Korean news story of the year (after Psy): Apple vs. Samsung. Here’s a short excerpt from Chris’ interview:

Did Jobs steal?

This is the first in a series of articles ahead of the Dec. 6 hearing on the Samsung-Apple patent legal battle to be presided over by U.S. Federal Judge Lucy Koh. ― ED. By Kim Yoo-chul

Christopher J. Sprigman

Apple started as a ferocious copycat but now it is an industrial leader, it calls everyone else imitators in order to maintain its position, according to a U.S. patent expert.

“Apple is now blasting Samsung as a copycat. But from its beginning, Apple was an active copier itself,’’ said Christopher Jon Sprigman, a professor at the University of Virginia School of Law. The interview was conducted by email.

“In a 1994 interview, the late Apple founder invoked Picasso’s alleged dictum that `good artists copy, great artists steal,’” Sprigman said, also quoting the late Steve Jobs who said, “We have always been shameless about stealing great ideas.”

U.S. Federal Judge Lucy Koh will rule on a jury verdict ordering Samsung to pay $1.05 billion in damages for violating Apple patents in a Dec. 6 hearing.

The judge may alter the sum or, as Samsung hopes, order a new trial over jury foreman Velvin Hogan’s alleged misconduct.

Sprigman continued: “On a visit in 1979 to the Xerox research center in Palo Alto, California, the late Jobs became fascinated with a Xerox prototype computer that used a mouse and screen icons. Jobs took ideas he’d seen at Xerox, refined them and made them central features of the Macintosh. The freedom to copy built Apple and gave us the great products we enjoy today.’’

Campus Streaming

UCLA (where Kal teaches) has been for some time involved in litigation over whether streaming video for classroom use violates copyright law. Last week a district court in California dismissed the suit for the second time. As the Daily Bruin reports:

Ambrose Video Publishing, Inc., an educational video producer, and Association for Information Media and Equipment, a trade association, filed the suit last year alleging that UCLA violated copyright laws by streaming reformatted DVD content and an Ambrose Video Publishing program on the Internet for students and faculty.

United States District Judge Consuelo B. Marshall originally dismissed the case in October 2011, but allowed the company and trade organization the option of filing an amended complaint, which was filed months later.

Judge Marshall dismissed the case for a second time last week, but this time the decision does not allow the case to be refiled in the trial court, said Jamie Slaughter, an attorney who defended UCLA in the case. The companies, however, do have the option to appeal, he added.

“We’re pleased that (the judge) agreed with us and agreed with UCLA that there was no copyright infringement or breach of a contract with respect to the facts in this case,” Slaughter said.

Judge Marshall dismissed the case, citing that Ambrose Video Publishing lacked standing to bring the case, and UCLA had immunity, according to the judge’s ruling.

While this is good news for UCLA and generally the right result, it leaves open the question of what kinds of streaming are permissible. As a UCLA official noted,

“What we were hoping for was some decision related to whether or not our digitizing of the media is fair use,” said Roger Brown, manager of instructional media collection and services for UCLA. “Instead it got thrown out on technicalities.”

Brown expressed some disappointment with the ruling.

“We’ve maintained, if you’ve looked at the original response to their suit, that the fact that we’re digitizing this media is fair use because we have a classroom exemption,” Brown said.

“We were hoping that the judgment would address that specifically so that we would feel more comfortable doing what we are doing.”

U.S. Patent Office invalidates Apple “bounce back” scrolling patent

News that the U.S. Patent Office has invalidated Apple’s patent on “bounce back” scrolling — the feature that gives a user a “rubber band” effect when she scrolls to the bottom of a screen display. The PTO has decided that the patent is both non-novel and obvious based on the existence of a prior patent that discloses a very similar feature.

The Apple “bounce back” patent was one of the patents that the jury in federal court in San Jose ruled Samsung had infringed. But considering that the PTO has deemed that patent worthless, what should the San Jose court do now? Apple will likely appeal the PTO’s determination, so in a sense the validity of the bounce back patent is still up for grabs. But should a damage award based in part on a patent that is of no current effect stand? Or should the court vacate the damage award and order a new trial on the question of damages?

Stay tuned.

Navy chair maker essentially admits its design is “just a generic chair”

Emeco, the maker of the Navy Chair (pictured left), has sued Restoration Hardware for its knockoff (pictured right). We have a piece in Slate today arguing that Emeco’s claim falls flat. The reason, basically, is that Emeco’s chair isn’t distinctive, and thus its design cannot be protected by trademark. Rather, Emeco’s chair is pretty much just a chair. A fact that Emeco’s products chief as much admits in the video below. Choice quotes from Magnus Breitling, Emeco’s Director of Product Management:

“Ask a kid to draw a chair – she would probably take the [Navy] chair – ‘cause it’s just a classic chair. It doesn’t have a cupholder. It doesn’t play your applications. It’s just a chair.”

“[Navy Chair designer Wilton Dinges] basically took a generic wood chair, took the design over, and made it in aluminum.”


Poutine: Canadian, American, and otherwise

We’re very interested in creative cuisine — a world in which we find high levels of innovation without much intellectual property. Recipes are, for reasons we explain here, not covered by copyright. And chefs engage in a lot of copying and “tweaking” of other chefs’ dishes. Which helps to make this a world of wonderful food. Here’s an example that one of us (Sprigman) enjoyed a couple of weeks ago at a restaurant called “The Glass Haus Kitchen” in Charlottesville, Virginia. Poutine (pictured above) is a famous (and famously unhealthy) dish from Quebec. In its traditional form, it’s made with french fries covered in veal gravy and topped liberally with cheese curds. Sounds disgusting, but take my word for it — it’s one of the world’s great late-night foods. And something I didn’t believe could be improved.

Until I had the “American Poutine” at the Glass Haus. The chef, Ian Boden, has taken the Montreal standard to a new level. In place of french fries, he uses crispy fried potato slices. And instead of cheese curds, Boden uses cubes of halloumi soaked in harissa.  The dish is topped with shredded lamb and a rich lamb gravy.

Boden’s American Poutine is recognizably poutine. But upscaled.

We’ll be eating more of it.

High Art

One of the bigger copyright cases recently is Kirtsaeng v. John Wiley & Sons, argued this fall before the Supreme Court. The case is about reselling textbooks bought abroad, but it has much larger implications. The New York Observer discusses the possible effects on museums, which frequently traffic in goods produced (and purchased) abroad:

Unlike many of the city’s galleries, New York’s museums made it out of Hurricane Sandy relatively unscathed. But even as the storm raged, they were quietly facing another battle— in court.

Blockbuster exhibitions like the Guggenheim’s “Picasso Black and White,” the Whitney’s “Yayoi Kusama” and the Met’s “The Steins Collect” could be a thing of the past if a decision in a lower-court case involving textbook sales is upheld by the Supreme Court. On Oct. 29, the court, which was open despite the hurricane, heard oral arguments in Kirtsaeng v. John Wiley & Sons, a legal battle over whether copyrighted books produced abroad can be imported to the U.S. and resold. Though the case involves textbooks, it also implicates a section of the copyright law that applies to Picassos and Brancusis. The case started out in 2008 in federal district court in New York. Supap Kirtsaeng, a foreign exchange student at Cornell, found that his textbooks could be purchased more cheaply in his native Thailand, so he asked friends to buy the books there and ship them to New York. He then started selling them on eBay and, when he had racked up $37,000 from those sales, the textbooks’ publishers, John Wiley & Sons, filed suit. Mr. Kirtsaeng was found guilty of willful infringement and was asked to pay $75,000 for each of the eight Wiley textbooks he sold copies of, for a total of $600,000. Mr. Kirtsaeng appealed that decision, and in August 2011, the United States Court of Appeals for the Second Circuit found him guilty as well. In the meantime, in July 2012, the Association of Art Museum Directors (AAMD) and a group of 28 American museums including the Solomon R. Guggenheim Foundation, The J. Paul Getty Trust, the Museum of Modern Art and the Whitney filed a brief as “friends of the court,” in support of Mr. Kirtsaeng.

Mr. Kirtsaeng’s attorneys invoked the “first sale doctrine,” which can be found in section 109(a) of the Copyright Act, which limits certain rights of the copyright owner. The doctrine enables an owner of a copy to buy, sell, loan or borrow it without getting the permission of the copyright owner. (A “copy” under the Copyright Act doesn’t mean a pirated work or a work that is not original; it means the material object in which the copyrighted work is first fixed—so a copy could be an original work like a Damien Hirst shark sculpture, or it could refer to any of the millions of paperbacks of Fifty Shades of Grey published by Vintage.) But John Wiley & Sons, the publisher, maintains that the doctrine does not apply to works made abroad.

While this case turns on section 109(a) of the statute, which allows the owner of a “lawfully made” copy to resell it, the same language appears in another section, 109(c), which allows the owner of a “lawfully made” copy to display it—and has for years been giving museums the right to show the artworks that they buy and borrow.

“Art museums have long depended on Section 109 of the Copyright Act,” the brief states, “to develop and display their permanent collections and to assemble and present special exhibitions of art … without having to obtain the copyright owner’s permission.” Displaying, acquiring, borrowing and loaning art are at the core of what museums do.