The Supreme Court heard oral argument this morning in Kirtsaeng v. John Wiley & Sons, Inc., despite Hurricane Sandy’s imminent arrival and the fact the entire federal government in Washington DC is shut down today. Kirtsaeng is a copyright case raising the issue, argued two years ago in Costco Wholesale Corp. v. Omega, S.A., of whether the first sale doctrine applies to third-party imports of goods manufactured under the authority of the copyright owner abroad. (Costco resulted in a 4-4 affirmance due to Justice Kagan’s recusal.) In more plain English, if someone in the United States purchases legitimate copies of some item abroad that has a copyrighted work somewhere in it, can they import those items into the United States and resell them here without violating the Copyright Act? The specific issue in Kirtsaeng involves used textbooks, but it could just as easily apply to watches with a copyrighted logo on the back (the good at issue in Omega), shampoo with a copyrighted label on the bottle (Quality King v. L’Anza), or any product with copyrighted software in it.

Costco indicates the mischief that could come about from a holding saying that the first sale doctrine does not apply to imported goods. There is zero chance that Omega was actually concerned about the redistribution of its copyrighted logo, located inconspicuously on the backs of its watches, as opposed to the grey market arbitrage of the watches themselves, which of course are not copyrightable. But mischief that does not rise to a constitutional level doesn’t tell us what the law is. The arguments in Kirtsaeng focus on the meaning of the phrase “lawfully made under this title.” Section 109(a) provides that:

Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

Kirtsaeng, the petitioner, argues that “lawfully made under this title” means “made with the authority of the copyright owners as required by Title 17, or otherwise authorized by specific provisions of Title 17,” a theory Kirtsaeng borrows from the Solicitor General’s brief back in Quality King. Wiley argues that because Title 17 does not have extraterritorial application, “lawfully made under this title” must mean “lawfully made in the United States pursuant to Title 17.”

That’s the question that cert. was granted on, but the whole debate strikes me as off-target. As a result I don’t think either side’s briefs really grapple with the problem here. Continue reading →

Last week I bemoaned how the Seventh Circuit had thoroughly botched the already confusing state of affairs that is the elements of a prima facie copyright infringement claim. But as a bonus, the Peters v. West opinion also had troubling things to say about what is now required to successfully plead a copyright infringement claim under the new “plausibility” regime announced by the Supreme Court in Twombly and Iqbal.

As a refresher, here’s how the Peters court defined the element of infringement (the other element for a claim of copyright infringement being ownership of a valid and registered copyright):

Fundamentally, proving the basic tort of infringement simply requires the plaintiff to show that the defendant had an actual opportunity to copy the original (this is because independent creation is a defense to copyright infringement), and that the two works share enough unique features to give rise to a breach of the duty not to copy another’s work.

Note that the court is discussing what the plaintiff must ultimately prove, which even after Twombly and Iqbal is not necessarily what the plaintiff must allege. Swierkiewicz v. Sorema, which distinguished between those two, is still good law; Iqbal simply requires that the plaintiff allege enough to make a claim plausible, which may or may not require pleading specific facts. Nevertheless, many courts even pre-Twombly have been requiring plaintiffs to march through the elements in their complaints, and now post-Iqbal, each of those elements must be “plausible.”

So what does a plaintiff, according to the Seventh Circuit, now have to plead in order to plausibly allege infringement? Continue reading →

In my previous post, I dissected the problematic recent Seventh Circuit copyright decision in Peters v. West. I won’t recap that long post here, except to say that the Seventh Circuit appears to have collapsed the traditional two-part inquiry for infringement in the prima facie case for copyright infringement to one part, with proof of access as a weird (and optional?) hanger-on. As the Peters court summarizes the test that will govern going forward: “[P]roving” — and, I guess, pleading — “the basic tort of infringement simply requires the plaintiff to show that the defendant had an actual opportunity to copy the original . . . , and that the two works share enough unique features to give rise to a breach of the duty not to copy another’s work.”

There are at least three bad consequences to this: it gives jury determinations to the judge; it makes the already controversial “sliding scale” doctrine incoherent; and it sounds the death-knell for substantive limits on liability for copying outside of fair use.

First, the two different sub-elements of the infringement half of the prima facie case have been understood at least since 1945, and even in the Ninth Circuit’s jumbled version of the test, to allow a division of labor between judge and jury in a copyright infringement case. Actual copying, including (if necessary) a showing of “probative similarity,” is a merely forensic task, one that stands at the gate of the field where the ultimate liability determination will be fought out. The issue is to determine whether there’s been any copying at all as a factual matter. It is to copyright law as “causation” is to negligence law. I may have been speeding, but if I didn’t actually hit your car, the case is over. As a forensic rather than policy determination, courts have long allowed the component works to be examined in microscopic detail for evidence of actual copying, including hearing from expert witnesses. After receiving this evidence, the judge can determine that there’s no genuine issue of material fact as to actual copying and grant summary judgement for the defendant — or nowadays, I suppose, can determine on a motion to dismiss that the complaint does not adequately plead a plausible case of actual copying.

The other “substantial similarity” test is supposed to be much different than that, one that the jury is especially adept at determining, at least in a music case like this one. Continue reading →