Rights of Privacy and Publicity for Film and Television

By Rob Hassett

An earlier version of this article appeared in the January 1997 issue of The Multimedia & Technology Licensing Law Report published, at that time, by Warren, Gorham & Lamont, and later published by West Group.  That article was based on program materials developed by the writer in connection with his presentation at the Cutting Edge Music Conference in New Orleans, Louisiana in August of 1996.

The writer wishes to thank Lori Brill, Lynn Hassett, and Adam Alexander for their help in updating earlier versions of this Article.

RIGHTS OF PRIVACY AND PUBLICITY

When may a producer of a film and/or television program use an individual’s name, likeness, or identity or information concerning such individual without permission? Restrictions on the use of names, likenesses and identities of individuals and public disclosure of information about them are governed by the right of publicity and two categories of the right of privacy.

Restatements

Section 46 of the Restatement of the Law Third, Unfair Competition, states in pertinent part:

One who appropriates the commercial value of a person’s identity by using without consent the person’s name, likeness, or other indicia of identity for purposes of trade is subject to liability for the relief appropriate.

Section 652A of the Restatement of the Law, Torts 2d, states in pertinent part:

The right of privacy is invaded by: … (b) appropriation of the other’s name or likeness…; (c) unreasonable publicity given to the other’s private life….;

The elements of appropriation invasion of privacy are the same as for violation of the right of publicity with one exception.  The invasion of the right of privacy is a personal tort and generally may not be assigned or inherited.  The  right of publicity, a property right, may generally be assigned and inherited. See, e.g., Martin Luther King Jr. Center For Social Change v. American Heritage Products, 250 Ga. 135, 296 S.E.2d 697 (Ga. 1982).

There are two other categories of the right of privacy which are not addressed in this article – wrongful intrusion and false light.  Intentional intrusion upon the solitude or seclusion of another on his or her private affairs or concerns if such intrusion would be highly offensive to a reasonable person constitutes “wrongful intrusion.”  The elements of “false light” are the same as for defamation except that false light does not require that the false statement be disparaging.

Origins

English common law did not recognize the right of privacy or publicity except to the extent that such rights existed tangentially under copyright and trademark law. In 1890, Samuel D. Warren and future Supreme Court Justice Louis D. Brandeis wrote an article arguing that a right of privacy should exist. Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193 (1890). The first court to accept the right of privacy was the Georgia Supreme Court in Pavesich v. New England Life Ins. Co., 122 Ga. 190, 50 S.E. 68 (1905).  The Georgia Supreme Court held that Mr. Pavesich stated a claim against New England Life for alleged wrongful use of his picture in an advertisement for the Defendant’s insurance products.  Today, privacy and publicity rights are based on state common and statutory law. Because these rights are relatively new and different legislatures and courts decide how they apply, there are variations in the interpretation and application of these rights.

Acceptance

Since the Pavesich case, some form of the right of privacy relating to appropriation and/or the right of publicity has been adopted either by statute or court decision in every state that has addressed the issue. Minnesota and Virginia (in Virginia only in federal cases applying Virginia law) appear to be the only states which have rejected right to privacy involving giving unreasonable publicity to an individual’s private life. See, Hendry v. Conner, 303 Minn. 317, 226 N.W.2d 921 (1975) and Williams v. Nathan, 21 Med. L. Rptr. 1339 (E.D. Va. 1993); Brown v. American Broadcasting Co., 704 F.2d 1296 (4th Cir. 1983).   In 1998, the Supreme Court of Minnesota overruled prior precedent in recognizing this right.  See, Lake v. Wal-Mart Stores, Inc., 582 N.W.2d 231 (Minn.1998).

Written Consent

To avoid violating these rights, the best approach is to obtain a written consent from each person whose name, likeness, or identity will be included in a film or television program. There are three reasons consent should be obtained in writing. First, unless in writing, some state statutes provide that such consents are not valid. See, J. Thomas McCarthy, The Right of Publicity and Privacy, § 10.6 (2003). Second, there could be a dispute about the existence of an oral consent. Finally, unless the consent is in writing, there could be confusion concerning its scope.

USE OF NAME, LIKENESS OR IDENTITY WITHOUT CONSENT

Uses Permitted

There are often situations in which it is impractical to obtain written consent to use a name, likeness or identity and one must decide whether or not to use a particular photograph or video for a film or television program. Situations in which such uses are permitted include the reporting of newsworthy events and uses in which no person is identified or identifiable.  Courts generally hold that the use of names, likeness or identity in connection with the reporting of newsworthy events is allowed under the First Amendment which forbids any laws “abridging the freedom of speech or of the press.”

There are four circumstances in which the use of photographs, films and/or videos is permitted. First, the use of photographs, films and videos of buildings or other structures taken from public streets and similar non-restricted areas in which individuals are not recognizable does not violate anyone’s privacy or publicity rights. The reason is that privacy and publicity rights relate to individuals and not to buildings or other structures. See, e.g., Jaubert v. Crowley Post-Signal, Inc., 375 So.2d 1386 (La. 1979).  Of course it would still be important to make sure that the use of the photographs, films or videos of the structure does not infringe someone’s copyrights in the materials or constitute a violation of other privacy rights such as wrongful public disclosure of embarrassing private facts, which is discussed in this paper below, or amount to a wrongful intrusion, not addressed in this article but relating to such actions as peering into someone’s home through the windows.

Second, only individuals who are recognizable in a photograph or video have any claim for misappropriation of likeness or identity. Therefore, morphing pictures and videos so individuals are not recognizable eliminates any privacy and publicity right claims. See, e.g., Cheatham v. Paisano Publications, 891 F.Supp. 381 (W.D. Ken. 1995), where the Court said that there was a jury question whether or not the Plaintiff’s posterior was recognizable in the particular photograph.

In Pesina v. Midway, 948 F. Supp. 40 (N.D. Ill.1996), a martial artist hired to model for characters of the coin operated arcade games Mortal Kombat and Mortal Kombat II alleged that use of his name and likeness in subsequent home video games violated his common law right of publicity.  Mr. Pesina’s movements had been captured on video, digitized, and incorporated into the games after extensive editing.  The district court granted Midway’s motion for summary judgment in part because Midway was able to show that the public did not recognize Mr. Pesina within the game.  “[A]fter comparing Mr. Pesina and the game character, Johnny Cage, who allegedly resembles the plaintiff, only 6% of 306 Mortal Kombat users identified Mr. Pesina as the model.”  Id. at 42.  The brief use of Pesina’s name in the game (for eight seconds only when a player won), although unauthorized, also was held not enough to constitute a right of publicity claim.

Third, photographs, videos, and films taken of participants and spectators in connection with a newsworthy event may be used in photo essays and documentaries of the event. In Cheatham v. Paisano Publications, supra, the Plaintiff was a jean “designer” who wore one of her own “designs” to a Kentucky bikers’ convention. She had cut out the bottom of a pair of jeans and replaced it with fishnet fabric. A magazine published a photo essay of the event which included pictures of her wearing her special outfit. She sued the magazine and claimed that it misappropriated her identity. In dismissing her claim, the Court held that the photo essay was a report of a newsworthy event. See also, Time, Inc. and Steve Kagan v. Sand Creek Partners, L.P., 825 F.Supp. 210 (S.D. Ind. 1993). The Court in Cheatham also held that use of the Plaintiff’s pictures on T-shirts was not a protected newsworthy use and, if the Plaintiff were recognizable from the picture, then Plaintiff would have a basis for a claim.

There are limitations on the use of name, likeness, and identity in connection with reporting news. For example, in the movie “Woodstock” there is an extensive interview with an individual responsible for cleaning latrines. This interviewee sued for misappropriation of his right of privacy. The Court held that he was made an “involuntary performer” due to the extensive interview and allowed the case to proceed to trial. See, Taggart v. Wadleigh-Maurice, Ltd., 489 F.2d 434 (3d Cir. 1973). Additionally, copying a performer’s entire performance goes beyond the allowed reporting of a newsworthy event and constitutes a violation of the performer’s right of publicity. See, Zacchini v. Scripps-Howard Broadcasting, Co., 433 U.S. 564 (1977). Also, where a performance is staged using actors, such as a professional wrestling match, it is unlikely a Court would hold it to be the type of event to which the rights of publicity and appropriation policy do not apply. See, e.g., Ventura v. Titan Sports, Inc., 65 F.3d 725 (8th Cir. 1995).

Finally, use of names, pictures and identities in connection with the production of biographies of newsworthy individuals is permissible. In Harris Matthews v. Random House, 15 F.3d 432 (5th Cir. 1994), the Fifth Circuit U.S. Court of Appeals, applying Texas law, held that a book detailing the author’s and her ex-husband’s experiences as undercover agents did not violate the privacy or publicity rights of her ex-husband.  Information concerning their activities and convictions were the subject of news reports.  Thus, it was a matter of public record and considered newsworthy events. See, also, Mickey Dora v. Frontline Video, Inc., 18 Cal. Rptr. 2D 790 (Cal. App. 1993), in which Mickey Dora, a surfing legend, appeared in a video documentary entitled “The Legends of Malibu.”  The Court held that the use of Dora’s picture was newsworthy.

Uses Not Permitted

As to some extent referred to above, there are at least three (3) categories of uses of names, likenesses, and identities of individuals which are generally not permissible. Those uses involve advertising and similar commercial exploitation of name, likeness or identity, staged performances and exceeding the scope of agreements limiting scope of use.

First, use of an individual’s name, likeness, or identity in advertising, without that individual’s consent is not permitted. For example, in Town & Country Properties, Inc. v. Riggins, 249 Va. 387, 457 S.E.2d 356 (1995), the Plaintiff, who had been a successful football player for the Washington Redskins, transferred his interest in a house he owned in Virginia to his ex-wife as part of a divorce settlement. When his wife decided to sell the house, she placed his name and picture prominently on flyers promoting her sale of the house. The Supreme Court of Virginia held that Riggins had a claim for infringement of what was, in effect, his right of publicity. See also, Pooley v. National Hole-N-One Assoc., 89 F. Supp. 2d 1108 (D.C. Az. 2000) (holding that Plaintiff’s right of publicity was violated because Defendant used video footage of Plaintiff making a “hole in one” in a commercial manner to promote its fundraising program).  The aforementioned situation is treated differently from the use of an individual’s name, likeness or identity in advertising of a publication or other media in which that person’s name, likeness or identity is legally used. See, e.g., Montana v. San Jose Mercury News, Inc., 40 Cal. Rptr. 2d 639 (6th Cir. 1995); Lane v. Random House, Inc., 23 Med. L. Rptr. 1385 (D.D.C. 1995).   If the name, likeness or identity is used in a form of media for a legitimate purpose, it may also be used in advertising for that publication, television program or other media.

Also, use of an individual’s name, likeness or identity for a purely commercial purpose (as opposed to in an informative or artistic, including literary, work) is prohibited.  For example, use of the Reverend Martin Luther’s King’s profile on mugs without the consent of his estate was held to constitute a violation of the right of publicity in Martin Luther King Jr. Center For Social Change v. American Heritage Products, 250 Ga. 135, 296 S.E.2d 697 (Ga. 1982).  Likewise, selling posters with the photo of a model or recording artist (as opposed to, for example, including an informative article about them in magazines) is a violation of these rights.

Second, there is no exception to privacy and publicity rights with respect to individuals performing as actors and actresses in dramatic productions. See, e.g., Ventura v. Titan Sports, Inc., supra.

Third, even where use is newsworthy and does not constitute advertising, unauthorized usage has been held to be illegal in instances where the limited purpose for which the interview or pictures was intended is exceeded. In Multimedia WMAZ, Inc. v. Kubach, 212 Ga. App. 707, 443 S.E.2d 491 (Ga. App. 1994), the Plaintiff appeared on a television program in which he was interviewed about having contracted AIDS. Prior to the program, the Plaintiff and Defendant reached an understanding that the Plaintiff’s face would be disguised digitally so that he could not be identified. Apparently, due to the negligence of station employees, the Plaintiff was recognizable at the beginning of the show. The Court held that the Plaintiff had a claim. See also, Daughtry v. Booth & Random House, 23 Med. L. Rptr. 1215 (Glynn County, Georgia Superior Court 1994).

Parody

Parodies are entitled to a substantial degree of First Amendment protection.  However, this protection must be balanced against intellectual property rights. See, for example, the Supreme Court’s application of the Doctrine of Fair Use in the copyright law context in Luther R. Campbell, et al. v. Acuff-Rose Music, Inc., 114 S.Ct. 1164 (1994). In Cardtoons, L.C. v. Major League Baseball Players Ass’n, 838 F. Supp. 1501 (N.D. Okla. 1993), the Plaintiff sought a declaratory judgment claiming that it was not a violation of the publicity rights of well-known baseball players to produce and distribute cards with caricatures and names similar to those baseball players and containing text on the back that ridicules the players. The Tenth Circuit Court of Appeals balanced the publicity rights of the baseball players against the Plaintiff’s First Amendment right to use parody to criticize activities of public figures.  The Court held that the Plaintiff was entitled to produce and distribute the cards. But see, White v. Sansung Electronics America, 971 F.2d 1395 (9th Cir. 1991) in which the Ninth Circuit Court of Appeals held, over two vigorous dissents, that a print advertisement using a robot that mimicked and parodied the persona of Vanna White infringed her right of publicity. Critics argued that celebrities’ monopolization of words, names and images of general cultural significance would lead to the depletion of the public domain and the stifling of free expression. However, recently, the Ninth Circuit Court of Appeals held that California’s right of publicity protects against uses of one’s image in advertising.  Newcombe v. Adolph Coors Co., 157 F.3d 686 (9th Cir. 1998).

Artistic and Literary Uses

Many times artists employ the use of a name or likeness of a real person in their artistic and literary projects.  Although this may not fall under the umbrella of newsworthy events, the First Amendment’s right to free speech often shields forms of expressive art.  “The use of the name of a real person as the name…in a title of a work of entertainment” can be immune from liability where it has “some real artistic relevance” to the work and is “not  chosen just to exploit the publicity value of the person”.  J. Thomas McCarthy, 2 Rights of Publicity and Privacy § 8:72 (2d ed. 2000).

First amendment protection and the right of publicity recently clashed in a case involving the music industry.  In Parks v. LaFace Records, 76 F. Supp. 2d 775 (E.D. Mich. 1999), Rosa Parks sued the Defendants to prevent the use of her name as the title of a rap song written, performed, marketed and distributed by the Defendants.  Ms. Parks objected to the use of her name due to the content of the song.  The United States District Court for the Eastern District of Michigan held that “because the title ‘Rosa Parks’ is not ‘wholly unrelated’ to Defendants’ song, and because the title is the name of an expressive work and not a disguised commercial for a product” the right of publicity did not exist.  Id. at 782.  The Second Circuit reversed and remanded holding that there was a genuine issue of material fact regarding the question of whether the title to the song “Rosa Parks” is or is not “wholly unrelated” to the content of the song.  The song does include the line “move to the back of the bus” but the Plaintiff argued that that line did not relate to Rosa Parks’ experience as a civil rights icon but rather to Outkast’s position that “Outkast” was superior to competitive music groups and that other groups should “take a back seat” to Outkast.  Interestingly, the Court of Appeals also held that there was a genuine issue of fact whether Rosa Parks had a claim for unfair competition under the federal Lanham Act, 15 U.S.C. §1125(a), stating that: “Rosa Parks clearly has a property interest in her name akin to that of a person holding a trademark” and said that the only difference between a right of publicity claim and a claim for unfair competition, which the Court also referred to here as “false advertising,” is that a right of publicity claim does not require any evidence that a consumer is likely to be confused (i.e., any evidence that the public would believe that Rosa Parks had endorsed “Outkast’s” song).

In Guglielmi v. Spelling Goldberg, 25 Cal. 3d 860, 603 P.2d 454 (1979),  the Supreme Court of California skirted the issue by declaring that the right of publicity is not descendible.  However, in Chief Justice Bird’s concurrence, she discussed the issue of whether the use of a celebrity’s name and likeness in a fictional film exhibited on television constituted an actionable infringement of that person’s right of publicity.  Id. The Chief Justice emphasized that film is “a significant medium for the communication of ideas”…and “is protected by the constitutional guarantees of free expression”. Id. at 865.  Film is an expression of ideas and is entitled to constitutional protection irrespective of its contribution to the market place.  The nature of celebrity and prominence is that they will invite creative comment.  Chief Justice Bird concluded that in this situation the value of first amendment protections outweighs the right of publicity.  Additionally, the use of likeness in advertisements of the film was considered merely an adjunct to the exhibition of the film and therefore, not actionable. Id.

Although many instances encompass the use of famous personalities, cases involving private individuals also arise.  Recently, the Second Circuit, upheld a New York Court of Appeals ruling stating that a Plaintiff could not recover under New York’s right of privacy statute “regardless of any false implication that might be reasonably drawn from the use of her photographs to illustrate” a magazine column on sexual regrets.    Messenger v. Gruner + Jahr Printing and Publ’g, 208 F.3d 122 (2nd Cir. 2000).   This decision was based on the determination that the column was newsworthy, the Plaintiff’s picture bore a relationship to the article and the article was not an “advertisement in disguise.”  Id.   The model whose photograph accompanied the article was not informed of its use prior to publication.   Individuals are cautioned to review the pertinent statutes and/or common law in each state.  The case in question was in New York, a jurisdiction which has exemptions to the laws of right of publicity which many other states do not follow.

Advertising versus Other Use

Under the law in most states, use of a person’s name, likeness, or picture other than as part of a public event, for a newsworthy purpose or in connection with an artistic work not primarily an impersonation would not be allowed. See, e.g., Estate of Elvis Presley v. Robb Russen, 513 F.Supp. 1339 (D.Ct. N.J. 1981) where an Elvis impersonator was held to have violated the rights of the Elvis estate. In some states, misappropriation of privacy rights and publicity rights prohibit only advertising. Courts applying Tennessee and Virginia law have construed applicable statutes that way. See, e.g., Apple Corps. Ltd. v. A.D.P.R., Inc., 843 F.Supp. 342 (M.D. Tenn. 1993) (holding that a band impersonating the Beatles could not be restricted from performing its act but was restricted from advertising it). See also, Williams v. Nathan, 21 Med. L. Rptr. 1339 (E.D. Va. 1993). On the other hand, although the California statute relating to privacy and publicity rights prohibits only use of an individual’s name, likeness, or identity in advertising, the California common law dictates that individuals have such rights in situations not involving advertising. See, e.g., Perfect 10, Inc. v. Talisman Communs. Inc., 2000 U.S. Dist. LEXIS 4564 (C.D. Ca. 2000).  In Perfect 10, the Court granted a default judgment to Plaintiff as a result of Defendant’s appropriation of photographs of Plaintiff’s assignors.  The photographs were appropriated for the purpose of advertising and soliciting “sale of photographs and other works on Defendant’s website and for the purpose of selling the appropriated photographs through paid subscriptions to restricted areas of Defendant’s website.”   The Court ruled that this constituted a violation of California’s right of publicity law. See also, Dora v. Frontline Video, Inc., 15 Cal. App. 4th 536 (1993).

UNREASONABLE PUBLIC DISCLOSURE OF EMBARRASSING PRIVATE FACTS

The tort of unreasonable public disclosure of embarrassing private facts is applicable only where the facts being publicized are not newsworthy or, if arguably newsworthy, go beyond the “information to which the public is entitled, and becomes a morbid and sensational prying into private lives for its own sake.” See, e.g., Baugh v. CBS, Inc., Group W. Television, 28 F.Supp. 745 (N.D. Cal. 1993), infra. In addition, the facts must be at least relatively confidential. In Cox Communications v. Lowe, 173 Ga. App. 812, 328 S.E.2d 384 (Ga. App. 1985), a prison inmate who incidentally appeared in a television report concerning prison abuse had no claim for public disclosure of the fact that he was imprisoned as his incarceration was a matter of public record. In Batts v. Capital City Press, Inc., 479 So.2d 534 (La. App. 1985), the Louisiana Court of Appeals held that because the Plaintiff was attacked in a public place, the information was public and could not be the subject of a claim for public disclosure of embarrassing private facts. Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222 (7th Cir. 1993), involved a book which detailed historical events. In the book, the writer discusses the life stories of various individuals. In a section regarding a particular woman, the author disclosed information about the woman’s ex-husband. The District Court rejected the ex-husband’s claim regarding publicity given to embarrassing private facts on the grounds that the information disclosed was either public record or publicly known prior to publication of the book. On the other hand, in Baugh v. CBS Company, Inc. Group W Television, 828 F.Supp. 745 (N.D. Cal. 1993), the Court held that there was a jury question whether the producers and broadcasters of Street Stories had gone too far in publicly disclosing private facts about a woman who was the victim of spousal abuse. See also, Johnson v. Sawyer, 4 F.3d 369 (5th Cir. 1993), in which a Texas court held that the IRS was liable for wrongfully disclosing confidential information relating to a taxpayer’s tax return.

With the explosion of the Internet, the rights of publicity and privacy have entered a new battlefield.  In a manner of seconds, photography, music and streaming video can be distributed to subscribers worldwide, posing increasing threats to the protection of these rights.  Once posted on the Web, users can copy items almost instantaneously.  This issue of unreasonable publicity of private facts was recently addressed in Michaels v. Internet Entertainment Group Inc., et. al., 5 F.Supp. 2d 823 (D.C. Cal. 1998).  Singer Bret Michaels and actress Pamela Anderson Lee sought to enjoin Defendants from disseminating videotape via the Internet of Michaels and Lee engaged in sexual intercourse.  Plaintiffs filed a preliminary injunction, inter alia, for violation of the right of privacy and right of publicity.  The Defendant argued that Ms. Anderson’s nude appearances in magazines, movies and publicly distributed videotapes rendered the facts on the Michaels videotape no longer private.   The Court disagreed concluding that the private facts depicted on the video were not public by either the “virtue of Lee’s professional appearances or by dissemination of the Tommy Lee videotape.” Id. at 841.  Furthermore, the Court disposed of the newsworthiness argument by noting that the “privilege to report newsworthy information is not without limit.  ‘Where the publicity is so offensive as to constitute a morbid and sensational prying into private lives for its own sake, it serve no legitimate public interest and is not deserving of protection’.” Id. at 840 (citing Diaz v. Oakland Tribune, Inc., 188 Cal. Rptr. 762 at 767 (1983)).  However, the United States District Court granted summary judgment to Paramount Pictures and Viacom (for broadcasting information about the video, as opposed to broadcasting the video itself, in a syndicated television program) noting that the California Supreme Court had recently restated the principle that the newsworthiness defense was to be construed broadly and reiterated that it is “not limited to high-minded discussion of politics and public affairs.” Michaels v. Internet Entertainment Group Inc., et. al., 48 U.S.P.Q. 2d (BNA) 1891(D.C. Cal. 1998).

Conclusion

It is always better to obtain a written consent which permits the use of the name, likeness, or identity of any individual appearing in or who is the subject of disclosure of events in any publication or production.  As outlined above, there are limited situations in which one may make such use without permission.  However, because of the legal uncertainty in this area, it is necessary to have competent counsel review the situation presented prior to any such proposed use.

Rights of Privacy and Publicity in Interactive Media

(REVISED FOR NBI PROGRAM ON THE LAW OF THE INTERNET IN GEORGIA)

By Rob Hassett, Casey Gilson P.C., Atlanta, Georgia

Earlier versions of this article appeared in the program materials for the internet law seminar sponsored by NBI, Inc. which was held in Atlanta, Georgia on February 18, 1998 and the January 1997 issue of The Multimedia & Technology Licensing Law Report published, at that time, by Warren, Gorham & Lamont, and currently published by West Group. That article was based on program materials developed by the writer in connection with his presentation at the Cutting Edge Music Conference in New Orleans, Louisiana in August of 1996.

The writer wishes to thank Lori Brill and Lynn Hassett, attorneys in his law firm when he wrote the article, as well as Adam Alexander, an attorney at the law firm of Cooper & Scully, in Dallas, Texas, for their help in updating this Article.

© 2000 Rob Hassett, All Rights Reserved.

RIGHT OF PUBLICITY AND RIGHT OF PRIVACY

Today, interactive media incorporates video, music and still photography. When may a producer of interactive media use an individual’s name, likeness, or identity without permission? Restrictions on the use of names, likenesses and identities of individuals are governed by the right of publicity and two categories of the right of privacy.

Restatements

Section 46 of the Restatement of the Law Third, Unfair Competition, states in pertinent part:

One who appropriates the commercial value of a person’s identity by using without consent the person’s name, likeness, or other indicia of identity for purposes of trade is subject to liability for the relief appropriate. (1)

Section 652A of the Restatement of the Law, Torts 2d, states in pertinent part:

The right of privacy is invaded by: … (b) appropriation of the other’s name or likeness…; (c) unreasonable publicity given to the other’s private life….; (2)

The elements of appropriation of invasion of privacy are the same as for violation of the right of publicity with one exception. The invasion of the right of privacy is a personal tort and it generally may not be assigned or inherited. Whereas, the right of publicity, a property right, may generally be assigned and inherited. See, e.g., Martin Luther King Jr. Center For Social Change v. American Heritage Products, 250 Ga. 135, 296 S.E.2d 697 (Ga. 1982).

Origins

English common law did not recognize the right of privacy or publicity except to the extent that such rights existed tangentially under copyright and trademark law. In 1890, Samuel D. Warren and future Supreme Court Justice Louis D. Brandeis wrote an article arguing that a right of privacy should exist. Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193 (1890). The first court to accept the right of privacy was the Georgia Supreme Court in Pavesich v. New England Life Ins. Co., 122 Ga. 190, 50 S.E. 68 (1905). The Georgia Supreme Court held that Mr. Pavesich stated a claim against New England Life for alleged wrongful use of his picture in an advertisement for the Defendant’s insurance products. Today, privacy and publicity rights are based on state common and statutory law. Because these rights are relatively new and different legislatures and courts decide how they apply, there are variations in the interpretation and application of these rights.

Acceptance

Since the Pavesich case, some form of the right of privacy relating to appropriation and/or the right of publicity has been adopted either by statute or court decision in every state that has addressed the issue. Minnesota and Virginia appear to be the only states which have rejected right to privacy involving giving unreasonable publicity to an individual’s private life. See Hendry v. Conner, 303 Minn. 317, 226 N.W.2d 921 (1975) and Williams v. Nathan, 21 Med. L. Rptr. 1339 (E.D. Va. 1993); Brown v. American Broadcasting Co., 704 F.2d 1296 (4th Cir. 1983).

Written Consent

To avoid violating these rights, the best approach is to obtain a written consent from each person whose name, likeness, or identity will be included in a multimedia production. There are three reasons why consent should be obtained in writing. First, unless in writing, some state statutes provide that such consents are not valid. See, J. Thomas McCarthy, The Right of Publicity and Privacy, § 10.6 (1996). Second, there could be a dispute about the existence of an oral consent. Finally, unless the consent is in writing, there could be confusion concerning its scope.

Uses Permitted

There are often situations in which it is impractical to obtain written consent, and one must decide whether or not to use a particular photograph or video for an interactive media production. Situations in which such use is permitted include the reporting of newsworthy events and uses in which no person is identified or identifiable. Courts generally hold the reporting of newsworthy events to be allowed under the First Amendment which forbids any laws “abridging the freedom of speech or of the press.”

Assuming that the individual is not violating anyone’s copyrights, there are four circumstances in which the use of photographs, films and/or videos is permitted. First, the use of photographs, films and videos of buildings or other structures taken from public streets and similar non-restricted areas in which individuals are not recognizable does not violate anyone’s privacy or publicity rights. The exception to this rule is the unusual situation where false information or embarrassing private facts about an individual connected with a building or structure is included in the production. The reason is that privacy and publicity rights relate to individuals and not to buildings or other structures. See, e.g., Jaubert v. Crowley Post-Signal, Inc., 375 So.2d 1386 (La. 1979).

Second, only individuals who are recognizable in a photograph or video have any claim for misappropriation of likeness or identity. Therefore, morphing pictures and videos so individuals are not recognizable eliminates any privacy and publicity right claims. See, e.g., Cheatham v. Paisano Publications, 891 F.Supp. 381 (W.D. Ken. 1995), where the Court said that there was a jury question whether or not the Plaintiff’s posterior was recognizable in the particular photograph.

In Pesina v. Midway, 948 F. Supp. 40 (N.D. Ill.1996), a martial artist hired to model for characters of the coin operated arcade games Mortal Kombat and Mortal Kombat II alleged that use of his name and likeness in subsequent home video games violated his common law right of publicity. Mr. Pesina’s movements had been captured on video, digitized, and incorporated into the games after extensive editing. The district court granted Midway’s motion for summary judgment in part because Midway was able to show that the public did not recognize Mr. Pesina within the game. “[A]fter comparing Mr. Pesina and the game character, Johnny Cage, who allegedly resembles the plaintiff, only 6% of 306 Mortal Kombat users identified Mr. Pesina as the model.” Id. at 42. The brief use of Pesina’s name in the game (for eight seconds only when a player won), although unauthorized, also was held to not constitute a right of publicity claim.

Third, photographs, videos, and films taken of participants and spectators in connection with a newsworthy event may be used in photo essays and documentaries of the event. In Cheatham v. Paisano Publications, supra, the Plaintiff was a jean “designer” who wore one of her own “designs” to a Kentucky bikers’ convention. She had cut out the bottom of a pair of jeans and replaced it with fishnet fabric. A magazine published a photo essay of the event which included pictures of her wearing her special outfit. She sued the magazine and claimed that it misappropriated her identity. In dismissing her claim, the Court held that the photo essay was a report of a newsworthy event. See also, Time, Inc. and Steve Kagan v. Sand Creek Partners, L.P., 825 F.Supp. 210 (S.D. Ind. 1993). The Court in Cheatham also held that use of the Plaintiff’s pictures on T-shirts was not a protected newsworthy use and, if the Plaintiff were recognizable from the picture, then Plaintiff would have a basis for a claim.

There are limitations on the use of name, likeness, and identity in connection with reporting news. For example, in the movie “Woodstock” there is an extensive interview with an individual responsible for cleaning latrines. This interviewee sued for misappropriation of his right of privacy. The Court held that he was made an “involuntary performer” due to the extensive interview and allowed the case to proceed to trial. See Taggart v. Wadleigh-Maurice, Ltd., 489 F.2d 434 (3d Cir. 1973). Additionally, copying a performer’s entire performance goes beyond the allowed reporting of a newsworthy event and constitutes a violation of the performer’s right of publicity. See Zacchini v. Scripps-Howard Broadcasting, Co., 433 U.S. 564 (1977). Also where a performance is staged using actors, such as a professional wrestling match, it is unlikely a Court would hold it to be newsworthy. See, e.g., Ventura v. Titan Sports, Inc., 65 F.3d 725 (8th Cir. 1995).

Finally, use of names, pictures and identities in connection with the production of biographies of newsworthy individuals is permissible. In Harris Matthews v. Random House, 15 F.3d 432 (5th Cir. 1994), the Fifth Circuit U.S. Court of Appeals, applying Texas law, held that a book detailing the author’s and her ex-husband’s experiences as undercover agents did not violate the privacy or publicity rights of her ex-husband. Information concerning their activities and convictions were the subject of news reports. Thus, it was a matter of public record and considered newsworthy events. See, also, Mickey Dora v. Frontline Video, Inc., 18 Cal. Rptr. 2D 790 (Cal. App. 1993), in which Mickey Dora, a surfing legend, appeared in a video documentary entitled “The Legends of Malibu.” The Court held that the use of Dora’s picture was newsworthy.

Uses Not Permitted

There are at least three (3) categories of uses of names, likenesses, and identities of individuals which are never permissible. Those uses involve advertising, using actors and actresses, and exceeding the scope of agreements limiting use of interviews or photographs. First, use of an individual’s name, likeness, or identity in advertising, without that individual’s consent is not permitted. For example, in Town & Country Properties, Inc. v. Riggins, 249 Va. 387, 457 S.E.2d 356 (1995), the Plaintiff, who had been a successful football player for the Washington Redskins, transferred his interest in a house he owned in Virginia to his ex-wife as part of a divorce settlement. When his wife decided to sell the house, she placed his name and picture prominently on flyers promoting her sale of the house. The Supreme Court of Virginia held that Riggins had a claim for infringement of what was, in effect, his right of publicity. See also, Pooley v. National Hole-N-One Assoc., 89 F. Supp. 2d 1108 (D.C. Az. 2000) (holding that Plaintiff’s right of publicity was violated because Defendant used video footage of Plaintiff making a “hole in one” in a commercial manner to promote its fundraising program). The aforementioned situation is treated differently from the use of an individual’s name, picture, or identity in connection with advertising in a legitimate newsworthy context. This kind of advertising is permitted. See, e.g., Montana v. San Jose Mercury News, Inc., 40 Cal. Rptr. 2d 639 (6th Cir. 1995); Lane v. Random House, Inc., 23 Med. L. Rptr. 1385 (D.D.C. 1995). Second, there is no exception to privacy and publicity rights with respect to individuals performing as actors and actresses in dramatic productions. See, e.g., Ventura v. Titan Sports, Inc., supra.

Third, even where use is newsworthy and does not constitute advertising, unauthorized usage is illegal in instances where the limited purpose for which the interview or pictures was intended is exceeded. In Multimedia WMAZ, Inc. v. Kubach, 212 Ga. App. 707, 443 S.E.2d 491 (Ga. App. 1994), the Plaintiff appeared on a television program in which he was interviewed about having contracted AIDS. Prior to the program, the Plaintiff and Defendant reached an understanding that the Plaintiff’s face would be disguised digitally so that he could not be identified. Apparently, due to the negligence of station employees, the Plaintiff was recognizable at the beginning of the show. The Court held that the Plaintiff had a claim. See also, Daughtry v. Booth & Random House, 23 Med. L. Rptr. 1215 (Glynn County, Georgia Superior Court 1994).

Parody

Parodies are entitled to a substantial degree of First Amendment protection. However, this protection must be balanced against intellectual property rights. See, for example, the Supreme Court’s application of the Doctrine of Fair Use in the copyright law context in Luther R. Campbell, et al. v. Acuff-Rose Music, Inc., 114 S.Ct. 1164 (1994). In Cardtoons, L.C. v. Major League Baseball Players Ass’n, 838 F. Supp. 1501 (N.D. Okla. 1993), the Plaintiff sought a declaratory judgment claiming that it was not a violation of the publicity rights of well-known baseball players to produce and distribute cards with caricatures and names similar to those baseball players and containing text on the back that ridicules the players. The Tenth Circuit Court of Appeals balanced the publicity rights of the baseball players against the Plaintiff’s First Amendment right to use parody to criticize activities of public figures. The Court held that the Plaintiff was entitled to produce and distribute the cards. But see, White v. Samsung Electronics America, 971 F.2d 1395 (9th Cir. 1991) in which the Ninth Circuit Court of Appeals held, over two vigorous dissents, that a print advertisement using a robot that mimicked and parodied the persona of Vanna White infringed her right of publicity. Critics argued that celebrities’ monopolization of words, names and images of general cultural significance would lead to the depletion of the public domain and the stifling of free expression.(3) However, recently, the Ninth Circuit Court of Appeals held that California’s right of publicity protects against uses of one’s image in advertising. Newcombe v. Adolph Coors Co., 157 F.3d 686 (9th Cir. 1998).

Artistic and Literary Uses

Many times artists employ the use of a name or likeness of a real person in their artistic and literary projects. Although this may not fall under the umbrella of newsworthy events, the First Amendment’s right to free speech often shields forms of expressive art. “The use of the name of a real person as the name … in a title of a work of entertainment” can be immune from liability where it has “some real artistic relevance” to the work and is “not chosen just to exploit the publicity value of the person”. J. Thomas McCarthy, 2 Rights of Publicity and Privacy § 8:72 (2d ed. 2000).

First amendment protection and the right of publicity recently clashed in a case involving the music industry. In Parks v. LaFace Records, 76 F. Supp. 2d 775 (E.D. Mich. 1999), Rosa Parks sued the Defendants to prevent the use of her name as the title of a rap song written, performed, marketed and distributed by the Defendants. Ms. Parks objected to the use of her name due to the content of the song. The United States District Court for the Eastern District of Michigan held that “because the title ‘Rosa Parks’ is not ‘wholly unrelated’ to Defendants’ song, and because the title is the name of an expressive work and not a disguised commercial for a product” the right of publicity did not exist. Id. at 782.

In Guglielmi v. Spelling Goldberg, 25 Cal. 3d 860, 603 P.2d 454 (1979), the Supreme Court of California skirted the issue by declaring that the right of publicity is not descendible. However, in Chief Justice Bird’s concurrence, he discussed the issue of whether the use of a celebrity’s name and likeness in a fictional film exhibited on television constituted an actionable infringement of that person’s right of publicity. Id. The Chief Justice emphasized that film is “a significant medium for the communication of idea”…and “is protected by the constitutional guarantees of free expression”. Id. at 865. Film is an expression of ideas and is entitled to constitutional protection irrespective of its contribution to the market place. The nature of celebrity and prominence is that they will invite creative comment. Chief Justice Bird concluded that in this situation the value of first amendment protections outweighs the right of publicity. Additionally, the use of likeness in advertisements of the film was considered merely an adjunct to the exhibition of the film and therefore, not actionable. Id.

Although many instances encompass the use of famous personalities, cases involving private individuals also arise. Recently, the Second Circuit, upheld a New York Court of Appeals ruling stating that a Plaintiff could not recover under New York’s right of privacy statute “regardless of any false implication that might be reasonably drawn from the use of her photographs to illustrate” a magazine column on sexual regrets. Messenger v. Gruner + Jahr Printing and Publ’g, 208 F.3d 122 (2nd Cir. 2000). This decision was based on the determination that the column was newsworthy, the Plaintiff’s picture bore a relationship to the article and the article was not an “advertisement in disguise.” Id. The model whose photograph accompanied the article was not informed of its use prior to publication. Individuals are cautioned to review the pertinent statutes and/or common law in each state. The case in question was in New York, a jurisdiction which has exemptions to the laws of right of publicity which many other states do not follow.

Advertising Versus Other Use

Under the law in most states, use of a person’s name, likeness, or picture other than as part of a public event or for a newsworthy purpose would not be allowed. See, e.g., Estate of Elvis Presley v. Robb Russen, 513 F.Supp. 1339 (D.Ct. N.J. 1981) where an Elvis impersonator was held to have violated the rights of the Elvis estate. In some states, misappropriation of privacy rights and publicity rights prohibit only advertising. Courts applying Tennessee and Virginia law have construed applicable statutes that way. See, e.g., Apple Corps. Ltd. v. A.D.P.R., Inc., 843 F.Supp. 342 (M.D. Tenn. 1993) (holding that a band impersonating the Beatles could not be restricted from performing its act but was restricted from advertising it). See also, Williams v. Nathan, 21 Med. L. Rptr. 1339 (E.D. Va. 1993). On the other hand, although the California statute relating to privacy and publicity rights prohibits only use of an individual’s name, likeness, or identity in advertising, the California common law dictates that individuals have such rights in situations not involving advertising. See, e.g., Perfect 10, Inc. v. Talisman Communs. Inc., 2000 U.S. Dist. LEXIS 4564 (C.D. Ca. 2000). In Perfect 10, the Court granted a default judgment to Plaintiff as a result of Defendant’s appropriation of photographs of Plaintiff’s assignors. The photographs were appropriated for the purpose of advertising and soliciting “sale of photographs and other works on Defendant’s website and for the purpose of selling the appropriated photographs through paid subscriptions to restricted areas of Defendant’s website.” The Court ruled that this constituted a violation of California’s right of publicity law. See also, Dora v. Frontline Video, Inc., 15 Cal. App. 4th 536 (1993).

Unreasonable Publicity Concerning Private Facts

The tort of unreasonable publicity of private facts is applicable only where the facts being publicized are not newsworthy or, if arguably newsworthy, go beyond the “information to which the public is entitled, and becomes a morbid and sensational prying into private lives for its own sake.” See, e.g., Baugh v. CBS, Inc., Group W. Television, 28 F.Supp. 745 (N.D. Cal. 1993), infra. In addition, the facts must be at least relatively confidential. In Cox Communications v. Lowe, 173 Ga. App. 812, 328 S.E.2d 384 (Ga. App. 1985), a prison inmate who incidentally appeared in a television report concerning prison abuse had no claim for public disclosure of the fact that he was imprisoned as his incarceration was a matter of public record. In Batts v. Capital City Press, Inc., 479 So.2d 534 (La. App. 1985), the Louisiana Court of Appeals held that because the Plaintiff was attacked in a public place, the information was public and could not be the subject of a claim for public disclosure of embarrassing private facts. Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222 (7th Cir. 1993), involved a book which detailed historical events. In the book, the writer discusses the life stories of various individuals. In a section regarding a particular woman, the author disclosed information about the woman’s ex-husband. The District Court rejected the ex-husband’s claim regarding publicity given to embarrassing private facts on the grounds that the information disclosed was either public record or publicly known prior to publication of the book. On the other hand, in Baugh v. CBS Company, Inc. Group W Television, 828 F.Supp. 745 (N.D. Cal. 1993), the Court held that there was a jury question whether the producers and broadcasters of Street Stories had gone too far in publicly disclosing private facts about a woman who was the victim of spousal abuse. See also, Johnson v. Sawyer, 4 F.3d 369 (5th Cir. 1993), in which a Texas court held that the IRS was liable for wrongfully disclosing confidential information relating to a taxpayer’s tax return.

With the explosion of the Internet, the rights of publicity and privacy have entered a new battlefield. In a manner of seconds, photography, music and streaming video can be distributed to subscribers worldwide, posing increasing threats to the protection of these rights. Once posted on the Web, users can copy items almost instantaneously. This issue of unreasonable publicity of private facts was recently addressed in Michaels v. Internet Entertainment Group Inc., et. al., 5 F.Supp. 2d 823 (D.C. Cal. 1998). Singer Bret Michaels and actress Pamela Anderson Lee sought to enjoin Defendants from disseminating videotape via the Internet of Michaels and Lee engaged in sexual intercourse. Plaintiffs filed a preliminary injunction, inter alia, for violation of right of privacy and right of publicity. The Defendant argued that Ms. Anderson’s nude appearances in magazines, movies and publicly distributed videotapes rendered the facts on the Michaels videotape no longer private. The Court disagreed concluding that the private facts depicted on the video were not public by either the “virtue of Lee’s professional appearances or by dissemination of the Tommy Lee videotape.”(4) Id. at 841. Furthermore, the Court disposed of the newsworthiness argument by noting that the “privilege to report newsworthy information is not without limit. ‘Where the publicity is so offensive as to constitute a morbid and sensational prying into private lives for its own sake, it serve no legitimate public interest and is not deserving of protection’.” Id. at 840 (citing Diaz v. Oakland Tribune, Inc., 188 Cal. Rptr. 762 at 767 (1983)). However, the United States District Court granted summary judgment to Paramount Pictures and Viacom noting that the California Supreme Court had recently restated the principle that the newsworthiness defense was to be construed broadly and reiterated that it is “not limited to high-minded discussion of politics and public affairs.” Michaels v. Internet Entertainment Group Inc., et. al., 48 U.S.P.Q. 2d (BNA) 1891(D.C. Cal. 1998).

Right to Privacy on the Internet

Legislation

Right to privacy has become a fervently debated topic with the advent of the Internet. Concerns over improper use of information gathered on-line has prompted special interest groups and Congress to regulate the dissemination of personal information. The latest developments concerning privacy on the Internet relate to the passage of the Children’s Online Privacy Protection Act of 1998 and the effect of the European Privacy Directive.

Children’s Online Privacy Protection Act of 1998 (COPPA)

The Children’s Online Privacy Protection Act of 1998 (COPPA), 15 U.S.C. §§ 6501, et. seq. prohibits the collection and distribution of personal information regarding children under 13 and restricts distribution and use of that information. This Act became effective April 21, 2000 and rules written by the Federal Trade Commission govern its operation. The applicable rules are available in the federal register at 16 C.F.R. Part 312 and at www.ftc.gov/privacy/index.html. These rules apply to Web sites that target children under 13 years old or know that personal information is being provided by children under 13 years old. For the first two years after implementation, the more verifiable forms of parental consent are only required for those activities that pose the greatest risk to the safety and privacy of children (i.e., disclosing personal information to third parties or making that information publicly available through chatrooms or similar activities). The more reliable methods are mail, use of credit cards and digital signatures. The less reliable method is e-mail from a parent (because it is easier for a child to send that form of consent and pretend it is from a parent).

European Union Privacy Directive

The European Union (EU), in its European Union Privacy Directive, has granted broad rights to individuals whose personal information is collected and stored in databases. (For the official text of the European Union Privacy Directive, see Official Journal of the European Communities of 23 November 1995 No L. 281 p. 31. For an unofficial version, visit http://www.cdt.org/privacy/eudirective/EU_Directive_.html.) This EU position, based on the idea that privacy is a fundamental human right, is more rigorous than that of the United States. The United States does not provide as extensive access to individuals to review personal information and has relatively few restrictions on the its use.(5) The conflict between the EU position and the US position has threatened international electronic commerce.(6) Therefore, the US Department of Commerce negotiated with EU representatives and proposed safe harbor principles for American companies to utilize in determining whether they comply with EU data protection laws. See Joint Report on Data Protection Dialogue to the EU/US Summit, June 21, 1999. The data privacy accord “safe harbor” provision was approved in May 2000. Now, the European parliament and the European Union executive body must decide on a plan. The plan is expected to be approved in July.(7)

Major companies are now requiring sites on which they advertise to meet the European Union standards and the safe harbor provision. For example, IBM’s policy on personal information states that it will inform the consumer how it will use the personal information collected (See http://www.ibm.com/privacy/.):

At IBM, we intend to give you as much control as possible over your personal information. In general, you can visit IBM on the Web without telling us who you are or revealing any information about yourself. There are times, however, when we may need information from you, such as your name and address. It is our intent to let you know before we collect personal information from you on the Internet.

If you choose to give us personal information via the Internet that we or our business partners may need — to correspond with you, process an order or provide you with a subscription, for example – it is our intent to let you know how we will use such information. If you tell us that you do not wish to have this information used as a basis for further contact with you, we will respect your wishes. We do keep track of the domains from which people visit us. We analyze this data for trends and statistics, and then we discard it.

Conclusion

It is always better to obtain a written consent which permits the use of the name, likeness, or identity of any individual appearing in or who is the subject of disclosure of events in any publication or production. As outlined above, there are limited situations in which one may make such use without permission. However, because of the legal uncertainty in this area, it is necessary to have competent counsel review the situation presented prior to any such proposed use.

1 This videotape depicting sexual relations between Lee and her husband Tommy Lee was widely distributed.

2 Anne K. Mosceyunas, On-Line Privacy: The Push and Pull of Self-Regulation and Law, Computer Law Section Newsletter, State Bar of Georgia, July, August, September, 1999, pp. 13-15; Kevin A. Cranman, Internet and Electronic Communication Privacy Issues: An Overview and Legislative Update, 14th Annual Computer Law Institute, Program Materials 1999, Part 10.

3 Jane K. Winn, Digital Signatures, Smart Cards, and Electronic Payment Systems, ICLE Fourteenth Annual Computer Law Institute, Sept. 24, 1999, p. 22.

4 Jason Spingard-Koff, European Union OKs “Safe Harbor,” Wired News, May 31, 2000.

5 Relief is granted in the form of an injunction and recovery of the value of the appropriation.

6 Note that there are two other categories of the right of privacy, wrongful intrusion and false light, that are not addressed in this article.

7 Michael Higgins, A Pitch for the Right of Publicity, IP Magazine, December 1998.

Rob Hassett is an attorney with Hassett Cohen Goldstein & Port, LLP in Atlanta, Georgia.

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

© 2000, Rob Hassett, Atlanta, Georgia. All Right Reserved

The Law of the Internet – Copyright

By:  Rob Hassett

Hassett Cohen Goldstein, LLP

990 Hammond Drive

Suite 990 Atlanta, GA 30328

(770) 393-0990

www.internetlegal.com

The writer wishes to thank his wife, Lynn Hassett, an attorney in his law firm, and Adam Alexander, formerly a law student at Emory University Law School, now practicing law at the firm of Cooper & Scully, PC in Dallas, Texas, for their help in preparing this section of these materials.

Background and Summary

This article first appeared in the program materials for the internet law seminar sponsored by NBI, Inc. which was held in Atlanta, Georgia on February 18, 1998. This intermediate level article addresses the subject of copyright law as it relates to the internet. (18 Pages)

I. INTRODUCTION

Article I, Section 8 of the Constitution of the United States reads in pertinent part:

The Congress shall have power …;

….

To promote the Progress of Science and useful Arts by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

Protection of works of authorship that are fixed in any “tangible medium of expression” is governed by Chapters 1 through 8 and Chapter 10 of Title 17 of the United States Code.(1) State law with respect to such works is pre-empted by federal law.(2) State law still applies with respect to rights in sound recordings fixed before February 15, 1972 and with respect to works that are not fixed in any tangible medium of expression.

The United States has been a party to numerous treaties regarding copyright law. The most important treaty is the Berne Convention to which the United States became a party in 1989. The Berne Convention provides that each member nation will protect the works of each other member nation’s citizens at least as well as it protects the works of its own citizens; as well as sets forth standards that must be met regarding the protection of works of authorship by all member nations. The process of proposing amendments to the Berne Convention is administered by the World Intellectual Property Organization (“WIPO”) which is an agency of the United Nations headquartered in Geneva, Switzerland.(3)

II. COPYRIGHTABLE SUBJECT MATTER

A. General Principles

17 U.S.C.A. §102 reads in pertinent part:

(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated either directly or with the aid of a machine or device. Works of authorship include the following categories:

(1) Literary works;

(2) Musical works, including any accompanying words;

(3) Dramatic works, including any accompanying music;

(4) Pantomimes and choreographic works;

(5) Pictorial, graphic, and sculptural works;

(6) Motion pictures and other audiovisual works;

(7) Sound recordings; and

(8) Architectural works.

(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery regardless of the form in which it is described, explained, illustrated, or embodied in such work. (Emphasis added.)

In part (b), Congress codified the pre-existing case law that held that copyright law protects the expression of an idea but not the idea itself. It is thought that the idea/expression dichotomy is required by the First Amendment prohibition against enactment of any law that would abridge freedom of speech.(4) The basic concept is that copyright cannot monopolize an idea or concept. This has resulted in rules that are especially important to the Internet including:

(1) If there are only a limited number of ways to express an idea (for example, to write a computer program accomplishing a particular function) the idea and expression are said to merge and the coding is not protected by copyright law.(5)

(2) Scenes a` faire, which are stock literary devices such as incidents, characters or settings which, as a practical matter, are indispensable or at least standard in the treatment of a given topic are not protected by copyright law. The reasoning is that standard expression is so close to the non-protectable idea itself that the expression provides nothing new or additional over the idea, see, e.g., Atari, Inc. v. North American Phillips Consumer Electronics Corp., 672 F.2d 607 (7th Cir.), cert. denied, 459 U.S. 880 (1982).

(3) Expression is also not protectable where it is required by particular standards in the industry or considerations of efficiency, see, e.g., Data East U.S.A., Inc. v. Epyx, Inc., 862 F.2d 204 (9th Cir. 1989).

Additionally, whether an aspect of a work is an idea or expression of an idea is a matter of degree. Exact copying of the language of a novel, play or computer program is a copyright infringement. Writing a novel using no more than the same overall general plot as another novel or writing a computer program performing the same function as another is not a copyright infringement. Paraphrasing a novel or following a detailed plot outline is an infringement. See, Twin Peaks Productions, Inc. v. Publication Int’l, Ltd., et al., 996 F.2d 1366 (2d Cir. 1993) (finding detailed plot summaries of television series to be infringement). Paraphrasing linear computer code or following the structure, sequence and organization of that code has been held to be an infringement.(6)

B. Non-Literal Elements of Computer Software

The non-literal elements of computer software are elements of the software other than the source code and object code such as the overall layouts, menus, structure and look and feel. At one point there appeared to be a significant amount of protection for the non-literal elements of computer software. The courts even went so far as to apply the notion that taking the “total concept and feel” of a computer program (which had been found to be illegal with respect to television characters)(7) constitutes a copyright infringement.(8)

In the 1990’s the courts began restricting protection of non-literal elements in computer programs under copyright law. The two leading cases in this regard are Computer Associates, Inc. v. Altai, Inc.(9) and Lotus Dev. Corp. v. Borland Int’l, Inc.(10)

In the Altai case, Computer Associates had developed a scheduling program and, separately, an “ADAPTER” to allow the scheduling program to be operated on a number of different operating systems. Altai, a competitor of Computer Associates, desired to develop an “adapter type” program to allow its scheduling program to be used on an additional operating system. Altai hired an employee of Computer Associates who, without Altai’s knowledge, brought over code from the ADAPTER program. After Computer Associates filed suit, Altai realized what had happened, admitted liability for the direct copying and reconstructed the program without any literal copying. The court had to determine whether the non-literal copying constituted an infringement. The Court of Appeals approved the statements of the district court below that had said “references to structure, sequence, and organization” are no longer necessarily relevant to how computer programming is done. With object oriented programming, and especially with Windows based object oriented programming, such as Visual Basic, it is difficult to point to any particular sequence of a computer program. The court went on to describe its three step test for determining what, if any, of the non-literal elements of a computer program are protectable under copyright law.

The first step is “abstraction” where the court goes through a sort of “reverse engineering.” The court determines what are the various levels of abstraction of the program. At the lowest level are the actual instructions organized into a hierarchy of modules. At a higher level are the functions of each module. (Note that a selection and organization of modules could involve creativity that is protectable if at that level the program survives Step 2 “filtration” (discussed below), as compilations may be protectable under Section 103 of the Copyright Act.)

The second step is filtration of each level of abstraction. Here the court filters out the following at each level:

(a) Elements that constitute ideas or are dictated by efficiency;

(b) Elements dictated by external factors such as standard techniques rather than creative originality on the part of the programmer; and

(c) Elements taken from the public domain.

The third step is the comparison test. From the filtration step, the court has determined what of the plaintiff’s program is protectable expression and then the court determines whether or not the “defendant copied any aspect of this protected expression, as well as an assessment of the copied portion’s relative importance with respect to the plaintiff’s program.” The Court of Appeals also held that the district court’s appointment of its own expert witness was appropriate. Following these tests, the court held that there was no infringement. The court did hold that there was a possibility of misappropriation of trade secrets. The court said that state trade secret law is not pre-empted under Section 301 of the Copyright Act.

In Lotus v. Borland, supra, Borland had developed a competitive spreadsheet program that included an option which provided “a virtually identical copy of the 1-2-3 menu tree” contained in the Lotus spreadsheet program. There was no contention that the underlying code or protected elements of computer screen displays had been copied. Lotus’ only contention was that Borland had unlawfully copied its menu command hierarchy. The trial court concluded that Lotus’ menu hierarchy was protectable expression because, for example, many different words could be used for the same commands. The Court of Appeals reversed. Referring to 17 U.S.C. §102(b) (quoted above), the Court of Appeals said:

We hold that the Lotus menu hierarchy is an uncopyrightable method of operation. We do not consider whether it could also be a system, process, or procedure.

The Supreme Court granted certiorari to Lotus on an appeal from the First Circuit Court of Appeals decision, but the Supreme Court affirmed by default when it turned out that the Justices were equally divided on the issue.(11)

As courts became reluctant to protect non-literal elements of computer programs under copyright law, courts, at the same time, became more comfortable with granting patent protection to computer programs.(12)

Shifting much of the protection for non-literal elements of computer programs from copyright to patent law has created a situation that makes it much more difficult for start up companies to protect their software because of the much higher expense of filing for patent protection. In the writer’s view it also allowed for monopoly protection of some matters that would not have ever been protected by copyright law that are too easy to create in the software context to fairly be the subject of patent protection. There is so much programming code created every day that much of the software for which patent protection is granted is already being used by others in the industry who just have not gone to the trouble of applying for a patent. The writer submits that a modified hybrid of trade secret, patent and copyright law should be developed for the protection of computer software.

C. Screen Displays – Web Pages

The Copyright Office has taken the position that registration of an underlying computer program automatically covers the screen displays. The applicant need only describe the work as “computer programs.” However, if the application includes “screen displays” in its description of the work, the applicant will be required to include a printout or videotape of the screen display showing sufficient copyrightable authorship to support a claim to copyright in the screen display.(13) Note that computer programs are generally registered as literary works on Form TX (“TX” refers to “text”). For works on the Internet that are predominantly visual works of art, which is the typical case now, Form VA (“VA” refers to “visual arts”) should be used. Where audiovisual authorship predominates, which is likely to be more and more often the case in the future for Internet sites, the work should be registered as an audiovisual work on Form PA (“PA” refers to “performing arts”).

D. Data Bases

Also important to Internet issues is the protectability status of online data bases. An author has copyrights in his original contributions to a compilation, but not in the underlying works being used.(14) At one time there was a split in the circuits about whether compilations of pure facts could be protected by copyright if there was no originality involved based on the labor and effort used in the compilation. See, e.g., Leon v. Pacific Telephone & Telegraph Co., 91 F2d 484 (9th Cir. 1937). This “sweat of the brow” line of cases was overruled in Feist Publications, Inc. v. Rural Telephone Service Co.,(15) where the Supreme Court held that there was no copyright infringement in copying a telephone book because there was no creativity involved in compiling it. The Court pointed out that placing names in alphabetical order and adding addresses was standard and not creative.(16) In Matthew Bender & Company, Inc. v. West Publishing Co.,(17) it was held that copying West Publishing compilations of Federal and District Court cases was not an infringement. West had successfully argued in West Publishing Co. v. Mead Data Central, Inc.,(18) that it had a protectable interest in selection of the order in which it assembled the case decisions.

At the December 1996 WIPO conference in Geneva, the United States representative proposed that the Berne Convention be amended so that the time and effort that went into developing data bases would be sufficient to allow for copyright protection – the current rule in Europe. The United States scientific community and others effectively lobbied the White House to withdraw this proposal.(19)

III. EXCLUSIVE RIGHTS

Section 106 of the Copyright Act reads in pertinent part:

Subject to Sections 107 through 120, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) To reproduce the copyrighted work in copies or phonorecords;

(2) To prepare derivative works based upon the copyrighted work;

(3) To distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease or lending [this provision does not apply to redistribution of an authorized copy, see Section 109 of the Copyright Act];

(4) In the case of literary, musical, dramatic, and choreographic works, pantomimes and motion pictures, and other audiovisual works, to perform the copyrighted work publicly [this provision does not apply to sound recordings, see Section 114 of the Copyright Act];

(5) In the case of literary, musical, dramatic, and choreographic works, pantomimes and pictorial, graphics, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) In the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission [this provision is modified by Section 114 of the Copyright Act – see the discussion of “musical works” below].

To the extent that each of these exclusive rights have special relevance to online use, they are discussed in Part VIII below. For an in-depth discussion of how the exclusivity of these rights is affected by the doctrine of fair use under Section 107 of the Copyright Act, see the article on Fair Use In New Media Technology by Rob Hassett and Adam Alexander included with these materials.

IV. OWNERSHIP

Copyrights in a work of authorship vest initially in the individual author unless the work is a “work made for hire” in which case the employer is considered to be the author.(20) A transfer of copyright ownership may only be made in writing.(21) A work may be a work made for hire only if it:

(1) Is a work prepared by an employee within the scope of his or her employment, or

(2) It is a work prepared as a contribution to a collective work, an audiovisual work or one of the other categories of work listed under the definition of “work made for hire” under Section 101 of the Copyright Act and “the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.”

Ownership can be a problem where a company employs another company as an independent contractor to create a web site. Under those circumstances, without a writing to the contrary, the commissioning company would not own the copyrights in that web site.(22) This is contrary to the law that applied before the 1976 Copyright Act became effective in 1978. Where a company pays for an independent contractor to develop a web site and does not have a written agreement as to ownership, the company would arguably have an implied license to do whatever it wished with the web site, but couldn’t prevent the independent contractor from also using those portions of the web site developed by the independent contract. Of course, the independent contractor would not be permitted to use materials contributed by others and would be subject to any privacy and publicity rights of any individuals whose name and/or likeness appeared in the web site.

V. REGISTRATION

Prior to January 1, 1978, registration was required to maintain ownership of a copyright in a work. Currently, all that is required for ownership is that the work be fixed in a tangible medium of expression. Registration in the Copyright Office is still advisable. With some minor exceptions, unless a work is registered before an infringement occurs, the copyright owner may not recover statutory damages (damages which a judge may award under Section 504 without proof) or attorney’s fees (which a judge may otherwise award under Section 505).(23) Additionally, with some minor exceptions, registration is required prior to the filing of a lawsuit for copyright infringement.

VI. NOTICE OF COPYRIGHT

Prior to March 1, 1989, when the United States became a member of the Berne Convention, it was required that copyright notices be placed on works in order to maintain ownership in the copyrights in those works. Notice of a copyright is no longer required for ownership. Nevertheless, it is recommended that copyright notices be placed on any work. Adding the notice prevents a defendant’s claim of innocent infringement in mitigation of damages on the grounds that the infringer did not realize that a copyright was claimed. A copyright notice on visually perceptible copies consists of the following:

© [year of first publication] [name of the copyright owner]

Note that the word “Copyright” or the abbreviation “COPR” are also both acceptable but in order to comply with requirements under what is known as the U.C.C. Convention, it is recommended that a “©” be used. It is also advisable to add the language “all rights reserved” at the end of the notice as that is still required in some Latin American countries. Where the work is a sound recording and the owner wishes to give notice of the copyrights in the sound recording, a “p in a circle” should be used.(24)

VII. MUSIC

Rights relating to music are being treated separately in these materials. This is because the law relating to some aspects of music is different and, also, because, as a result of industry practices, music rights are handled differently from rights in other works.

There are two separate sets of rights relating to every sound recording and/or audiovisual work involving music. First, there are rights in the underlying song or composition. These typically belong to the author – the songwriter or composer – and to their publisher. Second, there are rights in the sound recording itself. These typically belong to the record company.

1. Licenses of Rights in the Underlying Song

Before any discussion as to the rights of the author of a musical work, it must be determined who the author is. Generally, the author is the actual writer or co-writers. However, where the writer is employed by another or is an independent contractor, the work may be deemed a “work made for hire”, and the author, and owner of the copyright of the work, may be the employer or person who commissioned the work. See, the discussion regarding “OWNERSHIP” hereinabove.

With respect to songs that are released as singles, or as part of albums, most songwriters enter into agreements with publishers who pitch the song to record companies and performers and handle administrative matters for the writer. Most songwriters and composers are also affiliated with either the American Society of Composers, Authors and Publishers (“ASCAP”) or Broadcast Music, Inc. (“BMI”). These organizations license their catalogs of songs on a yearly basis to radio stations, television stations, restaurants, and other operations that publicly perform music. ASCAP and BMI then allocate and distribute the money (performance royalties) they receive based on the relative volume of use of the songs in their catalogs. The royalties are usually evenly divided between the publisher and the songwriter. However, where music is written as “works made for hire,” as is often the case for music for commercials or product jingles, the composer may not be entitled to ASCAP and/or BMI performance royalties.

In addition to performance royalties, songwriters may also receive what are called mechanical royalties. Mechanical royalties are based on the number of copies of the sound recording of the song distributed. After a recording of the song is released, other performers are permitted to record their versions of the song, provided they comply with the compulsory license provisions of Section 115(c) of the Copyright Act and pay the set royalty (currently 6.95 cents per song per copy of any recording sold). This set royalty is referred to as the “statutory rate”. See 37 CFR § 255.3(h). The rate is determined by ad hoc Arbitration Royalty Panels appointed and convened by the Library of Congress. Because the compulsory processes – such as the statutory provisions for accounting and notice provisions – are somewhat cumbersome, most record companies do their own negotiating of mechanical royalties for new recordings of previously released songs. The statutory rate is still used as a basis. The Harry Fox Agency in New York City administers the issuance of mechanical licenses and the receipts of royalties for many publishers of previously recorded songs.

Sometimes producers wish to include pre-existing music in their audiovisual work. For that purpose, the producer must acquire synchronization licenses for use of music embodied in their audiovisual work.(25) Synchronization licenses are generally negotiated with either the publisher or the Harry Fox Agency.

2. Rights in Sound Recordings

Rights in sound recordings are treated differently. Traditionally there have been no performance rights in sound recordings. Record companies owning copyrights in the sound recordings of songs on their records, earn income from the sale of the records and from the synchronization of those sound recordings for film, television, and other audiovisual uses. Thus, unlike the owner of the underlying song, record companies do not receive any performance royalties from ASCAP, BMI or anyone else, for radio airplay and other public performance uses of the recording.

It should be noted that in many other countries, especially in Europe, the owners of sound recordings do have performance rights in sound recordings. However, because the United States does not grant reciprocal rights, no royalties are collected for the performance rights for sound recordings owned by American companies when those songs are played, for example, on radio stations in countries that do recognize this right.(26)

There is one exception to the rule that U.S. law does not allow for the payment of performance royalties for performances of sound recordings. On November 1, 1995, President Clinton signed into law the Digital Performance Right in Sound Recordings Act of 1995 which provides for owners of sound recordings and recording artists to receive performance royalties for certain digital performances. This Act is discussed below under Internet related issues.

VIII. SPECIAL INTERNET ISSUES

A. Reproduction

Under Section 106(1), a copyright owner has exclusive right to “reproduce the copyrighted work … ” Whenever a computer program is used (or a web page is viewed) a copy is made on to the random access memory (“RAM”) of a computer. When copies are transmitted over the Internet, transitory copies are made throughout the transmission. Copying into RAM in conjunction with using a computer program has been held to be a violation of the exclusive rights of the copyright holder under Copyright Act Section 106(1).(27) The U.S. representative at the WIPO conference in December of 1996 urged amending the Berne Convention to explicitly provide that the making of transitory copies in connection with Internet transmissions would be an infringement. This proposal was successfully opposed by the telephone companies and Internet Service Providers (“ISP’s”) because they were concerned that it would create an additional source of liability. See, John Browning Africa 1 Hollywood 0 Wired Magazine, March 1997, at 61. Nevertheless, a statement was issued that: “the reproduction right … fully appl[ies] in the digital environment, and particularly to the use of digital works in digital form … [and] that the storage of a protected work in digital form in an electronic medium constitutes a reproduction.”(28)

Although no court has decided the issue at this time, it is not clear whether the making of transitory copies as part of Internet transmissions constitutes the sort of reproduction governed by §106(a) but the copying onto RAM in connection with viewing a copy is certainly an infringement.(29) Telephone companies and routers are probably not liable for their part in transmissions over the Internet which do involve the making of transitory copies.(30)

B. Performances

Because the licensing rights for copying and distribution of music are handled separately from the licensing of the rights of public performances, it is necessary to differentiate online copying and distribution from online performances. The writer knows of no cases on this issue to date. Several authors have asserted that where performances can be viewed in the process of downloading, there is probably a performance, and otherwise there is not.(31)

C. Criminal Liability

Until recently, Section 506(a) of the Copyright Act read:

Any person who infringes a copyright willfully and for purposes of commercial advantage or private financial gain shall be punished as provided in Section 2319 of Title 18. [Emphasis added]

Because of the requirement of “commercial advantage” or “private financial gain” it was recently held that individuals placing copyrighted materials on the Internet where users could make copies for free had not committed any crime. This leaves copyright owners vulnerable to actions by individuals who are not concerned about civil liability. Congress has remedied this situation by passage of the “No Electronic Theft” (“NET”) Act which was signed into law by President Clinton on December 16, 1997. The Act changes Section 506(a) to read:

Any person who infringes a copyright either willfully –

(1) For purposes of commercial advantage or private financial gain; or

(2) By the reproduction or distribution, including by electronic means, during any 180/day period, of one or more copies or phonorecords of one or more copyrighted works, which have a total retail value of more than $1,000 shall be punished …(32)

D. Liability of ISP’s and OSP’s

Section 230(c)(1) of the Telecommunications Act of 1996 states:

Treatment of publisher or speaker. — No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

This statute has been held to bar liability of an ISP or OSP for defamatory or obscene material posted by one of its customers.(33) This statutory limitation of liability for ISP’s and OSP’s has not, to date, been extended to copyright.

Two bills are now pending in Congress that would limit the liability of ISP’s and OSP’s for copyright infringement by adding a Section 512 to the Copyright Act.(34) In the meantime, ISP’s and OSP’s must rely on court decisions.

In Religious Technology Center, et al. v. Netcom On-Line Communication Services, Inc.,(35), the plaintiff held the copyrights in the Church of Scientology’s writings. A former member of the Church, Erlich, had placed Church of Scientology materials on a news group on the Internet through a bulletin board service connected to the internet through the national Internet service provider, Netcom. The plaintiff sued Netcom for its involvement in the claimed copyright infringement. Netcom moved for summary judgment. The court first decided that Netcom was not liable for direct infringement. Netcom had argued that Erlich, not Netcom, had actually placed the copies on the Netcom server. The court held that following the logic that Netcom had not actually made the copies and for policy reasons, Netcom would not be liable for direct infringement. The Court held that, unlike in Playboy Enterprises v. Frena,(36) Netcom was not liable for distribution or for publicly displaying the copies. In rejecting the argument that Netcom could be liable for direct infringement for distribution and public display, the court said in pertinent part:

No purpose would be served by holding liable those who had no ability to control the information to which the subscribers have access, even though they might be in some sense helping to achieve the Internet’s automatic “public distribution” and the users’ “public” display of files.

The court next dealt with the plaintiff’s contributory infringement claim against Netcom. The court said in pertinent part:

[Contributory] infringement will be established where the Defendant “with knowledge of the infringing activity,” induces, causes or materially contributes to the infringing conduct of another.

The court held that there was a fact question about whether Netcom, after receiving notice, should have known that the copies that Erlich was posting were infringing. It stated that:

[w]here a DBS operator cannot reasonably verify a claim of infringement, either because of a possible fair use defense, the lack of copyright notices on the copies, or the copyright holder’s failure to provide the necessary documentation to show that there is a likely infringement, the operator’s lack of knowledge will be found reasonable and there will be no liability for contributory infringement for allowing the continued distribution of the work on its system.

Finally, the court rejected the contention that Netcom was vicariously liable which requires:

[that] the Defendant:

(1) Has the right and ability to control the infringer’s acts; and

(2) Receives a direct financial benefit from the infringement.

The Court found that there was no direct financial benefit because Netcom received the same monthly sum regardless of whether Netcom did or didn’t post the material.

E. Framing

“Framing” is discussed in the segment of these materials relating to unfair competition. Although the writer knows of no case on point, it is likely that a court would hold that framing constitutes a derivative work.

F. Music Issues

On November 1, 1995, President Clinton signed the Digital Performance Right In Sound Recordings Act of 1995 into law. This act is codified in Sections 106(6), 114, 115(c)(3) and 115(d) of the Copyright Act. This new addition to the Copyright Act provides a performance right in sound recordings when the sound recordings are transmitted over a service that is either interactive (the customer can choose the song they wish to hear) or where the sender is charging a subscription fee. There is a provision for compulsory (referred to in the statute as “statutory”) licensing where the sender is charging a fee with the exception that the statutory licensing set up does not apply in certain situations where members of Congress felt that a service would in fact be providing copies, rather than performances, of the sound recordings.(37) Where the service is interactive (the customer can choose which song they wish to download) or in the other situations described in Endnote 37 below, the sender is required to negotiate a license with the owner of the sound recording, but may follow a compulsory procedure to pay a set rate for a mechanical license for the underlying compositions.

Other than for subscription and interactive services, there is no performance license required, even on the Internet, for sound recordings. However, licenses are almost always necessary when a musical work and sound recordings, not owned by the web site owner, are used. Examples are:

(1) It may be necessary for the web site developer/manager to copy musical works and sound recordings onto the server (they may not be playable directly from a purchased copy) in which case a reproduction license for the underlying work and sound recording would be required;

(2) Viewers of the web site may copy, or be capable of copying, the musical work and the sound recording onto their own computer which would also require a reproduction license (since Real Audio and Real Player do not allow for a viewer to make copies of a recording of an audiovisual work, the writer does not believe a reproduction license would be necessary to cover those transmissions);

(3) If the music is performed as the web site is being downloaded, a performance right for the underlying musical work would be required;

(4) If a sound recording of a musical work is being synchronized with an audiovisual work, a synchronization license (a form of the right to make derivative works) would be required for both the musical work and the sound recording.(38)

ENDNOTES

1 Chapter 9 of Title 17 provides protection relating to the design of semi-conductors. Chapter 11 prohibits the unauthorized recording of live musical performances.

2 See 17 U.S.C.A. §301.

3 http://www.wipo.org/.

4 Nimmer on Copyright §1.10 [B] [2].

5 Nimmer, at §2.18[J]. See also, Kearn River Gas Transmission Co. v. Coastal Corp., 899 F.2d 1458, 1464 (5th Cir.), cert. denied 498 U.S. 952 (1990).

6 Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc., 797 F.2d 1222 (3rd Cir. 1986).

7 See, Sid and Marty Krofft Television Productions v. McDonald’s Corp., 562 F.2d 1152 (9th Cir. 1977).

8 See, generally, Scott On Computer Law, Second Edition, Section 3.47(C)(1).

9 982F.2d 693 (2d Cir. 1992).

10 489 F.3rd 807 (1st Cir. 1995). See also, Softel, Inc. v. Dragon Medical & Scientific Communications, Inc., 118 F.3rd 955 (2nd Cir. 1997).

11 116 S.Ct. 804 (1996).

12 See the paper by Bill Marvin on Patent Law included with these materials.

13 See, 53 Fed. Reg. 21817 (June 10, 1988).

14 See, e.g., 17 U.S.C. § 103.

15 499 U.S. 340 (1991).

16 See, also, Bell South Advertising & Publishing Corp. v. Donnelley Information Publishing, Inc., 999 F.2d 1436 (11th Cir.1993); and Warren Publishing, Inc. v. Microdos Data Corp., 115 F.3rd 1509 (11th Cir. 1997).

17 1997 W.L. 266972 (S.D. N.Y. May 19, 1997).

18 616 F. Supp. 1571 (D.Minn. 1985) affirmed 799 F.2d 1219 (8th Cir. 1986).

19 John Browning, Africa 1 Hollywood 0, Wired Magazine March 1997 at 61 (www.wired.com/5.03/).

20 §201(a) and (b) of the Copyright Act.

21 See, §204 of the Copyright Act.

22 See, e.g., Community For Creative Non-Violence v. Reid, 490 U.S. 730 (1989) (holding that the employer of an artist as an independent contractor to create a sculptural work did not own the copyrights in the sculptural work after paying for it).

23 See generally, § 412 of the Copyright Act.

24 Copyright Act §§ 401 and 402.

25 Sometimes performance licenses are also required. ASCAP and BMI do not cover every type of performance – for example, they do not grant performance licenses to, or collect payments from, movie theaters.

26 Howard Siegle & Paul Karl Lukacs, A Mega-Million Dollar Musical Mea Culpa, Are U.S. Record Companies Overlooking A Fortune In International Public Performance Royalties?, 15 Ent. & Sports Law., Vol. 15., No. 303, Fall 1997.

27 Mai Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993).

28 Meca Jung and Stephen D. Rosenboro, The WIPO Treaties, The International Battle Over Copyright Cyberturf, 15 Ent. & Sports Law., Vol. 15, No. 3, Fall 1997.

29 Mai Systems Corp. v. Peak Computer, Inc., supra. Note 27.

30 See, e.g., Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995) (holding that an ISP wouldn’t be directly liable for material placed on its server because it would not be reasonable to hold ISP’s liable and because ISP’s are not actually the ones making the copies).

31 Jeffrey P. Cunard, et al. Internet & Online Law, Section 6.08(4) (Kent B. Stuckey, ed., 1997).

32 See the information posted regarding H.R. 2265 at http://thomas.loc.gov.

33 See, e.g., Zeran v. American Online, Inc., 958 F.Supp. 1124 (E.D. Va. 1997), aff’d 129 F.3d 327 (4th Cir. 1997).

34 See, generally, H.R. 2180 and S. 1146, http://thomas.loc.gov/

35 907 F.Supp. 1361 (N.D. Cal. 1995).

36 839 F.Supp. 1552 (N.D. Fla. 1993).

37 The owner of the sound recordings is not required to provide a statutory license both where the license is interactive and in other situations where the drafters of the legislation felt that such transmittal could substitute for purchases of copies of the sound recordings such as situations where more than four (4) selections by the same artist are played in any three-hour period, more than three selections in total from any one sound recording are played in any three-hour period, and where a list of the sound recordings to be transmitted is being provided in advance.

38 For an in-depth analysis relating to incorporating music into a web site, see, Al Kohn and Bob Kohn, Kohn on Music Licensing, 1236 – 1250 (1996).

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

© 1998, Rob Hassett, Atlanta, Georgia. All Right Reserved.

 

Will Internet Radio Stations That Stream Music Have to Shut Down?

First Published in the Atlanta Lawyer March 2009

by Rob Hassett

Introduction
Creative and adventurous entrepreneurs, who could never afford to buy a broadcast radio station, have set up many internet radio stations that stream music and offer features that could only be made available over the internet. www.live365.com allows you to find stations that play almost  any type of music imaginable. Yahoo’s Launchcast, (http://music.-yahoo.com/launchcast/), now  managed by CBS Radio, (http://yahoo.client.shareholder.com/) and Pandora, (http://www.pandora.com/) allow you to type in names of favorite artists or songs and will then play songs, based upon those choices. With Pandora you can set up as many “channels” as you want, with each based on a different artist or set of artists (i.e. with each song by the artist selected or an artist with a similar sound). Although Congress has passed laws to promote experimentation, growth and development on the internet by limiting liability exposure of the owners of commercial websites, Congress has also  passed laws that have put internet radio, and all that it offers, on the verge of extinction.

Background
In the United States, songwriters (and publishers for songwriters) have traditionally received “public performance” royalties when their songs were played on broadcast radio and in other public forums. Royalties for songs are collected by ASCAP, BMI and SESAC and, for internet radio, total royalties have been in the range of 3.5 – 5% of gross income derived from the broadcast of the music. Owners of the copyrights in sound recordings have traditionally received  no royalties for public performances in the United States. This continued to be the case until enactment of the Digital Performance Right in Sound Recordings Act of 1995. This Act provided that copyright owners of sound recordings would have a public performance right in  audio recordings that were transmitted by a station requiring a subscription, such as satellite radio, and in any digital transmission that was “interactive.”  In 1998, the Digital Millennium Copyright Act was enacted, which, among other things, included provisions, codified in 17 USC § 106(6) and §114, that expanded performing rights of  the owners of sound recordings to include sound recordings transmitted digitally over the internet (i.e. via internet radio). In connection with this right, Congress also provided for a set  (“statutory”) royalty rate to be established for non-interactive internet radio stations that met  certain other criteria. If not decided by negotiation among stakeholders, it provided that the royalty rate would be determined by an ad hoc Copyright Arbitration Royalty Panel.  The statutory rates would only apply if the webcast was not “interactive” and other criteria were met, such as, limiting notice of when songs would be played, to make it unlikely that webcast streaming would become a substitute for music downloads.

2 Problems
There were two problems with Congress’ approach. First, to benefit from a set royalty rate (which would be better for each station than having to negotiate separately with each record label), the station could not be “interactive.” Unfortunately, Congress defined “interactive” broadly and ambiguously so many stations do not know whether they are interactive or not.  Second, Congress’ wording of the standard the arbitrators were to use for determining the statutory rates encouraged the arbitrators to impose unreasonably high royalties.

Determining Whether a Station Is Interactive
The definition of “interactive” set forth in the Digital Millennium Copyright Act reads, in pertinent part, as follows:

An “interactive service” is one that enables a member of the public to receive a transmission of a program specially created for the recipient, or on request, a transmission of a particular sound recording, whether or not as part of a program, which is selected by or on behalf of the recipient.  17 USC § 114(j)(7).

The phrase “a program specially created for the recipient” is ambiguous. As referred to in the above Introduction, using advanced techniques, some of the most popular internet radio stations utilize input from the listener to create a “personalized station.” So does that result in programs that are “specially created for the listener”?

In 2001, Sony BMG, and other record labels, filed a lawsuit against Launchcast internet radio for copyright infringement, claiming Launchcast was an “interactive” radio station and had no right to stream music under the statutory license granted to non-interactive radio stations. On November 3, 2005, the United States District Court for the Southern District of New York held that whether or not Launchcast was “interactive” was a jury question. Arista Records, Inc. v.  Launch Media, Inc., 2005 WL 2898735 (S.D.N.Y.), and on April 27, 2007, a jury found that Launchcast was not interactive. Sony BMG said it would appeal. As of this writing, the author has not seen any order relating to the appeal of that decision.

Statutory (Set) Rates
For reasons that are likely related to which groups had the more effective lobbyists, the standard for determining statutory rates as provided for in the acts referred to above, was made much more favorable to existing satellite radio, than to webcasters. The Digital Performance Right in Sound Recordings Act of 1995, in a provision codified at 17 USC § 801(b), directed ad hoc Copyright Arbitration Panels to set royalty rates for pre-existing satellite radio that are reasonable and are calculated to maximize the availability of creative works to the public, to afford the copyright owner a fair return on his or her investment and the copyright user a fair income, to consider the contributions and risks taken by each party and to minimize any disruptive impact on the industries involved. The Digital Millennium Copyright Act, in a provision codified at 17 USC §§ 114(f) (2) (A), directed the Copyright Arbitration Royalty Panels to set royalty rates for webcasters (as well as others including new, i.e. not  preexisting, satellite radio stations) “that would have been negotiated between a willing buyer and a willing seller.” No language indicated that the Panels should be concerned about maximizing the availability of creative works or the disruptive impact on internet radio.  As a result, in 2002, royalties for internet radio were set at an amount that would put many internet radio stations, already earning little if any money, out of business. Webcasters appealed the decision to the D.C. Circuit Court of Appeals. The D.C. Circuit Court of Appeals affirmed the decision. See, Beethoven.com LLC v. Library of Congress, 394 F.3d 939 (D.C. Cir. 2005); and See generally, Melville B. Nimmer and David Nimmer, Nimmer on Copyright 8-352.  (Rel.61-8/2003).  In 2002, partly because of concerns over the adverse effects of the high rates, Congress passed  the Small Webcaster Settlement Act of 2002. The new Act led to an agreement among the participating stake holders of an alternative rate equal to 5% of expenses or 8% of gross revenues, depending on which is greater, through 2002 for “small webcasters,” with increases scheduled for 2003 and 2004. See, Nimmer on Copyright, 8-352.12 (Rel.61-8/2003).

Current Royalties for Webcasting
On March 7, 2007, the Copyright Royalty Judges, who had replaced the ad hoc Copyright  Arbitration Panels and are sometimes referred to as the Copyright Royalty Board, set the rates for webcasting beginning at .08 cents per performance for 2006 with yearly increases reaching  .19 cents per performance for 2010, with a minimum fee of $500 per channel per year. The $500 per channel fee could be interpreted to require the payment of much more than the rates per song for stations like Pandora, that permit each user to set up multiple “stations.” Daniel McSwain, Radio and Internet Newsletter, “CRB Coverage,” March 2, 2008.  http://textpattern.kurthanson.com/crb/58/webcast-royalty-rate-decision-announced; See also, “free103point9 Newsroom,” tp://blog.free103point-9.org/labels/internet%20radio.html. On  April 17, 2007, the Copyright Royalty Board rejected an appeal. David DeJean, Information Week, April 17, 2007. “Copyright Royalty Board Puts Internet Radio On Death Watch,”  http://www.informationweek.com/blog/main/archives/2007/04/copyright_royal.html; See also,  “free103point9 Newsroom”, http://blog.free103point9.org/labels/internet%20radio.html.

In contrast, based on the differences in the statutory formulas for setting royalties for webcasters versus pre-existing satellite radio, in 2006, the Copyright Royalty Judges set royalty rates for  pre-existing satellite radio that were much more favorable to the owners of the radio stations, resulting in fees of anywhere between 6.0% to 8.0% of gross income. Most internet radio stations would much prefer having their royalties based on their revenue rather than on the number of times songs are played.
An appeal from the order setting the rates for webcasters was filed in the US Court of Appeals for the District of Columbia. No court decision has been published to date. David Oxenford, Broadcast Law Blog, http://www.broadcastlaw-g.com/archives/internet-radio-nab-joins-thefray-on-internet-radio-appeals-and-a-request-for-stay-are-filed-and-a-settlement-offer-is-madeto-noncommercial-webcasters.html; See also, “free103point9 Newsroom”  http://blog.free103point9.org/labels/internet%20radio.html.

Finally, on October 1, 2008, Congress enacted the Webcaster Settlement Act that permits the 4 webcasters and SoundExchange (the collecting agency for the record labels and performers) to negotiate rates lower than the statutory rates, which helps only to the extent the record labels recognize that internet radio can promote the sale of records and be another source of revenue.

Conclusion
The law relating to internet radio is still evolving, but up to now fails to support internet radio as it has other web based businesses. The royalty payments required for internet radio have been set at levels so high that they could cause many popular webcasters to shut down. As Congress did with pre-existing satellite radio, to “unleash the power of the internet,” with respect to internet radio, Congress should set standards for maximum royalties that do not exceed 8% of a radio station’s gross income.

Rob Hassett is an attorney with Casey Gilson P.C. in Atlanta and focuses on technology, entertainment and corporate law.

Spam Laws and Entertainment

By Rob Hassett

Casey Gilson P.C.

Six Concourse Parkway, Suite 2200

Atlanta, Georgia 30328

(770) 512-0300, ext. 557

rob@internetlegal.com

Law Firm Website:  www.caseygilson.com

Personal Website:  http://www.internetlegal.com/

Posted: May 8, 2006

* Mr. Hassett is a co-author of Volume 5 (which volume is entitled Internet and Interactive Media) of the 10 volume treatise entitled Entertainment Industry Contracts which is published by Lexis Nexus.  This article is adapted from Chapter 109Q of Volume 5 of that treatise.

109Q.01   Background

One of the goals of any entertainment oriented website is to encourage individuals to view the site.  Websites generally earn income by selling products or services, charging for subscriptions or advertising.  No matter what approach is used, the more “eyeballs” the better.  Therefore, one of, if not the primary, goal of any entertainment website is to attract viewers.

One way to attract viewers is by sending promotional emails to customers and potential customers.  However, if the email is unsolicited, or, even if consented to, if the recipient believes it is unsolicited or if the recipient otherwise does not want it, the sender risks serious adverse consequences which may include:

(1)       Alienation of customers and potential customers irritated by the email;

(2)       Blocking of all email from the sender either by the recipient or by the recipient’s use of certain types of software and services that block out all email from a sender’s address; and

(3)       Violating applicable law including incurring substantial civil and/or even criminal penalties.

109Q.02         Alienation of Customers and Potential Customers

Most recipients of spam hate receiving it and a significant percentage of recipients of email will in effect “boycott” any vendor that sends them unsolicited email.  Unfortunately, many spammers will weigh this fact against the fact that a significant portion of the population (according to some reports, as high as eight (8%) percent) will, on at least some occasions, purchase products or services in which they are interested from a vendor they learn about from spam.  Still, the likely alienation of customers and potential customers should be enough, without more, to dissuade most owners of entertainment websites from trying to attract viewers by using unsolicited email.

109Q.03         Blocking of Emails

Email recipients can take steps to block a substantial percentage of email sent to them by spammers.  One option, available to most recipients of email, is to intentionally block all email from a particular email address or from an entire domain.  There are two (2) major drawbacks to this approach.  First, many times the spammers use the return email addresses of other innocent parties. This practice, called spoofing, is illegal and even criminal, but does make it impossible for any recipient to be sure that they are blocking email from the address of the spammer as opposed to the address of an innocent third party.  Second, this approach is reactive, as opposed to proactive, in that the recipient must first receive the unwanted email before being able to block future email from that same address.

There are also software programs, such as the “SafetyBar” software available at http://www.spamnet.com/, that are community based and use algorithms to redirect email received that purportedly constitutes spam into a spam folder.  Such software does not rely on the purported return address to determine whether an email is spam.  Instead the software blocks emails based on whether a certain number of its over 1 million users report that they have seen the email and that it is spam.  If the email is confirmed as spam, then it is sent to the spam folders of all users of the software (the users can always view the software and elect to receive email from that source).  Then, using proprietary algorithms, emails from the same source, which, as addressed above, may not be the same as the purported return address on the email, are also blocked.

Additionally, many business users run all of their email through outside spam and virus blocking services such as the service available from AppRiver at http://www.appriver.com/ and Postini at http://www.postini.com/.  With these services the user routes all email to a particular domain through the spam and virus blocking service of the third party provider.  The advantage of these third party services is that the email is blocked before it ever reaches the user’s computer and so the services are much better for users who also view their email with BlackBerries, cell phones and other wireless devices.  Products like SafetyBar work only on the computer on which the software resides and so are no help for blocking spam to BlackBerries and similar devices.

The problem for the owner of a website is that if the owner sends out mass emails not wanted by the recipients, with widespread use of the above described software and/or services, all emails from that owner may be blocked.  In that situation a customer who, by signing up, is supposed to receive  an email,  may never receive it and, if they do not check to see what is blocked, may never know they did not receive it.

109Q.04         Anti-Spam Laws

Prior to January 1, 2004 there was no federal law prohibiting spam.  However, 29 states had enacted laws prohibiting unsolicited email.  There was variation among these statutes.  The most restrictive statutes were Delaware’s (prohibited all unsolicited bulk commercial email) and California’s (prohibited all unsolicited commercial email).  Other states included one or more of the following four prohibitions on commercial and/or bulk email:

(1)       Must not include false or missing routing information, misleading subject line and/or use another’s domain name;

(2)       Must not include sexually explicit material;

(3)       Must include “ADV” or “ADV ADLT” (or similar, but differing) language in the subject line (generally at the beginning); and/or

(4)       Must include an easy method to opt out from future emails.

One question many lawyers had was whether the Delaware and California laws were constitutional.  If constitutional, the law in these states would legally prohibit most unsolicited commercial email.  With respect to commercial speech that concerns lawful activity and is not misleading, the test of constitutionality is:

(1)       Is there a substantial governmental interest;

(2)       Does the law directly advance that governmental interest; and

(3)       Is there a reasonable fit between the purpose of the restriction and the scope of the restriction?

The Delaware and California statutes did meet the first two tests.  There is a substantial governmental interest in reducing unsolicited commercial email in that there is now so much of it that it slows down the Internet and most people hate receiving it.  A prohibition on unsolicited commercial email advances that interest since, if spammers are prohibited from sending unsolicited commercial email to Delaware and California, their citizens would, at least theoretically, not receive any.

The interesting question is whether or not the third test is met.  Is there a reasonable relation between the objective being achieved and the scope of the restriction?  There are certain other, less drastic, ways to reduce unsolicited commercial email such as requiring “ADV” in the subject line.  With “ADV” in the subject line any individual or ISP could screen out the email.  Proponents of the Delaware law would probably argue that the constitutionality of the Delaware law is supported by the cases holding that the federal anti-fax statute, which prohibits all unsolicited faxes, is constitutional.  However, there is no way for individual fax machine owners to screen out unwanted faxes while there is a way to screen out unsolicited commercial bulk email other than to bar all of it.

In any event the state laws only applied to unsolicited “commercial” email.  The reason is that under the “free speech” clause of the First Amendment to the U.S. Constitution any restriction of non-commercial speech must be narrowly tailored (in other words there is less room to go beyond what is necessary to advance the interest of concern).  So sending out a bulk email that contains primarily informative, literary or artistic content, even if it also contains a promotional or advertising element, would seemingly not have been barred under any state law.

All of the state statutes of which the author is aware defined “unsolicited” as having no pre-existing relationship.  So if there was a pre-existing relationship, these statutes would not apply.

Until January of 2004, there was no federal law expressly prohibiting spam.  Probably partially due to lobbying by bulk emailers who were operating in the United States and believed themselves to be vulnerable to lawsuits based on state anti-spam laws at the end of 2003 Congress enacted a federal anti-spam law that became effective as of January 1, 2004.  The bulk emailers who lobbied for passage probably preferred one anti-spam law that applied across the country and allowed mass emailings provided certain requirements were met as opposed to a large number of different, sometimes contradictory, laws that in a few states completely prohibited mass commercial emailings.  The Act is entitled:  “The Controlling the Assault of Non-Solicited Pornography and Marketing Act” and is referred to as the “CAN-SPAM Act of 2003.”  Most  sections of the Act are codified at 15 USC 7701 et. seq.  Important features of the CAN-SPAM Act include:

(1)       It only applies to “commercial electronic mail.”  “Commercial electronic mail” is defined as “electronic mail . . . the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose).”  The Federal Trade Commission was assigned the task of enacting regulations for determining “the primary purpose of an electronic mail message.”  One reason the Act was written to apply only to “commercial email” was to reduce the likelihood of a court finding that the Act violates the free speech clause of the first amendment.  The term “commercial email” is ambiguous.  However, an email newsletter with primarily informative or entertainment content concerning computers, the Internet, news, sports,  political or other matters sent out by an entity that promotes nothing or includes ads and/or solicitations which are placed deep in the newsletter and from multiple sources would not, in the opinion of the author, be within the scope of the CAN-SPAM Act.  On the other hand, an email from an entertainment website inviting recipients to try out the site would certainly be within the scope.  Whether an emailed newsletter from a business, such as a law firm, that provides goods and services but does not distribute, in either a printed or electronic format, publications as its main business is within the scope of the CAN-SPAM Act can be a close question.  The author believes that if the newsletter consisted primarily of informative material, it would not be considered “commercial” and therefore not subject to the requirements of the Act.

(2)       The Act “supersedes any statute, regulation or rule of a State or political subdivision of a State that … regulates or restricts the use of electronic mail to send commercial messages, except to the extent that such statute, regulation, or rule prohibits falsity or deception [or laws that are not specifically focused on electronic mail such as state trespass, contract or tort law or state laws that relate to acts of fraud or computer crime].”

(3)       The law does not prohibit the sending of commercial email messages, but instead prohibits certain activities in conjunction with sending out such electronic mail.

(4)       Unlike the state laws, although an exemption may be introduced by regulation, the Federal law does not exempt email just because there is a prior relationship between the parties except that it does provide an exception from requirements not related to deception as to the source of the email to the extent the email is a follow-up to a previous transaction such as related to warranty rights.  It is important to note that this exemption does not, by definition, apply if the email contains advertising or a solicitation.

(5)       Unlike as was the case under state law, obtaining a consent only exempts a spammer from being required to clearly and conspicuously indicate that a commercial email is an advertisement or solicitation (See “7(g)” below).  The state law prohibitions only applied to email that was “unsolicited.”

(6)       The following constitute criminal violations:

(a)      Assessing a computer without authorization and sending out multiple commercial email messages from such computer (some of the worst spammers have been using computers of unaware consumers with fixed connections to the Internet such as over cable modems or DSL to send out their commercial email);

(b)      Deceiving recipients of email as to the source of the email message (this would cover one of the most insidious, but common, practices whereby spammers “spoof” the email domain name of an unknowing website owner misleading all email recipients into believing that that innocent website owner sent the spam thereby harming the reputation of the website owner).

(7)       The following constitute civil violations:

(a)       The above criminal violations can also be the basis for civil claims;

(b)       Inclusion of deceptive subject headings;

(c)        Failure to include a functioning return electronic mail address;

(d)       Failing to clearly provide an opportunity to decline further communications via email;

(e)       Continuing to send email ten (10) days after being requested to stop;

(f)         Failing to provide a valid physical postal address of the sender; and

(g)  Failing to clearly and conspicuously indicate that the message is an advertisement or solicitation.

(8)       Any sexually oriented email must contain a warning in the subject heading.

(9)       The prohibitions apply to any person that “initiates” a commercial electronic mail message which includes both originating or transmitting the message and procuring the origination or transmission of the message.  So a website owner that hires a bulk emailer to send out the emails can be liable for all the above violations.

(10)     A supplier of products or services to an affiliate (an entity in which the supplier holds a greater than 50% controlling or economic interest) or to an unrelated third party when the supplier has actual knowledge of a violation is required to take reasonable actions to prevent the transmission of or detect and report to the Federal Trade Commission the sending of commercial email with misleading information in the header of the email regarding the sender of the email.

(11)     Enforcement of criminal penalties is handled by the United States Department of Justice.  The right to enforce civil penalties is vested in the Federal Trade Commission except for bulk emailers which are regulated by specific agencies such as member banks of the Federal Reserve System, brokers and dealers under the Securities & Exchange Commission and insurance companies under state insurance commissioners, with respect to which enforcement of civil penalties is vested in such other agencies.  There are no private rights of action.  Attorney Generals of various states can file actions on behalf of the citizens of those states.  For certain violations, application service providers may file actions to recover damages to them.

(12)     Penalties and liabilities include:

(a)       For a criminal violation – fines up to $500,000 for organizations and $250,000 for individuals and imprisonment for up to 5 years and forfeiture of all gross proceeds obtained as a result of the offense and of any equipment, and/or software used to commit or facilitate the offense;

(b)       For a civil violation –

(i)         If subject to enforcement by specific agencies such as the Securities & Exchange Commission, penalties are set by the statute specific to regulation of those agencies; otherwise, penalties are set under the Federal Trade Commission Act and include penalties of up to $11,000 per violation.

(ii)        Enforcement by states – the attorney general of any state may file a civil action on behalf of residents of the state denominated as an action “as parens patriae” – the courts are unclear as to whether that money is kept by the state or provided to the citizens –  equal to the greater of $250 per email to each recipient in the state or the amount of actual damages proved.  The court may triple the award and also award attorney fees.

(c)        Internet Access Services – have the right to file actions to enjoin actual losses and collect up to $100 per email per recipient.

The FTC reports on its website (www.ftc.gov/spam) that it has already filed actions for violations of the Anti-Spam Act, although the descriptions of cases on the website indicate that the initial actions are against spammers that are involved in some sort of deception as opposed to other types of violations such as failures to indicate that the spam is an advertisement or promotion.

Various state cases have held that the sending of large volumes of unsolicited email to the customers of particular internet service providers, after being notified not to do that, can constitute trespass under state law because of the damage to the computers of the internet service providers.

For additional information about anti-spam laws see Professor David Sorkin’s excellent website at http://www.spamlaws.com/ and the Federal Trade Commission’s website concerning its anti-spam activities at www.ftc.gov/spam.

109Q.05         Foreign Anti-Spam Laws

Although beyond the scope of this Chapter, the sending of promotional email to residents of many countries outside the United States, including countries that are members of the European Union and Canada, is restricted by the laws of those countries.

109Q.06         Conclusions

To avoid alienating customers, being added to numerous block lists and violating applicable law, choices for website owners are:

(1)       Not to use email to promote the website;

(2)       Send email only to visitors to the website that have consented to the sending of email to them, or have otherwise consented to receiving email at seminars, trade shows and the like, not to exceed the scope of such consents and comply with the provisions of the CAN-SPAM Act that apply even when a consent has been obtained; or

(3)       Include an ad in established well-received email publications such as emails sent daily by the New York Times, the emails sent weekly by email services such as the Leebow Letter published by 300incredible.com (see http://www.300incredible.com/), or the CNET newsletter available at (http://www.seenet.com/).

Because of the uncertainty about what constitutes “commercial electronic mail” the undersigned is currently cautioning clients against sending “educational” emails that are apparently sent for the purpose of drawing potential customers to a website except in strict compliance with the CAN-SPAM Act.  Although a very strong argument can be made that if informative and where directly promotional material is only a minor part of such emails and placed toward the end, such emails are not covered by the CAN-SPAM Act, unless and until it is made clear by applicable regulations or case decisions that such emails are not covered, the potential exposure is too great to justify sending those materials out except in compliance.  Additionally, no matter how valuable the newsletters may be, many recipients will block further emails from such address which could interfere with later communications.

Even if the bulk email your client is planning to send out is in compliance with federal law, it is also necessary for your client to comply with the terms of use of its own internet service provider.    Also, if the volume of email being sent out is sufficiently large, your client may receive a notice to stop sending to customers of a particular ISP and, if not stopped, there are cases that would indicate that action could be considered trespass.

© 2006 LexisNexis and Rob Hassett, All rights reserved.

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.