Costco Wholesale Corp. v. Omega S.A.: The Beginning of Gray Market Confusion and the End of First Sale Doctrine Protection for Retailers and Consumers

By Greer Benge *

Costco Wholesale trademarkOn December 13, 2010, the Supreme Court issued its decision in its de novo review of the Copyright Act’s impact on foreign-made goods and the first sale doctrine in Costco Wholesale Corp. v. Omega S.A. [hereinafter Costco v. Omega]. With Elena Kagan recusing herself, the Court’s 4-4 decision preserved the Ninth Circuit’s decision in favor of Omega.  Due to the rare split, no precedential value attached to the Court’s ruling, leaving in place the rejection of the first sale doctrine within the Ninth Circuit for foreign manufactured goods without affecting the interpretations of the doctrine in other circuits.  So, if you find yourself in California in the near future, you may want to hold off on purchasing that discounted digital camera from a price-savings club.  What appears to be an innocuous purchase may well be in contravention of the Ninth Circuit’s interpretation of the so-called “gray market:” if the camera has been manufactured in a foreign jurisdiction, it may potentially violate copyright infringement statutes designed to prevent the alienability of goods in secondary markets.

“Gray-market” goods are authentic products under a brand name protected by a trademark or copyright.  Typically, these products are manufactured abroad, then purchased and imported into the United States by third parties, bypassing authorized U.S. distribution channels.  As a result, retailers are able to offer gray-market goods to consumers at a discount due to the international discrepancies in the manufacturers’ pricing systems. Continue reading »

3-Dimensional to 3-Disruptive

By Dana Mullen *

The Penrose triangleMost people can grasp the concept that scanning a copyright protected drawing to make copies is a clear violation of copyright law.  Consider, on the other hand, a scenario made possible by the technology of 3D printing, an additive process which deposits material layer by layer until a three dimensional model is formed.  The Penrose triangle originated as a two dimensional drawing, creating the illusion of a three dimensional object.  However, it is an impossible object from which no true three dimensional replica can be formed.

Nonetheless, Netherlands-based designer Ulrich Schwanitz recently was successful in printing a three dimensional model of the illusion.  Schwanitz did not share his design secret but, rather, offered the “impossible triangle” for sale through the fabrication company Shapeways for $70 each.  Within weeks, 3D modeler Arture Tchoukanov had recreated the shape and uploaded instructions to the website Thingiverse.  Schwanitz demanded that the instructions infringed on his copyright and should be taken down.  But what exactly could Schwanitz assert copyright in: the design file, the image, or even the printed structure?  Could artists who used the triangle in previous pieces have a claim against Schwanitz?  The answers may depend on how U.S. copyright law defines limitations on exclusive rights and the applicability of the fair use doctrine, which includes factors such as the purpose and character of use, the nature of the copyrighted work, the effect of use upon market value, etc. Continue reading »

Up in the Air: Amazon Launches Cloud Player without Licenses

By Lisa Peterson *

amazon cloud driveThe story of David and Goliath is a well-known, time-honored tale.  But what about the story of Goliath versus Goliath?  This is exactly the type of legal battle brewing between and the “Big 4” music labels – Universal Music Group, Sony Music Entertainment, Warner Music Group, and EMI.

In March of this year, Amazon sent vibrations across the digital music world when it launched its Amazon Cloud Drive service – without having first obtained music licenses.  The Big 4, believing Amazon is illegally retransmitting copyrighted content without their permission, are incensed; Amazon, however, does not believe licenses are necessary to maintain its Cloud service and so it proceeded without them.  Amazon Cloud Drive is akin to a personalized online “locker” which allows users to upload their files, namely digital music, to the Cloud on Amazon’s website.  The user is then able to remotely access any file in the Cloud from other computers or devices, including Android phones and the iPad.  The main draw of Amazon Cloud is that it enables users to listen to their music wherever they go – without lugging around an external hard drive, or purchasing duplicate music files. Continue reading »

Mardi Gras “Indian” Suits: Fit for Copyright Protection?

By Rachel Waters *

Mardi Gras Indian“Look at my King all dressed in red.  Iko, Iko, unday.”  So goes a chant familiar to New Orleanians acquainted with the city’s tradition of Mardi Gras “Indians.”  To outsiders, Mardi Gras is often associated with debauchery and an air of lawlessness.  Mardi Gras Indians, however, are part of the holiday’s deep, surprisingly family-friendly, cultural foundation.

Recognized for their intricate costumes of feathers, beads, and other decorations, “Indians” often spend the entire year crafting their designs.  Each handmade “suit,” as they are called by locals, can cost thousands of dollars to make.  Although these Indians are considered a New Orleans treasure, they are not compensated or financially supported by the city – and they do not expect to be. On the other hand, the photographers who capture, and sell, rare sightings of these New Orleans cultural icons profit from what the Indians view as a relatively small effort. Continue reading »

Can YouTube’s Copyright School Save it from New Copyright Laws?

By: Jon Gasior *

Viacom vs. YouTubeWe have all been there, heard our friends talk about the latest YouTube hit, found the nearest computer only to find that video had been removed.  The accessibility of YouTube has made it an internet phenomenon.  Users can upload content with anything from videos of cats to television clips or anything in the middle.  However, this accessibility has also caused YouTube a great deal of trouble.  With over 20 hours of video uploaded to the site each minute, it is nearly impossible for YouTube to ensure that all of the material uploaded complies with U.S. copyright laws.  In the past, YouTube would simply ban a user after three copyright protected uploads, but that has since changed.  YouTube users are now required to attend YouTube Copyright School.  Copyright school was not instituted by YouTube simply because Google (who owns YouTube) executives were taking a proactive approach, not just to protect those who may suffer in lost royalties from illegal uploads, but to protect themselves. Continue reading »

Staggering Damages in LimeWire Case Translate “Peer-to-Peer” to “Fear-to-Peer”

By Matthew McClellan *

limes being squeezedRecently, another digital music storehouse, LimeWire, reached an agreement to shell out a large sum of money in the amount of $105 million after being found liable for copyright infringement.  The popular online file sharing service, as of 2009, had nearly 50 million subscribers who were able to exchange, trade, and share various content in their libraries, including music and movies, via LimeWire’s peer-to-peer network (p-2-p).  Although some content exchanged may have been works in the public domain, others were copyrighted works traded without permission from copyright holders, something that major record labels and music trade group R.I.A.A. (the Recording Industry Association of America) were not pleased about.  The R.I.A.A., composed of music industry executives and recording artists, seeks to support and promote “the creative and financial vitality of the major music companies.”  Therefore, in carrying out these objectives, the R.I.A.A. has been on the frontlines with record labels in their fight against piracy, taking on companies such as LimeWire. Continue reading »

Righthaven: The Country’s First “Copyright Troll” and its Potential Impact on the Dissemination of Information on the Internet

By Vlad Vidaeff *

copyright symbolThe availability of articles online from sources such as the Wall Street Journal and the New York Times has made it easy for bloggers and other internet users to take the newspaper’s work and put it on their own websites without the original holder’s permission.  To perhaps deal with this phenomenon, a company called Righthaven has risen and attracted a great deal of criticism and scrutiny.  Righthaven has been deemed a “copyright enforcer for the Las Vegas Review-Journal” which was created by Las Vegas attorney Steven Gibson.  On behalf of the Las Vegas Review-Journal, Righthaven peruses the internet in search of online infringement of the Review-Journal’s copyright.  When it finds a potential infringement, Righthaven purchases the copyrights from the Las Vegas Review-Journal and then proceeds to file a lawsuit.  What makes this particular method unusual is that it is common practice in the newspaper industry for copyright holders to ask for infringers to take down infringing material by e-mail or through a cease and desist letter before pursuing legal remedies.  Many of the defendants in Righthaven lawsuits are non-profit organizations or small-time bloggers who simply do not have the financial resources to litigate.  Consequently, the vast majority of suits have led to settlements.  While each individual settlement is small, ranging from $2,000 to $5,000 in most cases, in total, the revenue that Righthaven accumulates with little work is significant.  As of May 6, 2011, Righthaven has filed 275 copyright infringement lawsuits and has accumulated an estimated $490,000 in total money settlements.  Righthaven filed its first complaint on March 13, 2010. Continue reading »

White House Calls for Tougher Copyright Laws to Protect America’s Intellectual Property

By Tierryicah Mitchell *


White House copyright logo


On March 15, Victoria Espinel, the White House’s first Intellectual Property Enforcement Coordinator, issued 20 legislative recommendations to Congress calling for tougher copyright laws and greater enforcement authority.  The white paperrecommendations ranged from Congress making illegal streaming of music and movies a felony to having wiretap authority for those suspected of being involved in copyright infringement.   According to Espinel’s White House Blog, these “legislative recommendations exemplify the Administration’s commitment to protect and grow jobs and exports, as well as to safeguard the health and safety of our people.”

Even though copyright law already carries a felony penalty Continue reading »

Joel Tenenbaum’s Unwavering War Against the RIAA: The Appellate Decision Coming Soon

By: Vlad Vidaeff *

Part 2: The Appeal

On April 4, 2011, Joel Tenenbaum will become the first victim of the RIAA crusade to reach the appellate level.  Further fueling the spectacle, the First Circuit Court of Appeals granted a motion which will allow a Harvard law student to make oral arguments on Joel Tenenbaum’s behalf.  On the other side, Tenenbaum will face stiff competition as the RIAA will be represented by Paul Clement, a former United States Solicitor General. Continue reading »

Celebrating the IP Start-Up: JBIPL’s Symposium Tackles the Challenges of a Growing Industry in its Second Panel

By Tiffany R. Johnson *

On Friday, March 25th, the Journal of Business and Intellectual Property Law’s symposium tackled the hard-and-fast growing issues associated with “creative capital,” and topped off its energetic morning panel with Bob Young – the founder of two incredibly successful creative capital ventures, Red Hat and  Young’s address to a full crowd was not only inspiring because of his unique journey to success (often noting that his “ADD” prevented him from focusing on any one project for too long), but also because of his candor.  He opened to a crowd full of law students with the sentiment that he had some bad news for aspiring lawyers – the world does not revolve around us; and, especially for the IP start-up, it operates in spite of us. Continue reading »