Intellectual Property
Issues in Consulting
Frederic M. Wilf
Wilftek LLC
Philadelphia Consultants Network
October 1, 2013
With and Without a Contract
Provision
With
Without
Copyright ownership
Client or Consultant owns
Consultant owns
Copyright license
Client owns or irrevocable
license
Non-exclusive,
revocable
Warranties
Disclaim warranties; created
limited warranty of repair to
correct to specs
Implied warranties of
merchantability, fitness
for a particular purpose,
non-infringement, all in
addition to express
warranties in specs
Process issues
As stated
Open to interpretation
Governing law &
disputes
As stated (name a state,
choose litigation or
arbitration)
Open (look at states
bearing the closest
relationship to the
transaction)
Kirtsaeng v. John Wiley &
Sons, Inc.
• U.S. Supreme Court, No. 11-697, March 19, 2013
• First Sale Doctrine, 17 USC §109(a):
• The owner of a copy “lawfully made
under this title” is entitled to sell or
dispose of the copy
• Question is whether this provisions
applies to copies made and sold
outside the U.S.
How it works
• First Sale Doctrine “exhausts” the
copyright owner’s rights once the
object containing the copy is sold
• Purchaser of a book, audio CD, movie DVD
may sell, modify or dispose of the copy
• Publishers argue that copies made and
sold overseas more cheaply than in U.S.
may not be imported, even if content is
the same
Facts
• Kirtsaeng bought copies of U.S. texts made
and sold in Thailand, imported them to the
U.S. and sold them in the U.S.
• Kirtsaeng made net profit of about
$100,000
• Publisher sued, alleging copies made outside
the U.S. are not subject to U.S. law, even if
the original is subject to a U.S. copyright,
and copies licensed by U.S. publisher to a
foreign subsidiary
District Court
• District Court held foreign-made goods not
subject to U.S. Copyright Act, including First
Sale Doctrine
• District Court awarded $600,000 in statutory
damages
Second Circuit
• Second Circuit upheld District Court’s
decision
• Read “lawfully made under this title” as
geographic location of manufacture
• Dissent focused on whether copy was
made lawfully under U.S. Copyright Act
Supreme Court
• After winning in District Court and Second
Circuit, publisher was joined by Solicitor
General and several amici, focusing First
Sale Doctrine on geography
• …where the Copyright Act is applicable
• … applies only to copies made in U.S.
• … First Sale Doctrine does not apply
foreign production for exclusive
distribution outside the U.S.
Kirtsaeng argues
• Focuses on non-geographical interpretations
• “lawfully made under this title” means “in
accordance with” or “in compliance with”
U.S. law
Supreme Court holds…
• Non-geographic interpretation applies
• “lawfully made under this title” means made
with permission granted pursuant to U.S.
copyright law
• Nothing in the First Sale Doctrine limits the
phrase geographically
• There’s no “where” there
• Review of statutory history confirms nongeographical interpretation
Why we care
• Currently easier than ever to transport
copyright-protected goods around the world
• Even easier to sell goods around the world
• Publishers’ attempts to Balkanize copyrightprotected goods increases costs and
administrative burdens
Ways to marginalize the
First Sale Doctrine
• First Sale applies to copies made and sold
by or on behalf of the copyright owner
• Does not apply to licensed copies
• Put clickwraps and shrinkwraps around
content
• DMCA provides cause of action against
breaking of digital rights management
• DVD movies are region-encoded
WNET 13 v. Aereo, Inc.
• Nos. 12-2786-cv, 12-2807-cv (April 1,
2013)
• Aereo captures broadcast TV transmissions
over the air, and stores them for Internet
transmission
• Users watch recorded copies (even live)
• Each user gets one antenna and one copy
• Aereo charges a monthly fee
Public performance right /
Transmit
• Copyright owner has an exclusive right to
“perform the copyrighted work publicly”
• Includes broadcast transmissions
• Copyright owners argued recording and retransmission was a public performance
• Aereo argued that making one copy for each
user is similar to the VCR in Sony v.
Universal, and like the RS-DVR in Cablevision
Analogy to Cablevision
• In Cablevision, cable company created an
infrastructure inside the cable system that
made one copy of each work at each user’s
request
• Aereo does the same thing with over the air
broadcasts
• Plaintiffs argued whether or not copies are
made, the system is designed to provide
real-time transmissions
• Second Circuit holds…
• If transmission can be received by the public
at large, it’s a public performance
• If transmission is received by one person, it’s
not a public performance
• Private transmissions should not be
aggregated, or that will begin to look like a
public performance
• Thus, copying the Cablevision technology
leads to a decision of no infringement
Effect of Aereo decision
• It seems silly and inefficient to deploy one
antenna and one DVR recording for each
user for each program, but the Copyright Act
and the courts still think inside the VCR box
of Sony v. Universal
• Until there’s legislation that expressly allows
the making of second-generation copies for
rebroadcast and retransmission (if ever),
then startups are building VCR equivalents
New gTLDs move closer to
reality
• Many companies have paid handsomely for a
chance at a new generic top-level domains
(gTLDs)
• Would you like a .dog, .delmonte,
.transformers or other domain name?
• Multiple languages
• Multiple scripts
Objection Period
• Initial period to object to pending
applications just ended
• Types of objections
• String confusion objection
• Existing legal rights objection
• Limited public interest objection
• Community objection
• Dispute resolution providers will decide
Trademark Clearing House
(TMCH)
• May register trademarks in the TMCH to
prevent registration of new gTLDs that
infringe your client’s marks
• Used in both “sunrise” of gTLDs and ongoing
trademark conflicts
On the Horizon
• Will the Google Books case ever settle?
• Ass’n of American Publishers settled with
Google
• Author’s Guild has not settled
• Orphan works
• http://www.copyright.gov/fedreg/2012/77f
r64555.pdf (Oct. 22, 2012)
• Continued access to underlying technology
• Word processors, paint programs,
hardware, media readers
Questions and (Some) Answers
Thank you!
Frederic M. Wilf
Wilftek LLC
215 205 0059
fred@wilftek.com
Huntingdon Valley, Pa.
www.linkedin.com/in/fwilf