CASE NO. 00-0084
IN THE
Supreme Court of the
United States
OCTOBER TERM, 2004
ON THE FRINGE, INC., and NANCY FRINGE,
Petitioners,
-versus-
LAMBERT STUDIOS, INC.
Respondent.
ON WRIT OF CERTIORARI
To THE UNITED STATES COURT OF APPEALS
FOR THE FOURTEENTH CIRCUIT
BRIEF FOR RESPONDENT
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QUESTIONS PRESENTED
I.
Whether it is direct copyright infringement to use a personal video recorder (“PVR”) to
automatically remove commercials from within a copyrighted television program, while
digitally recording the copyrighted material on a digital hard drive, and then to transmit a
digital copy of that recording to other PVR users without the express consent of the
copyright owner;
II.
Whether it is contributory copyright infringement to design, produce, and sell a personal
video recorder (“PVR”) with features that allow its users to automatically remove
commercials from within a copyrighted television program, while digitally recording the
copyrighted material on a digital hard drive, and then to transmit a digital copy of that
recording to other PVR users without the express consent of the copyright owner.
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TABLE OF CONTENTS
QUESTIONS PRESENTED..........................................................................................................i
TABLE OF CONTENTS..............................................................................................................ii
TABLE OF AUTHORITIES .......................................................................................................v
OPINIONS BELOW..................................................................................................................viii
STATEMENT OF JURISDICTION........................................................................................viii
CONSTITUTIONAL PROVISION AND STATUTES .........................................................viii
STANDARD OF REVIEW .......................................................................................................viii
STATEMENT OF THE CASE.....................................................................................................1
Statement of Facts .............................................................................................................1
Procedural History ............................................................................................................3
SUMMARY OF THE ARGUMENT ..........................................................................................3
ARGUMENT..................................................................................................................................4
I.
IN USING PIA TO REPRODUCE, MODIFY, AND ULTIMATELY DISTRIBUTE
LAMBERT’S EXCLUSIVELY COPYRIGHTED WORK, FRINGE IS LIABLE
FOR DIRECT COPYRIGHT INFRINGEMENT..........................................................4
A.
Relief under the affirmative defense of fair use should not be granted to
Fringe because Lambert’s exclusive copyright in it’s television show Day
Court outweighs Fringe’s interest in copying and distributing the show. …...6
1.
The purpose and character of Fringe’s use of Day Court is commercial
in nature and carries no transformative value because Fringe copied
and distributed the entirety of Day Court and deleted its revenue
generating commercials. ……………………….......................................7
a.
In reproducing, altering, and distributing Lambert’s
copyrighted program Day Court without paying through PIA,
Fringe’s use is commercial in nature. .........................................7
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b.
II.
By removing the commercials from Day Court, Fringe’s
alteration provides no new transformative expression,
meaning, or message. ....................................................................9
2.
Since Day Court is an original and creative copyrighted work, it is
squarely within the core of copyright protection. ................................10
3.
In copying and reproducing a vast portion of Day Court verbatim and
distributing that reproduction, the amount and substantiality of the
portion Fringe used weighs against finding fair use. ...........................11
4.
In the light of Lambert’s proffered evidence, PIA materially impairs
the marketability of Lambert’s copyrighted programs and, as a result,
Lambert stands to lose substantial licensing revenue. .........................12
SINCE PIA IS NOT A STAPLE ARTICLE OF COMMERCE, PETITIONERS
MATERIALLY CONTRIBUTED TO AND HAD KNOWLEDGE OF THE
INFRINGING ACTIVITY OF PIA, WHICH ASSISTED IN DIRECT
COPYRIGHT INFRINGEMENT OF LAMBERT’S COPYRIGHTS.......................14
A.
Petitioners have actual knowledge of the direct copyright infringement
capabilities of PIA and infringement by its users because Fringe personally
affirmed that she illegally recorded Lambert’s exclusive copyrighted shows
and subsequently induced the public to practice in such an activity. ............15
The staple article of commerce doctrine does not vindicate Petitioners
of contributory liability because PIA was developed for infringing
purposes. ..................................................................................................16
B.
Petitioners are responsible for material contribution of copyright
infringement because they facilitate services that allow copyright infringers
to easily send copyrighted material....................................................................18
1.
But for the existence of PIA, users would be unable to reproduce and
distribute Lambert’s exclusively copyrighted shows with such ease
and, therefore, Petitioners’ conduct rises to the level of contributory
copyright infringement. ..........................................................................18
2.
In supporting and assisting users in with the distribution and
commercial-skipping features, Petitioners’ conduct rises to the level of
contributory copyright infringement. ...................................................19
CONCLUSION............................................................................................................................20
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APPENDIX A…………………………………………………………………………………….a
APPENDIX B…………………………………………………………………………………….b
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TABLE OF AUTHORITIES
UNITED STATES SUPREME COURT CASES
Campbell v. Acuff-Rose Music, Inc.,
510 U.S. 569 (1994)…………………………………………………………………passim
Harper & Row, Publishers, Inc. v. Nation Enter.,
471 U.S. 539 (1985)……………………………………………………………...viii, 9, 11
Sony Corp of Am. v. Universal City Studios, Inc.,
464 U.S. 417 (1984)…………………………………………………………………passim
UNITED STATES COURT OF APPEALS CASES
A & M Records, Inc. v. Napster, Inc.,
239 F.3d 1004 (9th Cir. 2001)………………………………………………………passim
Chicago Bd. of Educ. v. Substance, Inc.,
354 F.3d 624 (7th Cir. 2003)...............................................................................................6
CoStar Group, Inc. v. LoopNet, Inc.,
373 F.3d 544 (4th Cir. 2004)…………………………………………………………….18
Creative Tech., Ltd. v. Aztech Labs, Inc.,
61 F.3d 696 (9th Cir. 1995)……………………………………………………………….5
Elvis Presley Enter., Inc. v. Passport Video,
349 F.3d 622 (9th Cir. 2003)………………………………………………………….....10
Ets-Hokin v. Skyy Spirits, Inc.,
225 F.3d 1068 (9th Cir. 2000)…………………………………………………………..viii
Fonovisa, Inc. v. Cherry Auction, Inc.,
76 F.3d 259 (9th Cir. 1996)……………………………………………………………...18
Hustler Magazine, Inc. v. Moral Majority, Inc.,
796 F.2d 1148 (9th Cir. 1986)………………………………………………………...7, 11
Infinity Broad. Corp. v. Kirkwood,
150 F.3d 104 (2d Cir. 1998)…………………………………………………………...9, 10
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In re Aimster Copyright Litig.,
334 F.3d 643 (7th Cir. 2003)……………………………………………………….passim
Kelly v. Arriba,
336 F.3d 811 (9th Cir. 2002)…………………………………………………………….10
Mattel, Inc. v. Walking Mountain Prod.,
353 F.3d 792 (9th Cir. 2003)……………………………………………………...9, 12, 13
Matthew Bender & Co. v. West Publ. Co.,
158 F.3d 693 (2d. Cir. 1998)………………………………………………………....14, 18
NXIVM Corp. and First Principles, Inc. v. The Ross Inst.,
364 F.3d 471 (2d Cir. 2004)…………………………………………………………...9, 13
Lambert Studios v. On the Fringe, Inc.,
644 F.3d 301 (14th Cir. 2004)………………………………………………………passim
Pacific & Southern Co. v. Duncan,
744 F.2d 1490 (11th Cir. 1984)…………………………………………………………viii
Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc.,
342 F.3d 191 (3d Cir. 2003)……………………………………………………….....10, 11
WGN Continental Broad. Co. v. United Video,
693 F.2d 622 (7th Cir. 1982)……………………………………………………………...5
Worldwide Church of God v. Philadelphia Church of God,
227 F.3d 1110 (9th Cir. 2000)…………………………………………………………….8
UNITED STATES DISTRICT COURT CASES
Burdick v. Koerner,
988 F. Supp. 1206 (E.D. Wis. 1998)……………………………………………………..15
Marvullo v. Gruner & Jahr,
105 F. Supp. 2d 225 (S.D.N.Y. 2000)…………………………………………………...14
Mastercard Int’l Inc. v. Nader 2000 Primary Committee, Inc.,
2004 U.S. Dist. LEXIS 3644 (S.D.N.Y 2004)………………………………………...7, 10
Religious Tech. Ctr. V. Netcom On-Line Commun. Servs.,
907 F. Supp. 1361 (N.D. Cal. 1995)……………………………………………………..15
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Rubin v. Brooks/Cole Pub. Co.,
836 F. Supp. 909 (D. Mass 1993)……...………………………………………………….6
UNITED STATES CONSTITUTIONAL PROVISIONS
U.S. Const. art. I, § 8, cl. 8…………………………………………………………………...viii, 5
UNITED STATES STATUTES
28 U.S.C. § 1254(1) (2004)……………………………………………………………………..viii
28 U.S.C. § 1291 (2004)..................................................................................................................3
17 U.S.C. § 101 (2004)……………………………………………………………………….viii, 5
17 U.S.C. § 102 (2004)……………………………………………………………………….viii, 5
17 U.S.C. § 106 (2004)……………………………………………………………………….viii, 5
17 U.S.C. § 107 (2004)……………………………………………………………………...passim
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OPINIONS BELOW
The decision of the United States District Court for the Central District of Franklin is an
unreported opinion. The opinion of the United States Court of Appeals for the Fourteenth Circuit
is reported at Lambert Studios, Inc. v. On The Fringe, Inc., 644 F.3d 301, 301 (14th Cir. 2004).
STATEMENT OF JURISDICTION
This Court has jurisdiction pursuant to 28 U.S.C. § 1254(1). 28 U.S.C. § 1254(1) (2004).
CONSTITUTIONAL PROVISION AND STATUTES
The text of the following constitutional provision relevant to the determination of the
present case can be found in Appendix A following this brief: U.S. Const. art. I, § 8, cl. 8.
The text of the following federal statutes relevant to the determination of the present case
can be found in Appendix B following this brief: 17 U.S.C. § 101 (2004); 17 U.S.C. § 102
(2004); 17 U.S.C. § 106 (2004); and 17 U.S.C. § 107 (2004).
STANDARD OF REVIEW
The issues in this case involve mixed questions of fact and law, which are reviewed de
novo. Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 560 (1985) citing
Pacific & Southern Co. v. Duncan, 744 F.2d 1490, 1495 n.8 (11th Cir. 1984). In consideration
of the Copyright Act of 1976, higher courts review the ruling of lower courts under a de novo
standard. Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d 1068, 1073 (9th Cir. 2000).
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STATEMENT OF THE CASE
Statement of Facts
As a successful producer and distributor of television programs, Lambert Studios, Inc.
(“Lambert”) provides original works of weekly prime-time network programming in the United
States. Lambert Studios v. On The Fringe, Inc., 644 F.3d 301, 301 (9th Cir. 2003). Lambert’s
programs are authorship, fixed in a tangible medium of expression and licensed to broadcast
networks, such as CBS, ABC, and NBC as well as through cable and satellite service users who
pay for non-broadcast services such as HBO. Id. Networks use advertising revenues to pay such
licensing fees as Lambert’s, which in turn funds Lambert’s operations. Id. Lambert’s programs
have occupied at least three hours of weekly prime-time network programming in the United
States for the last five years and include a variety of original programs including Day Court. Id.
However, as a result of a new digital video recorder, “Play-It-Again” (“PIA”), movies
and television programs can be copied onto a computer hard drive within the device where
perfect digital recordings are then stored in digital files. Id. at 302. PIA has the ability to gather
information about its users. Id. at 303. For a subscription fee, an internet connection within PIA
tracks a user’s recording and viewing habits, allowing him to receive a daily viewing guide
displaying programs available for sending and receiving. Id.
PIA also contains a feature called “Cut this Bull” (“CTB”), where commercials may be
automatically deleted with the touch of a button. Id. CTB easily removes all commercials from a
program by stopping PIA from recording during commercials and then resuming recording when
a program returns. Id. Also, PIA users may use a “Sharing is Caring” (“SIC”) feature to receive
or distribute previously recorded programs via a broadband connection over the internet,
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allowing that user to distribute to twenty people. Id. at 302. Currently, approximately one
million people own and operate a PIA. Id. at 303.
At trial according to Lambert’s experts, CTB is responsible for a substantial decrease in
Lambert’s advertising revenues because PIA users no longer view television commercials, and
therefore advertisers are not paying advertising fees. Id. at 306. Petitioners claim that any
decrease in advertising revenue is due to poor programming. Id. In addition, Lambert’s experts
have concluded that substantial revenue may be lost from subscription-based services due to SIC.
Id. These experts believe as a result of PIA, users are no longer viewing re-runs or renting videos
due to the ease with which users are able to share perfect digital copies of programs. Id.
Founded by Nancy Fringe (“Fringe”), On The Fringe (“OTF”) designed, produces, and
sells PIA. Id. at 302. As a well known advocate for PIA, Fringe has appeared on national
television stating, “all Americans have a duty and a right to submerge themselves in the art of
commercial-free television.” Id. To aid PIA users, CTB and SIC are explained with instructions
by Petitioners on the PIA website and toll-free phone numbers are provided. Id. at 302, 303.
Also, on the outside of every PIA package there are instructions on how to use CTB and SIC. Id.
at 302. Finally, internet advertisements highlight CTB and SIC selling-points of PIA. Id. at 303.
Lambert has sent warning letters to Petitioners notifying them of the copyright infringing
nature of PIA. Id. Petitioners’ own attorney, Max Beta, provided repeated warnings regarding
PIA’s possible infringement. Id. These warnings have been disregarded and Petitioners continue
to advertise and sell PIA. Id. In fact after the filing of this suit, Fringe publicly stated that in
addition to selling PIA she is a “model user” of all PIA features. Id. To advertise PIA, Fringe
went on the talk show Carrie Queen Live and stated that she used PIA “many times per week”
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admitting that at least three times she used her PIA to record Lambert’s copyrighted television
program Day Court, remove the commercials, and distributed it to six other PIA users. Id.
Procedural History
On December 18, 2002, as owner of the copyrighted program Day Court, Lambert filed
this lawsuit against Fringe and her corporation OTF in the United States District Court for the
Central District of Franklin alleging direct copyright infringement of Lambert programming by
Fringe and contributory copyright infringement on the part of Fringe and OTF collectively. The
District Court ruled Fringe did not directly violate Lambert’s copyrights and that Petitioners did
not contributorily infringe Lambert’s exclusive rights. Id. 644 at 303-04.
On March 7, 2004 upon properly acquiring jurisdiction pursuant to 28 U.S.C. § 1291, the
Court of Appeals reversed the lower court. 28 U.S.C. § 1291 (2004). Relying on 17 U.S.C. § 107
the Appellate Court found Fringe liable for direct copyright infringement. Lambert, 644 F.3d at
306; 17 U.S.C. § 107 (2004). Furthermore, the Court found Petitioners contributorily liable
holding that PIAs are incapable of substantial non-infringing uses. Id. at 307. The United States
Court of Appeals for the Fourteenth Circuit entered a judgment in favor of the Lambert Studios.
On August 9, 2004, certiorari was granted by the Supreme Court regarding the issues of direct
and contributory copyright infringement.
SUMMARY OF THE ARGUMENT
This Court has previously set forth parameters for new technologies which have had the
possibility of infringing myriad copyright owners. Today, digital technology has made it possible
to perfectly replicate entire copyrighted works and share them with anyone in the world over the
internet. Such technology has the ability to controvert protections afforded to copyright owners
under the Copyright Act of 1976 and the United States Constitution. If unchecked, unscrupulous
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individuals can easily subvert the law and encroach upon a copyright owner’s original works,
ultimately hindering the creative and financial benefits for all of society. PIA allows its users the
capacity to digitally record television shows and movies, easily delete commercials, and
massively distribute the recordings by internet. OTF and its founder Fringe manufacture,
advertise, and distribute PIA, which has infringed the exclusive rights of Lambert.
In recording and distributing Lambert’s copyrighted program, Day Court, Fringe is
directly liable for copyright infringement. As an affirmative defense, Fringe claims that use of
PIA is fair, but all four factors of the test codified in 17 U.S.C. § 107 weigh against that. The
purpose and character of PIA was to only copy Day Court while skipping commercials, which
carries no transformative value and is commercial because PIA can distribute such replicated
programs. Since Day Court is creative in nature, it is afforded more copyright protection. Finally,
the market for Lambert’s copyrighted works has been impaired and will continue to be.
Additionally, Petitioners are contributorily liable for copyright infringement due to their actual
knowledge of infringement and because PIA is not a staple article of commerce. Ultimately,
Petitioners facilitate the services and facilities that assist PIA users’ infringement, contributing to
direct copyright infringement. Therefore, this Court should affirm the Appellate Court.
ARGUMENT
I.
IN USING PIA TO REPRODUCE, MODIFY, AND ULTIMATELY DISTRIBUTE
LAMBERT’S EXCLUSIVELY COPYRIGHTED WORK, FRINGE IS LIABLE
FOR DIRECT COPYRIGHT INFRINGEMENT.
It is undisputed that Fringe copied and distributed Lambert’s copyrighted program Day
Court. Lambert, 644 F.3d at 301. As a result, Lambert must be afforded protection of its
copyrighted material. According to the Constitution, Congress is empowered to enact laws that
“promote the progress of science and useful arts, by securing for limited times to authors and
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inventors the exclusive right to their respective writings and discoveries.” U.S. Const. art. I, § 8,
cl. 8. To further this, Congress passed the Copyright Act of 1976. 17 U.S.C. § 101 et seq. (2004).
“[A]n American copyright is a valued benefit granted by the United States government for the
primary purpose of benefiting the general public good.” Creative Tech., Ltd. v. Aztech Labs,
Inc., 61 F.3d 696, 708 (9th Cir. 1995) (Ferguson, J. Dissenting). This Court must find PIA
incapable of fair use because of this very important governmental protection.
Fringe’s actions have directly infringed Lambert’s exclusive copyright. The owner of a
copyright has the exclusive right to authorize (or not authorize) use of copyrighted works or to
display (or not display) the copyrighted work publicly. 17 U.S.C. §§ 106(a)(4)-(5) (2004).
Copyrights exist for original works fixed in a tangible medium of expression. 17 U.S.C. § 102
(2004). Hence, any use of a copyright that is not authorized by the copyright owner rises to the
level direct copyright infringement. 17 U.S.C. § 106(b) (2004). Audiovisual works such as
television programs consist of a series of related images intended to be shown by the use of
machines with accompanying sounds, regardless of the nature of the material objects which the
works are embodied. 17 U.S.C. § 101 (2004). A copyright licensee who makes unauthorized use
of a work by publishing it in a truncated version is infringing the copyright. WGN Continental
Broad. Co. v. United Video, 693 F.2d 622, 625 (7th Cir. 1982). Thus, duplicating a work without
its commercials amounts to creating an unauthorized derivative work. In Re Aimster Copyright
Litig., 334 F.3d 643, 647 (7th Cir. 2003) citing WGN, 693 F.2d at 625. It is uncontested that
Fringe’s use of PIA would be an infringement of Lambert’s exclusive rights of its copyrighted
show Day Court but for a finding of fair use. The parties have stipulated said violation was
unauthorized by Lambert and the result of Fringe not only recording Day Court, but deleting its
commercials, and finally distributing the truncated show to other PIA users. Lambert, 644 F.3d at
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305. Such activity violates Lambert’s clear copyright and cannot be saved by the affirmative
defense of fair use because such substantial copying carries no transformative value, it is
commercial in nature, Day Court is a creative work, and the copy acts as a market replacement
for Lambert’s exclusive copyright.
A.
Relief under the affirmative defense of fair use should not be granted to
Fringe because Lambert’s exclusive copyright in it’s television show Day
Court outweighs Fringe’s interest in copying and distributing the show.
Fringe may reproduce Lambert’s exclusively copyrighted work for a “fair use.” Sony
Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 447 (1984). However, fair use is an
affirmative defense on which Fringe bears the burden of proof. Chicago Bd. of Educ. v.
Substance, Inc., 354 F.3d 624, 629 (7th Cir. 2003). Statutory factors of the fair use doctrine listed
within the 1976 Copyright Act, include:
(1) the purpose and character of use, including whether such use is of commercial nature
or is for nonprofit education purposes
(2) the nature of the copyrighted work,
(3) the amount and substantiality of the portion used in relation to the copyrighted work
as a whole, and
(4) the effect of use on the potential market for or value of the copyrighted work.
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577 (1994) quoting 17 U.S.C. §§ 107(1)-(4)
(2004). These factors must be explored together in light of the purpose of copyright laws. Id. at
578. Furthermore, these factors are neither exclusive nor should any one factor be determinative.
Rubin v. Brooks/Cole Pub. Co., 836 F.Supp. 909, 916 (D. Mass 1993). Ultimately, the fair use
doctrine balances Lambert’s exclusive rights as a copyright holder with Fringe’s interest.
Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1151-52 (9th Cir. 1986). As such
under the fair use doctrine, Fringe is unable show any use of PIA is fair because such copying
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has no transformative value, it is commercial in nature, Day Court is a creative work, and the
copy acts as a market replacement for Lambert’s exclusive copyright.
1.
The purpose and character of Fringe’s use of Day Court is commercial
in nature and carries no transformative value because Fringe copied
and distributed the entirety of Day Court and deleted its revenue
generating commercials.
The first fair use factor to consider is the “purpose and character” of the infringing use of
PIA, including whether such use is of a commercial nature or has transformative value.
Mastercard Int’l Inc. v. Nader 2000 Primary Committee, Inc., 2004 U.S. Dist. LEXIS 3644, 3738 (S.D.N.Y 2004) quoting 17 U.S.C. § 107(1). Further, a fair use analysis must consider
“whether the allegedly infringing work ‘merely supersedes’ the original work ‘or instead adds
something new, with a further purpose or different character, altering the first with new
expression or message or whether and to what extent the new work is transformative.’” Id. at 38
quoting Campbell, 510 U.S. at 579. Since Fringe’s use of PIA is commercial and has no
transformative value, it fails the first consideration of the fair use test.
a.
In reproducing, altering, and distributing Lambert’s
copyrighted program Day Court without paying through PIA,
Fringe’s use is commercial in nature.
The ability of PIA to allow its users to delete program commercials, make perfect digital
copies, and easily distribute those copied copyrighted works over the internet inundates PIA with
commercial use. A use of an original copyrighted work that is merely a duplication of an original
copyrighted work, serves as a market replacement for that work, “making it likely that
cognizable market harm to the original will occur.” Campbell, 510 U.S. at 591 citing Sony, 464
U.S. at 451. “Repeated and exploitative copying of copyrighted works, even if the copies are not
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offered for sale, may constitute a commercial use.” A&M Records, Inc. v. Napster, Inc., 239
F.3d 1004, 1015 (9th Cir. 2001) citing Worldwide Church of God v. Philadelphia Church of
God, 227 F.3d 1110, 1118 (9th Cir. 2000). In that case, the court held that a religious
organization’s distribution of a copyrighted book for use in its religious observance was a
commercial use. Id. Defendant was unquestionably profiting from plaintiff’s copyrighted book
because it enabled the growth of defendant’s ministry. Id.
Likewise, in A&M Records, the defendant maintained a service, Napster, where users
could trade MP3 files over the internet and ultimately amass, free of charge, a library of copied
files onto a computer. Id. at 1011-12. Napster users could “download a full, free and permanent
copy of the recording.” Id. at 1018 (citation omitted). According to the court, this was
commercial use on the part of users because “a host user sending a file cannot be said to engage
in a personal use when distributing that file to an anonymous requester and Napster users get for
free something they would ordinarily have to buy.” Id. at 1015.
As in Worldwide Church and A&M Records, PIA users such as Fringe distribute
unauthorized copies of exclusively copyrighted works for free. Lambert, 644 F.3d at 303. The
fact that approximately one million people own and use PIA guarantees the likelihood that
copying and distribution of one program allows access of that program to every PIA user. Id.
The dire effect of such sharing is obvious when examining the possibility of those receiving a
perfect copy of programs which require payment, such as fee based networks. Only a handful of
individuals would need to subscribe and could easily distribute a copied work to the entire PIA
network. As seen in A&M Records, such an abuse allows PIA users such as Fringe to freely
receive a pay service. Furthermore, such copying and distribution of Lambert’s copyrighted
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program, Day Court, acts as a market replacement stripping Lambert of its rightful commercial
revenues. As such, Fringe’s use of PIA is commercial in nature, which weighs against a finding
of fair use. Harper & Row, Publishers, Inc. v. Nation Enter., 471 U.S. 539, 562 (1985).
b.
By removing the commercials from Day Court, Fringe’s
alteration provides no new transformative expression,
meaning, or message.
In deleting the revenue-producing commercials from Lambert’s exclusively copyrighted
program Day Court, Fringe’s actions only duplicate the original program, carrying no
transformative value. The purpose and character of a copyright use in a fair use inquiry
considers “to what extent the new work is transformative” not simply supplanting the original
work and alterations with different character, “new expression, meaning, or message.” Mattel,
Inc. v. Walking Mountain Prod., 353 F.3d 792, 800 (9th Cir. 2003) quoting Campbell, 510 U.S.
at 584. Copyright protection promotes science and the arts, and is generally furthered by creation
of works that are transformative. NXIVM Corp. and First Principles, Inc. v. The Ross Inst., 364
F.3d 471, 477 (2d Cir. 2004) citing Campbell, 510 U.S. at 579. If the use is for “criticism,
comment, scholarship, or research” the transformative value “will normally tilt in the defendants’
favor.” Id. citing 17 U.S.C. § 107 (2004). However, when original works are retransmitted in a
different medium courts are reluctant to find fair use. A&M Records, 239 F.3d at 1015 citing
Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104, 108 (2d. Cir. 1998).
The court in Infinity concluded that retransmission of radio broadcast over telephone
lines is not transformative because the character of the original broadcasts is unchanged. Infinity,
150 F.3d at 108. “There [was] neither new expression, new meaning nor new message” because
it “merely repackage[d] or republishe[d] the original.” Id. (citations omitted). In this case, Fringe
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made perfect copies of Lambert’s Day Court after deleting Lambert’s only means of revenue.
“[C]ommercial-skipping amounts to creating an unauthorized, derivative work (citations
omitted), namely a commercial-free copy that would reduce the copyright owner’s income from
his original program, since ‘free’ television programs are financed by the purchase of
commercials by advertisers.” In Re Aimster, 334 F.3d at 647-48. As such, Fringe’s
retransmission of Day Court is not only strikingly similar to the facts of Infinity, but it
constitutes copyright infringement, as seen in In Re Aimster. Since Fringe’s use of PIA to record,
skip the commercials, and distribute Lambert’s copyrighted program Day Court lacks any
transformative value and is commercial in nature, the first factor strongly weighs against fair use.
2.
Since Day Court is an original and creative copyrighted work, it is
squarely within the core of copyright protection.
As a creative work, Lambert’s Day Court is “closer to the core of intended copyright
protection” than “fact-based works.” A&M Records, 239 F.3d at 1015 quoting Campbell, 510
U.S. at 586. Such creative works, as opposed to factual works, get greater copyright protection.
Mastercard, 2004 LEXIS at 44. In Video Pipeline, the court considered the movies at issue as
“paradigms of creative, non-factual expression.” Video Pipeline, Inc. v. Buena Vista Home
Entm’t, Inc., 342 F.3d 191, 200 (3d Cir. 2003). Works such as original songs or motion pictures
“are creative in nature and thus fit squarely within the core of copyright protection.” Elvis
Presley Enter. v. Passport Video, 349 F.3d 622, 629 (9th Cir. 2003) citing Sony, 464 U.S. at 455
n.40; Kelly v. Arriba, 336 F.3d 811, 822 (9th Cir. 2002).
Lambert’s exclusively copyrighted program Day Court is an original, creative work.
Furthermore, Lambert’s programs are not only imaginative and original, but represent “a
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substantial investment of time and labor made in anticipation of a financial return. Hustler, 796
F.2d at 1154 (citation omitted). This is evidenced by the fact that Lambert’s programs have
occupied at least three hours of weekly prime-time network programming in the United States
for the last five years. Lambert, 644 F.3d at 301. Fringe may argue that the Harper decision
stated “[t]he unpublished nature of a work is a key… factor tending to negate a defense of fair
use Harper, 471 U.S. at 554. However, the second factor may not weigh in favor of fair use
simply because the public has access. The court in Video Pipeline, found use not fair regardless
of the published status. Video Pipeline, 342 F.3d at 201. The Campbell court only considered
the creative expression of the copyrighted work without considering that the original had already
been published. Campbell, 510 U.S. at 586. As such, Lambert’s creative copyrighted program
must be protected, which weighs against a finding of fair use regardless of publication.
3.
In copying and reproducing a vast portion of Day Court verbatim and
distributing that reproduction, the amount and substantiality of the
portion Fringe used weighs against finding fair use.
Fringe copied and reproduced nearly the entire copyrighted program, Day Court,
verbatim. “The fact that a substantial portion of the infringing work was copied verbatim is
evidence of the qualitative value of the copied material....” Harper, 471 U.S. at 565. “[T]he more
a copyrighted work is taken, the less likely the use is to be fair and that even a less substantial
taking may be unfair if it captures the essence of the copyrighted work.” Infinity, 150 F.3d at 109
citing Harper, 471 U.S. at 564-65 (although “words actually quoted were an insubstantial
portion” of the copyrighted book, they were “essentially the heart of the book”). Although
“wholesale copying does not preclude fair use per se, copying an entire work militates against a
finding of fair use.” A&M Records, 239 F.3d at 1016 (citations omitted). The A&M Records
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court agreed that Napster users engaged in wholesale copying because the file transfers involved
copying the entirety of the copyrighted work. Id. As in A&M Records, Fringe’s verbatim
copying not only the heart of Day Court, but nearly the entirety weighs against finding fair use.
The Supreme Court in Sony held that reproduction of entire works did not have the
ordinary effect of militating against a finding of fair use in copying videotapes for time-shifting,
which was personal use enabling viewers to see the work they had been invited to witness in its
entirety free of charge. Sony, 464 U.S. at 449-50. Importantly, the time-shifting allowances
amounted to a fair use because the use was for private home use and not commercial use. Id. at
449. Yet, the distribution aspects of PIA in the light of Fringe’s admitted use of Day Court
supports the distinction from Sony that PIA users have the ability to massively distribute
programs with the potential for commercial use. As in A&M Records, Fringe’s use of Day Court
was commercial and public, which weighs against a finding of fair use for the third factor.
4.
In the light of Lambert’s proffered evidence, PIA materially impairs
the marketability of Lambert’s copyrighted programs and, as a result,
Lambert stands to lose substantial licensing revenue.
The existence of PIA has and will continue to materially impair the marketability of
Lambert’s copyrights. The inquiry under the fourth factor balances the public benefit if the use is
permitted against the gain the copyright owner receives if the use is denied. Mattel, 353 F.3d at
804-05 (citations omitted). In proving present or future market harm, the character of the purpose
of the use must be examined. A&M Records, 239 F.3d at 1016. If the intended use is for
commercial gain, likelihood of significant market harm may be presumed, but if it is for a
noncommercial purpose, the likelihood must be demonstrated. Campbell, 510 U.S. at 591.
Challenges to non-commercial uses require proof that the particular use is harmful or if the use
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becomes widespread it will adversely affect potential markets. A&M Records, 239 F.3d at 1016
quoting Sony, 464 U.S. at 451. Additionally, a sufficiently transformative work allows for a
possible conclusion that potential market harm is improbable, but the copyright owner must be
unlikely to develop a similar transfromative work. Mattel, 353 F.3d at 806. Hence, the focus is
whether the alleged infringer is offering a market substitute for the original work usurping the
owner’s market. NXIVM, 364 F.3d at 481-82 citing Campbell, 510 U.S. at 593. As an
affirmative defense, the defendant or petitioner has the burden of demonstrating fair use without
favorable evidence about relevant markets. Campbell, 510 U.S. at 590.
The evidence proffered by Fringe is insufficient to bolster the position that PIA does not
materially impair the marketability of Lambert’s copyrights. In an effort to rebut Lambert
experts, Fringe offered testimony from experts who opined that any decreases in Lambert’s
advertising revenue could only be attributable to poor programming and not PIA use. Lambert,
644 F.3d at 306. However, Lambert’s experts provided persuasive evidence that PIA and in
particular the CTB feature is responsible for substantial decreases in Lambert’s advertising
revenues because PIA users no longer view commercials and, as a result, advertisers are refusing
to pay advertising fees. Id. As noted by In re Aimster, such commercial-skipping reduces a
copyright owner’s income because television programs are financed by the purchase of
commercials by advertisers. In re Aimster, 334 F.3d at 647. Thus, PIA has a commercial impact
upon Lambert’s markets and licensing revenues. Lambert experts testified that PIA users are no
longer viewing re-runs or renting videos as a result of the ease with which they are able to share
perfect digital copies of programs. Id. Finally, Lambert’s experts have testified that substantial
revenue may be lost from subscription-based services as a result of the SIC feature because PIA
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users can view such programming without paying subscription fees. Id. As a potential market for
Lambert, the profitability of subscription-based services is deteriorated by such infringement.
Fringe offered no evidence that retransmission of Day Court or any other program carries any
transformative value. In light of the distribution capabilities of PIA, the near verbatim copies of
Lambert’s copyrighted programs are market replacements for Lambert programming. Regardless
of whether Fringe distributed Day Court for a commercial or non-commercial use, Lambert has
felt the effect. Such usurpation of Lambert’s market weighs heavily against a finding of fair use
because PIA acts as a market replacement for Lambert’s present and future markets.
II.
SINCE PIA IS NOT A STAPLE ARTICLE OF COMMERCE, PETITONERS
MATERIALLY CONTRIBUTED TO AND HAD KNOWLEDGE OF THE
INFRINGING ACTIVITY OF PIA, WHICH ASSISTED IN DIRECT
COPYRIGHT INFRINGEMENT OF LAMBERT’S COPYRIGHTS.
A contributory infringer is one who, with knowledge of infringing activity, induces,
causes or materially contributes to infringing conduct of another; actual knowledge is not
required, and defendant incurs contributory copyright liability if he has reason to know of third
party’s direct infringement. A&M Records, 239 F.3d at 1019. “There can be no contributory
infringement by a defendant without direct infringement by another.” Id. at 1013; Matthew
Bender & Co. v. West Publ. Co., 158 F.3d 693, 706 (2d. Cir. 1998). This is satisfied by the fact
that Fringe directly infringed Lambert’s copyright, Day Court, as Fringe said on Carrie Queen
Live. Lambert, 644 F.3d at 303. In order to be liable for contributory copyright infringement, a
defendant must have had actual or constructive knowledge of, and participated in, infringing
conduct. Marvullo v. Gruner & Jahr, 105 F. Supp. 2d 225, 230 (S.D.N.Y. 2000). Lambert must
prove Petitioners’ participation bears a direct relationship to the infringing acts, and that they
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acted in concert with the direct infringer. Id. Further, Lambert must prove that Petitioners had the
requisite knowledge and material contribution for copyright infringement. PIA is not a staple
article of commerce because it was developed for the illegitimate and objectionable purposes of
commercial deletion and distribution. Since Fringe personally engaged in illegal duplication of
Lambert’s copyrighted programs and actively encouraged the public to do the same, Petitioners
had the requisite knowledge. Also, Petitioners provided support services to PIA users facilitating
copy of Lambert copyrights. Therefore, Petitioners had knowledge of the infringing activity and
provided material contribution to copyright infringement.
A.
Petitioners have actual knowledge of the direct copyright infringement
capabilities of PIA and infringement by its users because Fringe personally
affirmed that she illegally recorded Lambert’s exclusive copyrighted shows
and subsequently induced the public to practice in such an activity.
As designers, developers, and manufactures of PIA, Petitioners have direct knowledge of
the infringing capabilities of their product. Contributory infringement requires one to “know or
have reason to know” of infringement. A&M Records, 239 F.3d at 1020. Actual knowledge of
specific copyright infringing uses is not, without more, sufficient condition for deeming a
facilitator to be contributory infringer. In re Aimster, 334 F.3d at 649. One who directly
participates in the infringing activity contributes to infringing conduct of another. Burdick v.
Koerner, 988 F. Supp. 1206, 1209 (E.D. Wis. 1998). Additionally, notice from the copyright
owner fulfills the knowledge aspect. Religious Tech. Ctr. v. Netcom On-Line Commun. Servs.,
907 F. Supp. 1361, 1374 (N.D. Cal. 1995). In A&M Records, the court agreed with the District
Court’s finding of actual knowledge:
(1) a document authored by Napster... mentioned the need to remain ignorant of users’
real names and IP addresses’ since they are exchanging pirated music; and (2) the
Recording Industry Association of America (“RIAA”) informed Napster of more than
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12,000 infringing files.... [C]onstructive knowledge [was found] because: (a) Napster
executives have recording industry experience; ... (c) Napster executives have
downloaded copy-righted songs from the system; and (d) they have promoted the site....
A&M Records, 239 F.3d at 1020 n.5.
Petitioners received actual notice in the form of three warning letters from Lambert as
well as numerous warnings from Max Beta, Petitioners’ attorney, regarding the infringing nature
of PIA. Lambert, 644 F.3d at 303. Even if warnings from Lambert and the attorney were
insufficient, this lawsuit provided notice of the infringing capabilities of PIA and its users.
Despite such warnings and the filing of suit, OTF founder, Fringe, on Carrie Queen Live stated
she recorded Lambert’s exclusively copyright program, Day Court, and shared it via SIC with
six individuals. Id. Hence, Fringe not only had actual knowledge of copyright infringement, but
she directly participated in the activity. Fringe has also appeared on national television stating,
“all Americans have a duty and a right to submerge themselves in the art of commercial-free
television.” Id. at 302. Like Napster, Petitioners had reason to know of PIA’s infringing uses and
yet they continue to ignore all warnings and even participate in the infringing activity.
The staple article of commerce doctrine does not vindicate Petitioners
of contributory liability because PIA was developed for infringing
purposes.
Since PIA is incapable of uses that do not infringe copyrights, it fails as a staple article of
commerce. Sale of copying equipment, like the sale of other articles of commerce, does not
constitute contributory infringement of copyright if the product is widely used for legitimate,
unobjectionable purposes, or even if merely capable of substantial non-infringing uses. Sony,
464 U.S. at 442. Unlicensed use of a copyright is not infringement unless it conflicts with one of
specific exclusive rights conferred by copyright statute. Id. In re Aimster held that commercial16
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skipping and building a library of recorded programs was copyright infringement. In re Aimster,
334 F.3d at 647-48. Sharing copyrighted files without an owner’s consent constitutes copyright
infringement. A&M Records, 239 F.3d at 1025. Because PIA was designed and is sold for
illegitimate, objectionable purposes, and is not primarily capable of substantial non-infringing
uses, Petitioners are liable for contributory copyright infringement.
PIAs are primarily used for deletion of commercials and sharing of files. Petitioners have
demonstrated no substantial non-infringing uses and, in fact, they promote the SIC and CTB
features of the PIA, which are illegitimate non-infringing features. SIC amounts to sharing
copyrighted files without the owner’s consent, contrary to A&M Records. The Sony court held
that private, noncommercial time-shifting in the home is a non-infringing use both because
respondents had no right to prevent other copyright holders from authorizing such time-shifting
for their programs, and because even the unauthorized home time-shifting of respondents’
programs is legitimate fair use. Sony, 464 U.S. at 446. However, CTB and SIC are variables
beyond the contemplation of Sony. SIC alone removes all legitimate time-shifting aspects of PIA
because once a program is recorded by one user, virtually all users have access. Regarding CTB,
the tedious aspects of commercial-skipping discussed by the court have vanished with PIA. In
removing any and all reason for Lambert to even create original works, PIA’s possible timeshifting aspects are nullified. Not only did Petitioners receive notice of the infringing activities of
PIA and its users, but PIA is not a staple article of commerce, and therefore requisite knowledge
exists for contributory copyright infringement.
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B.
Petitioners are responsible for material contribution of copyright
infringement because they facilitate services that allow copyright infringers
to easily send copyrighted material.
The infringing activities of PIA users was induced, caused, and materially contributed to
by Petitioners. One who induces, causes or materially contributes to infringing conduct of
another is liable for contributory copyright infringement. CoStar Group, Inc. v. LoopNet, Inc.,
373 F.3d 544, 549-50 (4th Cir. 2004). “Two types of activities that lead to contributory liability
are: (i) personal conduct that encourages or assists the infringement; and (ii) provision of
machinery or goods that facilitate the infringement.” Bender, 158 F.3d at 706. It is obvious that
Fringe’s personal conduct in recording and sending Lambert’s exclusively copyrighted show,
Day Court, as well her encouragement on television as to the infringing features of the PIA
encourages copyright infringement. Lambert, 644 F.3d at 301-03. Further, the PIA itself
facilitates copyright infringement with its recording and distribution capabilities.
1. But for the existence of PIA, users would be unable to reproduce and
distribute Lambert’s exclusively copyrighted shows with such ease and,
therefore, Petitioners’ conduct rises to the level of contributory copyright
infringement.
The existence of PIA allows users to massively record and distribute Lambert’s
copyrighted programs. “If an entity actively rather than passively provides the environment for
the infringing activity, the entity materially contributes to the infringing activity.” Lambert, 644
F.3d at 306 citing Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996).
Material contribution to copyright infringement occurs when, in the absence of the defendant’s
instrumentality, the infringing activity would not have taken place. Fonovisa, 76 F.3d at 264. In
A&M Records, the court noted: “Relying on Fonovisa, the district court concluded that ‘without
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the support service defendant provides, Napster could not find and download the music they
want with the ease which defendant boasts.” A&M Records, 239 F.3d at 1022. The court found
that Napster provides “sites and facilities” for direct infringement. Id.
Petitioners provide the sites and facilities, like Napster, for the direct infringement of
Lambert’s copyrights. With a PIA user’s permission and for a subscription fee, OTF facilitates a
service providing an individualized daily viewing guide displaying programs available for
sending and receiving. Lambert, 644 F.3d at 303. But for the features of PIA, users would be
unable to widely distribute Lambert’s exclusive copyrighted programs via SIC. Further, the
CTB feature of the PIA allows users to easily skip commercials. OTF’s website provides
directions for such features. Id. at 302, 303. Wide scale use of the PIA is fostered through OTF’s
website and advertising as well as the daily viewing guide they maintain for users. As such,
Petitioners’ actions rise to the level of material contribution to direct copyright infringement.
2.
In supporting and assisting users in with the distribution and
commercial-skipping features, Petitioners’ conduct rises to the level of
contributory copyright infringement.
Petitioners actively promote and encourage the infringing capabilities of their product,
PIA. Encouraging users to infringe upon exclusive copyrighted works via advertising enhances
the likelihood of the promoter’s liability. Sony, 464 U.S. at 438. In that case, Sony’s advertising
was silent on the subject of possible copyright infringement. Id. at 426. In fact, Sony’s Betamax
instructions warned against the possible infringing nature of recording copyrighted works. Id. A
website that provides instruction as to illegal copying of material is, in essence, paramount to
contributory infringement. In re Aimster, 334 F.3d at 651.
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Unlike Sony, Petitioners actively advertise the infringing capabilities of PIA. OTF has a
website provided for the sole purpose of advancing the sale and understanding of PIA. The
website explains the CTB and SIC features, which make PIA so popular. Lambert, 644 F.3d at
302. On the PIA website, phone numbers are provided to customers who require assistance with
CTB and SIC. Id. PIA packaging includes instructions on how to use the CTB and SIC features.
Id. Furthermore, internet advertisements highlight the PIA features. Id. at 303. According to
Fringe on television, “all Americans have a duty and a right to submerge themselves in the art of
commercial-free television.” Id. at 302. This is similar to the defendants of the In re Aimster case
in that Petitioners are advertising via website to encourage and induce the obvious non-legitimate
and objectionable CTB and SIC features. Since Petitioners actively support and assist direct
copyright infringement, their conduct has materially contributed to the infringement.
CONCLUSION
Respondent Lambert Studios requests that this Honorable Court affirm the decision of
Court of Appeals for the Fourteenth Circuit and hold that Petitioner Fringe directly infringed
Lambert’s exclusive rights in Day Court. Lambert Studios further requests that this Court affirm
the Fourteenth Circuit and hold that Petitioners contributorily infringed Lambert’s copyright in
Day Court.
Respectfully submitted this 20th day of October, 2004
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Counsel for Respondent
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