e-Commerce Docket Sheet

The use of a two-second digital sample of a sound recording in the sound track of a motion picture may constitute copyright infringement. Bridgeport Music, Inc. v. Dimension Films, 383 F.3d 390 (6th Cir. 2004). The circuit court reversed the district court's ruling that the sampling did not constitute actionable infringement under either de minimis or substantial-similarity analysis. The court ruled that neither analysis was applicable to digital sampling of a sound recording, which violates the copyright holder's exclusive right to duplicate a sound recording under 17 U.S.C. Section 114(b). The court acknowledged the widespread practice of digital sampling in the rap music community, but concluded that requiring samplers to get a license would not stifle creativity because, among other reasons, artists wishing to incorporate a “riff” from another artist's work are “free to duplicate the sound of that 'riff' in the studio.”

The reverse engineering of a proprietary electronic game server, contrary to the provisions of a software end-user license agreement and online terms of use agreement, violates the anticircumvention provisions of the Digital Millennium Copyright Act (DMCA). Davidson & Associates v. Internet Gateway, 2004 U.S. Dist. LEXIS 20369 (E.D.Mo. Sept. 30, 2004). The court noted that the “bnetd” game server and utilities developed and freely distributed by the defendants operated as “a functional alternative” to the online game service offered by the proprietary software developer. The court found that the bnetd game server and utilities circumvented the encryption technology that controlled access to the interactive playing mode of the proprietary game, and rejected the defendants' arguments that their activities constituted permissible fair use and reverse engineering. The court also found that the defendants waived their statutory fair-use rights when they assented to the proprietary developer's end-user license agreement and terms of use agreement.

A manufacturer of computerized voting technology “knowingly materially misrepresented” in a takedown notice sent to Internet service providers pursuant to the Digital Millennium Copyright Act (DMCA), in which the company alleged that its copyrights were infringed by publication of an e-mail archive pertaining to possible technical problems in its products. Online Policy Group v. Diebold, Inc., 2004 U.S. Dist. LEXIS 19697 (N.D. Cal. Sept. 30, 2004). The court ruled that the company was liable for damages and attorney fees under Section 512(f) of the DMCA, because “no reasonable copyright holder could have believed” that the fair-use defense did not apply to the e-mails discussing possible technical problems with the company's voting machines. The court rejected the respective parties' arguments on the standard for determining that a knowing, material misrepresentation under Section 512(f) occurred, concluding that the “misrepresentations were material in that they resulted in removal of the content from websites” and in the institution of an action for a declaratory judgment by the archive posters. The court also ruled that the DMCA pre-empted the posters' claims that the takedown notice interfered with their contractual relations with their ISPs.

The federal antibootlegging statute, 18 U.S.C. Sec. 2319A, is unconstitutional because it exceeds the limitations that the Copyright Clause imposes on the legislative authority of Congress. United States of America v. Martignon, 2004 U.S. Dist. LEXIS 19134 (S.D.N.Y. Sept. 24, 2004). The statute criminalizes the knowing fixation, transmission or distribution of the sounds or images of a live musical performance without the consent of the performers, for commercial advantage or private financial gain. The court held that because the statute afforded protection to unfixed live performances, and because the protection it afforded was perpetual, the statute exceeded the authority of Congress to protect the “writings” of artists for “limited times.”

Using a competitor's trademarks on a Web site and in metatags to advertise the sale of replacement parts for the competitor's lubricating system does not create a likelihood of confusion under the Lanham Act or New Jersey trademark law. Bijur Lubricating Corp. v. Devco, 332 F. Supp. 2d 722 (D.N.J. 2004). The court found no evidence the defendant intended to confuse the public or do anything other than inform the public concerning its replacement parts in using the competitor's trademarks. The court also held that the defendant's use of the competitor's trademarks was a “nominative fair use” that was not dilutive under federal or state law, because the defendant used the competitor's mark merely to describe its own product.

The inclusion on a Web site of links to other Web sites that solicit funds for social causes supports a finding that an advocate for social causes acted with a bad-faith intent to profit under the Anticybersquatting Consumer Protection Act (ACPA), even if the advocate made some noncommercial or fair use of the plaintiff's trademarks. Coca-Cola Co. v. Purdy, 382 F.3d 774 (8th Cir. 2004). The circuit court upheld the grant of injunctive relief against the defendant, ruling that nothing in the ACPA suggests that Congress intended to allow cybersquatters to evade the ACPA provisions concerning bad-faith intent to profit by “channeling profits to third parties.” The court also found that the defendant's bad-faith intent to profit was shown by his offer to exchange the domain names that included the mark of a national newspaper for space on the newspaper's editorial page.

A prior domain name owner's use of a domain name does not necessarily constitute prior use for purposes of establishing priority of trademark use by a transferee of the domain name. Pure Imagination, Inc. v. Pure Imagination Studios, Inc., 2004 U.S. Dist. LEXIS 19838 (N.D. Ill. Sept. 29, 2004). The court noted that it is well established that mere registration of a domain name does not constitute the use of the domain name as a trademark. The court also ruled that even if the original domain-name registrant used the domain name as a trademark, the subsequent owner of the domain name could not rely on the prior owner's use of the trademarked term, where there was no transfer of the good will associated with the trademark. The court found that the evidence established only that the domain name owner had acquired the domain name for consideration, and the domain name owner offered no evidence that the good will was transferred along with the domain name. The court held that the mere fact that both the parties that used the contested trademark did business on the Internet did not establish actual confusion, and that further factual analysis was required to determine the area and manner of concurrent use factor under the Lanham Act.

2-Second Digital Music Sample May
Violate Copyright

The use of a two-second digital sample of a sound recording in the sound track of a motion picture may constitute copyright infringement. Bridgeport Music, Inc. v. Dimension Films , 383 F.3d 390 (6th Cir. 2004). The circuit court reversed the district court's ruling that the sampling did not constitute actionable infringement under either de minimis or substantial-similarity analysis. The court ruled that neither analysis was applicable to digital sampling of a sound recording, which violates the copyright holder's exclusive right to duplicate a sound recording under 17 U.S.C. Section 114(b). The court acknowledged the widespread practice of digital sampling in the rap music community, but concluded that requiring samplers to get a license would not stifle creativity because, among other reasons, artists wishing to incorporate a “riff” from another artist's work are “free to duplicate the sound of that 'riff' in the studio.”

The reverse engineering of a proprietary electronic game server, contrary to the provisions of a software end-user license agreement and online terms of use agreement, violates the anticircumvention provisions of the Digital Millennium Copyright Act (DMCA). Davidson & Associates v. Internet Gateway, 2004 U.S. Dist. LEXIS 20369 (E.D.Mo. Sept. 30, 2004). The court noted that the “bnetd” game server and utilities developed and freely distributed by the defendants operated as “a functional alternative” to the online game service offered by the proprietary software developer. The court found that the bnetd game server and utilities circumvented the encryption technology that controlled access to the interactive playing mode of the proprietary game, and rejected the defendants' arguments that their activities constituted permissible fair use and reverse engineering. The court also found that the defendants waived their statutory fair-use rights when they assented to the proprietary developer's end-user license agreement and terms of use agreement.

A manufacturer of computerized voting technology “knowingly materially misrepresented” in a takedown notice sent to Internet service providers pursuant to the Digital Millennium Copyright Act (DMCA), in which the company alleged that its copyrights were infringed by publication of an e-mail archive pertaining to possible technical problems in its products. Online Policy Group v. Diebold, Inc ., 2004 U.S. Dist. LEXIS 19697 (N.D. Cal. Sept. 30, 2004). The court ruled that the company was liable for damages and attorney fees under Section 512(f) of the DMCA, because “no reasonable copyright holder could have believed” that the fair-use defense did not apply to the e-mails discussing possible technical problems with the company's voting machines. The court rejected the respective parties' arguments on the standard for determining that a knowing, material misrepresentation under Section 512(f) occurred, concluding that the “misrepresentations were material in that they resulted in removal of the content from websites” and in the institution of an action for a declaratory judgment by the archive posters. The court also ruled that the DMCA pre-empted the posters' claims that the takedown notice interfered with their contractual relations with their ISPs.

The federal antibootlegging statute, 18 U.S.C. Sec. 2319A, is unconstitutional because it exceeds the limitations that the Copyright Clause imposes on the legislative authority of Congress. United States of America v. Martignon, 2004 U.S. Dist. LEXIS 19134 (S.D.N.Y. Sept. 24, 2004). The statute criminalizes the knowing fixation, transmission or distribution of the sounds or images of a live musical performance without the consent of the performers, for commercial advantage or private financial gain. The court held that because the statute afforded protection to unfixed live performances, and because the protection it afforded was perpetual, the statute exceeded the authority of Congress to protect the “writings” of artists for “limited times.”

Using a competitor's trademarks on a Web site and in metatags to advertise the sale of replacement parts for the competitor's lubricating system does not create a likelihood of confusion under the Lanham Act or New Jersey trademark law. Bijur Lubricating Corp. v. Devco , 332 F. Supp. 2d 722 (D.N.J. 2004). The court found no evidence the defendant intended to confuse the public or do anything other than inform the public concerning its replacement parts in using the competitor's trademarks. The court also held that the defendant's use of the competitor's trademarks was a “nominative fair use” that was not dilutive under federal or state law, because the defendant used the competitor's mark merely to describe its own product.

The inclusion on a Web site of links to other Web sites that solicit funds for social causes supports a finding that an advocate for social causes acted with a bad-faith intent to profit under the Anticybersquatting Consumer Protection Act (ACPA), even if the advocate made some noncommercial or fair use of the plaintiff's trademarks. Coca-Cola Co. v. Purdy , 382 F.3d 774 (8th Cir. 2004). The circuit court upheld the grant of injunctive relief against the defendant, ruling that nothing in the ACPA suggests that Congress intended to allow cybersquatters to evade the ACPA provisions concerning bad-faith intent to profit by “channeling profits to third parties.” The court also found that the defendant's bad-faith intent to profit was shown by his offer to exchange the domain names that included the mark of a national newspaper for space on the newspaper's editorial page.

A prior domain name owner's use of a domain name does not necessarily constitute prior use for purposes of establishing priority of trademark use by a transferee of the domain name. Pure Imagination, Inc. v. Pure Imagination Studios, Inc., 2004 U.S. Dist. LEXIS 19838 (N.D. Ill. Sept. 29, 2004). The court noted that it is well established that mere registration of a domain name does not constitute the use of the domain name as a trademark. The court also ruled that even if the original domain-name registrant used the domain name as a trademark, the subsequent owner of the domain name could not rely on the prior owner's use of the trademarked term, where there was no transfer of the good will associated with the trademark. The court found that the evidence established only that the domain name owner had acquired the domain name for consideration, and the domain name owner offered no evidence that the good will was transferred along with the domain name. The court held that the mere fact that both the parties that used the contested trademark did business on the Internet did not establish actual confusion, and that further factual analysis was required to determine the area and manner of concurrent use factor under the Lanham Act.