An Infinity War: Will the Latest Marvel Lawsuits Finally Declare a Winner in the Battle of Copyright Termination Tests?

By Gracie Loesser

The Marvel Cinematic Universe is the highest-grossing franchise of all time, with a total worldwide gross profit of over $22 billion, and the demand for superhero content shows no signs of stopping.

So, it should not be a surprise that the original creators of characters like Iron Man, Spider-Man, and Dr. Strange are hoping to share in the success. Just this year, five former Marvel artists and their heirs have issued copyright termination notices, asserting their right to share in the Marvel Universe profits. In response, Disney-owned Marvel has sued, effectively asking the court to dismiss the creators’ ownership rights.

Whether the original Marvel artists will prevail depends on whether the creations are considered “works made for hire” under the federal Copyright Act. But how that will be determined is surprisingly unclear.

In 1976, Congress amended the Copyright Act addressing concerns that artists were losing valuable ownership rights through coercive agreements. The new Act incorporated a termination provision, which gave artists the right to reclaim any copyright interest they previously transferred regardless of any preexisting contract. Notably, the termination provision excluded any “work[s] made for hire,” with the rationale that an employer is considered the author and original copyright holder of any work made by an employee within the scope of their job. The issue is the law does not provide a definition of an “employer” and a “work made for hire” within the scope of the Act.

Courts have since stepped in to fill this gap. The Second Circuit developed the “instance and expense” test, which states that a work is made for hire “when the employer induces the creation of the work and has the right to direct and supervise the manner in which the work is carried out.” Under this inquiry, an independent contractor would be considered the author and original copyright holder of her work. However, the independent contractor could impliedly transfer her rights to the hiring party if certain conditions were met. The Second Circuit’s test proved popular, with the Fourth and Seventh Circuits adopting the approach.

This approach soon faced an existential challenge. In 1989, the Supreme Court attacked the appropriateness of the “instance and expense” test in CCNV v. Reid. The Court held that the Second Circuit’s analysis was not “consistent with the text of the Act,” stating the structure of Copyright Act § 101 necessitated two separate analyses: one for employees and one for independent contractors. This finding directly challenged the Second Circuit’s single test based on project control. To determine whether an artist should be classified as an employee or an independent contractor, the Supreme Court identified thirteen non-exhaustive factors rooted in the common law of agency to guide the analysis.

Although the Supreme Court’s ruling appeared to rebuke the “instance and expense” analysis, the Second Circuit continued to apply the test in the years following the Reid decision. In Marvel Characters, Inc. v. Kirby, the Second Circuit was asked to review the district court’s grant of summary judgment in favor of Marvel. The lower court had applied the “instance and expense” test and determined that former Marvel artist Jack Kirby’s drawings were works made for hire, thus invalidating the termination notices issued by his heirs. Upon review, the Second Circuit affirmed the district court’s use of the “instance and expense” test, acknowledging and simultaneously dismissing the Supreme Court’s criticism in a brief footnote. Kirby appealed the decision hoping that the Supreme Court would grant certiorari to once and for all dismiss the “instance and expense” test. Kirby’s cause was given further support when the former director of the U.S. Patent and Trademark Office, Bruce Lehman, filed a brief urging the Court to use this opportunity to reject the “instance and expense” analysis as improper. Unfortunately, Marvel settled the case, just as it looked like the Kirby campaign might succeed in convincing the Supreme Court to grant certiorari.

Since the ruling in Kirby, the Second Circuit’s rulings have only added to the confusion. In Horror Inc v. Miller, the court was again asked to analyze the validity of an author’s copyright termination. In that case, writer Victor Miller contended he was an independent contractor under the Copyright Act when he created the original Friday the 13th screenplay, making his termination notice enforceable. Surprisingly, the Second Circuit agreed, relying on the Supreme Court’s thirteen Reid factors in determining that Miller’s screenplay was not a work made for hire. Despite this major shift from the Circuit’s previous defense of their “instance and expense” approach, the court did not acknowledge the change or explain their reasoning.

Now, the Second Circuit is faced with five potential Marvel copyright termination cases, all of which closely resemble the facts in Kirby. Assuming the Second Circuit continues to apply the Reid analysis as it did in Miller, the outcome will likely be in the artists’ favor.

However, that assumes the Circuit maintains this approach. Based on the content of at least one complaint, Marvel’s counsel may try to convince the court to reverse course. The filed claims against the company’s former artists notably include separate considerations of “instance” and “expense.” Given the Circuit’s inconsistent rulings in the last decade, the outcome of these latest cases is less than certain, making this an important opportunity for the court to clarify its stance. Nevertheless, even if the Second Circuit decides to abandon the “instance and expense” test, whether the Fourth and Seventh Circuits will make similar changes to their analysis remains to be seen.

Is Code Killing Copyright?

By: Katherine Czubakowski

Early last month, the Supreme Court released its long-awaited decision in Google LLC v. Oracle America Inc.  The Court found that Google’s unauthorized copying of 11,500 lines of code from Oracle’s Java SE API was fair use because Google took only as much code as it needed to create a new and transformative program. While some argue that this outcome protects fundamental aspects of how code is created and the technology industry, others see this decision as a significant blow to copyright protections. This disagreement comes down to a fundamental question the Supreme Court seems to have side-stepped in this case: whether code should be protected under copyright at all.

An API, or Application Programming Interface, is a list of actions one can take regarding specific software and how one would take those actions. For example, if gardening were a software, you could choose the action you want to perform (dig, e.g.) and how you want to perform that action (with a shovel, a hoe, a pickaxe, your hands, etc.). The Java API in question contains a basic list of common actions (sorting a list, for example) and how those actions are accomplished (alphabetically, numerically, etc.). When Google began developing the Android software used in their smartphones, they wrote their own code to tell the program what to do and how to do it, but copied the declaring code—the part of the program which matches the name assigned to each task with the program necessary to perform the task—from 37 of Java’s listed tasks. By doing so, the programmers working on the Android software were able to continue using the commands with which they were familiar, such as PrintLn() (which tells the program to print the specified text on the user’s screen) and LocalDate.now() (which tells the computer to display the user’s current date and time), in their own code, but these commands relied on Google’s newly written code to perform the task.

In determining that Google was legally allowed to copy this code, the Court relied on the doctrine of fair use.  Although copyright owners generally hold exclusive rights to create derivative works, which are new works based on their own pre-existing work, fair use is a legal exemption which allows someone to use copyright protected work without the author’s permission in certain circumstances. Courts consider fair use on a case-by-case basis and analyze four different aspects of the otherwise-infringing use: its purpose and character, the nature of the copyrighted work, the amount and substantiality of the portion used, and the effect on the potential market for the copyrighted work.  In its recent cases regarding fair use, the Court has created a sub-factor that it considers under the purpose and character of the use: transformativeness. A work is considered transformative when it uses the original copyrighted work in an unexpected way or in a way which alters the original meaning or message.  Transformativeness weighs strongly in favor of fair use because it encourages creativity and furthering of the arts.  This sub-factor frequently affects all four factors in the fair use analysis and can sometimes even outweigh the importance of the other three factors. It can often be difficult to tell if a work used in a transformative way is a derivative work or if it falls under the fair use exception.

In Google LLC v. Oracle America Inc. the Court’s decision hinged on its finding that Google’s use was transformative. The Court first analyzed the nature of the work and found that APIs were fundamentally different than other types of code. Because the declaring code fuses together the uncopyrightable idea of how the code is organized with the copyrightable code which tells the computer how to perform a function, the Court saw the copied code as valuable only as a result of the programmer’s investment in learning it. Since the copied code did not hold independent value, the Court felt that applying fair use in this circumstance would not undermine general copyright protection for other programs. The Court then turned to the purpose and character of the use, which is where they discussed the work’s transformative nature. It found that Google’s purpose in using the copied code was “to create a different task-related system for a different computing environment” than the creators of Java had originally intended.  Google’s use of the code was part of the “creative progress” which the Court saw as copyright law’s objective, so they found that the use was transformative. The Court further found that, although Google copied “virtually all of the declaring code needed to call up hundreds of different tasks,” they copied a relatively small amount of the total API in question. Because this relatively small portion of the API was tied to a valid and transformative purpose, the Court felt that the third factor weighed in favor of fair use as well. Finally, the Court found that Android was not a market substitute for Java SE because the two products were substantially different. Weighing all these factors together, the Court found that because they only took as much as was necessary to allow their programmers to use “accrued talents to work in a new and transformative program,” Google’s “reimplementation of a user interface” was protected by the fair use doctrine.

The Court’s analysis and reliance on transformation in this case presents a danger to those seeking to copyright their code. This is because code is fundamentally different than many other works protected by copyright; it combines functionality with creative expression. Unlike traditionally copyrightable works, programs are usually created in a way which relies on previously created code to function. When writing new code, very few programmers actually write code which can interact directly with the computer. Instead, they use one of a number of programs which translate a more readable code, such as Java, into code which the computer can understand. Without being able to copy some fundamental aspects of the language, programmers would have to create a new language anytime they wanted to write new code. In practice, this means that many different programs with different purposes all rely on the same underlying program(s) to translate their code into a form the computer can understand. 

Although the Court likely reached the correct outcome in this case, the repercussions of its decision in other fields damages traditional copyright holder’s rights. The Court’s transformative analysis fails when applied in the context of programming because a program’s reliance on other code is a necessary aspect of its creation. Thousands of substantially different programs rely on the same underlying code in order to function. However, purely creative expression does not have this same reliance on preexisting works—as evidenced by Congress’s grant of derivative works rights to copyright holders. By trying to fit both pure creative expression and functional creative expression under the same body of law, the Court has blurred the lines between what is transformative and what is derivative and has put at risk the exclusive rights guaranteed to copyright owners of traditionally copyrightable works.

Expanding the Fringe of Patent Infringement

screen-shot-2016-10-18-at-10-19-49-amBy Sebastian Stock

In Akamai Technologies, Inc. v. Limelight Networks, the Federal Circuit broadened potential patent infringement claims by no longer requiring a defendant perform all the steps of a patented method before direct infringement occurs. As the dust settles from Akamai, should courts expect an influx of patent infringement suits.

Akamai Technologies, Inc. began in 2006 when Akamai Technologies, Inc. (“Akamai”) sued Limelight Networks, Inc. (“Limelight”), claiming infringement of claims on its patent related to its content delivery network (“CDN”). A CDN is a platform of proxy servers designed to directly deliver end-user internet content. CDN’s are widely used – they carry nearly half of the world’s internet traffic.

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I ATEN’T DEAD: The Continuing Trademark Saga of B&B Hardware v. Hargis Industries

Trademakr.pngBy Gwen Wei

Does anybody remember how B&B Hardware v. Hargis Industries started anymore?

B&B Hardware is a labyrinthine case grown out of simple roots: in 1993, B&B Hardware (“B&B”) trademarked “Sealtight”. Hargis Industries (“Hargis”) applied for a trademark on “Sealtite” in 1996. When B&B opposed Hargis’s application, Hargis sought to have B&B’s trademark cancelled. B&B retorted with a suit for infringement. This eventually led to a brief wrangle before the Trademark Trial and Appeal Board (“TTAB”), where the board found there was a likelihood of confusion between the two marks. But retelling the full twenty years of its litigious history, as Justice Alito later remarked, could fill a long, unhappy book.  Over the decades, B&B Hardware has devolved into a slapfest as the case was dismissed and refiled and remanded, surging all the way to the Supreme Court and back again. The case’s significance no longer lies in its eventual final verdict—whether B&B or Hargis gets to seal the deal, as it were—but in the precedent that it sets.

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Screenshot Through The Heart, And Richard Prince’s To Blame

Rasta.jpgBy Gwen Wei

Earlier this year, three artists separately sued appropriation careerist Richard Prince for copyright infringement. The works in question? Photographs with valid and registered copyrights—each framed in an Instagram screenshot by Prince.

Sound familiar? The incidents seem to be an ugly throwback to 2015, when Prince took screenshots of multiple photographs from the Instagram account of pin-up brand Suicide Girls, printed them, and sold each print for $90,000. But none of this is new ground for Prince. Such incidents define his forty-year career: rephotographing the photos of others, reprinting J. D. Salinger’s The Catcher in the Rye with his own name substituted for the author’s, or writing out lines out of joke books for display at art galleries.

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