Thursday, October 1, 2009

Catch-22: Copyright Dispute Has the Potential to Create New Law

A unique copyright lawsuit has recently been filed in the U.S. District Court of the Southern District of Texas, Houston Division. The lawsuit was filed by Elaine Scott, an author of children's books against, an internet based social publishing company. Ms. Scott claims that is violating copyright law because it is using unauthorized "digital fingerprints" of her book "Stocks and Bonds, Profits and Losses: A Quick Look at Financial Markets" ("Stocks and Bonds") in a filtering system to ensure that her book does not appear again on its website.

In July 2009, Ms. Scott visited and found that her book "Stocks and Bonds" was illegally uploaded to the site. Subsequently, a letter was sent to notifying the company about the copyright violation. removed the copyrighted work and left "digital fingerprints" of the work in its filtering system to ensure that the the copyrighted work did not appear again on its website. However, before including the "digital fingerprints" of the copyrighted work in its filtering system, it appears that did not obtain a license from Ms. Scott permitting it to utilize her work in this manner.

Generally, before a copyrighted work can be utilized a license from the copyright holder must be obtained. For example, when The Sopranos ended a couple years ago, the show's creator had to obtain permission from the band Journey so the song "Don't Stop Believin" could be played in the background of the last scene of the series finale. Sometimes, copyrighted material may be used without obtaining permission due to the Fair Use Doctrine. In determining whether a utilization falls under the Fair Use Doctrine there are 4 factors that the courts consider.

This lawsuit brings up a very interesting Catch-22 for companies trying to abide by copyright law after they are notified of a copyright violation. If a company does not take protective measures to ensure that it is following copyright law, the company may be held liable for copyright infringement. However,'s solution to avoid violating copyright law appears to include a filtering system that may violate copyright law by utilizing part of the author's work without permission. The courts will have to decide if utilizing part ("digital fingerprints") of a copyrighted work without an author's permission in a filtering system to stop others from committing copyright infringement falls under the Fair Use Doctrine.

In my opinion, and others in's space should be denied the ability to claim Fair Use because is in the commercial business of publishing content and its proprietary filtering system may be licensed out to other companies confronting the same dilemma as Therefore, should be forced to obtain a license from Ms. Scott. However, since appears to be trying to protect Ms. Scott's published work, Ms. Scott should not be allowed to obtain an unreasonable license fee. If would have approached Ms. Scott about obtaining a license before including her work without her permission in its filtering system, I believe Ms. Scott would have granted the required license at a reasonable rate. I learned a long time ago that being polite and making a fair offer resolves most legal matters.

Copyright 2009 by the Law Office of Bradley S. Shear, LLC. All rights reserved.