Virginia Business Litigation Lawyer Blog

"Grandma Got Run Over by a Reindeer" is one of the most popular holiday songs around and is played on radio stations across the country every Christmas season. It is also now the subject of contentious copyright litigation after a federal judge ruled recently that litigation over an allegedly unauthorized YouTube video containing audio of the song can continue despite the absence of a co-owner of the copyright.

Elmo Shropshire owns the copyright to the song along with Patsy Trigg d/b/a Kris Publishing. The copyright was registered with the U.S. Copyright Office on December 27, 1979. The defendant posted a video on YouTube--which has since been removed due to the pending litigation--which combined Christmas-related pictures with audio of a Canadian musical group, "The Irish Rovers," singing the Grandma song. Shropshire contacted the poster and requested that he either pay the licensing fee or immediately remove the video. The poster refused.

Shropshire filed a copyright infringement suit in federal court, but his first (amended) complaint was dismissed because, among other reasons, Shropshire did not name Trigg or Kris Publishing in the lawsuit. The court gave him permission to amend, however, and the second time around, Shropshire named Kris Publishing as a defendant, but Kris Published settled out and was promptly dismissed. The defendant then filed a motion to dismiss, claiming that Patsy Trigg d/b/a Kris Publishing was a necessary and indispensable party and thus the suit could not go forward without her. The Court disagreed.

In order to determine whether a party is "necessary" to the case under Federal Rule of Civil Procedure 19, the court held, courts must follow a three-pronged analysis. "First, the Court must determine whether an absent nonparty should be 'required to be joined if feasible' under Rule 19(a). . . .The Court 'must determine whether the absent party has a legally protected interest in the suit,' and if so, whether 'that interest will be impaired or impeded by the suit.'" Next, the Court has to make a determination about the feasibility of joining the absent party. The third and final step occurs only if joining the party is not feasible. In that case, the court must determine "whether in equity and good conscience, the action should proceed among the existing parties or should be dismissed."

The court ultimately found that Kris Publishing was not an "indispensable party" and allowed the suit to continue in its absence. The purpose of the joinder rule had already been satisfied by joining it to the case, despite the fact that it was later dismissed upon settlement.

It's clear that dances composed by choreographers can be subject to copyright as creative works, just like paintings or photographs. It's also clear that no matter how creative a football player's evasive "spin move" can be, neither he nor his team can copyright it so as to prevent others from using it without paying royalties. What about a series of yoga poses? Where does that fit into the world of copyright? Three cases now pending in the U.S. District Court for the Central District of California involve that question, and although the issue remains very much in dispute, the U.S. Copyright Office has taken the view that yoga exercises are more like athletic activities or health regimens, which cannot be copyrighted, and less like dance routines, which can be.

In the lawsuits, Bikram's Yoga College of India, based in California, and its founder, Bikram Choudhury, have sued three yoga providers for copyright and trademark infringement, contending that they have unlawfully used the specific movements and poses of Choudhury's brand of yoga, known as Bikram Yoga. Bikram Yoga, performed for precisely 90 minutes in a room heated to 105 degrees Fahrenheit, has become quite popular in recent decades. Bikram Yoga includes 26 poses, two breathing exercises, and a carefully scripted dialogue.

Greg Gumucio is a defendant in one of the cases, along with the company he founded, New York City-based Yoga to the People. Gumucio is a former student of Choudhury. According to the complaint in that case, Choudhury "created an original work of authorship consisting of a series of instructions and commands that accompany, and correspond to, each poster of Bikram Yoga." This "original work is recited in a precise manner," according to the complaint, and the sequence of poses received protection from the U.S. Copyright Office on several occasions. Gumucio and the other yoga studio owners, Choudhury said, had infringed upon the copyrights.

Gumucio and his company replied that "Choudhury has no intellectual property rights in any method or posture," and that "the alleged 'Bikram methods' are utilitarian systems, incapable of copyright or trademark protection." Further, Gumucio replied, "there are no 'Bikram postures,' and each and every one of the yoga postures (or 'poses' or 'asanas') used in Bikram Yoga classes was developed and recorded hundreds, if not thousands, of years ago, and are in the public domain."

The defendants received very recent support from the Copyright Office. On December 9, 2011, Laura Lee Fischer, Acting Chief of the Performing Arts Division of the Copyright Office, wrote an email stating that "the Registration Program of the Copyright Office reviewed the legislative history relating to section 102(a) of the copyright law, and in conjunction with senior management, determined that exercises, including yoga exercises, do not constitute the subject matter that Congress intended to protect as choreography. Thus, we will not register such exercises (including yoga movements), whether described as exercises or as selections and ordering of movements."

This view represented an about-face from the office's previous position, which was that even if several yoga poses or exercises were in the public domain, the order in which they were to be executed could be copyrighted. Although the office's position is not binding on the U.S. District Court, it appears more likely now that yoga practitioners will be able to go ahead with their routines without fearing a copyright lawsuit.

United States District Judge John A. Gibney, Jr., sitting in Richmond, Virginia thought so little of the well-publicized shakedown tactics of the new wave of "copyright troll" lawyers--in this case practiced by Richmond lawyer Wayne O'Bryan--that he took it upon himself (without any Defendant asking for it) to issue a show-cause order against the lawyer demanding that he explain why his conduct should not be punished with Rule 11 sanctions.

The subject of the lawsuit at issue is Gangbang Virgins, a pornographic film allegedly downloaded by 85 unnamed "John Doe" defendants using popular peer-to-peer network BitTorrent. The Court initially granted the plaintiff permission to issue subpoenas to Internet Service Providers to learn the identities of the people behind the accused I.P. addresses. Later, however, Judge Gibney was apparently moved by some of the letters he received from the John Doe defendants. Several of the defendants, for example, notified the Court that the plaintiff made harassing telephone calls to them as soon as their identities were revealed, asking for a payment of $2,900 to end the litigation.

What the Court found particularly troubling was the lawyer's behavior after certain defendants filed motions challenging their inclusion in the case. Rather than proceed to argue the merits of the motions in court, he routinely dismissed them, apparently to ensure the Court did not actually rule on any of the motions so that he could continue to threaten others. That, the Court found, amounted to nothing more than a "shake down" and an abuse of the Court's resources.

"The plaintiffs have used the offices of the Court as a means to gain the Doe defendants' personal information and coerce payment from them," the judge wrote. "The plaintiffs seemingly have no interest in actually litigating the cases, but rather simply have used the Court and its subpoena powers to obtain sufficient information to shake down the John Does."

Accordingly, the judge issued an order asking the plaintiffs' lawyer to show cause why his behavior did not violate Rule 11 of the Federal Rules of Civil Procedure, which specifies that anyone filing a complaint in federal court certifies that the complaint "is not being presented for any improper purpose, such as to harass."

Judge Gibney also rejected the plaintiff's attempt to join 85 unrelated defendants to a single piece of litigation. Rule 20 of the Federal Rules of Civil Procedure permits a plaintiff to sue multiple defendants in a single proceeding if their behavior arises out of the same transaction, occurrence, or series of transactions or occurrences. Here, the only thing that the 85 had in common was that they all had allegedly downloaded the same movie using the same peer-to-peer network and the same protocol. Accordingly, Judge Gibney ordered that only the first defendant remain in this case, while all others be severed.

"The mere allegation that the defendants have used the same peer-to-peer network to copy and reproduce the Work - which occurred on different days and times over a span of three months - is insufficient to meet the standards of joinder set forth in Rule 20," the judge found.

Earlier this week, a federal judge sitting in Alexandria, Virginia, ordered the owner of a now-defunct chain of Northern Virginia video stores to pay $555,000 in damages for willful violations of U.S. copyright law after he rented and sold unauthorized copies of copyrighted Korean-language DVDs and videos to customers. The individual in question, Young Min Ro, did not even attend his own trial, though he was represented by a lawyer.

The U.S.-based affiliates of the three largest television broadcasting corporations in South Korea sued Mr. Ro and other defendants for willful copyright infringement in United States District Court for the Eastern District of Virginia. They alleged and proved at a bench trial that Ro made illegal copies of their TV programs and continued to rent and sell copies of the programs to his customers even after his licensing agreement ended and he was no longer paying monthly fees to the broadcast companies. In a July 26, 2011, ruling, Judge Leonie M. Brinkema found that the evidence showed not only that Ro violated copyright law but that he did so willfully. Willful copyright violators are subject to heightened damages under a provision of U.S. copyright law. (See 17 U.S.C. 504(c)(2)).

The plaintiffs had chosen to seek statutory damages - those imposed at the judge's discretion within certain statutory limits - rather than precise economic damages based on measures such as the defendant's profits from the violations or the licensing fees that they did not pay. For damages purposes, the plaintiffs chose to focus on 37 specific instances of copyright infringement for which the judge had already found the defendants liable.

In determining the monetary damages for these 37 violations, Judge Brinkema noted that under copyright law, each violation results in a statutory damage award of at least $750, and in the case of a willful violation, as much as $150,000 per violation is possible. The judge used her discretion to award $15,000 per violation, for a total damage award of $555,000.

Judge Brinkema explained that the exact amount of damages is up to her "discretion and sense of justice" under case law and that the damages are intended to serve the purposes both of compensating the plaintiffs and deterring future violations. She reasoned that the damages should amount to at least $154,895 (the amount of the unpaid licensing fees) and should also include disgorgement of the illegally obtained profits. This figure was difficult to calculate since the video stores' records were incomplete but could be as high as $225,500. She noted that the actual economic damages should be only a "floor" for the recovery.

Another relevant factor was that in the past, Ro had been ordered to pay $307,500 for copyright violations in a similar case, as well as being sentenced to two years' probation, 60 days of home confinement, 200 hours of community service, and a $1,000 fine - and that these measures had apparently had no impact on his behavior. Those facts, the judge wrote, justify "a heightened damages award of significantly more than $307,500.00, in the hopes that this time, Ro might finally get the message." This amount, she said, was "reasonable and appropriate given the willful and repeated nature of the defendants' violations."

Boston-area illustrator Jayme Gordon has filed a copyright infringement lawsuit in federal court in Massachusetts, alleging that DreamWorks stole his idea. The intellectual property lawyers who filed the complaint against DreamWorks point out a number of striking similarities between DreamWorks' chubby, fighting panda and a panda drawn and copyrighted years ago by the plaintiff. The attorneys write that DreamWorks' "Kung Fu Panda" and "Secrets of the Furious Five," a short animated direct-to-video film, both "feature characters, character depictions, character personality traits, illustrations, expression, settings, story elements, plot and sequences of events that are unlawful copies and derivatives of the copyrightable elements embodied in Gordon's Kung Fu Panda Power Work."

To prove copyright infringement, it's not enough to merely show that two works are very similar. The plaintiff will need to show not only substantial similarity between the copyrighted work and the alleged infringing work, but that DreamWorks, the alleged infringer, had access to the plaintiff's copyrighted material. In this case, Mr. Gordon specifies exactly who at DreamWorks he believes had access to his panda illustrations at the time that Kung Fu Panda was being developed, and how they may have gotten into those executives' hands.

Kung Fu Panda, released in 2008, features an overweight, food-loving panda named Po (voiced by Jack Black) who is trained in the martial arts by a small red panda named Master Shifu (voiced by Dustin Hoffman). The film grossed more than $630 million worldwide, and a sequel is coming out in May. Mr. Gordon claims that he first came up with the idea of a rotund Kung-Fu-fighting giant panda named Kidd who loves to eat Chinese food and who learns the martial arts from a small red panda named Redd. His copyright attorneys write in the complaint that Gordon had a collaborator create sketches of these characters in the 1990s and that around the same time, he put the sketches on clothing that he sold in the Boston area. Gordon also alleges that he sent a portfolio of his work featuring these characters and others to several studios, including DreamWorks, but received a letter of rejection in 1999.

Gordon is seeking an unspecified amount of damages for copyright infringement as well as an author credit for all the "Kung Fu Panda" films. DreamWorks hasn't yet responded to the complaint and has declined comment. This will be an interesting case to follow.

Recovering damages for copyright infringement may be difficult in situations where the infringing party is "dummy" or "shell" corporation with no assets that can be used to satisfy a judgment. Sometimes, however, there may be a parent corporation or other entity that may be held liable on a theory of "vicarious liability." As demonstrated by a recent decision of Judge Cacheris of the District Court for the Eastern District of Virginia, this doctrine may be utilized to pursue a contractor for the infringing activities of its subcontractor, even if the contractor knows nothing about the alleged infringement.

In Softech Worldwide, LLC v. Internet Technology Broadcasting Corp., Fedstore Corporation entered into a contract with the United States Department of Veterans Affairs (the "VA") to develop various software, including software relating to the Digital-Media-Architecture ("DMA") Pilot Project--a platform for scaling electronic media to various electronic devices. Fedstore subcontracted the work to Internet Technology Broadcasting Corporation ("ITBC"), who in turn hired the Plaintiff, Softech Worldwide, LLC, to perform various software services under the VA contract. Softech claims it performed these services from 2002 until early 2010, and that in early 2010, ITBC stopped making regular payments. Shortly thereafter, Softech claims it delivered the DMA source code and other proprietary information to ITBC at its request, and that ITBC refused to return the materials while continuing to use, maintain, and update Softech's products.

Softech sued both ITBC and Fedstore for copyright infringement and violation of Virginia's Uniform Trade Secrets Act. Fedstore moved to dismiss the case for failure to state a claim. Fedstore's position was essentially that the claims pertained to actions allegedly taken by ITBC, not by Fedstore. Softech responded that Fedstore should be held responsible under theories of contributory liability and vicarious liability.

Normally, to state a claim for copyright infringement, a plaintiff must allege both (1) ownership of a valid copyright and (2) copying of the original elements of the material by the defendant. However, even if a defendant does not itself copy the material, a defendant may be found liable for "contributory infringement" where it "with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another." CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 550 (4th Cir. 2004).

The Federal Rules permit knowledge of a defendant to be pled generally, and it is sufficient to allege that the defendant had reason to know. Here, although Softech did allege in its complaint that Fedstore infringed its copyrights "with full knowledge of Softech's rights," other allegations in the complaint (which must be accepted as true when ruling on a motion to dismiss) were that ITBC represented to the world--including Fedstore--that ITBC, and not Softech, possessed the copyright to the software. Therefore, the factual allegations were insufficient to establish knowledge of infringement and therefore insufficient to establish contributory copyright infringement.

The question then became whether Fedstore might be held liable on a theory of vicarious liability. To establish vicarious liability, a copyright owner must demonstrate that the vicarious infringer possessed: (1) the right and ability to supervise the infringing activity; and (2) an obvious and direct financial interest in the exploited copyrighted materials. "[L]ack of knowledge that the primary actor is actually engaged in infringing activity is not a defense where both elements are satisfied." EMI April Music, Inc. v. White, 618 F. Supp. 2d 497, 507 (E.D. Va. 2009). The court found that Softech did plead vicarious liability adequately. Softech alleged that Fedstore was a general contractor, which gave it the right and ability to supervise the infringing activities of ITBC, its subcontractor. Softech also alleged that Fedstore sought to sell the allegedly copyrighted software, which demonstrated a direct financial interest. Therefore, the court denied the motion to dismiss the copyright infringement claims, but granted dismissal of the trade-secret misappropriation claim on the ground that Softech failed to plead the requisite knowledge.

Architectural drawings are not entitled to a great deal of protection under the United States copyright laws, but to the extent a drawing contains a creative, original combination or arrangement of spaces and design elements, the work will be entitled to some level of copyright protection against acts of infringement.

In a recent Virginia case, Commonwealth Architects sued Rule Joy Trammell + Rubio, LLC ("Rule Joy") in the Eastern District of Virginia, claiming that Rule Joy infringed its copyright in certain architectural drawings by scanning them to PDF format. Rule Joy moved for summary judgment, taking the position that Commonwealth Architects did own any valid copyright in the architectural drawings and that, even if it did, Rule Joy did not copy any protected elements of the drawings. Judge Henry E. Hudson, relying primarily on Intervest Constr., Inc. v. Canterbury Estate Homes, Inc., 554 F.3d 914 (11th Cir. 2008), held that Commonwealth Architects owned "a thin, but valid, copyright" in its architectural drawings, and denied Rule Joy's motion.

Under the Copyright Act, protected works of authorship include, among other things, "architectural works" under 17 U.S.C. § 102(a)(8). Architectural works are defined as "the design of a building as embodied in any tangible medium of expression, including a building, architectural plans or drawings. The work includes the overall form as well as the arrangement and composition of spaces and elements in the design, but does not include individual standard features," such as common windows or doors or standard space configurations. The court noted that while individual standard features are not copyrightable, an architect's original combination or arrangement of such elements involves a degree of creativity and may very well be copyrightable. Still, the court compared the copyright protection affordable to architectural works to "compilations" and described the level of protection as "necessarily thin."

The court treated the architectural drawings at issue as "derivative works" because they adapted and transformed preexisting hotel drawings into into a "new" design that added apartment living and retail space while retaining the look and feel of the original. Derivative works, like architectural works in general, receive only thin protection in that only the original material contributed by the new author receives copyright protection.

This thin level of protection, however, was sufficient to enable Commonwealth Architects to survive summary judgment, as a reasonable jury could find that Rule Joy's scanning of the drawings to PDF constituted infringement of copyright. The court noted that while much of the drawings may be undeserving of protection, Rule Joy failed to demonstrate, as a matter of law, that every single design choice was unprotectable. "Commonwealth's drawings contain protected expression, albeit thin and constrained," the court held.

The Internet has been a boon to business. It brought local economies into the global market, cut down on communications costs, and made accessible information that was once only available through painstaking research. That is not to say, however, that the technology has not had its drawbacks. Towards the end of the 1990's, peer-to-peer file sharing websites became a haven for piracy of software, music, and movies. At first, those perpetrating these crimes were only a small segment of society, but gradually the practice became more widely accepted and piracy became prevalent in nearly every demographic. Various industries took notice and scrambled to fight back. Many are familiar with the Recording Industry Association of America's (RIAA) resort to the courts to sue and force settlements with those who share music over the Internet. While the RIAA pioneered this strategy, many companies are now following suit by filing suit. One such case was filed recently by Saregama India, Ltd., the biggest recording company in India, in the United States District Court for the Eastern District of Virginia.

Saregama discovered that many of its songs, popular both in India and among the Indian population in the United States, are being made available as ringtones on a website called Dishant.com. Saregama alleges that Dishant.com and its owners, Dishant Shah and Meeta Shah, violated Saregama's copyrights because they never bought the rights to these songs nor received approval from Saregama to share the songs as ringtones. Further, Saregama claims that Dishant.com displayed Saregama logos next to the titles of the songs, which would be a trademark violation.

Under the Copyright Act, the right to distribute copies of copyrighted work, or to prepare derivative works based on the copyrighted work, belongs solely to the copyright owner. Under the Act, if Saregama can prove that the materials provided by Dishant.com are identical to or substantially identical to any property owned by Saregama, and that Dishant.com provided those materials without permission, then Saregama's burden will be met. The consequences for a copyright violation can be substantial. If Saregama prevails, it may be entitled to recover any profits Dishant.com made from the use of the songs (or statutory damages up to $150,000 if the infringement was willful), plus reimbursement of its attorneys' fees.

The trademark aspect of Saregama's suit is based on the Lanham Act, the primary source of federal trademark law in the United States. The use of another's trademark in connection with the sale of a product constitutes infringement if it is likely to cause consumer confusion as to the source of the product or as to the sponsorship or approval of the product. In deciding whether consumers are likely to be confused, courts will typically look to a number of factors, including: (1) the strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the similarity of marketing channels used; (6) the degree of caution exercised by the typical purchaser; and (7) the defendant's intent. Trademark violations can be costly as well. Under 15 U.S.C. 1117(a), a successful plaintiff may be entitled to defendant's profits, damages sustained by the plaintiff, and reimbursement of the costs of the action (including reasonable attorneys' fees in "exceptional cases"). Damages may be trebled upon showing of bad faith.

If you own rights to a trademark or copyright that is being infringed by another, don't wait for an industry trade group to bring legal action on your behalf. Consult an intellectual property attorney and find out whether action is needed to protect your business assets.