As a true geek, Albert Einstein as always been one of my inspirations.  What better way to inspire the artists and creators among us than to let my idol do the speaking.

In 1982, a physicist at the University of Paris, Alain Aspect discovered that when two subatomic particles become entangled on some cosmic level, they remain connected and are able to instantaneously “communicate” with each other regardless of the distance separating them. Actions taken by, or with regard to, one particle affect the other particle, I.e., if one particles spins, so does the other. This occurs regardless of whether they are 10 feet or 10 billion miles apart. Einstein found this discovery to be amazing. By some inexplicable force, each particle always seems to know what the other is doing and reacts accordingly. The mystery of this quantum physics phenomenon is that it violated Einstein’s long-held scientific tenet that the speed of sound, I.e., communications, cannot travel faster than the speed of light. Since traveling faster than the speed of light is tantamount to breaking the “time barrier,” this daunting prospect of entangled particles has caused some physicists to create elaborate circumventions in attempts to try and explain away Aspect’s findings. But it has inspired others to offer evenquantumentanglement more radical explanations for the existing facts. Einstein was so enamored with his initial observations about such quantum entanglements that he described them as “spooky action at a distance.”  Perhaps this is the kernel of inspiration for Einstein’s some of the following quotes which offer the creative and entrepreneurial spirits among us some guidance:

1.  Become Entangled. 

“Every one sits in the prison of his own ideas. A human being is a part of the whole called by us “Universe,” a part limited in time and space. He experiences himself, his thoughts and feelings as some thing separated from the rest. A kind of optical delusion of his consciousness. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest to us. Our task must be to free ourselves from this prison by widening our circle of compassion to embrace all living creatures and the whole of nature in its beauty.”

Like the subatomic particles that seem inextricably connected, in this thought Einstein informs use that we are an intricate part of the universal whole.  More than every before, most people in our individualist, self-interested society believe, as Einstein describes here, that we are separate “islands unto ourselves.”  He describes this state as a “prison.”  Instead, we are encouraged to “become entangled” with the universe and “embrace all living creatures.”  While there is creative value to individual self-reflection, the most spontaneous creativity often happens when we collaborate and involve others in the flow of nature’s beauty.  So, become entangled and “widen [y]our circle of compassion.”

2.  Embrace Mystery.

“The most beautiful thing we can experience is the mysterious. It is the source of all true art and science.”

Einstein must of had quantum entanglement in mind when he made this observation that mystery is the most beautiful experience we can have.  One only has to observe a toddler for a brief period of time to realize that for him or her, the whole world is new, is a mystery.  As we grow into adults, we often lose the ability to view the world through the wonderous eyes of a toddler.  We can become weary from life’s constant barrage of obstacles and grow embittered and cynical.  But Einstein suggests that the artists and scientists among embrace that childlike feeling of wonderment as the source of our inspiration.  He reminds us that art and science arises from new, mysterious ideas, a suggestion that our new, cynical world will tell you is false.  Reject the trend that says to you that there are no new ideas and that everything is derivative, and embrace the mysterious.

3.  A Simple Life is a Happy Life.

“A table, a chair, a bowl of fruit and a violin; what else does a man need to be happy?”

Our senses are bombarded on a daily basis with a barrage of information and sensory input.  We live is a disposal world where everything we own can be replaced through Amazon through a one-touch purchase and arrive at our doorstep the next day, or the same day in some instances.  We can now select what we want to eat for the week in an app and drive by the grocery store where its waiting to be delivered to our vehicle.  Einstein suggest that the more complex our life becomes, the more distracted and, perhaps, less happy we become.  What could be a simpler happiness than picking up your instrument, sitting in your favorite chair and immersing yourself in music as you munch on a peach!  Uncomplicate your life and your creativity will flourish.

4.  Envision the Future.

“Imagination is everything. It is the preview of life’s coming attractions. Imagination is more important than knowledge.  For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.”

This is one of Einstein’s most published and well-known quotes: “Imagination is more important than knowledge.”  Of course, he didn’t mean to discredit education, which is why the introductory sentence to that famous quote leads to its understanding.  According to Einstein, imagination is a glimpse into the future, “life’s coming attraction.”  In the “incubator” world, we often call this imagination a “disruptive” idea, one that changes the course of an industry.  Amazon disrupted retail sales.  Spotify disrupted the music industry.  Uber disrupted public transportation.  OpenTable disrupted the restaurant business.  This type of disruption happens when imagination is everything, even in the arts.  Think of the impressionist movement in art:  in a world of realistic reproduction in art, painting in dots was unique.  In music, this kind of disruption has happened many times in many genres, including classical, jazz and rock ‘n roll!  Free your imagination and envision your future.

5.  Trust your gut.

“The only real valuable thing is intuition.”

This one is easy.  Have you ever heard someone tell you to “trust you gut.”  It’s one of those aphorisms that seems so simple as to be ridiculous, but it is truly one of life’s mysterious realities.  Sometimes in life we feel a certain way, I.e., our guts tell us something, that cannot be explained by empirical observation or fact.  A son feels a sudden sense of loss, for example, at the precise moment that his father passes many miles away.  A sister or brother feels a sharp sensation in this hand at the exact moment his or her sibling pierces their skin with a knife in another state while cutting vegetables.  We sometimes call it “intuition,” or may just a “feeling.”  The more spiritual among us may call it a premonition.  Whatever word you use to describe the phenomenon, it is a reality that resembles those “spooky moments” that Einstein described, when two subatomic particles are spinning in unison.  As a creative, it may help to get in touch with the spooky side of life and trust your gut.

6.  Think differently.

We cannot solve our problems with the same thinking we used when we created them.

Einstein also expressed this same thought in a different way when he said that “insanity is doing the same things over and over again and expecting a different result.”  A more twist on this advice is to “think outside the box.”  We can sometimes focus so intently on the same lyric, the same problem, the same algorithm that we box ourselves into the obvious.  We often call this “writer’s block” or a “slump” or a “rut.”  The only way out of this mental stalemate is to walk away from the problem and do something else, while our “subconscious” mind continues to “stew” on the solution to whatever problem has us stumped.  Many songwriters and authors keep a diary on their nightstands for this very reason:  inspiration often strikes in the middle of a good REM sleep.  Find ways to think differently.

 

 

7.  Live as if every moment is a miracle.

 

“There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle.”

Your glass is either half empty or half full.  In his famous tome Odes, the epicurean Horace extoled “carpe diem, quam minimum credula postero.”  If that’s Greek to you, roughly translated it means “seize the day, put little trust in the future.”  More specifically, Einstein teaches use to embrace the moment as the miracle that it is, and live you life as if there is no tomorrow.  This may be why the more creative souls among us tend to be “free spirits” and “impulsive,” with very little concern about the practicalities of life.   Einstein believed that the work of God was “reflected in the harmony of nature’s laws and the beauty of all that exists.”  Although history sometimes portrays him as the “absent-minded” professor, I choose to believe that he was just preoccupied with the miracles of life.  The folklore of Einstein’s umbrella bears this out:  it is said that one rainy day Einstein stopped by a shop to purchase supplies for a research project, where he lays the umbrella down to pay for the goods, and promptly forgets it as he walks back out into the rain.  He returned to the store after the rain stopped.  When the shop owner inquires about the odd behavior, Einstein explains that is was preoccupied with thinking about his research and only remembered the umbrella when the rain stopped and he tried to close his forgotten umbrella!  So don’t let the details of our daily existence interfere with your creative thoughts.  Life every moment as if it’s a miracle.

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Our founding partner, Barry Neil Shrum, was recently interviewed for Episode #12 of Inside Music City podcast, which is available on iTunes, Stitcher and Tunein.  The one-hour episode delves into Mr. Shrum’s reasons for becoming an intellectual property counselor and overall guru, as well as various tidbits of advice for the upcoming songwriter, artist and entrepreneur.  You can listen to the Episode here

Jordan Conover and his friend, Tyler, cover a wide variety of topics on the weekly podcast with the hopes of creating an “insider’s guide to the music business. . ..”  Find out more about Jordan and Tracy’s great podcast HERE.  Make sure to listen to some of the past episodes featuring various colleagues and past and present clients of Mr. Shrum.  You’re sure to find some interest content that you’ll find helpful in your journey to success in the music business.

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By Lucas Evans*

Back in mid-July, when streaming giant Spotify was slammed with two new major lawsuits totaling a whopping $366 million, we all tho
ught they would try and settle. But the dispute, instead of heading towards an end, seems to be ramping up. The July complaints, filed by Nashville music publisher Bluewater Music Services and Bob Gaudio (founding member of Frankie Valli and the Four Seasons and himself a publisher), alleged that Spotify had neglected to pay mechanical royalties on thBluewatere publishers’ copyrighted works, and that the company had subsequently ignored termination notices. And on September 12th, over 100 songwriters and independent publishers hopped onto the bandwagon, alleging the exact same thing.
[1]

This all may sound familiar: in 2016, Spotify settled with the National Music Publishers Association (NMPA) over the same mechanicals issue, and May of 2017 saw the streaming standard-bearer dole out $43.4 million to publishers and songwriters in order to settle out of a class-action lawsuit filed by musicians David Lowery and Melissa Ferrick.[2] But when Spotify filed a ‘Memorandum in Support of Motion for More Definite Statement’[3] in regards to the July lawsuits on August 30th, it became clear that Spotify is not content with settling, but is instead gearing up to fight.

Let us first make clear exactly what Spotify is accused of. Bluewater and Gaudio, as well as the host of new indie publishers now suing (who are all represented by Richard Busch, the Nashville attorney who represented Marvin Gaye’s estate in the famed ‘Blurred Lines’ case), accuse Spotify of adhering to a practice of “commit willful copyright infringement first, ask questions later, and try to settle on the cheap when inevitably sued.”[4] More specifically, they allege that Spotify has neglected to pay mechanical royalties due to publishers and songwriters for the use of their compositions when Spotify streams their music.

Mechanicals are the licenses which allow the licensee to reproduce and distribute a copyrighted work, and they are subject to statutory royalty ratesbob gaudio 2
determined by the Copyright Royalty Board. Traditionally, these licenses applied to things like CDs and vinyl records, but since the advent of digital technology, this has been expanded to include ‘digital phonorecord deliveries’ (think iTunes downloads). This is because when you download a song onto your computer, the sound file, even though it is represented in binary code by a series of ones and zeros, is still reproduced, in a sense. Thus, mechanicals are owed.

Bluewater and Gaudio, however, focus on ‘streaming,’ a term that is a little less clear. The Complaint argues that,

“As an interactive service, Spotify must obtain either a direct or compulsory [mechanical] license allowing for the streaming of each musical composition on its service… A mechanical license grants the right to reproduce and distribute copyrighted musical compositions for use on compact discs, records, tapes, ringtones, permanent digital downloads, interactive streams, and other digital formats.”

It’s very important to note that Busch lumps in ‘interactive streams’ among uses which require a mechanical license, as this is the exact point Spotify contradicts in its Memorandum:

“Plaintiff leaves Spotify guessing as to what activity Plaintiff actually believes entails ‘reproduction’ or ‘distribution.’… ‘Streaming’ – by its very definition – cannot infringe upon either the reproduction right under 17 U.S.C. § 106(1) or the distribution right under 17 U.S.C. § 106(3). As a consequence, Plaintiff’s allegations simply do not inform Spotify how Spotify is alleged to have violated the law.”

Terminology is of the upmost importance here. Throughout the whole Bluewater complaint, Busch uses the word ‘stream,’ to refer to Spotify’s alleged infringing activity. There is, however, another way in which Spotify could be utilizing the compositions: limited downloads. Limited downloads are essentially what happens when you download a song to your Spotify library, thereby allowing you to play that song even when offline.

According to the Code of Federal Regulations, Title 37 Part 385.11, a limited download is “a digital transmission of a sound recording of a musical work to an end user, other than a stream, that results in a specifically identifiable reproduction of that sound recording… A limited download is a general digital phonorecord delivery under 17 U.S.C. 115(c)(3)(C)and (D).”[5]

It seems indisputable that a limited download is a form of digital phonorecord delivery and thus subject to compulsory mechanical licensing. It is written in black and white letters in the U.S. Code. It is less clear, however, that ‘interactive streams’ are subject to mechanical licenses. In fact, the Copyright Office’s definition makes no mention of whether they are or not: “Interactive stream means a stream of a sound recording of a musical work, where the performance of the sound recording by means of the stream is not exempt under 17 U.S.C. 114(1) and does not in itself or as a result of a program in which it is included qualify for statutory licensing under 17 U.S.C. 114(d)(2).”

Busch’s complaint makes no mention of limited downloads, only of streams. And conveniently enough, nor does Spotify’s memo in response. So our problem becomes clearer: If Richard Busch had focused on limited downloads in his complaint, then Spotify may not have had much room to argue against being liable for mechanicals. After all, it seems evident that Spotify’s service allows for limited downloads. Whenever we click the little icon that allows us to ‘download’ the music to our library and then play it offline, the time period for which that download is available is determined by our subscription to the service. Doesn’t that exactly fit the definition of a limited download?

spotify
Though no mention is made anywhere of these curious limited downloads, Spotify also disputes that “streaming” constitutes a reproduction or distribution. That notion, however, is contradicted by a host of parties. The Harry Fox Agency, whom Spotify itself contracts with to administer its mechanical royalties, states “Under the U.S. Copyright Act, the right to use copyrighted, non-dramatic musical works in the making of sound recordings, including CDs, records, tapes, ringtones, permanent digital downloads, and other digital formats (e.g., interactive streams) for distribution to the public for private use is the exclusive right of the copyright owner… a compulsory mechanical license is available to anyone else that wants to record and distribute the work upon obtaining a proper license and subsequently paying royalties at the statutory ‘compulsory’ rate as set forth in
Section 115 of the Act and the related regulations.”[6]

Similarly, Tunecore, a distribution service for independent artists, explains that, “whenever a song is streamed via any interactive service (e.g. on Spotify, Rhapsody, Zune), a mechanical royalty is owed to the Songwriter/Publisher. The royalty owed varies by digital service and is based on subscriptions and ad revenue. On average, a mechanical stream pays around $.0008 per stream.”[7]

And perhaps most damningly: in a 2014 submission to the Copyright Office, Spotify’s then-Head of Licensing Business Affairs, James Duffett-Smith, says that “Spotify’s catalog of available music is dynamic, in that it may increase and decrease on a day-to-day basis. Those changes are driven by whether the rights to particular works – both the sound recordings and the musical works embodied therein – have been secured for reproduction, distribution, and public performance [emphasis added] in the United States.”[8] Duffett-Smith acknowledges that under the law, Spotify must obtain mechanical licenses to reproduce and distribute copyrighted compositions. Spotify’s August memorandum directly contradicts this statement.

To sum this all up: the plaintiffs, Harry Fox Agency and Spotify’s former head of licensing have all said that interactive streaming requires a mechanical license, a point which Spotify now disputes. Though the actual black letter law may be unclear on interactive streaming, it is relatively straightforward on limited downloads: you need a mechanical license for them. It remains to be seen whether Richard Busch will amend his complaint to include these limited downloads, but Spotify has actually hinted at its possible defenses, should that update be made:

“If Plaintiff is indeed alleging an instance of copying (as opposed to streaming) that allegedly violates Plaintiff’s reproduction and/or distribution rights, it can amend its Complaint to say so. Depending on what that allegation is, Spotify will advance a number of defenses. If Plaintiff’s real complaint is with, for example, a particular instance of alleged temporary copying [i.e.. limited downloads], then, among other things, Spotify may assert a defense of fair use. Spotify may also assert defenses of compulsory license, implied license, negotiated license with copyright owner co-owner, statute of limitations, and others, depending on the nature of the specific allegations.”

That Spotify hints at using a fair use defense in response to the limited downloads argument is perplexing, and may warrant another blog post in itself. But for now, let us wait and see how this string of lawsuits develops. As of right now, these cases are only about the ‘interactive streaming’ of works, which Spotify asserts definitively are not reproductions or distributions (even though this seems to contradict an industry consensus). If any of these cases go to trial and end in a precedent-setting ruling, there could be huge implications for the way licensing is done in this new digital music economy. Whichever side wins, current practices will have to change in some way. Spotify, for its part, has been backed into a corner by these recent lawsuits, and it seems clear that the company is ready to go to battle.

 


 

BU1617 XC M HS EVANS Luke
*Lucas Evans is a senior a Belmont’s Mike Curb School of Entertainment and Music Business.  He currently works as a legal research assistant to Mr. Shrum.  Lucas has a strong interest in pursuing a law degree as well as a career in the entertainment industry.  He is Interested in policy & legal issues pertaining to art, tech and beyond.  Lucas enjoys running long distances, drinking coffee, bing-watching most HBO programs, and strumming the guitar at an amateur level!

Footnotes:

[1] http://www.tennessean.com/story/money/2017/09/13/spotifys-legal-battle-indie-publishers-escalates-new-lawsuit/662641001/

[2] http://www.billboard.com/articles/business/7809561/spotify-settles-class-action-lawsuits-filed-by-david-lowery-and-melissa

[3] https://www.scribd.com/document/357737710/Spotify-Memorandum-in-Support-of-Motion-for-More-Definite-Statement#

[4] https://www.scribd.com/document/354116116/Blue-Water-Complaint#from_embed

[5] https://www.law.cornell.edu/cfr/text/37/385.11

[6] https://www.harryfox.com/license_music/why_need_mechanical_license.html

[7] http://www.tunecore.com/blog/2012/11/how-were-getting-your-mechanicals-from-streams.html

 

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By Drew Harris

How delicious are those 11 “secret herbs and spices” assembled by Harland Sanders in 1930 for his popular “Kentucky Fried Chicken” sold at his local service station? It was so “finger lickin’ good” popular that the Governor Ruby Laffoon proclaimed him a “Colonel” and he started franchising his chicken business. But rather than patent the recipe, he chose instead to keep it a “secret” in order to protect it. The KFC Original Recipe is, in fact, perhaps the most famous and notable trade secrets in history.

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In order to protect the ingredients, the secret original recipe, handwritten and signed by Colonel Sanders himself on a now yellowing piece of paper, is held in a special segregated company vault in Louisville, KY, along with 11 viles of the ingredients for good measure. Throughout time, it has only been seen by a handful of employees (all of whom must, of course, signed ironclad pledges of confidentiality). The vault itself, which can be accessed by only two people working in tandem, is monitored around the clock by video and motion-detection surveillance systems.

To further insure that the secret remains so, the 11 herbs and spices are mixed in separate halves – one half by Griffith Laboratories and the other by McCormack – and then combined together all at once by the latter to ensure that nobody outside of the companies should ever know the incredibly lucrative blend.

Many have claimed to have discovered various versions of the Original Recipe, one of which was published in the Chicago Tribune, however KFC maintains that those are not even close. The ability to maintain the secrecy of the Original Recipe is paramount to the business of KFC, and establishing it as a trade secret offers the fast food giant the best protection. If KFC (or their parent company, Yum! Brands) were to have patented the Original Recipe, the recipe would’ve been published, and made available to the public after the expiration of the patent, allowing anybody to copy the secret recipe verbatim, which would dramatically devalue the KFC brand.

The story of KFC illustrates that trade secrets are very lucrative commodity to U.S. companies such as McDonalds, Coca-Cola, and many others. That is why the Defend Trade Secrets Act of 2016 (the “DTSA”) was an important piece of legislation. The DTSA is a powerful tool for companies like them that ferociously defend their trade secrets.

A Brief History of Trade Secret Protections in the United States

Protecting Intellectual Property has long been important in the United States, and indeed internationally as well, however trade secret law has historically taken the backseat to copyright, trademark and patent law on a federal level. Until 2016, with the passage of the DTSA, trade secret law was handled exclusively on a state-to-state basis, with statutory law differing in respect to statutes of limitations, definitions, application, and other relevant criteria. Companies were required to jump through certain hoops established variously by state legislation and court precedent to establish a trade secret.

Some progress was made toward uniformity in 1980, the Uniform Trade Secrets Act was approved by the American Bar Association. Nearly every state that has enacted a trade secret law has adopted the UTSA (New York and Massachusetts being the two states with trade secret law that have not). Another reference is the Restatement of Trade Secrets, which provides a summary of the varying trade secret laws passed in states throughout the US.

In 1996, Congress passed the Economic Espionage act (EEA), the target of which was stopping trade secret theft by foreign governments, individuals, and entities in general. While the EEA did provide a step in the right direction concerning Federal legislation regarding trade secret theft, instead of provide a private cause of action the EEA instead relied on the U.S. Attorney’s office, which was already strained.

Finally, in 2016, the DTSA greatly altered the way in which U.S. companies can seek remedy for trade secret misappropriation and changed the legal landscape of trade secret enforcement in the following ways:

1. U.S. Companies can now hire their own lawyers

Under the DTSA, rather than relying on enforcement actions of the U.S. Attorney General’s Office, companies now can file private legal actions to protect their trade secrets and seek remedies from individuals or companies that infringe, steal or misappropriate them. The DTSA provides the necessary “teeth” to enforce these valuable rights.

As noted above, under the EEA any company in need of litigation regarding the misappropriation of their trade secret had to go through the U.S. Attorney’s office. By allowing the owners of trade secrets the ability to hire their own counsel, companies are in control of their own enforcement of intellectual property. Companies can also seek out lawyers that have a greater wealth of knowledge pertaining to trade secret law, providing them a benefit that a prosecutor in the U.S. Attorney’s office might not afford. Furthermore, the office of the U.S. Attorney juggles myriad cases at once involving many national issues – it thus cannot consistently give a company in need of trade secret litigation undivided attention. If the company hires its own private counsel, they can choose one who has the appropriate work ethic, knowledge and motivation to pursue the case. Thus, companies that take legal action regarding their trade secrets now are afforded the possibility of more attentive, accountable, and (quite possibly) knowledgeable attorneys- at least in the field of trade secret litigation.

2. There is now a federal (national) standard to use for trade secret cases. Much simpler than before.

The DTSA provides much needed uniform definitions for certain critical terms, most notably “trade secret” and “misappropriation.”

The DTSA definition of trade secret, for example, is rather broad. It allows protection of a wide range of proprietary information, specifically: “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.” This is very similar to definitions found in prior laws dealing with trade secret, such as the one found in in 18 U.S. C. 1839(3).

Acts that constitute misappropriation are also specifically explained in the DTSA, giving guidance to litigants as follows:

acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or

disclosure or use of a trade secret of another without express or implied consent by a person who—

  • used improper means to acquire knowledge of the trade secret;
  • at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was (a) derived from or through a person who had used improper means to acquire the trade secret; (b) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or (c) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or

before a material change of the position of the person, knew or had reason to know that—

  • the trade secret was a trade secret; and
  • knowledge of the trade secret had been acquired by accident or mistake.

3. U.S. Companies Can Seize Assets and Freeze Business of individuals or entities that misappropriate their trade secrets (if they can make a strong enough case for it)

In addition to these uniform definitions and the ability to retain private counsel, section 2 of the DTSA granted owners of trade secrets the very powerful, though specific, right to seizures of personal property in order to enforce their rights. They may now act through court order to seize the assets and freeze the business activity of an individual or entity who is potentially misappropriating their trade secret, or disseminating information stolen from that company. This type of civil seizure generally occurs ex parte (meaning only one of the parties to the lawsuit, in this case the plaintiff, is in the court room) prior to a court formally finding misappropriation in the actions of a company against which a claim was filed. The court grants a TRO and seizure order. This seizure, though very useful and necessary in certain situations, must meet a laundry-list of criteria, in order to make reasonably certain that this ability is not used maliciously or in bad faith.[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][i] These seizures are important as they provide previously unavailable legal strategies for protecting trade secrets.

In Conclusion…

The most noticeable effect of the DTSA will be the ability of companies to privately pursue legal action against individuals or business entities that misappropriate their trade secrets. While the ex parte seizures (civil seizures) are exceptionally noteworthy, the instances in which they can be used are exceptionally rare, making them a useful, though seldom-used ally.

The passage of the Defend Trade Secrets Act of 2016 might not have made the front page, but it has radically changed the legal reality for U.S. companies that need to defend the trade secrets their business relies on.

The Entire Language of the Defend Trade Secrets Act of 2016 can be found here.

Drew Harris Drew Harris is a rising junior at the University of Tennessee and an summer intern at Shrum & Associates.  Drew’s goal is to attend law school and possibly practice entertainment law upon graduation.

 

 

 

 

 


 

[i] The following is the criteria necessary to be granted a court ordered ex parte seizure under the DTSA:

– Order following Fed. R. Civ. P. 65 or some other equitable relief would have to be insufficient in order to obtain this order

– Must be immediate and irrecoverable damage done if the seizure is not ordered and carried out

– A denial of the seizure order must harm to applicant, and that harm must: (A) be greater than the harm to the person/entity against whom/which the seizure is ordered; and (B) significantly outweigh the harm done to any third party by such a seizure

– Chance of success of applicant in showing that the person against whom the seizure was ordered indeed did misappropriate or conspire to misappropriate his trade secret is highly likely

– The request by the applicant is reasonably particular as to the property in need of seizure, location, basically the extent necessary under the circumstances

– The person against whom the seizure is ordered would attempt, or be successful at destroying, moving, hiding, or making his property unavailable through other means if he was served a notice by the court

– Finally, the applicant has not already publicized his request for a seizure, which would counteract the purpose of an ex parte/ civil seizure in the first place[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]






In our first episode of Purple Reign, we saw that even though Prince was known as a “control freak” when it came to many things, he may have let a few things slip, such as the non-existence of a valid will.

Notwithstanding that incredibly inconvenient post-mortem faux paux, Prince was in fact obsessively compulsive when it came to controlling his intellectual property.   He wanted to be in control.  First, there was the “artist formally known as Prince” symbol he adopted in the late 1990’s in order to get order to leverage a split with then-record label Warner Bros.  He was also a DMCA mad man known for sending frequent “take down notices” for everything from YouTube videos to fan made merchandise featuring his trademarks and rights of publicity.  

Surreptitiously as it may be, Prince (or more to the point, his estate) may find that he has even more control over his intellectual property in death than he ever did in life.  A new law in Minnesota called the PRINCE act plans to do just that.  Less than one month after Prince’s death, Minnesota Rep. Joe Hoppe, introduced the Personal Rights in Names Can Endure (“PRINCE”) Act.  The new act recognizes that “an individual has a property right in the use of that individual’s name, voice, signature, photograph, and likeness in any medium and in any manner.”  

Unlike copyrights and trademarks, the right of publicity is not created by federal law but by the laws of each individual state, so the degree of protection varies significantly from state to state.  Minnesota is currently one of just over 20 states in the U.S. that does not provide any protections for a person’s rights of publicity, either before or after death.  The Prince Act would remedy that absence in Minnesota. 

Many states, particularly those states where entertainment is a major source of tax revenue such as Tennessee, New York, California and Florida, have laws protecting a person’s rights in their name, likeness and sometimes other features of their persona, such as voice and signature.  Length of protection is one of the variants.  Indiana, for example, has a law that protects for 100 years after the person’s death and “reaches back” 50 years prior.  There have been some challenges to the constitutionality of some of these laws, so many believe that a Federal law is needed to address the widely varying laws.

Minnesota’s PRINCE act would allow Prince’s estate to control the aforementioned post-mortem rights of publicity, or all things Prince, for the next 50 years.  It’s important to note that although Prince’s death was the impetus for the law, according to its sponsor, it actually protects the rights of all citizens to their rights of publicity, not just Prince.  This is one very important point that the faulty logic of critics of the act, such as The Volokh Conspiracy and ostensible IP expert David Post, do not factor into their criticism:  the act is fundamentally fair because it protects ALL citizens of Minnesota, not just Prince’s estate.  It is similar in structure to most rights of publicity laws, in that the Minnesota law essentially states that “[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][a]n individual has a property right in the use of that individual’s name, voice, signature, photograph, etc.” (emphasis added).  Post complains that the law is “[j]ust what we need – more property rights that will clog up commerce, stifle free expression, [and] make lawyers happy forever.”  Perhaps Post needs to be reminded that property rights, particularly copyright, is, as the Supreme Court described it, “the engine of free expression” and a driving force in the creation of commerce.  See this LOR treatise for more.  The Prince law, and rights of publicity laws like it in other states, will protect commercial exploitation of such rights and make sure that the estate the only entity that can benefit from that exploitation.  There is nothing about the Prince Act that will “stifle” either free expression or commerce, in fact, the opposite is true.

But I digress.  The Prince Act could pass as early as August if anti-IP zealots such as the aforementioned don’t have their way.

Of course, when considering any form of intellectual property as an engine of free expression, there are several limitations and exceptions that must be consider in relation to the right of publicity, most importantly those involving First Amendment and/or “Fair Use” protection in certain circumstances.  The interest of the public in free speech must be weighed against society’s need to encourage the creation of useful arts. It also allows for fair use limited to news, public affairs, and sports broadcasts.  To this end, the PRINCE Act has exceptions, just like other counterparts, for the use of rights of publicity for fair use limited to news, public affairs, and sports broadcasts.  One example of a “newsworthy” use of an image would be using Prince’s image in connection with stories related to his death, such as this one.  Use of a photograph of Prince in connection to a news article about his death would be a permissible fair use, the same image imprinted on a T-shirt to be sold for profit would be commercial and would require a license from the estate.

 LOR will be watching closely to see how the bill continues to develop and will keep you posted with any updates.  Please feel free to contact us if you have questions about these issues.

Read Part 1 of the Prince Reign series here.

Thanks to Morgan Wisted for her writing and assistance with this Prince series.  Morgan is a summer intern at Shrum & Associates and has her own blog at www.silkenraven.com.

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Innovation

You cannot discover new oceans unless you have the courage to lose sight of the shore.

As it does every year, this new year marks a new beginning. I plan to continue my Twitter series entitled #creativity, so if you don’t already, follow me there @bshrum, or on any of the social networking platforms. However, I wanted to announce the series here and say a few words on the topic.

There is a trend in modern thinking to discount the significance, and even the possibility, of original thought. The movement is similar to the quo
te from Proverbs that there is “nothing new under the sun.” In other words, people are basically saying that an original idea is not possible, since every idea has already been expressed. This idea stems from the corresponding line of thinking that all ideas should be free. If this is true, there is not room for creativity, thought, inspiration, invention and innovation. All such “new” ideas would, in fact, be in the zeitgeist already.

Obviously, I do not agree with this line of thought. I come from a family of creative thinkers and I know from experience that new thought can, and is, generated every day. Our own experience in society falsifies the notion that there is nothing new under the sun, as we see in American history a lineage of great, original thinkers and invention. The light bulb, the automobile, electricity, the assembly line, the telephone etc. etc. All of these innovations are based on sparks of creativity. As American author Jonah Lehrer says,

“Creativity is a spark. It can be excruciating when we’re rubbing two rocks together and getting nothing. And it can be intensely satisfying when the flame catches and a new idea sweeps around the world.”

This is a wonderful insight. It is most certainly difficult in most instances to spontaneously generate truly unique thoughts. There is a propensity in the Nashville songwriting community to attempt to “force” this spark by scheduling co-writing sessions with other like-minded songwriters. This sometime results in frequent complaints about the songs being produced and performed in Nashville, i.e., that they are “all alike.” What people are really saying is that many of the songs are not creative. So, while these co-writing sessions may occasionally produce some innovative ideas, it seems that more frequently the practice is a lot like “rubbing two rocks together” in an effort to create the spark, but actually producing a lot of similar songs.

So, the question is can a person actually do anything to foster the generation of new and creative ideas, or are well all destined to the world where there is “nothing new under the sun”? Research shows that there are certain practices which help the spontaneous generation of fresh and new ideas. I’ll share three of them:

The Inner Child

When we think of creativity, we can’t help but reminisce about the days when we were children. A child has not inhibitions or preconceived notions. To a young child, every experience is new and original. The child cannot help but want to paint, sculpt, draw, write, read and see the world in a new light.

It is that “inner child” that can help the creator generate new ideas. Think about this: why is that many great artists, no matter what the craft, often turn to substance use and abuse in times when they want to create? The reason is, of course, that using a mind altering vehicle often lowers inhibitions and “lowers our guard.” No, I’m not saying go out and tie on one in order to create your next great novel. What I am saying is that if you want to create new ideas, you have to see things from the perspective of a child. Stand on your head. Do somersaults. Perform some of your favorite childhood activities. Get in touch with you inner child and your creative juices will be stimulated.

Brainstorm

Another way to get in touch in with your inner child is to just begin writing down any idea that pops in your head, without leaving any room for judging or evaluating the validity of those ideas. This process often puts you in touch with your subconscious thoughts that are frequently suppressed by our conscious mind, where all of our rules and safeguards exist. Original thinkers often talk about thinking all the times. They have very fluent and free flowing thoughts, producing a stream of ideas that are different and sometimes unusual to the less creative observer. But this is how they derive the practical and innovative ideas. Often times, the creative thinker will spend a lot of time “incubating” ideas. As the old expression goes, they “put in their pipe and smoke it.” They percolate the idea in their head until suddenly there is a moment of “eureka” and the idea comes out fully developed. This is the moment that some people feel they are being touched by inspiration, or being guided by their “muse.” The jury may still be out on that, but in reality the key for the creator is knowing how to find these moments of illumination and capture them, regardless of from where you believe they come.

The expression “a writer writes” reflects this concept. If you look at the journals of any great thinker – Thomas Jefferson, Leonardo da Vinci, etc. – you will find scores of ideas that they did not develop. These great thinkers of the world captured their thoughts frequently. In our age of modernity, we have technologies that can assist in that tasks, but we must not lose sight of the important of writing things down as they occur. Keep a journal.

Craft

To the last point, some people believe that creativity is not a trait we inherit, but rather is a skill that is developed. That may just be something the non-creative people say, but the fact of the matter is that you CAN learn skills associated with the arts. A person can be taught to sculpt, paint, write songs or novel, etc. If Einstein had not known the “skills” of math, he would not have been able to capture his unique equation, E=mc2. His flash of insight may very well have faded into the moment, thereby changing the course of human history as we know it. My point is this: new, original and creative ideas must be captured and crafted in order to be innovative.

Once you have mastered the art of getting in touch with your inner child, brainstormed a flurry of ideas, and had your “eureka” moment of insight, you must have developed the skills necessary to capture it and put it down on paper. The art of “clothing,” or expressing the idea is a craft that must be honed and developed in order to achieve success, no matter what your area of creativity.

So, hopefully these musings of a lawyer on the subject of creativity inspire you to go out and create. Help me in my quest to stamp out this new trend in thinking that there are no new ideas. Go create some!

NASHVILLE, TN, AUGUST 5, 2012:  Amazon’s CreateSpace and Shrum & Associates announce the publication of a new book by the author of Law on the Row, Barry Neil Shrum, Esquire.  The book is titled Origins of an Idea:  An Apologetic of Original  Expression and features a forward by Daymond John, who appears on the Shark Tank on ABC.

 

InOrigins_of_an_Idea_Cover_for_Kindle Origins of an Idea, Mr. Shrum defends the historic concept of Constitutional protection for original expression against an onslaught of attacks waged against it by Sweden’s Pirate Party, the Missionary Church of Kopimism, and other grass roots organizations threatening to destroy the universal concept of government-granted monopolies for original thought established by Thomas Jefferson and James Madison.   Through reason and apologetics, from a philosophical and historical perspective, he defends and illustrates the value of the copyright concept and the inherent rights we have in our own original expressions.

The author, Barry Neil Shrum, is an entertainment attorney who has been practicing law for over 20 years, representing some of the biggest name in the music and entertainment industries as well as numerous other clients in the creative and Internet sectors. Mr. Shrum also teaches copyright,entertainment law, licensing, and Cyberlaw at the prestigious Mike Curb School of Music Business at Belmont University.

“Barry Shrum has produced a high quality work on one of the most important issues for today and the future. If intellectual property loses its protection, all personal property will be at risk.,”  said Gary Terashita, one of the editors of the book.  “I strongly recommend this book to everyone involved in any venture where creativity and innovation thrives. This book engaging book will arm you with the defense you’ll need as the move to make all things ‘free’ invades”

The forward is written by Daymond John, who appears on ABC’s popular entrepreneurial program The Shark Tank.  John is the founder of FUBU clothing and the president of Shark Marketing in New York, New York

"I am excited about the release of my new book," said Mr. Shrum, "it is a timely and important topic in today’s digital environment where digital downloads are negatively impacting not only the music industry, but all competitive environments. I hope that my book will allow people to see the logic of our forefathers when they created the Constitutional basis of our current intellectual property laws."

The book is available on Amazon in either paperback or Kindle format.  It is also available in all other formats from Smashwords.

People don’t pour new wine into old wineskins. If they do, the wine will make the skins burst,
and both the wine and the skins will be ruined.   -Mark 2:22

Article 1, Section 8,Clause 8 of the United States Constitution is the starting point for any discussion of intellectual property, and in this specific case copyright.  In it, our Forefathers gave Congress the right to establish a monopoly in favor of authors and inventors for the fruits of their labor.  The merits and justification for granting this monopoly was apparently the subject of considerable debate amongst the likes of Thomas Jefferson, James Madison and Charles Pinckney, not to mention the remaining representatives to the Constitutional Convention, who spent a week long session in August 1787 discussing various proposals enumerating the powers of Congress. 

Jefferson was, perhaps, one of the staunchest proponents of limiting governmental monopolies in all respects, but in particular with regard to restricting the use of original thought.  In his indubitably prosaic way, Jefferson said "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea. . . .  [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][S]he made them . . . incapable of confinement or exclusive appropriation.”  In conclusion, Jefferson opined that “Inventions then cannot, in nature, be a subject of property. 

These concerns about granting rights of property to intellectual property, as expressed by Jefferson, were actually addressed by Charles Pinckney in his proposal.  His proposed clause, “to secure to authors exclusive rights for a limited time, added the infamous phrase to other proposals drafted by Madison.  It was combination of their drafts that were used by the Committee of Detail to draft the final clause, which included the “for a limited time” phraseology that has been the subject of debate in recent years. 

Under this authority, Congress has, through the years, established certain limitations on the monopoly of copyright.  Beginning with the first U.S. copyright law of 1790, wherein authors were given a 14 year monopoly, plus the option to extend the monopoly for a second 14 year term, to the present construct wherein authors are given a monopoly for the duration of their life, plus an additional seventy years in which their families and/or heirs can exercise the monopoly.

In addition to the time limitation, and in the spirit of Thomas Jefferson, Congress also imposes other limitations on the monopoly of copyright.  For example, originally the copyright monopoly on applied to “useful knowledge” produced by society, that is primarily writings.  This limitation evolved of the years into what we now understand as the definition of a copyright, i.e., an original idea expressed in a tangible format for more than a transitory duration.  Other limitations such as the first sale doctrine and fair use are not pertinent to the point here, but also serve as limitations on creators’ rights.

Throughout history, these limitations on the monopoly of copyright have, for the most part, served to create a very delicate balance between the need, perceived by our Forefathers, to incentivize authors and inventors to populate the marketplace of ideas on the one hand, against the utilitarian goal of providing a free exchange of those ideas for the good of society.  This creates the public domain concept of copyright law.

So it is, then, that the proprietary nature of an original idea is based on expression of that idea in a manner than can be controlled, i.e., a tangible format, again addressing the concern of Jefferson that an idea may be exclusively possessed as long as a person keeps it in their head, but “the moment it is divulged, it forces itself into the possession of everyone. . . every other possesses the whole of it.”  The resulting corollary of this is that the ideas themselves, absent expression, as well as the facts about the phenomena of the world, are considered to be the collective knowledge, or property, of humanity.  Therefore, so far in history, what I call the continuum of knowledge has been made up of these unexpressed ideas together with the works that have fallen into the public domain. 

This continuum of knowledge was envisioned by our Forefathers for the greater good of society and is the reason that, for example, tangible expressions of one of Claude Monet’s favorite subjects, the Saint-George cathedral in Venice, are theoretically entitled to copyright protection at the same time as the later paintings of François Salvat conveying expressions of the same subject.  Once the painters’ expression of the idea that is the Saint George cathedral is transformed onto canvas, he is entitled to enforce the monopoly of copyright.  Conversely, the mere idea or fact that is the cathedral is never the subject of individual property protection by the painter. 

Stated another way, the law by necessity is focused on the embodiment of the idea, as opposed to the idea itself or, to use a biblical reference, it focuses on the wine skins more than the wine as a means of control.  This conflation of the expressed idea – described by the Supreme Court as “evanescent” – and the physical embodiment creates more misunderstanding regarding the concept of copyright than perhaps any other.  In our advanced age of digitization, it is now more important than ever for us to remember the distinction between the two elements.

The best illustration of this conflation is perhaps the area of musical works.  For purposes of this discussion, we will ignore, for the moment, that there is a separate copyright for sound recordings of musical compositions and focus primarily on the latter.  In the early 1900’s, vinyl records became the embodiment of choice for musical compositions.  In the 60’s, it was the 8-track tape and in the 70’s it was the analog cassette.  In the 80’s, as digital technology advanced, we used the compact disc and digital audio tape, which ultimately led to the mp3 format in the 90’s and afterward.  Once digitization became possible, all tangible expressions we subjected to the process and it became possible to make flawless copies of the “wine” that was paintings, photographs, text, music, graphics, video, sound recordings, and cartoons. 

John Perry Barlow, ex-Grateful Dead lyricist turned founder of the Electronic Frontier Foundation, describes this phenomenon:

    Now, as information enters cyberspace . . . these [wine] bottles are vanishing.  With the advent of digitization, it is now possible to replace all previous information storage forms with one metabottle: complex and highly liquid patterns of ones and zeros.

From the moment of digitization forward, the fusion of the expressed idea and the embodiment was “rent asunder,” changing forever more how we perceived copyright.  Tangible expressions, once embodied in pigments, paper, strips of celluloid, discs of vinyl or plastic, and tape, now existed as glowing impulses of voltage conveyed in zeros and ones, flitting around the Internet at the speed of light.  The expressions, in other words, are now closer to pure thought than our Forefathers, perhaps, ever dreamed possible.  Digital technology thus threatens to disturb the delicate balance they intended to establish in their creation of a copyright monopoly.  The truly “evanescent” nature of a digital copyright monopoly makes it extremely difficult to fit into the “old skin” that is “an original idea expressed in a tangible format for more than transitory duration.”

The “RAM Fixation” cases that arose in the late 90’s – the seminal case being MAI Systems Corp. v. Peak Computer, illustrate the imbalance precisely, as the courts struggled to determine whether a cached copy of a copyrighted work that existed in the random access memory of a computer for no more than a second was sufficient “fixed in a tangible format” for more than a “transitory time,” thus warranting protection under copyright law.  The 9th Circuit in MAI Systems ruled that it was sufficient, but other courts, like the 2nd Circuit in Cartoon Network v. CSC Holdings, found otherwise, ruling that the copy was “fleeting” and therefore not “embodied . . . for a period of more than a transitory duration. . . .”  The Supreme Court has yet to rule on this issue.

Once the veil was rent asunder, trying to enforce a copyright monopoly was somewhat akin to trying to sweep back the ocean with a broom.  Beginning with its efforts against Diamond Multimedia in the late 90’s and its efforts against Napster and Grokster, and continuing through to the present through it efforts against more than 17,000 individual downloaders, the track record of the Record Industry Association of America in its fight against illegal downloading is the perfect example of this fruitless effort.  Rather than adapt and transform our concepts of copyright – the wine skin – to conform with the new wine – digitization of art – the music industry continued to cling to the status quo, a hand forced in part by decades of doing business under the old model.

What does this conundrum mean for copyright law and the efficacy of a monopoly in the fruits of our creative labor?  Before answering that question, and lest we forget, new technologies have always created challenges to Constitutional law.  If we view our founding document as a living, breathing document that was created to adapt to such challenges, it may help address the current challenge. 

This is not the first time in history that a new technology has challenged an existing way of thinking.  Even in the music industry, the introduction of the “talking machine,” a/k/a the phonorecord player, created such a stir that John Philip Sousa testified before Congress that the invention would “ruin the artistic development of music in this country” because our vocal chords would no longer be used and therefore vanish as a result of evolution!  What seems like an extreme position now is only perceived as such through the lenses of hindsight.  Congress responded to Sousa’s and the industry’s concerns, as it often does, by revising the copyright law to address new technologies.

In responding to the new technologies of our generation, we must keep in mind the primary objectives of Jefferson and others in the creation of a copyright monopoly in order to adequately address the issues – they wanted to assure the widespread distribution of ideas for the benefit of society by giving the creators of ideas a monopoly.   They were dedicated to encouraging the dissemination of mental creations throughout the New World where they could be used, entering the mind of others – the continuum of knowledge – by assuring their creators that they would be compensated for the value of such dissemination.  Once certain limits had been reached, the protected ideas would enter the market place of ideas, the continuum of knowledge, and become freely available to the public for use in the creation of new ideas.

The problem with many solutions being proposed by advocates of copyright, as well as those who would have us do away with the concept, is that they ignore the delicate balance by focusing on one aspect of that principal while ignoring the other.   Just because we can now “unclothe” the idea, stripping away its tangible, physical embodiment, does not eliminate the system of confinement, i.e. the copyright monopoly, envisioned by the Forefathers.  Jefferson clearly grabbled with the concept that an idea was “incapable of confinement,” but nevertheless clearly chose to participate in the creation of a system that would, in fact, confine the very thing that was incapable of confinement.  So, even though the creations of authors and inventors now, more than ever, more closely resemble a mere idea, using the tools given to us by our Forefathers, our society can still adapt our system that offers incentives to those authors and inventors for the dissemination of the fruits of their labors. 

Through new technologies and interpretations, we can develop “virtual bottles” to store our new wine, bottles which replace the old physical, less evanescent wine skins of embodiment.  Since laws on meant to reflect public opinion, perhaps in the end the future of the copyright monopoly may depend more on perceptions than it does on restrictive regulations.

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featured on ABC’s The Shark Tank

By Barry Neil Shrum & Nathan Drake

Since before the day that Napster was a twinkle in Sean Parker’s eye – well over a decade ago now – the legal and music industries have each struggled with ways to cope with and transform their dusty old business models from the physical status quo to the digital revolution. After the industry watchdog, the RIAA, initially targeted the Diamond Multimedia’s Rio MP3 player and then Parker, and then finally individuals were illegally downloading, the major record labels began to realize something: that perhaps the fact that consumers were downloading music illegally was merely a symptom of the problem rather than the source of the problem. So, the RIAA also began suing P2P file-sharing websites that sprang up instantly in the place of Napster, websites like Kazaa and LimeWire. While this method proved to be a bit more effective, the process still accomplished little in preventing future P2P file sharing services from materializing, each taking the place of its predecessor and each growing as rapidly as the one before. In yet another continuing effort to solve the music industry’s nightmare, new legislation has been introduced to Senate which is entitled “Combating Online Infringement and Counterfeits Act.” (S. 3804)

The purpose of the “Combating Online Infringement and Counterfeits Act” (COICA) is to provide owners of intellectual property additional weapons in the battle against illegal downloading. As indicated, the inherent difficulty of deterring and prosecuting these myriad individuals who aimagere profiting off copyrighted materials is that they easily hide behind the anonymous wall of the Internet. Many of the sites providing access to this illegal property are situated well off the shores of the United States, overseas and beyond the long reach of the court’s jurisdiction.

Another problem is the sheer mass of the problem. One study indicates that as much as 1 in 4 Internet users download illegal music – an astonishing statistic! Let me state that another way: 25% of the traffic on the Internet is to sites that allow illegal downloading of copyrighted material, be it digital books, movies or music.

As Senator Leahy, one of the sponsors of COICA says, it is essential that the government enforce a

“means for preventing the importation of infringing goods by rogue websites, particularly for sites that are registered overseas.”

Through focusing on the domain names, COICA gives the Department of Justice the authority to pursue and prosecute offending website, both domestically and abroad. Incentivizing and rewarding creative endeavors remains the core ideology of American copyright protection, and instilling this value in our society is crucial if our society will continue to create. According to the Chamber of Commerce, “…American intellectual property accounts for more than $5 trillion and IP-intensive industries employ more than 18 million workers.” Therefore, protecting this integral aspect of American ingenuity and economy should be a priority.

Additionally, COICA provides universal jurisdiction to the Department of Justice in pursuing and prosecuting domain names that solicit American intellectual property in the United States. If the law succeeds, individuals committing copyright infringement will no longer be able to hide behind the protection of their native country, without fearing that their action can and will be pursued by the United States.

In addition, COICA allows third party participants to be prosecuted for “enabling” the website to sustain itself and lend legitimacy to the practices and products of the website. As Senator Leahy states, “These [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][third] parties monetize the Internet site by enabling U.S. consumers to access the infringing website, to purchase content and products off the website, and to view advertisements on the website. Without partnering with these entities, the financial incentive to run an infringing Internet site is greatly diminished.” Those directly and indirectly supporting copyright infringement will be prosecuted.

For the purposes of COICA, the government defines a website as, “dedicated to infringing activities.” Due to the outstanding number of infringing websites, the government intends to pursue only the most “egregious rogue websites that are trafficking in infringing goods.” To be considered an infringing website, one of two criteria must be identified. First, the website exhibits the “existing threshold for forfeiture” under U.S.C. 2323, or the website reveals no commercial value and intends to only sell copyrightable items protected under Title 17 of the United States Code.

One of the primary opponents to the passage of COICA is the Consumer Electronics Association (CEA). Although CEA supports and agrees with the general direction of COICA, they feel its vague and wide reaching language could potentially harm legitimate businesses that are not committing copyright infringement. CEA says, “Our primary concern is that the scope of S. 3804 was significantly broader than its intended purpose of shutting down ‘rogue’ or foreign websites solely engaging in the exchange of pirated content or goods.” The ambiguous language of COICA could potentially diminish previous milestone cases according to CEA, including the “Betamax Case” determined by the Supreme Court in 1984.

While the technological environment is constantly changing and creating new hurdles for the consumer and business, the importance of copyright protection still remains. A constantly transforming environment requires innovative and relevant legislation to meet the creative needs of our culture. In an attempt to counter this decade long battle, legislation like COICA would allow the government to target the source of global piracy, and enforce the relevance and weight of American copyright protection. But our legislators must be certain to craft language that does not impede the rights of its citizens. Balance is need lest we resort to the overreaching, irrational, and over reactive activity the RIAA engaged itself in over the past decade.

RESOURCES & FURTHER READING

http://supreme.justia.com/us/464/417/

http://openjurist.org/title-18/us-code/section-2323/forfeiture-destruction-and-restitution

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_reports&docid=f:sr373.111.pdf


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