THE RECORD INDUSTRY IS DEALT A BLOW IN ITS ONGOING EFFORTS TO SUE ITS CUSTOMERS FOR ILLEGAL FILE SHARING:

You may recall that back in 2007 a jury in Minnesota determined that a woman named Jammie Thomas had violated the copyright law by offering to share 24 songs on the Kazaa file sharing service and socked Ms. Thomas with $220,000 in damages. The damages were awarded to the record companies whose songs had been improperly offered up on Kazaa. That jury award caused quite a stir at the time because of the size of the damages assessed – especially because the retail value of the songs was about $54. Later - in a rare and interesting twist – the Judge who presided over the trial threw out the damages award and granted Ms. Thomas a new trial. Why? Because the Judge determined that the record labels had to prove that some third parties had actually downloaded the copyrighted songs and that it wasn’t enough that Ms. Thomas had simply made the songs available for downloading. The Judge overturned the verdict because he didn’t instruct the jury on that distinction at the trial.

In the latest skirmish in the case, the record labels asked the Judge to reconsider his decisions to overturn the damages award and order a new trial. But the Judge refused and reiterated his belief that in order for the record labels to prevail they will have to show that Ms. Thomas did more than just make the copyrighted songs available for downloading. And thus the case will be headed back to court for a new trial in front of a new jury – unless the record labels decide to drop the case. That’s a possibility because last year the record labels publicly announced that they were stopping the filing of lawsuits against individual illegal file sharers and instead were going to focus on working with Internet Service Providers (ISPS) to stop illegal file sharing.

Why is this important?

It’s important because for several years the record labels and their trade association the Recording Industry Association of America (RIAA) used the $220,000 damages award against Jammie Thomas as a tool to scare people who were sharing files illegally. That was, of course, their prerogative. But if the damages award was made without a proper legal foundation, it should not stand. And if the record labels choose not to pursue a new trial against Ms. Thomas, that too will signal that the era of mass suits against end-users – at least as far as music is concerned – may be over.

DID YOU HEAR THE ONE ABOUT THE DOG THAT ALMOST BIT THE ADVERTISING AGENCY?

Remember Taco Bell’s “Yo quiero Taco Bell” ads from the late 90’s? It turns out that the idea of using a Chihuahua to help sell Taco Bell tacos etc. was originated by a Michigan-based marketing firm (Wrench LLC) that had originally pitched Taco Bell on the idea. But Taco Bell and Wrench never struck a deal and later Taco Bell started working with the well-known advertising agency TBWA Chiat/Day, Inc. on an ad campaign that ended up becoming the “Yo quiero Taco Bell” ad campaign.

Wrench subsequently sued Taco Bell and was awarded $42-million for copyright infringement and breach of contract. That in and of itself was something of a remarkable result not only because of the amount of the damages but because Taco Bell claimed that the idea Wrench had presented – using a “Psycho Chihuahua” dog character – had nothing to do with the “Yo quiero Taco Bell” dog character. Wrench nevertheless prevailed.

Then Taco Bell turned around and sued TBWA Chiat/Day, Inc. to cover the damages award on an indemnification theory. In other words, Taco Bell claimed it was the ad agency’s fault. But in a decision last month, the 9th Circuit Court of Appeals let the ad agency off the hook because TBWA Chiat/Day, Inc. wasn’t a party to the implied contract between Wrench and Taco Bell and because the agency wasn’t aware of Wrench’s “Psycho Chihuahua” character at the time it got involved. So..unless Taco Bell can prevail on appeal, it looks like it’s going to have to sell quite a few more tacos and enchiladas to cover the $42 million in damages.

For a link to one of the original Taco Bell ads, try
http://www.youtube.com/watch?v=M8sZ1DWsAHE

COPYRIGHTS: "A FAIR(Y) USE TALE"

Copyright law protects content such as books, songs, motion pictures, tv shows, plays, photographs, illustrations, paintings, sculptures, computer programs, etc. etc. One major exception to the rights owned by the copyright owner is the "Fair Use" doctrine. The Fair Use doctrine states that in certain limited circumstances that which would otherwise be considered an illegal copyright infringement - (copying a copyrighted work without permission) - is permissible. These limited circumstances include purposes such as criticism, news reporting, teaching and parody. Here is a link to a very clever 10 minute animated film which uses excerpts from many Disney films to illustrate some basic copyright principles and the Fair Use doctrine.
Although we don't necessarily agree with some of the arguments made by the filmmaker, we still believe this is a very entertaining and valuable introduction to copyright law and the Fair Use doctrine. [More about what we don't agree with in this film in our next blog entry].