Recap of the 46th Annual IP Institute

Panelists Jacqueline Charlesworth (Charlesworth Law and former General Counsel of the U.S. Copyright Office), Tyler Ochoa (Professor, Santa Clara University), Vijay Toke (partner at Rimon Law) outlined various developments in copyright fair use following the Supreme Court’s decision last year in Google v. Oracle. Angus MacDonald (Managing Counsel, University of California) capably moderated the panel.

Fair use is garnering more attention these days, especially as the Supreme Court will issue its much-anticipated ruling this term in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith. For the uninitiated: Goldsmith, a photographer, captured an image of the singer Prince and licensed the photo to Vanity Fair in the 1980s. Later, with a license from Goldsmith, Vanity Fair asked to use the photo as a reference to create screen prints. It wasn’t until Prince died in 2016, and after Vanity Fair ran a different Warhol print of Prince as the cover photo, that Goldsmith discovered an unlicensed use of her photo and claimed copyright infringement. While other fair use factors were discussed, the panelists emphasized that the only factor before the Court was the first factor: the purpose and character of the use, including whether Warhol’s changes were sufficiently “transformative” to support fair use.

The speakers commented on the discussion among the Justices during oral arguments in Goldsmith. The panelists agreed that Andy Warhol Foundation likely faces an uphill battle in prevailing on fair use, but the Court likely will remand the case to the lower court based on the guidance the Court will announce in evaluating the first fair use factor.

The panelists also covered a number of other key fair use cases over the past year involving a broad array of contexts, including social media, tattoos, theater, digital lending of books, sculptures, and YouTube videos.

Panelists Stephen Doniger (Doniger/Burroughs) and Xiyin Tang (UCLA) debated the viability of the Ninth Circuit’s “server test,” while John Wierzbicki (Vice-Chair, IP Section Copyright Interest Group) effectively moderated.

The server test, which was adopted by the Ninth Circuit in Perfect 10 v. Google (2007), stands for the general proposition that embedding of—or “inline linking” to—online copyrighted content is not an infringement of the copyright owner’s public display right if the defendant does not host the content on its own server. In that notable case, Google was previewing thumbnails of Perfect10 photos in its search results. Perfect10, a website and magazine, argued that Google infringed against its public display rights by showing the public the small photos. At issue was whether the thumbnail photos were copies. The Court ultimately decided that a website that embeds content only transmits instructions about where to find the content, not the content itself, and thus has not “displayed” the work “publicly.” So, Google’s embedding of the thumbnails was not a violation of Perfect10’s public display right because no copying had been done. Google was only instructing the public on where to find the photos.

Doniger argued that causation is of the utmost importance in analyzing the public display right. He pondered whether html text, in the form of a link to Perfect10’s photos, causes a display. The 9th Circuit thought not, but Doniger was not persuaded. He contemplated that the html link results in the public accessing the display of Perfect10’s photos, causing a violation of the right to public display.

Tang argued that the dichotomy existed between the user perspective and the purpose of the technology. To the user, there is no difference between what the html link does and seeing the photo. The right to public display is violated when the user sees the photos. On the other hand, the purpose of the technology impresses that no copying is necessary for embedding so it does not violate the public display right.

Largely at issue was whether the server test should even be used at all. The test is unique to the 9th Circuit and has not been adopted elsewhere. Both panelists agreed that the test would soon drop out of use because of this. Future cases will determine its fate.

Speakers: David Huebner, Arbitrator and Mediator, Chartered Arbitrator, CIArb Fellow, College of Commercial Arbitrators; Dana Welch, Arbitrator and Mediator Fellow and Vice President, College of Commercial Arbitrators FCIArb; and Marcus Quintanilla, Partner, Global Disputes, Jones Day.

What type of IP disputes can be arbitrated?
Contracts do not require an explicit clause to initiate arbitration. The speakers discussed how any commercial and joint venture contracts involving IP can be arbitrated. If there is no such clause and both parties want to undertake arbitration, they could enter into a submission agreement to initiate arbitration.

Why arbitrate?
The speakers discussed the advantages. These include efficiency, finality, and enforcement, confidentiality, and expert adjudicators who understand the industry and area of law.

Arbitration clause:
To ensure the arbitration goes smoothly, it is important to cover all the required details about the process in the clause including:

• The arbitral provider (JAMS/WIPO/AAA)
• The Rules
• Number of arbitrators/qualifications
• Limit damages? (recommended to address punitive damages, attorneys’ fees)
• Injunctive relief, emergency measures
• Concurrent jurisdiction? (recommended to carve out injunction for court)
• Any appellate procedures?
• Unambiguous language
• Choice of Law
• Confidentiality (recommended as best practice)
• Place of Arbitration

The speakers also recommended entering into a protective order at the start of the arbitration to ensure the confidentiality of the proceedings in the event confidentially is not explicitly mentioned in the clause.

Selection of arbitrator:
The speakers advised looking into the reputation of a potential arbitrator, mainly: (1) the time an arbitrator takes to decide an issue, (2) efficiency in terms of billing their time. This is in addition to ensuring the parties have decided on whether they would prefer a generalist or a specialist and that the said arbitrator is available.

Place of arbitration:
For international parties, the speakers especially stressed the importance to identify the governing rules carefully. It is also important for parties to research what would be the best place of arbitration i.e., the legal home of the arbitration, where the local courts will enforce the arbitration. It must be noted that hearings, however, can occur anywhere.

Choice of law:
Speakers recommended you (1) have access to the law, (2) understand the law. It must also be noted that the law will limit which arbitrators the parties can approach. The arbitration can also completely change based on which law is applied. Huebner discussed how one needs to be aware of the application of the law in each State. He shared his experience where he has seen advocates startled at the proceedings because the place of arbitration is a mere afterthought for a lot of clauses. The speakers advised against this and stressed on the importance of putting thought into the choice of law and place of arbitration and how they tie into each other.

Evidence:
In international practice, discovery is referred to as “information collection.” Also, the IBA rules of evidence are not binding law but based on the speakers’ experience, they set the standard. The speakers also explained the concept of hot tubbing in arbitration which involves having two expert witnesses testify sequentially back-to-back and how this could be useful in international disputes.

In the last segment, the lightning round, the speakers covered some common to-dos/don’ts:

• Educate the arbitrator and the parties about the technology to ensure everyone knows what they agree about with respect to the technology. Ensuring such clarity at the beginning of the proceedings ensures efficiency. 
• Joint reports are not always necessary and could be avoided as they do not add much value.
• Post-hearing brief: The speakers advised using the evidence to the parties’ benefit, to refer to the transcript to make the case for why your client should win. They recommend providing the arbitrator with a final judgment that they can share.

Speakers: Alex Cohen, Product Legal at Adobe; Brian Smith, Senior IP Counsel at Roblox

The speakers started by setting the context for the discussion – what is the common UGC or user-generated content in the Modern Era? They talked about blockchain, video games, the Metaverse, and real-time interactivity.

The speakers discussed some specific industry challenges such as (1) Metaverse – how to locate reported content in a 3D world, taking down an experience can be the equivalent of shuttering a small business, and dealing with unsophisticated parties. (2) Scaled Enforcement – huge content of numerous types, variables in rights holder’s content and abilities, rights holder expectations versus legal requirements. (3) Blockchain-published content.

How can we reduce the burden and frustration to deal with such challenges? The speakers discussed the importance of having a smart structure/data architecture in place. For example, tagging data in a way that will help us identify it will make the process more efficient. The speakers highlighted the value of collaboration and organizational partnerships between the product, engineering and operations/analytics teams and how this will help the company build an efficient data architecture.

Speakers cited blockchain technology as a good way to think about how storage works and in particular how things are stored and who has control. They also discussed how trust and safety teams handle notices and why the ‘report abuse’ buttons are always near the content. They explained that the latter is to ensure the user does not have to go through potentially offensive or disturbing content multiple times.

Cohen talked about how he ensures that all data is tagged on where it comes from and how he works with the product and design team to think about data schemes that will work for such tagging.

The speakers also recommended talking to the product team to understand from them what they would want to do when there is an issue, and how they would like to handle the situation when content has to be taken down. The speakers stressed the value of such open communication with the tech teams as this helps create a system that works for all.

The speakers also discussed how a lot of the tools are platform specific and that it may not be the best idea to automate the DMCA process. There may be new types of right holders and automating the process may unnecessarily complicate the process.

They also stressed understanding the expectations and norms of a platform and how this should be detailed in the terms of service.

On automation for fraud detection, Smith shared that on Roblox, developers are not shy and call out others when they are copying work. This is also a feature of the platform as it allows developer-to-developer conversations.

To conclude, the speakers advised on having a good relationship with the trust and safety teams and finding ways to deal with copyright trolls, especially for rational rights holders. They also discussed future and ongoing trends that include EU Copyright Directive and potential changes to safe harbors around the world, how more platforms will need to develop or integrate algorithmic infringement detection systems, practical solutions for maintaining the applicable safe harbor(s), how users weaponize the DMCA process to target content they disagree with, and that platforms need to be watchful for fraudulent reports.