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1. ipARCHVE UPDATE
I met with Michael Dee, of ipArchive to discuss the status of the image recognition technology that ipArchive had been testing with several PACA members and one of the large photo communities - Webshots. ipArchive had given a demonstration and met with several PACA members during the International meeting last November and was interested in keeping PACA abreast of the developments.

As a recap, ipArchive is developing image recognition technology or "fingerprinting" of photographs, so that copyright owners can monitor or protect their images from being uploaded onto photo community websites, and being exploited by users without consent. Although the new Digital Millennium Copyright Act (DMCA) provides that any unauthorized reproductions of work must be removed by the Internet Service Provider (ISP), the notice requirements to the ISP's are burdensome to copyright holders. No one can possibly scan sites with hundreds of thousands of images and then identify their images to provide adequate notice to the ISPs under the DMCA, in order for the images to be removed. As a result, ipArchive has been developing technology that can identify digital photographic images without human interface or by adding anything to the photograph such as watermarking or encryption technologies. This is accomplished by taking a fingerprint; obtaining statistically relevant distributions of light and color that are unique to each photograph, even in near frames. They are also testing this technology in the music and film industry.

An ISP such as Webshots will pay to use a database of these fingerprinted images to avoid permitting the use of unauthorized images on their site. Although users are told that they must be the owners of the photographs that are uploaded on the community site for sharing with others, PACA members have found many of their catalog and CD-ROM images, among others, are uploaded for anyone's unrestricted use on these sites. Once the images are fingerprinted, the ISP (i.e., Webshots) can run the photograph through the database. If a match is found, a copyright infringement notice pops up on the screen and the user cannot use the photograph. ipArchive had been testing this image recognition technology with the cooperation of several PACA members and Webshots during the fall. Apparently testing was completed around December 15, 2000. The image recognition technology essentially worked to their satisfaction. If images were flopped, upside down or cropped, they could still be recognized.

While the image recognition technology is effective, ipArchive is continuing to work with photo communities on where to insert the technology into the existing infrastructure. ipArchive is looking for a "real-time" solution for image recognition and copyright infringement notification as an alternative to the notice and take down requirements that are described in the DMCA.

The next issue was the cost of using the technology. It was clear from the demonstration at the PACA international meeting in November that members were concerned that any per image fee could be cost prohibitive. Unfortunately, ipArchive reported that they could not afford to offer the technology for free. The business model requires that they charge both the web communities and copyright owners. The proposal is to offer PACA members $1 per photograph per year, which is a break-even fee. They expect that members will only want to protect their marquee images, an estimated 5-10% of any archive. Since the images must be in digital format, it is recommended that members start with their most popular images that are already in digital form or are published in catalogs. Down the road, ipArchive also expects that that for a nominal amount more, it can "auto populate" websites (such as oFoto) for use of images for consumer applications such as coffee mugs and T-shirts. This would be an option for PACA members. (Currently members are not making any money if images are unknowingly on a community site such as Webshots and are used by the community for such applications.) The amount of fees would be split between ipArchive and the members.

Furthermore, the amount of images being uploaded on community sites each week is staggering. Webshots estimates that it receives 300-400,000 images per week. The majority of the images end up in the public folders. ipArchive is currently identifying the implementation of its technology into existing photo communities. However, when the ipArchive image recognition technology is used, and if an image is recognized as a copyrighted image, the user will receive a copyright violation warning and will be denied use of the image. The image will then be either blocked from being uploaded/downloaded and/or marked for deletion by the ISP. ipArchive has identified 50-70 communities and digital labs that allow the uploading, consumer sharing and consumer use of images. These would also be potential sites for the consumer use of images that can be monitored by the technology in the future. ipArchive is interested in any feedback from PACA members. You can contact ipArchive directly by emailing Michael Dee at Mike@iparchive.com.

2. ARTIST'S SCULPTURAL WORK FEATURED IN AN ARCHITECTURAL WORK DOES NOT GET SEPARATE COPYRIGHT PROTECTION
In a recent federal case, Leicester v. Warner Bros., the U.S. Court of Appeals for the 9th Circuit refused to extend separate copyright protection to artwork that had become a "functional part" of a building. The case was brought by the artist Andrew Leicester, after the building on which his work was part of, was featured in the film Batman Forever without his permission or credit.

The building's owner hired Leicester for the purpose of contributing "artistic development" to its new office building. Working with the building's architect, Leicester created three separate works that told an allegorical story about the history of Los Angeles. The works consisted of a fountain in the courtyard of the building, two sets of towers in the inside perimeter of the courtyard, and five towers that formed a "streetwall" along the perimeter of the courtyard. In 1994 Warner Brothers approached the building's owner about featuring the building in Batman Forever, to which the owners agreed without consulting either the architect or Leicester. As a result of this agreement, the seven towers created by Leicester were displayed extensively in the film and in several promotional items created to advertise the film.

After the film was released, Leicester brought suit against Warner Brothers, claiming that its display of the towers in the film without his permission was a violation of his copyright in the works. Warner Brothers defended this charge by relying on §120(a) of the Architectural Works Copyright Protection Act (AWPCA) of 1990, which provides that, "the architectural work copyright does not include the right to prevent the making, distributing, or public displaying of pictures of the work if the building is "ordinarily visible from a public place." Leicester argued this section of the AWPCA did not require the taking away protection for pictorial, graphic, and sculptural works.

The court disagreed with Leicester and upheld the lower court's ruling for Warner Brothers. In their decision the court emphasized Congress' intent to allow publicly visible buildings to be freely photographed without fear of any copyright violation. The court stated that because Leicester's work was a functional part of the building, it too could be freely photographed. While this ruling limits the rights of artists whose sculptural work is often featured on buildings, it is a victory for photographers in that it eliminates any hesitation surrounding buildings and photography that may have existed with photographers. This case seems to assure that so long as the building featured in the image is publicly visible, it, and the artwork featured on it, can be freely captured and displayed without fear of violating any copyright protections.

A PACA member, Corbis, has recently been sued in California Federal Court for merely displaying on their web site photographs of buildings, which include murals by the artist Susan Kelk Cervantes. This issue of whether public art (such as murals) can be photographed is an open question that has yet to be addressed by the federal courts. Many photo agencies have "travel" files that will likely contain images of public spaces that include public artwork. Corbis' contracts with its clients are modeled in part after the PACA recommended contracts, and advise clients that they are responsible for obtaining any additional permissions that may be required before using an image. It has always been understood that photo archives only represent that the photographer who took the image is the copyright holder of the image, and do not address copyright ownership of what is depicted in the image. This action against Corbis attempts to place the burden of obtaining additional permissions on the archive rather than the user of the image, and asserts that mere archiving and displaying an image is a commercial use.

The court holding in Leicester v. Warner Bros., seems to suggest that the protection in pictorial, graphic, and sculptural works cannot be separated from architectural works as it can be in "useful articles." If this is in fact the case, then a mural on a building will be considered part of a building, thus allowing it to be freely photographed and displayed, so long as the building is publicly visible. We will be keeping up status of the action against Corbis and will notify PACA members of the progress of the litigation.

3. COPYRIGHT PROTECTION AND EURO BANKNOTES
A PACA member recently inquired about taking still photographs of the new Euro currency, and more specifically if there are any limitations or restrictions on this activity. After some research, I have discovered the following information. In 1999 the European Union adopted a unified system for copyright protection of the new Euro banknotes. Under this system, each member country in the Euro area is to follow a set of uniform reproduction rules for Euro banknotes. This means that any reproductions (i.e., photographs) of any banknotes will be governed by one standard, regardless of the country of origin. Additionally, the enforcement of the protection for Euro currency is also centralized. If an unauthorized use is committed by someone outside the EU Member State (i.e., someone from the United States) then the matter will be referred to the European Central Bank for prosecution, rather than to the Member States court system.

Generally, reproduction of Euro currency is authorized without penalty only when it meets the following conditions.

The reproduction may only be in the form of photographs, drawings, paintings, and films, and generally for images in which the basic focus of the image is not the banknotes themselves;

The banknote may only be an element of the image; and

There cannot be any close-up views of the banknotes' designs.

Any reproduction that does not fit into the above conditions must be approved and authorized by either:

The National Bank of the country whose banknote is featured; or

The European Central Bank.

Additionally, even if a reproduction is created within the confines of the above restrictions, it may still be denied authorization (or prosecuted) if the reproduction creates a conflict with the unalienable moral rights of the author or the banknote designs. Moral rights are an additional right given to artists in almost all European countries. Moral rights are the protection of the author's integrity. For example:

The right to be known as the author of his work;

The right to prevent others from being named as the author of his work;

The right to prevent others from using the work or the author's name in such a way as to reflect adversely on his professional standing.

Because the information stated above is new we have found no interpretation of the requirements. However, we will keep you update if we receive additional information. Also, while the European Union is a community of nations, each country still has a its own governing body of laws. For this reason, please contact me for each country's specific restrictions such as their views on "moral rights," as the need arises.

4. DMCA PROTECTION FOR FOREIGN WORKS

Part One:
Recently we have received several inquiries from our members and foreign affiliates concerning the registration and protection of foreign photographs and artworks ("Works') under United States copyright law. This week we will address the first part of these inquiries. Members and affiliates should note that the following information regarding foreign Works is generally applicable to any country with copyright relations with the United States even though the inquiry deals specifically with two concerns of a Taiwanese stock photo agency. The affiliate member asked (1) whether a United States branch of a Taiwanese company can register photographs and paintings created in Taiwan for United States copyright protection and (2) whether registered foreign Works will be protected under the Digital Millennium Copyright Act. The second part of the question will be addressed next week.

United States Protection of Foreign Works and the Registration Requirement
United States copyright registration is not required to receive United States copyright protection for either foreign or United States Works. All Works eligible for United States copyright protection are automatically protected under United States copyright law from the moment of their creation. Section 102 of Title 17 of the United States Code (The Copyright Act) lists examples of Works that can be copyrighted such as "pictorial, graphic and sculptural works" which include drawings, paintings and photographs.

Section 104 of the Copyright Act lists the requirements for copyright protection. A distinction is made between works defined as either "published" or "unpublished". Section 104(a) states that all unpublished Works (Works that have not been made available to the public) are eligible for copyright protection, regardless of whether they were created by United States or foreign Authors.

In other words, all unpublished Works by both United States and foreign authors are automatically protected under United States copyright law from the moment of creation - no formalities such as registration are required.

Conversely, section 104(b) states that published Works (Works that have been made available to the public) must meet one of the eligibility requirements listed in section 104(b) in order to receive United States copyright protection. If a published Work qualifies for protection under one of the eligibility requirements listed in section 104(b), like an unpublished Work, it is automatically protected under United States copyright law as well; no formalities such as registration are required. Eligibility requirements for published Works listed in section 104(b) include (1) the Author was a national or domiciliary of the United States or a country which has copyright relations with the United States on the date of first publication, or (2) the Work was first published in the United States or a country which has copyright relations with the United States.

Circular No. 38a, published by the Copyright Office, lists international copyright relations of the United States. (This circular can be obtained directly from the Copyright Office or from its website [http://www.loc.gov/copyright/circs/circ38a.pdf ]. Since there is no "international' copyright law, protection against unauthorized use depends on the law of the country. In addition most countries are party to international copyright conventions and treaties, the principal ones being the Berne Convention and the Universal Copyright Convention (UCC). If the country in which protection is sought is a party to one of the international copyright conventions, the work generally may be protected by complying with the conditions of that convention. The United States joined Berne Convention members in March 1989.

Taiwan is formally recognized by the United States as part of the People's Republic of China, which has copyright relations with the United States by virtue of the Berne Convention. Thus, like unpublished Works, Works published in Taiwan also receive automatic United States copyright protection from the moment of creation without registration (because the United States formally recognizes Taiwan as part of a country that has copyright relations with the United States. Therefore, Works published in Taiwan meet one of the eligibility requirements of section 104(b) mentioned above).

However, it is important for all Authors, United States and foreign to distinguish between United States copyright protection and United States copyright remedies. While neither United States Authors nor foreign Authors are required to register their unpublished or eligible published Works, both

United States and foreign Authors are required to register their Works in order to obtain certain remedies. Moreover, the remedies afforded to Authors who have not registered their Works differ depending on (1) whether the Author is foreign or not and (2) when the registration takes place. For example, United States Authors must register their Works before they can even sue for copyright infringement. So for United States Authors, registration is literally the keys to the courthouse and they cannot obtain any remedies until they register their Works.

Foreign Authors, on the other hand, can sue for copyright infringement without registering their Works. However, they like United States Authors will not be entitled to receive statutory damages unless their Works were registered prior to suit. Statutory damages are an amount ranging between $750 and $30,000 per infringement, awarded in the court's discretion, which can be increased up to $150,000 per infringement, in the court's discretion, if the court finds that the infringement was committed " wilfully". Foreign Authors, as well as United States Authors are also not entitled to receive attorney fees in the case of successful litigation unless their Works are registered prior to suit.

In addition to being able to receive attorney fees and being able to elect statutory instead of actual damages, there are also other advantages that accompany registration. (In the case of the infringement of a photograph, statutory damages are often elected since actual damages are typically equated to a standard license for the unauthorized use). In addition, registration affords copyright owners an evidentiary advantage in a copyright infringement suit because registration serves as proof of copyright ownership. Registration also allows copyright owners to record the registration with the United States customs office to prevent the importation of infringing copies of their Works into the United States. Therefore, just like United States Authors, it can be advantageous for foreign Authors to register their Works even though registration is not required. Moreover, any person is legally entitled to register an eligible Work as long as the person is (1) the Author (2) the copyright owner or (3) the duly authorized agent of the Author or copyright owner. Therefore, as long as the United States branch of a Taiwanese company falls into one of the above categories, it is permitted to register a foreign Work (if the company elects to register their Works).

The disadvantage to registering foreign Works is the expense, time and sometimes difficult "deposit" hurdles involved in submitting the required application, deposit of the Work and fee (currently $30 per Work). The decision to register a Work, or a selection of Works for United States copyright becomes a business decision which each individual photo agency and archive must make. One relevant, and perhaps decisive consideration in deciding whether to register foreign Works will be whether the Work is published or unpublished within the meaning of the Copyright Act because certain unpublished Works may be eligible for group registration with one application and one fee (currently $30), whereas published Works in general must each be registered individually (each Work requires a separate application and $30 fee). Additional details on how to register foreign works and catalogs will be in a following update. Therefore, the ability to register a large collection of photographs or other artwork may be prohibitive.

Works are published within the meaning of the Copyright Act if copies of the Work have been distributed "to the public by sale or other transfer of ownership or by rental, lease or lending;" or if copies of the Works are offered to be distributed to "a group of persons for further distribution or public display. "Whether a Work meets this definition will not always be clear. For example, images in a catalog would clearly be considered published. It is generally understood that Works placed on the Internet are "published". Works merely displayed to the public are generally not considered published.

Another relevant consideration in deciding whether to register a foreign Work or any Work is when publication took place and/or whether an infringement has occurred. Statutory damages and attorney fees based on an infringement are only available to Authors who (1) have registered their Works prior to infringement or (2) if the infringement occurs before the effective date of registration and the work was registered within three months of first publication.

5. DMCA PROTECTION FOR FOREIGN WORKS

Part Two.
Last week we addressed the first part of a two-part inquiry that we received from one of our international affiliate members concerning the registration and protection of foreign photographs and artworks ("Works"') under United States copyright law. This week we will address the second part of this inquiry: whether foreign Works are entitled to protection under the Digital Millennium Copyright Act. Members and international affiliates should note that the following information is generally applicable to any country regardless of whether it has copyright relations with the United States even though the inquiry deals specifically with Taiwan (which does have copyright relations with the United States).

UNITED STATES PROTECTION OF FOREIGN WORKS UNDER THE DMCA
The Digital Millennium Act ("DMCA") was signed into law in October 1998 in order to fulfil a requirement of joining two World Intellectual Property Treaties (the WIPO Copyright Treaty and the WIPO Performances and Phonogram Treaty) which both require member nations to protect digitally transmitted Works in certain ways. The DMCA is comprised of five titles, each of which amends Title 17 of the United States Code ("The Copyright Act") in various ways. This update will only cover the first title of the DMCA because it is the title most relevant to photographers and their representatives. However the Copyright Office website www.loc/gov/copyright) provides a concise I 8-page summary of each title of the DMCA if you would like further information.

The first title of the DMCA contains a new provision (§ 1202) which is an especially important piece of legislation for photographers and their representatives because it provides, among other things, new civil and criminal remedies against those who remove or falsify copyright management information from copyrighted Works on the Internet. Copyright Management Information ("CMI") includes information typically contained in a notice of copyright such as the title, the name of the copyright holder, identifying numbers, and terms and conditions for use.

Section 1202 implements two new prohibitions. The first prohibition makes it unlawful for persons to knowingly provide, distribute or import false CMI for distribution "with the intent to induce, enable, facilitate, or conceal infringement." The second prohibition makes it unlawful to intentionally remove or alter CMI, or knowingly distribute or import for distribution CMI that has been removed or altered. Remedies for violations of this provision are also quite high. For example, statutory damages (an amount awarded in the court's discretion) range from not less than $2,500 and not more than $25,000 per violation. Moreover, these damages may be tripled if the court finds that the infringer is a repeat offender (has violated section 1202 twice within three years). Criminal remedies for a violation of this section are also provided for.

The DMCA is different from the rest of the Copyright Act in several ways that are important to understand. First, the DMCA does not prohibit copyright infringement, the DMCA prohibits certain activities that could lead to copyright infringement. Second, the remedies afforded under the DMCA are different from the remedies provided for under the Copyright Act for copyright infringement. Third, the DMCA entitles "anyone injured by a violation" of section 1202 to sue for statutory damages, unlike the OD Copyright Act that only permits certain persons to sue for statutory damages. Moreover, Works (both United States and foreign) are not required to be registered in order to receive DMCA statutory damages, unlike the Copyright Act that will only grant statutory damages for infringements that take place after registration unless the Work is registered within three months of the first publication. Since the DMCA is relatively new, there is little judicial interpretation from the courts. One case in Federal Court in California refused to apply the DMCA prohibition against CMI removal in a case involving a web crawler that collected thumbprint size images because the copyright ownership information was not attached to the image file. Based on this case, it is recommended that copyright information or other CMI be attached to the image file.

6. NAPSTER
While the Napster litigation is far from over, a recent ruling by the Ninth Circuit may force Napster to either settle with record and music publishing companies ("Plaintiffs") or go out of business. Napster is an Internet site that provides, among other things, free software that allows Napster users to find and copy MP3 music files (digitally compressed songs) from each other while they are logged onto the Napster site.

Many of the MP3 music files copied by Napster users contain unauthorized copies of Plaintiffs' copyrighted sounds recordings and musical compositions ("Works"). Plaintiffs claim that Napster is liable for contributing to copyright infringement because Napster provides software and other technological support that allows its users to infringe Plaintiffs' Works. Consequently, Plaintiffs argue that Napster should be held liable for the unauthorized copies of Plaintiffs' Works made by Napster users. Moreover, Plaintiffs argue that a pre-trial injunction should be issued to restrain Napster from operating until the question of Napster's liability is resolved at trial. Plaintiffs are entitled to a pre-trial injunction if they can show both that they are likely to succeed at trial and that irreparable harm will result if a pre-trial injunction is not issued.

After hearing arguments on both sides, a district court found that Plaintiffs sufficiently demonstrated that they are likely to succeed at trial and issued a pre-trial injunction that prohibits Napster from "copying, downloading, uploading, and transmitting or distributing" Plaintiffs' copyrighted Works until trial. Napster appealed the issuance of this pre-trial injunction to the Ninth Circuit (a higher court) and persuaded the Ninth Circuit to delay enforcing the injunction (to let Napster stay in business) until the Ninth Circuit heard Napster's appeal. Napster argued that the district court (lower court) incorrectly found that Plaintiffs were likely to succeed at trial and that therefore, the pre-trial injunction issued against Napster was wrongfully issued. Napster alleged that plaintiffs are not likely to succeed at trial for a number of reasons including that Napster is exempt from copyright liability under the "Safe Harbor" provision of the Digital Millennium Copyright Act ("DMCA").

The Safe Harbor provision shields certain Internet servers from copyright liability if they meet certain requirements which include that the Internet servers establish and enforce a copyright compliance policy. The Ninth Circuit evaluated and rejected each of Napster's arguments as to why Napster believed the pre-trial injunction was wrongfully issued and held that none of Napster's arguments were persuasive enough to warrant overturning the pre-trial injunction issued by the district court.

However the Ninth Circuit did find the scope of the pre-trial injunction issued against Napster overly broad. The Ninth Circuit found, among other things, that by prohibiting Napster from "distributing" plaintiffs' copyrighted Works, the injunction improperly placed the burden on Napster to investigate whether the MP3 files copied by its users contain unauthorized copies of plaintiffs' Works. Instead, the Ninth Circuit found that Plaintiffs have the burden of identifying MP3 files that contain unauthorized copies of Plaintiffs' Works. The Circuit court found that Napster only has a duty to remove MP3 files containing authorized copies of Plaintiffs' Works after Napster is notified of such content by Plaintiffs. Therefore, since the Ninth Circuit found the pre-injunction overly broad, it sent the case back to the district court to refashion the injunction so that the burden of investigation and notice rests on plaintiffs.

Many copyright holders view this ruling as a huge victory for all copyright holders, however celebration may not yet be in order. While this ruling may foreshadow Plaintiffs' ultimate success at trial, this ruling did not decide the question of Napster's ultimate liability. This ruling only decided that it is fair to restrain Napster from operating until the question of Napster's liability is decided at trial. Nonetheless, this case is an especially important case for photographers and their representatives to follow because the outcome in this case will undoubtedly have an effect on the viability of other sites similar to Napster, that currently allow users to upload unauthorized copies of copyrighted photographs without compensation to photographers or their representatives. However, the burden is on the copyright owner to identify the infringing uses and notify these sites, a daunting task in light of the number of image files that exists on community photo sites that permit image sharing. Members have complained that community photo sites such as Webshots, have so many images uploaded each week, that to police the sites is impossible. The only way to police such sites may be with technology that identifies the infringing uses of the images. These are the challenges that all copyright will be facing with the proliferation of digital copying. We will continue to monitor this case and keep you updated.

7. MORE ON THE DMCA
The Digital Millennium Copyright Act (DMCA) was signed into law in October 1998. As previously mentioned in other updates, Title II added a new section to the Copyright Act (section 512) that created new limitations on liability for online service providers. These limitations provide a complete bar to monetary damages and restricted injunctive relief to qualifying service providers. Section 512(c) limited the liability of service providers for infringing material that is hosted on their website. To be eligible ISP had to meet three requirements:

1)No requisite level of knowledge of the infringing activity 2) If the provider has the right and ability to control the infringing activity, it must not receive a financial benefit attributable to the infringing activity, and 3) upon receiving proper notification of the claimed infringement, the provider must expeditiously take down the material. The provider must have filed with the Copyright Office a designated agent to receive notice of claimed infringement.

The requirement of notifying a provider that it is hosting infringing photographs has proven to be a major hurdle and obstacle to having copyrighted images removed from web sites that allow communities to upload images for sharing, similar to communities that permit the sharing of music. Whereas music has titles that are easily searched and recognized on a site, it is difficult to discover infringing photographs on a large site co-mingled with thousands of others. For the first time a federal court has recently looked at case involving Title II of the DMCA that deals with the notice issue. (ALS Scan, Inc. v RemarQ Communities, Inc., 4th Cir. 2001).

ALS Scan Inc. (ALS) is in the business of creating and marketing "adult" photographs. It brought an action against an Internet service provider (ISP), alleging violations of the Copyright Act and Title II of the DMCA. RemarQ, the ISP provided access to newsgroups to share information on a wide range of topics. Although it did not monitor, regulate or censor the contents of the articles posted in the newsgroup by the subscribing members, it has the ability to filter information and screen its members from logging onto certain newsgroups, such as those containing pornographic material. Two of the newsgroups contained ALS's name in the title and contained hundreds of postings that infringed its copyrights in the photographs. Upon discovering these postings, ALS Scan sent a letter to RemarQ stating that both those newsgroups were created for violating their copyrights and contained virtually all copyrighted images. They were ordered to cease carrying the newsgroups within 24 hours. RemarQ refused to comply with the demand but advised ALS Scan that they would eliminate individual infringing items from the newsgroup if ALS Scan identified them "with sufficient specificity". Thereafter an action was commenced.

ALS in its complaint alleged that RemarQ possessed actual knowledge of the infringing material but refused to block or remove access to the material. RemarQ filed a motion to dismiss stating that ALS's failure to comply with the notice requirement under the DMCA provided it with a defense to the copyright claim. The District Court (trial court) granted the motion. An appeal followed. The Fourth Circuit (the federal appellate court) in looking at whether RemarQ could be liable for DIRECT copyright infringement for passive acts engaged in through technology, concluded that Title II of the DMCA controlled and only addressed the claims under the DMCA.

ALS contended that it substantially complied with the notification requirement of the DMCA, depriving RemarQ of its safe harbor from copyright liability under the provisions that protect ISPs. RemarQ argued that it did not have knowledge of the infringing activity as a matter of law because the copyright holder had failed to identify the pictures that formed the basis of the copyright complaint. The court looked at Section 512(c) and determined that in order for an ISP to qualify for this safe harbor it must meet all three requirements that are described above. In reviewing the purpose of the DMCA the court noted that immunity is granted only to "innocent" service providers who can prove that they do not have actual or constructive knowledge of the infringements. The protection of the DMCA is lost the moment that the ISP loses its "innocence. Looking at he balance of interest between the copyright holder and the service provider, the court found that the DMCA allowed the holder to put the ISP on notice that only substantially complied with the prescribed format and did not require perfection. Significantly the court held that " in addition to substantial compliance, the notification requirements are relaxed to the extent that, with respect to multiple works, not all must be identified, just a "representative" list. And with respect to location information, the copyright holder must provide information that is reasonably sufficient to permit the service provider to "locate' the material." The court found that the notice requirement was not intended to burden the copyright holder with the responsibility of identifying every infringing work or even most of them.

In this case, the initial letter satisfied the DMCA notice requirement in that it identified two sites created for the sole purpose of publishing ALS works, virtually all the material was its copyrighted work and referred RemarQ to its web address where it could find ALS copyright information. It noted that ALS material could be identified because its name and copyright symbol was next to it. Therefore the court reversed the ruling dismissing the action and sent the case back to the district court to proceed on its copyright claims.

While most agencies and photographers will not be so fortunate to find infringing photo community sites which identify newsgroups with their name, this case is relevant in that it relaxes the burden on copyright holders of multiple works who cannot perfectly meet the DMCA notice requirements of identifying with particularity each infringing photograph on a site. It may be sufficient to satisfy the location requirement by identifying community members by name that have posted some infringing photographs and either send the ISP to a website with a database of copyrighted photographs, or send a disk or catalog to the ISP with multiple images. Under this ruling, this notice would place the burden on the website to remove any infringing images included on its site or face liability for copyright infringement. This is significant since no members have the staff to scan through what could be up to millions of images located on photographic community sites such as Webshots, where potentially thousands of images are added daily. The relaxed interpretation of the notice requirement should be helpful to copyright owners and their representatives in removing infringing photographs from Internet websites.

8. MONEY OWED TO UNITED STATES STOCK PHOTO AGENTS
Recently it has come to our attention that a Swedish reproduction rights organization (a collecting society) called BONUS is holding approximately $13,000 owed to United States stock photo agencies. These funds were collected over the past ten years on behalf stock agencies that are rights holders (own the copyright to at least a portion of their image library). There are two organizations that have proposed to collect these funds on behalf of PACA. One organization is the Copyright Clearance Center (CCC), a United States collecting society. The other is BLF, a Swedish picture association similar to PACA. Both organizations would charge a percentage for administrative costs to collect the funds (approximately 5-15%) subject to negotiation.

In order to understand why these funds are being held it is necessary to understand the function of a reproduction rights organization (RRO) such as BONUS. RROs are non-governmental organizations that collect license fees for published reproductions of copyrighted works on behalf of copyright holders. RROs were established around the world to make it easier to comply with copyright law. The theory is that by having central organizations around the world to collect reproduction license fees on behalf of all copyright holders, the public will be more likely to comply with copyright law. RROs also increase the likelihood that copyright holders will be compensated for use of their works abroad because foreign RROs generally have agreements with each other to exchange funds on behalf of each others nationals.

RROs derive their authority to collect reproduction license fees from national laws of the country in which the RRO is located. Because of differences in national laws, RROs operate differently in each country. We will use photographs to illustrate some of the differences between United States law and Swedish law. For example, under United States law, individual copyright holders and or their representatives set license fees and are the only ones who can authorize a United States RRO to collect a reproduction fee on their behalf. Under Swedish law, on the other hand, license fees to reproduce published copyrighted works are set by Swedish law based on the type of work. In other words, Swedish law determines how much a Swedish RRO should collect from the public for the right to reproduce photographs, not individual copyright holders or their representatives. Swedish law also authorizes Swedish RROs such as BONUS to collect reproduction fees on behalf of individual copyright holders.

In addition, Swedish laws do not require that Swedish RROs obtain specific identification about the work copied such as the title or author("Non-Title Specific Photographic Works"). The $13,000 collected by BONUS is for Swedish reproductions of Non-Title Specific Photographic Works over the last ten year period. As we understand it, these funds were designated by BONUS according Swedish statistics to be distributed to photo agents who are also copyright holders. Since PACA is the only trade organization in the United States for stock agents, BONUS has asked PACA whether it wants CCC or BLF to collect these funds on its members' behalf. CCC already has an agreement with BONUS to collect similar Non-Title Specific funds for individual photographers as well as other artists' organizations.

Upon reviewing these proposals suggested thus far, it has became clear that no matter which organization collects these funds, it will be impossible to determine a way to accurately distribute these funds back to rightful stock photo agency. Because the funds are Non-Title Specific and the amount is relatively insignificant, it is cost prohibitive to hire experts to devise a formula for distribution. For example, collecting societies that represent music publishing companies collect millions of dollars each year and have developed statistical formulas to determine how to most equitably divide the royalties collected among authors and music publishers. After discussing this situation with experts in this area, we have concluded that it would cost more money to determine how to distribute the money than the actual amount collected.

CCC is willing to enter into an agreement to accept this money from BONUS but has not yet told PACA how it would distribute it. CCC has told PACA it is unwilling to devise a distribution model for this amount of money. Moreover, if CCC collects this money it wants a 5% administration fee as well as a letter accepting responsibility. In either event, regardless of which organization collects this money, PACA and its members will still need to determine how this money should be distributed. When CCC cannot determine how to distribute money collected for Non-Title Specific Work, CCC usually uses the money to educate the public about copyright compliance or to cover their own administrative costs.

BLF, the Swedish picture association also has the same dilemma when they receive reproduction fees for Non-Title Specific Works. Since those fees cannot be distributed in an economical or practical way, it elects to use the money for various causes that benefit their members such as copyright education, scholarship funds or legal funds to support copyright actions. Therefore BLF recommends that PACA members similarly resolve this issue. BLF has proposed to also collect this money and give it to PACA to benefit its members for which it will also charge an administrative fee for performing the service (to be negotiated).

This option sounds the most practical but it will require PACA to amend its by-laws to accept these funds. Furthermore it will also require the approval of PACA members who are also copyright holders. If no cause of action is taken by PACA, is likely that these funds will be deemed" refused" and a collecting society will end up using these funds to cover their own administrative costs. These options are not exhaustive and are simply the only proposals that we have examined to date. Therefore we are interested in receiving feedback from our members who are rights holders.

RIGHT HOLDERS ARE PACA MEMBERS WHO EITHER OWN COPYRIGHT TO IMAGES BECAUSE THEY ARE THE PHOTOGRAPHER-OWNER OF THE AGENCY; OWN COPYRIGHT TO PHOTOGRAPHS UNDER A "WORK FOR HIRE" AGREEMENT, OR HAVE PURCHASED COPYRIGHTS IN COLLECTIONS. BECAUSE BONUS HAS REQUESTED THAT PACA RESPOND TO THEIR REQUEST FOR DISTRIBUTION, IT IS IMPERATIVE THAT THOSE AGENCIES CONTACT PACA PRESIDENT, SONIA WASCO PRIOR TO MARCH 13, 2001. SONIA CAN BE REACHED AT 717-627-2285 OR EMAIL TO SW@HEILMANPHOTO.COM.

REMINDER TO THE MEMBERSHIP
As a PACA Voting, Provisional, Pre-Provisional or Auxiliary Member, you are allowed one "free" phone call to the PACA Counsel per program/calendar year. If your needs are those which require additional research or work by Ms. Wolff, you should expect to be billed accordingly. Please make sure you understand the nature of your request and its demands during the call and clarify any additional costs with Nancy at that time. Thank you!!

9. KAPLAN'S "WING TIPS OVER THE EDGE" AND BENVENUTO'S COMPETING IMAGE ARE NOT FOUND TO BE SUBSTANTIALLY SIMILAR
A federal district judge from New York dismissed photographer Peter B. Kaplan's (Kaplan) claim for copyright infringement against the Stock Market Photo Agency, Inc. (Stock Market) and the Fox News Network, (Fox). The complaint alleged that the Stock Market licensed an "imitation" photograph created by Bruno Benvenuto to Fox for advertising purposes. Both images depicted a man in a business suit with wing tip shoes standing on the ledge of a high building, contemplating a leap. The court found that that the works were not "substantially similar" because the similarities between the two images arose from "non-copyrightable" elements and the photographer's central concept of a businessman contemplating a leap was an unprotectible idea.

When a work is not directly copied, in order to prove copyright infringement, a creator must establish access to the work and substantial similarity. The defendant's motion to dismiss the infringement claim was based on the assertion that Kaplan could not establish substantial similarity between the two works. The court is required to compare the work side by side and ask whether an ordinary observer would recognize that one work was copied from the other. The court recognized that this test is an inexact science and is case specific. A fundamental principle of copyright law is that copyright does not protect an idea, only the expression of an idea. Where the line between the idea and the expression of the idea crosses is often a difficult determination. In making the comparison, the court borrowed a doctrine known as "scenes a faire" used in analyzing infringement cases in literary and dramatic works. It means that certain choices in incidents, characters and scenes that are standard in the treatment of a given topic are not protectible under copyright law.

The court, in comparing the two photographs, determined that the topic of an exasperated businessman contemplating a leap from a tall building is standard in today's fast paced business climate, especially in New York. (NASDAQ investors?) Therefore, the subject matter of the photograph is unprotectible and the choices that necessarily flow from that standard setting are not protectible either. These choices included the pose of the man standing on a roof of a ledge of a building with shoes partially extended. The court found that it would be impossible to portray the subject matter without using that pose. The choice of wardrobe (a pinstriped business suit and wing tip shoes) was found to be characteristic of a businessman's dress and also not protectible. In addition the angle of the shot, the businessman looking down at the street, was essential to expressing the "jumper's own viewpoint" and was considered to be the most common viewpoint in this scenario. Accordingly, the choice of camera angle was also unprotectible.

The court also examined the background, perspective, lighting, shading and color, the copyrightable elements considered in a photograph and found that the photographs were not substantially similar in that respect either. Notably, Kaplan's photograph was a horizontal panoramic view emphasizing breadth. In contrast, Benvenuto's photograph was a narrow vertical photograph emphasizing depth. The court compared the activity in the street, noting one was narrow with larger vehicles, the other wider with mostly yellow cabs. The court also found the moods to be substantially different, depicted by the lighting, shading and coloring, finding that Kaplan's photograph was "somber" and "thoughtful" and Benvenuto's "sketchy" and "edgy". As a result, the court found that the only similarity between the two photographs to be based on unprotectible elements associated with the underlying subject matter. Stating that Benvenuto added his own originality in expressing the underlying idea of a businessperson contemplating a leap from a tall building to the street below, the court dismissed the infringement action.

This case demonstrates the difficulties inherent in any copyright infringement action involving similar ideas. Are the elements copied based on the idea, or are they the protectible choices made by the photographer? Where does inspiration end and copying begin? Since these are case specific determinations, there are no hard and fast rules to follow. There are many universal ideas and concepts expressed in photography. No one wants to be embroiled in a lengthy legal battle over whether one work copied another of a similar subject matter. If there is any guidance in this case, it is that even if the subject matter is similar, the photograph must still be original in the way the idea is expressed, including the choices in selecting non-essential elements within the photograph.

TASINI BRIEF:
Nancy Wolff and Lonnie Schroeder have been sent a copy of the Amicus curiea brief filed in the Supreme Court of the United States in which PACA joined with ASMP and other artist organizations in support of the freelance writer Tasini in its copyright infringement action against the New York Times and other publications. This case involves whether publications can create CD-ROMs from past publications or place articles on a database such as Lexis without compensation to the freelance writer/artist. The Supreme Court is scheduled to hear the case on March.

10. COURT DEFINES MEASURE OF ACTUAL DAMAGES IN INFRINGEMENT ACTION
by Nancy E. Wolff, PACA Counsel, Wolff & Godin LLP
The Second Circuit, (the federal appellate court in New York) recently described circumstances under which a plaintiff may recover the value of a lost license in a copyright infringement action.

In Davis v The Gap Inc., the plaintiff Davis was in the business of designing artful and original designs of eyewear. These designs were particularly striking and unusual as perforated metallic discs or plates replaced what would be otherwise be occupied by regular lenses. The plaintiff went to great lengths to market his products to "stylish and popular entertainers," as well as various fashion designers and publications. The Gap clothing company ran a series of advertisements exhibiting people of diverse lifestyle and backgrounds. One of the ads depicted a group of young individuals of Asian appearance, standing in a V formation, dressed in black, each wearing distinctive eye shades. The subject at the apex of this V formation wore plaintiff's eyewear design. Although all of the subjects were provided with Gap clothing to wear for the photo shoot, each was apparently told to wear their own accessories. The plaintiff brought a copyright infringement action seeking a declaratory judgment of infringement as well as damages for an unpaid license fee, a percentage of the Gap's gross profits resulting from the use of plaintiff's eyewear, punitive damages and attorney's fees.

In order to recover damages for the infringer's profits, a plaintiff must submit sufficient evidence of defendant's profits that bear a reasonable relationship to the act of alleged infringement. In other words, it is not enough to show the defendant's revenues from the sale of everything sold, but rather a plaintiff must specifically show how these revenues are reasonably related to the infringing act. This was precisely the problem in the Davis case. Mr. Davis submitted evidence of increased net sales in the corporate parent of the Gap stores. As this corporate parent oversees the sale of numerous items, only one of which is eyewear, the court deemed this evidence insufficient to disgorge the Gap of an appropriate percentage of profits.

Since the artwork was not registered before the infringement, statutory damages, punitive damages and attorneys' fees could not be awarded.

Actual damages, on the other hand, focus on the plaintiff's lost sales, lost opportunities to license, or diminution in the value of the copyright. In the Davis case, Mr. Davis' actual damages was a lost opportunity to license his product to the Gap. The court held that a lost opportunity to license is recoverable as compensatory damages under appropriate circumstances. Factors the court considered were 1) whether the infringement was innocent, 2) whether the owner is reasonably compensated by other elements of the award, and 3) whether such an award would impose an unreasonable burden on the infringer. Most importantly, the amount of damages may not be based on undue speculation. The copyright owner must be able to show that the thing taken had a fair market value in order to make out his claim that he has suffered actual damages because of the infringer's failure to pay the fee. Market value therefore plays a crucial role in determining the amount of the actual damages. Mr. Davis prevailed in his claim of actual damages for loss of a licensing opportunity by submitting evidence that a magazine previously compensated him with a certain amount when using one of his designs for a particular picture. This dollar amount provided the court with sufficient evidence to calculate an appropriate amount of damages.

This case has relevance to photographers and stock companies for two reasons. First, in licensing photographs, care should be taken to make sure that no unique objects are depicted in the photographs, such as copyrighted jewelry, eyeglasses, furniture or other works of art that would require a license. Second, the case confirms that an appropriate measure of actual damage when a photograph is reproduced without permission is a retroactive license fee based on market value. Since photographs are typically licensed based on use, evidence as to licenses for similar uses should enable the copyright holder to prevail in an action for damages. Of course, if the photograph is registered before the infringement occurred, actual damages need not be established, and the court can award statutory damages as well as attorneys' fees.

11. 11TH CIRCUIT HOLDS NGS LIABLE FOR COPYRIGHT INFRINGEMENT OF PHOTOGRAPHS USED IN CD-ROM "THE COMPLETE NATIONAL GEOGRAPHIC"
by Nancy Wolff, PACA Counsel, Wolff & Godin, LLP
Freelance photographer Jerry Greenberg sued the National Geographic Society and National Geographic Enterprises (collectively "NGS") in the Federal District Court of the Southern District of Florida for infringing the copyright in four of his photographs included in the thirty volume set of CD-ROMs, "The Complete National Geographic". One image was used in an introductory moving cover sequence of 10 covers while the others were within the digitally reproduced magazines. The lower court dismissed Greenberg's action on summary judgment in favor of the NGS finding that the CD-ROM was a "revision" of a prior collective work that the NGS was entitled to publish under the copyright it owned in the original magazines as a collective work. (Summary judgment means that there is no factual dispute for trial and the court can decide just based on the law). On appeal to the 11th Circuit ,(the Appellate Division for Florida), the court held that the CD-ROM's were not revisions but new works that fell outside the scope of the magazines copyright in the collective work. The individual magazines are considered "collective" works under the Copyright Act and are defined as "a work in which a number of contributions, constituting separate and independent works in themselves are assembled into a collective whole." The individual photographs are works of authorship in which the photographer owns a separate copyright. As copyright owner, Greenberg owned the exclusive right to reproduce the photographs, distribute them, create derivative works, and to publicly display and transmit the works. The creation and distribution of the CD-ROM of back magazines in digital form, and the creation of the introductory sequence clearly violated these exclusive rights. However, the NGS relied on Section 201(c) of the Copyright Act in contending that it is privileged to use the photographs. Section 201(c) is entitled "Contributions to Collective Works". It provides: Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series. Greenberg owned the copyright in the photographs. The NGS owned the copyright in the magazine edition each photograph was first published in. NGS argued that the 30 volume set was a compendium of back issues and therefore it was allowed to use the photographs because this compendium was simply a revision of the earlier works. The court disagreed and stated: "(I)n layman's terms, the instant product is in no sense a "revision". Using common sense copyright analysis, the court concluded that NGS in collaboration with Mindscape (the software company) created a new product. Looking at the opening sequence in which one of Greenberg's photographs was used to create a moving visual sequence, the court found that this use of the photograph also violated Greenberg's exclusive right to create a derivative work. It refused to find, as NGS suggested, that this use was "fair use", even though the Complete National Geographic may serve an educational purpose. The sale of the work was for profit and the inclusion in the sequence was found to diminish the photographer's opportunity to license the photograph to other potential users. Neither did the court find that the use was de minimus (too small to rise to the level of infringement). The court directed judgment on these copyright claims in favor of Greenberg. In addition, it found Greenberg the prevailing party and entitled to attorneys' fees under the Copyright Act. The court directed that the court below ascertain damages, attorneys' fees, and any injunctive relief, and urged that the court consider alternatives to an injunction such as mandatory licensing fees, in lieu of preventing the public access to this work. The case relied upon by the court below in initially dismissing these copyright claims, Tasini v. New York Times Co. is scheduled for oral argument before the Supreme Court of the United States this Wednesday. The 11th Circuit felt that the issue of the creation of a new work on a CD-ROM was more than just reproducing the work in another medium, one of the issues to be decided in Tasini, in which magazine articles were included in digital databases such as Nexis. As a consequence, it did not withhold its decision in this Greenberg case.

12. MAJOR LEAGUE SPORTS CONTROL IMAGE USE THROUGH CREDENTIALS
by Nancy E. Wolff, PACA Counsel, Wolff & Godin LLP
Various major sports leagues have been imposing contracts to restrict the type of uses that can be made of photographs taken at a sporting event. Professional sports photographers from magazines and other photo news services and agencies are required to obtain credentials to gain access to the arena, to carry photography equipment and to stand at advantageous positions to capture images. These credentials were usually in the form of small print on the back of the pass, much like a ski ticket. However, sports leagues have recently begun to require that a written agreement be signed prior to allowing the photographer access to the game. Last July, the NBA sued the New York Times after the New York Times began selling a collection of photographs from a Knick's-Pacers playoff series. The NBA alleged that this use violated the conditions that were agreed to when applying for credentials to cover the game. The restrictions limited the use of photographs to "news coverage".

The New York Time's position was that the sale of prints was a privilege of the copyright holder and protected as expression by the First Amendment. This tension between the right of an owner of a private arena to control what it believes is commercial property derived from the event and the right of copyright holder to exploit the rights in a photograph has been growing recently. On opening day of Major League Baseball, professional photographers were asked to sign a MLB contract restricting the use of photographs to news coverage and prohibiting the transmission of any images while the game was occurring. This agreement was to cover the entire season. Images taken during the course of the game are in demand for websites that use photographs to illustrate news coverage of the game. Most photographers and the AP would not sign this agreement and were permitted to photograph on a daily basis. Negotiations ensued and the number of images permitted to be transmitted during the game increased from three to seven.

What is considered the final contract by MLB permits the transmission of up to seven images during a game. It also permits the coverage of a newsworthy event, so presumably a photograph of a grand slam in overtime after the seven-image maximum has been met would be permitted. The unified refusal to agree to the initial contract among the various publishers and photo agencies helped in forcing changes to the agreement. Unfortunately there may not be decision for some time that clarifies whether photographers can exploit their copyright in images to create "fine art" prints from images taken pursuant to a contract that limits the use to news coverage. The New York Times recently settled its case with the NBA. The press release described the terms of the settlement as an agreement to provide a direct link from the publisher's online store to NBA.com. A marketing component of the agreement includes the use of the NBA logo on the New York Times web site and in print advertisements promoting the sale of the photographic prints. What is certain, is further contracts that tie access rights to control of image use will be seen when ever an event is held in a private arena.

13. CALIFORNIA LOOKS AT ART REPRODUCTIONS AND THE RIGHT OF PUBLICITY
by Nancy E. Wolff, Wolff & Godin, PACA Counsel
The Supreme Court of California for the first time formulated a balancing test to determine whether reproductions of celebrity artwork are entitled to First amendment protection, or require the consent of the celebrity's estate under the California statute granting deceased celebrities a right of publicity.

The California statute (formerly section 990 of the California Civil Code, currently Section 3344.1) grants the right of publicity to successors in interest of deceased celebrities, prohibiting any other person from using a celebrity's name, voice, signature, photograph, or likeness for commercial purposes without the consent of such successors. The statute specifically exempts a use "in connection with any news, public affairs, or sports broadcast or account, or any political campaign" Further, use in a "commercial medium" does not require consent solely because the material is commercially sponsored or contains paid advertising; "Rather it shall be a question of fact whether or not the use ... was so directly connected with" the sponsorship or advertising that it requires consent. Finally, the statute provides that "a play, book, magazine, newspaper, musical composition, film, radio or television program" work of "political or newsworthy value" "[s]ingle and original works of fine art" or "an advertisement or commercial announcement" for the above works are all exempt from the provisions of the statute.

In this case, the plaintiff Saderup was a charcoal illustrator of celebrity portraiture. His drawings are used to create multiple reproductions in the form of lithographic prints and silk-screened images on T- shirts. Among the celebrity drawings he sold were lithographs and T-shirts bearing a likeness of The Three Stooges. Comedy III Productions was the registered owner of all rights to the former comedy act known as The Three Stooges, all deceased personalities. Comedy III brought an action against the artist for violations of the California right of publicity statute, seeking damages and an injunction preventing further sales. The court trial judge found for Comedy III and entered judgment against Saderup awarding damages of $75,000 and attorney's fees of $150,000 plus costs. The court also issued a broad permanent injunction restraining Saderup from violating the statute by use of any likeness of The Three Stooges in lithographs, T-shirts, or any other medium by which the art work may be sold or marketed. The sole exception to this broad prohibition was Saderup's original charcoal drawing from which the reproductions were made.

On appeal the court modified the award by striking the injunction. There was no evidence that the activity was continuing and the injunction was over-broad because it extended to conduct protected by the first amendment. The artist appealed on two grounds, both of which were addressed by the Supreme Court. 1) The conduct did not violate the statute. 2) The conduct was protected by the constitutional guarantee of freedom of speech.

On the first ground, the court determined that the statute applied because the lithographs and t-shirts were themselves products, and the artists was using the likeness of the Three Stooges on products. The more difficult issue for the court to address was the constitutional issue. The court noted the tension between the right of publicity and the first amendment. The court concluded that depictions of celebrities amounting to little more than the appropriation of the celebrity economic value are not protected expression under the first amendment. The court observed that the right of publicity is primarily an economic right. The court formulated a balancing test between the First amendment and the right of publicity based on whether the work in question adds significant creative elements so as to be transformed into something more than a mere celebrity likeness or imitation. This test was derived directly from the fair use doctrine in copyright law that employs a balancing of four factors to determine whether copying a work without permission is permitted.

In analyzing these factors, courts have postured whether the new work is "transformative". The court theorized that a work that contained significant transformative elements was less likely to interfere with the economic interest protected by the right of publicity. The court went on to say that the celebrity still has the "right to monopolize the production of conventional, more or less fungible, images of the celebrity." The question for this court was "whether a product containing a celebrity's likeness is so transformed that it has become primarily the defendant's own expression rather than the celebrity's likeness." The court clarified the term expression as " something other than the likeness of the celebrity." In close cases, the court suggested that the question to be answered is "does the marketability and economic value of the challenged work derive primarily from the fame of the celebrity depicted? When the value of the work comes principally from some source other than the fame of the celebrity from the creativity, skill, and reputation of the artist it may be presumed that sufficient transformative elements are present to warrant First amendment protection." The court postured that the right of publicity is aimed at preventing the illicit merchandising of celebrity images. Therefore, because single original works of fine art are not forms of merchandising, the first amendment rights of the artist should prevail and permit any exhibition and sale. However, the court also concluded that a reproduction of a celebrity image that contains significant creative elements is entitled to as much First amendment protection as an original work of art. It found that the trial court and the Court of Appeals erred in denying all protection to reproductions.

An example the court gave of reproductions that demonstrated significant creative elements was Andy Warhol's silkscreens of celebrities such as Marilyn Monroe, Elvis Presley and Elizabeth Taylor. The court, applying the test as to whether an artist depicting a celebrity must contribute something more than a "merely trivial" variation, but must create something recognizably "his own" in order to qualify for legal protection found that in the case of the Saderup, his skill was subordinated to the overall goal of creating literal, conventional depictions of The Three Stooges so as to exploit their fame and therefore not protected by the first amendment. Further the court determined that the marketability and economic value of Saderup's work derives primarily from the fame of the celebrities depicted. The court perceived no transformative elements in Saderup's works that would require first amendment protection.

The art addressed in this case was a charcoal drawing made into lithographs and t-shirts. A photographic depiction of a celebrity was not a medium of art before this court. (I believe the trial judge stated in his decision that photographs were outside of the scope of his decision.) However, how a subsequent court in California may handle the sale of photographs or limited edition photographic works after this case is unclear.

The balancing test evoked by this court only makes sense for artistic likeness and not photographs. Determining whether a work is transformative has no place in photography. A photograph by its nature must be a literal depiction of the celebrity. The expression of the photographer and the celebrity cannot be separated. A photograph does not necessarily add something new nor parody the subject. Unfortunately the word "transformative" is one of the more difficult terms for courts to understand in a copyright context. Now it has been adapted to publicity rights. Yet a photograph is clearly a work of art, protected by copyright and the freedom of expression under the first amendment. The California statute exempts "single and original works of art." It can be argued that each photographic print is unique and can be construed as a single and original work of art.

The courts in New York have already held that limited editions of a sculpture are a form of expression protected by the first amendment. The problem with this case is that the artist must use the first amendment as a defense. That means each case requires a fact finder (judge or jury) to determine if a limited edition photograph is worthy of first amendment protection or is a conventional image restricted by the right of publicity. A case-by-case analysis necessarily means that you must defend yourself in court, an expensive proposition. Further, determining the primary motivation of the purchaser of the art reproduction seems unreasonable. Whether a purchaser chooses a photographic print because of the reputation of the photographer, or a desire for the subject may not be readily ascertainable. Even with the Warhol example, are we interested in it only because it is a Warhol or because we are interested in Monroe, Taylor and Elvis?

This balancing test appears to favor established artist' with an established reputation over emerging artists that choose as their subjects celebrities or other personalities. How do you describe the style of a photographer as recognizably his or her own? What factors will a court use? It is likely that all artists will face more pressure from representatives of estates of deceased celebrities in the future until these questions are resolved. Assignment photographers who take portraits of personalities may want to obtain permission to use their photographs in self-promotional material, websites, books, limited edition prints or other reproductions (such as digital prints).

In selling any reproduction, I would emphasize the name of the artists and his or her reputation. Describing the prints as "limited editions" may add to the appearance that the work is protected expression and not merchandise. It is likely that a distinction could be made between photographic prints individually processed and those digitally made. What the court will consider "a conventional likeness of a celebrity" is unknown. What is certain is that issues involving rights of publicity will be an increasing area of legal concern. These rights vary state by state. California is often the leader in states that view the right of publicity as an economic right that survives death to benefit the heirs, rather than a personal right. If a case in the future involves photographic reproduction, PACA might be able to assist the court in explaining the unique qualities of the art of photography in an amicus brief (friend of the court).

14. COURT DEFINES MEASURE OF ACTUAL DAMAGES IN INFRINGEMENT ACTION
by Nancy E. Wolff, PACA Counsel, Wolff & Godin LLP
The Second Circuit, (the federal appellate court in New York) recently described circumstances under which a plaintiff may recover the value of a lost license in a copyright infringement action. In Davis v The Gap Inc., the plaintiff Davis was in the business of designing artful and original designs of eyewear. These designs were particularly striking and unusual as perforated metallic discs or plates replaced what would be otherwise be occupied by regular lenses. The plaintiff went to great lengths to market his products to "stylish and popular entertainers," as well as various fashion designers and publications. The Gap clothing company ran a series of advertisements exhibiting people of diverse lifestyle and backgrounds. One of the ads depicted a group of young individuals of Asian appearance, standing in a V formation, dressed in black, each wearing distinctive eye shades. The subject at the apex of this V formation wore plaintiff's eyewear design. Although all of the subjects were provided with Gap clothing to wear for the photo shoot, each was apparently told to wear their own accessories. The plaintiff brought a copyright infringement action seeking a declaratory judgment of infringement as well as damages for an unpaid license fee, a percentage of the Gap's gross profits resulting from the use of plaintiff's eyewear, punitive damages and attorney's fees. In order to recover damages for the infringer's profits, a plaintiff must submit sufficient evidence of defendant's profits that bear a reasonable relationship to the act of alleged infringement. In other words, it is not enough to show the defendant's revenues from the sale of everything sold, but rather a plaintiff must specifically show how these revenues are reasonably related to the infringing act. This was precisely the problem in the Davis case. Mr. Davis submitted evidence of increased net sales in the corporate parent of the Gap stores. As this corporate parent oversees the sale of numerous items, only one of which is eyewear, the court deemed this evidence insufficient to disgorge the Gap of an appropriate percentage of profits. Since the artwork was not registered before the infringement, statutory damages, punitive damages and attorneys' fees could not be awarded. Actual damages, on the other hand, focus on the plaintiff's lost sales, lost opportunities to license, or diminution in the value of the copyright. In the Davis case, Mr. Davis' actual damages was a lost opportunity to license his product to the Gap. The court held that a lost opportunity to license is recoverable as compensatory damages under appropriate circumstances. Factors the court considered were 1) whether the infringement was innocent, 2) whether the owner is reasonably compensated by other elements of the award, and 3) whether such an award would impose an unreasonable burden on the infringer. Most importantly, the amount of damages may not be based on undue speculation. The copyright owner must be able to show that the thing taken had a fair market value in order to make out his claim that he has suffered actual damages because of the infringer's failure to pay the fee. Market value therefore plays a crucial role in determining the amount of the actual damages. Mr. Davis prevailed in his claim of actual damages for loss of a licensing opportunity by submitting evidence that a magazine previously compensated him with a certain amount when using one of his designs for a particular picture. This dollar amount provided the court with sufficient evidence to calculate an appropriate amount of damages. This case has relevance to photographers and stock companies for two reasons. First, in licensing photographs, care should be taken to make sure that no unique objects are depicted in the photographs, such as copyrighted jewelry, eyeglasses, furniture or other works of art that would require a license. Second, the case confirms that an appropriate measure of actual damage when a photograph is reproduced without permission is a retroactive license fee based on market value. Since photographs are typically licensed based on use, evidence as to licenses for similar uses should enable the copyright holder to prevail in an action for damages. Of course, if the photograph is registered before the infringement occurred, actual damages need not be established, and the court can award statutory damages as well as attorneys' fees.

15. RED CROSS SYMBOL
by Nancy Wolff, PACA Counsel, Wolff & Godin LLP
Recently a PACA member brought to my attention that the Red Cross is vigorously protecting its famous Greek red cross emblem, even if depicted in a photograph. While the famed Greek red cross is technically no longer a registered trademark, the Greek red cross bears the protection of a criminal statute-18 U.S.C. ó706. Persons found violating this statute face either a fine not to exceed $250 or up to six months in prison, or both. The criminal statute protects misuse of the Red Cross emblem. The emblem is thought to evoke ideas of humanitarian interest. Today, the Red Cross emblem is used to identify and protect medical and relief workers, military and civilian medical facilities in combat zones, mobile units, and hospital ships. It further identifies the programs and activities of Red Cross national societies throughout the world. To that effect, the Red Cross seems adamant in protecting their reputation, image, and emblem. The symbol was further incorporated into the Geneva Conventions, and since most nations have signed onto these treaties, almost every nation has undertaken the responsibility to establish a Red Cross organization to protect the emblem of the Greek red cross. The first American criminal statute to protect the Greek red cross was enacted in 1905. Since then, however, many users have infringed the emblem despite the Red Cross' feverish attempts to police the market. While major companies like Johnson and Johnson still use a very similar mark for some of their products, they are exempt from the federal statute because their original date of use for those marks is pre-1905. Because anyone trying to use the mark that did not use it prior to 1905 is prohibited from doing so, only 21 pre-1905 users remain active today. The Red Cross actively pursues misuse in both traditional arenas and on the Internet. Plus signs have become a popular design element, especially among companies who advertise their products as improved, superior, or new. When thickened and colored red, these plus signs are indistinguishable from the Red Cross emblem. Other areas the emblem is misused include a variety of products from dolls, toy ambulances, play medical kits, clothing, novelty items, pet clinics, carpet cleaners, and more. According to the Red Cross, its approach to addressing misuse centers on educating others about the Geneva Convention and its international rights. Once informed of misuse, those users generally voluntarily stop their use of the cross. The Red Cross does mention that it will pursue matters in court when users do not cease use of the emblem. There are few defenses in favor of an infringing use of the Greek red cross. Arguing that your use of the red cross is not infringing because there is no confusion between your use and the services of the Red Cross is of no avail. Trademark law and the Lanham Act, which permits similar marks on different classes of goods, affords infringers no protection because it is preempted by this federal criminal statute. The only test to establish infringement under this Red Cross statute is whether a mark is "a Greek red cross on a white background, or any sign or insignia colored in imitation thereof." Further, because the emblem is protected by federal statute, it will not revert back into the public domain, despite the fact that it has been abused for nearly a century. In selecting or creating images for stock use, care should be taken to avoid products that incorporate the Greek red cross. Other symbols that have statutory protection include Smokey the Bear, Woodsy Owl, the Olympic Rings, the 4 H Club emblem and the presidential seal.

16.FILING TRADEMARK RENEWAL
by Nancy Wolff, PACA Counsel, Wolff & Godin LLP
A member recently had a question regarding a notice to file a trademark renewal form from a service that charges a fee to perform the filing. The member wanted to know if it was necessary to use a service or if the member could file the renewal on its own. Currently trademarks that are registered with the United States Patent and Trademark Office have a ten year term. However, for a trademark registration to remain valid, an Affidavit of Use ("Section 8 Affidavit") must be filed: (1) between the fifth and sixth year following registration, and (2) within the year before the end of every ten-year period after the date of registration. The registrant may file the affidavit within a grace period of six months after the end of the sixth or tenth year, with payment of an additional fee. The registrant must also file a ó9 renewal application within the year before the expiration date of a registration, or within a grace period of six months after the expiration date, with payment of an additional fee. Assuming that an affidavit of use is timely filed, registrations granted PRIOR to November 16, 1989, have a 20-year term, and registrations granted on or after November 16, 1989, have a 10-year term. This is also true for the renewal periods; renewals granted PRIOR to November 16,1989 have a 20-year term, and renewals granted on or after November 16, 1989 have a 10-year term. The USPTO has instituted an online form and filing system known as "TEAS" - the Trademark Electronic Application System. There is an e-form system and a print form system. Using e-TEAS you can submit forms directly to the USPTO over the Internet, making an official filing on-line. Or you can use PrinTEAS in order to print out the completed form for mailing to the USPTO. There are "wizards" to help you fill the forms out completely. Credit cards can be used to pay the filing fees. Both the Section 8 Affidavit and Section 9 Affidavits are available online. So you do not need to hire a service to complete the renewal form if you have a registered trademark. The USPTO site contains much valuable information and has great search capabilities. If you are interested in securing a name as a trademark, you can search to see if trademark applications for that mark have been filed, whether they are registered, pending or abandoned. The home page for the USPTO is www.uspto.gov.

17. PICTURES OF CHINESE FOOD
by Nancy Wolff, PACA Counsel, Wolff & Godin LLP
A New York Federal Court recently held that pictures of common Chinese food dishes do not secure copyright protection when the pictures were taken and are used to illustrate items on a Chinese Restaurant's menu. While the photographs, individually, are not copyrightable according to the court, the court did hold that an arrangement of assorted Chinese dishes on a white background within a border constituted a graphic design and was protected under copyright law. The photographs in issue were of several "common" dishes: sweet and sour chicken, General Tso's chicken, roast pork egg foo young, Singapore mei fun, seafood delight, barbeque spare ribs combo, pepper steak with onion, pu pu platter, Peking duck, and bean curd home-style. These images were then arranged on a white background in various patterns such as full circles, semi-circles, and open circles, ovals, zigzags, and parallel rows, among other patterns. While the plaintiffs in this case had copyrighted their layouts of the several dishes, the court noted that just because the overall image was copyrighted did not mean that its constituent parts would invariably secure copyright protection. Copyright protection extends only to those components of a work that are original to the creator. Originality requires independent creation by the author and at least some minimal degree of creativity. Undeniably, the required creativity is small. Judge Schwartz, however, felt that these pictures of Chinese food did not meet those requirements. The court found that the pictures were of the "most common Chinese dishes used in take-out menu's," that the photos lacked any artistic quality, and that no "creative spark" spawned these images. The Judge noted that even the pattern on the plates that held the food was common. The Judge also commented on how the lighting did not change from picture to picture, and how that further implied a lack of artistic quality. The Court feared that allowing these photos to obtain copyright protection would give the plaintiff's an exclusive right to use the photographs to establish a monopoly for printing menus that depict certain commonly served Chinese dishes. When the photos are placed together, however, the Court found that the overall design does contain the requisite originality to render it a copyrightable work. Hence, this "graphic design" of the menu secures copyright protection, while the individual photos that make up the design lack the requisite originality to secure copyright protection, according to the court. The court's analysis, though, is flawed because it confuses "common subjects" with originality of copyright. Even photographs of common subject matter, like Chinese food, can have copyright protection. The caveat is that the less original your subject mater is, the narrower the protection you will have, since only the copyrightable elements will be protected. In legal terms this is called a "thin" copyright. The bottom line is that common photographs have less copyright protection than other 'unique' or 'highly creative' works, but these common works still have protection. This decision should not affect the field of food photography since most images will have a greater degree of originality and possess more identifiable copyrightable elements, such as lighting, composition, arrangement, mood and other indicia of creativity.

18. THE NEED FOR FULL RELEASES
by Nancy E. Wolff, PACA Counsel, Wolff & Godin LLP
The brochure was straightforward, with a picture and some text. The text described the woman pictured, whom it called "Maria," as a 19-year-old mother of two small children, ages 18 months and 3 years. It said she had been treated for AIDS for at least two years, and was also diagnosed with recurring herpes. Merck, the pharmaceutical company, on the other hand, along with its advertising company, were not straightforward. Her name was not Maria, and the alleged 19-year-old mother was really in her 30s. She was a suburban housewife and mother who had contracted the HIV virus from her husband. She never had herpes, and was never sexually promiscuous. In order to promote the sale of its new drug, Crixivan (from which Merck grossed some $562 million in revenue), the company created and published a brochure titled "Sharing Stories," along with a flip chart called "Getting the Facts." Merck, however, took it upon itself to use "Maria's" picture alongside a fictitious biography of her. Maria, when recruited by the modeling agency hired by Merck, was told that her image would be used for 'educational purposes' only. Merck claimed that its use was educational because the brochure compiled the information of a number of people who had used the drug. Upset by this use, Maria sued Merck for defamation in Jane Doe v. Merck & Co.. The court found Merck liable for defamation, because it had knowingly published her picture along with a fictitious biography and medical history. Maria claimed that the ad, in its entire context, made her seem promiscuous-a tramp. Because New York libel law requires an offending statement to be viewed in its full context, the court agreed with her. Under New York Civil Rights Laws sections 50 and 51, Maria asserted a limited right to privacy, which makes it a misdemeanor to use a person's name or photo for advertising purposes without their written consent. In court, the judge agreed that the Merck brochure was clearly for advertising purposes. Merck had apparently forgotten to get releases from the models to portray them as real people. This may further prove to be a problem with the FDA, as these testimonials about drugs were completely false. A release limited for educational purposes cannot be used for advertising, even if the advertisement imparts educational information. This case demonstrates the risks associated with licensing images without a release for broad purposes. The damage portion of the trial has not started, but the model is seeking substantial damages as a result of this use.

19. FIRST AMENDMENT PROTECTS ALTERED USE OF "TOOTSIE" PHOTOGRAPH IN MAGAZINE ARTICLE
by Nancy E. Wolff, PACA Counsel, Wolff & Godin LLP
The 9th Circuit recently reversed a California District Court decision that had awarded Dustin Hoffman three million dollars plus attorneys' fees for the use of an altered photograph of a film still from the movie "Tootsie" in LA Magazine. The article entitled "Grand Illusions" featured famous film stills that were altered using computer technology to appear that the actors were wearing 1997 spring fashions. One of the images was a famous still from "Tootsie" with Dustin Hoffman. The American Flag and the head remained as in the original still, but Hoffman's body in his long red sequined dress was replaced by a male body in a similar pose, wearing a cream colored silk evening gown. No permission was obtained from any of the actors. Obviously lacking a sense of humor about this subject, Hoffman sued alleging violations of California's common law right of publicity, California statutory right of publicity, unfair competition and the federal Lanham Act. The court dismissed the magazine's First Amendment defense and found it liable on all claims. The federal appellate court reversed and found that the article was editorial opinion and not commercial speech. Therefore, Hoffman, being a public figure, must prove that the publication acted with actual malice, or with knowledge or reckless disregard that the photograph was false. In other words, Hoffman had to show that the magazine intended the readers to believe that when they saw the altered photograph, they were seeing Hoffman's real body. In addition to showing the unaltered photograph, the magazine described the fact that they had digitally altered famous images using computers. It was clear to the readers, therefore, that the actors did not pose for these pictures wearing the 1997 fashions. This case confirms that photographs are protected as expression under the First Amendment, and if used in an editorial context that is not false, do not require permission from the subject.

20. USE OF FILM FOOTAGE IN BIOGRAPHY CONSIDERED FAIR USE: Hofheinz v. A&E Television Networks
by Nancy E. Wolff, PACA Counsel, Wolff & Godin
A&E produces video documentaries to air on its cable channel. Most of the channel's viewers seem to enjoy watching them. Susan Nicholas Hofheinz, however, did not enjoy the Network's documentary on Peter Graves entitled "Peter Graves: Mission Accomplished." At the start of Graves' career, he appeared in a 1956 science fiction film about an alien invasion. It was called "It Conquered the World." While the movie is no longer available for retail sale, rent, or theater showings, it is available through exclusive license from the holder of its copyright. And because the film was one of Graves' first major acting roles, the network felt that a comprehensive biography should mention the film when highlighting Graves' entry into motion pictures. Accordingly, A&E used 20 seconds of footage edited from the film's trailer in it's 44 minute piece on Graves (the other 16 minutes of the hour-long program were dedicated to commercials). The Network then spliced the edited scenes together in such a fashion that they did not chronologically follow the original release. Hofheinz didn't care much for the Graves special because she owns the copyright in "It Conquered the World." She felt that A&E infringed her copyright through an unauthorized showing of parts of the film, and ultimately filed an action against A&E in federal court. Hofheinz, as the court notes in passing, did not own the copyright to the trailer. However, she argued that the qualitative essence of the film was embodied in the network's unauthorized 20 second use of footage. A&E, on the other hand, argued that their use of "It Conquered the World" was a fair use, and moved for summary judgment. The court granted A&E's motion. In doing so, it evaluated a number of factors used to determine if what would otherwise be an unauthorized use is permitted under the fair use doctrine of copyright law. First, it examined the purpose and character of A&E's use, focusing on "whether the work merely supersedes the objects of the original creation . . . or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message." This boils down to an evaluation of whether the new work 'transformed' the previous work. The court found that A&E created a new copyrightable film biography, a factor which often favors the defendant when the work created is "criticism, comment, news reporting, teaching . . ., scholarship, or research." Biographies, the court said, along with critical biographies, fit well into this protected category of activity which favored a finding of fair use. Then, the court looked at the second fair use factor--nature of the copyrighted work. As a general proposition, published works enjoy less fair use protection than those that have never been published, but, creative and other non-factual works are entitled to greater fair use protection than factual material. The film was obviously a creative work, which sways in Hofheinz's favor, but it was published, which sways in A&E's favor. The film, however, is no longer in general circulation, and is only available through a lease. The trailer is not shown anymore at all-this is a key factor, because if unavailable for purchase through normal channels, the user may have more justification for reproducing it than he would under ordinary circumstances. In the end, however, the court found that this factor tipped more in Hofheinz's favor. Next, the court analyzed the amount and substantiality of the portion of footage that A&E used. Because the network used 20 seconds from a 70 minute film, and showed it in a different chronological sequence that did not give away the plot, characters, themes, or resolution of the film, the court found this factor favored a finding of fair use. Finally, in this type of analysis, the court examines the effects on the market of the defendant's use. In essence, the court held that by seeking 20 seconds of footage-out of order-when the footage didn't give away plot, theme, or resolution, that this would in no way deter consumers from wanting to see the film. Because the court found that A&E's use would not squash Hofheinz's market for people who would want to see the film, this factor also tipped in A&E's favor. Consequently, as the majority of factors supported a showing of fair use in A&E's use of 20 seconds of edited footage from the trailer of "It Conquered the World," it granted A&E's motion for summary judgment.

21. RESERVATIONS OF RIGHTS IN LICENSE AGREEMENTS
by Nancy E. Wolff, PACA Counsel, Wolff & Godin LLP
A federal judge in New York had an opportunity to examine a license agreement for television film footage and interpreted a typical "in all media clauses" to include video usage. The facts are as follows: Gregg Mathieson had valuable footage. He had shot some material on Hi-8 film during a January 1993 trip to Northern Iraq. He also had a VHS film copy of a Kurdish military offensive, which he received from Kurdish fighters. In the spring of 1997, ABC was collecting material for a news special about Iraq and the CIA. They wanted to use what Mathieson had. After getting in contact with the show's producers, Mathieson was told to get in touch with ABC's Rights and Clearances Department because they handled licenses and paying contracts. Ultimately, the two parties negotiated a written contract. ABC was granted a non-exclusive license to use the footage two times. Mathieson license granted ABC the right to include the footage in the ABC News program Peter Jennings Reporting, "as distributed two times worldwide in all media now known and hereafter conceived or created." ABC was also to pay $40 per second of footage used and give Mathieson end credit except if prohibited by time. This was an integrated agreement, which means it usurps all past agreements, whether oral or in writing. ABC then aired "Peter Jennings Reporting: Unfinished Business-The CIA and Saddam Hussein." They used 85 seconds of footage, and paid Mathieson accordingly. At the end of the broadcast, however, ABC announced that viewers could purchase a video copy of the broadcast. 248 units were sold. Mathieson argued that this was in violation of the license, and demanded compensation in the amount of $576,000--$40 per every second sold. In December of 1997, ABC aired a re-edited broadcast of the program without using any of Mathieson's footage. Mathieson argued that the home video distribution was outside the scope of the agreement. He interpreted "in all media" to relate to ABC's right to copy the tape from one format to another (e.g. VHS to Beta). He did not understand the phrase to include multiple copies of the program for home video distribution. ABC had made multiple copies of the tapes during their editing procedures. The court held that Mathieson granted ABC the right to use the footage twice in all media for a period of two years. Further, the court found that ABC's home video distribution fell under the umbrella of "all media" and did not result in a breach of contract. The court reasoned that this is very similar to a situation where a grant of the right to exhibit a motion picture by television would include the right to exhibit the motion picture on any device that would enable the picture to be seen on a television screen. Quoting authority, the court said "licensees may properly pursue any uses which may reasonably be said to fall within the medium as described in the license." In a situation like this, the party seeking exception or deviation from the meaning reasonably conveyed by the terms of the license bears the burden of negotiating for language that expressly prohibits certain use. In other words, if Mathieson did not expressly prohibit home video use, then he has implicitly given ABC that right. If he did not want ABC to issue a home video with his footage, he needed to clearly insert language into the agreement that reflected this condition. Consequently, the court found that ABC had only used the footage twice, as contracted for in the first place. Once in the original broadcast, and then once in the home video distribution, so ABC was not in violation of the license agreement. Then, at the end of the broadcast, ABC failed to give Mathieson credit for this footage, and instead gave only one non-production credit to a fictitious character as an inside joke for the staff at ABC. The court reasoned that since ABC gave no other credits, they did not breach their contract by failing to provide Mathieson with a credit for his footage. In fact, the judge found this case, and the manner in which it was handled, to be so frivolous and outrageous-not to mention without merit, that he sanctioned the attorney representing Mathieson. As a lesson in license drafting, media which you intend to EXCLUDE from a license should be clear, particularly if a grant of rights includes the "in any media now known or later developed" language. In film and television, alternative media, such as video, should be expressly excluded since it is now assumed that films will also be distributed on video. Further, if credit is required as part of the license, having a set fee for failing to provide credit is better than resorting to the courts.

22. WEB LICENSE AGREEMENTS
by Nancy E. Wolff, PACA Counsel, Wolff & Godin LLP
Internet license agreements may quickly become more complex and require users to affirmatively assent to the license's conditions now that a judge in the Southern District of New York has held that users who obtained software from Netscape's Web site were not bound by the site's license agreement. The driving force behind the judge's decision was that users were neither required to agree to Netscape's terms and conditions, nor even review them. One of the general principals of contract law is that in order for a contract to become binding, both parties must agree to be bound. This assent can be done in any manner sufficient to show agreement, including conduct. These ideas flow swimmingly into the realm of software licensing. Software is often packaged in a container or wrapped, and the user is advised that the purchaser of the item is subject to the terms of the licensing agreement. If the purchaser does not wish to be bound, she merely refuses to open the package and sends it back within a stated period of time. In other words, but returning the unopened software, the user clearly does not assent to any terms or conditions and therefore is not bound by them. This is legal, and works out fine as long as the terms and conditions do not run afoul of contract law. Netscape argued that users who downloaded its SmartDownload program from their site, and others, agreed to submit to arbitration in California if a dispute should arise, and that the New York court should dismiss the case. The court refused. Unlike its other programs that are on-line and available for download, Netscape chose not to use a "click-wrap" license for SmartDownload. A click-wrap license presents the user with a message on her computer screen, requiring that she manifest her assent to the terms of the license agreement by click on an icon. Courts have held this type of license to be similar to the aforementioned wrapped, or shrink-wrapped licenses that require an affirmative indication of assent. Therefore, when Netscape asks, in its click-wrap licenses "do you accept all the terms of the preceding license agreement? If so, click on the Yes button, if you select No, setup will close," they have put forward a valid licensing agreement because clicking on Yes indicates assent. With SmartDownload, however, they failed to do this. The court concluded that SmartDownload's license agreement resembled more of a "browse-wrap" licensing agreement. With these agreements, notice of a licensing agreement DOES appear on the Website, and by clicking on a link, a separate browser pops up and contains the entire text of the agreement. What is missing, however, is the critical element of assent. At no point is the user required to click on an icon expressing assent to the license, or even view its terms, before she proceeds to the information. Bottom line-Netscape's SmartDownload allows a user to download and use the software without taking any action that plainly manifests assent to the terms of the associated license or indicates an understanding that a contract is being formed. What makes the situation even worse for Netscape, is that they fail to inform the user that she is entering into a contract. The court likens SmartDownload to a free neighborhood newspaper where the item is "there for the taking." Netscape does, however, include a suggestion that a contract is being formed. At the bottom of the download screen, at a place where the user does not need to go in order to get the software, Netscape places the following text: "Please review and agree to the terms of the Netscape SmartDownload software license agreement before downloading and using the software." The judge viewed this as a mere invitation to view the agreement, and concluded that the language is therefore not strong enough to inform the user that a contract is being formed, or that assent is required. Consequently, the judge ruled the license agreement inapplicable, and held that arbitration was not binding upon the users. This case demonstrates that basic contract law applies to the Internet. PACA members should review any online licensing agreements, even comping agreements, and make sure that they are designed so a user must agree to the terms before proceeding to download any images. The terms of the agreement must be available to view, and not buried in a link that only suggests that a user should view them. The good news is, if done properly, "click-through" agreements are binding.

23. NEW PROCEDURE FOR GROUP REGISTRATIONS FROM THE COPYRIGHT OFFICE
The Copyright Office of the Library of Congress recently announced final regulations to establish a new procedure for group registration of published photographs. The Copyright Office also modified deposit requirements for groups of unpublished photographs registered as unpublished collections. In sum, the rule liberalizes the deposit requirements for photographs included in unpublished collections of photographs registered pursuant to 37 CFR 202.3(b)(3). The new rule permits a group of photographs taken by the same photographer and published within the same calendar year to be submitted as a group for a single registration. If the claimant does not wish to or cannot identify the specific date of publication of each photograph, a range of publication dates may be stated provided that all of the photographs in the group were first published within three months before the date the application, fee and deposit are received by the Copyright Office. The deposit for the group registration of photographs, or for photographs submitted as unpublished collections pursuant to 37 CFR 202.3(b)(3), may consist of images on CD-ROMs or DVD-ROMs, unmounted prints measuring at least 3 inches by 3 inches, contact sheets, slides with single or multiple images, the photograph in a form in which it has been published (e.g., clippings from newspapers or magazines); photocopies; or a videotape clearly depicting each photograph. The effective date of the regulations is August 16, 2001. For full information see: http://www.loc.gov/copyright/fedreg/2001/66fr37142.html Click here: Federal Register: Group Registration of Photographs from PACA Counsel, Nancy E. Wolff, Esq. Wolff & Godin, LLP,

24. THE AGENCY QUESTION
Many photographers are questioning why contacts with photo libraries describe the relationship as one of contract rather than as an agency relationship. Under a contractual relationship, a photographer licenses images to the stock company that grants "sub licenses" to clients. Under the agency agreements, a photographer appoints the stock company as its agent to exploit images on its behalf. There are a few reasons for this change over the past years. One has to do with the changing nature of the industry, from representing photographers on an exclusive basis, to representing individual images belonging to a photographer who may have images distributed through many companies. When the stock industry was young, the most common relationship was that of an agent representing a photographer. These agreements were usually exclusive between the company and the photographer. The exception might be if a photographer had an agent for the east coast, and another for the west coast. As the industry expanded, photographers resisted the idea of one exclusive agent. There were many reasons for this. Often photographers had more than one type of imagery. They wanted specific images to be placed at specific companies depending on that company's expertise, such as travel, science, nature, or advertising lifestyle. As a result, agreements became image exclusive rather than photographer exclusive. Since the law of agency involves appointing a person to act for another, the current practice of representing images, that are objects, rather than individuals, lends itself to a contractual relationship of licensee rather than an agency relationship. The photographer grants the company all the rights necessary under contract law to permit the company to then grant sublicenses to image buyers. The terms of the relationship are defined in the contract. The other reason relates to federal withholding tax. An earlier PACA update mentioned a recent change in the tax code as of January 1, 2001. According to the Code, withholding is required by all persons who receive income for the benefit of others. From conversations with employees at PriceWaterhouseCoopers that have looked into this situation for several PACA members, the significant change to members is that the withholding agent is required to collect documentation from the beneficial owner of the payment. These forms were identified in the earlier update and can be obtained from the IRS. In sum, I was advised that it is beneficial for stock photo companies, who receive payment on behalf of many photographers, including those outside of the United States, to have contractual relationships where they are licensees rather than agents. While stock photo companies are now obligated to withhold money for their photographers, the amount that is required to be withheld depends on whether payment to the artist is either characterized as a commission or a royalty. A licensee receives a royalty and an agent typically receives a commission. Finally, I was advised that the amount that the photographer ultimately needs to pay is less if the stock photo company is considered a licensee rather than an agent. Since these tax issues are obviously complex, all companies should seek the advice of their financial advisers and accountants. Consequently, many stock companies in revising their contracts, have changed the relationship to a license relationship rather than a principal agent relationship.

25. WORKS PUBLISHED IN COLLECTIONS AND COMPILATIONS NEED INDIVIDUAL COPYRIGHT REGISTRATION
Morris v. Business Concepts
by Nancy e. Wolff, PACA Counsel, Wolff & Godin LLP
PACA, along with a group of author organizations, supported an author's appeal of a federal court's decision in New York, that had refused to allow an author to rely on the copyright registration filed by the magazines in which her articles were first published, to bring an action against another publisher that had copied many of her articles without permission. However, the Federal Court of Appeals for the Second Circuit affirmed the decision requiring authors to register their own copyrights and not allowing them to rely on the registration of their publisher. The author had valid reasons for trying to obtain the benefit of the magazines' previous registrations. First, under United States copyright law, if you are a United States copyright owner, you cannot commence a court action against an infringer, unless the work infringed is registered with the Copyright Office and you have obtained a Registration Certificate. This can be costly if many works are infringed. Also, if you need the registration certificate in a hurry to go to court, and cannot wait the nine months or more it can sometimes takes to receive one, the Copyright Office charges and extra $500, in addition to the $30 application fee, to expedite each application. Second, you can only ask the court for statutory damages if the infringed work was registered before the infringement occurred, or if the registration was made within ninety days of the first publication, and the infringement occurred within those ninety days. Statutory damages can range from $750 to $30,000 (in the court's discretion). If you can prove willful infringement, the court can, in its discretion, award up to $150,000. Otherwise, you must prove actual damages, which equates to a retroactive license fee. You also need a prior registration to request attorneys' fees. Under the 1909 Copyright Act that was in effect until 1978, works would fall into the public domain if they were published without a copyright notice. In order to avoid such harsh results, courts constructed rules to protect authors. One rule was that the copyright notice and the registration in a book or magazine covered the beneficial owners, the individual authors and artists. Part of the legal reason for this was that copyrights were not considered divisible and there was only one owner. If a work within the magazine was infringed, the magazine would assign the copyright to the author who created that work, and an action could be brought. A practice of artists relying on the copyright of a magazine developed. Under the Revised Copyright Act, a separate copyright exists for publishers of collective works, such as magazines. Individual authors can have copyrights in their individual works. Writers and authors now grant licenses to permit publishers to include their works in magazines and books. Publishing a work with a copyright notice is no longer a requirement, and works do not fall into the public domain for defective notices. (Although it still makes sense to use notices). Registration is still a requirement, for commencing an infringement action, and for collecting statutory damages and attorneys' fees. An individual contributor was permitted to rely on a magazine's registration to bring an infringement claim in an isolated case in Washington State, but it had never been fully addressed by a federal appeals court. In this case, Morris was a journalist who frequently wrote the "Mood News" column in Allure magazine. She brought a copyright infringement suit against Business Concepts Inc. after she discovered that it was publishing a newsletter using her articles, twenty-four in all. Morris had a written agreement with Allure's publisher Conde Nast, granting the publisher exclusive publication rights for ninety days after their publication in Allure. Morris retained ownership of the copyright of the articles. Conde Nast received Certificates of Registration from the Registrar of Copyrights for the articles, however, Morris never registered her copyright in the articles under her name. In bringing the infringement claim, Morris sought to rely on Conde Nast's registration because Conde Nast was the exclusive licensee of her articles and was a "copyright owner" of them. The Court stated that because Conde Nast was not a copyright owner of Morris's articles when it registered the issues of Allure as collective works, her articles did not fall within Conde Nast's collective works registrations. . (A collective work protects the arrangement and order of works.) In order to bring an action, all of the twenty-four works would have to be registered in the journalist's name. Of course, any registration would now be after the infringement, and she would lose the benefit of statutory damages and attorney' fees. The cost of the infringement action could easily exceed any damage award. A number of years ago, PACA anticipated that this could be the result if the court examined the ability of contributors who retained copyright to commence an infringement action based on a publisher's collective work copyright. Together with the assistance of the Copyright Office, we came up with a solution. Photographers are asked to grant copyright to the stock company solely for registration purposes, when their works are published in a print or digital catalogs. When the company registers the catalog, it can protect the underlying (unpublished) works, as well as the selection and arrangement of the works in the catalog. Then, at the time of the copyright registration, the company is the copyright owner of the photographs as well. If an infringement occurs, the company can assign the copyright to the owner of the photograph. The photographer will then have the registration necessary to commence an action, and the benefit of seeking statutory damages and attorneys' fees, all without the expense of registering each work separately. (Previously published works have other registration requirements. For more information, check the Copyright Office website at www.loc.gov/copyright.) It is now more important than ever, to encourage photographers to register their work or agree to assign the copyright, solely for registration purposes, to the company in order to obtain all the benefits of the Copyright Act if a work is infringed.

26. FLAGS
by Nancy Wolff, Wolff & Godin, PACA Counsel
The American flag has emerged as a symbol of American unity and patriotism. Requests for images of flags have surged, as well as questions on the appropriate use of the flag. Homes and business establishments are displaying American flags and reproductions of flags. Many Americans can be seen wearing flag bandanas, pins and other apparel displaying the red whit and blue. Advertisers are including an image or illustration of the American flag in the local advertising pages of newspapers during the past week and a half. Rules for the use of displaying the flag were enacted in 1942 and are part of Title 36 of the United States Code. These are strictly guidelines and there are no penalties for misuse of the United States flag. Each state can enact their own flag law, and the Federal government for the District of Columbia. There were criminal penalties associated with certain acts of desecration to the flag under Title 18 of the United States Code prior to 1989. This statute was declared unconstitutional in the Supreme Court decision (Texas v. Johnson). Congress then enacted the Flag Protection Act of 1989, which was also struck down by a Supreme Court decision in 1990. (US v. Eichman). Flag etiquette is described in Section 176 of Title 36 entitled "Respect for flag". Among its guidelines includes a statement that flags should not be used for advertising purposes in any manner whatsoever. Nor should it be used as wearing apparel. I know of know instance of the federal government or state bringing an action for any violation of flag etiquette. Within the District of Columbia, a section of the United States Code provides for a fine of less than $100 US dollars or by the imprisonment less than thirty (30) days or both, for violation of a statute that prohibits mutilation of the flag or the use of the flag for advertising purposes. Whether this statute is constitutional for violating the first amendment freedom of speech is not known, since it does not appear to be enforced. The flag will continue to be a symbol of America and unity. T-shirts with flags, flag hats and other clothing will be manufactured and worn in the name of patriotism. It would appear highly unlikely that the government in Washington DC, or any state would fine anyone for such actions. How the flag is used or sold for advertising or merchandising is essentially left to the sound judgment and discretion of the user.

27. LEGAL UPDATE: PHOTOGRAPHS OF BUILDINGS
I continue to receive questions asking whether you need a property release to use a photograph of a building, both public and private. There is a 1999 PACA update on the website, that previously addressed these issues. This is a summary of some of the frequently raised issues. In a strict legal sense, most buildings can be published without the need for any release or permission, as long as they were taken from a public road, and no trespassing was involved. In most instances, copyright, trademark and privacy/publicity laws do not apply to buildings. First, rights of publicity and privacy are laws, by either state statute or case law, that prohibit the use of a person's name or likeness for commercial use. But these laws only protect people, not property. The exception would be if an object so identified the person, such as a distinctive race car, that it would be obvious that an otherwise unidentifiable person was associated with the image. While copyright protection was extended to buildings a number of years ago, this protection is essentially limited to constructing look-alike versions of a building or nearly identical building. The Copyright Act specifically provides that the owner of the copyright to a building that is located in, or visible from, a public place, cannot prevent third parties from taking or distributing photographs of the building. This leaves only the law of trademark for building owners to rely on in an effort to prevent or control the distribution of images for commercial use. But the law of trademark is not a perfect fit. Trademarks are indicators, through design, words, or symbols, of the source of goods or services. Few buildings serve as an indicator of a source of goods. The owners of the Rock and Roll Hall of Fame building in Cleveland failed in preventing the sale of a poster of the building by a photographer, relying on trademark law. The building itself must serve as a trademark, and the competing use, must be a trademark type use that causes confusion in the market place as to the source of the goods. Most famous buildings, both public and private, are icons and nothing more. A photograph of the Chrysler building is a photograph of a building and does indicate a source of goods or service. Some buildings do serve as an indicator if goods, such as the Disneyland castle, McDonald's arches, and the Guggenheim museum in New York with its distinctive spiral architecture. The allegation is if another company uses a photograph of the owner's building in an advertisement, the consumer might believe that the company endorses or sponsors the other party's business. Trademark law is designed to prohibit these confusing uses. Government or public buildings are owned by the government and are therefore photographs of those buildings are also in the public domain. Typically if you contact a government building, they will suggest that a photograph of the building be used in good taste, or in some cases prefer that it not be used for commercial use. If you ask to publish a photograph from their archive, a letter with restrictions may accompany the photograph. However, there are no federal laws that restrict the use of one of those buildings or monuments. Therefore monuments and public buildings such as the Washington Monument, Lincoln Memorial, US Capital Building, The White House, Arlington National Cemetery, Independence Hall, Liberty Bell, Jefferson Memorial and Mount Rushmore can be used for any purpose, subject to the user's discretion. The Supreme Court, if asked will assert that images they provide can only be used for educational use, but there is no control over images that are taken by independent photographers. The photographs of public art and sculptures are more problematic. The copyright in some statutes and memorials, even though commissioned by the government, may belong to the artists. These uses should all be cleared to determine if they are in the public domain or controlled by the artist. Then why do we recommend that photographers obtain property releases for stock photographs? The simple answer is to prevent clients from being contacted by homeowners and the owners of commercial buildings asserting that you need permission to use a photograph of their building. Homeowners may be offended that their home is used in an advertisement. Whether a legal basis exists or not, most people believe that you need permission to photograph something they own, whether it is their business, home, dog or cat. And if they have a lawyer send your client a letter, it becomes your problem, even if they are wrong. Many advertising agencies require property releases for this reason, so having a photograph with a release makes the photograph more valuable. A property release prevents the question from being raised, and allows for smooth transactions. This is why many members have developed policies and guidelines with respect to the need for property releases in certain situations. PACA's list of properties on its website is therefore a list members have put together, based on their experience with property owners that complain if a photograph of their building or other property is used without permission or a license. It is not PACA's position that they have a valid claim or not. Since very few of these cases are ever tested in the courts, it is difficult to give conclusive advice. It is just to alert you that these images may cause your client difficulty, something that all businesses wish to avoid.

28. PACA LEGAL UPDATE:
Cuccioli v. Jekyll & Hyde Neue Metropol Bremen Theater Produktion GmbH & Co.
by Nancy E. Wolff, PACA Counsel - Wolff & Godin LLP
Judge Kaplan of the U.S. District Court in the Southern District of New York issued an opinion holding that in order to bring a claim for a violation of New York's right of privacy laws, the alleged violation must have taken place in New York State. According to New York Civil Rights Law Section 51, New York's right of privacy laws only apply to violations existing "within [New York] state". Although the plaintiff had jurisdiction over the defendant, since the alleged violation was not sufficiently proven to have existed in the state of New York, the statute for violations of the right of privacy didn't apply and the case was dismissed for lack of a cause of action. The plaintiff, Cuccioli, appeared in the Houston, Off-Broadway and Broadway productions of the musical Jekyll & Hyde from 1995 to 1999. The defendant, a German company with its principal place of business in Bremen, Germany, is in the business of theatrical productions and related endeavors. In 1998, the defendant received a fax signing off on the use of the title treatment for Jekyll & Hyde and obtained the rights to produce the musical in Germany. In August 1998, the defendant's musical and art director wrote to the plaintiff enclosing samples of merchandise and stating "our logo is a combination of the tour logo and the Broadway logo. If you have a closer look at it, you will see that the face is yours!" During the following month thereafter, the plaintiff's management firm demanded that the defendant cease and desist from using the plaintiff's image. In February 1999, the German production of Jekyll & Hyde premiered and in March 1999, the defendant signed an agreement with Polydor Records, GmbH, to release a compact disc of its German language cast recording of Jekyll & Hyde. The logo, containing the plaintiff's image, appeared on the CD, on the back of the package liner and on pages of the liner that offered other merchandise featuring the disputed image. The CD made its way to New York by the defendant's website and was also sold at stores. However, there was no evidence showing that the defendant was responsible for the CD reaching New York stores. The plaintiff brought this action in March 2000 alleging that the defendant used the plaintiff's image in violation of New York Civil Rights Law Sections 50 and 51. The plaintiff requested damages and an injunction. Although the defendant asserted a lack of jurisdiction, Judge Kaplan found that the defendant satisfied the criteria for jurisdiction by transacting business in New York on a regular basis. In addition, the defendant asserted that the one-year time limit in which to bring a Section 51 claim had expired because it had been two years since 1998, the date when the use began. However, the Court held that the one-year period of Section 51 begins only at the date of first publication in New York. Thus, if Section 51 applied to this use, the one-year period began to accrue when it was first placed on sale in New York. However, although the Court found that it had jurisdiction over the defendant, the Court held that Section 51 did not apply to this use because there was no proof that the defendant was responsible for the sale of the CD in New York stores. Further, since the other way of obtaining the CD was through the Internet, violation of Section 51could not apply to these sales because they did not constitute an in-state use. Since no uses were found to have met the requirement of Section 51, there was no cause of action and the plaintiff could not receive damages for this claim. This case notifies individuals that the one-year time limit, in which to bring a claim in New York for any use of an image that constitutes a right to privacy violation, begins on the date that the image is sold in New York. Further, a claimant in New York cannot collect damages on a use that constitutes a violation unless the use actually took place in New York. Sale of merchandise over the Internet has raised many questions about where a party can be sued and which jurisdiction's laws apply. This case illustrates, in terms of the privacy law, that a party cannot be liable in New York if it did not cause the unauthorized use to be made in New York. It should be noted that privacy laws differ amongst states and countries. In order to limit the risk of violating any privacy and publicity laws, valid model releases should be available for all images licensed for commercial use. This case is important for all photographer's and agencies who deal with commercial and stock photographs. If you have any questions, or would like more detailed information on this ruling, please call Wolff & Godin LLP at 212-787-1640.

29. LEGAL UPDATE:
Supreme Court Lets Ruling on CD-ROM Photo Stand
In the year's second significant victory for freelancers versus digital publishers, the U.S. Supreme Court refused to take up a lower court ruling that said National Geographic should have paid freelance photographer Jerry Greenberg for republishing his works in a 30-disc CD-ROM set without his permission. The court held, without comment, an 11th U.S. Circuit Court of Appeals ruling last March against the National Geographic Society for violating Greenberg's copyrights. Read the article: Wired News @ http://www.wired.com/news/politics/0,1283,47430,00.html. Further reading on GigaLaw.com: The Importance of Electronic Rights Revisited @ "http://www.gigalaw.com/articles/2001/landau-2001-08-p1.html"

30. PACA LEGAL UPDATE:
Right of Publicity applied to Photographs in Editorial Section of Catalog under California Law
by Nancy E. Wolff, Wolff & Godin, PACA Counsel
Fame may not be nearly as fleeting as we had once thought it to be. Legendary surfers George Downing, Paul Strauch, Rick Steere, Richard Buffalo Kealana, and Ben Aipa (the "surfers") know this, as the Ninth Circuit court found in Downing v. Abercrombie & Fitch that pictures of the men, which clearly identify them, used without their permission in a catalog, violated their right to publicity under California law. The court further rejected the idea that the state law claim of right to publicity or the federal Lanham Act claims were preempted by the federal Copyright Act, or that the use was protected as free expression under the First Amendment. The surfers found their picture in an Abercrombie and Fitch ("A&F") subscription catalog known as the "Abercrombie and Fitch Quarterly" ("Quarterly"). The Quarterly is A&F's largest advertising vehicle, accounting for 80% of the company's overall advertising budget. Approximately one quarter of the publication was devoted to editorial pieces, while the balance featured models wearing A & F's garments. When A&F decided on a surfing theme for an issue of the Quarterly, they came across photographs in a book that surfing photographer, LeRoy Grannis took at the 1965 Makaha International Surf Championship in Hawaii. A&F purchased the photographs from Grannis for use in its catalog, and Grannis then hand wrote the names of the surfers at the bottom of the photograph. A & F did not seek permission from the surfers to publish the photographs. The pictures of the surfers made it into the Spring 1999 Quarterly in a section entitled "Surf Nekkid". This section contained several articles, one recounting the history of surfing and a story entitled "Your Beach Should Be This Cool". Following the articles were two pages of what A&F labeled its "Final Heat Tees." These shirts were exact copies of the shirts the surfers wore in that picture. The surfers argued that the photograph violated their right to publicity under the California publicity statute (ó 3344 of the California Civil Code) and common law. A&F defended its use of the image by arguing that the photograph merely illustrates an article about surfing, a matter in the public interest. If a matter is found to be in the public interest, a cause of action for the right to publicity will be barred. The court, however, rejected A&F's argument. The court pointed out that the articles in the Quarterly made no mention of the surfers-that A&F made no mention that the men were surfing legends, which makes it unlikely that the pictures were used in the public interest. Instead, the court found that the way A&F used the surfers' picture does not contribute significantly to a matter of the public interest, and that A&F violated the surfers right to privacy by using their image as window dressing to advance the catalog's surf theme. A&F then argued that this right to publicity claim should be preempted by the federal Copyright Act. In order for a state law claim to be pre-empted by federal copyright law, the content of the protected right must fall within the federal Copyright Act. Where a photograph is subject matter that may be protected by the Copyright Act, the publication of the photograph itself, is not the basis for a right of publicity claim. Rather, a right of publicity claim focuses on the use of the surfers' likeness and their names in the published photograph. While the photographer owns the copyright to the photograph, the individuals depicted in the photograph retain a right to their identity or "persona". Therefore, the individuals depicted in the photograph can maintain a claim outside of the Copyright Act. Further, although five of the surfers resided in Hawaii, which has no comparable publicity statute, the court nevertheless applied California law, finding that Hawaii wouldn't wish to restrict its residents from recovery that others could obtain in California. Because the catalog was distributed in California, California could enforce its laws within its borders. . The surfers had also brought a Lanham Act claim, which the lower court had dismissed. California courts recognize that celebrities may have a trademark type claim if the use of their identify causes confusion as to the endorsement of goods or services. The appellate court found that there was enough factual basis for the claim and that it should not have been dismissed prior to trial. This case illustrates the difficulty in licensing photographs for "editorial" use in a magazine that is predominantly an advertising vehicle. Generally, if there is some relationship between a newsworthy article and the photographs, the use of the photographs will be considered editorial, even if the article is not directly about the subject of the photograph. However, in this case where the vehicle for the articles was an advertising publication for one product, rather than a magazine or newspaper that contains advertising pages for many products, the standard was much stricter, requiring that the article directly relate to the photographs in order to contribute to a matter of public interest. The producer of the catalog most likely believed that this was an editorial use, before this decision. Therefore, it is important to ask questions when a company that is not in the traditional news media requests a photograph for editorial use. It may be a better policy only to supply model released images for such users to avoid having to make a judgment as to whether the photographs serve a public interest. Any license agreement should require that the user indemnify you from any claims regarding the use of the photographs.

31. PACA LEGAL UPDATE: USE OF FILM CLIPS IN NETWORK OBITUARY DECLARED FAIR USE
by Nancy Wolff, PACA Counsel, Wolff & Godin LLP
When actor Robert Mitchum died on July 1, 1997, the networks, including CBS, CNN, and NBC had all prepared obituaries of a few minutes in length detailing his acting career and noteworthy aspects of his personal life. His one Academy Award nomination was for Best Supporting Actor in the 1945 movie G.I. Joe. Clips ranging from 9 to 20 seconds from G.I. Joe were included in the various segments produced by each network.

At the time of Mitchum's death, the film was owned by the University of Southern California (USC). However Larry Stern of Video-Cinema Films in New York was negotiating to purchase the rights, and sat with his stopwatch in front of his television set watching each obituary, measuring the amount of time that the film clip was aired on each station. He thereafter negotiated contract terms with USC to include retroactive rights to pursue copyright infringements.

As soon as his deal closed he sent letters to each station demanding payment of $5,000 to $10,000 for the use of the G.I. Joe clips. Each news organization responded that the use was fair. When Stern sued for copyright infringement, the defendants brought a motion to dismiss the action on the grounds that the use of the film clip was fair use under the Copyright Act.

Fair use is an uniquely American doctrine in Copyright law. It permits the reasonable use of copyrighted work without the owner's permission for purposes such as criticism, comments, news reporting, teaching, scholarship or research. (Section 107 of the Copyright Act). The Act requires a court to examine and weigh four non-exclusive factors.

1.Purpose and Character of the Use: Whether the it is used for one of the enumerated purposes, and whether the use is meaningfully different or transformative. The court held that the obituary which aired the clips was transformative as it was a different work than the movie and was not intended to supercede the movie. Further the clips were used because of their relevance to Mitchum, and not to summarize the movie. Even though the networks were for profit companies, the court found that this factor weighed in favor of fair use.

2. The Nature of the Copyrighted Work: The courts look to whether the original work has been previously published and whether it is fictional. Although the film is clearly fictional, this factor alone is not dispositive. The courts noted that the film had aired many times since on television, therefore, no first rights to air were usurped. The court found that this factor was neutral, or slightly against a finding of fair use.

3. Amount and Substantiality of Portion Used: Whether the clips formed a significant portion of the film, whether they were the heart of the film and whether the quantity used was reasonable in relation to the purpose of copying. In this instance, the court found that each aspect of this factor favored fair use given the de minimus amount of copying to the whole.

4. Effect and Use Upon Potential Market: The courts ask whether the challenged use competes with, by providing a substitute for, either the original copyrighted work, or derivative works that the copyright owner would traditionally expect to create or commission. The courts look at whether widespread conduct of this sort would have substantial impact on the market for the original. Although Stern admitted that the obituary did not compete with the market for the film, he argued that he was deprived a license fee if the use is deemed fair use.

The court denied this rational since in every legitimate fair use, the user could have obtained a license from the owner. Further, the court found that there was no regular traditional market for obituaries. In examining these four factors, the court found that the balance favored a finding of fair use and granted the defendants summary judgment. It is likely that there would be a different result if the obituaries contained non-public domain still images, since the entirety of the images would be used, and there is arguable a market for licensing such uses in obituaries or biographies. But

Fair Use is a strong doctrine in American law and copyright owners need to understand what uses are legitimately fair and which ones are not, since the term is used often, and with little understanding of the meaning. Because a program itself is newsworthy alone does not entitle a network to use any image without permission. The image itself would have to be newsworthy independent of the program to satisfy the fair use defense in most instances. This is not an easy concept to grasp or explain, and the courts continually wrestle with the meaning.