Case Comments
| Publication year | 2020 |
| Author | Lowell Anderson |
Lowell Anderson
Stetina Brunda Garred & Brucker
After selling a company to Plaintiff, Panchumarthi formed Truinfo, Inc. and was its CEO and sole owner. Plaintiff hired Panchumarthi as a consultant and later accused him of misappropriating customer information by unauthorized computer access occurring after his consulting was terminated. Truinfo was also hired, as a subcontractor, but that terminated before Panchumarthi's consulting agreement ended. Asserting alter ego, Plaintiff sought to hold Truinfo, Inc. liable for Panchumarthi's personal actions. But alter ego involves holding the corporation liable for an individual's actions to avoid misuse of the corporate shield. Plaintiff's theory is called "reverse piercing," and with one exception has been rejected by California courts. Reverse piercing requires "that (1) 'there is such a unity of interest and ownership that the individuality, or separateness, of the said person and corporation has ceased;' and (2) 'adherence to the fiction of the separate existence of the corporation would... sanction a fraud or promote injustice. [citation omitted]'" The alter ego liability assertion was dismissed without leave to amend. Calsoft Labs, Inc. v. Panchumarthi, 2020 U.S.P.Q.2d 36439 (N.D. Cal. 2020) (Magistrate Judge Cousins).
An employment agreement was unconscionable. "The waiver of punitive damages as a remedy for all nonstatutory claims, then, is substantively unconscionable regardless of its mutuality." Injunctive relief provisions that waived a bond and the requirement that a party show irreparable harm were also substantively unconscionable—as no legitimate commercial need for such provisions was articulated. The waiver of a jury trial for any controversy or claim determined in a court of law was substantively unconscionable. While more than one unconscionable provision does not prevent severance and require the entire agreement be voided, it is a factor. Here, the voiding of an employment agreement was not an abuse of discretion and was affirmed. Lange v. Monster Energy Co., 46 Cal.App.5th 436 (Cal. 2d Div. 2020).
The Alliance of Artists and Recording Companies, Inc. (AARC) sued manufacturers of vehicle CD recorders/players and the car manufacturers' whose vehicles included those recorders/players, for infringing the Audio Home Recording Act of 1992, 17 U.S.C. §§ 1001-1010 (AHRA). Plaintiff alleged the AHRA covered all devices capable of digitally reproducing recorded music with recording functions designed or marked for doing so. "First, we hold that a digital audio recorder is covered by the AHRA only if it can make a 'digital audio copied recording' that is also a 'digital musical recording' as that term is defined by the Act. Second, we hold that, because it is undisputed that the hard drives in Appellees' devices do not contain 'only sounds,' they do not qualify as 'digital musical recording[s]' and, therefore, the devices do not qualify as 'digital audio recording device[s]' subject to the Act. Third, we reject AARC's partition theory. We hold that, at least where a device fixes a reproduction of a digital musical recording in a single, multi-purpose hard drive, the entire disk, and not any logical partition of that disk, is the 'material object' that must satisfy the definition of a 'digital musical recording' for the recording device to qualify under the Act." "[T]he legislative history of the AHRA indicates that at least two features of the enacted legislation were meant to ensure that personal computers and computer storage media generally would not be subject to the Act." A summary judgment of non-infringement was affirmed. Your car CD is thus not infringing. All of Artists & Recording Cos. v. Denso Int'l Am., Inc., 947 F.3d 849, 2020 U.S.P.Q.2d 28761 (D.C. Cir. 2020).
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Defendants argued "virtual identity" was required for determining "unlawful appropriation" under a selection and arrangement theory of infringement between the music for the songs Taurus and Stairway to Heaven. That issue was not reached, but was rejected in dicta. "But to be clear, we do not recognize a separate, heightened standard for proving actionable copying. The standard is always substantial similarity. Of course the degree of overlap in original expression that is required for the similarity to be substantial is determined by the range of possible protectable expression. [citation omitted] More similarities are required to infringe if the range of protectable expression is narrow, because the similarities between the two works are likely to cover public domain or otherwise unprotectable elements." "We have at times described this result as the work having a 'thin' copyright." Skidmore v. Led Zeppelin, 952 F.3d 1051 (9th Cir. 2020) (en banc).
Plaintiff developed five anthropomorphic characters called The Moodsters, each a different color correlated to different human. Disney's "Inside Out" film allegedly infringed because it used five anthropomorphized emotions that live inside the mind of an 11-year-old girl. Under Towle, "'lightly sketched' characters such as The Moodsters, which lack 'consistent, identifiable character traits and attributes,' do not enjoy copyright protection." But the Ninth Circuit did "not embrace the district court's view that Towle represents the exclusive test for copyrightability" of characters. Copyright protection also "extends to characters—both literary and graphic—that constitute 'the story being told' in a work," but a "'character is not copyrightable under this test where 'the character is only the chessman in the game of telling the story.'" Plaintiff's work lacked any prolonged engagement with character development or a character study of The Moodsters. Allegations of an allegedly breached implied agreement with Disney were conclusory. The dismissal of copyright and contract claims was affirmed. Daniels v. The Walt Disney Co., 952 F.3d 1149, 2020 U.S.P.Q.2d 10178 (9th Cir. 2020).
"A deeplink is a hyperlink to another website that is not affiliated with the site where the link is posted." They are also known as line links. When DJ Plaintiff was threatened with copyright infringement for posting three photos, the photos were removed from the website and the website was sold. Trying to avoid litigating, the Defendant copyright owners granted the "owners and operators of AwardsWatch.com an irrevocable retroactive and future license to display his image via an inline link site on Awardswatch.com, including any of its subdo-mains" and sought dismissal on mootness. The license did not protect Plaintiff from future lawsuits as it was not a covenant not to sue. The Plaintiff was no longer the owner or operator and the license left users exposed to potential litigation and liability for posting to the forum. The license was limited to the three photos in the FAC leaving Plaintiff and users in the forum liable for deeplinks to other photos. As the license was too narrow to make it "absolutely clear" that the Defendants would not find another instance of copyright infringement on the website, the motion to dismiss for mootness was denied. Anderson v. Seliger, 2020 U.S.P.Q.2d 10139 (N.D. Cal. 2020) (Judge Davila).
The district court found that the defendants' use of a song in musical competitions constituted "teaching" and was as a fair use. The Ninth Circuit found that rearranging and combining several songs for a competitive musical performance by choral students, resulted in a non-profit, educational and transformative use of the song so the purpose and character of the use favored fair use. Using 20 seconds of the only assertible song in a transformed performance for a high school competition did not harm the market for the song. Using a small portion of the song to create sheet music for a new and different high school choir showpiece performance was thus a fair use. Tresóna Multimedia, LLC v. Burbank High Sch. Vocal Music Ass'n, 953 F.3d 638, 2020 U.S.P.Q.2d10229 (9th Cir. 2020).
Plaintiff "sued a public school teacher, a not-for-profit Boosters Club, and parent volunteers" on three songs for which it lacked standing and a fourth song protected by fair use. Only portions of the songs were used and those were transformed into a combined performance for a musical competition for a non-commercial use. The district court abused its discretion in denying attorney's fees so the case was remanded to determine fees. Tresóna Multimedia, LLC v. Burbank High Sch. Vocal Music Ass'n, 953 F.3d 638, 2020 U.S.P.Q.2d10229 (9th Cir. 2020).
After pleadings were closed Defendant properly amended its answer to assert the defense of license, and after discovery on the issue Plaintiff offered a stipulation to dismiss with prejudice with a reservation of Defendant's right to seek fees. Defendant refused as it wanted prevailing party status before seeking fees and costs. Plaintiff thus filed a motion to dismiss its own complaint, which the court granted. The Parties were referred to a settlement conference with a Magistrate Judge and if not amenable to that, were ordered to engage in direct settlement negotiations, with any fee motion accompanied by a declaration specifying when and how long the engaged in such negotiations. Adlife Mktg. & Commc'ns Co. v. Popsugar, Inc., 2020 U.S.P.Q.2d 10254 (N.D. Cal. 2020) (Judge Koh).
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A jury instruction quoted a Supreme Court case on what was protectable and not protectable, including that "copyright does not protect ideas, themes or common musical elements, such as descending chromatic scales, arpeggios or short sequences of three notes," and the jury found no extrinsic similarity between the music for the songs "Stairway to Heaven' and Taurus, based on eight bars of sheet music of the copyright...
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