Decisions in Brief

AuthorJohn C. Gatz
PositionJohn C. Gatz is a member of the firm Nixon Peabody in Chicago, Illinois. Column contributors include the following writers: Copyrights: Zachary J. Smolinski, Smolinski Law PC; Michael N. Spink, Brinks, Hofer, Gilson & Lione; Mark R. Anderson, Akerman LLP. Patents: Cynthia K. Barnett, Johnson & Johnson; R. Trevor Carter, Daniel M. Lechleiter,...
Pages60-64
Published in Landslide® magazine, Volume 10, Number 5 , a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2018 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Decisions in Brief
COPYRIGHTS By John C. Gatz
John C. Gatz is a member of the rm Nixon Peabody in Chicago, Illinois. Column contributors include the following writers: Copyrights:
Zachary J. Smolinski, Smolinski Law PC; Michael N. Spink, Brinks, Hofer, Gilson & Lione; Mark R. Anderson, Akerman LLP. Patents: Cynthia K.
Barnett, Johnson & Johnson; R. Trevor Carter, Daniel M. Lechleiter, and Andrew M. McCoy, Faegre Baker Daniels LLP; Robert W. (Bill) Mason,
CeloNova BioSciences, Inc.; Peter J. Prommer, Nixon Peabody LLP. Trade Secrets: R. Mark Halligan, FisherBroyles LLP. Trademarks: Janet
M. Garetto and Elizabeth W. Baio, Nixon Peabody LLP; Amy L. Sierocki.
BMI License May Include Fractional Rights
United States v. Broadcast Music, Inc., 125 U.S.P.Q.2d 1186
(2d Cir. 2017). BMI is a performance rights organization that
holds the performance rights to millions of musical works and
acts as the agent for songwriters and publishers to set rates,
issue licenses, and collect licensing fees from entities seeking
to perform the musical works. The U.S. Department of Justice
(DOJ) challenged the BMI blanket license as an illegal restraint
of trade, and BMI and the DOJ entered into a consent decree
in 1966 that was amended in 1994. The DOJ alleged that BMI
violated the consent decree by including works in the blanket
license where BMI only had a fractional interest in the work.
BMI argued that the consent decree did not prohibit fractional
licensing or require only full-work licensing. The district court
agreed with BMI and the DOJ appealed.
The Second Circuit upheld the ruling. The Second Circuit
noted that the language of a consent decree “must dictate what
a party is required to do and what it must refrain from doing.”
The BMI consent decree is silent on fractional licensing, so
BMI may license works fractionally. The Second Circuit
rejected the DOJ argument that “right of public performance”
found in the consent decree must mean an “immediate right
to actually perform” the work without risk of infringement,
something that a fractional license could not provide. The Sec-
ond Circuit found that fractional licensing was common when
the consent decree was modied in 1994, and that the consent
decree could have been amended at that time to add the prohi-
bition the DOJ sought in this case. Alternatively, the DOJ may
le an action under the Sherman Act in the future to address
any competitive concerns with the consent decree.
Play Fight!
Pastime LLC v. Schreiber, 125 U.S.P.Q.2d 1025 (S.D.N.Y.
2017). The play titled Once Upon a Pastime was subject to
an ownership dispute. Defendant Lee Schreiber holds a reg-
istration from the U.S. Copyright Ofce listing him as the
play’s sole author, but the plaintiffs Pastime LLC, DennisM.
Minogue (personally known as Terry Cashman), PKM Music,
and Metrostar Music (collectively Pastime) claim that Sch-
reiber’s employment contract divested him of any copyright
in the work, and that he transferred his copyrights to Pastime.
Pastime acquired rights to a musical titled Passin’ It On, for
which Cashman and PKM Music had written the music. The
rst producers had commissioned an author to write the book
for the project, but after some underwhelming performances
hired Schreiber and Cashman to rewrite the book under the
new title Once Upon a Pastime. Still dissatised with the proj-
ect, the producers transferred their rights to the plaintiffs. PKM
Music and Metrostar Music began presenting readings of the
musical during which Schreiber made some revisions. Still not
having success, Cashman decided to contract with experienced
author James Glossman, who made further revisions until the
musical was picked up for production.
Despite Schreiber holding the copyright registration, his
original employment agreement with the producers stated:
“You acknowledge and agree ... that the Book ... was spe-
cically commissioned by [the producers] and shall be
considered for copyright ... purposes a contribution to a col-
lective work and a work for hire for [the producers]. ... [The
producers] are, therefore the owner[s] of all rights in and to
the Book and all copyrights therein....” Pastime argued
that, in light of Schreiber’s employment agreement, Schreiber
intentionally falsied the writing and ownership information
in his copyright registration application.
The district court denied Pastime’s request for granting
“cancellation and nullication” of the copyright registra-
tion, noting that nothing in the Copyright Act, nor any other
federal statute, grants federal courts the power to cancel or
nullify a copyright registration. However, the district court
did conclude that Pastime had stated a cognizable claim for a
declaratory judgment as to ownership rights in Once Upon a
Pastime. Therefore, the district court held that Pastime’s com-
plaint would at least partially survive the motion to dismiss,
and ordered Schreiber to answer the complaint.
Reward to Oracle Decreased in Litigation with
Rimini Street
Oracle USA, Inc. v. Rimini Street, Inc., 879 F.3d 948, 125
U.S.P.Q.2d 1380 (9th Cir. 2018). Rimini Street, a company
that provided software maintenance and support services
for Oracle software products, was sued by Oracle under the
theories of copyright law and California and Nevada state
computer criminal law statutes. Oracle argued that Rimini’s
acquisition of Oracle support materials through the use of
automated downloaders violated those statutes, and the dis-
trict court ruled in favor of Oracle on that point.
The Ninth Circuit evaluated the statutes at issue and deter-
mined that the district court improperly construed the statutes
to mean that any downloading of information from a web-
site by a means not allowed by the website’s user agreement
was a violation of the statutes. Here, the user agreement pro-
hibited the use of automated downloaders, but Rimini was in
fact authorized to make the downloads. Damages of over $14
million to Oracle subsidiaries awarded under these state stat-
utes were eliminated by the Ninth Circuit, as were amounts
awarded under other theories of recovery.

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