District Court Judge Louis Stanton denied certification of the plaintiff class yesterday in the Premier League’s copyright infringement case against YouTube.  The plaintiffs’ counsel had requested that the court include “every person and entity in the world who own infringed copyrighted works,” who have or will register them with Copyright Office as required, uploaded to YouTube.

Characterizing the case as “a Frankenstein monster posing as a class action,” Judge Stanton refused to allow this unwieldy definition to go forward.  At present, this means the case cannot proceed as a class action.

Interestingly, the order points out that copyright claims are, generally speaking, poorly suited for resolution by class.  “Each claim presents particular factual issues of copyright ownership, infringement, fair use, and damages, among others.”  This is not to say that no copyright dispute can be disposed by class action.  Indeed, a few unique examples exist, like Tasini and Muchnick, but these are the exceptions that demonstrate the rule.  Generally speaking, intellectual property is simply less conducive to class disposition since it less frequently satisfies the Federal Rules requirements such as commonality and typicality.

How can this be?  Class actions are frequently used to resolve property damage disputes.  Examples including ground contamination and polybutylene piping come to mind.

But real property ownership is easily proven, because we mandate recordation of land ownership.  By contrast, copyright registration is optional (and non-existent in most countries), and most IP transactions are not publicly recorded.  Real property defenses are generally narrower, because there are fewer countervailing policy considerations regarding restricting access to property than there are to regulating access to information.  IP, after all, is a utilitarian apparatus, designed to improve social welfare.  The notion of real property, on the other hand, is not subject to the sort of cost-benefit analysis implicit in the constitutional imperative to “promote progress.”  Damage to a real property interest is more easily determined, due to the rivalrous nature of real property usage.  Registered copyright owners, Judge Stanton points out, don’t have to worry about proving damages: they have statutory damages, which “is designed to give litigation value to each individual case.”  Real property owners have no such luxury.

Ultimately, real property is more amenable to class certification because of how it behaves.  Intellectual property doesn’t behave like real property; it behaves like regulation.

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Plaintiffs have outmaneuvered the legal system.  They’ve discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle—for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn.  So now, copyright laws originally designed to compensate starving artists, allow starving attorneys in this electronic-media era to plunder the citizenry.

– U.S. District Court Judge Otis D. Wright II, introducing a Star Trek reference-filled order, sanctioning the principals of the “Prenda Law” organization in relation to alleged fraud, identity theft, and copyright trolling. (Extensive coverage of the Prenda Law group is available via law blog Popehat and Techdirt.)

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In a 6-3 decision, the Supreme Court decided Kirtsaeng v. Wiley & Sons (11-697) this morning, overturning a decision from the U.S. Court of Appeals for the Second Circuit.  Adopting a position urged by CCIA and others in the technology industry, the Court applied the so-called “first sale” doctrine to all copyrighted goods regardless of where they were manufactured.

Generally, copyright holders can control the distribution of their goods.  That is, the copyright doesn’t just control copying, it also controls distributing.  The first sale doctrine is an exception to this rule, meaning that once the rights-holder has lawfully sold a copyrighted good, it may no longer use copyright law to control the distribution of that copy.  Its distribution rights are “exhausted.”  (Hence the doctrine is also sometimes referred to as “exhaustion.”)

More prosaically, first sale is sometimes described as “you bought it; you own it,” yet until now this rule had been interpreted by lower courts to apply only to copyrighted goods manufactured inside the United States.  The consequence of this interpretation was that the domestic resale, lending, or even gifting or donating of any copyrighted good made abroad would violate the distribution right.   MORE »

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One problem caused by a patent system with low thresholds is the “+ Internet” problem.  As Lore Sjöberg suggests at Wired this morning, the “+ Internet” problem may soon haunt 3D printing.  “Because,” he argues, “we don’t reward making cool things, we reward thinking about making cool things.”

So, what is the + Internet problem?  Here’s the recipe for making one: Take one part mundane activity, combine with one part new technology, retain counsel to shake PTO vigorously, and serve resulting patent over ice.  (Pro tip: serving multiple + Internets at once is referred to as “a Marshall.”)

All too frequently, a patent applicant links some ordinary, mundane activity with the latest technology advancement in an overbroad patent that most experts in the field considered too obvious to file.  When these applications are granted, they stifle innovation.  While it is reasonable to expect that some discrete, innovative implementations of 3D printing and Internet communication might indeed be patentable, ‘discrete’ and ‘innovative’ are not words one would use to describe many of the patents from the “+ Internet” era.  Consider shopping cart + Internet.  A recent favorite.  Or auction + Internet?  We serve those too.  Advertising + Internet?  Got you covered.

Sadly, the patent system has repeatedly suffered through paroxysms of this sort of old thing + new thing land-grabbing.  A wave occurs with most new technologies, from computers to the Internet to mobile to social media.  In fact, the recent Supreme Court case Bilski v. Kappos involved a “+ computer” patent.  This is not an entirely new phenomenon, however.   Some examples date back over a century, including the now-infamous “Selden Road Engine” patent.

“In 1895, George Selden obtained a U.S. patent with a claim so broad that “ it literally encompasse[d] most automobiles ever made.”  Yet the basic invention covered by that claim – putting a gasoline engine on a chassis to make a car – was so obvious that many people worldwide thought of it independently as soon as the most primitive gasoline engines were developed. The association that licensed the Selden patent collected hundreds of thousands of dollars in royalties – raising costs and reducing the output of automobiles – before Henry Ford and others challenged the patent, and the patent claim was judicially narrowed.”

(Source: U.S. Federal Trade Commission, To Promote Innovation)

Some of these patents have been subjected to adverse judgments, but not until after years of litigation, and in some cases, substantial royalty payments to the undeserving patentee.

The + Internet problem has worsened for numerous reasons.  One is that an increase in functional claiming – the ability for patentees “to claim ownership not of what they built, but of what it does” – has permitted the general broadening of patent scope.  Another is that the patent system is not particularly good at responding to prior art.  The fact that many people were independently pondering the application of combustion engines to locomotion did not necessarily foreclose the issuance of Selden’s patent.  Similarly, 3D printing patents may not necessarily be foreclosed by the fact that observers with little or no skill in the art of additive manufacturing are speculating on the potential of (for example) home-printed game pieces or remote delivery of parts.

(Enjoy your + Internets responsibly.) 

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A Wired story yesterday pointed to another incident at the congested intersection between IP and 3D printing.  The object at issue was a mobile phone dock in the image of the ‘Iron Throne,’ the probably-not-OSHA-compliant seat of power around which HBO’s fantasy epic, “Game of Thrones”, revolves.  A 3D modeler seeking “extra geek factor” had designed, and subsequently offered for sale, an iPhone dock replica of the throne in question.  Then the cease-and-desist letter from HBO arrived.

This isn’t the first case of avid, entrepreneurial, and CAD-savvy fans running afoul of IP law: in late 2011, a designer’s 3D replica of a metallic cube featured in the movie Super 8 led to a similar cease & desist from Paramount Studios, who had already licensed the right to produce replicas to another manufacturer.

(Television paraphernalia already made IP news earlier this month: Hollywood Reporter reports on Towle v. Warner Bros., in which a federal district court ruled last week that a custom auto shop making Batmobile replicas infringed the “character” of that vehicle, although the manufacturing technique in this case appears to have been more traditional.)

Previous DisCo posts on 3D printing [1] [2] [3] have noted the game-changing economic consequences of consumer-ready additive manufacturing technology: just as the Internet permits everyone to publish, 3D printing permits everyone to manufacture.  In the context of intellectual property, this underscores the new reality that when most consumer possess the capacity to violate IP rights, the system needs two things to function effectively: (1) perceived legitimacy, i.e., credibility; and (2) legal alternatives to infringement.

First, like any regulation, enforcement of IP law is expensive.  The system therefore depends upon voluntary compliance to sustain itself.  But many consumers will flaunt the rules – often with impunity – if, in their perception, the system lacks legitimacy.  This is why outrage over issues like smartphone unlocking is important: it communicates to the public (not just smartphone owners) that regulatory action on intellectual property in Washington can affect what they can or cannot do with their own property that they have purchased.  That is not a legitimacy-enhancing message to transmit.

Secondly, even if the system possesses credibility, that perceived legitimacy erodes when consumers cannot legally purchase the product through an authorized channel.  This means that a satisfactory answer to the question: ‘where can a geek buy a phone throne?’ is more important than one might initially suspect.

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