Nov.-Dec. 2010 Quick Links, Part 3 (Special Extra-Long Copyright Edition)

By Eric Goldman

* Oracle got a $1.3B jury verdict in its anti-scraping lawsuit against SAP. My prior blog coverage (1, 2, 3). This is one of the largest copyright damage awards ever (if not the largest), and it ranks highly on the list of largest verdicts of any kind. Oracle got another $16M+ in prejudgment interest, and Oracle and SAP settled Oracle’s other claims for an additional $120M. Oracle also got the non-monetary benefits of publicly tweaking its major rival (SAP), plus it was able to get a few digs into its frenemy Hewlett Packard over the testimony of AWOL former SAP exec Léo Apotheker. However you measure it, Oracle got a huge win here.

The jury’s verdict was partially a product of SAP’s litigation strategy, which included admitting responsibility for its subsidiary TomorrowNow’s behavior and admitting copyright liability—leaving only the question of damages for the jury. SAP’s basic argument to the jury was “Yes, we did it, just don’t make us pay a lot of money for it.” Those kinds of arguments rarely play well with juries.

Although the damages calculations raised some complex and novel doctrinal issues, because it’s a jury verdict, I don’t think this case is likely to have a significant precedential effect. However, the verdict does act as a cautionary M&A tale. SAP bought TomorrowNow for $10M; if the jury verdict stands, the true cost of TomorrowNow will be nearly $1.5B. What looked like a cheap deal for SAP turned out to be quite expensive.

Still unresolved is whether the US DOJ will bring any criminal charges against executives from TomorrowNow or SAP. It’s possible that the massive financial punishment already meted out civilly will partially alleviate the pressure to seek separate criminal punishment.

Good coverage from Am Law Daily and Bloomberg.

* In response to allegations that they facilitated copyright infringement, ICE seized—without warning—82 domain names in “Operation In Our Sites.” As we learn more about this seizure, it’s clear that ICE’s seizure was lawless. Techdirt sketches out some defects, and check out a seizure warrant application for yourself. Worse, some of the seized sites were busted for distributing music at the copyright owner’s request. Details at Techdirt (1, 2) and NYT. This provides yet more evidence that it’s become impossible to distinguish between “pirated” online files and files that copyright owners are deliberately “leaking” for the promotional value. YouTube can’t figure it out; ICE can’t figure it out; the copyright owners can’t figure it out. It’s time to abandon any pretense that online copyright infringement is “apparent” on its face. Meanwhile, this seizure reiterates why COICA, and any other efforts to cut off putatively illegitimate activity through domain name seizures, are irreparably ill-conceived.

* HarperCollins Publishers L.L.C. v. Gawker Media LLC, 2010 WL 4720396 (S.D.N.Y. Nov. 22, 2010). Prepublication excerpts of Sarah Palin’s book on Gawker led to a TRO.

* I could have a whole post dedicated to Righthaven. A few tidbits:

– Failed Senate candidate Sharron Angle settled Righthaven’s copyright infringement lawsuit.

– Sherman Frederick, the former publisher of the Las Vegas Review-Journal, got caught in a hypocritical situation.

LA Times on Righthaven.

* The Supreme Court affirmed the Costco v. Omega appeal by an equally divided court in a one-line opinion. Also, Supreme Court certiorari denials include:

– Bryant v. Media Right Productions Inc. My prior blog post.

– Harper v. Maverick Recordings, with an interesting dissent from Justice Alito. Sheffner’s take.

* Heartland and Forest River are rival RV manufacturers locked in a litigation death match. My initial blog post. The latest ruling: RV floorplans aren’t a protectable architectural work under the Architectural Works Copyright Protection Act, but republishing the competitor’s floorplan in ad copy goes to trial.

* Faulkner Press v. Class Notes (N.D. Fla. Nov. 23, 2010). Some interesting discussion about the copyrightability of professor notes, the potential infringement by note taking services, and the liability for using the professor’s name in marketing the notes.

* Capitol Records v. BlueBeat, 2:09-cv-08030-JST -JC (C.D. Cal. Dec. 8, 2010). A rogue online music website’s odd defenses get emphatically rejected.

* Google is “voluntarily” cracking down on copyright issues. An interview goes into more depth. wonders if Google has “jumped sides in copyright war.”

In a possibly related move, Mastercard is supporting COICA. Is this a reaction to the Gucci v. Frontline case?

* US v. Crippen (C.D. Cal. Nov. 23, 2010). No fair use defense to a 1201 anti-circumvention prosecution. Update: the follow-on development and the dismissal.

* NYT on joke stealing via the Internet. “’The only way to battle a thief is to out-write and out-create them,’ said Patton Oswalt, a stand-up comedian and actor who has used the Internet as a bully pulpit to confront his imitators. ‘The good thing about the Internet is, it’s showing how much dumb thievery there is out there.’”

* I’m very delayed in mentioning BanxCorp v. Costco Wholesale Corp., 2010 WL 2802153 (S.D.N.Y. July 14, 2010), a case involving the IP protection for a numerical index. The court’s test for copyrightability: “to demonstrate that the final values produced from raw data are protectable by copyright, a plaintiff must demonstrate either that (1) the raw data used to create the final value were protectable; or (2) the method of converting the raw data into a final value was an original (but not necessarily novel) process that is neither widely accepted as objective, nor an industry standard; or (3) the final value did not attempt to measure an empirical reality.” Interesting FN7: “it is actually to be expected that the more acceptance a financial measure obtains (i.e. the more successful it is), the more ‘fact-like’ it becomes.” From my perspective, the court’s approach, though thoughtful and nuanced, reflects how copyright doctrine has gone horribly wrong. The only doctrinally sustainable result is to say that final numerical values of a formula are categorically uncopyrightable—PERIOD. Otherwise, watch how this court contorts itself trying to deal with the copyright merger doctrine (the court doesn’t discuss fair use) and 1202 copyright management removal (how do you remove the CMI from a number???). The court also says the plaintiff’s hot news claim survives copyright preemption.