IPL 134 Copyright Exam Prof. Vicente B.

Amador PART ONE CASES Question 1: 10% Soon after you passed the bar, you started working for an IP firm. The Firm did not ask you to sign an employment agreement and you did not ask for one. One of your clients is Makahiya, a consumer-oriented services company. A few months ago, Magiting, Makahiyas in-house counsel, asked you to draft a Makahiya user agreement and privacy policy (collectively, the Agreement). When you drafted the Agreement, you started with a user agreement and privacy policy form that you prepared for another client and then made the following changes: Deleted some paragraphs from the initial agreement that you didnt consider pertinent to Makahiyas business. Incorporated some paragraphs from Makahiyas existing agreement, which was drafted by lawyers of its former law firm, and some language from Makahiyas marketing materials, which were prepared by its employees Added language required by statutes, including the Civil Code and the ECommerce Act Added some paragraphs from other agreements, some of which you authored and some that you found on the Internet using googles search engine Created multiple paragraphs from scratch, including several contractual solutions to legal problems faced by Makahiya Edited all of the above for style and consistency Made a large number of revisions suggested by Maginoo, your supervising partner and various other lawyers in the firm you consulted on specific issues The resulting Agreement is a complex document of roughly 5,000 words, including many paragraphs that are uniquely applicable to Makahiya because they describe Makahiyas business or marketing practices.Your law firms engagement letters with clients never address intellectual property issues. Today Maginoo calls you in a fit of anger. Since Makahiya published your version of the Agreement in its marketing manual, dozens of Makahiyas competitors copied the Agreement, simply did a global search and replace to change the name, and then published the slightly revised versions of the Agreement as their own user agreement and privacy policy. Maginoo is mad because Makahiya spent hundreds of dollars on your firms legal bills for the Agreement to create a state-of-the-art document, and his competitors are free-riding on these investments. Maginoo wants to sue the competitors for copyright violations. He asked you to prepare a memorandum of law on the factual and legal issues involved in this intended action. Assume that all copyrightable material is governed by the IP Code (no need to discuss any international treaty provision). Assume any infringements are taking place in the Philippines.

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Memorandum of Law I. Statement of the Issues

In light of the factual and legal issues involved in this intended action, it is respectfully submitted: a.) That the Agreement is copyrightable and thus falls under the ambit of protected subject matter; b.) That the Law Firm owns the copyright to the Agreement by virtue of Subsection 178.3 of the Code; while Makahiya owns actual Agreement such work commissioned under Subsection 178.4; and c.) That the unlawful appropriation of the original elements of the Agreement constitute a prima facie proof of copyright infringement. II. Statement of the Arguments

First Issue: Copyrightability of the Agreement The Agreement is an original intellectual creation in the literary and artistic domain (Subsection 172.1) and is protected from the moment of its creation, by the sole fact of its creation, irrespective of its mode or form of expression, as well as of their content, quality and purpose. (Subsection 172.2) In a similar vein, Justice Sandra Day O'Conner, in Feist vs. Rural Telephone (1991)1 said "the writings which are to be protected are the fruits of intellectual labor." As such, it is deemed as a literary or artistic work and falls under the ambit of protected subject matter. To be copyrightable, a work must be original in that the author has created by his own skill, labor and judgment, but no large measure of novelty is necessary.2 In other words, what the law protects is not the authors intellectual conception but his intellectual production. Hence, the present case, while the Agreement incorporates some paragraphs from Makahiyas prior legal agreement and marketing manuals, as well as some paragraphs from documents of my authorship and from those found on-line, nevertheless, the resulting complex document was the product of my own intellectual labor through my judicious selection, arrangement, revisions, editing and original creative expression. Given that any official text of a legislative, administrative or legal nature, as well as any official translation thereof (Section 175) the added language required by statutes, including the Civil Code and the E-Commerce Act is deemed unprotected subject matter, I was free to use these texts liberally in drafting a legal document for Makahiya but in no way does this suggest that I was appropriating such for copyright. Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at

1 2

499 U.S. 340 (1991) Vicente B. Amador, Copyright Under the Intellectual Property Code (1998), 761 0678142 2

least some minimal degree of creativity.3 This rooted in the principle that originality remains the sine qua non of copyright.4 This spark of creativity is evidenced by my use of other documents authored by myself, the creation of multiple paragraphs from scratch, including several contractual solutions to legal problems faced by Makahiya that are uniquely applicable to them. Likewise, even the contents that may be deemed factual in nature were in fact chosen as a matter of discretion based on my personal judgment and taste. The fact that the Client, my supervising partner and various other lawyers in the Firm gave various suggestions that guided my revisions, the final output still relied on the manner and mode of expression I employed arranging the flow of the Agreement to fit such changes. Furthermore, a work may be protected by copyright even though it is based on something already in the public domain, if the author, through his skill and effort, has contributed a substantially distinguishable variation from the older works.5 Hence, even if there was an addition of some paragraphs from other agreements, including those drafted by a another law firm and those found using Googles search engine, as long as there was a substantial revision as to change the resulting Agreements embodiment and its expression, then this will not constitute an infringing act. This is line with the rule that while an author may not copy from an earlier work, this may still be used as a guide for the purpose of gathering information, provided he makes an original investigation.6 Based on the foregoing, the complex 5,000-word final Agreement is thus copyrightable given its sufficient originality. Second Issue: Ownership of the Copyright While the general rule is that copyright ownership vests initially in the author or authors of a work, exceptions can be found in Subsection 178.3 and 178.4 of the Intellectual Property Code which refers to works-for-hire. Under the work-for-hire doctrine, the copyright shall automatically be vested in the employer or the hirer of the author and not the author himself if the work is the result of the performance of the latters regularly-assigned duties.7 To avoid this automatic vesting of the copyright in the person of the employer, Subsection 178.3 (b) provides that there must be an agreement, either express or implied, to the contrary. Likewise, Subsection 178.4 states that in the case of a work-commissioned by a person other than an employer of the author and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of work, but the copyright thereto shall remain with the creator, unless there is a written stipulation to the contrary. Hence, based on the forgoing legal provisions, the ownership of Agreements copyright belongs to the Law Firm, absent any stipulation to the contrary between the latter and myself. Conversely, the ownership of the actual Agreement belongs to Makahiya who
3 4

Feist Publications, Inc. vs. Rural Telephone Service Co., Inc. (supra.) Id. 5 Amador, 30 6 Jewelers Circular Pub. Co. vs. Keystone Pub. Co., 259 U.S. 581 (1922) 7 Amador, 354 0678142 3

had commissioned such work pursuant to a client engagement with the Firm. This is bolstered further by the fact that the Firms engagement letters with clients never address intellectual property issues. Third Issue: Existence of Infringing Acts Infringement of copyright, or intellectual piracy, which is a synonymous term in this connection, consists of any person, without the consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright. 8 It constitutes an unlawful invasion and injurious appropriation of any one or more of the exclusive rights conferred by the copyright. Section 177 of the Intellectual Property Code provides that the economic rights shall consist of the authors right to carry out, authorize or prevent the enumerated exclusive rights. Hence, direct infringement is committed by any person or persons in this case, Makahiyas Competitors who carry out any facts in violation of the authors economic rights under Section 177, their moral rights and droit de suite under Chapters 10 and 11. In the present controversy, the Law Firm has the exclusive right over the reproduction of the work or substantial portion thereof; (Subsection 177.1) the transformation of the work; (Subsection 177.2) the first public distribution of the original and each copy of the work; (Subsection 177.3) public display of the original or a copy of the work; (Subsection 177.5) and other communication to the public of the work. (Subsection 177.7) Taken together, these rights encompass virtually all significant uses of copyrighted work. In the case at hand, Makahiyas competitors copied the Agreement and made trivial changes as to names via a global search. It then published the slightly revised versions of the Agreement as their own user agreement and privacy policy. These acts cannot be deemed as fair use of the works given the insubstantial changes as to the form and mode of expression of the original Agreement. This patently goes against general rule that if a new work adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message then it constitutes as fair use.9 However, given the complete absence of critical bearing on the substance or style of the original composition10 in the Competitors agreements leads to the conclusion that they merely wanted to avoid the drudgery and difficulties associated to making something creatively original. Furthermore, the resulting injury as to the investments of Makahiya and the potential besmirching of the Firms reputation and professional goodwill is indicative of the injurious effect 11 resulting from the indiscriminate copying by the Competitors. The term copying, when used in reference to the infringement of a copyrighted publication, includes not only paraphrasing, but appropriation of the literary work and ideas of
8 9

Bobbes-Merill Co. vs. Strauss, 210 US 339 (1908) Campbell vs. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) 10 Id. 11 Habana vs. Robles, G.R. No. 131522 (1999) 0678142 4

another, which includes arrangement and selection as well as language.12 The extent of the copying done, whether in whole or in part, is not the graven of the invasion of copyright. What sufficiently suffices as proof is that so much is taken that the value of the original is sensibly diminished, or the labors of the author are substantially and injuriously appropriated by another.13 III. Conclusion

In sum, the Law Firm has a cause of action against Makahiyas Competitors for the unauthorized copying and profiting from the original elements of the Agreement. In view of the foregoing, the Law Firm is entitled to civil and administrative relief in the form of damages (Section 216(b)), a judicial issuance granting an injunction (Section 216(a)) and the destruction or disposal of the infringing material without any compensation to the infringer (Section 216 (d)); furthermore, criminal sanctions may be imposed on the infringer in the form of imprisonment and fines. (Section 217) What are your legal options Makahiyas competitors who copied the Agreement? Justify your cause of action. The Law Firm may pursue the civil and administrative reliefs enumerated in Section 216 of the Code; and criminal sanctions may be imposed on the Competitors in the form of imprisonment and fines under Section 217. First, the Firm may seek preliminary injunctive relief wherein the court may order the Competitors to desist from an infringement. (Subsection 216 (a)) Second, the court may order the Competitors to deliver under oath, for impounding during the pendency of the action, upon such terms and conditions as the court may prescribe, the infringing works. (Subsection 216 (c)) Likewise, the Competitors may be made to deliver under oath for destruction without any compensation all infringing copies of the Agreement. (Subsection 216 (d)) Third, the Competitors may be made to pay to the Law Firm, as copyright proprietor, actual damages, including legal costs and other expenses, as he may have incurred due to the infringement as well as the profits the infringer may have made due to such infringement. (Subsection 216 (b)) This may include the payment of moral and exemplary damages, which the court may deem proper, wise and equitable and the destruction of infringing copies of the work even in the event of acquittal in a criminal case. (Subsection 216 (e)) Fourth and lastly, the law firm can file a criminal action against the competitors for copyright infringement and penalties in the form of imprisonment and fines shall be provided for. (Subsection 217.1) In determining the number of years of imprisonment and
12 13

West Publishing Co. vs. Edward Thompson, 169 Fed. 833 (1911) Id. 0678142 5

the amount of fine, the court shall consider the value of the infringing materials that is, the Agreement that is said to have cost hundreds of dollars that the Competitors copied from and the resulting damage that the copyright owner has suffered by reason of the infringement. (Subsection 217.2)

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Question 2: 10% Bloggle is a search engine that works like the google.com search engine in that it: initiates robots that canvass the Web looking for content, places copies of desired content into a central database, lets users run keyword queries against the central database, displays search results listing web pages that contain the searched keyword (which search results display a portion of the page and a link to the website), and displays banner and text ads that are specifically targeted to the searched keywords. However, Bloggle differs from google.com in some key respects: Bloggle indexes PDF files. PDF is a file format that lets all readers see the files text and graphics exactly as the author sees them. Many PDF files are locked so that viewers cannot edit the files contents or copy any portion of the file. Each search result displayed to a user contains links to the original PDF file. If a Bloggle user clicks on the link, it will cause the original indexed website to display the original PDF file directly to the user within the same browser window. In order to index the text in the PDF files, Bloggle converts each PDF file to HTML (the standard format for web pages) when the file is added to Toogles central database. When Bloggle displays search results, in addition to linking to the original PDF file, Toggle also permits users to see the HTML file that Bloggle has in its central database. The HTML file is served directly to users from Bloggles central database. HTML files are fully editable, and users can copy portions of HTML files. In addition, although they contain the same substantive content, the HTML file has minor formatting differences from the PDF files formatting as published by the author. In the HTML version, Bloggle also highlights the keywords the user was searching for (making it easier for the user to find those words).

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Identify each possible violation of the provisions of the IP Code committed by Bloggle and describe why you think there could be a prima facie violation (including identifying the strongest facts that would support the violation and your cause of action). Bloggle may be liable for: (a) direct infringement in violation of authors economic rights under Section 177, their moral rights and droit de suite under Chapters 10 and 11; and (b) their and contributory infringement under Section 217.3(b). Section 177 of the Intellectual Property Code provides that the economic rights shall consist of the exclusive right to carry out, authorize or prevent the enumerated exclusive rights. Direct infringement is committed by any person in this case, Bloggle, which is a company and thus an artificial person for the purposes of law who carries out any facts in violation of the authors economic rights under Section 177, their moral rights and droit de suite under Chapters 10 and 11. In the present controversy, the author has the exclusive right over the reproduction of the work or substantial portion thereof; (Subsection 177.1) the transformation of the work; (Subsection 177.2) the first public distribution of the original and each copy of the work; (Subsection 177.3) public display of the original or a copy of the work; (Subsection 177.5) and other communication to the public of the work. (Subsection 177.7) Taken together, these rights encompass virtually all significant uses of copyrighted work. In the problem at hand, the PDF files are original intellectual creations in the literary and artistic domain (Subsection 172.1) and are protected from the moment of their creation, by the sole fact of their creation, irrespective of their mode or form of expression, as well as of their content, quality and purpose. (Subsection 172.2) As such, these files are literary or artistic works and fall under the ambit of protected subject matter. First, Bloggles original insertion of desired work into its central database and its subsequent conversion of each PDF file to HTML, absent any such authorization to do so, is a violation of the authors exclusive right over the reproduction of the work under Subsection 177.1. Second, Bloggles conversion of PDF files to HTML for the purposes of indexing, changes to the mode or form of expression of the work without the authors prior authorization, is a violation of the authors the exclusive right to arrange or transform of the work under Subsection 177.2. The facts disclose that while the HTML version contains the same substantive content, there are minor differences from the formatting as published by the author. Also, the act of highlighting the keywords the user was searching for in the HTML version which substantially alters the appearance of the PDF file as published. The fact that all these HTML files are fully editable and users can copy portions thereof, notwithstanding whether or not the PDF file was locked by the author to begin with, changes the form or mode of expression of the work and it constitutes the

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creation of an unauthorized derivative work which falls squarely within the realm of copyright protection. Hence, all these taken into consideration may constitute prima facie evidence of direct infringement. On the other hand contributory infringement, which originates in tort law,14 involves knowledge of the infringing activity and induces, causes or materially contributes to the infringing activity of another.15 It stems from the notion that one who directly contributes to anothers infringement, although not as the prime tortfeasor, is nevertheless jointly and severally liable for infringing on a right protected by law. (Subsection 216.1) Hence, even one who lawfully acquires an authorized copy of a work16 is liable as an infringer who distributes the article for purpose of trade, or for any other purpose to an extent that will prejudice the rights of the copyright owner in the work. (Subsection 217.3(b)) In the case at hand, Bloggle promotes the digital copying, archiving, searching and public display of their works even among the general public themselves. Proof of this is that Bloggles conversion of PDF files allows users to copy and fully edit the resulting HTML versions, even if said files were purposely locked by the author for the specific purpose of preventing viewers from copying and editing any portion of the file. Furthermore, it is observed that there was no attempt on the part of Bloggle to develop filters 17 to diminish such contributory infringing activity which, at the very minimum, should prevent the editing and copying of the PDF files by third parties. Likewise, any profits 18 that accrue from viewer-generated usage due to Bloggles display of banner and text ads may further any defense of good faith for contributory infringement. Also, do you think Bloggles conversion of PDF files to HTML constitutes a transformative use under a fair use defense? Are there any other possible defenses? No, Bloggles conversion of PDF files to HTML does not constitute transformative use under a fair use defense. However this does not bar Bloggle from raising other defenses such as: (a) implied license; and (b) estoppel. As for the first issue, It is said that the development of the concept of fair use has been influenced by the tension between the direct aim of the copyright privilege to grant the owner the right from which he can reap financial benefit and the more fundamental purpose of the protection to promote the progress of science and the useful arts.19 In the recent American case Whelan v. Jaslow (1986), the purpose of the copyright law is to

Amador, 632 Encyclopaedia Britannica Educational Corp. vs. Crooks, 58 F. Supp. 1247 (1982); cited in Amador, 632 16 Subafilms Ltd. et al. vs. MGM-Pathe Communications So., et al., USCA for the 9 th Circuit (1994); cited in Amador, 632 17 Metro-Goldwyn-Mayer Studios Inc., et al. v. Grokster, Ltd., et al., 545 U.S. 913 (2005) 18 Id. 19 Amador, 422
15

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create the most efficient and productive balance between protection (incentive) and dissemination of information, to promote learning, culture and development.20 While the Intellectual Property Code does not provide a specific and over-arching definition of fair use, it does enumerate four integral factors to determine the presence of such in Subsection 185.1, namely: (a) the purpose and character of the use, including whether such use is of a commercial nature or is for non-profit education purposes; (b) the nature of the copyrighted work; (c) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (d) the effect of the use upon the potential market for or value of the copyrighted work. Likewise, the Code exempts certain acts from constituting copyright infringement if there is fair use of a copyrighted work for criticism, comment, news reporting, teaching including multiple copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright. The transformative value or characteristic which may be found in these new works cannot be overemphasized given its capacity to provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one. 21 Hence, the general rule is that if a new work adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message, then this constitutes as transformative use under a fair use defense.22 In the case at hand, Bloggles conversion of PDF files does not give the subsequent HTML version any transformative value given that such act was merely to digital copy the work for searching and public viewing. There is no addition of something new, to borrow the language of the Campbell case; instead, there was an actual diminution of the authors work, as evidenced by the resulting formatting differences from what was originally published by the author. Likewise, the main purpose of such conversion was for the archiving of the content in manner convenient for a users internet searching or browsing and not for any of the lawful purposes enumerated in Subsection 185.1 of the Code. Hence, given the transformed works complete absence of critical bearing on the substance or style of the original composition which may imply that that Bloggle merely wanted to get attention or to avoid the drudgery in working up something fresh, then whatever claim to fairness in borrowing from another's work diminishes accordingly (if it does not vanish), and other factors, like the extent of its commerciality, loom larger.23

20

797 F.2d 1222, 230 USPQ 481 (1986) Campbell vs. Acuff-Rose Music, Inc., supra. 22 Id. 23 Id.
21

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As for the second issue, Bloggle may then raise other appropriate defenses to escape copyright infringement, (a) implied license; and (b) estoppel. First, under the theory of implied license: a defendant may successfully assert that the activity is non-infringing due to the existence of a licensestatutory, negotiated or implied.24 The general theory of implied access is that the act of posting a web page on the Internet constitutes the granting of the implied license. Hence, Bloggle can assert that the mere posting of PDF files by the authors themselves while simultaneously failing to exhaust all options such as the use of metatags25 to prevent Bloggle from archiving leads to the conclusion that there was indeed implied permission. However, it is important to note that the use of such defense has yet to receive a favorable ruling when raised in Court over an issue involving Internet usage.26 Second and lastly, estoppel may be raised given that it is in accord with Section 230 of the Code which states: in all inter partes proceedings in the Office under this Act, the equitable principles of laches, estoppel and acquiescence where applicable, may be applied. An equitable estoppel claim, if successful, may protect Bloggle even in an otherwise meritorious infringement claim.27 Hence, Bloggle can assert that it had relied on the actions of the authors of the PDF files that is, when they chose not to exclude their works from search and archiving through the use of metatags and other available computer commands and such reliance on this behavior led Bloggle assume that consent was given to convert such files to a HTML format.

Field v. Google Inc., 412 F. Supp 2d. 1106 (2006) Metatags are HTML commands interpreted by a browser. Website ownerts can effectively prevent search engines from caching their site by using the no-archive metatag; likewise, they can the indexing of their content by using the no-index metatag or putting the User-agent:* Disallow: / command in the websites robots.txt file. See xxx 26 As seen in the judgment of Field vs. Google (supra.) where implied license was one of the primary defenses used. 27 Service & Training, Inc. vs. Data General Corp, USCA for the 4th Circuit (1992); cited in Amador, 750
25

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Question 3: 10% Attorney Gordon Bucks writes a book called "Valuation of Intellectual Property Assets." The book consists of a few introductory chapters explaining basic finance and intellectual property concepts, plus a number of chapters devoted to a new valuation methodology which Bucks has developed ("the Bucks method"). The chapters on the Bucks method include the following: A narrative explanation of the method A series of mathematical formulas used in the method Blank forms which provide space to enter all the factors and perform the calculations used in the method. Based upon the information provided here, which elements of the book do you believe are and are not protected by a copyright in the book? The narrative explanations found in the introductory chapters and the subsequent chapters on the Bucks Method are protected insofar as they are expressions of a system method. However, the included mathematical formulas and blank forms remain outside the ambit of copyright protection given that there is no expression beyond the bare embodiment of the valuation method itself. Hence, Attorney Bucks copyright extends only to his verbal description of the system used in the Bucks Method, and not to the system itself. Stated differently, while a system method showing how something is accomplished cannot be protected by copyright, the way in which it is expressed, however, can be, if it is sufficiently original. The withholding of copyright protection from ideas or concepts is enshrined in the landmark American case Baker vs. Selden (1880)28 involving a copyright owned by the defendant on a book that presented a method of doing accounting which included instructions on accounting as well as ledgers and forms with which to practice the art. While the lower courts found against plaintiff for distributing a copy of the accounting book, the Supreme Court held that copyright protection did not extend to the ledgers and forms depicted therein. This is in line with Sec. 175 of the Intellectual Property Code which states that: no protection shall extend, under this law, to any idea, procedure, system method or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work Likewise, under the TRIPS Agreement, copyright protection shall extend to expressions and not to, inter alia: ideas, procedures, methods of operation or mathematical concepts. (Article 9) This is a reflection of the belief that such ideas are relatively few and not worth the social costs of monopoly protection and, in any event, copyright incentives are not needed for their protection. 29

28 29

101 U.S. 99 (1880) Goldstein; cited in Amador, 245 0678142 12

Question 4: 10% Wendy Wealth writes a monthly investment newsletter, in which she includes a model investment portfolio ("the Wealth Fund"). The Wealth Fund consists of 10-12 recommended stocks, which can and do change from month to month. In each issue of the newsletter, Wendy includes the following information about the Wealth Fund: the names of the recommended stocks current price, 12-month high price, 12-month low price for each stock included in the portfolio analysis (narrative commentary) on each stock added to or dropped from the portfolio since the prior month's newsletter 3-month, 6-month, and 12-month performance (investment yield) for the Fund What elements, if any, of the Wealth Report as it appears in Wendy's newsletter, are covered by copyright? Justify your answer. What elements, if any, are NOT protected by copyright? Justify your answer, The following elements are eligible for copyright protection: (1) the narrative commentary and analysis of stocks insofar as they are in the form of original expressions, used to explain or convey facts; and (2) the selection of the names of the recommended stocks insofar as they feature an original selection or arrangement of facts, but the copyright is limited to the particular selection. On the issue of protected works, Section 172.1 of the Intellectual Property Code provides that: literary and artistic works are original intellectual creations in the literary and artistic domain protected from the moment of their creation. In a similar vein, Justice Sandra Day O'Conner, in Feist vs. Rural Telephone (1991)30 said "the writings which are to be protected are the fruits of intellectual labor." This means that, while Wendy Wealth cannot copyright the ideas, principles, facts or data used in her model investment portfolio, the original words with which it is expressed such as those used in her commentary or analysis will be protected. This rooted in the principle that originality remains the sine qua non of copyright; accordingly, copyright protection may extend only to those components of a work that are original to the author.31 Furthermore, the selection of the names of the recommended stocks may copyrightable given that these were chosen as a matter of discretion based on Ms. Wealths personal judgment or taste. Mid America Title Co. vs. Kirk (1995)32 reiterated the Feist court by ruling that a factual compilation is eligible for copyright if it features an original selection or arrangement, due to the employment of a minimal level of creativity. Nevertheless, the Court opined that in no event may should it be construed that the copyright extend to the facts themselves.
30 31

499 U.S. 340, supra. Id. 32 Mid America Title Co. vs. Kirk, 867 F.Supp. 673 (1995) 0678142 13

Conversely, the following elements are not eligible for copyright protection: (1) the underlying facts presented or used in the commentary and analysis of stocks, which include: a. current price, 12-month high price, 12-month low price for each stock included in the portfolio; and b. 3-month, 6-month, and 12-month performance (investment yield) for the Fund. This is in line with Sec. 175 of the Intellectual Property Code which provides that copyright protection does not extend to: news of the day and other miscellaneous facts having the character of mere items of press information The Unites States Copyright Act, on the other hand, does not specifically identify "facts" as being exempt from protection, but the U.S. Supreme Court in Feist clarifies that this provision is "universally" understood to exclude facts as well. In the same ruling, Court states that: no one may claim originality as to facts because facts do not owe their origin from acts of authorship.33 Hence, Ms. Wealths mere reiteration of stock prices and investment yields, which are factual in nature, lack that minimum spark of originality which arises from the independently created intellectual production, thought, and conception34 of the author.

33 34

Feist Publications, Inc. vs. Rural Telephone Service Co., Inc. (supra.) Id. 0678142 14

Question 5: 10% Tina owns and operates a software company, JENCO. Emmylee is a computer programmer for JENCO. Emmylee has been a good employee for JENCO, but Tina knows that Emmylee wants to own her own business someday. Emmylee has been working on an important new program for JENCO. At an office party to celebrate the completion of the new program, as a means of encouraging Emmylee to stay with the company, Tina verbally offers to "share the copyright" in the new program with Emmylee. Briefly discuss whether Emmylee owns an interest in the copyright as a result of Tina's statement. It is submitted that Emmylee does not own an interest in the copyright as a result of Tinas verbal offer. Based on the factual circumstances, the verbal offer to "share the copyright" in the computer program is insufficient to bestow upon Emmylee any proprietary or beneficial ownership interest. Based on the work-for-hire doctrine, Tina is considered the author who owns all the rights comprised in the copyright "unless the parties have expressly agreed otherwise in a written instrument signed by them.35 To further elaborate, while the general rule is that copyright ownership vests initially in the author or authors of a work, the exception can be found in Subsection 178.3 of the Intellectual Property Code which refers to works-for-hire. Under the work-for-hire doctrine, the copyright shall automatically be vested in the employer or the hirer of the author and not the author himself if the work is the result of the performance of the latters regularly-assigned duties.36 To avoid this automatic vesting of the copyright in the person for whom the work was prepared, Subsection 178.3 (b) provides that there must be an agreement, either express or implied, to the contrary. Hence, the law may allow coownership between an employer and employee as long as the requisite of an agreement, express or implied, is met. In the problem at hand, a situation of work-for-hire provides for an initial vesting of all rights of authorship in Tina and will not create a beneficial ownership interest in Emmylee as a creator given that there was no express or implied contractual provision to the contrary. But did Tinas verbal offer amount to a valid agreement sufficient enough to vests Emmylee with a proprietary interest in the program? The answer to that is: no, it did not. The language of the Code is clear there must be a written indication of such intention to transfer a copyright. (180.2) It bears emphasis that this places the authors written agreements, involving the parties that characterize the parties claimed interest in the work, under the Statute of Frauds. The chief purpose of such statutory provision requiring that such agreements must be in writing is to: (a) resolve disputes between

35 36

Warren vs. Fox Family Worldwide, Inc., 328 F.3d 1136 (2003) Amador, 354 0678142 15

copyright owners and transferees; and (b) to protect copyright holders from mistaken or fraudulent claims of oral copyright ownership.37 However, the problem at hand may be rectified if Tina subsequently ratifies or confirms the verbal offer through a written instrument of conveyance or memorandum of transfer. In Imperial Residential Design, Inc. vs. The Palms Development Group (1995), the American Court of Appeals adopted the reasoning that of those courts which have held that a copyright owners later execution of a writing which confirms an earlier oral agreement validates the transfer ab initio.38

37 38

Amador, 369 USCA, 11th Circuit (1995); cited in Amador, 370 0678142 16

PART TWO MULTIPLE CHOICE I . In order for a copy of something in the public domain to be copyrightable, the copy must: 5% A. Improve upon the original. B. Be a distinguishable variation from the original. C. Invoke in the mind of a reasonable observer something other than the original. D. Be in a completely different medium than the original. Explain your reason in no more than 5 sentences. B. Be a distinguishable variation from the original. Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity.39 Moreover, a work may be protected by copyright even though it is based on something already in the public domain, if the author, through his skill and effort, has contributed a substantially distinguishable variation from the older works.40 Hence, in the American case Norma Ribbon & Trimming vs. Little (1995),41 the Court of Appeals held that an infringement action must fail where it was factually undisputable that there was no such substantial variation between an older work and the ribbon flowers that the defendants sought to copyright.

39 40

Feist Publications, Inc. vs. Rural Telephone Service Co., Inc. (supra.) Amador, 30 41 Copr.L.Dec. P 27; 51 F.3d 45; 34 U.S.P.Q.2d 1603 (1995) 0678142 17

2. "Conceptual Separability" refers to the requirement that the following be separately identifiable: 5% A. The idea and the expression of that idea. B. The artistic features from the utilitarian aspects of an object. C. The contributions of joint authors to a joint work. D. None of the above. Explain your reason in no more than 5 sentences. B. The artistic features from the utilitarian aspects of an object. As gleaned from the ruling in Mazer vs. Stein (1954),42 the dichotomy between artistic design from industrial, mechanical or utilitarian elements as encompassed in the test of conceptual separability is an important determinant as to the extent by which copyright regulations provide protection for works of artistic craftsmanship. As held in Mazer, the American Supreme Court reiterated Subsection 202.8 of the Copyright Statute by ruling that the copyright of a statuette used as a lamp base is subject to copyright with respect to its form but not their mechanical or utilitarian aspects. In other words, the artistic concept induced in the eye of the beholder of an object must be separate from the concept evoked by said objects utilitarian functions. Likewise, in Goldsteins Copyright, Vol. 1, conceptual separability may be distilled into a single encompassing definition: a pictorial, graphical or sculptural feature incorporated in the design of a useful article is conceptually separable if it can stand on its own as a work of art traditionally conceived, and if the useful article in which it is embodied would be equally useful without it.43

42 43

Mazer vs. Stein, 347 U.S. 201 (1954) Cited in Amador, 125 0678142 18

3. When a radio station plays a record, it must pay a royalty to: 5% A. The copyright owner of the sound recording. B. The copyright owner of the song. C. The artist(s) who perform on the sound recording. D. All of the above. Explain your reason in no more than 5 sentences. D. All of the above. First, the copyright owner of the sound recording that is, the producer is entitled to a single equitable remuneration together with the artist(s) or performer(s) of a sound recording or a reproduction of such, if these are published for commercial purposes and is used directly for broadcasting or for other communication to the public, or is publicly performed with the intention of making and enhancing profit (Section 209) The Intellectual Property Code likewise bestows upon the artist or performer an an additional remuneration equivalent to at least five (5%) of the original compensation received for the first communication or broadcast, in every communication to the public or broadcast of a performance subsequent to the first communication or broadcast thereof by the broadcasting organization. (Section 206) And finally, composer of the song, as the author of the work, owns the copyright to said song and is conferred by law all the Copyright and Economic Rights provided by Section 177 of the Code, including the right to royalties.

0678142

19

4. Smith writes a novel in English and owns the copyright in the novel. Jones, without Smith's authorization, translates the novel into French. Can Jones copyright the translation? Yes or No. Explain your reason in no more than 5 sentences: 5% No. Under Subsection 173.1 of the Intellectual Property Code, a translation is deemed as a derivative work and shall also be protected by copyright. Likewise, Subsection 173.2 provides that such translations shall be protected as new works as long as it does not affect the force of any subsisting copyright upon the original works employed or any part thereof, or be construed to imply any right to such use of the original works, or to secure or extend copyright in such original works. However, these provisions are wholly inapplicable where there is a complete lack of consent and authorization on the part of the copyright owner. It should be noted that the Copyright and Economic Rights encompassed in Section 177 includes exclusive right to carry out, authorize or prevent the unauthorized use of a derivative work, or works based on another, preexisting work. Hence, while the aspects of the derivative work added by the derivative author are the latters property, the elements drawn from the preexisting work remains a grant from the owner of the preexisting work.44 Jones cannot, therefore, copyright the unauthorized translation.

44

Steward vs. Abend, 495 U.S. 207 (1990) 0678142 20

5. The duty of a joint owner in a copyrighted work to her co-owner is: 5% A. To notify her co-owner and obtain the co-owner's authorization before using the work or licensing any rights in it to a third party. B. To account to the co-owner for any profits earned through the use or licensing of the work. C. Not to destroy the work or cause it to deteriorate. D. All of the above. E. B and C only. Explain your reason in no more than 5 sentences. E. B and C only. According to the Intellectual Property Code on joint authorship, the co-owners shall be the original owners of the copyright and, in the absence of an agreement, their rights shall be governed by the rules on co-ownership, unless they agree on a different rule to govern their rights. (Subsection 178.2) There exists a duty on the part of a joint owner to refrain from destroying the work or cause it to deteriorate, as well as a duty to account to other co-owners for profits. These duties arise from equitable doctrines relating to unjust enrichment and general principles of co-ownership. Letter A is excluded because while there exists is a definite duty to notify and obtain a co-owner's authorization before granting licensing any rights in it to a third party (Subsection 180.3), no such duty is required for a co-owners mere use or personal enjoyment of a joint work. Hence, the rights of a joint owner, as per the language of the New Civil Code, is that each co-owner may use the thing owned in common on the condition that he does so in accordance with the purpose for which it was intended and in such a way as not to injure the interest of co-ownership or prevent the other co-owners from using it according to their rights. (Art. 486)

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6. In a work made for hire, initial ownership rights: 5% A. Vest in the employee, then pass to the employer via a "deemed transfer under employment." B. Vest in the employer. C. Are shared equally by the employee and employer. D. Can only be determined by looking at custom and practice in the industry. Explain your reason in no more than 5 sentences. B. Vest in the employer. While the general rule is that in the case of original literary and artistic works, copyright shall belong to the author of the work (Subsection 178.1), the exception can be found in Subsection 178.3 which refers to works-for-hire. This Section provides that copyright shall automatically be vested in the employer or the hirer of the author and not the author himself if the work is the result of the performance of the latters regularly-assigned duties. To avoid this automatic vesting of the copyright in the person for whom the work was prepared, there must be an agreement, either express or implied, to the contrary. As held in the American case Clifford Scott Aymes vs. Jonathan Bonelli (1992), the employer or hirer is: considered the author for purposes of [the Copyright Act], and unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all the rights comprised in the copyright.45

45

USCA, 2nd Circuit (1992); cited in Amador, 356 0678142 22

7. The intent requirement for the creation of a joint work can be met in a situation in which only one of the parties intends that the work be a joint work, so long as that party can show that he relied to his detriment upon this intention. True or False. False. Two hurdles must be cleared in order to establish a joint work firstly, there must be a showing that the contributions to the works must be independently copyrightable; secondly, there must be a showing of mutuality of intent among the parties to be joint authors at the time the work was created.46 To rule otherwise would create an unjust situation where a variety of collaborative ventures clearly not intended to confer the benefits of joint ownership would qualify as joint works, as literally applied. Hence, an integral requirement in any joint authorship inquiry, as held in the American case Childress vs. Taylor (1991), is that all of a joint works putative coauthors must intend to create joint work.47 [Emphasis mine.] As intent is a question of fact, the type of circumstantial evidence that the court recognizes as proof of the requisite intent to be joint authors are: (1) the relative degree of decision-making authority exercised by the putative coauthors; (2) the way in which parties bill or credit themselves in relation to the work; and (3) any written agreements involving the parties that characterize the parties claimed interest in the work. 48 Absent such proofs, the intent requirement is cannot be met, even if party can show that he relied to his detriment upon this intention that the work be a joint work.

46 47

Erickson vs. Trinity Theatre, Inc., USCA, 7th Circuit (1994); cited in Amador, 350 945 F.2d at 507 (1991); cited in Erickson vs. Trinity Theatre, Inc., USCA, 7th Circuit (supra.) 48 Thomson vs. Larson, 147 F.3d 195 (1998) 0678142 23

8. A written transfer of copyright ownership must be: 5% A. Signed by the owner (transferor). B. Signed by the transferee. C. Written and signed at the time of the transfer. D. All of the above. E. None of the above Explain your reason in no more than 5 sentences. A. Signed by the owner (transferor). Based on the language of the Intellectual Property Code, a copyright may be transferred in whole or in part (Subsection 180.1) and it is enough that there is a written indication of such intention to assign a copyright. (180.2) It bears emphasis that this places the authors agreement under the Statute of Frauds. The chief purpose of such statutory provision requiring that such assignments must be in writing is to: (a) resolve disputes between copyright owners and transferees; and (b) to protect copyright holders from mistaken or fraudulent claims.49 It is of note that Section 204 (a) of the U.S. Copyright Act explicitly provides that for a transfer of copyright ownership to be valid, it must be in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent. [Emphasis mine.]

49

Amador, 369 0678142 24

9. The reproduction right can only be infringed in cases where the distribution right is also infringed. True or False. : 5% Explain your reason in no more than 5 sentences. False. The rights to reproduce and distribute, while both forming part of the five exclusive rights attached to a copyrighted work, are two distinct and independent acts which: (a) cannot be performed by persons other than the copyright owner; or, (b) without the authorization of the copyright owner. To differentiate, reproduction right encompasses the prohibition of unauthorized copies of a protected work; while distribution right proscribes the unauthorized sale, lease lending or other transfer or copies of said work.50 Nevertheless, it should be noted that there are a number of statutory limits on the reproduction right and that any individual may reproduce a copyrighted work for a fair use since not all reproductions of the work are not within the exclusive domain of a copyright owner.51

50 51

Amador, 639 Sony Corp. of America v. Universal Studios, Inc., 464 U.S. 417 (1984) 0678142 25

10. The primary rights associated with "moral rights" are: 5% A. Decency and Propriety. B. Attribution and Integrity C. Compensation and Adaptation D. Paternity and Adaptation Explain your reason in no more than 5 sentences. B. Attribution and Integrity. While the rubric of moral encompasses many varieties of rights, the two rights that are protected in nearly every jurisdiction recognizing their existence are attribution and integrity.52 In fact, the Intellectual Property Code recognizes these primary rights in Section 193 and likewise enumerates the scope of moral rights in the following manner: (1) Attribution: (a) to require that the authorship of the works be attributed to him, in particular, the right that his name, as far as practicable, be indicated in a prominent way on the copies, and in connection with the public use of his work. (Subsection 193.1) (2) Integrity: (a) to make any alterations of his work prior to, or to withhold it from publication (Subsection 193.2); (b) to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, his work which would be prejudicial to his honor or reputation (Subsection 193.3); and (c) to restrain the use of his name with respect to any work not of his own creation or in a distorted version of his work. (Subsection 193.4) The rationale behind this is because moral right, which the Code deems independent and distinct from economic rights, springs from the belief that an artist in the process of creation injects his spirit into the work and that the artists personality, as well as the integrity of the work should therefore be protected.53

52 53

Amador, 569 Id. 0678142 26