Articles Posted in Copyright Litigation

UPDATE: Court Denies Mgame’s Second Attempt For Temporary Restraining Order.

Mgame licensed K2 Network in 2003 to operate and distribute the “Knight Online 3D” multiplayer, role-playing game in return for payment of royalties. Mgame claims that it terminated the written license on February 23, 2012 due to K2’s failure to pay royalties. Despite the termination, K2 is allegedly continuing to operate and distribute the game without payment of royalties. Also, K2 is accused of illegally accessing Mgame’s secured servers without authorization and illegally copying user and billing databases and has refused to return Mgame’s servers. “K2, in short, has hijacked the Game to Mgame’s detriment and has continued to operate and distribute it using Mgame’s own computer hardware, software, and Game-related intellectual-property.”

Although the parties’ licensing agreement provides for Arbitration, Mgame sued K2 in Federal Court for a more expedited ruling since “it could easily take 60 days after Mgame files its Notice of Arbitration, and possibly much longer, before the arbitral tribunal is fully constituted and capable of entertaining a request for interim measures.” That delay, Mgame contends, will cause and is currently causing irreparable harm. Thus, Mgame asks the Court to issue a temporary restraining order and a preliminary injunction prohibiting K2’s conduct.

Artist David Flores is being sued for copyright infringement for using photographer Glen Friedman’s pictures of the Beastie Boys to make derivative artistic works, some of the photographs and accused infringing works are reproduced to the right. Friedman also alleges copyright ownership in a photograph of famous skateboarder, Jay Adams, which copyright was infringed by Flores’ derivative artistic work. Friedman contends that defendants engaged in widespread distribution of unauthorized copies of his copyrighted works. In addition to monetary damages, Friedman seeks his attorneys’ fees.

The current images remind me of Shepard Fairey’s “Obama Hope” posters, where Fairey was countersued for copyright infringement by the Associated Press for using one of its photographs to make his derivative work. After Fairey admitted to destroying evidence and was untruthful regarding which photo he used, Fairey settled the case for an undisclosed sum and his agreement to refrain from using AP photo’s without a prior license. Two weeks ago, in the criminal case against Fairey, he plead guilty for disobeying a judge’s order to not destroy evidence and lying to the court. He is to be sentenced on July 16, 2012.

On the other hand, the clothing company, One 3 Two, Inc., that used Fairey’s work on T-shirts and its website continued the litigation with AP claiming that its use of Fairey’s work did not infringe and was protected under the fair use defense. In a relatively short order, U.S. District Judge Alvin K. Hellerstein, denied One 3 Two’s fair use defense: “I hold, however, that should the AP establish copyright infringement, One 3 Two does not have a basis to rebut the finding on the ground of fair use. I therefore grant [AP’s] motion insofar as it seeks to pare the fair-use dense away from the case, but otherwise deny it.” The AP was also seeking a finding of copyright infringement and a violation of the DMCA, which were not decided on summary judgment and must now proceed to trial.

KTS Karaoke is suing Sony/ATV Music Publishing for declaratory relief of copyright non-infringement and/or reduction of the damages amount at issue, which Sony claims is almost $1.3 billion. The music publishing company is co-owned by The Michael Jackson Family Trust (in 1985 Michael bought ATV publishing company that included the Beatles’ catalog for $47.5 million, causing a rift with Paul McCartney) and Sony and owns a vast library of music copyrights. KTS claims to be the largest distributor of karaoke hardware and software in the country.

Sony/ATV sent correspondence to KTS claiming at least 6715 acts of copyright infringement by virtue of selling karaoke discs that contained allegedly unlicensed recordings of music copyrights, resulting in statutory damages of at least $1,282,050,000.00. KTS argues that Sony/ATV has known of the manufacture and distribution of the karaoke CDs for more than the applicable three year statute of limitations and has not taken reasonable steps to stop the manufacture of the infringing products at the source. Instead, KTS alleges, Sony/ATV has engaged “in copyright misuse by seeking to secure multiple license fees from the same allegedly infringing work by suing each link of the distribution chain, by demanding license fees for licensed goods and by attempting to obtain more than one statutory damage award for the continuing infringement (i.e., downstream distributions of the infringing work) of a SINGLE WORK.”

If the court finds that KTS has infringed the copyrighted works, KTS asks the court to then determine the proper amount of damages in dispute: KTS alleges that “Sony/ATV claims that it is entitled to multiple awards of statutory damages for the same song appearing on different products while KTS believes that Sony/ATV is limited to one award per work, no matter how many different products are at issue as to a given work.” In addition, KTS contends that Sony/ATV is not entitled to any damages for many of the discs at issue because Sony/ATV has already recovered damages for the distribution of the subject discs from others in the distribution chain. KTS will presumably rely on the Ninth Circuit’s holding that “when statutory damages are assessed against one defendant or a group of defendants held to be jointly and severally liable, each work infringed may form the basis of only one award, regardless of the number of separate infringements of that work.” Columbia Pictures Television v. Krypton Broad. of Birmingham, Inc., 106 F.3d 284, 294 (9th Cir. 1997), rev’d on other grounds, Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998)).

Glacern Machine Tools, LLC is suing its former employee, who was also an owner and manager of the company, for copyright infringement, conversion, and breach of fiduciary duty. Glacern alleges that defendant Eric Sun wrote and created copyrighted source code, within the scope of his employment and on a work-for-hire basis, for a first property management software program and a second, derivative work that incorporates elements of the original source code. Sun allegedly used Glacern’s equipment at the direction of Glacern to create the software programs, which are owned by Glacern under the operating agreement.

Glacern contends that Sun removed two computers from its headquarters, copied the software programs, and changed the administrative passwords. In addition, Sun allegedly contacted Glacern’s customer and demanded that monthly payments now be paid to him instead. Thus, Glacern sought a temporary restraining order from the Court preventing Sun from: “(1) destroying Plaintiff’s Software Products; (2) withholding from Plaintiff personal property which Plaintiff owns, including the Software Products; and (3) transferring “any such asset, real or intangible.” In addition, Glacer sought to compel Sun to: “(1) within five (5) days, give Plaintiff a complete list of all locations of the Software Products; and (2) allow Plaintiff unlimited remote access to an IP address, which Plaintiffs believe houses the Software Products.”

The Court noted that in order to be granted equitable relief, Plaintiff must show irreparable injury and the inadequacy of legal remedies. Also, “[t]he proper legal standard for preliminary injunctive relief requires a party to demonstrate ‘that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.'”