Category Archives: Copyright

Recent Fair Use Decision on Open-Records Laws and Copyright Protection

The Minnesota Court of Appeals recently added a decision to the small but growing body of law surrounding state open-records laws and copyright protection.

The case is National Council on Teacher Quality v. Minnesota State Colleges & Universities. Here’s the background. National Council on Teacher Quality sent a request under the Minnesota Government Data Practices Act—Minnesota’s open-records act—for copies of course syllabi maintained by the Minnesota State Colleges and Universities, known as MnSCU (and pronounced min-skew). MnSCU responded, saying (1) its faculty members’ intellectual-property rights might be violated by the National Counsel’s later use of those materials, and (2) MnSCU might be subject to liability under the copyright act. MnSCU

National Counsel sued and won. The district court concluded that National Counsel’s proposed use was fair use under the copyright act. Because the proposed use was fair use, the copyright act was no defense to MnSCU’s failure to disclose the syllabi.

MnSCU appealed and lost. MnSCU based its appellate argument primarily on its concern that copying the syllabi might expose MnSCU to copyright liability when National Counsel engages in conduct that does not constitute fair use. The court did not consider whether MnSCU’s copying of the documents itself violates the Copyright Act. The court of appeals held that once fair use is established, Minnesota’s open-records law does not allow an agency to withhold information based on a theoretical, future violation of the Copyright Act.

One amicus brief raised an interesting argument, claiming that even allowing National Counsel to view the syllabi—without copying—would  violate the Copyright Act. The amicus reasoned that the viewing would constitute a “public display” of the authors works and would therefore   violate of the owners’ rights under the Copyright Act. The court noted neither the statute nor cases supported argument that allowing a single party to view a copyrighted work might be a “public display” that would require the copyright holder’s permission.

The court’s case holding is as follows:

A state agency cannot rely on the Federal Copyright Act to refuse to disclose data that is the subject of a request for disclosure under the Minnesota Government Data Practices Act after the district court determines, without dispute, that the requestor intends only “fair use” of the data as defined by the copyright act.

The time to seek review from the Minnesota Supreme Court has not yet run, so this case may not yet be over. Stay tuned.

Fair Use Ruling For Patent-Prosecution Firm’s Article Copying

Magistrate Judge Jeffrey Keyes recently issued a Report and Recommendation granting summary judgment of fair use in a case that involves a copyright infringement claim against a patent-prosecution firm. In the process of prosecuting patents for its clients, the firm copied several of the publishers’ copyrighted scientific journal articles from a USPTO database and other sources, and publishers sued for copyright infringement.

U.S. Magistrate Judge Keyes ruled that the firm’s copying constitutes fair use. This is the result urged by the USPTO, which intervened in the case. The court weighed each of the four fair-use factors, of § 107, (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. As to the first factor, the court concluded that the firm did not use the articles for the same purpose as the publishers. Regarding the second factor, the court reasoned that because the articles were primarily technical rather than creative, they were farther from the “core” of copyright protection. The third factor was the most interesting: even though the firm copied the entirety of each article, the court concluded that this factor still favored a finding of fair use because the copying was consistent with the purpose and character of the firm’s new and different use. As to the fourth factor, the court reasoned that publishers failed to show that the firm’s use of the articles to meet their PTO-disclosure obligations affected the traditional target market for the articles.

The meat of the court’s policy consideration is as follows:

Finally, Schwegman’s copying of the Articles and its use of those copies for the purpose of supporting its clients’ patent applications also “promote[d] the Progress of Science and useful Arts,” U.S. Const., art. I, § 8, cl. 8, which is the very purpose of the Copyright Act. Uses of copyrighted work that fulfill that purpose include “criticism, comment, news reporting, teaching . . ., scholarship, or research.” 17 U.S.C. § 107. Though they borrow from a copyrighted work, criticism, comment, news reporting, teaching, scholarship, and research all have the potential, under certain circumstances, to benefit the public by furthering the understanding of ideas or discoveries highlighted in a copyrighted work. And like each of these listed uses, Schwegman’s use of the Articles in connection with its clients’ patent applications confers a public benefit as well.

This is a case to watch. Because this ruling is a Report and Recommendation, the publishers have the right to seek review of it by filing an objection with the District Court judge. If the ruling stands, the legal community—not just patent-prosecution firms—will be the among the primary beneficiaries. Lawyers of all stripes have ethical duties that require them to duplicate documents that may be subject to copyright. This ruling provides some relief that these practices will not be necessarily be infringement.

Open-Records Laws and Copyright Protection for State and Municipal Data

This past term the Supreme Court decided McBurney v. Young, a case involving a constitutional challenge to the citizen-only restriction of Virginia’s Freedom of Information Act (FOIA). Virginia law allowed citizens of Virginia to inspect and copy all state public records, but the act did not grant non-citizens the same right. The Court had little trouble unanimously ruling that neither the Privileges and Immunities Clause nor the dormant Commerce Clause barred the citizen-only restriction.

Although McBurney involved the copying of government data, it did not discuss the effects of copyright law on that copying. Copyright law governs reproduction. 17 U.S.C. § 106. State open-records laws, like Virginia’s FOIA, govern access to information—i.e, public availability. Open-records laws involve concerns regarding both access and copying, because state and municipal databases may contain information that is in the public domain and information protected by copyright. Public-domain information is information that is not covered by intellectual property rights (e.g., copyright). Black’s Law Dictionary 1265 (8th ed. 2004) (“When copyright, trademark, patent, or trade-secret rights are lost or expire, the intellectual property they had protected because part of the public domain and can be appropriated by anyone….”).

It is a common misconception that if government data is publicly available then it cannot be copyrighted. Case law, however, confirms the distinction between public-domain information and publicly available information with respect to open-records laws and copyright. In County of Suffolk v. First Am. Real Estate, 261 F.3d 179, 188-90 (2nd Cir. 2001), the appellate court analyzed the interplay between copyright ownership of municipal maps and open-records laws. The court held that open-records laws do not abrogate a copyright holder’s ownership of the publicly available information.  Id. at 190; accord Weisberg v. U.S. Dept. of Justice, 631 F.2d 824, 825, 828-30 (D.C. Cir. 1980) (records do not lose copyright protection simply because they become publicly available). Some courts hold that the Copyright Act “is not restricted to private parties and there is no reason to believe that such a restriction should be upheld. In fact, the opposite inference is required when only one specific governmental entity, the United States of America, is excluded from the protection of the Act.” E.g., Nat’l Conference of Bar Examiners v. Multistate Legal Studies, Inc., 495 F. Supp. 34, 35 (N.D. Ill. 1980), aff’d, 692 F.2d 478 (7th Cir. 1982).

Copyright Week 2013

Last week saw a string of interesting or important IP developments. One commenter called it “Shark Week for copyright lawyers.” (h/t Booth Sweet LLP)

Kirtsaeng v. John Wiley & Sons, Inc.—The U.S. Supreme Court held that the “first sale” doctrine applies to copyrighted works lawfully made abroad. So, Kirtsaeng’s textbook-arbitrage practice (having textbooks purchased abroad cheaply so that he could sell them in the U.S.) is lawful. SCOTUSBlog has good coverage here.

The ISOHunt case, Columbia Pictures Industries v. FungThe Ninth Circuit affirmed a summary judgment ruling holding that under Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd., 545 U.S. 913 (2005), the defendants were liable for inducing copyright infringement through BitTorrent. ISOHunt’s actions didn’t fall under any of the safe harbor provisions of the DMCA. Importantly though, the panel refused to hold that inducement liability is inherently incompatible with protection under the safe harbors. “[W]e are not clairvoyant enough to be sure that there are no instances in which a defendant otherwise liable for contributory copyright infringement could meet the prerequisites for one or more of the DMCA safe harbors.” Bloomberg has a write-up here.

Speaking of BitTorrent, the Prenda copyright cases and the fraud-on-the-court investigation continues. American Lawyer has an overview here. The Prenda firm has been involved in a series of high-profile copyright-infringement suits against alleged BitTorrent downloaders of pornographic works; ArsTechnica reports that Judge Otis Wright in the Central District of California has scheduled a hearing for April 2 to determine “why they should not be sanctioned for defrauding the Court.”  The Star Tribune explains the Minnesota connection to these lawsuits here. Ken at Popehat has in-detail coverage here. [Full disclosure: I previously represented a defendant in one of these cases.]

Maria A. Pallante the Register of Copyrights testified before Congress regarding the need for revisions to the copyright act in light of technological developments. The Register said that “if one needs an army of lawyers to understand the basic precepts of the law, then it is time for a new law.” She identified a non-exclusive list of issues:

clarifying the scope of exclusive rights, revising exceptions and limitations for libraries and archives, addressing orphan works, accommodating persons who have print disabilities, providing guidance to educational institutions, exempting incidental copies in appropriate instances, updating enforcement provisions, providing guidance on statutory damages, reviewing the efficacy of the DMCA, assisting with small copyright claims, reforming the music marketplace, updating the framework for cable and satellite transmissions, encouraging new licensing regimes, and improving the systems of copyright registration and recordation.

In other news the Associated Press won its suit against news-aggregator Meltwater. AP v. Meltwater. Judge Cote in S.D.N.Y. rejected Meltwater’s fair-use defense to AP’s allegations. Meltwater has vowed to appeal.

IP is SO Exhausting!

An important, and often overlooked, question involving intellectual property rights is, “When are the rights of IP owners exhausted?”  When you buy a book, movie, computer, or software at what point does the IP owner lose the ability to control what you can do with it?  The Supreme Court has taken two important cases this term that may help answer this question.

Whether you are acquiring intellectual property rights, or are a provider of goods and services covered by intellectual property rights, you need to understand exhaustion issues if you want to control and recognize your rights.  In other words, you may not have the rights you think you have, and you may not be able to use your property the way you think you can.

The law of exhaustion is well developed for both patents and copyrights, but the expanding scope of the type of things subject to IP protection and the global nature of our economy challenge existing law.  The law is a mixture of statute and common law, the general goal of which is to limit the ability of intellectual property rights holders from exacting tribute over and over again as goods and services are sold and resold.

The first case before the Court, Bowman v. Monsanto, is a patent case dealing with the question of exhaustion in the context of self replicating plants.  Monsanto owns patents covering its genetically engineered agricultural seeds.  The seeds are modified to include genes that make the plants immune to a Monsanto herbicide (Roundup), allowing broadcast application of the herbicide, which kills everything except plants grown from the patented seeds (although it has been reported that some weeds have now developed natural immunity).  Very clever idea, but the problem is that soybeans are self-fertilizing plants and each generation is genetically identical to the parent and is therefore immune allowing farmers to hold back seed to plant the next year (instead of buying new seed).

Monsanto, like the rest of the industry, solved this problem by providing the seed in accord with very particular restrictions – so called “bag licenses,” which license the seed to farmers to use only to grow plants which can then be harvested and sold as a commodity.  The farmers are forbidden under the license from holding back any harvested seed to grow a second generation of plants.  They must buy new seeds each growing season.  This scheme allows Monsanto to avoid hitting the exhaustion question head on with its direct customers.  Since the seeds are “licensed” not sold, Monsanto maintains control over the use and can enforce the license restriction.  Without the license the right to prevent planting second generation seeds might have been exhausted when the original seeds were purchased.

Bowman, however, did not buy the seeds from Monsanto, but instead bought the seeds on the commodity market from local grain elevators and so had not signed a bag license.  Bowman believed he was free to plant the seed, and then plant the seed from the seed, without restrictions.

Monsanto, of course, took the opposite view.  Monsanto contends it does not matter whether Bowman was under a bag license, because each generation of seed is effectively a new patented invention, and its use without permission is an infringement.  That has been the position the courts have taken as this case made its way up to the Supreme Court.  Presumably, the Court has something interesting to say on the issue because this is the second time they have taken a case like this.  A few years ago the Court took up the same issue but did not reach a decision because one of the justices recused herself.  This case has huge implications for the bio-tech industry as many technologies have the potential to self-replicate, and/or attempt to control use in a manner similar to the techniques used in the agricultural seed field. Read the rest of this entry

Can Schools Seize Ownership of Students’ Copyrights?

The Washington Post reports that Prince George’s County Board of Education has proposed asserting ownership over student copyrights. The draft policy states:

Works created by employees and/or students specifically for use by the Prince George’s County Public Schools or a specific school or department within PGCPS, are properties of the Board of Education even if created on the employee’s or student’s time and with use of their materials.

Further, works created during school/work hours, with the use of school system materials, and within the scope of an employee’s position or student’s classroom work assignment(s) are the properties of the Board of Education.

Examples of works which the Board hereby takes ownership are:

1. PGCPS Website

2. Individual School Website

3. Curriculum documents

4. Instructional materials for use in PGCPS or a specific school

5. Software and platforms developed for use by PGCPS, a specific school and/or the Board

6. Other works created for classroom use and instruction

The issue of Board ownership over its employees’ copyrightable works is well-settled. Board ownership over student-created work is less settled. bookshelves-with-books-in-library_w482_h725

The Board is a governmental actor, and therefore subject to the Constitution. In a draft outline, co-blogger Professor Cotter explains that the Fifth Amendment’s Takings Clause probably entitles a property owner to “just compensation” when their property—including intellectual property—is appropriated by the government. The Board’s proposal contemplates an condemnation-like power: “…the Board…hereby takes ownership.” Even if the Board has eminent domain or condemnation power under state or local law, its policy may still be ineffective at transferring ownership from student creators to the Board.

Federal law trumps conflicting state and local law. And 17 U.S.C. § 204 sharply limits how copyright ownership may be transferred:

A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.

Some courts and commentators view the phrase “by operation of law” as referring to transfers of copyrights that are limited in number, and depend upon the owner’s express or implied consent. See Taylor Corp. v. Four Seasons Greetings, LLC, 403 F.3d 958, 963 (8th Cir. 2005).

It is unclear from the Board’s draft policy whether they expect students to consent to the Board’s assertions of ownership, or whether the Board is considering a policy to provide “just compensation” to students whose copyrights are taken by the Board.

The Suicide of Aaron Swartz: An Appropriate Platform For CFAA Reform?

The January 11, 2013 suicide of internet activist Aaron Swartz has sparked a debate about the proper scope and application of the criminal provisions of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq.

Two days after his death, The New York Times reported that Aaron’s “family said in part: ‘Aaron’s death is not simply a personal tragedy. It is the product of a criminal justice system rife with intimidation and prosecutorial overreach. Decisions made by officials in the Massachusetts U.S. attorney’s office and at M.I.T. contributed to his death.’”  Similarly, The Rolling Stone reported  on January 23 that “Swartz’s friends and family have said they believe he was driven to his death by a justice system that hounded him needlessly over an alleged crime with no real victims,” and “Swartz’s tragic death has already begun forcing lawmakers to start rethinking our draconian computer laws. And House Oversight Committee Chairman Darrell Issa (R-California) even promised an investigation of the Justice Department prosecutors who did their best to send a young Internet pioneer to prison.”

Yet, George Washington University Law School’s Professor Orin S. Kerr of The Volokh Conspiracy has committed to writing a two-part post as an apology for the prosecution of Aaron.  Part 1 of Professor Kerr’s post summarizes the criminal charges against Aaron, describes the alleged criminal conduct and explains that:  “Aaron Swartz decided to ‘liberate’ the entire JSTOR database[, much of which is copyrighted, according to the indictment.] He wanted everyone to have access to all of the journals in the database, so he came up with a plan to gain access to the database and copy it so he could make it publicly available to everyone via filesharing networks.”  Professor Kerr tentatively concludes: “I think the charges against Swartz were based on a fair reading of the law. None of the charges involved aggressive readings of the law or any apparent prosecutorial overreach. All of the charges were based on established caselaw. Indeed, once the decision to charge the case had been made, the charges brought here were pretty much what any good federal prosecutor would have charged.”

Stanford Law School’s Professor Jennifer Granick disagrees, and she chastises Professor Kerr for lumping Aaron’s alleged conduct of “circumventing code-based restrictions” in with the crime of ”using someone else’s password, which is the quintessential access without authorization” proscribed by the CFAA because, as Professor Granick explained, “[u]sing another person’s password gets you access to their files.  Circumventing the JSTOR/MIT efforts to block him merely got Aaron _fast_ access to files he was already authorized to download.”  Professor Granick, like Professor Kerr, has written a two-part blog post, entitled Towards Learning from Losing Aaron Swartz.

The outcry surrounding Aaron’s suicide is understandable.  As JSTOR recognizes: “He was a truly gifted person who made important contributions to the development of the internet and the web from which we all benefit.”  Yet a reform of the CFAA should be based on desired, rational outcomes, not a grief reaction to the tragic loss of Aaron Swartz.

Accordingly, any proposal for immediate reform should be received with equally immediate skepticism.  To illustrate, Forbes has reported that “an ‘Aaron’s Law’ that’s already been proposed to make those reforms may need serious tweaking if it’s going to prevent the next overzealous hacker crackdown.”  More specifically, Forbes quotes Tor Ekeland, the attorney for convicted hacker Andrew Auernheimer (a/k/a Weev), who recognizes that “[t]he [CFAA] is a prosecutor’s wet dream and a defendant’s nightmare,” “[a]mending the definition of unauthorized access to exclude [terms of service] violations is just putting a band aid on a gaping, gushing wound.”

Professor Granick proposes that we learn from losing Aaron.  I agree. But the lessons from the loss of such genius should be infinitely more thoughtful and intricate than some myopic fix of the CFAA.

Fifth Circuit Addresses Waived Arguments To Avoid the Appearance of a Circuit Split In Legal Standard for Implied Licenses & Works For Hire

Baisden v. I’m Ready Productions Inc., 5th Cir., No. 11-20290, involved copyright and contract claims between the author of Men Cry in the Dark the book, and the author of Men Cry in the Dark, the stageplay.

The book author, Baisden, and screenplay writers entered into a contract for revenue sharing and IP ownership.  After a few years, the production company distributed a DVD of the play in a time and format that didn’t sit well with the book author. Because Baisden contended the contract had already terminated,  he sued the production company for copyright infringement. Baisden lost at trial and appealed.

A key issue on appeal was whether the production company had acquired an oral implied license from Baisden after the termination of the contract. The Fifth Circuit concluded that Baisden’s post-termination cooperation with the screenplay writers was sufficient to support an implied license.

Baisden argued that the Fifth Circuit’s test for an implied license diverged from other circuits’ requirements.  Despite finding Baisden had waived such arguments by raising them in an untimely fashion, the court went out of its way to “clarify” that there was no circuit split:

Baisden resists this conclusion [existence of an implied license] on a number of grounds. Of these, the majority are raised in his reply brief. “It is well-settled that, generally, we will not consider issues raised for the first time in a reply brief.” United States v. Jackson, 50 F.3d 1335, 1340 n.7 (5th Cir. 1995). Although we find the majority of Baisden’s arguments on implied nonexclusive license waived, we address them to clarify and reaffirm our holding in Lulirama.

….

Contrary to this holding, Baisden argues that an  implied license can only arise in the context of a work-for-hire agreement. He argues that the relevant test in Lulirama requires that “(1) a person (the licensee) request[ ] the creation of a work, (2) the creator (the licensor) make[ ] the particular work and deliver[ ] it to the licensee who requested it, and (3) the licensor intend[ ] that the licensee requestor copy and distribute the work.” Id. But Baisden ignores that those elements were prefaced by our remark that “[o]ther circuits have held that an implied nonexclusive license arises” when these three elements are met. Id. (emphasis added). To be sure, we applied those three elements in Lulirama.

But we have never held that an implied license could not arise in other circumstances where the totality of the parties’ conduct supported such an outcome. Id.; see also Food Consulting Grp., Inc. v. Azzalino, 270 F.3d 821, 826 n.9 (9th Cir. 2001) (correctly stating test in Fifth Circuit). Other decisions support this conclusion. See Carson, 344 F.3d at 451-53 (considering whether nonexclusive license was created despite defendant not having asked plaintiff to create a product); see also Falcon Enters., Inc. v. Publishers Serv., Inc., 438 F. App’x 579, 581 (9th Cir. 2011) (unpublished opinion) (affirming district court’s finding of a nonexclusive license while acknowledging that licensee had not asked copyright owner to produce copyrighted material); John G. Danielson, Inc. v. Winchester-Conant Props., Inc., 322 F.3d 26, 41 (1st Cir. 2003) (considering nonexclusive license defense where third party, not defendant, requested production of copyrighted work).

The broad, totality-of-the-circumstances-type test for the creation of an implied license has implications beyond copyright. Implied licenses also arise in the patent context, for example, and the scope of these licenses may be measured against prior, written licenses, like in Baisden. See Zenith Electronics v. PDI Communication Systems, 522 F.3d 1348 (2008). Baisden thus holds that the existence of an implied license turns on the specific circumstances of the parties’ relationship.

Second Circuit rules that a TV-streaming company does not qualify as a “cable system” under the Copyright Act

Yesterday in WPIX v. ivi, the Second Circuit affirmed a preliminary injunction against ivi, Inc. and its CEO, prohibiting them from re-transmitting copyrighted cable TV programs.

ivi itself began the litigation. After receiving cease-and-desist letters, ivi filed suit in federal court in the Western District of Washington seeking declaratory relief. A week later, WPIX filed suit in New York; the Washington action was dismissed. ivi, Inc. v. Fisher Commc’ns, Inc., No. C10-1512JLR, 2011 WL 197419 (W.D. Wash. Jan. 19, 2011).

ivi’s defense relied almost entirely on § 111 of the Copyright Act. That section is an exception to the traditional rule that a copyright owner has exclusive broadcast rights. Section 111 permits a “cable system” to publicly transmit signals of copyrighted television programming to its subscribers, provided they pay royalties at government-regulated rates and abide by the statute’s procedures. ivi lost at the district court—which issued the injunction—and appealed. Read the rest of this entry

American Institute of Physics and John Wiley & Sons v. Schwegman Ludberg – First Battle Won by Copyright Owners

with co-author Kimberly Overholser, Student, St. Thomas Law School

In a copyright infringement case of significant importance, the first battle has been won by  publishers American Institute of Physics and John Wiley & Sons, Inc.  In February, the American Institute of Physics and John Wiley & Sons, Inc. filed suit against two law firms, including Minnesota patent prosecution firm Schwegman Lundberg & Woessner,  alleging copyright infringement. The publishers claim that the law firms infringed their copyrights by improperly copying journal articles for submission to the United States Patent and Trademark Office (USPTO) and for their own internal use.

The patent application process requires applicants to disclose prior art through information disclosure statements, inevitably leading to submission of journal articles.  Accordingly, the case has significant relevance to the patent bar.  Earlier this year the USPTO’s General Counsel released a memo stating the USPTO’s position that submission of copies of copyrighted materials to the USPTO as part of the patent application process is fair use under 17 U.S.C. 107.  Requiring a license from each journal would substantially hinder the patent process.  Although the office took no position on whether additional copies (i.e. for the law firm’s future reference) qualify as fair use. Plaintiff’s attorney Bill Dunnegan was quoted saying “The crux of what our case deals with is the internal copying by the law firms after they have one copy in their hand.”

The case has potential impact on the legal community as a whole, not just the patent bar.  If copying a journal article for submission to the USPTO constitutes infringement, wouldn’t copying the same article for submission to the court in support of a summary judgment constitute infringement?

Schwegman moved to dismiss the case, arguing that Plaintiffs had not sufficiently pleaded their claims. To avoid dismissal, a complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007). Predicating their motion on Twombly and Iqbal, Schwegman argued that the publishers had not pleaded sufficient facts to establish either element of copyright infringement: (1) ownership of a valid copyright and (2) copying of original elements of the copyrighted work.  The motion was denied.  The Court stated, “a plaintiff does not need to expressly plead facts to support the elements of a claim in the complaint, rather a plaintiff may rely upon plausible inferences from the well-pleaded facts to state a claim for relief.”

The publishers satisfied their pleading obligations by simply pleading ownership of the copyright, providing registration certificates for the journals, and by alleging Schwegman copied their protected works pursuant to Federal Rule of Civil Procedure 8(a)(2).

This is merely a warm-up for the real battle which lies ahead concerning the scope of the fair use defense.  The case continues under several watchful eyes.

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