Category Archives: IP Contracts

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.

Retailers Beware: “Browsewrap” Agreements Threaten Enforcement of Website Terms of Use (Or, Back to Contract Basics)

As Black Friday and Cyber Monday approach, a word of caution for online retailers: your website’s terms of use may be a “browsewrap” agreement, which could jeopardize its enforceability.  By now, most attorneys are familiar with the legal issues surrounding “clickwrap” agreements, which require users of software, websites, and the like to expressly assent to an agreement’s terms by clicking a button (often “I Accept” or “Agree”).  “Browsewrap” agreements go one step further, and require no affirmative action on the part of the user whatsoever.  These types of agreements came under fire recently in the District of Nevada, where a court refused to compel arbitration of a dispute between Zappos.com, Inc. (“Zappos”) and its customers.  In In re Zappos.com, Inc., Customer Security Breach Litigation, 3:12-cv-00325 (D. Nev. Sept. 27, 2012), several customers sued Zappos after hackers successfully accessed certain information the customers provided when purchasing goods on two Zappos-owned websites.  Zappos then moved to compel arbitration pursuant to its terms of use policy.  The court denied this motion despite the broad federal policy favoring arbitration as a venue for dispute resolution.

In striking down the terms of use agreements, the court noted that even the most basic of contract formation principles – acceptance – was not met.  The websites failed to effectively notify users that the agreements existed, and the agreements required no action on the part of the user to agree to be bound.  Without a manifestation of intent, the court reasoned, there could be no acceptance of their terms, and therefore no valid contract existed.  In addition to finding the agreement lacked acceptance, the court also found it was illusory.  By its terms, Zappos.com could change the terms and conditions at any time.  Not surprisingly, the customer could not.   Reserving such a unilateral, unrestricted right once again rendered the contracts unenforceable.

The court’s decision is simple enough, but it has broad implications for retailers and customers alike.  Given the proliferation of online shopping, retailers would be wise to consult with legal counsel when drafting terms of use agreements for their sites.  In addition, customers should not let the promise of clothing, digital cameras, and high-definition televisions blind them to any terms and conditions that would be disadvantageous should a legal issue arise.

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.

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