A Legal Blog by Aaron | Sanders, PLLC


It Happens Even to Fancy Companies: Downstream Intellectual Property Liability

Don’t Ignore it; Manage it.

Let’s say you’re a retailer. You buy stuff from a reputable manufacturer or middleman and turn around the sell it to the general public. You’re pretty safe from most intellectual-property concerns, right? If what you’re selling turns out to be counterfeit, that’s not your problem, right? You did all you could to avoid counterfeits, mostly by making sure your sellers are reputable. Besides, you didn’t do anything wrong—whoever made the counterfeit did. The same thing goes for patent infringement—not your fault, right?

It might not be your fault, but it is, unfortunately, still your responsibility, as a recent case involving Fossil and Macy’s demonstrates. Intellectual property law cares not (much) about morality and “fault,” but can and will impose liability on parties we’d otherwise think of as blameless. As a business owner or manager, all you can do is take sensible steps to reduce your company’s exposure.

What Is Downstream Liability?

Welcome to the horrible world of “downstream liability.” Unfortunately, it is an infringement of trademark and patent rights to sell infringing items; and it’s an infringement of copyright to “distribute” copyrighted materials. Patent, copyright and trademark laws don’t care very much about “fault.” If someone up your…

Hmm, but is it genuine? Better check the clasp. Photo by Ben Schumin, licensed under Creative Commons Attribution-Share Alike 2.5 Generic license.

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My Response to Prof. Menell Regarding the Propriety of Relying on Pre-Enactment Legislative History of the Copyright Act of 1976

Prof. Menell Comments on 15% of My Article; I Respond.

This is the first of a series of blog posts in which I respond, in detail, to the following assertion by Prof. Peter Menell in a recent blog post post made on the Media Institute’s website:
Mr. Rick Sanders also questioned my exploration of legislative history, suggesting that it is improper to consult legislative history predating the enacting Congress. His assertion overlooks Supreme Court opinions in Kirtsaeng, Tasini, CCNV, Abend, Dowling, and Sony [a/k/a “Betamax”] adverting to 1976 Copyright Act legislative history predating the enacting Congress.
Prof. Menell was, indirectly, responding to one (of several) arguments I made in an article I wrote on whether the distribution right includes a “making available” right, i.e., whether just making something (a book or digital song file) available (for sale or download) violates the distribution right. I was, in turn, responding to Prof. Menell’s re-writing of the section of the authoritative treaties on copyright law, Nimmer on Copyright. Prof. David Nimmer, who maintains (and mostly writes) Nimmer on Copyright had previously either (depending on whose recollection you’re using) taken no position on the issue or was leaning against the existence of a “making available” right…

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Is Nimmer & Menell’s “Lost Ark” of Copyright Just a Prop?

Spoiler: Yes.

So, I’m talking about this article of mine that was kindly published by the Vanderbilt Journal of Entertainment and Technology Law (“JETLaw”). See part I here. The issue has to do with one of copyright law’s “exclusive rights”—i.e., things only the copyright owner and his or her authorized licensees may do with a copyrighted work—the right to distribute copies of the work to the public, which we’ll just call the “distribution right.” The question is whether the distribution right includes only consummated acts of distribution, or can also include attempts and offers to distribute.* Most (but not all) courts have held that the right is limited to consummated distributions, but rights holders would very much prefer the broader interpretation. The issue used to be academic, but with file-sharing, it matters now because it’s very difficult to detect consummated downloads**, but it’s easy to prove that the unlicensed works were “made available” for download on the file-sharer’s computer.

* Remember that the distribution right has an important exception: the first sale doctrine. Once you legally obtain a physical embodiment of the work, you may dispose of it as you see fit.

** Putting aside what I have…

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Checking the Sources: Why I Questioned Nimmer on Copyright

Practitioner’s POV: Treatises Must Be Reliable

So, I’m very grateful to the Vanderbilt Journal of Entertainment and Technology Law (“JETLaw”)* for publishing my article on Nimmer on Copyright’s about-face on the “making available” theory of the distribution right**. You can read the whole thing here.

* Better known in my day as “JELP”: Journal of Entertainment Law & Practice.

** I explain what this is about near the end of this post.

Oh, are you back so soon? Well, yeah, I guess I failed to mention that it’s about 20 pages of formal prose (but the margins are so big!), there really are 169 footnotes,* and there are zero snarky asides. But you’re still interested, perhaps because you’ve heard this issue directly affects internet-based commerce**. Since you’re not a legal scholar*** and you don’t have tons of time, would I mind summarizing?

* Did I mention that I was grateful to JETLaw? I threw those footnotes together, but do you see how neat and perfect they are, and that they probably actually support the proposition they’re footnoting? You need to thank the JETLaw student editors for that. Since I was once a professional authorities editor, I know what…

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Merry Christmas (and Happy Hogswatch)! Further Thoughts on Zappos’ Terms of Service

Wherein I Explain My Behavior

I’ve been MIA from the Blog with No Name for a while. Sorry about that. I’ve been struggling with a guest blog, which might turn into a full-blown article, about why it was wrong, wrong, wrong for Nimmer on Copyright to so definitively change its position on the “making available theory of distribution” (a/k/a the question of whether just keeping copyrighted files in a file-sharing folder infringes the distribution right).*

* Spoiler/rant: It’s not because I support file sharing of copyrighted works. I don’t. And it’s not because Prof. Nimmer (being impersonated by Prof. Menell) is necessarily wrong. They make a fairly strong case (though with substantial holes). It’s that they aren’t necessarily right, either. The problem is that they aren’t necessarily right, either. Nimmer on Copyright is a treatise, probably the most authoritative treatise on copyright law, and practitioners pay a tidy sum for the privilege of accessing it. What we pay for is reliability and authority (with the latter flowing from the former). But only a crazy person would say, as Nimmer/Menell now do, that this question has been definitively answered, and a practitioner reading the revised section uncritically—and, again, we pay…

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