Month: April 2013

Developer of `Section 8′ zapped on appeal

The U.S. Court of Appeals for the Fifth Circuit in New Orleans has upheld an arbitrator’s award to Gamecock Media Group, a publisher, for fraud and breach of contract by TimeGate Studios Inc., a video game developer. The appellate decision reversed a lower federal court in Texas, which held that the arbitrator’s grant to publisher of a perpetual license in the video game, Section 8, was not in line with the parties’ underlying contract. In 2007, Gamecock (since acquired by Southpeak Interactive LLC) entered into a video game publishing agreement with TimeGate, where the developer owned the game’s intellectual property. Gamecock was granted an eight-year worldwide license, prohibiting it from making derivative works or exploiting Section 8 in any way not in accord with the contract. Soon after the game was released in 2009, the parties’ relationship fell apart, leading to arbitration. The arbitrator ruled that TimeGate committed fraud and breach of contract. It pocketed money that Gamecock had invested in the product and never put sums into the game as the developer was obliged to, nor did it ever intend to, said the arbitrator, who awarded the publisher $7.35 million in damages. Gamecock also was granted a perpetual license in the game’s intellectual property, without paying royalties to TimeGate. The district court vacated the arbitrator’s award, finding it inconsistent with the “essence” of the 2007 contract, which only granted Gamecock a temporary license. The Fifth Circuit...

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Long arm of U.S. law slaps 2 for Pacific piracy

So when do nifty ads for bargains or eye-appealing graphics become potential reasons for legal pause for those who run commercial websites? Perhaps when those operators possibly are pirates of others’ content. Or so a federal magistrate in San Francisco has found. She has ruled on a complaint filed by a Korean company that the American arm of the law can reach over the Pacific to exercise jurisdiction over site operators in Indonesia and Vietnam — and the commercial tools the webheads employed proved to be their courtroom undoing. DFSB Kollective, a Korean “boutique creative agency,” took to U.S. courts to sue for copyright infringment entrepreneurs Bing Yang, of Vietnam, and Indrawati Yang, of Indonesia, Entertainment Law Digest reports. The Korean firm asserted that the two made its music available for download on several of their blog sites. Though users could not download music directly off their sites, defendants would upload music onto a third-party site, then direct audiences to download the content from there, using DFSB album artwork, the plaintiffs complained. Neither defendant answered the suit, nor did either travel from Asia to be in court for a San Francisco hearing. So the plaintiffs sought a default judgment The last time DFSB attempted to prosecute online music pirates in a foreign jurisdiction, the case was dismissed for lack of personal jurisdiction, with a federal magistrate then deciding: “Plaintiffs...

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Judge tosses bid for ‘Superman’ attorney fees

DC Comics was not as invincible as it thought in its latest court battle against the heirs of Superman’s creators. A U.S. District Court in Los Angeles has denied DC Comics’ request for $500,000 in attorney fees from counsel for heirs of Joseph Shuster and Jerome Siegel, creators of the Man of Steel. In October, 2012, DC Comics and Warner Bros. won a ruling against the heirs and their attorney, Marc Toberoff, for copyright violations.  Two years earlier, the heirs had terminated their agreement with DC Comics for a joint-venture with Toberoff and his loan-out company, Pacific Pictures, giving it a controlling stake in the heirs’ Superman interests.  But the L.A. federal court held that the 1992 copyright grant agreement among the parties could not be terminated, allowing DC’ Comics’ parent company, Warner, to develop future projects without the heirs’ authorization. In 2008, the district court further found that the Shuster and Siegel heirs violated DC’s copyright by entering into an agreement with each other without the comic publisher’s approval. U.S. District Judge Otis Wright, in his latest case ruling, rejected DC Comics’ argument for attorney fees from Toberoff and Pacific Pictures; the comics publisher said that since it had prevailed in two of three claims, these defendants simply should have conceded on a third, and since they did not, that cost plaintiffs $500,000 to litigate a claim, based...

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Trio finds harmony in new deal on music rights

If you can’t beat ’em, join ’em? That’s just what Universal Music Publishing  and the French Society of Authors, Composers and Publishers of Music (SACEM) did: They reached a licensing agreement with YouTube so the video-sharing site can have access to the Anglo-American musical repertoire of Universal and the French society, with all sharing in recouping a percentage of revenue. Universal CEO Zach Horowitz said  the deal is a good one because “the digital market can only flourish if creators receive fair remuneration delivered through efficient and innovative licensing solutions.” YouTube,  of course, has plenty of legal battles under way as it copes with pressure from major music companies chafing over how the Google subsidiary provides consumers with so much free music and ways to exchange it among themselves. The company is still battling over copyright infringement claims with GEMA, the German society for musical performing and mechanical reproduction rights. The partnership with the French, as Universal describes it, is novel because it “facilitates greater transparency, coordination and data-sharing between the organizations while ensuring equitable compensation for rights holders who are entitled to a share of the platform’s revenues.” YouTube’s clout in the music industry also stands to grow if it closes a $50-million deal with Vevo; Billboard’s Top 100 also now factors YouTube views in its rankings. As for the French accord, it’s worth noting that it hasn’t won...

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File-sharing service loses bid for DMCA shelter

If you’re running a file-sharing service, making money and encouraging others to infringe on copyrights, the courts have got a legal slap-down for you, as Gary Fung, one such entrepreneurial operator has discovered: He found himself on the wrong side of a recent decision by the U.S. Ninth Circuit Court of Appeals, which upheld a lower court ruling, sought by Hollywood studios, that Fung was liable for contributory infringement. After seven years of legal combat, the courts have said he cannot find his claimed shelter under the Digital Millennium Copyright Act because his service’s chief aim was not neutral but to allow others to trade copyrighted materials. Fung owns several different bittorrent hosting services, most notably isoHunt where users could access content files  — and get technological help doing so, with search and storage assistance, especially creation of new copies of materials. Via bittorrent — a “protocol (a set of rules and description of how to do things) allowing you to download files quickly by allowing people downloading the file to upload (distribute) parts of it at the same time” — those who used his service found movies, including those owned by plaintiffs Columbia Pictures Industries. Columbia sued Fung and others in 2006, prevailing in the district court, leading to his appellate appeal. At the appellate level, as reported by Copyright Alliance,  the judges applied the analysis from the...

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