Richmond Journal of Law and Technology

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Cite as: Matthew M. Pagett, Taking Note: On Copyrighting Students’ Lecture Notes, 19 RICH. J. L .& TECH 6 (2013), available at http://jolt.richmond.edu/v19i2/article6.pdf

 

by Matthew M. Pagett*

 

An essential element of individual property is the legal right to exclude others from enjoying it.  If the property is private, the right of exclusion may be absolute; if the property is affected with a public interest, the right of exclusion is qualified.  But the fact that a product of the mind has cost its producer money and labor, and has a value for which others are willing to pay, is not sufficient to ensure to it this legal attribute of property.  The general rule of law is, that the noblest of human productions—knowledge, truths ascertained, conceptions, and ideas—become, after voluntary communication to others, free as the air to common use.  Upon these incorporeal productions the attribute of property is continued after such communication only in certain classes of cases where public policy has seemed to demand it.  These exceptions are confined to productions which, in some degree, involve creations, invention, or discovery.[1]

– Justice Louis D. Brandeis  

 

I.  Introduction

[1]        According to The Orion, “an independent, student-run newspaper at California State University, Chico” (“CSU”),[2] two students at CSU were reported to their school’s Judicial Affairs office on November 16, 2011, for selling class notes from a lecture through the online note-selling service, Notehall.com.[3]  Notehall.com solicited the students, including Ms. Kelsey Goishi, a junior majoring in communications studies, through the university’s e-mail client.[4]  Through that medium, the service offered the students semester-long positions as professional note-takers, which could garner each student up to $450 per semester.[5]  In order to fulfill their duties for this position, Ms. Goishi and the student-employees were required to upload weekly lecture notes and, more importantly, “study guides,” which contained “explanations of all the information that [the students would] be tested on.”[6]

[2]        After performing these tasks, the student-employees were expected to inform their classmates about the study guides by sending out a class-wide e-mail.[7]  Ms. Goishi’s professor was “made aware” of the study guide for his class, which was then on sale for $5, after a student sent out such an e-mail.  Afterward, Ms. Goishi was required to meet with both the office for Judicial Affairs and her instructor.[8]  Though the personal consequences of this meeting for Ms. Goishi are unknown,[9] CSU sent Notehall.com a cease-and-desist letter a few months after the incident, citing both state law and university policy forbidding the sale, distribution, and publication of class notes for commercial purposes.[10]  As a result, Notehall.com no longer allows students from CSU or other University of California campuses to upload notes through their system.[11]  Interestingly, however, the company never acknowledged the validity of CSU’s legal claim, simply noting that it was refusing service to these schools “[o]ut of respect for this policy.”[12]

[3]        While it has been asserted that Ms. Goishi’s actions and the Notehall.com procedures for selling notes are a “clear violation” of California state law and broadly speaking, “illegal,”[13] the extent to which this may be true and the circumstances under which either California law or U.S. copyright law may be violated is unclear.  This article will review the relevant law on the question of whether a student owns the copyright in her or his own notes and attempt to answer that question.  Part II addresses: (1) the primary elements of a copyrightable work under the Copyright Act of 1976, (2) the Fair Use Doctrine, (3) whether classroom notes constitute protected compilations, and (4) whether classroom notes could be considered “derivative works.”  Part III discusses the federal preemption doctrine, whether states have the authority to legislate ownership of copyrighted works, and, if so, the effect of that authority, with special emphasis on California law.  In Part IV, this article will address the particular factual circumstances discussed in Part I and evaluate whether Ms. Goishi and Notehall.com were in “clear violation” of state or federal law.  Lastly, the author will postulate as to the certain circumstances that may or may not create a copyright or allow for the infringement of that right with regard to students’ lecture notes.

 

II.  Background

A.  Fixation and Originality Under the Copyright Act of 1976

[4]        Congress’s authority to protect individuals’ intellectual property comes from the United States Constitution, which states that “Congress shall have the Power . . . [t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”[14]  The statute currently exercising this Congressional power is the Copyright Act of 1976 (“the Act”).[15]

[5]        In pertinent part, the Act states that copyright protection is granted to “original works of authorship fixed in a tangible medium of expression,” including, but not limited to: (1) literary works; (2) musical works; (3) dramatic works; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works.[16]  A work of originality is considered “fixed” when it is written down or captured in such a way that it becomes “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”[17]

[6]        With regard to academia, the fixation language has been interpreted to exclude material presented orally in courses.[18]  In Fritz v. Arthur D. Little, Inc., the plaintiff taught leadership training seminars and sued the defendant for stealing his trade secrets by taking “copious notes” during those seminars.[19]  The district court dismissed the plaintiff’s copyright claim, however, reasoning that that “[o]riginal words spoken aloud can be copied (and independently copyrighted) by all, if they have not previously been fixed in a tangible medium of expression.”[20]  Pulling from Justice Holmes’s opinion in Bleistein v. Donaldson Lithographing Co., the Court relied on the aphorism that “[o]thers are free to copy the original[, but t]hey are not free to copy the copy.”[21]

[7]        Under that rationale, the question of “fixation” is brought to the forefront when considering whether a professor’s lecture may be subject to copyright protection.  Pursuant to the language in Fritz, a professor or university must be able to show that the students’ notes were not copies of an original, extemporaneous expression in order to have a valid copyright claim; rather she, he, or it must show that the notes were copies of methodically planned, outlined, and notated predeterminations.  Thus, when evaluating whether a professor’s lecture is “fixed,” you must first ask whether the students’ notes are copies of an original, spontaneous statement on the part of the professor or whether the students’ notes are copie
s of the professor’s “copy,” i.e., her or his uniquely prepared presentation of original material.[22]

[8]        This question speaks to the other major requirement for a work to be considered copyrightable under the Act, whether the presumptively copyrighted work is “original.”[23]  A prospective plaintiff can generally meet the originality requirement with little effort, simply showing that the work “possess some creative spark, ‘no matter how crude, humble or obvious’ it might be.”[24]  Because a professor is likely to organize his or her lecture with some modicum of creativity and thoughtfulness,[25] such a presentation would probably satisfy the originality requirement.[26]

[9]        In order for a plaintiff to demonstrate a proper claim of copyright infringement, one must prove: “(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.”[27]  To establish ownership of a valid copyright, the plaintiff must show both fixation and originality under the terms of the Act.[28]  In addition, the work must be of a sort that is qualified to be considered for copyright protection.[29]  While lectures are not explicitly protected under the Act, they are neither explicitly denied such protection.  Under the standard discussed in this article, it seems likely that such expressions would meet the originality requirement.[30]  There is a question, however, as to whether a lecture presented vocally and without visual aids is “fixed in a tangible medium” for the purposes of Section 102.  While there seems to be support for the idea that fixity could occur given sufficient preparation on the professor’s part, it is unclear without delving more fully into the facts of a particular case.[31]

B.  The Fair Use Doctrine

[10]      When a work is protected under the Act, use may be immune from an action of copyright infringement on the grounds that it is a “fair use” of the author’s protected expression.[32]  The fair use exception is codified in Section 107 of the Act and states that the reproduction of a copyrighted work “for purposes of criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.”[33]  In determining whether the fair use doctrine applies to any one particular situation, the statute directs courts to consider the following factors:

(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.[34]

[11]      The fair use doctrine has been referred to as “the most important defense to infringement,”[35] and the Supreme Court has interpreted the doctrine to “permit[] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which the law is designed to foster.”[36]  While there is an argument to be made that the use and sale of a student’s lectures notes constitutes a “fair use,” many factors weigh against such a defense.[37]

[12]      The first factor, “purpose and character,” turns on whether the use is “of a commercial nature.”[38]  If the use is of a commercial nature, less weight is typically given to the argument that the use is acceptable under the fair use defense.[39]  Even if a court determines that a particular use is “of a commercial nature,” however, such a determination does not fully exclude the possibility of utilizing the fair use defense.[40]  For instance, in Ms. Goishi’s situation—where she and other student-employees sold their notes for a moderate profit—a court might find that the other three factors taken together weigh more heavily in favor of a finding that, despite its commercial nature, the sale of the students’ notes was a “fair use.”

[13]      It is unclear whether the second fair-use factor, “the nature of the copyrighted work,” would lend itself, along with the other factors, to a finding that a student’s notes are a “fair use” of a professor’s lecture.  The second factor is broad, but it has been interpreted in such a way that those works which are “intended” to have more copyright protection receive it.[41]  Thus, under the intention standard, works that are original (as opposed to derivative), creative (as opposed to factual), and unpublished (as opposed to published) are generally considered to “merit greater protection.”[42]  Such factors cut in favor of and against a student-employee who is working for an organization like Notehall.com.  On one hand, the “unpublished”[43] nature of the transcribed lecture notes[44] is often a factor weighing against a finding of fair use.[45]  On the other, classroom lectures typically constitute a mix of factors, including (a) originality, (b) derivation, (c) creativity, and (d) basis in fact.  While factors (a) and (c) generally weigh against a finding of fair use, factors (b) and (d) typically weigh in favor of such a finding.  Thus, such a mixture of factors would likely obfuscate the application of a clear precedential rule as to whether the “nature” of a classroom lecture protects that lecture against the affirmative defense of “fair use.”

[14]      The third factor asks for the relative “amount and substantiality of the portion used” in the class notes when compared with the lecture as a whole.[46]  Generally speaking, “[t]he more has been taken, the harder it is to justify as fair use . . . [because] fair use should as a rule take no more than is necessary to achieve the legitimate aims of the user.”[47]  In this case, the students working for Notehall.com were expected to upload class notes at least once a week and to create a study guide for their class’s exam.[48]  Thus, it was necessary for them to “take” something constituting almost the entirety of the lecture, at least with regard to substantive content.  There may be a question as to whether a student truly “takes” the professor’s lecture when she or he takes that information and processes it in a new form; if one assumes that a lecture is copyrighted in the first place, however, fair use is probably less likely to succeed as an affirmative defense to copying and selling the lecture notes.

[15]      The last factor that courts measure when determining whether the fair use defense is applicable is “the effect of the use upon the potential market for or value of the copyrighted work.”[49]  While each factor is typically given equal weight today,[50] the fourth factor was at one time considered the predominate factor in any court’s consideration.[51]  As a part of that consideration, the operative question for any court is: “Does the use reduce the money the copyright holder has received for the work or is likely to receive from the work?”[52]  If so, then the fair use defense is unlikely to succeed.[53]

[16]      At first blush, it would seem that this factor, which was once considered the most important of the four, cuts in favor of a student-employee who sells her class notes online.  While the availability of class notes might affect the overall “grading curve” of a course, that availability is narrowly tailored for the purpose of helping those students who are enrolled in a certain course.  The notes are rarely seen by individuals other than the students themselves and are not necessarily valuable beyond the life of the course.  Taken in that light, the negative economic effect on either the professor or the university would seem to be slight, bolstering the idea that a student-defendant might be able to utili
ze the fair use defense after all.

[17]      Such a reading of the Act fails to consider how a professor might use his or her lecture material outside of class, however.  It may be inferred from the language of the Act that the value of the fourth factor turns on whether the professor’s work is “unpublished.”[54]  Thus, if a professor discusses a topic about which she or he intends to publish, and her or his theories and conclusions are “leaked” to the public before they are fully prepared for publication, there may yet be some negative economic effect for the professor.  The extent to which such a leak would be damaging is unclear, however.  Because commercial note-sharing services are typically oriented toward a specific audience and used for a specific purpose (i.e., students seeking to gain a degree), it seems unlikely that a leak would cause more damage to the lecturer than that person’s practice of discussing her or his theories and conclusions during a classroom lecture already does.

[18]      Thus, while certain “fair use” factors may cut in favor of the idea that a student-employee and note-taker might be able to assert the fair use defense, the greater weight of the evidence would seem to support the idea that a professor’s lecture, if copyrightable, could withstand such an assertion.

C.  Compilations and Derivative Works

[19]      When evaluating factual scenarios like those surrounding class lectures, it is also important to determine whether the lecture itself, the resulting student notes, or a portion of those notes, could be protected as compilations or derivative works.[55]  Section 101 of the Act defines a protected “compilation” as “a work formed by the collection and assembling of preexisting materials . . . that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.”[56]  The same section defines a “derivative work” as:

“a work based upon one or more preexisting works, such as . . . any . . . form in which a work may be recast, transformed, or adapted. A work consisting of . . . elaborations[] or other modifications which, as a whole, represent an original work of authorship . . . .”[57]

It is important to note that, for both definitions, the language of the Act focuses on the fact that such works must be so different from preexisting works that they constitute an “original work of authorship.”[58]  A compilation sufficient to be considered an original work of authorship is created when the preexisting works are selected and arranged in an original way.[59]  For derivative works, this happens when the preexisting work is “recast, transformed, or adapted” in such a way that the derivation becomes an original work in and of itself.[60]

1.  Compilations

[20]      Little case law exists on the narrow issue of whether a student’s class notes or a professor’s lectures constitutes a protected compilation.  Generally speaking, the Supreme Court of the United States has stated that, while “facts are not copyrightable[,] compilations of facts generally are.”[61]  In Feist Publications, Inc. v. Rural Telephone Service Company, Inc., the Court addressed whether a telephone utility’s listing of names, towns, and telephone numbers was copyrightable.[62]  Noting that the listings “could not be more obvious,” the Court determined that they were not sufficiently original to merit copyright protection.[63]  The Court reasoned that, in order for a compilation of facts to be sufficiently original to merit copyright protection, it must be “selected, coordinated, or arranged” in an original way.[64]  Thus, because the telephone utility’s listing was “entirely typical” and “devoid of even the slightest trace of creativity,” lacking “more than a de minimis quantum of creativity,” it was not copyrightable.[65]

[21]      Although the Supreme Court has not answered the question of whether a student’s lecture notes constitute a copyrightable compilation, one federal district court has held that a professor’s pre-prepared practice questions were copyrighted works.[66]  Because a compilation must be the result of an original selection, coordination, or arrangement of facts,[67] the contents of an in-class lecture could reasonably meet the criteria for this standard as long as the fixation requirements are met.[68]  If those requirements are not met, and a professor’s lecture is not considered a copyrightable work, it is still possible that a student’s own class notes, capturing that work, could constitute a protected compilation.

[22]      To address that question, it is helpful to look at the statutory language, discussed at length in Feist, which requires the selection, coordination, or arrangement of facts in an original way.[69]  That mandate strikes at the very heart of this article.  While “facts are never original,” in and of themselves, they can become so when they are selected, coordinated, or arranged in an original way.[70]  With regard to student notes, it is important to consider the fact that the Feist standard does not require a piece be original in its selection, coordination, and arrangement.[71]  Rather, originality is required in only one of these areas.[72]  Thus, it is likely difficult, though not impossible, for a student to show that the contents of her class notes are the result of originality in their selection and organization (as they are likely the result of the professor’s selections, not the student’s). However, that student may be able to argue that she has arranged the professor’s lecture in a way that is sufficiently original to warrant copyright protection.  In addition, a student who supplements her professor’s lecture notes with her own notes (taken from her independent research, for example), could probably show original selection as well.  Her success would depend, in large part, on the particular factual circumstances surrounding her notes and how those notes were created and amended during the studying process.  Such an showing is discussed in greater detail infra Part V.

2.  Derivative Works

[23]      If a professor’s lecture is able to qualify for copyright protection, it is also possible that a student’s notes, which are based on that lecture, could be considered a copyrightable derivative work of the professor’s lecture.  In such a case, a student would have to show that his or her class notes have “recast, adapted, or transformed” the professor’s lecture in an original way[73] and, further, that the professor or the institution (i.e., the copyright holder) gave the student permission to prepare such a work.[74]  While it has been argued that students’ class notes cannot be considered protected compilations or derivative works “because the student is not adding any creativity to the process,” that argument is premised on the idea that “[it is] the student’s job is to take down the professor’s words, exactly from the lecture itself.”[75]

[24]      When determining whether a student might own the copyright in his or her class notes, as a derivative work, the first question is whether the student has the permission of the copyright holder, either the professor or the institution, to make the derivative work.[76]  Section 106(2) of the Act confers on the author of an original work the right to “prepare derivative works” and Section 103(a) further notes that unlawfully procured copyrighted works are not given protection as derivative works.[77]  In interpreting the word “unlawfully” from Section 103, the Seventh Circuit has noted that “[it] means only . . . that the right to make a derivative work does not authorize the maker to incorpo
rate into it materials that infringe someone else’s copyright.”[78]  That is to say, one party cannot use another’s copyrighted material without a “right to obtain [it].”[79]  This rule does not translate well in the context of class notes, however.

[25]      In the classroom, a professor is presumably well aware of the fact that his or her students are taking notes. Indeed, the value of any classroom experience is the conveyance of information from teacher to student and the retention of that information over time.[80]  Since the classroom environment is not often visited in U.S. copyright law, however, it is unclear whether taking notes is sufficient to constitute implicit “permission” for the creation of a derivative work, despite the implicit permission that seems to flow from this activity.[81]  Such an inference would depend, in part, on both (1) the professor’s own understanding of the students’ right to the lecture material and the extent to which that understanding is communicated to the students, and (2) if one exists, the school’s policy on the matter.[82]

[26]      When determining the likelihood that a student’s class notes might constitute a derivative work, the second question that a court must ask is whether the student’s notes are sufficiently original.[83]  Although the Feist Court stated that “[t]he standard for originality is low,”[84] some courts have applied a slightly higher standard to derivative works.[85]  In Entertainment Research Group, Inc. v. Genesis Creative Group, Inc. (“ERG”), the Ninth Circuit employed a test which required derivative works to exhibit a level of originality that: (1) is more than trivial, and (2) “reflect[s] the degree to which [the work] relies on preexisting material” unrelated to the scope of “any copyright protection in that preexisting material.”[86]  The court explained that the second prong is meant to ensure copyright protection is not given to derivative works which are “virtually identical” to the original work.[87]  Applying that test, the court held that three-dimensional inflatable costumes, which are based on copyrighted, two-dimensional cartoon designs,[88] are not sufficiently different from the cartoons to survive the second prong, despite the complexities that come with creating a three-dimensional object out of a two-dimensional drawing.[89]

[27]      The Ninth Circuit’s reasoning in ERG, focusing on the way in which a derivative work is created, can be applied in this factual scenario as well.  If a student is selling her notes (or an outline based on those notes) through an organization like Notehall.com, the issue of whether that student has a copyright in her notes (or her outline) will depend on the extent to which the student has “recast, transformed, or adapted” the professor’s lecture in a way that is both (1) more than trivial, and (2) not virtually identical to the professor’s work.[90]  Much of this determination turns on the particular facts in any one case.  For instance, if the student takes the time and effort to substantially alter the way in which the information from her lecture is presented, then the new, altered form would be more likely to garner its own copyright protection.  Such a possibility is discussed in more detail infra Part V.

 

III.  State Law & Federal Preemption

[28]      Much of this article is premised on the idea that a professor’s class lecture must meet Section 101’s standard for fixation in order to be protected under the Act.  In certain instances, however, it is possible for an “unfixed” class lecture be protected from copyright infringement under the laws of the several states.

[29]      Section 301 of the Act provides that “all legal or equitable rights . . . in works of authorship that are fixed in a tangible medium of expression . . . are governed exclusively by this title.”[91]  That is to say, federal copyright law preempts all copyright laws concerning works that are fixed in a tangible medium of expression.  Thus, no state law that attempts to create copyright protection for such works will be valid.  However, the Act carves out an exception for those works of authorship that “do[] not come within the subject matter of copyright as specified by sections 102 and 103, including works of authorship not fixed in any tangible medium of expression.”[92]  Therefore, a state law providing copyright protection for “non-fixed” or unfixed works of authorship would not be preempted by the Act, despite the fact that the law would have to do with the subject matter of copyrights.[93]

A.  California Civil Code §§ 980-89

[30]      As of this writing, only California has taken advantage of the “fixity exception” to the Act.[94]  In California Civil Code Section 980 (“Section 980”), the California State Legislature mandates that “[t]he author of any original work of authorship that is not fixed in any tangible medium of expression has an exclusive ownership in the representation or expression thereof.”[95]  Thus, in California—unlike anywhere else—lack of fixation is not a bar to copyright protection.

[31]      The California Court of Appeals addressed Section 980 briefly in 1969—before the implementation of the U.S. Copyright Act of 1976—in Williams v. Weisser, where it considered a set of facts somewhat reflective of those described here in Part I.[96]  In that case, the defendant-company (“the Company”) published and sold notes from the plaintiff-professor’s (“the Professor”) course in Anthropology at the University of California at Los Angeles.[97]  The Company paid one of the Professor’s students to attend the Professor’s class, take notes based on his lectures, type up those notes, and deliver them to the Company for publication and sale.[98]  After the California Superior Court granted the Professor’s motion to enjoin the Company’s actions on the grounds that its actions were prohibited, inter alia, for violating the Professor’s “common law copyright in his lectures,” the case went before the California Court of Appeals.[99]

[32]      Given the Professor’s reliance on “common law copyright,”[100] the court focused its analysis primarily on whether the Professor or the university owned the copyright in his lecture.  In addition, the court asked whether the professor had a right to preclude the defendant from distributing the notes resulting from that lecture, on privacy grounds.[101]  The court first determined that the professor owned the copyright in his lecture.[102]  Second, on the privacy issue, the court found that the Professor did in fact have a privacy interest in prohibiting the Company from disseminating a product that could be associated with him, especially given the fact that the product was not a fully accurate representation of the professor’s lecture.[103]  More importantly, for the purposes of this article, the court of appeals held that Section 980(a), which provides copyright protection for “unfixed works,” was not implicated because the Professor’s lecture “consist[ed] of the extensive notes which he had compiled before the beginning of the course . . . includ[ing] charts and diagrams placed on the classroom blackboard,” all of which were prepared before the beginning of the course.[104]  Thus, the court concluded, Williams was “not a case where the concrete expression of the ‘composition’ consist[ed] solely of an intangible oral presentation.”[105]

[33]      The broad, national implication that one may draw from the court’s determination in Williams is that there is a greater likelihood that a court might consider a professor’s lecture to be “fixed” when the notes informing it were pre
pared before the beginning of the semester and when the lecture relies on charts and diagrams to communicate to the students.[106]  Further, the inference is that, in order for Section 980 to be implicated, a professor’s lecture must be entirely unfixed.[107]  In other words, the lecture must be an extemporaneous presentation without notes, diagrams, and significant pre-semester preparation in order to qualify for protection under Section 980.[108]

B.  California Civil Code §§ 66450-52

[34]      Perhaps due to the fact that one could interpret Sections 980 through 982 of the California Civil Code to protect only classroom lectures that are poorly prepared or un-prepared, or the fact that student notes could be considered uniquely original compilations or derivative works in their own right, the California State Legislature passed another amendment to the California Civil Code on August 30, 2000.[109]  The amendment, which is located in Sections 66450 through 66452 of the Code, provides, inter alia:

“(a) Except as authorized by policies developed by the University in accordance with subdivision (a) of Section 66452, no business, agency, or person, including . . . an enrolled student, shall prepare, cause to be prepared, give, sell, transfer, or otherwise distribute or publish, for any commercial purpose, any contemporaneous recording of an academic presentation in a classroom or equivalent site of instruction by an instructor of record.”[110]

The Code further stipulates that “[t]his prohibition applies to a recording made in any medium,” including “handwritten or typewritten class notes.”[111]  Thus, students in California are prohibited from selling or publishing their class notes, regardless of copyright ownership, without the express permission of the university.

[35]      In accordance with the language of Section 66450, which allows for properly constructed university policies to preempt the prohibition forbidding the sale of class notes, many universities in California have set out specific policies clarifying their respective positions.[112]  For instance, the University of California at Berkeley has adopted a policy generally in accordance with the state’s prescriptions, proclaiming that professors own the copyright in their own lectures, pursuant to Section 980(a). However, the school asserts that students are prohibited from selling their notes “[e]xcept as approved in advance by the instructor . . . .”[113]  Additionally, and importantly, the University has also established a “Campus Class Note Subscription Service” through which notes may be sold, but only with the authorization of the University, the Academic Senate, and the course instructor.[114]  That utility circumvents the privacy issue discussed in Williams by providing instructors with the right to “review and approve the notes prior to their distribution and sale.”[115]

[36]      While California is the only state to have proclaimed that instructors have a copyright in unfixed works existing within its borders,[116] universities in other states have set similar policies.[117]  For example, the University of North Carolina at Chapel Hill (“UNC-CH”) has stated in its Copyright Policy: “[s]tudent [w]orks that constitute notes of classroom and laboratory lectures and exercises shall not be used for commercial purposes by the student generating such notes.”[118]  Of course, if a student were to own the copyright in her or his own notes, regardless of the UNC-CH policy on the matter, federal copyright laws and the concomitant rights of authorship that come with them would preempt any such prohibition.[119]  On the other hand, if a student were not able to meet the requirements of fixation and originality, then a non-California-based university’s policy might control.

 

IV.  Analysis

[37]      Though Ms. Goishi’s dilemma is a recent one, it is not an uncommon occurrence for students to be rebuked or punished because of their attempts to publish, disseminate, or sell their class notes online—as the Williams case shows.[120]  In fact, the issue was recently litigated in one of the few modern-day cases addressing the narrow issue of whether a student or professor owns the copyright in their respective lecture notes.[121]  Though the case was largely litigated in connection to the Digital Millennium Copyright Act (“DMCA”), which proved to be inapplicable to the students’ notes, the case provides a helpful starting point for evaluating the viability of a copyright infringement claim relating to the dissemination and sale of a student’s lecture notes today.[122]

[38]      In Faulkner Press L.L.C. v. Class Notes L.L.C., the plaintiff, a professor[123] who owned the properly registered copyrights in both his lecture notes and the textbooks which he authored,[124] filed a copyright infringement suit against a note-selling company that had “hir[ed] student note takers as independent contractors to provide lecture summaries and study materials” at the university.[125]  The professor alleged that the company’s student-employees had taken notes that improperly included certain practice questions from his textbooks as well as other materials from the lecture, including an outline that the professor showed during class.[126]

[39]      The court acknowledged that the professor’s pre-prepared practice questions were protected by copyright, but found that the student’s lecture summaries could be excepted from enforcement of the Act on grounds of fair use.[127]  Thus, the court remanded the case back to the jury to determine the exact nature of the notes taken.[128]  The court’s decision speaks to the heart of the issue courts outside of California must resolve when determining the validity of a copyright infringement claim made by a professor or institution against a student.  Based on the court’s determination in Faulkner Press, the way in which the student takes her or his notes may affect a court’s determination as to the notes’ ability to continue to be sold.

[40]      In the Terms & Conditions section of the Notehall.com website,  the company states that all of its content must be “independently created, transformative, and non-derivative.”[129]  It goes on to say that a student’s notes:

“[S]hould not be a transcript or recording of another”s [sic] independent efforts . . . . It should go beyond simply summarizing material covered in class or in written or recorded materials, but include information raised by students in or outside of class, and independent thought, analysis and commentary.  Class notes, for example, must be substantially rewritten after class and include independent thought and analysis, research and information; notes that use a lecturer”s [sic] words or that are not carefully reviewed, rethought and rewritten after class are not useful to or appreciated by students, and not permitted on Chegg sites.”[130]

Under these terms, a student’s study guide created based on those facts discussed in the professor’s lecture and even a student’s class notes would likely meet the standard required for a work to qualify as a uniquely original piece of authorship that has been captured in the fixed medium of a student’s class notes.  Therefore, if a student is able to “transform” his or her work in such a way that they are no longer what they were during the lecture, then the student would have created his or her own original work of authorship.  In either case, there would likely be a factual issue, just as there was in Faulkner Press, as to the extent of the “transformation” of the student’s notes.[131]

[41]      It may also be helpful to consider the way in which a court might address a situation like the one
described in Part I.  If a student were sued for copyright infringement by her professor or university, a court might address that case in the following way:

[42]      First, it is important to determine whether the professor’s lecture would merit copyright protection at all.  One can make that determination by looking at whether the lecture is fixed and, further, whether it constitutes an “original work.”[132]  It is presently unclear whether an orally transmitted lecture can be considered “fixed.”  However, given the court’s ruling in Williams, fixation may exist if the professor is able to show sufficient evidence that her or his lectures were well-planned before their delivery and that they were based on extensive notes.[133]  If the lecture notes are not fixed, but the lecture was presented within the jurisdiction of California, then a copyright would exist under Section 980 of the California Civil Code, which provides protection for unfixed works.[134]  In addition, the sale of the class notes would be prohibited, regardless of fixation, under Section 66452 of the Code.[135]  It is unclear, however, as to whether a professor’s lecture would also satisfy the originality requirement.  Given that the requirement has been found to be generous, it seems likely that a student’s lecture notes would meet it, even if only as a compilation.[136]

[43]      The second question that a court might ask, when addressing this issue, is whether the professor or university owns the copyright.  Given the traditional exception to the “work made for hire” doctrine,[137] there is a strong argument that a court would determine ownership in favor of the professor.  In either case, the court would also need to address whether the student’s notes are excepted from copyright liability under the fair use defense, weighing each of the four factors against one another.  Though it is perhaps unlikely, the court might determine in the alternative that the students had the professor’s or university’s implicit permission to create a derivative work from the professor’s lecture, and, thus, that the work was protected.

[44]      Third and finally—regardless of whether a professor’s lecture is found to be copyrightable under the Act—a court would need to determine whether the student had sufficiently transformed the lecture.  A court could so find on the grounds that the student work is a compilation or simply an original creation.[138]  In such an instance, the question would remain the same: whether the student work is fixed and, further, whether it is original.[139]  While the fixation requirement would likely be met with little effort—since class notes meant for transference and sale are necessarily fixed in a medium—it is unclear whether the student’s work would be considered sufficiently original.  Again, this would likely turn on the particular factual circumstances surrounding any one case.

 

V.  Conclusion

[45]      As a student in California, Ms. Goishi likely has little legal recourse.[140]  By passing sections 980 and 66450, the California legislature has made it exceedingly difficult for students to use their class notes for anything other than studying without the permission of the professor or university.[141]  Still, Ms. Goishi’s particular situation is not the only case of a student attempting to sell her professor’s lecture notes in the several states. Thus, it is important to address the legality of doing so outside of California as well.

[46]      If Ms. Goishi were a student outside of California, it seems that the copyrightable nature of her lecture notes would largely depend on the quality of those notes and the extent to which they were revised after class.  In particular, the study guide that Ms. Goishi created may be more likely to achieve protection under U.S. copyright law as an original work of authorship. As long as the guide constituted more than a simple pasting of her notes from the lecture (i.e., she thoughtfully worked to develop it as an original source of information), it should be considered a copyrightable derivative work.

[47]      The quote at the beginning of this article is excerpted from Justice Brandeis’s dissenting opinion in the 1918 Supreme Court decision International News Service v. Associated Press.[142]  In that case, the Associated Press brought suit against an organization called the International News Service for the fraudulent obtainment of information that the plaintiff gathered and its use for its own news service.[143]  The majority held in favor of the plaintiff, relying on the commercial value of the information to that person.[144]  That holding prompted Justice Brandeis to note that, “the noblest of human productions—knowledge, truths ascertained, conceptions, and ideas . . . [are] free as the air to common use” once they have been voluntarily communicated, with the exception of instances of “creation, invention, or discovery.”[145]

[48]      The “Brandeis Rule” should be given effect in the broader context of student classroom notes.  Largely speaking, a professor’s lectures are communicated “free as the air” without being fixed in any permanent form.  In addition, they often constitute transmissions of facts already known in particularly lucid or helpful ways by the general public, and they rarely “creat[e], invent[], or discover[]” in and of themselves.[146]  Thus, excepting those instances in which a professor’s lecture proves to be original or inventive in-and-of itself, student notes should be transmitted among students free as the air.  This would allow students to have greater access to the information that they need to succeed.  Finally, in accordance with the Brandeis Rule, student note-selling services like Notehall.com should give way to free note-selling services provided by the universities themselves, which would facilitate quality scholarship and sharing among all of the institutions’ inhabitants.[147]

 

* Law Clerk to the Honorable Judge Linda Stephens, North Carolina Court of Appeals.  J.D., Wake Forest University School of Law, 2012; B.A., University of North Carolina at Chapel Hill, 2008.  [1] Int’l News Serv. v. Assoc. Press, 248 U.S. 215, 250 (1918) (Brandeis, J., dissenting).

 

 

[2] About the Orion, the Orion, http://theorion.com/site/about/ (last visited Mar. 14, 2012).

[3] Molly Rose Livingston & Ashley Nakano, Notehall Allows Students to Commit Academic Dishonesty, the Orion (Nov. 28, 2011), http://theorion.com/features/article_4d317be4-1a47-11e1-a2e4-001a4bcf6878.html.

[4] Id.

[5] Id.  The e-mail itself reportedly proclaimed: “Being a Note-Taker means making money just being a good student!”  Id.

[6] Id.

[7] Id.

[8] Livingston & Nakano, supra note 3.

[9] Id.

[10] See Erica Perez, Colleges Crack Down on Selling, Sharing Notes, Calif. watch (Feb. 3, 2012), http://californiawatch.org/dailyreport/colleges-crack-down-selling-sharing-notes-14744.

[11] Id.  When a student attempts to upload notes from CSU or a school associated with the University of California, they are met with the following error message (or one like it):”Unfortunately, No More Notes! . . . The California State University Student Conduct Code prohibits students from selling class notes, and subjects violators to potential disciplinary actions. Out of respect for this policy, Notehall does not offer its note taking services at your school.  We apologize for the inconvenience, and share your disappointment with this CSU policy decision.” Id. (emphasis added).

[12] Id.

[13] Livingston & Nakano, supra note 3.

[14] U.S. Const. art. I, § 8, cl. 8.

[15] David Mirchin & William S. Strong, Copyright Law, in Massachusetts Continuing Legal Education, Intellectual Property Practice § 7.1.8 (Jerry Cohen ed., 2011) (“The first statute to provide copyright protection, enacted in 1790, protected only maps, charts, and books.  The Copyright Act of 1909 broadened available copyright protection.  This act was replaced by the Copyright Act of 1976, which took effect on January 1, 1978, and . . . is the current copyright law.”).

[16] Copyright Act of 1976, 17 U.S.C. § 102(a) (2006).  It should be noted that academic “lectures” are not included in the list of possibly copyrightable material.  This omission is not sufficient to defeat a professor’s claim of copyright, however, as the statutory list is only inclusive, not exclusive, merely providing examples of likely copyrightable works.  The idea that lecture notes may fall within the realm of copyrightable subject matter is bolstered by the fact that lecture notes are neither explicitly excluded by the administering agency as among those materials not covered by the Copyright Act.  Such excluded works include: “(a) words and short phrases such as names, titles, and slogans . . . (b) [i]deas plans, methods, systems, or devices . . . (c) [b]lank forms, such as time cards, graph paper, account books, diaries, bank checks, scorecards, address books, report forms, order forms and the like . . . (d) [w]orks consisting entirely of information that is common property containing no original authorship, such as, for example: Standard calendars, height and weight charts, tape measures and rulers, schedules of sporting events, and lists or tables taken from public documents or other common sources.”Material Not Subject to Copyright, 37 C.F.R. § 202.1 (2012); see also Stephanie L. Seeley, Are Classroom Lectures Protected by Copyright Laws? The Case for Professors’ Intellectual Property Rights, 51 Syracuse L. Rev. 163, 171 (2001) (“It seems contradictory to deny professors copyright protection in their expression of ideas conveyed through a lecture since ‘the requirements for copyright protection are minimal . . . .’”).

[17] 17 U.S.C. § 101.

[18] Fritz v. Arthur D. Little, Inc., 944 F. Supp. 95, 100 (D. Mass. 1996).

[19] Id. at 96, 100-01 (determining that “there is not a strong likelihood that plaintiffs will succeed on the merits of their copyright infringement claims”).

[20] Id. at 100 (emphasis added).

[21] Id. (quoting Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 249 (1903)) (internal quotation marks omitted).

[22] Fritz, 944 F. Supp. at 99.  It may be that this question can only be properly answered after an extensive factual inquiry to determine exactly which parts of a professor’s lecture are unique and spontaneous representations, which parts were pre-prepared presentations, and, concurrently, which parts of the students’ notes come from which parts of the professor’s lecture. See generally Bleistein, 188 U.S. at 249-50 (referring to the process of “copy[ing] a copy” versus “copy[ing] an original,” and noting that “the [first] copy is the personal reaction of an individual upon nature. . . . [p]ersonality always contains something unique. . . . [i]t expresses its singularity even in handwriting, and a very modest grade of art has in it something irreducible, which is one man’s alone”).

[23] 17 U.S.C. § 102(a) (2006).

[24] Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991) (noting that “[o]riginality does not signify novelty; a work may be original even though it closely resembles other works so long as the similarity is fortuitous, not the result of copying”).

[25] Preparing to Teach the Large Lecture Course, Univ. of Ark. Wally Cordes Teaching and Faculty Support Ctr., http://tfsc.uark.edu/118.php (“Organize the topics in a meaningful sequence.  Lurching from one topic to another makes it difficult for students to assimilate and retain the material . . . Arrange the course topics thematically, chronologically spatially, in ascending or descending order, by cause and effect or problem and solution, or according to some other conceptual rationale.”); see Barbara Gross Davis, Tools for Teaching 137 (2d ed., 2009) (explaining the importance of lecture organization).

[26] See Feist, 499 U.S. at 345 (“[I]t is beyond dispute that compilations of facts are within the subject matter of copyright.”).  Interestingly, while the originality with which a professor organizes her or his lecture speaks to the copyrightability of a certain lecture, the ingenuity and originality with which a student takes his or her notes also speaks to the extent to which the student notes are a separate, unique creation—and not just a copy—warranting copyright protection in and of themselves.

[27] Id. at 361.

[28] See id. at 355 (“The two fundamental criteria of copyright protection are originality and fixation in tangible form.”) (quoting H.R. Rep. No. 94-1476, at 51 (1976)).

[29] See generally supra note 16; 17 U.S.C. § 102(a).

[30] It is helpful when thinking about whether a lecture should be considered a work subject to the Act to look to the “Idea/Expression” doctrine.  This principle declares that only an individual’s particular “expression” of an idea is protected by copyright law, not the idea itself.  Thus, the way in which a professor presented his material would be more relevant for purposes of the Act than the mere fact that he presented the material at all.  See Eldred v. Ashcroft, 537 U.S. 186, 219 (2003) (“[Copyright law] distinguishes between ideas and expression and makes only the latter eligible for copyright protection.”).

[31] Parts of a lecture that are specifically planned out by a professor may be more likely to be considered “fixed.”  Any part of a lecture that it could be reproduced would likely meet the fixation requirement (e.g., PowerPoint presentations, sound recordings, and outlines created by the professor and then published to the class).

[32] 17 U.S.C. § 107.  Unlike the reactionary defenses discussed in the section above (e.g., lack of originality, etc.), the fair use doctrine is an affirmative defense to a claim of copyright infringement.  Id.

[33] Id. (emphasis added).

[34] Id. (emphasis added).

[35] Mirchin & Strong, supra note 15, § 7.11.1.

[36] Stewart v. Abend, 495 U.S. 207, 236 (1990) (quoting Iowa State Univ. Research Found., Inc. v. Am. Broad. Cos., 621 F.2d 57, 60 (2d Cir. 1980)).

[37] But see Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 566 (1985) (noting that “the single most important element of fair use” is the factor concerning the “Effect on the Market”).  If a court were to rely most heavily on the market-effect factor, it might find that the commercial sale of student notes does fall within the fair use exception, largely because the professor and university would likely continue to generate the same level of revenue despite the proliferation of the professor’s lecture notes among his or her students.  This rationale is discussed in more detail in paragraphs 15-17, infra.

[38] 17 U.S.C. § 107(1).

[39] Harper & Row, 471 U.S. at 566-67 (quoting M. Nimmer, Copyright §1.10[D] 1-87 (1st ed. 1984)).

[40] Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 584 (1994) (“In giving virtually dispositive weight to the commercial nature of the parody, the Court of Appeals erred.  The language of the statute makes it clear that the commercial or nonprofit education purpose of a work is only one element 
of the first factor enquiry into its purpose and character.”) (emphasis added).

[41] Id. at 586.

[42] Peter Letterese & Assocs., Inc. v. World Inst. Scientology Enters., Int’l, 533 F.3d 1287, 1312, 1319 (11th Cir. 2008) (holding that a church organization’s dissemination of a book on sales techniques to train its members for positions within the church constituted a fair use of the book).

[43] 17 U.S.C. § 107.  In this scenario, another interesting factual question that may need to be asked is not whether the actual lecture is unpublished (as most lectures are), but whether the lecture’s content has previously been published.  A particular lecture’s class material might be more protected if the professor were to discuss a topic about which she or he intends (or has begun) to publish, but has not yet disseminated.

[44] It is presumed the copying of the lecture notes is sufficiently fixed to bestow copyright protection.  Whether a particular student copies down a professor’s lecture word-for-word or merely takes notes on the general topics discussed is likely to play an important role in any such copyright infringement case.

[45] See Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 555 (1985) (“The obvious benefit to author and public alike of assuring authors the leisure to develop their ideas from fear of expropriation outweighs any short-term ‘news value’ to be gained from premature publication of the author’s expression.”).  Under that standard, a professor’s lecture may be more likely to survive a fair use defense when it includes information that the professor intends to publish at a later date to the larger academic community (e.g., a study or project on which the professor is currently working).

[46] 17 U.S.C. § 107(3).

[47] Mirchin & Strong, supra note 15, § 7.11.1(j).

[48] See Livingston & Nakano, supra note 3.

[49] 17 U.S.C. § 107(4).

[50] See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 578 (1994) (“All [four statutory factors] are to be explored, and the results weighed together, in light of the purposes of copyright.”) (citing William F. Patry & Shira Perlmutter, Fair Use Misconstrued: Profit Presumptions, and Parody, 11 Cardozo Arts & Ent. L.J. 667, 685-87 (1993)).

[51] See Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 602 (1985) (Brennan, J., dissenting).

[52] Mirchin & Strong, supra note 15, § 7.11.1(k).

[53] Id.

[54] See 17 U.S.C. § 107 (“The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.”).

[55] See id. at § 103(b) (noting that “derivative works” and compilations are encompassed within the penumbra of copyrighted works, but only regarding “the material contributed by the author of such work[s], as distinguished from the preexisting material employed in the work”).

[56] Id. at § 101 (emphasis added).

[57] Id. (emphasis added).

[58] See id.

[59] See id.

[60] Id.

[61] Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 344-45, 348 (1991) (distinguishing between “nothing but raw data—i.e., wholly factual information not accompanied by an original written expression,” which is not copyrightable, and works “possess[ing] some minimal degree of creativity,” which are protected by copyright law).

[62] See id. at 342-44.

[63] Id. at 362-63 (“We conclude that the names, towns, and telephone numbers copied by Feist were not original to Rural and therefore were not protected by the copyright in Rural’s combined white and yellow pages directory.”).

[64] See id. at 358 (“The key to the statutory definition is the second requirement. It instructs courts that, in determining whether a fact-based work is an original work of authorship, they should focus on the manner in which the collected works have been ‘selected, coordinated, and arranged.’”).

[65] Id. at 362-63.

[66] See Faulkner Press, L.L.C. v. Class Notes, L.L.C., 756 F. Supp. 2d. 1352, 1360 (N.D. Fla. 2010).

[67] See Feist, 499 U.S. at 360.

[68] The practice questions had previously been written down in the professor’s textbook, helping meet the fixation requirement.  See Faulkner Press, 756 F. Supp. 2d at 1356.

[69] See Feist, 499 U.S. at 358.

[70] See id. (“Facts are never original, so the compilation author can claim originality, if at all, only in the way the facts are presented.”).

[71] See generally 17 U.S.C. § 101 (2006) (“A ‘compilation’ is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The term ‘compilation’ includes collective works.”) (emphasis added).

[72] See Faulkner Press, 756 F. Supp. 2d at 1357.

[73] See 17 U.S.C. §§ 101, 103.

[74] See id. at §103(a) (“[P]rotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully.”); see also id. at § 106(2); Gracen v. Bradford Exch., 698 F.2d 300, 302 (7th Cir. 1983) (“[E]ven if [Defendant’s] painting and drawings had enough originality to be copyrightable as derivative works she could not copyright them unless she had authority to use copyrighted materials from the movie. ‘[P]rotection for a work employing preexisting material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully.’”) (quoting 17 U.S.C. § 103(a)).

[75] See Seeley, supra note 16, at 187 (“Accordingly, due to the student’s lack of creativity, there is not enough originality to assert that the lecture is significantly different from the class notes . . . .”).

[76] See Gracen, 698 F.2d at 302.

[77] 17 U.S.C. §§ 103(a), 106(2).

[78] Pickett v. Prince, 207 F.3d 402, 406 (7th Cir. 2000).

[79] Id.

[80] See, e.g., The Collegiate University: Building Exceptional Faculty-Student Engagement, Wake Forest U. (Dec. 8, 2008), strategicplan.wfu.edu/whitepaper.html  (last visited Nov. 2, 2012).

[81] It should be noted that a lawsuit would be highly unlikely if the copyright holder were to provide the student with explicit permission to create a derivative work.

[82] Some schools have set explicit policies proclaiming that students do not have a copyright interest in the notes that those students take during class.  See, e.g., Course Note-Taking and Materials, Policy Statement, Univ. Cal. Berkeley (Dec. 5, 2011), available at http://campuspol.chance.berkeley.edu/policies/coursenotes.pdf (noting that instructors retain the right to prohibit students from taking notes in class and, further, stating that “[e]xcept as approved in advance by the instructor, students may not more broadly share their notes or other Class Materials. Furthermore, except as authorized . . . students may not reproduce, share, or distribute notes or other Class Materials made available by an instructor for commercial purposes or compensation”).  This is discussed in more detail in the Preemption and Analysis sections, infra Parts III & IV.

[83] See Pickett, 207 F.3d at 405 (“[O]riginality is required for a derivative work.”).

[84] Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 362 (1991) (“[O]riginality is not a stringent stand
ard; it does not require that facts be presented in an innovative or surprising way.”).

[85]  Compare Picket, 207 F.3d at 405 (expressing disbelief that the “requisite incremental originality . . . slight as it need be” could not be shown), and Feist, 499 U.S. at 345 (“Original . . . means only that the work was independently created by the author . . . and that it possesses at least some minimal degree of creativity. . . . [T]he requisite level of creativity is extremely low”), with Entm’t Research Grp. v. Genesis Creative Grp., 122 F.3d 1211, 1220 (9th Cir. 1997) (“[T]o support a copyright the original aspects of a derivative work must be more than trivial.  Second, the original aspects of a derivative work must reflect the degree to which it relies on preexisting material and must not in any way affect the scope of any copyright protection in that preexisting material.”) (citing Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 909 (2d Cir. 1980)), cert. denied, 523 U.S. 1021 (1998) [hereinafter ERG].

[86] ERG, 122 F.3d at 1220.

[87] Id.

[88] Id. at 1214 n.2 (“For example, Pillsbury purchased ‘Pillsbury Doughboy’ costumes, Toys ‘R’ Us purchased ‘Geoffrey the Giraffe’ costumes, and Quaker Oats purchased ‘Cap’n Crunch’ costumes.”).

[89] Id. at 1224 (noting that “granting [the plaintiff costume designer] a copyright in its costumes would have the practical effect of providing ERG with a de facto monopoly on all inflatable costumes depicting the copyrighted characters”).

[90] See 17 U.S.C. §101 (2006); ERG, 122 F.3d at 1220.

[91] Copyright Act of 1976, 90 Stat. 2541 (current version codified at 17 U.S.C. § 301(a)) (emphasis added).

[92] Copyright Act of 1976, 90 Stat. 2541 (current version at 17 U.S.C. § 301(b)(1)) (emphasis added).

[93] See Trenton v. Infinity Broad. Corp., 865 F. Supp. 1416, 1427 (C.D. Cal. 1994) (noting that a California state law, which provides copyright protection for unfixed works, “steers clear of any legal or equitable rights created under federal law, and thereby avoids federal preemption under [the Act]”).

[94] Stephen Fishman, The Copyright Handbook: What Every Writer Needs to Know 112 (Ilona Bray ed., 11th ed. 2011) (“California has a law that broadly recognizes rights in unfixed original works of authorship[, while o]ther states don’t have such laws . . . .”) (citation omitted).

[95] Cal. Civ. Code § 980 (West 2012).

[96] Williams v. Weisser, 78 Cal. Rptr. 542, 543 (Ct. App. 1969).

[97] Id.

[98] Id.

[99] Id.

[100] At that time, state copyright law—if any—governed protection for unpublished works unless those works had been specifically registered with the U.S. Copyright Office.  See U.S. Copyright Office, Copyright Basics 6 (2012), available at www.copyright.gov/circs/circ01.pdf (“Under the law in effect before 1978, copyright was secured either on the date a work was published with a copyright notice or on the date of registration if the work was registered in unpublished form.”).

[101] Williams, 78 Cal. Rptr. at 550-51.

[102] Id. at 545-50.  Although the court could not address the statutory causes of action available under the Copyright Act of 1976, which did not exist at that time, its holding is consistent with the still generally accepted exception to the “Works Made for Hire” section of the Act.  The Act defines a “work made for hire” as “a work prepared by an employee within the scope of his or her employment.”  17 U.S.C. § 101 (2006).  The copyright in such works is generally considered to reside with the employer, here the University.  Id. at § 201(b).  However, courts have crafted an exception for professors because, “[a]lthough college and university teachers do academic writing as a part of their employment responsibilities and use their employer’s paper, copier, secretarial staff, and (often) computer facilities in that writing, the universal assumption and practice [is] that (in the absence of an explicit agreement as to who had the right to copyright) the right to copyright such writing belong[s] to the teacher rather than to the college or university.”  Hays v. Sony Corp. of Am., 847 F.2d 412, 416 (7th Cir. 1988) (discussing the historical teacher exception and noting that “[t]he reasons for a presumption against finding academic writings to be work made for hire are as forceful today as they ever were.”) (emphasis added), abrogated on other grounds by Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990).  But see Rochelle Cooper Dreyfuss, The Creative Employee and the Copyright Act of 1976, 54 U. Chi. L. Rev. 590, 599 (1987) (“The dispositive issue is whether production of scholarly material is ‘within the scope of employment,’ that is, a part of the job.  Since scholarship clearly is a factor in decisions regarding tenure, promotion, salary increases, sabbatical leaves, and reduced teaching loads, scholarly works should now belong to universities rather than to faculty members.”).

[103] Williams, 78 Cal. Rptr. at 550-51.

[104] Id. at 543.

[105] Id. (citations omitted).

[106] See id.

[107] Cal. Civ. Code § 980 (West 2012).

[108] Balt. Orioles, Inc. v. Major League Baseball Players Ass’n, 805 F.2d 663, 675 (7th Cir. 1986).

[109] See Charles P. Nash, On the Ownership of Academic Presentations: The Evolution of California Education Code Sections 66450-66452, 35 McGeorge L. Rev. 205, 218 (2004).  Nash provides a fascinating history of the proposal and eventual passing of sections 664050-52 of the California Civil Code, which prohibit the sale of students’ lecture notes, and notes that the bill was originally put forth to “curb unauthorized note taking in California.”  Id. at 206.

[110] Cal. Ed. Code § 66450 (2012).

[111] Id. (emphasis added).

[112] Perez, supra note 10.

[113]Course Note-Taking and Materials, Policy Statement, Univ. Cal. Berkeley, supra note 82, at 1.

[114] Id. at 2.

[115] Id.

[116] Fishman, supra note 94.

[117] See, e.g., Office of University Counsel, Copyright Policy of the University of North Carolina at Chapel Hill, (Jan. 1, 2009), available at http://www.unc.edu/campus/policies/copyright%20policy%2000008319.pdf.

[118] Id. at 14.

[119] See, e.g., 17 U.S.C. § 101 et seq. (2006).

[120] See, e.g., Spencer H. Hardwick, Finalsclub.org Passes Punch, The Harv. Crimson (Feb. 18, 2009), http://www.thecrimson.com/article/2009/2/18/finalscluborg-passes-punch-span-stylefont-weight-boldcorrection/ (discussing a “growing course preparatory Web site . . . which allows students to share notes, create study groups, and blog about lectures and sections,” reporting that one Harvard professor had forced a student to remove a blog concerning his course, and noting that the Harvard University Office of the General Counsel had determined that “a lecture is automatically copyrighted as long as the professor prepared some tangible expression of the content—notes, an outline, a script, a video, or audio recording”); see also Ryan Singel, Lawsuit Claim: Students’ Lecture Notes Infringe on Professor’s Copyright, WIRED (Apr. 4, 2008), http://www.wired.com/threatlevel/ 2008/04/prof-sues-note/.

[121] See Faulkner Press L.L.C. v. Class Notes L.L.C., 756 F. Supp. 2d. 1352, 1355-58 (N.D. Fla. 2010).

[122] See id. at 1356, 1359.

[123] The professor was joined in this action by the company that published his textbooks.  See id. at 1355.

[124] These te
xtbooks were required reading for the course.  See id. at 1361 n.1.

[125] Id. at 1355.

[126] Faulkner Press, 756 F. Supp. 2d at 1356.  The professor also brought claims against the note-selling company for improperly using information in the professor’s textbooks under the Digital Millennium Copyright Act. However, the Northern District of Florida determined that the act of taking notes during a professor’s class did not violate the Act.  See id. at 1359-60.

[127] Id. at 1358-59.

[128] Id. at 1359.

[129] Chegg.com Terms of Use, Notehall (last updated Oct. 22, 2012), http://www.notehall.com/index/termsofuse.

[130] Id.

[131] Faulkner Press, 756 F. Supp. 2d at 1358-59.

[132] See discussion supra Part II.A.

[133] See Williams v. Weisser, 78 Cal. Rptr. 542, 545 n.4 (Ct. App. 1969).

[134] See discussion supra Part III.A.

[135] See discussion supra Part III.B.

[136] L. Batlin & Son, Inc. v. Snyder, 536 F.2d 487, 490 (2d Cir. 1976) (“The test of originality is concededly one with a low threshold . . . .”) (citing Alfred Bell & Co. v. Catalda Fine Arts, Inc., 191 F.2d 100, 103 (2d Cir. 1951)).

[137] See 17 U.S.C. § 101 (2006).

[138] See 17 U.S.C. § 103(b); Feist Publ’n, Inc. v. Rural Tel. Co., 499 U.S. 342, 355-59 (1991) (discussing the requirements for a compilation that is copyrightable).

[139] Feist, 499 U.S. at 354 (stating that fixation and originality are the two fundamental requirements for a copyright).

[140] See Cal. Educ. Code § 66450 (West 2012).

[141] See Cal. Civ. Code § 980(a)(1) (West 2012); Cal. Educ. Code § 66450(a) (prohibiting the use of handwritten class notes for any commercial purpose).

[142] Int’l News Serv. v. Assoc. Press, 248 U.S. 215, 250 (1918) (Brandeis, J., dissenting).

[143] Id. at 231 (majority opinion).

[144] Id. at 245-46.

[145] Id. at 250 (Brandeis, J., dissenting).

[146] Id.

[147] See, e.g., Course Note-Taking and Materials, Policy Statement, Univ. Cal. Berkeley, supra note 82, at 2.

 

 

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by Stephanie Chau*

I.  Introduction

[1]        Bulletin boards and pushpins are archaic.  Yet, each day represents a new paradigm for the technologically savvy.  Innovators pair old concepts with new functionalities and technology, often achieving groundbreaking results.  Digital counterparts for Post-It notes emerged for computers and other wireless devices.[1]  Other examples abound.[2]  Thus, it is no surprise that pins and boards also have new meaning in the digital age.  Credit is due to the founders of Pinterest, a nascent social networking site with a devoted following, for modernizing the pin.[3]  As a newer social networking site, Pinterest has experienced unparalleled growth after its inception only a few years ago.[4]  Like all social networking sites, Pinterest thrives in the presence of societal materialism, narcissism, and consumerism.  Its subsequent exponential growth is the byproduct of a high-functioning network effect.[5]  However, Pinterest has yet to monetize[6] and currently operates in a contentious area of the law.  As a result, Pinterest appears to be on the cusp of requiring internal analysis of intellectual property law and its own business model.[7]  The case study of Pinterest illustrates the growing pains of a budding start-up company operating, and perhaps profiting, where Internet copyright law lags.  It is particularly apposite that Pinterest recently hired Michael Yang, Google’s former deputy general counsel, as head of its legal department.[8]  This Article argues that Pinterest’s continued ascent and perhaps even its continued existence hinges on Michael Yang, who must judiciously contour Pinterest’s intellectual property strategy.[9]  Pinterest should not only address impending trademark and copyright infringement issues, but also secure additional intellectual property protections and diversify its business.

[2]        This Article explores the possible legal issues Yang will face in his new capacity.  Part II introduces the concept behind Pinterest, Part III comments on the legal hazards currently looming given Pinterest’s business strategy, and Part IV offers insight on how Pinterest can leverage its intellectual property rights.

 

II.  What is Pinterest and Why Do We Have It?

[3]        Successful Internet companies bring greater public access to previously limited resources, including libraries, archives, government records, goods, and knowledge.[10]  Google-branded services permeate the web, yet freshman companies also compete for a share in the market.[11]  Pinterest is one such company in the social networking arena.  Pinterest is valued at an estimated $7.7 billion,[12] joining the ranks of competitors such as Facebook at $104 billion,[13] Twitter at $8 billion,[14] LinkedIn at $10 billion,[15] and Instagram at $1 billion.[16]  Led by Facebook, social networking accounted for 16.6 percent of all time spent online in the United States in 2011 and will likely become the top online activity in 2012.[17]  Pinterest’s traffic is steadily increasing—positioning the site as the third most popular media platform in the United States.[18]  Its appeal to college-educated females between the ages of twenty-five and forty-four offers advertisers a demographic, which not only logs an average of eighty-nine minutes a month—far exceeding that of Twitter’s demographic—but is also ready and willing to spend. [19]  In fact, ComScore’s “State of the U.S. Internet” report found that Pinterest users spend more money, buy more items, and conduct more transactions than any other demographic in the social network market.[20]

[4]        Launched in March 2010, “Pinterest is a virtual pin board;” it is a pin board-style photo-sharing social website that allows users to create and manage theme-based image collections of events, interests, and hobbies.[21]  Users cannot only browse their friends’ pin boards for inspiration, but also those of complete strangers.[22]  Users can upload images known as ‘pins,’ save favorites, make comments, and ‘share’ or ‘like’ photos.[23]  Pinterest encourages users to “plan their weddings, decorate their homes, and share their favorite recipes.”[24]  For that reason, it comes as no surprise that Pinterest is a female-centric site.[25]  As of 2012, eighty-three percent of its United States users were women.[26]  Nevertheless, just as Facebook moved beyond its college student niche, Pinterest may soon find a new, more balanced group of users once it fine-tunes its strategic approach.

[5]        Social networking sites flourish in the face of a narcissistic society.  The self-admiration movement gained traction in the 1970s, followed by an explosion in the 1980s and 1990s[27] when unbridled self-indulgence and self-expression grew into “a more extraverted, shallow, and materialistic form of narcissism.”[28]  Trends toward self-presentation evolved with cultural norms and new technology, propagated by narcissistic behavior amidst the masses, the presence of Internet social networking sites, and celebrity culture.[29]  Scholars attribute the epidemic to indulgent parenting, excessive praise, obsession with rampant celebrity narcissism, and the pursuit of fame.[30]  Although narcissists and social networking groups are not coextensive, the two are not mutually exclusive.  Social networking sites revel in these narcissistic tendencies and parlay the user’s desire for validation and admiration into an entire platform.  A vicious cycle ensues whereby these sites reinforce narcissistic behavior by rewarding the user with more connections or comments, and as those narcissists connect with other narcissists, the behavior mushrooms quid pro quo.[31]

[6]        The United States is also founded on the principles of materialism and consumerism, the natural descendants of free market capitalism, which encourage individuals to endeavor to increase one’s wealth.[32]  As a result, Americans have an appetite for purchasing goods that they desire but do not need.[33]  Retailers, particularly in the luxury goods market, and social media companies are eager to exploit this consumer extravagance, a lavishness that might otherwise be characterized as an Achilles’ heel.  Much like on any other social networking service, brands already have a presence on Pinterest because consumers post and share photos of the product, the logo, or other marketing manifestations.  However, controlling consumer sentiment can be a challenge as cease-and-desist letters are virtually ineffective and can cast negative light on the company.[34]  On the other hand, given that retailers are a welcome presence on Pinterest, Pinterest has a distinct competitive advantage over Facebook and Twitter.[35]

 

III.  Musings on the Pinterest Business Model

[7]        Pinterest’s success depends largely on what scholars call “the network effect.”  The network effect is the phenomenon by which the utility of a good or service increases as the number of consumers multiplies, and as a result, the monetary value of participation on a network grows exponentially as well.[36]  At one end of the network continuum are actual networks, which are communication systems, such as telephones and fax machines, “whose entire value lies in facilitating interactions” between the customer and the product owners.[37]  Pinterest is an actual network and if it can overcome diseconomies of scale and manage tipping,[38] its network will become a tremendous asset.  Given the immense growth of Pinterest’s network, Pinterest is now at a crossroads.  There are two areas where its business model is deficient and in need of attention by Pinterest’s top executives and general counsel: monetization strategy and copyright issues.  Two additional contentious areas, trademark[39] and privacy[40] issues, are beyond the scope of this article.

A.  Pinterest Has No Monetization Strategy

[8]        Initially, Pinterest must solidify a monetization strategy before it can grow.  Although Pinterest’s monetization potential is promising, the company has no formalized strategy as of yet.[41]  On its website, Pinterest flatly asserts “making money isn’t our top priority right now.”[42]  Pinterest is currently “focused on growing Pinterest and making it more valuable.”[43]  While these objectives are laudable, Pinterest already has an extensive following.[44]  Dependence on outside investment from entrepreneurs and venture capitalists is not sustainable in the long term and Pinterest must cultivate ways to bring in revenue.

[9]        Pinterest’s swift ascent as a major social networking site suggests that Pinterest is unique and has greater potential than even beyond the likes of Facebook and Twitter.  A plethora of theories might explain Pinterest’s success.  Conceivably, Pinterest’s business model is more adaptable to growth, Pinterest is on a quicker path to monetization than its predecessors, and Pinterest’s entry into the market perfectly coincided with consumer interests.  Such rapid growth allows or possibly even demands Pinterest to monetize sooner.  Regardless, Pinterest will require resources to stay in vogue and remain competitive with social networking sites that have already monetized their businesses.[45]

[10]      As consumer attention shifts away from television, radio, magazines, and newspapers, $200 billion in advertising revenues will shift online.[46]  Pinterest figures to fight for these advertising revenues with the allure of its primary demographic and its pool of user data.  To illustrate, women spend more time social networking than men worldwide.[47]  Pinterest users spend more time on the site per visit (16 minutes) than on Facebook (12 minutes),[48] and Pinterest users spend more money than others.[49]  Accordingly, Pinterest must carefully construct a strategy to leverage its time with this captive audience.  In recognition of Pinterest’s reach, retailer Bergdorf Goodman, online crafts marketplace known as Etsy, and others have already incorporated Pinterest into their marketing strategies.[50]

[11]      Google monetizes its services using behavioral advertising, thereby analyzing user profiles to present users with advertisements tailored to the words they search.[51]  On Facebook, users volunteer vast amounts of personal data and generate data through their own behavior that in turn, is used to track and tailor advertisements.[52]  Harvesting data on users’ interests and online activities is tantamount to “an Internet genome project,” which is invaluable to advertisers.[53]  However, Google and Facebook serve different purposes and as a result, there exists a demarcation in their approaches to online advertising: Google operates under the theory that human behavior can be reduced to an algorithmic equation whereas Facebook relies on social play and the power of sharing.[54]  Pinterest treats the approaches as symbiotic rather than mutually exclusive.

[12]      Like Google and Facebook, Pinterest has access to vast amounts of consumer information.[55]  However, Pinterest focuses less on offering a breadth of services because the entire premise of Pinterest is to share images that reflect a user’s specific interests.  Thus, activity on the site arguably reflects user and purchaser preferences far better than either Google or Facebook, which are used to accomplish diverse objectives.  This detail, coupled with the fact that retailers can advertise on Pinterest with minimal consumer disgruntlement, positions Pinterest well into the retailer strategies.

[13]      In addition to advertisements, affiliate links can drive monetization.  Affiliate links are a form of affiliate marketing, which rewards affiliates for the quantity of web traffic attributed to its marketing efforts.[56]  Although many observe that Pinterest is the perfect forum for an affiliate marketer given Pinterest’s high conversion rates,[57] the stigma of affiliate links makes this option less than ideal.  Recently, Pinterest quietly monetized its pinners with affiliate links through a partnership with Skimlinks[58] whereby Pinterest received a percentage of the revenue every time a pinner clicked to make a purchase from an e-commerce site.[59]  The response from the public was not favorable and Pinterest came under heavy fire for engaging in a covert scheme, which led to the decision to quickly end the relationship.[60]

[14]      Alternatively, Pinterest executives could decide to forgo innovation[61] in a monetization strategy completely and instead sell the business to the highest buyer.  To achieve the best valuation, Pinterest should focus on network growth and improved functionality.  The fruits of Pinterest’s focused efforts would then translate to a competitive advantage for the purchasing company.  In doing so, Pinterest could avoid the copyright issue, although that course of action might appear cowardly.  Pursuant to this hypothetical, corporate executives and lawyers in the industry ought to take notice and engage in their own monetization and copyright analyses of Pinterest.

[15]      Pinterest is currently not making money and thus the first priority is to implement a sound strategy that will enable the company to grow.  Not only will operating at a profit enable Pinterest to further develop the site and new functionalities, but Pinterest may be able to fend off competitors as well.  Although advertisements may displease users, albeit with perhaps less severity than on other sites, affiliate marketing, if not disclosed, intimates secrecy.  Pinterest may also elect to charge users for each click or sell memberships to exclusive material.  Indeed, Pinterest executives have the opportunity to formulate an innovative monetization strategy.  Although abstract business strategies are generally not patentable,[62] Pinterest can develop processes, systems, and methodologies to analyze and synthesize the data it collects, which can be protected as patentable subject matter or as a trade secret.  Part IV will discuss a few additional monetization strategies.

 B.  Pinterest Leaves Users (and Itself) Exposed to Copyright Liability

  1.  User Liability

[16]      Images are most likely copyrightable subject matter under 17 U.S.C. § 102(a)(5) as pictorial, graphic, or sculptural works.[63]  In order for a plaintiff to establish ownership of a valid copyright, he or she must show an original work of authorship fixed in a tangible medium of expression.[64]

[17]      First, the standard of originality is quite low, and courts interpret the statute to require only a minimal degree of creativity original to the author.[65]  Copyright also protects photographs, which enjoy thin protection.[66]  Pursuant to this low threshold, a court will likely consider many of the images sufficiently original to the author, who may or may not be the pinner.  The second prong demands fixation, which requires that the matter be “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated.”[67]  Given that the image must already exist in digital form for the Pinterest user to upload, pin, or repin the image, it seems unlikely that the fixation hurdle will be significant.  Moreover, Pinterest pins remain on boards indefinitely unless removed by the user or if the link is broken.

[18]      When Pinterest users upload an image or pin an existing image, there is a definite probability that they do not own the copyright to that image.  Suffice it to say that, under the current business model, even absent mens rea, Pinterest users are arguably engaging in a form of copyright infringement for which they might be liable for violating the copyright holder’s reproduction, derivative work, and distribution rights, or perhaps even public display rights.[68]  Whereas most of the content on Facebook and Twitter is user-generated, a substantial portion of Pinterest content comes from external links.

[19]      Many copyright holders may not realize that they own a copyright and may have no intention of enforcing their rights.  Nevertheless, Pinterest must address the concerns of users who do not want to face liability for using the site.  Moreover, business leaders should be proactive, not reactive and it would behoove Pinterest to think accordingly.  Pinterest ought to preemptively plan for a potential copyright infringement claim.

[20]      Recently, Pinterest took active steps to alleviate scrutiny on the copyright front.  For example, Pinterest began marshalling attribution and direct links to sources, such as Flickr in May 2012.[69]  Although these enhancements may allay copyright holders from pursuing litigation, this does not weaken the infringement argument.  Although attribution is not currently part of copyright law, perhaps courts should consider attribution in its fair use analysis.  With attribution, copyright holders get free publicity and they arguably have no incentive to bring copyright infringement suits.  However, attribution may not suffice as fair use given that it does not protect the earning potential of the image.

[21]      Pinterest also provides advice for website owners who do not want their website content pinned.  Websites can insert a small piece of code to the head of any page on their site so when a user tries to pin from the site, a customizable error message will appear.[70]  Nevertheless, Pinterest users can maneuver around this code in a multitude of ways.  Even absent technical savvy, users can save the images to their own library, by screen capturing the image for instance, or use a non-Pinterest website as an unsuspecting intermediary between the original site and Pinterest.  Website owners who use this code represent a population who does in fact care about copyright liability.  Pinterest should therefore be attuned to their concerns as they can wreak havoc on Pinterest users by bringing infringement claims or by raising negative publicity for Pinterest.

[22]      The fair use defense might be applicable, but courts often apply the defense on a case-by-case basis, evaluating “(1) the purpose and character of the use . . . (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) effect of the use upon the potential market for or value of the copyrighted work.”[71]  Pinterest boards may qualify under fair use because they are likely transformative: the collections of images combined with captions serve a different purpose than the original, even where they contain entire images.[72]  Factors weighing against Pinterest’s fair use include: the high quality of the images, varying levels of commercial use (e.g., corporate pages compared with bloggers), and potential cannibalization of the market for the copyrighted images.[73]

[23]      However, courts’ current fair use analyses are blind to the copyright holder’s involvement as well as attribution by the infringer, as mentioned earlier.  Notably, numerous sites, including profit-driven news sites and retailers, encourage visitors to pin their copyrighted images via a “Pin It” button, which invites readers to pin the site’s work onto Pinterest.[74]  Where the website recommends that a visitor share the image on Pinterest, and assuming the website is in fact the copyright holder, the visitor is persuasively reasonable in believing the copyright owner will not sue for copyright infringement over use of that image.  Applying public policy considerations, a new fair use element might be appropriate where if a copyright owner provides the “Pin It” button, either himself or through his agents, he should be barred from subsequently bringing an infringement suit for use of that image.

[24]      Analysis of the foregoing (the “Pin It” button or any comparable form of encouragement by the copyright holder) also bears on the other four elements.  Like attribution, the “Pin It” button does not protect the earning potential of the image, but it may boost the earning potential of the underlying product itself.  Instead of cannibalizing the market, the infringement may effectively improve sales of the product.  For instance, a pinned photograph of an article of clothing might help a retailer-copyright holder garner sales of that article, whereas an image of décor or food might have no impact on marketability to the copyright holder.  Use of the image on Pinterest can therefore affect two separate markets: the market for the image and the market for the product.  Current fair use analysis only considers the market for the image.  Although potentially too speculative, perhaps courts could also consider the effect on the market for the product.  However, any consideration of the market for the product may undermine Pinterest’s “no self-promotion” policy as well as detract attention from the predominant purpose of copyright law, which is to encourage the creation of original works.  In the alternative, if an image pinned through the “Pin It” button is not fair use, arguably the courts should find that a copyright holder who puts a “Pin It” button on his website grants the pinner either a limited form of consent or a nonexclusive license, which need not be in writing.[75]  By finding consent or a license, a court could circumvent an upset of the law on copyright infringement and fair use, at least with respect to the “Pin It” Button.

[25]      Countervailing public policy might also support a Pinterest user’s First Amendment argument.[76]  Although Pinterest users may elect to draw upon their freedom of speech guarantees as a policy matter, the First Amendment will not likely be a persuasive argument under case law.  After Eldred v. Ashcroft[77] and Harper & Row, Publishers, Inc. v. Nation Enterprises,[78] the traditional contours are constitutional because proper limits, such as the fair use doctrine and idea-expression dichotomy, are already in place.

[26]      Finally, as always, the relevant statute of limitations is an important consideration.  Copyright holders will have a claim until the statute of limitations lapses.  That period will depend on the facts of an individual case.  Perhaps there is an argument for shortening the statute of limitations with respect to claiming copyright infringement on social networking sites.  Public policies of judicial efficiency and certainty favor such a change, and given the pervasiveness of Pinterest-type file sharing, the court dockets could bottleneck pursuant to a Pinterest user losing.  It is within the province of the legislature to consider such changes, but in the meantime, Pinterest users are not immune to allegations of copyright infringement.  Whether a court will rule in their favor remains to be seen.

[27]      Many commentators posit that Pinterest’s hiring of Michael Yang as head of its legal department signals just how critical resolving the copyright question is to the company’s longevity.[79]  In the wake of Yang’s hire, Pinterest will likely discuss the ramifications of its current business model to the user and the company itself, perhaps resulting in the modification of its cornerstone image-sharing business.

 2.  Pinterest Liability

[28]      In addition to claims against its users for direct infringement, copyright holders may also assert a secondary liability claim against Pinterest.  Contributory liability applies to “one who, with knowledge of the infringing activity, induces or causes or materially contributes” to another’s infringement.[80]  In Sony Corporation of America v. Universal City Studios, Inc., the Court held a product “need merely be capable of substantial noninfringing uses” to avoid contributory liability.[81]  Given that Pinterest is capable of substantial noninfringing uses, showing that Pinterest had knowledge is not a foregone conclusion.  For example, Pinterest users may legally own the content they are uploading, or may have permission from the owner to use the content.

[29]      A new inducement doctrine may be more helpful.  In MGM Studios Inc. v. Grokster, Ltd., the Court held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”[82]  Given that Pinterest does not ask users to consider permissions before each pin, its business model is distinguishable from that of Facebook.  Moreover, Facebook encourages sharing personal experiences and photos whereas Pinterest encourages sharing content created by others.  Just as Grokster distributed free software that allowed users to share electronic files through peer-to-peer networks, Pinterest provides an interface for users to freely share images.[83]  Although there are provisions protecting the online service provider (“OSP”),[84] Pinterest must tread carefully to avoid crossing the inducement threshold.

[30]      The Digital Millennium Copyright Act (“DMCA”) broadened copyright owners’ rights beyond the Sony holding.[85]  Title II of the DMCA contains the Online Service Provider Safe Harbor provisions.[86]  These provisions insulate OSPs from liability for transmitting, routing, storing, caching, or linking to unauthorized content if the OSP meets specific conditions.[87]  It must also meet the following threshold conditions: (1) adopting, implementing, and informing subscribers of policy for providing for termination of users who are repeat copyright infringers; (2) adopting standard technical measures used by copyright owners to identify and protect copyrighted works; and (3) designating an agent to receive notification of claimed infringement from copyright owners and register that agent with the Copyright Office.[88]

[31]      Pinterest explicitly addresses the DMCA on its website and describes how Pinterest complies with these provisions.[89]  With a prominent Copyright and Trademark Section, Pinterest seeks not only to educate users, but also attempts to protect itself in recognition of the potential for copyright infringement.  So long as Pinterest meets the DMCA requirements, Pinterest is only vulnerable to consumer and industry backlash.  Conversely, Pinterest’s policy leaves users largely unprotected.

 

IV.  Shaping Pinterest’s Future

 A.  If Copyright Holders Win a Case Against a Pinterest User or Pinterest

[32]      If Pinterest or its users prevail against a copyright holder in a lawsuit, Pinterest will likely continue business as usual, but copyright law as we know it may forever change.  This is especially true if a court decides to hold no infringement or otherwise if pins fall within fair use.  Such a decision may significantly weaken copyright law, but given the pervasiveness of pinning and file sharing on the Internet, the law may in fact head in that direction.  For this Article, however, only the alternative is considered.

[33]      If a Pinterest user loses a case against a copyright holder, the floodgates will open for other copyright holders to pursue similar claims.  Disgruntled copyright holders will feel betrayed by the company.  Users may eschew the system.  It will take a complete restructuring of the core business for Pinterest to recover.  Timing compounds the pressure on Yang.  If a court rules before Pinterest can monetize, Pinterest may lose the opportunity to capitalize on the network it so famously achieved in the last two years.

[34]      One incremental change that Pinterest could implement is to start asking the user to consider permissions before each pin.  Facebook employs such a method and users can still pin at their own peril.[90]  A warning would put users on notice and hopefully deter copyright infringement, but alone it will not be enough to save Pinterest or its users if a court does indeed rule that pinning constitutes infringement.  A more drastic measure includes asking the source for permissions to pin or repin.  However, this solution would likely be overly burdensome and curb use on the site.  Another resolution would be to contract with certain sites to enable Pinterest users to pin from their sites wholly, not just for one pin.  However, website owners might ask for remuneration in exchange for allowing their content on the sites.  This solution also comes with certain caveats.  For example, limiting the available sites undermines the purpose of Pinterest.  The ability to share essentially everything is paramount to Pinterest’s appeal.  Moreover, Pinterest executives would need to modify its policy against self-promotion.

[35]      There are also endless ways in which Pinterest could completely revamp or reinvent the business.  For instance, Pinterest could become a consumer research company.  Pinterest could collect, synthesize and sell data on the newest trends to companies without cluttering its websites with the types of advertisements and affiliate links that consumers disdain.  Given that Pinterest already has vast amounts of data at its disposal, all Pinterest would need to do is modify the user agreement.  Educating users would be crucial to this strategy and users will only be less hesitant if they know Pinterest is not farming out individual information.  This approach exploits the “Internet genome project” as referenced earlier in the Article.  Still, entering the arena of consumer research presents challenges for Pinterest.  Pinterest would be subject to privacy concerns and public backlash if Pinterest sells data exceeding the threshold granularity that consumers are reasonably willing to provide.

[36]      If Pinterest loses against a copyright holder for secondary liability it should take the same recourse as it would in the case where a user loses.  The impact of such a ruling to Pinterest again intensifies if Pinterest does not monetize quickly enough.  If Pinterest remains indebted to venture capitalists and a court rules for Pinterest to pay a judgment, Pinterest will be in danger of losing those backers and the company will have an even bleaker balance sheet.  Additionally, if Pinterest has an interest in going public, regardless of its future business strategy, it is true that underwriters, the financial community, and the public will expect Pinterest to possess substantial tangible assets as well as intangible assets, such as intellectual property and goodwill.  However, these individuals will find a highly leveraged company in or anticipating litigation even less attractive.

[37]      If Pinterest loses a case for violating the DMCA, Pinterest can cure the situation more easily.  Put simply, Pinterest would need to adhere to its policies set forth in its Trademark & Copyright Section.[91]  If a court finds Pinterest in violation of the DMCA and nothing else, although a strategic change might bolster success in the future, Pinterest should maintain current operations and begin to pursue other markets and consumer bases as suggested in remainder of this Article.

 B.  Brand Management

[38]      Pinterest has a registered service mark.[92]  Therefore, Pinterest should manage its brand.  Pinterest’s brand strategy should include comprehensive analysis of its graphics, marketing efforts, and consumer satisfaction index.  Using its official badge and Bello Script font logo developed in 2011, Pinterest could market and sell logo products, thereby gaining additional protection under trademark, trade dress, and design patent law.[93]  As evidenced by Pinterest’s office, Pinterest already produces a fair amount of swag.[94]  Branding the office space can help corral support and interest in the product, but there is also a market for branded products.  Pursuant to this strategy, Pinterest should consider additional trademarks for related words such as “Pinterested” and “Pinteresting.”  Although branded products should probably be a secondary source of income, Pinterest should at least consider the production costs and benefits.

[39]      With proper brand management, Pinterest could seamlessly enter new markets, including e-commerce.  For instance, Pinterest can develop a Pinterest store and sell special edition items for its top pinners.  Although Pinterest discourages self-promotion, Pinterest itself can promote by building partnerships and its brand.  In exchange for Pinterest’s endorsement, companies or users can compensate Pinterest.  In contrast to affiliate links and advertising, Pinterest’s endorsement would be direct and effectively a seal of approval.  However, as a technology company, Pinterest would need to develop the requisite credibility and competency.  There would also be an inherent risk of pinners manipulating the pins to become a top pinner.

[40]      Once Pinterest enters into e-commerce, the natural progression is to invade mobile commerce.  During the three-month period ending in April 2012, almost nineteen million Americans, or 17.4% of American[95] smartphone owners, used their smartphone to purchase consumer goods.  Of these, almost one in three purchasers used their device to buy clothing or accessories, 23.5% purchased tickets, 22.3% bought electronics or household appliances, 21.2% purchased meals, and 20.2% bought daily deals or discount coupons.[96]  On August 14, 2012, Pinterest rolled out new applications for Android smartphones and the iPad in addition to updating its year-old iPhone application with improved functionality.[97]  Indeed, Pinterest should continue to stay abreast of mobile commerce trends as it provides yet another medium to reach users.  Correspondingly, Pinterest should promptly file patents and claim patent protection or other applicable intellectual property protection for any new inventions or improvements.

C.  International Growth

[41]      Finally, although the United States still represents enormous potential for Pinterest,[98] Pinterest will reach a saturation point domestically at some point.  Therefore, Pinterest should continue its growth across the globe.  Between May 2011 and January 2012, Germany drew 67,000 individual visitors, an increase of over 2956 percent.[99]  Spain came in a close second with 62,000 individuals, for an increase of 1,348 percent.[100]  The United Kingdom had the largest market with 245,000 unique visitors in January 2012.[101]  In addition to English, Pinterest has Spanish and Portuguese language sites.[102]  On August 24, 2012, Pinterest rolled out its German and Dutch sites.[103]  Aptly, Pinterest seems attuned to consumer needs.  The integration of these two new languages is consistent with the consumer trends in European usage reported earlier in the year.[104]  With some tweaks for cultural differences, Internet companies often find additional success in international markets[105] and many of the same growth strategies domestically can translate to gains in an international arena.

 

V.  Conclusion

[42]      Pinterest capitalizes on societal narcissism, materialism, and consumerism, but its strategy has not paid dividends yet.  Pinterest must act quickly to monetize its growing network, not only to become self-reliant and fund R&D for future growth, but also to preempt future lawsuits that could spell the end for Pinterest.  Although Pinterest faces potential trademark and privacy concerns, its greatest challenge is in the area of copyright.  Executives and lawyers across the industry ought to consider Pinterest a “game changer” in this respect.  The courts have not yet ruled on whether the type of file sharing Pinterest users engage in will incur liability.  If the courts find no liability, a new paradigm in copyright liability will emerge and Pinterest will be there to lead the charge.  However, if copyright holders are successful in showing either direct infringement by Pinterest users or secondary liability by Pinterest, recovery will be extremely costly, not to mention difficult from a public relations perspective.  Not only will Pinterest need to revamp its business model, but its debt will only rise.  Regardless, Pinterest should profit from the assets it does have, namely its brand and its network.  Pinterest should obtain intellectual property protection for these assets to help penetrate other markets, such as commerce and research, both domestically and internationally.

[43]      With bated breath, the world waits.  Will the copyright landscape change?  Will Pinterest reinvent the pin again?  Will Pinterest become a stalwart by resolving the copyright question or will it fade into obscurity like so many other Internet start-ups?  We already know Pinterest is no ordinary start-up.  Indeed, Pinterest experienced unprecedented growth yet its impact on society remains to be seen.  While Ben Silbermann is Pinterest’s Chief Executive Officer and will determine the company’s strategic direction,[106] it will be Yang who advises Pinterest as the company struggles to overcome its legal woes.  Batter’s up, Yang, and the clock is ticking.

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