Past JLTP Abstracts - Volume 2008 Issue 2


Exporting Controversy? Reactions to the Copyright Provisions of the US-Australia Free Trade Agreement: Lessons for US Trade Policy
by Robert Burrell and Kimberlee Weatherall

For those interested in Australian copyright law, February 8, 2004 was a watershed date. On that day, the United States and Australia concluded a Free Trade Agreement (the AUSFTA) that contains a large and detailed intellectual property chapter, the bulk of which relates to copyright. Australian copyright law has now gone through three waves of amendment to bring it into compliance with the AUSFTA, with the final stage of implementation only being completed in December 2006. But while momentous in Australia, the AUSFTA seems to have gone largely unnoticed in US copyright circles. One consequence of the AUSFTA that may not be widely appreciated in the US is the political controversy caused by the intellectual property chapter of the agreement. Some of this controversy was caused by concerns over the effects of the provisions of the AUSFTA relating to pharmaceutical patents, concerns that were bound up with broader disquiet about the potential impact of the AUSFTA on the operation of Australia’s Pharmaceutical Benefits Scheme. Much of the controversy, however, and the issues that attracted the most sustained attention, related to the copyright provisions of the agreement. One limited aim of this article is to provide an overview of the effects of the intellectual property chapter of the AUSFTA and to explain to an American audience why such a broad spectrum of Australian opinion found the provisions of the agreement relating to copyright, in particular, so troubling.

Much more importantly, however, we demonstrate that the Australian reaction to the copyright provisions of the AUSFTA raises questions about the wisdom of recent US trade strategy. We believe that, leaving to one side whether the provisions are good for Australia or ‘good copyright policy’, the current strategy is irrational, even when judged solely against United States interests. We demonstrate that these provisions contributed significantly to an increase in anti-American sentiment in Australia – an effect diametrically opposed to the stated aim of using the agreement to foster good relations with a long-standing ally and partner. More specifically, we argue that the attitude with which the United States approached its negotiations with Australia over copyright, and its apparent disregard for Australian traditions, helped generate a perception of United States unilateralism, double standards and high-handed ignorance. As a consequence, it may be less likely that Australia’s political class and the Australian public generally will be prepared to support the United States’ agenda on the international stage. In short, we demonstrate that the United States’ approach to intellectual property in bilateral free trade agreements is damaging the United States’ broader political interests in entering into such agreements. This must be counted as a significant cost.

The question thus becomes whether the agreement secures sufficient benefits, particularly economic benefits, to offset the costs we identify. It would be easy to assume from the text of the copyright provisions that the United States had made significant gains: the text is, after all, almost entirely drafted by the United States. Through a detailed analysis of the changes wrought to Australian copyright law, however, we demonstrate that in the copyright sphere, the gains produced by the agreement were limited at best. If Australia is any guide, current United States strategy (a strategy also reflected in agreements signed with a range of other countries) will not secure substantive harmonisation of copyright, will not build support for future multilateralisation of the United States’ preferred copyright standards, and will produce only a limited increase in returns for copyright owners. Moreover, the small increase in protection that has been secured has to be weighed against other costs for copyright owners. Weighing even more emphatically against current strategy is the fact that a very different form of agreement on copyright could have secured the same benefits, without incurring either the costs for copyright owners or the broader political costs we identify. Thus, whilst we do not provide a definitive answer to the question of whether the benefits secured by the AUSFTA outweigh its costs, we do show, in one key area, that current policy has incurred significant and unnecessary costs for only limited gains. We believe that this lends a new dimension to the argument that there needs to be a fundamental reassessment of United States trade policy. At the very least there needs to be a much more sophisticated cost-benefit analysis of the likely impact of agreements on partner countries. This requires a willingness to engage with the details. It is primarily for this reason that we describe and critique the substantive provisions of the intellectual property chapter of the AUSFTA and the Australian implementing legislation at some length in the course of this article.

Portraying a Branded World
by Daniel E. Newman

Trademark owners boost revenue via licensing and branding arrangements. Consumers proudly wear clothing prominently displaying brands. But the prevalence of brand goods creates the potential of propertizing personal space. Content owners and distributors often recognize property interests in the display of trademarks, regardless of whether there are legal foundations for doing so.

What happens when the goal is to create accurate representations of reality? Documentary production is embroiled in negotiations over the use of trademarks and copyrights in order to accurately portray reality. Reality television, and interviews on the street often use pixilation to obscure logos on clothing. Online user-created content opens the possibility of infringement actions brought against people trying to accurately portray their personal reality.

Proponents of law and economics, or of public authorship, fail to adequately address the dynamics of how brand merchandise is sold and used. The former argue trademark owners have a right to the value accruing to the product of their labor, and that consumer confusion will arise if owners are not given control over use of their marks. The latter argue that the public imbues trademarks with social meaning that enables the marks to become valuable. Therefore, people should be free to use any mark imbued with sufficient public authorship.

This Note analyzes how people use trademarks and examines how the legal framework can accommodate the increased push to monetize trademark use and the public interest in creating social meaning by sharing images of real life.

Getting Under Your Skin -- Literally: RFID in the Employment Context
by Marisa Anne Pagnattaro

Consider this: nearly 12.4 million people in Shenzhen, China, will have residency cards fitted with computer chips containing their name, address, work history, educational background, religion, ethnicity, police record, medical insurance status, and reproductive history. The Chinese government also has ordered all large cities to issue such high-tech residency cards to approximately 150 million people who now live in a city but have not yet acquired permanent residency. What are these computer chips? They are radio frequency identification ("RFID") chips, an automated data-capture technology system that can be used to identify, track and store information.

RFID chips can also be used to track employees. They can be implanted under an employee's skin, worn in an employee's clothing, or attached to an identification badge. The most widespread workplace use of RFID technology is chip-embedded staff ID badges, which are primarily used for controlled access to an employer's premises. Even this use, however, can be controversial if the data collected is used to discipline employees, as opposed to merely controlling door locks. The potential number of workplace uses--not to mention off-site uses--is limited only by an employer's lack of imagination. Once the RFID is in an employee's badge or embedded under her skin, the employer can collect data regarding the employee's location and movement by using strategically placed readers. This data then can be entered into a database to learn more about the employee's whereabouts.

This article explores the legal ramifications of the use of RFID by employers to track employees. Part II presents a brief history of RFID, including novel and interesting uses. This section also discusses security and safety concerns regarding the use of this technology. Part III analyzes current and proposed law in the United States regulating RFID. Part IV details legal regulations in the international context, including Canada, the European Union, and Australia. Lastly, Part V proposes recommendations about the use and legal regulation of RFID in the workplace.

Intellectual Property and Information Technology Due Diligence in Mergers and Acquisitions
Martin B. Robins

Few decisions have greater consequences for a business than the decision whether to acquire another business. In today’s world, one of the key determinants of a business’ value is the value of its intellectual property (IP) and information technology (IT) .

However, with relatively rare exceptions, the due diligence (DD) process by which businesses assess whether an acquisition candidate is worthy of their time and money, does not emphasize such matters. Traditional matters such as minute books, suit papers, credit agreements and accounting work papers are emphasized . Even when IP is addressed, the focus is often on procedural matters such as the timeliness of filings and review of suit papers in pending infringement disputes as opposed to the substance of the IP and the process by which it is developed and used. This article is intended to explain why additional substantive attention is warranted as a result of recent changes in the legal and technological environments and the diverted focus of many practitioners, and how it can best be provided in actual transactions.

The objective is to provide a conceptual framework to supplement and guide the myriad of mechanical steps which are required in this process, as well as a conceptual framework to guide the development of new steps which will be needed to accommodate the inevitable changes which will occur in the legal and technological environments. Hopefully, this discussion will be helpful not only to the practicing bar, but also to the bench and commentators striving to develop standards of conduct and liability to govern the disputes which will inevitably arise to an increasing extent from IP and IT issues in M&A transactions.


"Deemed Distribution": How Talking About Music Can Violate Copyright Law
by Peter Bartoszek

Imagine that you are having a conversation with a friend in your home about the latest album by your favorite artist. You tell your friend that you have the album, show her the album case, and the friend thinks to herself that she would like to have it. You leave the room for a moment and then return. The next day, you find in your mailbox a complaint filed in federal court by the record label that published the album, alleging that because you let someone know that you had the album, and made it fairly easy for that person to access it, you have distributed it in violation of their exclusive right to do so. Although this may seem far-fetched, the court in Elektra v. Barker tacitly accepted a strikingly similar argument advanced by the recording industry: offering to distribute a file on an online sharing service may be tantamount to the illegal distribution of that file, even absent proof that the file was ever downloaded. I. INTRODUCTION This interpretation of the law is far from universally accepted, as other courts have not rushed to accept the recording industry’s construction of what distribution really is. The concept in Barker can be thought of as the deemed distribution doctrine, because a court will deem that distribution has occurred when a file is available for download, even though it has not technically been distributed to anyone.

This Note analyzes the validity of that proposition, starting with an overview of how file-sharing works and why it presents this unique opportunity for courts to extend the concept of distribution. This Note then examines the evolution of the deemed distribution doctrine, and shows that it does not work properly in the file-sharing framework, nor does it comport with The concept in Barker can be thought of as the deemed distribution doctrine, because a court will deem that distribution has occurred when a file is available for download, even though it has not technically been distributed to anyone. the traditional decisions from which it was derived. For these reasons, courts should not allow proof of distribution without requiring proof that some file transfer occurred; a mere showing that some files appeared to be shared because they were in a shared files folder should not be enough to create liability. Deciding this issue is especially poignant now, as a defendant who was recently hit with a landmark judgment in a file-sharing case was granted a new trial, with the court expressing concern over the viability of the deemed distribution theory. Courts have also expressed an interest in understanding file-sharing technology as it applies to offers to distribute; this Note aims to provide that understanding.

Who Knows You Are Reading This? United States' Domestic Electronic Surveillance in a Post-9/11 World
by Kenneth R. Logsdon

Two essential provisions within the Constitution of the United States of America that attempt to distinguish between governmental prerogative and individual liberty are the First and Fourth Amendments. Accordingly, the Constitution and subsequent Supreme Court prescriptions have created rights in which an American citizen’s privacy and speech must be respected by state and federal governmental officials.

Nevertheless, since the Civil War, the United States Government has continually infringed upon those rights via electronic monitoring programs directed towards the general public. Incongruously, this monitoring has continued subsequent relatively recent dictates by the Supreme Court that the United States Government must respect one’s right to privacy. Additionally, this monitoring activity has accelerated since the terrorist attacks of September 11, 2001 (“9/11”).

This Note will explore the United States Government’s electronic surveillance of American citizens in a post-9/11 world and the constitutional implications of such action. Part II will explain the history and developments of electronic surveillance in the United States from the Civil War to present. Part III will discuss and analyze the latest developments and implications of electronic surveillance in relation to the First Amendment, Fourth Amendment, and the constitutional doctrine of separation of powers. Part IV will discuss and recommend a modified application of the National Security Letters Reform Act of 2007, Congress’s latest attempt to narrow the scope of the Executive Branch’s electronic surveillance capabilities. Finally, Part V will summarize and conclude this Note.

Alfonso Soriano Is Getting Robbed: Why the Eigth Circuit Court of Appeals Made a Bad Call in C.B.C. Distribution and Marketing v. Major League Baseball
by Gustavo A. Otalvora

Each day millions of Americans log onto the Internet to read player rankings, injury updates, and scouting reports on professional athletes to guide them through drafts, trades, and waiver wire pickups. In performing this time-consuming research, Americans spend millions of dollars, and they cost their employers millions more due to reduced productivity. Meet America’s latest obsession—online fantasy sports.

In a rather short amount of time, the fantasy sports industry has become an incredibly popular pastime. In 2006, 16 million people played some variation of fantasy sports, and of those 16 million, 4.8 million played fantasy baseball. Although baseball is America’s past time, there exists no doubt that the fantasy baseball phenomenon complements and, arguably, helps drive the sport. This exponential increase in fantasy game consumption makes the fantasy sports industry rather lucrative for many entities. Fantasy games bring in billions of dollars for game and fantasy-related service providers. In turn, fantasy game providers have paid Major League Baseball (“MLB”) millions of dollars in licensing fees. This stream of revenue, however, will soon cease to exist for MLB as a result of a recent case.

In 2005, a St. Louis-based fantasy game provider challenged whether it was obligated to pay such licensing fees. In a case having major implications for the online fantasy world, C.B.C. Distribution & Marketing, Inc. (“CBC”) disputed MLB’s assertion that its professional baseball players possessed a right of publicity in their names and statistics. The Federal District Court for the Eastern District of Missouri agreed and ruled in favor of the fantasy game provider (“C.B.C. Distribution & Marketing I”). In light of the district court’s ruling, MLB appealed.

On October 16, 2007, the Eighth Circuit Court of Appeals also ruled in favor of CBC (“C.B.C. Distribution & Marketing II”). The court reached its decision, however, on different grounds. The appellate court rejected the district court’s commercial advantage analysis and concluded that CBC’s use did violate the players’ right of publicity, but the court ultimately ruled in favor of CBC, holding that the First Amendment protected CBC’s use.

The controversial decision poses major economic implications for fantasy sports game providers of all major sports in the United States and possibly abroad, as well as companies that provide other forms of fantasy entertainment that use peoples’ identities, such as fantasy celebrity leagues. Although some commentators argue that denying the players their right of publicity promotes unjust enrichment, most support the ruling in favor of CBC. One author, for example, argues that a ruling in favor of MLB would have had a drastic impact on the public’s ability to access historical data, vital statistics, and may have even imposed liability on games such as Trivial Pursuit.

This Note explores the players’ right of publicity in the use of their name and statistics in fantasy baseball, and more importantly, the Eighth Circuit’s First Amendment analysis. Part II presents a detailed narrative of the history and current state of fantasy baseball. Part II also provides background information on the parties involved in C.B.C. Distribution & Marketing and their claims, and lays out the legal landscape of the right of publicity and its First Amendment implications. Part III examines these legal issues in a more critical fashion and discusses the implications of the Eighth Circuit’s decision. Part IV argues that the unlicensed use of players’ names and statistics for the sole purpose of fantasy baseball violates the players’ right of publicity. Accordingly, Part IV recommends that Congress enact a statute modifying the right of publicity, to prevent unjust enrichment in the booming online fantasy industry.