Bench & Bar

MAR 2018

The Bench & Bar magazine is published to provide members of the KBA with information that will increase their knowledge of the law, improve the practice of law, and assist in improving the quality of legal services for the citizenry.

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17 BENCH & BAR | of something, does not necessarily mean that it is fair use. To con- stitute "fair use parody," the new work must be viewed by a court as a commentary on the original work, rather than a substitute for the original work or commentary on some other topic. Another significant form of fair use is reverse engineering of computer software. Courts have held that reverse engineer- ing (or "decompiling") software from an executable program to human-readable source code, in which a copy of the software program is necessarily made, can be a fair use. e reverse engi- neering practice at issue must be the only means of gaining access to non-copyrighted aspects of the program, and the defendant must have had a legitimate interest in gaining access to those aspects. Section 109 codifies the so-called "first sale" doctrine. is limita- tion allows the owner of a particular copy of a copyrighted work to sell or otherwise dispose of that particular copy without violating copyright law. e copyright owner has the right to control the initial sale of the copy, but after that sale is completed, its rights in that particular copy are extinguished and the new owner may transfer the copy to someone else. Importantly, the first sale doctrine has no effect on the underlying copyright; the doctrine only applies to individual copies embodying the copyright. WHAT ABOUT INFRINGEMENT? As noted above, federal courts have exclusive jurisdiction over copy- right infringement suits, and a prerequisite to filing such a suit in federal court is that the allegedly infringed work must be registered. e work need not be registered at the time of infringement – a potential plaintiff may seek registration by the Copyright Office and then file suit. Once jurisdiction is established, a plaintiff alleging infringement must prove two primary elements: (1) ownership of a valid copy- right, and (2) copying by the defendant of constituent elements of the work that are original. In the absence of direct evidence, the plaintiff frequently proves copying by showing that the defendant or the person who composed the defendant's work had access to the copyrighted material and that the defendant's work is "substantially similar" to the protected work based on the "ordinary observer test." A plaintiff bears the burden of proving that an ordinary observer would find substantial similarity between protected material and the allegedly infringing work. In addition to direct infringement, the plaintiff may assert that a defendant is secondarily liable for the infringement of others. Prior to 2005, secondary liability existed under the separate doctrines of contributory or vicari- ous infringement. In 2005, the Supreme Court in Metro-Goldwyn-Mayer Studios v. Grokster, adopted a theory of active inducement whereby anyone who actively induces another to infringe is liable for secondary copyright infringement. Second- ary infringement liability will not be found under any theory, however, absent direct infringement by a third party. A plaintiff relying on a theory of secondary liability must also prove direct infringe - ment by someone other than the defendant. As with most intellectual property infringement actions, an injunction to halt future infringing uses is a common remedy for a successful copyright plaintiff. In addition, a copyright owner may recover actual damages and any additional profits made by the infringer. In doing so, the plaintiff need only show defendant's gross revenue resulting from the infringement, leaving it to the defendant to prove appropriate deductions attributable to expenses or profit that resulted from something other than the infringement. Because actual damages in copyright cases often are difficult to show, and the defendant's profits are frequently minimal, plain- tiffs commonly elect to recover statutory damages and attorney fees instead. To do so, however, the plaintiff must have registered the infringed work prior to the time the defendant infringed the work. For each infringed work, the plaintiff may recover statutory damages up to $30,000 for non-willful infringement, and up to $150,000 per infringed work in the case of willful infringement. ose potential recoveries, coupled with the threat of attorney fees, often prove much more successful in bringing the defendant to the bargaining table prior to trial. A successful copyright plaintiff also may obtain destruction or other appropriate disposition of the infringing materials, as well as items by means of which additional infringing copies can be made. In addition to civil remedies, the Copyright Act provides criminal liability for certain forms of willful infringement. Possible pun- ishments include fines and imprisonment for terms of one to 10 years, depending on the nature of the offense and the number of prior convictions. ABOUT THE AUTHOR W I L L M O N TA G U E practices with Montague Law PLLC in Lexington. Montague and the firm's other attorneys have decades of experience representing businesses and individuals in virtually all areas of intellectual property law, busi- ness and corporate law, technology law, and entertainment law. A former equity partner at two of the region's largest law firms, Montague is rated AV-Preeminent by Martindale-Hubbell®, and is listed in Super Lawyers® as a Top Rated Intellectual Property Attorney. Bench & Bar This article has been placed on the KBA website under the Hot Topics page. How the Newly Enacted 'Defend Trade Secrets Act' has Changed the Landscape of Trade Secret Law B Y E L I S A B E T H S . G R A Y

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