Mary Siceloff

The last time I checked (which was a couple of years ago), I found 979 U.S. patents in the U.S. Patent and Trademark Office’s database that had the word “Christmas” in the title.  Every year at this time, I look at a few of the most interesting ones.

My favorite one this year is U.S. patent no. 5,523,741 entitled “Santa Claus Detector.”  This patent covers a Christmas stocking that contains a light bulb or LED, a battery to power the light, and a hidden switch that turns on the light.  The switch is connected to a pull cord.  When the stocking is hung on the fireplace, the pull cord is positioned across the opening of the fireplace, forming a barrier across the fireplace opening.  After the child has gone to sleep on Christmas Eve, Santa Claus comes down the chimney with his bag of toys and triggers the cord, which turns on the light.  The next morning, the child will see the light on and know that Santa was there! (Or, as the patent describes, the parent can secretly pull the cord and turn on the light.)  The purpose of this invention, according to the inventors, is to reassure children that their good behavior was rewarded by Santa.

Another fun Christmas patent is the “Santa Claus Visit Kit,” U.S. patent no. 7,258,592.  This kit is used by parents to prove to a child that Santa Claus has visited.  The kit includes a stencil to leave boot prints on the floor, a letter from Santa, and a snack item for Santa.  The kit is intended to alleviate a child’s fear that Santa Claus might not leave presents.

There are several patents for fire extinguishers incorporated into Christmas decorations.  One patent covers a fire extinguisher hidden inside the trunk of a synthetic Christmas tree that is activated by a heat sensor.  Another patent is for a Christmas tree ornament that contains a fire-retardant powder.  The ornament pops open when the temperature reaches a certain point, releasing the fire retardant powder and, hopefully, putting out the fire.

My all-time favorite Christmas patent, however, is the “Apparatus to Prevent Pets Climbing a Christmas Tree.”  The need for this invention is not surprising to anyone who has kittens or cats.  As the patent explains, “as is generally well known in the prior art, pets, such as cats, like to climb up the branches of a Christmas tree.  [Duh!]  Oftentimes this will result in knocking some of the ornaments off such tree.  These ornaments may be broken…”  The invention is basically a giant circular screen that clips under the lowest branches of the tree, and is intended to frustrate the climbing felines.  If you have a cat, however, you know that this device will have precisely the opposite effect.  Any cat who sees this big screen will be curious and simply jump up onto it.  The screen will become a staging platform for your cat to explore the tree.  So, I don’t think it will work.  But, actually, who really wants to stop cats from climbing Christmas trees?  It’s way too much fun to watch them perched on the branches, swatting ornaments, and looking embarrassed when they land clumsily on the floor!

On September 11, 2014, the Ninth Circuit heard oral argument on the appeal in Davis v. Electronic Arts (Case No. 12-15737), a class action lawsuit brought by three former NFL Players against Electronic Arts (“EA”), the publisher of the renowned Madden NFL Games.  Michael Davis, Vince Ferragamo, and Billy Joe Dupree claimed that EA violated their right of publicity by using their likeness and the likeness of six thousand other similarly situated former NFL players without permission.  The Ninth Circuit has yet to issue its ruling on the appeal, but most legal scholars agree that EA has almost no chance of prevailing on the issue in light of the Ninth Circuit’s holding in Keller v. Electronic Arts (Case No. 10-15387) where the Ninth Circuit found that EA unlawfully utilized the images of collegiate athletes in its NCAA Football game series.

Interestingly, EA put forth the same argument in Davis as it did in Keller.  Specifically, EA argued that its portrayal of the class members is protected by the First Amendment under the doctrine of transformative use, which analyzes whether the challenged work or product contains significant transformative elements (or value that) does not derive primarily from the celebrity’s fame.

At the oral argument, counsel for EA cited to a footnote in the Keller decision wherein the court reserved the “question of whether the First Amendment furnishes a defense other than those the parties raise.”  EA argued that the footnote provided the court with the wiggle room it needed to come to a different conclusion than it did in Keller.  EA urged that the court prescribe a second standard for the use of likeness in books, films, and video games.  Specifically, EA argued that the extensive labor and detail involved in making a video game should almost guarantee that the product is entitled to First Amendment protection as an expressive work.  Judge Marsha S. Berzon was not very receptive to this argument and remarked that the creation of a video game sounded more like a compilation of data than an expressive work.  EA responded that a great deal of creative expression is embodied in that compilation.  Whether the Court accepts EA’s position remains to be seen.

EA raised a new argument that the depiction of the NFL class members should qualify as incidental use and be protected under the First Amendment.  Specifically, EA argued that the avatars that the class members complained of were merely a “few of the thousands of virtual athletes in its Madden NFL video game. “Where the use of plaintiff’s name or likeness is incidental in relation to the defendant’s work as a whole, the use is not actionable under the right of publicity.”  It remains uncertain whether this new argument will suffice to overcome the Court’s previous ruling regarding the right of publicity in the context of video games.  However, one thing is certain.  This issue is ripe for Supreme Court review.  There is confusion among the lower courts as to how they should reconcile the right of publicity with the First Amendment rights of video game creators.  Arguably, there is already a circuit split on this issue because the Eighth Circuit took a contrary position when it found in favor of a fantasy baseball provider back in 2007.

The circuit split is likely to grow as similar lawsuits continue to develop.  For example, Lindsey Lohan recently sued the publisher of Grand Theft Auto V on similar grounds in New York (Case No. 156443, NY Supreme Court).   Maybe one more circuit weighing in on the issue will give rise to the circuit split needed to get the Supreme Court’s attention.  Or, perhaps that won’t necessary and the Ninth Circuit’s ruling in Davis will be sufficient to get the Supreme Court to grant certiorari.

We will be certain to report back once the Ninth Circuit issues its ruling in Davis.

The United States Supreme Court issued its decision in Integrity Staffing Solutions, Ins. v. Busk on December 9, 2014 and reversed the Ninth Circuit Court of Appeal in a much awaited wage and hour decision concerning the issue of “compensable time” under the federal Fair Labor Standards Act (“FLSA”).

The facts of the case are very straight forward.  Integrity Staffing Solutions, Inc. (“Integrity”) required its hourly non-exempt ware­house workers (who retrieved products from warehouse shelves and packaged them for delivery to Amazon.com customers), to undergo a security screening before leaving the warehouse each day.  A number of former employees sued Integrity alleging, in part, that they were entitled to compensation under the FLSA for the roughly 25 minutes each day that they spent waiting to undergo and undergoing those screenings. The employees also alleged that the company could have reduced that time to a de minimis amount by adding screeners or staggering shift terminations and that the screenings were conducted to prevent employee theft and, thus, for the sole benefit of the company and its customers.

The District Court dismissed the complaint for failure to state a claim, holding that the screenings were not integral and indispensable to the employees’ principal activities but rather were postliminary and non-compensable under FLSA. The U. S. Court of Appeals for the Ninth Circuit reversed the District Court in relevant part, asserting that post-shift activities that would ordinarily be classified as non-compensable postliminary activities are compensable as integral and indispensable to an employee’s principal activities if the post-shift activities are necessary to the principal work and performed for the employer’s benefit.

Relying on the Portal-to-Portal Act, the Supreme Court disagreed with the Ninth Circuit and found that the time employees spent waiting to undergo and undergo­ing security screenings is not compensable under the FLSA.  As the Court explained, the Portal-to-Portal Act exempts employers from FLSA liability for claims based on “activities which are preliminary to or postliminary to” the performance of the “principal activities” that an employee is employed to perform.  Under U. S. Supreme Court precedent, the term “principal activities” includes all activities which are an “integral and indispensable part of the principal activities.”  An activity is “integral and indispensable” if it is an intrinsic element of the employee’s principal activities and one with which the employee cannot dispense if he is to perform his principal activities.

According to the high Court, the security screenings at issue were non-compensable postliminary activities for a number of reasons.  To begin with, the screenings were not the principal activities the employees were employed to perform (i.e., the workers were employed not to undergo security screenings but to retrieve products from warehouse shelves and package them for shipment).  Further, the screenings were not “integral and indispensable” to those principal activities the employees performed. The Court said that this view of the screening at issue is fully consistent with an Opinion Letter that the Department of Labor (“DOL”) issued as far back as 1951. That Letter found as non-compensable, a pre-shift security search of em­ployees in a rocket-powder plant “for matches, spark producing devices such as cigarette lighters, and other items which have a direct bearing on the safety of the employees,” as well as a post-shift security search of the employees done “for the purpose of preventing theft.”  As the Court pointed out, the DOL drew no distinction between the searches conducted for the safety of the employees and those conducted for the purpose of preventing theft – neither were compensable under the Portal-to-Portal Act.

The Court held that the Ninth Circuit erred by focusing on whether an employer required a particular activity rather than whether it was tied to the productive work that the employee was employed to perform.  The Court said that if the test could be satisfied merely by the fact that an employer required an activity, it would sweep into “principal activities” the very activities that the Portal-to-Portal Act was designed to exclude from compensation.  Finally, with respect to the employees’ claim that an employer could conceivably reduce the screening time to a de minimis amount of time if the employer implemented other measures, the Court said that this does not change the nature of the activity or its relationship to the principal activities that an employee is employed to perform.  If employees wish to pursue these arguments they should take it up at the bargaining table, not in court in an FLSA claim.

Lesson for Employers:  The Court’s decision makes clear that based on the Portal-to-Portal Act, the time employees spend undergoing security screenings is non-compensable under the FLSA.  The decision also provides helpful guidance when determining whether other pre-shift and post-shift activity may or may not be compensable. While there is no black and white answer to provide certainty for employers as to the compensability of a host of pre- and post-shift activities, one thing is clear from the Court’s unambiguous holding – the mere fact that the employer requires a particular activity does not make the time spent in that activity compensable.

By: Intellectual Property Group

If you use Facebook, you probably already have noticed that many users are posting statements claiming that Facebook somehow acquires ownership of users’ intellectual property that has been posted to that site.  Reacting to this entirely erroneous proposition, many Facebook users have posted very scary and onerous status updates aggressively asserting their intellectual property rights in the materials they have uploaded onto Facebook.  One user posted that they “hereby declare that my copyright is attached to all of my personal details, illustrations, comics, paintings, crafts, professional photos and videos, etc. . . . for commercial use of the above my written consent is needed at all times!”  (Undoubtedly her use of an exclamation point will add significant legal weight when this status update is considered by a court in the forthcoming case of Everyone v. Facebook.)  That same user warns us that violation of her privacy is punished by law, UCC 1 1-308-308 1-103 and the Rome Statute.  Undoubtedly, Facebook is horrified by the prospect of violating either of these statutes.  Or not.

This Facebook user (and legions of other Facebook users who (ironically) have copied her ominous copyright warning) apparently have missed the plainly worded terms governing the use of Facebook’s online services.  While it’s not clear how the Uniform Commercial Code or the Rome Statute possibly could govern the relationship between a Facebook user and the website, the Facebook terms of use agreement clearly states that “you own all of the content and information you post on Facebook . . . .”  The agreement further provides that users merely give Facebook a limited, non-exclusive license to any intellectual property content posted on the website, a license which expires when the content is deleted by the user.  Perhaps these simple contract terms were missed during the analysis of international criminal statutes (which have not been ratified in the United States), or laws related to the sale of goods.

While a copyright owner’s right to exclude others from using their work arises as a matter of law, we always must keep in mind that rights in a copyrighted work are often granted, modified, or otherwise controlled by the terms and conditions of contracts.  Indeed, almost any aspect of the exclusive rights vested in a copyright owner may be licensed or assigned to others based on the terms and conditions of a license agreement.  A copyright owner can, by contract, divide her exclusive rights in almost any conceivable manner.  There is, therefore, a simple lesson to the myriad Facebook users who have re-posted this copyright notice on their Facebook status: Most online contracts are binding, you should read them before you accept them.  At the very least, consider reading a contract that you have already signed before researching inapplicable statutes.  These silly updates are worse than posts about Farmville or Mafia Wars.

Earlier this year, we advised employers that the Bay Area Commuter Benefits Program (“CBP”) was going into effect, beginning September 30, 2014. (Govt.  Code §65081.)  This post provides additional information on the requirements and implementation.

As a reminder, the CBP is now mandatory for  any public, private, or non-profit entity employing an average of 50 or more full-time employees per week within the geographic boundaries of the Bay Area Air Quality Management District (“Air District”) (covering San Francisco, the peninsula, the East Bay, North Bay, and South Bay counties.  (Coverage map: https://mapsengine.google.com/map/viewer?mid=zEtIldN2taQk.kBcuja_KVQNU.)  The CBP is a pilot program, pursuant to state law, in effect only until January 1, 2017, unless extended before that date.

Which Employees Count under the CBP? For purposes of counting full time, paid employees, the following rules apply:

By: Labor and Employment

On November 4, 2014, Oakland voters passed measure FF.  This measure establishes a minimum wage in the City of Oakland to $12.25 per hour beginning March 2, 2015.  This brings Oakland’s minimum wage increase in line with San Francisco’s minimum wage, which also increases to $12.25 effective May 1, 2015.  Proposition FF also requires that Oakland employers provide paid sick leave to their employees beginning on March 2, 2015. Employees would accrue one hour of paid sick leave for every 30 hours worked.  Employers may cap paid sick leave earned by an employee at 40 hours for employees of small businesses (defined as employers who normally have fewer than ten workers) and 72 hours for employees of other employers.  Employees may use paid sick leave for the employee’s own illness or injury, or to care for certain family members who are ill or injured.  Employees with no spouse or domestic partner may designate one person for whom the employee may use paid sick leave to provide care.  All of these paid sick leave provisions mirror San Francisco’s Paid Sick Leave Ordinance which voters previously passed and became effective 2007.

Recently the 11th Circuit addressed on appeal the question of whether fair use insulates from copyright liability a University which offers to its students a digital repository of reading material culled from third party publications without the benefit of a license.   Three academic publishers filed suit against Georgia State University claiming that the University infringed their copyrights by maintaining a policy which allows GSU professors to make digital copies of excerpts of their books available to students without paying them a royalty.  Prior copyright cases known as the “course pack cases” – cases in which commercial copy shops were found to have infringed copyrights by printing course packs containing excerpts from third party publications without permission from the publishers – seemed to dictate a finding of infringement.  However, of the 74 instances of infringement alleged, the lower court found that the Plaintiffs failed to establish a prima facie case of infringement for 26 works and that fair use applied to all but 5 instances.

The fair use of a copyrighted work is not an infringement of copyright.   The four factors a court must consider in determining whether fair use applies are: (1) the purpose of the allegedly infringing use, (2) the nature of the original work, (3) the size and significance of the portion of the original work that was copied, and (4) the effect of the allegedly infringing use on the potential market for or value of the original.

In weighing the fair use factors, the lower court applied a very mechanical analysis and held that fair use applied whenever at least three of the four factors favored GSU. The lower court held that the first and second fair use factors strongly favored GSU since the copies are of excerpts of copyrighted works that are informational in nature and used for teaching students and for scholarship.  As for the third factor, the lower court determined that where a professor posted an excerpt that was less than 10 percent of the total work, this would support a finding of fair use.  As for the fourth factor, the lower court found that the use of small excerpts did not affect the publishers’ actual or potential sales of books because they do not substitute for the books, and where permissions to use book excerpts are not readily available through a third party licensing service, this also supports a finding of fair use.

Although technically a victory for the publishers, they challenged the lower court’s analysis on multiple grounds.  The publishers argued that each of the four factors should not have been given equal weight.  The publishers also argued that the course pack cases should have been controlling.

The Appeals Court vacated the decision of the lower court and then engaged in a lengthy analysis of the lower court’s fair use analysis.

The first fair use factor has several facets including whether such use is “transformative”  and also whether the use is for a nonprofit educational purpose, as opposed to a commercial purpose.  Under the course pack series of cases, the court found that that the copy shops infringed copyrights by printing course packs containing excerpts from third party publications without permission from the publishers.  Applying the first fair use factor, the photocopying was not fair use primarily because (i) the use was not transformative because the copy shop merely “re packaged” the excerpts into bound volumes; and (ii) despite the educational use of the course packets, the copy shop’s own use was commercial in nature.

In reviewing the first fair use factor, the Appeals Court, similar to the course pack courts, found that the verbatim copies of portions of the original books posted online is not a transformative use.  It is in the Appeals Court’s analysis of the second facet of the first factor – whether the use is for a nonprofit educational purpose, as opposed to a commercial purpose – that a different result is reached.

The commercial or non-transformative uses of a work are separate factors that are accorded their own weight for or against the finding of fair use. Even where such use is non-transformative, nonprofit educational use may weigh in favor of a finding of fair use under the first factor.  Because the very purpose of Copyright is to promote creation and learning, the Court noted that some leeway must be given to educational use.

The Court found that holdings of the course pack cases do not dictate the findings of this case.  In the course pack cases, the court noted that the first factor weighed against a finding of fair use when the non-transformative, educational use in question was performed by a for-profit copy shop, and was therefore commercial.  Here, the Court notes that the use is by a non-profit, educational institution for educational purposes.  The Court found this to be a significant distinguishing factor from the course pack cases and that this “places sufficient weight on the first factor scales to justify a finding that this factor favors fair use despite the non‑transformativeness of Defendants’ use.”

While the Appeals Court’s review of the first fair use factor is certainly a blow to the publishers, the Court’s opinion was not a complete loss for the publishers.  The Court found that the lower court erred in applying a mathematical approach to determining whether fair use is applicable – if three factors favor fair use, fair use is to be found.  The Court also took issue with the lower court’s holding that copying less than a chapter or 10 percent of a book is a safe harbor from copyright infringement.  As most copyright attorneys tell their clients when asked how much of a work may be safely copied, there is no set rule; each instance of copying must be analyzed and the quantity and quality of the material taken must be considered as well as whether the taking was excessive in light of the purpose and the threat of market substitution.

Apparently the publishers are not happy with the decision by the 11^th Circuit; they are asking the 11^th Circuit to rehear their case against GSU.