Tarantino’s “Hateful” Revenge: Director Pursues Copyright Claim Over Hyperlink To Leaked Script

QTQuentin Tarantino probably wasn’t offended when the Hollywood gossip website Defamer, owned by Gawker Media LLC, compared him to a petulant child and accused him of throwing a “temper tantrum.”  After all, the colorful characters in his films have uttered far more incendiary insults.  But when the website published a story about Tarantino’s leaked script for the upcoming film The Hateful Eight, and included with the story a link to a PDF file of the entire leaked screenplay, Tarantino took his tantrum straight to the U.S. District Court in Los Angeles.

The Hateful Eight

Following the success of his 2012 Academy Award winning screenplay for Django Unchained, Tarantino decided he would pen another western-themed project, The Hateful Eight.  In a subsequent interview with Deadline, he claimed that he only gave that finished script to six people, including three actors, and soon realized it had been leaked when individuals outside of this inner circle began contacting his agent to pitch other actors for roles in the film.  Upon discovering the leak, Tarantino immediately shelved the project and claimed he would publish the script as a book.

After the interview, Defamer published a story entitled “Quentin Tarantino Throws Temper Tantrum After Script Leak,” which described the leak and Tarantino’s resulting decision regarding the film’s release.  However, the story also asked readers “to name names or leak the script” to Defamer via the website’s “tips” email address.  The very next day, Defamer circulated a post with the headline: “Here Is the Leaked Quentin Tarantino Hateful Eight Script.” The post contained a hyperlink to an anonymous posting of the entire script on AnonFiles.com, a website not affiliated with Gawker.

Tarantino’s Theory: Solicitation of Infringing Link

Tarantino’s complaint alleges that Gawker Media, by soliciting and then linking to the leaked script, was engaging in “predatory journalism” that went beyond mere news reporting and constituted contributory infringement of Tarantino’s copyright in the work.  While Tarantino concedes that publishing a news story regarding the leak is within Gawker’s rights as a news outlet, he claims that Gawker also promoted itself as the primary resource for the public to read the entire screenplay illegally, and that this “crossed the journalistic line.”  The complaint goes on to state that Gawker’s behavior amounts to “facilitating and encouraging the public’s violation of [Tarantino’s] copyright in the screenplay.”

Gawker Media has responded to the complaint by filing a motion to dismiss the case for failure to state a claim. Gawker argues that linking to source material in its report qualifies as non-infringing fair use under 17 U.S.C. § 107.  Gawker further argues that the First Amendment guarantees its right to disseminate news to the public, as well as the public’s fair use of the work in the context of news consumption.  Tarantino has opposed Gawker’s motion, maintaining that Gawker’s commercial use of the script to generate traffic to its website exceeds the protection of the fair use doctrine.  In its reply brief, Gawker noted that there was no precedent for holding a news website liable for merely hyperlinking to newsworthy material, and that Tarantino “does not cite even a single case in which an entity engaged in the business of reporting news . . . has been found to be infringing because its news report included a link to allegedly infringing material that was the subject of the report.”

The case raises an interesting question.  A mere link to infringing material may generally be understood not to give rise to secondary liability for copyright infringement.  But what if the defendant has solicited that link, and then profits from its association with that link?

Tarantino is requesting an injunction preventing further dissemination of his screenplay and at least $2 million in damages. Formal discovery is expected to commence pending the Court’s issuance of a ruling on Gawker’s motion to dismiss.  The case has been referred to private mediation to be completed no later than September 8, 2014. The leaked script is no longer available on been Anonfiles.com.

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Catholic Priest Permitted To Conceal Non-Privileged Nature Of Defamatory Communication Until Statute Of Limitations Runs

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In a recent unanimous decision in Harrington v. Costello, the Massachusetts Supreme Judicial Court (SJC) held that the statute of limitations had run out on a Catholic priest’s defamation claim against his colleague, even though the colleague had allegedly fraudulently concealed the source of the defamatory statement.

Background

The plaintiff, John Harrington, was a priest at St. Patrick’s Church in Falmouth, Massachusetts.  The defendant, William Costello, was a pastor at neighboring St. Anthony’s Catholic Church in East Falmouth. In 2005, Costello reported to the Diocese that a parishioner had accused Harrington of stalking the parishioner’s teenage son. When the Diocese investigated the accusation, it learned that the parishioner denied having spoken to Costello about this. Costello then stated that it was actually an unnamed co-worker of the parishioner who made the accusation. The accusation was reported to certain staff members of the church, and Harrington was removed from his post.

In 2007, Harrington learned the identity of the co-worker and met with him.  The co-worker denied having accused Harrington of wrongdoing. At this point, the complaint alleges, Harrington discovered that Costello, his fellow priest, had made the whole thing up.

In 2010, less than three years after speaking with the co-worker, Harrington sued Costello and other members of the Diocese hierarchy for defamation. The defendants moved to dismiss on the grounds that the claim was not brought within the three year statute of limitations, in other words, within three years of the publication of the accusation in 2005.  The Superior Court granted the motion and Harrington appealed.

Defamation and Privilege in Massachusetts

In Massachusetts, a defamation plaintiff who is not a public figure must establish that (1) the defendant published a statement regarding the plaintiff; (2) the statement was false; (3) the defendant knew it was false, or was reckless or negligent as to its truth; (4) the statement was defamatory, in that it was capable of damaging the plaintiff’s reputation; and (5) the publication caused harm.

Some statements meet all of these elements but are nevertheless non-actionable because they are considered “privileged.”  The Massachusetts “common interest” privilege allow persons to republish defamatory statements to a limited extent if the republication is reasonably necessary to protect a legitimate common interest.  Sharing credible reports of a threat to a child’s safety among adults responsible for that child’s welfare, as in this case, would almost certainly be protected by this privilege.

When Did Harrington’s Claim Accrue?

The issue on appeal was when Harrington’s claim accrued. Harrington argued that, although defamation claims usually accrue when the defamatory statement is published, the “discovery rule” tolls this accrual until a plaintiff knows or with reasonable diligence should know that he was harmed and that this harm was caused by the defendant’s conduct.

Here, Harrington claims he would have sued right away had he known that the accusation had been fabricated with malicious intent by Costello.  But in 2005, he thought Costello was merely republishing someone else’s defamatory statement in a privileged manner. Any claim he had brought against Costello based on this privileged republication would have failed. Therefore, Harrington argued, it is only fair that his cause of action did not accrue until he realized Costello’s statements were not in fact privileged.

One member of the Massachusetts Appeals Court panel, Judge Joseph Trainor, agreed and asked the question: Who was Harrington supposed to sue in 2005? He didn’t yet know that Costello was the real wrongdoer and had been falsely informed that the defamatory statement was made by a third party whose identity Costello refused to reveal. In short, Judge Trainor argued that it was reasonable for Harrington not to sue Costello in 2005.

A Far From Perfect Compromise

But the majority of the Appeals Court panel and a unanimous SJC disagreed. Accrual under the discovery rule is not delayed just because a plaintiff hasn’t yet realized he has a winning case. Irrespective of the real source of the accusation, Harrington had enough information to sue back in 2005: he knew a false statement had been published, he knew that it harmed him, and he knew the identity of the person (Costello) who uttered the statement that caused the harm. For the same reasons, the Court rejected Harrington’s argument that the limitations period should be tolled on the grounds of fraudulent concealment. The fact that Costello was publishing — or republishing — a false defamatory statement was never concealed; only his motive for doing so.

The SJC seemed to appreciate the harsh appearance of this holding, and acknowledged that Harrington’s arguments had “appeal.”  However, the Court would not allow a defamation claim to be tolled once the plaintiff already had knowledge of the defendant’s identity, of the publication, of the statement’s falsity and of the harm. To do so, the Court stated, would upset “society’s considered, although often far from perfect, compromise between a plaintiff’s need to remediate wrongs and society’s need for closure.”

New “Twibel” Defamation Opinion Suggests Online Speech May Be Special After All

Twibel

Many lawyers smirked and scoffed a few months ago when the popular press began touting the Courtney LoveTwibel” trial as a “landmark” case that would set a “major precedent.” In fact, as discussed further elsewhere, it was nothing of the kind. In case you don’t already know, “Twibel” is just a silly concatenation of “Twitter” and “libel,” coined by the media to overhype a case which, apart from the involvement of a celebrity, was just a run-of-the-mill defamation claim that happened to involve Twitter. The excessive attention paid to the matter was premised on the notion that Twitter speech is somehow legally different than other speech, and the consensus among most attorneys was that this notion was nonsense.

However, an opinion issued on April 14, 2014 by Judge Dennis Saylor of the District of Massachusetts may cause some to rethink — not whether the Courtney Love trial was important (it wasn’t) — but whether defamation claims based on internet speech may be treated a little bit differently than claims based on traditional speech.

The Case of the Missing Horse

The facts alleged in Feld v. Conway are sparse. In November 2010, Mara Feld sent her retired racehorse away to become a companion horse. For reasons unknown, the horse disappeared en route and likely was slaughtered. The fate of the horse became the subject of online discussion.  In the context of that discussion, Christine Conway posted the following Tweet: “Mara Feld . . . you are fucking crazy!”

In 2013, Feld filed a complaint against Conway alleging that the Tweet was defamatory. Conway brought a motion to dismiss, arguing that the Tweet was protected opinion as a matter of law, and thus could not be the subject of a defamation claim.

Opinion and Context In Defamation Cases

Accusations of mental instability are often the basis for defamation claims, but many of them end up getting dismissed. This is because, in most cases, a court determines as a matter of law that the statement is not an assertion of fact, but rather a pure opinion protected by the First Amendment. Making this critical fact/opinion distinction requires that the court examine the statement in its totality and in the context in which it was published. For example, in Greenbelt Cooperative Publishing v. Bresler, the Supreme Court held that a newspaper had published protected opinion when it described a real estate developer’s negotiating position at a public meeting as “blackmail.”  When placed in context, which included the entire article and the newspaper’s multi-article coverage of the public meeting, it was clear “even [to] the most careless reader” that the use of the term was rhetorical hyperbole (i.e., opinion) and not the accusation of an actual crime (i.e., an assertion fact).

What is the Proper Context for Internet Speech?

Here, Feld argued that the proper context for analyzing the “fucking crazy” statement was the Tweet alone. Indeed, if you type Feld’s name into a search engine, the Tweet will come up by itself without any context. In other words, according to Feld, it’s as if the newspaper defendant in Greenbelt had simply printed “[Plaintiff] committed blackmail” by itself with no further explanation.

However, Judge Saylor disagreed, and held that the proper context was the entire “heated internet debate.”  In that context, Judge Saylor wrote, it was obvious that the Tweet was an opinion, and therefore the case should be dismissed.

Fair enough, but exactly how did the Court defined the scope of this “heated internet debate”? Neither the allegations nor the parties’ briefs provide any information about where on the internet this debate was taking place, or how and by whom it was being read.  Was it all on Twitter, or did it take place in part on other social media or in some obscure equine discussion forum? In describing the appropriate context in this case, the Court referred vaguely and without citation to a “great debate on Internet sites,” while citing only the single Tweet at issue and one article in the Worcester Telegram.

So what is the proper context when determining whether internet speech is an assertion of fact or an opinion? In Greenbelt, the Supreme Court assumed for purposes of its legal analysis that the readers of the term “blackmail” had also read the rest of the newspaper, so the proper context included multiple explanatory articles on the same topic. Here, Judge Saylor appears to assume that anyone who saw this single Tweet would also somehow know about the rest of the debate, wherever online it was occurring. In other words, the proper context for determining whether an online statement is protected opinion could be as wide as the entire internet, or at least anywhere on the internet where the same topic is being discussed.

Seems pretty broad. Perhaps “Twibel” is special after all.

Pick Your Passion: State’s Trademark May Be Used To Criticize Its Governor

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In Dardenne v. MoveOn.org, the Middle Louisiana Federal District Court faced a conflict between trademark protection, on the one hand, and the First Amendment’s protection of political advocacy, on the other.  The Court concluded that trademark law cannot be used to suppress political advocacy, at least in the absence of a compelling need to protect the mark and a demonstrable likelihood of confusion.

The State of Louisiana, through the office of the Lieutenant Governor, had previously registered and used “LOU!S!ANA Pick your Passion” as a trademark for its LA2tourism industry. In 2014, the political advocacy group MoveOn.org erected a billboard next to a Louisiana interstate, which reads “LOU!SIANA Pick your passion!  But hope you don’t love your health.  Gov. Jinal’s denying Medicaid to 242,000 people.”  This was a message of protest against the state’s health care policies, specifically Governor Bobby Jindal’s rejection of Medicaid expansion funding available under the Affordable Care Act (sometimes referred to as “Obamacare”).

Louisiana sued MoveOn.org for trademark infringement, on the theory that the advocacy group should be prohibited from using the state’s own trademark to criticize its governor, and moved for a preliminary injunction. On April 7, 2014, the Court rejected this request.

Louisiana Fails to Clear Court’s Three Hurdles

The Court recognized that Louisiana was effectively asking it to suppress MoveOn.org’s criticism of the state’s public policies, in other words, to suppress political speech at the core of the First Amendment’s protections.  Drawing from First Amendment and trademark jurisprudence, as well as from the traditional preliminary injunction standard, the Court demanded that Louisiana clear three hurdles in order to justify to the suppression of the billboard by preliminary injunction.

First, the Court required Louisiana to “demonstrate that its interest in protecting its service mark from unauthorized use by MoveOn.org is compelling and that the injunctive relief sought is narrowly tailored to achieve that interest.”  The court found no such interest.

Second, the Court required Louisiana to show a likelihood of confusion in the mind of the reasonable consumer.  Louisiana argued that consumers would somehow “be confused into thinking that the Lieutenant Governor, as the alleged owner of the mark, is being critical of the Governor.”  The Court found that this argument underestimated “the intelligence and reasonableness of people viewing the billboard.”  Given MoveOn.org’s obviously parodic message, the Court found it “inconceivable” that a reasonable person viewing the billboard would perceive it as Louisiana’s attack on its own governor.

Third, the Court required Louisiana to show that it would be irreparably harmed if MoveOn.org’s billboard remained.  There was no such showing, particularly in view of the lack of confusion.

Because Louisiana could not demonstrate all, or even any, of these three factors, the Court refused to grant preliminary relief, effectively ruling that MoveOn.org must be permitted to attack the state’s governor with the state’s own intellectual property.  This outcome ensures a broad right to political advocacy, leaving little opportunity for states to leverage intellectual property rights to suppress unpopular speech.

Following this ruling, the Court calendared a scheduling conference to take place in June.  The Court’s rulings thus far suggest that Louisiana’s case faces significant obstacles to success, but there is no word yet on whether the state will nevertheless proceed with its case.

Taxation Of Copyright Sales: Ordinary Income Or Capital Gain?

Tax day presents several interesting questions for copyright holders, not the least of which is how the Internal Revenue Service (IRS) will treat income from the sale or exclusive license of a copyright.  If a copyright is a “capital asset,” proceeds from its sale or exclusive license are a capital gain rather than ordinary income, and the transaction will be taxed at a much lower rate.

Prior to 1950, whether a copyright was a capital asset was largely determined by the professional status of the author. A copyright was not a “capital asset” if could be described as “inventory” of that profession, or “property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business.” So, for example, in Fields v. Commissioner, the Second Circuit held that, where the taxpayer was a professional playwright, sale of the film rights to a play was a transaction “in the ordinary course” of this profession, and thus should be treated as ordinary income.

ChurchillBut there was confusion around the edges. For example, in Estate of Chandor v. Commissioner, painter Douglas Chandor had volunteered to create a portrait of Franklin Roosevelt, Joseph Stalin and Winston Churchill at the Yalta Conference, but Stalin scuttled the plan by refusing to sit. This left Chandor with a draft “study” of Churchill, which he sold in 1948 to financier Bernard Baruch for $25,000. The IRS argued that, because Chandor was a professional painter, the proceeds from the sale of any of his paintings should be treated as ordinary income. But the United States Tax Court disagreed. Although Chandor was a professional portrait painter, he had previously painted only specifically commissioned works, and had never before created a painting and then held it for sale. Moreover, the painting was only a study, and “usually these studies are never disposed of until after the death of the artist.” Therefore, it was improper to treat the painting as if it were ordinary “inventory” held for sale to customers, and the income from its sale was a capital gain.

In 1950, Congress sought to diminish uncertainty in this area of the law by passing what is now codified at Section 1221(a)(3) of the FrancisInternal Revenue Code. That section provides that “capital assets do not include … a copyright … held by … a taxpayer whose personal efforts created such property.”  In other words, individual artists like Chandor could no longer treat as a capital gain the income from the sale of the rights in their own work, regardless of the context. So, for example, in Stern v. United States, a Louisiana federal court held that, “unfortunately for the taxpayer,” the sale of the “Francis the Talking Mule” franchise by its author, shortly after this new law went into effect, had to be treated as “ordinary income.” In 2005, Congress amended Section 1221 to allow copyrights in musical works to be treated as capital assets, but other types of creative work are still subject to Section 1221(a)(3).

Notably, the IRS has indicated that the reference in Section 1221(a)(3) to “personal efforts” may limit its application to individuals, thus excluding corporations. However, in Revenue Ruling 1962-141, the IRS ruled that the sale of television broadcast rights by corporations, because it had become a common practice in the entertainment industry by that time (1962), should be treated as if it were inventory sold “in the ordinary course” of that business, and thus any profit from the sale of such rights was ordinary income. As a practical matter, this suggests that, even if a copyright holder is a corporation or an individual not subject to the “personal efforts” language, the IRS is still likely to view proceeds from the transfer of these properties as ordinary income, provided that such transfers regularly occur within the relevant industry. Businesses and individuals with questions about the appropriate tax treatment of copyright transfers should consult a specialist.

Can Private Photos Be Used In Political Ads Without Permission? Colorado Court Rejects Gay Couple’s Misappropriation Claim; Copyright Claim Survives

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When we upload family pictures to the internet, we understand that, in theory, anyone in the world might download them and use them for some nefarious purpose.  However, we usually take comfort in the fact that most of us just aren’t interesting enough to be noticed. But that wasn’t the case for New Jersey couple Brian Edwards and Thomas Privitere.

In 2010, Edwards and Privitere got engaged and created one of those obligatory saccharine websites to provide information about their upcoming wedding. With the White 2permission of photographer Kristina Hill, they included on the site a photograph of themselves kissing in front of the New York City skyline. The couple were married later that year, and it would have been reasonable for them to assume that nobody was going to pay much attention to the site after that.

But in 2012, a Colorado-based entity calling itself “Public Advocate of the United States” downloaded the picture, cut out the kissing couple and repurposed the image for political flyers attacking state politicians who had expressed support for gay rights. Because they were upset that the image had been put to this purpose, the couple and the photographer brought suit in the District of Colorado for misappropriation of a likeness and copyright infringement. The defendants filed a motion to dismiss. Judge Wiley Daniel issued his opinion on March 31, 2014.

An Expansive View of “Reasonable Relations”

Judge Daniel first addressed the misappropriation claim. Under Colorado law, a defendant may not make unauthorized use a plaintiff’s name or likeness “for the defendant’s own purposes or benefit, commercially or otherwise.”  However, unauthorized use is permissible if the context is a protected First Amendment activity, such as non-commercial speech that is “reasonably related” to “matter that is newsworthy or of legitimate public concern.”

Judge Daniel found that, because the flyers did not propose a commercial transaction, they were non-commercial. Furthermore, Judge Daniel held that same-sex marriage is a matter of public concern, and “it cannot be said that the lifted portion of the photo is not reasonably related to same-sex marriage.”  On this basis, Judge Daniel ruled that the flyers were protected First Amendment Activity, and dismissed the claim for misappropriation of a likeness.

This ruling begs several questions. What does it mean to be “reasonably related” to an issue of  legitimate public concern for First Amendment purposes? Same-sex marriage is undoubtedly a subject of public concern. But Edwards and Privitere weren’t advocating for same-sex marriage — they were just getting married. Is every same-sex couple in the country “reasonably related” to this issue such that any photograph of them may be used without their consent? If the subject of public debate is the definition of marriage, why aren’t all pictures of any married couple up for grabs – straight or gay? And is this issue a special case, or does the theory extend to less controversial topics? Can I, for example, download a picture of a random stranger drinking beer in a car and use it to advocate against drunk driving?  How about a picture of a stranger’s child to advocate for increased primary school funding? Creepy.

A Copyright Coda

Appellate answers to these questions may have to wait, because the copyright claim survived.  The defendants had argued that the flyers were intended to educate voters and therefore a “fair use” under 17 U.S.C. §107, which expressly includes “nonprofit educational purposes.” In a somewhat odd opinion, Judge Daniel issued rulings on the first three fair use factors, and then held that it was premature to address the fourth (the effect on the market) prior to discovery. As to the first factor — the purpose and character of the use — Judge Daniel held that the flyer was “not the type of “educational purpose” contemplated by the statute,” and therefore not a fair use. It is not clear why the Court did not address other protected activity under Section 107 (such as “comment” or “criticism”), or whether those issues are still open for discussion.

The parties will presumably now proceed to discovery, unless one side or the other attempts an interlocutory appeal.