U.S. Court of Appeals for the Eleventh Circuit, MidlevelU, Inc. v. ACI Information Group, Docket No. 20-10856

 

Blogs

 

Search Engine

 

Web Crawlers

 

RSS Feed

 

Copyright Infringement

 

Implied License

 

Statutory Damages 17 U.S.C. § 504

 

Eleventh Circuit Pattern Jury Instructions (Civil Cases)

 

 

Appeal from the United States District Court for the Southern District of Florida.

 

This appeal involves a blog operator that sued a content aggregator for copyright infringement after the aggregator copied and published the blog’s content. A jury sided with the blog operator. The main issue for us is whether the district court should have allowed the jury to decide whether the aggregator had an implied license to copy and publish the blog’s content. Although the district court employed a too narrow understanding of an implied license, we conclude that a jury could not have reasonably inferred that the blog impliedly granted the aggregator a license to copy and publish its content.

 

MidlevelU makes the full text of its blog articles available in an RSS—or “really simple syndication”—feed. It has used the RSS feed since the blog’s inception to allow readers to easily read its articles. MidlevelU designed its blogging platform so that its RSS feed would distribute the full text of the blog instead of only headlines and summaries of recent articles. It also coded its website to instruct search engines that they may copy and archive every page on the site. MidlevelU included a copyright notice on its website and RSS feed, with a date range from 2012 to the present year, but it did not include a copyright notice for each article.

 

Through the RSS feeds, Newstex received new articles posted to the blogs. It ran the articles through software that generated summaries of the articles. The entries in the Index for these blog articles included bibliographic information about the author and the blog, the computer-generated summary of the article, and a link to the original post. Newstex also added a tab labeled “original” to each entry, available only to subscribers. It embedded an “iFrame” in that tab so that clicking on the tab opened a window showing the original, fully browsable web page, including the full-text content of each article—a “live snapshot”— within the Index website.

 

(…) In June 2018, MidlevelU sued Newstex for copyright infringement. In response, Newstex asserted copyright-registration invalidity, implied license, and fair use as affirmative defenses.

 

(…) A nonexclusive license to use copyrighted material “may be granted orally, or may even be implied from conduct.” Jacob Maxwell, Inc. v. Veeck, 110 F.3d 749, 752 (11th Cir. 1997) (internal quotation marks omitted); see 17 U.S.C. §§ 101, 204(a).

 

Latimer v. Roaring Toyz, Inc., 601 F.3d 1224, 1235 (11th Cir. 2010). In Latimer, we described one way to create an implied license. Id. We held that “an implied license is created when one party (1) creates a work at another person’s request; (2) delivers the work to that person; and (3) intends that the person copy and distribute the work.” Id.

 

Newstex argues, and we agree, that Latimer did not create an exclusive test. Latimer described the creation of an implied license in a work-for-hire relationship without addressing whether or how an implied license might be created in other contexts. We have never held that the Latimer test provides the only avenue for proving that a copyright holder granted an implied license to an alleged infringer. And leading copyright authorities condemn “transmuting the three Latimer factors into the only applicable test.” 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 10.03[A][7] & n.69.6a (rev. ed. 2018); accord 2 William F. Patry, Patry on Copyright § 5:131 (2007).

 

(…) Creating material at another’s request is not the essence of a license; an owner’s grant of permission to use the material is.

 

A license is “a permission . . . to commit some act that would otherwise be unlawful.” License, Black’s Law Dictionary (11th ed. 2019); see Robert W. Gomulkiewicz et al., Licensing Intellectual Property: Law and Application 4 (2d ed. 2011) (“A ‘license’ is a grant of permission.”).

 

When an owner’s conduct “clearly” manifests “a consent to . . . use” of copyrighted material, the owner impliedly grants a nonexclusive license. De Forest Radio Tel. Co. v. United States, 273 U.S. 236, 241 (1927); see also License, 2 Bouvier’s Law Dictionary (14th ed. 1874) (“An implied license is one which is presumed to have been given from the acts of the party authorized to give it.”). A nonexclusive license is a “mere waiver of the right to sue” for infringement. De Forest, 273 U.S. at 242 (internal quotation marks omitted); see also Jacob Maxwell, 110 F.3d at 753.

 

Courts have recognized permission to use copyrighted material in web-based contexts vastly different from the facts in Latimer. Field v. Google Inc., 412 F. Supp. 2d 1106, 1116 (D. Nev. 2006); accord Parker v. Yahoo!, Inc., No. 07-2757, 2008 WL 4410095, at *3–4 (E.D. Pa. Sept. 25, 2008). In Field, a website owner sued Google for posting archived copies of the site’s pages, which included copyrighted content. Field, 412 F. Supp. 2d at 1109–10. Google presented evidence that it is well known within the Internet industry that websites can be coded to tell search-engine web crawlers—automated programs that “crawl” the web to locate, copy, and archive webpages for a search-engine index—not to copy their webpages or display archived copies of the webpages on the search-engine index. Id. at 1110, 1112–13. Absent this affirmative instruction, a search engine like Google infers permission to copy and archive the webpages. Id. at 1116. Yet the plaintiff had coded his website to allow web crawlers to copy and archive all its pages, and even admitted that he knew about Google’s practices. Id. at 1113–14. Because Google could reasonably interpret the plaintiff’s conduct as the grant of a license for this use, Google succeeded on its implied-license defense. Id. at 1116.

 

Field recognized an industry practice where search engines using web crawlers construe permission to use material in a limited way and for a particular purpose.

 

(…) Monika Isia Jasiewicz, Comment, Copyright Protection in an Opt-Out World: Implied License Doctrine and News Aggregators, 122 Yale L.J. 837, 846 (2012) (explaining that because “an opt-out scheme for gaining copyright holders’ permission online represents a significant departure from the traditional framework of American copyright law, . . . . some courts have been hesitant to extend Field’s reach beyond the narrow search engine context”).

 

(…) Implied permission to enter through a front door (web crawler) does not also imply permission to enter through a back window (RSS feed).

 

(…) Newstex failed to present evidence that would have allowed the jury to infer that MidlevelU granted an implied license to copy and publish the content of its blog.

 

(…) MidlevelU elected to pursue statutory damages. 17 U.S.C. § 504.

 

The district court gave the jury our pattern instruction, which lists several factors for a jury to consider in determining the appropriate amount of statutory damages to award: “the profits the defendant earned because of the infringement; the revenues that the plaintiff lost because of the infringement; the difficulty of proving the plaintiff’s actual damages; the circumstances of the infringement; whether the defendant intentionally infringed the plaintiff’s copyright; and deterrence of future infringement.” Eleventh Circuit Pattern Jury Instructions (Civil Cases) § 9.32 (2013).

 

The completed verdict form also confirms that the jury understood it could award damages for only the registered works. The jury awarded damages for 27 infringed articles. It awarded $7,500 per article—well within the available range of $750 to $150,000 per willfully infringed work. See 17 U.S.C. § 504(c)(1)–(2).

 

Newstex makes no argument that multiplying the bottom of the range by a factor of 10 is unreasonable for the added factor of willfulness.

 

(…) A “certificate of a registration made before or within five years after first publication of the work” constitutes “prima facie evidence of the validity of the copyright and of the facts stated in the certificate.” Id. § 410(c) (emphasis added). The date of publication is a “fact stated in the certificate.” Id.; see Gaste v. Kaiserman, 863 F.2d 1061, 1064 (2d Cir. 1988). And the dates listed in the certificates are presumed to be true. United Fabrics Int’l, Inc. v. C&J Wear, Inc., 630 F.3d 1255, 1258 (9th Cir. 2011).

 

 

Secondary authorities: Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 10.03[A][7] & n.69.6a (rev. ed. 2018); William F. Patry, Patry on Copyright § 5:131 (2007); Robert W. Gomulkiewicz et al., Licensing Intellectual Property: Law and Application 4 (2d ed. 2011).

 

 

 

(U.S. Court of Appeals for the Eleventh Circuit, March 3, 2021, MidlevelU, Inc. v. ACI Information Group, Docket No. 20-10856)

 

 

 

 

 

U.S. Court of Appeals for the Federal Circuit, Cheetah Omni LLC v. AT&T Services, Inc., Docket No. 19-1264

Patent Infringement

License Agreements

Patent’s Continuations

Implied License Presumption

Legal Estoppel

Legal estoppel prevents licensors from derogating or detracting from definable license rights granted to licensees for valuable consideration

Contract Drafting

Cheetah owns U.S. Patent 7,522,836 (“the ’836 patent”) directed to optical communication networks. AT&T uses a system of hardware and software components in its AT&T fiber optic communication networks.

In the district court, Cheetah asserted that AT&T infringes the ’836 patent by making, using, offering for sale, selling, or importing its fiber equipment and services. In response to the allegations, Ciena moved to intervene in the suit because it manufactures and supplies certain com- ponents for AT&T’s fiber optic systems and because those components formed the basis of some of Cheetah’s infringement allegations. The court granted Ciena’s motion to intervene.

(…) In their motion, Ciena and AT&T argued that the two prior licenses included implicit licenses to the ’836 patent covering all of the accused products. The district court agreed, granting summary judgment and dismissing the suit with prejudice.

(…) Cheetah granted to Ciena “a perpetual, irrevocable, worldwide, non- exclusive, fully paid-up license under the Licensed Patents to make, have made (directly or indirectly and solely for Ciena or its Affiliates), use, offer to sell, sell, and import and export the Licensed Products.” J.A. 411. The agreement defined “Licensed Patents” to mean

(i) the Patents-in-Suit, and (ii) all parents, provisionals, substitutes, renewals, continuations, continuations-in-part, divisionals, foreign counterparts, reissues, oppositions, continued examinations, reexaminations, and extensions of the Patents-in-Suit owned by, filed by, assigned to or otherwise controlled by or enforceable by Cheetah or any of its Affiliates or its or their respective successors in interest at any time as of, prior to, on or after the Effective Date, whether filed before, on or after the Effective Date.

J.A. 410. The “Effective Date” was defined as “the earliest date upon which all Parties had signed the Agreement or identical counterparts thereof.” J.A. 411. The “Licensed Products” were defined as

(i) all past, present or future Ciena or Ciena Affiliate products, services or combinations, components, or systems of products or services, and any modifications or enhancements thereof, that could by themselves or in combination with other products, services, components or systems, be alleged to infringe at least one claim of at least one Licensed Patent in the absence of a license under this Agreement and (ii) all Ciena products identified or accused by Cheetah of infringing any claim of any of the Patents-in-Suit in its complaint, amended complaint, infringement contentions, or otherwise.

Key to the parties’ dispute is the relationship between the ’836 and ’714 patents. The ’714 patent is a continuation-in-part of U.S. Patent 6,943,925 (“the ’925 patent”). The ’836 patent is a continuation of U.S. Patent 7,145,704 (“the ’704 patent”), which is also a continuation of the ’925 patent. These relationships are depicted below: (...)

Because the ’714 patent was asserted in the ROADM litigation, it is necessarily included in the Ciena license. By its terms, the Ciena license also includes “all parents” to the patents in the ROADM litigation, and, as the parent to the ’714 patent, the ’925 patent is likewise an expressly li- censed patent under the agreement, even if not enumerated. The question we are presented with here, however, is whether the ’836 patent, a continuation of a continuation of the ’925 patent, i.e., its grandchild, is impliedly licensed under the Ciena license. In personal terms, because the uncle and grandparent of the ’836 patent, are licensed, is the ’836 patent also licensed?

Relying on our holding in General Protecht Group Inc. v. Leviton Manufacturing Co., 651 F.3d 1355, 1361 (Fed. Cir. 2011), the district court determined that the ’836 patent was impliedly licensed as the grandchild of the expressly licensed ’925 patent. Decision, slip op. at 10. The district court reasoned that an express license of the ’925 patent included an implied license for its continuations “because those continuations disclose the same inventions as the licensed patent.” Id. We agree.

We agree with the district court, and with AT&T and Ciena, that the licenses include an implied license to the ’836 patent that extends to the accused AT&T systems. Legal estoppel prevents licensors from derogating or detracting from definable license rights granted to licensees for valuable consideration. AMP Inc. v. United States, 389 F.2d 448, 452 (Ct. Cl. 1968). In TransCore, we interpreted legal estoppel to provide an implied license to a related, later-issued patent that was broader than and necessary to practice an expressly licensed patent. TransCore, LP v. Elec. Transaction Consultants Corp., 563 F.3d 1271, 1279 (Fed. Cir. 2009).

Two years later, we considered whether an express license to a patent includes an implied license to its continuations, even when the continuation claims are narrower than previously asserted claims. General Protecht, 651 F.3d at 1361. Relying on TransCore, we answered that question in the affirmative: “Where . . . continuations issue from parent patents that previously have been licensed as to certain products, it may be presumed that, absent a clear indication of mutual intent to the contrary, those products are impliedly licensed under the continuations as well.” Id. We further explained that parties could contract around the presumption of an implied license if it did not “reflect their intentions” but that it was the parties’ burden to “make such intent clear in the license.” Id.

In General Protecht, the continuation patent at issue had not yet issued at the time of the parties’ express license of the parent patent. Cheetah attempts to cabin General Protecht’s holding to express licenses executed before the issuance of a continuation patent. We decline to read General Protecht so narrowly. The timing of patent issuance is not material to the policy rationale underpinning our implied license presumption. See TransCore, 563 F.3d at 1279. Moreover, if anything, it is easier for the parties to clearly identify an already-issued continuation and expressly exclude it from a license agreement.

(…) If Cheetah had a contrary intent, it could have made its intent clear in the agreement as a matter of contract drafting.

(U.S. Court of Appeals for the Federal Circuit, February 6, 2020, Cheetah Omni LLC v. AT&T Services, Inc., Docket No. 19-1264)