Tuesday, March 29, 2016

“Direct Financial Benefit” and Vicarious Infringement. Or, I Don’t Think That Means What You Think It Means



Well, last week’s post brought this blog back from the dead, and did it with a bang! I had more page hits in the two weeks than I’ve had in the entirety of the blog’s history! Apparently, this got shared around Facebook rather extensively, and last week, David Post, who writes for The Volokh Conspiracy on the Washington Post website, linked to my post for his op-ed piece on the Axanar lawsuit (calling my post an excellent summary of the background)!

Since I’ve garnered so much attention, I figure it would be near criminal of me to let this blog lay fallow again. Fortunately, I have more to say, and specifically on the topic of the last post.

As I said in my last post, Mr. Peters has a number of detractors. They are the ones who go on about how Mr. Peters used the money donated for Axanar to build a “for-profit” studio, or Mr. Peters’ salary, or how he “sold coffee” to fund the production, and how all this was his way of “making money” off the IP of Star Trek. Moreover, they say this is why CBS and Paramount are suing Axanar.

For his part, Mr. Peters has said repeatedly that this lawsuit is not about money, but about allegations of copyright infringement. Presumably, he’s in a better position to know what CBS/P’s concerns than the general public is. However, there is a line in the complaint which alleges the defendants receive a “direct financial benefit”. The detractors have used that line to bolster their narrative, and call Mr. Peters a liar.

It does seem to pose an apparent paradox. How can a lawsuit not be about money when it says “direct financial benefit” right in the complaint? However, to paraphrase a line from The Princess Bride, that line doesn’t mean what they think it means.

The suit claims all the different type of copyright infringement that can be claimed, of which there are three. The first is direct infringement, which is rather self-explanatory. The other two are what are known as “secondary infringement”. It is somewhat analogous to aiding and abetting infringement. These are called contributory infringement, and vicarious infringement.

In order to claim vicarious infringement, two things must be true:
1) The person this is claimed against must have the right or ability to influence or control the actions of the infringing party.
2) The person this is claimed against must receive a direct financial benefit from the actions of the infringing party.
One example of this would be if a theater hires a band to play music, and that band plays copyrighted music they don’t have license to play. Another would be a flea market or swap meet renting space to a person who sells pirated DVDs. In either case, the venue owners would be guilty because they have control over the actions of the infringing parties, and they benefit financially from the infringing actions. For a more concrete example, this is one of the two ways Napster was found guilty of copyright infringement (contributory infringement being the other).

Now, of the three types of infringement that can be brought, only vicarious infringement carries with it the necessity of proving a financial component to it. And sure enough, if you look at the complaint, the only place that phrase occurs in the complaint is in the section which alleges vicarious infringement. Therefore, mentioning “direct financial benefit” is basically boilerplate language for making that allegation. So while the language is there (mainly because it has to be), the intent which it is a part of is to allege copyright violation. In which case, Mr. Peters is not lying when he says this suit is about copyright. Only those who practice the dark art of Pedantry could argue otherwise.

Moreover, (and this is where me being not-a-lawyer comes in) I’m at a loss to figure how that type of infringement comes into play in this particular situation. Personally, I’m inclined to go with my previous speculation that this complaint was written mainly to intimidate Axanar Productions into bending to their will.

But, most importantly, I don’t see how the paying of salaries, building out a soundstage, the amount of money donated to the production, or any of the other things the detractors bring up to say that it’s about money and Mr. Peters is a liar fits into the specific meaning of the phrase “direct financial benefit” as I’ve just outlined above. It’s really not a brush one can paint the production with.

In other words, I’m pretty sure that phrase doesn’t mean what the detractors think it means.

38 comments:

  1. You mention the building of the studio... A direct finanacial benefit would be to create a viable functioning business asset that can be used for future profit generating projects from money gathered on the back of the Plaintiff's IP.

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  2. Assuming for the sake of argument that your characterization of the studio is correct, explain how a person or people building out a soundstage constitutes direct copyright infringement in the first place.

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    1. I never mentioned copyright infringement, nor did you. Look at the title of your blog post.

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    2. Can't believe I overlooked this little bon mot!

      Sandy, did you even read the post? Please do, or at least go read about what vicarious infringement is on your own, and get an understanding of the mechanics of it! To be guilty of vicarious infringement, you have to 1) Be in a supervisory position over the person who is infringing directly, and 2) receive direct financial benefit from the infringing activity. You're positing that the building out of a soundstage constitutes a direct financial benefit to Axanar Productions. Bearing in mind the mechanics of vicarious infringement, how does building out a soundstage (the act which you claim directly benefits Axanar financially) constitute copyright infringement?

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  3. Curly boy, you are not a lawyer and clearly know neither the law, nor what constitutes "direct financial benefit".

    And what exactly is a "business asset"? Do you even know what that means? Axanar created a LIABILITY by signing a 3 year lease. That is no asset. If they are smart enough to be able to rent out their soundstage to pay the rent, it still isn't an "asset". An "asset" is something you own.

    So tired of armchair lawyers who think their liberal arts education (if that) qualifies them to comment on a legal case.

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    1. Agreed, a point of revenue is not an asset. Otherwise the whole business is an asset

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    2. Are you a Lawyer, Joe? Let me explain. The assets are the contents of said structure. Just because they rent does not mean that they didn't accrue assets. Before you start talking about the law, do a bit of reading. Clearly you are not a lawyer.

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    3. Paul, I would imagine that their lease requires them to leave any added fixtures in place. However, this misses my question above about how building a soundstage constitutes primary copyright infringement?

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    4. Right, I'll try again without using any words that can have multiple legal meanings.

      Peters has made a thing that can be used to make other things that can earn him money. This thing was created using money that he raised using someone elses property. If he hadn't raised the money in that way he wouldn't have been able to create his thing. Therefore, the thing and any other thing created by/with the thing could be considered as direct financial gain.

      As far as the "asset" or "liability" question goes, leases can be bought and sold. When a business is sold it is often done with the name, clients, product, AND premisis. The premesis (including the remaining term of the lease) is a business asset.

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    5. Curly, what you describe doesn't fit the definition of vicarious infringement. In what you describe, Mr. Peters would be the primary infringer.

      And you're off the mark on leases. Someone can take over a lease from someone else, but the property is only an asset for whoever owns the property. Whoever leases the property owes money for using the property. THAT is a liability.

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  4. With recent release of Horizon, and not a sign of even a hint of a lawsuit anywhere to be found, the real question remains, would a suit of infringement against Axenar go anywhere in any realistic court action? Regardless of any opinion by any Paramount or CBS attorney, regardless of any statute, does anyone without an ax to grind think any judge will not see the ocean of precedent CBS/Paramount have set by not doing a Disney and jumping on any case of infringement they find and be influenced by that? Hint: any attorney thinking a judge will not seriously needs to consider another career path.

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    1. I'm not really sure that matters. When talking trademarks, a history of defending or not defending a particular trademark is vital to the discussion, and is often the basis for dismissing a claim.

      The same thing does not apply to copyright. Copyrights attach automatically as soon as a work is "fixed" in a medium. Rights holders can defend the claims as they see fit, and typically whether or not they have in the past is irrelevant.

      That said, I think the lawsuit is a farce, and seems to be only coming up now because CBS is planning on launching a TV show next year. This is a warning shot.

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    2. Well, copyright law does allow you to cherry-pick enforcement, unlike trademarks which have to be defended continually. Wearing my not-a-lawyer hat and doing some sheer speculating, were this to go to trial, the best impact of showing Axanar being singled out from all the other fan productions would probably be to limit the damages the jury would award. One thing that gets overlooked in all this is that the matter will ultimately be decided by 12 citizens. Not a judge, not some computer, but 12 Average Joes and Janes.

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    3. Michael, as the law reads, you do have copyright at the moment of creation, but to actually bring an infringement suit, the work must still be registered.

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    4. Michael, I think you hit it on the head. If they were not launching something new, this would never have been an issue.

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    5. Renegades launched 'something new' in a time period set well after Star Trek Voyager. Axanar is 'new' only in the sense that it is telling a new story based on a character seen once in TOS and about an event for which we only have a name. The only difference seems to be in amount of money raised and quality of production. Heck, Renegades even rented out a movie theater to premier their movie pilot last year in Vegas during the 49th convention (I was there).

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  5. My only questiuon is: what happens to the sets, costumes, sound stage and whatnot after the Axanar movie is done? If anyone keeps anything, can that be claimed as a financial benefit gained from licensed material?

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    1. one would imagine that it would remain in their props dept. (in the case of props and costumes) and the sound stage would be broken down much like every other movie/theatrical production in history.

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    2. Well, the soundstage is in a rented warehouse, so that is a liability on their books. As for the rest, I don't actually know, but I don't think it fits what I've laid out in my post. Most of the examples I've seen has to do with vicarious infringement shows the person accused of it making money directly off the primary infringer's actions.

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    3. Not really since that material would have been created SPECIFICALLY for a certain movie - that's not something you can easily repurpose for other projects, nor it is material that is apt to end up being worth more than what you paid for it. It's also something unavoidable when making a movie so if you call it an "asset" then every fan production ever has "made a profit," which would represent a pretty absurd argument.

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    4. "nor it is material that is apt to end up being worth more than what you paid for it".
      I can imagine a very similar statement being made back in 1969, regarding TOS sets, props, and wardrobe... but then, I'm sober (damn-it).

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    5. This comment has been removed by a blog administrator.

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  6. All of Axanar's fundraising has been based upon Axanar Productions claiming it is a professional independent Star Trek production company, making a film set in the Star Trek universe, telling a story anchored by characters and species in the Star Trek universe. In spite of the reducto-ad-absurdum legal defense of picking out each detail like pointed ears and saying that in isolation, this detail cannot be called copyrightably "Star Trek", the defense has already admitted they were doing in its aggregate is Star Trek, as have countless of the Axanar fans. So there really is no hope, nor true ethical justification, for seeking a win against a copyright case in front of a jury.

    Knowingly pursuing this path anyway, instead of settling, says something about the Axanar management's view of ethics. And of their view of Star Trek fans -- after all the claims of being the standardbearer of "true" Star Trek, Axanar claims they are in no way Trek. After all the claims of being ready to begin shooting in January or February, suddenly there isn't even a film to be found. What must Axanar management think of fans, to say both things at once?

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    1. No wonder you post anonymously with drivel like that. You clearly have no clue what you are talking about. It isn't even worth addressing your "points" since they make no sense and have no basis in reality.

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    2. How is that drivel Joe? It's spot on. Anyone who denies that Star Trek is owned by CBS/Paramount is simply wrong and needs to get their head out of their fanboy ass. Is Axanar making a Star Trek film? Yes again, they admit it themselves.

      Is what they are doing illegal? Now, that IS the interesting question and one only the judge can ultimately decide.

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  7. First, this doesn't speak to the point I was trying to make. Second, Axanar's PR director Mike Bawden has stated that they'd love to sit down with CBS/P and address their concerns. Perhaps there's been no settlement because any overtures made in that direction have been rebuffed to date. You and I simply don't know. Third, your characterization of the defense counsel's MTD against the amended complaint is reductio ad absurdum in and of itself. CBS/P threw as much crap against the wall as they could and claimed it as copyright protected, including a goodly number of items which aren't protected by copyright. The defense rightly called out those items, plus a few that surprised even myself.

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  8. Anonymous: I'd like you to post your source(s) for your statement above.

    I was made aware of, and have followed this project from Facebook/YouTube... and do not recall EVER seeing anything that fits your claim as stated. In fact, Alex has posted the reasons why that is NOT the case... and a good bit of it long before the lawsuit was ever filed. I've personally spoken with Alex regarding working on aspects of the audio (music and sound design/fx), which I would not have done if I thought there were any issues whatsoever.
    Aside from that... considering the depth and scale of the entire project, you're far from convincing me that Alex, and the DONORS (some of which are attorneys and execs in the industry who are Trek lovers), are so dimwitted as to even begin a project like this that had any chance of being stopped, much less sued for damages.
    I mean, I suppose I could be wrong... but you're gonna,have to prove it to me.

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  9. Anonymous: I'd like you to post your source(s) for your statement above.

    I was made aware of, and have followed this project from Facebook/YouTube... and do not recall EVER seeing anything that fits your claim as stated. In fact, Alex has posted the reasons why that is NOT the case... and a good bit of it long before the lawsuit was ever filed. I've personally spoken with Alex regarding working on aspects of the audio (music and sound design/fx), which I would not have done if I thought there were any issues whatsoever.
    Aside from that... considering the depth and scale of the entire project, you're far from convincing me that Alex, and the DONORS (some of which are attorneys and execs in the industry who are Trek lovers), are so dimwitted as to even begin a project like this that had any chance of being stopped, much less sued for damages.
    I mean, I suppose I could be wrong... but you're gonna,have to prove it to me.

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    1. Which claim, exactly? That Axanar called itself a professional independent Star Trek production (Kickstarter)? That they claimed they are the standard bearer of true Trek (podcast)? That they are in no way Trek (can't be sued as Trek, per the lawsuit response)? That they were ready to being shooting in January or Febuary 2016 (the Axanar website)?

      Look, I am sure among so many donors, there are plenty of responsible people, and skilled people. There are dedicated artists on the staff. Personally I have no doubt of any of that.

      But there is a situation here at a high level. CBS/P says Trek is theirs, and a jury won't dispute that in principle. Axanar is plainly seen to have been asserting they are doing Star Trek.

      However it got to this point, when CBS/P said stop, the only proper thing for Axanar to have done was stop, and ok sure, try to negotiate, but stop. Not bring a legal defense, not in such a clear situation.

      The defense is arguing that the specifics cited by CBS/P don't add up to proving CBS/P have applicable copyright rights on Star Trek. There is just something fundamentally wrong about this assertion.

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    2. Did you even bother to read the Motion to Dismiss? Clearly not. I think a top tier IP litigation firm like Winston and Strawn know more about the issues than you.

      And the law is not as black and white as you (and clearly Paramount) seem to think. Heck, Paramount doesn't even OWN the copyrights so that alone is reason to mount a defense.

      Leave the law to lawyers. You haven't a clue.

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    3. I've read both motions to dismiss.

      I am really only talking about the overall outcomes. Clearly, individual points might sometimes have their grey areas, and Axanar has a right to pursue these if they wish.

      But if you step back from those and ask "is it sensible for Axanar to assert that CBS/P lack sufficient rights to claim Vulcan and Vulcans as the collection of characteristics taken together, are portrayed the same in Trek and Axanar, and therefore there is copyright violation", there appears to be a lot less room for grey.

      The latest motion to dismiss asserts that if you tweeze out each detail of Vulcans separately, no separate detail regarded in a vacuum can be called "Vulcan", as a copyrightable element of Trek. Surely even amateur readers of the lawsuit would ask about the aggregate claims as well, such as the character Soval, not just Soval's ears.

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  10. The comment was a response to the article, not your comment, as evidenced by the indent.

    Whether Axanar might now be pursuing settlement begs the deeper question of why they didn't unilaterally respond to the lawsuit by pursuing settlement, and skip the unjustified court response. This remains the only ethical thing they could have done.

    Regardless of what CBS/P threw at the wall, the basic fact remains that Axanar adamantly for several years insisted they were doing Star Trek. No jury is going to accept that they are looking at a Vulcan, but they are not permitted to see a Vulcan, only pointed ears. They just aren't.

    Perhaps there are arguments to be won, such as whether a copyrighted language can be used if it is not extended (court says no, in the case of a very recent computer API challenge, but maybe there is more to say).

    But a reasonable person has to admit Axanar was doing Star Trek. Therefore, they cannot win a copyright court battle.

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  11. How do you know that Axanar didn't pursue a settlement? Do you have some insight? Are you on the distribution list? No. You are not. You have no clue. Axanar very well may have offered a settlement already. YOU would not know.

    And enough with the "They cannot win" bullshit. You clearly aren't a lawyer and don't know squat. Winston and Strawn wouldnt have taken the case if they didn't think there was a case. And judging by what the legal community is saying there clearly IS a case.

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    1. Hi, my point has not been whether Axanar is pursuing a settlement now, or even whether there has been an offer. Obviously, no one outside the parties involved, and perhaps those on an insiders email list, would know this.

      My point is that by challenging the rights of CBS/P in court, instead of *simply* pursuing settlement, Axanar has made a mis-step.

      If it gets to discovery, Axanar would have to produce a lot of costly documentation and go though many months of delays.

      If it gets to court, no sensible jury would agree Axanar is not Trek.

      Even if Axanar gets the case dismissed shortly, Axanar has poked the bear, and it would not end. It seems quite unlikely that the rest of the entertainment industry would allow such a broad precedent on copyright to stand unchallenged, and Axanar would face all the studios at appeal.

      Finally, to the 99.however many 99's percent of Trek fans who are not particularly Axanar fans, having no better arguments than "pointed ears do not a Vulcan make",

      ...even when used on a character called a Vulcan played by an actor known as a Vulcan in Trek, using the same character name as a well known Vulcan character in Trek, on a planet called by the actors Vulcan and with recognizable scenery from Vulcan...

      this position, suggesting to fans not dedicated to Axanar that they should buy this argument, and a bunch of similar ones, is a mistake, because fans will just stare at it and ask what are you talking about, why are you doing this.

      These sorts of ideas really do not really seem to require being an attorney assess, they pretty much stand as common sense.

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    2. Anon (and this is a plea to ALL commenters), I would generally prefer that comments pertain to what I posted. My post has nothing to do with last night's filing of the motion to dismiss.

      That having been said, I do want to address your comment. First off, I see nothing wrong with what Axanar is doing by retaining a high-powered IP litigation firm. If they went straight to trying to settle from the moment the suit was filed, their negotiating position would be pretty shitty. CBS/P's original complaint was pretty much written with the assumption they would do just that. The result of the MTD could, and may very well be likely, result in Axanar Productions being in a better negotiating position.

      Now, you off the mark somewhat with your Vulcan ears point, because you are ignoring the fact that CBS/P claimed pointed ears as a copyrighted work. It's the plaintiffs who made that point, and the defendants are responding to it. I would go so far as to say the defendants would have to respond in kind, as to let it go unchallenged would be to admit that CBS/P has copyright on pointed ears.

      Also, to say the entire MTD is about the pointed ears is way off the mark, for it has a whole lot more arguments in it than just that.

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  12. And there is this to consider as well. If Axanar WINS this challenge, and is allowed to continue production over CBS/P's objections, then the owners, CBS/Paramount will have LOST all control over the property. There would be nothing left to stop Warner Brothers, 20th Century Fox, or even Disney from going into immediate production of their own Star Trek TV series/Moves which would be disastarous to continuity...granted Trek has never been big on that anyway, but still. The other studios would have the Axanar Defense to fall back on as 'precedent'. Not good. (Personally, I still think the whole thing is about the Ares Studios for profit business and CBS/Paramount wanting a piece of that financial pie (what ever that turns out to be) and not truely about copyright at all despite the wording of the lawsuit. This is not something I expect CBS or Paramount actually WANT to go to court, but rather a 'negotiating point' on getting their fingers into Alec Peter's wallet.

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    1. Ken Mayes:
      "nothing left to stop Warner Bros., Fox, etc."... ummm yeah. They are all non-profit... right?
      No?... Well... that might stop 'em.

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  13. Anonymous:
    Whoa fellers. None of this is worth havin' a spell over. It seems to me that this issue is gonna be, for all of us NOT being called to the principal's office, pretty much moot... like the Presidential election. No matter what any of us do or don't do... intensely active, or out of the country for the duration, if you're not a player, and I'm not... we are both part of the orchestra playing tacet for the whole concert.
    All I'm saying is: that if you are citing specific claims, it helps to list your references so ppl can work with it from there, instead of having to scroll paragraphs or pages at a time, just to follow.
    I'm already at the point of dropping it... and for no other reason than this is more trouble than I want to bother with... and not at all interested in searching as described above.
    I merely said that "I don't recall seeing...", so I asked you to post the front-end of your claims, so I/we can tie 'A' to 'B' to 'C'. Otherwise, we're all just having to assume that you are honest, and actually know a little something about what you're claiming to know about... and... you understand... we DON'T know you.
    If you think that reasonable... do it. If not, don't.
    As to which... all. Because I may not be a lawyer... but I'm certainly not a paralegal, and have any number of other things I'd rather be doing.

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