October 2012

The Supreme Court to Decide the Fate of the First-Sale Doctrine in Kirtsaeng

by Benjamin Hamborg, UMN Law Student, MJLST Articles Editor

Thumbnail-Benjamin-Hamborg.jpgLater this month, the U.S. Supreme Court is scheduled to hear oral arguments in Kirtsaeng v. John Wiley & Sons, Inc., a case which should decide once and for all whether the first-sale doctrine applies to works manufactured outside of the United States. As I described last spring in volume 13 of the Minnesota Journal of Law, Science & Technology, the case arises from Supap Kirtsaeng’s attempt to take advantage of the disparity in pricing between textbooks manufactured for sale in the United States and those manufactured and sold internationally. Kirtsaeng’s plan involved purchasing textbooks published by John Wiley & Sons, Inc.’s wholly-owned subsidiary John Wiley & Sons (Asia) Pte Ltd., then reselling the textbooks online to consumers within the United States.

While textbooks published by John Wiley & Sons, (Asia) Pte Ltd. for the international market are nearly identical in terms of content to their U.S. counterparts, the international versions sell for significantly less due to differences in quality and design. When John Wiley & Sons, Inc.–as the registered copyright holder of the United States editions of the works sold by Kirtsaeng–sued for copyright infringement, Kirtsaeng based his defense on the first-sale doctrine, which allows “the owner of a particular copy [of a copyrighted work] . . . lawfully made under this title . . . to sell or otherwise dispose of the possession of that copy” without the permission of the copyright holder.

The question the Supreme Court will face on October 29th is whether the first-sale doctrine applies to works manufactured outside of the United States, a question which the Second–in John Wiley & Sons, Inc. v. Kirtsaeng–and Ninth Circuits have already answered in the negative. The prospect of nationwide denial of the first-sale doctrine to works manufactured outside of the United States has broad implications with regard to the sale of gray-market goods within the United States. Many large United States retailers, particularly online retailers, use gray-market goods to deliver products to customers at a substantial savings. In fact, there exists “an estimated $63 billion annual market ‘for goods that are purchased abroad, then imported and resold without the permission of the manufacturer.'”

Narrowing of the first-sale doctrine may even affect the ability of libraries in the United States to lend foreign manufactured books. As Andrew Albanese recently pointed out, “if a library bought a book in the U.S. from a U.S. publisher, and that book happened to be printed in China . . . . the uncertainty the Second Circuit interpretation [of the first-sale doctrine] would create for libraries could deter many libraries from lending [the] materials in question.” Finally, if the Second Circuit’s holding is affirmed by the Supreme Court, companies that manufacture copyright-protected goods within the United States will have an incentive to move their manufacturing plants abroad so as to gain greater control over the sale of their products.


Wasted Places Report Elucidates Key Problem in Current Environmental Legal and Regulatory Infrastructure

by David Hanna, MJLST Lead Article Editor, UMN J.D./M.S. in Chemistry Joint Degree Candidate

Thumbnail-David-Hanna-II.jpgDuring a time when environmental issues flood the headlines of newspapers, magazine covers, and television broadcasts, it is hard not to come across sustainable efforts by concerned companies and institutions trying to proactively tackle these environmental issues. While these pointed campaigns and programs deserve some recognition, there is plenty of room for improvement and this improvement needs immediate legal and regulatory acknowledgment.

Recently, in her article “Wasted Places: Slow, Underfunded EPA Program Falls Short in Toxic Site Cleanups,” Kate Golden attributed limited funds, lack of federal oversight, and complex approval processes as the reasons for the hundreds of thousands of abandoned and polluted properties referred to as “brownfields” that continue to exist all over the country. Despite billions of dollars in federal grants and loans provided by the Environmental Protection Agency (EPA), there are still brownfields that are contaminating groundwater. While EPA funds are arguably one part of the sustainability puzzle, legal and regulatory infrastructure is another piece of the puzzle that has apparently fallen under the table. It should come as no surprise that the current legal and regulatory infrastructure is the root of the brownfields problem, as evidenced by current environmental issues stemming forth from insufficient legal and regulatory governance.

For example, the current controversial discussion of the natural gas drilling process known as hydraulic fracturing, or “fracking,” is one area where environmentalists have recognized and commented on the lack of EPA monitoring in regulating potential public health hazards. In “Notes from Underground: Hydraulic Fracturing in the Marcellus Shale,” Joseph Dammel examined the effect of fracking on our energy portfolio, national security, and capacity for technological innovation. Dammel proposes that courts, Congress, and regulatory agencies take reformative legal and regulatory action to address the current environmental issues posed by a technology that seems to have outpaced our lawmakers. Ultimately, this vicious, inescapable cycle is the result of insufficient legal and regulatory governance. Without intervention, the history of brownfields is likely to repeat itself through fracking.

Chemical waste management and minimization in university teaching and research laboratories is another area where legal and regulatory reform is needed. In my upcoming article, “Do Educational Institutions Score High on Their Sustainability Efforts?: A Case Study (and Grade) on Chemical Waste Management and Minimization in Teaching and Research Laboratories at the University of Minnesota,” that will be published in Volume 14, Issue 1 of the Minnesota Journal of Law, Science & Technology, I utilize the University of Minnesota, one of the largest institutions by student enrollment in the United States, as a case study to elucidate how universities and colleges have missed key areas of development and improvement of sustainability in their sustainability campaigns and programs. By evaluating the legal and regulatory framework currently in place, the article suggests ways to move forward in managing and reducing chemical waste at educational institutions like the University of Minnesota.

Whether the issue concerns brownfields, fracking, or chemical management, a big reason these environmental issues exist is a lack of legal and regulatory governance. This lack of governance might be due to key players not carrying out their delegated responsibilities. Or, perhaps, the problem stems from the laws themselves. Regardless, while funding is certainly a piece of the environmental puzzle, a legal and regulatory reformative approach at both the federal and state levels is needed to move forward and achieve a more complete picture.


Don’t Track Me! – Okay Maybe Just a Little

by Mike Borchardt, UMN Law Student, MJLST Managing Editor

Thumbnail-Michael-Borchardt.jpgRecent announcements from Microsoft have helped to underscore the current conflict between internet privacy advocates and businesses which rely on online tracking and advertising to generate revenues. Microsoft recently announced that “Do Not Track” settings will be enabled by default in the next version of their web browser, Internet Explorer 10 (IE 10).

As explained by Omer Tene and Jules Polonetsky in their article in the Minnesota Journal of Law, Science & Technology 13.1, “To Track or ‘Do not Track’: Advancing Transparency and Individual Control in Online Behavioral Advertising,” the amount and type of data web services and advertisers collect on users has developed as quickly as the internet itself. (For an excellent overview of various technologies used to track online behavior, and the variety of information they can obtain, see section II of their article). The success and ability of online services to supply their products free to users is heavily dependent on this data tracking and the advertising revenue it generates. Though many online services are dependent on this data collection in order to generate revenue, users and privacy advocates are suspicious about the amount of data being collected, how it is being used, and who has access.

And it is in response to this growing environment of unease concerning the amount and types of user data being collected that Microsoft has added these new Do Not Track features (All other major browsers are set to include do not track settings, with Google’s Chrome the last to announce them. These settings, however, will likely not be enabled by default. This, however, may not be the boon for user privacy that some have been hoping for. Do Not Track is a voluntary standard developed by the web industry; it relies on browser headings to tell advertisers not to track users (for a more in depth description of how this technology works, see pgs. 325-26 of Tene and Polonetsky’s article). This is where the problem arises-websites can ignore browser headings and track users anyway. Part of the Do Not Track standard developed by the industry is that users must opt in to Do Not Track-it cannot be enabled by default. In response to Microsoft’s default Do Not Track settings, Apache (the most common webserver application), has been updated to ignore do not track setting from IE 10 users. With one side claiming that “Microsoft deliberately violate[d] the standard,” and the other claiming that the industry is ignoring privacy for profit, the conflict over user data collection seems poised to continue.

A variety of alternatives to the industry implemented Do Not Track settings have been proposed. As the conflict continues, one of the most commonly proposed solutions is legislation. Privacy advocates and web companies, however, have very different views about what Do Not Track legislation should cover. (For differing viewpoints see “‘Do Not Track’ Internet spat risks legislative crackdown). Tene and Polonetsky argue that a value judgment must be made, that policymakers must evaluate whether the “information-for-value business model currently prevailing online” is socially acceptable or “a perverse monetization of users’ fundamental rights,” and create Do Not Track standards accordingly. Unfortunately, this choice between the generally free-to-use websites and web services users have come to expect on one hand, and personal privacy on the other, does not seem like much of a choice at all.

There are, however, alternatives to the standard Do Not Track proposals. One of the best is allowing the collection of user data to continue, but to legally limit the ways in which that data could be used. Tene and Polonetsky recommend a variety of policies that could be enacted which could help to assuage users’ privacy concerns, while allowing web services to continue generating targeted advertising revenue. Some of their proposals include limiting user data use to advertising and fraud prevention, preventing the use of data collected from children, anonymizing data as much as possible, limiting the retention of user data, limiting transmission of data to third parties, and clearly explaining to users what data is being collected about them and how it is being used. Many of these options have been proposed before, but used in conjunction they could provide an acceptable alternative to the strict Do Not Track approach proposed by privacy advocates, while still allowing the free-to-use, advertising-based web to thrive.


Mashing up Copyright Infringment with the Beastie Boys and Ghostface Killah

by Eric Maloney, UMN Law Student, MJLST Staff

Thumbnail-Eric-Maloney.jpgApparently, Bridgeport Music has never seen the episode of Chappelle’s Show declaring that “Wu-Tang Clan ain’t nothing to [mess] with.” The record label has decided to sue the group, specifically artists Raekwon, Ghostface Killah, Method Man, and producer RZA, for reportedly using a sample of a 1970’s recording originally by the Magictones on a 2009 Raekwon album track. The portion of the recording allegedly utilized in production of the song was sped up to change the sample’s key from E minor to F# minor, and constituted four measures of the original tune. The sample was only ten seconds long.

Wu-Tang Clan isn’t the only group currently under scrutiny for their use of sampling. The Beastie Boys are also facing an infringement suit, due to allegedly sampling two songs by a group called Trouble Funk in four of their tracks from the late 1980’s. This suit is different in at least one respect from the Bridgeport matter: the record company, Tuf America, will have to show not only infringement, but also explain why the suit shouldn’t be barred by the statute of limitations after over 20 years have passed since the Beasties released these songs.

These lawsuits are hardly novel; hip-hop and electronica artists have been subject to infringement liability for years now due to the rise in their use of digital sampling methods. The Beastie Boys especially have been repeatedly sued for using unauthorized samples. (See, e.g. Newton v. Diamond, 204 F. Supp. 2d 1244 (C.D. Cal. 2002). For a great summary of the history of sampling in music production and court cases regarding infringement, see Professor Tracy Reilly’s article Good Fences Make Good Neighboring Rights in the Winter 2012 issue of the Minnesota Journal of Law, Science & Technology.

As Professor Reilly indicates in her article, the latest federal appeals court to directly address this issue has taken a hard-line stance: appropriation of any part of a sound recording is a physical taking, no matter how minute the sample may be. That case, Bridgeport Music v. Dimnesion Films, featured the same plaintiff record company that is now suing Wu-Tang Clan. The Sixth Circuit Court of Appeals in this instance held that there is no type of de minimis protection for use of small samples; instead, any unauthorized, direct sample of a protected recording subsequently used by an artist constitutes infringement.

The risk that courts run in following such a bright-line doctrine is that they may be a bit behind trends in culture and technology in dealing so harshly with those who choose to sample copyrighted works. So-called “mash-up” artists, such as Greg Gillis of Girl Talk, make a living through exclusively sampling copyrighted works and then distributing them for free under the penumbra of “fair use.” His sampling is both notorious and fairly obvious; there are websites dedicated to tracking which samples he chooses to use in his productions. Gillis is still able to make a living by touring and selling merchandise, while also speaking out against current copyright infringement standards.

As digital sampling techniques continue to improve and the demand for “mash-up” artists grows, the Bridgeport ruling will start to look dated in the face of the reality of modern-day music production. This is especially true in the case against the Wu-Tang Clan, where it appears somewhat absurd to condition liability on such a small amount of sampled music. For now, though, artists will need to stay on their toes and be sure to license any samples, no matter how minimal, or face the consequences. This doctrine may stifle creativity for the time being, but perhaps all this legal wrangling will give artists emotional fodder for future compositions. Either way, it’s becoming clearer as more of these suits are brought that greater clarity on the issue is needed, either from Congress or the courts. A better balance between encouraging creativity and protecting copyrights than what is given to us by Bridgeport can hopefully be found as this area of law continues to evolve.


Food Label Regulations Fall Short

by Bobbi Leal, UMN Law Student, MJLST Articles Editor

Thumbnail-Bobbi-Leal-ii.jpgA recent study, published in Agricultural Economics, found that the average body mass index for consumers that read nutrition labels is lower than those that do not read the labels. This finding implies that understanding and utilizing food and nutrition labels provides consumers with the information needed to make informed decisions about what they eat. However, a recent article by J.C. Horvath published in the Minnesota Journal of Law, Science & Technology, “How Can Better Food Labels Contribute to True Choice?” makes evident that food labeling has a long way to go before it truly gives consumers the information necessary to make informed decisions.

Food label regulations, outlined by the Food and Drug Administration, have a number of flaws. The FDA has declined to define strict standards for use of the food label “all-natural,” claiming that the term is too nebulous to be strictly defined and standardized across the entire food industry. Undoubtedly, consumers assume that a food labeled as “all-natural” has not been chemically processed or structurally altered from its natural state. Unfortunately, this is not the case. The FDA has a vague policy which defines the term “natural,” to mean “nothing artificial or synthetic…is included in, or has been added to, the product that would not normally be expected to be there.” According to the Wall Street Journal, some ingredients that have been labeled as “all-natural” include high fructose corn syrup, genetically modified plants, and sodium benzoate.

Similarly, the approved use of certain terms, such as “artificial flavor,” “natural flavor,” and “artificial coloring” often hide significant details about the nature of the food. These three phrases can stand in for over 3900 food additives that come from a wide range of sources, giving the consumer no real notice of the substance or origin of the “flavor” or “coloring.” For example, beef tallow, gelatin, and lard can all be covered by these three phrases. Even the requirements for listing allergens is incomplete, as the FDA only requires that eight of the known allergic-reaction-inducing ingredients be explicitly listed: milk, eggs, fish, Crustacean shellfish, tree nuts, peanuts, wheat, and soybeans.

This recent study concerning the use of nutrition labels makes clear that when consumers read and understand food labels, they can make better choices for their health. In order for this to occur, however, it is imperative that the food labels which consumers rely upon are transparent and accurate. Food label regulations have not yet accomplished this objective.