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Fair Dealing Among YouTubers

A recent decision of the US District Court for the Southern District of New York regarding a dispute between “YouTubers” is getting a fair amount of comment, as it is one of the first cases of its kind regarding the use of YouTube video clips.  Ethan and Hila Klein who operate the YouTube channel H3H3 posted a video that criticized a video posted by fellow YouTuber Matt Hosseinzadeh.  The H3H3 video featured clips from the Hosseinzadeh video and Hosseinzadeh took exception to both the use of the clips and the comments that were made.   Hosseinzadeh sued the Kleins for copyright infringement and defamation.

U.S. copyright law contains “fair use” provisions. Criticism is one of the exceptions to copyright infringement that is considered to be “fair use”.  There was no question that the use constituted “criticism”, and the District Court Judge focused upon whether  the use was “fair”, so as to  fall within the “fair use” exception.  Large portions of the Hosseinzadeh video were used by H3H3.  However, the Judge was satisfied that this was necessary in order for H3H3 to comment and critique the Hosseinzadeh video.  The effect of the H3H3 use on the potential market for the Hosseinzadeh video was examined.  The Judge was satisfied that the H3H3 video was not a substitute or replacement of the Hosseinzadeh video.    In the end result, the Judge decided that the use by H3H3 was “fair use” and that, although critical, the comments H3H3 video contained were not defamatory, but merely “non-actionable opinions”.   It is to be noted that the fact the Hosseinzadeh video was a scripted and fictional creative work played a role in the Judge’s characterization of the critical comments as “non-actionable opinions”. The critical comments focused upon the fictional creative work and could not be construed as a personal attack upon Hosseinzadeh.

The question then becomes what is the comparable situation in Canada.  In Canada “fair dealing” is analogous to the U.S. concept of “fair use”.  Section 29.1 of the Canadian Copyright Act contains a provision expressly contemplating “fair dealing for the purpose of criticism or review” as an exception to copyright infringement.

29.1 Fair dealing for the purpose of criticism or review does not infringe copyright if the following are mentioned:
(a) the source; and
(b) if given in the source, the name of the
(i) author, in the case of a work,
(ii) performer, in the case of a performer’s performance,
(iii) maker, in the case of a sound recording, or
(iv) broadcaster, in the case of a communication signal.
It would appear to the writer that, as long as section 29.1 is complied with, the Canadian Courts would view these issues much as the U.S. Courts have done. In this context, it is no different than a television movie reviewer reviewing a move about to open in the theatres.   However, the Court will look at the quantity of video material taken to determine whether the resulting work is intended as or could be used as a “substitute” for the original work.  The Court will also look at whether the critical comments are “non-actionable opinions” on a creative work or constitute a defamatory personal attack.

In the writer’s opinion, even greater care must be taken if the video clips are not of a “creative” work, but rather of a serious video post expressing an opinion.  In such cases, taking too much of the serious video, could be viewed as a substitute for viewing the serious video.  Conversely, taking too little of the serious video could leave the opinion without support and out of context, thereby subjecting the person who posted the serious video to ridicule.  Also care must be taken to criticize the opinions presented and not include extraneous comments that could be construed as a personal attack. With the number of bloggers on the internet, one can expect more of these kind of conflicts to arise in future.  One way to gain followers will be to post commentary on video material posted by persons who may have more followers than you.  For example, many persons are presently becoming known on the internet by posting criticism of Donald Trump.

Complaint Websites use of Parody

The Federal Court decision by Mr. Justice Phelan on June 23, 2017 in the case of United Airlines, Inc v. Jeremy Cooperstock provides some guidance to persons considering establishing complaint websites.

Cooperstock operated a complaint website under the domain name UNTIED.com, which he registered and launched on or about April 24, 1997. Cooperstock chose the domain name UNTIED.com as a play on the word “United”, so as to highlight the disconnection and disorganization that he perceived in the company.  UNTIED.com operated as a consumer criticism website where visitors  could find information on United, submit complaints about United, and read complaints about United dating back to 1998 in the database of complaints.

Following a redesign of UNTIED.com in September 2011, United became aware of a strong resemblance between UNTIED.com and the United Website. UNTIED.com was updated again in June 2012 to mirror the United Website design launched in March 2012.  United contacted Cooperstock, and Cooperstock made certain alterations to UNTIED.com.  He changed the colour of the T and I in the Untied Logo to red (from blue) and changed a frown on the Frowning Globe Design to red (from blue).  He also added a disclaimer and a pop-up dialogue box to the website indicating that this was not the website of United. The disclaimer, stating “(This is not the website of United Airlines)”, was placed at the top of the website in small black type – next to  a graphic identifying “Untied” as “An Evil Alliance Member”.

Justice Phelan noted that parody and satire are not defences to trademark infringement.  Justice Phelan quoted from the Green v Schwarz case, “notwithstanding that the Defendant is obviously spoofing the Plaintiff’s trade mark, he is also cashing in on the goodwill that the Plaintiff has obtained for its trade mark”.    A Trademark confusion analysis was then performed.
“ Cooperstock’s obvious imitation of the United Marks and the United Website is meant to cause visitors to associate UNTIED.com with the United. The small details differentiating the marks are less important than the general appearance of the marks and of the websites. Cooperstock attempted to differentiate the two Globe Design marks by “zooming in” on the image to show that his globe mark included a red frown. This would not be the approach of the hurried consumer with an imperfect recollection. Further, consumers would not be engaging in a side-by-side comparison of the two marks, particularly if they are unaware that there is any need to be diligent in this regard (i.e., if they are not aware that a “spoof” website exists).  I find that there was ample evidence adduced to support a finding that there is a likelihood of confusion.  The changes that Cooperstock made to the United Marks were small and were designed to maintain his core purpose: identification of his website with United.”

Justice Phelan noted that although parody is not a defence to trademark infringement. parody may be a defence to copyright infringement in that parody is now an allowable purpose under s 29 of the Copyright Act, which  reads:
29 Fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright. (emphasis added)

Mr. Justice Phelan  held that the alterations to  United’s copyright materials  constituted parody:
“Parody should be understood as having two basic elements: the evocation of an existing work while exhibiting noticeable differences and the expression of mockery or humour. In my view, UNTIED.com falls within the definition of parody described above: it evokes existing works (the United Website, the United Logo, and the Globe Design) while showing some differences (such as content and disclaimers), and it expresses mockery (and criticism) of the United.”

Justice Phelan then  considered whether the use of parody in this context was “fair dealing”; as Cooperstock  was required to prove that his dealing with the work of United  had been fair in order to obtain the protection of s. 29 of the Copyright Act.
“It is unclear why substantial copying of the United Website or the other copyrighted works was necessary in order to meet the parodic goal of humorously criticizing the United; as discussed above, parody requires humour, whereas Cooperstock’s website was simply mean-spirited. The minimal use of certain parodic elements in the past (i.e., “fly the unfriendly skies” and the wordplay between “united” and “untied”) present an example of an alternative to the current dealing. Indeed, if the Cooperstock truly wished the best outcome for the United’s passengers, it is unclear why he would run any risk of confusing passengers.   In my view, it is the substantial copying of the United’s copyrighted material that is having a harmful impact, not the criticism contained on UNTIED.com. Negative commentary regarding the United abounds on the internet. United is not so much concerned with the informational aspect of UNTIED.com (which may lead customers to purchase tickets with other airlines) as it is with the potential that customers will believe they are interacting with the United when they are actually interacting with UNTIED.com (which may, in turn, cause customers to believe that the United is unprofessional or that it does not respond to complaints).”
In his reasons for Judgement, Justice Phelan summarized Mr. Cooperstock’s position as follows:
“Parody is not simply a defence to copyright infringement – it is also an aspect of free speech. However, like all free speech, it is not unrestricted.  Cooperstock’s website meets the first step of the CCH test, as it is for the allowable purpose of parody, but it does not meet the second step of the test. The questionable purpose of the dealing, amount of the dealing, and effect of the dealing all weigh in favour of the conclusion that this dealing is not fair.”
“in this case, Cooperstock sailed too close to the wind – and he was put up on the rocks”.

CAT CHASES DOG (DANGERS ASSOCIATED WITH PUBLICLY ACCUSING A COMPETITOR OF INFRINGEMENT)

A client called me the other day to discuss some steps he wished to take against a competitor who was infringing his patent.    The client wanted to write letters to some major companies that were purchasing product from the competitor, to make them aware of the infringement and advise them that he would be forced to sue them if they continued to purchase the competitor’s product.  The second step he wished to take was to place an advertisement in a magazine widely read in the industry, to inform companies in the industry of the alleged infringing activity by the competitor.  I advised my client that there were some practical reasons why taking these steps might end in disaster.   Firstly, when you threaten companies with legal action, they are not inclined to do business with you.  In other words, it is bad for business to sue customers.  Secondly, when you make statements tending to discredit the business of a competitor you are “potentially” breaching section 7 (a) of the Trademarks Act which reads:
“No person shall make a false or misleading statement tending to discredit the business, wares or services of a competitor.”
My client protested that everything he was going to place in the letters and the advertisement was absolutely true.    In the recent Federal Court case of Excalibre Oil Tools V. Advantage Products, a businessman with the same attitude as my client found out the hard way the risks of making statements about a competitor that turned out to be false.   Advantage sent letters to customers of Excalibre alleging infringement of three patents. However, when the patent infringement action subsequently proceeded to Court, Advantage Products lost; the Court found key claims to be invalid and the remaining valid claims not to be infringed by Excalibre.  The case is presently proceeding to the “damages” phase to determine the amount Advantage Products is going to have to pay as compensation to Excalibre for making false and misleading statements that discredited the business of Excalibre.   Why give your competitor grounds to counter-claim?  If you believe your competitor is infringing, communicate directly with the competitor and, if the matter remains unresolved, sue.