The Copyright Act gives legal protections to original works of authorship that are fixed in a tangible medium. The rights granted by the Copyright Act include a “bundle” of rights including, among other rights, the right to make copies of the original work and the right to exclude others from using or making copies of the original work. But what does it mean to make a “copy?”

Two US Courts of Appeals have held that, for purposes of the Copyright Act, “copying” has two components: embodiment and duration. According to the courts, these two requirements are found in the Copyright Act itself. Section 101 of the Act defines “copies” as “material objects, . . . in which a work is fixed . . . and from which the work can be perceived, reproduced, or otherwise communicated.” Further, the word “fixed” is defined as an embodiment that “… is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.” See 17 U.S.C. § 101.

The most recent case was decided by the Ninth Circuit in CDK Global LLC v. Brnovich, Case No. 20-16469 (US 9th Cir., Oct. 25, 2021). That case involved a statute allowing Arizona car dealers to access data from specialized software known as a dealer management system (“DMS”). As the court explained, the core of a DMS is a database containing information about a dealer’s customers, vehicles, accounting, parts, services and some sensitive customer information like social-security numbers and credit history. Generally, these DMSs are owned by third parties who license the DMS to the car dealers. Car dealers need access to the DMS data for other parts of their operations like marketing and customer relations. In general, accessing DMS data involves copying stored data to other software applications for integration and processing which may involve copying the DMS software.

The Arizona statute in question gave car dealers the statutory right to protect, store, copy, share or use the data stored in its DMS.

The two largest DMS providers sued the State of Arizona to block the statute from going into effect. Among other arguments, they claimed that their DMSs were protected by the Copyright Act and that allowing the statute to stand would allow car dealers to make copies of their works of authorship in violation of the Copyright Act. The issue was the software, not the data which is not protectible under the Copyright Act.

The court rejected the argument. The court agreed that loading software into a computer memory would be “embodiment.” However, the court noted that embodiment does not ALWAYS result in the creation of a copy unless it also persists for a period more than transitory duration. The court also noted that loading software COULD be more than transitory which COULD result in copying that would violate the Copyright Act. But the DMS providers had offered no evidence that the Arizona law required the embodiments of its DMS to persist for a period of more than transitory duration. As such, the DMS providers were not entitled to an injunction against the Arizona law going into effect. Of course, the “door” remains open for future cases if the DMS providers could factually demonstrate that the embodiment was more than transitory. But those cases would be filed against individual car dealers.

The other Circuit Court case is Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F. 3d 121 (US 2nd Cir. 2008). That case involved Cablevision’s Remote Storage Digital Video Recorder (“RSDVR”) system which allowed cable customers to “record” and watch movies and television programs at a later point. Owners and producers of movies and programming objected to the RSDVR system and argued that Cablevision was making “copies” in violation of the Copyright Act. But, in practice, the RSDVR system sent its streaming data to customers on demand through a “buffering” mechanism which held no more than 1.2 seconds of programming at any time. Further, those bits of programming were being constantly overwritten as the customer watched. The court held there was an “embodiment,” but not “copying” in violation of the Copyright Act, because the embodiment was transitory.

If you have questions about protecting your copyrights and other intellectual property, contact the copyright lawyers at Revision Legal at 231-714-0100.