LegalMatch: Intellectual Property

Google’s Efforts to Hide Their Inner Workings Faces Challenges In Court

Google is infamous for all of the perks that they offer to their employees. Employees can grab lunch at one of the many restaurants at their sprawling business campus in Mountain View. If an employee has a new baby, they get over a month of paid leave regardless if they are a father or a mother. However, not all things at Google are amazing for their employees, namely some of their employee confidentiality policies.

All companies have various policies to which employees are required to adhere. Some of the policies have to do with protecting a company’s reputation and business, such as policies designed to protect trade secrets or discourage employees from leaving the company to work for local rivals. Other policies are necessary to ensure that the company adheres to all applicable state and federal laws, including policies prohibiting sexual harassment and providing guidelines for maintaining a safe workplace. Sometimes, these policies can be so overly restrictive that they violate state and federal law.

A product manager is currently suing Google on behalf of all of the company’s California-based employees over having internal confidentiality policies so severe that they are violating the California Labor Code and federal law. These violations include prohibiting employees and former employees from discussing information such as workplace conditions and wages with outsiders, talking about even the most mundane aspects of any on-the-job experience they may have had at Google to future employers, and mentioning potential violations of the law that Google may have committed to anyone inside or outside the company. The manager is bringing this lawsuit under California’s Labor Code Private Attorneys General Act (PAGA).

PAGA Has Changed How California Employees Can Challenge Labor Law Violations

Normally, if a person believes that their employer has violated their workplace rights, they are required to file a complaint with the state or federal Department of Labor, depending on which labor laws they are accusing their employer of violating. Once the complaint is filed, the Department of Labor conducts an investigation into the company to determine whether the company is actually committing a violation. The Department of Labor may then suggest that the employee attempt to resolve their issue with their company through another method for resolving matters other than going to court, such as going through mediation or subjecting their case to a hearing board. Typically, the employee who has filed the complaint will be required to exhaust all of the alternative suggest by the Department of Labor before they are allowed to bring a lawsuit against the company.

Prior to the passing of PAGA, people working in California would have had to follow all of these steps and rely on the California Department of Labor to provide them an opportunity to obtain any financial compensation for violations that the company may have committed. Once PAGA was enacted in 2004, employees in California were finally free to be able to bring private civil lawsuits against their employers to obtain financial damages from a labor violation without having to rely on the California Department of Labor to pursue these damages on their behalf. However, employees are still required to file a notice with the California Department of Labor to let the government know what violations were committed by their employer and how they attempted to get their employer to make amends for the violations 65 days before they can formally start a lawsuit against their employer.

Google’s Attempts to Protect Itself Are Running Afoul of Employee Rights

Having followed the requirements put forth under PAGA, the Google employee, who opted to remain anonymous since Google had already attempted to damage his reputation within the company for allegedly daring to speak to the press about a matter concerning the company, filed a complaint not only for his own benefit but also the benefit of other employees who faced being harmed for violating an overly burdensome privacy policy. Google governs the privacy of the company by having its employees sign a Confidentiality Agreement and sit through three training programs that discuss confidentiality when they are hired, enforcing policies and guidelines, such as the employee communication policy and the data classification guidelines, and maintaining a Global Investigations Team, which is in charge of the company-wide privacy-enforcement program called StopLeaks. Through all of these methods, Google employees are constantly told that they are not allowed to discuss confidential information with anyone, and that all information is confidential unless they are told specifically that it is not confidential. This means that even information that employees legally should be allowed to discuss with outsiders, such as working conditions and wages, is not allowed to be shared with anyone outside the company. If such information is discussed with people who are not Google employees, then one may face being terminated from their position.

All employees are required to adhere to these policies even after they leave Google because they have to sign an Exit Certification whereby they promise to continue to follow the terms of the Confidentiality Agreement even though they are no longer employed by Google. By prohibiting former employees from talking about even the most basic aspects of their career at Google to potential future employers, Google effectively prohibits its former employees from working for its competitors or even in the same general industry. While a company can prevent former employees from working for companies that are in direct competition with them for a short amount of time, the restriction must be reasonable in terms of location and time so as to not destroy a person’s career in a particular industry.  Since Google’s Exit Certification does not have time or geographic limitations, it effectively limits a former employee’s ability to work in the same general capacity for a new company as they did with Google anywhere in the world at any point in time.

Furthermore, employees are lectured against making any comments both to outsiders and to others within the company, including in-house lawyers, regarding whether there are problems with any of the products put out by Google or whether Google may have broken any laws or otherwise committed legal wrongdoings. An employee who alerts the proper authorities to a company’s commission of a legal violation is known as a whistleblower. Even though Google may intend for this particular measure to prevent employees from inadvertently sharing company secrets related to the development of a project or business transactions by discussing issues with products or contracts, the discouragement of their employees from mentioning violations of the law to anyone, even in-house counsel, is likely to be seen as so overbearing that it effectively blocks employees from ever alerting the authorities about major legal violations that Google may commit without the knowledge of the general public.

What Does the Future Hold for Google?

Once Google was notified of the plaintiff’s intent to file a PAGA lawsuit, the company did make an amendment in September 2016 to one of Google’s policies in an effort to permit employees to comment on their wages, hours, and working conditions to government officials. However, Google did not make any changes to the Confidentiality Agreement, nor has it changed any of its main policies that prohibit employees from discussing anything about the company to people outside the company. Additionally, Google has failed to educate its employees of the new amendment, meaning that Google employees are unaware of the amendment and are likely under the impression that no amendment has been made and that they still face the threat of being fired if they dare speak out about their working conditions or their income.

No employee should ever feel that they cannot discuss basic parts of their job, such as working conditions and wages, that are unrelated to anything that a company can legally protect through confidentiality measures. Nor should an employee ever have the impression that they do not have the right to be a whistleblower. If you think that your company is trying to unnecessarily silence you through illegal and overly burdensome confidentiality policies, then you need to contact an employment lawyer immediately.

Authored by Kristen Johnson, LegalMatch Legal Writer

Yahoo's Data Breach: How Data Breach Laws Effect Businesses and Consumers

We use the internet every day, but we don't always think about the sheer breadth of information we share with strangers assuming they are taking steps to protect that knowledge.  As much as we like to think that businesses are taking all the steps necessary to protect our private information from hackers, and they often are, many times this simply isn't the case.  Just recently Yahoo--having already announced in September that they had suffered a breach of over 500 million accounts back in 2014--announced that there was another attack in 2013 that saw over a billion accounts breached and data stolen from them.

Just by the numbers, this is the largest hack announced in history by a wide margin.  In fact, Yahoo set the previous record with the first hack it announced earlier this year.  Before that, the social networking website MySpace set another record earlier in 2016 as they announced that a Russian hacker named ""Peace" had stolen 360 million accounts--although this record has obviously been trounced twice over by Yahoo.  To put the seriousness of the Yahoo breach in context, in 2015 there were an estimated 3.2B internet users worldwide.  This means, depending on how many users had multiple acounts, nearly a third of all internet users could potentially have been hacked.  To make things worse, Yahoo still doesn't even know how they were hacked.  According to Yahoo, the data stolen includes names, emails, addresses, phone numbers, birthdays, passwords, as well as security questions and answers.

This is coming at a time where hacking has been at the forefront of people's minds, just over a month ago, a hacker was arrested for breaking into over 83 million JPMorgan accounts.  In fact, nearly 700 data breaches have been reported this year alone.  Oracle, Verizon, DropBox, LinkedIn, Wendy's, Snapchat and even the IRS have reported data breaches in 2016.  Verizon is especially notable on this list as they had the misfortune of buying Yahoo this year for nearly $5B.  While this may well be a savvy business move, it has certainly multiplied there data breach headaches.  There has even been speculation that Verizon will ask for a whopping $1B rebate on their purchase.

So the question is, how and when can you sue when a business fails to protect your private information?  How can you protect your own business from ending up with Yahoo's headache?

Data Breach Laws On the Rise Nationwide

While there is some federal law dealing with how personal information, and breaches stealing that information, must be dealt with the area is primarily an issue handled by state law.  As of today, 47 states have individualized laws dictating how companies must approach a data breach. The laws themselves all tend to differ notably on fine points from state to state but all include who the law covers, what constitutes personally identifiable information (a fancy term for private information that could be used to identify you), what constitutes a breach (usually a hack accessing your private information), how and when a breach needs to be reported (often, and what is exempted from the rules.  California was the first to enact a data breach statute back in 2002, with the law taking effect in 2002.  The only states which currently have no data breach statutes are New Mexico, South Dakota, Kentucky, and Alabama.

Not only are there data breach statutes in almost every state, expansion of data breach laws are on the rise with  26 states proposing or passing expanding data breach laws in 2016.  Just earlier this year, Tennessee enacted what is likely the strictest data breach law in the nation.  Tennessee wasn't alone, California, Illinois and Nebraska also expanded their data breach laws in the past year.

Due to the substantial variation in state laws, preparing a business to comply with all the requirements of different data breach statutes can be a challenge.  If your business is working out of a single state then compliance with any data breach can be as simple as consulting an attorney about the laws of your state. However, when your business is operating across multiple states the situation becomes a bit more complicated.  As a general rule, a business in this situation is going to have to comply with the strictest requirements of all the states they work in.  However, unlike many other restrictions such as those from employment law, privacy breach is interesting in that the statutes are often strict in different ways.  There can be times when reporting is necessary in one, many, or all of the states you operate in.  It is important for companies operating in many states to have a clear data breach policy in place and, if possible, have a team trained to know how to respond to any given data breach.  It's also important to ensure that your data security measures are up to date and, at a minimum, match with the standards of your industry.

Yahoo Already Facing Lawsuits Over Data Breaches

It's probably not surprise that the biggest hack of personal information in history has already led to lawsuits.  The first two lawsuits were both filed in California and alleged that Yahoo did not adequately follow California's data breach statutes by waiting so long to reveal an over two year old hack.  They also argue that yahoo was grossly negligent both in how it protected its user's information and in reporting the breach--only discovering the incident years after it occurred.  These lawsuits have snowballed into many more lawsuits across the country, including a class action lawsuit in California.

Where a company fails to comply with the rules of a state's data breach statute there can often be a cause of action on the behalf of a consumer who's personal information has been accessed.  However, due to the varying nature of these statutes, exactly when there has been such a violation can be hard to pin down without a lawyer's help.

Generally, where a business doesn't act with reasonable care (usually by keeping up with the industry standards for protecting information such as encrypting personal information) or notify customers as soon as possible after they learn that their data has been breached there can be a lawsuit.  However, once again, the exact rules will vary depending on where you live.

A common hurdle with data breach cases has been that the breach itself doesn't always represent a harm.  Often courts will require that there have been actual damages caused by the breach, beyond the theft of identity and personal information itself, before they will allow somebody to move forward with a lawsuit.  Sometimes, where particularly sensitive information such as credit card numbers or social security numbers are taken, a court will consider a hacker accessing the data a damage in and of itself.  However, this approach has been a fairly recent development within the courts and only certain jurisdictions have adopted it.  Early in 2016, the 7th Circuit expanded this theory further than nearly any court had gone before.  Building on an earlier data breach case against Neiman Marcus, the court ruled that a class action data breach lawsuit against PF Chang's could move forward based on a theory that future injuries were imminent and the breach posed a substantial risk of harm.  What's more, they treated the costs associated with the remedial steps that those potentially affected by the breach took, preventing any more loss of information from being stolen, as present damages allowing a case to move forward.

While the trend seems to be towards making data breach lawsuits more consumer friendly, they are still complicated.  However, with data breaches breaking records left and right--in a bad way--now is an important time to know  your rights and protect your business.  When a third of all internet users may be at risk in a single breach you never know if your account is one that has been targeted.

Authored by Jonathan Lurie, LegalMatch Legal Writer

The Stairway to Copyright Heaven

The rock group Led Zeppelin has just recently prevailed in a long fought copyright infringement lawsuit brought against them by the estate of Randy California—a member of the band Spirit. The lawsuit dealt with the opening chords of what is likely Led Zeppelin’s most famous song--"Stairway to Heaven."

Led Zeppelin’s song, written in 1971, allegedly was quite similar to “Taurus;” a song written by Spirit three years earlier. Specifically, the opening to “Stairway to Heaven” bore some notable similarities to parts of “Taurus.” 

Led Zeppelin is no stranger to accusations of copying. They have settled copyright infringement lawsuits over their songs “Dazed and Confused,” “Whole Lotta Love,” and more. However, this lawsuit may have been a bit more out of left field for the aging rock stars because the song is old. Where a copyright lawsuit is delayed long enough, the courts would often allow a defendant to use the delay in litigation as a defense. The delay needed to be sufficient to prejudice the defendant by making it harder to produce evidence in their defense.  What’s more the timing on the delay didn’t start ticking until a would be plaintiff knew or should have known they could bring a claim.

However, a few years back, a Supreme Court case essentially put the kabosh on all laches defenses in copyright infringement cases. The Court felt that the three-year statute of limitations for claims of copyright infringement were a sufficient cut off point to allow any defendant to reasonably defend a lawsuit.  This opened the door to a number of new lawsuits.

This was true for Spirit, as it allowed them to sue over Led Zeppelin’s recent remastered version of “Stairway to Heaven,” even though the original release of the song was far outside the normal statute of limitations.

With lawsuit cleared to go ahead, and the validity of Spirit’s copyright on the song “Taurus” not in question, the case came down to something with many copyright infringement cases turn on—did Led Zeppelin copy Spirit’s song?

Copying in Copyright Lawsuits

Copyright protects provides a bundle of rights to the copyright holder. Where somebody copies from a protected work without authorization, like Led Zeppelin was alleged to do here, that can represent copyright infringement.  However, not all similar works rise to the level of copyright infringement. In a copyright infringement lawsuit, copying is held to a specific legal standard to determine whether the evidence before the court is sufficient to show a violation of the copyright holder’s rights.

Copying is determined based on a sliding scaled of access and similarity. The idea behind this is that to show copying the accused must have known of the work they are said to have copied from and the work they produced must actually be similar to the work they allegedly copied from.  The more evidence of access, the less evidence of similarity is required for a finding of copying and vice versa.  Where there is particularly substantial evidence of similarity, the courts will presume access.  This is known as a finding of striking similarity.  In determining whether this exists, the court looks to the uniqueness of the similar sections, mistakes or errors which appear in both the original and the alleged copy, and more.  It should be noted that, while sufficient similarity can alleviate the need for evidence of access, a certain level of similarity must always be proven regardless of the amount of evidence showing access to the work.

The jury in this case had no problem making a finding that Led Zeppelin were familiar with and had access to “Taurus.” Two different members of Led Zeppelin both had copies of the Spirit album which featured “Taurus” when they wrote “Stairway to Heaven.”  Even more damning, Spirit had previously opened a show for Led Zeppelin where they played “Taurus.”  The members of Led Zeppelin had even hung out with the members of Spirit on numerous occasions.

The second issue of similarity, however, was much more complicated for the jury to determine. This is fairly common, especially in cases dealing with music. This is because musical similarity has two aspects to it, being similar to the ear and having similar structure.  Here, the songs shared many arpeggios and could certainly be thought to sound alike to a certain extent in some places.  However, for every similarity there were notable differences.  So the question became, are the songs similar enough to decide that one copied another?

The lawyers for both Spirit and Led Zeppelin produced, as is common in cases such as these, expert musicologists to analyze the two songs and present the ways in which they are similar and different. As you might imagine, the musicologist for Spirit highlighted the similar arpeggios used as well as the places where the note combinations, pitch, and tempo where alike.  Spirit’s musicologist even played the songs one after another on a guitar, explaining the similarities.  Led Zeppelin’s musicologist focused on how few sections were actually identical.  They argued that the only truly similar section drew from a chord sequence dating back to songs over 300 years old. 

What the jury never did hear, however, is the original recording of the song “Taurus.” The musical composition that was at issue here for copyright infringement—not the initial sound recording of “Taurus.”

Ultimately, the jury sided with Led Zeppelin’s musicologist and ruled that there was insufficient evidence for a finding of similarity between the two songs.  Not only did they rule against similarity, they did so unanimously.  While the songs shared some similar aspects, they were not similar enough in the minds of the jury for a finding of copyright infringement.

The case is currently on appeal, so it’s far from over for Spirit and Led Zeppelin. However, the case is a good example of just how complicated a finding of copying can be in a copyright infringement case.  The truth is, the determination is such a complicated one that it often can simply come down to the jury’s opinions on the issue.  A case you win one day might be unanimous against you the day after.  We’ll have to see where the case goes on appeal before Led Zeppelin can finally “ramble on.”

Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law

Gone With the Wind and Wizard of Oz Protected By Copyright?

Warner Bros. recently won a copyright infringement case against a number of companies that had been using images from classic movies such as The Wizard of Oz and Gone with the Wind. The defendant had used these images on various consumer products-shirts, posters, and lunchboxes. Warner Bros. immediately retaliated by filing for infringement. The defendant claimed that the source material was in the public domain and as a result a copyright no longer existed on those works. This question was laid to rest by the higher courts. They ruled in favor of Warner Bros.

Public Domain

One of the ongoing debates in the copyright space is how long a copyright exists. The copyright scheme has been reworked numerous times over the last few decades to meet demands by big conglomerates. Colloquially known as the Mickey Mouse Protection Act due to Disney’s influence over the process, legislation has brought forth many changes dealing with the duration of copyright. Since the Copyright Act of 1976, copyright protection was for the life of the owner + 50 years. Now, it has been extended to 70 years.

Once the allotted time comes to pass, the work shall be placed in the public domain. In other words, this means that the work can be freely used by anyone. Another wrinkle to all of this is that there are complexities such as how the new 70-year system affects copyrighted works that are close to expiration. There are other such nuances that overcomplicate the matter. The bottom line is that although the benchmark--life of the owner + 70--is the norm, there are ways around this.

Big media conglomerates such as Disney and Warner Bros. have time and again taken full advantage of this disordered system. Through effective lobbying mechanisms, these corporations have been able to continuously extend the length of the copyright. This is how certain copyrighted works that have long passed their expiration are still given legal protection.

Now let’s take The Wizard of Oz and Gone with the Wind. Both of these works have yet to hit the 70 year mark. Although The Wizard of Oz source material--a collection of books written by L. Frank Baum--has long expired, the movie rights remain in effect. Warner Bros. has ownership over these movies and as long as it is within the respective length of time, it shall be given full protection. The courts have ruled with this basic principle in mind.

Copyright law shall remain in effect as long as protection is warranted, which is determined by the duration of the copyright. Similarly, if the work falls outside this period of time, then it is in the public domain. As neither The Wizard of Oz nor Gone with the Wind have yet to fall within the public domain, the owner has a right over them and can initiate lawsuits over anyone who impermissibly makes use of the work.

Fair Use and Transformative Work

A defense to a copyright infringement claim is the fair use doctrine. Under this oft-used defense mechanism, the defendant can legally make use of the original work under certain situations. If the work is used for a noncommercial or nonprofit purpose, then the courts might give the defendant the benefit of the doubt. Another way of invoking the fair use defense is if the work has been altered or modified to such an extent that the new work is “transformative” of the source material.

For example, a transformation occurs when the Mona Lisa painting is used as a cartoon character. With the imagery used from the aforementioned movies on different consumer products, it is hard to say if it is transformative to the point of triggering fair use. It is up the jury to decide this matter. Also, as the consumer products are generating revenue, the courts might view this as impeding on the copyright holder’s commercial worth and would dismiss the fair use for this reason alone.

There are many avenues for the defendant. Fair use is but one. Of course, licensing through an intermediary which takes care of licensing on behalf of Warner Bros. would also work too. At the end of the day, individuals need to heed caution when they make use of a copyrighted work; otherwise there can be harsh consequences.

Authored by Sam Behbehani, LegalMatch Legal Writer

Supreme Court Hearing Copyright Case on Costumes

The fashion industry has undergone many changes over the decades, yet the legal framework remains stagnant. Intellectual property is an avenue by which clothing designs can be given legal protection. Design patents can grant protection to a novel and unique design, but as most forms of design are functional, this is hard to accomplish. The same goes for trademarks. With copyrights, courts have swayed in one direction or another in giving protection.

The case before us is Star Athletica v. Varsity Brands. Here, the question is whether designs on cheerleaders’ uniforms can receive copyright protection. The Supreme Court Justices have expressed different viewpoints on this issue. In general, something cannot receive copyright protection if it is functional. Copyrights aim to give protection to works of creative expression. If something merely serves a functional purpose, this is contrary to the Copyright Office’s intent. Now, the struggle is about whether protection can be given to articles of clothing that have an insignia or artistic element to them. In accordance with Title 17 of the U.S. Code-pictorial, graphic, and sculptural works can receive copyright protection. Clothing falls under this subcategory. Even with this clause warranting protection, a work cannot be given protection if it is purely functional. Separability of the function from the design must be possible before there can be protection.

Design vs. Function

The courts have been dealing with this ongoing issue of design versus function for some time now. Function refers to the utilitarian and everyday use of the work. For example, a spoon is an implement used to eat food with. That is its function. However, if a spoon is conceived that not only holds a function but shows some artistic merit, then it could potentially receive copyright protection. For something that has both functional and artistic elements to it, only the artistic elements can be given copyright protection. Numerous cases have spoken to this idea of “conceptual separability.”

If the functional elements can be separated out from the artistic elements, then the work can potentially receive copyright protection. Courts have approached this in many different ways. Some courts have held that only a lay observer-someone who is a typical consumer-should be the one to determine if the function can be separated from the artistic elements. Other courts have used other methods.

Turning to the issue at hand, can a cheerleader’s outfit that portrays a design on it pass this test? For one, the outfit does serve a functional purpose. After all, it is an article of clothing that is designated for cheerleaders. This is its function. As for the design sprawled across its front, this is indeed aesthetic. But the underlying problem is if the art and the function have become merged together to the point where the two elements cannot be separated out. If this is case, then copyright protection is not an option. To step back, the separation of the two does not have to be a physical separation, but rather a conceptual separation. In other words, if someone can perceive in their mind that the two ideas are separate, then it can be protected. If they have become intermingled such that the observer can’t tell the difference, there is no protection. Here, there is some artistic value to the symbolism and insignia portrayed on the outfits.

At the end of the day, it will come down to the courts to decide this. Fashion industry has brought many articles of clothing before the USPTO in hopes of getting copyright protection. The Copyright Office has turned down many applications and done so on the grounds that the functionality outweighs the artistic merit. That seems to be the case here as well.

Fashion Trend

Fashion is tricky because intellectual property rights over pieces of clothing and accessories are hard to obtain. This is because under all three schemes-patents, trademarks, and copyright-for protection to be given, the work cannot be functional or utilitarian. That is why knockoff clothes are found everywhere. There are no legal measures against it. Courts need to find a balance between granting protection and denying protection to clothes that are too generic and are functional.

Authored by Sam Behbehani, LegalMatch Legal Writer