Articles Posted in Outlook and Trends

16 April 2021

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The recent ruling in Google v. Oracle has altered the definition of “fair use” when it comes to functional works such as code. While the use of existing creative works must still be transformative in order to avoid violating copyright laws, it will now be much easier to claim fair use when building on existing functional creations. JMBM’s Entertainment Litigation Chair Jeff Goldman explains the case below and discusses its potential impact on the hotel industry.

How does the Supreme Court’s Google v. Oracle case
impact the hotel industry (beyond software)?

by
Jeff Goldman, Chair, JMBM’s Entertainment Litigation Group

It was hyped as the “copyright case of the century.” Justice Clarence Thomas, in his dissent, frets that the majority “transforms the definition of ‘transformative’” use into nothing more than “a use that will help others ‘create new products’” — a “new definition” that “eviscerates copyright.” Google LLC v. Oracle America, Inc., dissent at 16-17. As an example of what might now be considered a “fair use,” Justice Thomas cites a “movie studio that converts a book into a film without permission[.]” Id. at 17.

Justice Thomas’s concern may be an overstatement. Whatever the repercussions of Google v. Oracle for the software industry, read in context, any attempt to apply its fair use analysis to works that are more creative than functional — like movies, books, and music — ought to fall flat. Nevertheless, various types of copyrighted works important to hotel operators may well be affected by the Court’s fair use analysis.

Copyright law basics

First, briefly, some background. Copyright law protects original “expression” that is fixed in some tangible medium (e.g., paper, film) but not “the ‘ideas’ that lay behind” that expression. Google at 13. The difference between an “idea,” and the “expression” of that idea, is often a difficult line to draw. One concept used to distinguish between idea and expression is that works, or parts of them, that are largely functional or utilitarian are closer to mere “ideas” than to protectable “expression.” Works — including computer code — that are purely functional or utilitarian are considered noncopyrightable ideas, rather than copyrightable expression. See RJ Control Consultants, Inc. v. Multiject, LLC, 981 F.3d 446, 457-58 (6th Cir. 2020). On the other hand, the threshold for copyrighrability is low; to be copyrightable, a work need only “possess some creative spark, ‘no matter how crude, humble or obvious’ it might be.” Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340, 345 (1991) (quoting Professor Nimmer).

A copyright owner’s exclusive power over a copyrighted work is also subject to various limitations, including that “a copyright holder cannot prevent another person from making a ‘fair use’ of copyrighted material.” Google at 13, citing 17 U.S.C. § 107. Among the factors courts consider in the fair use analysis is how much the new work “transforms” the original work — a concept that courts have had trouble applying with any degree of consistency and predictability.

The Google case

The Google case centered on the protectability, and Google’s use, of a type of largely functional computer code called “declaring code.” The easy way for the Supreme Court to decide the case would have been to simply rule that Oracle’s “declaring code” was not copyrightable — as Google argued, and the district judge agreed (a ruling the Federal Circuit reversed). But it was clear from oral argument that the Court was having none of that. CONTINUE READING →

08 April 2021

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The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is currently accepting public comments on a provision in the recently enacted Corporate Transparency Act (CTA) which requires some privately-held business entities to disclose ownership information directly to a law enforcement agency. Interested parties should consider commenting before the May 5th deadline, and companies who may be impacted should take this opportunity to review their anti-money laundering compliance programs. Vince Farhat and Samuel Buchman of JMBM’s White Collar Defense and Investigations Group have written an article detailing this legislation below.

FinCEN Seeks Comments on Ownership Disclosure Requirements in New Federal Anti-Money Laundering Law

by
Vince Farhat, Chair and Samuel Buchman, Associate
JMBM’s White Collar Defense & Investigations Group

On April 1, 2021, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) published an advance notice of proposed rulemaking giving companies and individuals the chance to comment on the new beneficial ownership disclosure requirements contained in the recently-enacted Corporate Transparency Act (“CTA”), which is part of the Anti-Money Laundering Act of 2020 (“AMLA”) included in the National Defense Authorization Act (“NDAA”). Under the CTA, some privately-held business entities will be required, for the first time, to disclose ownership information directly to a law enforcement agency. FinCEN is accepting public comments on the CTA disclosure requirements through May 5, 2021, and companies and other interested parties should consider commenting by this deadline to help shape the anticipated rulemaking process at this early stage. This article focuses on two specific legislative changes which could lead to an uptick in federal anti-money laundering enforcement: (1) the CTA beneficial ownership disclosure requirements; and (2) enhanced whistleblower incentives and protections under the AMLA. It is critical for companies to stay abreast of regulatory developments in order to maintain proper compliance with these changing enforcement rules.

Background

Congress enacted the NDAA on January 1, 2021. This year’s iteration of the NDAA gained notoriety when former President Trump vetoed the bill, taking issue with the bill’s failure to repeal Section 230 of the Communications Decency Act. However, following a veto override, the NDAA became law, marking the 59^th consecutive year in which some form of the NDAA has been passed. This Section 230 scuffle diverted attention away from the AMLA, a separately named Act within the NDAA. The AMLA represents the most significant reform to anti-money laundering laws in two decades since the 2001 USA PATRIOT Act.

Among the AMLA’s sweeping reforms are efforts to strengthen FinCEN, extend the reach of the Bank Secrecy Act (“BSA”), and expand the Department of Justice and Treasury Department’s ability to subpoena foreign financial institutions.

In its advance notice of proposed rulemaking (“ANPR”), FinCEN requested comments on the new CTA beneficial ownership disclosure requirements. The comment period will last until May 5. The ANPR solicits comments on a variety of topics, including: definitions of the various ambiguous terms in the law; the disclosure procedure; determining the scope and content of the disclosures; the means by which entities will seek an exemption from the reporting requirements; and how the disclosures will be shared with state and local law enforcement and financial institutions. CONTINUE READING →