When can a third party make a case for copyright infringement?
August 10, 2010 3:06 PM   Subscribe

Where are my DMCA and IP and web publishing experts? Need some generic legal-ish advice.

I know you are not my lawyer. I would still be delighted to hear from those with experience in this sort of situation. I am advising my friend Martin on whether the next step is lawsuit or not, and we need more info.

Here's the story, and our questions follow:

Neil and Martin are two small business owners. They meet at a networking event and hatch an idea for a brand-new website to serve the local community. They become business partners in order to launch this site with a regional focus.

DeliciousDowntownDonuts.com (published by Martin and Neil d/b/a New Donut Media Company) quickly becomes relatively popular in their relatively small market. Martin contributes most of the content, but Neil chips in here and there with posting and social media. The end game is for their little donut site to cultivate a small but rabid community of followers, and then get acquired by some sort of national pastry conglomerate.

After a year, Neil no longer wants to be in the donut blogging business. He and Martin agree to dissolve the partnership, and Martin retains full ownership of both New Donut Media Co., and DeliciousDowntownDonuts.com. Neil is a jackass on the way out, quibbling over money and whatnot.

After the dust has settled, Martin learns that, over the previous year, Neil's posts on the blog and on Facebook were all plagiarized. Neil had sought out websites around the country of similar interest, and lifted their posts, right down to the artwork, then passed it off as his own original material.

Martin hasn't received any cease-and-desists or takedown letters yet—but that seems like a minor miracle, since Neil had ripped off posts from the top names in donut appreciation (admittedly a niche market). Martin feels that it is only a matter of time before this comes to light... and after having looked side by side at the material in question, I agree with him.

How Martin handles the offending posts on DeliciousDowntownDonuts.com is pretty clear: delete delete delete. But how does Martin handle Neil?

Neil knew that he was stealing at the time; their site even made a hard-line scary statement on Day 1 to others who might think of lifting their content. Many discussions were had between Martin and Neil about how to promote and protect their original donut essays.

If it comes out publicly at any point that Neil stole and republished all this content (even if it was subsequently deleted), DeliciousDowntownDonuts.com will take a reputation hit, and its future potential value as an acquisition property will likely take a hit too. (Right?)

Has Neil done anything that Martin could sue him for? Obviously, Martin can't claim copyright infringement since it wasn't his copyright that was violated. Or is this a tree-falls-in-the-woods case, where if no one has filed a DMCA against DeliciousDowntownDonuts.com, then there has been no crime?

Martin would really rather not take any legal action here, but he would like to send Neil a scary letter that basically says, "I know what you did, and I cleaned up your mess. Don't ever mess with me again."

But we're all having a hard time figuring out what exactly Neil did to Martin by plagiarizing. We know what he did to the authors he ripped off... but they aren't a party to any of this (yet).

Thoughts?
posted by pineapple to Law & Government (13 answers total) 2 users marked this as a favorite
 
Martin should disclose it pre-emptively. "We at DDD are disappointed to tell you that Neil had been publishing items on our site that were in violation of copyright. We take this matter seriously, and in addition to Neil no longer being on our staff, all of the offending content has been removed. We apologize to the donut community and especially to the original writers of this content, but are proud and happy that our site's community is strong enough to weather even this unfortunate incident."
  1. Protects Martin from the inevitable future discovery of the plagiarism.
  2. Makes clear that Neil was a bad actor, heading off any opportunities to cause trouble in the future because everyone will know it's just a plagiarist's sour grapes.
  3. Neutralizes the negative PR (and valuation) impact as much as possible by showing that Martin is a responsible professional.
If you really want to shoot the moon, have the announcement post close with a call for new writers/contributors who want to help the site move forward.
posted by anildash at 3:19 PM on August 10, 2010


Yep, I came to say the same as anildash. (and he knows what he's talking about much more than I do.)
posted by niles at 3:21 PM on August 10, 2010


Oh, and don't send the letter to Neil. Email him a link to the disclosure when it goes live, and let him read the discovery on the site, same as anybody else. Carefully log and record all of his responses to the post in case you need them in the future.
posted by anildash at 3:22 PM on August 10, 2010


Youtube merely replaces the content with a "This material was removed due to a copyright claim." I think something like that would get the message across to all concerned, sans letter.
posted by rhizome at 3:29 PM on August 10, 2010


Martin should disclose it pre-emptively. Etc.

I don't think that actually goes to the OP's question, which seems to be what causes of action does one co-owner have against his former co-owner for torts committed against third parties that have not ripened into lawsuits.

I am not your lawyer, and this is not legal advice. By the description above, it sounds like A and B had a corporation (i.e., New Donut Media Company), and B was a shareholder and director. Your jurisdiction's corporation law likely articulates the standards of conduct for shareholders / directors in closely held corporations. There is often an elevated standard of conduct among shareholders in small corps. Ditto with partners in a partnership.

At the end of the day, this is just the same as if B stole widgets he was supposed to make and provided them to the company for its use. There may be an action in contract (i.e., his employment agreement said he would make widgets (write content)), and the company did not get the benefit of the bargain, or as a violation of corporate/PS law. Unless and until someone sues you, it would probably be hard to show damages in tort (you need damages to have a good claim for a tort). Maybe reputational damages, but this can vary by jurisdiction.

Again, not legal advice, I am not your lawyer, I am not a corporate lawyer or corporate litigator. I DO love donuts though.
posted by Admiral Haddock at 3:32 PM on August 10, 2010


Response by poster: "I don't think that actually goes to the OP's question" -- technically, maybe no but it is all very helpful nonetheless.

I would definitely like to hear thoughts that answer "What Would MetaFilter Do?"

Thanks for the great points already... keep 'em coming!
posted by pineapple at 3:39 PM on August 10, 2010


"What Would MetaFilter Do?"

anildash is one of our top-notch advisors, so we'd probably do whatever he says. That said we don't have a terms of service or anything else that outlines what our responsibilities are and we're really trying to do something pretty much totally different. We're not looking for growth and we're not looking for buyout. All the user-generated content is copyrighted to the original commenters, so it's pretty clearly them not us who would be at some level of risk.

I'm not sure how, once the content is deleted, people are going to flip out about DDD's reputation if the event is handled appropriately. Martin having anything to do with Neil at this point is asking for some serious trouble. I understand that he's upset, but unless there is some actual liklihood of the plagiarism detected after-the-fact once content has already been deleted [like was it republished under DDDs name elsewhere? syndicated with the incorrect attribution?] I would leave this the hell alone and be happy that he's dodged a bullet. Also do what anildash says.
posted by jessamyn at 3:50 PM on August 10, 2010


I am not an attorney, but a law school student. I also have not had any IP courses just yet. However, some of the issues here are ground in agency and partnership law. I may get taken to school by someone with far greater knowledge and experience, but I would like to try and help as best I can. I am not presenting legal advice, please do not act on anything I have said without consulting a practicing attorney in your jurisdiction. These are all personal opinions.

It seems like you have transcribed the facts rather well, so I am going to operate under the assumption that no paperwork was filled to create a Limited Liability Partnership (LLP) or a Limited Liability Corporation (LLC). I know you stated this was a partnership, but since the name of the endeavor has "Corporation" in the title, I was unsure. Assuming no LLP, then Martin may be held personally liable for the acts Neil has committed. This means that if some of these top donut sites decided to sue New Donut Media Company, not only could Martin lose money out of the business, but his personal finances may be sought after. I know this does not sound fair at all, and quite frankly in this situation it is not. However, general partners are agents of each other. The actions of one partner can bind the other. While Neil has done something wrong, it was done within the scope of his position and so don't know how well Martin can argue this position. I think if Martin were to sue Neil, it would have to be under a breach of fiduciary duty theory. Partner's owe each other to act as fiduciaries for one another. A fiduciary duty means (simply) to operate in the best interest of, which arguably Neil was not doing. Was there any written agreement between Neil and Martin that may have some provisions related to the matter at hand? Perhaps something indemnifying Martin?

There has been a crime committed regardless of whether it is reported or not. Whether a suit arises or charges are filed (I don't know if the DMCA has criminal aspects) is your, "tree-falls-in-the-woods," situation.

I do believe that this will effect the potential acquisition value because the purchasing (successor) corporation will take on the liability. Some states allow this liability to be avoided by the purchasing corporation when the purchase is negotiated. If that were the case, NMDC would be kept alive for 3 years in order to take take on that liability (This is where I am likely to get schooled. I don't know how this works out for a partnership.) Martin sounds like a good individual, but please let him know if he ever does try to sell he needs to inform the purchasers. This won't go away just by changing hands.

In my opinion, the scary letter to Neil is not going to do anything productive. Especially because Neil knows what he has done. I know there will likely be some debate on this, but if I were Martin (and I'm not), I would reach out to these other sites and let them know I am sorry, that the situation has been taken care of, and that nothing like this will happen in the future. The problem is, you alert these sites to the situation. Again, this is a personal, not a legal, opinion.

This site has some general information on the DMCA http://www.plagiarismtoday.com/2006/03/30/statute-of-limitations-in-copyright-law/
I am sure there are other sites, but this was the first one I found and it seemed somewhat on point.

I will also be curious to here from practicing attorneys how the rules of evidence would apply to Martin's delete strategy. I know the infringing material must come down, but erasing all memory of it, is that destruction of evidence? Pineapple, don't look too much into this paragraph, it is more my curiosity than I think Martin will be in more trouble (though admittedly, I do not know).

I am not an attorney, but a law school student. I also have not had any IP courses just yet. However, some of the issues here are ground in agency and partnership law. I may get taken to school by someone with far greater knowledge and experience, but I would like to try and help as best I can. I am not presenting legal advice, please do not act on anything I have said without consulting a practicing attorney in your jurisdiction. These are all personal opinions.

Hopefully this helps and I did not state anything incorrectly. Once someone with more experience or knowledge comes in, I may edit my post to remove the material which may cause confusion or has been incorrectly stated.

Mephesta
posted by mephesta at 3:55 PM on August 10, 2010


One other just general comment that is that, if Martin has not done so already, he needs to notify all associated third parties (vendors, merchandisers, delivery companies, etc.) that Neil is no long a partner (again, if a partnership) and that he has no authority to bind NDMC to any contracts, purchases, etc. This will protect Martin in case Neil decides to try and do something to injure the corporation (or Martin). Partners have actual authority to act for each other and if the third party can reasonably believe that Neil still has authority, then Neil can bind Martin.

I am not an attorney, but a law school student. I also have not had any IP courses just yet. However, some of the issues here are ground in agency and partnership law. I may get taken to school by someone with far greater knowledge and experience, but I would like to try and help as best I can. I am not presenting legal advice, please do not act on anything I have said without consulting a practicing attorney in your jurisdiction. These are all personal opinions.
posted by mephesta at 4:02 PM on August 10, 2010


Wow, mephesta, issue spotter! I'm not going to discourage you, so I'm just going to note that you can't edit posts here on the Green (or the Blue, or the Gray).
posted by devinemissk at 4:50 PM on August 10, 2010


I wonder if it could be argued that (all of?) Neil's contributions to the business were fraudulent, so any money he earned during the time he was with the business was taken under false pretenses.
posted by galadriel at 7:49 AM on August 11, 2010


Response by poster: Whoops, I meant "I would definitely like to hear thoughts that answer 'What Would MeFites Do?'" (Specifically with MetaFilter Inc., I like to assume that the cabal makes ill-intending pests like Neil just disappear, never to be heard from again.)

If this additional info helps: Martin and Neil formed a general partnership, not an LLP/LLC/INC.

Re mephesta's deleting = evidence concern... Martin said he can make the offending material "not public" but still leave it in the system for later reference if needed.

Re Admiral Haddock's question about action in contract: apparently there was nothing in the original partnership docs that would address this.
posted by pineapple at 11:30 AM on August 11, 2010


Response by poster: Following up...

Martin ended up having to involve an attorney after all, because not long after I posted this, Neil got shirty and took Martin to court over a different issue in their partnership dissolution.

Martin's attorney has filed a counter-suit—for breach of fiduciary duty and breach of partnership, by Neil against Martin while the two were in business based on the plagiarism. Apparently there will also be a damages claim, for the time, energy and legal counsel that Martin had to incur in order to correct the copyright infractions.

Martin's attorney actually drafted a softer, vaguer version of anildash's recommended announcement, for public use on the Donuts site, amounting to "Some material was removed due to copyright concerns... the responsible parties are no longer with the company..." etc. (They didn't want to openly name Neil, in order to prevent a defamation charge from complicating the court hearing—appear to be taking the high road, etc. etc. Even though truth would have been the defense in this case.)

Many thanks for all the wise advice. Martin told me that his attorney was impressed by the caliber of feedback he had received.

The AskMe IANYL Council is impressive, indeed.
posted by pineapple at 7:18 PM on August 24, 2010


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