[00:00:02] Speaker 01:
Good morning.

[00:00:03] Speaker 01:
And may it please the court.

[00:00:05] Speaker 01:
My name is Mark Carlson, and I am counsel for Reardon LLC, Reardon MOVA LLC, the appellants here today.

[00:00:13] Speaker 01:
And with me at the counsel table is the CEO of Reardon, Mr. Steve Perlman.

[00:00:20] Speaker 03:
All right.

[00:00:20] Speaker 03:
Do you wish to reserve any time for rebuttal?

[00:00:22] Speaker 01:
I do, Your Honor.

[00:00:23] Speaker 01:
I'd like to reserve two minutes, please.

[00:00:25] Speaker 03:
OK.

[00:00:25] Speaker 03:
Keep track of your time, but I'll try to remind you.

[00:00:28] Speaker 01:
I'd like to start, Your Honor, with the court's ruling on judgment as a matter of law, of no vicarious copyright infringement.

[00:00:39] Speaker 01:
And the issue for the court here is, on the record presented, was there evidence that a reasonable jury could have relied on to come to a verdict of vicarious copyright infringement?

[00:00:51] Speaker 01:
And when we tried this case, we modeled our case on two very important cases.

[00:00:58] Speaker 01:
One of which is the landmark Shapiro-Bernstein versus H.L.

[00:01:04] Speaker 01:
Green case from the Second Circuit.

[00:01:06] Speaker 01:
And the other is Fona Visa versus Cherry Auction, which adopted the Shapiro-Bernstein case into the Ninth Circuit.

[00:01:16] Speaker 01:
The standard for vicarious infringement, as it's been given to us by the Supreme Court, numerous circuit courts, numerous district courts, is two elements, that there be a legal right and practical ability to supervise or control the infringing conduct, and that the vicarious infringer have a direct financial

[00:01:36] Speaker 01:
interest in that conduct.

[00:01:38] Speaker 01:
Here the jury found that both elements had been proven.

[00:01:44] Speaker 01:
The district court found

[00:01:47] Speaker 01:
that the direct financial interest element had been proven.

[00:01:50] Speaker 01:
Disney doesn't appeal that.

[00:01:52] Speaker 04:
Can you be really specific?

[00:01:54] Speaker 04:
I think this will boil down to two things.

[00:01:58] Speaker 04:
What was the notice of Mr. Reardon's ownership claim and then what was the basically ability to control or supervise DD3 and what notice they had.

[00:02:11] Speaker 04:
So two questions I have for you are what notice

[00:02:16] Speaker 04:
Disney would have had of Mr. Reardon's ownership claim.

[00:02:19] Speaker 04:
And then second, how many times did the copyright notice appear during the MOVA capture sessions, and did they only appear during the June 2016 reshoot?

[00:02:31] Speaker 04:
Or did they show up any other time?

[00:02:33] Speaker 01:
Okay.

[00:02:33] Speaker 01:
Thank you, Your Honor.

[00:02:34] Speaker 04:
Let's be specific.

[00:02:35] Speaker 04:
That would be helpful.

[00:02:36] Speaker 01:
Yes.

[00:02:37] Speaker 01:
So first, with respect to notice, it's our position here, and I hope to convince the court.

[00:02:42] Speaker 01:
that notice is not an element of vicarious copyright infringement.

[00:02:48] Speaker 01:
And so no notice was required and so we didn't have to prove that at trial.

[00:02:55] Speaker 01:
With respect to the copyright notice, that appeared every time a segment of MOVA captured material was played.

[00:03:07] Speaker 01:
So if a scene was taken using MOVA and then the technicians replayed it, the first screen would have displayed.

[00:03:19] Speaker 04:
But the registration happened in February of 2016.

[00:03:22] Speaker 04:
So presumably notice of the registration notice wouldn't have shown up before the registration, right?

[00:03:28] Speaker 01:
Right.

[00:03:28] Speaker 01:
But we must separate the issue of registration of the copyright from the issue of existence of the copyright.

[00:03:35] Speaker 01:
And existence of the copyright is established at the time that the work is fixed in a tangible, reproducible copy.

[00:03:44] Speaker 04:
So what would have been on the, I don't know what you want to call it, the MOVA screen before the registration?

[00:03:54] Speaker 04:
Would it still have?

[00:03:56] Speaker 04:
Yes.

[00:03:56] Speaker 04:
What would it have said?

[00:03:57] Speaker 01:
Yes.

[00:03:58] Speaker 01:
We've reproduced that in our papers.

[00:04:00] Speaker 01:
But what it says is copyright, Reardon LLC,

[00:04:04] Speaker 01:
There's the C and a circle.

[00:04:06] Speaker 01:
It's the classic statutorily provide copyrighted notice and copyright owners.

[00:04:12] Speaker 04:
So that notice you've just identified would have been there before the registration in February of 2016?

[00:04:19] Speaker 01:
Yes.

[00:04:20] Speaker 04:
So would that have been throughout?

[00:04:21] Speaker 04:
So the contract was signed in March of 2015.

[00:04:23] Speaker 04:
In 2015.

[00:04:25] Speaker 04:
So that notice would have been on the MOVA screens from the time that contract was signed?

[00:04:31] Speaker 01:
Yes, Your Honor.

[00:04:32] Speaker 01:
It was built into the software.

[00:04:33] Speaker 04:
Okay, so then the only thing you added after registration was the specific registration information, is that correct?

[00:04:40] Speaker 01:
Well, we couldn't add anything because the software was in the possession of DD3 at that point.

[00:04:46] Speaker 01:
We did not have possession of the software, so DD3 had that.

[00:04:50] Speaker 01:
All that was in there was the copyright notice that had been built into the software when it was first developed.

[00:04:55] Speaker 04:
OK, so then, OK, I think, thank you for clarifying this, because I thought it would only show up in the reshoot after the registration.

[00:05:03] Speaker 04:
But you're saying all of the shoots should have had that reared in copyright notice.

[00:05:09] Speaker 01:
Correct.

[00:05:09] Speaker 01:
And that's a perfectly appropriate use of a copyright notice, even though the copyright isn't registered.

[00:05:14] Speaker 04:
And explain how it works.

[00:05:15] Speaker 04:
The MOVA screen shows up until you press a button to start that motion.

[00:05:20] Speaker 04:
that will stay on the screen, is that right?

[00:05:22] Speaker 01:
Exactly, it's a click through.

[00:05:23] Speaker 01:
So the first screen or first frame of the captured sequence, that is the copyright notice and it would appear on any screen in the room where the video is being replayed.

[00:05:37] Speaker 01:
And then in order to play the scene back so you could look and see what you'd captured, you had to click through that.

[00:05:43] Speaker 01:
So that notice was present in the room

[00:05:46] Speaker 01:
when infringement was occurring and when Disney representatives were present supervising the conduct of DD3.

[00:05:52] Speaker 02:
But knowing that there's a copyright isn't the same as knowing there's infringement.

[00:05:56] Speaker 02:
The Disney representatives may have seen that, but they had a contract with DD3 that required indemnification, and so it would seem they could rely that DD3 had permission to use copyright software.

[00:06:14] Speaker 01:
Let me address that, Your Honor, because again, what I hope to convince the court of is that there is no requirement under vicarious copyright infringement for there to be knowledge

[00:06:24] Speaker 01:
reason to know or notice of infringement.

[00:06:26] Speaker 02:
But they have to have a, you know, the district court found there has to be sort of a practical ability to do something, and if they have no idea that there's a problem, why would they do anything?

[00:06:38] Speaker 01:
Yes, that's what the district court found, but that's simply not required for vicarious copyright infringement.

[00:06:46] Speaker 02:
So you're arguing it's more of a strict liability standard that you're on the hook here.

[00:06:52] Speaker 01:
Absolutely, Your Honor.

[00:06:53] Speaker 01:
It is a strict liability standard.

[00:06:55] Speaker 01:
And I commend the Shapiro-Bernstein case to the court because it's a very thoughtful case.

[00:07:01] Speaker 01:
And it specifically addressed this issue of why it's just prudentially sound to hold an innocent vicarious infringer liable even without knowledge of the infringement.

[00:07:13] Speaker 01:
And what the court said is that we hold them liable for vicarious infringement as a matter of risk and incentive allocation.

[00:07:22] Speaker 01:
And it said three things.

[00:07:24] Speaker 01:
It says, where the vicarious infringer has the power to police the conduct of the direct infringer, imposing liability will encourage the vicarious infringer to do so.

[00:07:35] Speaker 01:
And secondly, the court held, where the vicarious infringer has a direct financial interest in the infringement, it's just to impose

[00:07:44] Speaker 01:
the burden of liability on the party who benefits.

[00:07:47] Speaker 01:
And then thirdly, the court dealt with the issue that this court is raising, what Disney has raised, and what the Second Circuit said is even if supervision is thought to be too burdensome, the vicarious infringer has the ability to negotiate terms with the direct infringer.

[00:08:07] Speaker 01:
The vicarious infringer can require the direct infringer to obtain insurance,

[00:08:12] Speaker 01:
to protect the vicarious infringer from the risk of insolvency, and they can require that the direct infringer indemnify the vicarious infringer.

[00:08:23] Speaker 03:
I'm a little confused about there was an advisory jury, correct?

[00:08:28] Speaker 03:
Yes.

[00:08:29] Speaker 03:
That ended up, and they were given some instructions, and that's how they reached their verdict, right?

[00:08:35] Speaker 03:
Yes.

[00:08:39] Speaker 03:
district court initially accepted that verdict and then granted the GMOL, correct?

[00:08:47] Speaker 01:
Correct.

[00:08:47] Speaker 03:
And so what was that advisory jury advice?

[00:08:53] Speaker 03:
No one's contesting the jury instructions here, right?

[00:08:56] Speaker 03:
Correct.

[00:08:56] Speaker 03:
So what were they advised the law was for that advisory jury?

[00:09:01] Speaker 03:
And then when the judge looked at it after and said, no, that as a matter of law, this is wrong, I'm

[00:09:09] Speaker 03:
trying to see that distancing them from that and relying more on the Napster and the Perfect 10 cases?

[00:09:19] Speaker 01:
Yes, Your Honor.

[00:09:20] Speaker 01:
So the district court issued the Ninth Circuit pattern instruction on vicarious liability.

[00:09:28] Speaker 01:
And that instruction, the instruction that was read to the jury, had the two elements, the two elements only, that I recited to the court at the beginning of this.

[00:09:36] Speaker 01:
And actually, Disney had sought a different instruction that included this element of knowledge or ability to know of the infringement.

[00:09:46] Speaker 01:
And the district court rejected that.

[00:09:48] Speaker 01:
And so the jury was instructed simply on those two elements.

[00:09:51] Speaker 01:
Disney offered all of their proof about their inability to find out about this infringement.

[00:09:57] Speaker 01:
And they argued that theory to the jury.

[00:09:59] Speaker 01:
And the jury agreed with us and did not credit Disney's evidence.

[00:10:04] Speaker 01:
And I think wisely, because the district court on summary judgment correctly ruled that whether a company of the resources of Disney had the practical ability to supervise or control DD3 was a question for the jury.

[00:10:19] Speaker 01:
It was properly a question for the jury, and the jury considered that and decided it in our favor.

[00:10:24] Speaker 03:
So on the JMLL, the judge basically said no reasonable jury that could find this.

[00:10:31] Speaker 03:
And was that based on a different iteration of the law than the instructions that were given to the advisory jury?

[00:10:42] Speaker 01:
Yes.

[00:10:43] Speaker 01:
So here's how the district court erred.

[00:10:47] Speaker 01:
Under FONTA Visa, under Shapiro-Bernstein, the existence of the contract,

[00:10:52] Speaker 01:
The fact that the infringement occurred in a facility that was supervised and controlled by the vicarious infringer and that the vicarious infringer benefited, that's sufficient to establish liability.

[00:11:05] Speaker 01:
No need to prove knowledge.

[00:11:07] Speaker 01:
It was expressly rejected by the Shapiro-Bernstein Court.

[00:11:10] Speaker 01:
Then what the district court said is, that's not sufficient anymore.

[00:11:15] Speaker 01:
And it relied on these three cases, A&M Records versus Napster, Perfect 10 versus Amazon, and VHT versus Zillow.

[00:11:23] Speaker 01:
Now, what these three cases all have in common is that they involve a vicarious infringer who operates a website.

[00:11:34] Speaker 01:
And the vicarious infringer is a perfect stranger to the direct infringer.

[00:11:39] Speaker 01:
There is no contract between them.

[00:11:42] Speaker 01:
And when the direct infringer directly infringes, they do so in the privacy of their home or in the privacy of their personal business.

[00:11:50] Speaker 01:
And there's no Napster or Google or Zillow representative present to supervise or control them.

[00:11:58] Speaker 01:
So you can see the copyright infringers already in trouble here or the copyright owners already in trouble here.

[00:12:02] Speaker 03:
So if Napster, Perfect 10 and the other case apply to this vendor situation, then the district court is right, correct?

[00:12:13] Speaker 01:
No.

[00:12:14] Speaker 01:
I would disagree.

[00:12:15] Speaker 03:
I mean, I hear you saying we apply a different standard to

[00:12:20] Speaker 01:
Vendor like this as opposed to the platform cases well under Fono Visa The facts as I as I related them the contract the fact that infringement occurs in the defendant's facility and The financial benefit that's sufficient without knowledge without notice whatsoever

[00:12:40] Speaker 01:
What the Ninth Circuit was dealing with with these three cases is a situation where there's no relationship between the direct infringer and the vicarious infringer.

[00:12:52] Speaker 03:
And in those circumstances... So what you're saying though, what I'm trying to understand is factually you're saying this is a different situation than Napster, the Napster Trio or whatever.

[00:13:04] Speaker 03:
If the Napster Trio applies to this exact situation, I

[00:13:09] Speaker 03:
think the district court arguably could be correct.

[00:13:14] Speaker 03:
Is this a factual difference from those cases?

[00:13:17] Speaker 03:
I mean, obviously, we have to apply our precedent.

[00:13:22] Speaker 03:
And I think your friend on the other side is arguing those cases control.

[00:13:26] Speaker 03:
And therefore, under those cases, you lose.

[00:13:31] Speaker 01:
It is a factual difference.

[00:13:33] Speaker 03:
I'm just trying to mentally get it.

[00:13:35] Speaker 03:
It's a little tricky.

[00:13:36] Speaker 01:
The way I would put it, Your Honor, is that if there were no contract between Disney and DD3,

[00:13:45] Speaker 01:
And if DD3 did not perform its work in a facility that Disney controlled and that was supervised by Disney, if those facts weren't present, we don't have FONO Visa.

[00:13:58] Speaker 01:
And that's where we look to A&M Records, Perfect 10, and the Zillow case.

[00:14:03] Speaker 04:
So for those three cases, those defendants were running a platform.

[00:14:08] Speaker 04:
And these were third parties that were putting up their own third party content, whether it was they're posting their own photos on Zillow,

[00:14:15] Speaker 04:
whether they're putting their own website information content or posting content information on a third party website on Google.

[00:14:22] Speaker 04:
And for Napster, same thing, posting their own music.

[00:14:25] Speaker 04:
Whereas in this, if I look at the Disney DD3 contract, it's specifically a work made for hire for Disney's product by Disney's vendor, and Disney has control over its production.

[00:14:38] Speaker 04:
So that was not Google content that was the subject of that case, or Napster's content, or even

[00:14:46] Speaker 04:
Zillow's content, right?

[00:14:48] Speaker 04:
Those are third parties posting third-party content on a very high-volume tech platform, correct?

[00:14:53] Speaker 01:
Absolutely.

[00:14:54] Speaker 01:
Absolutely.

[00:14:54] Speaker 01:
That's correct, Your Honor.

[00:14:57] Speaker 04:
Let me ask you on the ownership question.

[00:14:59] Speaker 04:
So the Hollywood Reporter article is February 6, 2015.

[00:15:04] Speaker 04:
The contract between Disney and DD3 is entered the next month in March of 2015.

[00:15:10] Speaker 04:
And I just want to understand.

[00:15:11] Speaker 04:
So there was a Oscar given

[00:15:16] Speaker 04:
for I guess MOVA technology used in Disney's mega hit Guardians of the Galaxy, correct?

[00:15:25] Speaker 04:
Correct.

[00:15:26] Speaker 04:
And so for the technical team that used the MOVA technology, they got an Oscar.

[00:15:31] Speaker 04:
And Mr. Perlman was saying they never, he never granted a license in this case.

[00:15:39] Speaker 04:
Tell me about what it means to do an appeal for an Oscar.

[00:15:44] Speaker 04:
That's referenced in this article, and I am not familiar with.

[00:15:48] Speaker 04:
What does it mean to appeal who's getting an Oscar award for the technical contribution to a Disney mega hit film?

[00:15:56] Speaker 01:
Yes, when they award these technical achievement awards, similar to an Oscar, there's a citation that goes along with it, and it describes the history of the development, the invention, what it contributed, and who is responsible for it.

[00:16:14] Speaker 01:
And Mr. Perlman saw this citation.

[00:16:17] Speaker 01:
It was published in the Hollywood Reporter.

[00:16:20] Speaker 01:
And he followed a standard procedure that the academy provides in order to appeal an award.

[00:16:28] Speaker 01:
And you can go in and you can challenge whether in fact DD3 developed that technology, which it didn't, or reared it.

[00:16:37] Speaker 01:
And that's what Mr. Perlman did.

[00:16:40] Speaker 01:
You file essentially a written appeal.

[00:16:43] Speaker 01:
And then a committee, the committee that awarded the award, they rule on whether it was correct or not.

[00:16:50] Speaker 02:
So when he appealed, that was publicized?

[00:16:53] Speaker 01:
Yes.

[00:16:53] Speaker 01:
Yes.

[00:16:55] Speaker 01:
The article that we put in, that was publicized.

[00:16:59] Speaker 01:
That's what prompted Mr. Perlman to say, wait a minute.

[00:17:02] Speaker 01:
I never licensed DD3 to use our technology.

[00:17:04] Speaker 02:
So that seems to be an important distinction between the platform cases, Zillow and Napster,

[00:17:14] Speaker 02:
It seems there was actual knowledge that Disney should have been aware of this dispute.

[00:17:20] Speaker 02:
It was their movie that the tech was used in.

[00:17:22] Speaker 01:
Yeah, I would characterize it as reason to know, constructive knowledge, because it was published in The Hollywood Reporter.

[00:17:28] Speaker 01:
We put in evidence that Mimi Steele reads The Hollywood Reporter.

[00:17:32] Speaker 01:
She's one of the representatives that was designated with full contractual authority here.

[00:17:36] Speaker 01:
who attended some of the MOBA sessions.

[00:17:38] Speaker 01:
She reads The Hollywood Reporter.

[00:17:40] Speaker 04:
How was that established?

[00:17:41] Speaker 04:
Through her deposition?

[00:17:42] Speaker 01:
Yes, yes.

[00:17:43] Speaker 01:
But she said, gee, I must have missed that one.

[00:17:45] Speaker 01:
I didn't see it.

[00:17:47] Speaker 02:
The problem with Zillow and Napster and Google is I thought the court was concerned that given there were third parties, there's no contract relationship, and the platforms didn't have the ability to essentially read all this content and find out what it was, if it was something that had a copyright.

[00:18:06] Speaker 02:
That wouldn't be the case here, if I understand this correctly.

[00:18:10] Speaker 01:
Well, Disney would have to investigate.

[00:18:14] Speaker 01:
And the fact is they didn't do anything.

[00:18:16] Speaker 01:
They had the power to terminate this contract for copyright infringement.

[00:18:21] Speaker 01:
That contemplates that there is some form of supervision going on during the use of the software.

[00:18:27] Speaker 01:
Disney didn't do anything, did not exercise that power.

[00:18:30] Speaker 01:
So it's a matter of speculation.

[00:18:31] Speaker 01:
We will never know what Disney would have concluded if it had taken the time, used some of its fine lawyers to investigate this matter and whether it was prudent to go ahead with MOVA given the issues that were going on.

[00:18:44] Speaker 01:
We'll never know.

[00:18:45] Speaker 04:
Let me ask, with this appeal, let's say the Academy came out with a different decision as to who should be receiving this technology award.

[00:18:54] Speaker 04:
Would they then give a different technology Oscar then?

[00:18:58] Speaker 04:
How would the appeal play out?

[00:19:00] Speaker 04:
What was the evidence of trial about?

[00:19:01] Speaker 04:
I really don't know how this appeal works, so if you could provide clarification.

[00:19:06] Speaker 01:
Sure.

[00:19:07] Speaker 01:
So what happens is Mr. Perlman wants to appeal.

[00:19:10] Speaker 01:
He fills out essentially a form that's provided by the Academy.

[00:19:15] Speaker 01:
that allows him to say what his grounds for appeal are.

[00:19:18] Speaker 01:
And in this case, what he was saying is, look, none of these, you are awarding this award to some people who didn't contribute at all to this technology.

[00:19:27] Speaker 01:
And DD3 didn't invent it.

[00:19:29] Speaker 01:
My company invented it.

[00:19:31] Speaker 01:
And so he put that in.

[00:19:32] Speaker 01:
If he had prevailed on that, right, before the Academy, then the Academy would have awarded the award to Reardon.

[00:19:41] Speaker 01:
And Mr. Perlman would have been included in the people who developed it and others other than the people who the Academy gave it to.

[00:19:53] Speaker 01:
They were the people who worked for DD3 and submitted their request for the award.

[00:20:00] Speaker 01:
They wanted it for themselves.

[00:20:02] Speaker 04:
What was the evidence at trial that Disney cares about any Oscars related to its own movies?

[00:20:12] Speaker 01:
I think we regarded that as self-evident, Your Honor, that when movies win Oscars, the posters in front of the theaters all say it's an Oscar-winning movie.

[00:20:26] Speaker 01:
They promote that the actress won an Oscar for the role in the movie that's going on.

[00:20:32] Speaker 01:
I guess I don't think we put in testimony where somebody said that matters to us.

[00:20:40] Speaker 01:
But I think in everyone's common experience, that's a big deal to movie studios.

[00:20:47] Speaker 02:
Did Mr. Perlman lose that appeal with the Academy?

[00:20:51] Speaker 01:
Yes, he did.

[00:20:52] Speaker 01:
Yes, the Academy decided that they had decided correctly.

[00:20:56] Speaker 02:
Is there any level of recourse beyond the Academy, or is that it?

[00:21:00] Speaker 02:
That's the final decision?

[00:21:01] Speaker 01:
There wasn't.

[00:21:02] Speaker 01:
I suppose a creative lawyer might have run off to court and, you know, filed for an injunction or something, but he didn't take that route.

[00:21:12] Speaker 02:
Then was there later an ownership determination in a court?

[00:21:17] Speaker 01:
Yes.

[00:21:18] Speaker 02:
And Reardon prevailed?

[00:21:19] Speaker 01:
Yes, it did.

[00:21:21] Speaker 02:
And that occurred after this movie was, the production was completed, is that correct?

[00:21:29] Speaker 01:
It was after completion of principal photography.

[00:21:34] Speaker 01:
The movie was still in post-production at the time, but yes, most of the use of MOVA occurred prior to that ruling.

[00:21:46] Speaker 04:
But it was before the release of Beauty and the Beast, which is the movie we're talking about here, right?

[00:21:49] Speaker 04:
Correct.

[00:21:49] Speaker 04:
I just want to clarify, we're not talking about Guardians of the Galaxy.

[00:21:52] Speaker 01:
Right, right.

[00:21:53] Speaker 01:
This is Beauty and the Beast at this point.

[00:21:55] Speaker 03:
All right.

[00:21:55] Speaker 03:
Let me find out.

[00:21:56] Speaker 03:
We've taken you over time, but any additional questions by the panel?

[00:22:01] Speaker 03:
Thank you.

[00:22:02] Speaker 03:
All right.

[00:22:02] Speaker 03:
So you're two minutes over.

[00:22:04] Speaker 03:
I'll give you two minutes for rebuttal, since we asked you a lot of questions.

[00:22:07] Speaker 01:
OK.

[00:22:08] Speaker 01:
Thank you, Your Honor.

[00:22:09] Speaker 01:
You're welcome.

[00:22:09] Speaker 01:
We would submit the two evidentiary issues that we raised on the briefs.

[00:22:13] Speaker 03:
All right.

[00:22:14] Speaker 01:
Thank you.

[00:22:21] Speaker 03:
Good morning.

[00:22:22] Speaker 00:
Good morning, Judge Callahan.

[00:22:24] Speaker 00:
Thank you, and may it please the court.

[00:22:25] Speaker 00:
I'm Kelly Klaus for Walt Disney Pictures.

[00:22:29] Speaker 00:
And the court asked a number of factual questions.

[00:22:32] Speaker 00:
I'd like to make sure that we're clear on a few of these before we go too much farther.

[00:22:38] Speaker 00:
Judge Koh and Judge Beatty, you were asking questions about the Academy Awards.

[00:22:42] Speaker 00:
And just so we're 100% clear,

[00:22:45] Speaker 00:
And I didn't know all this before working on the case.

[00:22:48] Speaker 00:
We are not talking about somebody at the Kodak Theater getting the gold statue that they put on the mantle.

[00:22:57] Speaker 00:
The award in question is from the Science and Technology Committee.

[00:23:04] Speaker 00:
It is not called an Academy Award.

[00:23:05] Speaker 00:
It's called a certificate from the Academy.

[00:23:08] Speaker 00:
I don't mean to demean it at all, but just so we're clear, this is not- It's kind of a little tiny gold.

[00:23:14] Speaker 00:
It's a piece of paper.

[00:23:16] Speaker 00:
It's a piece of paper with the Academy's name on it.

[00:23:19] Speaker 00:
And it's important, it's meaningful.

[00:23:22] Speaker 04:
Okay, but is it credible to think that for Guardian of the Galaxy, which was a really Marvel mega hit owned by Disney, that Disney would not pay attention to who's getting Academy certificates for its own hit movies?

[00:23:36] Speaker 04:
That just...

[00:23:39] Speaker 04:
Why couldn't a jury, looking at this Hollywood Reporter article, think, well, Disney should have known.

[00:23:44] Speaker 04:
He's saying he never granted them a license.

[00:23:48] Speaker 04:
He's appealing to the Academy.

[00:23:49] Speaker 04:
Why wouldn't Disney at least have made the effort to do a little due diligence?

[00:23:54] Speaker 04:
because you signed the contract the very next month, March 2015, and just find out, well, I'm entering into a contract for this DD3 to do a work made for hire for me, just to make sure that they actually are licensed.

[00:24:07] Speaker 04:
Or was there no concern because they were going to indemnify Disney regardless, so it was not going to be a financial hit?

[00:24:12] Speaker 00:
So Judge Coe, to be 100% clear, there was zero evidence, zero evidence in the record that anyone at Disney

[00:24:21] Speaker 00:
saw the article in the Hollywood Reporter with the protest.

[00:24:24] Speaker 00:
There was zero evidence that was introduced that this was something that was important.

[00:24:29] Speaker 04:
But a jury could infer, a jury could infer that perhaps that Disney person who said that I am responsible for signing these vendor contracts, I do read the Hollywood Reporter, I don't quite recall that one, they could have made their own credibility assessment.

[00:24:46] Speaker 00:
I believe, Your Honor,

[00:24:48] Speaker 00:
That question is not part of the, the question that Mr. Carlson represented was not even part of the record.

[00:24:55] Speaker 00:
So we're going outside of the record of what we're saying is that, Oh, this just must have happened.

[00:25:00] Speaker 00:
This wasn't there.

[00:25:01] Speaker 04:
There was the Hollywood reporter was an exhibit at trial, correct?

[00:25:06] Speaker 00:
It was an exhibit at trial.

[00:25:08] Speaker 00:
And there's zero evidence that anyone at Disney saw that your honor.

[00:25:13] Speaker 00:
Um,

[00:25:14] Speaker 00:
The second thing in Judge Code, this goes to your questions about the copyright notice.

[00:25:19] Speaker 00:
And just so we're clear on the facts of the copyright notice, there is a photo that Reardon included in its reply brief.

[00:25:29] Speaker 00:
It was trial exhibit 75, which shows a sample MOVA setup.

[00:25:34] Speaker 00:
To be clear, this was not Beauty and the Beast.

[00:25:37] Speaker 00:
That was a, Mr. Perlman testified that was a promotional photo that was taken during the time that Reardon owned MOVA from 2007 to 2012.

[00:25:49] Speaker 00:
And what it shows is a setup on set with people who work for MOVA or for the third party vendor.

[00:25:59] Speaker 00:
And if I can use this courtroom as an illustration, it would be like that monitor over there.

[00:26:05] Speaker 00:
I would pretend I'm the director.

[00:26:08] Speaker 00:
Let's pretend you're Dan Stevens in the rig acting.

[00:26:13] Speaker 00:
The people who worked for Disney, their attention was this way.

[00:26:17] Speaker 00:
Zero evidence that anyone was looking at the monitors that were on the screen of the person who was doing the facial capture.

[00:26:25] Speaker 03:
What was the evidence of what was on the screen, though?

[00:26:29] Speaker 03:
What was the evidence in trial?

[00:26:32] Speaker 00:
The evidence in trial.

[00:26:33] Speaker 00:
is that the people who work for DD3, who are sitting there, that when they have a technology that's called raw player, the format that this comes in is called raw.exe.

[00:26:48] Speaker 00:
And the evidence is that when one of those people presses the playback button, that the very first screen stops and it says copyright Reardon,

[00:27:00] Speaker 00:
And it says whatever the year happens to be that the actual image is being made, which is not the copyright year that's relevant here.

[00:27:13] Speaker 00:
The year of creation, Judge Coe, was 2007.

[00:27:17] Speaker 00:
But that person would see what was on the screen.

[00:27:20] Speaker 04:
So you're saying the date would be the date that that image would show it up.

[00:27:25] Speaker 04:
How many times do you think it showed up each time?

[00:27:27] Speaker 04:
Every time a new MOVA screen came up, it would show up reared in copyright, correct?

[00:27:32] Speaker 00:
Every time that somebody played back a file on a MOVA computer, which is over here,

[00:27:43] Speaker 00:
Now, the evidence was that the files that the people at Disney reviewed were not in the raw.exe format.

[00:27:55] Speaker 00:
And I would refer your honor to.

[00:27:56] Speaker 04:
But they were in the room when all of these, how many files are there that have reared in copyright?

[00:28:01] Speaker 00:
I have no idea how many there are.

[00:28:02] Speaker 00:
I have no idea that there was any playback.

[00:28:06] Speaker 00:
I would refer, Your Honor, to two things.

[00:28:08] Speaker 04:
What does it mean there was no playback?

[00:28:09] Speaker 04:
Because you just said any time you open up a file, copyright reardon would show up.

[00:28:14] Speaker 00:
Because there are, to be very clear, there is a playback on a MOVA computer.

[00:28:22] Speaker 00:
The MOVA computer is capturing the data that's being done.

[00:28:27] Speaker 00:
There is a technician who works for DD3,

[00:28:31] Speaker 00:
who's sitting there typing things in, he's looking at things.

[00:28:36] Speaker 00:
What the director reviews to decide which cut am I, which shot am I going to take?

[00:28:43] Speaker 04:
Sorry, you're not answering my question.

[00:28:44] Speaker 00:
I am trying to answer your question, Judge Cote.

[00:28:46] Speaker 04:
I'm not hearing an answer to my question.

[00:28:48] Speaker 04:
Let me ask you another one.

[00:28:50] Speaker 04:
So this contract specifically says it's a work made for hire, specially ordered or commissioned by producer.

[00:29:00] Speaker 04:
and is the sole property of producer for any and all purposes whatsoever.

[00:29:05] Speaker 04:
I'm reading from page eight, section nine, ownership of the contract.

[00:29:10] Speaker 04:
That is different than a platform, right, where third parties are posting third party content that Google doesn't control.

[00:29:19] Speaker 04:
It's a very high volume, I think we would all agree, right?

[00:29:24] Speaker 04:
Google runs a very high volume platform and is not going to be able, I think the technology

[00:29:30] Speaker 04:
showed that for at least some of these cases, they just didn't have the ability to look at every single image of third-party content posted by third parties.

[00:29:38] Speaker 04:
But this is a work made for hire by the primary vendor on these images of the beast's face.

[00:29:47] Speaker 04:
So tell me why that's not different than Napster, A10, and the Zillow case.

[00:29:53] Speaker 00:
Two reasons, Your Honor.

[00:29:54] Speaker 00:
One is there was a contract between Google and the individuals.

[00:29:59] Speaker 00:
There was a contract between... But you agree it's third-party content, right?

[00:30:03] Speaker 04:
It's third-party content that's being discussed there versus being uploaded versus this is Disney's movie, Beauty and the Beast.

[00:30:13] Speaker 00:
And that goes to the question of practical ability, Your Honor.

[00:30:18] Speaker 00:
And the language of the cases, and I want to be clear because there is

[00:30:22] Speaker 00:
an argument that my friend on the other side was making that these three cases are platform cases and they're distinguishable.

[00:30:29] Speaker 00:
That is, we would submit, not a fair reading of the law.

[00:30:33] Speaker 00:
The law in this area has evolved in common law fashion with a, with reliance in the platform cases on the physical cases.

[00:30:45] Speaker 00:
And what I would refer you to, Your Honor, is in the, I'd refer you to the Napster case.

[00:30:50] Speaker 00:
According to my friend on the other side,

[00:30:52] Speaker 00:
The law in this area froze with Shapiro Bernstein saying that we aren't going to look at anything.

[00:31:00] Speaker 00:
We're going to make this a strict liability tort.

[00:31:03] Speaker 00:
And the law has evolved quite beyond that.

[00:31:06] Speaker 00:
What the court in the Fona Visa case, not a platform case, plain old physical world case, what was important to the court in Fona Visa, Your Honor, was that the owner of the swap meet

[00:31:21] Speaker 00:
of cherry auction, controlled and patrolled the premises.

[00:31:28] Speaker 00:
That's 76F3 at 262.

[00:31:30] Speaker 04:
But isn't that the same thing?

[00:31:32] Speaker 04:
Let's say it's a trade show.

[00:31:34] Speaker 04:
Let's say it's a flea market.

[00:31:35] Speaker 04:
You're in the same

[00:31:37] Speaker 04:
Position as a third party tech platform right these are third parties running their own like you said a swap meet selling their own items That's a trade show other companies are putting on their own trade booths That is a different situation When it's a work made for hire I?

[00:31:58] Speaker 04:
One product by the vendor for the owner of the product that's true your honor the the the

[00:32:06] Speaker 00:
What we would submit the issue is that what's analogous here is what is detectable here?

[00:32:14] Speaker 00:
What can be controlled and patrolled?

[00:32:16] Speaker 03:
Well, it does appear that Disney had the right and ability to control DD3's product.

[00:32:23] Speaker 03:
Why doesn't that support a determination of vicarious liability even if Disney lacked the practical ability to identify the infringement?

[00:32:34] Speaker 03:
It's, you know, and I have to ask, why isn't the presence of Condon and Gaub when DD3 was using MOVA in the facial motion capture process sufficient to show that Disney had the ability to identify the infringement?

[00:32:51] Speaker 00:
A couple of things, Your Honor.

[00:32:53] Speaker 00:
One is that what the, it's a two-part test as the court's cases make clear.

[00:32:59] Speaker 00:
including just most recently, I'll defer you to Judge Akuta's decision in the Perfect 10 versus Amazon case.

[00:33:05] Speaker 00:
And what she says, 508 F3 at 1174, is that you need both.

[00:33:12] Speaker 00:
It's not enough to have a contractual right.

[00:33:15] Speaker 00:
There's no dispute that there was a contractual right that had Disney discovered something, they had the power to terminate the relationship and to tell DD3 to do something.

[00:33:24] Speaker 00:
The question is,

[00:33:26] Speaker 00:
on the factual record in this case, was the infringing conduct reasonably detectable?

[00:33:35] Speaker 00:
That's what the Napster case says.

[00:33:37] Speaker 02:
And what Judge Acuta said in her... What if we were to agree with Reardon that the fact that ownership was disputed was information that was available to Disney?

[00:33:54] Speaker 02:
Would that be sufficient?

[00:33:56] Speaker 00:
No, Your Honor, because the ownership dispute, just to be clear here, what was sort of behind the curtain in terms of whether or not anything was what could have been found, that was something that took two years before Judge Tiger for there to be a determination of whether there was ownership.

[00:34:21] Speaker 00:
Had Disney learned of the dispute, had they gone to DD3,

[00:34:25] Speaker 00:
DD3 would have given them an intercompany piece of paper that says, we have the right to use this.

[00:34:32] Speaker 00:
And the ownership dispute before Judge Tiger started in 2015, just so we're clear.

[00:34:41] Speaker 00:
It's not just that it was the question of whether it was resolved before the movie was resolved.

[00:34:45] Speaker 00:
Judge Tiger didn't issue his decision in that case until August 2017, which was a month after Reardon filed this lawsuit.

[00:34:55] Speaker 00:
And in fact, one of the things that he said in his summary judgment ruling on contributory infringement, and the reason that the contributory infringement claim was knocked out of the case, was he said, no one could have known, it's not reasonably knowable, how this would have been resolved until we went through an entire trial and I resolved this ownership dispute.

[00:35:19] Speaker 00:
And I should also say, there was, to the point of,

[00:35:23] Speaker 00:
What could have been done?

[00:35:26] Speaker 00:
Mr. Perlman obviously knew that Disney had used a vendor that used the MOBA technology in 2014.

[00:35:36] Speaker 00:
He had worked with Disney years before when, before the MOBA technology transferred ownership out of Reardon, he could have picked up the phone and called, which he never did.

[00:35:52] Speaker 00:
He could have said, that's my software.

[00:35:55] Speaker 00:
That's my technology.

[00:35:57] Speaker 03:
It's been stolen from me.

[00:35:58] Speaker 03:
The test, the instruction that was given to the jury, which they came up with obviously a lot less money than what Reardon was asking for.

[00:36:11] Speaker 03:
But that being said, and initially Judge Tiger accepted it and then he set it aside.

[00:36:16] Speaker 03:
So my question is, for you to win clean,

[00:36:21] Speaker 03:
Don't we have to decide that there's no distinction between, that Napster just applies straight out?

[00:36:31] Speaker 00:
Your Honor, we'd submit that the, yes, the tests that are articulated in those cases and Perfect 10 doesn't say we have a special rule on what it means for practical ability for platform cases.

[00:36:47] Speaker 00:
In fact, at page, I would refer you to page 1174

[00:36:51] Speaker 00:
And what the court says is, our case, which is a platform case, is different on practical ability than FonaVisa.

[00:37:01] Speaker 00:
And the reason was that in FonaVisa, the swap meet operator had the ability to, quote, identify and police the conduct.

[00:37:13] Speaker 04:
Now, the court for the court.

[00:37:14] Speaker 04:
What I guess I don't understand, you're saying Disney's in the room.

[00:37:19] Speaker 04:
And they just choose not to look at the screen.

[00:37:22] Speaker 04:
So I don't understand why there's not an ability to investigate.

[00:37:27] Speaker 04:
You're saying, oh, but, you know, Reardon should have sent a letter.

[00:37:30] Speaker 04:
But the law puts on the even innocent infringer the obligation to be guarding because they're in a better position.

[00:37:38] Speaker 04:
to guard against infringement than the copyright owner who's not in the room, right?

[00:37:42] Speaker 04:
Who's not in the room.

[00:37:44] Speaker 04:
Disney just chose not to look at that screen, right?

[00:37:47] Speaker 04:
But they're in the room when those copyrights keep flashing on the MOVA screen.

[00:37:52] Speaker 04:
And perhaps it's because, you know, our law says it's on the duty of the even innocent infringer because you can either get indemnification or you can do due diligence inquiry.

[00:38:06] Speaker 04:
That's where the burden is.

[00:38:07] Speaker 04:
on these cases, correct?

[00:38:09] Speaker 00:
No, let me get to the second point on the copyright notice, because we've established that there is no evidence in the record.

[00:38:17] Speaker 00:
But the second point is, had they seen a one second copyright notice, that would have told them nothing.

[00:38:24] Speaker 04:
I guess this is the question, why couldn't the jury have reasonably concluded that Disney had the practical ability

[00:38:33] Speaker 04:
Conduct that due diligence in that room when it's showing up on the screen Why couldn't a reasonable jury have come to that conclusion?

[00:38:40] Speaker 00:
That would first of all your honor if the if the argument is that there was a copyright notice that flashed With the name of a copyright owner that that indicates that infringing conduct is going on that would be an extraordinary ruling your honor with respect to

[00:38:54] Speaker 00:
The fact that a copyright notice appears in the header screen of a computer software program when you boot it up is not at all unusual.

[00:39:04] Speaker 00:
The fact that it would have had Reardon's name when it was known.

[00:39:07] Speaker 03:
Well, I guess what I'm wondering is if you make those arguments, isn't that why you win in front of a jury?

[00:39:14] Speaker 03:
But when it's a JMOL, we have to give all inferences in favor of the verdict, right, and to the party that got the verdict.

[00:39:22] Speaker 03:
So I guess what Judge Koh is saying is why couldn't a jury, with all that evidence, even though you argue otherwise and you could win on, they could have found every, you know, they obviously bought some of your arguments, they didn't buy, they wanted a lot more money, but why couldn't a jury have reasonably inferred from those facts that

[00:39:48] Speaker 03:
Disney had the practical ability to do it, whether they did or they didn't, but they had it.

[00:39:54] Speaker 03:
Why couldn't they infer that?

[00:39:55] Speaker 00:
Because, Your Honor, on the copyright notice point, because there is nothing about the presence of a copyright notice on the one second when a frame, when a program boots up or something plays that says, oh, you have to go investigate whether this is authorized.

[00:40:17] Speaker 00:
It happens with every computer program that, at least, I still boot up on my machine.

[00:40:22] Speaker 00:
There's a copyright notice that flashes up.

[00:40:25] Speaker 00:
I don't sit there and say, oh, I'm on notice that there's copyright infringement.

[00:40:31] Speaker 00:
There just isn't.

[00:40:32] Speaker 00:
That wouldn't have put them on notice.

[00:40:36] Speaker 03:
Well, but the jury obviously thought it did.

[00:40:39] Speaker 03:
Well, with respect to... So, I mean, I'm not saying you don't have a good argument, but you lost there.

[00:40:46] Speaker 03:
So then we have to look at the JML in terms of, is there any way that this verdict can be sustained?

[00:40:54] Speaker 03:
Totally, totally... Not whether it would be our choice or not whether how we would have ruled.

[00:40:59] Speaker 00:
I understand that that's a standard, Judge Callahan, but we think that as Judge Tiger went through the evidence that was put forward by Reardon in opposition to our JNOV motion, he went through the trial evidence, he sat through the trial evidence, and what he found was there was nothing in the record that made infringing conduct detectable.

[00:41:27] Speaker 00:
And that is what Napster says you have to have.

[00:41:30] Speaker 00:
That's what Fona Visa says.

[00:41:32] Speaker 00:
It says it regardless of whether it is in the platform world.

[00:41:36] Speaker 00:
or in the physical world.

[00:41:38] Speaker 04:
You still need to have something where you have... But knowledge of direct infringement is not an element of vicarious liability.

[00:41:45] Speaker 04:
You agree with that, right?

[00:41:46] Speaker 04:
That is the law.

[00:41:48] Speaker 04:
I do.

[00:41:48] Speaker 04:
And so it seems like you are pushing that that knowledge is required, and that's in tension with just the ability to identify infringement, which the jury could have reasonably concluded that ability existed.

[00:42:00] Speaker 00:
But they, your honor, what this court's cases say, it's not that I'm trying to push it.

[00:42:05] Speaker 00:
I'm taking the language from the Napster case, from the Fona Visa case, from the VHT versus Zillow case, and from Perfect 10 versus Amazon.

[00:42:14] Speaker 00:
I'm taking this court's standards.

[00:42:17] Speaker 00:
this court standards say that that practical ability means something means the ability to identify and police to control and patrol and the patrol here what you're talking about actually let me let me correct myself the district court imposed that ability to identify infringement but that's

[00:42:38] Speaker 04:
I think that that actually has not been what's been required in our cases.

[00:42:42] Speaker 04:
I'm going to quote from Grokster, vicarious liability allows imposition of liability when the defendant profits directly from infringement and has a right and ability to supervise the direct infringer even if the defendant initially lacks knowledge of the infringement.

[00:42:54] Speaker 04:
So we have just repeatedly said knowledge is not required.

[00:42:58] Speaker 00:
We're not talking about knowledge here, Your Honor.

[00:43:00] Speaker 00:
We're talking about the practical ability to identify and to control.

[00:43:05] Speaker 00:
And in the Perfect 10 versus Amazon case, 508 F3rd at 1174, the court says what distinguishes that case from another platform case, Napster, and from the Fonavisa case in the physical world was in those cases,

[00:43:25] Speaker 00:
The word is they had the ability to identify and police the infringing activity by patrolling the premises.

[00:43:33] Speaker 04:
The premises here, Your Honor, were in the room with the MOVA screen, and it wasn't being patrolled.

[00:43:39] Speaker 00:
Your Honor, I will say again, even if there was evidence that somebody saw a copyright notice, that would not put anyone on notice that that was an infringing use.

[00:43:49] Speaker 00:
And I will just say one other thing on the copyright notice, Your Honor.

[00:43:52] Speaker 00:
That copyright notice appeared

[00:43:55] Speaker 00:
because it was there on the raw.exe files, that would have been there during the years that Reardon didn't own it, indisputably didn't own it from 2012 to 2013.

[00:44:08] Speaker 00:
Vendors who are using software are going to have lots of things appear.

[00:44:12] Speaker 00:
They aren't a red flashing light that says the use of this is infringing.

[00:44:16] Speaker 03:
Let me ask you this, just really quickly, unless my colleagues have it.

[00:44:21] Speaker 03:
Whatever our decision is, should we publish, or is this a case that's two facts specific to provide much guidance to the bench and bar?

[00:44:34] Speaker 00:
I would say, Your Honor, that the decision here follows from the court's precedent.

[00:44:41] Speaker 00:
As I've tried to articulate, I don't think you

[00:44:44] Speaker 00:
I don't think you can say that the world is divided into platform cases and non-platform cases.

[00:44:53] Speaker 03:
So Napster at all covers this?

[00:44:56] Speaker 00:
When Napster, when they are applying the same standard and referring back to one another.

[00:45:00] Speaker 00:
I do think that the issues in these cases and what the evolution of the law, frankly from the Shapiro case, which itself looked to things like

[00:45:13] Speaker 00:
landlord tenant, dance hall, employer, employee, and trying to figure things out.

[00:45:19] Speaker 00:
There has been a, there has been an evolution in that area.

[00:45:23] Speaker 03:
And one of the things- Well, it would seem to me if we accept what you're saying and you prevail, that we would be saying as a matter of law on these facts, there was no practical ability to identify

[00:45:42] Speaker 03:
Correct.

[00:45:43] Speaker 03:
So that's a little different.

[00:45:47] Speaker 00:
We think it actually follows from some of the other cases.

[00:45:51] Speaker 00:
As to whether or not it's important to put it out there, I do think that if, one thing I would say, Your Honor, and this is what the evidence of trial was, which is that if a motion picture producer, if anyone who contracts with a software, with somebody who is providing high tech services,

[00:46:10] Speaker 00:
is all of a sudden strictly liable and on the hook for going through and evaluating not just saying do you have proof of ownership because we know DD3 would have given them something here but you're responsible and you're on the hook if two years later

[00:46:28] Speaker 00:
A judge says, yes, I have found that under this stealth transaction that Mr. Perelman engaged in, he reacquired ownership of Mellon.

[00:46:38] Speaker 00:
That, Your Honor, I think would be revolutionary.

[00:46:42] Speaker 00:
And I would just say there was no evidence, none, that there is any problem.

[00:46:50] Speaker 00:
And think about this, unlike in the Shapiro case, where there was evidence that there was problems with bootleg recordings being sold through

[00:46:58] Speaker 00:
department stores, and the Second Circuit quite rightly wondered, we don't want to put the department store in a position where they can just turn their eyes away and let all this infringement happen.

[00:47:09] Speaker 03:
We've taken you quite a bit over, and I am responsible for that.

[00:47:13] Speaker 03:
Can I ask you one more question?

[00:47:14] Speaker 02:
Judge Beatty has one more question for you.

[00:47:21] Speaker 02:
The case law establishes that a defendant like Disney has the ability to protect it against what you just said would be this revolutionary holding by having indemnification agreements in their contracts, and Disney had that here.

[00:47:34] Speaker 02:
So it doesn't seem that outlandish to follow the case law that says this is strict liability.

[00:47:39] Speaker 02:
You've taken steps, the company has taken steps to protect itself.

[00:47:45] Speaker 02:
Why does that make this just so?

[00:47:47] Speaker 00:
Unheard of when the the company clearly knew that they could take those steps, and they did and that they should and that they did Your honor the endemic two things the indemnification is only as good as that the party behind it and here we had somebody who was saying that it was threatening and saying that the use of our technology in this little part of this massive production pipeline was responsible for tens of millions of dollars in profits and

[00:48:15] Speaker 00:
And the second thing is we have been litigating this case now for eight years through to this point.

[00:48:22] Speaker 00:
So a representation warranty is a good thing.

[00:48:26] Speaker 00:
And if there was a problem, then we have those for a reason.

[00:48:32] Speaker 02:
And you also have insurance.

[00:48:34] Speaker 02:
I mean, all of these issues that are built into these contracts to deal with this potential problem.

[00:48:40] Speaker 00:
Again, Your Honor, Google has insurance.

[00:48:45] Speaker 00:
Zillow had insurance.

[00:48:49] Speaker 00:
Zillow, Napster, Google, they all had terms of use with their users.

[00:48:54] Speaker 00:
They could have gone after those people as well.

[00:48:57] Speaker 00:
Simply having that legal right, no case has ever said, and I'll come to the Shapiro case where it said that's something to focus on, but no case, certainly none of this court's cases, has said, oh,

[00:49:12] Speaker 00:
If you've got representations and warranties, we don't need to worry about practical ability to control.

[00:49:18] Speaker 02:
But we don't have to, but the cases have said that knowledge is not a requirement.

[00:49:24] Speaker 00:
Knowledge is not a requirement, but detectable acts of infringement are.

[00:49:29] Speaker 00:
The way that Napster says it is, the reason that you have vicarious liability where you get it

[00:49:37] Speaker 00:
is where somebody turns a blind eye to detectable acts of copyright infringement.

[00:49:44] Speaker 03:
Thank you.

[00:49:45] Speaker 03:
All right.

[00:49:45] Speaker 03:
There are no further questions of you.

[00:49:46] Speaker 03:
Thank you for your argument.

[00:49:48] Speaker 00:
Thank you, Your Honor.

[00:49:50] Speaker 03:
All right.

[00:49:50] Speaker 03:
And I gave you two minutes for rebuttal.

[00:50:01] Speaker 01:
I'll be very brief.

[00:50:03] Speaker 01:
If it matters, there is

[00:50:05] Speaker 01:
a small gold statue that goes with this.

[00:50:08] Speaker 01:
Mr. Cotter, the programmer, proudly displayed it behind him in his video deposition, which was shown to the jury.

[00:50:17] Speaker 01:
Mr. Claus is arguing not just for constructive knowledge here.

[00:50:22] Speaker 01:
They're asking this court to agree that actual knowledge is required.

[00:50:28] Speaker 01:
He said that zero evidence that anyone actually saw the Hollywood Reporter article

[00:50:34] Speaker 01:
and zero evidence that they saw the Reardon copyright notice.

[00:50:38] Speaker 01:
So unless Disney sees the copyright notice, unless Disney actually sees the Hollywood Reporter article, then we're not going to impose liability.

[00:50:47] Speaker 03:
I don't exactly agree.

[00:50:49] Speaker 03:
Anytime anyone tells me there's no or there's zero, I automatically, my skeptical antennae go up.

[00:50:56] Speaker 03:
But there were not people that testified that said they saw it.

[00:51:03] Speaker 03:
What the evidence, the way I would characterize the evidence, and I don't mean to cut you off, is you said when it appears on the screen.

[00:51:13] Speaker 03:
So then from that, what inferences can flow from that?

[00:51:20] Speaker 01:
Right, Your Honor.

[00:51:21] Speaker 03:
And while it's... I mean, there were not witnesses that were called that said that I saw that.

[00:51:27] Speaker 03:
Yes.

[00:51:27] Speaker 01:
It doesn't mean there was zero evidence it means no witness testified to that right in Mr.. Claus is right knowledge is not required In the law there were hundreds the testimony showed there were hundreds of MOVA files that were displayed hundreds because there are multiples Takes for each scene the director will say okay.

[00:51:53] Speaker 01:
Give me that scene again, but give me a little snarl here or whatever

[00:51:56] Speaker 01:
And so there'll be multiple takes.

[00:51:58] Speaker 01:
There were hundreds of these files, hundreds of opportunities to see the copyright notice, and it wasn't there.

[00:52:05] Speaker 01:
Mr. Claus said in the Google case, there was a contract.

[00:52:08] Speaker 01:
That's true.

[00:52:09] Speaker 01:
I direct the court to the court's analysis on that.

[00:52:13] Speaker 01:
It was an advertising contract, sharing advertising revenue for those third party websites.

[00:52:19] Speaker 01:
And the court examined that and said there's no right to supervise or control the content that's being posted.

[00:52:28] Speaker 01:
He said that the liability... But you've gone over in your extra time, so please wrap it up.

[00:52:34] Speaker 01:
Okay.

[00:52:37] Speaker 01:
Your Honor, there was a statement that Google and Zillow, in those cases, that they required insurance from the users of their website.

[00:52:48] Speaker 01:
Defy counsel to point us to where that is.

[00:52:51] Speaker 01:
It's nowhere in their

[00:52:53] Speaker 01:
There isn't a contract between Google and its users other than this advertising contract with third-party websites that didn't give them any control over content.

[00:53:04] Speaker 01:
Thank you very much.

[00:53:05] Speaker 03:
All right.

[00:53:05] Speaker 03:
Thank you both for your arguments in this matter.

[00:53:07] Speaker 03:
This will stand submitted.