Tag: copyright infringement

Supreme Court Paves Way for Revoking State Sovereign Immunity for Copyright Infringement

Post author By Joshua Grove
Post date March 31, 2020

U.S. Supreme Court building Last week, the Supreme Court handed down its unanimous judgment in Allen v. Cooper, a copyright case involving both actual and metaphorical pirates. The actual pirate was Edward Teach, better known as Blackbeard, who captured a French ship in the Indies, renamed it Queen Anne’s Revenge, used it for piracy, and then later ran it aground near the North Carolina coast in 1718. The shipwreck was discovered nearly three centuries later in 1996 by a marine salvage company named Intersal. North Carolina, the owner of the shipwreck, entered into an agreement with Intersal for its recovery, and Intersal in turn hired Rick Allen, an underwater photographer, to document those efforts through video footage and still images.

Enter the metaphorical pirates. Allen accused North Carolina of infringing his copyrights in the videos and images, which led to a settlement agreement between the parties in 2013 and the state paying Allen $15,000 for any past infringement in 2014. However, even after the settlement agreement, Allen claimed that North Carolina continued to use his video footage and still images without permission. In fact, the state legislature passed a law declaring all photographs and video recordings of its shipwrecks to be a “public record” and thus free for all to use in 2015. Upset at the turn of events, Allen filed suit in the Eastern District of North Carolina in late 2015, with the Governor of North Carolina as the lead, nominal defendant.

Allen sought to have invalidated as unconstitutional and unenforceable North Carolina’s law purporting to inject his videos and images into the “public record,” and he claimed that the state was liable for willful copyright infringement. North Carolina moved to dismiss the complaint, arguing that it had sovereign immunity under the Eleventh Amendment, which bars suits against a state by private individuals in federal courts without the state’s consent. In its unanimous judgment, the Supreme Court sided with North Carolina, holding that the state’s sovereign immunity trumped Allen’s claims. This means that, as of now, states are free from liability for copyright infringement. But, in so holding, the Supreme Court paved the way for how Congress could revoke this constitutional protection from the states.

To understand the Court’s suggestion, a little background information is needed. Under the Copyright Act of 1976, it was generally understood that states could be liable for copyright infringement, even though this was not expressly spelled out in the Act. That implicit understanding was called into question in the Supreme Court’s 1985 decision in Atascadero, which held that the waiver of sovereign immunity by a state must be “unequivocal.” Courts then applied that holding to find that the Copyright Act did not clearly abrogate state sovereign immunity. This led to Congress passing the Copyright Remedy Clarification Act (CRCA) in 1990, which expressly abrogated state sovereign immunity for copyright infringement.

The CRCA, codified in Section 511, provides in part:

Any State, any instrumentality of a State, and any officer or employee of a State or instrumentality of a State acting in his or her official capacity, shall not be immune, under the Eleventh Amendment of the Constitution of the United States or under any other doctrine of sovereign immunity, from suit in Federal court by any person, including any governmental or nongovernmental entity, for a violation of any of the exclusive rights of a copyright owner provided by sections 106 through 122, for importing copies of phonorecords in violation of section 602, or for any other violation under this title.

When Congress enacted the CRCA in 1990, it was focused on exercising its Article I power under the Copyright Clause. And for good reason. A year earlier, in Union Gas, the Supreme Court had held that Congress could abrogate state sovereign immunity by utilizing an enumerated power under Article I—there, the Commerce Clause. However, in 1996, the Supreme Court expressly overruled Union Gas in Seminole Tribe, holding that Congress could not abrogate sovereign immunity under Article I. That decision was later walked back somewhat in Katz, where the Supreme Court carved out an exception in 2006 for the Bankruptcy Clause.

Allen argued that, as in Katz, an exception to Seminole Tribe should also be made for the Copyright Clause. The Court in Katz reasoned that the states submitted to the supremacy of the federal Bankruptcy Clause at the Constitutional Convention. So too, argued Allen, with the Copyright Clause. But Justice Kagan, who penned the opinion of the Court on behalf of herself and six other Justices, rejected this argument as foreclosed by Florida Prepaid, where the Court had held in 1999 that neither the Patent Clause nor the Commerce Clause could be used to revoke state sovereign immunity for patent infringement liability. Ruling for Allen here would mean overruling Florida Prepaid, and the Court, citing stare decisis, was unready to make that move.

But not all hope was lost for Allen. Section 5 of the Fourteenth Amendment provides another path to revoking state sovereign immunity. Under Section 5, Congress may pass “appropriate legislation” to protect persons from a state deprivation of property without due process of law. A law is “appropriate,” Justice Kagan wrote, where there is “a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end.” Infringement by the states certainly does deprive copyright owners of a property interest, the Court noted, but only if that infringement is intentional or reckless. Negligent infringement does not count. Nor does it count if the state offers an adequate remedy for the deprivation.

In assessing the “congruence and proportionality” of the CRCA, the Court examined the record behind it to understand the nature and extent of the state copyright infringement that Congress intended to address. The timing of the CRCA’s enactment becomes critical here. Recall that Congress thought it was legislating under Article I, not Section 5 of the Fourteenth Amendment, so it did not create a record geared for a Section 5 analysis. Nor did it narrowly tailor the CRCA to reach only intentional or reckless deprivations that were not adequately remedied by the states. Justice Kagan pointed out these shortcomings to hold that Allen’s Section 5 argument failed since the record was too thin and the CRCA swept too far.

The Court heavily discounted the evidence that was in the record when Congress enacted the CRCA. Indeed, Congress asked then-Register of Copyrights Ralph Oman to prepare a report documenting the problem. The lengthy report was a year in the making, and it included comments and letters from numerous copyright owners complaining about copyright infringement by the states. There were hearings in both the Senate and House that generated hundreds of pages of testimony. And both the Senate and House issued reports explaining the need for the CRCA. While the district court below found that there was “sufficient evidence” to sustain the abrogation of state sovereign immunity under Section 5, the Supreme Court was unimpressed with the evidence in the record.

However, the Court did provide a roadmap for how Congress could develop a satisfactory record and craft a statute that would pass muster under Section 5 of the Fourteenth Amendment:

Congress likely did not appreciate the importance of linking the scope of its abrogation to the redress or prevention of unconstitutional injuries—and of creating a legislative record to back up that connection. But going forward, Congress will know those rules. And under them, if it detects violations of due process, then it may enact a proportionate response. That kind of tailored statute can effectively stop States from behaving as copyright pirates. Even while respecting constitutional limits, it can bring digital Blackbeards to justice.

Thus, Congress could draft a more narrowly focused law abrogating state sovereign immunity for intentional or reckless copyright infringement, and it would be upheld if the record shows that the extent of the harm is proportionate to the response and that there are inadequate remedies available in the states. Congress has already gathered some relevant evidence. For example, there is the General Accounting Office report on state sovereign immunity for infringement actions from 2001 and there is the Senate hearing on state sovereign immunity and protection of intellectual property from 2002. Both of those records were generated when Congress realized that Article I might not support the CRCA after the Supreme Court handed down Florida Prepaid, and they contain further evidence of copyright infringement by the states.

If Congress were to hold more hearings, it could start by receiving testimony from the people and organizations that filed amicus briefs in support of Allen with the Supreme Court in this very case. The amicus briefs from Recording Industry Association of America et al., American Society of Media Photographers et al., Software & Information Industry Association, Oracle America, Dow Jones, Copyright Alliance et al., David Nimmer et al., Ralph Oman, and others highlight widespread copyright infringement by the states. Hopefully, Congress will take the hint from the Court and pass another law abrogating state sovereign immunity for copyright infringement. Sadly, it would probably not be too difficult for Congress to create a robust record that could survive judicial scrutiny under Section 5 of the Fourteenth Amendment.

Tags Allen v. Cooper, copyright, copyright infringement, Florida Prepaid, Justice Kagan, Ralph Oman, Rick Allen, Seminole Tribe, state sovereign immunity

Publishers v. Audible: An Army of Red Herrings

Post author By Joshua Grove
Post date September 18, 2019

a gavel lying on a desk in front of books Audible has now filed its response to the publishers’ request for a preliminary injunction—twice. It filed the exact same brief to argue that it shouldn’t be preliminarily enjoined (Dkt. 34) and to argue that the complaint should be dismissed for failure to state a claim (Dkt. 41). Unfortunately for Audible, the repetition of fallacious arguments doesn’t make them true. You may have heard that a group of geese is a “gaggle” and that a group of crows is a “murder.” Groups of animals are often known by somewhat peculiar collective nouns. Perhaps less well-known is that a group of herrings—those foraging fish that favor shallow, temperate seas—is called an “army.” Audible’s response includes so many irrelevant distractions that it can accurately be described as an army of red herrings.

Audible argues that this should be a contract dispute, not a copyright case, and that Captions is nevertheless fair use—no matter who is doing the copying. Indeed, the one thing that Audible apparently wants to avoid discussing in detail is the one thing that I find interesting in this case, namely, who directly causes the various prima facie infringements of the publishers’ rights to occur. Audible’s response makes clear that it would rather jump straight to the fair use analysis without first analyzing exactly who is causing what to occur. But that fair use analysis only makes sense if we know who is doing the copying. The factors would be applied differently to Amazon, Audible, or its users, and Audible’s response elides such distinctions even though they are crucial.

In my last post about this case, I discussed how Audible was likely to cite cases such as Sony and Cablevision in arguing that it doesn’t make the copy, the user does, and that’s fair use. Remarkably, Audible does suggest that the user makes the copy, but it relegates this claim to the preliminary, factual background section of the brief—it’s not actually part of its main argument section. But this does give us some idea of what Audible will argue once it’s forced to clarify its theory of the case. Perhaps most interesting of all, Audible explains how the third-party Amazon Transcribe feature operates within Captions, and it’s less favorable to Audible than I had originally suggested.

Audible explicitly states that “a listener generates Audible Captions.” So that tells us who Audible thinks is doing the copying—and it’s not Audible. There are no citations to any case law, and there’s no explanation of why it’s the user doing the copying. Just the ipse dixit that it’s so. Audible then explains that the transcriptions are not, as I suggested in my last post, simply done in real time via Amazon Transcribe. That may be true in part, but the entire audiobook file is also sent to Amazon where it is converted into text and then sent back to the user. And that entire transcription is then stored on the user’s device, albeit in an encrypted file. Moreover, once one user requests a transcription, a cached copy of the file is then stored for 90 days on the server, and any subsequent user requesting a transcription of the same work in that time frame will get the cached copy—not a new transcription.

This business with the cached copy opens up another can of copyright worms, one that Audible presumably is not looking forward to discussing. Not only is there a full copy of the text on the user’s device, but there’s also another copy on the server. And there’s no doubt that both copies are fixed since there’s no argument that they exist for a mere transitory duration. Furthermore, the fact that the same source copy is being sent to different users destroys any claim under Cablevision that Audible might make that these are not public distributions. The Second Circuit there held that the transmissions weren’t public since there was a unique source copy that was used for each transmission to an individual user. While I don’t see how that holding survives Aereo, the cached copy here takes that argument off of the table.

Audible spills much ink arguing that Captions is not a replacement for the text of the underlying book since the experience with the same text of the transcription is different. For example, unlike an e-book, Captions displays at most 20 words at a time that is synchronized to the audio. And this “audio-first experience” has different punctuation, there are no page numbers, and the user can only scroll through the text by first scrolling through the audio. Of course, it’s true that there are differences between the user experience with Captions and an e-book, but these differences are irrelevant to the publishers’ prima facie copyright claims. Just because the user experiences the work differently doesn’t mean that there hasn’t been all sorts of actionable copying enabling that experience. These differences may be relevant to fair use, but not one of them matters for determining who is doing what.

After throwing its users under the bus by claiming that they make the copies with Captions, Audible sidesteps any actual analysis of that issue by arguing instead that the publishers failed to properly plead their copyright claims. The crux of Audible’s argument is that, since it has license agreements with the publishers to sell and produce audiobooks, the publishers have waived their right to sue for copyright infringement to the extent Audible’s conduct is licensed. Audible then argues that the burden is on the publishers to plead the licenses and conduct that exceeds their scope (or a violation of their conditions precedent) in order to state a copyright claim. And since the publishers didn’t plead any reason why the licenses wouldn’t permit Audible’s copying of the audiobooks, Audible argues that the case against it should be dismissed.

Audible correctly states the law, but not its application here. When the existence of a license is not in question, the copyright owner bears the burden of proving that the alleged infringer exceeded its scope or breached its condition. And Audible is certainly correct in arguing that it is a “licensed, paying user of the audiobooks from and for which it created Audible Captions.” Audible has licenses for the audiobooks, and the publishers didn’t plead them. The fallacy of this argument, however, is that the publishers’ copyright claims are not directed to those audiobook licenses—or even to those audiobooks. The publishers only claim infringement of the underlying works, that is, the literary works from which the sound recordings of the audiobooks are derived. Audible is probably violating various rights in the audiobooks as well, but the publishers have not brought those claims.

That the publishers are suing over the original books, and not the derivative audiobooks, is clear from the face of the complaint. The publishers charge Audible with “unlawfully creating derivative works of, reproducing, distributing, and publicly displaying unauthorized copies of the Works,” and the works identified are the registered, literary works of which the publishers are legal or beneficial owners. The complaint explicitly alleges that “Audible did not seek a license for the creation and provision of the transcriptions provided to consumers” and that “it has only been authorized to deliver the work in audiobook format.” If Audible turned an audiobook into a movie, the publishers would not have to plead that Audible thus exceeded the scope of its license for the simple reason that there was no such license to create the derivative movie in the first place.

The fact that the allegedly infringing transcriptions have as their source the licensed audiobooks doesn’t matter; what matters is that the transcriptions violate the publishers’ rights in the underlying literary works. For the bulk of audiobooks at issue that Audible didn’t create, i.e., the ones that were provided by the publishers or third parties, Audible had no license to create derivative works of any kind. And for the few audiobooks that Audible itself may have created under license—though Audible noticeably doesn’t claim to have a license to create derivatives of any of the specific works-in-suit—it only had a license to create the derivative sound recordings embodied in the audiobooks. Audible’s hand-waving about licenses is easily dismissed because, quite simply, there was never any license to create the derivative literary works over which it is being sued.

Despite the army of red herrings summoned to obfuscate its theory of exactly who is doing the copying in this case, the burden falls squarely on Audible to establish the existence of any license that may justify its actions. And the fact that Audible failed to mention any such license speaks volumes. Audible instead jumps straight to fair use, making the incredible claim that providing the text of the audiobook is somehow completely different than providing the text of the underlying book itself because the former allows users to “understand and engage with the audiobook they purchased.” I’ll leave the absurdity of Audible’s fair use argument for another day, but for now I’d like the court to sort out the preliminary issue of who is doing what. And that appears to be a conversation that Audible would rather not have.

Tags Aereo, Audible, Cablevison, copyright, copyright infringement, direct infringement, fair use, infringement, license, publishers, red herring, Sony

Publishers v. Audible: VCRs and DVRs to the Rescue?

Post author By Joshua Grove
Post date September 7, 2019

a remote pointed at a TV screen showing a sports game On August 23, a group of publishers, including Penguin Random House, HarperCollins, and Simon & Schuster, sued Audible for copyright infringement. Audible, which is a subsidiary of Amazon, sells and produces audiobooks, and it planned to launch a new speech-to-text feature on September 10. The feature, dubbed Audible Captions, would automatically convert the licensed audio of an audiobook into unlicensed text that appears on the user’s screen as the audiobook is played. In a video posted to YouTube on August 2, Audible mentions that Captions is powered by Amazon Transcribe, which appears to provide real-time transcriptions by sending audio to Amazon’s servers where it is converted to text and then sent back to the user.

The publishers allege that, through its Captions feature, Audible infringes their reproduction, adaptation, public distribution, and public display rights, either directly or indirectly, and they’ve moved for a preliminary injunction. The crux of their argument as to direct liability is that Audible—and not the user—directly causes the various infringements to occur. The publishers don’t specifically mention the role of Amazon or its Transcribe feature in their arguments, though they do note that “Audible has further arranged for software programs and servers” to create the unlicensed text. But it seems quite likely that Audible will use distinctions over exactly who is doing what—the user, Audible, or Amazon—to argue that its role in the copying is too remote to make it a direct infringer.

Audible has agreed to forgo enabling Captions for the publishers’ works until the court rules on the preliminary injunction motion, and its response is due this coming Friday, September 13. Other than the hint that it will likely argue fair use since it believes that the Captions feature will “help kids,” Audible has not tipped its hand as to what it will argue on the merits of the publishers’ prima facie infringement case. But, given the law in the Second Circuit where the publishers have filed suit, we can certainly guess what it will argue.

In a recent article at Ars Technica, Timothy B. Lee suggests that Audible is likely to rely on two seminal copyright cases in its defense: Sony v. Universal and Cartoon Network v. CSC Holdings (aka Cablevision). Lee points out the role of Amazon’s cloud-based Transcribe service in Audible’s automated captioning process, and he contends that it “strengthens the company’s argument that it can do this without a license from publishers.” With Sony, Lee references the Supreme Court’s holding that unauthorized time-shifting can be fair use, and he further notes that, while cases like this can be unpredictable, the courts might decide that automated speech-to-text conversion is likewise fair use.

Of course, there are significant differences between the time-shifting in Sony and the transcription that occurs with Captions. Sony time-shifting created a copy of an audiovisual work without changing its work-of-authorship category, and both the original broadcast and the copy made with the VCR were audiovisual works. With Captions, by contrast, the audiobook, which is a sound recording, gets transformed into a literary work. This isn’t merely creating a copy of a work to watch later; it’s creating an entirely different—though derivative—work. And, of course, in making this derivative work, a reproduction also occurs since the two works are substantially similar. But Captions nevertheless is an entirely different beast than time-shifting, or even space-shifting for that matter, since it in fact creates a new—and separate—work of authorship.

Moreover, the analysis in Sony turned on copying by the user, not Sony itself, and thus the fair use factors were applied differently than they would be here with the publishers’ direct liability claims. Most notably, the first and fourth factors here heavily favor the publishers since Audible’s for-profit use isn’t transformative and causes harm to an established market. Indeed, Audible itself currently offers Immersion Reading, where licensed audiobooks are combined with licensed e-books, allowing the user to follow along with the text while listening to the audio. Importantly, the user must purchase both the audiobook and the e-book to use this functionality in the Audible App.

Turning to Cablevision, Lee argues that “Audible’s case will likely be strengthened by the fact that its app never creates or saves a permanent, full transcript of an audiobook” since “the software only displays a few words on the screen at a time.” To be sure, the buffer copies at issue in Cablevision, which existed for at most 1.2 seconds before being automatically overwritten, were held to be unfixed and thus not copies that could give rise to infringement liability. But Lee misconstrues the import of this holding: There was no doubt that a work could be copied by chopping it up into little pieces at a time; the question was whether those pieces existed for more than a transitory duration. Unlike the buffer copies at issue there, the copies here are clearly fixed since the user can pause the text in Captions and keep it on the screen indefinitely.

Lee notes Cablevison’s holding that it was the user, and not Cablevision itself, that caused a copy to be made with the cloud-based DVR. And he posits that Audible will argue that it thus has the right to distribute “software tools that allow customers to do speech-to-text conversion.” I agree, and I think Audible is very likely to argue that it doesn’t make the copy, the user does, and that’s fair use. But I disagree with Lee’s further claim that, if the transcription actually takes place on Amazon’s servers, the “publishers are likely to argue this means Amazon—not users—are creating the transcripts.” If the publishers thought that Amazon was making the copies, Amazon would have been named as a defendant. It wasn’t—and for good reason.

As I understand the facts, I don’t think it’s likely that Amazon would be directly liable for the copying that takes place with its Transcribe feature. That system is fully automated, and Amazon plays no role in selecting or supplying the content that gets converted. The same, however, is not true for Audible. The publishers claim that Audible is a direct infringer since it selects which specific audiobooks have the Captions feature enabled and integrates the functionality for making the unauthorized transcriptions within its Audible App. To analyze this claim, we must determine whether Audible’s actions are sufficiently proximate such that Audible itself can be said to be doing the copying, and for that we need to look no further than the Cablevision opinion itself.

Cablevision turned on whether the remote-storage DVR (RS-DVR) was more analogous to a VCR or a video-on-demand (VOD) service. With a VCR, the user who pressed the record button supplied the necessary volition to be held liable as a direct infringer—not the company that manufactured and sold the VCR, which had no control over the content that was recorded. With VOD, by contrast, the user still pressed the button to initiate the streaming, but the service provider was the one that could be held directly liable since it selected and supplied the works that were available on its service. Cablevision’s cloud-based DVR fell somewhere in between, and the Second Circuit held that it was more like a VCR since Cablevision did not control the specific content that its users could record and stream:

Cablevision, we note, also has subscribers who use home VCRs or DVRs (like TiVo), and has significant control over the content recorded by these customers. But this control is limited to the channels of programming available to a customer and not to the programs themselves. Cablevision has no control over what programs are made available on individual channels or when those programs will air, if at all. In this respect, Cablevision possesses far less control over recordable content than it does in the VOD context, where it actively selects and makes available beforehand the individual programs available for viewing. For these reasons, we are not inclined to say that Cablevision, rather than the user, “does” the copying produced by the RS–DVR system.

Lee mentions that the “courts could decide that Amazon plays too active a role in the conversion process to portray itself as a passive supplier of technology like the maker of a VCR.” I think this is very likely, but only as to Audible, not Amazon. As noted above, Amazon Transcribe is a passive system; it will transcribe any audio that it receives. Captions, on the other hand, only transcribes the specific works that Audible has decided ex ante to include. The user can’t transcribe every sound recording on a device or even every audiobook within the Audible App. Audible instead chooses the specific works within its App that the user is allowed to convert into a derivative, literary work. And it’s this selection of the specific content that makes Audible more like a VOD service than a VCR or DVR.

The Supreme Court opinions in ABC v. Aereo—both the majority opinion by Justice Breyer and the dissent by Justice Scalia—buttress this conclusion. Like Cablevision, Aereo supplied a cloud-based DVR, though the content available on Aereo’s service depended on what was publicly available via over-the-air transmissions. The Aereo majority held that it was Aereo, and not the user, that caused the transmission to occur when the user pressed a button to initiate the streaming, and this was true even though Aereo had no control over the specific content that was made available to the user. The Court held that Aereo’s role in the copying—by setting up in-house antennas, transcoders, and servers that would retransmit television broadcasts to the public—was sufficiently proximate to render it the direct infringer.

In dissent, Justice Scalia took a far more limited view of the volition necessary to hold a service provider directly liable. Relying on Cablevision, Justice Scalia argued that direct liability “demands conduct directed to the plaintiff’s copyrighted material,” and since Aereo did not select the specific content to be streamed, he would have held that it could not be directly liable. Indeed, he argued that a VOD service could be directly liable precisely because the “selection and arrangement by the service provider constitutes a volitional act directed to specific copyrighted works and thus serves as a basis for direct liability.” In his estimation, “Aereo does not ‘perform’ for the sole and simple reason that it does not make the choice of content.”

Thus, even under Justice Scalia’s narrow view of direct liability, Audible can quite reasonably be said to have crossed the line from being a passive conduit to an active participant in the copying because Audible itself selects the specific works that can be transcribed with its Captions feature. Once Audible files its response brief this coming Friday, I hope to then take a deeper dive into these fascinating issues. And perhaps then I’ll discuss the secondary liability issues that I ignored in this post. But for now I’ll conclude by saying that, by making its Captions feature available only for the specific works that it selects, Audible will have an uphill battle in arguing that it’s more like a VCR or DVR than a VOD service.

Tags adaptation, Aereo, Amazon, Audible, Cablevision, copyright, copyright infringement, direct liability, DVR, indirect liability, infringement, public performance, publishers, reproduction, streaming, VCR, VOD

Stream Ripping Emerges as the New Face of Music Piracy

Post author By Joshua Grove
Post date September 5, 2017

Cross-posted from the Mister Copyright blog.

chrome 3D copyright symbol As formats change and advances in technology continue to transform the way we listen to music, new methods of pirating content are never far behind. What started with the analog dubbing and bootlegging of cassettes forty years ago evolved with the digital age into CD burning and MP3 sharing, eventually leading to a chaotic illegal downloading landscape at the turn of the century that would force the music industry to develop novel anti-piracy efforts and distribution models. Digital streaming services have since taken over as the preferred way to consume music, boasting over 100 million subscribers in 2016—a number that recently surpassed the total number of Netflix streaming video subscribers.

A Fast Growing Threat

Despite this substantial base of paying customers and affordable monthly subscription rates, many are choosing to bypass legitimate services by “ripping” songs from streaming platforms, which involves recording, converting, and saving songs to downloadable file. It sounds complicated, but the internet is teeming with free apps and programs that make the ripping process easy, and its popularity has prompted some in the industry to flag it the fastest growing form of music piracy.

Stream ripping has existed for about ten years, with the digital performance rights organization Sound Exchange recognizing its dangers in 2007. But, as a Billboard magazine article from the same year noted, “even the music industry concedes that the impact of stream ripping is minimal.” The article goes on to explain the inefficient nature of ripping software and the inability of users to search internet radio services—which were at the time were not yet on-demand—for their desired content. It was similar to listening to terrestrial radio with a blank cassette tape ready and waiting for the song you want to be played in order to record it. Needless to say, times have changed and now on-demand streaming services and advanced stream recording technology have made ripping a very real threat to copyright holders and creators.

A survey by the International Federation of the Phonographic Industry (IFPI) found that three in ten internet users had engaged in stream ripping over a six-month period in 2016. A similar 2016 study by MUSO, a leading content protection and piracy data specialist, measured a 60% increase in visits to stream ripping sites in one year from 2015 to 2016. This growing popularity is made more troubling by the fact that a predominantly younger audience is involved, with the IFPI survey finding that 49% of internet users between the ages of 16 and 24 regularly engage in stream ripping to acquire music. Though these numbers are already concerning, a forthcoming IFPI report is expected to show increases in stream ripping activity across the board.

Like most websites and programs that enable copyright infringement, ripping services make money from advertising based on the high levels of traffic they attract. And, nearly a year ago, a report from the RIAA estimated that traffic to the top 30 stream ripping sites topped 900 million in one month alone. It’s difficult to imagine that, in a year that has seen little progress in shutting down these ripping services, this number of monthly visitors wouldn’t have increased significantly. Making matters worse for artists and rights owners, unlike the illegal copies of songs or albums that permeate file sharing sights which can be identified and tagged to aid with takedown notices, these ripped versions are copied directly from the source, rendering them untraceable.

While different stream-ripping programs can record data from any number of streaming services, many developers have focused their attention on YouTube, where infringing content is rampant. Because YouTube is free and full of both licensed music videos and user generated content that often features unauthorized, full versions of copyrighted songs, it’s become an attractive destination for those who want to rip music but don’t want to pay to join a streaming service like Spotify or Apple Music.

YouTube-mp3.org

In 2016, a group of major record labels sued the operators of a stream ripping service based in Germany whose program was directed to the “rapid and seamless” copying of sound recordings from YouTube. YouTube-mp3.org is one of the most popular stream ripping tools available online, with 303.8 million visitors to its website in 2016 (making it the 141st most visited website globally). Users are attracted to its service not only because it’s free and doesn’t require an account, but because it’s incredibly easy to use. One simply pastes the YouTube URL in a search box and clicks a button that automatically converts the video’s audio track to an MP3 that can be stored on any number of devices.

According to the complaint, YouTube-mp3.org is guilty of direct, contributory, and vicarious copyright infringement, as well as inducement based on their blatant promotion of the stream ripping of copyright protected songs. Describing the nature of stream ripping in general, and YouTube-mp3.org specifically, the complaint warns:

“The scale of stream ripping, and the corresponding impact on music industry revenues, is enormous. Plaintiffs are informed and believe, and on that basis allege, that tens, or even hundreds, of millions of tracks are illegally copied and distributed by stream ripping services each month. And YTMP3, as created and operated by Defendants, is the chief offender, accounting for upwards of 40% of all unlawful stream ripping that takes place in the world.”

The complaint also alleges that YouTube-mp3.org circumvents technological protection measures (TPMs) that YouTube has implemented to prevent the very copying the program facilitates, thereby violating Section 1201(a) of the Copyright Act. Discussing the circumvention, the complaint explains:

“More specifically, Defendants’ service descrambles a scrambled work, decrypts an encrypted work, or otherwise avoids, bypasses, removes, deactivates, or impairs a technological measure without the authority of Plaintiffs or YouTube.”

The complaint looks to enjoin not only YouTube-mp3.org, but also all third parties—including web-hosting services and domain name registries—through which the Defendants infringe copyrights. As of the time of this post, the lawsuit had been stalled due to difficulties in serving the international defendants, but stake holders on all sides will continue to monitor the case closely.*

The Future of Music Piracy

According to the IFPI survey, stream ripping’s rapid growth has seen it bypass pirate site downloading and other forms of streaming as the most popular way to steal music. One reason for the shift to ripping may be the increasingly focused offensive against established torrent sites like the Pirate Bay and Kickass Torrents. But also contributing to the rise of ripping is the compatibility of the programs with mobile devices, which MUSO explains “is a key insight into the longer-term stream ripping trend.” The study identifies Brazil, Mexico, and Turkey as countries where mobile stream ripping is the most prevalent and connects this popularity to the quickly expanding smartphone markets. These accessible mobile interfaces provide a younger audience not only with the portability they want, but also with the ability to listen to music offline, which can be essential in countries with limited internet infrastructure.

Like the file sharing programs and torrent sites that came before it, stream ripping technology is not inherently illegal. But, like Grokster and IsoHunt, many of the most popular ripping services—which display prominently in Google search results for “stream ripping software”—were developed to facilitate piracy and are actively inducing copyright infringement. Also like these now defunct websites, YouTube-mp3.org tries to make the argument that it’s merely an intermediary and immune from liability based on 512(c) safe harbor provisions of the DMCA. On its website, YouTube-mp3.org claims that, “[d]ifferent from other services, the whole conversion process will be performed by our infrastructure and you only have to download the audio file from our servers.” By hosting the content on its own servers at the direction of a user, YouTube-mp3.org attempts to cast itself as a passive intermediary, and exposing it as a piracy-inducing bad actor is imperative to deter the development and promotion of similar services dedicated to copyright infringement.

With the music industry’s widespread commitment to the streaming model, ripping is a threat to legitimate services that must be confronted by both the creative industries and the platforms that distribute music. Thankfully, platforms like Soundcloud, Spotify, and YouTube have a stake in the fight against ripping, as they ultimately want users to watch videos and listen to music over and over on their websites where they are subject to advertisements, rather than steal content and leave. Whereas tech companies and platforms may not have had as much to lose when it came to file sharing and illegal downloading, stream ripping stands to affect not only rights owners, but also the tech industry that is increasingly involved in the creation and distribution of copyrighted content.

*On September 4, 2017, it was reported that the RIAA and Youtube-mp3.org had reached a settlement in which Youtube-mp3.org would shut down indefinitely, hand over its domain, and pay an undisclosed amount to the RIAA.

Tags copyright, copyright infringement, Google, stream ripping, YouTube

Mayweather v. McGregor Warrants Preemptive Anti-Piracy Efforts

Post author By Joshua Grove
Post date August 23, 2017

hand holding remote pointed towards a TV screen showing a sports game This Saturday, the world will be treated to one of the most hyped events in the history of sports when “The Notorious” Conor McGregor and Floyd “Money” Mayweather Jr. meet in Las Vegas to become (even more) rich while ostensibly also participating in a boxing match. The bout marks the first foray into boxing by a champion mixed martial artist—McGregor—at the height of his career, and is made even more compelling by the fact that he’ll be facing one of the greatest boxers of all time in Mayweather Jr.—albeit somewhat past his prime. The seemingly endless prefight activities have included an over-the-top press tour full of provocative trash talk, celebrity-attended training sessions, and a preventative effort by Showtime—the network airing the fight—to quash the inevitable flood of unauthorized streams that will pop up during what is predicted to be the most pirated event ever.

Last week, in response to concerns over lost revenue resulting from illegal feeds of a fight that is expected to take in close to a billion dollars, Showtime brought a preliminary injunction against over 40 websites affiliated with LiveStreamHDQ—a recurrent bad actor in unauthorized streaming—poised to broadcast illicit streams. In its complaint, the premium network targeted sites with blatant domain names such as mayweathervmcgregor.livestreamhdq.com and floydmayweathervconormcgregorfight.us, which Showtime alleges are engaged in “keyword stuffing” in an attempt to appear at the top of search engine results and draw as much traffic as possible to unauthorized streams. After review, District Judge Andre Birotte Jr. approved the injunction, prohibiting the websites from offering infringing content, and since then, it appears that at least some of the sites have backed away from their shameless promotion of free streams.

Preemptive strikes against anticipated copyright infringement are somewhat of a rarity, but they can be imperative when dealing with a short-lived yet furious demand for a marquee, live sporting event—especially one with a pay-per-view (PPV) price tag of nearly $100. In 2015, Showtime and HBO launched a “pre-piracy” offensive against two websites that had announced plans to stream the much-anticipated Mayweather v. Pacquiao boxing match. And while the threat of a lawsuit was successful in deterring the targeted websites, the fight was still subject to massive piracy through mobile live video streaming apps such as Periscope and Meerkat.

Despite their limited success, these proactive attempts to curb expected infringement have led some critics to accuse networks of censoring and site-blocking any website they choose for a theoretical crime that hasn’t yet occurred. But, as many of the same critics acknowledge, a clear provision in US copyright law allows for an infringement action before fixation takes place “[i]n the case of a work consisting of sounds, images, or both, the first fixation of which is made simultaneously with its transmission.” It’s an important distinction that represents lawmakers’ understanding of the unique concerns surrounding a live broadcast that loses most of its value immediately after its initial airing.

Section 411(c) of the Copyright Act provides that a copyright owner may bring an infringement action related to an unregistered work, and recover statutory damages for an unauthorized use, when the work is part of a live broadcast. Known as the “live broadcast exemption,” the Committee on the Judiciary explained that it “is intended to deal with the special situation presented by works that are being transmitted ‘live’ at the same time they are being fixed in tangible form for the first time,” such as “sporting events, concerts, theatrical presentations and news and public affairs programs.” The section goes on to list two requirements for obtaining statutory damages, including service of an “Advance Notice of Potential Infringement” at least 48 hours before the work is transmitted, and registration of the work within three months after its first transmission.

While it’s encouraging that Showtime’s injunction has already resulted in some of the targeted websites shutting down or offering links to legal viewing options, it’s likely that live-streaming apps will once again draw thousands of would-be paying customers towards unauthorized streams. Unfortunately, because of the massive paydays coming to McGregor and Mayweather, many who seek out illicit streams will justify the infringement by figuring it won’t hurt to take a few dollars out of their deep pockets. But as a recent article on MMA and boxing-related piracy points out, illegal feeds take money away from far less affluent athletes and from the organizations that make their careers possible.

Identifying and shutting down live streams that will inevitably appear (and reappear) via the likes of Periscope and Facebook Live is an uphill battle. Whereas Showtime’s injunction can address known infringing-enabling services and the websites they facilitate in the days and weeks leading up to the event, when the fight bell rings, it becomes impossible for the network and its affiliates to effectively play whack-a-mole with the surge of unauthorized streams.

As Ultimate Fighting Championship (UFC) CEO Lorenzo J. Fertitta explained in his testimony before the House Judiciary Committee nearly a decade ago, the content offered during PPV events is not only extremely valuable, but extremely perishable. Section 411(c) exists because once a popular event is over, the value is gone, and rights owners must have a way to combat potentially devastating infringement.

But Section 411 was enacted at a time when the current landscape of live-streaming app piracy (and the internet for that matter), could not have been anticipated. It’s a problem that requires attention not only from the rights holders and networks airing the events, but from the social media platforms that host the applications. Perhaps a Content ID system that would recognize and kill unauthorized streams of big ticket/PPV events is in order. But don’t expect the platforms to jump at the opportunity to implement such anti-piracy mechanisms, as they and their supporters are quick to label them ineffective and unconstitutional. Unfortunately, until a better system is put in place to supplement Section 411, every preeminent PPV fight will be predicted to be the most pirated event ever.

Tags copyright, copyright infringement, Judge Birotte, live broadcast exemption, live-stream, Mayweather, McGregor, pay-per-view, Section 411

Alliance for Creativity and Entertainment (ACE) Unites to Fight Online Piracy

Post author By Joshua Grove
Post date June 14, 2017

As digital piracy shifts away from torrent downloads and towards unauthorized streaming and theft-based extortion, stakeholders from all parts of the creativity community are reassessing their efforts to fight online infringement. This week, a global coalition of creators and leading on-demand entertainment services joined forces to better address the ever-evolving threat that piracy poses not only to artists and copyright owners, but to consumers and end users. Named the Alliance for Creativity and Entertainment (or ACE), the group brings together 30 industry leaders—including Amazon, HBO, Warner Bros., Netflix, Disney, Hulu, and the BBC—to maximize consumer experience while ensuring the vibrant creative ecosystem they support is not undermined by piracy.

In an opening press release, the Alliance describes the recent exponential growth of digital distribution models and the development of nearly 500 online services that provide consumers with a legitimate on demand viewing experience. And while these platforms have revolutionized the way consumers watch TV and movies, they’ve also added great value to a creative sector that is responsible for $1.2 trillion and 5.5 million jobs in the US alone.

Unfortunately, illicit websites—which sometimes offer pirated works within hours of release—remain a burden to the creative ecosystem and the artists and platforms that drive it. Despite encouraging efforts both in the US and abroad to disable some of the worst offenders, the constant game of cat and mouse with mirroring websites and the emergence of illicit streaming sites continue to frustrate the fight against piracy. According to the press release, in 2016 there were an estimated 5.4 billion downloads of pirated films and television shows and 21.4 billion total visits to illicit streaming websites that profit from the theft and unauthorized distribution of creative works.

To combat these enduring acts of infringement, ACE brings together creative companies from all over the world to combine resources and work in concert with seasoned antipiracy experts at organizations such as the Motion Picture Association of America (MPAA). Specifically, “ACE will conduct research, work closely with law enforcement to curtail illegal pirate enterprises, file civil litigation, forge cooperative relationships with existing national content protection organizations, and pursue voluntary agreements with responsible parties across the internet ecosystem.”

By reducing illegal online piracy, ACE will also work to eliminate the risks to consumers that so often accompany the illegitimate distribution of creative works. A recent study by the Digital Citizens Alliance found that one in three pirate sites expose users to infectious malware and that visitors to these pirate sites are 28 times more likely to encounter malware than visitors to legitimate websites. The serious threats posed to consumers by malware and viruses include not only identity theft and financial loss, but the complete immobilization of entire computer systems, as seen in the recent Wannacry attack.

With pirate site operators finding new ways to profit from the theft and distribution of creative works, it’s encouraging to see a unified and global effort dedicated to reducing piracy, supporting creators, and protecting consumers.

Tags copyright, copyright infringement, intellectual property, Kevin Madigan

Kodi Software Enabling Widespread Copyright Infringement

Post author By Joshua Grove
Post date March 15, 2017

hand holding remote pointing at television showing a sports game Awards season always seems to arrive with new stories about how piracy is affecting the film industry and the way we watch movies. Whether it’s a promotional screener that was stolen and uploaded to a torrent site, or the latest software that allows users to download or stream pirated content, the tales are reminders of the enduring problem of online copyright infringement.

This year, when talking to people (outside of the copyright law world) about whether they’d seen certain Oscar-nominated films, the same name kept coming up: Kodi. Specifically, users described downloading the Kodi app to an internet connected device, then adding “plug-ins” or “add-ons” that deliver an extensive library of streaming TV shows and movies, including Moonlight, La La Land, and other Best Picture nominees. Though Kodi’s controversial popularity in the UK has been well-chronicled of late, the software is now becoming the preferred way to stream pirated content in the US, and it’s particularly discouraging because while Kodi is not in itself an illegal service, it is blurring the lines of accountability and contributing to massive IP theft.

Billing its product as “open source home theater software,” Kodi is a free media player application that allows users to view streaming media, such as videos, music, podcasts, and videos from the internet on a variety of platforms. Its open source, cross-platform nature enables interaction with third-party devices designed to facilitate infringement by including add-ons that deliver pirated content. Sales of pre-programmed “Kodi boxes” have become widespread in the UK, mostly because of their incorporation of the illicit add-ons. Kodi box popularity is catching the attention of rights holders and broadcasters such as the BBC, Sky, and the Premier League, and the UK’s Intellectual Property Office (IPO) just announced an investigation into the boxes.

The group behind Kodi recently acknowledged its connection to piracy, and pledged a renewed effort to distance itself from copyright infringement by going after unauthorized uses of its “Kodi” trademark. Unfortunately, they made the same promise in 2014, and Kodi-related piracy has grown exponentially. It’s also interesting that Kodi is threatening to enforce its own IP rights in an attempt to get people to stop “dragging our name through the muck,” while they simultaneously disregard the rights of the countless creators and copyright owners whose works their software helps pirate. In the same announcement warning of the plan to curb unauthorized use of its trademark, Kodi Product Manager Nathan Betzen displays a lack of concern for other victims of infringement.

“Team Kodi maintains an officially neutral stance on what users do with their own software. Kodi is open source software, and as long as the GPL [General Public License] is followed, you are welcome to do with it as you like.”

In the United Kingdom, a concerted effort was just announced to go after the source and target the servers feeding the illicit streams to the Kodi add-ons. Initially obtained by the English Premier League—the top-tier football (or soccer) organization in the UK—a High Court injunction will allow the League to compel the largest ISPs in the country to block the actual source of pirated streams, rather than engage in website whack-a-mole. The strategy involves going “up the content tree” to attack the servers where the streams originate, and for the moment, it seems that the ISPs are willing to cooperate.

In the US, in lieu of acquiring pre-programmed Kodi boxes, users are downloading the Kodi software directly to laptop computers, Amazon Fire Sticks, or smart TVs, and adding the illicit add-ons themselves. It makes going after Kodi for infringement difficult because its product is essentially a media player and is not actually distributing or making copies of the movies and TV shows it streams. Like the VCR thirty years before it, Kodi is capable of non-infringing uses and is likely to claim that it has no control over the bad actors using their product to infringe.

But liability for copyright infringement can extend to those who facilitate theft under the theory of secondary liability, which includes both vicarious and contributory liability. Just last year, in BMG v. Cox, a federal judge upheld a $25 million penalty against ISP giant Cox Communications for contributory and willful copyright infringement. Despite arguing that its Internet service is just like the VCR in Sony v. Universal, and therefore should not be liable for infringing acts of its customers, Cox was found to have made a material contribution to the infringement simply by providing the means—also referred to as the “site and facilities”—for a user to infringe, and to have had knowledge of repeated instances of infringement. This combination of material contribution and knowledge satisfies the test for contributory infringement, and the District Court’s finding represents a clear assignment of accountability to those that turn a blind eye to piracy.

While Cox’s failure to act in the face of blatant, repeated infringement may represent a more egregious example of contributory infringement, one could argue that Kodi is similarly exposing itself to secondary liability. By providing software that facilitates extensive piracy, Kodi surely makes a material contribution to infringement, and the Kodi group is well aware that its product “has grown to become one of the most-used pieces of software through which people can stream, download and otherwise obtain copyright infringing content.”

Though Kodi is different than Cox’s Internet service in that once the software is downloaded, its decentralized architecture means Kodi has no ability to monitor or control what it’s used for, the Supreme Court has made clear in MGM v. Grokster that the decentralized nature of software is not enough to escape contributory liability. If Kodi’s primary use can be shown to be streaming infringing content, it could face the same fate as some other illicit streaming services such as Popcorn Time. Those behind Kodi know that contributory liability for open-source software is somewhat of a gray area of copyright law that allows their product to exist, but as the Kodi name becomes more and more synonymous with piracy, it may become harder to avoid accountability.

Tags copyright, copyright infringement, intellectual property, Kevin Madigan, Supreme Court

Trusted Notifier Program Defended Against Misleading Rhetoric

Post author By Joshua Grove
Post date March 2, 2017

One year ago, domain name registry Donuts, Inc. and the Motion Picture Association of America (MPAA) entered into an agreement termed the Trusted Notifier Program in a joint effort to combat piracy. The voluntary initiative “introduced a new way to work towards mitigation of clear and pervasive cases of copyright infringement,” and according to Donuts’ one-year summary, has been a success for “rights owners, registrants and the public at large.”

While the program and similar voluntary agreements are not without their detractors, it’s important to separate good-faith criticism from misleading rhetoric. In an article posted this week, tech pioneer and Internet security expert Paul Vixie responds to a recent paper criticizing the Internet Corporation for Assigned Names and Numbers (ICANN), trade associations, and standards organizations for implementing a “privately ordered online content regulation.”

The rebuttal deconstructs University of Idaho Law Professor Annmarie Bridy’s paper piece by piece, exposing many of the claims as unsubstantiated or misleading. Among other things, Mr. Vixie’s article provides the following evaluations:

No evidence is offered in support of the claim that the sole or primary purpose of voluntary efforts such as the Trusted Notifier Program has been to develop a “large-scale program of privately ordered online content regulation.”
Claims that “less sophisticated and economically powerful” ICANN stakeholders take a backseat to rights-holder organization influence have been demonstrated to be false by the existence of new generic top-level domain (gTLD) programs.
No evidence is offered in support of the claim that copyright owners “appear to be laying the groundwork for a broad program of DNS-based enforcement, with the long-term goal of implementing a UDRP-like procedure for claims of piracy and counterfeiting that are wholly unrelated to any bad-faith or confusing use of domain names.”
The unregulated nature of the Internet has acted as a “stay out of jail free” card for millions of criminals, and some redress and balance is both inevitable and necessary.

In conclusion, Vixie notes that the Trusted Notifier Program represents the engagement of Internet industry stakeholders with rights-holder communities to create efficient takedown-related activities, which is exactly what the Internet technical community told rights holders they should pursue instead of SOPA. The article advises that “asking interested parties not to cooperate on matters of their aligned interest will never be effective. Notice and takedown, at scale, without borders, requires mutual cooperation. And that’s what the Trusted Notifier Program is meant to effect.”

March 27, 2017, update: Bridy’s response to Vixie’s post can be read here.

Tags copyright, copyright infringement, intellectual property, Kevin Madigan, notice and takedown

What Would Judge Gorsuch Mean for Fair Use?

Post author By Joshua Grove
Post date February 23, 2017

U.S. Supreme Court building On February 1^st, President Trump nominated Neil Gorsuch to fill the Supreme Court seat left vacant by the passing of Justice Antonin Scalia. The announcement opened the floodgates of prognostication as to how the appellate court judge from Colorado might sway the Court in the coming terms, with forecasters pouring over his past decisions in an attempt to get into the head of the potentially game-changing jurist. And while Gorsuch’s views on intellectual property remain largely unknown, a closer look at his track record provides some insight into his understanding of copyright law that should leave creators and copyright owners optimistic.

In the forty years since the Copyright Act was enacted, courts have expanded the “transformative” fair use doctrine to encompass a variety of uses whose original expressive contribution is difficult, if not impossible, to separate from the underlying work. In particular, courts have applied fair use to cases where the purported fair user merely transforms the purpose of an underlying work, without transforming the underlying work itself and without contributing any original artistic expression. This is a discouraging trend that disregards copyright’s promotion of creativity by encouraging the addition of new expression to old. Fortunately, this trend could be offset by lawmakers and judges with an understanding of the originality requirements of copyright law.

As a federal judge for the U.S. Court of Appeals for the Tenth Circuit, Gorsuch oversaw 14 cases concerning various forms of IP, four of which involved copyright claims. Despite finding for the accused infringer in all four copyright cases, one of those decisions stands out and reveals an appreciation for the originality and new expression required of copyright–a requirement often ignored by proponents of ever-expanding notions of fair and transformative use.

In the 2008 case Meshwerks v. Toyota, the plaintiff brought a copyright infringement claim against Toyota for the unauthorized use of digital automotive models in a television commercial. The works in question were computerized two-dimensional models created by Meshwerks and based on existing Toyota vehicle designs. Though the parties had originally contracted for the designs to be used on Toyota’s website, Toyota began running TV ads featuring the designs, and Meshwerks brought an infringement claim based on the unauthorized use.

The District Court in Utah granted summary judgment in favor of Toyota, finding that Meshwerks’ designs were not sufficiently original to qualify for copyright protection. Meshwerks then appealed to the U.S. Court of Appeals for the Tenth Circuit in Colorado, where Gorsuch had served since his confirmation in 2006.

Approaching the question of originality central to the case, Gorsuch agreed with the district court that the Meshwerks models contributed no new expression to Toyota’s preexisting designs and therefore were not eligible for copyright protection. In the opinion, Gorsuch refers to the “sine qua non of copyright” that requires at least a degree of originality in protectable works of authorship so that copyright will “reward[ ] (and thus encourag[e]) those who contribute something new to society.” The decision goes on to address Meshwerks’ depiction of Toyota’s three-dimensional physical objects in a two-dimensional digital medium, asserting that the “putative creator who merely shifts the medium in which another’s creation is expressed has not necessarily added anything beyond the expression contained in the original.”

Though Meshwerks didn’t involve fair use claims, Gorsuch’s focus on the lack of original expression in simply shifting mediums reflects the Supreme Court’s articulation of transformative fair use in Campbell v. Acuff Rose, a case that he experienced first hand as a law clerk for Justice Anthony Kennedy. Campbell involved the unauthorized parody of a popular Roy Orbison song, and in its fair use deliberation the Court focused intently on “whether the new work merely supersedes the objects of the original creation . . . or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is ‘transformative.’” (emphasis added). The Court found that if the new work sufficiently transforms the original through the additional of new expression, it may qualify as fair use.

But the idea of what qualifies as “transformative” has come to include works of transformative purpose, which often are little more than extensive, for-profit acts of wholesale copying of entire works that merely offer the underlying works in a new context. The transformative purpose theory has been applied to the mass scanning and digitization of copyrighted materials for projects such as Google Books, where the creation of a searchable database is considered transformative, despite the fact that the underlying works were not transformed in any original or expressive way. This change in context is effectively the same as the shifts in medium denounced in Meshwerks, and Gorsuch’s ideas about the need for new and original expression not only echo the Supreme Court’s interpretation in Campbell, but also reflect an understanding of the core principle of originality in copyright law.

As the digital age enables copying at the click of a mouse, it’s important to recognize the limits of fair use and realize that while an argument could be made that some of these recent acts of copying are transformative, others are dangerously close to the mere shifts in medium Gorsuch warned against in Meshwerks. Some instances of format-shifting that have been found to be fair use—such as converting full-size images to thumbnails in a search engine—provide an example of unauthorized uses that could benefit from a Gorsuch-style analysis of originality. While few would argue that the owner of a legitimate copy of an album or movie shouldn’t be able to transfer the work to different devices, allowing for a broad fair use application to format-shifting creates a slippery slope for shifts in medium that add no original expression.

Fortunately, despite pressure from groups who would like to see an expansion of fair use that would effectively annihilate copyright law, the Copyright Office recently refused to adopt an exemption that would have allowed broad, noncommercial format-shifting of motion pictures distributed on DVDs, Blu-ray discs, and downloaded files. The Office’s final rule found that proponents of the exemption “failed to establish a legal or factual record sufficient to establish that the space- or formatshifting of audiovisual works, e-books, and other copyrighted works constitutes a noninfringing use,” and that “fair use, as it stands today, does not sanction broad-based space-shifting or formatshifting.” Notwithstanding its refusal to grant the exemption, the Copyright Office recommended that format-shifting policy judgments be left to Congress, further highlighting the need for leaders who understand the goals of copyright law.

As different–and often misguided–theories of what constitutes fair use flood the internet during Fair Use Week, it’s important to acknowledge the doctrine’s purpose as a tool to promote the combination of original expressive works and honor the goals of copyright law. As Gorsuch says in Meshwerks, copyright law intends to encourage those who contribute something new to society, “while also allowing (and thus stimulating) others to build upon, add to, and develop those creations.” Gorsuch’s words invoke the same principles endorsed in Campbell, which says, “[f]rom the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts. . . .”

As copyright experts have pointed out (see here, here, and here), many of those celebrating fair use this week misunderstand the doctrine and want the public to believe that copyright law and fair use are at odds. It’s a false dichotomy that betrays the purpose of copyright law and risks devaluing the original works whose expressions truly enrich society. It’s a risk that could threaten both the quality of future works and the creative ecosystem they facilitate, but it’s a risk that can be offset by leaders, advocates, and judges with an appreciation for the true intent of copyright law and the fair use doctrine.

Tags copyright infringement, Google, intellectual property, Kevin Madigan, Supreme Court, U.S. Copyright Office

Librarians’ Contradictory Letter Reveals an Alarming Ignorance of the Copyright System

Post author By Joshua Grove
Post date December 19, 2016

On December 14th, a group of librarians sent a letter to Congress explaining why they believe the Copyright Office should remain under the control of the Library of Congress. Written by University of Virginia Library’s Brandon Butler, the letter is a self-contradicting and uninformed response to recent recommendations on reform of the Copyright Office offered by leading members of the House Judiciary Committee. While the lawmakers’ report proposes overdue, sensible reforms to the framework of a department in need of modernization, the librarians’ letter favors a one-sided approach to reform and reveals a gross misunderstanding of how copyright law and the Copyright Office ensure public access to creative works.

The Letter Embraces the Very Conflict It Claims to Reject

The letter begins by criticizing another recent letter to Congress from former Registers of Copyright Ralph Oman and Marybeth Peters in which they question the recent firing of Register of Copyright Maria Pallante and discuss the urgent need for an independent Copyright Office. Butler takes issue with the former Registers’ suggestion that the Library of Congress and the Copyright Office have different priorities and distinguishable missions, insisting that if any tensions exist, they are a result of bias at the Copyright Office. Alleging that the former Registers and the Copyright Office are “on the side of authors and media companies,” Butler proclaims that libraries “in all their richness and complexity” truly serve the interest of all. It’s a nice-sounding theory, but unfortunately it’s completely inaccurate and soon contradicted by a palpable disregard for the rights of authors and creators.

Claiming that librarians and the Library of Congress don’t subscribe to the theory of an adverse dichotomy between authors and the public, the letter then reinforces this theory by suggesting the scales should be tipped in favor of the public. In one paragraph, Butler endorses the “important balance between the short-term, private interests of authors and intermediaries, and the long-term interests of the public.” Curiously, just after he lauds this “important balance,” it is abruptly discarded as a reflection of “a narrow conception” and “inimical” priorities that cause an unproductive tension between the Office and the Library of Congress. Soon after describing libraries as the “fulcrum” upon which the balance of copyright and the public interest rests, the letter declares that “[we] reject this false dichotomy between copyright and the public interest.”

Regardless of this hollow denunciation, it’s clear that Butler believes there is a conflict between the interests of authors and the interests of the public, as he preaches to it throughout the letter. After paying lip service to rising above tensions between copyright and the public interest, Butler distinctly pushes for a system that values libraries over creators and the rights in their works. Describing the “crucial parts” of the copyright system embraced by libraries and librarians, the letter lists “fair use, first sale, interlibrary loan,” and claims that “without them libraries as we know them in this country could not exist.” One might argue that more crucial to the existence of libraries are the creative works that line their stacks, but this reality doesn’t seem worth mentioning. In fact, Butler asserts that copyright law has a “fundamentally public-serving character,” contrary to the letter’s earlier emphasis on serving copyright owners, authors, and the public equally. After praising the balance, then rejecting it, the letter unequivocally elevates the importance of the access libraries provide over the contributions and rights of creators.

The Letter Fails to Take into Account a Complex Creative Economy Based on Property Rights

James Madison observed in Federalist No. 43 that “the public good fully coincides . . . with the claims of individuals.” The Founders of our country recognized that creative economies are built upon the property rights of authors and artists, and as CPIP’s recent policy brief on creative markets explains, they “had the foresight to recognize that the public ultimately benefits when this protection is secured by law.” Promoting the public interest by recognizing the importance of individual interests was a theory drawn from Adam Smith and his seminal The Wealth of Nations. In it, Smith explained that concerted efforts to benefit the public are often less effective—and less helpful to society—than uncoordinated individual efforts to pursue private interests, and that society benefits the most when individuals are empowered to create valuable goods and services by pursuing their own interests.

Embodying these principles, copyright empowers authors and creators to pursue their own private interests by granting them exclusive property rights in their works. These same property rights support creative industries and provide significant benefits by playing a key role in facilitating the myriad transactions that contribute to a vibrant creative economy grounded in free market principles. Among other things, these property rights enable the division of labor, encourage product differentiation and competition, and spur investments in the development and distribution of creative works. Copyright not only incentivizes the creation of works, but also the commercialization of these works through further development, marketing, and distribution.

Copyright’s intricate ecosystems are based on incentives that ensure the continued creation and distribution of original works of authorship, yet the librarians’ letter doesn’t seem to appreciate their significance or how they function. Butler dedicates much of the letter to emphasizing the importance of public access to copyrighted works, but access is only the final step in a complex system of investment, commercialization, and distribution of creative works. The librarians claim to “understand that copyright is a complex ecosystem,” but nothing in the letter validates this assertion. The only part of the creative economy they deem worth discussing is the end result of access, with all other imperative stages either not realized or ignored.

The Librarians Are Oblivious to a Broken System

Ending with a plea to Congress not to interfere with the current “relationship” between the Library of Congress and the Copyright Office, the letter claims the Library is in the best position to lead a desperately needed modernization initiative at the Office. It’s a bold claim, given that the Library stood by as the Office’s infrastructure became embarrassingly outdated and underfunded over the past twenty years. Before her untimely ouster, Register Pallante provided Congress with a perspective on copyright review that included a detailed list of deficiencies within the Office in need of improvement. Specifically, Pallante cited the diminishing number of fulltime employees and inadequate budget that have made it all but impossible to support growth and development at the Copyright Office:

The Copyright Office budget is consistently in the neighborhood of $50 million, of which $30 million is derived from fees paid by customers for registration and other services. The Library’s overall budget for 2015 is approximately $630 million, inclusive of the Copyright Office. Without taking anything away from the important duties or funding deficiencies in the rest of the Library, the Copyright Office’s resources are inadequate to support the digital economy it serves.

Pallante’s report goes on to discuss the serious information technology (IT) problems facing the Office, and to question the Library’s plan to address IT concerns by exerting more control over the Office’s departments and decisionmaking. The former Register was wise to question a plan that would give more control to an organization that has consistently failed to value or support the Copyright Office and its mission.

Further demonstrating just how out of touch they are with the realities of the current copyright law landscape, an affiliated group of librarians recently professed their faith in the Digital Millennium Copyright Act (DMCA) safe harbor system that is undoubtedly failing creators, copyright owners, and the public. In comments submitted to the Copyright Office as part of its study on the effectiveness of Section 512 of the DMCA, the Library Copyright Alliance (LCA) makes the absurd claim that the “safe harbors are working exactly as the stakeholders and Congress intended.” But, just before this assertion, the comments accuse copyright owners of abusing the DMCA’s notice and takedown process, and suggest amendments to the DMCA are necessary “to curtail this abuse.” Not only are the LCA’s comments utterly contradictory, they ignore substantial evidence and testimony from dozens of interested parties that the DMCA needs to be reformed and updated.

As CPIP highlighted in a recent examination of the state of the DMCA, the notice and takedown system has been largely ineffective in managing the ever-increasing amount of piracy, and courts continue to diminish service providers’ responsibility to cooperate with copyright owners to detect and deter infringement. The constant game of whack-a-mole with websites offering infringing content continues, and platforms such as YouTube are teeming with unauthorized works. Artist, creators and copyright owners have loudly voiced their frustration with the current system and called for reforms that better respect their rights. In the face of such obvious evidence of a broken system, to claim the DMCA is working exactly as intended speaks volumes of the librarians’ inability to recognize the reality of the situation.

It’s Time for Change at the Copyright Office

The House Judiciary Committee’s proposal on copyright reform is a response to years of listening “to the views and concerns of stakeholders from all sides of the copyright debate,” and it identifies modernization efforts that address the concerns of these interested parties. Since 2013, the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet has conducted 20 copyright review hearings on the current state of copyright law which included testimony from 100 witnesses. In addition to the hearings, Committee Chairman Bob Goodlatte and Ranking Member John Conyers brought a copyright listening tour to Nashville, Silicon Valley, and Los Angeles where a wide range of creators, innovators, technology professionals, and users of copyrighted works had the opportunity to tell the Committee directly what changes they believe are needed to ensure U.S. copyright law evolves with the digital age.

The resulting policy proposals reflect a broad acknowledgment by those who participated in the review that the Copyright Office must be updated to keep up with the digital culture it serves. Two of the most important steps in this modernization effort identified by the Committee include requiring the Office to maintain an updated digital database and granting the Office autonomy with respect to the Library of Congress. If Brandon Butler and the signatories of his letter had their way, the Copyright Office would remain under control of an organization that has proven it is unable to help propel the Office into the 21st century. It’s not particularly surprising that librarians would want the Library of Congress to retain control over the Copyright Office, but an overwhelming majority of creators, copyright law experts, and lawmakers recognize that the Office needs to move forward, rather than remain trapped in the past.

Tags copyright, copyright infringement, DMCA, Kevin Madigan, notice and takedown, notice-and-staydown, Section 512, U.S. Copyright Office, YouTube

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