Tag: piracy

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Copyright Legislation

Senate IP Subcommittee Considers the Role of Private Agreements and Existing Technology in Curbing Online Piracy

The following post comes from Liz Velander, a recent graduate of Scalia Law and a Research Assistant at CPIP.

U.S. Capitol buildingBy Liz Velander

In mid-December, the Senate Intellectual Property Subcommittee, led by its Chairman, Senator Thom Tillis (R-NC), held a hearing entitled “The Role of Private Agreements and Existing Technology in Curbing Online Piracy.” The hearing came ahead of Sen. Tillis’s release of his first discussion draft of legislation to reform the Digital Millennium Copyright Act (DMCA). In his opening remarks, Sen. Tillis stated that reforming the DMCA is one of his top priorities in the 117th Congress, but it may take his entire second term to get a DMCA reform bill across the finish line. The purpose of the hearing was to identify voluntary steps that copyright owners and tech companies can take now to curb online infringement.

The hearing consisted of two panels. Panel I included: Ruth Vitale, CEO, CreativeFuture; Probir Mehta, Head of Global Intellectual Property and Trade Policy, Facebook, Inc.; Mitch Glazier, Chairman and CEO, Recording Industry Association of America (RIAA); and Joshua Lamel, Executive Director, Re:Create. Panel II included: Katherine Oyama, Global Director of Business Public Policy, YouTube; Keith Kupferschmid, CEO, Copyright Alliance; Noah Becker, President and Co-Founder, AdRev; and Dean Marks, Executive Director and Legal Counsel, Coalition for Online Accountability.

Sen. Tillis began the hearing by voicing his opinion on the matter, informed by a year-long series of hearings and months of feedback from creators, user groups, and technology companies. “There is absolutely more big tech can and should do to stop online piracy,” Sen. Tillis said. “Unfortunately, it seems that some in big tech aren’t serious about stopping online piracy, and I don’t know why that is. Maybe it isn’t a priority—or maybe some companies are actually profiting off the piracy on their site. It is clear as day to me that many multi-national, multi-billion-dollar companies simply aren’t using all the tools they have to stop theft from small creators. And that’s wrong.”

Mitch Glazier, Chairman and CEO of RIAA, stated that the problem is that big tech companies aren’t properly incentivized to take steps in combatting online piracy. Keith Kupferschmid, CEO of the Copyright Alliance, explained that Section 512 of the DMCA has been so misinterpreted by the courts that most service providers know that they have little risk of liability and need only do the absolute minimum required under the DMCA to avoid liability.

Mr. Glazier said that one of the most important things Congress can do is to provide the right incentives to encourage voluntary private agreements. He explained that there are two types of private agreements. First, there are individual agreements entered into by copyright owners and technology providers. These can be nimble and evolve with technology. Second, there are standards developed in the marketplace that eventually achieve broad enough consensus and use that they become required. In Mr. Glazier’s view, that is what the DMCA contemplated—a multi-stakeholder standard technical measure (STM) process where there was enough consensus and use that it would be unfair for outliers to compete without using them. Mr. Glazier said that a voluntary system only works if there exist the right incentives, which the DMCA does not currently provide.

The panelists disagreed as to whether Congress needs to reform the DMCA in order to incentivize voluntary agreements. The panelists representing big tech companies asserted that the process is working as the DMCA intended, pointing to the policies and procedures of their platforms and existing content protection technology. Probir Mehta, Head of Global IP and Trade Policy at Facebook, touted Facebook’s content management tool, Rights Manager. Katherine Oyama, Global Director of Business Public Policy at YouTube, pointed to Youtube’s Copyright Management Tools, which include a webform, Content ID, and Copyright Match. These panelists emphasized the significant amount of work their companies undertook to create these technologies, which they view as going above and beyond the requirements of the DMCA.

Members of the IP Subcommittee were very interested to hear how these tools work in practice. Ruth Vitale, CEO of CreativeFuture, testified that most individual creators are not given access to YouTube’s Content ID, nor are they given an explanation for why they are denied. Ms. Oyama stated that while Content ID has eligibility requirements, YouTube built an entirely new tool for smaller creators, Copyright Match, which runs on Content ID itself. She claimed that Content ID is such a powerful tool that, if used improperly, will erroneously take down content that is noninfringing.

Ranking Member Senator Chris Coons (D-DE) wanted to know what the panelists viewed as the path forward. Mr. Kupferschmid said that while voluntary agreements have a role, they cannot address everything. He emphasized that legislative action is appropriate in this circumstance because service providers are not being cooperative. Noah Becker, President and Co-Founder of AdRev, a digital rights management and media technology company, agreed with Mr. Kupferschmid. He explained his business’ revenue-sharing proposition is a better fit for copyright owners that do not want to use YouTube’s monetization tools. In addition to legislation, he explained that there should be some sort of support for the concept of a list of approved vendors, like AdRev, to be able to access copyright APIs on massive platforms. He urged that this would reduce the large cost and technology burden of accessing APIs, making takedowns more affordable for creators.

Sen. Tillis closed the hearing by stating that the parties need to engage with one another in order to avoid a potential legislative overreach. He said that the hearing showed that tech companies must do more to combat online piracy. Sen. Tillis stressed that they have the tools and resources but must find ways to get greater engagement and create voluntary paths to prevent Congress from paving less voluntary ones.

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Copyright

Shaping Fair Use to Promote Fair Markets

skyline with U.S. Capitol buildingHow does fair use policy in copyright law affect markets for the production and distribution of creative works? As we come to the end of Fair Use Week, it’s a good time to highlight a report by the Phoenix Center for Advanced Legal and Economic Public Policy Studies, titled “Fair Use in the Digital Age,” that offers interesting insights into how we can optimize fair use to promote fair markets. The report takes aim at stakeholders in the entertainment and media sectors who call for weaker copyright protections at a time when the creative industries are already being undercut by spiraling digital piracy that shows no signs of abating. The report creates an economic model that opens new vistas for economically sound fair use policy in high-production-cost creative industries. And its application would help judges and lawmakers approach fair use questions in a consistent and empirically sound manner, free from the rhetoric that swirls around much of today’s fair use debates.

The concept of “fair use” in the U.S. carves out exceptions and limitations to copyright’s exclusive property rights by allowing copyrighted works to be used in certain circumstances without permission or compensation. Some other countries—like Australia and New Zealand—have an analogous carve-out in the concept of “fair dealing.” U.S. copyright law sets out four factors that must be analyzed on a case-by-case basis to determine whether a particular use constitutes a fair use. In “fair dealing” countries, specific uses that are permitted are enumerated by statute. In theory, both fair use and fair dealing are subject to statutory construction and judicial interpretation, and can be given wide or narrow berth. In practice, though, proponents of the U.S. version argue that fair use offers greater “flexibility” to allow the use of copyrighted works without permission or compensation.

“Fair Use in the Digital Age” constructs an economic model of exceptions and limitations to copyright under fair use that focuses on the goal of incentivizing the creation of new works. The objective behind the report is to determine an “optimal” level of fair use (or fair dealing) – i.e., a level in which some appropriation can occur without significantly impairing the rights and returns of copyright owners. The report finds that “optimal” fair use should be more constrained when: (i) the cost of the original work is high; (ii) the size of the market for the original work is small; (iii) piracy and other forms of leakages—which reduce the market potential for the original work—are large; (iii) the cost of distributing secondary works is lower; (iv) small amounts of transformation matter a lot to consumers; and (vi) the fixed cost of producing  secondary works is smaller.

The report seeks to “analyz[e] fair use formally and rationally.” In so doing, it concludes that “much of the advocacy for broader exceptions in copyright law is misguided.” The report argues forcefully that the characteristics of digital technologies that fair use advocates look to when calling for expanded “flexibility” actually suggest that we should be reducing exceptions and limitations to copyright. This holds particularly true in smaller markets, which tend to have high rates of copyright misappropriation and higher enforcement costs. While calling for further research on the matter, the report marks a noteworthy step in analyzing fair use rationally and carefully, and offers a clear and reasonable economic model for keeping fair use well-determined, well-designed, and fair.

Categories
Copyright

Can Copyright Help Fight Censorship in China?

cameraFree expression in China has long been a fraught concern for the entertainment industry. Last year, Chinese regulators forbade local companies from working on foreign films that could “harm national dignity and interest of China, cause social instability, or hurt the national feeling,” striking at the rapidly expanding Chinese post-production industry for Hollywood films. A further proposed regulation, now winding through China’s political—and politicized—approval process, demands “excellence in both professional skills and moral integrity” from the Chinese film business. As Chinese investors continue to acquire stakes in Hollywood studios and cinema chains, these regulations threaten to undermine global film producers striving to gain market share in China’s enormous entertainment sector.

China’s local film industry also stands to suffer from the new draft film laws, which codify the view of China’s top political advisors that movies need to be “more centered on the people, guided by core socialist values.” The national media regulator in China has already warned local entertainment and media programs not to “express overt admiration for Western lifestyles,” not to be overly commercial, and not to forget to inject communist values in their products. The results with respect to local production have been underwhelming: films with overtly communist messages have done poorly at the box office, while films that cater to audiences’ fascination with Western tastes and values remain hugely popular and in demand.

Chinese policy makers’ zeal for regulating and curtailing free expression seems unlikely to abate. Yet at the same time, Chinese audiences’ hunger for a broad array of expressive content, including works that openly embrace Western values and preferences, seems equally strong and unlikely to subside. Can this conundrum be resolved, or at least improved, anytime soon?

A fascinating paper by CPIP Senior Scholar Eric Priest offers a market-based analysis that gives hope for a way forward to gradual—and meaningful—liberalization and reform of the formal rules that govern China’s entertainment industry. Priest argues that copyright laws and practices can strengthen commercialization in the Chinese film industry, creating “complex interlocking power relations between the audience, producers, and censoring authorities.” The strength of market-backed private producers in this regime is considerable and creates leverage that can effectively push back against the authority of government censors. The concentrated strength and influence of private producers in China, underpinned and driven by market forces and economic realities, can provide a counterbalance to state censorship that Priest argues “will erode censorship practices and increase expressive diversity in Chinese media.”

Central to Priest’s analysis is the importance of copyright law as a tool for creating private property rights in original expression and thereby enabling private producers to create and commercialize new works. While many scholars argue that copyright law creates legal barriers around expressive works and thus works in parallel with state censorship, Priest argues quite the opposite. He contends that copyright bolsters private production of creative works, making it easier for film producers to push back against censors while offering popular market-based (rather than merely state-approved) creative content.

Priest’s analysis of the development of the Chinese film industry, and his exploration of the gradual way in which its state-mandated boundaries are being tested and slowly moved, is rich and detailed. He is careful to note the limits of even gradual market-based reform, pointing to films that have not been approved, sometimes for unclear reasons. Further, he recognizes that attempts by the Chinese government to allow a more open media while simultaneously seeking to maintain ideological control may create an irreconcilable dilemma for Chinese policymakers.

Priest suggests that a hardline turn is a possible outcome, but he argues that it would lead to a downturn in the Chinese film industry that would be unacceptable to Chinese authorities. He argues that Chinese censorship officials would be better off taking a “more organic, permissive, and experimental approach to censorship practice, while leaving the more restrictive formal laws intact as a baseline standard until circumstances warrant a change in formal laws.” As noted earlier, this does not appear to be the direction in which the government is currently headed, suggesting that other priorities—such as upholding socialist norms, embracing didacticism, and promoting authoritarian tenets—may remain the order of the day in China. But Priest takes the long view, and so should we: the film market will speak in China, and it will speak loudest when it is supported by market realities and the choices of the people it serves.