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Copyright

Copyright Office Questions Legality of Internet Archive’s National Emergency Library

the word "copyright" typed on a typewriterOn March 24, the Internet Archive (Archive) unveiled what it called the “National Emergency Library” (NEL) in order to “address our unprecedented global and immediate need for access to reading and research materials.” The announcement specified that Archive would suspend the waitlist for 1.4 million books in its unlicensed “lending library” until at least June 30, thus allowing an unlimited number of people to download electronic copies of the same book at the same time. Archive had previously employed a controlled digital lending (CDL) model where the number of downloads was tied to the number of physical copies Archive or its partners possessed. With the waitlist suspended, Archive temporarily abandoned the CDL model that it had relied on since 2011.

Archive’s release of 1.4 million copyrighted works without a license certainly caught people’s attention. The Authors Guild quickly condemned the move, claiming that Archive “has no rights whatsoever to these books, much less to give them away indiscriminately without consent of the publisher or author.” Maria Pallante, President and CEO of the Association of American Publishers, likewise denounced Archive’s announcement: “We are stunned by the Internet Archive’s aggressive, unlawful, and opportunistic attack on the rights of authors and publishers in the midst of the novel coronavirus pandemic.” Archive then responded in a blog post explaining that it had suspended its waitlist due to the “tremendous and historic outage” in the nation’s libraries caused by the pandemic and arguing that fair use is the “legal doctrine underlying” its CDL model “during normal times.”

A couple of weeks later, on April 16, Senator Tom Udall (D-NM) sent a letter to Acting Register of Copyrights Maria Strong asking the Office “to examine the National Emergency Library that has been organized by the Internet Archive which is operating without typical library licenses and is causing authors in New Mexico concern about the integrity of their copyrights.” In particular, Sen. Udall asked the Office to “include a legal analysis of the Internet Archive’s National Emergency Library” under Section 107 and to “recommend any corrective action that you deem necessary to comply with copyright law and protect authors.”

On May 15, Acting Register Strong submitted a detailed response to Sen. Udall, noting that “it is not the Office’s general practice to provide legal advice about specific factual scenarios” and that the “Office is particularly cautious about weighing in on circumstances or disputes between private parties.” Nevertheless, the Office provided a general analysis of how copyright law applies to libraries and then looked at how that analysis applies to “the Internet Archive’s recent activities.” Notably, the Office ultimately concluded that it “would have been beneficial for the Internet Archive to engage with writers and publishers prior to launching the National Emergency Library to discuss the contemplated parameters for the project and determine their willingness to participate.”

On June 1, a couple of weeks after the Office submitted its response to Sen. Udall, four major publishers, including Hachette, HarperCollins, Penguin Random House, and Wiley, filed suit against Archive for copyright infringement in the Southern District of New York. The complaint, which includes 127 works-in-suit, alleges that Archive’s CDL and NEL models infringe on their works, both directly and indirectly. This blog post does not address that dispute, though the publishers do raise many of the same issues in their complaint that the Office raised in its response to Sen. Udall. This blog post merely summarizes the Office’s reasoning on the fair use analysis of Archive’s National Emergency Library. It is worth noting that, even though Archive announced on June 10 that it was shutting down its NEL, the legality of the NEL is still a live issue in the publishers’ lawsuit.

Fair Use Under Section 107

Looking at the first fair use factor under Section 107 generally, the Copyright Office notes that while the “goals of promoting scholarship and education are explicitly identified in the statute as favored purposes,” it “is generally understood that many uses of copyrighted works by schools and universities must be licensed.” Citing Oracle v. Google and Authors Guild v. HathiTrust, the Office points out that “reproducing the text of physical books in digital format is not transformative unless the change in format results in new uses for the work.” Moreover, it explains that using educational materials for educational purposes “would not serve a different purpose than the original.”

Turning to the NEL specifically, the Office takes issue with Archive’s claim that “the vast majority” of the books it makes available “do not have a commercially available ebook” that would be publicly available given that libraries are closed. On the contrary, the Office states that “Archive does not appear to have verified if any of the works in its collection were available to the public in digital formats prior to including those books in its collection or removing its waiting lists” and that the NEL “includes many books for which ebooks are available commercially” at local libraries. Thus, the argument that Archive was making available works that were otherwise unavailable “does not apply to any books that were available in digital formats at the time of the copying.”

The Office notes that the NEL is available to the public for free such that Archive’s use is noncommercial. However, it emphasizes that Archive’s stated purpose of promoting scholarship and education “alone does not establish fair use.” Indeed, the Office points out that “at least some” of the 1.4 million works, such as “Stephen King thrillers and joke books,” are “likely to be accessed for entertainment rather than educational purposes.” Even for the educational books that are not available in digital formats, the Office explains that the noncommercial purpose must be weighed against “the non-transformative nature of the use.” Given that educational works are “originally intended to educate,” Archive’s use of these works “is not transformative.” And given that Archive does not provide “search functionality,” it does not fit within the “digitization cases” that were “deemed transformative,” such as Google Books and HathiTrust.

On the second factor, the Office cites Campbell v. Acuff-Rose for the proposition that “some works are closer to the core of intended copyright protection than others” and Harper & Row v. Nation for the point that the “law generally recognizes a greater need to disseminate factual works than works of fiction or fantasy.” The Office also notes that there may be “more justification” for reproducing previously published works that are “currently unavailable in the marketplace.” Nevertheless, it explains that the existence of organizations to provide copies of such works is relevant to this factor, and it mentions that the case law on a “work’s print status under the second factor is mixed.”

Applying this to the NEL, the Office clarifies that the analysis of the second factor is necessarily “fact-specific” and that each work or category of works “would need to be evaluated independently.” For example, “creative works” would be analyzed differently than “factual or informational works.” And while the unavailability of certain works might favor fair use “in some circumstances,” the Office notes that this does not appear to have been Archive’s focus. Archive instead focused on whether the books were available in digital form, making no “mention of the works’ overall availability.”

The key to the third factor, the Office explains, is “whether the secondary use employs more of the copyrighted work than is necessary, and whether the copying was excessive in relation to any valid purposes asserted under the first factor.” Moreover, while “copying an entire work often weighs against a finding of fair use,” the factor “would not weigh against a finding of fair use” if “it were necessary to copy the entire copyrighted work to achieve the purpose of the secondary use.”

The Office notes that the CDL White Paper, upon which Archive relies, “argues that it is necessary to copy the entire book to achieve the purpose of providing digital access to the work, such that the copying is not excessive in relation to the library’s purpose.” The CDL White Paper also argues that “the library prevents users from making additional copies of or further distributing the book and limits the duration for which a user can access a book.” In response, the Office points out that the courts in Google Books and HathiTrust “emphasized that the defendants had not made the full text of the copied works visible to the public” and how the Office itself (see here, here, and here) has “consistently expressed doubt that providing digital access to complete works can be considered a fair use.”

Quoting Harper & Row, the Office notes that the fourth factor, which is “undoubtedly the single most important element of fair use,” turns on “whether widespread conduct similar to the conduct of the alleged infringer ‘would adversely affect the potential market for the copyrighted work.’” The Office explains that, under Google Books and HathiTrust, the third and fourth factors are linked: “the risk that the digitized version will serve as a market substitute for the original work increases as the amount of the work that is made accessible to the public increases.” In both of those cases, the copying of entire works was permissible because it enabled transformative search functionality without serving as a market substitute by making the entire works available.

Turning to the NEL, the Office acknowledges a “disagreement among stakeholders over whether the analysis of market harm under the fourth fair use factor should consider the Internet Archive’s activities as roughly analogous to physical lending by libraries, or whether the markets for physical lending and ebook licensing to libraries are distinct.” The Office points out that no court has embraced the former approach and that “the Second Circuit squarely rejected it” in Capitol Records v. ReDigi. Moreover, the Office cites its own report noting that there are “significant differences” between lending physical copies and digital ones. And it points out that the NEL “lacks the controls cited by the CDL White Paper as necessary to mitigating market harm” since it allows “an unlimited number of users to borrow any given title simultaneously.”

On the latter approach, which holds that the market for ebook licensing is distinct from that of physical lending, the Office states that there is already “an established market” where “publishers and authors license their works to libraries for the purpose of digitally ‘lending’ them to patrons.” The fourth factor analysis here “might focus on whether the creation and distribution of digital versions of these works would affect this market, and also how, if such conduct became widespread, it would affect this market.” If digital versions of some works were not available in the marketplace, the Office concludes, “this factor might favor fair use for some, but not necessarily all, of the works contained in the National Emergency Library.”

The Office also examines how “exigent circumstances” related to the pandemic may factor into a fair use analysis. The Office notes that there “is undoubtedly a strong public interest in ensuring continued access to educational materials in this unprecedented time, which could weigh in favor of fair use.” However, while Archive’s goal “may be laudable, so is respect for copyright.” The Office states that it “would be imprudent to excuse widespread copying due to a national emergency without considering the possible repercussions on copyright law and copyright owners” since there “is also a strong public interest in ensuring that authors are able to financially survive the coronavirus crisis to be able to continue to produce creative works.” And it concludes by noting that a “court would almost certainly also take into account” Archive’s effect “on writers and publishers.”

Conclusion

The Copyright Office ultimately suggests that Archive may wish to “explore opportunities for collaboration with writers and publishers” such as by “allowing them to opt into making digital versions of their works publicly available.” While the Office never explicitly says that any particular work is being infringed, its analysis does indicate that, in its opinion, Archive cannot claim that it is engaging in fair use for all of the works made available with its National Emergency Library. Furthermore, the Office explains why other statutory limitations, such as the first sale doctrine under Section 109, would not apply to Archive’s activities. All in all, it seems clear that the Office is quite skeptical of the NEL’s legality under the fair use doctrine. Though, it remains to be seen whether the Southern District of New York will agree with the Office’s analysis.

Categories
Copyright Innovation Patents Pharma

IP Industries Step Up in This Time of Crisis

the word "inspiration" typed on a typewriterThe global COVID-19 pandemic has challenged multiple aspects of modern society in a short time. Health and public safety, education, commerce, research, arts, and even basic government functions have had to change dramatically in the space of a couple months. Some good news in all this is the response of many companies in the intellectual property (IP) industries: they are stepping up to make sure crucial information and materials are available to speed research and development (R&D) towards vaccines, therapeutics, and medical devices. This blog post gives a sampling of the current initiatives facilitating the best innovative work the world has to offer.

Bio-pharmaceutical companies

Bio-pharmaceutical (bio-pharma) companies have been leading the charge, collaborating with academic and government partners to advance vaccine and therapy candidates on a fast track. While there have been isolated stories of some IP-related issues for rapid deployment and use of medical devices such as ventilators, the overall message is clear that research, development, and deployment have not been hindered by IP rightsholders. In fact, problems for distribution of medicines, personal protective equipment, and medical devices have little to do with IP rights but rather with hoarding and nationalistic impulses by governments.

Examples of rapid response are abundant. In February, the Department of Health and Human Services and its Biomedical Advanced Research and Development Authority (BARDA) partnered with the Janssen Research & Development unit of Johnson & Johnson to investigate a promising vaccine candidate. Janssen also committed to invest in the scale-up of production and manufacturing capacities to produce the vaccine candidate if it succeeds through clinical trials. By mid-March, 50 drugs that might fight the virus had been identified by collaborations of hundreds of scientists. Research continues apace and 80 clinical trials are proceeding, some on fast track status including a potential vaccine.

Beyond its core R&D, regulatory, manufacturing, and distribution mission, the bio-pharma industry is providing direct support to many places in need. This includes donations of medical supplies and personal protective equipment (PPE), existing treatments and medicines, and monetary and in-kind support.

At the same time, private incentives are more important than ever to get novel vaccines, drugs, and devices out to the world in safe, efficacious form and at scale. Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, has long recognized that exclusive licenses of IP to bio-pharma industry partners are necessary to get innovative vaccines and drugs to the public:

“We always need a pharmaceutical partner,” [Fauci] told CQ Roll Call in October 2017. “I can’t think of a vaccine, even one in which we’ve put substantial intellectual and resource input, that was brought to the goal line without a partnership with industry. So this is a very natural process that we’re doing right now.”

He argued that for vaccines like Zika, which might predominantly be used in low-income countries, drugmakers don’t see a lot of financial incentive to get involved, which is why the NIH needs to grant exclusive licenses. But he argued that the process hasn’t had an impact on vaccine affordability.

“I have not seen in my experience situations in which we were involved in the development of a vaccine, particularly for low- and middle-income countries that really needed it, where the pharmaceutical companies priced it out of their reach,” Fauci said.

Likewise, as noted innovation scholars Daniel J. Hemel and Lisa Larrimore Ouellette point out in a recent article, Innovation Policy Pluralism, multiple vectors of public and private incentives and resources work together to advance pioneering innovation. Even in countries with a national health or single payer system, the government health program does not manufacture vaccines, drugs, or devices. Instead, it relies on private firms that in turn work closely and well with public and academic researchers to identify pressing problems, locate relevant basic science advances, and then translate those into actual vaccines, therapies, or devices.

The myth of patients and the public “paying twice” for bio-pharma innovation arising from public-private partnerships is pernicious. It conflates the distinction between basic science research and drug or vaccine candidates, on the one hand, with compounds that can be produced at scale, distributed safely, and that have passed arduous clinical trials to demonstrate safety and efficacy. In the United States, private companies must foot the entire bill for these clinical trials, which run into hundreds of millions of dollars over three phases that enroll thousands of subjects. Simply stated, publicly funded research does not result in a substance or compound that can be manufactured and distributed as is with no further R&D or clinical trials.

A related myth is that governments should use compulsory licenses and similar mechanisms to bypass IP rights holders in an effort to speed research and delivery of drugs and vaccines—when they emerge—to the public at low to no cost. First, there are important distinctions between compulsory licenses, U.S. Bayh-Dole style march-in rights, and government use under statutory provisions like 28 USC 1498, which we have outlined here. But across all of them, IP rights holders must still be compensated at a fair market license rate. Thus, there are no “savings” of IP royalties that could lower the price of vaccines or drugs. This makes sense as we don’t force manufacturers to produce drugs or vaccines for free. Even the Defense Production Act merely directs production, it does not require manufacturers to produce goods for free.

Finally, even if patents could be disregarded, we should be careful about encouraging “open source” or amateur production of regulated devices like ventilators. While the FDA has authorized some limited modifications of approved ventilators to accommodate the exigencies of COVID-19, this does not create a free-for-all in which wholesale changes or entirely new designs of the device or its components can be used. We need to take care that these modifications or new designs are actually safe and efficacious. Thus, while innovation like that of famed inventor James Dyson is most welcome, it does not actually solve the immediate problem of a shortage of ventilators as national regulators must still test and approve these untested devices for medical use. And at any rate, Dyson is not offering their new ventilators for free, even as they are designed to be produced at lower costs and sell at a lower point price in the market.

Thus, we need the bio-pharma industry more than ever to get through this pandemic. Large established firms and nimble start-ups have the resources and expertise to innovate and produce vaccines, drugs, and devices that will pass regulatory muster for safety and efficacy. Now is not the time to attack the patent system and weaken incentives for full-steam-ahead bio-pharma and medical device R&D.

Scientific publishing

Similar to the bio-pharma companies, publishers have been leading the way in making crucial scientific and technological information widely available in order to help fight the global coronavirus pandemic. An open letter from Kelvin Droegemeier, Director of the White House Office of Science and Technology Policy (OSTP) and member of President Trump’s Coronavirus Task Force, issued the call to arms last month (for example, see here, here, and here). Joined by government science leaders from eleven other countries—Australia, Brazil, Canada, Germany, India, Italy, Japan, Republic of Korea, New Zealand, Singapore, and United Kingdom—the letter called for publishers to make all research and data related to the coronavirus available immediately to the public. Publishers were quick to respond positively to the letter, pointing out that many journals had already been opened up to the public in an effort to support the dissemination of important scientific research and data when it is needed the most.

In the letter, the government science leaders stated: “To assist efforts to contain and mitigate the rapidly evolving COVID-19 pandemic, basic science research and innovation will be vital to addressing this global crisis. Given the urgency of the situation, it is particularly important that scientists and the public can access research outcomes as soon as possible.” The leaders asked the publishers to voluntarily agree to make their coronavirus-related publications, and the data supporting them, immediately accessible in PubMed Central and other public repositories. PubMed Central refers to the digital archive of biomedical and life sciences journal literature at the U.S. National Institutes of Health’s National Library of Medicine. The leaders also requested that the information be made available in both human and machine-readable format to allow for text and data mining using artificial intelligence.

The same day that the government science leaders sent their letter, Maria Pallante, President and CEO of the Association of American Publishers (AAP), issued a statement noting that the organization and its members would be happy to continue doing their part in making the research and data available to the public:

Publishers purposefully and continuously contribute to the advancement of science and medicine by investing billions of dollars in producing and disseminating high-quality, peer-reviewed journal articles. In this urgent and serious environment, we are grateful to the many publishers who are doing their part to communicate valuable discoveries, analyses, and data as quickly as possible, including by making their copyrighted articles pertaining to the virus freely available for public use during this crisis, in both text and machine-readable formats. Many publishers – both commercial companies and nonprofit societies – have been doing so for weeks.

 

Likewise, Elsevier, which specializes in publishing global information on science and health, has taken the lead in ensuring that relevant scientific information is available to the public. Back in January, Elsevier set up its Novel Coronavirus Information Center, offering free health and medical research information on the coronavirus and COVID-19, the disease that is causes. The Information Center is updated daily with the latest research information, including links to nearly 20,000 peer-reviewed journal articles on its ScienceDirect platform that are curated by clinicians and other experts. The information is intended for use by practitioners, such as nurses and doctors, as well by patients and their families. In response to the letter from the government science leaders, Elsevier announced in a press release that same day that the information would be made available to PubMed Central and other publicly funded repositories, including in machine-readable format that could be used for full text and data mining.

Kumsal Bayazit, the CEO of Elsevier, also released a statement that day underscoring Elsevier’s continued leadership on this front and concluding:

In working with the White House to improve the discoverability and utility of this important body of knowledge, we are now making it available to PubMed Central and other publicly funded repositories such as the WHO COVID database for full text and data mining and without any limitations for as long as needed while the public health emergency is ongoing. Through this partnership we hope to help researchers to keep up with the rapidly growing body of literature and identify trends as countries around the world address this global health crisis.

 

Numerous other publishers have stepped up as well. Wiley announced that it “is making all current and future research content and data on the COVID-19 Resource Site available to PubMed Central” and “other publicly funded repositories, such as the World Health Organization (WHO) COVID-19 database and Wellcome Trust.” The Resource Site was set up by Wiley in February in order to ensure rapid, public access to COVID-19 research, and in response to the request of the government science leaders, Wiley is now inputting that information into PubMed Central and other publicly-accessible databases. Likewise, Springer Nature stated: “We have made available, for free, all relevant research we have published and continue to publish, [and] are strongly urging our authors submitting articles related to this emergency to share underlying datasets relating to the outbreak as rapidly and widely as possible.” Other publishers, such as American Chemical Society, PLOS, STM Publishing, IOP Publishing, Emerald Group Publishing, F1000 Research, and eLife Research, have committed themselves to the cause of making their coronavirus research and data available publicly.

It is not just scientific research that is being freely shared by publishers. Textbooks for students affected by the pandemic have been made available as well. Wiley recognized the need “to ensure instructors who need to teach remotely have the necessary tools to help their students,” and it opened up its online textbooks so that instructors “can receive free access for their students for the remainder of the Spring 2020 term.” Barnes & Noble announced that it was joining VitalSource and other leading publishers to provide free online textbooks for students at schools where it operates a campus bookstore. Michael P. Huseby, CEO and Chairman of Barnes & Noble Education, said: “Our top priority remains providing schools and students with solutions during this time of unprecedented disruption, while simultaneously protecting the health and safety of our employees and customers.” Other textbook publishers, including Cengage, Gale, Cambridge University Press, among many others, have done the same in order to make the transition to online learning as smooth as possible by ensuring that students have online access to the textbooks that they need.

Categories
Copyright

Publishers v. Audible: An Army of Red Herrings

a gavel lying on a desk in front of booksAudible 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.

Categories
Copyright

Audible’s Planned Caption Service is Not Fair Use

a shelf full of booksLate last month, a group of publishers filed a complaint against Audible in the Southern District of New York asking the court to enjoin the audiobook distributor’s launch of a new audio-to-text transcription service. Although Audible has yet to file a response, a statement from the company—a subsidiary of Amazon since 2008—hints at a fair use defense based on the service’s supposed educational purpose. Unfortunately for Audible, its unauthorized reproduction, distribution, adaptation, and display of the publishers’ copyright-protected works is unlikely to survive a sound fair use analysis.

New Captioning Feature Infringes Publishers’ Rights

Audible is the world’s largest distributor of digital audiobooks and “spoken-word entertainment,” making available to its subscribers hundreds of thousands of audio programs based on works licensed from publishers, broadcasters, entertainers, individual authors, and other copyright owners. For subscribers who want a cross-format experience where they can simultaneously read and listen to the text, Audible already offers a feature called Immersion Reading. Touted as an educational tool that can help with reading comprehension, Immersion Reading is made possible by Audible securing licenses for both the audio recording and text of the work—and subscribers are required to purchase both an audiobook and a Kindle edition ebook.

In July of 2019, Audible announced it would be adding an “Audible Captions” feature to its mobile app. The service utilizes Amazon’s transcription technology to provide Audible subscribers with text for a select number of works in Audible’s audio program catalog. When listening to a predetermined “caption-ready” work, a subscriber would have the ability to activate the transcription technology, which then generates and distributes text to the subscriber’s device in a matter of milliseconds while the audio continues to play.

As the publishers’ complaint explains, the Audible Captions service converts the publishers’ works into unauthorized and often error-ridden “new” digital books and then distributes them to its customers without permission. Unlike its Immersion Reading service, Audible has not secured a license to copy, repurpose, distribute, or display this text and has no intention of compensating publishers for this cross-format use that would compete directly with and devalue existing physical books and ebooks. Accordingly, the publishers’ complaint alleges direct, contributory, and vicarious infringement and asks the court to enjoin Audible from reproducing, adapting, distributing, or displaying the publishers’ works.

Fair Use Defense Falls Flat

While Audible’s response will likely include a variety of defenses (for an in-depth look into what Audible might argue on the merits of the publishers’ prima facie infringement case, see Devlin Hartline’s recent post), public statements by the company have focused on the purported educational purpose of the captioning service, setting the stage for a fair use affirmative defense. Despite lofty claims of the educational objectives of its service, Audible Captions would clearly serve entertainment purposes as well, profiting Audible while undermining the legitimate and existing market for ebooks and other cross-platform services.  A closer look at the four fair use factors reveals Audible’s tenuous position.

1. Purpose and Character of the Use

 

The first factor—and the factor that is most relevant to Audible’s statements on educational intentions—involves determining the purpose of the unauthorized use. Section 107 of the Copyright Act provides a non-exclusive list of a few traditional uses—news reporting, comment, criticism, teaching, research, and scholarship—that will usually tip the scales in favor of the alleged infringer. However, the language is clear that determining “whether such use is of a commercial nature or is for nonprofit educational purposes” is integral to a proper factor-one analysis.

In its press release response to the publishers’ complaint, Audible describes its captioning service as a “free initiative” and a “free, new technology.” But it’s critical to understand—especially in the age of pervasive and organized digital infringement—that offering something to a customer for free that may have an educational function does not mean the activity is nonprofit. Indeed, the online platforms and services we use free of charge on a daily basis distribute massive amounts of content that could be deemed educational, all the while raking in profits through ad revenue and data collection. While Audible’s business model is not the same as the social media and search engine giants that rule cyberspace, it is a commercial business that makes money from the sale of audiobooks and subscriptions, and it’s attempting to justify infringement with a familiar fair use refrain.

If Audible Captions is allowed to launch, Audible would no longer have to secure cross-format licenses for its existing Immersion Reading service. It would essentially replace its own product—more on this later—with a version designed to allow it to skirt licensing requirements and profit at the expense of publishers and other copyright owners. Providing an audio-to-text feature without having to compensate copyright owners would establish a clear commercial advantage for Audible, and this type of misappropriation is not what fair use is meant to protect.

It’s also important to note that, at a time when courts are citing transformative fair use to excuse more and more instances of misappropriation, Audible Captions does not transform the underlying work and serves no transformative purpose. Audible is reproducing the text of a literary work for the purpose of reading—whether for education or for entertainment—and that is the exact purpose of the underlying works of authorship. As the Second Circuit stated in Authors Guild v. Hathitrust, “a transformative work is one that serves a new and different function from the original work and is not a substitute for it.” There’s nothing new or different about Audible Caption’s output.

2. Nature of the Copyrighted Work

 

The second factor asks whether the underlying work is a fact-heavy informational work or a work of creative expression and entertainment, giving more fair use leniency to the former since there is a greater need to disseminate factual works. In the case of Audible Captions, most (if not all) of the books Audible lists in its promotional materials are literary works of fiction. Despite a few older titles that have fallen into the public domain, most of the books whose text would be made available through Audible Captions are copyright-protected works of creative expression. This factor weighs clearly against a fair use determination.

3. Amount and Substantiality of the Portion Used

 

Like the second factor in this case, this consideration is not complex and weighs quite clearly against a fair use finding. Audible Captions reproduces the entire text of the underlying work. While it may only display a certain amount of text on the screen of a device at a time, subscribers have the ability to pause, rewind, and otherwise jump to any part of the works which will then be transcribed and delivered to their device.

Some early commentators on the Audible Captions technology have used the word “snippet” to describe what subscribers are able to access. This is probably an attempt to liken the service to the Google Books project, which displayed limited amounts of text to a user and was found to be fair use. But Google Books never allowed users to read a work in its entirety, which is exactly what Audible’s service does.

4. Effect of the Use on the Potential Market or Value of the Underlying Work

 

Notwithstanding arguments about the educational and altruistic purpose of its service, Audible cannot survive a sensible analysis of the fourth factor for one very simple reason: their own Immersion Reading service proves that a legitimate market for cross-format use already exists and will be harmed by a free alternative. As mentioned earlier, Immersion Reading depends on Audible licensing both the audiobook and text from publishers, and the launch of Audible Captions represents a way for the company to provide a similar—yet poorer quality—product to its costumer without taking a license.

In the seminal fair use case Sony v. Universal, the Supreme Court discusses the fourth factor and asserts that in order for a noncommercial use to be disqualified as fair, there must be a showing that the use would be harmful and adversely affect the potential market for the copyrighted work. Justice Stevens explains:

Actual present harm need not be shown; such a requirement would leave the copyright holder with no defense against predictable damage. Nor is it necessary to show with certainty that future harm will result. What is necessary is a showing by a preponderance of the evidence that some meaningful likelihood of future harm exists.

And so even in the unlikely event that a court were to find Audible’s service to be a noncommercial use, an existing market for the publishers’ works and the licenses already entered into for the Immersion Reading service surely satisfy the test for future harm.

Furthermore, ebooks and other cross-format offerings are readily available from authors and publishers, and massive amounts of research, time, and money go into creating the best user experience. Not only would Audible Captions strip copyright owners and creators of deserved revenue, but it would deprive them of the ability to control the look and feel of their works in the digital word. Audible Captions would undermine this already vibrant digital book market by offering an inferior substitute outside of the creative control of those who actually care about its presentation and consumption.

With a readily available substitute—even an inferior one—legitimate ebooks and other cross-format services will be devalued and fewer resources will be reinvested in their development. Publishers will lose, authors will lose, and perhaps most importantly, consumers and the public will lose if this market is compromised.

Conclusion

Despite talk of “a mission that transcends financial success,” it is crucial to recognize that Audible (and ultimately Amazon) is the only one that will benefit from the introduction of the Audible Captions service. If serving those in need of literacy tools was the true objective, more attention should be paid to developing technology that doesn’t generate erroneous and confusing text. At a time when the boundaries of fair use seem to be spreading in every direction, the unauthorized for-profit appropriation of entire works of creative expression cannot be part of the expansion.

Categories
Copyright

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

a remote pointed at a TV screen showing a sports gameOn 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.

Categories
Copyright

New CPIP Policy Brief: Open-Access Mandates and the Seductively False Promise of “Free”

the word "copyright" typed on a typewriterCPIP has published a new policy brief entitled Open-Access Mandates and the Seductively False Promise of “Free.” The brief, written by CPIP Legal Fellow Bhamati Viswanathan and CPIP Director of Academic Programs & Senior Scholar Adam Mossoff, exposes the lack of evidence or justification for the proliferating legal mandates by federal agencies that coerce authors and publishers to make their scholarly articles available for free to the world.

The Introduction to the policy brief is copied below:

Introduction

Federal agencies are increasingly mandating or proposing free public access for copyrighted works that report on federally-funded research. These “open-access mandates” compel scholars and researchers to make their articles or other writings freely available to billions of people around the world. Furthermore, many of the mandates also allow the public to modify these copyrighted works without the authors’ consent. Countless authors and publishers must comply with this legal mandate of “free.” Federal agencies—such as the Department of Education, the National Institutes of Health, and the Department of Energy—disburse billions annually in research grants. As a result, open-access mandates encompass millions of published articles, test-related materials (including those relating to standardized tests and testing services), and even computer software source code.

Open-access mandates have the potential to significantly harm the publishing industry. In 2015, the American publishing sector generated $27.78 billion in net revenue, representing 2.71 billion published works in electronic and print formats. This includes over 500,000 works in higher education, as well as learning materials for primary and secondary education. Works of scholarship, such as scientific research, also account for a significant share of revenue-generating materials. Unfortunately, open-access mandates are a direct threat to the business model that enables the multi-billion dollar market in scholarly and educational publishing to thrive.

Open-access mandates require publishers to place their works in government-operated repositories that are openly accessible and free of charge to users. But publishers typically invest hundreds of millions of dollars in building and supporting their own innovative and sophisticated systems for delivering copyrighted works to the public. Open-access mandates frustrate these efforts, effectively undermining publishers’ proven business models. Further, they force publishers to compete with government-run systems that need not be efficient, advanced, or profitable. By inserting the government as a competitor to private actors in the publishing sector, open-access mandates undermine publishers’ incentives to invest in both copyrighted works and effective systems for disseminating those works.

Open-access mandates also strike at the heart of copyright law by depriving publishers of their right to own and commercialize their copyrighted works as they see fit. U.S. copyright law secures to copyright owners fundamental property rights in their works; these rights cannot be eviscerated by administrative fiat. By forcing publishers to forfeit their rights to commercialize their copyrighted works, open-access mandates in works that report on federally-funded research are incompatible with fundamental principles of copyright law.

The publishing industry is built upon a business model that is proven, realistic, and robust. Moreover, the industry is constantly investing in innovation and improvement of its products and services. Proponents of open-access mandates seek to replace this model with an untested set of systemic changes. Yet they have not offered any evidence that the open-access model is viable and sustainable. Barring such evidence, open-access mandates should not be adopted.

Open-access mandates should be rejected as a prime example of regulatory overreach. In this paper, we address four reasons why this is the case:

  • Open-access mandates undercut publishers’ ability to invest in producing and distributing copyrighted works.
  • Open-access mandates contradict basic principles of copyright law.
  • Open-access mandates are the classic example of a solution in search of a problem: there is no evidence of a systemic market failure in scholarly publishing requiring a massive regulatory intervention.
  • Open-access mandates are based on untenable economic models.

We begin, however, by noting that while open-access mandates raise serious legal, policy, and economic concerns, the open-access model itself is unobjectionable when done on a voluntary basis.

To read the policy brief, please click here.