Ralph Oman – UA LAW IP

This post first appeared on Law360.

U.S. Supreme Court building You might think that a copyright battle waged between tech behemoths Google LLC and Oracle America Inc. about computer code has little to do with the concerns of songwriters, authors, photographers, graphic artists, photo journalists and filmmakers. You would be wrong. These groups all filed amicus briefs with the U.S. Supreme Court in Google v. Oracle, argued on Wednesday Oct. 7.

Google v. Oracle is a long-running copyright dispute in which Google admits that, pressed for time, and wanting to compete with Oracle, it copied more than 11,000 lines of Oracle’s Java software code, as well as the organizational structure of the software program.

In doing so, Google avoided the research and development costs of authorship and even the licensing obligations to make its products interoperate with other Java products those using the code legally took on. Google then began competing with Oracle — earning billions of dollars in revenue using the code and structure it had copied.[1]

Google claims that either the portions of the code it took were not copyrightable or that Google’s use is a fair use.[2] It and its amici — many of whom would prefer reduced intellectual property protections for software to fuel their business models — deploy terms like “permissionless innovation” and “efficient infringement” as a public relations strategy.

However, the Copyright Act is clear that software is copyrightable as a literary work — with no carveouts for particular types of code — and that fair use is a defense to copyright infringement intended to excuse limited uses of works, especially for noncommercial purposes, where the use does not compete with the original work.[3]

That is why Google lost in the U.S. Court of Appeals for the Federal Circuit, where U.S. Circuit Judge Kathleen O’Malley opined “[t]here is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform.”

The First Transformative Use Case at the Supreme Court in a Generation

The Supreme Court has not revisited the transformative use test articulated in Campbell v. Acuff-Rose Music Inc. in 26 years. That case added a new gloss on the first fair use factor — the purpose or nature of the use — courts consider when analyzing a fair use defense.

Artist advocates believe that some lower courts have improperly expanded transformative use over time so that it now includes uses that should be licensed, resulting in losses in income to creators.

Today it is not unusual for defendants to assert arguments that a given use is transformative even if it does not add new expression, meaning or purpose to a work, as Campbell required. It is common to hear policy arguments used to justify the need to copy the creative work of another for the sake of efficiency, or because it will reduce the cost of a product. Notable copyright scholars have even observed that transformative use is becoming a conclusory label that means all things to all people.[4]

Although cloaked in terminology related to software code, all of the familiar transformative use debates were present in Wednesday’s oral arguments in Google v. Oracle.

Google’s counsel, Thomas Goldstein, repeatedly resorted to the public policy arguments of efficiency and cost that rankle artists. At various points Goldstein was questioned by Chief Justice John Roberts and Justices Clarence Thomas, Elena Kagan, Neil Gorsuch and Brett Kavanaugh regarding why Oracle should be penalized for developing a “particularly elegant or efficient or successful or highly adopted solution in the marketplace.”

Goldstein ultimately replied that it would “upend the world” if later competitors were unable to copy popular computer code that programmers had become accustomed to using and “make the creation of innovative computer programs less efficient.”[5]

Google likewise argued that its use of Oracle’s code was transformative because it used the code on a mobile platform rather than a desktop. This argument was refuted by Deputy Solicitor General Malcolm Stewart, who noted that Google copied the portions of Oracle’s code that were used in the smart phone environment, so it did not transform anything.

Moreover, for app developers to have confidence that their programs would trigger the same functionality they had triggered in Java previously, the code had to perform exactly the same function it had always performed.

Hence, Google has not and could not do anything transformative in that sense either. To analogize to a motion picture that has only been released in theaters, he explained if one were to obtain a print of that film and instead stream it on a digital platform, no court would excuse that as a transformative fair use.[6]

Why the Standard of Review Matters

What might seem like an arcane civil procedure dispute over the proper standard of review for a fair use decision may well be the most important issue for artists in Google v. Oracle because it could determine whether cases in which fair use is asserted can be decided by a judge as a matter of law or instead require a trial and determination by a jury.

Google, which has routinely requested that fair use be decided by courts as a matter of law, has raised an argument through its amici that fair use is a question that must always go to the jury.

To put into perspective what this would mean for artists: Because copyright is a body of federal law that preempts state law, it must be tried in federal courts. Most individuals and small businesses cannot afford to bring or defend against even simple infringement actions in federal court. The American Intellectual Property Law Association has estimated that the mean cost of fully litigating a copyright infringement lawsuit is $397,000. Adding a jury trial requirement to these already astronomical costs would put justice ever further out of reach for the majority of the creative community.

Requiring a jury trial on fair use is outside the norm. As counsel for Oracle Joshua Rosenkranz noted, “Professor [Barton] Beebe has identified over 100 fair use cases decided by courts on summary judgment in a 30 year time span. Google could identify only five cases that went to a jury in a similar 30 year span.”[7]

Additionally, fair use is a defense on which both the public and creators depend and that requires stability and predictability so that individuals may make legal and commercial decisions with some certainty that they are not exposing themselves to undue risk. Google often makes these very arguments itself. To leave fair use determinations wholly to juries would undermine that stability and make innovation more dangerous and licensing more challenging.

What Artists Are Watching

Some amicus briefs filed by artist advocates invited the court to take this opportunity to clarify and rein in what they view are overly expansive fair use decisions since Campbell.[8]

Others express worry that

Google has used its unprecedented online footprint to dictate the terms of the market for creative works. By tying together a set of limited exceptions and exclusions within the U.S. Copyright Act and analogous laws in other countries, and then advocating for the radical expansion of those exceptions, Google has amplified its own market power to the great detriment of copyright owners.The more amorphous and unreasonably expansive the analysis and application of the fair use doctrine, the harder it becomes to establish the value of the copyrighted work during licensing negotiations that are the lifeblood of the creative ecosystem.[9]

Dale Cendali, co-counsel for Oracle, is optimistic after Wednesday’s argument and wrote to me in an email:

We are hoping that the Court will uphold the copyrightability of software and protect the incentive to create that the Constitution provides to all creators — big and small. We also are hoping the Court will agree it is fundamentally not fair use to use a work for the same purpose as the original for commercial gain. Moreover, fair use requires a complicated legal analysis that makes it suited to determination by a court as a matter of law — as has been the history of deciding fair use on summary judgment — as opposed to the often unpredictable and frequently unaffordable process of a jury trial.

Conclusion

Artists have much reason for optimism. The weight of the law and the diversity of amici arrayed against Google’s view of copyright is mighty. Beyond the wide variety of independent artists groups mentioned, amici aligned with Oracle also included:

The U.S. government, which has aligned with Oracle under the administrations of both former President Barack Obama and President Donald Trump;

Members of Congress who enacted the provisions of law in question, confirming that they intended to fully protect software without any carveouts or loopholes and that subsequent Congresses have only strengthened those protections;[10]

A member of Commission on New Technological Uses of Copyrighted Works, or CONTU, the special commission convened by Congress to advise it in the late 1970s on whether and how to protect software — confirming that software is protectable as a literary work and that CONTU considered and rejected the arguments Google raises in this litigation;[11]

The former Register of Copyrights Ralph Oman, who served during the time period that protections for software were enacted by Congress and whose role was to advise Congress on copyright matters as it drafted and implemented legislation — noting that Google’s arguments “fly in the face of long-standing principles of copyright law codified in the Copyright Act, which Congress extended to software in 1980 when it amended the Copyright Act explicitly to encompass computer programs”;[12] and

A variety of software and technology companies that depend on copyright protection to facilitate their participation in standards development as well as startup investment and innovation.

There is reason for optimism for all innovators and creators, as Rosenkranz summed up for the court:

The software industry rose to world dominance since the 1980s because of copyright protection, not unlicensed copying. And … the sky hasn’t fallen. [The] six years since the court of appeals’ first decision have brought new bursts of innovation and interoperability. In that time frame, we’ve seen the explosion of interoperability, cloud computing, 5G, machine learning, and autonomous vehicles.

Cases like Google v. Oracle illustrate how important copyright protections are to all authors in safeguarding the excruciating investment they make in taking their work from “the passable to the masterful.”[13]

[1] Brief of Respondent Oracle America Inc., Google v. Oracle, https://www.supremecourt.gov/DocketPDF/18/18-956/132891/20200212180251262_200208a%20Resp%20Brief%20for%20efiling.pdf.

[2] Brief of Petitioner Google LLC, https://www.supremecourt.gov/DocketPDF/18/18-956/127663/20200106172508533_18-956%20ts.pdf.

[3] 17 U.S.C. section 107.

[4] Brief of Amici Curiae Ten Creators’ Rights Organizations In Support of Respondent (Ten Creators Brief), https://www.supremecourt.gov/DocketPDF/18/18-956/133394/20200219112343394_18-956%20Amici%20Curiae.pdf.

[5] Transcript of Oral Argument, https://www.supremecourt.gov/oral_arguments/argument_transcripts/2020/18-956_kifl.pdf.

[6] Id.

[7] Id.

[8] Ten Creators Brief.

[9] Brief of Amici Curiae Helienne Lindvall, David Lowery, Blake Morgan and the Songwriters Guild of America in Support of Respondent, https://www.supremecourt.gov/DocketPDF/18/18-956/133298/20200218155210566_18-956%20bsac%20Helienne%20Lindvall%20et%20al–PDFA.pdf.

[10] Brief of Former Congressmen as Amici Curiae in Support of Respondent, https://www.supremecourt.gov/DocketPDF/18/18-956/133486/20200219145736673_18-956%20bsac%20Former%20Congressmen.pdf.

[11] Brief of Amicus Curiae Professor and Former CONTU Member Arthur R. Miller In Support of Respondent, https://www.supremecourt.gov/DocketPDF/18/18-956/133407/20200219120149951_18-956bsacProfessorAndFormerContuMemberArthurRMiller.pdf.

[12] Brief Amicus Curiae of Ralph Oman, https://www.supremecourt.gov/DocketPDF/18/18-956/133418/20200219122526620_2020-02-19%20No.%2018-956%20Oman%20amicus%20brief%20supporting%20respondent.pdf.

[13] Joshua Rosenkranz, counsel to Oracle in closing to the court “who will invest the excrutiating time it takes to refine code from the passable to the masterful if all of it can be stolen?”

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.

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