Tag: U.S. Copyright Office

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Copyright Infringement Journalism

Trump Interview Lawsuit Exposes Uncertainty in a Corner of Copyright Law

Will Donald Trump’s lawsuit against Bob Woodward and publisher Simon & Schuster[1] finally resolve the question of who owns the copyright over interviews? While the complaint has other challenges, it calls out a surprisingly muddled and unresolved area of copyright law.

One might assume that the copyright ownership of interviews is a settled question. But two major questions have never been resolved:

    1. Are interviewee’s responses to an interviewer’s questions copyrightable?
    2. If they are, then who owns that copyright?

C-IP2 2022-2023 Edison Fellow Mary Catherine Amerine presciently identified and analyzed these issues in a 2017 article in the Marquette Intellectual Property Law Review.[2] We relied on her article and current expertise in producing this blog post.

Courts were considering the first question as early as the 1960s, when the estate of Ernest Hemingway claimed that Papa Hemingway, a book that included lengthy quotes from conversations between Hemingway and an interviewer, infringed the estate’s copyright over the interviews themselves.[3] The court ruled on an implied license theory and thus dodged the copyrightability of Hemingway’s conversational statement as captured in an audio recording. In dicta, the court speculated that an interviewee would need to make some clear statement bracketing parts of their extemporaneous responses to an interviewer’s questions “to mark off the utterance . . . from the ordinary stream of speech, . . . to adopt it as a unique statement and that he wished to exercise control over its publication.”[4]

A decade later, a different court employed different reasoning to rule against Jerry Falwell’s copyright infringement claims for republication of interviews in Penthouse Magazine.[5] Whereas the Hemingway dicta suggests that copyrightability turns on an objective manifestation by the interviewee that a particular oral statement has the requisite authorial intent and thus is not mere extemporizing, the Falwell holding turns on whether the content of the particular oral statement is “concrete” enough to indicate authorial intent.[6] This holding then curiously (albeit perhaps unintentionally) imports patent law’s exclusion of “abstract ideas” from patent eligibility into copyright law: “However different or unique plaintiff’s thoughts or opinions may be, the expression of those opinions or thoughts is too general and abstract to rise to the level of a literary or intellectual creation . . . .”[7]

Courts have followed this reasoning ever since, distinguishing off-the-cuff extemporizing typical of unrehearsed oral responses to media questions from the sort of carefully planned oral statements of executives of publicly traded companies on analysts’ earnings calls.[8] At the same time, some courts have upheld copyright in the interviewer for interview quotes as a compilation (which avoids ownership of individual quotations).[9]

While the exact contours of whether there is copyright in any particular interview source material are still not clear, the question of who holds that copyright, should it exist, is even less certain. Trump’s Complaint requests a declaratory judgment for his ownership of the entirety of the interview’s sound recordings,[10] audiobook, and all derivative works, or, in the alternative, “copyright in his responses . . . . ”[11] Trump’s ownership of the entire copyright in the interviews would be unprecedented; no court has held that an interviewee could own the copyright over an entire interview. But the question of ownership of the copyright to an interview—in whole or in part—turns on three other questions:

    1. Can the interviewer seek to claim copyright of all contents of the interview on the theory that they directed and recorded the interview?
    2. Can neither party own copyright to the other’s statements because they did not create or make them, and hence each owns only their own contribution (“divided copyright”)?
    3. Should the entirety be viewed as a work of joint authorship by the interviewer and interviewee?

The court in Suid v. Newsweek Magazine, addressing a reporter’s attempt to claim the entirety of copyright in interviews he conducted, adopted “B” and divided copyright: “The author of a factual work may not, without an assignment of copyright, claim copyright in statements made by others and reported in the work because the author may not claim originality as to those statements.”[12] By contrast, the court in Foundation for Lost Boys v. Alcon Entertainment, LLC was inclined to adopt “C” when it held that interviewee plaintiffs had pled facts sufficient to support a finding of joint authorship with interviewer defendants. Ruling on defendants’ motion to dismiss, the court rejected the argument that plaintiffs’ interview responses were not copyrightable, as telling “personal stories in response to questions designed to elicit material” likely rose to the required level of creativity. Further, the court held that “[T]he interplays between prompts and responses in the Interviews necessarily merged the respective contributions of the [Plaintiffs and interviewers] into inseparable parts of a whole,” even though the refugees had not specifically asserted that they had intended to create a joint work.[13] However, the case settled, leaving the interview copyright ownership question unanswered.

A final wrinkle in interview copyright cases arises when the party asserting copyright does not have physical custody of the interview materials and so cannot register the copyright with the U.S Copyright Office. Parties in similar circumstances have attempted to skirt this issue by positioning their claims as declaratory judgment actions rather than directly claiming infringement, as copyright registration is a requirement for filing a copyright infringement lawsuit. These declaratory judgment actions have generally requested that the court grant an injunction requiring defendants to provide copies of the work in question to allow the plaintiffs to register their copyright. So far, courts have been divided on whether this strategy is a permissible circumvention of the copyright registration requirement.

In Johnson v. Magnolia Pictures LLC, the court granted a motion to dismiss by a producer who created a movie about comedian Gilda Radner based on recorded interviews found in an attic. The court ruled that a declaratory judgment is not an independent cause of action that could survive without the underlying copyright infringement claim, which was itself dismissed for lack of copyright registration.[14] Similarly, in Whistleblower Productions, LLC v. St8cked Media LLC, the court dismissed a copyright infringement case because even as plaintiff claiming ownership of the interview footage used to make a documentary, they did not possess the footage and hence had been unable to register the copyrights.[15] But in Lost Boys, the Sudanese refugees case, the court stated that if the refugees proved facts sufficient to show copyright infringement in a trial on the merits, then they would be entitled to an injunction compelling defendants to turn over the interview materials needed for the plaintiffs to register the copyrights.[16]

Trump’s lawsuit faces a similar registration challenge: the Complaint conspicuously fails to plead that Trump has a copyright registration. According to Trump’s attorney, he was unable to register the copyright because he does not have the interview tapes.[17] Thus, similar to the cases above, he does not plead copyright infringement directly, but instead seeks a declaratory judgment that he owns the interview copyright, in whole or in part. However, distinct from the above cases, Trump does not currently seek an injunction to obtain the interview materials copyright registration. Further, because Trump has filed in the U.S. District Court for the Northern District of Florida, where no local or circuit decisions bind the court on these issues, it is unclear whether the court will allow the suit to proceed as an action for declaratory judgment, or whether the lack of copyright registration will be fatal.

If Trump’s suit survives the likely motion to dismiss for lack of copyright registration, then the court would still need to decide whether to find no copyright, divided copyright, sole copyright owned by either Trump or Woodward (or Simon & Schuster), or joint authorship. Trump has already sought to reject the latter, pleading in the Complaint that “President Trump never sought to create a work of joint authorship, and in the hours of the Interviews, there is neither allusion to nor confirmation of such.”[18] The Lost Boys decision indicates that this lack of intent does not necessarily preclude joint authorship, as interview questions and responses may be “inseparable or interdependent parts” that create a “unitary whole.”[19] However, this is the only case that has directly addressed the possibility of joint authorship of an interview in these circumstances. It remains to be seen whether the court would find this reasoning persuasive or would return to earlier decisions to hold either that interview responses cannot be copyrighted at all, or that interview questions and responses are protected by two separate copyrights owned by the interviewer and interviewee, respectively.[20]

Regardless of the outcome of Trump’s case, this high-profile lawsuit has made it impossible to ignore the unsettled nature of a copyright question that has been long overlooked.

[1] Trump v. Simon & Schuster, Inc., Case No. 3:23-cv-02333-RV-ZCB (Dkt. 1, Complaint, Jan. 30, 2023).

[2] 21 Marq. Intell. Prop. Rev. 159 (2017) available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2878800. Drafts of the article won both AIPLA’s Robert C. Watson National Writing Award and the Virginia State Bar Intellectual Property Section’s Student Writing Competition. Amerine is currently an associate at Shearman & Sterling.

[3] Estate of Hemingway v. Random House, Inc., 244 N.E.2d 250 (N.Y. 1968). While this and the Falwell case discussed below were brought under common-law copyright, the courts’ analyses are still relevant to the copyright of interviews under the Copyright Act of 1976.

[4] Id. at 256.

[5] Falwell v. Penthouse Intern., Ltd., 521 F. Supp. 1204 (W.D. Va. 1981).

[6] “There is nothing concrete which distinguishes his particular expression of his ideas from the ordinary.” Id. at 1208.

[7] Id. Notwithstanding, the court also relied in part on the reasoning of the Hemingway dicta: “the actual dialogue, including the unprepared responses of plaintiff, was spontaneous and proceeded in a question and answer format. There is no defined segregation, either by design or by implication of any of plaintiff’s expressions of his thoughts and opinions on the subjects discussed which would aid in identifying plaintiff’s purported copyrighted material.”  Id.

[8] Compare Taggart v. WMAQ Channel 5 Chicago, No. 00-4205-GPM, 2000 WL 1923322 at *5 (S.D.

Ill. Oct. 30, 2000) (“comments during the interview were unprepared and spontaneous responses,” and therefore “simply do not rise to the level of a literary or intellectual creation enjoys the protection of the copyright law.”) with Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P., 808 F. Supp. 2d 634, 638 (S.D.N.Y. 2011) (oral statements of executives “possess the requisite creativity to qualify for copyright protection.”).

[9] Quinto v. Legal Times of Washington, Inc., 506 F. Supp. 554 (D.D.C. 1981).

[10] The question of sound recordings adds a layer of complexity beyond the scope of this post. It will be addressed in a subsequent post.

[11] Trump v. Simon & Schuster, supra Note 1 at ¶¶ 64-65.

[12] Suid v. Newsweek Mag., 503 F. Supp. 146, 147 (D.D.C. 1980).

[13] Foundation for Lost Boys v. Alcon Ent., LLC,  No. 1:15-CV-00509-LMM, 2016 WL 4394486 at *2-4 (N.D. Georgia Mar. 22, 2016).

[14] Johnson v. Magnolia Pictures LLC, No. 18 CV 9337, 2019 WL 4412483, at * 1-2 (S.D.N.Y. Sept. 16, 2019) (reconsideration denied, Johnson v. Magnolia Pictures LLC, No. 18 CV 9337, 2019 WL 5569610 (Oct. 29, 2019). The interviews formed the basis of the film Love, Gilda.

[15] Whistleblower Prods., LLC v. St8cked Media LLC, No. 18-CV-5258, 2019 WL 3082482 (E.D.N.Y. July 15, 2019)

[16] Found. for Lost Boys and Girls of Sudan, Inc. et al v. Alcon Ent. at *9.

[17] Kyle Jahner, Trump’s Woodward Lawsuit Called Flawed, Intriguing by IP Lawyers, Bloomberg News, Feb. 3, 2023, available at https://news.bloomberglaw.com/ip-law/trumps-woodward-lawsuit-called-flawed-intriguing-by-ip-lawyers#:~:text=Trump’s%20Woodward%20Lawsuit%20Called%20Flawed%2C%20Intriguing%20by%20IP%20Lawyers,-By%20Kyle%20Jahner&text=Former%20President%20Donald%20Trump’s%20copyright,property%20rights%20over%20recorded%20interviews.

[18] Trump v. Simon & Schuster, supra Note 1 at ¶ 47.

[19] Found. for Lost Boys and Girls of Sudan, Inc. et al v. Alcon Ent. at *8.

[20] A fourth alternative, not yet adopted by courts but proposed by Amerine in her article, is that the journalist own copyright over the entire interview as the “mastermind” who controls the project and can be considered the “author” under the Ninth Circuit’s authorship analysis in Aalmuhammed v. Lee, 202 F.3d 1227 (9th Cir. 2000). Supra note 2 at 182-184.

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Copyright

House Judiciary Committee Hearing Reacts to Copyright Office Report on Efficacy of Section 512

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 late September, the House Judiciary Committee held a hearing entitled Copyright and the Internet in 2020: Reactions to the Copyright Office’s Report on the Efficacy of 17 U.S.C. 512 After Two Decades. As Chairman Jerrold Nadler (D-NY) explained, the hearing sought “perspectives on whether Section 512 is working efficiently and effectively for this new internet landscape.” The hearing was guided by the U.S. Copyright Office’s Section 512 Report, released in May, which concluded that the operation of the Section 512 safe harbor system disfavors copyright owners—contrary to “Congress’ original intended balance.”

The witnesses included: Jeffrey Sedlik, President & CEO, PLUS Coalition; Meredith Rose, Senior Policy Counsel, Public Knowledge; Morgan Grace Kibby, Singer and Songwriter; Jonathan Band, Counsel, Library Copyright Alliance; Matthew Schruers, President, Computer & Communications Industry Association; and Terrica Carrington, Vice President, Legal Policy and Copyright Counsel, Copyright Alliance.

Enacted in 1998 as part of the Digital Millennium Copyright Act (DMCA), Section 512 establishes a system for copyright owners and online service providers (OSPs) to address online infringement, including a “safe harbor” that limits liability for compliant OSPs. To qualify for safe harbor protection, an OSP must fulfill certain requirements, generally consisting of implementing measures to expeditiously address online copyright infringement. Congress sought to create a balance between two goals in enacting Section 512: (1) providing important legal certainty for OSPs so that the internet ecosystem can flourish without the threat of the potentially devastating economic impact of liability for copyright infringement as a result of user activity, and (2) protecting the legitimate interests of authors and other rights owners against the threat of rampant, low-barrier online infringement.

The Copyright Office’s Report determined that the balance Congress originally sought is now “askew.” It found that “despite the advances in legitimate content options and delivery systems, and despite the millions of takedown notices submitted on a daily basis, the scale of online copyright infringement and the lack of effectiveness of Section 512 notices to address that situation, remain significant problems.” The Report did not recommend any wholesale changes to Section 512, but instead identified certain areas that Congress could fine-tune in order to better balance the rights and responsibilities of OSPs and copyright owners. These include eligibility qualifications for the service provider safe harbors, repeat infringer policies, knowledge requirement standards, specificity within takedown notices, non-standard notice requirements, subpoenas, and injunctions.

At the hearing, the six witnesses reacted to the Copyright Office’s Report in dramatically different fashions. Representatives of OSPs disagreed with the Report’s conclusions, testifying that Section 512 is working as Congress intended. Mr. Band from the Library Copyright Alliance referred to Section 512 as a “shining example of enlightened legislation for the public good” that is responsible for the “golden age of content creation and distribution.” Mr. Schruers from the Computer & Communications Industry Association criticized the Report for inadequately reflecting the interests of users and “conspicuously” overlooking the problem of Section 512 misuse. Ms. Rose from Public Knowledge stated “the Office’s analysis performed a familiar sleight-of-hand by presenting user interests as coextensive with those of platforms, effectively erasing free speech concerns from its analysis.”

Representatives of content creators painted an entirely different picture of Section 512’s efficacy. They applauded the Copyright Office for calling attention to areas of imbalance related to Section 512 and to how overly expansive or narrow interpretations of the statute have aided in skewing the balance Congress intended. Mr. Sedlik, a photographer with over 35 years of professional experience and President & CEO of the PLUS Coalition, described how service providers take advantage of his and others’ copyrighted works while hiding behind Section 512’s safe harbors. He explained that, like many other copyright owners, he must spend an exorbitant amount of time searching for infringing materials online and sending takedown notices instead of creating new works.

Ms. Kibby, a singer and songwriter, testified that Section 512 is “undermining creativity, and more alarmingly, quietly undercutting our next generation of artists. It is jeopardizing livelihoods for working class musicians, obliterating healthy monetary velocity in our creative community. It is rewarding unscrupulous services that deal in the unauthorized trade and use of our works. It is fundamentally sabotaging the legitimate online marketplace that we all rely on and that Congress envisioned.” Responding to the argument that notice-and-takedown results in censorship of user-generated content, Ms. Kibby said that Section 512’s “stripping creators of their fundamental rights, their livelihood, and ultimately their creative contributions is the real censorship.”

Ms. Carrington from the Copyright Alliance identified three main problems with Section 512: (1) the ineffective notice-and-takedown process, (2) the effective elimination of the red flag knowledge standard, and (3) ineffective repeat infringer policies. She recommended adjusting the statute to clarify the difference between actual and red flag knowledge, enacting the Copyright Alternative in Small-Claims Enforcement (CASE) Act, and transparently developing effective standard technical measures (STMs).

Members of the Committee recognized the need for reform. Chairman Nadler remarked that the sheer volume of takedown notices being sent does not seem like the hallmark of a system functioning as intended. Some Members first spoke about the importance of copyright law before questioning the panelists. For example, Representative Hank Johnson (D-GA) said “it’s crucial that these creators are able to rely on copyright law protections to make their living. This is even more true in an age where the click of a button can plagiarize a lifetime of work.”

It was heartening to hear the Representatives’ positive response to the concerns of small, individual creators whose livelihoods depend on the commercial viability of their works. It was clear that the Committee is seriously considering the recommendations in the Copyright Office Report and looking for a way to rebalance Section 512 so that it respects what Congress originally intended—a system that respects the rights of authors and artists who face widespread infringement of their rights in the online environment.

Categories
Copyright

Congratulations to Shira Perlmutter: 14th United States Register of Copyrights

the word "copyright" typed on a typewriterOn September 21, 2020, Librarian of Congress Dr. Carla Hayden announced that she has appointed Shira Perlmutter Register of Copyrights and Director of the United States Copyright Office.

Ms. Perlmutter has a deep knowledge of copyright law and policy, as well as an appreciation for the nuance with which domestic and international copyright issues must be administered to ensure a flourishing of creativity and dissemination of knowledge to benefit the public. Ms. Perlmutter’s experience as a policy maker in the various government roles she has occupied—most recently as chief policy officer and director of international affairs at the United States Patent and Trademark Office (USPTO), but also in earlier years as Associate Register for Policy and International Affairs at the United States Copyright Office—means she is already poised to consider and take on board the many varying inputs of stakeholders, user communities, and international partners and to advise Congress and other leaders on how to best manage priorities for the public good.

Significantly, Ms. Perlmutter is also a scholar. She taught copyright, trademark, and international intellectual policy at The Catholic University of America’s Columbus School of Law, has authored numerous academic articles, and co-authored a leading international IP law textbook. Her business experience, at law firms and in the private sector, will bring a practical perspective to compliment her public service and her scholarship.

As we celebrate the 150th anniversary of the Copyright Office, the Center for the Protection of Intellectual Property congratulates incoming Register Perlmutter on her appointment as Register of Copyrights and Director of the United States Copyright Office; thanks Librarian of Congress Dr. Hayden for conducting a thoughtful and thorough search; and thanks Acting Register Maria Strong for her dedicated service not only meeting the needs of users of the office, but also bringing to fruition numerous major initiatives, particularly during these challenging times.

Categories
Copyright

CPIP’s Sandra Aistars Joins Artomatic Panel on Copyright Protection for Visual Artists

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

the word "copyright" written on a typewriterBy Liz Velander

As part of its ongoing series about the copyright licensing process, Artomatic hosted a virtual panel for visual artists last week to discuss how to protect their creative works. The panel focused on explaining key concepts of copyright law pertinent to visual artists and sharing resources that they can use to learn more about the basics of copyright protection. It also touched on common pitfalls among visual artists when it comes to protecting their creative works, including those that befall joint authors, and common misconceptions about fair use.

The panelists included CPIP Director of Copyright Research and Policy Sandra Aistars and Jaylen Johnson, Attorney Advisor at the U.S. Copyright Office, and it was moderated by Kim Tignor, Executive Director at the Institute for Intellectual Property & Social Justice.

Prof. Aistars explained that there are three important things visual artists should know about copyright law. First, the requirements for copyright protection. Copyright law protects original works of authorship that are fixed in a tangible medium. An “original” work means that it was created independently and not copied from somebody else. Prof. Aistars noted that “this doesn’t mean the work has to be absolutely novel—if you have two artists who independently create something that is substantially similar, without copying from each other, both of those works are protected by copyright.”

Prof. Aistars also clarified the distinction between ideas and expression, noting that copyright law only protects the expression of ideas, not the ideas themselves. Visual artists cannot “copyright the idea of painting a field of sunflowers,” but they can protect “the precise rendering of that work, the nuances of brushstroke, the layering of the paint on the canvas” because those are all elements of expression. A work must also be fixed in a tangible medium of expression, Prof. Aistars continued, which could include paper, canvas, or a digital medium. If a work meets all these elements, it is protected by copyright and the visual artist obtains a variety of exclusive rights that allow her to make a living from her creative pursuits.

The second important thing to know about copyright law, according to Prof. Aistars, is that copyright protection is automatic. A visual artist does not need to register a work with the Copyright Office to receive protection. Instead, copyright protection exists from the moment the artist sets a work down in a tangible medium of expression. However, Prof. Aistars noted that it is a good practice for visual artists to register their works with the Copyright Office. Registration gives copyright owners additional benefits and makes it easier for people to find the copyright owner to license her works.

Finally, Prof. Aistars explained that it is important to understand that a visual artist retains the copyright in a work when she sells a copy of it, even if it is the only copy she has ever created. Selling a copy does not transfer the underlying rights the artist enjoys as a copyright owner. Prof. Aistars pointed out that “you’re not transferring the rights to make copies of the work, print them up on t-shirts and postcards, and sell them on the internet to whoever buys the copy of your work—unless you enter into a separate agreement with that person.”

Ms. Johnson noted that the Copyright Office is an excellent resource for visual artists who want to learn more about copyright protection. As the primary agency in charge of administering copyright law, the Office advises Congress, facilitates rulemaking, assists in litigation efforts, serves on international delegations, and administers the nation’s registration and recordation system. In celebration of its 150th anniversary, the Office recently launched a new initiative called Engage Your Creativity that pulls together a variety of resources for creators. Ms. Johnson stated that the initiative is a great way to become familiar with the many resources available to the public through the Office’s website.

The panelists also identified common pitfalls visual artists encounter during the creative process. Many occur because artists are not sure what qualifies as fair use of a copyrighted work. Prof. Aistars explained that “fair use exists so artists can build and comment on existing works in their own work, and in so doing add to our cultural dialogue and engage with one another in artistic conversations.” She advised artists to treat fair use as the Golden Rule: “Think about the way you would feel if someone uses your work the way you’re proposing to use someone else’s work, and then be very honest.”

The courts have four factors that they evaluate together to determine whether a use is fair or not. Codified in Section 107 of the Copyright Act, the four factors are: (1) the purpose and character of the use, including whether such use is commercial or educational; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. However, since these factors are neither dispositive nor exhaustive, courts typically explore fair use claims in an open-ended, case-by-case manner. This is an area where artists run into trouble, Prof. Aistars explained, because “there are no bright lines. There’s not a set rule that you can use this much, but no more. Artists are trying to make the best decisions they can, and sometimes that isn’t the decision the court would’ve made.”

The panelists noted that another common pitfall arises with jointly created works. Under the Copyright Act, the authors of a joint work are co-owners of the copyright in a work. Each author can do whatever she wants with the work, as long as she accounts to the other. This is a problem when a collaborative relationship goes south, or if one author wants to use the work in a way that the other author disagrees with. Prof. Aistars advised visual artists to put an agreement in writing prior to starting a collaborative relationship.

Copyright law may seem like daunting subject to visual artists, but it can be easily understood with the right information. In closing, Ms. Johnson emphasized the importance of making resources accessible and engaging in public outreach because “copyright is for everybody.”

Categories
Copyright Legislation

Register of Copyrights Selection and Accountability Act is First Step Towards a Modern Copyright Office

U.S. Capitol buildingThe House Judiciary Committee today overwhelmingly approved the bipartisan Register of Copyrights Selection and Accountability Act by a vote of 27-1. Introduced last Thursday by Chairman Bob Goodlatte and Ranking Member John Conyers, Jr.—with the support of Senate Judiciary Committee Chairman Chuck Grassley, Ranking Member Dianne Feinstein, and Senator Patrick Leahy—the Act is the first legislative effort to follow a four-year review of U.S. Copyright law and aims to kick-start an overdue modernization of the United States Copyright Office (USCO).

Focusing on the selection process of the Register of Copyrights, the concise bill requires the Register to be nominated by the President of the United States and subject to confirmation by the U.S. Senate, rather than appointed and dismissed at the pleasure of the Librarian of Congress. Today’s markup saw the inclusion of an amendment that would create a panel—made up of the Speaker of the House, President Pro Tem of the Senate, House and Senate Majority and Minority Leaders, and the Librarian of Congress—tasked with submitting a list of three qualified nominees to the President, who would then nominate an individual subject to confirmation by the Senate. The bill reflects the need for greater stakeholder and Congressional input in the selection of a leader Congress looks to for expert advice and analysis on the copyright system, and it represents the first step in an unquestionably necessary Copyright Office modernization effort.

In 2013, the House Judiciary Committee began a comprehensive bipartisan review of the copyright system that included 20 hearings, testimony from over 100 witnesses, and a listening tour that invited input from copyright stakeholders across the country. According to the Committee, the goal of the review was “to determine whether the copyright laws are still working in the digital age to reward creativity and innovation.” In December 2016, the first policy proposal to come out of the review focused on Copyright Office modernization and stressed the need for information technology (IT) upgrades, the creation of advisory committees and a small claims system, and overall decision making autonomy.

The Copyright Office is currently part of the Library of Congress, a legislative government agency and the main research arm of the U.S. Congress. The Office’s budget and leadership are determined by the Library, which is able to make important decisions independent of any outside review or accountability. It’s a curious arrangement, different from most other federal agencies whose leadership is subject to the checks and balances of an executive nomination and Congressional confirmation process.

As former Registers of Copyrights Ralph Oman and Marybeth Peters point out in a recent letter to Congress, the Copyright Office’s residence in the Library of Congress is a largely the result of a historical accident from the late 19th century. In 1870, Librarian of Congress Ainsworth Rand Spofford convinced Congress that copies of works submitted for copyright registration should be deposited to the Library to help build its collection, and thus the Copyright Office came under the authority of the Library. But nearly 150 years later, the Library of Congress—due to its own unique mission and approach to copyright law—is not best positioned to oversee the operation of an agency in need of reform.

There’s no dispute that the Copyright Office is in need of a facelift. For years, the Office has been underfunded, understaffed, and undervalued, making growth and development with the digital age all but impossible. Before her unexpected ouster, Register Maria Pallante provided Congress with a Register’s Perspective on Copyright Review that included a detailed list of deficiencies within the Office in need of improvement. While Pallante is no longer leading the Copyright Office, her concerns were echoed by stakeholders during the review hearings and listening tour, and Congress has recognized the need to begin an extensive modernization effort.

The copyright system is vitally important to the U.S. economy. According to a 2016 report by the International Intellectual Property Alliance, core copyright industries contributed over $1.2 trillion to the U.S. GDP and employed more than 5.5 million U.S. workers. Despite unfounded claims that its role is “mundane” and leader inconsequential, the Copyright Office plays a central role in the copyright system by providing expert reports and advice to Congress on a variety of copyright-related issues. Section 701(b) of the Copyright Act charges the Register of Copyrights with a number of meaningful duties, and Congress regularly looks to the Register and the Office for input on the development of copyright law.

Making the Register a presidential appointee with the advice and consent of the Senate is necessary to ensure that all stakeholder concerns are addressed prior to confirmation and that the Register remains accountable to Congress. Since the unprecedented removal of Register Pallante in October, there is no permanent Register of Copyrights in place, and the current Librarian of Congress is taking a highly unusual internet survey-based approach to determine the qualities of the next Register. The direct line of communication to the USCO that Congress enjoyed in the past has been disrupted, and consequential decisions are being made with little accountability or regard for Congress’s important role in the process.

These troubling developments are evidence that the system needs to change, and it’s imperative the next Register be subject to the same processes used to select the leaders of equally important government agencies. Only when the value of the Copyright Office is recognized and its infrastructure and operations updated can the system begin to modernize and keep up with the creative culture it serves.

Categories
Copyright Theory

What Would Judge Gorsuch Mean for Fair Use?

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

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

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

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

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

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

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

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

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

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

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

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

Categories
Copyright

IP Scholars Explain Why We Shouldn’t Use SurveyMonkey to Select Our Next Register of Copyrights

Washington D.C. at nightIn a letter submitted to House Judiciary Committee today, nine IP scholars (organized by CPIP’s Sandra Aistars) express their support for the Committee’s proposal to modernize the Copyright Office. The letter identifies three major challenges facing the Copyright Office, including “(1) insufficient funds, staff, and infrastructure to efficiently perform its core functions; (2) operational impediments stemming from its integration with the Library of Congress; and (3) potential risk of constitutional challenges to its decision-making authority should the Office take on increased regulatory or adjudicatory responsibility.”

The IP scholars laud the Committee’s recommendation that the Office be led by a principal officer of the government, nominated and confirmed like other senior government officials. The scholars also express their concern with the Library’s highly-unusual method of using a SurveyMonkey questionnaire to identify the knowledge, skills, and abilities required to run the Copyright Office.

On December 16th, the newly-appointed Librarian solicited the public to “provide input to the Library of Congress on expertise needed by the Register of Copyrights.” The survey consists of the following three questions:

    1. What are the knowledge, skills, and abilities you believe are the most important for the Register of Copyrights?

 

    1. What should be the top three priorities for the Register of Copyrights?

 

  1. Are there other factors that should be considered?

The survey then provides an area to upload additional comments and assures that the feedback “will be reviewed and will inform development of knowledge, skills and abilities requirements for the position.”

While there may be benefits to soliciting public input on the knowledge, skills, and abilities a Register of Copyrights should embody, as the IP scholars’ letter points out, relying on a limited SurveyMonkey experiment discounts the guidance codified in Section 701(b) of the Copyright Act. Section 701(b) already lists the functions and duties of the Register of Copyrights, including:

(b) In addition to the functions and duties set out elsewhere in this chapter, the Register of Copyrights shall perform the following functions:

 

(1) Advise Congress on national and international issues relating to copyright, other matters arising under this title, and related matters.(2) Provide information and assistance to Federal departments and agencies and the Judiciary on national and international issues relating to copyright, other matters arising under this title, and related matters.

(3) Participate in meetings of international intergovernmental organizations and meetings with foreign government officials relating to copyright, other matters arising under this title, and related matters, including as a member of United States delegations as authorized by the appropriate Executive branch authority.

(4) Conduct studies and programs regarding copyright, other matters arising under this title, and related matters, the administration of the Copyright Office, or any function vested in the Copyright Office by law, including educational programs conducted cooperatively with foreign intellectual property offices and international intergovernmental organizations.

(5) Perform such other functions as Congress may direct, or as may be appropriate in furtherance of the functions and duties specifically set forth in this title.

Rather than crowd sourcing the job description, the Librarian should review the Copyright Act and consider candidates that would be best qualified to fulfill the explicit and established standards of 701(b).

By handing this over to anyone willing to fill out a SurveyMonkey form, the Library of Congress is politicizing a process that shouldn’t be politicized. The letter warns that “[w]hile it is often laudable to seek public input on important issues of policy, an online survey seeking input on job competencies from any internet user is an inefficient and inappropriate approach for developing selection criteria for this important role, particularly where such minimal background is provided to survey-takers and where there appears to be no mechanism to encourage constructive comments.”

As recently as April of last year, Fight for the Future incited an effort to spam the Copyright Office while it solicited comments regarding the DMCA notice and takedown process. Engaging in a campaign of misinformation, the advocacy group flooded the Office with automated “comments” that crippled the regulations.gov website during the last 48 hours of an important collection period. The Register’s selection process should not be handed over to Internet bullies and trolls.

The next Register of Copyrights will have an immediate and lasting effect on the administration of copyright laws, and the Library of Congress should respect long-standing norms as well as Congress’s instructions as embodied in the Copyright Act. The IP scholars’ letter reiterates that the statutory obligations of Section 701(b) require certain competencies of a Register of Copyrights and ensures that “the successful candidate can meet the management and leadership expectations attendant to a senior executive officer position in the federal government.” This is an important process that deserves more serious consideration than a SurveyMonkey poll.

Categories
Copyright Uncategorized

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

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

The Letter Embraces the Very Conflict It Claims to Reject

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

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

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

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

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

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

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

The Librarians Are Oblivious to a Broken System

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

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

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

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

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

It’s Time for Change at the Copyright Office

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

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

Categories
Copyright Licensing DOJ Uncategorized

Rejection of DOJ Consent Decree Interpretation is a Win for Songwriters

Cross-posted from the Mister Copyright blog.

sheet musicEarlier this month, a federal judge in the Southern District of New York issued an order rejecting the Department of Justice’s (DOJ) interpretation of a consent decree governing the way the performance rights organization Broadcast Music Inc. (BMI) licenses its songs. The ruling was in response to a DOJ statement that the consent decrees controlling BMI and ASCAP should be interpreted to include a “full-work” licensing agreement that would require any entity that controls part of a composition to offer a license for the whole composition. The implications of the DOJ’s evaluation would be disastrous for both artists and the organizations that represent them, and while the judge’s order is likely not the final say in the debate, it represents a strong endorsement of the rights of publishers and songwriters to control their creative works.

PROs and the Consent Decrees

Performance rights organizations (PROs) act as intermediaries between songwriters and parties who wish to perform their copyrighted works publicly. Pooling compositional copyrights and offering “blanket licenses” to users such as bars, stores, gyms, radio and television stations, and Internet music distributors, PROs facilitate access to millions of songs while eliminating the need for individualized negotiations and licensing agreements. PROs also collect royalties from their licensees and distribute them among their member songwriters, composers, and music publishers, providing a workable solution to an otherwise impossibly complex system of individual agreements.

ASCAP and BMI are governed by consent decree agreements that have been in place for over 75 years and were introduced by the Department of Justice to promote competition in the marketplace for musical works. Under the decrees, PROs are encouraged to compete with one another to recruit songwriters and must offer licenses to venues and users on equivalent terms. It’s a system intended to benefit both emerging, unknown songwriters and established artists in order to prevent any one PRO from leveraging undue market influence.

Full v. Fractional Licensing

But even with the support of PROs, complicated licensing issues arise when a musical composition has more than one author or rights owner. In 2014, the Antitrust Division of the DOJ initiated an inquiry into the effectiveness of the consent decrees, soliciting comments from various stakeholders on whether the decrees obligate ASCAP and BMI to offer licenses to an entire work when not all owners of the composition are members of the organization. “Full-work” licenses allow for a song to be licensed provided that one owner consents by way of membership in a PRO, regardless of how much of the composition that party owns or whether the co-owners have conflicting contractual agreements.

Default copyright law treats joint authors of a single work as tenants-in-common, with any co-owner retaining the right to grant a nonexclusive license to the entire work without the consent of other owners, so long as the licensor compensates the other co-owners. As this rule is strictly the default, co-owners are free to agree to alternate arrangements with regard to licensing the underlying work, including one in which an author may only offer a license to the partial interest it holds in the work. This type of agreement, known as “fractional” licensing, requires that a licensee obtain additional licenses from all other rights owners or the PROs representing them.

The comments received by the DOJ as part of its consent decree investigation showed conflicting views on the treatment of multi-owner works. Rightsholders claimed that PROs had never offered full licenses and urged the DOJ to add language to the decree that would confirm this understood feature of the agreement. Music users and licensees, by contrast, argued that full licensing was always part of the deal and also pressed the DOJ to amend the decree to reflect their opinion. These differing opinions were never addressed in past revisions of the decrees because most licensees would obtain blanket licenses from both BMI and ASCAP, which would then charge fees based on their respective market shares, accounting for songs to which they represented only a partial interest.

DOJ Gets it Wrong

With new licensees entering the market in the form of streaming internet services, the DOJ decided it was time to clarify this neglected, but important, part of the decrees. In a statement issued last month, the Department concluded that it would not be in the interest of the public to modify the decrees to permit fractional licensing, insisting that full-licensing was the intent of the decrees and would not upset the rights of co-authors. But despite positioning its statement as an interpretation of the existing decrees, the DOJ statement actually modified a decades-old industry standard while trampling on the rights of creators and rights owners.

Instead of explaining how full-licensing doesn’t violate copyright law, the statement focuses on the “immediate access” to works that would be threatened by fractional licensing. The DOJ repeatedly warns of the consequences of having to secure licenses from multiple owners or authors, claiming it will result in licensees “simply turning off the music.” But the statement seems to confuse the original intent of the decrees with the creation of a system that guarantees immediate access to any song a licensee might want to play. While licensing efficiency is important, respect for the rights of all those responsible for creating a work shouldn’t be discarded for a haphazard licensing mechanism.

The statement goes on to argue that fractional licensing would force licensees and music users to carefully track song ownership and rights information to avoid potential infringement, a process that would be nearly impossible due to the lack of a reliable source of ownership data. But as Register Pallante explains in her response to a request for the Copyright Office’s insight on the licensing of jointly-owned works, full-licensing would impose a much more extreme burden on PROs that would have to ascertain, song-by-song for millions of songs, whether they have the right to grant a full license. These logistical challenges would surely result in higher operational costs that would have to be recouped through higher commissions to PRO members.

In addition to logistical problems, Register Pallante warns of the legal complications that would inevitably result from a full-licensing scheme: “Such an approach would seemingly vitiate important principles of copyright law, interfere with creative collaborations among songwriters, negate private contracts, and impermissibly expand the reach of the consent decrees.”

Songwriters and PROs Strike Back

Not surprisingly, the songwriting community was outraged by the DOJ’s disregard for artists’ rights and criticized the statement for its betrayal of long-accepted and practical licensing mechanisms. Just weeks after the statement was issued, the Songwriters of North America (SONA) – an advocacy group founded by and made up of artists and composers – sued the DOJ, claiming the agency overstepped its authority and that its ruling violated the property rights of songwriters by potentially invalidating private contracts between co-authors and collaborators.

PROs also joined forces to fight the Justice Department’s interpretation of the consent decrees, with ASCAP pursuing legislative reform while BMI took legal action to challenge full-licensing in federal court. In a pre-motion letter to Judge Louis Stanton, BMI warns of the disastrous consequences of the DOJ’s interpretation and urges the court to determine that its consent decree allows for the long-standing industry practice of fractional licensing.

On September 16th, Judge Stanton issued an opinion and declaratory judgment unequivocally rejecting the Justice Department’s interpretation of BMI’s consent decree. The opinion makes clear that “nothing in the consent decree gives support to the Division’s views,” and that because infringements and remedies are not addressed, the decree “neither bars fractional licensing nor requires full-work licensing.”

The decision was celebrated by songwriters and PROs as a sensible and informed response to the DOJ’s misguided understanding of the decrees. But while Judge Stanton’s order is now the controlling interpretation of the BMI decree, the Justice Department may appeal the decision, and it’s likely that music licensees will push back with their own lawsuits and legislative efforts. Regardless of future developments, the unprecedented unified effort of PROs, mobilization of artist organizations such as SONA, and clear message by an informed federal court bode well for the protection of creators’ rights and the preservation of sound copyright law.

Categories
Copyright Copyright Licensing Copyright Theory Infringement Intellectual Property Theory Internet Reasonable Royalty Uncategorized

Despite What You Hear, Notice and Takedown is Failing Creators and Copyright Owners

cameraIn a recent op-ed in the LA Times, Professors Chris Sprigman and Mark Lemley praise the notice and takedown provisions of the Digital Millennium Copyright Act (DMCA) as “a bit of copyright law worth saving.” They argue that Section 512 of the DMCA continues to serve its purpose of balancing the rights of copyright owners and creators with those of Internet service providers (ISPs), while leaving both sides only “slightly disappointed.” Satisfying these two groups is indeed a difficult charge, but it’s simply disingenuous to suggest that creators and copyright owners are satisfied with a system so clearly in need of an overhaul.

As the Copyright Office embarks on its review of the DMCA, supporters and critics of the nearly twenty-year-old doctrine are weighing in on its effectiveness in addressing online infringement. Sprigman and Lemley claim that the “process has worked well for years,” and that the result of shifting more enforcement burden to ISPs “could be a broken Internet.” But for those creators and copyright owners who have their works resurface online just minutes after they are taken down, the Internet is already “broken.” The fact that piracy continues to intensify, despite incredible efforts to have infringing content taken down, shows that notice and takedown is largely ineffective.

As CPIP Senior Scholar Sean O’Connor testified before Congress, the notice and takedown system is not working for any of its intended beneficiaries. The constant game of whack-a-mole renders the system essentially futile for copyright owners and creators, and it creates significant burdens for ISPs that want to comply—especially small to mid-level companies that can’t afford compliance staff. Worse still, by shielding service providers from liability, the DMCA creates perverse incentives where there’s little downside to ignoring infringing content. In fact, reviewing content could lead to an ISP having knowledge of infringement and losing its safe harbor.

Now that the Copyright Office’s review is underway, it’s somewhat strange to see some supporters claim that all is well. But has anything actually changed since the Office announced its study?  Of course not. The whack-a-mole problem remains, and the knowledge standards are still interpreted broadly to disproportionately favor ISPs. When one side says the system is working and the other side says it’s broken, the truth is that the system is not working well for everyone. Sprigman and Lemley can claim that the DMCA is “worth saving” only by downplaying the true plight of creators and copyright owners.

A concrete example of this struggle comes from the comments filed by Universal Music Group (UMG) as part of the Copyright Office’s study. UMG describes the painstaking efforts devoted to protect just one artist’s creative work. In October of 2014, UMG and Big Machine Records launched a joint offensive to protect Taylor Swift’s “1989.” A staff of UMG employees dedicated 100% of their time and resources to manually search for infringements on YouTube, SoundCloud, and Tumblr, and through March of 2016, they had sent over 66,000 DMCA takedown notices. Despite their considerable efforts, over 500,000 links to the album were identified, and “1989” was illegally downloaded nearly 1.4 million times from torrent sites.

Of course, this type of effort would be impossible to replicate for any works other than those that attract such massive attention. For most artists, the burden of monitoring the Internet and sending takedown notices would fall entirely on their shoulders, with no guarantee of putting a stop to the theft of their works. Sprigman and Lemley ignore these problems, instead claiming that since copyright owners sent “more than 500 million takedown requests just to Google last year,” we know that the “system is a powerful tool against pirated content.” That would be great, if true, but the reality is that those notices barely made a dent.

Sprigman and Lemley claim that the “genius of the DMCA” is that it “enables entertainment companies to turn piracy into legitimate revenue.” They give the example of “YouTube’s Content ID system,” which “gives copyright owners the opportunity to ‘claim’ their work and share in any advertising revenue rather than pull it off the site.” From the perspective of creators and copyright owners, the only “genius” of this system is that YouTube can legally present them with an unfair choice—suffer infringement and get nothing or monetize and get next to nothing.

While Sprigman and Lemley praise the “more than $1 billion” paid out by YouTube, the real question is how much more copyright owners and creators would have been paid in a properly functioning market. YouTube is consistently teeming with infringing videos—one recent report revealed that over 180 million infringing videos had been removed in 2014 alone. And the artists that YouTube’s largess supposedly benefits are loudly complaining about their exploitation. If Content ID is so great, why are so many creators and copyright owners upset with the arrangement? The monetization Google offers to copyright owners and artists is less than half of the royalties paid out by streaming services like Pandora, an amount that artists have denounced as already inequitable.

In her excellent piece on the fictions of the Content ID system, Grammy-winning artist Maria Schneider exposes Content ID as a way for Google to cash in by actually legitimizing and perpetuating piracy. She explains that a majority of creators that opt for monetization realize miserable percentages of ad revenue, and the continued illegal uploading of their music and content drives billions of users to YouTube’s platform. YouTube has turned the weakness of the DMCA into a system that exploits artists while offering embarrassingly lower royalty rates than what would be negotiated in a free market.

The current situation is untenable, and if change means “breaking” the Internet, then we should pull out the pickaxes and get to work. A system of notice and staydown, rather than just takedown, would help alleviate the constant and seemingly ineffectual vigilance required by the current system. By removing all copies of a protected work and blocking inevitable re-postings, ISPs would honor the original purpose of the DMCA while actually doing their part to earn the protection of the safe harbor provisions. Only by ensuring that targeted works do not resurface will ISPs respect the rights of those without whose content they would cease to exist.

How anyone can honestly say that the current notice and takedown system is working for copyright owners and creators is mystifying given the constant calls for reform from creators and the numerous critical comments filed with the Copyright Office. The incredible magnitude of takedown notices sent and the seemingly unstoppable reappearance of infringing works online are a clear signal that the system is completely failing those it was meant to protect. Creators and copyright owners deserve a better chance at protecting the fruits of their labors, and the DMCA needs to be changed so that it truly is a system “worth saving.”