Wednesday, January 29, 2014

House fair use hearing

Hearing on Fair Use, House Judiciary Committee Subcommittee on Internet/IP

Rep. Coble (subcommittee chair): Fair use is important.  North Carolina universities rely on copyright law and on fair use.  Fair use’s strength is its ambiguity/freedom for courts, but also its greatest weakness in the digital era.  Congress could provide guidance on what it did/didn’t intend to be fair use.

Rep. Conyers: Fair use is generally working as intended—a limited exception to creator’s property rights when certain public interests conflict with those rights.  Current law attempts delicate balance between public interest and creator’s ability to earn a living. Creators should be able to tell new stories by using copyrighted material as historical artifacts, depict real world scenes and events. Historians, biographers, filmmakers use these work for meaning and insights about historical events.  Essential to discuss historical events, critical to news organizations/public broadcasters. Current law, while not perfect, provides reliable guidance to copyright owners. We must continue to monitor this area, vigilant in safeguarding rights of creators. Calls for expansion of fair use: due partly to the fact that specific statutory limitations haven’t kept pace with emerging technologies? Content owners should continue to develop best practices.  Interest in maintaining fair use’s historical role as flexible doctrine should continue in broad range of context; we should reexamine application of transformative use, which has become all things to all people.  Fair use impacts all industries, including education and journalism; should develop best practices.

Rep. Goodlatte (committee chair): Fair use was codified only in 1976 but part of copyright law before that; changed a bit in 1992 for unpublished works but unchanged otherwise.  Flexibility has encouraged new business models.  Certainty is also beneficial, both for copyright owners and users. Not every dispute should require judicial interpretation—wants to know how statute has succeeded—too specific? Not specific enough? Are the factors appropriate and appropriately defined? Key question: How does one define what is transformative.  Several witnesses note that transformativeness is viewed by judges as of primary importance.

Peter Jaszi: Fair use helps guarantee the continued international primacy of the US as a site of innovation. After a rocky start, courts are now doing an excellent job.  Could use legislative support—exempt noncommercial derivative work from onerous statutory damages; amend §301 on preemption to bar some or all contractual waivers of the fair use right.  Written testimony describes current unified field theory of fair use that informs decisions—keyed to the notion that uses that advance transformative ends, repurposing and adding value to copyrighted material, are favored.  2d Circuit yesterday provided example: Bloomberg posted a transcript of Swatch conference call.  In context of news reporting, conveying info to the public accurately allows faithful reproduction of original work.  Transformation comes from altered purpose or context, even when the entire work is being used, in light of purpose.  Bloomberg served public interest in access to info without great harm to competing private interest.

SCt has stressed the intimate connection between fair use and the First Amendment. Past 20 years, we’ve seen fair use as an important positive right by many—teachers, artists, scholars, librarians, providers of disability services, etc.—contributing to progress. Not everyone likes every fair use decision, but we all benefit from general pro-innovation trend.  Pattern of decisions articulate no a priori limits on the range of situations to which the doctrine is applicable, and given copyright’s goal—which isn’t to favor any particular form, but to promote the dissemination of knowledge—there’s no reason such limits would be desirable. Those who would limit it have a heavy burden of persuasion. Flexibility and dynamism allow adaptation to new social and technological situations.  Sec. 108, 110, 121 are also good for particular user groups as safe harbors, but never comprehensive and often not up to date. These provisions don’t supplant fair use but are supplemented by it.

One common critique is flexibility = uncertainty. Recent scholarship shows patterns and predictability.  Lawyers can forecast likely outcomes where there are analogous precedents.  Contributing to predictability is fair use best practices.  Greatest credit for healthy fair use belongs to users, large and small, who invest thought and time in making fair use decisions, furthering the constitutional objective of copyright in expressive flourishing.  AU has been involved in developing fair use best practices across a wide range of different professions, from documentary filmmakers to College Art Association.

June Besek: In early 2008, Columbia sponsored a symposium: Fair use: incredibly shrinking or expanding? Answer: expanding. Until recently copying a whole work couldn’t be fair use.  Now copying millions of works can be fair use.  Fair use is essential, but not carte blanche for unlimited use of others’ work even for social benefit.  Principal reason for expansion has been significance of transformative use.  Campbell v. Acuff-Rose: commercial use wasn’t dispositive; using a work in a way that adds something new, with new expression, meaning or message.  Other cases involved productive uses—to annotate, analyze, parody. Post-Campbell cases expanded to how the work was used—functional transformation. They began to apply transformative label to new uses without creating new works—uprooted from original context, enabling new business models rather than new works of authorship. Troubling consequence is that if court finds transformativeness because it reaches new markets, can usurp author’s derivative work rights in potential new markets.  Tends to find that the use doesn’t compete with the author’s market.  Authors’ rights depend on race to market.

Fair use has sometimes strayed too far in one direction or another—commerciality dispositive; Campbell stepped in. But the pendulum has gone too far; transformativeness has become too important.  But fair use remains a rule whose application is best made by judges. Legislative intervention may be appropriate when judges go too far. Current swing reflects concern for mass digitization; Congress could address that, which is skewing the law/could reduce pressure that risks turning fair use into a protection for new business models instead of authors.

Naomi Novik: Creator and artist whose work is deeply affected by fair use.  Published author of 10 novels, including NYT bestselling novels, optioned by Peter Jackson. Worked on computer games, graphic novels, open and proprietary software. Would have done none of it without fan fiction. Discovered fan community: wrote fan fiction, software, made remix videos. Found enthusiastic community. We weren’t trying to make money; gathering around a campfire and singing songs/telling stories.  Bigger because of the internet; not Robin Hood but Captain Picard—fair use gave us the right. We felt fair: we watched Star Trek religiously, we bought the DVDs and T-shirts. We had our own new ideas about the characters, universe—we are imaginative creatures—and we wanted to share. I learned to explore ideas in the remix community. Eventually that led to my own characters and universe.  Now other people get ideas from Temeraire.  I hope that fans will go on to write their own bestsellers/games, perhaps with an idea from me. We all build on the ideas of those who come before us. There’s no hard line—original work is at the end of a spectrum of transformation, and fair use protects the spectrum. It allows us to share and learn by doing.

Licensing isn’t a practical alternative. We don’t have the time, money, access, or knowledge. I wrote my first story as a college student working a part time job; if I’d had a complicated process I might never have done it.  Imagine if kids who played Lone Ranger in the back yard needed a license before doing that—today the internet is the back yard.

Copyright owners: most of us aren’t large with media/licensing departments. I don’t want the difficulty/expense of licensing everyone who wants to use my works.  Licensing also invariably stifles transformative works—tie-ins always have stringent requirements. The point of licensing is almost always to avoid transformation, avoid leaving copyright owner’s vision. 

Ask Congress to help developing artists to exercise fair use rights.  Most people don’t have resources to defend themselves.  Incubators could be supported by make it less frightening: good faith should limit damages; limited automated screening tools and allow claim fair use; exemption for noncommercial transformative works like libraries and teachers have.  Don’t narrow fair use; protect innovators.  Innovation starts with asking “what if?”  What if you crossed a computer with a music player? Makes US strong.

David Lowery: Mathematician, lawyer, musician, etc. Rise of internet has led to attention to fair use as excuse for trumping rights of authors.  Technology companies, commentators, lobbyists, and some artists. Not concerned with parody, commentary, criticism, documentaries—but concerned with copy that masquerades as fair use.  These interpretations of fair use that pass off versions of my work indistinguishable from my work as fair use—licensing is better.  Remix/sampling: there has been a push for expanded fair use; defies logic because there’s no urgency. Robust market-based mechanisms for licensing exist; hip hop is most popular on planet without fair use.  Don’t fix it if it isn’t broke.

Song lyrics: sites that reprint song lyrics with annotations/meanings are not fair use. Has experienced unauthorized use of lyrics on RapGenius.  Researched lyrics sites and identified undesirable ones.  After he ID’d RapGenius as #1, one principal began annotating his song “Low,” but the annotations were just popup links—not different from other lyrics sites; competes with licensed sites.  Reprinting entire book with occasional links to defined words would be the same. RapGenius took a license.  What’s so hard about asking permission? I only expect to be treated as I treat other artists.  Doing unto others = foundation of civilization. Rightsholders can be easily identified—look up song owners on public database.  Review practical history to see fair use is working as intended. No expansion/intervention is needed at this time.

Kurt Wimmer:  Newspapers start important conversations, often continuing online on platforms we own and elsewhere. Scope of fair use is important to the industry. Spend $5 billion/year gathering info; investing in mobile platforms; larger audiences than ever more; circulation revenue grew 5% in 2012, and online circulation revenue grew 275%.  But much ground to make up because of disruption of digital—print advertising collapsed and digital didn’t make up; competition is fierce online.  Need to compete with other creative companies but also companies that build themselves on our backs—Google News, etc. These can result in some limited traffic to newspaper sites, but not meaningful revenue. Those companies monetize their readership. Some of these uses are fair, others clearly not. This is an issue that can be remedied by courts, not Congress. Fair use currently strikes the right balance, allowing courts to respond to changes in technology. 

Recent example: SDNY’s AP v. Meltwater case. Meltwater scraped AP articles and delivered excerpts to paying subscribers. Court found this was a substitute for original articles, judging by clickthrough rates. Without additional commentary, this wasn’t fair use. Focus on commercial ventures that take/resell our content may be necessary. Not all fair use decisions are right, such as undue weight for transformativeness in some recent decisions; shouldn’t subsume other factors, but we hope/expect this imbalance will change over time. Also, licensing is fixing the problem. Many participants—including innovative startups—would prefer licensing over questionable business models. Licensing allows distribution on new platforms and support journalism.  Our goal is consistent with our longstanding mission: appropriate balance of enforcement, licensing, and our own platforms, including relying on fair use.

Conyers: what is transformative and what isn’t?

Wimmer: very fact-based.  Allowed secondary uses in straightforward manner shouldn’t be fair use—Grateful Dead case, in which publisher just put Grateful Dead posters in chronological order—court found that transformative, which he thinks is wrong.  (RT: This is a misdescription of what the publisher did.)  Bloomberg case, though, is right.

Lowery: reprinting of my lyrics on a site without licensing isn’t transformative even if it’s annotated with popup explanations.  There are market based mechanisms, agencies that license lyrics.

Conyers: should we codify a definition of transformative?

Jaszi: don’t arrest judicial development that is well underway. We’ve resisted codification of fair use over time, and the results have been enormously productive for social and technological innovation. Narrow transformativeness would be a grave error.

Conyers: are there recent fair use decisions with which you disagree and why?

Besek: A number, but one is use within a law firm of scientific articles. The argument for transformation was that the law firm needed to submit the articles to the PTO as evidence of prior art.  But the articles are published to understand new scientific developments; the law firm is reading the articles for substance. That’s not transformative, though it may be excused on other grounds.

Novik: I’m not a lawyer, but transformativeness is “you know it when you see it”—the Grateful Dead case, the book presented the posters in thumbnail form in a way that, for me as a reader, I found new information and no replacement of the original (a big poster on the wall)—showed the evolution of the style of the Grateful Dead.  So far, I feel courts have generally been making interpretations that, for me as a creator, make sense.

Rep. Chu: Creators simply want to make a living from their works, but face barriers.  For Lowery: Remixes/illegal lyrics—what’s the right way to sample music?  Permission, Lowery says, is possible—why do some choose not to do it the right way when markets exist?  Lowery conducted a study on lyrics infringement—how serious and prevalent is this problem?

Lowery: Lyrics are an interesting case, because there was no market before the digital age; it’s a success story for the internet—relatively obscure artists can get some small revenue from lyrics.  Generally, lyric websites do license.  About ½, slight majority of traffic is to licensed sites.  Backsliding and a push for fair use based around annotations/meanings.  Directly competitive with the market with established price, uses.  On hip-hop, he often hears there’s been some sort of decrease in innovation.  The market disagrees; hip-hop is now more popular than it ever was, so restricting uses didn’t affect popularity.  People tend to do what copyright intended when they can’t obtain a license for a song—they create a new loop to take the place of the sample, as the Founding Fathers intended.

Chu for Besek: Some people are pushing to export our common law of fair use. What are the potential consequences?

Besek: this is an interesting idea, but it’s not the time to do it, because we have enough uncertainty here that we shouldn’t be sending it to other countries.  (Good enough for us, not for you!)  We have so many cases in the US where fair use has switched from district court to court of appeals; can’t assume other countries would apply it like we do.  Other countries don’t have blanket exceptions, but specific ones; for us to impose fair use wouldn’t sit very well.  (Unlike all the other requirements we impose ….)

Rep. Marino for Jaszi: where do you draw the line on fair use? Lyrics, poetry?

Jaszi: the line is properly though not easily drawn between uses that are genuine value-added uses which do infuse commentary and critique.

Marino: so everything is fair game?

Jaszi: I don’t think so.  There may be sites in which the added value or repurposing is pretextual rather than real.

Marino: hear constantly from musicians and artists who are waiting tables in restaurants and see their music on the internet and receive nothing for that—do you have a problem with that? Their music makes a lot of money, but pirates use it.

Jaszi: I don’t believe anyone defends piracy as fair use. It lacks transformativeness, repurposing, addition of value, which the courts have identified over the last 20 years.

Marino: so you don’t have a problem with the courts making a determination about these sites?

Jaszi: that’s how we should proceed.

Marino: what would your position be if your employer videotapes your lecture and then fires you so it can rerun your lectures instead.

Jaszi: they do that already, and somehow I’ve survived. This is a contractual issue.

Marino: but many people in the entertainment industry aren’t surviving.  (I don’t see how this is fair use’s fault, but rather a contractual problem.)

Jaszi: the problem here is not a copyright problem.  My contract defends me in my workplace. The essential problem relating from the return from the market is a problem of contract.

Marino: why not TM? Why not patent?

Jaszi: we do have a vital doctrine of fair use in TM. Patent law is far shorter, but also subject to a number of public interest exceptions.

Marino: patent is far more stringent.

Rep. Lofgren: put into record fair use principles for user-generated content. 

Marino: is there consistency in courts’ opinions?

Wimmer: there was until the late 1990s, when transformative use ascended. Now transformative use has unsettled the marketplace. But the rest of the factors have been consistent.

Besek: where you find inconsistencies is when there’s a genuinely new use and courts split.  Sony: district court goes one way, court of appeals reverses, SCt reverses them. 

Jaszi: there’s a lot more consistency in the current pattern of decisions than he would have necessarily expected for only 20 years.  Now we’re seeing a convergence of the most important 2 circuits, the 2nd and the 9th.  One can agree or disagree with the emerging unified field theory, but it’s remarkably consistent even though it can sometimes be unclear how it applies.

Marino: as a prosecutor, used to inconsistency.

Rep. Goodlatte: For Novik/Lowery, see lots of remix.  If they exploit it themselves, the original artist whose work has been altered doesn’t benefit.  Thoughts on that?

Novik: I do noncommercial transformative work—talk to 16 year olds who are writing their own Harry Potter stories where they write themselves in; it’s noncommercial.

Goodlatte: should they need a license?

Novik: a court could decide—part of the decision would be how transformative it was. Most remix artists understand that and don’t want to exploit work commercially. 

Lowery: often, I find that although these are noncommercial works, they’re distributed on commercial platforms. (he means has advertising.  The problem isn’t with those who create, the problem is these large intermediaries who disseminate the work who make a profit and encourage their users to make remixes, which may be fair use or not when they’re noncommercial, but they become commercial when vacuumed up and monetized.  Have some examples.

Novik: that doesn’t change what the artist is doing.

Lowery: don’t put it on that website. 

Goodlatte: Jaszi says fair use is working.  Is it working for everyone, or only for specific groups?

Besek: Fair use is working for some, but not for all users and not for all rightholders. Recent cases that deal with one party exploiting lots of works at the same time distorts fair use. End is a good one (indexing all works) but the question is how you get there—means to the end.  By trying to shoehorn it into fair use, disservice to copyright.

Wimmer: Generally working. We look at fair use both from offensive and defensive side. Newspapers need fair use to report on others’ work. But commercial appropriation of mass amounts is different. Transformative trend is concerning, but it’s a short term trend and we think courts will get it right.

Novik: generally working, but individual artists can be at a substantial disadvantage to large conglomerates or automated systems.

Lowery: working for music. Photographers have been abused.  Business model has been wrecked.

Goodlatte: should Congress distinguish between music, photography, books?

Lowery: can’t really answer that.

Goodlatte: could submit answers in writing.

Jaszi: there are creators struggling in the current market, but that’s not attributable to fair use.  Besek’s example of mass digitization is an excellent example of the doctrine fulfilling its function—the material is being dramatically repurposed for nonsuperseding uses; the public interest is enormous; no existing licensing structures are available to enable those uses.  Instead of thinking about mass digitization and its benefits (including the print disabled) as a problem, I see it as a success story.

Rep. Deutch: We have 100 years of precedent. Troubled by the idea of just inserting “fair use” into trade deals, without our precedents. While trade agreements allow flexibilities to adopt fair use style exceptions, mandating it would just provide a loophole for other countries to ignore IP.  Besek says fair use could put us out of compliance with treaty obligations (interestingly, her testimony cites a finding that sec. 110 was out of compliance, and we have yet to come into compliance after nearly 15 years; funny that people purport to care now).

Besek: some similarities, but different cultural factors give no reason to think it would track our fair use law. We attempt to accommodate 1A concerns, and other countries don’t.  Tradition of more explicit separate exceptions; wouldn’t necessarily do what we did.

Deutch: their exceptions could fill a volume too.

Besek: sure, and often track what fair use does.

Deutch: concern is it becomes a loophole. Important balance to be struck in our trade deals, and the words “fair use” don’t do anything.

Wimmer: right.  He’s done legal work in 20 different countries—common law and civil law are different.  Civil law—judges don’t have the same tradition of working to create precedent, and they really can’t cope with these types of common law doctrines.

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