11:20 – 1:15 The Challenges and Opportunities of Copyright in the Web 2.0 World
Moderator:
Morton David Goldberg, Cowan, Liebowitz & Latman, P.C.
Speakers:
Marty Hansen, Covington & Burling, Wash. D.C.
Web 2.0: A Brief Overview of Issues and Challenges
User-generated content: That doesn’t really capture the uniqueness and challenges from a copyright perspective: “user-manipulated content” is better. How will courts treat users? And how will they treat the hosting services? As a derivative work, courts are fairly solicitous of the copyright owner (unless it’s a parody). But the search engine cases have found transformative use. User-generated content is somewhere in between those two.
Device-independence: the ability to access your data, your applications, etc. anywhere from any device. Mobility!
Cloud computing/online services/server-based computing: related to the previous element. If only you have access to your data, there’s not much of an issue, but if you start providing access to a certain number of people, you’re sharing your files and may be sharing someone else’s content. In Web 1.0, you used P2P to do this; how will courts look at this once it’s stored on remote servers?
Ad-funded business models also present copyright challenges. Ads displayed by third parties alongside user-manipulated infringing content—how does that play out in eligibility for §512 safe harbors or vicarious liability? How does it play out in fair use analysis? What happens when intermediaries actively solicit advertising from entities that are infringing copyright—is that actionable?
He counseled caution in expanding exceptions in order to protect authors’ ability to commercialize their works and create markets in creative works. Filtering is highly promising, as the User-Generated Content Principles suggest—MySpace and Daily Motion both signed on to the principles which suggests confidence that filtering and fingerprinting are reliable and scalable. Tech needs to be supplemented by industry-negotiated solutions. If we get clearer rules, though, remember we might not always like what we see.
Prof. Brian Fitzgerald, Queensland University of Technology Law School, Brisbane
Web 2.0: Creator Utopia, Platform Owners Paradise or Still the Same?
Star Wars Mashup: video-sharing platform for user-uploaded video, 250 authorized clips, ad revenue not shared with users. Users get a license solely for posting on the site; for mash-ups users grant Lucas a perpetual, exclusive, etc. license to the films, including the moral rights, whereas the license is the same for non-mash-ups except that it’s nonexclusive.
YouTube: Nonexclusive license; no clear policy about sharing revenue. Billy Bragg recently spoke out on creator v. platform. Bragg argues that platforms should share more revenue to the artists—a common sentiment, e.g. with moves to create a general public performance right for sound recordings. The difference is that the internet provides a platform for more than the few artists who profit from radio.
Revver: CC-ND licensing; ad revenue and profit-sharing; there is tracking even off-site; joining Revver means you try to share others’ media virally, and profits from ads go 20% to sharer, 40% to creator, 40% to Revver. Revver uses nonexclusive licenses (of course, with CC).
Magnatune: Music sales, revenue share with creator. Listen for free, then license or buy downloads. 50/50 gross revenue split on music, 50/50 net on merchandise. All music is released under a noncommercial-sharealike license. You can license the music automatically for TV, film, ads, etc.
Nine Inch Nails: Ghosts, 36 instrumental tracks packaged in groups of 9 tracks. 1 is released under CC sharealike license. The music is a basis for new revenue streams, like a DVD.
What role do collecting societies have? Debatable with new artists entering the market who had no market before—should they join the collecting society?
Should platform owners share revenue? That might make their models unsustainable?
Broader rights for noncommercial and transformative use might lead to more UGC and revenue streams. Reform of 512 might be on the table.
Web 2.0 is not a utopia; will it be commercialism in a new guise?
Alexander Macgillivray, Intellectual Property and Product Counsel, Google, Inc., Mountain
View
YouTube's Content Identification Systems and the new licensing models they enable.
He was happy to hear yesterday that Viacom got most of what it wanted from the lawsuit by having YouTube begin filtering; looks forward to the end of the suit.
YouTube has 1000s of partnerships with creators. The vast majority are not currently monetized on the play page, but creators can make money from uploading—these all seemed to be businesses.
Content ID & Management system: others call it fingerprinting, because fingerprints either match identically or not (oh, how little he knows about the controversial validity of fingerprinting), whereas the whole goal of Content ID is to match content that is the same in substance but not exactly the same bit for it. Part of ongoing copyright efforts: education of users; audio content identification; video content identification.
Goals: reduce infringement; enable copyright owners to monetize, block, or track content, to the extent that copyright owners know what they own (my italics, not his). Allow them to control what happens automatically. Copyright owner could turn over a pristine copy and someone can point a camcorder at their screens; how to match?
Video ID begins when a copyright owner turns over identifying info (copies) to YouTube, or downloads YouTube’s tech and runs the program on its own servers. This creates data files that can be matched against uploaded content. The copyright owner can choose what to do with a match—takedown, leave alone (previews of coming movies or new TV seasons), monetize.
Donald B. Verrilli, Jr., Jenner & Block, Wash. D.C.
Counsel for Viacom, but speaking for himself, and trying to avoid a back-and-forth about YouTube. In the past year, there’s been a positive evolution: (1) pre-upload filtering systems have been implemented by MySpace, Microsoft, and others; (2) Principles for User-Generated Content Services; (3) YouTube’s new system. Viacom isn’t thrilled with the system as implemented, but it has benefits and is a genuine advance. Liability rules in copyright are key to pushing this change—enforceable property rights are the necessary backdrop for workable business models.
Key difference between P2P and Web 2.0—these sites are entertainment sites, built around availability of particular content, which makes it more difficult for platforms to portray themselves as mere passive intermediaries. Also it makes §512 safe harbors harder to invoke. Relatedly, these business models operate in the Grokster danger zone in terms of inducement because the availability of filtering technology means that a choice not to use it can lead to an inference of an intent to induce infringement, and because they’re ad-supported. That’s the right result: copyright is a codified tort law, and we’re seeing best practices emerge in the marketplace and market actors are making decisions about the standard of care. (Comment: this is terrifying to me, because the interesting and liberating value of what gets called “Web 2.0” is not about market actors but about new creators and new audiences, and they don’t get taken into account in the language of business models.) The business model should incorporate the costs that infringement imposes on copyright owners, since the platforms are profit-seeking entities.
Panelists:
Prof. R. Anthony Reese, New York University School of Law (visiting)
Other Web 2.0 features of note: mass collaboration (Wikipedia), mass open licensing (Creative Commons). The current joint works doctrine is badly configured to handle this, as is current licensing law. The Cablevision case points out that even accessing your own data may be problematic under current copyright law.
Thomas C. Rubin, Associate General Counsel, Microsoft Corp., Redmond
An ecosystem of different types of sites encouraging creativity and technology: there’s a place for CC and DRM, a spectrum of opportunities for creators. There’s also a spectrum from ad-supported to downloading; an ad-supported solution has yet to show that it can sustain artists, which was what Billy Bragg was saying.
Prof. Mary Wong, Franklin Pierce Law Center
Need for clarification of secondary liability: it’s not just a need in the US. There is no international uniformity or consistency. In common-law countries outside the US, the concept of secondary liability is based on the idea of “authorization.” The Australian KaZaa case noted that Grokster wasn’t really helpful on that front. And safe harbors need to be worked out as well. A number of countries have safe harbor legislation.
Macgillivray: The move back to server-sides is actually a return to Geocities, which was user-posted content hosted on their servers, and was an ad-supported model. The DMCA was designed to protect Geocities, which was engaged in displaying that content, and to protect things like indexes that were hand-selected by humans as good sites even if the sites turned out to host infringing content.
Verrilli: Good luck showing that in court! (Comment: I think Verrilli is clearly wrong on this; Congress did mean to protect Geocities, and Geocities was as a natural consequence of user-directed storage also engaging in user-directed public display. 512(c) would be a nullity if the coincidence of performance or display took a service provider out of the safe harbor.)
Q about insurance as a solution.
Rubin: If sites filter and adhere to user-generated content principles, content owners have agreed not to assert infringement for remaining liability. It’s a kind of privately negotiated insurance, giving certainty to businesses.
Fitzgerald: This is a new opportunity for people who aren’t corporate entities. Insurance would be a burden on the individual creators, because sites would find ways to make the individuals pay for it.
Q: Latest version of songwriters’ proposal on internet tax is not to allow filesharing, but allows you to download a client that would allow you to share music with everyone else who’s also paid the fee. Questioner doesn’t think it’s a tax, but finds it an interesting business model.
Michael Einhorn: Think about a category of works where there’d still be liability for infringement, but the only remedy would be a reasonable royalty payment. Section 512 is a step towards that, though directed at secondary liability. You could have a section 513 that limits the entities or uses entitled to that.
Rubin: Copyright owners are tacitly allowing many of these transformative uses. That might be a solution in search of a problem.
Wong: There is a question in many jurisdictions over whether transformative use is acceptable. There are moves in that direction, as in the Canadian CCH case, but in some jurisdictions the scope will be much more limited.
Response from audience: The Michelin Man case is a terrible case on the books in Canada holding a parody to be an infringement; until we get rid of that precedent, Canada will be a bad forum.
Michael Einhorn: Graduated response in the Sarkozy agreement in France. Europe has considered more direct legislative engagement with ISP liability. The Olliven agreement: a participating ISP would send electronic warnings to people whose IP addresses were identified by rightsholders as the source of infringing files. Three strikes (possibly four) and you’re out. Repeat infringers would be referred to judges for graduated sanctions, starting with suspension; the government would publish monthly statistics on enforcement; ISPs could be required to use other measures and would be sanctioned if they didn’t, including filtering.
Trying to tone down the litigation and the rhetoric, and the government will encourage people to act responsibly. The content industries agreed to eliminated DRM that doesn’t have interoperability within one year, and have decreased the window between releasing a movie in theaters and releasing a movie for authorized use by ISPs, so that it now is equal to DVD availability.
This is not an immediate plan to filter. But if you identify a potential infringer by the upload, you don’t need to do additional filtering. This could potentially graduate to download filtering, and there lines would need to be drawn. (1) To what degree will infringers have access to encryption technology? If they do, they can get around content filtering. Then we’ll have to sue encryption providers, which sets off another arms race. (2) Protocol filtering, barring anything that’s on the Bittorrent protocol. ISPs are using this as traffic shaping, but it’s not particularly granular because there’s a real possibility of efficient, noninfringing use. Restrictions on the upload are a kindler, gentler way of solving the problem than the litigation battles in the US.
Ted Shapiro, MPAA: There are a lot of issues remaining to be worked out. We have over 300 legal services for video-on-demand, 75 online. ISPs are more and more in our business, selling movies. A graduated response of warning, limits on service (which don’t have to be termination), combined with commercially available filtering, can work even with encryption growing. No criminal actions, no civil suits, no disclosure of data about end users, no personal knowledge of end users’ communications. It wouldn’t affect ISP liability. We wish the French luck. The DRM-free requirement, however, relates only to music, though film did make concessions regarding windows.
Reese: Can’t object, as a proponent of a similar scheme, but the devil is in the details. The three-strikes notion exists, sort of, in 512. Are we contemplating permanent exile from any connection to the Internet for the rest of your life if you get three strikes? In a world where commerce and citizenship are moving more online, sometimes exclusivity, this might not be a smaller part of a graduated response than lawsuits or other penalties. We need to be careful about implementation.
Rubin: A cross-industry agreement benefits both content owners and consumers. But extrapolating from industry filtering to consumer filtering is a big leap and we shouldn’t assume it could easily be implemented. How would it impact the user experience and the network? Discrimination is also a concern: what’s the ISP’s role? See recent reports about Comcast and Bittorrent.
Wong: We seem to agree that the law is unclear in many respects and we need to look for other solutions. Reminder: a lot of the lawsuits in the US are not just against downloaders, but also and particularly against people who make available infringing copies, and there’s an interesting question as to which exclusive right that violates.
Different markets may lead to different solutions: there are 4 large ISPs in China, and 100s of little ones; if you start at the top, that could work in China if not elsewhere.
Daphne Keller, Google: Another DMCA feature is the counternotification. In web search, they say “this is a misidentification, my content is different,” or “I’m a licensee” or “this is a fair use.” How if at all is this considered in the French proposal?
Shapiro: They are concerned about due process, which is why a judge or administrative official would be part of the process. But they also have a statutory duty of care to make sure your internet subscription is not abused.
Q: Under the French proposal, is the music to be DRM-free or copy control free?
Shapiro: You could still have subscription services, but they’d make mp3s available.
Q: The current safe harbors have enabled technology to develop and represent a clear bargain between content owners and ISPs. Why change?
Shapiro: The bargain was that ISPs would cooperate in fighting infringement, but that hasn’t happened. Graduated response defines the appropriate circumstances for terminating repeat infringement.
Disney lawyer: In 2000, legislation in Europe foresaw a code of conduct for ISPs, which hasn’t developed.
Knopf: There will be a lot of fair uses—it’s scary to have a computer decide your internet access should go away after three times.
Einhorn: This isn’t a machine; a judge will have to make the decision. And it won’t necessarily be a total termination of internet access. Perhaps a graduated penalty: one month offline. Law should best be engaged as part of norms. One of the most successful pieces of legislation in his lifetime was the Civil Rights Act of 1965, which didn’t make people afraid of making the law so much as it raised awareness of the appropriate norms. The French approach suggests awareness of broader norms.
Hughes: The technological state of affairs has fundamentally changed, which puts the players in positions to make different demands, allowing us (both practically and politically) to revisit the 512 bargain.
Canadian questioner: There seems to be a concern that copyright owners could abuse the process. What about penalizing copyright owners who abuse the process?
Shapiro: That needs to be taken into account, and it’s a big concern for ISPs (who hate to terminate customers). Some UK reports suggest that graduated response is effective and termination rates are very low.
Q: What kind of notices will be given? The notices of infringement will have to be done on a machine-generated scale, and that will cause a chill on commerce. DMCA notices in the US are often worded in ways that would violate Australian law on unjustified threats.
Reese: Counternotification is a possibility; you could also go after copyright owners for material misrepresentation, but it’s not clear what that means—whether it covers cases in which you should have known something was fair use.
Wong: Within 512, there’s a question of what is substantial compliance in the form of notice from the copyright owner. Some of the cases disagree.
Q: What about effects on privacy? Totalitarian regimes could misuse these tools.
Shapiro: Totalitarian regimes are already doing these things. French data protection law is extremely rigorous, and part of the complexity of this process is complying with that. Creating an independent authority is a way to protect data.
Hughes: At least one US judge has said: if you knowingly install P2P software and have a shared file folder directory, it’s hard to make a privacy argument. (Of course, that’s not the scenario in many of these cases—you might make a post to a private community, for example.)
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