WIPIP at BU session 6

H. Tomás Gómez-Arostegui, Copyright at “Common Law” Before 1710

Common law copyright has two historical meanings: right of first publication, and right to control further printing. His paper is about copyright after publication.

Why should we care? We care now because it plays a role in present debates over normative scope of copyright—a natural right or a privilege created by statute. Sets the default of copyright: at the creation of copyright, what was its primary rationale? To protect authors and assigns, or promote authorship for public benefit? Traditional view: origin was a common law right predating the statute, from Millar v. Taylor (K.B. 1769); Donaldson v. Becket (H.L. 1774) (traditionally read to agree with Millar that copyright in unpublished works predated the statute). But both relied mostly on post-1710 cases.

Howard Abrams argued that this was misinterpreted: House of Lords thought copyright never existed at copyright law. Donaldson is reported in many places, years apart, inconsistently, and thus subject to many interpretations. Additional original research by Ronan Deazley supporting this relies on post-1710 cases. This modified account has been successful: Patry says there’s never been a common law copyright in published works.

All these cases relied on by scholars assume (with one exception) that there were no pertinent pre-1710 cases, but that’s not true. The thought was that previous cases were filed based on letters patent; cases filed on common law copyright were only brought after the Statute of Anne’s legacy clause expired.

Justice Willes in Millar believed this: before the statute of Anne, proprietors of copies had no idea a bill of equity could be entertained other than by way of letters patent. Justice Manfield said the same thing.

But he found 17 equity cases along with one previously known case from 1680. None was ever formally mentioned/reported, but that was routine, and unreported cases were routinely cited, but this accounts for why they were forgotten at the time of Millar and Donaldson. He excluded cases filed during periods where a different form of copyright existed under statute, Printing Act of 1662, which was largely about censorship but also supported the Stationers’ copyright registration scheme by making it a statutory violation for someone other than the registrant to print a book.

Some of the cases base their claims on the customs of the trade, or a claim of “property,” or a claim of right at common law.

Importance? Opponents of common law copyright in Millar and Donaldson made much of the fact that such suits weren’t filed, but 17 people thought they had a nonfrivolous claim. In many instances the defendant acquiesced to the claim of right. In many of the suits the defendants were not members of the Stationers’ Company (and thus not bound by the Stationers’ internal rules). One case: court refused to grant remedy of accounting at law, because injury to plaintiff should be the measure of damage, not profit to defendant. Court was not willing to allow this especially since the recently acted Statute of Anne had just granted another remedy—“another,” not “new” right.

Our current understanding of the origin of copyright is at best incomplete and at worst incorrect. What we’ve taken to be true for centuries is false, and the consequences of that fact need to be addressed.

Michael Carroll: Privileges were still being granted in the gap years, at least to music publishers. The underlying sources of law were in flux and not always given careful attention in the courts of chancery; he doesn’t find it surprising that careful attention to the underlying source of law was not granted. Also, chancery and law courts were in competition for business, so they had institutional reasons to want to accept the argument independent of what they thought about the existence of a common law right. We also need to understand why people sought privileges if there was a common law right.

A: privileges to music: seen as a different subject matter, so booksellers feared it was not covered by common law copyright. Books: Deazley has analyzed book patents, and they often covered abridgements, which the common law likely didn’t.

Mary LaFrance, From Whether to How: The Challenges of Implementing a Full Public Performance Right in Sound Recordings

Current sound recording performance royalties are limited; don’t cover terrestrial radio, restaurants, stores, theatrical, or television films (need license to incorporate songs into derivative work, but when performed publicly need no separate license). Negotiated license for interactive digital services; statutory licenses for satellite radio, digital satellite and cable TV music services, and noninteractive music streaming/webcasting. Allocation to record companies, featured performers, and a trickle to the nonfeatured performers handled through the musicians’ unions.

2010 bill didn’t get very far, but there is positive momentum towards change. What if we did expand the performance right?

Reciprocity: collect foreign royalties for US record companies and performers, satisfying other countries’ reciprocity requirements, creating a net inflow due to worldwide popularity of US recordings. (Numbers that get bandied around are produced by various interested parties and are not necessarily reliable.) Increase income of US performers and record companies: costs shared by foreign and US consumers, and possibly songwriters/musical publishers. Might be more acceptable if we can figure out some way to prevent the performers from bargaining away their rights to the record companies. Record companies may also fall apart so that we no longer have four major labels but multiple smaller companies; entrepreneurial performers. So even if we don’t care about the labels now, as they start to look more like performers we might think increasing their income is good. Replace mechanical royalties lost to unauthorized downloads.

Broader royalty base could lower individual royalty rates: right now the royalty base is tiny, so for the royalties to be of any benefit the rates have to be very high, leading to numerous complaints. Part of the justification is also to level the playing field between digital and terrestrial.

Objections: Broadcasters say, don’t take my cake. Songwriters/publishers: don’t take my cake. That money has to come from somewhere. Broadcaster etc. says: I’m paying all I possibly can now.

Gatekeeper concerns: producer/performer veto over licenses will block royalty opportunities for songwriters. Equitable remuneration v. exclusive right?

These objections are as old as the Rome Convention itself.

Gatekeeper concern is addressed by making it a statutory license; 114(i) addresses the cake problem—Congress intends that royalties payable to copyright owners of musical works shall not be diminished in any respect; royalties for sound recordings shall not be taken into account in setting royalties for musical works in any governmental proceeding. This is a big barrier to change and needs to be fixed; shows the influence of songwriters and music publishers through ASCAP/BMI. Means that the broadcasters lose. Current proposals include this language, though, and even purport to extend it beyond governmental proceedings to “otherwise” taking musical works royalties into account, which is mysterious.

How should rates be set? Joint mechanism of negotiation for performance royalties for sound recordings and musical works (likely to end up before government body anyway, whether court or copyright tribunal), or administrative proceeding (as in Canada)? Separate mechanisms so that one body doesn’t think about both? (Note that §114(i) goes only one way; doesn’t say you can’t think about musical work royalties when setting royalties for sound recordings.) Without coordinated proceedings, you end up with inefficiency.

Complete independence of rate settings: risk of unreasonably high cumulative royalty burden.

Arguments that songwriter/publisher rate should be higher because new musical compositions are more valuable/important than new performances and thus deserves a greater incentive; it’s harder to write new music than to perform, so the composer’s share should be higher.

Record companies say the opposite: public listens more because of performers than because of underlying composition. Costs/risks of producing a recording are higher than costs/risks of producing and marketing a song. Royalties for recording have to be split more ways (record company, performers)—except that most winds up in record company’s hands anyway. Recording has shorter commercial life. Performer’s career tends to be shorter than the writer’s career. But note that writers aren’t in demand for tours and T-shirts. Also argued in hearings: Cable companies pay 41.5% of gross revenues to show films; we want that much!

Implementation will require database of rightsholders: all record producers and featured performers; music unions disperse nonfeatured performers royalty widely so don’t need that recordkeeping. Foreign databases reflect a shorter term: life plus 50—they’ll need to change their ways so that their rightsholders have a chance of getting royalties from the US. Sound recording copyrights restored under 104A—a new class of orphan works? Also, termination of transfers by performers: how will this be done and tracked, if they aren’t works for hire? Pre-1972 recordings also at issue: older rightsholders need to be identified.

Tracking usage will also be at issue. Currently terrestrial radio doesn’t have much of a burden; how much burden can we place on users? Can we require interested parties to use monitoring services as ASCAP/BMI do and use extrapolation where data unavailable?

Rate setting: percentage of gross revenues? Can’t do that for all types of users (clubs v. grocery stores). Square footage of establishment? (UK does that for sound recordings and musical works both, though they use different increments of footage for each.)

Derivative works: newly created ones will need public performance license as well as master use license (which they need now). What about preexisting works? Do they need to stop performing until there’s a new license, or some grandfathering? What about existing licenses? (That was my q: an issue of previously granted licenses, e.g. filmmaker to broadcaster: who’s responsible for clearing newly granted rights?)

110(5) for sound recordings? We violated TRIPS before, why not again? Would upset our WTO partners and be grounds for countries to fail to give us reciprocity.

Heymann: what do you think?

LaFrance: she’s persuaded by the argument for bringing additional money from overseas, and by the argument that there’s no principled distinction. We don’t just award benefits to screenwriters of movies; filmmakers get a public performance right. Horizontal equity.

Boyden: sympathetic to broadcasters’ cake argument. Maybe if we were designing from the ground up we’d do it differently.

LaFrance: but every other kind of artist has a public performance right.

Peter K. Yu, Five Ways to Make the Entertainment Industry's Enforcement Strategies More Convincing

Stop comparing downloading music to stealing a car. No one can download a car.

People only go on to YouTube to listen to studio music. They are missing out on new opportunities/business models on social networks.

Music communities also make unconvincing arguments. Herbie Hancock: Just because record companies give artists a bad deal doesn’t mean that everyone else can go and do worse.

1. Show the human face. MPAA did it later on, but not very successful because it was last-ditch. Focus on the people working hard on the film crew, etc. A lot of us get interested in copyright because of an interest in helping authors. Not because of an interest in helping investors. A lot of times authors sign away their rights. We don’t hate copyright, but we don’t like the current system that keeps authors from getting much. Even maximalists focus on authors; they aren’t interested in the industry as such.
2. Provide more credible empirical evidence. Some of the figures are ridiculous: $600-900 billion in losses? Look at that range, not just its size. Don’t assume that one copy is one sale. New figures look at “retail value” of pirated sales. But a person who buys at $1 may not buy at $10. GAO points out that copying also benefits other sectors, especially tech. Industry argues that its data is still better than those of the Chinese government—but (1) that’s a terrible baseline, given how ridiculous it would be to trust the Chinese government and (2) that is not a very good argument if we want to go to a WTO panel.
3. Focus on bad guys. Commercial piracy is a different matter, even for most restrictionists. Much more different to talk about students as criminals. (I think Lawrence Liang poses some interesting challenges to that argument.) Leads to the response of the EFF: “When you go trawling with a net, you catch a few dolphins.” Standard principle: Better that ten guilty persons escape than that one innocent suffer.
4. Develop a generally accepted sense of priority. “Human rights issues have misdirected our engagement on IP issues!” If we are asked to pick free speech, free press, privacy, and fair use or pick the industry’s bottom line, plenty of people will pick the former. ACTA is a good example.
5. Don’t use foreign policy as an excuse. ACTA is also a good example here. Also note that digital/online piracy is distinct from that involving optical disks. Government officials in Asia say pirates are now complaining they can’t compete with digital piracy.

Q: Cultural arguments on copyright: similar to arguments people make in China or India that our country needs stricter speech laws because of our culture?

A: Copyright provides a pretext for a lot of governments who want strong control of speech to go after others. E.g., Russian authorities using alleged piracy of Microsoft software to go after environmental activists—seized all computers and records. Exposes donors and blocks activism. Neil Netanel made this point: copyright as engine of censorship.

My q: about point 3 above.

A: you can buy dolphin-free tuna; but the industry is not willing to work out simple ways to avoid sacrificing dolphins. Maybe we need to look at other business models that, for example, don’t involve catching tuna but go after other fish. W/r/t Liang: Yu’s reaction has been historically that we should instead adopt open source software. He thinks also that we can’t take Liang’s position when we’re engaging with the industry because they simply won’t give any credibility to someone who takes that position. That cuts off the possibility of dialogue over access/digital divide. (There’s an interesting question over who gets written off as not worth engaging with here! Apparently (I think this is probably true) we have to pick one or the other, and maybe we end up picking the industry because of its raw political power; but then again the populations of China and India have some too.)

In dialogue with Heymann: Enforcement strategies can affect business models. Problem: established players are not that enthusiastic about new models.

Boyden: these arguments don’t fit on bumper stickers: can they be persuasive to the public or to Congress? And why not pay investors back?

A: This is difficult. But talking about artists in the middle is important, because the top ones will always get paid. There is no alternative: otherwise the industry has already lost the war of ideas.