Fordham IP session: copyright

Fordham IP conference, Session 7:  Copyright 

U.S. Copyright Law: Where Has It Been? Where Is It Going?

Moderator: Morton David Goldberg, Cowan, Liebowitz & Latman, New York

Prof. Jane C. Ginsburg, Columbia Law School, U.S. Copyright Law: 20 Years Ago, Today, and What the Future Holds

New interpretive challenges include: who makes a copy—is there a volition requirement?  Then there may be a copy but not made by a commercial intermediary, and if it’s made by the end user then that’s a less attractive case.  Derivative works: does one have to intervene into the actual content to make a derivative work or is an overlay/complementary product also a derivative work? E.g., Duke Nukem, Family Movie Act where the intervention is in the playback not in the copy sold to consumers.  Also: is “sale or other transfer of ownership” an indication that the distribution right is limited to physical copies, since you can’t transfer a copy digitally; rather you create a new one?  Is distribution accomplished when there’s an offer or when a new copy has been created, so do you have to demonstrate that someone’s computer actually created/received a copy?  What’s a performance?  Is there a difference between a stream and a download?  Is individual delivery a pay-per-view performance or a private performance?  New business models have sprung up after Cablevision, including the Aereo personalized antenna system, now awaiting a preliminary injunction ruling. 

Public display: a right of real potential economic value in the digital world, as compared to the physical world where first sale dominated.  Still thinks the 9^th Circuit’s ruling that framing isn’t display if the source website provides the image is up for debate. 

Compulsory licensing is also a live issue; the compulsory license sets aside some income for performers, which is unusual. One used to think that full exclusive rights were the essence of copyright, but if copyright still has something to do with creators/performers, a compulsory license with mandatory setaside for authors/performers might look more attractive than a full exclusive right that they can’t actually enjoy because of contracts or works for hire.

From the creator perspective, the most important development of the last 20 years is Harry Potter. JK Rowling is the poster child for copyright, going from public assistance to riches greater than the Queen of England—a happy reminder of the centrality of the individual creator in copyright. Author has also succeeded in maintaining artistic control over her works, possibly because she was lucky enough to avoid a publisher that demanded control over everything in the first place.  HP is also an example of the importance of international copyright; has given rise to various lawsuits, including Tanya Grotter (held infringement in Netherlands), and Hari Potter (held infringement in India).  US: HP Lexicon case involving website (ok) and lawsuit over commercial publication.  The author of the Lexicon took too much and did too little—traditional fair use case.  Less traditional fair uses (or are they, she asks?  Answer: Yes.) include fan fiction. Over 75,000 stories on one site: JK Rowling doesn’t pursue those.  “Tolerated use.”  Goes under the radar.  (Okay, that’s just a misdescription. They may be unpursued and for good reason, but they are not “under the radar.”) 

HP also offers encouraging glimpses of author-managed work.  Pottermore released HP in ebook form, exclusive to the site.  (Here’s a more skeptical description of the DRM and here of the site, but the site’s young.)  Of course, not everyone is Rowling and can drive traffic to their sites, but Rowling started unknown too.

Close on a somber note: we’ve seen an increasing denigration of authors, romantic author bashing. The romance of crowdsourcing and communal creativity and altruism.  Rise/return of formalities, which are in many respects a good thing but historically have tended to screw authors.  Authors as a tax on industry.  A question for the future: are authors a drain on transactions on copyrighted works that will somehow get produced, or are they valued and autonomous contributors to the progress of knowledge?

Andrew P. Bridges, Fenwick & West LLP, San Francisco

Copyright was a private party for specialized industries for a long time.  Digital transition gave a great deal of new power to copyright owners.  Almost every action in the realm of human intellectual activity became subject to copyright law: e.g., reading a book; no prior right of copyright owner to control the experience of reading a book.  But now there may be a reproduction in the computer’s RAM, a reproduction to change devices, etc.

Marybeth Peters, Oblon, Spivak, McClelland, Maier & Neustadt LLP

Agrees with Ginsburg, especially on a somber note.

Michael S. Shapiro, Senior Counsel for Copyright, Office of Policy and External Affairs, United States Patent and Trademark Office

Technological adjuncts to copyright also matter—DRM, rights management information.  Enormously promising with respect to oldest interests of authors.

Tom Rubin, Chief Intellectual Property Strategy Counsel, Microsoft Corporation

Cloud computing era is distinguished by digitization of content itself but also seamless digital delivery.  Many favorable aspects—new forms of content being produced.

Q: how do we go about protecting the author in the US?  Euro-style moral rights, regulation of contract terms?  Collective rights management?  Something else?

Ginsburg: ideally all of those; realistically, moral rights are difficult though she’d like an attribution right, possibly through protected embedded CMI.  The way the law is written it’s not so easy to prevail on a CMI claim.  Restrictions on what an author can transfer/percentage remuneration requirements would be terrific, but she doesn’t see it as likely. When in doubt in the US we go for WFH.  The trend that favors the most seamless distribution of works also favors WFH because then you have to deal with only one rightsholder.  We see this with digitization of books—compare the new French law.  A wholesale transfer of digital rights to the publishers whether or not they got those rights from the publishers!

Q: death of romantic concept of publisher as well as of author.  Problems are not just technical but attitudinal and how the public sees IP.  Can we engage this?

Ginsburg: Authors’ voices have not been communicated as effectively as some other voices.  Think of SOPA debacle, which involved a supposedly plebiscitary rejection of a law whose text nobody actually read—there weren’t any authors in that debate, though she’s not saying whether SOPA would have been good. Disturbing that we haven’t heard from creators.  (Why would creators be advantaged in parsing the text of SOPA or predicting the effects it would have on the technology?)  The media’s attention has been on the big players in tech, producers.  All the way back to Napster, there was very little about actual composers/performers, and Metallica was portrayed as the bad guys when they sued.

Bridges: Copyright has lost legitimacy in the eyes of the public for several reasons.  Term extension created backlash; trans pacific partnership is now mandating that worldwide; going after a single mother in the Midwest for $1.5 million for 24 downloads was a bad idea; authors don’t seem, in public perception, to get anything out of copyright, so why would they be participating in SOPA; perception that record labels are screwing artists; public hears itself being demonized. He’s heard things at this conference showing disdain for the public and insulting the public—“nobody read ACTA, nobody read SOPA”: actually some did, and some of them objected!  When the debate is this brittle, a path forward is hard.  If there’s more than Don Henley showing up at a hearing—if there is a perception of a real relationship between fans and artists—then we have a way forward.

Q: The woman was offered $5000 to settle.

Bridges: does that matter?  He thinks it was $25,000, but they didn’t have to sue for millions.

Q from author/former leader of enforcement at a publisher/now CCC: our authors liked that we were able to go on the internet and remove illegal links/copies. It was a point of competitive differentiation for us. As much as he likes the idea of authors’ rights/control, the prevalence of unauthorized copies on the web is a challenge: authors as individuals have other things to do. Is there an alternative to pairing up with a large publisher?   

Goldberg: alludes to small claims issues. 

Ginsburg: not every author wants to be her own business manager; question is whether that role has to be played by traditional publishers taking 90% of the royalties.  Authors don’t just want to get paid afterwards; they need to get paid for the year it takes to write the book.  (These two sentences may have an inherent tension; at least the publisher will say that it needs a big cut to fund the people who might or might not pay out.)  Not every author is going to get seed money from Kickstarter.  We need systematic ways to support authors while they’re creating works we all want.  (Are there many noncelebrity authors who get advances before finishing any book?  Also, I’m sympathetic to these issues, but it’s complicated—if you want to play the violin, it’s just harder to become fabulously wealthy for a given level of talent than if you play the acoustic guitar and like to sing radio-friendly songs; what level of support should you be getting, privately or publicly?  Just as the pop music field is now relatively friendlier to really attractive people who can sing and dance than it might have been before the rise of video, the literary field is becoming relatively friendlier to people who are willing to engage in careful self-promotion and cultivation of a fanbase through direct or seemingly-direct contact.  That might be a bad thing; it definitely changes the content we get; but changing it in a way that actually works to fulfill our intentions for that change may be a lot trickier.)

Q: seems to be enthusiasm for exporting the label of fair use, at least, in Europe.  Same may be true for remuneration rights or contract law—EU and US versions differ.  Levies have been a huge problem for decades, never worked for anyone; collecting societies are also problematic. If you’re not JK Rowling, and you don’t have collecting societies, how do you deal with an intermediary?

Bridges: may need more competition for collecting societies.  Transaction costs are enormous.  Paying people not for the rights but for the business of obtaining the rights.

Q from CCC guy: microtransactions can add up to a real check through collective licensing. If it’s voluntary, it’s self-regulating, but involuntary tends to be a bit less so.  (One source of my CCC skepticism.)

Q from Canadian: We distribute money to Americans for rights you don’t recognize/reciprocate.  We have a single one-stop shop for performance rights, instead of 3.  Our idea seems to be spreading around the world and makes more sense than yours. 

Ginsburg, in response to Q about software: sense that programmers weren’t really authors seems to be creeping over to affect real authors.

Peters, The U.S. Copyright Office: Yesterday, Today, and Tomorrow

Big issues in the runup to the 1976 Act—library photocopying, cable retransmission—had heavy Copyright Office involvement. 

Copyright Office sees itself as helping Congress when it chooses to act, which might not be as often as it should.  If you look at the number of studies Congress has asked for, most of which don’t result in legislation, there are a few examples of action: after WIPO treaties in 1996.  TEACH Act (which one opponent called the Theft Act)—Congress sent them to work out a deal, and they did, §110(2).  But it’s too complicated to use, so everyone relies on fair use.  That was one of the successes!  But Office studies still bring attention to issues; then Congress has to act.  Will Congress update §108?  Doesn’t know!  It would be nice if we didn’t have to rely on fair use all the time; Congress does need to update the law.  One congressperson, recently: Congress doesn’t understand the internet, transparency or due process.  His position: You should worry when Congress takes up tech. 

New Register is very pro-author’s rights and has a strategic plan to make things better.  But it’s hard to see a bright future right now. If we care about authors and the system we have, we must work together to bring back respect for authorship and have a law that speaks to today’s balances.

David Carson, Copyright Office

Many exciting projects.  Small claims solutions, orphan works, §108, mass digitization; rogue website issue; criminal penalties for illegal streaming; public performance right for sound recordings (wait a couple of decades).

Small claims: there is a general problem with access to justice for people who don’t have much money.  The only place you can go for copyright is federal court, so you can’t go to small claims court.  For a copyright owner with a claim worth only a few tens of thousands, there’s not much you can do. The threat of statutory damages might help if you timely registered, but lawyers are unlikely to take that on contingency so you have hourly rates to pay.  What are the alternatives?  Existing royalty tribunal—probably not.  Federal small claims court, either adjunct to district court or separate. 

There is a right to a jury trial, but that’s not a spur to efficient, low-cost litigation.  (How many jury trials are there in copyright cases?)  So another possibility is to remove the exclusive jurisdiction in the federal courts for low-value claims.  You will lose some potential expertise, which not all federal district judges have, but hopefully you will get a judge who will do the right thing.  (I wonder about removal in such a system.)  Administrative law?  In the federal system, ultimately you need a judicial remedy, though.  Or group filings by representative organizations.

Office will start having roundtables this summer on the matter.  Next month at GW, there will be a roundtable on small claims in IP in general, including patent and TM.  May 10: hoping to get useful feedback.

Google Books threw orphan works into disarray; threw mass digitization onto the table as it hasn’t been.  Settlement is dead and nothing like a solution is likely to come out of it; maybe it’s a model but maybe not. No copyright legislation will happen this year; the taste for it has evaporated.

Section 108: study group report, 2008.  GBS also brought that to a halt, but we’ve picked up again. 

Mass digitization alternatives: various kinds of licensing options, though direct licensing is unlikely to work.  Voluntary CCC/publisher licensing.  Extended collective licensing where there’s representation of some critical mass, with an opt-out provision.  Statutory licensing in cases of market failure.  Is this something that we need to address through legislation?  It’s the notion of the day that we need to digitize everything, but maybe facilitating that with legislation isn’t required to make it work out ok.

Bridges: fee shifting and statutory damages didn’t seem to incentivize small claims. If we have small claims, is it time to reform statutory damages?

Carson: Office hasn’t looked at the issue, but when you talk about situations where companies engage in acts that might facilitate infringement of thousands of works at a time, a question worth posing is whether there ought to be a cap on damages in a single action when all the claims are related.  Trillions in dollars in damages; that’s worth rethinking.

Tom Rubin: ownership of rights can be unclear, which is a big impediment to licensing. Insufficient information means orphan works.

Howard Knopf: Canada has a simplified action with limited discovery/nothing live.  Not a lot of interest in it, not used much for whatever reason.  Our territorial courts have always had jurisdiction, but very little action. We have a flexible statutory damages regime where the judge can lower it.  We’re not as litigious, but you still might want to look at Canada.  Is there something to be done about copyright trolls as well?  Courts are acting.

Carson: not sure what role there is for Congress or the Copyright Office here—the courts have done a pretty good job. 

Knopf: Big record companies are still suing everyone in sight; could call them trolls.  Why Canada is different: genuinely, we’re less litigious. Used for collection matters on a fairly regular basis.

Q: if you consider state court small claims, then have you considered arbitration?

Carson: requires both parties to agree. You might get a lawyer to write a letter, but defendant’s counsel, if they see the value of the claim, will respond: go ahead and sue.  Mandatory arbitration: possibly as a prerequisite for court. But the problem with any system that doesn’t divert you to the state courts, you ultimately have to give either party to give a right to go to court.  Doubt you could mandate binding, nonappealable arbitration, which means you can increase costs for the copyright owner.

Q from Canadian: collection matters are typically open and shut, so smaller claims can work.  Knopf was involved in a similar small claims/expedited court for individuals.

Knopf: got close to being enacted, but was defeated. Would have set up tribunal for IP claims.

Peters: Google Books changed everything; time to move forward. Questions whether extended collective licensing is the solution, but it is time to examine the facts and see if it’s a viable alternative.