More Details On Copyright Register Maria Pallante's Call For Comprehensive, 'Forward-Thinking, But Flexible' Copyright Reform

from the details,-details,-details dept

On Friday, we had two stories breaking the news that the Register of Copyright is expected this week to call for comprehensive copyright reform, including both a slight reduction in term as well as some of other changes. It’s somewhat surprising that (as far as I can tell), no other publications are reporting on this, considering the magnitude of this bit of news. There was a brief bit of speculation in Billboard, but most other publications have stayed silent so far.

Today we have even more details. First, we have Pallante’s expected testimony on Wednesday before the IP subcommittee of the House Judiciary Committee. It’s a pretty short and simple piece that basically says “let’s get this process started, because Copyright Reform is going to be a long and arduous process, but it needs to be done.” And, as we noted last week, it sounds like a lot of stuff is on the table.

It has been fifteen years since Congress acted expansively in the copyright space. During that period, Congress was able to leave a very visible and far-reaching imprint on the development of both law and commerce. It enacted the Digital Millennium Copyright Act (“DMCA”), which created rules of the road for online intermediaries (e.g., Internet service providers) and a general prohibition on the circumvention of technological protection measures (so-called “TPMs”) employed by copyright owners to protect their content. The DMCA also created a rulemaking mechanism by which proponents could make the case for temporary exemptions to the TPM provisions in order to facilitate fair use or other noninfringing uses (the “section 1201 rulemaking”).

Nonetheless, a major portion of the current copyright statute was enacted in 1976. It took over two decades to negotiate, and was drafted to address analog issues and to bring the United States into better harmony with international standards, namely the Berne Convention. Moreover, although the Act is rightly hailed by many as an accomplishment in balance and compromise, its long trajectory defeated any hope that it could be effective into the 21st century In fact, former Register of Copyrights Barbara Ringer, who had worked closely with Congress for much of the 1976 revision process, later called it a “good 1950 copyright law.”

I think it is time for Congress to think about the next great copyright act, which will need to be more forward thinking and flexible than before. Because the dissemination of content is so pervasive to life in the 21st century, the law also should be less technical and more helpful to those who need to navigate it. Certainly some guidance could be given through regulations and education. But my point is, if one needs an army of lawyers to understand the basic precepts of the law, then it is time for a new law.

For the most part, I absolutely agree — especially that last line. I will note that, Pallante, who has been stung repeatedly in the past for displaying a very strong bias towards copyright maximalism, is clearly being much more careful in these remarks — something that we should all appreciate. In her talk to Congress, a number of the things she suggests should be reviewed are things that many of us here would agree are in dire need of study and updating.

A central equation for Congress to consider is what does and does not belong under a copyright owner’s control in the digital age. I do not believe that the control of copyright owners should be absolute, but it needs to be meaningful. People around the world increasingly are accessing content on mobile devices and fewer and fewer of them will need or desire the physical copies that were so central to the 19th and 20th century copyright laws.

Moreover, while philosophical discussions have a place in policy debates, amending the law eventually comes down to the negotiation of complex and sometimes arcane provisions of the statute, requiring leadership from Congress and assistance from expert agencies like mine. The list of issues is long: clarifying the scope of exclusive rights, revising exceptions and limitations for libraries and archives, addressing orphan works, accommodating persons who have print disabilities, providing guidance to educational institutions, exempting incidental copies in appropriate instances, updating enforcement provisions, providing guidance on statutory damages, reviewing the efficacy of the DMCA, assisting with small copyright claims, reforming the music marketplace, updating the framework for cable and satellite transmissions, encouraging new licensing regimes, and improving the systems of copyright registration and recordation.

In her speech, she also highlights that the public interest is the most important thing, but also notes that the interests of creators are intertwined with those of the public. Again, we agree, though I think that we agree in different ways. Her focus appears to be mainly on the full-time, professional content creator, whereas we believe that any law must recognize that nearly everyone “creates” content these days, and must take that into account.

If Congress considers copyright revision, a primary challenge will be keeping the public interest at the forefront, including how to define the public interest and who may speak for it. Any number of organizations may feel justified in this role, and on many issues there may in fact be many voices, but there is no singular party or proxy. In revising the law, Congress should look to the equities of the statute as a whole, and strive for balance in the overall framework. It is both possible and necessary to have a copyright law that combinessafeguards for free expression, guarantees of due process, mechanisms for access, and respect for intellectual property.

To this end, I would like to state something that I hope is uncontroversial. The issues of authors are intertwined with the interests of the public. As the first beneficiaries of the copyright law, they are not a counterweight to the public interest but instead are at the very center of the equation. In the words of the Supreme Court, “[t]he immediate effect of our copyright law is to secure a fair return for an ‘author’s’ creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.” Congress has a duty to keep authors in its mind’s eye, including songwriters, book authors, filmmakers, photographers, and visual artists. A law that does not provide for authors would be illogical —hardly a copyright law at all.

Separately, the Copyright Office has released the full text of her speech at Columbia University from two weeks ago, in which she lays out her ideas in much greater detail. It’s an interesting read, and I hope that most people here will take the time to read through the whole thing carefully before jumping into the discussion. There is a lot in there to process — some of it good, some of it troubling, some of it that requires more thought and study. Assuming that Congress does move forward on this point, there is going to be an awful lot of back and forth over the next few years, and it wouldn’t surprise me if it takes a decade or more before something is finally hammered out.

In her speech, Pallante, (not surprisingly) says many of the same things as in her upcoming testimony. She talks about making copyright law “forward thinking but flexible” which is a good way to think about it — though, I imagine that just what that means will vary quite a bit based on where you sit in this debate.

The next great copyright act must be forward thinking but flexible. It should not attempt to answer the entire universe of possible questions, but, no matter what, it must serve the public interest. Thus, it must confirm and rationalize certain fundamental aspects of the law, including the ability of authors and their licensees to control and exploit their creative works, whether content is distributed on the street or streamed from the cloud.
This control cannot be absolute, but it needs to be meaningful. After all, people around the world increasingly are accessing content on mobile devices and fewer and fewer of them will need or desire the physical copies that were so central to the 19th and 20th century copyright laws. Thus, Congress has a central equation to consider today: what does and does not belong under a copyright owner’s control. Congress also will want to consider the exceptions and limitations, enforcement tools, licensing schemes, and the registration system it wants for the 21st century.

She then goes through the big list of “major issues.” First up is the performance right. In the US, Congress decided long ago that since radio was a form of advertising for music, radio stations do not need to pay royalties to performers (they do need to pay songwriters/publishers). Most of the rest of the world does have to obtain a performance right however, and for years there’s been a push from the labels (and the Copyright Office) to “harmonize” this and basically force radio stations to pay an RIAA tax for playing music. As I’ve argued in the past, this is somewhat silly, since the history of radio is littered with stories of payola, in which the labels funneled huge wads of cash to radio stations and their employees to get their music on the air. In other words, if left to the free market, the market has said that labels value airplay so much they’ll pay for it — yet they’re looking for legislation that requires the reverse: where radio stations should be expected to pay labels. I still haven’t seen how that makes much sense, but given the decreasing importance of radio (though, yes, it is still important today), and the importance of many of the other issues discussed, the performance right issue will almost certainly get rolled up into any big reform effort.

She also suggests a clarification on “the distribution” right, to determine whether or not you actually have to distribute, or if merely “making available” violates that right. The courts have more or less been split on the issue with a few rulings in either direction. Not surprisingly, I strongly believe that there needs to be evidence of actual distribution to violate the distribution right, and merely making available does not violate that right (though, certainly should put you at risk of violating that right). Pallante does not come down on any particular side, but notes it as an open issue.

The scope of the distribution right also is a central theme today, as courts work through whether and how it may be implicated and enforced in relation to use of works over the Internet.58 One key issue in the courts is the degree to which a claimed violation of the exclusive right to authorize distribution of a work requires a showing of actual dissemination of a work or whether the act of making the work available online is sufficient.

Next up: incidental copies. As Pallante rightly notes, “new technologies have made it increasingly apparent that not all reproductions are equal in the digital age.” Specifically, the nature of the way computers work is that they are giant copying machines, and you could argue that much of what they do is infringement, but there is growing concern that “incidental” copies made in the process of computing should not be considered infringing. Pallante points out that Congress has dealt with this in the past through duct-taping on bits and pieces to the Copyright Act to exempt certain types of copies, which (though she doesn’t mention this) leads to convoluted rulings like the one in the Cablevision remote DVR case, in which the court knew it shouldn’t be infringing, but had to twist itself into a series of complex knots to make that argument under existing law.

From there we get into enforcement, which kicks off with some implied praise for “voluntary” actions like the six strikes plan, but also a hint of support for SOPA-like restrictions, specifically calling out payment process, advertising networks, search engines and internet service providers as “having a role” in enforcing copyrights. That should be closely watched. Similarly, she highlights another issue that was in SOPA: expanding copyright coverage to go against “streaming.”

One critical issue is the ability of law enforcement to prosecute the rising tide of illegal streaming in the criminal context. Streaming implicates the copyright owner’s exclusive right of public performance: it is a major means by which copyright owners license their rights in sporting events, television programs, movies, and music to customers, who in turn access the content on their televisions, smart phones, tablets, or video consoles. Under current law there is a disparity that may have once been of little consequence but is today a major problem: prosecutors may pursue felony charges in the case of illegal reproductions or distributions, but are limited to misdemeanor charges when the work is streamed, even where such conduct is large scale, willful and undertaken for a profit motive. As a practical matter, prosecutors have little incentive to file charges at all, or to pursue only those cases where the rights of reproduction and distribution are also at issue. This lack of parity neither reflects nor serves the digital marketplace.

Again, this was a part of SOPA (and while not a part of PIPA, there was a separate Senate bill that covered this concept, which resulted in the famed Free Bieber campaign. While Pallante presents this in a matter of fact manner, it is not nearly as clear cut as she states. After all, we’ve seen that the government is already going after “streaming” sites, like TVShack, ChannelSurfing and NinjaVideo. In those cases, we often see that the government has a very dangerous (i.e., extremely confused) understanding of how internet streaming works, often being willing to blame site operators for third party actions, and quick to blame a platform site for content streamed from third parties, without ever directly touching the streaming site. The war against streaming sites is incredibly misguided, and is the latest in a long series of attempts by the entertainment industry to lash out at enabling technology when it should be learning how to use it to their own advantage. It’s disappointing, though not surprising, that Pallante is offering up clear support for further criminalizing this area, in a manner that will almost certainly be abused to create chilling effects on innovation.

Also among possible reforms: small claims court for copyright infringement. Copyright is limited to federal court, and as someone who was just (ridiculously) threatened with a “small claims” court over a bogus copyright issue, we’re certainly well aware of why it’s a good thing to keep copyright out of small claims courts. Last year, we had an even more detailed discussion about the issue in the form of a guest post from the folks at New Media Rights.

Then we get to one of the big ones: statutory damages:

This brings me to statutory damages. Some would eliminate the precondition in section 412 of the Copyright Act that limits the availability of statutory damages to those who register with the Copyright Office in a timely manner.74 They believe that it places an undue burden on the people who need statutory damages the most but are least likely to be aware of the condition, namely authors. Cost is also an issue, particularly for prolific creators like photographers, who may be unable to register each and every work under a separate application and have for years enjoyed a reduced rate through a group registration option. This gives photographers the ability to claim statutory damages, but often without providing effective public disclosure of what the group registration covers. Section 412 also acts as a filter, reducing the number of claims from copyright owners and the level of exposure for infringers. Unfortunately, it does this for bad faith actors and good faith actors alike.

Section 412 was designed as a precaution and an incentive in 1976 — a time when the law was moving to automatic protection and many were worried about the ramifications for authors, the public record and the Library of Congress’ collection. Section 412 thus creates a bargain: the copyright owner preserves his ability to elect statutory damages in exchange for registering, thereby ensuring a more complete public record of copyright information and a better collection for the Library of Congress.

[….] More globally, arguments abound on the subject of statutory damages, suggesting that they are either too high, too low, too easy, or too hard to pursue. Statutory damages have long been an important part of copyright law to ensure that copyright owners are compensated for infringement, at least where actual damages are unworkable. The Copyright Act of 1790 included a provision awarding the copyright owner fifty cents for every sheet of an unauthorized copy that was printed, published, or imported or exposed to sale.77 Statutory damages should remain squarely in the next great copyright act irrespective of section 412. However, there may be plenty to do on the edges, including providing guidance to the courts (e.g., in considering whether exponential awards against individuals for the infringement of large numbers of works should bear a relationship to the actual harm or profit involved), and finding new ways to improve the public record of copyright ownership.

That, at least, is a tiny, tiny, tiny step towards a more reasonable look at statutory damages, but I’d argue it needs to go much, much further. As it stands today, statutory damage threats used against individuals, especially for use that is clearly for personal use, is a huge part of the problem.

She then moves on to the DMCA’s safe harbors and, as we feared, seems to be suggesting that they need to be revamped to take the burden off of copyright holders, and place it more on service providers. This is dangerous for a number of reasons, which we’ll explain shortly:

The section 512 safe harbors in particular have generated more than their fair share of litigation on issues such as eligibility for the safe harbor, inducement, and monitoring. Some of these issues were imaginable at the time at the time of their enactment, and others were not. There are other concerns that go more generally to the question of whether the burdens of notice and takedown are fairly shared between copyright owners and intermediaries.

This is the part that scares us most about any reform proposal — and, we fear, the key point as to why this is being discussed. Copyright holders have been trying to change the safe harbors for years, putting the burden for “enforcing” copyright onto intermediaries and service providers, turning them into copyright cops. The idea, as Pallante suggests, that this burden should be “fairly shared,” isn’t just misleading, but rather it makes no sense. The reason you don’t put the burden on service providers is they have no way of knowing if something is absolutely infringing. This was clearly demonstrated in the Viacom/YouTube case in which well over 100 files that Viacom sued YouTube over were uploaded by Viacom employees as part of their jobs in marketing. It is impossible for the intermediary to know, for certain, if works are infringing or not. This is about the “fairness” of the burden, but simple reality.

Furthermore, putting the burden on service providers does two horrible things. First, it locks in the large players like Google/YouTube who can invest in expensive filtering systems, but denies any new competition from entering the market. That’s just bad for innovation. Second, it will massively inhibit all sorts of new types of services that involve any “user generated” component, just on the fear that they could face massive liability because of an action of the user. None of this absolves liability on the actual person who is infringing, but placing such liability on the third party service provider is dangerous and counterproductive. We don’t blame Ford when someone speeds. We don’t blame AT&T when someone calls in a bomb threat. We don’t blame Bic when someone forges a check. Don’t blame service providers for infringement done by users.

While Pallante does also suggest some review of the anti-circumvention provisions, she appears to only focus on the triennial review process — and not the anti-circumvention process themselves. This is bad news. If they’re going to open up the safe harbors, at the very least, completely throwing out the anti-circumvention concept should be on the table. It’s a horrible part of the law that simply is not needed. Anti-circumvention only serves to make illegal actions that do not infringe copyrights. If you use an circumvention tool to infringe on copyright, we already have basic copyright to make that illegal. Making the creation, distribution and use of circumvention tools illegal on top of that only makes it harder for people to do what they want to do in manners that don’t infringe. For those who are infringing with such tools, it is already illegal. If we’re going to reform copyright law and the DMCA in particular, near the top of the list we should include the possibility of dumping the anti-circumvention “digital locks” stuff entirely.

Next up: first sale. She doesn’t take a stand here other than to say it needs to be looked at. I tend to hate “on the one hand, on the other hand” arguments, because they feel so wishy-washy. Take a stand. First sale rights are important. You should own what you’ve legally purchased without question. There’s no reason why the Copyright Office shouldn’t be able to take a stand in favor of that.

On the one hand, Congress may believe that in a digital marketplace, the copyright owner should control all copies of his work, particularly because digital copies are perfect copies (not dog-eared copies of lesser value) or because in online commerce the migration from the sale of copies to the proffering of licenses has negated the issue. On the other hand, Congress may find that the general principle of first sale has ongoing merit in the digital age and can be adequately policed through technology — for example, measures that would prevent or destroy duplicative copies. Or, more simply, Congress may not want a copyright law where everything is licensed and nothing is owned.

Moving on, we have a section on “exceptions and limitations.” As I’ve argued in the past, this is the wrong framing entirely. This should be known as the rights of the public, because that’s what it accurately describes. Labeling it as “exceptions and limitations” minimizes the importance of these items, despite the fact that they should be a central component of any copyright law. The UN’s “declaration on human rights” puts the rights of the public to share and participate in cultural life first, above the ability to “protect” content.

Unfortunately, Pallante fails to suggest a comprehensive review of this area, but rather focuses narrowly on carve outs and patches — such as for schools, libraries and archives.

On the question of licensing, Pallante suggests that we might be better off with some sort of blanket licensing for digital uses, while noting that with the variety of business models out there, the licensing landscape has been a total mess. It is true that current licensing regimes are a total mess, and have slowed the rise of important digital services. Tragically, at times, it seems that copyright holders themselves have been their worst enemies here, demanding as much money as possible upfront, making it almost certain that no digital service can go through the necessary growth period to build a sustainable, popular service that pays artists well. Instead, they strangle and cripple each new service to hit the market, demanding more and more upfront, such that we have a very limited marketplace, with few services that can succeed. At best, we’re left with one or two giant players, rather than a truly competitive market that helps to both support artists and to provide unique and valuable services to individuals. Unfortunately, Pallante’s talk does little to address this issue, other than to note that Congress may have a role in making licensing work better to reduce “gridlock.” We’ll see, but my fear is that this turns into another mess like the Copyright Royalty Board, in which you have a few ancient judges, with no understanding of the digital marketplace, setting ridiculously high rates.

Moving on to copyright term, as we reported, she calls for potentially rolling back the Sonny Bono Copyright Term Extension Act, such that copyright goes back to being life plus 50, rather than life plus 70, but leaves open the ability to get that last 20 years by proactively renewing for it.

Perhaps the next great copyright act could take a new approach to term, not for the purpose of amending it downward, but for the purpose of injecting some balance into the equation. More specifically, perhaps the law could shift the burden of the last twenty years from the user to the copyright owner, so that at least in some instances, copyright owners would have to assert their continued interest in exploiting the work by registering with the Copyright Office in a timely manner. And if they did not, the works would enter the public domain.

This both is and is not big news. It is big news in that this would be the first time that the US ever shortened copyright terms. From a symbolic standpoint, that is a big deal. It is also important in that it, at least, opens the door to returning to a system in which some portion of the copyright term requires proactive renewal. It’s not big news in the fact that life+50 is already insanely long and any competent copyright system should require proactive renewals way, way, way earlier in the process. As we’ve pointed out in the past, prior to the 1976 Act, most creators did not even bother to renew their copyrights after the first 28 years.

If the copyright holders themselves don’t value the copyright past 28 years, why are we automatically giving it to them for much longer. Now, obviously, Pallante is focusing on life+50 because that’s what’s in the Berne Convention, but we shouldn’t let the Berne Convention stop us from doing what’s right. And, some have suggested that you could potentially tiptoe around the Berne Convention by allowing renewals up to life+50, but not automatically going all the way there.

Next up, opting out of various collective licensing deals. Tragically, I had hoped she would also talk about the ability to “opt out” of copyright altogether, which isn’t really possible for the most part.

She discusses making copyright law more accessible. On this point, we agree entirely.

Finally, as noted earlier, the copyright law has become progressively unreadable during the very time it has become increasingly pervasive.

When the Copyright Act was enacted, it contained seventy-three sections and the entire statute was fifty-seven pages long. Today, it contains 137 sections and is 280 pages long, nearly five times the size of the original. As former Register Marybeth Peters observed in 2007, the current “copyright law reads like the tax code, and there are sections that are incomprehensible to most people and difficult to me.”

This is not merely a paradox; it is damaging to the rule of law. The next great copyright act should be as accessible as possible.

From there, she discusses “the policy process” itself, with a few head scratchers. In particular, I found it bizarre, and completely unsupportable, that she claimed that content from online business “can’t compete with that from traditional media businesses.” Really now? What is that possibly based on? And, even if you can make that statement today, will it be true next year? Five years from now? 20 years from now? Doubtful, at best. And, really, is the distinction even relevant any more? All businesses are online businesses today or they don’t exist.

Similarly, she jumps on the silly trope that “information wants to be free.” This statement tends only to be used by those who wish to mock the role of free information in the wider ecosystem, not by the digital natives it is often ascribed to. But, Pallante points to it, and then argues:

But in order to have a robust knowledge economy, we need content that is both professional and informal; we need content that consists of information, commentary, and entertainment, or sometimes all of these combined into one; and we need content that is licensed, content that is free, or in some cases, content that is licensed for free.

Whether or not all of that is actually needed may be an open question, but even if we assume it’s true, I find the implication that “professional content” needs be covered by copyright, fee-based and “licensed” to be highly questionable. I produce professional content for a living — you’re reading it right here, and yet we dedicate it to the public domain. While later on she does admit that perhaps some artists prefer “receiving credit to receiving payment” or to use Creative Commons and that “the law must be flexible enough to accommodate these decisions,” it still feels like she is suggesting that such uses are “amateur” and “informal” rather than professional.

I would think that if we’re doing a big rethink on copyright law, perhaps one key starting point would be to address the myth that copyright is the only way to make money from producing content. If we’re starting with that myth, then we’re going to end up in the wrong spot.

Finally, Pallante does, in fact, push for greater powers for the Copyright Office, effectively promoting it to full agency status, like the Patent and Trademark Office. While you can understand the desire there, and it is true that it might help the Copyright Office make some basic changes in policy on the fly without Congress (increasing flexibility), I think there is quite a reasonable fear that this will also lead to much greater regulatory capture. The revolving door between the entertainment industry and the Copyright Office has been well documented in the past, and we’ve seen how the Patent Office has tended to support gradual expansionism as well. Raising the Copyright Office up only seems likely to lead it to support more maximalism, instead of more reasonable policies.

In the end, she is thinking big, but there’s a lot to worry about in here, along with a few good things. Perhaps of even greater concern than Pallante’s thoughts, is that, for the time being any process in Congress will be lead by Rep. Bob Goodlatte, who chairs the House Judiciary Committee. While Goodlatte is slightly better than Lamar Smith — and, as he constantly reminds people in Silicon Valley, his son works at Facebook, Goodlatte has a long history of siding with the maximalists, and having little grasp of the importance of the public benefit in copyright.

Also telling is that nowhere in the entire speech did she mention anything about SOPA. Pallante was an unabashed supporter of SOPA, testifying before the House Judiciary Committee in favor of the bill back in 2011. The fact that the public rose up against it highlights how these issues have become a significant concern to the public, and one would hope that it would lead Pallante to make clear that any such discussion needs to take that into account.

Filed Under: anti-circumvention, copyright, copyright reform, copyright term, distribution, dmca, enforcement, fair use, first sale, incidental copies, licensing, making available, maria pallante, orphan works, performance rights, safe harbors, small claims court, st