Is The Supreme Court Just Completely Out Of Touch On Digital Copyright Issues?
For most legal scholars, the Supreme Court’s decision to uphold retroactive grants of copyright protection for formerly-public domain works in Golan v. Holder came as little surprise. The Court made it clear that it was doubling down on the framework set out in Eldred v. Ashcroft, largely deferring to Congress on these matters and giving wide latitude to what comports with the “traditional contours of copyright law.” What received less attention in the decision was the Court’s discussion of how a retroactive grant purportedly “promote[s] the progress of Science” as required by the Copyright Clause. And while it may seem like a largely academic point to some, the Court’s handling of the issue may actually be symptomatic of a legal system whose scholarship and case law have yet to catch up with the market realities of the digital age (or worse, may be actively ignoring them for political purposes).
In a short six-paragraph discussion at Section II(C) of the majority opinion in Golan, the Court tackles the contention that copyright legislation only serves its Constitutional aims if it spurs the creation of new works (which a retroactive grant, applying only to works already in existence, obviously does not):
Nothing in the text of the Copyright Clause confines the “Progress of Science” exclusively to “incentives for creation.” [Perlmutter, Participation in the International Copyright System as a Means to Promote the Progress of Science and Useful Arts, 36 Loyola (LA) L. Rev. 323 (2002)], at 324, n. 5 (internal quotation marks omitted). Evidence from the founding, moreover, suggests that inducing dissemination—as opposed to creation—was viewed as an appropriate means to promote science.
The reasoning here, which is fairly compelling, is that it’s not enough for a work to merely be created — for it to actually “promote the Progress of Science,” it has to be made adequately available for public consumption. Historically, a grant of copyright would incentivize this by providing the opportunity for monopoly profits to offset the cost of wide retail distribution. Problematically for the Court, however, this arrangement is no longer the most effective means to distribute a work; The Internet Archive told the Court as much in its amicus brief for Eldred:
Jack Valenti, President of the Motion Picture Association of America once said: “A public domain work is an orphan. No one is responsible for its life…it becomes soiled and haggard…” Jessica Litman, Digital Copyright 77 (2001). Before digital technology, Valenti may have had an argument – one could argue that it was so expensive to store, reproduce, and distribute physical works that keeping them out of the public domain may have resulted in more availability than letting them in.
With digital technology, however, this argument can no longer stand. Indeed, even Valenti now agrees that digital technology possesses the capacity to makes flawless copies trivial and worldwide distribution instantaneous. This ease of publishing and distributing means that material in the public domain is universally available.
It seems logical that, in an age where cheap hosting/bandwidth and peer-to-peer services have all but eliminated the transactional costs of making work available online, the dissemination of public domain content would be most widely promoted by not allowing monopolist copyright holders to place conditions on their replication and distribution (monetary or otherwise). Yet the Eldred majority ignored this sea-change in distribution methodology, deferring to Congress’s belief that increasing copyright protection “provide[s] copyright owners generally with the incentive to restore older works and further disseminate them to the public” — a belief based on hearings held in 1997, when the Internet had less than 70 million users and Congress had no idea how far public domain distribution methodologies would come.
In fact, surveying the various authorities marshaled by the Supreme Court to link copyright law with promoting greater distribution of works, it is striking how little post-Internet thought has been taken into account. The only actual case cited by Golan for the Court’s proposition (aside from Eldred) is Harper & Row, Publishers, Inc. v. Nation Enterprises (1985), which not only predates the publicly-available Internet, but concerned balancing the monetary incentive for a copyright owner to distribute (right of first publication) with the efficacy of that distribution (fair use quotation) – an economic analysis tacitly admitting that dissemination is bolstered by removing copyright protection. Justice Breyer’s dissent in Eldred reinforces this distinction, explaining that the Copyright Clause “assumes that it is the disappearance of the monopoly grant, not its perpetuation, that will, on balance, promote the dissemination of works already in existence.”
If it seems odd that the Supreme Court put so little critical thought into what promotes the widest distribution of a work in the digital age, the second-to-last paragraph of Section II(C) in Golan may be instructive. There, the court reveals the true engine of its decision:
A well-functioning international copyright system would likely encourage the dissemination of existing and future works. See URAA Joint Hearing 189 (statement of Professor Perlmutter). Full compliance with Berne, Congress had reason to believe, would expand the foreign markets available to U. S. authors and invigorate protection against piracy of U. S. works abroad, S. Rep. No. 103-412, pp. 224, 225 (1994); URAA Joint Hearing 291 (statement of Berman, RIAA); id., at 244, 247 (statement of Smith, IIPA), thereby benefitting copyright intensive industries stateside and inducing greater investment in the creative process.
Here we see the focus of the court is less on the restored works and more on protecting the wider copyright industry; by placating the origin countries of restored works, Congress believes it is protecting future works in those territories from less-than-national treatment. These theories (offered up by current and former counsel to beneficiary trade associations and cited as such by the Court) are not necessarily inaccurate, but reinforce that Congress’s primary goal in plucking works out of the public domain is not to actually promote their widest distribution. Rather than admitting this, however, the Court contorts prior case law and, indeed, logic itself to pretend that a paywall will somehow make restored works more accessible.
To me, this is what is most upsetting about the Golan decision. If the Court wishes to defer to a starry-eyed Congress that believes in attenuated links between copyright restoration, foreign goodwill, and market opportunities, it is entitled to do so. But it should at least be willing to admit that, in isolation, the restoration itself does nothing to “promote the Progress of Science.” To the contrary, it locks up works that have already been created and could be disseminated more widely than ever possible under the restrictions of copyright law. Instead, the Court doesn’t give public domain advocates a leg to stand on, and perpetuates a Luddite understanding of distribution methodology to do so. Hopefully, the Court will someday come to realize that a public domain work is no longer an orphan – the entire Internet is its family.
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And a drawing on a piece of paper can change as the ink and paper fade. I suspect the work would have to be in a far greater state of perpetual flux for that argument to fly, like a botanical garden (which there's case law on). Also, the tattoo artist probably has a sketch of the design on a more traditional medium, which I suspect how it gets deposited with the Copyright Office at the time of registration, negating the issue entirely.
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First sale doctrine applies only to the physical copy, not the underlying work. The underlying work is what's being reproduced in the game. In this context, first sale would mean that the player can cut off his own skin with the design on it and sell it to someone else. Which would be kind of gross, but legal (insofar as copyright was concerned).
The judge actually got this one right. "Decades of settled practice" by industry isn't a binding legal determinant. The plaintext of the law supports Flo & Eddie's position. Also, there's a difference between "express carveouts" to copyright law and "exceptions" thereto, the latter category being broader. The only express carveout to the California law is for cover songs (not broadcasting), but SiriusXM still got to litigate a bunch of affirmative defenses *for* their broadcasting (including fair use), so First Amendment concerns were definitely factored in. They just happened to lose on it, because there's nothing transformative about broadcasting songs for pure commercial gain. I agree that the law is silly, and there should just be a federal broadcasting right for all recordings instead of this stupid segmentation before and after 2/15/72, but that's something for the legislature to fix, not the judiciary.
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They're going much further than saying it's not an absolute bar - they're basically saying it will almost never apply (damages are always kosher within the three year SOL, and equitable relief only gets tossed in extraordinary circumstances).
The ruling is less odd if you understand the principle of Congress "occupying the field" with the Copyright Act. Nothing in the Act precludes equitable doctrines like secondary liability, but the rolling three-year statute of limitations definitely precludes something like laches. The majority gets it right - laches is a gap-filler. The courts only used it on copyright claims when copyright didn't have a federal statute of limitations (they were borrowing from state statutes). Once Congress laid down the three-year window, laches outlived its usefulness.
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The Supremacy Clause doesn't negate the anti-commandeering doctrine.
Of course, the Conan Doyle Estate is not done fighting. Not only has its lawyer said that the Estate is "exploring an appeal," but also hinted at using trademark law to stop other attempts at using the characters. Stay tuned on that front...
Yeah, good luck with that.
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But the call wasn't inquiring into abuse - it was asking if the transaction was personal or business. It would be no less specious to call a customer who just pulled cash from an ATM asking details on where he's planning to spend it.
I only just now thought of this, but...
I feel like we need a two-tiered system within the DMCA to handle situations like this one: a notice-and-takedown system for third parties who use a service anonymously (your garden variety lay-streamer), and a notice-and-notice system for third parties who preemptively provide a service with information sufficient to identify them in case of alleged infringement (like, say, an authorized event broadcaster). Couple that with harsh penalties for any unsuccessful infringement claims and you have a system that allows rights-holders to combat whack-a-mole infringement (since the infringing user will not likely challenge the claim), but also allows anyone responsibly utilizing copyrighted content to maintain that use with safety valves on both sides [the ability to identify them if the use isn't proper and a severe disincentive for rights-holders to pursue anything but the most blatant infringement]. I'm sure it's not perfect, but it seems like it could be a lot better than what we have now.
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Just because someone shows up to court unopposed doesn't mean the judge has to roll over for every legal theory he advances.
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God, you're obnoxious.
If the point of the diplomats is simply to enforce existing law, I'm not too uncomfortable with this.
If the point is to have them pushing for changes in the law beyond what's already on the books, I'm balking.
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I'm actually very much struggling to keep up with Techdirt during my prep, haha. I almost never go into the threads anymore... but I wanted to make an exception for this post. :) Thanks kindly! Just gotta treat it like a horrible, horrible full-time job for the next four weeks... oh, how I wish there was *any* intellectual property tested. Other than boring tort claims (trade secrets violations, etc.) that is.
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Oh no, U.S. copyright *protection* still applies for goods brought in from other countries; we have treaties to that effect with most every nation [mostly through Berne and TRIPS]. Just not the specific first sale exception, which the courts have interpreted as only attaching if the goods originate under U.S. law.
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If I weren't in the middle of preparing for the bar exam, I'd be reading Kirtsaeng right now so I could see why the hell the Second Circuit came to that conclusion. Can't wait to go back to reading about law I actually care about...
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I actually haven't read the full Kirtsaeng ruling, so thanks for pointing that out. IIRC, that case still revolved around Omega-like facts, correct? The guy bought foreign textbooks and resold them to U.S. customers? If so, the goods didn't make the "round-trip" described in Omega [lawful importation by the manufacturer], so the Second Circuit shouldn't have needed to address the defendant's argument as anything more than dicta. But you're right, once it gets to the Supreme Court, all bets are off.
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It could theoretically block it, or it least dangle liability over it. Things become very messy when you start having many links in the chain of title and awareness of the good's origins become shrouded in mystery to subsequent buyers, though. Right now, the chief area of enforcement in this field is when manufacturers create versions of their product for multiple regions at varying price points they believe are appropriate for those regions; they want to prevent resellers from snatching up copies in low-priced regions to flip in high-priced regions. Enforcement seems unlikely against people selling individual copies of works that aren't subject to that particularized business plan, but just having the uncertainty there is chilling enough. This is definitely an area of copyright law that needs to be vigilantly supervised to curtail abuse, and I'm not sure courts are cognizant of just how much collateral damage they might do in propping up these business models.
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If everyone in the official chain of distribution were located outside the U.S., this would work. But that would mean the copyright holders would have to accept not having a robust domestic market for their goods in return for stripping away first sale rights, since the only way to purchase their goods would be by either direct import or from an unlawful domestic importer/reseller. I can't imagine that making much market sense for most companies. Ultimately, I believe they're less interested in the casual buyer's ability to resell what they bought than they are with competing against their own products as sold by commercial-scale resellers who are plucking up versions of the product meant for low-income regions to flip in high-income nations.
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As soon as the manufacturer authorizes someone in the chain of distribution to bring the products into the U.S., the right of exhaustion (first sale) is triggered. That's what the Omega case spelled out. Unless the manufacturer plans to never offer their product in the U.S. and just assume everyone who wants it will import it from abroad, they'll have to accept some first sale attachment at some point.
I mentioned this in an earlier thread on the subject, but I actually think this is an interesting place where the Techdirt positions are in conflict. When the SSRC report in Piracy in Emerging Economies came out, it was championed as vindicating business model solutions to infringement rather than legal solutions. Specifically, it demonstrated that media was simply priced far too high in emerging economies, leading directly to piracy, and the solution was to make media more affordable. But if media was universally priced at levels acceptable to the most impoverished nations, its manufacturers would likely never recoup the costs of development. So the solution was to segment the markets, and price each regional offering according to what its population could afford. But if anyone can just pluck up the copies available in the cheapest market and resell them in the most expensive market, that business model is destroyed, and we've taken away one of the main methods for copyright holders to actually provide affordable options to developing nations.
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No and no. In both case, you're purchased a foreign product, not manufactured under U.S. copyright and not made subject to U.S. copyright by the manufacturer itself (or someone authorized on their behalf) lawfully importing it. The only way the Chinese-made goods would be subject to first sale here in the U.S. is if the manufacturer authorized them to be brought into the U.S. for sale. I think there are some exceptions in the law for small quantities of goods purchased for personal use, but not for commercial operations (like someone independently setting up shop to buy foreign-made goods specifically to resell them to U.S. buyers).