The Demise Of Copyright Toleration

from the permissionland dept

In the Supreme Court oral argument (p. 12) of MGM Studios, Inc. v. Grokster, Ltd, Don Verrilli, attorney for the Recording Industry Association and other content owners, raised eyebrows:

“The record companies, my clients, have said, for some time now … that it’s perfectly lawful to take a CD that you’ve purchased, upload it onto your computer, put it onto your iPod.”

Counsel for these content owners seemed to be acknowledging, before our highest court, that if you copy a prerecorded song into a more convenient format strictly for your own use it is a fair use under Section 107 of the Copyright Act. But less than a year later they explained away the statement that the Court transcript had “attributed” to their attorney. In a filing with the Copyright Office in the 2006 round of use exemptions under the Digital Millennium Copyright Act, counsel for a group of content owners, including the RIAA, said (n.46, emphasis added):

“Nor does the fact that permission to make a copy in particular circumstances is often or even routinely granted, necessarily establish that the copying is a fair use when the copyright owner withholds that authorization. In this regard, the statement attributed to counsel for copyright owners in the MGM v. Grokster case is simply a statement about authorization, not about fair use.”

Although denying fair use, these content owners were acknowledging a larger truth about copyright, the Internet, and even the law in general: It works largely due to toleration. Not every case is clear; not every outcome can be enforced; and not every potential legal outcome can be endured. Instead, “grey area” conduct must be impliedly licensed, or at least tolerated.

Counsel then or now could not have cited a single court holding on whether the private, noncommercial recording of a song is a lawful fair use. Long before the Supreme Court in Sony Corp. of America v. Universal City Studios, Inc. said that video home recording from broadcasts as a fair use, the music industry could have pursued consumers for home audio recording from vinyl records. But the risk of losing and establishing a bad precedent was too great.

Toleration endured because fair use, and the practicalities of enforcement, had to be endured by content owners. They recognized that their own creative members also relied on fair use in adapting and building on the works of contemporaries as well as earlier generations. They also realized that offending consumers by suing them might not be a good idea – a reason (in addition to the possibility of losing) why the Sony plaintiffs dropped the individual consumer defendants they had originally named.

But one of the virtues of fair use is that it often points to directions that authorized users had failed to notice. And once “the street” has shown the way, the content owners cite the new genre as a form of “derivative work” – and seek to monetize it. The Supreme Court, in the course of protecting a parody of Pretty Woman in Campbell v. Acuff-Rose Music, Inc., left the door to this grey area wide open:

“The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop.”

Those with a stake in precedents still approach this door with caution. But the emergence of Internet search and tagging, social media, and troll lawyers has meant that the climate of toleration may be ending, as the door to grey areas is being forced closed.

  • First came the patent trolls – plaintiffs who essentially buy the right to sue, with little to lose from any adverse precedent. They find, sue, and harass entrepreneurs, retailers and consumers, as leverage for settlements.

  • Then came the copyright trolls – rights aggregators and their lawyers who find web and social media postings and links that were posted under assumptions of fair use, rights holder marketing encouragement, or toleration. Consumer defendants are accustomed to seeing such posts by rights holders themselves; they assume that any complaint about their own use must be spam.

  • Classic copyright “troll” clients have been pornographers. But rights aggregators and their attorneys have now branched out to, and beyond, making deals with individual photographers and cartoonists who seek to further monetize their work. At least one has signed up major music publishers as clients and moved from harassing school and college marching bands and choirs to threatening symphony orchestras. They threaten to sue over commissioned or in-house arrangements as derivative works, in need of an additional license beyond blanket performance rights – a grey area long respected and tolerated by the music industry. (A strict interpretation of such a “right” would mean the end of academic and group member jazz arranging of copyrighted works.)

Now to apply the coup de grace to implied license and toleration comes the CASE Act – “Copyright Alternative in Small-Claims Enforcement Act of 2017 – H.R. 3945, before the House Judiciary Committee. It disregards grey areas and would destroy the toleration that has made copyright viable in the face of swiftly changing times and technologies. It would set up “commissioners” within the Copyright Office to rule on “small claims” cases without precedent or appeal on the merits to any court. Yet “statutory damages,” pursued at the discretion of the plaintiff, could still reach $30,000.

Techdirt recently reviewed here what a bad idea this bill is. It is also probably unconstitutional. But a larger issue is what such a law would say about copyright, and about grey areas and tolerance. It denies the existence and necessity of each. This may be the biggest reason why this bill should never become law.

Guest contributor Robert S. Schwartz practices law at Constantine Cannon LLP. The views expressed are his own.

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Comments on “The Demise Of Copyright Toleration”

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20 Comments
PartTimeZombie (profile) says:

Re: $30 000 is NOT a small claim

I’m not sure extortion is quite the right word.
Laws in the US are proposed by, and sometimes written by the interested industry group.
These industry groups are the same interests that fund the lawmakers election campaigns.
The real problem here is not really copyright, but raises the question of who the US government system is really run for.

discordian_eris (profile) says:

Does anyone here honestly think that anyone appointed by the Orange One will do anything but fuck over ordinary people?

Slight rant here. Stop calling ordinary folks consumers! We are not consumers, we are just plain citizens. Calling all Americans consumers is demeaning and letting the politicos and regulators frame the debate. It helps no one and helps to instill a mindset that is toxic to America. It does nothing but reduce all of us to mobile cash cows, here exclusively to funnel money to the very corporations that are buying laws, Congress critters, Presidents etc. It’s not a left/right thing. It’s about not allowing them to define us as looters and parasites in their Ayn Rand addled minds.

discordian_eris (profile) says:

Re: Re: Stop calling ordinary folks consumers!

We, the consumers, are the top of the economic food chain. It exists to serve us, we do not exist to serve it..

Not in the US. Think back to right after 9/11 and how Bush was urging ‘consumers’ to go out and consume to show the terrorists they had not one. Think of all the banking crises half a decade later. Think of the disastrous laws and regulations that funneled wealth ever upwards and insured that anyone outside the obscenely rich was forced to deal with declining wages in terms of purchasing power. Think of how corporations use their cash to buy back stocks to enrich only their wealthiest stockholders. We haven’t been anywhere near the top of the economic food chain. And unless something drastic changes, no one outside the 1% will ever approach the top. Not in America.

Anonymous Coward says:

I remember when the usual trolls – horse with no name, out_of_the_blue, average_joe etc. insisted that there was no way that copyright didn’t allow for backups of your music and media, and the only reason anyone was bringing it up was to drum up dissatisfaction with the RIAA.

Turns out everyone’s concerns were right on the money and the trolls were lying through their teeth as usual. I’m shocked, I tell you. Shocked!

crade (profile) says:

what the author labels tolerance I would call selective enforcement. The goal being not so altruistic but instead to keep everyone uncertain about what is legal and also what will be enforced to create a chilling effect for many consumers. Those that risk the uncertain law being those that would most likely also rebel against the most egregious restrictions of their rights.

Grey areas are not toleration from the copyright holders, they are to ensure the public tolerates really terrible copyright laws. I’m all for 100% to the letter and equal enforcement for all. See how long people put up with it before there is reform.

Jeroen (profile) says:

Let’s hope the old saying still holds true: “The best way to get a bad law repealed is to enforce it strictly” Let those bad actors try to enforce their claims until they become such a PITA that the law will be changed. The more ridiculous copyright becomes, the quicker bad actors will be tempted to abuse it.

Preferably new laws will be following the philosophy that since copyright is a trade regulation, nothing that happens within the privacy of the home or within the circle of relatives and friends, including postings on personal websites and social media, is relevant to it.

We already see some courts in some countries take the position that the copyright interest in private copying using torrent sites, etc., does not balance against the privacy rights of the person involved in such copying, and it would be good to have that encoded in law.

Jeremy Lyman (profile) says:

Let me ask my lawyer

Not every case is clear; not every outcome can be enforced; and not every potential legal outcome can be endured. Instead, “grey area” conduct must be implicitly licensed, or at least tolerated.

Hey Abe, what do you think about this "grey area" reverse lottery screwing people at random to keep everyone in constant fear?

"The best way to get a bad law repealed is to enforce it strictly."

Hmmm, yeah that’s smart. Thanks.

amozabael (profile) says:

It's all about greed and an entitlement attitude.

You cannot really seperate one of the most basic of instincts from law once it is pandered to by the law.

The whole idea of IP Laws in the first place was to prevent the stagnation of human progress. But it has now become a method of derailing progress for ones own greed and selfishness.

The entitled self-serving millenial generation will make this 100 times worse once they take over the world.

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