Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

In Suit With Publishers, Audible’s Defenses Raise Questions

Last Monday, the world’s largest distributor of audiobooks, Audible, had intended to launch a new service called Caption, a feature that uses voice-to-text transcription technology to display the text of an audiobook on a user’s screen in synch with the narration.  In late August, seven major publishers* filed suit against Audible, alleging that the unlicensed Caption feature amounts to copyright infringement of the underlying literary works.  The Publishers requested a preliminary injunction to prevent Audible from launching Caption pending further proceedings.  

According to Audible, the customer who wants to use Caption would request a transcription of the audiobook, which is then made available about thirty minutes after the request.  The customer is then able to read the book in caption form (no more than 15-20 words at a time) while listening to the narration, and he can also tap on selected words to link to dictionary or Wikipedia references.  The captions generated are imperfect (94% accurate), not unlike the syntactical or spelling flaws one sees in closed captioning on television.  

Audible states that it intends to store a requested transcript for a period of 90 days on its servers, and if no other requests for the same transcript are made in that timeframe, the file will be deleted.  All this transcribing, deleting, and re-transcribing looks a lot like a wasted effort designed primarily to circumvent a claim of direct copyright infringement, but perhaps more on that detail in a future post.  

For now, if Caption sounds generally like a useful “enhancement” to the audiobook experience, this is more or less the perception Audible is counting on in its response to the lawsuit filed on September 12.  The company’s brief states that Caption “was created to encourage deeper and better understanding of audiobooks for users who have chosen to have an audio-first experience.”  More particularly, Audible places considerable emphasis on  “struggling readers;” and although the potential educational value of Caption is not entirely dismissible, Audible has no intention of restricting its roll-out to students, or any identifiable “struggling” class of readers.  It hopes to offer Caption with nearly every book in its library, except those works the transcription software would be unable to render with 90+% accuracy.  Finnegan’s Wake?

Because Audible is a subsidiary of Amazon, and Amazon is one of the world’s most predatory companies on Earth, the courts, book authors, and the public should take a jaundiced—if not outright skeptical—view of Audible’s implication that its primary motive is to improve reading and literacy.  That ambition may be central to Audible’s founding, but Papa Amazon has a rather dismal track record for supporting the interests or rights of any individuals in its relentless pursuit of global distribution dominance.  

The Lawsuit

Simply put, the Publishers’ make clear that they licensed their audiobooks to Audible for distribution only and, therefore, the Caption feature amounts to an unlicensed, distributed-text version of a book.  Not only do the Publishers predict Caption may become a substitute for an eBook, they further note that Caption may quickly displace existing, legal technologies like Immersion Reading and Whispersynch, both of which enable users to link eBooks to audiobooks so that the words in the former are highlighted for reading along with the narration in the latter. 

In its defense brief, Audible responds that the Publishers exaggerate the potential harm of Caption, which Audible claims is too limited in both form and function to be perceived by users as a viable substitute for any kind of book-reading experience.  Audible also asserts that, at most, the Publishers have a breach-of-contract claim that does not implicate copyright law.  But just in case the court disagrees with that argument, Audible asserts that Caption is a “quintessential fair use,” a claim that rests primarily on the implication that Caption is “transformative” in its ability to help reverse downward trends in American reading.

Breach-of-Contract Defense Misrepresents Copyright Law

“Each Plaintiff granted Audible a license to its copyrighted works, and yet now alleges that Audible Captions infringes those licensed works. But the law is clear: by agreeing to those licenses, Plaintiffs waived their right to sue for copyright infringement as a result of licensed conduct. Thus, this Court need not reach the copyright issues presented here.“

Notice how words to the effect of “to distribute plaintiff’s sound recordings” are missing from that first sentence?  Audible is probably not being careless in this statement so much as it is being a bit too clever by half—using language that is too broad to accurately describe the nature of its agreement with the Publishers. As stated, Audible licensed the right to distribute sound recordings belonging to the Publishers and nothing more.  Consequently, its claim that the Publishers’ only remedy is to be found in contract law hinges on a misreading of copyright practice.

Copyright is not a single right, but a “bundle of rights,” which the author/owner may exploit or not as she chooses under a variety of license agreements.  For instance, the author may choose to license the translation of her novel to a specific publisher she trusts; or she may separately refuse to allow sequels to a story she feels should not be serialized.  These are two distinct examples of licensing options, both protected by the same statutory right to “prepare derivative works.”

In Audible’s claim, it seems that by omission and obfuscation, they hope to convince the court, at this preliminary stage, that their license to distribute sound recordings extends to a right to transcribe those recordings into captions simply because the contracts do not specifically prohibit this conduct.  This unusual claim reads to me like a strategy to get the court to deny the Publishers’ request for a preliminary injunction, which the court would certainly do, if it agreed that the complaint is limited to a contract dispute.  This would then allow Audible to enjoy the PR benefits of launching and promoting Caption while, presumably, negotiating with the Publishers in the matter.  But it is frankly hard to imagine how the court will find this argument tenable, let alone persuasive.

Defendant asks the court to reject out of hand the plaintiff’s assertion that the Caption feature constitutes unlicensed reproduction, display, and distribution of a book’s text—three rights enumerated in the copyright statute.  So, unless the court can find a rationale that Caption does not cause reproduction, display, and distribution of these works, it seems unlikely it will concur with Audible’s view that their conduct does not implicate a copyright complaint that warrants further proceeding.  

While it is possible to breach a license agreement in a manner that does not result in copyright infringement, such an interpretation in Audible would seem anathema to the way licensing usually works.  When a contract is written to grant a limited license, the copyright owner does not need to add a clause itemizing all other possible uses of the underlying work as being specifically prohibited.  More typically, the contract will clearly describe what is being granted followed by a concluding statement to the effect that “all other rights are reserved.”  

On that subject, the Caption feature demonstrates the fact that technological innovations can yield potential uses of copyrighted works that will not be anticipated at the time a contract is executed.  Despite this, the author does not abandon his right a priori to license a potential use that has not yet been invented or introduced to the market; and his rights cannot be abrogated wholesale in the name of “innovation.”  

This is one reason authors should hope the court proceeds with tremendous caution in this case—if not in response to what Caption appears to be at present, then with an awareness of what Audible/Amazon could have in store in the near future.  With that in mind, it is worth examining the underpinning of Audible’s fair use defense—namely that Caption can be a valuable tool for “struggling readers.”   

Is Caption Fair Use?

Contrary to the “not copyright” defense, the court could find Audible’s fair use claim somewhat more persuasive insofar as Caption does appear to share certain qualities with Google Books—at least in its present form.  The fair use claim rests principally on the grounds that Caption is “transformative” (under the first factor analysis) as an educational enhancement to audiobook listening; and that it is not a market substitute (under the fourth factor analysis) for either electronic or printed books.

Kevin Madigan at CPIP writes that Caption is not at all transformative because there is nothing particularly innovative about “turning” a book into readable text.  “Audible is reproducing the text of a literary work for the purpose of reading—whether for education or for entertainment—and that is the exact purpose of the underlying works of authorship,” he writes. This point is beyond dispute.  

Nevertheless, the court may be somewhat persuaded by a comparison to Google Books, which was held to be both transformative and non-substitutive in a finding this same court called “pushing the boundaries of fair use.”  There are reasons to find that Caption crosses those boundaries.  

Fair Use Factor One – Can Caption “Transform” Reading?

By alluding in its brief to broad trends in American reading habits, Audible seems to imply that Caption is an antidote to some rather dismaying data.  For instance, the brief notes, “36% of 8thgraders are reading at a ‘proficient’  or ‘advanced’ level while 24% are below ‘basic’ level …” Further, Audible observes, “One third of teens reported not reading any books for pleasure in 2016; yet they reported spending on average four to six hours per day online, texting, and on social media.”   

These statistics are sobering to be sure; and as the parent of a high-schooler and middle-schooler trying to encourage his kids to enjoy reading despite all those electronic distractions, I can relate. But with that said, it is hardly conclusive that more technological gadgets are a solution to the problem—a problem that, according to Audible’s own citation, is partly fostered by the omnipresence of tech toys in the first place.  So, it is conceivable that Audible is overstating Caption’s general value in order to seem a bit more “transformative” than it is.

It is certainly plausible that readers who struggle—either because of physical barriers, cultural-economic barriers, or plain bad habits—could achieve reading comprehension benefits from using Caption. But this possibility, for which there is not enough data, does not inherently support Audible’s “transformative” argument as a rationale to make nearly every book in its library available in Caption form to every customer worldwide.  That is a lot of market to cede to one company without license.

Morevoer, Audible’s implication that Caption might reverse reading trends at scale actually supports the Publishers’ position that the feature is not a “transformative” use so much as it is potentially a new way of reading.  If this became true, it would only underscore the fact that authors and publishers have a vested interest in that future; and at the same time, Audible’s implication that it might bring reading back actually undermines its non-substitutive claim under the fourth prong of the fair use analysis.

Fair Use Factor Four — Caption Is Not a Substitute?

Unlike Google Books, Caption makes the full text of a book available, so the court should be wary and cognizant of the likelihood that, with minor technological improvements and/or shifts in market dynamics, Caption could conceivably become an unlicensed market substitute for eBooks. So, authors should be very concerned about a fair use precedent in this case—if not for Caption in its nascent form—then for the next iteration of a Caption-like service that could become the new reading for many consumers.

Again, we ignore at our peril that Audible is a subsidiary of Amazon; and it is not the least bit unfair to imagine how a seemingly innocuous feature like Caption can be a springboard for expanding Amazon’s already outsized influence in publishing and elsewhere.  If the court finds that Caption is fair use today, and Audible actually did grow the reading market—as it implies that it can—we begin to see very familiar territory as yet another tech giant positions itself as a monopsony. Does anyone really believe that Amazon would not become to book writers what Spotify is to songwriters?  Really?

In light of Big Tech’s track record so far, this is hardly an alarmist point of view, and anyone who actually cares about writing or reading books can be forgiven a healthy dollop of skepticism about the professed good deeds of any of these companies.  As the New York Times recently reported, Amazon sells foreign-made books that are so poorly produced that they do not even contain accurate reproductions of the text.  Citing George Orwell’s works, David Stretfield notes that the books he acquired include  “… straightforward counterfeits, like the edition of his memoir ‘Down and Out in Paris and London’ that was edited for high school students. The author’s estate said it did not give permission for the book, printed by Amazon’s self-publishing subsidiary.”  So forgive me a raised eyebrow when a subsidiary of this company says it wants to save literature.

While it is certainly not in the authors’ or publishers’ interests to prevent changes in the way people might read in years to come—if indeed changes are on the horizon—these parties must remain the primary stakeholders in that future.  Consequently, if and when the court considers the fourth fair use factor in this case, authors, publishers, and readers should hope that it underlines the statutory mandate to consider potential market harm.  Because there is little evidence to-date that Amazon will not exploit any opportunity in its efforts to become the worldwide distributor of everything.

* Chronicle, Hachette, HarperCollins, MacMillan, Penguin Random House, Scholastic, Simon & Schuster.

Does Graffiti Art Enjoy Equal Copyright Protection?

As with so many copyright questions, the answer is “it depends.”

I stumbled into a discussion on Twitter last week that included some fairly cynical reactions to an artist named Chris Williams, who filed a copyright infringement claim against the Hy-Vee supermarket chain for making use of his graffiti mural in one of its TV commercials.  The spot, which first aired during the last Super Bowl on February 3, prominently features a colorful, patchwork design that Williams painted on a wall in Des Moines, Iowa in October 2018.  Williams alleges that he never would have licensed the image for such a purpose and has filed suit against the grocery chain for infringing reproduction, display, and distribution of his work, as well as violation of DMCA Section 1202 for Hy-Vee’s removal of the author’s signature as a mark of ownership.* 

The Twitter discussion between Professor Brian Frye and Neil Turkewitz began with a general assertion, in which Frye seemed of the opinion that once a creative work is so public (e.g. a painting on an exterior wall or a statue in a city square), the author really must abandon all interest in controlling how that work is reproduced—especially through photography.  Frye further opined that Williams’s desire to litigate the Hy-Vee commercial would be doctrinally identical if he were to try to prevent “tourists” from capturing graffiti art in their personal photographs.  

Turkewitz’s responses broadly stressed the point that one cannot generalize about an author’s right to allow (or disallow) certain uses based solely on the fact that the work has been “published” on a city wall.  “It’s essential to doctrinally distinguish between someone taking a selfie in front of publicly displayed art & posting it on their FB page & someone featuring a photo of such art as part of their advertising campaign,” he replied.

Professor Kevin Casini posed the question that I imagine many people instinctively ask:  Does “publishing” a work by fixing it in a common space alter the boundaries by which the author may control the use of that work?  Opinions will vary, and my own opinion is that, yes, the author does abandon certain types of control that may be retained in other types of publication, but by no means does he give up his copyrights altogether. Whether a protected work is street art, hanging in a gallery, or printed in thousands of book copies, potential infringement claims and defenses will, and should, remain case-by-case considerations.

Frye mentioned in his tweets that a TV commercial is an expressive work.  This is true but not especially relevant.  Countless uses of copyrighted works are expressive—although courts will make distinctions between an “expressive” and an “informational” use when weighing a fair use defense.  Likewise, all works that are vulnerable to infringement (unless it is physically-stolen unpublished material) are, in one way or another, “in the public.”  This is in fact an underlying purpose of copyright: to encourage authors to make their works public by securing their rights to retain certain forms of control over the works they disseminate.  If making a work public vitiates these rights, then copyright is meaningless.  This principle is not extinguished just because a work is apparently made “more public” through display in a physical commons. 

It is also important to remember that authors frequently exert control over the use of their works for reasons other than compensation—a theme that is especially common among street artists, who demonstrably make these works for a purpose other than money in the first place.  While copyright critics tend to cynically assume that lawsuits are always about money, this is a chronic misconception about many artists that should at least dampen, if not disqualify, a lot of the copyright critical scholarship out there.  For instance Williams’s rationale in the complaint is stated as follows …

 “Despite offers, he has very rarely made his original art available as part of corporate advertising campaigns—partly for artistic reasons but also because doing so would diminish the value of his work. Indeed, nothing is more antithetical to a street artist’s credibility than association with something as banally commercial as a chain of grocery stores. People who recognized his Mural in the Campaign would have concluded that Williams ‘sold out,’ diminishing the value of his work and reputation.”

Some observers will take Williams’s views on commerciality at face value, others will respond cynically—especially on Twitter. Moreover, in this particular case, his claim that his “street cred” is harmed by “commercial banality” may be weakened by the fact that Hy-Vee’s TV spot, narrated and supported by Oprah Winfrey, promotes a program to ensure that school kids do not go hungry.  In this context (i.e. a topic that is pretty “street” in itself), Hy-Vee may be able to reasonably argue that their depictions of the mural in segments of its commercial are intrinsic to portraying the street (i.e. neighborhood) they intentionally selected for this particular narrative. 

For the most part, we must mute sideline mumbling about “good v. bad” intentions in such cases and look at the manner in which a work is used by an alleged infringer.  In Hy-Vee’s case, the Williams painting is featured so prominently in at least two scenes of the commercial that any filmmaker watching it would conclude that it is the primary element of art direction in those scenes.  The young girl protagonist walks past the mural, which fills the entire frame.  Consequently, the expressive qualities of these shots are almost entirely conveyed by Williams’s painting.   

This use is sufficient for an infringement claim but, in the broader context, may not ultimately support Williams’s allegation of harm, especially given his emphasis on reputational harm.  After all, he imposed his personality onto a neighborhood, which Hy-Vee then reasonably selected as a location in order to promote its own contribution to the same community.  

On the other hand, it is important to remember that the use of notable artwork for endorsement may be a form of coerced speech. In the legal analysis, we cannot be distracted by the message being conveyed with the use, no matter how virtuous it may be.  We must only be consistent in allowing any author of a work to endorse or oppose anything he or she chooses in cases where the use of a work may be understood as endorsement. 

Looking at The Mercedes-Benz Case 

In a related story, Mercedes-Benz filed a lawsuit in March against four graffiti artists who sought to remove the automaker’s advertising photos from Instagram.  The promo photos depict Mercedes vehicles traveling near murals painted by these artists in the City of Detroit. 

In these examples, the murals are prominently visible; and one can reasonably assume that the Mercedes creative team chose compositions in which the graffiti art lends aesthetic value to the overall compositions.  But at the same time, the murals do not do quite so much of the visual “heavy lifting” as the Williams painting does in the Hy-Vee scenes.  This provides Mercedes grounds to argue that their reproductions are “incidental,” which would favor a finding of fair use.   

When creative works like art painted on walls become part of the landscape of a neighborhood, when they cannot be “unseen,” this factor tends to broaden the umbrella of fair use for incidental photographic capture—even for commercial purposes.  In the Mercedes photos, for instance, the cars remain the most prominent visual elements in the frames, while the murals generally play supporting roles as part of the cityscape background.  

I cannot say conclusively that Mercedes has a fair use claim here, but want to highlight the differences between the amount of creative expression being contributed by the street art in these two uses in order to emphasize the point that one cannot appeal to a universal doctrine that must apply to all graffiti art.  Further, if the Mercedes case proceeds, it is conceivable that some, but not all, of the images will be held to be fair uses. 

Beyond considering these two commercial uses, I maintain that Professor Frye is overreaching to suggest that if Williams were to prevail in his suit against Hy-Vee, this implies that he might just as easily prohibit tourists et al from capturing his street art in their personal photographs. Not only is it hard to imagine a graffiti artist wanting to prevent that kind of personal use photography, the fair use doctrine, the right to capture public scenes for personal use, the concept of “incidental” capture, and non-commercial considerations all shield the general public user in ways that impose limits on the author’s right to prohibit that are not the same as the commercial user.  The doctrines are not the same and the details matter quite a lot.

*Although there is no longer a requirement to place a notice of copyright on a work, removal of an existing mark for online distribution with the intent to facilitate infringement may be a violation; and Williams is presumably claiming that by framing out his signature in online displays of the commercial, Hy-Vee violates this statute.

The Jetflicks indictment: talk about crime not paying.

After reading the indictment that was handed down last week against the eight men who allegedly ran the pirate streaming service called Jetflicks, all I could do was wonder what the hell they were thinking. Between 2007 and 2017, Krisopher Lee Dallmann and Darryl Julius Polo operated Jetflicks as a subscription-based service, delivering tens of thousands of unlicensed audio-visual works to customers around the United States.  So, not only do I want to ask how they imagined they would avoid prosecution while operating inside the U.S., but the following email exchange between Dallmann and a programmer named Louis Angel Villarino (as quoted in the indictment) really makes me wonder why they even bothered …

Dallmann: When Jetflicks starts making crazy $$ in a few months… How much do you need to make to be full-time for Jetflicks only?

Villarino: 120k a year

Dallmann: That’s doable …

Dallmann:  Jetflicks made 750k 3 years ago… 500k in 2015… And a sad 350k last year

Dallmann: If we didn’t have people that took advantage, we’d be awesome.

Assuming this correspondence provides some insight into the enterprise, I am not sure which inscrutable detail to highlight first; but I suppose it would have to be Dallmann’s woeful complaint that customers were “stealing” from Jetflicks by sharing login credentials.  The naïve innocence in his choice of words “took advantage,” implying that he sincerely believed he had an ethical leg to stand on, resonates with the somewhat pathetic revelation that this doomed venture was not even viable enough to provide Villarino with a full-time gig at $120k/year.  

Not that I recommend or condone criminal enterprises, but if one is going to take the risk, it seems like it ought to be with the intent to make some serious money, no?  Operating a media piracy service inside the United States is operating on a time-clock; a criminal indictment will be forthcoming.  So, if the plan does not include reaping several million dollars in a very short time, followed by a flight to a country beyond extradition, then perhaps applying to one of the many tech jobs out there is a better career move.  Some of them actually pay more than $120k per year.

In fact, if I correctly interpolate the evidence cited in the multi-count indictment, it does seem like running Jetflicks was a lot of damn work for not nearly enough revenue.  After all, making sure subscribers receive TV shows in a timely manner when you have absolutely no license to do so requires quite a bit of time and technical skill—not to mention capital expense for servers etc.—that, again, better pay a substantial return considering that a hearty pounding on the door by the FBI is imminent.  Instead, the operators almost seem to have believed they were running a legitimate business that they expected to operate indefinitely.

Some Defendants May Argue Misdemeanor Offense

As this case proceeds to trial, perhaps the rationales of the defendants will be revealed, but if not, it may still be interesting to watch the defense(s) of the six supporting characters, including Villarino.  While the apparent ringleaders Dallmann and Polo are charged with multiple counts of felony infringement, money laundering, aiding and abetting, the other six are only charged with conspiracy to commit copyright infringement.  Consequently, some or all of these men may try to prove that they were only involved in the act of streaming infringing content because streaming is currently a misdemeanor. I have no idea, of course, whether any of the six has any evidence to support such a defense, and some or all may seek plea deals; but this case could highlight the view that many policymakers believe there is no reason for streaming not to be a felony.

The distinction between civil copyright infringement and criminal copyright infringement is based on the purpose, conduct, and goal of the alleged infringer.  Old-school criminal copyright infringement usually entailed conduct like mass-producing bootleg copies of works to sell in an unlicensed market as a substitute for the legal market. Consequently, U.S. criminal code identifies unlicensed reproduction and distribution as charges that law enforcement may bring in copyright cases.  But streaming audio or video (though it often implicates reproduction and distribution) is considered a public performance of a work, and unlicensed public performances are still considered misdemeanors. 

Clearly, with regard to the kind of harm that may be caused by enterprise-scale infringement, the “streaming loophole” is a legal distinction that is outdated by the nature of the technological means used to infringe.  If selling ten thousand bootlegs out of a warehouse in 1988 was a felony, then how can it be that streaming multiple infringing works to potentially millions of viewers is considered a lesser crime?  A letter written this July by the Register of Copyrights to the Senate Judiciary Committee, IP Subcommittee states, “Under this system, criminal streaming piracy, no matter the dollar amount it involves or the number of works affected, is de facto treated as a lesser crime than the illegal downloading or reproduction of the exact same content.”

It seems likely that lawmakers will eventually recognize that streaming is the contemporary method of mass-bootlegging and, therefore, amend the criminal code to encompass public performance by streaming as a form of felony infringement.  In response, the “digital rights” advocates will doubtless write many screeching blogs and post scary-looking memes predicting once again that innocent children will face jail for inadvertently streaming infringing material, or that startup “innovators” will be afraid to enter the market.  And as usual, none of these complaints will be grounded in reality.

Caselaw is replete with both criminal and civil copyright cases, and the distinctions are clear.  This is why a start-up like VidAngel, no matter how much its model proves to be a contorted workaround to copyright law, will have its day in civil court, but its founders will not face criminal charges for the attempt.  There is no comparison between a well-intended enterprise that is held to be infringing and a criminal enterprise that seeks to profit by means of a black market.  Though in the case of Jetflicks, apparently not profiting enough for all the trouble.

Regardless of where policymakers net out on felony streaming in the near term, I will say this for the proposal:  the amended criminal statute might have acted as a deterrent for at least some of the six guys now facing charges in the Jetflicks case. Of course, this implies that they would have known enough to consider the difference, which only begs the original question:  What the hell were they thinking?