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.

Fair Use Week Again. But Why?

Well, it’s Fair Use Week again.  Seventh annual.  I suppose one must say something.  Though what I really want to say is Why?  What exactly happened in 2013 to provoke the idea that we needed this celebration?  The fair use doctrine had been part of the federal copyright law for forty years, and its common law precedents began percolating in the mid to late eighteenth century.  So, why did this somewhat arcane aspect of copyright doctrine, which very few people have reason to think about, suddenly demand of a week’s worth of attention?

I get why Banned Books Week is a thing.  It reiterates the need for vigilance against censorship while celebrating authors whose contributions are so transformative or provocative that somebody somewhere wants to silence them.  Notably, it is the free market that so effectively rejects this kind of censorship, and the author’s mechanism of access to that free market is copyright.  “The Framers intended copyright to be the engine of free expression,” wrote Justice O’Connor in 1985 in Harper & Row Publishers Inc. v. Nation Enterprises.  And indeed it is.

While no one should disagree that the fair use doctrine is necessary to the fulfillment of copyright’s purpose to promote progress and be that engine of free expression, I just cannot fathom the connotation of insurgency expressed in the observance of Fair Use Week—as though the principle were under assault.  Of course, eager celebrants might say that fair use is under assault based on a common tactic in politics, which is to first advocate pushing the limits of a principle and then claim that any resistance to, or criticism of, said pushing is tantamount to threatening the principle itself.  

You see, concurrent with the sudden urgency to celebrate fair use, there has also been a considerable effort to broaden the nature of the doctrine far beyond its supporting role as a cog (albeit a large cog) in the engine of expression.  Publicly, this has taken the form of blog posts and social media commentary that invoke fair use, whether it is actually applicable or not.  In the courts, organizations like the Electronic Frontier Foundation, the Computer and Communications Industry Association, and the American Library Association write amicus briefs supporting tech ventures whose fair use defenses overreach so broadly that they would nullify core copyright protections if allowed to stand as precedent.  

Fortunately, as some of the more high-profile cases have moved through the process, the courts have lately reaffirmed fair use, tucking it into its proper context—as a conditional defense for certain types of uses and not a vaguely-defined blank check based on emotion and general disdain for copyright.  Probably the two most important recent decisions in this regard were in Fox v. TV Eyes and Capitol Records v. ReDigi at the Second Circuit Court of Appeals.  In both of these cases, the court re-illustrated essential contours of fair use in a tech-driven market that too-often seeks to conflate generalized “innovation” with the first fair use factor that weighs “transformativeness.”  

As explained in detail in older posts, “transformativeness” (an analytical doctrine written by Judge Pierre Leval in 1990) is not terribly confusing in its original purpose to consider a new creative expression that makes some use of a precedent creative expression.  Where the doctrine threatens to get out of the barn, however, is in its secondary application as applied in Google Books … “a secondary use may be transformative if it provides information about the original, ‘or expands its utility.’”  

That “expands utility” language has provided opportunity for business ventures to come very close to arguing that simply offering a new service is sufficient to warrant fair use of protected works.  This rationale has even fostered minor attempts by some parties to claim that merely posting a work on social media is “transformative,” which, if this were true, would annihilate the authors’ right to make a work available (or not), thereby distorting fair use from a limited, legal exception to a talismanic incantation.  

Second Circuit Restores Reason to Fair Use 

In both TVEyes and ReDigi, the Second Circuit provided essential contours for the “transformativeness” doctrine.  In the former, the Court held that the TV monitoring service, regardless of its innovative value to B2B subscribers, infringed copyright by making full programming available to customers.  In comparing the utility of TVEyes to that of Google Books, this same court, which decided the latter, stated …

This appeal shares feature with our decision in Authors Guild v. Google,Inc.  That case held that Google’s creation of a text-searchable database of millions of books (including books under copyright) was a fair use because Google’s service was “transformative” and because integral features protected the rights of copyright holders.  However, we cautioned that case ‘test[ded] the boundaries of fair use.’  We conclude that defendant TVEyes has exceed those bounds.

That the same court found daylight between the fair use defenses of Google Books and TVEyes is of considerable value to rightholders in a market replete with ventures seeking new ways to exploit copyrighted works without license.  Authors of works have a hard enough time navigating a landscape of legal (Spotify) and semi-legal (YouTube) platforms that have decimated the monetary value of their creative products without also having fair use expanded into a generalized, amorphous license to steal.  

Perhaps future legal experts will find that the most important decision came in the ReDigi case, denying the fair use defense of this business, which sought to create and exploit a market for “used” digital music files.  One reason this decision my be seen as a landmark is that Judge Leval himself wrote the opinion and added further nuance to his own “transformative” doctrine, which has been the cause of considerable confusion in other cases.  Leval writes …

Here, ReDigi hosts a remunerative marketplace that enables resale by purchasers of digital music files, which is a commercial purpose. Especially in view of the total absence (or at least very low degree) of transformative purpose, the commercial motivation here argues against ReDigi with respect to Factor One.

In other words just because ReDigi’s business model would indeed be novel, that doesn’t make it “transformative” in regard to fair use.  The business model offered a substitute for the primary market for creative works, which would threaten the (already low) market value of those works.  (And as mentioned before, the dominance of music streaming implies ReDigi’s obsolescence rather than its novelty.)  

These two decisions in one of the most active copyright circuits provide essential guidance for the kind of fair use defenses that are typical of the digital market.  Hence the appearance of Fair Use Week six years ago is suspiciously contemporary with efforts to expand that secondary application of “transformativeness” in the service of big tech ventures, rather than the production of new forms of expression.

In this regard, I cannot agree with the way in which Peter Jaszi framed his testimony before Congress in 2014, in which he said …

“Fair use, one might say, is like a muscle – it will grow in strength if it is exercised, and atrophy if it is not. But, by the same token, fair use is hardly unusual or exotic today. Everyone who makes culture or participates in the innovation economy relies on fair use routinely – whether they recognize it or not.”

This conflating the original purpose of fair use (i.e. to foster new expression) with the so-called “innovation economy” is emblematic of the persistent confusion in the market today—a chronic inability to distinguish between the creators and the platforms on which they operate—the difference between the YouTuber and YouTube, if you will.  

Internet companies have consistently sought to exploit confusion about fair use.  Just as they conflate our free speech rights with their profit interest in letting all content “flow freely,” they promote that same talismanic notion of fair use in their own pecuniary interest.  And that’s probably why Fair Use Week started six years ago.  Meanwhile, with the jury still out as to whether the “innovation economy” is really an economy at all, at least the Courts of Appeals have restored some order to the application of fair use for the time being.  

Maybe the Internet IS Just a Dumb Pipe

“Content is king” was the catch-phrase of the 1990s and the heady (headless really) days of the Dot Com bubble.  And although that stopped being a slogan with the resurgence of Web 2.0, it was still true.  Content was still king except the would-be tech giants figured out that they didn’t need to create content but instead just make someone else’s content available.  Whether these companies had any right to exploit said content did not matter since the telecom giants who preceded them had conveniently negotiated a liability shield (DMCA §512) for copyright infringement before anyone quite realized how a YouTube could become a massive infringement machine that prints money for its owners.

When rights holders complained that these platforms were infringers (or at least beneficiaries of infringement), the answer was always some variation on the themes …  It’s not us.  Its the users.  We don’t control what gets uploaded. We’re just a neutral platform.  And so on.  Thanks to that liability shield negotiated by Verizon, AT&T, et al in 1998, Google and the other major platforms got away with the circular logic that “the internet” is simultaneously “just a dumb pipe” and also a network of such inestimable value that no cyber-policy may be altered—other than, of course, by Google and the other major platforms.  They are at liberty to alter the internet all they want because they do so many nice things for us—and all for free!

In 2012, concurrent with the not-so-grassroots defeat of SOPA/PIPA, Google’s lobbying expenditures went from negligible to competing among the top five in the nation; and the major platforms also formed the Internet Association to advocate policy in its interests.  That’s business as usual, and industries have every right to form such organizations, but this new coalition of tech giants was also contemporaneous with the anti-SOPA narrative in which the Motion Picture Association of America a) had allegedly tried to force legislation that would “break the internet”; and b) represented “old thinking” about content, copyright, and digital-age piracy. 

Let us now leap over the past seven years to the present—a time when the major internet platforms—most demonstrably Facebook—have revealed many of the darker consequences of their hands-off, disrupt-culture approach to platform moderation.  Amid this still-developing narrative, came the big news last month—though it should not have been the least bit surprising—that Netflix would leave the Internet Association and join the MPAA.  Because content is still king.

As described in my post of October 2015, Netflix is not an internet company; it’s a motion picture studio that happens to distribute via the internet.  New opportunities to measure viewer data notwithstanding, the simple reality is that the more “tech” companies invest in original programming, the more they will naturally find common ground with the policy interests of the MPAA et al. In that regard, a January article in Variety speculates that Amazon—with its slate of multi-award-winning shows—could be next to join the big studios.  Either way, the swing of this pendulum does suggest a new premise:  that perhaps the internet industry does not have (to use the technical term) jack-shit to teach content creators about copyright or piracy—and let’s not even talk about whatever the hell the “economics of abundance” means.

In fact, if one looks at YouTube’s Copyright Match response to the realization that their own creators do not like having their videos infringed by other YouTubers, maybe the “new” industry actually has something to learn from the “old” one about protecting creative works.  Meanwhile, as the traditional media/entertainment companies continue to migrate toward streaming and other contemporary models of distribution, they will surely learn much from a pioneer like Netflix.  But this will not change the raw investments of time, talent, labor, and money required to produce new works, and so it will not diminish any producers’ interest in protecting and enforcing copyrights.  

In this context, I am reminded of a story from January of last year in which songwriter/performer Blake Morgan found himself having to explain to Spotify executives that music was in fact the product they were selling.  One might think this is not a very high mental hurdle to clear, but Morgan describes that some in the meeting became rather heated in their defense that, no, Spotify was the product.  Because, of course, we launch that app just to look at the interface?

Time will tell if there will be any significant future defections from the Internet Association, though its members are not without vested interest in a range of policy areas.  But to the extent that union was formed in response to proposals like SOPA and to advocate against copyright enforcement, the departure of members who are now major rights holders serves as a long-overdue reminder about the difference between creative works and the technological means to access or distribute those works.  As the platform owners love to repeat in their own defense against liability, the internet doesn’t produce anything; it’s just a dumb pipe.

Can U.S. States Infringe Copyrights with Impunity?

If the Supreme Court agrees to hear Allen v. Cooper, copyright owners and constitutional scholars will both be watching closely.  The practical matter for copyright owners is whether a U.S. State, or agents of a State, may freely use copyrighted works without permission and remain immune from claims for infringement.  As of now, the Fourth Circuit Court of Appeals contends that a State entity (e.g. a university) may use or make available an author’s music, photography, film clips, etc. without compensation or permission, and the rightsholder has no remedy whatsoever.  First, some background as condensed as I can make it …

June 10, 1718, the pirate Edward Thatch a.k.a. “Blackbeard” grounds his flagship Queen Anne’s Revenge off the coast of North Carolina at what is today called the Beaufort Inlet.  Fast-forward past the Revolution to the tenuous founding period when the newly-independent States separately debate ratification of the Constitution.  

For instance, July 1788, nearly 300 delegates from the counties of North Carolina gather for several days  in Fayetteville and devote more than two of those days debating Article III and the fears that the the federal judiciary will preempt the authority of state courts.  September 17, 1789, the U.S. Constitution is ratified including, of course, Article I, Section 8, Clause 8, granting Congress the power to write federally uniform IP laws, and the first Copyright Act is passed in May of 1790.

But …

In 1793, anti-Federalist fears are realized in Chisolm v. Georgia, when the estate of Alexander Chisolm of South Carolina successfully sues the State of Georgia in the U.S. Supreme Court for monies owed for supplies provided during the war for independence.  State obligations for the war debts are already a heated issue, and now a citizen of one State has sued the government of another State in the brand new federal court system, thereby vitiating the State’s authority over its own courts.  In response, we get the Eleventh Amendment on February 7, 1795, establishing the doctrine known as state sovereign immunity, to wit …

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

As an interesting side note, North Carolina Federalist, James Iredell, serving as Supreme Court Justice was the one dissent in Chisolm; and in the aforementioned 1788 debate in Fayetteville had declared, “The propriety of having a Supreme Court in every government must be obvious to every man of reflection. There can be no other way of securing the administration of justice uniformly in the several states. There might be, otherwise, as many different adjudications on the same subject as there are states.” 

Fast way-forward to November 1990.  Congress passes the Copyright Remedy Clarification Act (CRCA) to affirm that, indeed, States, instrumentalities of States, and officers and employees of States acting in their official capacity, are subject to suit in Federal court by any person for infringement of copyright… 

Then …

On November 21, 1996, an exploration company called Intersal, Inc. locates the wreck of Blackbeard’s Queen Anne’s Revenge, and the State of North Carolina engages Rick Allen’s Nautilus Productions to produce documentary motion picture material of the wreck, its recovery, etc.  At some point, a dispute arises between Nautilus and the State over certain uses of the footage, and the State settles the claims for a fee of $15,000.  But subsequent to that settlement, in 2015, North Carolina passes a remarkably narrow law “requiring that all recordings and other documentary evidence of a derelict vessel or shipwreck in the custody of any agency of the North Carolina government be a public record,” to quote Hugh Stephens from his excellent coverage of this case.  This law is colloquially referred to as “Blackbeard’s Law.”

Next …

North Carolina resumes infringing uses of the documentary footage, and Rick Allen files suit.  The District Court finds for the plaintiff, but on appeal, the Fourth Circuit reverses, holding that the 1990 CRCA is unconstitutional, finding that state sovereign immunity means that no copyright owner may hold any State (or its agents) liable for copyright infringement.  

P.S.  That this particular case happens to involve a literal pirate is almost as nerdishly satisfying as the fact that the name of Blackbeard’s ship Queen Anne’s Revenge shares the eponym with what is typically considered the first authorial copyright law, England’s Statue of Queen Anne of 1710.

Copyright Owners Should Be Concerned

Copyright infringement by State actors is an ongoing and growing concern, especially in a time when university librarians et al seem too eager to make everything available via the internet. Although the Fourth Circuit holding is consistent with precedent rulings, an amicus brief filed in this case argues that the Supreme Court should grant cert in Allen, in part because those precedent rulings are deeply flawed.

“If the Fourth Circuit’s decision stands, there will be few (if any) remedies available to compensate authors for their losses. This is not what Congress intended,” states the brief written by David Nimmer* in collaboration with Professor Ernest Young and book author Michael Bynum.  Bynum is an exemplary victim of the growing State infringement problem.  After he provided an advance-copy of a new book to the Athletic Department of Texas A&M for the purpose of fact-checking, the university instead made the work available on the internet and claimed sovereign immunity in its defense. 

The Nimmer brief is excellent reading for any copyright/constitutional law geeks out there who want an overview of the various components related to this case, which I cannot adequately summarize here.  But one point the brief makes that may strike many readers as especially compelling is the argument that, at the nation’s founding, the Framers recognized the necessity for a uniform, federal copyright law concurrent with the need to protect the individual right of free speech.  And because there is evidence in both the record of the founding period, and in subsequent caselaw, that copyright is meant to be an “engine of free expression,” the Nimmer brief argues quite rationally …

“The Framers could not have intended for States to retain immunity against claims for copyright infringement, as such immunity deters the creation of artistic expression and allows States to interfere with the author’s speech, including how he wishes to publish and use his work.”

This is an aspect of copyright that many casual critics often overlook:  that by forcing an author to make work available in a manner anathema to her intended expression—including her right to express nothing at all—the use may abridge her speech right.  When that kind of use is made by a citizen or private entity, the First Amendment is not implicated; but when such a use is made by a State actor, the First Amendment is absolutely implicated.  This is just one of several reasons why it is nonsensical to conclude that the Eleventh Amendment could ever have been intended to prevent an individual citizen from exercising a constitutionally-protected right when that right is infringed by a State actor.  As the Nimmer brief states quite succinctly, “Sovereign immunity should not be a license to steal.” 

Also see Nautilus Productions’s own blog post on this case.

* David Nimmer is the co-writer, with Melville Nimmer, of the authoritative treatise Nimmer on Copyright.