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.

HJC Members Call Out Big Tech Shenanigans in CASE Act Hearing

For about an hour yesterday, I took a break from the drama unfolding in the Senate Judiciary Committee to tune into the House Judiciary Committee hearing on the CASE Act (H.R. 3945), which would create a Copyright Claims Board at the Copyright Office designed to adjudicate small copyright claims. It was almost hard to believe these two hearings were happening in the same country, let alone the same building. In particular, there was an undeniably palliative effect in watching Representatives Hakeem Jeffries (D-NY) and Doug Collins (R-GA) articulate a bipartisan commitment to protect America’s independent and middle-class authors of creative works.

Specifically, both Congressmen were very pointed in key responses to the two witnesses appearing on behalf of the tech-industry, whose opposition to CASE has, thus far, resulted in a handful of frankly disappointing amendments to the current discussion draft of the bill. Matthew Schruers* of Computer and Communications Industry Association (CCIA) and Jonathan Berroya, General Counsel at Internet Association (IA) were yesterday’s faces of Big Tech’s opposition to the bill, which relies principally on the assertion that the system will be vulnerable to abuse by copyright trolls. (Trolls are the ambulance chasers of IP law, who use false or flimsy claims to frighten alleged infringers into settling claims, although the scope of the “troll problem” tends to be exaggerated by a range of parties with an interest in criticizing copyright.)

Let’s not equivocate. The alleged concerns about CASE creating a new forum for copyright trolls is demonstrably absurd and is disingenuously asserted by internet giants , who truly have no skin in this particular game. The Copyright Claims Board, as proposed, entails far too many safeguards on its use to be an attractive venue for a would-be troll.

For instance, there is a provision which denies access to the CCB to any party who consistently brings false or flimsy claims—a limitation that does not exist in an Article III court system. Further, as mentioned in past posts, because the CCB is expert in, and focused on, copyright law only, it will be a much harder forum in which to present a weak or false claim than a federal court. And finally, a respondent (alleged infringer) can opt out of the CCB upon written notice of a claim.

But unsatisfied with all those safeguards, the lobbying efforts of IA and CCIA have also resulted in a provision to limit the number of valid claims that a rights holder may bring to the CCB to ten per year. As evidenced by witness Jenna Close, representing photographers and visual artists, this “anti-troll” concession is arbitrary in light of the fact that she noted 18 infringing uses of her work by commercial entities in yesterday’s testimony. That the Internet Association, representing Facebook, Google, eBay, and other billion-dollar corporations, should even have a say in limiting Ms. Close’s remedy options to roughly half the infringements of her work is an aberration of reason and justice. But as she said to the committee, “Ten is better than nothing.”

Despite the Politics, Key Members Are Clear

Unfortunately, the political reality is that the CASE Act is not going to move out of committee unless these industry organizations either endorse the bill or amend their position to one of neutrality. That they have anything to say at all is frankly galling given that the tech and internet companies are shielded in several ways (not the least being their size) from being targets of small infringement claims, but as usual, these industry representatives claim to be defending the interests of their users (meaning all of us), who may be unfairly targeted by presumptive abusers of the CCB. It was in response to this general posture that Representatives Collins and Jeffries homed in. Anyone who quarrels with Silicon Valley on policy is very familiar with the list of hypothetical disasters that will befall the internet (and all mankind) if we enforce copyrights, or any rights, in the digital age. Doug Collins was pellucid on this matter …

“From the side that says it’s maybe not needed, I hear a lot of hypotheticals. In this room today, there is not a hypothetical. There’s Miss Close.”

Then, alluding to the creators in the gallery who appeared in support of CASE …

“These are not hypotheticals. These are real people who have real issues with real infringement on their work. One of the things that’s great in DC is that we’ll always find the hypothetical that says you can’t. I’m about finding hypotheticals that say those who create mean something and those who create have value and have infinite worth. If we ever get to the time when the hypothetical wins out over the creator, then the creator is dead. We’re looking for solutions. If a hypothetical gets us to a solution, wonderful hypothetical. If a hypothetical is just a roadblock in the way, it’s time for a bulldozer.”

Even more pointedly, Hakeem Jeffries, lead sponsor of the bill and the next Member to question the witnesses, asked Matt Schruers whether the concessions already made in CASE were not sufficient to allay his constituents’ concerns about hypothetical trolling and abuse. Specifically, Jeffries refers to a concession (one I believe cedes too much) that allows a party to opt out of CCB tribunals with a single, blanket statement—meaning no corporation with even mediocre legal counsel will ever be party to one of these adjudications.

To this, Schruers conceded that corporate entities would be well shielded but then tried to raise the specter of the hypothetical internet user being defenseless because he would not know to avail himself of this opt out provision (i.e. the bill isn’t toothless enough). In response to the premise that the CCIA represents users at all, Jeffries stated …

“I get all of this due process language, and it sounds flowery, and it’s beautiful. But with respect to many of the companies that you represent, you have these contracts of adhesion [TOS] where the same internet users that you say you’re here before the committee to defend are waiving their rights to participate in the Article III federal court system. So, it becomes a little difficult I think for many of us to take some of these concerns as seriously as they’re being projected.”

Amen. Copyright advocates have seen this tactic employed repeatedly: the internet giants hide behind the interests of users when it suits their policy agenda, but their own legal structures and terms of service make clear that users have almost no legal remedies if their complaint is with a platform itself. Whether the subject is copyright or any other policy issue, Rep. Jeffries deserves kudos for hitting this nail squarely on the head. It may be true that we all use the internet, but that will never mean that our interests are identical to those of Google, Facebook, Twitter, et al.

The CASE Act addresses a longstanding problem for independent creators who deserve to enforce their rights in relatively low-level (but meaningful) infringement claims that are simply too small to justify the cost of federal litigation. My takeaway from yesterday’s hearing was that Committee members largely understand the issue, want to support this large population of independent creators, and hope to pass the bill before November. Even Representative Zoe Lofgren (D-CA), who tends to be consistently critical of copyright, endorsed the need for CASE.  Near the end of the hearing, Chairman Issa asked Schruers and Berroya, “What will get you to yes?” I understand that’s a political reality, but it shouldn’t be. The IA and the CCIA do not honestly represent anyone—either creators or internet users—who have any stake in this bill. They’re just inconveniently too powerful to ignore.

Related…

Some may note that organizations like EFF, who claim to speak for users, were not present for the hearing; but on that subject, readers who are unsure about the extent to which these organizations tend to speak for industry will want to watch Frank v. Gaos, recently granted cert at the Supreme Court.  It relates directly to the issue of internet industry (and other industry) accountability, and there will be more to say about this case in future posts.

SCOTUS will hear arguments on Halloween Day, but in sum, the suit challenges the regime whereby a corporate entity (or industry) loses a legal battle to the extent that they pay a settlement in a class action, but then the settlement money winds up funding organizations that advocate policy favorable to the corporation or industry at issue. With regard to internet policy, these cy pres awards have funded the Electronic Frontier Foundation, think tanks, and academic works that just happen to advocate policy favorable to the internet industry. More to follow very soon.  (Post added on 10/30.)

*This is the same Matthew Schruers who pitched the brilliant concept that it’s okay to steal copyrighted content because the money saved will be spent elsewhere in the economy.

Copyright in Motion As Midterms Approach

While most attention will be understandably focused this week on the Senate Judiciary and the confirmation (or not) of Brett Kavanaugh, there is actually quite a bit of copyright law activity of note as the midterms approach.

Register of Copyrights Selection and Accountability Act Hearings Scheduled

Originally introduced in the House in March 2017 as H.R. 1695, this bill proposes a reorganization, favored by many copyright experts, to make the Copyright Office independent of the Library of Congress and to make the Register of Copyrights an executive appointee rather than a hired member of the Librarian’s staff. The bill passed the House in May of 2017 with a vote of 378-48 but then stalled in the Senate Rules Committee (as S. 1010). On Wednesday of this week, that committee will hold hearings on this legislation.

As described in a few posts, the formation of the USCO within the LOC dates back to 1897, when Congress could hardly have envisioned the copyright industries as we know them today; and both scholars and legal professionals have long viewed the current organizational structure as antiquated. Despite complaints by the usual assortment of critics—and they are likely to resurface after this week’s hearing—the Librarian and Register have always performed different functions predicated on very different areas of expertise; and the intervening 120 years has only increased the divergent roles of the two departments. This is a change long in development and long overdue.

CASE Act Hearings Scheduled

Following that hearing, on Thursday, the House Judiciary Committee will hold hearings on the proposed CASE Act, which would create a small claim copyright tribunal within the Copyright Office. The purpose of CASE is to provide a remedy for copyright disputes that do not easily justify the cost of federal litigation. For instance, the proposal is backed very strongly by professional photographers, whose works are infringed with a high rate of frequency online, even by business entities exploiting images for commercial purposes.

True to form, the copyright critics have predicted a litany of negative consequences that are simply not possible within the scope of the proposed statute. For instance, as a purely voluntary option, the new tribunal cannot become the “clearing house for copyright trolls” critics like EFF have alleged. Moreover, the USCO board will be experts in copyright law only, which is not true of federal judges, and there is no reason to believe this remedy would not prove to be as beneficial to defendants as to claimants. Still, the committee will be reviewing the latest version of the bill, which represents ongoing discussion among proponents and good-faith critics of the legislation.

The VidAngel Bill?

In August of 2017, the Ninth Circuit Court of Appeals shot down all the legal defenses, previously shot down by a California District Court, as presented by the movie filtering service called VidAngel. For a detailed background, see posts here and here; but briefly, VidAngel was sued by major motion picture studios for copyright infringement based on the manner in which the company was providing streamed access to movies while filtering out segments containing language, sexual content, or other material that VidAngel’s subscribers find objectionable, primarily on religious grounds.

Among its failed defenses, VidAngel asserted an unsound interpretation of the Family Movie Act (2005), which permits private use of consumer devices to make brief segments of motion pictures imperceptible during home viewing. Having lost its court fight with that statute (along with key statutes in the copyright law), VidAngel has apparently been lobbying Members of Congress, mainly its CEO’s hometown Utah Representatives, to propose an amendment (H.R. 6816) to the Family Movie Act that would theoretically enable VidAngel to perform, as a VOD service, the same task consumers are allowed to perform by means of devices at home.

Setting aside my own opinion of any consumer’s desire to edit out segments of movies on moral grounds, the legislators in this case may believe they’re simply updating the FMA for the digital-streaming market, but if so, they have failed to consider the staggeringly disruptive implications their bill would have on copyright law, contracts, and licensing agreements.  As a simple example, amending the FMA in this manner does not obligate the studios to license their films to VidAngel, which had been making public performances of these works without licenses.  And it gets more complicated from there — all for the sake of one company to profit from an activity that other companies have enabled consumers to conduct legally for 13 years.  I think this bill is likely a dead-issue, and with it VidAngel; but it will be something to watch if that’s not the case.

Doctorow & EFF Declare Perpetual War On DRM

On a slightly related note (because VidAngel violated Section 1201 of the DMCA), Cory Doctorow, in his role as EFFer, urged the organization’s followers to keep Sisyphean-like faith in “Our Apollo 1201 Project [which] aims to kill all the DRM in the world inside of a decade ….” Digital Rights Management tools, designed to protect copyrighted software from unlicensed access, copying, or tampering, has been portrayed by critics like Doctorow as a means to entrench corporate control of various markets more than as a means to protect authors of creative works.

It’s not that DRM is without such challenges or does not require constant reassessment, but Doctorow and company generally lack all deference to nuance, or integrity, when discussing the issues. For instance, they make no mention of the fact that, without DRM, many of the convenient ways in which we access works in the digital age (e.g. eReaders) would not exist. Moreover, as elaborated upon in this post, the EFF’s assault on the constitutionality of Section 1201 of the DMCA—the section prohibiting circumvention of DRM—conveys more ideological hatred than an honest portrayal of, for instance, the USCO’s position on exceptions to 1201’s prohibitions.

As noted in that post, rather than engage in the USCO’s call for reasonable changes to permanent exceptions etc., the EFF is instead hell-bent on the (dare I say perpetual-funding opportunity?) more dubious mission to eradicate the law. In this regard, it is notable that Doctorow employs the metaphor of ants steadily, if blindly, making slow progress up a hill. The presumptive “ants” (see Donors) Doctorow is addressing might want to look up the word Myrmidon.

Music Modernization Act Passes Senate by Unanimous Consent

Well, at least bipartisanship still exists when it comes to protecting America’s music creators.  Late yesterday, the omnibus bill known as the Music Modernization Act passed the Senate by unanimous consent.  On Monday, the chamber initiated a hotline process, which may be implemented when a bill is presumed to be uncontroversial.  Once triggered, Senators have 24 hours to raise any objections—one objection will kick the bill back into the normal debate/vote process—after which the bill will pass unanimously.  The MMA, to be renamed the Orrin G. Hatch Music Modernization Act in honor of the Senator’s retirement and the fact that he is a songwriter, ultimately earned 81 sponsors.

The soul of the MMA is a new royalty system designed to fairly compensate songwriters and composers in the digital marketplace.  This aspect of the bill has been hailed by multiple stakeholders in both the music and digital services market as a landmark achievement in private-sector and legislative compromise.

For too long, this class of creators was subject to a royalty system initially designed in the age of player pianos, so it has hardly reflected the market realities of the digital age.  The MMA establishes a new digital licensing collective, overseen by both songwriters and digital platform owners; it creates a new blanket mechanical license to enable easier and more complete licensing; and it reshapes the manner in which rates are set in order to better conform to fair-market prices.

ASCAP Chairman of the Board, songwriter Paul Williams stated, “”Today, we made history by joining together and working for Senate passage of the Music Modernization Act, bringing us one step closer to a music licensing framework that reflects how people listen to music today.”

This digital-royalty spine of the MMA met with relatively little debate among nearly stakeholders and passed the Senate in the same form* in which it passed the House in April with a vote of 415-0.  Likewise, the AMP Act segment of the MMA, which compensates engineers, producers, and sound mixers passed without objection or modification.  The only part of the omnibus bill that did invite debate—not to mention some outlandish claims by the anti-copyright crowd—was the CLASSICS Act, which is designed to compensate owners of sound-recordings for public performance via non-interactive streaming services like Sirius XM.

Amended CLASSICS Passes and Returns to the House

It was no surprise of course that Sirius XM opposed the CLASSICS Act.  They didn’t want to pay royalties to pre-1972 artists if they could avoid it.  But some of the usual suspects in the anti-copyright crowd also sought to oppose the bill on ideological grounds, calling it a massive term extension, a land-grab by the labels, and even a “reversal of copyright doctrine.”  As usual, the librarians and archivists jumped on this bandwagon (I still don’t get these folks), claiming that, if passed, CLASSICS would create new uncertainty for their institutions.

While most of these objections were a bit overwrought—and some were just plain made up—in response to so narrowly-written a bill, CLASSICS does unquestionably highlight the hodgepodge body of law (i.e. common law and federal statute) theoretically governing sound recordings made before 1972.  Nobody disputes that it’s a mess, but some of the opponents to CLASSICS argued that the law should be overhauled entirely (a monumental task) rather than ameliorate one small aspect of the law in order to get these musical artists paid by Sirius et al right now (a far more moderate task).  Nevertheless, in response to some of the concerns about duration of terms and the interests of libraries, the Senate made a few key modifications to CLASSICS that are expected to be adopted by the House for final congressional passage of the law.

The Senate version of CLASSICS creates a specific regime for use of these sound recordings by non-commercial entities, and it establishes a “rolling basis” duration of protection of 95 years after publication.  The House version had left the status quo intact, whereby all pre-1972 sound recordings are protected by state law until 2067.  These amendments look like reasonable concessions in keeping with the spirit and intent of CLASSICS; and it seems unlikely that any objections will be raised to alter the course of the MMA toward full passage. (This does not mean, of course, that the anti-copyright crowd won’t complain. Some already have.)

Not only should the many stakeholders who worked for years on this legislation be proud of what they have accomplished—let alone in such a schismatic political climate—but the MMA is entirely consistent with the history of copyright amendment in the United States.  While anti-copyright academics and tech-industry pundits continue to insist that copyright law must be weakened in order to foster innovation and serve the public interest, the historical narrative has been quite different.  Rather than bluntly weakening the law, it has always been the case that copyright is rewritten to fit the contours of new markets—responding to but not at all stifling new technologies.

UPDATE:  Having seen the latest language of the bill, there are a few small changes, including a five-year moratorium on rate increases.  Perhaps a more detailed in a future post.