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.

The EFF is Full of It on Indie Register of Copyrights

Photo by GlobalIP

Okay.  I’m not remotely surprised that the EFF & Co. don’t like the bill H.R. 1695 to make the Register of Copyrights a presidential appointee rather than an employee of the Librarian of Congress.  And I’m way not surprised that they’ve written a post which only thinly veils this bill as a power grab by the Trump administration. This despite the fact that the proposal dates back, on paper, to at least 2014 and well before that in general discussion among copyright experts.

I won’t repeat the historic context I’ve already written to explain why this legislative move makes sense, but instead I have selected some choice pull-quotes from the EFF’s post because, well…I just can’t help myself.

EFF:  The Copyright Office is supposed to focus on a pretty mundane but important job: registering copyrightable works….In the past decade, however, the Copyright Office has played an increasingly central role in policymaking…

Bullshit.  Sorry there’s just no other way to respond to this.  Although the Copyright Office was created within the Library of Congress in 1897 in order to serve a largely clerical function, even the first Register, Thorvald Solberg, was a respected expert on copyright law and played a role in helping to craft the 1909 Act.  Every Register since has performed an advisory function to Congress, the courts, and the public; and the USCO has grown in size, scope, and dimension commensurate with the growth in complexity of copyright law and the wide range of media production and distribution capabilities.

The EFF acknowledges that the USCO does not make copyright policy, but instead suggests that making the Register an Executive appointee will only make the Office more vulnerable to special interests.  This, despite the fact that, the EFF has been party to smearing the USCO as already beholden to “special interests” under the current organizational regime.  As they repeat in this post …

EFF: – and it has not been a neutral advocate.

Here, the EFF is citing a “report” published by PublicKnowledge that provides no statistical data to support the conclusion that the USCO has fallen prey to “regulatory capture” by major rights holders.  Instead, the report cites anecdotal “evidence” composed more of opinions than substantive debate.  For instance, they repeat…

EFF:  For example, one former Register famously stated, “[c]opyright is for the author first and the nation second.” 

She did say that. And she was absolutely right. And only detractors like the EFF made the statement “famous.”  As explained in this post, the Register was on solid ground, both with regard to functional common sense (i.e. the public doesn’t get what the author doesn’t first create) and with regard to philosophical precedent for the IP clause in the Constitution.  This is just the anti-copyright crowd leveraging a general lack of historical knowledge to manufacture a conflict that doesn’t exist.

EFF:  In sum, we’ll have a Register, and a Copyright Office, that is accountable only to the President and the special interests that helped get them approved in the first place.

This may be my favorite because, as mentioned, it’s seeking to trade on current contempt for the Trump administration in order to rally protest against this bill.  What’s particularly amusing about this one is that the most common “villain” in the copyright battle is Hollywood; and in case anyone hasn’t noticed, Hollywood isn’t exactly BFFs with the new president.  At best, one might call the relationships between this White House and many industries, including Silicon Valley, “complicated.” So, let’s try to assess policy on the merits where we can, shall we? The rationale for making the Register of Copyrights an Executive appointee is solid, it’s the result of years of consideration, and it will remain sound policy no matter who occupies the White House.

House Introduces Bill Moving Toward USCO Modernization

Photo by maxkabakov

Against the drama of day-to-day Washington—and I’m already exhausted—Rep.  Goodlatte, Chairman of the House Judiciary Committee, introduced a bill that most people won’t notice except the copyright watchers. Unlike certain congressional action making the headlines this week, H.R. 1695 represents years of testimony, proposals, and discussion and can claim 29, bi-partisan cosponsors.

The bill proposes to make the Register of Copyrights an appointee of the Executive with the advice and consent of the Senate, a move that would place the Copyright Office into a more clearly and more appropriately defined context given the functions it actually performs—and has performed for more than a century. The bill enjoys broad support from many parties, perhaps because it is the manifestation of a multi-year discussion; and the Copyright Alliance has recommended that the Librarian of Congress pause in her search for a new Register while the legislative process moves forward.

As I’ve explained in previous posts, the organizational placement of the USCO under the ambit of the LOC is antiquated, and it would be just as antiquated no matter who occupies the White House or controls Congress. Regardless of what some critics have claimed, it really is a coincidence of history that the Register’s initially-clerical role evolved out of changes at the Library that began under President Lincoln. Because the USCO has long been the nation’s agency of authority on copyright law—which is estimated to support over $1 trillion of GDP—it simply makes sense that the Office function as a separate agency from the Library, and with the Register appointed in the same manner as the Librarian.

When Dr. Carla Hayden was first nominated to the position of Librarian, many copyright skeptics cheered, seeing her as an ideological ally.  If anything, this only emphasizes the need for this long-contemplated split between the two agencies. The LOC and the USCO have evolved to perform two distinct functions that require leaders with two distinct types of experience and expertise. This organizational change is simply common sense.  Moreover, in a time of so much stress-inducing upheaval in Washington, this is an important proposal that deserves bi-partisan and general public support.

FilmOn Not a “Cable Provider” Says Ninth Circuit

A recurring narrative promoted by the internet industry and its cheerleaders is that the old creative industry, which relies on copyright law, is “outdated.”  The major rights holders, they keep saying, “cling to old models,” pretending the future is not happening.  Of course this new v old narrative is more than a misleading PR message—it is a gross hypocrisy if you follow the story behind the tweets, headlines, and comment threads.

Because if we were to summarize the story of copyright in cyberspace, it is generally one in which new business models seek to rely rather heavily on loopholes and loose interpretations of old law in order to succeed.  Time and again, the courts try to wrestle with new business ventures, whose owners hope for favorable interpretations of statutes that were written long before their models were imaginable, let alone possible. And much of the time, these “new” businesses represent various ways to exploit creative works without payment or permission.  Such is the case with a service called FilmOn, which hit a major setback this week in the Ninth Circuit Court of Appeals.

Essentially, FilmOn captures television broadcasts via the airwaves and then retransmits the content to paying customers over the internet. Several broadcasters, who are named collectively in the case as Fox, sued on the basis that FilmOn infringes the exclusive right of publicly performance. Like Aereo, FilmOn had argued in several courts that its service does not “publicly perform” works, but when the Supreme Court held that Aereo’s very similar model did infringe this exclusive right, FilmOn changed its defense strategy.

Instead of going for no licensing, FilmOn has been vying for cheap licensing by arguing that the company can be defined as a “cable provider” under the terms of §111 of the Copyright Act. “Cable providers” are eligible for compulsory, government-set licenses which obviate the need to negotiate with individual rights holders for retransmission of creative works.  A district court agreed that FilmOn qualifies as a “cable provider,” but the Ninth Circuit has now reversed that decision. And although the court has stated that both FilmOn and the broadcasters presented plausible interpretations of §111, the opinion appears to have turned on two factors:  context and deference to the Copyright Office.

In its analysis of the exception carved out in §111 with the 1976 Copyright Act, the circuit court notes the balance struck between the interests of copyright holders and the need to serve segments of the population that lived in remote locations.  §111 was designed to enable a network of local cable providers to make the large, capital investments necessary to serve these smaller markets without the added burden of negotiating terms with individual rights holders. Moreover, those cable companies were subject to FCC regulation, including “must-carry” provisions mandating certain content be transmitted just for them to be allowed to operate.  From the Ninth-Circuit opinion …

“… in 1976 the cable industry was a fledgling one; cable systems had little market power and little ability to overcome the considerable transaction costs they would incur if they had to negotiate individual licenses directly with copyright owners. Congress responded to these economic conditions by enacting § 111, which relieved cable systems of the need to sit down with every copyright holder before retransmitting their copyrighted broadcast works. … Fundamentally, however, § 111 was Congress’s attempt to balance the socially useful role cable systems had come to play, on the one hand, against the property interests and creative incentives of copyright holders, on the other.”

By contrast, the court observes that FilmOn is operating in a very different market as a business that a) does not have to make the kind of capital investments as 70s-era cable companies; and b) can reach far beyond a local market to potentially any viewer in the world via the internet.  So, although the court stipulates that FilmOn’s statutory interpretation of §111 is not wholly without merit, the panel ultimately defers to the assumption that Congress intended to maintain balance between protecting copyright and serving the remote markets via the more limited technology that existed at the time the statute was written.

Additionally, in light of its finding that both the broadcasters and FilmOn provide reasonable interpretations of §111, the court gave considerable weight to past testimony by the Copyright Office, which has, since the 1990s, asserted that internet-based companies like FilmOn are not “cable providers” under the terms of the statute.  Quoting from the preambles to the USCO 1992 and 1997 rulemaking proceedings, “… a provider of broadcast signals [must] be an inherently localized transmission media of limited availability to qualify as a cable system.” In other words, the ability to transmit globally via the internet exceeds the intent of §111.

Everything about the rationales applied to write §111, including the three tiers of statutory rates based on system size, is predicated on an analysis of local markets.  This includes matters like local advertisers who pay relatively low rates to reach a local customer base via their “cable providers.”  That small-town hardware store ad you see pays pennies on the dollar compared to a major brand reaching millions via national broadcast, and this factors into the calculus of what makes a “cable provider” eligible for which compulsory license under the terms of the statute.

There is simply no reasonable way to argue that a business like FilmOn, which retransmits a signal to the entire world via the internet, achieves the goals of Congress in establishing the compulsory license regime for “cable providers.” But as I say, this is a recurring theme in the copyright narrative. In the world of PR, these companies portray themselves as new, progressive, forward-thinking, etc.  But in order to avoid paying for the creative works they need to operate, they try very hard in the courts to look like they’re just business as usual.