Category: Law & Policy

ALI Restatement of Copyright – A Conversation with Professors Balganesh and Menell

Episode Contents

  • 58:12 – Overview of the American Law Institute and Restatements of Law
  • 06:13 – Restatements have never addressed areas of primarily statutory law.
  • 08:53 – Development of the 1976 Copyright Act
  • 15:17 – “Why we are not opposed to the idea of a Restatement.”
  • 25:09 – Criticism of the project’s lack of transparency.
  • 31:28 – Criticism of the project’s methodologies.
  • 42:44 – The distribution right & shifting judicial philosophies.
  • 51:50 – Rewriting copyright law without the legislature.
  • 54:17 – Can the Restatement still have a good outcome?
  • 01:01:43 – “the worst sausage factory”
  • 01:05:24 – Hypocrisy of the Reporters

Show Description

In 2015, the American Law Institute announced that it would embark on a Restatement of Law for U.S. Copyright. The plan raised eyebrows in the copyright community, the broader legal community, at the Copyright Office, and in Congress. For one thing, the ALI, which was founded in 1923, has never written a Restatement for any area of primarily statutory law—and the current copyright law is a rather complex federal statute. For some discussion about the Restatement project and the broader criticisms, see the post I wrote in 2018.

In this podcast, we get an insider’s view from two legal scholars who serve as Advisors to the Restatement of Copyright project. Although they joined the process with a measure of optimism that a Restatement could address certain complexities in copyright practice, the pair have since become critical of the project with regard to both its methodologies and its lack of transparency. Professors Shaymkrishna Balganesh of Columbia Law School and Peter Menell of the Berkeley School of Law published a detailed account of their analysis in a 77-page paper entitled Restatements of Statutory Law: The Curious Case of the Restatement of Copyright, forthcoming in a special issue of the Columbia Journal of Law & the Arts. Professors Balganesh and Menell discussed their concerns with me about the project–concerns that extend beyond copyright law.

Google v. Oracle XIII:  SCOTUS Should Be Skeptical of the “Sky Will Fall” Argument

I realize the Court will rule anytime now, and that I may be gilding the proverbial lily here; but I drafted this post in early January, and then the world got a little crazy and distracting. Anyway, FWIW, below is my last observation about Google v. Oracle. At least until after the decision. 🙂

In Google v. Oracle, the Supreme Court will render opinions on two legal arguments, either of which could have profound effects for different interests. The Court’s opinion on the copyrightability of Oracle’s “declaring code” will, in one way or another, be felt throughout the software industry, while the Court’s opinion on fair use will affect the entire ecosystem of creators in every category of copyrighted works.

As discussed in other posts, the Supreme Court should reject Google’s attempt to hyperextend the purpose and character of fair use, and in doing so, it should unanimously decline to transform modern copyright doctrine from the bench. In earlier posts, I discussed why Google’s claim that the code at issue should not be held uncopyrightable under the “merger doctrine” (§102(b)), which would have to affirm that the code at issue is a method rather than a form of expression. Nevertheless, the Court may feel hesitant to “upend the software industry,” if it is persuaded that finding copyrightability in Oracle’s code might have this result.

The most compelling argument in this regard is presented in the amicus brief filed by eighty-three computer scientists, which includes some of the most renowned names in software development over the last half century. It is hardly sensible for most of us—and certainly not for me—to debate that industry’s conduct with the likes of Steve Wozniack et al. If these experts say that “reimplementation” of software interfaces (APIs) is standard practice that the software industry has relied upon for decades, that statement must be given both deference and weight.

At the same time, we must keep in mind that “reimplementation” is not barred by copyright—that in fact much of the “open source” copying in that industry is bound by various conditions, which are defined by licensing agreements that are only enforceable under copyright law. In that regard, Java is a classic example of code that offers different tiers of licensing where, for instance, the educator may access all of Java for free, while the commercial user is subject to fees and other conditions. There is nothing remarkable or inherently stifling about these distinctions.

More specifically, as a question of law, even if we accept the computer scientists’ broad description of industry-wide reimplementation as fact, it tells us nothing about whether there is sufficient creativity in Oracle’s declaring code to qualify for copyright protection. In reviewing the various briefs filed by experts on both sides of this case, it seems clear that some declaring code is quite simple, and some is very complex—and creativity, presumably, expands with complexity. Further, there does not appear to be much if any quarrel with the premise that declaring code can be highly creative—easily creative enough for copyright to attach—and if that is correct, that should be the ballgame as a legal matter, regardless of industry practice and expectations. And Google has conceded that Oracle’s declaring code is creative.

This does not mean, however, that the Court will be wholly unsympathetic to the “standard practice” argument, or eager to disturb an entire industry if they believe this could be a consequence of its decision. So, let’s consider the argument a bit further, assuming the computer scientist amici are absolutely right on key facts, but perhaps a shade over-saturated in coloring their picture of the broader landscape relative to Google v. Oracle. For instance, I would pay attention to language in the brief that makes statements like, “Android is the most popular [mobile OS] in the world,” which is presented more than once in defense of Google’s reimplementation of the Java APIs to ultimately “transform” the mobile market.

That sentence caught my attention because the word popular implies consumer choice, which is in fact very limited in the mobile market. If the consumer is a dedicated Apple user, those phones are quite expensive. Alternatively, if the consumer needs a more affordable mobile device, she can choose among different phones that are nearly all running on one OS called Android.* And Android was not made freely and widely available as a gesture of Google’s largesse, or for the purpose of fostering competition of any kind.

While Google seeks to frame its free mobile OS as both generous and revolutionary, consumers have largely come to understand the digital-age axiom that if you’re not the customer, you’re the product. Google no more gives away Android “for free” than it does any of its other platforms. Consumers and various government agencies investigating antitrust practices fully recognize that the price of “free” has been to allow companies like Google to accumulate and manipulate data that is then used to alter consumer behavior, stifle small business in various markets, generate advertising revenue from the exploitation of often-questionable content, and, above all, to solidify their own market dominance.

This is not to say that if Google had licensed the Java code at issue, it would not still be the leading supplier in the mobile market—but that’s part of my point. The reason I homed in on this fallacy of Android’s “popularity” is that it informs a response to the claim in the computer scientists’ brief, which argues that “Uncopyrightable software interfaces address network effect barriers by enabling startups to plug into existing systems and innovate through cumulative improvements.” [Emphasis added]

While that sounds plausible as a generalization, in this particular case, the Court should be mindful that the forces buttressing Android’s market position—especially the network effects—render Google nearly immune to competition from startups. And these forces have little to do with copyright one way or another.

Android is a poor context in which to discuss “addressing network effect barriers.” Google’s market-share and wealth makes the company the very definition of a “network effect barrier.” As such, it seems equally possible that copyright (i.e. a mandate to license the code) is the only protection that a prospective startup has while attempting to thrive in a market presently conquered by the Googles, Amazons, and Facebooks. So, while a startup may get off the ground by copying some aspects of an already-dominant platform, the weakness Google now asks the Court write into copyright law would allow Google to turn around and copy the innovative aspects created by the startup, thereby crowding the startup out of business.

So, when the computer scientists’ brief describes competition in the market, it seems that it is often alluding to intramural competition on a technological playing field owned by one or a few prevailing companies. For instance, there may be competition among developers writing apps for the Android platform, but there is no startup, at least not in the American market, that can feasibly challenge Android for a piece of its share in mobile. And if such a startup were to emerge, it seems farfetched to allege that licensing declaring code, for instance, would be the barrier to stifle that prospective venture. Instead, it seems more likely that the barriers to that potential competitor are much more potent market forces that have little to do with copyright law in general, and nothing to do with the copyright questions presented in this case.

Are the Generalizations Instructive?

Quite possibly, the most intriguing segment of the computer scientists’ brief is where it describes how many developers, including Sun Microsystems itself in the development of Java, have reimplemented software interfaces in the process of bringing their products to market. This section presents a very clear portrait of standard industry practice, but it also reprises those two bugaboo questions I’ve asked before: 1) If unlicensed reimplementation has been so standard for so long, why did other commercial developers license Java declaring code for various purposes?; and 2) Why did Google itself almost enter into a license with Oracle that it only declined due to interoperability conditions with which it did not wish to comply?

Looking at this narrative as an outsider and giving all parties in the computer expert world their due respect, it is hard not to feel that, amid the generalizations about industry practice and innovation, some details are missing that are intrinsic to this case. Either declaring code is never the subject of copyright OR it is always the subject of copyright, OR some declaring code is properly protected while other declaring code is properly not protected. This latter conclusion would depend upon the amount of originality in the work, just like every other copyright category. And again, there seems to be consensus among all software experts that some declaring code can be highly creative, or as Deputy Solicitor General Malcolm Stewart described at oral arguments:

 …the briefs talk about the practice of copying interfaces or APIs, but those terms are very vague and potentially expansive. And a lot of things that might be called interfaces would be segments of code that are so short that they don’t exhibit necessary creativity, segments of code that are necessary to preserve interoperability. It may be that in particular circumstances, particular interfaces can be copied without authorization, but that’s not a basis for a general rule.

In other words, broad statements about industry practice, no matter how many names sign an amicus brief, can obfuscate the salient details in this case, as well as countless other scenarios in the software universe where reimplementation is ably supported by licensing agreements. This begs one of the real questions at issue, which is who benefits most from the bright-line rule the Court is being asked to make on the copyrightability of computer code—the independent software developer or the entrenched giant? While Google’s computer industry amici ask the Court to imagine how StartupXYZ benefits from copying GiantXYZ’s code, it also asks the Court to ignore the inverse scenario when GiantXYZ copies StartupXYZ’s code. It is easy to forget this when neither party in this lawsuit is a startup, but it is a question that should not be lost in a river of generalities.

Computer Scientist Brief Says Fair Use is Not Enough

Interestingly, the computer scientists’ brief asserts that a finding of fair use for Google would be of insufficient value to the software industry overall because this “would create uncertainty” in the trade. Naturally, a holding that declaring code is simply never protected is far more certain than a narrow finding of fair use in this one case, which would not preempt future litigation over copying the same kind of code. Thus, the computer scientists’ brief confirms that a finding of fair use would only help Google while asserting it would do little for the industry as a whole.

That’s just as well since finding fair use in Google v. Oracle would, I believe, be an error of law that would be holistically detrimental to creators in all industries. The fact that the defendant in this case happens to be directly responsible for evangelizing an extremely broad fair use doctrine, while reaping the financial benefits of widespread online infringement (e.g. on YouTube), is at least an aggravating factor, if not a dispositive one.

Returning to the questionable proposition that “uncopyrightable APIs” necessarily spawn competition and innovation, it is very hard to ignore the background narrative in which mass copyright infringement has been integral to Google’s acquisition of market share in various lines of business, thus producing the mother of all “network effects” such that parent company Alphabet—along with Facebook, Amazon, and Apple—is facing antitrust investigations in multiple countries. Simply put, words like competition are incompatible with Google’s conduct throughout the industry, and its monopolistic presence should at least color how the Court interprets the “standard practice” argument presented in this case.

If the Supreme Court can justly hold, as a matter of law, that the declaring code at issue is uncopyrightable under §102(b), then this is the only basis on which it should arrive at that finding. As for the broader implications for technological innovation, while it is certainly difficult to dismiss an august body of computer scientists, it is equally tough to reconcile the ways in which Android so dramatically belies their premise. Speaking as a consumer who feels pretty damned locked into very limited choices in mobile, I am simply not seeing the benefits of unlicensed reimplementation in this particular example.

*Though Microsoft is a player in mobile, it presently has a very small foothold.

Fair Use & The CASE Act

Although this week marks the eighth annual observation of Fair Use Week, I remain unconvinced that the fair use doctrine is any better understood today than it was before this ritual began. I see fair use errors all the time—e.g. in chat threads where creators are trying to do the right thing—and I maintain that it is often the fair use advocates themselves who cause confusion by promoting theories that have not thrived terribly well in court. And it is confusion about the legal use of works, especially online, that was a major reason why the small-claim copyright provision was finally adopted with the passage of the CASE Act in December.

I mention the CASE Act because the site fairuseweek.org led off this week with a post written by scholar Kenneth D. Crews which asserts the “defense of fair use will be on the docket” when the Copyright Office implements the law and establishes the small-claim copyright tribunal, the Copyright Claims Board (CCB) at the end of this year.

Granted, none of us can say for certain how events will transpire at the CCB, but Crews raises concerns that seem to predict that the doctrine itself may be amended by the decisions of the Board—and presumably not in a way the fair use advocates would endorse. Specifically, one statement by Crews caught my attention because it seems to echo a wishful thinking principle about factor four of the fair use test, and one that was recently rejected (again) in Dr. Seuss Enterprises v. ComicMix. Crews writes:

Think of that fourth factor of fair use: the effect of the use on the market for or value of the work.  A court will often need confidential economic data about the sales of the work in question and the revenue earned.  The Copyright Claims Officers, parties, and staff attorneys do not have clear authority to compel disclosures and discovery.  They can “request” documents and information.  As a result, the Board could frequently be called upon to decide questions of fair use, but without the needed evidence.  The choices at that point will be far from satisfactory.

While financial data may be relevant evidence when considering the potential harm to the rightsholder’s market under the fourth factor, the case law generally holds that this analysis is agnostic with regard to such details. In fact, ComicMix attempted to assert this exact defense, arguing that DSE should be required to prove with financial evidence the direct harm their mash-up book would do to the plaintiff’s market. The district court in that case erred when it agreed with this argument, but that error was overturned by the Ninth Circuit Court of Appeals, which held that ComicMix’s fair use defense failed on all four factors. As the court stated directly on this matter:

Not much about fair use doctrine lends itself to absolute statements, but the Supreme Court and our circuit have unequivocally placed the burden of proof on the proponent of the affirmative defense of fair use. ComicMix tries to plow new ground in contending that fair use is not an affirmative defense and that the burden shifts to Seuss to prove potential market harm.

So, turning to the CCB, it seems the most logical assumption is to expect that, as a small-claims body adjudicating relatively straightforward cases, the Officers will not be eager to “plow new ground” in fair use doctrine. In fact, the Board is obligated by statute to follow the law. Its fourth factor analyses, therefore, should be consistent with the courts and largely ignore detailed financial information (as Crews indicates may be necessary) because those facts are not especially germane to that prong of the test. At the same time, where there may be a circuit split on any matter, including fair use, the CCB is required by the CASE Act to follow the precedent of the circuit where the case would be decided if it went to court.

To reiterate a point made many times on this blog and elsewhere, because potential market harm implies a market the rightsholder has never exploited, including possible derivative works, there is no financial data available in such an instance. And despite attempts to argue the contrary, recent case law has reiterated the principle that fair use does not extinguish the copyright owner’s exclusive right to prepare derivative works, or to prevent the preparation of derivative works if that is the copyright owner’s decision.

I would also add that a fair use analysis is a mix of law and fact, and to the extent that anyone may be concerned about the fate of the doctrine itself, it is opinions of law that matter. When, inevitably, a case is presented to the CCB that contains errors of fact on either side, the outcome of that individual case may be unfair as a result, but the law remains unaffected. Still, I homed in on Crews’s comment about factor four because it highlights why I would question his thesis that fair use doctrine somehow hangs in the balance as the CCB is formed and begins to adjudicate cases. Concerned that the CCB might begin to write its own common law, Crews states:

Decisions from the Copyright Claims Board will not be binding on anyone other than the immediate parties, and they officially will have no precedential value in later actions in a court or before the Board.  Yet conventions of lawyering and the inevitability of human reasoning will surely press to the contrary.  As the Board builds a record of rulings, the outcomes and the reasoning will undoubtedly be fodder for scrutiny and statistical tabulation.  Individual rulings will in some manner be referenced in later proceedings.  Analyses of trends and patterns will be pursued for their scholarly value and as insights for parties and attorneys thinking about the next case to come before the new Board.

This apprehension appears to hinge on an assumption that the Board would make decisions or render opinions that might reshape fair use doctrine, even though, as Crews notes, there is nothing officially controlling about the Board’s opinions. This is doubtful. For one thing, the types of cases in which both parties agree to adjudication by the CCB are very unlikely to present revolutionary legal challenges not already answered by case law. Although we correctly describe fair use as a case-by-case consideration, that does not mean each case presents a novel consideration. Further, if this assumption is not a sufficient guardrail, the CASE Act contains a provision that allows the CCB to dismiss any case that presents a novel theory of law.

In the last ten years alone, we have seen a compelling variety of contemporary fair use defenses; and if the CCB merely follows that guidance, Crews’s concerns should be allayed. Unless, of course, the concern is not that the CCB will be inconsistent with case law but that it will further solidify case law. After all, advocates of a broader, or looser, fair use doctrine have generally not faired too well in a number of headline cases in federal courts. So, I imagine that if the CCB renders decisions that affirm ComicMix, ReDigi, KinderGuides, Brammer, and VidAngel, to name a few, this might not be very popular among those who currently advocate a more expansive approach to fair use.

Crews does state explicitly that fair use can “survive” the work of the Copyright Claims Board, and he is certainly not wrong to say that the efficacy of the Board has to prove itself—frankly in all aspects of copyright litigation, and not just fair use. Moreover, the rubber-meets-road decisions by the CCB may serve to better educate both plaintiffs and respondents about copyright’s protections and limitations. And finally, I disagree with Crews that a respondent who believes he has a fair use defense is safer opting out of a CCB adjudication in the early days of its existence. As discussed in this post about Brammer v. ViolentHues (a very typical digital-age litigation), the defendant might have arrived at the same rejection of his untenable fair use defense for a fraction of the cost.

Photo by Corgarashu