Category: Law & Policy

What’s the Protecting Lawful Streaming Act Really About?

As with the CASE Act, anti-copyright (and even some copyright-neutral) voices reacted on social media to the fact that a bill called the Protecting Lawful Streaming Act (PLSA) was attached to the massive omnibus spending package that passed Congress last night.  What this bill will do is make enterprise-scale criminal copyright infringement, by means of digital streaming, a felony rather than a misdemeanor. So, once again, the gnashing of teeth began, alleging that Congress kowtowed to Hollywood, that this provision was snuck in as a rider at the 11th hour, and that making streaming a felony threatens all manner of innocent internet users. As usual, none of the above is true.

I wrote about felony streaming in the body of a post about the indictments against a group of men operating an illegal streaming service called Jetflicks in the U.S., and I shall republish here with minor alterations:

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

But clearly, the kind of harm that will be caused by enterprise-scale infringement via online streaming is greater than any amount of counterfeiting that was done in the pre-digital age. If selling ten thousand bootlegs out of a warehouse in 1988 was a felony, then how can it make sense that illegally streaming tens of thousands of works to tens of millions of viewers is considered a lesser crime?  A letter written in July of 2019 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.”

So, the distinction that made mass infringement via streaming a misdemeanor was a technicality, a loophole, that no longer applied to the real world of digital-age piracy for profit. The PLSA, which was not conjured in the wee hours of last night’s omnibus spending bill haggling, simply closes the loophole. It has no bearing on any individual users, legal streaming services, or even individual streaming of an infringing use; and it changes nothing about the nature of civil copyright enforcement. So, unless you are building the next Pirate Bay or Megaupload or Jetflicks—and doing so within the reach of American jurisdiction—you would never need to know about this change to the criminal code.

As usual, the internet industry, with the support of its network of anti-copyright pundits, simply oppose enforcement at every opportunity, and this was one of those opportunities. That said, it is true that, unlike the CASE Act, Hollywood does have an interest in felony streaming. And why wouldn’t they? If we’re using “Hollywood” as a generic term for motion picture producers, whose products do we think are illegally streamed in mass quantity by pirate enterprises? But like the CASE Act, the proposal to close the streaming loophole has been in public discussion for many years for the reasons I have stated, and it is political theater to allege that Congress suddenly “caved” to Hollywood on this matter.

In reality, the PLSA is the result of months of negotiations between content industry representatives and parties representing online platforms and user communities. Because the bill was narrowly tailored—at the insistence of those purporting to represent users—groups that usually express concern with any copyright legislation agreed to the final language of the bill and even went on record at a House Judiciary Hearing saying that they were not opposed to the bill.

So, nobody caved to Hollywood, as Techdirt will tell you, because the legislative amendment just makes common sense to anyone looking at the issue; and the only people this change will affect negatively are criminal operators, who cause economic harm to a whole segment of middle-class workers. Meanwhile, the handful of critics, shouting from their rather well-feathered aeries in academia and industry-funded think tanks, should maybe shut up about this one and find something real to complain about. We’ve got plenty.

Image by: Elnur

Omnibus Bill Passes Congress, Anti-Copyright Crowd Turns Shrill

I have covered the development of the CASE Act in depth. But because the usual gang of anti-copyright zealots began screaming on social media at the news that the small-claim copyright provision was attached to the omnibus spending bill that passed last night, I offer some responses to those allegations about CASE that are factually untrue as well as the predictions that are logically unsupportable. (In a separate post, I will discuss the felony streaming bill that also passed as part of the spending bill.)

CASE Facts Anyone Can Check Themselves

The CASE Act has been the subject of public Congressional consideration, negotiation, debates, and votes for almost two years. And the more general proposal of a copyright small claims solution was in discussion for several years before that. The few objectors’ cloak-and-dagger narrative is a favorite tactic used by just about any party that doesn’t like a particular proposal, and it is demonstrably false in this circumstance. If CASE has been “sneaking” its way through the legislature, it has been doing so in broad daylight and moving very slowly. Because here are some basic realities that readers are free to verify:

  1. the idea of creating a small-claim copyright provision has been discussed in copyright circles and on Capitol Hill for more than decade;
  2. the CASE Act specifically has been the subject of public Congressional consideration over and over;
  3. the CASE Act passed the House 14 months ago with a vote of 410-6;
  4. CASE Act received bipartisan co-sponsorship from nearly one quarter of the Senate;
  5. the CASE Act is a voluntary alternative dispute resolution and is, therefore, not a violation of any party’s right to due process;
  6. the CASE Act has nothing to do with Hollywood or other Big Media, which has no interest in small copyright claims because duh; and
  7. the CASE Act would probably be law already, if Senator Wyden had not put a hold on the bill and refused to engage in any discussion that would not have poisoned its core purpose.

On that last point, it cannot be overstated that the fully transparent, normal legislative process was stopped dead in its tracks by Senator Wyden’s hold. Although CASE critics have tried to paint the senator’s recalcitrance as an act of courage, in reality, he pandered and condescended to his own constituents in Oregon who wanted the bill passed, blew a lot of hot air about erroneous and generalized concerns, and then refused to negotiate a single good-faith amendment to the bill. His only proposals would simply have gutted the intent of the bill. Not only was Wyden wrong about CASE itself, but he hyperextended the purpose of Senate holds, which he once personally advocated should last no longer than 24 hours.

Sane Predictions or Scare Tactics?

Anyone with a brand and a following can make a prediction without backup because, of course, predictions cannot be disproven by evidence. Nevertheless, the ACLU, the EFF, Mike Masnick, Public Knowledge, et al have predicted that the voluntary tribunal established by CASE, the Copyright Claims Board (CCB), will be a venue attractive to copyright trolls,* and they once again invoke the generalized bugbear that CASE will chill free speech online.

Regarding copyright trolls, I have explained in as much detail as I can contemplate (see posts here, here, here, and here) why the Copyright Claims Board would be a money-losing forum for the unscrupulous attorney—namely, that the bill contains multiple anti-troll barriers, which no Article III court can provide. While the critics lazily allude to trolling in general and predict, without supporting arguments, why the CCB would increase trolling, I explain in this post about an actual troll litigation why the CCB is more likely to decrease the volume of trolling by providing an alternative for the kind of plaintiffs who are often the targets of trolls in the digital age.

The copyright skeptics are unlikely to admit that the massive increase in online infringement has been a primary, if not the primary, driver of increased troll-like litigation. But as the judge in the case mentioned above wrote, “Misuse of intellectual property has become a pervasive problem in the internet era and one that is especially pernicious for freelance photographers like [the plaintiff], who often lack the resources to pursue claims in court.”

The critics are free to rebut the theory that CASE would decrease trolling, citing evidence and applying reason, but they do not. Instead, they merely asked Congress and the public to take their word for it, under the imprimaturs of their brands, that CASE will increase trolling because they say so. And in that same vein, anyone who takes the “chill speech on the internet” claim seriously at this point is blindly submitting to the undeserved street cred of parties like the ALCU without actually thinking the issue through very clearly. 

There is a reason why the “online speech” narrative has proven to be incoherent at best, and nation-destroying at worst. Constitutional scholar Mary Ann Franks sums it up adroitly in her book Cult of the Constitution, in which she describes both the ALCU and the EFF in particular as “first amendment fundamentalists,” who “aggressively embrace” the “marketplace of ideas” theory of free speech. “According to the marketplace of ideas theory,” writes Franks, “unfettered competition will eventually lead to the truth.” Can anyone seriously claim that truth is winning so far?

On the contrary, we have watched the effects of laissez-faire internet moderation cause devastating, potentially self-annihilating harm to the very essence of truth, and we have largely ignored how often speech is silenced for people outside the privileged bro-culture of Silicon Valley. But without digressing fully into that complex subject in this post, suffice to say the premise that all online activity must be accorded first amendment-like deference is a profoundly failed theory in general, and even if this were not plainly true, the act of legitimate copyright enforcement is not in conflict with the first amendment.

I know what the classic frightful scenario is, but in the spirit of the season, let me say that Grandma will not get run over by the CASE Act. Neither she, nor anyone else, will innocently share a meme on Facebook and find themselves mysteriously on the hook for a damage award that was rubber-stamped by the CCB. That fiction is blatant fearmongering by a multi-billion-dollar industry that benefits when rightsholders have as a few remedies as possible for infringement of their works. Meanwhile, the small-claim provision does exactly what this same industry claims it wants rightsholders to do about enforcement, which is to direct their complaints at primary parties who have allegedly infringed.

The CASE Act provides a badly needed, though limited, remedy for independent creators who make modest livings from their creative work. A copyright owner must file meritorious claims, pay filing fees, and may only file up to ten claims per year; and the respondent must voluntarily submit to the ruling of the CCB. So, the limitations for the average copyright owner, making perhaps $30-40,000 annually from her creative work, are quite clear: she only has the resources to try to remedy the most harmful infringements, which will often be infringements by commercial users who dodged the responsibility of licensing her work. There is nothing insidious, secretive, or unconstitutional about that.

The last-minute efforts to oppose to the CASE Act by a small corner of anti-copyright special interests presented a slurry of unsupported, implausible, and discredited claims about the bill, mixed with process arguments that are misleading lies of omission. The truth is the bill would likely have already been signed into law a year ago if not for the hypocritical use of the Senate hold procedure to prevent further debate or voting on the proposal. Fortunately, the overwhelming bipartisan support for CASE overcame all that and may finally provide entrepreneurial creators a remedy they have been seeking for a very long time.

*Copyright trolls are attorneys who engage in unscrupulous practice and/or bring unmeritorious claims in order to frighten defendants into settlements, but copyright critics also exaggerate the scope of the “troll problem.”

Inconvenient Friction: DMCA Review 2020

Tomorrow (December 18, 2020), the Senate Judiciary Committee will present draft legislation with proposed amendments to the Digital Millennium Copyright Act of 1998. Whatever is in the draft will probably set someone’s hair on fire—or perhaps everyone’s hair on fire who has an interest in digital-age copyright enforcement. But any initial shouting will then hunker down for the drudgery of legislative haggling, which could take years. As Chairman Tillis noted in his opening remarks in the final 2020 DMCA hearing held on 12/15, it will most likely take all of his second term to get any new legislation “across the finish line.”

Tuesday’s hearing, titled The Role of Private Agreements and Existing Technology in Curbing Online Piracy, was another two-panel session with testimony by witnesses from both copyright owner and platform owner industries. Heavyweights YouTube and Facebook were in attendance, and it was noted that Twitter declined to participate. The copyright owners were most prominently represented by CreativeFuture and Copyright Alliance. All the familiar themes were reprised by both sides, but I would draw readers’ attention to the testimony of Noah Becker, music creator, and co-founder of the digital rights management company AdRev, because it presents the following information:

AdRev, which works in conjunction with YouTube’s Content ID system to identify protected works, reviews thousands of disputed takedowns every week and finds that 30% of disputes are valid, while 70% are invalid. Why do I highlight that stat? Because there is so much generalized noise about wrongful takedown allegedly silencing speech and stifling “new” creative expression despite the fact that these generalizations are not well supported by data.

The observation by AdRev that most disputes are invalid (e.g. erroneous claims of fair use*) concurs with anecdotal evidence (e.g. most people don’t understand fair use); but the fact that 30% of disputes are found to be valid, and therefore left online, also demonstrates that a more robust system of technological enforcement can benefit both owners and users of copyrighted works. As Becker stated in his testimony:

[Filtering systems] allow bona fide fair uses to thrive on the platform. YouTube’s amazing success attests to the fact that the system, works. Content ID can match millions of fingerprints against billions of hours of video while providing copyright owners and users a set of tools to easily communicate with each other about rights claims and related issues.

YouTube’s own testimony states that fewer than 1% of the takedowns it receives are disputed and that among the disputed, 55% of these favor the user of the material. This indicates that fewer than .5% of all takedowns on the platform are potentially wrongful.

Echoing the foundation of the class-action suit against YouTube by composer Maria Schneider, Becker notes that although systems like Content ID work quite well, small and independent rightsholders are not granted access to that technology by YouTube, and they generally cannot afford outside services like AdRev. Nevertheless, opponents of more robust online enforcement (i.e. advocates for the status quo of Section 512) will continue to ask Congress to ignore independent, professional creators for the sake of “new creators,” which is odd because many “new creators” want to be professionals as well.

The “New Creators” Argument Against Enforcement

In Tuesday’s hearing Joshua Lamel of Re:Create Coalition alluded once again to a somewhat ambiguous class of internet users known as “new creators,” a term so expansive that it encompasses new artists who would like to become professionals, pure hobbyists, small-business product makers, social media influencers, and media creators who presently earn revenue from online-only platforms (e.g. YouTubers receiving a share of ad revenues). While no party, whether amateur, professional, or would-be professional, should be ignored in the DMCA conversation, Congress should note that organizations like Re:Create tend to paint a very broad tapestry with the hope that nobody considers how much of this “new” creative activity is not in conflict with copyright enforcement.

On the contrary, many “new creators” are either immediately or eventually just as dependent on copyright as the “old creators.” For evidence, the IP Subcommittee need look no further than the small businesses operating in every state that find their creative products counterfeited on sites like Amazon, Etsy, and eBay. Further, with regard to generalizations about the class of “new creators,” Congress should be mindful of at least the following five considerations:

1) there does not appear to be any clear evidence proving that chronic, wrongful takedown is as rampant as alleged by various parties, let alone that the class of “new creators” has been substantially harmed by same;

2) per AdRev’s evidence, broadening the application of STM should support “new creators” by extending technological capabilities to more notice senders and respondents;

3) “New creators” like YouTubers are equally concerned with protection of their works (as YouTube’s Copyright Match system demonstrates);

4) The online marketplace for “new creators” remains too young and mercurial for policy to be predicated on over-eager predictions about economic or cultural benefits; and

5) The major platforms are an oligopoly where a single site like YouTube can amend its terms at will, leading to events like the “adpocalypse” that abruptly cut off ad revenue for many “new creators.”

With regard to points 4 and 5, Congress should view these negotiations in the context of copyright’s history and remember that at various moments in amending U.S. copyright law, one industry or another has advanced an interest in preventing some class of creators from enforcing its rights. At the time of the 1909 Act, the newspapers fought to avoid licensing photographs, and the player-piano companies didn’t want to license musical compositions; and a few years later, at the time motion pictures were added to copyright in 1912, the movie producers generally hoped to avoid licensing adaptations of novels. This is not a new story.

Today, the major internet companies would prefer to abrogate copyright enforcement altogether as an inconvenient friction gumming up the free flow of money through their advertising platforms. One big difference in this era is that YouTube, Facebook, et al pretend that they are not the parties exploiting creative works while they profit to the tune of billions of dollars from the exploitation. That ruse has persisted long enough. And at no time in copyright’s legislative history has protecting the individual creators’ interests from the users’ interests failed to fulfill copyright’s purpose to promote progress.

*AdRev also notes improper claims of valid licenses and/or that the material used is in the public domain.