Category: Culture

DMCA Hearing 5: More Consensus Than You Might Think on Section 1201

On September 16th, the IP Subcommittee of the Senate Judiciary Committee held hearing number five in its ongoing review of the 22-year-old Digital Millennium Copyright Act. The subject was Title I of the DMCA, also referred to as §1201, which proscribes the circumvention of Digital Rights Management (DRM) technologies used to protect copyrighted works distributed through digital systems. When the DMCA was enacted in 1998, as the market was shifting away from the purchase of physical copies of works, DRM was predominantly used to control licensed access to creative content (e.g. eBooks) that falls under traditional categories of copyright law.

With regard to the ordinary consumption of music, movies, TV shows, books, etc., §1201’s protections have been highly successful for producers and consumers. Critics who scorn DRM on principle (i.e. hate copyright) are unlikely to acknowledge that all the variety and instant access we enjoy—from Audible to Netflix—is entirely founded on DMCA’s anti-circumvention provisions. At the same time, readers are probably familiar with, and sympathetic to, complaints about DRM preventing farmers from repairing tractors, patients from accessing medical data, security researchers from analyzing vital systems, or the blind and deaf from accessing reading material. Yet, despite a considerable volume of headlines on these issues, last week’s testimony sounded more like consensus than conflict.

Professor Blake Reid, Director of the Samuelson-Glushko Technology Law & Policy Clinic, testified on behalf of various constituencies that have been unintentionally harmed by §1201 and addressed, for instance, the matter of access to electronic books for the blind and deaf. Although organizations representing blind and deaf readers have successfully petitioned the Copyright Office for §1201 exemptions in its triennial rulemaking process, Reid and others assert that the requirement to re-apply every three years is a high burden for these constituencies, merely to maintain exemptions that have no opposition.

Not surprisingly, the Copyright Office seems to agree with Reid on this point. In her testimony before the committee, General Counsel Regan Smith stated that because the statute does not give the Office authority to grant permanent exemptions, Congress could make the process more efficient and fair by amending §1201 to explicitly and permanently exempt deaf and blind readers, along with other frequent petitioners (e.g. security researchers), who have consistently been granted exemptions without opposition. It stands to reason that the Copyright Office would prefer not to spend its limited resources reviewing and re-reviewing the petitions of these parties, to say nothing of the fact that many interests in circumventing DRM often fall under the jurisdictions of other agencies, like the EPA, more than the Library of Congress.

The apparent consensus between the Copyright Office and many of the stakeholders represented by Professor Reid suggest to me that all those headlines, which have fed a lot of §1201 rancor over the years, may be outdated with respect to the task before the IP subcommittee today. At least in the consideration of various categories of petitioners, there appears to be ample room for negotiating a compromise bill calling for a wider spectrum of permanent exemptions.

Where Conflict Persists

More generally, however, there remains an ideological split over the nature of §1201. Reid and others view the prohibition against circumvention of DRM as a prior restraint on those parties who would only circumvent in order to engage in otherwise legal conduct. Thus, these critics of Title I would like Congress to amend the statute to affirmatively state that circumvention for non-infringing purposes is not a violation of law. The Copyright Office does not endorse this nexus between circumvention and infringement. Especially with regard to §1201’s prohibition against trafficking in devices used for circumvention, this nexus would undermine the fundamental purpose of the statute, which is the aforementioned fostering of eBooks, streaming platforms, and all those services we enjoy.

Personally, I am not unsympathetic to Reid’s view, at least in principle. If a documentary filmmaker uses software to rip a scene from a DVD to incorporate into her film in a manner that would be considered a fair use, the act of circumvention does seem incidental to her otherwise legal conduct, especially because the DRM is there to protect copyright, which, in this hypothetical, is not being infringed. So, I get where Reid et al are coming from when they argue that the act of circumvention itself should not be a violation.

On the other hand, these types of one-off examples are at least a little bit flimsy as practical matters. If the doc filmmaker uses AV clips in a manner consistent with fair use, the owner of those clips is highly unlikely to file a viable legal complaint. And absent a solid copyright infringement claim, the prospect that the rightsholder will file suit solely on an allegation of circumvention seems like a dubious path for most attorneys to follow.

Doubtless, Reid and I could play Pong with different examples tilting toward one hypothetical outcome or another. But it seems to me that the more exemplary users represent a class (e.g. teachers), the more they belong in the above discussion about candidates who deserve permanent exemption, rather than serve as a rationale to codify an infringement nexus. In fact, both teachers and documentary filmmakers have been granted limited exemptions in prior USCO rulemakings and are both viable classes for the committee’s further consideration.  

If I can presume to read between the lines of the testimony, the Copyright Office has an interest in resolving many of the unanticipated conflicts that have arisen from the protection of software integrated into devices and machines that are not typically within the scope of copyright law; but the Office also has a duty to §1201’s original purpose to secure the rights of copyright owners to control the manner in which their creative works are accessed. Endorsing an infringement nexus would perhaps resolve the former, but it would also betray that latter. Hence, a more nuanced approach to legislative adjustment should be sufficient to satisfy all parties with balanced results.

See full summary of the hearing at Copyright Alliance.

Google v. Oracle IX: A Poor Fair Use Defense is an Opportunity for Guidance

I share the sorrow of millions at the passing of Justice Ruth Bader Ginsburg. The world has lost a genius of the law, who, in addition to her immeasurable contributions to American justice, was a great lover of the arts and a true champion of the rights of creators. My deepest condolences to her family, colleagues, and friends.

In my last post addressing the standard of review question presented in Google v. Oracle, I reiterated the fact that a fair use analysis is a holistic balancing of the four factor test and also suggested that while juries may fairly consider the facts that inform the test, the courts may be best suited to balance the interdependence of the statutory factors themselves. Nevertheless, we have recently seen a number of cases in which defendants have tried to advocate fundamental errors of law in fair use analyses—especially when it comes to the interaction between the first and fourth factors.

In its fair use defense, Google places considerable emphasis on the alleged novelty (in the market) when it used Oracle’s code in mobile devices. This “new context” assertion is the soul of its appeal to transformativeness under factor one which, it argues, bolsters its claim that its use of the copied code did not pose a threat to Oracle’s “potential market” under factor four. That is, if Google’s transformativeness claim were correct. It is not—neither as a question of fact nor of law.

The evidence that Oracle was already licensing Java for mobile in 2005 should be immediately fatal to Google’s argument that its use was transformative. But even without those facts—even in the wildly hypothetical scenario in which neither Oracle’s managers nor any of its prospective licensees could have imagined how Oracle’s code could be used in mobile devices—it is still an error of law to find transformativeness in cases in which the user merely copies a work to use it for the same purpose in a manner the author has not yet exploited, or might even decide not to exploit.

New Ventures Seek to Confuse Fair Use Analyses

In Disney et al. v. VidAngel (2017), the defendant asserted that it was transformative to provide “filtered” copies of mainstream motion pictures, having decided to litigate this infringing venture after the motion picture studios turned down VidAngel’s offers to license “filtered” versions. In granting plaintiffs’ motion for preliminary injunction, the California district court rejected all of VidAngel’s defenses, including its first and fourth factor assertions. Most pointedly, the court underscored the fallacy in VidAngel’s appeal to meeting a market “need,” stating, “The fact that 49% of VidAngel’s customers would view movies without filters shows that VidAngel’s service does serve as an effective substitute for Plaintiff’s unfiltered works, for approximately half of VidAngels [sic] users.”

Similarly, in Fox News v. TVEyes (2018), the defendant appealed to transformativeness, largely on the grounds that its news monitoring service, indexing and storing hundreds of news feeds, was both novel and highly useful. Thus, they hoped the courts might overlook the ways in which its service provided a market substitute for the plaintiff’s protected works. The Second Circuit reversed the lower court’s finding of fair use, holding that although the defendant’s Watch function was “slightly transformative,” this consideration was overwhelmed by its commercial nature and the fact that, under the fourth prong, “TVEyes makes available virtually the entirety of the Fox programming that TVEyes users want to see and hear.”

Nevertheless, it does seem that uses in new technological ventures, in conjunction with the inconsistent doctrine of transformativeness, fosters confusion about fair use jurisprudence where the Supreme Court may provide some guidance with its ruling in Google v. Oracle. I mentioned Brammer v. Violent Hues in the last post, in which it seemed the district court was perhaps a bit too distracted by the relative “newness” of internet commerce and, so, committed fundamental errors in its finding of fair use.

Brammer v. Violent Hues: A Simple Case Needlessly Complicated

The Fourth Circuit offered a roadmap in its recent correction of the fair use error in Brammer. There, the district court held that the defendant’s use of a photograph was transformative because he used an “expressive” work for an “informational” purpose.  Reversing on appeal, and perhaps stating the obvious, the Fourth Circuit held that all the defendant did “was publish a tourism guide for a commercial event and include the Photo to make the end product more visually interesting.” Such a use, the court stated, “would not constitute fair use when done in print, and it does not constitute fair use on the Internet.”

But the district court’s unfathomable, metaphysical bisection of a single image indicates how easily an unclear transformativeness doctrine can muddle an otherwise classic case of infringement. A fair bit of confusion seems to arise with regard to alleged transformativeness in uses that merely alter the context of a work, rather than its content. And for those, the Fourth Circuit observed that there are two viable paths for finding transformativeness:  documentary uses, and—as is relevant in Google v. Oracle—technological uses. In Brammer, the Fourth Circuit described “technological use” thus:

In [this] category, copyrighted works provide raw material for new technological functions. These functions are indifferent to the expressive aspects of the copied works. For example, we have held transformative the total reproduction of student essays for a plagiarism detection service because the database served an “entirely different function” that was unrelated to the expressive content of those essays.

In this observation, the Fourth Circuit concurred with the Second Circuit’s landmark decision in Authors Guild v. Google Inc., which similarly held a technological use to be transformative where it was indifferent to the copied works’ expressive aspects.  The Fourth Circuit reversal in Brammer is in harmony with an important limit to the Authors Guild opinion, which the Second Circuit acknowledged “test[d] the boundaries of fair use.” That critical limitation is the use of a work for a purpose unrelated to its expression; and in Brammer, the district court erred rather dramatically by inventing a “non-creative” (i.e. purely informational) purpose for the infringed work that, if upheld, would either void copyright in nearly all photographs or sow legal havoc.

Critically, Google’s use was entirely related to Oracle’s expressive content, and effectively resulted in the creation of an unauthorized derivative work.  As the brief for Oracle states, “For software, the quintessential derivative is a ‘version’ adapted for the next generation of devices or different operating systems.” Simply put, Google’s use of Oracle’s code in Android does not serve an “entirely different function,” but rather, performs the same set of functions for which the original expressions were written. Indeed, the declaring code Google copied would have been of little service in its time-to-market ambition if it had used the code for a truly novel purpose: this would have fouled Google’s intent to quickly attract Java-literate developers to write apps for its new platform.

The Supreme Court Could Help Shape Transformativeness

Appellate courts and legal experts, in response to outcomes like the lower court’s decision in Brammer, have highlighted another important limit to transformativeness. Brammer illustrates how a too-elastic read of “transformativeness” can swallow the author’s right to prepare derivative works under §106(2) of the Copyright Act. Stephen Carlisle of NOVA Southeastern University reminds us that the word “transformative” is part of the statutory definition of a protected derivative work:

A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.” [Emphasis added]

As a result, the transformativeness analysis must be careful to avoid eliminating the copyright owner’s right to create derivative works. Further, because many courts have found that the transformativeness doctrine under factor one exerts considerable influence over factor four considerations—though, as discussed below, such a view is out of step with the Supreme Court’s precedent—an erroneous finding that a use is transformative will often tee up an aggravating error that the use does not threaten the “potential market” for the original work.

A possible difficulty with software is that caselaw comprises more fair use decisions involving expressive uses than “technological uses” as described by the Fourth Circuit. This does not mean, however, that expressive use cases are not instructive—especially in cases like Oracle, where Google’s copying served an expressive purpose.

In Campbell v. Acuff-Rose, the Supreme Court held that 2 Live Crew’s parody of Roy Orbison’s “Oh, Pretty Woman” though clearly implicating Orbison’s derivative work right, was transformative under factor one on the grounds that its parody commented upon the original song. Correspondingly, under factor four, the opinion held that the 2 Live Crew song did not threaten the market for the original “Oh, Pretty Woman” in part because, as a scathing parody, it was a work the copyright owners never would have produced or licensed. Accordingly, Campbell stated that, “The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop.” 

Importantly, however, the Court did not state that any transformativeness finding swamps the factor four analysis—to the contrary, it remanded to assess the market harm caused by the parody. Thus, the transformativeness analysis has limits. We are nowhere near those limits in Google v. Oracle, but the Court can still provide guidance in this area.

Due to continued ambiguity about the meaning of “transformative,” a number of fair use claimants (e.g. VidAngel and TVEyes) have lately tried, and largely failed, to convince the courts that a rightsholder’s “potential market” under factor four is synonymous with the “existing” market. Were this true, the classic example in which the novelist retains the right to authorize, or not authorize, a film adaptation of her book would be abrogated by contemporary ventures in fair uses analyses encroaching on the territory of the derivative works right. As the Supreme Court held in Stewart v. Abend (1990), the derivative works right survives intact among the bundle of rights reserved by the author or his assigns, even with respect to an unlicensed release of a film during the second term of copyright that had been licensed under the first term.*

In response to the petitioner’s fair use defense under factor four, the Court held, “Fourth, and most important, the record supports the conclusion that rerelease of the film impinged on Abend’s ability to market new versions of the story.”  This remains the correct interpretation of “potential” market under the fourth prong, and which proscribes trespassing into §106(2) territory.

Nevertheless, as recently as 2017, in Penguin Books et al. v. KinderGuides, the defendant in that case produced unlicensed children’s book versions of classic novels and asserted that, because the rightsholders had not exploited the children’s market in this manner, its products posed no threat to the “potential” market. In response, Judge Rakoff of the Southern District of New York rejected this quite plainly, stating, “the fact that any given author has decided not to exploit certain rights does not mean that others gain the right to exploit them.”

Defining the Boundaries of Fair Use in the Digital Age

As stated above, there can be no confusion about the facts in Google v. Oracle with regard to the first and fourth factors. Oracle has presented evidence that it had already entered the mobile market at the time Google copied the code at issue. But more broadly, Google’s fair use defense begs the Supreme Court to enshrine largely failed and dubious lower court misapplications of first and fourth factor analyses into copyright caselaw. Even if that is not Google’s exigent goal, the long-term results of accepting their fair use argument in this extraordinarily high-profile case would be detrimental to millions of copyright owners who will never make the headlines.

In this case, the Supreme Court has the opportunity to provide a clear declaration that Google’s use lies well beyond the reach of transformativeness and, although the facts show that it was not a new context, even if it were novel, incorporating the code for mobile remains protected under Oracle’s right to prepare derivative works. As in Brammer, it’s really just a simple case of copying, but Google has insisted upon complicating matters.

Google and other technology developers have tried, and largely failed, to convince courts that “transformativeness” is synonymous with “changing the world,” a claim that technologists in particular like to assert about themselves quite often. But the Second Circuit in Authors Guild v. HathiTrust drew a clear distinction between industry hubris and fair use when it stated, “a use does not become transformative by making an invaluable contribution to the progress of science and cultivation of the arts. Added value or utility is not the test: a transformative work is one that serves a new and different function from the original work and is not a substitute for it.”

That court’s echo of the Constitution’s IP clause is especially compelling. While companies like Google often appeal to the rhetorical argument that every use fulfills the constitutional purpose to “promote progress,” this generalization is clearly not the standard that needs to be met to achieve that goal through trampling the rights of prior authors’ in their contributions to progress. If that were the standard, fair use would cease to be an exception to copyright because copyright’s statutory protections would no longer exist.

* The case involved the adaptation of Cornell Woolrich’s It Had to Be Murder into the Hitchcock classic Rear Window.

** This of course does not stop Google from defending its own intellectual property.

Allen v. Cooper Revisited III: Data Suggests States Willfully Infringe Copyrights

In my first two Revisited posts summarizing the legislative and judicial history leading up to the Supreme Court decision in Allen v. Cooper, I dove into some fairly deep waters. But now, let’s return to the practical matter at hand for contemporary authors of creative works. In short, if a state entity infringes your copyrights, you’re basically hosed. Meanwhile, unjust though it is, state entities, as major copyright owners, may avail themselves of the law when enforcing their copyrights against infringement.

To be precise, if a state actor infringes your copyrights, you cannot not sue for money damages. At best, you may be able to obtain an injunction against the state entity and force it to discontinue the infringing conduct; but without the prospect of money changing hands, initiating a federal lawsuit is prohibitive for most authors. To summarize the Supreme Court in Allen v. Cooper, it upheld its own precedent rulings (1900s-2000) that Congress may not abrogate 11th Amendment immunity (a.k.a.) state sovereign immunity, even under its Article I power to protect intellectual property.

But, as mentioned, the Court’s opinions in Allen also provided Congress with a roadmap, albeit a limited one, whereby new remedial legislation could potentially abrogate state immunity for infringements of intellectual property. Any new legislation must be based solely on the 14th Amendment’s prohibition against the taking of property without due process, and it must be backed by solid data showing that “willful and reckless” infringement by states is a substantial enough problem for creators that the constitutional abrogation can withstand the precedent decisions in these matters. When a case is ultimately tried of course.

State Actors Seem to Know They’re Immune

In response to the Court’s legislative “roadmap” in Allen, Senators Tillis and Leahy sent letters to the Copyright Office and the Patent and Trademark Office requesting comment and evidence related to the scope of state IP infringement. In response, the USCO issued a notice of inquiry seeking input from creators and copyright owners about their experiences with state infringers. In support of this effort, the Copyright Alliance created a public survey, which included the USCO criteria. Preliminary data from the CA survey bolsters the assumption that state infringement is increasing and may be increasing because state actors are aware of their immunity from litigation.

Over a six-week period, 655 Copyright Alliance members responded, with 115 reporting that their works were infringed by state entities. Specifically, Congress should take note of those rightsholders who report that they were initially contacted by state actors for licenses, and when the rightsholders declined, the state actors proceeded to use the work(s) anyway. “… respondents who viewed the infringement as intentional…[described] situations in which an attorney’s warnings were ignored, copyright management information (CMI) on the works was ignored or removed, or use of the works continued when an entity was aware that a license had expired,” the Copyright Alliance report states.  

Further, not only do these data imply a substantial amount of willful infringement, but 44% of respondents report that when they demanded that the state actors cease the infringing conduct, the infringers specifically invoked sovereign immunity as a reason for non-compliance. More than half the infringing entities, according to the creators who offered descriptions, were state universities, while the rest were organizations like tourism boards, state departments, and museums.

Assuming that these data indicate that many state infringers are acting upon an increased awareness of their immune status, this points to a reasonable conclusion that a substantial proportion of state infringements meet the standard of “reckless and willful,” as the Supreme Court opined in Allen would be necessary for Congress abrogate immunity. Meanwhile, nearly 70% of respondents to the CA survey report that they believe they lost revenue or licensing opportunities because of state infringement.

Oddly enough, it is possible that high-profile litigation like Allen v. Cooper, which principally affirmed a 2000 decision (Chavez v. Arte Publico Press) on the state immunity question for copyright infringement, may have the effect of emboldening state actors to engage in more brazen acts of reckless and willful infringement. At the same time, the Court was unequivocal in its unanimous view that state immunity in this regard is simply wrong; and absent Rick Allen’s lawsuit, authors would not have the SCOTUS opinions in their arsenal.

In the meantime, Rick Allen, on September 4, filed a motion to reconsider one count of his complaint against the state of North Carolina. The motion states, “These allegations (and still further allegations of intentional infringement, inadequate remedies, and absence of process that Allen will add if permitted to do so) would support a finding that North Carolina’s conduct violated not only the Copyright Act but the Fifth and Fourteenth Amendments as well.” More on that in the next post addressing state IP infringement.