Category: Copyright

Copyright Small Claims: A Solution for Many Creators

In my experience, the number-one complaint about contemporary copyright is that it is unenforceable in the digital age. Independent creators take one look at the scope of infringement relative to the cost of a single litigation and give up on the idea that they have any control. Many infringers—from casual to corporate—are either unaware that they’re infringing or they know how unlikely enforcement is for small creators; and this breeds the kind of smug responses we read about all the time. You know the ones. Where even a major brand uses a photograph for its marketing and then tells the photographer he has a lot of nerve to ask for money and should actually be grateful for the “exposure.”

On top of all this day-to-day infringement, the sage critics of copyright, those self-appointed defenders of the tubes, tell everyone there is no way to enforce copyrights online without sabotaging the delicate workings of the web. Some of these ivory-tower think-tankers even claim to care about authors with a sympathetic shrug and declare, “Artists do deserve to get paid, but we can’t afford to damage the innovation. You don’t want to hurt the innovation, do you?” Ergo, non-enforcement for thousands of small-scale and start-up creators becomes a predicate for steadily eroding copyright as principle.

The Small Claims Bill

It won’t solve every problem, but it should make a tangible difference for a significant population of creators who currently do not avail themselves of any enforcement procedure, but would if the barriers were lower. And frankly, copyright critics and internet-advocates (the ones who claim to care about creators) should actually support this bill because it establishes a forum for narrow, voluntary, and limited resolution between a rights holder and an alleged infringer without creating even a hint of a new liability implication for investing in web platforms.

H.R. 3945, the Copyright Alternative in Small-Claims Enforcement Act (CASE) has been more than a decade in the works. This amendment to the copyright law would establish a three-officer Copyright Claims Board within the Copyright Office, comprising two expert copyright attorneys and one attorney with specific experience in alternative dispute resolution. Rights holders can file complaints through electronic communications, without an attorney, and respondents may avail themselves of all the same defenses (e.g. fair use) that may be asserted in a federal litigation.

A Few Key Features

The small-claim option is voluntary for all parties and has the legal enforcement status of “alternative dispute resolution.” It does not preclude either claimants or respondents from availing themselves of litigation by opting out of the small-claim process; and re-litigation is an option if claims or counterclaims were not raised and decided upon by the Board. (See CORRECTION note below.) Both parties must agree to specific opt-out obligations. For instance, a respondent has 30 days to opt out upon original notice of proceeding or he/she may lose in a default judgment that is then enforceable through any court in the U.S.

A rights holder may initiate a small claim for a work that is not registered but must file a registration concurrent with the proceeding. If the work was not registered at the time of infringement, this limits the maximum award the rights holder may seek through the small-claim process, but it is an option for some relief that does not exist in federal litigation, which is impossible for an unregistered work.**

One big advantage to the small-claim provision that rights holders and copyright critics should like (though I wouldn’t hold my breath for the critics) is that the Copyright Claims Board is a copyright only panel. This is significant because ordinary court filings are sometimes bogged down by a litany of complaints or defenses that have little to do with copyright infringement, and the courts have to slog through these while the meter is running. Moreover, the small-claim panel’s specific expertise in copyright law is not necessarily going to be present in any number of federal judges, who might be presiding over hate crime in the morning and copyright in the afternoon. This copyright-specific aspect of the Board should be beneficial to both claimants and respondents.

Both claimants and respondents can avail themselves of the small-claim option without attending proceedings in person. Most of the process is handled through electronic filings with a proposal to use video conferencing for discussion and resolution. One of the myths being spread about this bill is that both parties are required to travel to Washington, D.C. Not true.

Attorneys may be employed by either party but are not required. This can prove particularly helpful in cases where the rights holder seeks a relatively modest settlement for an infringement he does not consider highly egregious or highly costly to his interests.

Although some of the usual copyright haters, like Public Knowledge, assert that the Board will become a “clearing house for awarding fees to every copyright troll” in the country, this assumption actually makes little sense. For example, the bill contains anti-abuse provisions that don’t exist in regular court proceedings. A bad-faith claimant can bring lousy copyright cases to court week after week. But a claimant who files bad-faith (i.e. harassing) complaints with the Copyright Claims Board may face financial penalties and/or be barred from using the small claims option for a year.

Rebalancing the Landscape

In everyday practice, a vast population of rights holders you’ve never heard of have neither the time nor the interest to restrict every casual use of their work online; and by the same token, a vast number of users you’ve never heard of don’t even understand when they’re infringing. This problem has been exacerbated by PR funded by the internet industry, which has a vested interest in weakening copyright and could not care less who among these nameless parties is harmed amid all the confusion.

These authors, who want to maintain control over their work, are not out to punish every blogger and they are certainly not expecting to earn big money through litigation. But the entrenched assumption that everything online is there for the taking has to stop. Most infringements are the result of laziness, ignorance, or greed—all of which is very easily ameliorated with a basic (and free-to-use) guideline: don’t use what isn’t yours without permission. And if the small claim option gives more independent creators a path to enforce their rights, then there’s a decent chance that small-time infringers will discover the value of this very simple rule of thumb.

A New Reason to Register Works

One of the concerns raised by my friend Leslie Burns is that the small claim provision will act as a disincentive to register works. She may be right with regard to people’s habits—artists do hate paperwork—but I would recommend that creators view the small claim provision as a great reason to register works because it provides a new path for enforcement that is only strengthened by timely registration.* Not only can a claim for a timely-registered work receive a higher maximum award for damages, but registration also shows an alleged infringer (respondent) that the author is serious about the work and the claim, and this should act as an incentive for the respondent to opt-in to the cheaper and easier small-claim process.
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*Timely registration has a technical meaning in the statute.

**Apropos a from a new reader, this does not reject the possibility of prevailing in a claim for actual damages for infringement of an unregistered work, but such claims are highly unlikely to avail themselves of the small claim option.

CORRECTION:  As originally published, I stated that parties could still litigate without restriction after the judgment of the Board. This was incorrect.

Hand photo by TanyaRozhnovskaya

Digital-Age Copyright:  Photographs and the News

You might think that among the most straightforward relationships between a user and a creator of a copyrighted work would be that of a news organization and a photographer—namely that the news organization should license the photographs it uses for any of its stories.  It is also common-sensical that whenever a news organization displays a photograph in a manner that either disseminates news under its brand and/or promotes its brand, that the organization is deriving commercial benefit from its display of the photographer’s work.  As such, it should not matter—in fact the nature of the web demands that it must not matter—where the image is actually hosted.  Unfortunately, that’s not necessarily how the law works right now.

This article in Above the Law by attorney Scott Alan Burroughs alludes to a case that exemplifies how the current copyright law underserves creators in the digital age. At issue is a photograph of athlete Tom Brady, taken by photographer Justin Goldman in 2016, and used without permission, first by Breitbart News and then by ten other news organizations.  Goldman alleges infringement of his exclusive right to display his work and seeks relief in the form of damages and attorney fees from all eleven news organizations.

The EFF filed an amicus brief (10/5/17) on behalf of the defendants, asserting the precedent established by the 9th Circuit in Perfect 10 v. Amazon.com (a.k.a Perfect 10 v. Google) (2007), in which the plaintiff argued that Google violated the display right by making full-size images available via the Google Image Search tool. The court held that because these full-size images were hosted in various places around the web and not on Google’s servers, that Google was not in possession of “copies” according to the plain language of the law (Sec. 101) and could not, therefore, infringe the display right.

The decision in Perfect 10 provided a precedent known as the “server test,” and the EFF may be correct that it will be the standard applied in the Goldman case.  But it shouldn’t be because it represents an easy end-run around the public display right that effectively obliterates the right in cyberspace.  It is also important to note that linking to pages (what is sometimes called “deep-linking”) should not be viewed as infringing, but this kind of “in-line linking” whereby a site embeds code to cause an image to appear on its page while the image is hosted by another party’s server, is the problem. (Meanwhile, note that Playboy is suing BoingBoing for displaying centerfold images in exactly the same manner.)**

The Server Test Doesn’t Make Sense

To maintain the purpose of copyright with respect to the way the internet functions, the standard in a case like Goldman v. Breitbart et al should not turn on whose server hosts a copy of the photograph, but who takes action to display the photograph and for what purpose. This interpretation of the author’s right to display works would conform to any reasonable person’s understanding of the actual market experience.  “The argument [for the server test], in essence, is that for-profit sites should be able to publish whatever they want without the consent of the artist so long as the photograph or video is published via an embed. This argument has no merit, though, because the end result is exactly the same to the viewer, and the viewer is the basis for the site’s profits,” Burroughs writes.

The news corporations in this case are making use of Goldman’s photograph to generate interest in whatever story they want people to read and to promote their brands online. Clearly, they are leveraging the value created by the photographer, which is exactly what copyright is designed to protect.  As such, licensing in these instances would be consistent with the goals of copyright law, regardless of the technical means by which a user makes the display of the protected work visible to its audience.  Moreover, the photographer may be earning revenue through advertising by allowing an image to be used on Site A, but if Site B, C, and D in-line link the image to their pages, the photographer loses revenue.

Clearly, this has implications beyond news organizations. If, for instance, Johnson & Johnson, by the rationale applied in Perfect 10,  were to display photographs for marketing purposes without permission, this would demonstrably undermine copyright’s intent; and it is hard to imagine that the public would actually support this kind of corporate appropriation of individual labor without permission or compensation. Certainly, every time a site like PetaPixel shares another story in which a business uses a photographer’s work for advertising without permission, I never see anyone cheer for the corporate infringer. (Though they may privately light sparklers or something over at the EFF.)

Is Legislative Reform Needed?

Be it far from this layman to question the statutory interpretations of the 9th Circuit Court of Appeals, but whether it’s in Goldman or another case, a few attorney colleagues tell me that the ruling in Perfect 10 is hardly the final word.  And many of them think the 9th Circuit erred.  But if that court’s “plain reading” of the statute holds sway in future rulings, then it may be necessary to clarify any pre-digital-age, statutory vagueness pertaining to the right make works available.

In 2016, the U.S. Copyright Office issued guidance on the Making Available Right apropos U.S. obligation to WIPO Internet Treaties. Although the Office recommended that legislative amendment was not needed vis-a-vis the treaties, the Register did recognize various inconsistencies in court rulings where cyberspace meets the rights of distribution, public performance, and public display.  In this regard, the Office provided a few possible avenues Congress could pursue to clarify these three exclusive rights relative to the internet, but also warned against approaches that would “represent a sweeping reconfiguration of U.S. copyright law.”

In particular, the guidelines state, “Should Congress … wish to clarify that the public performance and display rights cover offers to communicate a work, it could consider amending the Transmit Clause (§101) to provide that offering to transmit or otherwise communicate a performance or display to the public satisfies the definition of performing or displaying a work ‘publicly.’”  [Emphasis added]

A statutory change like this would confirm that the display right may be infringed by a party that makes a work publicly viewable, even without hosting a copy of the work.  This would correspond with common sense and the practical realities of the digital market, though many attorneys are likely to view such an amendment as unnecessary. Displaying an image on your site, no matter how it got there, ought to implicate the display right.

With pending proposals to create a small claims process for copyright infringement, it will be important to see what the courts do in cases like Goldman v. Breitbart.  This is because visual works are by far the most frequently and casually infringed works on the internet, and visual artists like photographers theoretically have much to gain from both a small-claims process and restoration of a meaningful display right.

Yes, any change in the status quo made by either the courts or Congress would make Google et al go ballistic; and the EFF would have to sit shiva for a year.  But it is well past time to drop the whole “copyright stifles everything” rhetoric along with all the other tech-utopian nonsense that nobody seems to be buying anymore.  It is time to recognize that technicalities like the “server test” stifle authors and creators without whom this whole internet thing would be utterly useless.

**CORRECTION:  Playboy was indeed suing Boing Boing at the time of this post but not for exactly the same conduct.  See post here.

The Internet is Not a VCR

That may seem obvious, but if you’re an internet service provider who fails to uphold your end of the DMCA bargain, you’d sure like the courts to think of your service as analogous to the VCR. Certainly, this is fundamental to the appeal filed in the case of BMG v. Cox Communications, for which oral arguments were heard at the 4th Circuit on October 25.

In December of 2015, a jury awarded BMG $25 million in damages after finding Cox guilty of contributory copyright infringement committed by its customers. As a result of evidence demonstrating that Cox had taken affirmative action to avoid implementing a repeat-infringer policy,* the ISP was deemed to have nullified its “safe harbor” under the DMCA, which broadly protects ISPs against liability for copyright infringements committed by their users. Counsel for Cox has argued on appeal that had the jury been instructed to apply what’s known as the Sony-Betamax standard, the outcome might have been different.

Cox asserts that it cannot be held liable for contributory infringement for the same reasons that Sony Corp could not be held liable in 1984 when it was sued by Universal Studios for the production and sale of the Betamax video tape recorder. Specifically, Cox relies on the Supreme Court holding that because the Betamax could be used for “substantial non-infringing purposes,” Sony could not be held liable for contributory infringement even though the company knew that some customers would inevitably use its product to infringe.

Needless to say, internet access is used substantially for non-infringing purposes by millions of consumers, but that’s more or less where the comparison between the Betamax and an ISP ends. Cox is not the first internet service to try to make the Sony argument, and for good reason: because if it worked, no online service provider could ever be held liable for contributory copyright infringement. What’s funny about this, however, is that it was the ISPs themselves (ATT, Verizon, et al) who in the 1990s fought for the liability shield provisions in the DMCA that are at issue in this case. In other words, by Cox’s logic, those ISPs negotiated a statutory “safe harbor” provision against a liability that allegedly did not exist based on a Supreme Court decision in 1984.

The Sony Standard Has Already Been Defined

Unfortunately for Cox, the Supreme Court has largely answered the interpretation of Sony that they hope to apply in their defense. In MGM Studios v. Grokster (2005), the Court, for instance, clarified that the Sony standard does not preclude consideration of any evidence that may indicate knowledge of, or intent to induce or facilitate, infringement—even if the defendant’s product or service may be used for substantially non-infringing purposes.

In other words, the whole “non-infringing use” thing is not a blanket defense. In Sony, the knowledge of infringement was generalized (i.e. somebody somewhere would use VTRs to infringe); whereas in Grokster and other internet-based circumstances, the knowledge can be both specific and actively ignored or facilitated by the service provider. Hence, an important distinction in the Betamax ruling, which does not apply to ISPs, was that Sony’s relationship with its users ended with the purchase of the video recorder. Sony had no way of knowing, controlling, or influencing the infringing or non-infringing uses made by those customers, and so could not reasonably be held liable for contributory infringement.

But an ISP is exactly the opposite. The relationship with customers is continuous and interactive such that the ISP can know precisely how its service is being used by each individual. Were this not the case, the compromise proposals in the DMCA, which include a provision that ISPs maintain a policy for addressing repeat infringers, would not exist. And I repeat, these provisions were largely proposed by the ISPs themselves.

During oral arguments at the 4th Circuit, Judges Wynn and Shedd did grill BMG counsel rather strenuously on the subject of what defines a “repeat infringer.” In truth, this is a flaw with the DMCA, which actually fails to define a number of its terms, and these ambiguities  have inadvertently resulted in both ISPs and edge providers straining the intent of the law. A major reason for the lack of clarity in the statutes is that, constituent to the passage of the DMCA, Congress ordered both the ISPs and the rights holders to collaborate in good faith to develop technical solutions to mass infringement. That was a year before Napster provided a road map for just how lucrative third-party infringement could be for a platform that learned to exploit the imperfections of the DMCA. Enter YouTube.

As a matter of plain common sense, it ought to be clear to anyone without the slightest knowledge of copyright law that the internet is not a VCR. The Betamax and its subsequent VHS followers were devices with very limited applications, whether infringing or not. By contrast, nearly everyone uses the internet all day long for everything from checking the weather, conducting business, grocery shopping, streaming the news, and talking with friends and family.

Some have argued that our universal dependence on the internet means that nobody should ever be denied service for any reason, including repeat copyright infiringement. This is technically a separate debate which has been attached to the Cox/BMG case and asserted in other contexts by the EFF and similar “digital rights” organizations. Personally, I would argue that, at least in terms of of the DMCA and BMG’s claim, that the omnipresence of the internet only serves to vitiate Cox’s appeal to the very narrow Sony-Betamax standard, which was predicated on the very narrow purpose of that particular technology.

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* §512(i) of the 1998 Digital Millennium Copyright Act (DMCA) requires that ISPs implement policies to address repeat infringement, including account termination in reasonable circumstances.