Category: Intellectual Property

NYS Assembly Led Down the Primrose Path on eBooks Again

NYS Assembly

In December 2021, New York Governor Hochul recognized that she must veto a bill that would have prescribed the manner in which publishers may provide eBooks to public libraries. It isn’t necessary to rehash the details of that legislation—I wrote several posts about eBook bills—but only to restate the reason for the veto:  the law was unconstitutional. Why? Because state laws proposing to dictate terms for making in-copyright works available, even for libraries, is preempted by federal law.

Nevertheless, Assemblyman Angelo Santabarbara has introduced a new bill (A10544) that, although its mechanisms are different from the 2021 bill, is still unconstitutional. In fact, the operative part of the bill which, for instance, prohibits digital rights management (DRM) technology, would have the effect that a library is free to make eBooks available in any manner it sees fit and without limits of any kind. This plainly violates the Copyright Act. Even if the purpose of the proposal were well-founded in service to the public—and it is not—the states are simply not permitted to pass their own laws governing the terms under which copyright owners may distribute works to the market.

In addition to Gov. Hochul’s clear-eyed veto in 2021, related eBook bills have been proposed, litigated, and shot down in several states, begging the question as to why lawmakers seem determined to die on this meaningless hill. As discuss in this post examining the mid-sized library system serving my region in New York, there is no evidence suggesting that the public is underserved or that the current licensing regimes are so onerous as to harm the operation of libraries. Frankly, even if licensing were onerous, these laws would still be unconstitutional, but the combination of federal preemption and pointlessness does make one wonder–but not really.

These eBook bills are all variations on the same thematic effort by the same lobbying groups seeking to push an anti-copyright agenda using the Trojan Horse of the public library. Copyright antagonists couldn’t prove DRM, governed under DMCA Section 1201, was unconstitutional, so they try chipping away at the principle through state legislatures, masked beneath the white hats of institutions we all love. And indeed, because I do love libraries, I continue to hope that they will stop running interference for organizations that have neither libraries’ nor readers’ nor certainly authors’ best interests at heart. If nothing else, continuing to introduce bills that run afoul of Article I Section 8 is a waste of everybody’s time.

Photo by: vasiliybudarin

Site-blocking: can the U.S. finally get it done?

site-blocking

The Motion Picture Association (MPA) has prefaced a renewed interest in site-blocking legislation to combat piracy. Will things be different this time?

When the internet industry killed the antipiracy bills SOPA and PIPA in January 2012, I was a newbie blogger but guessed at the time that those parties had totally blown their wad on that campaign. First, there was the boy-who-cried-wolf limitation suggesting that Google & Co. had deployed too much hyperbole to ever again sound the “death of the internet” alarm. Next, the general belief that “the internet” is inherently a force for good was a notion that waned perceptibly after 2012 and then fell off the cliff circa 2016. Today, neither the general public, the government, nor the press fawns over the “white knights” of Silicon Valley as they did when those bills were scuttled.

None of that addresses the fact that the “Stop SOPA” campaign was a tidal wave of disinformation, but it would be naive to think that facts would win today any more than they did twelve years ago. When new site-blocking proposals begin to make headlines, and the network of tech-funded groups howl BEWARE SOPA 2!!, it will be interesting to see whether the same, or similar, false talking points are effective in an environment that is more skeptical of Big Tech in general.

What is site-blocking and why do It?

Site-blocking today would probably work much as it was intended back in 2011. A complainant would have the burden to prove to a court that a platform is principally engaged in illegal activity (e.g., media piracy) and is operating outside the reach of U.S. law enforcement. With sufficient evidence, the complaining party(ies) would obtain an injunction to deny the platform access to the U.S. market. The basic mechanisms are not much more complicated than that, though we can expect the same network of “digital rights” groups to sharpen the rhetorical pitchforks and again stoke allegations that this process will “break” the internet or that it violates the speech right.

Of course, neither claim is true. Site-blocking is employed as a remedy throughout the democratic world where the internet still functions, and speech rights are not infringed (at least not because of site-blocking). There is no more a speech implication to blocking a criminal web platform from access to the U.S. than there would be by interdicting a cargo ship full of counterfeit electronics. On that subject, the need for site-blocking legislation today is more urgent than it was in 2011, and not just for movies and music.

Although the MPA et al. will naturally focus on sites illegally hosting and/or streaming pirated entertainment, establishing a broader rationale for site-blocking—i.e., getting past unfounded ideological opposition—will serve other business and private interests. Online predators of every type have continued to adapt since 2012; evidence shows that media piracy is integrated with a broad spectrum of cybercrime; and the U.S. lags behind the EU et al. in adopting this basic mechanism of protection.

For instance, small-business owners making creative products sold on eCommerce platforms lack the resources to combat, or the margins to absorb, the pace of counterfeiting by foreign actors. Advancements in small-batch production methods and drop-shipping offer new flexibility for counterfeiters to flood the U.S. market with cheap knockoffs, harming both legitimate producers and consumers. Meanwhile, media pirate sites are delivery platforms for malware used for cyber extortion (including sextortion), identity theft, and direct theft of private and sensitive material from personal and business networks.

So, although the MPA will likely be the most prominent advocate of site-blocking legislation, there are many disparate parties—from small-business owners to advocates fighting online sexual abuse—who may see the value in the U.S. finally adopting a remedy the EU et al. have had in place for a decade or more.

An Interesting Moment

In 2011, it was easy to spread the message that site-blocking was only about “Hollywood” protecting its wealth to the detriment of speech on the internet. It wasn’t true then, of course, but it will be interesting to see whether some form of the same rhetoric will gain traction in the coming years. Specifically, a whole generation has grown to young adulthood since then—kids who never heard the proverbial boy cry wolf the first time. Notably, Torrentfreak reports that GenZ exhibits a high rate of pirate site access, citing familiar rationales that streaming subscriptions are too expensive and/or that interest in one title militates against subscribing to the necessary channel.

But what will really be interesting to watch over the next few months will be GenZ’s susceptibility (or not) to the “Save TikTok” campaign already underway. On April 24, President Biden signed a solidly bipartisan law stating that TikTok will be banned in the U.S. unless, within nine months, owner Bytedance sells the platform and, thereby, severs all ties to the Chinese Communist Party (CCP). Bytedance, in addition to vowing it will fight the law in U.S. courts, has already launched a PR campaign, including social media messages that will tap into the same emotional triggers used during the “Stop SOPA” campaign.

As Google & Co. did in 2011/12, Bytedance will use its addictive interface to promote the message that its business interests are synonymous with their users’ rights, only this time, the rhetoric isn’t coming from Big Tech filtered through the Electronic Frontier Foundation—it’s a psyop of the CCP. The efficacy of the “Save TikTok” campaign will be telling, not only about the viability of site-blocking legislation, but about the hoped-for savvy that “digital natives” might reveal about navigating the perils of cyberspace.

In 2011, it was frightening to watch the platforms use the insidious power of the platforms to advocate the policy interests of the platforms. Now, that same playbook is being run by a foreign adversary targeting 170 million 18-29-year-olds, and it is an anxious moment, to say the least, waiting to see how they respond. Regardless, the underlying rationale for site-blocking is sound, and I hope that both copyright and non-copyright interests see it as a necessary protection of American enterprise and security.

Photo by: tommoh29

Decoder podcast: AI could go extinct because fair use is whimsical

AI extinction

It was hard not to dismiss the headline posted by The Verge:  How AI copyright lawsuits could make the whole industry go extinct. The article summarizes a new Decoder podcast hosted by Nilay Patel, joined by Sarah Jeong to discuss the copyright lawsuits filed against generative AI developers. Most of the program is devoted to a discussion of fair use, which is reasonable because that’s likely how these cases will be decided. It’s clear that Patel and Jeong view copyright as a barrier to technological innovation, but when people trained in the law misrepresent the law as purely whimsical, it is counterproductive to the conversation.

I could critique nearly every segment in the podcast, but as that would be both long and tedious, I selected a few highlights for this post. Setting the more-hip-than-helpful tone of the program, Patel (who went to law school) describes fair use as a “vibes based” doctrine. Jeong (also law school) echoes the sentiment when she says that litigation against generative AI has “Napster vibes to it,” teeing up her thesis statement: “When Napster happened to the law, companies went bust; entire industries went bust; copyright changed forever in a way that was not great; it was an extinction level event; and AI has a similar thing going on there.” Here, Patel summarizes that Napster went to the Supreme Court—it did not—and that the Court “made some changes to copyright law.” Seriously? “Made some changes” is not how people with legal training talk about court rulings, even when they disagree with the outcome.

The next comment that caught my attention was Patel saying that “fair use is not deterministic” as a doctrine. He’s right, but in context, the listener will take him to mean that fair use is unpredictable to the point of capriciousness. Although a good attorney will demur to predict the outcome of any case, a thoughtful copyright expert is unlikely to agree that fair use findings are a “coin toss,” as Patel puts it. In fact, the choice of the word deterministic provokes the rebuttal that anticipating a fair use outcome is more accurately described as probabilistic, which is funny because that’s also how generative AI works.

If a defendant asks an attorney to handicap the likelihood of prevailing on fair use, the attorney’s response should be a reasonable prediction based on how closely the facts of the present case resemble fair use findings in the circuit of jurisdiction. Although Patel alludes to this analysis, he overlooks the fact that counsel could describe a probability outcome, which is precisely how a generative AI produces its outputs. If one prompts a visual AI to generate an image of a dolphin drinking a Slurpee, the output is the machine saying, “Based on the available data, this image is probably a dolphin drinking a Slurpee.” So, of all defendants, AI developers should grasp the nature of fair use case law.

Jeong echoes the idea that fair use considerations are erratic by alleging that the “Court changed copyright law after Napster,” referring to the Ninth Circuit’s 2001 finding that the P2P music filesharing platform was not shielded by fair use. Here, she argues that the Supreme Court’s fair use finding in the Sony “Betamax” case (1984) expressed a philosophical adaptation of copyright law to foster new technology but that this general view was reversed when the Ninth Circuit decided against Napster—and then when the Supreme Court ruled in 2005 that the filesharing platform Grokster could be liable for copyright infringement.

Although one cannot reasonably argue that ideology never skews the courts, Jeong elides the many factual and legal distinctions between the VCR and filesharing platforms and, by extension, the distinctions between those technologies and generative AI. Her declaration that “copyright was changed” after Napster and Grokster is unfounded, as the Court itself notes that Grokster was its second case considering contributory liability for copyright infringement—Sony being the first. Two cases, twenty-one years apart, addressing the same legal question presented by substantially different technologies is not a basis for claiming that the law was “changed forever” by the outcome in the latter case.

Holding the opinion that copyright stifles technological innovation does not excuse misrepresenting the courts as rolling dice to rule on fair use. For instance, in Grokster, the Court directly addresses the balance between copyright and technological innovation thus:

The more artistic protection is favored, the more technological innovation may be discouraged; the administration of copyright law is an exercise in managing the trade-off….The tension between the two values is the subject of this case, with its claim that digital distribution of copyrighted material threatens copyright holders as never before, because every copy is identical to the original, copying is easy, and many people (especially the young) use filesharing software to download copyrighted works.

Does that describe the technological function of the VCR? For those who’ve never used a VCR, the answer is No. The home video tape recorder, a relic of pre-internet life, functioned nothing like a filesharing platform, which facilitates mass copyright infringement on a global scale. Fair use is a fact-intensive inquiry, and “technology” is not a monolith. The leap from the VCR to generative AI is roughly the distance between the telegraph and the iPhone, and it is unhelpful, even irresponsible, to obscure so much factual detail behind a conversation about the courts’ alleged randomness on copyright and fair use.

Everything cited above was expressed in the first 5-6 minutes of the podcast. Tempted not to listen any further, I winced as both Patel and Jeong proceeded to make some astonishing remarks about the four-factor fair use test in regard to generative AI. Again, a couple of highlights stand out.

On factor two, nature of the work used, Patel says, “Factor two is whatever the judge thinks it is.” Then, a few seconds later, he says, “If the judge decides they don’t like the New York Times that day…” this will determine whether factor two tilts in the Times’s favor. NYT v. Open AI is before the Southern District of New York in the Second Circuit, which holds the largest trove of copyright case law of any circuit in the country—including several major fair use cases. If Patel or Jeong want to handicap the court’s findings based on that case law and then offer their own views of what they think is right, fine. But the implication that the court is just going to wing it is ridiculous.

Jeong does not push back on Patel’s coin-toss implication but says the “dial is in the middle” on factor two, which she reasonably (if not very clearly) argues because the Times contains both protectable expression and unprotectable factual material. But then comes the biggest spit-take in the program, when Jeong predicts that factor four, potential market harm to the work used, weighs against the AI developers because of the Supreme Court decision in Warhol. She states, “We have not seen that heavy an emphasis on factor four before.” Notwithstanding the fact that prior to the Campbell decision (1994), many experts would say that factor four was the most determinative factor in fair use jurisprudence, Warhol was unequivocally NOT a factor four case. As the opinion states:

In this Court, the sole question presented is whether the first fair use factor, “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes,” §107(1), weighs in favor of AWF’s recent commercial licensing to Condé Nast. [emphasis added]

From her comments about Warhol, Jeong confuses the question of “substitutional purpose” with the question of “market harm substitution,” which are weighed under factors one and four respectively. It is true that where the court finds substitutional purpose, market harm substitution is more likely to be found, but as the opinion explains the distinction in one footnote in Warhol:  While the first factor considers whether and to what extent an original work and secondary use have substitutable purposes, the fourth factor focuses on actual or potential market substitution. They are two separate, albeit interdependent, questions. I do not know whence Jeong gets the idea that Warhol was a factor four case, let alone an unprecedented outcome in its emphasis of that factor.

Fair Use is a Fact-Intensive Inquiry

Generalizations like those articulated in the Decoder podcast sidestep the relevant facts about a given technology, what it does in context to legal questions, and why the technology may or may not be socially valuable. “Artificial intelligence” encompasses a wide range of development, some of which is promising, some of which is questionable, and all of which has been identified as potentially dangerous without proper oversight. As for generative AI in the creative industries, if Jeong is right that the copyright lawsuits pose an existential threat to those companies, so what? It is not clear that the world needs machines to make images of dolphins drinking Slurpees.

As discussed in this post, AI developers may have taken a gambler’s approach to fair use, and if their business plan included liability at the scale of mass copyright infringement, that’s a risk they chose to take. If any of those companies fail because of that liability, it will not be the result of whimsically applied or tech-hostile copyright law, or indeed the fault of the creators whose rights are infringed in the process of machine learning. Moreover, it is certainly not incumbent upon creators to abdicate their rights and get out of the way because “innovation” is happening. Fair use considerations in generative AI lawsuits may result in some novel opinions, but if influencers like Patel and Jeong are going to misstate case law and describe the courts as casinos, then one must wonder why they mention their legal credentials in the first place. After all, anyone can flip a coin.