Category: Intellectual Property

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.”

Decision in Seuss/Trek Mashup Case is One for the Books

Last week, the Ninth Circuit Court of Appeals issued a fair use decision in Dr. Seuss Enterprises (DSE) v. ComicMix. After oral arguments were presented in April, I wrote about this case as an example from which creators could learn what not to do when they propose to make substantial use of protected works—especially very famous works. The lawsuit involves an unpublished book called Oh, the Places You’ll Boldly Go (Boldly), a Dr. Seuss/Star Trek mashup that principally uses material from Seuss’s Oh, the Places You’ll Go! (Go!).

The appellate panel held unequivocally that ComicMix’s fair use defense failed on all four factors, and I imagine this opinion will be cited for years to come because the court so clearly inked fresh lines around several fair use principles that many avid copyright critics have endeavored to blur or erase through litigation, academic writing, or public editorial. To summarize, the Ninth Circuit opinion written by Judge McKeown held that Boldly was not a parody under factor one; that because the works copied are expressive, fair use did not favor ComicMix under factor two; that ComicMix’s use of the original works was both quantitatively and qualitatively substantial under factor three; and that Boldly represented significant potential harm to DSE’s market under factor four.

Understanding Parody

In that April post, I suggested a guideline for creators that if one truly intends to parody a work, especially a work that is instantly recognizable, that one need not engage in extensive, verbatim copying to achieve that result. In the case of Boldly, I maintain that the amount of detailed copying, which is weighed under fair use factor three, militates against ComicMix’s claim that the book is a parody at all, which is considered under factor one. As the opinion reminds us, the four factors of the fair use test are interdependent:

[The first] factor has taken on a heightened significance because it influences the lens through which we consider two other fair use factors. The third factor—the amount and substantiality of use—‘will harken back’ to the first factor. And the fourth factor, relating to market harm, is influenced by whether the commercial use was transformative.

Considering the factors in order, the court first held that:

Boldly is not a parody. ComicMix does not seriously contend that Boldly critiques or comments on Go!. Rather it claims Boldly is a parody because it situated the ‘violent, sexual, sophisticated adult entertainment’ of Star Trek ‘in the context of [Dr. Seuss]’ to create a ‘funny’ book. We considered and rejected this very claim in an appeal involving another well-known book by Dr. Seuss—The Cat in the Hat (Cat).

For discussion of that prior Cat case, see Stephen Carlisle’s post, but this clarification by the court in ComicMix cannot be overstated:  copying existing works into novel contexts is not necessarily parody just because it is meant to be funny. And mashup, merely because it changes context, is not inherently parody. Moreover, when one is copying famous works, the user will more likely be seen as attempting to ride the coattails of the prior author’s notoriety, unless a clear element of commentary on the original work, like parody, is present in the new work. But citing the gold standard case on transformative use for the purpose parody, Campbell v. Acuff-Rose, the McKeown opinion reiterates, “Lacking ‘critical bearing on the substance or style of’ Go!, Boldly cannot be characterized as a parody.”

It is reasonable to assume that, if the court had found Boldly to be parodic, its third factor analysis would likely be more liberal regarding the amount of the original works used; but I would argue that the amount used is a fundamental reason why no parody can be said to exist in this particular case. After all, what was actually taken? Not ideas, which are not protectable, and certainly not Seuss’s meter or rhyming schemes, which are also not protectable. The primary expressions that were copied—and stylistically copied in minute detail—were a number of visual works belonging to DSE.

So, even if we were to strip away the verses, ignored intended literary expressions in either book, and exclude any knowledge of Star Trek, an ordinary observer, comparing ComicMix’s illustrations to Seuss’s originals, would not necessarily know that Image B is a parody of Image A.

To the contrary, the observer could very easily assume that Image B is a derivative work prepared by DSE because it painstakingly matches so many elements in Dr. Seuss’s original drawings. And according to the opinion, it was apparently ComicMix’s intention to prepare an unlicensed derivative work that they hoped DSE might acquire, hence at least one reason illustrator Ty Templeton spent so many hours copying Seuss’s drawings in such intricate detail.

Keeping our focus on the fact that what was copied was a collection of visual works, note this response from the opinion: “We also reject as ‘completely unconvincing’ ComicMix’s ‘post-hoc characterization of the work’ as criticizing the theme of banal narcissism in Go!.” It is not uncommon for defendants to concoct a “parody” narrative in response to an infringement claim, and/or to misconstrue, at the time of use, the meaning of “parody” as expression that intends to be funny through the language of a prior work (e.g. none of Randy Rainbow’s anti-Trump songs is a parody of the songs themselves*).

It is the work that has been copied that must be the target of the parody, or other commentary. So, how can a visual work that is meticulously faithful to the original hope to convey parody through the act of too much replication? Something about the subsequent work must cue the observer that a lampoon of the prior work is present. Otherwise, the new work will be considered a derivative work, which only the copyright owner has the right to prepare.

As an example, imagine a drawing of Cindy Lou Who that has borrowed just enough Seussian elements that we recognize her, but she is depicted sneering and giving the Grinch the finger in response to his bullshitting her about the Christmas tree. That image by itself would plausibly be a comment on the original work in the same spirit that “Pretty Woman” was held to parody “Oh, Pretty Woman.” And the parodist would not have to mimic Seuss in every scribble and hue to achieve this result.

The third factor asks whether “the amount and substantiality of the portion used in relation to the copyrighted work as a whole” favors a finding of fair use. And a component of this analysis is whether the defendant used only as much of the original work as was necessary to achieve the desired result. In this case, because the desired result (an alleged parody) was held do disfavor fair use, then, logically, it should not matter very much whether ComicMix quantitatively copied one page of Go! or, as the opinion notes, 60% of the book along with “significant illustrations from Grinch and two stories in Sneeches.”

While that is a substantial quantitative taking, I would maintain that it was the qualitative copying whereby the defendant “replicated, as much and as closely as possible from Go!, the exact composition, the particular arrangements of visual components, and the swatches of well-known illustrations” that should have doomed ComicMix under the third factor test. Again, it is not necessary to mimic the originals so precisely in order to achieve the desired result of parody—if that purpose had been achieved in any sense.

Importantly, this opinion also reminds us that the third prong does not ask how much work was copied relative to the complete works produced by the original author. I’ve seen this one before, often in music infringements, where a defendant argues that he only copied a song or two owned by an artist with a large catalog. Here, the court rejected as a legal fallacy ComicMix’s argument that it only copied portions of five books out of the sixty produced by Dr. Seuss. Reiterating the law for users everywhere, the opinion responds that, “Under ComicMix’s theory, the more prolific the creator, the greater license a copyist would have to copy and imitate the original works. Nothing supports that argument.”

Potential Market Harm

The court’s discussion of the fourth factor also contains several important reiterations of fair use doctrine from which any creator can learn a great deal and reminds us that “potential” is the most important word in this part of the statute. This is because “potential” implies three underlying considerations:

1) what would be the effect of the specific use at issue on the market or value of the original work?

2) what would be the effect if the same kind of use were widespread among multiple parties?

3) although the copyright owner has not exploited the work in the manner at issue, does the new use constitute a derivative work, which the author is not obligated to produce or license?

In consideration of all the above, the court found that Boldly was not a fair use under factor four. As I have tried to emphasize, the amount of verbatim copying done by ComicMix produced an unlicensed derivative work, and the court noted that this placed Boldly in direct conflict with other derivatives of Go!, which DSE has licensed for the market. But perhaps the most important statement by the court regarding factor four is that it soundly rejected ComicMix’s assertion that the plaintiff bears the burden to prove potential market harm.

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.

Not only is that a judicial smackdown of a largely academic theory that fair use is a “right” rather than an affirmative defense, but the court further stings ComicMix’s erroneous citation of the very case that so many copyright skeptics consider a standard bearer of this invalid doctrine. The boondoggle litigation colloquially known as the “Dancing Baby” case, in which the EFF, on behalf of Stephanie Lenz, sued Universal Music Group for wrongful takedown of her YouTube video, is about as close as litigation has come to upending the affirmative defense principle of fair use. But here, the Ninth Circuit, which ruled in Lenz, states:

In an effort to distinguish controlling precedent, ComicMix argues that in Lenz v. Universal Music Corp., we deviated from our precedent construing fair use as an affirmative defense. This view misreads Lenz, which involved fair use in a different corner of copyright law, the safe harbor for Internet service providers under the Digital Millennium Copyright Act (DMCA)….In no way did we deviate from our characterization of fair use as an affirmative defense under §107. To the contrary, in addition to clarifying that, unlike copyright misuse and laches, fair use is not an excuse to copyright infringement, we reiterated that ‘the burden of proving fair use is always on the putative infringer.’

Oh, The Places We Don’t Need to Go

As I say, I predict ComicMix will prove to be an important and instructive case going forward. It should not be misread as “the big guy defeating the little guy” because, in fact, if ComicMix’s legal arguments were supportable, such a ruling would make independent creators of fresh material more vulnerable to substantial takings by large entities. It also should not be understood as a referendum on mashups in general, as the court explicitly stated that mashups can be fair use, just not this one.

In the end, I personally have sympathy for the ComicMix guys, recognizing that they put a lot of work into a project based on some very dubious copyright theory. But especially because the trio of creators who decided create Boldly are all professionals with skills and talent, the underlying lesson remains that it is almost always better to invent than to copy—let alone to copy legendary works as extensively and precisely as was done in this case.

*I cite Randy Rainbow as an example typically misunderstood as parody, and make no comment on the legality of his videos re. copyright.

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.