Clinton equivocates so Masnick obfuscates.

Last week, Hillary Clinton released her Initiative on Technology and Innovation, brief, which reads a bit like a missive from the Internet Association and does very little to clarify her own views—possibly because she doesn’t have any—on the role of copyright in the digital age.  My general criticism of the whole brief is that it seems to view “technology” as an end rather than a means—still talking about access as its own reward, even in a time when Clinton’s opponent is as much proof as we should ever need that access alone does not necessarily foster a new enlightenment.

That Clinton’s statements are vague is the one criticism I share with Mike Masnick at Techdirt. Of course, what I hear in her rhetoric is that she’s been tippling at the Silicon Valley Kool-Aid, while Masnick seems to feel she hasn’t had quite enough. And that’s fine. We have divergent agendas.  But the substance of Masnick’s rebuttal on the subject of incentives does not accurately reflect the debate from either side, in my opinion.

Clinton’s statement contains the following:

The federal government should modernize the copyright system through reforms that facilitate access to out-of-print and orphan works, while protecting the innovation incentives in the system.  It should also promote open-licensing arrangements for copyrighted material supported by federal grant funding.

And Masnick rebuts …

What are the “innovation incentives in the system” right now? Well, on that, people totally disagree. Some people think that fair use, user rights and DMCA safe harbors are the innovation incentives in the system. Others, of course, argue it’s long copyright terms and insane statutory damages. These two groups disagree and the Clinton platform offers no further enlightenment. 

I’m sure his statement resonates inside Techdirt’s echo chamber, but portraying “long copyright terms and insane statutory damages” as core incentives for rights holders specifically oversimplifies both of these topics and it generally misrepresents creators and their motivations.

“…long copyright terms…”

Yes, the copyright term is part of the incentive rationale, but the actual duration of terms is influenced by various interrelated and dynamic factors—both philosophical and utilitarian—that consider market conditions and, yes, a discussion as to what seems appropriate to grant an author, which has generally extended to two generations of his/her heirs.  Presumably, there is an ideal threshold for terms—too short and incentive may be diminished for various types of works; too long and copyright’s purpose to promote progress may be defeated—but the sweet spot can only be theorized based on a holistic view of the contemporary, global market for the range of protectable works. To boil all that down to say that rights holders think long terms provide an incentive to create and distribute is no more nuanced than Hillary Clinton’s equivocal statement on the matter.

“…insane statutory damages…”

While it’s true that there is no reason to rely on a law that cannot be enforced, Masnick’s reference to “insane statutory damages” is stretching this tautology a bit thin in order suggest that rights holders view the prospect of litigation awards as an incentive to create in the first place. Statutory damages are set, in part, because the burden for a plaintiff to prove “actual damages” is quite steep. And because federal litigation is very expensive, hiring an attorney to represent a claim in which statutory damages may not be awarded can be extremely difficult for many rights holders.

Masnick also glosses over several details with regard to awards, including the fact that a lot of cases settle without awards anywhere near the statutory limits; that many copyright advocates currently support the creation of a copyright small claims court; and that statutory damages only apply in cases in which the works are registered with the Copyright Office. This last point is particularly relevant since Masnick seems eager to end the automatic copyright formalized in the 1976 act when he cites Clinton’s reference to “orphan works” and writes, “the only real solution to the orphan works problem is to go back to … requiring registration to get a copyright.”  But as a practical reality, when it comes to litigation and statutory damages, copyright registration is required, so the real pen-and-paper debate is not exactly defined by the lines Masnick is drawing with his oversized crayons.

“…fair use…”

As for the opposing view on incentives, it’s odd for Masnick to invoke fair use and DMCA safe harbors* when neither subject means anything without an enforceable regime of copyright in the first place. For example, to call fair use an incentive is preposterous absent an enforceably copyrighted work that is being used, so it cannot accurately sit on the opposite side of an imaginary line supposedly contrasting different incentives.  Fair use is a possible consideration, but most of the time, most creators don’t even think about copyright when they begin to author their own expressions.  This is because the idea/expression distinction in the law already has them well covered nearly all of the time—a principle codified into federal copyright law 136 years ago relative to the decade since Web 2.0 supposedly stirred up all this fair use controversy for all manner of creators.

“…DMCA safe harbors…”

I assume Masnick is not saying that the DMCA liability shield (safe harbor) for OSPs directly incentivizes creators.  Presumably, he’s saying that the safe harbor is necessary to provide a foundation to incentivize the blogger or YouTuber to create new works via these platforms, but that’s a pretty big logical leap.  As with the fair use fallacy, this view assumes that infringement is integral to expression and the incentive to express.  Additionally, the safe harbor shield doesn’t technically protect the user/creator at all. As noted in my recent post about Lewis Bond, this conflating of the OSP’s interests with the user’s interests is part of what I think gets some creators into legal hot water.  While, it is true that platforms like YouTube foster new forms of expression (e.g. mashups) that ask new questions about copyright’s boundaries and exceptions, it is misleading to highlight safe harbor as an incentive for those who make these expressions, especially when the liability shield clearly provides an incentive for OSPs to turn a blind eye to obvious infringements.

In my experience the most consistent incentive I’ve encountered among creators I’ve known, or known about, is that copyright inextricably links a given expression to its author.  This is not only a significant motivation for creators—one that often transcends money—but it is also a distinction that benefits society most by preserving the relevance of context—a value Web 2.0 seems well-suited to destroy with alarming frequency.

As for candidate Clinton, Masnick and I clearly want to hear different specifics from her as she progresses toward the White House (I hope).  Based on the choice of rhetoric in the brief, though, I do suspect the internet industry had a hand in its writing.  In particular, the arbitrary reference to “orphan works” is bizarre—as though this arcane bit of copyright flotsam represents some untapped cultural or economic potential for America.  Overall, between the brief and Masnick’s comments, it seems we’re in stuck in the meta-debate about what the debate is about.

*I’m ignoring user rights because it’s too vague and too broad.

Strange Rulings at the Second Circuit

Copyright split 2The Second Circuit Court of Appeals handed down opinions on June 16th with two important implications—one that looks like legislating from the bench by ignoring Section 301(c) of the Copyright Act and another that appears to create a split with the Ninth Circuit over interpretation of what’s called “red flag” knowledge referring to § 512(c) of the DMCA.

The case Capital Records v Vimeo involves the alleged infringement of pre-1972 sound recordings that were uploaded to the platform in a manner likely to be infringing. With the passage of the 1976 Copyright Act, sound recordings that were fixed prior to February 15, 1972 remained under the protection of the state copyright laws in which the works were registered.  And as Stephen Carlisle at Nova Southeastern University points out in his in-depth analysis of the circuit court ruling, these pre-1972 recordings have never been covered by federal law, but this court just ruled that they are covered by the provisions in the DMCA (which is of course federal law), which means that Vimeo is therefore eligible for the safe harbor shield in regard to alleged infringement of these recordings.

The EFF and other proponents of the ruling have stated that the court applied common sense on the grounds that the intent of Congress with the DMCA could not have been to “leave service providers subject to liability under state laws.”  It is certainly true that a ruling in the other direction would have major implications for a site like YouTube, which could face numerous litigations under state copyright laws or would have to figure out how to keep all the possibly-infringing, pre-1972 music off its platform.  While this would arguably not be consistent with the intent of DMCA, is this fact alone reason for the appeals court to ignore the federal copyright law statute as it stands?

Keeping in mind that it was also not the intent of Congress that the DMCA would shield the volume of infringements that occur today, Carlisle’s main point is that Section 301 of the Copyright Act is explicit on the copyright status of these recordings and so writes, “Section 512 [of the DMCA] takes away my right to sue a service provider from infringing my pre-1972 sound recordings. This limits my remedies under state law. Unless Congress is going to amend 301 [of the Copyright Act] to provide for an exception for ‘safe harbor’ it cannot act in the way that this Court has just ruled that it did.”  In short, this ruling strips owners of pre-1972 recordings of the ability to enforce their rights under state law even though Congress has not yet folded them into protection of federal law—a proposal that is currently being considered.

The other important opinion in this case, according to Devlin Hartline at the Center for the Protection of Intellectual Property, is that it creates a split with the Ninth Circuit on the issue of what’s called “red flag” knowledge of infringement by the defendant OSP. One of the conditions an OSP must meet in order to retain safe harbor is to “expeditiously” remove infringing material once the provider has “actual knowledge” of an infringement or once the provider becomes “aware of facts or circumstances from which infringing activity is apparent.”  This second part of the statute is generally referred to as “red flag” knowledge, and it is just vague enough to be the basis of an ongoing tug-o-war between rights holders and service providers.  For instance, common sense would dictate that any reasonable person working at Vimeo and monitoring the platform would know that a lot of popular and famous music was not licensed to the individuals uploading it.  And that’s essentially what Capitol Records argued.  But the court disagreed.

The Second Circuit opinion held that Capitol had not presented sufficient evidence to find that the defendant had “red flag” knowledge, stating the following:

[A] showing by plaintiffs of no more than that some employee of Vimeo had some contact with a user-posted video that played all, or nearly all, of a recognizable song is not sufficient to satisfy plaintiffs’ burden of proof that Vimeo forfeited the safe harbor by reason of red flag knowledge with respect to that video.

But Hartline’s point is that the Second Circuit is applying a different standard to “red flag” knowledge than the one imposed by the Ninth Circuit and that the two courts are now split on two separate issues in this regard.  The first opinion is whether or not “red flag” knowledge has to pertain to the works-in-suit.  The Ninth says No; the Second says Yes.  The other opinion is whether or not employees at an OSP can have “red flag” knowledge without having either industry or legal expertise.  The Ninth says Yes; the Second says No.

In other words, the Ninth Circuit court has held that employees of an OSP, by seeing that numerous, famous titles are being uploaded, can intuit that infringement is probably happening, while the Second Circuit disagrees that this is sufficient.  Then, the Ninth Circuit holds that “red flag” knowledge of any infringement not “expeditiously removed” by the OSP is sufficient to void safe harbor protection, while the Second Circuit holds that only knowledge of the works-in-suit may be considered in this regard.  Hartline speculates that this split could result in the Supreme Court taking up the matter, for better or worse.

I have to say that it could not have been the intent of Congress that OSP employees should need to have industry and/or legal expertise in order to at least suspect that infringement is likely occurring on a web platform.  My nine-year-old is used to asking if stuff is legal on the web; it’s not a concept that requires a law degree or even high-school civics.  We’re taught as just regular folks that “ignorance of the law is no excuse,” and the Second Circuit’s opinion in this case seems to run afoul of this common-sense application—suggesting that a professional who works at a place like Vimeo can’t make an educated guess that UserDude8394 probably did not license that Beatles song he uploaded.

In another twist on this story, there are ten videos in contention for which Vimeo may be liable because these were made by employees themselves. The brief filed by Capitol in NY District Court in January of 2013 states the following:

“Vimeo admits that ten of the infringing videos on the schedules to the complaints in this action reside in the accounts of Vimeo employees, accessible from the user page of the Vimeo employee who uploaded them.  Almost all bore a flag (or “badge”) or other indication designating them as having been made by Vimeo employees.”

Because safe harbors apply only to videos uploaded at the direction of users, these ten videos were not considered in the appeal by Second Circuit Court.  It is odd, of course, to consider that Vimeo employees could directly infringe famous musical works while the court assumes innocent blindness regarding infringement on Vimeo’s platform.  As of March 2013, the Community Development Director at Vimeo states on Quora that “we’re quickly approaching 100 employees.” So, how much of a small workforce has to directly and consciously infringe for the courts to consider that veil of ignorance is unlikely?  Stay tuned. We may find out.

Hypocrisy is as hypocrisy does in copyright fight.

I recognize that it’s vogue to malign the interests of copyright holders, particularly when various pundits recount anecdotes of sympathetic-sounding new creators who find themselves as defendants in a litigation. Recently, Andy at TorrentFreak published a lamentation on the excess and “hypocrisy” of copyright enforcement in the case of Serendip v Lewis Bond.

Mr. Bond, a UK citizen who distributes videos to his monetized YouTube channel called Channel Criswell, posted his 20-minute documentary composed almost entirely of film clips from the works of Stanley Kubrick along with his own narrated commentary. The use of the clips may arguably be a fair use—I admit to scanning the doc and not watching the whole thing—but Bond also synched several music tracks from A Clockwork Orange to his film, and he is now being sued for copyright infringement by Serendip LLC, which owns and manages the rights to the works of composer Wendy Carlos.

Calling it a “Sad Hypocrisy” Andy wants to present a tale in which a budding and talented young filmmaker (Bond is 23) is being unfairly and needlessly squashed by an older artist, who should respect that Bond is simply building upon works the way Carlos built upon the works of others. Andy opines that there is a path other than the courts to a happy place where artists collaborate instead of litigate, which sounds sweet but is entirely missing the point. To emphasize his perspective, Andy makes such a hash of copyright law in general, and the facts of this case in particular, that the only clear hypocrite in the mix is him. After all, it is hypocrisy to believe so firmly in a position on a given topic that one makes no effort to examine the facts of an individual story before adding it to the anthology of “evidence” for that point of view.

To begin, Andy relies on a typical assumption that he knows anything about Carlos’s financial interest in her works and that her current income is in any way relevant to enforcing her rights. He states, “While undoubtedly a wonderful and timeless piece of music, is a track from 1971 really bringing in the money for Clockwork Orange [sic] composer Wendy Carlos today? Has Bond’s fleeting reproduction of a part of this track in his documentary caused real financial damage?”

Here, Andy makes two critical errors. The first is that enforcing IP rights isn’t always about financial damage from the use being litigated. It’s about precedent. One either protects IP or one does not. And if a rights holder lets some infringements go on the grounds that “they weren’t all that harmful,” this can weaken his/her ability to enforce those rights in future cases. The second mistake is that Andy’s assumption of value in this case is apparently wrong. The brief filed by Serendip states that of all of Carlos’s works, the tracks she created for A Clockwork Orange are the ones most in demand and most often licensed for substantial fees. This means that, yes, Bond’s use, if left unenforced, does directly threaten the business in which Serendip manages those rights for Carlos’s works. How much or little she currently earns from this enterprise is nobody’s damn business and also irrelevant to the need for consistency in enforcement.

Andy’s next error—and it’s a whopper—is to go off on a whimsical tangent calling Carlos a “hypocrite” because one of the works in question is not her composition but that of Henry Purcell, who died in 1695. Although Andy seems to think he’s zapped Carlos with a real gotcha here, he fails to acknowledge that master recordings are separately copyrightable regardless of who the original composer is, and that uses of music exactly like those made by Bond — as atmospheric elements synched to a film — require both a synch and a master use license. The underlying composition is either separately copyrightable or in the public domain, as is the case here. Andy describes the music thus: “It is an abridged version of this [Purcell’s] music that forms the entire basis of Carlos’ 1971 work. Arrangement and beautiful synthesizer work aside, it’s virtually identical.”

Nope. It’s just identical. Because if one simply looks at the playlist for the film’s soundtrack, we see that the “Title Music from A Clockwork Orange” is attributed to Purcell’s March for the ‘Funeral of Queen Mary.’ Carlos doesn’t claim authorship of the underlying composition and has no reason to do so. But, as mentioned, this has nothing to do with a litigation over copyright infringement of her master recordings, of which three are named in this lawsuit — all of them based on classical compositions, with the other two by Rossini and Beethoven. Andy wants to propose that Lewis Bond is building upon Carlos’s work the way Carlos built upon the works of these other composers, but this is neither true creatively nor legally from any real-world analysis of Bond’s use.

As to the matter of Bond as a victim of copyright, I clearly cannot say whether he is being defiantly foolhardy or innocently naive in this case, but the Serendip brief does state that after they issued a takedown notice through DMCA, Bond “immediately” filed a counter-notice. Now, I’ve learned a few things about copyright over the last four years, but there is no way in hell I would take a potentially $450,000 gamble that my own fair use analysis would be so solid that I’d go filing a counter-notice in a similar circumstance — at least not without consulting an attorney. And in this particular instance, I cannot see an argument that remotely favors a finding of fair use. Bond used these tracks in the most typical manner music is used for film — as accompaniment — and this use is always licensed. If Bond were attempting to distribute his film anywhere but YouTube, he would have to demonstrate that he had all such relevant license agreements in place.

It’s not that I don’t have any sympathy for Lewis Bond—at least in theory—but stories like this raise two broader issues in my mind. The first is that new creators, who want to take the authorship of their works seriously have just as much obligation to consider copyright as the creators who came before them. Wendy Carlos didn’t build her career without ever considering the copyright implications of her choices, and those who want to use or build upon her works have the same responsibility. Just because a contemporary new creator is a creature of the digital age, this calculus shouldn’t change, though many seem to think it should.

Having said that, if Bond and his contemporaries are victims at all, I would argue that they are harmed by editorials like this one by Andy at TorrentFreak. The pundits and corporate leaders who have so consistently misrepresented facts about the law and pushed a message of “infringe now, deal with it later” are doing a disservice to the next generation of artists by fostering bad intel on complex matters like fair use. As such, if these interests really cared about artists, they might back off the rhetoric a bit because new creators like Bond simply cannot afford the hubris of tech-industry billionaires.

Thanks to regular reader John Warr for bringing this story to my attention.