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Department of Commerce releases report on Copyright Policy

The industries that rely on copyright are today an integral part of the U.S. economy, accounting for millions of jobs and contributing billions of dollars to the G.D.P. Moreover, the creative content they produce contributes to the development of the broader Internet economy, spurring the creation and adoption of innovative distribution technologies. Not only do these industries make important economic contributions, they are at the core of our cultural expression and heritage. It is no exaggeration to say that U.S. music, movies, television shows, computer software, games, writings and works of art have changed the world. Copyright Policy, Creativity, and Innovation in the Digital Economy.

Today, the Department of Commerce Internet Policy Task Force released its anticipated Green Paper, Copyright Policy, Creativity, and Innovation in the Digital Economy. The Internet Policy Task Force (IPTF) is a coalition of Department of Commerce bureaus launched in 2010 “to identify leading public policy and operational challenges in the digital economy.” Along with intellectual property issues, the IPTF has assessed issues relating to consumer data privacy, cybersecurity practices, and the global free flow of information.”

The purpose of the Green Paper is to review the development of copyright policy as it has responded to new technologies in recent decades, assess the current challenges facing copyright law, and provide a set of recommendations to address some of those challenges. The IPTF was aided by the input of a wide range of stakeholders as it drafted the Green Paper, who participated through roundtable discussions, public meetings, and a public commenting process.

Secretary of Commerce Penny Pritzker opens the report noting not only the economic contributions of copyright — accounting for over five million US jobs and a significant percentage of GDP — but also the noneconomic benefits.

America’s writers, musicians, filmmakers, photographers, sculptors and other creators make up the lifeblood of our culture, build new stores of knowledge, and shape how we see ourselves—and how the world sees us as well. Their influence extends beyond our borders; our copyrighted works weave a compelling narrative of the opportunity and possibility of America, and continue to be at the forefront of the global creative marketplace. We must continue to nurture such extraordinary creative resources.

As the IPTF points out in the forward, “Copyright law has always adapted to technological changes,” but the most recent changes — including digital media and the global Internet — have perhaps been the most profound. Meaningful protection requires enforcement of rights, though there is no single solution to those challenges. This is the backdrop that has motivated the report. The IPTF says that “It is time to assess whether the current balance of rights, exceptions and responsibilities — crafted, for the most part, before the rapid advances in computing and networking of the past two decades — is still working for creators, rights holders, service providers, and consumers.”

The IPTF issues a number of recommendations that it divides into three broad categories:

1)“Updating the balance of rights and exceptions.”

  • Congress should “better rationalize the public performance right for sound recordings.” According to the Task Force, this entails extending the right to cover broadcasting and taking the impact on creators and rights holders into account if it reassesses ratesetting procedures for different types of digital music services.
  • Soliciting public comment on remix and digital first sale issues.
  • Supporting the Copyright Office’s work on Section 108, orphan works, and mass digitization issues.

2)“Assessing and improving enforcement tools to combat online infringement and promote the growth of legitimate services while preserving the essential functioning of the Internet.”

  • Repeating the call for Congress to standardize criminal penalties for streaming with those of reproduction and distribution.
  • Soliciting public comment regarding statutory damages for individual file-sharers and for secondary liability for large-scale online infringement
  • Establishing multi-stakeholder dialogue on effectiveness of DMCA notice and takedown system
  • Supporting the Copyright Office’s improvement of its database on registered agents under the DMCA and its examination on possible copyright small claims procedures.
  • Encouraging development of private sector cooperative initiatives to address online infringement
  • Enhancing public education and outreach for consumers about copyright law and legitimate online services

3)“Realizing the potential of the Internet as a legitimate marketplace for copyrighted works and as a vehicle for streamlining licensing.”

  • Providing input to Congress in any review of music licensing, particularly mechanical licensing for musical compositions
  • Supporting the Copyright Office’s improvement of its registration and recordation systems, including support of provisions for enhancing incentives to use those systems
  • Soliciting public comment on the appropriate role of government in improving online licensing.

The Green Paper traces the early stages of copyright and the Internet, paying particular attention to the US government’s role in facilitating that development — the 1995 Intellectual Property Working Group report Intellectual Property and the National Information Infrastructure laid the ground work for the first wave of copyright policy in the digital age and, in many ways, serves as a blueprint for this Green Paper. The IPTF also calls attention to the current review of the Copyright Act by the House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet, making the release of the Green Paper ever more timely.

The Green Paper covers a lot of territory. Among the highlights:

  • The “making available” right, required by the 1996 WIPO Internet Treaties, was not implemented in the U.S. because Congress considered the right to be covered by the existing statutory language. Since then, however, courts have been split as to whether the distribution right incorporated the concept of “making available.” The IPTF attempts to rehabilitate Congress’s earlier view by pointing out more recent academic scholarship that better establishes the “making available” right in U.S. law.
  • A “new challenge” faces the meaning of the public performance right — specifically, the Second Circuit’s recent interpretation of the right in WNET v. Aereo. The IPTF writes that the result of this and similar cases might affect the “viability and scope of new licensed business models such as online video subscription services,” and Congress may need to step in if courts continue to undermine a meaningful public performance right.
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Copyright Matters: Copyright Conversations with the United Kingdom

The following was written by Mark DesMeules of American Continental Group

On Monday, the U.S. Copyright Office hosted a Copyright Matters program titled Copyright Conversations with the United Kingdom: A View from Across the PondThe program featured a dialogue between Maria Pallante, Register of Copyrights, and John Alty, Chief Executive Officer and Comptroller General at the Intellectual Property Office (IPO) of the United Kingdom. The conversation also included several senior Copyright Office officials, UK IPO Director of International Policy Neil Feinson, and Deputy Director of International Policy Adam Williams. The officials discussed the copyright policy issues that are currently being faced by both countries, including: orphan works, extended collective licensing, small claims, and recent efforts in both countries to modernize their copyright legal systems for the digital age. The event was well attended with a number of individuals from both policy and industry.

John Alty emphasized a rapid shift to digital in the UK, noting the increasingly digital shift seen in UK publishing firms. With the transformation, however, comes the issue of digital licensing — a matter where the general sentiment is that the system is inefficient and expensive for “small value – large volume” hauls. The issue of increasing the efficiency of collective licensing is one that the UK is hoping to address. The private sector has taking the lead on this initiative. An industry group in the UK that includes actors from all sides of copyright has launched the CopyrightHub, a website that provides users with a jargon-free map for navigating and acquiring licenses for copyrighted goods. The hub was first suggested in the influential Hargreaves Review of Intellectual Property and Growth that was released in 2011, where Cardiff University Professor Ian Hargreaves recommended the creation of a digital copyright exchange.

Since the release of the Hargreaves Review, Alty’s office has been in listening mode, taking in comments from stakeholders. Key issues that have been raised amongst copyright holders and users include the need to access copyright more easily in a controlled environment and how to address orphan works. The CopyrightHub covers the former, and the recently passed Enterprise and Regulatory Reform Act addresses the latter. The Act, which achieved royal ascent in the UK in April, opens up orphan works for use by third parties, provided they have conducted a diligent, but unsuccessful search for the owner. Photographers in the country have expressed anger over the new provision.

Alty said that while online infringement continues to be an issue, UK research is showing that piracy rates have stabilized. The hope is to see a downward trend, which is being facilitated by a copyright alert system and the creation of an intellectual property crime unit in London that focuses on serious infringement (peer-to-peer downloading both domestically and internationally). The IPO has also been working on bringing small claims to justice, with a big picture focus on ensuring a well functioning copyright system. Working with the EU in its examination of copyright has been a priority of the UK as well, especially as debate intensifies around issues of copyright. The UK will put out its own framework for EU copyright later this year; the IPO is currently soliciting comments on its pending framework. Alty stated further that the UK looks forward to working with U.S. industry and officials on the matter.

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Copyright Report: National Research Council Releases Report

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Earlier today, the National Research Council of the National Academies has released a long-awaited report,[thereby].

The report aims to identify gaps in [,] that the authors suggest can assist in shaping copyright policy. In particular, the Council recommends that further study can focus on the “incentive calculus for various actors”, the “costs of voluntary copyright transactions”, “enforcement challenges”, and the “balance between copyright protection and exceptions.”

The report also examines what it calls the “data infrastructure for an empirical approach to copyright policy research.” It identifies existing sources of data that could be helpful to researchers. It also inquires about reducing bottlenecks to certain private datasets in existence. That is, data that could assist researchers may already be out there, just not easily accessible — for example, it might be in the hands of private firms.

The Trees

Copyright in the Digital Era is substantial and could provide ample discussion among academics, researchers, and policy makers. Indeed, there is much to agree with in the 102 page report.

For example, the Council calls for more data “to assess the magnitude and policy implications of the orphan works problem.” The U.S. Copyright Office has been [[#protected_1#]] over the past several years to determine if legislation is necessary to facilitate productive uses of works where the copyright owner cannot be identified or located. If comments it has received from potential users of orphan works are any indication, further research could reveal that the magnitude of the problem is far more limited than it has been made out to be. Any legislative fix for orphan works should equally be limited and circumscribed.

The Council also recommends further study of copyright litigation in civil courts. Research in this area could provide a wealth of information concerning costs of litigation, outcomes of lawsuits, and judgments awarded. This data would seem to be very helpful for another Copyright Office project: its [T].

The Forest

Unfortunately, the report suffers from a number of fundamental errors.

First, it presumes that the aim of copyright is to “encourage creative expression and the dissemination and preservation of creative works without stifling cumulative creativity, technological innovation, or free expression.” It goes on to say that research could help determine, for example, “under what circumstances sources of monetary and/or non-monetary motivation outside of that provided by copyright are effective in motivating creative activity.”

The presumption that copyright exists primarily to motivate the creation of expressive works is common, but not entirely accurate.
Copyright also motivates the commercialization of expressive works. This purpose is just as important, if not more important, than the incentive to create. The Supreme Court made this point less than a year ago in Golan v. Holder.

“Nothing in the text of the Copyright Clause confines the

“Progress of Science” exclusively to “incentives for creation.” Evidence from the founding, moreover, suggests that inducing dissemination—as opposed to creation—was viewed as an appropriate means to promote science. Until 1976, in fact, Congress made “federal copyright contingent on publication[,] [thereby] providing incentives not primarily for creation,” but for dissemination. Our decisions correspondingly recognize that “copyright supplies the economic incentive to create and disseminate ideas.”

This economic incentive doesn’t come in the form of financial rewards from the government but in the form of exclusive, private property rights secured by the government — rights that allow for private ordering and a functioning market that promotes progress in the same fashion as any free market system.1
If you focus solely on the motivation to create, as this report tends to do, than you will end up with a skewed copyright policy that leads to suboptimal results.

I saved the most troubling aspect of Copyright in the Digital Era for last. The report only briefly mentions that “not all copyright policy questions are amenable to economic analysis.” This is an understatement if there ever was one.

Simply put: copyright promotes important noneconomic values. Courts and others regularly recognize that copyright, at times, protects free speech interests.2 While U.S. law doesn’t recognize “moral rights” of authors in the same way as other countries, the inherent dignity of creators that these rights protect are implicit in many copyright provisions.3

On another note, the subject matter of copyright and its purpose of promoting knowledge and culture mean that a lot of its aspects are simply unquantifiable. What is the value of a cat video? What is the value of an episode of Game of Thrones? And if a certain policy favors the creation and dissemination of one at the expense of the other, how do you measure the effect of that trade-off? It’s vital that policy makers remain cognizant that not everything in the copyright world can be reduced to numbers and data.

So long as the noneconomic values that copyright promotes are recognized, and Copyright in the Digital Era is placed in the proper context, it can play a role in aiding copyright policy discussions. But there likely exists a strong temptation to treat the research questions in the report as covering the entire universe of copyright policy questions.

Footnotes

  1. Adam Mossoff explores the commercialization policy of copyright in more detail in his recent paper, [#protected_2#]. [[#protected_1#]]
  2. “[T]he Framers intended copyright itself to be the engine of free expression.” [,], 537 US 186, 219 (2003), quoting Harper & Row v. Nation Enterprises, 471 US at 539, 558 (1985). [#protected_2#]
  3. See [#protected_2#]. [#protected_1#]
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