Top Ten Copyright Stories of 2019…and What to Expect in 2020

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#1 EU Copyright Directive

On April 15, the Council of the European Union approved the EU Copyright Directive, a broad set of reforms aimed at modernizing EU copyright rules as part of its Digital Single Market strategy. The Directive came into force on June 7, and EU Member States now have 24 months to transpose the Directive into their national legislation. The Directive attempts to improve cross-border access to content online; widen opportunities to use copyrighted materials in education, research and cultural heritage; and increase the copyright marketplace. Two articles in the Directive generated quite a bit of controversy. Article 15 (formerly Article 11) grants publishers direct copyright over “online use of their press publications by information society service providers.” Article 17 (formerly Article 13) requires certain online platforms to obtain authorization from rights holders to upload works and, in certain instances to provide them fair remuneration. Of course, there are exceptions to this such as where the content is used in a “quotation, criticism, review” or for “the purpose of caricature, parody or pastiche.” Perhaps most importantly, is the exception that applies when the platform has “made best efforts to obtain an authorization” to prevent copyright infringement and has demonstrated that they have acted expeditiously to remove a piece of content, after being notified by the owner of the rights.

#2 The CASE Act

The Copyright Alternative in Small-Claims Enforcement Act of 2019, or the CASE Act as it most widely called was introduced on May 1 in the House (H.R. 2426) by Representatives Hakeem Jeffries (D-NY) and Doug Collins (R-GA); and in the Senate (S. 1273) by Senators John Kennedy (R-LA), Thom Tillis (R-NC), Dick Durbin (D-IL), and Mazie Hirono (D-HI). Original House co-sponsors include: House Judiciary Committee (HJC) Chairman Jerry Nadler (D-NY) and HJC IP Subcommittee Chairman Hank Johnson (D-GA), as well as Martha Roby (R-AL), Judy Chu (D-CA), Ben Cline (R-VA), Ted Lieu (D-CA), and Brian Fitzpatrick (R-PA). The legislation, which has broad bipartisan support and has been pending for years in some form, would create a voluntary small claims board within the U.S. Copyright Office that will provide copyright owners with an alternative to the expensive process of bringing copyright claims, including infringement claims and claims of misrepresentation under 512(f) of the Copyright Act/DMCA, in federal court. Despite the best efforts and numerous outlandish falsehoods about the bill spun by organizations like Electronic Frontier Foundation (EFF) and Public Knowledge (PK) that oppose any copyright legislation that will help the creative community, the CASE Act went on to pass the House by an overwhelming majority of 410-6. On July 18, the Senate Judiciary Committee voted the bill favorably out of committee by voice vote. It is now awaiting a vote by the full Senate, which will happen when Senator Ron Wyden (D-OR) – the only Senator who opposes the bill – removes his hold on it.

#3 Supreme Court Decision in Fourth Estate Case

The issue at stake in Fourth Estate v. Wall-Street.com was whether the registration requirement for initiating an infringement suit in federal court in Section 411 of the Copyright Act is satisfied by the “application approach” (i.e., when the application is filed with the Copyright Office) or “certificate approach” (i.e., when the Office examines and either issues a registration or rejects the application). On March 4, the U.S. Supreme Court issued a unanimous decision holding that registration, under section 411 of the Copyright Act, occurs when the Register acts to either complete a registration or refuse it, i.e., the certificate approach. Thus, copyright owners must wait for Copyright Office action before filing a lawsuit for copyright infringement. The opinion, authored by Justice Ginsburg, also mentions that “the statutory scheme has not worked as Congress likely envisioned. Registration processing times have increased from one or two weeks in 1956 to many months today,” which it says is “attributable, in large measure, to staffing and budgetary shortages that Congress can alleviate, but courts cannot cure.” The decision in this case is problematic to copyright owners of all types but especially small businesses and individual creators, as well as large volume creators, who cannot afford to register all their works immediately. Those creators who do not register immediately will now find themselves sitting on their hands waiting weeks and months for the Copyright Office to examine their applications while the infringers and pirates continue unabated. It’s hard to believe that Congress won’t take action to try to alleviate that harm somehow.

#4 Modernization of the U.S. Copyright Office

The need to modernize the operations, infrastructure and IT of the U.S. Copyright Office is not a new issue. Congress has slowly come to the realization that it is essential to pump money and resources into the Copyright Office so that it can update its IT systems. Then, in 2019, things really picked up speed. Starting at the end of August, the Senate Judiciary Committee’s Intellectual Property Subcommittee held monthly (and sometimes twice monthly) roundtables on the topic, which have been attended by stakeholders of all types. Sen. Tillis plans on publicly releasing a discussion draft of modernization legislation before year’s end. Some of the topics likely to be addressed in that legislation include modernizing the publication and deposit requirements, creating a tiered fee structure, and addressing the problems created by the Fourth Estate decision. The Copyright Office itself has also been doing what it can to modernize by making improvements to its operating regulations and compendium (more on that below) and working with the Library of Congress, which runs its IT systems, to take steps to modernize throughout the year. Further, throughout the year, the Office has held modernization usability testing, hosted webinars to inform and answer questions from the public and created a modernization office to remain focused on this important initiative.

#5 Implementation of the Music Modernization Act

In October of 2018, the President signed into law the Orrin G. Hatch–Bob Goodlatte Music Modernization Act (MMA), Public Law no. 115-264. By combining three previously introduced bills – The Music Modernization Act of 2018, the Classics Protection and Access Act, and the AMP Act – the MMA helps creators across the music industry make a living through their creativity by: Improving compensation to songwriters and streamlining how their music is licensed; enabling legacy artists (who recorded music before 1972) to be paid royalties when their music is played on digital radio; and providing a consistent legal process for studio professionals – including record producers and engineers – to receive royalties for their contributions to music that they help to create. More specifically, the MMA creates a compulsory blanket mechanical license covering activities related to the making of permanent downloads, limited downloads, and interactive streams of musical works embodied in sound recordings. The rates for this new blanket license will be determined through a willing buyer/willing seller standard (a market-based standard). The MMA also creates a mechanical licensing collective (“MLC”) to issue and administer the new blanket licenses for digital downloads and reproductions. In order to effectuate these changes there were several different rulemakings the Copyright Office needed to engage in throughout 2019. Perhaps the most significant of these concluded on July 8, when the Office issued a final rule designating Mechanical Licensing Collective, Inc., as the mechanical licensing collective and Digital Licensee Coordinator, Inc. as the digital licensee coordinator. On September 24, the Copyright Office also published a notice of inquiry “as the first step in promulgating the regulations required by the MMA to govern the blanket license regime.” And on November 14, the Mechanical Licensing Collective (MLC) and Digital Licensee Coordinator notified the Copyright Royalty Board that they reached a settlement regarding initial funding for the MLC. The settlement notification (available here) states that the parties have agreed to an initial assessment of $33.5M for startup costs and an annual assessment of $28.5M per year starting in 2021. The CRB must still adopt the agreement.

#6 Hello, I Must be Going!

On March 27, Librarian of Congress Dr. Carla Hayden announced the appointment of Karyn Temple as the 13th Register of Copyrights, following two and a half years of service as Acting Register, and eight years total with the Copyright Office. The copyright community at large commended Register Temple on her outstanding work as Acting Register and congratulated her on her appointment. Roughly eight months later, Register Temple announced that she will depart the U.S. Copyright Office to join the Motion Picture Association as its Senior Executive Vice President and Global General Counsel. Temple will depart from her current position on January 3, 2020. The Librarian of Congress is developing a transition plan and recently selected Maria Strong, the Associate Register of Copyrights and Director of Policy and International Affairs, to be the Acting Register, effective January 5.

#7 New Group Registrations

The Copyright Office doesn’t have the authority to change the law; only Congress can do that. So, the Office has begun looking at areas where the law gives it the flexibility to change how it operates as a means for improving and modernizing the registration system and other services.  One way the Office has made improvements is by increasing the number and types of group registrations that are available, and by altering some of the existing group registrations. The Office published final rules relating to group registrations for newspapers and for registration of unpublished works, eliminating the three-month deadline for submitting newspaper issues under the group registration option as well as arranging for special relief arrangement for news publishers seeking to deposit electronically to satisfy mandatory deposit requirements. The Office also established a new group registration option for a limited number of unpublished works, which replaces the prior accommodation for “unpublished collections.” The new group registration option “will allow the Office to examine each work for copyrightable authorship, create a more robust record of the claim, and improve the overall efficiency of the registration process.” In May, the Office published a notice of proposed rulemaking, proposing to create a new group registration option for works on an album of music. This registration option would be available in addition to other options for registering multiple sound recordings and musical works, including the group registration for unpublished works, registration as a collective work, and registration as a unit of publication. It also bears mentioning that, at the very end of 2018, the Office proposed a new group registration of short literary works that would create a new group registration option to allow 50 works to be registered with one application, as long as the works meet the following criteria: they must “contain at least 100 but no more than 17,500 words”; “[be] created by the same individual, and that individual must be named as the copyright claimant for each work”; and “[are] all published online within a three-calendar-month period.” Comments were submitted on the proposed rule in early 2019.

#8 Supreme Court Hears Two Copyright Cases — One Where a State was the Infringer and Another Where a State was the Infringed

In the Fall of 2019, the Supreme Court heard two copyright cases: Allen v. Cooper and Georgia Code Revision Commission v. Public.Resource.org. The issue at stake in Allen v. Cooper is whether a state entity is shielded from liability for copyright infringement by sovereign immunity. Allen and his production company Nautilus Productions are the exclusive photographers of the shipwreck of Queen Anne’s Revenge. Allen discovered that the State was using his videos online without his consent. In addition, the state government passed a law making all photographs and video material of shipwrecks in custody of North Carolina public record and available for use without limitations. As a result, Allen filed a suit for declaratory judgment, arguing that the statute violates the Takings and Due Process clauses of the Constitution. The State argued that the Copyright Remedy Clarification Act did not effectively abrogate state sovereign immunity, and that individuals were still precluded from suing states for copyright infringement. The Fourth Circuit issued a decision July 10, 2018, holding that Congress did not validly abrogate Eleventh Amendment immunity when it enacted the Copyright Remedy Clarification Act. The Supreme Court decided to hear the case and oral arguments took place on November 5. Counsel for Allen argued that “when states infringe the exclusive rights that Congress is charged with securing, Congress can make states pay for doing so.” He stated that the intellectual property clause of Article I Section 8 of the Constitution provides “express constitutional mandate for Congress to protect specified private property rights against any and all intrusion,” therefore “securing” exclusive rights against “all comers, exclusive against the world, including the government and including states.” On the other side, the North Carolina Deputy Solicitor General argued on behalf of the state, that the Constitution preserves state sovereignty unless there is “compelling evidence that the states surrendered it when they ratified a particular constitutional provision.” He argued that state sovereignty immunity limits congressional authority to expose states both to expansive liability that go beyond the due process clause and to the Copyright Remedy Clarification Act’s financial remedies of up to $150,000 per infringement. Justice Ginsburg pointed out that the obvious inequity of allowing a state to be able to hold copyright and sue for infringement, while also allowing the state to “infringe to [its] heart’s content and be immune from any compensatory damages.”

Justice Ginsberg didn’t have to look far for an example of a state enforcing its own copyright because it had a perfect example on its own docket one month later. That case is Georgia Code Revision Commission v. Public.Resource.org. The issue at stake in the case has nothing to do with a state sovereign immunity but rather whether the Official Code of Georgia Annotated (OCGA) was eligible for copyright protection. No one questions whether the law of a state can be protected by copyright; it can’t. But this case deals with an annotated code that is much more than the law, since it includes (among other things) judicial decision summaries, editor’s notes, research references, notes on law review articles, and summaries of the opinions of the Attorney General of Georgia. The State of Georgia contracts with a private publisher to edit and publish the OCGA. Georgia holds a copyright in the OCGA and grants the publisher the exclusive right to publish and sell print and digital copies of the OCGA. The publisher is also required to make the unannotated statutory provisions freely available, provide a number of free copies of the OCGA to a number of state and local institutions, such as libraries, and cap the total costs of the OCGA. Public Resource, a non-profit organization, purchased a copy of the OCGA, digitized it, and uploaded it to its own website, making it freely available. Georgia filed a suit alleging direct and indirect copyright infringement. The Eleventh Circuit held that “[w]here the official who created the work is entrusted with delegated sovereign authority, where the work carries authoritative weight, and where the work was created through the procedural channels in which sovereign power ordinarily flows – it follows that the work would be attributable to the constructive authorship of the People, and therefore uncopyrightable,” finding the OCGA uncopyrightable as a result. The Supreme Court granted a cert petition filed by Georgia and oral arguments took place on December 2. While Justices Gorsuch and Sotomayor initially questioned the position taken by Georgia, many of the Justices seemed to agree. Justice Breyer, in particular, seemed to think it was an easy question, saying that when a judge or legislature does something in his/her/its judicial or legislative capacities it’s not copyrightable, but if not, then it may be protectable by copyright. A transcript of the arguments is available here.

#9 DOJ Opens Review of ASCAP and BMI Consent Decrees

On June 5, the U.S. Department of Justice (DOJ) opened a review of the consent decrees it has with ASCAP and BMI. As part of the review, DOJ gave interested parties the opportunity to file comments “relevant to whether the Consent Decrees continue to protect competition.” In particular, the DOJ sought public comments on issues such as: Do the Consent Decrees continue to serve important competitive purposes today? Are there provisions that are no longer necessary to protect competition? Are there provisions that are ineffective in protecting competition? What, if any, modifications to the Consent Decrees would enhance competition and efficiency? Would termination of the Consent Decrees serve the public interest? If so, should termination be immediate or should there instead be a sunset period? Do differences between the two Consent Decrees adversely affect competition? The public comments were posted September 12. The DOJ has not taken any further action at this point.

#10 Copyright Office Studies

The U.S. Copyright Office regularly studies different copyright issues and issues reports on its findings. Some of these studies take a long time to conclude. Back in April 2015, the Office began a study of copyright issues related to visual artists and works of visual art, focused on the “(1) difficulties with the registration process; (2) challenges with licensing generally and monetizing visual works online; and (3) general enforcement obstacles.” The study was completed and on January 18, 2019, the Office sent letters to the Chairman and Ranking members of the House and Senate Judiciary Committees regarding the legal landscape of opportunities and challenges for copyright and visual works. The letters noted that the Office is considering issues such as broadly as the development of APIs and extension of group applications to all types of visual works as part of its ongoing modernization efforts; further, the Office plans to request comments “on issues relating to online publication as they relate to registration requirements” (which it did); review of “issues regarding [copyright management information] and section 1202 in the context of its study on the moral rights of attribution and integrity” (see below); and continued support of legislative solutions for small claims enforcement and orphan works.

Another study that has been pending for a long time is the one evaluating the impact and effectiveness of the DMCA Section 512 safe harbor provisions. This study began back in late 2015. In the years that followed, there have been multiple requests for comments and roundtable discussions in New York and San Francisco. Most recently, on February 1, the Copyright Office held a one-day public roundtable on April 8, to allow stakeholders to address relevant domestic and international developments that have occurred since the close of the written comment period on February 6, 2017. We anticipate that the 512 safe harbor report will be issued in early 2020.

Lastly, the Copyright Office also conducted a public study on moral rights for authors, specifically the rights of attribution and integrity. The report was issued on April 23. In the report the Office “presents an extensive review of the U.S. moral rights regime, exploring the current state of attribution and integrity interests – particularly with respect to legal and technological changes since the United States joined the Berne Convention thirty years ago.” Following hearings and reviews of public comments, the Report concludes that the U.S. moral rights framework is adequate, “despite there being some room for improvement,” and suggests possible avenues for strengthening the framework, including amending the Visual Artists Rights Act (VARA) and the Lanham Act, expanding authors’ recourse for removal or alteration of copyright management information in section 1202, and adopting a federal right of publicity law.

What to expect in 2020?

We also have a glimpse into what we can expect to be on 2020’s top ten list of copyright news.  We expect decisions not only in the Allen and Georgia Code Revision cases but also in the widely publicized Oracle v. Google case in which the Supreme Court will consider (i) whether copyright protection extends to a software interface; and (ii) whether petitioner’s use of a software interface in the context of creating a new computer program constitutes fair use. With the Copyright Office scheduled to issue its 512 study and the Senate Judiciary Committee’s Intellectual Property Subcommittee likely to hold hearings and/or Roundtable discussions on DMCA issues, the DMCA will likely be a hot topic next year. As will the relationship between artificial intelligence and copyright law, with the U.S. Patent and Trademark Office, the Copyright Office and the World Intellectual Property Office (WIPO) taking on the issue in early 2020. With so much underway, it’s safe to say that next year, I’ll be back with a whole new top ten list of copyright stories from 2020.

 

To read additional blogs by Keith and the Copyright Alliance team, please click here.

Keith Kupferschmid

Author: Keith Kupferschmid

Before joining the Copyright Alliance, Keith served as the General Counsel and Senior Vice President for Intellectual Property for the Software & Information Industry Association (SIIA). During his 16 years at SIIA, he represented and advised SIIA member software and content companies on intellectual property (IP) policy, legal and enforcement matters. He has testified before Congress and various federal and state government agencies on IP issues and also supervised SIIA’s Anti-Piracy Division, including working with federal and state government officials on civil and criminal piracy cases. Prior to joining SIIA, Keith worked as an IP attorney at the law firm of Finnegan, Henderson, Farabow, Garrett & Dunner, IP attorney-advisor at the U.S. Patent and Trademark Office (PTO), Director of Intellectual Property at the United States Trade Representative, and Policy Planning Advisor at the U.S. Copyright Office.

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