2018 will be known as the year that the copyright legislation drought ended. It may pale in comparison to the Cubs 108-year World Series drought or Henry Winkler’s 42-year Emmy drought, but in copyright circles this was big news.
Prior to 2018, it had been more than ten years since the last piece of substantive copyright legislation was enacted into law (the PRO-IP Act passed in 2008). If you ask most copyright experts which bill ended the drought, they will tell you it was the Music Modernization Act, and they would be wrong. The bill that ended the dry spell was actually…
The Marrakesh Treaty Implementation Act of 2018
The Marrakesh Treaty Implementation Act of 2018 (MTIA), Public Law no. 115-261, which was introduced by Senators Grassley (R-IA), Feinstein (D- CA), Harris (D-CA), and Leahy (D-VT) on March 15 of last year, amended section 121 of the Copyright Act and created a new section, Section 121A, to facilitate cross-border exchange of accessible format copies by making it easier for accessible copies to be created and shared. These changes were made so that the United States could join the “Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled” (“Marrakesh VIP Treaty”), which the Senate agreed to ratify in June 2018.
The MTIA allows an authorized entity to export copies of a previously published literary or musical work in accessible formats to another country that is a party to the Marrakesh VIP Treaty, and for an authorized entity or an eligible person (or their agent) to import accessible formats of a previously published literary or musical work. Not surprisingly, there are numerous requirements placed on authorized entities to ensure that the copies only go to eligible recipients.
The MTIA was signed into law by President Trump on October 10, 2018, which was one day before…
Music Modernization Act
The Orrin G. Hatch–Bob Goodlatte Music Modernization Act (MMA), Public Law no. 115-264, was enacted. The MMA combines three previously introduced bills: The Music Modernization Act of 2018 (S. 2334), the Classics Protection and Access Act (S. 2393), and the AMP Act (S. 2625).
This new legislation 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;
- 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.
Impressively, the bill was unanimously passed by both the House and the Senate before being signed into law by the President on October 11, 2018 – not an easy feat for any legislation as complex as the MMA, and certainly not any easy feat for any music bill.
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). Further, the Act creates a mechanical licensing collective (“MLC”) to issue and administer the new blanket licenses for digital downloads and reproductions.
The MLC will:
- collect, distribute, and audit the royalties generated from these licenses to and for the respective musical work owners;
- (ii) create and maintain a public database that identifies musical works with their owners along with ownership share information;
- (iii) provide information to help with (and engage in) matching musical works with their respective sound recordings; and
- (iv) hold unclaimed royalties for at least 3 years before distributing them on a market-share basis to copyright owners, as reflected by royalty payments made by digital music providers for the covered activities in question.
The Act also provides a new exclusive federal right for sound recordings fixed before February 15, 1972 (“pre-72 sound recordings”), which were previously not protected under federal copyright law. Noninteractive digital audio transmissions of pre-72 sound recordings would be subject to the same statutory licensing provisions that apply to sound recordings protected by federal copyright law. The Act preempts actions for state and common law claims for pre-72 sound recordings for activities taken on or after the enactment date and covered under the statutory license for digital audio transmissions of post-72 sound recordings, and preempts state copyright law claims regarding reproduction and distribution rights for pre-72 sound recordings as well. The Act creates a procedure to enable persons to engage in the noncommercial use of pre-72 sound recordings that are not in the public domain and are not being commercially exploited and includes a rolling timeline for pre-72 sound recordings to enter the public domain, with sound recordings receiving protection for a period of at least 95 years after publication.
In addition, the Act also changes the way that judges are assigned to oversee the public performance royalty rate proceedings that ASCAP and BMI are subject to and sets forth a process that enables studio professionals – including record producers and engineers – to receive royalties for their contributions to music that they help to create. With the legislation now enacted, the burden shifts to the U.S. Copyright Office to implement the many requirements included in the Act.
Register of Copyrights Selection and Accountability Act of 2017
But not all copyright legislation considered by Congress was passed during 2018. A bill that received significant consideration and support, but which fell short of being passed by Congress, was S. 1010, the Register of Copyrights Selection and Accountability Act of 2017 (RCSAA). S. 1010 would have made the Register of Copyrights a presidential appointee confirmed by the Senate. A companion bill, H.R. 1695, passed the House by an overwhelming 378-48 vote on April 26, 2017. S. 1010, which was introduced by Senate Judiciary Committee (SJC) Chairman Chuck Grassley (R-IA), SJC Ranking Member Dianne Feinstein (D-CA), and Senators Patrick Leahy (D-VT) and Orrin Hatch (R-UT), was referred to the Senate Rules Committee (SRC).
On December 12, the Rules Committee unanimously agreed to discharge the bill so that it could be taken up by the full Senate, and a substitute amendment was filed by SRC Chairman Blunt. The bill was then “hotlined,” a process to determine if any Senator objects to moving the bill through the Senate by unanimous consent, and it was during this process that Senator Ron Widen (D-OR) put a hold on the bill. Unfortunately, there were precious few days left in the 115th congressional session and, during those waning hours, the Senate was focused on passing the budget (which also did not happen, resulting in a partial government shutdown). So, unlike the MMA and the MTIA, neither H.R. 1695 or S. 1010 were enacted into law in 2018. However, given the tremendous support for these bills, from both Congress and stakeholders, the legislation is certain to receive favorable consideration in the 116th Congress.
Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2017
Another bill that received a lot of attention and support during 2018 was H.R. 3945, the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2017. The bill would create a voluntary small claims board within the U.S. Copyright Office to provide copyright owners with an alternative to the expensive process of bringing infringement claims in federal court. This new board, called the Copyright Claims Board (CCB), would cap damages at $15,000 per work infringed and $30,000 total. Small claims legislation has been introduced in the past, but in 2018, buoyed by grassroots creator support from across the country, the bill finally started its long trek through the congressional legislative process. After negotiation sessions in February and March, the House Judiciary Committee held a hearing on the bill in September.
Those who testified on the bill included David Trust (Chief Executive Officer of Professional Photographers of America), Matthew Schruers (Vice President of the Law and Policy, Computer and Communications Industry Association), Jenna Close (Director of Photography at Buck the Cubicle), Jonathan Berroya (Senior Vice President and General Counsel at the Internet Association), and Keith Kupferschmid (Chief Executive Officer of Copyright Alliance).
The witnesses discussed the barriers that exist within the current copyright system of enforcement, as experienced by both their respective organizations and businesses as well as the independent creator community overall. All the witnesses agreed on the need for the creation of the type of process the CASE Act proposes, while some of the witnesses proposed changes that they thought would improve the bill. And most, if not all, of the Committee members expressed general support for bill. With such strong bipartisan support from legislators, as well as from creators across the country who voiced their urgent need for the bill, the CASE Act is likely to garner significant consideration by Congress in 2019. If one copyright bill passes the next Congress, the CASE Act is likely to be that bill.
American Royalties Too Act of 2018 (ART Act)
The last significant copyright bill worth mentioning is the S. 3488 and H.R. 6868, the American Royalties Too Act of 2018 (ART Act). The identical bills were introduced in the Senate – by Senators Orrin Hatch (R-UT) and Patrick Leahy (D-VT)); and in the House (by Representatives Jerry Nadler (D-NY) and Doug Collins (R-GA) – so late in the session (September 25) that there was insufficient time for Congress to consider it during 2018. The legislation would provide for a resale royalty right by amending the Copyright Act to provide creators of visual art a 5% royalty of the price paid for their art when it is resold at auction.
It’s clear that the RCSAA, the CASE Act and the ART Act will all likely be considered by Congress during 2019. Congress may also consider legislation to help modernize the U.S. Copyright Office registration system as well as legislation aimed at addressing the continual problems of online piracy.