Rumblings in the U.S. Copyright Frontier

On March 20, 2013, following an address at Columbia Law School entitled “The Next Great Copyright Act”, U.S. Register of Copyrights Maria Pallante appeared before the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet to call for a comprehensive update to the Copyright Act. Pallante argued that an overhaul of the Copyright Act is long overdue as the last major revision occurred in 1976. Though some adjustments have been made since then, most notably the 1996 Digital Millennium Copyright Act (DMCA), which was the first act to address the impact of digital technologies on copyrighted material, the Copyright Act still largely reflects a pre-internet world. The issues that Pallante feels should be addressed include “clarifying the scope of exclusive rights…reviewing the efficacy of the DMCA…reforming the music marketplace…and improving the systems of copyright registration and recordation.”

A little over a month later on World Intellectual Property Day, Subcommittee chairman Bob Goodlatte (R-VA) announced that the Judiciary Committee would begin a top to bottom review of the copyright act. The first step in the process of revision is a series of hearings, which began on May 8, 2013 and will conclude some time in the spring of 2014. The hearings have consisted of testimonies from a wide range of professionals in industries that are affected by copyright, including, among others, musicians, authors, digital entrepreneurs and photographers. Hearings have addressed the roles of both copyright and technology in innovation, the impact of voluntary agreements on the U.S. intellectual property system and the scope of copyright protection.

Performance Rights for Sound Recordings

The most important development produced thus far by the hearings came as a bit of a surprise. At the beginning of the Judiciary Committee’s July 25th hearing entitled “Innovation in America: The Role of Copyrights”, Rep. Mel Watt (D-NC) announced that he would introduce a bill to establish a performance right for sound recordings on terrestrial (AM/FM) radio. Under U.S. copyright law, every song receives two copyrights, one is for the sound recording, and the other is for the underlying composition. Currently, performance rights for terrestrial radio exist only for the composition. This means that when you hear Jimi Hendrix’s version of “All Along the Watchtower” on the radio, Bob Dylan, the song’s composer, is paid, but Hendrix’s estate receives nothing.

An overwhelming majority of the world’s industrialized nations recognize this right, leaving the U.S. in the company of countries like North Korea and Afghanistan, both of which do not recognize terrestrial radio performance rights for sound recordings. This discrepancy in U.S. copyright law means that not only do American recording artists miss out on income from domestic radio plays, they also lose millions of dollars in international royalties as countries with this performance right will not pay American artists for radio play since the U.S. does not have a reciprocal right.

This debate is not a new one how- ever, as Pallante points out “Congress has already had more than a decade of debate on the public performance right for sound recordings”. Several bills similar to Rep. Watt’s, which is officially known as the Free Market Royalty Act, have been proposed as recently as 2009, however, all such bills have been defeated due to massive lobbying efforts on the part of radio broadcasters. The broadcasters contend that the exposure an artist receives from radio play is more than sufficient compensation. While this may have been true a decade ago, the continuing decline in record sales has made the potential earnings from radio play a much more significant factor in a recording artists income. Rep. Watt officially introduced the Free Market Royalty Act on September 30, 2013, but has since left Congress to become director of the Federal Housing Finance Agency, leaving the bill’s future somewhat unclear.

Fair Use

The most recent hearing, held on January 28, focused on the fair use doctrine. Fair use is an interesting legal exception that allows for the use of copyrighted material without the permission of the rights holder. Fair use does not mean that you can use whatever you want with impunity. Instead, section 107 of the Copyright Act delineates the four factors to be considered when determining the fairness of a use, the factors are:

1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

2. the nature of the copyrighted work;

3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

4. the effect of the use upon the potential market for or value of the copyrighted work.

Fair use has generated a lot of debate recently in the Goldieblox v. Beastie Boys dispute. Goldieblox, a toy company whose products aim to inspire young girls to pursue careers in the male-dominated fields of science and engineering, released an online advertisement that used the Beastie Boys song “Girls”. The song’s lyrics, which originally expressed sexist attitudes, were changed to reflect the mission of Goldieblox. While parodies that provide criticism are often considered fair uses, the commercial nature of the use along with the Beastie Boys’ longstanding refusal to license their work for use in advertisements raised doubts as to the fairness of Goldieblox’ use.

In the fair use hearing, the first two testimonies came from Peter Jaszi, a professor of law at American University, and June Besek, a professor of law at Columbia University. Jaszi testified that he felt the courts were doing a good job of applying the fair use doctrine, but suggested exemptions from statutory damages for noncommercial uses as a possible revision. Besek, on the other hand, feels that the courts’ have relied too heavily on whether a use is transformative in determining its fairness, claiming that this reliance has expanded the scope of fair use beyond what it should be.

Later in the hearing, Naomi Novik and David Lowery spoke about the impact of fair use on creators. Novik, a science fiction author and representative for the Organization for Transformative Works, argued that licensing is cost and resource prohibitive, and therefor not an option for many creators who look to make use of existing material. Novik cited herself as a prime example, having made a name for herself writing fan fiction, which she contends should be considered a fair use. Lowery, a musician known for his work with Cracker and Camper Van Beethoven, said he had no problem with uses that are commonly considered fair, such as parody, instead focusing his attention on unlicensed copies that claim to be fair, but are in fact not. Lowery claimed that finding the author of a work and obtaining a license is “easier than ever”, citing the growth of hip hop as proof that licensing does not make sampling impossible.

Though Novik and Lowery’s discussions of licensing are interesting in the context of fair use, the problems they addressed could be addressed better through changes to licensing systems, such as compulsory licensing for derivative works, than through changes to the fair use doctrine.

Though a date has yet to be set, the next hearing on “Notice and Takedown Provisions” will focus mainly on the DMCA, particularly its safe harbor provisions which protect online service providers against copyright infringement liability. While the U.S. is not alone in reviewing intellectual property law for its suitability to existing international practice and technical change, such hearings continue to engage the creative community in the public arena and likely raise the burden of proof for technology providers who arguably benefit from the legal status quo.

By Griffin Davis





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