Ladies and Gentlemen, it looks like the stimulus package could be well on its way through Congress and onto President Obama’s desk. So, what’s life going to be like post-Stimulus?
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1. Fair Use Reform.
No less a lover of copyright than Justice Ruth Bader Ginsburg recognized in the Eldred v. Ashcroft case that fair use is a critical factor in ensuring that copyright does not violate the First Amendment’s command that Congress "make no law abridging freedom of speech." But with large copyright holders threatening litigation over even the most incidental uses of copyright, reliance on fair use has become the province of only the bravest of artists, academics and commentators. While one might argue that the flexible four-part legal test for fair use is a good thing because it allows for new fair uses, there are some uses, like commentary and criticism, which are explicitly set out in the law. It is time to add several more. Thus, I urge Congress to add incidental, transformative and non-commercial personal uses to the list of fair uses enumerated in copyright law. Congress should also expressly provide that making a digital copy for the purpose of indexing searches is not an infringement.
Critical to any effort to reform fair use is an amendment to the anti-circumvention provisions of the DMCA that would permit breaking a technological lock for lawful reasons. Something is amiss when most research universities must employ a DMCA officer to advise computer scientists and engineers whether they can engage in legitimate research, including research on computer security. Closer to home, the DMCA prevents lawful consumer uses like putting a legally purchased DVD on a video iPod. In order to make this amendment meaningful, the manufacture and distribution of circumvention tools must be permitted for lawful purposes.
2. Limits on Secondary Liability.
The VCR, TiVo and the iPod did not become wildly popular because they were blessed by the copyright industries. They became wildly popular because they challenged the status quo. The Silicon Valley mantra of "innovation without permission" is the standard we should preserve in the law, and it should be done like this:
First, the Sony Betamax standard should be codified. Again, that standard protects a manufacturer or a distributor of a technology from liability for the infringing activity of others so long as that technology is capable of substantial non-infringing uses. Second, so-called statutory damages for secondary liability should be repealed. Should a technology not meet the Sony standard, the copyright holder is still entitled to actual damages if they can prove that there has been financial harm.
3. Protections Against Copyright Abuse.
The Let’s Go Crazy Baby and the many other cases of misguided takedown notices demonstrate that there is little risk for the copyright holder in issuing overbroad demands. These actions do have consequences for free speech — individuals may not know their right to contest the takedown notice or they may not want to test the litigious nature of powerful corporate copyright holders. Currently, the DMCA punishes a copyright holder only if it "knowingly" sends a false copyright notice. To deter this scattershot behavior, the law should instead punish a copyright holder who "knowingly or recklessly" sends out a false notice.
Similarly, there should be relief for copyright abuse outside the realm of the DMCA. Congress should legislate an affirmative cause of action for allegations of copyright abuse, and the Federal Trade Commission should declare that notices, like those used by sports leagues that overstate a copyright holder’s rights are unfair and deceptive trade practices under the Federal Trade Act. You’ve heard the notices: "This telecast is copyrighted by the XYZ league for the private use of our audience. Any other use of this telecast or of any pictures, descriptions, or accounts of the game without the XYZ League’s consent, is prohibited." The problem with this notice is that it completely misstates the law. The Computer and Communications Industry Association has filed a complaint asking the FTC to rule that these notices constitute an unfair trade practice.
4. Fair and Accessible Licensing.
It is doubtful that there are ways to make copyright holders set reasonable prices to license uses of their works that are not fair use. Nor am I sure that it is fair to force them to do so, since after all, their limited monopoly gives them the right to license their works for a million dollars or $1, or refuse to license it to anybody at any price. We are starting to see copyright clearinghouses, like the Copyright Clearance Center, which allow for simple licensing and payment schemes. And of course there are alternatives to the current copyright regime such as the Creative Commons, which permits a copyright holder to license their works under terms more favorable than the traditional "all rights reserved" standard. For example, my work is made available under a Creative Commons license that permits any use so long as it is attributed to me, is for non-commercial purposes and anybody reusing my work makes it available under these same terms.
Music, which is already subject to a variety of government mandated license schemes, is another story entirely. Without getting too deeply into the weeds, suffice it to say that the business of licensing music is completely Byzantine, in large part because of the existence of numerous publishers from whom the rights to the musical composition must be obtained. A potential licensor must also get permission from an artist or record company for the right to the sound recording, but that is usually easier. Congress has made one failed attempt to simplify the clearing of the composition right — it should try again.
In addition, Congress must resolve the problem created by the Copyright Royalty Board’s recent decision to raise by 300-1200% the royalties that Internet radio services pay to record companies. The rate has now been set so high that it threatens the viability of all but the largest webcasters. While bills have been introduced in Congress to restore the rates to what they were before the Board’s decision, Congress should instead require over-the-air broadcasters to pay these royalties and set the rate across platforms of approximately 3% of gross revenues. Broadcasters’ exemption from this performance royalty is solely a historical accident and the result of tremendous lobbying power. But there is now no reason to treat them differently from satellite and Internet radio. One other caveat to requiring that broadcasters pay this performance royalty is that the artists should receive 100% of their share, and none of that share should be assignable to record companies for any reason.
Finally, the law should make clear the distinction between a performance and a download. A copyright holder should not be able to collect two license fees merely because a device that plays performances can also record them, particularly if those recordings cannot be moved from the device to other devices.
5. Orphan Works Reform.
The by-product of the elimination of formalities like registration is that every time something is fixed in a tangible medium, it automatically receives copyright protection. This speech, for instance, is entitled to all the protections of copyright. The lack of registration requirements makes it difficult, in many cases, for an artist or educator who wants to license a work to find the copyright holder. When a potential user cannot find a copyright holder after a good faith effort, we consider the work to be an "orphan" work.
Because copyright infringement is a strict liability violation and damages can be as high as $150,000 per infringement, no one would dare take a chance on using an orphan work and risking the owner showing up and running to court. The result? Hundreds of thousands of works are languishing in the dustbin of copyright, unable to be used by anybody.
In 2005, the Copyright Office proposed that anyone who does a reasonable search for the owner of a copyright but nonetheless cannot find them should only be liable for "reasonable compensation" should the copyright owner resurface. Objections from photographers, book illustrators, textile and furniture manufacturers have held up potential legislation, but their problems are not so much with an orphan works solution than with the fact that it is virtually impossible to find visual arts like these using the Copyright Office’s text-only registry. Imagine trying to find the owner of a picture of Fenway Park when the only way the registry will permit you to describe it is as "a photograph of Fenway Park."
Sophisticated image recognition technology permits the development of accurate visual registries, and Public Knowledge has advocated a system of Copyright Office certified competitive registries that operate much like the competitive domain name registries that have dramatically lowered the cost of obtaining a domain name. Congress should act to limit damages for the use of orphan works and at the same time open the door to the creation of a new registry that should greatly benefit visual artists.
6. Notice of Technological and Contractual Restrictions on Digital Media.
While there is not a lot of love from copyright reformists and consumers for digital rights management technologies, the fact is that for good or for ill, they will be used in some way, shape or form on digital media for the foreseeable future. However, if these technological locks are going to restrict lawful uses of that media, at a minimum, copyright holders should be required to provide clear and simple notice of any technological or contractual limitations on users’ ability to make fair or otherwise lawful uses of their products. This gives the purchaser the information she needs to decide whether or not to purchase the product. As Boalt Hall Law Professor Pam Samuelson has urged, failure to notify a purchaser of a copy protected CD, for example, should be considered an unfair or deceptive trade practice under the Federal Trade Act, and failure to notify the purchaser of the prohibition on circumvention of the copy protection should be a defense against any DMCA claim. Similarly, any failure to notify a purchaser of any licensing restriction should invalidate that restriction. Long click through licenses in tiny print would not qualify as notice.