Alert June 27, 2013

House Judiciary Committee Begins Comprehensive Review Of U.S. Copyright Law

Summary

The House Judiciary Committee has begun a thorough review of copyright law, with a view toward legislation to modernize the federal copyright statute. Although this undertaking will likely require a long and arduous process, Congress will likely consider at least the following issues:  (i) the scope of copyright protection in the digital age; (ii) DMCA reform; (iii) orphan works; (iv) statutory damages; (v) registration and recordation requirements; (vi) exceptions for libraries and archives; (vii) compulsory licensing; (viii) anti-circumvention rules; (ix) the first sale doctrine; and (x) a small claims process for copyright.

On May 16, 2013, the U.S. House Subcommittee on Courts, Intellectual Property and the Internet held the first hearing intended to commence a comprehensive review of copyright law, with a view toward legislation to modernize the federal copyright statute. The hearing followed an announcement by new Judiciary Committee Chairman Rep. Goodlatte (R-VA) that the committee would undertake this review, as well as a call by the Register of Copyrights, Maria Pallante, for comprehensive reform.

The last comprehensive legislative reform of copyright law occurred in 1976, long before the advent of the digital age which has radically transformed the means by which much copyrighted content is distributed and used. In 2010, a group of prominent academic and private sector copyright practitioners participated in the Copyright Principles Project (“CPP”), which considered numerous reform proposals but, tellingly, did not reach consensus on many of them. Nonetheless, the CPP report identified more than two dozen issues that will likely provide some focus to the House Committee’s review.

The following is a list of the issues most likely to be considered as a part of any comprehensive copyright reform:

  • Clarifying the scope of the copyright owner’s exclusive rights. Central to any significant copyright reform will likely be an evaluation of the overall balance between the rights of copyright owners and the various countervailing interests of technology providers, content users and consumers. Congress will attempt to assess whether the current balance is adequate to protect against infringement and counterfeiting on the one hand, or whether it improperly impedes the use and dissemination of copyrighted content on the other.

    These considerations may be influenced by international concerns, in that the United States has generally advocated that other countries agree to and abide by international treaties such as the Anti-Counterfeiting Trade Agreement (“ACT”) and the Trans-Pacific Partnership (“TPP”), and any reform will not likely depart from the policies of those agreements. Congress may consider the duration of the copyright term, fair use, whether a right of public performance ought to be extended to sound recordings and whether streaming of content constitutes a reproduction or public performance.

    The CPP Report even suggested that the Copyright Office consider some means to provide the public with additional guidance, perhaps even opinion letters, about what constitutes fair use. The 2013 Joint Strategic Plan on Intellectual Property Enforcement, recently issued by the U.S. Intellectual Property Enforcement Coordinator, indicated that the Copyright Office would publish and maintain an index of major fair use decisions to help educate authors with respect to fair use.
  • DMCA Reform. The Digital Millennium Copyright Act (“DMCA”) was enacted in 1998 and, among other things, provided a notice and take down process to protect content providers and online service providers in connection with the digital distribution of copyrighted works. This “safe harbor” has been central to the advent of Internet-based businesses with user-generated content.

    The Judiciary Committee will likely review the effectiveness and detriments of the DMCA, and determine whether any reforms would be beneficial. Among other things, the committee will likely consider whether content owners have been overly aggressive in demanding “take downs” where there is arguably fair use of a copyrighted work, and whether content owners have been adequately protected under a system that requires that they constantly police widespread digital distribution of their content.
  • Orphan works. The Copyright Office previously endorsed legislation to address this issue, which pertains to works for which the author cannot readily be determined or located. Some have argued that, under current law, the threat of an infringement claim deters the use of such works, even when it is impractical or impossible to locate the copyright owner to obtain a license or permission. Although there is much agreement that a solution is necessary to enable the use of such works, reform efforts have fallen short of a solution to date.
  • Statutory damages. High-dollar verdicts in some cases involving illegal downloading have given rise to arguments that the current statutory damage scheme is excessive and in need of reform. Currently, statutory damages are available up to $30,000 for each act of infringement, or $150,000 for willful infringement. Proponents of the current damages scheme, however, point out the massive extent of ongoing infringement, and argue that reducing the damages available would give prospective infringers even less concern that their conduct will be addressed. Expect Congress to consider options for providing additional guidance to courts in imposing statutory damages.
  • Registration and recordation. Some commentators have suggested that it would be beneficial for Congress to address the extent to which registration and recordation of copyright ownership is required. The CPP Report suggested consideration of a new registration system to provide additional incentives for copyright holders to register their works, in order that the public has proper notice of those rights. In addition, Congress might clarify whether the mere filing of a copyright registration is sufficient to provide standing to bring a copyright infringement claim in federal court.

    Congress may also consider ways to improve the current system for maintaining public records of copyright ownership. For example, Congress might consider imposing additional requirements on copyright owners to inform the registry of updated information regarding assignments, successors in interest, and the like.
  • Exceptions for libraries and archives. Another aspect of reform likely to be considered is Section 108 of the Copyright Act, which contains exceptions to allow libraries and archives to reproduce and distribute works under specified conditions. Many such institutions seek to broaden and/or clarify those exceptions, particularly with respect to digital preservation, conversion and lending of copyrighted materials.
  • Compulsory licensing. Current law provides a compulsory license for broadcast satellite transmissions, but this provision expires at the end of 2014. Legislation to extend that compulsory license could provide a vehicle for a more substantial reform of copyright law. In addition, the Register of Copyrights recently suggested that Congress take another look at reforming the system of compulsory licensing for music publishers under Section 115, possibly by adopting a blanket-style compulsory license similar to that provided under Section 114. This, alone, is a complex, daunting issue for which developing a consensus may prove very difficult.
  • Anti-circumvention procedures. The DMCA included anti-circumvention prohibitions to preclude consumers from unlocking the Digital Rights Management (DRM) protections on DVDs and other software, as well as cell phones, for otherwise legal uses. Congress is likely to consider whether these prohibitions go too far in light of the otherwise legal uses, particularly with respect to the issue of unlocking cell phones.
  • First sale doctrine. In the Kirtsaeng v. John Wiley & Sons decision rendered in March, the Supreme Court held that the first sale doctrine of Section 109(a) of the copyright statute applied to “gray market products,” that is, foreign-made textbooks lawfully made and purchased abroad and later imported and resold in the United States. Publishers and other content owners vigorously opposed the decision, and may attempt to have Congress legislatively address the ruling.
  • A “small claims court” for copyright? Congress previously asked the Copyright Office to study the effectiveness of the federal district court system for resolution of minor copyright disputes, and assess alternatives for resolving such claims at a lesser expense for litigants. The Copyright Office’s report is due later this year, and may spur consideration of reform proposals, including the possibility of a small claims process to provide cheaper enforcement mechanisms for independent artists. The 2013 Joint Strategic Plan on Intellectual Property Enforcement also recommended consideration of an alternate forum for enforcement of rights.

Prospects for Comprehensive Legislation

The enactment of comprehensive copyright reform will surely require a long and arduous process, as there are sharp divisions over how many of these issues should be addressed. It is worth recalling that the comprehensive revisions of 1976 were themselves the product of more than a decade of consideration and debate, and consumers are more attuned than ever to the relevance of copyright law to their daily lives. Even an issue such as orphan works reform has evaded resolution thus far, and the fierce battles over the Stop Online Piracy Act (“SOPA”) do not encourage optimism that agreement over the “next great Copyright Act,” as the Register of Copyrights has called it, will be easily reached.