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Copyright Notice and Fair Use

This week is Fair Use Week, an annual celebration of the important doctrines of fair use and fair dealing. It is designed to highlight and promote the opportunities presented by fair use and fair dealing, celebrate successful stories, and explain these doctrines.

*This is a guest blog post by Jonathan Band, policybandwidth*

The absence of a copyright notice on content posted by its author on the Internet should weigh in favor of fair use of that content, by libraries and other users, under the second fair use factor.

Until the United States joined the Berne Convention in 1989, a work could fall into the public domain if it was published without a copyright notice. The notice had to include the copyright symbol, the name of the copyright owner, and the year of first publication. The Berne Convention prohibits “formalities” as a condition for protection, so once the United States joined the Berne Convention, it eliminated the notice requirement.

However, the Copyright Act still provides an incentive for including a copyright notice. Under 17 U.S.C. § 401(d), if a copyright owner applies a copyright notice to his work, no evidentiary weight may be given to a defendant’s claim that he is an innocent infringer in mitigation of damages. In other words, if the copyright owner applied a notice, a defendant can’t claim the infringement was innocent because he or she “was not aware, and had no reason to believe, that his or her acts constituted an infringement….” This means that the defendant can’t seek reduction of the statutory damages minimum from $750 to $200 per work infringed.

The Copyright Act does not set forth what impact copyright notice should have on the fair use analysis. Nor, as far as I am aware, does the fair use case law. But a powerful argument can be made that the absence of a copyright notice should weigh in favor of fair use under the second fair use factor.

The second fair use factor—the nature of the copyrighted work—receives little attention by courts. They typically ask whether the work is published or unpublished, and whether it is a work of fact or fiction. Robert Kasunic has argued that courts should take a more nuanced view of the second factor. In particular, Kasunic contends that the second factor should be understood to ask “whether copyright might have reasonably encouraged or provided an incentive for an author to create the work.” Kasunic adds that “once we understand the work and the reasonable and customary expectations of authors for that type of material, we can better understand how various uses might affect the incentive to create such works.” Significantly, the starting point for Kasunic’s analysis is Judge Leval’s famous law review article Toward a Fair Use Standard. With respect to the second factor, Kasunic explains that Judge Leval “recognized the need to distinguish between authors of works for whom copyright provided an incentive to create and those authors who were incidental beneficiaries of copyright.”

It is hard to imagine a clearer indication of an author’s expectations concerning her work—whether she intends to use copyright to control subsequent uses of her work or instead is an “incidental beneficiary” of copyright—than whether she attached a copyright notice when she published it. In many situations, a user could reasonably assume that by omitting notice, the author was signaling that she did not expect to rely on copyright to control reproduction and distribution of the work. In such situations, the author’s failure to place a notice on the work should weigh in favor of fair use under the second factor.

What are these situations? Daily, millions of photographs, videos, blogs, songs and other works are posted on the Internet. Many (if not most) of these works are posted without copyright notice. The terms of service of large social media platforms such as Facebook specify that users agree that everyone may use their content published on the platform. But vast quantities of content are posted on other websites that do not have such terms of service. People repost these works without requesting the author’s permission and without incurring the author’s opposition.

In the event the author of such a work did challenge a reuse, fair use is the legal theory that would best support the lawfulness of the reuse. And the absence of copyright notice should buttress the fair use calculus under the second factor. A user could reasonably interpret the absence of notice as a signal that the author did not expect to rely on copyright to control the reproduction and distribution of the work—that the author is just an incidental beneficiary of copyright. Of course, this is just one element of one factor, and would not be dispositive of the fair use question. And if there were indicia that the work was posted on the website without the author’s authorization, then the absence of notice should have no weight.

Factoring the absence of notice into the fair use calculus could be of particular importance to libraries interested in harvesting content posted on websites. Although the existing fair use case law is very strong for the preservation of this content and its inclusion in search databases, the jurisprudence is less developed with respect to providing access to full text or full-sized images. The argument that the author’s failure to include notice tilts the second factor in favor of a fair use determination should give libraries additional comfort as they decide what to do with web content they have collected.

Finding Fair Use in Unexpected Places

We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

Today’s theme is: 21st Century Creators: Copyright law should account for the interests of all creators, not just those backed by traditional copyright industries. YouTube creators, remixers, fan artists and independent musicians (among others) are all part of the community of creators that encourage cultural progress and innovation.

*This is a guest blog post by Jonathan Band, policybandwidth*

og-copyrightweek

In December 2016, strong endorsements of fair use appeared in somewhat unexpected places.

First, the Joint Strategic Plan (“JSP”) released by the Office of the Intellectual Property Enforcement Coordinator on December 12, 2016, stated that nothing in the JSP

should be interpreted as limiting the scope of exceptions and limitations, such as fair use, under U.S. copyright law. To the contrary, the basic principles that have permitted the Internet to thrive must be safeguarded, and the Strategic Plan expressly recognizes and celebrates advancements in technology. The way people use and access content – which has led to new and innovative uses of media (e.g., remixes and mashups involving music, video and the visual arts), and fair use, for example – will undoubtedly continue to evolve. We must work to foster creativity, understanding the role of exceptions and limitations as not only part of our body of laws, but as an important part of our culture. Indeed, it is the combination of strong copyright rights with a balance between the protection of rights and exceptions and limitations that encourages creativity, promotes innovation, and ensures our freedom of speech and creative expression are respected.

The JSP concludes this discussion by observing that “IP enforcement options must be crafted to allow for effective measures against actors that unlawfully prey on the works of rights holders, while ensuring that enforcement activities do not affect lawful activity.”

Second, the Copyright Office, in its December 15, 2016 report on software enabled consumer products, noted that “courts repeatedly have used the fair use doctrine to permit copying necessary to enable the creation of interoperable software products.” In support of this declaration, the report discussed the decisions in Atari v. Nintendo, Sega v. Accolade, and Sony v. Connectix, where the courts found that fair use excused the copying performed during the course of reverse engineering. The report added that “the case law generally holds that intermediate copying for purposes of reverse engineering and creation of interoperable products is, in most cases, a fair use.”

The report concluded its discussion of fair use by stating that “proper application of these principles should ensure that copyright law preserves the ability to create interoperable products and services.” In support of this statement, the report quoted the Ninth Circuit in Sega v. Accolade stating that “an attempt to monopolize the market by making it impossible for others to compete runs counter to the statutory purpose of promoting creative expression and cannot constitute a strong equitable basis for resisting the invocation of the fair use doctrine.”

Third, in an amicus brief it filed in Georgia State University electronic reserves case on December 9, 2016, the Copyright Alliance stated that it “is a staunch supporter of fair use principles, which allow for copyright to achieve it purpose without undermining the incentive to create. Its members regularly rely on these principles to create new, expressive, transformative works, consistent with the Copyright Act’s inherent purpose.”

Fair use is often referred to as a “user’s right.” But as these statements correctly indicate, fair use is a creator’s right as well. Fair use is essential to the creation of new works in all forms, including books, films, music, and software.

A New Approach to Copyright Exceptions and Limitations

*Guest post by Jonathan Band, policybandwidth*

Any discussion with policymakers or rightsholders concerning the possible adoption of new copyright exceptions and limitations invariably centers on how to make sure that the exception is not abused. This leads to lengthy negotiations resulting in complex, difficult-to-use provisions that resemble the tax code. This pattern has been repeated in connection to the exceptions to section 1201 of the Digital Millennium Copyright Act, the TEACH Act for distance education (17 U.S.C. § 110(2)), the Chafee Amendment for the print disabled (17 U.S.C. § 121), and orphan works legislation, to name just a few of the more salient examples.

It’s time for this pattern to be broken. Rightsholders have nothing to fear from exceptions and their possible abuse. Infringement deriving from abuse of exceptions likely would be a tiny fraction of the overall incidence of infringement. At the same time, preventing the public benefits that flow from exceptions undermines the purpose of the copyright system.

Section 108

Unfortunately, this pattern of developing overly restrictive exceptions may soon repeat itself in the context of the exception for libraries and archives in 17 U.S.C. § 108. In 2005, the Library of Congress and the Copyright Office convened a study group consisting of librarians and publishers to consider how to update section 108 for the digital age. After three contentious years, the study group issued a report recommending several possible amendments to section 108, but could not reach consensus on the details of those amendments, nor on how to handle other important issues such as copies for users or license restrictions.

Notwithstanding this lack of consensus, and over the objection of most libraries and archives, the Copyright Office has decided to urge Congress to revise section 108. This past June, the Copyright Office issued a notice of inquiry stating that it seeks “to finalize its legislative recommendation” concerning a “re-drafting” of section 108. In meetings with stakeholders pursuant to this notice of inquiry, the Copyright Office stated that it hopes to complete its legislative recommendation and transmit it to Congress this fall.

Although the Copyright Office hopes to make section 108 simpler and more user-friendly, the Office’s likely concern about “leakage” almost certainly guarantees that the re-drafted section 108 will be complicated and not understandable by librarians without law degrees. And even if the Office somehow manages to produce a streamlined and comprehensible proposal, the rightsholders can be expected to insist on changes to eliminate possible abuse that will inevitably make the proposal more complex.

There is no doubt that digital networks have facilitated copyright infringement. And while the adverse impact of this infringement probably has been overstated by rightsholders, it is perfectly legitimate for rightsholders to take reasonable measures to address infringement. The operative word here is reasonable. And making exceptions for libraries, educational institutions, or the print disabled difficult to use in order to reduce potential leakage is not reasonable.

There are approximately 200 million smartphone users in the United States, and 2 billion smartphone users worldwide. Each smartphone has the capability of reproducing entire copyrighted works and uploading them to the Internet, where they can be disseminated globally. In a world where this technological capability is literally at the fingertips of so many users, what possible difference could it make if there is a small amount of leakage from a library?

Consider the following examples. Under existing section 108(c), a library is permitted to make a replacement copy of a published work that is damaged or lost if the library determines that an unused replacement cannot be obtained at a fair price. While the library may circulate a physical replacement copy, it cannot make a copy available in a digital format outside the library premises. The Section 108 study group recommended modifying the prohibition on off-site lending of digital replacement copies only to allow the lending of a copy reproduced in a digital physical medium if the library’s original copy was also in a digital physical medium. In other words, if the library owned an audiobook CD that was deteriorating, the study group proposal would allow the library to make and lend a replacement CD, but it would not be able to stream the digital file to a user. Similarly, if its original copy wasn’t digital, the library would not be able to make a digital copy viewable outside of the library premises.

The publishers in the Section 108 study group insisted on these restrictions because they were afraid that the digital files would be retransmitted on the Internet. This concern overlooks four facts. First, the exception would only be available if a replacement copy couldn’t be purchased, i.e., the work was out of print so there would be no market harm, even if unlawful retransmission occurred. Second, unlawful copies of any work for which there is current and likely future demand are already available online, so how much incremental harm could be caused by unlawful retransmission of the library’s replacement copy? Third, technological measures exist to make retransmission difficult. Fourth, as fair use jurisprudence has evolved, making the digital copy available outside the library premises with appropriate technological protections likely would be a fair use. In other words, the library could probably engage in the activity anyway under a fair use theory, so why not save the library the burden of performing the fair use analysis and simply permit it under an explicit exception?

A similar analysis could be performed for many of the study group’s other recommendations. For example, the proposed exception for the archiving of publicly accessible websites was unnecessarily regulatory, especially considering that commercial entities such as Google and Microsoft routinely engage in this activity under a fair use theory.

It is the awareness that section 108 reform will be extremely contentious and unlikely to produce positive results that has led to library opposition to the Copyright Office’s initiative.

Section 1201 Rulemaking

Likewise, the exemptions that the Library of Congress has adopted during the course of the triennial rulemaking under section 1201 of the DMCA reflect an unhealthy obsession with possible abuse. The current exemption, adopted in 2015, permits circumvention of the technological protections on lawfully acquired motion pictures by college and university faculty and students, for use of short portions for educational purposes “in film studies or other courses requiring close analysis of film and media excerpts…where the person engaging in circumvention reasonably believes that screen-capture software or other non-circumventing alternatives are unable to produce the required level of high-quality content.” Thus, an instructor or a student may circumvent only after determining that no alternative to circumvention will produce the “level of high-quality content.” This would necessitate that the instructor or student determine: 1) whether the course requires “close analysis of film and media excerpts;” 2) what level of quality excerpt she needs to satisfy her educational purpose; 3) what are the various available alternatives to circumvention; and 4) whether any of these alternatives will produce the required level of quality excerpt. In the K-12 context, this exemption is available only to instructors, not students.

The Copyright Office designed an exemption that requires educational users to jump through many hoops so as to ensure that the exemption is not abused. At the insistence of rightsholders, the Copyright Office evidently considers circumvention to be a highly dangerous activity that leaves films vulnerable to widespread infringement, and thus must be regulated carefully. However, there is no evidence that any infringement resulted from earlier iterations of the exemption that were more straightforward. Further, the software necessary to circumvent the technological protection measures on DVDs or other storage media is widely available on the Internet and easy to use. Moreover, infringing copies of most films can be found on the Internet soon after release. Thus, a simple, broad circumvention exemption for any educational use would not harm the market for the films in any meaningful way. (At one time, some film studios planned to create a market for licensing film clips to educational institutions, but the enormous number of works educators need to access made development of such a market infeasible.)

A New Approach

Rightsholders’ frustration with their loss of control over their content is understandable. It also is understandable that this frustration would fuel a desire to exercise control wherever they can, even though it makes no difference to their bottom line.

Although the rightsholders’ frustration is understandable, it is bad copyright policy to impose the costs of overly restrictive exceptions on libraries and educational institutions where there is no offsetting benefit to rightsholders or society at large. As the Supreme Court recently stated in Kirtsaeng v. Wiley, “copyright law ultimately serves the purpose of enriching the general public through access to creative works.” The Supreme Court then explained that “the statute achieves that end by striking a balance between two subsidiary aims: encouraging and rewarding authors’ creations while enabling others to build on that work.” Exceptions and limitations are the means to achieve the aim of enabling others to build on a work.

Rather than fight reasonable adjustments to Title 17 to accommodate digital technology, rightsholders should embrace them. This not only would better meet the objectives of the copyright system, it also would be in the long run best interest of rightsholders. Instead of advocating for narrow section 1201 exemptions for educational uses of film clips, studios should encourage the broadest possible use of films in classrooms. Doing so would more deeply entrench the role of films in American culture and society.

Similarly, publishers should facilitate libraries making the robust use of their collections. Libraries spend $4 billion a year acquiring books and other materials. The more access libraries are able to provide to their collections—the more libraries are used—the easier it is for libraries to secure the budget they need to purchase more materials. Additionally, greater access to written materials encourages literacy, which in turn leads to greater demand for written materials. Finally, for many users, the alternative to accessing materials through libraries would not be to purchase the materials, but to find infringing copies on the Internet.

The same logic applies to remixes and fan fiction. More enlightened rightsholders have recognized that these activities deepen fan loyalty and result in increased sales. Additionally, these activities train the next generation of artists. And of course, reasonable exceptions enhance the credibility of the copyright system generality.

In short, rightsholders should stop treating libraries and educational institutions—their biggest customers—as their copyright enemies, and instead assist them in promoting the creation and dissemination of culture by supporting the broadest possible copyright exceptions. If rightsholders can’t change direction on their own, policymakers in Congress, the Copyright Office, and the Executive Branch should lead the way. But until rightsholders and policymakers change their approach to exceptions, attempts to fashion new exceptions will largely be exercises in futility.

 

Assessing the DMCA’s Notice-and-Takedown Regime

*Guest post by Jonathan Band, policybandwidth*

There is an escalating war of words between supporters and detractors of the notice-and-takedown regime of the Digital Millennium Copyright Act (DMCA). The content providers argue that the notice-and-takedown system is broken and advocate for its replacement with a notice-and-staydown system. The Internet industry responds that notice-and-takedown is essential to the vibrancy of the Internet, and that the regime demanded by the content providers would require costly and ineffective filtering and monitoring.

This debate about whether the legislative compromise reflected by the notice-and–takedown system still works misses the larger context in which Congress created the notice-and-takedown system and in which the system must be evaluated. Congress enacted the notice-and-takedown system in 1998 as one title of the much broader DMCA. This broader statute, in a separate title, established prohibitions on the circumvention of technological protection measures. These two titles were adopted together to create a balanced approach to copyright enforcement in the Internet environment. Thus, the effectiveness–and fairness–of the notice-and-takedown system should not be considered in isolation, but in relation to the effectiveness and fairness of the anti-circumvention provisions.

The Latest Round of the Debate

For years the content providers have complained about various provisions of the DMCA’s safe harbors for Internet service providers, but their primary target has been the notice-and-takedown system codified at 17 U.S.C. § 512(c) and (d). The latest round of attack started with a full-page ad on June 20, 2016, in the Washington D.C. newspapers The Hill, Politico, and Roll Call placed by music industry organizations such as the Recording Industry Association of America and well-known recording artists including Taylor Swift and Paul McCartney. The ad asserted that the DMCA “is broken and no longer works for creators.” It claimed that the DMCA “was written and passed in an era that is technologically out-of-date compared to the era in which we live.” The ad did not specify precisely why “the DMCA simply doesn’t work,” but observed that “it’s impossible for tens of thousands of individual songwriters and artists to muster the resources necessary to comply with its application.” Based on earlier statements by the RIAA and other music industry associations, this presumably was an allusion to the burden of copyright owners sending notices to a platform every time a user uploads infringing content—a burden that would be alleviated by a notice-and-staydown regime. The ad further stated that “the tech companies who benefit from the DMCA were not the intended protectorate when it was signed into law nearly two decades ago.

The ad provoked a quick response from the tech sector. Matt Schruers with the Computer & Communications Industry Association noted that RIAA was asking Congress “to upend one of the legal cornerstones of the Internet.” Schruers observed that the DMCA’s safe harbors “allowed the Internet to become what it is today—a worldwide democratizing platform for communication, creativity, and commerce.” Schruers stated tens of thousands of Internet platforms relied on the safe harbors to provide millions of creators a cost-free means of reaching a worldwide audience without the interference of traditional gatekeepers such as record labels, movie studios, or book publishers.

Michael Beckerman with the Internet Association similarly asserted that “If you love the Internet, you should thank the DMCA.” He explained that Internet companies should not be responsible for “policing every single piece of online content” because they “don’t have access to constantly changing licensing information, nor are they the appropriate party to make legal judgments about whether content qualifies as fair use….” He added that many Internet companies voluntarily employ “DMCA-plus” programs to provide greater flexibility to copyright owners to address infringing activity.

Neil Fried with the Motion Picture Association of America replied by arguing that “Congress did not intend the DMCA to create a relentless game of Whac-A-Mole.” Fried further complained that “content creators must still endlessly notify technology companies of the presence of unauthorized content, even when it is the same parties posting the same material.” However, unlike the RIAA and the other music industry associations, Fried did not call on Congress to amend Section 512. Instead, it urged the Internet companies to “engage voluntarily and collaboratively with the creative community on solutions that work for everyone….” Fried asked for “better help from technology companies to steer traffic away from websites dedicated to theft….” Fried provided “automatically removing duplicative copies of the same unauthorized content” as an example of how effective notice and staydown could be achieved.

What’s Missing From This Discussion?

The Internet Association’s Michael Beckerman stated that “the bargain” at the heart of the DMCA “is a simple: rightsholders have a mechanism to address infringement without engaging in a lengthy and expensive battle, and internet platforms that respond quickly to remove infringing content are held harmless for the actions of their users.” MPAA’s Fried referred to this bargain as the DMCA’s “grand design.” And CCIA’s Matt Schruers described it as “a compromise between copyright holders and online services.”

Judge Leval, in his recent decision in Capitol Records v. Vimeo, agreed with this characterization of Section 512 as a compromise:

what Congress intended in passing § 512(c) was to strike a compromise under which, in return for the obligation to take down infringing works promptly on receipt of notice of infringement from the owner, Internet service providers would be relieved of liability for user-posted infringements of which they were unaware, as well as of the obligation to scour matter posted on their services to ensure against copyright infringement. The purpose of the compromise was to make economically feasible the provision of valuable Internet services while expanding protections of the interests of copyright owners through the new notice-and-takedown provision.

But the compromise embodied by Section 512 is part of a larger compromise embodied by titles I and II of the DMCA. Title II created Section 512. Title I implemented the World Intellectual Property Organization’s Copyright Treaty and Performances and Phonograms Treaty by creating prohibitions on the circumvention of technological protection measures and the removal of copyright management information. These provisions now constitute Chapter 12 of title 17, including the controversial Section 1201.

Title I and title II originally were introduced as separate bills (the WIPO Copyright and Performances and Phonograms Treaties Implementation Act and the Online Copyright Infringement Liability Limitation Act, respectively). The WIPO implementation bill was supported by the content industry and opposed by sectors of the technology industry. The safe harbor bill was supported by the online service providers and opposed by the content industry. In the face of this opposition, both bills stalled. Senator Orrin Hatch, then Chairman of the Senate Judiciary Committee, in a bold legislative move, merged the two bills into one. He calculated that the content industry would be willing to accept the safe harbors in exchange for WIPO implementation. This calculation proved correct.

The content providers believe that Section 1201 has benefitted them enormously. In response to a notice of inquiry recently issued by the Copyright Office concerning Section 1201, the Association of American Publishers, the Motion Picture Association of America, and the Recording Industry Association of America filed joint comments stating that “the protections of Chapter 12 have enabled an enormous variety of flexible, legitimate digital business models to emerge and thrive….” BSA|The Software Alliance, the Copyright Alliance, the Software and Information Industry Association, the Entertainment Software Association, and Microsoft similarly asserted that Section 1201 has facilitated the secure online distribution of content.

In other words, the content providers applaud title I of the DMCA (Section 1201) as much as they complain about title II of the DMCA (Section 512). This is not surprising. Although Congress attempted to achieve a degree of balance within each title—although each title contains internal compromises–at the end of the day, the grand bargain of the DMCA was the marriage of the WIPO implementation and the safe harbor bills. According to the content providers, title I has “enabled an enormous variety of flexible, legitimate digital business modes to emerge and thrive.” And according to the Internet industry, title II has “allowed the Internet to become what it is today—a worldwide democratizing platform for communication, creativity, and commerce.”

Given the tradeoffs that Congress made in assembling the DMCA, policymakers should not assess the impact of any title in isolation. In particular, any adverse impact content providers claim they suffer on account of the safe harbors in Section 512 must be weighed against the benefit they receive from Section 1201 (which has had an adverse impact on other stakeholders).

ICYMI: District Court Denies Oracle’s Move to Overturn Fair Use Ruling in Favor of Google

On May 26, 2016, a jury ruled in favor of Google’s use of Java’s API in its Android system, finding that the inclusion of the code was fair use.  Oracle filed a motion for judgment as a matter of law, arguing that no reasonable jury could have found against Oracle.  Last week, the district court judge denied Oracle’s motion.

Jonathan Band has a really great analysis of the district court’s twenty page order applying fair use to the case on the DisCo Project blog: “Sanity Prevails Again, Part II: The District Court Leaves the Oracle v. Google Fair Use Verdict In Place.”

Thanks, But No Thanks

*This week is Fair Use Week, an annual celebration of the important doctrines of fair use and fair dealing. It is designed to highlight and promote the opportunities presented by fair use and fair dealing, celebrate successful stories, and explain these doctrines.

This post is brought to you by guest blogger, Jonathan Band of policybandwidth*

Over the past decade, policymakers on both sides of the Atlantic have devoted significant attention to finding ways to permit the use of orphan works: works whose copyright owners are difficult to identify or locate. Library associations in both Europe and the United States initially supported these efforts strongly. In Europe, these efforts culminated in the adoption of an Orphan Works Directive in 2012. In the United States, by contrast, legislation stalled in 2008. Although the U.S. Copyright Office continues to push for orphan works legislation, U.S. library associations no longer seek such relief. This is due to changes in the copyright legal landscape, particularly the evolving case law concerning fair use. This paper explores the different trajectories of orphan works legislation in the EU and the United States, with special emphasis on how U.S. libraries changed their position in response to legal developments on the ground.

The full paper is available here.

USPTO White Paper on Remixes, First Sale, and Statutory Damages

*Guest post by Jonathan Band, policybandwidth*

Today the Department of Commerce Internet Policy Task Force today released its White Paper on Remixes, First Sale, and Statutory Damages. (This follows on from the Green Paper issued in 2013.) The Task Force has proposed several significant changes to statutory damages. It recommends that the statutory damages provision be amended: 1) to incorporate a list of factors for courts and juries to consider when determining the amount of a statutory damages award; 2) to expand the eligibility for lower innocent infringement awards when the copyright owner uses a copyright notice; and 3) to give courts discretion to assess statutory damages other than on a strict per-work basis in cases involving non-willful secondary infringement for online services offering a large number of works. These changes, if adopted, would make the statutory damages framework much less burdensome. The Task Force does not recommend any statutory changes relating to remixes or digital first sale, but it proposes multi-stakeholder negotiations related to these issues. The White Paper contains numerous references to comments submitted by the Library Copyright Alliance (which consists of ARL, ALA, and ACRL) and individual libraries.

The message at the beginning of the White Paper from Commerce Secretary Penny Pritzker states that “a healthy copyright system strikes important balances between rights and exceptions–delineating what is protectable and what is not, determining which types of uses require permission or payment, and establishing appropriate frameworks to effectively protect rights and foster creativity and innovation. These balances must be reviewed regularly to ensure they continue to function well as a foundation for America’s culture and economy.”

Digital First Sale. The Task Force does not recommend statutory amendment to facilitate digital first sale. It says that it was hard to measure the extent of consumer loss resulting from the absence of a digital first sale provision. Further, it feels that the market has responded with business models such as providing access to large quantities of digital works, e.g., Netflix. At the same time, digital first sale could cause harm to the primary market. Accordingly, the Task Force sees no need to amend the Act at this time.

However, the Task Force notes the problems libraries had experienced with the lending of e-books. The Task Force observes that the situation appears to be improving, and that government intervention could interfere with the development of innovative solutions. However, “if over time it becomes apparent that libraries have been unable to appropriately serve their patrons due to overly restrictive terms imposed by publishers, further action may be advisable (such as convening library and publisher stakeholders to develop best practices, or amending the Copyright Act).” Similarly, the Task Force recognizes that publishers might interfere with library preservation. This could be addressed, if necessary, in the context of updating section 108.

Remixes. The White Paper does not recommend any statutory changes to facilitate the creation of remixes. The Task Force recognizes that fair use is the central mechanism for permitting remixes, and believes that fair use performs this job well. It rejects compulsory licensing schemes as unnecessary. At the same time, the Task Force has suggestions for making it easier for remixers to understand what uses are fair and to obtain a license when they wish to do so. While recognizing the role of single sector best practices (e.g., the best practices organized by AU), it expresses a preference for negotiated guidelines for remixing. Although acknowledging the challenge of different stakeholders reaching an agreement on guidelines, it believes they are achievable if the scope of any guideline is narrow enough.

The Task Force also encourages the development of voluntary licensing systems. It acknowledges the concern the Library Copyright Alliance raised that licensing systems might undermine fair use, but disagrees with that assessment in a helpful way. In essence, it argues that the fourth fair use factor receives less weight in cases of transformative uses. Thus, the existence of a licensing system should not weaken a remixer’s fair use argument.

The Task Force recognizes that users would benefit from clarification of the terms of EULAs, and recommends a multi-stakeholder process for better communicating terms to the public (e.g., developing standardized notices or alternatives to a “buy” button).

Statutory Damages. As noted above, the White Paper’s most important contribution is in the area of statutory damages. The Task Force recognizes that the existing framework can be applied inconsistently because courts and juries have insufficient guidance. Moreover, the potential of draconian damages deters development of innovative technologies. At the same time, the Task Force does not seem convinced that there was a copyright troll problem.

The Task Force’s first proposal is to codify model jury instructions concerning statutory damages adopted by several circuits. The instructions include a list of factors to consider when determining the amount of a statutory damages award. These factors would help insure that the damages award is related to the actual harm and that the defendant’s state of mind and financial condition are given appropriate weight. These factors would improve consistency and transparency in the application of statutory damages.

The second proposal is to expand the eligibility for lower innocent infringement awards ($200 as opposed to $750). Currently, under sections 401(d) and 402(d), the innocent infringer defense is not available when the copyright owner places a copyright notice on the work. The Task Force proposes eliminating the preclusive effect of notice on the innocent infringement defense. At the same time, the Task Force rejects the Library Copyright Alliance proposal to expand the remission of damages when a library or archives has a good faith belief that its copying was a fair use. Currently, this provision applies only to the reproduction right, not the other exclusive rights. The Task Force believes that the libraries had not demonstrated need for this amendment. If the problem becomes more evident, the Task Force suggests addressing it in the context of section 108 reform.

The third proposal is to give courts discretion to assess statutory damages other than on a strict per-work basis in cases involving non-willful secondary infringement for online services offering a large number of works. This would reduce the threat statutory damages pose to innovative Internet companies.

Finally, the Task Force expresses support for the establishment of a small claims court for copyright infringement. The Task Force evidently believes that such a court could benefit defendants by diverting smaller cases away from a venue where significant statutory damages can be assessed.

Edited: January 28, 5:00pm

Fair Use in a Day in a Life of a Legislative Assistant

*This week is Fair Use Week, an annual celebration of the important doctrines of fair use and fair dealing. It is designed to highlight and promote the opportunities presented by fair use and fair dealing, celebrate successful stories, and explain these doctrines.*  

While we are celebrating Fair Use Week from February 23-27, every week is fair use week (in fact, every day is fair use day).  This important doctrine is critical to the ability to teach, learn, share information and use every day technologies.  Fair uses are all around us.

Earlier this week, Fred von Lohmann explained how fair use enables every day technology.  Today, Jonathan Band gives a sample day in the life of a legislative assistant, showing just how often fair use is employed in a daily basis.  Read all about Fair Use in a Day in a Life of a Legislative Assistant and visit fairuseweek.org for other great resources!

Fair and Balanced Result in New Jersey Media Group v. Fox News Network

*This week is Fair Use Week, an annual celebration of the important doctrines of fair use and fair dealing. It is designed to highlight and promote the opportunities presented by fair use and fair dealing, celebrate successful stories, and explain these doctrines.  

Today’s blog post is brought to you by guest blogger, Jonathan Band.  Cross-posted to fairuseweek.org *

Large copyright owners oppose expansive applications of fair use except, of course, when they are sued for copyright infringement. In recent years, the National Football League, Reed Elsevier, and Sony Pictures have all vigorously raised fair use in infringement cases in which they were defendants. As a proponent of strong fair use rights, I naturally want fair use to prevail whenever it is asserted. Nonetheless, as a long time soldier in the trenches of the copyright wars, I must confess that I derive a certain satisfaction from courts rejecting fair use defenses raised by large media companies. But putting aside these petty personal feelings, the mere assertion of fair use by large copyright owners is helpful in the advocacy battles surrounding fair use; it underscores how essential fair use is to the proper functioning of the copyright system. Even more important, the rejection of fair use claims in appropriate cases demonstrates that fair use has not run amok and that the courts are not out of control. (In this vein see my post How Fair Use Prevailed in the Harry Potter Case.)

Which brings us to the recent decision of a federal district court in New York denying a motion for summary judgment filed by Fox News in a copyright infringement suit brought against it by the New Jersey Media Group (NJMG). Thomas Franklin, a photojournalist employed by NJMG, captured an image of three firemen raising an American flag at the site of World Trade Center just hours after the attack on September 11, 2001. NJMG published the image the next day on the front page of one of its newspapers, and in short order the image was licensed by many other publications for over $1 million and became one of the more recognizable images relating to 9/11. At some point, an unknown person posted on the Internet the 9/11 firefighter photograph juxtaposed with the iconic World War II photograph of Marines raising the American flag at Iwo Jima. A production assistant on the Fox News program Justice with Judge Jeanine found this combined 9/11-World War II image and posted it on the program’s Facebook page on the twelfth anniversary of 9/11 (September 11, 2013) with phrase #neverforget. After NJMG sued for copyright infringement, Fox News moved for summary judgment, arguing that its posting of the 9/11 photograph was permitted under the fair use doctrine.

On February 10, 2015, Federal District Court Judge Ramos of the Southern District of New York denied Fox News’ motion. Much of the decision centered on whether the use was transformative under the first fair use factor (purpose and character of the use). Fox News argued that its use was transformative because the connection it drew between 9/11 and World War II was commentary. Further, the addition of the phrase #neverforget signaled Fox News’ participation in the ongoing global discussion of 9/11. While Franklin’s purpose in photographing the image was to report the news of the day, Fox News’ use was designed to commemorate 9/11 and link the heroic acts of the first responders that day to those of the Marines in World War II.

The court rejected Fox News’ contentions. First, it found that the various physical transformations Fox made, such as adding the #neverforget phrase or cropping the image, were not sufficient to merit protection as fair use, particularly when compared to the more extensive physical transformations in the appropriation art cases Cariou v. Prince or Blanch v. Koons.

Additionally, while the court acknowledged that the combined image of the 9/11 photograph and the Iwo Jima photograph altered the content and message of the original 9/11 photograph, it did so “only minimally.” It certainly didn’t present “an entirely different aesthetic” from the 9/11 photograph. Further, the court doubted “whether the commentary Fox News wished to convey created anything new at all, much less anything transformative.”

At this point, the court went on a bit of a detour. The court noted that this was a secondary use of a secondary use. The combined image was not original to Fox: “some other person first thought to combine the two photographs.” Moreover, the phrase “#neverforget” was ubiquitous on social media that day. “Thus Fox News’ commentary, if such it was, merely amounted to exclaiming ‘Me too.’” Professor Rebecca Tushnet of the Georgetown University Law Center has criticized this aspect of the decision, noting that “if something has been transformed enough to create a new meaning or message such that the initial speaker is making a fair use, then the transformativeness factor must weigh in exactly the same way for a publisher or republisher.” In other words, if the creation of the combined work was a transformative use because of the commentary it made, then Fox’s republication was also fair use because it was making the same commentary. Notwithstanding the court’s questionable reasoning on this point, the court’s underlying skepticism about whether the combined image was sufficiently transformative in the first place was well founded.

The court next considered whether Fox News sought to profit from its use of the work. Fox argued that its use was not commercial because it did not capture any revenue as a direct consequence of its use. NJMG, on the other hand, asserted that Fox used the image mainly for the purpose of promoting the Justice with Judge Jeanine show. The court concluded that because there was a question of material fact as to whether Fox posted the image for the expressive purpose of commenting on 9/11 or for the commercial purpose of promoting the program, it could not decide this issue as a matter of law on summary judgment.

The court had little difficulty concluding that the fourth fair use factor, the effect of the use on the market for the work, weighed against fair use. The court reiterated that the use was not transformative, but “instead relies upon the Work’s original subjects and setting to retain the Work’s historical meaning.” This historical meaning has allowed NJMG to receive more than $1 million in licensing revenue. The court stressed that NJMG maintains a program for licensing the photograph to media entities for precisely the sort of editorial purpose Fox claims it intended to make here. The court observed that “the continued demand for the Work for editorial use suggests that the purported use for commentary here was…paradigmatic of a primary market for the photograph.”

In its defense, Fox argued that there was no evidence that NJMG actually lost any licensing revenue as a result of the use, or that Fox was trying to usurp the market for the work. The court responded that because the editorial use Fox claims it intended to make was a primary market for the work, Fox’s use “poses a very real danger that other such media organizations will forgo licensing fees for the Work and instead opt to use the Combined Image at no cost.” Thus, the danger of Fox’s use went far beyond the one-time loss of revenue.

Aside from the “secondary use of a secondary use” issue, there is nothing particularly controversial or harmful about the court’s analysis of the first and fourth factors. Indeed, Fox’s contention that its use was transformative and didn’t affect the market for the work was a bit of a stretch.

Meanwhile, the court’s analysis of the second factor, the nature of the work, could prove helpful in future fair use cases. Fox argued that the second factor tilted toward fair use because the work was factual in nature. Fox claimed that NJMG “cannot claim ownership in the firefighter’s actions, the expressions on their faces, their ashen uniforms, or the American flag.” NJMG responded that the photograph was a “stunning example of photojournalism” that involved many creative choices, including the orientation of the photograph and the selection of a specific lens.” The court agreed with Fox that this factor weighed in favor of fair use: “There can be no dispute that the Work is a non-fictional rendering of an event of utmost historical importance, which Franklin created during the course of his duties as a news photographer. Franklin did not create the scene or stage his subjects—to the contrary, he plainly acknowledged that the photograph ‘just happened.’” Although Franklin exhibited great artistry, at the end of the day the image was photojournalism, which the court found categorically favored fair use.

The case will now proceed to trial. Fox will have the opportunity to present additional evidence on the purpose of its use, and this may be sufficient to change the overall fair use calculus in its favor.

Nevertheless, Fox has been having a rough time in fair use cases in the Southern District of New York. Last year, it sued TVEyes, a company that created a search engine for news broadcasts. A different judge, Judge Hellerstein, found that fair use permitted TVEyes to copy Fox News’ broadcasts into its search database. Perhaps Judge Ramos found Fox’s vigorous assertion of fair use in the NJMG case to be inconsistent with its vigorous opposition to fair use in the TVEyes case. Regardless, the courts reached the right result in both cases.