Copyright in 2017: A Question of Leadership

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2016 was a year no one will soon forget. In the fall, the world was shocked by the replacement of a competent and dependable leader by a bully with no government experience and little regard for Washington politics. A feeling of powerlessness and frustration was pervasive, and many remain skeptical of an uncertain future. I’m referring of course to the United States Copyright Office and the untimely “reassignment” of Register Maria Pallante by the newly appointed Librarian of Congress Carla Hayden. Alright, maybe it wasn’t the biggest shakeup in DC in 2016, but it was epitome of an unpredictable and lively year for copyright. The reality is that whether referring to the incoming administration in the White House or the next Register of Copyrights, new leadership will define the direction of copyright law and policy in 2017.

Year in Review

The year began with the Copyright Office’s notice of inquiry signaling the beginning of a public study to evaluate the effectiveness of the Digital Millennium Copyright Act (DMCA) safe harbor provisions. So far, the study has elicited 92,400 comments—some more substantive than others—from a variety of parties, generated contentious public roundtables, and in November the Office requested additional comments to provide “an opportunity for interested parties to reply or expand upon issues raised in written comments.” What’s become clear from the overwhelming response is that the DMCA has become outdated, notice and takedown is not working, and safe harbor limitations on liability have strayed from the DMCA’s original intentions.

Music licensing also made headlines in 2016 when a federal judge rejected the Department of Justice’s interpretation of a consent decree governing the way the performance rights organization Broadcast Music Inc. (BMI) licenses its songs. The judge’s order was a strong endorsement of the rights of songwriters and publishers to control their works and bodes well for the future of performance rights organizations like BMI and ASCAP. The question over the status of pre-1972 sound recordings also took center stage as Flo & Eddie—original member of the Turtles—continued to battle with satellite radio providers over royalties for recordings made before federal copyright law offered protection. After suing in several states and winning an important victory in California, Flo & Eddie’s recordings were recently denied protection in New York when an appellate judge ruled that the state’s common law does not recognize a public performance right for sound recordings made before 1972.

In April, the Supreme Court denied cert. in Authors Guild, Inc. v. Google, Inc., leaving intact a Second Circuit ruling in favor of Google and its massive Google Books project. It was a hit for authors and copyright owners as the “significant public benefits” of Google’s misappropriation of millions of works was deemed more important than the rights of the works’ creators. Employing a reductive interpretation of fair use, the court found Google’s verbatim copying and making available of texts to be a transformative use, notwithstanding a lack of new expression, meaning, or message.

Despite this flawed interpretation of transformative fair use, the Second Circuit returned to a more sensible standard when it held that a play’s inclusion of Abbott and Costello’s famous “Who’s on First?” routine was not transformative fair use. Pointing out that fair use is premised on necessity, the Second Circuit found that the defendants lacked the required “justification to qualify for a fair use defense” because the play’s use of the routine was not for a purpose different from that for which it was created. The decision returned to the proper standard advanced in Campbell v. Acuff-Rose, accurately noting that an overly-expansive view of transformativeness threatens a copyright owner’s exclusive right to prepare derivative works.

The tricky and sometimes overlooked issue of copyright in clothing found its way to the Supreme Court in October in Star Athletica v. Varsity Brands, which involved cheerleading apparel designs and whether a feature of a useful article is protectable under section 101 of the Copyright Act. During oral arguments, lawyers for Star argued that because the designs on Varsity’s uniforms could not be conceptually separated from the apparel, and that because the designs are useful in that they identify those who wear the apparel as cheerleaders, they do not merit copyright protection. Lawyers for Varsity countered that the designs are indeed separable as they appear on other clothing such as warm-up jackets and are copyrightable pictorial, graphic features. While some Justices voiced concerns over whether granting broad protection to apparel designs would drive clothing prices up and discourage cheaper knockoffs, the Council of Fashion Designers of America filed an amicus brief arguing that finding in favor of Star would further deteriorate the already limited protection available to fashion designers. All eyes will be on a decision handed down in 2017 as a $300B industry hangs in the balance.

Looking Ahead to 2017

Two big questions loom for copyright in the New Year, and they both have to do with leadership. On January 20th, Donald Trump will be sworn in as the 45th president of the United States, and although there isn’t a set timetable, 2017 will see the appointment of a new Register of Copyrights. It remains unclear how the Trump administration will view copyright issues, and it’s difficult to speculate about the future head of the Copyright Office this early in the appointment process. But while there is some skepticism surrounding the next Register, copyright policy experts are optimistic about the Trump administration after eight years of a president who was clearly influenced by the anti-copyright agenda of tech industry giants.

In September, Carla Hayden was sworn in as the 14th Librarian of Congress. Just five weeks later, she unceremoniously removed Register of Copyrights Maria Pallante from her post after six years of dedicated service to the Copyright Office. The unexpected move stunned the copyright community and led to much speculation about the new Librarian’s motivation and suspected influences. And while many questions about the brazen act remain unanswered, what’s clear is that the Librarian is committed to doing things her way. Unfortunately, her way involves acting with disregard towards her Judiciary Committee superiors, speaking out of both sides of her mouth, and trusting the appointment process of the new Register to an Internet survey.

Somewhat surprisingly, copyright owners and creators should have more faith in the incoming Trump administration to promote policy that better respects their rights. Despite the uncertainty surrounding his administrations approach to IP, what we do know is that Trump has built a media empire in which intellectual property rights play an important role. Not only is Trump an author, television producer, and copyright owner, his Trump trademark is one of the most recognizable in the world. And as Marla Grossman and Gene Quinn point out in their recent article on the new administration’s approach to IP, Trump’s transitions team and nominees include supporters of copyright and the creative industries it empowers.

Trump’s relationship with the tech institutions that often lobby against the rights of creators and copyright owners is also much less cozy than that of the Obama administration. Companies like Google, Apple, and Microsoft that openly backed Hillary Clinton and criticized Trump during the campaign may now face an uphill struggle to gain his favor. While Trump recently hosted tech leaders for a meeting described as “genial,” the Donald has been known to hold a grudge or two. Additionally, the Electronic Frontier Foundation—one of the most vociferous anti-copyright organizations controlled by Google—recently ran an ad claiming that Trump is a threat to technology and a “free web.”

While these developments seem to bode well for copyright owners and the creative industries, it’s still too early to know just how the Trump administration will respond to the copyright challenges of 2017. Meanwhile, at the Copyright Office, the appointment of a new Register will have immediate and long-term effects on the administration of copyright law, and its imperative that the interests of creators and copyright owners are taken into account during the selection process. Hopefully Carla Hayden will employ a more rigorous vetting process than her current survey monkey questionnaire, but in the meantime, anyone that cares about the future of Copyright Office can fill out the survey here.

 
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