Tag Archives: Legislation

SOPA and PROTECT IP: Is the Sky Falling on the Internet?

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By Amber Rose and Barry Shrum

If you’ve cruised the net or checked out your local news any time within the last few months, chances are you’ve heard rumors currently sweeping the United States about two pieces of proposed legislation : H.R. 3261 entitled the Stop Online Piracy Act (“SOPA”) and S. 968 entitled the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (“Protect IP”).

Senator Patrick Leahy sponsored the Protect IP Act, proposing it to the full Senate on May 12, 2011.  SOPA is the House of Representatives’ equivalent. The government is promoting these acts as a way to decrease online piracy, something that is costs the creative industries millions of dollars each year.  The Record Industry Association of America, representing the music sector, has estimated that global music piracy causes $12.5 billion of economic losses every year, 71,000+ lost U.S. jobs, $2.7 billion in wage earnings, $422 million in lost tax revenues, $291 million in personal income tax and $131 million in lost corporate income and production taxes.  Even these calculations create volumes of debate among the Internet blogosphere as to their methodology and accuracy.  Most every credible source, however, agrees that piracy causes imagesignificant economic loss to the creative community.

After years of fighting the piracy in courts, most website that make infringing materials available have moved their operations offshore in jurisdictions where the long arm of the law does not reach.  The Protect IP Act addresses this jurisdictional problem by giving the government the ability to established a list of “rogue websites dedicated to infringing or counterfeit goods ” and then proceed to curb access to these websites by literally squeezing their revenue streams: VISA, MASTERCARD and various ISPs.  Protect IP has a heavy focus on those websites located outside the United States. 

Leahy based the Protect IP Act on a bill he previously proposed called Combating Online Infringement and Counterfeits Act (COICA). This bill failed to receive a full vote in the Senator mainly due to Democratic Senator Ron Wyden who put a hold on the legislation, claiming using COICA was “…almost like using a bunker-busting cluster bomb when what you really need is a precision-guided missile.”  Wyden felt the damage done by COICA would cost “…American innovation, American jobs, and a secure Internet.”

SOPA goes further than Protect IP by also providing a private right of action on the part of copyright owners, giving individuals and corporation with a stake the ability to appeal to the government for relief.  If enacted, SOPA would lead individuals being able to barring online advertising networks, PayPal, and other payment companies from doing business with the infringing or “rogue” website.  It would also prohibit search engines such as Google and Yahoo from linking to these sites while also requiring Internet service providers to block access to such websites.    This legislation would make “unauthorized streaming of copyrighted media” a felony. 

Opponents, such as the Electronic Frontier Foundation, argue that this would create situations where websites such as YouTube and Tumblr might be deemed “illegal,” in direct violation of Federal law.  There is no end to the drama that has been created, including use of such words as “censorship” and such “Chicken Little” mantras as “the Internet as we know it may come to an end.”

While these bills certainly have many who oppose them, including Google, there are some powerful supporters of the bill, including the United States Chamber of Commerce, as well as large online retailers such as L’Oreal and the NBA.  David Israelite, President and CEO of the National Music Publishers’ Association believes that SOPA is just what America needs.  According to Israelite “…[d]igital revenue streams are key components of our industry’s future” and though we are making progress it is threatened by “criminal activity” that takes place on websites based outside of the United States.  Infringing sites typically experience enormous traffic and thus are making millions off of ad revenues.  Israelite feels U.S. manufacturers are struggling to compete, as does the U.S. Chamber. 

While SOPA and the Protect IP Act are a bit different from COICA, they are still built around the same concept of restricting revenue flow.  At first glance the bills seems to be a source of relief for the industry, but upon closer examination, it appears that such relief may come at a high cost.  These are difficult issues that are not easy to decide.  On the one hand, copyright, trademark and patent owners indeed deserve the right to be able to monetize their intellectual properties, a right established by our Forefathers in the U.S. Constitution at Article 1, Section 8 Clause 8.  Jefferson and Madison had many debates about balancing that government-granted monopoly against the free exchange of information they desired to establish in a “marketplace of ideas.”  This leads to the other hand, which is that censorship of ideas was what our Forefathers were trying to guard against by establishing the “for limited times” language of the Constitution, which thrust a work into the public domain for all to use.  Now that the U.S. duration of copyright exceeds four generations (Life +70), the idea of potential government censorship of website should cause us greater concern.

The one thing I haven’t seen from either side is a solution that protects the interests of the copyright owners as well as the interests of the public in accessing information.  Perhaps if the definition of “rogue websites” were more specifically defined, and there was some form of judicial oversight involved, where due process could enter the equation, the legislation would be more palatable.  Either way, if you are in the creative industries, this is legislation you should examine and about which you should talk to your representatives.  It is important to exercise your right to be a part of this process.  Neither the Senate nor the house has taken a vote on the legislation. 

Your House representatives can be found at the House’s Directory and the Senates Directory.  Texts of both bills can be found at the Library of Congress’ website, at http://thomas.loc.gov, or click below:

S. 968: Protect IP

HR 3261:  SOPAimage

Additional References:
http://www.billboard.biz/bbbiz/industry/legal-and-management/protect-ip-sopa-bills-seek-to-protect-digital-1005621352.story

http://www.forbes.com/sites/garyshapiro/2011/12/07/save-the-internet-take-action-against-sopa/

http://www.billboard.biz/bbbiz/industry/legal-and-management/sopa-protect-ip-acts-fuels-the-fire-of-disgruntled-1005633152.story

 

Amber Rose is enrolled as a student at Belmont University’s Mike Curb School of Music Business in Nashville, Tennessee.  She is currently studying copyright under Professor Shrum.

Solutions for the Orphaned Works of Copyright: Google Books Decision Highlights Need for Action

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The recent decision presented by the honorable Judge Chin on the matter of copyright infringement in the case The Authors Guild v. Google Inc. raised numerous issues in the arena of Intellectual Property. In addition to opposing the “opt-out” stipulation written into the settlement, Judge Chin also contested the way Google Inc. approached and viewed “orphan works” in relation to digitizing books where no copyright owner or recipient could be located or reached. In Judge Chin’s opinion, the matter of orphan works should not to be decided by private enterprise, but is rather a matter for Congress to decide. In so deciding, Judge Chin refers to certain opinions issued by the Copyright Office, as well as legislation that was originally proposed back in 2008.

"Orphaned works" are defined as copyrighted works for wSAVEORPHANShich the owner cannot be identified, but which someone wants to use. In other words, works for which the potential user cannot locate or identify the actual owner of the work in order to seek proper permission. Under the current legal structure, even if a potential user makes a diligent effort to find the owner in order to seek permission, the user’s risk of copyright liability for such use is not eliminated because there is always a possibility, however remote, that a copyright owner could bring an infringement action after that use has begun. Although it is difficult to know precisely how many orphaned works are around, one 2009 study conducted by the JISC (Strategic Content Alliance) in the United Kingdom calculated that as many as 25 million such works existed in the libraries, museums and archives of that country. In such situations, productive and beneficial use of the work – something the concept of copyright is designed to encourage – is impeded.  It is such a real problem that many organizations, like the Society of American Archivists, have issued statements of best practices to assist their members in dealing with orphaned works.  But many potential creators are not members of such an organization and don’t know how to approach clearing an orphaned work for use.

Based on a report on orphaned works prepared by the Copyright Office in 2006 at the requests of Senators Orrin Hatch and Patrick Leahy, the “Shawn Bentley Orphan Works Act of 2008” (S. 2913) was ultimately introduced by Senator Leahy on April 24, 2008. It quickly passed by a unanimous vote on September 26, 2008. The act was referred to the House Judiciary Committee, where it unfortunately lies dormant or, more likely, has stalled or died in committee chambers, suffering the fate of many good laws. Several earlier actions which served the same purpose, such as Copyright Modernization Act of 2006 (H.R. 6052) suffered similar fates.  The proposed 2008 act outlined specific guidelines for individuals pursuing and currently using orphan works. The following is a brief overview of the proposed bill and its major provisions.

Under the proposed legislation, in order to use an orphan work, a person would be required to follow very specific steps in order to avoid financial and legal liability for infringement. These rules fall under the section entitled “Conditions for Eligibility,” which outlines the following as steps the person utilizing the orphaned works would need to takes in order to limit liability:

  1. provide extensive evidence that the infringer performed a detailed search in “good faith” to locate and identify the copyright holder and was unable to locate the copyright holder;
  2. acknowledge the copyright holder in an appropriate manner, assuming the copyright holder was known with a reasonable amount of confidence (a form of "moral rights");
  3. provide a mark or symbol in some regard indicating the work is used under this section;
  4. assert in an initial pleading the eligibility for such limitations; and
  5. provides documentation for the search undertaken to locate and identify the copyright holder.

The exceptions to the above guidelines for limited remedy collection do not apply to an "infringer" if: 1) the infringer receives notice of infringement and fails to negotiate in good faith with the claimant or 2) fails to provide payment for the use of the infringed material in a reasonable time period after reaching an agreement with the copyright holder.

Additionally, the individual must search with what the legislation described as "diligent effort” to locate the copyright holder. The phrase "diligent effort" requires, at a minimum: 1) a search of the records at the Copyright Office through the medium of the Internet 2) a search of “reasonably available sources of copyright authorship and ownership information” 3) use of intangible and tangible tools and publications, and where necessary, assistance of others and 4) use of databases available to the public, including those accessible by the Internet.

If someone utilizing an orphaned work follows these guidelines, any award for monetary relief “may not be made other than an order requiring the infringer to pay reasonable compensation to the owner of the exclusive right under the infringed copyright for the use of the infringed work.” Injunctive relief remains an additional remedy offered to the owner in order to prevent or restrain any further infringement action.

The act apparently died its quiet death because of opposition from many copyright groups and, in particular, notable expert Lawrence Lessig, who opposed the bill because of its vague definition of the "diligent efforts" required to avoid liability. Some of these opposition groups even referred to the proposed legislation as a “license to steal.”  The Register of Copyrights at the time, Marybeth Peters, believes to the contrary that the orphans works situation is a problem that is "overdue" and that the "pending legislation is both fair and responsible (See Marybeth Peter’s open letter).

This issue is particularly of concern for musicians and artists, since a large number of old recordings are no longer commercially available because of an uncertainty as to who owns them. In addition, creators of new recordings must often abandon projects if a work is "orphaned," for fear of liability. This is a loss not only for the artists, but for the public and our collective culture, i.e., the continuum.

Officially, legislator still deem the legislation to be "pending."  In his speech in 2009 in from of the World Copyright Summit, Senator Orrin Hatch state he “continue’s to be very active on passing orphan works legislation.”  He continued to say:

For years, I have been working with industry stakeholders and copyright experts, including Marybeth Peters, Register of Copyrights, to pass orphan works legislation. The bill seeks to unite users and copyright owners, and to ensure that copyright owners are compensated for the use of their works. I couldn’t agree more with Register Peters when she said, “A solution to the orphan works problem is overdue and the pending legislation is both fair and responsible.

Judge Chin felt that the Google settlement would have given Google an effective monopoly over orphan works, and that was one of his primary rationales in deciding the way he did.  His rejection of the Google settlement highlights this important issue and brings it to the light of public awareness again.  Anyone with an interest in intellectual property should contact their senators and representatives and ask why a more diligent effort, no pun intended, has not been made to address a problem that still exists, despite the fact that there has been no movement on the bill in three years.  With President Obama’s pro-intellectual property agenda, the time may right to solve this incredible hole in U.S. Copyright law.

The Proposed “Combating Online Infringement and Counterfeits Act”– yet another feeble attempt?

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By Barry Neil Shrum & Nathan Drake

Since before the day that Napster was a twinkle in Sean Parker’s eye – well over a decade ago now – the legal and music industries have each struggled with ways to cope with and transform their dusty old business models from the physical status quo to the digital revolution. After the industry watchdog, the RIAA, initially targeted the Diamond Multimedia’s Rio MP3 player and then Parker, and then finally individuals were illegally downloading, the major record labels began to realize something: that perhaps the fact that consumers were downloading music illegally was merely a symptom of the problem rather than the source of the problem. So, the RIAA also began suing P2P file-sharing websites that sprang up instantly in the place of Napster, websites like Kazaa and LimeWire. While this method proved to be a bit more effective, the process still accomplished little in preventing future P2P file sharing services from materializing, each taking the place of its predecessor and each growing as rapidly as the one before. In yet another continuing effort to solve the music industry’s nightmare, new legislation has been introduced to Senate which is entitled “Combating Online Infringement and Counterfeits Act.” (S. 3804)

The purpose of the “Combating Online Infringement and Counterfeits Act” (COICA) is to provide owners of intellectual property additional weapons in the battle against illegal downloading. As indicated, the inherent difficulty of deterring and prosecuting these myriad individuals who aimagere profiting off copyrighted materials is that they easily hide behind the anonymous wall of the Internet. Many of the sites providing access to this illegal property are situated well off the shores of the United States, overseas and beyond the long reach of the court’s jurisdiction.

Another problem is the sheer mass of the problem. One study indicates that as much as 1 in 4 Internet users download illegal music – an astonishing statistic! Let me state that another way: 25% of the traffic on the Internet is to sites that allow illegal downloading of copyrighted material, be it digital books, movies or music.

As Senator Leahy, one of the sponsors of COICA says, it is essential that the government enforce a

“means for preventing the importation of infringing goods by rogue websites, particularly for sites that are registered overseas.”

Through focusing on the domain names, COICA gives the Department of Justice the authority to pursue and prosecute offending website, both domestically and abroad. Incentivizing and rewarding creative endeavors remains the core ideology of American copyright protection, and instilling this value in our society is crucial if our society will continue to create. According to the Chamber of Commerce, “…American intellectual property accounts for more than $5 trillion and IP-intensive industries employ more than 18 million workers.” Therefore, protecting this integral aspect of American ingenuity and economy should be a priority.

Additionally, COICA provides universal jurisdiction to the Department of Justice in pursuing and prosecuting domain names that solicit American intellectual property in the United States. If the law succeeds, individuals committing copyright infringement will no longer be able to hide behind the protection of their native country, without fearing that their action can and will be pursued by the United States.

In addition, COICA allows third party participants to be prosecuted for “enabling” the website to sustain itself and lend legitimacy to the practices and products of the website. As Senator Leahy states, “These [third] parties monetize the Internet site by enabling U.S. consumers to access the infringing website, to purchase content and products off the website, and to view advertisements on the website. Without partnering with these entities, the financial incentive to run an infringing Internet site is greatly diminished.” Those directly and indirectly supporting copyright infringement will be prosecuted.

For the purposes of COICA, the government defines a website as, “dedicated to infringing activities.” Due to the outstanding number of infringing websites, the government intends to pursue only the most “egregious rogue websites that are trafficking in infringing goods.” To be considered an infringing website, one of two criteria must be identified. First, the website exhibits the “existing threshold for forfeiture” under U.S.C. 2323, or the website reveals no commercial value and intends to only sell copyrightable items protected under Title 17 of the United States Code.

One of the primary opponents to the passage of COICA is the Consumer Electronics Association (CEA). Although CEA supports and agrees with the general direction of COICA, they feel its vague and wide reaching language could potentially harm legitimate businesses that are not committing copyright infringement. CEA says, “Our primary concern is that the scope of S. 3804 was significantly broader than its intended purpose of shutting down ‘rogue’ or foreign websites solely engaging in the exchange of pirated content or goods.” The ambiguous language of COICA could potentially diminish previous milestone cases according to CEA, including the “Betamax Case” determined by the Supreme Court in 1984.

While the technological environment is constantly changing and creating new hurdles for the consumer and business, the importance of copyright protection still remains. A constantly transforming environment requires innovative and relevant legislation to meet the creative needs of our culture. In an attempt to counter this decade long battle, legislation like COICA would allow the government to target the source of global piracy, and enforce the relevance and weight of American copyright protection. But our legislators must be certain to craft language that does not impede the rights of its citizens. Balance is need lest we resort to the overreaching, irrational, and over reactive activity the RIAA engaged itself in over the past decade.

RESOURCES & FURTHER READING

http://supreme.justia.com/us/464/417/

http://openjurist.org/title-18/us-code/section-2323/forfeiture-destruction-and-restitution

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_reports&docid=f:sr373.111.pdf


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Congress proposes Copyright Protection for Fashion Design

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By Nathan Drake

RunwayThe wildly popular and quickly emerging fashion giant, Forever 21, has endured numerous obstacles since its inception into the fashion industry 27 years ago. Recently however, Forever 21 has encountered a new type of hurdle; copyright infringement. In the January 24th edition of Bloomberg Businessweek, Susan Berfield explains, “Starting in about 2004…labels ranging from Diane von Furstenberg to Anna Sui to Anthropologie, about 50 in all, separately sued Forever 21 for copying their clothes.” According to Susan Scafidi, a copyright professor at Fordham University Law School and director of the Fashion Law Institute, “Of the various fast fashion chains, Forever 21 is the one who treats liability as a cost of doing business…Illegal copying has been incorporated into their business model.” In response to this increasing litigation and skewed mentality in the fashion industry, numerous senators, including Senator Schumer and Senator Clinton, introduced a bill in 2006 amending Title 17 of the Copyright Act of 1976 of the United States Code to include copyright protection for “fashion design.” If it passes, this would represent the first addition of a new protected class of copyrighted works since Congress passed the Architectural Works Copyright Protection Act in 1989.

Consequently, the question that looms in the minds of those opposing copyright protection for fashion design is simple: How does one successfully and fairly protect something as functional and practical as clothing? While certain designers and fashion lines will have their own character and price tag, allowing certain individuals to own sleeve designs or collar configurations would prove absurd and oppressive. Just as architecture laws do not provide copyright protection for “functional elements,” such as doors, windows, walls or ceilings, fashion design is limited in what it can deem copyrightable, i.e., original, due to the utilitarian use of clothing.

Support for copyright protection in the fashion industry has gained a backing from several prominent designers and New York’s Council of Fashion Designers of America, according to Louis S. Ederer and Maxwell Preston of Arnold and Porter LLP. The main opponent of the bill has been the American Apparel and Footwear Association. As Preston and Ederer explain, the AAFA has opposed the bill for several reasons, including, but not limited to ambiguous language in prosecuting copyright infringement and the perceived lack of resources to accommodate the influx of applications the Copyright Office would likely encounter. In response to these complaints, Senator Schumer and his colleagues have revised and submitted a new bill to the Senate as of August 5, 2010 (S. 3728).

In the eyes of the law, clothing serves a “utilitarian” purpose in covering a person’s body, so attempting to separate the fashion design from the clothing becomes a very difficult task. Essentially, the copyright law wants to prevent functional styles, such as the collared shirt or the “v-neck,” to remain unprotected due to the utilitarian and practical purpose it provides. To assure this, the current requirements of the Copyright Act would still apply, i.e.¸ that the fashion design would need possess a “modicum” of originality in order to be eligible for copyright protection. The current draft of the S. 3728 specifically states that the fashion design must “provide a unique, distinguishable non-trivial and non-utilitarian variation over prior designs for similar types of articles” (Section 2(a)(2)(B)(ii)).

Furthermore, while there is no perfect answer for an issue as complex as copyright protection for fashion design, working to promote a healthy industry by awarding creativity is an important principle. The revised bill, currently cNathanalled the “Innovative Design Protection and Piracy Prevention Act” was introduced on August 5, 2010 and remains in the Senate to be discussed and voted on.

The author, Nathan Drake is a senior at Belmont University from Northville, Michigan who graduates in May with a degree in Music Business from the Mike Curb School of Music Business. Nathan currently clerks for Mr. Barry Neil Shrum at Shrum & Associates in Nashville, Tennessee.  He plans on pursuing a law degree after graduation.

References

Berfield, Susan. “Forever 21′s Fast (and Loose) Fashion Empire.” Bloomberg BusinessWeek. 20 Jan. 2011. Web. 14 Feb. 2011. <http://www.businessweek.com/magazine/content/11_05/b4213090559511_page_2.htm>.

“Copyright Law of the United States.” U.S. Copyright Office. Oct. 2009. Web. 7 Feb. 2011. <Copyright.gov>.

Ederer, Louis S., and Maxwell Preston. “The Innovative Design Protection and Piracy Prevention Act – Fashion Industry Friend or Faux?” Business Solutions & Software for Legal, Education and Government | LexisNexis. 25 Aug. 2010. Web. 07 Feb. 2011. <http://www.lexisnexis.com/Community/copyright-trademarklaw/blogs/fashionindustrylaw/archive/2010/08/25/the-innovative-design-protection-and-piracy-prevention-act-fashion-industry-friend-or-faux.aspx>.

Schumer, Charles. “Bill Text – 111th Congress (2009-2010).” THOMAS (Library of Congress). 5 Aug. 2010. Web. 07 Feb. 2011. http://thomas.loc.gov/cgi-bin/query/D?c111:1:./temp/~c11198mPaA::.