Content & Technology Policy Report June 6, 2014

Content & Technology Policy Report June 6


“Weekly copyright related summary of issues, including congressional, judicial, administration, international and industry updates, provided courtesy of  American Continental Group (ACG).”


Content & Technology Policy Report June 6

I. Headlines and Highlights:

This week, the House Judiciary Committee’s Subcommittee on Courts, IP and the Internet announced two music licensing hearings. Also on the Hill, the Congressional Internet Caucus scheduled a briefing for next week on digital copyright and first sale-related issues. On the Judicial front, the U.S. Department of Justice (DOJ), Antitrust Division, is set to review agreements in place that govern songwriter royalties, and the Beastie Boys won a $1.7 million settlement against Monster Beverage Corp. for copyright infringement. On the administrative front, the Copyright Office is set to hold a public roundtable concerning a new procedure to allow copyright owners to audit the Statements of Account and royalty payments that cable operators and satellite carriers deposit with the Office. In international news, the European Court of Justice (ECJ) ruled that browsing and viewing copyrighted material on the Internet does not constitute copyright infringement. Also this week, Advocate General Jaaskinen, of the ECJ, announced in a formal opinion new exceptions to copyright that will allow libraries to digitize books without the consent of the copyright holder. In industry news this week, Google hired Staci Pies, former Microsoft Director of Government and Regulatory Affairs, as its Senior Policy Counsel. Also in industry this week, comedian Stephen Colbert calls out Amazon for its e-book price negotiation tactics with publisher Hachette. Continue reading for further details on this week’s news.

II. Congressional Updates:

  • The House Judiciary Committee’s Subcommittee on Courts, IP and the Internet has scheduled two hearings on “Music Licensing Under Title 17.”
    • The first hearing will take place on Tuesday, June 10th at 10:00AM. Witnesses scheduled to testify include: Jim Griffin, Managing Director, OneHouse LLC; Will Hoyt, Executive Director, TV Music License Committee; David Israelite, President and CEO, National Music Publishers Association; Lee Knife, Executive Director, Digital Media Association; Lee Thomas Miller, Songwriter and President, Nashville Songwriters Association International; Michael O’Neill, CEO, BMI; and Neil Portnow, President and CEO, The Recording Academy.
    • The second hearing will take place on Wednesday, June 25th. Witnesses scheduled to testify include: Rosanne Cash, Singer Songwriter on behalf of the Americana Music Association; Delida Costin, General Counsel, Pandora; David Frear, Executive VP and CFO, SiriusXM Radio; Mike Huppe, President and CEO, SoundExchange; Cary Sherman, Chairman and CEO, Recording Industry Association of America; Darius Van Arman, Board Member, American Association of Independent Music; Charles Warfield, Joint Board Chair, National Association of Broadcasters; and Paul Williams, President and Chairman of the Board, ASCAP.
  • The Congressional Internet Caucus has scheduled a briefing for next Friday, June 13th at noon, titled “Can You Sell Your Digital Music/Movie/eBook Collections? Congress Reviews Digital Copyright.” The briefing will be held in Rayburn House Office Building 2226. Confirmed panelists include: Jonathan Band, Owners’ Rights Initiative; James Grimmelmann, Professor of Law, University of Maryland School of Law; and Keith Kupferschmid, General Counsel & Senior Vice President, Software & Information Industry Association (SIIA). More information is available here.

III. Judicial Updates:

  • The DOJ’s Antitrust Division is set to review agreements in place that govern songwriter royalties. The Antitrust Division is responsible for overseeing the enforcement of the Final Judgments in United States v. ASCAP, 41 Civ. 1395 (S.D.N.Y.), and United States v. BMI, 64 Civ. 3787 (S.D.N.Y.) (“Consent Decrees”), and has just announced the launch of an examination of operation and effectiveness of the Consent Decrees. The Consent Decrees, originally entered in 1941, are the products of lawsuits brought by the U.S. against ASCAP and BMI under Section 1 of the Sherman Act, 15 U.S.C. § 1, to address competitive concerns arising from the market power each organization acquired through the aggregation of public performance rights held by their member songwriters and music publishers. Since their entry in 1941, the Department has periodically reviewed the operation and effectiveness of the Consent Decrees. Both Consent Decrees have been amended since their entry. The ASCAP Consent Decree was last amended in 2001 and the BMI Consent Decree was last amended in 1994. The DOJ is seeking public comments as part of its review. More information is available here.
  • The Beastie Boys won $1.7 million in damages from Monster Beverage Corp. in a U.S. District Court for the Southern District of New York settlement for the beverage company’s permission-less use of the group’s music in an advertisement. Monster’s lawyer claimed the employee responsible for the infringement thought the company had permission to use the Beastie Boys’ song. The lawsuit was originally filed in 2012 and the trial began on May 27th of this year.

IV. Administration Updates

  • The U.S. Copyright Office will hold a public roundtable on July 9th, concerning a new procedure to allow copyright owners to audit the Statements of Account and royalty payments that cable operators and satellite carriers deposit with the Office. A notice listing the issues that will be discussed at the roundtable was published in the Federal Register (79 FR 31992) on June 3, 2014, and is available here. The roundtable will be held in the Office of the Register of Copyrights, which is located in Room LM-403 of the Madison Building of the Library of Congress, 101 Independence Avenue SE, Washington, DC. The Office invites copyright owners, cable operators, satellite carriers, accounting professionals, and other interested parties to participate in the discussion. The Office is especially interested in hearing from accounting professionals with experience and expertise in auditing procedures and statistical sampling techniques. To submit a request to participate in the roundtable, use the form that is posted here. Requests to participate must be received by June 26th.
  • Registration has closed for participation in the June 25th Department of Commerce’s Boston Roundtable: “Discussions on Remixes, Digital First Sale Doctrine and Statutory Damages.” The roundtable will be held at Harvard University Law School, Wasserstein Hall, 1585 Massachusetts Ave., Cambridge, MA. More information is available here.

V. International Updates:

  • On Thursday, the court case Public Relations Consultants Association (PRCA) v. Newspaper Licensing Agency (NLA), after a four year battle, was finally decided. The European Court of Justice (ECJ) ruled that browsing and viewing copyrighted material online does not require authorization of the copyright holder. Internet browsers are now protected by copy exception of EU copyright law. The PRCA argued that the law could be interpreted to make any user reading an online story infringing copyright, but the NLA fought this by saying that its licensing fees would only apply to entities using their content commercially. The NLA said the ruling will not have any effect on licensing fees.
  • Also on Thursday, Advocate General Jaaskinen, of the Court of Justice of the European Union, released a statement saying that, pursuant to the Copyright Directive, a Member State must grant authors exclusive rights to authorize or prohibit duplication of their works; however the directive allows for specific exceptions to the right, notably for publically accessible libraries. This exception extends to the digitization of books within a library’s collection. Mr. Jaaskinen makes clear that only individual works may be digitized, not a collection in its entirety. However, Mr. Jasskinen did make clear that users are not allowed to save works made available to USB sticks, or whatever other memory devices one might use. The printing of works is still covered by the exception of private copying.
  • Last week, Pirate Bay co-founder Peter Sunde was arrested in Sweden after evading Interpol for nearly two years. Sunde was wanted by Interpol to serve an outstanding sentence he received for copyright violations.
  • Musicians are accusing Google’s YouTube of forcing independent labels into settling for low royalty rates for an upcoming new music streaming service. Singer Billy Bragg and Radiohead guitarist Ed O’Brien were amongst those who spoke out against the company this week. O’Brian said “to restrict [indie artists and labels] in this way is to risk creating an Internet just for the superstars and big businesses.” Additionally, a group representing Europe’s independent labels said it plans to request investigation and intervention from the European Commission in Google’s negotiations with labels to ensure more favorable rates.
  • This week, the Motion Picture Association of America (MPAA) reached a “Content Protection Agreement” with the Google-backed Chinese digital file-sharing service Xunlei. Under the agreement, Xunlei will implement tools and features to dissuade its users from participating in illicit file-sharing activities. The deal includes the implementation of a content recognition system. In a statement, the MPAA’s Senior Executive Vice President and Global General Counsel Steven Fabrizio said “With the largest number of Internet users in the world, the Chinese market offers tremendous potential for content creators to make their works available online to hundreds of millions of consumers.”
  • Spotify is reportedly in talks with Vodacom, part of Vodafone, to offer its music streaming service in African countries. The deal under way would allow Vodacom customers a limited amount of free streaming access to Spotify’s music library.

VI. Industry Updates:

  • Google hired Staci Pies this week as its Senior Policy Counsel. Pies previously spent a number of years with Microsoft as its Director of Government and Regulatory Affairs, working closely with Skype. Before Microsoft, Pies worked in public policy at Level 3 Communications and the FCC.
  • Composer and Musician Van Dyke Parks penned an op-ed in The Daily Beast this week on “How Songwriters Are Getting Screwed in the Digital Age.” Parks writes on the issue of royalties and digital music services: “We’d better take a real hard look—and soon—at the disproportionate profits of creators and distributors of ideas. Our priority should be in nurturing new ideas and innovative art, and the people who create those ideas and that art must be fairly and legally compensated.” Read the full op-ed here.
  • Pandora announced its May 2014 audience metrics this week, citing an increase of 28% for listener hours over the same time last year. In May, Pandora users listened to 1.73 billion hours of music, boosting Pandora’s total U.S. radio listening market share to 9.13%. As for active listeners, the company experienced a 9% increase over the same time last year, bringing its total May active listeners to 77 million.
  • On Sunday, comedian John Oliver devoted a 13 minute segment to a discussion on net neutrality and an FCC proposal that would allow ISPs to charge companies a premium to gain access to faster Internet speeds to reach their customers. In his segment, he called upon the Internet community to direct their attention to an FCC request for comments on its proposal. As an apparent result of Oliver’s remarks, the FCC received a significant influx of comments on its proposal. Over 49,000 comments have been submitted to the FCC’s website on the proposal over the past 30 days. Comments submitted on the request “Protecting and Promoting the Open Internet” can be viewed here.
  • The Electronic Frontier Foundation (EFF) posted a blog this week titled “‘Six Strikes’ Copyright Alert System Can’t Be The Future of Copyright Enforcement Without More Transparency and Accountability.” The post comes in the wake of last week’s operations data release from the Center for Copyright Information (CCI). The EFF’s Mitch Stoltz writes “it’s good that this private, government-encouraged program is moving towards greater transparency, but it needs to go further by disclosing the impact of its ‘mitigation measures’ on Internet users and the full content of its ‘educational’ messages. If private agreements are going to be the future of copyright enforcement on the Internet, they must be transparent and accountable to the public.” Read more here.
  • On Thursday, the R Street Institute, a non-profit think tank focused on policy research and outreach promoting limited government, held a “debate” on copyright law via Google Hangout. Panelists included: Tom W. Bell Professor, Chapman University Fowler School of Law; Derek Khanna, Associate Fellow, R Street Institute, Visiting Fellow, Information Society Project at Yale Law School; Mitch Stoltz, Staff Attorney, Electronic Frontier Foundation; and Ryan Radia, Associate Director of Technology Studies, Competitive Enterprise Institute. The panelists all agreed that copyright law has become too bloated and needs to be scaled back. Tom Bell argued that the law should revert back to the original 1790 Copyright Act, which only covered books, maps, and charts. He reluctantly conceded that computer software and, maybe, movies should be covered by copyright as well. Derek Khanna focused on copyright terms. He argued that copyrights were never meant to be perpetual, and that the current “empires,” like Disney, would never have been able to get started with today’s copyright. Mr. Khanna also called out several artist advocacy groups, suggesting they only represent big corporations. Mitch Stoltz’s argument focused on how everything people buy now has code in it. Many appliances have computers, and the code is copyrighted; he said the law needs to be reformed to make sure someone cannot be sued for buying a dishwasher. Finally, Ryan Radia, said he would like to get rid of everything after Section 109, with some exceptions. He agreed that many statutes are bloated, but he also wanted to keep a lot as well, making him the only panelist to state that current copyright law has sections that work. Mr. Radia was also the only person to bring up the need for statutes to deter bad actors. All argued that the current criminal fines associated with copyright infringement need to be scaled back as well.
  • Comedian Stephen Colbert chimed in this week on the Amazon – Hachette e-book pricing dispute that has resulted in shipment delays for the publishers’ books on the ecommerce website. Colbert’s books are published by Hachette. Following his discussion on The Colbert Report, Colbert tweeted “Together we can #CutDownTheAmazon.” The segment can be viewed here.
  • Indi band Okkervil River’s front man Will Sheff authored an op-ed in Rolling Stone this week, titled “Copyright Laws Kill Art.” Sheff argues that artists “communicate back and forth with each other over the generations, take old ideas and make them new.” He writes “I concluded that copyright law was completely opposed to this natural artistic process in a way that was strangling and depleting our culture, taking away something rich and beautiful that belonged to everyone in order to put more money into the hands of the hands of a small, lawyered few.” Read the full op-ed here.

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