Content & Technology Policy Report May 9, 2014

Content & Technology Policy Report May 9


“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 May 9

I. Headlines and Highlights:

Reps. Marsha Blackburn (R-TN) and Anna Eshoo (D-CA) introduced a bill this week that would require radio stations that opt for retransmission consent payments to pay artists a performance royalty. Also on the Hill, the House Judiciary Committee’s IP Subcommittee held a hearing on compulsory video licenses of Title 17. In judicial news, a federal appeals court says Oracle’s Java platform code is subject to copyright protection. On the Administration front, the Copyright Office held a roundtable on the “making available right” and announced locations for its upcoming public roundtables on its music licensing study. In international news, ISPs and the entertainment industry in the UK are close to a deal on what sort of regime should be used to deter online copyright infringement. Also, Australia indicates it will begin consideration of a “graduated response” style anti-piracy system. In industry news, former Republican Study Committee staffer Derek Khanna released a controversial report titled “Guarding Against Abuse – Restoring Constitutional Copyright,” and Apple considers purchasing Beats Electronic for $3.2 billion. Continue reading for further details on this week’s news.

II. Congressional Updates:

  • On Wednesday, the House Energy and Commerce Committee Vice Chair Marsha Blackburn and Congresswoman Anna G. Eshoo, Ranking Member of the Communications and Technology Subcommittee, introduced H.R. 4588, the Protecting the Rights of Musicians Act. The legislation would condition the ability of broadcasters to opt for retransmission consent payments on whether radio stations they own pay performers for their music. The bill’s text can be viewed here. Following the bill’s introduction, SoundExchange released a statement, applauding the proposed legislation: “We are very grateful to Reps. Blackburn and Eshoo’s legislation. We appreciate their effort to put an end to the double standard that has existed for years in our laws allowing broadcasters to insist on payment for their television content while refusing to pay a dime to the artists who create the music that is played 24/7 on their radio stations… Broadcasters have repeatedly told us that retransmission consent payments are fair because cable and satellite stations make millions by retransmitting local broadcast content. However, when it comes to music, the same broadcasters, many of whom own both TV and radio stations, sing a completely different tune.”
  • On Thursday, the House Judiciary’s Subcommittee on Courts, Intellectual Property, and the Internet held a hearing on Compulsory Video Licenses of Title 17. Specifically, the hearing focused on Section 119, which will expire at the end of the year if the Satellite Television Extension and Localism Act (STELA) is not reauthorized. The panel was comprised of witnesses from the cable, satellite, and broadcast industries as well as a witness from the United States Copyright Office. William Roberts, representing the Copyright Office, explained that the Copyright Office Report recommends compulsory licenses be gradually phased out so that marketplace solutions can take their place. Marci Burdick, speaking for the National Association of Broadcasters, stated that, while they would prefer that Congress let the license expire, if Congress chooses to reauthorize, they request a narrow reauthorization that is limited in time. In contrast, Stanton Dodge of DISH requested that Congress fully reauthorize STELA and the Section 119 compulsory license. Matthew Polka spoke on behalf of the American Cable Association and called on Congress to take a thorough examination of the entire video marketplace. In both opening statements and the question and answer portion, Committee Members were primarily concerned with finding a solution to blackouts and also what the effect would be to consumers if compulsory licenses were to expire or be repealed.

III. Judicial Updates:

  • On Friday, a federal appeals court ruled that packages of Oracle Corp’s Java platform software code are eligible for copyright protection. Oracle had accused Google of infringing on its software copyrights in its Android operating system. Previously, a federal appeals judge in California had claimed Oracle could not copyright packages of its Java source code. Friday’s ruling sends the case back to the trial level for further proceedings on the issue. Oracle’s General Counsel, Dorian Daley, said of the case “We are extremely pleased that the federal circuit denied Google’s attempt to drastically limit copyright protection for computer code… We are confident that the district court will appropriately apply the fair use doctrine.”

IV. Administration Updates

  • The U.S. Copyright Office will hold a series of public roundtables to gather input for its music licensing study. The roundtables will take place in Nashville, Tennessee on June 4 and 5, in Los Angeles, California, on June 16 and 17, and in New York, New York, on June 23 and 24. The roundtables will offer an opportunity for interested parties to comment on the music licensing issues set forth in the Notice of Inquiry issued by the Office on March 17. Those seeking to participate in the roundtables should complete and submit the online form. Requests to participate must be received by the Copyright Office by May 20.
  • On Monday, the Copyright Office held a roundtable panel discussion on the current state of the making available right in U.S. copyright law. The recent World Intellectual Property Organization (WIPO) Internet Treaties require signatories to include in their copyright protections the “making available” right. The roundtable discussion served as a status report to the Copyright Office from experts throughout industry about whether or not the U.S. is in compliance with that section of the treaty. Four separate panels were conducted, with some overlap of panelists. The first two panels were both asked to cover the current landscape of U.S. copyright law with respect to exclusive rights under Title 17. The third panel discussed the potential benefits of clarification or actual change in U.S. law, and the final panel discussed how the WIPO treaty was being implemented and interpreted by other countries who signed, as well as the state of U.S. copyright law compared to others. Twenty-nine different panelists attended the event. Experts around the industry said they did not believe that anything will come from this process regardless of the findings from the roundtables. Therefore, there was a lack of urgency about the whole discussion. This was exemplified by the fact that few people were in the audience that were not either a panelist or a co-worker of a panelist. Copyright Alliance CEO Sandra Aistars was in attendance at the roundtable, and participated in the panel on “Benefits of Clarification/Possible Changes to U.S. Law.”
  • On Friday, the Copyright Office announced that Michelle Choe and Donald Robert Stevens will serve as inaugural legal fellows in the Ringer Copyright Honors Program. They will begin two-year appointments in September, working in both the Office of the General Counsel and the Office of Policy and International Affairs, respectively. The Ringer Honors Program was commenced in 2013. It offers paid clerkships to candidates who have a strong interest in copyright law and a demonstrated record of achievement in law school or in practice. For more information, click here.
  • On Saturday, May 10 (starting at 6:00PM) until Sunday, May, 11(ending at 6:00AM) the Copyright Office’s eCO Registration System will be offline for maintenance. Please ensure you are logged out of the eCO system prior to 6:00PM Eastern Time Saturday, May 10.

V. International Updates:

  • A University of Portsmouth study that surveyed over 6,000 Finnish citizens suggests that individuals who pirate movies are also likely to frequent the cinema and pay to see movies. Dr. Joe Cox, a University of Portsmouth economist involved in the study, said “people who illegally download large quantities of movie files continue to pay for legal movie consumption to a far greater extent than music downloaders.” Additionally, the study found that movie downloaders are more likely to dial back their illicit activities than their music counterparts if they think they might be harming the creative industry. Of those questioned in the study, each person had downloaded on average 2,900 music files and 90 movie files.
  • UK ISPs and the entertainment industry are close to reaching a deal to combat online piracy. The Voluntary Copyright Alert Programme (Vcap) has been watered down, according to at least one lawyer in the Internet law industry. Letters sent to suspected infringers under the program would take an “educational” tone and promote legal alternatives for online content acquisition. Under the agreement, rights holders would pay $1.3 million or 75% of the cost (whichever comes out as less) to ISPs to set up the infrastructure for the system. This is in addition to annual administrative costs. Under the system, no more than 2.5 million alerts will be allowed to be sent to accounts. UK ISPs and the entertainment industry have been in negotiations over how to address online piracy since 2010.
  • This week, the Australian government revealed that it will begin consideration of a “graduated response” style anti-piracy system in conjunction with website blocking. The country’s Pirate Party has responded to the move with a Senate petition opposing such measures. Brendan Molloy, Councilor of Pirate Party Australia told Torrent Freak that “there has been no evidence advanced that graduated response regimes are effective. In fact, academic literature on the matter has been skeptical that they have any measurable impact on reducing file-sharing.”
  • A father and son were sentenced in a Sydney court this week for setting up illegal set top boxes that gave users subscription-free access to provider Foxtel’s subscription TV. The two ran a piracy ring with the modified boxes throughout Australia, and serviced more than 8,000 people. The father received a six month jail term, whereas the son was let out on a good behavior bond.

VI. Industry Updates:

  • On Monday, Randy Barnett, Carmack Waterhouse Professor of Legal Theory at Georgetown University’s Law Center, published an article in the Washington Post on Monday promoting author Tom Bell’s book titled “Intellectual Privilege: Copyright, Common Law, and the Common Good.” Bell is a professor at Chapman University’s Fowler School of Law and is an adjunct fellow at the CATO Institute. Barnett himself is a copyright skeptic, and writes “I doubt very much that copyright and patents are really property at all. Nor does the Constitution identify these rights as property. Indeed, although Congress is empowered to ‘secur[e] for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,’ it has no duty to do so.” The article can be viewed here.
  • On Tuesday, HBO’s hit show Game of Thrones made piracy history when more than 200,000 people were sharing a single file via torrent. The number trumped a previous record that was set just several weeks earlier.
  • Derek Khanna published an article in the Huffington Post on Tuesday titled “Unconstitutionally Long Copyright Terms Stifle Content Creation.” The article comes shortly after R Street Institute released a report authored by Khanna on “Guarding Against Abuse – Restoring Constitutional Copyright.” Khanna’s article concludes that “Congress must set a firm limit on copyright term that is backed by the data, and thereby protect the public domain of the future. Copyright terms over 100 years are ridiculously and unconstitutionally long, and a shorter term would do better to facilitate the Constitutional goal of ‘promoting the progress of the sciences.’” Read the full article, here.
  • Steven Tepp, President and CEO of Sentinel Worldwide and lecturer at GWU Law School, published an op-ed in the National Review on Thursday titled “Assailing Copyright Isn’t Conservative…Derek Khanna’s ideas are bad policy too.” Tepp’s piece comes in response to Khanna’s recently published R Street Institute report. Tepp writes “there are plenty of modern copyright issues worthy of discussion, and people can honestly disagree about the best solutions. Conservatives can and should decide their views for themselves. But Khanna’s proposal is, in my opinion, not a remotely conservative one, so it’s no surprise it’s also bad policy. Read the full article here.
  • According to SEC filings analyzed by Digital Music News, Pandora paid its CEO, Brian McAndrews, and founder, Tim Westergren, $29,167,388 and $11,685,277 respectively in 2013. Meanwhile, the top two self-reporting artists, Bette Midler and Ellen Shipley, made $456.44 and $158.41, respectively.
  • Google Play Music launched in Canada this week, bringing the popular streaming service to Canada for the first time. The service will offer 25 million songs to users, slightly more than the U.S. version.
  • The Electronic Frontier Foundation published a blog piece on Tuesday titled “International Day Against DRM: It’s Time to Fix U.S. Copyright Law.” The group argues “technology is in our homes, it’s in our bodies, and it follows us everywhere. When we can’t tinker with and share what we own and when we’re forced to only use compatible products from a single company, we all lose. Our world becomes less diverse and less safe, as we are unable to see if there is malware or a flaw in the design of our most trusted products.” Read the full blog post, here.
  • Apple is reportedly in talks to purchase Beats Electronics for $3.2 billion. Beats, a company started by hip hop artist Dr. Dre, launched a music streaming service in January as a competitor to other popular Internet radio services. The company is primarily known for its audio products. If the deal goes through, it would be Apple’s largest acquisition to date.
  • Spotify removed a silent album this week that earned Michigan-based indie band Vulfpeck around $20,000 in royalties. The band put the silent album on Spotify and asked fans to stream it continuously, in order to earn the band royalties to go towards funding its next tour. Spotify justified its removal of the album by stating the submission violated the company’s terms of content.
  • Rightscorp, a company that provides copyright monetization services for copyright holders, announced this week that it has now received settlement payments from users on more than 70 ISPs, up from 50. The expansion of ISP relationships will allow the company to service an increased number of rights holders.
  • Publishing company Hachette claimed this week that online retailer Amazon has been delaying shipments of its books despite being provided sufficient stocks to meet demand. The actions come as part of an apparent negotiating strategy used by the retailer. Read more on the issue, here.

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