Copyright Law in 2016

Legislative and Regulatory Developments

By: Howard G. Zaharoff
January 26, 2017

Although many articles have been written about the important copyright cases of 2016, not enough has been said about several important legislative and regulatory developments that also took place. Here’s a brief overview.

I. House Judiciary Committee: In December, House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and Ranking Member John Conyers, Jr. (D-Mich.) released their first policy proposal based on the committee’s review of U.S. Copyright Law. This review was kicked off by a speech delivered on April 24, 2013, before the World Intellectual Property Day celebration at the Library of Congress and has involved 20 hearings, testimony from 100 witnesses and additional input.  According to the related press release:

We intend to periodically release policy proposals on select, individual issue areas within the larger copyright system that are in need of reform where there is a potential for consensus.  … Today, we are releasing our first policy proposal, which identifies reforms to modernize the Copyright Office so that it can meet the challenges of the 21st Century.  Among the reforms in this document are granting the Copyright Office autonomy with respect to the Library of Congress, requiring the Copyright Office to maintain an up-to-date digital, searchable database of all copyrighted works and associated copyright ownership information, and many others reforms.

II. Small Copyright Claims Tribunal: Several developments herald the possibility of a copyright small claims bill, which is likely to benefit independent creators, such as photographers, but causes some commentators to worry that a simpler, cheaper procedure will further empower copyright trolls.

In July 2016, Reps Hakeem Jeffries and Tom Marino introduced the “Copyright Alternative in Small-Claims Enforcement Act” (a.k.a. the “CASE Act”), which would establish a small copyright claims tribunal as a permissive alternative to a federal court action. This Copyright Claims Board would be authorized to award no more than $15,000 in statutory damages, even for willful infringement; no more than $30,000 in a single proceeding; and no award of attorneys’ fees except in the case of bad faith conduct (the Act provides that if a party pursues a claim or defense “for harassing or other improper purposes,” the Board will award any party adversely affected attorneys’ fees of up to $5000).  Proceedings are accomplished “via internet-based applications and other telecommunications facilities.”

The proposed procedure is permissive, that is, either the person with the small claim, or the defendant in the small claim action, can elect to proceed in Federal district court … making some commentators question the ultimate utility of the proposed Tribunal.

Meanwhile, on December 8, 2016, Representative Judy Chu (D-Ca.) and Co-Sponsor Lamar Smith (R-Tx.) introduced the “Fairness for American Small Creators Act.”  This bill is substantially similar to the CASE Act, except that it requires all actions to enforce small claims judgements to be brought in the Federal District Court in D.C. (CASE permits enforcement in any federal court), and that it doesn’t explicitly provide for the severability of unconstitutional provisions.

III. New Procedure for Registering Designated Agents under the DMCA: One of the bigger copyright regulatory developments to end 2016 was the new procedure for registering agents under the Digital Millennium Copyright Act safe harbor provisions.

Background: The DMCA provides safe harbors from liability for copyright infringement for service providers that meet various requirements. One requirement is to designate an agent to receive notifications of alleged copyright infringement by (1) making that information available to the general public on the service provider’s website and (2) identifying and registering the agent with the U.S. Copyright Office (“CO”).

Based on recent studies, the CO realized that much of the information they had on file about designated agents had become inaccurate over time because it was not regularly updated.

Therefore, effective December 1, 2016, the CO rolled out a new electronic system for the online registration of designated agents under the Digital Millennium Copyright Act (“DMCA”). Consequently, all online service providers who want the benefit of the safe harbor against copyright infringement claims are required to register under the new electronic system or, if they’re already registered under the old paper system, to submit fresh designations under the electronic system by December 31, 2017. Thus, agents who previously filed hardcopies of their DMCA agent designations must now do so again online before 2018 in order to keep the benefits of the safe harbor.

With the new online repository, agent designations will be valid for three years, after which they expire unless renewed and updated. The new system will automatically remind service providers to review and renew their designations.

The fee for designating an agent in the new system has been lowered from $105, plus $35 for each group of one to ten alternate names, to $6 per designation, whether registering a new designation or resubmitting or modifying a previous designation.

It is important that agents present updated information, both with the CO and on their websites, as courts could find that stale information constitutes a failure to comply with the statutory requirements for invoking the limitations on copyright liability.

IV. New Proposed Registration Procedures: The CO also released a bevy of proposed regulations, many intended to further the online application and processing of copyright applications, including the following.

A. Group Registration of Photographs (81 FR 86643, Dec. 1, 2016): The CO is proposing to amend the current regulation to reflect technical upgrades to the electronic registration system and to create a new group registration option. The current rules provide one group registration option for published photos and 4 other options for multiple photos (unpublished collections, contributions to periodicals, photographic databases and collective works).

The new rule will require online application and submission of photo deposits in digital form. This rule will replace the “unpublished collection” option with a new “unpublished photographs’ option that permits up to 750 photos per submission (comparable to the “published photographs” group registration procedure).

There is an interesting discussion on how the new requirements will affect photographers, not all of whom have ready access to computers and the internet. The CO writes:

“If a photographer does not have broadband at home, at the home of a relative, friend, or neighbor, or at her place of employment, there are other options… If the copyright owner has a tablet or laptop, she could complete and submit the online application at a coffee shop, a bookstore … She could log onto the electronic system at a public library…. [or] save her photographs onto a flash drive or other storage device and mail it to the Office… [or] hire an attorney to submit the application on her behalf, either by paying … or by obtaining pro bono representation.

“[T]he Office believes that requiring applicants to submit an online application… is a reasonable trade-off for improving the overall efficiency of the group registration process.” 

The CO assumes that his new procedure would increase photographers’ registrations, since only 1% currently register their works.

B. Group Registration of Contributions to Periodicals (81 FR 86634, Dec. 1, 2016): Current rules allow the registration of an unlimited number of contributions to periodicals within a 12-month period by the same author to be registered on Forms TX, VA or PA, but only using a paper form and only submitting a physical deposit in the precise form in which these works were first published (though 2002 amendments permit these to be photographs or photocopies of the original).

The proposed rule would require electronic – as opposed to paper – applications; would specifically define “periodical” and require all contributions to be owned by the same claimant; would require registration in Class TX or VA (“The Office … has no institutional memory of having ever registered a claim in Class PA”); would require the application to identify the date of publication and the periodical in which published; and would require a digital – as opposed to physical – copy.

The term “periodical” would be defined to refer to a “collective work that is issued … on an established schedule in successive issues” and would include ePrint publications that satisfy this definition (which therefore excludes ordinary websites, which are updated continually, rather than on a schedule, and are updated as part of the whole, rather than in successive issues).

The CO encourages authors to register quarterly as opposed to annually or semiannually, to preserve their rights to statutory damages and attorney’s fees.

C. Proposed Rules for Removal of Personally Identifiable Information from Registration Records (81 FR 63440, Sept. 15, 2016): The proposal would allow authors, claimants and their authorized agents to request removal from the online public catalog of certain PII requested by the CO, such as home address and personal phone number (but not the author’s name – but see note below on final rule), provided verifiable substitute non-personally-identifiable information is provided (e.g., providing an active PO Box or third party address to replace the author’s home address).

However, the CO would retain this information in the CO’s records for visitor inspection, because this is more consistent with its statutory mandate to maintain public records, and because “preventing the online dissemination of that information will substantially alleviate privacy concerns.” There would be a fee of $130 for each registration record for which removal is requested and, if a verifiable substitute is not offered, a good reason for removal will need to be provided (such as a specific threat to personal safety or security).

The proposed rule would also codify the current practice of removing, upon request, PII that was erroneously submitted despite not being requested, particularly sensitive PII such as driver’s license, SSN and banking/credit card information.  This information would be removed by the CO from both online and offline records, upon request. Not codified, but continued, is the current CO policy of removing such information if discovered by the CO on its own without a specific removal request.

(On February 2, 2017, the CO issued the final regulation. The major change responded to the concerns expressed by the National Center for Transgender Equality, which argued that requiring a transgender person’s changed name and real name to appear in the record could jeopardize the individual’s “well-being and personal and professional life” and risk harm and discrimination … as well as affecting victims of domestic violence.  In response, the CO modified the proposed rule to allow a name change in the online record, but only if “accompanied by official documentation of the legal name change,” effected by the CO simply indicating that “a change” was made and not that the person’s name was altered.)

V. Copyright Office Report on Software-Enabled Consumer Products: In December the Copyright Office released a report on the impact of copyright law on the increasing number of consumer products that contain software. Based on an in-depth analysis of existing statutory and case law, including the implications of idea/expression, merger, scene a faire, fair use, de minimis use and first sale, as well as repair rights under §117, on the scope of copyright, the CO concludes as follows:

[T]he spread of copyrighted software also raises particular concerns about consumer’s rights to make legitimate uses of those works – including resale, repair, and security research. As the Report explains, the Office believes that  the proper application of existing copyright doctrines to software embedded in everyday products should allow users to engage in these and other legitimate uses of works…

Concerned that “legislation carries its own risks, including that it might address the technologies of today but fail to anticipate different technologies – and distinct concerns – of tomorrow,” the CO “is not recommending any legislative changes at this time.”  

VI. Copyright Restatement: In 2015 The American Law Institute commenced a project of restating U.S. Copyright law. The planned Restatement will have 11 Chapters: General Principles, Subject Matter and Standards, Scope of Protection, Ownership, Duration, Formalities, Rights and Limitations, Infringement, Secondary Liability, Remedies, and Copyright Protection and Management Systems. Preliminary drafts of the first two Chapters exist.

Amid controversy regarding restatements in general and the Copyright law restatement in particular, critics (including now-deceased Supreme Court Justice Antonin Scalia) have charged that the ALI doesn’t merely restate law, but reinterprets case law to effectively summarize what the authors believe the law should be, not necessarily what it is. But the restatement process continues.

VII. New Register of Copyright: On October 21, 2016, Register Maria Pallante was removed by Dr. Carla Hayden, the new Librarian of Congress, who held this role only five weeks before removing Pallante. (Dr. Hayden describes this as Pallante resigning, which is technically correct: On Oct. 21 Hayden appointed Pallante senior advisor for digital strategy; declining this reassignment, Pallante resigned Oct. 24.) This was supposedly the first time a Register was “removed” by the Librarian.  The removal created a minor uproar in the copyright community, where Register Pallante was quite popular.  (It was announced in January that Pallante would succeed Tom Allen as President of the Association of American Publishers.)

VIII. Economic Contribution: A report by the International Intellectual Property Alliance (IIPA), released December 6, 2016, states that in 2015 the U.S. core copyright industries, which include books, music, videogames, software, film, TV, radio, newspapers and periodicals, accounted for 5.5 million jobs (3.8% of the U.S. work force), delivered $177 billion in foreign sales and contributed $1.2 trillion (6.88%) to the U.S. economy.

For more information, please contact Howard Zaharoff.