Copyright Act Revamp Should Accommodate Innovation, Non-content Actors, CCIA Says

Copyright legislation must also provide “certainty to businesses that are not the ‘content industry’ but are nevertheless substantially affected by the Copyright Act,” CCIA said. The paper is targeted at the House Judiciary Committee, which is reviewing a broad swath of Copyright Act-related issues. The committee began a new round of meetings with copyright stakeholders in late July to gather additional input (see 1507230062). Revamp efforts are likely to be constrained by international agreements like the Berne Convention and controversy over issues like technological protection measures, but “modernization of the Copyright Act is possible,” CCIA said.

CCIA, with members including Facebook, Google and Pandora, emphasized the need for maintaining the centrality of fair use and the first sale doctrine in any Copyright Act revamp. Industries dependent on Copyright Act exceptions and limitations have grown significantly and have a major impact in the U.S., contributing an annual average of $2.4 trillion to the U.S. economy, CCIA said. Fair use and the first sale doctrine help prevent “excessive” IP regulation, so Congress should be careful that any revamp legislation not affect the integrity of either doctrine, CCIA said. Congress should reform the U.S. licensing regime to promote more copyright ownership transparency and improve enforcement against anticompetitive behavior, CCIA said. Those reforms should include improving public access to Copyright Office data on copyrighted works, the group said.

Congress can ensure certainty for non-content businesses in part by strengthening the Digital Millennium Copyright Act’s safe harbors for online services like cloud computing and social media, including “preventing plaintiffs from ‘pleading around’ the statute’s protections and deterring misuse of the DMCA’s notice-and-takedown process, CCIA said. DMCA protections should confirm that the statute’s safe harbors “for content stored at the direction of a user apply to all copyright liability (and comparable state law claims), not merely to federal copyright liability,” CCIA said. Congress should codify the copyright misuse doctrine by extending existing Section 512 mechanisms for preventing DMCA abuse to include statutory awards, the group said.

Congress should “restore” courts’ use of the corporate veil analysis in copyright infringement, since recent courts have failed to use that analysis and have “imposed liability on investors,” CCIA said. “The potential for officers or shareholders being held personally liable for the infringing activities of the companies in which they have invested harms innovation by discouraging investment in startup companies.”

Congress should reform statutory damages rules for copyright infringement cases to provide more certainty by examining the Copyright Act’s statutory minimum and maximum damages rule, along with examining whether to continue to allow statutory awards to “aggregate infinitely,” CCIA said. Congress also should ensure more predictability in secondary liability cases, tighten the timeline for plaintiffs to seek secondary liability damages and provide additional guidance to courts for awarding damages, the group said. Register of Copyrights Maria Pallante and other stakeholders have previously identified the statutory damages framework as a possible area in need of a revamp, which “would help to promote predictability and fairness to manufacturers, service providers, and consumers,” CCIA said. Congress should consider remitting statutory damages “in cases where defendants can demonstrate a reasonable good faith belief that their activity was a fair use (or perhaps covered by any defense),” the group said. “This provision could be extended to all good faith actors. In the rare case where this might leave plaintiffs under-compensated, they could still obtain actual damages and injunctions.”

CCIA Vice President-Law & Policy Matthew Schruers told us that he is “looking forward to reaching out” to House Judiciary after the paper’s public release to “discuss the specifics of the paper.” CCIA had lobbied House Judiciary on the committee’s Copyright Act review, and Schruers testified during a July 2014 IP Subcommittee hearing on copyright remedies (see report in the July 24, 2014, issue). The CCIA paper “is not an attempt to comment on existing legislative proposals” like the Fair Play Fair Pay Act (HR-1733) or the draft Copyright Office for the Digital Economy Act, Schruers said. “It’s an effort to articulate what the collective sense of our membership is about what guideposts should drive the reform conversation. This is not a reactive paper -- it’s a proactive statement.”

CCIA’s recommendations are likely to reflect “a very specific industry perspective,” said Sandra Aistars, George Mason University School of Law’s Center for the Protection of Intellectual Property (CPIP) director-copyright research and policy. Still, CPIP also believes “that improving the operations and resources of the Copyright Office in order to ensure that data about copyrights and their owners is more transparent and easily accessible is an important starting point, and may help limit the issues that otherwise could require legislative attention,” she said. CPIP plans to issue its own paper on House Judiciary’s Copyright Act review that “will approach these important issues from a broader vantage point,” Aistars said.