CO Decides Against Legislative Recommendations on Software-Embedded Products
The Copyright Office concluded its yearlong study of the role of copyright law in the use of software-embedded products, saying Thursday it decided against making any legislative recommendations related to the study. The CO aimed to examine how provisions​ in existing U.S. copyright law affect and are affected by software-embedded products, and how potential legislative changes could affect the innovation of such products (see 1512150050). Senate Judiciary Chairman Chuck Grassley, R-Iowa, and ranking member Patrick Leahy, D-Vt., sought the report last year (see 1510230036).
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The CO said software-embedded products “raise new issues,” but the “existing, flexible structure of the Copyright Act will serve well the needs of both copyright owners and users of software embedded in everyday products.” The use of software in such products is still new but “that software benefits from the same existing rights and limitations as all software,” the CO said in its study report. The office will “continue to monitor the technological and legal landscape for further developments.”
The CO said copyright law wasn’t preventing the resale of software-embedded products. No legislative changes on resale issues are needed so long as the courts continue to properly apply the first-sale doctrine under Copyright Act Section 109, the CO said. Legislative changes to explicitly allow for the repair of software-embedded products also isn’t needed as long as the existing interpretations of Copyright Act Section 117, the fair use doctrine and other copyright law statutes remain in force, the CO said.
The CO said the proper application of copyright case law can resolve issues on the licensing of software-embedded products. Existing statute also protects good-faith security research related to software-embedded products, so statutory changes outside of Digital Millennium Copyright Act Section 1201 aren’t needed, the office said. The CO is separately studying whether to seek legislative changes to Section 1201’s process for granting exemptions to the statutory ban on the circumvention of technological protection measures.
The study report “will prove invaluable to the Senate Judiciary Committee as we continue to work together to make informed policy choices that protect the interests of consumers, creators and innovators,” said Grassley and Leahy in a joint statement Friday. “In everything from Fitbit to farm equipment, we’ve seen a sweeping expansion of smart technology in recent years and the emergence of the new [IoT]. While this innovation presents new opportunities, it also poses important questions about privacy, consumer protection, public safety, cybersecurity, competition, and the development of the digital economy.”
The CO hasn’t concluded its Section 1201 study, but the results of the software-embedded products study indicate any legislative recommendations on Section 1201 are likely to be “pretty minimal,” said IP lawyer Jonathan Band in an interview. Band represents the Library Copyright Alliance and the Owners Rights Initiative (ORI) but spoke on his own behalf. The studies of Section 1201 and software-embedded products were “closely connected” because some issues overlapped between the two, so it’s possible the CO’s report on software-embedded products could be a precursor of the results of the Section 1201 study, said Copyright Alliance CEO Keith Kupferschmid.
It’s not surprising the CO decided against making legislative recommendations related to software-embedded products, Kupferschmid and others said. “That was our view” over the course of the study and it’s “certainly something that we support” now, Kupferschmid said. “The whole issue is a solution in search of a problem,” said Sentinel Worldwide CEO Steve Tepp. The Software & Information Industry Association believes the CO “did a good job with the record that it had collected” over the course of the study, said General Counsel Chris Mohr. “The conclusion they reached was by and large correct.” Existing copyright laws on software licensing “created an environment in which IoT has blossomed,” Mohr said. “It would be a mistake to revise them in the absence of any need for revisions.”
Band said he was “disappointed” in the CO’s conclusions about how copyright law affects software-embedded products, saying he detected a “degree of circularity” in the office’s reasoning. “They had an opportunity to move the ball forward and instead they punted,” he said. There seemed to be an “asymmetry in the burden of proof” the CO required from different parties, Band said. ORI and others came in with “boatloads of evidence” of problems with issues with the application of copyright law to software-embedded products, which the CO appears to have minimized in its report, Band said. Meanwhile, rightsholders’ testimony about online piracy was allowed to stand “without having to offer real proof,” he said.