Disagreements Over Future of Digital Copyright Issues Voiced at Commerce Public Meeting
Copyright stakeholders disagreed over statutory damages for digital copyright infringement and the validity of secondary markets concerning the first-sale doctrine for digital goods, at a Commerce Department public meeting Tuesday. Some said statutory damages are exorbitant and discourage innovation online, while others see damages as a necessary tool for copyright holders. Another panel debated the merits of secondary markets for used online goods. Some said online secondary markets are no different from used-book stores and that consumers have a right to sell digital goods they legally purchase. Publishing rights holders see online secondary markets as a potential threat to their industry, especially if their artists aren’t compensated in the process. The meeting was to discuss stakeholder responses to the Commerce Department’s copyright green paper, released earlier this year (CD Nov 29 p11).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Stakeholders also discussed ways to improve the notice and takedown provision of the Digital Millennium Copyright Act and asked for more transparency from ISPs, search engines and rights holders. Register of Copyright Maria Pallante said Congress and the Copyright Office have “legal incentives” to improve the recordation process, which transfers copyright ownership, saying it will be a “major regulatory focus in 2014,” in a separate speech. There will be a “Federal Register notice” on recordation “early in the new year,” she said.
Rather than focusing only on how copyright statutory damages could hamper innovation, the “other half of the equation” is that statutory damages protect companies that pay for content, said Steven Tepp, president of Sentinel Worldwide, an intellectual property consulting firm. That kind of “binary framework” isn’t appropriate for statutory damages, said Markham Erickson, general counsel to the Internet Association, whose members include Amazon, AOL and eBay. He asked whether it was reasonable to make cloud services liable for copyright infringing material its users could store. There isn’t going to be a “purely licensed environment” where protections are always clear, Erickson said.
Some statutory damage awards are “cartoonish” and there needs to be ways of “minimizing costs” by “restructuring” the copyright regime, said David Sohn, general counsel at the Center for Democracy & Technology. Copyright law needs a more “variegated” system where additional evidence is needed to justify large statutory awards, said Peter Menell, a law professor at the University of California at Berkeley. The “range of statutory damages” is “intentionally wide,” said Tepp, saying Congress can’t legislate statutory damage law “in advance.” The “reality is that we have no substantial evidence” that there exists an “epidemic” of large statutory damage awards, he said.
The secondary market for used, physical books is different from secondary markets for e-books, whose condition is equal to the original online purchase, said Allan Adler, general counsel to the Association of American Publishers, in a panel on the first sale doctrine. John Ossenmacher, CEO of ReDigi, a company that sells used digital music, argued that once a rights holder is paid, the consumer is free to do with the product what they will, regardless of whether the item deteriorates (physical) or not (digital). However, “digital copies” will “degrade,” said Sherwin Siy, Vice President of legal affairs at Public Knowledge.
It’s “premature” to think the market wouldn’t be able to provide “downstream transactions” for digital goods, said John Villasenor, a public policy professor at the University of California-Los Angeles. Copyright stakeholders should rely on “intelligent, self-interested actors” to create viable secondary markets, rather than waiting on legislation to determine how these markets should work, said Siy. The technology to allow the first sale doctrine to “thrive” online exists today, said Ossenmacher. But copyright needs to adapt the cloud-based system, because it will probably store “everything we own” in the coming years, said Villasenor.
Adler wants to ensure that authors and publishers benefit from the continued use of digital goods in secondary markets; otherwise, rightsholders will view the first sale doctrine as little but “destructive,” he said. “Copyright owners don’t want there to be a secondary market, period,” said Ossenmacher.
The copyright community needs to “see more transparency on the rights holder’s side” of the notice and takedown provision, said Corynne McSherry, Electronic Frontier Foundation intellectual property director. Better outcomes would be achieved if transparency were “incentivized” for rights holders, said Christian Genetski, Entertainment Software Association general counsel.
Copyright protections shouldn’t be a “guise” to show preference for one group over another through search results, said Susan Cleary, Independent Film and Television Alliance general counsel. Copyright protections need to be “neutral,” she said. There also needs to be a “meaningful way for the targets of takedown notices” to communicate with the ISPs sending the notices, said David Snead, co-founder of the Internet Infrastructure Coalition. (jmcknight@warren-news.com)