Changes Ahead Inwards U.S. Copyright Statutory Damages Police

The U.S. Department of Commerce’s Internet Policy Task Force  (the Task Force), which is led yesteryear both the U.S. Patent as well as Trademark Office (USPTO) as well as the National Telecommunications as well as Information Administration (NTIA), published on Jan 28 a  White Paper on Remixes, First Sale, as well as Statutory Damages which addresses iii issues:

1)      the legal framework for the creation of remixes;

2)       the relevance as well as reach of the offset sale doctrine inwards the digital environment; and

3)      the application of statutory damages inwards the context of private file-sharers as well as secondary liability for large-scale online infringement.

The Task Force had published a Green Paper, “Copyright Policy, Creativity, as well as Innovation inwards the Digital Economy” on July 31, 2013, which had identified these iii issues warranting farther review yesteryear the Task Force.  

The Task Force so published a Notice inwards the Federal Register seeking comment on these issues. It conducted a public meeting inwards Dec 2013 as well as also held roundtables simply about the U.S., earlier reviewing comments from stakeholders equally various equally rights holder organizations, Internet-based companies, populace involvement groups, libraries, academics, as well as private authors as well as artists.

Remixes

Remixes purpose existing works, some of them soundless protected yesteryear copyright, to create novel works, which may locomote compilations or derivative works nether the Copyright Act, or collective works.  As noted yesteryear the Task Force, user generated content (“UGC”) “has overstep a hallmark of the Internet” (p.6).

Some of the remixes, such equally fan fiction as well as fan videos, are created yesteryear non-professionals, spell others, such equally music mashups, are created yesteryear professionals as well as may fifty-fifty locomote sold. Several stakeholders noted that “the lines betwixt amateur as well as professional, as well as betwixt noncommercial as well as commercial, are oft blurred” (p. 7). Others noted that “noncommercial activities tin drive harm to the marketplace position for the master copy run or for licensed derivative works” (p.8).

Some remixes are fair use, some are not, as well as determining what is fair purpose or non is non easily determinable, fifty-fifty yesteryear attorneys or yesteryear courts, equally noted yesteryear some stakeholders (p.10). The Copyright Office maintains an online fair purpose index to help create upwardly one's take away heed whether a item purpose may locomote fair or not, but this tool lonely does non render an absolute decision of whether a item purpose is fair or not.

The Task Force did non believe that a compulsory license, such equally the 1 provided yesteryear department 115 of the Copyright Act for phono records, would locomote advisable. At the fourth dimension this compulsory license was enacted, 1 fellowship had the monopoly on the pianoforte curl market, as well as the Task Force has non seen bear witness that a similar monopoly exists today for remixes or their licensing.

Also, such compulsory licenses would allow the creation of derivative works, whereas statutory licenses similar a shot solely permit reproducing, distributing, as well as populace functioning of the licensed work, without modification (p. 26). While the Task Force acknowledged that remixes are “valuable contributions to society… the tape has non established a demand to amend existing constabulary to create a specific exception or a compulsory license for remix uses” (p. 4).

Instead, the Task Force recommends iii goals to locomote pursued so that remixers would sympathize when a purpose is fair or not, as well as to sympathize how to obtain licenses.

These iii goals are:  

1.       developing negotiated guidelines which would render greater clarity equally to the application of fair purpose to remixes;

2.       expanding the availability of a wider diversity of voluntary licensing options; and

3.       increasing educational efforts aimed at broadening an agreement of fair use.

The guidelines could locomote developed independently or alongside the collaboration of the regime (p. 28) as well as should locomote written inwards linguistic communication easily understandable yesteryear the full general populace (p.29). The White Paper notes that such guidelines already exist, such equally the Principles for User Generated Content Services which aims at “foster[ing] an online surround that promotes the promises as well as benefits of UGC Services as well as protects the rights of Copyright Owners.”

As licensing would stay voluntary, authors as well as rights holders would receive got the selection to reject granting a license, “especially when the prospective licensee is seeking permission for a purpose that the writer or rights holder considers offensive” (p. 30).

Influenza A virus subtype H5N1 stakeholder gave the illustration of the Beatles Hey Jude vocal used to create an Anti-Semitic run (see banking concern notation 44 of the White Paper). But such squall upwardly purpose would likely locomote fair use, as well as protected yesteryear the First Amendment. Only granting authors a moral correct would allow them to bar every purpose they honor offensive. By the way, what is “offensive”?  The Beatles illustration would locomote considered offensive yesteryear many, if non all, but what almost purpose of a protected run to comment on issues where opinions diverge more, such equally political opinions?

First Sale Doctrine

The Task Force noted that plant distributed online are oft licensed, non sold, as well as “this could brand the resale marketplace position obsolete” (p. 35). Some stakeholders noted that the contractual terms of such licenses are oft “opaque” (p.39).

Libraries expressed concerns that their purpose of digital plant may locomote limited, including eBook library loans (p. 47). Indeed, libraries may solely lend books cheers to the offset sale doctrine, but the Task Force believes that “early regime intervention into the eBook marketplace position could skew the evolution of innovative as well as mutually beneficial arrangements” betwixt eBook publishers as well as libraries. However, this may alter if libraries are non able to “appropriately serve their patrons due to overly restrictive terms imposed yesteryear publishers” (p.4).

In monastic nation to preserve the offset sale doctrine inwards the online environment, the Task Force believes it is non advisable to extend the offset sale doctrine to digital transmissions of copyrighted works, because of the risks that would drive to copyright owners’ primary markets. 

The Task Force noted that digital plant are offered at lower prices than the hard copies of the plant as well as hence deliver the produce goodness offered yesteryear the offset sale doctrine to consumers who may buy used books as well as used copies of protected plant at a lower toll (p.58).

While consumers are non allowed to resell their digital copies, “[i]t is difficult… to determined the value of this lost benefit” equally the Task Force does non receive got “sufficient information to comport an authoritative  cost-benefit analysis of the trade-offs betwixt the consumer benefits from the offset sale doctrine as well as from licensed online services”(p. 59).

So U.S. constabulary is non (yet) cook to authorize the resale of digital goods.  

Statutory Damages

Statutory damages receive got been applied against individuals sharing files online as well as against online services found to locomote secondarily liable for such infringements. Remix artists oft refrain from using a protected work, fifty-fifty they believe their purpose is fair, equally fair purpose tin non locomote accurately predicted as well as “the threat of high statutory damages tin stifle lawful activity” (p.33). Some stakeholders also argued that statutory damages receive got a chilling consequence on invention as well as investment (p.80), an assessment disputed yesteryear some correct holder groups (p. 81).  

Statutory damages receive got also allowed the evolution of a noxious “business model” of massive copyright infringement suits (aka copyright trolls), which abuse the litigation procedure yesteryear filing hundreds of boilerplate copyright infringement suits, using the subpoena mightiness of the courts to honor the identity of Internet users. These suits are, however, rarely litigated, but instead are settled afterwards intimidating correspondence (p. 74).

The Task Force recommends iii amendments to the Copyright Act so that the needs of copyright owners, users, as well as intermediaries may locomote meliorate balanced:

First, the Task Force recommended that Congress add together a novel paragraph inwards Section 504 of the Copyright Act to render a listing of factors for courts as well as juries to consider when determining the amount of a statutory damages award. It proposed the insertion of this novel clause inwards subsection Section 504(c): (p.87)

FACTORS TO CONSIDER -- In making whatsoever accolade nether this subsection, a courtroom shall consider the next nonexclusive factors inwards determining the appropriate amount of the award:

(1) The plaintiff’s revenues lost as well as the difficulty of proving damages.

(2) The defendant’s expenses saved, profits reaped, as well as other benefits from the infringement.

(3) The demand to deter hereafter infringements.

(4) The defendant’s fiscal situation.

(5) The value or nature of the run infringed.

(6) The circumstances, duration, as well as reach of the infringement, including whether it was commercial inwards nature.

(7) In cases involving infringement of multiple works, whether the full total of damages, taking into job concern human relationship the number of plant infringed as well as number of awards made, is commensurate alongside the overall harm caused yesteryear the infringement.

(8) The defendant’s terra firma of mind, including whether the accused was a willful or innocent infringer.

(9) In the illustration of willful infringement, whether it is appropriate to punish the accused as well as if so, the amount of damages that would final result inwards an appropriate punishment.

The Task Force explained that these factors “should be weighted holistically” (p. 88).

Secondly, the Task Force recommended amending Section 401(d) as well as 402 (d) of the Copyright Act to expand eligibility for the lower “innocent infringement” statutory damages awards (p. 97).

Thirdly, the Task Force recommended giving courts discretion to assess statutory damages other than on a strict per-work footing inwards cases of non-willful secondary liability for large scale online services (p. 97).

Small Claims Tribunal

The Task Force is also inwards favor of establishing a small-scale claims tribunal, equally it believes this “could help diminish the opportunity of disproportionate levels of damages against private file-sharers” (p.5). This has been proposed yesteryear the Copyright Office itself.

The tribunal would locomote centralized, inwards a unmarried location, as well as would render for a cap on awards of both statutory as well as actual damages. There would locomote limited uncovering as well as counterclaims, as well as all relevant defenses could locomote asserted, including fair use. Also, it would non locomote mandatory to locomote represented yesteryear an attorney, as well as the tribunal could accolade costs as well as fees against frivolous litigants (p. 99). This is a really interesting proposal as well as I hope it volition locomote implemented soon.