Weekly Copyright Issues Wrap Up... March 28, 2014

weekly summary

Weekly copyright related summary of issues, congressional developments, judicial updates, administration updates, international updates and industry updates, provided courtesy of  American Continental Group (ACG).

Headlines and Highlights:

Both Chambers of Congress had an active week of working on copyright-related issues. There was marked progress on the House reauthorization bill for the Satellite Television Extension and Localism Act (STELA), followed by a Senate hearing on the issue. Next week, the House will continue the pre- April-recess push with hearings on preservation and reuse of copyrighted works, President Obama’s trade agenda, and the recent Administration decision to relinquish U.S. oversight of key Internet functions. On the judicial front, the Department of Justice (DOJ) secured its first conviction for mobile App pirates, and a Florida judge ruled that an IP address is not sufficient evidence to convict someone of piracy. In the Administration, the Department of Homeland Security (DHS) released numbers on its IP rights (IPR) enforcement activities for 2013. Across the pond, the European Union Court of Justice ruled that ISPs can block piracy websites, creating a legal framework for member states. On the industry front, the Motion Picture Association of America (MPAA) announced a record year for the film industry, with significant gains in revenues from overseas consumers. Continue reading for further details on this week’s news.

Congressional Updates:

  • At a markup on Tuesday, the House Energy and Commerce Subcommittee on Communications voted unanimously to advance Subcommittee Chairman Greg Walden’s (R-OR) bill to reauthorize the Satellite Television Extension and Localism Act. The Subcommittee approved the bill after accepting an amendment from Reps. Walden and Anna Eshoo (D-CA) to ease its limitations on the Federal Communications Commission. During the markup, Rep. Marsha Blackburn (R-TN) introduced and withdrew an amendment that would have established “fair pay” for all creators. The amendment would have required broadcasters using STELA’s retransmission consent system in negotiations with cable and satellite companies to pay “fair” royalties to play music on their radio stations. Rep. Blackburn accused the current system as “picking winners and losers in the market.”
  • On Wednesday, the Senate Judiciary Committee held a hearing on the reauthorization of STELA. The panel was comprised of witnesses offering varying perspectives on the issue, including the broadcast industry, the satellite industry, screenwriters and public interest groups. Both Committee Members and witnesses agreed that blackouts due to retransmission consent negotiations are a problem, but witnesses disagreed as to why they occur and how to stop them. Much of the discussion focused on localism and whether the Section 119 distant signal license is necessary in today’s video marketplace to promote localism. Witnesses from DISH and the Writers Guild of America believe that it is, while Marci Burdick, speaking on behalf of the National Association of Broadcasters, believes it is not. John Bergmayer of Public Knowledge voiced his opposition to compulsory licenses. In discussing both localism and competition, witnesses and Committee Members all noted how drastically the video marketplace has changed since STELA’s last reauthorization in 2010. During the hearing, Senator Al Franken (D-MN) stated his strong opposition to the Comcast and Time Warner merger. Witnesses Ellen Stutzman of the Writers Guild and John Bergmayer agreed with Senator Franken, saying that the merger would make Comcast too big of a gatekeeper for content.
  • The Senate Judiciary Committee has rescheduled a hearing on the impact of the Comcast- Time Warner Cable merger on consumers. The hearing was originally scheduled for next week, but will now be held on Wednesday, April 9th at 10:00AM.
  • The House Judiciary Subcommittee on IP has scheduled a hearing on Wednesday, April 2nd at 2:00PM on the “Preservation and Reuse of Copyrighted Works.” The Subcommittee will hear from witnesses on Section 108 and their views on how orphan works should be treated under copyright law. Witnesses will include:
    • Mr. Gregory Lukow, Chief, National Audio-Visual Conservation Center at The Library of Congress
    • Mr. Richard Rudick, Co-chair Section 108 Study Group

    • Mr. James Neal, Vice President for Information Services and University Librarian, Columbia University

    • Ms. Jan Constantine, General Counsel, Authors Guild

    • Mr. Michael Donaldson, International Documentary Association and Film Independent

    • Mr. Jeffrey Sedlik, President & CEO, PLUS Coalition
  • The House Judiciary Subcommittee on IP has also scheduled a hearing to examine if the Department of Congress should relinquish direct oversight over the Internet Corporation for Assigned Names and Numbers. The hearing is scheduled for Thursday, April 3rd at 10:00AM. A hearing on this issue will also occur before the House Energy and Commerce Subcommittee on Communications and Technology on Wednesday, April 2nd at 10:30AM.
  • The House Ways and Means Committee has scheduled a hearing on Thursday, April 3rd at 9:30AM to examine President Obama’s trade policy agenda. U.S. Trade Representative (USTR) Michael Froman will testify. In the press release announcing the hearing, Chairman Dave Camp (R-MI) is quoted as saying “trade promotion authority (TPA) is essential to concluding all of these [trade] efforts, and our bipartisan, bicameral [TPA reauthorization] bill empowers Congress and provides important direction from Congress to get these agreements done right. I call on the President to actively engage to secure broad bipartisan support for this bill.”
  • Later that same day, at 2:00PM, the Senate Finance Committee will hold a hearing on President Obama’s 2014 Trade Policy Agenda. USTR Froman will testify at that hearing as well.
  • On Thursday, a group of House Republicans introduced the Domain Openness Through Continued Oversight Matters (DOTCOM) Act in an effort to halt the recent National Telecommunications and Information Administration (NTIA)-announced transition of U.S. oversight on key Internet domain name functions. The bill was introduced by Reps. John Shimkus (R-IL), Todd Rokita (R-IN), and Marsha Blackburn (R-TN). In the announcement of the bill’s introduction, the lawmakers said “In the month of March alone we’ve seen Russia block opposition websites, Turkey ban Twitter, China place new restrictions on online video, and a top Malaysian politician pledge to censor the Internet if he’s given the chance... It is against our own national economic interest to relinquish control [of the Internet], especially without a clear path forward that will protect Internet freedom and American interests.” The NTIA defended its recent decision, saying it “has made clear that the transition proposal must have broad support and reflect the four key principles we outlined in our announcement... Before any transition takes place, the businesses, civil society and technical experts of the Internet must present a plan that ensures the uninterrupted, stable functioning of the Internet and its present openness.”
  • This week, Members of Congress announced the creation of the Transatlantic Trade and Investment Partnership (TTIP) Caucus. It will officially launch on April 3rd. Co-Chairs of the new caucus include: Reps. Bill Keating (D-MA), Richard Neal (D-MA), Erik Paulsen (R-MN) and Todd Young (R-IN). The caucus will allow lawmakers to come together and take leading roles in the process and debate surrounding TTIP negotiations.
  • Garrett Levin is the latest staff hiring on the Senate Judiciary Committee, where he will work on IP issues as part of the Chairman’s staff. Levin’s previous position was as an attorney at the USPTO. 

Judicial Updates:

  • Two men have pleaded guilty to charges over mobile App piracy brought by the DOJ, marking the first time the U.S. Government has secured such convictions. The men were accused of operating Appbucket.net, a website that illegally distributed over 1 million illicit copies of mobile Apps valued at more than $700,000.
  • Customers of Amazon and other e-book retailers began receiving small payouts this week from the $166 million antitrust settlement as a result of a verdict that found Apple and five book publishers guilty of e-book price collusion. The majority of customers received less than $10, with some receiving as little as 73 cents. Apple has not yet settled in the case and faces a trial in May to determine its damages owed.
  • A judge for the District Court for the Southern District of Florida ruled that an IP-address is not sufficient evidence for identifying a person guilty of online piracy. The ruling could have an impact on other piracy cases brought forth by rightsholders, as they often rely on this information as evidence. The judge said in her decision that “there is nothing that links the IP address location to the identity of the person actually downloading and viewing Plaintiff’s videos, and establishing whether that person lives in this district.” The case is Malibu Media, LLC v. John Doe.
  • On Wednesday, Michael Robertson, the former chief executive of MP3tunes, was ordered to pay an estimated $41 million in damages for infringing copyrights owned by former EMI Group members. MP3tunes was an online music storage firm before being shutdown following a copyright infringement lawsuit in 2000. The case is Capital Records Inc et al v. MP3tunes LLC et al, U.S. District Court, Southern District of New York, No. 07-09931.

Administration Updates:

  • The Copyright Office announced a new fee schedule covering registration, recordation, and related services; special services; Licensing Division services; and Freedom of Information Act services. The updated fee schedule will take effect on May 1 of this year. The final rule establishing the new fee schedule was published in the Federal Register and is available HERE. The Office has also instituted a separate, lower fee for single- author, single-work registration claims. More information is available HERE.
  • On Monday, DHS released its FY13 IPR enforcement statistics, reporting a 38% increase in the MSRP of seized goods (from $1.26 billion in FY12 to $1.74 billion in FY13) and a 7% increase in the total number of IPR seizures over FY12. DHS seized counterfeit and pirated goods from 74 source economies in FY13 with the People’s Republic of China accounting for 68 percent of all DHS IPR seizures by MSRP. Furthermore, coordinated law enforcement activities led by the National Intellectual Property Rights Coordination Center resulted in 693 arrests, 411 indictments, and 465 convictions for IPR crimes in FY13. The DHS press release on the new data is available HERE. 

International Updates:

  • Readly, a service being characterized by some as the Netflix for magazines, has launched in the UK. The service costs £10 for unlimited access on mobile devices to magazines from 14 publishers.
  • On Thursday, the European Union Court of Justice ruled that ISPs can block websites that illegally distribute copyrighted materials. The ruling follows similar verdicts in several EU member states. The Motion Picture Association’s European branch welcomed the court’s ruling. 

Industry Updates:

  • LA Times’ editorial board published an op-ed on Monday titled “Congress should bring copyright law into the 21st century.” The editorial board argues that the current state of copyright law is unfit given today’s technology. They argue that one possible solution to online piracy is “is for search services (e.g., Google) and copyright owners to find a way to allow the rapid removal of an extremely large number of links to sites that are offshore piracy hotbeds, cutting off much of their traffic.” That being said, the editorial board argues that copyright holders and companies must support “compelling legitimate services that can compete with infringers in the marketplace.” The full op-ed can be viewed HERE
  • On Sunday, the Wall Street Journal reported that Apple is in talks with Comcast about creating a streaming TV service for a future iteration of the company’s Apple TV product. According to the report, the service would allow Apple TV users to stream live, on-demand programming and video recordings from the cloud. The talks are in the early stages. The full Wall Street Journal article can be viewed HERE.
  • Lawrence Spiwak, President of the Phoenix Center for Advanced Legal & Economic Public Policy Studies, published an op-ed on Tuesday titled “Doing nothing is not an option to stop on-line piracy.” Spiwak writes “With the ability to make perfect digital copies of movies, books, music and software at zero cost, trying to stem the tide of on- line piracy is an uphill battle... Given the evidence, doing nothing about on-line piracy is not a viable policy option. If voluntary agreements fail, then Congress must act.” The full op-ed can be viewed HERE.
  • Steven Tyler of Aerosmith spent the earlier half of this week lobbying congressional offices and calling for stronger songwriter protections under copyright law. Following his meetings, he performed a concert on the Hill that was sponsored by the National Music Publishers Association. One specific issue Tyler lobbied on was the need for better protections for songwriters when it comes to others using their works in samples or mashups.
  • The number of DMCA takedown notices received by Google has increased by more than 700,000 percent over four years according to a paper published in the Virginia Journal of Law and Technology. The number of DMCA notices increased from 62 in 2008 to 441,370 in 2012. The paper, “The State of the Discordant Union: An Empirical Analysis of DMCA Takedown Notices” was written by Daniel Seng, a faculty member at Stanford Law School. The paper can be accessed HERE.
  • The New York Times published an article on Sunday titled “Lobbyists Set to Fight Royalty Bill for Artists.” The issue at hand is centered on the “American Royalties Too Act,” a bill introduced by Rep. Jerrold Nadler (D-NY) and Senator Tammy Baldwin (D- WI) that would provide resale royalties for artists whose works are sold in auction houses around the world. The article can be viewed HERE.
  • The MPAA reported a record year for the U.S. movie industry in 2013, during which overall revenues were up 4% over the same period in 2012. Revenues for the industry totaled $35.9 billion. The numbers were presented by the MPAA at the CinemaCon conference in Las Vegas, NV this week. The international market constituted 70% of the industry’s revenues and was led by the Chinese market, where income reached more than $3 billion in 2013. The full report on the theatrical market revenues for 2013 can be viewed HERE.