Blogs
August 1, 2024

July 2024 Roundup of Copyright News

by Rachel Kim

In July, several much-anticipated actions were taken on artificial intelligence and on other topics. The U.S. Copyright Office published a highly anticipated report on AI issues and new regulations relating to registration of news websites and termination rights. And, in the Senate, the NO FAKES Act was finally formally introduced. Here is a quick snapshot of some of copyright-related activities that occurred during the month of July as well as a few events to look forward to in August.

Copyright Alliance Blogs: The Copyright Alliance published a blog post of a mid-year review on AI case developments in 2024 thus far.

CCB Final Determinations Update: At the end of July 2024, the Copyright Claims Board (CCB) issued 28 final determinations. Claimants prevailed about 67% of the time and the average damage amount awarded by the CCB across all final determinations is $3,293. Nineteen percent of the final determinations issued by the CCB were issued in cases brought through the “smaller claims” process. The average time it took for the CCB issue a final determination from the time a claim was first filed is about 14 months. The average time it took for the CCB to issue a final determination from the time a case was first filed through a standard CCB proceeding is about 15 months, while for a case filed through the “smaller claims” process, the average time is about 10 months.

USCO Issues Final Rule on Termination Rights Under the MMA: On July 9, the U.S. Copyright Office (USCO) issued a final rule regarding how the Copyright Act’s derivative works exception to termination rights applies to the statutory mechanical blanket license established by the Music Modernization Act (MMA). The Office rejected arguments that it lacks appropriate statutory authority to make substantive evaluations on the termination issue, arguing that interpreting copyright law in the context of a statutory license has been a longstanding responsibility and duty. The Office also stated that the final rule is a “scaled-down version” of the supplemental notice of proposed rulemaking (SNPRM). Modifications include direction to The MLC to distribute royalties based on its records of who the copyright owner is at the time of payment, subject to certain instances, including if The MLC is notified of a different payee and scaling down on notice requirements for various types of ownership transfers by permitting The MLC to establish details for such notices.

USCO Publishes Final Rule on Group Registration of Updates to News Websites: On July 22, the U.S. Copyright Office published a final rule establishing a group registration option for frequently updated news websites (GRNW). The final rule was slightly modified from the proposed rule in §202.4(m)(6) to allow for an applicant to submit the first 25 pages of a homepage as the deposit copy in the case where a news website implements an “infinite scrolling” function. The Office also modified the final rule slightly as it will create a separate application for updates to news website claims that will be cloned from the current application form used to register group newspaper claims.

USCO Releases Report on Digital Replicas as Its First Report in Its Ongoing AI Study: On July 31, the U.S. Copyright Office (USCO) published its first report addressing digital replica issues as part of its ongoing copyright and Artificial Intelligence (AI) study. In the report, the Office proposes the adoption of new federal law to address digital replica issues to place liability on the distribution or making available of an unauthorized digital replica. The report proposes that the term of protection endure for at least an individual’s lifetime with limited postmortem protections and a balancing framework built into legislation to address free speech concerns. The report acknowledges the issues arising from AI outputs that deliberately imitate an artist’s style but does not recommend including style in legislation related to digital replica issues. In response to the USCO’s report, the U.S. Patent and Trademark Office (USPTO) announced that it will now work on submitting copyright-related recommendations to President Biden within 180 days, as required by the President’s Executive Order on AI.

USCO Announces Appointment of Malcolm Hawkins as Deputy Director of Operations: On July 15, the U.S. Copyright Office (USCO) announced the appointment of Malcolm “Hawk” Hawkins as Deputy Director of Operations for the U.S. Copyright Office. “Hawkins will assist the Assistant Register and Director of Operations with the Office’s strategic planning, financial management activities, and business processes.” Hawkins formerly worked as Chief of the Administrative Services Division at the Office since 2020 and has served as an advisor to the Register, providing oversight and coordination on human resource matters and labor relations, employee and workplace safety, personnel security, and facilities management. Prior to his tenure at the Office, Hawkins was on the Library of Congress’ Human Capital Advisory Board and worked in various roles at the Defense Human Resources Activity in the Department of Defense.

House Administration Committee Holds LOC Oversight Hearing: On July 10, the Committee on House Administration held a hearing titled Oversight of the Library of Congress, featuring Librarian of Congress Dr. Carla Hayden as the sole witness. The Committee reviewed and evaluated the operations, initiatives, and strategic plans of the Library of Congress (LOC). This included discussing the progress of digitization efforts, cybersecurity measures, public engagement, educational outreach, and the allocation of funding and resources. Representative Morgan Griffith (R-VA) raised concerns over the U.S. Copyright Office’s proposed rule to expand access to electronic deposit copies of published copyrighted works and the implications the proposed rule could have on copyright owners’ rights in digitized versions of their works. Dr. Hayden responded by saying, “The Library of Congress uses digitized content in a very responsible manner and fair use …We are working very diligently with the Copyright Office on their continuous development of their registration system. That’s the hardest part of what they have been doing in terms of modernizing. And so to bring up different issues and concerns at this point is very timely. We have a public stakeholder group. They’ve been bringing up a lot of things too.”

Pro Codes Act Considered by Full House: On July 22, H.R. 1631, the Protecting and Enhancing Public Access to Codes (Pro Codes) Act narrowly failed to pass (248-127) the House of Representatives when it was taken up on suspension (in which 2/3 of “yes” votes are required to pass the bill through). The bill clarifies that model codes and standards do not lose copyright protection by virtue of having been adopted or incorporated by reference into law or regulation, provided that the codes/standards are accessible to the public.

House Financial Services Committee Holds AI Hearing: On July 23, the House Financial Services Committee held a hearing titled AI Innovation Explored: Insights into AI Applications in Financial Services and Housing. Witnesses included John Zecca, Executive Vice President, Global Chief of Legal Risk and Regulatory Officer, NASDAQ; Ondrej Linda, Senior Director, Personalization AI, Zillow; Elizabeth Osborne, Chief Operations Officer, Great Lakes Credit Union; Frederick Reynolds, Deputy General Counsel for Regulatory Legal and Chief Compliance Officer, FIS Global; Vijay Karunamurthy, Chief Technology Officer, Scale AI; and Lisa Rice, President and CEO, National Fair Housing Alliance. The hearing examined the impacts of rapidly evolving AI on the financial services and housing industries to balance the benefits of the technology while safeguarding against associated risks. Of note, Representative Scott Fitzgerald (R-WI) asked the panel of witnesses if safeguards are in place to address copyrighted material, and any instances in which the panelists would want a patent on their AI uses. Karunamurthy emphasized the importance of understanding IP rights when developing and training AI and said testing and evaluating models is the only way to be sure they do not contain problematic material or violate IP laws. Representative Andy Ogles (R-TN) asked the panel about the implications of AI on the music industry, saying that there needs to be a balance between AI upholding creators’ rights without stifling innovation. The response was a general discussion among panelists, who found common ground by drawing parallels between the music industry and the financial services sector. The panelists discussed that with the benefits of AI comes a need for robust regulation that protects IP rights for creators without overregulation.

NO FAKES Act Introduced in Senate: On July 31, The Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act of 2024 was introduced by Senators Chris Coons (D-DE), Amy Klobuchar (D-MN), Marsha Blackburn (R-TN), and Thom Tillis (R-NC). The bill would hold individuals or companies liable for producing, hosting, or sharing a digital replica of an individual performing in an audiovisual work, image, or sound recording that the individual never actually appeared in or otherwise approved—including digital replicas created by generative AI. The bill is supported by SAG-AFTRA, the Recording Industry Association of America, the Motion Picture Association, the Recording Academy, OpenAI, IBM, The Walt Disney Company, Warner Music Group, Universal Music Group, the Authors Guild, the Human Artistry Campaign, and others. More information is available in the bill’s one-pager and section-by-section summary.

U.S. District Court Issues Website Blocking Orders: On July 8, the district court for the Central District of California issued an order to amend a default judgment that was granted for plaintiff, MG Premium Ltd., which had sued over the infringement of its adult movies by the operators of a pirate website, GoodPorn. The court amended a prior default judgment awarded to plaintiff by increasing the damages award, increasing the award of attorneys’ fees, and granting a permanent injunction that includes orders for Online Service Providers to block access for U.S. users to defendant’s website.

Record Labels Sue Verizon for Copyright Infringement: On July 12, a group of record labels, including UMG Recordings, Inc., Sony Music Entertainment, Warner Music, and others, filed a complaint against Verizon in the Southern District of New York over allegations that Verizon facilitated its subscribers’ infringements of plaintiffs’ songs through the continued provision of its high-speed Internet service and knowingly contributed to, and reaped substantial profits for, its subscribers’ massive copyright infringements, all without enforcing a repeat-infringer policy. The complaint details that more than 340,000 infringement notices were sent to Verizon since early 2020, and that thousands of Verizon subscribers were the subject of 20 or more notices from the plaintiffs while more than 500 subscribers were the subject of 100 or more notices. The plaintiffs allege that despite these notices, Verizon deliberately chose to ignore them. The plaintiffs, who are represented by Copyright Alliance Legal Advisory Board Member, Oppenheim + Zebrak, LLP, are seeking statutory damages, the total of which could exceed $2.6 billion.

Fifth Circuit Dismisses CSA’s Infringement Claim in Suit Against Gordon Knight: On July 16, the Fifth Circuit Court of Appeals ruled against Canadian Standards Association (CSA) in its lawsuit against an individual, Gordon Knight, over his copying and sales of competing versions of seven of CSA’s standards and codes that had been fully incorporated by reference into Canadian law. The court held that applying the Fifth Circuit’s prior holding in Veeck v. Southern Building Code Congress International, Inc., Knight’s copying and selling CSA’s copyright protected model codes, adopted by reference into law by the Canadian government, did not constitute copyright infringement. Importantly, the court also held that the holding in Veeck applied to CSA’s codes because they were codes that were developed for the purposes of being incorporated by reference into law and not “extrinsic standards,” which are developed by private groups for reasons other than incorporation into law. The court reversed the district court’s summary judgment decision and remanded the case to grant summary judgment in favor of Knight and to dismiss CSA’s infringement claim.

SoundExchange Sues AccuRadio Over Unpaid Royalties: On July 19, SoundExchange filed a complaint against a free, ad-supported music streaming service called AccuRadio over allegedly unpaid royalties owed to SoundExchange. According to the complaint, AccuRadio had paid royalties to SoundExchange, but payment slowed down in 2016 and completely stopped in 2018. The parties had entered into a forbearance agreement for the outstanding amount of royalties due to SoundExchange, but after three months under the agreement, the defendant allegedly defaulted on subsequent due payments.

Court Holds Renewal and Termination Rights Apply to Foreign Rights Granted as “Worldwide” Rights: On July 12, the district court for the Middle District of Louisiana held that renewal and termination rights apply to foreign copyrights where the original grant of rights was for “worldwide” rights. In Vetter v. Resnik, Cyril Vetter and Don Smith co-authored a song called “Double Shot (of My Baby’s Love)” and assigned their copyright interests to Windsong Music Publishers (Windsong), granting Windsong exclusive “worldwide” rights to the song for the full term of copyright protection. Plaintiff in the case, Smith’s heir’s successors-in-interest, sent a notice of termination to Windsong’s successor and brought a lawsuit against the defendant, requesting a declaratory judgment that plaintiff owned worldwide rights to the song. Defendant filed a motion to dismiss, arguing that plaintiffs had only recaptured U.S. rights. The court determined that because the grant of the renewal right from the original songwriters included worldwide rights, the renewal right applied equally to U.S. and worldwide rights. On termination rights, the court concluded: “[i]t plausibly and logically follows that a termination of a worldwide grant results in the recapture of worldwide rights; in other words, worldwide rights were covered by the terminated grant, so worldwide rights revert upon termination.” More information is available in this summary prepared by Eric J. Schwartz & Rebecca Benyamin of Mitchell Silberberg & Knupp LLP, a Copyright Alliance Legal Advisory Board Member.

Three Individuals Sentenced to Prison for Software Piracy: On July 26, the U.,S. Department of Justice announced that three individuals were sentenced this summer for running an international criminal operation involving the sale of tens of thousands of pirated business telephone system software licenses with a retail value of over $88 million. Raymond Bradley “Brad” Pearce was sentenced to four years of prison and ordered to forfeit $4 million. Dusti O. Pearce was sentenced to one year and a day in prison and ordered to forfeit $4 million. Jason M. Hines was sentenced to one year and six months in prison and an additional 18 months of home confinement, and ordered to forfeit $2 million. In addition, the three defendants agreed to pay restitution totaling $32 million. Pearce, who was a long-time customer service employee at the business communications company, Avaya, used his credentials to generate tens of thousands of software license keys that controlled access to Avaya’s copyright protected software, which he sold to Hines and other customers and resellers around the world.

Hong Kong Government Proposes TDM Exception in Copyright Law for AI Use: On July 8, Hong Kong’s Commerce and Economic Development Bureau’s Intellectual Property Department launched a public consultation on generative AI and copyright law issues, including (1) copyright protection of AI-generated works; (2) copyright infringement liability for AI-generated works; (3) possible introduction of specific copyright exceptions; and (4) other issues relating to generative AI. A section of the public consultation paper proposes the introduction of a new exception to Hong Kong copyright law to permit text and data mining (TDM) for the development, training, and enhancement of AI models. Comments for the public consultation are due by September 8. The government will also hold an in-person public forum on August 2 about the consultation.

EU Act Officially Published and Takes Effect Today: On July 12, the European Union’s AI Act was published in the EU Official Journal, and enter into force across all EU Member States on August 1, 2024. The final text includes obligations that a generative AI provider provide a detailed summary of content used in its AI training process.

UK Police Authorities and Anti-Piracy Group Efforts Result in Identifying and Arresting Commercial Pirate IPTV Operators: The UK anti-piracy group, FACT, announced that in coordination with UK police, 40 illegal IPTV operators were identified, investigated, and served with official cease-and-desist warnings to halt illegal activities. FACT also announced that during the course of investigations and a broader anti-piracy campaign, three warrants were served, leading to the arrest of three individuals for the sale and distribution of smart TV devices and Firesticks that were preloaded with pirated copyrighted content. 

EUIPO Releases Third Edition Report on Criminal Legislative Measures to Combat IP Infringement: On July 29, the European Union Intellectual Property Office (EUIPO) released the third edition of its report studying legislative measures regarding IP enforcement. The report details fictional enforcement scenarios for combatting criminal copyright infringement and the applicable jurisdictional laws and remedies to address criminal copyright liabilities, including for online copyright piracy, IPTV copyright piracy, and cyber-squatting fraud.

CCC Launches Collective Licensing Solution for Content Usage in Internal AI Systems: On July 16,the Copyright Clearance Center (CCC) announced that its Annual Copyright Licenses now offer AI re-use rights, providing a first-ever collective licensing solution for participating rightsholders to allow their copyrighted materials to be used within AI systems for internal use. “Responsible AI starts with licensing, and in developing this license, CCC enables users to efficiently gain access to a consistent set of rights across many rightsholders and returns royalties to rightsholders as compensation for use of their works,” said Tracey Armstrong, CCC President and CEO.

Save the Date For…

USCO Webinar on How to Level Up Your Copyright Public Records Search: Today, on August 1 at 2 p.m. ET, the U.S. Copyright Office is hosting a public webinar titled How to Level Up Your Copyright Public Records Search. During the one-hour session, the Copyright Office will share ways to search copyright public records using the Office’s Copyright Public Records System (CPRS) pilot, which is “an easy to-navigate, highly searchable database.” The webinar will also include a live demonstration of the CPRS pilot’s search capabilities. Attendees will learn how to conduct simple and advanced searches and gain information on supplemental research and support services that the Office offers to the public. There will be a question and answer session at the conclusion of the webinar. More information is available on the registration page.

Copyright Alliance Free Webinar: Photographers’ Rights: Navigating Copyright Realities: On August 8 from 2-3:30 p.m. ET, the Copyright Alliance is hosting a free webinar titled Photographers’ Rights: Navigating Copyright Realities where photographers will learn how their works are protected by copyright, get practical tips for enforcing their rights against online infringement, and learn about the hot-topic copyright issues affecting photographers today, including the profound impact of AI on their creative craft.

USPTO Public Roundtable on AI and Protecting Name, Image, and Likeness: On August 5from 9 a.m. to 4:30 p.m. ET, the U.S. Patent and Trademark Office (USPTO) will hold a roundtable, titled Protecting NIL, Persona, and Reputation in the Age of Artificial Intelligence. The roundtable will seek public input on whether existing laws protecting an individual’s reputation and existing laws prohibiting unauthorized use of an individual’s name, image, voice, likeness, or other indicia of identity are sufficient given the development and proliferation of AI technology. The roundtable will consist of an in-person session and a separate virtual session. Additional information on the roundtable is available on the registration page.

White House Creator Economy Conference: On August 14, the White House will host its first-ever White House Creator Economy Conference (WHCEC). According to the event press release, the conference will “convene a group of digital creators and industry professionals to discuss the most pressing issues within the creator economy today — including privacy, fair pay, AI, mental health, and more.” The conference will also allow members of the Administration to learn from creators and industry professionals and gain insight on how various issues are impacting their lives to inform policy decisions.

Nashville Arts & Business Council Webinar on the CCB and Other USCO Resources for Creators: On August 22 from 11-12:15 p.m. CT, The Arts & Business Council of Greater Nashville is hosting a webinar titled Copyright Essentials for Artists, Musicians, and Creatives: An Overview of the Copyright Claims Board (CCB) and U.S. Copyright Office Resources. The webinar will enable participants to explore the resources provided by the CCB and the U.S. Copyright Office, all of which are designed to support their work. The session will cover fundamental aspects of copyright law, offering a clear understanding of its principles and applications specifically for creative and legal professionals. Panelists include Jessica Chinnadurai, Attorney Advisor in the Office of Public Information and Education, U.S. Copyright Office; Monica McCabe, Copyright Claims Board Officer, U.S. Copyright Office; and Whitney Levandusky, Supervisory Copyright Claims Attorney for the Copyright Claims Board, U.S. Copyright Office. Council Webinar on the CCB and Other USCO Resources for Creators. More information is available on the registration page.

If you aren’t already a member of the Copyright Alliance, you can join today by completing our Individual Creator Members membership form! Members gain access to monthly newsletters, educational webinars, and so much more — all for free!

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