Preempted Copyright Legislation on the Move in Several States

Earlier this year, New York state legislators introduced a bill (S2890, and its companion A5837-B) which would purport to create a compulsory license, requiring book publishers to offer licenses to libraries (on “reasonable terms”) for any ebooks they license to the public. Similar bills have also been introduced in other states, including HB 518 and SB 432 in Maryland, and H6246 in Rhode Island. In New York, A5837-B was reported out of Consumer Affairs and Protection and referred to Codes Committee last week, and in Maryland, the bills were just signed into law. Rightsholders are rightfully concerned at the notion of each state creating its own nuanced laws governing their copyright interests—it’s impractical and inefficient, and likewise leads to confusion and uncertainty amongst both rightsholders and the greater public.

In 1976, Congress revised the Copyright Act to establish (in 17 U.S.C. 301) a uniform federal copyright law that explicitly preempts any common law or state statute governing any of the rights afforded to creators under the Copyright Act (or equivalent rights). Section 301 states unequivocally that the federal statute governs “all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103…” In other words, states are prohibited from making laws governing rights like the distribution right afforded to copyright owners under section 106 of the Copyright Act, and no one is “entitled to any such right or equivalent right in any such work under …  statutes of any State.”In attempting to create a compulsory license by compelling publishers to license the distribution right to libraries, state legislation like A5837-B is preempted by federal copyright law.

Supporters of these bills argue that the legislation is not preempted because they regulate license terms, which in turn make them contract rights which are generally not considered “equivalent” to the rights afforded under section 106. It is inaccurate, however, to characterize these bills as “regulating licensing terms”—instead, these bills first purport to create a compulsory distribution license. To say that these bills regulate licensing terms would be to accept the premise that states have the power to create such compulsory licenses in the first place. They do not (nor do they have the power to regulate licensing terms in every instance). Section 106 of the Copyright Act grants copyright owners the exclusive right to distribute, and to authorize distribution, of their works, which inherently means the ability to decide whether, and to whom, to license their works. These ebook bills would govern an equivalent right by compelling publishers to grant distribution rights to those who otherwise would have no rights to the work.

In the legislative history of section 301, Congress explained that a uniform copyright law would “avoid the practical difficulties of determining and enforcing an author’s rights under the differing laws and in the separate courts of the various States.” It goes on to add that national uniformity in copyright protection is “essential” to carrying out the Constitutional intent given the technological progress that make methods for disseminating copyrighted works “incomparably broader and faster than they were in 1789.” Congress was correct and, today, there are far more and faster methods for dissemination than existed in 1976 when that statement was made. While the context of the recent bills relate to ebooks and audiobooks, this concern is not just limited to those works. Imagine the confusion among both rightsholders and users of copyrighted works if each state were able to legislate its own caveats, nuances, and special interests into copyright law. Each state could have different laws about reproducing photographs, distributing music, or even a consumer’s ability to re-sell a book at a yard sale—laws that could frustrate the Constitutional intent behind providing copyright protections to creators (as is the case with the ebook bills).

Whatever the issue these bills wish to address, attempting to compel licensing by publishers across the board, in direct conflict with their federal exclusive rights, is not the solution. This is especially true given the investment that goes into writing and publishing books. Copyright is considered the “engine of free expression” because it incentivizes not only the creation of new works, but the investment that goes into researching, writing, editing, revising, and publishing those works. The ability to decide to whom, and on what terms, to license the works in which they invested is a direct and critical part of this incentive structure, for authors, publishers, and all kinds of other creators.

When Congress opted to move from a dual system—under which states governed some portion of copyright law and the federal government governed the other—to a uniform federal system, it did so clearly and intentionally. Although it need not do so due to the Supremacy Clause, it took the extra step of specifically stating that upon enactment of the 1976 Copyright Act, “no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State” to prevent this kind of legislation. State lawmakers would be wise to go back to the drawing board and work with publishers, authors, and the library community to address concerns in a way that respects and does not interfere with the rights afforded to creators by Congress.