From the courthouse, to the House and Senate floors, there was hardly a dull moment for copyright in 2018. Let’s take a chronological look back at some of 2018’s biggest copyright law and policy moments.
Group Registration of Photographs Limited to 750 Images per Application
There’s certainly been no shortage of federal register notices issued by the U.S. Copyright Office this year, so it’s only right that this blog post begins with one of the first notices issued this year. On January 18, Copyright Office published its final rule changing the procedure for filing group registrations for both published and unpublished photographs, requiring applicants to use electronic applications in lieu of paper, and introducing a limit of 750 photographs per application. The rule also eliminated both the unpublished collection option and the pilot program, which had previously allowed applicants to register an unlimited number of unpublished and published photographs, respectively. Although the notice was issued in January, the rule went into effect on February 20, 2018.
Southern District of NY Rejects Ninth Circuit Server Test
On February 15, in Goldman v. Breitbart, a case concerning “how images shown on one website but stored on another website’s server implicate an owner’s exclusive display right,” the U.S. District Court for the Southern District of New York granted the photographer’s partial motion for summary judgment, stating that “when defendants caused the embedded Tweets to appear on their websites, their actions violated plaintiff’s exclusive display right; the fact that the image was hosted on a server owned and operated by an unrelated third party (Twitter) does not shield them from this result.” Rejecting the “Server Test” articulated by the Ninth Circuit in Perfect 10 v. Amazon, the Court said “[t]he plain language of the Copyright Act, the legislative history undergirding its enactment, and subsequent Supreme Court jurisprudence provide no basis for a rule that allows the physical location or possession of an image to determine who may or may not have “displayed” a work within the meaning of the Copyright Act.”
Second Circuit Issues Decision in Fox News v. TVEyes
In late February—nearly a year after oral arguments took place—the U.S. Court of Appeals for the Second Circuit issued its highly anticipated decision in Fox News v. TVEyes, a case about whether TVEyes’ subscription service allowing users to view, download, and email (“Watch Function”) ten-minute clips of Fox’s programming qualified as fair use. Finding in favor of Fox News, the Court held that the Watch Function did not amount to fair use. The court held that the first fair use factor favored TVEyes “only slightly” after finding that “the [Watch] function does little if anything to change the content itself or the purpose for which the content is used, its transformative character is modest at best.” However, the Court held that the third and fourth factors strongly favored Fox News because the Watch Function “allows TVEyes’s clients to see and hear virtually all of the Fox programming that they wish” which “usurp[s] a function for which Fox is entitled to demand compensation under a licensing agreement.”
This was a major win, not just for Fox or broadcast television, but for the copyright community as a whole. Had the Second Circuit allowed the district court’s ruling in favor of TVEyes to stand, it would have stretched the bounds of fair use far beyond what the statute permits, in turn, stifling the very creativity that the Copyright Act is intended to foster. The Copyright Alliance filed an amicus brief in this case, drafted by Barry Slotnick and Jonathan Neil Strauss of Loeb & Loeb, elaborating on these concerns.
Federal Circuit Rules No Fair Use for Google’s Use of Oracle’s Java APIs
On March 27, in Oracle v. Google—a case alleging that Google’s use of Oracle’s Java APIs in the Android platform infringed Oracle’s copyright—the Federal Circuit, reversing the lower court, held that Google’s use did not constitute fair use as a matter of law, and remanded the case for a trial on damages. On the first factor, the Court rejected Google’s argument that using the APIs in a smartphone context was transformative enough while on the fourth factor, the Court held that Google effectively prevented Oracle from accessing the potential mobile devices market for the APIs. The Court stated that “[t]here is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform” and that Google’s “superseding use is inherently unfair.” The decision was consistent with the arguments the Copyright Alliance advanced in our amicus brief, drafted by Kenneth Doroshow and Erica Ross of Jenner & Block.
Copyright Office Proposes New Fee Schedule
Toward the end of May, the U.S. Copyright Office published a notice of proposed rulemaking proposing a new fee schedule for its services. The schedule proposed a significant increase in fees (averaging 41%)—in addition to raising fees for electronic standard applications from $55 to $75, the proposed schedule also included an increase in fees for group registration of published photographs (“GRPPH”) and group registration of unpublished photographs (“GRUPH”) from $55 to $100, and an increase from $80 to $95 for electronic applications of group registration of newspapers and newsletters, among other changes. The Copyright Alliance filed comments highlighting the importance of the registration process and ensuring that fees do not create a barrier that discourages creators from registration, while suggesting avenues the Office might consider to cut its costs and add value to the registration process.
SCOTUS Grants Cert in Fourth Estate Case
On June 28, the Supreme Court announced its decision to grant cert in Fourth Estate Public Benefit Corp v. Wall-Street.com, where the question presented is “Whether a copyright owner may commence an infringement suit after delivering the proper deposit, application, and fee to the U.S. Copyright Office, but before the Register of Copyrights has acted on the application for registration.” The Copyright Alliance filed an amicus brief, drafted by Matthew Williams and Eric Schwartz of Mitchell Silberberg and Knupp, arguing that a copyright owner satisfies the Copyright Act’s registration prerequisite for filing an infringement lawsuit when she submits her application materials to the Copyright Office, contrary to the lower court’s holding that the copyright owner must wait until the Copyright Office either accepts or denies the application before going to court, a process that currently takes an average of 7-9 months. We argue that this rule is better supported by the statute, achieves the objectives of Congress, and supports the policies underlying the Copyright Act. The lower court’s rule, on the other hand, causes significant harms to authors and copyright owners. Oral arguments in this case were held before the Supreme Court earlier this week.
ART Act Introduced in the House and Senate
On September 25, the American Royalties Too Act of 2018 (ART Act) was introduced in the Senate—by Senators Orrin Hatch (R-UT) and Patrick Leahy (D-VT)—as well as in the House—by Representatives Jerry Nadler (D-NY) and Doug Collins (R-GA). The legislation would amend the Copyright Act to provide creators of visual art a royalty (5% of the price paid for their art) when it is resold at auction. In a statement, Senator Hatch said “Collectors and auction houses make millions when art is resold. It’s only fair that the artist who created the work in the first place receive a share as well. The ART Act will help remedy this injustice by giving artists the right to a share of the proceeds when the art they create is later resold at auction. It will help ensure artists get a fair shake.” Representative Nadler added “I have been introducing the ART Act since 2011 and I’m proud to join my colleagues in introducing this bipartisan, bicameral version of the legislation this congress.”
Hearing on the Register of Copyrights Selection and Accountability Act
On September 26, the Senate Rules and Administration Committee held a hearing on H.R. 1695 and S. 1010, the Register of Copyrights Selection and Accountability Act. Copyright Alliance CEO Keith Kupferschmid testified, as did Jonathan Band, a representative of the Library Copyright Alliance. A recording of the hearing is available here.
CASE Act Hearing Before the House Judiciary Committee
The very next day, the House Judiciary Committee Held a Hearing on H.R. 3945, the Copyright Alternative in Small-Claims Enforcement Act of 2017—a bill that would create a voluntary copyright small claims “court” within the U.S. Copyright Office. Copyright Alliance CEO Keith Kupferschmid testified at this hearing as well, alongside Professional Photographers of America (PPA) CEO David Trust, and photographer Jenna Close. Representatives from the Internet Association and Computer and Communications Industry Association (CCIA) also testified. You can watch a recording of the hearing here.
SCOTUS Grants Cert in Rimini Street v. Oracle
Also on September 27, (this proved to be an extremely busy week for copyright) the Supreme Court granted cert in Rimini Street v. Oracle. Rimini Street was found liable for infringing the copyright in Oracle’s software and appealed a Ninth Circuit decision awarding Oracle attorney’s fees and costs. The question to the Supreme Court is “Whether the Copyright Act’s allowance of ‘full costs,’ 17 U.S.C. § 505, to a prevailing party is limited to taxable costs under 28 U.S.C. §§ 1920 and 1821, as the U.S. Courts of Appeals for the Eighth and Eleventh Circuits have held, or whether the Act also authorizes non-taxable costs, as the U.S. Court of Appeals for the 9th Circuit held.” The Copyright Alliance filed an amicus brief arguing that §505 of the Copyright Act does not limit what costs a court may award to a prevailing party in a copyright infringement case. Allowing recovery of full costs aids copyright owners in protecting their rights through litigation, particularly in circumstances where the primary relief sought is injunctive and therefore no significant monetary recovery is expected to offset the costs. Our brief was drafted by Eleanor Lackman and Sara Gates of Cowan, DeBaets, Abrahams & Sheppard. The Supreme Court will hear arguments in this case on January 14.
Marrakesh Treaty Implementation Act Signed into Law
On October 10, the Marrakesh Treaty Implementation Act, which facilitates access to published literary works for persons with print disabilities, was signed into law. In a statement, Maria Pallante, president and CEO of the Association of American Publishers (AAP) said, “AAP worked tirelessly to find agreement within the copyright, disabilities, and library communities to finally bring the long process for ratification and implementation of the Treaty by the United States to fruition. Now we look forward to working with our members and these communities to ensure that the Treaty works to effectively provide cross-border access to accessible format copies of literary works in many different languages to people who need them all around the world.”
Music Modernization Act Becomes Law
On October 11, President Trump signed the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA) into law. The legislation combined three previously introduced music bills: the Musical Works Modernization Act (previously known as the Music Modernization Act), the CLASSICS Act, and the AMP Act—in a major overhaul of music copyright law. Some of the highlight of the new law include that it: guarantees digital radio royalties for recording artists of pre-1972 sound recordings; creates a new blanket mechanical license system for digital streaming of musical works; creates a new collective will administer the blanket mechanical license; reforms public performance rate proceedings for musical works; and allows sound recording royalties to be paid directly to studio professionals. Prior to being signed into law by the president, the bill passed unanimously in Congress.
Eleventh Circuit Remands GSU e-Reserves Case (Again)
Later that month, the Eleventh Circuit published its decision in Cambridge University Press v. Albert, a case brought by several academic publishers in 2008 alleging infringement by Georgia State University for its “practice of distributing to students digital excerpts of copyrighted works without paying the publishers.” In a prior appeal, the Eleventh Circuit reversed and remanded in part for the district court to correct specific errors. On remand, the district court found fair use on 44 of the 48 excerpts at issue, the decision that is the subject of the latest appeal. With this decision, the Eleventh Circuit held that the district court misinterpreted its previous mandate and misapplied the test of fair use. It also held the district court did not abuse its discretion when it declined to reopen the record. The court reversed, vacated, and remanded. The Copyright Alliance filed an amicus brief in this case drafted by Ronald Dove and Robert Hunziker of Covington & Burling.
President Signs USMCA
In late November, President Trump signed the United States.-Mexico-Canada Agreement (USMCA), or as many refer to it “NAFTA 2.0.” The agreement, which came from an attempt to renegotiate the North American Free Trade Agreement (NAFTA), includes a chapter on intellectual property establishing minimum standards of copyright protection—for example, standards on the rights of reproduction, communication to the public, and distribution—that the three countries must provide. The agreement also creates enforcement obligations and provides a framework of legal remedies and safe harbors for internet service providers. Although the agreement has been signed by the president, it still awaits approval from Congress.
ReDigi Loses Case Before Second Circuit
Wrapping up an eventful year for copyright, in December, the Second Circuit Issued a decision in Capitol Records v. ReDigi, a case involving ReDigi’s online marketplace that allowed users to “resell” digital mp3 files. In its ruling, the Second Circuit affirmed the district court’s finding that ReDigi infringed the reproduction rights of plaintiffs, a position we supported in an amicus brief filed by Eleanor Lackman and Lindsay Bowen of Cowan, DeBaets, Abrahams & Sheppard on our behalf. In particular, the court affirmed the holding that ReDigi’s service created a new copy of a sound recording, and the reproduction right is not subject to the first sale doctrine, while rejecting ReDigi’s argument that its technical process of deleting the original copy of the file in the course of reselling a sound recording does not constitute a reproduction. The court also rejected the policy-based arguments made by copyright law professors in an amicus brief supporting ReDigi that the first sale doctrine should be applied broadly to protect ReDigi and “to vindicate purchasers’ ability to alienate digital copyrighted works under the first sale doctrine.”