It has become a tradition of sorts for me to wrap up the previous year with a blog highlighting the most significant copyright actions and events of the year. Normally I embrace the challenge. But, like so many others, I really would prefer not to look back at 2020 if at all possible. By all accounts, 2020 was a MISERABLE year. But if I put on my blinders and only look at the most significant copyright legislation in 2020, the most important copyright cases in 2020, and the various activities of the U.S. Copyright Office in 2020, last year wasn’t all that terrible. In fact, in many respects, it was downright good. So let’s kick off the review with the…
Most Significant Copyright Legislation in 2020
Two very important copyright bills that have been supported by the copyright community for over a decade finally passed in 2020. On December 27, President Trump signed into law the end-of-the-year government spending and COVID-19 relief package, titled the Consolidated Appropriations Act, 2021. In addition to providing much needed financial support for creators who lost income due to COVID, the bill contains three critical intellectual property bills: (1) the Protecting Lawful Streaming Act (PLSA) (which starts on page 72 of the bill); (2) the Copyright Alternative in Small-Claims Enforcement Act of 2020 (CASE Act) (which starts on page 77); and (3) the Trademark Modernization Act of 2020 (which starts on page 139). The PLSA closes the so-called streaming loophole in criminal copyright law by harmonizing criminal penalties for illegal streaming to be consistent with those that have long existed for illegal downloading and distribution. The CASE Act creates a small claims tribunal housed within the U.S. Copyright Office, enabling creators to defend their copyrighted works from infringement. (Since this is a review of copyright in 2020, we will leave it to someone who is drafting a trademark year in review to discuss the third bill in the package)
The CASE Act is the culmination of years of Congressional deliberation, Copyright Office research and expertise, and stakeholder input, as well as negotiations to address concerns with previous versions of the bill. The legislation was recommended by the Copyright Office following a two year study (that was requested by Congress), during which the Office received a total of 107 substantive comments over the course of three separate comment periods, and held several public hearings across the country. The CASE Act was also the subject of a Congressional hearing in the House, and the subject of extensive inquiries during Copyright Office oversight hearings in the Senate. It passed the House overwhelmingly by a vote of 410-6 and passed through the Senate Judiciary Committee unopposed. While a very small group of naysayers remain, this bill is about as noncontroversial as they come.
I shouldn’t have to re-state all of this but I feel the need to do so because, in the days leading up to its passage by Congress, the small minority that opposed the bill grew desperate and decided their best path forward was to propagate falsehoods by claiming that the bill was rushed forward with no debate or hearings in Congress and that supporters were trying to sneak the bill through in the larger package. In truth, had Senator Wyden not prevented the bill from moving to the Senate floor for over a year with his hold, the bill would have easily passed the Senate through regular order and would have been enacted into law months ago.
As for the substance of the CASE Act, the main takeaways are: the bill will create a three-“judge” tribunal within the Copyright Office to handle copyright infringement claims, declarations of noninfringements, and claims of misrepresentation under section 512(f) of the DMCA. The CASE Act will create a much less formal, streamlined process than exists in federal court. For example, unlike federal court, attorneys and in-person appearances would not be necessary and discovery would be extremely limited. Statutory damages that can be awarded by the tribunal are capped at $15,000 per work (which is only 10% of what is allowed under existing copyright law) and no more than $30,000 in total (actual or statutory) damages. One of the most important features of this legislation is that the process is 100% optional. If a party does not want to defend a copyright case before the tribunal, it can simply opt out.
The tribunal created by the CASE Act will be able to hear claims by copyright owners and users, as well as all defenses (like fair use) and counterclaims allowed in federal court. And the bill discourages bad faith claims and so called “trolling” by, amongst other things, granting the Board the absolute right to dismiss claims and the authority to impose harsh penalties on “bad actors,” such as barring repeat offenders from continuing to use the tribunal – penalties that are not available in federal court. We will post an upcoming blog to describe the bill in more detail, so stay tuned.
The PLSA will modernize criminal copyright law by ensuring the availability of felony penalties for illegal large scale commercial streaming, consistent with those that have long existed for illegal downloading and distribution. At the same time, the PLSA ensures that such felony penalties are available only against the most egregious offenders: those who operate commercial streaming services that are primarily designed, marketed, or have no significant use other than for illegal streaming of copyrighted content. By updating criminal copyright law, the PLSA will provide prosecutors with an effective tool to deter harmful criminal activity and protect the rights of creators and copyright owners.
The PLSA is result of a six-month long series of negotiations held under the auspices of Senate Judiciary IP Subcommittee Chairman Tillis. The provisions of the PLSA were carefully drafted with input from stakeholders from the service provider, platform, and user communities so that the law will not affect the activities of ordinary internet users, nor will it criminalize good faith business/licensing disputes or noncommercial activities. The normal practices of internet service providers (ISPs) will also not be subject to penalties under the PLSA, even when ISP users/subscribers misuse their services for purposes of infringement.
In addition to the CASE Act and streaming legislation, the other big copyright legislative action in 2020 was an examination of the Digital Millennium Copyright Act (DMCA). Throughout the year, the Senate Judiciary Committee Intellectual Property Subcommittee held 7 hearings and two staff briefings on different aspects of the DMCA. In addition to the Senate Subcommittee hearings, the House Judiciary Committee also held DMCA listening sessions with various stakeholder groups broken down by size (e.g., large and small OSPs) and type of creators the participants represented (e.g., music, visual arts) in August, culminating with a September hearing on the Copyright Office’s 512 Report (see below for more on the report). The Senate and House hearings, as well as the listening sessions and staff briefings, showed rather conclusively that the DMCA is outdated and is in need of reform in order to achieve the original balance that Congress intended when it passed it in 1998.
Toward the end of the year, Chairman Tillis sent 15 questions to stakeholders on a number of issues related to DMCA reform. Most of the questions relate to potential changes to Section 512, but there were also a handful of questions on Sections 1201 and 1202. After reviewing the responses to the questions, as well as all the information accumulated throughout the year-long DMCA review, Chairman Tillis issued a legislative discussion draft on December 22. The discussion draft, which is intended to be the “first step in a long and lengthy process” to reform the DMCA, includes not only significant revisions to sections 512 and 1201 the DMCA, but also includes changes intended to modernize the Copyright Office registration process, changes to Section 1202, an orphan works proposal, and a change that would move the Copyright Office into the Department of Commerce and make the Register a presidential appointee confirmable by the Senate. Chairman Tillis requested redline edits and comments on the discussion draft by March 5. What follows after that remains to be seen, but is clear that the Chairman intends this to the beginning of a lengthy process that may last his entire six-year term.
The Five Most Important Copyright Cases of 2020
Any list of the top five copyright cases of 2020 must start with the most high-profile case of them all — Google v. Oracle. While the case was not actually decided in 2020, it was argued before the U.S. Supreme Court in October, after being postponed from its original March oral argument date because of the pandemic.
The issues at stake in Google v. Oracle are whether copyright protection extends to a software interface; and whether Google’s use of a software interface in the context of creating a new computer program constitutes fair use. In January, Google and amici supporting Google filed their briefs, which can be found here. In February, Oracle filed its brief, followed shortly thereafter by the amicus brief filed by the Department of Justice, and 32 other briefs—all supporting Oracle—which can be found here. On May 4, the Supreme Court directed the parties to file supplemental letter briefs addressing the appropriate standard of review for the fair use question, “including but not limited to the implications of the Seventh Amendment, if any, on that standard.” The order indicated the Court was interested in exploring whether it would be appropriate to overturn a district court jury’s finding of fair use. In August, the parties submitted supplemental letter briefs. Oracle’s letter brief argues that fair use is subject to de novo review and that the Seventh Amendment does not affect the standard of review. Google’s letter brief argued that the Federal Circuit erred in applying de novo review and that the ruling is inconsistent with Seventh Amendment’s guarantee of a right to a jury trial and re-examination clause.
On October 7, the U.S. Supreme Court finally heard oral arguments. A complete summary and analysis of the arguments can be found here. The oral arguments focused on the three arguments Google raised in its brief:
- Google argued that the declaring code it copied is an uncopyrightable method of operation. The Justices rather summarily and quickly tossed this argument aside.
- Google argued that, because the declaring code can only be written in one way, the merger doctrine renders the code unprotectable by copyright. Google’s counsel conceded this was its primary argument. While the Justices seemed to understand the concept of the merger doctrine, several of them questioned Google’s contention that there was only one way to write code that would achieve the desired function. Some of the Justices seemed to take the view that it was not a matter of Google not being able to create its own code, it was a matter of Google not wanting to invest the time and money into doing so. Some Justices also raised the sky-will-fall-for-the-tech-industry argument raised in some of the amicus briefs, but while doing so noted that in the years since the Federal Circuit’s 2014 decision in favor of Oracle on copyrightability, the sky has yet to fall.
- Google’s final argument was that its copying amounts to fair use. There was astonishingly little discussion of the merits of Google’s use as potential fair use, leading one to believe that the Justices likely did not give those arguments much credence. Instead, most of the discussion regarding fair use centered on the appropriate standard of review. The Deputy Solicitor General was very persuasive here, explaining that the question of whether Google’s use is transformative, despite being “the same code being used for the same purposes” on a different platform, is fundamentally a legal question, not a factual determination. He also told the Court that if it determines that fair use is fundamentally a question of fact, such that it would not be subject to de novo review, it is “not only going to affect jury trial practice; it’s going to affect summary judgment practice because a lot of fair use questions are decided on summary judgment. That won’t be possible any longer if issues like ‘does putting it on a new platform make for transformativeness’ are regarded as jury questions.”
While it is difficult to predict which way the Supreme Court will decide based simply on the line of questioning, the oral arguments suggest that Google did not clearly prevail on any of its arguments (and definitely lost on a few points).
Cases number two and three on our list of the top five copyright cases of 2020 would have to be the two copyright cases actually decided by the Supreme Court: Allen v. Cooper and Georgia Code Revision Commission v. Public.Resource.org. The Supreme Court handed down its decision in Allen v. Cooper, which considered whether the Copyright Remedy Clarification Act (CRCA) effectively abrogates State sovereign immunity for copyright infringement, in March. The case stemmed from videographer Frederick Allen’s claim that in 2013 the State of North Carolina used his videos of the shipwreck of Queen Anne’s Revenge online without his consent. In a unanimous opinion written by Justice Kagan, the Supreme Court held that Congress lacked authority to abrogate the States’ sovereign immunity from copyright infringement suits in the Copyright Remedy Clarification Act of 1990. In reaching its decision, the Court relied heavily on Florida Prepaid and Seminole Indian, finding that neither Article I nor Section 5 of the Fourteenth Amendment gave Congress the authority to enact the CRCA. Notably, discussing the potential for Congress to pass valid abrogation legislation in the future the Court stated:
“Congress would presumably approach the issue differently than when it passed the CRCA. At that time, the Court had not yet decided [the] Seminole Tribe [case], so Congress probably thought that Article I could support its all-out abrogation of immunity. … And to the extent it relied on Section 5, Congress acted before this Court created the ‘congruence and proportionality’ test. … For that reason, Congress likely did not appreciate the importance of linking the scope of its abrogation to the redress or prevention of unconstitutional injuries — and of creating a legislative record to back up that connection. But going forward, Congress will know those rules. And under them, if it detects violations of due process, then it may enact a proportionate response. That kind of tailored statute can effectively stop States from behaving as copyright pirates. Even while respecting constitutional limits, it can bring digital Blackbeards to justice.”
A month later, the Court decided another copyright case—Georgia Code Revision Commission v. Public.Resource.org—concerning whether the Official Code of Georgia Annotated (OCGA) was eligible for copyright protection. The Supreme Court opinion held that the state of Georgia is not entitled to copyright protection for its official annotated code. In a 5-4 decision delivered by Chief Justice Roberts (joined by Sotomayor, Kagan, Gorsuch, & Kavanaugh), the Court upheld the Eleventh Circuit’s finding that because Georgia’s annotations are authored by an arm of the legislature in the course of its legislative duties, the government edicts doctrine puts them outside the reach of copyright protection. Justice Thomas (joined by Alito and Breyer) and Justice Ginsburg (joined by Breyer) filed dissenting opinions. At the end of the day, this case probably has very little effect on future copyright cases because it can be easily circumvented through contractual arrangements between the state and the actual authors.
Like Google v. Oracle, case number four is one that hasn’t been decided yet. But, unlike Google v. Oracle, this case has yet to be decided by any court. In June, the Association of American Publishers (AAP), on behalf of several book publishers, filed suit in New York district court against the Internet Archive (IA) on behalf of numerous book publisher members asking the court to enjoin IA’s mass scanning and distribution of literary works that it offers to the public through its ‘Open Library’ and ‘National Emergency Library.’ The National Emergency Library made 1.4 million digital books available online for free and instead of adhering to a “one-in, one-out” ebook lending system used by public libraries, IA suspended waitlists and lent books simultaneously to anyone in the world — denying authors the revenue they deserve and urgently need during the economic downturn caused by the pandemic. A week after the suit was filed, Internet Archive founder Brewster Kahle announced that its “National Emergency Library” would shut down early because of the copyright infringement suit. A joint statement from authors Malcolm Gladwell, John Grisham, Elizabeth Gilbert and Douglas Preston, may have summarized IA’s actions best when they said that the “wholesale scanning and posting of copyrighted books without the consent of authors, and without paying a dime, is piracy hidden behind a sanctimonious veil of progressivism.”
The final copyright case of 2020 to make the top five list is Dr. Seuss Enterprises v. ComicMix. This case involves a copyright infringement lawsuit brought by owners of Dr. Seuss copyrights against the publisher of a “mash-up” book, Oh the Places You’ll Boldly Go, which set Seuss’s Oh the Places You’ll Go in the Star Trek Universe. On a motion for summary judgment, the U.S. District Court for the Southern District of California ruled in favor of the defendants, holding that the mash-up, which the district court called “highly transformative” and described as furthering the goals of copyright, was permitted by fair use. Dr. Seuss Enterprises (DSE) filed an appeal to the Ninth Circuit and in late December the Ninth Circuit issued its decision, reversing the district court’s summary judgment finding of fair use. The 34-page opinion by Judge McKeown provides a detailed factor-by-factor fair use analysis, finding that all four factors weigh in favor of DSE. Most notably, the court held that “although ComicMix’s work need not boldly go where no one has gone before, its repackaging, copying, and lack of critique of Seuss, coupled with its commercial use of Go!, do not result in a transformative use.” On the fourth factor, the court found that “ComicMix sidesteps the fact that it intentionally targeted and aimed to capitalize on the same graduation market as Go!” and that “Works like Boldly would curtail Go!’s potential market for derivative works.”
Big Happenings at the U.S. Copyright Office in 2020
This was another very busy year for the U.S. Copyright Office. Some of the changes at the Office were anticipated but, like the rest of 2020, many were not. The year started with Karyn Temple, the 13th Register of Copyrights, officially stepping down from the position. Assuming the role of Acting Register was Maria Strong (the Office’s Associate Register of Copyrights and Director of Policy and International Affairs). When Acting register Strong undertook the position, she could not have had any idea what challenges would lie ahead for her and the Office. But she and the rest of the Copyright Office leadership team rose to the challenge and did an amazing job shepherding the Office through the pandemic, and effectively modernizing the Office on the fly.
Not surprisingly, there were major changes at the Copyright Office as a result of COVID-19 considerations, which forced it to close its doors to the public and necessitated Office staff to work remotely. These adjustments are temporary and very narrowly tailored to make specific changes to the registration system or other processes to account for the fact that people are sheltering at home and may not be able to meet a particular deadline or submit the necessary materials to the Office in the usual manner. These changes began when, at the end of March, President Trump signed into law H.R. 748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In addition to the relief provided in the CARES Act, Title IX of the law added a new section 710 to the Copyright Act, which gave the Copyright Office emergency relief authority to extend deadlines and other time periods established in the Copyright Act in situations where they did have that authority. In accordance with this new section, the Office made slight changes to the window for statutory damages, the filing of termination notices, and section 115 processes. The Office also made several other changes that did not require using the new authority provided under the CARES Act. A complete list of all the changes can be found here.
In May, the U.S. Copyright Office published its long-anticipated DMCA Section 512 report. In the report, the Office repeatedly notes that the balance Congress intended is “askew” to the detriment of rights holders. The Office does not recommend any major revisions to the statute, but suggests “areas where Congress may wish to finetune section 512’s current operation in order to better balance the rights and responsibilities of OSPs and rightsholders, in alignment with its objectives when it passed the DMCA.” In addition, the Office makes various recommendations outside the context of legislative amendments, including those related to education, voluntary measures, and standard technical measures, and even commits itself to rolling out certain educational tools and a website focused on tools and information regarding the DMCA. As the report states:
“[A] system that fails to provide adequate protection of creators’ rights of all sizes ultimately fails to carry out congressional intent regarding section 512 as well as the overall purpose of copyright law. Any recalibration of this balance, however, should acknowledge the continuing need for cooperation and compromise among the various stakeholders. No system, however devised, will be able to prevent false positives or completely end digital piracy. While consensus-based fixes may be the ideal but not the most realistic approach to address this balance, cooperation and compromise among all stakeholders, large and small creators, OSPs, and users, would ensure that everyone has a role and responsibility in addressing online infringement in a manner suitable to their objectives and resources. This cooperation should occur at all steps of the notice-and-takedown process.”
In September, the U.S. Copyright Office followed up on its Report by holding three Standard Technical Measures (STM) discussions. The first session covered “the current legal scope and accompanying obligations of an STM and any statutory obstacles for identifying or adopting an STM.” The second session sought to “identify technological and other hurdles to the adoption and implementation of potential STMs, as well as the likely impacts of STMs on online service provider business models and users’ interest.” The third session was a “review [of] the conclusions from the previous two sessions, as well as recommendations from Section 512 of Title 17” and “look(ed) for agreement on the next steps in identifying and adopting STMs to improve the functioning of the section 512 framework.”
Throughout the year the Copyright Office also:
- continued to take steps to modernize the office and inform the public of the steps it was taking through its monthly webinars;
- conducted its sovereign immunity study focused on “the extent to which copyright owners are experiencing infringement by states without adequate remedies under state law,” which was requested by the Senate Judiciary IP Subcommittee following the Supreme Court decision in Allen v. Cooper;
- implemented a new fee schedule, effective March 20 (pursuant to its cost study, which commenced in June 2017);
- continued its implementation of the Music Modernization Act (MMA) by issuing three notices of proposed rulemaking and one notification of inquiry;
- enacted new rules for (i) Mandatory Deposit of Electronic-Only Books—that would create a new demand-based mandatory deposit scheme for electronic-only books, similar to that for electronic-only serials, and make several other changes, and (ii) Group Registration of Small Literary Works—a new group registration option to allow 50 works to be registered with one application, as long as the works contain at least 100 but no more than 17,500 words and meet other criteria;
- … and so much more.
Last but certainly not least, in September, the Librarian of Congress Carla Hayden announced her selection of Shira Perlmutter as the 14th Register of Copyrights. In a statement, Dr. Hayden said, “Shira Perlmutter brings to this role a deep knowledge of domestic and international copyright law and policy and a background in negotiating international intellectual property agreements. She has experience working with a wide range of stakeholders and finding common ground on complex issues.” In response to the announcement, Perlmutter noted, “I’m honored to have the opportunity to lead the U.S. Copyright Office during its 150th year… I look forward to working with Dr. Hayden and rejoining the dedicated staff of the Copyright Office on its mission of promoting the creation and dissemination of works of authorship, to the benefit of the American public.” Register Perlmutter started her tenure on October 26. A compilation of statements and media coverage about her appointment can be found here.
What to Expect in 2021
It is not too difficult to read the tea leaves to determine what is in store for 2021. Expect more DMCA reform talk, with Chairman Tillis’ discussion draft taking center stage and the House Judiciary Committee also getting involved. Expect a decision in Google v. Oracle that will likely make one group very happy, and the other group not so much. Also, expect the new MLC to begin on January 1 and the Copyright Office to continue modernizing Office functions. You can also expect the Office to take the next steps toward adopting STMs under section 512(i) of the DMCA, issue its report on state sovereign immunity in April, as well as solicit comments on the CASE Act to begin the process of implementing the new small claims tribunal.