February 2024 Roundup of Copyright News

In February, the courts remained extremely busy with the multitude of ongoing AI copyright cases while the Copyright Office continued to ramp up its modernization efforts. Here is a quick snapshot of those and other copyright-related activities that occurred during the month of February as well as a few events to look forward to in March.

Copyright Alliance Releases ‘Music Royalties 101’ Webinar Video and Accompanying Guest Blog: The Copyright Alliance partnered with LAB member, Music Law Pro (MLP), to co-host a webinar titled Music Royalties 101. This webinar, led by MLP attorneys Jesse E. Morris and Alexandra Mayo, covered numerous key topics that music creators need to know about, including what royalties are, how the money flows from different sources such as Spotify, YouTube, Pandora, FM radio, TV, and theatrical movies, as well as the different approaches to monetizing music. Following the webinar, Music Law Pro also published a guest blog on our website, which answers several questions that were not addressed during the webinar.

Copyright Alliance Blogs: To commemorate Fair Use Week, we took an in-depth look at how the Supreme Court’s decision in the Andy Warhol Foundation v. Goldsmith case has been affecting fair use cases in the lower courts. In a two-part blog, we explore documentary film cases and cases most like the facts in Warhol in Part One, and examine software, misappropriation art cases, and other cases in Part Two.

CCB Status Update: At the end of February 2024, 767 total cases had been filed with the Copyright Claims Board (CCB). Of these claims, 316 are “smaller claims.” In at least 206 of all cases, the claimant is using legal counsel. At least 680 of the cases involve infringement claims, 130 involve Section 512(f) misrepresentation claims, and 24 involve claims for declarations of noninfringement. The eCCB docket currently shows that the works at issue in these cases are as follows: Pictorial Graphic & Sculpture (333 cases); Literary Works (125); Motion Picture and Audiovisual Works (144); Sound Recordings (75); Musical Works (52); and some cases include claims for multiple works. One-hundred and six foreign residents have filed claims. Of all the cases filed, 604 have been dismissed for the following reasons: Due to Respondent’s Opt-Out (71); Due to Failure to Amend Noncompliant Claim (291); Registration Issues (15); Due to Failure to Provide Proof of Service of Process (117); Claimant Withdrawal and Dismissal of Claims (59); Bad Faith Claimant (13); and Settlement (38). There are 62 active proceedings and 18 final determinations.

USCO Updates Congress on AI Initiatives: On February 23, Register Shira Perlmutter sent a letter to Senator Chris Coons (D-DE), Senator Thom Tillis (R-NC), Representative Darrell Issa (R-CA), and Representative Hank Johnson (D-GA) updating them on the Office’s recent activities addressing copyright issues raised by AI and planned next steps. The letter also says that the Office will issue an update to the Compendium of U.S. Copyright Office Practices to include further guidance and examples relating to the registration of works incorporating AI-generated material. Additionally, the Office notes that it has brought together a group of government and academic economists to discuss the economic aspects of the intersection of copyright and AI and that later this year it will publish a report containing the group’s proposed research agenda for assessing policy in this area.

USCO Receives Comments on NPRM on Group Registration of Updates to News Websites: On February 20, the Copyright Office received 20 comments in response to its notice of proposed rulemaking (NPRM) regarding the creation of a new group registration option for frequently updated news websites. The Copyright Alliance submitted comments applauding the Office for proposing the rule, suggesting changes to enable greater flexibility for news media publishers to register news content, and urging the Office to update its discussion on statutory damages to acknowledge the independent economic value test.

USCO Publishes NPRM on Group Registration of 2D Artwork: On February 15, the Copyright Office published a notice of proposed rulemaking (NPRM) proposing to create a new group registration option for two-dimensional artwork. The new option, which will be known as “GR2D,” would allow applicants to register up to 10 pictorial or graphic works that are created by the same author/copyright claimant published within a 30-day time period. The proposed filing fee for this new option is $85. Comments are due to the Copyright Office by April 1.

USCO and LOC Host CPMC Meeting: On February 15, the Copyright Office (USCO) and the Library of Congress (LOC) hosted the sixth bi-annual meeting of the Copyright Public Modernization Committee (CPMC). Register of Copyrights, Shira Perlmutter, gave opening remarks, noting that the Office was interested in the renewed authorization of the CPMC and that its technology team has been experimenting with various technologies and tools, including with AI, to transcribe metadata from digitized records and assist in the research of historical copyright records. During the meeting, the Library staff provided a demo of its Stacks system and explained the various technological and other measures in place for on-site access to rights-restricted content. Members of the CPMC asked various questions about the Stacks system and then shared their reflections of the Committee’s activities over the years. At the end of the meeting, the Library staff announced that the Committee will be renewed and that a notice would be shared on March 15, providing details on how interested stakeholders may apply to join. It was also announced that the activities of the new Committee would not start for another year.

HJC IP Subcommittee Holds AI Field Hearing: On February 2, the House Judiciary Committee’s (HJC) Subcommittee on Courts, Intellectual Property, and the Internet convened a field hearing in Los Angeles, CA, titled Artificial Intelligence and Intellectual Property: Part II – Identity in the Age of AI at the LA Convention Center. The hearing mostly focused on how Congress can support responsible innovation in applications of AI technology and examined the growing concerns about the misuse of AI, especially with respect to the likeness, voice, and other identifying characteristics of individuals. Witnesses included Lainey Wilson, 2024 Grammy Winner, 2023 CMA Entertainer of the Year, and 2023 ACM Female Artist of the Year; Harvey Mason Jr., President and CEO, Recording Academy; Christopher Mohr, President, Software and Information Industry Association (SIIA); and Jennifer Rothman, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School.

Bill to Protect Golf Course Designs Under Copyright Introduced: On February 5, Representative Brian Fitzpatrick (R-PA) introduced H.R. 7228, the “Bolstering Intellectual Rights against Digital Infringement Enhancement Act’’ (BIRDIE). The bill would amend the definition of “architectural work” in section 101 of the Copyright Act to include “the design of a course on which golf is played (except for any course on which mini golf, or other similar game, is played),” so that golf course designs would be protected under copyright law.

SCOTUS Hears Oral Arguments in Copyright Damages Case: On February 22, the U.S. Supreme Court heard oral arguments in Warner Chappell Music, Inc. v. Nealy. The issue in this case is whether the Copyright Act permits damages to be collected for infringing acts occurring more than three years before a lawsuit was filed. Most of the Justice’s questions focused on whether the case was improvidently granted because the question presented assumes the validity of the discovery rule, which is the question presented in a different case (Hearst Newspapers v. Antonio Martinelli) that is presently pending cert request before the Court. (The discovery rule provides that the timeline to file a lawsuit begins upon the plaintiff’s knowledge of the injury.)

Court Adopts Ruling Affirming that Repost of a Copyrighted Image on Social Media is Infringing: On February 1, the district court for the Southern District of New York affirmed a magistrate judge’s ruling in Prepared Food Photos, Inc. v. Chicken Joes, LLC, that embedding a copyrighted work, such as an image, constitutes a “display” that is actionable as copyright infringement of the image. In the case, plaintiff, which licenses to grocery stores from its image database, alleged that the defendant included plaintiff’s photograph in a Twitter post without licensing from the plaintiff.

MLC Sues Pandora Over Unpaid Royalties: On February 12, the Mechanical Licensing Collective (MLC) filed a complaint against Pandora Media, LLC for outstanding royalties due to songwriters and publishers arising from compulsory mechanical licenses used in connection with songs streamed on Pandora’s “Pandora Free” ad-supported streaming service. Additionally, the MLC alleges that Pandora filed to correct the underpayments as part of its payment of retroactive royalties from 2021-2022.

Google Asks Court to Dismiss Amended Complaint in AI Class Action Lawsuit: On February 9, Google filed a motion in the District Court for the Northern District of California to dismiss an amended complaint in a class action lawsuit, L. v. Alphabet, filed by a group of plaintiff-individuals for the use of personal information and various copyrighted works to train Google’s AI models. Google argues that while the copyright infringement claims made by one of the plaintiffs, Jill Leovy, alleging that Google infringed the copyright in plaintiffs’ book by using it to teach the AI model, Bard, is meritless, a record would nonetheless need to be better developed on the issue. Google then argues that the court should dismiss the plaintiff’s claim that every Bard output necessarily infringes the copyright of the works on which the AI model was trained. Google further argues that Leovy fails to provide evidence by neglecting to point out a single example of allegedly infringing output.

Court Dismisses Claims in Authors’ AI Lawsuits Against OpenAI: On February 12, the district court for the Northern District of California granted and denied in part OpenAI’s motion to dismiss claims in consolidated class-action lawsuits brought by authors including Paul Tremblay, Sarah Silverman, Christopher Golden, and Richard Kadrey against OpenAI for the unauthorized use of the plaintiffs’ books to train ChatGPT. OpenAI sought dismissal of all claims except for the claim alleging direct copyright infringement. The court dismissed the vicarious copyright infringement claim with leave to amend, stating that the plaintiffs did not adequately show that there was a substantial similarity between the AI outputs and the copyright protected works and that the plaintiffs’ non-specific, general allegation that all ChatGPT outputs were a derivative work was insufficient proof of substantial similarity. The court also dismissed claims of removal or alteration of copyright management information (CMI) under Section 1202(b)(1) of the Digital Millennium Copyright Act (DMCA), finding that the plaintiffs’ allegations that OpenAI’s failure to be transparent about ChatGPT training data was insufficient to prove that CMI was actually removed during the training process or that the alleged removal would induce, enable, facilitate, or conceal an infringement. Moreover, the court found that the Section 1202(b)(3) claims under the DMCA of distribution of the books without CMI also failed because plaintiffs did not allege that ChatGPT’s output reproduced the books without CMI. Both DMCA-related claims were dismissed with leave to amend.

Music Publishers Respond to Anthropic’s Preliminary Injunction Opposition in AI Lawsuit: On February 14, a group of plaintiff music publishers filed a reply brief in support of their motion for preliminary injunction in Concord Music Group, Inc. v. Anthropic PBC, a case in which the AI company Anthropic was sued over the unauthorized use of musical works to train the large language model, Claude. The plaintiffs had previously requested preliminary injunctive relief to prevent Anthropic from further training Claude on the plaintiffs’ works and to ensure that guardrails are employed to prevent infringement. The plaintiffs argue that guardrails installed after the lawsuit was filed do not make the preliminary injunction request moot, as the measures do not eradicate the effects of past violations and can be removed by Anthropic at any time. Responding to Anthropic’s claim that it does not engage in any “volitional conduct” that would lead to infringement liability, the publishers explain that the Sixth Circuit has not adopted a volitional conduct requirement, and even if it had, Anthropic’s AI model is nothing like the “empty vessel” recording devices at issue in other cases articulating volitional conduct standards. The reply also explains that Anthropic’s use weighs heavily against fair use under the first factor because Claude’s outputs compete with the ingested copyrighted works and, applying the Supreme Court’s decision in Warhol v. Goldsmith, Anthropic failed to show a compelling justification for the use. On the fourth fair use factor, the reply makes clear that the unauthorized use of the lyrics harms the plaintiffs’ burgeoning AI licensing market and undermines current licensing markets and business for providing song lyrics in search results.

OpenAI Moves to Dismiss Claims Made in NYT AI Lawsuit: On February 26, OpenAI filed a motion to dismiss certain claims in the lawsuit brought against it by The New York Times over the unauthorized use of its news works to train the AI model, ChatGPT. Specifically, OpenAI argues that the court should: (1) partially dismiss the direct copyright infringement claims to the extent those allegations are based on acts of reproductions that occurred more than three years before the lawsuit was filed; (2) fully dismiss the contributory infringement claim because plaintiff failed to show that OpenAI had actual knowledge of specific acts of the alleged direct infringement; (3) fully dismiss the claims of removal of copyright management information (CMI) for various reasons including that the plaintiff does not identify the CMI at issue, allege that OpenAI removed CMI in its training datasets or output, and plead sufficient facts to suggest that OpenAI acted with requisite knowledge; and (4) fully dismiss the unfair competition by misappropriation claims on grounds of Copyright Act preemption. Importantly, OpenAI does not move to dismiss direct infringement claims related to reproductions that occurred within three years of the lawsuit being filed, which it considers to be the “focus of the litigation.” 

News Organizations File AI Lawsuits Against OpenAI and Microsoft: On February 28, news organization The Intercept Media, Inc. filed a complaint against OpenAI and Microsoft over allegations that the defendants removed Copyright Management Information (CMI) from plaintiffs’ copyright-protected articles that were used without authorization to train ChatGPT. Intercept Media’s lawsuit claims that defendants should be held liable for violating sections 1202(b)(1) and (3) of the Digital Millennium Copyright Act (DMCA). Separately, news organizations Raw Story Media, Inc. and Alterenet Media, Inc. filed a complaint against only OpenAI, making similar allegations but only making the claim that OpenAI violated section 1202(b)(1). In both lawsuits, the plaintiffs point to how ChatGPT output reproduces verbatim or nearly verbatim copyright-protected works of journalism without relevant CMI.

Fourth Circuit Overturns Parts of Jury Verdict in Sony v. Cox and Remands $1 Billion Award: On February 20, the Court of Appeals for the Fourth Circuit overturned parts of a jury verdict in the case, Sony Music Entertainment v. Cox Communications, Inc., where the jury had found Internet Service Provider (ISP) Cox liable for $1 billion for its subscribers’ infringement of 10,017 songs owned by the plaintiffs, a group of music companies. Importantly, the court affirmed the jury’s finding of willful contributory infringement. However, it reversed the vicarious liability verdict and remanded for a new trial on damages, finding that the continued payment by Cox subscribers of monthly fees for internet services was not a financial benefit flowing directly to Cox from the copyright infringement itself. The court reasoned that the loss of profits from canceled internet subscriptions only demonstrated that Cox profits directly from the sale of internet access but failed to prove that Cox directly profits from the infringing acts. The court also found plaintiffs’ other arguments and evidence unpersuasive in proving Cox’s direct financial interest in its users’ infringing activities. On contributory infringement, the court affirmed the jury verdict, finding that because internet services were indispensable for the infringing activities, Cox had materially contributed to its subscribers’ direct infringement of plaintiffs’ copyrights. The Copyright Alliance filed an amicus brief in support of Sony Music.

Record Labels Respond to Internet Archive’s Motion to Dismiss Lawsuit Over Mass Digitization and Distribution of Sound Recordings: On February 16, a group of record label plaintiffs filed a memorandum in opposition to the motion to dismiss made by defendants Internet Archive (IA), Brewster Kahle, and George Blood in the lawsuit brought by the plaintiffs over the alleged copyright infringement of thousands of plaintiffs’ pre-1972 sound recordings for the mass digitization and distribution of those songs as part of IA’s “Great 78 Project.” The plaintiffs argue that the defendants do not point to any particular recordings to which the statute of limitations bars the infringement claims, and that additional discovery would be needed to determine additional information including when the defendants engaged in certain allegedly infringing activities. The plaintiffs also argue that granting the motion to dismiss would fail to narrow the case or remove any claims. The plaintiffs also point out that the defendants’ fabricated fair use theory to excuse their mass digitization and distribution of the sound recordings is even less tenable than its fair use theory for the mass digitization and distribution of books in the Hachette v. Internet Archive case. Lastly, the plaintiffs argue that the defendant’s motion should be denied as untimely as the motion was filed too late.

UK Parliament Publishes Report on AI Large Language Models: On February 2, the United Kingdom Parliament’s Communications and Digital Committee published a report titled Large Language Models and Generative AI examining trends surrounding AI large language models and ways to ensure the technologies would benefit UK society. Regarding copyright, the Committee expressed deep concerns for the UK “Government’s commitment of fair play around copyright,” noting that it is the point of copyright to reward creators for their efforts, prevent others from using works without permission, and incentivise innovation.”

India Reaffirms That Copyright Owner Authorization Is Needed for AI Use of Copyright Protected Works: On February 9, India’s Ministry of Commerce and Industry issued a press release, stating that its intellectual property laws grant adequate protection for works created by a legal person, including AI generated works and related inventions. Additionally, the government stated that “a user of Generative AI” should obtain permission to use copyright-protected works for commercial purposes, if such a use is not covered under the narrow fair dealing exceptions in India’s copyright law.

U.S. Chamber’s GIPC Launches International IP Index: On February 22, the U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) released the 12th Annual International IP Index “highlighting the extraordinary role intellectual property (IP) plays in supporting innovation and creativity and driving global economic growth.” It also demonstrates the socio-economic benefits that economies derive when governments “embrace more effective IP protection, including increased innovative and creative output, greater access to venture capital, and more foreign direct investment.”

Chinese Court Finds Generative AI Company Liable for Infringing Output: According to reports, the Guangzhou Internet Court in China ruled that an AI company was liable for copyright infringement for providing AI services that generated output substantially similar to the plaintiff’s exclusively licensed “Ultraman” images. The court found that based on the similarities between the plaintiff’s works and the generated output, the defendant had infringed the plaintiff’s reproduction and adaption rights. The court also stated that generative AI providers should raise copyright infringement risks to users through service agreements, establish a complaint reporting system for rights holders, and label AI generated output. The court ordered defendant pay the plaintiff $1,389 in damages.

WIPO Publishes Generative AI Guide: The World Intellectual Property Organization published a guide titled Generative AI: Navigating Intellectual Property, which summarizes the IP concerns and considerations arising from the development and use of generative AI tools. On the input and training side, the guide notes the existence of current litigation on the issue of using IP protected works as training materials for generative AI and that courts have yet to resolve IP liability issues, including whether a court would grant any injunctive style relief ordering the destruction of models or preventing use of an AI model. On copyrightability and authorship issues, WIPO notes that it is unclear who owns or authors an AI-generated work, noting the U.S. Copyright Office’s registration guidance on works with AI-generated elements and the Beijing Internet Court’s decision finding sufficient human authorship in an AI-generated work.

South African Legislature Passes Controversial Copyright Amendment Bill: On February 28, South Africa’s National Assembly adopted the Copyright Amendment Bill, which had triggered strong opposition from the creative industries. The bill introduced a 25-year limitation of the assignment of rights, and incorporates fair use-like principles, among other provisions. The bill will now be considered by President Cyril Ramaphosa, who had previously vetoed the bill over constitutional concerns.

Industry Activities

New Study Demonstrates Efficacy of Pirate Website-Blocking Measures: On February 12, a working paper was published by researchers at Chapman University and Carnegie Mellon University, which reported that measures to block access to websites pirating audiovisual works affected a shift in user behavior toward using legal media sites. The study examined the effects of website blocking measures implemented in India and Brazil and concluded that the “results suggest that piracy website blocking remains an effective strategy for increasing legal consumption of copyrighted content.”

Look Forward To And Save the Date For…

ACT Panel on Section 1201 and the Right to Repair: On March 6, from 12:30-1:30 p.m. ET, ACT | The App Association is hosting a panel on Section 1201 vs. The Right to Repair. The briefing will cover the importance of the current exemptions to Section 1201 and why broadening exemptions for repair purposes could threaten copyright protections and consumer privacy. Panelists include Priya Nair, IP Policy Counsel, ACT | The App Association (Moderator); Debbie Rose, IP Fellow, ACT | The App Association; Devlin Hartline, Legal Fellow, Hudson Institute; and Kevin Madigan, VP, Legal Policy and Copyright Counsel, Copyright Alliance. More information is available on the registration page.

USCO SXSW Panel on ‘The Creative Biz: What We Wish Was Taught in Art School’: On March 11, from 4-5 p.m. ET, the U.S. Copyright Office will host a panel at SXSW titled The Creative Biz: What We Wish Was Taught in Art School, which will focus on “how creatives can protect their work through copyright, common revenue streams for creators like licensing, best practices for running your business, and where solopreneurs, small businesses and underrepresented groups, can go for practical business training, support, and community.” The panel speakers are Linda Bloss-Baum, American University; Jayda Imanlihen, Black Girl Film School; Miriam Lord, U.S. Copyright Office; and Neeta Ragowansi, Music Managers Forum U.S.

WIPO’s Ninth Session of its Conversation Series on AI and Copyright: On March 13-14, from 5 a.m. to 1 p.m. ET the World Intellectual Property Organization (WIPO) will hold its ninth session in its series titled “Conversation on Intellectual Property and Frontier Technologies,” during which it will address copyright AI issues. The session, which is titled Training the Machines: Bytes, Rights and the Copyright Conundrum, “will provide a platform for deep exploration, aiming to understand the multifaceted relationship between training data and IP.”  More information is available on the registration page.

Deadline to Submit Reply Comments to USCO in Support of New Exemptions in 1201 Triennial Rulemaking: March 19 is the deadline to submit reply comments from parties who neither support nor oppose an exemption to newly proposed classes of exemption included in the U.S. Copyright Office’s notice of proposed rulemaking in the ninth triennial proceeding under section 1201 of Title 17. The notice outlines seven newly proposed classes of exemption and initiates three rounds of public comment. More information is available on the Office’s Triennial Rulemaking webpage.

Columbia Law School Manges Lecture: On March 25, from 6-7:30 p.m. ET, Dale Cendali, Partner at Kirkland & Ellis, LLP, will deliver the 36th Annual Manges Lecture on Litigating Fair Use. The lecture will touch upon “the litigators’ role in shaping legal doctrine by developing the facts of a given case and establishing its ties to existing law.” It will also cover the increased focus on the second fair use factor, and how artificial intelligence is affecting the legal landscape. More information is available on the registration page.

USPTO Public Symposium on AI and IP: On March 27, from 10 a.m. to 3 p.m. PT, the U.S. Patent and Trademark Office (USPTO) will hold its public symposium on intellectual property and AI issues at Loyola Law School, Loyola Marymount University, in Los Angeles, California. Featuring panel discussions by experts in the field of patent, trademark, and copyright and representatives from the U.S. Copyright Office, the event will focus on: (1) authorship and inventorship issues for AI generated works; (2) ongoing copyright litigation involving generative AI; and (3) discussion of legal and policy considerations surrounding name, image, likeness (NIL) issues. More information is available on the registration page.

USCO Monthly Recordation System Webinar: On March 28, at 1 p.m. ET, the U.S. Copyright Office will hold its next webinar to keep the public updated on the Office’s optimized Recordation System. Separate from the Office’s registration application, the new recordation module allows users to electronically transfer their copyrights to someone else. The webinars will “cover announcements about the module, important reminders, frequently asked questions, and a live Q&A session.” More information is available on the registration page.

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