July 2023 Roundup of Copyright News

In July, there were several Congressional hearings on copyright law issues and a flurry of new AI class-action lawsuits. Here is a quick snapshot of the copyright-related activities that occurred during the month of July as well as a few events to look forward to in August.

Copyright Alliance Activities

Copyright Alliance Submits Comments to OSTP on AI Accountability: On July 7, the Copyright Alliance filed comments in response to the request for information (RFI) published by the Office of Science and Technology Policy (OSTP) in the Federal Register on May 26, 2023, requesting comments to help OSTP update U.S. national priorities and future actions on artificial intelligence (AI). The comments focus on issues related to protecting the rights of creators and copyright owners and promoting economic growth.

Copyright Alliance Blogs: We published several blogs in July including a blog post on takeaways from the recent Senate Judiciary Committee IP Subcommittee’s hearing on AI and copyright law issues.

CCB Status Update: At the end of July 2023, 536 total cases had been filed with the Copyright Claims Board (CCB). Of these claims, 205 are “smaller claims.” In at least 155 of all cases, the claimant is using legal counsel. At least 459 of the cases involve infringement claims, 84 involve Section 512(f) misrepresentation claims, and 15 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 (230 cases); Literary Works (83); Motion Picture and Audiovisual Works (103); Sound Recordings (61); Musical Works (35); and some cases include claims for multiple works. Fifty-seven foreign residents have filed claims. Of all the cases filed, 334 have been dismissed for the following reasons: Due to Respondent’s Opt Out (44); Due to Failure to Amend Noncompliant Claim (180); Registration Issues (7); Due to Failure to Provide Proof of Service of Process (71); Claimant Withdrawal and Dismissal of Claims (27); and Settlement (5). There are 51 active proceedings and four final determinations. Two final determinations were issued in June and July:

  • Leo Robin Trust v. Warner Chappell Music, 22-CCB-0072: The case involved the estate of a songwriter, who alleged that the respondent, Warner Chappell Music, did not pay royalties for using the songwriter’s musical works in the 2019 film, The Aftermath. To prove that it is the owner of the works, the respondent provided evidence that the works were made under the work made for hire doctrine. In the final determination issued at the end of June 2023, the CCB granted the parties’ request to mutually dismiss the claim with prejudice, meaning that the claim cannot be brought before the CCB again or to federal court.
  • Armatus Dealer Uplift, LLC v. Wooden Automotive Consultants LLC, 22-CCB-0269: The case involved a claimant, an automotive parts servicer, who discovered an allegedly infringing video created by the respondent. The claimant argued that the respondent copied and made a derivative of the claimant’s 90-second video. In its final determination issued at the beginning of July 2023, the CCB approved a settlement reached by the two parties, which includes the following terms: (1) respondent’s concession of copyright infringement; (2) respondent’s agreement to not violate the claimant’s copyrighted material in the future and to immediately remove infringing material from its websites and social media platforms; and (3) $9,000 in damages payable to the claimant.

USCO Receives Comments on Extending Interim Rule on Secure Tests: On July 3, the Copyright Office received nine comments responding to the Office’s request for comments on extending the interim rule to allow otherwise-eligible tests that were administered online during the national emergency to qualify as secure tests, provided the test administrator employs sufficient security measures. Many comments requested that the Office revise the definition of “secure tests” to extend the special examination process and deposit requirements for all remote, secure tests, regardless of whether it was a test that was administered at testing centers prior to May 8, 2020, or developed as remote tests after that date—arguing that the rule should accommodate the fact that secure, remote tests have become more pervasive since the pandemic.

USCO Hosts Webinar on International AI Law: On July 26, the Copyright Office hosted a webinar on international copyright issues and AI as part of its ongoing AI initiative to examine the copyright issues raised by AI technology. Register of Copyrights, Shira Perlmutter, gave opening remarks, during which she announced that the Office will be publishing its Notice of Inquiry on copyright and AI issues in late August. The webinar featured two panels, in which the presenters discussed how other countries are approaching copyright questions related to AI such as AI authorship, AI training, exceptions and limitations, and infringement. They also provided an overview of legislative developments in other regions and highlighted possible areas of convergence and divergence involving generative AI. The first panel, focusing on an overview of various international perspectives and regulations on AI and copyright, featured Professors Luca Schirru, KU Leuven; Marcus von Welser, Vossius; Raquel Xalabarder Plantada, Universitat Oberta de Catalunya; Shlomit Yanisky-Ravid, Ono Academic College; and Peter Yu, Texas A&M University School of Law. The second panel featured Professors Jane Ginsburg, Columbia Law School; Andres Guadamuz, University of Sussex; Bernt Hugenholtz, University of Amsterdam; and Matthew Sag, Emory University School of Law. During the second panel, the professors discussed the permissibility of AI exceptions under the Berne Convention, infringement and liability in the ingestion and output stages, possible AI licensing solutions, and the international perspectives on AI vs. human authorship.

USCO Publishes Final Rule on CCB Agreement-Based Counterclaims: On July 27, the Copyright Office published a final rule amending the regulations to address the filing of agreement-based counterclaims and related discovery requirements in cases before the Copyright Claims Board (CCB). The Copyright Alliance submitted the only comment for this rulemaking proceeding. The Office’s amendments set out requirements for asserting and responding to agreement-based counterclaims (i.e., counterclaims that arise under an agreement/contract) as well as standard interrogatories and standard requests for the production of documents for such counterclaims. The final rule will take effect August 28, 2023.

SJC IP Subcommittee Holds Hearing on AI and Copyright Law: On July 12, the Senate Judiciary Committee’s IP Subcommittee held a hearing titled Artificial Intelligence and Intellectual Property—Part II: Copyright. Witnesses included Jeffrey Harleston, General Counsel and EVP of Universal Music Group; Karla Ortiz, Concept Artist, Illustrator, and Fine Artist; Matthew Sag, Professor of Law, Emory University School of Law; Dana Rao, EVP, General Counsel and Chief Trust Officer, Adobe; and Ben Brooks, Head of Public Policy, Stability AI. Chairman Chris Coons (D-DE) kicked off the hearing, noting the importance of ensuring that copyright discussions are part of developing AI frameworks and that the U.S. Copyright Office should be involved. Ranking Member Thom Tillis (R-NC) stressed the importance of copyright industries on the American economy and workforce, and also noted that examination was needed to explore whether changes are necessary to incentivize AI development. The Senators and panelists discussed various topics including the ability of artists to opt-out of AI training and the feasibility and technical effects of respecting those requests on AI development; the role and desirability of licensing copyrighted works for AI ingestion; voluntary, standardized, or other international frameworks around transparency in all stages of AI development and use; the application of fair use law in the context of AI training; and the desirability or need for a federal right of publicity law and other changes to the law. More information is available in this Copyright Alliance blog post.

Legislative Branch Appropriations Bill Introduced; $101 Million Allocated to USCO: On June 27, Representative Mark Amodei (R-NV) introduced the Legislative Branch Appropriations Act of 2024, H.R. 4364, which allocates $101,011,000 for the U.S. Copyright Office, of which not less than $10.3 million is allocated for Office modernization initiatives.

SJC IP Subcommittee Holds Roundtable on AI and Music Issues: On July 19, the Senate Judiciary Committee’s (SJC) IP Subcommittee held a roundtable briefing on AI and music issues. Witnesses included Chris Horton, SVP of Strategic Technology, Universal Music Group; Brian (BT) Transeau, artist and CEO, Soundlabs.AI; Ashley Irwin, President of the Society of Composers and Lyricists; and Dr. Moiya McTier, Executive Director, Human Artistry Campaign.

SJC IP Subcommittee Holds Oversight Hearing on USPTO: On July 26, the Senate Judiciary Committee’s (SJC) IP Subcommittee held a hearing titled Oversight of the United States Patent and Trademark Office, featuring U.S. Patent and Trademark Office (USPTO) Director, Kathi Vidal, as the sole witness. When speaking on Office priorities, Director Vidal noted that the agency is focused on AI, including its relationship to patent protection and the copyrighted works that are important to our economy. Director Vidal also noted that she is working with the White House and the U.S. Copyright Office on AI policy and views it as one of her organization’s greatest challenges.

SJC Subcommittee on Privacy Holds AI Hearing: On July 25, the Senate Judiciary Committee’s (SJC) Subcommittee on Privacy, Technology, and the Law held a hearing titled Oversight of AI: Principles for Regulation, featuring as witnesses Stuart Russell, Professor of Computer Science, University of California, Berkeley; Yoshua Bengio, founder and Scientific Director of Mila at Quebec AI Institute; and Dario Amodei, Chief Executive Officer, Anthropic. In response to a question on property rights from Senator Josh Hawley (R-MO), Professor Bengio stated that there could be mechanisms to compensate people who contribute to AI machines, such as artists where an output is similar to a copyrighted work. Senator Marsha Blackburn (R-TN) later raised concerns on how AI-generated content could limit opportunities for artists and creators and asked Professor Russell how the creative community could make a living without falling victim to AI’s misuse. Professor Russell acknowledged that the issue was significant and recommended further examination into copyright and fair use issues.

HJC Holds Pro Codes Act Markup Resulting in Bill Being Held Over: On July 19, the House Judiciary Committee held a markup of the Pro Codes Act, H.R. 1631, which ensures the continued copyright protection for codes and standards created by Standards Development Organizations (SDO) that have been incorporated by reference into law, while ensuring that there is public accessibility to such codes and standards. The bill was eventually held over and there will likely be a hearing on the legislation to further discuss the issues after the August recess.

HJC IP Subcommittee Holds Right-to-Repair Hearing: On July 18, the House Judiciary Committee’s (HJC) IP Subcommittee held a hearing titled Is There a Right to Repair?  Featuring an unbalanced panel that included right-to-repair supporters Aaron Perzanowski, Thomas W. Lacchia Professor of Law, University of Michigan Law School; Kyle Wiens, co-founder and CEO, iFixit; Paul Roberts, founder, SecuRepairs.org and founder and Editor-in-Chief, the Security Ledger; and Scott Benavidez, Chairman, Automotive Service Association and owner, Mr. B’s Paint & Body Shop, as well as IP expert, Devlin Hartline, Legal Fellow, Hudson Institute’s Forum for Intellectual Property. During the hearing, the subcommittee examined the current legal landscape of the right to repair and intellectual property including discussing laws and regulations at both the federal and state levels, as well as the implications for various industries, ranging from automotive to software to consumer electronics.

Court Holds Hearing in Visual Artist Class Action Lawsuit Against AI Companies: On July 19, the Northern District of California held a hearing on motions to dismiss a class action lawsuit brought by a group of visual artists—Sarah Anderson, Karla Ortiz, and Kelly McKernan—against Stability AI, Midjourney, and DeviantArt. At the hearing, Plaintiffs’ counsel conceded that two of the named plaintiffs have not registered the copyright in their works. and Judge William Orrick expressed skepticism that each of the defendants’ products incorporated plaintiffs’ works in their entirety. Judge Orrick also said the plaintiffs are unlikely to succeed on their secondary liability claims, noting that he did not believe that a “claim regarding output images is plausible at the moment, because there’s no substantial similarity” between images created by the artists and the AI systems and that more was needed to clarify the differences in the infringement claims against the various defendants. Judge Orrick indicated that he would dismiss most of the claims due to these concerns, but that the plaintiffs “can take comfort in the leave to amend.”

Sarah Silverman Among Authors Who File Class-Action Lawsuit Against OpenAI and Meta: On July 7, Sarah Silverman, Christopher Golden, and Richard Kadrey filed a class-action lawsuit against OpenAI and a separate class-action lawsuit against Meta. Both cases were filed in the district court for the Northern District of California. The complaints accuse the AI companies of copyright infringement related to the unauthorized use of plaintiffs’ books to train their proprietary large language models (LLM) ChatGPT and LLaMA. The plaintiffs allege that the companies harvested mass quantities of literary works through illegal online “shadow libraries” and made copies of plaintiffs’ works during the training process. In addition to claims for direct infringement, the complaint alleges that every output of the AI models is an infringing derivative of plaintiffs’ works for which the companies are vicariously liable. Also included are DMCA claims for the removal of copyright management information under section 1202(b), as well as claims for unfair competition, negligence, and unjust enrichment. The complaint requests statutory damages, injunctive relief, and costs and attorney fees.

Class Action Lawsuit Filed Against Google Over Use of Copyrighted Works and Personal Information for Google AI Products: On July 11, a group of anonymous plaintiffs filed a class-action lawsuit against Google for the use of personal information and various copyrighted works to train its AI models. The plaintiffs allege privacy law violations, violation of California’s unfair competition law, other state law violations, direct and contributory copyright infringement, and DMCA violations. The complaint lists Google’s generative AI models and, in particular, alleges that Google’s large language model, Bard, is able to generate summaries of copyrighted books or output that reproduces verbatim excerpts from copyrighted books. In addition to damages, the plaintiffs are requesting an injunction compelling the establishment of an independent AI council to monitor and oversee Google AI products and the destruction and purging of class members’ Personal Information, which includes copyrighted works and creative content.

Ninth Circuit Upholds Server Test: On July 17, the Ninth Circuit Court of Appeals upheld its “server test” when it affirmed the lower court’s dismissal of a class-action lawsuit brought by two photographers alleging that Instagram violated the public display right by permitting third-party embedding of the photographers’ works. The Ninth Circuit’s “server test” provides that a copyright owner’s public display right is not violated unless the displayed image is stored on the computer’s server. The court rejected the plaintiffs’ arguments that (1) the “server test” is limited to search engines, with the court stating that there was no legal support for this argument; (2) the “server test” is inconsistent with the Copyright Act, with the court stating that it is bound by precedent case law; and (3) that the “server test” was overturned by the Supreme Court’s decision in Aereo, with the court stating that unlike infringement of the public performance right, which was at issue in the Aereo case, infringement of the public display rights requires that a copy of the work be displayed. At the end of the opinion, the court acknowledged that it is “concerned with the various tensions in the law and the implications of our decisions, but we are not the policymakers,” and that “some future panel may conclude that there are ways to display a copy other than to store it on a server.”

European Rightsholders Groups Urge EU To Respect Copyright When Considering AI Regulations: European rightsholders, including the Center of the Picture Industry, European Magazine Media Association, and the International Federation of the Phonographic Industry, issued a statement that called on EU lawmakers to support provisions to ensure that the EU AU Act “is fit for the purpose of protecting the work of European creators and rightsholders.” The group details that accurate and transparent record keeping is essential to avoid issues like “AI laundering” and ensure appropriate prior authorizations for the use of copyright protected works are being secured.

UK Music Publishes AI Position Paper and Principles: On July 11, UK Music’s Chief Executive, Jamie Njoku-Goodwin, sent a letter to Minister Lucy Frazer highlighting the UK music industry’s AI principles from its recent Policy Position Paper on AI and urging the government to identify the creative industries as a key growth sector of the UK and to address issues around AI permission and transparency. The letter also highlights five key principles: “the importance of creators’ choice and consent, the need for record keeping, the important principle that without human creativity there should be no copyright, the requirement for AI-generated works to be clearly labelled, and the need for protection of personality rights.”

Italian Senate Approves Bill to Block Pirate Streaming Websites and IPTV Devices: According to reports, on July 12, Italy’s upper house Senate unanimously passed a bill that enables its communications regulator, AGCOM, to swiftly block pirate streaming websites and IPTV services and to block access to mirror sites.

Chinese Government Finalizes Generative AI Rules: On July 13, the Cyberspace Administration of China (CAC) announced that the Chinese government had finalized regulations on generative AI, which will be effective August 15. The regulations require generative AI services to obtain a license to operate in the country, conduct security assessments, respect IP rights, take measures to prevent generation of illegal content, and adhere to the “core values of socialism.”

Russian Media Group Opposes Bill to Permit Widescale Piracy of Foreign Works: The Media Communications Union, a group of Russian media companies and rightsholders, sent a letter to the Russian government, opposing a proposed bill that would amend Russia’s law permitting piracy of copyrighted works from non-friendly countries. The amendment would permit exclusive foreign licensees to translate, reproduce, and public distribute such works without the rightsholder’s permission, at terms, conditions, and prices set by the licensee. The letter reportedly states that the bill would negatively affect domestic exclusive licensees and that ultimately, domestic exclusive licensees who had preexisting licensing agreements with foreign rightsholders should be able to decide whether the works are made available—works that should not be permitted to be pirated.

Australian Court Grants Movie Studios a Site Blocking Order: Only July 7, the Federal Court in Australia granted an injunctive order for a group of movie studios, ordering various internet service providers to block user access to infringing pirate websites. Though the original request was filed by the studios in early June, the court issued the injunction on the same day when final documentation for the request was submitted.

Creator Coalition Pens Appeal to EU’s TDM Exception; Asserts That It Violates International Treaties: In July, a creator coalition penned a letter to the European Union and United States government, to amend or provide guidance on EU’s current text-and-data-mining (TDM) exception under Articles 3 and 4 of the Copyright Directive to redress violations with the Berne Convention and WIPO Copyright treaties. The coalition includes the American Society for Collective Rights Licensing (ASCRL), Artists Rights Society (ARS), American Photographic Artists (APA), National Press Photographers Association (NPPA), American Society of Media Photographers (ASMP), Graphic Artists Guild (GAG), Authors Guild, Society of Composers & Lyricists (SCL), Songwriters Guild of America (SGA), Music Creators of North America (MCNA), and the Concept Art Association (CAA). The statement argues that the Berne Convention three-step test is violated because copying protected works for AI development interferes with the normal exploitation of the works and that the opt-out mechanism in the current exception is practically ineffective and impossible and is a formality prohibited by the Berne Convention. The group also urges the United States government to “use all available means to bring the European Union into compliance with the Berne Convention, as incorporated in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), in connection with the application of Articles 3 and 4 to generative AI.”

Canadian Court Grants Dynamic Website Blocking Order for Illegal Streaming of Certain MLB Games: On July 18, Canada’s Federal Court granted an injunctive order for plaintiff media companies, ordering Canadian Internet Service Providers to block access to certain illicit streaming websites and services that illegally livestream Toronto Blue Jay games in the Major League Baseball’s 2023 season. The plaintiffs will cover the costs associated with implementation of the order up to the amount of $50,000.

Industry Activities

Thousands of Authors Urge AI Companies to Stop Using Copyrighted Works Without Consent and Compensation: In a July 17 segment of National Public Radio (NPR), Authors Guild CEO Mary Rasenberger noted that that the Guild, along with more than 8,000 authors, penned a letter to artificial intelligence companies—such as OpenAI, Meta, and others—requesting that the companies stop using their works without permission and compensation. According to reports, “The advent of text-based generative AI applications like GPT-4 and Bard, which scrape the web for authors’ content without permission or compensation and then use it to produce new content in response to users’ prompts, is giving writers across the country even more cause for worry.” Notable authors who have signed onto the letter include Nora Roberts, Viet Thanh Nguyen, Michael Chabon, and Margaret Atwood, to name a few.

Look Forward To And Save the Date For…

USPTO Stakeholder Listening Session on U.S. IP Priorities Abroad: On August 2 from 3- 6 p.m. PT, the U.S. Patent and Trademark Office (USPTO) will host an event to share the latest developments in the Office’s “international engagements in multilateral and bilateral forums on IP, and how they affect the interests of U.S. stakeholders. Attendees will also learn about USPTO resources available to stakeholders as they expand into international markets.” The event is free and open to the public and will be held during the Asia Pacific Economic Cooperation (APEC) IP Experts Group in Seattle, Washington. Attendees must register in advance. More information about the event is available on the event page.

Deadlines to Submit Written Petitions for Ninth Triennial Rulemaking to USCO: On June 8, the U.S. Copyright Office published a notification of inquiry and request for petitions for its ninth triennial rulemaking proceeding under the Digital Millennium Copyright Act (DMCA) to consider possible temporary exemptions to the DMCA’s prohibition against circumvention of technological measures that control access to copyrighted works. Petitions for new exemptions and renewal petitions regarding existing exemptions will be considered in the rulemaking process, which includes three rounds of written comments, followed by public hearings that the Office intends to conduct virtually. Written comments in response to any petitions for renewal must be received by August 11. Written petitions for new exemptions must be received by August 25.

LOC and USCO Copyright Public Modernization Committee Meeting: On August 16 at 1:00 p.m. ET, the Library of Congress and the U.S. Copyright Office will host a summer 2023 meeting of the Copyright Public Modernization Committee, which will be held virtually. Participants will hear from Library of Congress and Copyright Office staff regarding the latest developments of the Enterprise Copyright System. In addition to updates from Library and Copyright Office staff, attendees will have the opportunity to participate in “a moderated conversation about increasing awareness of new developments.” There will also be a Q&A session held during the meeting. The meeting is free and open to the public and more information is available on the registration page.

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