June 2023 Roundup of Copyright News

June 2023 marked the one-year anniversary of the small copyright claims tribunal, the Copyright Claims Board (CCB). Meanwhile, Congress kept busy on AI issues and a major class-action lawsuit on YouTube content management tools came to an end with a settlement. Here is a quick snapshot of the copyright-related activities that occurred during the month of June as well as a few events to look forward to in July.

Copyright Alliance Activities

Copyright Alliance Submits Comments to NTIA on AI Accountability: On June 12, the Copyright Alliance filed comments in response to the request for comments published by the National Telecommunications and Information Administration (NTIA), regarding self-regulatory, regulatory, and other measures and policies that are designed to provide assurance that artificial intelligence (AI) systems are legal, effective, ethical, safe, and otherwise trustworthy. The comments discuss accountability and transparency in the context of ingestion of copyrighted works by AI systems.

Copyright Alliance Submits Comments on CCB Agreement-Based Counterclaims: On June 20, the Copyright Alliance submitted comments to the U.S. Copyright Office on its proposed regulations for agreement-based counterclaims filed with the Copyright Claims Board (CCB). While the comments do not raise substantive objections with the rule, they reiterate the importance of ensuring that CCB rules and regulations do not become cumbersome or complex for pro se parties and that regulations governing protective orders should continue to be applicable.

Copyright Alliance Blogs: We published several blogs in June:

Copyright Office Activities

CCB Status Update: At the end of June 2023, 505 total cases had been filed with the Copyright Claims Board (CCB). Of these cases, 189 are “smaller claims.” In at least 149 of all cases, the claimant is using legal counsel. At least 431 of the cases involve infringement claims, 79 involve Section 512(f) misrepresentation claims, and 14 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 (221); Literary Works (74); Motion Picture and Audiovisual Works (100); Sound Recordings (56); Musical Works (34); and some cases include claims for multiple works. Forty-nine foreign residents have filed claims. Of all the cases filed, 312 have been dismissed for the following reasons: Due to Respondent’s Opt Out (39); Due to Failure to Amend Noncompliant Claim or for Registration Issues (167); Due to Failure to Provide Proof of Service of Process (65); Claimant Withdrawal and Dismissal of Claims (24); and Settlement (17). There have been 3 final determinations. There are 58 active proceedings. 

Copyright Office Celebrates One-Year Anniversary of CCB: In June, the Copyright Office celebrated the one-year anniversary of the Copyright Claims Board (CCB) launch on June 16, 2022. To mark the occasion, the Copyright Office published a blog post, highlighting the CCB and Office’s educational resources and supporting materials about the CCB, numerous outreach events, and an overview on the demographics the CCB is serving. In its 2022–2026 strategic plan, the Office identifies “Copyright for All as an overarching strategic goal: to make the copyright system as accessible to as many people as possible. Launching the CCB is a major step toward copyright for all and expanding access to justice.”

Copyright Office Hosts Webinar on Registrations of Works Containing AI-Generated Elements: On June 28, the U.S. Copyright Office held its webinar titled Guidance for Works Containing AI-Generated Content, where the Office provided examples of applying its AI registration guidelines and walked viewers through how materials should be claimed and disclaimed in the electronic copyright application system. The Office stated that what it considers as “de minimis” is the opposite of what it considers an “appreciable amount.” The Office also announced its next webinar on international AI perspectives, which will take place on July 26th.

Biden Administration Activities

GAO Publishes Report on Generative AI: On June 13, the U.S. Government Accountability Office (GAO) published a two-page report on generative AI, highlighting how it is being used across various sectors and how it is developed. In highlighting the challenges surrounding generative AI, GAO specifically noted that “[G]enerative AI systems could be trained on copyrighted, proprietary, or sensitive data, without the owner’s or subject’s knowledge” and that “[t]here are unresolved requestions about how copyright concepts, such as authorship, infringement, and fair use, will apply to content created or used by generative AI.”

Congressional Copyright Related Activities

Senator Schumer Introduces AI Framework: On June 21, Senate Majority Leader Chuck Schumer (D-NY) introduced his “SAFE Innovation for AI” legislative framework and announced that, starting this fall, he would launch a series of AI Insight Forums that include AI developers, executives, scientists, community leaders, and other stakeholders. The goal of the forums is to progress forward with detailed policy proposals for Congress. Schumer’s framework relies on five pillars: “Security, Accountability, Foundations, Explain, and Innovation.” The “Accountability” prong in the framework calls for supporting creators by addressing copyright concerns and protecting intellectual property. Senator Schumer also acknowledged that an entirely new regulatory process must be created to formulate AI policies because it is “unlike anything Congress has done before.”

HJC IP Subcommittee Holds MMA Hearing: On June 27, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet held a field hearing in Nashville titled Five Years Later – The Music Modernization Act, to examine the impact of the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA), five years after it was signed into law in 2018. The hearing examined the system created by the MMA to administer blanket mechanical licenses and collect and distribute mechanical licensing royalties. The hearing also explored whether the legislation is operating as intended by Congress and considered various reforms. The general sentiment among witnesses was that the MMA and the MLC­—the nonprofit organization established under the MMA to issue blanket mechanical licenses for qualified streaming services—are functioning at a high level. The only consistent criticism among witnesses was that the MLC at times acts as a rule-making body rather than an administrative one—as the MMA statutorily outlines. Witnesses called on legislators and the U.S. Copyright Office to continue involvement in and oversight of the MLC in order to preserve the MLC’s perception as a neutral, impartial administrator. 

New Democratic Chief Counsel for House IP Subcommittee Announced: Jacqui Kappler will be the new Minority/Democratic Chief Counsel for the House IP Subcommittee, replacing Jamie Simpson. Kappler served as Oversight Counsel to the House Judiciary Committee and, before that, was Deputy Chief of Staff and Legislative Director for Representative Hank Johnson (D-GA)

Blackburn and Padilla AMFA Op-Ed: On June 21, Senators Alex Padilla (D-CA) and Marsha Blackburn (R-TN) penned ) penned an opinion piece in Variety, calling on their colleagues to advance the American Music Fairness Act (AMFA), which would create a terrestrial broadcast right under U.S. copyright law. In the op-ed, the senators explain that, because this right does not exist in the United States, American artists are missing out on approximately $200 million each year. AMFA seeks to close this loophole and compensate those hard-working musicians.

Copyright in the Courts

U.S. Supreme Court Denies Cert Petition in Lang Van v. VNG Case: On May 30, the U.S. Supreme Court denied VNG’s petition for certiorari in Lang Van v. VNGthe Ninth Circuit personal jurisdiction case for which the Copyright Alliance filed an amicus brief in support of Lang Van in 2020. The case was brought by Lang Van, a leading producer and distributor of Vietnamese music and entertainment, against VNG, a company based in Vietnam that operates a music streaming website. Lang Van alleged that VNG’s Zing music website and app, which VNG made available in the U.S., offered thousands of Lang Van’s copyrighted works without authorization and that Lang Van received no compensation for VNG’s use. In July 2022, the Ninth Circuit Court of Appeals held that VNG was subject to personal jurisdiction in the United States since VNG met all three prongs of the personal jurisdiction test under Rule 4(k)(2) of the Federal Rules of Civil Procedure, since (1) a copyright infringement claim was a claim under federal law; (2) VNG did not concede that any other state had jurisdiction; and (3) there was substantial evidence of VNG’s intentional direction in and contacts with the United States.

U.S. Supreme Court Denies Cert Petition in Copyright Preemption Case: On June 26, the U.S. Supreme Court denied the cert petition to hear an appeal by lyrics website, Genius, in a case involving whether Google breached Genius’ terms of service by copying its lyrics in Google search results. The issue was whether Genius’ state-law breach of contract claims seeking to enforce its terms of service are preempted by Section 301(a) of the Copyright Act. In 2022, the Second Circuit Court of Appeals had held that Genius’ breach of contract and unfair competition claims were preempted by the Copyright Act. In May 2023, the U.S. Solicitor General had filed a brief, urging the Court to deny the petition because the case was a poor vehicle for clarifying whether the breach-of-contract claims would be preempted for various reasons, including the fact that access to Genius’ website was not conditioned on any express promise to abide by Genius’ terms of service.

Visual Artists Respond to AI Companies’ Motions to Dismiss Infringement Class Action Lawsuit: On June 2, plaintiff Sarah Andersen—representing a class of visual artists—responded to motions to dismiss by AI companies Stability AI, DeviantArt, and Midjourney in response to the visual artists’ class action lawsuit. In their opposition to Stability’s motion to dismiss, plaintiffs claim to have sufficiently alleged direct infringement of their works by Stability and repeat arguments from the initial complaint that Stability infringed plaintiffs’ works by scraping them for unauthorized use as training material, by embedding and storing compressed copies of the works (which were then distributed to Stability’s users); and by creating and distributing Stability’s AI tools, which the response alleges are infringing derivative works. Further, the response alleges that each output that Stability’s tools generate is an infringing derivative work and that plaintiffs need not show substantial similarity because there is direct copying. In addition to direct infringement, the response alleges that Stability is vicariously liable for the infringing acts of its users. Finally, the response claims that plaintiffs sufficiently pled that Stability violated section 1202(b) of the DMCA by removing copyright management information (CMI) from the plaintiffs’ works. In opposition to DeviantArt’s motion to dismiss, plaintiffs argue DeviantArt is liable for many of the same acts of infringement alleged against Stability because DeviantArt’s commercial AI imaging product, DreamUp, knowingly incorporates Stability AI’s imaging product and is itself an infringing derivative work. The opposition claims that DeviantArt cannot limit its liability for direct infringement simply because it did not create Stable Diffusion or does not have knowledge of Stability’s scraping of plaintiffs’ works. Also included in the response is plaintiffs’ claims that they sufficiently pled that DeviantArt breached its own terms of service by creating an AI imaging product that violated copyright law. Similar to the response to Stability, plaintiffs’ opposition to Midjourney’s motion to dismiss accuses the company of seeking to profit from its AI image generator “while leveraging its opacity and complexity to prevent Plaintiffs and this Court from scrutinizing its legality.” The opposition goes on to respond to the arguments in Midjourney’s motion—many of which were also found in Stability’s motion—claiming that plaintiffs have sufficiently pled all claims related to direct infringement, vicarious liability, violations of section 1202(b), and other non-copyright claims. Unlike Stability and DeviantArt, Midjouney’s motion seeks to strike plaintiffs’ class because it claims a workable damages class cannot be constructed, a claim the opposition calls meritless and premature.

Authors Bring Copyright Infringement Lawsuit Against OpenAI: On June 28, two authors of literary works—representing a proposed class of plaintiffs—filed a lawsuit in the U.S. District Court for the Northern District of California against OpenAI. The complaint accuses the AI developer of copyright infringement related to the unauthorized use of plaintiffs’ works to train its proprietary large language model (LLM), ChatGPT. The complaint alleges that OpenAI 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 ChatGPT is an infringing derivative of plaintiffs’ works for which OpenAI is 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 asks for statutory damages, injunctive relief, and costs and attorney’s fees. Plaintiffs are represented by the Joseph Saveri Law Firm, which is the same firm that is representing a group of visual artists in their class action copyright infringement suit against Stability AI.  

Getty Seeks Injunction Against Stability AI in the UK: Getty Images sought an injunction from the London High Court to prevent Stability AI from selling its AI image-generating platform, Stable Diffusion, in Britain and to order the company to hand over and destroy all versions of Stable Diffusion that may infringe Getty’s intellectual property rights. Getty filed a case against Stability AI in London in January 2023, and is also in the midst of a legal battle with the AI company in the U.S.

Schneider Settles Lawsuit Against YouTube: On June 11, the parties voluntarily dismissed a lawsuit brought by Grammy-winning composer and musician Maria Schneider against YouTube and Google, after Schneider’s emergency petition to stay the case and appeal the court’s order denying class certification was denied back in May 2023. Schneider had originally filed a class action lawsuit with Pirate Monitor Ltd. alleging that the YouTube platform does not offer the plaintiffs, who are “ordinary creators of copyrighted works,” the same opportunity to remove infringing work as it does for larger content creators. The details of the settlement agreement were not made public, but the case was dismissed with prejudice.

NMPA Sues Twitter for Massive Copyright Infringement: On June 14, the National Music Publishers Association (NMPA), on behalf of 17 music publishers, filed a lawsuit against Twitter in the Middle District of Tennessee. The music publishers allege copyright infringement of approximately 1,700 songs mostly via audiovisual content posted by Twitter users and Twitter’s repeated failure to remove or disable access to infringing material and cease assistance to known repeat infringers. In a statement by NMPA CEO David Israelite to the LA Times, he noted, “Twitter stands alone as the largest social media platform that has completely refused to license the millions of songs on its service. Twitter knows full well that music is leaked, launched, and streamed by billions of people every day on its platform. No longer can it hide behind the [Digital Millennium Copyright Act] and refuse to pay songwriters and music publishers.”

Ninth Circuit Court Awards Statutory Damages for Individual Photographs Infringed by Zillow: On June 7, a three-judge panel of the Court of Appeals for the Ninth Circuit ruled in favor of VHT, a professional real estate photography studio, in its lawsuit against Zillow. The court affirmed the district court’s ruling that the 2,700 VHT photographs remaining at issue in the case were not a compilation, but rather, that each individual photograph constituted an infringement and that VHT was entitled to an award of statutory damages for each of the 2,700 infringements. Applying case law, interpreting the Copyright Act, and examining the U.S. Copyright Office’s statements on compilations, the court found that because VHT had individually licensed and published the infringed photographs as works separate from VHT’s master photographs database, the photographs had “independent economic value,” supporting the argument that VHT is entitled to statutory damages on a per work basis.

Copyright in Other Countries

Australian Music Industry Petitions Government to Close Loophole for Radio Royalties: The Australian music industry, led by the Australian record industry collecting society, the Phonographic Performance Company of Australia Limited (PPCA), launched a petition called “Radio Fair Play,” requesting that Australia’s House of Representatives remove broadcast radio caps on sound recording royalties. Currently, Australian radio broadcasters are required to pay artists and labels no more than 1% of the station’s gross annual revenue.

EU AI Act Passes Parliament: On June 14, the European Union Parliament passed a draft of the EU AI Act, which is now in the “trilogue” stage of the EU regulatory process where the draft will be negotiated and finalized between the Parliament, Council, and Commission. A deal may be reached by November 2023, but the Act must be finalized by January 2024 if it is to come into force before next year’s E.U. election. The current draft maintains a tiered approach of obligations for AI companies based on the risk-level of the AI machine and requires generative AI companies to disclose training data comprising of copyrighted works.

EUIPO Issues Report on EU Citizens Attitudes Toward IP and Piracy: The European Union Intellectual Property Office (EUIPO) released its report titled European Citizens and Intellectual Property: Perception, Awareness, and Behaviour-2023. The report found that 93% of participants believed that it was important for inventors, publishers, creators, and performing artists to be able to protect their rights and be paid for their work, and that the majority disagreed with the various reasons behind obtaining digital content from illegal sources including that “it is OK if only for personal use (65% disagree or tend to disagree with this), if the price of the content is too high (72%), or if the content is not available via a legal source (74%). A minority (14%) admitted to having intentionally used illegal sources for online content, but in the younger age group (15-24), the intentional use of illegal sources soared to more than twice that rate at 33%.

Italian and German Authorities Shuts Down Pirate IPTV Service and Seizes Assets of Over 620,000 Euros: Italian and German authorities acted on a decree issued by the Public Prosecutor at the Court of Milan and shut down 60 Telegram channels and a website used to sell illicit IPTV subscriptions while also seizing assets worth over 620,000 euros. The individuals suspected of operating the piracy network involved 12 Italian nationals and an Albanian national living across Italy and Germany.

Industry Activities

Authors Guild Introduces Model Contract Language Related to AI-Generation of Literary Works: On June 1, the Authors Guild introduced four new model clauses related to AI in the Guild’s Model Trade Book Contract and Model Literary Translation Contract. The new clauses stipulate that an author’s written consent is needed for their publisher to use AI-generated book translations, audiobook narration, or cover art. The guild also noted that later this summer, it will be publishing AI guidelines for authors and publishers regarding identifying and addressing AI-generated literary works. Further, the Guild states, “The purpose of these demands is to prevent the use of AI to replace human creators. The Authors Guild strongly believes that human writing, narration, and translation are vastly superior to their AI mimics. Moreover, as an ethical matter, the Authors Guild opposes relying on these tools to replace human creators, in part because current AI content generators have largely been trained on pre-existing works without consent. The Guild stands in solidarity with human creators in other industries, who like authors, face professional threats from AI-generated content flooding the markets for their work.”

Adobe Announces Copyright Liability Reimbursement Policy: In early June,Adobe announced that it will reimburse enterprise users of its AI technology, Firefly, against copyright lawsuits. According to Claude Alexandre, Adobe’s VP of Digital Media, Adobe will provide “full indemnification for the content created through [our AI software].” Alexandre further noted that “Adobe has actually offered indemnification for quite some time against the use of its own products, and in particular for stock [images],” and the new AI software offer is an extension of the practice. 

ASCAP Releases AI Principles and Initiatives: On June 13, the American Society of Composers, Authors and Publishers (ASCAP) announced several AI initiatives by the performing rights organization, including a set of principles, creator education, panels, a startup incubation, and policy development related to AI development and use. ASCAP’s AI principles focus on (1) Prioritizing rights and compensation for human creativity; (2) Transparency in identifying AI vs. human-generated works and retaining metadata; (3) Requiring consent to authorize works for inclusion in an AI training license; (4) Promoting a Free market with a willing buyer, willing seller licensing framework; (5) Crediting when creators’ works are utilized to produce new AI-generated music; and (6) Ensuring an even playing field that values intellectual property globally.

Audiovisual Anti-Piracy Alliance Publishes Report on App Piracy: June 19, the Audiovisual Anti-Piracy Alliance published a report titled A Look At The Problem, Challenges, and Effects of App Piracy, which categorized illicit apps into four categories: IPTV generic media players, custom-branded IPTV, live streaming sports, and movies and series streaming. The report also examines how pirates generate revenue by charging for these illicit apps, while exploiting and selling user data and launching ad word campaigns.

DCA Releases New Report on Link Between Subscribing to Pirate Sites and Incidence of Credit Card Theft: On June 21, the Digital Citizens Alliance (DCA) issued a report titled Giving Piracy Operators Credit: How Signing up for Piracy Subscription Services Rachets up the Risk of Credit Card Theft and Other Harms. According to the report, and based on a sample of 2.030 Americans, 72% of Americans who subscribe to pirate media sites experience incidences of credit card fraud compared to an 18% occurrence of credit card fraud among those who do not subscribe to pirate sites. Further, one in three of those surveyed noted they watched pirated content during the last year; and one in 10 reported subscribing to a pirate streaming service. As the DCA report notes, “piracy was once primarily a headache for content creators, [and] users of these sites now face significant risks.” Piracy subscription services make an estimated $1 billion a year providing services to at least nine million U.S. households.”

Look Forward To And Save the Date For…

Deadline to Submit Comments to USCO on Interim Rule for Registrations of Secure Tests: July 3 is the deadline to submit comments to the U.S. Copyright Office’s interim rule regarding registrations of secure tests, continuing the emergency adoption during the COVID-19 pandemic of otherwise eligible tests that were administered online during the national emergency to qualify as secure tests. The Office is requesting comments on whether the interim rule should be made permanent and whether it should restrict examinations of secure test claims to virtual examinations. More information is available on the Copyright Office’s Secure Tests Rulemaking webpage.

Deadline to Submit Written Petitions for Ninth Triennial Rulemaking to USCO: July 7 is the deadline to submit written petitions to the U.S. Copyright Office in response to its 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 11.

USCO AI Webinar on International Perspectives on AI and Copyright: On July 26th from 11 a.m. to 1 p.m. ET, the U.S. Copyright Office will host a webinar on International Perspectives on AI and Copyright Law on July 26 at 11 a.m. ET. During the event, experts will discuss how other countries are approaching copyright questions such as authorship, training, exceptions and limitations, and infringement. The event will also focus on possible areas of “convergence and divergence” involving generative AI, and provide an overview of legislative developments in other regions. Panelists include Jane Ginsburg, Columbia Law School; Andres Guadamuz, University of Sussex; Bernt Hugenholtz, University of Amsterdam; Matthew Sag, Emory University School of Law; 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. More information is available on the Office’s event page.

USCO Monthly Recordation System Webinar: On July 27 at 1 p.m. ET, the U.S. Copyright Office will host its final monthly webinar designed 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 transfer their copyrights to someone else electronically. This session will “cover announcements about the module, important reminders, frequently asked questions, and a live Q&A session.” Anyone interested in attending (including members of the public) may join by registering. Additional information can be found on the registration page.

BIPOC Podcast Creators Copyright for Podcasters Webinar: On July 27 at 8 p.m. ET, BIPOC Podcast Creators will present a live one-hour webinar titled Copyright for Podcasters: What Every Podcaster Needs to Know, conducted by Copyright Alliance’s Copyright Counsel Rachel Kim. Registrants will have access to a recording of the webinar following the event. More information is available on the registration page.

If you aren’t already a member of the Copyright Alliance, you can join today by completing our Individual Creator Members membership form! Members gain access to monthly newsletters, educational webinars, and so much more — all for free!

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