Tag: Year in Review

In 2023, like the rest of us who toil in copyright and creativity, the U.S. Copyright Office was also laser focused on the impact of AI on copyright. Last week, we published a two-part blog series highlighting the most significant activities related to Artificial Intelligence (AI) and copyright that took place in 2023. Much of what we discussed in part one of the blog addressed all the different things the U.S. Copyright Office is doing related to AI, ranging from listening sessions, webinars, and requests for comments on its impending study of AI issues.

Although the Copyright Office was extremely busy on issues related to AI, there were actually a host of other important issues and activities that the Office was actively involved in that had nothing to do with AI. In case you missed any of these, we highlight below the most important non-AI related Copyright Office activities that took place in 2023.

The Copyright Claims Board

At the start of 2023, the Copyright Claims Board (CCB) was a mere six and half months old. As you might imagine, at such an early stage of its development, there wasn’t much to note about the CCB last year at this time. But that all changed in 2023. 

In 2023, the CCB issued its first thirteen decisions. In February the CCB made its first final determination of a CCB case. In the case, Flores v. Mitrakos, the claimant alleged that the respondent filed a knowingly false takedown notice under the Digital Millennium Copyright Act (DMCA), which caused Google to remove materials from the Chrome Web Store. Through the CCB, the parties reached a settlement agreement that included a concession from the respondent that the information in the takedown notice was false and an agreement that the respondent will not file any future false takedown notices or counter-notices related to the claimant. The CCB approved the settlement agreement, dismissed the claim with prejudice (meaning that the claim cannot be brought again), and closed the case.

Later that same month, the CCB issued its first final determination on the merits in a case. The case, Oppenheimer v. Prutton, was referred to the CCB from the federal district court for the Northern District of California using a little known provision in the law that created the CCB (called the CASE Act) that allows a federal district court to refer a copyright case to the CCB if all the parties involved in the case agree (and other requirements are met). Since the respondent admitted to copying and displaying the claimant’s photograph on the respondent’s website and discovery had been completed already, the CCB only had to analyze the respondent’s defenses of fair use and unclean hands and render a decision. Ultimately, the CCB found for the claimant on copyright liability, holding that the respondent failed to meet its burden of proof on the fair use defense by failing to address three out of the four fair use factors, and that the respondent also failed to present sufficient evidence to support a finding of unclean hands. The CCB awarded the claimant $1,000 in statutory damages.

Throughout the year, the CCB rendered final decision in eleven other cases. We posted a blog last month summarizes the first twelve cases (the thirteenth decision was published after the blog was written). With the CCB now over 18-months old, we should expect many more decisions by the CCB in 2024.

In 2023, 419 total cases were filed with the CCB. Of these claims, 106 were “smaller claims.” In at least 172 of all cases, the claimant used legal counsel. At least 372 of the cases involved infringement claims, 77 involved Section 512(f) misrepresentation claims, and 17 involved claims for declarations of noninfringement. According to the eCCB docket, the works at issue in these cases were as follows: Pictorial Graphic & Sculpture (165 cases); Literary Works (62); Motion Picture and Audiovisual Works (85); Sound Recordings (49); Musical Works (34); Architectural Works (4); and some cases include claims for multiple works. Sixty foreign residents filed claims. Of all the cases filed, 409 were dismissed for one or more of the following reasons: Due to Respondent’s Opt-Out (47); Due to Failure to Amend Noncompliant Claim (183); Registration Issues (11); Due to Failure to Provide Proof of Service of Process (88); Claimant Withdrawal and Dismissal of Claims (37); Bad Faith Claimant (13); and Settlement (30). In 2023, there were 88 total cases that became active this year and 13 final determinations.

In addition to the cases filed and decided in 2023, the U.S. Copyright Office issued two new rules related to the CCB. The first rule amending the existing rules related to the filing of agreement-based counterclaims and related discovery requirements in cases before the CCB. The second rule allowed the CCB to modify or suspend certain rules when a claim is referred by a district court and, in cases that are first filed before the CCB, accept alternative proof of service forms. The new rule also clarified the rules governing default proceedings and law student representations.

Copyright Office Final, Interpretive, Interim, and Proposed Rules

In addition to the new CCB rules noted above, the Copyright Office also enacted several other final, interpretive, and proposed rules. One new rule issued by the Office related to Ex Parte Procedures. The final rule largely memorialized the Office’s existing procedures for ex parte communications between the Office and other parties while incorporating a few changes and clarifications. The new rule provided instructions for requesting ex parte meetings and identifying impermissible ex parte communications.

In June, the Office published an 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.

In September, the Copyright Office adopted an interpretive rule regarding fees for late royalty payments under the Music Modernization Act’s (MMA) statutory mechanical blanket license. In its interpretive rule, the Office declined to issue any regulations, instead finding that the statute is unambiguous as to “(i) due date provisions, (ii) direction to the Office to adopt regulations governing adjustments, and (iii) delegation of authority to the CRJs to promulgate late fee provisions.” Specifically, the Office concluded that “the plain and natural meaning of the statute is that ‘all royalties’ for a given monthly reporting period are ‘due’ no later than 45 days after the end of the monthly reporting period. Thus, any royalties received by the MLC for such reporting period after this ‘due date for payment’ are late.”

The Office also began several new rulemakings in 2023 including rules related to:

Access to Electronic Deposits: In September, the Copyright Office published a notice of proposed rulemaking (NPRM) that would update its regulations governing access to electronic deposits of published works submitted to the Office that have been selected for addition to the collection of the Library of Congress by expanding the categories of eligible deposits covered by the regulations including group registrations for published photographs, short online literary works, and works on an album, amongst others. The Copyright Alliance filed comments, as did others, opposing the proposed rule because it presents significant legal issues that require a more comprehensive discussion with affected stakeholders and raises serious security concerns.

Section 1201 Triennial Rulemaking Process: The Copyright Office began the long process it undertakes every three years to consider potential exemptions to the DMCA’s prohibition against circumvention of technological measures that control access to copyrighted works. In June, it published a notification of inquiry and request for petitions for its ninth triennial rulemaking proceeding. A total of 11 new petitions and 38 renewal petitions were filed. In October, the Office then published a notice of proposed rulemaking, proposing to renew of all but one of the existing exemptions to the DMCA prohibition against anti-circumvention of technological measures protecting copyrighted works. The Office noted that since no renewal petition was received for the current exemption permitting circumvention of video games in the form of computer programs for the purpose of allowing an individual with a physical disability to use alternative software or hardware input methods, the Office therefore will not recommend this exemption to the Librarian for approval. Proposed new or expanded exemptions include expansions to the TDM of literary and audiovisual works in the scholarly/research contexts and a new proposed exemption of computer programs for generative AI research. In the notice, the Office also launched three rounds of public comments on new or expanded exemptions in addition to virtual public hearings which will be held in spring 2024. Initial written comments in support of a proposed exemption were due in December. Written comments in opposition of a proposed exemption and written reply comments from supporters of a proposed exemption and parties that neither support nor oppose a proposal are due in February and March 2024, respectfully.

Termination Rights and MMA’s Blanket License: In September, the Office published a supplemental notice of proposed rulemaking (SNPRM) to further clarify policies and procedures surrounding royalty distribution and dispute resolution practices for royalties administered by the MLC. The SNPRM includes additional analysis on the application of the derivative works exception to the statutory termination right in the context of various royalties administered by the MLC.

Copyright Office Studies

In addition to the AI and copyright study that was the primary focus of many in the copyright community, the Office also continued a joint study with the U.S. Patent and Trademark Office, that actually began in late 2022 relating to issues of intellectual property (IP) law and policy associated with non-fungible tokens (NFTs). In January, the Copyright Office held a day-long roundtable—which consisted of four separate sessions on topics such as technological processes, creative sector uses of NFTs, and enforcement—to help gather further input on the joint study. We anticipated that the study would be published in the fall of 2023, but since that did not happen, we anticipate that it will be published in 2024.

Copyright Office Modernization Activities

Throughout 2023, the Library of Congress and the Copyright Office continued their ongoing effort to modernize the Office. Staff of the Office and Library held two public meetings with the Copyright Public Modernization Committee (CPMC). The bulk of the fourth meeting of the CPMC, which was held in March, was comprised of copyright registration staff giving a demonstration of the Enterprise Copyright System (ECS) Registration module, which CPMC members agreed reflected significant progress. The demonstration included both the user side and the examiner side of ECS. This was the first time anyone other than Office and Library personnel was able to see a demonstration of ECS. Office staff indicated that there will be an opportunity for user testing. The fifth CPMC meeting, which was held in August, featured the progress made in modernization efforts to the Copyright Office’s online services and systems. The modernization team presented updates and features including a feature that directs registrants to choose the correct application form by asking a series of questions, standardizing displays for forms in the limited licenses that the Copyright Office administers and digitizing many more analog historical records for the public.

Copyright Office Leadership Changes

Throughout 2023 there were numerous changes in the Copyright Office leadership. In January, Andrew Foglia was appointed to be Deputy Director of Policy and International Affairs for the U.S. Copyright Office. In March, the Emily Chapuis was appointed to be the Deputy General Counsel for the U.S. Copyright Office, and later that month, Iyauta Green was appointed to be the Deputy Director of Operations for the U.S. Copyright Office.

Conclusion

The Copyright Office has an incredible amount of work ahead of them in 2024 on a range of issues. In addition to the AI study, we anticipate the Copyright Office will publish its NFT Study, and also expect continued work to modernize the Office’s registration practices.

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Copyright enthusiasts knew that 2023 would bring with it a highly anticipated decision in one of the biggest fair use cases in decades: Andy Warhol Foundation v. Lynn Goldsmith. Indeed, the Supreme Court’s opinion—whether you agree with it not—is nothing short of a lodestar in the world of copyright law that will influence fair use cases for years. But while Warhol grabbed all the headlines, there were a few other major copyright decisions that signaled how the law will be applied to key issues like deposit requirements, the protection of safety codes and standards, and the unauthorized scanning and distribution of copyrighted works. This blog will discuss those cases and their impact. But first, Warhol.

Landmark Warhol Decision Reins in Transformative Fair Use

On May 18, the Supreme Court, in a 7-2 opinion written by Justice Sonia Sotomayor, found that the purpose and character of Andy Warhol Foundation’s (AWF) use of Lynn Goldsmith’s photograph did not favor a fair use defense under the first fair use factor. For a full background on the facts and procedure of the case, see this earlier blog. The landmark decision reaffirmed a critical tenet of the fair use doctrine: that whether a use is transformative not only doesn’t control a fair use determination, but it also doesn’t control a factor one analysis. Sotomayor’s thoughtful examination of the boundaries of fair use—paired with a recognition of the importance of copyright owners’ right to prepare derivative works—rightfully reined in expansive notions of transformative use by lower courts and others who have misinterpreted the doctrine as first handed down by the Court in Campbell v. Acuff Rose Music almost 30 years ago.

While some commentors claim the decision is narrow because it addresses a specific situation—use of images for licensing to magazines—the opinion’s (and concurrence’s) affirmation of the limited weight of transformativeness and significance of the derivative works right is anything but narrow. The fact that the Court did not, as a matter of procedure, opine on other uses that were not at issue in the case doesn’t mean its analysis is inapplicable to other uses. For example, it’s not hard to see how the Court’s treatment of transformative use could impact artificial intelligence developers’ fair use claims related to their unauthorized copying and ingestion of copyrighted works for training purposes. And while many generative AI infringement cases are still in their early stages, AI developers who rely heavily on transformative use arguments to support such unauthorized copying and ingestion may be in for a Warhol-based reality check. 

Ultimately, Sotomayor’s opinion swings the fair use pendulum back to its proper position, confirming the intended context and limited application of transformative use within factor one. This reaffirmation of the proper weight that should be afforded to transformative use shouldn’t come as a surprise, as other courts have recently begun to recognize that expansive notions transformative use are a “high-water mark.” Warhol assures us that the high water is now receding and will hopefully settle at the level that the Supreme Court intended.

Internet Archive’s Manufactured “Lending” Theory Rejected

In March, the District Court for the Southern District of New York granted a motion for summary judgment filed by a group of book publishers in their case against the Internet Archive (IA) for copyright infringement related to the scanning of tens of thousands of literary works and distribution of digital copies to the public for free. The case was brought back in 2020, when four book publishers challenged the Internet Archive’s contrived theory of controlled digital lending (“CDL”) that it argued allowed it to scan and distribute digital copies of books to the public without a license.

The court’s order denounced Internet Archive’s CDL theory as clear copyright infringement and unequivocally rejected Internet Archive’s fair use defense. Considering the first fair use factor, the court explained that “[t]here is nothing transformative about IA’s copying and unauthorized lending of the Works in Suit” because it did not alter the purpose and character of the books “with new expression, meaning or message.” In the court’s view, digitally reproducing and distributing the books plainly violated the publishers’ exclusive rights.

The court also found that the three remaining factors clearly favored the publishers. Regarding the nature of the works, the court explained that creative works such as the fiction books involved in the case are at “the core of copyright’s protective purposes,” and even the accompanying nonfiction books have creative value in the “subjective descriptions and portraits … whose power lies in the author’s individualized expression.” Addressing factor three, the court found that Internet Archive copied and disseminated the entirety of the books at issue. Finally, considering the fourth factor, the court explained that the publishers were deprived of benefiting from a “thriving ebook licensing market for libraries” as a result of Internet Archive’s rote, unlicensed copying and lending of their works.

The Internet Archive recently filed an opening brief in its appeal of the decision, but it’s hard to see how it could convince a court to embrace such a thoroughly rejected justification for infringement. However, it’s not surprising that the Internet Archive is eager to challenge the adverse decision, given that it is facing a similar lawsuit related to the unauthorized digitization and distribution of sound recordings owned by Universal Music Group and other record labels.

Protection of Safety Standards and Codes Suffers Setback

In September, the U.S. Court of Appeals for the District of Columbia issued an opinion in American Society for Testing Materials (ASTM) v. PublicResource.org, holding that the noncommercial distribution of privately-authored safety codes and standards that are incorporated by reference into law qualifies as fair use. The case was initially brought in 2013 by ASTM and other Standards Development Organizations (SDOs) against PublicResource.org, an organization that digitized and posted to the internet many of the SDOs works without authorization. In 2017, the District Court for the District of Columbia found that PublicResource.org’s activities did not qualify as fair use and ordered the posted materials to be taken down from its website. However, over the next five years, the case was appealed, reversed and remanded, and eventually the Court of Appeals for the District of Columbia affirmed a decision that PublicResource.org’s reproduction and dissemination of most of the works at issue qualified as fair use.

Unfortunately, the court misapplied the fair use factors and the decision disregards the harm to existing and potential markets for the works of SDOs. In an amicus brief filed in support of ASTM, we explain that allowing PublicResource.org to copy and distribute the copyrighted works of SDOs—which they invest much time and resources into developing—would effectively manufacture a carve-out from the protections guaranteed by copyright law. While we support making federal, state, and local laws accessible to the public, our brief points out that SDOs already make these codes available, and the fact that they are incorporated into laws does not strip them of copyright protection.

Ultimately, only Congress is empowered to decide whether and under what circumstances exceptions to copyright law can be expanded. The type of privately-authored standards at issue in the case have been around for over a hundred years, and never has Congress said that they shouldn’t enjoy the full protections of the Copyright Act. In fact, in 2023 a bill was introduced by a bipartisan group of Senators that would ensure safety standards do not lose copyright protection when they are incorporated into law by name, as long as they are accessible for free on a publicly available website. The Copyright Alliance supports the Pro Codes Act and looks forward to its reintroduction in 2024.

Deposit Requirement Found to be Unconstitutional

In August, the D.C. Circuit Court of Appeals reversed a 2021 district court decision that held the Copyright Act’s section 407’s deposit requirement was not an unconstitutional taking, but rather a voluntary exchange in return for the benefit of federal copyright protection. The case stemmed from a 2018 dispute between a small book publisher, Valancourt, and the U.S. Copyright Office, which demanded that Valancourt deposit 341 works that it published through its print-on-demand service under section 407’s mandatory deposit rule. Valancourt sued the Copyright Office soon after, seeking to enjoin the federal government from demanding deposit copies and alleging the mandatory deposit provisions are an unconstitutional taking of property without just compensation in violation of the Fifth Amendment and an unconstitutional burden on free speech in violation of the First Amendment.

The Court of Appeals’ August decision in favor of Valancourt only addressed the Copyright Office’s demand for physical copies of works in the context of the Fifth Amendment, finding that section 407, as applied by the Copyright Office, constituted an unconstitutional taking. Reviewing the role and evolution of the mandatory deposit requirement in U.S. copyright law, the court found that the current mandatory deposit requirement was not tethered to any benefit in exchange for the submission of physical deposits, because copyright protections automatically vest at fixation.

One unresolved question is whether copyright owners van voluntarily disavow or abandon their copyrights in order to avoid the deposit requirement. The court declined to resolve the issue but explained that existing authority and Office guidelines did not make clear that such a theory could be applied for parties to avoid the mandatory deposit requirement. The court also declined to address Valancourt’s First Amendment claims because it concluded that Valancourt would prevail anyway on the Fifth Amendment claim.

In late 2023, the Court of Appeals rejected the Copyright Office’s petition for an en banc rehearing of the case. While it seems the case is over for now, the decision will surely impact the development of future Copyright Office deposit policies and the Library of Congress’s collection of physical versions of copyrighted works.

Looking Ahead

2024 will undoubtedly be another important year for copyright litigation, as the many lawsuits brought by creators and copyright owners against AI developers will progress and lead to potentially game-changing decisions. Outside of AI, the cases against Internet Archive may finally put to rest the manufactured “controlled digital lending” theory that has already been recognized as having no legitimate foundation in the law. The Supreme Court will also take on the discovery rule in Warner Chappell Music v. Nealy, which may resolve a circuit split over what constitutes a timely copyright claim. And, of course, the impact of Warhol will begin to take shape, as courts apply the Supreme Court’s landmark confirmation of the limited nature of transformative fair use. 

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During the first few weeks of 2023, we took a look back at 2022 by summarizing the most important copyright-related court cases, U.S. Copyright Office activities, and legislation that commanded our attention in 2022. In this blog, we look forward and try to predict the most significant copyright issues that will draw the focus of the copyright community in 2023. This blog won’t attempt to cover everything—just the highlights. And, no doubt, there will be important, potentially unforeseen copyright issues that will arise in 2023 that won’t be on this list. With those two caveats in mind, and in no particular order, we present some of the most significant copyright issues we expect to arise in 2023.

AWF v. Goldsmith

Perhaps the biggest copyright news to drop in 2023 will be the U.S. Supreme Court decision in Andy Warhol Foundation v. Goldsmith. It’s rare for the Supreme Court to take on a fair use case, so any time it does, the case has the potential to be earthshaking and to have a tremendous impact on future litigation and spawn numerous panel discussions, news articles, and law review articles. A decision in this case could be especially impactful because it will decide the standards for determining whether and under what circumstances a work can be transformative under the first fair use factor. There is no doubt that this is a case that anyone and everyone even remotely connected to copyright will be following in 2023 as the decision in the case could have a lasting impact on transformative use analyses and copyright owners’ derivative works right not just in 2023 but well into the future.

Artificial Intelligence Policy

Artificial Intelligence (AI) issues were a hot topic of discussion by policymakers, stakeholders and many others in 2022, but much of those discussions (at least in the early part of the year) failed to consider the important copyright issues at stake when copyrighted works are used without permission (or compensation) to train AI systems. As AI discussions continued throughout 2022, this seemed to change, as more individual creators and the organizations that support them raised concerns about their works being used in an unauthorized manner. Just last week, a group of artists filed a class action lawsuit against Stability AI—the creator and operator of the Stable Diffusion AI image generator—for the infringement of billions of copyrighted images it uses without permission to train its system. And earlier this week, Getty Images announced a lawsuit it was bringing against Stability AI in London.

This just goes to show that the copyright issues associated with AI are not going away anytime soon and, in fact, are likely to demand a significant amount of the copyright community’s focus in 2023 and beyond. One important AI-related copyright issue that will be followed closely is the copyrightability of works created by or through the use of AI. The case of Thaler v. Perlmutter pending in federal court, in which this issue is at the forefront, has received most of the attention here. However, the Copyright Office is also considering whether to cancel the copyright registration of Kristina Kashtanova, an artist and AI consultant and researcher, for her partially AI-generated graphic novel, Zarya Of The Dawn. Given the nuances of the Kashtanova registration, the Office’s decision in that case may very well be the more impactful of the two cases moving forward and is one that the copyright and AI communities should be watching closely in 2023.

Another copyright-AI related issue that should draw significant attention is the U.S. Copyright Office and the U.S. Patent and Trademark Office response to a request by Senators Tillis and Coons to conduct an examination of the relationship between IP and AI. That may include the formation of a national commission on AI, as was requested by the Senators. But as noted in the response to the Senators, the formation of such a commission could be difficult because it would require funds to hire staff and pay commission members. Even if a commission is not ultimately formed, there is no doubt that these two Offices will be examining and requesting input on the relationship between IP and AI in some manner in 2023.

Of course, U.S. Government policymakers are not the only ones considering AI-copyright issues. We are seeing these issues arise and be considered by policymakers throughout the globe as more nations consider what their AI laws and policies ought to be, and that will undoubtedly  continue in 2023. It is our hope that whatever the results of such deliberations, that ultimately, they uphold the underlying goals and purposes of copyright and continue to respect the rights of creators and copyright owners. To find out more about the Copyright Alliance views on copyright-related AI issues, check out our position paper on the issue.

American Music Fairness Act (AMFA)

Over the years, there have been many different legislative proposals that sought to codify a terrestrial broadcast right in sound recordings. Many of those legislative approaches didn’t get very far. But the latest attempt to address this issue—the American Music Fairness Act (AMFA)—may be different. The bill appeared to pick up some momentum this Fall when a companion to the House bill was introduced in the Senate, and the U.S. Copyright Office and the U.S. Patent and Trademark Office sent a supportive letter to the Chairmen and Ranking Members of the House and Senate Judiciary Committees. But the big indicator that this bill may have real hope of making it across the finish line, unlike its predecessors the House Judiciary Committee passed an amended version of AMFA in mid-December. AMFA passing the House Judiciary Committee is especially significant because it’s the first time a bill addressing this issue has passed through full committee in over a decade. This may indicate that AMFA will continue to get a lot of attention in Congress and by stakeholders in 2023.

Copyright Claims Board

After years of anticipation, the U.S. Copyright Office’s new Copyright Claims Board (CCB) launched in June of 2022. Close to 300 cases were filed with the CCB, but by the end of 2022, apart from the one case that was transferred from a district court, none of the active cases had progressed much further than the issuing of scheduling orders. Throughout 2023, these and other active cases will progress through the system and we’ll begin to see discovery, conferences, hearings and other indications that these cases are moving to an ultimate determination by the CCB officers. So, although right now we may not have good feel for how the CCB is working, by the end of 2023 we should have a much better idea.

Hachette v. Internet Archive

Since the Association of American Publishers (AAP) first filed suit on behalf of four of its book publisher members two years ago against the Internet Archive (IA) for the illegal mass scanning and distribution of literary works under the guise of the fabricated legal theory referred to as “controlled digital lending,” the case has been slowly proceeding through the Southern District of New York. In 2022, both sides filed motions for summary judgment and both sides responded. As a result, the next step is for the district court to possibly hold a hearing and then issue a ruling on the summary judgment motions. Any decision(s) coming from the district court would almost certainly be appealed by the losing party. Nevertheless, the stakes are extremely high since this case will have a lasting impact on the ability of copyright owners to protect and control their works, and as such, will no doubt be a case that the whole copyright community, not just publishers and authors, will be watching in 2023.

Some other cases that will be closely watched in 2023 include Hunley v. Instagram, which will consider the server test, Valancourt v. Garland, which challenges the constitutionality of the mandatory deposit provisions of section 407 of the Copyright Act, and the aforementioned Thaler v. Perlmutter.

Copyright Office Modernization

The Copyright Office has been taking steps to modernize during the past several years. Last year, we saw some of the tangible results of this work. For example, in the summer of 2022, the new recordation system was made publicly available, allowing users to submit electronic documents related to transfer of copyright ownership or other documents pertaining to copyright under section 205 of the Copyright Act. Although the Office has made recent progress to modernize, there is still much work to be done. We look forward to seeing aspects of the new registration system demonstrated by the Office in February. The Office has also testified to the fact that they are actively examining numerous other improvements to the registration system, such as:

• a new group registration for two-dimensional works of visual art;
• increasing the limit on the number of photographs that can be registered in a group registration for photographs; and
• implementing a tiered fee structure that permits small businesses and individual creators to pay a reduced fee to register works.

We were pleased to see that the Office is considering these improvements and others. Rights holders have waited much too long for these improvements, and we hope to see them rolled out in 2023. We also think other improvements to the registration system are necessary, such as those aimed at improving and updating the deposit and best edition requirements, and we will continue to push for those changes. And to the extent any of these changes require legislative amendments, we plan to work with Congress, the Copyright Office, and other stakeholders to make them a reality in 2023.

Right-to-Repair Legislation

In 2022, there were a host of right-to-repair bills that were introduced in the Senate and the House, and also in several state legislatures. These bills are generally intended to require manufacturers of certain types of equipment, like tractors and cell phones, to permit users or authorized repair shops to repair certain types of equipment. In theory, these right-to-repair bills should not implicate copyright concerns, but some of the bills were intentionally or unintentionally drafted very broadly and would therefore have significant damaging copyright implications. Most of the impetus for these bills comes from farmers who want to be able to repair their tractors, but opportunistic anti-copyright groups that have long sought for a back-door way to circumvent copyright protections have tried to latch on to the farmers’ movement.

On January 8 of this year, the American Farm Bureau Federation (AFBF) and John Deere signed a Memorandum of Understanding (MOU) about agricultural Right to Repair. Importantly, the MOU stipulates that AFBF encourages its state organizations to “refrain from introducing, promoting, or supporting federal or state ‘Right to Repair’ legislation that imposes obligations beyond the commitments in this MOU.” PIRG Right to Repair Campaign Director Kevin O’Reilly said that they plan to continue to push for right-to-repair legislation, despite the fact that there is now a market solution to the tractor repair issue. (What is it they say about never letting the truth get in the way of a good story?) Because the AFBF has agreed not to push for right-to-repair legislation, the only parties left to push for legislation are those who have ulterior motives, so it will be interesting to see what happens next. No doubt there will be right-to-repair legislation introduced in the states and in Congress, but it’s likely that there will be many fewer bills introduced and it’s likely that none of these bills get much “traction.”

DMCA

Millions of individual creators and small and large businesses throughout the United States rely on the protections of copyright law—including the notice and takedown provisions of the Digital Millennium Copyright Act (DMCA)—to protect their creative efforts and investments in the creation and distribution of new copyrighted works. Every year we see examples of creators, copyright owners, platforms, and others using the notice and takedown provisions of the DMCA—sometimes done effectively and correctly and sometimes not. I am confident that, as with prior years, we will see our share of good and bad DMCA takedown stories in the news. In 2023, there will also be considerable discussion about the need for legislation to update and improve the now quarter century old law. Once again, as was the case in prior years, it is likely that there is legislation introduced or drafted for consideration and/or hearings on these issues as Congress determines what the next logical step is to help combat rampant piracy.

SMART Copyright Act

The development and implementation of effective standard technical measures for the protection and identification of copyrighted works online are critical components to combatting infringement in the digital age. Congress understood this when it enacted section 512(i) of the Copyright Act. But section 512(i) has not been effective. It has been dormant for a quarter century, and, in 2022, Congress took notice. In an effort to find a middle ground between all the stakeholders, Senators Tillis and Leahy introduced “the Strengthening Measures to Advance Rights Technologies Copyright Act (“the SMART Act”), which would, among other things, establish a triennial public rulemaking process (separate from section 512(i) through which the Librarian of Congress would publicly designate certain technical measures. There was no formal activity on the bill because the bill’s sponsors wanted the U.S. Copyright Office to complete its study of technical measures and standard technical measures before determining whether and what amendments to the SMART Copyright Act were warranted. At the end of 2022, the Copyright Office issued its findings in its technical measures and STM studies. Also, in mid-December, Representatives Judy Chu (D-CA) and Kelly Armstrong (R-ND) introduced their own version of the SMART Copyright Act in the House. With all this activity on the SMART Copyright Act in late 2022, it certainly appears that the SMART Copyright Act is being teed up to be more fully considered by Congress in 2023.

Copyright Royalty Board (CRB)

There has been lots of talk in the music community recently about the Copyright Royalty Board (CRB) and the need to fix the problems that exist with the CRB. At this stage, there seems to be general agreement that there are problems with the CRB that need to be addressed, but it’s unclear to what extent there is agreement on what those problems are, how significant they are, how to fix them, and whether the fixes would be through legislation, changes to the rules, or some combination thereof. In 2023, we should get a better idea of what directions these discussions are taking and what changes to the CRB are ripe for consideration.

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2022 was not the busiest year in terms of copyright legislation, but nonetheless, there were some significant legislative activities both in Congress and at the state level, including one copyright bill that was enacted into law and several bills that seemed to receive enough consideration that they may appear high on the Congressional IP docket in 2023. Below is a quick overview of the various copyright-related legislative activities that transpired in Congress and in the states in 2022.

Enacted Legislation

Copyright legislation can often be complex and get bogged down when legislators attempt to sate the interests of a myriad of stakeholders with diverse views. That was not the case with the only copyright legislation that was enacted in 2022—the Artistic Recognition for Talented Students (ARTS) Act, Public Law 117-201. The ARTS Act directs the Register of Copyrights to waive the copyright registration fee for student winners of the Congressional Art Competition, sponsored by the Congressional Institute; and the Congressional App Challenge, sponsored by the Internet Education Foundation (IEF). While the ARTS Act may not have been high on anyone’s legislative priority list, it’s hard to imagine that any individuals or organizations would have had concerns with it either.

The ARTS Act was originally introduced in February 2021 in the Senate by Senators Thom Tillis (R-NC) and Patrick Leahy (D-VT) as S. 169, and in the House by Representatives Hakeem Jeffries (D-NY) and Nancy Mace (R-SC), as H.R. 704. Within months, the bills passed the Senate and House respectively. But it wasn’t until September 2022 that the Senate bill was also passed by the House and then later sent to the President, where it was signed into law on October 17.

In addition to the ARTS Act, there were relatively minor, targeted changes to section 105 of the Copyright Act that were made in H.R.7776, the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 that was signed into law by the President on December 23. Sections 3514 and 6306 of the law amend section 105 of the Copyright Act to expand the list of “covered institutions” pertaining to copyright of Government works to include faculty at the U.S. Merchant Marine Academy and the U.S. Coast Guard Academy and to National Intelligence University.

Copyright Bills Introduced and Considered in Congress

As usual, there were several copyright bills that were introduced and considered by Congress in 2022. These include:

SMART Copyright Act

In March, Senators Thom Tillis (R-NC) and Patrick Leahy (D-VT) introduced “the Strengthening Measures to Advance Rights Technologies Copyright Act of 2022 (“the SMART Act”), S. 3880. Among other things, the bill would add a new section—section 514—to the Copyright Act to establish a triennial public rulemaking process through which the Librarian of Congress would publicly designate certain standard technical measures (or designated technical measures, known as DTMs). Following the bill’s introduction, many groups, including the Copyright Alliance, issued statements commending both Senators for introducing the bill. You can find all of the statements on the Copyright Alliance’s DMCA Legislative Reform webpage, and you can read more about the legislation in a Copyright Alliance blog.

While the Senate Judiciary Committee never voted on the bill, it was the focus of many discussions and debates between stakeholders throughout the year. In April, the Copyright Alliance and 35 other organizations sent a letter to Senators Tillis and Leahy, commending them for introducing the bill. In the joint letter, the organizations stated, “We applaud your effort to breathe new life into what the Copyright Office…identified as the untapped potential of STMs [Standard Technical Measures],” and that “The SMART Copyright Act will encourage cooperation between platforms and rightsholders to address online piracy in practical, effective ways that benefit creators, consumers, and services.”

In June, various library organizations—including the Library Copyright Alliance (LCA), the American Library Association, the Association of Research Libraries, and the Association of College & Research Libraries—sent a letter to Senators Leahy and Tillis stating that they would withdraw their opposition to the SMART Copyright Act if specific language excluding libraries and archives, as provided in the letter, was included in the bill and the legislation did not change in a material way that affected libraries. The bill, as introduced, excludes libraries and archives from the scope of the bill’s proposed technical measures rulemaking process but the aforementioned libraries and archives sought further clarification. Ultimately, there was no formal activity on the bill because Congressional staff wanted the U.S. Copyright Office to complete its consideration of technical measures (see our blog for more information on this) before determining whether and what amendments to the SMART Copyright Act were warranted.

In the waning weeks of last year, the Copyright Office issued its findings in its technical measures and STM studies and Representatives Judy Chu (D-CA) and Kelly Armstrong (R-ND) introduced the Strengthening Measures to Advance Rights Technologies (SMART) Copyright Act of 2023, H.R. 9541, which is similar to the Senate counterpart, but not identical. As a result, it appears that the SMART Copyright Act will be more fully considered by Congress this year.

American Music Fairness Act

U.S. copyright law is relatively unique in that it does not provide for a terrestrial broadcast right in sound recordings. Various attempts to right this wrong have led to many different legislative solutions being proposed over the years. Many of those legislative approaches didn’t get very far, largely due to opposition by terrestrial (i.e., FM/AM) radio broadcasters. That was not the case for the most recent attempt to address the issue—the American Music Fairness Act (AMFA), H.R. 4130, which was introduced by Representatives Ted Deutch (D-FL) and Darrell Issa (R-CA). AMFA would require that performing artists are paid for the use of their songs on terrestrial radio, and in doing so would close the loophole in the law, while also ensuring that competing music platforms are treated the same and that small, local broadcasters are protected by only being required to pay a de minimis amount for using the work of performing artists.

In September, a companion bill, S. 4932, was introduced by Senators Alex Padilla (D-CA) and Marsha Blackburn (R-TN). Shortly thereafter, the U.S. Copyright Office and the U.S. Patent and Trademark Office sent a letter to the Chairmen and Ranking Members of the House and Senate Judiciary Committees, expressing support for legislation that would provide public performance royalties for performing artists for songs played on radio stations. The letter noted that enacting a public performance right for the broadcasting of sound recordings would remedy an anomaly under U.S. copyright law and that the U.S. “stands alone among industrialized nations in not recognizing such a right.”

In December, the House Judiciary Committee passed an amended version of AMFA by a voice vote. Most members of the Committee voiced their support for AMFA and the importance of bipartisan cooperation toward its passage. A few members emphasized the need to carefully balance the interests and concerns of both performers and local radio stations. Only Representative Steve Chabot (R-OH) expressed outright opposition to the bill, cautioning that its passage would cause harm to local broadcasters. AMFA’s passing the House Judiciary Committee is significant because it’s the first time a bill addressing this issue has passed through full committee in over a decade, and therefore it may be a strong indication that the bill is primed to be more fully considered by the 118^th Congress.

Pro Codes Act

In February, Representatives Ted Deutch (D-FL) and Darrell Issa (R-CA) introduced the Protecting and Enhancing Public Access to Codes Act (“Pro Codes Act”), H.R. 6769. The bill clarifies that model codes and standards do not lose copyright protection by virtue of having been adopted or incorporated by reference into law or regulation, provided that the codes/standards are available for free viewing on a publicly accessible website. If passed, the bill would allow citizens to know what the law is without having to pay for it, while still preserving the efficient and effective system used by standards development organizations to create model codes and the copyright protection for those model codes. While the bill was not formally considered by the House Judiciary Committee, there were many positive developments that will likely lead to a revised bill being introduced and considered during the current congressional session.

Copyright Term Legislation

So far, we’ve discussed a few bills that at the very least would make conceptually beneficial changes to U.S. copyright law. But not all copyright bills that were introduced in 2022 fit into that category. In May, Senator Josh Hawley (R-MO) introduced the Copyright Clause Restoration Act of 2022, S. 4178, which proposed an original term of copyright protection of 28 years, and a renewal term of an additional 28 years. Additionally, the bill would apply retrospectively on or after May 1, 2022, to the works of copyright owners who have a market capitalization of more than $150 billion and are entertainment and theme park companies. A month later, Representative Greg Steube (R-FL) introduced an identical companion bill, H.R. 8250, in the House. Unsurprisingly, neither bill engendered much support, even from the usual copyright cynics. Other than some initial publicity that had more to do with the political justifications for the bill versus any legal rationale, neither bill got much attention and neither bill is expected to move forward this year.

Right-to-Repair Legislation

Lastly, it is worth mentioning a host of right-to-repair bills that were introduced in the Senate and the House in 2022. Although these bills are generally intended to require manufacturers of certain types of equipment, like tractors and cell phones, to permit users or authorized repair shops to repair certain types of equipment, some of the proposals are very broad and would have damaging implications for copyright and the creative community. For example, in February, Senator Jon Tester (D-MT) introduced the Agriculture Right to Repair Act, S. 3549, which obligates manufacturers of agricultural equipment to provide repair documentation, parts, software, and tools on fair and reasonable terms to owners or independent repair providers of agricultural equipment.

In theory, a bill of this type should not implicate copyright concerns, but the bill goes way too far by overriding section 1201(a) of the copyright law, which is very problematic. Similarly, Representatives Mondaire Jones (D-NY) and Victoria Spartz (R-IN) introduced the Freedom to Repair Act, H.R. 6566, which would also override Section 1201 of the Copyright Act by permitting the “diagnosis, maintenance, or repair of a digital electronic equipment, to circumvent a technological measure that effectively controls access to a [copyrighted] work,” except in the cases of medical devices. Right-to-repair legislation is likely to introduced during this session of Congress as well. Time will tell whether new legislation is more narrowly tailored so the copyright interests are not implicated by such legislation.

State Legislative Activities

Usually, our summary of the year in copyright legislation begins and ends with legislation pending in Congress. But 2022 was different. When certain groups couldn’t get their anti-copyright legislation enacted by Congress, they decided to do an end-run around Congress and instead asked state legislators to push their copyright-related agenda. This occurred primarily in two areas: right-to-repair legislation and eBook legislation.

In the case of right-to-repair legislation, these groups’ efforts were somewhat successful in New York where the New York Assembly passed the Digital Fair Repair Act (DFRA). The DFRA requires all manufacturers who sell “digital electronic products” within state borders to make any tools, parts, and documentation for repair available to both consumers and independent shops. Notably, there is a provision that explicitly carves out copyright from the bill (section 3(F) of the Act notes that it does not require manufacturers to make such items available for digital electronic products “in a manner that is inconsistent with or in violation of any federal law…”). on December 28, Governor Hochul signed the DFRA into law. Reports indicate that the bill “won’t require OEMs to provide ‘passwords, security codes or materials’ to bypass security features, which is sometimes necessary to do to save a locked, but otherwise functionally fine device” and may not “apply to anything made before the bill’s effective date,” which is July 1, 2023.

The other state legislation with copyright implications relates to eBooks. These eBook bills would compel publishers, independently published authors, and others to grant licenses to eBooks and other digital text documents to libraries in the state immediately after granting commercial licenses. Bills were introduced in Maryland (HB518), New York (A5837B), Connecticut (SB131), Rhode Island (SB2842) Massachusetts (H4120), Missouri (HB2210), Illinois (SB3167), and Tennessee (HB1996).

Maryland is the only state that passed its bill. However, before the bill could go into effect on January 1, 2022, the Association of American Publishers (AAP) filed suit against the State of Maryland and moved for a preliminary injunction. In June, the federal district court for the District of Maryland handed down a decision agreeing with AAP and holding that “the state of Maryland’s compulsory eBook licensing bill [was] unconstitutional and unenforceable because it conflicts with and is preempted by the Copyright Act.” In New York, after seeing the Maryland bill flame out, New York Governor Kathy Hochul vetoed the bill for similar reasons. In all the other states where eBook legislation was pending, the bill expired when the legislative session ended. And thus, this concludes our annual summary of the year in copyright legislation. As noted at the start of the blog, it was a fairly uneventful legislative year. But if one looks beyond the legislation that passed, it does likely give us some indication of what’s likely in store for 2023 and beyond.

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As the second in our year-in-review series, this blog highlights the most significant Copyright Office’s activities that took place in 2022. We encourage you to also check out the first blog in the series, on copyright cases, and to keep an eye out for the next blog on legislation to be published later this week. Before we address the substance, we want to take a moment to commend the Copyright Office leadership and staff, under the direction of Register Shira Perlmutter, for the incredible amount of work that they accomplished in 2022.

Copyright Claims Board

Keeping up the momentum from 2021, the Copyright Office issued a number of rulemakings to implement the processes and procedures for the Copyright Claims Board (CCB)—the new copyright small claims tribunal housed within the Copyright Office. Following more than a year of rulemakings and implementation, the CCB began operations on June 16, 2022. At the end of 2022, 281 total cases had been filed with the CCB. One hundred and six of the cases are “smaller claims.” At least 237 of the cases involve infringement claims, 44 involve Section 512(f) misrepresentation claims, and five involve non-infringement claims. The works at issue in these cases are as follows: Pictorial Graphic & Sculpture (141); Literary Works (42); Motion Picture and Audiovisual Works (47); Sound Recordings (24); Musical Works (17); Dramatic Works (3) and some cases include claims for multiple works. There are twelve active proceedings underway.

Policy Studies of 2022

The Copyright Office is responsible for providing expert advice on matters regarding copyright law and policy to Congress. As part of that role, the Office regularly conducts studies and issues reports to Congress based on their findings. In 2022, the Copyright Office concluded five of its ongoing studies, and began one new study on non-fungible tokens (NFTs) at the request of Congress.

Study on Ancillary Copyright Protections for Publishers

In 2021, the Office began conducting a study to examine “the current copyright protections available to [press] publishers, the desirability and scope of potential new protections, and the interaction between potential new protections and existing laws and international obligations” at the request of Senators Thom Tillis (R-NC), Patrick Leahy (D-VT), John Cornyn (R-TX), Mazie Hirono (D-HI), Amy Klobuchar (D-MN), and Chris Coons (D-DE).

After conducting a roundtable and reviewing comments received in late 2021 and early 2022, the Office published its report on June 30, 2022. In the report, the Office declines to recommend the adoption of new ancillary rights, stating that it “does not believe it has been established that any shortcomings in copyright law pose an obstacle to incentivizing journalism or that new copyright-like protections would solve the problems that press publishers face.”

Deferred Registration Examination Study

Following a request by Senator Tillis, in December 2021, the Office began a study to “examine the feasibility, benefits, drawbacks, costs, and mechanics of creating a deferred examination option, including any potential impacts to the registration system, the public records maintained by the Office, and the ability of the Library of Congress to maintain and grow its collections.”

On August 1, 2022 the U.S. Copyright Office sent a letter to Senator Tillis on its findings and conclusions from its study. The Office did not recommend a new deferred examination registration system, concluding that it would potentially lead to “costlier and less efficient system, while also creating new concerns, including with regard to the public record.” Instead, the Office noted that alternative solutions might address some concerns and that the Office is evaluating whether to implement those solutions which include offering dynamic fee structures for small-entity or individual filers, increasing the limits for group registration of photographs, and adopting subscription-based pricing for certain registration options.

Electronic Deposits and Best Edition Policy Study

In June 2022, the Copyright Office began studying the deposit requirements of section 407 and 408 of the Copyright Act and whether removing the best edition requirement from the registration deposit process in section 408 could help improve the registration process. The study began at the request of Senator Tillis. On December 2, 2022, the Office published its report, concluding that no statutory changes were needed at this time and that “any benefits from the adoption of different standards for Library and registration deposits would be outweighed by potential adverse impacts on the Office, the Library, and its collections.”

Technical Measures Consultations

In December 2021, the Copyright Office published a Federal Register notice “announcing a series of consultations on technical measures that identify or protect copyrighted works.” The consultations were held in response to a request from Senators Leahy and Tillis that the Office “convene a representative working group of relevant stakeholders to achieve the identification and implementation of technical measures” that will aid in the protection of copyrighted works. In February 2022, the Office held the plenary session, followed by six smaller group technical measures meetings throughout June 2022. The full recordings of the plenary session and the closing sessions are available on the Copyright Office’s website. In December, the Copyright Office sent a letter to Sens. Leahy and Tillis proposing two options: (1) The Office could continue to convene periodic public sessions for stakeholders in a discussion format similar to the ones that took place in 2022; (2) Alternatively, the Office could host periodic public events where technologists provide informational updates on new uses and experiences involving technical measures.

Standard Technical Measures and Section 512

In April 2022, the Copyright Office published a notice of inquiry soliciting comments to “gather information on the development and use of standard technical measures for the protection and identification of copyrighted works” under section 512(i) of the Copyright Act in order to “enhance the public record and advise Congress.” This study began at the request of Senator Tillis and built on the Office’s comprehensive study on the operation of section 512 completed in May 2020. In December 2022, the Office completed this study and sent a letter recommending that Congress “amend section 512(i) to: (1) clarify that the terms ‘broad consensus’ and ‘multi-industry’ require the support only of the industries directly affected by an STM; (2) state that technical measures qualify as STMs if they are recognized as such by a broad consensus of copyright owners and service providers, even if they were originally developed by a narrower subset of stakeholders or emerged from proprietary processes; and (3) set forth a list of factors used in weighing whether a particular measure imposes substantial costs and burdens.”

Non-Fungible Token Study

Interest in non-fungible tokens (NFTs) skyrocketed throughout 2021. As the popularity of NFTs rose, so did questions and concerns about the copyright implications of these transactions, prompting Sens. Leahy and Tillis to send a letter in June 2022 to USPTO Director Kathi Vidal and Register of Copyrights Shira Perlmutter, requesting that their agencies conduct a joint study on “how NFTs fit into the world of intellectual property rights.” In November 2022, the Office kicked this study off by publishing a Federal Register soliciting written comments and announcing public roundtables. Written comments are due by February 3, 2023 and roundtables on trademarks, patents, and copyright will be held on January 24, 26, and 31, respectively.

Rulemakings of 2022

The Copyright Office is also responsible for conducting rulemakings and establishing regulations to facilitate and administer copyright law. Most of the rulemakings conducted by the Office in 2022 related to implementation of the CCB. In addition to those rulemakings, the Office conducted rulemakings related to the Music Modernization Act (MMA) and Mechanical Licensing Collective (MLC), registration, and payment options.

The Music Modernization Act and Mechanical Licensing Collective

Since the MMA passed in 2018, the Copyright Office has continued implementing various regulations to support the changes to the law established by the MMA. In May 2022, the Office issued a supplemental interim rule governing certain reporting requirements of digital music providers pursuant to the MMA in response to operational and compliance challenges with existing regulations.

In October 2022, the Copyright Office published an NPRM regarding the applicability of the derivative works exception to termination rights under the Copyright Act to the new statutory mechanical blanket license established by the MMA. The Office’s proposed rule aims to clarify the appropriate payee under the blanket license to whom the MLC must distribute royalties in connection with a statutory termination. Written comments were due by December 27 and written reply comments were to be due by January 5, 2023. This rulemaking remains open at this time.

Deposit Requirements for Registering a Single Issue of a Serial Publication

In July 2022, the Office published a final rule (effective August 22, 2022) amending the deposit requirements for a registration of a single issue serial publication. The Office now allows “applicants whose serials are published in physical format, or in both electronic and physical formats, to submit a single deposit copy for registration. Publishers may submit the deposit copy in electronic format, which will expedite receipt and examination and result in an earlier effective date of registration.”

Remitter Payment Options and Deposit Account Requirements

In February 2022, the Office issued an NPRM regarding its regulations related to remitter payments for Office services and requirements for to deposit account requirements. After reviewing public comments, on September 30, 2022, the Copyright Office published its final rule. The final rule consolidates all regulations regarding payment options for Copyright Office services, eliminates the requirement for a minimum number of 12 transactions per year for deposit accounts, and opts to maintain the pre-existing rule that the Office will automatically notify deposit account holders when their accounts fall below a minimum balance of $450 rather than assessing a service change. The Copyright Alliance supported these positions in our comments and also raised additional proposals for the Office to consider. In response to proposals raised in our comments: (1) the Office will now accept PayPal and Amazon digital wallet options on Pay.gov “to better accommodate a broader range of stakeholders”; and (2) the Office conducted a further investigation and determined that Pay.gov permits automatic replenishment via ACH transactions and will explore the feasibility of implementing that feature to help avoid overdraft of deposit accounts. In light of a general desire from commenters that the Office increase communication regarding account status issues, the Office will automatically notify account holders if their accounts are made inactive due to inactivity or being overdrawn.

Other Activities of 2022

Commission on Artificial Intelligence

On December 12, the Copyright Office and the U.S. Patent and Trademark Office sent a letter to Senators Tillis and Coons in response to an October 27 request by the Senators that the agencies “jointly establish a national commission on AI.” In the response, the two agencies said they would continue to actively engage on Artificial Intelligence (AI) issues by continuing interagency engagements, holding public consultations, and training staff on registration practices surrounding AI-generated works.

The Copyright Office also indicated that it would issue a public notice of inquiry on questions involving copyright and AI sometime in 2023. To the specific question regarding the creation of a national commission on AI, the agencies express an interest in discussing the findings of their ongoing efforts related to AI and what a national commission might look like. They explain that “for the Copyright Office, which relies in part on Congressional appropriations, the costs of establishing a commission on AI would present a potentially significant expenditure that has not been planned for within the budget and would impact the ability to satisfy previously-approved uses of appropriated funds.” The letter discusses the National Commission on New Technological Uses (CONTU) created by law in 1974, adding that if an approach similar to CONTU is followed, “then legislation outlining the specific scope of work and containing appropriated funds” to hire staff and pay commission members would be necessary.

USCO Strategic Plan 2022-2026

In January 2022, the Copyright Office released its 2022–2026 Strategic Plan, titled Fostering Creativity and Enriching Culture, which outlines its 2022-2026 goals with a focus on “expanding the Office’s outreach, improving integration of data and technology, and continuing to provide expertise to the copyright community as a whole.” According to the Office, the strategic plan includes four broad stroke goals: “Copyright for All, Continuous Development, Impartial Expertise, and Enhanced Use of Data.” In a statement, Register of Copyrights Shira Perlmutter noted that, “The Office is adapting and responding to new demands, needs, and expectations…This strategic plan builds on our strong foundations, and charts a course for future initiatives.”

Women in the Copyright System

In June 2022, the Office published a report titled Women in the Copyright System: An Analysis of Women Authors in Copyright Registrations from 1978 to 2020. The report features data on women’s authorship rates within the U.S. copyright system, with a comparison to their participation in the copyright-based creative industries. According to the study, over 38% of all copyright registrations were granted to women authors in 2020, as compared to 28% in 1978. The study also notes that the share of copyright registrations that list women authors has risen across nearly every category.

Modernization

In February, the Office announced the first release of its digitized Copyright Historical Record Books Collection, which is comprised of digitized versions of historical record books. The collection will eventually include images of copyright related records, such as registration applications bound in books dating from 1870 to 1977. The first release features images from record books dating from 1969 to 1977. Register of Copyrights Shira Perlmutter stated that, “Today’s release of the first batch of our digitized historical record books will ensure that these records are preserved for future research and that anyone can access them from anywhere.”

In August 2022, the Copyright Office announced that the new recordation system is publicly available, allowing users to submit electronic documents related to transfer of copyright ownership or other documents pertaining to copyright under section 205 of the Copyright Act. The Office also began holding monthly webinars to keep the public updated on the Office’s optimized Recordation System. The upcoming webinars, which began in December 2022, “cover announcements about the module, important reminders, frequently asked questions, and a live question-and-answer session.” Webinars will be held at 1 p.m. ET during 2023, as follows: January 5, January 26, February 23, March 30, April 27, May 25, June 29, and July 27.

Conclusion

We would be remiss to write about the year in copyright at the Copyright Office without mentioning former Register of Copyrights Marybeth Peter’s passing in September 2022. The Copyright Office posted a heartfelt tribute that praised former Register Peters’ four decades of service to the Copyright Office in numerous roles and described her as “a global authority on copyright law and a well-known and well-loved presence in the world of copyright.” During her tenure at the Copyright Office, she was instrumental in countless important initiatives, including helping to implement the 1976 Copyright Act and the 1998 Digital Millennium Copyright Act, which serve as cornerstones of today’s copyright law. Former Register Peters indeed left a lasting impact copyright world and touched the lives of so many in the process.

Last year was an incredibly busy year for the Copyright Office, and we expect 2023 to be no different. Among other things, we will continue to monitor the Copyright Claims Board, and we look forward to the Office’s upcoming studies on artificial intelligence and NFTs and unveiling of the Office’s new registration system, at least in beta form, and other aspects of modernization. We also anticipate movement on the ongoing rulemaking regarding online publication, which the Office began in 2019.

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Coverage of copyright litigation in 2022 was understandably focused on the Supreme Court’s transformative fair use showdown in Warhol Foundation v. Goldsmith, but the past year saw many other significant copyright cases that could have a lasting impact on the law. In early 2022 the Supreme Court handed down a decision in a landmark case on copyright registrations, and lower courts grappled with thorny issues like the server test, unauthorized digital “lending,” and the First Amendment implications of the Digital Millennium Copyright Act (DMCA). Below are summaries of these and other cases from the past year, some of which will be decided or see important developments in 2023.

Unicolors v. H&M: SCOTUS Rules That Mistakes Will Not Invalidate a Copyright Registration

On February 24, the Supreme Court issued a landmark opinion holding that section 411(b) of the Copyright Act does not distinguish between a mistake of law and a mistake of fact in a copyright registration. In other words, a registrant’s honest mistake of either law or fact does not amount to “knowledge” and can be excused under section 411(b)(1)(A).

The case began in 2016 when Unicolors brought a copyright infringement suit against H&M for allegedly infringing 31 of its fabric designs. After Unicolors won the infringement action against H&M for unauthorized use of its designs, H&M challenged the validity of Unicolors’ copyright registration, claiming that it contained known inaccuracies related to when the group of designs were published. H&M argued that Unicolors had no standing to bring the case because a valid copyright registration is needed to bring a copyright infringement suit in federal court and Unicolors’ registration was invalid because of these known inaccuracies.

After considering the text of statute, case law, legislative history, and the plain meaning of the word “knowledge,” the Court found they all supported a holding that section 411(b) does not distinguish between a mistake of law and a mistake of fact and that a copyright registrant’s honest mistake of either does would not invalidate a registration. The 6-3 decision—written by Justice Breyer in his final term—is a significant and decisive victory for all creators and copyright owners, especially individual creators and small businesses who chose to register their copyrights on their own and sometimes must navigate complex legal questions. As Copyright Alliance CEO Keith Kupferschmid observed, “[t]he days of an infringer purposefully stealing someone’s copyrighted work only to be let off Scot-free by a court because of an administrative mistake made by the registrant are over.”

Lang Van v. VNG: Ninth Circuit Finds Foreign Pirate Website Subject to U.S. Jurisdiction 

On July 21, the Ninth Circuit Court issued an opinion in Lang Van v. VNG, holding that the operators of a website base in Vietnam are subject to personal jurisdiction in the United States. Lang Van, a California corporation that produces and distributes of Vietnamese music and entertainment, sued Vietnam-based music streaming website VNG in 2014 for copyright infringement, alleging that the service offered thousands of Lang Van’s copyrighted works without authorization. In 2019, a district court in California dismissed the claims, finding that Lang Van failed to show that the foreign company had enough contacts with the state for the court to exercise jurisdiction.

Reversing and remanding that dismissal, the Ninth Circuit’s opinion explains that because VNG “purposefully targeted American companies and their intellectual property” and “purposefully availed itself of the privilege of conducting business in the United States,” that jurisdiction in the U.S. is reasonable. The opinion adopts many of the points made in an amicus brief filed by the Copyright Alliance in support of Lang Van that, among other things, warns of the burdensome barriers the district court’s decision created for copyright owners who wish to enforce their copyrights against infringing foreign websites. 

Hachette v. Internet Archive: Publishers Seek to End Internet Archive’s Unauthorized Scanning and Distribution of Literary Works  

Back in 2020, the Association of American Publishers (AAP) filed suit against the Internet Archive (IA) on behalf of four of its book publisher members, asking the Southern District of New York to enjoin IA’s illegal mass scanning and distribution of literary works. Under a manufactured market theory of “controlled digital lending,” IA posits that it is lawful for a library to make digital copies of any print book it acquires and distribute that digital copy over the internet, without a license. However, the theory does not excuse the clearly infringing actions of IA, which do not qualify as fair use and are not comparable to the lending practices of legitimate libraries.

On July 7, 2022, the publishers filed a motion for summary judgment, which was supported by amicus briefs by professors, copyright scholars, non-profits representing creators, creator coalitions, and international rightsholders. As I noted in a blog summarizing the briefs, it’s not often that amicus briefs are filed at the summary judgment stage of a trial in district court, but the stakes are high in a case that could have a lasting impact on the ability of copyright owners to protect and control their works. As we and others explained in the amicus briefs, the Internet Archive’s practices are clearly infringing, do not qualify as fair use, and would devastate creators and creative industries if sanctioned by the court.

In early September, both the publishers and the Internet Archive filed briefs in response to one another’s motions for summary judgment. The publisher’s brief argues that: (1) appellate courts have solidly rejected first sale and fair use arguments for digitized works; (2) the Internet Archive had no way of knowing whether physical and digital copies of a book were in circulation at the same time; (3) the Internet Archive showed contempt for authors and the rule of law; and (4) the Internet Archive is directly competing with authorized eBook channels. Oral arguments and a decision on the motions are expected in 2023.

Association of American Publishers v. Frosh: Maryland Compulsory eBook Licensing Law Deemed Unconstitutional

Speaking of literary works, in 2022 a district court in Maryland granted a permanent injunction barring the enforcement of a compulsory eBook licensing law, holding that “the state of Maryland’s compulsory eBook licensing bill is unconstitutional and unenforceable because it conflicts with and is preempted by the Copyright Act.” The case was brought against Maryland by the Association of American Publishers in late 2021 after the state passed a compulsory licensing bill on May 30, 2021. The Maryland bill—and others like it that were introduced but failed in other states—would have force publishers to license their eBooks to libraries on terms that are determined individually by each state—not by the publishers. The proposals are concerning not only to publishers but to the entire copyright and creative industry since federal copyright law explicitly provides copyright owners with the right to determine whether to license a work and under what terms.

On February 7, the federal District Court in Maryland held a hearing regarding AAP’s motion for a preliminary injunction, and just ten days later granted the motion. The court noted that AAP “clearly satisfied” all four factors of the preliminary injunction test and recognized that a “forced transaction” between publishers and libraries would effectively strip publishers of their exclusive right under the Copyright Act to decide whether, when, and to whom to distribute their copyrighted works. The court ruling also made clear that forcing publishers to offer licenses for electronic literary products on terms that would enable public libraries to provide users with access to the electronic literary product will not necessarily increase access to those products for library users over time, and that it is only through the protection of copyright law that books and other creative works may be generated and distributed at all.

AWF v. Goldsmith: Transformative Fair Use Takes Center Stage at the Supreme Court

On October 12, the Supreme Court heard oral arguments in the Andy Warhol Foundation v. Goldsmith, a case that could have a lasting impact on transformative use analyses and copyright owners’ derivative works right. At issue in the case is a series of 15 silkscreen prints and pencil illustrations that the late appropriation artist, Andy Warhol, based, without authorization, on a photographic portrait of Prince taken by photographer, Lynn Goldsmith, in 1981. After the Second Circuit reversed a district court’s fair use finding, AWF filed a petition for cert, asking the Supreme Court to resolve the question of:

“[w]hether a work of art is ‘transformative’ when it conveys a different meaning or message from its source material, or whether a court is forbidden from considering the meaning of the accused work where it ‘recognizably deriv[es] from’ its source material.”

Despite AWF’s misrepresentation of what the Second Circuit actually said in its opinion, the Supreme Court accepted the petition and heard from dozens of amici—including the Copyright Alliance and several of our members—leading up to oral arguments. At oral arguments, the Justices struggled at times to better understand how “different meaning or message” fits into factor one of a fair use analysis—and what weight transformative use should be afforded overall. While the Justices pressed counsel for Goldsmith, AWF, and the U.S. Government on the merits of their briefs, unfortunately some of the most critical issues were glossed over in favor of hypotheticals that weren’t particularly illuminating.

Ultimately, the Justices seemed skeptical of AWF’s position that a mere difference in meaning or message constitutes a transformative use and appeared to understand that such a test would destroy copyright owners’ right to prepare derivate works. I summarized the oral arguments in more detail back in October, noting that a decision is expected in early 2023.

Green v. DOJ: EFF’s Constitutional Challenge to Section 1201 is Rejected

While the case has been working its way through the district court system for years, Green v. Department of Justice saw a significant development in late 2022 that will likely influence Section 1201 litigation for years to come. On December 6, the U.S. Court of Appeals for the District of Columbia rejected Appellants Matthew Green’s and Andrew Huang’s challenge of a district court’s denial of a preliminary injunction based on their claim that Section 1201 of the Digital Millennium Copyright Act (DMCA) violates the First Amendment.

The case was brought on behalf of the Appellants by the Electronic Frontier Foundation (EFF) back in 2016, claiming that Section 1201 is a facially and as-applied overbroad violation of the First Amendment. Finding that the DMCA’s antitrafficking provisions are content-neutral regulations that target conduct rather than speech, the court explained that the statute is subject to intermediate scrutiny—“a test it easily survives” due to the government’s substantial interest in protecting against infringement and “ensuring the broadest distribution of copyrighted materials.” 

While the court rejected the as-applied unconstitutionality of the 1201’s anticircumvention provisions, it found that because the lower court did not rule on the statute’s constitutionality as a whole, there was no final ruling for the Green to appeal. It’s likely that Green and the EFF will continue their facial challenge to this critical part of the DMCA in 2023.   

McGucken v. Pub Ocean Ltd. and Hunley v. Instagram: Courts Consider Embedding and the Server Test

2022 saw courts weigh in on the impact embedding a photo has on a copyright owner’s display right, at times struggling to come to clear conclusions over whether a website legally “displays” a copyrighted image if that website does not communicate the work to viewers from a copy of that image stored on its own servers. On March 21, the District Court for the Southern District of New York rejected a defendant’s argument that as a matter of law the embedding of an Instagram post does not infringe any of a copyright owner’s exclusive rights under the Copyright Act.

In McGucken v. Newsweek, a photographer brought an infringement action against Newsweek, alleging the outlet reproduced and displayed his photograph on its website without his consent. Invoking the “server test” espoused by the Ninth Circuit, Newsweek claimed that because the image remained on a third-party’s server and was not fixed in the memory of the infringer’s computer, the embedding did not qualify as a display.

Rejecting this argument, the court explained that the server test has not been widely adopted outside of the Ninth Circuit and that “other courts have persuasively argued that such a test may be ‘contrary to the text and legislative history of the Copyright Act.’” The court went on to question the rationality of the server test, explaining that “[t]he Ninth Circuit’s approach, under which no display is possible unless the alleged infringer has also stored a copy of the work on the infringer’s computer, would seem to make the display right merely a subset of the reproduction right.” The court also held that Instagram’s terms and conditions were too ambiguous for the court to determine whether those terms granted Newsweek an express or implied license to publicly display the photograph.

The McGucken decision adds to the growing conflict between the Ninth and Second Circuit over the server test. In June, a group of photographers filed an appeal to a Northern District of California District Court’s 2021 dismissal of secondary liability claims against Instagram for providing an embedding tool that enables third-party websites to display copyrighted photos or videos posted to an Instagram. Applying the Ninth Circuit’s server test, the district court found that the embedding tool doesn’t violate the photographers’ exclusive right to display the pictures publicly because third-party websites that embed the images do not store copies on their own servers.

After finding there was no underlying direct infringement, the district court rejected the photographers’ secondary liability claims that relied on recent decisions in other circuits that have rejected the server test, explaining that it “is not free to ignore Ninth Circuit precedent.” In their appeal, the photographers claim the test applied by the district court is “outmoded and impractical” and creates a loophole that results in “use and profiteering from the unauthorized and unlicensed display of copyrighted works.”

Valancourt v. Garland: Challenge to Copyright Office Deposit Requirements Continues

On October 13, the DC Circuit Court of Appeals heard oral arguments in Valancourt v. Garland, a case involving the U.S. Copyright Office’s deposit requirements. Back in 2018, Valancourt, a small, independent book publisher, filed a complaint against the Copyright Office, seeking to enjoin the federal government from demanding deposit copies of its publications. The complaint alleged that the mandatory deposit provisions of section 407 of the Copyright Act are an unconstitutional taking of property without just compensation in violation of the Fifth Amendment and an unconstitutional burden on free speech in violation of the First Amendment. 

In 2021, after cross motions for summary judgement were filed by the parties, the District Court for the District of Columbia issued a memorandum opinion, granting summary judgment in favor of the Copyright Office. Valancourt appealed to the DC Circuit, and at oral argument the government took the position that an e-mail to the Copyright Office saying the copyright owner was abandoning their copyright would free them of the deposit requirements of section 407. As Professor Zvi Rosen observed, the position “doesn’t seem terribly different from the sort of permissive deposit—where the Library of Congress asks rather than demands copies of creative works—which would amount to a victory for Valancourt.” A decision on the appeal is expected sometime in 2023.

Thaler v. Perlmutter: Registrant of AI-“Authored” Work Challenges Copyright Office’s Denial

On June 2, Stephen Thaler filed a complaint in the District Court for the District of Washington, DC against the U.S. Copyright Office, alleging that the Office’s denial of Thaler’s registration application for the AI-authored work, “A Recent Entrance to Paradise,” was an arbitrary and capricious agency action. Thaler argues that the work in question meets all requirements for copyright protection, that there is no supporting case law for the proposition that AI-authored works are not protected by copyright law, and that he is entitled to the property created by his AI under the principles of accession and first possession.

The complaint comes after the Copyright Office sent a letter in early 2022 to Dr. Ryan Abbott, one of Thaler’s attorneys, affirming its decision to deny registration to the work. That letter explained that the “Creativity Machine”—a computer algorithm that Thaler listed as the author of the work on the registration application—“lacks the human authorship necessary to support a copyright claim.”

Thaler’s attorneys have said that the attempted registration and appeal is part of a “legal test case” by the Artificial Inventor Project, which has also attempted to file a patent on behalf of an AI system. Whether AI-generated works should qualify for intellectual property protection is a policy question that is sure to garner attention in 2023 as Thaler’s case moves forward and the Copyright Office focuses on the intersection of AI and copyright.

Looking Ahead

While 2022 included some significant copyright decisions, many of the most noteworthy cases are ongoing and will continue to play out in 2023. We’ll be on the lookout for developments surrounding the viability of the server test and the manufactured “controlled digital lending” theory, as well as the constitutionality of section 1201 of the DMCA. Artificial Intelligence will be a hot button issue in 2023, and, of course, the Supreme Court will soon issue its decision in AWF v. Goldsmith that will hopefully reign in ever-expanding transformative use theories and reinforce copyright owners’ right to prepare derivative works.

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