[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
THE REGISTER'S CALL FOR UPDATES TO
U.S. COPYRIGHT LAW
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
COURTS, INTELLECTUAL PROPERTY,
AND THE INTERNET
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MARCH 20, 2013
__________
Serial No. 113-20
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
U.S. GOVERNMENT PRINTING OFFICE
80-067 WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, [email protected].
COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin JERROLD NADLER, New York
HOWARD COBLE, North Carolina ROBERT C. ``BOBBY'' SCOTT,
LAMAR SMITH, Texas Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
SPENCER BACHUS, Alabama ZOE LOFGREN, California
DARRELL E. ISSA, California SHEILA JACKSON LEE, Texas
J. RANDY FORBES, Virginia STEVE COHEN, Tennessee
STEVE KING, Iowa HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona Georgia
LOUIE GOHMERT, Texas PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio JUDY CHU, California
TED POE, Texas TED DEUTCH, Florida
JASON CHAFFETZ, Utah LUIS V. GUTIERREZ, Illinois
TOM MARINO, Pennsylvania KAREN BASS, California
TREY GOWDY, South Carolina CEDRIC RICHMOND, Louisiana
MARK AMODEI, Nevada SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho JOE GARCIA, Florida
BLAKE FARENTHOLD, Texas HAKEEM JEFFRIES, New York
GEORGE HOLDING, North Carolina
DOUG COLLINS, Georgia
RON DeSANTIS, Florida
KEITH ROTHFUS, Pennsylvania
Shelley Husband, Chief of Staff & General Counsel
Perry Apelbaum, Minority Staff Director & Chief Counsel
------
Subcommittee on Courts, Intellectual Property, and the Internet
HOWARD COBLE, North Carolina, Chairman
TOM MARINO, Pennsylvania, Vice-Chairman
F. JAMES SENSENBRENNER, Jr., MELVIN L. WATT, North Carolina
Wisconsin JOHN CONYERS, Jr., Michigan
LAMAR SMITH, Texas HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE CHABOT, Ohio Georgia
DARRELL E. ISSA, California JUDY CHU, California
TED POE, Texas TED DEUTCH, Florida
JASON CHAFFETZ, Utah KAREN BASS, California
MARK AMODEI, Nevada CEDRIC RICHMOND, Louisiana
BLAKE FARENTHOLD, Texas SUZAN DelBENE, Washington
GEORGE HOLDING, North Carolina HAKEEM JEFFRIES, New York
DOUG COLLINS, Georgia JERROLD NADLER, New York
RON DeSANTIS, Florida ZOE LOFGREN, California
KEITH ROTHFUS, Pennsylvania SHEILA JACKSON LEE, Texas
Joe Keeley, Chief Counsel
Stephanie Moore, Minority Counsel
C O N T E N T S
----------
MARCH 20, 2013
Page
OPENING STATEMENTS
The Honorable Howard Coble, a Representative in Congress from the
State of North Carolina, and Chairman, Subcommittee on Courts,
Intellectual Property, and the Internet........................ 1
The Honorable Melvin L. Watt, a Representative in Congress from
the State of North Carolina, and Ranking Member, Subcommittee
on Courts, Intellectual Property, and the Internet............. 2
WITNESS
The Honorable Maria A. Pallante, Register of Copyrights, United
States Copyright Office
Oral Testimony................................................. 4
Prepared Statement............................................. 6
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Bob Goodlatte, a
Representative in Congress from the State of Virginia, and
Chairman, Committee on the Judiciary........................... 44
APPENDIX
Material Submitted for the Hearing Record
Prepared Statement of the Honorable Howard Coble, a
Representative in Congress from the State of North Carolina,
and Chairman, Subcommittee on Courts, Intellectual Property,
and the Internet............................................... 65
Prepared Statement of the Honorable Melvin L. Watt, a
Representative in Congress from the State of North Carolina,
and Ranking Member, Subcommittee on Courts, Intellectual
Property, and the Internet..................................... 68
Response to Questions for the Record from the Honorable Maria A.
Pallante, Register of Copyrights, United States Copyright
Office......................................................... 74
THE REGISTER'S CALL FOR UPDATES TO
U.S. COPYRIGHT LAW
----------
WEDNESDAY, MARCH 20, 2013
House of Representatives
Subcommittee on Courts, Intellectual Property,
and the Internet
Committee on the Judiciary
Washington, DC.
The Subcommittee met, pursuant to call, at 3:30 p.m., in
room 2141, Rayburn House Office Building, the Honorable Howard
Coble (Chairman of the Subcommittee) presiding.
Present: Representatives Coble, Goodlatte, Marino, Smith,
Chabot, Poe, Chaffetz, Holding, Collins, DeSantis, Rothfus,
Watt, Conyers, Johnson, Chu, Deutch, Bass, DelBene, Jeffries,
Lofgren, and Jackson Lee.
Staff Present: (Majority) Joe Keeley, Chief Counsel; Olivia
Lee, Clerk; and (Minority) Stephanie Moore, Minority Counsel.
Mr. Coble. Good afternoon, ladies and gentlemen. The
Subcommittee on Courts, Intellectual Property, and the Internet
will come to order.
Without objection, the Chair is authorized to declare
recesses of the Committee at any time. We welcome all of our
witnesses today.
The bad news is we are going to have two different series
of votes imminently. One will start in about 15 or 20 minutes.
But I would like to get the opening statements out of the way
early if we could, and I will start with mine.
Today's oversight hearing on the United States Register of
Copyrights' call for updates to our copyright law will come to
order. Oftentimes friends back home tell me that intellectual
property induces sleep, when they read about it, they fall
asleep. It is only for rich people they say.
Well, both are wrong. The falling asleep might be right,
because sometimes the law does get a little heavy. But we are
here for a very important hearing today, and I appreciate you
all being here.
It is my pleasure to welcome Madam Register Pallante.
Throughout my career and my tenure in Congress on this
Subcommittee, the Copyright Office has served as a wellspring
of sound advice and counsel. Ironically, most of that advice
and counsel came from Ms. Pallante before she ascended to her
current position.
Approximately 2 weeks ago, Register Pallante participated
in the Horace S. Manges Lecture at the Columbia School of Law
in New York. Her remarks, which are posted on the Committee's
website, cover a wide range of issues challenging our copyright
laws, as she proposes what could be a blueprint for the next
generation of our next Copyright Act. Her prepared testimony
today also aptly notes that Congress must ultimately consider
what does and does not belong under a copyright owner's control
in this digital age.
Much of my career has been dedicated to developing our
intellectual property laws. Issues relating to the digital
platform have been the most difficult to resolve. And I welcome
the Register's thoughts on how we can best address today's
conflicts so that our copyright laws will benefit generations
to come.
I have no doubt that the digital revolution has taken hold,
and in order to continue to foster creativity and growth, our
intellectual property laws should facilitate an environment for
creativity and innovation. Register Pallante, what you suggest
will take some time, and there is no guarantee this
Subcommittee will agree to undertake such a big step. But if we
do, I assure you that you will be a key part of the effort.
One aspect of your testimony that I found most interesting
are your thoughts on the role of authors and their interests
with respect to the public's interests. I hope you have the
opportunity today to explain how these two interests can be
mutually inclusive in the digital age. I also hope you have an
opportunity to clarify to whom you are referring when you
mention authors and the public, and how other copyright
stakeholders fit into this puzzle. These clarifications are
critical if we truly intend to move this discussion forward.
Register Pallante, thank you again for your work to enhance
intellectual property rights in America. I appreciate your
effort to participate in today's hearing, and look forward to
your testimony, and reserve the balance of my time. And I am
now pleased to recognize the distinguished gentleman from North
Carolina, the Ranking Member of this Subcommittee, Mr. Mel
Watt.
Mr. Watt. Thank you, Mr. Chairman.
And thank you for convening this hearing.
I want to begin by thanking our witness, Maria Pallante,
for her service to date. She and her staff have been invaluable
resources to the Subcommittee and are to be commended for their
expertise, professionalism, and impartiality.
The world is changing. Remarkable developments in
technology and the Internet have enabled society to change at
an unprecedented pace. But these efficiencies have called into
question the effectiveness of our laws, both in protecting
cherished values and in promoting continued innovation.
As a Nation, we are reevaluating laws in a number of areas.
For example, we are reevaluating laws to ensure that top,
current, and former U.S. officials, including the Vice
President, First Lady, Secretary Clinton, and, most recently,
former President George W. Bush, do not have their private
information obtained and disseminated without authorization.
We are reevaluating laws to prevent foreign hackers from
infiltrating our news rooms, and to balance law enforcement
needs with the sanctity of stored communications, and to
determine whether computer fraud laws are unacceptably vague.
And we are reevaluating to shore up the security of our
critical infrastructure against cyber attacks.
Each of these reevaluations is compelled by innovations
which, when misused, can lead to unintended, even devastating
consequences. Copyright law and policy is no different. The
digital era has introduced some unique challenges for copyright
owners and users, and exacerbated some preexisting ones.
Even the rulemaking process, designed to balance the
intersecting interests of copyright law with technological
advances and public access, have come under attack. Most
recently, Chairman Goodlatte and Ranking Member Conyers
introduced the Unlocking Consumer Choice and Wireless
Competition Act, which I was pleased to co-sponsor. In the
aftermath, calls for an upheaval of copyright law began
appearing in the press and in the blogosphere. Although those
calls for widespread copyright reform coincided with the call
to action by the Register of Copyright, they should not be
driving us to action because I do not believe that policies
should be dictated by polls and petitions.
Although valuable and important to help create a climate
for political action, polls and petitions should not determine
the substance of the changes we make but should be considered
along with a multitude of other factors and voices and accorded
appropriate weight.
While I agree with Ms. Pallante's central premise that it
is time to deliberatively update our copyright regime to meet
the challenges of the 21st century, I also strongly believe
that there are some things that both Congress and the relevant
industries can and should do sooner to address some of the
imbalances that have developed in the digital environment.
First, I think we must redouble our effort to ensure,
whether through legislation, public education, or stakeholder
negotiations, that the core purpose of copyright, which is to
promote the public interest by ensuring creators have the
incentive to create, is reinforced by enabling all artists,
whether photographers, musicians, composers, performers,
lyricists, actors, or other segments of the creative community,
to be able to forge a livelihood from the new distribution
channels through which consumers increasingly enjoy their
creations. Copyright law should not stifle innovation, but it
must stimulate the creativity upon which innovation depends.
It is no accident that new modernized platforms and
technologies seek to exploit artistic work. At root, a Kindle
is useless without the literary works of authors. The iPod
would be worthless, and Pandora would not exist without the
musical works they deliver. And Netflix would not continue to
thrive without the catalogue of films in its reservoir. In
short, consumers crave content, and to continue providing
quality content, the creative community must enjoy the just
rewards contemplated by our Constitution.
Second, I think it is time, and the time is long overdue,
for Congress to recognize a performance right in sound
recordings. To do so requires no further study. To not do so
just prolongs this longstanding inequity and keeps us out of
pace with the international community.
Similarly, I think we have a sufficient body of evidence on
which to craft a legislative solution to the orphan works
problem. Addressing this problem will give users comfort that
they will not face infringement claims from unknown,
unidentified rights holders, despite diligent efforts to locate
them.
Mr. Chairman, there may be some other specific areas in
which Congress can or should take more immediate action because
either the record is sufficiently complete or the stakes are
too high to do nothing, or to delay needlessly. But I will stop
here so that we can hear our Register express her views and
recommendations on the content and process for the next great
Copyright Act.
And so, with that, Mr. Chairman, I yield back.
Mr. Coble. I thank the gentleman.
Without objection, other Members' opening statements will
be made a part of the record.
We have a very distinguished guest and witness today.
I will begin by swearing in our witness before introducing
her.
[Witness sworn.]
Mr. Coble. Let the record reflect that the witness answered
in the affirmative. And you may be seated. Most of you know our
witness today.
But for the benefit of the uninformed, I will bring you up
to speed. Maria Pallante has served as the Register of
Copyright since June 2011. Prior to her appointment as
Register, Ms. Pallante served in the Copyright Office in a
variety of roles for a total of 7 years. Ms. Pallante has also
worked in a leading position for the Guggenheim Museum in New
York City, the National Writers Union, and the Authors Guild.
Register Pallante is a 1990 graduate of the George
Washington University School of Law, and she earned her
bachelor's degree in history from the Misericordia University.
Madam Register, we are delighted to have you with us today.
And if you could limit your comments to on or about 5 minutes
in view of our hectic schedule that is forthcoming, we would be
appreciative. If you violate the 5-minute rule you won't be
keelhauled, but we will be patient with you. So we are glad to
have you with us.
TESTIMONY OF THE HONORABLE MARIA A. PALLANTE, REGISTER OF
COPYRIGHTS, UNITED STATES COPYRIGHT OFFICE
Ms. Pallante. Thank you so much, Mr. Coble, Ranking Member
Watt.
Welcome, to the Members of the Subcommittee.
And thank you so much for the invitation to appear before
you today. And on behalf of the staff of the Copyright Office,
thank you for focusing on copyright. We greatly appreciate it.
And although we do work with you on many discrete issues, and
have for 100 years, more than 100 years, it is a great
privilege today--to be here today--to think about the big
picture of copyright and how we might begin a conversation
about a forward-thinking framework for the next several
decades. At least that is what I would like to talk about.
As the Chairman mentioned, the U.S. Copyright Office
administers many important provisions of the law. We also have
a statutory role to advise Congress on domestic and
international copyright issues. We also have a statutory role
to work with and assist executive branch agencies in their
discrete statutory roles, whether that be trade or treaty
making, for example.
Congress has before enacted general revisions of the law,
with varying degrees of pain, and sometimes over many, many
years. The last time you did that was in 1976. The process
started in the 1950's. It took over 20 years. It is widely
regarded as the most balanced copyright act in the world, lots
of compromise, lots of consensus building. If it has a fault,
it is that because it took so long, it was nearly outdated by
the time it was implemented, meaning that you were legislating
behind the blade of technology, not doing anything too
dramatic, but certainly bringing the United States up to par
with the rest of the world. Even those who worked very closely
and were very invested in the process, like former Register of
Copyrights Barbara Ringer, when it was all over, said that is a
good 1950 law. So we may not even be dealing with the 1970's at
this point is really my point. We may be going back further in
time than we realize.
And then, of course, there was the DMCA, which implemented
two Internet treaties in the late 1990's. And that was more
comprehensive, but it was not the entire statute. And so we
have a mix of provisions that were designed to target Internet
activity, and we are now 15 years later in that process. And I
think it is fair to say that 15 years in terms of Internet time
is a long time.
So we have these two statutes, so to speak, before us
today. And my goal is to figure out how to work with all of
you, so many of whom have come to us and said this is a concern
for me, or this is a concern for me. And the way we see it from
the Copyright Office is that they all belong on the table at
the same time because so many of them are interrelated. And
ultimately, it is not a discussion about profits for one sector
or another, but as the Chairman noted, it is about the
constitutional purpose of copyright, how we can make sure we
prioritize authors, who, as James Madison said, their interests
coincide with the interests of the public, how do we get back
to that kind of equation. Also providing a blueprint for new
companies, especially in the online world, good faith companies
to know what they are allowed to do with content and what they
are not.
Finally, I would just say that the public is very confused.
Many of you have told me that your constituents have no idea
what to do with copyright, whether they are teachers, private
citizens in their homes, higher education institutions. And I
can tell you that we have a public office across the street
that takes phone calls all day every day, and it is very
difficult to advise people as to the state of the law when
essentially you are relegated to telling them, well, in the
Ninth Circuit here is the view, and in the Second Circuit, here
is the view. And the Supreme Court is looking at this issue
now, but maybe not opining on the whole picture.
So I think that there are a lot of people who like to say
that copyright is broken. What I would say is that good faith
people really want know what the rules of the road are. And so
my office is prepared to help you in any way we can. We always
have been in that role. We take great pride in it. And with
that, I am happy to answer any questions that you have.
[The prepared statement of Ms. Pallante follows:]
ATTACHMENT
__________
Mr. Coble. Madam Register, you will be rewarded. You beat
the illuminating red light. Thank you for that.
Folks, there is a vote on now. And we are going to depart
to vote. We will stand in recess upon our return.
[Recess.]
Mr. Coble. I will begin my questioning with the Register.
And we will try to limit our questions to 5 minutes as well
because of the schedule on the floor. There will be another
imminent vote I am told.
Thank you again, Madam Register, for your testimony. What
do you mean, Madam Register, when you say that copyright law
must serve the public interest? And how does one measure
whether it does so?
Ms. Pallante. I really appreciate that question, Mr. Coble.
Copyright is ultimately about the public interest. And as I
said in my opening remarks, James Madison said, the authors'
interests coincide with the interests of the public. In the
office where I work, where everybody loves copyright more than
anything else in the world, we sometimes get a little dismayed
because we see the interests of authors being set up as a
counterweight to the public interest and sometimes as an
obstacle to the dissemination of knowledge.
But the Constitution is very clear on this, that authors
are part of the public interest equation and a means to
creating, incentivizing, and disseminating knowledge. Trying to
evaluate the public interest is a big challenge for us, and I
am sure for you, because so many would like to speak for it.
And so we like to go back to basics in our office and try to
remember that although many of the media wars are about the
profits or special interests of one intermediary or another,
whether it is the tech sector or the content industry,
ultimately if the law does not serve authors, it is not working
and it also doesn't deserve the respect of the public.
Mr. Coble. I thank you for that.
You mentioned earlier that our copyright law is probably
the best in the world, and I am glad to hear you say that. Our
copyright law contains enforcement protections that are
balanced with important exceptions and limitations. How does
the American copyright system compare to others around the
world in striking a balance?
Ms. Pallante. Well, I think in terms of the balance to
date, it is a model. Many look to it. But like other countries,
our law is showing its age. And it won't surprise you to know
that many countries are therefore looking at revision, either
because they are becoming global citizens and entering
treaties, treaties that we are already members of, for example,
or because like us, they are trying to apply digital age fact
patterns to an aging statute. So I think, you know, if we are
to be true to our leadership role, as we have always been in
the copyright space, we should proceed in terms of what is good
for this country. And I think, you know, we have always done a
very good job, Congress has always done an exceptional job of
balancing what the global situation requires and what are the
unique American principles that need to be intertwined.
One very easy example of that is fair use. Fair use for us
is one of the safety valves for free expression. The Supreme
Court has confirmed that. Fair use is not a doctrine that you
will see elsewhere in the world.
Mr. Coble. I thank you for that.
I still have some time, but in the interest of time I want
to recognize the gentleman from North Carolina.
Mr. Watt. And Mr. Chairman, as has been my practice,
especially since we are having a series of votes, some of my
colleagues may not be able to come back after the votes, so I
am going to defer to Ms. Chu to ask questions first.
Mr. Coble. Very well. Without objection.
Ms. Chu. Thank you so much.
Well, first let me ask about how the Copyright Act affects
the music industry. I know that every time I hear music, I am
hearing a performance of two copyrighted works, the musical
composition written by songwriter and the sound recording made
by reporting artists. Without both copyrighted works,
composition and sound recording, the music just wouldn't exist.
So it seems to me when establishing royalty rates for the
performances of musical compositions by web casters, the
royalty rates paid for the performance of sound recordings
would be directly relevant. However, I understand that the
Copyright Act specifically prohibits the rate court that
establishes performance royalties for songwriters from
considering the rates paid to recording artists for the exact
same Web casting performance.
Ms. Pallante, what are your thoughts on having the rate
court consider all relevant evidence, including royalties Web
casters pay for sound recordings, when establishing royalty
rates for performances of musical compositions?
Ms. Pallante. That is a fantastic question, a very
difficult question. And my first answer would be it is exactly
the kind of question that compels me to think we need to put
all those issues on the table and figure out what we need to
make music work within the copyright framework. So, you know,
on the one hand, we do not have a full public performance rate
for sound recordings. We are quite alone in the world in that
regard. And from a copyright policy perspective, it is
indefensible. It is really indefensible.
When you look at Internet radio, where royalties are paid,
and the players that you want to encourage to come into that
space, equity becomes a driving force. But from where we sit,
we would like to figure out first what are the exclusive rights
that artists, authors, and labels should have. And then, from
there, figure out what part of that should be legislated, what
part should be administrative, and what the guideposts should
be to keep it flexible and nimble.
Ms. Chu. Well, thank you for that. And I would like to also
ask about the film industry, and the fact that it has found
creative ways to protect copyrights while expanding access in
this new digital age. These are the digital rights management
tools that incentivize businesses to develop new and innovative
models to distribute high-quality content across multiple
forms, such as UltraViolet, which allows ownerships to be
portable. So thanks to copyright protections, companies are
encouraged to invest in these new online platforms and allow
users to access content legitimately. And ultimately, they are
also able to protect creative rights.
So Ms. Pallante, what are your thoughts about digital
rights management tools and their role in fostering innovation
for distributing high quality content across many platforms?
Ms. Pallante. Uh-huh. Thank you for the question,
Congresswoman.
I think it is ultimately a balance, but there is no
question that DRM, as you reference, is critical to the
equation. It is a way of combining law and technology to
protect the content that others have invested in. And the high
level question is, who should have the right to reap the
benefit of the investment, those who created it and invested in
it, or others who have perhaps an interest in aggregating it
and distributing it? And ultimately, exclusive rights cannot be
absolute, but they have to be meaningful. And I think the job
that is so difficult in this copyright policy world right now
is trying to get that equation right. So how do you incentivize
the market to continue to offer innovative products like you
described? Because consumers want them and because we want
content industries to adapt and evolve. On the other hand, if
they are too slow, or if others can step into the space, what
part of the law should just stop that and what part should
strike a balance?
Ms. Chu. And finally, let me ask about enforcement. A 2011
study found that almost 25 percent of all Internet traffic had
copyright infringement, and yet only a small number of these
infringements have ever faced any consequences. With this
massive ecosystem of obvious infringement on the Internet, it
is obvious that we have to do a better job of enforcement. How
can we improve the current law to better provide enforcement
tools for copyright protection?
Ms. Pallante. Well, thank you for raising enforcement. I
don't think we can have a conversation about a 21st century
copyright law without talking about enforcement, although I
think there are some that would prefer that that be left off
the table. So again, exclusive rights just will not be
meaningful if there is no way to enforce them. So that could be
updating illegal streaming so that one can go after it with not
just a misdemeanor but criminal penalties, just like the law
says for reproduction and distribution. For smaller artists, it
may be a small claims process of some sort where if the harm is
worth $2,500, yes, Federal court is an option, but it is not
really an option at an economic level. It just doesn't really
make sense. But for that artist, it might be everything to them
to control that kind of use.
So enforcement is critical. I think it has to be on the
table going forward. It can be a mix of legislative and private
sector voluntary, regulatory packages. I think that is probably
the innovative thing to do to keep it flexible and nimble. But
I appreciate your raising it.
Ms. Chu. Thank you.
I yield back.
Mr. Coble. Thank the gentlelady.
The Chair recognizes the distinguished gentleman from
Pennsylvania for 5 minutes, Mr. Marino.
Mr. Marino. Thank you, Chairman.
Good afternoon. How are you?
Ms. Pallante. Hello.
Mr. Marino. You mentioned in your opening statement that
there were quite a few issues that are ripe to be reviewed. Can
you narrow that down to let's say the three most important ones
to you?
Ms. Pallante. You want me to pick my top three favorite?
Mr. Marino. Top three.
Ms. Pallante. I think the public performance right for
sound recordings is ripe. You have been deliberating on that
for more than a decade.
Mr. Marino. Yeah.
Ms. Pallante. We have done many, you know, pieces of
research for you on it.
I think orphan works is ripe. I think that the public is so
frustrated by the long copyright term, that it is not really
the term itself but what to do when the rights holder goes
missing. And again, we have studied that, and there have been
multiple hearings. And we are actually yet in the middle
another public inquiry at the request of Congress on that.
And I think, as I mentioned, illegal streaming is ripe. I
think for me it is a parity issue. And if you have that for the
reproduction right and the distribution right, but you don't
have it for the public performance right, and yet we know that
streaming is the way of the future for delivering content, it
just makes sense.
Mr. Marino. I had the opportunity recently to visit China,
and Russia before that, and I brought these issues up. I may
have set diplomatic ties back a decade or so, but I was rather
insistent about it. But both countries blew it off; both the
ministers and deputies just blew it off as it being
nonexistent. And we all know how much money that is costing us
in the U.S. and other countries doing business legitimately,
but how much money is being made in Russia and in China. And my
question then, what are other countries doing to bring up to
date that term, if I may use it, their copyright laws?
Ms. Pallante. Well, it depends on the country. And I would
say that we interact with foreign countries in the copyright
space in a number of different ways, at international meetings
like at the World Intellectual Property Organization, where
there is a rather slow process I would say rather slow where
many different countries at very many different economic levels
talk about IP. And that is where treaty making often happens.
Then there are bilateral trade agreements. And the U.S.,
through USTR and others in the Administration, do a very good
job of trying to make sure that those who are interested in
trading with us have sufficient levels of protection. But at a
very specific level, you will find that some countries are
behind us and some are ahead of us. So for example, there are
countries that are doing Web blocking as a last resort. And as
you well know, that was the discussion for quite a while in
this Congress. But it really depends on the situation.
Mr. Marino. I was a prosecutor, so I prosecuted these
cases, both at the State and the Federal level. But an
overwhelming number of these cases start outside the country.
And it has been very difficult on dealing with countries like
Russia and China. Any suggestions?
Ms. Pallante. Well, I think everybody knows here that I
testified three times on enforcement in 2011. And the approach
that I thought was a very innovative approach, and which I was
happy to support, was a follow-the-money approach. And I still
think that that is something that, you know, whether slowly,
deliberatively, differently, innovatively, you should continue
to look at. Because there is just a loophole there. But I think
what you are raising is the fact pattern that we are very well
aware of in the Copyright Office, which is if one leaves the
country but then directs a website of infringing content back
to our citizens, how does one get at them under U.S. law?
Mr. Marino. I will leave you with this thought. My daughter
and son and I, we download music all the time. We pay for it.
And I said to my daughter not too long ago, I found this real
neat website where we can download. And she says, Dad, you are
on Judiciary, you are on Intellectual Property, that is a bad
site, I would stay away from it if I were you. So I followed
her advice. And thank you, I yield back.
Ms. Pallante. Thank you.
Mr. Coble. Thank the gentleman.
The Chair recognizes the distinguished gentleman from
Michigan, Mr. Conyers, for 5 minutes.
Mr. Conyers. Thank you, Mr. Chairman.
I join us in welcoming our guest, the Register. And I would
like to talk about whether you feel that performance and sound
people should have a right provided in a comprehensive overhaul
of the Copyright Act. How can we get it passed?
Ms. Pallante. Thank you, sir. I do. The Copyright Office
has been on record on that issue for a very long time. And I
think now, because of the promise of Internet radio, the
disparity has become even greater.
Mr. Conyers. That is great. Do you agree that more should
be done in the area of privacy to protect the intellectual
property that is being frequently the object of illegal
activity, namely theft?
Ms. Pallante. I do. I regrettably am not an expert in
privacy law. But I can tell you we worry about it even in the
Copyright Office, because we are an office of public record,
and we put up people's applications, and sometimes that
includes private data. And we have to, like everybody else,
figure out what the right balance is.
Mr. Conyers. Now, in the area of copyright piracy, we, I
think, all know that the economy loses about $58 billion
annually, and maybe over 300,000 jobs. Are there some ideas you
would like to leave this Committee with in terms of how we deal
with this hugely important sector of our economy?
Ms. Pallante. Well, the easy answer is there is no easy
answer. So enforcement provisions are critical. You can't have
a 21st century copyright act that has 19th century, or 20th
century for that matter, enforcement provisions. But I think
there is also just a general cultural issue that we can play a
role in and you can play a role in fostering respect for
intellectual property. Piracy should not mean a teenager
downloading music--not in your home but in my home--it really
should be about trying to make sure the law can respond to the
great pirates out there who are, with abandon, reproducing,
distributing, and making otherwise making available copyrighted
works.
Mr. Conyers. Well, I thank you very much.
And I would like the gentleman from Pennsylvania to know
that we are happy to work with him in the performance rights
area.
And Mr. Chairman, I yield back the balance of my time.
Mr. Coble. I thank the gentleman.
The gentleman from Utah is recognized for--I stand
corrected. The gentleman from Virginia is recognized for 5
minutes, the Chairman of the full Committee.
Mr. Goodlatte. Well, thank you, Mr. Chairman. And thank you
for holding this hearing. And I would ask unanimous consent
that my opening statement be made a part of the record.
[The prepared statement of Mr. Goodlatte follows:]
Prepared Statement of the Honorable Bob Goodlatte, a Representative in
Congress from the State of Virginia, and Chairman, Committee on the
Judiciary
Statement of Judiciary Committee Chairman Bob Goodlatte
Subcommittee on Courts, Intellectual Property and the Internet Hearing
on ``The Register's Call for Updates to U.S. Copyright Law'' March 20,
2013 Statement Submitted for the Record
This afternoon, we hear from the Register of Copyrights about her
ideas for updating U.S. Copyright law.
Based upon Article One, Section Eight of the U.S. Constitution, our
nation's intellectual property laws strive to balance the rights of
creators to protect their works with promoting the progress of science
and the useful arts. Given the importance of intellectual property to
our nation's economy, it is critical that our copyright laws reflect
the modern economy. The software developer in Silicon Valley, the
songwriter in Nashville, and the documentary film maker in Los Angeles
all rely upon such laws as do those who use copyrighted works for
personal, scholarly, or educational use.
Few would doubt that keeping U.S. copyright law current is
complicated by rapidly changing technology. The last major revision to
the Copyright Act occurred in 1976 when the more advanced 8-track tape
was pushing aside the less advanced reel-to-reel tapes in the audio
marketplace. The mid-1970's were also the time that cutting edge VHS
and Betamax videotapes were introduced. Good luck finding any of those
videotapes today. Since the 1976 Act was in fact developed over a
number of years in the 1960's and 1970's, it was truly a copyright law
written for the analog era.
The world has obviously changed a great deal since 1976. Consumers
now routinely acquire intellectual property only in digital formats.
They purchase apps and music files on their phones, and watch streamed
videos on their laptops and tablets. The notion of acquiring content on
a physical item like a disk is rapidly becoming as outdated as an 8-
track tape.
Just over two weeks ago, the Register of Copyrights gave a lengthy
lecture at Columbia Law School entitled ``The Next Great Copyright
Act.'' In her lecture, she called upon Congress to consider making a
large number of changes to U.S. copyright law as part of a wholesale
revision of the 1976 Act.
I have been personally involved in several updates to copyright law
since 1976 and understand the importance of keeping our copyright laws
current.
Clearly, the Register's call to revise, rather than update, the
Copyright Act is one that is certain to hearten some and, quite
frankly, scare others. However, my views on the merits, or lack
thereof, of a major overhaul depend not upon the scale of the effort
required, but upon the merits of doing so. I welcome the Register's
thoughts into which she has clearly put a great deal of effort. I also
welcome the thoughts of other Members of this Committee, as well as the
thoughts of the copyright world--many of whom I do not expect to be shy
with their views.
Ultimately, however, the Committee will look to the words of the
Constitution to weigh any proposed changes to our nation's copyright
laws--``Congress shall have the power to promote the Progress of
Science and useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and
Discoveries.
__________
Mr. Goodlatte. And I would welcome, Ms. Pallante, and thank
her for her initiative here, which we heard about. And we are
enthusiastic about having you come here and share it with the
Committee. And I thank you for doing that.
You know, we have been through a lot of copyright debates
and attempts to do things here in this Committee in recent
years. And the tone of recent copyright debates has often been
one that pits one or more stakeholder groups against others, as
opposed to trying to find areas of compromise or consensus. Why
do you think that the tone of copyrights and debates in our
society has become so polarized and hostile? And how do recent
debates differ from the past, if you know?
Ms. Pallante. Right. I wasn't there for the 1976 revision.
But I was a younger lawyer during the DMCA. And so those are my
guideposts.
Mr. Goodlatte. Me, too.
Ms. Pallante. You know, we hate, in the Copyright Office,
that copyright has gotten a bad name. We suspect it is because
of money. And we suspect that--well, we know from the many
authors, who call us on a daily basis, whether they call the
lawyers or the help line, that they are feeling like they are
on the edge of a precipice. But yet the public, I think if you
were to poll them randomly, would think copyright is really
about a bunch of giant corporations with one perspective or
another.
So I think there is a lot of leadership opportunity in that
debate. And we would really like, and I think one of my goals,
if you were to consider a broad conversation about copyright,
would be to be able to get the respect of the public back into
the equation by having a law that actually is a little more
intuitive than it is now.
Mr. Goodlatte. Well, thank you. And that was really our
objective in inviting you here today. What do you see as your
role, the role of the Copyright Office, in any effort to update
the Copyright Act over the next few years?
Ms. Pallante. Well, Mr. Chairman, we would take our cue
from you and the Subcommittee here. But historically, the
office has had a very close and supportive role with Congress,
particularly with the Subcommittees that govern intellectual
property. And we are at your disposal, whether that is for
roundtables, advisory committees, red lines of the statute,
revisions, studies, whatever it is that you might need. But we
are poised and ready to help.
Mr. Goodlatte. And how about looking forward for the office
itself? In 2011, you published a list of priorities and special
projects for the office that were designed to ensure that our
copyright system is updated in the digital area. In your view,
what specific improvements or authorities does the office need
in order to make itself into a 21st century agency?
Ms. Pallante. Thank you so much for that question. I will
separate it into operations and policy, although my staff will
tell you that I am constantly saying you cannot separate those
two things. But on the operations side at a high level, we need
better technology. We have both a user community and a
copyright owner community frustrated by the interface that they
interact with when they come to our office. So whether they are
trying to register, say they are uploading a film, they don't
expect the system to crash as they are trying to deposit their
film. Our own staff is frustrated by the kind of inadequacies
of the technology. We don't have enough staff. But we, I think
more importantly, are looking at how to retrain and redirect
the staff we do have.
So I am, for example, trying to do a reorganization of the
entire place because I have found that the departments that I
oversee are dated themselves. They date back, frankly, to the
1970's and 1980's. So there is much that we can do coloring
within the lines. But I think, at some point, we just need more
support, and we need to know what Congress wants the office to
be.
On the policy side, the question I think, again, for
Congress is do you want us to help fill in the blanks where the
statute ends by having perhaps more rulemaking authority? And I
would add to that maybe a little more control over our budget
in terms of the fees that come in that we would like to turn
back into the system of technology, or resources generally, but
are often offset against our appropriations. In other words, we
are a business. And I don't think ever in the history of the
office, we have really operated like a business. And we would
like to do that. The staff I have now is very business-
oriented.
Mr. Goodlatte. Well, thank you.
Thank you, Mr. Chairman.
Mr. Coble. Thank you, Mr. Chairman.
The Chair recognizes the gentlelady from Washington, Ms.
DelBene, for 5 minutes.
Ms. DelBene. Thank you, Mr. Chair.
And thank you for being here and for spending the time with
us. I really appreciate it.
I am an old tech person, and so you talked about how our
law from 1976 wasn't even really about 1976 by the time we got
it implemented. And clearly, we could be at risk of doing that
all over again. And, you know, I am a new Member of Congress,
but you talked a lot about how we have had hearings and
hearings on many of these issues before. So how do we--or what
are your recommendations on how we--get ahead, or stay ahead so
that we aren't guilty of doing the same thing all over again
and implementing a law that is 10 years old and are starting
out behind?
Ms. Pallante. That is such a great question. Thank you. I
will say two things just right off the bat. One is I have no
interest in sticking around for 21 years to talk about the law
what we should have in 2013. So we, again, will take our cues
from you, but we think, you know, a few years of very solid
drafting and revision is probably what you are looking at if
you really want to do something broader. And then the other
thing that I would say is something that I just referenced
briefly, which is how much of the law--how much detail do you
want to be in the law? And how much do you want to put into
regs, into rulemakings, practices, reward voluntary behavior?
How much of it has to actually be in the code? And I would say
particularly for economic issues and technology issues.
Ms. DelBene. And so do you feel like you have more
flexibility to keep it up to date if the statute is more broad
is basically what you are saying?
Ms. Pallante. That is what I am saying.
Ms. DelBene. Okay. Then you also talked about your
technology being out-of-date and kind of struggling to keep up
with folks who are trying to get you information, et cetera.
Are you talking about something that would be a very
significant change in what you have right now or----
Ms. Pallante. I don't know. I think, you know, I have only
been the Register for 22 months. And I know that when the paper
system was updated to electronic, it was in 2007. There was an
enormous backlog that occurred right after that. There was a
lot of support from the Library to try to get the backlog down.
When I first became Register, I got nothing but backlog
questions. And I was saying, but that is not the right
question. The question is how is my technology, and how many
staff do I have. And I realized it had become kind of an
institutional question. But from where I sit, of course we
should not have a backlog. But if we are only registering a
small amount of things with a small staff and we are not doing
it that well, we have bigger issues to figure out.
Ms. DelBene. So how long is the backlog?
Ms. Pallante. We, thanks to the great dedication of the
registration staff, we don't really have a backlog. We have a
2- to 4-month wait for electronic applications, which is quite
reasonable. I talk to copyright stakeholders all over the
country all the time, and they tell me that that is a
reasonable amount of time to wait for a certificate. You know,
the obvious question is, do you want it overnight? Is that the
expectation in a world of technology? And I think you will find
that they are reasonable when dealing with government actors.
And of course, we would like to get it to be as good as
possible. But that is really not my primary concern right now.
It is not the thing that wakes me up at 3 in the morning,
because the backlog is relatively stable.
Ms. DelBene. So what does wake you up at 3 in the morning?
Ms. Pallante. The technology wakes me up, and just, you
know, this is a blessing and a curse. So many people want the
office to be so many things. You know, could you give me the
answer? Is this fair use or not? Can you help me with curricula
for my schools? Can you not just tell me what the courts are
saying but tell us, you know, whether we can do this or not?
Those kinds of things. And could you connect your database to
my database? And could you do more public-private partnerships?
And some of that is a security issue, because our offices are
on Capitol Hill, and there is only so much connecting to
private databases that I think we will be permitted to do. But
we haven't--we are just now exploring those things. We have had
hundreds of meetings in the last year and a half with
stakeholders. My staff would tell you that we had some rules
that we will talk to lawyers, but when we are talking about
technology, we really want to talk to technology people. So
not, you know, what are the legal rights that you are
administering, but how does your database work? How do you sort
the financial data? How do you present it?
We have databases that are online in the office, but they
are very siloed and very dated. They have been the same four
fields for 30 years. And copyright is now life-plus 70. So one
example might be should we have the database of death
certificates for authors? Who knows when copyright expires?
Where are they going to get that information? That is just a
small example.
Ms. DelBene. Thank you very much. I appreciate it.
Thank you, Mr. Chair.
Mr. Coble. I thank the lady.
The gentleman from Utah, Mr. Chaffetz, is recognized for 5
minutes.
Mr. Chaffetz. Thank the Chairman.
And thank you for being here and the good work that you do.
I appreciate it. There have been three different Web casting
rate setting proceedings under the so-called willing buyer-
willing seller standard, and yet there has never been a time
when any significant percentage of the Internet radio royalties
paid to SoundExchange have been paid pursuant to the rates
established by one of the proceedings. Congress has had to
repeatedly intervene, and three different laws have had to be
passed to allow fixes to the rates established by these
proceedings.
So my question is twofold. Why has the process for setting
Internet radio rates have been so ineffective? And would you
consider changes to the current CRB proceedings and rate
structure that could better incentivize growth in Web casting
and allow it to succeed?
Ms. Pallante. Thank you, sir.
I think what I would say at a high level is music licensing
is so complicated and so broken that if we can get that right,
I will be very optimistic about getting the entire statute
right. And of course, we are more than willing to look at that
very specific issue that you just raised. I think that is the
kind of issue that we should fold into the next great copyright
act. How do we get that right? Because if licensing isn't
working, then copyright is not working.
Mr. Chaffetz. The recent cell phone unlocking controversy
has revealed a deeper problem. Right now, it is impossible to
add permanent exceptions to section 1201 because doing so
violates obligations of the Korean Free Trade Agreement, among
others. And similar problems arise at the Berne Convention,
when people propose shortening length of copyright protection
or reintroducing some of the formalities. Does it make sense
for Congress' hands to be tied in such a way? And how can we
enact necessary reforms without waiting for multiple
renegotiations with disparate trading partners? What do we do
there?
Ms. Pallante. That is the circle of life question, right?
So we in the U.S. enact certain provisions. We then ask trading
partners to do the same. And then they say, okay, but don't
change your law, and we say, okay. Then we are all stuck.
Right? But I think, obviously, trade is important. Obviously,
we are a global citizen. We could just do whatever you want to
do. You could decide that copyright should be 25 years.
What will happen if you do that, though, is that our own
authors and corporations who invest in copyright, and for whom,
you know, the economy has rewarded us and them, would be
disadvantaged just by virtue of the operation of the treaties.
I know you know all this, but those are the kinds of issues.
But I think the Congress should lead on these issues and do
what it has done in the past. Because in the past it has often
said, we are a global citizen, and we are going to do what we
think is best, but we also have our own unique history. So, for
example, you didn't do away completely with formalities when we
entered the Berne Convention. You have residues of formalities
in the law. You have to register before you get into court to
see if it is in fact copyrightable. There are small things that
you can do to leave the American imprint I think. I don't know
how to help you with the bigger question.
Mr. Chaffetz. And Mr. Chairman, I guess part of what I
highlight in this question is the need to address these as we
do free trade agreements. I have one more question as I
conclude here. You had recently brought up the issue of digital
first-sale and seemed to express some concern about living in a
world where more and more we no longer actually own things in
the traditional sense of the word, but where we rather just
license things, thing after thing. Can you go a little deeper
on that? And what are some of the potentially negative
consequences of living in a world where we merely license
things as opposed to own things?
Ms. Pallante. Well, I think it needs more deliberation. But
thank you for raising it, because I think it is one of the
significant issues that will have to be resolved. I think, on
the one hand, the first-sale doctrine comes out of real
property. If you own something, you should be able to dispose
of it, that particular tangible property. But if, in fact, the
world of copyright isn't really about disposing of copies but
endless consumer licenses, the question is does Congress want
to do some version not really of first-sale doctrine, because
again you are not dealing with a tangible copy, but do you want
to mirror some policy point like that in the law?
In my lecture at Columbia, I gave an example where Congress
had migrated a concept and applied it in a completely new
context. So, in the old law, the very old law, the 1909 law,
there was a renewal of copyright necessary as a condition of
continued protection. And in the new law, the 1976 law, which
is not so new, you went to automatic protection. But authors
they, or at least ostensibly had had, a trigger for
renegotiating their bad contracts at that renewal juncture with
the people that they had, you know, licensed their song or
their book. And so what Congress said is, we like that, that is
a good policy point. We are going to create a termination
provision where authors can renegotiate at some point later in
the future. So it is just that kind of issue I think. Do you
want to create something in the digital world so that the world
of copyright is not just about licenses? And I don't actually
have a solid view on this. I am going to keep looking at it. I
think it is not really a digital first sale, it is something
like that.
Mr. Chaffetz. A big issue.
Thank you, Mr. Chairman. Yield back.
And I would note for the record, by the way, I was 9 years
old in 1976.
Mr. Coble. Quit bragging.
I thank the gentleman from Utah.
The distinguished gentleman from Florida, Mr. Deutch, is
recognized for 5 minutes.
Mr. Deutch. Thank you, Mr. Chairman.
Ms. Pallante, I am sure you agree, almost every aspect of
American society has benefited from our robust copyright
protection. We should all be proud that America entertains,
America educates, America informs the world, and in doing so,
five percent of the workforce is employed as the world's
largest exporter of creative works. It should be self-evident,
therefore, that we have got to ensure that our creators are
protected and fairly compensated. Now, I applaud you for your
recognition that while we have to continue to strengthen
protections for artists, innovators, and entrepreneurs, we are
truly living in a new world thanks to new technologies that
have moved the arcane subject of copyright law to a
breathtakingly large new group of engaged stakeholders on the
Internet social media platforms. When my teenage daughters are
talking to their classmates about copyright law, when the world
is tweeting about copyright law, something that many of my
colleagues on this Committee learned a great deal about, we
have truly crossed into a new era.
And I agree that we have to take a serious look at the
Copyright Act, we have to examine what is working and what is
not for creators and for all of the stakeholders, whether they
are victims of piracy or whether they are victims of antiquated
laws that made sense at a moment in time. This Subcommittee has
to ensure that our laws work in the digital age. But the
enormous obstacle that I think we face is how to open up that
dialogue to the new universe of people who care about copyright
law in a way that inspires them to actually care about
copyright. That is not necessarily obvious that that connection
exists.
The basic premise of our copyright law is that we are all
enriched when creators create, and that creators must be able
to earn a fair return on their ingenuity. But for a generation
growing up on the Internet, the perception too often is that
anything that comes on your computer is free, and copyright
simply means all the things that keep you from doing what you
think you should be able to do at any time, at no cost. So what
I would like you to speak to are some of the concrete steps
that this comprehensive review that you proposed can do to make
copyright relevant and inclusive in a way that doesn't water
down the reasons that we have it in the first place.
Ms. Pallante. Thank you for that question. So we think
about this all the time, 24-7, across the street in the
Copyright Office. And I said earlier, we all love copyright so
much; it is our chosen field of expertise. We see the beauty of
the law. We see the innovation of the law. And nobody is more
pained than us to see the disrespect for the law, especially
among young people. And nobody is more unhappy to live in the
home of a copyright lawyer than my children. So I know where
you are coming from. I would say that----
Mr. Deutch. Our kids should talk, I think.
Ms. Pallante. Yeah. I think even getting to the universe of
issues is going to require a strategy. So if you were to go
down this road of broadly looking at the new framework, I have
laid out quite a lot of issues in my Manges Lecture at
Columbia, but that is not the whole universe. There are more.
And you would have to prioritize them. I think you have to
figure out what the exclusive rights of authors are first. What
should they be in the 21st century? For example, obviously the
public performance right is becoming increasingly important
because works are now being streamed, not necessarily
reproduced and distributed. So we have to get that right.
At the same time, there are incidental copies. And we
should probably exempt certain incidental copies just because
not doing so is going to just ruin the perception and the
workability of copyright law. We have made recommendations
along those lines before. Not every reproduction is a
reproduction with a capital R is what I would say.
I think although we love the trade associations that visit
us on a daily basis, getting around them sometimes and getting
to other kinds of creators, other kinds of users, people who
are struggling in schools and higher ed and other places, would
really be instructional. So I would also probably recommend
that we, if we were to have roundtables, get out of Washington
a little bit. Go somewhere like Nashville, where people make a
living from writing songs at their kitchen table, or New
Orleans. Go to, you know, schools, that kind of thing.
Mr. Deutch. I think that is a fantastic idea. I just would
have one other quick question, if I may. Consumers today can
access copyrighted content and TV programming, films, music,
books, magazines, on a whole array of devices. Interactive TVs,
Blu-ray, Roku, Xboxes, Netflix, iTunes, Hulu, C.R.A.C.K., I
mean, we can go on and on and on. And clearly, and it is a
rhetorical question I think, this whole array of legitimate
services that exists, these platforms, could they have
flourished without strong U.S. copyright protection in place?
Ms. Pallante. Have they flourished?
Mr. Deutch. Would they exist at all?
Ms. Pallante. No. I see. Could they exist without the
copyright framework? No. Copyright is the lifeblood of those
kinds of companies. And they take the creative work that we all
love so much and that people spend a lifetime creating, in some
instances, and give it to us, and make it possible, and make it
lasting. And I think, you know, consumers, obviously, when they
are purchasing a copy of something may think they are
purchasing the entire work forever. But they are purchasing a
copy. And I think what you are seeing is the market is trying
to adjust and struggling to figure out price points. If people
think they are buying a copy forever, should we be selling the
Blu-ray for $2,500? Or should we continue to sell it for $30,
knowing that they are going to come back and think that they
bought it forever? Those are market questions.
Mr. Deutch. I appreciate the discussion. Thank you.
Thank you, Mr. Chairman.
Mr. Coble. The distinguished gentleman from North Carolina,
Mr. Holding, is recognized for 5 minutes.
Mr. Holding. Good afternoon.
Ms. Pallante. Hello.
Mr. Holding. Sticking with the trade issue for a minute,
writing in dissent in yesterday's Supreme Court case on the
first-sale doctrine and the importation right, Justices
Ginsburg, Scalia, and Kennedy expressed grave concerns that the
majority opinion in that case places our law squarely at odds
with the stance the United States has taken in international
trade negotiations. And they note that, quote, ``Our government
reached the conclusion that widespread adoption of the
international exhaustion framework would be inconsistent with
the long term economic interests of the United States.'' And
that has consistently been advocated against such a policy in
international trade negotiations. But they note that this is
exactly the framework adopted by the Supreme Court in
yesterday's opinion.
You know, is this a significant issue? Is this an issue of
significance that the Supreme Court Justices are suggesting? It
appears to be both a matter of substantive law as well as a
matter of U.S. credibility on the international trade
negotiation front. If you could run through that a bit and give
us your comments.
Ms. Pallante. Right. Well, and we could talk for days
probably about that issue.
Mr. Holding. Just 4 minutes.
Ms. Pallante. Just 4 minutes. I understand the reasoning of
the Supreme Court in reaching the decision that they did. They
were looking at competing provisions in an aging statute,
right, which is my theme. The statute is getting harder and
harder for courts to apply. But what they were looking at was,
does the first-sale doctrine limit the distribution right? And
they decided, yes, it does. That doesn't mean that the
importation right isn't important now or shouldn't be more
important in the future.
The question for Congress on this, just to keep it short,
as you suggested, is, again, what are the rights that authors
and creators need in the 21st century? Are geographical
considerations among them? Not just because they now and always
have actually under copyright segmented markets and controlled
their business strategies in that way--I am going to market X
at X price point in the U.S., and Y in the EU at a different
price point, and then Thailand altogether different strategy--
so do you want them to be able to continue to do that because
that has served the U.S. economy extraordinarily well, provided
incentives to the creators? But also as a copyright lawyer, I
would say it gets more basic than that.
It goes back to the divisibility of copyright. So
divisibility on one level can be I can carve up my pie of
copyright in terms of distribution right, reproduction right,
public performance right. I am going to write a book. It is
going to be made into a film. Then there is going to be a
Kindle adaptation.
I think----
Mr. Holding. And don't forget the video game.
Ms. Pallante. Don't forget the video game and then the
theme park like in Harry Potter World, my favorite park. I
think they also go a level deeper than that and unless you are
in copyright transactions, unless you are familiar with them,
that is not necessarily as evident, that it is not just the
reproduction right, but it is the reproduction right in
different parts of the world for different purposes, for
different durations sometimes.
Mr. Holding. Justice Kagan writing with Alito in
concurrence suggests that a way to give effect to the intent--
Congress' intent--in providing a meaningful importation right
without the unintended consequences raised in a briefing before
the Court would be overturning the 1998 Quality King case and
held the importation right to be properly limited by the first-
sale doctrine. What is your review on that proposed solution?
Ms. Pallante. Well, I think you can make the importation
right meaningful if you want to do so, which is another way of
saying if you believe that market segmentation is important in
copyright, whether because you believe in divisibility of
copyrights and that has worked well for us or you just believe
in the economy, they are intertwined, there is no reason that
you can't look at the importation right. Again, I think it goes
to what are the rights of authors in the 21st century.
Mr. Holding. Thank you.
Mr. Chairman, I yield back.
Mr. Coble. I thank the gentleman from North Carolina.
The distinguished gentleman from Georgia, Mr. Johnson, is
recognized for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman.
I want to focus on one issue, Ms. Pallante, that has caused
considerable distress to institutions of higher learning
located near my district in Georgia, and this is a problem that
has affected universities across the world--excuse me, across
the Nation. In a recent example of the uncertain copyright
challenges facing educators, staff members at Georgia State
University were named as defendants in a lawsuit brought by
Cambridge University Press and other publishers. And the key
issue in that case was whether the faculty's use of e-reserves
was fair. Are you familiar with that case, Cambridge Press v.
Patton.
Ms. Pallante. Yes, sir, I am.
Mr. Johnson. Can you comment on what role fair use and
licensing should play in higher education?
Ms. Pallante. Yes, and the short answer is they both have
to play a role, which I think is probably what you are getting
at in your question. So fair use is a critical part of U.S.
copyright law. It is what makes our law American. It is tied up
in freedom of expression. But it also has been applied to
certain kinds of uses and certain kinds of contexts, for
example, in education. However, higher ed has also been very
well served by the market. So you don't want publishers of all
kinds, serial publishers, textbook publishers, publishers of
novels, literary works, coming out of that market because, in
my opinion, it will affect the quality of the curricula
materials that are available.
So what I would want to see in an ecosystem like higher ed
is a robust mix of all of those things coming together. So you
want micro-licensing. You want it to be easy. You almost want
it to be invisible. For example, we talk a lot about collective
licensing in the copyright office. The reason that that is
attractive, whether it is voluntary or legislative--you can
have both kinds--is that it can be done almost at the top of
the institution, the students could pay a fee, bingo, their
academic materials are paid for through a license, it doesn't
have to be a lot.
At the same time, not everything should be licensed, and
that's I think where you are seeing tension in higher ed. I
would say, at a more basic level, higher ed people who have to
apply copyright are confused and rightly so.
Mr. Johnson. Well, that's something that we definitely need
to clear up. Professors across the country utilize e-reserves
to make limited copies of articles for students. Although
Georgia State faculty prevailed on most of the infringement
claims, the case is still troubling because--can you imagine
the difficulty of educators when quoting a text, or showing
images, or distributing handouts, surely these should be non-
infringing uses? Is there anything that you can give us some
guidance about on that issue?
Ms. Pallante. I can.
So, in 1976, Congress looked at an outright education
exemption and decided no, we are not going to do an outright
exemption for education. I think in part if you look at the
legislative history, because it is so complex, some stuff is
fair use, some stuff is not fair use. It depends on the work.
It depends on context. It depends if it is commercially
available. It depends if higher ed is the point of the market.
Lots of factors.
Later, after a report from the copyright office at
Congress' direction, Congress enacted a distance ed exemption
that was negotiated so much, so well negotiated that it is
almost useless. And it is part of the stress I think--of
dealing I think--with education in the digital world. So I am
not advocating for an exemption for higher ed, but I am quite
sympathetic to the fact that ordinary lay people who are not
copyright experts cannot navigate the copyright law. And so if
we can put together a forward-thinking--with appropriate
guidance from expert agencies like mine and room for
regulations and best practices, some of which is happening in
the private sector--then that would be great for those who want
to get on with teaching.
Mr. Johnson. Great. With respect to K through 12 education
the increasing costs of textbooks in the face of decreasing
budgets, are there ways that educators can use technology to
deliver text to students without infringing works or being
hauled into court?
Mr. Coble. Madam Register, the time has expired, be very
brief in your answer.
Ms. Pallante. Yes, there's a way to help teachers
understand the law and navigate the law. And I think the price
of textbooks is again a market issue. And I am not a market
expert, but I think the markets are evolving, maybe not fast
enough.
Mr. Johnson. Thank you.
Mr. Coble. I thank the gentlemen.
Thank you, Madam. I am going to recognize one more witness,
and we will go vote, and then we will return because some
witnesses have not yet been heard.
The gentleman from Florida, Mr. DeSantis, is recognized for
5 minutes.
Mr. DeSantis. Thank you, Mr. Chairman.
Thank you for coming, and I read your paper and your
testimony, and I really appreciate you making an issue that
this stuff needs to be more accessible and readable for the
average person.
When I was running, I made an issue of saying, I am going
to read every law before I vote on it; I am not going to pass
the bill to find out what is in it. Although people appreciated
that, but then I got up here and I started actually reading the
bills and, you know, it is not always all that helpful. I need
to do a lot more than that. So you have to read the bill, then
you have to read other statutes and this and this and whatever.
I think it really undermines the rule of law if this is not
in any way accessible to the average person, and this is
something that the Founding Fathers talked about. I mean James
Madison said in the Federalist Papers, that if the law is too
voluminous to be understood or voluminous to be read or too
incomprehensible to be understood, you are really poisoning the
blessings of liberty. So thank you for that. I think that that
applies across the board with the things that we are doing here
but certainly for this.
Just a couple quick questions. The good thing about
copyright is it is actually envisioned by the Constitution, it
is something that is in there. I think, as I read the Founding
Fathers, that they really believe that the public good
coincided with giving inventors and writers a property right in
what they were doing. I think that they thought that that was
just right anyway, but they also thought that that would
incentivize, you know, more of that and more inventiveness in
the future. So they viewed them as kind of going hand in hand.
Do you agree with that, or do you, because I notice in part of
your testimony, you had talked about how we have to kind of
define the public interest? And I wasn't sure if you were maybe
saying that in this day and age, that that kind of harmony
isn't quite the same as it was back then. I just wanted to give
you a chance to respond.
Ms. Pallante. Thank you. I absolutely think that the
constitutional clause is our guiding force on copyright law. I
think it served the Nation extraordinarily well for two
centuries. I think the problem we have today in terms of the
imbalance that we might feel in the copyright statute is that
we have gotten away from that equation that puts the authors as
the primary beneficiaries, followed by the public good. There
is a lot of ``we would like immediate access'' and ``we would
like broader fair use.'' We believe in all of those principles,
access and fair use, but it is not supposed to be at the
expense of the creators. The law is pretty clear on that, and
the Supreme Court has upheld that many times.
Mr. DeSantis. I noticed with kind of the streaming--stuff
that's illegally streamed on the Internet--that the White House
I guess has asked for clarification, because--does the statute
have a loophole to where it is either copies or, I guess, it is
envisioning like a physical document? So is that something in
the law that you think should be addressed?
Ms. Pallante. I think that's one of the first things that I
would advise if you wanted me to pick. That would be one of the
top things on the list, because what you are alluding to is
that there are criminal penalties--and this is in the criminal
context, not civil--egregious criminal infringement, piracy at
the worst purposeful levels, right? So law enforcement can go
after the reproduction or the distribution, and they can go
after that in a meaningful way because those are felonies, not
misdemeanors.
The public performance right, which is another enumerated
right, which is implicated by streaming, performing the work,
not necessarily downloading and distributing a copy, streaming,
whether it is a football game or music, is a misdemeanor.
Mr. DeSantis. In your testimony, you talked about updating
enforcement provisions I guess more generally than this
particular instance. Can you give me some other examples of
areas that you think may need updating?
Ms. Pallante. Sure. We are doing a study for actually this
Subcommittee on small claims mechanisms, just because of the
sheer expense of Federal court for some of the smaller actors
in the space. And it goes to your earlier theme of remembering
that authors are kind of the point, the primary--first
beneficiaries of copyright law, and so do they need some kind
of quick and dirty way to get quick results without--because
otherwise, they don't have any enforcement at all. So we are
looking at it. It is constitutionally very complex; it is
complex in general.
There are other issues that this Committee has looked at in
the past when it comes to offshore websites run by pirates, out
of our jurisdiction but directing infringing activity at our
people, what do we do with that? I think over time, you will
have to look at that; the whole world is looking at that issue.
Mr. DeSantis. Great. Time is about to expire, we will go
vote.
Thank you, Mr. Chairman and I yield back the balance of my
time.
Mr. Coble. I thank the gentleman, we will stand in recess,
and we will return imminently.
[Recess.]
Mr. Marino [presiding]. We're going to call the hearing to
order.
And I believe the next Congressman to ask questions is Mr.
Jeffries from New York.
Thank you.
Mr. Jeffries. Thank you, Mr. Chair.
I thank you and the Ranking Member.
And I thank you, Ms. Pallante, for your testimony and for
your service.
You referenced earlier the view that copyright law exists
or should exist to serve the public interest, which I think is
an assessment that all of us on this Committee share within the
Congress; certainly it is a Constitutional prerogative that we
have been charged with in that regard.
Is it fair to say that in the context of promoting the
public interest through the vehicle of copyright law, that one
of the greatest threats--or something that should be
evaluated--is the ability for the creative community to have
its work respected and protected?
Ms. Pallante. Yes, thank you so much for that question,
Congressman.
In other words, the other side of that eloquent statement
is that people do not have a right to have whatever they want
when they want it for free if it is the intellectual property
of someone else. There was a beautiful quote last year in the
New York Times by some book authors and journalists, who said
that the reality is that it takes sometimes a lifetime of
perfecting one's craft to create that great work that others
come to cherish and find meaning from. And so we have to have a
long view of culture, and that's one of the great things about
copyright law, is it has a long view of incentivizing authors,
letting them benefit from their works, letting others invest in
those, and so that ultimately, we're all better off.
Mr. Jeffries. Now, in the past, piracy, or Internet piracy,
or piracy as it relates to the work of the creative community,
has been centered on unauthorized, illegal, unlawful
reproduction and distribution; is that correct?
Ms. Pallante. Yes, that's correct.
Mr. Jeffries. Now, in recent times, that shifted as it
relates to Internet piracy to illegal streaming; is that
correct?
Ms. Pallante. Yes, that is correct.
Mr. Jeffries. In your view, did the current copyright laws
and the criminal penalties that are attendant to those laws,
are they sufficient to deal with the shift in piracy that has
taken place from reproduction and distribution to unlawful
streaming? And if they are not, what suggestions would you have
for this Subcommittee and for the Congress as to what we should
be thinking about moving forward to address that shift?
Ms. Pallante. Thank you so much for the question. So there
is a gap in the current law, there are many gaps all over the
law on different issues. But on enforcement, it is clear that
the public performance right has come into its own as a primary
way to disseminate copyrighted work. So whether you are
streaming the Super Bowl, whether you are streaming music or a
movie the point is, you don't always need to have a copy and
the consumer may not want a copy. Sometimes you may want to
download your favorite movie and watch it 30 times, but with
all due respect to the motion picture industry, sometimes you
just want to stream it once and watch it. And so, in that case,
if there is a legal streaming happening, especially in an
egregious willful, profit-driven kind of way how do you get at
that activity if the best you can do is go after them for a
misdemeanor?
Mr. Jeffries. Now, another vehicle to deal with sort of the
illegal highjacking of creative content is the notice and take-
down process. What is your take on how successful that process
is as of this moment and what are some of the things that we
should be thinking about moving forward to make sure that we
have the proper mechanisms in place moving forward to deal with
this issue?
Ms. Pallante. Well, that is a huge question. I would say
that if you go down the road of looking at the next great
copyright act and revising the statute in a more comprehensive
way, you should look at the DMCA, you should look at the
efficacy of the DMCA. And 15 years, that is a very long time in
Internet years. How is it working? What have the courts done
with it? Who is it affecting in what way? So there are many,
many players in the ecosystem on the Internet, and I think you
will hear gripes from both sides.
You will hear from copyright owners, particularly small
ones, that there's no way they can keep up with the
infringement happening on the Web by sending notice after
notice after notice, sometimes only to find that they pop up
again. They are supposed to be creating, how could they
possibly deal in that kind of environment? Did we have any
concept 15 years ago that there would be this many notices and
this kind of burden?
However, on the other side, the DMCA was meant to be
flexible and to provided rules of road so that the Internet
could flourish. And I think you will find that Internet actors
will say there are abuses in both directions. They don't know
how to deal with the notices that may not be correct.
Mr. Jeffries. Thank you for your testimony.
Thank you, Mr. Chair.
Mr. Coble [presiding]. The gentleman's time has expired.
The distinguished gentleman from Georgia, Mr. Collins,
recognized for 5 minutes.
Mr. Collins. Thank you, Mr. Chairman, I appreciate it.
It has been a long day this afternoon. Yesterday's decision
by the Supreme Court regarding first-sale doctrine raises some
concerns. And while the first-sale doctrine is important to
copyright law, especially for businesses that resell products,
such as Goodwill--majority. The majority's opinion to me raises
some questions and issues of concern that I believe have
implications beyond the scope of the first-sale doctrine. It is
my hope that we are going to move deliberately, as you have
said, to make this readable, something the average person can
understand.
I think there are two things that the average person away
from the Beltway does not understand: one, why it takes us so
long to do anything, and number two, why we can't read it once
we're done. And this is something that I'm focused on here, and
when you look at the breakdown of the Justices here, this is a
different ideological breakdown. And I think even the Court
sort of made light of itself when it said, having once written
tomato is a vegetable, are we bound to always call it a fruit--
not be able to call it a fruit after that?
This is where I'm getting; this is an important topic. It
is an important topic when we deal with what protections are
involved. I want to ask this first question, and then I have
got one on licensing in just a minute that I want to get your
comment on. The majority wrote in this, the Court decision
yesterday was regarding first sale, and the majority in--as
Justice Breyer seemed to be very focused on a list of problems
that would ensue if the Court adopted the nongeographic
interpretation offered by Wiley.
Do you believe that there is sufficient statutory
protection in current law such as exists in 602(a)(3)(C) that
provides ample protection against the supposed consequences
that came up by the Court, because if potential consequences
are posed are real or done, this would be very troubling. What
is your take on that?
Ms. Pallante. It goes to the question of how important do
you want the importation and exportation provisions to be in
the next great copyright act. So they have never been part of
the bundle of exclusive rights in section 106, which is the
primary list of rights of creators, and they have now been
interpreted in the way that they interact with the first-sale
doctrine, the case you just described. That doesn't mean that
Congress can't decide that segmentation of markets is
important.
It would probably also, if it went down that road, decide
that there should be some exceptions. There is an exception in
current law, for example, for libraries to import certain kinds
of works and for people to bring in their suitcase from their
vacation certain numbers of works. Those provisions are now
meaningless in the wake of Kirtsaeng decision, so do you want
to recalibrate that? Do you want market segmentation?
I could read you a very important quote. It will just take
a second. There is a long list of cases that we track where the
courts say very politely, you know, it would really be great if
Congress looked at this. Here is one from yesterday: Whether
copyright owners should, or should not, have more than ordinary
commercial power to divide international markets is a matter
for Congress to decide.
Mr. Collins. And I think that throws it back, there is also
something else in the majority opinion, and I think this is
something we look at, where they did spend time on the
Constitution promoting progress of science and arts--and useful
arts, and they talked about being able to disseminate these
creative works. To me--and that's a laudable end. The other
problem, though, is there seems to be an issue here, and was
sort of silent on, is that they seem to be more silent on
promoting the protection of the creative works that went into
those issues. So my question here, and it is a short one
because I do want to get to the licensing part, taking, if you
go from a purely geographical interpretation, does that present
problems in doing what we're talking about, especially when it
gets to the bundle of sticks, so to speak, of the property
rights and taking into the dissemination issue as well?
Ms. Pallante. Well, you have two competing equally
important issues. You have one, consumers have expectations,
and there are companies that have been built around that. So if
something has been sold in China, I have a way to deliver that
to you in the U.S. Why isn't that the way the market works?
Then you have copyright owners saying, but we have the right to
divide our copyrights; that is basic to copyright law. And we
do that in different kinds of ways.
Mr. Collins. And this goes back to a statement that was
made earlier in a line of questioning, in licensing, isn't
there also an underlying determination if there is ownership
somewhere?
Ms. Pallante. Yes.
Mr. Collins. We can't just have a licensed world. Licensing
in and of itself assumes ownership. Is that something, in this
next, quote, as you say, ``great copyright act,'' we've got to
deal with the fact there is an ownership issue, and then we
have licensing as well, and this is something I would hope all
sides could come together on and look at? I would like your
thoughts on that.
Ms. Pallante. I think you're right. I think that's how the
first-sale doctrine would apply in a world of licensing,
particularly online, is a complicated question, but ultimately,
Congress should make a decision about it. Do you want a world
of licensing only? Will the Kirtsaeng decision drive copyright
owners to do more licensing online and less physical copies?
Mr. Collins. Well, but I think the other issue here,
though, is driving toward licensing is fine. However, at a
certain point in time, you have a right, or a start, that is
there to begin with.
Thank you, ma'am, I yield back.
Mr. Coble. I thank the gentleman from Georgia.
The gentlelady from California, Ms. Bass, is recognized for
5 minutes.
Ms. Bass. Thank you very much, Mr. Chair.
And excuse me if these questions have come up before, it is
kind of a crazy day, as I know you know. But I wanted to ask
questions to really understand part of the debate. And I know
there is a lot of debate around First Amendment and whether
copyright helps or inhibits the First Amendment. And I wanted
to ask you if you could give me your opinions on that. Does it
promote expression and free speech? Does it inhibit it?
Ms. Pallante. My personal opinion is it absolutely does,
but you don't have to take that for an answer, the Supreme
Court has confirmed it more than once in Harper & Row v. The
Nation, Sandra Day O'Connor said, in fact, it is the engine of
creativity. And I think, more recently, the Supreme Court has
said that fair use is in fact a safety valve in the construct
of copyright, but they are both equally important.
Ms. Bass. Well, maybe you could explain in your opinion how
you think it does help.
Ms. Pallante. How do I think the----
Ms. Bass. The copyright helps.
Ms. Pallante. I'll take Sandra Day O'Connor's quote, but it
is the engine of free expression. It is an incentive for people
to create. We don't decide what people can and can't express.
But if they are going to do it in a meaningful way and make a
living from it, then copyright becomes the means by which they
can do that.
Ms. Bass. And I certainly understand the individual
interests that it protects, the individual artists create or
whatever, but I don't know how that helps, and maybe you can
elaborate on your own opinion about how that helps the public
interest.
Ms. Pallante. Well, I think the constitutional equation is
so elegant because it has a two-step process that authors are
incentivized to create because they get a copyright that they
can then license. And then we are richer as a Nation, maybe not
immediately but over time because of the great, rich, robust
mix of works that we get out of copyrights. So the reason that
copyright lawyers love copyrights so much is because they were
English majors or poets or film students or something at some
point in time that the content is just so important.
And there's a place for free content. There's a place for
content where people don't want to sell it, but they just want
credit. But there's also a place for content where people think
that their copyright should be meaningful.
Ms. Bass. Well, there is content, and then there is
technology, so part of the debate is over the technological
aspect of it, right?
Ms. Pallante. That's right.
Ms. Bass. And some people believe that copyright inhibits
innovation and all the different devices that have been
created. I would like to know your thoughts on that.
Ms. Pallante. I have never thought that copyright inhibits
innovation. I have always seen it and I have learned it in this
way, but I think it has been true in my 23 years as a copyright
lawyer, it is an innovative law. It, itself, has adapted to all
kinds of technology over time, from maps to iPads, so that the
format is not so important, it's the ability of the law to
continue to protect, and that's why we are, I think, having the
conversation today. How do I get that right for the next great
copyright act? That's the right equation, I agree.
Ms. Bass. Thank you.
I yield back.
Mr. Coble. I thank the lady.
The Chair recognizes the gentlelady from Texas, Ms. Sheila
Jackson Lee, for 5 minutes.
Ms. Jackson Lee. You may be seeing the rainbow at the end
of the tunnel here.
Let me thank the Chairman and the Ranking Member for this.
Mr. Watt. Actually, the Ranking Member is the rainbow
because I deferred to everybody.
Ms. Jackson Lee. Oh, you haven't done your questions? The
rainbow is yet to come.
Mr. Coble. Hopefully within 5 minutes.
Ms. Jackson Lee. The Chairman has spoken, but he is also
very gracious.
First, I'm glad that we are creating a record for something
that I believe is enormously important. And that is to protect
our greatest asset: creativity and the genius of the American
People. And I know that you have done this well. Thank you for
your service.
I'm going to try and have some rapid-fire questions, and I
thank you for bearing with me. On the sequester, can you give
any quick, quick answer as to whether or not, and in what, you
will be facing will impact your work?
Ms. Pallante. So we're worried about creating a backlog,
where we have now cleaned that out. But more importantly, I
think we are hitting the sequestration at a time when we are
actually under pressure to do more things, and those are the
not things that necessarily will be fundable from our fee
schedule. In other words, if you want us to fund everything
that we do, including databases for the public, and we have to
put that on the backs of songwriters and poets, copyright
registration is going to go from $30 to $50 to hundreds and
hundreds of dollars. And it is a voluntary system. So we're
trying to work in the mix----
Ms. Jackson Lee. So there will be an impact, and
particularly as it relates to backlog for those who least might
be able to.
Ms. Pallante. And the ability of the office to modernize.
Ms. Jackson Lee. Let me then now proceed with a series of
questions. You have recommended to move from a 50-plus to a--
50-plus from its current term life of 70 years that relates to
copyright as relates to authors. Can you just quickly comment
on that?
Ms. Pallante. Why would I do that? So it is life plus 70
now, and what I am suggesting is that the burden is always on
the user to find the copyright owner and get permission, but in
a life plus 70 scenario, which is becoming the global standard,
what ends up happening is that copyright owners go missing, and
the objectives of the copyright system get a little bit weaker,
or they are a little out of focus. In a life plus 70 scenario,
you're not talking about the creator anymore; you're talking
about an heir or a successor downstream. Because the Berne
Convention standard is life plus 50, and we are Berne-plus, as
many countries are, we have the ability to say, we're going to
give you that extra 20 years, but you have to assert your
interest at some point.
Ms. Jackson Lee. So you want to keep the vitality in the
privilege.
Ms. Pallante. I think that the burden could shift to the
user at the very end.
Ms. Jackson Lee. And my only concern----
Ms. Pallante. I'm sorry, to the owner.
Ms. Jackson Lee. And my only concern is I want to make sure
to protect--writers may not be the most prosperous--we always
view them as being prosperous, so make sure that person is
disconnected, is not biased----
Ms. Pallante. Right.
Ms. Jackson Lee [continuing]. In this process. But let me,
because I have a short period of time. I will think about your
answer and I understand the answer.
Can you tell me--you asked us to look at the big picture,
in the course of looking at that--and I tend to agree with
that. It is a big picture and big work. Where, in your
perspective, report, or thinking do you help the little guys,
who I think, again, are a vital part of our economy?
Ms. Pallante. Thank you so much for that question. They are
my entire impetus for my recommendation to this Subcommittee.
They have been lost in the conversation. We hear from them all
the time. We need them to make a living out of creativity. So
they should be the focus.
Ms. Jackson Lee. Okay. And may I build on that by saying
you mention orphan works? And where do you think Congress needs
to go on that issue?
Ms. Pallante. I think that needs a legislative solution.
And this Committee has been very active on that issue, and that
is one of the things I think is more ripe than others.
Ms. Jackson Lee. Would you give us a hook on specifically
what you think is one of the issues that we need to be looking
at in that overall issue?
Ms. Pallante. In orphan works?
Ms. Jackson Lee. Yes.
Ms. Pallante. Well, again, it doesn't serve the objectives
of the copyright system if a good-faith user has come forward
trying to do everything possible to use the work but cannot
find the copyright owner because they don't exist anymore, or
they just have disappeared, often because they are not the
actual creator, but they are an heir or a successor to a
company. So you need to alleviate some of the pressure that has
built up in the copyright system, the gridlock in the
marketplace, and provide a solution that will let people move
forward narrowly, while protecting, for example, the situation
where the creator suddenly does show up. And maybe they showed
up because somebody has now used their work; how do you make
sure they are paid?
Ms. Jackson Lee. Let me thank you for your work and your
responses, thank you.
Ms. Pallante. My pleasure.
Mr. Coble. I thank the gentlelady.
We save the best for last, the Ranking Member, the
gentleman from North Carolina, is recognized.
Mr. Watt. Thank you, thank you, and I thank all my
colleagues for all the wonderful questions that they have
already asked, and I'll try to wrap it up quickly because I
know you've been here for a long time, given all the breaks and
all of the Members who had to ask questions.
I was wondering whether there is anybody who is tracking
the money that is offshore as a result of the United States not
having a performance right. Do we know how much money is still
offshore that U.S. artists are not able to import?
Ms. Pallante. Actually, thank you so much, because we have
not talked about that enough. Our performers get hit twice.
They don't get the full public performance right here, and then
they don't get to collect the money that other countries
collect who do have a public performance rate that is more full
than ours, because they say, we don't have to distribute it,
because we don't have to recognize you because your country
doesn't have reciprocity on this issue. I don't know the dollar
amount. I'm sure that the industry tracks it.
Mr. Watt. You think the industry is tracking it, okay.
In your testimony, you mentioned certain preconditions,
such as registration, that limit remedies available to
aggrieved creators and how this potentially places an undue
burden on the individuals in most need who are least likely to
be aware of those preconditions, especially authors and
photographers. Can you just expand on how you would address
that?
Ms. Pallante. Well, I would like to have a conversation
about it with this Committee because it's a very nuanced issue.
Essentially what the law requires, in order to have statutory--
in order to be able to elect statutory damages, you must
register in a timely way. Those who don't know about the
provision do not do so; therefore, they are limited to actual
damages, which is another way of saying that the very people
who need statutory damages the most probably don't have access
to them. And is that equation meaningful? How do we fix--do we
recalibrate that?
Mr. Watt. So, I mean, are you advocating doing away with
the registration requirement? How can you address that?
Ms. Pallante. I didn't go that far, but it has been studied
before, and I think the other side of that issue is that by
requiring registration as a condition of statutory damages, you
essentially have put in place a filter limiting the number of
lawsuits that will come forward. What has happened over time is
that the corporations who know to register can use that
statutory damage provision as a club to get the kinds of
settlements that they want, but again, what do we do about the
authors who need help the most? If they need statutory damages,
why do we have a condition?
Mr. Watt. So that relates to another issue: individual
artists, authors, small folks really not that active in these
debates. What do you see as their main concerns? And is there
some way to bring those smaller people to the debate, or do we
have enough horses to make it too complicated already?
Ms. Pallante. Well, I think, in a way, what you're asking
me is do the associations who visit us here in Washington speak
for everybody? They speak for a lot of people, but I know, for
example, when I travel and I go to smaller cities, like
Nashville or New Orleans, I meet creators, the entire town is
based around spending your life creating. And they just see us
as a proxy for everything that's wrong with copyright, so could
you do this? Could you do that? Could you wave a magic wand?
But they just want to be able to make a living, and I think the
public interest part of that is we want them to do that. So if
people aren't making a living from their creativity, we're
going to suffer as a country. That's the beauty of copyright
law, that it allows that kind of culture.
Mr. Watt. That's probably a good statement to end this
hearing on, Mr. Chairman. I know I've got a little bit more
time, but I don't think anybody could say it more eloquently
than she just said it, so I'm going to yield back.
Mr. Coble. Thank you.
I want to express my thanks to two entities: number one,
the Register, for your very vital testimony, and number two, I
want to thank those in the audience, who spent most of the
afternoon with us.
Your presence indicates to us that you have more than a
casual interest in this very significant issue.
Without objection, all Members will have 5 legislative days
to submit additional written questions for the witnesses or
additional materials for the record.
This hearing stands adjourned.
[Whereupon, at 5:50 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Response to Questions for the Record from the Honorable Maria A.
Pallante, Register of Copyrights, United States Copyright Office