[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
THE SCOPE OF COPYRIGHT PROTECTION
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HEARING
BEFORE THE
SUBCOMMITTEE ON
COURTS, INTELLECTUAL PROPERTY,
AND THE INTERNET
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JANUARY 14, 2014
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Serial No. 113-81
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Printed for the use of the Committee on the Judiciary
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Available via the World Wide Web: http://judiciary.house.gov
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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 ZOE LOFGREN, California
SPENCER BACHUS, Alabama SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa Georgia
TRENT FRANKS, Arizona PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas JUDY CHU, California
JIM JORDAN, Ohio TED DEUTCH, Florida
TED POE, Texas LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah KAREN BASS, California
TOM MARINO, Pennsylvania CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho JOE GARCIA, Florida
BLAKE FARENTHOLD, Texas HAKEEM JEFFRIES, New York
GEORGE HOLDING, North Carolina [Vacant]
DOUG COLLINS, Georgia
RON DeSANTIS, Florida
JASON T. SMITH, Missouri
[Vacant]
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., JOHN CONYERS, Jr., Michigan
Wisconsin HENRY C. ``HANK'' JOHNSON, Jr.,
LAMAR SMITH, Texas Georgia
STEVE CHABOT, Ohio JUDY CHU, California
DARRELL E. ISSA, California TED DEUTCH, Florida
TED POE, Texas KAREN BASS, California
JASON CHAFFETZ, Utah 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
JASON T. SMITH, Missouri SHEILA JACKSON LEE, Texas
[Vacant] [Vacant]
Joe Keeley, Chief Counsel
Stephanie Moore, Minority Counsel
C O N T E N T S
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JANUARY 14, 2014
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 John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary, and Member, Subcommittee on Courts, Intellectual
Property, and the Internet..................................... 2
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Chairman, Committee on the Judiciary 3
WITNESSES
David Nimmer, Professor from Practice, UCLA School of Law, Of
Counsel, Irell & Manella, LLP, Los Angeles
Oral Testimony................................................. 6
Prepared Statement............................................. 8
Glynn S. Lunney, Jr., McGlinchey Stafford Professor of Law,
Tulane University Law School
Oral Testimony................................................. 34
Prepared Statement............................................. 36
Mark Schultz, Professor of Law, Southern Illinois University
School of Law
Oral Testimony................................................. 57
Prepared Statement............................................. 59
James Packard Love, Director, Knowledge Ecology International
Oral Testimony................................................. 66
Prepared Statement............................................. 68
Patricia Griffin, Vice President and General Counsel, American
National Standards Institute
Oral Testimony................................................. 79
Prepared Statement............................................. 80
Carl Malamud, President, Public.Resource.Org
Oral Testimony................................................. 84
Prepared Statement............................................. 86
APPENDIX
Material Submitted for the Hearing Record
Material submitted by the Honorable Darrell E. Issa, a
Representative in Congress from the State of California, and
Member, Subcommittee on Courts, Intellectual Property, and the
Internet....................................................... 148
Prepared Statement of the American Society of Mechanical
Engineers (ASME)............................................... 158
Letter from ASTM International................................... 164
Prepared Statement of Broadcast Music, Inc. (BMI)................ 165
Prepared Statement of the Computer & Communications Industry
Association (CCIA)............................................. 176
Prepared Statement of the Future of Music Coalition (FMC)........ 181
Prepared Statement of the Library Copyright Alliance (LCA)....... 190
Prepared Statement of Sherwin Siy, Vice President, Legal Affairs,
and John Bergmayer, Senior Staff Attorney, Public Knowledge.... 198
THE SCOPE OF COPYRIGHT PROTECTION
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TUESDAY, JANUARY 14, 2014
House of Representatives
Subcommittee on Courts, Intellectual Property,
and the Internet
Committee on the Judiciary
Washington, DC.
The Subcommittee met, pursuant to call, at 10:04 a.m., in
room 2141, Rayburn Office Building, the Honorable Howard Coble
(Chairman of the Subcommittee) presiding.
Present: Representatives Coble, Goodlatte, Conyers, Marino,
Smith of Texas, Chabot, Issa, Poe, Farenthold, Holding,
Collins, DeSantis, Johnson, Chu, Deutch, Bass, DelBene,
Jeffries, Nadler, Lofgren, and Jackson Lee.
Staff present: (Majority) Joe Keeley, Chief Counsel; Olivia
Lee, Clerk; (Minority) Stephanie Moore, Minority Counsel; and
Jason Everett, Counsel.
Mr. Coble. Good morning ladies and gentlemen.
The Subcommittee on Courts, Intellectual Property, and the
Internet will come to order.
Without objection the Chair is authorized to declare recess
of the Subcommittee at any time.
We welcome all our witnesses today.
We will now have our opening statements.
This morning the Subcommittee will continue its review of
our Nation's copyright laws by hearing testimony concerning
what is within the scope of copyright protection. Our witnesses
will present contrasting views on three important copyright
issues: the making available right, A; should broadcasters--
should broadcasts be protected with additional laws, B; and, C,
how laws, codes and standards be protected under the copyright
law.
I and others have worked to bolster our copyright laws and
protect local broadcasters whenever possible. And I have also
advocated that these efforts be generously laced with common
sense. Common sense, it seems, is an ingredient that is sorely
missing sometimes on Capitol Hill. And I guess all of us are
guilty of that. Maintaining these philosophies has become
complicated by evolving technology. And hopefully our witnesses
today will highlight the most important issues confronting our
copyright laws.
Piracy and online infringement are an enormous concern and
we have repeatedly heard testimony, over the past decade, about
the harms caused by file sharing. It was disturbing to hear
that judges were uncertain at that time of how to respond to
this crisis.
I am pleased to learn that one of our witnesses, Mr.
Nimmer, has updated his copyright treatise and made it
perfectly clear that making available copyrighted works for
others is infringement. That being said, I do not want to steal
the thunder from this morning's testimony. And I encourage all
Members, especially those who have not focused on these issues
in the past, to carefully consider today's testimony.
In closing, I thank our esteemed panel of witnesses for
participating in the hearing today. And I look forward to your
remarks.
I am now pleased to recognize the distinguished gentleman
from Michigan.
By the way, John, this is our first meeting since Mr. Watt
left us.
So, for the first time in years, there will not be a North
Carolinian on this side of the Judiciary aisle. But, I hope we
will survive.
Good to have you, John.
Mr. Conyers. Thank you and good morning to the Chairman and
the Members of the Committee and the very small number of
witnesses that we have before us this morning for a very
important subject.
The hearing today provides an important opportunity for us
to consider various provisions of copyright law and to examine
whether the laws continue to adequately protect creators and
promote innovation, in light of developing technologies that
were not contemplated when these provisions were originally
enacted.
And, to that end, there are several factors that we should
keep in mind. For example, the making available right, which
gives copyright owners the exclusive right to authorize the
manner and terms to make their content available to the public.
I favor strong copyright protection because it benefits
creators and promotes innovation and economic growth. Strong
copyright protection laws also help create a marketplace for
content that viewers will enjoy as well as the latest
technology that can be used to watch the content.
The making available right is especially important today
where one copy of a work over the Internet, without
authorization, could provide access to millions of users around
the world. The making available right helps prevent infringing
conduct.
For those reasons, we do not need to change copyright law
for the making available right. Existing law already includes a
making available right. I don't believe that there is any
ambiguity in the law and some Federal appellate courts have
recognized the making available right. In addition, the United
States is a party to various international agreements that
require signatories to implement the making available right.
Congress has repeatedly demonstrated, by ratifying these
agreements, that the United States law already includes this
right and no change is necessary.
In any case, as we study this issue, we should consider
guidance from the Copyright Office. And, to that end, our
former colleague and Ranking Member of this Subcommittee, Mel
Watt, sent a letter to that agency last month asking it to
study the current state of the making available right and to
make recommendations. In particular, we need to know how
American consumers fair under current law in the context of
digital, on-demand transmissions such as peer-to-peer networks,
streaming services, and music downloads. Additionally, we need
to know how the competitiveness of U.S. technologies can be
strengthened in the global marketplace, under international
treaties, to preserve robust protection for creators. In
conjunction with the testimony we receive today, this report
should provide us with valuable guidance.
Second, the evolution of technology has had a major impact
on the debate about copyright protection for broadcasts and has
generated many unresolved legal issues. Just last Friday, the
Supreme Court granted certiorari in a case where the Nation's
largest television broadcasters had brought suit against Aereo,
a streaming video service. This decision could have a wide
ranging impact on Internet streaming, cloud computing and the
television industry. Whatever the outcome of this case, I
believe the law must avoid any anti-consumer ramifications,
including higher fees and restricted access.
To be clear, moving forward in this copyright review, we
must ensure that creators are protected. Strong protection for
creators will ensure that consumers continue to enjoy the works
that define our culture and enrich our lives.
And, accordingly, I thank the Chair for his leadership on
these issues and look forward to further collaboration on them.
I thank you.
Mr. Coble. I thank the gentleman.
I now recognize the distinguished gentleman from Virginia,
the Chairman of the full Committee, Mr. Goodlatte, for an
opening statement.
Mr. Goodlatte. Well, thank you, Mr. Chairman. I appreciate
your holding this hearing.
And I want to welcome all of our witnesses and this
capacity crowd in the audience to a hearing on a topic that
goes to the heart of copyright law: What is the scope of
copyright protection? The Committee will hear testimony on
three related issues.
The first issue, concerning a making available right,
seemed to be settled by the U.S. accession to two separate WIPO
Treaties in 1988. However, uncertainty has arisen in several
file sharing cases and most recently in a library case, in the
Tenth Circuit, in which the opinion was released only 3 weeks
ago. I look forward to the thoughts of Professors Nimmer and
Lunney on prior jurisprudence and whether Congress should bring
greater clarity to this fundamental issue of copyright law.
The second issue concerns the scope of copyright protection
for broadcasts. Although the U.S. is not a party to the Rome
Convention, ongoing discussions in Geneva could result in
additional copyright or other protection for broadcasters in an
effort to deter signal theft. Broadcasting has changed
significantly since the Rome Convention was signed in 1961.
Smartphones with an always-on Internet connection now make
everyone in this room a broadcaster in ways that were
unimaginable 50 years ago. I look forward to hearing from
Professor Schultz and Mr. Love on this topic.
Finally, we will hear about an issue that has received less
public attention than the other two, but is one that does go to
the heart of how citizens interact with their government. It
was also the subject of the very first copyright case heard by
the Supreme Court in 1834. Copyright protection for laws, codes
and standards appears to clash with the fundamental ability of
our citizens to know what laws and regulations they must live
by. It is fortunate that the number of States seeking to claim
copyright protection on their laws and regulations, despite
longstanding Copyright Office and Administration views to the
contrary, has sharply declined. However, the issue of copyright
protection for codes and standards, incorporated with them, is
more nuanced. Recognizing that codes and standards are
developed at some expense by private-sector entities, I look
forward to hearing from a representative of the American
National Standards Institute and an individual who has made
greater access to government information, including the videos
of congressional hearings like these, his longstanding mission.
Before I conclude my opening remarks, let me turn to a few
other issues not being heard today. I am sure that there is no
one in this hearing room who isn't aware that the Supreme Court
announced, on Friday, that it will hear oral arguments later
this spring in the Aereo case regarding another issue related
to the scope of copyright, the public performance right. The
court also announced Friday that it will hear oral arguments in
two cases with implications for the patent troll issue,
something this Committee and the House has already addressed.
These three intellectual property cases are in addition to
earlier patent cases taken up only a few months ago by the
Justices. It is hard for me not to notice that once again this
Committee continues to lead the way on critical policy issues.
And I want to thank the witnesses again for their time here
today and for their flexibility in their schedules to enable
them to be here.
Thank you, Mr. Chairman.
Mr. Coble. Thank you, Chairman Goodlatte.
We have a very distinguished panel today and I will begin
by swearing our witnesses in, before introducing them.
[Witnesses sworn.]
Mr. Issa. Mr. Chairman?
Mr. Coble. Yes.
Mr. Issa. In order to have this in the record at the time
of the hearing, could I ask unanimous consent to put documents
in the record at this time, so they can be copied for the
Members?
Mr. Coble. Without objection.
Mr. Issa. Thank you. Do you want to hear them all or just
you will take all of them?
Mr. Coble. We will take all of them----
Mr. Issa. Thank you very much.
Mr. Coble [continuing]. Without objection.*
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*The information referred to is not re-printed in this hearing
record but is on file with the Subcommittee and can be accessed at:
https://law.resource.org/pub/us/code/ga/
https://law.resource.org/pub/us/code/id/
https://law.resource.org/pub/us/code/ms/
Mr. Issa. Thank you.
Mr. Coble. Thank you, witnesses.
I will introduce the witnesses.
Chairman Goodlatte mentioned standing-room only crowd. And
this shows me that you all have more than a casual interest in
this very significant issue. And we are pleased to have all of
you with us today.
Our first witness today is Mr. David Nimmer a professor at
the UCLA School of Law and an attorney in private practice to
the Law Firm of Irell & Manella. In addition to his numerous
books and articles on United States and international copyright
law, Mr. Nimmer has updated and revised Releases 19 through 92
for Nimmer on Copyright. He received his J.D. from the Yale
School of Law and his A.B. with distinction and honors from
Stanford University.
Our second witness is Mr. Glynn Lunney, Jr., a professor at
Tulane University School of Law, where he teaches courses in
intellectual property, unfair competition and contracts.
Professor Lunney earned his J.D. from the Stanford School of
Law and his B.S. from Texas A&M University. He also earned his
M.A. and Ph.D. in Economics from Tulane University, while
teaching at the law school.
Our third witness today is Mr. Mark Schultz, Professor of
Law at Southern Illinois University of Law and Senior Scholar
at the Center for the Protection of Intellectual Property at
George Mason University School of Law. Professor Schultz
received both his J.D. with honors and B.A. in International
Economics at George Washington University. Professor, is that
the Salukis? Is that the name?
Mr. Schultz. Yes, that is right.
Mr. Coble. That's the name most folks without any
connection with the university know the nickname with the dog?
Mr. Schultz. It is an Egyptian racing dog. Yes, sir.
Mr. Coble. Alright, thank you. Do I get--are you awarding
me special credit for knowing that? I will accept it.
It is good to have you with us, Mr. Schultz.
Our fourth witness is Mr. James Love, Director of Knowledge
Ecology International. Mr. Love earned a Masters in Public
Administration from Harvard University, the Kennedy School of
Government and a Masters in Public Affairs from Princeton
University, Woodrow Wilson School of Public and International
Affairs.
Our fifth witness today is Ms. Patricia Griffin, Vice
President and General Counsel of the American National
Standards Institute. Ms. Griffin joined ANSI in 2004, after 20
years of private practice. And she earned her J.D. from the
Albany Law School and her B.A. from Skidmore College.
Our sixth and final witness is Mr. Carl Malamud, President
of Public Resource Organization. Mr. Malamud founded the
nonprofit in order to work on the publication of public domain
information from the local, State and Federal Government
agencies. Mr. Malamud received his MBA degree from the Indiana
University, Kelley School of Business.
We welcome you all.
Our first witness will be Mr. Nimmer.
And it is good to have all of you with us. Gentlemen--lady
and gentlemen, if you could confine your statements to on or
about 5 minutes. There is a panel on your desks. When the green
light turns to amber, the clock begins ticking and you are
about to come up on 5 minutes, which will appear when the red
light illuminates. And we try to apply the 5-minute rule to
ourselves as well. So, during questioning, if you could be as
curt as possible that would be appreciated.
Mr. Nimmer, if you will kick the ball?
It is good to have all of you with us.
TESTIMONY OF DAVID NIMMER, PROFESSOR FROM PRACTICE, UCLA SCHOOL
OF LAW, OF COUNSEL, IRELL & MANELLA, LLP, LOS ANGELES
Mr. Nimmer. Thank you so much, Mr. Chairman. And thank you
to all the Members of the Committee for the invitation to
testify this morning.
We gather to consider the scope of the rights that belong
to copyright owners. One of those rights is public
distribution. The question today is how to prove violation of
that distribution right. Specifically, does the act of placing
a digital file containing a copyrighted work into a file
sharing folding on the Internet violate the law? Or, must the
copyright owner additionally prove that a third party
downloaded that particular file before the uploader can be held
responsible? In short, does copyright law's distribution right
include a making available component?
Let us imagine that a user uploads a full copy of the
motion picture Avatar to a share folder operated by a peer-to-
peer service. Anyone else on the P2P network can then watch
Avatar at no charge. I respectfully suggest that the better
course of congressional action is to reaffirm the existence of
a making available right so that the unauthorized upload itself
is considered infringing. The alternative is to force the
copyright owners to prove that third parties subsequently
downloaded that particular copy of Avatar. That alternative
unnecessarily clogs judicial procedures and threatens user
privacy.
As the eloquent introductions at the opening stated, it was
the intent of Congress, in 1976, to include a making available
right and the U.S. has joined two treaties that require this
country to recognize that right. Unfortunately, nonetheless,
there have been divided ruling on the subject from the district
courts. Although there is one recent ruling from the Tenth
Circuit recognizing the making available right, there is still,
as that court recognizes, a dissensus in the courts. For that
reason, I urge Congress to reaffirm the making available right
aspect of the copyright owners' distribution right.
A brief history helps to frame the issue. Reverting to the
mid-20th century, the Copyright Act in effect then gave owners
the exclusive right to publish or vend the copyrighted work.
Someone who made a work accessible to the public was therefore
an infringer with no further proof needed.
If we imagine a bookstore in 1950 featuring numerous copies
of a best-seller stacked on a table near the front door, the
case against the store owner was complete. In other words,
copyright law, at that time, imposed no obligation to place
undercover agents near the cash register to develop evidence
that third party customers actually walked out the door with
copies of the book in hand.
Translated to today's vernacular, copyright owners at that
point enjoyed the exclusive right to make available the
protected work. Of course they could have hired investigators
to stand in the corner and record every transaction, but that
exercise was always considered unnecessary. It should be
considered equally unnecessary today.
Rather than a private eye unobtrusively watching the cash
register to see who bought books, proof of downloading today is
far more invasive. It requires the issuance of subpoenas to
Internet service providers to identify, for example, all
subscribers behind the Internet protocol addresses who
downloaded Avatar on a given day. Such subpoenas are multiplied
10,000-fold. For that reason, we have seen case after case
confronting procedural challenges to these types of subpoenas.
The entire exercise can and should be avoided. As opposed to
extensive motion practice over subpoenas or digital dragnets
designed to ensnare the identity of everyone who uses a P2P
service, there is a much more straight-forward option: continue
copyright law on its traditional path by holding liable those
who make works available to the public without the copyright
owner's permission.
Ideally litigation procedures against uploaders should be
streamlined. The resulting case need not delve into intricate
questions of who downloaded the work on which day. Equally, it
should not result in a multimillion dollar judgment and massive
trial procedures. For that reason, I recommended that Congress
investigate two sensible adjuncts to its reaffirmation of the
making available right. The first is recalibration of statutory
damages to a sensible level that deters uploaders from their
infringing activities, but not through the possibility of
billion-dollar rewards as at present. The second is
establishment of a form of small claims court to consider
routine P2P cases and to award those appropriately reduced
damages after liability has been established in a fair and
expedited proceeding.
These reforms will not solve all the problems faced by the
copyright world, but they will set the law on a reasonable
course designed to protect the interests of copyright owners
and to safeguard user privacy interests on the Internet.
Thank you very much.
[The prepared statement of Mr. Nimmer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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Mr. Coble. Thank you, Professor Nimmer.
Mr. Lunney, I will--talked to Mr. Schultz about the
Salukis. I will admonish you because the Texas football team
was not a very genial Bowl host in their recent Duke
University/Texas A&M football. But, I will hold you harmless
for that. [Laughter.]
Mr. Coble. Good to have you with us, sir.
TESTIMONY OF GLYNN S. LUNNEY, JR., McGLINCHEY STAFFORD
PROFESSOR OF LAW, TULANE UNIVERSITY LAW SCHOOL
Mr. Lunney. Thank you, Committee Chair.
I am terribly sorry that the Aggies were not polite to your
team in the Bowl game. Maybe not that sorry. [Laughter.]
But, it was a good game. And, if you didn't stay to the
end, you missed something pretty exciting, didn't you?
So, I am here and I probably have the hardest task of the
witnesses up front, because the first point I would like to
make to the Committee is that file sharing may not be quite the
scourge that it has been made out to be. It is not the scourge
of American culture. It is not the scourge of American
business.
The second point I would like to make is, even if it were,
the making available right is not going to solve the problem.
And the third point is, if we add the making available
right using the linguistic framework we see in the WIPO
Treaties to our Act, we are going to reopen a lot of what seem
to be fairly settled issues on the Internet with respect to
linking, cloud computing, social networking, these things that
have been resolved under existing linguistic framework. If you
add a vague right that says making available to the public, we
will have to re-litigate them all over again. And I think that
is a problem.
Now, I know I am--I, sort of, don't have much chance to
persuade you that file sharing is not a bad thing. But, for me,
there is a fundamental difference between copying and stealing.
Stealing is basically wrong and we should prohibit it wherever
we find it as a general rule. Copying, on the other hand, is
generally a good thing.
It is not just the best thing since sliced bread, we
wouldn't have sliced bread without copying. We wouldn't have
culture. We wouldn't have civilization. I can speak to you
today and you can understand what I am saying, or at least I
hope you can, because you and I speak the same language. We
speak the same language because we are born with the intrinsic
ability to hear or see what another speaks or does and imitate
that. Copying is a fundamental attribute. It is what makes our
civilization possible.
And so, when I look at file sharing, I don't see a scourge
of culture. I see an invention that has put music in the hands
of more Americans than any invention since the phonograph. Now,
I am told that the problem is it puts them in the hands of
those Americans without them paying for it. And this is the
real problem. It is a problem for the economy. Jobs are lost.
It is a problem for the creation of music. People are not
getting paid, why would they remain in the business?
And so, when we think about those problems, for me at
least, the jobs argument is reflecting a very old fallacy that
economists have identified since 1850. That money is not lost.
It doesn't go out of the economy. The fact that consumers don't
have to pay it for music means it remains in their pocket and
they can invest it or spend it elsewhere in the economy and the
jobs are just created elsewhere in the economy. They are still
American jobs, so there is no loss in the jobs front.
Now, with respect to the creation of music, this is--goes
really to the heart of copyright. Its fundamental premise for
300 years is that more copyright equals more revenue equals
more works. And we have very few opportunities to test that
premise. But, file sharing gives us one of the few. Revenues to
the music industry, in particular, have fallen dramatically.
Now, whether all of that is due to file sharing or other
factors, it is a little difficult to say.
I am perfectly willing to accept that some part of it is
due to file sharing. But, my concern is what happened to music
output? And we turn to measures of music output by most of the
measures we could use, music output seems to be remarkably
healthy. And, if the goal of copyright is to produce more and
better works, the progress of science, then file sharing
doesn't seem to be interfering with that at all.
Now, maybe you don't accept my perspective on that
particular issue, that filing sharing is not quite the scourge
it is made out to be. So, let us move on to the second point,
which is that a making available right is not going to enable
us to solve the file sharing problem. It is not the proverbial
silver bullet.
The point here is basically this simple: whether you have
to prove a making available or your have to prove a
distribution, the way you are going to do it is to download the
work from the file sharing program. In the distribution context
you may have to download it to show that a distribution was
made. In the making available context you have to download the
work to prove that the link really is to the work it says it
is. Things on the Internet are not always what they say they
are. That may surprise Members of the Committee. So, you
actually have to download it to check and make sure it is the
actual work. So, as a practical matter, there is no real
difference here.
From 2003 to 2008 the music industry sent demand letters to
some 35,000 Americans for engaging in file sharing. And none of
those cases or instances, as far as I know, were dismissed
because they could not show a download. Rather the music
industry gave up that battle because, while they went after
35,000, estimates suggest there might be 35 million Americans
engaged in file sharing. So, it was never realistic to go after
all of them. And, second, these are your clients, your
customers. Suing them is probably not good for business. And
third, it wasn't working. So, I don't think a making available
right will change any of that in the file sharing context. As a
business decision for music industry, it is still not going to
make sense to go after these individual file sharers.
The final point I would make is that it is going to reopen
a lot of what seem to be settled issues. And I think that will
unfortunately really chill business innovation and investment
in new technologies.
Thank you.
[The prepared statement of Mr. Lunney follows:]
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__________
Mr. Coble. Thank you, Professor Lunney.
Professor Schultz?
TESTIMONY OF MARK SCHULTZ, PROFESSOR OF LAW, SOUTHERN ILLINOIS
UNIVERSITY SCHOOL OF LAW
Mr. Schultz. Chairman Goodlatte, Chairman Coble, Ranking
Member Conyers and Members of the Subcommittee I appreciate the
chance to speak with you.
Today's subject, the scope of copyright, is the right place
to start a detailed review of the Copyright Act. However, the
subject matter of copyright should be one of the least
controversial parts of copyright because it goes to the very
heart of its justification.
Today I will be speaking on my own behalf, as a copyright
lawyer and scout.
I will speak first about the scope and subject matter of
copyright in general, and then I will specifically address how
these principles apply to protection for broadcasts.
Copyright has traditionally had a broad scope, for good
reason. Copyright protects the productive intellectual labor of
authors provided that those labors result in an original
expressive work. It exists to provide those who create, invest
in and commercialize content the chance to enjoy the benefits
of what they create through exclusive rights. When creators can
benefit from their labors, the public also benefits. While many
speak of striking a balance between the rights of copyright
owners and the interests of the public, in truth those
interests are rarely out of balance, at least with respect to
core copyright principles such as the scope and subject matter
of copyright.
James Madison recognizes fact in the Federalist Papers when
he said of intellectual property that, ``The public good fully
coincides with the claims of individuals.'' The public will get
the works that educate, entertain and inspire and inform them
only if their creators can obtain just compensation. In the
end, creators, businesses and the public are all best served
when our intellectual property laws recognize the essential
core value that those who invest labor and risk capital to
create and distribute original content deserve protection of
their property rights.
Which brings me to the topic of legal protection for
broadcasts. In the copyright and telecommunications laws,
Congress created a legal framework that ensures that both
creators of television programs and local broadcasters have the
opportunity to be compensated for their labor, investment and
innovation.
This legal framework has two purposes. The first is to
prevent third parties from undermining the labor, investment
and incentives of creators and broadcasters by freeriding on
their labor and investment. The second purpose is to encourage
high quality, locally-focused broadcast television. The laws
have been a success.
We have a dynamic and vibrant broadcast industry in which
the rights of individuals and the public good are both
promoted. Here are just a few examples. There are nearly 1400
full-power commercial broadcast television stations in the
United States. Seventy 8 percent of Americans get their news
from local TV daily, including important emergency news. Nearly
60 million people still depend exclusively on over-the-air
signals, including 30 percent of households with annual incomes
under $30,000. Broadcasters air over 90 of the top 100 most
watched programs. Perhaps more than anything, the quality of
modern programming shows that the public is well served by the
current system.
Unfortunately, many underestimate the substantial
investment required to make it happen. The airwaves may be
viewed as public resource, but privately created broadcast
systems and the programs transmitted over them are not. Local
broadcasters maintain expensive transmission facilities and
invest in new technology, including billions in the recent
shift to high definition broadcasting. They pay network
affiliation fees and syndication fees. In an era of shrinking
news budgets, the average local news' operating budget is a
welcome exception of over $4 million a year on average.
In conclusion, there is no such thing as a free lunch.
Creators and broadcasters need protection of their property
rights that make this tremendous enterprise possible. In this
context, it is clear that the public good, as Madison said
about the intellectual property laws generally, fully coincides
with the claims of individuals.
Thank you.
[The prepared statement of Mr. Schultz follows:]
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__________
Mr. Coble. Thank you, Professor Schultz.
Mr. Love?
TESTIMONY OF JAMES PACKARD LOVE, DIRECTOR, KNOWLEDGE ECOLOGY
INTERNATIONAL
Mr. Love. Thank you, Mr. Chairman, for the opportunity to
testify.
I have been asked to talk about the rights of broadcasting
organizations, including proposals for a new UN treaty that
would establish a set of neighboring or related rights for
entities that distribute information they did not create and do
not own.
The UN agency responsible for the development of
intellectual property right policy is known as the World
Intellectual Property Organization, or WIPO for short. Located
in Geneva, WIPO has a Standing Committee on Copyright and
Related Rights known as the SCCR. Since 1998, the WIPO SCCR has
been trying to obtain consensus on a new global treaty dealing
with broadcast organizations. Several member states have called
for a diplomatic conference on this treaty in 2015. There are
major differences among countries regarding every important
aspect of this treaty, as evident from the current working
document, SCCR/24/10, and the new proposals tabled during
negotiations in December 2013.
The WIPO Treaty would create a new layer of rights that
coexist with copyright benefiting the organizations that
broadcast information. The broadcasters and several member
states of WIPO, such as Japan and the member states of the
European Union, are pressing for an agreement that would expand
considerably the set of related rights that exist in a 1961
treaty, the Rome Convention, that the United States has not
signed.
The 1961 Rome Convention created a system of related rights
for performers and producers of sound recordings to supplement
protections that authors have under the Berne Convention. In
1961 a decision was made to give broadcast organizations a
layer of rights as a reward for their role as an intermediary
between authors and audiences, essentially on a par with
actors, singers, musicians, and other performers. Many consider
the 1961 Rome Convention a mistake and the broadcaster right as
the weakest and least defensible type of intellectual property
right because it is provided by entities that play no role in
the creation of the content itself. The United States did not
sign the Rome Convention but does provide some broadcasting
entities with limited retransmission rights through the
communications regulation system, including through 47 U.S.C.
325.
In WIPO, several countries want to expand the Rome
Convention beneficiaries to include non-free subscriber
channels provided by cable and satellite, such as TNT, Hallmark
Channel, ESPN, the Discovery Channel, or the subscriber-based
radio channels provided by SiriusXM and also giving them rights
in content they distribute but did not create. A growing number
of countries want to expand the 1961 Rome system approach more
broadly to the Internet and expand the economic rights to the
more broadly defined group of broadcasting entities and provide
for 50 years of exclusive rights on fixations of broadcast.
At WIPO, USPTO has proposed a compromise that would
establish a new right for broadcast cable and satellite
services to, ``Authorize the simultaneous or near-simultaneous
retransmission of their broadcast or pre-broadcast signal over
any median.'' This includes the Internet but in the U.S.
proposal no post-fixation rights. So far, no country has voiced
support for the U.S. proposal. And much more aggressive
alternatives, from Japan and the European Union, are being
considered that would provide new economic rights to
broadcasting entities for distributing information they did not
create or own. This is akin to giving Amazon or Barnes & Noble
a layer of copyright in every book they write, or making Google
a part-owner in every webpage they locate on the Internet.
Free over-the-air broadcasters do face some unique
challenges regarding the retransmission of their signals. And
the USPTO proposal at WIPO may be appropriate to address some
of these channels. Here we have an open mind. But, for pay
services and webcasting, there is no need to create a new
intellectual property right dealing with retransmissions.
Copyright, theft of service laws and contracts are sufficient
to address piracy. For all broadcasting organizations there is
no economic justification for giving the distributor any rights
in the underlying content. It does not make sense and it
creates a number of grave risks for those who create works in a
republic to create rights for people that distribute
information that lay on top of the underlying interests that
you have in copyright.
Thank you very much.
[The prepared statement of Mr. Love follows:]
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__________
Mr. Coble. Thank you, Mr. Love.
Ms. Griffin?
TESTIMONY OF PATRICIA GRIFFIN, VICE PRESIDENT AND GENERAL
COUNSEL, AMERICAN NATIONAL STANDARDS INSTITUTE
Ms. Griffin. Thank you, Mr. Chairman. Good morning ladies
and gentlemen.
As noted, my name is Patricia Griffin and I am Vice
President and General Counsel of the American National
Standards Institute, ANSI, a not-for-profit organization that
coordinates the U.S. standardization system.
Most people don't know how much we depend upon standards to
ensure our everyday life work. For example, standards help
ensure that a light bulb fits in a socket, that you can use any
ATM machine in the world and that products on store shelves are
safe.
In the United States, our standardization system is led by
the private sector with hundreds of individual standards
developing organizations, or SDOs, working in different
technical areas and industry sectors. It is a consensus-based
and market-driven process that is open to participation by all
effected stakeholders. Importantly, the U.S. government is one
such stakeholder and Federal, State and local governments are
active partners in the development of standards and codes when
the activity is relevant to their needs. The government uses
these standards in a variety of ways, including to establish
internal procedures and develop regulations for public safety
and welfare. Our national standardization system and its
public-private partnership are reflected in the National
Technology Transfer and Advancement Act of 1995 and the
associated OMB Circular A-119.
The NTTAA directs agencies to consider the use of private
sector developed standards in lieu of government-unique
standards. When adopting a voluntary consensus standard into a
regulation, Federal agencies are permitted to incorporate the
standard by reference into the Federal register without
publication of the standard itself. For a standard to be
incorporated by reference or IBR-ed, the agency must determine
that the standard is reasonably available to the class of
persons effected by the anticipated regulation. In this case,
reasonably available has always meant that the standard is
accessible to any potential user. It does not require that the
standard be available without a fee.
Now recent concerns have been raised about whether the
reasonably available requirement should be changed in light of
expectations of free online access. For example, in early 2012,
NARA, the National Archives and Records Administration,
solicited comments on a petition arguing that IBR-ed materials
in the CFR should be for free. But, just 3 months ago, after a
comprehensive analysis, NARA concluded that reasonably
available continues to mean just that and it does not mean for
free. They relied, in large part, on another comprehensive
analysis of the issue conducted by ACUS, the Administrative
Conference of the United States, in December of 2011.
The question NARA was trying to answer was simple, why
shouldn't IBR-ed standards be free? It seems like a valid
point. But, the blanket statement that all IBR-ed standards
should be free misses some very important considerations.
First, every standard is a work of authorship and, under
U.S. and international law, is copyright protected, giving the
owner certain rights of control and remuneration that cannot be
taken away without just compensation.
Second, if SDOs can't charge for standards and code, this
disrupts the standards development ecosystem. The funding has
to come from somewhere. And increasing participation fees to
offset lost sales revenues would disenfranchise consumers and
small businesses. Those with the money would have all the
influence.
Lastly, if SDOs can't afford to stay in business, safety
standards would not be updated and standards for new
technologies would go unwritten. Thus, this would affect U.S.
competitiveness and innovation. The government would have to
step up, take over what is now a market-driven system, and
somehow find the money, time and expertise.
So, what is the answer? The public and private sectors
should continue to make standards and codes available on a
reasonable basis. For some this may mean providing read-only
but free access. And for others it may mean at reasonable
prices. Recognizing that there is not one solution to the
access issue, NARA found that it is for the Federal agencies to
continue to work with SDOs to provide reasonable access to the
IBR-ed standards.
NARA's recent assessment reaffirms the decades old guidance
contained in OMB A-119 that when copyrighted works are IBR-ed,
those works should not lose their copyright and that government
agencies must observe and protect the rights of the copyright
holder. And that is just what is being done. Many SDOs make
standards available for free or at a discount to consumers,
policymakers and small businesses. And some SDOs make certain
standards and codes available online on a read-only basis. Do
its part, ANSI has launched an online IBR portal for the
benefit of the user community, including consumers.
In closing, the standardization community believes, as OMB,
NARA and ACUS believe, that the development of complex, highly
specialized technical standards requires a massive investment
of time, labor, expertise, and money. Standards development in
this country is one of the earliest and most successful
examples of the public-private partnership, which has benefited
our Nation tremendously on many fronts: competitiveness, public
safety, successfully commercializing American innovations
globally and much more.
Thank you so very much for the opportunity to testify for
you today. And I would be happy to answer any questions.
[The prepared statement of Ms. Griffin follows:]
Prepared Statement of Patricia Griffin, Vice President and
General Counsel, American National Standards Institute
Thank you, Chairman Goodlatte and Chairman Coble. Good morning,
ladies and gentlemen.
My name is Patricia Griffin and I am vice president and general
counsel of the American National Standards Institute. ANSI is the
coordinator of the U.S. standardization system, and we thank you for
the opportunity to testify.
why standards matter
Most people don't think about how much we depend upon standards to
make our everyday life work. For example, standards help ensure that a
light bulb fits in a socket, that you can use any ATM in the world, and
that products on store shelves are safe.
Standards are the backbone of trade, the building blocks for
innovation, and the basis for quality, safety, and interoperability.
Voluntary consensus standards and compliance activities are essential
to the U.S. economy. Market-driven and highly diversified, standards
support technological innovation, build bridges to new markets, and
create gateways for businesses in this increasingly complex world of
global access. Standardization also helps to assure health, safety, and
quality of life for individuals in the United States and around the
world.
the u.s. standardization system
In the U.S., our standardization system is led by the private
sector, with hundreds of individual standards developing organizations,
or SDOs, working in different technical areas and industry sectors. It
is a consensus-based and market-driven process that is open to
participation by all affected stakeholders.
The U.S. government is one such stakeholder. And federal, state,
and local governments are active partners in the development of
standards and codes when the activity is relevant to their needs.
The open, market-driven, and private sector-led nature of our
system is critical to achieving the widely shared policy goals of
expanded U.S. leadership and innovation on the global stage.
Currently, the U.S. has the most robust standardization system in
the world, which gives the nation a competitive advantage. Unlike the
standards development systems of many other countries, the U.S. system
considers the views of all interested parties in a balanced way. And
the openness of the system to new participants means that their needs
can be met quickly and through innovative, collaborative solutions.
the public-private partnership
One of the great strengths of the U.S. approach to standards and
conformance is the ``public-private partnership''--a term that
stakeholders in government and industry use to describe the long-
standing, effective, and cooperative working relationship between the
public and private sectors.
The public-private partnership in the United States is strong
because it is a true partnership. Neither government nor industry
claims or exerts overall authority over the other, and by working
together in respectful cooperation, we are able to most effectively
respond to the strategic needs of the nation. This dynamic makes our
standardization system unique in the world.
Our national standardization system and its public-private
partnership are reflected in the National Technology Transfer and
Advancement Act of 1995 (NTTAA), and the associated OMB Circular A-119.
The NTTAA directs agencies to consider the use of private-sector-
developed standards in lieu of government-unique standards whenever
possible.
The government uses standards in a variety of ways, including to
establish internal procedures, aid in developing regulations for public
safety and welfare, and improve the efficiency of the procurement
process. When adopting a voluntary consensus standard into a
regulation, federal agencies are permitted to incorporate the standard
by reference--that is, without publication of the standard itself--in
the Federal Register.
incorporation by reference and the ``reasonably available'' dialogue
For a standard to be incorporated by reference or ``IBR-ed,'' the
agency must determine that the standard is ``reasonably available'' to
the class of persons affected by the anticipated regulation. In this
case, ``reasonably available'' simply means that the standard is
accessible to any potential user. It does not require that the standard
be available without a fee.
In the past few years, concerns have been raised about whether the
``reasonably available'' requirement should be changed in light of
expectations of free online access. For example, in early 2012,
Professor Peter Strauss of Columbia University petitioned NARA, the
National Archives and Records Administration, arguing that IBR-ed
materials in the CFR should be free.\1\
---------------------------------------------------------------------------
\1\ March 2012, Federal Register: https://www.federalregister.gov/
articles/2012/03/22/2012-6935/incorporation-by-reference.
---------------------------------------------------------------------------
After soliciting and then publishing comments on this petition in
October 2013 \2\, NARA's Office of the Federal Register, OFR, concluded
that ``reasonably available'' continues to mean just that, and it does
not mean ``for free.'' OFR relied in large part on a comprehensive
analysis of the issue conducted by ACUS, the Administrative Conference
of the United States, in December 2011.\3\
---------------------------------------------------------------------------
\2\ October 2013, Federal Register: https://
www.federalregister.gov/articles/2013/10/02/2013-24217/incorporation-
by-reference.
\3\ http://www.acus.gov/sites/default/files/Recommendation-2011-5-
Incorporation-by-Reference_0.
pdf.
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The question OFR was trying to answer was simple: why shouldn't
IBR-ed standards be free? It seems like a valid point. But the blanket
statement that all IBR-ed standards should be free misses some very
important considerations:
Every standard is a work of authorship and, under
U.S. and international law, is copyright protected \4\, giving
the owner certain rights of control and remuneration that
cannot be taken away without just compensation.\5\
---------------------------------------------------------------------------
\4\ http://www.copyright.gov/title17/.
\5\ In February 2011, ANSI's Intellectual Property Rights Policy
Committee developed a white paper on the copyright implications of
voluntary consensus standards in regulation: ``Why Voluntary Consensus
Standards Incorporated by Reference into Federal Government Regulations
Are Copyright Protected,'' http://publicaa.ansi.org/sites/apdl/
Documents/News%20and%20
Publications/Critical%20Issues/
Copyright%20on%20Standards%20in%20Regulations/
Copyright%20on%20Standards%20in%20Regulation.pdf
Although many people working on standards development
are volunteers, SDOs incur significant expenses in the
coordination of these voluntary efforts. From the time a new
project is commenced until the final balloting and adoption of
a standard, the drafting process draws heavily on an SDO's
administrative, technical, and support services. Tens of
thousands of staff employed by SDOs across the nation provide
direct support for the technical development activities of the
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volunteers.
SDOs are--for the most part--non-profit
organizations. In order to recoup their costs, some SDOs rely
heavily on revenue from copyright-protected sales and licensing
of the standards. An SDO's right to receive these revenues is
based primarily in their copyright rights in the standard.
Without such copyright protections, many SDOs would not have
the financial ability to continue their work. Some
organizations receive revenue through membership support
including membership fees, project fees, registration fees, and
other member-generated income. Still others rely on a
combination of these and other revenue-generating activities.
By funding operations at least in part through sales and
licensing of standards, SDOs can minimize barriers to qualified
participation and maximize independence from entities seeking
to influence the outcome for commercial or political reasons.
Standards sales also allow non-profit SDOs to recoup basic
administrative costs while passing on to implementers all of
the benefits of the voluntary and inclusive process of
standards development, including openness, balance,
opportunities to participate, and protection from undue
influence.\6\
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\6\ ANSI Essential Requirements, www.ansi.org/
essentialrequirements; World Trade Organization (WTO) Technical
Barriers to Trade (TBT) Agreement Principles for the Development of
International Standards, http://www.wto.org/english/tratop_e/tbt_e/
tbt_e.htm.
If SDOs cannot charge for standards and codes, this disrupts
the standards development ecosystem. The funding has to come
from somewhere. Increasing participation fees to offset lost
sales revenue would disenfranchise consumers, small businesses,
and local governments. Those with the money would have all the
---------------------------------------------------------------------------
influence.
Standards must be maintained and the publication kept
up to date. This requires ongoing development, revision
maintenance, and administrative costs. The government and
taxpayers benefit from the current system by not paying for
these recurring development and administrative costs.
If SDOs cannot afford to stay in business, safety
standards would not be updated, with the potential for
dangerous consequences. And standards for new technologies
would go unwritten, affecting U.S. competitiveness and
innovation. The government would have to step up, take over
what is now a market-driven system, and somehow find the money,
time, and expertise--for every single technology and industry
area.\7\
---------------------------------------------------------------------------
\7\ Agencies have explored what that scenario might mean. Consider
the following findings of the Federal Energy Regulatory Commission
(FERC), published in the Federal Register in December 20091:
When the Commission weighed the advantages achieved by the
North American Energy Standards Board (NAESB) standards
development process against the cost to the Commission and
the industry of developing these standards through notice
and comment rulemaking, we found, and continue to find,
that the benefits of having a well-established, consensus
process outweigh whatever costs non-members may incur in
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having to obtain copies of the standards.
Finally, decisions made about our national
standardization system and our priorities for action reach far
beyond our borders, especially when it comes to the continued
success of our products, services, and workforce on the global
stage. Any decisions or actions that would fundamentally
undermine this system will cause the U.S. to lose this
competitive advantage to other countries that would be quick to
seize the opportunity. Additionally, significant changes to the
system would compromise the role that standards play in
protecting health, safety, and the environment.
what is the answer?
Reasonable availability is the best solution, as it allows for the
flexibility required by different industries, agencies, and SDOs. The
public and private sectors should continue to make standards and codes
available on a reasonable basis. For some this may mean providing read-
only but free access, and for others it may mean at reasonable prices.
Recognizing that there is not ``one solution to the access issue,''
\8\ the OFR found that it is for the federal agencies to work with SDOs
to provide reasonable access to IBR-ed standards.
---------------------------------------------------------------------------
\8\ For example, one must take into account the myriad uses of IBR
by different agencies. Many standards accepted under IBR have within
them normative references to a second, or even third, level of
standards. Making each and every standard referenced directly or
indirectly through an IBR available free of charge to the public would
be challenging and extremely cost-ineffective.
Furthermore, many standards under current IBR rules are International
Standards such as those promulgated by ISO and IEC. Any changes to
reasonable availability requirements would not have any jurisdictional
effect on current sales and distribution policies of ISO and IEC.
The OFR's recent assessment reaffirms the decade-old guidance
contained in OMB Circular A-119--to ``observe and protect'' the right
of copyright holders when incorporating by reference into law voluntary
consensus standards. The very purpose of this policy is to permit the
government to benefit from the efficiencies of the voluntary consensus
standards development process. When the government references
copyrighted works, those works should not lose their copyright, but the
responsible government agency should collaborate with the SDOs to
ensure that the public does have reasonable access to the referenced
documents.
And that's just what is being done. Many SDOs make standards
available for free or at a discount to consumers, policymakers, and
small businesses. And some SDOs make certain standards and codes
available online on a read-only basis.
For its part, ANSI has launched an online IBR Portal for the
benefit of the user community, including consumers. The portal provides
a voluntary, centralized infrastructure that can help the hundreds of
SDOs in this country make their IBR-ed standards available in read-only
format, should they wish to participate.\9\
---------------------------------------------------------------------------
\9\ http://ibr.ansi.org.
---------------------------------------------------------------------------
in conclusion
The standardization community believes--as OMB, NARA, OFR, and ACUS
believe--that the development of complex, highly specialized, technical
standards requires a massive investment of time, labor, expertise, and
money. Federal agencies continue to incorporate privately developed
standards, eliminating costs of developing government-unique standards.
Standards development in this country is one of the earliest and
most successful examples of the public-private partnership, which has
benefitted our nation tremendously on many fronts--competiveness,
public safety, successfully commercializing American innovations
globally, and much more.
We thank you for this opportunity to provide testimony.
Due to the limited advance notice of this hearing, we would
respectfully request the Chairman to hold the hearing record open for
at least 14 days, to allow affected organizations or individuals
adequate time to file additional testimony on this important subject.
about ansi
ANSI is a private, non-profit organization that administers and
coordinates the U.S. voluntary standards and conformity assessment
system. In this role, the Institute oversees the development and use of
voluntary consensus standards by accrediting the procedures used by
standards developing organizations, and approving their finished
documents as American National Standards.
Internationally, the Institute is the official U.S. representative
to the International Organization for Standardization (ISO) and, via
the U.S. National Committee, the International Electrotechnical
Commission (IEC).
ANSI's membership is comprised of businesses, government agencies,
professional societies and trade associations, standards developing
organizations (SDOs), and consumer and labor organizations. The
Institute represents the diverse interests of more than 125,000
companies and organizations and 3.5 million professionals worldwide.
ANSI works closely with stakeholders from both industry and government
to identify consensus-based solutions to national and global
priorities--an inclusive, collaborative partnership between the public
and private sectors.
__________
Mr. Coble. Thank you, Ms. Griffin.
Mr. Malamud?
TESTIMONY OF CARL MALAMUD, PRESIDENT, PUBLIC.RESOURCE.ORG
Mr. Malamud. Thank you, Mr. Chairman, Mr. Ranking Member.
And thank you for the opportunity to appear before you today.
I am the Founder of Public.Resource.Org, a nonprofit that
puts government databases, that everybody agrees are public, on
the Internet and then works closely with the government to help
them improve their own operations. I am responsible for placing
the SEC EDGAR and U.S. Patent databases on the Internet for the
first time. Public Resource has put all the historical opinions
of the U.S. Court of Appeals on the Internet for the first
time. We worked with Speaker Boehner and Chairman Issa to put a
full archive of video from the House Oversight Committee and
14,000 hours of additional hearings online.
I would like to highlight three key points. First, there is
a fundamental principle of our democracy, the rule of law, that
states that, ``If we are to be an empire of laws and not of
men, we must publish the edicts of government for all to know,
because ignorance of the law is no excuse and an informed
citizenry must educate itself on its rights and obligations.''
That the law has no copyright because it is owned by the
people, is a principle that has been repeatedly reaffirmed by
the courts.
Despite that principle, my nonprofit has received stern
takedown notices for publishing the official codes of Georgia,
Idaho, and Mississippi. At the Federal level, the Code of
Federal Regulations deliberately and explicitly incorporates by
reference public safety codes that become binding law. As Joe
Bhatia, the President of the American National Standards
Institute, clearly states, ``A standard that has been
incorporated by reference, has the force of law and it should
be available.'' My nonprofit has assembled a collection of
1,000 of those public safety laws and we have made them
available to the public for the first time on the Internet. For
that service, three standards bodies are suing us for, and I
quote, ``Massive copyright infringement.'' They are suing us
for publishing the law without a license.
My second point is about money. Some standards bodies
insist that before one can read or speak the law, one must
first obtain their permission. They say everybody needs a
license, because they need the money. But, the goal of their
process is precisely that their safety codes become the law.
They lobby aggressively for that outcome and they boast loudly
when their codes are adopted. When a safety code becomes law,
the publisher gets a gold seal of approval of the American
people. They exploit that position by selling all sorts of
ancillary services, such as membership, training and
certification. The business has become incredibly lucrative.
And these nonprofit standards bodies pay their CEOs million-
dollar salaries.
My third point is that the right to read the law and speak
the law is necessary for innovation, innovation that leads to
better tools for those that use the law every day including
government workers, electricians and plumbers, students and
apprentices, volunteer firefighters, journalists, and citizens.
Mr. Chairman, I have here for the Committee's inspection 20
public safety standards that are part of Federal law, including
the safety requirements for wooden and metal ladders, the
safety requirements for protective footwear, the national fuel
and gas code. If you were to read these laws into your hearing
record, would the Congress face strident objections for
speaking the law without a license, like my nonprofit faces?
That is why 115 distinguished law professors have joined me in
calling on this Committee to consider an edicts of government
amendment to the Copyright Act to clarify, once and for all,
that the law belongs to the people.
Thank you very much.
[The prepared statement of Mr. Malamud follows:]
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__________
Mr. Coble. Thank you, Mr. Malamud.
I want to commend the witnesses, you have not--you have
complied with the 5-minute rule and I thank you for that. And
we will try to respond accordingly.
Mr. Schultz, what changes to U.S. law would you recommend
to address broadcaster concerns about signal theft, A? And, B,
would these changes be to our copyright law or our
communications law?
Mr. Schultz. Thank you. That is an excellent question.
The law, as it currently stands, serves well. As I
testified, it serves both the public interest and serves the
broadcasters well.
There are current developments that could change that,
notably the AEREO case, regulatory proceedings and a number of
other court cases. But, as things stand, the law works
remarkably well. And indeed even conceivably joining a new
broadcast treaty would not require us to change the law. And
thus, the current statutory scheme works well. And I am not
aware, although I don't speak on behalf of the broadcasters, I
am not aware, in fact, of the broadcasters seeking new rights.
Thank you.
Mr. Coble. I thank you.
Now, let me ask you another question, Mr. Schultz. In your
work on copyright issues, what other issues of concern do you
believe are of interest to copyright owners generally?
Mr. Schultz. Thank you.
I think, indeed, the subject of this hearing is an
important one, including the making available right. It is
important that creators are able to secure the return on their
investment and their labor. And that is currently the
challenge. The quite obvious challenge in front of all of us.
And so, I think in the long run that will need to be addressed.
Mr. Coble. Thank you, sir.
Professor Lunney, do you believe that an explicit making
available right would significantly broaden the scope of
copyright protection beyond what it is today?
Mr. Lunney. A making available right, if we used the
language of the WIPO Treaty, would not change the law in the
file-sharing context, by any measurable degree in the litigated
cases. It would, however, open up potential issues in the
public performance and public display areas, linking
retransmission and issues of that sort for cloud computing and
social networking sites. I think it would reopen some of those
issues.
Mr. Coble. Now, does your lack of concern for the impact of
file sharing reflect the view that Congress should reduce
copyright protection in other areas?
Mr. Lunney. I think one of the things that has sort of
slipped in, almost by accident, to copyright law is that we
have shifted over the last 20 years or we have expanded
copyright over the last years to get the individual consumer
involved as copyright infringers. I think that is a bad
development. For its first 200 years, copyright was directed
solely at other commercial entities. I think it works best when
it works in that fashion. When you start getting the individual
consumers in the mix, either as an infringers of one sort or
another, you get the privacy concerns and other concerns. And I
think that has created real problems for copyright law.
Mr. Coble. Mr. Love, do you believe that other nations are
close to a conclusion, at WIPO, in drafting broadcast treaty?
Mr. Love. Could you repeat that?
Mr. Coble. Yes. Do you believe that other nations are close
to a conclusion, at WIPO, in drafting a broadcast treaty?
Mr. Love. In 2007, we thought that the treaty was
essentially stopped and there wasn't going to be any further
progress on it. After the Marrakesh Treaty was adopted by WIPO,
in June of 2013, it opened up a lot of space in the
negotiations at WIPO. And it was, I think, quite surprising
that in September of last year, country after country took the
microphone, at the general assembly of WIPO, to call for a
diplomatic conference in 2015. I think the Secretariat of WIPO
is looking for a hat trick. They would like to have three
treaties in hand in the copyright field, having concluded the
Beijing Treaty in 2012 and the Marrakesh Treaty in 2013. And I
think they are focused on that.
We would prefer that there is no broadcast treaty. We are
opposed to the proposal. But I wouldn't really--I think people
are wrong if they don't think that this thing is moving
forward. At this point, there is a large number of countries
that are calling for a diplomatic conference. Once you go into
diplomatic conference, it is very difficult to predict what the
outcome will be.
Mr. Coble. Thank you, sir.
Let me try to beat that red light, Ms. Griffin.
How does one respond to the statements of some that
citizens deserve full access to the laws and rules that they
are--by which they are required to live.
Ms. Griffin. Yes, thank you for the question.
I think that the answer to that depends upon an analysis of
many dimensions. The first dimension is the recognition that
standards and codes are original works of authorship and are
entitled to copyright protection. And, even at times when they
are incorporated by reference into legislation, both the Second
and the Ninth Circuit have held that those standards and codes
do not necessarily lose their copyright protection by virtue of
that. Another dimension of the issue is OMB A-119 and the
NTTAA. They encourage and demand that Federal agencies
incorporate standards into Federal regulations, when they are
able to do so. A final dimension of the issue is the one that
Mr. Malamud raises and that is the one that says that the
citizenship should have the right to see what the law is.
The way that those three dimensions have been bridged, over
the course of the years, is through a tool that is contained in
the Freedom of Information Act. And that tool is called
incorporation by reference. And that provides that Federal
agencies can incorporate into Federal regulations extrinsic
standards, as long as those standards are reasonably available
to the class of persons that are affected by it. And that tool
has permitted the Federal agencies to comply with their
obligations, under OMB A-119, while at the same time respect
the copyrights of the standards that are so incorporated.
Recently, that has been challenged by Mr. Malamud and
others. And they have gone to NARA and they have questioned
whether the reasonably available standard ought not be changed
to make the standards for free. And NARA has concluded, as has
ACUS, that the current process continues to be the best one,
the one that is best designed to ensure that high quality
standards are developed and incorporated by reference into
Federal regulation.
Mr. Coble. Thank you, Ms. Griffin.
Thank you all.
I see the red light has illuminated. So, I now recognize
the gentleman from Michigan for his questioning.
Mr. Conyers. Thank you very much.
Professor Nimmer, we appreciate you being with us today.
And I would like to discuss with you what you see as the key
issue facing copyright industries and the public today, when it
comes to the current copyright system.
Mr. Nimmer. Thank you, Representative Conyers.
It is obviously a very broad question and I will have to
give a broad answer. I think the answer is that we are governed
by a statute written essentially in 1965, passed in 1976, and
now here in existence 50 years later with technologies that
were not remotely contemplated then. And we see each of the
rights of the copyright owner coming under strain.
Today we have been talking about the distribution right and
its making available component. You have already mentioned that
the United States Supreme Court granted certiorari in the AEREO
case. That is a case about the performance right. And we see,
because of the Internet, a convergence of all of those rights.
So, classically, back in 1965, there was a great difference
between reproducing a book, publishing it, then distributing
it, and then a performance, which would be a play. Today, when
the bits flow over the Internet, sometimes it is conceptualized
as an act of reproduction, sometimes it is conceptualized as an
act of distribution, and it has been argued in cases that it is
equally a performance.
So, a very forward-thinking approach to copyright law would
be to look at exploitation, not within the prism of those five
categories that are half a century old, but instead to try to
formulate the ideal rules of the road going forward, which
might be one unitary right or it might be broad under the
rubric of two rights or perhaps three rights. I am not
prepared, as I sit here today, to offer that answer. But, I
think it is exactly the right question to ask. And I would be
pleased to work with the Committee on a going-forward basis.
Mr. Conyers. We appreciate that. Do you think the courts
have struggled to apply the making available right in the
United States even though Congress and government experts agree
that the existing law should cover the right?
Mr. Nimmer. Yes, I do think the courts have struggled with
that issue. I think one of the main reasons is that some of the
individuals targeted have uploaded thousands of copyrighted
works. And unfortunately, the result under our law is that
somebody who has uploaded thousands of works might be liable
for hundreds of millions, possibly even a billion dollars'
worth of damage. That is why I think, at the same time that
Congress confronts the making available component of the
distribution right, Congress should also rationalize the award
of statutory damages.
Right now, the scheme was set in 1999. The law happened to
be passed right before the invention of a service called
Napster. So, our law is trying to keep pace with developments
on the ground. And that is why I think a unified approach would
be best, where we look at the making available right and
statutory damages and a small claims court, all in one unitary
point of view.
Mr. Conyers. And finally, I wanted to get an explanation of
why you changed your mind on the making available right which
was not encompassed by the distribution right in previous
editions.
Mr. Nimmer. Good. Thank you.
It is a challenge writing a treatise because any one
sentence can be taken out of context and applied in a way that
is was not intended. In particular, in 1995, there was a Second
Circuit case in which somebody who owned Laurel and Hardy
Videos said his rights had been violated by CBS because they
had broadcast his videos. And he was correct. But, he said his
distribution right had been violated by the performance of
those videos and the district court tended to agree with him.
So, the Second Circuit reversed. And I wrote up that case to
say, it is not enough that the works have been made available
to the public in some sense, by virtue of being broadcast. To
violate the distribution right there has to be actual
distribution of their works, namely a physical copy passing
hands. I wrote that in 1995, 3 years before Napster was
formulated, so I did not have peer-to-peer services in mind.
And, unfortunately, that sentence was taken out of context
later.**
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**Addendum:
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In addition, there is a deeper answer to Rep. Conyers' question. The
treatise's full treatment of this issue was the product of important
research that a colleague shared with me. In response to the courts'
conflicting making-available rulings, Prof. Peter Menell of UC Berkeley
investigated the roots of copyright law's distribution right. As
detailed in my Written Statement, I was not sufficiently attentive to
those roots until I was given the chance to review his path-breaking
scholarship. His findings were so important that I invited him to co-
author the next treatise revision, in order to include the
comprehensive analysis of the proper interpretation of copyright law's
distribution right, as set forth in that landmark article. It is for
this reason that the current treatise version differs so markedly from
the old version.
Mr. Conyers. Thank you so much.
I will yield back the balance of my time, Mr. Chairman.
Thank you.
Mr. Coble. Thank you, Mr. Conyers.
The Chair recognizes the distinguished gentleman from
Virginia for his statement. Mr. Goodlatte?
Mr. Goodlatte. Thank you, Mr. Chairman.
Mr. Nimmer, I would like to follow up on the Ranking
Member's question. Professor Lunney has raised concerns that
making--that adding a making available right would change
longstanding jurisprudence. I take it you don't agree with that
perception. Would you elaborate on your view? And does that
view imply that Congress should never update the law for any
reason?
Mr. Nimmer. Thank you, Representative Goodlatte.
Yes, Mr. Chairman, I do disagree with that point of view.
It all depends what type of law Congress were to pass. If
Congress were to pass a standalone making available right, that
would be a large change to copyright law. The way the cases
have arisen to date, concerning making available, it has been
as an aspect of the distribution right. So, cases construing
the copyright owners' distribution right have come down on both
sides of the making available issue.
My testimony today, if we keep our narrow focus, is that
Congress should clarify that the distribution right is violated
when works are made available. In other words, when an
individual uploads a copyrighted work to a share folder, it has
thereby been made available to the world and the act of
copyright infringement is complete. It is not necessary to show
a subsequent individual downloaded that work.
And I believe that, therefore, a properly tailored
amendment does not call into question existing cases that were
rendered under the performance right or under the display
right.
Mr. Goodlatte. Thank you.
Let me give everyone on the panel--it is a great panel, by
the way, I thank all of you for your testimony--a jump ball
here. Since this hearing has covered three separate topics, are
there any of you who would like to comment on any of the other
two topics that you didn't get to testify in your opening
statement?
Mr. Love?
Mr. Love. On the issue of copyright and the law, I think
it--there is this distinction between whether the State laws
and regulations in the United States can be copyrighted--and
with the Federal. I think that U.S. laws, works of Federal
employees, Federal laws, Federal regulations are not subject to
copyright. There are--I think it would be good to extend that
rule to laws at the State level, in everything from court
opinions to regulations to statutes.
And I also mentioned that the Berne Convention itself has a
special provision that really gives country--governments extra
flexibility in the area of testimonies, legislation, of
anything that basically spacks of law-type proceedings.
And so, I think that it is good that you focused on this
issue. And I think that--I certainly agree with what Carl was
saying, which was that, you know, if you are expected to--you
know, my father was a judge--if you are expected to abide by
the law, I think you have a right to know what the law is. And
I think that is--it is good that this Committee is looking at
that issue.
Mr. Goodlatte. Thank you.
Professor Schultz?
Mr. Schultz. Thanks, I will briefly speak to standards.
I think many of the principles I have discussed apply
equally to standards that we need to ensure that the authors'
standards can be compensated for their work. And I think Ms.
Griffin did an excellent job testifying. But, we should all
keep in mind that standards are incredibly diverse. And some
standards have thousands of parts and thousands of subparts in
those parts, in the case of things like technical standards.
So, standards should not all be treated the same. And there
should be due regard to the complexity and incredible expense
and incredible public value that is created in standards.
Thank you.
Mr. Goodlatte. Thank you.
This is another one for all of you. As the Committee
continues its work, reviewing copyright law, are there topics
in copyright law that you would recommend that the Committee
review?
I will start with Professor Lunney.
Mr. Lunney. I agree with David on this, that statutory
damages is going to need to be revisited, particularly in the
individual consumer context. It is a real problem to treat them
as we are now. And hundreds of thousands of dollars in damages
against a mom and a student, just not appropriate.
Mr. Goodlatte. Point well taken.
Professor Schultz?
Mr. Schultz. The Digital Millennium Copyright Act's notice
and takedown provisions are broken. They are based on an
updated paradigm that seems almost naive now, that you could
actually contain a file and stop it from spreading. It is no
longer working for creators.
Mr. Goodlatte. I noticed a piece, just recently, that said
that Google had received its hundred-millionth takedown notice.
Mr. Schultz. Yes. And that goes both ways. Costs are
symmetrical, right? That means hundreds of millions of notices
have to be sent.
Small creators, creative upstarts, individuals, thousands--
tens of thousands of people who make a good middle-class living
can't afford to spend all of their time trying to chase people
around the Internet. This system is not working for them. It
needs to be revisited.
Thank you.
Mr. Goodlatte. Mr. Love?
Mr. Love. I think that revisiting the issue of formalities
is quite important. I think that the decision to introduce
formalities in the United States has created a wasteland of
cultural works, which are essentially inaccessible to people. I
don't think anybody can go back very far before you realize it
is impossible to identify who the owners of a lot of works are
and in some cases who the authors are; photographs; old, old
pamphlets; literature. There is--a variety of proposals that
have been made to deal with orphaned works. But one of which is
to consider the flexibility you have on formalities. Certainly
for the post-TRIPS requirements of 20 years on photographs and
50 years on copyright, you can introduce formalities for that
extended period. And there is a proposal in the TPP negotiation
to do that very thing, actually. But the U.S. is actually
opposing it. And I think the U.S. is on the wrong side of that
issue.
Another thing is that on sound recordings, which are not
protected by the Berne Convention, there is no obligation to
have formalities. And so, for--not all things that are
considered copyrighted in the United States are actually
required under, you know, international obligations, the Berne
Convention and formalities. So, I think a deep and technical
look on where you can introduce formalities.
Some people, like in the recording industry, have expressed
some openness to the idea that it was maybe--would be a good
idea to sort of give more protection to people--I am sorry, I
am going to have to wind this up.
And the final thing is that the Treaty for the Blind
provides an opportunity for the United States to share its
collections of works under copyright exceptions with blind
people in other countries. And I think that needs to be fixed.
Mr. Goodlatte. Mr. Chairman, my time has expired. But, I
know Mr. Nimmer wanted to jump in on that as well, if I may.
Mr. Coble. Without objection.
Mr. Nimmer. Thank you, Mr. Chairman.
The written statement that I submitted put two other
matters into the hopper. One is the United States Supreme
Court, last year, ruled that gray-market goods can be freely
purchased abroad and imported into this country. Justice
Breyer's opinion said, ``We think that this is what Congress
intended. If Congress did not intend it, then Congress can come
back and tell us.'' So that is something that is very alive
now.
And there is a parallel issue in the domestic front, which
is cloud computing. It introduces wholly new rules of the road.
It essentially eliminates the safeguard of the first sale
doctrine. And Congress needs to look at what rules it wishes to
have for the road of this uncharted territory of the cloud.
Mr. Goodlatte. Thank you, Mr. Chairman.
Mr. Coble. The gentleman's time is expired.
Ms. Chu from California?
Ms. Chu. Thank you, Mr. Chair.
As the co-chair of the Creative Rights Caucus along with
Chairman Coble, I believe that a making available right is
engrained in our current statute as an essential part of our
copyright framework. Congress has repeatedly concluded that no
change to the U.S. copyright law was necessary because existing
law already includes a making available right. Our Federal
appellate courts have also arrived at the same conclusion. And
this is also the case in very international agreements, such as
WIPO and the WIPO Copyright Treaty. I believe that the making
available right is an inherent exclusive right that gives the
creators the freedom to express themselves and more importantly
to decide how and when they choose to distribute and publicly
perform their own works.
So, Professors Nimmer and Lunney, what, if any, impact
would carving out a separate making available right to the
Copyright Act, what effect would that have on online theft?
Would explicitly creating a making available right help lessen
the burden for individual creators or make the process easier
for them to prove their works have been infringed upon?
Mr. Nimmer. Thank you, Representative Chu.
I believe it would streamline the cases. Instead of having
a large Federal case about every activity of peer-to-peer
sharing, there could be an expeditious proceeding, particularly
if Congress also adopted my suggestion of having small claims
court proceedings. And I think it would be a salutary change to
streamline those procedures and get quick and fair and
expeditious justice in them.
Mr. Lunney. Well, as you might guess, Representative Chu, I
disagree with Professor Nimmer. It used to be, under Napster,
that you would go on and find one user who had the file and you
would download it from that particular user. That sort of file
sharing protocol has long--largely faded away. Most file
sharing today is with BitTorrent. The file is divided up into
separate segments and it is sent out in a swarm of people who
are all simultaneously uploading and downloading the work. So,
the issue of whether you have to prove a download, as part of
your prima facie case, is essentially irrelevant under the
BitTorrent protocol whether we have the making available right
or the existing distribution right.
As a practical matter, almost all of these instances where
file sharing is found, what happens is the investigator
identifies the person, the IP address. They go to court. They
get the subpoena to the ISP to get the consumer's information.
They send a threat letter and that is as far as it goes. It is
either settled or the consumer can present some sort of
evidence that they were not the person who did the downloading.
And that is it. Only a relative handful, maybe 20, 30, 40, a
few hundred, actually ever go any further than that. And, if it
actually goes to trial, they get a copy of your hard drive.
And, at that point, it is relatively trivial to prove the file
sharing activity you have engaged in.
So, I don't see how this would really facilitate or help
sort of small creators.
Ms. Chu. Professor Schultz, you look like you have an
opinion on this.
Mr. Schultz. Oh, no. No, thank you. [Laughter.]
Ms. Chu. Then, okay.
Professor Schultz, then let me turn to a different issue,
which is I would like to ask specifically about the Aereo case.
Of course we know that the Supreme Court agreed to hear the
Aereo case to determine whether online streaming of live
broadcasts constitutes an infringement of a copyright holder's
exclusive right of public performance. Given the economic
importance of intellectual property in our country and the
constant evolution of modern technology, in which more people
are viewing content over the Internet, is this an appropriate
question for the courts to determine or should Congress
legislate and settle this area of law? And how would a
decision, favorable to Aereo, change the landscape of how
broadcast content would be delivered to consumers in the
future?
Mr. Schultz. Thank you. That is an excellent question.
I think I will begin with the second part of it: how would
it change the landscape of broadcast. So, you know, Aereo's not
the only court case that the broadcast and television
creators--broadcast industry and television creators face. We
have one court saying that, essentially, intercepting signals
and aggregating them and sending them to their customer and
Aereo, does not require payment of retransmission fees. We have
another court saying that stripping commercials out of
broadcasts is perfectly okay. We have another court, in
cablevision, essentially saying that a virtual on-demand
service is permissible. And when all this is said and done, you
have to ask where the revenue is going to come from; how these
companies will get their--get compensated for their work.
So, I think the--an Aereo decision that comes out in favor
of Aereo would undermine the very premise on which the system
is based, that local broadcasters can be compensated for the
tremendous investment they have in broadcasting and content
creators can be compensated for their work. So, I think that
this in an appropriate topic for the courts. But, if the courts
act--if the courts interpret the Copyright Act in a way that
undermines these fundamental policies, this Congress will have
to act.
Thank you.
Ms. Chu. Thank you.
I yield back.
Mr. Marino [presiding]. Thank you, Congresswoman.
The Chair now recognizes the gentleman from North Carolina,
Congressman Holding.
Mr. Holding. Thank you, Mr. Chairman.
Professor Nimmer, maybe this is best directed toward you.
But could you take a minute or two and explain further how U.S.
copyright law compares to that of other nations, particularly
distinguishing features?
Mr. Nimmer. Okay.
The theory of Anglo-American copyright law is basically
instrumental that it is there for a purpose, to promote the
progress of science. On the Continent, in Europe, the
underlying theory is much more based on natural rights that
there is an intrinsic connection between the author and the
author's creation. And so, therefore, there is a natural right
to compensation just by virtue of having created, regardless of
the social policy that will come out of that activity of
copying. That is the broadest answer to your question.
The philosophical underpinnings, that I have just outlined,
obviously play through with practical implications. We see in
Continental jurisprudence a very strict recognition of moral
rights, which is something that is alien to the U.S. way of
copyright and was only put in grudgingly and only with respect
to works of visual art, in 1990 and plays out in other ways as
well.
That is a very brief answer to an extremely interesting and
broad-ranging question.
Mr. Holding. Well, maybe we could dive down on some
specifics in the context of, you know, we are negotiating some
trade agreements, TTIP in particular. And I am thinking of, you
know, what type of copyright issues might be brought up in that
context and--before we see any divergences which could cause
particular arguments?
Mr. Nimmer. Let me ask you, Representative Holding, are you
talking about the Free Trade Agreements that are being
treated----
Mr. Holding. Right. Correct.
Mr. Nimmer. Okay.
Insofar as I am aware, the U.S. Government has had great
success in reaching agreement with other countries with respect
to those Free Trade Agreements. There are 20 countries now with
whom the U.S. has bilateral relations. Those treaties do, I
think, every single one of them possibly with one or two
exceptions that I am not aware of, include a making available
right. And so, notwithstanding the philosophical differences
between countries with differing roots of copyright, there has
not been disagreement, insofar as I am aware, with those Free
Trade Agreements.
Mr. Holding. And I would like to open it up to the panel,
if anyone else would like to chime in with, you know,
particular issues, you know, having to with our copyright laws
versus other nations' and problems there.
Yes, sir.
Mr. Love?
Mr. Love. The U.S. has high norms as far as damages are
concerned. A lot of the foreign countries have lower norms, as
far as damages. But, the U.S. has broader fair use rights. And
so, the combination is such that our technology companies which
are really dominant in a lot of the Internet areas have been
able to operate.
What the U.S. is doing in the Free Trade Agreements is sort
of cherry picking the parts of the U.S. law that the--in some
cases, that the publishers like. So, they sort of pick really
aggressive standards, as far as damages. To the extent they are
even requiring countries consider the full retail value as the
basis for damages, for example, which isn't even found in U.S.
law and is contrary to U.S. law.
On the one hand, and then--as kind of a halfhearted way of
looking at the fair use thing of the thing. So, what you have
got is sort of a shift of increased liability for U.S.
technology companies operating overseas. U.S. has, you know, it
has strong damages. But we have more exceptions in our domestic
law than most foreign countries do, which is kind of this
paradox. I think that the problem in trade policy is also that,
you know, the negotiations are completely secret. You know, we
help leak September of the TPP negotiation, a negotiation
involving something like 40 percent of the world's GDP in that
negotiation. We don't know what the current version is and
neither do you.
Now, I don't see how you can possibly expect a trade
agreement with Japan and Mexico that, you know, basically
NAFTA-squared, -tripled, -triple-squared with that much GDP on
the table. And, like, not even know what is going on and not
even have that thing transparent. So, I think that the Congress
has fallen down by allowing copyright policy to be made in
secret, you know, through these trade agreements.
Mr. Holding. Thank you.
Mr. Chairman, I yield back.
Mr. Coble [presiding]. I thank the gentleman from North
Carolina.
Mr. Deutch, the gentleman from Florida?
Mr. Deutch. Thanks, Mr. Chairman.
Professor Lunney, I wanted to pursue, in a little more
detail, some of the assertions that you make in your written
testimony. All of this, sort of to support your assertion that
there is no need for a making available right, you say, ``The
unauthorized copying, distribution and streaming of copyrighted
works across the Internet are not the problem that copyright
owners would have us believe.'' You talked about the purpose of
copyright is, ``Not to maximize revenue, but to make the works
more widely available.'' You said here today that the measures
of music output is what we should look at, not the money made,
the goal is for more and better works and file sharing
encourages that. And you went on to say, even while formally
illegal, ``File sharing has provided much broader access to
existing works than the preexisting market mechanisms had
accomplished.''
And there are a few things I am trying to wrap my arms
around. First, you had said earlier that the copyright laws in
this area had always focused on--never on individuals, but
always on corporations. And I wonder, if you draw the
distinction at the individual who downloads a song or a movie
illegally, and what happens when that individual starts--
creates an opportunity to share hundreds and thousands and tens
of thousands and millions of songs and movies and other
copyrighted work that can then be shared with others. Clearly,
in that instance, file sharing goes beyond what you are
prepared to accept?
Mr. Lunney. Thank you for the question.
It is a hard area to get our hands around. And it is
counterintuitive to suggest, at some point, that less revenue
could lead to more works. It would be a surprising result. I
was surprised by the result when I did the empirical work
myself. And, of course, from my perspective, I am sort of an
ivory-tower academic. I don't expect my work to have any real
world significance. I am not sure I want it to have real world
significance. I want to sit and explore issues and try and
figure things out. And so, you get a result like this and you
publish it and all of the sudden you are the center of a bit of
controversy.
Obviously, copyright is not a never ending spigot, you
can't simply add more and more and more and more and expect to
get more works out the other side. There has got to be
diminishing returns at some level.
Mr. Deutch. Professor Lunney, I am not asking you to
restate your testimony.
Mr. Lunney. Okay.
Mr. Deutch. I understand it. I am just asking, when you say
that file sharing, that the sharing of copyrighted material is
okay, is it okay just for an individual or is it okay for an
individual to share tens of thousands of songs or films?
Mr. Lunney. Well, if there is file sharing, there is the
potential, at least, for sharing tens of thousands songs to
tens of thousands of people. And we have assumed----
Mr. Deutch. Right.
Mr. Lunney [continuing]. That that has the same effect as
if a competing commercial publisher came along and offered
competing copies in the marketplace.
Mr. Deutch. Well, except----
Mr. Lunney. That is an assumption.
Mr. Deutch. How is it different--how is it--here is what I
really don't understand with the argument that file sharing--
illegal file sharing is somehow okay. If the goal is to spread
the amount of music and creative works and film and all of this
great intellectual property and to spread it as far and as wide
as possible, why is it different, in the computer, in the
setting of technology, to share files that way than it would be
for the Big Box retailer to have someone come in through the
backdoor, scoop up all the CDs and DVDs and take them out on
the street corners, after they have copied them tens and
hundreds of thousands of times, or gone into business on their
own? Why is different with a physical product than it is
online?
Mr. Lunney. Well, it is different when consumers are doing
it than when a commercial entity is doing it, I was----
Mr. Deutch. Yeah, right.
Mr. Lunney [continuing]. Arguing.
Mr. Deutch. And I am not--I am suggesting to you that that
individual who breaks in to the Big Box retailer and scoops up
maybe only one or two, takes a couple of CDs and DVDs and makes
copies of those him- or herself and then goes ahead and shares
those, spreads this information far and wide, gets all this
intellectual property out there. Why is it different? Why
should it be acceptable for that to happen online, but not on
the streets?
Mr. Lunney. So, is this individual, who is breaking in to
the Big Box, are they offering those copies for free or are
they----
Mr. Deutch. Is that the distinction? Is that the
distinction then?
Mr. Lunney. I think it is an important distinction, whether
it is for profit or not for profit.
Mr. Deutch. And so--right. And so, if we had just someone
whose goal was really just to spread the great American
intellectual property that we are all so proud of by making
copies and distributing it out of his or her own good will----
Mr. Lunney. Right.
Mr. Deutch [continuing]. Thousands of copies, tens of
thousands of copies, millions of copies, that is perfectly
acceptable?
Mr. Lunney. I think we do have such individuals. I think
they are called libraries.
Mr. Deutch. And----
Mr. Lunney. And they have coexisted with the commercial
market for hundreds of years without undermining it. That is--
--
Mr. Deutch. Right. They have libraries that operate and
have operated, as you point out, for hundreds of years. Not the
setting of people who are going to make millions of copies to
then freely distribute to be used without any regulation. I
don't see the difference. And your example--and this is what is
also confusing to me. When you talk about the fact that, as you
explain, you said, you know, the question isn't whether file
sharing has caused the decline of record sales, but the decline
of record sales affected the creation of new music. And you
talk about other ways that creators can be compensated,
separate and apart.
Then you go through all of them and conclude yourself--you
reach your own conclusion, that all of those other areas are
not enough to make up for the amounts that are lost as a result
of the theft of all of this intellectual property that you
think do-gooders are certainly capable of doing to spread this
intellectual property, which makes the performers better off
and makes the songwriters better off and makes the actors and
actresses and everyone involved in the production of any film
or TV show.
And you seem to refute your own argument and ultimately
your conclusion is, yes--you do acknowledge in a footnote that,
yes, there is less money going to the industry, but that it is
not fair to point out that that may mean there may be fewer
creators willing to engage in their work. All that means is
that if you had tougher enforcement that the dollars that flow
to that--those industries, are dollars that would have
otherwise been in other industries. The--your rationalization
doesn't seem to make sense. Ultimately, the conclusion that you
reached, that somehow it is in the best interest of creators in
our country for their creative works to be spread far and wide
without compensation.
And, as you have now acknowledged, not just a couple of
kids trading songs that hopefully they purchased. But, in fact,
the spread of tens of thousands or millions that ultimately the
goal is just to spread that and that the diminishment in the
amount of compensation to those creators will have no impact,
you say, on their ability to continue to do their job. It just
doesn't--it is inconsistent with what all of those, that I talk
to, who rely on copyright to protect their intellectual
property, it is inconsistent with what they tell us they need
in order for us to continue to uphold this great American
intellectual property that we value so much.
And I yield back, Mr. Chairman, thank you.
Mr. Coble. Thank you, gentleman.
The gentleman from Pennsylvania, Mr. Marino.
Mr. Marino. Thank you, Chairman.
Lady and gentlemen, I wish I had 3 or 4 hours to sit and
discuss these matters with you. It has been very enlightening.
Ms. Griffin, you made a statement concerning standards and
how they apply to life in general. Do you think that we could
be served by the industry itself setting standards? Or, do you
believe that we need to legislate more?
Ms. Griffin. Thank you for the question.
I think that the way that the--clearly the way the system
works now is a public-private partnership with standards
developing organizations who have technical expertise working
with the Federal regulators who are in their space. And
together and through that partnership they develop, you know,
regulations that best meet the requirements of the regulated,
whatever that may be. And in this country that is a very
diverse group of people and there are very many groups that do
that.
But, what the standards developers organizations bring to
that is providing the administrative support that permits the
group that sits at that table to be open and balanced and
transparent----
Mr. Marino. Okay.
Ms. Griffin [continuing]. And not dominated by any one
group. And they provide the administrative support for having
consumers sit at the table and provide input that would not
otherwise be provided if it was just a government-driven event.
So, I think that balance is what makes it fulsome and it makes
it the system that it is.
Mr. Marino. Thank you.
Professor Schultz, you talked about notice of take down.
Let us have a little example here. I have a search engine. I
create a search engine, name it after my son, Victor's Search
Engine. And you are a musician and a writer. You chose whether
you want to be the singer, the writer or the musician. But, at
this point, you have a record out. You have a CD out. You have
music out. And I do not buy it from you. You are paid no
compensation from me. But, when people put your name in my
search engine, your music comes up and you send me a notice.
And I do nothing about it. Your music comes up because I am the
guy who is illegally selling music to people and you are not
getting paid for it. And you keep sending me notice and notice
and notice. What do you think should be done about that?
Mr. Schultz. Thank you for the question.
I think, indeed, that there are two difficulties you
identify here. One is that the current notice and takedown
system is based on identifying a particular file rather than a
work. And, as I said, it is based on an old paradigm that, you
know, what we had to do, back in 1998, was stop a file that had
escaped onto the Internet, quarantine it and pull it back. It
is naive now. And now, every time somebody's work is infringed,
they have to send a separate notice for every file, no matter
how----
Mr. Marino. Do you think I should be held responsible, even
though you are not sure how many people are downloading that
music? Because every time someone gets on my search engine and
pops your name in there, your music comes up and I am selling
it to somebody for 10 cents a pop.
Mr. Schultz. Yes, absolutely. If you are the site hosting
and profiting from somebody else's work, whether it is through
advertising or----
Mr. Marino. Do you think it should be--do you think I
should be held criminally liable?
Mr. Schultz. Criminally liable. That is a more challenging
question.
Mr. Marino. I am stealing from you.
Mr. Schultz. So----
Mr. Marino. As a--I am a--I was a prosecutor for 18 years.
So, I am stealing something from you and selling it and making
a profit off of it. Do you think that I should be charged
criminally?
Mr. Schultz. There--of course, we are going beyond the
scope of that in these hearings today. But, yes, I think
criminal law can be a useful tool. But, it has to be very
carefully applied to instances----
Mr. Marino. Okay.
Mr. Schultz. Where the----
Mr. Marino. Good.
Mr. Schultz [continuing]. User is at a great----
Mr. Marino. Thank you.
Mr. Schultz [continuing]. Disadvantage. Thank you.
Mr. Marino. Professor Lunney, let us have another example.
Instead of a brilliant attorney, you are a poet--struggling
poet. You live in a one-room apartment above a factory. You
don't even have heat in the winter. And you write--I am looking
through--I am a songwriter and I am looking through your book
of poetry and I find this magnificent poem that you wrote. And
I take that and I put it to music and I make $10 million on it.
Do you have a problem with that?
Mr. Lunney. The issue of derivative arts is a difficult
one. And I personally would not have a problem with that.
Mr. Marino. Would you personally, for struggling----
Mr. Lunney. No.
Mr. Marino [continuing]. Hardly eating, you write this book
of poetry and you don't have a problem with it?
Mr. Lunney. I feel that, in a lot of the derivative work
contexts, it is the inventive effort and creativity of the
second-comer, of the musician----
Mr. Marino. Okay, let us go back. Now your father is a
great poet--struggling, though, and trying to keep a family.
And, again, I use his poetry and I make $10 million on it and
he can't feed his children. Should anything be done about that?
Do you have a problem with that?
Mr. Lunney. Well, I am not sure exactly what you are doing
with this poetry. But, if you were just----
Mr. Marino. I am selling it and making a lot of money on
it, because I am putting it to music. Do you have a----
Mr. Lunney. Are you selling it in music, right?
Mr. Marino. Yeah.
Mr. Lunney. So, it is a derivative work.
Mr. Marino. Do you have a problem with that?
Mr. Lunney. Not the market he originally exploited. He was
just a poet.
Mr. Marino. He was just a poet.
Mr. Lunney. And so, nothing----
Mr. Marino. And he wrote a book and he really wanted to
sell it and it is not making good. But, I took a poem out of
that book and now I made $10 million and he can't feed his
kids.
Mr. Lunney. Right. My perspective on a lot of derivative
works is that we shouldn't require necessarily license in all
those contexts because it is really the derivative author who
adds the real value to that.
Mr. Marino. I would tend to disagree. And I would think I
would be a little angry, if my father said that, you know, ``We
are not eating here today, folks. But, you know, I think this
guy should be able to take my work.''
I yield back, thank you.
Mr. Coble. I thank the gentleman from Pennsylvania.
The gentlelady from California, Ms. Bass--Ms. DelBene, I
stand corrected.
Ms. DelBene. Thank you. Thank you, Mr. Chair.
Mr. Nimmer and Professor Lunney, if we were to clarify the
making available right in the law, would that--do you think
that would raise any First Amendment or free speech issues?
And, if so, what do you think we might be able to do to avoid
those challenges?
Mr. Nimmer. I believe that a simple clarification that the
copyright owners' distribution right includes making the work
available does not implicate any First Amendment special
interests that do not arise automatically in copyright law
anyway. And so, I believe we do not need to pay special
attention to that. It could be that if Congress wished to have
a special surgical intervention in the peer-to-peer domain--for
instance because of the spate of pornography lawsuits, if
Congress wished to limit the protection for pornography, that
might be a way to redress the problem that would then raise the
question of what level of First Amendment scrutiny would apply
and is there sufficient governmental interest to satisfy that?
But the straight making available aspect of the distribution
right I believe does not raise any special First Amendment
concerns.
Ms. DelBene. Professor Lunney?
Mr. Lunney. I actually agree with Dave exactly on this
issue. If you had passed a very narrow amendment, perhaps
creating the presumption that a work made available in a
sharing folder could be presumed to have been downloaded, so
that it would be infringement under either interpretation of
the existing distribution right. I don't believe that would
raise any First Amendment problems. If you pass a general
making available right, raising questions about whether a link
might be an infringement of a public display right, or whether
cloud computing or social networking, you are going to get into
some First Amendment issues there.
And I also agree that, if you try and go after copyright
trolls by differentiating the copyright protection for porn
versus other types of audiovisual works that may raise First
Amendment issues.
Ms. DelBene. So, if we feel that the making available right
is implied in the law today, why do you think that the courts
are having so much difficulty with this right now?
Mr. Nimmer?
Mr. Nimmer. I believe the elephant in the room is the
amount of statutory damages. So that, when the young single
mother is clearly culpable of copyright infringement and yet
she could be held by the jury liable for $100 million in
statutory damages, the courts are reluctant to apply the law as
written. So, that is why I am urging Congress to have a global
solution. At the same time that it reaffirms the making
available aspect of the distribution right, that it would cabin
statutory damages to a reasonable extent.
Ms. DelBene. And, do you agree with Professor Lunney's
statement earlier, that making the--or having explicit
reference to a making available right would cause economic
harm?
Mr. Nimmer. I am not positive which aspect of Professor
Lunney's statement you are looking at. But, I come at the
economics very differently than he does. So, suffice it to say
that it is a very interesting study. But, what it does not
illuminate is how much music would there have been created in
the last 10 years of lowering studio costs, had there not been
peer-to-peer illegal file sharing.
Ms. DelBene. And, Professor Lunney, do you think there is
any way to define a making available right more specifically
that wouldn't cause old cases to be reopened and the
uncertainty that you talked about earlier?
Mr. Lunney. Yeah, there certainly would be. If you just
want to affect it in the distribution, the peer-to-peer file-
sharing context, you could create a presumption that a work
that is made available in a share folder has been downloaded.
You could even make it a rebuttable presumption if the
defendant wants to come forward with evidence. But it will
never get that far. It never gets that far in any of the
existing cases. In the one case where it was raised, the Jammie
Thomas-Rasset case, she was found guilty of copyright
infringement the first time with a making available instruction
on the distribution right that was retried after the district
judge said, ``No, that is not right.'' She was still found
guilty.
Ms. DelBene. Thank you.
I yield back my time, Mr. Chair.
Mr. Coble. I thank the gentlelady.
The gentleman from California, Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman.
And, Ms. Griffin, I asked a lot of documents be placed in
the record earlier. And most of them are related to the
gentleman next to you, Mr. Malamud.
It is an amazing thing to me that I came from a standard
setting organization, Electronics Industries Association and
CEA. And you couldn't have a high definition television, if we
hadn't figured out what the standards were going to be. We
wouldn't be arguing over capturing over digital broadcast, if
we didn't have digital broadcast. Standards are extremely
important.
But, standards and laws are different. And I would like to
concentrate somewhat on this end of the table.
Mr. Malamud, I am going to read, just a shortest part of
the Constitution for a moment, where it says to establish Post
Offices and Post roads, Post Offices are next door. And it
says, ``To promote progress,'' and I will skip over, ``of
science and useful arts,'' for a moment. And limit it to--and
of limited times, and I am just going to read how it relates to
copyright, ``To promote the progress, for limited times, to
authors.'' Okay? That is it. That is the Constitution. It is
only a paragraph, ``To promote progress of science and useful
arts by securing, for a limited time, to authors and inventors
the exclusive right to their respective writings and
discoveries.'' But that short one, ``To promote,'' ``to
authors.'' Who authors a law?
And that is my point. And it is the point of all of the
documents I put in. If the State of Idaho, the State of
Georgia, the State of Mississippi, if they produce a law, every
single person who voted for it is an author. It doesn't belong
to some entity, by definition. Isn't every law, in fact--and, I
have got to tell you, Obamacare has people who do not want to
be authors and others who, a few left, who do. But, on the day
that it passed we were all authors.
So, my question--and I am going to concentrate on this end
and then open it up to the rest--is, in its rawest form, isn't,
in fact, every single person who participates in the creation
of a law or the inclusion, by association, of a standard in
fact an author. And, therefore, if I am willing to have it
released to everyone, as an owner of that copyright and an
undivided owner, don't you ultimately have no possibility of
protection? In other words, the State of Idaho is inherently
wrong if they consider any part of a law required or mandated
to be, in fact, eligible for copyright.
And my point here--and Carl I am going to go to you first--
I have been in Congress for 13 years and about 8 days. The one
thing I know is I don't need a copyright to promote politicians
making laws. So, by definition, the ``promote'' being the basis
for copyright, don't we inherently have a decision to make
about whether or not laws or anything else which is included in
a law by mandate has any right to a copyright at all? A
fundamental--forget about what we do with this copyrighted
material, is it really eligible for copyright?
Mr. Malamud. Congressman Issa, thank you for that question.
I think that is the crux of the matter. The VEC Corp., when
it looked at whether the building code of Texas had the law,
said that there is no incentive needed for the----
Mr. Issa. Politicians will make laws, whether you----
Mr. Malamud. Absolutely.
Mr. Issa [continuing]. You just have to pay them per diem
and they will show up.
Mr. Malamud. And the standards bodies, I have never seen a
standards body object to one of their documents becoming
incorporated by law. That is often the case. I think that is
especially crucial on public safety laws. Now, we may
incorporate by reference too many things. And perhaps the
guidance of this Committee could be used on that topic. But,
for those that are crucial, for example the laws on testing the
toxicity of water, is something that every citizen in West
Virginia today wants to know, what those laws are and were they
carried out properly.
And I think that is the key point. You can't have it both
ways. If the document is in fact the law, it has to be
available. And I respect the rights of the standards bodies to
develop a wide range of standards, but once one of those has
become the law, then it needs to be available. Now, again, a
standards body can say, ``Please do not incorporate this into
law. We would prefer that this document not become the law.''
And that is perfectly acceptable. There are multiple standards
bodies. There are several fire codes, several building codes,
several plumbing codes and you will find immediately a group
standing up and saying, ``Please designate mine to be the
law.''
Mr. Issa. And, Ms. Griffin, I am going to ask you the
follow up that goes along this line, quickly.
What Mr. Malamud just said is what I am trying to make a
point on. If it is a voluntary standard, in fact it is
available for copyright. I understand that. But, if it is
incorporated into law, at that point, shouldn't you object to
it being incorporated or recognize that you are waiving any
copyright objections from the public having free and fair
access to, essentially, a law that they must comply with?
Ms. Griffin. Thank you, Congressman.
I think the answer is incorporated into OMB, the policy of
OMB A-119 and the NTTAA. And those policies and those laws
dictate that a government agencies, Federal agencies
incorporate voluntary consensus standards in lieu of
government-unique standards whenever they are able to do so.
Mr. Issa. Okay. But, OMB is nowhere enshrined in the
Constitution. And it does not have explicit legislative
authority. This is the Committee that must decide what can or
cannot be covered under the promote and exclusive element of
copyrighting. The rest of the panel is extremely important and
we work on it all the time. But, in a digital age, narrowly,
Mr. Chairman, the law and people's access to laws which they
must comply with. Inherently this Committee has to decide
whether that should be stripped of any and all copyright, to
the extent that we have authority, which has nothing to do with
what OMB thinks because, quite frankly, they think they can
make laws without Congress getting up in the morning ever
again. So, constitutionally, on what basis would you say that
that has any grounding? Not what OMB thinks.
Ms. Griffin. Well, let me tell you what the Second Circuit
in the 19-----
Mr. Coble. Ms. Griffin, if you could be brief--as briefly
as possible, his time is expired.
Ms. Griffin. Yes, but allow me to tell you what the Second
Circuit and the Ninth Circuit said on that very point. In the
PMI case that the Ninth Circuit said that, ``The due process
requirement of free access to the law may be relevant, but does
not justify termination of, and in this case it was the
American Medical Association's copyright. There is no evidence
that anyone wishing to use those standards at issue in that
case had any difficulty in obtaining it.'' And that was the PMI
case in the Ninth Circuit.
The Second Circuit, in a similar case in CCH Info, said,
``We are not prepared to hold that a State's reference to a
copyrighted work is a legal standard for valuation results in
loss of copyright. With--while there are indeed policy
considerations that support CCC's argument, they are opposed by
countervailing considerations. For example, a rule that the
adoption of such a reference by a State legislator or
administrative body deprived the copyright owner of its
property would raise very substantial problems under the Taking
Clause of the Constitution. Although there is, and I am jumping
to the last sentence of that paragraph, ``Although there is
scant authority for CCC's argument, Professor Nimmer's treatise
opposes such a suggestion as antithetical to the interests
thought to be advanced by the Copyright Act.''
So, at the end of the day, it is a balance. It is a balance
between the rights of copyright holders and the value that
those copyrights bring to Federal regulations. As----
Mr. Issa. Okay.
Ms. Griffin [continuing]. I said earlier----
Mr. Issa. Thank you.
And, Mr. Chairman, I appreciate your indulgence. And I just
want to go on the record that, in the copyright reform that we
are considering as a Committee, in order to have my vote on
final passage, we will have to rectify the ambiguity in the law
so that every American has free access to every law that he or
she must live under.
Mr. Coble. I thank the gentleman from California.
I thank the witnesses.
There will be ample time, after the hearing, for exchanges
between the witnesses and Members of the Subcommittee. So,
nobody is being shoved off abruptly. Shoved off, perhaps, but
not abruptly.
I thank the gentleman from California.
Mr. Jeffries, the gentleman from New York.
Mr. Jeffries. Thank the distinguished Chair and thank the
witnesses for their testimony.
I want to start with Professor Lunney and try and get some
clarity from or as it relates to some of your written testimony
on pages 6 and 7. Bottom of page 6 you state that, as has been
previously discussed, ``The purpose of copyright is not to
maximize the revenue of the music industry or copyright owners
more generally,'' is that correct?
Mr. Lunney. Yes, sir, I do take those statement from
Supreme Court decisions setting that forth.
Mr. Jeffries. Right.
Mr. Lunney. Repeat them.
Mr. Jeffries. Now, is it fair to say that copyright owners
or content creators are entitled to reasonable compensation?
Mr. Lunney. I think we would have to sit down and define
what ``reasonable'' is and that would be a more difficult task
than you might imagine.
Mr. Jeffries. So, you don't think--is it your view that
copyright owners or content creators are entitled to any
compensation whatsoever?
Mr. Lunney. No, it is not my view of that sort at all. And
I would be happy that they would be very well paid. My only
perspective is that, in terms of the constitutional purpose,
our focus should be on the production of output. Now,
obviously, a well-compensated artist and musician class is
probably important for long-run copyright output of creative
works----
Mr. Jeffries. Okay. Let us focus on the Constitution. I
appreciate that observation you just made. So, the relevant
provision, obviously, is Article 1, Section 8, Clause 8, which
reads, ``To promote the progress of science and useful arts by
securing, for limited times, to authors and inventors exclusive
right to their respective writings and discoveries.'' Now, the
progress of science part of that provision obviously gives
Congress, I believe, the ability to create a robust patent
system. Is that correct?
Mr. Lunney. It is actually, ``To promote the progress of
the useful arts,'' is for patent. Science is for copyright.
Mr. Jeffries. So, you have defined the--and what would be
the basis of that conclusion? Does that stem from your
evaluation of writings from the Founding Fathers? Or----
Mr. Lunney. The Supreme Court has said that on a number of
occasions. The clause has a parallel structure, ``To promote
the progress of science and the useful arts, for authors and
inventors, their writings and discoveries.'' Each of those
three pairs of words the first word is for the copyright, the
second word or phrase is for patent.
Mr. Jeffries. And so, the Supreme Court has defined this
standard, I believe, to encompass to legitimate ends, correct?
The first would be encouraging the creation of new works, is
that right?
Mr. Lunney. That is correct.
Mr. Jeffries. And then the second would be to encourage the
dissemination of existing works, correct?
Mr. Lunney. That is what the court said.
Mr. Jeffries. So now, as it relates to encouraging the
creation of new works, is it fair to say that providing
artists, content creators, with the opportunity to benefit from
the fruits of their labor in some meaningful way serves the
purpose of encouraging the creation of work?
Mr. Lunney. As a general proposition, I have no
disagreement with that statement.
Mr. Jeffries. Okay. And what would you disagree with, as it
relates to that statement?
Mr. Lunney. Well, it is always a question of how many
rights and how broad the rights need to be. Do we need to
address every specific instance? In the academy we talk about
leakage in the copyright system. That is instances where
individuals or companies copy and yet they are not sued or it
would not constitute copyright infringement. And this leakage
is a fairly important part of the system.
So, trying to determine whether any given instance of
copying, some are reasonably straightforward--I would agree, I
think we would all agree, that a commercial competitor who
takes a copy and sells it for less in the same marketplace is a
copyright infringer. I think we would all equally agree that
someone who takes Shakespeare's Romeo and Juliet and creates
West Side Story, would probably ought not be a copyright
infringer.
Mr. Jeffries. And am I correct that, you know, it is your
position, as it relates to determining the measure of what
happens when meaningful or reasonable compensation is not
provided, is that we should just simply allow for the illegal
dissemination or reproduction or sharing of works and then
evaluate whether content production has decreased? Is that your
position?
Mr. Lunney. No, I am not advocating sort of randomly
changing the law to see what happens. As a social scientist I
might be interested in that experiment.
But file sharing gave us an opportunity to see what might
happen. It was formally illegal, but it never the less happened
and revenue to the music industry, even considering all the
revenue sources they have, definitely went down. So, what
happened to output? And what does that tell us about whether we
had not enough copyright, too much copyright or just the right
amount? And, if revenue goes down sharply and your copyright
protection effectively falls and yet you seem to get as much or
more creative output, for me that suggests that we may have had
too much copyright to begin with.
Mr. Jeffries. Should we be concerned about the impact on
the economy, in that scenario?
Mr. Lunney. Well, that depends on what you mean by the
impact to the economy. For me as an economist, the fact that
some money doesn't flow to the music industry, it is going to
remain in the consumers' pockets, it is going to be spent
elsewhere in the economy. Jobs lost in the copyright sectors
will presumably be picked up, if consumers spend that money on
education or employment or healthcare, in those sectors of the
economy.
Mr. Jeffries. Lastly, Professor Nimmer, you referenced
earlier in your testimony that facts change on the ground. And
I believe you may have mentioned it in the context of
misinterpretation of a line in a treatise that you had
prepared, which preceded the development of Napster. We have
also seen the advent of streaming, cloud computing as another
example. Technology changes over time. That is a wonderful
thing. I think many of us would agree.
The issue is, you know, how do we accommodate technological
changes as they move forward but also create the certainty in
the law and the copyright protection for the creative
community? Do you have any words for us, on the Committee, in
terms of how to strike that appropriate balance, if that is the
balance we should be seeking?
Mr. Nimmer. I certainly do agree that it is the right
balance. At the end of my written statement I reproduced one
page from 50 years ago. It is from the Register of Copyrights
written in 1965. And it said, ``We don't know what the law will
be 10 or 20 or 50 years from now,'' and they are writing 49
years ago, but they said, ``It is becoming increasingly
apparent that transmission of works by linked computers may be
among the most important means.'' And the final statement was,
``We believe the day has passed when any particular use of
works should be exempted for the sole reason that it is not for
profit.'' So, those are very wise words to guide us as we go
forward. This was written at the culmination of 10 years of
study. And I think it beautifully encapsulates much of the
philosophy that needs to go in. So, that would be my watch word
for Congress on a going-forward basis.
Mr. Jeffries. Thank you.
My time is expired. I yield back.
Mr. Coble. Well, I thank the gentleman from New York.
Professor Lunney, I owe you a belated apology. I previously
mispronounced your surname. You are not looney. I stand
corrected.
Mr. Lunney. I always tell my students it rhymes with funny
and I am not crazy. [Laughter.]
Mr. Coble. And we will--and hold me harmless for my
mistake.
The gentleman from Georgia, Mr. Collins is recognized for 5
minutes.
Mr. Collins. Thank you, Mr. Chairman. I appreciate that.
And, Mr. Lunney, I think inadvertently you may have summed
up this entire discussion. From my perspective, and many in
this room know this, I believe that copyright protections and
other protections not only, at the proper balance, strike
innovation and help innovation, but also protect innovation and
grow apart.
And you made a comment in the midst of an exchange when you
said in--with my gentleman from Pennsylvania, you said, ``It is
just a poet.'' And that struck me and it might come strangely
to others. ``Just a poet''-- poets have changed the world. And
their words mean something. And their copyright protections
have meant something. And I think, for me, I think that sums up
this entire hearing, that there needs to be a proper balance
struck. But, when you just say, ``It is just a poet,'' ``it is
just a writer.'' Was Hemmingway just a writer? Was Dickens just
a writer? Was Clancy, even new, just a writer? That is the
heart of what we are talking about here today. And it was not
meant any way except you just sort of summed it up in an
offhanded way. But I think that is really where we are at
today. But, I am not with you. I am down here with Mr. Malamud.
I want to continue off the discussion that my friend from
California discussed, that is the definition of law. And we do
have an interesting complement here because I am from Georgia
and you have let us just say a difference. And I appreciate all
of what you do. I think what you do is really a service, a
public service.
I have a problem with where we are at right now, a little
bit, with what we are defining. And, in your letter to the
Senator McCune, Speaker Ralston approached him; Schaefer in my
State of Georgia, you said, ``The official code of Georgia
annotated, every component of it, is the official law.'' I want
to explore that a little bit. And I just have some short
questions so we can get to it a little bit more. What is an
annotation?
Mr. Malamud. An annotation can be anything from some
freelance editorial comment by some commercial provider to the
comments by the legislative counsel or the State itself as to
the import of the code.
Mr. Collins. Thank you.
Is an annotation a statute?
Mr. Malamud. Well, now, I am really glad you asked that
question because that actually comes to the crux of one of the
problems that we face and why I think this Committee might want
to deal with this issue.
I am just a computer guy. I am a law school dropout. I want
to put all 50 State laws online. If you go to the official----
Mr. Collins. Well, let us stop right there.
Mr. Malamud. Okay.
Mr. Collins. I have no problem there, the law itself. I
think the problem we are getting into is the definition. That
is why I said, ``What is an annotation?'' And, if you go to the
free public website, it took three clicks to get there on the
Georgia legislative page, of which I was a member for 6 years.
All you got to do is go. And you actually get the free Georgia
code annotated, in which it says the annotated code is
copyrighted. But, it makes specific reference to say that law
or any other recognized by the law is not copyrighted. It is
the work of the annotation, which is more than the law.
Mr. Malamud. But, Congressman, the terms of use of that
free site prohibit me from making a copy of that. They--it
specifically prohibits all public and nonprofit----
Mr. Collins. Well, what it prohibits you from doing is
taking a book and copying it and turning it in as your own
work. And when I was in school that was called cheating or
plagiarism or however else you want to describe it.
And so, I mean, I think that--look, the questions are
coming here--the annotation part is really where we are getting
here. And you make the claim, and I have read your book here,
and you made a comment. It says that, ``States such as Georgia,
Idaho and Mississippi,'' with all due respect to Idaho and
Mississippi I am not as concerned with them right now, ``Have
spread fear, uncertainty and doubt sufficient to throw a deep
chill on their order.'' Now, that makes great prose. And you
are a good author. And if you wrote the part of this, then you
should have it protected. [Laughter.]
Mr. Malamud. Although this is----
Mr. Collins. But if----
Mr. Malamud [continuing]. I actually copyrighted it.
Mr. Collins [continuing]. You put it out to everybody that
is your choice. Okay?
But you are not--and frankly, I believe you are being
disingenuous here, ``to throw a deep chill,'' when you can go
three steps and get it for free? I think that the part that I
am concerned about here is really it is the bigger step of
taking part of--which we all recognize the law, okay, the
statute--``Does the gentleman from California make,'' what we
vote on--that code, that actual non-annotated, non-commented
on. I mean, to say that an annotation is the law would be about
like taking this Committee memo and saying it is a part of the
Federal code. That is just not true. It is written by someone
else. It is input by someone else.
So, the question really comes, from me, is the way that it
was handled. You are just taking off--it is already free. The
issue was there. We have already discussed that. But there is a
part that is copyrighted because it actually was the work of
someone else. You are right. We need to make sure that
copyright laws, and as all these others have discussed, and in
the issues there needs to be a proper balance. I just believe
here, in this issue, especially taking the State of Georgia and
others and claiming that they are chilling innovation, they are
chilling this, I think is over the top to make a point about
something that is not really true. And that being that the law
itself we will not negotiate, that is part of the public
record. But, if I have somebody that if I have wrote my
annotation and I have done the work, then we respect the work.
We don't go out and say, ``Well, I have got the book. Let us
copy it. Send it up,'' just simply because I don't want to do
the work of annotation. And I think that is the problem I have.
And with that--we will have many more conversations. I
appreciate your work. I appreciate the rest of them being here.
But, I think that goes back to the heart of it here. If you do
the work, the protection is there, not taking a shortcut
because you just simply don't want to do the work.
Mr. Chairman, I yield back.
Mr. Coble. I thank the gentleman from Georgia.
The gentleman from New York, Mr. Nadler?
Mr. Nadler. Thank you, Mr. Chairman.
Let me start by thanking the witnesses for their testimony
and the Committee Chair for bringing these issues before the
Committee because I do believe that we have to do a better job
of protecting content owners, artists, musicians and creators
in making sure they are appropriately compensated for their
work.
But I want to ask more broadly about protecting copyright
today. Mister--Professor Lunney, you mentioned there is no need
to make explicit the make available right and that it would not
have an effect on curbing online theft. You mentioned that with
BitTorrent users, users are uploading and downloading
simultaneously and they are making thousands of illegal copies.
The law has already made this practice illegal, but it has not
stopped it, as we all know. Content owners have tried to chase
their works across the Internet, which is not practical, not
effective.
We heard Chairman Goodlatte mention that Google has now
received its hundred millionth takedown notice. And obviously
someone observed that the millennium--the Digital Millennium
Copyright Act is broken. What would you suggest, without
reprising SOPA or getting into that, as an alternative way to
protect copyrighted works on the Internet? Is there any?
Mr. Lunney. Well, I mean, a number of us in the academy
have explored the idea of having a levy where you----
Mr. Nadler. What?
Mr. Lunney [continuing]. A levy would be a system where you
authorize consumers to file share as much as they would like,
and then you add a charge to their Internet bill each month and
that money goes into a pot and it is redistributed to the
copyright owners whose works are being file shared. I am not
certain there is any other solution that is going to----
Mr. Nadler. Wait. Now, let me just explore that for a
second.
Mr. Lunney. Sure.
Mr. Nadler. You set up an ASCAP-type system, in effect,
like as we do for songs.
Mr. Lunney. Yes.
Mr. Nadler. Where you can download it, Google doesn't get a
takedown notice, but does note that you downloaded it. And you
pay into--well, who pays into this fund, anybody who goes on
the Internet?
Mr. Lunney. In a--it would basically be a surcharge added
to your Internet bill, would be one approach.
Mr. Nadler. I never listen to music, let us say----
Mr. Lunney. Well----
Mr. Nadler [continuing]. Why should I----
Mr. Lunney [continuing]. This is one of the central
concerns with the levy approach. It is unfair to people who do
not file share. But, it would be a mechanism for compensating
authors and copyright owners for the file sharing that is going
to go on.
Mr. Nadler. So, anyone who accesses the Internet would pay
a levy, which would be administered by some new organization or
old organization. And the funds would go, based on someone's
assessment of how many people listen to my song?
Mr. Lunney. Well, how the funds would be distributed would
have to be decided. But, we could use a--some sort of sampling
system, similar to ASCAP or BMI or the investigators that
currently tracks downloads in order to sort of bring actions to
get a subpoena----
Mr. Nadler. It is a very interesting--let me ask mister--
Professor Nimmer, what would you--how--what is your reaction to
this interesting suggestion?
Mr. Nimmer. My reaction----
Mr. Nadler. Besides saying that it is an interesting
suggestion. [Laughter.]
Mr. Nimmer. Yeah. Well, in that case, you have preempted my
first sentence. [Laughter.]
I put in footnote 69 of my written statement the citation
to Mr. Netenal's article called Impose a Noncommercial Use Levy
to Allow Free Peer-to-Peer File Sharing, and that is one of
many solutions Professor Lunney himself has written on the
issue.
The problem with these proposals, there are feasibility
problems, there are treaty compliance problems. So, I do not
wish to prejudge it at the outset. It is a fascinating vehicle.
It requires a lot of study. The devil is in the details, as
always. But, it is a completely different way of looking at the
issue and it deserves to be investigated.
Mr. Nadler. You said there are a number of others. Are
there other major suggestions available?
Mr. Nimmer. Yes, I think----
Mr. Nadler. Again, without getting into the whole mess we
had with SOPA.
Mr. Nimmer. Professor Fischer at Harvard has proposed
something that I will basically call an ``entertainment tax,''
where the government could decide how much money has been made
through all the arts and allocate that and allow free sharing
of culture. I am almost lampooning his book-length proposal.
But, in essence, that is what it is.
Mr. Nadler. It might be interesting, if you take out the
word ``tax,'' Professor---- [Laughter.]
Mr. Nadler [continuing]. Which has a certain ring around
here.
Professor Schultz would you comment on any of this?
Mr. Schultz. Yes. I think the levy idea is just a terrible
one.
Mr. Nadler. You said what?
Mr. Schultz. It is a terrible idea.
Mr. Nadler. Okay, because?
Mr. Schultz. You have the government--you are inviting the
government to set prices. And a fundamental concept in
copyright law, in any property right, is that the one--the
owner gets to decide the terms on which it is alienated. And,
when you take away that liberty, you take away, first of all,
the value of the price signal. We no longer----
Mr. Nadler. And this, your comment now, would apply to a
private ASCAP-type thing as well as to the----
Mr. Schultz. No, not to a private ASCAP thing, because to a
system like that people enter it voluntarily.
Mr. Nadler. Well, what would your comment on that be?
Mr. Schultz. So, in a system like that, sure. There are
plenty of collective rights organizations, when they are
privately entered into, they solve a lot of problems. But, it
is essential they remain private otherwise the government----
Mr. Nadler. Okay.
Mr. Schultz [continuing]. Determines the price----
Mr. Nadler. Before my----
Mr. Schultz [continuing]. A file----
Mr. Nadler [continuing]. Before my----
Mr. Schultz [continuing]. Might receive.
Mr. Nadler. Okay.
Mr. Schultz. It----
Mr. Nadler. No, no, no.
Mr. Schultz. Yeah.
Mr. Nadler. Mr. Love or Professor Love wanted to comment.
Mr. Love. I mean, we have had a long history of use of
compulsory licenses where markets aren't really functioning
very well and often connected with new technologies. So, I
don't think it is really beyond pale that you move to some kind
of a compulsory licensing. And this is--the twin issues, you
touched on the issue of how you pay the money out. I think that
the first instance people look at is the sort of sampling thing
that Professor Lunney has referred to, in terms of
distributing. A different approach is to have the consumers be
able to pick the collection society that they think rewards the
artist in the way that they prefer. So that, in effect, the
consumer is, in a way, becoming kind of a patron of the arts.
Mandated to be a patron, but----
Mr. Nadler. We have several operations doing similar things
and the consumer chooses one.
Mr. Love. Yeah, you would pick. Like, perhaps, one would
give all of their money to Madonna and Britney Spears, and
another one would sort of do it a little bit differently. And
you would be able to pick the entity that you thought supported
the art in the way that you preferred. That is called the Burn
Bland model, which is a different model than the sort of
sampling model. But there are these alternatives and they are
usually connected with some kind of----
Mr. Nadler. These sound like things, you know, to explore.
But, I see my time is expired.
I thank you all.
Mr. Coble. I thank the gentleman from New York.
The distinguished gentleman from Texas, Mr. Farenthold?
Mr. Farenthold. Thank you very much.
And, let me ask Professor Lunney, if we were to codify a
make available right, what would it do that we can't do
already?
Mr. Lunney. Well, in the file sharing context, as I said, I
don't think it would change what is going on in that arena at
all. If it makes it marginally easier to pursue file sharers, I
don't think it is the business decisions a new round of----
Mr. Farenthold. Well, let me ask Professor Nimmer. Other
than making it easier for a plaintiff, what other protection
are we going to provide creators?
Mr. Nimmer. It would--I think it would--the essence is to
make it easier for the plaintiff and thereby to comply with the
U.S.'s treaty obligations----
Mr. Farenthold. So----
Mr. Nimmer [continuing]. And to resolve conflict in the
case law.
Mr. Farenthold. So, how many bad-guy infringers are getting
away now that wouldn't be getting away, if we were to do this?
Mr. Nimmer. Obviously, I don't have the empirical figures
with me.
Mr. Farenthold. I mean, do you realistically think there
are any?
Mr. Nimmer. Well----
Mr. Lunney. No one who has been sued or brought into the
legal process that has gotten out, as far as I am aware,
because a download could not be proven.
Mr. Farenthold. All right and let us talk a little bit
about make available. We talk about it in a traditional upload
context. We say, alright you put it in a shared folder, you
have made it available. Well, have you made it available if you
link to it? Say you are Google and you are a search engine and
you haven't posted anything yourself, but you link to it. I
mean, a broad definition of make available--obviously, we could
craft the statute however we want. I mean, you could
potentially get, you know, non---what I would consider, non-
guilty parties there.
Professor Lunney?
Mr. Lunney. Well, the worst part in my mind is we wouldn't
know. If you adopt a broad, general making available right, we
wouldn't know until we litigated it whether linking would be
infringing or the----
Mr. Farenthold. Yeah. And so, would a broad making
available right, if I took my copy of, you know, the latest
Brad Thor novel I bought and read and donated it to the
library, would I be making that available? And have we
completely undermined the first sale doctrine there?
Mr. Lunney. In both the treaties and in the distribution
context, and I think Professor Nimmer would agree with me,
there is an exception where the making available right can
still be limited by the first sale doctrine or exhaustion.
Mr. Farenthold. And what about making available on a less
public basis? I have iTunes in my house and there is a shared
folder on there that I have made available to my television set
and to my other computer and probably my daughter's television
set and my wife's computer. You know, where do you draw the
lines within there?
Mr. Nimmer. Good.***
---------------------------------------------------------------------------
***Addendum:
---------------------------------------------------------------------------
The question posed relates to linking. Congress was concerned about
linking in 1998, when it drafted the Digital Millennium Copyright Act.
For that reason, it set up a special safe harbor for online service
providers, to immunize their linking activity from liability. See 17
U.S.C. Sec. 512(d). Clarifying the scope of the distribution right, and
its making-available component, would in no way affect the operation of
that safe harbor. Furthermore, addressing the statutory damages issue
could provide added insulation against disproportionate liability.
The danger here is in a standalone make available right.
And if Congress were to pass a new seventh right under
copyright, which is making available, all the dangers that you
have cited would face us. However, I believe we can avoid all
those dangers, including the danger of sharing with your wife
and daughter, if we simply define the copyright owners' public
distribution right to include making available. When you
include your wife and daughter, that is not an act of public
distribution, so you don't need to worry about the----
Mr. Farenthold. All right. I have got to--I want to hit
each of the topics here. So, I need to go to Professor Schultz.
You know, I am a former broadcaster and I understand how
tough it is for local broadcasters. But you look at something
like is going on with the Aereo case, don't the broadcasters
want as many eyes as possible viewing their newscast so they
have more value to sell to advertisers?
Mr. Schultz. Well, that is a good question. The advertising
revenue is one component of how they make a--how they
constitute their business. But, there are other components,
including the retransmission fees that are essential to
supporting local broadcasting.
Mr. Farenthold. And, you know, so I guess the other issue
then becomes, at what point to I have to negotiate a deal with
all of my local television stations to put a sling box at my
house so I can watch the Corpus Christi newscast when I am in
Washington, D.C.?
Mr. Schultz. You absolutely don't have to negotiate.
Mr. Farenthold. I just want to make sure it doesn't go that
far.
And then let us--let me go down here to the other end of
the table, real quickly speaking. And I am going to have to
agree that once something is enacted and is in a law, the
public ought to have a right to get to it free. Don't the
standards setting organizations, Ms. Green, collect membership
dues and generate revenue from the members who participate?
I mean, I understand, in the old days, it cost money to
print up the books and distribute it. But, now the marginal
cost of making this information available over the Internet is
basically none. And there is zero value to some of these--to a
light bulb that doesn't fit the light bulb standard, to use
your analogy. Shouldn't the private sector that benefits from
these, pay for them, and the public should have them free. Why
shouldn't I be able to print out a copy of the electric code to
make sure the electrician hooked the green wire up to ground in
my house?
Ms. Griffin. Well, a couple of things. Thank you for the
question.
First, the SDOs have different business models. Many do
base their revenues on membership fees, but many don't. And
those that don't are largely not-for-profit, mission-generated
organizations that keep their barriers to entry low. That is,
they have low entry fees, they have low membership----
Mr. Farenthold. Right.
Ms. Griffin [continuing]. Fees for the very reason that
they can use the sales derived from--they use the revenues
derived from the sale of----
Mr. Farenthold. I see my time is expired. I would love to
sit down with you and we could probably debate this for an
hour. And it is actually something I would like to do, because
I do think it is important. That, you know, I think you may
waive your right to that, once you fight to get it enacted into
law or it gets enacted into law. It is something we can talk
about when we have more time.
So, Mr. Chairman, I will yield back.
Mr. Coble. I thank the gentleman.
There will be ample time for us to revisit this time and
again, I am sure.
Mr. Johnson, the gentleman from Georgia?
Mr. Johnson. Thank you, Mr. Chairman.
Mr. Chairman, I started practicing law about--well, back in
1980. And, in going into the law libraries of Georgia State
University to get ready for cases and to represent various
folks in my general practice, I recall coming upon doctor--or
Mr. Nimmer's books. And I can't believe that he is sitting here
looking as young as he looks. I thought he would be probably
about 90 years old by now.
But thank you for your contributions, sir.
And I have long supported strong copyright protections as
the backbone of innovation, creativity and public good. But,
materials created by the U.S. Government and State governments
do not deserve copyright protection, nor have they ever
received it. In 1980--in 1888, the Supreme Court held, in Banks
v. Manchester, that there has always been a consensus that
judicial opinions are in the public domain because the work of
judges binds every citizen, and is and should remain free for
publication to all. Since then, courts have continuously upheld
this understanding that the law, be it State or Federal, is in
the public domain. Section 105 of the Copyright Act reflects
this view, specifically denying copyright protection to
statutes and regulations.
At its core, this issue touches on the American ideal for
justice that we must know the laws that govern us. This right
is fundamental to the rule of law that underpins our democracy,
particularly when that concept of ignorance is no excuse
pervades our process. It is also central to upholding our
system of checks and balances, by holding Congress accountable
for the legislation it passes or fails to pass. As we review
copyright protection, in anticipation of the next generation--
or, excuse me, the next great Copyright Act, we must continue
to protect American's access to laws and justice by protecting
access to public materials in the public domain.
Mr. Malamud and thank you for appearing here today before
us. I want to take this moment to thank you for your work
making public law accessible and known. It is easy to take for
granted how important public databases are in our increasingly
digital democracy. Unless public documents are digitized and
available, they are often out of reach of many.
In your written testimony, sir, you note that you are
currently publishing official State and municipal codes. As a
former commissioner in DeKalb County Georgia, I appreciate the
importance of private citizens working to improve local
communities. What is the benefit of making bulk public data
available for municipal governments? And, I will add to my
comments the fact that, when you want to, if you are a citizen
of the State of Georgia and you want to go and look up a code
for a local political subdivision, it is very nice to be able
to go online and be able to get that information. But, what is
the benefit of making bulk public data available for municipal
governments?
Mr. Malamud. Thank you for your comments, Congressman
Johnson.
The issue we have with the Georgia code, as it currently
is, is you can't get the bulk data. You cannot go to the free
Web site and download the whole thing and make it better. What
happens when bulk data becomes available is volunteers, some
commercial operations, but often simply citizens will go in and
make the codes significantly more accessible, work on modern
platforms. This happened in the District of Columbia just
recently, in which the copyright was waived on the District of
Columbia code. Several volunteers came in and they have
developed a vastly better version of the D.C. code that informs
citizens in a better way. So, by having the bulk data
available, we encourage citizen participation in the process of
informing each other. And that is why we care so much about,
for example, the official code of Georgia.
Mr. Johnson. How have local governments responded to making
municipal codes widely available?
Mr. Malamud. We have had significant pushback at the State
level. At the city level they are welcoming us with open arms.
The City of Chicago, I recently stood up with some former staff
members from Congressman Issa, former Obama White House
officials, both volunteers. We stood up with the city clerk of
Chicago and unveiled a new Chicago code. San Francisco has
recently revamped their municipal code. There are about 2,000
municipalities that are about to have better municipal codes
available because of the efforts of these volunteers.
Mr. Johnson. Thank you.
My time is expired, so I will yield my remaining time back.
Mr. Coble. I thank the gentleman from Georgia.
I am told, folks, that there will be an imminent House vote
before--imminent, whatever that means. I hope we won't have to
detain our witnesses.
So, with that in mind, I recognize the gentleman from
Florida, Mr. DeSantis?
Mr. DeSantis. Thank you, Mr. Chairman.
Mr. Malamud, I am assuming you agree with the Veeck v.
Southern Building Code case?
Mr. Malamud. Absolutely.
Mr. DeSantis. I will come to that. What about the two
cases, the circuit cases, that--we have the amicus brief here
in our stuff that were discussed involving, one was the AMA
codes and the other was the used car Red Book. And, in those
instances, the courts found that there were copyright
protections. So, what is your opinion on those cases? Do you
agree with the outcome in those cases?
Mr. Malamud. So, I am not a lawyer. I am just a citizen.
But, my take on that is that the Veeck decision was about a
crucial public safety code that had been incorporated into the
law. Whereas the other cases were about like medical codes that
needed to be used by doctors. And it, to me, was--the
distinguishing factor was the extent that the public safety was
at stake. And also, if you look at the building code, they all
begin with a sample ordinance of incorporation, ``We the people
of--insert name of jurisdiction here--do hereby adopt this
code.'' So this was meant to be the law. And, to me, that is
the difference between those cases.
Mr. DeSantis. And so, you think that it does--just the fact
that government may have some type of administrative scheme or
program, that something is referenced, whether it is a Red Book
or something, you do see the distinction between those
situations and one in which the law is adopted verbatim from
one of the publications?
Mr. Malamud. When I post a public safety standard, I look
for one that has been explicitly and specifically incorporated
by reference, as opposed to casually. And, in fact, we look at
State codes and often they will mention something in passing
and we keep our hands off those. But, when it becomes part and
parcel of the law then, to me, the fact that it happened to be
an external document is no different than if the State had
authored that themselves.
Mr. DeSantis. And, Ms. Griffin, I guess, what is your
position on Veeck v. Southern Building Code? Do you think that
was incorrect?
Ms. Griffin. I think there is a sharper distinction to be
drawn between Veeck on the one hand and the two circuit court
cases that I cited on the other. Veeck was a very unique
situation and it was a case that was limited to very unusual
facts. In that case, the model code writer wrote the code with
the specific intent that it be incorporated word for word into
the law. It was, in fact, incorporated word for word into the
law. And the defendant in that case copied the law, qua law,
and not the model code. Under those circumstances the Fifth
Circuit said that the--as the law, that these--this content
loses its copyright protection. But, the court was quick to
point out that it was a very limited case, that it did not
apply to what they called ``extrinsic standards,'' that those
are standards that are incorporated by reference into law, like
the standards in the Second Circuit and Ninth Circuit cases.
And so, I think that that makes Veeck a very limited holding
and limited to its facts. How that might be decided today, it
is unclear to me.
Mr. DeSantis. Well, how--and I know they use these model
code in different areas of the law. How often do they just
adopt completely verbatim, like what happened with the Veeck
case, versus--I mean, obviously, legislators can use some of
these model codes as guidance. They don't have to adopt it all.
I mean, is that--that is more of a unique case, you are saying,
when you are adopting everything wholesale?
Ms. Griffin. Personally, I am not--you know, my
organization is not a standards developing organization. And I
don't have statistics at hand as to how it works. I know that
some code developers enter into cross licensing agreements, for
example with the governmental entity, such that the code could
be adopted but there is a cite in the regulation back to the
standards developing organization's Web site for the sale of
that. I think there are very different kinds and multiple
opportunities for dealing with that situation.
And I think that is one reason why NARA has said, in the
context of its recent evaluate of this, ``let us leave this to
the Federal regulators and the SDOs to come up with a way to
make access reasonable.'' Because, at the end of the day, it is
about access. And it is about whether the public has access to
the standards, not how much they cost or if they cost
something, but if they have access.
Mr. Malamud. May I very briefly, when the Veeck decision
was appealed to the Supreme Court, the Solicitor General came
in and suggested that the Veeck decision was good law and that
the Supreme Court should deny cert and the Supreme Court
followed the Solicitor General's recommendation.
Mr. DeSantis. Right.
So, Ms. Griffin, just in terms of, as these standards and
codes are developed by different associations or whoever is
involved with that, I guess what is the risk for the viability
of that without copyright protection?
Ms. Griffin. Oh, it is a huge risk to the standards
developing organization. If they were not permitted to derive
revenues from the sales of standards, then they would not be
able to fund operations. And those operations include, as I
said earlier: providing the administrative support for the
development of standards to ensure that all reasonably and
materially interested parties are sitting at the table, to make
sure that consumers are at the table. No one will pay for that
but the standard developing organizations who are mission-
related and not-for-profit organizations. And they are able to
do that how? By selling the standards and using the revenues.
If, by contrast, the government was to take that process
away, the government would have to provide that expertise. The
government would have to provide that administrative support.
And ultimately, the taxpayers would pay for that. So, I think
it would--the change would result in a very profound and
detrimental change to the way that standards are developed in
this country.
Mr. DeSantis. Thank you.
I think my time is expired and I will yield back.
Mr. Coble. I thank the gentleman.
The distinguished lady from California, Ms. Lofgren?
Ms. Lofgren. Thank you, Mr. Chairman.
I will be brief, because I want to make sure that my
colleague, Ms. Jackson Lee, also has an opportunity to
participate.
You know, as I have listened to some of these proposals, it
seems to me kind of interesting that people seem to have
forgotten our experience with SOPA just a year ago. I don't
think--and, I mean, if someone feels differently, please speak
up--that the American public's attitude toward SOPA has done a
U-turn in the year, you know, that has happened since then. And
the idea of the performance make available proposal really just
goes in the same direction we were going there. That is a non-
starter, in my opinion. I certainly value getting viewpoints
and academic discussion, but it is not going to happen.
I think one of the things that has been raised, that we
should review, is the issue of statutory damages. And when you
take a look at some of the really outrageous things that have
happened with statutory damages, I think of the case of the
single mother. The RIAA brought a case where a jury awarded
$1.5 million against this woman for downloading 24 songs with
no indication that she had ever even shared them, as a matter
of fact. Now that was reduced to 54,000 because of the
disproportionate nature of the statutory by the judge. But, to
have that kind of statutory scheme is irrational and it needs
to be changed.
And I think back also at the orphaned works discussion. And
I spent a long time trying to work on that and finally gave up
along with the other Members of the Committee because of the
intransigence of some of the participants. But, I think one of
the things we ought to take a look at, you know, is what the
damage that we did by extending the term, the copyright term.
We now have a copyright term that basically is a century and a
half. And we have aggravated the issue of orphaned works by
doing so. Unfortunately, you know, you wish you could go back
in time and undo some votes. And that is one I was convinced as
a, I think I was a freshman, that the WIPO Treaty required that
vote. And I now know that that was not the case. I wish I could
undo my ``yes'' vote on the Sonny Bono Copyright Term Extension
Act.
Finally, I think the real value of this hearing is the
issue raised about a standards and public law. I was going to
ask unanimous consent to put into the record the standard test
methods for lead in water, I don't need to do that because my
colleague, Mr. Issa, has already done so. But, it seems to me
very clear that you cannot have secret law. If you are going to
require people to adhere to a standard, that has to be in the
public domain. And I am sympathetic, I understand, you know,
there is a business model set up. But you can't allow the
business model to trump the rule of law.
And, you know, I am mindful of the discussion that we had
about publicly funded research. And we had a hearing here a
couple of years ago. And the nonprofit societies that are
basically funded by the--for their peer review process, which
is essential, by the publisher. And yet--and that is a business
model that actually was deleterious to the public's right to
have publicly funded research made available publicly. We have
now changed that. And I think, over time, the way we fund
nonprofit science societies is going to have to follow along
and change as well, because they do provide a useful model. But
you cannot allow that current business model to dictate the end
result, which is: if you incorporate by reference a document
that has to be part of the public record.
And the--and, if there is a fee for example, I mean that
assumes that the public doesn't have an interest. If I am a
contractor, you know, maybe I can afford to pay the fee because
I am going to make money, you know, on that. But there is a
public interest in this. It is not just the people in the
business. It is the public's right to know. Is this a
sufficient standard? Well, the only way you are going to find
out, is to have free access to it. And to put up a screen to
that, if it is a part of the law, is completely, wholly
inappropriate. I agree with Mr. Issa that there is no copyright
reform that we should support that doesn't resolve this issue.
And I have listened with great interest, as I say. I think,
although there is academic interest in this, certainly the
public spoke very loudly about SOPA and I don't believe we are
going to have the appetite to revisit that, either in our
copyright laws or, frankly, in the TPP negotiations that are
underway. You are right, we don't know what they are
negotiating. But, the leaks to WikiLeak are SOPA. And if SOPA
is in TPP, it is dead in my judgment.
With that, I see my time is expired and I yield back.
Mr. Coble. I thank the gentlelady.
The gentlelady from Texas, Ms. Jackson Lee.
Ms. Jackson Lee. Let me thank the Chairman and the Ranking
Member for the generosity of time.
And I want to associate myself with my colleagues. This is
an excellent panel and well-committed in this area and with a
lot of history in this area, as well.
Not enough time for our questions. I just want to go across
to every one. I know that you spoke to different issues, and my
colleague mentioned SOPA. I just want to get in this question a
yes or no. Do you feel that Congress should wade into your
particular issue of testimony today?
Dr. Nimmer--Mr. Nimmer?
Mr. Nimmer. Yes.
Ms. Jackson Lee. Professor Lunney?
Mr. Lunney. No.
Ms. Jackson Lee. Professor Schultz?
Mr. Schultz. Not yet.
Ms. Jackson Lee. Mr. Love?
Mr. Love. You should pay attention to the WIPO negotiation
on the Broadcast Treaty.
Ms. Jackson Lee. Is that yes or no?
Mr. Love. Okay, well----
Ms. Jackson Lee. I just----
Mr. Love [continuing]. Should you legislate--should you
change U.S. law in that area?
Ms. Jackson Lee. Yes or no?
Mr. Love. We don't even know what the treaty is yet.
Ms. Jackson Lee. All right.
Mr. Love. It is a----
Ms. Jackson Lee. Thank you.
Ms. Griffin?
Ms. Griffin. No, in the sense that has been suggested by
Mr. Malamud.
Mr. Malamud. Absolutely, yes.
Ms. Jackson Lee. Thank you very much.
Professor Nimmer, now Of Counsel, but I will always call
you Professor. In your testimony, you note a scenario where a
P2P user who goes to trial is helped somewhat by the fact that
a judge would feel that an award disproportionate with actual
damages would be inappropriate and thus making--might be
inclined to not construe the making available right in accord
with their actual feelings about the law. Could you please
elaborate on this? And I do have one or two other questions, so
I am going to go quickly. And what would be a just
recalculation of the statutory damages, so that Jammie Thomas-
Rasset does not face a multi-billion-dollar judgment?
And I want to ask Professor Lunney, could you expound on
your view of the broken window parable presented in Frederic
Bastiat's parable in English, ``that which is seen and that
which is unseen,'' if you can think of that?
And I do want, Professor Schultz, I know that my colleague
from Texas asked about Aereo, but if you could just expand on
it a little bit.
Professor Nimmer?
Mr. Nimmer. Yes. When Jammie Thomas-Rasset was--went to
trial, as has been noted, the award against her was at one
point $1.5 million. She had the option of settling. The
plaintiffs offered her a settlement that she could pay several
thousand dollars to a charity designed for musicians and she
turned it down. Because she had committed perjury and because
the trial was so egregious, the jury came and hammered her.
But, the question now, as I understand it, is what should be a
reasonable measure----
Ms. Jackson Lee. Right. That's the----
Mr. Nimmer [continuing]. Of statutory damages. And, it did
make sense, back in 1999 when Congress calibrated statutory
damages, to look at how many works had been infringed because,
at that point in time, it was not possible to infringe a
hundred or ten thousand works. It just was physically
impossible. Today with peer-to-peer, it is possible. And so,
Congress needs to look at what level of damage would be--would
cause deterrence and would compensate and would be somewhat
related to the harm. So, I don't--I did not come here with a
ready metric, but it could be several hundred dollars for each
and every copyrighted work that was implicated or it could be
$100,000 in any given lawsuit that is brought or another
measure that is somewhere within reason and does not get us to
the hundreds of millions of dollars.
Ms. Jackson Lee. Thank you. Some criteria. So, refinement,
clarity and determining how someone could be made whole.
Professor Lunney on your question please?
Mr. Lunney. Thank you for the question.
So, Frederic Bastiat writing in 1850 was explaining that
when the government creates a subsidy program for the arts, it
is not new money in the economy. They are taking that money
from consumers, through taxes, they are giving it to the arts.
There is going to be new employment in the arts. That is what
we see. What we don't see is that, by taking the money from the
consumers who go through taxes, those consumers won't have that
money. They can't spend it on something else. And so, the jobs
that are lost in those other sectors, because consumers no
longer have the money to spend in those other sectors, is not
seen and we tend to ignore it. But we shouldn't.
If you are just moving money in the economy from one jar to
another, creating jobs here, losing them there, there is no net
gain for the economy. So, if we could come up with a magic
formula, wave our wand and stop file sharing and restore to the
music industry some of the money it has lost, perhaps as a
result of file sharing, that would not be a net gain in jobs
for the economy. We would simply be forcing consumers to pay
more for music, they would have less money to pay for
everything else. And so, whatever jobs we gained from that
revenue in the music industry, we would lose elsewhere in the
American economy.
Ms. Jackson Lee. That is--let me just let Professor Schultz
go on the Aereo. Thank you very much for that Professor Lunney.
Professor Schultz, just a little bit more expansion on the
Aereo case.
Mr. Schultz. Absolutely. So, in Aereo you have a company
that--a single company distributing a TV signal to many
customers. That would seem to fit the definition of a public
performance. However, Aereo, through what they perceive as I
would suppose it is a loophole in copyright law, are using
really antiquated technology building an array of antennas for
each of their users and distributing the signal. And they are
not paying copyright royalties. They are not paying
retransmission fees. And you have to ask yourself, as between
the broadcasters and the creators versus Aereo, who has the
moral and economic right to distribute those signals and profit
from them. And I hope the Supreme Court rejects the
interpretation of the law that allows Aereo to do this. But, if
they don't, I hope this Congress will address that.
Ms. Jackson Lee. Mr. Chairman, you have been gracious in
your time. I think there are a lot of competing issues here.
And I think we have a great respect for our artists, a great
respect for broadcasters and a great respect for the posture
that Professor Nimmer has taken and many of you have taken. And
so, I thank you and look forward to more hearings on these
important issues.
I yield back my time.
Mr. Coble. I thank the gentlelady from Texas.
Mr. Conyers and I and other Members want to express our
thanks to the witnesses who have prevailed during this marathon
today. But, it has been a very worthwhile, balanced
presentation, it seems to me.
And as I said at the outset, I appreciate those in the
audience who have remained in its entirety. Your presence
indicates more than a casual interest in this very, very
significant issue.
This concludes today's hearing.
Thanks to all of our witnesses for attending.
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 12:41 p.m., the Subcommittee was adjourned.]
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