[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
COPYRIGHT ALTERNATIVE IN SMALL-CLAIMS ENFORCEMENT ACT OF 2017
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HEARING
before the
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 27, 2018
__________
Serial No. 115-69
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Printed for the use of the Committee on the Judiciary
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://judiciary.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
33-419 WASHINGTON : 2018
COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JERROLD NADLER, New York
Wisconsin ZOE LOFGREN, California
LAMAR SMITH, Texas SHEILA JACKSON LEE, Texas
STEVE CHABOT, Ohio STEVE COHEN, Tennessee
DARRELL E. ISSA, California HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa Georgia
LOUIE GOHMERT, Texas THEODORE E. DEUTCH, Florida
JIM JORDAN, Ohio LUIS V. GUTIERREZ, Illinois
TED POE, Texas KAREN BASS, California
TOM MARINO, Pennsylvania CEDRIC L. RICHMOND, Louisiana
TREY GOWDY, South Carolina HAKEEM S. JEFFRIES, New York
RAUL LABRADOR, Idaho DAVID CICILLINE, Rhode Island
DOUG COLLINS, Georgia ERIC SWALWELL, California
KEN BUCK, Colorado TED LIEU, California
JOHN RATCLIFFE, Texas JAMIE RASKIN, Maryland
MARTHA ROBY, Alabama PRAMILA JAYAPAL, Washington
MATT GAETZ, Florida BRAD SCHNEIDER, Illinois
MIKE JOHNSON, Louisiana VALDEZ VENITA ``VAL'' DEMINGS,
ANDY BIGGS, Arizona Florida
JOHN RUTHERFORD, Florida
KAREN HANDEL, Georgia
KEITH ROTHFUS, Pennsylvania
Shelley Husband, Chief of Staff and General Counsel
Perry Apelbaum, Minority Staff Director and Chief Counsel
C O N T E N T S
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SEPTEMBER 27, 2018
OPENING STATEMENTS
PAGE
The Honorable Bob Goodlatte, Virginia, Chairman, Committee on the
Judiciary...................................................... 1
The Honorable Jerrold Nadler, New York, Ranking Member, Committee
on the Judiciary............................................... 2
BILL TEXT
H.R. 3945, the ``CASE Act of 2017''.............................. V
WITNESSES
Mr. David Trust, Chief Executive Officer, Professional
Photographers of America (PPA)
Oral Statement............................................... 6
Mr. Matthew Schruers, Vice President, Law and Policy, Computer
and Communications Industry Association (CCIA)
Oral Statement............................................... 8
Ms. Jenna Close, Director of Photography, Buck the Cubicle
Oral Statement............................................... 9
Mr. Jonathan Berroya, Senior Vice President and General Counsel,
Internet Association
Oral Statement............................................... 11
Mr. Keith Kupferschmid, Chief Executive Officer, Copyright
Alliance
Oral Statement............................................... 13
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COPYRIGHT ALTERNATIVE IN SMALL-CLAIMS ENFORCEMENT ACT OF 2017
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THURSDAY, SEPTEMBER 27, 2018
House of Representatives
Committee on the Judiciary
Washington, DC
The committee met, pursuant to call, at 2:20 p.m., in Room
2141, Rayburn House Office Building, Hon. Bob Goodlatte
[chairman of the committee] presiding.
Present: Representatives Goodlatte, Smith, Chabot, Issa,
Gohmert, Marino, Collins, Buck, Handel, Nadler, Lofgren,
Johnson of Georgia, Jeffries, Cicilline, Lieu, Jayapal, and
Demings.
Staff Present: Shelley Husband, Staff director; Branden
Ritchie, Deputy Staff Director; Zach Somers, Parliamentarian
and General Counsel; and Joe Keeley, Chief Counsel,
Subcommittee on Courts, Intellectual Property, and the
Internet.
Chairman Goodlatte. Good morning. The Judiciary Committee
will come to order. And without objection, the chair is
authorized to declare a recess of the committee at any time.
We welcome everyone to this morning's hearing at H.R. 3945,
the Copyright Alternative in Small-Claims Enforcement Act of
2017.
I will begin by recognizing myself for an opening
statement.
Like all creators, copyright owners, large and small,
deserve to be compensated for their efforts. Thanks to the
growth of the Internet economy, a creator now has the ability
to distribute their works worldwide. However, this also means
that those who view intellectual property as something worth
stealing, also have a means to more easily distribute stolen
works.
Small businesses make up the majority of American
businesses, many of which are family-owned. They could be
farmers, restaurants, dry cleaners, or any number of other
professions. Just like larger businesses, they face issues that
need judicial resolution, such as nonpayment, breach of
contract, and other issues that directly impact their bottom
lines.
Fortunately, a robust State court system exists to address
business disputes. Larger companies and small businesses use a
variety of measures to reduce the chances of theft and
nonpayment, only turning to the courts when necessary.
Litigation in America is expensive, and is not for the faint of
heart. There are even State small claims courts for smaller
value claims.
However, for most intellectual property disputes, only the
Federal court system can hear legal disputes, and there is no
equivalent small claims process.
This has led to one category of American creators
frequently being on the losing end of intellectual property
theft, small intellectual property creators.
Visual artists have identified the lack of such a small-
claims process as a major detriment to their ability to hold
those who infringe their works accountable.
During the last Congress, there were two separate bills to
create a small-claims system for low-value copyright claims.
I am pleased that Congressman Jeffries has led the way this
year on combined legislation, and that he and his staff have
worked tirelessly with interested parties to incorporate a
number of major changes to the legislation in order to improve
its effectiveness and limit the ability of bad actors to abuse
it.
Earlier this year, the ranking member and I spoke about the
importance of this issue for small creators. And I am glad to
see that our colleagues have made so much progress.
Today's hearing will highlight all of this hard work and
identify any potential remaining areas of concern.
The committee's goal, which I know is shared by Congressman
Jeffries, is to implement an effective process for resolving
small-value copyright claims.
Just like owners of physical property, American creators
deserve a remedy when their intellectual property is used
without the appropriate compensation.
It is now my pleasure to recognize the ranking member of
the committee, the gentleman from New York, Mr. Nadler, for his
opening statement.
Mr. Nadler. Thank you, Mr. Chairman.
Mr. Chairman, 5 years ago, you spearheaded a comprehensive
bipartisan review of the copyright system that consisted of
careful, thoughtful analysis of various provisions of the
Copyright Code, as well as how the copyright system is working
for creators and users alike.
At the culmination of that review, a few areas of consensus
emerged, one of which was the need to reform the music
licensing system.
With legislation to address that issue unanimously sent off
to the President this week, we can move on to the next issue
calling out for action, namely the need to establish a small
claims court to resolve small dollar infringement claims.
A fundamental principle of law is that there is no right
without a remedy. But unfortunately, many copyright holders
today, particularly many visual artists lack sufficient
remedies to protect their rights.
This is because the cost of pursuing infringement claim in
Federal court, particularly for small creators, is far greater,
as much as 10 times or more, than the expected damages they
would receive in a successful suit, making it virtually
impossible to protect their works.
While the damages at stake in these infringement claims may
be small in terms of sheer dollar amount, even a few thousand
dollars in uncollected royalties would represent a huge loss of
income for someone like a photographer making just $35,000 or
$40,000 a year. And few attorneys will take a case when such
limited damages are at stake, because they would likely not
recoup their costs.
Even if the creator did successfully obtain judgment in his
or her favor, the total cost of litigation would likely dwarf
the damages awarded, making it a Pyrrhic victory, at best.
The CASE Act seeks to address this important problem.
This bipartisan legislation introduced by our colleague,
Representative Hakeem Jeffries, would establish a claims court
within the Copyright Office to hear a copyright suit seeking
$30,000 or less in total damages.
As envisioned by the CASE Act, this quote will be less
expensive and much easier to navigate, even without an
attorney, than Federal court. Based in large part on
recommendations from the Copyright Office which conducted an
exhaustive study of this issue, the bill would provide an
affordable means for small creators to vindicate their rights.
Although a small claims court would provide a more
conducive forum for small creators to file suit, the court's
limited jurisdiction based on the bill's fairly nominal damage
limit, as well as the reduced cost that would be incurred in
defending against an infringement claim, or in seeking a
declaratory judgment that use of a copyrighted work constitutes
fair use, should make it an appealing venue for copyright users
as well.
If, however, a defendant would prefer not to submit to the
jurisdiction of the small claims court, the bill allows such
defendant to opt out.
In recognition of certain concerns that are expressed by
some stakeholders, Representative Jeffries worked tirelessly to
refine this legislation, and as a result, now includes a number
of revisions suggested by these stakeholders, including the
organizations represented by two of our witnesses today.
These revisions include very heightened due process
protections and provisions intended to reduce potential abuse
of the system.
Nevertheless, some stakeholders still have certain concerns
about the bill. That is why I am pleased to be holding this
hearing today, so that we can better understand these concerns,
and, hopefully, find solutions that may be acceptable to all
stakeholders.
I am a proud cosponsor of this legislation, and I thank Mr.
Jeffries for his outstanding leadership on this issue.
I also want to recognize the efforts of Representative Judy
Chu, who introduced similar legislation in the last Congress,
as well as the other cosponsors of this bill.
I look forward to hearing from our witnesses, and I hope
that today's hearing will help us lay the foundation for
further action on this important legislation.
I yield back the balance of my time.
Chairman Goodlatte. Thank you, Mr. Nadler.
It is now my pleasure to recognize the ranking member of
the Subcommittee on Courts, the Internet and Intellectual
Property, the gentleman from Georgia, Mr. Johnson, and ask that
perhaps he could, at the conclusion of his remarks, yield to
the chief sponsor of the legislation.
Mr. Johnson of Georgia. I would be happy to do so.
Chairman Goodlatte. The gentleman is recognized.
Mr. Johnson of Georgia. Thank you, Mr. Chairman. This
hearing gives us an opportunity to examine the Copyright
Alternative and Small-Claims Enforcement Act, also known as the
CASE Act, which would provide copyright owners with an
alternative to the expensive process of bringing infringement
claims in Federal court.
The CASE Act is supported by all types of the creators,
including photographers, illustrators, songwriters, and
authors.
Currently, Federal courts have exclusive jurisdiction over
copyright claims. Federal litigation is expensive, and many
small creators cannot afford to enforce their rights.
The Copyright Office provided a detailed report on this
issue, and I thank them for their hard work, which has helped
us work towards a legislative solution.
Many of their recommendations are included in this bill. I
am happy that stakeholders have been in negotiations about ways
to further improve the bill. The most recent discussion draft
of the bill includes many changes that attempt to address
stakeholder concerns.
While I am aware that there are still remaining concerns
about the bill, I hope we can use this hearing as a way to
continue to work together on the issue.
I want to thank Congressman Hakeem Jeffries, Congressman
Tom Marino, Congressman Doug Collins, and Congresswoman Judy
Chu, as well as Congressman Ted Lieu for their work in putting
together what this bill is as it is introduced today.
I would now like to yield the balance of my time to the
author of this important legislation, Congressman Hakeem
Jeffries.
Mr. Jeffries. Well, thank you, Congressman Johnson, for
yielding. I thank the chairman, Mr. Goodlatte, as well as
Ranking Member Jerry Nadler, and my lead Republican sponsor,
Congressman Marino, as well as all of my colleagues who have
worked hard on this legislation.
Today, we are considering H.R. 3945, otherwise known as the
CASE Act, which would create a fair and balanced forum for
small creators to be able to vindicate their copyright under
law.
Copyright infringement is not a victimless crime.
Photographers, illustrators, visual artists, writers,
individual songwriters, musicians, all rely upon their creative
works in order to put food on the table and support their
families. But with every infringement, they lose an opportunity
to do so.
Unfortunately, under the current system, these creators are
given a right without an adequate remedy.
As reported in the Copyright Office report from 2013, many
copyright owners are independent creators who have very small
infringement claims, but these creators do not have the means
to vindicate their rights and protect their works from
infringement in an Article III Federal court system.
Survey conducted by the American Intellectual Property
Lawyers Association reveal that the median cost to pursue a
copyright infringement lawsuit, with damages less than $1
million, is approximately $350,000. The CASE Act would
contemplate providing a remedy for people whose infringement
claims do not exceed $30,000.
Between the burden of attorney and court fees and the delay
experienced, small creative artists and others who rely upon
their copyright works as their bread and butter, are left
without any vehicle or enforcement remedy.
The CASE Act will help fill this void by establishing a
voluntary alternative form for small copyright owners that will
enable them to enforce and protect their content in a fair,
timely and affordable manner, and would also afford respondents
the ability to do the same.
The forum will be headed up by a new entity called the
Copyright Claims Board, the CCB, housed within the Copyright
Office. It is designed to allow both pro se rights holders as
well as pro se respondents to obtain a fair proceeding.
With the simplified process, this does not require the
personal appearance of either parties, the board proceeding
would not only be advantageous for the rights holder, but also
would advantage pro se respondents as well, as but would not be
saddled with similarly high costs of District Court litigation.
Because either party can easily opt out, the CCB satisfies
the Article III and due process requirements of the
Constitution and many safeguards have been built in to ensure
that it will be fair and balanced, and above all else, it is
consistent with our Article I, Section 8, Clause 8
responsibility to make sure that we promote the progress of
science and useful arts in this context, allowing creators to
be able to vindicate their rights under law.
I yield back.
Chairman Goodlatte. We welcome our distinguished witnesses.
And if you would all please rise, I will begin by swearing you
in.
Please raise your right hand.
Do you, and each of you, solemnly swear that the testimony
you about to give, shall be the truth, the whole truth and
nothing but the truth, so help you God?
Chairman Goodlatte. Thank you. Let the record show that
each of the witnesses answered in the affirmative.
Our first witness is Mr. David Trust. Mr. Trust is the
Chief Executive Officer of the Professional Photographers of
America.
Our second witness is Mr. Matthew Schruers. Mr. Schruers is
the Vice President for Law and Policy at the Computer and
Communications Industry Association.
Our third witness is Ms. Jenna Close. Ms. Close is the
Director of Photography at Buck the Cubicle.
Our fourth witness is Mr. Jonathan Berroya. Mr. Berroya is
the Senior Vice President and General Counsel for the Internet
Association.
And our final witness is Mr. Keith Kupferschmid. Mr.
Kupferschmid is the Chief Executive Officer of the Copyright
Alliance.
Thank you. I look forward to hearing from all of you today.
Your written statement will be entered into the record in its
entirety, and we ask that you summarize your testimony in 5
minutes. To help you stay within that time, there is a timing
light on the table. When the light switches from green to
yellow, you have 1 minute to conclude your testimony. When the
light turns red, that is it. Time is up. And finish your
remarks. Thank you very much.
Mr. Trust, you may begin.
TESTIMONIES OF DAVID TRUST, CHIEF EXECUTIVE OFFICER,
PROFESSIONAL PHOTOGRAPHERS OF AMERICA; MATTHEW SCHRUERS, VICE
PRESIDENT, LAW AND POLICY, COMPUTER AND COMMUNICATIONS INDUSTRY
ASSOCIATION (CCIA); JENNA CLOSE, DIRECTOR OF PHOTOGRAPHY, BUCK
THE CUBICLE; JONATHAN BERROYA, SENIOR VICE PRESIDENT AND
GENERAL COUNSEL, INTERNET ASSOCIATION; AND KEITH KUPFERSCHMID,
CHIEF EXECUTIVE OFFICER, COPYRIGHT ALLIANCE
TESTIMONY OF DAVID TRUST
Mr. Trust. Thank you, Mr. Chairman. And Chairman Goodlatte,
Ranking Member Nadler, and members of the committee, it is a
pleasure to be here with you today.
I have been asked to speak on behalf of Professional
Photographers of America. We represent about 50,000
professional photographers, but in this particular instance, I
have been also asked to speak on behalf of hundreds and
hundreds of thousands of other small creators, including
graphic designers and illustrators and other photographic
groups that have joined together as a coalition of visual
artists. Together, they make up the majority of America's
copyright communities.
It is true that in terms of sheer number of creators,
copyright is much more small business than it is large. And
that is healthy. Our country's creative diversity is a good
thing; it is good for the economy; it is good for our society.
And fostering abroad and diverse range of creators is the very
foundation of copyright law.
But the diversity is only of value if we are able to
protect all of those creators. The harsh reality of copyright
in America is that it works for some creators, less for others,
and not at all for the majority.
The problem is in the remedy for copyright. As it stands
now, small creators who have seen their work used without
permission, or just outright stolen, have had one path for
relief, filing a lawsuit in U.S. Federal court. Of course, the
reality is that path is no path at all.
Nobody is going to sue in Federal court over an
infringement that averages well under $3,000. The math simply
works against most creators.
And let's remember, it doesn't have to be big money to make
a big difference. A $500- or $1,200 infringement can be the
difference in paying the mortgage, or healthcare, or food on
the table for the first family vacation in 5 years.
The truth is, visual artists have, for decades, felt
disenfranchised by America's copyright system, and for good
reason. Where there is no remedy, there is no protection.
Now, we realize that this is an unintended consequence
based on the evolution of copyright, and in particular,
technology.
Nobody made a decision to leave out small creators, but
with the CASE Act, we can make a decision to include them under
the same umbrella of protections afforded other creators.
If this supersonic, evolving-by-the-second, hyper-
competitive business environment we all live in teaches us
anything, it is that we will pay attention to the needs of
small businesses or we will lose them. And let me rush to point
out that being a real professional photography has little to do
with the camera and everything to do with the years of
training. The camera is perhaps the least of their tools.
I can purchase a really nice drafting table. It doesn't
make me an architect. Small creators dedicate years, decades,
even generations, honing a craft that enriches our lives.
And here is a significant side note. Listen to this. Less
than 5 percent of professional photographers regularly register
their work with the Copyright Office. Is it because they don't
value their work? Quite the contrary.
Research indicates that copyright and protecting their work
is one of the issues that keeps them awake at night. They don't
register because there is no viable remedy, which means 95
percent of possibly the largest class of copyright holder in
America never pays a dime into the copyright system.
Our system disenfranchises the majority of its consuming
universe. Small claims is the start to turning that around.
Are there concerns by others? I guess so, but it is hard to
understand why. We are Americans. We believe in the protection
of law.
If you make and sell furniture for a living, we protect you
from theft. If you make and sell electronics, cars, or
clothing, and sell those on Amazon or Etsy or eBay, we protect
you from theft. If you make and sell tacos from a truck around
the corner from the Rayburn Building, we protect you from
theft.
Why, then, would we not create a remedy, a small claims
process to protect hundreds of thousands of small creators who
beautify and enrich and add color to our lives.
Oh, and by the way, if someone doesn't like the idea of
participating in small claims, it is no problem. It is
optional, just opt out.
We depend on these creators, we need these creators. Let's
remember that when the Constitution what was drafted to include
copyright, there were no motion pictures or software or
networks. And don't get me wrong, we stand with all creators
and all creators deserve protection. But at the time of the
drafting of the Constitution, the copyright superstars were the
authors and illustrators and artists and composers and
songwriters, followed 60 years later by the first multimedia
creators, professional photographers.
Chairman Goodlatte and members of the committee, we all see
the work of these small creators almost from the moment we open
our eyes in the morning until we close them again at the end of
the day.
For decades, generations, these small creators have been
unprotected and underrepresented by our copyright system. We
are at a crossroads. I truly believe that we will stand with
our small creators or we will watch them disappear one by one,
and with them, the color and the life that they bring to our
world.
America's copyright system should be a beacon on the hill
for the rest of the world, and creating a small claims remedy
through the CASE Act puts us into position to become just that.
You are very gracious. Thank you so much for your time.
Chairman Goodlatte. Thank you, Mr. Trust. Mr. Schruers,
welcome.
TESTIMONY OF MATT SCHRUERS
Mr. Schruers. Thank you. Chairman Goodlatte, Ranking Member
Nadler, members of the committee. My name is Matt Schruers. I'm
the VP for Law and Policy at CCIA, which represents Internet
technology and communications firms.
Thank you for the opportunity to discuss this claims
proposal today. CCIA has a significant interest in properly
scoped copyright remedies. Our members play a critical role in
the existing creative landscape providing services, tools, and
platforms that enable and facilitate users' ingenuity
expression and creativity worldwide.
These technologies afford the instantaneous and often free-
to-the-user access, providing opportunities to reach out and
engage with audiences around the world in ways not possible
without the Internet.
A new remedy for copyright plaintiffs should be considered
in the context of the existing remedies available. That
copyrights already robust remedies could be underserving
plaintiffs is somewhat difficult to reconcile with the current
wave of Federal copyright litigation.
2018 research found that serial litigants filing shotgun
style, multiparty Doe claims frequently on pornographic works
accounted for nearly half of all U.S. copyright litigation from
2014 to 2016. That is thousands of lawsuits against hundreds of
thousands of potential defendants, many wrongfully accused.
But let me be clear, that we recognize troll plaintiffs are
not the plaintiffs about whom we are concerned today. However,
Title 17 remedies are available to all, and can be invoked by
both the most and least meritorious litigant, including those
for whom litigation is a business model.
So while litigating unauthorized literal use of visual
works appears to be the intended use case here, we are also
mindful of other potential plaintiffs. And the bill does
contemplate that trolls may utilize the small-claims process.
We could also anticipate small claims pertaining to
noncommercial digital uses of works. Whereas the DMCA currently
is often used to conclude such disputes, a small claims
tribunal might result in internet users and small businesses
customary, lawful, online activities becoming small claims
fodder, including disputes alleging potential secondary
liability and nonliteral infringement.
The noncommercial circulation of internet memes, commentary
on cultural and political matters, social media debates and
internet plagiarism accusations are not particularly suitable
nor worthy of Federal resolution, but those, too, could be
expected in a small claims process.
Users should not fear litigation for participating in
lawful online social media discourse. And businesses using
online platforms to reach their customers should not fear
another venue where they can be targeted competitors with
specious IP claims.
So while CCIA is not presently in a position to support
H.R. 3945 or the subsequent discussion draft, we appreciate the
opportunity to discuss the proposal. And I will note briefly
what CCIA regards as the most significant outstanding points.
As the written statement I have submitted describes in
greater detail, those points are the negative option, opt out
model of the process, the authority of the Copyright Office to
increase or remove the cap on the number of suits that can be
brought, as well as the size of statutory awards.
And permitting statutory awards without timely
registration, given the importance of registration data,
particularly to digital services in finding creators and
ensuring that they are properly compensated for their
creativity.
So in conclusion, CCIA believes that educational resources,
perhaps in the mold of PTOs and venture assistant center, and a
lower overall cost of registration, as well as efforts to
encourage, facilitate, and streamline the registration, would
facilitate better outcomes for copyright plaintiffs.
We share the committee's goals in ensuring that creators
have both the incentives and the tools to create and distribute
their creativity. And we look forward to working with you in
furtherance of that goal.
I am happy to take any questions.
Chairman Goodlatte. Thank you, Mr. Schruers.
Ms. Close, welcome.
TESTIMONY OF JENNA CLOSE
Ms. Close. Thank you.
Mr. Chairman, Mr. Ranking Member, and distinguished members
of the committee.
My name is Jenna Close, and I am a commercial photographer
based in San Diego, California, Congressman Issa's district.
I appear before the committee today on behalf of myself and
the American Society of Media Photographers, of which I am a
past national board chairperson.
I am here to express support for H.R. 3945, the CASE Act.
At the outset, I want to thank you and other members for your
interest in helping provide individual creators and small
businesses with the legal tools they need to protect their
creative works from those who use them without permission or
compensation.
I am not an attorney. I am not a copyright lawyer. I am not
here today to discuss legal specifics that are spelled out in
H.R. 3945. I am here to explain why individual creators like
myself are so frustrated when it comes to the operation of our
current copyright system.
Quite simply, we have a right to protect our creative
efforts under copyright law, but we are routinely unable to
enforce those rights because of the cost and complexities of
bringing a lawsuit in Federal court, the only place to bring a
copyright infringement suit today.
As an independent creator, I appreciate and believe in the
idea of copyright. I always retain my copyright in my contracts
with clients. At the same time, I do not routinely register my
works. I consider myself an intermittent registerer.
I would, however, register my images more regularly if
given a streamlined, reliable, and affordable path for pursuing
infringement.
Copyright registration is an investment in time and money,
and yet with the present situation, it is rare that there is a
positive return on that investment.
Regrettably, like so many other visual artists, my partner
John and I often find our works infringed, not only online, but
also in print.
We have even witnessed our photos enlarged as a backdrop to
a competitor's trade show booth, while our paying client was
rightfully using the same art work at the same trade show in
their own booth.
To help the committee better understand the scope of
infringements my colleagues and I face, I did a little
experiment.
A couple days ago I did a so-called reverse image search on
one of my most frequently infringed images. A reverse image
search involves uploading a photo to images.google.com. Google
then returns a list of every website on which that exact image
is found.
During this most recent search, I found a single image of
mine was being used without permission on 41 different
websites. Of those 41 websites, 18 were large companies. And
that does not include any print infringements that may be out
there.
Copyright infringement cost visual artists revenues needed
to keep their businesses in the black, and to provide for their
families. Our profit margins are often slim.
To give you some perspective, my business needs to bring in
$4,000 a month simply to be in the black. We typically bring in
from $5,000 to $8,500 a month or $60,000 to $100,000 a year.
From this, come the salaries of two owners and our many
expenses, which in the photography industry are not small.
Each year, our income fluctuates, and you can see how the
profit loss from just one infringement worth a few thousand
dollars makes a big difference in our bottom line.
I am convinced that copyright violations, and the inability
to reasonably pursue them, have bred frustration and ultimately
disregard for intellectual property rights.
Large entities are well aware that small creators like
myself are unlikely to sue, and if they do, that they are
easily bled dry of resources. It is evident in the cease and
desist letters that are ignored, in the emails requesting a
license fee that are never answered.
Why do visual artists so often forego legal action? The
answer is simple. Federal court litigation is too burdensome
and too expensive. The cost of bringing the suit alone would
likely dwarf any potential favorable verdict.
The reality of the system today makes infringement losses a
cost of doing business, and not one that many creators can
afford. The time to end this historic inequity is now.
As I see it, the CASE Act is our best shot at ensuring that
visual artists, for the first time, will be full participants
in the copyright marketplace.
I believe that if Congress enacts a small claims bill,
individual creators and small business people will participate
in great numbers. I know that I would.
The sponsors of H.R. 3945 and the Copyright Office deserves
much credit for their hard work developing this legislation and
bringing it to this critical juncture.
It is refreshing and inspiring to see that after
identifying a real world problem, Congress is addressing the
issue and considering this legislative remedy.
For those organizations that oppose or criticize this
legislation, I ask that you put yourself in my place. I have a
statutory right to protect my intellectual property, but no
effective mechanism for doing so.
How would you feel if you were in the same position?
This bill will directly benefit a class of people who are
crucial to your members' future business success.
Why would you oppose it? Thank you.
Chairman Goodlatte. Thank you, Ms. Close.
Mr. Berroya, welcome.
TESTIMONY OF JONATHAN BERROYA
Mr. Berroya. Thank you, Chairman Goodlatte, Ranking Member
Nadler, and distinguished members of the committee.
I appreciate the opportunity to appear before you today to
discuss the Copyright Alternative and Small-Claims Enforcement
Act of 2017.
My name is John Berroya, and I am Senior Vice President and
General Counsel at Internet Association, or IA.
IA represents over 40 of the world's leading internet
companies, and we support policies that promote and enable
internet innovation, and are dedicated to advancing public
policy solutions that strengthen and protect internet freedom,
foster innovation and economic growth, and empower people.
In this and other contexts, IA strives to advance the
interests not only of its member companies, but also the
billions of individuals and small businesses that benefit from
our member companies services and products.
Importantly, the people who rely on our member services
include countless individuals and micro businesses, who are
creators and users of copyrighted works that will be
potentially impacted by the proposed legislation.
We recognize the benefits that would accrue to these
communities from the ability to resolve small claims in a more
efficient and effective manner.
However, we are also mindful that bad actors will seek to
abuse any process created to achieve those benefits.
With that in mind, our goal today is to advocate for
changes that we believe would help ensure that the bill
minimizes opportunities for misuse and truly benefits
individuals, small businesses and entrepreneurs across all
industries in their roles, both as creators and as users of
copyrighted works.
To begin with, I would like to thank the bill sponsors, the
committee leadership, and their staffs, for the diligent work
that they performed on this bill.
I would also like to commend the Copyright Office for its
detailed analysis and report that have supported and informed
this legislative process.
The goals of the CASE Act are laudable, and to that end, IA
has demonstrated its support by engaging in detailed
conversations with committee staff and the bill sponsors over
the past 6 months.
We appreciate both the ongoing opportunities to share our
feedback with the committee, the changes that have already been
made to improve the draft text as well.
IA remains convinced that crafting a bill that is effective
and workable for all parties is an important goal, and we and
our member companies will continue to seek common ground with
other stakeholders on this important issue.
My testimony identifies a handful of remaining concerns
with the legislative draft that we look forward to working with
the committee to address.
Our three core recommendations can be summarized as
follows:
First, due process and fairness are fundamental to the
success of any legal process, and we have concerns about the
bill's opt-out process. We worry that it could, more often than
not, have the unintended consequence of helping rights holders
secure monetary damages against people who are just as small
and legally unsophisticated as the people the bill is designed
to protect.
To ensure that the bill protects all of the relevant
interests, we respectfully suggest that the text be amended to
require both parties to agree to adjudication by the CCB and to
provide a more robust appeals process.
Second, we believe that the current balance established by
Section 512 of the Copyright Act plays an essential role in
allowing platforms to respond to claims of infringement without
forcing them to play the de facto role of adjudicator of those
claims.
If the bill remains silent as to whether initiating a claim
through the CCB can be used to prevent online platforms from
restoring access to allegedly infringing material, there is a
risk that some rights holders will exploit that lack of clarity
and use this low cost, quasi-judicial process, to substantially
extend the amount of time that allegedly infringing material
remains unavailable.
Accordingly, we will suggest amending the bill to clarify
that the proposed small claims process does not interfere with
the operation of Section 512.
Third, and finally, allowing claimants who have not
registered their works in a timely manner to seek statutory
damages deviates from the longstanding copyright policy and
would give rise to unintended consequences.
As the Copyright Office has previously concluded,
encouraging registration advances several policy goals, by
making statutory damages available to all businesses regardless
of size, the current version of the bill can disincentivize the
registration of works, and inadvertently encourages parties to
bring cases before the CCB that would have been too risky to
file in an Article III court due to the unavailability of
statutory damages.
In prior discussions with the committee, IA offered
additional recommendations that would bring the proposed small
copyright claims adjudication process more closely in line with
other small claims courts.
Eliminating discovery and reducing the maximum of monetary
damage awards are two issues that we had raised. But for the
sake of brevity, my testimony focuses on the three core points
that I mentioned a moment ago.
In sum, IA believes that adopting these recommendations
would not only ensure the basic fairness of the process, but
would also make for a more workable regime for all of the
parties involved.
I hope that my testimony today will offer a useful
perspective, and I look forward to your questions.
Thank you.
Chairman Goodlatte. Thank you, Mr. Berroya. Mr.
Kupferschmid--I am sorry I am not getting your name right.
Please forgive me--welcome.
TESTIMONY OF KEITH KUPFERSCHMID
Mr. Kupferschmid. Chairman Goodlatte, Ranking Member
Nadler, and members of the committee, thank you for holding
this hearing and for the opportunity to testify before you
today to discuss the importance of H.R. 3945, the Copyright
Alternative and Small-Claims Enforcement Act, or the CASE Act.
I am Keith Kupferschmid, CEO of the Copyright Alliance, a
nonprofit, nonpartisan organization dedicated to advocating
policies that promote and preserve the value of copyright.
I testify here today in support of the CASE Act. For over a
decade, individual creators and small businesses have been
advocating for a change in the copyright law to address an
inequity that has routinely provided them with rights but no
remedies.
The CASE Act would make very targeted, very modest changes
to the copyright law to address this inequity, and give
America's creators the tools to protect the fruits of their
creativity.
The CASE Act is based on legislation recommended by the
Copyright Office. It would create a small claims tribunal
within the Copyright Office called a Copyright Claims Board, or
CCB, that can hear not only claims of infringement, but also
declarations of noninfringement, as well as counterclaims and
defenses like fair use.
The bill makes clear that what the CCB cannot hear are
claims brought against DMCA-compliant internet platforms for
the infringing acts of their users.
The CASE Act creates a much less formal, cost effective,
and streamlined process, than exists in Federal court. The use
of attorneys is optional and the process is so simplified that
it is unnecessary to retain counsel.
Proceedings will usually be conducted electronically so the
parties can participate remotely, and discovery will be
extremely limited.
The most important feature of the bill is that it is
completely optional. That is right, optional.
If a party doesn't want to initiate or to defend the
copyright case before the CCB, she can opt not to participate
in the process.
To the extent that anyone has any concerns with the bill,
the fact that participation is optional should address most, if
not all of them.
Another very important feature of the bill is that the CASE
Act dramatically limits an alleged infringer's financial
exposure by capping damages and prohibiting attorney fee
awards.
The bill provides that statutory damages for infringement
of one work cannot exceed $15,000, a limit for infringers that
is exponentially lower than the $150,000 recovery that is
permitted under existing law.
The bill also provides that the CCB cannot award a total of
more than $30,000 in damages in any one case, which is very
different than Federal law where there is no cap at all.
The availability of the statutory damages is essential,
given the difficulties of proving actual damages to limited
discovery rules, and the fact that most parties will not be
represented by counsel.
While some level of judicial review of CCB decisions is
appropriate, allowing these decisions to be subject to
extensive, overly broad judicial review in Federal court would
undermine the very purpose of the bill and destroy the
effectiveness of the CASE Act.
It would enable respondents to relitigate their case in the
very same Federal courts that they could not afford in the
first place.
The bill also contains a number of provisions designed to
help minimize the chance of judgments, and to ensure that the
CCB proceedings are not subject to abuse.
I would be happy to discuss each of these in more detail as
necessary. In an effort to get the bill passed this year, we
participated in negotiated sessions with the internet
Association and CCIA that was presided over by Representative
Jeffries and his staff earlier this year.
We listened to their concerns and drafted language with
them to address virtually all of them, even though we thought
most of the concerns were unfounded and changes to the bill
were unnecessary.
The only changes we did not incorporate were the ones we
thought were counter to the fundamental premise of the bill,
and that would destroy its effectiveness.
The resulting draft, which is referred to as the discussion
draft, incorporates numerous changes intended to address these
groups' concerns with the understanding that if we agreed to
these changes, IA and CCIA would be supportive of the CASE Act,
or at the very least, neutral. We are still waiting for them to
live up to their side of the bargain.
The CASE Act is a legislative priority for hundreds of
thousands of photographers, illustrators, graphic artists,
songwriters and authors, as well as a new generation of
creators including bloggers and YouTubers across the country.
Today, they have rights but no remedies.
The CASE Act will go a long way to restoring their faith in
the copyright system. We urge to you pass the CASE Act, and
look forward to continuing to work with the committee as the
bill moves forward.
I am happy to answer any questions.
Chairman Goodlatte. Thank you. We will now proceed under
the 5-minute rule with questions. And I will begin by
recognizing myself for 5 minutes.
Mr. Schruers, Ms. Close's testimony gives an example of
corporate infringement of a photograph at a trade show, what is
the concern there about opt-in versus opt-out?
Why should a corporate infringer effectively have free use
of a work by not opting in leaving an artist with no effective
remedy?
Mr. Schruers. Mr. Chairman, thank you for the question.
As I mentioned in my statement, remedies are going to be
available to all plaintiffs, and so while the presence of an
opt-out framework might be noncontroversial in one particular
context, we can't necessarily be certain that they would not be
problematic in all particular contexts.
And so, for example, some of CCIA's larger members probably
could relatively easily manage an opt-out process because we
already have a variety of copyright regulation compliance
obligations, and one more is not particularly difficult.
That doesn't necessarily go for noncommercial internet
users and small businesses who may well be engaging in lawful
uses of work, but are insufficiently familiar with the process.
It is worth noting that the general practice with DMCA notices,
which are fairly common now, is that users who are subject to a
notice frequently simply don't respond to the notice, their
content comes down, the rights holder, a putative rights
holder, gets a de facto injunction and the parties move on.
This actually changes the affected default action which is that
a party must respond.
And so, we are concerned that end users on the internet may
be unprepared for that kind of process, and not actually be
acting voluntarily in waiving a response.
And it might also have a knock-on effect on how parties
respond to DMCA notices, which arguably would not be a desired
outcome.
Chairman Goodlatte. Ms. Close, you want to respond to that?
Ms. Close. Parties already don't respond to DMCA notices,
and I just--basically, what I would like to say is I think that
there needs to be a coming together in a common ground to
determine infringement or not, that is fair for both parties.
So I believe that that would require somebody to come and
participate. That is all I have to say on that.
Chairman Goodlatte. Mr. Trust.
Mr. Trust. Yes. Mr. Chairman, I have to admit that I get
confused by the opt-in/opt-out discussion, by the concern with
opt-out. By definition, opt-out is optional. It is optional.
And so the discussion about opt-out and opt-in, to me, is a
little difficult when we have hundreds of thousands of creators
who are not protected under the current system. But the concern
seems to be that we are given infringers a responsibility--and
let's be honest, we are talking mostly about infringers here--
the responsibility for participating in some way. That is, to
acknowledge that there is an issue. To have just opt-in,
someone who is guilty of an infringement, who has taking
someone's work and used it----
Chairman Goodlatte. You would never hear a word from them,
right?
Mr. Trust. You would never hear anything from them. I mean,
they would just ignore it. Which, by the way, is exactly where
we are right now, right?
And so the only thing that actually makes this useful is
that opt-out provision.
Chairman Goodlatte. Come back to you, Ms. Close. Do you
feel that those who have infringed your works would ever opt-in
to litigation with you when they have already stolen your
images?
Ms. Close. Actually, yeah, I do think that they would. I
mean, I would hope that they would. I know that----
Chairman Goodlatte. Mr. Trust is suggesting that they have
ignored your right in the first place. They are also going to
ignore the notice, if they have to opt-in.
Ms. Close. Oh, if they have to opt-in. Oh, yes--excuse me--
yes, I don't think they would opt-in. I think that they have to
be held--I think they would have to opt-out.
If they opt-in, which is already where we are, it is
crickets. It is crickets out there. The DMCA notices have no
teeth. I can email people, and I get no response. I don't see
that changing.
Chairman Goodlatte. Mr. Kupferschmid?
Mr. Kupferschmid. If I may just quickly respond here?
Chairman Goodlatte. Sure.
Mr. Kupferschmid. So I mean, the difference between opt-out
and opt-in is all about getting a response. Having someone pay
attention. That is all the difference is, right?
So if we think if they pay attention, if they are required
to actually just look at it and read it and understand the
consequences of it, then we think they will participate in the
system. The problem is they don't do that. They look at it and
they go, I am an infringer. I am just going toss this to the
side.
We think the cap on damages, the no-attorney fee awards,
the streamline proceedings, and a bunch of other benefits that
this process has to offer are sufficient that they would
participate in the system, if they review. But right now, they
just ignore it. And that will continue if this is opt-in.
Chairman Goodlatte. Okay. Well, my time is expired.
The chair recognizes the gentlewoman from California, Ms.
Lofgren, for 5 minutes.
Ms. Lofgren. Thank you very much. This is a very helpful
hearing, and I appreciate that we are having it.
Obviously, there are some people who have written to us
that are not panelists. It is impossible to include everybody,
so I am not criticizing that, but I would like to ask that the
letters from Engine, from the Consumer Technology Association,
and a letter signed by the American Library Association, the
American Research Libraries, The Association of College and
Research Libraries, the Authors Alliance, Engine, and several
others be submitted to the record. If I may, without objection,
Mr. Chairman.
Mr. Issa [presiding]. Without objection, they will all be
placed into the record.
Ms. Lofgren. I will note, the questions posed I think are
thoughtful ones and need to be addressed in these letters.
I will note that the libraries point out, and they are
probably correct, that Rule 53(a)(1)(A) of the Federal Rules of
Civil Procedure would allow for a special master that would
actually serve the same function.
I would just note that that hasn't happened, which is why
the authors have moved forward with this. And I don't think
that is actually a realistic substitute for what is being
discussed here, although, I am sure the librarians advanced it
in good faith. I love librarians.
I do think there is value in having a small claims type of
proceeding, but I am also struck by the concerns expressed
about the amount of statutory damages and whether--I mean,
listening to your testimony, Ms. Close, which was compelling,
by the way--good for you--it wouldn't take very many damages to
equal your entire revenue stream for a year.
And so would that really be a disincentive for a firm your
size to actually register. And I think that is something that
needs--you know, a bill is the beginning of a process, not the
end of a process. I think that needs more discussion and to
flesh out.
I am concerned about the issues that have been raised with
trolls. And we have seen that in the patent environment, where
you can actually go in with not much of a case, and just keep
hitting people. And it is not the legitimate people, like you.
It is people who take advantage of it as a business model. And
I think we need to scrub this with that point of view, not the
legitimate people such as you, but how can this system be
abused. Because if you set up a system, somebody is going to
try and game it, and how are we going to prevent that from
happening?
I also am concerned, and maybe there is the--maybe we can
deal with this in defining how the opt-out is crafted. I mean,
you talked about some corporation stealing your stuff.
Presumably, you know, they are run by grownups. They have a
responsibility to respond. That is a different environment
than, you know, a teenager--I am not saying it is proper--but
on Facebook using an image.
The level of information, profit and abuse is completely
different. And how do you, you know, accommodate innocent use--
wrongful--but relatively innocent use by small parties in a way
that doesn't fuel the trolls that have been expressed. I also--
there is fair use issues, and I am concerned about how that
will be addressed in the proposed board.
And I will just give a personal example. My daughter has
twins. And the twins and my son-in-law were at a restaurant,
and music came on, and--they were 18 months old. They were
dancing to the music. It was really cute. And my daughter
posted it, because it was adorable. And Facebook took it down
because the music was in the background.
Well, that was fair use. I mean, it was a 15-second little
thing with cute babies and my son-in-law, but that is fair use,
and there is a rule for fair use. How are we going to ensure
that those findings in the board without an appellate provision
is consistent with what is being--what has--fair use is a
judicial doctrine. How do we keep the fair use judicial
doctrine in play with the copyright board when it hasn't
actually--there is no appeal from it?
So those are some of the questions that I have. I don't
think they can be answered today, but I think as we move
forward, perhaps we can have discussion with the authors, all
of you, and the other people who were not able to be witnesses
today, to see how those legitimate questions can be addressed
while still preserving the very, I think, very useful goal of
having a remedy that is accessible to artists--especially small
artists--to get compensation.
So I thank you all for your testimony and for letting me
throw my questions that there is now no time to answer out into
the public arena. And I know that Mr. Jeffries and I will have
a chance to discuss them further as well.
And I yield back, Mr. Chairman.
Mr. Issa. In the prerogative of the chair, Ms. Close, if
you had any response you wanted briefly, please.
Ms. Close. Yes, thank you. Briefly, I am not going to
address the legal stuff, but I would just like to remind every
that photographers, the ones that I know, myself included, the
ones that I have worked with at ASMP, we are not interested in
spending a ton of time dealing with this.
We are in this business because we love making images. And
certainly not--they say, if there is anything else you can
handle doing, you like doing, do that. It is not an easy
industry.
So I just want you guys to remember that in the context of
what we are looking at here. I honestly, and I am speaking for
myself personally, if you have shared something of mine on the
Facebook and you are just an innocent person, I am okay with
that. I am not--I don't have the time, interest, or inclination
to go after every tiny infringement.
I am talking about larger companies, larger people. I am
talking about major theft of my work. So I just want to put
that out there as you continue to discuss--and I appreciate
that you will continue to discuss this--that really what we
want to do is get back to our jobs.
Ms. Lofgren. Mr. Chairman, if I may ask for 30 seconds,
please.
Mr. Issa. Without objection.
Ms. Lofgren. I appreciate that, and I actually completely
believe you. It is just that when we devise these systems, we
have got to think about not you, but a schemer. How do we
prevent that? And, you know, unfortunately anything you build,
if it can be scammed, it will be scammed, so we need to think
in advance about that.
And I just want to make sure you know I wasn't questioning
your good faith in any way.
Mr. Issa. 10 seconds.
Mr. Kupferschmid. Just 10 seconds. Right now, if your
daughter wants to challenge that she has no remedy. She is not
going to go to Federal court for that. We create the CCB, she
could. She wouldn't need an attorney. She could say, Hey, wait,
this is fair use.
Ms. Lofgren. Actually, she is an attorney, but----
Mr. Issa. I would like to thank all of the attorneys in the
room.
I will note that currently, it does not opt-out
noncommercial use, so Facebook would be subject. So
notwithstanding the gentlelady's view that she wouldn't go
after it, I will say for one, there would be somebody who
would.
I am now going to take the prerogative and stay on this
side and go to the gentleman from Georgia, Mr. Johnson.
Mr. Johnson of Georgia. Thank you, Mr. Speaker.
Mr. Issa. Doug, do you mind? I didn't see you. I apologize.
No? Mr. Johnson. Go ahead.
Mr. Johnson of Georgia. Thank you. I will gladly yield to
my friend from----
Mr. Collins. I will go after my friend from Georgia. You
can go right ahead. I will be the next Georgia.
All I got to say is, Go Dogs.
Mr. Johnson of Georgia. Ms. Jenna Close, thank you for
taking your time and expending your resources, which is time
and money to come here and to testify on this very important
issue of concern to many people, small business owners like
yourself. You are really at the heart of our communities. Small
businesses collectively constitute the heart of our communities
in terms of commerce. And I appreciate what you are doing. And
I understand the struggles of being in a small business.
Is the image of your work that you talked about you saw
posted on those 41 websites, 13 or 11 of which were major
corporations, I think I heard you say.
Ms. Close. Eighteen.
Mr. Johnson of Georgia. How many?
Ms. Close. Eighteen.
Mr. Johnson of Georgia. Eighteen of the 41 are major
companies using your images for some commercial purpose, and
making money based upon exploiting your work.
Have you ever considered seeking redress in court for the
infringement of that particular piece of work?
Ms. Close. Honestly, I have not done that. And I will tell
you why. Ever since I started my business, I have been involved
with ASMP, so I have been a member of the national board for 6
years, 7th as an ex-officio, and 2 years as chair.
And during that time, I went to many board meetings where
we discussed the issues with copyright registration and
infringement.
And then as my time as chair, this was the number one
question that I fielded from members and had discussions with
members.
So I was aware of the limitations of what I could do----
Mr. Johnson of Georgia. In terms of how much it is going to
cost you?
Ms. Close. I can't afford it. It would bankrupt me.
Mr. Johnson of Georgia. Do you have any idea how much it
would cost to pursue one of these cases in court?
Ms. Close. In Federal court?
Mr. Johnson of Georgia. Yes.
Ms. Close. I have heard anywhere from $100,000 to a half a
million.
Mr. Johnson of Georgia. Now, the CASE Act would enable a
creator who did not register their work to obtain statutory
awards. Some suggests that this might enable abuse of the
Copyright Claims Board.
What reason might you or your fellow creators have for
choosing not to register a work with the Copyright Office?
Ms. Close. What reason would I choose not to?
Mr. Johnson of Georgia. Yes.
Ms. Close. Because registering my copyright is an
investment in time and money.
Mr. Johnson of Georgia. How much does it cost?
Ms. Close. Yes. And as a business person, I have to look at
whether this investment is worth my time and money based on the
return. And right now, it is not the case.
If I had an avenue where I could reasonably expect the
process, what was going to happen, I get to understand where
that investment was, I would register more frequently.
I am basically considering myself to register on principle,
because I want to believe that it is right and that it works.
But in all honesty, for me, it does not.
Mr. Johnson of Georgia. Thank you. Mr. Trust, what is the
average annual income of the artists that you represent, and
how does that compare to the cost of litigating a copyright
case in Federal court?
Mr. Trust. Well, for our members, it is $34,000 a year.
They work on average more than 50 hours a week. They earn about
$34,000 a year. And the idea, quite honestly, Congressman, of
litigating is something that they would think about but very,
very rarely actually undergo, undertake. And simply because,
and forgive me for the analogy, you know, we at PPA, and all
the associations, we sort of have our hands in the chest
cavities of these businesses, these small businesses. And they
are the chief production officer, chief marketing officer,
chief technology officer, chief executive officer, the chief
handyman, and the housekeeper at their various studios. They
are swimming as hard they can to keep their heads above water.
So the idea of stopping and, first of all, looking for
every infringement that is out there, and then trying to bring
those to Federal court in some way is just--they have the
opportunity to shoot and make money or to try to litigate. And
so the average cost is tens of thousands of dollars for
attorneys' fees, and then bringing that to fruition very often
averages more than $300,000 to $350,000 in Federal court.
Mr. Johnson of Georgia. How often are the artists that you
represent infringed upon, their work?
Mr. Trust. Well, I mean, I think that is the right
question, to be honest. Ninety-five percent say that copyright
is important to their success. Ninety percent say that they
have been infringed multiple times over the last 5 years, 90
percent. I mean, it is not something that they don't
experience. And this is one of the things that keeps them awake
at night. They put this right at the top of their list,
Congressman, in terms of what worries them.
Mr. Johnson of Georgia. How frequently do these artists
that you represent go to court to actually seek redress?
Mr. Trust. You know, forgive me for not having a specific
number. I can tell you very, very rarely. Well, first of all,
about 3 percent register their copyright. So you have to do
that before you are going to Federal court. And so it is
extremely rare when a photographer is able to go to court. They
don't not register because they don't value their work; they
don't register because, if they do, there is no way for them to
actually pursue it anyway. They basically would have to stop
business. They would have to stop shooting. They stop
marketing. Stop production. Stop everything to try to pursue
this one case. It is just too much to ask of small creators, we
think.
Mr. Johnson of Georgia. So a right without a remedy is like
an illusion?
Mr. Trust. The right without--I mean, I think that there is
a right without a remedy. I am sorry, is that what you are
asking?
Mr. Johnson of Georgia. Yeah. A right without a remedy is
like an illusion.
Mr. Trust. There is no protection there, you are right,
Congressman, and that is the problem.
Mr. Johnson of Georgia. I yield back.
Mr. Issa [presiding]. The gentleman's time has expired. But
on that note, we close with a high note on a right without a
remedy.
And now we go to the other gentleman from Georgia, another
go dawg.
Mr. Collins. There we go.
And there are some of us in here who want to find a remedy.
So this is something that I appreciate being an original co-
sponsor of the CASE Act, and I think it is very important for
small creators to have this level playing field.
My friend, Hakeem, and I have--we have sort of taken up
this cause a little bit over time, and I appreciate him
bringing this forward. Along with Reps Marino and Chu and
Smith, we have been working on this bill, and I do believe
there is a path forward. And I believe there is a path forward
that all sides can come to an agreement on. And this is some of
the things that I want to focus on just for a moment, and
especially Mr. Berroya and Mr. Schruers, if you could help from
the computer side and from the internet side.
We have been working on this. The discussion draft makes a
lot of changes or makes many changes to address issues that
were flagged that you all have flagged because there was a
concern. One I have is what do you think of the provision that
would limit the number of claims filed in 1 year? Mr. Schruers?
Mr. Schruers. I am happy to take that first.
Mr. Collins. Yeah, you first, and then----
Mr. Schruers. Thank you for the question. As my written
statement explains in greater detail, that is a valuable step
forward. It was not a change that CCIA recommended, but it was
put forward in an attempt to respond to concerns about trolls
that had been raised.
One of the characteristics of IP troll litigation is the
extensive use of proxies, assignees, and other shell entities
to avoid identifying the real party in interest. And so while
we think that is a step forward, some provision that would
strengthen that--the prohibition so that the real party
interest cannot be disguised so that the cap could not be
circumvented by assignment or other use of proxies would be an
important change.
Mr. Collins. Mr. Berroya.
Mr. Berroya. Thank you, Mr. Congressman. I would echo Mr.
Schruers' response, and in addition to that, while the
provision that you referenced is helpful in addressing
trolling-type behavior, one of the key concerns that I outlined
in its testimony is the importance of protecting small players
on both sides of the V, if you will.
So imagine, if you will, a grandmother who is, you know,
living in Boca Raton and she supplements her retirement income
by embroidering versions of iconic photos onto pillows, and she
sells them, and that is the business that she uses, again, to
supplement her retirement income. If the bill is opt-out, as it
is currently drafted, the provision that you are referring to
doesn't help her if through the opt-out process she doesn't
understand what is being put in front of her.
She gets a letter from a board that she has never heard off
in Washington, D.C., she thinks maybe it is a scam or just
ignores it altogether. She ignores the second notice. And then
months later, she finds herself on the wrong end of a $30,000
judgment against her that she doesn't have an adequate way of
appealing in a Title III court. So that is the person and the
type of respondent that we are worried about in this----
Mr. Collins. Okay. And I get that for a little bit, but I
am going to stop here because I want to ask this question.
There are a lot of other questions we are going to ask here,
but I think what we are hearing here is what really concerns
me, and Ms. Close and all of you as we have been working this
from, is when it comes to this bill, what I have heard a lot in
my office and I have heard from sort of both sides, but also
the side, frankly, saying that it is maybe not needed, is I
hear a lot of hypotheticals. Well, hypothetical--and I don't
disagree with your hypothetical, they could be--well, for those
of us who went to law school, we suffered 3 years of
hypotheticals. And, you know, some of us are really just tired
of hypotheticals. Because in this room today there is not a
hypothetical. There is Ms. Close.
How many of you in here are creators in this room, who come
here to support it? These are not hypotheticals. These are real
people who have real issues with real infringement on their
work. And for us to come back and to find a solution so that
they can have a place, that they can have a regress, where they
can have a remedy, where they can have something, we are always
going to find--and one of the things that is great in
Washington, D.C., is we will always find the hypothetical that
says you can't. I am about finding hypotheticals that says
those that create mean something and those that create have
value and have infinite worth. And we need to make sure that we
protect all sides. But also, if we ever get to the time to
where the hypothetical wins out over the creator, then the
creator is dead. And that is what we got to fight about.
So I appreciate everybody coming to the table today. I am
looking forward to moving this. I think this is a great
legislation that Mr. Jeffries and I have worked on. He has been
champion on it. I appreciate so much his passion on this. But
at the end of the day, for those who know me and know Mr.
Jeffries and know others on this bill, we are looking for
solutions. And if a hypothetical gets us to a solution,
wonderful hypothetical. If a hypothetical is simply a roadblock
in the way, it is time for a bull-dozer.
Mr. Chairman, I yield back.
Mr. Issa. The gentleman yields back.
We now go to the gentleman from New York, Mr. Jeffries.
Mr. Jeffries. I thank my colleague, Mr. Collins, for his
tremendous leadership on a whole variety of issues we have
worked on together, and certainly as it relates to the CASE
Act.
Mr. Schruers, I wanted to start by trying to just explore
some of your concerns and get an understanding about your view
on the progress that has been made. I noted that there was an
expression of concern as it relates to copyright trolls. And in
the original version of the bill, there was no limit on the
number of cases that can be filed by a single party, true?
Mr. Schruers. I believe that is the case, yes.
Mr. Jeffries. And in the current discussion draft, there is
a limit of 10 cases that a claimant can file per year, which
directly addresses the copyright troll issue, correct?
Mr. Schruers. I understand that that is the intention. It
may not, insofar as I explained in the previous answer, that
the limit could be circumvented as we have seen in the patent
context.
Mr. Jeffries. It represents meaningful progress, true?
Mr. Schruers. I think it is a step in the right direction,
yes.
Mr. Jeffries. Okay. The original version of the bill
included a provision to award attorney's fees of up to $5,000
when claims are brought in bad faith, correct?
Mr. Schruers. I would have to review the original version,
but I am willing to take your word for it.
Mr. Jeffries. Okay. Now, the discussion draft changes that
bad-faith penalty so that there is no ceiling on the cost in
attorney's fees that can be awarded under extraordinary
circumstances. Does that meaningfully address a concern
relative to copyright trolls?
Mr. Schruers. Thank you for the question. I think that is a
very valid observation, which is that in extraordinary
circumstances, a defendant can receive more than either 2,500
or 5,000 for bad faith. I think it is notable that that
statutory limit is significantly lower than what plaintiffs get
without any proof of injury for statutory words----
Mr. Jeffries. Well, reclaiming my time, just because I have
limited time. Is it a step in the right direction, to use your
language?
Mr. Schruers. I think it would be if it were properly
framed. I do think there are some changes there that should be
considered for equitable purposes, both for victims of abuse as
well as victims of infringement.
Mr. Jeffries. Now, with respect to the opt-out regime
versus the opt-in regime, in the original version of the bill,
a party had to opt out every single time he or she was served
with a notice, pursuant to the small claims system, true?
Mr. Schruers. I believe that is the case. I will take your
word for it.
Mr. Jeffries. Okay. But the discussion draft now provides
for a blanket opt-out that would allow parties to preemptively
opt out by filing with the Copyright Office a singular notice
that they do not wish to participate. Is that correct?
Mr. Schruers. Yes, it is.
Mr. Jeffries. Do you think that that singular notice is a
step in the right direction?
Mr. Schruers. I believe it is something that would be used
by larger and business entities who were aware of this. I don't
think that would find particular uptake among the individual
users that we have been discussing in parts of this.
Mr. Jeffries. Okay. But your trade organization, as I
understand it--and I respect your organization and respect
those companies, the Internet Association, represent Amazon,
Pinterest, Facebook, Google, e-Bay, Twitter. I understand that
we are talking about hypothetical possibilities related to a
grandmother in Boca Raton, but I would rather deal with the
real world. And the real world is, I think, your companies
clearly have the capacity to opt out in a singular notice
without that presenting any real burden, true?
Mr. Schruers. As my written statement says in greater
detail, yes. That is something that larger business entities
could likely take advantage of.
Mr. Jeffries. Okay.
Mr. Schruers. The individual internet user constituency,
which is not here today, for whom I am unwilling to speak,
other than indirectly as providing them services, are unlikely
to do that, and indeed, may not be in a capacity to take
advantage of that framework.
Mr. Jeffries. Okay. But you are saying you don't have the
capacity to take advantage of that, but I think many of the
companies--again, companies that I respect, Pinterest, for
instance, as an example, you know, has what will be called by
some a contract of adhesion, right. To participate in
Pinterest, you basically have to acknowledge that if you are
unable to resolve a dispute informally, we agree to resolve any
claim, dispute, or controversy arising out of or in connection
with, related to the terms, through binding arbitration.
And so I guess what I am concerned about is, I get all of
this due process language, and it sounds flowery and it is
beautiful. But with respect to many of the companies that you
represent, you have these contracts of adhesion where the same
internet users that you are saying you are here before the
committee to defend are waiving their rights to participate in
the Article III Federal court system. So it becomes a little
difficult, I think, for many of us to take some of these
concerns as seriously as they are being projected. Because at
the end of the day, what we are really fundamentally talking
about is that you have a situation that has been set up,
consistent with the United States Constitution, Article I,
section 8, clause 8, which talks about promoting the progress
of science and useful arts, which includes visual artists and
photographers and authors and others, who the Founders
understood was important for them to have a right to vindicate
that should be allowing them to benefit from the fruits of
their labor and, therefore, share it.
I would just ask the gentleman for 30 seconds.
Mr. Issa. I am afraid they are going to call votes in just
a moment. If you could wrap it up in 10, I would appreciate it.
Mr. Jeffries. Okay. So let me just simply say that all we
are trying to do here is you have a notice and take-down remedy
that is inefficient that is not working on the one hand and you
have an Article III court system that is out of reach. And we
are just trying to provide the creative middle class, small
business, women and men throughout America, consistent with the
United States Constitution, the ability to pursue the rights
that they have been granted.
I yield back.
Mr. Issa. I thank the gentleman.
We now go to the gentleman from Texas, Mr. Gohmert. Please
stay within your time.
Mr. Gohmert. Have I offended by going over my time?
Mr. Issa. I love you, Louie. I just want to get to my time
before the vote. Go, please.
Mr. Gohmert. Okay. I know we have got some differing
opinions with regard to copyright trolls and the potential
abuse. And the word ``troll'' seems to be a popular one when it
came to patent and was used to push through legislation a
couple of times, it didn't really affect the patent trolls. But
I am curious, Mr. Kupferschmid, give me your opinion about how
we stop copyright trolling but allow people to defend their own
copyrights.
Mr. Kupferschmid. Thank you very much for the question.
Let's assume that there is a copyright troll problem for the
purpose of the question. There are, in the bill, numerous
safeguards to prevent copyright trolling. I will go through
them.
One, it is optional. The whole system is optional. You
either can opt out on a case-by-case basis or blankets of----
Mr. Gohmert. When you say you, the second person----
Mr. Kupferschmid. The respondent. Sorry. The respondent
can--they think this is a copyright troll, they go, no, thank
you, and the case goes away. They opt out.
Number two, there are penalties for bad faith and frivolous
claims that are severe. Attorney's fees, not only up to 5,000,
but in extraordinary circumstances can exceed $5,000. You can
get banned from use--sorry, the claimant, the copyright troll,
can be banned for 1 year from using the CCB if, in fact, they
have been found--for trolling. Not only that, every case that
they have pending before the CCB would be dismissed. That is a
lot of money that they would lose.
There is a cap on damages, perhaps most importantly. That
prevents trolls from making threats of massive unpredicted
copyright damages in an effort to extort cash settlements. That
is five by my count so far.
Number six, there are limits on the number of cases that
can be brought. You can't bring more than 10 cases in a year, a
particular claimant.
None of these restrictions exist in Federal court. Why they
would go to the CCB and not go to Federal court is beyond me.
Also, trolls would lose money. If people opt out, they lose to
filing fee. They don't have that problem in Federal court. This
bill will actually help prevent trolling because what it does
is it allows creators to go and use the CCB without having to
use attorneys that are on contingency fee cases.
Mr. Gohmert. Let me here from Mr. Schruers. You have a
differing opinion?
Mr. Schruers. As I think I explained in my written
statement and previously----
Mr. Gohmert. Right.
Mr. Schruers [continuing]. The use of shell entities,
proxies, and other constructs to avoid identifying a real party
in interest and other civil--Federal civil procedure caps as is
common in Federal troll litigation. And so we suggest
tightening the cap and also not allowing it to be adjustable by
the Copyright Office in order to avoid these problems.
We do think the imposition of a cap is a step in the right
direction in trying--in acknowledging that the presence of
abusive litigant problem and trying to impose some meaningful
constraints on it.
Mr. Gohmert. Okay. Well, thank you.
Ms. Close, there is a burden on a copyright holder to
protect the copyright. But when we are talking internet, we now
have the capability, people with the platform can take it down
just as easily if, you know, they have access, they could take
it down as easily or perhaps more so than to wait to be
notified.
What is your position on not just the copyright holder
having a burden of taking something down when it is in
violation of copyright?
Ms. Close. I am not sure I understand your question.
Mr. Gohmert. Well, you know, the internet, you have got a
lot of platforms there. If there is a platform wherein
somebody's infringing on a copyright, why couldn't you have the
provider of that platform take it down without having to wait--
I know it is not currently the law, I am just asking----
Ms. Close. I don't even know how I would go about that.
Having to provide----
Mr. Gohmert. You are familiar with the internet, though,
right? You use the internet tons of times. Okay.
Ms. Close. Yes, I use the internet daily.
Mr. Gohmert. And you know there are platforms and, in fact,
we have had people from different platforms here in your very
chairs, and I am just, as my time is expired now, but I would
encourage you to think about the possibility, because the
platform providers do have the ability to take things down
without being told to do so. And, in fact, it could be to where
they are even infringing when they allow their platform to be
used as an infringing platform.
Thank you. I yield back.
Mr. Issa. I thank the gentleman for yielding back.
We now go to the gentlelady from Florida for 5 minutes.
Mrs. Demings. Thank you so much, Mr. Chairman. And thank
you to our witnesses here today.
I have no doubt that the CASE Act is a much needed piece of
legislation that is truly going to help protect the creativity
of the persons in this room and many others who are not here.
So I am delighted to see us get to this point.
Mr. Schruers, you started talking about some of the
concerns that you had or some of the issues that you had, but I
would also like to hear from all of you, while this legislation
is going to make a big difference, I would like to hear--
because, you know, we frequently hear the legislation is great,
but it doesn't quite go far enough, or there may be some
unintended consequences.
If you have any concerns or anything that you would like to
add in this particular draft that has not been added, I would
like to hear from all of you in that area. And we will start
with you, Mr. Trust.
Mr. Trust. I thank you, Congresswoman. So you are asking
what we might want to add into it that is not in it presently?
Mrs. Demings. That is absolutely correct.
Mr. Trust. Wow, that is a tall order. I will say this. We
made quite a number of concessions, if you are familiar with
the history of this legislation. We made quite a number of
concessions that were painful, that were difficult for us to
make.
Mrs. Demings. So one area that you didn't quite get to,
though, that you wish was--you would have.
Mr. Trust. Well, we would probably like to remove a few
things. One, the cap on 10 would be one of them. We are
certainly concerned about that. We would probably include just
stronger wording so that it--so that people felt the need to
actually participate. We would, I think, like just additional,
I guess, protections in it that included things like injunctive
relief and others, but I hesitate to say that because we early
on recognized that injunctive relief would be a hurdle that we
would not be able to overcome, and so we immediately took that
out.
So there were a number of things that we, out of good
faith, removed from this, or that we were willing to see
removed from this, simply because we felt like this was our one
shot at the table. Honestly, creators never get this shot at
the table. Small creators never get this opportunity, and we
were nervous that we maybe wouldn't be able to get this through
so----
Mrs. Demings. Thank you so much.
I am going to go to Ms. Close.
Ms. Close. As I mentioned before, I am not a lawyer, so I
don't want to speak out of turn on some of the specifics, but I
will say, from my perspective, I feel like an unintended
consequence. And I know that the law did not mean to turn out
this way, but it is seriously affecting myself and my
colleagues' ability to survive in this world. Imagine what it
would be like if everything we provided was gone. It affects
everybody. It affects small businesses, large businesses. I
believe that we provide a service to humanity, really, if you
want to go that large with it.
I would love to see the cap on 10 removed just because I
have 41 infringements in one image, not that I would take all
of those people to court.
Mrs. Demings. Eighteen of those were large companies.
Ms. Close. Eighteen of those were large companies. I will
take the 10 because 10 is better than zero. But I would prefer
to see more.
Mrs. Demings. Thank you.
Ms. Close. One step at a time.
Mrs. Demings. Mr. Berroya.
Mr. Berroya. Thank you, Congresswoman. I will keep it
short. The three things that Internet Association believes
would drastically improve the bill would be switching from an
opt-out process to an opt-in process to ensure that small
creative entities that are building their businesses online and
offline are protected adequately and have due process and
fairness in the overall process. Clarifying that the bill does
not impact the operation of section 512 is also critically
important from our perspective. And, finally, amending the
draft to reserve statutory damages to those who have timely
registered.
Mrs. Demings. Thank you.
Mr. Kupferschmid.
Mr. Kupferschmid. Thank you. So as you heard, we have--I am
just going to echo David's comments without repeating them, but
I will point out that, you know, what we have seen in the
testimony from CCIA and IA is basically more of the status quo.
They are asking for opt-in, which is the status quo. We have
opt-in right now right. You send somebody a letter, they either
respond or they don't respond. That is opt-in. Same with ADR,
right. De novo review, that destroys--that destroys the value
of the bill. We are creating this bill because these small
creators cannot afford to go to Federal court. This would
require them to go to Federal court de novo review and get
attorneys and complicated process.
So it has been very, very frustrating. We know, we are
little guys, we are coming to Capitol Hill trying to get this
bill passed. We have got these internet giants representing
huge companies that we are going against who easily and
routinely kind of stomp us to the ground. And every time we
give something, they push the goalpost further. It is like that
scene in Animal House where you bend over and you go, thank
you, sir, may I have another. That is what is going on here.
Mrs. Demings. Thank you for that image.
Mr. Issa. That one is going to be with us.
Mrs. Demings. Thank you so much, Mr. Chairman. I gladly
yield back to you.
Mr. Issa. I thank the gentlelady.
You know, going last usually makes it easy. I recognize
myself. But I will, at great peril, I will pick up where the
gentlelady left off.
You know, I appreciate the little guy, big guy. You heard
today, I think, from several people--several members their
concern about trolls. It is one of the key items, I think, that
needs to be resolved as this bill progresses. And so if I can
spend a little time kind of querying that.
Ms. Close, you said you had no intention of going after
Facebook, as a potential user, beneficiary, and currently, as
you said, victim. If this bill exempted noncommercial use so
that we wouldn't be dealing with these people who are not
sophisticated and who, by definition, you know, really don't
know what they are supposed to say or do, and without advice of
counsel, if possible, what would your view on that be? And I am
talking about an individual view for a moment.
Ms. Close. My individual view would be I would take it if
that is the only way to get this thing through, the rest of it,
but I would prefer not to have it in there. And that is me only
not knowing legalese.
Mr. Issa. No, I understand. I understand. The follow-up
question, of course, on that would be, if takedown were
considered to be an opt-out so that if someone receives
notice--and let's presume for a moment, and I will tell you a
story in a just a second before the vote. If somebody gets a
notice of a picture, whether it is a big corporation or a
little one, and they thought it was clip art and they take it
down, we are presuming website for a moment, to you, and again
it is to you individually, is that a remedy? Assuming that, you
know, this isn't a pervasive user but, you know, you went out,
you did your search, you have got a picture that you uploaded,
they have got it on their site, you send them the notice and it
comes off. Is that, in fact, in your view, a remedy, or do you
still want a piece of their hide?
Ms. Close. I would say it is a step toward a remedy, but it
is not a remedy, because it is still my work and it still got
used, and it is my not my fault that that person didn't
understand the law and the rules.
Mr. Issa. Remember, this was not a registered--this was not
registered----
Ms. Close. Right. Okay. If it is not registered, then fine.
If it is not registered, done. If it is registered----
Mr. Issa. Right. But the current bill allows for you to run
in, register it, and then file. So the question is, was it
posted, as it very likely would be in many cases under the bill
as I read it, if it was--if, in fact, you have an unregistered
work and you either go and register it after it is already
posted and then give notice, or if, in fact, you haven't even
yet registered it and you are just sending them the notice,
that is the question.
Because one of the things about this bill as it progresses
is good people on both sides are going to try and find common
ground.
Ms. Close. Of course.
Ms. Issa. And one of the nice things about us, since we
don't have outside income, is we tend not to be on either of
your sides. So that is why I am asking that question of, you
know, if it is not registered, if there isn't yet a database
where somebody can clear things, what do they do?
Because I have been--you probably have too. You have been
up at the Getty Museum. They are frustrated as all get out
trying to clear works that they can just put on because, in
fact, they have a team of lawyers to try to make sure they
never violate, and it is tough, particularly in the case of
what one might call orphan works. But I would like your view on
that.
Ms. Close. I mean, I guess I would say--and, again, not as
a lawyer and not knowing the super in depths of this particular
bill, but if it is too complicated, it needs to be simplified.
And I think this is a way to simplify it. However, copyright, I
know, is afforded to me when I make a piece of art. When I
register it, I am afforded other benefits, I guess I would say.
Mr. Issa. You gain statutory----
Ms. Close. Right. So I would want----
Mr. Issa. You have to do it in order to gain access to this
court.
Ms. Close. So as the copyright owner of that work, I would
want to enter a level playing field with somebody, regardless
of whether I had registered my copyright before they infringed
on it or not. However, a secondary thing that I appreciate and
that I hope that this bill would do is that ultimately I would
like everybody to register their copyrights. And I would like
also the people who may non-willfully infringe, people who
innocently do it, because those people are out there, to be
educated about what that means, because ultimately the bigger
picture of this is that there is a cultural shift. And image
theft and not respecting a creator's property and work is a
much larger issue than just the internet it is free, it is a
whole cultural thing.
So I can't directly answer your question, but I would say
that as of right now, yeah, I would want to be able--I would
want to be able to enter a level playing field with that person
and let it be hashed out one on one, regardless of whether my
copyright was registered before or after.
Mr. Issa. Now, I told you I would tell you a story, and I
will be brief. Back in the nineties, that is the 1990s, not the
1890s for people that look at my age, I was manufacturing,
among other things, the Viper car alarms. And I had had an
artist paint a fanciful, as it was called in the litigation,
snake, that became known as the image of the Viper.
And one day I became aware in the St. Louis newspaper that
a Dodge dealer said, the Viper is coming, and what a surprise,
he had my snake. I sent a letter to Lee Iacocca telling him
that these kinds of things could be a problem. He filed a DJ
and hundreds of thousands of dollars on his side and hundreds
of thousands of dollars later on my side, we had our first
meeting to try to resolve this. His ego, my image.
I am acutely aware that everybody thinks somebody else's
image is clip art, which by the way was the defense of the car
dealer. Oh, that was clip art. My sales, you know, the ad
agency just pulled it. Of course, it was a unique image, in
many ways more unique than a photograph because it was a
reproduction from an original painting, and that snake never
existed so you couldn't just snap a picture and get something
similar.
No such court or capability existed, and in my case, it
probably wouldn't have been used. But it certainly then, if you
were to go out and look at that image today, you will find
thousands and thousands of copy of the Viper snakes of various
trademarks. It is almost hopeless to protect because of
proliferation.
Now, we are a commercial--my former company is a commercial
product, so we are hurt only in one way, not the way you are
hurt, since your artwork is truly your product. So I am going
to address my closing to the gentlemen on your left and right.
I heard you say today--and I have great sympathy for you,
maybe even empathy. I heard you say, as they were talking about
great concessions, which by the way, just so you understand,
you are not making a painful concession from your original ask;
you are making a compromise from a list of everything you
wanted.
But having said that, I only heard you say what would make
it better. I never heard either of you commit that if you got
certain things, you could be for this bill. And that would be
the challenge that I would hope that, in a few minutes before
we have to leave, you would lay out if that exist and how we
get there. Because although there are deal killers and you may
understand them, including a de novo review with no heightened
penalty, these sort of things you and I can know, that you can
do better than that.
So my question to you is, what does it take to get you to
yes on a bill that could protect people reasonably from trolls
but could provide a real opportunity for short, quick, and
relatively painless settlement of disputes, particularly when
somebody believes that they have a fair use and they might be
wrong? I know you came here prepared to get to yes, so that is
why I am asking.
Mr. Berroya. Absolutely. And, Mr. Congressman, I am
somebody who spent the last 7 years enforcing copyrighted works
online, so I understand the challenges.
Mr. Issa. Always good to have been both the plaintiff and
the defendant.
Mr. Berroya. Absolutely, Mr. Congressman. The three issues
that we laid out and the two additional issues that I
referenced and are included in my written testimony, are the
only issues that I am aware of that IA and its members have
with the bill. We are 100 percent committed to working with the
committee in making sure that the goals of this bill are
accomplished.
Mr. Issa. Mr. Schruers.
Mr. Schruers. Thank you, Congressman. In the spring, CCIA
actually did submit an extensive red line to committee staff
identifying the issues that we regarded as critical, embodying
all of them and providing explanatory text to explain why
particular changes were being made. Those changes were almost
uniformly rejected, and what is reflected in the discussion
draft is what is represented to be efforts to address the
concerns that we identified.
Unfortunately, that view isn't universally held, but I
think we have been fairly clear about what the issues are, and
they are represented in a more concise form in the written
statement and very similar to the issues raised by IA. You
know, I agree, I think that we have a desire to get to yes on
this.
I also think it is worth noting that there seems to be a
consensus that the root cause of the problem is a general
disuse of the registration system, which we know is
inconsistent with Congress' intent about promoting
registration. And so I would suggest that even as we are trying
to work to get to yes on this solution, we should look at the
actual root cause, which is that creators are saying we are
disincentivized from using the registration system. And I say
that as a representative of consumers of the registration
system, which is to say, digital services who want to make
works available at scale need information to know who to pay.
They want to put money in artists' pockets, and the system that
the government has to enable that is not working. And that is
something that we should also give attention to.
Mr. Issa. Okay. I am going to let you close in just a
moment, Ms. Close. But I am going to say to both of you, and to
all the parties here, if you would like to revise and extend
your best written example of what you believe the legislation
would look like, not general ideas, but several of you are very
good at draft legislation, so that we could see sort of your
best offer of language you believe would enable, and as you
said, you have been on both sides, that would work for you as a
plaintiff, that would be helpful.
Ms. Close, I said I would let you close. I want to leave
you with one thing though, as both a constituent and now
testifying. We have been frustrated for a long time here that
the Copyright Office has not made it possible to have sort of
an easier, more modern way to display that you have in fact
registered, and we are particularly talking about works of
photography.
It is my view that in the foreseeable future, since I know
they are not going to get to you simply upload and they
maintain it, that we will get to--thank you--to linkable
databases where you will be able to, in my opinion, post your
work essentially on your own site, link it to the Copyright
Office, and be, under the law, considered to have informed the
Copyright Office.
This form of modernized registration that allows you to
have terabytes of information linked in some official way to
the Copyright Office so that we are on public notice, they are
on public notice, and allowing those Google searches, if you
will, to be easily done. That, in fact, is in our future; it is
not here today.
And I have been told that I can give you 30 seconds, then I
got to run. Please.
Ms. Close. I think that is great. I think that that would
help, but I also want to say that registration is not the root
cause of the problem. The root cause of the problem is not
being able to enforce the registration and the rights that we
are provided. So that would be a step in the right direction,
but it is not a solution.
Thank you.
Mr. Issa. And I said I was closing, but I will close with a
patent reminder. If I place the number of my patent on my
product, I have given constructive notice. The reality is, for
the internet, they need constructive notice, and we in Congress
need to define what that constructive notice.
I am sorry that I cannot do a second round for the many
people here to ask. With that, we stand adjourned.
[Whereupon, at 3:57 p.m., the committee was adjourned.]