[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT OF THE U.S. COPYRIGHT OFFICE
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HEARING
BEFORE THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
JUNE 26, 2019
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Serial No. 116-32
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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
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U.S. GOVERNMENT PUBLISHING OFFICE
37-404 WASHINGTON : 2022
COMMITTEE ON THE JUDICIARY
JERROLD NADLER, New York, Chair
MARY GAY SCANLON, Pennsylvania, Vice-Chair
ZOE LOFGREN, California DOUG COLLINS, Georgia,
SHEILA JACKSON LEE, Texas Ranking Member
STEVE COHEN, Tennessee F. JAMES SENSENBRENNER, Jr.,
HENRY C. ``HANK'' JOHNSON, Jr., Wisconsin
Georgia STEVE CHABOT, Ohio
THEODORE E. DEUTCH, Florida LOUIE GOHMERT, Texas
KAREN BASS, California JIM JORDAN, Ohio
CEDRIC L. RICHMOND, Louisiana KEN BUCK, Colorado
HAKEEM S. JEFFRIES, New York JOHN RATCLIFFE, Texas
DAVID N. CICILLINE, Rhode Island MARTHA ROBY, Alabama
ERIC SWALWELL, California MATT GAETZ, Florida
TED LIEU, California MIKE JOHNSON, Louisiana
JAMIE RASKIN, Maryland ANDY BIGGS, Arizona
PRAMILA JAYAPAL, Washington TOM McCLINTOCK, California
VAL BUTLER DEMINGS, Florida DEBBIE LESKO, Arizona
J. LUIS CORREA, California GUY RESCHENTHALER, Pennsylvania
SYLVIA R. GARCIA, Texas BEN CLINE, Virginia
JOE NEGUSE, Colorado KELLY ARMSTRONG, North Dakota
LUCY McBATH, Georgia W. GREGORY STEUBE, Florida
GREG STANTON, Arizona
MADELEINE DEAN, Pennsylvania
DEBBIE MUCARSEL-POWELL, Florida
VERONICA ESCOBAR, Texas
Perry Apelbaum, Majority Staff Director & Chief Counsel
Brendan Belair, Minority Staff Director
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C O N T E N T S
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JUNE 26, 2019
OPENING STATEMENTS
Page
The Honorable Jerrold Nadler, Chairman, Committee on the
Judiciary...................................................... 1
The Honorable Doug Collins, Ranking Member, Committee on the
Judiciary...................................................... 3
WITNESS
Ms. Karyn A. Temple, Register of Copyrights and Director of the
U.S. Copyright Office, Library of Congress
Oral Testimony............................................... 5
Prepared Statement........................................... 7
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
A letter from the Recording Academy for the record from the
Honorable Jerrold Nadler, Chairman, Committee on the Judiciary. 29
A letter from the American Society of Media Photographers for the
record from the Honorable Hakeem Jeffries, a Representative
from New York, Committee on the Judiciary...................... 44
A letter from the Chamber of Commerce of the United States of
America for the record from the Honorable Hakeem Jeffries, a
Representative from New York, Committee on the Judiciary....... 45
A letter from the Songwriters Guild of America for the record
from the Honorable Hakeem Jeffries, a Representative from New
York, Committee on the Judiciary............................... 46
A letter from the American Bar Association for the record from
the Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 48
A letter from organizations in support of the Copyright
Alternative in Small-Claims Enforcement Act of 2019 for the
record from the Honorable Hakeem Jeffries, a Representative
from New York, Committee on the Judiciary...................... 51
A letter from the Recording Academy for the record from the
Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 54
A letter from the Latin Academy of Recording Arts & Sciences,
Inc. for the record from the Honorable Hakeem Jeffries, a
Representative from New York, Committee on the Judiciary....... 56
A letter from the Institute for Intellectual Property & Social
Justice, Inc. for the record from the Honorable Hakeem
Jeffries, a Representative from New York, Committee on the
Judiciary...................................................... 58
A letter from MusicAnswers for the record from the Honorable
Hakeem Jeffries, a Representative from New York, Committee on
the Judiciary.................................................. 60
A letter from National Press Photographers Association for the
record from the Honorable Hakeem Jeffries, a Representative
from New York, Committee on the Judiciary...................... 61
A letter from Nashville Songwriters Association International for
the record from the Honorable Hakeem Jeffries, a Representative
from New York, Committee on the Judiciary...................... 62
A letter from Conservatives for Property Rights for the record
from the Honorable Hakeem Jeffries, a Representative from New
York, Committee on the Judiciary............................... 63
A letter from Volunteer Lawyers for the Arts for the record from
the Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 65
A statement from the App Association for the record from the
Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 67
A letter from the Graphic Artists Guild for the record from the
Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 68
A letter from Future of Music Coalition for the record from the
Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 69
A letter from The Associated Musicians of Greater New York, Local
802 AFM for the record from the Honorable Hakeem Jeffries, a
Representative from New York, Committee on the Judiciary....... 70
A statement from Shaftel & Schmelzer for the record from the
Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 71
A letter from American Federation of Musicians Local 174-496 from
the Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 72
A letter from the American Federation of Musicians Local 47 from
the Honorable Hakeem Jeffries, a Representative from New York,
Committee on the Judiciary..................................... 73
APPENDIX
Questions for the Record from the Honorable Jerrold Nadler, a
Representative from New York, Chairman, Committee on the
Judiciary...................................................... 92
Questions for the Record from the Honorable Doug Collins, a
Representative from Georgia, Ranking Member, Committee on the
Judiciary...................................................... 93
Questions for the Record from the Honorable Greg Stanton, a
Representative from the State of Arizona, Committee on the
Judiciary...................................................... 94
Response to questions for the Record from Ms. Karyn A. Temple,
Register of Copyrights, and Director of the U.S. Copyright
Office, Library of Congress.................................... 95
OVERSIGHT OF THE U.S. COPYRIGHT OFFICE
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WEDNESDAY, JUNE 26, 2019
House of Representatives
Committee on the Judiciary
Washington, DC.
The committee met, pursuant to call, at 10:03 a.m., in Room
2141, Rayburn Office Building, Hon. Jerrold Nadler [chairman of
the committee] presiding.
Present: Representatives Nadler, Lofgren, Jackson Lee,
Cohen, Johnson of Georgia, Deutch, Bass, Jeffries, Lieu,
Demings, Correa, Garcia, Stanton, Dean, Murcarsel-Powell,
Escobar, Collins, Chabot, Gohmert, Jordan, Buck, Roby, Lesko,
Reschenthaler, Cline, Armstrong, and Steube.
Staff present: David Greengrass, Senior Counsel; John Doty,
Senior Advisor; Madeline Strasser, Chief Clerk; Jamie Simpson,
Chief Counsel, Courts and IP Subcommittee; Danielle Johnson,
Counsel, Courts and IP Subcommittee; Matthew Robinson, Counsel,
Courts & IP Subcommittee; Rosalind Jackson, Professional Staff
Member, Courts and IP Subcommittee; Brendan Belair, Minority
Staff Director, Bobby Parmiter, Minority Deputy Staff Director/
Chief Counsel; Jon Ferro, Minority Parliamentarian/General
Counsel; Sally Rose Barnes, Minority Judiciary Policy Adviser;
and Erica Barker, Minority Chief Legislative Clerk.
Chairman Nadler. The Judiciary Committee will come to
order.
Without objection, the Chair is authorized to declare a
recess of the committee at any time.
We welcome everyone to today's hearing on oversight of the
U.S. Copyright Office. I will now recognize myself for an
opening statement.
Today's hearing will allow us to assess the current state
of the Copyright Office and the U.S. copyright system. Each
year core copyright industries employ 5.5 million workers who
produce $1.2 trillion in economic activity and generate roughly
$180 billion in foreign sales. These industries also promote a
wide range of artistic expression and intellectual thought.
The Copyright Office plays a vital role in helping to
uphold this system and in helping to ensure that works are
effectively protected by copyright. Maintaining this vibrant
copyright ecosystem depends on having an effective copyright
office to oversee it. And, we are pleased to be joined today by
Karyn Temple, the Register of Copyrights and Director of the
U.S. Copyright Office.
This committee held its last Copyright Office oversight
hearing in 2015, 4 years ago, and a lot has changed since then.
Notably, last fall, Congress passed the Orrin Hatch-Bob
Goodlatte Music Modernization Act, which provides critical
updates to modernize the musical licensing system and better
serve both creators and digital music providers. This historic
legislation, which I was proud to help author along with the
Ranking Member, Mr. Collins, and Mr. Jeffries, assists digital
music providers with the licensing of musical works, while
ensuring that performers, songwriters, and other music creators
receive fair market value for their work.
The Copyright Office is responsible for implementing
several features of the Music Modernization Act, or MMA,
including aspects of the blanket license established in Title I
of the act. The office's July 8th deadline to designate the
mechanical licensing collective and the digital licensee
coordinator created by the MMA is fast approaching, and so I
look forward to hearing more about the status of the Copyright
Office's work in implementing these and other provisions.
The Committee is also closely monitoring the Copyright
Office's much-needed efforts to modernize its IT systems. In
recent years, we have heard a consistent message with respect
to the Copyright Office, that the Office must be modernized to
meet the needs of the public and the copyright community and to
reduce the backlog of pending registrations. The Supreme
Court's decision in Fourth Estate Public Benefit Corporation v.
Wall-Street.com, which held that registration, and not merely
the filing of an application for registration, is necessary
before a copyright owner can sue for infringement, further
underscores the need for modernization of the office's IT
system.
Following the Fourth Estate ruling, I wrote a letter, along
with Ranking Member Collins, asking Ms. Temple about the
office's plans for reducing registration processing times in
light of that decision. I appreciated the thorough response and
her testimony on the same topic today on the Office's plans to
speed up the registration process. These efforts should remain
a top priority for the office.
Another timely issue is the upcoming expiration of the
Distant-Signal Satellite Television License at the end of this
year and whether Congress should reauthorize it. Ranking Member
Collins and I also recently wrote Ms. Temple a letter on this
topic. Again, I appreciate the thorough response, and I hope we
will be able to explore more of the Office's rationale for
recommending that the license be allowed to expire in light of
the changing media landscape.
In addition, the Office has been studying the effectiveness
of the Digital Millennium Copyright Act, Section 512, safe
harbor provision. This issue exemplifies the critical role that
copyright law plays in balancing the needs of right holders to
receive value for their works and the interest of the public in
having access to information. I look forward to learning more
about the insights the Office has gained over the past years
and the forthcoming report.
I thank Ms. Temple for being here today. I congratulate her
on her recent permanent appointment as register, and I look
forward to her testimony on the important work of the Copyright
Office. The gentleman from Virginia. Excuse me. The gentleman
from Georgia, Mr. Collins--not that there is anything wrong
with Virginia. The gentleman from Georgia, Mr. Collins, has
been a good partner and an important leader on many copyright
issues, and it is now my pleasure to recognize the
distinguished Ranking Member of the Judiciary Committee for his
opening statement.
Mr. Collins. Thank you, Mr. Chairman, and just for anybody
out there who may have gotten any wrong impression, ``Go
Dawgs.'' Okay.
Mr. Chairman, thanks for having this hearing today. There
are many ongoing copyright issues that deserve our attention,
and you and I have a history of working on these issues
together in a bipartisan way.I would like to see this committee
focus more on issues like copyright that are critical to our
economy and represent areas where we can actually legislate and
get things rather than redoing a lot of what we have been
redoing recently.
I also want to thank Ms. Temple for appearing before us
today. It is good to see you, it is good to have you here, and
it is good that you are permanently there, and I am glad to
have that. It is her first time appearing before us as the
officially-appointed register of copyrights, but she is by no
means a stranger to this committee or to copyright law.
Copyright is a right provided for by the U.S. Constitution.
Strong copyright protections are critical to promoting
innovation and creativity, and they are critical to our
economy.According to the International Intellectual Property
Alliance, core copyright industries contribute more than $1
trillion to the U.S. GDP and make up almost 7 percent of the
U.S. economy. The Copyright Office plays a key role in this
system, and we in Congress are fortunate to have their advice
and analysis on numerous policy matters.
Last year, the Music Modernization Act was signed into law.
This bill is a culmination of years of work and the first major
update of the music licensing system in a generation. The
Copyright Office provided its expertise throughout the process
and is now in the process of implementing the law. We look
forward to hearing how that implementation is proceeding and to
continue to work with the Copyright Office to ensure that this
law is functioning as intended.
In addition to the Music Modernization Act, there are
numerous other copyright-related matters that deserve our
attention. Copyright modernization remains a priority, and as
the Copyright Office moves to a new IT system, we must ensure
that it has all the resources that it needs to fulfill its
requirement. I am still believing that it needs further change
and needs to be continued in this, and I would hope that
actually the Librarian would actually join in this and not hold
us on this because this is something that needs to happen.
The committee has jurisdiction over the Satellite
Compulsory License for Distant Signals, as the Chairman had
mentioned, Section 119. We have heard from the Copyright Office
about its belief that the license should be allowed to expire
consistent with their historic opposition to the statutory
license. While not all expiring provisions are in the
jurisdiction of this committee. This committee should review
those that are.
We must also ensure the copyright system functions well for
content creators and content users who rely on it. Too often
today we are seeing small creators effectively sidelined from
enforcing their rights. That is why I am glad to see that the
team is back, and Congressman Jeffries and I are again with the
CASE Act. And for those in here who see the shirts, that is
something important to me.
And just a moment. If we forget the creators, if this body
forgets that is the original idea, that spark, that hope, that
dream, that idea, that music, that poem, that verse, whatever
it may be, it comes from within someone. If we ever get to the
point where that is not valued in our system, when we ever come
to the point where a creative spark in whatever genius it may
appear is not protected under our system, our basic
civilization goes down because it is those moments of spark and
creation and hope that the CASE Act would allow for people to
enforce their rights. But it is also that spark that keeps us
going, and it is not for us in this room. It is for those who
are going to have that next spark tomorrow, that next film,
that next stream, that next book, that next moment that will
literally change the world. That is why I love being a part of
this committee on most days. [Laughter.]
But we will continue. [Laughter.]
Piracy also continues to be a problem. While registration
pendency times have gone down, questions still persist about
how to protect property rights properly as works are
registered. Piracy can happen in seconds, but registration can
take months. I commend the Copyright Office's efforts to
shorten pendency, but these are questions that we must
consider. We must also work to ensure copyright laws, many of
which are decades old, reflect the needs and realties of
today's digital world. They are not in competition. They are in
a mutual symbiotic relationship if we allow them to be, and we
need that.
Many challenges remain in the copyright ecosystem, but I am
committed to finding solutions. I look forward to hearing from
the Register today and to continue the bipartisan work to
strengthen our copyright system and ensure it is working for
all creators and content users alike. And with that, Mr.
Chairman, I yield back.
Chairman Nadler. I thank the gentleman. I will now
introduce today's witness. Karyn Temple was appointed Register
of Copyrights and Director of the U.S. Copyright Office on
March 27th, 2019 after having served as acting register since
October 21st, 2016. Previously she served as Associate Register
of Copyrights and Director of Policy and International Affairs
for the Copyright Office.
Before joining the Copyright Office in 2011, Ms. Temple
served as Senior Counsel to the Deputy Attorney General of the
United States. She earned her J.D. from Columbia University Law
School, in my district, and her B.A. from the University of
Michigan. We welcome our distinguished witness, and we thank
you for participating in today's hearing. And if you would
please, I will begin by swearing you in.
Do you swear or affirm under penalty of perjury that the
testimony you are about to give is true and correct to the best
of your knowledge, information, and belief, so help you God?
Ms. Temple. I do.
Chairman Nadler. Thank you very much. Let the record show
the witness answered in the affirmative.
Please note that your written statement will be entered
into the record in its entirety. Accordingly, I ask that you
summarize your testimony in 5 minutes. To help you stay within
that time, there is a timing light on your table. When the
light switches from green to yellow, you have 1 minute to
conclude your testimony. When the light turns red, it signals
your 5 minutes have expired.
Ms. Temple, you may begin.
TESTIMONY OF KARYN A. TEMPLE, REGISTER OF COPYRIGHTS AND
DIRECTOR OF THE U.S. COPYRIGHT OFFICE, LIBRARY OF CONGRESS.
TESTIMONY OF KARYN A. TEMPLE
Ms. Temple. Good morning, Chairman Nadler, Ranking Member
Collins, and members of the committee. Thank you for the
opportunity to appear before you today to provide important
updates on the operational and policy activities of the United
States Copyright Office.
For nearly 150 years, the U.S. Copyright Office has been at
the very center of a thriving copyright ecosystem, serving as
the primary Federal agency administering the Nation's copyright
law. During that time, the U.S. Copyright Office has registered
over 38 million claims to copyright, representing even more
individual copyrighted works. We have provided crucial advice
on copyright law to executive agencies and courts, engaged in a
wide variety of public educational outreach, and answered
almost 200,000 public inquiries just last year. We manage over
$1 billion annually in statutory license fiduciary assets.
Importantly, through our traditional role as the key
advisor to Congress on copyright policy matters, the Copyright
Office has participated in every major update to U.S. copyright
law, from the development of the 1909 and 1976 acts to the
recent Music Modernization Act. The Copyright Office's legal
policy and regulatory activities support our cultural and
economic wellbeing. As recognized by the U.S. Supreme Court,
copyright is intended to be the ``engine of free expression,''
and U.S. copyright law ably fulfills that intent.
Congress developed a thoughtful balance of rights,
exceptions, and limitations which promote the progress of our
Nation's culture through traditional creative industries to the
flourishing tech landscape. With this robust framework of
rights and limitations, it is not surprising then that the
United States leads the world in both entertainment and
technology. Indeed, according to recent estimates, core
copyright industries represent nearly 7 percent of the total
U.S. economy and add more than a $1 trillion to the U.S. GDP.
The Copyright Office is honored to be a critical part of this
copyright ecosystem.
Since the Copyright Office last appeared before this
committee for an oversight hearing, we have made tremendous
progress on a variety of initiatives, including in operations,
law and policy, outreach, financial management, and
modernization efforts, which are described in more detail in my
written testimony.
The Copyright Office's work supports all affected by
copyright. When many think of copyright, they often think of
major corporations and large businesses, but those are not the
only ones who are supported and who benefit from copyright law.
What is often overlooked is that copyright also supports and
sustains small businesses, individual photographers and
artists, first-time novelists and bloggers, garage bands, and
independent filmmakers. By providing a way for these creators
to make a living doing what they do best, copyright enriches
our culture and enhances our daily lives.
Every time I hear from an individual creator about the
first time they registered a copyright with our office or the
first time they actually were able to make a living doing what
they do best, I am inspired. It reinforces in a real-world and
practical way the important work we, and the entire copyright
law, do for our Nation. This includes, of course, an essential
framework of exceptions and limitations, like fair use, that
also helps support and sustain a vibrant and flexible creative
culture.
The importance of copyright to individuals and smaller
businesses is one of the many reasons that the Copyright Office
strongly supports a voluntary small claims tribunal. The
Copyright Office has studied this issue for well over a decade,
listening to the views from all sides, and has come to the
conclusion that many simply do not have the ability to enforce
their rights or contest claims of infringement. A small claims
tribunal would go far in ensuring that those granted certain
legal rights under the Copyright Act actually have the ability
to enforce them.
I look forward to continuing the Copyright Office's
progress and service to the country. To help guide the way, the
Copyright Office released a new strategic plan just 2 months
ago. It identifies critical focus areas that will chart our
course over the next 4 years.
None of this work, of course, would be possible without the
dedicated staff of the United States Copyright Office. During
my tenure heading the office over the past 2-and-a-half years,
I have been continually amazed and inspired by their
resilience, flexibility, and support during a time of
tremendous Copyright Office growth and change. Copyright Office
staff often work long hours with limited resources. Their
efforts have resulted in the recent elimination of our backlog
of pending claims and significant reduction in the processing
time for registration applications. So I would like to take
this opportunity to thank the exceptional Copyright Office
staff for their contributions to the U.S. copyright system and
the American people.
I would also like to thank Congress for your ongoing
support of the Copyright Office. I look forward to working with
you closely as we continue to modernize and update the Office
and the copyright law for the benefit of all. Thank you.
[The statement of Ms. Temple follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Nadler. Thank you very much. We will now proceed
under the 5-minute rule with questions. I will begin by
recognizing myself for 5 minutes.
Ms. Temple, the Mechanical Licensing Collective will be
authorized to distribute unclaimed royalties to rights holders.
We have heard from some stakeholders with an interest in the
process. For example, I received a letter from the Recording
Academy on this topic, which I ask unanimous consent to place
in the record.
Without objection.
[The information follows:]
CHAIRMAN NADLER FOR THE
OFFICIAL RECORD
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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Nadler. Ms. Temple, what are the Copyright
Office's views on how the MLC should handle the initial
distribution of these funds? And in the Copyright Office's
opinion, what are the best practices the MLC should employ to
ensure that unclaimed royalties have a chance to reach the
owners of works that are currently unmatched?
Ms. Temple. Thank you very much for the question. As you
know, we in the Copyright Office, and I know Congress, believe
that the most important aspect of the Music Modernization Act
is to ensure that songwriters and music work copyright owners
are actually getting paid for their work. One of the issues
with respect to the Music Modernization Act and the MLC will be
distribution of those royalties to everyone who is entitled to
them.
We were very pleased that both of the submissions by
entities who have been requested to be designated as the MLC
have made this one of the priorities in their submissions. We
are also looking forward to working with Congress to ensure
that those royalties are distributed appropriately. For
example, under the MMA, we are required to do a study on best
practices to ensure that matching is working appropriately and
to reduce the amount of unclaimed royalties. So we will be
beginning that report shortly after the designation, and that
report will be given to Congress as well as to the designated
MLC in July of 2021. And they are expected to follow the best
practices that the Copyright Office actually provides in that
report.
And additionally, we were pleased that both of the entities
that wanted to be designated as the MLC have agreed that the
first distribution of unclaimed royalties cannot occur until
2023. This will give them both an opportunity, or the
designated entity an opportunity, to ensure that they have good
practices in place to make sure that they are able to
distribute to the most people and have the least amount of
unclaimed funds.
Chairman Nadler. Thank you. And once the Mechanical
Licensing Collective is designated, the Copyright Office will
have to draft rules for how this entity will function and
operate on a day-to-day basis. How does the Office plan to
conduct the forthcoming rulemaking proceedings, and how will
you engage stakeholders, including the new mechanical licensing
entity, in that process?
Ms. Temple. Yes, we were very pleased at the amount of
regulatory authority that was provided to us and the confidence
that Congress provided to us in the implementation of the MMA.
We are focusing, as you know, right now on the designation of
the MLC, which we will do by July 8th. After that designation,
we will immediately start working on the regulatory and other
aspects of the MMA implementation. We have to provide
regulations, for example, about the notices, the form of the
notices of blanket license, notices with respect to usage. We
have to provide regulatory information about privacy and
confidential information. So we will be engaging in those
rulemakings immediately.
And then we also have broader authority under the MMA to
effectuate the statute by regulations. And so we will look into
whether we need to do additional regulations once the MLC has
been designated as well.
Chairman Nadler. Thank you, and I would like to ask you
about the upcoming expiration of the Distant-Signal Satellite
Television License under Section 119. One concern I frequently
hear is that letting this statutory license expire will result
in thousands of people losing access to television. Since the
office supports letting the license expire, what is your
response to this concern?
Ms. Temple. Yes, we have studied this issue in the
Copyright Office for several years. As you know, we issued two
comprehensive reports several years ago recommending that
Congress allow that Section 119 license to expire. Recently at
your request, we reviewed and analyzed those issues again. We
concluded that in the last 5 years between 2014 and 2019, the
actual royalties that we received under the Section 119 license
has dropped precipitously, so it has dropped between 85 percent
to 99 percent in terms of the royalties that would come in. So
that license is really not being utilized in the market.
Also we noted that the marketplace has risen up to address
issues with respect to satellite transmission, and that those
underserved markets are not being underserved in the way that
they had been in the past. The Copyright Office has always said
that we view compulsory licenses as only needed in market
failure. And in this instance we have concluded that there is
no market failure----
Chairman Nadler. No market failure. Thank you.
Ms. Temple [continuing]. That justifies those licenses.
Chairman Nadler. Thank you. Let me get in one more
question. I remain concerned about the pace of IT modernization
at the Copyright Office, especially in light of the recent
Supreme Court decision in Fourth Estate Public Benefit
Corporation v. Wall-Street.com, which clarified that
registration is precondition of filing an infringement lawsuit.
In your view, what aspects of the Copyright Office are in most
urgent need of modernization, and has the Office of Strategic
Planning prioritized addressing those needs? My time has
expired. The witness may answer the question.
Ms. Temple. Thank you. Yes, we agree that IT modernization
of the Copyright Office is one of the most critical priorities
for the Office. It was listed as a primary and core key focus
area in the recent strategic plan that I just released. In
terms of which areas need to be prioritized with our IT
modernization, I will have to say all of them because we
desperately need to have a full enterprise copyright system
that is an integrated system that addresses both our
recordation aspect of the Copyright Office, our registration,
and our public records.
So we are actually engaging in modernization efforts on all
three of those different areas at the same time because they
are such a priority.
Chairman Nadler. Thank you very much. My time has expired.
I now call on the--I now recognize I should say--the Ranking
Member, the gentleman from Georgia, Mr. Collins, for his
questions.
Mr. Collins. Thank you, Mr. Chairman. In 2013, the
Copyright Office recommended the creation of a small claims
court and recommended legislative language that eventually
resulted in the CASE Act that Mr. Jeffries has so eloquently,
talked about and I have joined on with him, on that H.R. 2426.
In your testimony, you discussed some of the challenges faced
by small creators and the Office's support for a small claims
tribunal. Can you talk about this and your support and how we
would go about that?
Ms. Temple. Yes, the U.S. Copyright Office has supported
developing some type of alternative forum for small individual
creators and smaller businesses for some time. If you may
recall, Representative Smith had a hearing in 2006 on this very
issue in which the Copyright Office testified and said that
this was a worthy issue to study. In 2013, we provided a full
report after a public process where we received a number of
comments looking at this issue.
We concluded that unfortunately with respect to the current
system, due to the high cost of Federal litigation and the
complexity, many individual creators and smaller business are
essentially precluded from getting into Federal court to really
protect their rights. And we have noted that having a right
without a remedy really means that you have no right at all.
And so it is our strong view that we have to provide some
alternative forum to allow for those individual creators and
smaller businesses to be able to protect their legal rights.
We noted and others have noted, for example, that the
median cost of a litigation is over $200,000 to be able to
litigate that to a jury trial. And so that is something that is
really just beyond the ability of most individual creators and
smaller businesses. And so that is why we strongly support the
creation of a copyright claims board.
Mr. Collins. And I think that, as asserted in this audience
today, I think this is something that, again, we don't often go
to the doable here many times. This is doable and should be as
we go forward, and I think it is something that would really
work. I want to go back. Let me switch gears, and I want to
come back to the Office itself. The committee recently received
information from you regarding registration processing times,
and I read that letter to say that registration backlog was
basically gone. Is that correct?
Ms. Temple. Yes, we were very pleased that we were able to
eliminate our historic backlog of pending claims.
Mr. Collins. What does that, you know, actually mean, and,
you know, how do you avoid a return to a backlog?
Ms. Temple. Well, that is a great question. We have
typically counted our registration backlog of pending claims to
be over 150,000 workable claims. Those are claims on hand that
have all of the materials that we need to be able to process
the actual registration application, including the fee and the
deposit, and that are pending with-in the Office. So that is
traditionally what we have identified as a backlog, and we have
gone significantly under that in the last year.
But we do realize that most people aren't as concerned
about our backlog. What they are most concerned about is the
processing time itself. So we have really kind of switched away
from focusing on the backlog to focus on what is the processing
time for our claims. And we were very, very pleased this year
to be able to say that we have within the last 2 years reduced
the processing time by 40 percent. It is now not perfect, but
it stands on average at 5 months, and we are working very, very
hard to continue to improve that.
Mr. Collins. Elaborate on the pendency issue. What is a
problem that would keep you from getting better at that under 5
months?
Ms. Temple. Well, one thing that we identified, or I
identified in my recent letter to the committee was resources.
One of the issues that caused our backlog and caused us to have
very high pendency times was that we actually had a reduction,
I think, of more than 30 percent of our staff over the last 5
years, or before the last 5 years, between 2010 and 2014. We
lost a significant number of our registration specialists.
We were very pleased that the committee has supported the
Copyright Office getting more resources. So in Fiscal Year
2015, 2017, and 2018, and 2019, we did get additional resources
from Congress to hire additional registration specialists. So
having the resources to hire staff is one of the most critical
aspects with us being able to continue to have that processing
time go down. Obviously another key aspect is modernizing the
office. Our system right now is not the most efficient, and we
expect that once the IT system is modernized, we will be able
to maintain and even reduce processing times further.
Mr. Collins. Look, I understand the delicacy of your
position and especially in dealing with the Library of Congress
as well, but it is an untenable situation. I will take the heat
for this. You know, the Librarian can come see me about it, I
don't care. But the IT part of this and the other functions
that you need to actually have an office that works has got to
be, there is no turf battle here. In fact, there needs to be a
removal of you from that turf all together.
But we need these IT issues and we need this to be broke up
in a way that you understand the jobs that you do. I think you
have done a great job and previous registers as well. Ms.
Pallante and others have done a great job of saying why you are
different. The thing that has gotten me the most is you all
seem to want to work within a broken system as best as I have
ever seen, but yet you continue to get hindered at every turn.
So, again, we look forward to moving more in that
direction. I am glad you are here. Thank you for your help. And
I yield back.
Chairman Nadler. The gentleman yields back. I now recognize
the gentlelady from California, Ms. Lofgren.
Ms. Lofgren. Thank you, Mr. Chairman, and thank you, Ms.
Temple, for being here today, as well as your terrific staff.
You know, in all of the interface I have had with the Office, I
have been impressed by the dedication of the staff of the
Office, the commitment they have to the rights of people who
are seeking protection. And I just want to thank you and them
for your hard work.
Ms. Temple. Thank you.
Ms. Lofgren. You know, we have an interesting situation.
Actually the House Administration Committee has jurisdiction
over the Library and every component within it, and we actually
have had oversight hearings relative to the operations.
Copyright policy is the jurisdiction of the Judiciary
Committee. But in terms of the IT system, we have received very
strong commitments from the Librarian as well as from you that
the IT system is well underway. And really I think that was
neglected too much, for a long period of time. We are playing
catch up now. So I am wondering could you give us a little more
detail on the IT improvements and when we can expect to see
them come online?
Ms. Temple. Yes, that is a great question. We have been
working hard to improve our systems for some time. We have been
in the planning stage for a long time, but we are now right in
the position to be able to realize some concrete successes from
the modernization plan.
So right now we have three different areas, again, that I
mentioned that we are focusing on. We are excited about our
recordation modernization. As you may know, our recordation
system is still paper based.
Ms. Lofgren. Right.
Ms. Temple. So that is something that it was long in need
of modernization. We have been working on that for some time.
According to our OCIO, who is actually here today, we are going
to be able to launch a public pilot of a new digital
recordation system early in the spring of 2020, and so that
will be----
Ms. Lofgren. So next year. Less than year from now.
Ms. Temple. That will be next year, yes. So that will be a
tremendous, I think, advantage for the----
Ms. Lofgren. Mr. Chairman, I wonder if we could have a
little order so I can hear the witness.
Chairman Nadler. We will be in order. [Laughter.]
Ms. Temple. That would be a tremendous, I think, advantage
for the public to be able to actually see this new digital
recordation system. The pilot will be small in nature, but it
will enable us to get feedback from the public on necessary
improvements as we continue to develop. We are also working on
our public records system. We are in the process of contracting
with vendors to be able to develop our public records, and
those are our records of applications, registrations. The goal,
of course, is to be able to connect our applications, our
registrations, and all of our data in one system so that the
public will be able to get as much information as possible
about copyrighted works and copyright ownership. So we are in
the process of doing that.
And then we have been working on----
Ms. Lofgren. And what is the date on that, do you think? I
mean, this is good news overall.
Ms. Temple. Yes, we are hopeful that we would be able to
have a pilot of the public records system late next year, so
late in 2020 as well. Again, that would be a limited pilot, but
it would allow for us to have something concrete that a limited
amount of the public would be able to utilize to provide input
and feedback to us as we continue to develop that system as
well.
And then finally, we have been working on our registration
system. That is part of the overall enterprise copyright
system. We have been engaging in a lot of public interface to
develop the frontal portal of that system. We have wireframes
that we are working on. We have tested that system, the
wireframes at least, with the public, and we are going to
continue to do a number of kind of user usability testing, UX/
UI processes over the course of the next several months as
well.
Ms. Lofgren. So really we are on the verge in the next year
we are going to see a huge change in the IT in the office, and
I think that will benefit rights holders greatly. And, you
know, the whole trick here is to find out who to pay and to pay
them, and that is really a matter of information and the ease
of information.
Let me ask you just a quick question on the consent
decrees. I realize that that is really not up to the Office,
but DOJ is now renewing its review of this. I don't know what
has changed since the last time they looked at it, but it does
seem to me that for a broadcaster to be fully covered for any
song that might play, the broadcaster has to purchase a blanket
license from all four PROs. You know, to me, that seems
complicated and expensive. I am wondering if the committee
asked you whether you could study in the Copyright Office
whether Congress should modernize blanket licenses for the
performance of musical works, the same way it modernized sound
recordings and mechanical licenses. Would that be something
that would divert the office from its necessary IT upgrades, or
would that be something that could be accommodated?
Ms. Temple. Certainly if Congress would like us to review
that issue, we would be pleased to do so. We obviously have
been monitoring the consent decree process on the IP side. The
DOJ is reviewing it on the antitrust side. This is an issue we
touched upon briefly in our music licensing report that we
issued in 2015 where we did recommend, for example, that we
migrate any rate setting to the CRB to be more consistent. So,
again, certainly we would be definitely willing to continue to
review that issue with Congress if you thought that would be--
--
Ms. Lofgren. My time is over. Thank you, Mr. Chairman, for
indulging me in that lateness, and congratulations on your
appointment, Ms. Temple.
Ms. Temple. Thank you.
Chairman Nadler. Oh, yes, I am remiss in not congratulating
you also.
Ms. Temple. Thank you.
Chairman Nadler. You are welcome. The gentleman from
Virginia, Mr. Cline.
Mr. Cline. Thank you, Mr. Chairman. The Ranking Member is
gone, but ``Go Wahoos.'' I want to thank you for your
leadership and Ranking Member Collins also, Chairman Johnson
and Ranking Member Roby for their leadership on intellectual
property, and Congressman Jeffries for introducing the CASE
Act. I am proud to join him as a co-sponsor of that bill. And
congratulations to you, Ms. Temple, on your appointment. You
have done a great job, and we look forward to many years of
leadership from you.
Copyright is particularly important to my home State of
Virginia. We have had around 100,000 registrations from
Virginia over the last 6 years, 12,000 jobs through the motion
picture industry, and 2,500 production-related jobs. And the
software industry in Virginia has accounted for over 180,000
jobs. Copyright ownership brings jobs, steady wages, and money
to our local economies. And we are here and we have been
discussing many of the issues surrounding copyright, including
modernization of the Library of Congress, the copyright
registration process, music modernization implementation,
consent decrees, STELA reauthorization. I want to focus on
digital piracy for a moment.
You know, it is an oldie but a goodie, but your office is
studying Section 512 of the DMCA, which is coming up on 20
years' anniversary. ``notice and takedown'' is a critical part
of copyright protection, but a lot has changed in 20 years.
Many advancements have not been anticipated. Can you talk at
all about this study, how it is going and when you plan to
release it?
Ms. Temple. Yes. We agree that a lot has gone on in the
last 20 years, and that is why we were very pleased when
Congress did ask us to study Section 512 and the notice and
takedown regime. We are in the process right now of analyzing
all of the comments that we received. We received over 90,000
individual comments on Section 512 and whether it is operating
effectively today. We also engaged in a number of roundtables.
Our most recent roundtable was just earlier this spring where
we wanted to make sure that we had all of the information in
terms of updates that might have occurred since our last set of
written comments were requested.
So we now have all of that information, the 90,000 comments
that we are going to read each and every one of them as well as
the transcripts from the roundtables, and we will be drafting
over the summer. We are hopeful that we will be able to release
that report by the end of this year.
Mr. Cline. Thank you. And as you said, it is an important
issue that you have received a lot of comment on. And video
streaming piracy is costing the U.S. between $30 and $70
billion annually, between 230,000 to 560,000 jobs, between $45
and $115 billion in GDP. Can you explain how the Office
continues to monitor video streaming piracy and how you are
working to address the threat of piracy in this ever-changing
environment?
Ms. Temple. Yes. We, you know, obviously are not an
enforcement agency, but we do work closely in the interagency
with the rest of USG to ensure that on the policy side we have
strong protections against piracy. That is, for example, one of
the reasons why we testified several years ago on the issue of
illegal streaming. We noted that there has been an increase and
a rise in illegal streaming even years ago, and that it would
be appropriate at this stage for Congress to consider providing
parity in terms of the penalties for unauthorized
reproductions, distributions, and public performance.
Unfortunately, under our current law, unauthorized public
performances actually are not able to be charged as a felony,
while unauthorized reproductions and distributions are able to
be charged as a felony. As many of you know, streaming has
risen in the type of distribution model that has been done by
the content industry, and so it is our strong view that it is
appropriate for Congress to consider providing parity for the
penalties of all of the types of piracy that is out there so
that the Department of Justice will have effective tools to
combat piracy.
Mr. Cline. Thank you. And with the few seconds remaining, I
want to address something you mentioned in your testimony, the
Eighth Triennial Section 1201 proceeding that is going to begin
next year. You adopted a streamlined process during last year's
rulemaking when you recommended the renewal of exemptions for
all 22 types of uses covered by the 2015 rulemaking, and you
supported the expansion of seven of those earlier exemptions
and the adoption of two new exemptions. Can you speak to the
work that you are going to be beginning and whether you see
anything different on the horizon?
Ms. Temple. Yes. We were really pleased at the outcome of
or last Section 1201 rulemaking. We did, as you noted,
introduce a streamlined process. That process worked very, very
well. So for those exemptions where there wasn't really a
change in the marketplace since our last proceeding, we
instituted a process where an individual could come forward and
basically note that and note that they were going to be relying
on the evidence of the last triennial rulemaking. And then they
wouldn't have to actually resubmit all of that evidence again
if there weren't changes in the marketplace.
And that allowed for those exemptions, where there wasn't
really a significant amount of opposition, for us to really be
able to thoroughly analyze the previous record, yet again, but
not have the burden of those who are proponents of the
exemptions having to provide a new record that really had not
changed. And that streamlined process is the process that we
will be following for the upcoming triennial as well.
Mr. Cline. Great. Appreciate it. Mr. Chairman, I yield
back.
Chairman Nadler. The gentleman yields back. The gentleman
from Georgia, Mr. Johnson, is recognized.
Mr. Johnson of Georgia. Thank you, Mr. Chairman, and thank
you for hosting this hearing. And thank you for your presence
to testify, and congratulations to you.
Ms. Temple. Thank you.
Mr. Johnson of Georgia. I understand that the Copyright
Office's IT systems are centralized as part of the Library of
Congress' interoperable software programs. As a result, the
Copyright Office must provide funds for its IT modernization to
the Library only for the Library to in turn provide the new
services back to the Copyright Office. What safeguards exist to
ensure that funds designated for the Copyright Office's IT
needs only serve the Copyright Office's needs once they are
transferred to the Library of Congress?
Ms. Temple. Thank you for the question. As you know, after
centralization of all of the IT systems and management of the
IT systems within the Library, our IT is now under the
authority of the Office of the Chief Information Officer. The
way that we do request additional funds for IT development is
we do have our own appropriation line, and we do request
specific IT modernization funding. Once we receive that
funding, we transfer that funding to the OCIO for use in the
development activities.
Under the appropriations law, they are required to utilize
those funds and resources solely dedicated to Copyright Office
modernization. We do want to work with the OCIO, though, to
ensure that it is a transparent process because we know that
stakeholders want to ensure that their money and any fees, for
example, that are going towards modernization are going
specifically to Copyright Office modernization. So we are going
to work with OCIO to ensure that we do have even better
communications and more transparency in terms of the usage of
our funds for IT modernization.
Mr. Johnson of Georgia. All right. Thank you. How have
modernization efforts in the Copyright Office been impacted by
having to operate within the Library of Congress?
Ms. Temple. Well, you know, it is certainly----
Mr. Johnson of Georgia. I guess maybe I should ask have the
efforts of the Copyright Office been negatively impacted by
having to operate within the Library of Congress.
Ms. Temple. Well, I will say that it is certainly a change.
We previously did have, for example, direct access to vendors
where the business was guiding the IT development. And so one
of the issues that I know is important for myself as well as
the rest of our staff is just to ensure that in this new
framework, the Copyright Office still does have that direct
access to the vendors, to the contractors, so that we are
actually the ones who are guiding the modernization efforts.
Of course the Library also has a lot of priorities. They
are modernizing other aspects of their systems as well. And so
the other issue that we want to ensure is that when there are
all these competing priorities, obviously we feel that the
Copyright Office IT system is the number one priority. And so
it is my really hope that the Librarian and the Library will
continue to have IT modernization of the Copyright Office as
one of its highest priorities.
And so that is really what we are focusing on, ensuring
that the business requirements and needs that we have for the
Copyright Office are conveyed and listened to by the those who
are developing our system, and that our system development
remains a priority even among competing interests as well.
Mr. Johnson of Georgia. All right. Thank you. Well, you
will keep us abreast of how things progress.
Ms. Temple. Yes.
Mr. Johnson of Georgia. The distant-signal satellite
television license is set to expire on December 31, 2019, and
in your letter you reported that the use of the Section 119
compulsory license has decreased in the past 5 years, but there
are still over 870,000 subscribers. If we allow the compulsory
license authorization to expire, then what will happen on
January 1, 2020?
Ms. Temple. Yes. We have said in our review that the
marketplace has already risen up to address this issue. And so
we do.
Mr. Johnson of Georgia. How so?
Ms. Temple. For example, in the marketplace, you have
different ways in order to get signals. For example, you can
now watch on YouTube. Streaming services have risen up.
Mr. Johnson of Georgia. Well now, with broadband having not
been extended to the far reaches of our society, of our
country, that poses a problem.
Ms. Temple. Well, I will say that, in our review, we did
hear from the satellite providers, that there were about
800,000 subscribers. But one of the issues that we mentioned
was, one, the royalty rates have gone down significantly.
Again, that was an 85 to 99 percent reduction in the royalties
that we received. And even for that 800,000 number, it is not
clear that those are all actually subscribers within
households. Some of them are RVs and other types of entities.
And so we don't think that there will be a significant harm
to rural communities by allowing this license to expire. Again,
this is something that we actually supported for many, many
years. Over time I think that it has even gotten better in
terms of the marketplace. So we think that even if the licenses
were something that was useful a few years ago, to allow the
marketplace to take advantage of all of the advancements, it is
even more so now to do so because of the limited use of that
particular license.
Mr. Johnson of Georgia. Thank you.
Chairman Nadler. The time of the gentleman has expired. The
gentlelady from Alabama, Mrs. Roby.
Mrs. Roby. Ms. Temple, I want to thank you so much for
coming here and testifying today, and thank you for the time
that you have spent with me in my office. And congratulations,
and I look forward to working with you on ways that we can
ensure our copyright system is working efficiently and
effectively. So, again, thank you.
As the co-chair of the Congressional Songwriters Caucus, I
am particularly interested in effective implementation of the
Music Modernization Act, and I know the chairman touched on
this, but to ensure that songwriters are getting paid
accurately and fairly for their work. And under the MMA, the
Copyright Office must designate an entity to serve as the new
Mechanical Licensing Collective by July 8. And we talked about
this some in my office.
But as you review the submissions and prepare to make
regulations to implement the MMA, can you speak to the ongoing
transparency and oversight responsibilities of the MLC to
ensure correct matching of data that will help ensure that
songwriters are paid fairly? And then I will just add one more
thing. What would you recommend that we in Congress, and
particularly this committee, do to provide meaningful oversight
of the MLC and ensure that the MMA accomplishes its goals?
Ms. Temple. Yes. So as I mentioned earlier, you know, we
were pleased by both submissions that we received in the
Copyright Office for the entities who wish to be designated as
the MLC, recognizing that one of the most important goals of
the MLC is to ensure that songwriters get paid for the use of
their works, and that they reduce the amount of unclaimed,
unmatched royalties. So that is something that both proposed
designees have actually identified.
One of the things that Congress has also already done to
ensure that this process works effectively is to ask the
Copyright Office to do a study on best practices with respect
to unmatched royalties and ways to reduce the unclaimed funds
within the MLC. So that is one thing that Congress has already
done. We will be starting to prepare that report as soon as the
designation is made, and again, that report will come out in
July 2021 where we will be recommending best practices.
And so I think once the report goes to Congress, as well as
to the MLC, ensuring that those best practices, that we
recommend are actually adopted, I think will be a key aspect of
making sure that the system is working effectively.
Mrs. Roby. Thank you. I am an original co-sponsor as well
of the CASE Act, and it is great to see many creators here in
the audience today. So currently it is cost prohibitive for
many creators to enforce their rights in Federal court. So how
will a copyright small claims tribunal or the copyright claims
board in the CASE Act not only benefit creators, but also
benefit users of content.
Ms. Temple. Yes. As I said earlier in my opening testimony,
it is really important for this system to work, that the legal
rights that are created, that people have the ability to
enforce those rights. And so with respect to many smaller
creators, smaller businesses, individual authors, right now the
legal right is there, but it is not effectively enforced
because they don't have the ability to get into Federal court.
So having this new alternative forum, I think, will be very
important to really provide respect for the system and ensure
that all who are supposed to benefit from the system are able
to do so.
One area that hasn't been highlighted a lot with respect to
the CASE Act, however, is that it does also benefit users. You
are able to, if you, for example, want to use a copyrighted
work and aren't sure whether it is a fair use, you are able to
go into the alternative form of the CCB and actually get a
determination of noninfringement. So it is not just to go after
those who are pirating works, but those who are using works and
want, again, the confirmation that they are allowed to use
those works and are able to go into that CCB with a streamlined
process and get a determination of noninfringement as well.
Mrs. Roby. So speaking of piracy, my home state of Alabama,
like others, has seen an increase in movie and television
production, bringing jobs and opportunities. But digital piracy
remains a concern, and it can threaten possible future
productions. The vast majority of people would never think of
walking into a store and stealing a DVD, but don't give a
second thought to streaming movies or shows online from illicit
sites. So what suggestions would you have, and I have got 18
seconds, on ways that we can educate the public, and
particularly young people, on the illegality and harm of
digital piracy?
Ms. Temple. Yes. I think that often unfortunately when
people think of digital piracy, they don't think that it really
does harm individuals. They just see the major artist and
think, oh, well, if they don't get paid for that one DVD, it is
not going to harm them particularly. But they don't realize
the----
[Audio malfunction in hearing room.]
Chairman Nadler. It did go over.
Ms. Temple. Okay. It is on again? Thank you. They don't
realize the impact that piracy has not only on artists, but all
of those who are really participating in the copyright
ecosystem. So I think that, yes, as you mentioned, outreach and
education on this issue is critical. Teaching the young people
that, if you wrote a paper, you wouldn't want your friend to
take that paper and pretend that it was their own. That is
basically piracy if you draft a song and somebody steals that
song.
So I think, again, once people understand the ramifications
of how piracy really affects our culture and our ability to
have a thriving copyright ecosystem and a thriving marketplace
for culture, I think people will be more willing to understand
the importance of protecting those intellectual property
rights.
Mrs. Roby. Thank you. Thank you, Mr. Chairman.
Chairman Nadler. You are welcome. The time of the
gentlelady has expired. The gentleman from New York, Mr.
Jeffries.
Mr. Jeffries. Thank you, Mr. Chairman. First, I ask
unanimous consent to enter into the record several letters in
support of the CASE Act.
Chairman Nadler. Without objection.
[The information follows:]
MR. JEFFRIES FOR THE OFFICIAL RECORD
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Jeffries. Thank you, and congratulations, Ms. Temple,
on your permanent elevation to the position. I continue to
appreciate the leadership that you provide. I want to thank my
colleagues, Chairman Nadler, Chairman Johnson, Ted Lieu, Doug
Collins of course, Congresswoman Roby, and Congressman Cline,
for their support of the CASE Act.
Ms. Temple, has copyright infringement increased
significantly over the last several years?
Ms. Temple. Well, that is, an issue that we have studied. I
think according to some reports, yes, copyright infringement
continues to increase steadily, and the type of copyright
infringement changes, for example, from, illegal downloading to
illegal streaming. So that is something that is a current
concern because the more effective laws that we have, the more
effective pirates are in trying to circumvent those laws.
Mr. Jeffries. Under current law, when there is a claim for
copyright infringement, that, of course, must be heard in
Federal court? Is that right?
Ms. Temple. Yes.
Mr. Jeffries. And that applies regardless of the amount in
controversy? Is that true?
Ms. Temple. Yes.
Mr. Jeffries. So if the amount in controversy is $5,000, if
someone wants to vindicate that right, they still have to bring
a Federal court case, correct?
Ms. Temple. Right, yes.
Mr. Jeffries. Now, I think you mentioned earlier today that
the average cost of litigating a case in Federal court is
approximately $200,000 if you take it to trial. Is that true?
Ms. Temple. Yes. Yes.
Mr. Jeffries. So in many instances, the cost of litigating
in Federal court is often higher than the damages that one may
be seeking as a petitioner. Is that true?
Ms. Temple. Yes. Yes, it is.
Mr. Jeffries. So is it fair to say that as a result of this
sort of vexing situation, you have creators, visual artists,
others who are left with a right, but no remedy to vindicate
that right? Is that true?
Ms. Temple. Yeah, that is one of our key conclusions.
Mr. Jeffries. And do you support sort of a less burdensome
alternative, such as a small claims court-like tribunal housed
within the Copyright Office?
Ms. Temple. Yes, and we issued a full report, as mentioned,
recommending the creation of just such a court within the
Copyright Office in 2013 with our Small Claims Report.
Mr. Jeffries. And in terms of that 2013 report, that system
that you recommended I think would be overseen by a panel of
three copyright experts called the Copyright Claims Board?
Ms. Temple. I don't know if we called it the CCB, but, yes,
it would essentially be the same framework that is in actually
the current CASE Act.
Mr. Jeffries. Okay. And it would allow petitioners and
respondents to participate without an attorney and without
necessarily appearing in court. Is that right?
Ms. Temple. Right, and that is the main purpose, allowing
people to appear, for example, pro se, so they don't have to
spend that $200,000. Also they might be able to utilize, for
example, law students who are able to come in and help them.
And I know under the CASE Act, the claims attorneys who are
part of that bill would also be able to help guide those who
are pro se in how to file their claims as well, which will be a
very helpful aspect of the law.
Mr. Jeffries. Also do you think that there is value in
having copyright experts who will be part of the tribunal sort
of assess the merits of a case and determine what, if any,
damages would be available in the context of a dispute?
Ms. Temple. Yes, copyright can often be very complex, and
that is why we did recommend in our report that the CCB or
whatever small claims tribunal, have authority by having
expertise in copyright law. So at least two of the people who
would be appointed would actually have to have expertise, both
representing copyright owners as well as users.
Mr. Jeffries. And I think the 2013 report also recommended
considering imposing a ceiling on the damages. Is that right?
Ms. Temple. Yes.
Mr. Jeffries. And as far as you understand it, does the
CASE Act sort of incorporate those recommendations by setting a
$30,000 cap for each dispute, and $15,000 per work in terms of
claims that are brought before the copyright review board?
Ms. Temple. Yes, and that was our exact recommendation in
our 2013 report.
Mr. Jeffries. Okay. And in terms of the importance of
individual artists being able to vindicate their rights under
copyright, could you speak to the significance of it? Many of
us have noted that Article I, Section 8, Clause 8 of the United
States Constitution, which gives Congress the power to regulate
intellectual property law in order to promote the progress of
science and useful arts, is sort of at the core of the founding
of this Nation. And so to have a circumstance where you have
artists who have a right but no remedy, and can't vindicate
that right seems inconsistent with one of the foundational
principles of the United States of America. But I would be
interested in your thoughts.
Ms. Temple. I couldn't say it any better. I will say that I
certainly agree. We have recognized that individual artists and
creators are really the backbone of our copyright ecosystem,
and so having a system where those individual artists and
creators aren't really able to participate and legally enforce
their rights really isn't an adequate system at all. And that
is why we do support a small claims tribunal so that those
individual artists and creators are able to have a forum in
which they can vindicate their rights.
Mr. Jeffries. Thank you for your service. Thank you for
your testimony. I yield back.
Chairman Nadler. The gentleman yields back. The gentleman
from California, Mr. Lieu.
Mr. Lieu. Thank you, Mr. Chair. Thank you, Ms. Temple, for
your public service and for being here. My district in Southern
California is home to a lot of creators. The Music
Modernization Act was very important both to America as well as
my district, and I look forward to your office's implementation
of it. My first question is, how will artists and songwriters
and creators be able to comment on or give feedback to your
office regarding the implementation of MMA?
Ms. Temple. Yes, so they have already been able to
participate and provide comments in response to our
designation, or our proposed designation, of the MLC, which is
the first regulatory activity we have under the MMA. We have
received over 600 comments from individual artists and others
interested in providing their views as to which entity should
be designated as the MLC. And then after we do designate, there
are a number of regulatory implementation activities that we
have to engage in.
For each of those activities, we will go through a formal
rulemaking process where we will seek comments from all of the
public and especially, of course, those affected by the MMA, so
that they will be able to participate in that process.
Mr. Lieu. So if a creator is watching this and they want to
know how to submit a comment, how do they specifically do that?
Do you have a website? Do you----
Ms. Temple. Yes, we have a website. In fact, just the day
after the MMA was implemented, we put a specific webpage with
FAQs about the MMA and the importance of the MMA to individual
songwriters. We encourage songwriters and anybody who is
interested to come to our website, our Music Modernization
website page and actually get further information. They can
also sign up for various notices that we put out. Any time, for
example, that we do a regulatory process, we will issue a
notice. We will tweet about it, but we also send it out to our
subscribers so they are aware of it. So we encourage them to
sign up with the Copyright Office so they can get those types
of notices as well.
Mr. Lieu. Great. Thank you. Once the Mechanical Licensing
Collective is stood up, how will it be held accountable for
accurately distributing royalties?
Ms. Temple. Yes. I think that there are a number of
provisions in the MMA that are critical and important to
ensuring that whatever designation is made, that the system and
the entity that is designated will be appropriately ensuring
that songwriters are actually able to get their royalties.
Again, we will have a number of rulemakings to ensure that
the process is working effectively. There are audit right
responsibilities in the Music Modernization Act itself that
provide that, for example, the MLC will have to provide an
audit that will then be made public and sent to Congress, as
well as the Copyright Office. And then, again, we do have
regulatory authority to help to implement and effectuate the
Music Modernization Act if there is something that we feel
needs to be clarified, for example.
Mr. Lieu. Thank you.
I would like to ask a question on intellectual property
theft. A recent study showed that it was around $225 billion in
cost to the U.S. What are some of your greatest challenges in
fighting back against that?
Ms. Temple. I am sorry. I didn't hear----
Mr. Lieu. I am sorry. Against IP theft.
Ms. Temple. Yes. As I said, we aren't an enforcement
agency, but, we work closely with the wider United States
government to ensure that, again, the U.S. has strong
protections in its law to ensure that we can fight effectively
against piracy. I mentioned earlier that, unfortunately, as we
update our law, often the pirates update their activities to
try to get around our laws. And so one of the critical--
critically important things for us to do is just ensure that
our law does keep up to date and that we are able to and the
Department of Justice is able to, effectively go after the
pirates, despite or however they are operating so that we can
ensure that piracy does not continue to rise.
And so we are working, continuing to work closely with
Congress and with the Department of Justice and others who are
interested in ensuring that the laws are kept up to date to be
able to address the rising cost of piracy.
Mr. Lieu. Thank you.
So my understanding of NAFTA 2.0 that is being negotiated
is that there is a notice and takedown system for infringement,
but that if a member state meets certain legislative
requirements, that that is sufficient to comply. Do you believe
that both Canada and Mexico will be able to comply and actually
enforce that?
Ms. Temple. Yes. NAFTA 2.0 has a notice and takedown
system. We work closely with the interagency on any trade and
treaty negotiations. We participated in the--on the delegations
and ensuring that the provisions of the updated do reflect the
U.S.'s position in that resulting provision is a good one and
terms of the strength of IP laws. And we feel that we are
hopeful that our trading partners will be able to effectuate
that.
Mr. Lieu. Thank you. I yield back.
Chairman Nadler. I thank the gentleman. The gentlelady from
Texas, Ms. Escobar.
Ms. Escobar. Thank you, Mr. Chairman.
Thank you so much for your testimony today and for being
here to answer our questions.
Only one entity, the Digital Music Association, has made a
bid to become the DLC. The DiMA comprises executives from
Apple, Spotify, Google, Amazon, and Sirius XM. Do you think
smaller digital music platforms or new entrants have been
overlooked by these large corporations?
Ms. Temple. Well, I will say that, the process to be
designated as the DLC is an open process. So anyone who wants
to be considered as an entity to be the DLC is certainly, or
was certainly, allowed to provide a submission to be
designated. It wasn't limited to just the larger corporations.
It just so happened we only received one submission to be the
DLC, unlike the MLC, where we did receive two designations.
Under the MMA, we don't actually have to choose a DLC. The
DLC does have to comply with the statutory requirements of the
MMA. So we will thoroughly look at the submission that we
received from the one applicant and ensure that it does reflect
the goals of the statutory provisions. And then we will make a
decision as to whether that entity should be designated as the
DLC.
Ms. Escobar. Okay. Thank you.
If Congress does not reauthorize the Section 119 license,
should it play a role in establishing another market-based
alternative, or should the market play out on its own?
Ms. Temple. Yes, we have said with respect to the Section
119 license specifically that, again, that license has really
reached its limit in terms of its effectiveness, and we think
that the marketplace itself has been able to rise up. So we
don't think that there necessarily needs to be an alternative
to the Section 119 license, but instead, we think that the free
market would be appropriate to allow for those entities who had
been using the license to be able to compete effectively.
Ms. Escobar. What impact would the reauthorization of this
section have on the Copyright Office, and is there any burden
in maintaining the Section 119 license?
Ms. Temple. Yes. As I said, for several years we have
recommended to Congress that they sunset that license. We will
obviously continue to administer the license and to distribute
royalties if the license does remain. But it is something,
again, where the royalties under that license are dropping, and
they are continuing to drop.
And so we just don't see that license as being an effective
way to support the copyright ecosystem. Instead, we think that
the free market at this stage, again, is more appropriate.
So we will continue to administer the license if it is
reauthorized, but we do strongly believe that over the course
of the last few years, it has really been obvious that that
license is no longer needed and that it should be allowed to
sunset.
Ms. Escobar. Do you think the Section 119 license
diminishes the value of copyrights?
Ms. Temple. Well, we have always said that for compulsory
license, which does allow for the use of copyrighted works
without the permission of the copyright owner, that they should
only be done in instances of true market failure.
And so if there isn't a market failure--and right now, we
don't think that there is--then we don't believe that the
compulsory licenses are needed any longer, and that is how the
copyright ecosystem should actually work. And so because there
is no more market failure with respect to the need for a
Section 119 license, we do think that, again, it is appropriate
to allow the market to take over.
Ms. Escobar. And what new legal or policy issues does the
office foresee becoming important over the next few years? Are
you planning on undertaking any new initiatives?
Ms. Temple. Yes. As I mentioned earlier in my testimony, I
think in response to a question, we do have our Section 512
study that is still ongoing that we hope to issue by the end of
this year. So looking at how effective the Section 512 notice
and takedown regime is with respect to piracy and the balance
that it is supposed to effectuate within the system will be, I
think, a critical aspect. We may have recommendations to
Congress on that issue.
We are also very interested in Congress potentially
addressing the issue of illegal streaming. Again, as I
mentioned, right now the penalties are really not on par for
violations of the unauthorized use of public performances in
contrast to the felony penalties that are in our law for
violations of the reproduction and distribution rights.
So I think looking at illegal streaming is certainly an
area, and we actually did--we just recently received a letter
from Congress, from the Senate side on this particular issue
that we will be responding to in the upcoming weeks as well.
Ms. Escobar. Thank you, Mr. Chairman. I yield back.
Chairman Nadler. The gentlelady yields back. The gentlelady
from Pennsylvania, Ms. Dean?
Ms. Dean. Thank you, Mr. Chairman.
And may I add my congratulations to you, Director Temple,
for your recent appointment. It is terrific and exciting.
I wanted to ask you two areas of inquiry, some of which you
have touched upon, but in particular, you mentioned the
analysis of overall workforce needs in your 2020 study. So when
you look at needs, I am wondering specifically what areas are
you looking at, and what do you hope might be some of your
takeaways? What are some of the biggest challenges and threats?
So a little more information on the 2020 study.
Ms. Temple. Yes, in terms of the Copyright Office workforce
needs?
Ms. Dean. Yes.
Ms. Temple. So one of the things that we have said is that
when we are modernizing the Copyright Office, we know it is
critical to focus on IT, but we don't want to just focus on IT.
We want to modernize our entire systems.
We want to make sure that our workflow and our processes
are really being modernized as well. We want to make sure that
we have the right positions that reflect either our new IT
systems or the new ways that we are going to have to do our
job.
So right now, we do have--we are working on having several
contractors come in to assist us with that process. We already
have the Office of Personnel Management in our office right
now, which is looking at our position descriptions and our
positions to make sure that, for example, they are adequately
graded, that we have enough. They will be in our office until
2020, and then they will issue a study on that issue.
Then we are also going to be engaging with a contractor to
help us with business process reengineering, looking at the
workflow aspects of our office to make sure again that we have
the most effective and efficient processes. And then we are
finally looking at organizational change management. We are
going to bring in a contractor to help us with that area as
well.
We understand in a business transformation of this
magnitude, it is critical that we have the buy-in of all of our
staff and that they understand how their positions may change
and are supportive of that. And so we are going to have a
consultant come in to help us with that.
So we have a number of areas that we are working on to
support IT modernization and modernization of the office as a
whole that really aren't focused exclusively on the IT
development side.
Ms. Dean. Are you also looking at diversity and inclusion
across the board in the organization? I serve on the Diversity
and Inclusion Subcommittee in Financial Services. And it is
interesting to take a look at organizations. I had a roundtable
in my district. We had business. We had law enforcement. We had
educational leaders.
As part of your study, are you looking also at that, not
just percentage of diversity--women, people of color, those who
are disabled, all kinds of diversity--but across the spectrum
of the Copyright Office?
Ms. Temple. Yes. You know, I take those issues very
seriously, myself personally. We are working with the Library.
The Library actually just did develop a group, Library wide, to
look at diversity and inclusion issues. So we have a--my senior
adviser, actually, a direct report of mine, is actually working
on that group.
So she is going to be helping the Library, Library-wide in
terms of those initiatives and is also spearheading those
initiatives for me personally within the Copyright Office.
Ms. Dean. Some of my common sense takeaways from having
conversations about that is, number one, sometimes people just
think their offices are diverse, and then they actually take a
moment to look around, and then they find they aren't. So it is
being sort of deliberate and intentional about making sure you
are looking at that.
And number two is sort of setting goals. So I am delighted
you are looking at that.
I will flip real quick in the one minute I have remaining.
Can you tell us about any plans you have to evaluate or
potentially outsource additional functions, privatizing any
functions that you might be doing, or are you trying to, in
your overall study and modernization, not do that kind of
outsourcing?
Ms. Temple. We think that it is important that the
copyright system of the United States is run by the United
States and is controlled by the Copyright Office. So that is
the main focus. We are, of course, looking at creative options
for resources and funding.
So, for example, we are exploring the possibility of no-
cost contracting as part of the way to fund our IT
modernization. So while we think it is important to maintain
the Copyright Office IT systems within the Copyright Office, we
are certainly willing and are looking right now at ways to
creatively fund the development of that system.
Ms. Dean. Terrific. Thank you, Director Temple.
Thank you, Mr. Chair. I yield the remainder of my time.
Chairman Nadler. The gentlelady yields back the remainder
of her time. The gentlelady from California, Ms. Bass.
Ms. Bass. Thank you, Mr. Chair. And let me join everyone
else in congratulating you on your position, and I enjoyed our
conversation, look forward to working with you.
Ms. Temple. Thank you.
Ms. Bass. The Music Modernization Act presents a unique
opportunity to address inequities artists of color have faced
for decades due to a lack of access and representation. Today,
there has been a 72 percent increase in on-demand audio
streaming. Hip hop surpassed rock as the most popular in terms
of total consumption in the United States, and 9 out of 10 most
streamed songs in 2018 were hip hop songs.
African-American and Latinx artists, hip hop and R&B
accounted for 29.7 percent of all streams in 2018, more than
doubling rock. This is also at a time when Latin music has
experienced record-breaking revenue growth due to streaming in
both English and Spanish.
The MLC will be tasked with ensuring that owners of music
composition copyrights receive royalty payments and maintain a
music ownership database that will allow copyright owners to
stake claims to their songs. So it is critical that the thought
leadership driving this process reflects every type of music
copyright owner. So when considering an entity responsible for
the Mechanical--excuse me--Licensing Collective, have you
considered the issue of diversity or encouraged diversity in
its leadership?
Ms. Temple. I will say, yes, that is certainly an issue
that we have heard some concerns about from some of the
commenters who have participated in our rulemaking process.
We--by statute, of course, the entity that is designated as the
MLC does have to represent, be endorsed by, and be supported by
the largest number of musical work copyright owners or the
largest percentage of musical work copyright owners. And so
that will by statute ensure that the MLC does have a diverse
representation in terms of the types of artists that it will
have on its board.
We did receive one comment, or a couple of comments, about
just the diversity in terms of ethnicity and race on the board
as well. We were pleased that in response to those comments, we
did ask questions of both MLCs, and both who have proposed to
be designated as the MLC have actually submitted comments to us
committing to actually having a diverse and considering a
diverse board. So we are very pleased by the response that we
received from both of the entities proposing to be designated
that this is an issue that they take seriously.
Ms. Bass. Excellent. Excellent. Thank you.
Some have argued that the new blanket licensing system
flips the burden from digital service providers to the rights
holders and songwriters. Jeff Price, a board member of the
American Music Licensing Collective, which is one of the
candidates for the Mechanical Licensing Collective, said that,
``Unlike before, where the digital service providers would have
to find you and pay you, now you have to know about the MLC,
regardless of where you are on the planet.''
So how do you respond to these concerns, and are they
addressed in your designation process?
Ms. Temple. Well, I think that partially they are actually
addressed in the Music Modernization Act language itself. There
is an obligation on the part of the entity that is designated
as the MLC to make sure that they do outreach activities to
alert songwriters to the need to sign up with the MLC.
Ms. Bass. Do you know how they would do--how they would
conduct the outreach?
Ms. Temple. Yes. That is something that we did actually ask
for information on from both of the designees, and so that is
actually in terms of how they plan on doing it, and that is
something that anyone can go on our website and see some of
their plans in terms of outreach.
They are also supposed to work with the DLC once it is
designated, and the DLC itself is also supposed to provide
outreach activities to those who come to their platforms,
letting them know that the MLC exists and that they are
encouraged to sign up. And then, separately, the Copyright
Office also has statutory responsibilities under the MMA to
provide outreach and education activities.
And so we are committed, once the designation occurs, to
take seriously those activities and really ensure that we can
do our part in supporting the operation of MLC and ensuring
that songwriters are aware of the need to participate to ensure
that they are able to get paid and get their royalties.
Ms. Bass. And do you have a way of monitoring how that
outreach is going?
Ms. Temple. Well, as I mentioned earlier, you know, one of
the main issues is to ensure that there are not a large number
of unclaimed funds remaining in the MLC, and that is why it is
important for us to conduct a study on best practices, to
reduce the amount of unclaimed funds. And so I think that will
be a key area, us reviewing the practices of the MLC once it is
designated, as well as best practices overall, and making
recommendations to Congress and to the MLC itself in terms of,
again, best practices to reduce the amount of unclaimed
royalties that they might have.
Ms. Bass. Thank you very much.
Chairman Nadler. The gentlelady yields back. The gentleman
from North Dakota, Mr. Armstrong.
Mr. Armstrong. Thank you, Mr. Chairman.
I know you had spoken with Mr. Cline and Mrs. Roby and
touched on digital piracy, and you spoke to the Copyright
Office's role on this subject. I would like to highlight some
findings from a recent U.S. Chamber of Commerce, and NERA
Consulting issued a study on the impacts of digital video
piracy on the U.S. economy.
As of 2018, there were more video streaming subscribers
compared to paid TV subscribers and approximately 500 licensed
online video portals. Twenty-six-point-six billion viewings of
U.S. films were digitally pirated each year, costing over $29
billion annually. You mentioned that this harms not only the
content creators, but also the broader economy. And I know that
your office is not the enforcement agency, but can you explain
current enforcement authority to prevent such piracy?
Ms. Temple. Yes. The current enforcement authority is
handled by the Department of Justice. Again, as I mentioned
earlier, we do work with them closely on policy issues with
respect to IP rights and updating our laws. We also work
closely with the Department of Justice, the Patent and
Trademark Office, and other parts of the interagency to ensure
that our trading partners also have strong IP laws in their
regimes. And so that is one thing that we do when we support
the interagency on treaty and trade negotiations to, again,
ensure that the global copyright ecosystem does protect
strongly the copyrights of individuals and of businesses.
Mr. Armstrong. And I am assuming pirating technology, I
mean, it is a constant battle. Which would be to my next
question and no matter how many enforcement agents we have, I
mean if there is 26.6 billion pirated viewings, I mean, you are
not going to get it at the viewer side. You have to get it
where it is being pirated. I mean, I just can't imagine the
monumental task that this is.
Ms. Temple. Yes. It certainly is a monumental task, and I
think that is why there is just not one way to address it.
Certainly, making sure that we have a strong IP framework is an
important aspect of it, but we are also encouraged by voluntary
initiatives where the digital platforms and content creators
are working together voluntarily to address this issue. So that
is another area that can really help to combat the rising
piracy as well.
Mr. Armstrong. And you recommended that we continually
update our laws to keep up with piracy. What policy changes can
we make, either in the laws themselves or allowing these
agencies to adapt more quickly to better protect this content?
Ms. Temple. Yes, as I said, making sure that we are
reflecting the way that piracy occurs is one of the most
important things that we need to do. So updating our laws, for
example, to provide for felony penalties for illegal streaming
is something that, again, we strongly support and have
supported in the past. We are, as I mentioned earlier, also
reviewing the notice and takedown regime of Section 512 to see
whether it is still providing the balance that Congress
intended and whether there are areas that need to be tweaked
either through legislative change or through additional
voluntarily initiatives. And so those are some of the ways that
both Congress and the Copyright Office can help to ensure that
piracy is combated.
Mr. Armstrong. And I guess this is just kind of my last
question, and I am not sure there is an answer for it. But we
do a really good job of--well, I hope at least sometimes we do
a really good job of dealing with the issue in front of us. But
in this universe, how do we promulgate policy that allows us to
deal with something we don't even know exists yet that could
come on the horizon in 6 months?
Ms. Temple. Right. That, again, is the perennial issue in
terms of trying to get ahead of the pirates. Any time we have
new technology, new technology can often be used by pirates as
well. So I think, again, having a multipronged process to get
out ahead of it is important, ensuring that our copyright laws
are kept updated, but also ensuring that there are effective
ways for the industries themselves on a voluntary basis to work
together to address piracy is an important aspect as well.
Mr. Armstrong. Thank you. I yield back.
Chairman Nadler. The gentleman yields back. The gentlelady
from Texas, Ms. Jackson Lee.
Ms. Jackson Lee. Thank you very much, Mr. Chairman.
It is stunning that we have not had a hearing since 2015.
So I congratulate the Chairman and Ranking Member for a very
important hearing. And as well, congratulate Ms. Temple for her
appointment, moving from so many different positions, but now
the person. And so, again, congratulations to you and your
team.
I, too, want to focus on the Music Modernization Act and
also the question of modernization dealing with the technology
in your office, which I think is extremely important, the
status of the Copyright Office IT. And at the same time, what
kind of firewalls are you putting in place to avoid hacking,
the infringement from foreign adversaries, to be very honest,
because what you have may have some measure of intelligence to
it in terms of its quality or value to international operators.
But let me raise this point. Some have argued that the new
blanket licensing system flips the burden from digital service
providers to the rights holders and songwriters. Jeff Price, a
board member of the American Music Licensing Collective, AMLC,
which is one of the candidates for the Mechanical Licensing
Collective, said that, ``Unlike before, when the digital
service providers would have to find you and pay you, now you
have to know about the MLC, regardless of where you are on the
planet.''
So how do you respond to these concerns, and are they
addressed in your designation process? Question number one. And
Price also estimates that the new system could leave $4 billion
to $5 billion of accrued royalties undistributed, which
concerns me. I have lived with the music licensing issue and
trying to balance it for many years in this committee, and we
did make great progress in the past year.
Price also estimates--and so what measures can be taken to
ensure that rights owners are properly compensated and not
unduly burdened in collecting that compensation?
Ms. Temple. Yes, thank you for the question.
This, again, is a very important one, and it is a critical
part of whatever entity is designated, that they ensure that
they reduce the amount of unclaimed royalties. I will say that
we are unaware of where Mr. Price got the figure of $4 billion
to $5 billion. That did not come in any of the comments that we
received in terms of the possibility of unclaimed royalties. So
we would be interested in terms of where that estimate is
coming from.
But we do think, again, that there are specific provisions
in the statute that will help to reduce those unclaimed
royalties. Again, in addition to this having to be a priority
of whichever entity is designated, by statute the entity has to
create an unclaimed royalties committee to review these issues.
They have to provide audits to ensure that they are operating
effectively. Those audits are going to be made available to
Congress and to the Copyright Office.
And then, again, we will be undertaking a full study that
will seek comments from all of those who are affected by the
MMA to ensure that there are best practices implemented by the
MLC to reduce the amount of unclaimed royalties. And again,
that study will be issued in July of 2021.
Ms. Jackson Lee. So your action item would be that you will
be studying the processes that have been established. Well, let
me follow up by saying under Title I of the Music Modernization
Act, digital music providers, such as Spotify and Apple Music,
will soon be able to obtain a blanket license. So how will the
Copyright Office help ensure that the transition to the blanket
license system will be seamless?
Ms. Temple. Yes. We are committed to helping to make sure
that that process works effectively. We, again, immediately
upon the passage of the MMA, issued certain rules and
regulations that were required primarily for the pre-1972 sound
recordings part of the MMA and then now are in the process of
implementing regulations for the Section 115 aspect of the MMA.
Once we designate the MLC and the DLC, we will then work
closely on implementing regulations. Again, we have to do
regulations on the form and type of notices, of the blanket
license, the form and type of notices of license activity,
usage reports, usability issues, interoperability issues, as
well as privacy and consideration of privacy and confidential
information.
Ms. Jackson Lee. Let me----
Ms. Temple. So we have a lot to work to do.
Ms. Jackson Lee. Right.
Ms. Temple. And we are committed to doing it.
Ms. Jackson Lee. Well, let me get these two other questions
in. Let me try to understand how your IT is working to avoid
breaching and security breaches. And then, two, your outreach
to minorities who need that kind of outreach as you go forward
to understand this process.
Ms. Temple. Yes. So in terms of IT modernization and the
security of our systems, that is a primary goal of our office,
to ensure that our systems are secure. We obviously take in a
lot of very important and valuable information both information
as well as the data and deposits themselves. So we think it is
critical that the Copyright Office----
Ms. Jackson Lee. Minority outreach?
Ms. Temple. Hmm?
Ms. Jackson Lee. Minority outreach?
Ms. Temple. And minority outreach. In terms of minority
outreach, again, that is a critical area. We are expanding and
have expanded our outreach and education program recently. We
just recently had some students from the Hispanic Bar
Association in our office to encourage them to seek IP law as
an appropriate career.
I just recently spoke at the Howard University about
copyright and social justice, which is something that a lot of
people don't equate copyright with, but copyright is an aspect
of social justice. So that is an area that I personally am
interested in and that we have been pursuing in recent months
as well.
Ms. Jackson Lee. Thank you, Mr. Chairman. Thank you very
much. Congratulations.
Ms. Temple. Thank you.
Chairman Nadler. The time of the gentlelady has expired.
The gentleman from Florida, Mr. Deutch.
Mr. Deutch. Thanks very much. Mr. Chairman, thanks for
holding the hearing.
Thanks to our witness for being here, and congratulations
on your formal nomination.
I know you have been doing the job for quite a while, and I
appreciate your service and willingness to lead the office into
the 21st century. I just want to follow up on some of the
questions that my friends Mr. Nadler and Ms. Jackson Lee have
already touched on.
As co-chair of the Songwriters Caucus with my friend
Congresswoman Roby, we meet with songwriters from across the
country, and there has been a good discussion about the MLC and
compiling the information for the MLC and matching the
information of songwriters. I just wanted to make sure I
understood.
On the issue of market share, market share is going to be
determined based on streaming and ownership information. But
obviously, if the database isn't complete, then payments could
end up poorly representing the actual marketplace. The statute
provides discretion.
I just wanted to reemphasize some of what has already been
discussed about the focus being on making sure that this is
done right, obviously. Not focusing solely on accomplishing a
task in time for a deadline, which would then lead to rushing
to make payments from unmatched funds before the database is
complete, as complete as possible anyway, and making sure that
the pool is as small as possible.
That is--that is the way you are approaching it, and I just
want to confirm that.
Ms. Temple. Yes, and we were again pleased that both of the
entities that wanted to be designated as the MLC agreed with
the interpretation that unclaimed funds cannot be distributed
until 2023. So that will actually ensure whoever is designated
as the MLC has time to actually develop a framework to reduce
the amount of unclaimed funds.
Mr. Deutch. Great. I appreciate that.
Second, as you know, Cloudflare is a large company that
provides a number of services related to Internet security and
the delivery of content over the Internet. There is no doubt
services are valuable to its many legitimate, law-abiding
customers. Indeed, I have recently seen reports that the
Copyright Office uses its services as well.
I have also seen, however, some concerning reports of what
appears to be a darker side of the use of Cloudflare describing
its widespread provision of services to known bad actors,
including hate speech sites, counterfeiters, even terror
groups, according to one of the reports that I read. And I just
ask whether you would agree to review the Copyright Office's
use of Cloudflare in light of these really disturbing reports.
Ms. Temple. That is an important question. As you know,
post centralization of IT was in the Library. Those issues are
decided by OCIO, the Librarian's OCIO. We have raised this
issue, in light of stakeholders' concern, with OCIO that some
have questioned the use of that particular entity, and so we
are hopeful that they will review that issue.
Mr. Deutch. So you have raised it and asked them to do
what?
Ms. Temple. We asked them to review the issue to see if it
is appropriate for them to use that entity.
Mr. Deutch. Okay. I appreciate that, and we would
appreciate being kept abreast of that analysis as well.
I would like--I would like to ask about the fast-paced
nature of creation and publication online today.
Photojournalists obviously tweet images of breaking news.
Artists and poets post moving works on Instagram. Authors now
write on blogs. And this modern-day publishing is done in an
instant.
And the tools make it incredibly easy to share creative
content online, but obviously, there are challenges for your
office. If you could talk about some of the challenges and
opportunities that you see as you work to keep pace with
protecting those creators who share their work online who are
doing really important work, creators who are fortunate to have
copyright protection. But if they don't have the benefit of
statutory damages, their work then in the blink of an eye is
then put at risk.
So if you could just talk about how you see this going
forward?
Ms. Temple. Yes. And we know that this is a critical issue.
Obviously, in order to get statutory damages, they have to have
registered within a certain amount of time with the Copyright
Office, and so we want to make sure that, again, as we develop
a modernized system, we make it as easy as possible to register
and also to register, you know, a high volume of works.
We understand, for example, photographers will take
thousands of pictures in one session. Right now, we have a
group registration option for photographers that does allow
them to provide up to 750 photographs with us at one time, and
that is to ease the burden of individual filings of copyright
registration applications.
In the future----
Mr. Deutch. If I can just ask, has that been successful
since February when it was implemented?
Ms. Temple. It has been successful in the sense that it
allows the Copyright Office to adequately use its resources to,
handle a large volume of photographs. We do understand that
there are some concerns by photographers that that number is
too low. And so one of the things that we are looking at as we
that continue to modernize is whether there are ways that we
can use technology to more quickly review those types of claims
where they are high-volume claims.
And yes, we would be able to raise that limit beyond 750 if
we are able to use technology. One of the things that we would
love to do is, for example, allow people to register through
their mobile telephone so that they are able to do it easily,
use API to be able to be interoperable with our office. So
those are some of the areas that we are exploring in terms of
modernization right now.
Mr. Deutch. Terrific. Great. Thanks very much.
Ms. Temple. Thanks.
Chairman Nadler. The time of the gentleman is expired. The
gentlelady from Texas, Ms. Garcia.
Ms. Garcia. Thank you, Mr. Chairman.
And Ms. Temple, thank you for being here. I would like to
congratulate you, and I do apologize. I did have another
hearing that I am sort of bouncing around from one to the
other. But, so if I ask anything that you have already talked
about, please excuse me.
But I wanted to start with picking up where my colleague
and fellow Houstonian left off, Congresswoman Sheila Jackson
Lee. In the blanket license that you are going to be able to
give now to Spotify and Apple Music, is there a reason that a
blanket license was chosen versus the old song-by-song
licensing, and will that cause any additional challenges for
you?
Ms. Temple. So a blanket license was chosen to really
further effectuate the efficiency of the music 1854 licensing
system. The old song-by-song license, as you can realize, these
individual services are using millions and millions of works.
So if they cannot find the songwriter or copyright owner in our
database, they will have to file it.
For example, they had to file notices with the Copyright
Office to be able to get a license under Section 115. We
received in millions of individuals NOIs, pursuant to that
song-by-song license approach. And so that really was not the
most efficient way to market or music licensing under----
Ms. Garcia. Do you see any issues arising from that?
Ms. Temple. Arising from the----
Ms. Garcia. From doing the blanket license?
Ms. Temple. No. This is, again, something that the
Copyright Office has reviewed for several years. We supported
the creation of a blanket license under Section 115 for many,
many years even before our Section 115 report in 2015. So this
is something that we think will actually further support the
efficiency of the music licensing market and actually allow
songwriters to get paid more effectively.
Ms. Garcia. Right. And then I wanted to also talk a little
bit about the piracy issue. I realize that DOJ does the
enforcement. You do not. But what steps are you taking or are
you taking any steps now to kind of monitor and create the
data, and can you share with us today if there is--since you
started doing it, if you are already doing it, how big the
increase is? Is it as big as we think, or we don't even know
the full of it?
Ms. Temple. I don't want to get out ahead of us in terms of
the fact that we are right now--in the process of completing
our report on Section 512, and so we will have some more
specific data once that report is released.
Ms. Garcia. When will that be released?
Ms. Temple. So that will be released by the end of this
year.
Ms. Garcia. Okay.
Ms. Temple. And so that is, again, one of the areas that we
are working on in the policy side to ensure that our laws are
kept updated to deal with piracy. Again, we also work with the
interagency to ensure that our copyright framework, both
domestically and internationally, is strong. So we do support
delegations for treaty and trade negotiations as well.
And then, finally, I think the U.S. government has been
interested in supporting, if it can, voluntary initiatives
between digital platforms and content creators to see if there
are things that they can do even outside of specific laws to
address this issue voluntarily.
Ms. Garcia. Well, but to assure the public today, I mean,
you are telling me that you are monitoring----
Ms. Temple. Yes.
Ms. Garcia [continuing]. And you are looking at it. And you
look at it not only here in the continental U.S., but you are
looking at it globally?
Ms. Temple. Yes. We have a full international policy
affairs department that helps assist the rest of the United
States government as they look at these issues. We often
review, for example, the laws of other countries to see if they
reflect the strong IP framework that we have here in the United
States, and we will provide suggestions to them to consider as
they are updating their laws to ensure that that they are
effectively addressing piracy as well.
Ms. Garcia. And you, as a representative of the United
States, are fully engaged and fully participating in any global
forums or, you know, coalitions that are looking at this topic?
Ms. Temple. Yes. We, you know, by statute participate in
foreign delegations, as mentioned. We work very, very closely
with the United States Trade Representative. We also serve on
delegations to the World Intellectual Property Organization. So
that is something that we do regularly.
Ms. Garcia. Right. Very quickly, I just want to go on
record as being supportive of the small claims court. I think
anything we can do to make it easier for the average, everyday
American to be able to go through this process would be very
helpful to many people that we represent, and I hope that you
can support that and assist in any way you can if that were to
become the law.
Ms. Temple. Yes. We do fully support that.
Ms. Garcia. All right. Thank you.
Yield back. Thank you, Mr. Chairman.
Chairman Nadler. The gentlelady yields back. The gentlelady
from Arizona, Ms. Lesko.
Ms. Lesko. Thank you, Mr. Chairman, and thank you, Ms.
Temple.
And I think since you are going to be done pretty soon
because I think I am the last one over here at least. I think
there was questions already answered because I was going to
talk about STELAR and the reauthorization or your
recommendation not to reauthorize it. And I was told somebody
asked you what will happen to the satellite subscribers that
utilize Section 119 license. But more specifically, you know, I
have concerns about maybe the people that have recreational
vehicles, truckers, those type of folks. What are their options
going to be, and are you considering grandfathering in some
customers?
Ms. Temple. As I said earlier, we looked at this issue for
many years. We do think that the usage of that license has
really dropped significantly so that there will not be a
significant market harm to those rural communities that rely--
have relied on the license in the past and that the free market
will allow for other entities to come up and to allow for the
actual usage of various satellite transmission. So we don't
think that it needs to be done rather through a compulsory
license, but it can be done through the free marketplace.
Ms. Lesko. And Ms. Temple, since I wasn't here for your
answer, how many people, how many consumers utilize that
service?
Ms. Temple. So, right now, I think it was mentioned earlier
that there was an estimate that there were about 800,000
subscribers, and I think you mentioned that in your testimony
as well. One of the issues that we recognize is that it is not
clear and we did ask, I think, that question of the services
exactly what types of subscriptions they are reflecting. Are
they household subscriptions or others?
And so that is one issue that we are seeking further
information on.
Ms. Lesko. And Mr. Chairman, I guess I just want to say
please keep in mind these people. And even though it is a
relatively small number, I know that when the service is taken
away, I assume they are not going to be happy. So if we can get
some more information on that, and I will try to find out how
many of these subscribers are in my district. And so thank you
very much, Ms. Temple, and I yield back.
Ms. Temple. Thank you.
Chairman Nadler. The gentlelady yields back. The gentlelady
yields back.
There being no further questioners, this concludes today's
hearing. We thank the witness for attending and for her work.
Without objection, all Members will have 5 legislative days
to submit additional written questions for the witness or
additional materials for the record.
Without objection, the hearing is adjourned.
[Whereupon, at 11:45 a.m., the committee was adjourned.]
APPENDIX
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