Friday, March 28, 2008

Fordham IP Law & Policy Conference: copyright in the morning

Fordham Intellectual Property Law Institute, Sixteenth Annual Conference, Intellectual Property Law & Policy

Orphan Works legislation in the U.S. and around the World

Moderator:

Steven J. Metalitz, Mitchell Silberberg & Knupp, Wash. D.C.

Speakers:

Prof. Willem Grosheide, University of Utrecht

Orphan Works Regulation: The European Perspective

Oliver Metzger, U.S. Copyright Office, Wash. D.C.

Orphan Works Legislation in the U.S.

Panelists:

Tilman Lüder, Head of Unit, Copyright and Knowledge-based Economy, DG Internal Market and Services, European Commission, Brussels

Jule L. Sigall, Senior Policy Counsel/Copyright & Trademark, Microsoft Corp., Redmond

Unfortunately, the subway delayed me so that I missed most of the initial discussion.

Metzger: Proposals to change the Copyright Office’s draft orphan works proposal:

Clearer guidance as to search criteria—you must follow leads that develop during the search even if they aren’t on your checklist of best practices

Incorporate best practices from industry

Certify electronic databases purporting to link PGS works to owners

If no info appears on the face of the photo, you still can’t just stop; you have to do something more

He classified some of the proposals as speed bumps: slowing down bad actors

Put definition of reasonable compensation in statute

User should have to plead orphan works early in litigation rather than during remedy phase

Attorneys’ fees if bad faith negotiation of reasonable compensation—persistent complaint of photographers was that their licenses are low value; taking statutory damages off the table makes lawsuits impossible

Limit orphan works protection to nonprofit or nonfiction uses

Q: Europe lacks a registration system; how do you solve orphan works there?

Lüder: Collecting societies! They have extensive databases and are work-specific. If you check with the photographers and painters, that would be diligent (if you went to the various member states). One option is an extended collective management of orphan works—escrowing compensation for orphan works (and expecting that the orphan’s owner will never show up, and eventually the money can be spent elsewhere). Sweden: if a collecting society represents a substantial number of Swedish authors in the field, the society is deemed to represent all those authors.

Other options: The Gowers report in the UK: create a copyright exception. Europe has to date seen this as a clearance issue—a difficulty in obtaining a license. But Gowers proposes an exception, which would require an amendment to the Information Society Directive. This probably is too ambitious. Another option is having some public body grant a license immunizing the user from anything but a reasonable royalty on future uses if the owner shows up. The problem is that there is no central body to do that right now.

Sigall: We need incremental change, not wholesale. Tinkers with remedies, not rights and exceptions; unintended consequences are greater with rights and exceptions—US correctly took the remedy approach in sec. 512 (comment: and we know of course there were no unintended consequences there!). This is a good change because it’s largely nondisruptive of current practices. To the extent a country already has collective rights organizations, you take advantage of them. Reasonable search as a requirement is adaptive and evolves over time, and is appropriate for a problem that spans all types of works and all types of users. Each sector has its own concerns that are hard to address with generalized rules.

Metzger: Even in music, one of the collecting societies proposed that music be entirely exempted because their databases were comprehensive. That painted a target on them: six comments replied that they’d searched and not found particular musical works, like Yiddish folk songs. Without a concept of virtual/extended representation, collecting societies will not be perfect.

Lüder: This is a particular concern with respect to materials of interest to archival uses, which are more likely to be left out of the databases.

Metzger, in response to question about photos: We allow group registration—you can send 1000 photos to the Copyright Office with no description, and so checking with the Copyright Office based on a description of the image will be useless. Registration just isn’t helpful. The Corbis database, however, might help you identify an image, and part of reasonable search for a photo might be doing that.

Jones, Access Copyright (Canada): Access Copyright plays a continued search function—looking for the copyright owner after the orphan works license has issued, and they’ve allocated over 50% of the royalties. They are using a staff of 5 librarians to search every year. Information that wasn’t available a year ago becomes available. (Comment: Available to an expert with significant resources to devote to the problem.)

Metzger: The investment decisions should be able to be made at a particular time—the printing press has to roll at some time. So the Office didn’t require any ongoing search that would retroactively undo the categorization. If you want to make a new use, you need a fresh search.

Comment: the idea was the collecting societies, not the users, would keep looking for the orphan work’s owner—that’s where the tech is playing an evolving role.

Metzger: That was a consideration in the Copyright Office, and it was why we didn’t want to fix the meaning of reasonable because tech and markets change over time.

Comment about EC: Trying to develop search guidelines sector by sector. Every country in Europe has elaborate film museums and archives; France keeps a register of all contracts relating to cinematographic works. So expect some guidelines.

Lüder: What happens if a work is recognized as an orphan in one country? Will there be reciprocity?

Metzger: The US approach is not to designate the work as an orphan, except via shorthand, but to designate a relation between a defendant/user and a work. So national status may be relevant to what a reasonable search is. So there’d be no particular way to recognize an orphan works designation from another country.

Access Copyright fellow: We issue licenses only in Canada. But research done in Europe would weigh heavily in deciding to issue a license. (Comment: It seems to me that Access Copyright could claim that a US user ought to pay it for a Canadian orphan work, and that failing to do so is unreasonable even if Access Copyright isn’t the copyright owner. I don’t know how that would play out—if that argument is accepted, then orphan works legislation would work like the Texaco and Kinko’s cases to encourage the development of collective licensing schemes even when the licensor doesn’t actually own or have rights to license many of the particular works at issue.)

Copyright Developments in Canada, Australia and New Zealand

Moderator:

Prof. Robert Burrell , University of Queensland, Brisbane

Canada

Prof. Daniel Gervais, Acting Dean of Common law, University of Ottawa

Recent Developments in Canadian Case Law

Parallel imports of chocolate bars, defeating the exclusivity of the Canadian licensee. There was no trademark claim because there was no difference in the products, which suffices under Canadian law, and so the Canadian licensee sued for secondary infringement. To win, Kraft Canada had to show (1) a valid copyright in logos; (2) sale of them; (3) if they’d been made in Canada by the actual maker (in this case Kraft’s parent company) they would have infringed the copyright. Kraft was successful at early stages, but the Supreme Court heard the appeal. Arguments: (1) the logos are incidental to the sale of the chocolate, and copyright shouldn’t apply; (2) Kraft’s parent company is the copyright owner; despite the exclusive license, they can’t infringe a copyright they in fact own.

There were several opinions; the only thing that all 9 agreed on was that copyright protects logos. Some argued that there was no legitimate economic interest in protecting the logo instead of the chocolate. If the reasonable consumer had to decide whether the logos are important to the transaction, the answer would be “no.” But 4 justices thought there was no primary infringement because the exclusive licensee could not sue its parent for infringement, and thus no secondary infringement.

Quality King doesn’t apply here: the labels were made elsewhere, so this fact pattern would have been infringement under US law.

Other trends: increasing use of statutory and punitive damages in copyright cases. One court added $40,000 in punitive above actual damages. In a case involving Microsoft, a court gave maximum statutory damages for each infringement, which was $500,000, plus $200,000 in punitive damages.

A federal court of appeals prevented the Copyright Board from certifying a private copying levy on digital audio devices based on the memory in those devices.

Justice William Vancise, Chairman, Copyright Board of Canada

What are “adequate reasons” in a Decision of the Canadian Copyright Board? To what Degree Should Appellate Courts Defer to the Expertise of Specialized Tribunals? And Do They?

Vancise is not happy about the last decision discussed by Gervais. The Board recently affirmed its earlier decision and provided more reasons for doing so.

Steven J. Metalitz, Mitchell Silberberg & Knupp LLP, Wash. D.C.,

Why Canada should be put on the Special 301 Priority Watch List for 2008.

Metalitz suggests that we shouldn’t get distracted by whose law is better (yeah, why should we do that?) or whose dollar is stronger; Canada has many nice features IP owners would like to see in the US, but there are also problems.

Two big problems: (1) Enforcement. Customs officials don’t have the authority to seize pirated/counterfeited goods without a court order, which is hard to get. There’s a general problem of lack of resources devoted to copyright enforcement. There’s a longstanding policy of not acting against retailers even though they’re often burning their own pirate copies. Sentences are often minimal; there’s no confiscation of proceeds of the crime.

(2) Modernization. WIPO Internet treaties are now 12 years old and Canada has done nothing. The Canadian government agrees—parliamentary reports recognize new laws are needed. We’re not talking about copying US law; many countries around the world have complied using legal regimes quite different from the US. It’s blinking at reality to say that a country that won’t comply with a 12-year-old treaty, with New Zealand the only other OECD holdout, is adequately enforcing the law against online piracy. Canada has the highest per-capita incidence of unauthorized file-sharing in the world, according to the OECD. Canada is a leading source of mod chips to circumvent access controls on video games.

Notice and takedown: Not strictly speaking required by the treaties, but many countries provide adequate and effective enforcement through a notice and takedown regime. Likewise, a growing consensus that P2P services induce infringement; should be made clear in Canada as well.

Howard Knopf, Counsel, Macera & Jarzyna LLP, Ottawa

How Canadian Copyright Law is already Stronger and Better than U.S. Law, and Why the U.S. Should Look in the Mirror Rather than at its “Special 301” Watch List

If the US could be on its own watch list, it would be.

There about 15 ways in which Canadian copyright law is better for copyright owners: broadcasters pay a lot more; small businesses, bars, restaurants etc. have to pay for background music as opposed to the US’s open defiance of the WTO; Canada has neighboring rights, worth $16 million/year in commercial radio alone (and given that Canada is about 1/15th the size of the US market, that would be 15 times bigger if the US had it); blank media levy; educators pay more; moral rights; no work for hire doctrine; 3 dozen copyright collectives, most of which are subsidized by the government; fulltime copyright board subsidized by the government; no parody right; no timeshifting exemption; Crown copyright; no sovereign immunity for provinces as there is for US states. Irving Berlin’s works are going to be protected longer in Canada than in the US. US may also have a “making available” problem given how case law is developing in the district courts.

Canada’s government doesn’t take 301 terribly seriously. Putting Canada in the same company as Korea and China? Knopf has never seen counterfeit goods for sale openly on the street in Canada as on the streets of NYC and Washington. There was a bust of 250,000 counterfeit CDs just recently. Enforcement is fine.

Canada has no obligation to implement the WIPO Treaty. Bruce Lehman has said that DRM was a big mistake, and we shouldn’t repeat that. If the US lightened up, Canada might move towards it—we don’t need strong DRM, but perhaps consumer protection from DRM. Asking us to do DMCA-like provisions is wrong. The issue has become politicized, due to extensive lobbying.

Panelist: Richard Pfohl, General Counsel, Canadian Recording Industry Ass’n, Toronto

Neighboring rights etc. are irrelevant to two core issues: DRM and enforcement. Canada’s not as bad as Russia, but that’s not a recommendation. Virtually everyone else has ratified the WIPO treaties and Canada lags. (Comment: And if every other country jumped off the Brooklyn Bridge, would you want Canada to do it too?) There is business consensus on this—the Canadian Chamber of Commerce are allied with the Canadian creative societies. Canada did commit to implementing the treaties when it signed them, and governments have repeatedly committed to doing so. There may be no enforceable legal obligation, but Canada should not renege on its commitments.

Comment: The fact that it’s been 12 years should tell us how solid that “consensus” in business is. Also, P2P hasn’t been solved in countries outside Canada. Also, a country that took 102 years to ratify the Berne Convention can’t complain about a 12-year delay.

Pfohl: Short-term issues have gotten weighed down with a laundry list of what people want: the broadcasters want exemptions from the reproduction right, etc. in return for agreement on WIPO and the other big issues.

Knopf: Canada has a very successful music industry, compared to other industries in Canada and compared to other countries’ music industries.

Pfohl: Small companies have profit margins of under 1%, and there have been layoffs.

Comment: This is like South Park: No matter what the issue, blame Canada!

Metalitz: Your parliament agrees!

Comment: You’re just whining (this is a quote, not my summary); you don’t need parliament. Go and do your job as a lawyer.

Comment from a Russian lawyer: Russia has implemented the two treaties in the new civil code. It extends to TPM.

Knopf: There’s a legitimacy problem with special 301. The WTO said you can’t take unilateral action under 301. As Israel asked, how can the US complain about noncompliance with 301 when no one is under any obligation to comply with it?

Side comment: Interesting thing about the Kraft Canada case: the incidental use argument came from the judges, not the parties. 3 judges put copyright misuse squarely on the radar—that’s the next issue coming up.

Comment: Australia was on the watch list for two things: treatment of parallel imports (as to which there is no international obligation), and a judgment where a court had the temerity to ask US movie studios to prove they owned the copyrights in the movies they were suing over. Australians didn’t think those things were all that important.

Metalitz: The standard is not international norms, though that’s relevant, but whether there’s sufficient protection for US copyright owners. And Australia’s not on the watch list now. (But the commenter pointed out that past practice may influence current perception of 301.) Canada is out of step with the international consensus, which isn’t inherently wrong, but digital piracy in Canada is bad and getting worse.

Australia

Speaker:

Prof. Anne Fitzgerald, Queensland University of Technology Law School, Brisbane

Recent Developments

Criminal copyright enforcement is new and needs to be reviewed, because the courts dealing with the issues are generally inexperienced with criminal law, being commercial courts, so there will be problems of unfamiliarity with procedure as well as substance.

New Zealand

Speaker:

Prof. Susy Frankel, Victoria University of Wellington, New Zealand

Discussed recent developments and the importance of parallel imports in New Zealand, which has been trade-focused and leery of having copyright expand to the extent that design rights would expand to interfere with trade.

New Zealand is considering TPM law only covering copy controls, not access controls, recognizing that it can be hard to distinguish those. But adding access is controversial: what’s the copyright justification? (Circumvention for making permitted copies would also be permitted, under the proposal. One reason this seems ok is that permitted acts are not broad; there is no broad fair use right.)

Panelists:

Prof. Peter Black, Queensland University of Technology Law School, Brisbane

Recent case, asserting crown copyright in surveyors’ plans. The legislature proscribes very closely what the plans must look like. As Fitzgerald explained, the issues were: (1) who owns copyright, the surveyor or the government? (2) Does the government have a license to use the plans, e.g. to create a digital database? Answer in the lower court: the surveyor, but the government has a license. The High Court will be hearing the case soon. The case recalls a discussion of whether crown copyright should be entirely eliminated.

Also Black mentioned the possibility of a “3 strikes and you’re out” rule for clients of ISPs caught infringing. It’s not clear how far that proposal will go, but it reflects a trend of increased crackdowns.

Time-Warner person: Are there protections against circumventing conditional access like cable or satellite? Why not protect the same sorts of distribution models via the Internet?

Frankel: Yes, there are such provisions, but TPMs are regarded differently. NZ has no immediate neighbors with a footprint that leaks.

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