Copyhype

It’s a new year, and the world is split between those who call it “two thousand nineteen” and those who say “twenty nineteen.” What can we expect in U.S. copyright law and policy over the next twelve months?¹Previous installments include 2018, 2017, 2016, and 2015. Let’s take a look.

Congress

The 116^th Congress gaveled in on January 3, 2019, and the most significant change from the 115^th Congress is the flip in party control of the majority. While copyright historically has been a nonpartisan issue, the change in majority control will affect what non-copyright issues will receive priority and thus what attention will remain for copyright issues.

The House Judiciary Committee has jurisdiction over intellectual property, but it also has jurisdiction over several other key political issues. It’s most likely that those issues will dominate the Committee’s attention for at least the first several months of the new Congressional session. But when it does turn toward copyright, it will do so under the eyes of two Representatives who have been very active on copyright issues. Both Chairman Jerrold Nadler (D-NY) and Ranking Member Doug Collins (R-GA) were critical to the drafting and passage of the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA), which was signed into law last October, and have introduced or co-sponsored many other copyright bills over the years.

Among the first set of issues that the Committee might take up this year is copyright small claims. Last session, Reps. Hakeem Jeffries (D-NY) and Tom Marino (R-PA) introduced the Copyright Alternatives in Small Claims Enforcement (CASE) Act, which would have created a streamlined tribunal for hearing small copyright claims based off recommendations made by the US Copyright Office in its 2013 report on small copyright claims. The Committee held a hearing on the bill just this past September, with a number of members indicating support for moving the bill forward.

We may also see a bill addressing resale royalty rights. A resale royalty provides visual and fine artists—who often rely primarily on income from the sale of their individual works rather than licensing their exclusive rights provided through copyright—with the opportunity to capture a percentage of the proceeds when their works are resold through art auctions.²See U.S. Copyright Office, Resale Royalties: An Updated Analysis (2013). Although there have been a number of resale royalty right bills introduced in previous Congressional sessions that never advanced, there are at least two indications of greater momentum this session: first, the issue’s biggest supporter, Chairman Nadler, is now in charge of the Committee, and second, the most recent bill, the American Royalties Too Act of 2018, was introduced in both the House and Senate by Judiciary Committee leaders, giving it a higher stature than previous versions of the bill.³See, e.g., American Royalties Too Act of 2014, H.R. 4103, S. 2045, 113^th Cong. (2014); American Royalties Too Act of 2015, H.R. 1881, S.977, 114^th Cong. (2015).

The Committee may also continue its work on modernizing the Copyright Office. In 2016, it identified modernization as the first issue it would address following its three-year review of copyright law. Part of that proposal—elevating the Register of Copyrights to a Presidential appointment with the advice and consent of the Senate—was introduced as a separate bill, the Register of Copyrights Selection and Accountability Act, in March 2017, given the current lack of a permanent Register. The bill easily passed the House with a vote of 378-48 in April 2017 but stalled in the Senate Rules Committee. Momentum resumed several months ago, with the Committee holding a hearing on the bill in September, but the bill was unable to make it to the Senate floor before the end of the legislative session.

The copyright compulsory licenses for satellite retransmission of distant broadcast signals (along with related Communications Act provisions) are due to expire at the end of 2019. The compulsory license, found in 17 USC §119, was originally created by Congress in 1988, when the satellite television industry was still in its infancy, and set to expire in 1994.⁴A separate, permanent compulsory license for satellite retransmission of local broadcast signals, found in 17 USC § 122, was created in 1999. But Congress reauthorized the compulsory license for an additional five years, and continued to do so (along with other changes), most recently with the STELA Reauthorization Act of 2014.⁵Reauthorization of the Satellite Television Extension and Localism Act (STELA), Congressional Research Service, R43490 (2014). Will it reauthorize again before the provisions expire on December 31, 2019 or let them sunset? We can already see positions being staked out: for example, the National Association of Broadcasters is supporting the law’s expiration, while the Satellite Broadcasting & Communications Association is looking to make the provisions permanent.

What other issues may advance over the next twelve months? One possibility is a terrestrial performance right for sound recordings, the subject of perennial legislative efforts since the 1950s.⁶See U.S. Copyright Office report on Performance Rights in Sound Recordings (1978). When Congress extended federal copyright protection to sound recordings in 1971, it did not extend the right of public performance to them. In 1995, Congress extended to sound recording owners the exclusive right to perform the work publicly by means of a digital audio transmission, but legislative efforts for a full public performance right since then have been unsuccessful.⁷See, e.g., Performance Rights Act, H.R. 848, S. 379, 111th Cong. (2009); Performance Rights Act, H.R. 4789, S. 2500, 110th Cong. (2010); Free Market Royalty Act, H.R. 3219, 113th Cong. (2013); Fair Play Fair Pay Act of 2015, H.R. 1733, 114^th Cong. (2015); Fair Play Fair Pay Act of 2017, H.R. 1836 (2017). A terrestrial performance right for sound recordings was not included in the Music Modernization Act, but now that that bill has passed, some in the music industry are returning their attention to the issue, hoping to build on the momentum of the MMA.

U.S. Copyright Office

The U.S. Copyright Office will continue to work at a brisk pace through 2019 (and unaffected by the government shutdown).⁸A bill providing appropriations for the Legislative Branch, which covers Copyright Office funding, was passed in September 2018. A lot of that work will focus on modernizing the Office itself. As Congress looks at broader structural changes and other modernization issues that require legislative attention, the Office, in coordination with the Library of Congress, has been focused on those areas that don’t require legislative attention, such as IT, operations, and regulations—in its own words, its modernization efforts seek to “(1) build a new enterprise copyright system featuring a user-centered and flexible design, (2) streamline processes and policies, (3) improve access [to its public records], and (4) reimagine the entire Office.”

Currently the Office is seeking public comments on modernizing its registration system. It will incorporate these public comments into the development of the technological infrastructure for a new registration system, though we likely won’t see any public-facing results this year. It is possible, however, that we may see an initial version, toward the end of this year, of the Office’s updated recordation system,⁹The recordation system indexes documents filed with the Copyright Office pursuant to 17 USC § 205, along with sundry other provisions scattered throughout Title 17. For a complete list, see Transforming Document Recordation at the United States Copyright Office, pp. 13-14 (2014). which is less complex than the registration system and which the Office began working on earlier.

As part of its modernization efforts, the Office has been working on updating its rules and regulations to streamline Office practices and anticipate updated systems. Currently, it is collecting public comments on a number of proposed rules it issued toward the end of 2018, including a proposed new group registration option for blogs and other collections of short, online literary works, and simplifying copyright registration for architectural works. We can likely expect final rules for those sometime in 2019, along with any number of additional rulemakings.

Finally, the Copyright Office last year proposed an updated fee schedule for its services, as it periodically does. The proposal generated a healthy number of public comments in response, most voicing concerns about proposed fee increases for copyright registration. We will likely see a follow up to the proposal, perhaps in the earlier part of 2019.

On the policy front, 2018 came and went without the release of the Office’s long-awaited report on Section 512, which establishes safe harbors for online service providers and provides a notice-and-takedown system for addressing online infringement. The Office launched the study December 31, 2015 to evaluate the impact and effectiveness of the law, which was enacted in 1998. Through February 2017, it solicited two rounds of public comments and held a series of public roundtables to gather input. I predicted that we should see the release of the final report last year. Oof.

The Copyright Office doesn’t have any formal timeline for releasing the study, and it’s not surprising that it hasn’t been released yet, considering the scope and complexity of the issues it has solicited feedback on. At this point, given the amount of time since it has collected public input, the Office may, as it did for its study on the Making Available right, solicit an additional round of public comment to address any new developments in case law, technology, business practices, or developments in foreign countries that are relevant to assessing the impact and effectiveness of Section 512.

The Copyright Office has also previously initiated public studies on moral rights and copyright issues for visual works. It’s possible we may see developments—whether in the form of a written report or further inquiries—on either of these some time in the coming year.

Music Modernization Act

The MMA was signed into law October 11, 2018, the most significant copyright legislation in at least a decade, if not two, and we should expect the law to begin being implemented throughout 2019, with the Copyright Office charged with many of those duties.

The largest and most complex component of the MMA is the establishment of a Mechanical Licensing Collective to collect, administer, and distribute royalties under the blanket license created by the law for mechanical reproductions of musical compositions. Although the blanket license will not be available until January 1, 2021, much work will be done before then in preparation. The Copyright Office has already issued a notice regarding designation of the Collective and is accepting initial comments through March 21 and reply comments through April 22. It will use those comments to identify the entity that will act as the Mechanical Licensing Collective, something it is required by law to do within 270 days of the MMA’s enactment (sometime in mid-July of this year). The same process is being used to identify the Digital Licensee Coordinator, an entity created by the MMA to act as a sort of representative for the digital music providers. The Copyright Office has initiated a number of other rulemakings related to the implementation of the MMA and may release others in the upcoming months.

Also within 270 days of the enactment date, the Copyright Royalty Judges will commence proceedings to determine the initial administrative assessment for the Mechanical Licensing Collective—i.e., the fee that licensees must pay to cover the costs of operating the Collective. That proceeding must be concluded within one year of commencement.

Title II of the MMA provides federal protection for pre-1972 sound recordings and creates a new exception that would allow the noncommercial use of pre-1972 sound recordings that are not being commercially exploited. The Copyright Office solicited comments regarding requirements for this exception in October, and we can reasonably expect to see the final rules and guidance issued sometime this year.

U.S. Patent and Trademark Office

The USPTO, despite its name, provides advice to the Administration and other federal agencies and analysis on all types of intellectual property issues, including copyright.¹⁰35 USC § 2. It is currently operating during the shutdown by using prior-year fee collections but may cease operations if those funds are exhausted before the shutdown ends.

At the end of this month, the USPTO has scheduled a conference on the intellectual property considerations of artificial intelligence. The topics to be discussed include “the copyright implications when AI is used to create new works or when copyrighted works are used to ‘train’ artificial intelligence systems.” This event was originally scheduled for December 2018 but postponed following the passing of former President George H.W. Bush.

Other Agencies

The Federal Trade Commission is currently not operating during the shutdown, but when that ends, the FTC will resume a series of hearings it has been holding since September on “Competition and Consumer Protection in the 21st Century.” The purpose of the hearings is to consider whether “broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy.” The FTC held a hearing focusing on the role of intellectual property and competition policy in promoting innovation last October and collected public comments on that issue through late December. While the hearing and comments touched upon general copyright issues relating to competition, including piracy and enforcement, much of the focus was on software copyright issues. The FTC will provide an additional opportunity for public comment at the conclusion of all hearings, which were originally scheduled to end in January. The FTC has modeled these hearings after its 1995 “Pitofsky hearings” on global competition and innovation.¹¹Named after then-Chairman Robert Pitofsky, who through unfortunate coincidence, passed away in October, a month after the current round of hearings began. The 1995 hearings cumulated in a report published in 1996, though the FTC has not indicated any explicit outcomes for the current series of hearings.

The Intellectual Property Enforcement Coordinator will likely release its Joint Strategic Plan for 2019-2021 in the coming weeks. The IPEC, which is charged with coordinating and developing U.S. intellectual property policy and strategy across the numerous agencies involved with IP issues, is directed by Congress to develop a joint strategic plan on intellectual property enforcement every three years. The IPEC solicited public comment to help prepare its latest plan last October.

Trade

Much activity on the trade front can be expected in 2019, though it is unlikely copyright issues will be in the forefront.

The United States, Canada, and Mexico signed a renegotiated trilateral agreement on November 30, 2018, which has been renamed the USMCA (at least in the US) and replaces NAFTA. As with prior free trade agreements (including the original NAFTA), the agreement includes a chapter on minimum standards for intellectual property protection. The chapter is generally consistent with US law, but may require some changes to Canadian and Mexican law, and while some specific provisions have raised concern among the copyright community, the overall response to the chapter has been positive.¹²See generally, Report of the Industry Trade Advisory Committee on Intellectual Property Rights (ITAC-13) on A Trade Agreement with Mexico and potentially Canada (Sept. 27, 2018) and United States-Mexico-Canada Trade Agreement Addendum to the Report of the Industry Trade Advisory Committee on Intellectual Property Rights (ITAC-13) dated September 27, 2018 on a Trade Agreement with Mexico and Potentially Canada (Oct. 25, 2018).

The agreement must now be ratified and implemented in each of the three countries before going into effect. To qualify for fast-track consideration in Congress under Trade Promotion Authority, the U.S. International Trade Commission has until mid-March of this year to issue a report on the likely economic impacts of the new agreement.¹³See Congressional Research Service, In Focus: Proposed U.S.-Mexico-Canada (USMCA) Trade Agreement (Nov. 30, 2018). The Administration is also required to submit a list of required changes to U.S. law under the agreement to Congress by the end of January.

From there, the timeline for implementation remains indeterminate—there is no deadline for introducing implementing legislation in Congress. But the Administration is required to submit a final draft of the agreement and a Statement of Administration Action, which provides a proposal for implementing the agreement, to Congress 30 days prior to submitting its draft of implementing legislation to Congress. And once that occurs, it triggers a series of deadlines for Congress to bring implementing legislation to the floor for expedited consideration.

The U.S. last October announced its intention to enter into trade negotiations with Japan, the European Union, and the U.K. The US Trade Representative’s intellectual property negotiating objectives for the Japan agreement are virtually identical to those it published for the NAFTA renegotiations, so we likely won’t expect any copyright-related surprises there. We can likely see even less copyright-related news in the European Union negotiations, since those talks are expected to have a limited focus.

The wild card here is the U.S.-U.K. negotiations. Those cannot begin until after the U.K. has exited the European Union on March 29, 2019—though how (and if) that happens remains uncertain. The U.S. and U.K. obviously share a long historical kinship on copyright law, and both provide high standards of protection. The USTR is accepting public comments on negotiating objectives for the potential agreement until January 15 and will hold a public hearing on January 29. Both will provide some indication of what copyright stakeholders would like to see in any trade agreement.

Supreme Court

The Supreme Court begins the year with two copyright cases on its docket, both of which will be argued over the next two weeks. In Fourth Estate Public Benefit Corp. v. Wall-Street.com, the Court will settle the Circuit split over when a copyright owner has satisfied the registration requirement and can file a lawsuit. That case will be argued tomorrow, January 8. In Rimini Street v Oracle, the Court will determine what costs a court may award a prevailing party under 17 USC § 505. Oral arguments are scheduled for January 14. Decisions for both cases should come out before the end of the Court’s term in June, and likely sooner than that.

Parties in a number of interesting copyright cases have or are expected to file cert petitions in early 2019. Those cases include: Rentmeester v Nike (scope of copyright protection for photographs), Stevens v Corelogic (§1202 mental state requirement, cert filed January 3), Allen v Cooper (state sovereign immunity for copyright infringement, cert due today), Google v Oracle (copyrightability and fair use of Java software code, cert due January 25), and Georgia v Public Resource (scope of government edicts doctrine, cert due March 4).