Friday’s Endnotes – 03/22/13

March 22, 2013 · · 1 comment

A lot of copyright news this week!

Supreme Court reverses in Kirtsaeng — First up, the Supreme Court released its decision in Kirtsaeng on Tuesday.

Copyright Act in the Digital Age — Next, the Register of Copyrights went to Congress to propose a general revision of the Copyright Act. Rob Levine wrote a fantastic preview of her testimony.

Worth the Wait: 9th Circuit Delivers Big Win for Creators in Isohunt Case — Then on Thursday, the 9th Circuit released its opinion in a case that seemed almost forgotten (Isohunt was argued nearly 2 years ago). The Copyright Alliance’s Alexandra Goldstein summarizes the decision, which seems to provide strong support for the common sense notion that those who intentionally profit off infringement don’t get a free pass just because they operate online instead of offline.

Meltwater loses again: the black knight rises — Finally, a NY district court ruled against a digital news clipper on copyright infringement. This is a fascinating case involving fair use and other issues in an online context. Dominic Young provides a good summary of the opinion here, but I may dig into the decision more in a stand alone post next week.

In other news…

Protect rights of artists in new copyright law — This week’s must-read is Sandra Aistar’s op-ed regarding the push for a general copyright revision. “Ensuring that all creators retain the freedom of choice in determining how their creative work is used, disseminated and monetized is vital to protecting freedom of expression.  Consent is at the heart of freedom, thus we must judge any proposed update by whether it prioritizes artists’ rights to have meaningful control over their creative work and livelihood.”

Mirror, Mirror…Why Does the Anti-Copyright Lobby Live in Opposite World? — Ellen Seidler provides some cutting insights. “The talking points echoed by the panel at SXSW reflected the anti-copyright lobby’s disingenuous mantra that content creators seeking to protect their work from theft should be viewed as criminals, while those who brazenly steal (and monetize) the work of others are somehow the ‘innovators.’”

A Step Closer to an Internet that Values Freedom of Expression, Freedom of Information, and the Freedom to Protect the Things We Create and Own — Chris Marcich of the MPAA comments on the recent European Court of Human Rights decision in the Pirate Bay case. “The Internet is a central part of our lives.  Citizens across the world, particularly young people, care about it passionately.  So do we.  We just want to ensure the Internet works for everyone.  We want an Internet where the creative property of artists and creators is protected along with the privacy and security of all users.  An Internet where the values society holds dear in the offline world, shape how we interact online.  And yes, these include freedom of expression, freedom of information and the freedom to protect the things we create and own.”

IFPI slams EU piracy study as ‘flawed and misleading’ — Recently, the EU released a study on piracy’s effects on digital music sales. The study’s conclusions were misreported the study itself suffers some serious flaws.

SXSW: David Lowery and Co. Lash out Against Industry ‘Pimps’ — Last week was the music portion of SXSW. Billboard takes a look at what may have been one of the best panels: David Lowery, Daryl Friedman, East Bay Ray, and Nakia discussing “Who’s Ripping Me Off Now?”

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Copyright is for the author first and the nation second

October 23, 2012 · · 8 comments

At a Congressional Hearing last April, Representative Zoe Lofgren (D-Silicon Valley) grilled Register of Copyrights Maria Pallante over a statement she had made during an interview published in the ABA’s Landslide magazine. Lofgren took issue especially with Pallante’s remark during the interview that “Copyright is for the author first and the nation second.” At one point during the hearing, Lofgren asked Pallante about the remark:

Now, this comment attracted quite a bit of attention among some people, especially my constituents in Silicon Valley, and it seems to me when you look at the Constitution, which empowers congress to grant exclusive rights in creative works in order, and i quote, “to promote the progress of science and the useful arts.” It seems to me that the Constitution is very clear that copyright does not exist inherently for the author but for the benefit for society at large.

Now, I’m concerned when any public official, especially one in charge of regulation of a particular industry or area of law seems to favor particular stakeholders in that very industry. We’d be alarmed, for example, if the chairman of the FCC said the Telecommunications Act was for the telecom companies first and the nation second, and it’s not clear to me how your statement, if it was accurately reported, is any different.

This struck me at the time as a bizarre attempt to create controversy over a relatively benign statement. To set the record straight: Lofgren was wrong, and Pallante was right. Lofgren’s attack is full of misguided statements — not least of which is the notion that the Register of Copyrights is “in charge of regulation of a particular industry or area of law”1 — but most of all was her misconstruction of the “public interest” in copyright.

Saying that “copyright is for the author first” does not ignore the public interest but rather recognizes that the public’s interest is served when authors are protected. Lofgren’s remarks seem oblivious to the public interest in securing exclusive rights to creators and instead substitute a vague, chameleon-like conception — an “untethered public interest”, one that more often than not provides cover for the private interests of economic users of copyrighted works.

Far from controversial, the public’s interest in encouraging the creation of expressive works by protecting creators’ rights — which Pallante was alluding to in her statement — has been recognized since the earliest days of copyright law. James Madison, the primary architect of the Constitution’s Copyright Clause, said of it in the Federalist Papers, “The public good fully coincides… with the claims of individuals.” Pallante’s remarks, as she notes herself in her response to Lofgren, are primarily a restatement of what the Supreme Court said in Twentieth Century Music Corp. v. Aiken:

The immediate effect of our copyright law is to secure a fair return for an “author’s” creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.

On another occasion, the Supreme Court noted

The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in “Science and useful Arts.” Sacrificial days devoted to such creative activities deserve rewards commensurate with the services rendered.2

To put it bluntly: society benefits when creators get paid. The private right that copyright law secures is what advances the public’s interest in new expressive rights. And the importance of this private right shouldn’t be minimized, as the Ninth Circuit noted in 1981:

Despite what is said in some of the authorities that the author’s interest in securing an economic reward for his labors is “a secondary consideration,” it is clear that the real purpose of the copyright scheme is to encourage works of the intellect, and that this purpose is to be achieved by reliance on the economic incentives granted to authors and inventors by the copyright scheme. This scheme relies on the author to promote the progress of science by permitting him to control the cost of and access to his novelty.3

Other courts have reiterated the public’s benefit from copyright law, especially when considering preliminary injunctions (since the public interest must be considered when deciding to issue a preliminary injunction). Just a few examples:

  • “There is a strong public interest in the copyright system’s function of motivating individuals to make available their creative works and increase the store of public knowledge.”4
  • “Since Congress has elected to grant certain exclusive rights to the owner of a copyright in a protected work, it is virtually axiomatic that the public interest can only be served by upholding copyright protections and, correspondingly, preventing the misappropriation of the skills, creative energies, and resources which are invested in the protected work.”5
  • “Google argues that the “value of facilitating and improving access to information on the Internet . . . counsels against an injunction here.” This point has some merit. However, the public interest is also served when the rights of copyright holders are protected against acts likely constituting infringement.”6
  • “The object of copyright law is to promote the store of knowledge available to the public. But to the extent it accomplishes this end by providing individuals a financial incentive to contribute to the store of knowledge, the public’s interest may well be already accounted for by the plaintiff’s interest.”7

“One of the great fallacies of modern copyright jurisprudence”

The notion of an “untethered public interest”, as I referred to it above, and its ascendancy over the private right has seeped into the copyright skeptic zeitgeist (Lofgren is certainly not alone in her views) However, this has partly been the result of a mistake.

In the 1932 Supreme Court case Fox Film Corp. v. Doyal, a company that licensed films challenged the collection of state taxes on the gross receipts of royalties from its licenses.8 The company argued that its copyrights were “instrumentalities” of the federal government and, thus, immune from state taxation.

The Supreme Court rejected this argument, saying, “the mere fact that a copyright is property derived from a grant by the United States is insufficient to support the claim of exemption.” To be exempt from state taxation, the government must reserve some sort of controlling interest in a grant or privilege. But here, as the Court notes earlier, “The sole interest of the United States and the primary object in conferring the monopoly lie in the general benefits derived by the public from the labors of authors.” In other words, the government only has a policy interest, not a property interest; “After the copyright has been granted,” said the Court, “the Government has no interest in any action under it save the general one that its laws shall be obeyed.”

But then a curious thing happened. This language, which only served to distinguish a pecuniary interest from a general interest, transmogrified into a declaration of the interest itself.

In 1948, the Supreme Court was faced with the question of whether the practice of “block-booking” — “licensing, or offering for license, one feature film or group of features on the condition that the exhibitor will also license another feature or group of features released by the distributors during a given period” — violated the Sherman Act.9 In holding that it did, the Supreme Court said, “The copyright law, like the patent statutes, makes reward to the owner a secondary consideration.”

As support, it then stated, “In Fox Film Corp. v. Doyal, Chief Justice Hughes spoke as follows respecting the copyright monopoly granted by Congress, ‘The sole interest of the United States and the primary object in conferring the monopoly lie in the general benefits derived by the public from the labors of authors.’”

This case, in turn, was cited by the Supreme Court in the 1984 Betamax case to support the idea that “The monopoly privileges that Congress may authorize are neither unlimited nor primarily designed to provide a special private benefit.”10 And so, the eisegesis was complete; scholars today continue to rely on this quote, taken out of context, to support the supremacy of an untethered public interest over the private right.11

Legal scholar David Householder has called this notion espoused by the Betamax court, “one of the great fallacies of modern copyright jurisprudence.”12 As Householder explains:

It would be similarly fallacious to say that in a real estate transaction, the money paid to the seller is only a secondary consideration, with the primary value of the transaction consisting of the conveyance of the parcel to the buyer. Both the money and the land in such a transaction are consideration; neither is more important to the public, although at the time of the transaction the money is more important to the seller and the land is more important to the buyer. The value to society consists merely in the existence of a market for the land so that property may be obtained by those who are likely to put it to better use. Likewise, for intellectual property; the value to society consists in the existence of a market for the authors’ writings. The money paid to the author is by no means secondary. Rather, it is the unavoidable result of the creation of a market because a market cannot exist without the promise of reward to owners of property who choose to place that property on the market.

Echos from 1909

Another element that feeds into this misconstruction of copyright and the public interest is a statement made over a century ago.

During the drafting of the 1909 Copyright Act, New Hampshire Representative Frank Currier submitted a report from the Committee on Patents, which at one point stated, “Not primarily for the benefit of the author, but primarily for the benefit of the public, such rights are given.” To hear some put it, this lone statement plucked from the middle of a Committee Report represents the be-all and end-all of copyright justification in the US, an explicit and certain rejection of any consideration due the private right itself.

But immediately following, Currier distinguishes exactly what he means by the “benefit of the public,” and it sounds far more like the view expressed by Pallante:

Not that any particular class of citizens, however worthy, may benefit, but because the policy is believed to be for the benefit of the great body of people, in that it will stimulate writing and invention, to give some bonus to authors and inventors.

In enacting a copyright law Congress must consider, as has been already stated, two questions: First, how much will the legislation stimulate the producer and so benefit the public; and, second, how much will the monopoly granted be detrimental to the public. The granting of such exclusive rights, under the proper terms and conditions, confers a benefit upon the public that outweighs the evils of the temporary monopoly. [Emphasis added.]

It’s also worth noting how Currier’s statement comports with what the 1909 Copyright Act actually did to further this public benefit:

  • The term of protection for copyright was extended by 14 years.
  • Copyright protection was expanded to include mechanical reproductions (interestingly, Currier said of this provision, “The main object to be desired in expanding copyright protection accorded to music has been to give to the composer an adequate return for the value of his composition”).
  • New remedies against infringers were added, including impoundment during actions and destruction of infringing copies and plates.
  • Criminal penalties were expanded to include willful infringment of any right in any subject matter (formerly, only the unauthorized public performance of dramatic works and musical compositions carried criminal penalties).

As the Supreme Court noted in 1939, the 1909 Copyright Act “introduced many changes and was intended definitely to grant valuable, enforceable rights to authors, publishers, etc. … ’to afford greater encouragement to the production of literary works of lasting benefit to the world.’”13 That is, the public interest was served by first securing the exclusive rights of creators.

Finally, Currier’s statement regarding the public interest in copyright law is far from an unequivocal proclamation by Congress. In 1975, former Register of Copyrights Barbara Ringer testified in front of Congress during a hearing on the revisions that would become the Copyright Act of 1976. She disagreed that, “Not primarily for the benefit of the author, but primarily for the benefit of the public, such rights are given.”

This sounds great and for a long time, I felt that this was probably correct. But, the more I have looked upon the status of authors in this country and the fact that the public interest is badly served when authors are badly served, I have felt that too often the ‘public interest’ has been identified with economic users rather than with authors.

In recent years, partly as a result of this whole revision exercise, I have been trying to gage individual issues in terms of their impact upon creativity and authorship, which I consider the ultimate public interest.

The Constitution speaks of the desirability of promoting the progress of science and useful arts, science in the broad sense of learning or knowledge, by offering protection for limited times to authors and inventors.

It seems to me that it is this protection, the exclusive rights that are supposed to be granted to authors, that is the ultimate public interest that the Constitution and its drafters were thinking about. I do not think that this has ever been fully or even partly realized in any copyright law we have had in our entire history.

Copyright, in other words, is for the author first and the nation second.

Footnotes

  1. The US Copyright Office has little direct role in regulating copyright law. The bulk of its work is in administering the registration of copyrighted works. The only area it exercises substantive rulemaking authority is in the triennial DMCA anticircumvention exemption proceedings, a relatively minor aspect of copyright law in the grand scheme of things; see Joseph Liu, Regulatory Copyright, 83 North Carolina Law Review 88, 148 (2004). [↩]
  2. Mazer v. Stein, 347 US 201, 219 (1954). [↩]
  3. Universal City Studios v. Sony Corp, 659 F.2d 963 (9th Cir. 1981). [↩]
  4. ABC v Aereo, No. 12-Civ-1540(AJN), order denying preliminary injunction (SDNY, July 11, 2012). [↩]
  5. Klitzner Industries v HK James & Co, 535 F.Supp. 1249, 1259-60 (ED Pa. 1982); cited by Taylor Corp v Four Seasons Greetings, 403 F.3d 958 (8th Cir 2005); Concrete Machinery v Classic Lawn Ornaments, 843 F.2d 600 (1st Cir 1988); Apple Computer v Franklin Computer Corp, 714 F.2d 1240 (3rd Cir 1983); Coach v Ocean Point Gifts, No. 09-4215, Order on Motion for Default Judgment (D. NJ, June 14, 2010); FMC Corp v Control Systems, 369 F.Supp.2d 539 (ED Pa 2005); TalkISP v XCast Laboratories, No. C05-0055, Report and Recommendation on Motion for Preliminary Injunction (ND Iowa, Dec. 19, 2005); Video Pipeline v Buena Vista Home Entertainment, 192 F.Supp.2d 324 (D. NJ 2002); Budish v Gordon, 784 F.Supp 1320 (ND Ohio 1992); EF Johnson v Uniden Corp, 623 F.Supp 1485 (D. Minn 1985); Albert E. Price, Inc v Metzner, 574 F.Supp 281 (ED Pa 1983); Ass’n of American Medical Colleges v Mikaelian, 571 F.Supp 144 (ED Pa 1983). [↩]
  6. Perfect 10 v Google, 416 F.Supp.2d 828, 859 (2006). [↩]
  7. Salinger v Colting, 607 F.3d 68, 82 (2nd Cir. 2010). [↩]
  8. 286 US 123. [↩]
  9. United States v. Paramount Pictures, 334 US 131. [↩]
  10. Sony Corp. v. Universal City Studios, 464 US 417, 429 (1984). [↩]
  11. See, for example, Jessica Litman, Readers’ Copyright, 58 Journal of the Copyright Society of the US 325 (2011); Edward Lee, Technological Fair Use, 83 Southern California Law Review 797, 819 (2010); William Patry, Moral Panics and the Copyright Wars, pg. 123 (Oxford Univ. Press 2009); Pamela Samuelson, Unbundling Fair Uses, 77 Fordham Law Review 2537, 2580-81 (2009); Rebecca Tushnet, Legal Fictions: Copyright, Fan Fiction, and a New Common Law, 17 Loyola L.A. Entertainment Law Journal 651 (1997). [↩]
  12. The Progress of Knowledge: A Reexamination of the Fundamental Principles of American Copyright Law, 14 Loyola LA Entertainment Law Review 1, 35 (1993). Householder similarly notes how the notion is premised in part on the mistake discussed above. [↩]
  13. Washingtonian Co. v. Pearson, 306 US 30, 36. [↩]
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Is the Copyright Royalty Board Unconstitutional?

March 19, 2012 · · 3 comments

Last month, the DC Circuit Court of Appeals heard oral arguments that raised constitutional questions concerning the Copyright Royalty Board. Intercollegiate Broadcasting Services (IBS) appealed a Board decision last year, and in its appeal it also argues that the appointment of Copyright Royalty Judges violates the Appointments Clause of the constitution.

The US Copyright Act provides for a number of statutory licenses for certain uses of copyrighted works — sound recording licenses for webcasting or internet radio among them. The rates of these licenses are determined by the Copyright Royalty board, an agency in the Library of Congress comprised of three full-time Copyright Royalty Judges who set rates through quasi-judicial proceedings.

IBS makes the same arguments as previous Appointments Clause challenges to the CRB (I touched on a previous Appointments Clause challenge to the CRB before here): either the Copyright Royalty Judges are “principal officers” and must be appointed by the President with the advice and consent of the Senate, or they are “inferior officers”, but the Librarian of Congress is not a head of a department and thus cannot be given the authority to appoint them. It’s an interesting issue, and if IBS succeeds, there’s a potential for huge ramifications in the online music ecosystem, so I thought I’d provide a closer look.

The Appointments Clause

The Appointments Clause, in Article II of the US Constitution, says:

[The President] shall nominate, and, by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

The power to appoint government officials is a significant power, and the Constitutional drafters were aware of its potential for abuse from their experiences with England. The first portion of the Appointments Clause represents a compromise between the drafters of the Constitution who wished to vest appointment power in the legislative branch and those who wished to vest it in the executive.1 The compromise represented what was thought to be the best way to preserve political accountability of government officials while also ensuring that well-qualified officers are appointed.

The second part of the Appointments Clause, which addresses inferior officers, was almost an afterthought — added with little debate, most likely for pragmatic reasons.2 Even in the 18th century, it was recognized that requiring Presidential nomination and Senate confirmation for every single government officer would be terribly inefficient.

On its face, the Appointments Clause seems fairly straight-forward. But when you get into its details, it can get tricky. What are “officers of the United States”, “inferior Officers”, or “Heads of Departments”? The Constitution doesn’t contain definitions for these terms. There is plenty of detailed scholarship on these questions, but for the purposes of this article, I’ll stick to how the Supreme Court has defined them.

What are Principal and Inferior Officers?

An “Officer of the United States” is, according to the Supreme Court, “any appointee exercising significant authority pursuant to the laws of the United States.”3 Appointees not exercising such authority could be considered mere employees — the Constitution is agnostic on their appointment.4

The Appointments Clause implies two classes of officers — principal and inferior — though it does not delineate between the two. The Supreme Court has also shied away from enunciating a precise rule to distinguish between the two types of officers.5 Instead, it has identified factors to help delineate between principal and inferior officers. Key among these factors is whether an officer is subordinate to another officer. That is, the question of distinguishing between principal and inferior officers is one of hierarchy — principal officers answer primarily to the President, inferior officers report to principal officers (though, it should be noted, this is only a necessary, not a sufficient, condition).6

What is a “department”?

As with principle and inferior officers, the Constitution doesn’t define “Departments”, nor do contemporary texts, like the Federalist Papers. So how should it be defined?

As a threshold matter, the text of the Appointments Clause suggests, and the Supreme Court has confirmed, that Departments refer only to agencies within the Executive branch of the government.7 But which executive agencies? All of them? Or only some of them?

The Supreme Court has not been entirely clear on its answer to this question. In the 1991 case Freytag v. Commissioner, in an opinion that apparently confused four of the nine Justices,8 the Court limited the scope of the term “Departments” in the Appointments Clause to “executive divisions like the Cabinet-level departments.”

But then in 2010, the Court ignored the majority’s conclusion in Freytag and adopted the concurrence’s broader definition and reasoning without comment.9 It would seem then that, for the purposes of the Appointments Clause, a “Department” is any “freestanding component of the Executive Branch, not subordinate to or contained within any other such component.”

In short, the Appointments Clause gives the President the exclusive power to appoint all those who exercise significant authority under US law. For subordinate officers, the Constitution allows Congress to vest appointment in the President, courts of law, or the heads of freestanding, top-level Executive departments.

The Library of Congress

On Wednesday, December 23, 1801, a motion was made to have the newly created Librarian of Congress appointed by the President instead of the Secretary of the Senate and Clerk of the House, but that motion failed. On the 29th, the bill was reported to the Committee of the whole House with appointment vested in the Secretary and Clerk. However, the final bill, passed on January 26, 1802, provided for appointment “by the President of the United States solely.” I’ve been unable to find any record of when or why this change was made — though it has been suggested that the final bill was merely the result of Congress being unable to agree on a candidate for the position.

The mode of appointing the Librarian of Congress did not completely escape attention over the next few decades. On January 26, 1816, Senator Eligius Fromentin reported that “it is difficult to conceive why an officer of both Houses of Congress, as much so as the Clerk of the House of Representatives and the Secretary of the Senate are officers of their respective Houses, should not be appointed by the authority to which he is amenable,” and proposed that that provision of the original Act be repealed and appointment of the Librarian be vested in the Joint Library Committee. The proposal never passed.

Nevertheless, little else was said about the method of appointing the Librarian of Congress for most of the 19th century — most likely because, while the the Library greatly expanded in size and collections, it still remained, well, a library. That began to change in 1870, when the Library took on copyright functions. Toward the end of the century, Congress began to look at creating a distinct copyright office within the Library.

At this point, it would be easy to assume that Congress simply failed to apprehend any constitutional appointment issue. Yet, as it turns out, the appointment of what would become the Register of Copyrights did provoke substantive discussion — which proves relevant because both the Register and the Copyright Royalty Judges are appointed in the same manner.

The Register of Copyrights

In an 1897 article, the American Library Association reports on some of this discussion.10 The then Librarian of Congress, Ainsworth Spofford, had recommended to Congress in 1895 “that the copyright registry should be separated from the management of the library, and a register of copyrights appointed as an executive officer, with his assistants, distinct from the library staff [emphasis added].” Despite this, a clause in an appropriations bill the following spring called for the register to be appointed by the Joint Congressional Committee on the Library. This led to an extensive discussion in Congress, which ultimately came to the conclusion that such an appointment would be unconstitutional.

The Joint Committee held hearings on the topic during the next Congressional recess. Representatives of the ALA recommended a plan that would have a registrar of copyrights and chief librarian appointed by the joint congressional committee to both serve under a director, “to be appointed in the usual manner for heads of departments, namely, by ‘The President, by and with the advice and consent of the Senate’ [emphasis added].” The appropriations committee disagreed with this proposal and countered with one where the Librarian of Congress would be appointed by the President solely and would then have the authority to appoint the register of copyrights.

The ALA concluded with two observations. First, that the Library of Congress had by then grown into an executive agency: “Congress is therefore either in the unconstitutional position of having to manage an executive branch of the government, or it must relinquish what, for a century past, has been part of its organization.” And second, maintenance of a copyright registry was clearly an executive function, which would make it ”unconstitutional for Congress to appoint a register of copyrights.”

In the end, Congress was convinced that the Library of Congress “is an executive department and should be under the control of the executive branch.”11 The final law vested appointment of the Librarian of Congress in the President with the advice and consent of the Senate and appointment of the Register of Copyrights in the Librarian in order to adhere to the Constitution.12

Courts, including the Supreme Court, have implicitly endorsed the constitutional soundness of this arrangement by ruling on regulations promulgated by the Copyright Office13 — a power that only executive agencies can exercise. The Fourth Circuit addressed the issue head on (albeit in dicta) in 1978:

[T]he Office of the Register of Copyrights is not open to any charge that it is violative of the Appointments Clause. The Register is appointed by the Librarian of Congress, who in turn is appointed by the President with the advice and consent of the Senate. By the nature of his appointment the Librarian is an “Officer of the United States, with the usual power of such officer to appoint `such inferior Officers [i. e., the Register], as [he] think[s] proper.” …

The Supreme Court has properly assumed over the decades since 1909 that the Copyright Office is an executive office, operating under the direction of an Officer of the United States and as such is operating in conformity with the Appointments Clause.

The Copyright Royalty Judges

Like the appointment of the Register of Copyrights, Congress had considered constitutional implications of appointing the Copyright Royalty Judges.

The existence of the Copyright Royalty Board can be traced back to the 1976 Copyright Act.14 During its drafting, Congress knew it wanted to increase the number of compulsory licenses available, but it also wanted more flexibility over the license rates than statutes would offer. An administrative body could provide this flexibility.

An early version of the legislation creating this adminstrative body gave the Register of Copyrights the authority to appoint its members. However, at that time, the Supreme Court handed down its decision in Buckley v. Valeo, which held the appointment of members of the Federal Election Commission by Congress was unconstitutional. Some members of Congress expressed concerns that vesting appointment of a copyright royalty agency in the Register of Congress would pose the same constitutional concerns. The final version of the Act created the Copyright Royalty Tribunal placed the appointment of its members in the hands of the President.

For reasons unrelated to appointment, the Copyright Royalty Tribunal was dismantled in the early nineties. Congress sought to replace the full-time tribunal with ad hoc arbitration panels to administer statutory copyright licenses. Again, Congress took care to ensure the new body operated constitutionally:

Congressman William Hughes, the chairman of the House Subcommittee, asked the Congressional Research Service (“CRS”) for its advice. CRS stated that the panels would be constitutional if the person ultimately responsible for the panels’ decision was a presidential appointee or someone who owed his or her appointment to a presidential appointee. Therefore, the panels could be established under supervision of the Librarian of Congress, a presidential appointee, or the Register of Copyrights, a person owing his or her appointment to a presidential appointee.

Although the House Subcommittee received CRS’ opinion that either the Register or the Librarian could be the supervising official, the House Subcommittee chose to make the Librarian the supervising official. There is no record as to why this choice was made. There is also nothing in the record to suggest that Congress saw any added value in an additional layer of review. The only concern voiced was that a presidential appointee, or someone who answers to a presidential appointee, needed to be placed at the head of the CARP system to satisfy the Supreme Court’s ruling in Buckley v. Valeo.15

CARP lasted little more than half as long as its predecessor tribunal. In 2004, the Copyright Royalty and Distribution Reform Act replaced CARP with a full-time Copyright Royalty Board, with appointment by the Librarian of Congress.

Appointments Clause challenges to the CRB

The issue of the appointment of Copyright Royalty Judges made an appearance in two DC Circuit Court cases released within days of each other in July 2009, though in neither case was the issue in front of the court. In SoundExchange v. Librarian of Congress, an appeal from a CRJ determination on satellite radio royalties, Circuit Judge Kavanaugh volunteered his opinion that the appointment of the Board “raises a serious constitutional issue” in his concurrence — though SoundExchange had not raised any constitutional arguments. Judge Kavanaugh seemed inclined to agree with the view that Copyright Royalty Judges “appear to be principal officers — not inferior officers — because they are not removable at will and their decisions regarding royalty rates apparently are not reversible by the Librarian of Congress or any other Executive Branch official.”

The following Monday, the DC Circuit decided Intercollegiate Broadcast System v. Copyright Royalty Board, where an Appointments Clause argument was raised. However, the argument was raised too late, said the court, and was thus forfeited.

It was not until the following February that a court would need to look at the appointment of Copyright Royalty Judges. In Live365 v. Copyright Royalty Board, Live365 asked the DC District Court to enjoin the Copyright Royalty Board from ratemaking proceedings because the Judges were unconstitutionally appointed. The digital radio aggregator argued either that the Copyright Royalty Judges are “principal officers” under the Appointment Clause and must be appointed by the President, or that they are “inferior officers” but the Librarian of Congress is not one of the “heads of departments” who could be authorized to appoint them.

The court rejected both arguments. It determined that Copyright Royalty Judges were inferior officers rather than principal officers because of the “degree and level of supervision exercised over them by the Librarian of Congress and Register of Copyrights.” In additon, it observed that there are ”several critical factors that indicate that the Library is an executive department for purposes of the Appointments Clause”, including the fact that “the Librarian is appointed by the President with the advice and consent of the Senate” and “the President, not Congress, has the power to remove the Librarian at will.”

Will IBS Be Successful?

The odds are stacked against IBS ultimately succeeding in its argument. As noted above, no court has yet to be convinced that Copyright Royalty Judges are appointed unconstitutionally.

On whether the Judges are principal or inferior officers, the government lays out a strong case for their status as inferior officers — one that, in my opinion, hews more closely to Supreme Court precedent on the subject. As the government notes in its brief:

The Judges are limited to six-year terms, during which they are subordinate to the Librarian of Congress, a principal officer of the United States appointed by the President with the advice and consent of the Senate. The Judges’ authority is limited to matters relating to the establishment of royalty rates for a small number of compulsory licenses enumerated in the Copyright Act. The Judges are expressly required to “act in accordance with regulations issued by . . . the Librarian of Congress.” Any procedural regulations issued by the Judges themselves, including rules governing royalty ratemaking proceedings, must be approved by the Librarian. The Librarian is authorized to promulgate binding ethical rules and to enforce those rules against the Judges. The Librarian also causes the Judges’ decisions to be published. The Judges lack space or administrative resources, and are wholly reliant on the Librarian for support. And if the Judges find themselves idle between ratemaking proceedings, they may be assigned other duties at the discretion of the Register of Copyrights, who likewise acts under the direction of the Librarian.

As to whether the Librarian of Congress is a head of a department under the Appointments Clause, I believe it is.

The Library of Congress is an executive, not a legislative, agency. The Librarian is appointed by the President, not Congress. The Library’s subdepartments, the Copyright Office and the Copyright Royalty Board, perform executive functions. The executive branch oversees these functions — Congress retains no oversight in the form of a legislative veto or otherwise.

It is called the Library of Congress… but so what? Setting aside the fact that this name is largely vestigial — though the Library was originally intended for use by Congress, it was also open to the President and Vice-President since it was founded, followed by other executive agencies and the Judiciary within a few decades, and eventually open to the public; for over a century there have been those who have argued that it would more appropriately be called the National Library — labels shouldn’t determine constitutional analysis.

In the same vein, the various references to the Library of Congress as a “Congressional agency” in other contexts — IBS cites Keefe v. Library of Congress as an example — carry no legal weight here. “Agency” requires some level of control, and Congress deliberately vested control of the Copyright Royalty Board in the executive branch through the Library of Congress.

I’m not convinced the argument that the Library of Congress is not a “department” within the meaning of the Appointments Clause has any traction either. As noted above, the Supreme Court appears to have backed away from its holding in Freytag that there’s some distinction between the “departments” referred to in the Appointments Clause and other self-contained, non-subordinate executive agencies. And for good reason. It’s difficult to see what constitutional purpose such a distinction would advance. Certainly not separation of power concerns — if we accept that any “department” must still at a minimum be an executive agency, and Congress vests appointment in the Head of an agency that isn’t a “department” under Freytag, it hasn’t encroached on executive power. Other reasons for structuring the Appointments Clause as it is structured, some of which Alexander Hamilton explains in the Federalist 76, also don’t suggest a need to construe “departments” so narrowly.

Footnotes

  1. See Buckley v. Valeo, 424 US 1, 131 (1976); Hanah Metchis Volokh, The Two Appointments Clauses: Statutory Qualifications for Federal Officers, 10 Journal of Constitutional Law 745, 768(2008). [↩]
  2. See Volokh; Andrew Croner, Morrison, Edmond, and the Power of Appointments, 77 George Washington Law Review 1002, 1005 (2009). [↩]
  3. Buckley v. Valeo, 424 US 1, 126 (1976). [↩]
  4. See United States v. Germaine, 99 US 508, 509 (1879). [↩]
  5. See Edmond v. United States, 520 US 651, 661 (1997): “Our cases have not set forth an exclusive criterion for distinguishing between principal and inferior officers for Appointments Clause purposes”; Morrison v. Olson, 487 US 654, 671 (1988): “The line between ‘inferior’ and ‘principal’ officers is one that is far from clear, and the Framers provided little guidance into where it should be drawn. … We need not attempt here to decide exactly where the line falls between the two types of officers, because in our view appellant clearly falls on the ‘inferior officer’ side of that line.” [↩]
  6. See Free Enterprise Fund v. PCAOB, 561 US ___, *V (2010). [↩]
  7. Buckley v. Valeo, 424 US 1, 127 (1976). [↩]
  8. Said Scalia in the concurrence, “It is as impossible to respond to this random argumentation as it is to derive a comprehensible theory of the appointments power from it.” [↩]
  9. Free Enterprise Fund v. PCAOB, 561 US ___ (2010). [↩]
  10. I admit that the introduction to the ALA’s article made me chuckle: “The appearance, the week before Congress opened, of seven members of the American Library Association before the joint committee on the Library of Congress in Washington has been the most interesting happening in the library world since the Cleveland conference.” [↩]
  11. 29 Cong. Rec. 318-19 (1896) (Rep. Dockery). Also see William Patry, Copyright Law and Practice, ch. 1 fn. 166 for a comprehensive list of citations to Congressional records on the topic. [↩]
  12. Act of February 19, 1897, 54th Cong., 2d Sess., 29 Stat. 545. [↩]
  13. See, for example, Goldstein v. California, 412 U.S. 546, 567-69 (1973); DeSylva v. Ballentine, 351 U.S. 570, 577-78 (1956); Mazer v. Stein, 347 U.S. 201, 212 (1954). [↩]
  14. This section relies largely on CARP (Copyright Arbitration Royalty Panel) Structure and Process, Statement of Marybeth Peters The Register of Copyrights before the Subcommittee on Courts, the Internet, and Intellectual Property Committee on the Judiciary (June 13, 2002) and Frederick Greenman & Alvin Deutsch, The Copyright Royalty Tribunal and the Statutory Mechanical Royalty: History and Prospect, 1 Cardozo Arts & Entertainment Journal 1 (1982). [↩]
  15. Marybeth Peters, CARP. [↩]
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Choosing Between Copyright and Piracy

July 18, 2011 · · 13 comments

“The law needs to keep pace with technology. There’s no point in talking about broader copyright policy if exclusive rights can’t be enforced. … I always start with the enforcement issues online because if there isn’t effective enforcement possibility, then there is no meaningful exclusive right and then copyright doesn’t work.”

That was new US Register of Copyrights Maria Pallante, speaking with Ars Technica last week. Artists and creators recognize her words as common sense. But there are those among the critics of copyright law who would argue every point she mentions.

Why should we worry about enforcement, they might ask. There are groups who express concern about the rights of creators but oppose any attempts at enforcement, whether through new legislation that attempts to keep pace with technology, voluntary agreements that attempt to make existing law work more effectively, or even individuals who attempt to assert their core rights granted by copyright law.

There are those who go even further and question the need for a broader copyright policy at all. Surely the internet and digital technology has rendered copyright obsolete.

I agree, however, with Pallante. It’s important, during these times when the ways in which art, media, and content are produced and accessed are rapidly changing, to ensure that the concept of copyright remains vital. That’s not to suggest that the focus should only be on enforcement. There are numerous factors that play a role — from pricing, to building sustainable business models, reducing the complexity of licensing, and many others.

But at the core of the “copyright question,” if you will, is a choice: a choice between what end results a society wants to encourage.

Copyright as a Choice

Nobel Prize winning economist Douglass North discusses this choice in his Prize Lecture:

The organizations that come into existence will reflect the opportunities provided by the institutional matrix. That is, if the institutional framework rewards piracy then piratical organizations will come into existence; and if the institutional framework rewards productive activities then organizations – firms – will come into existence to engage in productive activities.1

In their seminal work on the economics of copyright law, William Landes and Richard Posner talk plainly about how these two different incentive choices would play out:

Without copyright protection, authors, publishers, and copiers would have inefficient incentives with regard to the timing of various decisions. Publishers, to lengthen their head start, would have a disincentive to engage in prepublication advertising and even to announce publication dates in advance, and copiers would have an incentive to install excessively speedy production lines. There would be increased incentives to create faddish, ephemeral, and otherwise transitory works because the gains from being first in the market for such works would be likely to exceed the losses from absence of copyright protection. There would be a shift toward the production of works that are difficult to copy; authors would be more likely to circulate their works privately rather than widely, to lessen the risk of copying; and contractual restrictions on copying would multiply.2

It really is as simple as that. Yet one will hear a whole host of ills supposedly caused by copyright. Obviously, copyright is not perfect; nothing is. But it’s wrong to think that weakening copyright protection will, as if by magic, cure this host of ills.

The Choice for Emerging Economies

Earlier this year, the Social Science Research Council released a report on Media Piracy in Emerging Economies (MPEE).3 The report describes, using media reports, informal interviews, and focus groups, the accessibility and consumption of pirated works in several countries. What conclusions it can derive from these observations point toward the idea that these issues are multifaceted.

Without any context, a reader could readily assume that the choice of piracy over copyright would be far more beneficial. In the short run, they may be correct in a strictly economic sense — though in a strictly economic sense, natural disasters are beneficial in the short run since they lead to lots of new building projects afterward.

But in the long term? Choosing to incentivize piracy over copyright is detrimental, not only to creators, but the general public as well.

When it comes to emerging economies, it’s especially important to make note of this. Encouraging the development of copyright in these economies often comes from foreign countries with established cultural and media production. It’s often assumed that this encouragement is a one-way street: foreign entities are the only ones to benefit from stronger copyright regimes in emerging economies.

Not so. In fact, piracy usually has the effect of stalling the development of local artistic and creative firms.

The US was once an emerging economy, and its history provides an example of this effect. George Haven Putnam describes one common pattern of cultural development in emerging economies like the US, and ancient Rome before that:

The literary life of the American Republic has, of course, during a large portion of its independent existence, as in the old colonial days, drawn its inspiration from the literature of its parent state, Great Britain. There has been, in this instance, as in the relation between Rome and Greece, on the part of the younger community, first, an entire acceptance of and dependence upon the literary productions of the older state; later, a very general appropriation and adaptation of such productions; still later (and in part pari passu with such appropriation), a large use of the older literature as the model and standard for the literary compositions of the writers of the younger people; while, finally, there has come in the latter half of the nineteenth century for America, as in the second half of the first century for Rome, the development, in the face of these special difficulties, of a truly national literature. For America, as for Rome, this development was in certain ways furthered by the knowledge and the influence of the great literary works of an older civilization, while for America, as for Rome, the overshadowing literary prestige of these older works, and the commercial difficulties in the way of securing public attention and a remunerative sale for books by native authors in competition with the easily “appropriated” volumes of older writers of recognized authority, may possibly have fully offset the advantage of the inspiration.4

James David Hart, in his own history of American publishing, describes the same effect of piracy on American authors:

Samuel Goodrich, the Boston publisher, estimated in 1820 that three-quarters of the books Americans bought were of English origin. In the early years of the century, bookdealers opposed a tariff on printed matter because America could not furnish enough books for the expanded reading public. As printing became a big business, they fought against the importation of English books but still clamored for the works of English writers because, without copyright and royalties, they could be sold at better profit. Either way, English authors were favored.5

Basically, foreign books are better, both in quality and desirability, and because of piracy, they are as cheap or cheaper to purchase than domestic books.

Hart goes on to show how US publishers finally gained the upper hand:

More authors came to public attention with the growth of interest in the novel, many of them Americans after the International Copyright Law of 1891 for the first time made their works no more expensive to issue than those by foreigners. After 1894 more novels, though not always more popular novels, came from Americans than from Europeans.6

The US experience from 100-200 years ago is not an isolated one. The same holds true if we’re talking about a country on the other side of the world in modern times. Scholar Jiarui Liu recently examined the effects of piracy on domestic musicians in China:

[T]he findings here suggest that a high level of piracy could have profound effects on the profitability, applied business models, and creative processes of domestic musicians. In many cases, piracy of foreign works could be more devastating to domestic companies than to foreign companies. Because the competition from low-priced pirated works both online and offline undercuts stable income from royalties, Chinese musicians have witnessed the entire music industry becoming increasingly dependent on alternative revenue streams such as advertising, merchandizing, and live performance. The pressures of paid appearances and extended tours have started to squeeze the time that artists need to spend on music production. The alternative revenue streams also force many music companies to abandon traditional album contracts and operate in a way more like talent agencies that control all aspects of an artist’s career. Music companies are inclined to sign talents at a very young age with a long-term agency deal in order to exploit the full value of artists in the advertising market. In addition, the need to attract sponsorship opportunities puts more emphasis on non-musical qualities, such as a fresh appearance and healthy public image, which to some extent marginalizes “pure” musicians who have less value in those alternative markets.

Most importantly, as copyright piracy obstructs the communication of consumer preferences to musicians, an increasing number of musical works are created to accommodate the tastes of entrepreneurs (e.g., sponsors and advertisers) rather than those of average consumers, and this has caused a fundamental shift in the creative process of the Chinese music industry. Although entrepreneurs should arguably be willing to take whatever is popular among music fans as a draw to their own products, the expectations of entrepreneurs and consumers do not always meet in a dynamic market setting. For this reason, the interests of less commercial artists and new artists are more likely to be compromised.7

It’s not only local creators who are harmed by the piracy of foreign works; open-source software suffers from the piracy of commercial software.

The MPEE report notes that in South Africa, where local music production revolves around a small handful of professional software packages:

Because the production community is relatively small and interconnected, shared production techniques and training introduce strong network effects in the choice of products. Producers tend to use software that has been ‘vetted’ in their communities, and these choices tend to self-reinforce as producers and musicians exchange knowledge. In our interviews, open-source alternatives, such as Audacity, did not even register.8

In emerging economies, the problems piracy causes for open-source alternatives are magnified. Louis Suarez-Potts, the community manager at Sun Microsystems Inc. for the OpenOffice.org open-source project, was asked about these problems:

“Piracy hurts open source because open source asks people to help give back and contribute code, but they say, ‘Why should I help? I have Microsoft Office for free,’” Suarez-Potts said.

Around the world, he said, many national governments are realizing that this hurts them, too, because their citizens are then consumers of stolen technology rather than active participants in open-source communities that can help people gain technology skills that benefit workforces and nations.

By cracking down on software piracy, nations around the globe are starting to see that they can help themselves dramatically by encouraging innovation and creativity — as well as job growth and richer economies — through open-source development, he said.9

As these examples show, the effects of piracy are felt by more than just those whose works are pirated. When it comes to debates about copyright and piracy, it’s important to keep in mind the core of the “copyright question” — the choice between what activities we want to encourage.

With that in mind, Maria Pallante is entirely correct. There are many questions concerning broader copyright policy, but without effective enforcement, copyright simply doesn’t work.

Footnotes

  1. “Douglass C. North – Prize Lecture“. Nobelprize.org. December 9, 1993. [↩]
  2. Landes and Posner, An Economic Analysis of Copyright Law, 18 J.Leg.Stud. 325 (1989). [↩]
  3. Some have hailed the report as effectively establishing that enforcement of IPR’s in emerging economies doesn’t work, but that is an overly superficial reading of the report. [↩]
  4. Authors and their public in ancient times: a sketch of literary conditions and of the relations with the public of literary producers, from the earliest times to the invention of printing, George Haven Putnam, pg. 68 (1893). [↩]
  5. The popular book: a history of America’s literary taste, James David Hart, pp. 67-68 (Univ. of Cali. Press 1950). [↩]
  6. Hart pg. 185. [↩]
  7. Jiarui Liu, The Tough Reality of Copyright Piracy: A Case Study of the Music Industry in China, 27 Cardozo Arts & Entertainment 621, 623-24 (2010). [↩]
  8. Pg. 122. [↩]
  9. Todd Weiss, Software Piracy Hurts the Open-source Community, Too, ComputerWorld, July 23, 2008. [↩]
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Can the Copyright Office Regulate?

November 04, 2010 · · 1 comment

In my previous post about the Copyright Principles Project, I highlighted those proposals that recommend a greater role for the US Copyright Office. Whether or not the Copyright Office should take on a greater role is a subject that undoubtedly can generate plenty of discussion. But today, I want to look at a different issue:

Can the Copyright Office take on a greater role?

Certainly, Congress could easily add new positions to the Copyright Office to bolster its expertise, or the Office can be more active in its advisory role; I’m not talking about that. The question I’m asking relates to those recommendations that contemplate the Office exercising substantive agency powers — creating regulations (rulemaking) and  resolving disputes in a quasi-judicial manner (adjudication). And the question is not whether taking on these powers is practical or worthwhile, but whether taking on these powers is constitutional.1

It’s kind of an odd question; after all, the Office currently does exercise rulemaking powers — creating exceptions to the prohibition against circumventing DRM and technological protections2 — and its sister department within the Library of Congress, the Copyright Royalty Board, exercises adjudicatory powers — determining certain compulsory license rates in a court-like setting. But unlike administrative agencies that were specifically created to exercise these types of powers, the Copyright Office began as a “paper-pushing” department and only over time “grew into” a more robust agency.

This unusual path from ministerial department to something approaching a full-fledged administrative agency has given rise to lingering concerns about the consitutionality of the Copyright Office’s authority to engage in rulemaking and adjudication. To understand these concerns, let’s first take a quick look at how federal agencies in general can exercise these powers in a constitutional manner and then trace the growth of the Copyright Office’s authority since its humble beginnings.

Agencies and Separation of Powers

Today, much of federal law is executed through administrative agencies. Congress passes a law, and then agencies — the EPA, the FCC, the IRS, etc. — create regulations to fill in the details of the law. Agencies might also engage in adjudication, resolving disputes or adjusting regulatory benchmarks within their purview through judicial-esque proceedings. The basic idea behind this system is that agencies have greater expertise and flexibility than Congress to address these details.

In one sense, administrative agencies act like mini-versions of a three-branch government: combining legislative (creating regulations), judicial (adjudication), and executive (enforcing regulations) functions. The Constitution, however, establishes a federal government based on separation of powers. Since the New Deal, Congress and Presidents have increasingly relied on administrative agencies to carry out many government functions, so the courts have had to figure out ways to fit this “fourth branch” of government within the constitutional framework while maintaining checks and balances.

The Constitution prohibits Congress from delegating legislative power to another body. But since 1825, courts have recognized a distinction between general, “important” legislative provisions and mere details.3 Today, agencies can create regulations to “fill up the details” when “Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority.”4

A second requirement to maintain constitutionally sufficient delegation is that the authority must go to an independent or executive branch agency; Congress cannot delegate quasi-legislative authority to a legislative agency.5 True legislation requires passage by both houses of Congress (bicameralism) and the President’s signature (presentment).6 If Congress retains any sort of control over the agency it delegates quasi-legislative authority to, courts view the delegation as a constitutionally improper circumvention of those two requirements. By control, I don’t mean mere influence. The control must be meaningful, like the ability to appoint or remove agency officers7 or the power to veto agency decisions.8

Growing into a Regulatory Agency

Many of the federal agencies today began during the New Deal, and were expressly authorized by Congress to regulate specific areas of the law. The Copyright Office, however, began a few decades earlier, without any substantive regulatory purpose as the goal. Under the first Copyright Act of 1790, copyright registrations were handled by district courts. This continued until 1870, when copyright administration was centralized in the Library of Congress. Congress created the Copyright Office in 1897 as a department within the Library dedicated to copyright administration. For most of the Copyright Office’s history, its duties were limited to processing registrations and other “ministerial” tasks.

The Copyright Office has had the authority to issue regulations since its creation, but it has historically exercised that authority in a limited manner — rules governing interest on late payments to the Office, for example.9 The triennial DRM exception rulemaking procedures set out in the DMCA in 1998 — 101 years after the Office was established — represents the first time the Copyright Office took on substantive rulemaking authority.

Perhaps because of the Copyright Office’s limited exercise of regulatory authority, little attention has been paid to whether that authority is constitutional. The notable exception is E. Fulton Brylawski’s 1976 article The Copyright Office: A Constitutional Confrontation,10 written during the build up to the passage of the Copyright Act of 1976. Brylawski argued that the Copyright Office was a legislative agency and the Act would give the Copyright Office rulemaking authority that exceeds what the Constitution allows. As discussed earlier, Brylawski is right on the latter point: a legislative agency can’t make regulations. But is he right on his first point? Is the Copyright Office indeed a legislative agency?

Legislative or Executive?

At first glance, it might be difficult to see how anyone could say the Copyright Office is not a legislative agency. The Copyright Office is a department within the Library of Congress. The Library of Congress is, well, of Congress. Not surprisingly, then, the US government places the Library of Congress in the legislative branch.11 Courts, too, have characterized the Library of Congress as legislative.12 The Copyright Office’s own website states that it is “part of the legislative branch of government.” And if you look through the US Code, you’ll find repeated references to the Library of Congress being in the legislative branch13 — the Library itself is codified under Title 2, which governs the legislative branch.

Noted copyright expert William Patry considers the above conclusive evidence that the Library of Congress, and by extension the Copyright Office, is a legislative agency. Other scholars have found the need to address the characterization of the Copyright Office when discussing proposals to increase rulemaking or adjudicatory authority. Michael Carroll notes lingering concerns about this subject in Fixing Fair Use.14 Edward Lee cites the fact that the Copyright Office is a legislative agency as one of the reasons why it cannot be relied upon to fill in gaps in the law through rulemaking.15

So … case closed, right? Not quite. When it comes to separation of powers, labels are irrelevant. After all, if the Library of Congress was renamed the National Library, it would be silly to think the constitutional analysis would change. What matters is what branch of government the Copyright Office is an agency of, and agency is determined by control.

Let’s take a look at the two most popular indicators of control: appointment (and removal) power and veto authority over regulations. The legislature has neither when it comes to the Copyright Office. The Register of Copyrights is appointed by (and can be removed by) the Librarian of Congress, who in turn is appointed by the President. Congress does not retain any power to approve or veto Copyright Office rules. Brylawski’s assertion that the Library of Congress is under the control of the Joint Committee of Congress on the Library? — simply not true.16

Most strikingly, Congress debated at some length about what branch of government held sway over the Library of Congress when the Copyright Office was being created and if the Office would constitutionally have authority to issue regulations. The final bill gave the Copyright Office rulemaking authority, reflecting the fact that Congress was satisfied that the setup they settled on was constitutionally sound.17

Settle it in the Courts

Brylawski got an opportunity to take his arguments to the courts. In 1978, he was the attorney for the plaintiff in Eltra v. Ringer, one of the few times the constitutionality of the Register of Copyright’s rulemaking authority was raised. The Fourth Circuit rejected the “label” argument, stating:

It is irrelevant that the Office of the Librarian of Congress is codified under the legislative branch or that it receives its appropriation as a part of the legislative appropriation. The Librarian performs certain functions which may be regarded as legislative (i. e., Congressional Research Service) and other functions (such as the Copyright Office) which are executive or administrative. Because of its hybrid character, it could have been grouped code-wise under either the legislative or executive department. But such code-grouping cannot determine whether a given function is executive or legislative.

The court noted that other courts, including the Supreme Court, had given weight to Copyright Office regulations for decades. “It seems incredible,” said the court, “that, if there were a constitutional infirmity” for that long, no one ever noticed it. In the end, the court concluded that the Copyright Office was an executive office, operating under an officer appointed by the President, not Congress.

The characterization of the Copyright Office as an executive office was reaffirmed in a March 2010 DC Circuit memorandum order. In Live365 v. Copyright Royalty Board, Live365 challenged the constitutionality of the appointment of Copyright Royalty Board Judges.

Wait, what? What does the appointment of Copyright Royalty Board Judges have to do with the rulemaking authority of the Copyright Office?

As it turns out, quite a bit. The question in Live365 boils down to: “is the Library of Congress an executive or legislative agency”: the same question involved in determining whether the Copyright Office has rulemaking authority.

The DC Circuit rejected the argument that the Library of Congress is a legislative agency. The President, not Congress, appoints the head of the department, so it is an executive agency.18

That, along with the fact that Congress doesn’t retain any veto authority over the Library’s (and Copyright Office’s) regulations, leads to the conclusion that the Copyright Office does have authority to issue substantive regulations. So yes, the Copyright Office can take on a greater role in the administration of copyright law. The Copyright Principles Project and other proposals have advanced various recommendations embracing a greater role for the Office, whether through Congress delegating additional regulatory arenas or through the creation of new adjudicatory bodies. The question remains whether the Office should be given a greater role. Given the benefits an agency may provide — flexibility and expertise — I think this question merits further exploration.

Footnotes

  1. This article is largely adapted from a section I wrote in Copyright Reform Step Zero. [↩]
  2. Technically, it is the Library of Congress which creates these regulations, after consulting with the Copyright Office, but for this article, I will be referring to the rulemaking authority of the Copyright Office regardless of which department ultimately promulgates the regulations. [↩]
  3. Wayman v. Southard (1825): “The line has not been exactly drawn which separates those important subjects, which must be entirely regulated by the legislature itself, from those of less interest, in which a general provision may be made, and power given to those who are to act under such general provisions to fill up the details.” [↩]
  4. Mistretta v. US, 488 US 361 (1989). [↩]
  5. Buckley v. Valeo, 424 U.S. 1, 138-41 (1976). [↩]
  6. INS v. Chadha, 462 U.S. 919, 946 (1983). [↩]
  7. Bowsher v. Synar, 478 U.S. 714, 726 (1986). [↩]
  8. INS v. Chadha at 954-59. [↩]
  9. MPAA v. Oman, 969 F.2d 1154, 1156 (DC Circ 1992). [↩]
  10. 44 George Washington Law Review 12. [↩]
  11. United States Government Manual, 2009-2010 p. v. [↩]
  12. See Harry Fox Agency v. Mills Music, 720 F.2d 733 (2d Cir. 1983) (“The Library of Congress … is a part of the legislative branch itself”); Barger v. Mumford, 265 F.2d 380, 382 (DC Cir. 1959) (“Library of Congress has long been treated as being in or under the jurisdiction of the legislative branch of the Government”). [↩]
  13. Check out 5 USC § 5531(4), for example. [↩]
  14. Pp. 1131-32. I noted previously that the proposal he makes inspired one of the possibilities for advancing recommendation #4 in the Copyright Principles Project. [↩]
  15. Warming up to User-Generated Content, 2008 University of Illinois Law Review 1459, 1475 (2008). [↩]
  16. 29 Cong. Rec. 1947 (1896) (Rep. Dockery). [↩]
  17. For a comprehensive list of citations to those debates, check out 1 William Patry, Patry on Copyright § 1:41 n.4, especially , e.g., 29 Cong. Rec. 318-19 (1896) (Rep. Dockery): “This Library of Congress is a department of the Government. It is an executive department and should be under the control of the executive branch”. [↩]
  18. For a detailed look at this and the other issues raised in Live365 v. CRB, check out Department of the Inferiors? posted at CommLawBlog. [↩]
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Marybeth Peters to Retire as Register of Copyrights

September 15, 2010 · · Comments Off

On September 13, 2010, the Library of Congress released the following:

Register of Copyrights Marybeth Peters has announced her intention to retire effective December 31, 2010. Ms. Peters has served as Register of Copyrights since August 7, 1994, a tenure longer than any other Register with the exception of Thorvald Solberg, the first Register. Her exemplary service to the nation began in the Library of Congress in October 1965, and she began working in the Copyright Office in 1966. During her 45-year career, she has held positions at all levels in the Office including acting general counsel, policy planning advisor, chief of the Examining Division, chief of the Information and Reference Division, attorney-advisor, and music examiner. She also served as a consultant on copyright law to the World Intellectual Property Organization in Geneva (1989-1990). For further information, go to the Copyright Office website. The Library of Congress has posted a vacancy announcement for the position of Register of Copyrights. Interested parties are invited to apply. For further information, go to the Library of Congress website.

I would like to extend my thanks to Marybeth Peters for her exemplary service as this nation’s 11th Register of Copyrights. Marybeth Peters presided over the US Copyright Office during a period of significant changes not only in technology and communications, but in the role of the Office itself.

When Peters assumed her post, Friends had yet to premiere. More importantly, the internet was still on the outskirts of public awareness. In a 1993 article, the New York Times covered the introduction of the Mosaic web browser – “the first ‘killer app’ of network computing”, credited elsewhere as popularizing the world wide web. Only 994 .com domains were registered at the beginning of 1994, growing to 3,712 by the end of the year.1 Since then, we’ve seen the introduction of internet services like Google, YouTube, Napster, iTunes, and Hulu. It’s fascinating to see how much the technological landscape has changed during Peters’ time as Register. Consider this: in the last round of DMCA exemption proceedings that went into effect this past July, her Office recommended an exemption for circumventing protection on DVDs for certain educational and noncommercial uses. When she took office, DVDs had not yet been invented.2

Peters saw – and played varying roles shaping – changes in United States copyright law to address these rapid technological advances: the Digital Performance Right in Sound Recordings Act of 1995, the Digital Millennium Copyright Act of 1998 (DMCA), the Copyright Term Extension Act of 1998, and the PRO-IP Act (2008), to give a few notable examples. Internationally, she was there to see the inception of the World Trade Organization and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), considered “the most important multilateral instrument for the globalization of intellectual property laws.” It should not be surprising, then, that the nature of the Copyright Office itself also changed significantly while Peters was at the helm.

The US Copyright Office

Despite the increasingly public discourse on copyright law, the role of the executive agency3 that is the Copyright Office is still somewhat mysterious. The United States Copyright Office was formed in 1897 as a department within the Library of Congress. Historically, the Office’s duties have been limited – accepting and recording copyright registrations. It should be noted that the Office’s duty here is ministerial. Its granting or denial of registrations is not determinative of what precisely is protected by copyright, but rather whether the work fulfills the minimum requirements for protection – is it proper subject matter as defined by the Copyright Act, is the form properly filled out, did the check accompanying the application clear, etc.

The Copyright Office does play an important advisory role to Congress, other executive departments, international bodies, and foreign governments regarding copyright law and policy. It played a pivotal part in the efforts which lead to the 1909 and 1976 Copyright Acts. Congress often relies on the Office to prepare studies on specific areas involving copyright or contribute testimony at Congressional hearings.

But until recently, the Copyright Office had almost no role in directly administering substantive copyright law and policy.4 This changed with the passage of the DMCA, which gave the Office the authority to conduct triennial rulemaking procedures to determine exceptions to the anti-circumvention provisions of 17 USC § 1201. For the first time in its history, the Office had substantive rule-making authority. As the issues presented in copyright law become more complex, it’s not hard to imagine that Congress will rely on the Copyright Office to administer that law more.

What’s Next

Whoever the next Register of Copyrights will be, he or she is guaranteed to preside over an office with an increasingly expanded role. Peters’ term coincided with the federal government placing increased priority on enforcing intellectual property rights. Undoubtedly, this trend will continue during the next Register’s term, and I think it’s fair to say the Copyright Office itself will continue to see a growing role in administering copyright law and policy.5 The scope of international copyright law will continue to expand; the final draft of the Anti-counterfeiting Trade Agreement is expected to be completed by the end of this year, with the acceptance and implementation by the US likely to be a major issue during the first couple years of the new Register.

I certainly have no inside information about likely candidates for the next Register of Copyrights, and I have yet to come across any predictions. Still, I’d like to hazard some guesses based on historical practice. Most previous Registers have come from within the Copyright Office itself. The very first Register, Thorvald Solberg, had played an active role in the copyright functions of the Library of Congress prior to being tapped by Librarian John Russell Young to head up the newly created department. Since then, only four of the fourteen Registers and Acting Registers – Clement Lincoln Bouvé, Sam Bass Warner, David L. Ladd, and Ralph Oman - had not worked within the Copyright Office before being appointed (though it should be noted that even those four have had some experience in the federal government).

If we look at the chart showing the Organization of the US Copyright Office, we can see several candidates for the position if selection follows the historical pattern: David O. Carson, Maria Pallante, and Nanette Petruzelli (who spearheaded the change from separate registration forms for different subject matter to a consolidated form) are all “next in line” in the hierarchy. All seem fine candidates, all have a combination of public and private experience and actively involved in copyright policy outside their work at the Copyright Office. I expect we’ll hear more details about the next United States Register of Copyrights very shortly.

Footnotes

  1. http://www.vb.com/domain-timeline.htm [↩]
  2. According to Wikipedia, the specification for DVDs was finalized December 1995 and introduced to the market in November 1996. [↩]
  3. Despite some lingering doubts, the Copyright Office is indeed an executive agency. I have the proof, let me show you it. [↩]
  4. For a detailed look at the institutional evolution of copyright law administration, check out Joseph P. Liu, Regulatory Copyright, 83 North Carolina Law Review 87 (2004). [↩]
  5. Another plug for my paper, Copyright Reform Step Zero, where I argue that Congress should, in fact, delegate the bulk of administering copyright law to the Copyright Office. [↩]
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