Remix Without Romance: What Free Culture Gets Wrong

By , April 18, 2012.

In his four-part video, Everything is a Remix, filmmaker Kirby Ferguson makes a familiar argument:

Copy, transform and combine. It’s who we are, it’s how we live, and of course, it’s how we create. Our new ideas evolve from the old ones.

But our system of law doesn’t acknowledge the derivative nature of creativity. Instead, ideas are regarded as property, as unique and original lots with distinct boundaries.

I say familiar because if you’ve paid any attention to copyright issues in the last decade or so, you’re bound to have heard a variation on the claim. Other videos like Copyright Criminals take the same approach. Lawrence Lessig has written several books on the topic, and entire organizations like Creative Commons have been created to address and advance this claim. 1See Remix and Free Culture by Lessig. See also Siva Vaidhyanathan, Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity; James Boyle, The Public Domain: Enclosing the Commons of the Mind.

This idea that copyright law hinders creativity is one of several ideas central to what could be called “free culture,” and it has fueled a great deal of criticism of current copyright law and opposition to enforcement efforts. Free culture scholarship has held sway in legal literature –  with many of its ideas cited by IP academics outside the free culture sphere — and enjoyed very little criticism until very recently.

In Remix Without Romance, UC Davis professor of law Thomas W. Joo provides a comprehensive and convincing critique of free culture scholarship.

Remix Without Romance

A highly recommended read. The abstract says:

A dominant argument in intellectual property scholarship asserts that technologies such as digital copying empower individuals to participate in the making of culture. Such participation involves individuals appropriating cultural material, “remixing” it with other elements, and “recoding” it by assigning it alternative meanings. By enabling more people to participate in culture, remixing and recoding supposedly enhance “semiotic democracy” and mitigate the dominance of the media industry. The same theorists who make this argument also tend to assert that copyright law is in need of significant reform because it inhibits recoding and thus stifles semiotic democracy.

This Article challenges the empirical assertion that law inhibits recoding—but it also questions the normative assumption that recoding is presumptively good for semiotic democracy. This Article focuses on a specific type of recoding: musical sampling (that is, the recoding of music through digital copying and other means). Sampling, particularly in hip-hop music, is frequently cited as a paradigmatic example of recoding that has been inhibited by intellectual property law. The legal history of sampling, however, suggests otherwise. Commentators have misread important judicial opinions about sampling and misunderstood the business practices of the music industry. At least in the sampling context, law has not prevented the reallocation of recoding rights by contract.

While markets have been able to reallocate sampling rights, however, such transactions do not necessarily advance semiotic democracy, because market failures afflict the marketplace of ideas. In the cultural context, as in the political and economic contexts, formally equal opportunity to participate does not result in equality of influence, and can in fact exacerbate power imbalances. For example, legal and technological innovations (such as digital copying and the Internet) can enable cultural underdogs to recode the messages of media conglomerates and other dominant cultural institutions. But those same innovations also allow dominant institutions to appropriate from the underdog—and dominant institutions can then use their influence to “drown out” those independent voices with recoded meanings. Moreover, recoding by its nature involves the incorporation and repetition of dominant cultural messages. Such repetition can propagate and reinforce dominant messages, resulting in the cooptation of recoding, regardless of the recoder’s intent. In short, recoding is not clearly conducive to semiotic democracy. Rather, it is full of internal contradictions that make its relationship to semiotic democracy an ambivalent one.

In short, Joo makes two claims.

First, many of the factual claims made by free culture advocates are incorrect. This is important. Amongst copyright skeptics, many question statistics about the economic benefits of copyright or effects of piracy and calls for more empirical evidence in copyright policy are common. Yet, as Joo demonstrates, many free culture arguments lack such empirical evidence. They may sound attractive, and they are repeated often, but do not hold up under closer scrutiny. In the article, Joo focuses specifically on musical sampling to demonstrate the differences between the facts on the ground and the narrative advanced by free culture scholars.

Second, Joo refutes the normative free culture claims that weakening copyright rules would increase participatory culture. He finds little reason to believe that “semiotic democracy” would be enhanced, and media dominance in culture would be reduced, if the law was reformed to better allow remixing and recoding.

I want to look at the first of these claims today.

Did Copyright Law Kill Sampling?

Thomas Joo focuses on “sampling”, especially sampling in hip-hop, because it is emblematic of the type of artistic practice free culture scholars focus on, and sampling has received so much attention from legal academics. Joo notes, “The hip-hop era has coincided with the digital age, and hiphop has become closely identified with recoding and particularly digital remixing. Indeed, the term ‘remix,’ which today is often used to refer to recoding practices in general, derives from pop music, where it has been used for decades to refer more narrowly to re-edited versions of records in hip-hop, disco, and other genres.”

The prevailing view is that sampling developed as an artistic practice in early hip-hop by flying under the radar of copyright law. Then, as a result of a series of lawsuits beginning in the 1990s, the legal landscape radically shifted. Sampling was declared copyright infringement and largely died out because of the cost of incorporating previously recorded music into new songs.

The prevailing view is wrong, according to Joo. “The narrative of a battle between copyright and hip-hop is an overdramatized myth that ignores the actual history of the interaction between law and musical recoding.”

Joo blames this myth on free culture scholars “thinking like a lawyer, not like an artist.” They overemphasise the effect of law on artistic practices: legal doctrines lag behind artistic innovation, which limits their “role to settling disputes over the proceeds from established practices.”

Joo marshals impressive research and analysis to support his claims. He begins by providing examples of “sampling” that pre-date hip-hop — and examples of recording artists getting and paying for permission to use such samples. The emergence of hip-hop in the late 1970s into the music industry did not change this.

Both turntablism and rap music made the transition from live performance to records, and the existing business practice of paying for permission to appropriate was, quietly and unremarkably, extended to hiphop records. Indeed, the practice dates to the very first commercially successful hip-hop record—yet it did not prevent hip-hop from becoming a dominant artistic and commercial force in popular music.

Infringement lawsuits involving sampling began to appear in the early 90s. The most frequently cited sampling cases, however, have been misinterpreted, and their effect exaggerated. Chief among these are Grand Upright Music v. Warner Bros. Records, (considered the first “sampling” lawsuit to go to court) and Bridgeport Music v. Dimension Films.

Joo on Grand Upright:

Copyright scholars are in general agreement that a 1991 opinion, Grand Upright Music v. Warner Bros. Records, suddenly and radically changed the legal status of sampling by declaring that sampling without copyright permission constitutes infringement. This general understanding is, in fact, a gross misconception of the opinion. Grand Upright did not even present the question of whether unlicensed sampling would constitute infringement, because the defendants conceded that it would. Indeed, the historical record, including the court records in Grand Upright itself, shows that the hip-hop community, from its earliest days, generally understood and respected the obligation to obtain and pay for permission to use samples in commercial recordings.

This “gross misconception” of the law and business practices surrounding sampling extends to Bridgeport, a 2004 Sixth Circuit decision that you’ll find in just about any discussion on copyright law and sampling since.

Joo points out that “Bridgeport is the decision of only one circuit, and not one that is especially influential with respect to copyright law,” and even so, the opinion appears  “to have been consistent with existing industry practices—practices under which sampling flourished. By the late 1980’s, it was well-established practice in the music industry to seek copyright permission both for lengthy, recognizable samples and for briefer, slice and-dice samples.”

Legal scholars often state that albums in the earlier years of hip-hop that made heavy use of sampling — the Beastie Boy’s Pauls Boutique and early Public Enemy albums are frequently used as examples — couldn’t be made today today because of copyright law. Joo argues that this is simply incorrect. These albums were made, after all, at a time when legal rules and business practices concerning samples were similar to today — not to mention that samples on many of those albums were cleared and licensed. The shift away from sample-heavy styles of music is more reflective of a shift in musical tastes than a shift in the law.

Joo’s takeaway: “As a historical matter … copyright law has not prevented the development of sampling.”

The Mythology of Free Culture

Remix Without Romance is a fascinating read for anyone interested in the issues discussed above. And it’s tremendously useful for its empirical contributions to copyright doctrine.

In my opinion, it is also an important work for critiquing free culture (and other copyright skepticism) scholarship. The “exaggerations” (to use Joo’s term) in such scholarship are not isolated to digital sampling — it is concerning how many similar claims are made in this area. In a way, large portions of free culture and other opposition to copyright have been built upon mythology. The effects of this scholarship aren’t limited to academia; free culture has become very popular online and in the general public, where these specious claims morph into talking points against copyright in toto.

References

Copyright and the First Amendment: The Unexplored, Unbroken Historical Practice, Part 5

By , April 16, 2012.

In this series, I’ve been looking at the historical record to attempt to explain why the idea that there is tension between copyright law and the First Amendment took so long to appear — it was nearly two centuries after the Copyright Act of 1790 and the Bill of Rights were passed that the first legal journal articles appeared raising the question, and it wouldn’t be until 2003, in Eldred v. Ashcroft, that the US Supreme Court confronted the issue directly. (Read Part 1, Part 2, Part 3, and Part 4).

The point of this examination is not to advance any arguments about these claims, but rather to add to the debate. As the Court noted in Eldred, “a page of history is worth a volume of logic.” It’s not as if no one was concerned with free speech before the 1960s.

Today, I want to look at copyright law’s distinction between ideas and expression. The doctrine was present in the early days of copyright, and the modern day view that it serves as a First Amendment accommodation seems consistent with historical views on the scope of the freedom of speech and the press.

The Idea Expression Distinction as a First Amendment Accommodation

The idea that copyright’s distinction between idea and expression can serve to resolve any tension with the First Amendment was first articulated by Melville Nimmer in 1970. 1Does Copyright Abridge the First Amendment Guarantees of Free Speech and Press?, 17 UCLA Law Review 1180. To Nimmer, distinguishing between idea and expression to protect free speech interests in copyright cases served as a “definitional balance” — a methodology developed largely by Nimmer. 2Norman T. Deutsch, Professor Nimmer Meets Professor Schauer (and others): An Analysis of “Definitional Balancing” as a Methodology for Determining the “Visible Boundaries of the First Amendment”, 39 Akron Law Review 483, 484 (2006).

The Supreme Court endorsed Nimmer’s view in Harper & Row Publishers v. Nation Enterprises. In the 1985 case, it said, “The Second Circuit noted, correctly, that copyright’s idea/expression dichotomy “strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an author’s expression.” Eldred v. Ashcroft enshrined the doctrine as US law in 2003, calling the idea/expression distinction one of copyright law’s “built-in First Amendment accommodations.”

Nimmer premised the idea of the idea/expression distinction as a First Amendment accommodation on logic, but does it have any historical support? Because there is so little in the historical record of the relationship between copyright law and freedom of speech, it shouldn’t be surprising that there is no express evidence that anyone thought in Nimmer’s terms before his article. However, I think there is implicit evidence that, had the question been put to pre-20th century legal thinkers, they would likely accept Nimmer’s definitional balance.

Freedom of Speech and Freedom of Opinion

You can write books about the development of the freedom of speech, but for this discussion, it’s helpful to describe one of the dominant progressions of the concept during the 18th century.

The right to freedom of speech owes much of its existence to the liberty of the press. The liberty of the press resulted from the expiration of England’s Licensing Act in 1694. In the following decades, it was widely understood that government had no right to license the press; but what else the liberty of the press encompassed would be the subject of debate throughout the 18th century.

William Blackstone describes the conservative view in his Commentaries on the Laws of England:

The liberty of the press is indeed essential to the nature of a free state: but this consists in laying no previous restraints upon publications, and not in freedom from censure for criminal matter when published. Every freeman has an undoubted right to lay what sentiments he pleases before the public: to forbid this, is to destroy the freedom of the press: but if he publishes what is improper, mischievous, or illegal, he must take the consequence of his own temerity. To subject the press to the restrictive power of a licenser, as was formerly done, both before and since the revolution, is to subject all freedom of sentiment to the prejudices of one man, and make him the arbitrary and infallible judge of all controverted points in learning, religion, and government. But to punish (as the law does at present) any dangerous or offensive writings, which, when published, shall on a fair and impartial trial be adjudged of a pernicious tendency, is necessary for the preservation of peace and good order, of government and religion, the only solid foundations of civil liberty. Thus the will of individuals is still left free; the abuse only of that free will is the object of legal punishment. Neither is any restraint hereby laid upon freedom of thought or enquiry: liberty of private sentiment is still left; the disseminating, or making public, of bad sentiments, destructive of the ends of society, is the crime which society corrects.

A 2002 paper by Jeremy Ofseyer is particularly illuminating as one way to understand the backdrop of the 18th century experience that eventually led to the First Amendment. Ofseyer says:

England, like many other countries, had long enforced orthodoxy in matters of opinion. It did so in order to save the souls of heretics and out of fear that heterodoxy frays the social fabric and invites anarchy. According to this intolerant view, unorthodox opinions are not only false and offensive, but also inherently dangerous because they undermine established institutions and norms. Blackstone catalogued two main categories of opinion bans: offenses against God and religion and offenses against crown or government. 3Speech or Opinion? Two Objects of First Amendment Immunity, 2 Utah Law Review 843, 869-70.

Ofseyer notes that American liberal thinkers of the time, particularly Thomas Jefferson and James Madison, sharply disagreed with this view of the law as Blackstone described it:

Diversity of opinion is … the healthy product of freedom of thought and speech: “In every country where man is free to think and to speak, differences of opinion will arise from difference of perception, and the imperfection of reason  … .” For these reasons, Jefferson concluded that “the opinions of men are not the object of civil government, nor under its jurisdiction.”

According to Madison, there is a fundamental human property right to one’s “opinions and the free communication of them.” From this distinct, property-based premise, along with other premises akin to Jefferson’s, he reached the same conclusion: “Opinions are not the objects of legislation.”

Jefferson and Madison’s views were obviously not unanimously held at the time — before the 18th century was out, the U.S. Congress would pass the Alien and Sedition Acts, making it a crime to print or utter “any false, scandalous and malicious writing or writings against the government of the United States.” The Acts were very controversial at the time, and much of the debate was between proponents of the Blackstonian conception of the freedom of the press which permitted regulation of opinions and the liberal view that freedom of the press immunized liability for opinions. 4Compare Henry Lee, Report of the Minority on the Virginia Resolutions and James Madison, Virginia Resolutions.

The Idea-Expression Distinction in Copyright’s Early Days

One of the fundamental doctrines of copyright law, the idea-expression distinction limits copyright protection to the specific expression of a creator, leaving the ideas embodied in that expression free for all to use. The 1879 Supreme Court case Baker v. Selden is often cited as the earliest articulation of the idea expression distinction, but that is not exactly true.

The earliest discussions on the nature of copyright included a distinction between ideas — which remain free to the public — and expression — which is susceptible to protection by copyright. Discussions like these began in earnest after the passage of the Statute of Anne in England in 1710, and, though these same discussions continue to this day, toward the end of the 18th century, “all the essential elements of modern Anglo-American copyright law were in place.” 5Mark Rose, Authors and Owners: The Invention of Copyright (1993).

These essential elements include the idea-express distinction. Wrote English author and churchman William Warburton in 1762:

[H]e who obtaineth my copy may appropriate my stock of ideas, and, by opposing my sentiments, may give birth to a new doctrine or he may coincide with my notions, and, by employing different illustrations, may place my doctrine in another point of view : and either case he acquireth an exclusive title to his copy, without invading my property. 6An enquiry into the nature and origin of literary property.

Noted English jurist William Blackstone wrote of the doctrine in 1766. Blackstone used the term “sentiment” for “ideas” and “language” for “expression”.

Now the identity of a literary composition consists intirely in the sentiment and the language; the same conceptions, cloathed in the same words, must necessarily be the same composition: and whatever method be taken of conveying that composition to the ear or the eye of another, by recital, by writing, or by printing, in any number of copies or at any period of time, it is always the identical work of the author which is so conveyed; and no other man can have a right to convey or transfer it without his consent, either tacitly or expressly given. 7Commentaries 2:406.

English lawyer Francis Hargrave wrote in his seminal treatise An Argument in Defence of Literary Property (1774), “the use of ideas and knowledge is as common as it would be, if the right of printing was not appropriated.”

In Germany, philosopher Johann Gottlieb Fichte published Proof of the Illegality of Reprinting in 1793, which made a distinction between the material aspect of a book and the ideational aspect:

This ideational aspect is in turn divisible into a material aspect, the content of the book, the ideas it presents; and the form of these ideas, the way in which, the combination in which, the phrasing and wording in which they are presented.

…[T]he content of the book … can be the common property of many, and in such a manner that each can possess it entirely, clearly ceases upon the publication of a book to be the exclusive property of its first proprietor (if indeed it was so prior to publication, which is not always the case with some books nowadays), but does continue to be his property in common with many others. What, on the other hand, can absolutely never be appropriated by anyone else, because this is physically impossible, is the form of the ideas, the combination in which, and the signs through which they are presented.

It is clear that by the time the United States became independent of England and formed its own government, a distinction between ideas and expression was established in copyright law.

Freedom of Ideas, Protection of Expression

The distinction between ideas and expression in copyright law was recognized early on. At the same time, freedom of speech and the press was seen as vital to the protection of opinion and the dissemination of ideas and facts. The notion that the idea/expression distinction ensures copyright law’s compatibility with the First Amendment’s prohibition on laws infringing free speech would thus appear wholly consistent with historical conceptions of these freedoms and the law. Copyright does not bar the “free communication of” ideas, nor does it punish anyone for disseminating “bad sentiments.”

We can turn to James Madison for indirect evidence of this consistency. Madison, after all, proposed that the federal Congress should have the power to secure copyrights during the Constitutional Convention. Years before that, he sat on the Continental Congress committee that encouraged the States to pass their own copyright legislation and penned Virginia’s subsequently passed copyright act. Few of the Founding Fathers could claim more responsibility for Congress’s authority to make copyright law.

James Madison also was the first to introduce a Bill of Rights to amend the Constitution, although he had originally opposed the idea. What’s interesting is the language he chose regarding the freedom of speech. Madison’s amendment that would eventually become part of the First Amendment said, “The people shall not be deprived or abridged of their right to speak, to write, or to publish their sentiments” (emphasis added).

Note that this is the same language used by William Blackstone when he described copyright, saying the “identity of a literary composition consists intirely in the sentiment and the language.”

William Blackstone was one of the most influential legal scholars to the Founding Fathers, Madison included. 8Mary Sarah Bilder, James Madison, Law Student and Demi-Lawyer, 28 Law and History Review 389, 399 (2010). And its possible the same language was a conscious choice. Bilder notes that Madison’s life showed a devotion to “the problem of language.” “He copied cases in which the presence of one word mattered.” His legal notes reveal questions that fascinated Madison, like “What did particular words mean?”

Madison cared about perspicuity. In one sense, he was not unusual in this regard, for perspicuity occupied the minds of late eighteenth-century rhetoricians. The word reappears in letters written during the Philadelphia Convention and his later correspondence. In Federalist 37, Madison famously wrote, “Perspicuity therefore requires not only that the ideas should be distinctly formed, but that they should be expressed by words distinctly and exclusively appropriated to them.”

This isn’t definitive evidence, of course. But it does support the idea that, had Madison and other Founding Fathers been confronted with the question of whether copyright law conflicts with the First Amendment, they would have accepted the Supreme Court’s holding that the First Amendment is accomodated by copyright law’s idea/expression distinction.

References

References
↑1 Does Copyright Abridge the First Amendment Guarantees of Free Speech and Press?, 17 UCLA Law Review 1180.
↑2 Norman T. Deutsch, Professor Nimmer Meets Professor Schauer (and others): An Analysis of “Definitional Balancing” as a Methodology for Determining the “Visible Boundaries of the First Amendment”, 39 Akron Law Review 483, 484 (2006).
↑3 Speech or Opinion? Two Objects of First Amendment Immunity, 2 Utah Law Review 843, 869-70.
↑4 Compare Henry Lee, Report of the Minority on the Virginia Resolutions and James Madison, Virginia Resolutions.
↑5 Mark Rose, Authors and Owners: The Invention of Copyright (1993).
↑6 An enquiry into the nature and origin of literary property.
↑7 Commentaries 2:406.
↑8 Mary Sarah Bilder, James Madison, Law Student and Demi-Lawyer, 28 Law and History Review 389, 399 (2010).

Friday’s Endnotes – 04/13/12

By , April 13, 2012.

My apologies to readers of this site this week. On Tuesday, my webhost began experiencing hardware issues that took Copyhype (and many other sites) offline. The site was up again by Wednesday, but since then, there have been lingering issues that have resulted in the site loading slow or timing out. Hopefully things will be back to normal soon!

In the meantime, don’t forget that you can Subscribe to Copyhype by Email or through RSS to make sure you never miss a post.

Meet The New Boss, Worse Than The Old Boss? — David Lowery (Cracker, Camper van Beethoven) expands on a talk he gave at this winter’s SF Music Tech Summit. A fascinating and illuminating discussion; be sure to also check out part 2, part 3, part 4, and part 5.

Grooveshark: Trolling The Sea Of Artists To Make A Buck? — Jeff Price of Tunecore has some strong words about the music streaming site that brags about not being licensed. “Grooveshark is a fish rotting from the head down. The people running it are immoral and could care less about who and/or what they hurt as long as they make money.”

Canard du Jour: Do you still have your personality after Google makes a copy? — Copyright and privacy are more closely linked than appearance suggests. The trouble is that arguments advanced to weaken copyright can also be used to weaken privacy rights — and, as Chris Castle explains, that’s fine by Google.

The Nimble Empire: In Defense of Cable (via John August) — On why the evolution of cable will be amazing and what critics get wrong. “Really, what the pro-piracy arguments come down to — at least in the United States, where most content is pretty ready available (a few exceptions aside) — is ‘this is legally available, but not at a price I am willing to pay,’ and/or ‘this is legally available, but not for a time that I am willing to wait.’ Or rather — ‘I insist that you immediately provide your content at a price and on a device or devices of my choosing.’ This is a newly emerging and oddly curious expectation towards media.”

The film tax credit works, and Western Pennsylvania is a winner (via The Mentally InFirm)— The Pittsburgh Post-Gazette reports on the positive effect that film and television production has on the Pennsylvania economy and how PA’s film tax credit has helped spur that production. The Post-Gazette notes, “Since the program’s inception, nearly $242.5 million in state tax credits have been approved and/or awarded to film production companies, which has resulted in estimated total economic activity of $1.8 billion and the creation and sustaining of almost 14,500 jobs statewide.”

Other Ways to Think About the Copyright Debate — At the Music Think Tank, Simon Tam asks, “Do we, as a society, value our artists and the arts as a whole? Do we appreciate them enough to support them so that the arts can continue to grow and that artistic expressions of ideas can be protected? Or do we believe that all artistic works should be free, no matter the cost, even if that cost includes the actual content creators themselves?”

The CCI and the Copyright Conspiracy — “What gets my attention is the rhetoric that consumers are owed better representation in the CCI than they’re currently receiving.  Of course consumers should advocate and argue for their interests, but why would they be owed representation in a private coalition, regulating a privately operated network?  Advocates like the Electronic Frontier Foundation argue that under-representation leads to the real problem of a lack of due process to consumers when the CCI cuts off their Internet access in the face of a copyright infringement allegation.  If your ISP restricts or cuts off your Internet access, how has it violated your ‘due process?’  How does it owe you “due process” in the first place?”

Q&A: Attorney Paul Smith of Jenner & Block Deciphers YouTube Appeal Decision — Paul Smith, the attorney from Jenner & Block who represented Viacom in its appeal against YouTube, discusses last week’s decision by the Second Circuit.

The 3 Types of Copyright Conversations — Jonathan Bailey labels these the ethical, legal, and practical arguments, and notes how quickly and easily they become conflated. “Copyright, piracy, Web freedom, privacy, etc. are all emotionally-charged topics but they are also absolutely critical to the future of the Web and our culture as a whole. It’s worth taking the time to get these conversations right.”

Art and Democracy: The NEA, Kickstarter, and Creativity in America — A fascinating comparison of arts funding by the National Endowment of the Arts and Kickstarter. “Right now, it’s not clear that Kickstarter is doing much more than offering a streamlined process for donations that would probably have happened anyway.”

Viacom v. YouTube: The Second Circuit’s Decision

By , April 09, 2012.

On Thursday, the Second Circuit Court of Appeals decided Viacom v. YouTube (PDF of decision).

The decision has spurred a range of reactions, with both sides publicly claiming a sort of victory; others have stated the decision “is a bummer for Google and the UGC community“, is “mostly good (for the internet and innovation)“, is a win for Viacom, or is a mixed victory.

Regardless, the opinion is sure to be an important decision in the DMCA pantheon for years to come. The influential Second Circuit has interpreted many DMCA safe harbor provisions that affect both online service providers and copyright holders.

In 2007, Viacom sued YouTube for copyright infringement because of unauthorized public performance, display, and reproduction of their works on the video site. A couple of months later, a number of other plaintiffs, including various film studios, television networks, music publishers, and sports leagues filed suit against YouTube with similar claims. These plaintiffs also sought class action certification.

The District Court combined the two suits as related, and in 2010 ruled entirely in favor of YouTube on combined motions for summary judgment. 1The motion for class action certification was subsequently dismissed as moot. The Second Circuit’s decision is a result of both groups of plaintiffs appealing that decision.

Under the Digital Millennium Copyright Act of 1998 (the DMCA), online service providers are immune from monetary liability for copyright infringment as a result of certain activities — the most notable, and the one at issue in Viacom, is the safe harbor for “Information Residing on Systems or Networks At Direction of Users.” 217 USC § 512(c).

The DMCA lays out requirements for service providers to qualify for this safe harbor, several of which are germane here. I’ll look at each of them in turn and how they were affected by Thursday’s decision.

Knowledge

First, to be protected by the DMCA, a service provider must not have “actual knowledge that the material or an activity using the material on the system or network is infringing” or “is not aware of facts or circumstances from which infringing activity is apparent.” On this point, the parties disputed over whether this means “a general awareness that there are infringements” on a service — likely indisputable in this case — or rather “actual or constructive knowledge of specific and identifiable infringements of individual items.” On this point, the District Court adopted the latter interpretation, in favor of YouTube.

On appeal, the Second Circuit agreed with the District Court’s interpretation of the DMCA’s knowledge provision but vacated the summary judgment since there was evidence that YouTube may have had knowledge of specific infringing clips. It also held that the District Court failed to examine whether YouTube had been willfully blind to specific infringing clips.

This is perhaps the key issue in the case, especially since the second knowledge prong — awareness of facts or circumstances from which infringing activity is apparent (commonly referred to as “red flag” knowledge) — has largely been written out by courts. 3See Perfect 10 v. CCBill, “Because CWIE and CCBill provided services to ‘illegal.net’ and ‘stolencelebritypics.com,’ Perfect 10 argues that they must have been aware of apparent infringing activity. We disagree.” I don’t believe, in fact, that any court has yet to find that a service provider isn’t protected by the DMCA because of “red flag” knowledge. 4Greg Jansen, Whose Burden is it Anyway? Addressing the Needs of Content Owners in DMCA Safe Harbors, 62 Federal Communications Law Journal 153, 163 (2010), “To date, no OSP has failed the stringent red-flag test”.

The Second Circuit was mindful of this but focused on the language of the statute to render the first knowledge prong as incorporating an “subjective” standard while the red flag prong reflects an “objective” standard. “Both provisions do independent work, and both apply only to specific instances of infringement.” 5I’ll note that Congress wasn’t thinking in these terms. In fact, the House Commerce Committe Report on the DMCA said, “The ‘red flag’ test has both a subjective and an objective element. In determining whether the service provider was aware of a ‘red flag,’ the subjective awareness of the service provider of the facts or circumstances in question must be determined. However, in deciding whether those facts or circumstances constitute a ‘red flag’—in other words, whether infringing activity would have been apparent to a reasonable person operating under the same or similar circumstances— an objective standard should be used.”

Though the “red flag” prong seems all but superflous in practice, on remand, Viacom and the putative class plaintiffs should argue that it triggers a duty to investigate further. That is, when a service provider becomes aware of facts or circumstances that make infringing activity apparent, it must take affirmative steps to determine the legality of the activity. The Second Circuit didn’t address this issue, but the Ninth Circuit has held the opposite:

Perfect 10 alleges that CCBill and CWIE were aware of a number of “red flags” that signaled apparent infringement. Because CWIE and CCBill provided services to “illegal.net” and “stolencelebritypics.com,” Perfect 10 argues that they must have been aware of apparent infringing activity. We disagree. When a website traffics in pictures that are titillating by nature, describing photographs as “illegal” or “stolen” may be an attempt to increase their salacious appeal, rather than an admission that the photographs are actually illegal or stolen. We do not place the burden of determining whether photographs are actually illegal on a service provider.

This can’t be correct. In many other situations, the law places a burden on a party to inquire into the actual nature of something when the facts and circumstances make it apparent. 6For example, in federal securities law: Dodds v. Cigna Securities, “when the circumstances would suggest to an investor of ordinary intelligence the probability that she has been defrauded, a duty of inquiry arises, and knowledge will be imputed to the investor who does not make such an inquiry”; fraud: Higgins v. Crouse, “[W]here the circumstances are such as to suggest to a person of ordinary intelligence the probability that he has been defrauded, a duty of inquiry arises, and if he omits that inquiry when it would have developed the truth, and shuts his eyes to the facts which call for investigation, knowledge of the fraud will be imputed to him”; apparent agency: Whitney v. Citibank, “[A]bsent awareness of facts indicating that a partner is acting beyond his real or apparent authority, a third party is not obligated to investigate the matter further or search for some limitation on that partner’s authority”; statute of limitations: Kronisch v. US, “[E]ven if plaintiff’s awareness of his injury and its cause … could only be characterized as a mere “hunch” or “suspicion,” plaintiff would still have been under a duty to diligently investigate his claim.” And this burden-shifting doesn’t contradict the DMCA’s “no monitoring” provision, which only states that safe harbor protection doesn’t require “affirmatively seeking facts indicating infringing activity” (emphasis added) — this duty to investigate would only arise after those facts were known by the service provider.

Willful Blindness

The Second Circuit held that knowledge under the storage safe harbor includes “willful blindness.” Under the common law, consciously avoiding the confirmation of a fact that one is aware is highly probable is a type of knowledge. 7Global-Tech Appliances v. SEB, 131 S.Ct. 2060, 68-69 (2011). As the court notes, this doctrine is well-established in copyright law in general, but this is the first time the Second Circuit has faced the issue of whether willful blindness is applicable to the DMCA.

It is, though the court limits its application because safe harbor protection in the DMCA cannot be conditioned on affirmative monitoring by a service provider. So on remand, the District Court will need to determine whether YouTube “made a deliberate effort to avoid guilty knowledge”, in addition to the factual questions of whether YouTube has actual or apparent knowledge of infringing clips on its site.

Right and Ability to Control

Second, a service provider is only immune from liability when it “does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” The Court rejected Viacom’s argument that YouTube doesn’t meet this requirement, stating that this “control” provision, like the knowledge provision above, requires “item-specific” knowledge of any infringing activity because “the provider must know of the particular case before he can control it.”

The Circuit reversed the District Court on its interpretation that the “control” provision of the DMCA requires item-specific knowledge — suggesting only vaguely that this question must be determined on a case-by-case basis — and remanded for further fact-finding on YouTube’s right and ability to control and financial benefit. 8This presents one of the places the Second Circuit diverges from the Ninth Circuit’s holding in the highly similar UMG Recordings v. Shelter Capital Partners. There the court held that the right and ability to control does require “control over specific infringing activity the provider knows about.”

But here’s where the court makes what could become a very important statement about the DMCA in the future, and one that hasn’t gotten a lot of attention in much of the initial analyses of the case I’ve read so far. While explaining what sorts of things could lead to a finding that a service provider has a right and ability to control that negates safe harbor protection, the Second Circuit said that inducement of copyright liability might rise to the level of control the DMCA speaks of.

Since the Supreme Court articulated the inducement theory of copyright liability in MGM v. Grokster, many have wondered whether the DMCA safe harbor shields service providers who induce users to infringe on copyright. Some cases have held that the DMCA safe harbors and inducement liability are “inherently contradictory”. In UMG, the Ninth Circuit, without any discussion about the interplay between the two, held the defendant protected by the DMCA against all liability, including a claim of inducement. Similarly, the District Court here granted summary judgment in favor of YouTube for inducement without any explanation.

As far as I know, this marks the first time a Circuit Court has incorporated inducement of copyright as a bar to DMCA safe harbor protection. Its placement in the “control” prong seems to make logical sense, too.

The Scope of ‘By Reason of Storage’

Finally, and this is more of a definitional requirement, immunity only extends to “infringement of copyright by reason of the storage at the direction of a user.” Viacom had argued that several of YouTube’s activities concerning uploaded videos do not fall within the scope of this definition, but again, the District Court rejected this argument.

While the Circuit affirmed that YouTube’s replication, playback, and related video functions were protected by the user storage safe harbor, it recognized that YouTube’s syndication of videos to third parties might fall outside the scope of the safe harbor but hesitated to make a definitive ruling on the point since the record didn’t reveal whether any of the clips involved in the lawsuit had actually been syndicated.

About a year ago, I wrote on this point, noting that chances were slim that Viacom would succeed on this argument, so it is somewhat notable that the Second Circuit recognized at least the existence of an outer boundary to what service providers can do with material uploaded by users while remaining protected by the DMCA safe harbor. It’s still concerning that the Circuit so easily found the other YouTube functions remained within the scope of the safe harbor, in large part because their functionality is “fully automated” — you can program just about anything to be “fully automated.” This interpretation seems to give service providers a “heads I win, tails you lose” position over content creators: one can make a fully-fledged content platform that relies on user-uploaded content that places no liability for copyright infringement since the only responsibility a provider has is to respond to individual takedown notices (pulling in enormous ad revenues), and then seek mercy because it’s too difficult to effectively address infringement due to the sheer amount of data being uploaded.

What’s Next?

For the parties involved, the Second Circuit’s decision is a mixed result on the law. YouTube won on some of its arguments, Viacom and the putative class plaintiffs one on some of theirs. But if the case continues back at the lower court, YouTube will likely ultimately be the loser.

The cardinal sin of Judge Stanton’s original decision wasn’t that he interpreted the DMCA so much in favor of YouTube, but that even under such a narrow interpretation, there was evidence that YouTube could be held liable.

It’s premature to say whether this case could be appealed to the Supreme Court, though that’s always a possibility — and the timing of this decision with the Ninth Circuit’s UMG decision on many of the same points can only add to the speculation.

On a broader note, as attorney Jacqueline Charlesworth points out in a relevant article, “A basic tenet of our law is that one should not encourage others to break it.”

In the adolescence of the Internet, we are seeing complex business models that may combine Grokster-like purpose with other, ostensibly benign functionalities. Services seeking to capitalize on the draw of infringing goods may exhibit superficial respect for copyright concerns—by implementing a takedown program, for instance—yet rest secure in the knowledge that their users will continue to supply the content on which they depend in limitless quantities.

… Courts must resist the invitation to oversimplify reality by arbitrarily dividing the Internet world into “true pirates” and everyone else. Not every pirate is holed up in a garage, has a name ending in “-ster” or spells “wares” with a “z.” Some dress in expensive clothing and have MBAs. Courts need to sort through the facts without prejudging them, and beware pirates in disguise.

There is plenty of evidence that the DMCA has faltered in its 14 year tenure at discouraging bad behavior — witness Megaupload and Grooveshark as recent examples. It remains to be seen whether the Second Circuit’s decision will alleviate building business models around infringement that are shielded by the DMCA safe harbors — which benefit only the service providers— or reach the balance originally intended by the DMCA — benefitting innovative tech companies, content creators, and the general public.

 

References

References
↑1 The motion for class action certification was subsequently dismissed as moot.
↑2 17 USC § 512(c).
↑3 See Perfect 10 v. CCBill, “Because CWIE and CCBill provided services to ‘illegal.net’ and ‘stolencelebritypics.com,’ Perfect 10 argues that they must have been aware of apparent infringing activity. We disagree.”
↑4 Greg Jansen, Whose Burden is it Anyway? Addressing the Needs of Content Owners in DMCA Safe Harbors, 62 Federal Communications Law Journal 153, 163 (2010), “To date, no OSP has failed the stringent red-flag test”.
↑5 I’ll note that Congress wasn’t thinking in these terms. In fact, the House Commerce Committe Report on the DMCA said, “The ‘red flag’ test has both a subjective and an objective element. In determining whether the service provider was aware of a ‘red flag,’ the subjective awareness of the service provider of the facts or circumstances in question must be determined. However, in deciding whether those facts or circumstances constitute a ‘red flag’—in other words, whether infringing activity would have been apparent to a reasonable person operating under the same or similar circumstances— an objective standard should be used.”
↑6 For example, in federal securities law: Dodds v. Cigna Securities, “when the circumstances would suggest to an investor of ordinary intelligence the probability that she has been defrauded, a duty of inquiry arises, and knowledge will be imputed to the investor who does not make such an inquiry”; fraud: Higgins v. Crouse, “[W]here the circumstances are such as to suggest to a person of ordinary intelligence the probability that he has been defrauded, a duty of inquiry arises, and if he omits that inquiry when it would have developed the truth, and shuts his eyes to the facts which call for investigation, knowledge of the fraud will be imputed to him”; apparent agency: Whitney v. Citibank, “[A]bsent awareness of facts indicating that a partner is acting beyond his real or apparent authority, a third party is not obligated to investigate the matter further or search for some limitation on that partner’s authority”; statute of limitations: Kronisch v. US, “[E]ven if plaintiff’s awareness of his injury and its cause … could only be characterized as a mere “hunch” or “suspicion,” plaintiff would still have been under a duty to diligently investigate his claim.”
↑7 Global-Tech Appliances v. SEB, 131 S.Ct. 2060, 68-69 (2011).
↑8 This presents one of the places the Second Circuit diverges from the Ninth Circuit’s holding in the highly similar UMG Recordings v. Shelter Capital Partners. There the court held that the right and ability to control does require “control over specific infringing activity the provider knows about.”

Friday’s Endnotes – 04/06/12

By , April 06, 2012.

While laws that protect intellectual property remain strong and enforcement efforts continue, technology has tipped the balance away from the interests of most creators and artists. The ease of distribution of copyrighted content has helped create a generation of people who believe that all content should be free. The notion that artists and creators, and even the big companies that finance, produce and deliver their  creations, don’t have the right to own and control their distribution, simply cannot be.

—Jill Lesser, newly appointed Executive Director of the Center for Copyright Information.

Second Circuit Reverses YouTube Decision: DMCA Safe Harbor Might Not Apply — The Second Circuit reached a decision in what will likely become one of the seminal DMCA cases from now on. I’ll have some thoughts on the decision next week.

Robert Levine and Brett Danaher at CMW — A great couple of videos from Canadian Music Week. Free Ride author Rob Levine speaks on the issues he addresses in his book, while economics professor Brett Danaher presents in layman’s terms his recent report that showed an increase in iTunes sales in France after HADOPI was introduced.

Center for Copyright Information Announces Three Major Steps Towards Implementation — The organization in charge of administering the voluntary agreement between ISPs and major content companies to address piracy announced this week it has named its executive director and advisory board, as well as retaining the American Arbitration Association to manage and train the program’s neutral reviewers. The advisory board includes members of the CDT and Public Knowledge — but not the EFF, and they are not amused.

Behind the music: Estonia makes its mark on the musical map — Helienne Lindvall reports on last week’s Tallinn Music Week in Estonia. The three day festival combined raucous rock and roll with reminders of the country’s past as part of the Soviet Union and an eye toward a society that respects and remunerates creators. Lindvall quotes Estonian minister of culture Rain Lang as asking, “Why is it telecoms feel human value can be questioned, but technology can’t?”

Frequently Asked Questions Relating to Copyright (FAQ) — The Copyright Alliance has assembled a helpful guide for artists and creators to learn more about copyright and licensing.

Forget Hollywood — U.S. startups are in dire need of copyright protection — An interesting perspective from Wei Lien Dang at Venture Beat, though artists and creators should find the points raised familiar, such as “Consumer choice should be about actually having to decide between two different options, not two of the same exact thing” and “Clones have the luxury of only having to focus on scaling quickly; innovators have to worry about both product development and scaling their business, making it more difficult for them to enter new markets as quickly as clones.”

Disruptions: Top 10 Lists Lead to Less Choice on the Web — We were told the internet would democratize media and lengthen the long tail. Nick Bilton at the NY Times argues that the opposite could be happening. “Not only are we in a popularity contest. We are in a popularity contest in a hall of mirrors.”

What is Technology?

By , April 04, 2012.

Discussions about copyright sometimes set up a dichotomy between technology and creativity. But is the gap between the two really so great?

Historian Maury Klein notes that the introduction of the word “technology” in its modern sense comes as early as 1829, when Jacob Bigelaw published his book Elements of Technology. Bigelaw defined the term as “the application of the sciences to the useful arts.”

In 1855, George Wilson, Regius Professor of Technology at the University of Edinburgh and first Director of the Industrial Museum of Scotland, gave an inaugural lecture at the University of Edinburgh for its new technology chair. Below is an excerpt from his lecture, What is Technology?

What’s interesting is how he sets up the distinction between technology and the creative arts as a matter of definition. The two fields otherwise have very many similarities and share many of the same purposes. The distinction, thus, is more a matter of semantics than anything else.

Thus far, the meaning of the word Technology is not far to seek, but it must be taken with two important qualifications, to which I now request our attention. The one of these is, that Technology includes only Utilitarian Arts: the other, that it includes only certain of these.

It is by a quite conventional limitation, that the word art, τέχνης, (technes), denoted by the first dissyllable of Technology, is held to signify Useful, Utilitarian, Economic, or Industrial Art, for the Useless Arts, such as Legerdemain, or the Art of Conjuring, are eminently technical, and still more so are the worse than Useless Arts, such as cheating at cards, and other sorts of dishonest gambling.

Nor is the limitation less conventional which excludes the Fine Arts from the domain of Technology; for no Arts call for more skilful workmen than Painting, Sculpture, and Music, and none are more technical in their modes of procedure. Far less are the Fine Arts excluded, because they are regarded as useless or hurtful. The Technologist avoids them for exactly the opposite reason. Poetry, Painting, Sculpture, Music, and the Sister Arts, are in the highest degree useful, inasmuch as they minister to the wants of the noblest parts of our nature; but in so ministering they excite such emotions of pleasure, or its inseparable correlative, pain, that the sense of their usefulness is lost in the delight, or awe, or anguish, which they occasion. So much is this the case, that while men thank each other for the gift of bread when they are hungry, or of water when they are thirsty, or of a light to guide them in the dark, they return no thanks for a sweet song, or a great picture, or a noble statue; not that they are unthankful for these, but that the duty of thanksgiving is forgotten in the pleasure of enjoying, or the strangely fascinating pain of trembling before a work of creative genius.

And the artist himself, singularly enough, in a multitude of cases, makes no complaint at this thanklessness, and counts it no compliment to his work to call it useful. The end of Æsthetic or Fine Art, he will tell you, is the realisation of beauty, not utility; as if the latter were rather an accidental or unavoidable and unfortunate accompaniment of the former, than the welcome inseparable shadow which attends it, as the morning and evening twilight, tempering his brightness, go before and after the sun. But such a description of the aim of his labours, though natural to the Artist, is unjust to his Art. The true object of Æsthetic or Fine Art is not Beauty, but Utility, through or by means of Beauty.

It may be that the Poet, the Painter, the Sculptor, the Musician, often think only of the emotional delight which their works will awaken in the hearts of their brethren. But these works, in the very act of delighting, serve those whom they delight. It is surely as useful a thing, on occasion, to fill the eager ear with music, or the longing eye with the glories of form and colour, or the aching heart with thoughts of joy, as it is to fill the hungry stomach with food, or to clothe the naked body.

Guest Post: Yes, Google, You Have To Delist Rogue Sites

By , April 02, 2012.

Today’s guest post comes from Devlin Hartline, a J.D. candidate at Loyola University New Orleans College of Law with an expected graduation date of May, 2012. His primary interests are in copyright, internet, and constitutional law. He lives with his wife and two young sons in Metairie, Louisiana. You can follow him on Twitter: @devlinhartline.

Introduction

Apparently, Google thinks it should be above the law. It hasn’t explicitly said so, of course, but that’s my takeaway from its protest of the Stop Online Piracy Act (SOPA) and the PROTECT IP Act this past January. Specifically, Google thinks that it should be allowed to list rogue sites in its search results without any court having the power to order it to stop. Google’s position strikes me as self-contradictory. On the one hand it says that Congress is “trying to do the right thing by going after pirates and counterfeiters.” On the other hand it says that search engines shouldn’t “be forced to delete entire websites from their search results.” What Google glosses over is the fact that search engines like itself are part of the problem—search engines drive traffic to rogue sites by listing them in their search results. This is why courts already order search engines to delist rogue sites.

The day before the protests, Google provided a written statement to the Huffington Post announcing that it’d be joining the grumblers: “we oppose these bills because there are smart, targeted ways to shut down foreign rogue websites without asking American companies to censor the Internet.” Sure enough, the next day Google blacked-out the logo on its home page. When users clicked on the self-censored insignia, they were taken to an information page, “End Piracy, Not Liberty.” From there, a tab led to another page, “More about SOPA and PIPA,” where Google sketched out the reasons behind its opposition. Google’s three main gripes with the bills can be boiled down thusly: (1) it’s censorship, (2) it’ll hurt innovation, and (3) it’s futile. Noticeably absent from this explanation is any acknowledgement that search engines meaningfully contribute to online infringement.

I can’t help but feel cynical. The same Google that unilaterally delisted over 11 million websites from its search results because they were too “spammy and low-quality” thinks it’s wrong that a court should order it to delist even one single site that has been determined to be dedicated to infringement. The same Google that forfeited $500 million to the United States government after it got caught assisting foreign pharmacies in importing illegal drugs thinks it’s OK to assist foreign rogue sites in the commission of online piracy. If Google really thinks that preventing piracy is such a good thing, then why does it want to help rogue sites out by linking to them? As with many things, I think the answer is money—it costs real money to comply with a court order to delist a rogue site. The question is whether any of this should actually be Google’s problem. I think that clearly the answer is, “yes.”

“I Come From Cyberspace”

In his iconic “A Declaration of the Independence of Cyberspace,” Grateful Dead lyricist, EFF cofounder, and cyberlibertarian John Perry Barlow threw down the gauntlet on behalf of cyberspace:

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather. . . . I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you possess any methods of enforcement we have true reason to fear. . . . Cyberspace does not lie within your borders. . . . Ours is a world that is both everywhere and nowhere, but it is not where bodies live.

Barlow’s quaint and utopian, if not anarchic, vision of cyberspace as existing somewhere untouchable by the “Governments of the Industrial World” never was. Nor would it ever come to be. In fact, in an ironic twist of fate, the “would-be Cyber-Jefferson” Barlow delivered his Declaration on the same day that President Clinton signed the internet-regulating Communications Decency Act into law. 1Alex Kozinski & Josh Goldfoot, A Declaration of the Dependence of Cyberspace, 32 Colum. J.L. & Arts 365 (2009). While cyberspace as a metaphorical place does not lie within any actual borders (and what metaphor ever does?), the same cannot be said for the people that make cyberspace possible—the so-called intermediaries. According to Black’s Law Dictionary (9th ed. 2009), an “intermediary” is “a mediator or go-between; a third-party negotiator.” An intermediary, then, is just a middleman. Cyberspace may be “everywhere and nowhere,” but the intermediaries all dwell in this world of “flesh and steel,” anything but “independent of the tyrannies.”

For netizens, cyberspace’s intermediaries take on familiar forms such as internet service providers, payment processors, content hosts, search engines, and advertising networks. Use of intermediaries in mass communications is nothing new; yesterday’s switchboard is today’s network switch. Without intermediaries, mass communication platforms such as the internet wouldn’t exist. The internet, after all, is just a global network of interconnected intermediaries who host, transport, and organize our data. And given their “essential role in facilitating online communication, intermediaries often are capable of exercising authority over wrongdoers who are otherwise unreachable” for a variety of reasons. 2David S. Ardia, Free Speech Savior or Shield for Scoundrels: An Empirical Study of Intermediary Immunity Under Section 230 of the Communications Decency Act, 43 Loy. L.A. L. Rev. 373, 378-79 (2010). Instead of circumventing the middlemen, the digital revolution has simply replaced one set of intermediaries with another. The internet’s decentralized structure has, by design, engendered the proliferation of a new set of intermediaries.

There’s no doubt that intermediaries like Google make infringement on the internet possible, for without the intermediaries there’d be no internet to infringe on in the first place. The difficult question then is which intermediaries, if any, should be held responsible for the infringement they help make possible. Should a search engine like Google be liable for infringement that takes place on the rogue sites it links to in its search results?

Common Law Secondary Liability

Copyright infringement is a tort, or a civil wrong. The Copyright Act, in § 106, provides that “the owner of copyright . . . has the exclusive rights to do and to authorize” certain enumerated acts, including making copies, preparing derivative works, and distributing copies. § 501(a) of the Act provides that “[a]nyone who violates any of the exclusive rights of the copyright owner . . . is an infringer of the copyright.” Thus, only the copyright owner has the right, say, to make copies or to authorize the making of copies, and anyone else who does so is liable for infringement.

Direct copyright infringement occurs when someone, called the primary or direct infringer, is held liable for their own infringing acts. If I unlawfully make copies of your copyrighted work, I’m a primary infringer. Indirect copyright infringement, on the other hand, occurs when someone else, called the secondary or indirect infringer, is held liable as well. If someone else unlawfully authorizes me to make copies of your copyrighted work and I do so, I’m a primary infringer and the party that gave me authorization is a secondary infringer. Even though that other party didn’t personally make the copy (only I did), the law holds them responsible because they played a significant part in my unlawful copying.

The idea of placing liability on someone other than the primary infringer is what’s referred to as secondary liability in copyright law. It’s called other things too, like intermediary liability, indirect liability, third-party liability, or derivative liability. Whatever it’s called, the basic notion is the same: If someone else helps me to infringe, by, say, inciting or facilitating my infringement, then that someone else will be liable for my infringement since they helped to bring it about. The idea of holding responsible those who help others commit unlawful acts is not unique to copyright law. Perhaps more familiar are the similar concepts of accomplice or accessory liabilities in criminal law. If I help you plan a robbery or act as your lookout while you rob a bank, I’m liable because I helped you commit your crime. By making it unlawful to help others commit unlawful acts, we deter people from doing so.

The Copyright Act itself does not expressly provide for secondary liability for infringement. Nonetheless, the Supreme Court has noted that the “absence of such express language in the copyright statute does not preclude the imposition of liability for copyright infringements on certain parties who have not themselves engaged in the infringing activity.” 3Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 434 (1984). Indeed, secondary liability concepts in copyright law have been developed over time through judge-made, common law. “Courts have long recognized . . . that one may be held liable for the infringing acts of another.” 4Demetriades v. Kaufmann, 690 F.Supp. 289, 292 (S.D.N.Y. 1988). Two distinct branches of secondary liability have been developed: “vicarious liability (grounded in the tort concept of respondeat superior) and contributory infringement (founded on the tort concept of enterprise liability).” 5Id. (internal quotation marks omitted).

While it’s true that the Copyright Act doesn’t explicitly refer to secondary liability in so many words, § 106’s grant of the exclusive right “to authorize” in fact indicates Congress’s endorsement of court-developed contributory liability principles. The relevant House Report explains: “Use of the phrase ‘to authorize’ is intended to avoid any questions as to the liability of contributory infringers.” 6H.R. Rep. No. 94-1478 at 61; the House Report also endorses common law vicarious infringement, id. at 159-60 (“a person who violates any of the exclusive rights of the copyright owner is an infringer, including persons who can be considered related or vicarious infringers. . . . The committee has decided that no justification exists for changing the existing law . . . .”). This comes as no surprise, since, as the Supreme Court noted over a century ago, contributory liability is a principle “recognized in every part of the law.” 7Kalem Co. v. Harper Bros., 222 U.S. 55, 63 (1911). The Second Circuit’s formulation of contributory liability is oft-quoted: “one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.” 8Gershwin Pub. Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971). Thus, liability for contributory infringement turns on two elements: (1) knowledge, and (2) inducement, causation, or material contribution. So where does Google’s search engine fall within this rubric?

Google’s Secondary Liability

Conveniently enough, the Ninth Circuit addressed this very point at length in Perfect 10 v. Amazon.com. 9Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007). There, plaintiff Perfect 10 argued that defendant Google was secondarily liable for infringement occurring on third-party websites because Google provided links to these sites in its search results. The circuit court started its analysis by noting that contributory liability is examined in light of the “rules of fault-based liability derived from the common law,” a principle of which is that intent may be imputed: “Tort law ordinarily imputes to an actor the intention to cause the natural and probable consequences of his conduct.” 10Id. at 1171 (internal quotations and citations omitted). Thus, since its intent to encourage direct infringement may be imputed, an actor (like Google) may be liable for contributory infringement if it knowingly takes actions (like linking) that are substantially certain to result in direct infringement by others.

The court of appeals then looked to two cases, Napster 11A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). and Netcom, 12Religious Tech. Ctr. v. Netcom On-Line Commc’n Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995). for the application of these principles in cyberspace. In Napster, the Ninth Circuit stated that “if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement.” 13Perfect 10, 508 F.3d at 1171 (internal quotations omitted). Similarly, the district court in Netcom held that if an internet service provider knows or has reason to know that material on its system is infringing and fails to remove it, then it is liable for contributory infringement since its failure constitutes substantial participation in the resulting infringement. 14Id. at 1171-72. Both cases stand for the proposition that a “service provider’s knowing failure to prevent infringing actions” can be the “basis for imposing contributory liability” since intent to cause the natural result of its conduct may be imputed. 15Id. at 1172.

The Ninth Circuit noted that a central theme of Napster and Netcom is the fact that online services have the ability to drastically amplify the effects of infringing activities. As the Supreme Court noted in Grokster, 16Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005). when a service enables individuals to commit infringement on a large scale, the argument for imposing indirect liability on that service is particularly powerful. The court of appeals observed that when a service is used widely to infringe, it is simply not possible for a copyright owner to enforce its rights against all of the direct infringers. Sometimes “the only practical alternative” is “to go against the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringement.” 17Perfect 10, 508 F.3d at 1172. Accordingly, the circuit court held that “a computer system operator can be held contributorily liable if it has actual knowledge that specific infringing material is available using its system and can take simple measures to prevent further damage to copyrighted works yet continues to provide access to infringing works.” 18Id. (internal quotations and citations omitted).

The Ninth Circuit then turned its sights on Google: “There is no dispute that Google substantially assists websites to distribute their infringing copies to a worldwide market and assists a worldwide audience of users to access infringing materials.” 19Id. Thus, the court of appeals held that Google could be liable as a contributory infringer if it: (1) knew that infringing materials were available using its search engine, (2) could take simple measures to remove the links, and (3) failed to do so.

The Ninth Circuit’s opinion comports with the DMCA safe harbor provisions. Under § 512(d) of the Copyright Act, a search engine such as Google is significantly shielded from liability for infringement that occurs via links it provides so long as the links are quickly removed or disabled when the search engine becomes aware that they lead to infringing material or activity. Thus, the DMCA seeks to encourage the delisting of rogue sites from search results by giving search engines safe harbor if they remove links when presented with proper takedown notices (which are deemed as a matter of law to impart knowledge of infringement). This embodies Congress’s judgment that it’s generally a bad thing for search engines to provide links to rogue sites. According to both Congress and the courts, search engines that knowingly link to rogue sites are opening themselves up to secondary liability for the infringement they help bring about. And given that “Google is ranked #1 in the world” according to Alexa’s traffic rankings, its contribution to the problem of online infringement is all the more impossible to deny.

Censorship, Innovation, And Futility

When the argument is properly framed as whether Google should be allowed to substantially assist worldwide infringement via its search engine, its counterarguments about censorship, innovation, and futility fall apart. Google complains that “search engines could be forced to delete entire websites from their search results.” There’s no doubt that under some broad definition of the word, a court ordering Google to delist a rogue site is censorship. But so what? All law enforcement efforts are censorship on some level. The whole point is to censor—that is, to stop—the party that’s unjustifiably causing harm. Google can be forced to “delete entire websites” from its search results because those links are significantly contributing to whatever infringing material or activity they point to. What’s being censored is Google’s excessive role in the problem of online piracy. If Google really thinks that pursuing piracy is a lofty goal, you’d think it’d want to remove its own links to these rogue sites.

Google’s complaint about innovation is equally vapid. It starts with the curious assertion that “internet companies would have to monitor everything users link to or upload or face the risk of time-consuming litigation.” This is simply not so. It is fundamental to secondary liability doctrine that intermediaries “do not take on an affirmative duty to act or to prevent tortious or illegal conduct, but only a duty not to facilitate known wrongdoing.” 20David S. Ardia, Free Speech Savior or Shield for Scoundrels: An Empirical Study of Intermediary Immunity Under Section 230 of the Communications Decency Act, 43 Loy. L.A. L. Rev. 373, 505 (2010). Google has no duty to monitor the links it provides in its search results, and nothing in the Stop Online Piracy Act or the PROTECT IP Act would establish such a duty—in fact both bills explicitly say there’s no affirmative duty to monitor. Google also points to letters from internet companies, venture capitalists, and entrepreneurs making vague arguments about how the bills would stifle innovation generally. But innovators like Google are not exempt from the law, and it’s hard to see how complying with court orders is unduly burdensome for a company like Google that already has such mechanisms in place. Google’s service creates a harm to innocent third parties that is significant enough to warrant holding it responsible for that harm. It’s disingenuous for Google to complain about the cost of eliminating a harm that Google itself is creating.

Google’s final argument is that “SOPA and PIPA won’t even work” since rogue sites will just relocate. Instead, it argues that “Congress should consider alternatives like the OPEN Act” that take a follow-the-money approach. This argument is clearly self-serving. All of the bills (SOPA, PROTECT IP Act, and OPEN Act) target the money supplies of rogue sites. If targeting the money supply is by itself effective, then why does adding the requirement that search engines also delist rogue sites suddenly make the whole thing not work? That makes no sense. Google’s support of the OPEN Act is better explained by the fact that the Act contains no provisions dictating that search engines must delist rogue sites. In other words, the OPEN Act doesn’t make Google responsible for the harm that it chooses to create (and, I assume, to profit from). How very convenient. Google’s complaint here is not about the futility of the bills—it’s about Google’s bottom line. And that’s what all of this hoopla has been about all along, if you ask me.

Follow me on Twitter: @devlinhartline

References

References
↑1 Alex Kozinski & Josh Goldfoot, A Declaration of the Dependence of Cyberspace, 32 Colum. J.L. & Arts 365 (2009).
↑2 David S. Ardia, Free Speech Savior or Shield for Scoundrels: An Empirical Study of Intermediary Immunity Under Section 230 of the Communications Decency Act, 43 Loy. L.A. L. Rev. 373, 378-79 (2010).
↑3 Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 434 (1984).
↑4 Demetriades v. Kaufmann, 690 F.Supp. 289, 292 (S.D.N.Y. 1988).
↑5 Id. (internal quotation marks omitted).
↑6 H.R. Rep. No. 94-1478 at 61; the House Report also endorses common law vicarious infringement, id. at 159-60 (“a person who violates any of the exclusive rights of the copyright owner is an infringer, including persons who can be considered related or vicarious infringers. . . . The committee has decided that no justification exists for changing the existing law . . . .”).
↑7 Kalem Co. v. Harper Bros., 222 U.S. 55, 63 (1911).
↑8 Gershwin Pub. Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971).
↑9 Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).
↑10 Id. at 1171 (internal quotations and citations omitted).
↑11 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001).
↑12 Religious Tech. Ctr. v. Netcom On-Line Commc’n Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995).
↑13 Perfect 10, 508 F.3d at 1171 (internal quotations omitted).
↑14 Id. at 1171-72.
↑15 Id. at 1172.
↑16 Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005).
↑17 Perfect 10, 508 F.3d at 1172.
↑18 Id. (internal quotations and citations omitted).
↑19 Id.
↑20 David S. Ardia, Free Speech Savior or Shield for Scoundrels: An Empirical Study of Intermediary Immunity Under Section 230 of the Communications Decency Act, 43 Loy. L.A. L. Rev. 373, 505 (2010).

Friday’s Endnotes – 03/30/12

By , March 30, 2012.

OnCopyright2012: Advancing the Creative Economy — I’ll be in NYC today at the Kernochan Center for Law, Media, and the Arts for its bi-annual event, OnCopyright2012. According to the site, “the event will explore the various ways copyright issues are impacting publishing, creative services, legal and technology”, and it features an impressive list of participants. Check out the site for live streaming of the event, and, if you’re on Twitter, follow the event with #oncopyright.

Lets play a word game — Dominic Young looks at the parallels between copyright and privacy. “Those who create and share should be able to expect a reward just as those who seek to protect their privacy expect to be able to prevent it being invaded.”

Persons of Pinterest — Last week’s episode of This Week in Law has a good discussion on the copyright and other legal issues surrounding social media darling Pinterest. Guests include Carolyn Wright and Connie Mableson.

Copyright Alert System Revisited — Though the voluntary agreement between ISPs and major content companies to address online infringement was announced last July, it was only in the past couple of weeks that plans to implement the system were announced — sparking a fresh round of “SOPA” cries. But even the Future of Music Coalition reiterates: “ this is not a dangerous or draconian policy.”

Amazon Recommends $17 Book Of Wikipedia Articles To ‘Hunger Games’ Fans — “The largest library in disorder is not so useful as a smaller but orderly one.” 1Arthur Schopenhauer, Thinking for Oneself.

Mythbusters: ACTA — The Anti-Counterfeiting Trade Agreement, signed by the US last October, has been in the news lately. The Copyright Alliance’s Sandra Aistars dispels some of the misinformation that has been floating around stories about ACTA.

Osborne+ and Schmidt+ say ‘the internet’ = 8.3 per cent of UK GDP — Dubious statistics. Close alignment between companies and politicians. Just another day for Google.

Canard du Jour: Reselling the remix — “On the one hand The Man 2.0 wants to say that the “sharing economy” is a noncommercial use of any copyrights that happen to find their way into the ‘sharing economy’ …  On the other hand, The Man 2.0 wants to extract commercial rents from those user created works … The user gets nothing, an underlying copyright creator gets nothing, and the ‘commercial entity’ gets all the commercial value it can extract.”

Program Your 808 — Just for fun: “A series of informative posters detailing how some of the most notable drum sequences were programmed using the Roland TR-808 Drum Machine.” Geeky and gorgeous. (via Create Digital Music)

References

References
↑1 Arthur Schopenhauer, Thinking for Oneself.

Friday’s Endnotes – 03/23/12

By , March 23, 2012.

Canard du jour:  Do residuals make you lazy? If the age of privacy is over, is the age of royalties over, too? — From time to time, you see a statement made that creators get paid repeatedly for work done once. Chris Castle takes on this silly canard. “Royalties, and especially residuals, are one of the breakthrough egalitarian concepts.  I will create a song for your movie and you can pay me a bit now, but I will retain my right to receive income in the future on exploitations of my works.”

Online publishers need an edge — Concurrent Media takes note of a “key nugget” from this week’s 2012 State of the News Media report from the Pew Center. The Big 5 tech companies — Google, Yahoo, Facebook, Microsoft, and AOL — capture 68% of online ad revenues. As Concurrent Media points out, this highlights the big shift away from a market where the incentive is on producing content to one where the incentive is on tracking and monetizing user behavior.

“Copyright Math” is a Joke — Ken Sanney looks at the recent TED talk by Rob Reid making the rounds about two statistics and the maximum amount of statutory damages available to copyright holders under US law. As Sanney puts it, “ It in no way lives up to the TED Talk’s mantra of presenting ‘ideas worth spreading.'”

A Reply to William Patry — At Barry Sookman’s blog, Dan Glover continues an online discussion with Patry concerning fair use that sprung from an earlier blog post. Interesting and enlightening.

This is why Google is losing the future — Says Bobbie Johnson at GigaOM, “First, the search giant offers a little traffic boost to sites that organize data in certain useful ways. Then it turns the game on its head and — without any notice — starts using that structured data to inform its own services. Finally, with a disturbing inevitability, it launches its own competing product that steps in and replace yours.”

The Case for Ultraviolet— “[E]very industry recognizes its own inherent need to evolve or perish. Leaders and innovators in the content industry firmly and publicly acknowledge the imperative to evolve the current content model to meet the needs and desires of today and tomorrow’s, increasingly sophisticated consumers. What we are witnessing is an established industry with a lucrative, legacy business model adapting to disruption via process evolution. Not every step on the way will be perfectly placed, but this is about creating a long-term, successful partnership.”

OnCopyright 2012 — Next Friday, March 30, the Copyright Clearance Center is holding its OnCopyright conference at Columbia Law School in NYC. Check the link for registration details or to watch a live stream of the event. Full list of participants here.

Is the Copyright Royalty Board Unconstitutional?

By , March 19, 2012.

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. 1See 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). 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. 2See Volokh; Andrew Croner, Morrison, Edmond, and the Power of Appointments, 77 George Washington Law Review 1002, 1005 (2009). 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.” 3Buckley v. Valeo, 424 US 1, 126 (1976). Appointees not exercising such authority could be considered mere employees — the Constitution is agnostic on their appointment. 4See United States v. Germaine, 99 US 508, 509 (1879).

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. 5See 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.” 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). 6See Free Enterprise Fund v. PCAOB, 561 US ___, *V (2010).

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. 7Buckley v. Valeo, 424 US 1, 127 (1976). 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, 8Said 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.” 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. 9Free Enterprise Fund v. PCAOB, 561 US ___ (2010). 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. 10I 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.” 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.” 1129 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. 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. 12Act of February 19, 1897, 54th Cong., 2d Sess., 29 Stat. 545.

Courts, including the Supreme Court, have implicitly endorsed the constitutional soundness of this arrangement by ruling on regulations promulgated by the Copyright Office 13See, 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). — 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. 14This 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). 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. 15Marybeth Peters, CARP.

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.

References

References
↑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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