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Wednesday, January 9, 2013

Cyberlaw Predictions: Copyright in Congress and the Courts

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This post is the twelfth in a series of predictions from legal and business experts about the directions cyberlaw policy might take in 2013, solicited by editors of BNA's Electronic Commerce & Law Report during the closing weeks of 2012. We asked that the remarks be brief -- something along the lines of a Twitter "tweet" or an elevator pitch. Over 100 attorneys, law professors, online business executives, policy advocates and other cyberlaw experts responded, producing 307 separate assessments, predictions, or just plain complaints regarding any of the many legal subject areas that affect online businesses.

The year just passed was a busy one in copyright policy and copyright litigation: the Viacom v. YouTube and FlavaWorks cases were decided, a big first-sale doctrine case, Kirtsaeng, was argued in the Supreme Court, the Copyright Office issued new DMCA anti-circumvention exemptions, Righthaven cratered (but not other mass copyright enforcement operations), the U.S. government continued to seize domain names allegedly contributing to copyright infringement, and tough statutory damages provisions in the Copyright Act are still standing after constitutional challenges in Tenenbaum and Thomas-Rasset.

All Rights Reserved Asterisk

Heading into 2013, copyright policy continues to be burdened by criticism that it is unreasonably impeding innovation and stifling free speech. Consumer rights to time-shift and space-shift copyrighted content remain uncertain. And ownership rights in the vast amount of content shared across social networks have yet to be sorted out. Many copyright attorneys are watching the Aereo and Dish Network Hopper lawsuits, which involve the lawfulness of unauthorized re-transmission of television programming (Aereo) and the unauthorized distribution of television programming with commercials removed (Dish).

The experts' views:

Copyright Policy

With Congress focused on economic issues, it may be up to stakeholders--with some guidance from the courts and international organizations--to lead the way in addressing new challenges to copyright and trademark enforcement on the internet. Eleanor Lackman, @EMLackman, Partner, Cowan DeBaets Abrahams & Sheppard LLP, New York, N.Y.

Traditional first sale rights are under assault on multiple fronts, as copyright owners do their best to use EULAs and the courts to challenge our right to make full use of the goods we "buy." You can re-sell, lend, or give away a paperback or a CD--but not, according to many in the content industries, an ebook or mp3. Americans need to decide if we want to be an nation of owners, with real rights, or a nation of renters, with only the limited options copyright owners choose to give us. Corynne McSherry, Intellectual Property Director, Electronic Frontier Foundation, San Francisco.

The important copyright developments will continue to be around access to, more than ownership of, content. Expect continued analysis of how much access service providers can permit their customers. Mark Owen, Partner, Harbottle & Lewis, London.

In the context of intellectual property, creativity, innovation, expression and ideas do not exist as some Platonic ideal. The Internet is one place where ideas, creativity, innovation and expression thrive. Konstantinos Komaitis, @kkomaitis, Policy Advisor, The Internet Society, Geneva.

Federal jurisdiction has existed in modern times for patent, copyright and trademark actions, but trade secrecy largely has been relegated to state courts, making practical enforcement issues such as nationwide service of process and misappropriation from the U.S. to another country challenging. There will be a strong push in 2013 for more general federal trade secret legislation. Stuart P. Meyer, Partner, Fenwick & West LLP, Mountain View, Calif.[*]  

Discussions on intellectual property have been hitherto trapped in the general tension between democratic governance and network governance. This is misleading and not helpful. Discussions should focus on finding ways to reconcile creativity, innovation, intellectual property and the Internet's open architecture. Konstantinos Komaitis, @kkomaitis, Policy Advisor, The Internet Society, Geneva.

2012 was the year that the end of the knee-jerk judicial deference to IP stakeholders' claims arising from internet activity could really be perceived. Ronald Coleman, @roncoleman, Partner, Goetz Fitzpatrick LLP, New York, N.Y.

Copyright law and policy is getting in the way of innovation and free expression. It's time for real copyright reform that benefits everyone, not just a few entrenched interests. Corynne McSherry, Intellectual Property Director, Electronic Frontier Foundation, San Francisco.

The Copyright Office's renewed and expanded DMCA exemptions for using short clips from DVD and online services recognize the need to modify the DMCA's restrictions, and preserve fair use, as technologies continue to change rapidly. Rebecca Tushnet, @rtushnet, Professor, Georgetown University Law Center, Washington, D.C.

The debate over property rights in digital goods promises to remain front and center in 2013. Questions surrounding the first-sale doctrine and what rights users retain in their digital goods property in the cloud will confront courts and Congress, along with the related question of what responsibility the government owes to innocent users when it continues the trend of shutting down websites and cutting off access to their data. Julie Samuels, @juliepsamuels, Staff Attorney, Electronic Frontier Foundation, San Francisco.

Copyright Litigation Past

Despite progress in the courts, meritless copyright "enforcement" campaigns will continue to plague citizens, commerce and judiciary unless Congress acts. Ronald Coleman, @roncoleman, Partner, Goetz Fitzpatrick LLP, New York, N.Y.

In 2012, the U.S. Immigration and Customs Enforcement (ICE), along with other U.S. government agencies, Interpol and a number of foreign enforcement bodies, launched Phase V of Operation Pangea. After just one week, the joint effort resulted in the confiscation of more than 3.75 million counterfeit pills and more than 18,000 websites; this was by far one of the largest seizures of domain names and other assets worldwide. It appears that in 2013 there will be increased efforts by ICE and its foreign counterparts to police the manufacture and distribution of all kinds of dangerous counterfeit products including pharmaceuticals, munitions, aircraft/auto parts and pesticides. James L. Bikoff, Partner, Silverberg, Goldman & Bikoff, LLP, Washington, D.C.

In FlavaWorks, Judge Posner of the Seventh Circuit took a different approach to linking from the Ninth Circuit in Perfect 10, finding inline links to infringing videos not sufficiently material to amount to contributory copyright infringement. Ian Ballon, @ianballon, IP & Internet Litigation Shareholder, Greenberg Traurig LLP, Silicon Valley & Los Angeles.

The assault on the constitutionality of substantial statutory damages in copyright litigation is thankfully over, at least for now, with decisions by the District Court in Sony v. Tenenbaum, and by the 8th Circuit in Capitol Records v. Thomas-Rasset affirming jury awards of $675,000 and $222,000, respectively Andrew Berger, @IpInBrief, Counsel, Tannenbaum Helpern Syracuse & Hirschtritt LLP, New York, N.Y.

Fave case of 2012: Southpark spoof of "What What (in the Butt)" video = fair use. Of course! Don't mess with Cartman. Brian G. Murphy, @frankfurtkurnit, Partner, Frankfurt Kurnit Klein & Selz PC, New York, N.Y.

2012 was the year in which tech law principles started to mould digital copyright CPentalogy #UsedSoft. Graham Smith, @cyberleagle, Partner, Bird & Bird LLP, London.

2012 saw important decisions in Viacom v. YouTube and Rosetta Stone v. Google, as well as in the FlavaWorks and cloud "locker" service cases, but the rulings leave the boundaries of primary and secondary liability on the Internet unclear. Eleanor Lackman, @EMLackman, Partner, Cowan DeBaets Abrahams & Sheppard LLP, New York, N.Y.

Second and Ninth Circuits weigh in on DMCA protection for UGC sites. Ian Ballon, @ianballon, IP & Internet Litigation Shareholder, Greenberg Traurig LLP, Silicon Valley & Los Angeles.

The EU court ruling in Oracle v. Usedsoft on the sale of used software licenses was past year's most significant IT law development. Oracle predicts that software companies will move to fixed term and volume-based licenses, limit maintenance to approved transferees and accelerate transition to SaaS model. Bradley L. Joslove, Partner, Franklin Societe D' Avocats, Paris.

Between the Georgia State ruling in May and the HathiTrust ruling in October, it was a banner year for library fair use. Watch for the appeals in 2013. James Grimmelmann, Professor of Law, New York Law School, New York, N.Y.

The March 2012 "Intellectual Property and the U.S. Economy: Industries in Focus" report by the U.S. Department of Commerce found some 40 million U.S. jobs tied to intellectual property intensive industries. 2013 will see the number of jobs tied to IP intensive industries increase not only in the United States, but in other countries as well. China will also push ahead in strengthening its understanding and protection of IP in its business and legal communities. Alan S. Wernick, Founder & Director, ITIP Institute, Chicago.

Major changes in the copyright law and the creation of a legal-oriented framework for the internet are hot topics for 2013 in Brazil. João Harres & Fábio Pereira, Associates, Veirano Advogados, Rio de Janeiro.

Canada modernizes its Copyright Act. The regime now prohibits TPM circumvention and targets enablers of online infringement; but permits consumer exceptions like format and time shifting and user-generated content. Rish Handa, Associate, McCarthy Tetrault LLP, Montreal.

Russia expects to introduce provisions on liability of ISPs for copyright and other IPRs violations in 2013. If this happens, Russia will have its own version of the DMCA safe harbor provisions and notice and take-down procedure. Igor Motsnyi, Partner, Motsnyi Legal Services, Moscow.

Copyright Litigation Future

The first sale doctrine provides that when an IP right-holder sells an item embodying its IP, his or her rights are exhausted for that item. How does the doctrine apply when transactions take place across borders (because IP rights tend to be country-specific) and when the item that is sold makes its own copies--like seed from crops. The Supreme Court is considering both of these more-challenging fact patterns this coming year. Stuart P. Meyer, Partner, Fenwick & West LLP, Mountain View, Calif.

In 2013, even more people will share even more content they don't own over social media platforms. Will courts brand them as infringers or recognize much (some?) of this as fair use? Stay tuned. Brian G. Murphy, @frankfurtkurnit, Partner, Frankfurt Kurnit Klein & Selz PC, New York, N.Y.

The ongoing battle between content owners and distribution services is playing out in two copyright cases now before the Second Circuit: Aereo and Dish Network Hopper. Aereo streams over-the-air local TV to subscribers over the Internet. The broadcast network plaintiffs claim Aereo is directly infringing their copyright rights by "transmitting" their programming to subscribers. Aereo claims these transmissions over the Internet are private performances made by their users and therefore not infringing. Dish's Network Hopper service permits subscribers to record the prime time programming of the four most popular broadcast networks with the push of a button. The networks claim Dish is violating their copyright rights by making copies of the programs without commercials. Dish claims its users are making fair-use copies. Decisions in both cases are expected in 2013. Jonathan D. Hart, Partner, Dow Lohnes PLLC, Washington, D.C.

Copyright is supposed to encourage innovation but new technologies, like Aereo's platform enabling consumers to view on their computers their own recorded copies of TV programming, instead encourage litigation. Andrew Berger, @IpInBrief, Counsel, Tannenbaum Helpern Syracuse & Hirschtritt LLP, New York, N.Y.

Copyright troll actions related to file-sharing continue to present challenges to courts, but a uniformity of rulings may begin to emerge in 2013. David E. Weslow, @davidweslow, Partner, Wiley Rein LLP, Washington, D.C.

Kirtsaeng loser at Supreme Court will race across street to Capitol. Will Congress decide role of copyright territoriality in Internet economy? Steve Metalitz, @mskllp, Partner, Mitchell Silberberg & Knupp LLP, Washington, D.C.

2013 will see decisions in the Aereo and DISH cases. Will the TV networks be able to preserve their current advertising and retransmission fee based income streams? David Bernstein, Partner, Debevoise & Plimpton LLP, New York, N.Y.

As new business models arise to target cord-cutting Millennials, expect to see more Aereo-type copyright lawsuits in the coming year. John F. Delaney, @MoFoSocMedia, Partner, and editor of SociallyAwareBlog, Morrison & Foerster LLP, New York, N.Y.

In 2013, two different federal courts of appeal will review whether the copyright contours of Aereo's internet television product and Dish Network's DVR Hopper. The outcomes of these cases is critical to the internet industry. A split between the circuits could result in the next big copyright case before the Supreme Court. Consistent opinions in favor of Dish and Aereo likely will result in the broadcasting industry lobbying Congress for changes to the Copyright Act. Markham Erickson, Partner, Holch & Erickson LLP, Washington, D.C.

The public performance right under the Copyright Act may not have received as much attention in the past 35 years as it is receiving now, due mainly to technological development. Dish Network's AutoHop, Diller's Aereo and other television services continue to challenge the scope of the public performance right in court, while Pandora and other music users are battling performing rights organizations for lower fees. Content owners and technology companies will be watching closely as courts decide whether a public performance is made via a type of new technology, and as copyright owners and users negotiate over the value to be placed on a public performance. Eleanor Lackman, @EMLackman, Partner, Cowan DeBaets Abrahams & Sheppard LLP, New York, N.Y.

2013 will see the courts becoming more deeply enmeshed in the interaction between copyright and fundamental rights such as freedom of expression. Graham Smith, @cyberleagle, Partner, Bird & Bird LLP, London.

Notes:

[*] Yes, I do know the difference between a copyright and a trade secret. Mr. Meyer was alone in mentioning the possibility of a federal trade secret protection bill in 2013. I had to put it somewhere.

(photo credit: no3rdw on flickr)

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