Restoration of Rights in Foreign Works Does Not Violate IP Clause, Free Speech Rights

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By Anandashankar Mazumdar  

A statute granting copyright protection to foreign works that were not granted protection under pre-Berne Convention law does not exceed the authority granted to Congress by the Progress Clause, nor does removal of such works from the public domain infringe First Amendment free speech rights, the Supreme Court ruled Jan. 18 in a 6-2 decision (Golan v. Holder, U.S., No. 10-545, 1/18/12).

Justice Ruth J. Bader Ginsburg, the author of the court's decision, relied extensively on her own opinion in Eldred v. Ashcroft, 535 U.S. 185, 65 USPQ2d 1225 (2003) (11 PTD, 01/16/03), which found constitutional a statute extending the term of copyright protection.

Justice Stephen G. Breyer, who dissented in Eldred, again entered a dissenting opinion in the instant case, emphasizing that in extending protection to old works, the statute does not serve the purpose of the Progress Clause, which is to create incentives to “promote the Progress of Science.”

‘Extreme Deference' in Copyright Matters

At least one expert said that this decision closed the book on the question of deference to Congress in the copyright realm.

“There should no longer be any doubts about the court's extreme deference to Congress regarding copyright legislation,” Roger E. Schechter, a law professor at George Washington University, told Bloomberg BNA. “Although this decision was predictable because the statute includes some ‘protections' for reliance parties which cushioned the removal of material from the public domain, and because a contrary result would have caused serious problems with our ability to remain a member of Berne, it is now hard to imagine any copyright statute that this court would find constitutionally troublesome.”

Ralph Oman, a law professor at George Washington University who served as register of copyrights from 1985 to 1994, said that as a result of this decision, “American creators are the big winners.”

Oman told Bloomberg BNA that this case finally represents a “clean” membership in the Berne system.

In joining Berne, a hundred years after its creation, “We gave our trading partners a few IOUs, promising to make us really square with the convention's obligations in the fullness of time,” Oman said.

The United States assembled a few small pieces here and there, such as architectural works and moral rights for painters and sculptors, along the way, he said. But, in 1994, by enacting the statute that was subject to the dispute in this case, “we tidied up the last bit of Berne business by restoring the copyrights of foreign authors whose works had fallen into the public domain because of their failure to renew their works or to publish them with copyright notice, both required under U.S. law at the time.”

This decision clears up, after 18 years, the “constitutional cloud” that has darkened this provision, Oman said.

Full accession to its international obligations has “prompted a tremendous expansion of U.S. trade in copyrighted materials, and gave our trade negotiators the legal tools they needed to protect American movies, books, computer programs, and sound recordings in foreign markets,” Oman said. Prior to this era, “We were like Blanche Dubois. We relied on the kindness of strangers, and we, like Blanche, were often disappointed. … Today, with the Supreme Court ratification of its constitutionality, that cloud … has been finally dispelled, and we have kept our promise to the international community.”

Accession to Berne Convention

The dispute goes back to 1989, when the United States signed the Berne Convention for the Protection of Literary and Artistic Works of 1886. Article 18 of the treaty requires that the signatory states mutually recognize each other's copyrights, to apply retroactively to pre-existing foreign works, even if they had been treated as public domain works in a country previously.

In conjunction with the accession, Congress enacted the Berne Convention Implementation Act of 1988, Pub. L. No. 100-568, 102 Stat. 2853, 2860. However, the statute did not implement Article 18's retroactivity principle. It recognized only those foreign copyrights covering works that were not already in the public domain under U.S. law, and it applied the treaty only to those foreign works created after March 1, 1989.

In negotiating the Uruguay Round of the General Agreement on Tariffs and Trade—which led to the U.S. accession to the Agreement on Trade-Related Aspects of Intellectual Property—the United States made commitments to comply with Article 18.

Eventually, Congress enacted the Uruguay Round Agreements Act of 1994, Pub. L. No. 103-456, 108 Stat. 4809, 17 U.S.C. §§104A, 109. Section 514 of the URAA restored rights in any foreign work that was in the public domain as a result of (1) the failure of the copyright owner to comply with registration requirements mandated by pre-Berne U.S. law, (2) the lack of subject matter protection, or (3) the lack of national eligibility. It did not restore rights in works that had originally been protected but whose protection had expired under the applicable U.S. law.

Section 514 also offered some concessions to “reliance parties,” entities that had made use of certain foreign works with the understanding that they were in the public domain. An owner of a foreign work was required to file notice of restoration or give actual notice to a reliance party, and the reliance party would be given a certain amount of time to sell its inventory of copies of the work before infringement liability would be applicable. Use of derivative works could continue if the reliance party paid compensation in an amount set by agreement or by a federal court.

Challenge by Conductors, Archivists, and Others

In 2001, a group of entities—including orchestra conductors, teachers, performers, publishers, archivists, and movie distributors—that had relied upon the public domain availability of pre-1989 foreign works initiated an action against the government, arguing that the restoration of rights interfered with their constitutionally protected free speech rights and also exceeded Congress's powers under the Copyright Clause, also known as the Intellectual Property Clause or the Progress Clause.

In a 2005 decision, Judge Lewis T. Babcock of the U.S. District Court for the District of Colorado rejected this argument and granted summary judgment in the government's favor. Golan v. Gonzales, 74 USPQ2d 1808 (D. Colo. 2005) (87 PTD, 05/6/05). On appeal, the 10th Circuit said that free speech rights were sufficiently implicated to survive summary judgment. Golan v. Gonzales, 501 F.3d 1178, 84 USPQ2d 1076 (10th Cir. 2007) (177 PTD, 09/13/07).

In a similar case in another circuit, a company that sells and rents classical orchestral sheet music and a company that restores and preserves old films challenged Section 514. In this case, the D.C. Circuit upheld the constitutionality of the statute based on Eldred v. Ashcroft, 535 U.S. 185, 65 USPQ2d 1228 (2003), which rejected a similar challenge to the Sonny Bono Copyright Term Extension Act of 1998. Luck's Music Library Inc. v. Ashcroft, 74 USPQ2d 1861 (D.C. Cir. 2005) (105 PTD, 06/2/05).

In a 2009 decision, the district court on remand ruled that Section 514 violated the First Amendment rights of those who had been using the public domain works whose copyrights had been restored Golan v. Holder, No. 01-cv-1854 (D. Colo. April 3, 2009) (68 PTD, 4/13/09). According to the district court, the new copyright protections were substantially more than what was necessary to comply with the Berne Convention. The district court thus granted summary judgment in the plaintiffs' favor.

The 10th Circuit reversed, finding that Section 514 was a content-neutral regulation of speech. Applying the intermediate scrutiny standard, the appeals court found important or substantial governmental interests. It rejected the argument that Section 514 represented only a “reallocation of speech interests,” and it also found that the statute had been narrowly tailored to serve legitimate governmental interests. Golan v. Holder, 609 F.3d 1076, 95 USPQ2d 1466 (10th Cir. 2010) (119 PTD, 6/23/10).

‘Bedrock Principle' Asserted

The plaintiffs petitioned the Supreme Court to review the 10th Circuit's ruling, asserting that the statute flew in the face of the entire history of U.S. copyright law by reinstating the copyright status of works already in the public domain, and thus creating uncertainty on the part of the users of creative works.

The “bedrock principle” of copyright law is that once in the public domain, a work stays in the public domain, the petitioners said. Furthermore, according to the petition, this principle was based on the Constitution's Progress Clause itself, which restricts intellectual property protection to “limited times.”

The court granted certiorari on the questions of whether the Progress Clause prohibited Congress from removing works from the public domain and whether Section 514 infringed constitutional free speech rights.

Numerous Amicus Briefs Filed

The case drew the attention of numerous amici curiae, and amicus briefs were filed supporting the petitioners as well as the government (152 PTD, 8/8/11; 153 PTD, 8/9/11; 157 PTD, 8/15/11; 189 PTD, 9/29/11).

The briefs generally echoed the parties' arguments. The government and its amici argued that the heightened standards of free speech analysis should not apply to Section 514, that Section 514 did not exceed the authority granted by the Copyright Clause, and that there was sufficient precedent for Congress's removing works from the public domain.

Oral Arguments

The Supreme Court entertained oral arguments in October, with Justice Ruth J. Bader Ginsburg and petitioners' counsel clashing repeatedly over the notion of whether works that had never been protected could be said to have been granted a term of “zero” that had expired and could not thus be restored (197 PTD, 10/12/11).

Majority Opinion

Ginsburg's opinion began by reviewing the history of Article 18 and the events leading up to the enactment of the URAA.

In so doing, the court noted that “The URAA's disturbance of the public domain hardly escaped Congress'[s] attention,” and the evidence for this included the concessions granted to reliance parties in the statute.

Authority Under the Copyright Clause

Turning to the substance of the petitioners' arguments, the court first rejected their assertion that the Copyright Clause generally bars public domain works from being brought under the protection of copyright law.

First, the court said, “The text of the Copyright Clause does not exclude application of copyright protection to works in the public domain.”

The court rejected the argument that the “limited times” restriction prohibited removal of works from the public domain, and referred to Eldred‘s rejection of a similar argument in the case of copyright term extensions effected by the CTEA.

“The terms afforded works restored by §514 are no less ‘limited' than those the CTEA lengthened,” the court said, emphasizing that the statute sets actual limits on the length of protection.

Furthermore, the court rejected the argument that these public domain works had already been granted a term of protection—a “zero” term—which had commenced and expired upon creation of each relevant work, and thus could not be revived by statute.

“We find scant sense in this argument, for surely a ‘limited time' of exclusivity must begin before it may end,” the court said.

The petitioners' argument that this would allow Congress to effectively create unlimited terms by instituting an endless series of limited terms was not supported by the facts of the case. The court said:

As in Eldred, the hypothetical legislative misbehavior petitioners posit is far afield from the case before us. … In aligning the United States with other nations bound by the Berne Convention, and thereby according equitable treatment to once disfavored foreign authors, Congress can hardly be charged with a design to move stealthily toward a regime of perpetual copyrights.

Restoration Supported by History

Next, the court said that the historical record supported this interpretation of the Copyright Clause.

“On occasion, … Congress has seen to protect works once freely available,” the court said. Significantly, the very first national copyright statute, the Copyright Act of 1790, “extended protection to many works previously in the public domain.”

The court rejected the argument that all these works had already been protected under state copyright laws, noting that at the time there were three states that had instituted no copyright protections at all and others did not protect all types of works that were protected under the federal statute.

“The First Congress, it thus appears, did not view the public domain as inviolate,” the court said.

Other subsequent statutes also extended protections to some public domain works, such as the Corson Act of 1849, 9 Stat. 763; the Helmuth Act of 1874, 18 Stat. 618; and the Jones Act of 1898, 30 Stat. 1396. Similarly, patent protection, which is also authorized by the Progress Clause, had been granted in several analogous situations, the court said, and such restorations had been upheld in cases such as McClurg v. Kingsland, 1 How. 202 (1843).

Other statutes extended patent and copyright protections to inventors and authors who were unable to comply with formalities during times of war, specifically World War I and World War II. Such decisions are within the political judgment of Congress as it acts under its Progress Clause authority, the court said:

Installing a federal copyright system and ameliorating the interruptions of global war, it is true, presented Congress with extraordinary situations. Yet the TRIPS accord, leading the United States to comply in full measure with Berne, was also a signal event. … Given the authority we hold Congress has, we will not second-guess the political choice Congress made between leaving the public domain untouched and embracing Berne unstintingly.

‘Progress' Does Not Necessarily Just Mean New Works

Finally, the court rejected the petitioners' argument that Section 514 of the URAA was not within the Copyright Clause because protection of works already created did not “promote the Progress of Science,” and did nothing to incentivize the creation of even one new work.

“The creation of at least one new work, however, is not the sole way Congress may promote knowledge and learning,” the court said, noting that it had rejected a “nearly identical” argument in Eldred:

The Eldredpetitioners urged that the “CTEA's extension of existing copyrights categorically fails to ‘promote the Progress of Science,' … because it does not stimulate the creation of new works.” … In response to this argument, we held that the Copyright Clause does not demand that each copyright provision, examined discretely, operate to induce new works. Rather, we explained, the Clause “empowers Congress to determine the intellectual property regimes that, overall, in that body's judgment, will serve the ends of the Clause.” … And those permissible ends, we held, extended beyond the creation of new works. …

Even were we writing on a clean slate, petitioners' argument would be unavailing. Nothing in the text of the Copyright Clause confines the “Progress of Science” exclusively to “incentives for creation.”

The historical record, indeed, supported the idea that the clause was intended to incentivize dissemination of works, not just creation of works, the court said. Specifically, the federal copyright law before 1976 granted rights upon publication of a work, not just creation.

“Considered against this backdrop, §514 falls comfortably within Congress'[s] authority under the Copyright Clause,” the court said. “Congress rationally could have concluded that adherence to Berne ‘promotes the diffusion of knowledge.' ”

First Amendment Rights Not Infringed

The court then held that the URAA did not infringe the free speech rights of those who wished to make use of the works as public domain works.

Again, the court began by referring to its reasoning in Eldred, under which the court concluded that “some restriction on expression is the inherent and intended effect of every grant of copyright” and also that copyright protection itself was an integral part of protecting free speech, as an “engine of free expression.”

Furthermore, the court noted that the existence of the idea-expression dichotomy and the fair use doctrine further operated as “speech-protective purposes and safeguards” that were integral to the copyright system, including the copyright term extension at issue in that case.

The court rejected the petitioners' attempt to distinguish the instant circumstances from those in Eldred. The petitioners argued that the rights here were more critical because they were “vested rights,” in that the works at issue were already in the public domain, whereas the works in Eldredhad not become part of the public domain. The built-in safeguards of things like the fair use doctrine did not make up for the fact that these vested rights in unrestricted use were being snatched away, they argued.

However, the court said that it had already rejected the argument that the public domain was “largely untouchable” in considering the Progress Clause argument. And this argument would not win in the First Amendment context what it could not in the Progress Clause context, the court said.

Furthermore, there was no evidence that Section 514 constituted a content-based restriction of speech, which is a key to invoking the heightened standards of the First Amendment, the court said.

Finally, the court rejected the petitioners' raising of the orphan works problem, the problem of obtaining permission to use a work when the copyright owner could not be identified or found.

This problem was not one limited to restored works, and, in any case, the court said, this was an issue for legislative resolution, and not for the courts.

The court thus affirmed the 10th Circuit's ruling that Section 514 did not infringe free speech rights as protected by the First Amendment.

The court's opinion was joined by Chief Justice John G. Roberts Jr., and Justices Antonin G. Scalia, Anthony M. Kennedy, Clarence Thomas, and Sonia M. Sotomayor.

Dissenting Opinion

Breyer, who dissented from Ginsburg's opinion in Eldred, began his dissent in this case by emphasizing the fact that Section 514 did not create incentives for the production of new works.

“The possibility of eliciting new production is, and always has been, an essential precondition for American Copyright protection,” according to the dissent.

Breyer reviewed the history of copyright law beginning with the 1710 Statute of Anne, which established copyright law in the United Kingdom. The circumstances surrounding that act, as well as subsequent legal developments in colonial America, supported this principle, he said.

He contrasted the history of copyrights in the common law system against the history in continental Europe, which was based on the concept of the “natural rights” of authors.

The dissent also cited to court decisions as well as legislative history that emphasized the importance of incentivizing the creation of new works as the basis for copyright protection.

The remaining portion of the dissent was largely aimed at outlining the impact of the URAA and the volume of works in which rights were being extended. Breyer coupled this with the problem of securing permissions with regard to orphan works as creating “high administrative costs” associated with legitimate uses serving the public interest.

Furthermore, the fact that the works in question are foreign works increases these costs, Breyer said.

“This statute does not serve copyright's traditional public ends, namely the creation of monetary awards that ‘motivate the creative activity of authors,' ” he emphasized.

Breyer concluded: “The fact that, by withdrawing material from the public domain, the statute inhibits an important preexisting flow of information is sufficient, when combined with the other features of the statute … to convince me that the Copyright Clause, interpreted in the light of the First Amendment, does not authorize Congress to enact this statute.”

The dissent was joined by Justice Samuel A. Alito Jr.

Justice Elena Kagan recused herself from the consideration of or the decision in this case, as a result of her service as U.S. solicitor general during the time this case was making its way up to the Supreme Court.

The government was represented by Donald B. Verrilli Jr., the U.S. solicitor general. The petitioners were represented by Anthony T. Falzone of the Center for Internet and Society at Leland Stanford Jr. University.

For More Information

Schechter and Oman are members of this publication's board of advisors.

Opinion at http://pub.bna.com/ptcj/10545Jan18.pdf