Comprehensive Copyright Review – The First Steps of a Very Long Journey

House Judiciary Committee Chairman Bob Goodlatte has announced that the Judiciary Committee will conduct a comprehensive review of U.S. copyright law over the coming months. The comprehensive review is not any particular legislative agenda, but it will serve as an open invitation to content industries, technology industries, and the public in a way that likely never occurred in any of the Copyright Act’s prior legislative reforms.

Chairman Goodlatte emphasized the evolution of technology and media in his remarks:

The discussions during the early 1900’s over the need to update American copyright laws to respond to new technology were not the first time such discussions occurred and they will certainly not be the last. Formats such as photographs, sound recordings, and software along with ways to access such formats including radio, television, and the Internet did not exist when the Constitution recognized intellectual property. My Committee has repeatedly held similar discussions about new forms of intellectual property as they arose and enacted laws as appropriate. Driven by new technologies and business models, a number of changes to copyright law went into effect in 1976.

copyright officeNo one should expect immediate legislation. As Register of Copyrights, Maria Pallante noted in her recent congressional testimony “a major portion of the current copyright statute was enacted in 1976. It took over two decades to negotiate, and was drafted to address analog issues and to bring the United States into better harmony with international standards, namely the Berne Convention.” Even there, the effective date for U.S. adherence to the Berne Convention took until March 1, 1989.

In the decades of negotiation over copyright reform in the past, the tension was primarily between commercial interests of the content industries – film, television, music, and publishing industries with the trade unions, authors, and creative interests. But that focus has shifted dramatically with the rise of the information age.

The defeat of SOPA highlighted the tension between the technology industries – led by the ISPs, Google, Apple, Microsoft, eBay, Facebook, and Wikipedia with the content industries. In this fight, the content industries continue to lose. They could not push ACTA and they have lost in the courts over first sale in Kirtsaeng v. John Wiley & Sons, secondary liability in Viacom Int’l v. YouTube Inc. and Tiffany v. eBay, Inc., and many others.

Even more importantly, the rise of social media and the role copyright now plays – or interferes – in the daily lives of ordinary citizens means that the public’s interest in this debate will be higher than ever. Organized by social media companies like Facebook, LinkedIn, Twitter, Google and hundreds of others, the public will be exhorted to be heard every time they log on or check in. This is a great change for democracy. But we shouldn’t forget that those intermediaries are also the very technology companies that have their own stake in the outcomes.

Register Pallante has indicated some of the critical issues before the Judiciary Committee (though the explanation and approach is mine, not Register Pallente’s):

  • First sale doctrine – which could include both (i) a review of Kirtsaeng (2013) which internationalized first sale, and (ii) technologies that allow for a digital forward-and-delete that mimics first sale in the online environment;
  • Orphan works – questions about how to handle works for which the ownership information or the transfers of ownership have been lost;
  • Library exceptions – addressing digital collections and the ability to gain far greater usage out of far fewer copies;
  • Statutory licensing reform – on rate setting and rates;
  • Federalization of pre-72 sound recordings – resolving the issues involving retroactive pseudo-copyright protection for these works and the implications on the public domain;
  • Resale royalties for visual artists – addressing the conflict with those states which provide these rights and potentially creating national legislation;
  • Copyright small claims procedure or courts – adding a mechanism for copyright to be enforceable for small scale claims; and
  • Mass digitization of books – addressing the myriad of problems triggered by the intermediate copyright violations of works, the fair use of showing snippets, the procedural issues in the project, and many other concerns.

This list does not include many other potential areas for reform, including some of my preferred topics:

  • Explicit free speech and human rights accommodations for the statute, since copyright and First Amendment issues increasingly intersect;
  • Expanded fair use or copyright exemptions codified under Section 110 for digitization, reverse engineering, comparative advertising, and others;
  • Anti-circumvention (DMCA) reform to prohibit its use for use in commercial products – such as cars, printers, garage doors, and other goods;
  • Expanded registration requirements so that most of the economically insignificant works people create daily are outside of the copyright regime;
  • Statutory Damage Reform to tie statutory damages more closely to actual damages and separate commercial infringers from consumers;
  • Mandatory cease-and-desist system so that no one can be sued for copyright damages unless they have been notified directly the conduct is infringing and continue, after a reasonable opportunity to cure has been provided; and
  • Broader non-commercial exceptions to copyright analogous to the public/private distinction of the 1909 Act.

Copyright needs to continue to adjust to address these issues. While the system is not broken, there are many strains. Again, from Chairman Goodlatte:

There is little doubt that our copyright system faces new challenges today. The Internet has enabled copyright owners to make available their works to consumers around the world, but has also enabled others to do so without any compensation for copyright owners. Efforts to digitize our history so that all have access to it face questions about copyright ownership by those who are hard, if not impossible, to locate. There are concerns about statutory license and damage mechanisms. Federal judges are forced to make decisions using laws that are difficult to apply today. Even the Copyright Office itself faces challenges in meeting the growing needs of its customers – the American public.

It will be important to be heard on these issues and to think carefully about a system that is good for today’s issues, tomorrow’s challenges and the decades of unanticipated changes the new law will cover.

Cyber Defense Strategies and Responsibilities for Industry Call for Papers Now Open

The Northern Kentucky Law Review and Salmon P. Chase College of Law seek submissions for the third annual Law + Informatics Symposium on February 27-28, 2014.

2014 Law + Informatics Symposium on

Cyber Defense Strategies and Responsibilities for Industry

 The focus of the conference is to provide an interdisciplinary review of issues involving business and industry responses to cyber threats from foreign governments, terrorists, and corporate espionage. The symposium will emphasize the role of the NIST Cybersecurity Framework and industries providing critical infrastructure.

The symposium is an opportunity for academics, practitioners, consultants, and students to exchange ideas and explore emerging issues cybersecurity and informatics law as it applies to corporate strategies and the obligations of business leaders. Interdisciplinary presentations are encouraged. Authors and presenters are invited to submit proposals on topics relating to the theme, such as the following:

Cyber Warfare

  • Rules of Engagement
  • Offensive and defensive approaches
  • Responses to state actors
  • Engagement of non-state actors
  • Distinguishing corporate espionage from national defense
  • Proportionality and critical infrastructure
  • Cyber diplomacy
  • Cold War footing and concerns of human rights implications

Front Lines for Industry

  • Role of regulators such as FERC
  • Legacy systems and modern threats
  • NIST guidelines
  • NIST Cybersecurity Framework
  • Engaging Dept. of Homeland Security
  • Implications on various industries (electric power,  telecommunications and transportation systems, chemical facilities)
  • Health and safety issues
Global Perspectives

  • Concepts of cyber engagement in Europe
  • Perception of Internet and social media as threat to national soverignty
  • Rules of engagement outside U.S. and NATO
  • Implications for privacy and human rights
  • Stuxnet, Duqu, Gauss, Mahdi, Flame, Wiper, and Shamoon
  • Cyber engagement in lieu of kinetic attacks or as a component of kinetic engagement

 

Corporate Governance

  • Confidentiality and disclosure obligations
  • Responsibilities of the board of directors
  • Staffing, structures and responses
  • Data protection & obligations regarding data breaches
  • Corporate duty to stop phishing and other attacks for non-critical industries
  • Investment and threat assessment
  • Litigation and third party liability

 

Other Issues

  • Executive orders and legislative process
  • Lawyer responsibility in the face of potential threats
  • Practical implications of government notices
  • Perspective on the true nature of the threat

Submissions & Important Dates: 

  • Please submit materials to Nkylrsymposium@nku.edu
  • Submission Deadline for Abstracts: September 1, 2013
  • Submission Deadline for First Draft of Manuscripts: January 1, 2014
  • Submission Deadline for Completed Articles: February 1, 2014
  • Symposium Date: February 27-28, 2014

Law Review Published Article:  The Northern Kentucky Law Review will review, edit and publish papers from the symposium in the 2014 spring symposium issue.  Papers are invited from scholars and practitioners across all disciplines related to the program. Please submit a title and abstract (of 500-100 words) or draft paper for works in progress. Abstracts or drafts should be submitted by September 1, 2013. Submissions may be accepted on a rolling basis after that time until all speaking positions are filled.

Presentations (without publication) based on Abstracts:  For speakers interested in presenting without submitting a publishable article, please submit an abstract of the proposed presentation. Abstracts should be submitted by September 1, 2013. Submissions may be accepted on a rolling basis after that time until all speaking positions are filled.

Publication of Corporate Handbook on Cyber Defense: The Law + Informatics Institute may edit and publish a handbook for corporate counsel related to the topics addressed at the symposium. Scholars and practitioners interested in authoring book chapters are invited to submit their interest by September 1, 2013 which may be in addition to (or as an adaptation of) a submitted abstract for The Northern Kentucky Law Review. Submissions may be accepted on a rolling basis after that time until all chapter topics are filled.

About the Law and Informatics Institute:  The Law + Informatics Institute at Chase College of Law provides a critical interdisciplinary approach to the study, research, scholarship, and practical application of informatics, focusing on the regulation and utilization of information – including its creation, acquisition, aggregation, security, manipulation and exploitation – in the fields of intellectual property law, privacy law, evidence (regulating government and the police), business law, and international law.

Through courses, symposia, publications and workshops, the Law + Informatics Institute encourages thoughtful public discourse on the regulation and use of information systems, business innovation, and the development of best business practices regarding the exploitation and effectiveness of the information and data systems in business, health care, media, and entertainment, and the public sector.

For More Information Please Contact:

  • Professor Jon M. Garon, symposium faculty sponsor and book editor: garonj1@nku.edu or 859.572.5815
  • Lindsey Jaeger, executive director: JaegerL1@nku.edu or 859.572.7853
  • Aaren Meehan, symposium editor, meehana2@mymail.nku.edu or 859-912-1551

Beyond Google’s Looking Glass – The Internet of Things is Already Here

Seal of the United States Federal Trade Commis...

(photo: Wikipedia)

Perhaps triggered by the New York Times coverage of Google Glass, The FTC announced both a call for submissions and a workshop related to the Internet of Things and its implications on privacy, fair trade practice, and security implications for both data and people. The FTC announcement highlights both the benefits and risks of device connectivity.

Connected devices can communicate with consumers, transmit data back to companies, and compile data for third parties such as researchers, healthcare providers, or even other consumers, who can measure how their product usage compares with that of their neighbors.  The devices can provide important benefits to consumers:  they can handle tasks on a consumer’s behalf, improve efficiency, and enable consumers to control elements of their home or work environment from a distance. At the same time, the data collection and sharing that smart devices and greater connectivity enable, pose privacy and security risks.

The issue is not new. The ITU released a 2005 study discussing the implications of the Internet of Things. The ITU described a near, technological future in which “industrial products and everyday objects will take on smart characteristics and capabilities. … Such developments will turn the merely static objects of today into newly dynamic things, embedding intelligence in our environment, and stimulating the creation of innovative products and entirely new services.”

I have previously described some of these concerns in an article, Mortgaging the Meme.[1]

In each of these situations, an automated and consumer-defined relationship will replace the pre-existing activities. In many situations, this will create efficiency and convenience for the consumer, but it will also reduce the opportunities for human interaction and subtly rewrite the engagement between customer and company. Those that understand this change will adjust their technologies to improve the service and increase the customer‘s reliance on its systems. Companies that do not understand how this engagement will occur, risk alienating customers and losing markets quickly.

Beyond consumer interactions, other uses may arise. Ethical and privacy concerns regarding misuse tend to focus on government, business and organized crime. These include unwarranted surveillance, profiling, behavioral advertising and target pricing campaigns. As a result, as companies increasingly rely on these tools, they also bear a responsibility to do so in a socially positive manner that increases the public‘s estimation of the company.

Timing for the FTC submissions and workshop are overdue. Reading the New York Times quote regarding app developers, there is a sense that unlike the technology giants such as Microsoft and Google, the developers are thinking more about the technology’s potential than its potential impact. One such example from the Times: “‘You don’t carry your laptop in the bathroom, but with Glass, you’re wearing it,’ said Chad Sahlhoff, a freelance software developer in San Francisco. ‘That’s a funny issue we haven’t dealt with as software developers.’”

Many fields will benefit from increased device connectivity. Just a few:

  • Public transportation systems designed around real-time usage and traffic patterns.
  • Prescription monitoring to help patients take the right medications at the correct time.
  • Fresher, healthier produce.
  • Protection of pets and children.
  • Social connectivity, with photo-tagging and group-meeting moving into the real world.
  • Interactive games played on a real-world landscape.

There are also law enforcement uses that must be carefully considered. After the Boston Marathon attack, for example, calls for public surveillance will undoubtedly increase, including calls for adding seismic devices and real-time echo-location. Gunshots, explosions, and even loud arguments could become self-reporting.

Common household products sometimes become deadly in large quantities. RFID technology could be used to monitor quantity concentration of potentially lethal materials and provide that data to the authorities.

The consumer use, public use, and law enforcement use must be thoughtfully reviewed to balance the benefits of the technology with the intrusions into privacy and the legacy of retrievable information that such technology creates.

FTC staff will accept submissions through June 1, 2013, electronically through iot@ftc.gov or in written form. The workshop will be held on November 21st. These are the questions posed by the FTC thus far:

  • What are the significant developments in services and products that make use of this connectivity (including prevalence and predictions)?
  • What are the various technologies that enable this connectivity (e.g., RFID, barcodes, wired and wireless connections)?
  • What types of companies make up the smart ecosystem?
  • What are the current and future uses of smart technology?
  • How can consumers benefit from the technology?
  • What are the unique privacy and security concerns associated with smart technology and its data?  For example, how can companies implement security patching for smart devices?  What steps can be taken to prevent smart devices from becoming targets of or vectors for malware or adware?
  • How should privacy risks be weighed against potential societal benefits, such as the ability to generate better data to improve healthcare decision making or to promote energy efficiency?
  • Can and should de-identified data from smart devices be used for these purposes, and if so, under what circumstances?

While the FTC has asked some good questions, they are only the beginning. Please submit your thoughts and join the FTC conversation.


[1] Jon M. Garon, Mortgaging the Meme: Financing and Managing Disruptive Innovation, 10 NW. J. TECH. & INTELL. PROP. 441 (2012).

Untangling the web: Spider-Man lawsuit settlement highlights how to negotiate out of copyright collaboration agreements

The New York Times reports a final settlement in the long-running copyright and breach of contract battle between producers of “Spider-Man: Turn Off the Dark,” the musical’s original director Julie Taymor, which also involved composers, Bono and the Edge of U2 and Marvel Entertainment (which itself was acquired by Disney in 2009). The New York Times summarized the dispute as follows:

Ms. Taymor, the Tony Award-winning director of “The Lion King,” was fired from the $75-million “Spider-Man” production in March 2011 amid disputes over changes to the show’s script and staging. In November, Ms. Taymor filed a breach of contract suit against the musical’s lead producers, Michael Cohl and Jeremiah J. Harris, saying that they were continuing to profit from her creative contributions to the show without compensating her. Mr. Cohl and Mr. Harris filed a countersuit in January saying that she violated the terms of her contract and “could not and would not do the jobs” she was hired to do, and thus was not entitled to further royalties.

Last September, the parties “reached an agreement in principle,” according to a statement issued by the U.S. District Judge Katherine Forrest overseeing the trial. But the final agreement required an additional four months of negotiations. The delay likely comes from the conflicting nature of the parties’ interests and uncertainty over the value of the $75 million dollar property.

Although the stage musical has Spidermanachieved some weeks with grosses in excess of $1 million, it is unclear whether it is significantly profitable on most weeks. Assuming it is, at a profit of $150,000 per week (a considerable sum for Broadway), it would need to run over 9½ years to break even. For the investors, that is a monstrous timeline.

Royalty participants like Bono, the Edge earn income each week, so the length of the run matters more than its profitability, though complex formulae used in the Approved Production Contract for Musicals offsets some of this disparity.

More importantly, for the producers and investors, is the ability to restage and cut the musical so that its costs can be tamed and the production repackaged for other cities and for tours. The settlement of the copyright action by Ms. Taymor presumably allows the producers to use and to modify her material so that the show can be streamlined and packaged for other venues.

Despite the many accidents during development and the generally bad reviews, Spider-Man is reportedly a “fan favorite” according to the Times. Profitability will not likely come from Broadway, so the producers need this settlement to take their show on the road and lower their costs.

For other creators, seeking to learn from the settlement, what might such settlement negotiations entail?

1. Approval rights. A director may have approval rights over the use of various copyrighted elements in the production. A settlement agreement must terminate all future approvals.

2. Copyrighted elements. Generally a director does not contribute works that are protected by copyright. The Approved Production Contract provides very explicitly that the playwright (including the composer and lyricist for musicals) solely owns the copyright. General staging is not copyright protected, though choreography is protectable by copyright. All choreography and any staging should be licensed to the production to make the settlement effective.

The license must include both the right to publicly perform so that the productions can continue to be shown on stage; to reproduce so that any DVDs of the production can be sold; and to modify, so that the work can be changed as needed to accommodate new venues and new performers.

3. Contractually protected elements. The director of a play or musical will have protections provided by contract that go beyond copyright. Ideas on staging, conceptual approaches to the material and other elements that fall outside of copyright may still be covered by contract. The production contract should be superseded by the settlement agreement; all rights protected by the contract should be transferred; and any other claims waived.

4. Non-disparagement and credit.  There are two sides to every break up. Both parties are likely at fault and neither side is completely true. As such, the settlement agreement must protect both sides – particularly the individuals – from negative statements or efforts to paint the other side as unprofessional or wrong. A key component of this is affording credit to everyone involved. There may be an additional wrinkle because new participants have been hired to complete work started by those leaving the production. In some cases, the amounts of relative contribution are balanced by the applicable union and credit is arbitrated through the union agreement. In most cases, however, the settlement should itself provide some credit for everyone – with an effort to be generous to the leaving parties.

5. Payment. Ideally, the settlement of any creative dispute will include a payment of a fixed sum, so that the parties can be done interacting and so all future accounting obligations are avoided. If the future revenues (or profitability) are too uncertain, then future participation may be necessary. Even if the settlement provides for payments based on future revenues, the parties are better off with a royalty based on weeks performed or grosses earned than the more subjective definition of profits. Nothing will guarantee a return to the courtroom faster than a net profits settlement provision and a very successful run.

The actual settlement involving Spider-Man has not been disclosed. Still, these five key provisions are likely the topics identified by all the parties. Participants like Marvel needed to be sure the settlement did not change the producer’s obligations or harm its interests, while the producers and Ms. Taymor had a great deal of economic, professional and emotional issues to address. Does this mean Spider-Man will soon be coming to a town near you? It opens the possibility. Now the producers need to translate their $75 million enterprise into a smaller, simpler but audience-thrilling experience.

Like any creative endeavor, these projects always take time.