Recent Developments in the Control of Information:

Can Traditional Access & Use of Protected Content Survive the

Transition?

Prepared for

United States Agricultural Information NetworkApril 30, 2008

© Tomas A. Lipinski 2008

Some Ground Rules!• Anything said here is not to be taken

as legal advice, if you have a legal issue, please consult appropriate counsel.

• In return, it is assumed that all questions posed are hypothetical and reflect only the musings of an informed and curious mind and not the actual problem you might have.

Trends in Copyright Legislation • What Users Receive: Exemption (Sections 107,

108 and 109) vs. Limitation on Liability ($$$) (Section 512 and Orphan Works proposals).

• An exemption (privilege) operates as an affirmative defense to a claim of copyright infringement, i.e., considered in a motion for summary judgment (dismissal, finding of fair use).

• Limitation on Liability (two forms): – Immunity: section 108(f)(1).– Damage remission: Liability remains, $$$ reduced or

eliminated. Examples: section 504 (statutory damages) and section 512 and orphan works proposals (actual and statutory damages, costs and attorney’s fees).

Trends in Copyright Legislation • What Users Must do in Return: Obligations.• First Generation: Use of Warning Notices and

Knowledge Standards within the Institution. Library: section 108 and Classroom: section 110(1).

• Second Generation: The Adoption and Use of Copyright Policies and Outreach Measures. Higher education: section 512(e) and distance classroom: section 110(2).

• Third Generation: Inter-Active Information Intermediary (your role in copyright enforcement). Section 512 mechanisms and orphan works proposals.

• Fourth Generation: Use of Technological Protection Measures to Create a Compliant Environment. Distance classroom: Section 110(2).

• Monitoring: Towards a Fifth Generation of Obligations?

Copyright and Related Issues • Copyright

– Orphan Works– P-2-P and College Campuses– Section 108 reform

• Technical Protection Measures– Section 1201 reform– Section 1201 rule-making

• Fair Use case law: implications for archiving and education. Good News!

• Licensing: Trends (recent cases) and Concerns

Solving the Problem of Orphan Works • “[A] term used to describe the situation where the

owner of a copyrighted work cannot be identified and located by someone who wishes to make use of the work in a manner that requires permission of the copyright owner.” U.S. COPYRIGHT OFFICE, REPORT ON ORPHAN WORKS 15 (2006).– “Many users of copyrighted works who have limited

resources or are particularly risk-averse have indicated that the risk of liability for copyright infringement, however remote, is enough to prompt them simply to not make use the work. Such an outcome is not in the public interest, particularly where the copyright owner is not locatable because he no longer exists or otherwise does not care to restrain the use of his work.” Id.

Solving the Problem of Orphan Works • Limitation on Liability ($$$): H.R. 5439, 109th

Congress, 2d Session (2006) (The Orphan Works Act of 2006).

• $$$ limited to Reasonable Compensation (no actual damages, statutory damages, costs, or and attorney’s fees):– Must negotiate in good faith regarding the amount of

reasonable compensation.• No $$$ whatsoever where …

– No purpose of direct or indirect commercial advantage,– primarily for a charitable, religious, scholarly, or educational

purpose, and– the infringer ceases the infringement expeditiously after

receiving notice of the claim for infringement (unless “the infringer has earned proceeds directly attributable to the infringement”).

Solving the Problem of Orphan Works • What Users Must do in Return: Attribution

and Search.– Attribution: “attribution, in a manner reasonable

under the circumstances, to the author and owner of the copyright, if known with a reasonable degree of certainty based on information obtained in performing the reasonably diligent search.”

– Reasonably Diligent Search: “before the infringing use of the work began, the infringer … performed and documented a reasonably diligent search in good faith to locate the owner of the infringed copyright; but (ii) was unable to locate the owner.”  

Solving the Problem of Orphan Works • Reasonably Diligent Search. Beyond the four-corners of

the item: The search “is not reasonably diligent solely by reference to the lack of identifying information with respect to the copyright on the copy or phonorecord of the work.”

• Statutory standard would anticipate expenditures: To be “reasonable under the circumstances” the search “shall ordinarily include, at a minimum, review of the information maintained by the Register of Copyrights under subparagraph (C). A reasonably diligent search includes the use of reasonably available expert assistance and reasonably available technology, which may include, if reasonable under the circumstances, resources for which a charge or subscription fee is imposed.”

Solving the Problem of Orphan Works • Derivative use preserved, but not exempted, i.e.,

not for free! Continued use cannot be prohibited “if the infringer pays reasonable compensation to the owner of the infringed copyright for the use of the infringed work, and provides attribution to the owner of the infringed copyright in a manner that the court determines is reasonable under the circumstances.”

• Impact: requires the owner to grant a court determined compulsory license for continued use of the work.

Solving the Problem of Orphan Works • H.R. 5439, 109th Congress, 2d Session (2006)

(The Orphan Works Act of 2006). Issues!• Limitation on plaintiff’s remedies vs. limitation

on the owner’s exclusive rights.• Actual costs of reasonably diligent search.• Costs of reasonably diligent search: record

keeping (“forever and a day” plus three years!).• Errors assessed under same standard: identify

and locate author and owner.• Solution limited by lack of certainty regarding

standards of qualification: diligent search.

Copyright on the College Campus • P-2-P and College Campuses: An Update -- Piracy on

University Networks, Hearing, Subcommittee on Courts, the Internet, and Intellectual Property, U.S. House of Representatives Judiciary Committee, March 8, 2007.

• Reducing Peer-To-Peer (P2P) Piracy on University Campuses: A Progress Update, Hearing, Subcommittee on Courts, the Internet, and Intellectual Property, U.S. House of Representatives Judiciary Committee, September 22, 2005.

• Peer-To-Peer Piracy on University Campuses: An Update, Hearing, Subcommittee on Courts, the Internet, and Intellectual Property, U.S. House of Representatives Judiciary Committee, October 5, 2004.

• Peer-to-Peer Piracy on University Campuses, Hearing, Subcommittee on Courts, the Internet, and Intellectual Property, U.S. House of Representatives Judiciary Committee, February 26, 2003.

Copyright on the College Campus • P-2-P and College Campuses: An Update -- Piracy on

University Networks, Hearing, Subcommittee on Courts, the Internet, and Intellectual Property, Committee on the Judiciary, U.S. House of Representatives, 110th Congress, 1st Session, March 8, 2007: “The RIAA released a list of top 25 schools that received the most music theft complaints, Upon the dubious distinction of receiving first place on the RIAA’s list, Ohio University stiffened its policy and now refers students to the campus policy on the first offense [UW-Madison is 10th and UW-Eau Claire is 14th]…Perhaps the most ironic issue is that many universities expect others to respect and protect their intellectual property rights to scholarly works and inventions but seem to disregard or close their eyes to the theft of the creative works of others.” Id. at 2-3 (statement of Representative Berman).

Copyright and Related Issues • H.R. 4137, The College Opportunity and Affordability

Act, Section 488 amends 20 U.S.C. § 1092(a) (financial aid program obligations) to include disclosure of “institutional policies and sanctions related to copyright infringement.”

• Notice: “annual disclosure” to students that unauthorized distribution of copyrighted material, including P-2-P may subject students to liability, and the applicable penalties.

• Policies (and notice of): P-2-P and other copyright policies including “sanctions that are taken against students who engage in unauthorized distribution of copyrighted materials.”

• Monitoring?: “a description of actions that the institution takes to prevent and detect unauthorized distribution of copyrighted material on the institution’s information technology system.”

Reform of 17 U.S.C. §108!!! • THE SECTION 108 STUDY GROUP REPORT

(March, 2007), recommendations: – Museums should be included with libraries and

archives.– Additional qualifications to subsection (a): public

service mission, trained staff, professional services, lawfully made or licensed collections (if any item in the library is not lawfully made the exemption is lost, as opposed to the privilege with respect to that work and as opposed to a item that is infringing . . . this could be very limiting!).

Reform of 17 U.S.C. §108 • THE SECTION 108 STUDY GROUP REPORT

(March, 2007), recommendations: – Provision should apply to outsourcers if no other

commercial benefit, contracts prohibits retention of copies and owners retain “meaningful ability” to obtain redress from outsource entity, e.g., jurisdiction issues.

– Replacement copying under subsection (c): as many copies as is reasonably necessary, add “fragile” category, replace “unused copy” with “usable” copy, allow off-site lending of physical-digital if that was the original format of the item, and licensing can qualify as “obtainable” (case by case basis).

Reform of 17 U.S.C. §108 • THE SECTION 108 STUDY GROUP REPORT

(March, 2007), recommendations: – Preservation copying under subsection (b): as many

copies as is reasonably necessary, reasonable number of deposit institutions, clarify that institution that receives a deposit of a copy made under 108 cannot apply 108 to use of that copy, allow off-site lending of physical-digital if that was the original format of the item, and licensing can qualify as “obtainable” (case by case basis).

Reform of 17 U.S.C. §108 • THE SECTION 108 STUDY GROUP REPORT

(March, 2007), recommendations: – Preservation copying should apply to published works:

as many copies as is reasonably necessary, best practices, restrict access, labeled, additional technical and administrative requirements.

– Internet archiving allowed (“publicly available online content” not protected by password or “requiring an affirmative act by the user to access” would likely exclude content subject to EULAs), on-premise access only, remote after passage of time, opt-out for owners, no harm to website, label, limited to private study, scholarship and research.

Reform of 17 U.S.C. §108 • THE SECTION 108 STUDY GROUP REPORT

(March, 2007), recommendations: – Television news exception to allow streaming of

view-only copies.– Patron equipment copying subject to subsection (f)

(1) immunity, expanded use of notices (posting).– ILL: limited number of copies as is reasonably

necessary, additional adequate protections for digital copies (but no consensus on use of technological protection measures, no retention for collection, patron makes request through home library not to lending library directly.

Reform of 17 U.S.C. §108 • THE SECTION 108 STUDY GROUP REPORT

(March, 2007), unresolved issues: – Subsection (i) exclusions, more study is needed

(adversely affect the market, embedded works issues).

– Virtual only libraries.– Performance rights issues.– Override of contract terms and conditions.– Override or align section 1201 issues (see below).– Preemption issues with pre-1972 sound recordings.

Reform of 17 U.S.C. §108• Good News! Museums are in, outsourcing allowed,

flexible number of copy rules, “fragile” works qualify for preservation copying even if published, internet archiving allowed.

• Questions! Impact of the lawfully made obligation?• Concerns! Physical-digital distribution allowed but still

no off-premise distributions (limits the usefulness of digitization projects), and licensing as an option in replacement copying.

• Next Steps: Caution!!! What language might Congress add, e.g., ILL and technical protection measures, other obligations throughout???

Technical Protection Measures • Primary liability separate from copyright:

– Prohibits circumvention of technological measures that control access, 17 U.S.C. § 1201(a)(1),

– Prohibits distribution (trafficking) of technologies that control access, 17 U.S.C. § 1201(a)(2),

– Prohibits distribution (trafficking) of protection technologies that control specific uses of a work, so called “black-box” devices, 17 U.S.C. § 1201(b).

• “Trafficking” defined: primarily designed to circumvent, or limited commercially significant purpose, or marketed as an anti-circumvention device.

• “Control” defined: In-place by owner, no corruption and no distortion of work.

TPMS Bad News: (case law)• Strict (harsh) interpretation by the courts: Sony Corp. of

America, Inc. v. Universal City Studios, 464 U.S. 417 (1984), “space shift” analogy rejected.

• Strict (harsh) interpretation by the courts: limited fair use is still fair use. The lessons of Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001) (“De”CSS for DVDs); and U.S. v. Elcom Ltd., 203 F.Supp. 2d 1111 (N.D. Cal. 2002) ( Adobe e-book reader).

• Strict (harsh) interpretation by the courts: free speech defense also unsuccessful.

• Posting and linking (automatic download and limited site content) is trafficking.

TPMs: Regulatory Adjustment • 17 U.S.C. § 1201(a)(1)(D): 3 year cycle of rule-making.

– De novo review.

– Statutory Standard: “noninfringing uses by persons who are users of a copyrighted work are, or are likely to be, adversely affected”

– New Regulatory Standard: “the Register has concluded that in certain circumstances, it will also be permissible to refine the description of a class of works by reference to the type of user who may take advantage of the exemption or by reference to the type of use of the work that may be made pursuant to the exemption… must be properly tailored not only to address the harm demonstrated, but also to limit the adverse consequences that may result from the creation of an exempted class.” 71 Fed. Reg. 68472, 68473 (November 27, 2006).

TPMs: Regulatory Adjustment • The six classes of works under current exemption: 37

C.F.R. §201.40 (2006).• “Computer programs protected by dongles that prevent

access due to malfunction or damage and which are obsolete.” [Same, definition of obsolete added.]

• “Audiovisual works included in the educational library of a college or university’s film or media studies department, when circumvention is accomplished for the purpose of making compilations of portions of those works for educational use in the classroom by media studies or film professors.” [New category!.]

• Library preservation of “computer programs and video games distributed in formats that have become obsolete.”

TPMs: Regulatory Adjustment • The six classes of works under current exemption: 37

C.F.R. §201.40 (2006).• Literary works in ebook format when all existing ebook

editions contain access controls that prevent use by the disabled (read-aloud function or specialized format screen readers). [Same.]

• Firmware that prevents a wireless telephone handsets from connecting to a wireless telephone communication network. [New category!]

• Sound recordings in compact disc format protected by access controls … solely for the purpose of good faith testing, investigating, or correcting such security flaws or vulnerabilities. [New.]

TPMs: Legislative Reform

• H.R. 1201, the Freedom and Innovation Revitalizing U.S. Entrepreneurship Act of 2007 (FAIR USE Act of 2007), 110th CONGRESS, 1st Session (February 27, 2007).

• Clever name but the bill does not actually amend section 107, the fair use provision!

• Four main areas: damage remission, immunity, codification of 37 C.F.R. § 201.40 (2006), and six new exemptions to the anti-circumvention rules (section 1201(a)(1)).

TPMs: Legislative Reform • SECTION 2(a). Mandatory (“shall”) remission

of statutory damages in all instances of secondary infringement (contributory or vicarious), as long as infringement occurred with reasonable belief that the conduct was not infringing (“done under circumstances in which no reasonable person could have believed such conduct to be lawful”).

• Misalignment with Section 401 and 402 “except” clause, if enacted the preservation of damage remission for nonprofits will be eliminated!

TPMs: Legislative Reform • SECTION 2(b), amending section 501. Immunity

(“no person shall be liable”) for infringement based on “the design, manufacture, or distribution of a hardware device or of a component of the device” when the device is “capable of substantial, commercially significant noninfringing use.”– Narrow reading: preserves (codifies) the staple article

of commerce doctrine adopted by the Supreme Court in Sony Corp. of America, Inc. v. Universal City Studios, 464 U.S. 417, 442 (1984).

TPMs: Legislative Reform • Section 3(a), adding new section 1201(a)(1)(F),

codifying “the 6 classes of copyrighted works set forth in the determination of the Librarian of Congress …” in 37 C.F.R. § 201.40 (2006).

• Section 3(a), adding new section 1201(a)(1)(G)(i)-(vi), creating six new categories of exemptions.– Expands the film compilation exemption from the regulation

to include any educational use by any instructor. Source is now library or archive instead of film or media studies department, but still no exemption for student use!

– Skipping of advertising or other offensive material? This is a use control not an access control. Circumvention of a use control is not prohibited under current law! But trafficking in the control is!!!

TPMs: Legislative Reform • Section 3(a), adding new section 1201(a)(1)(G)(i)-(vi),

creating six new categories of exemptions. – Transmissions over a home or personal network, but no

“uploading of the work to the Internet for mass, indiscriminate redistribution? This is a use control (a display or possibly a distribution under the copyright law), but since neither would be a public display or public distribution such act would not even implicate any of the copyright owner’s exclusive rights under section 106. Again trafficking in the circumvention “device” still prohibited under section 1201(a)(2).

– Access to compilations consisting primarily of public domain works. Why not any public domain work, if not reasonably available elsewhere in that format?

TPMs: Legislative Reform• Section 3(a), adding new section 1201(a)(1)(G)(i)-(vi),

creating six new categories of exemptions. – Access to any work of “substantial public interest” for purposes

of “criticism, comment, news reporting, scholarship, or research.” The work versus its content? What is “substantial”?

– Harmonization of section 108(c) privileges, but excludes works in “obsolete” formats. Section 108 also amended by the DMCA, same law that created section 1201! Intended or unintended? Assumes that a use cannot be made without access. If so, then section 1201 prevents libraries and archives from exercising its section 108 privileges. Also with amendment of section 108 likely, this exemption should be drafted as broadly as possible, e.g., any entity meeting the qualifications of section 108(a). Why not harmonize similar misalignment in section 110 for educators.

Web Archiving and Fair Use • A.V. v. iParadigms, Ltd., 2008 WL 728389 (E.D. Va.

2008) (archiving of student papers in the Turnitin database is a fair use).

• Perfect 10 v. Amazon.com, Inc., 487 F.3d 701 (9th Cir. 2007) (vacating injunction regarding Google’s use of thumbnail images) (Thumbnail reproduction s a fair use: “[w]e must weigh Google’s superseding and commercial uses of thumbnail images against Google’s significant transformative use, as well as the extent to which Google’s search engine promotes the purposes of copyright and serves the interests of the public.” Id. at 722.)

• Field v. Google, Inc., 412 F.Supp.2d 1106 (D. Nev. 2006) (Google caching is a fair use, bad faith as Field “deliberately ignored the protocols,” implied license defense available).

Fair Use and Educational Work

• Illustration (posters) is a fair use: Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006) (“transformative” timeline use of seven artistic concert posters of famous music group Grateful Dead reproduced, reduced in size and distributed with others throughout biographical book (Grateful Dead: The Illustrated Trip).

• Criticism if fair use: NXIVM Corp. v. Ross Institute, 364 F.3d 471 (2d Cir. 2004) (“It is plain that, as a general matter, criticisms of a seminar or organization cannot substitute for the seminar or organization itself or hijack its market. If criticisms on defendants’ websites kill the demand for plaintiffs’ service, that is the price that, under the First Amendment, must be paid in the open marketplace for ideas.” Id. at 482.).

Licensing Rights: Recent Case Law• New terms: Douglas v. Talk America, Inc., 495

F.3d 1062, 1065 (9th Cir. 2007). Facts: “Joe Douglas contracted for long distance telephone service with America Online. Talk America subsequently acquired this business from AOL and continued to provide telephone service to AOL’s former customers. Talk America then added four provisions to the service contract: (1) additional service charges; (2) a class action waiver; (3) an arbitration clause; and (4) a choice-of-law provision pointing to New York law.”

Licensing Rights: Recent Case Law• Notification: “Talk America posted the revised

contract on its website but, according to Douglas, it never notified him that the contract had changed. Unaware of the new terms, Douglas continued using Talk America’s services for four years.” 495 F.3d at 1065.

• Burden of Notification: “Even if Douglas had visited the website, he would have had no reason to look at the contract posted there. Parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side. [footnote 1]” 495 F.3d at 1066.

Licensing Rights: Recent Case Law• Footnote 1: “Nor would a party know when to check the

website for possible changes to the contract terms without being notified that the contract has been changed and how. Douglas would have had to check the contract every day for possible changes. Without notice, an examination would be fairly cumbersome, as Douglas would have had to compare every word of the posted contract with his existing contract in order to detect whether it had changed.” 495 F.3d at 1066.

• Ineffective notice of material terms: Suggests that a license clause to the effect: ‘check our website for updated terms and conditions’ or ‘new terms and conditions may posted on our website’ without specific direction to consult may not be sufficient notice.

Licensing Rights: Recent Case Law• Unconscionable terms are against public

policy: “A class action waiver provision thus may be unconscionable in California. Whether it is depends on the facts and circumstances developed during the course of litigation. The district court clearly erred in holding that the clauses (assuming that they are part of the contract at all) are consistent with California policy and therefore enforceable as a matter of law.” Id. at 1068.

• Caution! Not all states have consumer class action provisions.

Licensing Obligations: Concerns• Awareness obligations (informing users).• Reporting obligations: as a precursor to licensor

enforcement.• Monitoring obligations: as a precursor to licensee

intervention or enforcement.• Gag-wrap and related prohibitions: “undertake

any activity that may have a damaging effect on the Licensor’s ability to achieve revenue through selling and marketing the Licensed Material.”

• Copyright privileges (additional rights gained, but at what cost?).

Conclusions . . . The Future• Will access to protected content (copyright and

otherwise) survive in a digital and virtual environment subject to increased use of TPMs and licensing so that concepts such as fair use remain meaningful?

• What is needed: – accommodation of existing practices in the digital and

virtual landscape: (statutory reform of section 108),– prevention of debilitating technologies (statutory or

regulatory reform of TPMs), and – balancing of licensing rights and obligation consistent

with the traditional positioning of the institution.

Questions and Answersnow or later . . .

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THANK YOU!Tomas A. Lipinski

414-229-4908 (W), 414-384-6937 (H)

tlipinsk@uwm.edu© Tomas A. Lipinski (2008)