ArtsWatch: Supreme Court Clarifies Federal Copyright Jurisdiction

News

Presence of unregistered works in dispute does not deprive federal courts of jurisdiction

Philip Merrill

GRAMMYs

Mar 8, 2010 - 7:46 am

GRAMMY.com

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ GRAMMY.com and sign up for Advocacy Action E-lerts.

On March 2 U.S. Supreme Court Justice Clarence Thomas wrote on behalf of a unanimous court that the presence of unregistered works in a copyright dispute does not deprive federal courts of subject-matter jurisdiction over infringement claims. (link) The underlying dispute relates to the court's 2001 decision that print publishers needed to have an agreement with freelance writers to be entitled to publish electronic versions of their work. In 2005, the writers and publishers reached a settlement agreement that was approved at the U.S. District Court level but struck down by the U.S. Court of Appeals — a ruling this Supreme Court decision now reverses. Although the parties to the class-action settlement all argued that the federal courts had subject-matter jurisdiction, the appeals court denied that a class could include the authors of unregistered works. (link) Both Justice Thomas' opinion and Justice Ruth Bader Ginsburg's concurring opinion pointed to a pattern in lower court rulings that used the term "jurisdictional" too broadly so that it also covered elements of a claim or claim-processing rules.

RealNetworks announced March 3 that it has settled with the DVD Copy Control Association and the MPAA and withdrawn from its much-litigated efforts to sell products that would allow consumers to rip DVDs while preventing redistribution by using digital security on the ripped copies. (link) Under the terms of the settlement, the trial court is to grant a permanent injunction against Real selling products such as RealDVD, Real will reimburse $4.5 million in plaintiffs' legal fees, and it will refund RealDVD's $30 purchase price to the 2,700 customers who bought copies before Real was enjoined from selling it. MPAA General Counsel/Chief Content Protection Officer Daniel Mandil said, "It is illegal to bypass the copyright protections built into DVDs designed to protect movies against theft. We will continue to vigorously pursue companies that attempt to bring these illegal circumvention products and devices to market." (link)

On Feb. 23 the U.S. Intellectual Property Enforcement Coordinator Victoria Angelica Espinel invited comments on the government's development of a "joint strategic plan" to fight piracy. (link) The request's publication in the Federal Register said, "the public is encouraged to submit any detailed concrete recommendation for significantly improving intellectual property rights enforcement." (link) The deadline for comments is March 24. Consumer advocates Public Knowledge expressed concern that the detailed request posed "loaded questions" but praised its emphasis on developing empirical and substantiated data regarding both the costs of piracy and enforcement. (link)

Following up on written comments for the Special 301 trade review, covered in last week's column, (link) the U.S. Trade Representative hosted a public hearing on March 3 attended by an impressive range of speakers. (link) Consumer advocates documented the hearing's progress live on Twitter, and the USTR posted audio of the hearing the next day. (link)

Reuters' Feb. 26 reporting on revenues from online non-interactive streams (link) sparked swift response from some observers that the numbers were too low. (link) A follow-up from digital royalties collection organization SoundExchange said that more than 1,000 artists receive thousands of dollars from these relatively low-revenue streams. (link)

The Senate Judiciary Committee's Subcommittee on Human Rights and the Law held a second hearing on "Global Internet Freedom and the Rule of Law" on March 2. (link) Subcommittee Chairman Sen. Dick Durbin (D-Ill.) criticized Internet companies for failing to protect Net-related human rights and said, "Today I am announcing that I will introduce legislation that would require Internet companies to take reasonable steps to protect human rights or face civil or criminal liability." (link)

In Europe, Microsoft began rolling out a browser-choice screen last week in new versions of Windows, in compliance with its 2009 antitrust settlement with European Commission regulators. (link) Opera Software reported downloads of its browser tripled in many countries and the makers of many obscure Web browsers were grateful for the change and the uptick in demand.

In Britain, non-profit tourism booster Wittdo.org announced March 1 that WeGotTickets is the first ticketing agency to sign up for its live music study, which aims to collect event data and make summaries publicly available for free. (link) WeGotTickets Business Development Director Dave Newton said, "When you consider how other industries rely so heavily on customer data, it's incredible that the live music industry, which has so much readily available, has never undertaken a study of this kind before."

News

ArtsWatch: U.S. Trade Rep's Call To Action

United States seeks international partnerships for tougher IP enforcement

Philip Merrill

GRAMMYs

May 9, 2011 - 7:09 am

GRAMMY.com

On May 2 U.S. Trade Representative Ron Kirk released this year's Special 301 Report listing trading partners with inadequate intellectual property protection. The Priority Watch List features the usual suspects — Canada, China, India, Russia, and eight others — although this year Russia's progress in enacting tougher antipiracy legislation was recognized, as were efforts by Mexico, the Philippines and Spain. In a new development, Kirk called for the listed countries to collaborate on finding a better path ahead — a move made more meaningful in the context of the Anti-Counterfeiting Trade Agreement's plan for sharing international IP enforcement information. "This year's Special 301 Report comes with a call to action for our trading partners," said Kirk. "We are ready to work intensively with you to stop intellectual property theft that threatens IP-related jobs in the United States and other countries. Today's report is a springboard for ambitious and collaborative partnerships in the coming year to strengthen protection for the innovation and creativity that drive jobs and exports for the United States and our partners around the world." Leading U.S. content industry groups were swift to praise this year's report. Consumer advocates Public Knowledge were miffed that the USTR did not specifically respond to any of its many objections — primarily that the Special 301 approach is too strict and coercive — but pledged to remain active in the USTR's public engagement activities.

China announced the formation of the State Internet Information Office on May 4 to serve as a unifying agency for online content management, including new Web regulations, their enforcement and coordinating the work of other agencies. Staff and leadership for the SIIO will be drawn from members of the State Council Information Office serving double duty. Although some government censorship will be administered through the new department, this consolidation of responsibility holds promise for regional business development and the online experience of China's more than 450 million Internet users.

On May 3 European Commission VP for the Digital Agenda Neelie Kroes announced the launch of the Future Internet Public-Private Partnership, a five-year, three-phase program combining $430 million of EC investment with matching funds from 158 organizations and industry partners in 23 European countries. Kroes said, "We have to recognize the fact that the design of the future Internet is not dependent just on the [information and communication technology] industry. They are indeed the ones we rely on for our daily communications, but it is imperative that the requirements of real users, such as the transport community, energy providers, content providers, and local authorities, are taken into account for the definition of an open and standardized framework." The first phase will last two years with nearly $130 million in funding, with the largest investment going to the development of core platform tools and code, and smaller sums ramping up eight case projects. One of these — FI-Content — has "assembled a consortium including major content providers, games companies, hardware vendors, network operators, broadcasters, research institutes, and academia to propose a number of novel and inventive scenarios for new forms of content."

MPAA Chairman/CEO Christopher Dodd addressed the Media Institute's Communications Forum luncheon on May 3 in Washington, D.C., sharing early insights gained after his first seven weeks on the job. In order to improve public perception of the movie industry, the former senator emphasized the need to defeat two popular misconceptions: the "dinosaur" myth and the "red-carpet" myth. Having met with industry leaders and innovators, Dodd was impressed that the film business is embracing the future, evolving to take advantage of new technologies, and claimed "nothing could be further from the truth" regarding the image that Hollywood is ruled by dinosaurs refusing to change with the times. He is also determined to tell the story of the "hard-working middle-class people" holding down jobs in an industry he calls far more blue-collar than most people realize. Dodd prefers the term "looting" to piracy or theft and wants average Americans to understand that pirating movie content hurts millions of working Americans — not just wealthy celebrities. Beginning his upbeat conclusion, Dodd said, "Interestingly, what we have found is that the more screens people own, the more content they want. Content is the constant. It's what keeps people coming back.... And that, my friends, is also why we work so hard to protect our content." He finished on movies' ongoing value as emotionally powerful cultural touchstones that continue their tradition of bringing "people together from every background" to the theater.

On May 4 the House Judiciary Committee's Subcommittee on Intellectual Property, Competition and the Internet held a hearing on the Internet organization ICANN's plans to approve a slew of new generic top-level domains (i.e., .com, .org, etc.). The Recording Academy, the RIAA and many other leading music organizations expressed their concern in January that a multitude of these new Web address suffixes could open the door to malicious conduct by rogue websites and trademark infringers attaching well-known trademarks to new top-level domains.

Richard Franco Montejano, a 29-year-old former member of the Old School Classics "warez" group, pleaded guilty in Los Angeles' U.S. District Court on May 2 to willful copyright infringement. The OSC group engaged in pre-release music piracy from 2002–2007 and two other OSC defendants were sentenced last year to three months in prison followed by two years of supervised release. Montejano will be sentenced in July and faces penalties of up to five years in prison and a $250,000 fine.

News

ArtsWatch: Christopher Dodd Goes To Hollywood

Former senator to lead MPAA as movies confront high-tech and global challenges

Philip Merrill

GRAMMYs

Mar 7, 2011 - 7:29 am

GRAMMY.com

On March 1 the MPAA announced that former Connecticut Senator Christopher Dodd will begin as chairman and CEO on March 17. Speaking to The Hollywood Reporter, Dodd identified digital piracy and access to foreign markets as his main two issues and looked forward to working with studios' leadership to find unified approaches to these and other challenges. Dodd said, "I like the people. I love the issues. I think the digital threat issue is not just a limited issue for the film industry. It is one that cuts across intellectual property. We've got to deal with it. I think market access is going to be a huge issue and challenging. So to be involved in a great set of issues with great people, involved in a great industry, it doesn't get any better than that." With demonstrated expertise as a consensus builder, a strong background in foreign relations, and valuable experience with family and children's issues, Dodd seems a good fit for a job that could benefit the entire entertainment industry, U.S. exports and employment.

The Office of the U.S. Trade Representative released the Special 301 Out-of-Cycle Review of Notorious Markets on Feb. 28, listing 33 prominent worst offenders — in both online and physical markets — and encouraging foreign governments to take effective action. USTR Ron Kirk said, "These notorious markets not only hurt American workers and businesses, but are threats to entrepreneurs and industries around the world." Prominent Internet sites in the report include China's leading search engine Baidu, Sweden's the Pirate Bay and Russian successors to the once-popular Allofmp3.com that rushed to fill its place after it was shut down. RIAA Executive VP of International Neil Turkewitz said, "At present, the overwhelming majority of music downloads are illegal. Governments can effectively promote innovation and competition in both the communications and intellectual property sectors by enhancing responsibility and accountability in the online space, and we hope that this report will help to enhance this accountability.... For new legal online services to succeed, we must ensure that such services do not face unfair competition from unauthorized sources."

On March 1 the House Judiciary Committee's Subcommittee on Intellectual Property, Competition, and the Internet conducted an oversight hearing with testimony from Intellectual Property Enforcement Coordinator Victoria A. Espinel. Exemplifying bipartisan consensus on the importance of IP enforcement, members were eager to receive two upcoming reports from Espinel — the first U.S. government estimate of IP jobs and exports, and a white paper recommending areas where new legislation could improve enforcement. Commenting on the wide-ranging and vigorous questions, Copyright Alliance Executive Director Sandra Aistars said, "[The] discussion signaled that the lawmakers tasked with oversight on this subcommittee have a full grasp of the range of challenges faced by the creative community and other IP-dependent industries."

Sen. Charles E. Schumer (D-N.Y.) is on the campaign trail for the secure Web HTTP protocol — HTTPS. In a Feb. 28 letter, Schumer called on Amazon, Twitter and Yahoo to make HTTPS the automatic first option on their websites to better protect users. During a Feb. 27 press event at a New York coffee shop, the senator explained that the growing number of public locations offering patrons Wi-Fi connections to the Internet combined with the availability of programs such as Firesheep, which allow unsophisticated users to hack WiFi networks, means urgent action is called for to prevent casual Wi-Fi users from falling victim to identity theft. Schumer said, "It is scary how easy it is. Free Wi-Fi networks provide hackers, identity thieves and spammers alike with a smorgasbord of opportunities to steal private user information like passwords, usernames and credit card information."

On March 2 IFPI announced a collaboration between the City of London Police Economic Crime Directorate, MasterCard and Visa to crack down expeditiously on illegal Internet sites wrongfully using credit card payment services for copyright infringement. The services and participating banks are now using newly developed best practices, and details of 24 infringing websites have already been turned over to London police under this program. MasterCard Worldwide Chief Franchise Development Officer Eileen Simon said, "A coalition approach such as this will enable us to prevent our system from being used to carry out this illegal activity and will help protect the livelihoods of artists, legal rights holders and legitimate e-commerce merchants selling properly licensed material."

The Federal Court of Australia on Feb. 25 rejected the Australian Federation Against Copyright Theft's appeal of a court decision last year that had denied the organization's claims against Internet service provider iiNet for copyright infringement on its network. Although unhappy with the loss, AFACT called attention to statements in the ruling that could be useful in future litigation. "While we did not prevail due to the finding of the court on a narrow, technical issue, we did succeed in terms of the court finding in our favor across a range of key issues that we raised," said AFACT Executive Director Neil Gane.

Speaking on the future of copyright late last month at the Queensland University of Technology, World Intellectual Property Organization Director General Francis Gurry suggested new ways to intelligently engage with the advantage digital technology gives to free availability of cultural works. Gurry said, "We need to speak less in terms of piracy and more in terms of the threat to the financial viability of culture in the 21st century, because it is this which is at risk if we do not have an effective, properly balanced copyright policy."

News

ArtsWatch: Ruling: Reinstated

Labels' jury award of $675,000 against consumer file-sharer restored, but for how long?

Philip Merrill

GRAMMYs

Sep 26, 2011 - 10:43 am

GRAMMY.com

On Sept. 16 the First Circuit Court of Appeals vacated last year's U.S. District Court reduction of copyright infringement damages against Joel Tenenbaum from $675,000 to $67,500, criticizing the lower court's application of constitutional law as unnecessary. The case is now remanded back to the lower court judge with encouragement to practice constitutional avoidance and apply a common law remittitur process to propose a smaller award — a proposal that is likely to be rejected and lead to a new trial. The Electronic Frontier Foundation took note of the ruling's observation that "this case raises concerns about application of the Copyright Act that Congress may wish to examine" and that this is the second time a consumer file-sharing judge has encouraged legislators to re-examine statutory damages for consumer infringement. In reaction to the Court of Appeals' decision, defendant Tenenbaum said, "This is obviously more absurd than it was before." The jury that originally awarded the $675,000 to the labels did not consider it absurd, but multiple trials are bound to be frustrating. For example, the RIAA's recent appeal of the other major consumer file-sharing case against Jammie Thomas-Rasset could result in a third trial on the same set of facts.

A defendant sued for infringement by Righthaven and subsequently awarded court costs moved to seize the law firm's intellectual property assets over the weekend of Sept. 17. The firm was ordered to pay $34,045 last month but has not complied. The defendant has since incurred additional fees and is asking for the plaintiff that originally sued him to be held in contempt of court. Unsurprisingly, the firm's opponent in several cases, Electronic Frontier Foundation, viewed this as a copyright bully receiving a justified comeuppance. Separately, EFF called attention to another copyright infringement attorney who inspired an angry judge to describe his actions as "staggering chutzpah." Copyright law's statutory damages were intended to be large enough to deter infringement, so the image of clumsy counsel wielding its threat badly — to pressure quick settlements out of consumers — harms antipiracy efforts.

As published in the Federal Register on Sept. 22, the U.S. Trade Representative requested public comments to provide potential examples for the Special 301 Out-of-Cycle Review of Notorious Markets. Comments are due by Oct. 26. Last year's review was released on Feb. 28 and included physical markets along with a variety of online offenders, including Baidu, the Pirate Bay and Allofmp3.com clones. As explained in the request, "Notorious markets are those where counterfeit or pirated products are prevalent to such a degree that the market exemplifies the problem of marketplaces that deal in infringing goods and help sustain global piracy and counterfeiting." Although the list can be considered to provide targets for possible antipiracy enforcement, inclusion on the list does not represent an actual finding of illegality nor a formal federal analysis that enforcement is inadequate in a market's nation of origin.

Google Executive Chairman Eric Schmidt defended the company's competitive practices before the Senate Judiciary Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights on Sept. 21. While he got into a few verbal tangles with senators, the general consensus of news coverage was that Schmidt's testimony was free of flubs. Google has secured dominance in the search engine market and is continuously exploring other avenues of Internet business, with major investment capital at its disposal for acquisitions. Questions of fairness are bound to continue, whether in public or behind the regulatory scenes. Having led Google until recently as its CEO, Schmidt could find himself just as busy in his current position — protecting the company's flanks from unwanted regulation and ensuring Google makes timely adjustments to impress politicians and consumers that it is a "good" corporate giant.

Wireless microphone operators are among those encouraged to participate in a trial of Spectrum Bridge's TV White Spaces Database System. The trial began on Sept. 19 and will continue through Nov. 2. The Federal Communications Commission's announcement read, "During this trial, participants are encouraged to test the channel availability calculator; the cable headend and broadcast auxiliary temporary receive site registration utilities; and the wireless microphone registration utility to ensure that each of these elements of the database system is working properly and providing the interference protection required under our rules."

MP3.com founder Michael Robertson has launched a digital audio recorder for radio at DAR.fm. Similar to a DVR for radio, recorded programming can be downloaded and stored at his MP3tunes music locker service. "It's hard to imagine that the record labels are going to be excited about this," he said.

On Sept. 14 at the UK annual meeting of the Entertainment Retailers Association, the organization's Chairman Paul Quirk bemoaned the slow pace at which Britain's Digital Economy Act is moving toward actual enforcement. Quirk said, "The best information we have is that the first letters to suspected file-sharers will not be sent out until the second half of 2012 and disconnections of persistent pirates will not happen before 2013...This is unacceptable. We need action on Internet piracy and we need it now."

News

ArtsWatch: Rhetoric Flares In Net Neutrality Battle

Verbal firestorms heat up as FCC considers tougher regs for Internet transmission

Philip Merrill

GRAMMYs

Jun 21, 2010 - 10:56 am

GRAMMY.com

As expected on June 17 the Federal Communications Commission adopted a Notice of Inquiry regarding reclassification of broadband Internet transmissions under a stricter regulatory regime, soliciting public comments by July 15. Both Republican commissioners dissented. Commissioner Robert M. McDowell expressed concern that the proposal has already "caused harm in the marketplace," endangers 1.5 million jobs and "will be litigated in court for years." That's the calm take. Rep. Marsha Blackburn (R-Tenn.) said, "This is a bureaucratic overreach of the first order. I am confident that my colleagues and I will act to overturn it." Rep. Fred Upton (R-Mich.) went further when he called it a "blind power grab" and said, "the commission now inexplicably appears poised on Thursday to take another misguided leap toward its investment-suffocating attempt to regulate broadband providers as common carriers." Policy organization Netcompetition.org Chairman Scott Cleland stated the common opinion of many observers when he provocatively said, "Make no mistake, Google is the special-interest power behind the curtain pulling the strings here. This veiled FCC proposal is conveniently on path to deliver all the special regulatory favors Google has been seeking from the FCC in one rush-order, gift-wrapped package." Arguably the Democratic commissioners are not helping to calm tensions by characterizing the opposition's anger as a corporate-sponsored outcry. Commissioner Michael J. Copps said, "beware of all the slick PR you hear, and remember that much of it is coming from lavishly funded corporate interests..." Commissioner Mignon L. Clyburn said, "If it were up to big business, the FCC would never get the opinion of consumers." In short, a war of words that is bound to continue. The challenge at the heart of the matter is how to define reasonable network management practices that will allow the virtues of Net neutrality to continue without stifling either the needs of network operators or innovative applications that require time-sensitive delivery of their data.

Efforts to open commodity trading on movie futures have been moving forward steadily with the latest favorable ruling by the Commodity Futures Trading Commission on June 14 and another ruling anticipated on June 28. Meanwhile, the MPAA is leading a coalition of industry organizations opposed to the practice and rooting for language against it that was introduced by Sen. Blanche Lincoln (D-Ark.) into the financial reform bill that passed the Senate. MPAA President/Interim CEO Bob Pisano said, "It is unfortunate that the CFTC has now given the go-ahead to a new gambling platform that could be plagued by financial irregularities and manipulation.... We support banning them as the Senate bill does, and hope that the final bill approved by Congress and signed by President Obama retains the prohibition."

Embattled file-sharing service LimeWire is expected to respond as early as today to arguments that the site should be shut down — appearing before New York's U.S. District Court Judge Kimba Wood, who ruled in favor of the RIAA's summary judgment motion against LimeWire last month. On June 16 eight major music publishers filed a related suit in the same court. National Music Publishers' Association President/CEO David Israelite said, "The current suit from the music labels doesn't represent the publishers' interests to the extent there are damages. We have to file this so the publishers can be compensated for the massive theft that has gone on for years...we need to be at the table for any discussions about the future."

The Electronic Frontier Foundation published a list of attorneys on June 11 willing to represent the thousands of defendants sued for online movie infringement by the law firm behind SaveCinema.org. Cnet News profiled one defense firm that guarantees its $249 price tag based on its ability to negotiate a settlement reduced by at least that amount. This unprecedented application of copyright law will continue to draw interest as some defendants refuse to pay up to a few thousand dollars in settlement and their cases go to trial.

On June 14 a six-month plan to develop a digital public media platform was announced, funded by a $1 million grant from the Corporation for Public Broadcasting to be administered by NPR. Other participants include American Public Media, PBS, Public Radio Exchange, Public Radio International, and the membership of a diverse advisory council. The digital distribution platform is intended to provide a backbone for innovative ways to pool and share public media, including blogs and mobile apps.

The Solomon R. Guggenheim Foundation and Museum has launched an international online video competition in conjunction with YouTube and Hewlett-Packard to identify up to 20 outstanding video artworks of less than 10 minutes in length apiece, to be exhibited at an Oct. 21 event and online. Guggenheim Foundation Director Richard Armstrong said, "The Guggenheim, YouTube and HP share a view that creative online video is one of the most compelling and innovative opportunities for personal expression today." The submission deadline is July 31. A group of 200 semifinalist entries will be judged by an expert jury including filmmakers, artists, musicians, and designers.

U.S. Intellectual Property Enforcement Coordinator Victoria Espinel is scheduled to testify before a Senate Judiciary Committee oversight hearing on June 23. As the first oversight hearing for this recently created position, the event is a genuine landmark in the history of U.S. intellectual property law enforcement.