Why Are Members Of Congress Telling A Private Organization Not To Comment On Copyright Law?

from the seems-sketchy dept

For the past few years, there's been a really bizarre "fight" going on in the copyright world. I had considered writing about it nearly two years ago when it first seemed to flare up, but I had hoped that facts and cooler heads might prevail. Silly me.

This involves a few issues that are fairly deep in the weeds if you're not a lawyer, so I'll try to provide a quick overview of what's happening for non-lawyers. The American Law Institute (ALI) is a non-profit organization which states its mission is to help to "clarify, modernize and otherwise improve the law." Its most well known products are the so-called "Restatements" of various laws. Restatements are, generally speaking, attempts to provide significant additional annotations on the law, based on caselaw. That is, it's a very useful tool for courts to understand how various aspects of the written law have been interpreted by judges before them. They are scholarly works, put together by bringing together large groups of legal experts in a field to work out a very balanced review of how courts have interpreted the law.

Seeing as these are merely effectively annotations on the law, they are, in no way, binding on a court. Instead, they are designed to be useful in helping judges understand the current state of the law. A few years back, ALI decided to put together a Restatement of Copyright Law. It's been a long, slow process. To put it together, ALI has brought together a large and diverse group of copyright lawyers, practitioners, and scholars representing pretty much all sides of the various copyright debates. If you were planning to release a document that was one-sided and "biased" this is not the way you would do that.

Among the people working on the Restatement there are some of the most famous names in copyright scholarship -- many of whom historically have supported a more maximalist interpretation, including David Nimmer, and Jane Ginsburg. Others working on this with a long history of copyright maximalism, include former Copyright Office General Counsels Jacqueline Charlesworth and Sy Damle. You have a bunch of current and former RIAA and MPAA folks, including former RIAA lobbyist and current federal judge Beryl Howell. There's also Michael Fricklas, former General Counsel of Viacom, Michael Kane from Disney, former Warner Bros. and MPAA VP Dean Marks, former RIAA General Counsel Steven Marks, current Senior VP and Associate General Counsel at the MPAA Ben Sheffner, and also Shira Perlmutter, a well known maximalist currently at the USPTO, but previously at the Copyright Office, IFPI, and Time Warner.

In short, there are very few of the big names in copyright maximalism I can think of who aren't among the team tasked with this process.

But it also includes plenty of people with more enlightened views on copyright -- those who recognize that copyright was supposed to be designed to benefit the public first and foremost. Basically, it's a pretty balanced list. In the years since the Restatement has been announced, it's appeared that it's this very balance of those working on the Restatement that has so upset the maximalists. As a whole, they've basically been getting their way with their interpretation and ever-growing expansion of copyright law. Over and over and over again. The idea that anyone who actually recognizes the original intent of copyright law might even weigh in on helping to explain to judges what courts have said is worrisome to them. This is silly. The point of the Restatement is to explain what courts have said. Restatements don't say what the law should be or what anyone hopes it should be. It's very much about highlighting what the caselaw says.

Two years ago, the Copyright Office put out a letter whining about the Restatement process, (despite so many people related to the Copyright Office being on the team putting together the Restatement). At the time, I spoke to someone else on the team who told me that the whole thing was purely a "turf battle," in which the Copyright Office wants the courts to look to it for legal interpretations (generally not something the courts have done), so this is seen as a "competitive" effort. But the bigger issue, honestly, seems to be one factor and one factor only: Hollywood and its friends decided long ago that the public interest has no business in copyright. And this Restatement process even acknowledging those who have worked to remind people that copyright is supposed to be in the public interest is seen as a threat to their views.

But here's where things get insane. The lobbyists for copyright maximalists have now convinced one senator and four members of Congress to pressure the ALI to drop the entire Restatement of Copyright Law project.

In case this is not clear: members of Congress are telling a private organization that it should not give its opinion or analysis on the state of the law. That's fucked up no matter how you look at it. Senator Thom Tillis, and Representatives Ben Cline, Ted Deutch, Martha Roby, and Harley Rouda, have some explaining to do. Using the power of Congress to say that a private organization shouldn't talk about the law is insane.

Even the specifics in the letter are crazy -- and clearly were talking points from lobbyists.

ALI is a respected organization, whose Restatements are often cited as highly persuasive authority in court cases and scholarly works. Traditionally, Restatements have focused almost exclusively on areas of common law because judicial rulings across different jurisdictions may vary and ALI's interpretation are predisposed to assembly, analysis, and summaries.

By contrast, laws created through federal statute, including federal copyright law, are ill-suited for treatment in a Restatement because the law is clearly articulated by Congress in both the statute and legislative history. In creating legislation, Congress develops legislative history through hearing testimony and Committee Reports. Legislation is then expertly interpreted by agencies charged with that authority by Congress -- such as the U.S. Copyright Office and U.S. Patent and Trademark Office. The ALI has long recognized that federal statutes do not require a Restatement and are not an appropriate platform to effect changes in federal law.

This is misleading on nearly every level. First, while copyright law currently comes via federal statute, large chunks of that federal statute developed via common law rulings that determined the basic shape of the law, which was eventually codified by Congress. This includes, most notably, the entire concept of fair use, which was a common law idea. Other areas of copyright that were developed through common law include things like copyright on sound recordings, public performance copyrights, rights of first sale, the idea/expression dichotomy, scenes-a-faire, the idea of "de minimis" copying not being infringing, etc. In short, much of what we know of as statutory copyright came about because of common law interpretations of copyright.

Second, if you've paid any attention to the caselaw over the past forty or so years of copyright, basically from the Sony Betamax case forward, there have been all sorts of areas of copyright law that have required judicial interpretation of the law. And that's exactly what a Restatement is useful in dealing with. Just to take one (of many!) examples, the Blurred Lines case has shaken up copyright law tremendously over the past couple of years, based entirely upon the court's interpretation of the law. And, as we speak, the 9th Circuit is considering what framework to use when determining if a similar song is infringing. These are exactly the kind of things a Restatement is useful in dealing with.

Third, and most importantly, if Congress feels that a court -- or the Restatement -- has gotten something really wrong, it has the power to revise the law. So it's unclear why these elected officials feel so threatened by someone highlighting how various courts have ruled -- especially given the incredibly balanced nature of the group tasked with putting together the Restatement.

These elected officials seem bizarrely worried that courts will somehow rely on the Restatement too much, despite little evidence that this would ever be an issue (and separately, I find it amusing that they keep pointing to legislative history, when various Constitutionalists insist that legislative history is meaningless in interpreting the statute, but I digress).

Throughout its almost 100 years of existence, the ALI has never chosen to draft a Restatement of an area of law that is almost exclusively statutory law -- until now. We are deeply concerned by the ALI's current Copyright Restatement Project. In fact, any Restatement or other treatise relied on by the courts that attempts to diminish the importance of the statutory text or legislative history relating to that text would warrant concern. Courts should rely on that statutory text and legislative history, not Restatements that attempt to replace the statutory language and legislative history established by Congress with novel interpretations.

But then they immediately undermine the point made in the above paragraph:

We also understand that the ALI has come under some scrutiny relating to other controversial projects. The late Justice Antonin Scalia, who was the most frequent author of opinions citing ALI publications in nine opinions, wrote that "modern" Restatements "are of questionable value, and must be used with caution." He added that, "[o]ver time, the Restatements' authors have abandoned the mission of describing the law, and have chosen instead to set forth their aspirations of what the law ought to be." In his dissent in Kansas v. Nebraska, Justice Scalia stated that newer Restatements "should be given no weight whatever as to the current state of the law, and no more weight regarding what the law ought to be than the recommendations of any respected lawyer or scholar."

Lately, many states have also begun to repudiate the more recent and controversial Restatement projects, such as the Insurance Liability Restatement. Arkansas, Michigan, North Dakota, Ohio, Tennessee, and Texas have all recently passed legislation that in some form seeks to curtail, or even condemn, the use of the Insurace Liability Restatement under their respective insurance laws. The Kentucky and Indiana legislatures have also passed resolutions stating their opposition to the Insurance Liability Restatement.

So... all of that completely undermines the entire argument here. It's saying that judges clearly recognize that they are free to ignore or decline to endorse anything in a Restatement, and that legislative bodies (like Congress) are free to clarify if a Restatement gets something wrong. So... why are they so upset that a Restatement is taking place in the first place? If it's no good, judges can and will ignore it. If it gets stuff wrong, Congress has the power to clarify the law.

One other thing that's important here. I mentioned earlier that David Nimmer is one of the people involved in this Restatement. Nimmer is also a co-author (with his father) of Nimmer on Copyright, which is (like the Restatement) an interpretation of copyright law, that is frequently cited and relied upon by courts. Nimmer on Copyright has been cited by over 2,000 court cases. Here's former Director of the US Copyright Office, Maria Pallante waxing poetically on the value of having Nimmer on Copyright around to rely on:

What would the Nimmer of 1963 do with red flag knowledge or orphan works? What protections would he assign to vidders and bloggers? How would he analyze the application of copyright law to the software in cell phones and car radios? What would he think of the development agenda at WIPO? What would he do with section 115?

Thankfully, through Nimmer the younger, the treatise goes on, building upon the early days and reminding us that the practice of copyright law isn't only exciting but difficult. It isn't about what we know, or how quickly we can state it in this age of instant public discussion; rather it's a matter of respect. The more one learns about copyright law the more there is to learn. What better symbol is there of this fact than the enduring legacy of Nimmer on Copyright?

Notably, approximately 30 seconds after the elected officials sent the letter discussed above, the very same Maria Pallante, who now heads the Association of American Publishers, a lobbying trade group representing legacy publishers pushing for ever more maximalist copyright, put out a press release cheering on the Congressional letter. Suddenly, Pallante's love and affection for an effort to interpret copyright law has gone away when it's not managed entirely by the Nimmer clan.

“We strongly commend Senator Tillis and Representatives Cline, Deutch, Roby, and Rouda for their powerful letter raising serious concerns about ALI’s Copyright Restatement Project. For more than 200 years U.S. copyright law has served as a crucial incentive to publishers, authors, composers, and countless other artists, enabling the creation and dissemination of works that improve our lives, enhance our culture, and drive an economic engine that delivers $1.3 trillion in annual value to U.S. GDP. The ALI’s attempt to reinterpret this critically important federal statute should be seen for what it is: a back door effort to circumvent the authority of Congress and undermine the copyright system that fuels our creative economy."

When Nimmer does the exact same thing by himself, it's "reminding us that the practice of copyright law isn't only exciting but difficult" and to be celebrated. When a diverse group of scholars -- including Nimmer -- work on the very same thing, it's "a back door effort to circumvent the authority of Congress and undermine the copyright system that fuels our creative economy." Yeah, sure, Maria. That's convincing.

The Tillis et al. letter then issues a list of 9 questions it demands that ALI respond to. Hilariously, despite the wide variety of perspectives included among the panel working on this, (and the lack of any such balance in nearly all previous efforts on copyright), these elected officials claim they want to know what ALI has done to stop "bias" and "potential conflicts of interest." Did these same elected officials worry about "conflicts of interest" in the past regarding copyright -- which has almost exclusively been twisted and expanded due to the wishes of Hollywood and its friends? No? Why is it only now, on a non-binding, series of commentary from a private organization, commenting on copyright law, that Congress is "worried" about "bias" and "conflicts of interest?"

There's no need to answer. We already know.

Filed Under: ben cline, caselaw, common law, congress, copyright, david nimmer, harley rouda, martha roby, opinions, restatement of copyright, ted deutch, thom tillis
Companies: ali

Section 230 Is Not Exceptional, It Is Not Unique, It Is Not A Gift: It's The Codification Of Common Law Liability Principles

from the get-it-straight dept

There are so many myths about Section 230 that seem to need debunking. There's the myth that it requires platforms to be neutral. There's the myth that if you moderate too much you "lose" your status as a "platform." There's the myth that Section 230 of the CDA was "a gift" to big tech. None of those are true, and we've gone into great detail over the past few years about how Section 230 is designed to encourage the most "good" content, and discourage the most "bad" content. It's designed as a pretty straightforward balance, and it actually does a pretty good job of that.

However, along with the claims that 230 is a "gift" to tech companies, is the unfortunate similar myth that 230 is somehow "exceptional" or that it treats internet companies "different than any other company." This has never been true. Instead, it's really about properly applying liability to the party actually violating the law, rather than putting the blame on the tools and services they use to violate the law. Brent Skorup and Jennifer Huddleston at the Mercatus Center have now put out an interesting paper, highlighting how -- far from being a "unique gift" to internet companies -- Section 230 was merely the codification of basic common law principles regarding liability.

The paper carefully traces the history of liability in common law, finding that for decades preceding Section 230, the general common law principles had converged on a concept of "conduit liability," which is more or less what we see in Section 230: you don't blame the "conduit" for merely passing along the message.

As shown above, even before the creation of Section 230, many courts had shifted from the strict liability regime toward conduit liability protections and fault-based requirements. In many circumstances, liability would not have attached even if the distributor had known of the tortious material, because the social and judicial norms favoring practicable moderation practices and free speech had eroded the traditional liability standards. Section 230, in effect, codified the conduit liability protection that was being applied to traditional media distributors and was sometimes applied even after 1996.

As one federal district court noted in 1994, conduit liability “[p]rotection for republication . . . has not been rigorously circumscribed within the wire service context.” In its 1999 Lunney v. Prodigy decision, the highest court in New York expressly classified an internet bulletin board operator as a common-law conduit. An internet service provider and bulletin board operator, the court held, “like a telephone operator, is merely a conduit.” It made no difference to the court, and the “conduit designation” was still applied, even when the bulletin board operator “reserves for itself broad editorial discretion to screen its bulletin board messages” and occasionally exercises that discretion. The court explained that even if Prodigy “exercised the power to exclude certain vulgarities from the text of certain [bulletin board] messages, this would not alter its passive character in the millions of other messages in whose transmission it did not participate, nor would this, in our opinion, compel it to guarantee the content of those myriad messages.”

This doesn't mean, however, that Section 230 serves no purpose. Having 230 the way it is provides significant procedural benefits, in the form of having cases kicked out of court quickly, before they become too expensive. Without that, many of these cases, even though they would ultimately be unsuccessful if the court were able to decide, would be prohibitively expensive for internet platforms, creating, in effect, a censorship-by-lawsuit system. While we discussed that (link above) in a previous paper, the authors of this paper actually put dollar amounts on it:

Still, Section 230 had a salutary effect at a critical time. A report by Engine estimated that without Section 230, the costs of litigation might be prohibitive for many startups even if they might win the case.155 According to the in-house and external attorneys consulted for the report, having to respond to a user-generated content liability claim through a motion to dismiss could cost $15,000 to $80,000, and having to take such a case through discovery could cost a firm $100,000 to more than half a million dollars.

On top of that, Section 230 took away the uncertainty that some random judge might buck the trend -- as happened in the infamous Stratton Oakmont case:

As Ardia points out, the statutory protection provided a “breathing space” and legal certainty after Stratton Oakmont when online providers made decisions regarding third-party content. Stratton Oakmont derailed the legal trend represented by Cubby and the conduit liability cases. A period of uncertainty—and massive “collateral censorship”—would have ensued because online providers do not know in advance where their users are located. Any provider with users in New York would have been potentially subject to liability for users’ posts under the Stratton Oakmont decision. Section 230 precluded that turn of events.

However, the idea that Section 230 is somehow "exceptional" or provides some rare gift that would not otherwise exist is not supported by the history laid out in this paper. Conduit liability -- protecting the conduit for passing on such information -- was (as the paper lays out in great detail) very much the consensus view among courts, thereby making it the accepted common law, even prior to 230.

Finally the paper notes (as have we) that killing Section 230 will harm competition against the big internet companies at a time when we clearly need more competition:

In summary, Section 230 provides a blanket liability shield for big and small firms. Change that cuts down the liability protection will thus impose compliance costs on all firms. Such change should be explicit about those social costs and also explicit about the advantage it will grant larger firms that have the resources to become compliant. In other words, going from a blanket to a tailored shield, however well intended, must account for the chilling effect it will have on innovation by startups and small firms, and for the artificial barrier to entry in the market that will grant additional protection to incumbent firms.

Either way, as the paper concludes, Section 230 merely was codifying basic common law principles of liability:

The Section 230 reform movement is growing, and many of the reform arguments complain that online intermediaries receive a special dispensation regarding publisher liability. The truth is more complicated. Starting in 1931 and for six subsequent decades, courts gradually chipped away the regime of strict liability for publishers and content distributors owing to the practical difficulties of screening all tortious content and to the potential for restricting First Amendment rights. Those courts found that mass media distributors warranted extensive liability protections, including an important protection for conduit liability. The anomalous 1995 Stratton Oakmont decision risked reversing that legal precedent. Yet Congress solved the dissonance by enacting a law that affirmed the precedent and its rationales—the impracticality of holding online content distributors liable and the potential violations of freedom of speech that would ensue from strict liability. Section 230 established a regime of liability protection for online content distributors just when it was needed—at the time internet firms had started to reach audiences of tens of millions—and still provides liability protection for large and small distributors alike. For all the foregoing reasons, we have argued that Section 230 is good policy.

I will note that the authors do make a few suggestions on ways they think Section 230 could be amended in a few specific cases, though they note that the situations where that makes sense should be narrow and well-defined. An interesting read all around.

Filed Under: cda 230, common law, conduit liability, intermediary liability, liability, section 230

Pretty Much Everyone Sues Sirius XM Over Copyright Issues On Pre-1972 Recordings

from the it's-a-pile-on dept

Over the past few years we've covered a number of stories having to do with the copyright status of pre-1972 recordings. Because of a bit of a quirk in copyright law, sound recordings weren't actually covered by federal copyright law in the US until after 1972. Instead, they were covered by a ridiculous patchwork of state laws -- which is one reason why old songs that would have been in the public domain (even under today's laws) had they been any other form of content, will be locked up for much, much longer. As you might imagine, some of those who hold the copyrights on those older songs have been trying to leverage this in somewhat ridiculous ways, such as arguing that the DMCA safe harbors don't apply to pre-1972 songs.

In the last month and a half or so, it appears that everyone who holds a copyright on pre-1972 recordings has picked a new target: satellite radio giant Sirius-XM. You see, pretty much everyone has assumed for years (with good reason) that the statutory rates set by the Copyright Royalty Board for Sirius XM to pay SoundExchange naturally applied to all copyright-covered music. After all, once you can get past the ridiculous idea that three old judges get to decide how much satellite radio companies have to pay to play music, you'd at least think that the rules applied across the board.

Except, someone recently remembered those pre-1972 recordings. It started back in August, when lawyers for Flo & Eddie, of The Turtles, suddenly started demanding tremendous amounts of money from Sirius. That resulted in a "class action" lawsuit, seeking $100 million, being filed in California. But why stop with California when there are 49 other states? The same lawyers have followed the same basic lawsuit in other states as well. These, apparently, followed a tremendously obnoxious "PLEASE GOVERN YOURSELF ACCORDINGLY" letter.

Sensing an opportunity it was missing to suck up even more money, SoundExchange jumped into the fray with its own lawsuit. Now, SoundExchange is the organization which Sirius XM already pays all those statutory rate moneys to... and has for years... but it's arguing that Sirius XM has been trying to avoid paying even the statutory rates on pre-1972 recordings, and that it's done so for years, despite the CRB being clear that it does need to pay up.

Of course, this raises some interesting questions. If Sirius XM really has been not paying SoundExchange for pre-1972 recordings and hasn't licensed those recordings from the copyright holders directly, then, um, it might be in serious trouble. If that's the case, it sounds like an astounding strategic error on the part of Sirius XM. While it may have saved them from paying some amount of revenue to SoundExchange (estimated at 10 to 15%), opening themselves up to having to then license each of those works directly is a nightmare. At the very least, if Sirius XM had continued to pay SoundExchange's statutory rates, it would have some sort of argument against the class action lawsuits. However, if it turns out that the satellite broadcaster had tried to avoid paying anyone... that's probably not going to end well.

Sensing blood in the water (of course), all three of the major labels have now jumped in with their own lawsuit over this issue. Basically, it appears that Sirius XM is going to be fighting this battle against multiple players in multiple courts for a long time. Of course, you can bet a lot of this is just posturing over a different dispute. Sirius XM has been actively trying to route around SoundExchange (who it pays a tremendous amount to each year) and do direct licensing deals. In fact, Sirius XM sued SoundExchange for antitrust violations last year, claiming the organization was colluding to stop artists from opting-out of the SoundExchange deal and doing direct licensing deals with Sirius XM.

In other words... these are just the latest in a whole series of legal battles about how to split up the pie, with little regard to actually trying to make the pie bigger. Typical.

Filed Under: common law, copyright, flo & eddie, pre-1972, pre-1972 sound recordings, the turtles
Companies: riaa, sirius xm, soundexchange