COPYRIGHT POLICY, 

CREATIVITY, AND 

INNOVATION IN THE 

DIGITAL ECONOMY

THE DEPARTMENT OF COMMERCE

INTERNET POLICY TASK FORCE

July 2013

Copyright law in the United States is founded on the Constitutional goal of 

“promot[ing] the Progress of Science and useful Arts” by providing exclusive rights to 

creators. Protection by copyright law gives creators incentives to produce new works 

and distribute them to the public. In doing so, the law strikes a number of important 

balances in delineating what can be protected and what cannot, determining what uses 

are permitted without a license, and establishing appropriate enforcement mechanisms 

to combat piracy, so that all stakeholders benefit from the protection afforded by 

copyright. 

A 2012 Commerce Department economic study showed that intellectual-propertyintensive industries account for tens of millions of jobs and several trillion dollars of 

our GDP. Among these, copyright-intensive industries contributed 5.1 million jobs and 

grew by 46.3 percent between 1990 and 2011, outpacing other IP-intensive industries 

as well non-IP-intensive ones. This vital contribution is a tribute to the Founders’ 

vision in providing for the protection of creative works.

The reasons to protect creative works go well beyond the economic benefit. America’s 

writers, musicians, filmmakers, photographers, sculptors and other creators make up 

the lifeblood of our culture, build new stores of knowledge, and shape how we see 

ourselves—and how the world sees us as well. Their influence extends beyond our 

borders; our copyrighted works weave a compelling narrative of the opportunity and 

possibility of America, and continue to be at the forefront of the global creative 

marketplace. We must continue to nurture such extraordinary creative resources. 

The goals of our national copyright policy and our global Internet policies can and 

should work in tandem. United States Internet policy has avoided fragmented and 

prescriptive rules that frustrate innovation and undermine consumer trust. The 

United States, in collaboration with other stakeholders around the world, supports a 

model of Internet governance that facilitates transparency, promotes cooperation, and 

strengthens multistakeholder governance, allowing innovation to flourish while 

building trust and protecting other important rights and interests. Although copyright 

laws are territorial and U.S. copyright policy is designed to fit circumstances in the 

United States, online distribution and debates are global. The United States can 

demonstrate that our copyright framework provides strong and effective protection, 

balanced by exceptions that enable uses of copyrighted works in the public interest 

and supported by appropriate enforcement mechanisms in the digital environment, 

while it safeguards cybersecurity, privacy, and freedom of expression. 

In April 2010, then-Secretary of Commerce Gary Locke launched the Internet Policy 

Task Force (IPTF), which brings together the technical, policy, trade, economic, and 

legal expertise of many Commerce bureaus, including the United States Patent and 

Trademark Office (USPTO), the National Telecommunications and Information 

Administration (NTIA), the International Trade Administration (ITA), the National 

Institute of Standards and Technology (NIST), and the Economic and Statistics 

Administration (ESA). Together, these bureaus have worked in the IPTF to identify 

leading public policy and operational challenges in the digital economy. In turn, the 

IPTF has developed approaches to strengthen protections for consumer data privacy, 

enhance cybersecurity practices, safeguard the global free flow of information, and 
ii

ensure balanced and meaningful protection for intellectual property while preserving 

the dynamic innovation and growth that have made the Internet and digital technology 

so important to our economy and society. The paper that follows is the latest result of 

these cross-agency and multistakeholder discussions.

Each of the bureaus of the IPTF offers an important institutional perspective in 

examining the impact of intellectual property on the U.S. economy. USPTO, as the 

principal advisor to the President on intellectual property policy, has played an 

important role in the formulation of copyright policy for the Internet for over two 

decades. NTIA, in its role as principal advisor to the President on telecommunications 

and information policies, has worked closely with stakeholders and other parts of 

government on the full range of online innovation issues. ITA plays an important role 

both in promoting the importance of intellectual property protection to U.S. consumers 

and businesses domestically and internationally, and in protecting the flow of data 

across borders as an instrument of international commerce. ESA provides the rigorous 

economic understanding of the impact that copyright has on the U.S. economy. And 

NIST’s work on standards generates the basic research that often results in productive 

uses for intellectual property and benefits to consumers and offers a proven model of 

multistakeholder governance.

Ensuring that copyright policy provides strong incentives for creativity, while 

promoting innovation in the digital economy, is a critical and challenging task. In 

developing this paper, the IPTF led by PTO and NTIA held more than a dozen listening 

sessions with interested stakeholders, convened a symposium, received hundreds of 

public comments, and submitted comments to other agencies on relevant topics. This 

input has been invaluable to the thinking of the IPTF, and I look forward to the 

continued involvement of all stakeholders as discussion moves forward. As the Nation 

embarks on a fresh debate about how best to strike the copyright balance, this Green 

Paper is an important contribution. 

Penny Pritzker
iii

Copyright protection is a foundation for creative services and products that help to 

drive much of the U.S. economy. Creative works protected by copyright also enrich our 

culture and lives in unquantifiable ways. Digital distribution and a proliferation of 

consumer-friendly devices have given American consumers more choices than ever in 

how they access and enjoy copyrighted works. 

Copyright law has always adapted to technological change, from its origin in response 

to the development of the printing press, through the revolution of broadcasting via 

radio and television, and now the transformation of creative works into digital formats 

available all over the world via the Internet. In 1998, Congress amended the Copyright 

Act to address issues raised by a rapidly developing Internet by updating rights, 

exceptions, and enforcement mechanisms through the Digital Millennium Copyright 

Act (DMCA). Fifteen years after the DMCA’s passage, we face a renewed challenge to 

assure that copyright law continues to strike the right balance between protecting 

creative works and maintaining the benefits of the free flow of information. 

Digital technology and networks have had a profound effect on how copyrighted works 

are delivered to the public. The tools available in the digital environment have 

changed the nature of what creators are able to produce and how they share their 

works with the public, and the ways the public can access that content and interact 

with it. Individuals can now access creative works through an increasing variety of 

legitimate online platforms. Improvements can be made to promote further 

development of distribution platforms and business models that can reward content 

creation and use, and to amplify the Internet’s power to ease licensing transactions, 

At the same time, there cannot be meaningful protection without enforcement of 

rights. There is no single solution to the problems of online infringement. Rather, it 

takes a combination of approaches, including not only legal mechanisms, but also 

technology, public education, and collaborative efforts among stakeholders. A number 

of these approaches have been developed in recent years and this report discusses 

several that we believe hold great promise. In shaping or refining enforcement tools, it 

is critical to safeguard the benefits that robust information flows have on innovation, 

knowledge, and public discourse. 

Digital copyright issues have long been the subject of passionate debate in Congress, 

the courts, the press, and the marketplace. The vigor of this debate reflects the 

economic, social, and political importance of copyright policy as well as the complexity 

of the underlying legal, economic, and technical questions. 

It is time to assess whether the current balance of rights, exceptions and 

responsibilities – crafted, for the most part, before the rapid advances in computing 

and networking of the past two decades – is still working for creators, rights holders, 

service providers, and consumers. The Internet must continue to support a legitimate 

market for copyrighted works as well as provide a platform for innovation and the 

introduction of new and dynamic services that drive digital commerce. And we must 

ensure that free expression, respect for consumer privacy, and cybersecurity are 

preserved in the online environment. The government can promote progress as a 

convener of the many stakeholder groups – including creators, industry, and 
iv

consumers – that share an interest in maintaining an appropriate balance within the 

copyright system. NTIA has been engaged in this type of process related to issues 

identified in its prior paper 

, and the multistakeholder model is the broad 

foundation of our approach to policy issues in the Internet context. This same 

approach was reflected in the Department’s paper, 

The Department of Commerce is uniquely positioned to provide continued leadership 

and to work with others inside and outside government to consider these issues. As 

early as 1993, the White House formed the Information Infrastructure Task Force, 

chaired by then-Secretary of Commerce Ron Brown, to develop telecommunications 

and information policies that would promote development of the Internet. As part of 

that process, a working group on intellectual property rights examined the protection 

of creative works online and made recommendations to update the U.S. copyright law 

for the Internet age in its 1995 report, 

. Many of the recommendations from that report were 

subsequently enacted in legislation.

Nearly 20 years later, the valuable works of our creative industries have fueled the 

growth of digital commerce and new distribution platforms and services, and these 

new distribution platforms and services have in turn transformed our creative 

industries. The Department of Commerce – led by the USPTO and NTIA – has a vision 

of a digital future in which the relationship among digital technology, the Internet, and 

creative industries becomes increasingly symbiotic: in which the rights of creators and 

copyright owners are appropriately protected; creative industries continue to make 

their substantial contributions to the Nation’s economic competitiveness; online 

service providers continue to expand the variety and quality of their offerings; 

technological innovation continues to thrive; and consumers have access to the 

broadest possible range of creative content. We believe these goals are compatible and 

can be achieved together.

This 

provides a lens through which to assess current policy related to copyright and the 

Internet, identifying important issues that are being addressed by the courts and those 

that are ripe for further discussion and development of solutions. We hope the issues 

and findings discussed in this paper can serve as a reference for stakeholders, a 

blueprint for further action, and a beacon for U.S. leadership in the global copyright 

debates. To contribute further to the Administration’s development of copyright 

policy, the paper identifies a number of topics on which we will solicit further public 

comment.

This paper reflects the hard work of the Department’s Internet Policy Task Force 

spanning several years. We acknowledge Shira Perlmutter, Garrett Levin, Molly Torsen 

Stech, and Ann Chaitovitz at USPTO, for their role as principal drafters, as well as John 

Morris, Aaron Burstein, Jade Nester, and Ashley Heineman at NTIA for their many 

valuable contributions. Numerous others throughout the Department of Commerce 

assisted in the initial listening sessions and the 2010 symposium that began this 

process, and provided valuable input to get to this final product. 
v

The Task Force’s analyses recognize a continued set of challenges presented by rapidly 

changing technology and market conditions. The challenges are significant, but the 

economic and cultural opportunities are limited only by our collective will and 

imagination. To realize these opportunities, we will need continued productive 

engagement from all stakeholders.

Cameron F. Kerry

General Counsel 

Teresa Stanek Rea

Acting Under Secretary of Commerce for Intellectual Property and Acting Director of 

the USPTO

Lawrence E. Strickling

Assistant Secretary of Commerce for Communications and Information
vi

Executive Summary ...........................................................................................................................1

I. Copyright and the Internet: Opportunities and Challenges.............................................5

II. Maintaining an Appropriate Balance.......................................................................................9

A. General.....................................................................................................................................9

B. Updates to Rights............................................................................................................... 10

1. The Digital Performance Rights in Sound Recording Act of 1995.......................... 10

2. The Right of Reproduction In Temporary Copies ...................................................... 12

3. The Making Available Right............................................................................................. 14

4. Technological Adjuncts to Copyright Rights............................................................... 16

a) Technological Protection Measures (TPMs)............................................................ 16

b) Rights Management Information (RMI) ................................................................... 19

5. New Challenge: The Meaning of “Public Performance” ............................................. 19

C. Updates to Exceptions....................................................................................................... 20

1. The Fair Use Doctrine........................................................................................................ 21

2. Library Exception................................................................................................................ 23

3. Distance Education ............................................................................................................ 24

4. Blind, Visually Impaired and Other Persons with Print Disabilities ....................... 25

5. DMCA Anti-Circumvention Exceptions ......................................................................... 26

6. Other Issues......................................................................................................................... 28

a) Remixes .......................................................................................................................... 28

b) Orphan Works and Mass Digitization ..................................................................... 29

i) Orphan Works .......................................................................................................... 29

ii) Mass Digitization..................................................................................................... 33

c) The First Sale Doctrine................................................................................................ 35

D. Conclusion and Next Steps .............................................................................................. 37

III. Keeping Rights Meaningful in the Online Environment .................................................. 38

A. General.................................................................................................................................. 38

B. Existing Legal Tools for Online Copyright Enforcement........................................... 42

1. Government Actions.......................................................................................................... 42

a) Coordination and Oversight...................................................................................... 42

b) Civil and Criminal Enforcement ............................................................................... 42

c) International Initiatives .............................................................................................. 45

2. Private Action and Available Remedies......................................................................... 46

a) Direct Infringement Suits........................................................................................... 47
vii

i) Individual File Sharers............................................................................................ 47

ii) Digital Services......................................................................................................... 47

b) Secondary Liability....................................................................................................... 48

c) Judicial Remedies......................................................................................................... 50

i) Injunctions................................................................................................................ 50

ii) Statutory Damages.................................................................................................. 51

d) The Role of ISPs under the DMCA............................................................................ 52

i) General Framework................................................................................................. 53

ii) Notice and Takedown Issues ................................................................................ 54

(a) Knowledge Standard........................................................................................ 54

(b) Burdens of Compliance................................................................................... 56

(c) Database of Designated ISP Agents ............................................................. 59

iii) Additional Enforcement Tools: Termination of Repeat Infringers’ Accounts 

and Subpoenas......................................................................................................... 59

C. Potential New Tools ........................................................................................................... 61

1. Website Blocking................................................................................................................. 62

2. Content Filtering................................................................................................................. 65

3. “Follow the Money” Approach......................................................................................... 67

a) Payment Processors..................................................................................................... 67

b) Online Advertisers ....................................................................................................... 68

4. Search Engines .................................................................................................................... 70

5. Graduated Response.......................................................................................................... 71

D. Public Education and Outreach....................................................................................... 74

E. Conclusion and Next Steps .............................................................................................. 76

IV. Ensuring an Efficient Online Marketplace........................................................................... 77

A. Delivering the World’s Creativity to Consumers Legally........................................... 77

1. Today’s Legal Offerings .................................................................................................... 78

2. Impediments to Licensing for Online Distribution .................................................... 80

a) The Complexity of Music Licensing......................................................................... 81

i) Licensing Musical Compositions.......................................................................... 81

ii) Licensing Sound Recordings................................................................................. 83

iii) Practical Impact on Licensing............................................................................... 83

b) Old Contracts, New Uses ............................................................................................ 86

c) Licensing Across Borders ........................................................................................... 86

B. Moving Licensing Online................................................................................................... 87

C. The Basic Building Blocks: Global Rights Information ............................................. 89
viii

1. Access to Ownership Information.................................................................................. 89

a) Public Registries ........................................................................................................... 89

b) Private Databases ......................................................................................................... 92

i) Membership Organizations................................................................................... 92

ii) Other Private Databases......................................................................................... 94

2. Connecting the Dots: Integrating Databases Across Borders and Sectors ........... 94

a) Global Information Resources .................................................................................. 95

b) Standards ....................................................................................................................... 97

D. Role of Government........................................................................................................... 98

E. Conclusion and Next Steps .............................................................................................. 99

V. Conclusion.................................................................................................................................. 99

Appendix A: Summary of Recommendations and Issues for Further Discussion and 

Comment ........................................................................................................................................100

Appendix B: Acknowledgements, Symposium Panelists and Notice of Inquiry 

Respondents...................................................................................................................................105
Copyright law’s history is one of continuous evolution in the face of technological 

change. But arguably no prior technological change has impacted copyright with a 

magnitude comparable to the development of the Internet. Never before has there 

been such widespread and immediate access to such a broad array of creative works;

never before have content creators – ranging from individuals to large corporations –

been able to reach a global audience so effortlessly and inexpensively; and never 

before has it been possible for members of the public to create, transform or distribute

multiple perfect copies of works seamlessly, without regard to national borders.

How to retain a meaningful copyright system that continues to drive the production of 

creative works while at the same time preserving the innovative power of the Internet 

and the free flow of information are questions at the forefront of today’s policy

debate. As a broadening array of creators continue to express themselves and share 

their valuable works with the world, and as the Internet continues to grow in 

economic, social and cultural relevance, the importance of these questions will only be 

heightened.

The industries that rely on copyright are today an integral part of the U.S. economy, 

accounting for millions of jobs and contributing billions of dollars to the G.D.P. 

Moreover, the creative content they produce contributes to the development of the 

broader Internet economy, spurring the creation and adoption of innovative 

distribution technologies. Not only do these industries make important economic 

contributions, they are at the core of our cultural expression and heritage. It is no 

exaggeration to say that U.S. music, movies, television shows, computer software, 

games, writings and works of art have changed the world. 

At the same time, the Internet and other networked information technologies have 

transformed virtually all aspects of our lives, including the market for copyrighted 

works. Consumers are accessing more and more creative content of all kinds on the 

Internet in a wide variety of formats; creators of all sizes can reach a broad audience 

without going through traditional intermediaries; and the growth of online services has 

been nothing short of remarkable. Some of the technological developments that have 

fostered this exciting diversity, however, have also given rise to new methods of mass

infringement. Addressing this problem is vital to maintaining meaningful incentives 

for producing creative works, ensuring a level playing field for legitimate services, and 

promoting the broadest offerings of online content. All stakeholders, from creators to 

intermediaries to consumers, have an interest in ensuring a healthy online ecosystem. 

The fundamental question is how best to achieve that end.

Some would argue that copyright protection and the free flow of information are 

inextricably at odds—that copyright enforcement will diminish the innovative 

information-disseminating power of the Internet, or that policies promoting the free 

flow of information will lead to the downfall of copyright. Such a pessimistic view is 

unwarranted. The ultimate goal is to find, as then-Secretary of Commerce Gary Locke 

explained, “the sweet spot on Internet policy – one that ensures the Internet remains 

an engine of creativity and innovation; and a place where we do a better job protecting 

against piracy of copyrighted works.” Effective and balanced copyright protection 

need not be antithetical to the free flow of information, nor need encouraging the free 

flow of information undermine copyright. In fact, as the Supreme Court has 
INTERNET POLICY TASK FORCE

recognized, “the Framers intended copyright itself to be the engine of free 

expression.”1 

In 2010, the Secretary of Commerce created the Internet Policy Task Force (Task Force) 

to provide policy coordination across the Department of Commerce, and to conduct

initially a comprehensive review of privacy policy, copyright, global free flow of 

information, and cybersecurity, and their respective relationships to innovation in the 

Internet economy. To advance the dual public policy imperative of “combat[ing] online 

copyright infringement more effectively and sustain[ing] innovative uses of 

information and information technology,” the Task Force launched a dialogue to 

contribute to Administration-wide policy positions and to further a global consensus 

on fostering creativity and innovation online.2 In 2010, the Task Force held listening 

sessions with a wide range of stakeholders to understand the current major questions 

related to online copyright protection as well as the broader impact on innovation in 

the Internet economy. The Task Force then convened a public meeting on July 1, 2010, 

to further explore these issues.3 Subsequently, the Task Force published a Notice of 

Inquiry (NOI) and received several hundred submissions in response.

4

 

The Task Force has closely followed the developments that have taken place since that 

time, including proposed legislation on online enforcement tools; negotiations of 

voluntary agreements between various types of intermediaries and content owners;

and studies, inquiries and rulemakings by the U.S. Copyright Office of the Library of 

Congress. Additional input was obtained through reviewing the submissions made to 

the Office of the Intellectual Property Enforcement Coordinator (IPEC) in connection 

with the 2013 Joint Strategic Plan for Intellectual Property Enforcement.5

Through this process, the Task Force has sought to understand stakeholders’ 

experiences, the benefits and shortcomings of existing law, and the various initiatives 

that have been implemented or proposed to address online copyright issues. NOI 

respondents and symposium participants focused on numerous topics, including: (1) 

the levels and impact of online copyright infringement; (2) emerging services and 

business models, both legal and illegal; (3) intermediary roles, responsibilities, and 

protections; and (4) issues involved in online protection efforts, including experiences 

with notice and takedown under the Digital Millennium Copyright Act (DMCA), and the 

problem of repeat infringers. 

 

1

. , 471 U.S. 539, 558 (1985).

2 The Task Force dialogue on online copyright issues, led by the United States Patent and Trademark 

Office (USPTO) and the National Telecommunications and Information Administration (NTIA), has closely 

consulted with the Office of the Intellectual Property Enforcement Coordinator (IPEC) in the Office of 

Management and Budget, and other components of the Executive Office of the President.

3 USPTO & NTIA, Copyright Policy, Creativity, and Innovation in the Internet Economy, 75 Fed. Reg. 33577 

(June 14, 2010). An agenda from the symposium is available at http://www.ntia.doc.gov/legacy/Internet

PolicyTaskForce/copyright/CopyrightSymposiumProgram.pdf. 

4 USPTO & NTIA, Copyright Policy, Creativity, and Innovation in the Internet Economy, 75 Fed. Reg. 72790 

(November 26, 2010). The comments are available at http://ssl.ntia.doc.gov/comments/100910448-0448-

01/. 

5

IPEC, Request of the U.S. Intellectual Property Enforcement Coordinator for Public Comments: 

Development of the Joint Strategic Plan on Intellectual Property Enforcement, 77 Fed. Reg. 42765 (July 20, 

2012).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

The Task Force has taken into account the views expressed in the public meeting, 

submitted comments, and listening sessions, and is now issuing this paper to 

stimulate further public discussion on a number of specific topics that were either 

raised through those avenues or that have emerged subsequently. The paper does not 

purport to provide an exhaustive catalog of all issues relating to copyright in the 

online environment,6 but outlines the major issues that are making their way through 

the courts, merit further attention, or require solutions. With respect to those issues 

not currently being addressed elsewhere, the paper proposes next steps—some 

involving potential legislative changes, but many based on voluntary private sector 

initiatives. 

The Task Force’s recommendations fall into three broad categories and can be 

summarized as follows:

1) Updating the balance of rights and exceptions.

a) The Task Force urges Congress to better rationalize the public 

performance right for sound recordings. We reiterate the 

Administration’s support for extending the right to cover broadcasting, 

and urge that any reassessment of the appropriateness of different ratesetting standards for different types of digital music services take into 

account the impact on creators and right holders as well as on different 

types of services;

b) The Task Force will solicit public comment and convene roundtables on 

issues related to the creation of remixes and the first sale doctrine in the 

digital environment; and

c) The Task Force will support and provide input to the Copyright Office as 

it moves forward with its work on updating the library exception in 

Section 108 and examining the issues of orphan works and mass 

digitization.

2) Assessing and improving enforcement tools to combat online infringement

and promote the growth of legitimate services while preserving the essential 

functioning of the Internet.

a) The Task Force repeats the Administration’s prior call for Congress to

enact legislation adopting the same range of penalties for criminal 

streaming of copyrighted works to the public as now exists for criminal 

reproduction and distribution;

b) The Task Force will solicit public comment and convene roundtables 

regarding the application of statutory damages in the context of 

individual file-sharers and secondary liability for large-scale online 

infringement;

c) The Task Force will establish a multi-stakeholder dialogue on how to 

improve the operation of the DMCA’s notice and takedown system;

 

6 We do not address various broader or newly emerging topics, among them: the term of copyright 

protection; jurisdiction and choice of law issues; implied license; the scope of statutory licenses for cable 

and satellite retransmissions; certain limitations and exceptions not specific to the Internet environment; 

and the copyright implications of data mining and 3D printing.
INTERNET POLICY TASK FORCE

d) The Task Force supports the Copyright Office’s improvement of the 

DMCA database of designated agents, as well as its examination of 

possible small claims procedures that can assist individual creators and 

SMEs in enforcing their rights online; 

e) The Task Force supports and encourages the development of appropriate

voluntary private sector initiatives to improve online enforcement, and 

will monitor and evaluate the effectiveness of such initiatives to 

determine whether additional action should be considered; and

f) The Task Force encourages enhancing public education and outreach 

efforts to inform consumers about both rights and exceptions and to 

encourage the use of legitimate online services.

3) Realizing the potential of the Internet as a legitimate marketplace for 

copyrighted works and as a vehicle for streamlining licensing.

a) The Task Force will provide input into any Congressional review of music 

licensing, particularly with respect to the mechanical license for musical 

compositions;

b) The Task Force supports the Copyright Office’s work in improving the 

registration and recordation systems and supports the provision of 

enhanced incentives for using these systems; and

c) The Task Force will solicit public comment and convene roundtables 

regarding an appropriate role for the government, if any, to help to 

improve the online licensing environment.

As the Task Force continues to examine these policy areas, it will coordinate its efforts 

closely with other key government actors, including the IPEC and the U.S. Copyright 

Office. The IPEC’s work to promote voluntary best practices and the Copyright Office’s 

various studies and comment processes are referred to throughout this paper.

Section I of the paper provides an overview of the intersection of copyright and the 

Internet, noting the tremendous opportunities and challenges that have arisen over the 

past decades. Section II outlines efforts to maintain an appropriate balance in 

copyright law, as rights and exceptions continue to be updated in response to 

technological change. It describes the major ways in which the law has been amended 

to address digital developments, and identifies areas where it may be appropriate to 

consider additional changes. Section III addresses how rights can be meaningfully 

enforced in the digital environment while ensuring that the Internet remains a robust 

platform for innovation, a diversity of business models, and economic growth. It 

outlines existing civil and criminal enforcement mechanisms, describes gaps or 

shortcomings as well as efforts that have been made to address them, and calls for 

solutions to be found. Section IV examines the state of licensing in the online 

marketplace, notes areas where there are improvements to be made, and proposes 

some steps that the government might take to further the private sector’s efforts.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Copyright law grants exclusive rights to authors in order to encourage the production 

of creative works, to the benefit of society as a whole.7 These exclusive rights are 

balanced by a range of limitations and exceptions that permit some uses of 

copyrighted works without the need for authorization.

8 Copyright has been a vital 

contributor to U.S. cultural and economic development for more than two hundred 

years, fostering the production and dissemination of the valuable expression that has 

put America at the forefront of the global creative marketplace.9 

“[N]othing is more important to American prosperity than jumpstarting our engine of 

innovation.”10 Both American creativity and the Internet economy are at the heart of 

that engine, and the relationship between the two has motivated the Department of 

Commerce’s inquiry into this issue. The industries that rely on copyright law are today 

an integral part of our economy, accounting for 5.1 million U.S. jobs in 2010—a figure 

that has grown dramatically over the past two decades.11 In that same year, these 

industries contributed 4.4 percent of U.S. GDP, or approximately $641 billion.12 And

the demand for content produced by our creators contributes to the development of 

the broader Internet economy, spurring the creation and adoption of innovative 

distribution technologies.13 

As copyright continues to grow in importance, the parallel rise of digital technologies

has presented new opportunities, as well as a host of complex issues. Governments, 

including their judicial branches, along with private sector interests around the world 

 

7

, 306 U.S. 30, 36 (1939). The “ultimate aim is, by this incentive, to 

stimulate artistic creativity for the general public good.” , 422 U.S. 

151, 156 (1975).

8

In some contexts, limitations and exceptions may be constitutionally required. , 

, 537 U.S. 186, 219 (2003) (“In addition to spurring the creation and publication of new 

expression, copyright law contains built-in First Amendment accommodations,” including the 

idea/expression dichotomy and fair use).

9 As President Obama has noted, “Our single greatest asset is the innovation and the ingenuity and 

creativity of the American people. It is essential to our prosperity and it will only become more so in this 

century.” Remarks by the President at the Export-Import Bank’s Annual Conference (Mar. 11, 2010), 

http://www.whitehouse.gov/omb/intellectualproperty/quotes/. 

10 Remarks by Gary Locke, Secretary of Commerce, at the Internet Policy Task Force Symposium on 

Copyright Policy, Creativity, and Innovation in the Internet Economy (July 1, 2010), http://

www.commerce.gov/news/secretary-speeches/2010/07/01/remarks-copyright-policy-internet-economysymposium.

11 Economics and Statistics Administration and the USPTO, Intellectual Property and the U.S. Economy: 

Industries in Focus at 39-42 (March 2012), http://www.uspto.gov/news/publications/IP_

Report_March_2012.pdf. When indirect employment in the supply chain supported by these copyrightintensive industries is included, the figure rises to nearly 7.6 million. at 43-44.

12 at 45.

13 The economic growth of the Internet “would not exist without equally strong creative content produced 

by America’s authors, artists, and other creative workers.” Remarks by Lawrence Strickling, Assistant 

Secretary of Commerce for Communications and Information, Internet Policy Task Force Symposium on 

Copyright Policy, Creativity, and Innovation in the Internet Economy (July 1, 2010), http://

www.ntia.doc.gov/speechestestimony/2010/opening-remarks-lawrence-e-strickling-assistant-secretarycommerce-communic-0.
INTERNET POLICY TASK FORCE

have been grappling with these issues for over twenty years. Their efforts represent 

the continuation of a long process; the history of copyright is integrally entwined with 

and has always been shaped by technological change. 

The impetus for the first copyright laws was the revolutionary technology of the 

printing press.14 In the course of the 20th century, copyright confronted new 

technologies ranging from player piano rolls,

15 to motion pictures, television and 

radio,16 to photocopy machines,

17 computers18 and VCRs.19

 Each of these developments 

provoked great anxiety as to the continued viability of copyright,20 and led to various 

statutory amendments. The development of the Internet is the current iteration of this 

evolutionary process—one that is both necessary and healthy for a vital copyright 

system. We are again in the midst of vigorous debate about the proper boundaries of 

copyright protection and enforcement. 

Despite this history, it must be acknowledged that digital technologies have presented 

challenges – as well as opportunities – of an unprecedented magnitude, and at an 

unprecedented pace. Never before has it been possible for individuals to create and 

disseminate multiple perfect copies of works virtually instantaneously and essentially 

cost-free. Moreover, a rich and expanding repertoire of content can be made available 

anywhere there is access to the Internet, bypassing the historical limits of national 

borders. 

In the early days of public use of the Internet, these developments were already on the 

horizon. At that time, questions were even raised about the extent to which the 

Internet should be subject to any legal regulation, including copyright law.21 In 1995, 

the Clinton Administration’s Intellectual Property Working Group issued a report on 

22 The Report

 

14 WILLIAM F. PATRY, 1 PATRY ON COPYRIGHT § 1.5 (2012).

15 209 U.S. 1 (1908). 

16

, , 222 U.S. 55, 62-63 (1911); 

, 5 F.2d 411, 411-12 (6th Cir. 1925).

17

, , 487 F.2d 1345 (Ct. Cl. 1973).

18 Final Report of the National Commission on New Technological Uses of Copyrighted Works, 1-2 

(1978). 

19

, , 464 U.S. 417 (1984).

20 John Phillip Sousa, , 8 APPLETON’S MAG. 278 (1906); 

, TIME, May 1, 1972, at 62 (quoting leading copyright scholar Melville Nimmer as saying “the 

day may not be far off when no one need purchase books” because of the use of the photocopier); Barbara 

A. Ringer, The Demonology of Copyright, R.R. Bowker Memorial Lecture (Oct. 24, 1974).

21 John Perry Barlow, 

, WIRED, Mar. 1994 http://www.wired.com/wired/archive/2.03/economy.ideas.html.

22 Intellectual Property and the National Information Infrastructure: The Report of the Working Group on 

Intellectual Property Rights (Sept. 1995) (NII Report), a http://www.uspto.gov/web/offices/

com/doc/ipnii/ipnii.pdf. The NII Report dismissed the view of the Internet as a regulation-free zone as 

follows: “[A]ctivity on the Internet takes place neither in outer space nor in parallel, virtual locations. 

Satellite, broadcast, fax and telephone transmissions have not been thought to be outside the jurisdiction 

of the nations from which or to which they are sent. Computer network transmissions have no 

distinguishing characteristics warranting such otherworld treatment. Further, such a legal free-for-all 

would transform the [Internet] into a veritable copyright Dodge City. As enticing as this concept may seem 

to some users, it would hardly encourage creators to enter its confines.” at 15.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

described copyright law’s past adaptation to new technologies, identified the 

challenges of the digital environment, and made a number of recommendations for 

legislative changes.23 But even this comprehensive report could not predict all of the 

issues that we face today. As noted by the then-Assistant Secretary of Commerce and 

Commissioner of Patents and Trademarks: 

There is much that we do not – and cannot – know about how the 

(Internet) will develop. Technology is advancing at such an incredible 

pace that issues will certainly continue to arise in the future, perhaps 

demanding more comprehensive legislation.24

The pace of technological change has only continued to increase since that early phase 

of legal analysis and adaptation. 

The flip side to the challenges presented by the Internet is the fact that it has enabled 

the creation of vibrant, innovative marketplaces of unprecedented scope and 

convenience. This potential was recognized as early as 1995, and is now being 

realized. 

Both within and outside of the traditional content publishing and distribution 

industries, a wide range of exciting new models for the enjoyment of copyrighted

works has emerged in recent years, some of which have achieved widespread 

consumer acceptance. One striking development has been what some have called the 

“democratization of publishing” – the ability of individual authors, musicians, 

videographers, and other artists to publish directly to a global audience, regardless of 

whether they are seeking to make money or simply have their creations seen or heard. 

The online marketplace for copyrighted works is still, however, a work in progress. It 

is not yet clear which of these models will prove economically viable, and existing 

offerings are neither consistent in catalog depth nor seamless for purposes of broadbased licensing. Additional work needs to be done to ensure that licensing can extend 

smoothly to the full range of content in all sectors and media, for users large and 

small, and across borders. 

Also on the horizon is the opportunity to streamline the process of licensing for both 

businesses and consumers, through the broader online availability of rights 

information, and the provision of automated, online platforms for contracts, payments 

and delivery. This could permit more efficient development of new businesses and 

enable microlicensing potentially to the benefit of all.

At the same time, piracy remains a formidable challenge.25 Since the NII Report, the 

 

23 The NII Report recommendations included: creating a public performance right for sound recordings; 

amending the library exceptions to permit broader use of digital technology; permitting certain 

reproductions and distributions of works for the visually impaired; adjusting the requirements for 

criminal copyright infringement to address large-scale infringement not motivated by profit; and 

providing legal protection for technological protection measures and copyright management information. 

Many of these changes were ultimately adopted in some form into U.S. law, as described below.

24 Statement of Bruce A. Lehman, Assistant Secretary of Commerce and Commissioner of Patents and 

Trademarks on S. 1284 and H.R. 2441 before the Subcommittee on Courts and Intellectual Property, 

Committee on the Judiciary, United States House of Representatives and the Committee on the Judiciary, 

United States Senate (Nov. 15, 1995).

25 Use of the term “piracy” in the context of copyright infringement traces back to the early development 

of the publishing industry in England. Justin Hughes, 
INTERNET POLICY TASK FORCE

threat of rampant infringement over the Internet has not abated;26 today, however, 

much of that infringement is taking place through technologies that were unforeseen 

in 1995, particularly peer-to-peer networks and cyberlockers. While the extent of the 

losses caused by online infringement is hard to calculate with certainty,

27 the 

proliferation of unlicensed sites and services making content available without 

restriction or payment impedes the growth of legitimate services.28 

The time is ripe to take stock once again of the landscape for copyright in today’s 

digital environment. The issues to be examined include whether updates may be 

needed to the current balance of rights and exceptions; whether adequate tools exist to 

allow rights to be meaningfully and appropriately enforced; and how the conditions for 

online licensing can best be improved. Preserving copyright law is not an end in itself; 

our goal is to ensure that the Internet remains both an engine of creativity and 

innovation and an environment where copyrighted works are adequately protected 

against piracy. By doing so, copyright can continue its role as an “engine of free 

expression,”29 a time-tested means to promote the production and dissemination of 

creative works.30

The Task Force believes that the core principles of U.S. copyright law remain 

fundamentally sound. Many updates have already been made to adapt to digital 

technology, and we describe them below. The precise boundaries of these provisions 

will continue to evolve as the courts apply them to new factual contexts; where issues 

are making their way through the courts, and no definitive interpretation has emerged, 

further action may be unnecessary or premature. Nevertheless, we have identified a 

number of areas where new solutions are needed or desirable. As to each, the 

appropriate process and technique may differ.31 This paper describes ongoing 

 

, 79 S. CAL. L. REV. 993, 1009-10 (2006); ADRIAN JOHNS, THE 

NATURE OF THE BOOK 32 (1998); ADRIAN JOHNS, PIRACY: THE INTELLECTUAL PROPERTY WARS FROM GUTENBERG TO GATES

(2011).

26 pp. 39-78. USPTO & NTIA, Inquiry on Copyright Policy, Creativity, and Innovation in the 

Internet Economy, 75 Fed. Reg. 61419, 61421 (Oct. 5, 2010). 

27 A number of industry studies have shown high estimated costs from piracy. , U.S. Government 

Accountability Office, GAO-10-423, 

21 (Apr. 2010). Some of these estimates have been questioned, 

however, and the GAO has noted that “estimating the economic impact of IP infringements is extremely 

difficult.” at 15. The GAO Report states that there is not likely to be a one-to-one substitution between 

legitimate and pirated content, although some degree of substitution is generally acknowledged. at 17.

28 at 19 (explaining that although difficult to quantify, “counterfeiting and piracy is a sizeable problem, 

which affects consumer behavior and firms’ incentives to innovate”).

29 , 471 U.S. at 558.

30 The constitutional clause authorizing Congress to enact intellectual property laws, art. I. § 8, cl. 8, 

articulates its purpose as promoting the “Progress of Science and useful Arts.” When this clause was 

crafted, the term “science” was synonymous with “knowledge” and “learning,” whereas “useful Arts” 

referred to technological inventions. EDWARD WALTERSCHEID, THE NATURE OF THE INTELLECTUAL PROPERTY 

CLAUSE 125-26 (2002); Karl B. Lutz, 

, 32 J. PAT. OFF. SOC’Y 83, 87 (1950). To avoid confusion, this paper will refer to the 

constitutional goal of the copyright system as promoting progress in the “creative arts.”

31 On the legislative side, the Register of Copyrights has recently called for a “comprehensive review” of 

U.S. copyright law. Maria A. Pallante, 

(Mar. 4, 2013) (“Manges Lecture”). The Chairman of the House Judiciary Committee has launched 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

initiatives in some of these areas, and for others, either proposes a path for future 

work or seeks comments on the way forward. Finding solutions can enable us to 

continue fostering the valuable contributions that a vibrant copyright ecosystem can 

provide to society as a whole.

Finally, all of these developments take place within an international context. The 

United States is a signatory to a number of international copyright treaties and trade 

agreements, which must be taken into account when considering revisions to U.S. 

law.32 Moreover, most of the issues facing copyright law in the digital environment are 

not unique to the United States and are being considered in jurisdictions and forums 

around the world.33 These debates and experiences can be useful resources and help 

inform our thinking. Although copyright laws are territorial, the Internet is inherently 

global; an effective copyright system will therefore require close cooperation with 

other nations. As we continue to shape our copyright policy, the United States will 

continue to provide international leadership on these issues, promoting the 

importance of a transparent and inclusive process as well as the need to find an 

appropriate balance both within copyright law and in its relationship to the core values 

of free expression and privacy, while avoiding cybersecurity risks.

From its inception, copyright law has balanced rights and exceptions in the service of 

promoting the creative arts.34 As the law is updated to accommodate technological 

change, this relationship requires ongoing adjustment. This does not mean, of course, 

that every change in rights must give rise to a corresponding change in exceptions, or 

It is also important to acknowledge that while an appropriate balance 

 

a series of hearings on such a review. U.S. House of Representatives, Committee on the Judiciary, 

(Apr. 24, 2013) 

http://judiciary.house.gov/news/2013/04242013_2.html. And the National Research Council of the 

National Academies recently released a report calling for more empirical research to be conducted on 

digital copyright issues to help inform the policy debates. COPYRIGHT IN THE DIGITAL ERA: BUILDING 

EVIDENCE FOR POLICY 26 (2013) (Stephen A. Merrill & William J. Raduchel, eds.), http://www.

nap.edu/catalog.php?record_id=14686 (“Copyright in the Digital Era”).

32 Berne Convention for the Protection of Literary and Artistic Works (1971); WIPO Copyright Treaty (WCT) 

(1996); WIPO Performances and Phonograms Treaty (WPPT) (1996) (together the WCT and WPPT are often 

referred to as the “WIPO Internet Treaties”). The United States is also a Member of the World Trade 

Organization and has undertaken obligations pursuant to the Agreement on Trade-Related Aspects of 

Intellectual Property Rights (TRIPS Agreement) (1994). The United States has also entered into a number 

of bilateral free trade agreements and plurilateral agreements that include copyright obligations.

33 , World Economic Forum, 

(2013), http://www3.weforum.org/docs/WEF_GAC_CopyrightPrinciples.

pdf; UK IPO, (2012), http://

www.ipo.gov.uk/response-2011-copyright-final.pdf; Ian Hargreaves, 

(May 2011), http://www.ipo.gov.uk/ipreview-finalreport.pdf

(“Hargreaves Report”); European Commission, 

, MEMO/12/950 (Dec. 5, 2012), http://europa.eu/rapid/press-release_

MEMO-12-950_en.htm. 

34 note 30. 
INTERNET POLICY TASK FORCE

remains the goal, there can never be such a thing as a perfect equilibrium in a complex, 

dynamic system, and the process of calibration will never be complete. 

Since the mid-1990s, the rights and exceptions in U.S. and international copyright law 

have been amended several times to respond to digital technologies.35 This Section will 

describe these adaptations, many of which are still in the process of judicial 

interpretation, and discuss additional ones that have more recently been proposed for 

consideration. 

In the United States, the most notable adjustments to copyright rights in the digital 

space have been the creation of a digital performance right for sound recordings; the 

application of the reproduction right to temporary digital copies; and the 

establishment of legal regimes regarding technological adjuncts to copyright, namely 

technological protection measures (TPMs) and rights management information (RMI). 

At the international level, there has also been explicit recognition of a “making 

available” right—i.e., the right to control making works available on demand to 

members of the public. Each of these adjustments represented an attempt to ensure 

that copyright owners retain the ability to exploit their rights effectively in the digital 

environment. 

Sound recordings were not granted federal copyright protection until 1972, and then 

copyright owners were granted only a limited set of rights: reproduction, distribution, 

and adaptation.36 Unlike owners of other works including musical compositions, they 

did not enjoy a right to control and be compensated for the public performance of 

their works.37 

In 1995, Congress partially remedied this discrepancy by providing such a right, but 

limited to the digital context. The Digital Performance Right in Sound Recordings Act 

(DPRA) created a new exclusive right for owners of sound recordings to perform their 

works publicly by means of a digital audio transmission.38 Congress determined that a 

 

35 Some early modifications in the United States related to the special characteristics of digital physical 

media, namely the prohibition on commercial lending of computer software based on the determination 

that such lending led to the making of illegal copies. S Computer Software Rental Amendments Act of 

1990, Pub. L. No. 101-650, 104 Stat. 5089 (1990), and the Audio Home Recording Act, Pub. L. 102-563, 106 

Stat. 4237 (1992), which established a complex set of rights and responsibilities of device makers and the 

content industry to address the new technology of digital audio recording devices and contained an 

exception for certain non-commercial home recording of music. 

36 Sound Recording Act of 1971, Pub. L. No. 92-140, 85 Stat. 391 (1971). 

37 the broader set of rights granted to other categories of works, which include rights of public display 

and performance. 17 U.S.C. § 106. The initial intention of protecting only certain rights in sound 

recordings was to focus on prohibiting unauthorized copying of physical copies of sound recordings, a 

problem that had been separately addressed under each states’ laws prior to federal recognition of 

copyright in sound recordings. H.R. REP. NO. 487, at 2-3 (1971). 

38 Pub. L. No. 104-39,109 Stat. 336 (Nov. 1, 1995), amending 17 U.S.C. §§ 106, 114-15. The digital 

performance right was further amended by the DMCA and by the Copyright Royalty and Distribution 

Reform Act of 2004, Public Law 108–419, 118 Stat. 2341, and the digital performance right and 

corresponding statutory licenses as currently codified reflect those amendments. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

digital performance right was necessary in recognition of the fact that “digital 

transmission of sound recordings is likely to become a very important outlet for the 

performance of recorded music in the near future.”39 

The digital performance right was qualified by a number of restrictions, most notably 

the creation of a statutory license for certain categories of non-interactive 

transmissions.40 This statutory license has fostered the growth of Internet radio (or 

webcasting) and satellite radio. The royalty rates are set by the Copyright Royalty 

Board, subject to statutorily defined standards.41 

As the market for digital transmission of sound recordings continues to mature, and 

streaming becomes an increasingly important means of enjoying music, questions have 

been raised as to different obligations for different types of services using sound 

recordings, and disparities in rate-setting standards for those digital services that are 

subject to the statutory license.42 Of particular concern in the context of the growing 

digital audio market is the fact that there is still no public performance right when 

sound recordings are used by over-the-air FCC-licensed broadcasters. As a result, overthe-air broadcasters enjoy a competitive advantage over emerging digital services.

For over thirty years, the Administration and Copyright Office have made repeated 

calls to create a public performance right for the broadcasting of sound recordings.43 

Apart from the inability to obtain compensation in the United States, this omission has 

had a real impact on revenues received from abroad. While broad public performance 

rights are enjoyed by owners of sound recordings in most other countries, U.S. sound 

recording owners and performers have been unable to collect remuneration for the 

broadcasting of their works in those countries, due to the lack of reciprocal protection 

here.

44

 

 

39 S. REP. 104-128, at 14 (1995).

40 17 U.S.C. § 114(d)(2).

41 17 U.S.C. §§ 114(f)(2)(B), 801(b)(1). The Copyright Royalty Board is an independent administrative 

law panel housed in the Library of Congress that adjudicates the rates and terms of the statutory licenses 

in the Copyright Act. 17 U.S.C. §§ 801-805.

42 In the last Congress, legislation was proposed in response to these questions. One bill sought to 

address the rate disparity for different services based on different rate-setting standards. Internet 

Radio Fairness Act, H.R. 6480, S. 3609, 112th Cong. Another bill revisited the broader issue of the 

disparity between the digital audio services that are required to pay a performance royalty for sound 

recordings and terrestrial broadcasters with no such obligations. Interim FIRST Act, 

http://nadler.house.gov/sites/nadler.house.gov/files/documents/NADLER_153_xml.pdf. 

43 , Register of Copyrights, Report on Performance Right in Sound Recordings, H.R. Doc. No. 15, 

95th Cong., 2d Sess. (1978); Register of Copyrights, 

(Oct. 1991); Letter from Cameron F. Kerry to Honorable Patrick Leahy (Apr. 1, 2010), 

http://www.commerce.gov/sites/default/files/documents/2012/january/s379apr0110.pdf; 

Administration’s White Paper on Intellectual Property Enforcement Legislative Recommendations 17 (Mar.

2011), http://www.whitehouse.gov/sites/default/files/ip_white_paper.pdf. 

44 This lack of payment is a result of how the United States fulfills international obligations related to 

public performance rights. Although the United States is a signatory to the WPPT, because our public 

performance right is limited only to certain digital transmissions, other signatories to the WPPT withhold 

payment of royalties for performances of U.S. sound recordings on broadcast radio in their countries. 

Moreover, the United States is not a signatory to the International Convention for the Protection of 

Performers, Producers of Phonogram Recordings and Broadcasting Organizations (“Rome Convention”), so 

countries that are signatories to only the Rome Convention (and not the WPPT) do not pay royalties for 
INTERNET POLICY TASK FORCE

The Task Force believes that the overall framework of rights for the public 

performance of sound recordings should be revisited and better rationalized. In 

particular, the Administration continues to support a broadcasting right for sound 

recordings. With respect to the rate-setting standards for digital services, we urge that 

any reconsideration should focus broadly on the interests of all involved parties, 

taking into account the impact on creators and right holders as well as on different 

types of services. As Congress considers these issues, the Department of Commerce 

will provide ongoing input.

The right to reproduce a work in copies is the first and most fundamental of the 

bundle of rights that make up a copyright. In the online environment, this right is 

even more central, as copies are made in the course of virtually every network 

transmission of a digital copy.

45

 Temporary copies may be a key aspect of the value of 

the use in some circumstances, but merely incidental in others. 

The ability to control temporary copying in digital devices has long been important to 

rights owners. For software in particular, consumers increasingly engage in the 

exploitation of software they receive over a network without ever knowingly storing a 

permanent copy on their hard drive.

46

 Temporary copies are also prevalent in the 

context of streaming sound recordings and video, where “buffer copies” are a 

technologically necessary step in the delivery of content to the consumer.

It has long been clear in U.S. law that the reproduction right is not limited solely to the 

making of “permanent” physical copies.47 The statutory definitions cover any fixation 

“sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise 

communicated for a period of more than transitory duration.”48 In the seminal 1993 

case v. , the Ninth Circuit applied these 

definitions to hold that when a program is loaded into RAM, a copy is created.49 In a 

2001 Report, the Copyright Office confirmed its agreement, noting that “[a]lthough it 

is theoretically possible that information . . . could be stored in RAM for such a short 

 

performances of U.S. sound recordings. Statement of Marybeth Peters, Register of Copyrights, before 

the Subcommittee of Courts, the Internet, and Intellectual Property, Committee on the Judiciary, 

(July 

31, 2007) http://www.copyright.gov/docs/regstat073107.html. 

45 More broadly, the transmission of any information over the Internet – including content protected by 

copyright – inherently requires numerous temporary copies or buffers to be made as the information 

traverses the network. As information is transported from switch to switch and server to server across 

the Internet, temporary copies are made at every stopping point. Without temporary copies, no 

communications could flow across the Internet.

46 In other words, they access the software according to their license terms, load it into their computer’s 

random access memory (RAM), use it and then close the program or shut down the computer – with the 

software only being temporarily stored on the computer’s or server’s hard drive. 

47 Final Report of the National Commission on New Technological Uses of Copyrighted Works 

note 18 at 12-13, 22; Computer Software Copyright Act of 1980, Pub. L. No. 96-517, 94 Stat. 3015, 3028; 

, 991 F.2d 511 (9th Cir. 1993).

48 17 U.S.C. § 101 (definition of “fixed”).

49 991 F.2d 511 (9th Cir. 1993).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

period of time that it could not be retrieved, displayed, copied or communicated, this 

is unlikely to happen in practice.”50 

While the central premise of the decision has been consistently upheld,51 U.S.

courts continue to refine in what circumstances a reproduction may be too short-lived 

to qualify as a copy.

52

 Even if a copy is made, of course, it may not be infringing. The 

Copyright Act contains several specific limitations permitting temporary copies, 

including those made to allow the ordinary use or repair of a computer53 or for 

purposes of re-broadcasting,54 and ephemeral recordings used by non-interactive audio 

services.55 Temporary reproductions may also qualify as fair use in appropriate 

circumstances.56 The Copyright Office has stated that a fair use case could be made 

for buffer copies that are made in the process of streaming content because, although 

the use is not transformative and is for a commercial purpose, the reproduction is 

made “solely to render a performance that is fully licensed” and “facilitates an already 

existing market for the authorized and lawful streaming of works,” especially where 

they are made internally solely to enable an otherwise lawful use.57 Further certainty 

could be provided through the adoption of a new statutory exception.58

This issue has received significant international attention. The World Intellectual 

Property Organization (WIPO) Internet Treaties explicitly confirm that the reproduction 

right as well as the exceptions thereto apply fully in the digital environment, and that 

 

50 U.S. Copyright Office, 

108 (2001), http://www.copyright.gov/reports/studies/dmca/sec-104-reportvol-1.pdf (“Section 104 Report”).

51 , No. C 11-03766, 2012 U.S. Dist. LEXIS 42166 at *8-9 (N.D. Cal. Mar. 27, 

2012); , No. 08-CV-0663, 2010 U.S. Dist. LEXIS 135016 at 19 (D. Md. Dec. 20, 

2010); , 745 F. Supp. 2d 1148 (N.D. Cal. 2010); , 

673 F. Supp. 2d 931, 935 (N.D. Cal. 2009); , No. 08-

1534, 2009 U.S. App. LEXIS 14766 at 18-19 (4th Cir. July 7, 2009).

52

, , 536 F.3d 121, 129-30 (2d Cir. 2008), , 557 

U.S. 946 (2009) (holding that buffer copies existing for no longer than 1.2 seconds are not fixed and 

therefore do not qualify as copies under the Copyright Act); , 373 F.3d 

544, 551 (4th Cir. 2004) (noting that an ISP that acts as conduit for users’ material does not engage in acts 

of reproduction because the copies are not fixed for more than transitory duration).

53 17 U.S.C. § 117(c). 

54 17 U.S.C. § 112(a). 

55 17 U.S.C. § 112(e). These ephemeral copies are subject to a statutory license, the rates and terms of 

which are set in conjunction with the statutory license for the digital public performance of sound 

recordings under Section 114.

56

, , 416 F. Supp. 2d 828 (C.D. Cal. 2006), , 

, 508 F.3d 1146, 1169 (9th Cir. 2007); , 412 F.Supp.2d 1106, 1118 (D. Nev. 

2006); 4 M. NIMMER & D. NIMMER, NIMMER ON COPYRIGHT § 13.05[G], at 13-280 (“To the extent that 

infringers afford access to others’ copyrighted works via making those works accessible in users’ RAM, 

then liability should follow . . . . On the other hand, to the extent that RAM copies appear in the 

background and are not accessed, are created automatically, or exist solely to minimize unnecessary 

bandwidth usage of otherwise noninfringing conduct, then fair use should be given maximal latitude.”). 

57 Copyright Office Section 104 Report note 50 at 133-40. 

58 Maria Pallante, Manges Lecture note 31 at 11-12. Copyright Office Section 104 Report

note 50 at 141-46 (in the context of music licensing, recommending the adoption of a specific 

exception for temporary buffer copies). 
INTERNET POLICY TASK FORCE

the right extends to storage in an electronic medium.59 In implementing these treaties, 

the European Union (EU) specified that the right covers “direct or indirect, temporary 

or permanent reproduction by any means and in any form, in whole or in part.”60 

Again, however, the broad coverage of the right does not mean that all reproductions 

require authorization. The Directive also contains a mandatory exception for certain 

“[t]emporary acts of reproduction . . . , which are transient or incidental [and] an 

integral and essential part of a technological process and whose sole purpose is to 

enable: (a) a transmission in a network between third parties by an intermediary, or (b) 

a lawful use,” which have no “independent economic significance.”61 Although many 

countries have, like the United States, determined that their existing reproduction right 

covers temporary reproductions, some have amended their laws to explicitly clarify the 

coverage of such copies.

62

 And the United States’ bilateral free trade agreements 

incorporate obligations to extend the reproduction right to temporary storage in any 

manner or form.63

On-demand delivery has become a principal means of distributing copyrighted works 

through digital networks. To ensure that copyright owners could control this means of 

exploitation, the 1996 WIPO Internet Treaties introduced at the international level an

explicit “making available” right.64 In order to resolve potential ambiguity in the 

 

59 WIPO, (WIPO Doc. No. CFNF/DC/96) (1996) 

(Agreed Statement concerning Article 1(4)); WIPO, 

(WIPO Doc. No. CFNF/DC/96) (1996) (Agreed Statement concerning Articles 7, 11 

and 16).

60 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the 

harmonisation of certain aspects of copyright and related rights in the information society at art. 2 (OJ L 

167 of 22.6.2001) (“Copyright Directive”).

61 at art. 5(1) (brackets in original). European 

Court of Justice Case C-302/10 (Jan. 17, 2012). The ECJ stated that this exemption must be interpreted 

strictly, and that because most protected works have economic value, an act of temporary reproduction is 

only permitted if it does not enable the generation of an additional profit (for the user) going beyond that 

derived from lawful use of the protected work.

62 , Israeli Copyright Act of 2007 at § 12(4) (IL027); Mexican Federal Law on Copyright at art. 16(VI).

63

, United States-Australia Free Trade Agreement, Chapter on Intellectual Property Rights, art. 

17.4.1: “Each Party shall provide that the following have the right to authorise or prohibit all 

reproductions, in any manner or form, permanent or temporary (including temporary storage in material 

form): (a) authors, in respect of their works; (b) performers, in respect of their performances; and (c) 

producers of phonograms, in respect of their phonograms.”

64 Several decades before the Internet, copyright treaty negotiators were already laying the groundwork for 

a “making available” right. Peter S. Menell, In Search of Copyright’s Lost Ark: Interpreting the Right to 

Distribute in the Internet Age, 59 J. COPYRIGHT SOC’Y USA 1, 50-51 (2011). In 1971, the Geneva 

Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their 

Phonograms, provided that Contracting States “shall protect producers of phonograms . . . against the 

making of duplicates without the consent of the producer and against the importation of such duplicates, 

provided that any such making or importation is for the purpose of distribution to the public, and against 

the distribution of such duplicates to the public.” 25 U.S.T. 309, 888 U.N.T.S. 67 at art. 2 (Oct. 29, 1971). 

Article 1 defines “distribution to the public” to mean “any act by which duplicates of a phonogram are 

, directly or indirectly, to the general public or any section thereof.” at art. 1(d) (emphasis 

added). 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

existing copyright treaties, and at the same time to leave open the manner in which 

countries could implement the obligation, the right was formulated to cover the 

making available of works to the public “in such a way that members of the public may 

access these works from a place and at a time individually chosen by them.”65 In 

countries where the “making available” right has been explicitly adopted, it has been 

interpreted to cover the placement of a work on the Internet where it can be accessed 

by individual members of the public.

66

 

When the United States implemented the WIPO Internet Treaties in the DMCA, it did 

not include an explicit “making available” right, as both Congress and the 

Administration concluded that the relevant acts were encompassed within the existing 

scope of exclusive rights.

67 In addition to the existing reproduction and public 

performance rights, the distribution right, adopted in the 1976 Copyright Act, applied 

to digital transmissions as well as the distribution of physical copies.68 And the 

legislative history indicates that this right was intended to incorporate the prior law’s 

“publication” right,69 which included the mere offering of copies to the public.70

 

65 WCT note 32, art. 8; WPPT, note 32, art. 10. “It is irrelevant whether copies are available for 

the user or whether the work is simply made perceptible to, and thus usable by, the user . . . . One of the 

main objectives . . . is to make it clear that interactive on-demand acts of communication are within the 

scope of the provision.” Memorandum Prepared by the Chairman of the Committee of Experts, 

CRNR/DC/4 at 51 (Aug. 30, 1996), in Records of the Diplomatic Conference on Certain Copyright and 

Neighboring Rights Questions, at 204 (1999). The final wording was intended as an "umbrella solution," 

allowing countries to choose by what right or combination of rights in their national laws it would be 

implemented. MIHÁLY FICSOR, THE LAW OF COPYRIGHT AND THE INTERNET C8.06 (Oxford University Press 2002). 

Neither a “distribution right” model nor a “communication right” model satisfied all the WIPO delegates 

because different legal regimes interpreted the terms “distribution” and “communication” differently.

66

, No. HC 05C02035, [2005] EWHC 3191(Ch) (UK High Ct. Chancery 

Division,18 Nov. 2005); Order in Interlocutory Injunction Proceedings, No. 308 O 58/06 (Civ Chamber 8,

Hamburg Landgericht, 25 Jan. 2006); Order in Interlocutory Injunction Proceedings, No. 28 O 634/05 (Köln 

Landgericht, 23 Nov. 2005); Judgment, No. 95 Ds 1653 Js 15556/04 (57/04) (Kottbus D. Ct., 24 May 2004); 

Judgment, No. 461 Cs 509 Js 1607/02 (Fürth D. Ct., 29 Mar. 2004).

67

 H.R. REP. NO. 105-551, pt. 1, at 9 (1998) (“The treaties do not require any change in the substance of 

copyright rights or exceptions in U.S. law.”); S. REP. NO. 105-190, 105th Cong., 2nd Session, at 11 (1998) 

(“The Committee believes that in order to adhere to the WIPO treaties, legislation is necessary in two 

primary areas – anticircumvention of technological protection measures and protection of the integrity of 

rights management information . . . . This view is shared by the Clinton administration.”); Statement of 

Bruce Lehman, Assistant Secretary of Commerce for Intellectual Property, Hearing on WIPO Copyright 

Treaties Implementation Act (H.R. 2281) and On-Line Copyright Liability Limitations Act (H.R. 2180) before 

the Subcomm. on Courts and Intellectual Property of the House Comm. on the Judiciary, 105th Cong., 1st 

Sess. (Sept. 16, 1997).

68 Notably the legislative history from 1965 made reference to the potential for the “transmission of works 

by . . . linked computers, and other new media of communication” that “may be expected to displace the 

demand for authors’ works by other users from whom copyright owners derive compensation.” 

Supplementary Register’s Report on the General Revision of the U.S. Copyright Law 14 (1965)

69 The right to “distribute” first emerged in the “Preliminary Draft for Revised U.S. Copyright Law” in late 

1962, and was substituted for “publish” to avoid the confusion that had developed surrounding the term 

“publication” and courts’ attempts to avoid the harsh effects of “publication” without proper notice 

(forfeiture of federal copyright protection). Menell note 64 at 39-43; Benjamin Kaplan, 

, 103 U. PA. L. REV. 469, 488-89 (1955).

70 Menell note 64 at 57; 2-8 NIMMER ON COPYRIGHT § 8.11[B][4][d]. At the time, the right to 

“publish” was understood to encompass the offering of copyright works to the public, and there was no 

requirement to prove actual distribution of copies. David O. Carson, 
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Since that time, a number of U.S. courts have addressed the “making available” right, 

primarily in the context of individuals uploading a work to a shared folder on a 

computer connected to a peer-to-peer network. A number of courts have concluded 

that the distribution right incorporates the concept of “making available” reflected in 

the WIPO Treaties.

71 Some others have disagreed.72

 All of these cases, however, have 

focused solely on the scope of the distribution right and predate the recent academic 

scholarship described above, reviewing previously unanalyzed legislative history.73 

Technological advances can also provide tools for right holders to engage in digital 

self-help. As the Senate Judiciary Committee explained in considering the DMCA, 

“copyright owners will hesitate to make their works readily available on the Internet 

without reasonable assurance that they will be protected against massive piracy.”74 

Rather than seeking to lock up their works and keep them off the Internet, copyright 

owners can use digital technologies to control their manner and terms of use. As 

expressed in the phrase that became widespread in the 1990s, “the answer to the 

machine is in the machine.”75

But the machine alone may be insufficient, as there will always be those who find ways 

to evade technological controls. Accordingly, governments have put in place legal 

safeguards to enhance the efficacy of these tools, in the hope of avoiding endless 

technological cat and mouse games and allowing energies to be channeled into more 

productive endeavors. While those determined to circumvent may never be completely 

dissuaded, the goal of the DMCA was to deter infringement, and tools that enable 

infringement, sufficiently to give breathing room to the legitimate market. 

Two types of technological tools used as adjuncts to copyright rights are now 

protected under U.S. and international law: TPMs and RMI. 

TPMs are technological tools designed to prevent the unauthorized use of or access to 

 

33 COLUM. J.L. & ARTS 135, 160-

61 (2010); RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES § 114 (1986) (“Where fairly 

possible, a United States statute is to be construed so as not to conflict with international law or with an 

international agreement of the United States.”).

71 239 F.3d 1004, 1014 (9th Cir. 2001) (“ ”); 

, 441 F. Supp. 2d 185, 191 (D. Me. 2006); , No. 04-CV2246, 2007 WL 576284 (E.D. Pa. Feb. 16, 2007); , Civil No. 07-3705, 2009 

WL 3152153, at *3 (E.D. Pa. Sept. 29, 2009). 

72 These cases have not, however, required direct evidence of the dissemination of copies, but have allowed 

proof based on circumstantial evidence or inference. , 579 F.Supp.2d 

1210, 1225 (D. Minn. 2008); , 542 F.Supp.2d 153, 169 (D. Mass. 2008); 

, 554 F. Supp. 2d 976, 981-84 (D. Ariz. 2008).

73 Menell note 64; 2-8 NIMMER ON COPYRIGHT § 8.11[B][4][d]. 

74 S. REP. NO. 105-190 (1998). 

75 Charles Clark, THE FUTURE OF COPYRIGHT IN THE DIGITAL 

ENVIRONMENT (Hugenholtz, ed.) (1996).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

works in digital form. TPMs include such as cryptographic locks, 

passwords and digital signatures, or such as a digital lock that prevents 

the copying of a particular film or computer program. They can serve the function not 

only of preventing infringement but also of enabling the existence of varied business 

models, making it possible for content to be delivered in different ways on different 

terms and price points.

The late 1990s saw the enactment of laws protecting TPMs used in connection with

copyrighted works. This idea was first proposed in 1995 in the NII Report, building on 

earlier laws directed at specific categories of works or devices,76 and adopted in general 

terms in the WIPO Internet Treaties, which require contracting parties to provide 

“adequate legal protection” and “effective legal remedies” against circumvention of 

TPMs.

77

 

The DMCA fleshes out the specifics in U.S. law. It prohibits not only the act of 

circumvention but also the manufacture or distribution of circumvention devices and 

services—the source of much greater damage to right holders.78 TPMs are defined 

broadly to include both access controls and use controls, whether used separately or in 

combination.79 

One challenging implementation issue was to ensure that TPMs are not deployed in 

such a way as to impede acts permitted under fair use and other copyright exceptions. 

To this end, the DMCA reflects a careful balance. First, there is an explicit distinction 

between the act of circumventing controls and the act of circumventing 

controls; the former is prohibited but the latter is not.80 This distinction recognizes 

that copyright exceptions may permit someone to use a work in ways not authorized 

by the copyright owner, but exceptions do not permit unauthorized access to a work. 

In addition, there is a provision stating that the protection of TPMs will not affect the 

other limitations or defenses to copyright infringement, including fair use.81 Finally, 

 

76 NII Report note 22, at 230-36. Among the early laws cited were: The Audio Home Recording Act, 

which added provisions that required digital audio recording devices to use a copy control system and 

prohibited circumvention of that system, 17 U.S.C. § 1002, and the Communications Act, which included a 

provision prohibiting the unauthorized decryption of satellite cable programming, 47 U.S.C. § 605(e)(4). In 

1991, the EU had also issued a directive that required Member States to prohibit “any act of putting into 

circulation, or the possession for commercial purposes of, any means the sole intended purpose of which 

is to facilitate the unauthorized removal or circumvention of any technical device which may have been 

applied to protect a computer program.” Council Directive on the Legal Protection of Computer Programs,

at art. 7(1)(c), 91/250/EEC (May 14, 1991).

77 WCT, note 32, art. 11; WPPT, note 32, art. 18.

78 The DMCA regulates two classes of activity: (1) circumvention – the act of descrambling a scrambled 

work, decrypting an encrypted work, or otherwise disabling, removing, or avoiding a technological 

measure, 17 U.S.C. § 1201(a)(3)(A); and (2) trafficking – the manufacture, distribution, sale, or offering to 

the public of devices, tools, or technologies that enable circumvention. 17 U.S.C. §§ 1201(a)(2), (b)(1).

79 17 U.S.C. §§ 1201(a), (b)(1).

80 With respect to access controls, both the act of circumvention and the trafficking in circumvention 

technologies are prohibited. With respect to use (or copy) controls, the act of circumvention is not 

prohibited but trafficking is. U.S. Copyright Office, 

3-6 (Dec. 1998), http://www.copyright.gov/legislation/dmca.

pdf. 

81 17 U.S.C. § 1201(c)(1).
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there are a number of specific exceptions to the prohibitions on circumvention, as well 

as a triennial rule-making process to establish additional exceptions for circumvention 

of access controls where needed to accommodate permitted uses (discussed below at 

pp. 26-27). 

To avoid inappropriate liability for multipurpose devices such as personal computers, 

the prohibition on circumvention extends only to those that: (1) are “primarily 

designed or produced” to circumvent TPMs; (2) have only limited commercially 

significant uses other than for circumvention; or (3) have been marketed as 

circumvention tools.82 The law also includes a “no mandate” provision, clarifying that 

technology developers are under no obligation to proactively design their products to 

accommodate any particular technological measure.83 

In implementing the WIPO Internet Treaties, many other countries have enacted similar 

laws. Generally, these laws cover both access and copy controls, prohibit the act of 

circumvention, and avoid liability for multipurpose devices. The areas of greatest 

variation relate to the definition of TPMs, whether the act of trafficking in 

circumvention tools is separately prohibited, and how to deal with impacts on 

legitimate uses, with a range of approaches adopted including safeguard mechanisms 

similar to the DMCA rule-making.

84

 TPM provisions modeled on the DMCA are also 

included in all subsequent U.S. free trade agreements.85

In the years since the DMCA’s passage, the anti-circumvention provisions have been 

the subject of litigation. Although complete analysis of the case law is beyond the 

scope of this paper, a few aspects are worth mentioning. First, the prohibition on 

circumvention has been upheld in the face of First Amendment and fair use 

challenges.86 And second, courts have generally rebuffed attempts to use the 

prohibition to further anti-competitive purposes related to the sale of consumer goods 

rather than to the goal of protecting copyright.87

 

82 17 U.S.C. §§ 1201(a)(2), (b)(1).

83 17 U.S.C. § 1201(c)(3).

84 WIPO, (2003), http://www.

wipo.int/edocs/mdocs/copyright/en/sccr_9/sccr_9_6.pdf; EU Copyright Directive art. 6; Australian 

Copyright Act of 1968 arts. 116AK-116AQ; Canadian Copyright Act arts. 41-41.21; Copyright Law of the 

People’s Republic of China art. 48(6); Japanese Copyright Law arts. 2(1)(xx), 30(1)(ii), 120bis; Japanese 

Unfair Competition Prevention Act Law arts. 2(1)(x)-(xi), 2(7), 3, 4, 21(2)(iv); Civil Code of the Russian 

Federation art. 1299.

85 ., United States-Australia Free Trade Agreement art. 17.4.7.

86 , 273 F.3d 429, 453-59 (2d Cir. 2001).

87 , 381 F.3d 1178, 1202 (Fed. Cir. 2004) (rejecting claim by 

garage door manufacturer that the sale of a universal garage door opener circumvented the technological 

measure that controlled access to the computer software that operated the garage door); 

, 387 F.3d 522, 549 (6th Cir. 2004) (rejecting similar claim in 

context of interoperable printer cartridges). , 629 F.3d 928, 

952 (9th Cir. 2011) (finding defendant liable for trafficking in technology that circumvented access 

controls used by online video game to prevent players from using unauthorized software to advance 

through the game faster).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

An additional technological adjunct to copyright is RMI, information about a protected 

work that enables its licensing. In the digital environment, RMI often takes the form of 

machine-readable metadata – “data about data.”88 Its availability is valuable for both 

owners and users, giving factual information that can facilitate legal uses of content. 

Its manipulation or deletion, on the other hand, can lead to false conclusions about 

proper payees and permitted uses, with an effect equivalent to common fraud. 

The 1996 WIPO Treaties require legal protection for RMI, defined as:

information which identifies the work, the author of the work, the owner 

of any right in the work, or information about the terms and conditions 

of use of the work, and any numbers or codes that represent such 

information, when any of these items of information is attached to a copy 

of a work or appears in connection with the communication of a work to 

the public.89 

The implementing provision in the DMCA makes it illegal to provide or distribute false 

RMI with the intent to induce, facilitate or conceal copyright infringement, or 

intentionally to remove or alter it with knowledge or reasonable grounds to know that 

doing so will have that effect.90 Other signatories to the WIPO Internet Treaties have 

adopted similar provisions, some essentially transposing the treaty language into 

national law.

91

The importance of RMI is intensifying as more copyrighted works and associated data 

become available online, with a corresponding need for consistency and completeness 

for licensing purposes. Legal protection can help to ensure that this information 

remains reliable as online licensing mechanisms continue to develop (as explored 

below in Section IV). In addition, the desire for attribution on the part of authors (even 

those who are not concerned about compensation) may be heightened in the online 

environment. Laws protecting the author’s name from falsification, alteration or 

removal can serve this function too. 

Another set of issues relating to the scope of rights has arisen in the context of new 

online services enabling consumers to stream entertainment content produced by third 

 

88 , National Information Standards Organization, (2004), 

http://www.niso.org/publications/press/UnderstandingMetadata.pdf.

89 See WCT, note 32 art. 12(2); WPPT, note 32, art. 19(2).

90 17 U.S.C. § 1202. The statute uses the term “copyright management information,” and defines it more 

precisely than the WIPO Treaties, including various carve-outs for public performances by radio and 

television broadcast stations. It also contains an exception for law enforcement, intelligence and other 

government activities, and limitations on liability with respect to certain transmissions by broadcast 

stations and cable systems. 

91 EU Copyright Directive art. 7; Australian Copyright Act of 1968 arts. 116B-116D; Canadian Copyright 

Act art. 41.22; Copyright Law of the People’s Republic of China art. 48(7); Japanese Copyright Law arts. 

2(1)(xxi), 113(3), 120 (iii); Civil Code of the Russian Federation art. 1300. RMI provisions are also 

included in many U.S. FTAs. , United States-Australia Free Trade Agreement art. 17.4.8.
INTERNET POLICY TASK FORCE

parties into their homes. In recent years a number of licensed online video streaming 

services have launched, and many cable television providers offer extensive ondemand catalogs to their subscribers. Other services have launched without licenses, 

using technology developed to transmit individual streams from individually-made 

copies, rather than broadcasting to the public from a single source copy. These 

services, which rely on recent case law in the context of a cable operator with 

underlying content licenses,

92 pose a challenge to the traditional dividing lines between 

public and private performance, and raise a host of questions. If any consumer can 

stream the content she wants on-demand, is this act “public” as defined by the 

Copyright Act if the technology is structured so that the stream comes from a copy

made by a third party for each individual? Does it make a difference if the consumer 

already has legal access in another form to the content being streamed? Does it matter 

how the source copies are made, and by whom? Such interpretive tensions in the face 

of changing delivery models are the inevitable result of a system based on a bundle of 

specific rights, each drafted in the context of then-existing technologies. 

Courts are grappling with this issue and it remains to be seen how it will be resolved.93 

And while the answers may require careful parsing of statutory language and 

legislative history, the underlying policy question is which businesses will benefit to 

what extent from new technologies that meet the consumer’s desired enjoyment of 

content. The result of these cases could affect, for example, the viability and scope of 

new licensed business models such as online video subscription services. To the 

extent that judicial decisions undermine a meaningful public performance right, 

Congressional action may be needed.

94

Digital technologies have also given rise to a need to update copyright exceptions.

Such updates must be approached against the backdrop of the general obligation to 

comply with the “three-step test” of international law: exceptions to copyright must be 

limited to certain special cases, and must not conflict with a normal exploitation of the 

work or unreasonably prejudice the legitimate interests of the right holder.

95

 At the 

same time, it is clear that existing exceptions can be extended into the digital 

 

92 , 536 F.3d 121.

93

., 712 F.3d 676 (2d Cir. 2013) (“ ”); 

.,No. CV 12-6921-GW, 2012 WL 6784498 (C.D. Cal. Dec. 27, 2012) 

(“ ”). The European Court of Justice recently held that the unauthorized live streaming of TV 

broadcasts violates the EU Copyright Directive’s exclusive right of “communication to the public.” 

, Case C 607/11 at ¶ 40 (ECJ Mar. 7, 2013).

94 17 U.S.C. § 106(4). A public performance right is required by a number of international treaties which 

the United States has ratified, generally labeled as the right of “communication to the public.” ,

Berne Convention note 32, arts. 11, 11 , 11 , 14, 14 ; TRIPS Agreement note 32, arts. 9,

14; WCT note 32, art. 8. 

95 Berne Convention, note 32, art. 9(2); TRIPS Agreement, note 32, art. 13; WCT,

note 32, art. 10; WPPT, note 32, at art. 16; Beijing Treaty on Audiovisual Performances at art. 13(2); 

Panel Report, , WT/DS160/R (June 15, 2000). Free

trade agreements between the United States and other countries likewise include the obligations of the 

three-step test. , United States-Australia FTA art. 17.4.10(a); Dominican Republic-Central AmericaUnited States FTA art. 15.5.10(a); U.S.-Singapore FTA art. 16.4.2(a).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

environment, and new ones adopted as appropriate.96 In the U.S., several long-standing 

exceptions have been recalibrated through legislative amendments or judicial 

interpretation, and new ones adopted or considered. 

The fair use doctrine, developed by the courts and codified in the 1976 Copyright Act, 

is a fundamental linchpin of the U.S. copyright system.97 Along with the 

idea/expression dichotomy, the fair use doctrine is a critical means of balancing “the 

interests of authors and inventors in the control and exploitation of their writings and 

discoveries on the one hand, and society’s competing interest in the free flow of ideas,

information, and commerce on the other hand.”

98

 It is also a vital “built-in First 

Amendment accommodation[]” in copyright law.99 Because fair use requires an 

assessment of the “fairness”" of the use in question, based on a balancing of several 

factors, it is inherently fact-intensive. Accordingly, in any area where there is not yet 

established precedent, it may be difficult for prospective users of copyrighted works to 

predict whether a fair use defense will succeed or fail.100 

The corresponding advantage of fair use is its flexibility; the doctrine is highly 

adaptable to new technologies and has already played an important role in the online 

environment. Fair use has been applied by the courts to enable, among other things, 

the use of thumbnail images in Internet search results,101 caching of web pages by a 

search engine,102 and a digital plagiarism detection service.103 

 

96 WIPO, , Agreed Statement concerning Article 

10 (WIPO Doc. No. CFNF/DC/96) (1996) (“It is understood that the provisions of Article 10 permit 

Contracting Parties to carry forward and appropriately extend into the digital environment limitations and 

exceptions in their national laws which have been considered acceptable under the Berne Convention. 

Similarly, these provisions should be understood to permit Contracting Parties to devise new exceptions 

and limitations that are appropriate in the digital network environment. It is also understood that Article 

10(2) neither reduces nor extends the scope of applicability of the limitations and exceptions permitted by 

the Berne Convention.”); WIPO

, Agreed Statement concerning Article 16 (WIPO Doc. No. CFNF/DC/96) (1996).

97 17 U.S.C. § 107. Whether a particular use of a copyrighted work qualifies as fair use requires a court to 

consider all relevant factors, including: (1) the purpose and character of the use, including whether such 

use is of commercial nature or is for nonprofit education purposes; (2) the nature of the copyrighted 

work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; 

and (4) the effect of the use upon the potential market for, or value of, the copyrighted work. Most other 

countries do not have a comparable fair use doctrine, but rely on specific defenses sometimes in 

combination with the generally narrower concept of “fair dealing.” PAUL GOLDSTEIN & BERNT HUGENHOLTZ,

INTERNATIONAL COPYRIGHT: PRINCIPLES, LAW AND PRACTICE 362-64 (2d ed. 2010); Jonathan Band & 

Jonathan Gerafi, (Mar. 2013) http://infojustice.org/wp-content/

uploads/2013/03/band-and-gerafi-2013.pdf. 

98

, 464 U.S. at 429.

99 , 132 S. Ct. 873, 890 (2012) (internal quotation marks and citation omitted).

100 Peter S. Menell & Ben Depoorter, , 101 CAL.

L. REV. (forthcoming 2014); MICHAEL C. DONALDSON, CLEARANCE AND COPYRIGHT: EVERYTHING YOU NEED TO KNOW 

FOR FILM AND TELEVISION 29, 363-67 (3d ed. 2008).

101 , 336 F.3d 811, 815-16 (9th Cir. 2003); , 508 

F.3d 1146, 1163-68 (9th Cir. 2007); , No. 12 Civ. 

1087, -- F. Supp. 2d --, 2013 WL 1153979 (S.D.N.Y. Mar. 21, 2013) (rejecting fair use defense for 
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The status of several types of common digital uses remains unsettled, however. While 

time-shifting of over-the-air broadcast programming has been held to be fair use,104

similar consumer activities known as “format-shifting” and “space-shifting” that 

involve the copying of entire works to permit personal use on different types of 

devices have not yet been definitively addressed by U.S courts.105 It is an open question 

whether having paid for enjoyment of a work in one format or location should 

eliminate the need to pay again for its enjoyment in a different format or location. 

Over the years, as the courts have defined the contours of fair use, there have been 

several public and private initiatives aiming to provide greater specificity and 

predictability to its application. At the time of enactment of the 1976 Copyright Act, a

set of guidelines for educational users (“Classroom Guidelines”) were adopted and 

approved by Congress.106 Once digital technologies became prevalent, the Working 

Group on Intellectual Property Rights convened a Conference on Fair Use (CONFU) in 

1994 “to bring together copyright owner and user interests to discuss fair use issues 

and, if appropriate and feasible, to develop guidelines for fair uses of copyrighted 

works by librarians and educators.”

107

 After a four-year process,no consensus was 

achieved on the overall scope of fair use guidelines, although one set of such 

guidelines was developed for educational multimedia. CONFU also resulted in 

proposals for fair use guidelines for digital images and distance learning that were 

circulated for discussion.108 Despite the lack of consensus, the guidelines and 

proposals that came out of that process remain useful resources. 

More recently, others have undertaken efforts to develop fair use guidelines for 

various user communities. American University’s Center for Social Media, in 

 

subscription news clipping service that used algorithm similar to search engines to locate and excerpt 

news stories).

102 , 412 F. Supp. 2d 1106, 1117-23 (D. Nev. 2006).

103 , 562 F.3d 630, 637-45 (4th Cir. 2009).

104

, 464 U.S. at 429. The scope of time-shifting as fair use is currently being challenged in litigation 

between major broadcast networks and the Dish satellite service involving a feature of its in-home 

recorders that allows consumers to automatically skip commercials during playback. Such ad-skipping 

features raise additional considerations beyond those in given the potential impact on the 

advertising-funded model for broadcast television. , -- F. 

F.3d --, 2013 WL 3814917 (9th Cir. July 24, 2013).

105 Register of Copyrights, 

162-66

(Oct. 2012), http://www.copyright.gov/1201/2012/Section_1201_Rulemaking%20_2012_

Recommendation.pdf. In many other countries, these types of consumer activities are treated as “private 

copying,” generally exempted from liability in return for remuneration (“levies”) paid to right holders by 

the manufacturers of the devices or media used to make the copies. EU Copyright Directive at art. 

5(2)(b). Japan, Canada and Australia also have similar levy systems. For information about the various 

private copying schemes around the world, WIPO, (2012), 

http://www.wipo.int/freepublications/en/copyright/1037/wipo_pub_1037.pdf.

106 H.R. REP. NO. 1476 at 68-71 (1976).

107 Bruce A. Lehman, 

2 (1998), http://www.uspto.gov/web/offices/dcom/olia/confu/

confurep.pdf. 

108 at 17.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

conjunction with the University’s Washington College of Law, has created a set of tools 

for creators, teachers, and researchers to better understand the application of fair use 

to their particular disciplines.109 The Copyright Advisory Office established at 

Columbia University in 2008 has collected and developed resources on the relationship 

between copyright law and the work of the university community, including a fair use 

checklist.110 And the College Art Association recently announced a major grant to 

develop a code of best practices for fair use “in the creation and curation of artworks 

and scholarly publishing in the visual arts.”111 

The Task Force supports private efforts to explore the parameters of fair use, and 

notes that best practices produced with input from both user groups and right holders 

can offer the greatest certainty. To further assist in providing guidance to the creative 

community, the IPEC’s 2013 Joint Strategic Plan for Intellectual Property Enforcement 

proposes that the Copyright Office in coordination with the Administration publish 

and maintain an index of major fair use court decisions to serve as a helpful 

resource.112 

One specific exception that has already been updated once relates to library 

preservation and research activities. In 1998, the DMCA amended Section 108 of the 

Copyright Act to allow libraries and archives to take advantage of digital technologies 

when engaging in preservation activities. Libraries and archives are now permitted to 

make up to three copies or phonorecords in digital as well as analog formats, for 

purposes of preservation and security or for deposit for research use in another library 

or archive.113 The amendment imposed restrictions on the use of any digital copies 

made, in order to ensure that they are not freely distributed outside library premises. 

By 2006, however, there was concern that the amendments had been outstripped by 

technology and needed further updates. Libraries and archives were concerned about 

the impact digital technologies were having on their abilities to properly serve their 

constituents. Issues included the scope of works covered by Section 108, the ability of 

libraries to use outside contractors with specialized expertise in emerging digital 

 

109 http://www.centerforsocialmedia.org. The Center, working with stakeholders in various areas, has 

developed guidelines and codes for academic and research libraries; poetry; open course ware; media 

literacy education; online videos; documentary filmmakers; scholarly research in communication; and 

dance-related materials. For example, the code of best practices for academic and research libraries was 

created in conjunction with the Association of Research Libraries. http://www.arl.org/focus-areas/

copyright-ip/fair-use/code-of-best-practices.

110

 http://copyright.columbia.edu/copyright. Other online resources available from the Copyright 

Advisory Office are a Copyright Quick Guide, fair use case summaries, materials on distance education, 

links to other online resources, including major fair use guidelines issued during the period 1976-1998, 

and a blog on current developments. 

111 Janet Landay, , College Art Association, http://www.collegeart.org/

news/2013/01/14/caa-receives-major-mellon-grant/ (Jan 14, 2013).

112 U.S. Intellectual Property Enforcement Coordinator, 

18 (June 2013) (“2013 Joint Strategic Plan”) http://www.whitehouse.gov/sites/

default/files/omb/IPEC/2013-us-ipec-joint-strategic-plan.pdf

113 17 U.S.C. § 108(b).
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technologies, and the ability to capture online content for preservation purposes. 

Right holders and publishers, on the other hand, wanted any exceptions to be confined 

to certified institutions to help maintain and ensure the security of any digital copies. 

To help guide the discussion of how best to transition into the digital era and to 

ensure that Section 108 did not become technologically irrelevant, the Copyright Office 

convened an independent Study Group. In its final Report, the Study Group 

recommended a number of legislative changes to update the exceptions for libraries 

and archives,

114 and noted that additional changes might be necessary.115

 In the 

interim, one library group has developed a set of guidelines for video preservation 

under Section 108, which may prove to be a useful resource.116

Although the recommendations of the Study Group have not yet been acted on, the 

Copyright Office has recently reopened its consideration of Section 108, and will be 

making recommendations going forward.117 The Task Force supports the Copyright 

Office’s efforts to ensure that libraries and archives can benefit from the use of 

current technologies while safeguarding the rights of right holders. We note that an 

updated Section 108 could provide a positive model for international discussions at 

WIPO and elsewhere.118

Updates have also been made to the exceptions in the Copyright Act dealing with 

distance education, amending it to better enable the use of digital technologies. A 

1999 report to Congress by the Register of Copyrights119 recommending an exception 

for digital distance education became the basis for the Technology, Education, and 

 

114 31-94 (March 2008), http://www.section108.gov/docs/

Sec108StudyGroupReport.pdf. Among other items, the Report recommended that museums should be 

included in Section 108 eligibility; a new exception should be added to permit certain qualified libraries 

and archives to make preservation copies of at-risk published works prior to any damage or loss; a new 

exception should be added to permit libraries and archives to capture and reproduce publicly available 

Web sites and other online content for preservation purposes and to make those copies accessible to users 

for private study, research or scholarship; and libraries and archives should be permitted to make a 

limited number of copies, as reasonably necessary, to create and maintain a single replacement or 

preservation copy.

115 at 95-112.

116 Video at Risk: Strategies for Preserving Commercial Video Collections in Libraries, Section 108 

Guidelines (Dec. 2012), http://www.nyu.edu/tisch/preservation/research/video-risk/

VideoAtRisk_SECTION108_Guidelines_2013.pdf. 

117 As part of this process, the Copyright Office conducted a symposium in February 2013 on Copyright 

Exceptions for Libraries in the Digital Age: Section 108 Reform. Revising Section 108: Copyright 

Exceptions for Libraries and Archives, U.S. Copyright Office, http://www.copyright.gov/docs/section108/ 

118 The issue of limitations and exceptions for libraries and archives has been an ongoing topic of 

discussion for the WIPO Standing Committee on Copyrights, with discussions as recently as November 

2012. WIPO, 

(Nov. 19, 2012), http://www.wipo.int/edocs/mdocs/copyright/en/sccr_25/sccr_25_1.pdf; 

WIPO, (Aug. 2008), 

http://www.wipo.int/edocs/mdocs/copyright/en/sccr_17/sccr_17_2.pdf. 

119 U.S. Copyright Office, (May 1999), 

http://www.copyright.gov/reports/de_rprt.pdf. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Copyright Harmonization (TEACH) Act of 2002.120 Under the TEACH Act, which 

amended sections 110(2) and 112(f) of the Copyright Act, instructors may use a wider 

range of works in distance learning environments; students may participate in distance 

learning sessions from virtually any location; and participants enjoy greater latitude 

when it comes to storing, copying and digitizing materials. In order to benefit from 

these provisions, academic institutions must comply with a set of criteria intended to 

protect against potential piracy of digital content and to preserve the viability of 

markets for educational materials.121 

In the past ten years, digital distance education in the United States has flourished. It 

has been reported, however, that few institutions have taken advantage of the TEACH 

Act exception in part due to its technological requirements.

122 The development of the 

distance education market may instead be the result of some form of licensing, 

reliance on fair use, or a combination of both. The Register of Copyrights has recently 

urged congressional review of copyright issues related to higher education, including 

distance education.123

Digital technologies can also be an important means of providing access to 

copyrighted works to the visually impaired. A 1996 amendment to the Copyright Act 

established a new exception to promote such access; the Chafee Amendment provided 

that an “authorized entity,” defined as “a nonprofit organization or a governmental 

agency that has a primary mission to provide specialized services relating to training, 

education, or adaptive reading or information access needs of blind or other persons 

with disabilities,” could reproduce or distribute certain works in specialized formats, 

including digital formats, exclusively for use by such persons.124 More than fifteen 

years later, it may be time for further updates. The Register of Copyrights recently 

noted that some aspects of Section 121 “appear ill-suited to the digital world and 

could benefit from comprehensive review by Congress.”125

In addition, exemptions to the prohibition on circumvention of TPMs to ensure access 

to e-books by the visually impaired have been repeatedly granted in the DMCA rule-

 

120 Pub. L. 107-273, Sec. 13301. 

121 H.R. Rep. 107-687, at 11-13 (2002). 

122 Christopher L. Ashley, (June 22, 2004), 

http://net.educause.edu/ir/library/pdf/erb0413.pdf; Kenneth Crews, 

(Aug. 17, 2010), http://copyright.columbia.

edu/copyright/files/2010/08/teach-act-summary-by-kenneth-crews.pdf; Digital Media Project, 

(Aug. 9, 2006),

http://cyber.law.harvard.edu/media/files/copyrightandeducation.html.

123 Maria Pallante, Manges Lecture note 31 at 19.

124 17 U.S.C. § 121. 

125 Register of Copyrights, 

24 (Oct. 

2012), http://www.copyright.gov/1201/2012/Section_1201_Rulemaking%20_2012_

Recommendation.pdf.
INTERNET POLICY TASK FORCE

makings discussed below, based on findings that some TPMs have been developed and 

deployed in ways that prevent such access.126 

At the international level, WIPO adopted a treaty in June 2013 to improve access to 

published works for the blind, visually impaired and other individuals with print 

disabilities.127 The treaty is intended to promote the international availability of 

accessible e-books and other digital formats as well as traditional formats such as 

braille. The United States played a leadership role in these negotiations.

The DMCA’s prohibitions against circumvention of TPMs contain a number of specific, 

detailed exceptions. One allows nonprofit libraries, archives and educational 

institutions to circumvent technological measures in order to make a good faith 

determination of whether to acquire a copy of a work that is not reasonably available 

in another format.128 Others allow circumvention in specific circumstances for federal 

law enforcement and intelligence activities,129 reverse engineering of a computer 

program,130 encryption research,131 preventing minors from accessing material on the 

Internet,132 or protecting personally identifying information.133

In addition to these enumerated exceptions, a new rule-making procedure was 

established as a safety valve against the potential application of TPMs in such a way as 

to prevent otherwise lawful uses. The Librarian of Congress is authorized (based on a

public fact-gathering process and the recommendation of the Register of Copyrights 

upon consultation with NTIA) to designate certain classes of works as exempt for a 

three-year period from the prohibition against the act of circumventing access control 

measures.134 This mechanism has operated to identify a number of circumstances in 

which an exemption is appropriate.135 Upon demonstrating that the anti-circumvention 

 

126 The exemption was first proposed in the 2003 rulemaking, and has been adopted in some form by the 

Library of Congress in each subsequent rulemaking. Copyright Office, Exemption to Prohibition on 

Circumvention of Copyright Protection Systems for Access Control Technologies, Final Rule, 77 Fed. Reg. 

65260, 65262-63 (Oct. 26, 2012).

127 WIPO, (June 27, 

2013) http://wipo.int/pressroom/en/articles/2013/article_0017.html. The text of the treaty is 

available at http://wipo.int/meetings/en/doc_details.jsp?doc_id=241683. 

128 17 U.S.C. § 1201(d). 

129 17 U.S.C. § 1201(e). 

130 17 U.S.C. § 1201(f). 

131 17 U.S.C. § 1201(g).

132 17 U.S.C. § 1201(h).

133 17 U.S.C. § 1201(i). 

134 Specifically, the Librarian has the authority to exempt users who "are, or are likely to be in the 

succeeding three-year period, adversely affected . . . in their ability to make noninfringing uses . . . of a 

particular class of copyrighted works.” 17 U.S.C. § 1201(a)(1)(C). Exemptions are not authorized, however, 

for the ban on trafficking in circumvention devices or services. As noted above, there is no prohibition on 

circumventing use controls.

135 A similar safety valve mechanism has been established in a number of other countries. In the EU, for 

example, the Copyright Directive requires Member States to take appropriate measures to ensure that 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

prohibition has had or is likely to have a substantial adverse impact on a noninfringing use of a particular class of works,136 proponents have succeeded in obtaining 

several exemptions in each of the rulemaking procedures since enactment of the 

DMCA.137 Over the years, new exemptions have been added, while others have 

expanded, contracted, or expired.

Some of these exemptions have raised policy issues going beyond the scope of 

copyright, as technological protections for software have been relied on to limit the 

interoperability or functioning of consumer devices. Most recently, the decision not to 

continue the exemption for cell phone unlocking as applied to newly purchased 

phones has raised controversial issues of telecommunications policy.138 The 

Administration has made clear its position “that consumers should be able to unlock 

their cell phones,” while respecting the process undertaken by the Librarian of 

Congress.139 The Administration and Library of Congress agree that the DMCA rulemaking process “was not intended to be a substitute for deliberations of broader 

public policy”

140 relating to this telecommunications issue.

 

right holders make available to beneficiaries of certain exceptions the means to benefit from them, where 

right holders have not already done so voluntarily. Copyright Directive at art. 6(4). How countries 

implement these requirements is a question of national law. In the United Kingdom, a process has been 

established whereby a user may file a complaint with the Secretary of State, who will then open an 

investigation to determine whether there is a voluntary agreement to enable a permitted act related to the 

underlying work and, if one does not exist, will require the copyright owner to ensure that the user can 

use the work under the relevant exception. U.K. Copyright Designs and Patent Act (CDPA) at § 296ZE.

136 17 U.S.C. §§ 1201(a)(1)(B), (C). 

137 Copyright Office, Exemption to Prohibition on Circumvention of Copyright Protection Systems for 

Access Control Technologies, 65 Fed. Reg. 64556, 64574 (Oct. 27, 2000); Copyright Office, Exemption to 

Prohibition on Circumvention of Copyright Protection Systems for Access Control Technologies, 68 Fed. 

Reg. 62011, 62013-14 (Oct. 31, 2003); Copyright Office, Exemption to Prohibition on Circumvention of 

Copyright Protection Systems for Access Control Technologies, 71 Fed. Reg. 68472, 68473-77 (Nov. 27, 

2006); Copyright Office, Exemption to Prohibition on Circumvention of Copyright Protection Systems for 

Access Control Technologies, 75 Fed. Reg. 43825, 43827-34 (July 27, 2010); Copyright Office, Exemption to 

Prohibition on Circumvention of Copyright Protection Systems for Access Control Technologies, 77 Fed. 

Reg. 65260, 65262-71 (Oct. 26, 2012). The five current exemptions relate to: (1) motion pictures on DVDs 

or delivered through online services circumvented for the purpose of criticism or comment in certain 

types of works and for certain educational purposes; (2) motion pictures on DVDs or delivered through 

online services circumvented for the purpose of research and development of captioning or descriptive 

audio technologies for persons with certain disabilities; (3) computer programs that enable wireless 

telephone handsets to execute lawfully-acquired software applications for purposes of interoperability 

(smartphone “jail-breaking”); (4) computer programs that enable wireless telephone handsets acquired 

before late January 2013 to connect to an alternative network (smartphone “unlocking”); and (5) literary 

works distributed in e-book format to permit use of assistive technologies for the blind, visually impaired, 

deaf, or hard of hearing. 

138 Jon Healey, , LOS ANGELES TIMES (Feb. 

18, 2013), http://www.latimes.com/business/technology/la-fi-tn-cellphone-unlocking-petition20130218,0,6053343.story. 

139 R. David Edelman, Official White House Response to Make Unlocking Cell Phone Legal, 

(Mar. 4, 2013), https://petitions.whitehouse.gov/petition/makeunlocking-cell-phones-legal/1g9KhZG7. 

140 Statement from the Library of Congress Regarding White House Statement Today in Response to a 

Petition on Section 1201 Rulemaking (Mar. 4, 2013), http://www.loc.gov/today/pr/2013/13-

041.html also White House Response note 139. Several legislative proposals have since been 

introduced in an effort to address this issue. Unlocking Consumer Choice and Wireless Competition 
INTERNET POLICY TASK FORCE

There has been considerable discussion in recent years of the value and copyright 

treatment of “remixes”141 – works created through changing and combining existing 

works to produce something new and creative.142 Often, these works are part of a 

growing trend of “user-generated content” that has become a hallmark of today’s 

Internet, including sites like YouTube. Advances in digital technology have made 

remixing existing works easier and cheaper than ever before and provided greater 

opportunities for enhanced creativity.143 But because remixes typically rely on 

copyrighted works as source material – often using portions of multiple works – they 

can raise daunting licensing issues.144

Under current U.S. law, some remixes may qualify as a fair use of the copyrighted 

material they draw on. They are likely to be considered transformative, taking parts of 

the original work and altering it with new meaning or purpose,

145 so the key questions 

will ordinarily be whether they are commercial, how much they use from any given 

work, and the extent to which they can serve as a substitute in the market. A body of 

precedent already exists with respect to fair use claims for quoting the works of others 

in new works of art. One line of cases involves parody;

146 others deal with 

“appropriation art.”

147

 The results have turned in large part on the extent to which the 

second artist was either transforming or commenting on the source. Music sampling, 

however, has generally not been excused as fair use, and continues to be the subject of 

 

Act, S. 517, H.R. 1123, 113th Cong. (2013); Wireless Device Independence Act, S. 467, 113th Cong. (2013); 

Wireless Consumer Choice Act, S. 481, 113th Cong. (2013); Unlocking Technology Act of 2013, H.R. 1892, 

113th Cong. (2013). 

141 Other terms such as “mashups” or “sampling” are also used, especially with reference to music.

142 KEMBREW MCLEOD & PETER DICOLA, CREATIVE LICENSE: THE LAW AND CULTURE OF DIGITAL SAMPLING (2011); 

LAWRENCE LESSIG, REMIX: MAKING ART AND COMMERCE THRIVE IN THE HYBRID ECONOMY (2009) (arguing that the 

health, progress, and wealth creation of a culture are tied to a participatory remix process); Lawrence 

Lessing, , 2004 UTAH L. REV. 961 (2004); Electronic Frontier Foundation, 

http://www.teachingcopyright.org/curriculum/hs/3. 

143 Among the most well-known works created this way is the by the musician Danger Mouse, 

which combined the vocal tracks of Jay-Z’s with samples of the instrumental tracks from the 

Beatles’ . 

144 The remix itself, assuming a modicum of creativity, should qualify as a derivative work protected by 

copyright law, but the copyright will not extend to any part in which the preexisting material is used 

unlawfully. 17 U.S.C. § 103(a).

145 Whether, and to what extent, a new use is transformative “is not absolutely necessary for a finding of 

fair use,” but “the goal of copyright, to promote science and the arts, is generally furthered by the creation 

of transformative works.” , 510 U.S. 569, 579 (1994). Ultimately, “the 

more transformative the new work, the less will be the significance of other factors, like commercialism, 

that may weigh against a finding of fair use.” 

146

.; , 800 F. Supp. 2d 991, 1000-02 (E.D. Wis. 

2011); , 602 F. Supp. 2d 499, 508-11 (S.D.N.Y. 2009).

147 , 714 F. 3d 694 (2d Cir. 2013); , 467 F.3d 244, 251-59 (S.D.N.Y. 2006);

, 448 F.3d 605, 608-615 (2d Cir. 2006); 

960 F.2d 301, 310 (2d Cir.1992), 506 U.S. 934 (1992).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

litigation.

148

 

In some contexts, licensing mechanisms have been developed as a less risky alternative 

to relying on fair use. Particularly promising are those that rely on commercial 

intermediaries to enable remixes by their individual users. One model is YouTube’s 

Content ID system, which allows users to post remixes that may be monetized by the 

relevant right holders.149 Under this system, however, it is the right holder’s decision 

whether to allow the posting. Another tool is the Creative Commons license (discussed 

in more detail below at p. 88) through which creators can authorize remixes of their 

works subject to certain provisos.

150

 Other online licensing mechanisms (discussed 

below at pp. 87-89) may also be available as alternatives for licensing specific content 

quickly and easily. 

In addition, best practices and industry-specific guidelines have been developed to 

help artists looking to use existing works make informed choices, including a code of 

best practices specifically for creating online videos.

151

Despite these alternatives, a considerable area of legal uncertainty remains. The 

question is whether the creation of remixes is being unacceptably impeded. There is 

today a healthy level of production, but clearer legal options might result in even more 

valuable creativity. Is there a need for new approaches to smooth the path for 

remixes, and if so, are there efficient ways that right holders can be compensated for 

this form of value where fair use does not apply? Can more widespread 

implementation of intermediary licensing play a constructive role? Should solutions 

such as microlicensing to individual consumers, a compulsory license, or a specific 

exception be considered? Are any of these alternatives preferable to the status quo, 

which includes widespread reliance on uncompensated fair uses? The Task Force will 

convene a series of roundtables to examine this issue.

The Internet’s exciting potential for making available comprehensive collections of 

works has highlighted the problems of locating the owners of copyright in obscure or 

older works and enabling access to the full range of the world’s cultural and historical 

heritage.

Orphan works are copyrighted works whose owners cannot be identified or located, 

 

148 383 F.3d 390 (6th Cir. 2004); 

780 F. Supp. 182 (S.D.N.Y. 1991); Marc Hogan, 

, SPIN (Oct. 1, 2012), http://www.spin.com/#articles/

kanye-west-my-beautiful-dark-twisted-fantasy-sample-lawsuit-tuf-america. 

149 For a description of the Content ID system and its operations YouTube – Content ID, http://www.

youtube.com/t/contentid. 

150 Creative Commons – About The Licenses, http://creativecommons.org/licenses/. 

151 American University, Center for Social Media, 

http://centerforsocialmedia.org/fair-use/related-materials/codes/code-best-practices-fair-use-onlinevideo. American University, Center for Social Media, http://www.centerforsocial

media.org/fair-use/videos/podcasts/remix-culture.
INTERNET POLICY TASK FORCE

making it impossible to negotiate terms for their use.152 The development of 

comprehensive digital resources necessarily entails the inclusion of large numbers of 

works, some of which will be orphaned. Although difficult to quantify, the number of 

orphan works appears to be substantial, at least in the context of library and archive 

collections.153 This is not a new issue, but the extent of the problem has surely grown, 

given the abandonment of copyright formalities (discussed below at pp. 91-92) and the 

extension of copyright terms; there are simply more older works, and works without 

clear indicia of ownership, that are protected by copyright.154 

U.S. law contains a few provisions that can ease the ability to make specific uses of 

orphan works in some circumstances.155 But “[w]here the proposed use goes beyond an 

exemption or limitation to copyright . . . the user cannot reduce the risk of copyright 

liability for such use, because there is always a possibility, even if remote, that a 

copyright owner could bring an infringement action after that use has begun.”156 As 

the Copyright Office recently noted, “[t]his outcome is difficult if not impossible to 

reconcile with the objectives of the copyright system and may unduly restrict access to 

millions of works that might otherwise be available to the public (e.g., for use in 

research, education, mainstream books, or documentary films).”157

In a 2006 Report, the Copyright Office endorsed a legislative solution based on limiting 

remedies against good faith users of orphan works. Legislation was introduced in 

2006 and again in 2008 that closely tracked the Report’s recommendations.158 The 

legislation would have permitted the use of orphan works when the user had made “a 

qualifying search, in good faith, to locate and identify the owner of the infringed 

 

152 U.S. Copyright Office, Report on Orphan Works at 2 (2006), http://www.copyright.gov/

orphan/orphan-report.pdf (“Orphan Works Report”). The Copyright Office described the most common 

obstacles to successfully identifying and locating a copyright owner as including inadequate identifying 

information on copies of works; inadequate information about copyright ownership due to changes in 

ownership or changes in the copyright owner’s circumstances; limited existing copyright ownership 

information sources; and difficulties researching copyright information.

153 David R. Hansen, , Berkeley Digital Library Copyright Project, 

White Paper #1 (2011). One study on books estimates that more than 25% of twentieth century 

publications should be considered orphans. Michael Cairns, , 

Personanondata, http://personanondata.blogspot.com/2009/09/580388-orphan-works-give-or-take.html

(Sept. 9, 2009). Many of the estimates focus on library and museum collections. A study of museums, 

archives, and libraries in the United Kingdom resulted in a conservative estimate of 25 million orphan 

works. JISC, 

6 (2009). The British Library has previously estimated that 40% of all 

books and other print works are orphaned. Gowers Review of Intellectual Property 69 (Dec. 2006), 

http://www.official-documents.gov.uk/document/other/0118404830/0118404830.pdf. 

154 Marybeth Peters, The Importance of Orphan Works Legislation, U.S. Copyright Office, 

http://www.copyright.gov/orphan/OWLegislation/ (Sept. 25, 2008).

155

, 17 U.S.C. §§ 108(h), 115(b), 504(c)(2).

156 Orphan Works Report note 152 at 1

157 Copyright Office, Orphan Works and Mass Digitization, 77 Fed. Reg. 64555 (Oct. 22, 2012) (“Orphan 

Works NOI”).

158 Shawn Bentley Orphan Works Act of 2008, S. 2913, 110th Cong. (2008); the Orphan Works Act of 

2008, H.R. 5889, 110th Cong. (2008); Orphan Works Act of 2006, H.R. 5439, 109th Cong. (2006).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

copyright” and provided attribution where feasible.159 Although the user could be 

liable for infringement if the copyright owner later appeared, any damages would have 

been limited to a reasonable licensing fee based on what a willing buyer and willing 

seller would have agreed to in advance.160 The goal was to put copyright owners and 

potential users in the positions they would have occupied in a normal marketplace 

negotiation, if the copyright owner had been identified and located prior to the use of 

the work.161 Although the 2008 bill attracted much interest and support, it did not 

ultimately become law.

162

 

Since that time, the issue has also been confronted in U.S. courts. In a copyright 

infringement lawsuit brought by publishers and authors against Google, a proposed 

settlement of the publishers’ claims included provisions affecting orphan works. The 

case involves Google’s scanning of millions of copyrighted works in the collections of 

several major research libraries in order to create an online, searchable library. 

Although the U.S. government applauded some of the practical advantages of the 

settlement, including the creation of a registry by which authors could claim their 

works as well as increased access for the general public and people with print 

disabilities, it ultimately opposed the proposed settlement because certain aspects 

were at odds with the basic premises of copyright law. The settlement was ultimately 

rejected by the district court.163 The court explained that “questions of who should be 

entrusted with guardianship over orphan works, under what terms, and with what 

safeguards, are matters more appropriately decided by Congress than through an 

agreement among private, self-interested parties.”164 

Outside the United States, a number of countries have either enacted or recently 

proposed orphan works legislation. Canada has had such legislation since 1985, 

offering government-issued licenses for the use of orphan works on a case-by-case 

 

159 Shawn Bentley Orphan Works Act of 2008 at § 2. The bill set out requirements for a “qualifying 

search,” based around the principle of a “diligent effort that is reasonable under the circumstances,” and 

that included searching the Copyright Office’s records and other sources of copyright ownership 

information. The Copyright Office would also have been instructed to create and maintain categoryspecific recommended practices to help guide searches. 

160

.

161 Peters note 154. 

162 The Shawn Bentley Orphan Works Act of 2008 passed the Senate by unanimous consent on September 

26, 2008, and was referred to the House Committee on the Judiciary, where a similar bill (H.R. 5889) was 

also pending. , 76 PATENT,

TRADEMARK, & COPYRIGHT J. 754 (Oct. 3, 2008). The House failed to act before Congress adjourned. Orphan 

works legislation has not been introduced in Congress since 2008.

163 , 770 F. Supp. 2d 666, 677 (S.D.N.Y. 2011). 

164 . The publishers subsequently settled their claims against Google, without addressing the orphan 

works issue. Another ongoing lawsuit involves a collaborative effort by five major universities to create a 

shared digital library – the HathiTrust Digital Library. , 902 F. Supp. 

2d 445, 447-49 (S.D.N.Y. 2012). The HathiTrust Digital Library would provide complete access to digitized 

orphan works, while only permitting certain limited uses of digitized works for which the author is 

known. The district court recently determined that the uses of the non-orphan works qualified as fair 

uses or were permitted under Section 121, but did not reach the questions related to the orphan works 

because the defendants had suspended that aspect of the project and the claims were therefore not ripe. 

at 455-56, 458-66.
INTERNET POLICY TASK FORCE

basis.165 Hungary, Japan, Korea, and India all have some form of government or 

compulsory licensing scheme for orphan works,166 and China is considering similar 

legislation.167 In the Nordic countries, the technique of extended collective licensing 

has been used to permit the licensing of orphan works through collective management 

organizations.168 The U.K. recently passed a law to permit government licensing of 

orphan works, although the details of implementation will not be finalized this year.

169

 

Treatment of orphan works is now being harmonized across Europe. In October 2012, 

the EU adopted a directive on orphan works, which is to be implemented by all 

Member States by October 29, 2014.170 The Orphan Works Directive will allow certain

public interest entities171 to make limited use of specified categories of orphan works

“only in order to achieve aims related to their public-interest missions, in particular 

the preservation of, the restoration of, and the provision of cultural and educational 

access to, works and phonograms contained in their collection.”172 A diligent search to 

locate the copyright owner is required in the Member State of first publication or 

broadcast.

173

 But once a work is deemed orphaned in one Member State it will be 

deemed orphaned throughout the EU, with a list of such works to be maintained in a 

single registry.174 If the owner subsequently appears, she will be entitled to fair 

 

165 Copyright Act, R.S.C., c. C-42, s. 77 (1985) (Can.), http://laws.justice.gc.ca/PDF/C-42.pdf. 

166 Government Regulation on the Detailed Rules Related to the Licensing of Certain Use of Orphan 

Works, arts. 2(1), 2(2), 3, Decree 100/2009, V. 8 (Hun.), http://www.hipo.gov.hu/English/

jogforras/100_2009.pdf; Chosakuken-Ho [Copyright Law], Law No. 48 of 1970, 2009, arts. 67, 74(3) 

(Japan), http://www.japaneselawtranslation.go.jp/law/detail/?ft=1&

re=02&dn=1&co=01&ky=copyright+law&page=16 Korean Copyright Act art. 50 (S. Kor.); Copyright 

(Amendment) Act, 2012, at para. 17 (2012) (India), http://copyright.gov.in/Documents/

CRACT_AMNDMNT_2012.pdf.

167

, ., Dr. Prof. Hong Xue, at 

http://infojustice.org/wp-content/uploads/2012/04/hongxue042012.pdf.

168 Extended collective licensing permits collective management organizations to extend the effect of the 

licenses they grant to all works in the sector they represent, even without having authorization to do so, 

as long as they represent a large enough percentage of the works in that sector (generally subject to each 

owner’s ability to opt out of the representation). Consolidated Act on Copyright 2010, No. 202, art. 50–

51 (2010) (Denmark); Copyright Act, No. 404, §§ 13–14 (2010) (Finland). 

169 Enterprise and Regulatory Reform Act 2013 at cl. 77 (U.K.), http://www.legislation.gov.

uk/ukpga/2013/24/contents/enacted. One proposed approach is a two-tiered regime, with extended 

collective licensing for mass digitization by cultural institutions and individual licenses granted by a new 

agency for other types of uses. Hargreaves Report note 33 at 37-40. The U.K. government has 

indicated, however, that extended collective licensing and the orphan works licensing will operate 

separately. U.K. Intellectual Property Office, The Enterprise and Regulatory Reform Act 2013 – Your 

photos and you (Apr. 2013), http://www.ipo.gov.uk/hargreaves-orphanmyth.pdf;

Government Policy Statement: Consultation on Modernising Copyright 7-11 (July 2012), 

http://www.ipo.gov.uk/response-2011-copyright.pdf. 

170 Directive of the European Parliament and of the Council on Certain Permitted Uses of Orphan Works 

(2012/28/EU) (Oct. 25, 2012) (“Orphan Works Directive”).

171 at art. 1(1) (The covered entities are “publicly accessible libraries, educational establishments and 

museums, as well as . . . archives, film or audio heritage institutions and public-service broadcasting 

organisations”).

172 at 6.

173 at art. 3 & Annex. 

174 at arts. 3 & 4.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

compensation.175 

In October 2012, the U.S. Copyright Office returned to the issue with a Notice of 

Inquiry calling for public comments on (1) changes in the legal landscape since 2008 

with respect to using orphan works on an occasional or case-by-case basis, and (2) 

solutions for the new issue of the use of orphan works in the context of mass 

digitization.176 The Task Force believes that the time is ripe to address the orphan 

works issue, and to ensure that the United States can play a leadership role in shaping 

international thinking. At the domestic level, the Task Force will support and provide 

input to the Copyright Office as it examines the issue of orphan works.

“Mass digitization” can be defined as the conversion of analog works into digital 

copies on a mass scale. Many historical collections of copyrighted works exist in analog 

form in libraries and archives, and others could be newly amassed through the use of 

scanning technologies. Such projects have the potential to provide greatly enhanced 

access to works that have not yet been widely distributed and to reach new users. As a 

result, mass digitization presents significant economic opportunities in addition to 

cultural and societal benefits.177 But given the large numbers of works involved, many 

of which are protected by copyright, individual licensing negotiations will not always 

be feasible. As to the orphan works in existing or future collections, new legislation 

could ease the path to move ahead with individual uses, but the typical requirement of 

diligent search may be overly burdensome in high volume. 

Another component of the mass digitization problem involves works that are not 

orphaned, but are “out-of-commerce”—i.e., no longer commercially distributed. On the 

one hand, the owners of these works are likely to be known (although possibly difficult 

to locate); on the other hand, the works themselves by definition have little commercial 

value justifying individual negotiations for use in mass digitization. Facilitating such 

use can benefit all by enabling access that otherwise would not exist.

Steps have been taken in Europe to ease the digitization of out-of-commerce works. In 

2011, the European Commission fostered a Memorandum of Understanding (“MOU”) 

between libraries, publishers, writers, and other artists, making it possible for 

European libraries and cultural institutions more easily to acquire licenses to digitize 

out-of-commerce books and journals.178 And France has enacted legislation that allows 

 

175 at art. 6(5).

176 Copyright Office, , Docket No. 2012-12, 77 Fed. Reg. 64555 (Oct. 22, 

2012).

177 , Peter S. Menell, , 44 Hous. L. 

Rev. 1013, 1042-55 (2007).

178 Memorandum of Understanding, Key Principles on the Digitisation and Making Available of Out-ofCommerce Works (Sept. 20, 2011), http://ec.europa.eu/internal_market/copyright/docs/

copyright-infso/20110920-mou_en.pdf. The MOU’s principles include: (1) institutions seeking to use outof-commerce works must publicize the project and initiate a stakeholder dialogue with right owners and 

collecting societies; (2) institutions should seek voluntary licenses, specifying commercial or noncommercial uses; (3) collective management organizations can only negotiate licenses if they represent a 

substantial number of affected authors and publishers; and (4) right holders may opt out of collective 

management.
INTERNET POLICY TASK FORCE

its national library to build a public database of books published in France in the 20th

century that are not currently being distributed or published in print or digital 

formats.179 

Several mass digitization projects have already been initiated by public institutions in 

the United States and elsewhere, focusing primarily on public domain materials.180 

Other broader projects have led to high-profile litigation, with still-uncertain 

outcomes.181 

In October 2011, the Copyright Office released an analysis of the legal issues involved 

in mass digitization.182 The Copyright Office noted that mass digitization and 

dissemination may serve important public interest goals that could justify restricting 

or limiting certain copyright rights.183 One relevant factor will be the commercial 

nature of the project; while this may not undermine the public benefit to be gained, it 

may change the appropriate reach of copyright limitations and exceptions.184 

Furthermore, to the extent that a mass digitization project is global or even 

multijurisdictional in nature, fair use will not resolve the issue because the doctrine is 

specific to the United States.185 The Copyright Office did not offer specific 

 

179 Anyone wishing to use an out-of-commerce work may apply to have the work listed in the national 

database. Once a work is listed, the right holder has six months to opt-out of collective management. If 

the right holder does not opt out, collective management organizations issue renewable, five-year, nonexclusive licenses to make listed works available, subject to payment of a licensing fee. After ten years on 

the list, if a right holder has not claim a work, French libraries and archives will be permitted to digitize 

and provide access to the works. ° 

[Law Number 2012–287 of March 1, 2012, on the Digital Exploitation 

of Unavailable Books] art. 134–1 (2012) (Fr.), http://www.legifrance.gouv.fr/affichTexte.

do;jsessionid=4D8B77A47AA211DE6E336FD22AA18F60.tpdjo09v_2?cidTexte=JORFTEXT000025422700&

dateTexte=20121016 International Federation of Reproduction Rights Organisations, 

, (Mar. 3, 2012), 

http://www.ifrro.org/content/french-parliament-passed-law-out-commerce-works-22nd-february-2012

180 The Library of Congress has made digitized versions of public domain materials from its collection 

available since 1994 and is regularly expanding such digital access. http://loc.gov/library/aboutdigital.html. Other examples include: NGA Images at the National Gallery of Art, https://images.nga.gov/

en/page/show_home_page.html; the Internet Archive, which contains digital versions of over 3.8 million 

books and texts, http://archive.org/details/texts; Project Guttenberg, which offers 40,000 free e-books, 

http://www.gutenberg.org/; Europeana, a partnership of a many organizations throughout Europe that 

have contributed digital resources that can be located through a centralized database, http://www.

europeana.eu/portal/. For more examples of such projects, U.S. Copyright Office, 

, at Appendix C (2011) (“Mass Digitization 

Report”), http://www.copyright.gov/docs/massdigitization/USCOMassDigitization_

October2011.pdf. 

181 While aspects of one particular project have been held to constitute fair use, they did not involve access 

by the general public to full texts of works with known authors. That decision is now on appeal. 

, 902 F. Supp. 2d 445, 447-49, 458-66 (S.D.N.Y. 2012) , No. 12-4547 

(2d Cir. Nov. 14, 2012); , -- F.3d --, 2013 WL 3286232 (2d Cir. July 

1, 2013) (vacating class certification to authors’ in claims related to Google Books Project, because district 

court failed to consider merits of fair use defense before certifying the class of plaintiffs). 

182 Mass Digitization Report note 180. 

183 at 14.

184

. at 13. 

185 at 25.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

recommendations, concluding instead that:

Issues about the intersection between copyright law and new 

technologies . . . would benefit from further discussions among all 

stakeholders. Among the pertinent questions are the following: the 

objectives and public policy goals of mass digitization projects, the 

interplay among library exceptions, fair use, and licensing, and the ability 

of public and private actors to work together.186

In October 2012, as noted above, the Copyright Office requested additional public 

comment on the use of orphan works in mass digitization.187 The Task Force supports 

this initiative and believes that the broader issues involved in mass digitization should 

also be addressed. As the Copyright Office continues to examine the question of mass 

digitization, including those issues raised in its October 2011 report, the Task Force

will provide input.

Another limitation on rights that has raised issues in the digital environment is the 

U.S. first sale doctrine (elsewhere referred to as “exhaustion of rights”).188 The first sale 

doctrine, as codified in the Copyright Act, allows the owner of a physical copy of a 

work to resell or otherwise dispose of that copy without the copyright owner’s 

consent, by limiting the scope of the distribution right.189 This doctrine, which 

originated to ensure a consumer’s control over her tangible physical property, enables 

the existence of libraries and second-hand markets in records and books. But the 

copyright owner’s remaining exclusive rights, notably the right of reproduction, are not 

affected. 

As a result, the first sale doctrine does not apply to the distribution of a work through 

digital transmission where copies are created implicating the reproduction right.190 In 

a 2001 Report, the Copyright Office considered whether the first sale doctrine should 

be amended to extend to digital transmissions. It concluded that an extension was not 

advisable, given the fundamental differences between the transfer of a single physical 

 

186 at 40.

187 Orphan Works NOI note 157.

188 The first sale doctrine is technically a restriction on the scope of the distribution right, rather than an 

exception. 

189 17 U.S.C. § 109. The law also enables the rental of copies of works, such as DVDs of movies and 

television shows, but contains a carve-out prohibiting the rental of computer programs and sound 

recordings, except in limited circumstances by nonprofit libraries or educational institutions. at 

§ 109(b). 

190 Section 104 Report, note 50 at 78-79. EU Copyright Directive art. 3(3) (providing that the right 

of communication to the public and making available to the public “shall not be exhausted by any act of 

communication to the public or making available to the public”); at Recitals 28-29 (“Unlike CDROM or CD-I, where the intellectual property is incorporated in a material medium, namely an item of 

goods, every on-line service is in fact an act which should be subject to authorisation where the copyright 

or related right so provides.”). , -- F. Supp. 2d --, 2013 WL 

1286134 at *1-2, 9-11 (S.D.N.Y. Mar. 30, 2013) (“ ”) (rejecting the application of the first sale doctrine 

to a service that allows individuals to resell digital music files because of the necessary reproductions 

involved in the transaction). 
INTERNET POLICY TASK FORCE

copy and a transmission over online networks. The Office stressed the fact that digital 

transmission creates a perfect copy of the work, unlike the imperfect quality of a used 

physical copy, with a greater potential impact on the market, and also increases the 

risk of piracy by enabling the easy proliferation of further copies.191 

Proponents of a digital first sale doctrine have argued that the extension of the 

doctrine would have pro-competitive effects, with a resale market competing with the 

market for new sales and keeping prices lower.192 They also seek to preserve the 

traditional benefits of users sharing works with friends or family, and students being 

able to purchase less expensive copies of textbooks. They suggest that concerns about 

the proliferation of copies could be addressed by a requirement that the original copy 

of the work be destroyed, either voluntarily by the sender or through automated 

technology. In its 2001 report, the Copyright Office acknowledged this suggestion, but 

dismissed it as unworkable.193 Ultimately, the Copyright Office concluded that the 

marketplace should be given an opportunity to address the concerns raised by 

advocates of a digital first sale doctrine “before Congress alters the balance of rights 

and exceptions in the Copyright Act.”194

Another relevant question is defining what constitutes a sale that is capable of 

exhausting rights. Increasingly, business models for certain types of works may 

structure the transaction as a license rather than a sale, avoiding application of the 

first sale doctrine. This has long been the case for software and is now becoming more 

common for e-books.195 If ultimately this becomes the only way in which a particular 

type of work is offered to consumers, the result could be to render the first sale 

doctrine meaningless for that type of work. Such concerns may lead courts or policy 

makers to reinterpret what constitutes a “license” or to expand the scope of the first 

sale doctrine.196

 

191 Section 104 Report note 50 at 96-101.

192 at 20-21, 86-87, 100.

193 at 97. The district court in , note 190, found that the unauthorized reproductions of the 

music files were not protected by first sale, even though the original file was deleted from the seller’s 

computer. , 2013 WL 1286134, at *9-11. The court noted that ReDigi had launched a new version 

of its service during the litigation that purported to transfer the file without ever storing it on the seller’s 

computer, but did not rule on the new version’s legality because of an undeveloped factual record on its 

operation. at *2 n.3. 

194 Section 104 Report note 50 at 101.

195

, David R. O’Brien, Urs Gasser, & John Palfrey, 

at 10 (2012), http://cyber.

law.harvard.edu/sites/cyber.law.harvard.edu/files/E-Books%20in%20Libraries%20(O'Brien,%20Gasser,%

20Palfrey)-1.pdf; , The Economist (Oct. 25, 2012), http://

www.economist.com/blogs/prospero/2012/10/e-book-business. 

196 The European Court of Justice recently found exhaustion of rights in software licenses that granted the 

“right to use that copy for an unlimited period”, where the maximum number of authorized users under 

the license had not been met. , European Court of Justice Case C128/11 (July 3, 2012). The Court concluded that the licensing transactions constituted the equivalent of 

sales, stating that “[t]he making available by Oracle of a copy of its computer program and the conclusion 

of a user license agreement for that copy are thus intended to make the copy usable by the customer, 

permanently, in return for payment of a fee designed to enable the copyright holder to obtain a 

remuneration corresponding to the economic value of the copy of the work of which it is the proprietor.” 

at ¶ 45. The ECJ required, however, that the original purchaser of the software must “make his own 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

In the context of cross-border transactions, the relationship between the first sale 

doctrine and the importation right of U.S. law (defined in the Copyright Act as part of 

the distribution right) has been the subject of litigation. Differing interpretations in 

the courts were recently resolved by the Supreme Court in a holding that goods 

lawfully made and purchased with the authorization of the copyright owner anywhere 

in the world can be resold within the United States.

197

 While the case did not directly 

raise the issue of online application of the first sale doctrine, the Court’s decision 

could have an impact on the ability of right holders to offer their works at different 

prices and different times in different countries,

198 and may result in legislative 

reexamination of the doctrine as a whole.

Since the Copyright Office’s examination of the digital first sale doctrine in 2001, much 

has changed. In a world of increasingly digital distribution, the traditional field of 

application of the first sale doctrine may disappear, and the resale market become 

obsolete. The question is whether there is a way to preserve the doctrine’s benefits, 

allowing the equivalent of sharing favorite books with friends, or enabling the 

availability of less-than-full-price versions to impecunious students. Will the market 

provide these opportunities, and if so, how? And are there any changes in 

technological capabilities that would alter any of the Copyright Office’s 2001 

conclusions?

199

 

The Task Force believes that this is an area that deserves further attention. The 

USPTO, in collaboration with the Copyright Office, will solicit public comments and 

hold a series of roundtables regarding the relevance and scope of the first sale 

doctrine in the digital age. 

 Over the past two decades, the rights and exceptions in copyright law have been 

repeatedly amended to respond to developments in digital technology. 

 Many of these updates are in the process of being interpreted by the courts, and 

should be left to evolve unless and until there is a need for legislative 

correction.

 As to some issues, however, consideration should be given to further action. 

Work is already underway in Congress or the Copyright Office on several of 

these issues. The Task Force recommends the following steps:

 

copy unusable at the time of its resale.” at ¶ 70. , 621 F.3d 1102, 1111 (9th 

Cir. 2010) (holding that “a software user is a licensee rather than an owner of a copy where the copyright 

owner (1) specifies that the user is granted a license; (2) significantly restricts the user's ability to transfer 

the software; and (3) imposes notable use restrictions”).

197

, 133 S.Ct. 1351 (2013).

198 John Villasenor, Kirtsaeng

, 2 COMPETITION POL’Y INT’L ANTITRUST CHRON. 10-12 (May 2013), 

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2273022.

199 Maria Pallante, Manges Lecture note 31 at 17-18 (discussing the possibility of Congressional 

review of the first sale doctrine “in the digital context” and potential policy and technology 

considerations).
INTERNET POLICY TASK FORCE

o The Task Force urges Congress to better rationalize the public 

performance right for sound recordings. We reiterate the 

Administration’s support for extending the right to cover broadcasting, 

and urge that any reassessment of the appropriateness of different ratesetting standards for different types of digital music services take into 

account the impact on creators and right holders as well as on different 

types of services;

o The Task Force will solicit public comment and convene roundtables on 

issues related to the creation of remixes and the first sale doctrine in the 

digital environment; and

o The Task Force will support and provide input to the Copyright Office as 

it moves forward with its work on updating the library exception in 

Section 108 and examining the issues of orphan works and mass 

digitization.

Even the most state-of-the-art and well-balanced copyright system would have little 

value if rights could not be enforced. As was predicted in the 1990s, the Internet has 

proved to present both an exciting opportunity and a daunting challenge for copyright 

owners. At the same time that it has opened a vast range of new markets and delivery 

methods, it has given consumers unprecedented tools to reproduce, alter and 

immediately transmit perfect digital copies of copyrighted works around the world, 

and has led to the rise of services designed to provide these tools.200 Today these 

include P2P file-sharing services201 and cyberlockers202— which have a range of 

legitimate uses but also have become major sources of illegal content.203 A number of 

 

200 Nick Bilton, Internet Pirates Will Always Win, N.Y. TIMES (Aug. 4, 2012), http://

www.nytimes.com/2012/08/05/sunday-review/internet-pirates-will-always-win.html; Alex Hudson, Is 

piracy a Mega problem for Hollywood, BBC NEWS (Feb. 3, 2013), http://www.bbc.co.uk/news/

technology-21251680.

201 Peer-to-Peer (P2P) technology, developed in the late 1990s and widely adopted since that time, allows 

individual consumers to exchange digital files of music, videos, and games. Federal Trade 

Commission, , http://business.ftc.gov/

documents/bus46-peer-peer-file-sharing-guide-business. Perhaps the most widely used current P2P filesharing protocol is BitTorrent, which permits users to download a file in small pieces from multiple 

computers at a time, greatly increasing download speeds. Carmen Carmack, , 

How Stuff Works, http://computer.howstuffworks.com/bittorrent.htm

202 Cyberlockers, such as Hotfile and Mediafire, have become increasingly popular in the past few years, 

allowing users both to store and to share large files, often operating as cloud-based services. Users can 

post the URLs for the files that they have uploaded onto blogs or “link farms” that aggregate such links, 

which can be found using a search engine. Roger Parloff, , 

FORTUNE, July 11, 2012, http://tech.fortune.cnn.com/2012/07/11/megaupload-cyberlockercopyright/ 

203 There is evidence that the bulk of files available on P2P file-sharing networks are infringing. , 

Annemarie Bridy, 13 VAND. J. ENTM’T & TECH. LAW, 695-737, 709 

(Summer 2011). A sizeable percentage of Internet traffic remains infringement-related. Christopher S. 

Stewart, , WALL STREET J. (March 4, 2013) (reporting that 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

mobile apps have also been developed and made available that foster infringement of 

copyrighted works.204

Another source of online infringement today is based beyond our borders. Websites 

dedicated to the provision of pirated content can be located anywhere in the world,

and many operate outside the United States.

205

 Signal piracy involving online video 

streaming sites based abroad that retransmit broadcast television station signals in 

real time also poses a threat to U.S. businesses.

206

 Enforcement using existing tools is 

significantly more complicated for websites registered and located abroad, raising 

jurisdictional, procedural, and logistical difficulties. 

Although copyright infringement over the Internet has proven difficult to quantify, it 

has resulted in billions of dollars in losses to the U.S. economy – including reduced 

income for creators and other participants in copyright-intensive industries.

207

 

 

antipiracy firm had “detected 5.4 billion instances of pirated content online” in 2009 and 14 billion in 

2012); Envisional, 2-3 (Jan. 2011) (finding 

that 23.76% of global internet traffic and 17.53% of U.S. internet traffic is dedicated to the infringement of 

non-pornographic copyrighted works), http://documents.envisional.com/docs/EnvisionalInternet_Usage-Jan2011.pdf; Cisco, 

9 (May 2012), http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/

ns537/ns705/ns827/white_paper_c11-481360.pdf (estimating that file sharing Internet traffic will 

increase by 26% between 2011 and 2016); PRS for Music & Google, 

at 11 (June 2012), http://www.prsformusic.com/aboutus/policyandresearch/

researchandeconomics/Documents/TheSixBusinessModelsofCopyrightInfringement.pdf (reporting 17% 

increase in page views of P2P file-sharing networks from 2011-2012); Ed Felten, 

FREEDOM TO TINKER https://freedom-to-tinker.com/blog/felten/census-files-availablebittorrent/ (Jan. 29, 2010) (reporting results of study finding that all of the movie, TV and music torrents 

in a sample of 1,021 files were likely infringing).

204 Sue Zeidler, , Reuters (Feb. 28, 

2013) http://www.reuters.com/article/2013/03/01/net-us-hollywood-appsidUSBRE92003Y20130301.

205 , United States Trade Representative, Out-of-Cycle Review of Notorious Markets (Dec. 13, 2012) 

http://www.ustr.gov/sites/default/files/121312%20Notorious%20Markets%20List.pdf; 

Copyright in the Digital Era note 31 at 26. 

206

. Hearing before the Committee on the Judiciary, 

House of Representatives, 111th Cong., 1st Sess., December 16, 2009, Serial No. 111-94, 

http://www.gpo.gov/fdsys/pkg/CHRG-111hhrg54075/html/CHRG-111hhrg54075.htm; Organisation for 

Economic Co-Operation and Development, (2009), , http://www.

keepeek.com/Digital-Asset-Management/oecd/science-and-technology/piracy-of-digital-content_

9789264065437-en; Screen Digest, 

(May 

10, 2010). Concerns about signal piracy have led to negotiations toward an international agreement for 

the protection of broadcasting organizations. WIPO, Standing Committee on Copyright and Related 

Rights, , SCCR/24/10 (Sept. 

21, 2012), http://www.wipo.int/edocs/mdocs/copyright/en/sccr_24/sccr_24_10.pdf. 

207 While the exact dimensions of online piracy and its impact, and the techniques for its measurement, are 

the subject of debate, increasing amounts of data are being amassed from objective sources. U.S. 

Government Accountability Office, GA0-10-423, Intellectual Property Observation on Efforts to Quantify 

the Economic Effects of Counterfeit and Pirated Goods 8 (2010). Similar efforts are being undertaken 

outside the United States. , , Organisation for Economic Co-Operation and Development, 

(2009), http://www.keepeek.com/Digital-Asset-Management/oecd/science-andtechnology/piracy-of-digital-content_9789264065437-en; RAND Europe, 

(2012), http://ec.europa.eu/internal_market/iprenforcement/docs/ipr_infringment-
INTERNET POLICY TASK FORCE

Virtually every content industry is affected, including the music, motion picture, 

television, publishing, visual arts, and software industries. Even as legitimate online 

markets are taking root and growing at an increasing rate,208 traditional markets for 

physical products continue to shrink, and some of the industries they support are a 

fraction of their size just ten years ago.

209

 While some of these changes are a result of 

the disruptive power of the Internet giving rise to new business models (as discussed 

below at pp. 77-80),210 online infringement continues to undermine both established 

industries and emerging businesses. Existing business models should not be 

preserved for their own sake, but their destruction should not simply be assumed to 

be a positive development. 

The legitimate services made possible by the Internet, which serve to incentivize

further creative outputs, cannot fully flourish while faced with unfair competition 

from illegal sources. Accordingly, effective enforcement is a critical component of a 

healthy online ecosystem, but the digital environment makes enforcement more 

difficult for several reasons:



. In essence, 

consumers have become competing publishers and distributors of 

copyrighted content. This ability makes enforcement difficult because of 

the sheer number of potential defendants, and has led some to question 

the proportionality of traditional enforcement tools when applied to

individuals. 

 . The Internet allows 

individuals to access and disseminate content from private locations 

without public attribution, which can make it difficult to trace acts of 

infringement to their source. Moreover, the global reach of the Internet 

enables content created in one country to be quickly made available 

around the world, raising issues of jurisdiction and applicability of 

 

report_en.pdf (report prepared for of the European Observatory on Counterfeiting and Piracy, 

http://ec.europa.eu/internal_market/iprenforcement/observatory/index_en.htm). 

208 Michael Masnick & Michael Ho, The Sky is Rising: A Detailed Look at the State of the Entertainment 

Industry (Jan. 2012), https://s3.amazonaws.com/s3.documentcloud.org/documents/562830/

the-sky-is-rising.pdf (focusing on U.S. entertainment industries); Michael Masnick & Michael Ho, The Sky is 

Rising Regional Study, https://s3.amazonaws.com/s3.documentcloud.org/documents/

561023/the-sky-is-rising-2.pdf (examining industries in Germany, France, the U.K., Italy, Russia, and 

Spain).

209

 , Harry McCracken, , TECHNOLOGIZER,

http://technologizer.com/2011/02/17/borders-bankruptcy/ (February 17, 2011) (noting the closure of 

bookstores, record stores, video rental stores and others since 2003 due to technological trends); 

David Goldman, , CNNMONEY.COM, http://money.cnn.com/2010/02/

02/news/companies/napster_music_industry/ (February 3, 2010) (noting that U.S. music industry revenue 

plunged from $14.6 billion in 1999 to $6.3 billion in 2009).

210 Copyright in the Digital Era note 31 at 22 (“The magnitude of these effects on different 

creative sectors are difficult to quantify, but disruptive changes in traditional supply chains and the 

destruction of some older business models and enablement of new ones are easy to identify.”); 

Lisa Cameron & Coleman Bazelon, The impact of Digitization on Business Models in Copyright-Driven 

Industries: A Review of the Economic Issues (Feb. 2013) http://brattle.com/_documents/

UploadLibrary/Upload951.pdf
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

national laws. 



. Unauthorized file-sharing and downloading have come to 

be perceived by some as less immoral and less harmful than the 

unauthorized taking of physical media, such as shoplifting.211 This shift 

in attitudes has led to a global debate over appropriate enforcement. 

Given these difficulties, there are a number of respects in which the existing array of 

tools against infringement has become insufficient. The tools for protecting and 

enforcing rights must keep pace—as with rights and exceptions, they need regular 

updating.

212 These tools too must be well calibrated to ensure a balanced online 

ecosystem and to safeguard our commitment to free speech, due process, privacy, and 

cybersecurity.

213

 

In the search for appropriate solutions, it is important to note that legislation may not 

be the sole or the best avenue available.214 Indeed, no single solution is likely to be 

enough; a combination of approaches will be needed to create an environment that can 

sustain a thriving market for legitimate content. Voluntary initiatives and best 

practices, including those involving cooperation among right holders and 

intermediaries, offer great promise and continue to be supported as an approach by 

the Administration. Without doubt, the wide availability of legal alternatives itself has 

an influence on consumer attitudes and behaviors. And public education is an 

indispensable element, raising awareness about the purpose of copyright and the 

availability of legitimate alternatives, and clarifying that online infringement has real 

consequences.

 

211 , Intellectual Property Awareness Foundation, 

at 33-34 (March 2012) http://www.

ipawareness.com.au/LiteratureRetrieve.aspx?ID=120375; Twila Wingrove, Angela L. Korpas & Victoria 

Weisz, 

, 17 PSYCHOL., CRIME & L. 261 (2011); Loraine Gelsthorpe, 

, COPYRIGHT AND PIRACY: AN INTERDISCIPLINARY CRITIQUE 401-02 

(Lionel Bently, Jennifer Davis & Jane C. Ginsburg eds., 2010).

212 Some suggest that attempts to enforce in the online environment should be abandoned, and alternate 

means relied on to incentivize creators. Raymond Shih Ray Ku, 

, 69 U. CHI. L. REV. 263 (2002); Glynn S. Lunney Jr., 

, 87 VA.

L. REV. 813 (2001). Specific proposals have also been made for a system of remuneration for file-sharing. 

, WILLIAM W. FISHER III, PROMISES TO KEEP: TECHNOLOGY, LAW, AND THE FUTURE OF ENTERTAINMENT (2004); Neil 

Weinstock Netanel, , 17 HARV. J.L.

& TECH. 1 (2003); Jessica Litman, , 27 HASTINGS COMM. & ENT. L.J. 1 (2004). Such 

approaches have not yet been adopted anywhere. In addition to problems of incompatibility with 

international treaty obligations, there are issues of feasibility, both in terms of the resources required to 

establish and administer such a system, and the ability to generate sufficient revenues. 

213

, 2010 Joint Strategic Plan on Intellectual Property Enforcement 17 (June 2010) (“2010 Joint 

Strategic Plan”) http://www.whitehouse.gov/sites/default/files/omb/assets/

intellectualproperty/intellectualproperty_strategic_plan.pdf.

214 We note that legislation in the area of enforcement has proved particularly difficult over the past few 

years. Combating Online Infringement and Counterfeits Act, S. 3804, 111th Cong. (2010); Preventing 

Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (PROTECT IP Act), S. 968, 

112th Cong. (2011); Stop Online Piracy Act (SOPA), H.R. 3261, 112th Cong. (2011).
INTERNET POLICY TASK FORCE

This Section will describe existing enforcement tools; identify the major gaps and 

shortcomings in the toolbox; and set out a range of potential solutions for addressing 

these shortcomings, including those pursued so far in the United States and elsewhere.

U.S. law provides a number of methods for enforcing copyright online, including both 

government enforcement and private actions. This Paper will focus primarily on 

private actions, but will first provide a brief overview of the government’s role in 

online copyright enforcement.

The U.S. government has taken an active role in seeking to improve online enforcement 

at home and abroad, particularly in the past few years. The efforts fall into three 

general categories: (1) coordination and oversight; (2) direct civil and criminal action; 

and (3) international outreach. 

In 2008, Congress established the Office of the Intellectual Property Enforcement 

Coordinator (IPEC) to coordinate government enforcement efforts.215 In 2010, the IPEC 

released its first Joint Strategic Plan on Intellectual Property Enforcement, describing 

government efforts to improve enforcement, including reducing online piracy, and 

putting forth a strategy for the future.216 The most recent Joint Strategic Plan was 

released in June 2013, and covers the next three years. The Joint Strategic Plan 

highlights the efforts of the United States to advance a coordinated approach to 

combating online infringement by increasing law enforcement action, supporting

voluntary efforts by the private sector, and increasing consumer awareness.

217

 

A number of civil and criminal enforcement mechanisms have been used by the 

government to combat online piracy.218 The Departments of Justice (DOJ) and 

 

215 Prioritizing Resources and Organization for Intellectual Property Act of 2008 (PRO-IP Act), Pub. L. 110-

403 (2008). The PRO-IP Act, also enhanced enforcement mechanisms and strengthened the forfeiture and 

restitution provisions for both civil and criminal infringement actions.

216 2010 Joint Strategic Plan note 213. This strategy includes working with trading partners and 

international organizations, securing supply chains, and improving data collection, among other 

commitments. at 1-2.

217 2013 Joint Strategic Plan, note 112. 

218 There are also civil enforcement tools available to the U.S. government that apply to the importation of 

physical goods that have not yet been widely tested in the online context. For example, U.S. Customs and 

Border Protection has the power to seize pirated or counterfeit goods upon their attempted import or 

export into the U.S. , 19 U.S.C. § 1595(a). And the International Trade Commission can issue 

exclusion orders against the importation of goods, or cease and desist orders against the sale, marketing, 

or advertising of goods already imported into the United States, that infringe U.S. patents, trademarks, 

trade secrets, or copyrights, based on complaints filed by right holders under 19 U.S.C. § 1337 (“Section 

337”). The overwhelming majority of Section 337 proceedings arise in the patent context, however, and 

there is no record of any proceedings related to online copyright infringement. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Homeland Security (DHS) have primary responsibility for such actions, with criminal 

investigations conducted by the Federal Bureau of Investigation and the U.S. 

Immigration and Customs Enforcement (ICE).

219

. The DOJ has legal authority to seize property used in 

connection with copyright infringement.

220 Through , a program 

coordinated by the DOJ and the DHS, domain names of websites used to distribute 

pirated or counterfeit content have been seized.

221

 has 

successfully targeted a number of sites devoted to piracy,

222 but there are a number of 

limitations, including the limited resources available to the Attorney General to carry 

out the takedowns and jurisdictional issues that restrict seizures to domain names 

registered with a U.S. registry. As a result, domain names for websites with infringing 

content that are controlled by foreign registries, even if accessible by and targeted to

U.S. consumers, can be very challenging for U.S. authorities to reach. Stemming such 

international infringement requires cooperation and coordination with other 

governments.

223

 It is also important to avoid potential damage from erroneous 

seizures. Challenges from domain name registrants have resulted in two cases being 

 

219 In early 2010, Attorney General Eric Holder created an Intellectual Property (IP) Task Force with the 

assistance of the IPEC to combat the growing number of domestic and international intellectual property 

crimes, protect the health and safety of American consumers, and safeguard the nation's economic 

security against those who seek to profit through intellectual property infringement. DOJ, 

(Feb. 

12, 2010) http://www.justice.gov/opa/pr/2010/February/10-ag-137.html. Intellectual 

property crime is a DOJ priority, and it has focused much effort on online enforcement issues. Deputy 

Attorney General James Cole, , DOJ Office of Public 

Affairs, http://blogs.justice.gov/main/archives/1315 (Apr. 26, 2011). In addition, the ICE-led National 

Intellectual Property Rights Coordination Center (IPR Center) is an interagency task force that coordinates 

IP enforcement efforts across the U.S. government. IPR Center, About Us, http://www.iprcenter.

gov/about-us

220 18 U.S.C. § 2323(a).

221 National Intellectual Property Rights Coordination Center, http://www.ice.

gov/doclib/news/library/factsheets/pdf/operation-in-our-sites.pdf. When someone tries to access a 

website at a domain that has been seized, they see a message that notifies them of the seizure and 

provides educational information about copyright piracy. , domain name has been seized by U.S. 

Immigration and Customs Enforcement, http://tvshack.net/.

222 ICE, (June 30, 2010), http://

www.ice.gov/news/releases/1006/100630losangeles.htm. Since the program began in 2010, over 2000 

domain names have been seized, the majority of which have involved the sale of counterfeit merchandise. 

ICE, 

(Apr. 26, 2013), http://www.ice.gov/news/releases/1304/130426

arlington2.htm. The program has also received some criticism. Brendan Sasso, 

, THE HILL, http://thehill.com/blogs/hillicon-valley/

technology/247077-lawmakers-question-administrations-crackdown-on-pirate-websites (Sept. 2, 2012). 

223 ICE has recently partnered with Europol in a coordinated effort that led to the seizure of 132 domains, 

31 through European registries. ICE, 

(Nov. 26, 2012), http://www.ice.gov/news/releases/1211/121126washingtondc.

htm. The United States and 38 other nations are signatories to the Council of Europe Convention on 

Cybercrime, which requires establishing criminal offenses for copyright infringement. Council of 

Europe, Convention on Cybercrime, ETS No. 185 (2001).
INTERNET POLICY TASK FORCE

dropped and the return of the domain names to the registrants.

224

 

. The DOJ also is empowered to bring criminal prosecutions for 

copyright infringement.225 The Computer Crime and Intellectual Property Section 

(CCIPS) of the Criminal Division implements the Department’s IP prosecution 

strategies, and provides domestic and international enforcement training.226 

In 1997, Congress created criminal liability for reproducing or distributing works of a 

certain value even if the infringer neither gains nor expects to gain anything of value in 

return.

227

 And in 2005, Congress created criminal penalties for infringement of works

being prepared for commercial distribution.228 Both of these provisions are important 

for effective enforcement, because much online infringement is undertaken without a 

profit motive by infringers, but still has the potential for significant economic 

damages.229 

One recent high-profile case highlights the potential and the difficulty of government 

actions against foreign website operators. In January 2012, seven individuals and two 

corporations were charged in the United States with running an organized criminal 

enterprise responsible for worldwide online piracy, through the cyberlocker service 

Megaupload.com and other related sites. According to the indictment, these 

businesses generated more than $175 million in criminal proceeds and caused more 

than half a billion dollars in potential damages to copyright owners.230 Substantial 

assistance was provided by law enforcement entities around the world.231 

 

224

, , BLOOMBERG 

LAW, Apr. 29, 2012, http://about.bloomberglaw.com/law-reports/government-drops-domainseizure-case; 

, https://www.eff.org/cases/matter-seizure-internet-domain-name-dajaz1com.

225 17 U.S.C. § 506.

226 USDOJ, , http://www.justice.gov/criminal/cybercrime/about. There are also 25 

specialized Computer Hacking and Intellectual Property (CHIP) Units located in U.S. Attorney Offices 

throughout the country, and more than 250 specially trained prosecutors with expertise in prosecuting IP 

and computer crimes (at least one in each Office). USDOJ, , 

http://www.justice.gov/usao/briefing_room/cc/graphics.html.

227 No Electronic Theft Act (NET Act) Pub. L. 105-147 (1997); 17 U.S.C § 506(a)(1)(B). 

228 Family Entertainment and Copyright Act of 2005, Pub. L. 109-9 (2005); 17 U.S.C. § 506(a)(1)(C). This 

change was in response to the increasing occurrence of “camcording” new movies upon their release in 

theatres “followed immediately by either mass duplication and distribution of DVD copies or Internet 

distribution of the same movie.” H.R.. REP. NO. 109-33, at 4 (2005).

229 A conviction for criminal copyright infringement also triggers mandatory criminal forfeiture, requiring 

that the defendant forfeit to the United States any property used to commit or facilitate the offense, or 

property derived from the proceeds. 18 U.S.C. § 2323(b). While this type of proceeding has been used to 

require forfeiture of domain names for infringing websites, , Department of Justice, 

(Dec. 19, 2008), 

http://www.justice.gov/criminal/cybercrime/press-releases/2008/rushingSent.pdf, criminal prosecution 

again presents resource issues, limiting the number of websites that can be targeted. 

230 , Case No. 12-cr-00003-LO, Doc. 34 at ¶ 1 (Superseding Indictment) 

(E.D.Va. Feb. 16, 2012), http://www.washingtonpost.com/wp-srv/business/documents/

megaupload-indictment.pdf. 

231 These entities included police and prosecutors from New Zealand, Hong Kong, the Netherlands, the 

U.K., Canada, Australia, Germany, and the Philippines. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Such prosecutions can be effective in shutting down sites causing great harm to right 

holders, creators, and legitimate services, and in sending a strong public message.232 

Still to be resolved, however, is how to deal with those users who are storing 

noninfringing content on the sites.

233

 Moreover, this level of resource allocation will 

not always be feasible. And the Megaupload case presented special circumstances, 

including the voluntary assistance of multiple foreign law enforcement entities, the 

availability of an extradition treaty, and Megaupload’s use of U.S. domestic registries, 

without which prosecution may have been impossible.

An additional hurdle to enforcement is the existence of an anomaly in the coverage of 

U.S. criminal law. While the willfully infringing reproduction and distribution of 

copyrighted works can be punished as a felony,234 willful violations of the public 

performance right are punishable only as misdemeanors.235 This discrepancy is an 

increasingly significant impediment. Since the most recent updates to the criminal 

copyright provisions, streaming (both audio and video) has become a significant if not 

dominant means for consumers to enjoy content online. The lack of potential felony 

penalties for criminal acts of streaming disincentivizes prosecution and undermines 

deterrence.236 The Administration and the Copyright Office have both called on 

Congress to amend the Copyright Act to ensure that illegal streaming to the public can 

be punished as a felony in the same manner as other types of criminal infringement.237 

The Task Force now repeats that call.

Through bilateral and multilateral negotiations, educational programs and other 

initiatives, the United States encourages the adoption and implementation of high 

 

232 A recent academic study found that the shutdown of Megaupload had an immediate positive impact on 

digital revenues for major movie studies. Brett Danaher and Michael D. Smith, 

(March 2013), http://papers.ssrn.

com/sol3/papers.cfm?abstract_id=2229349&download=yes. 

233 Graeme McMillan, , TIME TECH, Feb. 1, 

2012, http://techland.time.com/2012/02/01/eff-launches-megaretrieval-site-for-megauploadusers. 

234 17 U.S.C. § 506(a)(1)(A) (offense), 18 U.S.C. § 2319(b)(1) (felony for specified “reproduction or 

distribution”); 17 U.S.C. § 506(a)(1)(B) (“reproduction or distribution” offense), 18 U.S.C. § 2319(c)(1) 

(felony for specified “reproduction or distribution”); 17 U.S.C. § 506(a)(1)(C) (pre-release “distribution” 

offense), 18 U.S.C. § 2319(d)(1) (felony penalty).

235 17 U.S.C. § 506(a)(1)(A) (offense), 18 U.S.C. §§ 2319(b)(1), (3) (felony punishment only for specified 

“reproduction or distribution,” all other offenses punishable as misdemeanors).

236 SOPA included a provision making illegal Internet streaming a felony. SOPA at § 201. And calls for 

such legislation have been made previously by the IPEC, Administration’s White Paper on Intellectual 

Property Enforcement Legislative Recommendations 10 (March 2011), and the Register of Copyrights, 

Maria Pallante Manges Lecture note 31 at 13.

237 Administration’s White Paper on Intellectual Property Enforcement Legislative Recommendations 10 

(March 2011) http://www.whitehouse.gov/sites/default/files/ip_white_paper.pdf; Statement 

of Maria A. Pallante, Register of Copyrights, June 1, 2011, http://www.copyright.gov/docs/

regstat060111.html; John Eggerton, 

, BROADCASTING & CABLE (May 15, 2013), http://www.broadcastingcable.com/article/

493524-AG_Holder_Justice_Should_Be_Able_to_Go_After_Some_Illegal_Streaming_as_Felony.php. 
INTERNET POLICY TASK FORCE

standards for copyright protection and enforcement around the world.

238

 For example,

the Office of the United States Trade Representative (USTR) is charged by Congress 

with reporting the results of an annual review of the global state of intellectual 

property rights (IPR) protection and enforcement.239 This Special 301 Report is an 

assessment of the adequacy and effectiveness of the protection of IPR by U.S. trading 

partners.240 USTR also publishes a “Notorious Markets List” each year, identifying 

selected markets, including ones on the Internet, that are reportedly engaged in 

substantial piracy and counterfeiting.241 The Notorious Markets List highlights markets 

that facilitate online infringement via “pay-per-download” services, BitTorrent indexing 

and BitTorrent tracking. Both reports have drawn international attention to the 

economic harm caused by online piracy and triggered positive changes by both 

government and non-government actors to improve copyright protection. 

The Task Force believes that it is important that the United States continue to work to 

reduce foreign-based piracy by working to ensure the adequacy and effectiveness of 

measures against Internet piracy in foreign jurisdictions and by increasing our 

cooperative efforts with foreign law enforcement.

Most online copyright enforcement is handled through private action. Copyright 

owners have at their disposal a range of possible tools, including lawsuits against the 

primary infringer or based on theories of secondary liability, as well as procedures 

short of litigation for removing infringing content from the Internet.

 

238 Much of this work relates to obligations of international agreements specifically dealing with 

intellectual property enforcement. The TRIPS Agreement obligates WTO Members to adequately and 

effectively protect intellectual property rights. TRIPS Section III, note 32, at art. 41-61; WCT, 

note 32, at art 14; WPPT, note 32, at art. 23; AVPT, at art. 20. The bilateral FTAs between the 

United States and other countries also contain substantive enforcement provisions. U.S.-

Australia Free Trade Agreement, Chapter on Intellectual Property Rights, art. 17.11. And the AntiCounterfeiting Trade Agreement (ACTA), recently concluded but not yet in force, sets forth provisions for 

a high-level enforcement standard consistent with U.S. law, including issues specific to the digital 

environment. ACTA, arts. 6-32. The final text of ACTA, so far signed by the United States, Australia, 

Canada, Korea, Japan, New Zealand, Mexico, Morocco, and Singapore, is http://www.mofa.go.

jp/policy/economy/i_property/pdfs/acta1105_en.pdf. 

239 Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act 

of 1988 and the Uruguay Round Agreements Act.

240 USTR, , http://www.ustr.gov/sites/default/files/05012013%

202013%20Special%20301%20Report.pdf. The 2013 Report highlighted both online infringement 

challenges in specific markets, such as Ukraine, China, Switzerland, and Russia, and the most recent 

developments in online piracy, including new technologies and business practices that are evolving to 

facilitate and monetize copyright theft via the Internet. 

241 USTR, , December 13, 2012, http://www.

ustr.gov/sites/default/files/121312%20 Notorious%20Markets% 20List.pdf. In addition to the 

Administration’s list, the Congressional International Anti-Piracy Caucus publishes an annual list that 

focuses on copyright piracy in other countries. The Congressional International Anti-Piracy Caucus, 

(2012), http://www.scribd.com/doc/

106458437/Congressional-Anti-Piracy-Caucus-2012-Country-Watch-List.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Online distribution of copyrighted works necessarily involves numerous acts of 

reproduction, distribution and/or public performance. Those who engage in these acts 

without authorization, whether individuals or entities, may be liable for infringement.

Some right holders have sued individual file sharers for engaging in acts of 

reproduction and distribution of copyrighted works, particularly those who have 

uploaded large numbers of files. Prior to December 2008, when it abandoned this 

approach, the Recording Industry Association of America (RIAA) sued over 30,000

individuals for uploading music files through illegal P2P services. The vast majority 

were settled out of court, generally for sums in the low thousands.242 

Although some right holders continue to pursue direct infringement suits against 

individual file-sharers,243 these lawsuits have generally proven to be not only 

controversial but also an inefficient method for combating large-scale online 

infringement. Given the resources required to pursue a lawsuit, only a small fraction 

of the millions of infringing P2P users can be identified and taken to court. As a 

result, although these litigation campaigns may have some educational effect, they 

have not appeared to provide meaningful long-term deterrence. Efforts like the 

graduated response systems (discussed below at pp. 71-74) coupled with infringement 

actions against recalcitrant individual file sharers, may ultimately prove more effective. 

In the online environment, new types of intermediaries play an increasingly important 

role in the reproduction, distribution, and public performance of copyrighted works. 

In considering potential legal claims, the distinction between engaging in infringing 

acts and enabling others to engage in them is not always clear. Several cases, some 

predating the DMCA, have concluded that a finding of direct infringement against a

 

242 Ryan Nakashima, , HUFFINGTON POST, http://www.huffingtonpost.

com/2008/12/19/riaa-to-stop-suing-music-_n_152522.html (Dec. 19, 2008) (noting the average settlement 

amount of around $3,500). 

243 The adult entertainment industry has been aggressive in recent years in pursuing such lawsuits. 

Although questions have been raised about the accuracy with which the correct defendants have been 

identified, the suits have led to a large number of settlements which may have been motivated in part by 

the defendants’ desire to avoid having their names associated with adult content. 

, No. C 11-02331 LB, 2011 WL 4352110, at *4 n.5 (N.D. Cal. Sept. 16, 2011) (describing the 

“common arc” for mass copyright infringement cases in this area). Some courts have decried these 

litigation and settlement practices as potentially abusive and improper. 

, No. C-11-2826 DMR, 2011 WL 5573960, at *3 (N.D. Cal. Nov. 16, 2011); , No. 

V-11-46, 2012 WL 773683, at *5 & n.2 (S.D. Tex. Mar. 8, 2012); , No. 11-CV2939-TWT, 2011 WL 6840590, at *2 & n.5 (N.D. Ga. Dec. 29, 2011); 

No. 12-108-PHX-JAT, 2012 WL 692993, at *7 (D. Ariz. Mar. 1, 2012). Stuart Pfeifer, 

, LOS ANGELES TIMES, May 7, 2013 (quoting the judge as calling Prenda Law and 

others a “porno trolling collective”), http://www.latimes.com/business/la-fi-prenda-pornsanctions-20130508,0,1738507.story.
INTERNET POLICY TASK FORCE

service provider requires “some element of volition or causation.”244 These holdings 

have heightened the importance of secondary liability theories, discussed below. 

Direct infringement has still been found where service providers engaged in active,

volitional conduct.245

The courts have developed several doctrines of secondary liability, allowing claims 

against those who participate in various ways in the infringement of others:246

 requires that the defendant knew or had reason to know 

of the underlying infringement and caused or materially contributed to it.247

 requires that the defendant had the right and ability to 

control the infringement and derived a financial benefit from it.248

 requires that the defendant distributed a device or 

provided a service with the demonstrated purpose of promoting its use for 

infringement.249

Some version of secondary liability exists in laws of most countries, although the legal 

theories and required elements differ.250 

In recent years, claims of secondary liability brought against online intermediaries 

have played an increasingly prominent role in enforcement efforts against digital 

piracy. Such claims have been the inevitable result of the use of technological 

 

244

, 907 F. Supp. 1361, 1370 (N.D. Cal. 1995); 

, 373 F.3d 544, 550 (4th Cir. 2004); 

, 536 F.3d 121, 131 (2d Cir. 2008) (“ ”).

245

, , 633 F. Supp. 2d 124, 148-49 (S.D.N.Y. 2009) (finding 

direct infringement where defendants took active steps to maintain access to infringing digital music files) 

(“ ”); , 982 F. Supp. 503, 513 (N.D. Ohio 1997) (although 

decided before the DMCA, this case is still cited by courts for the proposition that volitional conduct by 

service providers can lead to direct liability). Service providers in other countries have also been found 

directly liable for infringement. , , Tribunal de Grande Instance 

de Paris, Ordonnance de référé (June 22, 2007); , Beijing First Intermediate 

Court (Dec. 27, 2006). 

246 The U.S. Copyright Act grants to copyright owners not only the right to exercise exclusive rights, but 

also the right “to authorize” their exercise by others. 17 U.S.C. § 106. The inclusion of the right “to 

authorize” was intended to avoid any questions as to the liability of secondary infringers – those who do 

not directly exercise the copyright owner’s rights, but “authorize” others to do so. H.R. REP. NO. 94-

1476, at 61, reprinted in 1976 U.S.C.C.A.N. 5674.

247 , 443 F.2d 1159, 1162 (2d Cir. 1971); , 

633 F.Supp. 2d at 155-56.

248 , 316 F.2d 304, 307 (2d Cir. 1963); , 239 F.3d at

1022-24. 

249 , 545 U.S. 913, 936-37 (2005). It is not entirely clear 

whether inducement is a separate ground of secondary liability or simply a form of contributory 

infringement. , 633 F. Supp. 2d at 150 n.17.

250 , Daniel Seng, 

Intermediaries, http://www.wipo.int/export/sites/www/copyright/en/doc/liability_of_

internet_intermediaries.pdf.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

advances in digital distribution for large-scale infringement by individuals. Both in the 

United States and in other jurisdictions, courts have relied on theories of secondary 

liability to draw lines between legitimate and illegitimate services that provide access 

to copyrighted content. 

Beginning with Napster, a number of unlicensed P2P file-sharing services have been 

found actually or potentially liable in the United States, despite differences in their 

structures—generally where they encouraged or profited from infringement while 

failing to take steps to control it.251 In a case brought against Grokster, the US Supreme 

Court in June 2005 unanimously confirmed the existence of a cause of action for 

inducement of copyright infringement, holding that Grokster could be subject to 

liability for distributing a device with the object of promoting its use to infringe 

copyright, as shown by clear expression or other affirmative steps taken to foster 

infringement.252

Secondary liability claims have also been brought in the United States against other 

types of online services, including video hosting sites,253 BitTorrent sites,254 Usenet.com, 

which provided access to the USENET network,255 and cyberlockers.256 In those cases 

where the courts have reached the secondary liability issue, the decisions have turned

on fact-specific inquiries, with liability where there was evidence that defendants 

encouraged, promoted, facilitated and profited from the infringing conduct of their 

users. 

In other jurisdictions, similar outcomes have been reached on similar facts, relying on 

the applicable secondary liability theories. Right holders have prevailed in lawsuits 

against P2P file-sharing services in Australia,

257 Japan,258 China,259 and South Korea;260

against BitTorrent sites in Sweden,

261 Finland,262 and the Netherlands;263 against a Usenet 

 

251 In 2001, the Ninth Circuit determined that Napster was liable for contributory infringement on the basis 

of its actual and constructive knowledge of the infringing activities and vicarious copyright infringement 

because it had a direct financial interest in drawing users to its service. , 239 F.3d at 1019-24; 

, 334 F. 3d 643, 651-54 (7th Cir. 2003); 

, 545 U.S. 913, 939 (2005); , 454 F. 

Supp. 2d 966, 985-92 (C.D. Cal. 2006); , 784 F. Supp. 2d 398, 426 

(S.D.N.Y. 2011). 

252 545 U.S. at 936-37.

253 , 676 F.3d 19 (2d Cir. 2012); 

, No. 09-55902, 2013 U.S. App. LEXIS 5100 (9th Cir. Mar. 14, 2013) (“ ”). 

254

, 710 F.3d 1020 (9th Cir. 2013) (“ ”);

, No. 2:06-cv-01093, 2007 WL 4877701, *8 (C.D. Cal. Dec. 13, 2007).

255 , 633 F. Supp. 2d 124, 150-58 (S.D.N.Y. 2009).

256 , 798 F. Supp. 2d 1303, 1310-11 (S.D. Fla. 2011).

257 [2005] FCA 1242. 

258 , Heisei 16 (Ne) 446 (2003) (Tokyo High Ct., Mar. 31, 2005).

259

, , (2004) Gao Min Zhong Zi No. 

713 (Beijing High Court, Dec. 2, 2004); 

, (2005) Er Zhong Min Chu Zi No. 13739 (Beijing No. 2 Intermediate Court, Dec. 19, 2006).

260

, 2005 Da 11626 (2007) (Sup. Ct. Rep. of Korea, Jan. 25, 2007). 

261

, Case No. B 4041-09 (Svea Court of Appeal, Nov. 26, 2010).
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indexing site in the United Kingdom;

264 and against a major social media site in 

Russia.265 

Several aspects of the remedies available in litigation have raised particular issues in 

the online context. Injunctive relief, always an important potential remedy to put a 

stop to continuing acts of infringement, is particularly critical in online infringement 

cases, where unauthorized sites or services can cause great financial harm to right 

holders in a matter of hours through the unrestricted public availability of valuable 

content. 

Injunctions have been granted by numerous courts against various online services 

found liable for infringement.266 Moreover, the DMCA authorizes right holders to seek 

injunctions against Internet service providers (ISPs) (referring in the context of the 

DMCA to a wide range of providers, not only those providing Internet access), even 

when a service provider qualifies for a safe harbor from monetary damages (as 

discussed below at pp. 52-54). The DMCA limits the scope of such injunctions 

according to the service provider’s function.267

The DMCA’s injunctive relief provisions appear to be little used. Indeed, there are no 

reported cases in the U.S. courts in which an injunction has been granted against a 

service provider that qualifies for a DMCA safe harbor. This is not surprising for a 

number of reasons. Most fundamentally, the plaintiff would have to establish a basis 

for liability on the part of the ISP, an expensive and uncertain proposition given the 

lack of clear precedent. And injunctions cannot be issued absent notice to the ISP and 

an opportunity to appear before the court hearing the application for an injunction.268 

 

262 , Supreme Court, Decision of 30 June 2010 nr 1396, KKO:2010:47.

263

, 412217 / HA ZA 12-153 (District Court of the Hague, Oct. 24, 2012). 

264 , [2010] EWHC 608 (Ch.) (Mar. 29, 2010).

265 , No. A56-16627/2011 (Arbitrazh Court of St. Petersburg and Leningrad Region, Oct. 15, 2012) 

(13th Arbitrazh Court of Appeal, Jan. 21, 2013).

266

, , 710 F. 3d at 1047-49; , 284 F.3d 1091.

267 Injunctions against non-conduit ISPs are limited to: (1) prohibiting access to material residing at a 

particular online site; (2) terminating a specified user’s account; and (3) other relief that the court deems 

necessary to block access to material at “a particular online location” but only if the relief is the least 

burdensome method. 17 U.S.C. § 512(j)(1). Injunctions against conduit ISPs are limited to: (1) terminating 

a specified user’s account; and (2) blocking access to a specific website of the United States. 17 

U.S.C. § 512(j)(2).

268 17 U.S.C. § 512(j)(3). In the trademark context, in contrast, U.S. courts have been willing to issue 

injunctions that require ISPs to permanently block access to domain names associated with 

infringing conduct. Nor have right holders been required to establish liability on the part of the ISP; 

rather, the injunction is issued for a default judgment against the infringer or under the preliminary 

injunction standard of the general rules of civil procedure. ,

, Case No. 10 Civ. 9336, Doc. 29, Default Judgment and Permanent Injunction Order (S.D.N.Y. 

May 31, 2011); , Case No. 10 Civ. 4974, Doc. 12, Preliminary Injunction and Order 

Authorizing Expedited Discovery (S.D.N.Y. July 13, 2010).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Even if liability were established, the available relief under the DMCA is narrow. One 

permissible form of injunction – prohibiting access to material at a particular site – is 

effectively identical to the statutory requirement that ISPs comply with DMCA 

takedown notices.269 The time and expense required to meet the DMCA’s procedural 

and substantive requirements may make injunctions not worthwhile to pursue. 

Foreign-based websites, which may be beyond the jurisdiction of U.S. courts, also

present challenges for right holders. The DMCA provides for the possibility of an 

order requiring an ISP to block access to a foreign website.270 Only one case has been 

brought to date seeking such an order, however, and it was voluntarily dismissed when 

the targeted site went offline soon after the lawsuit was filed.271

For purposes of deterrence, monetary relief is key. Because actual damages for 

copyright infringement can be difficult to prove, the Copyright Act permits a right 

holder to elect to seek damages within a statutorily defined range instead.

272

 In the 

online environment, where the scope of the infringing use will often not be 

ascertainable, making it hard to prove actual damages, the availability of statutory 

damages is increasingly important. Congress recognized this when it increased the 

level of damages in the Digital Theft Deterrence and Copyright Damages Improvement 

Act of 1999.273

In the decade or so since that congressional action, concerns have been raised about 

the application of statutory damages in certain contexts. For example, the Copyright 

Office has reported that the prospect of large statutory damages has deterred people 

from using orphan works, where they would be willing to negotiate if the owner could 

be found.274 As a result, the Copyright Office recommended limiting available 

monetary relief to only “reasonable compensation,” if an orphan work’s owner appears 

 

269

, No. 10 Civ. 4135, 2011 WL 940056 at *7 (S.D.N.Y. Mar. 17, 

2011).

270 17 U.S.C. § 512(j)(1)(B)(ii).

271 In 2002, the RIAA brought a suit against four major conduit ISPs seeking only an injunction under 

§ 512(j)(1)(B)(ii) to block access to a Chinese-based unlicensed music service, Listen4ever. 

, No. 02-CV-6554 (S.D.N.Y. filed Aug. 16, 2002); RIAA, 

(Sept. 4, 2002), http://www.riaa.com/print.php?id=77585D52-

E9D7-CF61-1F38-962F3FEB9597; Billboard, , http://www.

billboard.com/articles/news/74478/riaa-drops-isp-suit-vows-to-remain-vigilant.

272 Statutory damages normally range from a minimum of $750 to a maximum of $30,000 per work 

infringed, with the potential to be raised to a maximum of $150,000 upon a finding of willful infringement 

or lowered to a minimum of $200 upon a finding that the infringer was not aware and had no reason to 

believe that his or her acts were infringing. 17 U.S.C. § 504(c).

273 Pub. L. No. 106-160, 124 Stat. 3180, 3181; 145 CONG. REC. H12884 (“With the advanced 

technologies available and the fact that many computer users are either ignorant of the copyright laws or 

simply believe that they will not be caught or punished, the piracy trend will continue. One way to combat 

this problem is to increase the statutory penalties for copyright infringement so that they will be an 

effective deterrent to this conduct.”). 

274 Orphan Works Report note 152 at 12.
INTERNET POLICY TASK FORCE

and asserts an infringement claim.275 

Another issue involves the potential for huge statutory damage awards against online 

services because of the volume of works that they make available. While some have 

warned of a negative impact on investment and innovation,276 others point out that a 

proportionate level of deterrence is necessary against services that have the potential 

of causing great financial harm, and that the risk of statutory damages may motivate 

the development of means to prevent infringement.

277

Finally, there is the issue of statutory damages awards against individuals making 

infringing content available online. Much public attention has focused on the size of 

the awards in the two infringement cases against individual file sharers that have gone 

to trial. In both cases, after large awards by juries within the statutory range had been 

reduced by the district courts, they were eventually reinstated by the Courts of 

Appeals.278 These cases have led to calls for further calibration of levels of statutory 

damages.

279

 

The Task Force reiterates the importance of statutory damages in online copyright 

enforcement, but believes that there are certain areas where recalibration of their 

scope may be appropriate. To that end, we will seek public comment and convene 

public discussions regarding the application of statutory damages in the context of: (1) 

individual file-sharers; and (2) secondary liability for large-scale online infringement.280 

Additional extra-judicial tools for helping to curb online infringement were created by 

the DMCA, in provisions relating to the role of Internet service providers.

 

275

 That suggestion was incorporated in the orphan works bills introduced in Congress. , 

Shawn Bentley Orphan Works Act of 2008, S. 2913, at § 2 (2008).

276 , Stephanie Berg, 

, 56 J. COPYRIGHT SOC’Y U.S.A. 

265, 314-17 (2008-09); Michael A. Carrier, , 2012 WISC. L. REV. 

891, 940-41 (2012). 

277 , Ronald J. Mann & Seth R. Belzley, , 47 WM. & MARY 

L. REV. 239, 246-49, 251 (2005); Douglas Lichtman & Willam Landes, 

, 16 HARV. J.L. & TECH. 395, 405-06 (2003).

278 In the first case, after several retrials, the Court of Appeals for the Eighth Circuit recently affirmed the 

first jury’s finding of liability and award of $220,000 in statutory damages. 

, 692 F.3d 899, 911 (8th Cir. 2012), , 133 S. Ct. 1584 (Mar. 18, 2013). The jury in 

the first retrial awarded damages of $1.92 million, which the district court reduced to $54,000. The 

plaintiffs then offered to settle the case for $25,000, which was rejected. Greg Sandoval, 

, CNET, http://news.cnet.com/8301-31001_3-10442482-

261.html (Jan. 27, 2010). In the second case, the Court of Appeals for the First Circuit reinstated the 

jury’s award of $675,000 in statutory damages, reversing a decision by the district court to reduce it to 

$67,500. , 660 F.3d 487, 489-90 (1st Cir. 2011), , 132 S. 

Ct. 2431 (2012). 

279

, Pam Samuelson & Tara Wheatland, Statutory Damages in Copyright Law: A Remedy in Need of 

Reform, 51 WM. & MARY L. REV. 439, 500-09 (Spring 2009); Berg, note XX; Alan E. 

Garfield, , 38 FLA. ST. U. L. REV. 1 (2010). 

280 As to statutory damages in the context of orphan works, the Task Force notes that the Copyright Office 

is currently examining this issue again. Orphan Works NOI note 157. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

One particular class of online actor enjoys special protection against either primary or 

secondary liability claims. In 1998, the DMCA established safe harbors to shield ISPs 

from unreasonable liability. Service providers that cooperate with right holders in 

specified ways to curb infringement are immunized from monetary damages—but not 

injunctive relief.281

The DMCA safe harbors protect providers that comply with certain conditions when

they are engaged in one of four covered activities: serving as a conduit for 

transmitting content (“mere conduit”), caching, hosting, or providing information 

location tools.

282

 Where an ISP engages in activities beyond those specified in the 

statute, such as taking affirmative steps to encourage infringement, it may be exposed 

to full liability.283

One of the conditions on the availability of a safe harbor is that an ISP, to the extent it 

is engaging in covered activities going beyond mere transmission, must block or 

remove infringing content for which it has received a valid notice or is otherwise 

aware.284 A “put-back” mechanism ensures the ability to restore content that was 

removed through mistake or misidentification (within 10 to 14 days after receiving a 

counternotice).

285

 This structure has essentially created a new, extrajudicial tool –

notice and takedown – for curbing infringement.

A similar ISP safe harbor approach has been adopted in most of the U.S.’s major 

trading partners, including the member countries of the European Union, China, India, 

Japan, South Korea, Taiwan, and Australia.286

 

281 pp. 51-52.

282 The four ISP functions covered by the DMCA safe harbors are: (1) mere conduit activities, such as 

transmitting email or providing Internet service; (2) caching, or temporary automatic storage for purposes 

of transmitting data from one person to another; (3) hosting “information residing on systems or 

networks at direction of users”; and (4) providing “information location tools” such as search engines or 

hypertext links. 17 U.S.C. §§ 512(a)-(d).

283

, , 633 F. Supp. 2d at 142, 159 (precluding defendants from asserting safe harbor 

defenses and finding them liable for direct and secondary infringement); 

, No. CV 06-5578, 2009 WL 6355911, at *15-16 (C.D. Cal. Dec. 21, 2009) (service provider found 

ineligible for safe harbors) (“ ”). 

284 The provider is also protected from any liability for third-party claims based on its having taken down 

the material in good faith. 17 U.S.C. § 512(g)(1).

285 17 U.S.C. § 512(g)(2).

286 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on Certain 

Legal Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market 

(“Directive on Electronic Commerce”), arts. 12-15; Regulation On Protection of the Right of Communication 

Through Information Networks, arts. 14-17, 20-23 (China); Information Technology Act 2000 (as amended 

by the Information Technology Amendment Act, 2008), §§ 79, 81 (India); Law Concerning the Limits of 

Liability for Damages of Specified Telecommunications Service Providers and the Right to Request 

Disclosure of Identification Information of the Senders, art. 3 (Japan); Korean Copyright Act, arts. 102-04; 

Taiwanese Copyright Act, arts. 90quinquies-90terdecies; Australian Copyright Act § 116AG. U.S. FTAs also 

generally require such safe harbor provisions. , United States-Australia FTA, art. 17.11.29; United 

States-Korea FTA, art. 18.10.30; United States-Singapore FTA, art. 16.9.22. Canada has adopted (but not 

yet implemented) a different approach, featuring a “notice and notice” system wherein a right holder can 
INTERNET POLICY TASK FORCE

When the DMCA was enacted in 1998, concerns about online infringement were 

primarily focused on websites hosting content, and the notice and takedown system 

was designed with that focus. In that context, the system has generally worked well, 

subject to the issues discussed below.

287

 Later developments have brought new 

challenges and revealed some ambiguities in application of the DMCA safe harbors, 

causing difficulties for both right holders and ISPs. Most importantly, unanticipated 

types of infringing services, such as P2P file-sharing services and cyberlockers, do not 

fit neatly within the existing framework of the DMCA, and may require new 

approaches.288 For example, P2P file-sharing services generally do not involve content 

hosted by an ISP, and therefore cannot be subject to a DMCA takedown obligation. 

Other new products and services, such as cyberlockers and those mobile apps that 

facilitate infringement, may be subject to notice and takedown, but their decentralized 

nature, lack of searchability, and the scale of infringing content causes problems in 

application.

289

 

Although the DMCA makes clear that there is no affirmative duty for an ISP to monitor 

for infringing content,

290 a certain level of knowledge of infringement will trigger the 

need to take action in order to enjoy three of the four safe harbors.291 The requisite 

 

provide a notice to an ISP that a subscriber is infringing and the ISP must promptly forward that notice to 

the subscriber. Bill C-11, The Copyright Modernization Act, §§ 41.25–27. 

287 NOI responses from AT&T, 2, 6; Google, 2, 8-9; NCTA, 3; TechAmerica, 5-6; Library Copyright 

Alliance, 3; Public Knowledge, 1, 16-21; A2IM, AFM, AFTRA, DGA, IATSE, MPAA, NMPA, RIAA, SAG, 8-9, 30-

32 http://ssl.ntia.doc.gov/comments/100910448-0448-01/.

288

, Mark Lemley, , 6 J. TELECOMM. & HIGH TECH. L. 101, 124 (2007). 

Peter S. Menell, 

, 55 COMM. ASS’N COMPUTING MACHINERY 31 (2012).

289 For example, cyberlockers are not searchable and right holders must therefore individually locate 

infringing content, often by visiting other sites on which cyberlocker users post the URLs for their files. 

MPAA, RIAA, & NMPA IPEC Submission at 19-20 http://www.mpaa.org/Resources/

7960e748-c27e-4745-afe9-1012c85a4755.pdf. On the other hand, some cyberlocker operators not only 

respond to takedown notices, but have taken active steps to curb infringement through their services. 

, TorrentFreak, RapidShare: Traffic and Piracy Dipped After New Business Model Kicked In, 

http://torrentfreak.com/rapidshare-traffic-and-piracy-dipped-after-new-business-model-kicked-in-130109/

(Jan. 9, 2013). Right holders have also had some success in notifying app stores, such as Google’s Play 

Store or the Apple App Store, and having infringement-related apps taken down. Sue Zeidler, 

, REUTERS, Feb. 28, 2013,

http://www.reuters.com/article/2013/03/01/net-us-hollywood-apps-idUSBRE92003Y20130301; Joint 

Submission of MPAA, RIAA, and NMPA to IPEC at 15. Some remain available, however, either in their 

original form or as copycat applications, or are available through other sites that do not respond to 

requests from right holders. Joint Submission of MPAA, RIAA, and NMPA to IPEC at 15. 

290 17 U.S.C. §512(m)(1).

291 The safe harbor for conduit services, or “transitory digital network communications,” as set forth in 17 

U.S.C. § 512(a), is not conditioned on a lack of awareness of infringing activity. According to the DMCA’s 

legislative history, this exemption was intended to codify the holding of 

, 907 F. Supp. 1361 (N.D. Cal. 1995), that a service provider could not be liable 

for direct infringement if it takes no “affirmative action that [directly results] in copying . . . works other 

than by installing and maintaining a system whereby software automatically forwards messages received 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

knowledge may arise either through a valid notice from a right holder292 or 

independently. It includes not only actual knowledge293 but awareness of “facts or 

circumstances from which infringing activity is apparent,” referred to as a “red flag” 

standard.294 This standard includes both a subjective element, focusing on the ISP’s

actual awareness of the facts, and an objective element, focusing on whether the 

infringement is apparent from those facts.

295

 Congress’s goal was to ensure that ISPs 

were not burdened with the duty of proactively investigating but at the same time 

could not deliberately turn a blind eye.296

In recent years, courts have begun to examine the contours of “red flag” knowledge.

Both the Second and Ninth Circuits have held that the burden is on the right holders to 

demonstrate the requisite level of knowledge, and that an ISP must be aware of specific 

acts of infringement.297 Despite these decisions, litigation continues over the 

appropriate knowledge standard and the consistency of requiring knowledge of 

specific acts given the statute’s reference to “infringing activity” generally.

298

 Moreover, 

no court has yet determined whether “red flag” knowledge exposes an ISP to monetary 

damages for only that activity or more broadly to all activity on the site.299 Resolution 

of these questions by the courts will provide greater certainty to both right holders 

and ISPs and enable a clearer understanding of whether the safe harbors are operating 

as intended. 

 

from subscribers . . . and temporarily stores copies on its system.” . at 1368-70; H.R. REP. 105-551, at 24 

(1998).

292 The DMCA sets out a list of requirements for a valid notice that triggers the ISP’s obligation to take 

action once it is submitted to the ISP’s “designated agent.” 17 U.S.C. §§ 512(c)(3), 512(b)(1)(E), (c) (1)(C),

(d)(3).

293 17 U.S.C. § 512(d)(1)(A); 17 U.S.C. § 512(c)(1)(A)(i).

294 17 U.S.C. §§ 512(c)(1)(A)(ii), (d)(1)(B).

295 The test is “whether infringing activity would have been apparent to a reasonable person operating 

under the same or similar circumstances.” H.R. REP. 105-551, at 53; S. REP. 105-190, at 44 (1998).

296 H.R. REP. 105-551, at 53; S. REP. 105-190, at 44. 

297 , 676 F.3d 19, 30 (2d Cir. 2012) (concluding that both the actual 

and “red flag” knowledge provisions of the DMCA require “knowledge or awareness of specific infringing 

activity”); , 2013 U.S. App. LEXIS 5100 at *40-41 (explaining that the “red flag” test places the burden 

of showing awareness “with the copyright holder rather than the service provider” and that “general 

knowledge that [a service provider] hosted copyrightable material and that its services could be used for 

infringement is insufficient to constitute a red flag”); , 710 F.3d at 1043-44 (finding defendant 

ineligible for safe harbors because of his “red flag” knowledge). 

298 17 U.S.C. §§ 512(c)(1)(A)(i), (ii); note 297. A leading scholar has suggested that one 

reading that would, “give content to both provisions of the statute is to construe the ‘actual knowledge’ 

subparagraph to refer to knowledge of infringing items, whereas the ‘red flag’ subparagraph refers 

to knowledge.” 3-12B NIMMER ON COPYRIGHT § 12B.04.

299 , 710 F.3d at 1043 n. 20. The Court did not resolve this question because it found 

the defendants ineligible for the safe harbor as a result of “receiv[ing] a financial benefit directly 

attributable to the infringing activity” and having “the right and ability to control such activity,” under 17 

U.S.C. § 512(c)(1)(B). , 710 F.3d at 1044-46. The court held that when an ISP is ineligible for safe 

harbor protection under this provision of the DMCA, it “loses protection with regard to any infringing 

activity using the service.” at 1046.
INTERNET POLICY TASK FORCE

After more than a decade of experience with the DMCA notice and takedown system, 

right holders and ISPs alike have identified respects in which its operation can become 

unwieldy or burdensome. On one side, there are complaints that the system is too 

resource-intensive and requires constant re-notification as to the same content; on the 

other, that the volume has become too high, and notices may be inaccurate or 

otherwise misused. 

On the right holder side, the system is most effective for large entities or 

organizations. Many individual creators or small and medium-sized enterprises (SMEs) 

do not have the resources to engage in the ongoing monitoring and notification 

process required by the DMCA.300

For all types of right holders, concerns are expressed about the brief effective lifespan

of takedowns. The DMCA requires that the content be taken down only from the 

specific location identified in the notice. That limitation, coupled with the lack of any 

affirmative duty to monitor by ISPs, leads to infringing content often being quickly put 

back up on the same site. Right holders report that they find themselves in a game of 

“whack-a-mole”—a never-ending cycle of sending notices about infringing content that 

may be taken down, only to reappear a short time later in a new location on the same 

website.301 They have therefore called for an understanding that notice and takedown 

should mean notice and staydown—once a given piece of content has been notified as 

being infringed on the site, it should not be permitted to be put back up.302 This would 

require the use of technology to flag copyright content that has been notified and 

removed, and subsequent blocking of the flagged content. While such a system could 

be imposed via legislation, implementation would raise a number of technical and legal 

challenges. Voluntary cooperation between ISPs and right holders would offer a more 

flexible way of addressing this problem.

On the ISP side, concerns center on the volume of DMCA takedown requests, which has 

 

300 Christopher S. Stewart, , WALL STREET J., March 4, 

2013 (reporting that owner of small independent film distributor “found more than 903,000 links to 

unauthorized versions of her films” with estimated losses of “over $3 million in revenue” and a cost to 

send takedown notices of “over $30,000 a year”). As the Independent Film & Television Alliance (IFTA) 

noted, “[w]ithout substantial financial resources to utilize digital content protection technologies such as 

scanning and electronic notification services on an ongoing basis . . . the current notice and takedown 

provisions are an insufficient mechanism for many independent producers leaving them with no real 

alternative protection tools.” IFTA, Comments in Response to the USPTO & NTIA NOI on Copyright Policy, 

Creativity, and Innovation in the Internet Economy, at 5 (Dec. 10, 2010), 

http://ssl.ntia.doc.gov/comments/100910448-0448-01/attachments/IFTA%20Submission%20to%

20DOC%20NOI%20Copyright%20Policy.pdf. Copyright Alliance, Comments in Response to the 

USPTO & NTIA NOI on Copyright Policy, Creativity, and Innovation in the Internet Economy, at 15 (2010), 

http://ssl.ntia.doc.gov/comments/100910448-0448-01/attachments/Copyright%20

Alliance%20filing%20in%20Internet%20Policy%20Task%20Force%20NoI%20on%20copyright%2012%

2010%2010.pdf (“Independent artists and creators find great frustration with a notice-and-takedown 

approach to enforcing their own rights online. [An i]ndependent filmmaker . . . estimates she spends 

more than two hours daily sending notices to parties engaged in infringement, with mixed results. . . . The 

time consumed in this daily exercise is time that could be spent creating her next film.”).

301 Joint Submission of MPAA, RIAA, and NMPA note 289 at 19-20. 

302 at 19.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

increased significantly. Google, which as a provider of “information location tools” 

under the DMCA may receive more takedown requests than any other entity, reports 

that the number of such requests it receives for Google Search on a weekly basis has 

climbed into the millions.303 As right holders have noted, even those numbers fail to 

reflect the full scope of infringing content available through search results given 

volume limitations on the automated processes for submitting requests.304 

One of the primary contributors to the overall volume of notices may be the “whack-amole” problem described above. Another may be the increased reliance by many right 

holders on automated systems to help them locate infringing content and submit 

takedown requests. Because the large amount of infringing content on the Internet

makes individual review of each item infeasible, large right holder organizations find it 

necessary to use automation. Moreover, content stored on certain services, such as 

cyberlockers, is not directly searchable; right holders must locate infringing URLs 

through other sites that aggregate links and then send takedown notices directly to the 

cyberlockers, adding a step to the process.

305

Other concerns about the notice and takedown system relate to erroneous 

infringement claims, which can affect third party interests as well as those of the ISP.306 

In some cases, such as with DMCA take-downs of political advertisements, the goal of 

the takedown request may have little to do with copyright.307 The extent of inaccurate 

notices is subject to dispute, but is very small in relation to the many millions of 

notices sent.308 Some errors may be caused by the use of automated systems

(particularly in those cases where the results are not verified by human review). In the 

case of deliberate abuse, the DMCA provides a legal remedy, enabling damage claims 

against any person who “knowingly materially misrepresents under this section ... that 

 

303 Google Transparency Report, Removal Requests, Copyright, http://www.google.com/

transparencyreport/removals/copyright/ (reporting 3.5 million requests received during the week of 

December 10, 2012; this number is only for takedown requests directed toward Google Search, not any 

other Google products such as YouTube); TorrentFreak, RIAA Set For Historic 10,000,000th Google 

URL Takedown, http://torrentfreak.com/riaa-set-for-historic-10000000th-google-url-takedown-130204/, 

(Feb. 4, 2013).

304 Brendan Sasso, , THE HILL, 

http://thehill.com/blogs/hillicon-valley/technology/230143-music-industry-accuses-google-of-slacking-onpiracy-fight (May 30, 2012).

305 Comments of MPAA, NMPA & RIAA to IPEC note 289 at 19-20.

306 , Google, , http://www.google.com/transparencyreport/

removals/copyright/faq/#abusive_copyright_requests; Chilling Effects Clearinghouse, http://

chillingeffects.org/; Electronic Frontier Foundation, , https://www.eff.org/

takedowns; John Paul Titlow, , 

READWRITE.COM, http://readwrite.com/2013/01/22/5-absurd-copyright-takedowns-that-make-the-law-lookoutdated (Jan. 22, 2013).

307 Center for Democracy & Technology, 

(Sept. 2010), https://www.cdt.org/files/pdfs/copyright_

takedowns.pdf.

308 Google reports, for example, that it “removed 97% of search results specified in requests” between July 

and December 2011, Google, , http://www.google.com/

transparencyreport/removals/copyright/faq. Notably, Google reviews takedown notices and does not 

remove links for a number of reasons, including “not having . . . enough information about why the URL is 

allegedly infringing; not finding the allegedly infringing content referenced in the request; deducing that 

the copyright removal process is being used improperly . . . or fair use.” . 
INTERNET POLICY TASK FORCE

material or activity is infringing.”309 Courts have interpreted this language to require 

subjective measurement of the copyright owner’s bad faith;310 to require that a material 

misrepresentation “affect[] [the service provider’s] response to a DMCA letter;”

311 and 

to require copyright owners to consider, in certain circumstances, whether a given use 

qualifies as fair use.312

All of these problems taken together may be undermining the benefits of the notice 

and takedown system. One potential solution to ease the burdens involved and 

improve results could be to create best practices for identifying infringing content and 

sending notices, for takedown procedures, and for ensuring that infringing content 

once removed does not immediately reappear. This would benefit right holders, ISPs

and end users alike, by supporting a more efficient and reliable notice and takedown 

system. To that end, the Task Force will convene a multi-stakeholder dialogue 

involving right holders (both large and small), ISPs, consumer representatives and

companies in the business of identifying infringing content, on how to improve the 

operation of the notice and takedown system. 

As to the issue of individual right holders and SMEs lacking the resources to effectively 

utilize the DMCA takedown mechanism, a possible alternate remedy may be created 

through a separate small claims procedure. The U.S. Copyright Office is undertaking a 

study at the request of Congress to assess whether and, if so, how, the current legal 

system hinders or prevents copyright owners from pursuing infringement claims with 

a relatively small economic value; and to recommend potential changes in 

administrative, regulatory, and statutory authority.313 While the study is not limited to 

claims involving online infringement, an alternative procedure could be useful for such 

claims when they involve small entities or small-scale infringements, lessening the 

need to rely on the DMCA notice and takedown process. The Copyright Office has 

published three Notices of Inquiry,314 held a series of public hearings in November 

2012,315 and is scheduled to issue a final report to Congress in September 2013. The 

Administration supports this effort and will continue to work with the Copyright 

Office on this issue.

 

309 17 U.S.C. § 512(f)(1). Damage claims are also available for knowing misrepresentations “that material or 

activity was removed or disabled by mistake or misidentification.” 

310 391 F.3d 1000 (9th Cir. 2004). 

311

, 337 F. Supp. 2d 1195, 1204 (N.D. Cal. 2004); 

, 813 F. Supp. 2d 678, 704-05 (D. Md. 2011); , 

, 611 F. Supp. 2d 342, 346 (S.D.N.Y. 2009).

312 , 572 F.Supp.2d 1150, 1155-56 (N.D. Cal. 2008); 

, No. 5:07-CV-03783-JF, 2013 WL 271673 at *8 (N.D. Cal. Jan. 24, 2013).

313 Copyright Office, Remedies for Small Claims, 76 Fed. Reg. 66758 (Oct. 27, 2011).

314 ; Copyright Office, Remedies for Small Copyright Claims: Additional Comments, 77 Fed. Reg. 51068 

(Aug. 23, 2012); Copyright Office, Remedies for Small Copyright Claims: Third Request for Comments, 78 

Fed. Reg. 13094 (Feb. 26, 2013). 

315 U.S. Copyright Office, , http://www.copyright.gov/docs/

smallclaims/public-hearings-112012.html. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

A separate problem relates to the availability of accurate information on where to send 

a takedown notice. To be eligible for a DMCA safe harbor, service providers must 

identify an agent for receiving notices of claimed infringement, and provide contact 

information both on their own websites and to the U.S. Copyright Office.316 Although 

the Copyright Office removes an old designation and replaces it whenever new 

information is provided, there is no obligation for ISPs to provide updates. Because 

many do not in fact do so, the database is not current and reliable.317

To improve the situation, the Copyright Office is proposing to implement an electronic 

process to replace the existing system, where filings are made either via mail or inperson.

318 The Copyright Office would require all ISPs to file new designations of 

agents within one year after new regulations go into effect, and thereafter to update 

and/or verify the accuracy of their information on a regular basis.

319

 The Task Force

supports the Copyright Office’s efforts to address this issue. As its technical capacity 

evolves, the Copyright Office database could become an interactive portal for DMCA 

notices. 

As part of the overall bargain of the DMCA, two other tools were created to assist right

holders: an obligation for ISPs to adopt and implement a policy to terminate the 

accounts of repeat infringers in appropriate circumstances,320 and a streamlined 

subpoena procedure to obtain identifying information about individual infringers.321 

Since enactment of the DMCA, both have given rise to problems of interpretation, 

 

316 17 U.S.C. § 512(c)(2). The statute requires the name, address, phone number, and e-mail address of the 

agent, as well as any other contact information the Register of Copyrights deems appropriate. 

317 In 2010, the Software & Information Industry (SIIA) conducted a study to determine the accuracy of the 

contact information in the Copyright Office’s database and found a number of problems with out-of-date 

or unreliable information. SIIA, Comments in Response to the USPTO & NTIA NOI on Copyright 

Policy, Creativity, and Innovation in the Internet Economy, at 21-22, 

http://ssl.ntia.doc.gov/comments/100910448-0448-01/attachments/SIIACommentsOnTaskForce

Questions.pdf. The SIIA sent out sample e-mails to designated agents listed, and nearly half were 

returned as undeliverable. Of those that were deliverable, many went without a response. at 22.

318 U.S. Copyright Office, Online Service Providers, Background, http://www.copyright.gov/onlinesp/NPR. 

Designation of Agent to Receive Notification of Claimed Infringement, 76 Fed. Reg. 188 at 59953, 

(Sept. 28, 2011). 

319 U.S. Copyright Office, Designation of Agent to Receive Notification of Claimed Infringement, 76 Fed. 

Reg. 59953 (Sept. 28, 2011). 

320 17 U.S.C. § 512(i)(1)(A). Compliance with this provision is a condition for eligibility for any of the safe 

harbors, along with not interfering with standard technical measures, at § 512(i)(1)(B), and designating 

an agent to receive notices of claimed infringement, at § 512(c)(2). Several other countries have 

adopted similar provisions regarding the termination of repeat infringers’ accounts. , Copyright 

Act of 1968 § 116AH (Australia); Copyright (Network Service Provider) Regulations 2005 § 8 (Singapore); 

Korean Copyright Act art. 102(1)(1) (South Korea). Other governments, including those of France, the U.K., 

New Zealand, and Taiwan, have adopted laws that allow for termination of repeat infringers’ accounts in 

the context of a graduated response system, discussed pp. 71-74. 

321 17 U.S.C. § 512(h).
INTERNET POLICY TASK FORCE

making these provisions less useful to right holders than originally anticipated. 

A service provider must meet three requirements under this provision: “(1) adopt a 

policy that provides for the termination of service access for repeat copyright 

infringers in appropriate circumstances; (2) implement that policy in a reasonable 

manner; and (3) inform its subscribers of the policy.”322 As to the termination of repeat 

infringers’ accounts, the legislative history shows that Congress believed that a 

“realistic threat” of losing internet access must exist as a deterrent for repeated or 

flagrant infringement.323 Unfortunately, three key phrases in the statute – “repeat 

infringer,” “appropriate circumstances,” and “reasonably implement” – have been 

subject to inconsistent interpretations in the courts. 

Most critically, there is no clear definition of when a user must be considered a 

“repeat” infringer. Although some courts have said that several notices of 

infringement from a copyright owner alone are sufficient,324 others have disagreed.

325

 

Requiring repeat judicial findings of infringement before a subscriber could be 

terminated would arguably render the statutory remedy superfluous. One leading 

commentator has suggested that someone could be considered an infringer either 

based on a court finding or if the ISP has actual knowledge of infringing conduct 

(beyond a right holder notice).326 

Several courts have addressed the question of whether a policy has been reasonably 

implemented, with little consistency other than the general principle that a policy 

ought to carry some meaningful potential of leading to termination.327 With respect to 

“appropriate circumstances,” the legislative history makes reference to “different 

degrees of on-line copyright infringement, from the inadvertent and noncommercial, to 

the willful and commercial.”328 At least one court has relied on that passage to 

conclude that an ISP may take such considerations into account when deciding 

whether the circumstances are appropriate to result in termination.

329 Ultimately, 

questions will remain about the contours of this requirement until there is either more 

 

322 , 357 F.3d 1072, 1080 (9th Cir. 2004).

323 H.R. REP. NO. 105-551, pt. II, at 61 (1998) (“[T]hose who repeatedly or flagrantly abuse their access to the 

Internet through disrespect for the intellectual property rights of others should know that there is a 

realistic threat of losing that access.”); S. REP. NO. 105-90, at 52 (1998) (same).

324

, 340 F. Supp. 2d 1077, 1088 (C.D. Cal. 2004).

325

, 351 F. Supp. 2d 1090, 1105 (W.D. Wash. 2004). 

326 NIMMER ON COPYRIGHT § 12B.10(B)(3)(c).

327

, , 488 F.3d 1102, 1109 (9th Cir. 2007); , 

252 F. Supp. 2d 634, 659 (N.D. Ill. 2002) , 334 F.3d 643, 655 (7th Cir. 2004); , 357 

F.3d 1072, 1080 (9th Cir. 2004); , 665 F. Supp. 2d 1099, 1116 

(C.D. Cal. 2009); , No. 10 C 6517, 2011 WL 3205399, at *10 (N.D. Ill. July 27, 

2011) , 689 F.3d 754 (7th Cir. 2012). 

328 H.R. REP. NO. 105-551, pt. II, at 61 (1998) (footnote omitted); S. REP. NO. 105-90, at 52 (1998) (footnote 

omitted).

329 , 213 F. Supp. 2d 1146, 1176-77 (C.D. Cal. 2002) (noting that the 

types of appropriate circumstances leading to a duty to reasonably implement termination would “appear 

to cover, at a minimum, instances where a service provider is given sufficient evidence to create actual 

knowledge of blatant, repeat infringement by particular users, particularly infringement of a willful and 

commercial nature”).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

development in the case law or alternative solutions are provided through stakeholdernegotiated understandings. Collaborative public-private efforts could help develop 

standards for the termination of repeat infringers, including the possibility of having a 

third party verify repeat infringement. 

The subpoena provision of the DMCA allows right holders to obtain the identity of an 

alleged infringer from an ISP, in order to be able to bring a lawsuit for direct 

infringement.330 Courts have held that this subpoena provision does not apply to 

requests for the identities of P2P users of conduit ISPs, but only to users of hosting or 

linking ISPs.

331

 This result has been critiqued by some as contrary to the intention of 

the drafters, and the Register of Copyrights has urged that the DMCA be amended to 

reverse it.332 Since those decisions, right holders have instead relied on the mechanism 

of subpoenas issued under Federal Rule of Civil Procedure 45 to obtain identifying 

information of individual P2P users.333 

A number of possible solutions have been identified to address the gaps and 

shortcomings in existing legal tools. As to problems relating to the scope of remedies 

and to application of the DMCA safe harbors, several initiatives have been proposed 

above. As to other problems, a number of solutions have already been adopted or are 

underway in the U.S. and elsewhere, whether in the form of legislation, private 

agreements or informal cooperation. But most are still in the early stages, making it 

difficult to assess their degree of success. 

Considerable progress in curbing online infringement has been made in recent years 

through stakeholder cooperation. All participants in the digital economy have both a 

responsibility and much to gain from working together to enable a functioning 

marketplace, by educating the public, curbing infringement, and promoting legitimate 

uses of copyrighted material. Right holders can achieve positive returns, and 

intermediaries can lower their risk of liability and potentially enhance the

competitiveness of their commercial offerings. Although some problems ultimately 

may require legislative solutions, voluntary initiatives are an important component of 

devising new ways to protect copyrights in the digital environment. The Task Force 

 

330 17 U.S.C. § 512(h). 

331

, 393 F.3d 771, 772 (8th Cir. 2005); 

, 351 F.3d 1229, 1233 (D.C. Cir. 2003) 

, 543 U.S. 924 (2004). 

332 Statement of Marybeth Peters, The Register of Copyrights, before the Committee on the Judiciary, 

U.S. Senate, 

108th Congress, 1st Session, Sept. 9, 2003.

333

, , 326 F. Supp. 2d 556, 567 (S.D.N.Y. 2004); 

, 551 F. Supp. 2d 1, 8-9 (D.D.C. 2008). By contrast, in Germany, right holders work with 

Internet monitoring firms to identify large numbers of alleged infringers based solely on Internet Protocol 

addresses, obtain court orders directing ISPs to provide contact information, and send cease-and-desist 

letters directly to the subscribers seeking settlement. Ben Knight, , 

EXBERLINER, Feb. 28, 2012, http://www.exberliner.com/articles/the-lowdown-on-downloads/. 

By some accounts, 300,000 subscribers a month are identified through this process. Janko Roettgers, 

, GIGAOM, http://gigaom.com/2011/05/31/

germany-mass-p2p-lawsuits (May 31, 2011). 
INTERNET POLICY TASK FORCE

encourages stakeholders to take part in existing initiatives or to develop others 

relevant to their own sectors.334

The potential solutions described below – website blocking, content filtering, a “follow 

the money” approach, search engine demotion and delinking, and graduated response 

– have all been proposed or adopted in some form to address the problems of P2P filesharing and websites dedicated to piracy, but could assist in curbing infringement in 

other contexts as well. While each may offer benefits, they also raise a number of

concerns that would need to be resolved.

One proposed method for addressing websites dedicated to piracy, and the one that 

has generated the most controversy recently, is directing ISPs to block the public’s 

access to them. Restricting U.S. access to foreign-based websites dedicated to piracy

could serve to reduce infringing traffic.335 As discussed above, while under current law 

injunctions requiring ISPs to block foreign websites are theoretically available, they 

have not been sought by right holders for a number of reasons.

336

 

In 2011, the U.S. Congress considered legislation along these lines. The PROTECT IP 

Act introduced in the Senate, and the Stop Online Piracy Act (SOPA) introduced in the 

House, would have provided for expanded government and private enforcement 

actions directed toward blocking websites dedicated to piracy.

337

 While the bills 

 

334 In enacting the DMCA, Congress also acknowledged the importance of voluntary agreements in 

addressing technological developments, conditioning ISP safe harbors on accommodating “standard 

technical measures” that have been “developed pursuant to a broad consensus of copyright owners and 

service providers in an open, fair, voluntary, multi-industry standards process.” 17 U.S.C. §§ 512(i)(1), (2). 

Congress recognized “technology is likely to be the solution to many of the issues facing copyright owners 

and service providers in this digital age” and “strongly urge[d] all of the affected parties expeditiously to 

commence voluntary, interindustry discussions to agree upon and implement the best technological 

solutions available to achieve these goals.” S. REP. 105-190, at 52. Although no measures have yet been 

identified under the DMCA provision, increasing stakeholder cooperation may lead to such a result. 

A number of voluntary initiatives have already been developed, as described below. In July 2013, ICANN 

released a new agreement for domain name registries issuing generic top-level domains (gTLDs). Under 

the agreement, registries must require registrars to prohibit domain name holders from engaging in 

“piracy” and “trademark or copyright infringement” and to provide “consequences for such activities 

including suspension of the domain name.” ICANN, New gTLD Registry Agreement, Specification 

11.3.a (July 2, 2013) http://newgtlds.icann.org/en/applicants/agb/agreement-approved02jul13-en.pdf The IPEC has also stated the intent to encourage dialogue with domain name registrars 

and others to explore whether they might develop voluntary best practices to respond to piracy. 2013 

Joint Strategic Plan note 112 at 36.

335 The primary focus of potential solutions is on foreign-based websites, which, as described above at 40, 

present the most significant challenges to existing enforcement tools. Statement of Maria Pallante, 

Register of Copyrights before the Committee on the Judiciary (Nov. 16, 2011), http://www.

copyright.gov/docs/regstat111611.html; MPAA, RIAA, & NMPA IPEC Submission note 289 at 

13 (noting that websites dedicated to piracy “increasingly avoid any contacts with the U.S. but are 

nevertheless readily accessible to the U.S. market”).

336 pp. 51-52.

337 Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011, 

(PROTECT IP Act), S. 968, 112th Cong. (2011). Stop Online Piracy Act (SOPA), H.R. 3261, 112th Cong. 

(2011). 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

differed in various respects, as initially introduced, both would have authorized the 

Attorney General to pursue an injunction directing ISPs that offer “last mile” Internet 

access services (as well as certain DNS server operators) to block access to and redirect 

users away from a foreign infringing site.338 Specifically, the original versions of the 

bills contained provisions that would have required ISPs to respond to DNS queries by 

pointing users not to the requested websites but instead to an Attorney General notice.

While the bills were supported by many right holders, the website blocking provisions 

provoked strong opposition, with unprecedented online activism from individuals, 

companies, and civil society.

339 Some raised concerns that the DNS filtering provisions 

could engender threats to speech, security, and stability on the Internet, while leaving 

contraband goods and services accessible online.

340

 The Administration shared some 

of these concerns, particularly with respect to the security implications of DNS 

redirection.

341 Although consideration was given to removing the provisions related to 

ISP injunctions while retaining the provisions on the “follow the money” approach 

(discussed below at 67-70)

342 ultimately both bills were withdrawn.343

 

Outside of the United States, some form of website blocking has been used as a tool 

against copyright infringement in a number of countries in recent years. In the EU, 

Article 8(3) of the Copyright Directive requires that Member States “ensure that 

 

338 SOPA at § 102; PROTECT IP Act at § 3. One fundamental difference between the two bills was in how 

they defined the targeted websites. The PROTECT IP Act would have allowed for actions against websites 

“dedicated to infringing activities,” defined to cover sites with no significant use other than engaging in, 

enabling, or facilitating copyright infringement, circumvention of TPMs or RMI, or the sale, distribution, or 

promotion of counterfeit goods and services. SOPA’s private right of action would have been limited to 

actions against sites “dedicated to theft of U.S. property,” a more expansive category that would have 

permitted actions when the operator of the site “is taking, or has taken, deliberate actions to avoid 

confirming a high probability of the use of the U.S.-directed site to carry out” copyright infringement or 

circumvention of TPMs and RMI. SOPA at § 103(a)(1). 

339 The protests against the bills culminated on January 18, 2012, when a number of popular websites, 

including Wikipedia and Reddit, participated in a 24-hour blackout in which they shut down access to 

their sites. Stephanie Condon, , CBS NEWS, Jan. 18, 2012, 

http://www.cbsnews.com/8301-503544_162-57360665-503544/sopa-pipa-what-you-need-to-know. 

340 , Jonathan Weisman, , NY TIMES, Jan. 18, 

2012; Mark Lemley, David S. Levine, & David G. Post, , 64 STAN. L. REV. ONLINE 34 

(Dec. 19, 2011); Steve Crocker et al, 

(May 2011), http://domainincite.com/docs/PROTECT-IPTechnical-Whitepaper-Final.pdf. 

341 Victoria Espinel, Aneesh Chopra, & Howard Schmidt, 

, WhiteHouse.gov, https://petitions.whitehouse.gov/response/combatingonline-piracy-while-protecting-open-and-innovative-internet (Jan. 14, 2012).

342 Comment of Senator Patrick Leahy on Internet Service Providers and the PROTECT IP Act (Jan. 12, 

2012), http://www.leahy.senate.gov/press/comment-of-senator-patrick-leahy-on-internetservice-providers-and-the-protect-ip-act; Press Release, (Jan. 20, 

2012) http://lamarsmith.house.gov/news/documentsingle.aspx?DocumentID=275770. 

343 Paul Kane, SOPA, PIPA votes to be delayed in House and Senate, THE WASHINGTON POST, Jan. 20, 2012, 

http://www.washingtonpost.com/blogs/2chambers/post/sopa-senate-vote-to-be-delayed-reidannounces/2012/01/20/gIQApRWVDQ_blog.html. Senator Ron Wyden introduced as an alternative 

approach the Online Protection and Enforcement of Digital Trade Act (OPEN Act), S. 2029, 112th Cong., 

giving new powers to the ITC to target online piracy. The OPEN Act did not make it out of Committee. 

http://www.govtrack.us/congress/bills/112/s2029.
INTERNET POLICY TASK FORCE

rightholders are in a position to apply for an injunction against intermediaries whose 

services are used by a third party to infringe a copyright or related right.”344 The 

Directive does not specify any particular technique to be required by such an 

injunction. Courts in several Member States have applied their national legislation 

implementing this provision to issue orders requiring ISPs to block access to specific 

infringing websites, sometimes through DNS blocking, sometimes through IP blocking, 

and sometimes without specifying the method.

345

 Blocking orders have also been 

issued in several non-EU countries.346

The Task Force reiterates the Administration’s view that “[w]hile . . . online piracy by 

foreign websites is a serious problem that requires a serious legislative response,” we 

“will not support legislation that reduces freedom of expression, increases 

cybersecurity risk, or undermines the dynamic, innovative global Internet.”

347

 We 

believe that solutions must be found, legislative or otherwise, but the values of free 

speech and cybersecurity must not and need not be compromised. It is critical to 

ensure that these values are appropriately accommodated in any legislation, court 

order or voluntary action.

 

344 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the 

Harmonization of Certain Aspects of Copyright and Related Rights in the Information Society, art. 8(3). 

Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on Certain 

Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market 

(“Directive on Electronic Commerce”), at Recital 45; Directive 2004/48/EC of the European Parliament and 

of the Council of 29 April 2004 on the Enforcement of Intellectual Property Rights, at art. 11 (“Member 

States shall also ensure that rightholders are in a position to apply for an injunction against 

intermediaries whose services are used by a third party to infringe an intellectual property right, without 

prejudice to Article 8(3) of Directive 2001/29/EC.”). In contrast to the DMCA, no finding of infringement 

by the service provider is necessary to obtain an injunction. 

345 The Netherlands, , Court of the Hague (Civil Division), Case 

No. 413085 / KG ZA 12-156 (May 10, 2012); U.K., [2013] EWHC 

379 (Ch) (Feb. 28, 2013); U.K., [2012] EWHC 1152 

(Ch) (May 2, 2012); U.K., , [2011] EWHC 1981 

(Ch.) (July 28, 2011); Belgium, Hof van Beroep [Court of 

Appeal] Antwerpen, docket No. 2011/8314 (Sept. 26, 2011); Denmark, Supreme 

Court of Denmark, case 153/2009, (May 27, 2010) (; Denmark, , Byret [City 

Court] Copenhagen, docket No. F1-15124/2006 (Oct. 25, 2006); Austria, 

Commercial Court of Austria (May 13, 2011); Finland, , docket No. H 11/20937, 

Helsinki District Court (Oct. 26, 2011); Germany, , 310 O 

154/10, Landgericht Hamburg, 10th Civil Chamber (May 6, 2010); Greece, 

, Athens Court of First Instance, Decision no. 4658/2012 (Nov. 7, 2011); Italy, , Court 

of Cassation, Third Criminal Chamber, Docket No. 40884/08 (Sept. 29, 2009); Sweden, 

, Swedish Court of Appeal (May 4, 2010); Lukas Feiler, 

, TRANSATLANTIC TECH. L. FORUM WORKING PAPERS No. 13 at 22-26 (2012), 

http://www.law.stanford.edu/sites/default/files/publication/203758/doc/slspublic/feiler_wp13.pdf. 

346 India, , GA No. 187, CS No. 23 (Jan. 27, 2012 & Feb. 6, 

2012); Israel, , CSCE 3485/08, 000167/07, Haifa District Court (Feb. 25, 2008); Turkey, 

TorrentFreak, , http://torrentfreak.com/the-pirate-bay-blocked-in-turkey

(Sept. 17, 2007). 

347 Victoria Espinel, Aneesh Chopra, & Howard Schmidt, 

, WhiteHouse.gov, https://petitions.whitehouse.gov/response/combating-onlinepiracy-while-protecting-open-and-innovative-internet (Jan. 14, 2012).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Another tool that could be effective in curbing online infringement is filtering. 

Filtering can be done in different ways by different types of services, primarily at 

either the network or website level. 

ISPs can at least in theory filter at the network level by screening all incoming network 

traffic to look for unique identifying marks, which could be assigned to each piece of 

digital content, to determine whether transmissions are authorized.348 As with website 

blocking, content filtering raises potential policy concerns related to privacy and free 

expression, primarily because of the possibility of the misidentification of noninfringing content and the difficulty in distinguishing between authorized and 

unauthorized uses.349 Such filtering could also raise technical concerns caused by 

increased “latency” (or delay) in content delivery caused by the filtering system.350 Any 

evaluation of these concerns will depend on the particular nature and implementation 

of the filtering technologies at issue.351 

Although there have been no reported cases on network-level filtering in the U.S., the 

European Court of Justice has struck down as overbroad under E.U. law an order 

requiring a Belgian ISP to install a filtering system that would monitor all 

communications on its network to prevent the infringement of musical works

(although the court implied that a more limited filtering order might be permissible).352

Content filtering for online websites and services has met with more success to date. 

The major voluntary initiative to date that incorporates filtering relates to online sites 

that host user-generated content (UGC).353 The Principles for User Generated Content 

Services (the “Principles”), developed in 2007, were established by a group of private 

companies, including copyright owners and UGC services, in order “to foster an online 

environment that promotes the promises and benefits of UGC Services and protects 

 

348 Envisional, 26-29 (July 2012), 

http://documents.envisional.com/docs/Envisional-Global_Site_Blocking_Landscape-July2012.pdf; Bill 

Rosenblatt, 25 (Dec. 5, 2011), 

http://irdeto.com/documents/New_Technologies_for_Pay_TV_Content_Security.pdf.

349 , Mehan Jayasuriya et al., Forcing the Net Through a Sieve: Why Copyright Filtering is Not a 

Viable Solution for U.S. ISPs 47-49 (2009), http://www.publicknowledge.org/pdf/pk-filteringwhitepaper-200907.pdf.

350 at 26-27.

351 Filtering generally relies on one of two different technologies, watermarking or fingerprinting, and can 

in theory be done either at the website or network level. Rosenblatt note 348 at 21-25. 

352 Case C-70/10, [2011] at ¶¶ 47-53, 55 (rejecting the injunction because it had “no 

limitation in time, is directed at all future infringements and is intended to protect not only existing 

works, but also future works that have not yet been created at the time when the system is introduced” 

and would therefore “require that ISP to install a complicated, costly, permanent computer system at its 

own expense”).

353 User-generated content (“UGC”) has been defined as “i) content made publicly available over the 

Internet, ii) which reflects a certain amount of creative effort, and iii) which is created outside of 

professional routines and practices.” Organisation for Economic Co-Operation and Development, 

4 (2007). A large number of websites and internet services 

feature substantial volumes of UGC. at 9.
INTERNET POLICY TASK FORCE

the rights of Copyright Owners.”354 Among other things, the Principles require UGC 

services to filter content actively and to ensure that their filtering technology is up-todate.355

 Many companies with an online presence have adhered to the UGC principles 

since they were first adopted.

356

There are also steps that individual companies can and do take to minimize 

infringement through their services. These can involve fingerprinting and other 

technologies for identifying copyrighted material, allowing it to be filtered or 

appropriately used under a license. Many websites employ voluntary filtering, 

including a number of services that are not signatories to the Principles. The most 

well-known is YouTube’s Content ID digital fingerprinting system, which allows right 

holders to submit metadata and reference files for content they own, which are

compared to videos posted on YouTube.357 Right holders can choose to monetize the 

infringing files, block them, or obtain statistics on their use.

358

 Other companies offer 

services to fingerprint and identify copyrighted material or to “crawl” the web to find 

copyrighted content.359

One potential constraint on such voluntary action may be a concern that voluntary 

filtering could result in a finding of sufficient knowledge or control of infringing

activity to place the service provider outside the DMCA safe harbors.360 But as most 

filtering is accomplished through automated processes, the courts have rejected 

arguments that its implementation prevents safe harbor eligibility.361 In fact, taking 

such action to curb infringement can help in avoiding a finding of secondary liability. 

For example, the Supreme Court in noted that the service’s failure to 

implement a copyright filter was evidence of its intent to induce infringement.362

Filtering has also been imposed as a remedy in litigation against P2P services as well as 

sites that host or maintain pointers to infringing content. Courts in the United States

 

354 The Principles provide that copyright owners and UGC services should cooperate with regard to 

creating “content-rich, infringement-free services,” to which end they “should cooperate in the testing of 

new content identification technologies and should update these Principles as commercially reasonable, 

informed by advances in technology, the incorporation of new features, variations in patterns of infringing 

conduct, changes in users’ online activities and other appropriate circumstances.” Principles for User 

Generated Content Services, http://www.ugcprinciples.com/.

355 , at ¶ 3.

356 PR Newswire, YouKu joins broad coalition in support of UGC principles, http://www.prnewswire.

com/news-releases/youku-joins-broad-coalition-in-support-of-ugc-principles-117512623.html (March 7, 

2011).

357 YouTube, Content ID, http://www.youtube.com/t/contentid. 

358

 According to YouTube, Content ID accounts for over one-third of its total monetized views. 

YouTube – Statistics, http://www.youtube.com/yt/press/statistics.html. 

359 , Audible Magic – About Audible Magic, http://audiblemagic.com/company.php. 

360 17 U.S.C. §§ 512(c)(1)(B), (d)(2).

361 , 665 F. Supp. 2d 1099, 1113 (C.D. Cal. 2009) 

, -- F.3d --, 2013 WL 1092793 (9th Cir. Mar. 14, 2013).

362 , 545 U.S. at 939. , 784 F. Supp. 2d at 429-31; , 633 F. Supp. 2d at 

153. In the Australian case against P2P file-sharing service Kazaa, the court highlighted Kazaa’s failure to 

implement available filtering technology. 

, [2005] FCA 1242.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

have issued injunctions requiring online services to filter out the content or pointers.

The Task Force encourages stakeholders to continue to work together to develop 

identification and filtering systems that are consistent with rights to due process and 

free expression. While filtering technology is already being deployed in a number of 

contexts, more can be done to improve its efficiency and accuracy. Considerable 

promise is offered by rapidly improving technologies for the identification of online 

content, which may permit more granular and tailored applications. 

One different and promising approach against websites dedicated to piracy focuses on 

stemming the cash flow they need to survive.363 Payment processors and ad networks

in particular are major contributors to the ability of the sites to earn a profit.364 

Websites that profit from infringing material typically rely on payment processors to 

process their sales. Use of well-known payment processors provides such websites 

with an appearance of legitimacy, and consumers may be misled into thinking the site 

is lawful. These websites’ operations could be substantially disrupted if their 

relationships with payment processors were severed. Payment processors have taken 

steps to accomplish this result in the United States and elsewhere. 

Banks and payment processors have voluntarily initiated programs under which they 

crawl the internet for certain violations of their rules; this now includes intellectual 

property rights violations.365 In addition, in June 2011, a group of leading payment 

processors in the United States finalized a set of best practices to investigate 

complaints and stop processing transactions for sites that distribute counterfeit and 

pirated goods. Under these best practices, reached with the support of the 

 

363 This approach was included in both SOPA and the PROTECT IP Act, and received significantly less 

opposition than the controversial provisions on website blocking. Both bills would have allowed the 

Attorney General and right holders to obtain orders requiring payment processors and advertisers to 

cease doing business with websites dedicated to piracy. SOPA at §§ 102(c)(2)(C)-(D) & 103(b)(1)-(2); 

PROTECT IP Act at §§ 3(d)(2)(B)-(C) & 4(d)(2)(A)-(B).

364 PRS for Music & Google (June 27, 2012), 

http://www.prsformusic.com/aboutus/policyandresearch/researchandeconomics/Documents/

TheSixBusinessModelsofCopyrightInfringement.pdf (concluding that many infringing websites rely on 

advertising and prominently display the logos of major payment processors); Rory Cellan-Jones, 

, BBC News (July 2, 2012), http://www.bbc.co.uk/

news/technology-18670734. 

365 For example, Visa has implemented a policy whereby any transaction entered into the Visa system must 

be legal in both the Cardholder's jurisdiction and the Merchant Outlet's jurisdiction. Mastercard has 

implemented a program to endeavor to prevent signing merchants who have a history of illicit behavior. 

The program, called MATCH, helps assess risk prior to a member signing a merchant. http://www.

mastercard.com/ca/company/en/security_risk.html. In the areas of online gambling and online child 

pornography, mechanisms have been set up, through legislation and public-private partnerships, to ensure 

that users understand that the activity they are engaging in is unlawful, and are deprived of a convenient 

way to pay for their illicit activities. , The Unlawful Internet Gambling Enforcement Act, 31 U.S.C. 

§ 5363. 
INTERNET POLICY TASK FORCE

Administration,

366 the payment processors have created a mechanism easing the way 

for right holders to bring infringement complaints. They will state on their websites 

that their services will not be provided to companies that sell infringing products, and 

they will conduct an investigation and determine what action is appropriate when sent 

a request via email.367 

A public/private initiative on this issue has led to meaningful results in the UK. The 

International Federation of the Phonographic Industry (IFPI) has partnered with 

MasterCard, Visa, PayPal, a leading prepaid card service, the UK phone payment service 

regulator, and the City of London Police in a program designed to curb online music 

piracy.368 As of December 2011, 24 music services had lost their payment processing 

and an additional 38 websites were under investigation.369

Many websites that sell or provide access to pirated content profit from advertisers 

paying for banner ads. They also may appear legitimate to consumers because the 

advertisements are from reputable businesses.370 Denying infringing websites access to 

lucrative advertising has the potential to starve them of funds and substantially curtail 

 

366 2011 U.S. Intellectual Property Enforcement Coordinator Annual Report on Intellectual Property at 33 

(Mar. 2012), http://www.whitehouse.gov/sites/default/files/omb/IPEC/ipec_annual_report_

mar2012.pdf. Payment processors had begun work in a similar vein in 2009 to address the problem of 

sales of counterfeit goods online. INTA, ,

http://www.inta.org/Advocacy/Documents/INTA%20Best%20Practices%20for%20Addressing%20the%20

Sale%20of%20Counterfeits%20on%20the%20Internet.pdf.

367 Visa Corporate, , http://corporate.visa.com/aboutvisa/security-and-trust/intellectual-property-rights.shtml?ep=v_sym_ReportBrandAbuse; MasterCard AntiPiracy Policy, http://www.mastercard.com/us/wce/PDF/MasterCard_Anti-Piracy_Policy.pdf. 

368 In the UK, payment processors face potential liability under the Proceeds of Crime Act if they have been 

notified of a website’s illegal activity and continue to provide payment processing services. 

PhonepayPlus, , http://www.

phonepayplus.org.uk/For-Business/Code-and-Help/Code-Compliance-Updates/Provision-of-illegal-musicdownloads-using-premium-rate-service-billing.aspx IFPI, 

(July 21 2011), http://www.ifpi.com//content/section_news/

20110721.html. Best practices have also been developed to help identify infringing websites prior to 

notification from right holders. IFPI, 

(Mar. 2, 2011), http://www.ifpi.com//content/section_news/

20110302.html; IFPI, (Nov. 

2, 2011), http://www.ifpi.org/content/section_news/20111102.html; IFPI, 

(Dec. 14, 2011), http://www.ifpi.com/content/section_news

/20111214.html. 

369 IFPI, (Nov. 2, 2011), 

http://www.ifpi.org/content/section_news/20111102.html.

370 Another type of advertising that can confuse consumers into thinking websites dedicated to piracy are 

legitimate is “sponsored links”; links to websites that are displayed as a secondary result when a user 

searches keywords in a search engine. The links that are directly responsive to the user’s search are 

considered “organic.” The sponsored links are generally displayed to the user because the owner of the 

website has purchased one or more of the keywords used by the searcher so that its link will be displayed 

when that keyword is used. Sponsored links may lead to both legitimate websites and websites 

distributing primarily pirated material. Right holders have been responding to concerns about sponsored 

links to pirated material primarily through trademark law. , , 676 

F.3d 144 (4th Cir. 2012).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

infringement. 

Several private initiatives have been launched that should further this goal.371 In 2010, 

the Interactive Advertising Bureau (IAB) created the Networks & Exchanges Quality 

Assurance Guidelines to standardize the information that advertising networks and 

exchanges provide to potential advertisers.372 To be certified according to the 

Guidelines, networks and exchanges must inventory sites with content that is 

prohibited from sale, including infringing material.373 The certification program will 

help legitimate advertisers limit the placement of their online ads to legitimate 

websites.

These Guidelines were followed by a Statement of Best Practices to Address Online 

Piracy and Counterfeiting issued by the Association of National Advertisers (ANA) and 

the American Association of Advertising Agencies (4A’s) in May 2012, which was 

supported by the Administration.

374

 The Statement advises marketers to include 

language in their media placement contracts and insertion orders to prevent ads from 

appearing on sites dedicated to infringement. 

In July 2013, the Administration announced that a number of leading ad networks, 

with the support of the IAB and the Administration, had developed a set of voluntary 

best practices designed to cut off advertising revenue for websites dedicated to 

piracy.375 The signatories agree to be certified under the IAB’s Networks & Exchanges 

Quality Assurance Guidelines or otherwise maintain an independent vetting and 

auditing process and to accept and process notices from right holders alleging 

infringement by websites that participate in the ad network.376

 

371 A recent report by USC’s Annenberg Innovation Lab highlights the powerful incentives, including brand 

protection, that are motivating advertisers to examine their role in online infringement. Dawn C. 

Chmielewski, L.A. TIMES, Jan. 2, 2013, 

http://articles.latimes.com/2013/jan/02/entertainment/la-et-ct-piracy-ads-20130102. A follow-up 

reported that a number of prominent ad networks had “significantly reduced the number of infringing 

sites they are placing ads on.” (Feb. 14, 2013), 

http://www.annenberglab.com/sites/default/files/uploads/USCAnnenbergLab_AdReport_Feb2013.pdf; 

(Mar. 29, 2013), http://www.annenberglab.

com/sites/default/files/uploads/USCAnnenbergLab_AdReport_Mar2013.pdf; 

(May 8, 2013), http://www.annenberglab.com/sites/default/files/

uploads/USCAnnenbergLab_AdReport_Apr2013.pdf 

372 IAB, Comments in Response to the USPTO & NTIA NOI on Copyright Policy, Creativity, and Innovation in 

the Internet Economy, at 2 (Dec. 10, 2010); IAB, 

(June 24, 2010), http://www.iab.net/about_the_iab/recent_press_releases/press_

release_archive/press_release/pr-062410.

373 IAB Comments at 4.

374 ANA, to 

May 3, 2012), http://www.ana.net/content/show/id/23407; ANA, 

, http://www.ana.net/content/

show/id/23417; 2013 Joint Strategic Plan note 112 at 36.

375 Victoria Espinel, , WhiteHouse.gov,

http://www.whitehouse.gov/blog/2013/07/15/coming-together-combat-online-piracy-and-counterfeiting

(July 15, 2013).

376 Dave Jacobs, , AOL Blog, http://blog.aol.com/2013/07/15/ad-networksbest-practices (July 15, 2013).
INTERNET POLICY TASK FORCE

Steps have also been taken by individual entities. In June 2011, the largest worldwide 

digital advertising spender, GroupM, announced the creation of a list of 2,000 websites 

hosting illegal or pirated content, which it will not use for advertising for its clients.377

According to one report, the list of banned websites has allowed GroupM to stop an 

estimated $5 million of spending on those sites.378 Other efforts are underway to 

develop helpful tools to assist advertisers in avoiding transactions with websites

dedicated to piracy, such as a methodology for ranking websites based on 

infringement-related risk factors.379

Discussions also continue in the advertising industry about other approaches to the 

piracy problem, including improved access to information about infringing sites.

380

 

The Administration will continue to work to facilitate additional best practices that will 

help reduce the profitability of online infringement.381

Search engines can also play a role in stemming the proliferation of online 

infringement, by taking steps that make it less efficient to operate a profitable 

business. According to surveys, a significant amount of Internet traffic to websites is 

driven by the first page of search results,382 and the top results provided by large 

search engines often include many sites offering unauthorized copyrighted content.383 

Technologies are being designed that can avoid unintentional infringement by 

consumers who simply click on the top links in their search, without deliberately 

seeking illegal content. For example, Google now excludes certain queries related to 

 

377 GroupM, , June 8, 2011, 

http://www.groupm.com/pressandnews/details/652; Katy Bachman, 

, ADWEEK (June 9, 2011), http://www.adweek.com/news/

technology/can-groupm-really-take-bite-out-crime-132370. 

378 Katy Bachman, , ADWEEK (May 15, 2012), 

http://www.adweek.com/news/press/ad-biz-takes-aim-rogue-sites-140528.

379 whiteBULLET http://www.white-bullet.com/.

380 Bachman note 378.

381 Testimony of Victoria A. Espinel, IPEC, Office of Management and Budget, before the U.S. Senate 

Committee on the Judiciary 12 (May 9, 2012), http://www.judiciary.senate.gov/pdf/12-5-

9EspinelTestimony.pdf; 2013 Joint Strategic Plan note 112 at 36-37. 

382 Collin Cornwell, (2010), http://www.icrossing.

com/sites/default/files/page-one-visibility.pdf (finding that over 95% of site traffic arising from search 

engines derives from the first page of search results); Danny Goodwin, 

, Search Engine Watch, http://searchenginewatch.com/article/2049695/Top-Google-Result-Gets-36.4-

of-Clicks-Study (Apr. 21, 2011) (reporting results of studies finding that the top search results receive the 

most clicks). 

383 According to research done in England in 2010, 23% of consumers regularly download music illegally 

using a search engine as their means to find the content. Harris Interactive (Sept. 2010). Research in New 

Zealand highlights that 54% of users who illegally downloaded music said they found the unauthorized 

music through a standard search engine. Ipsos MediaCT (Oct. 2011). The International Federation of the 

Phonographic Industry (IFPI) found that searches for the top five artists in November 2011’s Billboard Top 

100 chart plus the term “mp3” (the dominant file format for digital music) resulted in the vast majority of 

results on the first page, on average more than 70%, constituting infringing sites. IFPI, 

, at 24, http://www.ifpi.org/content/library/DMR2012.pdf. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

copyright infringement from its Autocomplete function, which uses algorithms to 

suggest complete search terms as soon as a user starts typing.384 This policy has 

resulted in the exclusion of notorious infringing services like The Pirate Bay from 

Autocomplete results.385 Search engines can also promote and/or demote certain 

listings within their search results. Google, for example, has begun to incorporate the 

number of valid DMCA takedown notices directed at a website in its search algorithm, 

essentially demoting repeat bad actors to lower positions in the results.386 It remains 

to be seen whether this approach will be effective.

387

Another possibility is eliminating direct links from search results while still leaving 

information about the site visible, a process known as “delinking.” This can limit 

unintentional consumer infringement by requiring the affirmative step of entering an 

address manually, rather than by a simple click of the mouse. 

In the United Kingdom, a private sector group has proposed a voluntary code of 

practice for search engines that includes a number of these approaches, including the 

demotion of infringing sites in search engine rankings and boosting links to sites with 

legitimate content.388 The UK government has chaired these discussions between right 

holders, internet companies and other stakeholders.

389

One approach to curbing infringement that has gained ground internationally in recent 

years has been “graduated response.”

390

 This approach addresses infringing uses that 

cannot be reached through notice and takedown, as they do not involve content hosted 

by an ISP. It is designed to reach individual users of unauthorized P2P file-sharing and 

other decentralized services, in a less punitive, more scalable and educational way than 

bringing lawsuits. 

 

384 Google, , http://support.google.com/websearch/bin/answer.py?hl

=en&answer=106230 (explaining without elaboration that Google excludes “a narrow class of search 

queries related to pornography, violence, hate speech, and copyright infringement”).

385 Dara Kerr, , CNET, http://news.cnet.com/8301-

1023_3-57510052-93/google-wipes-pirate-bay-from-autocomplete-searches (Sept. 10, 2012); Jennifer 

Martinez, , Politico, http://www.politico.com/news/stories/0111/

48292.html (Jan. 27, 2011).

386 Google Inside Search, , http://insidesearch.blogspot.com/2012

/08/an-update-to-our-search-algorithms.html (Aug. 10, 2012).

387 One recent study by the recording industry has been skeptical. RIAA, 

, http://riaa.com/blog.php?content_selector=riaa-news-blog&content_

selector=riaa-news-blog&blog_selector=Googles-Move-&news_month_filter=2&news_year_filter=2013 (Feb. 

21, 2013).

388 Josh Halliday, , THE GUARDIAN, 

Jan. 26, 2012, http://www.guardian.co.uk/technology/2012/jan/26/google-bing-illegal-music. 

389

390 Early versions of this approach were sometimes referred to as a “three-strikes” system, based on the 

fact that they would impose a penalty of termination of a user’s account after three warnings. As the 

approach has evolved, this terminology has become inapt, as different versions require different numbers 

of warnings and the penalties involved are generally less draconian. , Peter K. Yu, 

, 62 FLA. L. REV. 1373, 1379-80 (2010).
INTERNET POLICY TASK FORCE

While graduated response systems vary, they share the following common attributes: 

Right holders participate in public peer-to-peer networks to find Internet Protocol (IP) 

addresses that are being used to share their works without authorization. They then 

provide the addresses and information regarding the date and time of the 

infringement to the appropriate ISP. The ISP notifies the subscriber responsible for the 

account associated with that IP address that the account has been identified as

engaging in infringing conduct. These initial notifications generally convey 

educational messages that provide the subscriber with information about how to 

secure her account and where to find legitimate services. If the same account is 

identified again, the warnings are escalated (or “graduated”). After a certain number of 

warnings, if the subscriber persists in ignoring them, there will normally be 

consequences of some sort to deter further infringement. 

In the United States, the existing DMCA obligation to terminate accounts of repeat 

infringers391 has been supplemented by a voluntary Copyright Alert System spelling out 

a process for handling repeat infringement short of termination.392 In July 2011 a 

group of content owner representatives and major Internet service providers entered 

into an agreement aimed at addressing infringement taking place over P2P file-sharing 

networks.

393

 The agreement created a common framework and best practices for 

alerting and educating subscribers about copyright infringement and taking measures 

to deter those who ignore repeated alerts.394 The Copyright Alert System is being 

implemented by the Center for Copyright Information (CCI), and began operating in 

February 2013.

395 The Administration has encouraged this type of private agreement 

and supported this initiative.396 

Some U.S. universities have also adopted an internal graduated response program to 

comply with the U.S. Higher Education Opportunity Act (HEOA) of 2008, which requires 

them as a condition of federal funding to develop copyright enforcement plans that 

 

391 17 U.S.C. § 512(i)(1)(A). above at 59-61.

392 There is some evidence that service providers are voluntarily becoming more active in identifying and 

removing infringing content because it is in their interest to do so. , Annemarie Bridy, 

, 89 OR. L. REV. 81 (2010); 

Jeremy F. DeBeer & Christopher D. Clemmer, 

, 49 JURIMETRICS (Oct. 2009).

393 RIAA, (July 7, 2011), 

http://www.riaa.com/newsitem.php?content_selector=newsandviews&news_month_filter=

7&news_year_filter=2011&id=2DDC3887-A4D5-8D41-649D-6E4F7C5225A5.

394 CCI, Memorandum of Understanding, Copyright Alert System, at § 4 (July 6, 2011), 

http://www.copyrightinformation.org/wp-content/uploads/2013/02/Memorandum-of-Understanding.pdf; 

CCI, , http://www.copyrightinformation.org/resources-faq/copyrightalert-system-faqs. The Copyright Alert System has three components—notice to the ISP, a series of 

escalating alerts to the subscriber, and the imposition of a range of possible mitigation measures within 

the discretion of the ISPs.

395 CCI, , http://www.copyrightinformation.org/uncategorized/

copyright-alert-system-set-to-begin/. The CCI’s mission also includes educating the public about the laws 

governing the online distribution of copyrighted works and collecting and disseminating data regarding 

online infringement and the lawful means available to obtain copyrighted works. MOU, note 394, § 1

& Attachments A, B and D.

396 Victoria Espinel, , WhiteHouse.gov, http://www.whitehouse.gov/

blog/2011/07/07/working-together-stop-internet-piracy (July 7, 2011).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

include technology-based deterrents to infringement.397 This can be a valuable

educational tool to encourage college students to engage in legal consumption of 

copyright works online, and best practices have been developed to assist institutions 

in implementing their plans.398

Several governments, including those of France,399 the United Kingdom,400 New 

Zealand,401 Taiwan,402 and South Korea,403 have incorporated some form of graduated 

response into their domestic laws.The process and elements vary from country to 

country, and the ultimate sanctions can include temporary suspension of the account, 

capping of bandwidth, monetary fines, or disclosure of information sufficient to allow 

the filing of a lawsuit.

404

 A private graduated response program has also been adopted 

in Ireland, based on settlement of a lawsuit between Ireland’s largest ISP and the Irish 

Recorded Music Association.405

 

397 The HEOA conditions participation in federal financial aid programs on certification that the 

participating institution has developed plans to effectively combat the unauthorized distribution of 

copyrighted material, including through the use of a variety of technology-based deterrents. 20 

U.S.C. § 1094(a)(29)(A). 

398 , Educause, , http://www.educause.edu/focus-areas-and-initiatives/policy-andsecurity/educause-policy/issues-and-positions/intellectual-property/heoa-role-models. Schools appear to 

be employing these educational and deterrent systems. TorrentFreak, 

, http://torrentfreak.com/university-of-illinois-disconnectspirating-students-staffer-asked-to-leave-130129 (Jan. 29, 2013). 

399 France’s graduated response system, overseen by the High Authority for the Distribution of Works and 

the Protection of Rights on the Internet (HADOPI), was the first. Loi n° 2009-1311 du 28 octobre 2009 

[Law No 2009-1311 of 28 October 2009] (France) JO, 29 October 2009, 18290 art 7, amending Code de la 

Propriete Intellectuelle [Code of Intellectual Property] (France) art L335-7. HADOPI processes complaints 

of copyright infringement, sends warnings to accused infringers, and after the third warning may refer the 

case to a court for judicial review. The ultimate sanctions to be applied by the court originally included 

temporary suspension of the specific account used to infringe, but in July 2013 that sanction was 

eliminated, leaving in place the possibility of fines Rhonda Richford, 

, HOLLYWOOD REP., July 9, 2013, http://www.

hollywoodreporter.com/news/france-drops-key-part-controversial-582266.

400 Digital Economy Act 2010 (UK) c 24.

401 Copyright (Infringing File Sharing) Amendment Act 2011 (NZ).

402 Copyright Act of Taiwan, art. 90quinquies.

403 Korean Copyright Act art. 133bis, 133ter. 

404 In New Zealand, sanctions may include monetary damages up to $10,000 or eventually account 

termination. Copyright (Infringing File Sharing) Amendment Act 2011 at 122O, 122R (NZ); James 

& Wells, ,

http://www.jaws.co.nz/media-centre/2011/4/14/controversial-copyright-(infringing-file-sharing)-

amendment-bill-passed-into-law.aspx (Apr. 14, 2011). In the U.K., the most recent proposed code would 

allow a right holder to seek a court order to learn information about the subscriber sufficient to pursue a 

direct infringement suit following the third notification to a subscriber in one year. Ofcom, 

(June 26, 2012), http://stakeholders.ofcom.org.

uk/binaries/consultations/online-notice/summary/notice.pdf. And in South Korea, ISPs can be ordered to 

suspend accounts. Korean Copyright Act arts. 133bis, 133ter.

405 As with the Copyright Alert System launching in the United States, the Irish graduated response system 

is overseen by private parties. Under this system, a subscriber’s account can be suspended for 7 days 

after a third notice and for up to a year if infringement continues. Eircom, 

, http://pressroom.eircom.net/press_releases/article/eircom_Statement_on_Illegal_File_Sharing/. 
INTERNET POLICY TASK FORCE

Graduated response systems may be preferable to existing legal remedies in a number 

of respects. They provide useful information and offer an opportunity for infringers 

to reform without suffering any consequences, and they safeguard the subscriber’s 

identity from the copyright owner’s scrutiny. If they work well, they should serve as 

educational campaigns, deterring infringement and avoiding the need to apply 

penalties. They are not, however, without their critics. Chief among the concerns 

expressed are ensuring adequate due process, the potential for overbroad coverage, 

and the proportionality of the sanctions.406 The Task Force believes that all of these 

concerns should be appropriately accommodated in any graduated response system.407 

If this is done, when combined with other approaches aimed at illegal sites and 

services, graduated response can make a meaningful contribution to moving 

consumers to legal options. We note that there are already initial indications of a 

positive impact in countries that have implemented this approach.

408

The Task Force is encouraged by the progress that has been made through the 

cooperative efforts of right holders, ISPs, payment processors, ad networks and search 

engines to develop the voluntary initiatives discussed in this section. We encourage 

interested stakeholders to continue identifying and developing voluntary solutions 

that benefit all parties and that are consistent with the principles of privacy, free 

speech, competition, and due process. The Task Force will provide assistance to the 

IPEC as needed to help foster further developments in this area. Moreover, as 

requested in the IPEC 2013 Joint Strategic Plan, the USPTO will institute studies, based 

on public input and with the assistance of other relevant agencies, examining the 

effectiveness of voluntary initiatives in curtailing online infringement.409 

One important component of efforts to curb online infringement is increased public 

 

406 , Annemarie Bridy, 

, 23 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 1 (2012).

407 Victoria Espinel, , WhiteHouse.gov, http://www.whitehouse.

gov/blog/2011/07/07/working-together-stop-internet-piracy (July 7, 2011). The Copyright Alert System in 

the United States, for example, provides opportunities for appeal and arbitration, addresses only 

residential accounts (and not, for example, Internet cafes), and permits a range of moderate responses 

within the discretion of each individual ISP. CCI, , http://www.copyright

information.org/the-copyright-alert-system/what-is-a-copyright-alert.

408 Rhonda Richford, , BILLBOARD, Feb. 28, 2013, 

http://www.billboard.com/biz/articles/news/branding/1550425/france-examines-eventougher-anti-piracy-laws; Hadopi, (March 2012), http://

hadopi.fr/sites/default/files/page/pdf/note17EN.pdf; Brett Danaher, Michael D. Smith, Rahul Telang, & 

Siwen Chen, 

(Jan. 21, 2012), http://papers.ssrn.com/sol3/papers. cfm?abstract_id=

1989240; Mark Tighe, , THE SUNDAY TIMES (London), Mar. 6, 2012, 

http://www.thesundaytimes.co.uk/sto/news/ireland/article988221.ece; 

, BBC NEWS, July 23, 2012, http://www.bbc.co.uk/news/

technology-18953353. 

409 U.S. Patent and Trademark Office, 

78 Fed. Reg. 37210 (June 20, 2013); U.S. Patent and 

Trademark Office, 

78 Fed. Reg. 42758 (July 17, 2013).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

education and outreach, both domestically and internationally. Such educational 

efforts should be balanced to include information about both rights and exceptions. 

Many right holder organizations, user groups and other stakeholders have developed 

educational materials for parents and teachers regarding the value of copyright and to 

help educate young people about how to legally access content online and use 

copyrighted materials.

410 Right holders have engaged in public awareness campaigns, 

with public service announcements about the impact of copyright infringement.411 

Nonprofit and educational organizations too are increasingly focusing on copyright 

education, including the benefits of fair use, working with a variety of audiences.412

The U.S. Government has also been active in providing public education in the digital 

space, including on copyright issues. In addition to HEOA (discussed above at 72-73)

this includes a number of initiatives by the U.S. Copyright Office and the USPTO's 

Global Intellectual Property Academy (GIPA).

413 And enforcement actions themselves

can serve to raise public awareness of the line between legal and illegal Internet uses, 

and the risks associated with infringing sites. 

Finally, another promising tool for raising awareness is the identification for 

consumers of websites that offer legal content, extrapolating from existing 

certification programs that verify the legitimacy of media manufacturing plants.414 One 

example of such a program is the UK-based Music Matters, which provides a 

“trustmark” to inform consumers that the marked websites are licensed.415 Similar 

programs exist in France and Japan.416 This information can help consumers identify 

 

410 , RIAA, , http://www.riaa.com/toolsforparents.php?content_selector=

resources-programs-for-educators; Campus Downloading http://www.campusdownloading.com/index.

htm; Childnet Int’l, , http://www.childnet.com/ufiles/

downloads_uk_edition.pdf; Copyright Alliance Education Foundation, https://copyrightalliance.org/

education_foundation; Copyright Society of the U.S.A., , http://copyrightkids.org; Electronic 

Frontier Foundation, , http://www.teachingcopyright.org; Copyright Clearance Center, 

, http://www.copyright.com/content/cc3/en/toolbar/education.html; Association of Research 

Libraries, , http://www.knowyourcopyrights.org. 

411 , MPAA, Public Awareness Campaigns, http://www.mpaa.org/contentprotection/public-serviceannouncements.

412

, Stanford University Libraries, , http://fairuse.stanford.edu; Cornell 

University Copyright Information Center, http://copyright.cornell.edu/training; Harvard University 

Berkman Center for Internet and Society & Electronic Information for Libraries, , 

http://cyber.law.harvard.edu/copyrightforlibrarians/Main_Page; Massachusetts Institute of Technology 

OpenCourseWare, , http://ocw.mit.edu/courses/electrical-engineering-andcomputer-science/6-912-introduction-to-copyright-law-january-iap-2006/index.htm; University of Texas 

Libraries, , http://copyright.lib.utexas.edu.

413

, USPTO Global Intellectual Property Academy, http://www.uspto.gov/ip/training/index.jsp; U.S. 

Copyright Office, , http://www.loc.gov/teachers/copyrightmystery/#.

414 The Content Delivery and Security Association (CDSA), for example, established the first Anti-Piracy 

Certification and Compliance Program for the manufacture of optical media (CDs, DVDs, and CD-ROMS), 

analog media (tape and vinyl), and virtually every recording media format. CDSA, 

, http://www.cdsaonline.org/copyright-and-licensing-verification-program. 

415 Music Matters, http://www.whymusicmatters.org. IFPI maintains a central website that allows 

consumers around the world to locate licensed, legal music services in their countries. Pro Music,

http://www.pro-music.org/legal-music-services.php.

416 Hadopi Pur, www.pur.fr; RIAJ, http://www.riaj.or.jp/lmark/index.html.
INTERNET POLICY TASK FORCE

the wide variety of legal services available online. It can also be used by advertisers to 

make placement decisions or by search engines to raise a website's status in search 

results.



Government actions like , and private 

enforcement through litigation and DMCA remedies provide effective avenues to 

combat many types of infringement. 



 While 

online infringement will never be eliminated entirely, the goal is to curb it 

sufficiently to support robust legitimate markets for copyrighted content. 



It will be necessary to rely on a combination of legal 

tools, technology, private sector cooperation, and public outreach and 

education, along with the continued development of appealing legal offerings. 



o The Task Force urges Congress to enact legislation adopting the same 

range of penalties for criminal streaming of copyrighted works as now 

exists for criminal reproduction and distribution;

o The Task Force will solicit public comment and convene roundtables 

regarding the application of statutory damages in the context of 

individual file-sharers and secondary liability for large-scale online 

infringement;

o The Task Force will establish a multi-stakeholder dialogue on how to

improve the operation of the DMCA’s notice and takedown system;

o The Task Force supports the Copyright Office’s improvement of the 

DMCA database of designated agents and its examination of possible

small claims procedures to assist individual creators and SMEs in 

enforcing their rights online; and

o The Task Force supports and encourages the development of voluntary 

private sector initiatives to improve online enforcement, and will monitor 

and evaluate the effectiveness of such initiatives to determine whether 

additional action should be considered.

o The Task Force encourages enhancing public education and outreach 

efforts to inform consumers about both rights and exceptions and to 

encourage the use of legitimate online services.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

The Internet has enabled the development of a vastly improved copyright marketplace, 

both by making more works available to more people in new and diverse ways, and by 

streamlining the process of licensing. These two aspects are intertwined: improving 

the efficiency of licensing should lead to increased availability of content through a 

wider range of services, and the more robust the online market becomes, the more 

incentive there will be to further improve licensing mechanisms. This Section will 

examine the Internet’s growing use as a distribution platform and some of the issues 

that have been identified as hindering its full potential. It will then describe the 

evolution of online licensing mechanisms, and conclude by suggesting ways in which 

the government may facilitate the further development of this marketplace. 

Great strides have already been made toward fulfilling the Internet’s promise, with 

legitimate services delivering a wide variety of works in a wide variety of formats. Yet 

there is still more to do. Consumers increasingly expect to have access online to the 

full range of content available in physical media, anywhere in the world. Today, some 

creative sectors have made more progress than others in fulfilling that expectation. 

Moreover, the link between market development and piracy cannot be overlooked. 

Despite the increasing number of legitimate online services, such services continue to 

be hobbled by unfair competition from unlicensed ones. Many legitimate services are 

not yet profitable; others may have the potential for much greater growth. As 

discussed above, effective enforcement can create a more level playing field, enabling 

new business models to attract investment and thrive. 

The converse is also true: the availability of licensed offerings is an important element 

in combatting online infringement. Providing consumers with attractive legal avenues 

to enjoy copyrighted content in the manner of their choosing decreases the lure of 

illegitimate services. Some promising indications of this effect are already being seen. 

For example, a 2011 survey in the United States found that “[o]f the 30% of Americans 

who have ‘pirated’ digital music files, 46% indicated that they now do so less because 

of the emergence of low-cost legal streaming services . . . . The comparable figure for 

video . . . is 40%.”417 And 40% of a survey group who had downloaded music via P2P 

 

417 The American Assembly, at 4 (Nov. 2011), 

http://piracy.americanassembly.org/wp-content/uploads/2011/11/AA-Research-Note-Infringementand-Enforcement-November-2011.pdf. Reports on Internet usage in Sweden, where the popular legal filestreaming service Spotify originated, have shown a “long-term trend [of] a sharp increase in legal 

streaming, while we see a reduction in illegal file sharing and downloading.” IFPI, 2010 Digital Music 

Report at 15, http://www.ifpi.org/content/library/dmr2010.pdf. Other business models also 

appear to have reduced piracy. For example, in 2007, the largest Danish telecom launched a free "all you 

can eat" music download and streaming service. A survey of users showed that they were engaging in far 

less illegal music downloading. Analysis of network usage also suggests that legitimate services may help 

curb infringement; in the United States, as Netflix and YouTube have increased their relative share of 

network traffic, BitTorrent’s (and filesharing in general) share of network traffic has decreased steadily. 

Sandvine Intelligent Broadband Networks, 7, 32 (2012), 

http://www.sandvine.com/downloads/documents/Phenomena_2H_2012/Sandvine_Global_Internet_

Phenomena_Report_2H_2012.pdf. Owen Thomas, 

, BUS. INSIDER, Nov. 7, 2012, http://www.businessinsider.com/netflix-bittorrent-sandvinereport-2012-11.
INTERNET POLICY TASK FORCE

file-sharing networks in 2011 reported having stopped or downloaded less music in 

2012; the biggest reason for the change was “the increase in free and legal music 

streaming services.”418 

U.S. creative industries are at the forefront in licensing new business models providing 

consumers with online access to copyrighted works. The following gives a snapshot of 

where these efforts stand today, in this country and around the world. 

After the initial rapid take-off of P2P file-sharing (at a time when few lawful online 

services existed), the music sector was the first to launch online services. Beginning 

with the success of iTunes, the number of licensed digital music services grew globally 

from less than 60 in 2004 to more than 500 in 2011.419 These services offer consumers 

a wide array of experiences, including à la carte downloads, monthly subscription 

services, free ad-supported streaming, music bundled with a mobile phone, cloud 

storage, digital radio services, and online simulcasts.420 Most of these services are 

available on computers, smartphones, and other consumer electronic devices. 

The film and television industry has been slower to launch online, but is quickly 

making headway.421 The Motion Picture Association of America (MPAA) lists on its 

website over 50 sites where consumers can legitimately access movies and TV shows 

online in the United States.

422

 The largest services are already well-established, 

 

418 Lance Whitney, , CNET, 

http://news.cnet.com/8301-1023_3-57571318-93/illegal-music-downloads-dropped-in-2012-says-report

(Feb. 26, 2013). The presence of spyware and viruses on P2P file-sharing networks was also cited as a 

factor. 

419 IFPI, at 13 http://www.ifpi.org/content/library/

dmr2011.pdf; Pro Music, http://pro-music.org/legal-music-services.php. 

420 RIAA, 

(June 2012), http://www.riaa.com/newsitem.php?content_selector=

newsandviews&news_month_filter=6&news_year_filter=2012&id=61653611-420D-A290-7F6A5BA99CF94721.

421 The later launch has been ascribed to a number of factors, including broadband capacity constraints 

and different patterns of consumer consumption. , Miguel Helft, 

, NY TIMES. Jan. 16, 2007, http://www.nytimes.com/2007/01/16/technology/16netflix.

html?_r=0; European Commission, 

, COM (2012) 203 final (May 2012), http://eur-lex.europa.eu/LexUriServ/

LexUriServ.do?uri=COM:2012:0203:FIN:EN:PDF. A further explanation may be the historical reliance on 

“windowing,” whereby films are released at different times through different media, which results in most 

films being available online later than they appear in theatres. In part to avoid these delays contributing 

to piracy, some studios have recently experimented with alternative release strategies that include making 

works available online or through cable on-demand at the same time, or even before, they are released in 

theatres. , Adam B. Vary, 

, ENTERTAINMENT WEEKLY, Aug. 24, 2012, http://

insidemovies.ew.com/2012/08/24/bachelorette-video-on-demand-indie-cinema; Mark Hachman, 

, PC MAG, Oct. 14, 2011, 

http://www.pcmag.com/article2/0,2817,2394739,00.asp; Ben Child, 

, THE GUARDIAN, May 11, 2012, http://www.guardian.co.uk/film/

2012/may/11/release-date-piracy-time-warner. 

422 MPAA, Get Movies & TV Shows, http://mpaa.org/contentprotection/get-movies-tv-shows; 

Where to Watch, http://www.wheretowatch.org/. Similar lists are available in a number of other countries 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

expanding their programming lineups, and serving consumers in the United States and 

abroad.

423

 More broadcast content is expected to be available online in the near future 

as copyright owners conclude negotiations with online video distributors.424

The online publishing market is also rapidly growing. The number of licensed services 

in the United States has increased dramatically in the past few years. According to a 

recent analysis, in mid-2011 over 1.5 million e-books were available online from 

legitimate sources,

425 including substantial catalogs of e-textbooks.426

 And libraries 

provided an alternate route; the American Library Association reports that in 2011 66% 

of public libraries offered free access to e-books, an increase of almost 30 percentage 

points over the previous two years.427 The market for scientific, technical, and medical 

(STM) journals has changed fundamentally since publishers began creating online 

distribution platforms starting in the mid-1990s. Virtually all STM journals are now 

available online, and in many cases publishers and others have retrospectively 

digitized hard copy material back to their first volumes.428

The advent of cloud computing is transforming the business and entertainment 

software markets. Software delivery is shifting from a traditional licensing model 

where applications are installed on-premise to a per-user cloud-based software-as-aservice (SaaS) model.429

 According to some forecasts, by 2015, service-enabled software 

will account for approximately 24% of all new business software purchases, and 13.1% 

of worldwide software spending will be for SaaS delivery.430 And whereas 

 

as well. , MPAA – Canada, , http://www.mpa-canada.org/?q=content/legalcontent-sites; Find Any Film, http://www.findanyfilm.com.

423 Netflix reports that it is available in 40 countries, http://ir.netflix.com/; Amazon’s Lovefilm operates 

streaming video on demand in the UK, Germany, Sweden, Denmark, and Norway, http://corporate.blog.

lovefilm.com/; and YouTube is available in over 50 countries, http://www.youtube.com/yt/press/

statistics.html. The Copyright Office recently found that individual broadcast programs are now widely 

available through streaming video services, a-la-carte downloads, and websites maintained by the major 

broadcast networks and sports rights owners. Copyright Office, 

at 121-27 (Aug. 29, 2011), http://www.copyright.gov/reports/

section302-report.pdf. 

424

, Brian Stelter, , NY TIMES, Feb. 11, 2013, 

http://mediadecoder.blogs.nytimes.com/2013/02/11/amazon-and-cbs-announce-deal-onrights-to-under-the-dome; 

, HUFFINGTON POST, http://www.huffingtonpost.com/2013/01/25/all-my-children-hulu-itunes-one-lifeto-live_n_2552320.html (Jan. 25, 2013).

425 RUEDIGER WISCHENBART, THE GLOBAL EBOOK MARKET: CURRENT CONDITIONS & FUTURE PROJECTIONS 8 (rev. Feb. 

2013) (“Global eBook Market”).

426 CourseSmart, , http://www.coursesmart.com/overview.

427 Office of Information Technology Policy E-Book Task Force, 

(June 2011), http://www.

ala.org/offices/sites/ala.org.offices/files/content/oitp/e-book_faq.pdf.

428 Mark Ware & Michael Mabe, 

3 (3d ed., Nov. 2012), http://www.stm-assoc.org./2012_12_11_STM_Report_2012.pdf 

429 Brandon Butler, , Network World, 

http://www.networkworld.com/news/2012/071312-gartner-cloud-260882.html (July 13, 2012). 

430 Amy Konary, , IDC Vendor Spotlight (Jan. 2012), 

www.safenet-inc.com/WorkArea/DownloadAsset.aspx?id=8589945627; Louis 

Columbus, , 
INTERNET POLICY TASK FORCE

entertainment software products ten years ago consisted almost entirely of console or 

PC games sold on disc, today game publishers have leveraged cloud capabilities to 

enable a range of new online business models and service offerings.431

This explosion of online services has added up to a substantial new revenue source for 

the creative industries. In 2004, the worldwide recording industry earned $420 million 

from digital services; in 2012 it earned $5.6 billion.432 Online distribution of movies, 

which generated worldwide revenues of $1.2 billion in 2006, is projected to reach $7.6 

billion by 2015.433 In late 2012, e-books represented 20% of the overall market for 

trade sales, with net e-book sales in that sector increasing significantly from 12.6% in

2011.434 Annual revenues generated from English-language STM journal publishing are 

estimated at about $9.4 billion in 2011 (up from $8 billion in 2008), with the digital 

share representing about 60%.435 For the entertainment software industry, purchases 

of digital content accounted for 31 percent of game sales in 2011, generating $7.3

billion in revenue in North America alone.

436

 

It must be recognized, however, that these positive results represent only part of the 

picture; the question is whether all combined sources of revenue provide sufficient 

incentives for the production of creative works, despite the decline in physical sales in 

many sectors.

437

 A healthy transition to the online marketplace will be complete when 

overall sales, regardless of business model, can support thriving creative industries.

Despite the growth of licensed online services, a number of impediments have slowed 

 

FORBES, Feb. 1, 2013, http://www.forbes.com/sites/louiscolumbus/2013/02/01/roundup-ofcloud-computing-enterprise-software-market-estimates-and-forecasts-2013/. 

431 Entertainment Software Association Submission to IPEC 6-7 (Aug. 10, 2012). 

432 IFPI Digital Music Report 2011, 419 at 13; IFPI, at 6 

www.ifpi.org/content/library/dmr2013.pdf. In the United States alone, those numbers are $190 million 

in 2004 and over $4 billion in 2011. RIAA, 

(June 2012), http://www.riaa.com/

newsitem.php?content_selector=newsandviews&news_month_filter=6&news_year_filter=2012&id=

61653611-420D-A290-7F6A-5BA99CF94721; RIAA, 

(“RIAA 2012 Year-End Shipment Statistics”) http://76.74.24.142/4A176523-8B2CDA09-EA23-B811189D3A21.pdf

433 Paul Bond, 

, HOLLYWOOD REP., June 14, 2011, http://www.hollywoodreporter.com/news/filmindustry-led-by-electronic-200881. 

434 Global eBook Market, note 425 at 8-9.

435 STM Report, note 428 at 99. 

436 Entertainment Software Association, http://www.

theesa.com/games-improving-what-matters/economy.asp.

437 Even for those creative sectors where digital sales outpace physical sales today, total revenues may be 

significantly lower than they were in the pre-Internet environment. Eric Pfanner, 

, NY TIMES, Feb. 26, 2013, http://www.nytimes.com/

2013/02/27/technology/music-industry-records-first-revenue-increase-since-1999.html?_r=0 (reporting 

worldwide music revenue increasing in 2012 for the first time since 1999 to $16.5 billion, still far less 

than the highest historical revenue figures of $38 billion).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

their development. These relate primarily to whether the statutory licenses and 

collective licensing mechanisms for music still function properly in the digital age; how 

pre-digital contract terms should be interpreted; and how to ensure the ability to

license smoothly across sectors and borders. 

As noted above, the music industry has been at the forefront of new online 

distribution models. Before launching, however, digital music services must navigate 

an often-confusing licensing landscape, featuring a combination of statutory licenses 

and direct negotiations with right holders. Music licensing is particularly complex due 

to the existence of two categories of works – sound recordings and musical 

compositions – which must be separately licensed, the fact that the different rights in 

musical compositions are administered by different entities, and long-standing 

limitations on the ability to license multiple musical compositions in a single

transaction. 

While there is a statutory license in U.S. law that permits the reproduction and 

distribution of musical compositions (known as a “mechanical license”),438 there is no 

statutory license for their public performance. Moreover, the different rights are 

administered by different entities in the U.S., sometimes by the right holders directly 

and sometimes through a collecting society.439 This structure raises a number of 

issues. 

First, the statutory license for the mechanical right is work-specific. Unlike many other 

countries, there is no blanket mechanical license for musical compositions, which 

would allow an entire repertoire to be licensed in a single transaction. Services that 

wish to use the Section 115 mechanical license must notify every right holder of their 

intention to rely on the license.440 Moreover, although a virtually complete set of public 

performance licenses for musical compositions can be obtained through licenses with 

the three PROs,441 antitrust law constrains the PROs from licensing the mechanical 

 

438 17 U.S.C. § 115. As with the Section 114 statutory license, the rates for the mechanical license are set 

through proceedings before the Copyright Royalty Board.

439 Collective management organizations known as Performing Rights Organizations (PROs) exercise the 

public performance right on behalf of the publisher. The publisher directly administers the mechanical 

right (i.e., reproduction and distribution rights). The Harry Fox Agency (HFA) serves as a centralized 

administrator for the mechanical right for a number of publishers, but many publishers’ works are not 

available through HFA.

440 17 U.S.C. § 115(b). There are likely thousands of different right holders with whom to negotiate. 

David Touve, , MUSIC BUS. J., Dec. 2012, 

http://www.thembj.org/2012/12/music-startups-and-the-licensing-drag (“Estimates of the number of 

points of contact for direct licensing or ‘noticing’ musical work copyrights vary substantially: from as few 

as 500 points, to as many as 6,000, to in excess of 30,000 potential points of contact.”). Of course, 

services may choose to negotiate directly with individual right holders, but that still requires contacting 

every right holder. 

441 The recent decisions by some major publishers to withdraw their rights from the PROs for streaming 

presents a potential complication moving forward. Ed Christman, 
INTERNET POLICY TASK FORCE

rights for works in their repertoire.442

In addition, new digital services are blurring the traditional lines between the different 

exclusive copyright rights. Many services engage in combined acts of reproduction, 

distribution, and public performance, and their users often enjoy hybrid formats for 

accessing music. As a result, the different administrators of different rights can all 

demand payment for a single use of a single right holder’s work. As the Register of 

Copyrights explained in 2005:

[I]n many situations today it is difficult to determine which rights are 

implicated and therefore whom a licensee must pay in order to secure 

the necessary rights. Faced with demands for payment from multiple 

representatives of the same copyright owner, each purporting to license a 

different right that is alleged to be involved in the same transmission, 

licensees end up paying twice for the right to make a digital transmission 

of a single work. . . . But whether or not two or more separate rights are 

truly implicated and deserving of compensation, it seems inefficient to 

require a licensee to seek out two separate licenses from two separate 

sources in order to compensate the same copyright owners for the right 

to engage in a single transmission of a single work.443

This potential duplication has since been addressed to some extent. Courts have held 

that some digital distributions, including transmission of downloads and ringtones, do 

not implicate the public performance right, and therefore only the mechanical right 

must be secured.

444

 But as digital uses continue to evolve, there will be continued 

questions over which rights are implicated by new services and how to deal with 

overlaps given the different licensing agencies for each right. 

Stakeholders are attempting to resolve some of these issues through private 

negotiation. For example, in April 2012, organizations representing music publishers, 

major record labels and digital music services reached an agreement setting 

mechanical royalty rates for a variety of cutting-edge music services, such as paid 

locker services and music bundles.445 The music publishers, record companies, and 

digital music services also agreed that non-interactive streaming does not implicate the 

 

, BILLBOARD, Feb. 1, 2013, http://www.billboard.com/biz/articles/

news/publishing/1537554/universal-music-publishing-plots-exit-from-ascap-bmi.

442

, , Civ Action No. 41-1395, 

Second Amended Final Judgment at IV(A) (S.D.N.Y. June 11, 2001).

443 Statement of Marybeth Peters, the Register of Copyrights, before the Subcommittee on Courts, the 

Internet, and Intellectual Property, Committee on the Judiciary (June 21, 2005), 

http://www.copyright.gov/docs/regstat062105.html. 

444 , 485 F. Supp. 2d 438, 443-44 (S.D.N.Y. 2007) 

(transmitting digital downloads does not require public performance license); , 663 F. 

Supp. 2d 363, 374 (S.D.N.Y. 2009) (transmitting ringtones does not require public performance license).

445 David Oxenford, 

, Broadcast Law Blog, http://www.broadcastlawblog.com/2012/04/articles/musicrights/music-royalty-settlement-announced-on-mechanical-royalties-not-a-decision-on-webcasting-rates/

(Apr. 11, 2012). 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

mechanical right, only the public performance right.446 Although the threat of “double 

dipping” for other services was avoided by including a formula whereby any payments 

to the PROs for the public performance license can be subtracted from the royalties 

due for the mechanical license, a user would still need to make more than one stop to 

clear the necessary public performance and mechanical rights for a single use of a 

single composition.447 

The licensing of sound recordings is generally less complex. In the case of certain noninteractive digital transmissions, there is a statutory license for the public performance 

of sound recordings.448 Licenses for interactive transmissions and other uses like 

permanent downloads and ringtones must be individually negotiated.449 Although

these negotiations can be time-consuming, only a discrete number of licensors need to 

be approached – currently three major labels and several aggregators that negotiate on 

behalf of groups of independent labels.450 Moreover, the sound recording right holders 

can grant all of the necessary licenses for a given use of a sound recording, while as 

discussed above, the mechanical and performance rights for musical works must 

generally be negotiated separately. 

One complication is that sound recordings fixed prior to 1972 are not subject to 

federal copyright law but rather are protected by a variety of potentially inconsistent 

state laws. The Copyright Office recently concluded that federal protection should be 

extended to pre-72 recordings for a variety of reasons, including to allow users to 

benefit from exceptions in Title 17 and to facilitate licensing.

451

 

The relative complexities of music licensing can be illustrated by listing the licenses 

that must be obtained before non-interactive and interactive streaming services can 

launch.

 

446 DiMA, NMPA, RIAA, NSAI, and SGA, 

, http://www.riaa.com/newsitem.php?id=C9C68054-D272-0D33-6EDBDF08022C7E3A. 

447 Oxenford note 445. 

448 17 U.S.C. § 114. supra pp. 10-12.

449 Digital Performance Right in Sound Recordings Act, Pub. L. No. 104-39, 109 Stat. 336 (1995); S. REP. NO.

104-128, at 14 (1995). In 1998, the DMCA clarified that the digital performance right and corresponding 

statutory license applies to non-interactive webcasting services. The statutory license terms can be found 

in 17 U.S.C. § 114. 

450 Touve note 440 (estimating that “[b]etween ten and fifteen sound recording deals, across 

major owners and aggregators of these rights, are believed to be necessary for initial service launch”).

451 U.S. Copyright Office, Federal Copyright Protection for Pre-1972 Sound Recordings 175-77 (Dec. 

2011), http://www.copyright.gov/docs/sound/pre-72-report.pdf.
INTERNET POLICY TASK FORCE

Examples Sound Recording 

Licenses

Musical Composition 

Licenses

Non-interactive 

streaming

Sirius XM, 

Pandora, 

iHeartRadio

Section 114 

statutory license

Public performance 

licenses from PROs or 

individual publishers

Interactive 

streaming Spotify, Rhapsody

Individual licenses 

from record 

companies and 

aggregators

Public performance 

licenses from PROs or 

individual publishers; 

Mechanical licenses 

from individual 

publishers (and/or

HFA)452

 

In the years since the creation of the sound recording performance statutory license, a 

wide variety of non-interactive services have entered the market, providing a plethora 

of new ways for consumers to enjoy music online.453 The royalties they pay for the use 

of sound recordings have become an important and growing revenue stream for right 

holders and creators, amounting to over $450 million distributed in 2012.454

The interactive streaming market is also growing in the United States,

455 but there is

untapped potential. Some of the more prominent interactive services have launched in 

the United States long after launching in other countries, or have not yet launched in 

 

452 Mechanical licenses are required for interactive streaming services because the services implicate both 

the reproduction and distribution rights.

453 The Copyright Office maintains a list of services that are operating under the statutory license, which 

shows over 3600 such services as of mid-July 2013. U.S. Copyright Office, 

, http://www.copyright.gov/licensing/114_list.pdf.

454 SoundExchange Press Release, 

(Jan. 16, 2013) http://www.soundexchange.com/2013/01/16/soundexchange-ends-recordsetting-year-with-462-million-in-total-distributions/. In 2011, approximately $292 million in statutory 

royalties was distributed to artists and right holders, an almost three-fold increase from 2008. 

SoundExchange 2011 Annual Report http://www.soundexchange.com/wp-content/uploads/

2012/07/2011-Annual-Report_FINAL_POST-AUDIT_ISSUED.pdf SoundExchange 2008 Annual Report 

http://www.soundexchange.com/wp-content/uploads/2011/03/2008-Annual-Report-PDFFINAL-03-29-10.pdf. Under the terms of the statutory license for non-interactive services, the royalties are 

split evenly between the right holder and the artists, with the artist share split between the featured artist 

(45%) and the non-featured artists (5%). 17 U.S.C. § 114(g).

455 In 2011, the last year that the RIAA separately reported revenue for interactive subscription services, 

revenues were $241 million, from approximately 2 million subscribers. RIAA, 2011 Year-End 

Shipment Statistics http://76.74.24.142/FA8A2072-6BF8-D44D-B9C8-CE5F55BBC050.pdf. The 

2011 revenue represented a 13.5% increase from 2010. In 2012, the RIAA began reporting for the first 

time the combined total revenue from interactive services and streaming services that operate outside of 

the statutory license, which includes services like YouTube. Combined, those services generated $570.8 

million in 2012 and $359.2 million in 2011. RIAA 2012 Year-End Shipment Statistics note 432. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

the United States456 Although there are 20 million worldwide subscribers to interactive 

services, only 3.4 million are in the United States.

457

 Moreover, as these services have 

grown in recent years, increasing attention is being paid to whether artists are being 

adequately compensated for the use of their works.458

The question is whether more can and should be done to streamline online music 

licensing. In 2005, Congress held hearings on music licensing reform. Although 

subsequent progress has been made to improve the licensing landscape, such as the 

April 2012 agreement, a number of concerns remain.459 As the Register of Copyrights 

explained in 2005, the United States would benefit from being in line with the many 

countries where “[collective management] organizations license both the public 

performance right and the reproduction right for a musical composition, thereby 

creating more efficient ‘one-stop-shopping’ for music licensees and streamlined royalty 

processing for copyright owners.”460 Creating such a system in the U.S. would, 

however, entail revisiting the antitrust constraints that prevent PROs from licensing 

both the mechanical and public performance rights.461 

The Task Force believes that collective licensing, implemented in a manner that 

respects competition, can spur rather than impede the development of new business 

models for the enjoyment of music online. The time may be ripe to revisit whether 

legislative adjustments can help modernize the existing mechanical license for the 

digital age, for example by converting it into a blanket license, permitting a single 

license for a complete repertoire.

462

 Congress has recently indicated that it will be 

exploring music licensing issues during the upcoming term, including questions of 

mechanical license reform, the digital sound recording right, and a broadcast 

performance right.463 The Task Force anticipates that legislation on one or more of 

 

456 Don Reisinger, , CNET News (July 14, 2011), 

http://news.cnet.com/8301-13506_3-20079400-17/spotify-finally-launches-in-the-u.s/; Don Reisinger, 

, CNET News (Dec. 21, 2012), 

http://news.cnet.com/8301-1023_3-57560437-93/spotify-competitor-deezer-sets-sights-on-u.s/. 

457 IFPI Digital Music Report 2013 note 432 at 7; RIAA 2012 Year-End Shipment Statistics 

note 432. Moreover, in Europe, subscription services account for 20% of total digital revenues, which far 

exceeds the percentage in the U.S. IFPI Digital Music Report 2013 note 432 at 7; RIAA, 2012 

Year-End Shipment Statistics note 432. 

458

, Ben Sisario, , The New York Times (Jan. 

28, 2013), http://www.nytimes.com/2013/01/29/business/media/streaming-shakes-upmusic-industrys-model-for-royalties.html. 

459 The possibility of comprehensive licensing reform was raised in a hearing on internet radio 

performance royalties in late 2012. Statement of Representative Goodlatte, Music Licensing Part One: 

Legislation in the 112th Congress, Hearing Before the Subcommittee on Intellectual Property, Competition, 

and the Internet, Serial No. 112-158 at 1-2 (Nov. 28, 2012), http://judiciary.house.gov/

hearings/printers/112th/112-158_77042.PDF.

460 Statement of Marybeth Peters, the Register of Copyrights, before the Subcommittee on Courts, the 

Internet, and Intellectual Property, Committee on the Judiciary (June 21, 2005) http://www.copyright.gov/

docs/regstat062105.html.

461

, , Civ Action No. 41-1395, 

Second Amended Final Judgment at IV(A) (S.D.N.Y. June 11, 2001).

462 Maria Pallante, Manges Lecture note 31 at 20.

463 Statement of Representative Goodlatte, Music Licensing Part One: Legislation in the 112th Congress, 

Hearing Before the Subcommittee on Intellectual Property, Competition, and the Internet, Serial No. 112-
INTERNET POLICY TASK FORCE

these issues will be introduced and looks forward to the Administration providing its 

views to Congress at the appropriate time.

Another problem relates to the application of old contracts to new forms of 

exploitation. Can transfers of rights that were executed prior to the development of 

digital network technologies be read to cover these new distribution methods, which 

may displace prior uses and offer significant revenue streams? This too is the latest 

iteration of a recurring question. “Disputes about whether licensees may exploit 

licensed works through new marketing channels made possible by technologies 

developed after the licensing contract – often called ‘new-use' problems’ – have vexed 

courts since the advent of the motion picture.”464 

Recent litigation over these issues has occurred in the context of how decades-old 

publishing contracts determine the right to publish e-books,

465 and the digital 

exploitation of musical compositions.

466

 As each case generally turns on the specific 

language of the relevant contract, the courts will continue to develop a body of 

precedent. 

In recent years, there has been much discussion of problems with cross-border online 

licensing. The issue arises from the tension between the territorial nature of rights 

and the increasingly global nature of online markets. The primary focus has been in

the EU, where concerns have been raised that a lack of pan-European licensing could 

threaten the goal of a single European market with access on equal terms for 

consumers in all Member States.

467

 Considerable work is being done to address these 

concerns, including a pending directive on collective management.468 

In order to fully realize the potential of the Internet as a global marketplace for 

 

158 at 2 (Nov. 28, 2012), http://judiciary.house.gov/hearings/printers/112th/112-158_

77042.PDF. 

464 & v. 145 F.3d 481, 486 (2d Cir. 1998).

465 150 F, Supp. 2d 613 (S.D.N.Y. 2001), 283 F.3d 490 (2d 

Cir. 2002). 

466 , 547 F. Supp. 2d 346 (S.D.N.Y. 2008); , 

179 F.3d 217, 223 (5th Cir. 1999); , 81 F.3d 881 (9th 

Cir. 1996).

467 Each member state of the EU has its own copyright laws, its own collecting societies, and sometimes 

different right holders for the same work, with a total of more than 250 collecting societies for different 

rights. European Commission, Press Release, 

(July 7, 2012) 

http://europa.eu/rapid/press-release_MEMO-12-545_en.htm.

468 European Commission, Proposal for a Directive of the European Parliament and of the Council on the 

collective management of copyright and related rights and multi-territorial licensing of rights in musical 

works for online uses in the internal market, COM(2012) 372 final arts. 21-33 (July 11, 2012), 

http://ec.europa.eu/internal_market/copyright/docs/management/com-2012-3722_en.pdf (establishing 

requirements for multi-territorial licensing by collective management organizations). 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

copyrighted content, it is important to ensure the availability of smooth cross-border 

licensing. While distribution platforms will each have their own strategies for where to 

commence operations and when, they will want maximum flexibility in making those 

decisions. The international initiatives discussed below seek to advance that goal. 

Online licensing can be more efficient and less time-intensive than traditional licensing 

involving real-time negotiations. Although such negotiations may continue to work 

well for mass commercial services, automated online licensing can be better suited to 

the Internet’s countless low-value transactions. Many individual uses of copyrighted 

works in the digital environment would involve disproportionate transaction costs to

determine ownership and seek clearances. For example, a university professor wishing 

to reproduce a painting on the cover of his course materials may not be able to invest 

the time and effort required to find and negotiate with the right holder, despite being 

willing to pay a reasonable fee. While online licensing is in its early days, mechanisms 

have begun to develop in a number of areas, most of them limited to a single category 

of work. 

A number of these mechanisms are available in the music industry. For mechanical 

rights, there are services that enable recording artists to obtain online the mechanical 

licenses they need to record a cover of a song.

469

 Online licensing is also available for 

public performance rights in musical works. Both ASCAP and BMI allow a music 

service to obtain a public performance license online—with some limitations 

depending on the size of the service.470 Other services provide online “sync” licensing 

for sound recordings and the musical compositions they contain to permit their use in 

audiovisual works including videos, commercials, and video games.

471

 And a number 

of independent record labels offer licensing of their catalogs directly through the 

Internet.472 

 

469 The services operate as a one-stop shop for mechanical licenses for a catalog of musical works. A 

performer submits information about the song(s) she wants to record and how she wants to distribute the 

recording(s) and the services will get the license. , Limelight https://www.songclearance.com/

about/; HFA Songfile http://www.harryfox.com/public/songfile.jsp. These services are focused on 

independent recording artists.

470 ASCAP Websites & Mobile Apps License, http://www.ascap.com/licensing/types/web-mobile.aspx;

BMI Klik-Thru Digital Licensing Center https://naxoasp01.bmi.org/licensing/nmwebsite.jsf. 

471 A “sync” (short for synchronization) license permits the use of a song in the soundtrack of an 

audiovisual work; in other words, synchronized with moving images. Sync licenses must be obtained for 

both the sound recording and musical composition. , Sir Groovy http://sirgroovy.com/services/

music-licensing-online; Rumblefish Music Licensing Store http://www.musiclicensingstore.com/; Steve 

O’Hear, 

, Techcrunch (Oct. 9, 2012) http://techcrunch.com/2012/10/09/soundcloud-partners-with-gettyimages-music-users-can-sync-license-their-tracks-for-commercial-use/; GreenLight Music Licensing 

http://www.greenlightmusic.com/music-licensing/education/how-it-works 

472

, http://magnatune.com/info/licensing. An essential aspect to this type of online licensing is 

that these companies control the rights to both the master sound recordings and the underlying musical 

composition, thus permitting a one-stop licensing shop. Other record labels, such as the large U.K.-based 

Beggars Group, allow for the online submission of licensing requests, but only for the sound recording 

rights. Beggars Group Licensing Requests http://licensing.beggars.com/.
INTERNET POLICY TASK FORCE

Online licensing is available for other types of works as well, in a wide variety of 

contexts and for a wide range of uses.473 For print works, the Copyright Clearance 

Center (CCC) has led in providing sophisticated licensing tools.474 In addition to an 

annual blanket license, CCC offers a “pay-per-use” service that allows users to obtain 

permissions online to use content from works published not only in the United States

but in a number of countries around the world.475 CCC also offers a service called 

RightsLink that allows individual right holders to provide automated licenses directly 

from their own websites.476 

Services such as Getty Images, Flickr (a website hosting user-uploaded images), and 

Corbis enable online licensing of images and videos, with some available for a flat fee 

based on the size of the image, some subject to additional royalties, and some offered 

royalty-free.

477 Museums are also increasingly offering licenses online for 

reproductions of at least some of the works in their collections.478 

One innovative and well-known mechanism for online licensing by any type of right 

holder is the Creative Commons.479 Creative Commons was founded to address an 

unserved need: making it possible for copyright owners to grant blanket licenses to 

the public as a whole specifying ways in which their works may freely be used without 

payment. Three of the six current licenses are limited to non-commercial uses, and all 

are subject to the owner receiving credit. Creative Commons licenses are available for 

all categories of works, can be tailored as appropriate to the copyright owner’s 

 

473 A less common approach focuses on the type of user rather than the type of work. Christian Copyright 

Licensing International, for example, offers online licenses for various uses of different types of works to 

churches (e.g., worship songs for congregational singing, stream or podcast recordings of worship music, 

license to use movie clips in church). CCLI http://www.ccli.com/WhatWeOffer/ChurchCopyright

License.aspx.

474 CCC is the organization in the U.S. that licenses and collects royalties for the reproduction of written 

works. Copyright Licensing Experts – Copyright Clearance Center http://www.copyright.com/

content/cc3/en.html. For more information on reprographic rights organizations, see WIPO Collective 

Management in Reprography (2005), http://www.wipo.int/freepublications/en/copyright/924/

wipo_pub_924.pdf.

475 Copyright Clearance Center http://www.copyright.com/search.do?operation=show&page=ppu; 

Copyright Clearance Center, Pay-Per-Use Services http://www.copyright.com/content/dam/cc3/

marketing/documents/pdfs/Search-Instructions-PPU.pdf. 

476 RightsLink http://www.copyright.com/content/cc3/en/toolbar/productsAndSolutions/rightslink.

html.

477 , Getty Images, License Information http://www.gettyimages.com/Corporate/LicenseInfo.

aspx?isource=usa_chp_userAssistance_licensing; Flicker http://www.gettyimages.com/creative/

frontdoor/flickrphotos?isource=usa_nav_images_whatsnew_flickr; Corbis Motion http://www.corbis

motion.com/; Corbis Images http://www.corbisimages.com/

478 , Art Institute of Chicago Images http://www.artinstituteimages.org/index.asp; Art Resource 

http://www.artres.com (offering license for images of the collections of a large number of museums, 

including the Metropolitan Museum of Art and the National Portrait Gallery).

479 Creative Commons http://creativecommons.org/. The Creative Commons licenses were inspired in 

part by open source software and borrow some of the principles of those licenses. Creative Commons 

– History http://creativecommons.org/about/history; CC Wiki – Frequently Asked Questions http://

wiki.creativecommons.org/FAQ#Can_I_use_a_Creative_Commons_license_for_software.3F. . Open 

Source Initiative – The Open Source Definition http://opensource.org/osd (in the context of functional 

software, providing a blanket license permitting free redistribution, access to the source code and 

permission to create derivative works which are subject to the same terms as the original work).
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

preferences, and provide machine readable metadata. 

The most basic prerequisite for obtaining licenses is reliable, up-to-date information 

about who owns what rights in what territories. Users need to find the right holders 

from whom to obtain permission, and right holders or their representatives need to be 

contacted to determine terms of use. As online businesses seek licenses for large

repertoires of works to be offered in multiple countries in a variety of formats, and as 

multimedia uses become more common, the need for comprehensive globally-linked 

databases is growing.

The U.S. Copyright Office and some foreign governments operate public registration 

systems that provide relevant information as to owners of rights. In addition, many 

private sector organizations have databases of such information, some but not all of 

which are open to the public. As a result of this combination of resources, described 

below, much information is currently available. Nevertheless, significant gaps remain. 

There is clear public value from a registry of claims to copyright, giving would-be users

notice of who claims what rights. The United States has long had such a system, 

beginning at a time when there were legal requirements for registration.

480

 Today, 

copyright protection applies automatically to “original works of authorship fixed in 

any tangible medium of expression,”481 whether or not they are registered with the 

Copyright Office.482 Registration still provides meaningful benefits, however; it gives 

public notice of the claim to rights, and provides the owner with a certificate of 

registration serving as evidence of title and validity.483 Moreover, 

registration is required for U.S. works before a civil infringement suit can be brought, 

and a failure to register in a timely manner will limit the available remedies for 

infringement.484

The Copyright Office also records documents related to transfers of ownership, and 

other documents that “pertain to a copyright” such as licenses, contracts and 

 

480 Copyright Act of 1909 at §§ 9-22; Copyright Act of 1976, Pub. L. 94-553, 90 Stat. 2541, §§ 401-412. 

Those statutes generally required formal copyright notices and mandatory registration based on the type 

of work. 

481 17 U.S.C. § 102(a).

482 17 U.S.C. § 408(a). The prior requirement in U.S. law was eliminated in order to comply with the 

prohibition on formalities in the Berne Convention. Berne Convention Implementation Act of 1988, 

Pub. L. No. 100-568, 102 Stat. 2853, 2859.

483 17 U.S.C. § 410(a). 

484 17 U.S.C. §§ 408-412 (statutory damages and attorney’s fees are not available in a suit involving a work 

that is not registered by “the earlier of 3 months after the first publication of the work or 1 month after 

the copyright owner has learned of the infringement”).
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certificates of corporate title.485 Since 1988, recordation has been voluntary, but again 

there are statutory incentives to do so.486 

The Copyright Office makes all registrations and recordations publicly available in 

physical forms and also through an online catalog for those works registered or 

recorded from 1978 to the present. Today more than 80 percent of applications for 

registration are filed electronically; those that are not are converted into digital form 

and made available online as well.487 The online Copyright Office Catalog contains 

approximately 20 million records for works registered and documents recorded with 

the Copyright Office since 1978.488 

For pre-1978 registrations, the Copyright Office maintains approximately 45 million 

physical cards, which are reproduced in a (CCE) published 

in printed format and on microfiche. The CCE does not, however, include pre-1978 

recordations. It is available to the public at the Copyright Office, as well as at a 

number of libraries throughout the United States and online at the Internet Archive.

489

 

In addition, for a fee, the Copyright Office staff will search the registration and other 

recorded documents concerning ownership of copyright and provide a written report. 

As a result of this history, the Copyright Office records are useful but limited sources 

of ownership information. Specifically, the records: (1) do not provide comprehensive 

coverage of all copyright-protected works; (2) give only certain facts existing at the 

time of registration or recordation;490 (3) are not yet all available online; and (4) relate 

to the treatment of copyrights under U.S. law only, including as to rights and term of 

protection. Nevertheless they represent an important starting point for finding the 

owners of many works, particularly those of commercial value whose owners are likely 

to want a public record of their claims.

 

485 17 U.S.C. § 205; U.S. Copyright Office, Circular 12:

http://www.copyright.gov/circs/circ12.pdf. 

486 As with the prior registration requirement, when the United States implemented the Berne Convention, 

it eliminated mandatory recordation for transfers of ownership. Berne Convention Implementation 

Act of 1988, Pub. L. No. 100-568, 102 Stat. 2853, 2857. The benefits of recordation include the following: 

(1) under certain conditions, recordation establishes priorities between conflicting transfers, or between a 

conflicting transfer and a nonexclusive license; (2) recordation establishes a public record of the contents 

of the transfer or document; and (3) recordation of a document in the Copyright Office provides the 

advantage of “constructive notice,” ( ., members of the public are deemed to have knowledge of the facts 

stated in the document and cannot claim otherwise). U.S. Copyright Office, Circular 12 note 485

at 5.

487 U.S. Copyright Office, at 3 (Oct. 2011) 

(“Priorities and Special Projects”), http://www.copyright.gov/docs/priorities.pdf. 

488 U.S. Copyright Office, Circular 23: 

http://www.copyright.gov/circs/circ23.pdf at 2. Because the Catalog does not contain 

the underlying documents recorded, however, it generally cannot be relied on to provide complete 

ownership information. Users or their agents can go to the Copyright Office to review the physical 

documents.

489

490 Copyright registrations generally contain the following elements: (1) title; (2) author(s); (3) copyright 

claimant or owner; (4) dates of creation, publication, and registration; (5) the category of work; and (6) 

registration number. . Recordations show only the facts reflected on the recorded documents. 

U.S. Copyright Office, Circular 12 note 485. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

The Copyright Office is aware of the legal and technological challenges that affect the 

quality and usefulness of its database, and has been deeply engaged over the past year 

with a multitude of stakeholders and technical experts to identify innovative 

improvements and business-to-business relationships that may be possible to pursue. 

It is examining ways to make registration easier for certain types of works including 

groups of related works and content disseminated online, such as website pages and 

blogs. It is also taking forward projects to improve online registration and 

recordation, as well as the scope, accuracy and searchability of the public databases.491 

Finally, the Office is digitizing older copyright assignments, licenses and other records 

relating to the chain of title.492 These efforts will clearly make the U.S. public database 

more and more useful going forward, and it is important to ensure that the Copyright 

Office has sufficient resources to accomplish them. The Task Force supports the 

Copyright Office in examining the many business, legal, and technological means that 

may serve to improve copyright registration and recordation in the United States.

While the United States is not the only country with a public registration system, ours 

is the most extensive and publicly accessible.493 Other countries may register only 

certain categories of works or only recently created works, may not record transfers, 

and may not make the data available online. Moreover, these systems exist as islands; 

no infrastructure has yet been put in place to allow them to communicate with each 

other.494 WIPO has noted that “[t]he absence of voluntary national registration systems, 

together with the lack of communication or interaction among them, results in a highly 

asymmetric international scenario.”495 

Given the benefits of a public registration system, particularly in the global network 

environment, calls have recently been made to reinstate a registration requirement in 

the United States and elsewhere.496 The major obstacle to doing so is the existing 

framework of international treaties containing a prohibition on imposing formalities as 

 

491 Priorities and Special Projects note 487 at 13; U.S. Copyright Office, 

http://www.copyright.gov/docs/technical_

upgrades/.

492 Priorities and Special Projects note 487 at 15; Copyright Matters, 

(Mar. 22, 2013) at http://blogs.loc.gov/copyrightdigitization/2013/03/copyright-digitizationmoving-right-along/. 

493 Reportedly, a U.S. certificate of registration is often relied on by courts in other countries as probative 

evidence of ownership and/or the validity of a copyright.

494 Of the 48 WIPO member states with copyright registration systems, most do not record ownership 

transfers, and the majority of registries are not interconnected to other public or private copyright data 

systems. Only 16% have a public online search facility. WIPO,

, Response to Question 1, Summary of Response, 

Annex A.4, p.3 http://www.wipo.int/export/sites/www/copyright/en/registration/

pdf/a4_charts.pdf.

495 WIPO, http://www.wipo.int/copyright/en/

activities/copyright_registration/index.html. 

496 Proponents of reinstatement have also pointed to the low standards for originality, the automatic 

nature of copyright protection, and the current long duration of rights. , Christopher Sprigman, 

, 57 STANFORD L. REV. 484 (2004); James Gibson, , 81 

NOTRE DAME L. REV. 167 (2005).
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a condition to the enjoyment or exercise of rights.497 Amending these treaties, even if 

possible politically and logistically, would be a task of many years. Nevertheless there 

is much that can and should be done more immediately to improve the coverage and 

utility of existing registration systems, promote the development of new and 

complementary ones, and ensure appropriate links between them. Among other 

things, consideration should be given to finding additional ways in which copyright 

owners can be incentivized to register their claims.498 

In today’s world, with the prevalence of blogs and social networks, as well as online 

financial transactions, members of the public are increasingly accustomed to using the 

Internet in their daily lives as a communications and marketing tool. Submitting an 

online registration application for examination can be as simple as clicking a link, and 

the benefits of publicly marking one’s claim are amplified as it reaches the global 

Internet audience. Moreover, additional incentives may be provided without violating 

the prohibition on formalities, for example through further calibration of remedies and 

the availability of enhanced licensing options. The Task Force supports examination of 

such enhanced incentives for using the public registration and recordation systems

administered by the Copyright Office.

There are also many private databases of ownership information in countries around 

the world, maintained by right holder membership organizations and other entities. 

What follows is an overview of major ongoing initiatives, involving databases already 

available or in development.

Collective management organizations are an important resource for rights 

information. Given their role in collecting and distributing royalties, they need to 

ensure that the information is kept accurate and up-to-date, and to provide a 

mechanism for resolving disputes. 

The most extensive online databases are in the music field. In the United States, the 

three PROs have databases covering all compositions in their respective repertoires 

available to the public on their websites.499 HFA provides an online tool enabling the 

public to search for songwriter and publisher information for all songs that have been 

 

497 Berne Convention at art. 5(2); TRIPS at art. 9; WCT at art. 3; WPPT at art. 20. The formalities originally 

included in the Berne Convention, “created considerable difficulties for authors and courts alike. . . . [I]t 

was possible for an author to lose protection under the Convention by reason of a trivial omission, such as 

failure to deposit the requisite number of copies of his work . . . . Accordingly, the logic of abolishing 

formalities altogether became more and more compelling.” SAM RICKETSON & JANE C. GINSBURG, INTERNATIONAL 

COPYRIGHT AND NEIGHBORING RIGHTS: THE BERNE CONVENTION AND BEYOND 308 (Oxford University Press 2006).

498 , 17th Annual BCLT/BTLJ Symposium, Reform(aliz)ing Copyright for the Internet Age? (Apr. 

2013) http://www.law.berkeley.edu/formalities.htm.

499 ASCAP’s database is called ACE and is available at https://www.ascap.com/Home/ace-title-search/

index.aspx. BMI’s database is called the BMI Repertoire and is available at http://repertoire.bmi.com/

startpage.asp. SESAC’s repertory database is available at http://www.sesac.com/Repertory/Terms.aspx. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

registered with it.500 As a result, the ownership of almost all musical compositions

available for licensing in the United States can be found on one of these four websites. 

As to sound recordings, the data offered to the public is not as comprehensive. 

SoundExchange, the collective management organization for the public performance of 

sound recordings in the United States, lists sound recordings whose uses have been 

reported to it for payment purposes, together with the artist and label.

501 Because

SoundExchange administers the collection and distribution of performance royalties 

collected under the Section 112 and 114 statutory licenses for sound recording 

right holders and performers, rather than representing particular right holders 

pursuant to agreements, it does not have a catalog of works to make available. And 

because its database is derived from information reported by the services subject to 

the statutory licenses, its accuracy and completeness is dependent on the quality of 

those reports. 

In the audiovisual field, some limited online databases are maintained by U.S. labor 

unions. Their establishment was the result of a DMCA provision ensuring that 

purchasers of rights in motion pictures produced under a collective bargaining 

agreement would be responsible to pay residuals despite a lack of legal privity.502 

Purchasers are deemed to have knowledge that a motion picture was produced under a 

collective bargaining agreement, making them subject to residual obligations, if the 

union makes such information available through its website.503 As a result, several 

unions, including the Writers Guild of America, West (WGAw), the Directors Guild of 

America (DGA), and the Screen Actors Guild-American Federation of Television and 

Radio (SAG-AFTRA), make available online databases that identify the original 

producers of motion pictures.504 While this information is helpful, the original 

producer may no longer own the work and the databases do not purport to be 

comprehensive.

Progress has also been made in publishing and the visual arts. CCC has a database on 

its website where members of the public can ascertain the publishers of the works in 

its catalog.505 The Photographer Registry, a joint project of several photographers

associations, provides a database of information that is searchable by photographer 

name and by URL.506 And information as to many visual works of art is available online 

through Artists Rights Society (ARS), a licensing and monitoring organization for over 

50,000 visual artists in the United States.507 Again, however, these lists are not 

 

500 HFA Songfile, http://www.harryfox.com/public/songfile.jsp. 

501 SoundExchange PLAYS, https://plays.soundexchange.com/index.php. 

502 28 U.S.C. § 4001.

503

504 The WGAw database is available at http://www.wga.org/coveredprojects/default.aspx. The DGA 

database is available at http://www.dga.org/Employers/SignatoryDatabase.aspx. The SAG-AFTRA 

database is available at http://www.sagaftra.org/search-signatory-database. 

505 CCC, Get Permission, http://www.copyright.com/content/cc3/en/toolbar/getPermission.html. 

506 PPA AVA Copyright Holder Searchable Database, http://photographerregistry.com/index.php. 

507 The list of represented artists is available at http://www.arsny.com/complete.html. Instructions for 

obtaining a license are available at http://www.arsny.com/procedures.html. There is not an option for

clearing rights online, but requests can be made via email.
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comprehensive.

Foreign collective management organizations also maintain databases of the 

repertoires they manage.508 Not all of them, however, provide their repertoires or 

ownership information online. 

Other entities have also developed online databases of ownership information.509 The 

recently launched Digital Public Library of America provides metadata for the digital 

collections of numerous libraries, museums, and archives throughout the United 

States, with links to access individual photographs, writings, movies and sound 

recordings.510 As to print media, the Open Library, a project of the non-profit Internet 

Archive, seeks to build a web page for every book ever published.511 Although it does 

not provide contact information, it identifies the author and provides a link to the 

author’s website if available, as well as each edition’s publisher. The online WATCH 

(Writers, Artists, and Their Copyright Holders) database provides contact information 

for works by numerous U.S. and U.K. authors.512 Another database still in beta, the 

Copyright Registry, allows users to search for copyright ownership information for 

images on the Internet through the URL where the image is located.513 

As is clear from the above overview, existing databases have various limitations. They 

do not link different types of copyrighted works that may be incorporated into a multimedia product. Nor are there links between databases covering rights in different 

territories. We do not yet have a network of databases with global, comprehensive 

 

508 , Korea Music Copyright Association, Work Search, http://www.komca.or.kr/CTLJSP; PRS for 

Music, http://www.prsformusic.com/SiteCollectionDocuments/webservicesguides/Guide_to_Search_

our_database.pdf; SABAM, Find Work, https://www.sabam.be/pls/apex/f?p=113:1:15035423951033; 

Sacem, Oeuvres, http://www.sacem.fr/oeuvres/oeuvre/index.do?fwkLangue=en. 

509 In 2011, WIPO released a survey of “private copyright documentation systems.” WIPO, Survey of 

Private Copyright Documentation Systems and Practices (2011), http://www.wipo.int/

meetings/en/2011/wipo_cr_doc_ge_11/pdf/survey_private_crdocystems.pdf. The report provides 

information on private copyright registries, which serve primarily as resources for right holders by 

allowing them to register their works as a way of generating verifiable third-party evidence of “the date of 

creation of a very precisely identified work” as an alternative to voluntary public registries like the 

Copyright Office, and private documentation systems, which include the kind of databases discussed in 

this paper and generally “provide useful information, which may (for example) complement the search for 

a right-holder or vehicle meaningful licensing details (to human beings and computers).” at 24. 

510 Digital Public Library of America, dp.la. The access to the individual works is determined by the 

underlying collections that are participating in the project.

511 Open Library, http://openlibrary.org/. 

512 Harry Ransom Center, The University of Texas, http://norman.hrc.utexas.edu/watch/about.cfm. 

513 Copyright Registry, http://www.c-registry.us/pages/index.php?pID=20. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

reach using interoperable standards to communicate with one another.514

Work is being done to address these issues, so far primarily in the music sphere. One

leading example is a planned Global Repertoire Database (GRD) for musical works, 

spearheaded and funded by music publishers and collective management 

organizations. The GRD is intended to provide a single, comprehensive and 

authoritative source of information about the ownership and control of musical works

worldwide.

515 It will accept registrations directly from publishers, composers and 

collective management organizations, and maintain a database of those registrations, 

with protocols to resolve disputes in ownership claims.516 An operational GRD with 

some data is anticipated to be available in 2015.517 In the field of sound recordings, 

PPL, the U.K. collective management organization, is in the process of building a Global 

Recordings Database. It has already compiled a database with information on over 5.6 

million recordings released in the U.K. and is in the process of working with major 

record companies and a range of overseas music licensing companies to expand it to 

include worldwide data.

518

There are also a number of databases that are operated by groups of collective 

management organizations that provide right holder information for multiple 

countries. These databases are not, however, publicly accessible, and are primarily 

designed to help the organizations find right holder information for works in other 

participating organizations’ repertoires. Examples include the International 

Documentation on Audiovisual works (IDA),519 and the Musical Works Information 

Database (WID),520 both owned by the International Confederation of Societies of 

Authors and Composers (CISAC), which is composed of a group of collective 

management organizations from around the world. 

Globally-linked databases can serve as a platform for cross-sector and cross-border 

 

514 These shortcomings have been described and analyzed in two papers prepared for the U.K. government. 

Richard Hooper, Rights and Wrongs: Is copyright licensing fit for purpose for the digital age? (Mar. 2012), 

http://www.ipo.gov.uk/dce-report-phase1.pdf (“Hooper Report I”); Richard Hooper and Ros 

Lynch, Copyright works: Streamlining copyright licensing for the digital age (July 2012), 

http://www.ipo.gov.uk/dce-report-phase2.pdf (“Hooper Report II”). As noted in the Hooper Report I, one 

of the main problems in copyright licensing is “[t]he lack of common standards and of a common 

language for expressing, identifying and communicating rights information across the different creative 

sectors and across national borders.” Hooper Report I at 7.

515 Global Repertoire Database, http://www.globalrepertoiredatabase.com/. 

516 Hooper Report II note 514 at 41.

517 PRS for Music,

(Jan. 24, 2013) http://www.prsformusic.com/aboutus/press/latestpressreleases/Pages/

GlobalRepertoireDatabasemakesstrongprogresswithplansfor2013wellunderway.aspx; Hooper 

Report II note 514 at 42. 

518 Tim Ingham, , MUSIC WEEK (Aug. 8, 2012); Hooper Report II note 514 at 

¶¶ 67-70. The PPL database is available at http://repsearch.ppluk.com/ARSWeb/appmanager/ARS/

main?cont=A. 

519 IDA Communication Space, http://www.ida-net.org/index.php. 

520 Musical Works Information Database, http://www.widb.com/default.asp. 
INTERNET POLICY TASK FORCE

licensing. In 2011, a consultant commissioned by the U.K. government to review the 

country’s intellectual property laws recommended the creation of a Digital Copyright 

Exchange (DCE), or “a network of interoperable databases to provide a common 

platform for licensing transactions."521 A subsequent report on how best to implement 

this recommendation proposed in 2012 to create

a not-for-profit, industry-led Copyright Hub based in the UK that links 

interoperably and scalably to the growing national and international 

network of private and public sector digital copyright exchanges, rights 

registries and other copyright-related databases, using cross-sectoral and 

cross-border data building blocks and standards, based on voluntary, 

opt-in, non-exclusive and pro-competitive principles.522

The Copyright Hub’s focus would not be on the high-value licensing that the Hooper 

Report found was already occurring with relative ease, such as the licensing of the 

catalog of a major record label by a digital music service. Instead, it is intended to 

focus “on the very high volume of automatable, low monetary value transactions 

coming mostly from the long tail of smaller users – the small digital start-up company 

wanting to use music and images and text creatively for its customers, the teacher in 

the classroom, a user posting a video on YouTube.”523 The project will be led and

primarily funded by industry, with the government playing a facilitating and advisory 

role.524 A launch group was established in late 2012, and the Copyright Hub’s initial 

test phase went online in July 2013.525

Another cross-border initiative is WIPO’s International Music Registry (IMR). The IMR is 

a collaborative process involving stakeholders from all parts of the music sector.526 

Unlike the GRD or the Global Recording Database, its goal is not to create an 

independent database, but rather to promote the advancement of music rights 

databases, and facilitate coordination between them, in order to develop robust 

information sources that can be easily used to obtain licensing information.527 In other 

words, “[t]he IMR seeks to create an international system that provides a single access 

point to all the different rights management systems used around the world.”528 To 

date, WIPO has released a detailed scoping study and is conducting a series of 

roundtables on the IMR’s scope and structure.529

 

521 Hargreaves Report note 33 at 33.

522 Hooper Report II note 514 at ¶ 7.

523 at ¶ 8.

524 at ¶¶ 162-165. The U.K. government recently provided £150,000 in funding to the Copyright Hub. 

Press Release, (Mar. 25, 2013) https://

www.gov.uk/government/news/government-gives-150-000-funding-to-kick-start-copyright-hub. 

525 The Copyright Hub, http://www.copyrighthub.co.uk/. 

526 WIPO, Participants in the IMR Stakeholder Dialogue, http://www.internationalmusicregistry.

org/portal/en/who_we_are.html. 

527 Nicholas Garnett, at 5-6 

http://www.internationalmusicregistry.org/export/sites/imr/portal/en/pdf/imr_scoping_study.pdf. 

528 International Music Registry, http://www.internationalmusicregistry.org/portal/en/index.html. 

529 Frequently Asked Questions, http://www.internationalmusicregistry.org/portal/en/faqs.html. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

A key component in creating interoperable databases and licensing platforms is the 

implementation of standards infrastructures. Common standards will facilitate linking 

databases and ensuring that accurate rights information can be communicated across 

sectors and borders. A range of standards already exist primarily focused on creating 

unique identifying information for works. Although a comprehensive review is beyond 

the scope of this paper,530 the more notable standards include: (1) International 

Standard Recording Code (ISRC), which identifies sound recordings;531 (2) the 

International Standard Work Code (ISWC), which identifies musical compositions;532 (3) 

International Standard Audiovisual Number (ISAN), which identifies films, television 

shows, and other audiovisual works;533 and (4) International Standard Book Number 

(ISBN), which identifies books.

534 Other standards have been developed for purposes 

beyond identification, including improving licensing and distribution of royalties.535

In light of these myriad standards across multiple types of works, it would be helpful

to develop universal standards to streamline licensing, distribution, and payments. 

One goal of the WIPO IMR is to help develop such standards in the music context. In 

Europe, the European Publishers Council with partners from a range of content sectors 

has formed the Linked Content Coalition (LCC), focused on developing and 

implementing standards infrastructures to enable cross-industry and cross-border 

licensing. The LCC determined that this requires: (1) registries (i.e., the data of who 

owns what); (2) exchanges (i.e., the services providing the transactional interface 

between owners and users); and (3) a standardized communication layer (i.e., the 

standardized identification, metadata and messaging to communicate between the 

registries and the exchanges).536 Because in its view the registries and exchanges 

should be and have been created by right holders, organizations, and entrepreneurs in 

response to market development, the LCC is focusing on the missing link – the 

standardized communication.537 In April 2013, the LCC released a technical 

 

530 In 2011, WIPO produced a report that provides additional information about the operation of certain 

standards used in copyright databases. WIPO, 

(Preliminary Version) (Sept. 2011), 

http://www.wipo.int/meetings/en/2011/wipo_cr_doc_ge_11/pdf/collective.pdf. 

531 IFPI, Resources-ISRC, http://www.ifpi.org/content/section_resources/isrc.html. 

532 ISWC International Agency, http://www.iswc.org/. 

533 ISAN (International Standard Audiovisual Number), http://www.isan.org/portal/page?_pageid= 

168,1&_dad=portal&_schema=PORTAL. 

534 U.S. ISBN Agency, http://www.isbn.org/standards/home/about/index.html. 

535 Creative Commons licenses, for example, have standardized machine-readable elements that rely on the 

CC Rights Expression Language. About the Licenses – Creative Commons http://creativecommons.

org/licenses/. DDEX is a partnership between record labels, collective management organizations, and 

digital service providers that has developed standards used primarily to improve efficiency in processing 

sales and usage data. DDEX, http://ddex.net/. 

536 Project Plan: Linked Content Coalition at 2 (Oct. 27, 2011), http://media.wix.com/ugd//

bff7bc_ffefdfc161440b32d37e7bb227b8a4d2.pdf. 

537 Linked Content Coalition – FAQ, http://www.linkedcontentcoalition.org/#!faq/cxed. As the LCC 

recently explained, “[t]he objective is to create something that would achieve what the banking sector’s 

‘IBAN’ achieves. The IBAN allows transactions to take place between banks all over the world despite each 
INTERNET POLICY TASK FORCE

framework, which it is testing in collaboration with the European Commission and has 

made available for peer review.

538

Building the online marketplace is fundamentally a function of the private sector, and 

that process is well underway.539 In order to achieve its full promise, however, there 

remains a need for more comprehensive and reliable ownership data, interoperable 

standards enabling communication among databases, and more streamlined licensing 

mechanisms. Moreover, inefficiencies and structural anomalies in the complex music 

licensing system may need reform.

The Task Force expects that the private sector will continue to make progress toward 

resolving these issues. In the interim, there may be an appropriate and useful role for 

government in facilitating the process, whether by removing obstacles or taking steps 

to encourage faster and more collaborative action. 

One possible area for government involvement is helping to provide better access to 

standardized rights ownership information. Already work is being done to improve 

the reliability of the public registration and recordation systems, but additional 

educational efforts and stronger incentives could further increase the use of the 

system and enhance its comprehensiveness. The expertise and resources of the 

private sector could also be drawn on to create innovative public/private partnerships 

improving or linking rights databases.

With respect to creating new platforms for online licensing, such efforts should 

continue to be primarily driven by the industries involved. But there may be ways in 

which the U.S. government can play a helpful role on both the domestic and 

international fronts. This could include pursuing the concept of a digital copyright 

hub similar to that under discussion in the U.K., launching the kind of multistakeholder dialogue recently launched in Europe as part the “Licences for Europe” 

 

bank having their own internal systems.” Linked Content Coalition, News Release, 

(Nov. 19, 2012) http://media.wix.com/ugd//

bff7bc_b0233171da77596c3d436a98a1f5addf.pdf.

538 Linked Content Coalition, News Release, 

(Apr. 8, 2013) http://media.wix.com/ugd//bff7bc_

a0477746b9d46df1c923c96d66dba4f5.pdf.

539 Legislation introduced in Congress in 2012 contained a provision directing the Librarian of Congress, in 

consultation with the PTO and IPEC, to submit a report to Congress “that provides a set of 

recommendations about how the Federal Government can facilitate, and possibly establish, a global music 

registry that is sustainably financed and consistent with World Intellectual Property Organization 

obligations.” Internet Radio Fairness Act of 2012 (IRFA), H.R. 6480 at § 7. The PROs opposed this 

provision as “wholly unnecessary, particularly in light of ongoing international database initiatives led 

and funded by the world’s PROs, with the participation of music publishers and music users, to establish 

just such a registry”, and urged Congress to “allow the ongoing privately-driven initiative to proceed 

without government interference.” Letter to Honorable Bob Goodlatte and Honorable Mel Watt at 4 (Nov. 

19, 2012), http://www.ascap.com/Press/2012/~/media/Files/Pdf/press/FINAL%20PRONSAI%

20%20response%20to%20Music%20HearingChaffetz%20bill%20111912.pdf.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

initiative,540 as well as participating in the development of international initiatives such 

as WIPO’s IMR, and facilitating the involvement of U.S. stakeholders. The Task Force 

will solicit comments and convene roundtables on what role the government can or 

should play to improve and take forward the online licensing environment.

 In 

recent years, numerous services have launched across copyright sectors to 

provide consumers with unprecedented access to content in a wide variety of 

formats. 

 The 

complexity of different works, different licensing mechanisms, and different 

administrators of different rights has led to overlaps and inconsistencies that 

may be impeding the development of legitimate services.

 

Online licensing mechanisms can significantly reduce the cost and difficulty of 

obtaining permissions, particularly for small-scale individual uses.



Although information about rights ownership is publicly available from many 

sources, the databases are limited in scope and are not integrated or 

interoperable. 



o The Task Force will provide input into any Congressional review of music 

licensing, particularly with respect to the mechanical license for musical 

compositions;

o The Task Force supports the Copyright Office’s work in improving the 

registration and recordation systems and supports the provision of

enhanced incentives for using these systems; and

o The Task Force will solicit public comment and convene roundtables 

regarding an appropriate role for the government to help to improve the 

online licensing environment.

Continued engagement with all stakeholders is critical to evaluating and refining our 

national copyright policy. Accordingly, the Department of Commerce’s Task Force will 

seek further public input on the issues identified in this report to determine how the 

current copyright framework can be improved to serve creators, right holders, service 

providers, consumers, innovation, and national economic goals. 

 

540 Licences for Europe, Structured stakeholder dialogue 2013 http://ec.europa.eu/licences-foreurope-dialogue/ (focusing on four areas: “Cross-border access and portability of services; User-generated 

content and licensing; Audiovisual sector and cultural heritage; [and] Text and data mining.”)
INTERNET POLICY TASK FORCE

Summary of Recommendations and Issues for Further 

Discussion and Comment

:

 Extending the public performance right for sound recordings to cover 

broadcasting.

o For over thirty years, the Administration and Copyright Office have made 

repeated calls to create a public performance right for the broadcasting 

of sound recordings. Apart from the inability to obtain compensation in 

the United States, this omission has had a real impact on the balance of 

payments from abroad. While broad public performance rights are 

enjoyed by owners of sound recordings in most other countries, U.S. 

sound recording owners and performers have been unable to collect 

remuneration for the broadcasting of their works in those countries, due 

to the lack of reciprocal protection here.

 Adopting the same range of penalties for criminal streaming of copyrighted 

works to the public as now exists for criminal reproduction and distribution.

o While the willfully infringing reproduction and distribution of 

copyrighted works can be punished as a felony, willful violations of the 

public performance right are punishable only as misdemeanors. This 

discrepancy is an increasingly significant impediment to the effective 

deterrence and criminal prosecution of unauthorized streaming. Since 

the most recent updates to the criminal copyright provisions, streaming 

(both audio and video) has become a significant if not dominant means 

for consumers to enjoy content online. The Administration and the 

Copyright Office have both called on Congress to amend the Copyright 

Act to ensure that illegal streaming to the public can be punished as a 

felony in the same manner as other types of criminal infringement.

 

:

 Assessing the appropriateness of different rate-setting standards for the public 

performance of sound recordings by different types of digital music services.

o Any reconsideration should focus broadly on the interests of all involved 

parties, taking into account the impact on creators and right holders as 

well as on different types of services. 

 Reforming music licensing, with particular focus on the mechanical license for 

musical compositions.

o The Task Force believes that collective licensing, implemented in a 

manner that respects competition, can spur rather than impede the

development of new business models for the enjoyment of music online. 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

The time may be ripe to revisit whether legislative adjustments can help 

modernize the existing mechanical license for the digital age, for example 

by converting it into a blanket license, permitting a single license for a 

complete repertoire. Congress has recently indicated that it will be 

exploring music licensing issues during the upcoming term, including 

questions of mechanical license reform. The Task Force looks forward to 

the Administration providing its views to Congress at the appropriate 

time.

 Ensuring that consumers have the ability to unlock their cell phones, subject to 

applicable service agreements.

o The decision in the most recent DMCA rulemaking not to continue the 

exemption for cell phone unlocking as applied to newly purchased 

phones has raised controversial issues of telecommunications policy. 

The Administration has made clear its position “that consumers should 

be able to unlock their cell phones,” while respecting the process 

undertaken by the Librarian of Congress. The Administration and Library 

of Congress agree that the DMCA rule-making process “was not intended 

to be a substitute for deliberations of broader public policy

:

 The legal framework for the creation of remixes.

o The Task Force will solicit public comment and convene roundtables on 

issues related to the creation of remixes. Many remixes will qualify as 

fair use, or be covered by existing licenses. The question is whether the 

creation of remixes is being unacceptably impeded by legal uncertainty. 

There is today a healthy level of production, but clearer legal options 

might result in even more valuable creativity. Is there a need for new 

approaches to smooth the path for remixes, and if so, are there efficient 

ways that right holders can be compensated for this form of value where 

fair use does not apply? Can more widespread implementation of 

intermediary licensing play a constructive role? Should solutions such as 

microlicensing to individual consumers, a compulsory license, or a 

specific exception be considered? Are any of these alternatives 

preferable to the status quo, which includes widespread reliance on 

uncompensated fair uses?

 The relevance and scope of the first sale doctrine in the digital environment.

o The Task Force will solicit public comment and convene roundtables on 

issues related to the first sale doctrine in the digital environment. The 

first sale doctrine as currently formulated does not apply to digital 

transmissions, and the Copyright Office concluded in 2001 that 

extending the doctrine to the digital environment was not advisable. 

Since the Copyright Office’s examination in 2001, much has changed. In 
INTERNET POLICY TASK FORCE

a world of increasingly digital distribution, the traditional field of 

application of the first sale doctrine may disappear, and the resale 

market become obsolete. The question is whether there is a way to 

preserve the doctrine’s benefits, allowing the equivalent of sharing 

favorite books with friends, or enabling the availability of less-than-fullprice versions to impecunious students. Will the market provide these 

opportunities, and if so, how? And are there any changes in 

technological capabilities that would alter any of the Copyright Office’s 

2001 conclusions?

 The application of statutory damages in the context of individual file-sharers 

and secondary liability for large-scale online infringement.

o The Task Force reiterates the importance of statutory damages in online 

copyright enforcement, but believes that there are certain areas where 

recalibration of their scope may be appropriate. To that end, we will seek 

public comment and convene public discussions regarding the 

application of statutory damages in the context of: (1) individual filesharers; and (2) secondary liability for large-scale online infringement.

 Improving the operation of the DMCA’s notice and takedown system.

o Although the notice and takedown system has generally worked well with 

respect to traditionally hosted online content, both right holders and ISPs 

have identified a number of ways in which its operation can become 

unwieldy or burdensome. One potential solution to ease the burdens 

involved with the notice and takedown system and improve results could 

be to create best practices for identifying infringing content and sending 

notices, for takedown procedures, and for ensuring that infringing 

content once removed does not immediately reappear. This would 

benefit right holders, ISPs and end users alike, by supporting a more 

efficient and reliable notice and takedown system. To that end, the Task 

Force will convene a multi-stakeholder dialogue involving right holders 

(both large and small), ISPs, consumer representatives and companies in 

the business of identifying infringing content, on how to improve the 

operation of the notice and takedown system.

 Supporting, monitoring, and evaluating the effectiveness of appropriate 

voluntary private sector initiatives to improve enforcement of rights online, to 

determine whether additional action should be considered.

o The Task Force is encouraged by the progress that has been made 

through the cooperative efforts of right holders, ISPs, payment 

processors, ad networks and search engines to develop the voluntary 

initiatives discussed in this section. We encourage interested 

stakeholders to continue identifying and developing voluntary solutions 

that benefit all parties. The Task Force will provide assistance to the IPEC 

as needed to help foster further developments in this area. Moreover, as 

requested in the IPEC 2013 Joint Strategic Plan, the USPTO will institute 
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

studies, based on public input and with the assistance of other relevant

agencies, examining the effectiveness of voluntary initiatives in curtailing 

online infringement.

 Providing enhanced incentives for using the public registration and recordation 

systems administered by the Copyright Office.

o In today’s world, with the prevalence of blogs and social networks, as 

well as online financial transactions, members of the public are 

increasingly accustomed to using the Internet in their daily lives as a 

communications and marketing tool. Submitting an online copyright 

registration application for examination can be as simple as sending an 

email, and the benefits of publicly marking one’s claim are amplified as it 

reaches the global Internet audience. Moreover, additional incentives 

may be provided without violating the prohibition on formalities, for 

example through further calibration of remedies and the availability of 

enhanced licensing options. 

 Promoting enhanced public education and outreach to curb online infringement.

o Increased public education and outreach, both domestically and 

internationally, is an important tool to help stop infringement. Such 

educational efforts should be balanced to include information about both 

rights and exceptions. Many right holder organizations, user groups and 

other stakeholders, including the U.S. government, have developed 

educational materials for parents and teachers regarding the value of 

copyright and to help educate young people about how to legally access 

content online and use copyrighted materials.

 The appropriate role for the government, if any, to help the private sector 

improve the online licensing environment.

o The Task Force expects that the private sector will continue to make 

progress toward resolving online licensing issues. In the interim, there 

may be an appropriate and useful role for government in facilitating the 

process, whether by removing obstacles or taking steps to encourage 

faster and more collaborative action. One possible area for government 

involvement is helping to provide better access to standardized rights 

ownership information. With respect to creating new platforms for 

online licensing, such efforts should continue to be primarily driven by 

the industries involved. But there may be ways in which the U.S. 

government can play a helpful role on both the domestic and 

international fronts. The Task Force will solicit comments and convene 

roundtables on what role the government can or should play to improve 

and take forward the online licensing environment.
INTERNET POLICY TASK FORCE

 

:

 Copyright Office

o Updating the Section 108 exception for libraries;

o Reviewing copyright issues related to higher education, including 

distance education;

o Updating the Chafee Amendment to ensure access to copyrighted works 

by individuals with print disabilities in the context of current 

technologies;

o Examining the issues of orphan works and mass digitization to develop 

potential legislative solutions;

o Improving the DMCA database of designated agents;

o Examining the use of possible small claims procedures that can assist 

individual creators and SMEs in enforcing their rights online;

o Improving the public registration and recordation systems, including 

through public-private partnerships;

o Educating the public on fair use through creation of an index of major 

court cases, as proposed in the IPEC 2013 Joint Strategic Plan.

 IPEC

o Helping to foster voluntary best practices for online enforcement 

between stakeholders, including right holders, ISPs, payment processors, 

and online advertising networks.

 Private Sector

o Developing interoperable and connected online databases of ownership 

information and online licensing platforms;

o Creating inclusively developed fair use guidelines for various user 

communities;

o Establishing voluntary cross-industry initiatives such as the Copyright 

Alert System.

 :

 The meaning of “public performance” in the context of new video streaming 

technologies;

 The treatment of temporary reproductions;

 The scope of the distribution right as applied to making works available online;

 The meaning of elements of the DMCA’s safe harbors for service providers, 

primarily the knowledge standard and provisions on termination of repeat 

infringers’ accounts;

 How old contracts apply to new uses in the digital environment.
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Acknowledgements, Symposium Panelists and Notice of 

Inquiry Respondents

The Internet Policy Task Force extends its thanks to all of our colleagues throughout 

the Executive and Legislative branches who have provided valuable feedback and 

consultation during the development of this report. We offer special thanks to all of 

the individuals and private sector organizations who participated in our public 

Symposium on Copyright Policy, Creativity & Innovation in the Internet Economy, and 

those who submitted written comments to the Notice of Inquiry that served as the 

basis for this report.

Jonathan Band, Policybandwidth

Susan Cleary, Independent Film & Television Alliance

Rick Cotton, NBC-Universal

Sarah Deutsch, Verizon

Ken Doroshow, Entertainment Software Association

Keith Epstein, AT&T

Joshua Friedlander, Recording Industry Association of America

Marianne Grant, Motion Picture Association of America

Leslie Harris, Center for Democracy and Technology

Thomas Hesse, Sony

Lance Kavanaugh, YouTube

Scott Martin, Motion Picture Association of America

Corynne McSherry, Electronic Frontier Foundation

Peter Menell, UC Berkeley School of Law

Gene Mopsik, American Society of Media Photographers

Brian Napack, MacMillan

Thomas Rubin, Microsoft

Piotr Stryszowski, Organisation for Economic Cooperation and Development

Harlan Yu, Princeton University
INTERNET POLICY TASK FORCE

American Association of 

Independent Music

American Business Media

American Federation of Musicians of 

the United States and Canada

American Federation of Television 

and Radio Artists

Association for Competitive 

Technology

Association of American Publishers

AT&T

Attributor Corporation

Beachbody, LLC

Business Software Alliance

Center for Democracy and 

Technology

Computer & Communications 

Industry Association

Consumer Electronics Association

Copyright Clearance Center

Creative Commons

Digital Media Association

Digital Society

Directors Guild of America

EDUCAUSE

Electronic Frontier Foundation

Entertainment Software Association

Etopia Press

Fantasy & Science Fiction

Future of Music Coalition

Google, Inc.

Independent Film & Television 

Alliance

Information Technology and 

Innovation Foundation

Institute of Intellectual Property and 

Social Justice

Interactive Advertising Bureau

International Alliance of Theatrical 

and Stage Employees

Internet Commerce Coalition

Library Copyright Alliance

Media Education Lab

Michigan State University

Motion Picture Association of 

America, Inc.

Mozilla

MySpace Music

National Cable & 

Telecommunications Association

National Music Publishers’ 

Association

NetCoalition

New America Foundation

Pink Visual

Public Knowledge

Recording Industry Association of 

America

Screen Actors Guild

SESAC, Inc.

Sher Music Co.

Sloane & Company

Software & Information Industry 

Association

TechAmerica

The Copyright Alliance

Total-Knowledge.com, 

Culturedialogue.org

TuneCore

U.S. Chamber of Commerce

University of Michigan Library

Visa, Inc.

Writers Guild of America West
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Zack Aab

Dan Aaro

Francisco Abreu

Alexander Acosta

Chris Adams

Justin Adkins

Lucian Agnello

Jonathan Aiken

Garry Airiants

Justin Alderman

Allan Alexander

Josh Alexander

Adhem Ally

Kimberly Altenburg

Winna Althiser

Nayeli Alvarado

Elizabeth Amber

Earl Ambrose

William Ambrose

Amer Amer

Anthony Amico

Spencer Andersen

Marc Anderson

Michael Anderson

Steven Anderson

Troy Anderson

Adrian Archer

Madeleine Archer

Ivan Arguello

Michael Armstrong

Eric Arntson

Anthony Arquette

Christian Ates

Stephen Ausmus

Zachary Averyt

Brian Ayotte

Farhad Badri 

R. Renee Bagby

Kim Bahnsen

Gary Balaban

Adam Balk

Zach Bamford

William Barbano

Israel Barbarin

Claire J. Barber

Joseph Barder

Dashiell Barlow

Cory Barnett

Michael Barnette

Andrew Barrett

Andy Barton

Scott Bateman

Aaron Bausch

Kenneth Beedle

Nicholas Behrens

Garth BeMiller

Dr. E. Ben-Sefer

Royce Benda

John Bendix

Galen Lee Benway

Emily Beshlian

Carlton Betts

Jared Beymer

Bert Bingham

Joe Bivins

Tara Blaize

Robert Blankenship

Abraham Blea

David L. Blevins

Victoria Blisse

Warren Blyth

Daniel Bogan

Bob Bolin

Drew Bond

Douglas Bonham

Derek Book

Adam Boser

Steven Boss

Sharon Boullion

Tim Boysen

Chad Bramble

Brian Breczinski

Brenna

Matthew Bresnahan

Jay Bridal

Martin Brinkley

Kevin Britts

Jarod Brody

Jared Brogan

Nicholas Brosz

Berengaria Brown

Jason Brown

Jeremy Brown

Matthew Brown

Veronic Brummer

Timothy Buchheim

Anthony Bundren

Brian Burch

Aliyah Burke

Robert Burke

James Burns

Monica Burns

Yancy Burns

Travis Burr

Heather Butler

Jeff Byrnes

Phillip Campbell

Brian Campos

Samuel Carchidi

Vanessa Cardona

Kevin Carignan

Karen Carino

Michael A. Carrier

Carly Carson

Anthony Caruso

Rob Castillo

David Castro

Gian Caterine

Ryan Cavanaugh

William Chambers

Kyle Chambliss

Elise Chand

Charlie Chang

Avery Chapman

Gershon Chapman

Anthony Chen

Sun-Ling Chen, MD

Thomas Chen

Rowena Cherry

Tyler Chester

Caroline Ching

Timothy Choat

Joseph Chouinard

Chris Christiansen

Davio Cianci

Peter Cintula

Ryan Clark

Zachary Clayton

Lanty Clemons

Tristan Cobb

James Colberg

Bryan Cole

Johnnie Coleman Jr.

Nathanial Collard

Kevin Collier

Robert Collier

Michael Conley

Phoebe Conn

Nicholas Conterno

Gary Cooper
INTERNET POLICY TASK FORCE

Mitchell Coppolo

Ariel Cornejo

Beth Cornelison

Matthew Cox

Samuel Cox

Jennifer Crafton

Andrew Craig

Karl Cramer

Kessel Crandall

John Silas Cranfield

Brooklyn Cravens

Shannon Credeur

Carolyn Crooke

David Cross

Dustin Cross

Eric Cruz

Christina Cuevas

Benjamin Cunningham

John Curzon

Taylor Cvetkovich

Rose Cyrus

Nicole Dame

Omar Darwish

David Daut

Ben Davenport

Matthew Davin

Alana Davis

Alyssa Davis

Clint Davis

John Davis

Michael Davis

Dakota DawsonMarmolejo

Kelly Dawson

Philip DeFord

Matthew Delaplace

Craig DeLaTorre

Chris Delyani

Derek Dennis

Michael Derczo

Hunter Dewing

Eric Dhiu

Austin Diaz

Francisco Diaz

Stephen Paul Dieter

Joseph DiLascio

Dollardillon Dillon

Cheshil Dixit

Patrick Doherty

Matthew Dominski

Phillippe Dompierre

Alex Dooley

Jonathan Dorfman

Kate Douglas

Austin Dougless

Justin Dow

John Dowdal

Sean Downs

Curtis Dressler

Daniel Drew

Todd Dreyer

Alan Drysdale

Jason Duchette

Nicholas Dumdie

Taylor Duncan

Jesse Dubinsky

Nikki Duncan

Taylor Dutch

Allen Dutra

Nahum Dyer

Tyler Eakins

Brady Easter

Jack Ebersole

Marshall Edelen

Brian Edwards

Steven Edwards

John Ellertson

Barbara Elsborg

Marshall Elstad

Mary Emmons

Knut Engstrom

Patrick Ervin

L. Esteli

Cassidy Evans

Daniel Evans

Jason Evans

Russell Evans

Patrick Ewing

Anna Faaborg

Kolby Fackrell

Michael Fahnestock

Edward Fankhauser

Jared Farmer

Cody Fausnaugh

Jessica Faux

William Ferguson

Brendon Fernandez

Kenya Findlay

Courtney Fink

Mark Fischer

William Fitzsimmons

Peter Flanagan

Brian Flesher

James Fletcher

Kyle Foerschler

Drew Fontenot

Christopher Forman

Travis Foster

Jason Fourier

Johnathan Fowler

Randy Fowler

Adrienne Fox

Keith Foy

Michael Franks

Will Freeman

Derek Frelow

Ian Freman-Lee

Brian Frentz

Christine Fritzinger

Adam Fry

Corry Frydlewicz

Shawna Gage

Rachel Gamblin

Hiren Gandhi

Richard Garber

David Garcia

Ricardo Prudencio 

Garcia

Brent Gardner

Sharon K. Garner

Matt Garville

Eric Geer

Chase Geeseman

John Gilbert

Jeffrey Gilligan

John Gilmore Jr.

Susan Gilnert

Ronald Goff

David Gonzalez

Eduardo Gonzalez

Saul Gonzalez

Reginald Goodall

Nick Gorden

Charles Gore

Donna Graham

Timothy Graziano

Alex Gregorio

Dalton Green

David Green

Nicki Green
COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY | 

Geoffrey Greer

Eric Gregoire

William Griese

David Griffen

Collin Griffin

Colton Grimm

Calum Groover

Lindsay Guchhait

James Guenther

Andrew Gunkle

William Gunn

Craig Gunnels

Walter Gwizdak

Shaun Gyssels

Russell Haines

Denis Hainsworth

Denny Hall

Gary Hall

Owen Hall

Shaun Halliburton

Sierra Hamm

Steven Hansen

Erik Hanson

Dymphna Harrigan

JT Harris

Auderon Harrison

Nate Hartman

G A Hauser

Finn Haverkamp

Kelley Heckart

Brett Hedstrom

Roger T. Heiniluoma

Patrick Helms

Deboarh Helton

Joshua Henderson

Xzavier Henderson

Devin Henry

Trosten Herrmann

Ana Hernandez

Michael Hicks

Michael Higgins

Robert Hinrichsen

Kelly Hirst

Michael Hoffman

Patrick Hogg

Noah Holcomb

Shawn Hollins

Samuel Holmes

Andrew Hopkins

Joseph Hopper

Christopher Hornbacker

David Hosea

Jasmine Hosein

Joy Hostetter

Travis Howe

Imogen Howson

Branford Hubbard

Alexis Hubsky

Joshua Hughes 

Mary Hughes

Charles Hughey II

Owen Humphrey

Kristina Hunter

Rob Hunter

Cheryel Hutton

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