Source: https://www.mediainstitute.org/2014/05/09/much-ado-about-copyrights-making-available-right/
Timestamp: 2019-04-18 19:10:59+00:00

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Following hearings before the House Judiciary Subcommittee on Intellectual Property and the Internet on Jan. 14, 2014, Congress asked the Copyright Office to review and assess “the state of U.S. law recognizing and protecting ‘making available’ and ‘communication to the public’ rights for copyright holders.” See U.S. Copyright Office, Study of the Right of Making Available; Comments and Public Roundtable, 79 Fed. Reg. 10571 (Feb. 25, 2014); U.S. Copyright Office, Making Available Study. I submitted comments reiterating my view, explicated in “In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age, 59 J. Copyright Soc’y U.S.A. 1 (2011) and Section 8.11 of Nimmer on Copyright (which I co-authored), that the Copyright Act of 1976 imposes liability upon those who make copyrighted works available to the public without authorization of the copyright owner. Notwithstanding my view that Congress intended such reach, I recommended that Congress clarify the scope of the distribution right in view of dissensus in the courts. More importantly, I urged Congress to take up this clarification in conjunction with updating and rationalizing the statutory damages regime among other aspects of the Copyright Act in need of reform.
My comments noted that the confusion in judicial decisions reflected lack of awareness of the legislative background of the Section 106(3) distribution right as well as understandable judicial unease with the application of statutory damages in the Internet Age. As I have explored elsewhere,1 concern over outsize statutory damage awards in file-sharing and user-generated content platform cases has distorted statutory interpretation of other provisions of the Copyright Act and contributed to growing public disdain and disregard for the copyright system. I concluded by highlighting that statutory damages reform serves as the linchpin for a broad range of beneficial copyright reforms, including updating of Section 512, clarifying the making available right, addressing orphan works, creating a small claims process, clarifying fair use, and potentially other important issues.
the Menell article and the derivative Nimmer analysis contain a glaring and fatal flaw: they fail to account for importance of (1) the clear statutory limitation of the “distribution” right to distribution of “copies and phonorecords” of copyrighted works; (2) the clear statutory definitions of “copies” and “phonorecords” in Section 101 of the Copyright Act, which requires that they be “material objects”; and (3) the cardinal principle of statutory construction that a clear and unambiguous text of a statute supplies its meaning and governs its application without resort to elaborate and complicated analysis of legislative history.
The thrust of Mr. Bridges’ argument, stated on page 5 of his comments, is that Section 106(3) requires that a “material object” physically change hands. He reads the 1976 Act to be cemented in the largely analog age in which it was conceived. Thus, he states that while “Wal-Mart distributes a copyrighted work when it sells physical copies of a DVD or CD,” it “does not distribute copies or phonorecords of a work if it transmits the work for download or by stream.” Building on this construct, he concludes that a digital transfer such as a peer-to-peer file sharing – because it does not entail the physical transfer of a “material object” – falls entirely outside Section 106(3).
I wish to make three points: (1) My analysis comports with and addresses the statutory elements; (2) Mr. Bridges’ position is directly contradicted by the case law; and (3) legislative history is both appropriate and pertinent to this inquiry.
* * * Electronic transfers generally involve the reading of data at point A and the replication of that data at point B. Whenever that is true, one person might be stationed at point A and another at point B, obviating the need for a “hand-to-hand” transfer. Similarly, because the data at point A is not necessarily destroyed by the process of reading it, the person at point A might retain ownership over the original, forestalling the need for a “sale or other transfer of ownership,” as stated in § 106(3).
Clearly, that description accurately characterizes electronic file transfers. The internet makes it possible for a sending computer in Boston and a downloader in California to communicate quickly and easily; the physical distance between the two, as well as the purely electronic nature of the transfer, makes the movants’ argument attractive. But the “point A-to-point B” characterization is no less apt for an older technology, such as a fax transfer over a phone line. And it also applies to cases in which point A and point B are very close together – even in the same room. The movants’ argument thus pivots on the nature of the transfer, in which the copyrighted work is read by a machine, translated into data, transmitted (in data form), and re-translated elsewhere.
After carefully considering the parties’ and the EFF’s arguments, the Court concludes that 17 U.S.C. § 106(3) does reach this kind of transaction. First, while the statute requires that distribution be of “material objects,” there is no reason to limit “distribution” to processes in which a material object exists throughout the entire transaction – as opposed to a transaction in which a material object is created elsewhere at its finish. Second, while the statute addresses ownership, it is the newly minted ownership rights held by the transferee that concern it, not whether the transferor gives up his own.
The first point requires that the Court closely examine the scope of the distribution right under § 106(3). The statute provides copyright owners with the exclusive right “to distribute … phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” 17 U.S.C. § 106(3). In turn, phonorecords are defined in part as “material objects in which sounds … are fixed by any method.” Id. § 101. And as discussed above, in the sense of the Copyright Act, “material objects” should not be understood as separating tangible copies from non-tangible copies. Rather, it separates a copy from the abstract original work and from a performance of the work.
[T]he copyright owner [has] the right to control the first public distribution of an authorized copy or phonorecord of his work, whether by sale, gift, loan, or some rental or lease arrangement. Likewise, any unauthorized public distribution of copies or phonorecords that were unlawfully made [is] an infringement. As section 109 makes clear, however, the copyright owner’s rights under section 106(3) cease with respect to a particular copy or phonorecord once he has parted with ownership of it.
An electronic file transfer is plainly within the sort of transaction that § 106(3) was intended to reach. Indeed, electronic transfers comprise a growing part of the legitimate market for copyrighted sound recordings. What matters in the marketplace is not whether a material object “changes hands,” but whether, when the transaction is completed, the distributee has a material object. The Court therefore concludes that electronic file transfers fit within the definition of “distribution” of a phonorecord.
542 F. Supp. 2d at 170-74 (emphasis in original; footnotes and citations omitted).
When confronted with these facts at the Copyright Office’s May 5 Roundtable, rather than acknowledge these oversights, Mr. Bridges responded by criticizing Judge Gertner’s interpretation and advertising his services to potential clients wishing to overturn it.
Mr. Bridges also dismissed my interpretation of the statutory phrase “to distribute,” which is essential to whether the Copyright Act encompasses a “making available” right, solely on the ground that it would be entirely inappropriate to look beyond the “unambiguous” statutory text. Yet judges routinely consider the Copyright Act’s legislative history even when the words appear at first blush to be clear. Even common words can have multiple dictionary definitions. Furthermore, many provisions of the 1976 Act were crafted half a century ago during a largely analog era. Understanding the context can be useful in applying the Copyright Act in the digital age.
Turning directly to that “distribute” element, my analysis shows that the word “distribute” is amenable to several plausible dictionary meanings before adverting to the legislative history. It is there that we find clear explication of why Congress shifted from the 1909 formulation – “to publish” and “to vend” – to the 1976 Act phrase “to distribute.” The legislative history leaves no doubt as to why Congress made the change in phraseology. In the words of Abe Goldman, the Copyright Office’s general counsel during drafting of this language, the goal was to “broaden” the “publish” and “vend” rights. Edward Sargoy, the ABA’s representative to the working group, praised the shift in phrasing so as to avoid the jurisprudential confusion that had arisen over investive/divestive and general/limited publication.
Rather than address the substance of the evidence – from the express explanation for the shift in language through general legislative history about interpreting the statute broadly and flexibly to protect against the “real danger” of confining the “scope of the author’s rights on the basis of the present technology” in the face of “unforeseen technical advances” to the rich history surrounding the express 1971 amendment adopting the phrase “offering to distribute” – Mr. Bridges rejected pulling back the curtain to understand legislative intent.
Mr. Rick Sanders also questioned my exploration of legislative history, suggesting that it is improper to consult legislative history predating the enacting Congress. His assertion overlooks Supreme Court opinions in Kirtsaeng, Tasini, CCNV, Abend, Dowling, and Sony adverting to 1976 Copyright Act legislative history predating the enacting Congress.
In exploring the use of legislative history to interpret copyright law, I came across a brief filed 15 years ago in an important copyright case in which the author contended that the “plain language” of the statute was clear and governed, yet proceeded to invoke the statute’s legislative history more than 20 times. I commend that attorney’s use of what Mr. Bridges contends violates “the cardinal principle of statutory construction.” Who was that intrepid attorney? None other than Mr. Andrew Bridges, counsel to Diamond Multimedia. See RIAA v. Diamond Multimedia, 180 F.3d 1072 (9th Cir. 1999).
When confronted with this inconvenient fact at the May 5 Roundtable, Mr. Bridges responded that the Diamond Multimedia case dealt not with the Copyright Act of 1976 but the Audio Home Recording Act of 1992 (AHRA) and that the legislative history was pertinent in understanding the deletion of a Technical Reference Document from the statute that related to interpreting the Serial Copyright Management System referenced in the AHRA. This response does not explain why the “cardinal rule” would apply to the Copyright Act of 1976 but not the AHRA. Nor was Mr. Bridges’ “Technical Reference Document” deletion explanation forthright. His Diamond Multimedia brief draws liberally upon the AHRA legislative history to support many aspects of his argument, not merely the “Technical Reference Document” deletion. It remains only to add that the Ninth Circuit referred to the AHRA legislative history in correctly construing various aspects of the statute – in favor of Mr. Bridges’ client. So much for the contention that it is illegitimate – “a glaring and fatal flaw” – to resort to copyright law’s legislative history in understanding terms that are amenable to plain meaning.
But that was 1999. Perhaps things have changed. Just last week, the Supreme Court rendered a decision interpreting the word “exceptional” as it relates to awards of attorney fees under Section 285 of the Patent Act. See Octane Fitness, LLC v. ICON Health & Fitness, Inc., 2014 WL 1672251 (2014). Justice Sotomayor wrote for a unanimous Court, with the caveat that Justice Scalia did not join footnotes 1-3. The Court ultimately ruled that its “analysis begins and ends with the text of § 285.” What did those footnotes discuss? The statute’s legislative history. Thus, even when the Supreme Court is assessing statutory text that appears clear on its face and ultimately concludes that plain meaning applies, eight of the nine justices consider it appropriate and useful to review legislative history.
While the text and structure of the 1976 Act support our conclusion, the additional insights gleaned from systematic review of the legislative history reinforce that conclusion. Recognizing that some members of the Court do not regard legislative history as an appropriate source for determining legislative intent, we urge three propositions. First, the Congress of the 1960s and 1970s believed that its reports and hearings would be consulted in determining its intent. Second, the legislative record surrounding the 1976 Act is remarkable in its detailed analysis and transparency. Third, as discussed in Part IB, the drafters of the 1976 Act very much sought to establish a law that could stand the test of time. Congress struggled to reform the 1909 Act over many decades and saw the enactment of omnibus reform as a monumental achievement for the nation. Thus, even if skepticism may be warranted in approaching modern-day legislative history negotiated behind closed doors, such concerns are diminished or non-existent in the context of the 1976 Act materials resulting from open hearings involving the copyright experts of the day.
See Brief of Professors Peter S. Menell and David Nimmer as Amici Curiae in Support of Petitioners, American Broadcasting Companies, Inc. v. Aereo, Inc., No. 13-461 at p. 10, n.4 (2014). Thus, it is entirely appropriate and important for courts to consult legislative history in applying the 1976 Act in the digital age.
More importantly, Congress should undertake the task of updating the Copyright Act to better address the technological and societal changes that have unfolded over the past half-century. I urge those who participate in reform proceedings to approach this endeavor in the spirit of constructive engagement rather than vituperative attack. Having spent many hours poring over the voluminous transcripts of meetings that led to the 1976 Act, I can say that the participants managed a high level of decorum even as they vigorously debated controversial proposals.
1. See Peter S. Menell, This American Copyright Life: Reflections on Re-Equilibrating Copyright for the Internet Age, J. Copyright Soc’y U.S.A. (forthcoming 2014) (42nd Donald C. Brace Memorial Lecture); Peter S. Menell, Judicial Regulation of Digital Copyright Windfalls: Making Interpretive and Policy Sense of Viacom v. YouTube and UMG Recordings v. Shelter Capital Partners (May 1, 2012).
an electronic file transfer can constitute a “transfer of ownership” as that term is used in § 106(3). As noted above, Congress wrote § 106(3) to reach the “unauthorized public distribution of copies or phonorecords that were unlawfully made.” House Report at 62, reprinted in 1976 U.S.C.C.A.N. at 5676. That certainly includes situations where, as here, an “original copy” is read at point A and duplicated elsewhere at point B. Since the focus of § 106(3) is the ability of the author to control the market, it is concerned with the ability of a transferor to create ownership in someone else – not the transferor’s ability simultaneously to retain his own ownership.
542 F. Supp. 2d at 174 (footnote omitted).

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