Source: http://www.copyhype.com/2012/11/
Timestamp: 2014-03-09 11:37:43
Document Index: 474106906

Matched Legal Cases: ['§ 801', '§ 106', '§ 109', '§ 602', '§ 106', '§ 501', '§ 6', '§ 12']

November, 2012 | Copyhype
November 28, 2012 · Terry Hart · 2 comments	The House Judiciary Committee will be holding a hearing on music licensing today at 11:30EST. The hearing, which will be streamed live online, looks to focus on recent proposed legislation that concerns internet radio royalties. Representatives from Pandora, the National Association of Broadcasters, SoundExchange, and the Recording Academy will be testifying, as well as economist Dr. Jeffrey A. Eisenach and venture capitalist David B. Pakman.
This changed somewhat in 1995, when Congress passed Digital Performance Right in Sound Recordings Act (DPRA). Though it didn’t give sound recording owners a full public performance right, it did give them the exclusive right “to perform the copyrighted work publicly by means of a digital audio transmission.”1
Any other type of transmission under DPRA required direct licensing from sound recording owners, which led to the first dispute. Non-subscription webcasters — webcasters who relied on advertising or other forms of revenue — disagreed with the recording industry over whether they were exempt from DPRA.2 This led to Congress revisiting the digital performance right in the Digital Millennium Copyright Act (DMCA) a few years later (the same Act that created safe harbors for online intermediaries, among other things).
One quick note: the DMCA also expanded the term “interactive service” to include services “that are specially created for a particular individual.”3 In 2001, a group of record labels then under the umbrella of BMG sued internet radio provider Launch Media for copyright infringement, alleging that its service, which, like Pandora, allows listeners to create “custom” radio stations based on genre or artist, was required to obtain direct licenses from BMG because it was an “interactive service” under the DMCA.4 The 2nd Circuit disagreed with the labels, holding that Launch Media was not an “interactive service” under the definition of the statute.
The Copyright Office announced in November 1998 the beginning of the voluntary negotiation period for the first round of licensing, which would cover through the end of 2000.5 No private agreement was reached, so a CARP proceeding was commenced, and, because of procedural delays, was consolidated with a proceeding on licensing for the next period, through 2002.
The CARP reached its determination on royalty rates February 2002 (informally referred to as “Webcaster I”), which was revised and published by the Librarian of Congress on July 8, 2002.6 Among its determinations, the LOC accepted the Panel’s rejection of a “percentage of revenue” rate in favor of a “per performance” rate. It noted:
A key reason for rejecting the percentage-of-revenue approach was the Panel’s determination that a per performance fee is directly tied to the right being licensed. The Panel also found that it was difficult to establish the proper percentage because business models varied widely in the industry, such that some services made extensive music offerings while others made minimal use of the sound recordings. The final reason and perhaps the most critical one for rejecting this model was the fact that many webcasters generate little revenue under their current business models. As the Panel noted, copyright owners should not be ‘‘forced to allow extensive use of their property with little or no compensation.’’7
The LOC adopted the Panel’s tiered rate structure for different classes of licensees. Webcasters and commercial broadcasters would pay $0.0007 per performance, non-commercial broadcasters $0.0002. The LOC also designated SoundExchange, a non-profit organization established by the RIAA in 2000 and later spun-off as an independent entity in 2003, as a Designated Agent for collecting and distributing royalties under the compulsory license.8
Through this Act, Congress also replaced the ad hoc Copyright Arbitration Royalty Panel with the current system of three standing Copyright Royalty Judges. Judges were to be appointed by the Librarian of Congress and serve staggered six year terms. The Act established qualifications for the Judges. “Each judge must be an attorney with at least seven years of legal experience. The Chief Copyright Royalty Judge must have at least five years experience in administrative hearings or court trials and may hire 3 full-time staff members. Of the other two CRJs, one must have expertise in the area of copyright law and the other economics.”9
The first rate determination proceeding for digital performances conducted by the new Copyright Royalty Board (CRB) concerned license rates for 2006-2010, but despite the changes Congress had made, this proceeding (“Webcaster II”) played out in much the same way as Webcaster I. Notice announcing commencement of the proceedings was published by the CRB February 2006. The Board announced its final determination on March 2007.10 Again, the CRB rejected a percentage of royalty rate for a per performance rate.11
Several webcasters again raised objections to the rate determinations in Webcaster II. A petition for rehearing was filed but denied by the CRB, and appeals were filed by several parties for review in the DC Circuit Court. In a 2009 opinion, the DC Circuit affirmed nearly all of the CRB’s determination.12
And as in Webcaster I, webcasters turned to Congress, which responded with the Webcaster Settlement Act of 2008.13 The Act was essentially a rewrite of the Small Webcaster Settlement Act of 2002 and encouraged the private negotiation of alternative licensing rates. The timeframe for these negotiations was extended by Congress the following year through the Webcaster Settlement Act of 2009.14
Following these Settlement Acts, settlements with webcasters in a wide variety of segments of the webcasting market were reached — eight total agreements resulting in around a dozen different royalty schedules.15 The “Pureplay” agreement, for example, which Pandora operates under, set a per play rate lower than the one set by the CRB or 25% of gross revenues, whichever is greater. In nearly all cases, these agreements set royalty rates through 2015.
The CRB rejected, however, Intercollegiate’s proposal for different rate structures for “small” and “very small” noncommercial webcasters. Intercollegiate appealed the CRB’s determination to the DC Circuit and also raised a collateral attack on the constitutionality of the appointment of the Copyright Royalty Judges. Just this past July, the DC court held (wrongly, in my opinion) that the appointment of Copyright Royalty Judges violated the Appointments Clause.16 It remedied the infirmity by striking statutory language that limited the ability of the Librarian of Congress to remove Judges and vacated Webcaster III. The existing settlement agreements were unaffected by this decision.
§ 801(b)(1) was created as part of the Copyright Act of 1976. Draft bills establishing the agency to administer the new statutory licenses created by the Act originally provided only that the rates be “reasonable.”17 Some concerns were raised about the constitutionality of delegating rate-setting authority under such a vague standard. In response, Congress added four factors to guide the setting of rates. Prior to the DPRA, the Copyright Royalty Tribunal — the precursor to the CARP — had only applied this standard in two other proceedings: the 1980 Jukebox License Proceeding and the 1981 Mechanical License Proceeding.
Footnotes17 USC § 106(6). [↩]In the matter of rate setting for digital performance right in sound recordings and ephemeral recordings, Report of the Copyright Arbitration Royalty Panel, No. 2000-9, 8 (2002). [↩]H.R.Rep. No. 105-796, at 87 (1998) (Conf.Rep.). [↩]Arista Records v Launch Media, 578 F.3d 148 (2nd Cir. 2009). [↩]67 FR 45239. [↩]Id. [↩]Id. at 45249. [↩]Id. at 45267. [↩]Robin Jeweler, CRS Report Report for Congress, The Copyright Royalty and Distribution Reform Act of 2004, Order code RS21512 (2004). [↩]72 FR 24084. [↩]In doing so, the CRB stated in a footnote:
It must be emphasized that, in reaching a determination, the Copyright Royalty Judges cannot guarantee a profitable business to every market entrant. Indeed, the normal free market processes typically weed out those entities that have poor business models or are inefficient. To allow inefficient market participants to continue to use as much music as they want and for as long a time period as they want without compensating copyright owners on the same basis as more efficient market participants trivializes the property rights of copyright owners. Furthermore, it would involve the Copyright Royalty Judges in making a policy decision rather than applying the willing buyer/willing seller standard of the Copyright Act. [↩]Intercollegiate Broadcasting System v Copyright Royalty Board, 574 F.3d 748. The exception was the court’s remand of the CRB’s omission of a cap on minimum fees for commercial webcasters. [↩]Pub. L. No. 110-435, 122 Stat. 4974. [↩]Pub.L. 111−36, 123 Stat. 1926. [↩]See Notification of Agreements Under the Webcaster Settlement Act of 2008, 74 FR 9293 (March 3, 2009), Notification of Agreements Under the Webcaster Settlement Act of 2009, 74 FR 34796 (July 17, 2009), Notification of Agreements Under the Webcaster Settlement Act of 2009, 74 FR 40614 (August 12, 2009. [↩]Intercollegiate Broadcasting v Copyright Royalty Board, 684 F.3d 1332 (DC Cir. 2012). [↩]73 FR 4080. [↩]	Posted in: Copyright news · 2 comments
Simon Helm, Intellectual Property in Transition Economies: Assessing the Latvian Experience, 14 Fordham Intellectual Property Media & Entertainment Law Journal 119, 201 (2003), “An example is the Copyright Board in Canada. Invested with quasi-judicial powers, the Copyright Board functions as an arbitral tribunal, and its decisions have the effect of superior court judgments. Under the Canadian model, collective rights administrative societies are required to submit an annual tariff, which is then published. The Copyright Board has jurisdiction to receive submissions from interested parties in relation to the proposed tariff and to make any amendments to the tariff that it considers necessary. Canadian law also sets tariffs for wireless broadcasters based upon their advertising revenues. In cases where an individual license cannot be agreed between the collective rights administration society and a user, the Canadian scheme provides for the submission of the dispute to the Copyright Board for resolution.” [↩]	Posted in: Copyright news · 1 comment
November 08, 2012 · Terry Hart · Comments Off	If you get confused reading about Kirtsaeng v John Wiley & Sons, the Supreme Court case argued last week involving copyright’s importation provisions and the first sale doctrine, you are not alone. Resolving the issue requires wading through a morass of interdependent statutory provisions. Add previous Supreme Court precedent, and you end up with, in the words of Chief Justice Roberts, “an awfully difficult maze.”
The first sale doctrine, codified in 17 USC § 109(a), gives the owner of a particular copy the ability “to sell or otherwise dispose of the possession of that copy.” The argument in Kirtsaeng treats this language as including the ability to import a particular copy, so how this language interacts with § 602′s prohibition on importation of copies “that have been acquired outside the United States” turns on how the Supreme Court chooses to interpret the phrase “lawfully made under this title” in the first sale doctrine.
The second situation covered by section 602 is that where the copies or phonorecords were lawfully made but their distribution in the United States would infringe the U.S. copyright owner’s exclusive rights. As already said, the mere act of importation in this situation would constitute an act of infringement and could be enjoined.1
The terms of Section 109(a) are quite broad: they allow any owner of a copy made lawfully under U.S. copyright law (and it is undisputed that Quality King is such a person) to sell “or otherwise dispose of the possession” of that copy. As this Court has noted, “‘the expression ‘dispose of’ is very broad, and signifies more than ‘to sell.’ Selling is but one mode of disposing of property.’” And as even the Government notes, the term “dispose of” means, among other things, “to transfer,” –a meaning that is plainly broad enough to include the act of transporting from one country to another. Section 109(a) was plainly intended to immunize more activities than those listed in Section 106(3) itself, and importation is a principal example of such an activity. A disposal of possession of any article could include the article’s transport, delivery, export or import, and there is no exception to Section 109(a) when an importation is part of the transaction by which a lawfully obtained article is “disposed of.” Moreover, very few situations covered by Section 602(a) would not entail selling or disposing of the possession of the imported item–whether to a shipper or the ultimate recipient–and there is no allegation that this case presents such a situation.
As noted above, this argument has not been made by any of the parties in Kirtsaeng v John Wiley & Sons. And it’s doubtful it would have been successful even if it had been made, as it would require overturning, at least in part, Quality King — a unanimous decision. While the Supreme Court can overturn its own prior rulings, it is rare.2
FootnotesH.R. No. 94-1476, 169 (1976). [↩]See Planned Parenthood v Casey, 505 US 833, 854-55 (1992), discussing four factors that should guide the Court when it is deciding whether to overturn a prior holding. [↩]	Posted in: Copyright news · Comments Off
November 06, 2012 · Devlin Hartline · 1 comment	Today’s guest post comes from Copyhype contributor Devlin Hartline.
On its face, the Copyright Act provides that copyright owners actually have two separate sets of rights. Section 106 of the Act gives copyright owners the exclusive rights “to do” and “to authorize” certain listed activities with their copyrighted works, including creating reproductions, making adaptations, distributing copies to the public, publicly performing them, and publicly displaying them.1 It’s clear enough what it means “to do” any of those listed activities, but what does it mean “to authorize” them? Moreover, does merely authorizing someone else to infringe lead to liability even if that party doesn’t actually infringe?
Section 501 of the Act provides that “[a]nyone who violates any of the exclusive rights of the copyright owner” is an infringer.2 It matters not whether they violated the exclusive right “to do” or “to authorize” the listed activity. Either way it’s infringement and they’re an infringer, subject to the full range of remedies under the Act. Nonetheless, as the Supreme Court has noted, distinguishing between different types of infringement is not always easy since “the lines between direct infringement, contributory infringement, and vicarious liability are not clearly drawn.”3
Under the 1909 Copyright Act, courts “came to mixed conclusions about how much involvement in infringing was necessary to subject a defendant to liability for an infringement.”4 The doctrinal disarray was not helped by the fact that the previous Act “did not specifically state that the copyright holder had the exclusive right to authorize use” of the copyrighted work.5 But that all changed with the addition of the right “to authorize” in the 1976 Copyright Act, which “was intended to remove the confusion surrounding contributory and vicarious infringement.”6
The exclusive rights accorded to a copyright owner under section 106 are ‘to do and to authorize‘ any of the activities specified in the five numbered clauses. Use of the phrase ‘to authorize’ is intended to avoid any questions as to the liability of contributory infringers. For example, a person who lawfully acquires an authorized copy of a motion picture would be an infringer if he or she engages in the business of renting it to others for purposes of unauthorized public performance.7
The reason it matters is because direct infringers are always liable to the copyright owner, while indirect infringers are only liable if the authorized infringement actually occurs.8 Thus, if the exclusive right “to authorize” is in fact merely a codification of existing secondary liability doctrines, then one who authorizes an infringement has no liability unless the party authorized actually infringes. On the other hand, if the exclusive right “to authorize” stands alone, then mere authorization of an infringement is itself infringement—even if the party authorized doesn’t actually infringe.
In his influential copyright treatise, Nimmer posits that a “far more perplexing question is whether direct infringement must even exist in order for third-party liability to arise.”9 He thinks that reading the Act to create liability for mere authorization without actual infringement is “overly facile,” and that “to authorize” should be seen as “simply a convenient peg on which Congress chose to hang the antecedent jurisprudence of third-party liability.”10 He concludes that “the rule should generally prevail that third party liability, as its name implies, may exist only when direct liability, i.e., infringement, is present.”11
A few district courts have disagreed with Nimmer and found that the right “to authorize” stands alone. For example, one district court stated that “Congress created a new form of ‘direct’ infringement” when the Act was amended to add the right “to authorize.”12 Another district court stated that “tying the authorization right solely to a claim of justiciable contributory infringement appears contrary both to well-reasoned precedent, statutory text, and legislative history.”13 That court held that merely authorizing infringing acts could itself constitute direct infringement.
A different district court followed suit and stated that Section 106 should be read literally to create an independent, exclusive right “to authorize” use of a copyrighted work.14 That court held that “mere authorization . . . constitutes direct infringement and is actionable under United States Copyright Law.”15 And in yet another district court, it was held that infringement commences at the moment that authorization occurs, because “the right ‘to authorize’ infringing acts” was itself “a right newly recognized by Congress.”16 But these four district courts represent the minority view, and no appellate court that I could find has ever agreed.
In fact, the appellate courts that have addressed the issue have instead agreed with Nimmer, as have the district courts that have cited them. In a leading case, the Ninth Circuit stated that “the addition of the words ‘to authorize’ in the 1976 Act appears best understood as merely clarifying that the Act contemplates liability for contributory infringement . . . .”17 The court of appeals quoted Nimmer for the proposition that Congress was merely codifying the preexisting “jurisprudence of third party liability.”18 Accordingly, the appellate court found that the authorization right is only implicated in cases of contributory infringement, i.e., where there is also direct infringement.
The First Circuit took a similar tack while addressing the issue of whether authorization is infringement “where there is no adequate proof that the third party ever undertook an infringing act.”19 The court of appeals noted that “most (perhaps all) courts that have considered the question have taken the view that a listed infringing act (beyond authorization) is required for a claim.”20 While acknowledging that “the better bare-language reading would allow” a claim for mere authorization, the appellate court nonetheless held that there must be proof “of an infringing act after the authorization.”21
The district court in the famous Jammie Thomas-Rasset case considered whether merely “making available” song files in a peer-to-peer share folder violated plaintiffs’ exclusive right “to authorize” distributions. (This was in addition to its consideration of whether Thomas-Rasset violated plaintiffs’ exclusive right “to do” distributions, as I wrote about previously.) After surveying the statutory text, case law, and legislative history, the district court concluded that “the authorization clause merely provides a statutory foundation for secondary liability, not a means of expanding the scope of direct infringement liability.”22 Moreover, said the district court, “the authorization right . . . only applies if there is an actual dissemination.”23
Footnotes17 U.S.C.A. § 106 (West 2012) (“the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending; (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly; (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.”). [↩]17 U.S.C.A. § 501 (West 2012). [↩]Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 435, n.17 (1984) (internal quotations omitted). [↩]Peter Starr Prod. Co. v. Twin Cont’l Films, Inc., 783 F.2d 1440, 1443 (9th Cir. 1986). [↩]Id. (emphasis in original). [↩]Id. [↩]H.R. REP. 94-1476, 61. [↩]See, e.g., 1 Goldstein, Copyright: Principles, Law and Practice § 6.1, at 705 (1989) (“It is definitional that, for a defendant to be held contributorily . . . liable, a direct infringement must have occurred.”). [↩]3-12 Nimmer on Copyright § 12.04[D][1]. [↩]Id. [↩]Id. [↩]ITSI T.V. Productions, Inc. v. California Auth. of Racing Fairs, 785 F.Supp. 854, 860 (E.D. Cal. 1992). [↩]Curb v. MCA Records, Inc., 898 F. Supp. 586, 594 (M.D. Tenn. 1995). [↩]Expediters Int’l of Washington, Inc. v. Direct Line Cargo Mgmt. Services, Inc., 995 F. Supp. 468, 476 (D.N.J. 1998). [↩]Id. at 477. [↩]Thomas v. Pansy Ellen Products, Inc., 672 F. Supp. 237, 241 (W.D.N.C. 1987). [↩]Subafilms, Ltd. v. MGM-Pathe Communications Co., 24 F.3d 1088, 1093 (9th Cir. 1994). [↩]Id. (internal quotations and brackets omitted). [↩]Venegas-Hernandez v. ACEMLA, 424 F.3d 50, 57 (1st Cir. 2005). [↩]Id. at 57. [↩]Id. at 59. [↩]Capitol Records, Inc. v. Thomas, 579 F.Supp.2d 1210, 1221 (D. Minn. 2008). [↩]Id. at 1223. [↩]	Posted in: Copyright history · 1 comment