Court Rejects Overstated First Amendment Challenge to Anti-Circumvention Rights

 On August 2, the U.S. Court of Appeals for the D.C. Circuit released a decision upholding the constitutionality of the anti-circumvention rights provisions in Section 1201 of the Digital Millennium Copyright Act (DMCA). At issue before the court in Green v. U.S. Department of Justice was a First Amendment facial challenge to Section 1201. The court's decision is an important vindication of the law that protects copyright owners from unlawful access to their intellectual property.

In the digital age economy, owners of valuable copyrighted media, including movies, TV shows, sound recordings, books, and images must be able to control who has access to their content. Section 1201 furthers that basic purpose, as I described in my February 2022 Perspectives from FSF Scholars, "D.C. Circuit Should Affirm the Constitutionality of Anti-Circumvention Rights":

Similar to how the law of trespass protects property owners against unauthorized access to their land, Section 1201 protects copyright owners against those who intentionally subvert TPMs in order to access their copyrighted content. Sections 1201(a) and 1201(b) prohibit the circumvention as well as the trafficking of services and devices that circumvent TPMs for controlling access to copyrighted content. Both provisions are directed toward technologies that are designed primarily to circumvent TPMs, have only limited commercially significant purposes other than circumventing TMPs, or are marketed or used in concert with a person with knowledge of intended use for circumventing TPMs.

During a prior appeal to the D.C. Circuit in Green, the Appellants raised both as-applied and facial First Amendment challenges to Section 1201. In a blog post titled "D.C. Circuit Affirms the Constitutionality of Anti-Circumvention Rights," I wrote about the court’s December 2022 decision that rejected as-applied challenges raised against Section 1201. In that instance, the court did not reach the merits of the facial challenge and remanded it to the trial court. Subsequently, the District of Columbia upheld the constitutionality of Section 1201. An appeal on the matter of the facial challenge was brought again before the D.C. Circuit, providing the occasion for the decision in Green that was issued on August 2.

 

In essence, the Appellants argued that Section 1201 was overbroad because it censors speech that is fair use of copyrighted works, and fair use is necessarily protected by the First Amendment. That is a thoughtful and clever argument, but as the D.C. Circuit wrote: "we disagree that the First Amendment necessarily shields all fair uses of copyrighted work from regulation." The court explained:  

The First Amendment protects a right to read, but it does not grant unimpeded access to every reading material a reader might wish for. Similarly, the First Amendment does not guarantee potential fair users unfettered or privileged access to copyrighted works they seek to use in their own expression. To hold otherwise would defy the First Amendment's solicitude of speakers' control over their own speech. See Harper & Row, 471 U.S. at 559 (noting that copyright serves the First Amendment value of the "right not to speak"). 

 

If every work that the public might wish to access "could be pirated away" via circumvention, soon nothing worth reading would be published electronically. Id. Plaintiffs' premise that fair users are entitled to make unauthorized use of copyrighted works assumes away the very entitlements copyright law validly protects. Consumers' access to copyrighted work routinely requires consent from the copyright owner- typically obtained by paying for access subject to certain limitations on use. 

As the court recognized, there might conceivably be instances in which Section 1201 or the denial of an exemption from its strictures could give rise to successful as-applied First Amendment challenges. But overwhelmingly that is not likely the effect of the law. The statute is not content-based and it does not favor or disfavor any particular viewpoints. Its purpose is to protect the valuable copyrighted property from unauthorized access. The D.C. Circuit's decision in Green v. U.S. Department of Justice, including its handling of the fair use issue, is thoughtful and reasonable. In upholding the constitutionality of anti-circumvention rights, the court gets it right once again. 

D.C. Circuit Affirms APA Reviewability of Copyright Exemptions Rules

On June 7, the U.S. Court of Appeals for the District of Columbia issued its decision in Medical Imaging & Technology Alliance v. Library of Congress. The case presents the question of whether copyright rules adopted under the Digital Millennium Copyright Act (DMCA) are reviewable under the Administrative Procedure Act (APA). In a 2-1 decision that brought to the fore the unusual structure and operation of the U.S. Copyright Office, the court answered "Yes."

The court's opinion was authored by Judge Neomi Rao. At issue in the case was a legal challenge to an exemption from the DMCA's anti-circumvention provisions that were granted by the Librarian of Congress following a triennial DMCA rulemaking. The exemption allowed for independent service operators to bypass technological protective measures (TPMs) on medical devices for purposes of diagnosis, modification, or repair of those devices. The Library of Congress disputed that its rulemaking was subject to APA review.

According to the D.C. Circuit:

In the Copyright Act [of 1976], Congress provided that copyright regulations are reviewable under the APA. The Act expanded the Register's rulemaking authority and provided that, with one exception not relevant here, "all actions taken by the Register of Copyrights under [Title 17] are subject to the provisions of the Administrative Procedure Act." 17 U.S.C. § 701(e). We have previously reviewed actions of the Register based on this provision. See, e.g., Atari Games Corp. v. Oman, 888 F.2d 878, 879 & n.1 (D.C. Cir. 1989); Universal City Studios LLLP v. Peters, 402 F.3d 1238, 1242 (D.C. Cir. 2005). Although section 701(e) refers to actions of the Register, the Register is subordinate to the Librarian and 'shall act under the Librarian's ... direction and supervision." 17 U.S.C. § 701(a). More specifically, "[a]ll regulations established by the Register under [Title 17] are subject to the approval of the Librarian of Congress." Id. § 702…

Congress conferred authority for the triennial rules at issue here in the DMCA, which added the following provision to Title 17: "[T]he Librarian of Congress, upon the recommendation of the Register of Copyrights, ... shall make the determination in a rulemaking proceeding" whether to waive the anti-circumvention provision for certain classes of copyrighted works. Id. § 1201(a)(1)(C). In other words, the DMCA authorized a new type of copyright regulation that would be formulated by the Register and approved by the Librarian. 

 

Reading the two statutes as a comprehensive statutory scheme, DMCA rules are also subject to the APA under 17 U.S.C. § 701(e). The Copyright Act plainly applies the APA to "all actions" of the Register under Title 17, including rulemaking subject to the approval of the Librarian. See id. §§ 701(e), 702…

The court concluded that because Congress applied the APA's waiver of sovereign immunity to actions of the register and Librarian in adopting copyright regulations it is immaterial as to whether the Library is an "agency" under the APA. As the court recognizes, the Copyright Office is peculiarly subordinated to the Librarian of Congress and deemed an "agency" of Congress. The court acknowledged that the Librarian's decisions about the Library's internal workings are not reviewable under the APA, and the court's ruling in the case was limited to the issue of copyright regulation. But the essentially executive character of the copyright regulation adopted by the Librarian on the recommendation of the Register of Copyrights was noted in a commendable section on judicial review of administrative agency action for conformity with the law: 

Reading section 701(e) to provide for judicial review of triennial DMCA rules aligns with fundamental principles regarding the protection of individual rights against unlawful government action. To begin with, the Copyright Act and the DMCA give the Register and Librarian significant authority to "promulgate copyright regulations" and "apply the statute to affected parties.” See Intercollegiate [Broadcast System, Inc. v. Copyright Royalty Board, 684 F.3d 1332,1342 (D.C. Cir. 2012)]. As we have recognized, and no party disputes, these powers are "generally associated in modern times with executive agencies.” Id. When enacting regulations and enforcing the law, "the Library is undoubtedly a component of the Executive Branch." Id. (cleaned up). Moreover, the triennial rules directly affect valuable property rights, such as a copyright holder’s ability to limit access to a digital creation and to prevent intellectual property theft. The triennial rules also provide exemptions from civil and criminal liability that would otherwise attach to individuals who circumvent technological protective measures. 17 U.S.C. §§ 1201(a)(1)(B), 1203–04. The exemptions are not left solely to the Librarian's discretion, but instead must be determined according to specific statutory criteria. Id. § 1201(a)(1)(C). There is no indication in the DMCA that Congress, having allocated this substantial regulatory power to the Librarian and Register and identified the legal criteria they must apply, would leave such power unchecked by judicial review. 

In sum, the court held that DMCA triennial rulemakings are subject to APA review. Judge Rao deserves credit for writing a well-reasoned and perceptive judicial opinion. 

Free State Foundation President Randolph May and I explored the structural history of the U.S. Copyright Office and its relationship with the Library of Congress in our book Modernizing Copyright Law for the Digital Age: Constitutional Foundations for Reform (Carolina Academic Press, 2020).

Court Decision Brings Clarity to the Law of Contributory Copyright Infringement

On October 16 of this year, the U.S. Court of Appeals for the 10th Circuit issued a significant decision regarding contributory liability for copyright infringement. In Greer v. Moon, the court concluded that the plaintiff-appellant sufficiently stated a claim for contributory copyright infringement against the defendant-respondents – a  website and its operator – by alleging that digital copies of a copyrighted book and a copyrighted music recording were posted on the website without authorization, the site refused to comply with a takedown notice, and that the site's conduct contributed to the infringement by encouraging the site's users to commit direct infringement.

Contributory liability is a form of secondary liability for copyright infringement, and it requires that a copyright owners show: (1) existence of a direct infringement; (2) a party's knowledge of the direct infringement; and (3) a party's contribution to the direct infringement by causing or materially contributing to it. 

The lower court had dismissed the plaintiff-appellant's infringement claims against the website and its operator on the grounds that merely permitting infringing material to remain on the site without having induced or encouraged "the initial infringement" is not enough to plead infringement based on contributory liability. 

 

However, the 10th Circuit concluded that the defendant-respondents' alleged conduct went beyond passive behavior in merely permitting infringing content to remain on the site. According to the court, a reasonable inference from the facts alleged is that the site's reposting of the plaintiff-appellant's copyright takedown notice – apparently to belittle the copyright owner and the notice as well as for acknowledge that the sites users would continue to engage in infringing activity – amounted to encouragement of the site's users to engage in direct infringement of the plaintiff-appellant's protected works. 

 

Importantly, the 10th Circuit determined that the lower court's insertion of "initial infringement" qualifier to making a claim contributory liability for infringement was improper. It wrote: "We cannot understand initial to be a literal requirement supported by applicable law, otherwise contributory infringement liability would rarely, if ever, lie for ongoing repeated infringements."

 

In Greer v. Moon, the 10th Circuit rightly rejected a would-be barrier to obtaining relief for contributory copyright infringement because it is unsupported by law. Unfortunately, courts in other cases have sometimes narrowed the scope of traditional secondary liability principles as applied in the context of Section 512 of the Digital Millennium Copyright Act (DMCA). Free State Foundation President Randolph May and I address this in our June 2020 Perspectives from FSF Scholars, "Copyright Office Report Should Spur Modernizing the DMCA." 

Congress Should Promote Copyright Protection Technologies

On December 20, 2022, Register of Copyrights Shira Perlmutter submitted to members of the Senate Subcommittee on Intellectual Property the U.S. Copyright Office's report on standard technical measures (STMs) under Section 512(i) of the Digital Millennium Copyright Act of 1998 (DMCA). The 118th Congress should take up the Copyright Office's recommendation to amend language Section 512(i) to facilitate adoption of STMs. 

Under the DMCA, an online platform receives legal immunity from copyright infringements on its websites, provided that it meets certain conditions. One such condition is that platform "accommodates and does not interfere with standard technical measures." STMs are technologies that are "used by copyright owners to identify or protect copyrighted works," that have been "developed pursuant to a broad consensus of copyright owners and service providers" in an "open, fair, voluntary, multi-industry standards process," that are made available on reasonable and non-discriminatory terms, and that do not impose substantial costs or burdens on online platforms.

But the problem with Section 512(i) is that it has never worked. As the Copyright Office's report acknowledges, no technology has ever been designated an STM under the law. Online platforms continue to receive the benefit of legal immunity for infringements on their sites without having to accommodate any STMs – because there are no STMs. 

In its report, the Copyright Office recommended that Congress amend Section 512(i) by: (1) clarifying that terms broad consensus and multi-industry "require substantial agreement, but not unanimity, and only of those industries directly affected by an STM"; (2) replacing "developed" with "designated" in order to confirm that they qualify if they're designated by broad consensus of copyright owners and online platforms, even if they originally were developed by a narrower subset of stakeholders or emerged through proprietary processes; and (3) list factors for weighing whether particular measure imposes substantial costs and burdens on service providers. The Copyright Office concluded that these amendments to the law could help facilitate Section 512(i) and thus give the provision a better chance at finally working. Congress should take up the Copyright Office's recommendation and make those changes to the law. 

 

The Copyright Office stopped short of recommending that Congress amend Section 512(i) by establishing an administrative process by which the Office would recognize designated technological measures (DTMs). Online platforms would be required to accommodate and not interfere with DTMs as a condition for receiving legal immunity for copyright infringement. Such an administrative process would serve as a supplemental or alternative approach to the current, unsuccessful voluntary process for STMs. The report raised staffing and resource concerns with a DTM process. 

 

But Congress shouldn't let the Office's report be the last word on DTMs. The idea of a establishing a DTM process within the Office has merit and deserves further attention by Congress. DTMs were the subject of my April 2022 Perspective from FSF Scholars, "SMART Act Would Help Prevent Online Copyright Infringement." The SMART Act, which was introduced in the Senate and in the House of Representatives last year, would have authorized the Copyright Office to recognize DTMs. The SMART Act ought to be reintroduced in the 118th Congress and hearings should be held on DTMs in order to give the proposal the full consideration that it deserves. 

"Hot Topics in Copyright Law & Policy" Video Now Available

 

Watch the YouTube video of the Free State Foundation's webinar on current legal and public policy issues in copyright, held July 28, 2022.

 

A panel of prominent copyright experts addressed copyright hot topics such as music royalties, the proposed American Music Fairness Act, needed Digital Millennium Copyright Act reform, problematic state legislation licensing of ebooks, and the American Law Institute's misguided Copyright Restatement project.

 

Participants were Jessica Richard – Vice President, Federal Public Policy, RIAA, Devlin Hartline – Legal Fellow, Hudson Institute's Forum for IP, and Adam Mossoff – Professor of Law, Antonin Scalia Law School, GMU. Free State Foundation Director of Policy Studies & Senior Fellow Seth Cooper moderated the discussion. FSF President Randolph May opened and closed the webinar.

 

Tweet: #FSFCopyright

Register Now! FSF Webinar on Copyright Law & Policy - July 28!

FSF Webinar on Copyright Law & Policy 

 

REGISTER NOW!

 

WHAT:  "Hot Topics in Copyright Law & Policy," a Webinar 

 

WHERE:  Via Zoom

 

WHEN:  Thursday, July 28 – 1:30 PM - 2:00 PM 

 

The Free State Foundation will host a webinar on current legal and public policy issues in copyright on Thursday, July 28, 1:00 – 2:30 p.m. EST via Zoom. 

 

A panel of prominent copyright experts will address copyright topics such as music royalties, DMCA reform, state legislation licensing ebooks, and ALI's Copyright Restatement project.

 

Confirmed Speakers Include:

 

Adam Mossoff – Professor of Law, Antonin Scalia Law School, GMU

 

Jessica Richard – Vice President, Federal Public Policy, RIAA

 

Devlin Hartline – Legal Fellow, Hudson Institute's Forum for IP

 

Additional speaker to be announced.



#FSFCopyright

 

REGISTER NOW!

Court Rejects Flimsy First Amendment Challenges to Copyright Anti-Circumvention Law

A Copyright Alliance blog post on September 2 by Devin Hartline calls attention to a July 15 courtroom defeat for parties challenging the anti-circumvention and anti-trafficking provisions contained in Section 1201 of the Digital Millennium Copyright Act (DMCA). In Green v. U.S. Department of Justice, the U.S. District Court for the District of Columbia denied a request for a preliminary injunction that would have enjoined enforcement of Section 1201. The Plaintiff's request was based on as-applied First Amendment challenges – which were rejected by the District Court.

In October 2020, Free State Foundation President Randolph May and I published a Perspectives from FSF Scholars paper titled "Congress Should Preserve Anti-Circumvention Rights: The Online Market for Movies and Music Depends on DMCA Section 1201." In that paper, FSF President May and I explained that the success of Internet-based services for accessing copyrighted music, movies, and TV shows depended on the maintenance of strong "anti-circumvention" rights that are secured under Section 1201. And we wrote that "Congress must preserve these rights so that copyright owners and service providers can continue to rely on encryption and password protection to give access to paying consumers while preventing unauthorized users from accessing content to which they are not legally entitled."

 

Our October 2020 Perspectives paper mentioned expressly mentioned a previous court decision in the Green case: 

[F]ederal courts have rejected broad-based First Amendment challenges to Section 1201, including challenges tied to alleged fair uses of copyrighted works. For example, in Green v. U.S. Department of Justice (2019) the U.S. District Court for the District of Columbia rejected pre-enforcement claims that Section 1201(a)'s anti-circumvention and anti-trafficking provisions are unconstitutionally overbroad and burden a substantial number of possible fair uses of copyrighted materials by third parties. The District Court in Green also rejected claims that the triennial rulemaking process constitutes a prior restraint on speech, as the process does not call for censorship based on content, viewpoint, or speaker identity. Like other District Court decisions, Green followed the Second Circuit's holding in Universal City Studios, Inc. v. Corley (2001) that Section 1201's anti-circumvention and anti-trafficking provisions implicate functional, non-speech aspects of computer codes used to circumvent TPMs, thus rendering those provisions content neutral. Corley held that Section 1201's prohibitions advance a substantial government interest in preventing mass digital piracy and it also held that interest is unrelated to the suppression of free expression. Green and other District Court decisions have followed Corley in this regard. 

As noted above, the District Court's July 2021 order addressed as-applied challenges that were not addressed by its June 2019 order. In short, the court rightly recognized – again – that Section 1201 furthers a substantial government interest in protecting copyrighted works on the Internet and it does not substantially burden more speech than necessary to accomplish that interest. For some solid analysis of the court's latest order, read Mr. Hartline's blog post.

Court Rules for Copyright Owners on Infringements by Streaming Music Service

Copyright owners of sound recordings secured a significant win in Atlantic Recording Corp. v. Spinrilla, LLC. The decision by the U.S. District Court for the Northern District of Georgia was issued on November 30. At issue in the case was an online streaming and downloading service offering mixtapes that in many instances contained copyrighted sound recordings. Plaintiff copyright owners filed infringement claims against Defendants Spinrilla and its owner involving 4,082 works. 

The District Court's decision in Spinrilla rightly recognized that an online service provider is liable for direct infringement for unauthorized Internet streaming of a copyrighted sound recording at the request of its user. In particular, the court determined that a sound recording constitutes a public performance of a copyrighted work. According to the court, the "reasoning and interpretation of the language and underlying purpose of the Copyright Act" – reflected in the U.S. Supreme Court's decision in ABC v. Aereo, Inc., 573 U.S. 431 (2014) – "apply equally to online music streaming services such as Spinrilla's and is consistent with a number of Circuit and district court decisions." The court also observed that "online music streaming services are not among the specific examples of activities the Aereo Court expressly noted fell outside the reach of its holding."

 

Although the Eleventh Circuit has not squarely addressed whether direct infringement claims require a copyright owner establish so-called "volitional conduct" by the alleged infringer, the court wrote that "even if volitional conduct is required to prove direct infringement, the cases on which Plaintiffs rely have all held that the affirmative act of streaming constitutes direct infringement of the copyright holder’s exclusive right of performance regardless of the fact that the the [sic] streaming occurs at the request of the user." 

 

Free State Foundation President Randolph May and I have addressed the issue of the volitional conduct requirement in infringement cases in two Perspectives from FSF Scholars papers: "The Constitutional Foundations of Strict Liability for Copyright Infringement" and "Volition Has No Role to Play in Determining Copyright Infringements."  In this case, the District Court's articulation of the doctrine – based on the assumption that it applies – appears reasonable.

 

Additionally, the District Court correctly concluded that an online service provider that seeks legal immunity from infringement claims under the Digital Millennium Copyright Act of 1998 must first register an agent for receiving takedown notices with the U.S. Copyright Office. Defendants in the case did not register their agent with the Copyright Office until after Plaintiffs filed their lawsuit, and so the Court determined the defendants were ineligible for DMCA safe harbors for the infringements. 

 

In June 2020, FSF President May and I addressed needed reforms to the safe harbors provision in our Perspectives paper "Copyright Office Report Should Spur Modernizing the DMCA."

 

The District Court in Spinrilla has yet to make a judgment on damages. 

House Judiciary Committee to Review Report on DMCA's Section 512

On September 30 at noon EST, the U.S. House Judiciary Committee will hold a hearing on "Copyright and the Internet in 2020: Reactions to the Copyright Office's Report on the Efficacy of 17 U.S.C. § 512 After Two Decades."   

Free State Foundation President Randolph May and I addressed the need for updating Section 512 of the Digital Millennium Copyright Act in our new book, Modernizing Copyright Law for the Digital Age - Constitutional Foundations for Reform. Section 512 includes a "notice-and-takedown" provision that allows complying online platforms to receive safe harbor from legal liability when their users upload copyrighted content to their websites. We offered further analysis of this topic -- and the findings of the U.S. Copyright Office -- in our June 2020 Perspectives from FSF Scholars paper, "Copyright Office Report Should Spur Modernizing the DMCA." As our Perspectives paper stated: 

The Copyright Office's report is a helpful starting point for legislative reforms needed to better protect movies, TV shows, sound recordings, and other content from infringements that cost U.S. copyright owners hundreds of millions of dollars each year. A series of amendments to Section 512 are needed to correct court decisions that have put undue burdens on copyright owners, departed from common law standards for secondary liability, and reduced accountability of online service providers for infringing content posted by users of their sites.

…

The sweeping number of changes that ought to be considered to modernize Section 512 makes a strong case for a legislative overhaul of the DMCA. Congress should exercise its prerogative to explore reforms beyond those contained in the report, consistent with the Constitution's entrusting Congress with the power to secure copyrights. Such reforms should include, for instance, a more widespread "notice and stay down" requirement when copyright owners submit formal takedown notices and future postings of that same infringing content are posted on the same sites.

For more details, check out our new book and our Perspectives paper.

Tennessean Op-Ed on Modernizing Copyright Law for the Digital Age

Free State Foundation President Randolph May and I today published an op-ed in The Tennessean titled "Three Ways to Modernize Copyright Laws in the Digital Age." The just-published op-ed touches on themes we addressed in more detail in our new book, Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform(Carolina Academic Press 2020). Our thanks go to The Tennessean for publishing our op-ed. Be sure to check it out at The Tennessean's website. Our new book is available both in print and e-book editions. 

Teleforum on Modernizing Copyright Law - Audio Available

On March 31, Free State Foundation President Randolph May and I participated in a Federalist Society teleforum to discuss themes from our new book Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform. The discussion ranged from DMCA reform, small copyright claims relief, AM/FM terrestrial radio's exemption, and the natural rights basis for copyrights. Audio for that teleforum can now be downloaded or streamed from the Federalist Society's website. Our thanks go to the Federalist Society, to moderator Prof. Adam Mossoff, and to teleforum participant Vice Dean and Prof. Michael Risch. Our new book is now available for purchase at Amazon and at Carolina Academic Press. 

New Book: "Modernizing Copyright Law for the Digital Age"

In Modernizing Copyright Law for the Digital Age: Constitutional Foundations for Reform, Randolph May and Seth Cooper connect constitutional principles and historical insights to recommendations for updating U.S. copyright law to meet the challenges of the Digital Age.

Copyright owners and copyright-intensive industries are vital engines of prosperity in our Digital Age economy. But current U.S. copyright law fails to protect adequately copyrighted works from infringement enabled by modern-day digitization and Internet connectivity. The law needs updating to curb the billions in economic losses caused annually by bad actors in America and abroad.

In reforms grounded in constitutional principles, Modernizing Copyright Law for the Digital Age addresses areas such as international trade, public contracts, private contracts, compulsory licensing and rate regulation, antitrust, and so-called moral rights. This timely book details steps that Congress should consider for updating copyright policy in hot-topic areas, including music royalties, Copyright Office reform, civil enforcement, criminal enforcement, and international protections.

The book is now available from Amazon here or from Carolina Academic Press here.

Congress Should Modernize Civil Copyright Enforcement for the Digital Age

Online infringement of copyrighted content – including sound recordings and motion pictures – is pervasive on popular Internet-based user-upload services. Numerous and repeated instances of infringement on sites such as YouTube deprive copyright owners of their exclusive right to the proceeds of their property and creative labors.

In our Perspectives from FSF Scholars paper “Modernizing Civil Copyright Enforcement for the Digital Age Economy: The Need for Notice-and-Takedown Reforms and Small Claims Relief,” FSF President Randolph May and I make the case for why Congress should update civil enforcement provisions regarding online infringements of copyrighted content.

In particular, the Digital Millennium Copyright Act of 1998 (“DMCA”) needs to be revised in order to keep pace with the last two decades of changes in Internet technology and online user habits. Among other things, the DMCA’s Section 512 “notice and takedown” provision should be updated in order to provide copyright owners with more efficient means for enforcing their exclusive rights and combating online infringement. Also, Congress should establish a U.S. Copyright Office-administered small claims court to resolve disputes over takedowns of infringing online content and other low-value infringement matters.

Read our paper for more. Also consider the principles and policies for copyright reform that we discuss in several other Perspectives from FSF Scholars papers on intellectual property (IP):

• Randolph J. May and Seth L. Cooper, “The Logic of International Intellectual Property Protection,” Perspectives from FSF Scholars, Vol. 11, No. 3 (January 13, 2016).
• Randolph J. May and Seth L. Cooper, “The Public Contract Basis of Intellectual Property Rights,” Perspectives from FSF Scholars, Vol. 11, No. 13 (April 19, 2016).
• Randolph J. May and Seth L. Cooper, “Liberty of Contract and the Free Market Foundations of Intellectual Property,” Perspectives from FSF Scholars, Vol. 11, No. 27 (July 29, 2016).
• Randolph J. May and Seth L. Cooper, “Intellectual Property Rights and Compulsory Licensing: A First Principles Approach to Reform,” Perspectives from FSF Scholars, Vol. 11, No. 39 (November 11, 2016).
• Randolph J. May and Seth L. Cooper, “The Common Purposes of Intellectual Property and Antitrust: Promoting Creative and Innovative Output,” Perspectives from FSF Scholars, Vol. 12, No.19 (June 6, 2017).
• Randolph J. May and Seth L. Cooper, “Modernizing the Copyright Office for the Digital Age Economy,” Perspectives from FSF Scholars, Vol. 12, No. 37 (October 30, 2017).
• Randolph J. May and Seth L. Cooper, “Unalienable Rights and Alienable Intellectual Property: Why ‘Moral Rights’ Should Not Be Imported into U.S. Copyright Law,” Perspectives from FSF Scholars, Vol. 12, No. 46 (December 11, 2017).

A Day to Remember Our Constitution's Protections for IP Rights

On Constitution Day – September 17 – we celebrate the framers signing of America’s written fundamental law. Among its sections and clauses, the Constitution’s provision for intellectual property (IP) rights deserves renewed appreciation by the public and support by Congress. Stronger security for IP rights enhances our economic climate and fulfills an important constitutional obligation.

Copyrighted works and patented inventions increasingly are vital to our nation’s prosperity in today’s digital Internet-connected global economy. A report by the U.S. Department of Commerce found that value added to our economy by copyright- and patent-intensive industries totaled approximately $1.8 trillion in 2014, amounting to about 10.6% of the U.S. gross domestic product. Also, jobs supplied by copyright-intensive industries totaled 5.6 million in 2014, while patent-intensive industries provided 3.9 million jobs.

The vibrant growth in IP’s value to our economy has been driven by digital technology and Internet connectivity. However, modern means of production and distribution also render IP vulnerable to online theft and infringement. Although often overlooked, the Constitution entrusts Congress with the responsibility to meet such challenges and ensure the security of copyrights and patent rights. The conceptual and historical backdrop of that responsibility are examined in the book, The Constitutional Foundations of Intellectual Property: A Natural Rights Perspective, that I co-authored with Free State Foundation President Randolph May.

Logically, IP rights reflect the natural rights principle that a person has a right to the proceeds of his or her own labors. Those proceeds are a person’s private property, deserving protection by equal laws. Historically, this natural rights and property rights understanding of copyrights and patents prevailed in the newly independent American states. By the time the framers met for the Philadelphia Constitutional Convention in 1787, twelve of the thirteen former colonies had adopted state copyright laws, and a few provided patent protections for inventors.

James Madison concluded that the lack of uniformity of among state copyright laws was a vice that needed to be remedied. Other framers in Philadelphia agreed. The Constitution’s Article I, Section 8, Clause 8 — the intellectual property (IP) clause — grants Congress the power “to promote the Progress of Science and Useful arts, by securing, for limited Times, to Authors and Inventors, the exclusive Right to their respective Writings and Discoveries.” As Madison observed in Federalist No. 43, conferring on Congress the power to protect copyrights and patent rights would be highly useful to individual authors and inventors and also serve the public good.

The First Congress to convene under the Constitution promptly exercised its constitutional power to secure copyrights and patent rights. In addition to establishing a system of taxes and revenues, setting up the federal judiciary, selecting the permanent capital site, and drafting the Bill of Rights, the First Congress passed the Copyright and Patent Acts of 1790. Both acts were signed by President George Washington. Those landmark laws set IP on a free market footing by expressly recognizing authors’ and inventors’ exclusive rights to contract for the sale or licensed use of their writings and inventions. The Copyright and Patent Acts of 1790 also provided civil rights of action for creators and inventors whose protected works or inventions were infringed.

In the nearly two hundred fifty years that have followed, Congress has intermittently exercised its constitutional power to further secure IP rights. Drawing upon natural rights and property rights principles, statesmen such as Daniel Webster and Henry Clay helped pass the first substantial revisions of the Copyright and Patent Acts in the 1830s. Also cognizant of natural rights and property rights principles, in 1891 the Centennial Congress secured copyright protection for foreign authors in order to ensure American authors were treated equitably overseas. In 1897, Congress made willful infringement of certain copyrighted works a crime subject to federal prosecution. And through subsequent legislation by Congress, the scope of copyright protections has expanded beyond books and engravings to include unauthorized reproductions or public performances of motion pictures and digital sound recordings. Likewise, the scope of patent protections now includes inventive designs as well as manufacturing and other production processes that embody the latest digital technologies.

Bearing those constitutional, historical, and economic considerations in mind, there is work ahead for Congress that is essential to securing American IP rights in the Digital Age:

• Inexplicably, current federal copyright law does not provide public performance copyright protections in sound recordings made before 1972. Congress should pass legislation guaranteeing that copyright holders have the same right to receive royalty payments for public performances of pre-72 sound recordings as for performances of later recordings.

• The effectiveness of Digital Millennium Copyright Act of 1998’s “notice and takedown” process for removing infringing music and other content from the Internet has been undermined by two decades of technological advances and changes in user habits. To better protect the value of creative artists’ copyrighted content from massive online infringement activity, Congress should revise and update the DMCA.

• The Copyright Office’s capabilities are outdated. Only limited online searching for copyright registration records is available and online searching for recorded copyright title transfer is unavailable. Congress should pass legislation to modernize and restructure the Copyright Office. It should give the Register of Copyrights the independence necessary to make technology upgrades and to establish a comprehensive searchable online database of copyright records. Upgrading the Office’s capabilities will reduce parties’ compliance costs and enhance the economic value of copyrighted works.

• Steep losses to the U.S. economy caused by overseas piracy of IP need to be curtailed. A 2017 report by the bipartisan IP Commission calculated that counterfeit goods, pirated software, and trade secret theft cost our economy between $225 and $600 billion annually. Congress should urge the Trump Administration to include strong IP rights enforcement provisions in foreign trade negotiations, and proposed treaties that contain such provisions should be ratified and supported by implementing legislation.

As we reflect on our Constitution’s origin as well as its guarantees for representative government and individual freedoms, we should not forget the wisdom of the framers in including the protection of copyrights and patent rights in our nation’s fundamental law. Congress should vigorously pursue its constitutional responsibility to secure IP rights and put our nation’s economy on the strongest possible footing for the Digital Age.