I was pleasantly surprised at all the attention my last blog garnered. Turns out it wasn’t all about my brilliant writing or instant blog fame, but instead it turned out that I had fortuitously written about the idea of a small claims court for copyright infringement right at the same time that the U.S. House of Representatives Subcommittee on Courts, Intellectual Property and the Internet was holding a hearing on copyright damages. The idea of a small claims court, which would allow individual songwriters, photographers, and other creators to have a chance at enforcing their copyright claims without going broke over court costs and attorneys’ fees, is to a certain extent tied up in the debate over the appropriateness of statutory damages awards (which would be severely curtained in a small claims setting), but Nancy Wolff said in the hearing, and she was quite right, that the issues were being overly conflated. I’ve watched the proceedings now, and it certainly appears as if the subcommittee is in favor of the idea of at least a pilot small claims court. More interestingly, the subcommittee seemed to think not much of at all of the testimony of the representatives from the Computer and Communications Industry Association or Public Knowledge. Their collective primary argument was that statutory damages are too high and require no proof, and have a chilling effect on innovation. They were also skeptical of the idea of a small claims court, presumably over some (not articulated) fear that the YouTubes of the world would end up in thousands of small claims hearings from individual creators all over the country. The subcommittee was not impressed. (Rep. Collins was particularly dismissive of the CCIA’s assertion that cases in which statutory damages have been particularly high have diminished “the perceived legitimacy of copyright” – if you want to hear him blow Matt Scheurer off, it’s at about 4:40 in the video below)
It certainly struck me that the subcommittee was nearly unanimously in favor of strong copyright protection. They were quite receptive of the Department of Justice proposal to turn criminal copyright infringement into a felony, they liked the idea of a small claims court, and they had no obvious interest at all in lowering statutory damages. I’m not sure yet what effect the recently launched lobbying efforts of Silicon Valley are having in Congress, but it was invisible in this hearing.
Did you watch the hearings? What was your impression?
My two cents.
I think Congress lacks the political will to drastically strengthen copyright law. SOPA/PIPA still rings fresh in their minds and with an already deadlocked Congress you aren’t going to see a major copyright reform in favor of strengthening the law.
However, there’s even less will to drastically weaken it. There’s pretty much no one who in Congress who sees that as a practical solution.
So, 2015 will be an important year, I think Congress will work to strengthen and overhaul copyright but it will be more of a “trimming around the edges” than a big shift. A small claims court is possible (I hope), felony penalties for streaming is almost certain as well as music licensing overhaul and some revisiting of the DMCA’s safe harbor provisions.
That’s what I’m seeing/feeling right now though it’s too early to be certain.
I don’t expect Congress to act very quickly, either. But I think you’re right that at least there’s no appetite for weakening the law. (They seem to actually love it). Thanks for your comment!
Congress should proceed with due care in this area. While the intent is squarely aimed at offshore piracy, these draconian proposals will undoubtedly have unintended consequences at home. As a general matter, Congress needs to do the hard work of precisely defining what it wants to criminalize and in what circumstances. We have a bad habit of overly criminalizing subject matter for the purpose of equipping law enforcement with the latitude to handle troublesome problems that seem to defy other means of control. Merely deferring to administrative policy and prosecutorial discretion is neither sound nor helpful. As it is, the “fair use” exception is not well defined and has undergone untolled instances of litigation. When the DOJ representative testified and could not answer a simple question regarding interpretation without extensive caveats, it should inform us that sufficient ambiguity persists to warrant carefully treading into increased criminalization. A fundamental hallmark of liberty and due process is anchored in citizens being able to reasonably understand and appreciate the nature of the act which is prohibited. For the average citizen, the fair use doctrine is unreasonably vague and open to interpretation. While there is an imperative to protect the intellectual property of US citizens, and by extension our economy, there are numerous tools available to do so, especially at the government to government level that can greatly assist in mitigating these issues. While I have no reason to doubt that the DOL would act fairly and reasonably and believe that increased criminalization may have merit, it needs to be very tightly drawn to avoid casting a very wide net and the Congress needs to balance the interests of commercial enterprise interests with those of the average citizen.
By way of comparison, as it is, the costs and burdens of defense are so high that the average person or small business has no recourse but to accede to the disproportionate demands of those asserting purported IP infringement. For example, many businesses subscribe or utilize information syndication services that distribute content under the premise that the content has been properly authorized by the underlying owner of the work with the right publish and display. Done in good faith, businesses are then swept up in litigation brought by owners of content alleging unauthorized use. The notion that indemnification or similar provisions can protect small businesses and individuals, while certainly prudent, does little to protect them in practicality because another layer of cost is imposed in seeking enforcement against the primary infringer in addition to defense costs. It is precisely the disproportionate effect of civil penalties that have encouraged the phenomena of IP trolls.
Overall a much more rationalized system needs to be implemented that makes adequate distinctions between various types and circumstance of infringement and better aligns penalties with economic reality. Deterrent penalties by their nature are disproportionate to the act and are intended to discourage other potential violators. Deterrent penalties have no place in any equitable system of justice other than in cases of “willful and knowing misconduct” on the part of the bad actor coupled with a significant social harm that warrants disproportionality. Typically, these types of circumstances are in the domain of traditional criminality and in cases where there is the risk of pubic injury.
It is important the Congress not be handmaidens to commercial interests at the expense of the average citizen.
Thanks for your comment, Joe. Due process concerns are certainly paramount in any decision to criminalize behavior. And yes, fair use is a vague standard. Not every act of piracy has a colorable fair use claim of course, but the DOJ should certainly not be trusted to understand the difference and the devil will always be in the drafting. While the statutory damage scheme arguably has some deterrence underpinnings, it is far more about compensating a plaintiff whose damages are unknown, and incentivizing creators to register their works, which is what the Library of Congress really wants. But lots of people think the system needs to be modernized / rationalized, and I’m curious about your thoughts on what that system might look like.
Tara:
Thanks for the response. Certainly a streamlined and less costly venue like small claims would be very helpful. There also should be more statutory defenses to mitigate damages, including those for good faith belief in authorization and reasonable reliance on the fair use exception. Simply leaving the entire burden of uncertainty regarding fair use to the defendant renders the exception useless and also chills free expression and creativity.
Additionally, when there is a knowable value established by the commercial market for a copy of a work, the damages should be calculated on some reasonable quantum of its market value. Further, motive should be an essential part of the damages assessment. Commercial redistribution motive should result in punitive damages whereas noncommercial motive should not warrant the same treatment.
The Sony BMG v. Tenenbaum case serves as a prime example of the wildly disproportionate results ($22,000 per illegal song download) that can be served up on an infringer. Most notably, the 1st Circuit made a quite slavish interpretation to the statute in that motive has no bearing under the statutory scheme. It also reversed the lower court’s determination that the amount of jury awarded damages were unconstitutional because they were not “punitive” by label (as opposed to reality). Thus, the BMW of North America, Inc. v. Gore standard did not apply. For the most part, with exception of the entertainment industry, the average person found this ruling to shock the conscious and contrary to notions of justice. Cases of this nature will inevitably come about within an increased criminalization context with far worse consequences, namely imprisonment.
Overall, I’d prefer to see much more statutory discretion and latitude given to the courts in regards to mitigation. It is hard not to conclude that a 99 cent song transforming into a $22,000 damage calculation is precisely the area in which Congress should be spend its time.
Disclosure – I have no direct or indirect interest in, or relationship to, the Tenenbaum case.