Advocacy and the Start-up Recording Artist

On February 8, 2014, California Lawyers for the Arts presented this year’s 31st annual Music Business Seminar at Berkeley Law School. Music industry professionals gathered around the theme theme, “21st Century Musician: Making a Living Making Music.” As the name suggests, the event included panels and breakout sessions that were designed to inform artists and legal professionals on how to navigate complicated statutes and processes in order to help recording artists financially benefit from their creative endeavors. Artists also had the opportunity to meet with a lawyer for a 20-minute consultation throughout the day. Several performers infused the event with live shows, including Real Vocal String Quartet, Jeffrey Lipinski, Steep Ravine Band, and The Northerlies.

Thomas Leavens delivered the keynote address by identifying several trends and forecasts in the music industry. Leavens observed that the digital age has provided a platform for consumers to express their desire for content. As a result, music consumption has changed. This includes the trend of having alternatives to file-sharing, such as streaming. As a result, music consumption has gone from ownership to access. Accordingly, Leavens speculated there will be a rise of questions surrounding whether consumers will acquire music through ownership or license. Proponents of ownership advocate for the right to resell digital music. In response, others say that the act of reselling is just making a digital copy. As the debate boils on, Leavens encouraged artists and lawyers to nevertheless ensure that digitized creative works’ metadata are complete and correct. As music consumption patterns evolve, precise metadata is essential for payment streams that will adequately compensate artists.

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Jury Awards in File-Sharing Cases Add Fuel to Debate on Copyright Act Reform

The cases

Capitol Records, Inc. v. Thomas-Rasset

The plaintiffs, Capitol Records, Inc., Sony BMG Music Entertainment, Arista Records LLC, Interscope Records, UMG Recordings, Inc., and Warner Bros. Records, filed suit against Jammie Thomas-Rasset under the Copyright Act seeking statutory damages and injunctive relief in the first file-sharing copyright infringement lawsuit in the US to reach a jury.

After the 2007 trial, Thomas-Rasset was found liable for copyright infringement after she willfully distributed 24 songs on the file-sharing site KaZaA. Thomas-Rasset was ordered to pay $222,000 in statutory damages. Initially, Thomas-Rasset, a mother of four, declined a settlement offer of $5,000. In 2008, the court granted a motion for a new trial, holding that the original jury instructions, which stated that Thomas-Rasset violated copyright owners’ exclusive distribution right by “making available” the copyrighted songs through file-sharing, were in error. After reviewing the precedent and close examination of the Nimmer on Copyright treatise, the court concluded that “making available” did not constitute distribution and granted Thomas-Rasset a new trial. Thomas-Rasset declined a second settlement offer of $25,000.

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EU’s Attempt to Address the Thorny Orphan Works Problem

The Orphan Works Directive 2012/28/EU was published in the Official Journal of the European Union on 27 October 2012. This post provides an overview of the main provisions set forth by the Directive and describes the approach used by the European institutions in a first tentative step towards tackling the modern issues concerning the use of orphan works, particularly in connection with mass-digitalization projects.

The problem with exploitation of orphan works

Orphan works are works of any kind of art (such as books, newspapers or magazine articles, films, etc.) which remain protected by copyright, but whose authors and/or right holders cannot be identified or, even if known, cannot be tracked down.

This situation is a significant obstacle for those persons, companies, institutions or entities that seek to make such works available to the public. Before the adoption of the Directive, the impossibility of identifying or locating the author of the orphan work normally led to a situation of stall. The organization interested in making use of the work was unable to obtain a license and consequently unwilling to use the work, due to the fear of eventually being charged with copyright infringement.

With the advent of the Internet era and with the rise of large-scale digitalization projects (such as Google Books and Europeana) the issues concerning the availability to the public of orphan works came under the spotlight.

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Online Copyright Infringement: Search for Solutions Continues

After the failures of Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA), the Obama administration’s Internet Policy Task Force has recently put forward a new proposal to making it a felony to stream copyrighted works, along with a Green Paper and call for comments on the future of copyright law in the digital economy. Meanwhile, several studies have examined the impact of piracy on media industry with controversial results. This post reviews efforts to combat online copyright infringement in Europe and in the United States.

Norway’s  Copyright Act Amendment

An amendment to Norway’s copyright law has recently provided copyright holders the power to obtain access to the internet addresses of infringers and to monitor the Internet Service Providers (ISPs) that host infringing materials, prompting comparisons to reincarnated SOPA. The previous law allowed only a single licensed  company to have the permission to locate both website owners and end-users of unauthorized material online, but under the current law, copyright holders will be able to do so directly. When the website owner cannot be identified, the case may be decided without the presence of the defendant. Then, the ISP must follow the court order and block access to the website violating the copyright protection of the right-holder. Moreover, when a legal claim has been submitted, the amendment provides an exemption from the privacy protections of the Electronic Communication Act, which means that the ISP is not obligated to protect the confidentiality of the suspected user’s electronic account.  

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Google Books Litigation Update

The advent of mass digitization via Google Books has ignited a series of copyright-related actions filed by book publishers and authors. There are two issues: whether Google and the owners of affiliated digital libraries are entitled to a fair use defense for library use, including providing access to print-disabled individuals, and whether Google may display snippets of books in online searches. The resolution of the fair use questions debated in the two oral arguments this fall will have significant implications for library and online access to a wide range of works. There are three stories worth noting on this topic:

1. American Association of Publishers v. Google

In 2005, five publishers (Simon & Schuster, McGraw-Hill, John Wiley & Sons, Penguin Group, and Pearson Education) sued Google for copyright infringement, seeking injunctive relief. After 7 years of litigation, the publishers and Google settled privately in 2012. Because the settlement was between the named parties, the court was not required to approve its terms. The 2012 settlement allows publishers to choose whether or not to allow Google to digitize their books. If Google does digitize, it will also provide publishers with a digital copy for their own use. For books that have been scanned, Google allows users to access to 20 percent of the book online.  In order for users to access the entire book, they must purchase it from the Google Play store, and Google will then share the revenue with publisher of that book.

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Vermont Takes A Leap: First State To Pass Law To Combat Patent Trolling

Patent trolls have been in the spotlight of national attention in the past year, as President Obama addressed the problem in his Fireside Hangout and a White House report attempted to quantify the impact of abusive litigation. Officially known as Patent Assertion Entities, or PAEs, these companies purchase patents and bring patent infringement claims as a business model. The Federal Trade Commission (FTC) has recently announced a proposal to obtain more data on approximately 25 PAEs in order to better understand their impact on innovation and the economy. Meanwhile, Vermont has become the first state to take matters into its own hands with a state law to combat patent trolls. While it is not clear whether Vermont has the legal authority to regulate patent activities, its innovative “threats action” approach may prove to be successful enough to be adopted more widely.

Background: National Efforts To Prevent Patent Trolling        

On September 16, 2011, President Obama signed into law the Leahy-Smith America Invents Act (AIA), a major amendment to the 1952 Patent Act that has governed patent law for nearly sixty years.  While the primary purpose of the AIA was to encourage innovation by modernizing the patent application and review process, several provisions in the Act were aimed at patent trolls. Following the AIA, additional measures to combat patent trolling have been introduced in Congress. Three of the most high profile proposals are: (1) the Saving High-tech Innovators from Egregious Legal Disputes (SHILED) Act “forces patent trolls to financial responsibility for frivolous lawsuits”; (2) the Patent Quality Improvement Act expands the AIA by allowing more businesses to be covered under the transitional program for business method patents; and (3) the End Anonymous Patent Act, which requires the owner of patents to register with the UPSTO. While these proposals are being debated in Congress, Vermont has become the first state in the nation to pass its own law to combat patent trolls.

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Internet Governance in the Age of Surveillance

If the Internet international archives will register 2013 as the year of Edward Snowden and the disclosure of National Security Agency (NSA) surveillance programs by the media, 2012 was all about the mobilization against a United Nations (U.N.) attempt to take over the Internet. This post recaps the legal and policy debate around the negotiation of the International Telecommunications Regulations (ITRs) by the World Conference on International Telecommunications 2012 (WCIT-12) and offers some prediction on the Internet Governance (IG) agenda of 2014.

International Telecommunication Union

Based in Geneva, Switzerland, the International Telecommunications Union (ITU) dates back to the first agreements on international telegraph interconnections in the mid-nineteenth century, making it the oldest body of the U.N. system. Its main functions today include allocation of global radio spectrum and satellite orbits, development of technical standards for networks and technologies interconnection, and improvement of access to telecommunications worldwide. These activities are primarily led by its broad membership, which encompasses 193 Member States and over 700 private-sector companies and academic institutions that engage in consensus-based negotiations at the technical Study Groups of its Radiocommunication, Standardization and Development Sectors.

The ITU legal framework encompasses four international treaty-level instruments: Constitution, Convention, Radio Regulations, and International Telecommunication Regulations. The Plenipotentiary Conference, the Council, the General Secretariat and other four world conferences are the top political bodies that ultimately supervise ITU’s organic structure. Each one of them holds specific mandates in determining ITU’s general policies, evaluating its global activities and eventually amending the treaties.

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The Copyright Alert System After Its Roll-Out: First (Non)Reactions

The Copyright Alert System (CAS) was rolled out in late February 2013. CAS constitutes the United States realization of the international concept of “graduated response programs:” frameworks for media owners to address alleged online copyright infringements with computer users through their Internet Service Providers (ISPs). Key features of CAS – and other graduated response programs – are the monitoring of peer-to-peer (P2P) file sharing systems followed by electronic notifications of supposed violations to the user of the computer as well as measures against her that increase in severity with every instance. CAS is a private “six strikes” program based on an agreement between major media corporations and ISPs setting up the so-called Center for Copyright Information (CCI). The consortium’s website describes CAS’ features and emphasizes its educational nature, noting especially that no mandatory termination is built into the agreement and that commercial accounts are not meant to be affected. The Electronic Frontier Foundation, EFF, launched a FAQ of their own when CAS was initiated, however, and pointed out that vast amounts of local businesses are small and reliant on residential-type online access so that in fact “CAS will chill open Wi-Fi.”

Now, two months after the introduction of CAS, how has public access to the Internet already been affected? Where did this scheme come from – and where is it going?

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BTLJ Spring Patent Reform Roundup

With spring in the air, it is time to take another look at current news in the world of patent troll litigation. By now full-fledged media darlings, patent infringement lawsuits filed by non-practicing entities are everywhere you turn, garnering not just upvotes on Hackernews, retweets on Twitter, but time in the halls of Congress and the White House.

USPTO Hosts Silicon Valley Round Table

Patent trolls, otherwise known as non-practicing entities (“NPEs”) or patent-assertion entities (“PAEs”), are often vilified in legal scholarship and, lately, in the mainstream media as well. Without the USPTO granting slews of software patents, however, there would be fewer patents for these non-practicing entities to assert. Some of the current hand wringing over the epic rise in patent litigation of late focuses, as a result, on the USPTO. Accordingly, many were delighted when, last November, the USPTO announced its new director for the soon-to-open Silicon Valley satellite office. Michelle Lee, formerly a lawyer at Google, had scribed publically about the need for patent reform and specifically called out trolls. Consequently, her hire prompted much rejoicing.

Following this heralded move, the USPTO announced a “software partnership” roundtable session in Silicon Valley—ground zero for software innovation. At the meeting, held on February 12, stakeholders shared thoughts on software patents. The audio, for those inclined, is available here, here, and here. Colleen Chien, author of many groundbreaking studies on PAEs, explored the possibility of utilizing heightened application of 35 U.S.C. § 112(f) to construe patents as functional. Professor Chien analyzed several arguably functional patents including U.S. 5,930,474, which GeoTag asserted against 435 defendants in 115 lawsuits. The scope of patents like GeoTag’s would likely be “limited to the technology the patentee actually designed and equivalents known at the time the patent issued” in litigation should 112(f) be so constrained. According to proponents, such a limitation could profoundly affect many patents currently asserted in troll litigation.  Horacio Gutierrez, Corporate Vice President and Deputy General Counsel at Microsoft, also presented some thoughts about potentially limiting § 112(f). He noted that more rigorous enforcement of § 112(f) is “one part of the solution.” However, according to Mr. Gutierrez, this solution would not address issues such as inadequate notice and excessive breadth.

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Bitcoin: FBI and FinCEN Weigh In

Bitcoin, an anonymous currency imagined by a mysterious individual with a secret identity, is on everybody’s mind. The cryptographic digital currency, operating through a decentralized peer-to-peer network, is both an opportunity for criminals and entrepreneurial early adopters as well as a challenge for regulators. Since inception, bitcoin has captured headlines, gone on a roller coaster valuation ride, suffered security breaches and hacking attempts and, more recently, garnered interest from institutional investors. Last year, a leaked FBI report provided a snapshot into the government’s concern that bitcoin could become cybercriminals’ choice currency. In a surprise move this spring, the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”) provided interpretive guidance on how federal financial regulations implicate virtual currencies. Where will the bitcoin market, or its regulation, be in a year from now? Nobody knows, and that’s what makes it so exciting.

Bitcoin Genesis

Bitcoin’s origins are shrouded in mystery. Four years and twenty-five weeks ago, an entity named Satoshi Nakamoto posted a paper abstract to the Cryptogarphy Mailing List. Bitcoin: A Peer-to-Peer Electronic Cash System conceived of a currency that could be “sent directly from one party to another without going through a financial institution.” Instead of using a trusted third party to facilitate electronic transactions, Satoshi’s payment system would be based on the power of cryptography. Fraud would simply become “computationally impractical.” Through a process known as “mining,” anybody with a CPU powerful enough could generate, or discover, new bitcoins. Unlike centralized currencies where a central bank controlled the monetary base, bitcoin’s decentralized system algorithmically defined the number of bitcoins generated per block such that more than 21 million bitcoins would ever exist. On January 3rd, 2009 at 18:15 UTC, Satoshi Nakamoto—transforming his theoretical system into reality—created the first (genesis) block of bitcoins. Continue reading

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