BEFORE THE INTELLECTUAL PROPERTY ENFORCEMENT COORDINATOR

2016 Joint Strategic Plan

COMMENTS OF THE COPYRIGHT ALLIANCE

The Copyright Alliance welcomes this opportunity to submit comments on the IPEC’s development of its next Joint Strategic Plan on Intellectual Property Enforcement.

The Copyright Alliance is a non-profit, non-partisan, public interest and educational organization that represents over forty entities comprised of individual artists and creators, as well as the associations, guilds, and corporations that invest in and support them. In addition to these institutional members, we represent more than 15,000 individual “One Voi©e Artist Advocates” who contribute to our work.

We welcome the opportunity to provide input in the development of the next Joint Strategic Plan. As discussed below, the Copyright Alliance recommends that the IPEC:

• Consider the views of individual artists, innovators, and small businesses, as their unique perspectives are essential to developing fair and effective intellectual property (IP) enforcement policies that work for all creators. • Continue to encourage, monitor and facilitate voluntary, private-sector agreements addressing specific IP enforcement challenges. • Safeguard transparency and accountability in the domain name system by urging domain name registrars to abide by their contractual obligations for preventing the use of their services to support sites that are engaged in infringing activities, working with ICANN where appropriate. • Continue to support the harmonization of criminal penalties for infringement of public performances with those for infringement of reproduction and distribution. • Analyze the effectiveness of the notice and takedown process under the Digital Millennium Copyright Act (“DMCA”) and how its effectiveness can be improved. • Examine IP enforcement related laws that have been adopted and implemented in foreign jurisdictions to determine whether the United States should consider adopting similar initiatives. • Support the establishment of a copyright small claims process.

I. Include Individual Artists, Creators, Innovators, and Small Businesses in Enforcement Discussions

Giving a voice to individual artists, creators, innovators, and small businesses—who are often unable to participate directly in efforts to improve the protection of intellectual property rights—is among our core missions. Preserving a vibrant, trusted, and legal online marketplace is crucial to the ability of these creators and innovators to promote their work and to build their businesses. Many individual creators face enforcement challenges to their livelihood and are simply unable to respond in a meaningful way. For example:

• Eric Hart is a professional prop maker for theater, and the author of The Prop Building Guidebook. To write this comprehensive guide—which included well over 500 images and ten years of personal experiences—he worked tirelessly on the manuscript for over a year.1 Hart shared some of his work for free, posting complementary videos and excerpts, yet still found copies of his works on pirate sites. Said Hart, “It’s like I’m standing right there, while someone says, ‘Yeah, you spent years creating something unique and valuable that will benefit the community. I appreciate that, and I’m going to take advantage of it, but I’m not going to pay like everyone else.’”2

• Christine Filipak, a graphic designer and background vocalist for the band Nox Arcana, has found her music on hundreds of illegal sites, and spends an enormous amount of time issuing takedown notices.3 However, the process is simply too cumbersome and at the end of the day, is ineffective. As soon as one illegal site is taken down, another site sharing unauthorized copies of her music pops up.

• Maria Schnieder is a composer, bandleader, conductor, and three-time GRAMMY- winner in the jazz and classical genres. In Congressional testimony, she described the frustrating and never-ending process of protecting her work online. “The DMCA makes it my responsibility to police the entire Internet on a daily basis. As fast as I take my music down, it reappears again on the same site—an endless whack-a-mole game.”4

1 Eric Hart, Need for Copyright Protection Hits Home, The HILL (July 25, 2013, 12:00 PM), http://thehill.com/blogs/congress-blog/judicial/313221-need-for-copyright-protection-hits-home. 2 Id. 3 Judy Chu & Tom Marino, Victims of IP Theft Need Better Protection, The Hill (March 12, 2014), http://thehill.com/opinion/op-ed/200630-victims-of-ip-theft-need-better-protection. 4 Section 512 of Title 17: Hearing Before the Subcomm. on Courts, Intell. Prop. and the Internet of the H. Comm on the Judiciary, 113th Cong. 57 (2014) (statement of Maria Schneider). • Alex Wild is a nature photographer who chose to leave his career as professional photographer due to the frustrations of enforcing his copyrights. He has said that copyright infringement “drains my productivity to the point where I created hundreds fewer images each year,” and had devoted as much as ten hours per week to infringements.5 “Our copyright system is not designed for people like me, facing infringers like mine. It was designed to help large players with extensive legal resources sort out rare, highly damaging disputes—exactly the opposite of the modern intellectual property landscape.”6

These are only a few examples of the many creators who face challenges to their livelihood every day, and the unique and important perspectives they will bring to the conversation about intellectual property enforcement. We respectfully offer the services and resources of the Copyright Alliance in fostering this important national conversation.

In addition, the IPEC can play an outreach role by promoting the resources available to copyright owners about enforcing their rights, including educational materials and tools and contacts for reporting copyright infringement.7

II. Encourage and Monitor Voluntary, Private-Sector Agreements

Private-sector voluntary agreements are a critical tool for addressing online infringement. The IPEC should continue to facilitate, encourage and monitor these cooperative efforts to ensure effective approaches with timely follow through.

There have been a number of positive developments in this area since the 2013 Joint Strategic Plan:

• In February 2015, the Association of National Advertisers (ANA), the American Association of Advertising Agencies (4A’s), and the Interactive Advertising Bureau (IAB) launched the Trustworthy Accountability Group (TAG).8 The TAG initiative validates tools and services that have taken measures to prevent advertisements from running on pirate sites. According to the Digital Citizens Alliance, ad-supported pirate sites can be extraordinarily profitable, with many displaying ads from “blue chip premium brands.” 9

5 Alex Wild, Bugging out: How rampant online piracy squashed one insect photographer, ARS TECHNICA (Sept. 24, 2014, 9:00 PM), http://arstechnica.com/tech-policy/2014/09/one-mans-endless-hopeless-struggle-to-protect- his-copyrighted-images/. 6 Id. 7 See, e.g., US Dept. of Justice, Reporting Intellectual Property Crime: A Guide for Victims of Copyright Infringement, Trademark Counterfeiting, and Trade Secret Theft (March 2013), http://www.justice.gov/sites/default/files/criminal-ccips/legacy/2015/03/26/ip-victim-guide-and-checklist-march- 2013.pdf. 8 Press Release, Advertising Industry Launches Initiative to Protect Brands Against Piracy Websites, Trustworthy Accountability Group (February 10, 2015), https://www.tagtoday.net/advertising-industry-launches-initiative-to- protect-brands-against-piracy-websites/. 9 DIGITAL CITIZENS ALLIANCE, GOOD MONEY GONE BAD: DIGITAL THIEVES AND THE HIJACKING OF THE ONLINE AD BUSINESS (Infograph) (2014), available at

• In September, 2015, WPP’s GroupM, the global media investment management giant, announced it would require its media partners to either become or use TAG-certified providers of anti-piracy services.10

• In February 2013, the Center for Copyright Information (CCI) launched the Copyright Alert System a partnership between studios and labels and five major ISPs. The graduated response system uses both educational messaging and mitigating measures to change consumer behavior on transferring illegal files. In the first ten months of operation, 1.3 million alerts were sent, and a CCI study found that 57% of users would stop infringing immediately if they received an alert.11.

Other areas are ripe for similar voluntary agreements between stakeholders. Potential areas where voluntary agreements appear to be appropriate include search engines, the DMCA notice and takedown process and domain name registrars. Search engines are a crucial part of the Internet infrastructure, but they also help drive traffic to infringing sites, with one study finding that “74% of consumers surveyed cited using a search engine as either a discovery or navigational tool in their initial viewing sessions on domains with infringing content.”12] They therefore have a responsibility to their users and other stakeholders to ensure that their tools are not used in harmful ways. While they have taken some steps over the past several years, it has not been nearly enough.

The DMCA notice and takedown system may also be amenable to improvement through voluntary initiatives. The system was originally intended to preserve “strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment.”13 The notice and takedown process may have worked when it was first enacted in 1998. But that was 17 years ago. Technology has advanced tremendously in that period of time and the notice and takedown process has simply not kept pace.

Congress could not predict how much the digital environment would become a haven for rampant infringement when it enacted the DMCA. Each year, over 78 million take down notices are filed with Internet service providers.14 Most troubling is that, despite the vast amount of takedown notices sent by copyright owners, there is very little to show for their efforts.

https://media.gractions.com/314A5A5A9ABBBBC5E3BD824CF47C46EF4B9D3A76/057731a7-9479-4bdc- bac5-98903d9dcd89.pdf. 10 Press Release, GroupM Requires Partners to use TAG-Certified Anti-Piracy Services, GroupM (September 23, 2015), http://www.groupm.com/news/press-releases/groupm-requires-partners-use-tag-certified-anti-piracy- services. 11 CENTER FOR COPYRIGHT INFORMATION, COPYRIGHT ALERT SYSTEM: PHASE ONE AND BEYOND 1 (2014). 12 MOTION PICTURE ASS’N OF AM., UNDERSTANDING THE ROLE OF SEARCH IN ONLINE PIRACY 5 (2013), available at http://www.mpaa.org/wp-content/uploads/2014/03/Understanding-the-role-of-search-in-online-piracy.pdf. 13 H.R. Rep. 105-551, pt. 2, at 49 (1998). 14 Bruce Boyden, The Failure of the DMCA Notice and Takedown System: A Twentieth Century Solution to a Twenty-First Century Problem, CPIP, 2 (2013). Copyright owners have likened the DMCA notice and takedown process to a game of “whack-a- mole,” due to the fact that sending a takedown notice for infringing content often results in the very same content immediately reappearing elsewhere.15

It’s time for notice and takedown version 2.0. We would like to work with Internet companies to update and improve the process in a way that can benefit all. The IPEC should examine ways to make this process more effective. For example, there have been a number of calls for ISPs to take steps to prevent content that has been taken down from a service to be re- uploaded—referred to by some as “notice and stay down.”16 The IPEC could also look at the experience of the Department of Commerce’s Internet Policy Task Force’s (“IPTF”) DMCA multi-stakeholder process to inform its own approach to these issues.17

III. Safeguard Accountability and Transparency in the Domain Name System

Under the 2013 Registrar Accreditation Agreement (“RAA”), which registrars of new gTLDs must execute, registrars must, among other things:

• make available and publicly accessible an up-to-date database of identity and contact information on domain name registrants (also known as the Whois service),18 • require domain name registrants to represent that the registered name will not be “directly or indirectly used” to infringe the legal rights of any third party,19 • comply with the obligations specified in the Whois Accuracy Program Specification,20 and • “take reasonable and prompt steps to investigate and respond appropriately to any reports of abuse.”21

Many copyright owners have expressed frustration with the level of compliance by registrars. This past year, the Recording Industry Association of America (RIIA), on behalf of over 15 national and international trade associations that represent songwriters, recording artists, music publishers, record labels, studio professionals, and performing rights societies around the

15 Section 512 of Title 17: Hearing Before the Subcomm. on Courts, Intell. Prop. and the Internet of the H. Comm on the Judiciary (Statement of Rep. John Conyers, H. Comm. on the Judiciary). 16 See, e.g., Section 512 of Title 17: Hearing Before the Subcomm. on Courts, Intell. Prop. and the Internet of the H. Comm on the Judiciary, 113th Cong. 9 (2014) (statement of Sean O’Connor, Professor of Law and Founding Director, Entrepreneurial Law Clinic, University of Washington (Seattle); Section 512 of Title 17: Hearing Before the Subcomm. on Courts, Intell. Prop. and the Internet of the H. Comm on the Judiciary, 113th Cong. 9 (2014) (statement of Maria Schneider); Authors Guild letter, https://www.authorsguild.org/wp- content/uploads/2015/07/Letter-to-Judiciary-Comm.-7.9.15.pdf 17 DEPARTMENT OF COMMERCE, COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY (2013), available at http://www.uspto.gov/sites/default/files/news/publications/copyrightgreenpaper.pdf. 18 See ICANN, REGISTRAR ACCREDITATION AGREEMENT section 3.3.1 (2013). 19 See id. at sections 3.7.7, 3.7.7.9. 20 See id. at section 3.7.8. 21 See id. at section 3.18.1. world, sent a letter to top executives at ICANN voicing concern with how complaints of copyright abuse are being treated.22 Included in those concerns was the lack of adequate responses, or any cooperation for that matter, from registrars who had been informed of copyright abuse on their services. Additionally, in its recent submission on notorious markets to the U.S. Trade Representative, the Motion Picture Association of America (MPAA) highlighted the inaction of registrars as a major impediment to the enforcement of IP rights online.23

For these contractual provisions to have any meaning, registrars need to comply with the obligations they agreed to, and ICANN must enforce these obligations. This is the only way for these agreements to set a course of performance that provides for a strong and safe online marketplace conducive to creativity and innovation. As the U.S. Trade Representative made clear in it’s 2014 report on notorious markets, “[T]he IPR enforcement system can break down when the tools available to rights holders become ineffective, due to, among other things, the failure of domain name registrars or other similarly situated entities to follow rules intended to help combat illicit activity.”24

The IPEC should work with registrars where it can to ensure compliance, and it should continue to coordinate with the NTIA-administered DNS Interagency Working Group in developing positions within ICANN’s Government Committee (“GAC”) that support strong contractual compliance and appropriate consideration of intellectual property issues in the context of gTLDs. In addition, as noted above, the IPEC should encourage and facilitate the development of voluntary agreements between the copyright community and registrars to address these issues.

IV. Harmonizing Criminal Penalties

Criminal penalties for copyright infringement should not differ depending on whether a work is made available to the public to download or to stream. Accordingly, just as it did in the prior Joint Strategic Plan, the IPEC should strongly support bringing criminal penalties for infringement of the public performance right, currently at most a misdemeanor, to the same level as infringement of the reproduction and distribution, which can result in felony charges for willful and egregious infringement.

Since the last Joint Strategic Plan, streaming has become an even more vital business model for creative works. According to Recording Industry Association of America (RIAA),

22 Letter from Victoria Sheckler, Senior Vice President, Deputy General Counsel, Recording Industry Association of America, to Dr. Steve Crocker, Chairman of the Board, and Fadi Chehadé, CEO, ICANN (Mar. 5, 2015). 23 Letter from Joanna McIntosh, Executive Vice President, Global Policy and External Affairs, Motion Picture Association of America, to Christine Peterson, Director for Intellectual Property and Innovation, Office of the U.S. Trade Representative (Oct. 5, 2015)(“Websites engaged in massive copyright infringement depend upon the services provided by Internet domain name registrars to operate and perpetuate their illegal activities on such a massive scale. Without the ongoing support of the registrars, these sites would find it difficult, if not impossible, to operate. Unfortunately, many domain name service providers facilitates this illegal conduct by refusing to take action—notwithstanding their RAA obligations—upon being notified that their domain names are being used in clear violation of the law and their own registration agreements.”). 24 U.S. TRADE REPRESENTATIVE, 2014 OUT-OF-CYCLE REVIEW OF NOTORIOUS MARKETS 10 (2015) streaming services account for 27% of all U.S. music revenue.25 And streaming video subscriptions such as Netflix are projected to reach revenues of $10 billion annually by 2018.26 Given the increasing popularity of streaming, “misdemeanor penalties are simply not sufficient to deter large-scale infringers,” said Acting Deputy Assistant Attorney General David Bitkower in 2014.27

Other government officials have reiterated support for aligning criminal penalties in this fashion. In 2015, Register of Copyrights Maria Pallante told the House Judiciary Committee, “[w]hile Congress should carefully consider the operation of this amendment to ensure appropriate legal processes, there is no question that the change is warranted and overdue.”28 And in its 2013 Green Paper on copyright policy, the Department of Commerce’s Internet Policy Task Force said, “The lack of potential felony penalties for criminal acts of streaming disincentivizes prosecution and undermines deterrence.”29

V. Observe How Other Countries Are Enforcing Copyright Laws, and Whether Those Enforcement Methods Are Effective

In its request for comments, the IPEC identified the importance of data-driven governance, noting that data and other information would enable the identification of enforcement challenges and the development of recommendations to effectively and efficiently address those challenges. One source of data the IPEC should consider is the experience of other countries in using a variety of methods for protecting creative works online. A few examples include:

• The United Kingdom High Court has successfully changed consumer behavior by ordering ISPs to now block 120+ piracy websites to date.30 One study found 12% of consumers turn to paid legal streaming services when large pools of websites are blocked simultaneously.31

25 JOSHUA P. FRIEDLANDER, RIAA, NEWS AND NOTES ON 2014 RIAA MUSIC INDUSTRY SHIPMENT AND REVENUE STATISTICS 1 (2014), http://riaa.com/media/D1F4E3E8-D3E0-FCEE-BB55-FD8B35BC8785.pdf 26 Joe Battaglia, Report: Revenue From Online Video Streaming to Surpass Box Office, NEWSMAX (June 5, 2014, 12:19 PM), http://www.newsmax.com/US/Netflix-Hulu-video-movies/2014/06/05/id/575369/ 27 Copyright Remedies, Hearing Before the Subcomm. on Courts, Intell. Prop. And the Internet of the H. Comm on the Judiciary, 113th Cong. (2014) (statement of David Bitkower, Acting Deputy Assistant Attorney General, Dept. of Justice). 28 The Register’s Perspective on Copyright Review: Hearing Before the H. Comm. on the Judiciary, 114th Cong. 13–14 (2015) (statement of Maria A. Pallante, Register of Copyrights, U.S. Copyright Office), http://copyright.gov/laws/testimonies/042915-testimony-pallante.pdf 29 DEPARTMENT OF COMMERCE, COPYRIGHT POLICY, CREATIVITY, AND INNOVATION IN THE DIGITAL ECONOMY (2013), available at http://www.uspto.gov/sites/default/files/news/publications/copyrightgreenpaper.pdf. 30 See e.g., Mary-Ann Russon, UK ISPs Ordered to Block eBook Piracy Websites Offering Over 10 Million Titles for Free, INT’L BUS. TIMES, May, 28, 2015, http://www.ibtimes.co.uk/uk-isps-ordered-block-ebook-piracy-websites- offering-over-10-million-titles-free-1503287. 31 Brett Danaher, Michael D. Smith, et al., The Effect of Piracy Website Blocking on Consumer Behavior 5 (Tech. Policy Inst. 2015).

• Australia recently passed the Copyright Amendment (Online Infringement) Act, which allows copyright holders to seek court order to block websites with the “primary purpose” of to infringe or facilitate piracy.32

• And, as IFPI has reported, ISPs in 19 countries have been ordered to block nearly 500 sites, providing ample ground for study.33

VI.. Other Concerns

As mentioned, creators struggle to enforce their work with the mechanisms available to them. Infringement actions are particularly troublesome for visual and literary artists because of the nature of transactions, and the volume of their work.34 One reason for this problem is the excessive litigation costs required for bringing a claim in federal court. A survey of members of the American Bar Association Section of Intellectual Property shows the median value of recovery for an attorney to take a copyright case is in the $40,000–$49,999 range.35

In the last Joint Strategic Plan, the Administration joined us36 in welcoming an examination of a small claims alternative. Since then, the Copyright Office has proposed a streamlined voluntary dispute resolution system for claims up to $30,000. We hope that the Administration continues to support the implementation of such a system with the following characteristics:

• Appropriately limit the scope and nature of claims; • Encourage the creation of new copyrighted works and authorized derivative works; • Provide effective remedies to plaintiffs, and incentivize participation by defendants; • Deter copyright infringements, and encourage licensing of copyrighted works; • Be cost-effective and efficient for all parties; and • Discourage frivolous or “nuisance” claims.37

32 Copyright Act 1968 (Cth) s 115A (Austrl.). 33 IFPI, IFPI Digital Music Report 2015 (2015), http://www.ifpi.org/downloads/Digital-Music-Report-2015.pdf. 34 See Comment from Copyright Alliance to the U.S. Copyright Office on Copyright Protections for Certain Visual Works (2015). See also COPYRIGHT SMALL CLAIMS at 1-2, noting “the Authors Guild reported that a majority of members surveyed saw the need for a copyright small claims tribunal. 35 COPYRIGHT SMALL CLAIMS, supra 35, at 25. 36 Comment from Copyright Alliance on the Remedies for Small Copyright Claims to the Copyright Office (Jan. 17, 2012), available at http://www.copyright.gov/docs/smallclaims/comments/16_copyright_alliance.pdf. 37 Copyright Remedies: Hearing Before the Subcomm. on the Courts, Intellectual Property and the Internet, 113th Cong. (2014) (prepared statement of Sandra Aistars, CEO, Copyright Alliance), available at http://copyrightalliance.org/2014/07/statement_record_sandra_aistars_chief_executive_officer_copyright_alliance _house_judiciary. To create and fund an effective small claims process, the Copyright Office needs to see improvements in its budget, staffing, information technology, and overall governance. As we’ve noted elsewhere, addressing these challenges is in many ways a necessary first step in addressing other issues facing creators, including enforcement challenges.38

The Copyright Alliance thanks the IPEC for soliciting our views for the development of its next Joint Strategic Plan. We look forward to continuing to collaborate with the IPEC and welcome the opportunity to participate further or answer any follow up questions.

Respectfully submitted,

Keith Kupferschmid

Chief Executive Officer Copyright Alliance 1224 M Street, NW, Suite 101 Washington, D.C., 20005

38 Comment from Copyright Alliance on Copyright Protection for Certain Visual Works to the Copyright Office 11 (Oct. 1, 2015), http://copyrightalliance.org/sites/default/files/copyright_alliance_final_comments_re_visual_works.pdf.