US LEGISLATION

In summary

K As the US Government reacts to new technologies with a succession of Bills, it is also attempting to strike a balance between promoting protection and improving public access

K These competing interests, the content creators on one side and the technology sector on the other, and their ongoing struggle are reflected in pending legislation, including the Family Entertainment and Copyright Act of 2005, which is really a bundle of Bills, and the Digital Media Consumers’ Rights Act of 2005

industries, make large investments of time and money to produce their works and are trying to protect their livelihood by supporting legislation to increase copyright protection and penalties for infringement and by taking legal action against infringers. Content producers are unlikely to continue producing if they do not get paid, to everyone’s detriment. Public interest groups concerned about dissemination of harmful materials over the internet are often aligned with the content industries in this struggle. On the other side is the technology sector, which is concerned that increased copyright A delicate protection in the digital world will impede innovation. Public interest groups that represent consumers or promote free speech balance are weighing in to support file sharing technology. Librarians, archivists, educators K and researchers want to maximise public Copyright protection versus public access access to copyrighted works. It is these competing interests and their ongoing Cydney A Tune and Carolina A Fornos, of Pillsbury Winthrop Shaw struggle that are reflected in legislation pending before the 109th Congress, which is Pittman LLP, examine pending US copyright legislation attempting to make significant revisions to existing copyright law. he US Constitution includes copyright Services emerged, using “peer-to-peer” The Family Entertainment and Copyright Act protections because the Founders , which allowed computer users to of 2005 (FEA) (S 167), and its companion bill Tbelieved that such protections were exchange digitised copies of songs, movies, in the House of Representatives (HR 357), necessary for progress. The enacted software, and other content stored in were introduced on 25 January, 2005 and copyright laws dealt with issues that computer files easily, quickly, and broadly. contain four independent intellectual concerned tangible copyrighted works such Through both legislation and the courts, the bills, all of which reflect the as paintings, books, and vinyl records. US has attempted to adapt its copyright laws continuing struggle between protection for However, innovation – particularly the advent to the new realities – facing competing works and access to and use of such works. of the internet and of technology permitting interests in the process. Interestingly, FEA balances these competing the digitising and easy sharing of all types of On one side, content creators and owners, interests by promoting legislation favourable content – has outmoded US copyright law. such as those in the music and movie to each side. Also pending in the House of

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Representatives is the Digital Media and exhibitors would be given the authority crimes, such as trafficking in movies and Consumers’ Rights Act of 2005 (the Digital to detain anyone suspected of unauthorised sound recordings without permission from Media Act) (HR 1201) a pro-consumer bill filming or recording and would receive the copyright owner. that attempts to force the music industry to criminal and civil immunity from liability Senator Hatch introduced the ART Act as clearly label copy-protected music discs as for a reasonable detention for questioning or an attempt to fight piracy and intended for it such, and the Military Copyright Act, which arrest of such a person. to become an important statutory “tool for seeks to provide faculty of military schools The ART Act would also establish law enforcement officials combating the the right to copyright their work. criminal penalties for growing problem of music and movies being Senator Orrin Hatch (R-Utah) introduced from the unauthorised distribution of a pre- distributed on file-sharing networks and the FEA in the Senate with the aim of release commercial copyrighted work. circulating on the internet before they are modifying federal copyright law to stop Section 506 of the Copyright Act, which even released.”1 piracy on the internet and to assist parents Several states have begun to in protecting their families from criminalise this type of conduct, but the inappropriate material in movies. FEA ART Act would provide a federal consists of four bills Through both legislation standard to help fight piracy. As Senator that the House and Senate have been Hatch recognised, “[s]everal States have working to enact since the 108th and the courts, the US already taken steps to criminalise this Congress: (i) The Artists’ Rights and Theft activity, but providing a uniform Federal Prevention Act of 2005; (ii) The Family has attempted to law – instead of a patchwork of State Movie Act of 2005; (iii) The National Film adapt its copyright criminal statutes – will assist law Preservation Act of 2005; and (iv) The enforcement officials in combating the Preservation of Orphan Works Act. The laws to the new theft and redistribution of valuable Senate passed FEA on 1 February, 2005 intellectual property embodied in newly- and by 9 March, 2005, the House Judiciary realities – facing released motion pictures.” Recognising Committee had approved it. FEA is now that piracy “severely undercuts the awaiting the President’s signature. competing interests ability of copyright holders to receive fair and adequate compensation for their Promoting copyright protection in the process works,” the ART Act aims to enhance The Artists’ Rights and Theft copyright protection. Prevention Act of 2005 (ART Act): FEA National Film Preservation Act of tackles the issue of piracy, including the governs criminal copyright infringement, 2005 (Preservation Act): FEA also unauthorised dissemination of works that currently defines criminal copyright promotes copyright protection by creating have not yet been released to the public. The infringement as wilfully infringing for (1) measures to recognise and preserve ART Act makes it a federal crime to use or try commercial advantage or private financial historically or culturally significant movies, to use a video camera or other comparable gain or (2) by reproducing or distributing while also benefiting the public by promoting technology to transmit or make copies of a within any 180-day period one or more the broader dissemination of such movies. movie from a film theatre (cinema), or to copyrighted works having a retail value of The Preservation Act reauthorises and funds distribute a computer program, audiovisual US$1,000. A new category of infringement the National Film Preservation Board and the work, or commercial sound recording to the would be created, for knowingly making a National Film Preservation Foundation, both public via a computer network. These work (such as computer programs, movies of which work to recognise and preserve provisions are intended to stem bootlegging and sound recordings) being prepared for historically or culturally significant movies. and unauthorised distribution of “pre-release commercial distribution available on a Any movies on the National Film Registry commercial works.” computer network accessible to the public. would be stored in a proper manner and be The reality is that all too frequently an The punishment would include fines and/ or more widely accessible to researchers, unauthorised version of a movie is available, three to ten years’ imprisonment. scholars, and the public. either online or in hard copy, shortly after its To further promote copyright protection, The Preservation Act also directs the initial theatrical release or even before its the ART Act directs the Register of Library of Congress, working with the Film theatrical release. Some bootleg copies are to issue regulations establishing Preservation Board, to ensure that the distributed for free while others are sold at a procedures for pre-registration of an national film preservation plan utilises price significantly below what would unpublished commercial copyrighted work, advancements in the technology used to normally be charged. The poor quality of if that work is of a class that the Registrar preserve and store movies. The most bootleg copies does not seem to lessen determines has a history of pre-release Preservation Act would also expand the use the interest in them. To deter this rampant infringement. Such a pre-registration of the National Registry Film seal, allowing piracy, the ART Act imposes criminal system would allow for a civil action for a copyright owner to use the seal on other penalties for such infringement. copyright infringement, in which statutory copies of the Registry version of a film for Specifically, any such offence would be damages and attorneys’ fees can be sought mass distribution or public broadcast. This punishable by a fine and imprisonment for by the copyright owner, and as well as change permits the copyright owner to up to three years and any unauthorised providing for criminal penalties. Further, commercially exploit the recognition and copies of movies or other audiovisual works the United States Sentencing Commission status that flows from a movie’s selection by would be forfeited and destroyed. For repeat would review and, if appropriate, amend the National Film Registry. This Act also offenders, the prison term could be as long federal sentencing guidelines applicable to benefits the public because it ensures the as six years. Film theatre owners, lessees, persons convicted of intellectual property broad dissemination of culturally significant www.ipworldonline.com Copyright World # 150 | May 2005 |19 US LEGISLATION

movies. The Preservation Act is not the user does not create a fixed copy of the The Preservation of Orphan Works Act controversial and is likely to be supported by movie, under FAM use of such technology to (Orphan Works Act): The Orphan Works all of the competing interests. skip over content would not be deemed Act also promotes public access to FEA additionally addresses pro-consumer copyright infringement. copyrighted works. Under the predecessor to and technology sector concerns by giving the FMA additionally protects a manufacturer, the present US Copyright Act, a copyright public and other interested parties certain licensee, or licensor of technology from both owner was required to register copyrights exemptions from copyright infringement and copyright and infringement when and to affirmatively renew the copyright term. by giving certain specified entities the right to creating or selling the technology that enables Under that law, works that could have been use orphan works during the last twenty viewers to skip content, provided that a clear protected by copyrights became part of the years of their copyright term. and conspicuous notice states that the , and thus freely useable, if the performance of the motion picture is altered copyrights were not registered or if no Promoting public access renewal was filed. Those procedural The Family Movie Act of 2005 (FMA): formalities no longer exist in the present Technology exists that can be incorporated law. Rather, copyrights arise automatically into DVD players allowing consumers to Arguably, a copy of a when an original work of authorship is choose to skip or mute selected types of movie that is viewed but fixed in a tangible medium of expression content – such as nudity, profanity, sex and and last for a single term during which no graphic violence – during the DVD not “fixed” cannot be a renewal is necessary. An “orphan work” is playback. This is often referred to as “movie one for which no copyright owner can be filtering technology.” Movie filtering derivative work and thus found. If a work is protected by copyrights technology does not change the DVD disc could not be an infringing but the copyright owner cannot be located, itself, but rather allows the content of the the work cannot be used without movie to be altered for viewing. derivative work infringement because no permission can In September 2002, companies that be obtained. manufacture this technology were sued by The Sonny Bono Copyright Term eight Hollywood movie studios, fifteen from the original one intended by the directors Extension Act, which added 20 years to the directors, and the Directors Guild of and/ or copyright holders of the film at the term of copyrights, added Section 108(h) America for alleged copyright beginning of each performance and that only to the Copyright Act in order to “limited portions” of the work be skipped. ensure that the copyright term As Senator Hatch stated: “This is important extension would not have an legislation both to parents who want the ability adverse effect on the to use new technologies to help shield their preservation and education families from inappropriate content as well as work of libraries, archives and , the technology companies, such as ClearPlay in and non-profit educational asserting that when portions of the my home state of Utah, that are working to institutions, by permitting copyrighted content are skipped, a new develop these technologies.”4 such entities to reproduce, version of the work is created and that such a Under present US copy- distribute, display and new version constitutes a derivative work. See right law, it is not perform copyrighted Huntsman v Soderbergh, et al.2. Under present US works during the law, only the copyright owner has the right to create derivative works; creating an clear that selling or unauthorised derivative work is an infringing using movie filtering act. The directors are particularly upset about technology would be this technology because in their view it distorts copyright infringement because a the movie they have created; the consumer is work must be “fixed” before it is protected not viewing it as they intended. Congress is by copyrights. Arguably, a copy of a movie that considering intervention on behalf of the is viewed but not “fixed” cannot be a derivative technology companies with a bill that would work and thus could not be an infringing end the litigation. derivative work. It thus appears that the FMA creates an express exemption to legislation may not be necessary. copyright infringement for using technology Litigation is also pending against that allows for skipping portions of audio or businesses that rent edited versions extended copyright term if video content in legally purchased or rented of motion pictures without the work is not being commercially movies while they are being viewed in a permission from the copyright exploited and is not available at a private home, and for creating and selling the owner. This scenario creates reasonable price. However, that legislation devices that allow for such skipping. an entirely different legal inadvertently failed to amend Section 108(i) to FMA “empowers private individuals to use situation because the edited include musical, pictorial, graphic and technology to skip and mute material that version of the movie has been fixed into a disc, sculptural works, as well as movies and other they find objectionable in movies, without which is then rented to consumers, and thus a audiovisual works. The Orphan Works Act impacting established doctrines of copyright new work has been created. Whether that new will correct this problem by allowing libraries, or trademark law or those whose business work constitutes a derivative work, however, archives, and some non-profit organisations to models depend on advertising.”3 Provided that remains to be seen. copy, distribute, display or perform all types of

20 | May 2005 | Copyright World # 150 www.ipworldonline.com US LEGISLATION orphan works during the last 20 years of their warn consumers of the restrictions on obtains such copyright, shall not accept copyright term. playability and recordability, the introduction royalties or other compensation and shall Arguably, the Orphan Works Act would of “copy-protected compact discs” in also transfer the copyright to the owner of expand the Copyright Act’s commerce has allegedly caused consumer the medium in which the work will be exemption for libraries, archives and confusion and increased the burden on published. educational non-profit organisations by retailers and manufacturers that respond to The Induce Act: One controversial bill including all types of copyrighted works consumer complaints. worth mentioning not because it is pending within its scope, thus promoting wider The pro-consumer bill seeks to render but, rather, because it is likely to be re- public access to copyrighted musical, unlawful the advertising or sale or attempted introduced this summer after the US Supreme pictorial, graphic and sculptural works. sale of a pre-recorded digital music disc Court rules on Metro-Goldwyn-Mayer Studios However, it permits limited copying product that is mislabelled or falsely or v Grokster, is former Senate bill 2560, which by those entities only of works that never made it out of committee in the are not being commercially exploited and 108th Congress. This bill, known as only during the last 20 years of their the Inducing Infringement of Copyrights copyright term. The bills pending in the Act of 2004 or the Induce Act, would have Some proponents of broad public access to current Congress amended the Copyright Act to provide that copyrighted works do not believe that the anyone intentionally inducing another to Orphan Works Act goes far enough. They continue the struggle infringe a copyright would also liable for believe, for example, that the provisions copyright infringement. should apply to all orphaned works – not only between protection and The Induce Act has been viewed as a direct to those that are in the last 20 years of their access and seek to attack on file sharing and a response to the copyright term – and that the exemption Ninth Circuit Court of Appeals’ decision in from infringement should apply to strike a delicate balance Grokster, holding that peer-to-peer services unpublished works as well as to those that by Grokster did not violate copyright laws. have been published. Regardless of how the Supreme Court rules, The Digital Media Consumers’ Rights deceptively advertised or invoiced or, it is expected that Congress will see bills being Act of 2005: Just last month, Representative additionally, to remove or mutilate any label introduced relating to the issues involved in the Rick Boucher (D-Va) introduced HR 1201, required by the Bill. Grokster case and that may seek to work around known as he Digital Media Consumers’ The Military Rights Act: Another Bill any such decision. Rights Act of 2005, to amend the Federal pending in this Congress is HR 962, the In sum, the bills pending in the current Trade Commission Act to provide that the “Military Copyright Act.” This Bill, introduced Congress continue the struggle between advertising or sale of a mislabelled copy- on 17 February, 2005, proposes to allow faculty protection and access and seek to strike a members at Department of Defense service delicate balance. Although it remains to be academies and schools of professional seen whether any of these bills will be enacted military education and who are also into law, it is clear that the Copyright Act will members of the Army, Navy, Air Force, continue to see revisions necessary to keep or Marine Corps, or a civilian employee of the pace with technology. K Department of Defense, to secure copyrights protected music disc is an unfair for certain scholarly works that they produce as Notes method of competition and an part of their official duties to enable them to 1 151 Cong. Rec. S450-01 at S494, daily ed. 25 unfair and deceptive act or submit such works for publication. January, 2005, statement of Senator Hatch. practice. The right to copyright is restricted to the 2 No. 1:02-cv-01662 (D. Colo. filed 29 August, 2002). Specifically, the Bill seeks to purpose of submitting such work for 3 151 Cong. Rec. S450-01 at S501, daily ed. 25 empower the Federal Trade publication in a scholarly journal, January, 2005, statement of Senator Hatch. Commission to ensure the publication, or other edited work for which 4 See News Release, Orrin Hatch United States adequate labelling of copyright is a requirement for consideration Senator for Utah 25 January, 2005 at 1. pre-recorded digital for publication. The Military Copyright Act music products. additionally provides that the person who Without labelling to

About the authors Cydney Tune (near right) is Counsel at Pillsbury Winthrop Shaw Pittman LLP’s San Francisco office, and chairs the firm’s Copyright Practice team. Her practice includes the full range of copyright protection, including counselling, strategic planning, clearances, prosecution, and extensive policing and enforcement both in the United States and abroad. Ms Tune also handles transactions involving copyright issues, including copyright license and transfer due diligence as well as assignments and licenses. She represents rights owners and accused infringers in copyright and related disputes.

Carolina Fornos (far right) is an associate at Pillsbury Winthrop Shaw Pittman LLP’s New York office. Her experience primarily includes litigation involving copyright and trademark infringement, dilution, anti-counterfeiting, and unfair competition. Ms Fornos additionally has experience in trademark prosecution, drafting and responding to cease and desist letters, and domain name disputes (including ICANN proceedings).

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