In the Matter of: Developing the Digital Marketplace for Copyrighted Works March 28, 2019 Third Public Meeting Condensed Transcript with Word Index For The Record, Inc. (301) 870-8025 - www.ftrinc.net - (800) 921-5555 Third Public Meeting Developing the Digital Marketplace for Copyrighted Works 3/28/2019 1 3 1 1 WELCOME REMARKS 2 2 MS. ALLEN: So good morning. If we could 3 3 just start getting started and sitting down in our 4 DEPARTMENT OF COMMERCE 4 seats, I’ll give a few housekeeping notes and then 5 5 introduce Shira, and then we’ll begin. 6 INTERNET POLICY TASK FORCE 6 So just while you're getting seated, I'll 7 7 give an overview of the day. We’ll have coffee and 8 DEVELOPING THE DIGITAL MARKETPLACE 8 tables set up in the room next door, so if you want to 9 9 have sidebar conversations -- or, actually, there's 10 FOR COPYRIGHTED WORKS 10 coffee here as well. 11 11 The restrooms are out to the right, and we 12 THIRD PUBLIC MEETING 12 just ask that everyone here register by signing in up 13 13 front. If you haven’t already, please do so. We did 14 14 sort of take an informal poll of people who might be 15 THURSDAY, MARCH 28, 2019 15 interested in a happy hour nearby, so that’s on the 16 16 registration list. We’d like to have a headcount by 17 17 noon, if we could, for the restaurant. 18 U.S. PATENT AND TRADEMARK OFFICE 18 And with that, I think I’d just like to say 19 600 DULANY STREET 19 welcome, and it's my honor to introduce Shira 20 ALEXANDRIA, VIRGINIA 22313-1450 20 Perlmutter, who will provide opening remarks. Shira 21 21 is the Chief Policy Officer and Director for 22 22 International Affairs at the United States Patent and 23 23 Trademark Office. In her role as Policy Advisor to 24 24 the Undersecretary of Commerce for Intellectual 25 25 Property, she oversees the USPTO’s domestic and 2 4 1 I N D E X 1 international IP policy activities, legislative 2 2 engagement, international education and training 3 AGENDA ITEM: PAGE: 3 programs, global advocacy, and economic analysis. 4 Welcome Remarks 3 4 Thank you. 5 5 MS. PERLMUTTER: Thanks, Susan. It’s 6 The Digital Marketplace: Industry Perspectives 7 6 wonderful to see so many old friends. This is 7 7 beginning to be an ongoing conversation at this point, 8 The Digital Marketplace: Technology Initiatives 55 8 and also welcome to those of you who are new to the 9 9 discussion, both those here in person and those 10 Identification 75 10 joining online or via webcast. 11 11 So to bring everyone up to speed, this 12 Panel Discussions: The Age of Attribution? 93 12 meeting is hosted by the Department of Commerce’s 13 13 Internet Policy Task Force. And the Task Force was 14 U.S. Copyright Modernization 120 14 formed in 2010 -- it’s amazing that that’s already 15 15 nine years ago -- by the then Secretary of Commerce to 16 Rights Management 136 16 review the policy and operational issues that impacted 17 17 the private sector's ability to spur economic growth 18 Panel Discussion: Registries and Rights 18 and job creation through the internet. And it looks 19 Management 158 19 at a lot of different issues. One of them is 20 20 intellectual property and with a particular focus on 21 Panel Discussion: Licensing/Monetization 186 21 copyright. 22 22 So as part of the Task Force’s work, the 23 Afternoon Plenary Discussion 230 23 USPTO and NTIA, the National Telecommunications and 24 24 Information Administration, have looked at the topic 25 Closing Remarks 258 25 of how the Government -- whether and how the 1 (Pages 1 to 4) For The Record, Inc. (301) 870-8025 - www.ftrinc.net - (800) 921-5555 Third Public Meeting Developing the Digital Marketplace for Copyrighted Works 3/28/2019 5 7 1 Government can facilitate the further development of a 1 THE DIGITAL MARKETPLACE: INDUSTRY PERSPECTIVES 2 robust online licensing environment for copyrighted 2 MS. ALLEN: So this first panel will have a 3 works. We've held a number of public meetings. We’ve 3 series of presentations, and then it will be open for 4 had several rounds of public comments on the issue, 4 discussion, time permitting, and questions from the 5 and we described it in full in our 2013 green paper on 5 audience. And I see that Vickie Nauman has just 6 copyright policy, creativity, and innovation in the 6 arrived, so please come on up. 7 digital economy. 7 Our first speaker today is Janet Hicks. 8 Just for those of you who haven’t read it, 8 Janet is Vice President and Director of Licensing at 9 the green paper is very useful, even today, as a very 9 the Artists Rights Society. She is on the Executive 10 comprehensive overview of the copyright issues that 10 Committee of the International Council of Creators of 11 are raised by digital technology. And it is still 11 Graphic, Plastic, and Photographic Arts, the visual 12 available on the USPTO website. The green paper 12 arm of the International Confederation of Societies of 13 devoted an entire chapter to ensuring an efficient 13 Authors and Composers, CISAC, and she is a curator and 14 online marketplace. And in the paper, we looked at 14 advocate for emerging contemporary and outsider 15 then-current licensing examples and talked about some 15 artists. Welcome. 16 impediments that had been identified to licensing for 16 MS. HICKS: So, hi. Thank you for having 17 online distribution. 17 me. I'm pleased to give the visual perspective here 18 And at the time, the ones we identified 18 at this meeting. I know that everyone on this panel 19 included the complexity of licensing in the online 19 will give perspectives from other disciplines, so I'm 20 environment, particularly in the music space; the 20 sort of specifically focusing on the issues that 21 challenges with mapping old contracts to new uses; and 21 affect visual artists in this presentation. 22 issues about licensing across borders. Now, of 22 So there’s a lot of pain points that we’re 23 course, there’s been considerable progress since that 23 going to have with a lot of the other creators in this 24 time, but licensing challenges do still exist in 24 room. And I’ll review some of these in the 25 today's digital world. And we've organized this 25 presentation. Obviously, value gap is one that is big 6 8 1 meeting building on its predecessors in 2016 and 2018 1 for a lot of them, but also things like framing, 2 to facilitate a cross-industry dialogue on ways to 2 collective rights, fair use in the United States, and 3 promote an even more robust and collaborative digital 3 other issues. 4 online marketplace, including to provide updates on 4 So first I want to talk about value gap, 5 various technologies and to highlight the new 5 which everyone is probably familiar with this as 6 initiatives that many of you are working on. 6 representatives of creative content. According to the 7 So we’ll start today’s meeting with an 7 2018 Global Collections Report published by CISAC, the 8 overview of how different content industries are 8 International Confederation of Societies of Authors 9 evolving in the digital economy and then we’ll talk 9 and Composers, which ARS is governed by, global 10 about developments in the identification of content, 10 royalties for all types of creators rose to a record 11 registries, and rights management, and current issues 11 high of $9.6 billion euros in 2017, which is up -- 12 surrounding licensing and monetization. 12 it’s about 11 billion US dollars -- up 6.2 percent 13 So we’re very much looking forward to a 13 from 2017. Royalties from digital income are reported 14 productive exchange of ideas and again are delighted 14 over the 1 billion mark for the first time ever, a 24 15 to see all of you with us. Thank you. 15 percent increase from 2017. And digital collections 16 (Applause.) 16 have nearly tripled, up 166 percent in the last five 17 17 years. 18 18 Despite digital’s rise for all repertoires, 19 19 revenues from digital uses remain far below other 20 20 usage types. The CISAC report reads only 13 percent 21 21 of creators’ royalties come from digital sources, a 22 22 reflection of the gross mismatch between the volume of 23 23 creative work being made available via digital 24 24 channels and the amounts returned to creators, clear 25 25 reference to this value gap. 2 (Pages 5 to 8) For The Record, Inc. (301) 870-8025 - www.ftrinc.net - (800) 921-5555 Third Public Meeting Developing the Digital Marketplace for Copyrighted Works 3/28/2019 9 11 1 So much online material is not cleared, and 1 frames an image using inline linking when it uses HTML 2 what is our recourse for visual artists is we have, 2 code to direct a user’s browser to an image file 3 of course, the DMCA takedown notice. Visual artists 3 located and transmitted from a server controlled by a 4 do this actually for Artists Rights Society.