Content & Technology Policy Report May 20, 2016

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CONTENT & TECHNOLOGY POLICY REPORT MAY 20, 2016

I. Congressional Updates: Headlines and Highlights: • On Tuesday, the House Appropriations Committee approved the FY2017 Legislative Branch appropriations bill. The • The House Appropriations legislation provides $629 million for the Library of Congress Committee approves FY2017 (LOC), an increase of $29 million above the fiscal year 2016 Library of Congress and enacted level. LOC funding in the bill will support migration Copyright Office budget. of the Library’s Primary Computing Facility to an alternate facility, as the current facility can no longer provide the level • The ITC released its report of data center reliability and resiliency that is required to this week on the likely support LOC operations; the Copyright Office is directed to economic impact of the TPP. utilize this new hosting facility as its primary data storage unit. The bill provides the Copyright Office with • Senators Hatch and Cornyn $68,827,000, $4,000,000 of which would support Copyright wrote letters to FCC Office modernization. Of the funding approved for the Chairman Wheeler regarding Copyright Office, $4,531,000 will be derived from prior year the set-top box proposal. unobligated funds. The bill report language directs the Copyright Office, in coordination with the LOC’s Chief In the Blogs: Information Officer, to modify its IT upgrade plan to include cost estimates and a timeline for execution. The Committee Stay Down Provision Will Not also requires the plan include a funding strategy based on the “Entrench” YouTube Dominance public comments received on the draft. “We expect these Illusion of More comments will give Congress a path to move forward on a May 16 by David Newhoff funding strategy to implement modernization. The Committee remains convinced that the Copyright community will support Bogus fair use claims hurt a fee structure change alongside a commitment from creators already victimized by Congress to improve the Copyright system.” The report also piracy requires the IT upgrade plan include a “comparison between Vox Indie the software and requirements used by the recently May 17 by Ellen Seidler modernized Patent and Trademark Office’s Trademark processes and the software the Copyright Office plans to ESPN Upfront Showcases New implement.” The modified plan is due to the Committee Digital Platforms and within 90 days of the FY2017 appropriations bill signing into Programming Slate law. Disney Post May 17 1

• Senator Hatch (R-UT) wrote a letter to FCC Chairman Tom Wheeler on Wednesday, expressing concerns over the FCC set-top box proposal and its potential impact on copyright. “Approaches that ignore the need for licensing or undercut existing licensing agreements will likely increase costs for consumers, reduce choices, and discourage innovation,” Hatch wrote, adding that “The terms of the licensing agreements between MVPDs and programmers are the key mechanism for protecting copyrights of content owners, and these are the very terms that third-party devices and apps will be permitted to disregard under the FCC’s proposal.” Senate Majority Whip John Cornyn (R-TX) also sent a letter to Chairman Wheeler this week seeking additional information on the set-top box issue.

II. Judicial Updates:

• This week, William Mollett, the son-in-law of Gordon Murray, creator of the British children’s TV series Trumpton, Chigley and Camberwick Green accused the English rock band Radiohead of breaching the Trumptonshire copyright with their newly released video for the single “Burn the Witch.” The video, which Mollett claims “tarnishes” the Trumptonshire brand, unmistakably features Trumptonshire characters and employs a similar stop-motion animation to depict an outsider ending up inside a burning wicker man. Read more here.

• This week, members of the music industry, including record labels Universal, Sony and Warner suspended their case seeking to block access to the torrent website, KickassTorrents, in Australia. Reportedly, the case was temporarily suspended as a way to cut legal costs while the record labels await the outcome of two other key cases underway in Australia, both of which involve similar requests to block pirate sites. The two disputes involve the television provider Foxtel, who is targeting torrent sites like The Pirate Bay, while the other features Roadshow Films, taking on the streaming portal Solarmovie. In both cases the ISP’s do not dispute blocking the sites, but believe they should not be responsible for financing the operation. Read more here.

III. Administration Updates:

• On Wednesday, the U.S. International Trade Commission (ITC) released their report on the likely impact of the Trans-Pacific Partnership (TPP) on the U.S. economy. The report, titled Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors, assessed that the TPP’s intellectual property protections would “likely benefit U.S. industries that rely on trademarks, patents, and copyrights,” by “reducing their losses from infringement and increasing exports of IPR-intensive services and goods, as well as foreign affiliate sales opportunities.” Read the report here. Following the release of the report, Senate Finance Committee Chairman Orrin Hatch (R-UT) said the “agreement has the potential to yield significant economic benefits for American manufacturers, farmers, ranchers, and entrepreneurs…We have a real opportunity to deliver a pro-growth trade agreement that will expand the economy, promote job growth, and provide better paychecks for more Americans. But, again, this is a once-in-a-lifetime opportunity, and we have to make sure that we get it right.” Meanwhile, U.S. Trade Representative (USTR) Michael Froman said “the ITC report provides another strong argument for why TPP should be passed this year.”

• President Obama will highlight the benefits of the TPP and will attempt to advance talks on the TTIP when he travels to Vietnam and Japan next week, administration officials said on Thursday. Ambassador Froman will also travel with President Obama and said he expects to discuss the TPP ratification process at the G7 meeting in Ise-Shima, Japan on May 26th and 27th.

IV. International Updates:

• On Sunday, economic consultancy firm Oxera and media consultancy firm Oliver & Ohlbaum released a study titled “The Impact of Cross-Border Access to Audiovisual Content on EU Consumers.” The 99-page report analyzes the potential impact of the EU’s Digital Single Market, a strategy aimed at easing cross-border access of online content in one EU country by citizens in another. The study says that borderless access to online content would expose the industry to “Producer revenue losses up to $9.3 billion, a drop in content of up to 48% for TV content and 37% for films, and consumer welfare losses of up to $10.5 billion.” Sean McGuire, of Oliver & Ohlbaum, said that unrestricted cross-border access “undermines the economic model the industry is built on…territory-territory- licensing.” However, Andrus Ansip, the European Commission official in charge of the DSM project, called the outrage “overblown,” adding “We never said that we will destroy this system…but access has to be made easier for EU consumers.” Read more here.

• On Thursday, the Australian book industry held its annual awards gala and many of the award-winners and attendees raised concerns about the future of Australia’s literary culture if the Turnbull government’s proposed changes to copyright law and import restrictions— changes Australian authors claim would flood the market with cheap overseas editions of books—are successful. Magda Szubanski, winner of best biography and book of the year for Reckoning: A Memoir, said “My message is really simple: if this comes in, I will not write another book and I will really start thinking about leaving the country…to actually stand by while sanctioned theft takes place? Do you think I’m a complete fool?” Read more here.

V. Industry Updates:

• This week, IBM submitted a patent application for a printer that will not copy or print any copyright-infringing material. The patent application, titled “Copyright Infringement Prevention,” will parse content for potentially copyrighted material and would refuse to print material without proper authorization. IBM has indicated that it could use ISBN numbers and U.S. Copyright Office records to help determine if a work is copyrighted. Read more here.

• On Sunday, Grammy-award winning musician Maria Scheider penned an open letter to YouTube, dubbing them “pushers” of piracy and advocating for them to lose their “safe harbor” status, per section 512 of the DMCA. “YouTube allows infringers to ‘monetize’ illegally uploaded work,” Schneider wrote, “and even after a takedown, YouTube and the infringers keep their past illegal profits for themselves.” Beyond criticizing YouTube and its parent company, Alphabet Inc., Schneider also took aim at Congress, who she claims are “hypnotized” by Alphabet Inc. lobbyists, and implores them to “defend the Constitution and the citizens of this country” by removing YouTube’s safe harbor status. Read more here.

• Google announced this week that Google Image users will now see ads for related products when using the service on a mobile device. Googles announcement comes on the heels of an April antitrust complaint against the search-engine giant, filed in the EU by the U.S. photo agency Getty Images. Getty has accused Google’s Image service, which began displaying high-resolution images in users’ search results back in 2013, of “using its images in a way that diverts customers away from Getty’s own website,” threatening the competitiveness of the site and the livelihoods of thousands of photographers around the world.

• On Tuesday, the Copyright Office published a Notice of Inquiry seeking public comment on a proposed rule to require publishers of web-only e-books and sound recordings to provide copies of their publications to the Library of Congress. Interested parties have until July 18th to submit written comments. Read more here.

• Jonathan Taplin, director of the Annenberg Innovation Lab at the University of Southern California, authored an op-ed on Friday titled, “Do You Love Music? Silicon Valley Doesn’t.” In the article, Taplin criticizes tech giants like Google and SiriusXM, alongside streaming services like Pandora for using their platforms to siphon revenue away from musicians. Taplin points out that the last meaningful legislation in this area, the 1998 Digital Millennium Copyright Act, is failing to protect musicians. He suggests Congress “update the safe harbor rules of the copyright act to achieve the balance that was intended” and pass the Fair Play Fair Pay Act of 2015 to ensure musicians receive fair market value for their work.

• On Thursday, the Creative Rights Caucus, in partnership with the Motion Picture Association of America, Recording Industry Association of America, and other industry members, held a briefing on the FCC set-top box proposal. The briefing, titled “The FCC Set-Top Box Proposal: How Does it Impact the Creative Economy?” featured four panelists: Victor Cerda, Senior Vice President of Corporate Strategy at Vme TV, Alec French from the International Alliance of Theatrical Stage Employees and the Directors Guild of America, Neil Fried, Senior Vice President of Government & Regulatory Affairs for the Motion Picture Association of America, Inc., and Steven Marks, Chief Digital Business & General Counsel for the Recording Industry Association of America. The panelists expressed their concerns about the set-top box proposal and the potential unintended impact it will have on creativity, content theft, and the millions of Americans who work in the film, television, and movie industries. Neil Fried expressed concern that third party set top box distributors could potentially manipulate content.