1 1 2 3 DEPARTMENT OF COMMERCE 4 INTERNET POLICY TASK FORCE 5 6 7 8 Developing the Digital Marketplace 9 for Copyrighted Works 10 Second Public Meeting 11 12 13 14 15 United States Patent and Trademark Office 16 Madison Auditorium 17 January 25, 2018, 9:00 a.m. 18 19 20 21 22 23 24 Digitally recorded by: Linda D. Metcalf, CER 25 Transcribed by: Susanne Bergling, RMR-CRR-CLR 2 1 C O N T E N T S 2 SESSION PAGE 3 4 WELCOME - KAREN FERRITER 3 5 6 KEYNOTE SPEAKER - BILL ROSENBLATT 5 7 8 MORNING PANEL 1 25 9 10 PRESENTATION – PEX 66 11 12 MORNING PANEL 2 73 13 14 PRESENTATION - LOBSTER 119 15 16 PRESENTATION - COPYRIGHT HUB 123 17 18 AFTERNOON PANEL 1 130 19 20 AFTERNOON PANEL 2 176 21 22 AFTERNOON PLENARY DISCUSSION 221 23 24 CLOSING REMARKS 242 25 26 3 1 P R O C E E D I N G S 2 - - - - - 3 WELCOME REMARKS 4 - - - - - 5 MS. FERRITER: Good morning and welcome to the 6 U.S. Patent and Trademark Office. I'm very glad to 7 see so many with us here today in person. I'd like to 8 also welcome those watching us via webcast and those 9 joining us through the watch parties being held at the 10 USPTO's regional offices in Detroit, Denver, and San 11 Jose. 12 Today's meeting is hosted by the Department of 13 Commerce's Internet Policy Task Force. The Task Force 14 was formed in 2010 to review the policy and 15 operational issues that affect the private sector's 16 ability to spur economic growth and job creation 17 through the internet. 18 The USPTO and NTIA have led its work on 19 copyright policy issues, including the topic of how 20 the government can facilitate the further development 21 of a robust online licensing environment. We have 22 held public meetings and received public comments on 23 this topic, which was discussed in the Task Force's 24 2013 Green Paper on Copyright Policy, Creativity, and 25 Innovation in the Digital Economy. 4 1 The Green Paper devoted a chapter to ensuring 2 an efficient online marketplace. It looked at 3 then-current examples of legal licensing options and 4 noted some impediments to efficient licensing for 5 online distribution. These included: the complexity 6 of licensing in the online environment, in particular 7 in the music licensing space; challenges with mapping 8 old contracts to new uses; and licensing across 9 borders. 10 Copyright owners continue to face challenges in 11 today's digital world. Today's meeting -- building on 12 one that the Task Force held in December 2016 -- has 13 been organized to: facilitate a cross-industry 14 dialogue among stakeholders on ways of promoting a 15 more robust and collaborative digital online 16 marketplace; provide updates on various technologies; 17 and highlight new international initiatives. 18 We've brought together a number of experts 19 today to discuss the developments in the 20 identification of content, the future of registries, 21 and issues surrounding licensing and monetization of 22 content. And this year, we have added a fourth panel 23 to discuss global initiatives, which underscores the 24 international nature and scope of these important 25 discussions. We are looking forward to a productive 5 1 exchange of ideas today, and we are grateful for your 2 participation. 3 A few housekeeping notes: We'll start with two 4 panels this morning before breaking for lunch. Our 5 panelists are invited to have lunch in the room next 6 door. Following lunch, we will have more panels, 7 followed by breakout sessions. The breakout sessions 8 will follow Chatham House rules. The moderator for 9 each session will report back to the plenary just the 10 key points of the sessions. Finally, we have built in 11 time for discussion. Thank you again for being here. 12 I'd now like to introduce our first speaker, 13 Bill Rosenblatt of GiantSteps Media. Bill is a 14 globally recognized authority on technology issues 15 pertaining to intellectual property in the digital 16 age. He has contributed to standards initiatives 17 related to content identification, metadata, and 18 rights. Bill chairs an annual Copyright and 19 Technology conference, and is the author of several 20 books and journal articles related to digital media 21 and copyright. 22 - - - - - 23 KEYNOTE SPEAKER 24 ENABLING EFFICIENT AND FAIR MARKETS FOR CONTENT 25 - - - - - 6 1 MR. ROSENBLATT: Good morning. Thank you very 2 much. Thanks to Steve and Susan for inviting me here. 3 It's really an honor to be here and to participate in 4 this workshop, which I know was so productive last 5 year, and I am looking forward to another productive 6 day today. 7 I am from New York and I speak very fast, and 8 this morning will be no exception. I have 20 minutes, 9 and I thought, what can I do in 20 minutes? Well, 10 first of all, just a little bit more about me. I've 11 participated in a veritable alphabet soup of standards 12 initiatives and with public policy organizations here 13 in the U.S. and also abroad, in Europe and Asia and so 14 forth, and you can just sort of read it yourself on 15 the slides -- on the slide there. And so -- and this 16 is in addition to the work that I do for companies as 17 a consultant, but we're focusing here on standards, 18 we're focusing here on policy issues, so that's what 19 I'm highlighting here. 20 What we're talking about today is several 21 topics under the umbrella of enabling fair and 22 efficient content marketplaces, and specifically 23 technical components thereof, and this is a list of a 24 lot of the topics that we're going to discuss today: 25 content identification, rights holder identification, 7 1 metadata, rights information, information about the 2 rights being licensed or transacted. We're going to 3 talk a lot about registries and data repositories, 4 talk about the automation of licensing, and talk about 5 the processing of transactions, of royalties, and 6 other considerations for content licensing. 7 So where do these come from? It's useful to 8 sort of enumerate the sources of these things. 9 Industry conventions are a lot of it. How have we 10 done things in various segments of the industries for 11 a long time? Laws that underpin certain aspects of 12 rights and licensing, such as compulsory licenses 13 under Sections 114 and 115 of the Copyright Act, 14 technical standards, business standards, and also 15 entrepreneurship on the part of startups and 16 experimentation in established companies, which is 17 really important to emphasize as a source of progress 18 in these areas, and then sharing of best practices, 19 which is certainly something we're going to be doing 20 here today. 21 So, you know, I've been doing this kind of 22 thing for a while, and what I thought I'd do this 23 morning -- again, quickly, because I only have 20 24 minutes -- is to give you some lessons that I believe 25 we've learned over the past 20 years since I first 8 1 started doing this as a member of a committee in the 2 Association of American Publishers, when I was working 3 in the book publishing industry. 4 This is an actual slide that I made about 20 5 years ago or -- yeah, thereabouts, 20 years ago. I'm 6 not going to go over this detail, but it just shows 7 you the way we thought about this stuff back in the 8 late 1990s, which is that you've got these various 9 layers of technical components and potential 10 standards, starting with the basic internet 11 infrastructure, then going up through basic e-commerce 12 infrastructure, then going up through things that are 13 endemic to the content industry, such as identifiers 14 and rights and metadata, and then going up to 15 individual content providers who have things that are 16 really their own competitive advantage rather than 17 standards. 18 So I'll tell you one of the fundamental things 19 we got wrong about this momentarily, but -- and I'm 20 happy to share the slides for anyone who wants them, 21 so put your cameras away, you don't need to take 22 pictures -- but the lessons that we learned. Well, 23 here -- there are many of them, but here's the four 24 that I want to talk about this morning. 25 The first one is what we fundamentally got 9 1 wrong in that last slide, which is that we -- meaning 2 publishers in that time -- we don't control the vast 3 majority of the technical decisions. Publishers, 4 record labels, movie studios, et cetera, don't really 5 control much of the technical aspects of how content 6 gets out into the world. 7 The distributors have come to control that, and 8 one interesting piece of -- let's call it "anecdata" 9 -- that I came up with when looking at this a few 10 months ago for something I was doing is that the sum 11 total of revenue of music distributors in the United 12 States, the Spotifies, Apple Musics, Google Plays, 13 Rhapsody Title, et cetera, et cetera, has exceeded the 14 sum total of revenue in the recorded music industry, 15 and that crossover point took place about three, four 16 years ago, so that to me says a lot about the dynamics 17 of the industry that's going on.