MESSAGE
| DATE | 2004-09-10 |
| FROM | Ruben Safir Secretary NYLXS
|
| SUBJECT | Subject: [hangout] INDUCE: Copyright Office Recommended Statutory Language
|
The following effort to change copyright law MUST be opposed, and
everyone should call their
Congressmen now about this bill, and run off a paper mail to Washington
in opposition to this
law.
Do NOT be decieved by the preceived benigness of this statute, about
willfulness etc.
This Bill will flatout make everyone who ever wrote a peice of Software
to distribute information
eligible for legal extortion. Everyone knows that when a well funded
organization wants to
kill something, may it be a private patent, or copyright, they simply
drag you through the courts
until your broke and broken.
It will be up to YOU to prove your intent in court!!!!
Ruben
RECOMMENDED STATUTORY LANGUAGE
Section 501 of title 17, United States Code, is amended by adding
at the end the following:
(g)(1) INDUCEMENT OF INFRINGEMENT - Whoever manufactures, offers
to the public, provides, or otherwise traffics in any product or
service, such as a computer program, technology, device or
component, that is a cause of individuals engaging in infringing
public dissemination of copyrighted works shall be liable as an
infringer where such activity:
(A) relies on infringing public dissemination for its commercial
viability;
(B) derives a predominant portion of its revenues from infringing
public dissemination; or
(C) principally relies on infringing public dissemination to
attract individuals to the product or service.
(2) For the purposes of this subsection, "public dissemination"
means digital transmission to the public of copies or
phonorecords or any other exercise of any of the rights set
forth in sections 106(3), 106(4), 106(5) or 106(6).
(3) LIMITATIONS ON REMEDIES - (A) No award of statutory damages
under Section 504(c) shall be made for a violation of this
subsection unless the copyright owner sustains the burden of
proving, and the court finds, that such violation was committed
willfully. (B) In granting injunctive relief under Section 502
for a violation of this subsection, the court shall, to the
extent practicable, limit the scope of the injunctive relief so
as not to prevent or restrain noninfringing uses of the product
or service.
(4) Nothing in this subsection shall enlarge or diminish the
doctrines of vicarious liability and contributory infringement,
including any defenses thereto or any limitations on rights or
remedies for infringement. Nothing in this subsection shall
enlarge or diminish liability for infringement of the exclusive
rights in sections 106(1) or 106(2).
EXPLANATORY MEMORANDUM
Introduction
In developing this recommendation, the Copyright Office reviewed
comments from and engaged in constructive discussions with a
wide variety of interested parties, including American
Federation of Television and Radio Artists, Association of
American Publishers, Broadcast Music, Inc., Business Software
Alliance, Center for Democracy & Technology, Consumer
Electronics Association, Corbis, Digital Future Coalition,
Digital Media Association, Distributed Computing Industry
Association, Entertainment Software Association, Future of Music
Coalition, IBM, IEEE, Information Technology Association of
America, Internet Commerce Coalition, Motion Picture Association
of America, NetCoalition, Public Knowledge, Recording Artists
Coalition, Recording Industry Association of America, Software
and Information Industry Association, Sun Microsystems, Verizon,
and the Video Software Dealers Association. Senate Judiciary
staff met with several groups individually to discuss the bill
and examine proposed changes, and they shared the results of
those meeting with us. We reviewed the thoughtful proposals for
statutory language submitted by IEEE, NetCoalition, Consumer
Electronics Association and the Business Software Alliance.
After the individual meetings held by Committee staff, Jule L.
Sigall, Associate Register for Policy & International Affairs,
moderated a group meeting in late August with interested parties
identified by the staff. At this meeting, the various
alternatives and ideas contained in the proposals were discussed
with the parties in a constructive dialogue. Based on that
discussion and the written proposals, the Copyright Office
circulated a discussion draft to the parties that was intended
to reflect the ideas discussed in the meeting in more concrete
terms. We made clear that this discussion draft was not a draft
of the Office's recommendation; rather, it was designed to
provoke comment and feedback on the many different concepts put
forth in the various proposals so that the Office could be fully
informed on the parties' views on all aspects of this issue.
We received written comments from nearly all of the interested
parties on the discussion draft, and held a meeting on September
7 to discuss those comments with the parties. Several groups
who commented on the discussion draft but were not originally
identified by Committee staff as participants requested to and
did participate in that meeting. In all cases, these meetings
and discussions were highly constructive, with the parties
considering the issues forthrightly and providing thoughtful
feedback and information on the many different issues involved.
Description of Recommendation
This recommendation reflects an effort to meet the goals
expressed for this legislation by the cosponsors of S. 2560 at
the July 22 hearing and in their August 13 letter. First, the
bill should be technology-neutral, and should not impose
liability based on the use of any particular technology but on
the circumstances in which that technology is used. Second, it
should provide an effective cause of action against those
services who today are establishing massive networks of
copyright infringement through the use of peer-to-peer
technology, but be flexible enough to accommodate new,
unforeseen situations in the future. Third, the bill should not
chill innovation by unnecessarily creating the threat of
liability for developers and distributors of technology who are
not engaged in encouraging and profiting from copyright
infringement. Fourth, the bill should also preserve the
decision by the Supreme Court in Sony Corp. v. Universal City
Studios, Inc., 464 U.S. 417 (1984), often referred to as the
Betamax case. We have strived to meet all of these goals in our
recommendation, despite the great difficulty that exists in
reconciling these important and sometimes conflicting issues.
In light of the variety of conflicting proposals put forth by
the parties and the many issues involved, it was not possible to
achieve consensus for this recommendation in the time we had.
What we have attempted to do is recommend an approach that
accommodates the legitimate concerns of all the parties, and
therefore we believe it presents the best chance to serve as
basis for developing consensus for this legislation.
Our effort to develop consensus proposals began with the text of
S. 2560, and we engaged in a discussion with the interested
parties of additional language that would clarify the scope of
the bill and assuage concerns of technology companies and others
about its application. The bill as introduced reflects a
"behavior-based" approach, which has the decided advantage of
focusing not on the technology involved but on the defendant's
actions. NetCoalition and IEEE offered alternatives that would
codify all secondary liability doctrines, including a form of
inducement liability. Another approach was offered by Consumer
Electronics Association, which would create liability for a
narrow class of activity of distributing a computer program
specifically designed to encourage mass, indiscriminate
infringing distribution. The Business Software Alliance
proposed changes to S. 2560 that it asserted would make the bill
more specific and give more comfort to technology companies
about the scope of liability under the bill. Our discussion
draft attempted to capture as many of the concepts in these
proposals as possible so that we could hear the parties' views
on them before making our recommendation.
A concern raised by technology companies about the
behavior-based approach was that it did not provide enough
guidance on what activity was subject to liability and what was
not. Also, it was claimed that an approach that focused on
intent would likely not be susceptible to summary adjudication,
but would require expensive jury trials for resolution of the
liability question. To address these concerns, some parties
offered the CEA proposal as an alternative, claiming that it
offered more objectivity and a clearer standard of liability,
even though it, by its terms, contains elements of intent and
behavior, and an element examining the design of technology. Our
discussion draft provoked many comments, and parties on both
sides had concerns about many of the provisions. One concept
that did not draw much criticism, and garnered some support from
one technology group, was a provision that made liability turn
on whether the defendant provided technology as part of an
operation that relied on infringement for its commercial
viability or for a predominant portion of its revenues. The CEA
proposal also contains a variation of this concept, albeit used
in a different context.
After serious consideration of the issues raised by these
alternative approaches, we have concluded that none of these
approaches by itself accommodates the legitimate concerns of all
parties and meets the goals described above. However, each has
positive aspects to it that have contributed to our
recommendation. We have concluded that enacting a separate form
of liability, as S. 2560 would, is the preferable course to
take, rather than codifying all forms of secondary liability,
given the long history these existing doctrines have and the
myriad of additional issues that would be raised if their
codification were considered as part of this effort. We started
with the general concept in the CEA proposal of clearly
identifying the activity that creates liability, but modified
that draft substantially to make it meet the goals described
above, particularly the goal of creating a form of liability
that can accommodate changes in the way technology is used in
the future.
This approach focuses neither on technology nor behavior
generally, but specifically on the business model in which a
technology is employed, essentially revolving around the
question of whether the defendant is relying on infringement to
build a business around its product or service. Our decision
was based in part on the relatively positive feedback described
above that we received on this "business model" concept. We
believe that this approach best serves the goal of both
capturing the existing peer-to-peer services built on widespread
infringement, yet remaining flexible enough to address potential
use of new technology by "bad actors" in the future that we
cannot predict right now, just as we could not predict the
imminent phenomenon of massive infringement by means of
peer-to-peer when the Digital Millennium Copyright Act was
enacted in 1998. Experience has taught us that legislation that
focuses on a particular technology is likely to be obsolescent
from the moment it is enacted, and waiting to enact new
legislation to address new technological developments inevitably
is a Sisyphysian effort.
Subsection 501(g)(1)
Our recommendation would create a new subsection (g) to section
501 of the Copyright Act. The operative provision on liability
is set forth in paragraph (g)(1). This provision narrows the
existing bill considerably, as it only applies to situations
where technology is employed as a cause of "infringing public
dissemination." As explained below, "public dissemination" is
defined in paragraph (2) to exclude direct infringement that
implicates only the reproduction or derivative work rights. In
other words, this recommendation would not impose liability on
any product or service that is a cause of only private
reproductions, such as the VCR, CD-burners, or the typical
portable music player. Liability, if any, for conduct related
to such personal reproduction technology remains the province of
existing copyright law, and is not affected in any way by this
new form of liability. Furthermore, liability would be imposed
only in one of three circumstances, each of which turns on the
importance of the infringing use of the product or service to
the defendant's commercial interest or efforts to attract the
public to their product or service. Liability would result if
the technology is "a cause" of individuals engaging in
infringing public dissemination of copyrighted works. We
considered predicating liability on whether the defendant has
"induced" or "caused" infringement, but after careful
consideration concluded that neither of those words clearly
expresses the appropriate causal connection between the actions
of the defendant and the infringing acts of a third party.
Although the theory of liability is based on concepts of
inducement, as reflected in the caption of subsection (g)(1),
discussions on this issue revealed a great deal of concern over
the precise meaning of the term "induce" and little agreement
over what the meaning of that term as used in the bill should
be. Predicating liability on whether the defendant "causes"
infringement could be interpreted as requiring that the
defendant's conduct be the proximate or ultimate cause of the
infringement, which we rejected as too high a burden. Obviously,
the proximate cause of any act of infringement is most likely
going to be the volitional act of the individual who engaged in
the infringement, rather than any acts of a person who has
induced an individual to infringe. We concluded that, combined
with the three conditions set forth in subparagraphs
(g)(1)(A)-(C), simply requiring that the defendant's conduct be
"a cause" of the infringement reflects the appropriate balance.
The key factor in determining liability lies in the three
conditions, at least one of which must be met, in order for
liability to be imposed. Each of these conditions set forth in
subparagraphs (g)(1)(A)-(C) turns on the importance of the
infringing use of the product or service to the defendant's
commercial interest or efforts to attract the public to its
product or service. The third condition in subparagraph (C)
would allow liability to be imposed where a defendant attracts
consumers to its product or service primarily through
infringement but has not undertaken the activity for commercial
purposes.
The approach taken here seeks to avoid the controversial issues
surrounding the various alternatives and focus liability on the
business model adopted by the defendant. If the defendant
distributes its product or service as part of an enterprise that
relies on infringement to attract customers, remain commercially
viable or earn a predominant portion of its revenues, it will be
liable under this provision. Under this approach, there is no
need for the courts to get into thorny questions about how a
particular technology was designed, what its particular
functions can or can't do, or difficult questions of intent. In
essence, this approach determines whether inducement has
occurred through an objective test of how the technology is
deployed as part of the defendant's business.
The analysis under these three provisions would focus on the
defendant's "activity" of manufacturing, distributing or
providing the product or service, and in cases where a
particular activity is a part of a larger operation, the court
should isolate the defendant's activity that is a cause of the
infringement at issue from the rest of the organization for
purpose of analyzing whether any of the three conditions apply.
For example, if a large software and services company has a
division that begins distributing a device that is a cause of
infringing dissemination, the revenues and commercial viability
of the other parts of the company would not be considered in the
analysis of subparagraphs (g)(1)(A)-(C); thus, whether or not an
entire organization's revenues are derived from infringement
would have no bearing on liability, but only whether the
activity in question depends on infringement for its commercial
viability or that activity's revenues predominantly derive from
infringement. We intend "derives a predominant portion of its
revenues from infringing public dissemination" to mean that more
of the revenues from that particular activity can trace their
origin to infringing public dissemination (e.g. to purchases by
persons who are using the product or service for purposes of
infringing public dissemination) that to all other sources; i.e.
more than fifty percent of revenues are derived from infringing
public dissemination.
Section 501(g)(2)
Paragraph (2) defines "public dissemination" as the exercise of
the so-called "public" rights under copyright: distribution of
copies to the public, public performance, public display and
public performance of sound recordings by means of digital audio
transmission. It also makes clear that distribution by digital
transmission to the public is covered, to leave no doubt that
the form of infringing distribution occurring on peer-to-peer
services falls within the form of direct infringement that
serves as a predicate for liability under this new provision.
The term "digital transmission" is already defined in section
101 of the statute, and a similar formulation to that here is
used in Section 115(c)(3)(A), which makes clear that the
mechanical compulsory license includes the right to "distribute
or authorize the distribution of a phonorecord … by means of a
digital transmission …." See also, e.g., A&M Records, Inc. v.
Napster, Inc., 239 F.3d 1004, 1014 (9th Cir. 2001). We have
also included the public performance and public display rights
to cover services that do not distribute copies but still
infringe by making works available to the public in the form of
performances and displays, such as peer-to-peer webcasting
services. However, the mere infringement of the reproduction
right or the derivative work right, without any of these
additional elements, would not constitute "public
dissemination." This should allay the concerns of those who
fear that the legislation could be used to target manufacturers
and marketers of devices used for personal copying.
Section 501(g)(3)
Because paragraph (1) makes those liable under this subsection
as "an infringer," all of the remedies available under Chapter 5
of the Copyright Act are available in actions under this
subsection. However, paragraph (3) provides two important
limitations on those remedies, one of which is based on a
proposal made by IEEE regarding limitations on monetary relief.
First, statutory damages, of any level, are not available for
violations of this new provision unless the copyright owner
proves that the violation of subsection (g)(1) was willful.
This provision was drafted to address concerns raised by
technology companies that the specter of liability under this
theory might chill innovation, and a limitation on statutory
damages should help to ally those concerns, since a nonwillful
violator would only be liable for the actual damages and lost
profits that the plaintiff could prove the defendant had
caused. Also responsive to this concern is the existing Section
505 of the Copyright Act, which allows a court to award
attorney's fees to a prevailing defendant in "any civil action"
under title 17, which would include this new form of liability.
Second, a court that issues an injunction under this subsection
must, where practicable, fashion the scope of the injunction not
to restrain or prevent the noninfringing uses of the product or
service at issue. This is a critical aspect of the Sony
decision, which sought to prevent copyright liability from
inhibiting the noninfringing use of technology. Thus, in the
peer-to-peer context, an injunction might prohibit those features
of a peer-to-peer service that cause infringement, but would not
prohibit the service or the technology itself.
Section 501(g)(4)
This paragraph provides savings clauses to ensure that this new
form of liability does not affect the existing doctrines of
secondary liability, as well as the defenses and limitations on
remedies for such liability. It also makes clear that this new
provision does not affect existing law of liability for
infringement of the rights of reproduction and preparing
derivative works, which are not predicate acts for liability
under this recommendation.
As with the remedies provisions in Chapter 5, which are fully
applicable to this new cause of action, the limitations on
liability in Section 512 also apply fully to this new
provision. Thus, even in the unlikely case that a qualifying
"service provider" would meet the criteria for liability under
this provision, it would still be entitled to the limitations on
liability in Section 512, if it met the conditions of those
provisions. Like the new form of liability contained in the CEA
proposal, the recommendation does not make the defense
recognized in the Sony decision regarding capability of
noninfringing uses applicable to this new form of liability.
Application of the Sony defense to this new form of liability is
unnecessary, as the concerns underlying that decision are
accommodated in this recommendation. First, the
recommendation's narrowed scope, addressing technologies of
"public dissemination," confines it to circumstances not present
in the Sony case, which involved personal copying technology in
the form of the VCR, not distribution technology. Second,
liability under this provision does not turn on a product's or
service's capabilities, features or design - rather, it depends
on the business model in which that product or service is
offered. The very same technology may result in liability when
offered by one defendant and not result in liability when
offered by another, depending on how each defendant relies on
the infringing use of the technology to attract consumers or
earn revenues. In this way, the recommendation avoids the
concern expressed by groups like IEEE and BSA over having the
courts engage in searching review of a technology's design or
capabilities to determine liability. Third, as noted above, the
limitation on injunctive relief that requires a court to
accommodate noninfringing uses as much as practicable vindicates
the most important concern underlying the Sony case - that
unrelated areas of commerce not be burdened by copyright
liability. Fourth, the savings clause makes clear that Sony
remains fully applicable to causes of action under the existing
doctrines of secondary liability.
--------------------------------------------------------------------
James S. Tyre
mailto:jstyre-at-jstyre.com
Law Offices of James S. Tyre
310-839-4114/310-839-4602(fax)
10736 Jefferson Blvd., #512 Culver City, CA
90230-4969
Co-founder, The Censorware Project
http://censorware.net
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