Proposal for Reform of Copyright Act Released for Public Comment – Including Changes for the Safe Harbor for User-Generated Content, the Status of the Copyright Office, and Orphan Works

During the holidays, we did not get a chance to mention the draft legislation circulated by Senator Thom Tillis (R-NC) proposing changes in the Copyright Act, including the provisions of the Digital Millennium Copyright Act that created Section 512 of the Act – the safe harbor for user-generated content.  The legislation also proposes other changes in the law, including changing the structure of the Copyright Office by making it an Executive Branch agency with substantive rulemaking authority, as part of the Commerce Department.  The legislation (a full copy is available here and a summary can be found here) was not formally introduced in the waning days of the last Congress.  Instead, Senator Tillis released it for public comment with the intent that the draft would be refined based on those comments before being formally introduced for legislative consideration.  The Senator is seeking comments by March 5, 2021 from all interested parties to determine how the proposals would affect their interests.  Press releases from his office indicate that he is seeking input from a broad array of interests, from the creative community to the tech companies that use copyrighted content to consumers who may find that the platforms they use might police content differently if there are changes in the law.

Reform of the DMCA safe harbor provisions has long been sought by copyright holders who feel that the insulation from liability afforded to tech companies who host content created by others has led to widespread infringement of copyrighted materials.  We wrote at length about these issues in 2016 when the Copyright Office itself reviewed questions about user-generated content (see, for instance, our articles here and here).  In many ways, the issues with Section 512 are similar to those about Section 230 of the Communications Decency Act – the extent to which big tech companies hosting user-generated content should be liable for that content and should take efforts to police content on their platforms.  Section 230 provides insulation from civil liability other than that which arises under the intellectual property laws (so it protects online hosting companies from liability for matters including defamation or invasion of privacy – see our post here), while Section 512 provides insulation from liability for intellectual property infringement.  However, the Section 512 procedures for obtaining insulation from liability are different from, and in many cases are more stringent than, those under Section 230.

Among the requirements of Section 512 is that the hosting company take down infringing content when notified of specific content that infringes on any copyright.  The law requires that the online service that is hosting user-generated content register with the Copyright Office and provide a specific contact to be notified when a copyright owner finds an infringing use (see our articles on this registration process here and here).  Under current law, the take-down notice must be specific as to the content that is infringing – and it is only that specific content that is taken down.  Copyright owners have long complained about the “whack-a-mole-problem,” where they will notify an online hosting company of the existence of an infringing use, which will be taken down, only to almost immediately have a similar or identical infringing use pop up again in other posts on the host’s platform – requiring multiple other take-down notices.  The Tillis legislation proposes to address some of those issues.

On the “whack-a-mole” problem, the draft proposes to remove insulation from liability for Internet services and platforms that are “willfully blind” to infringing activities that occur on the sites that they host.  That would substitute for the “actual knowledge” standard that is in current law which has generally been interpreted to require specific notice provided through a take-down notice from the copyright holder (or, in a few cases such as those involving file sharing sites, where the sites were themselves set up and promoted so as to encourage the infringement).  In addition, the proposed legislation would require that take-downs must ensure that a copyrighted work does not reappear in other posts on the service, where the work is a complete copy of a copyrighted work, or where the infringing content uses a portion of a work with commercial value in short-form video.

As one would expect, these changes have raised many concerns about the proposed language.  The “willful blindness” language would certainly impose more obligations on platforms – especially sites like social media sites – to police their users to an extent not currently being done.  Coupled with the “take down, stay down” provisions to ensure that infringing content stay down, sites would either have to utilize sophisticated content identification systems, or would have to radically change the way that they operate.  The content ID systems currently in use by some bigger platforms have already created problems – often pulling material for which a user has a license or where the user can rely on some other right (e.g., fair use) to use content without a license.  Expanding the requirement for such systems to all who allow user-generated content could multiply these problems.  And many smaller platforms that currently host user-generated content (e.g., all those TV stations that ask users to post their weather pictures on the station’s website) might well have troubling employing technologies that can identify infringing content.

One of the other reforms suggested by the draft legislation is intended to address some of these issues.  That would be to make the Copyright Office an administrative agency with full rulemaking authority.  As we have written before, the Copyright Office is currently not a typical independent government agency like the FCC or FDA that enacts rules and enforces those rules.  Instead, it is theoretically an arm of Congress.  Other than in connection with the procedures for registering copyrights, it has limited authority to make rules.  In most policy areas where it conducts inquiries, it ends up writing reports that recommend to Congress changes in the laws.

The Tillis bill would change the nature of the Copyright Office, moving it into the Commerce Department, and giving it rulemaking authority.  The draft legislation suggests that the Copyright Office would adopt rules for best practices for take-down, stay down requirements.  The draft directs that these rules would distinguish between different platforms, based on factors including their size and resources to implement filtering technologies, and on the scale of infringement likely to occur on the platform.  In addition, the Copyright Office would adopt best practices dealing with the process for providing take-down notices when a copyright owner notifies a service of infringing content on that service.  This would include standards that would apply to the level of diligence required before a take-down notice is issued, as there is potential liability for bad-faith take-down notices from copyright holders who issue them without considering licenses or other defenses to an infringement claim, including fair use.

This legislation would also tie into the Copyright Claims Board created in December as part of the Defense Appropriations Act.  That Board will act as a copyright small claims tribunal to adjudicate claims where damages are limited to $30,000.  The Tillis legislation, if adopted, would also give that Board the rights to adjudicate claims of bad faith take-down notices.

The legislation addresses many other issues.  It attempts to streamline the regular proceedings that the Copyright Office holds to assess whether particular activities that circumvent digital copyright security protocols should be permitted.  These anticircumvention proceedings regularly authorize certain uses – like for the development of adaptive technologies for the blind or for repair purposes or to access data on an outdated or unsupported device or program.  Some of these uses would be adopted by legislation so that they would no longer need to be reviewed every three years.

The bill would also provide for the use of “orphan works” with limited risk of liability.  In this digital age, many services and individuals have wanted to use creative materials that are theoretically under copyright – but through the passage of time and the death or disappearance of copyright holders, it may be difficult or impossible to locate someone to license the use of the material.  This can include old pictures, written texts, musical works or other creative works.  Under the legislation, if a user does a reasonable search and cannot locate the owner of a work, it can use that work if it files a notice with the Copyright Office of its use.  If the copyright owner later surfaces, the user would have to negotiate reasonable compensation, not the $150,000 statutory damages that sometimes can be claimed.  Here, too, the Copyright Office would be tasked with creating rules to define when a search for the copyright owner is reasonable.

This is a complex piece of legislation, sure to draw a host of comments from copyright owners and users of this material.  No doubt the proposals will be modified based on the comments, and new or different proposals for reform may be added to the bill.  Any party interested in how the Internet and social media platforms will work in the future should be watching as this legislation moves forward.

Courtesy Broadcast Law Blog