Annual Report 2002: Reports and Legislation
The U.S. government relies on the Copyright Office for legal and technical advice on copyright matters. The Office
advises Congress on proposed changes in U.S. copyright law, analyzes and assists in the drafting of copyright legislation
and legislative reports, and undertakes studies on current issues for Congress. Copyright-related legislative activity
during this fiscal year included the following:
The Register of Copyrights testified at three Congressional hearings during Fiscal Year 2002. The Senate Committee on the Judiciary held a hearing on the Intellectual Property Protection Restoration Act (S.1611). The House Subcommittee on Courts, the Internet, and Intellectual Property held two hearings: a two-day hearing regarding the Copyright Office's Digital Millennium Copyright Act (DMCA) Section 104 report, and one on reform of the Copyright Arbitration Royalty Panels (CARPs).
State Sovereign Immunity and the Intellectual Property Restoration Act
Digital Millennium Copyright Act Section 104 Report
In December 2001, the Register testified before the House Subcommittee on Courts, the Internet, and Intellectual Property on each of the two days of hearings on the August 2001 report prepared by the Office as required by section 104 of the DMCA. The report evaluated the impact of advances in electronic commerce and associated technologies, as well as the amendments to title 17 made in the DMCA, to sections 109 and 117 of the copyright law.
The report made recommendations regarding three issues: (1) Digital first sale doctrine: section 109 of the copyright law permits a person who lawfully owns a copy of a work to sell or dispose of that copy as he or she chooses. In her testimony, the Register noted that section 109 at this time applies to tangible copies of work in digital form and that expansion of the section to permit retransmission of such works could do harm. (2) Incidental "buffer" copies: buffer copies are created incidentally as part of the process of streaming. Such copies exist only for a brief time and only as a portion of the entire work. The Register noted that the making of a buffer copy in the course of licensed streaming should be considered a fair use of the work, and recommended legislation of a narrow exemption for such incidental or buffer copies. (3) Archival copies: section 117 of the copyright law permits users to create archival copies of computer programs that they legally own. The Register found that making an archival copy of other types of digital works should be considered a fair use. However, the Register observed that section 109 permits the owner of a particular copy lawfully made to distribute that copy without the copyright owner’s permission. This would appear to permit the user to sell or otherwise dispose of the archival copies, which would harm the copyright owner. The Register recommended that Congress close this gap.
Copyright Arbitration Royalty Panel (CARP) Reform
CARPs are temporary bodies composed of hired arbitrators who set or adjust royalty rates and terms of statutory licenses, and determine royalty distributions. These panels have been operating under the auspices of the Copyright Office and the Library of Congress since Congress eliminated the Copyright Royalty Tribunal (CRT) in 1993. The purpose of a June 13 hearing before the House Subcommittee on Courts, the Internet, and Intellectual Property was to consider how effective the CARP process has been thus far and ways in which it can be improved. The Register addressed a report on CARP reform that the Office had prepared in 1998 at the request of the Subcommittee and commented on the need to reform the CARP process. She noted the Office’s willingness to work with the Subcommittee and the parties to produce a system that would address four critical elements: the hiring of full-time employees who are well-versed and experienced in the pertinent fields; the need for ensuring that there are no periods of inactivity as there were with the CRT; the need for the Register to have a substantial role during the process to address important policy and substantive matters that might arise; and the question of funding in rate setting proceedings.
The Technology, Education and Copyright Harmonization (TEACH) Act was passed by the Senate in June 2001 and placed on the House of Representatives calendar late in fy 2002 as part of the Department of Justice Appropriations Authorization. The TEACH Act promotes digital distance education by implementing the recommendations made in the Register’s report to Congress in May 1999 titled "Report on Copyright and Digital Distance Education." At the request of the Senate Judiciary Committee, the Copyright Office played a key role in bringing about the compromise reflected in the legislation by facilitating negotiations between the affected parties.
The TEACH Act expands the coverage of the exception in section 110(2) to allow the delivery of authorized performances and displays by nonprofit accredited educational institutions through digital technologies, expands the categories of works exempted from the performance right but limits the amount that may be used in these additional categories to “reasonable and limited portions,” and emphasizes the concept of "mediated instruction" to ensure that the exemption is limited to what is, as much as possible, equivalent to a live classroom setting. The Act requires that institutions availing themselves of the expanded exception apply technological measures to prevent prolonged retention or further distribution of the work and that the institutions not interfere with technological protection measures applied by the right holders in the work.
Protection of Authentication Features
Recent legislative discussions have considered criminalization of illicit authentication features affixed to or embedded in a phonorecord, a copy of a computer program, or a copy of a motion picture or other audiovisual work. Current anticounterfeiting laws make it a crime to traffic in counterfeit labels or copies of certain forms of intellectual property, but not authentication features such as the hologram that a software maker uses to ensure that copies of its software are genuine.
Copyright Office staff advised Congressional staff on the implications of the copyright law’s provisions on proposed legislation to criminalize the trafficking in counterfeit authentication features used by copyright owners to detect piracy of their works.
Piracy in Peer-to-Peer Networks
The underlying issue in peer-to-peer networks piracy is “file sharing” which entails unauthorized distribution and copying of copyrighted works. Pioneered in the late 1990s by companies such as Napster, file sharing initially enabled users to "share" digital copies of songs after being indexed on a central computer. Because file sharing enables widespread distribution of copyrighted material without payment of royalties to the creators, Napster’s activities were ruled illegal in 2000 in A&M Records, Inc. v. Napster before the Ninth Circuit Court of Appeals.
File sharing continues, however, through peer-to-peer networks that do not use a centralized server for indexing. This decentralization makes it more difficult to pursue copyright violators in court.
Recent legislative approaches have considered allowing copyright owners to use digital self-help measures to protect their own intellectual property. The legal concept of self-help against theft permits homeowners, for instance, to take reasonable action to stop burglars found in their homes. In the case of intellectual property, the principle remains the same. If, under the relevant copyright laws, intellectual property is being distributed without the owner’s consent, the owner can be allowed to impede the theft. Specifically, legislation proposed in the 107th Congress would protect the owners from liability for blocking, diverting, or otherwise impairing the unauthorized distribution of their copyrighted work on a publicly accessible peer-to-peer file trading network.
The Copyright Office advised House staff on copyright and legislative drafting issues concerning legislation to permit copyright owners to engage in self-help to disrupt infringing file-trading activities on peer-to-peer networks.
Technical Amendments Bill
The Office began work in fy 2001 on various technical amendments to the copyright law that Congress wanted to pass together with technical amendments related to other federal agencies’ work. These technical amendments were added to the "21st Century Department of Justice Appropriations Authorization Act." The conference on the bill was completed in September 2002. The House passed the conference report on September 26, 2002. The conference report was awaiting Senate consideration as the fiscal year ended.