2021: A Glimpse into the Future?

By Ken Hatfield (AC member)

As 2020 mercifully comes to an end, a flurry of changes to the ways content creators will be remunerated when our works are monetized in the digital domain are on the horizon. Among these are some that are better known than others, including the previously passed legislation we at MFM actively supported, known as the Music Modernization Act, and its Mechanical Licensing Collective (MLC), which will collect and distribute the funds that OSPs (online service providers like streamers) will pay to acquire the blanket licenses they will need to legally stream or facilitate digital downloads of our music. This has all been previously covered in detail in MFM seminars and workshops as well as newsletter articles and my MFM podcast of early 2020. So, in this short article I’ll focus on developments not previously covered.

Senator Thom Tillis, Chairperson of the Senate Judiciary Subcommittee on Intellectual Property, has been conducting hearings into reform of and—as appears to be the case regarding what he is now advocating—replacement of the Digital Millennium Copyright Act (DMCA) of 1998 with a new Digital Copyright Act (DCA) of 2021. The impetus for this update of the DMCA is clearly the vocal outcry from content creators that the intention of the DMCA, expressed in the bill itself, to balance the concerns of the three stakeholder groups (those that create content, those that consume content, and those that facilitate access to content) has not been realized. Acknowledgement of this reality was at the heart of the recent United States Copyright Office (USCO) report on reform of section 512 of the DMCA.

So, it’s back to the drawing board as we try to fix what Congress tried to create at the dawn of what became the commercial internet. Remember that in 1998 when the DMCA was created most folks were still using dial-up modems to get online.  Consequently, it is understandable that, like all legislation, the DMCA would require periodic updating. This is even more true for legislation intended to regulate the digital domain with its rapid and frequent changes.

Among the important changes proposed in the DCA of 2021 are its stated intentions to: “… modernize U.S. copyright law by amending the key provision for addressing online infringement, by improving the exemptions available to users for circumventing technological protections measures (TPMs), by increasing attribution information attached to copyrighted works so that authors can be properly credited, by placing the Copyright Office under the Department of Commerce, and by creating a copyright small claims tribunal.”

This will all be achieved by a series of significant changes to the current structure of the DMCA and existing copyright law. Here are some of the significant changes:

  1. Increasing roles for various federal agencies in establishing regulations to better protect copyright owners and individual users and to increase certainty for online service providers (OSPs) regarding obligations under section 512, such as establishing standard technical measures that OSPs must accommodate or adopt and best practices that account for differences in size, service, and scale of infringement.
  1. Clarifying knowledge requirements for OSPs, lowering the specificity with which copyright owners must identify infringing material in certain circumstances, and replacing the notice-and-takedown system in existing law with a notice-and-staydown system for complete and near complete works.
  1. Establishing a copyright small claims tribunal, as envisioned by the CASE Act, and using it to resolve disputes between copyright owners and counter-notice senders, as well as for pursuing enhanced penalties under section 512(f).
  1. Creating a limitation on liability for good faith users who, following a diligent search, are unable to locate the copyright owner and decide to still use the orphan work.
  1. Establishing the Copyright Office as an executive branch agency within the Department of Commerce, led by a presidentially appointed Register of Copyrights.
  1. Modernizing the existing permanent exemptions that allow for TPM circumvention for security testing and encryption research and adding new permanent exemptions.
  1. Streamlining the triennial rulemaking process for temporary exemptions.
  1. Expanding the possible scope of temporary exemptions by authorizing the Copyright Office to permit third-party assistance “at the direction of” an intended user and to adopt temporary exemptions for trafficking of circumvention tools when the tool would be used to facilitate an exempted circumvention.
  1. Providing the author of the copyrighted work with a right of action when someone removes or alters copyright management information on digital or analog copies with the intent to conceal an author’s attribution information.

Item number three is crucial to the next legislative action I’ll address, because the tribunal it references is in fact the heart of the CASE Act (copyright alternative in small claims enforcement act). Some of you may recall that MFM has advocated for the CASE Act on multiple occasions over the past few years. We even created a call to action to get senator Wyden (the lone obstruction to its passage) to remove his block of the bill in the U.S. Senate.

The CASE Act in essence creates a small claims tribunal for resolving copyright infringement cases within the USCO (United States Copyright Office). This will empower content creators to enforce the rights copyright law already gives us. Currently the cost of copyright lawsuits are cost prohibitive. A recent article in the Columbia Law Review estimates costs can be in the millions! Under the CASE Act copyright infringement disputes can be resolved without a lawyer for damages up to $30,000.00.

This is a win for content creators! But there is an Achilles’ heel in the CASE Act. Since the small claims tribunal is in effect a form of arbitration, it requires the willing participation of both parties (plaintiff and defendant). All the bad faith actors have to do is refuse to recognize the jurisdiction of the CASE tribunal to prevent a case from even coming before the CASE tribunal. This is why many (like myself) are advocating that acceptance of the jurisdiction of the CASE tribunal be a requirement for any OSP to even be eligible for the limited liability protection afforded them by section 512 of the DMCA.  In other words: this needs to be added to Tillis’ proposed DCA 2021! Without that requirement (which I see as a necessary reform of section 512) the CASE Act will have no teeth.

The CASE Act was included in the Omnibus Spending and Covid-19 Relief package that Congress passed on 12-21-2020 to address the economic hardships brought about by the pandemic and the necessary shutdowns implemented to fight it. Congress also included the “Save Our Stages” Act in this omnibus bill. Save Our Stages “… will provide money for bars and restaurants, and $15 billion in SPA grants for theater operators and small venue operators…”.

This omnibus bill also includes the Protecting Lawful Streaming Act, which some are calling a “felony streaming law”. As its name implies, this law is aimed at putting real enforcement teeth in the current laws which have failed miserably to protect copyright owners.

The “felony streaming law” will be implemented by inserting a new section entitled “§2319C after section 2319B of the U.S. Code’s title 18, chapter 113.

Under §2319C, it will be “unlawful” for individuals to “provide to the public a digital transmission service” that’s “primarily designed” to publicly perform works “by means of a digital transmission without the authority of the copyright owner or the law.” It will also be illegal to provide the public with a digital transmission service that “has no commercially significant purpose” aside from performing works without the permission of the copyright holders, or that “is intentionally marketed by or at the direction” of the offender utilized for purposes of self-promotion. A fine and a five-year sentence are possible if the crime is committed “with 1 or more works being prepared for commercial public performance” or if “the person knew or should have known” that the infringed work was being prepared for commercial public performance. The law also indicates that repeat offenders could be subject to fines and up to 10-year sentences.

So, will all of this actually give content creators a fair shake? Only time will tell. It’s clear that these measures are all steps in the right direction.

I believe that with close monitoring of the implementation of these reforms and a few adjustments we could be in much better shape than we have been for decades regarding equity in the digital domain.

I’ll leave you all with two amendments I suggest:

  1. The aforementioned requirement that OSPs accept the jurisdiction of the CASE tribunal as a requirement for eligibility for section 512 safe harbor limited liability protection.
  1. That the proposed technological protection measures (TPMs), which are in essence replacements for the standard technical measures (STMs) the original DMCA called for but which were never developed or implemented by big tech, have the power to prevent the crime of copyright infringement before it occurs. This means something like upload filters, which is the solution the European Union favors.

I know there are many who primarily perform and record covers, and that others sample or remix existing content to create their works. Big tech has invested a great deal of effort and money in obfuscating the fact that if OSPs were treated like traditional broadcasters … which is in fact what they are, i.e. digital broadcasters, then they would be required to have blanket licenses (similar to what the MLC will sell them under the MMA for streaming). This would mean that artists doing covers or D.J.s doing remixes or using sampled content would NOT be the ones required to pay the copyright owners for the legal right to use that preexisting copyright protected content. The broadcaster(s) would pay via their blanket licenses, just like they do for terrestrial broadcasts! It is not clear that things will operate that way under the MMA … but they should. And if they don’t, then we should voice our demands that they do!

During this pandemic when the only outlets we have for our work are in the digital domain … via live streaming or recorded on-demand streaming (content that is archived in some accessible format), it is even more crucial than ever that we have an equitable, sustainable musical ecosystem. We need solidarity among ALL content creators. You cannot cover a song that has not been written. You cannot remix or sample a recording that does not yet exist. Some of the best songwriters and composers as well as producers are not very good performers. These colleagues can only monetize the content they create via the protections afforded by copyright law. Let us not fight among ourselves. When a recent U.K. study indicates that 82% of all musicians on Spotify make less than $270 a year, and tech companies like Facebook and Google measure their value in the trillions, it seems clear to me that big tech needs to cough up bigger bucks to the creators of the content that is the life blood of their businesses.

All the recent movement to empower content creators is headed in the right direction. But the fight must continue.

Let’s hope 2021 is better. It could not be much worse than 2020!

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