a bimonthly Public Knowledge update

Contents:

• Gigi in the House — Reflections on Grokster Day
  at the Supreme Court
• An Outpouring of Concern for Orphan Works
• How the Broadcast Flag Could Hurt
• Stay In the Know with PK’s RSS Feeds

Gigi in the House — Reflections on
Grokster Day

PK President Gigi Sohn was inside the Supreme Court for the historic
oral argument on the Grokster file-sharing case. Here are her
thoughts on the events of the day, the argument and possible
outcomes and consequences of a decision:

Tuesday, March 29, 2005 will go down as one of the most memorable
days in the history of copyright law. On that day, the Supreme Court
heard oral argument in MGM v. Grokster, which is perhaps the
best-known case the Court will hear this term, and the biggest
copyright case it has heard since the Sony Betamax case in 1984.
This case has been the obsession of PK and just about every other
organization, trade association and company that works on copyright
policy for the past year or so. I had long stopped counting the
number of panel discussions, press calls and meetings about the case
— the day was finally here, and I was relieved and excited.

I wasn’t in the main courtroom, but was in the special overflow room
for members of the Supreme Court Bar, which has its advantages.
First, you are not subject to the silence and strict protocols of
the Court’s stately courtroom. Before the argument started, everyone
was networking and greeting old friends. Forget the work I brought
to read — nearly five hours on line and in the court and I didn’t
look at one word. After talking to a number of folks on both sides
of the case, it was clear that just about everyone was very nervous.

Second, the acoustics are better in the overflow room, and because
you cannot see the Justices, it actually forces you to listen more
intently. To the extent that it is hard to recognize a Justice’s
voice (it isn’t that hard, but Justices Kennedy and Breyer are tough
to distinguish), all you needed to do is give a puzzled look to a
colleague, and he or she would tell you.

And so, with a hush in the room, the Grokster oral argument began.
Don Verrilli, the very talented advocate from Jenner & Block,
opened on behalf of the entertainment industry. Almost immediately,
Justices Stevens and Ginsburg jumped in — doesn’t Grokster have
legitimate uses? Isn’t it used to share authorized and public domain
files? Verrilli responded that it didn’t matter, because Grokster
(and its co-defendant Streamcast Networks) “intentionally built and
actively encouraged” infringement.

At that point, the Court’s most influential member, Justice
O’Connor, came down squarely in the middle, as is her wont. She
asked Verrilli if the “Court could reach the question of active
inducement,” that is, whether Grokster engaged in specific acts that
encouraged infringement. People in the overflow room looked at each
other furtively. There was already a sense that active inducement
would be a focus of this argument.

But even though he first raised the inducement issue, Verrilli was
having none of it. He changed the subject — trying to get the Court
to consider a new standard for secondary liability. He said that the
“touchstone” for such liability is whether the “business [is]
substantially built on infringement,” and what were the “relative
portions” of infringing to non-infringing use.

At this point, Verrilli was besieged by skepticism from Justices
Breyer, Scalia and Souter, who as Linda Greenhouse reported in the
NY Times, is so adverse to technology that he still writes his
opinions by hand. Justice Breyer asked if Verrilli was counsel to
Xerox, or to Apple or to Gutenberg, could he recommend that they go
ahead and build the copy machine, the iPod and the printing press
under his standard? Not surprisingly, Verrilli answered with a
definitive, “yes, yes and yes.” Justice Scalia asked whether an
innovator had to know “going in what the balance is?” And Justice
Souter fretted that Verrilli’s standard would equate to a “Sword of
Damocles” hanging over the head of inventors. The Justices
understood the importance of Sony’s bright line test to continued
technological innovation.

Solicitor General Paul Clement, arguing for the United States on the
side of the entertainment industries, was up next. He pitched the
government’s test for secondary liability — whether a technology has
a “commercially significant” non-infringing use. He didn’t get very
far. What is the right balance for infringing versus non-infringing
uses? 50-50, stated Clement. And how much time should you give a
company to develop a non-infringing use, asked Justice Scalia.
Justice Souter suggested, somewhat tongue-in-cheek, that perhaps the
Court should adopt a “flexible rightness” doctrine so that new
technologies don’t get sued right away.

When Richard Taranto, the seasoned Supreme Court solicitor
representing Grokster and Streamcast began, he got no better
treatment. Justice O’Connor once again raised the question of
whether an active inducement test might be appropriate. Taranto
answered that such a test was not found in copyright law. Justice
Kennedy asked what was wrong with the entertainment industry’s
“substantial use” test. Taranto responded that the Sony case was
clear — the manufacturer of a technology cannot be held liable for
the infringement of others if the technology is “capable of
substantial non-infringing uses,” and that the record here
demonstrated that Grokster had many lawful uses. But Justice
Ginsburg was not buying that, stating that the “standard is not so
clear.” She noted that the Sony Court went on to write another 13
pages after articulating the standard, and that one can’t “isolate
one sentence” from that decision. Taranto pointed out that those 13
pages focused not on the liability standard, but on whether time
shifting of TV programs was a fair use.

During the remainder of Taranto’s time, it was clear that a number
of the Justices were troubled by Grokster’s business model, and were
looking for a way to send the case back to the district court,
perhaps to determine whether Grokster was guilty of active
inducement. Justices Souter and Scalia asked about whether Grokster
was “willfully ignorant” or “willfully blind” to infringement
engaged in by those using its software. Justices Breyer and Stevens,
who are likely to be Grokster’s most fervent defenders, asked about
sending the case back for a determination on the inducement issue.
But the most critical statement came from Justice Kennedy, who was
troubled that “unlawfully expropriated property can be [Grokster’s]
start-up capital.”

On rebuttal, Verrilli once again made it plain that his clients were
not interested in an active inducement standard, even if Grokster
were to be found liable under such a standard. When asked why such a
standard wasn’t enough, Verrilli said that the next Grokster would
simply build to avoid inducement liability. I found this discussion
very telling — after all the talk over the past year about the
alleged need to “get Grokster” and its ilk, the Court was trying to
give the entertainment industry a way to do so, but it demurred. The
industry’s intention, despite their many statements to the contrary,
is clear — it is not so interested in “getting Grokster,” as it is
interested in diluting the Sony standard in such a way that forces
all technology companies to ask their permission before they develop
new products.

After the argument ended, the vast majority of lawyers streamed out
of the overflow room. As much as I wanted to stay and hear the next
case, FCC v. Brand X — an important telecom case — there was a press
conference on the steps of the Court that I wanted to hear, and, if
possible, participate in. I waved goodbye to my communications law
friends and proceeded to the mob on the steps of the Court building.
It was quite a difference from the staid atmosphere inside the
court! In addition to the press conference, which had a crowd of
about seven people deep, protesters from both sides — songwriters
supporting the entertainment industry, and our friends from CEA and
elsewhere sporting “Save Betamax” T-Shirts, were on the plaza
conducting their demonstrations. After my brief and unremarkable
appearance at the press conference (I don’t think I could be seen
over the microphones), a few turns with the CEA protesters, and
chats with a bunch of reporters, I retired to relax with friends at
the PK luncheon.

It has now been over a week since the oral argument, and of course,
everybody has an opinion about how the case is going to come out.
Some of those opinions are driven by hope, some by fear, and some by
where the person works. Although you never can really predict how
the Court is going to decide a case, one credible guess came from my
PK colleague Mike Godwin, who didn’t attend the argument, but is
just a very smart guy. He thinks that the Court will ask the parties
for further briefing on what the proper standard for active
inducement should be, in anticipation of the Court developing such a
standard and sending the case back to the district court to
determine Grokster’s liability under that standard. Given the
Court’s distaste both for tinkering with Sony and for Grokster’s
business model, this seems like a very plausible outcome. But who
knows? At this point, all we can do is wait.

Mike Godwin’s thoughts on what may happen next:

http://www.godwinslaw.org/weblog/archive/2005/04/05/grokster-and-other-matters

A transcript of the oral arguments can be found at:

http://www.sims.berkeley.edu/academics/courses/is296a-2/s05/pdf/GroksterOA.pdf

Orphan Works Find Lots of Love

You do care about orphan works!! Over the past few weeks, PK, the
Electronic Frontier Foundation (EFF) and Free Culture have hosted
the web site, www.orphanworks.org, to help you submit ideas to the
U.S. Copyright Office on how to deal with that frustrating situation
when, as a creator, you can’t find who owns the rights to a work you
would like to use in your own creation.

About 2/3 of the comments submitted came through the orphanworks.org
web site — 475 of the 716 submitted. (No, we didn’t count them all.
The Copyright Office helpfully numbered them for us.) Those comments
came mainly from individuals who had trouble making use of orphan
works. Your stories were fascinating, and provided the Copyright
Office with just the type of real world experience that it can use
when coming up with a recommended solution to making orphan works -
works for which the copyright owner can’t reasonably be located -
more accessible and available.

As we mentioned in the last issue, PK filed its own comments in the
proceeding suggesting that Congress create a “reasonable effort”
defense to infringement, and suggesting that Congress encourage, but
not require, users to file with the Copyright Office a notice of
intent to use an orphan work and a sworn statement describing the
search made to find the copyright owner.

The Glushko-Samuelson Intellectual Property Law Clinic at the
Washington College of Law, American University, suggested a
framework used by many other commenters — that the burden of finding
the copyright owner be put on the user, as opposed to requiring the
copyright owner to register. The Clinic said the burden of the
search should be on the user because users would normally have to
undertake such research anyway, and that requiring an owner of an
orphan work to maintain watch over its use “is almost oxymoronic.”
The Clinic also disagreed with the approach to “unlocatable works”
in Canada, which is to decide each copyright use on a case-by-case
method.

There were some comments that did not follow that theme, however.
The joint submission from Save The Music and Creative Commons
recommended a mandatory registration scheme for copyright owners.
Failure to register a work within 25 years would put the work into
“orphan” status and could be used without permission and for a
nominal fee under a default license applicable to all orphan works.
Save The Music is a small group interested in the preservation of
old Jewish music, and it told the Copyright Office that it
“repeatedly encounters problems” finding rights holders because many
of the works the group wants to digitize and put online were
produced overseas and published by small companies which no longer
exist.

The question of applying an orphan works designation to music came
up in quite a few comments. The American Society of Composers,
Authors and Publishers (ASCAP) said that the definition of orphan
works should exclude musical works. ASCAP said its data base is so
complete that there are no substantial difficulties in finding
copyright holders. The Recording Industry Association of America
made a similar argument.

But the Future of Music Coalition, American Federation of Television
and Radio Artists (AFTRA) and American Federation of Musicians of
the United States recommended a system modeled after Canada’s, in
which more than 100 separate permissions for use have been issued,
and suggested as well a specific license for records taken out of
print by record labels.

Reply comments are due May 9.

PK’s comment is here:
http://www.publicknowledge.org/pdf/pk-comments-on-openworks.pdf

You can take your pick from the whole batch of submissions
here:
http://www.copyright.gov/orphan/comments/index.html

The Reality of the Broadcast Flag

When Public Knowledge, the American Library Association and others
challenged the FCC’s broadcast flag regulation, most of the
discussion focused on whether the Commission had the power under the
Communications Act to implement it. We argue, as you know, that the
FCC exceeded its authority in crafting the current broadcast flag
regime. That’s the legal argument, but it’s only half of the story.

Thanks to a filing our group made with the U.S. Appeals Court, D.C.,
on March 29, we were able to give some exposure to another part of
the story — the harm to consumers, librarians, scholars, bloggers
and others that will result if the broadcast flag scheme is
implemented. Technically, the filing was made with the court to
prove that our team has “standing” — that is, we fulfill the legal
obligations necessary to be able to bring the case in the first
place. In doing so, we have to show that our members, the
librarians, consumer advocates, academics, and others who belong to
the group, would be harmed if the broadcast flag scheme went
forward. (Responses to our brief will be due April 12.)

The result was a document that set out, in great detail, what bad
things would happen with the broadcast flag scheme. The whole filing
is 102 pages, but you don’t have to read it all. The first 20 or so
pages summarize the affidavits from individuals, and you can pick
and choose among the compelling individual stories what you want to
read.

With a great deal of help from all of the organizations on our side
of the case (many, many thanks!), we submitted evidence of a number
of activities that would be harmed by the FCC’s regulation,
including:

1. Using the Internet for distance education. Some libraries, such
   as the one at North Carolina State University, are already using the
   Internet to transmit broadcast clips for classroom instruction,
   recording a Univision Spanish-language program for distance
   learning. A professor at American University in Washington, D.C.,
   plans to make broadcast clips available to her students next year.
   The Vanderbilt Archives makes cable news programming available over
   the Internet to more than 100 Internet subscribers.
2. Internet town meetings. The Consumer Federation of America
   will be hampered in their Internet-based “town hall” style meetings.
   CFA conducted its first meeting last year with more than 200
   participants, and one of the uses about which its members are
   excited is the ability to send instantly broadcast news clips on
   topics of interest during the conference. CFA has asked its
   technical staff to work on this project, and members will be able to
   use this feature — unless the broadcast flag takes effect.
3. Enhancing blogs. Stanford University Law Professor and PK
   Board Member Lawrence Lessig said he has posted news clips on his
   very popular blog in cases where the programs were relevant to an
   article he had posted, or in which he had commented on the program
   itself. PK member Carrie McLaren uses clips in the same way on a
   blog associated with a magazine she founded.
4. Testing DTV. The Electronic Frontier Foundation (EFF) uses
   broadcast HDTV segments to help its members learn how to build their
   own personal video recorders. Last year, EFF captured a segment of
   the film, Lord of the Rings, and made it available on its website
   for members to use while testing their home-brewed TiVo devices. The
   broadcast flag would foreclose that activity. One EFF member, Jack
   Kelliher, designs and markets an HDTV tuner card to support the EFF
   and other efforts to help consumers build their own personal
   recorders. The flag would require Kelliher to redesign his card,
   doubling his production costs.
5. Equipment replacement. The Vanderbilt News Archive at
   Vanderbilt University has invested more than $100,000 in recording
   studios used to capture news broadcasts off the air. Those studios
   include equipment that isn’t compliant with the broadcast flag.
   Vanderbilt said it would have to spend “substantial sums” to replace
   its current gear.

The supplemental brief is here:

http://www.publicknowledge.org/pdf/pk-bfcase-supplemental-brief.pdf

Here’s the court order:

http://www.publicknowledge.org/pdf/bf_order_on_standing_20050315.pdf

And now a word from our sponsors: The work PK is doing to protect
the free flow of information and sharing of knowledge is vital to
a free democracy. You can help: Support PK now, at: http://www.publicknowledge.org/takeaction/donate.
It’s quick and easy.

Briefly: The House Judiciary Committee is expected as soon as this
week to file its report on S. 167, the Family Entertainment and
Copyright Act of 2005. A second committee to which the bill has been
assigned, the House Administration Committee (because of the Library
of Congress provisions) is unlikely to take any action on the bill.
Under normal circumstances, those two actions — the filing of the
report and waiver by House Administration, would make the bill
eligible for floor action. However, the House Energy and Commerce
Committee is reportedly unhappy with some provisions of the bill and
may ask for it to be referred there.

Public Knowledge keeps you up
to date with RSS. We have a number of different feeds to add to your
favorite news aggregator:

Breaking News:

http://www.publicknowledge.org/news/breaking/feed.rdf

Open Access:

http://www.earlham.edu/~peters/fos/atom.xml

Press Releases:

http://www.publicknowledge.org/pressroom/releases/rssBody

Events:

http://www.publicknowledge.org/news/events/rssBody

To find out more about RSS and other feeds we offer, follow the link
below:
http://www.publicknowledge.org/about/feeds

For the best in blogging: www.Godwinslaw.org , by PK Legal
Director Mike Godwin. From ruminations on Tarzan, to plots against
America, to experiments with BitTorrent, its all here.