The Next Copyright Case to Hit the Supreme Court?

A while ago I commented here on the Second Circuit’s decision in The Cartoon Network/Cable News Network v. CSC Holdings/Cablevision. It seemed to me like a decision that would leave a mark, one with implications reaching far beyond the particular dispute between the particular parties. Meanwhile, Cable News appealed to the Supreme Court. During the first week of November, a rainfall of amici curiea (friends of the court) briefs supporting the petition washed the threshold of the Court.

One brief urging the Supreme Court to grant certiorari was filed by the Copyright Alliance, “a nonprofit, nonpartisan 501(c)(4) educational organization dedicated to promoting copyright as an engine for creativity, jobs, and growth. It is a membership organization of individual artists and institutions, including corporations, trade associations, sports leagues, and unions.” (quoting the brief). This brief notes that “[t]he Copyright Alliance has never before filed a brief in any court, but is impelled to do so in this case because the decision below could be so detrimental to the health of our copyright system.” It continues:

The decision below deviates unjustifiably from that well-marked path. It threatens to render copyright incentives ineffective in myriad technological contexts, and will encourage the practice of using technology, not to deliver innovative products and services to consumers, but to navigate around the boundaries of copyright protection in order to avoid paying for uses that otherwise require licenses. It narrows beyond recognition, and in contravention of the plain language of the Copyright Act, the scope of two critical exclusive rights - reproduction and public performance - that Congress accorded to creators.

Sony BMG, Warner Music Group and some other major rightholders and associations filed a second brief in support of petitioners (2008 WL 4843620 (U.S.)). The content industry is nervous about the Second Circuit’s opinion, to say the least: “Amici wish to demonstrate the potentially devastating impact of two of the Second Circuit's clearly erroneous rulings by illustrating how, as a practical matter, those rulings may jeopardize increasingly prevalent lawful means of distributing Amici's copyrighted digital content. As Amici will show, these negative consequences are global in scope.” And further:

The Second Circuit's decision also will have undesirable global consequences. It directly conflicts with the international treaty obligations of the United States to protect the rights of copyright holders. Moreover, it will jeopardize international agreements regarding the use of digital content and will encourage other countries to erode copyright protections like the Second Circuit has.

These amici do not spare harsh words and gloomy prophecies while lashing out at the Cable News decision: “Not only does the Second Circuit's decision senselessly strip settled copyright protections, but it perversely incentivizes copying of protected works by entities like Cablevision for the sole purpose of creating individualized transmissions to subvert the ‘public’ performance right. Services should not be encouraged to evade the ‘public’ nature of performances simply by creating millions or billions of unique copies.”

The Picture Archive Council of America and the Entertainment Software Association et al. also filed an amici brief in support of the petition, for the Second Circuit is said to have “reversed [the lower court’s decision], using a pinched construction of the Act to reach faulty conclusions.”

A fourth brief filed by BMI and ASCAP pointedly attacked the public performance right’s analysis in Cable News. The major collection societies agree that the Second Circuit has misinterpreted and misapplied the law. They argue further that “should the decision stand, BMI and ASCAP, and their affiliates and members, could suffer unique harm because disputes regarding ASCAP's and BMI's public performance licenses, pursuant to the Consent Decrees, proceed before rate courts set in the United States District Court for the Southern District of New York.”

Now, one may wonder: What drives a broad range of prominent copyright holders to join forces is such determination and vigor against this ruling? It is not hard to guess why the Cable News analysis of the reproduction and the public performance rights in a source of sleepless nights for some incumbent industry players. It indeed provokes several fundamental issues: What is a copy? What does it mean to “publicly” perform a copyrighted work? Does copyright infringement requires volition, and whether volition could be negated in case that the act is performed automatically upon the request of end-users? Is the sophisticated system of “on-demand” television broadcasting services operated by Cablevision covered by the compulsory license in section 111 of the Copyright Act? (on the last point, see also a fifth brief filed by the MLB, NFL et al., 2008 WL 4819897 (U.S.)) Some rightholders surely regard the Second Circuit's treatment of these questions unfavorable to their interests. Much is at stake. Millions in licensing revenues for on-demand streaming of digital television programs and movies are at risk. Remote Storage by Video Recording Systems (RS-VDR) (the technology Cablevision uses) is only the tip of the iceberg.

Considering the magnitude of the legal issues involved in the decision and its potential implications in terms of licensing dollars, it is not unthinkable that the Supreme Court would grant certiorari here. If petitioners and some amici are right that Cable News spawns huge uncertainties about basic questions of copyright infringement, and if there is a circuit split between the Second and the Ninth Circuits on the issue of digital buffer reproductions, it is perhaps even better for the Supreme Court to intervene at this point. Because if it declines to do so now (and assuming no major legislative amendments in the near future), it will have to do it later, as the caselaw becomes more and more messy, and after much money has already been spent on litigation.

Arguing that matters should be resolved at the highest authoritative level is one thing. Guessing the outcome is another. It is difficult to assess what the Supreme Court would rule, if and when it turned to address these copyright questions. The Second Circuit requires a minimum period of time, during which a digital reproduction must reside on a network component, for the purpose of establishing a prima facie infringement of the reproduction right. This standing-alone requirement seems to me correct as a matter of law. The problem is that such an interpretation is highly impractical in the network environment. As to the public performance and volition questions, matters are fussier. I think it is harder to nail down the “correct” answer from a legal point of view. Worse even, it would be a miserable waste of judicial resources if the Supreme Court were called to interpret a language that, from a technological viewpoint, becomes rapidly outmoded.

The settlement agreement between Google and copyright holders provides a glimpse into the really interesting legal and policy challenges that lie ahead. This giant installment spreading over 300 pages of dense legalese creates a unique microcosm of copyright rules, arrangements and administrative mechanisms. In this carefully designed microcosm, the terms “reproduction” or “public display” in the meaning of the Copyright Act are hardly mentioned. The word that repeats literally hundreds of times in the text of the settlement is access.

What Google is willing to pay so many millions for is, concisely put, a nonexclusive license to do whatever that is necessary in order to provide electronic access to books: Access to books for individuals at home, institutional subscribers, library patrons and even paying customers of commercial contractors that would run authorized access points. In all these cases, building the technological infrastructure for providing authorized (and preventing unauthorized) access is crucial. The primary concern of the parties to the settlement should be to ensure that people do not pinch holes in that secured environment. The need for a safe technological access platform is lucidly reflected in Attachment D to the settlement agreement, titled “Security Standards.” A reliable and secure technological platform would obviously be critical for the success of this innovative, and by no means risk-free, project.

But no security system is completely insoluble against attacks and manipulations. Under the relevant technological, market and legal parameters, the most effective legal weapon against those how manage to hack their way into the colossal database of digitized human knowledge would not be the exclusive reproduction right. Nor would it be the public display right (and for that matter, the hotly-contested public performance right, if applicable to such and similar services). It would be the anticircumvention prohibitions of DMCA, sighed into law exactly ten year before Google, authors and publishers concluded their historical and (yes, no irony) groundbreaking settlement.

So here is my bottom line: Yes, the legal issues raised in Cable News are serious and urgent enough to justify resolution at the Supreme Court level. At the same time, from a broader perspective, these are the wrong questions. They receive such prominence only because our copyright statute is outdated. The Supreme Court cannot magically heal the copyright system by deciding the dispute this way or the other. Modernizing the law is a job for the legislature, and the sooner it takes on this grand project, the better.

Update: the settlement between Google and copyright holders is now preliminarily approved.

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