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June 25, 2019
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Can the law be copyrighted?

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UpCodes wants to fix one of the building industry’s biggest headaches by streamlining code compliance. But the Y Combinator-backed startup now faces a copyright lawsuit filed against it by the International Code Council, the nonprofit organization that develops the code used or adopted in building regulations by all 50 states.

The case may have ramifications beyond the building industry, including for compliance technology in other sectors and even individuals who want to reproduce the law. At its core are several important questions: Is it possible to copyright the law or text that carries the weight of law? Because laws and codes are often written by private individuals or groups instead of legislators, what rights do they continue to have over their work? Several relevant cases, including ones involving building codes, have been decided by different circuits in the United States Court of Appeals, which means the UpCodes lawsuit may potentially be heard by the Supreme Court.

Brothers Scott and Garrett Reynolds founded UpCodes in 2016. While working as an architect, Scott says he realized how laborious code compliance is for builders, who are required by law to follow codes that determine things like the height of handrails from the ground, minimum width of openings for bedroom windows, placement of light switches or how many electrical outlets to have in a hallway.

These details are important to ensure buildings are safe and accessible and an oversight may subject builders and property owners to legal penalties, fines and costly rebuilding. Firms that can afford to do so hire code consultants, but on an industry-wide level, the process of code compliance has been cited as a key reason for reduced productivity in the construction industry and rising home prices.

Scott decided to leave architecture to develop tools that would simplify the process, and was joined by his brother Garrett, then a software engineer at construction management software company PlanGrid. The two completed Y Combinator’s accelerator program in 2017 and so far have announced $785,000 in funding from angel investors, Y Combinator and Foundation Capital.

Brothers Scott and Garrett Reynolds, who founded UpCodes to streamline building code compliance

UpCodes’ first product, an online database, gives free access to codes, code updates and local amendments from 32 states, as well as New York City. For building professionals and others who want more advanced search tools and collaboration features, UpCodes sells individual and team subscriptions. In 2018, UpCodes released its second product, called UpCodes AI. Described as a “spellcheck for buildings,” the plug-in scans 3D models created with building information modeling (BIM) data and highlights potential errors in real time.

Just as technology has dramatically streamlined the compliance process in other highly regulated sectors, including finance and healthcare, Scott and Garrett Reynolds say tools like UpCodes’ can increase productivity in the building industry. The startup currently has more than 200,000 monthly active users, and has served over 10 million page views and 2 million users since launch.

It argues that its use of building codes is covered by fair use. The ICC, on the other hand, claims that products like UpCodes’ database harm its ability to make revenue and continue developing code. The ICC wants UpCodes to take down the building code on which it claims copyright, and has also sued for damages.

Making building codes more accessible

Served on UpCodes in September 2017 by the ICC and the American Society of Construction Engineers (ASCE), the lawsuit also names each of the brothers as a defendant. (UpCodes settled out of court with the ASCE).

‘We have a very long tradition that in a society governed by the rule of law, people have the right to access the law by which they are governed.’ Corynne McSherry, legal director of the Electronic Frontier Foundation

The brothers say they were shocked because they believed they were covered by the fair use doctrine. In the US, fair use is determined using four factors: the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion taken and the effect of the use on the potential market for or value of the copyrighted work. In one of the circuit court cases that involved building code, Veeck v Southern Building Code Congress International (2002), the judges ruled that when model codes are enacted into law, they enter the public domain.

“The people who are impacted are obviously architects, engineers, industry professionals, but also any homeowners or people living in a house or apartment are affected, too,” says Scott Reynolds. “If you want to do a renovation or move a wall or add an extension to your house, it is the exact same law that governs those as well. It’s a pretty dangerous precedent to set, copyrighting law in a democracy.”

The brothers see their database as an easy-to-use resource for anyone who wants to research building code. For example, they say they heard from an older couple who used UpCodes’ free access to confirm they had the right to demand a broken elevator in their building be fixed within a certain timeframe.

Formed in 1994 by the merger of three regional model code groups, the International Code Council is a nonprofit with 64,000 members headquartered in Washington DC. Its model codes and standards are developed by committees made up of volunteers from its membership and ICC staff. The ICC lobbies for the code to be enacted into law, and earns revenue by selling code books and running accreditation programs.

Some places, including Michigan, direct people who want to research building codes to buy the books from the ICC’s site. The ICC’s website has code posted for free viewing, but copy and paste, highlighting, printing and other functions are disabled unless users pay a subscription fee. Scott and Garrett Reynolds say this makes it more difficult to research code compliance, especially for non-professionals. UpCodes uploads building codes from various sources, including government websites, the ICC’s site and ICC code books ordered online, scanned and put into its database. The ICC argues that this violates its copyright and hurts the organization’s ability to raise revenue through code book sales.

“What is really at the crux of this lawsuit is that we develop the highest quality codes that are adopted and used by governments at essentially no cost to the taxpayers and UpCodes is misappropriating ICC codes to generate their for-profit business,” says Mel Oncu, ICC’s general counsel.

When adopting code, many jurisdictions look at what others are doing, which has helped increase the use of ICC’s code. But codes still vary between cities and states, with the Economist reporting in 2017 that American counties and municipalities use a combined total of 93,000 different building codes, and are updated frequently, adding another layer of complexity to the compliance process.

Corynne McSherry, legal director of digital liberties advocacy group the Electronic Frontier Foundation, says at stake in the case is the principle of access to the law.

“Many of us don’t think about this area of law, but it’s one of the most influential to our daily lives. We think of law in terms of what we see onscreen, but not too many of us normally have to engage with a crucial constitutional problem like those portrayed in movies. Hopefully most of us don’t have to encounter criminal law that much. But building codes actually shape our daily lives in incredibly concrete ways,” McSherry says.

Because the codes are legally binding, “that makes a pretty significant difference under copyright law and under fundamental constitutional law. We have a very long tradition that in a society governed by the rule of law, people have the right to access the law by which they are governed,” she adds.

An issue that’s come up before

Questions surrounding copyright and access to the law have been litigated several times in the United States courts of appeals. Two cases in particular may help UpCodes’ argument: Building Officials and Code Administration (BOCA) v Code Technology (1980) and Veeck v Southern Building Code Congress International (SBCCI) (2002). Two more recent cases involving Public.Resource.org, a nonprofit group that publishes public domain materials to its website, may also bolster UpCodes’ position: Code Revision Commission v Public.Resource.org (2017) and American Society for Testing and Materials et al. v Public.Resource.org (2018).

BOCA (one of the three groups that merged into ICC in 1994) developed a model building code that was adopted by Massachusetts, with some minor modifications, which BOCA then published as the Commonwealth of Massachusetts State Building Code. When private publisher Code Technology began publishing and selling its own edition of the code, BOCA sued. The case made it to the First Circuit, which ruled in Code Technology’s favor, stating that it was “far from persuaded that BOCA’s virtual authorship of the Massachusetts building code entitles it to enforce a copyright monopoly over when, where and how the [code] is reproduced and made publicly available.”

Then more than two decades later, another case resulted in a similar ruling. The Southern Building Code Congress International, another one of the three regional groups that formed the ICC, published a model building code adopted by local governments, including the towns of Anna and Savoy in Texas. Peter Veeck, who ran a website with free information about North Texas, bought copies of the code from the SBCCI, then scanned and uploaded them.

When the SBCCI demanded he stop, Veeck responded in a court filing that posting the code did not violate the Copyright Act and was covered by fair use. The SBCCI counterclaimed for copyright infringement. While the district court ruled in the SBCCI’s favor, the appeal made it to the Fifth Circuit, where Judge Edith Jones wrote in her opinion for the nine-judge majority that “as law, the model codes enter the public domain and are not subject to the copyright holder’s exclusive prerogatives.” The SBCCI’s attempt to appeal to the Supreme Court was denied.

The Economist reports there are 93,000 building codes in use between American jurisdictions and municipalities

Building codes and copyright were also at the center of the two cases involving Public.Resource.org. A lawsuit filed by the state of Georgia’s Code Revision Commission in 2015 sought to stop it from publishing the Official Code of Georgia Annotated (OCGA) after founder Carl Malamud purchased a hard copy of the OCGA, scanned it and sent copies on USB sticks to Georgia legislators. The Code Revision Commission argued that the annotations they wrote placed it under state copyright, but the Eleventh Circuit ruled in Public.Resource.org’s favor last year.

In another recent case, six industry groups, including the American Society for Testing and Materials, sued Public.Resource.org for scanning and publishing building, fire and safety codes they considered their copyrighted property. After the District Court for the District of Columbia ruled against Public.Resource.org, the case went on appeal to the DC Circuit. In July 2018, a three-judge panel reversed the decision, and sent the case back to the district court for further consideration, stating that “in many cases, it may be fair use for PRO to reproduce part or all of a technical standard in order to inform the public about the law.”

One difference between the Public.Resource.org cases and UpCodes’ is that Public.Resource.org is a non-commercial group, a fact that strengthens their fair use argument. UpCodes, on the other hand, is a commercial company, which will become part of the fair use analysis if their case makes it to trial. But that is not a decider, says McSherry, who represented Public.Resource.org in both cases, and the judges are likely to consider the Public.Resource.org cases, as well as the Veeck and other building code cases.

Because the Veeck case never made it to the Supreme Court, that means it hasn’t heard a case on the copyright availability of legal codes, or codes with the force of law, in a very long time, says Joe Gratz, a lawyer who has litigated several high-profile internet copyright and trademark disputes and is representing UpCodes and the Reynolds brothers. This opens the possibility of the ICC lawsuit making it to the Supreme Court.

“So now you have at least three of the circuits — DC, Fifth and Eleventh — all totally lined up, effectively saying that Veeck was right,” Gratz adds.

The ICC’s argument

But the ICC’s position is that the Veeck case is “bad law,” says Oncu, adding that the decision was made two decades ago, before developments in technology allowed the organization to host free access to codes on its own website.

The ICC’s lawyers note that the organization also works with third-party distributors that license the code. “UpCodes could have come to ICC at any point and asked to lawfully reproduce the codes that we own. The idea that they can’t accomplish their mission without violating our copyright doesn’t make much sense to me,” says Oncu.

(In response, Garrett Reynolds says “It’s absurd to license the law.  ICC thinks they’re the gatekeepers and anyone wanting to share the law needs to pay their toll.  ICC doesn’t get to decide who’s allowed to create new innovations to help people follow the law.” UpCodes did not ask ICC to license the code.)

There are two copyright cases, decided in circuit court, that support ICC’s position, says lawyer Kevin Fee, a Morgan Lewis partner who is representing the organization: CCC Information Services v. Maclean Hunter Market Reports (1994) and Practice Management Information v. American Medical Association (1998).

’The idea that they can’t accomplish their mission without violating our copyright doesn’t make much sense to me.’ Mel Oncu, International Code Council’s general counsel

In 1994, the Second Circuit sided with Maclean, publisher of used car valuation reference Red Book, which alleged CCC, a data and service provider for the automotive industry, violated its copyright by uploading information from the guide to its online network. In its decision, the court said “We are not prepared to hold that a state’s reference to a copyrighted work as a legal standard for valuation results in loss of the copyright.”

In the second case, Practice Management Information, a medical coding products company, sued the American Medical Association over the use of Current Procedural Terminology (CPT), a medical code set that is required by Medicare and HIPAA and appears in the Federal Register. Practice Management claimed that this meant AMA’s copyright was invalid, but the Ninth Circuit disagreed, writing in its 1997 decision that “the AMA’s right under the Copyright Act to limit or forgo publication of the CPT poses no realistic threat to public access.”

The ICC claims that its training and education certification business isn’t enough to fund code development.

“Copyright protection of our codes is essential to our ability to continue to update our codes,” says Oncu. She adds that the ICC believes if the lawsuit is ruled in UpCodes’ favor, it may potentially set a precedent that will make it difficult for it to have a revenue stream and continue creating high-quality codes.

Scott and Garrett Reynolds, however, say that the ICC appears to have healthy revenue. In its 2016 annual report, the ICC said its consolidated revenue in 2015 was $66 million, an increase of $4.3 million compared to 2014, and that it “consistently records over $1 million in sales per month” through its online store. Then from 2015 to 2016, ICC’s revenue increased by $12 million, according to a report presented by chief executive officer Dominic Sims at an annual meeting. (The ICC did not disclose an amount for consolidated revenue in its 2017 annual report, and hasn’t released its 2018 annual report yet.)

The UpCodes founders also note that Sims, the ICC’s CEO, was paid $709,000 in 2016, according to a tax filing, much more than the $104,000 median annual salary for nonprofit CEOs. (Oncu says that ICC’s salaries are comparable to other standards organizations.)

Potential implications for innovation

One of UpCodes’ angel investors, Cyrus Lohrasbpour, decided to back the company when he saw them present during Y Combinator’s Demo Day. Lohrasbpour says he was impressed by the accessibility of the website and its team collaboration tools.

“I immediately understood the value proposition of the company,” he says. “It was hard for me to understand why building codes didn’t have something like this already.” Lohrasbpour was one of two investors deposed by the ICC as part of the lawsuit, but despite being questioned for five hours by lawyers, he says the experience made him more determined to support UpCodes. “If you invest in a company that will disrupt an incumbent, there is always a chance that something like this occurs.”

Scott and Garrett Reynolds say that lawsuits like the one they are facing may potentially deter other developers from working on tools to automate building and safety processes, such as calculating fire resistance in walls. The UpCodes suit, and the other cases that came before it, aren’t just relevant to builders. Technology has been able to streamline the process of regulatory and legal compliance in several industries, but innovation may slow if would-be founders are unclear about how copyright law applies to them.

The Electronic Frontier Foundation takes on clients like Public.Resource.org pro bono because “lawsuits can be a way of shutting down innovation in its infancy,” says McSherry. “It can be intimidating to people trying to experiment in this space.”

ICC’s stance is that it is already making its code more accessible by putting it online.

“Code compliance has never been easier. If you wanted to access the codes before the internet, you had to buy a hard copy of the codes or go to the library to figure it out. Now ICC has made its codes available online for free. All you need is a phone in your hand or internet access to know what the codes say,” says Fee.

But UpCodes’ argument is that part of the value of their product is its ease of use, including the ability to cut, paste and highlight text, which ICC’s online codes lack unless you pay a subscription fee. At the same time, the government website of many municipalities direct residents to the ICC’s website to read or purchase code, including Michigan and California.

“I think citizens being able to freely access and discuss laws is critical to democracy and to hold the government accountable,” says Garrett Reynolds. “If one private entity controls access to the law and they get to decide who can access it when and how, it might be appropriate in a dictatorship, but not in a democracy. The people are the owners of the law.”

Scooter startup Bird tried to silence a journalist. It did not go well.

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Cory Doctorow doesn’t like censorship. He especially doesn’t like his own work being censored.

Anyone who knows Doctorow knows his popular tech and culture blog Boing Boing, and anyone who reads Boing Boing knows Doctorow and his cohort of bloggers. The part-blogger, part special advisor at the online rights group Electronic Frontier Foundation, has written for years on topics of technology, hacking, security research, online digital rights, and censorship and its intersection with free speech and expression.

Yet, this week it looked like his own free speech and expression could have been under threat.

Doctorow revealed in a blog post on Friday that scooter startup Bird sent him a legal threat, accusing him of copyright infringement and that his blog post encourages “illegal conduct.”

In its letter to Doctorow, Bird demanded that he “immediately take[s] down this offensive blog.”

Doctorow declined, published the legal threat, and fired back with a rebuttal letter from the EFF accusing the scooter startup of making “baseless legal threats” in an attempt to “suppress coverage that it dislikes.”

The whole debacle started after Doctorow wrote about about how Bird’s many abandoned scooters can be easily converted into a “personal scooter” by swapping out its innards with a plug-and-play converter kit. Citing an initial write-up by Hackaday, these scooters can have “all recovery and payment components permanently disabled” using the converter kit, available for purchase from China on eBay for about $30.

In fact, Doctorow’s blog post was only two paragraphs long and, though didn’t link to the eBay listing directly, did cite the hacker who wrote about it in the first place — bringing interesting things to the masses in bitesize form in in true Boing Boing fashion.

Bird didn’t like this much, and senior counsel Linda Kwak sent the letter — which the EFF published today — claiming that Doctorow’s blog post was “promoting the sale/use of an illegal product that is solely designed to circumvent the copyright protections of Bird’s proprietary technology, as described in greater detail below, as well as promoting illegal activity in general by encouraging the vandalism and misappropriation of Bird property.” The letter also falsely stated that Doctorow’s blog post “provides links to a website where such Infringing Product may be purchased,” given that the post at no point links to the purchasable eBay converter kit.

EFF senior attorney Kit Walsh fired back. “Our client has no obligation to, and will not, comply with your request to remove the article,” she wrote. “Bird may not be pleased that the technology exists to modify the scooters that it deploys, but it should not make baseless legal threats to silence reporting on that technology.”

The three-page rebuttal says Bird used incorrectly cited legal statutes to substantiate its demands for Boing Boing to pull down the blog post. The letter added that unplugging and discarding a motherboard containing unwanted code within the scooter isn’t an act of circumventing as it doesn’t bypass or modify Bird’s code — which copyright law says is illegal.

As Doctorow himself put it in his blog post Friday: “If motherboard swaps were circumvention, then selling someone a screwdriver could be an offense punishable by a five year prison sentence and a $500,000 fine.”

In an email to TechCrunch, Doctorow said that legal threats “are no fun.”

AUSTIN, TX – MARCH 10: Journalist Cory Doctorow speaks onstage at “Snowden 2.0: A Field Report from the NSA Archives” during the 2014 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 10, 2014 in Austin, Texas. (Photo by Travis P Ball/Getty Images for SXSW)

“We’re a small, shoestring operation, and even though this particular threat is one that we have very deep expertise on, it’s still chilling when a company with millions in the bank sends a threat — even a bogus one like this — to you,” he said.

The EFF’s response also said that Doctorow’s freedom of speech “does not in fact impinge on any of Bird’s rights,” adding that Bird should not send takedown notices to journalists using “meritless legal claims,” the letter said.

“So, in a sense, it doesn’t matter whether Bird is right or wrong when it claims that it’s illegal to convert a Bird scooter to a personal scooter,” said Walsh in a separate blog post. “Either way, Boing Boing was free to report on it,” she added.

What’s bizarre is why Bird targeted Doctorow and, apparently nobody else — so far.

TechCrunch reached out to several people who wrote about and were involved with blog posts and write-ups about the Bird converter kit kit. Of those who responded, all said that they had not received a legal demand from Bird.

We asked Bird why it sent the letter, and if this was a one-off letter or if Bird had sent similar legal demands to others. When reached, a Bird spokesperson did not comment on the record.

All too often, companies send legal threats and demands to try to silence work or findings that they find critical, often using misinterpreted, incorrect or vague legal statutes to get things pulled off from the internet. Some companies have been more successful than others, despite an increase in awareness and bug bounties, and a general willingness to fix security issues before they inevitably become public.

Now Bird becomes the latest in a long list of companies that have threatened reporters or security researchers, alongside companies like drone maker DJI, which in 2017 threatened a security researcher trying to report a bug in good faith, and spam operator River City, which sued a security researcher who found the spammer’s exposed servers and a reporter who wrote about it. Most recently, password manager maker Keeper sued a security reporter claiming allegedly defamatory remarks over a security flaw in one of its products. The case was eventually dropped but not before over 50 experts, advocates, and journalist (including this reporter) signed onto a letter calling for companies to stop using legal threats to stifle — and silence security researcher.

That effort resulted in several companies — notably LinkedIn and Tesla — to double down on their protection of security researchers by changing their vulnerability disclosure rules to promise that the companies will not seek to prosecute hackers acting in good-faith.

But some companies have bucked that trend and have taken a more hostile, aggressive — and regressive — approach to security researchers and reporters.

“Bird Scooters and other dockless transport are hugely controversial right now, thanks in large part to a ‘move-fast, break-things’ approach to regulation, and it’s not surprising that they would want to control the debate,” said Doctorow.

“But to my mind, this kind of bullying speaks volumes about the overall character of the company,” he said.

A long and winding road to new copyright legislation

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Back in May, as part of a settlement, Spotify agreed to pay more than $112 million to clean up some copyright problems. Even for a service with millions of users, that had to leave a mark. No one wants to be dragged into court all the time, not even bold, disruptive technology start-ups.

On October 11th, the President signed the Hatch-Goodlatte Music Modernization Act (the “Act”, or “MMA”). The MMA goes back, legislatively, to at least 2013, when Chairman Goodlatte (R-VA) announced that, as Chairman of the House Judiciary Committee, he planned to conduct a “comprehensive” review of issues in US copyright law. Ranking Member Jerry Nadler (D-NY) was also deeply involved in this process, as were Senators Hatch (R-UT) Leahy (D-VT), and Wyden (D-OR). But this legislation didn’t fall from the sky; far from it.

After many hearings, several “roadshow” panels around the country, and a couple of elections, in early 2018 Goodlatte announced his intent to move forward on addressing several looming issues in music copyright before his planned retirement from Congress at the end of his current term (January 2019).  With that deadline in place, the push was on, and through the spring and summer, the House Judiciary Committee and their colleagues in the Senate worked to complete the text of the legislation and move it through to process. By late September, the House and Senate versions had been reconciled and the bill moved to the President’s desk.

What’s all this about streaming?

As enacted, the Act instantiates several changes to music copyright in the US, especially as regards streaming music services. What does “streaming” refer to in this context? Basically, it occurs when a provider makes music available to listeners, over the internet, without creating a downloadable or storable copy: “Streaming differs from downloads in that no copy of the music is saved to your hard drive.”

“It’s all about the Benjamins.”

One part, by far the largest change in terms of money, provides that a new royalty regime be created for digital streaming of musical works, e.g. by services like Spotify and Apple Music. Pre-1972 recordings — and the creators involved in making them (including, for the first time, for audio engineers, studio mixers and record producers) — are also brought under this royalty umbrella.

These are significant, generally beneficial results for a piece of legislation. But to make this revenue bounty fully effective, a to-be-created licensing entity will have to be set up with the ability to first collect, and then distribute, the money. Think “ASCAP/BMI for streaming.” This new non-profit will be the first such “collective licensing” copyright organization set up in the US in quite some time.

Collective Licensing: It’s not “Money for Nothing”, right?

What do we mean by “collective licensing” in this context, and how will this new organization be created and organized to engage in it? Collective licensing is primarily an economically efficient mechanism for (A) gathering up monies due for certain uses of works under copyright– in this case, digital streaming of musical recordings, and (B) distributing the royalty checks back to the rights-holding parties ( e.g. recording artists, their estates in some cases, and record labels).  Generally speaking, in collective licensing:

 “…rights holders collect money that would otherwise be in tiny little bits that they could not afford to collect, and in that way they are able to protect their copyright rights. On the flip side, substantial users of lots of other people’s copyrighted materials are prepared to pay for it, as long as the transaction costs are not extreme.”

—Fred Haber, VP and Corporate Counsel, Copyright Clearance Center

The Act envisions the new organization as setting up and implementing a new, extensive —and, publicly accessible —database of musical works and the rights attached to them. Nothing quite like this is currently available, although resources like SONY’s Gracenote suggest a good start along those lines. After it is set up and the initial database has a sufficient number of records, the new collective licensing agency will then get down to the business of offering licenses:

“…a blanket statutory license administered by a nonprofit mechanical licensing collective. This collective will collect and distribute royalties, work to identify songs and their owners for payment, and maintain a comprehensive, publicly accessible database for music ownership information.”

— Regan A. Smith, General Counsel and Associate Register of Copyrights

(AP Photo) The Liverpool beat group The Beatles, with John Lennon, Paul McCartney, George Harrison and Ringo Starr, take it easy resting their feet on a table, during a break in rehearsals for the Royal variety show at the Prince of Wales Theater, London, England, November 4, 1963. (AP Photo)

You “Can’t Buy Me Love”, so who is all this going to benefit?

In theory, the listening public should be the primary beneficiary. More music available through digital streaming services means more exposure —and potentially more money —for recording artists. For students of music, the new database of recorded works and licenses will serve to clarify who is (or was) responsible for what. Another public benefit will be fewer actions on digital streaming issues clogging up the courts.

There’s an interesting wrinkle in the Act providing for the otherwise authorized use of “orphaned” musical works such that these can now be played in library or archival (i.e. non-profit) contexts. “Orphan works” are those which may still protected under copyright, but for which the legitimate rights holders are unknown, and, sometimes, undiscoverable. This is the first implementation of orphan works authorization in US copyright law.  Cultural services – like Open Culture – can look forward to being able to stream more musical works without incurring risk or hindrance (provided that the proper forms are filled out) and this implies that some great music is now more likely to find new audiences and thereby be preserved for posterity. Even the Electronic Frontier Foundation (EFF), generally no great fan of new copyright legislation, finds something to like in the Act.

In the land of copyright wonks, and in another line of infringement suits, this resolution of the copyright status of musical recordings released before 1972 seems, in my opinion, fair and workable. In order to accomplish that, the Act also had to address the matter of the duration of these new copyright protections, which is always (post-1998) a touchy subject:

  • For recordings first published before 1923, the additional time period ends on December 31, 2021.
  • For recordings created between 1923-1946, the additional time period is 5 years after the general 95-year term.
  • For recordings created between 1947-1956, the additional time period is 15 years after the general 95-year term.
  • For works first published between 1957-February 15, 1972 the additional time period ends on February 15, 2067.

(Source: US Copyright Office)

 (Photo by Theo Wargo/Getty Images for Live Nation)

Money (That’s What I Want – and lots and lots of listeners, too.)

For the digital music services themselves, this statutory or ‘blanket’ license arrangement should mean fewer infringement actions being brought; this might even help their prospects for investment and encourage  new and more innovative services to come into the mix.

“And, in The End…”

This new legislation, now the law of the land, extends the history of American copyright law in new and substantial ways. Its actual implementation is only now beginning. Although five years might seem like a lifetime in popular culture, in politics it amounts to several eons. And let’s not lose sight of the fact that the industry got over its perceived short-term self-interests enough, this time, to agree to support something that Congress could pass. That’s rare enough to take note of and applaud.

This law lacks perfection, as all laws do. The licensing regime it envisions will not satisfy everyone, but every constituent, every stakeholder, got something. From the perspective of right now, chances seem good that, a few years from now, the achievement of the Hatch-Goodlatte Music Modernization Act will be viewed as a net positive for creators of music, for the distributors of music, for scholars, fans of ‘open culture’, and for the listening public. In copyright, you can’t do better than that.

What you need to know ahead of the EU copyright vote

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European Union lawmakers are facing a major vote on digital copyright reform proposals on Wednesday — a process that has set the Internet’s hair fully on fire.

Here’s a run down of the issues and what’s at stake…

Article 13

The most controversial component of the proposals concerns user-generated content platforms such as YouTube, and the idea they should be made liable for copyright infringements committed by their users — instead of the current regime of takedowns after the fact (which locks rights holders into having to constantly monitor and report violations — y’know, at the same time as Alphabet’s ad business continues to roll around in dollars and eyeballs).

Critics of the proposal argue that shifting the burden of rights liability onto platforms will flip them from champions to chillers of free speech, making them reconfigure their systems to accommodate the new level of business risk.

More specifically they suggest it will encourage platforms into algorithmically pre-filtering all user uploads — aka #censorshipmachines — and then blinkered AIs will end up blocking fair use content, cool satire, funny memes etc etc, and the free Internet as we know it will cease to exist.

Backers of the proposal see it differently, of course. These people tend to be creatives whose professional existence depends upon being paid for the sharable content they create, such as musicians, authors, filmmakers and so on.

Their counter argument is that, as it stands, their hard work is being ripped off because they are not being fairly recompensed for it.

Consumers may be the ones technically freeloading by uploading and consuming others’ works without paying to do so but creative industries point out it’s the tech giants that are gaining the most money from this exploitation of the current rights rules — because they’re the only ones making really fat profits off of other people’s acts of expression. (Alphabet, Google’s ad giant parent, made $31.16BN in revenue in Q1 this year alone, for example.)

YouTube has been a prime target for musicians’ ire — who contend that the royalties the company pays them for streaming their content are simply not fair recompense.

Article 11

The second controversy attached to the copyright reform concerns the use of snippets of news content.

European lawmakers want to extend digital copyright to also cover the ledes of news stories which aggregators such as Google News typically ingest and display — because, again, the likes of Alphabet is profiting off of bits of others’ professional work without paying them to do so. And, on the flip side, media firms have seen their profits hammered by the Internet serving up free content.

The reforms would seek to compensate publishers for their investment in journalism by letting them charge for use of these text snippets — instead of only being ‘paid’ in traffic (i.e. by becoming yet more eyeball fodder in Alphabet’s aggregators).

Critics don’t see it that way of course. They see it as an imposition on digital sharing — branding the proposal a “link tax” and arguing it will have a wider chilling effect of interfering with the sharing of hyperlinks.

They argue that because links can also contain words of the content being linked to. And much debate has raged over on how the law would (or could) define what is and isn’t a protected text snippet.

They also claim the auxiliary copyright idea hasn’t worked where it’s already been tried (in Germany and Spain). Google just closed its News aggregator in the latter market, for example. Though at the pan-EU level it would have to at least pause before taking a unilateral decision to shutter an entire product.

Germany’s influential media industry is a major force behind Article 11. But in Germany a local version of a snippet law that was passed in 2013 ended up being watered down — so news aggregators were not forced to pay for using snippets, as had originally been floated.

Without mandatory payment (as is the case in Spain) the law has essentially pitted publishers against each other. This is because Google said it would not pay and also changed how it indexes content for Google News in Germany to make it opt-in only.

That means any local publishers that don’t agree to zero-license their snippets to Google risk losing visibility to rivals that do. So major German publishers have continued to hand their snippets over to Google.

But they appear to believe a pan-EU law might manage to tip the balance of power. Hence Article 11.

Awful amounts of screaming

For critics of the reforms, who often sit on the nerdier side of the spectrum, their reaction can be summed up by a screamed refrain that IT’S THE END OF THE FREE WEB AS WE KNOW IT.

WikiMedia has warned that the reform threatens the “vibrant free web”.

A coalition of original Internet architects, computer scientists, academics and others — including the likes of world wide web creator Sir Tim Berners-Lee, security veteran Bruce Schneier, Google chief evangelist Vint Cerf, Wikipedia founder Jimmy Wales and entrepreneur Mitch Kapor — also penned an open letter to the European Parliament’s president to oppose Article 13.

In it they wrote that while “well-intended” the push towards automatic pre-filtering of users uploads “takes an unprecedented step towards the transformation of the Internet from an open platform for sharing and innovation, into a tool for the automated surveillance and control of its users”.

There is more than a little irony there, though, given that (for example) Google’s ad business conducts automated surveillance of the users of its various platforms for ad targeting purposes — and through that process it’s hoping to control the buying behavior of the individuals it tracks.

At the same time as so much sound and fury has been directed at attacking the copyright reform plans, another very irate, very motivated group of people have been lustily bellowing that content creators need paying for all the free lunches that tech giants (and others) have been helping themselves to.

But the death of memes! The end of fair digital use! The demise of online satire! The smothering of Internet expression! Hideously crushed and disfigured under the jackboot of the EU’s evil Filternet!

And so on and on it has gone.

(For just one e.g., see the below video — which was actually made by an Australian satirical film and media company that usually spends its time spoofing its own government’s initiatives but evidently saw richly viral pickings here… )

For a counter example, to set against the less than nuanced yet highly sharable satire-as-hyperbole on show in that video, is the Society of Authors — which has written a 12-point breakdown defending the actual substance of the reform (at least as it sees it).

A topline point to make right off the bat is it’s hardly a fair fight to set words against a virally sharable satirical video fronted by a young lady sporting very pink lipstick. But, nonetheless, debunk the denouncers these authors valiantly attempt to.

To wit: They reject claims the reforms will kill hyperlinking or knife sharing in the back; or do for online encyclopedias like Wikimedia; or make snuff out of memes; or strangle free expression — pointing out that explicit exceptions that have been written in to qualify what it would (and would not) target and how it’s intended to operate in practice.

Wikipedia, for example, has been explicitly stated as being excluded from the proposals.

But they are still pushing water uphill — against the tsunami of DEATH OF THE MEMES memes pouring the other way.

Russian state propaganda mouthpiece RT has even joined in the fun, because of course Putin is no fan of EU…

Terrible amounts of lobbying

The Society of Authors makes the very pertinent point that tech giants have spent millions lobbying against the reforms. They also argue this campaign has been characterised by “a loop of misinformation and scaremongering”.

So, basically, Google et al stand accused of spreading (even more) fake news with a self-interested flavor. Who’d have thunk it?!

Dollar bills standing on a table in Berlin, Germany. (Photo by Thomas Trutschel/Photothek via Getty Images)

The EU’s (voluntary) Transparency Register records Google directly spending between $6M and $6.4M on regional lobbying activities in 2016 alone. (Although that covers not just copyright related lobbying but a full laundry list of “fields of interest” its team of 14 smooth-talking staffers apply their Little Fingers to.)

But the company also seeks to exert influence on EU political opinion via membership of additional lobbying organizations.

And the register lists a full TWENTY-FOUR organizations that Google is therefore also speaking through (by contrast, Facebook is merely a member of eleven bodies) — from the American chamber of Commerce to the EU to dry-sounding thinktanks, such as the Center for European Policy Studies and the European Policy Center. It is also embedded in startup associations, like Allied for Startups. And various startup angles have been argued by critics of the copyright reforms — claiming Europe is going to saddle local entrepreneurs with extra bureaucracy.

Google’s dense web of presence across tech policy influencers and associations amplifies the company’s regional lobbying spend to as much as $36M, music industry bosses contend.

Though again that dollar value would be spread across multiple GOOG interests — so it’s hard to sum the specific copyright lobbying bill. (We asked Google — it didn’t answer). Multiple millions looks undeniable though.

Of course the music industry and publishers have been lobbying too.

But probably not at such a high dollar value. Though Europe’s creative industries have the local contacts and cultural connections to bend EU politicians’ ears. (As, well, they probably should.)

Seasoned European commissioners have professed themselves astonished at the level of lobbying — and that really is saying something.

Yes there are actually two sides to consider…

Returning to the Society of Authors, here’s the bottom third of their points — which focus on countering the copyright reform critics’ counterarguments:

The proposals aren’t censorship: that’s the very opposite of what most journalists, authors, photographers, film-makers and many other creators devote their lives to.

Not allowing creators to make a living from their work is the real threat to freedom of expression.

Not allowing creators to make a living from their work is the real threat to the free flow of information online.

Not allowing creators to make a living from their work is the real threat to everyone’s digital creativity.

Stopping the directive would be a victory for multinational internet giants at the expense of all those who make, enjoy and enjoy using creative works.

Certainly some food for thought there.

But as entrenched, opposing positions go, it’s hard to find two more perfect examples.

And with such violently opposed and motivated interest groups attached to the copyright reform issue there hasn’t really been much in the way of considered debate or nuanced consideration on show publicly.

But being exposed to endless DEATH OF THE INTERNET memes does tend to have that effect.

What’s that about Article 3 and AI?

There is also debate about Article 3 of the copyright reform plan — which concerns text and data-mining. (Or TDM as the Commission sexily conflates it.)

The original TDM proposal, which was rejected by MEPs, would have limited data mining to research organisations for the purposes of scientific research (though Member States would have been able to choose to allow other groups if they wished).

This portion of the reforms has attracted less attention (butm again, it’s difficult to be heard above screams about dead memes). Though there have been concerns raised from certain quarters that it could impact startup innovation — by throwing up barriers to training and developing AIs by putting rights blocks around (otherwise public) data-sets that could (otherwise) be ingested and used to foster algorithms.

Or that “without an effective data mining policy, startups and innovators in Europe will run dry”, as a recent piece of sponsored content inserted into Politico put it.

That paid for content was written by — you guessed it! — Allied for Startups.

Aka the organization that counts Google as a member…

The most fervent critics of the copyright reform proposals — i.e. those who would prefer to see a pro-Internet-freedoms overhaul of digital copyright rules — support a ‘right to read is the right to mine’ style approach on this front.

So basically a free for all — to turn almost any data into algorithmic insights. (Presumably these folks would agree with this kind of thing.)

Middle ground positions which are among the potential amendments now being considered by MEPs would support some free text and data mining — but, where legal restrictions exist, then there would be licenses allowing for extractions and reproductions.

 

And now the amendments, all 252 of them…

The whole charged copyright saga has delivered one bit of political drama already —  when the European Parliament voted in July to block proposals agreed only by the legal affairs committee, thereby reopening the text for amendments and fresh votes.

So MEPs now have the chance to refine the parliament’s position via supporting select amendments — with that vote taking place next week.

And boy have the amendments flooded in.

There are 252 in all! Which just goes to show how gloriously messy the democratic process is.

It also suggests the copyright reform could get entirely stuck — if parliamentarians can’t agree on a compromise position which can then be put to the European Council and go on to secure final pan-EU agreement.

MEP Julia Reda, a member of The Greens–European Free Alliance, who as (also) a Pirate Party member is very firmly opposed to the copyright reform text as was voted in July (she wants a pro-web-freedoms overhauling of digital copyright rules), has created this breakdown of alternative options tabled by MEPs — seen through her lens of promoting Internet freedoms over rights extensions.

So, for example, she argues that amendments to add limited exceptions for platform liability would still constitute “upload filters” (and therefore “censorship machines”).

Her preference would be deleting the article entirely and making no change to the current law. (Albeit that’s not likely to be a majority position, given how many MEPs backed the original Juri text of the copyright reform proposals 278 voted in favor, losing out to 318 against.)

But she concedes that limiting the scope of liability to only music and video hosting platforms would be “a step in the right direction, saving a lot of other platforms (forums, public chats, source code repositories, etc.) from negative consequences”.

She also flags an interesting suggestion — via another tabled amendment — of “outsourcing” the inspection of published content to rightholders via an API”.

“With a fair process in place [it] is an interesting idea, and certainly much better than general liability. However, it would still be challenging for startups to implement,” she adds.

Reda has also tabled a series of additional amendments to try to roll back what she characterizes as “some bad decisions narrowly made by the Legal Affairs Committee” — including adding a copyright exception for user generated content (which would essentially get platforms off the hook insofar as rights infringements by web users are concerned); adding an exception for freedom of panorama (aka the taking and sharing of photos in public places, which is currently not allowed in all EU Member States); and another removing a proposed extra copyright added by the Juri committee to cover sports events — which she contends would “filter fan culture away“.

So is the free Internet about to end??

MEP Catherine Stihler, a member of the Progressive Alliance of Socialists and Democrats, who also voted in July to reopen debate over the reforms reckons nearly every parliamentary group is split — ergo the vote is hard to call.

“It is going to be an interesting vote,” she tells TechCrunch. “We will see if any possible compromise at the last minute can be reached but in the end parliament will decide which direction the future of not just copyright but how EU citizens will use the internet and their rights on-line.

“Make no mistake, this vote affects each one of us. I do hope that balance will be struck and EU citizens fundamental rights protected.”

So that sort of sounds like a ‘maybe the Internet as you know it will change’ then.

Other views are available, though, depending on the MEP you ask.

We reached out to Axel Voss, who led the copyright reform process for the Juri committee, and is a big proponent of Article 13, Article 11 (and the rest), to ask if he sees value in the debate having been reopened rather than fast-tracked into EU law — to have a chance for parliamentarians to achieve a more balanced compromise. At the time of writing Voss hadn’t responded.

Voting to reopen the debate in July, Stihler argued there are “real concerns” about the impact of Article 13 on freedom of expression, as well as flagging the degree of consumer concern parliamentarians had been seeing over the issue (doubtless helped by all those memes + petitions), adding: “We owe it to the experts, stakeholders and citizens to give this directive the full debate necessary to achieve broad support.”

MEP Marietje Schaake, a member of the Alliance of Liberals and Democrats for Europe, was willing to hazard a politician’s prediction that the proposals will be improved via the democratic process — albeit, what would constitute an improvement here of course depends on which side of the argument you stand.

But she’s routing for exceptions for user generated content and additional refinements to the three debated articles to narrow their scope.

Her spokesman told us: “I think we’ll end up with new exceptions on user generated content and freedom of panorama, as well as better wording for article 3 on text and data mining. We’ll end up probably with better versions of articles 11 and 13, the extent of the improvement will depend on the final vote.”

The vote will be held during an afternoon plenary session on September 12.

So yes there’s still time to call your MEP.

How Europe’s changes to copyright law will affect America

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Europe is considering changing its copyright law. At first blush, you might think this couldn’t possibly affect the way you debate the news of the day online, upload family videos or run your startup. But popular proposals at the EU would strike at the heart of the internet’s openness and accessibility as a platform by raising new barriers to interactive online services around the world.

The goal of these copyright changes is to adopt new protections for publishers and artists. But if they are put in place, the burdens they would place on internet platforms would curtail the kind of quick uploading, sharing, commenting and responding that makes the Web so useful. Additionally, we have no reason to believe that these new plans would actually benefit the journalists and artists in whose name the measures are being proposed.

Take one proposal: a fee payable to news publishers when online platforms such as search engines and news aggregators reproduce even short excerpts of news, typically accompanied by a link to the original article (hence the proposal has been called a “link tax”).

Although the link tax is intended to address a real problem (declining revenues of news publishers has affected their ability to fund quality journalism), similar laws introduced in Germany and Spain further decreased publishers’ revenue by reducing their traffic from links on third-party websites.

A second European proposal would create a new obligation for websites that host content uploaded by users to install automatic filters to scan that content for matches with copyright works, as a basis for new revenue-sharing arrangements that they would be forced to enter into with copyright owners.

Among many problems with this second “upload filtering” proposal, not the least is that it may contravene European law, which explicitly disallows any obligation on internet platforms to conduct general monitoring of what their users do — which this proposal seems to require. There also are insurmountable problems with entrusting algorithms to distinguish infringing uses of copyright materials from legal ones.

The exact language of the two proposals is in flux, because they are each the subject of ongoing compromise negotiations between three institutions of the European Union. Those contentious negotiations were due to wrap up next month, but signs point to a likely extension.

Should these measures pass, it won’t just be European internet platforms that are affected.

However, should these measures pass, it won’t just be European internet platforms that are affected. Indeed, they are largely aimed at U.S.-based internet companies, which are distrusted and resented in Brussels. (Though it’s worth noting that when the Spanish version of the link tax passed into law, Google responded by shutting down its Google News service in Spain rather than paying the tax.)

Yet a lot more is at stake than the fate of Google or Facebook. Those companies at least can afford the cost of complying with (or avoiding) Europe’s copyright proposals. Smaller businesses can’t. For example, medium-sized internet platforms pay between $10,000 and $25,000 a month in licensing fees for a common tool that conducts a copyright scan of uploaded audio files, an impost that could wipe out a new startup.

Also, bad European copyright law has often heralded damaging changes to American copyright legislation. It was Europe that in 1993 first extended the term of copyright protection to 70 years from the death of the author, beating America by five years. European countries were also the first signatories to the most important international treaty on copyright, the Berne Convention, which America only adopted a full century later.

The same could be happening again, as Europe considers changing its copyright law to adopt new protections for publishers and new burdens on internet platforms — changes that, if adopted across the Atlantic, could be a prelude to the adoption of similar measures here as well, with harmful consequences.

In its zeal to advance the interests of copyright owners, Europe should be careful that it does not wreak long-term damage to the internet ecosystem by making it harder for startups and small enterprises to innovate and succeed on either side of the Atlantic.

Featured Image: kamisoka/iStock

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