“[T]he agency’s long-term planning for IT and other infrastructure upgrades could be improved if Congress gave the Copyright Office authority to use unobligated fee balances from previous budget cycles.”
On Tuesday, the Senate Judiciary Committee’s Subcommittee on Intellectual Property convened an oversight hearing of the U.S. Copyright Office featuring testimony from Karyn Temple, the Register of Copyrights and Director of the Copyright Office. Much of the hearing focused on the Office’s efforts to modernize its information technology infrastructure and business processes, although implementation of the recently passed Music Modernization Act (MMA) and new forms of digital piracy were also discussed.
Senator Tillis Announces Working Group on Copyright Office Modernization
Senator Thom Tillis (R-NC), Chairman of the Senate IP Subcommittee, noted that it had been 10 years since the Director of the Copyright Office last appeared before the Senate Judiciary Committee. In that time, the Copyright Office began a multi-year modernization process but, as Tillis previously stated in an op-ed published on this website, he remained concerned that the agency didn’t have the authority and resources to achieve an acceptable rate of progress on its modernization goals. Tillis announced that the Senate IP Subcommittee would be establishing a bipartisan, bicameral working group focused on these modernization efforts which would sincerely attempt to engage all stakeholders in their discussions. He added:
“If anybody doubts mine and the Ranking Member Senator Coons’ interest in hearing from all stakeholders, they should go back and watch the three hearings and 45 witnesses that we’ve done on patent reform to see that we’re seriously interested in getting to a good place.”
“Copyrighted material is at the core of much of what makes American life enjoyable,” said Senator Chris Coons (D-DE), Ranking Member of the Senate IP Subcommittee, during his opening statement. He cited Temple’s testimony, which indicated that core copyright industries add more than $1 trillion dollars to America’s gross domestic product each year.
Modernization Efforts and Digital Recordation Pilot Program
Temple’s opening testimony largely focused on the Office’s modernization efforts, including the creation last year of the Copyright Modernization Office, which now has 25 employees dedicated to more than a dozen modernization activities. The Copyright Office has also focused on modernizing registration procedures to reduce average pendency times by 40% within the last two years and completely eliminate the backlog of workable claims. Later, during questioning, Temple stated that the average processing time for claims in correspondence was five months and online claims not involving written correspondence were being processed in an average of four months. Other items included in Temple’s opening testimony included the need for more effective law enforcement tools to combat digital piracy as well as the Copyright Office’s recommendation to let Section 119 compulsory broadcast licenses under the STELAR sunset as planned at the end of this year.
In response to Senator Tillis’ question about the status of the agency’s modernization efforts, Temple said that she was pleased that fiscal year 2019 was the first year that the agency received funding dedicated to these efforts. According to Temple, the Copyright Office’s funding requests for modernization would total nearly $100 million, including $12.1 million per year over five years for IT development and $5 million per year over seven years to digitize historic public records and make them searchable. However, she noted that the agency’s long-term planning for IT and other infrastructure upgrades could be improved if Congress gave the Copyright Office authority to use unobligated fee balances from previous budget cycles. Better flexibility in using those fees would also enable the Office to continue working in the event of a government shutdown. Under questioning from Senator Coons, Temple indicated that such authority would require statutory language and not just report language from the Committee.
Temple also shared the Copyright Office’s plans to develop a pilot program for a digital recordation system that would eventually replace the agency’s paper-based system. The agency was looking at a spring 2020 launch date for a limited pilot program with the goal of scaling up to a full digital recordation program at some point in 2024.
Streaming Piracy, MMA Implementation
Ways to address growing forms of digital piracy was another issue on the minds of members of the Senate IP Subcommittee. Both Senators Coons and Mazie Hirono (D-HI) cited a June report published by the U.S. Chamber of Commerce’s Global Innovation Policy Center which found that digital video piracy costs the U.S. content production sector anywhere from $29.2 billion to $71 billion per year in lost revenues. Temple discussed the increasing concern posed by illicit streaming, which has become a preferred method among video pirates. Unlike illegal downloads, which infringes reproduction rights and can be prosecuted as a felony under federal law, illegal streaming is an infringement against public performance rights and is only charged as a misdemeanor. “Obviously streaming is something that is continuing to rise,” Temple said, “and not having the effective tools to go after the main way in which pirates are operating really does harm the ability for law enforcement to be able to adequately protect the rights of individuals as they’re supposed to be able to do.”
On the subject of Music Modernization Act (MMA) implementation, Senator Hirono raised some concerns that the Mechanical Licensing Collective (MLC) designated to administer blanket licenses to streaming music services under the MMA may not have the proper incentives to ensure that small, independent artists receive the royalties they deserve. Temple noted that, by statute, both the MLC and the Digital Licensing Coordinator (DLC) are responsible for engaging in outreach to educate musicians about the licensing framework. Further, the Copyright Office was planning on completing a study on best practices for the MLC’s royalty distribution activities that would be released in July 2021, prior to the first distribution of unclaimed royalties.
Will the CASE Act Encourage Copyright Trolls?
Senator Hirono also raised concerns brought to her by critics of the CASE Act who claim that the small-claims copyright system that would be created by that bill could invite litigants who exhibit troll-like behaviors. Temple emphasized the balance that would be sought in creating the Copyright Claims Board, including the fact that the law would require two of three claims officers to have extensive experience representing both copyright owners and users of copyrighted works in legal matters. Temple also pointed to several provisions of the bill meant to limit such behaviors, such as the Board’s ability to bar a party found to engage in a harassing claim or counterclaim more than once in a 12-month period.
Senator Richard Blumenthal (D-CT) discussed recently approved exemptions to circumventing copyright protection systems under Section 1201 of the Digital Millennium Copyright Act (DMCA), especially the exemptions relevant to testing the security of election machines. Such an exemption allowing cybersecurity testing was important given interference during the 2016 election when Russia targeted voting infrastructure in all 50 states and attempted to breach election systems in 21 states, according to a recent report from the Senate Intelligence Committee. Both Blumenthal and Senator Hirono asked whether certain DMCA exemptions should be made permanent instead of seeking reauthorization every three years. Temple said that such permanent exemptions would require Congressional authority, but the Copyright Office has been able to streamline the process to reauthorize exemptions if applicants can show that there hasn’t been a change in the market since the exemption was last authorized.
Temple also told the Subcommittee that the agency’s multi-year study on the effectiveness of safe harbor provisions under Section 512 of the DMCA would result in a recommendation issued to Congress by the end of the year and updated the Subcommittee on the progress of the Copyright Office’s fee study, indicating that a final rule on fee changes would also be issued by the end of the year.
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