A striking Variety cover article shows that there is considerable consensus within the film industry on its greatest challenge right now: innovating to stay relevant in a changing, disrupted marketplace. Unfortunately, that memo apparently hasn’t been circulated inside the Beltway.

On the cover of the January 28, 2015, issue of Variety, the phrase “Broken Hollywood” is superimposed over a cracked “H” from the iconic “Hollywood” sign. The editors explain that they chose this title for their cover story to convey the severity with which 22 industry leaders view the most pressing problems confronting the movie and television business, “which run the gamut from a declining movie audience — particularly among the vital younger demographic — and falling ratings in broadcast and cable TV, to an unacceptable lack of diversity in the creative ranks and executive suites, and inadequate audience measurement across platforms.”

The “luminaries” interviewed in the article discuss in great detail the viewing behavior of millennials, which they describe as tech-savvy, binge-watching cord cutters, cord-nevers, and heavy users of DVRs to skip commercials. However, nineteen of the 22 make no mention whatsoever of copyright infringement, and two (Harvey Weinstein of the Weinstein Co. and John Landgraf of FX Networks) mention infringement only in passing. Just one industry leader, MPAA chief Chris Dodd, focuses his comments on infringement. Dodd cites piracy as the greatest threat to Hollywood jobs, suggests Internet companies unaware of the infringement are “threats to our creative future,” and conflates online infringement with the Sony hack. Yet this isn’t what industry leaders raise in their interviews.

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Yesterday, the Federal Trade Commission (“FTC” or “the Commission”) released its long-awaited staff report on the Internet of Things (“IoT”), which was announced by Chairwoman Ramirez in her keynote at the 2015 State of the Net conference.  Building on a workshop held in 2013, the Commission’s report is a comprehensive look at the promise of Internet-connected everyday objects, the risks that they might pose to consumers, and the Commission’s recommended regulatory and legislative paths forward.  Fortunately for consumers, the Commission’s suggestions, born of a collaborative workshop with privacy groups and industry, do not approach the onerous attempts by the EU to regulate the IoT well-before it gained a market foothold, which DisCo covered way back in 2012.

20150108_144622First, a short primer.  The Internet of Things constitutes the growing wave of innovative technologies set to revolutionize the interactivity of the mundane products that we use every day.  Smartwatches and other wearable devices get the most press, but introducing connectivity to other traditionally “dumb” devices in our environments will make them all more personal, adaptive, and efficient.  Learning thermostats, networked refrigerators, Internet-enabled dog collars that track your pet’s location and wearable fitness trackers are already on sale, with driverless cars, wireless pacemakers, and home automation systems making their way to the main floor of this year’s Consumer Electronics Show (“CES”).

The FTC highlighted the array of benefits of connected devices early in its report.  Connected health devices can provide richer sources of data and improve preventative care for physicians and patients.  An adaptive thermostat coupled with automated lighting and security can reduce energy costs for homeowners and allow for remote monitoring of homes.  Connected cars can offer on-demand vehicle diagnostics to drivers and service facilities, real-time traffic information, and provide automatic alerts to first responders when airbags are deployed.  Eventually, self-driving cars may one day be widely available.  Each additional type of connected device can provide another convenience or efficiency in the everyday lives of users.

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We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

As of January 20, The Interview grossed $40 million from online rentals and sales, on top of $6 million in box office sales. Sony Pictures decided to distribute the film online just days after it cancelled the film’s national theatrical release in response to terrorist threats from North Korea. The enormous online success of the film, months before it otherwise would have been distributed in that manner, significantly undermines one of the primary justifications for the long copyright term that keeps works out of the public domain, today’s Copyright Week theme.

The most obvious purpose for copyright protection is to provide authors with an economic incentive to create works. However, under the U.S. Copyright Act, the term of protection is life of the author plus 70 years (or 95 years from publication for a work with corporate authorship). An author obviously doesn’t benefit from a revenue stream after her death, and it is unlikely that the author’s knowledge that her great-grandchildren may receive royalties provides her with additional incentive to create.

Moreover, the various extensions to copyright term adopted by Congress have always applied retroactively. Clearly, there is no need to incentivize the creation of a work already in existence, particularly after the author’s death.

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We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

The Supreme Court’s Aereo decision last year raised two significant questions for the tech industry. First, would lower courts apply the Supreme Court’s public performance holding narrowly only to services that looked like Aereo (which in turn looked to the Court like the community antenna services of the 1970s), as the Court directed, or would they apply it more broadly to other types of online services? Second, would lower courts interpret the Court’s reluctance to use the word “volition” as an indication that direct infringement liability did not require volitional conduct?

The summary judgment order in Fox v. Dish Network released earlier this week by the U.S. District Court for the Central District of California emphatically answered both of those questions in a manner favorable to the tech industry. (For detailed summaries of the decision, see here and here.) The district court rejected Fox’s suggestion that Aereo was “a game-changer that governs the outcome of its copyright claims….” The district court observed that “in an effort to cabin the potential over-reach of its decision,” the Aereo Court “specifically cautioned that its ‘limited holding’ should not be construed to ‘discourage or to control the emergence or use of different kinds of technology.” The district court carefully proceeded to distinguish the Dish Anywhere with Sling service from Aereo. (The Dish Anywhere service allows a subscriber to view a program recorded on his set-top box on another device.) In particular, the district court noted that Dish had a license to transmit programs to the subscriber’s set-top box, while Aereo did not have a license to transmit programs to the user’s computer.

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We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

Last week at the Future of Music Coalition blog, Casey Rae discussed how transparency is so crucial in the music marketplace. ([1], [2])

As Casey points out, marketplace transparency is a necessary (but not sufficient) condition to ensure artists get a fair and competitive deal.

Digital services have similar needs.  Just as artists need accurate and reliable information to know they are receiving a square deal, music delivery services need accurate and reliable information to know what they can play, and what they’ll have to pay, and to whom.  Most (but not all) participants benefit from a more transparent marketplace.

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We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

So far, the courts are taking Copyright Week very seriously. Yesterday morning the Ninth Circuit issued a favorable decision in Omega v. Costco, discussed here. Yesterday afternoon, a redacted version of the summary judgment order in Fox v. Dish Network was released. (We’ll discuss that decision in a separate post.) Finally, the U.S. District Court for the Central District of California issued a favorable decision in Rosen v. eBay last Friday. The Rosen decision included helpful holdings on the DMCA and fair use, the latter of which is today’s Copyright Week theme. In particular, the court employed the fair use doctrine robustly to vindicate first sale rights over e-commerce platforms.

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We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

The fair use doctrine is an essential limitation on copyright which serves the public interest and benefits every sector of the U.S. economy.  As fair use expert Peter Jaszi told the House Judiciary IP Subcommittee last year, “Everyone who makes culture or participates in the innovation economy relies on fair use routinely – whether they recognize it or not.”

The economic impact is particularly significant.  Research commissioned by CCIA in 2011 concluded that industries depending upon fair use and related limitations to copyright generated revenue averaging $4.6 trillion, contributed $2.4 trillion in value-add to the U.S. economy (roughly one-sixth of total U.S. GDP), and employ approximately 1 in 8 U.S. workers.

A few examples of the many industries that depend on fair use are below:

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Besides cold temperatures, inevitable musings about an Ovechkin-led Capitals being positioned to make a run at the Stanley Cup (followed by them falling off a cliff), and the occasional wayward arctic fowl, January in the District of Columbia comes with at least one constant ritual: the time honored tradition of speculating on what will be included in the State of the Union.  (And, in recent times, the SOTU-themed drinking games that flow from the anticipation… even the Washington Post has one this year).  Although some of the suspense has been dampened with media leaks and a multi-week presidential tour highlighting important SOTU themes, some surprises remain.

With political watchers fixated on what President Obama will and will not include in this year’s SOTU, I thought it was a good time for DisCo to lay out a potential tech policy roadmap for what to watch for this year in the President’s annual “setting priorities” exercise.

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We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

Today the U.S. Court of Appeals for the Ninth Circuit issued a decision making clear that copyright owners should not attempt to limit the first sale rights of users.

The decision is the latest installment in the litigation between Omega and Costco, which began in 2004. Costco, the discount retailer, sold luxury Omega watches without the authorization of the Swiss watchmaker. In an effort to prevent Costco from importing and selling its watches, Omega began engraving an “Omega Globe” logo on the back of its watches. When Costco started importing and selling the watches bearing the logo, Omega sued Costco for infringing the importation right under the Copyright Act. Costco responded that the importation right was a subset of the distribution right, and that the first sale doctrine provided it with an exception to the distribution right. The first sale doctrine provides that the distribution right with respect to any particular copy of a work extinguishes with the first authorized sale of that copy. The district court granted summary judgment in favor of Costco on the basis of the first sale doctrine. The Ninth Circuit reversed. It noted that the first sale doctrine applied only to copies “lawfully made under this title,” and interpreted that phrase to mean manufactured in the United States. Because the watches were manufactured in Switzerland, they were not “lawfully made under this title,” and the first sale doctrine did not apply.

Costco appealed to the Supreme Court. With Justice Kagan recusing herself, the Supreme Court in 2010 reached a 4-4 tie. This meant that the Ninth Circuit decision was affirmed for purposes of the Ninth Circuit, but was not binding precedent in the other circuits.

On remand, the district court once again granted summary judgment to Costco, this time on a copyright misuse theory. It found that Omega misused its copyright in the logo to expand its limited monopoly impermissibly to prevent the importation of the non-copyrightable watches. The Ninth Circuit also awarded Costco $396,000 in attorneys’ fees.

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We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

The Library of Congress is in the process of conducting its sixth cycle of adopting exemptions to the Digital Millennium Copyright Act’s prohibition on the circumvention of technological protection measures (TPMs). The majority of the 27 proposed exemptions address situations far from Congress’s intended target of online infringement when it adopted the DMCA in 1998, indicating that Congress drafted the DMCA far too broadly, and that the Copyright Office is implementing the exemption process far too narrowly.

In an effort to protect the economic interests of copyright owners in the digital age, Congress prohibited people from hacking TPMs in order to get unpaid access to copyrighted works. However, the DMCA is worded so broadly as to prohibit owners of copies of works from circumventing the TPMs limiting access to their copies. Manufacturers of a wide range of devices have exploited this overbreadth to exercise after-market control over the devices in a manner that has nothing to do with copyright protection. Many devices include software essential to their operation. Manufacturers have placed TPMs on this software in an effort to tether the device to complementary networks or products. The DMCA makes unlawful the circumvention of these TPMs for the purpose of untethering the devices.

Congress recognized that there may be legitimate reason for circumventing TPMs, so it authorized the Librarian of Congress to conduct a rulemaking every three years to adopt appropriate exemptions to the DMCA’s circumvention prohibition. In this rulemaking cycle, 14 of the 27 proposed exemptions concern situations where the work protected by the TPM is a software component of a hardware device owned by the user. In other words, the exemption would allow the owner of a hardware product to make a use of her personal property obstructed by the DMCA.

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