This Thursday, the U.S. Court of Appeals for the Federal Circuit (CAFC) will hold oral arguments in the fair use phase of the long running litigation between Oracle and Google concerning Google’s replication of some elements of the Java application programming interfaces (APIs) in the Android API. This post will review how we got to this point and anticipate some of the misleading arguments Oracle probably will make in its effort to overturn the jury’s fair use verdict.
On Friday afternoon, the United States Trade Representative (USTR) released updated objectives for the renegotiation of the North American Free Trade Agreement (NAFTA). Widely anticipated by industry and the trade community, the new objectives provide an overview of U.S. priorities for the agreement five negotiation rounds in. Under the Trade Priorities and Accountability Act of 2015, USTR must “regularly update” the public on U.S. objectives following the start of negotiations. Prior to Friday’s release, USTR had not yet fulfilled this obligation with respect to NAFTA, and Senator Ron Wyden recently pressed USTR to comply with this aspect.
After concerning reports about the removal of critical safe harbors for online intermediaries in the earlier rounds and a lack of clear commitments in the original set of priorities released in July, USTR’s commitment to modernizing the agreement to better reflect the digital economy was questionable. These updated objectives represent significant progress on digital trade priorities and shed necessary light on the ongoing process, but the objectives still fall short with respect to ensuring liability protections for intermediaries for third party content paralleled in U.S. law.
Copyright limitations and exceptions like fair use and fair dealing positively contribute to economic growth and innovation and are relied upon by a diverse representation of industries. Numerous studies (including but not limited to    ) continue to drive this point home, most recently with a forthcoming study, previewed this week, by the Program on Information Justice and Intellectual Property (PIJIP) that concluded “open” fair use-type laws benefit innovation, creativity, and foreign direct investment.
The study (full report on file with author), The User Rights Database: Measuring the Impact of Copyright Balance, compiled and evaluated a database of middle income and high income countries’ changes to copyright limitations and exceptions from 1970 to 2016. The report observed that the “openness” of a country’s copyright regime is positively related to economic development and creativity within the country. “Openness” refers to copyright limitations and exceptions that apply to any kind of work, by any kind of user, for any purpose. This was represented on a scale from 0-3, where a score of 0 represented that a law had no element of “openness” and a score of 3 represented that the law “clearly” had elements of “openness” (for example, a quotation right that was open for any type of user, to any work, for any purpose).
Based on the results (illustrated in the charts above taken from the report), U.S. firms operating abroad reported higher income, an increase in total sales, and an increase in value added in host countries with more “open” copyright practices. Internet services and software publishers also specifically benefitted. The data shows these industries that rely on copyright limitations and exceptions reported higher revenues in countries with more “open” limitations. A particularly illuminating data point of the report showed that a one-unit increase in the “openness” score is associated with a 50%-70% increase in revenue, even controlling for firm size, country wealth, country size, and time.
Digital goods and services have become an integral component to international trade. According to the U.S. International Trade Commission, digital trade added up to 2.4 million U.S. jobs and $710 billion per year to U.S. GDP. However, under the guise of promoting domestic innovation, national security, and privacy protections, countries are increasingly adopting discriminatory policies that disadvantage U.S. technology companies in particular and pose significant barriers to cross-border delivery of Internet services.
This matters because the growth of U.S. technology firms — and the success of U.S. small businesses that use these firms to reach global audiences — depends on access to markets where digital barriers are on the rise. It also matters because U.S. firms are in fierce competition with foreign firms for access to over 3.7 billion Internet users across the world. One key data point shows the changing global dynamic: in 2014, nine out of the top ten global Internet companies were made in the United States. Today, only six of those leading brands are U.S.-based.
On Wednesday, CCIA submitted comments to the Office of the United States Trade Representative in preparation for the 2018 National Trade Estimates Report (NTE). The NTE is a tool used by USTR to compile and identify barriers to trade around the world. Our comments identified six prominent barriers to digital trade: (1) data and infrastructure localization mandates, (2) filtering and blocking, (3) inappropriate legal liability for online intermediaries, (4) imbalanced copyright and link taxes, (5) “backdoor” access to secure technologies, and (6) undue restrictions on “over-the-top” services including rich interaction applications.
The Court of Justice of the European Union (‘CJEU’ or ‘the Court’) recently issued its decision in Case C-610/15, Stichting Brein v Ziggo BV and XS4ALL Internet BV — often known as the Pirate Bay case (‘TPB’). This decision focuses on the concept of ‘communication to the public’.
In this blog post, we contrast this decision with the European Commission’s proposed Directive on copyright (the ‘Copyright Reform Proposal’), which we’ve discussed in many previous blog posts (see here and here). As faithful DisCo readers may remember, this proposal entirely rewrites the European intermediary liability regime in its Article 13 and corresponding recitals. It also tries to dramatically broaden the scope of copyright and in particular the key notion of ‘right of communication to the public’, by stating that “information society service providers store and provide access to the public to copyright protected works … thereby … performing an act of communication to the public”.MORE »
In a decision issued today, the U.S. Court of Appeals for the Fourth Circuit affirmed the district court’s ruling in SAS v. World Programming Limited that WPL breached its license with SAS when it reverse engineered SAS’s computer program to develop an interoperable program. The Fourth Circuit also ordered the district court to vacate its ruling that WPL did not infringe SAS’s copyright by replicating the input and output formats of the SAS program because this ruling was moot. (DisCo discussed the district court’s decision here.)
From an interoperability perspective, the Fourth Circuit’s decision is a mixed result. It could have been worse; the Fourth Circuit could have reversed the district court’s copyright ruling. On the other hand, it could have been better; the appellate court could have affirmed the district court’s ruling. Instead, the uncertainty regarding the scope of copyright protection created by the Federal Circuit’s decision in Oracle v. Google remains. (DisCo frequently has discussed the Oracle case, most recently here.)
Today, consumers have access to a greater selection of music than ever before. They can listen to music anywhere, anytime, on a broad range of devices. Sharing and creativity have flourished, enabling new business models for creators and the emergence of new artists, as well as ensuring that the supply side of music is more diverse and competitive than ever.
However, part of the debate over European copyright reform focuses on the idea of a “value gap”, arguing that the music industry does not benefit as it should from music streaming services. Consequently, provisions that would upend the entire European digital sector and that are not compatible with EU fundamental rights (as clearly explained by over fifty human rights and media freedoms NGOs, including Reporters without Borders) were introduced in the EU copyright proposal.
In a research paper published by the Computer and Communications Industry Association (CCIA), we expand on a previous DisCo blog post and argue that the gains in music choice, creativity, diversity and competitiveness – thanks mainly to digital services – have not been achieved at the expense of legacy music players, such as major labels and collecting societies.
Another day, and another sudden development in the European Copyright reform. As DisCo readers may remember, we explained in a September blog post that many European Member States (including Germany) were questioning the compatibility of the EU copyright proposal from the EU Commission with the e-Commerce Directive, a legal cornerstone of the European digital sector.
Today, Politico Europe leaked the (lengthy, technical) Opinion from the Legal Service of the European Council, vindicating the concerns expressed by these Member States. Member States were particularly concerned that the Copyright proposal (Article 13 and recital 38) was an unspoken attempt to rewrite the rules of the e-Commerce Directive and to redefine the notion of “communication to the public” (fundamental to the relationship between hyperlinking and copyright) through the backdoor. On those counts, the opinion is a victory for Member States – the Legal Service has harsh words for the Commission’s approach.
The Legal Service was expected, at the request of many Member States, to provide clarity on a proposal that many experts still struggle with. The lengthy, technical document comes with the requisite non-committal disclaimers and caveats. And ultimately, the opinion concludes that the Member States need to decide what the proposal actually should mean before any conclusive opinion can be delivered.
However, in the diplomatic language of the Council lawyers, the opinion also takes a direct swipe at the Commission and points Member States back to the Commission for answers.
As faithful DisCo readers might remember, the “publishers’ right” or “ancillary copyright for press publishers” is an exclusive right granted to publishers for the online uses of their press publications, introduced by the European Commission in its copyright directive proposal in September 2016 – despite the failure of similar measures introduced in Germany and Spain.
We have often argued (, , ) that such a right would undermine media pluralism, access to information and digital innovation and called on the European Parliament and European Council to reject the introduction of this right.
Today, the Legal Affairs (JURI) Committee of the European Parliament, which leads the work on this copyright proposal, published a study commissioned on the press publishers’ right (Article 11 of the Copyright proposal).
This study, titled “Strengthening the Position of Press Publishers and Authors and Performers in the Copyright Directive” and authored by L. Bently, M. Kretschmer, T. Dudenbostel, M. del Carmen Calatrava Moreno and A. Radauer, supports many of the arguments previously made on DisCo on the press publishers’ right.
Last week, the content industry launched a new coalition—ACTION for Trade—dedicated to keeping Internet intermediary safe harbors out of the renegotiated North American Free Trade Agreement (“NAFTA”). Matt Schruers noted in a recent DisCo post that such an effort would break with existing law and Congressional direction in trade promotion legislation. It also would break a nearly 20-year-old bargain brokered by Senator Orrin Hatch, now the chairman of the Senate Finance Committee. This bargain, first embodied in the Digital Millennium Copyright Act (“DMCA”), has been replicated in U.S. free trade agreements with sixteen countries.
Congress enacted the safe harbor system in 1998 as one title of the much broader DMCA. This broader statute, in a separate title, established prohibitions on the circumvention of technological protection measures. These two titles were adopted together to create a balanced approach to copyright enforcement in the Internet environment. They represented a carefully negotiated compromise between diverse stakeholders.