Competition vs. Copyright On Digital Platforms

The U.S. Copyright Office last week released a report on copyright protections for press publishers and whether the U.S. should adopt additional digital protections similar to the “ancillary right” included in the European Union’s Directive on Copyright and Related Rights in the Digital Single Market (“EU Copyright Directive”), which is designed to empower publishers to demand payment for the aggregation and display their content online by the likes of Google and Facebook.

Senators Want Answers on NFTs and IP

The Great Bored Ape NFT Theft Saga that temporarily derailed actor-producer Seth Green’s plan to cast his cartoon simian (BAYC #8398) in an animated series appears to have ended peacefully now that Green has agreed to pay nearly $300,000 for the safe return of the purloined primate. Why, exactly, the NFT’s adopted owner, DarkWing84, agreed to sell after rejecting previous offers is unclear. But the animated series project, presumably, can now proceed. While good news for Seth Green, the ape’s return does not really resolve the questions discussed here in a previous post concerning the relationship between NFTs and the IP rights associated with the assets to which they’re bound.

Monkeying Around with Rights

There is more to a Bored Ape Yacht Club NFT than merely an encrypted link to a JPEG image. According to the terms & conditions of acquiring an ape published by BAYC creator Yuga Labs, “Yuga Labs LLC grants you an unlimited, worldwide license to use, copy, and display the purchased Art for the purpose of creating derivative works based upon the Art (‘Commercial Use’).” That commercial-use license has been a key to the success of the BAYC brand. It has enabled an entire ecosystem of BAYC spinoffs and merchandise — derivative works — to flourish and greatly buoyed the value and price of the NFTs, at least until the recent market pullback.

Listen Up: Audio is the New IP Incubator

Where do new IP franchises come from? Increasingly, they are coming out of podcast studios and other sources of non-music, or spoken-word audio. Time magazine recently compiled a list of 9 podcasts that have been turned into streaming TV shows, ranging from true crime series (The Shrink Next Door, Dirty John) to comedy (Bodega Boys) to ripped-from-the-headlines scandals ( The Dropout). The Wrap came up with a roster of 17 for a list published last June.

Amazon-owned Audible, which made its mark as a distributor of audiobooks, has lately been inking multi-year development deals with A-list Hollywood talent and music superstars for its Audible Originals, including with the likes of Kerry Washington, George Clooney, Charlamagne tha God and Queen Latifah.

Reframing the Debate Over Online Copyright Infringement

Pretty remarkable series of rulings from a federal district court this week (h/t TorrentFreak) in a string of copyright infringement cases against a trio of allegedly illegal streaming sites. In three nearly identical rulings (see here, here and here), the Federal District Court for the Southern District of New York ordered the sites to cease operating and to each pay the plaintiffs $7.65 million in statutory damages related to 51 copyrighted works.

This Is Not a Test: New Alliance Makes Music Rights Data Sharing Real

The music industry’s legacy of sloppy, archaic and indifferent data management, particularly with respect to who owns what, has proved a major liability in the age of streaming, when billions of individual transactions need to be tracked, reported and paid out on every day. But repeated efforts to improve the situation through data sharing and collaboration throughout the value chain have floundered, mostly on fears of loosing proprietary control and leverage.

Look Who’s Talking: AI, Voice and Audiobooks

Digital technology has transformed the audio sector of the publishing business, creating new formats for published works, new forms of licensing, and new modes of production and distribution.

Once limited to simple books-on-tape, often in abridged form, and sold through retail outlets, audiobooks are today available in both downloaded and streamable form, as well as retail, and on a variety of platforms, from Amazon-owned Audible to Spotify and Apple Music. From 2015 through 2020, according to the Audio Publishers Association (APA), sales, rentals and streams of audiobooks grew by 157%, and now represent roughly 15% of publishing revenue.

Dispute over EU Copyright Directive flares anew

The battle over the European Union’s Directive on Copyright in the Digital Single Market was thought to be all over but the shouting. The final text of the directive was adopted by the European Parliament last year and the deadline for member countries to implement the directive in their local laws was set for June, 2021. All that was left was to figure out how member state legislatures, rights owners and digital platform providers would give it practical effect.

But proposed guidance issued by the European Commission for the “transposition” into law of Article 17 — the directive’s most controversial provision — has reignited the fierce debate over whether and in what manner platforms should be required to pre-filter uploaded content for potentially infringing material, and once again pitting rights owners groups against the platforms and their allies among consumer groups.

In a sharply worded letter sent as the public comment period on the proposal was closing earlier this month, a group of copyright organizations including IFPI, Impala, the MPA and others, accused the Commission of attempting to “amend” the directive “without due legislative process.”

According to the guidance, any use of automated upload filters should seek “to ensure that legitimate content is not blocked when [such] technologies are applied.”

Thus, “the guidance would take as a premise that it is not enough for the transposition and application of Article 17 (7) to only restore legitimate content ex post, once it has been blocked. When service providers apply automated content recognition technologies under Article 17(4)…legitimate uses should also be considered at the upload of content.”

The guidance goes on to recommend a procedure for the use of ACR technologies similar to one proposed by public interest groups during the stakeholder dialog. In particular, if an upload is initially flagged as containing copyrighted content but is determined to be “not likely” infringing, the platform would be required to notify the uploaded who would be offered a chance to challenge the initial flagging.

If challenged, the upload would be reviewed by humans but would remain up while the review is performed. If determined to be non-infringing it would stay up, although the rights owner would be able to send a takedown request, which would then go through a separate adjudication.

To the rights owner groups, such a procedure would effectively reverse the victory they thought they had won through the hard fought adoption process: the shifting of the burden of policing platforms for infringing content to the platform providers. Instead, rights owners would essentially be back in the business of having to file post hoc takedown notices while their content remained online.

As a technical legal matter, the issue concerns whether Article 17 represents only a clarification of the “communication to the public” right spelled out in the earlier EU directive on the information society (“InfoSec Directive”), as rights holders argue, or if it is a new, sui generis right (“lex specialis“) that requires separate interpretation.

The guidance comes down firmly on the side of a sui generis right.

Article 17 is a lex specialis to Article 3 of [the InfoSec Directive] and of Article 14 of [the Electronic Commerce Directive]. This is confirmed by Recital 64 [of the stakeholder dialog], which states clearly that Article 17 does not affect the concept of communication to the public or of making available to the public elsewhere under Union law, nor does it affect the possible application of Article 3(1) and (2) of [the InfoSec Directive] to other service providers using copyright-protected content. As such, Member States would not be able to rely in their transposition of Article 17 on their implementation of either of those directives in relation either to the notion of ‘authorisation’ or indeed for the notion of ‘communication to the public’. 

The proposed guidance is preliminary. The Commission will now consider the submitted comments and issue its final guidance next month. But if the final guidance follows suit with the proposal, it would mean the only two implementation (transposition) plans submitted so far — by France and The Netherlands — would be inconsistent with the Commission’s formal recommendations.

It also sets up the possibility of several months of intense wrangling ahead over individual countries’ implementing laws and the potential for varying, and even conflicting applications of Article 17 in different EU member states.

In coming months, our RightsTech Roundtable webinar series will be taking up the debates over the implementation of the EU Copyright Directive, including both Articles 17 and 15, the so-called link tax provision, and what both rights owners and platform providers need to do to prepare ahead of the June, 2021 deadline.

Stay tuned for more details on our upcoming programming.

Introducing the RightsTech Virtual Roundtable

The RightsTech Project is pleased to announce the RightsTech Roundtable, a weekly free webinar that will be part of the Digital Entertainment World Let’s DEW Lunch webinar series. Each Thursday we will highlight the important news of the week and a deep dive into a critical topic or issue for the RightsTech community featuring expert speakers and presenters. Click here for more information on Let’s DEW Lunch, and on speaking and sponsoring opportunities.

EU Copyright Directive: Cracks Appear in Support for Article 13

With final negotiations underway among the European Parliament, Council and Commission over the European Union’s proposed Copyright Directive, and lobbying for and against it at a fevered pitch, Article 13 of the directive, which could force online service providers to actively screen content uploaded to their platforms for copyright infringing material, remains at the center of the debate. This week, however, cracks began to appear in once solid wall of support for the measure among major rights owners.

In a letter to the negotiating parties, the Motion Picture Association, representing the major studios, along with the Independent Film & Television Alliance, the Association of Commercial Television in Europe, and several major European sports leagues, took issue with changes being considered in the “trilogue” to the version of Article 13 passed by the European Parliament in September, claiming they would further cement the dominance of major online players such as YouTube, and asked that their content be excluded from provision should those changes be adopted.

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