DMCA at 22: my notes from the Senate hearing

Senate Judiciary Committee, Intellectual Property
Subcommittee, The
Digital Millennium Copyright Act at 22: What is it, why was it enacted, and
where are we now
(archived video; apparently you have to wait 13 minutes
before the hearing actually starts, though)
Sen. Tillis: DMCA was passed when Chumbawumba and Myspace
were popular. Time to hear about modernization. Protection was given to new
platforms in exchange for quick removal. Almost everything has changed in 22
years. Goal: introduce reform bill w/bicameral, bipartisan consensus. Top
priority for him. Today: background and level-setitng.
Panel I
The Honorable Edward J. Damich, Senior Judge, United States
Court of Federal Claims
Damich was chief IP counsel for Senate Judiciary at the
time; not providing views of judiciary but recollections as staffer. Internet
just coming into its own: 36 million web users in 1996. Highlights: (1) ISP liability
for users’ infringement, (2) TPMs were key issues. Sen. Hatch didn’t want to
disturb common law of secondary infringement; wanted to focus on practical reality
of internet at the time: email, system caching. Hosting required more care: notice
& takedown or actual knowledge requried action. Middle ground b/t duty to monitor
and actual knowledge: red flag provision. ISPs should not ignore clear indications
of infringement however discovered & should cooperate w/copyright owners.
Anticircumvention: controlling access was becoming more important than making
copies. Exceptions included periodic rulemaking for temporary exemptions.
Mr. Jonathan Band, Owner, Jonathan Band PLLC
TPM control appeared in EU Software Directive. Problem:
legitimate reasons to unlock TPMs, including for interoperability; he worked on
exceptions. Safe harbors for basic online functions: Yahoo provided the
then-leading directory, but arguably fell outside the info location tool safe
harbor, so negotiated legislative report language to make clear that it was
covered. Database protection was also proposed by the DMCA House version,
fortunately failed. DRM and safe harbors were a compromise: you can’t consider
the effectiveness and fairness of either in isolation. Each industry believes
its own section was successful; each title includes internal compromise, but that
was a grand bargain between each one. Congress made policy choices w/open eyes
and courts have generally complied with Congressional intent. Note also term
extension at the same time: windfall to © owners.
Mr. Robert S. Schwartz, Partner, Constantine Cannon
Road began in 1981 with 9th Circuit’s ruling against VCRs.
Even after the SCt overturned that, content industry proposed levies on tech.
Consumer groups formed home recording rights organization. Negotiated serial
copy management system designed to prevent impact on general computers—AHRA—which
became a dead letter quickly. Computers have to be covered, so there was a copy
protection working group.  Bad experience
with mandatesàTPM
provisions. Should have tied circumvention to copyright infringement; should be
limited to expressive uses and allow for uses like vehicle repair. Trafficking
provisions inhibit fair use and vehicle repair. Even with an exemption, user
can’t get lawfully produced software to take advantage of exemption b/c of
trafficking provisions.
Mr. Steve Metalitz, Partner, Mitchell, Silberberg &
Knupp LLP
Speaking in personal capacity though represented © industries
in negotiations. Implementing WIPO digital treaties: 1201 was for that. On the
whole, remarkably successful: lots of access to content, due in large part to
TPMs [now wait until he tells you about what the creative environment is like
due to 512]—allowed creation of marketplace, not thieves’ bazaar. Congress got
this right.  512 was a different story:
politically necessary, not necessary for treaty compliance. Telcos wanted
payback for the IP carveout in 230. Copyright owners didn’t need or want 512.
Goal: provide incentives for © owners and services to work together.
Infringement is pervasive and so are infringement-based business models. Close
to blanket immunity for OSPs if they take relatively minimal steps out of scale
with the infringement problem; can base their business models on infringement.
Dominant online businesses have to shoulder responsibility for bad behavior,
including IP theft. Increased volume of infringement, increased velocity, need
for voluntary arrangements that haven’t yet materialized.
Sen. Coons: This is the most active subcommittee of
Judiciary. Core © industries add $1 trillion to GDP. [And core OSP industries?]  Google didn’t exist in 1992. Digital piracy
has exploded. Unauthorized copies are just a click away. [Yep, 1201 totally
worked.] Digital video piracy costs $29 billion/year and 250,000 jobs.
Tillis: what areas are most contentious? Given where we are
now, is there opportunity to bridge the gap with modernization?
Damich: Ethically can’t give opinions on future legislation.
Tillis: root causes of differences?
Damich: did try to compromise on 512 & 1201. Hatch broke
impasse: made sure there was a core group of stakeholders then a larger group
of interested parties like libraries, reverse engineering researchers, law
enforcement were allowed to comment.
Band: 1201, 512, databases all happening together. Most of
the focus was probably on safe harbors b/c players were bigger on both sides:
telcos v. big content providers. Hard to get focus on 1201/databases. Hard to
get researchers to believe 1201 would happen: encryption researchers insisted Congress
would never do anything so stupid. More people are familiar now with 1201 and
auto repair type problems.
Schwartz: Home Recording Rights Coalition was included up to
a point, then excluded from negotiations. We were considered too tough to make
a final deal with. Sen. Ashcroft worked with us to work on legislative history.
Didn’t anticipate that at most recent triennial rulemaking we’d be there on
behalf of farming bureaus. With short growing seasons + distant repair
facilities run by manufacturers, a software-dependent equipment breakdown means
a waiting list for authorized repair, while independents would do it if they
could. It’s not trafficking to obtain and use software; the Copyright Office
has gone as far as it thinks it can go in allowing repairers to act on behalf
of owners but still needs guidance on trafficking.
Metalitz: also surprised to represent auto manufacturers at
the triennial rulemaking. 1201 speaks in very general terms of all TPMs. Stood
the test of time better than 512, which depended on the tech of the time. Storage
at the direction of the user was straightforward at the time. Other functions
were added: indexing, highlighting content for users. [This is ahistorical,
albeit algorithmic discovery was in its infancy; indexing and highlighting were
definitely known at the time.] Unfortunately courts said this was all ok but
that wasn’t intended. Legislation in general terms (except for the exceptions
in 1201, which are good) last longer v. tech-specific 512.
Panel II
Professor Sandra Aistars, Clinical Professor Senior Scholar
and Director Copyright Research & Policy, Center for the Protection of IP, Antonin
Scalia Law School, George Mason University
Informed by clients’ epxerience but views are her own. 512
hasn’t helped creators; the bargain Congress expected was not achieved. Twin
goals of quick removal and support for innovation. No blind eye to infringement—red
flag provisions have been misinterpreted and eviscerated, especially in 2d and
9th Circuits [those hotbeds of hostility to the © industries]. Perfect 10 v.
CCBill—“illegal/stolen” label wasn’t a red flag [to credit card
processors].  Viacom v. YouTube limited
obligation to knowledge of specific infringing activity, and UMG v. Shelter
Capital agreed. Capitol Records v. Vimeo: red flag not triggered by full length
copies of © works, even when leaders winkingly encouraged infringement. Notice
and takedown alone isn’t enough. Representative list requirement isn’t enforced.
Works with artists and small businesses; even trained and coached, students
found removal frustrating and time consuming; searches led to phishing sites
[note that this is already illegal; these sites aren’t likely to be complying
with the DMCA and it has yet to be explained to me why they’d comply with
DMCA-Plus.] CASE Act would allow recipients of bad notices to sue in small
claims court.  Cox is a good case: they
failed to enforce even a toothless repeat infringer policy.
Professor Rebecca Tushnet, Frank Stanton Professor of the
First Amendment, Harvard Law School
I would like to start with some perhaps surprising numbers
that illustrate what §512 has meant for creativity and innovation online.  I work with a nonprofit, the Organization for
Transformative Works (OTW), that doesn’t have a single paid employee. With a
budget of under $400,000 per year, it operates a website for user-generated
content that currently has over four million creative works from over a million
registered users. Those millions of works attract 1.12 billion page views per
month. That’s more than double what it was only three years ago, and rapid
growth continues. Last year we were honored by the World Science Fiction
Society with a Hugo Award for our service to the global community of fans.
Despite the large numbers of works posted on our site, we
get less than one DMCA notice per month. Most of those notices are invalid,
such as attempts to claim rights in a title or name. At the cost of significant
amounts of volunteer lawyer time—something very few services can afford—we
carefully review each notice and explain to the senders of the invalid notices
why their claim is mistaken. Unfortunately, our experiences with mistaken and
abusive notices designed to suppress noninfringing and critical speech are
common among service providers.
Empirical research reveals that most of the internet service
providers who rely on §512 are like us: Most service providers receive
relatively few notices and handle them individually. Only a few entities receive
millions of notices. While market pressures and business decisions have led a
few large sites like YouTube to rely on automated systems and sometimes on
filters, it is important not to treat YouTube as a model for the internet at
large. If we did, the only online service to survive would be YouTube.
If there is one message I would ask the members of the
Committee to take away today, it is that most beneficiaries of §512 are not
like Google or Facebook. Big or small, most sites that use §512 don’t need and
couldn’t survive a requirement to use technologically complex mechanisms to
filter out the relatively rare infringements.
There are serious problems of market concentration in the
content and telecommunications industries, and §512 has been vital to preserving
the competition that exists. If Congress changes §512 to target Google and
Facebook, or because of rogue overseas sites that already ignore the law, it
will ensure that only Facebook, Google and pirate sites survive, making the
problem of market concentration even worse without protecting creators. A
mandate for filtering, whether called “staydown” or something else, would
destroy the small and medium entities that are vital to innovation, creativity,
and competition on the internet.
The system is by no means perfect—there remain persistent
problems with invalid takedown notices used to extort creators or suppress
political speech—but, like democracy, it’s better than the alternatives that
have been tried.  The numbers of
independent creators and the amount of money spent on legitimate content are
growing every year. Changes to §512 would be likely to make things much worse.
My written testimony addresses some other specific issues,
including section 1201. Section 1201 is broken: it is mostly used to suppress
competition rather than protect copyrighted works from infringement. It would
benefit from requiring a nexus between circumvention and copyright
infringement. Otherwise it will continue to be used to prevent diabetics from
getting information from their own medical devices and researchers from
investigating security vulnerabilities in voting machines.
Professor Jessica Litman, John F. Nickoll Professor of Law, University
of Michigan Law School
Three points: (1) In 22 years since DMCA, anticircumvention
hasn’t lived up to its promise. Immense symbolic value, not effective v. piracy.
No additional deterrent to people who are already infringing. DRM is not
impregnable and it is buggy—prevents licensed uses. Americans believe that if
they buy a copy, they should get to use it. If they need to repair it, they
often try to find fixes and usually succeed. Circumvention tools are widely available.
Meanwhile, businesses that embed software have harmed aftermarket parts and independent
repair. It’s unreasonable to tell a farmer who wants to repair a tractor to
petition the Librarian of Congress for permission to do so. That has nothing to
do with © piracy.
(2) 512 safe harbor tradeoff worked well for longer than we
had any right to expect. Courts have been good at interpreting it. Principal
weakness: imagined human judgment applied in good faith to send and receive
notices. That didn’t scale for large © owners and [some] large services.  Automated solutions are buggy with false
positives/wrongness. Larger © owners and services have negotiated private
deals, but smaller services without the ability to strike private deals still
find 512 essential.
(3) © owners complain about “value gap” based on market
power of ISPs leading to lower license fees. I get why © owners are upset, but
this is a bargaining power/competition problem, not a © problem. Antitrust
would be a better solution.
Professor Mark F. Schultz, Goodyear Tire & Rubber
Company Chair in Intellectual Property Law Director, Intellectual Property and
Technology Law Program, University of Akron School of Law
Good intentions—sought to shield infant industry, which is
grown up now into world’s most wealthy and powerful businesses; outdated
assumptions. Courts narrowed service providers’ responsibility too much.
Congress assumed ISPs would be indifferent to infringement, not supportive of
it. Infringement notices in billions, files spread fast. Not just one upload,
nonstop uploading by many users. Finding one copy is worthless. Many online
services profit from availability of infringing material. [I always wish they’d
name names. Lots of services that did profit in this way have been sued out of
existence, and also Veoh, which didn’t; who exactly do they think, other
than Google, is an illegitimate business that survives only because the DMCA
doesn’t have a filtering mandate?]  Courts
have excused businesses from many duties intended by the DMCA even where they
knew of and profited from infringement—not what laypeople would call knowledge.
Red flag now meaningless. [This is the specific knowledge/general knowledge
distinction: general knowledge that infringement is most likely occurring on
your platform is not red flag knowledge. 
I wonder whether he thinks the University of Akron has red flag
knowledge, defined as he would like to redefine it.]
Solutions: (1) amend 512 to require notice and styadown. (2)
Revise to define willful blindness; not encouraged to ignore infringement.
Sen. Tillis: What did you learn from panel 1?
Schultz: Metalitz is right: red flags.
Litman: 512(m) explicitly relieved sites of a duty to
monitor; that was a good idea; courts have been really careful to limit
knowledge so as not to interfere with 512(m).
RT: These red flag claims are not right. Viacom seeded YT
with apparently leaked footage; what counts as red flag knowledge is
appropriately determined case by case. 
On the volume of infringement: Almost all the sites you’ve heard of,
including Wikipedia and Amazon Kindle/digital, have very few problems with
actual infringement. Most can’t afford and don’t need filtering.
Aistars: 1201 engendered cross industry cooperation; worked
w/entertainment and computer industry to not burden consumers and build new
businesses. 512 didn’t engender affordable tech to filter works before they
were uploaded. Court decisions around 1201 have hewed to parties’ expectations.
We didn’t expect printer cartridges and courts didn’t apply 1201 to them.
Lacked same luck for 512.
Sen. Leahy: Success reflected a years long bipartisan
process. To RT: is it working?
RT: Yes: Most sites don’t have problems.  Google receives billions of notices, but it
is doing a lot/used to get other sites not searched.
Coons: Does 512 discourage sites from gaining knowledge?
RT: No, it encourages them to monitor for other bad things
like terrorist content without fear that if they see something else they’ll be
liable for infringement.
Litman: also encourages monitoring for ©: if they catch one
infringement, 512 means they can’t be held liable for the ones they missed.
Coons for Schultz: is burden on rightsholders to police
A: should be shared burden. YT had scroll showing one Comedy
Central clip after another on homepage. Knows content owner objects; that’s
For Aistars: repeat infringers/whack a mole?
A: (1) isn’t a shared burden to find infringement; (2) there
has been some success against ISPs that don’t implement their own extremely
lenient policies, but that’s not much of a victory—14 notifications before
action is taken, and customer can just start again; sets us up for bad actors
trampling small businesses. Have to decide on creating v. sitting at home
searching for infringement.
Coons: working together on voluntary measures?
Aistars: STMs are supposed to be accommodated, but there’s
no process to ID tech though many could qualify, like Audible Magic. For a # of
years, relatively inexpensive [$10,000/month for small websites, yay]. 1201
worked b/c there were incentives for cross industry cooperation. 512=no
incentives for anyone. No requirement to work together.
Coons: are there easy modernizations to improve balance?
Aistars: red flag.
RT: (1) apply antitrust to © and telecom. (2) 1201
infringement nexus.
Litman: narrowing 1201 would help. 512: these are computers,
they aren’t as smart as us. They don’t recognize what humans would. Can’t tell
who uploaded content. Can’t simply assume that online services perceive as
humans do.
Schultz: red flag. Willful blindness isn’t just computers;
Vimeo says employees can interact w/famous content, but b/c they’re not ©
experts, can’t hold them to objective knowledge. Every layperson knows where to
go to get infringing content. [Is it Vimeo?]
Sen. Tillis: What are decisions that are problematic?
Aistars: See her testimony: Perfect 10 v. CCBill, Viacom,
UMG v. Shelter Capital, Capital Records v. Vimeo.
RT: those cases were rightly decided. Perfect 10 was
specific to sexual content, Viacom had those “leaked” uploads.  The alternative, filtering via staydown is
terrible. Google spent $60 million [correction:
now $100 million
] on a system that is 60% effective according to the major
labels who use it, and we’re better at ID’ing music than at other types of
Litman: dislikes some results. In Cox, they lost the safe
harbor for not terminating users, which could be right, but Cox was receiving automated
takedown notices with thousands of dollar-demanding settlement letters
attached. They wrote back refusing to forward the settlement letters. The court
considered these to be notices that Cox ignored.
Schultz: dislikes same cases as Aistars. The understanding
of what constitutes knowledge defies common sense/most other areas of law.
Staydown should only occur after notice. [I don’t know why
people think this is an argument in favor of filtering. The primary problem
with filtering is not that there’s no list, it’s the expensive and error-prone apparatus
of filtering that most sites can’t afford and don’t need. It’s as if the police
came to every business on Main Street and said, we’ll be sending you a list of our
10 most wanted, and if you don’t employ facial recognition at each entrance to
catch them you’ll be breaking the law, but don’t worry, it won’t be burdensome
because we’ll send you the pictures.] 
Affordable filters exist but there’s no market demand; if there were a
duty we’d see more systems [magic, or Audible Magic?]. Congress can make
Tillis: infringement online is big; number of notices is
difficult for new entrants [again, this is not true in the way he thinks—most entrants
don’t get big numbers of notices, but quality screening can be a big deal]. Neither
is wrong but the DMCA is not working in every case.

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