Category Archives: Law and Policy

Authors Alliance Voices Concerns About the CASE Act

Posted September 10, 2019
photo by Martin Falbisoner | CC BY-SA

Today, the United States House Committee on the Judiciary is scheduled to review H. R. 2426, the Copyright Alternative in Small-Claims Enforcement Act of 2019 (the “CASE Act”). The CASE Act would establish a small claims tribunal within the Copyright Office as an alternative to federal court for pursuing copyright claims.

As we’ve previously written, Authors Alliance supports reducing barriers to copyright enforcement for those with limited financial resources by providing a faster and cheaper avenue to remedies. Today, the high cost of litigation keeps many independent authors and other creators from enforcing their copyrights. A well-designed copyright small claims process could fix this but, unfortunately, the CASE Act as written invites abuse and poses a high likelihood of harm to authors as both claimants and respondents in the proposed tribunal.

To address problems with the current draft of the CASE Act, our letter urges the Committee to:

  • Limit statutory damages to cases where it is impossible or cost prohibitive to prove actual damages and develop principles to guide awards of statutory damages;
  • Remove restrictions on the grounds for judicial review of the tribunal’s decisions;
  • Include additional safeguards to deter copyright trolls and preserve the utility of the small claims tribunal for independent authors and creators;
  • Require potential respondents to affirmatively opt-in to the small claims process; and
  • Narrow the jurisdiction of the small claims tribunal.

Read more about these recommendations in our letter to the Committee.

Independent authors and creators should have access to a low cost way to enforce their copyrights and vindicate their right to use others’ copyrighted works in lawful ways. We urge the Committee to modify the bill to better serve the creators it is intended to benefit.

Publishers Sue to Block Audible Captions

Posted August 26, 2019
preview of the proposed Audible captioning function

Last Friday, a group of seven publishers—including HarperCollins, Penguin Random House, Hachette Book Group, Simon & Schuster, and Macmillan—filed suit in the U.S. District Court for the Southern District of New York against the audiobook platform Audible. Earlier this summer, Audible (which is owned by Amazon) announced plans to enable machine-generated text captions to scroll across screens as audiobooks are played, a development that the publishers view as copyright infringement. The lawsuit, Chronicle Books, LLC et al. v. Audible, Inc., seeks an injunction to prevent the September release of the captioning function.

According to the publishers’ complaint, the proposed caption feature infringes on their copyrights because it creates unauthorized derivative works and reproduces, distributes, and publicly displays unauthorized copies of books in the form of the text accompanying the audiobooks. They argue that the text could act as a direct substitute for a book’s text in a physical book or e-book form and therefore competes with the publisher’s existing markets. The publishers state that “Audible’s admitted goal is to give users a reading experience, despite Audible only having the right to distribute audiobooks.”

Audible issued a statement in response to the lawsuit, stating that “We disagree with the claims that [the caption feature] violates any rights and look forward to working with publishers and members of the professional creative community to help them better understand the educational and accessibility benefits of this innovation.” According to the statement, the caption function was developed “to help kids who are not reading engage more through listening” and to address “the risk of losing a significant portion of the next generation of book readers.”

We encourage members of Authors Alliance to contact us at info@authorsalliance.org to share your views on the proposed Audible caption feature and this litigation.

New Accessibility Resource: The Law and Accessible Texts: Reconciling Civil Rights and Copyrights

Posted July 30, 2019
black and white photo of a person's finger reading Braille
photo by Eddau | CC0

The Association of Research Libraries (ARL) and the University of Virginia Library recently released The Law and Accessible Texts: Reconciling Civil Rights and Copyrights, a white paper by Brandon Butler of the University of Virginia and Prue Adler and Krista Cox of ARL. The paper provides an overview of relevant caselaw, policy, and best practices.

As the Introduction states, “[t]he report begins with a brief description of the current state of civil rights laws favoring accessibility, including trends in enforcement in recent years. Section II provides an account of why and how copyright concerns have served as stumbling blocks for disability service offices (DSOs). Section III walks through each step in a remediation workflow and provides some key legal ramifications for how that step may proceed. Section IV explores more deeply the key provisions in copyright law favoring the creation and sharing of accessible texts; this section will be of most interest to university counsel’s offices and other legal experts. Finally, Section V surveys some legal and policy considerations beyond copyright and civil rights that may be worth bearing in mind as institutions design their collaborations in areas where law gives them flexibility.”


Authors Alliance’s recent coverage of accessibility issues includes a collection of resources and background about the Marrakesh Treaty. For a deeper dive into the topic of accessibility, see also our previous resource roundup, released in the fall of 2018 in connection with our report on Authorship and Accessibility in the Digital Age.

Ruth Okediji on the Limits of International Copyright Exceptions for Developing Countries

Posted June 25, 2019
bridge with flags in Geneva
photo by hpgruesen on Pixabay

In a recent article in the Vanderbilt Journal of Entertainment & Technology Law (available on SSRN), Ruth Okediji of Harvard Law School offers a critical analysis of the design of the international copyright system as it relates to economic development in the Global South. In the article, Okediji proposes changes to the international copyright limitations and exceptions (“L&Es”) system based on those insights.

Okediji argues that while liberty-enhancing L&Es (such as those that facilitate civic and social engagement, or ensure freedom of expression) have enjoyed considerable acceptance in the international copyright system, new international L&Es are needed that strengthen the capacity of developing and least-developed countries to absorb and utilize knowledge inputs (what Okediji refers to as “development-inducing L&Es”). In particular, Okediji argues that efforts to formulate a coherent L&E standard for education, particularly for online educational activities, could be an important step in providing the legal framework necessary to facilitate access to knowledge. She also argues that mandatory L&Es for libraries, archives, and other educational and cultural institutions are essential to facilitate both liberty-enhancing and development-inducing goals.

As Okediji writes:

“The prospects for developing and least-developed countries to benefit from global research and development (R&D) spillovers, to participate in international scientific collaborations, and to reduce the innovation divide are brighter than at any other time in history. Turning these prospects into realizable gains, in part, requires addressing barriers to knowledge acquisition and facilitating the diffusion of knowledge across borders. International copyright law is not the only hurdle to these goals, but it is an important one. Efforts by various stakeholders to address the global knowledge and innovation gap would benefit from renewed attention to the international copyright framework and, especially, a redesign of international copyright L&Es.”

While Okediji considers the L&Es agenda at WIPO to be a crucial part of the longstanding attempts to align copyright law with broader welfare concerns, she emphasizes that the reform that is necessary for copyright to accomplish the encouragement of learning and development in developing countries must be also advanced at national and regional levels.

The full text of Professor Okediji’s article can be viewed and downloaded here.

Authors Alliance has recently participated in conversations about international limitations and exceptions to copyright. Last November, Authors Alliance presented a statement to the World Intellectual Property (WIPO) Standing Committee on Copyright and Related Rights explaining how limitations and exceptions for education can benefit authors, without undermining fundamental purposes of copyright policy, and can encourage the diffusion of knowledge.

“A More Balanced Approach to Copyright Reform”: Michael Geist On the Statutory Review of the Canadian Copyright Act

Posted June 12, 2019
photo by 1966666 on Pixabay

In December 2018, Authors Alliance submitted a brief to the Canadian Committee on Industry, Science and Technology in response to a request for public comment. The committee was tasked by Parliament with reviewing Canada’s copyright statutes and issuing a report with recommendations for action and further consideration. Our brief urged the retention of reversionary rights in Canada’s Copyright Act and recommended amendments to the provision to enhance the utility of reversionary rights.

Earlier this month, the Committee on Industry, Science and Technology released its Statutory Review of the Copyright Act. Our brief was cited in the report, and we were pleased to see that the report includes recommendations to expand fair dealing and reversionary rights, which benefit creators who wish to make fair use or to regain rights to their previously published works.

Professor Michael Geist of the University of Ottawa prepared an analysis of the report’s recommendation on fair dealing in a post on his blog (made available under a Creative Commons license), which we have re-posted below. For a deeper dive into the future of the Canadian Copyright Act, we recommend Geist’s summary of the full report.


Fixing Fair Dealing for the Digital Age: What Lies Behind the Copyright Review’s Most Important Recommendation

The long-awaited Canadian copyright review report features numerous good recommendations, many of which were rejections of industry lobbying: a rejection of new restrictions on fair dealing for education, rejection of Bell’s FairPlay site blocking initiative, and rejection of limits on safe harbours in response to the so-called “value gap.” Yet the most notable recommendation is the committee’s support for fair dealing for the digital age by expanding its scope and ensuring that it applies equally in the analog and digital worlds.

I wrote about the need to fix fair dealing for the digital age in May 2018:

there is a need to fix fair dealing by ensuring that it is not hamstrung in the digital environment. The Canadian test for fairness is consistent with those found in other countries, but there are barriers that exist for fair dealing in the digital world that are not found in the analog one. The most obvious example are Canada’s digital lock rules, which exceed the requirements at international law in the WIPO Internet treaties. As many warned five years ago, Canada has created a system that allows for unnecessarily restrictive limits on digital fair dealing. There is a need to fix this problem by establishing an exception within the anti-circumvention rules to allow for circumvention for any lawful purpose.Moreover, the fair dealing purposes should be expanded, ideally by adopting a “such as” approach to its list of enumerated purposes that would ensure the law remains relevant in the face of new innovation. Alternatively, given Canada’s prioritization of artificial intelligence, there is a need for a fair dealing exception for text and data mining similar to that found in many other countries.

The copyright review addresses all three issues. First, the committee recommended adding much needed flexibility by allowing circumvention for purposes otherwise permitted under the Copyright Act:

However, it agrees that the circumvention of TPMs should be allowed for non-infringing purposes, especially given the fact that the Nintendo case provided such a broad interpretation of TPMs. In other words, while anti-circumvention rules should support the use of TPMs to enable the remuneration of rights-holders and prevent copyright infringement, they should generally not prevent someone from committing an act otherwise authorized under the Act.

This change will help ensure that fair dealing rights are treated in an equivalent manner in both the analog and digital worlds.

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Copyright Law Has a Small Claims Problem. The CASE Act Won’t Solve It

Posted June 4, 2019
Photo of Kerry Maeve Sheehan
Kerry Maeve Sheehan

We are grateful to Authors Alliance’s Copyright Research Assistant Kerry Maeve Sheehan for this analysis of the 2019 CASE Act.

The Copyright Alternative in Small Claims Enforcement Act (CASE Act) is back in Congress, and it still has serious problems.

On May 1st, Rep. Doug Collins (R-GA) and Rep. Hakeem Jeffries (D-NY) introduced the latest version of the Copyright Alternative in Small Claims Enforcement Act (CASE Act). Like its predecessor bills in 2016 and 2017, the 2019 CASE Act would establish a copyright small claims tribunal within the United States Copyright Office with the authority to hear and decide some copyright infringement claims.

The bill has a laudable goal: reducing barriers to copyright enforcement for those with limited financial resources by providing a faster and cheaper avenue to remedies. For many independent authors, creators, and users of copyrighted content, copyright litigation in federal court is not worth the candle; the high cost of litigation keeps many independent authors and creators from enforcing their copyrights. A well-designed copyright small claims process could fix this but, unfortunately, the deeply flawed CASE Act isn’t that. While failing to limit the tribunal’s scope to the types of claims and claimants that it’s best suited to and allowing recovery of excessive damages, the small claims process as set out in the CASE Act would also cause harm to many legitimate users of copyrighted works, including authors, educators, and other creators.

The CASE Act’s small claims process isn’t limited to the problems a small claims court is well-positioned to address.

The CASE Act’s small claims tribunal isn’t limited to those independent authors and creators who need it most.

The copyright holders who most need, and would most benefit, from a small claims process are those independent authors and creators who can’t afford to press their claims in federal court. Unfortunately, instead of limiting the small claims process to those independent copyright holders that really need access to this kind of forum to enforce their copyrights, the CASE Act opens the door widely, welcoming in large corporations, corporate assignees, and entities that buy up others’ copyright claims and profit from litigation.

We’ve already seen how copyright trolls and big content companies have sometimes abused the federal court system to raise questionable infringement accusations and threaten those accused with high statutory damages. By not limiting enforcement through the small claims process to individual creators, the CASE Act makes it even easier for these entities to get quick default judgments and disproportionately high damages awards. Absent enough protections for accused infringers and reasonable limits on damages, the CASE Act would invite more abusive litigation tactics by copyright trolls and opportunistic claimants while cluttering up the docket with cases that should be resolved elsewhere.

The CASE Act’s small claims tribunal’s jurisdiction is far too broad.

Some areas of copyright law are just too complicated, fact specific, and unsettled to be decided by a small claims process. The CASE Act tribunal’s accelerated process and limited discovery mean that it’s really only equipped to handle simple, straightforward infringement claims in settled areas of law. But the CASE Act doesn’t draw the line there. Instead, the tribunal has expansive authority to hear all types of copyright infringement claims including those that involve highly complex issues and uncertain areas of law. These complicated cases belong in a federal court with the expertise and resources to more competently address all the factual and legal issues involved. Leaving these cases with the small claims tribunal hurts both those authors trying to enforce their copyrights and those trying to defend their rights to use copyrighted works, as the tribunal won’t be able to adequately resolve the issues involved.

While the CASE Act does include a provision allowing the tribunal to dismiss a claim or defense if the tribunal decides it’s not suitable, without a clear limitation on the tribunal’s jurisdiction, it’s hard to see how it would make consistent decisions to do so.

The CASE Act would create new opportunities for abusive litigation tactics.

The CASE Act’s “default judgment mill” favors sophisticated actors over independent authors and creators.

The CASE Act’s opt-out provision doesn’t provide independent authors (whether claimants or defendants) enough protection. Under the CASE Act, if someone accused of infringement fails to opt-out of the small claims process within 60 days of receiving notice of the claim, the small claims tribunal can enter a default judgment in favor of the claimant and award her damages. This judgment can then be enforced by the claimant in federal court. While this opt-out procedure is supposed to provide some protection for the accused, there’s a strong likelihood that authors, educators, and small creators without sophisticated legal knowledge or representation may not fully understand the implications and may ignore the notice – ending up on the hook for substantial damages awards without a meaningful opportunity to appeal. This quick and easy way to obtain default judgments is likely to create a “default judgment mill,” where big content companies and copyright trolls can churn out a mass of default judgments and high damages awards against unsophisticated individuals.

The CASE Act’s statutory damages framework invites abuse.

There may be a role for a reasonably statutory small framework in a small claims tribunal when damages from infringement are difficult or impossible to prove. However, while substantially lower than the statutory damages available in federal court, the CASE Act’s statutory damages are still excessively high and are available in all cases. Under the CASE Act, claimants who timely registered their works can request up to $15,000 per work infringed, with a total limit of $30,000 per proceeding. Those who failed to timely register their works can request up to $7,500 per work infringed, with a limit of $15,000 per proceeding. As copyright law experts have pointed out, in federal court, the availability of excessive statutory damages has made it easy for unscrupulous plaintiffs to intimidate and extract settlements from individuals accused of infringement. Faced with the risk of a high statutory award, many defendants opt to settle, even when they have a valid defense. And without standards to guide those awards, copyright litigation is an unpredictable venture. With lower barriers for plaintiffs and a disproportionate statutory damages framework, the CASE Act could make these problems even worse.

As concerned scholars have noted, The CASE Act’s statutory damages framework won’t just harm defendants, though. It will also create an incentive for sophisticated or well-resourced defendants to strategically opt out of the small claims process when they think the claimant won’t be able to pursue her claim in federal court. This would undermine the CASE Act’s core objective, returning independent authors and creators to today’s unsatisfactory status quo.

Would the CASE Act tribunal be a fair one?

The CASE Act’s limitations on appeal make it unduly difficult for parties to get meaningful independent review of tribunal decisions.

Independent judicial review is essential to ensuring that any tribunal operates fairly and arrives at the correct result. The CASE Act, however, narrowly restricts the ability of either party to seek review of the tribunal’s decisions in federal court. Under the CASE Act, parties can ask the tribunal to reconsider a determination, and, with an additional fee, parties can ask the Register to review the tribunal’s refusal to reconsider on abuse of discretion grounds. Independent review by a court is only available in on the grounds of “fraud, corruption, misrepresentation, or other misconduct,” or if the tribunal exceeded its authority or failed to render a final decision. Default judgments are only reviewable on grounds of excusable neglect. By restricting the grounds for appeal, the CASE Act would leave erroneous tribunal decisions essentially unreviewable and unjustly wronged parties with no where to turn for relief.

The Copyright Office probably isn’t the right place for a copyright small claims court.

A tribunal within the copyright office, designed to serve copyright claimants, and with officers selected and recommended by the Register of Copyrights may end up friendlier towards copyright claimants, and less receptive to arguments that a contested use is legitimate or qualifies as fair use. In concert with the limitations on appeal of tribunal decisions, this could create a forum inclined to issue more favorable judgments for big content companies and other copyright claimants, and in the process, harm those authors, educators, and creators defending their right to use copyrighted works.

Authors Alliance founder and law professor Pamela Samuelson points out that placing the tribunal within the Copyright Office could also run afoul of the United States Constitution. The United States Supreme Court has repeatedly stated that infringement claims belong in the federal courts. Placing some copyright infringement claims in an administrative forum may be unconstitutional under Supreme Court precedent.      

Authors Deserve Better Than the CASE Act.

Independent authors and creators should have access to a low cost way to enforce their copyrights and vindicate their right to use others’ copyrighted works. We support a fair, unbiased small claims process that doesn’t invite abuse and wreak havoc on copyright law. If Congress is serious about fixing Copyright’s small claims problem, it needs to do better than the CASE Act. It can start by listening to the numerous educators, scholars, librarians, technologists, lawyers, and public interest policy experts who’ve all pointed out the Act’s problems. If you want to learn more about the CASE Act, check out this paper by Authors Alliance founder Pamela Samuelson and Kathy Hashimoto, and this one by law professor Ben Depoorter.

Jason Mazzone on Copyfraud and the Lawsuit Against Getty Images

Posted May 23, 2019
Headshot of Jason Mazzone

We thank Jason Mazzone, the Albert E. Jenner, Jr. Professor of Law at the University of Illinois at Urbana-Champaign, for contributing this guest post.

Copyfraud—false claims of copyright in public domain works—is a persistent problem. False copyright notices appear on modern reprints of Shakespeare’s plays, Beethoven’s piano scores, greeting card versions of Monet’s Water Lilies, and even the U.S. Constitution. Archives claim blanket copyright in everything in their collections. Vendors of microfilmed versions of historical newspapers assert copyright ownership.

These false copyright claims, which are often accompanied by threatened litigation for reproducing a work without the “owner’s” permission, result in users seeking licenses and paying fees to reproduce works that are free for everyone to use. Copyfraud also interferes with lawful distribution of public domain works.

Increasingly, computer bots are responsible. When Scribd users posted the recent Mueller report—a federal government document that cannot be copyrighted by anyone—the website’s filters flagged the report as copyrighted and took it down.   

There are few available remedies for copyfraud. The Copyright Act provides for no civil penalty for falsely claiming ownership of public domain materials. There is also no remedy under the Copyright Act for individuals who wrongly refrain from legal copying or who make payment for permission to copy something they are in fact entitled to use for free. While falsely claiming copyright is technically a criminal offense under the Copyright Act, prosecutions are extremely rare.

A class action lawsuit filed in federal court in Washington now targets Getty Images for selling licenses to images that are in the public domain. The lawsuit alleges that Getty falsely asserts copyrights in public domain images and misleads consumers into believing they must purchase a license from Getty before making use of the images—and that Getty threatens legal action against unauthorized uses of the images it makes available in its database. The lawsuit against Getty asserts claims based on wire fraud under the federal RICO statute and violations of state consumer protection law.

This is new territory and at this early stage of the case it is difficult to assess the likelihood the lawsuit will succeed. Getty is likely to assert that it simply collects images and makes them conveniently available in high-resolution versions and in so doing it does not violate any law. At a minimum, in order to demonstrate fraud, the plaintiffs will need to demonstrate that Getty intentionally misled them into believing it owned copyrights in images and that as a result the plaintiffs paid out an unnecessary copyright licensing fee. Even so, the court might find that there is no legal remedy because Congress did not provide for one in the Copyright Act itself. 

I first wrote about copyfraud more than a decade ago in an article published in the NYU Law Review and then in a book, Copyfraud And Other Abuses of Intellectual Property Law (Stanford University Press, 2011). Since then, awareness of the problem has grown. Remedying copyfraud, however, remains a challenge. The lawsuit against Getty might help clarify when existing law provides tools for protecting the public domain. More likely, however, is that the outcome of the case will shed further light on the need for comprehensive reform if copyright is to be kept within its proper limits.  


Accessibility Resource Roundup

Posted April 23, 2019
Colorful neon sign of a cowboy on a rearing horse
photo by Jakob Owens on Unsplash

April 23 is World Book and Copyright Day, an annual event organized by UNESCO to promote reading, publishing, and copyright around the world. In that spirit, we’ve compiled this list of resources on the topic of accessibility.

Earlier this month, the WIPO Standing Committee on Copyright and Related Rights (SCCR) held its 38th Session in Geneva. (Although we didn’t attend this session, Authors Alliance has traveled to previous sessions of the SCCR to advocate for reasonable limitations and exceptions to copyright for educational and research purposes.)

One item under consideration at the most recent meeting was the Revised Scoping Study on Access to Copyright Protected Works by Persons with Disabilities. The report, prepared by Professors Caroline Ncube of the University of Cape Town and Blake Reid of the University of Colorado, was based on this 2017 WIPO fact-finding study. It defines various categories of disabilities in order to better identify which formats qualify as accessible for different types of users and analyzes the copyright laws of the 191 WIPO member states in the context of copyright exceptions for persons with disabilities.

In addition to co-authoring the WIPO/SCCR report, Professor Reid also has a new article on Internet Architecture and Disability (forthcoming in the Indiana Law Journal). As the abstract states, “[t]he prevailing doctrinal approach to Internet accessibility seeks to treat websites as metaphorical ‘places’ subject to Title III of the ADA, which requires places of public accommodations to be accessible to people with disabilities. While this place-centric approach to Title III has succeeded to a significant degree in making websites accessible over the last two decades, large swaths of the Internet—more broadly construed to include Internet technologies beyond websites—remain inaccessible to millions of people with a variety of disabilities.”

Also available in pre-print format is the Book Industry Study Group (BISG) Guide to Accessible Publishing (currently in draft for public pre-publication review). This major reference work is a newly updated and greatly expanded edition of the previous 2016 version and contains a comprehensive guide to creating accessible content, a glossary, and a series of “cheat sheets” that break down topics into user-friendly summaries. As the Introduction states, “Maybe someday we’ll be able to stop describing publications as ‘accessible,’ because it will be taken for granted. It’s hoped that this Guide helps us get there.”

Last but by no means least, the International Federation of Library Associations and Institutions (IFLA) has released “Getting Started With the Marrakesh Treaty: A Guide for Librarians.” As we’ve written previously, the treaty creates a set of mandatory limitations and exceptions for the benefit of blind, visually impaired, and otherwise print disabled readers. It requires that contracting states enact copyright exceptions that allow books and other creative works to be made available in accessible formats, such as braille and audiobooks, and to allow for the import and export of such materials. Now that over 50 countries around the world (including the United States) have acceded to the Marrakesh Treaty, the IFLA guide—available in five languages—provides hands-on guidance on international copyright issues to libraries to facilitate availability of materials according to the requirements of the treaty.

For further reading on the topic of accessibility, see also our previous resource roundup, released in the fall of 2018 in connection with our report on Authorship and Accessibility in the Digital Age.

Fair Use, Innovation, and Controlled Digital Lending

Posted March 5, 2019

We’d like to thank co-authors Kyle K. Courtney and David R. Hansen for permission to re-post the following article, which originally appeared on the Copyright at Harvard Library blog on March 1, 2019.


One of the beautiful things about fair use is how it can soften the copyright act, which is in many ways highly structured and rigid, to provide flexibility for new, innovative technology.

To understand how, it’s worth appreciating the structure of the Copyright Act. If you look at the table of contents of Chapter 1 of the Act (“Subject Matter and Scope of Copyright”), you see the first several sections define basic terms such as copyrightable subject matter. Included in that first half of the chapter is Section 106, which defines the exclusive rights held by rights holders: the right to control copying, the creation of derivative works, public distribution, public performance, and display.  In the bottom half of the Act, Sections 108 to 122 provide for a wide variety of limitations and exceptions to those owners’ exclusive rights. These exceptions are largely for the benefit of users and the public, including specific exceptions to help libraries, teachers, blind and print-disabled users, non-commercial broadcast TV stations, and so on.

Then, there’s fair use. As if perfectly positioned to balance between the broad set of rights granted to owners and the specific limitations for the benefit of users and the public, “fair use” is codified in Section 107, though it really isn’t a creature of statute. Fair use is a doctrine, developed by courts as an  “equitable rule of reason” that requires courts to “avoid rigid application of the Copyright Statute when on occasion it would stifle the very creativity which that law was designed to foster.” In that role, fair use has facilitated all sorts of technological innovations that Congress never could have anticipated, allowing copyrighted works and new technology to work together in harmony.

One particularly innovative system developed to enhance access to works is “controlled digital lending” (“CDL”):

CDL enables a library to circulate a digitized title in place of a physical one in a controlled manner. Under this approach, a library may only loan simultaneously the number of copies that it has legitimately acquired, usually through purchase or donation….[I]t could only circulate the same number of copies that it owned before digitization. Essentially, CDL must maintain an “owned to loaned” ratio. Circulation in any format is controlled so that only one user can use any given copy at a time, for a limited time. Further, CDL systems generally employ appropriate technical measures to prevent users from retaining a permanent copy or distributing additional copies.

While the courts have yet to weigh in directly on the CDL concept, we now have some guidance from a case in the Second Circuit Court of Appeals, Capitol Records, LLC v. ReDigi Inc. This case is about the development of an online marketplace created by ReDigi, which facilitated the sale of “used” mp3 music files. Capitol Records sued ReDigi, alleging that ReDigi infringed its exclusive rights to reproduction and distribution when it attempted to use a particular transfer method to sell the used mp3s.

The Court of Appeals upheld a lower court ruling that the doctrine of first sale is only an exception to the public distribution right and, therefore, does not protect digital lending because, in that process, new copies of a work are always made.

The court also rejected ReDigi’s fair use assertion. It found that the use was commercial in nature, was considered non-transformative, and replicated works exactly and precisely; simply put, they created mirror image copies of existing digital files.  Further, though the libraries associations in their briefs had raised the issue of a nexus of connection between fair use and specific copyright exceptions, such as Section 109 and 108, as an extension of Congressional policy that should influence the fair use analysis, the court did not discuss that argument.

That the court ruled ReDigi, a commercial enterprise, had interfered with the market for iTunes-licensed mp3s and their effort was not a transformative fair use, comes as no surprise to most lawyers and copyright scholars.

However, the decision, written by the creator of the modern transformative fair use doctrine, Judge Pierre Laval, contains several important lessons for CDL.

Transformative Use

First, the case raises a significant question as to whether CDL of digitized books may be “transformative” in nature. In the decision, examining the first factor, Judge Leval explains that a use can be transformative when it “utilizes technology to achieve the transformative purpose of improving delivery of content without unreasonably encroaching on the commercial entitlements of the rights holder.” For physical books, especially those that are difficult to obtain, this application of “transformative use” has a direct correlation to the core application of CDL.

Further, this quote interprets another critical technology and fair use case from the U.S. Supreme Court, Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), famously called the “Betamax case.” Since its decision in 1984, the Sony ruling helped establish and foster the creation of new and vital technology, from personal computers and iPods to sampling machines and TiVo. This Sony quote was most recently used in another Second Circuit case, Fox News Network, LLC v. TVEyes, where the same court laid out this particular reading of Sony. So, ReDigi here is drawing upon the precedent of two important transformative fair use cases to make its point. Under this transformative use definition, CDL should be determined to be transformative by the courts, especially if the commercial rights of the rights holder are not unreasonably encroached.

Therefore, while the court found ReDigi’s use to not be transformative, the Second Circuit opened the door for continued technological development, especially for non-commercial transformative uses under the first factor, like CDL. In fact, according to several scholars (Michelle Wu, Kevin Smith, Aaron Perzanowski), this creates a much stronger argument that CDL would be ruled a transformative fair use by a court.

Market Harm

The Second Circuit held that the ReDigi system caused market harm under the fourth factor of the fair use statute. Again, this is not a surprise to the copyright world. The court found that the service provider had no actual control of the objects being sold and that it “made reproductions of Plaintiffs’ works for the purpose of resale in competition with the Plaintiffs’ market for the sale of their sound recordings.”

What does this mean for CDL’s analysis under the fourth factor? Here, again, based on the language of the ReDigi decision, CDL looks pretty different. The ReDigi resales were exact, bit-for-bit replicas of the original sold in direct competition with “new” mp3s online through other marketplaces, such as iTunes. The substitutionary effect was clear, especially since the mp3 format is the operative market experiencing harm. For digitized copies of print books used for CDL, the substitutionary effect is far less clear. With most 20th-century books—the books that we feel are the best candidates for CDL—the market to date has been exclusively print. For those books, some new evidence from the Google Books digitization project suggests that digitization may in fact act as a complementary good, allowing digital discovery to encourage new interest in long-neglected works.

CDL doesn’t compete with a recognized market. When a library legally acquires an item, it has the right, under the first sale doctrine, to continue to use that work unimpeded by any further permission or fees of the copyright holder. CDL’s digitized copy replaces the legitimately acquired copy, not an unpurchased copy in the marketplace. To the extent there is a “market harm,” it’s one that is already built into the transaction and built into copyright law: libraries are already legally permitted to circulate and loan their materials. The CDL “own-to-loan ratio” ensures that the market harm for the digital is the exact same as circulating the original item.

Again, the language of the ReDigi court should be examined closely. The court distinguishes substitutionary markets from those that are complementary and natural extensions of the use inherent with purchasing the original: “to the extent a reproduction was made solely for cloud storage of the user’s music on ReDigi’s server, and not to facilitate resale, the reproduction would likely be fair use just as the copying at issue in Sony was fair use.” Reading this language through the lens of CDL, a modern reproduction service, such as CDL, that further enhances the owner’s use of materials that were purchased under first sale or owned under other authorized means would also qualify as a fair use.

All in all, the ReDigi case most certainly does not settle the CDL issue; if anything, the specific language of the court emphasizes the potential for more non-commercial transformative uses like CDL.


David Hansen is the Associate University Librarian for Research, Collections & Scholarly Communications at Duke University Libraries. Before coming to Duke he was a Clinical Assistant Professor and Faculty Research Librarian at UNC School of Law. And before that, he was a fellow at UC Berkeley Law in its Digital Library Copyright Project.

Kyle K. Courtney is Copyright Advisor and Program Manager at Harvard Library’s Office for Scholarly Communication (OSC). Before joining the OSC, Kyle managed the Faculty Research And Scholarly Support Services department at Harvard Law School Library.

Supreme Court Resolves Circuit Split on Copyright Registration

Posted March 4, 2019
photo of the Supreme Court building
photo by MarkThomas | Pixabay License

Today, the U.S. Supreme Court resolved the question of what the Copyright Act means when it says that a work must be registered prior to filing an infringement lawsuit, holding that the Register of Copyrights must act on the application for registration before a copyright owner can file an infringement action.

Under the Copyright Act, an infringement action cannot be brought until “registration of the copyright claim has been made” (or, alternatively, registration of the claim has been refused by the Copyright Office). As we wrote in an earlier post on this case, the essential question presented in Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC was whether a copyright owner may commence an infringement suit after delivering the proper deposit, application, and fee to the Copyright Office, but before the Register of Copyrights has acted on the application for registration.

In the Fourth Estate case, the Eleventh Circuit explained that in its view “[t]he Copyright Act defines registration as a process that requires action by both the copyright owner and the Copyright Office.” The Supreme Court affirmed this approach, concluding that “registration… has been made” not when an application for registration is filed, but when the Register has registered a copyright after examining a properly filed application.

The ability to bring an infringement lawsuit is just one of the benefits of registration. For more information about registration, read our articles on the benefits of registration, how to register your works with the U.S. Copyright Office, and when to update or supplement a registration.