As the CopyKat reported earlier this week, the technology sectors are continuing their assault on planned reforms to EU Copyright law, and now the Electronic Frontiers Foundation has joined the likes of Google, YouTube and Facebook in criticising the planned copyright law reforms. In a letter the EFF say has been sent to everyone involved in the upcoming "Trilogues", the meetings held between representatives from European national governments, the European Commission, and the European Parliament, Cory Doctorow argues that the reforms contained in Articles 11 and 13 of the Copyright Directive are "ill considered and have no place in the Directive", concluding that instead of effecting some "piecemeal fixes to the most glaring problems", the Trilogue takes a simpler approach, and removes them from the Directive altogether.
Having previously opined that the vote in the European Parliament that passed the draft Directive "brought the EU much closer to a system of universal mass censorship and surveillance, in the name of defending copyright" and that Articles 13 and 11 would create "upload filters" and the “link tax”, the EFF's views are perhaps unsurprising - you can make of the points raised as you will, as the letter is set out in full is below:
The Electronic Frontier Foundation is the leading nonprofit organization defending civil liberties in the digital world. Founded in 1990, EFF champions user privacy, free expression, and innovation through impact litigation, policy analysis, grassroots activism, and technology development. We work to ensure that rights and freedoms are enhanced and protected as our use of technology grows. We are supported by over 37,000 donating members around the world, including around three thousand within the European Union.
We believe that Articles 11 and 13 are ill-considered and should not be EU law, but even stipulating that systems like the ones contemplated by Articles 11 and 13 are desirable, the proposed text of the articles in both the Parliament and Council texts contain significant deficiencies that will subvert their stated purpose while endangering the fundamental human rights of Europeans to free expression, due process, and privacy.
It is our hope that the detailed enumeration of these flaws, below, will cause you to reconsider Articles 11 and 13's inclusion in the Directive altogether, but even in the unfortunate event that Articles 11 and 13 appear in the final language that is presented to the Plenary, we hope that you will take steps to mitigate these risks, which will substantially affect the transposition of the Directive in member states, and its resilience to challenges in the European courts .
Article 13: False copyright claims proliferate in the absence of clear evidentiary standards or consequences for inaccurate claims.
Based on EFF’s decades-long experience with notice-and-takedown regimes in the United States, and private copyright filters such as YouTube's ContentID, we know that the low evidentiary standards required for copyright complaints, coupled with the lack of consequences for false copyright claims, are a form of moral hazard that results in illegitimate acts of censorship from both knowing and inadvertent false copyright claims.
For example, rightsholders with access to YouTube's ContentID system systematically overclaim copyrights that they do not own. For instance, the workflow of news broadcasters will often include the automatic upload of each night's newscast to copyright filters without any human oversight, despite the fact that newscasts often include audiovisual materials whose copyrights do not belong to the broadcaster – public domain footage, material used under a limitation or exception to copyright, or material that is licensed from third parties. This carelessness has predictable consequences: others — including bona fide rightsholders — who are entitled to upload the materials claimed by the newscasters are blocked by YouTube and have a copyright strike recorded against them by the system, and can face removal of all of their materials. To pick one example, NASA's own Mars lander footage was broadcast by newscasters who carelessly claimed copyright on the video by dint of having included NASA's livestream in their newscasts which were then added to the ContentID database of copyrighted works. When NASA itself subsequently tried to upload its footage, YouTube blocked the upload and recorded a strike against NASA.
In other instances, rightsholders neglect the limitations and exceptions to copyright when seeking to remove content. For example, Universal Music Group insisted on removing a video uploaded by one of our clients, Stephanie Lenz, which featured incidental audio of a Prince song in the background. Even during the YouTube appeals process, UMG refused to acknowledge that Ms. Lenz’s incidental inclusion of the music was fair use – though this analysis was eventually confirmed by a US federal judge. Lenz's case took more than ten years to adjudicate, largely due to Universal's intransigence, and elements of the case still linger in the courts.
Finally, the low evidentiary standards for takedown and the lack of penalties for abuse have given rise to utterly predictable abuses. False copyright claims have been used to suppress whistleblower memos detailing flaws in election security, evidence of police brutality, and disputes over scientific publication.
Article 13 contemplates that platforms will create systems to allow for thousands of copyright claims at once, by all comers, without penalty for errors or false claims. This is a recipe for mischief and must be addressed.
Article 13 Recommendations
To limit abuse, Article 13 must, at a minimum, require strong proof of identity from those who seek to add works to an online service provider's database of claimed copyrighted works and make ongoing access to Article 13's liability regime contingent on maintaining a clean record regarding false copyright claims.
Rightsholders who wish to make copyright claims to online service providers should have to meet a high identification bar that establishes who they are and where they or their agent for service can be reached. This information should be available to people whose works are removed so that they can seek legal redress if they believe they have been wronged.
In the event that rightsholders repeatedly make false copyright claims, online service providers should be permitted to strike them off of their list of trusted claimants, such that these rightsholders must fall back to seeking court orders – with their higher evidentiary standard – to effect removal of materials.
This would require that online service providers be immunised from Article 13's liability regime for claims from struck off claimants. A rightsholder who abuses the system should not expect to be able to invoke it later to have their rights policed. This striking-off should pierce the veil of third parties deputised to effect takedowns on behalf of rightsholders ("rights enforcement companies"), with both the third party and the rightsholder on whose behalf they act being excluded from Article 13's privileges in the event that they are found to repeatedly abuse the system. Otherwise, bad actors ("copyright trolls") could hop from one rights enforcement company to another, using them as shields for repeated acts of bad-faith censorship.
Online service providers should be able to pre-emptively strike off a rightsholder who has been found to be abusive of Article 13 by another provider.
Statistics about Article 13 takedowns should be a matter of public record: who claimed which copyrights, who was found to have falsely claimed copyright, and how many times each copyright claim was used to remove a work.
Article 11: Links are not defined with sufficient granularity, and should contain harmonised limitations and exceptions.
The existing Article 11 language does not define when quotation amounts to a use that must be licensed, though proponents have argued that quoting more than a single word requires a license.
The final text must resolve that ambiguity by carving out a clear safe-harbor for users, and ensure that there’s a consistent set of Europe-wide exceptions and limitations to news media’s new pseudo-copyright that ensure they don’t overreach with their power.
Additionally, the text should safeguard against dominant players (Google, Facebook, the news giants) creating licensing agreements that exclude everyone else.
News sites should be permitted to opt out of requiring a license for inbound links (so that other services could confidently link to them without fear of being sued), but these opt-outs must be all-or-nothing, applying to all services, so that the law doesn’t add to Google or Facebook's market power by allowing them to negotiate an exclusive exemption from the link tax, while smaller competitors are saddled with license fees.
As part of the current negotiations, the text must be clarified to establish a clear definition of "noncommercial, personal linking," clarifying whether making links in a personal capacity from a for-profit blogging or social media platform requires a license, and establishing that (for example) a personal blog with ads or affiliate links to recoup hosting costs is "noncommercial."
In closing, we would like to reiterate that the flaws enumerated above are merely those elements of Articles 11 and 13 that are incoherent or not fit for purpose. At root, however, Articles 11 and 13 are bad ideas that have no place in the Directive. Instead of effecting some piecemeal fixes to the most glaring problems in these Articles, the Trilogue take a simpler approach, and cut them from the Directive altogether.
Thank you,
Cory Doctorow
Special Consultant to the Electronic Frontier Foundation
https://www.eff.org/deeplinks/2018/10/whats-next-europes-internet-censorship-plan-0
Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market COM(2016)593
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016PC0593
http://the1709blog.blogspot.com/2018/06/whats-all-fuss-about-eu-copyright.html
Community Health Systems fails Microsoft check-up on licensing
Technology giant Microsoft has filed a suit against Community Health Systems for “willfully infringing Microsoft’s copyrights through unlicensed use of Microsoft’s software,” according to a lawsuit filed last month. Microsoft also alleges Community Health Systems is guilty of willful breach of its contractual obligations, and implied covenant of good faith and fair dealing.
Community Health Systems is a Fortune 500 private company based in Tennessee, USA. CHS is the largest provider of general hospital services in the United States in terms of number of acute care facilities. According to its website, CHS’s affiliates own, operate or lease 126 hospitals in 20 states with approximately 21,000 beds.
Microsoft and CHS have a number of licensing agreements for its software, which prohibit CHS from distributing, sublicensing, renting, leasing, lending or hosting any Microsoft software. The products in question include Microsoft’s Windows, Office, SQL Server and Datacenter.
According to the 2013 Business & Services Agreement (MBSA) signed between the parties, Microsoft has “the right to verify compliance with the license terms” through an independent auditor, Deloitte. In late 2016, Microsoft notified CHS that it was exercising its contractual rights to verify licensing and contract compliance.
Around this time, CHS was in the process of selling off (divesting) various hospitals to new management. As reported by the Nashville Business Journal, CHS has sold more than 30 hospitals in the past 15 months, and plans to sell more this year. CHS is alleged to have sweetened the divestment deals by providing its buyers access to Microsoft Corp. software. The lawsuit states that “despite having no right to do so, CHS intentionally facilitated the continued use of Microsoft software by these divested entities.”
CHS has apparently missed numerous mutually agreed upon deadlines, and has failed to provide complete data to Microsoft. Microsoft insists that this demonstrates CHS’s “unwillingness to comply with its contractual obligation and/or with the independent verification process.” Microsoft’s lawyers charge CHS with being “largely not responsive to, if not obstructionist of” the Deloitte audits.
For reference the complaint, Case 3:18-cv-00291, was filed March 15th in the U.S. District Court for the Middle District of Tennessee, and made public several days ago in early April. According to the Docket, Microsoft’s legal team has been granted a case management conference in early June. CHS has until May 7 to respond to the complaint.
"Grande" victory on vicarious liability in RIAA piracy case
The Recording Industry Association of America’s legal battle against Texan internet service provider Grande Communications has been given the green light proceed to trial, although with the vicarious copyright infringement claim removed.
Pursuant to the Judge’s recent order, the matter continues on the contributory copyright infringement claim alone. This move is considered by Torrent Freak to be a partial defeat for the RIAA’s piracy lawsuit, as the vicarious copyright claim against Grande Communications has been dismissed.
By way of background, several major record labels including Universal Music, Capitol Records, Warner Bros and Sony Music - represented together by the RIAA - brought action against Grande Communications for the copyright infringements of its customers. The original complaint, Case 1:17-cv-00365, was filed in April 2017 in the Austin Division of Western Texas District Court.
Grande denied these accusations, and filed a motion to dismiss the case. In respect of the vicarious liability aspect, vicarious liability is established when the third party (the ISP) has the right and ability to control the actions of the direct infringer, and the third party derives a direct financial benefit from the infringement.
The RIAA claims Grande can be held liable for vicarious infringement, because the ISP has a “direct financial interest in keeping pirating subscribers on board.”
As detailed in the lawsuit, piracy tracking company Rightscorp has provided Grande with notice of specific infringers who are using Grande’s high-speed internet service to infringe various copyrighted works. Through this process, Grande has been put on notice and informed of more than one million infringements.
Grande admitted that while it received millions of takedown notices from Rightscorp, these notices based on flawed evidence and, as “mere allegations,” are not worthy of acting upon. In particular, the ISP explained that the notices of copyright infringement generated by piracy watchdog company Rightscorp are “so numerous and so lacking in specificity, that it is infeasible for Grande to devote the time and resources required to meaningfully investigate them.”
Contrary to the RIAA’s allegations, Grande asserted that it was not failing to remove infringers for profit reasons. Will the case turn on Rightscorp’s expertise, and the quality of its notices?
This case has considerable similarities to the legal battle between BMG Rights Management and internet service provider Cox Communications, in which a Virginia federal jury ruled that Cox was responsible for the copyright infringements of its subscribers. The Court of Appeals for the Fourth Circuit later threw out the $25 million piracy liability verdict.
EU-ser Created Content: draft Copyright Directive fails to hit the right note with artists
About 18 months ago, the European Commission announced its proposal for a Directive on Copyright in the Digital Single Market, currently in draft stages Industry groups are keen to ensure their opinions are taken into consideration, especially in instances where consumers share content which belongs to artists, authors, record labels, and television channels. On 12 April, various trade groups representing Europe’s creators and creative content producers published an open Letter to the European Council about the proposed Directive.
While the Letter’s authors support the primary objectives of the proposed legislation, they suggest that, far from ensuring legal certainty, the directive as currently drafted “could be detrimental to our sectors,” which include journalism, film and TV, music, and sport.
In particular, the problems seem to arise with sections addressing the “use of protected content” by ISPs and other platforms which “store and give access to large amounts of works and other subject-matter uploaded by their users”.
The E-commerce Directive states that EU Member States shall ensure that internet service providers are not liable for copyright infringements carried out by its customers, on condition that: (a) the ISP does not have actual knowledge of illegal activity or information; and (b) the provider “acts expeditiously to remove or to disable access” to the illegal content, once they become aware of it (see Article 14 of the E-commerce Directive). This article provides certain entities with a “safe harbour” from copyright liability.
Accordingly, many User Uploaded Content (UUC) platforms, like YouTube, argue that they are not responsible for any copyright infringing material uploaded by their users. This principle originates from the e-commerce directive and holds that platforms are not liable for their users’ infringement, provided that they enforce takedown procedures initiated by copyright owners. The copyright industries – such as those mentioned above – want the safe harbour reformed so that it no longer applies to user-upload sites (Complete Music Update).
This draws into question how online platforms hosting UUC should monitor user behaviour and filter their contributions, rather than by reviewing content after it has been published and reported or “flagged” as copyright infringement. This may, as has been discussed with Facebook’s proposed use of artificial intelligence in copyright and hate speech monitoring, “inevitably require an automated system of monitoring that could not distinguish copyright infringement from legal uses such as parody” (The Guardian).
The relevant sections of the draft Directive are Article 2, Article 13(1) and Article 13(4).
Article 2 defines which services fall under liability, mentioned further at Article 13. The latest draft could leave most UUC platforms outside the scope, despite the fact they continue to provide access to copyright protected works and other subject-matter (for example, music playing in the background of a makeup tutorial on YouTube).
The problem with Article 13(1) as currently written is that it risks narrowing the scope of the right and contravening CJEU jurisprudence. The letter’s authors argue that “any new EU law should secure that this right is broad,” and “contain no additional criteria which could change via future CJEU rulings.”
As for Article 13(4) and its relevant recitals, the authors suggest the language is tantamount to a new safe harbour, which would both “seriously undermine fundamental principles of European copyright,” and pose “unwarranted liability privilege risks breaching the EU’s obligations under international copyright treaties.”
The Letter closes with the authors’ promise to “remain at the Council’s disposal to find solutions to these points.” For more information on the proposed Directive, be sure to check out the IPKat’s numerous posts on the subject.
House Judiciary Committee goes for a modern remix of US Copyright Law
Copyright legislation is getting an update on the other side of the Pond, too. The United States House Judiciary Committee voted unanimously today (32-0) to approve House Bill 4706, “to provide clarity and modernize the licensing system for musical works under section 115 and to ensure fairness in the establishment of certain rates and fees.” More commonly known as the Music Modernization Act, the bill now heads for consideration by the full House of Representatives. The act has received wide bipartisan support from Democrats and Republicans alike, and appears to be “on the fast track” for approval.
Speaking to ABC news, John Simson noted that Americans “...have a 1909 statue trying to govern 2018 technology, and it doesn't work.” Mr Simson is a professor at the American University and founding member of Sound Exchange, a non-profit organisation set up to collect and distribute performance royalties.
Title I (the first section) of the bill seeks to address how modern digital music services operate, by creating a blanket licensing system to quickly license and pay for musical work copyrights. Another key aim includes discouraging litigation in favor of simply ensuring that artists and copyright owners are paid in the first place without such litigation.
Title II, entitled “Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society (CLASSICS) Act” will focus on public performance rights for pre-1972 recordings. In particular, musicians with pre-1972 recordings will receive royalty payments when their tracks are played on the radio, with royalties then allocated for recordings played on the Internet, cable, and satellite radio.
Title III, the “Allocation for Music Producers (AMP) Act,” will ensure that record producers, sound engineers, and other creative professionals receive compensation for their work.
The Music Modernization Act will also create an American agency or “mechanical licensing collective,” that would house all music publishers under one roof. The digital streaming services will therefore pay the agency, which tracks and collects royalties on behalf of the artists.
IP Subcommittee Vice Chairman Collins noted that “the current music licensing landscape undervalues music creators and under-serves music consumers. Outdated copyright laws have produced unnecessary liabilities and inefficiencies within the music licensing system, and stakeholders across the music industry have called for reform. [...] This bill moves the music industry towards a freer and a fairer market, enabling it to leverage the present and future benefits of the digital age.”
More statements from Judiciary Committee leaders on the their passage of the Music Modernization Act can be found on the committee website.
Spotify turns up the volume on licensing technology
On the topic of licensing, the day after the Music Modernization Act was approved by the Judiciary Committee (see above) Spotify announced plans to buy Loudr.fm, a San Francisco-based company which provides licensing technology. The deal has been described by Reuters as the acquisition of a “cover song licensing firm to tackle copyright risks.”
As a company which offers “Big Data for Music Rights,” Loudr’s platform obtains mechanical licenses to distribute recordings as digital downloads, ringtones, CDs or vinyl records. Publishers are able to “digitalize their collection process and gain more insight into the rights they control,” and businesses are able to “discover and automate publisher payments for music content at scale.”
Spotify’s purchase of Loudr comes only months after being hit with a lawsuit seeking damages of up to $1.6 billion (£1.1 billion) by Wixen Publishing, the California-based company that represents Tom Petty, Neil Young, Rage Against the Machine, Missy Elliott and others. The Wixen lawsuit, like others, demonstrates the difficulty Spotify faces in tracking down the right publishers connected to songs, and ensuring the correct royalties finds its way to the appropriate rightsholders.
In its New York Stock Exchange listing document, Spotify disclosed that licensing and royalty payment problems are a key threat to its business model. To make its 35 million tracks available for listeners, Spotify requires licenses from the musicians and record labels who own the songs. Additionally, Spotify has a complex royalty payment scheme, and it is difficult to estimate the amount payable to musicians under their license agreements. Even if Spotify secures the necessary rights to sound recordings from record labels and other copyright owners, artists may wish to discontinue licensing rights, hold back content, or increase their royalty fees.
In a press release dated 12 April, Spotify explained the Loudr team of publishing specialists and technologists will join Spotify’s New York offices. “Loudr will contribute to Spotify’s continued efforts towards a more transparent and efficient music publishing industry for songwriters and rights holders.”
This update by Kelsey Farish
Two influential committees in the European Parliament have now voted on their respective responses to the draft European Copyright Directive, and in particular the position the EU will take on 'safe harbour' in the future, and the music industry has generally welcomed those responses. The Consumer Rights Committee had already responded, and now both the Culture (Committee on Culture and Education - CULT) and Industry (Industry, Research and Energy - ITRE) Committees have now had their say, and with regard to safe harbour, both committees resisted calls to abandon or weaken article thirteen, instead seeking to reinforce and further clarify the draft article and the new obligations of safe harbour dwelling services of the YouTube variety. They also responded to a proposal, put forward by the Consumer Rights Committee, which would provide an exception for user-generated content - and which many in the music industry have now said could have a profound impact on the creative community with rights holders having to initiate expensive legal proceedings to establish the actual boundaries of such an exception". In relation to that proposal, yesterday's committees voted (a) against the idea entirely, or (b) to leave such matters to national law within the EU, rejecting the idea that European law-makers should make such an exception compulsory for member states. Helen Smith from the independent label's IMPALA organisation said: "It makes complete sense to narrow the value gap and the parliament has sent a strong message this morning. That's very good news - recalibrating the digital market in this way is necessary to stop creators, start-ups and citizens being dominated by abusive practices of big platforms who don't pay fair or play fair". The important Legal Committee will lead the final round of responding after the summer break. The EFF have a very different take on this.
Freelance photographer David Slater, who facilitated the now famous 'monkey selfie' taken by black macaque Naruto is now in a dire financial situation as the appellate proceedings regarding the now famous “monkey selfie” photos continue in the United States courts. Slater had to settle for watching a live stream of the proceedings from his United Kingdom home because he can’t afford the flight to the USA, and is also not able to pay for the lawyer representing him, according to The Guardian. In a slightly more surreal intervention, the Chepstow based photographer now says that PETA (People for the Ethical Treatment of Animals - the animal rights organisation) is representing the wrong monkey in court with Slater saying “They definitely have the wrong monkey, and I can guarantee that. My lawyers can confirm it too" adding “The American court system doesn’t seem to care about that, which is baffling.”
A new study carried out by PRS for Music and the Intellectual Property Office (IPO), has found that stream-ripping is now the most prevalent and fastest growing form of music piracy in the UK, with nearly 70% of music-specific infringement dominated by the illegal online activity. Research revealed that the use of stream-ripping websites, which allow users to illegally create permanent offline copies of audio or video streams from sites such as YouTube, increased by 141.3% between 2014 and 2016, overwhelmingly overshadowing all other illegal music services.
There has been a big 'fair use' ('fair dealing)' case in Canada which pitted content owners against Canadian Universities, with the latter's copying Guidelines under the microscope. And in Access Copyright v. York University, the Honourable Michael L. Phelan of the Federal Court of Canada came down on the side of Access Copyright, which exists to collect royalties on behalf of creators and publishers. Access had suffered a catastrophic decline in revenues after the Guidelines were adopted by York and other educational institutions, and sued York. York’s copying was for a permitted purpose, namely education, but Justice Phelan found that York’s dealing was unfair, or grossly unfair, on several of the six factors used to assess fair dealing (purpose of the dealing; the character of the dealing; the amount of the dealing (amount of copying); the available alternatives to the dealing; the nature of the work; and the effect of the dealing on the work. The court also found York’s guidelines to be unfair, poorly conceived and arbitrary, and that York made no effort to see that they were followed. There is more on the Financial Post here.
AND FINALLY, BUT IMPORTANTLY!
The MPA (Motion Picture Association) EMEA policy team is offering a full-time internship at its offices in Brussels for 6 months. The intern will receive financial compensation. The selected candidate will work closely with the MPA EMEA Policy Department and will primarily focus on supporting the team in implementing the EMEA Policy Strategy. More here.
