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Copyright Office 2016 White Paper on Remixes, First Sale, and Statutory Damages

The Copyright Office has released its 2016 White Paper to address some of the issues associated with remixes, the first sale doctrine and statutory damages with a focus on the interaction between copyright and modern technology, namely the Internet.

What the White Paper is: A review of some of the talking points of parties interested in the topics with some recommendations for possible improvements in the law and the enforcement of copyrights in the United States

What the White Paper is not: Law or policy or a final draft of any law or policy.

What the White Paper is for: Generating further discussion on ways to improve the Copyright system in the United States.

Key Points and Recommendations:

1) Remixes

Recognizing the value of remixes, the White Paper recommends:

  • The development of negotiated guidelines for providing greater clarity as to the application of fair use to remixes;
  • Expanding the availability of a wider variety of voluntary licensing options; and
  • Increasing educational efforts aimed at broadening an understanding of fair use.

2) First Sale Doctrine

In addressing the First Sale Doctrine in the modern Internet Age, the While Paper Recommends:

  • No changes in the law related to First Sale Doctrine;
  • Improved consumer education and making sure consumers understand licensing terms and making sure consumers understand the limits of leased and licensed content.

3) Statutory Damages

In addressing the growth of copyright litigation and online enforcement actions the White Paper makes four recommendations:

  • Incorporate into the Copyright Act a list of factors for courts and juries to consider when determining the amount of a statutory damages award;
  • Implement changes to the copyright notice provisions that would expand eligibility for the lower “innocent infringement” statutory damages awards;
  • In cases involving non-willful secondary liability for online services offering a large number of works, give courts discretion to assess statutory damages other than on a strict per-work basis; and
  • Creating of a “fast track” adjudication of smaller copyright claims through a centralized copyright office tribunal.

Some themes in the White Paper are that many of the perceived problems with the current copyright system are due to misunderstandings and misconceptions on what is and is not allowed. These are best addressed with promoting education, consistency and transparency, which are partly addressed in the listed factors suggested for the evaluation of copyright damages which include:

(1) The plaintiff’s revenues lost and the difficulty of proving damages.

(2) The defendant’s expenses saved, profits reaped, and other benefits from the infringement.

(3) The need to deter future infringements.

(4) The defendant’s financial situation.

(5) The value or nature of the work infringed.

(6) The circumstances, duration, and scope of the infringement, including whether it was commercial in nature.

(7) In cases involving infringement of multiple works, whether the total sum of damages, taking into account the number of works infringed and number of awards made, is commensurate with the overall harm caused by the infringement.

(8) The defendant’s state of mind, including whether the defendant was a willful or innocent infringer.

(9) In the case of willful infringement, whether it is appropriate to punish the defendant and if so, the amount of damages that would result in an appropriate punishment.

Of particular note, the While Paper rejects adjusting statutory damages of $750 – $150,000 per infringement, even for online personal use such as BitTorrent, but does propose that the statute should specifically include the nonexclusive factors in evaluating any such award, but notes individual file sharers may be properly liable in some cases for a full $150,000 damages award. As stated:

With respect to file-sharing, statutory damages must take into account not merely the defendant’s personal use, but his or her acts in uploading and distributing copies to potentially numerous recipients. And while statutory damage awards of $150,000 per work are rare, there may be cases, including in the context addressed in these proceedings, where such awards are justified due to the need to deter and punish willful infringement.

The White Paper also rejects action to address claims of litigation abuse by so-called “copyright-trolls,” stating:

… the Task Force heard concerns about so-called “copyright trolls” that use the threat of statutory damages to obtain settlement fees from alleged infringers. Some have suggested that Congress consider recalibrating statutory damages specifically to discourage misuse of the system. We do not recommend such changes at this time.

In sum, the biggest problems with the copyright system appear to be based on misunderstanding and confusion, which are best addressed through transparency and education.

 

Full text of the report: White Paper on Remixes, First Sale, and Statutory Damages (2016)