Class 19 Copyright, Spring, 2008 Consumer Control Randal C. Picker Leffmann Professor of Commercial Law The Law School The University of Chicago Copyright © Randal C. Picker. All Rights Reserved.

August 9, 2015Copyright © Randal C. Picker2 Old-School Copying n Facts u A buys Britney CD u A plays it and uses a tape recorder to copy it on a cassette to listen in his car. n What result for A?

August 9, 2015Copyright © Randal C. Picker3 Answer n OK u For sure after 1992, under the AHRA Section 1008 u Before 1992, fair use?

August 9, 2015Copyright © Randal C. Picker4 Sec n Prohibition on certain infringement actions u No action may be brought under this title alleging infringement of copyright w based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or w based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.

August 9, 2015Copyright © Randal C. Picker5 Copying under the AHRA n Three Types u Analog Recording w The old school original u AHRA Digital Recording w Recording that tracks the definitions set out in 1001 u Non-AHRA Digital Recording w All of the other digital recording

August 9, 2015Copyright © Randal C. Picker6 Protection under 1008 n For consumers engaging in noncommercial use u Of analog recording u Of AHRA Digital Recording n But u No protection for Non-AHRA Digital Recording

Tax and Compliance System for AHRA Digital n Statutory Deal u Get 1008 copying rights for qualifying digital devices u But that comes at a cost w Must pay royalties under 1003 w Must build in copying controls under 1002 August 9, 2015Copyright © Randal C. Picker7

For Non-AHRA Digital Recording n Trade-Offs u No 1008 protection u But no required 1003 royalties or 1002 copying controls n And Now the Key Question: Which Devices Qualify? u The PC? The iPod? August 9, 2015Copyright © Randal C. Picker8

August 9, 2015Copyright © Randal C. Picker9 Built-In Controls: AHRA 1002(2) n (a) Prohibition on Importation, Manufacture, and Distribution. u No person shall import, manufacture, or distribute any digital audio recording device or digital audio interface device that does not conform to ‑‑ w (1) the Serial Copy Management System;

August 9, 2015Copyright © Randal C. Picker10 Built-In Controls: AHRA 1002(2) w (2) a system that has the same functional characteristics as the Serial Copy Management System and requires that copyright and generation status information be accurately sent, received, and acted upon between devices using the system’s method of serial copying regulation and devices using the Serial Copy Management System; or w (3) any other system certified by the Secretary of Commerce as prohibiting unauthorized serial copying.

August 9, 2015Copyright © Randal C. Picker11 Obligation to Make Royalty Payments: AHRA 1003 n (a) Prohibition on Importation and Manufacture. u No person shall import into and distribute, or manufacture and distribute, any digital audio recording device or digital audio recording medium unless such person records the notice specified by this section and subsequently deposits the statements of account and applicable royalty payments for such device or medium specified in section 1004.

August 9, 2015Copyright © Randal C. Picker12 How Much?: AHRA 1004 n (a) Digital Audio Recording Devices. ‑‑ u (1) Amount of payment. ‑‑ The royalty payment due under section 1003 for each digital audio recording device imported into and distributed in the United States, or manufactured and distributed in the United States, shall be 2 percent of the transfer price. Only the first person to manufacture and distribute or import and distribute such device shall be required to pay the royalty with respect to such device.

August 9, 2015Copyright © Randal C. Picker13 How Much?: AHRA 1004 n (b) Digital Audio Recording Media. u The royalty payment due under section 1003 for each digital audio recording medium imported into and distributed in the United States, or manufactured and distributed in the United States, shall be 3 percent of the transfer price. Only the first person to manufacture and distribute or import and distribute such medium shall be required to pay the royalty with respect to such medium.

August 9, 2015Copyright © Randal C. Picker14 The Critical Question n What devices and what media are covered? u The personal computer? u MP3 players? w Then: The Diamond Rio? w Now: the iPod?

August 9, 2015Copyright © Randal C. Picker15 AHRA 1001(3) n A “digital audio recording device” is u any machine or device of a type commonly distributed to individuals for use by individuals, whether or not included with or as part of some other machine or device, the digital recording function of which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use, except for ‑‑

August 9, 2015Copyright © Randal C. Picker16 AHRA 1001(3) w (A) professional model products, and w (B) dictation machines, answering machines, and other audio recording equipment that is designed and marketed primarily for the creation of sound recordings resulting from the fixation of nonmusical sounds.

August 9, 2015Copyright © Randal C. Picker17 AHRA 1001(1) n A “digital audio copied recording” is u a reproduction in a digital recording format of a digital musical recording, whether that reproduction is made directly from another digital musical recording or indirectly from a transmission.

August 9, 2015Copyright © Randal C. Picker18 AHRA 1001(5) n (A) A “digital musical recording” is a material object ‑‑ u (i) in which are fixed, in a digital recording format, only sounds, and material, statements, or instructions incidental to those fixed sounds, if any, and u (ii) from which the sounds and material can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

August 9, 2015Copyright © Randal C. Picker19 AHRA 1001(5) n (B) A “digital musical recording” does not include a material object ‑‑ u (i) in which the fixed sounds consist entirely of spoken word recordings, or u (ii) in which one or more computer programs are fixed, except that a digital musical recording may contain statements or instructions constituting the fixed sounds and incidental material, and statements or instructions to be used directly or indirectly in order to bring about the perception, reproduction, or communication of the fixed sounds and incidental material.

August 9, 2015Copyright © Randal C. Picker20 Different Devices n The Cassette Recorder u I play a music CD in a CD player u I record it over the air using a cassette recorder u I play the cassette in my car n Does the AHRA apply? Is the cassette recorder a taxable device? Do I get the benefits of 1008?

August 9, 2015Copyright © Randal C. Picker21 Answer n What kind of device is it? u Is the cassette recorder a digital audio recording device? w That turns on, among other things, whether it can make a “digital audio copied recording” w That, in turn, requires a “reproduction in a digital recording format” w The cassette tape won’t qualify so the cassette recorder shouldn’t be a DARD

August 9, 2015Copyright © Randal C. Picker22 Answer n Consequence? u No triggering of 1002 copy control engineering rules u No triggering of 1003 royalties

August 9, 2015Copyright © Randal C. Picker23 Answer n 1008? u Cassette recorder should be analog recording device and recorded tape should be analog musical recording u Copying owned CD for cassette use in car will probably be noncommercial use u 1008 then insulates this copying from infringement action

August 9, 2015Copyright © Randal C. Picker24 Answer n Can I give the tape to a friend as a birthday present? u Does the copying and distribution qualify as “the noncommercial use by a consumer of such a device or medium for making digital music recordings or analog music recordings?”

August 9, 2015Copyright © Randal C. Picker25 Different Devices: The PC n The Personal Computer u I pop a music CD into my PC u I used Windows Media Player to rip the CD and copy the music to my PC’s hard disk u I listen to the music there over speakers attached to the PC. n Does the AHRA apply? Is the PC a taxable device? Do I get the benefits of 1008?

August 9, 2015Copyright © Randal C. Picker26 Answer n What kind of device is it? u Is the PC a digital audio recording device? w Recall the definition of a DARD: any machine or device of a type commonly distributed to individuals for use by individuals, whether or not included with or as part of some other machine or device, the digital recording function of which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use w We will now focus on the “primary purpose” of the copying capability of the PC. n PC Isn’t a DARD then and so says Diamond

August 9, 2015Copyright © Randal C. Picker27 Answer n Consequence? u No triggering of 1002 copy control engineering rules u No triggering of 1003 royalties

August 9, 2015Copyright © Randal C. Picker28 Answer n 1008? u Hard to think that PC should qualify as analog recording device or that digital files copied from music CD should qualify as analog musical recording u If that is right, 1008 does not insulate this copying from infringement action

August 9, 2015Copyright © Randal C. Picker29 Taking Stock of 1 st Generation Copies n Two Results u Cassette recorder w No copy-protection engineering requirements, no royalties and protected copying under 1008 u PC w No copy-protection engineering requirements, no royalties but not protected copying under 1008

August 9, 2015Copyright © Randal C. Picker30 Different Devices: MP3 Player n MP3 Player through PC u 2 nd generation copies u I move content from the PC to the MP3 player n What result?

August 9, 2015Copyright © Randal C. Picker31 Answer n What kind of device is it? u Is the MP3 player a digital audio recording device? w Won’t be excluded by “primary purpose” test w Does it make a “digital audio copied recording?” That, in turn, requires a “reproduction in a digital recording format of a digital music recording”

August 9, 2015Copyright © Randal C. Picker32 Answer The copy will be digital but is the hard disk being copied a digital music recording? –No: based on “only sounds” are 1001(5)(A)(i) –No: based on exclusion for material objects in which computer programs are fixed (1001(5)(B)(i)) n So MP3 player shouldn’t be a DARD

August 9, 2015Copyright © Randal C. Picker33 Answer n Consequence? u No triggering of 1002 copy control engineering rules u No triggering of 1003 royalties

August 9, 2015Copyright © Randal C. Picker34 Answer n 1008? u Hard to think that MP3 player should qualify as analog recording device or that digital files copied from PC should qualify as analog musical recording u If that is right, 1008 does not insulate this copying from infringement action

User-Generated Content n Some Examples u “Recut, Reframe, Recycle”: Center for Social Media w es/publications/recut_reframe_recycle/ es/publications/recut_reframe_recycle/ n Ten Things I Hate About Commandments u WEFs&feature=related WEFs&feature=related August 9, 2015Copyright © Randal C. Picker35

User-Generated Content n The Evolution of Dance u eiRNg eiRNg August 9, 2015Copyright © Randal C. Picker36

512(c): Online Safe-Harbor n 512(c): Information residing on systems or networks at direction of users. u (1) In general. ‑‑ A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider ‑‑ August 9, 2015Copyright © Randal C. Picker37

512(c) w (A) (i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing; (ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or (iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material; August 9, 2015Copyright © Randal C. Picker38

512(c) u (B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and u (C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity. August 9, 2015Copyright © Randal C. Picker39

512(g) n Replacement of removed or disabled material and limitation on other liability. ‑‑ u (1) No liability for taking down generally. ‑‑ Subject to paragraph (2), a service provider shall not be liable to any person for any claim based on the service provider’s good faith disabling of access to, or removal of, material or activity claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing. August 9, 2015Copyright © Randal C. Picker40

512(g) u (2) Exception. ‑‑ Paragraph (1) shall not apply with respect to material residing at the direction of a subscriber of the service provider on a system or network controlled or operated by or for the service provider that is removed, or to which access is disabled by the service provider, pursuant to a notice provided under subsection (c)(1)(C), unless the service provider ‑‑ August 9, 2015Copyright © Randal C. Picker41

512(g) w (A) takes reasonable steps promptly to notify the subscriber that it has removed or disabled access to the material; w (B) upon receipt of a counter notification described in paragraph (3), promptly provides the person who provided the notification under subsection (c)(1)(C) with a copy of the counter notification, and informs that person that it will replace the removed material or cease disabling access to it in 10 business days; and August 9, 2015Copyright © Randal C. Picker42

512(g) w (C) replaces the removed material and ceases disabling access to it not less than 10, nor more than 14, business days following receipt of the counter notice, unless its designated agent first receives notice from the person who submitted the notification under subsection (c)(1)(C) that such person has filed an action seeking a court order to restrain the subscriber from engaging in infringing activity relating to the material on the service provider’s system or network. August 9, 2015Copyright © Randal C. Picker43

Terms of Use n YouTube u n GodTube u August 9, 2015Copyright © Randal C. Picker44

Automatic Filtering n Under what circumstances? n Try the Fair Use Principles for UCG Test u “Nontransformative verbatim copying” u Meaning What? August 9, 2015Copyright © Randal C. Picker45

Automatic Filtering w (1) the video track matches the video track of a copyrighted work submitted by a content owner; w (2) the audio track matches the audio track of that same copyrighted work; and w (3) nearly the entirety (e.g, 90% or more) of the challenged content is comprised of a single copyrighted work (i.e., a “ratio test”). n Assess this August 9, 2015Copyright © Randal C. Picker46