A federal court ruled yesterday that mobile phone carriers do not need to pay copyright performance royalties for the ringtones their customers choose to legally download and use. The ruling is a win for consumers and precisely the result that CDT, EFF, and Public Knowledge urged in an amicus brief filed earlier this year. Contrary to the performance-rights organization ASCAP’s strained assertions, the court ruled, “When a ringtone plays on a cellular telephone, even when that occurs in public, the user is exempt from copyright liability, and [carriers are] not liable.” In other words, neither you nor your cellular phone company owe ASCAP a few pennies every time your phone bursts into Raffi’s Bananaphone.

While ASCAP had made public statements that it would never go after individuals for copyright infringement, its demand for royalties from Verizon and AT&T implied that each customer was infringing copyright every time his or her phone rang, even using a ringtone that the user legally purchased. The court appropriately found that such uses would be non-infringing under section 110(4) of the Copyright Act, which exempts performances undertaken “without any purpose of direct or indirect commercial advantage.” This seems like common sense, and Fred von Lohmann at EFF has neatly summed up the implications with some apt comparisons: “This ruling should also protect consumers who roll down their car windows with the radio on, who take a radio to the beach, or who sing ‘Happy Birthday’ to their children in a public park.”
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CDT, EFF, and other commenters on the Google Books settlement sent a letter to Google’s lawyers yesterday asking the company to reconsider the privacy protections it will build into Google Books, taking advantage of the last-minute extension in the case. Google and the authors and publishers who sued the company are currently renegotiating the proposed settlement in order to resolve concerns raised by the Department of Justice last month [http://thepublicindex.org/docs/letters/usa.pdf].

CDT filed a brief on the original settlement, arguing that it should be approved, but recommending that strong, enforceable privacy safeguards be put in place. Yesterday’s letter asks that Google reconsider our recommendations, and similar ones from other advocates, in light of the extension. Google took some good steps in a privacy policy posted last month, but those commitments are incomplete and not adequately enforceable by the Court. Now that the deadline has been lifted, Google has the chance to make stronger commitments to reader privacy that the Court will have the authority to enforce.

The delay, while certainly a blow to the progress of the settlement, provides an opportunity to improve it. While the Justice Department’s concerns the parties are currently addressing did not include reader privacy, the lack of adequate safeguards nonetheless remains a problem—one that, given CDT’s brief and those of the other signers of today’s letter, Google is certainly aware of and has the resources to address. In light of the scrutiny the settlement has received and the recent setback, Google would do well to improve the settlement in all the ways it can. Protecting reader privacy should be an easy one.

Recently, CDT Policy Analyst, Andrew McDiarmid spoke at the Washington Legal Foundation about privacy issues in the Google Books Settlement. The video of Andrew’s discussion, as well as several other videos from the event, are available here.

Testimony by the Register of Copyrights last week expressed concern that the Google Books settlement improperly wades into matters that are the domain of Congress and would impair congressional efforts to enact orphan works legislation.

I certainly agree that the Google Books settlement goes much farther than a typical class action settlement. It uses the class action mechanism to achieve unusually broad goals — in particular, the creation of what amounts to a kind of collective license. In light of that breadth, the settlement warrants the extensive scrutiny it has been getting. And yes, in an ideal world, Congress would take up the matter and provide a generally applicable (rather than Google-specific) path to creating the online equivalent of a comprehensive library.

But it seems odd to characterize the resulting license-like arrangement as “compulsory,” as the Register of Copyrights did in the testimony, when rightsholders remain free to opt out (or, for that matter, to exercise more fine-grained control over what uses Google will or will not be allowed to make of their works). Whatever your view on how appropriate or inappropriate it may be to allow works to be included on an opt-out rather than an opt-in basis, participation is hardly “compulsory” within the normal meaning of that word.

I also see little reason to conclude that the settlement will interfere with Congress’s effort to craft orphan works legislation. The orphan works bill and the Google Books settlement address fundamentally different questions. The orphan works bill addresses the problem of how to enable some use of works whose rightsholders simply cannot be found, even with a diligent search. The Google Books settlement addresses the problem that, for the specific purpose of creating the online equivalent of a comprehensive library, the cost of conducting diligent searches and rights negotiations on a book-by-book basis would very likely be prohibitive. So even if the orphan works bill considered in Congress last year were to pass, it wouldn’t much help Google’s effort to build a comprehensive book search tool. Conversely, even if the Google Books settlement were approved, it wouldn’t much help anyone who wants to make use of a particular work but is unable to locate the rightsholder to seek permission. For true orphans — works whose rightsholders can’t be found — we need orphan works legislation. Nothing in the Google Books settlement precludes Congress from moving ahead on that front. Meanwhile, for out-of-print works — works whose rightsholders often could be found, at the cost of some book-by-book inquiry — we need some arrangement that eases the costs of facilitating large-scale online searchability and access.
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CDT has released our analysis of the privacy implications of the settlement in the Google Book Search lawsuit, which includes a detailed set of privacy recommendations for Google to consider as the service is developed.

As David Sohn initially wrote in October, CDT believes the settlement has a lot to offer the reading public, namely dramatically expanding access to the millions of books Google has scanned and indexed. Such a shift, though, does not come without concerns, particularly with respect to traditional the library values of patron privacy and intellectual freedom. With the release of today’s report, CDT joins our colleagues at the EFF, the ACLU, and UC–Berkeley’s Samuelson Law, Technology, and Public Policy Clinic, in calling for strong privacy protections in the expanded service.

At CDT, we believe that since privacy was (understandably) not a central consideration of the parties to the settlement, it is incumbent upon Google, with court supervision, to ensure that privacy is adequately protected. Critically, we think this can be accomplished without disrupting or delaying the approval of the settlement itself. The report calls for Google to make as specific a commitment as it can at this early stage to protecting reader privacy, and for the judge overseeing the settlement to exercise his authority to ensure that Google’s commitments effectively guide policies and practices as the service is fully implemented. To Google’s credit, the Book Search team is clearly thinking about privacy, and addressed some of CDT’s concerns in a blog post late last week. This should be the beginning, though, and not the end of the privacy discussion, and we look forward to working with Google and the court to preserve reader privacy as the library moves online.

The jury is very much still out on how the Obama Administration will approach intellectual property issues in the online environment. That’s not a complaint — I understand it has a few other things on its plate, like, say, health care reform, Afghanistan, the economy, and so forth. But CDT and some allies sent two letters this week aimed at getting things off on the right track.

The first concerns ACTA, the Anti-Counterfeiting Trade Agreement. It urges USTR to recognize that the Internet and information technology portion of the treaty — rumored to be weighing such hot-button topics as ISPs’ responsibility for controlling or supervising their users’ activities — is simply too controversial and affects the interests of too many parties that haven’t been privy to the talks. It just isn’t suitable for prompt resolution, and its inclusion in an agreement that may move quickly would only risk ill-conceived provisions that would harm technology companies and users. The letter also asks for USTR to stop treating the specifics of the negotiations as state secrets (it’s hard for CDT or anyone else to provide meaningful feedback when we’re not allowed to know what proposals are even on the table) and to include Internet companies and public interest groups in the trade advisory committee system.

The second letter, going out today, concerns the proper relationship between intellectual property and cybersecurity. It’s actually a simple relationship: while one can conjure up a few narrow scenarios with some overlap, the two are fundamentally separate issues. That might seem like a straightforward proposition, but the report of the Administration’s cybersecurity review team contained just enough references to “intellectual property” to raise the potential specter of the eventual White House cybersecurity advisor wading into i.p. issues under the guise of cybersecurity. Our letter warns against that: there’s going to be both an I.P. enforcement coordinator and a cybersecurity advisor in the White House, and there is no reason to start confusing or conflating their respective roles.

Happy Conclusion to Remote DVR Case

I noted at the beginning of the month that the Solicitor General had advised the Supreme Court not to reconsider the important Second Circuit case giving the green light to Cablevision’s “remote storage digital video recorder” (RS-DVR). I’m very happy to report that the Supreme Court has followed that advice. Yesterday the Court “denied cert” — meaning that it won’t take the case and that the Second Circuit’s decision will remain the final word on the matter.

This effectively puts an end to the serious threat posed by the original 2007 District Court decision, which held that the RS-DVR would infringe copyright based on the physical location of data storage. As CDT explained in a 2007 policy post and legal brief (http://www.cdt.org/copyright/20070608cdt-cablevision.pdf), the implications of that ruling for cloud computing could have been hugely damaging. Ditto the court’s finding of liability based on transitory buffering — something all digital devices do.

CDT and its allies spent a great deal of time to make sure the Second Circuit Court of Appeals and later the Solicitor General’s office would understand and appreciate what was at stake here. Thankfully, the final outcome is a strong appeals court decision rejecting the idea that using remote storage and buffers should expose service providers to extensive copyright liability. This was a big win, and a major bullet dodged!

The Solicitor General filed a brief with the Supreme Court on Friday that is good news for anyone who likes the idea of being able to record digital television without having to acquire and install a digital video recorder (DVR) box in the home. More importantly, the brief significantly reduces the chances of a decision that could cast a legal cloud over a wide range common network and computing technologies.
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The Copyright Office recently held its triennial hearings on exemptions to the Digital Millennium Copyright Act’s prohibition on circumventing technical protection measures for copyrighted works.  The Office is charged under the DMCA with issuing exemptions for specific classes of works where non-infringing uses will be adversely affected by the prohibition.  For most of the classes of works under consideration this year, it seems the Copyright Office would be in familiar territory, focusing on users’ ability to read, view, listen, or interact with creative works.  However, with one class—cell phone unlocking—the questions raised seem more at home in telecommunications and network neutrality policy than copyright policy.

The Office is reconsidering an exemption it granted in 2006 that protected individuals from liablity for breaking a firmware lock on a cell phone and using it on another phone network. At that time, no one opposed the exemption in time for their objections to be considered; this time, CTIA – The Wireless Association, Virgin Mobile, and others have voiced opposition, in part because of copyright-related concerns, but primarily to preserve a business model built around recouping hardware subsidies that some argue limits consumer choice.

While it’s true that phone–network locks do protect copyrighted firmware, I have a hard time seeing a compelling copyright interest in their use.  There is hardly a market for such firmware independent of the handsets themselves that circumvention would undermine.  Moreover, the 2006 exemption narrowly applies to those cases when the circumvention is only accomplished to use a phone on a particular network that it has been locked out of.

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We’ve been saying for a while now that negotiations on ACTA — the proposed Anti-Counterfeiting Trade Agreement — suffer from a serious transparency deficit. Today, USTR took the helpful step of releasing a summary of the structure of ACTA and the items that may be included in it.

The biggest positive here is the apparent recognition by USTR that greater transparency is needed. Hopefully USTR’s action today today won’t be a one-off thing, but rather will be the start of a new effort to provide information on an ongoing basis. As for the summary itself, it’s still quite high-level. Some of the items — improving international cooperation, fostering expertise towards more effective enforcement — appear perfectly sensible. Most of CDT’s potential concerns relate to Chapter Two, the section on the legal framework. For example, the summary says there is a discussion about what constitutes sufficient damages/remedies. And above all, from CDT’s perspective, there is a section on “Intellectual Property Rights Enforcement in the Digital Environment,” which raises such issues as “the possible role and responsibilities of internet service providers in deterring copyright and related rights piracy over the Internet.”

These are topics for which the details matter. The summary’s brief (two-sentence) paragraph on enforcement challenges in the digital and Internet environment doesn’t yet enable CDT or any other outside observer to offer much substantive commentary. But the summary also says that no draft proposal has been tabled yet in this area, so there may still be time. The main thing is for USTR to embrace the principle that this terrain is too tricky and potentially affects too many stakeholders to unveil the specifics only at the last minute, when the entire thing has been nailed down and there’s no going back. Let’s hope today’s summary is just a down payment, with more specific information to come as the negotiation process moves forward.