US LEGISLATION...FMA creates an express exemption to copyright infringement for using technology that allows for skipping portions of audio or video content in legally purchased or

The US Constitution includes copyright

protections because the Founders

believed that such protections were

necessary for progress. The enacted

copyright laws dealt with issues that

concerned tangible copyrighted works such

as paintings, books, and vinyl records.

However, innovation – particularly the advent

of the internet and of technology permitting

the digitising and easy sharing of all types of

content – has outmoded US copyright law.

Services emerged, using “peer-to-peer”

software, which allowed computer users to

exchange digitised copies of songs, movies,

software, and other content stored in

computer files easily, quickly, and broadly.

Through both legislation and the courts, the

US has attempted to adapt its copyright laws

to the new realities – facing competing

interests in the process.

On one side, content creators and owners,

such as those in the music and movie

18 | May 2005 | Copyright World # 150 www.ipworldonline.com

US LEGISLATION

K Copyright protection versus public access

Cydney A Tune and Carolina A Fornos, of Pillsbury Winthrop ShawPittman LLP, examine pending US copyright legislation

industries, make large investments of time

and money to produce their works and are

trying to protect their livelihood by

supporting legislation to increase copyright

protection and penalties for infringement

and by taking legal action against

infringers. Content producers are unlikely

to continue producing if they do not

get paid, to everyone’s detriment. Public

interest groups concerned about

dissemination of harmful materials over the

internet are often aligned with the content

industries in this struggle.

On the other side is the technology sector,

which is concerned that increased copyright

protection in the digital world will impede

innovation. Public interest groups that

represent consumers or promote free speech

are weighing in to support file sharing

technology. Librarians, archivists, educators

and researchers want to maximise public

access to copyrighted works. It is these

competing interests and their ongoing

struggle that are reflected in legislation

pending before the 109th Congress, which is

attempting to make significant revisions to

existing copyright law.

The Family Entertainment and Copyright Act

of 2005 (FEA) (S 167), and its companion bill

in the House of Representatives (HR 357),

were introduced on 25 January, 2005 and

contain four independent intellectual

property bills, all of which reflect the

continuing struggle between protection for

works and access to and use of such works.

Interestingly, FEA balances these competing

interests by promoting legislation favourable

to each side. Also pending in the House of

A delicatebalance

In summary

K As the US Government reacts to

new technologies with a succession

of Bills, it is also attempting to strike

a balance between promoting

copyright protection and improving

public access

K These competing interests, the

content creators on one side and the

technology sector on the other, and

their ongoing struggle are reflected in

pending legislation, including the

Family Entertainment and Copyright

Act of 2005, which is really a bundle

of Bills, and the Digital Media

Consumers’ Rights Act of 2005

Representatives is the Digital Media

Consumers’ Rights Act of 2005 (the Digital

Media Act) (HR 1201) a pro-consumer bill

that attempts to force the music industry to

clearly label copy-protected music discs as

such, and the Military Copyright Act, which

seeks to provide faculty of military schools

the right to copyright their work.

Senator Orrin Hatch (R-Utah) introduced

the FEA in the Senate with the aim of

modifying federal copyright law to stop

piracy on the internet and to assist parents

in protecting their families from

inappropriate material in movies. FEA

consists of four intellectual property bills

that the House and Senate have been

working to enact since the 108th

Congress: (i) The Artists’ Rights and Theft

Prevention Act of 2005; (ii) The Family

Movie Act of 2005; (iii) The National Film

Preservation Act of 2005; and (iv) The

Preservation of Orphan Works Act. The

Senate passed FEA on 1 February, 2005

and by 9 March, 2005, the House Judiciary

Committee had approved it. FEA is now

awaiting the President’s signature.

Promoting copyright protectionThe Artists’ Rights and Theft

Prevention Act of 2005 (ART Act): FEA

tackles the issue of piracy, including the

unauthorised dissemination of works that

have not yet been released to the public. The

ART Act makes it a federal crime to use or try

to use a video camera or other comparable

technology to transmit or make copies of a

movie from a film theatre (cinema), or to

distribute a computer program, audiovisual

work, or commercial sound recording to the

public via a computer network. These

provisions are intended to stem bootlegging

and unauthorised distribution of “pre-release

commercial works.”

The reality is that all too frequently an

unauthorised version of a movie is available,

either online or in hard copy, shortly after its

initial theatrical release or even before its

theatrical release. Some bootleg copies are

distributed for free while others are sold at a

price significantly below what would

normally be charged. The poor quality of

most bootleg copies does not seem to lessen

the interest in them. To deter this rampant

piracy, the ART Act imposes criminal

penalties for such infringement.

Specifically, any such offence would be

punishable by a fine and imprisonment for

up to three years and any unauthorised

copies of movies or other audiovisual works

would be forfeited and destroyed. For repeat

offenders, the prison term could be as long

as six years. Film theatre owners, lessees,

and exhibitors would be given the authority

to detain anyone suspected of unauthorised

filming or recording and would receive

criminal and civil immunity from liability

for a reasonable detention for questioning or

arrest of such a person.

The ART Act would also establish

criminal penalties for copyright infringement

from the unauthorised distribution of a pre-

release commercial copyrighted work.

Section 506 of the Copyright Act, which

governs criminal copyright infringement,

currently defines criminal copyright

infringement as wilfully infringing for (1)

commercial advantage or private financial

gain or (2) by reproducing or distributing

within any 180-day period one or more

copyrighted works having a retail value of

US$1,000. A new category of infringement

would be created, for knowingly making a

work (such as computer programs, movies

and sound recordings) being prepared for

commercial distribution available on a

computer network accessible to the public.

The punishment would include fines and/ or

three to ten years’ imprisonment.

To further promote copyright protection,

the ART Act directs the Register of

Copyrights to issue regulations establishing

procedures for pre-registration of an

unpublished commercial copyrighted work,

if that work is of a class that the Registrar

determines has a history of pre-release

infringement. Such a pre-registration

system would allow for a civil action for

copyright infringement, in which statutory

damages and attorneys’ fees can be sought

by the copyright owner, and as well as

providing for criminal penalties. Further,

the United States Sentencing Commission

would review and, if appropriate, amend

federal sentencing guidelines applicable to

persons convicted of intellectual property

crimes, such as trafficking in movies and

sound recordings without permission from

the copyright owner.

Senator Hatch introduced the ART Act as

an attempt to fight piracy and intended for it

to become an important statutory “tool for

law enforcement officials combating the

growing problem of music and movies being

distributed on file-sharing networks and

circulating on the internet before they are

even released.”1

Several states have begun to

criminalise this type of conduct, but the

ART Act would provide a federal

standard to help fight piracy. As Senator

Hatch recognised, “[s]everal States have

already taken steps to criminalise this

activity, but providing a uniform Federal

law – instead of a patchwork of State

criminal statutes – will assist law

enforcement officials in combating the

theft and redistribution of valuable

intellectual property embodied in newly-

released motion pictures.” Recognising

that piracy “severely undercuts the

ability of copyright holders to receive

fair and adequate compensation for their

works,” the ART Act aims to enhance

copyright protection.

National Film Preservation Act of

2005 (Preservation Act): FEA also

promotes copyright protection by creating

measures to recognise and preserve

historically or culturally significant movies,

while also benefiting the public by promoting

the broader dissemination of such movies.

The Preservation Act reauthorises and funds

the National Film Preservation Board and the

National Film Preservation Foundation, both

of which work to recognise and preserve

historically or culturally significant movies.

Any movies on the National Film Registry

would be stored in a proper manner and be

more widely accessible to researchers,

scholars, and the public.

The Preservation Act also directs the

Library of Congress, working with the Film

Preservation Board, to ensure that the

national film preservation plan utilises

advancements in the technology used to

preserve and store movies. The

Preservation Act would also expand the use

of the National Registry Film seal, allowing

a copyright owner to use the seal on other

copies of the Registry version of a film for

mass distribution or public broadcast. This

change permits the copyright owner to

commercially exploit the recognition and

status that flows from a movie’s selection by

the National Film Registry. This Act also

benefits the public because it ensures the

broad dissemination of culturally significant

US LEGISLATION

www.ipworldonline.com Copyright World # 150 | May 2005 |19

Through both legislationand the courts, the US

has attempted to adapt its copyright

laws to the new realities – facing

competing interests in the process

US LEGISLATION

20 | May 2005 | Copyright World # 150 www.ipworldonline.com

movies. The Preservation Act is not

controversial and is likely to be supported by

all of the competing interests.

FEA additionally addresses pro-consumer

and technology sector concerns by giving the

public and other interested parties certain

exemptions from copyright infringement and

by giving certain specified entities the right to

use orphan works during the last twenty

years of their copyright term.

Promoting public accessThe Family Movie Act of 2005 (FMA):

Technology exists that can be incorporated

into DVD players allowing consumers to

choose to skip or mute selected types of

content – such as nudity, profanity, sex and

graphic violence – during the DVD

playback. This is often referred to as “movie

filtering technology.” Movie filtering

technology does not change the DVD disc

itself, but rather allows the content of the

movie to be altered for viewing.

In September 2002, companies that

manufacture this technology were sued by

eight Hollywood movie studios, fifteen

directors, and the Directors Guild of

America for alleged copyright

and trademark infringement,

asserting that when portions of the

copyrighted content are skipped, a new

version of the work is created and that such a

new version constitutes a derivative work. See

Huntsman v Soderbergh, et al.2. Under present US

law, only the copyright owner has the right to

create derivative works; creating an

unauthorised derivative work is an infringing

act. The directors are particularly upset about

this technology because in their view it distorts

the movie they have created; the consumer is

not viewing it as they intended. Congress is

considering intervention on behalf of the

technology companies with a bill that would

end the litigation.

FMA creates an express exemption to

copyright infringement for using technology

that allows for skipping portions of audio or

video content in legally purchased or rented

movies while they are being viewed in a

private home, and for creating and selling the

devices that allow for such skipping.

FMA “empowers private individuals to use

technology to skip and mute material that

they find objectionable in movies, without

impacting established doctrines of copyright

or trademark law or those whose business

models depend on advertising.”3 Provided that

the user does not create a fixed copy of the

movie, under FAM use of such technology to

skip over content would not be deemed

copyright infringement.

FMA additionally protects a manufacturer,

licensee, or licensor of technology from both

copyright and trademark infringement when

creating or selling the technology that enables

viewers to skip content, provided that a clear

and conspicuous notice states that the

performance of the motion picture is altered

from the original one intended by the directors

and/ or copyright holders of the film at the

beginning of each performance and that only

“limited portions” of the work be skipped.

As Senator Hatch stated: “This is important

legislation both to parents who want the ability

to use new technologies to help shield their

families from inappropriate content as well as

the technology companies, such as ClearPlay in

my home state of Utah, that are working to

develop these technologies.”4

Under present US copy-

right law, it is not

clear that selling or

using movie filtering

technology would be

copyright infringement because a

work must be “fixed” before it is protected

by copyrights. Arguably, a copy of a movie that

is viewed but not “fixed” cannot be a derivative

work and thus could not be an infringing

derivative work. It thus appears that the

legislation may not be necessary.

Litigation is also pending against

businesses that rent edited versions

of motion pictures without

permission from the copyright

owner. This scenario creates

an entirely different legal

situation because the edited

version of the movie has been fixed into a disc,

which is then rented to consumers, and thus a

new work has been created. Whether that new

work constitutes a derivative work, however,

remains to be seen.

The Preservation of Orphan Works Act

(Orphan Works Act): The Orphan Works

Act also promotes public access to

copyrighted works. Under the predecessor to

the present US Copyright Act, a copyright

owner was required to register copyrights

and to affirmatively renew the copyright term.

Under that law, works that could have been

protected by copyrights became part of the

public domain, and thus freely useable, if the

copyrights were not registered or if no

renewal was filed. Those procedural

formalities no longer exist in the present

law. Rather, copyrights arise automatically

when an original work of authorship is

fixed in a tangible medium of expression

and last for a single term during which no

renewal is necessary. An “orphan work” is

one for which no copyright owner can be

found. If a work is protected by copyrights

but the copyright owner cannot be located,

the work cannot be used without

infringement because no permission can

be obtained.

The Sonny Bono Copyright Term

Extension Act, which added 20 years to the

term of copyrights, added Section 108(h)

to the Copyright Act in order to

ensure that the copyright term

extension would not have an

adverse effect on the

preservation and education

work of libraries, archives

and non-profit educational

institutions, by permitting

such entities to reproduce,

distribute, display and

perform copyrighted

works during the

extended copyright term if

the work is not being commercially

exploited and is not available at a

reasonable price. However, that legislation

inadvertently failed to amend Section 108(i) to

include musical, pictorial, graphic and

sculptural works, as well as movies and other

audiovisual works. The Orphan Works Act

will correct this problem by allowing libraries,

archives, and some non-profit organisations to

copy, distribute, display or perform all types of

Arguably, a copy of amovie that is viewed butnot “fixed” cannot be a

derivative work and thuscould not be an infringing

derivative work

orphan works during the last 20 years of their

copyright term.

Arguably, the Orphan Works Act would

expand the Copyright Act’s fair use

exemption for libraries, archives and

educational non-profit organisations by

including all types of copyrighted works

within its scope, thus promoting wider

public access to copyrighted musical,

pictorial, graphic and sculptural works.

However, it permits limited copying

by those entities only of works that

are not being commercially exploited and

only during the last 20 years of their

copyright term.

Some proponents of broad public access to

copyrighted works do not believe that the

Orphan Works Act goes far enough. They

believe, for example, that the provisions

should apply to all orphaned works – not only

to those that are in the last 20 years of their

copyright term – and that the exemption

from infringement should apply to

unpublished works as well as to those that

have been published.

The Digital Media Consumers’ Rights

Act of 2005: Just last month, Representative

Rick Boucher (D-Va) introduced HR 1201,

known as he Digital Media Consumers’

Rights Act of 2005, to amend the Federal

Trade Commission Act to provide that the

advertising or sale of a mislabelled copy-

protected music disc is an unfair

method of competition and an

unfair and deceptive act or

practice.

Specifically, the Bill seeks to

empower the Federal Trade

Commission to ensure the

adequate labelling of

pre-recorded digital

music products.

Without labelling to

warn consumers of the restrictions on

playability and recordability, the introduction

of “copy-protected compact discs” in

commerce has allegedly caused consumer

confusion and increased the burden on

retailers and manufacturers that respond to

consumer complaints.

The pro-consumer bill seeks to render

unlawful the advertising or sale or attempted

sale of a pre-recorded digital music disc

product that is mislabelled or falsely or

deceptively advertised or invoiced or,

additionally, to remove or mutilate any label

required by the Bill.

The Military Rights Act: Another Bill

pending in this Congress is HR 962, the

“Military Copyright Act.” This Bill, introduced

on 17 February, 2005, proposes to allow faculty

members at Department of Defense service

academies and schools of professional

military education and who are also

members of the Army, Navy, Air Force,

or Marine Corps, or a civilian employee of the

Department of Defense, to secure copyrights

for certain scholarly works that they produce as

part of their official duties to enable them to

submit such works for publication.

The right to copyright is restricted to the

purpose of submitting such work for

publication in a scholarly journal,

publication, or other edited work for which

copyright is a requirement for consideration

for publication. The Military Copyright Act

additionally provides that the person who

obtains such copyright, shall not accept

royalties or other compensation and shall

also transfer the copyright to the owner of

the medium in which the work will be

published.

The Induce Act: One controversial bill

worth mentioning not because it is pending

but, rather, because it is likely to be re-

introduced this summer after the US Supreme

Court rules on Metro-Goldwyn-Mayer Studios

v Grokster, is former Senate bill 2560, which

never made it out of committee in the

108th Congress. This bill, known as

the Inducing Infringement of Copyrights

Act of 2004 or the Induce Act, would have

amended the Copyright Act to provide that

anyone intentionally inducing another to

infringe a copyright would also liable for

copyright infringement.

The Induce Act has been viewed as a direct

attack on file sharing and a response to the

Ninth Circuit Court of Appeals’ decision in

Grokster, holding that peer-to-peer services

by Grokster did not violate copyright laws.

Regardless of how the Supreme Court rules,

it is expected that Congress will see bills being

introduced relating to the issues involved in the

Grokster case and that may seek to work around

any such decision.

In sum, the bills pending in the current

Congress continue the struggle between

protection and access and seek to strike a

delicate balance. Although it remains to be

seen whether any of these bills will be enacted

into law, it is clear that the Copyright Act will

continue to see revisions necessary to keep

pace with technology. K

Notes

1 151 Cong. Rec. S450-01 at S494, daily ed. 25

January, 2005, statement of Senator Hatch.

2 No. 1:02-cv-01662 (D. Colo. filed 29 August, 2002).

3 151 Cong. Rec. S450-01 at S501, daily ed. 25

January, 2005, statement of Senator Hatch.

4 See News Release, Orrin Hatch United States

Senator for Utah 25 January, 2005 at 1.

www.ipworldonline.com Copyright World # 150 | May 2005 |21

US LEGISLATION

The bills pending in thecurrent Congress

continue the strugglebetween protection and

access and seek to strike a delicate balance

About the authorsCydney Tune (near right) is Counsel at Pillsbury Winthrop Shaw Pittman LLP’s San Francisco office, andchairs the firm’s Copyright Practice team. Her practice includes the full range of copyright protection,including counselling, strategic planning, clearances, prosecution, and extensive policing and enforcementboth in the United States and abroad. Ms Tune also handles transactions involving copyright issues,including copyright license and transfer due diligence as well as assignments and licenses. She representsrights owners and accused infringers in copyright and related disputes.

Carolina Fornos (far right) is an associate at Pillsbury Winthrop Shaw Pittman LLP’s New York office.Her experience primarily includes litigation involving copyright and trademark infringement, dilution, anti-counterfeiting, and unfair competition. Ms Fornos additionally has experience in trademark prosecution, drafting and responding to cease and desist letters, and domain name disputes (includingICANN proceedings).