SECOND INTERNATIONAL HARVARD CONFERENCE ON INTERNET & SOCIETY may 26-29, 1998
Hearing on On-Line Copyright Liability Limitation Act HR 2180
Before the House Judiciary Committee, Subcommittee on Courts and Intellectual Property
Statement On Behalf of the Graphic Artists Guild
by Daniel Abraham, Vice-President for Public Affairs
The Graphic Artists Guild:
- Opposes limiting the copyright liability of on-line service providers as contrary to the fundamental Constitutional intent of copyright law to protect the rights of creators;
- Opposes limiting the copyright liability of on-line service providers because they are adequately protected under existing law;
- Opposes limiting the copyright liability of on-line service providers to the extent that they lay unilateral claim, by terms of service or otherwise, to copyright in works posted on or transmitted by on-line services;
- Supports holding on-line service providers and their subscribers accountable for the unactionable infringements enabled by the distribution of copyrighted works over on-line networks;
- Opposes limiting the copyright liability of on-line service providers to the extent that such limitation removes the incentive for on-line service providers to assist and participate in the dissemination of copyright education to the general public.
THE GRAPHIC ARTISTS GUILD
The Graphic Artists Guild promotes and protects the economic interests of its members. It is committed to improving conditions for all creators of graphic art and raising standards for the entire industry. The Guild is a union that embraces creators of graphic art at all levels of skill and expertise, producing work intended for presentation as originals or reproductions.
Graphic artists create a wide variety of intellectual property: company and product logos; illustrations for media and advertising; posters for political and sales campaigns; merchandise in the apparel, home decorative and stationery markets; and computer graphics which enhance and drive the digital marketplace.
Graphic artists have already suffered from infringements caused or facilitated by on-line service providers (see Appendix C), and are particularly vulnerable to further injury without relief if the On-Line Copyright Liability Limitation Act passes.
THE PROPERTY RIGHTS OF CREATORS MUST BE SAFEGUARDED.
The Constitutional authorization for copyright protection in Article I, §8 mandates safeguarding the rights of creators, for their own benefit and for the public interest. The Copyright Act is designed to protect the rights of creators in their work, and the rights of successor interests; licensees, purchasers and heirs. Any alteration of liability for infringement must be measured against this standard; unless the effect is the better protection of creatorsí rights, the alteration is contrary to the legislative history and intent of the copyright law.
This bill proposes to shield a specific class of business from copyright liability in the course of its distribution or transmission of copyrighted work. It does not address the threat which such distribution may pose to the protection of creators’ rights. In failing to do so, such an alteration in liability threatens the constitutionally-mandated incentives intended to foster the creative process.
ON-LINE SERVICE PROVIDERS PROTECTED BY EXISTING LAW.
On-line service providers are common carriers to the extent that they simply engage in secondary transmissions, providing their subscribers with an avenue for the interchange of their primary transmissions. Carriers engaging solely in the passive transmission of copyrighted work are exempt from liability under ß111(a)(3) of the copyright law; additional protection is unnecessary. Extending the scope of protection accorded passive transmissions is undesirable in light of the active attempts by on-line service providers to claim a copyright interest in the works transmitted (see infra).
On-line service providers currently shield themselves from liability for copyright infringement under existing law by means of warranty and indemnity. The contract between on-line service provider and subscriber, as expressed in the terms of service, warrants that those disseminating works have the right to do so, and will indemnify and hold harmless the on-line provider from any actions arising from breach of that warranty. (see Appendix, Compuserve Operating Rules: Copyrighted Material; Content and Uses of the Service; Indemnification; Compuserve Terms of Service #4.) This remedy is in keeping with the traditional reliance upon private remedies and civil suits for the settling of copyright claims. Continued reliance on these remedies and on existing statutory protection is preferable to enacting unnecessary special interest legislation, which will extend insulation from liability to the detriment of the integrity of copyright protection.
ON-LINE SERVICE PROVIDERS CANNOT SIMULTANEOUSLY LAY UNILATERAL CLAIM TO A PROPERTY INTEREST IN TRANSMISSIONS AND ACHIEVE INSULATION FROM LIABILITY.
Many on-line service providers do not restrict themselves to a passive role as regards their secondary transmissions. They assert a copyright interest in the works posted on their services, claiming that by virtue of providing the means of transmission they have created value-added compilations, with the non-exclusive right to publish, alter and use the material (see Appendix, excerpt from America Online Terms of Service; excerpt from Compuserve Terms of Service; What is a Compilation Copyright?; Compuserve Copyright). Not only do the on-line service providers pay no compensation for these rights, they compel paying subscribers to forfeit full control of their own property.
On-line service providers cannot simultaneously claim ownership and insulate themselves from liability. To the extent that they claim copyright in the works of creators and copyright holders that are posted or circulated on their networks, they forfeit common carrier status and the corresponding insulation from liability. The proposed act is flawed in that it would not prevent on-line service providers from asserting property rights in the works of others, but would insulate them from liability if they did not themselves post the work. Such a wholesale endorsement of unilateral copyright acquisition is wholly contrary to the protection of creators’ rights which is fundamental to the copyright law; further statutory insulation from liability for transmitters who assert a property interest in the work transmitted is neither necessary nor desirable.
ACCOUNTABILITY FOR UNACTIONABLE INFRINGEMENTS ENABLED BY THE DISTRIBUTION OF COPYRIGHTED WORKS.
On-line networks offer great opportunities for the distribution of works. But with this opportunity comes a corresponding peril to the worksí protection and integrity. The new electronic environment by its very nature makes infringement easy. Technology has vastly increased the means whereby copyrights may be infringed, whether by alteration or dissemination, and the infringement rapidly distributed, without an equivalent increase in means to guard against or detect such infringements.
Not only electronically created work is at risk. Work done in traditional media may be easily taken and placed on an electronic network unbeknownst to the creator. The proposed limitation on liability for on-line service providers, while insulating the means of infringement from liability, offers no compensating means to protect the individual creator.
Despite the pervasiveness of on-line infringements, the difficulty of detecting them and identifying the originating infringer renders them largely unactionable. Yet infringing subscribers and the on-line service providers which furnish the engine for such infringements must be held accountable. A licensing system offers a solution to the threat posed to the copyright system by unactionable infringements. Such a system could include a licensing fee in the subscription collected by on-line service providers from their subscribers, which would be apportioned among rightsholders or their appropriate representatives. Similar systems already exist among cable television providers, which routinely assess and distribute a copyright fee from subscribers.
Liability as an incentive to private sector participation in copyright education.
The swiftly expanding group of on-line users is not generally knowledgeable about the need for intellectual property protection. The result is cavalier treatment of copyrighted material as freely available property. This is a threat to a major United States trade asset as well as to the private interests of rightsholders. If the US is to preserve its constitutionally-based policy of guarding incentives to individual creators, public education in the value of property rights in copyright must be expanded.
Potential liability in copyright infringement suits has given on-line service providers a financial interest in helping to remedy the lack of copyright education in the general populace. Copyright warnings and on-line copyright education sites are widely posted to insulate service providers from liability. Statutory insulation from liability will diminish, if not destroy, the incentive for service providers to create and provide such educational material causing the responsibility and expense of improving copyright education to fall much more heavily on the public sector. Such public policy is not merely short-sighted, but unjust in light of the claims made by on-line service providers on the copyrighted material posted by users.
CONCLUSIONS.
Any alteration of liability for infringement must be measured against the Constitutional mandate to protect the rights of creators. This bill fails to meet that standard; it is not designed to protect the incentives intended to foster the creative process, but to shield a specific class of business from copyright liability. The Graphic Artists Guild believes the On-Line Copyright Liability Limitation Act will benefit a single special interest over the public interest at the expense of individual creators.
Existing law adequately addresses the liability of on-line service providers. Service providers engaging in passive transmission of copyrighted work are common carriers exempt from liability under ß111(a)(3) of the copyright law. Extending the protection accorded passive transmissions is undesirable in light of on-line service provider claims to a copyright interest in transmitted works. On-line service providers currently shield themselves from infringement liability through warranty and indemnity, in keeping with the traditional reliance upon private remedies and civil suits for settling copyright disputes. Continued reliance upon these remedies and on existing statutory protection is preferable to enacting unnecessary special interest legislation.
On-line service providers asserting a copyright interest in the works posted on their services forfeit common carrier status and the corresponding insulation from liability.
Service providers cannot simultaneously claim ownership and insulate themselves from liability. The proposed Act would not prevent on-line service providers from asserting property rights in the works of others, but would insulate them from liability if they did not themselves post the work. Such a wholesale endorsement of unilateral copyright acquisition is wholly contrary to the protection of creators’ rights which is fundamental to the copyright law.
The proposed limitation of liability for on-line service providers insulates the means of infringement while offering no compensating means to protect the individual creator. Technology has increased the means whereby copyrights may be infringed, without an equivalent increase in means to guard against or detect such infringements. On-line infringements are largely unactionable, due to the difficulty of detecting them and identifying the originating infringer. Including a licensing fee in the subscriptions collected by on-line service providers would hold infringing subscribers and on-line service providers accountable for unactionable on-line infringements.
Copyrighted material is often treated as freely available property, due to the public’s lack of understanding in copyright matters. This harms the private interests of rightsholders and threatens a major United States trade asset. Expanded copyright education is essential for continued US leadership in the area of intellectual property. Potential liability has given on-line service providers a financial interest in improving this situation, but statutory insulation from liability will diminish, if not destroy, their incentive. The responsibility and expense of improving copyright education will fall upon the public sector.
The wider availability of information through electronic networks must not be achieved at the expense of creators’ rights. The Graphic Artists Guild urges that the On-Line Copyright Liability Limitation Act be defeated.