The US Register of Copyrights Shira Perlmutter said she agreed with the "conclusions and recommendations" of a May 2020 Copyright Office report on Section 512 of the Digital Millennium Copyright Act on notices and take-down, which concluded that "the balance Congress intended when it established the §512 safe harbour system is askew."
Speaking at a hearing on the Oversight of the US Copyright Office held by the Committee on the Judiciary at the House of Representatives, chaired by Congressman Jerrold Nadler, Perlmutter said the Copyright Office report was "a comprehensive and thoughtful analysis after five years of gathering input and looking at judicial interpretation and data."
She added: "As the report set out, the original goal of section 512, was to find the right balance between the stakeholders and the online digital eco-system, to ensure that copyright owners could effectively enforce rights in the online environment but also, at the same time, ensure that service providers had legal certainty to be able to offer innovative platforms without facing crippling liability for the actions of all their users."
Difficulty to assert rights
"And, of course, users' interests' were reflected in different ways, in part through the put back provisions for the content that was improperly taken down," explained Perlmutter. "Now, in many ways, section 512 has achieved these goals, but more than 20 years later there's been a lot of changes in technologies so that the core interpretations have evolved."
She added that, as the Copyright Office outlined in the report, the "expected results are not today what they expected to be" by the copyright owner community. "And it has become more difficult to assert rights than it was originally anticipated."
Perlmutter said the situation is often described by copyright owners as a "whack-a-mole" situation, with the issue that "as soon as content is taken down, under the system it may be immediately re-posted," and she also noted that the system presented challenges for small copyright owners to assert their rights.
Room for improvement of Section 512
On the other side, added Perlmutter, service providers and users' group said the system was working well, albeit with the concern of "potential abuses" and the "impact of automation."
"I do think there is room for improvement, and the Office did not make very detailed recommendations, but pointed to areas where Congress could profitably act to restore the original intended balance, or potentially to change it in some ways and adapt it to the circumstances. All these proposals are well worth continuing to discuss."
In her first Congressional hearing since she was appointed Register of Copyright at the end of 2020 by Librarian of Congress Carla Hayden, Perlmutter was also asked by Nadler about her views on the resale royalty right (ARR) for visual artists. Nadler, in the previous legislature, introduced the American Royalties Too ( ART), which would create an ARR for works by visual artists sold through auctions or by galleries.
Support for artist resale right
Nadler reiterated his wish to see the legislation pass Congress, as a matter of "basic fairness" for visual artists. Perlmutter said she had been personally "supportive of the concept of resale royalties," noting than more and more countries have adopted such a right, which is already implemented in over 70 countries around the world.
"There is also more evidence about the impact of such a right, showing some of the concerns about its adoption and some of the potential negatives have not materialised," she said. "So I do support continuing to look at this" she said, offering the assistance of the Copyright office on the matter.
At the start of the hearing, Nadler welcomed Perlmutter by stating that the Copyright Office played "a vital role in withholding the [US ] copyright system." Nadler said the effects of the pandemic on the creative sector have been "devastating" and have made "more evident how critical it is to maintain a strong copyright system."
Progress in the modernisation of the Office
Perlmutter, who was previously the US Patent and Trademark Office’s Chief Policy Officer and Director for International Affairs, noted that the Office has shown "remarkable resilience" throughout the pandemic.
Looking at the past year, Perlmutter painted in her written testimony a positive overview of the Copyright Offices' agenda: "We have registered almost half a million copyright claims, recorded ownership information for titles of over 230,000 works, published a comprehensive study of section 512 of the Copyright Act, implemented key parts of the Music Modernisation Act (MMA) and the Copyright Alternatives in Small Claims (CASE) Act, made progress in modernising our services, managed over $1 billion in royalties, and provided assistance to almost two hundred thousand members of the public with copyright questions."
Regarding the Music Modernisation Act of 2018, Perlmutter said the Office completed nine rule-makings to implement various provisions of Title I (Musical Works Modernisation Act) and Title II (Classics Protection and Access Act). This included establishing the initial regulatory framework required for the new mechanical licensing collective to administer the new blanket license. The Office also fully implemented Title II, which provides protection for pre-1972 US sound recordings and establishes a safe harbour for noncommercial uses of such works.
"On average, agencies generally take more than one year to complete a rulemaking we completed nine rulemakings in approximately 2.5 years," said the Register of Copyrights.
Establishing the Copyright Claims Board
Perlmutter also said that the Office is focused on the implementation of the CASE Act, which establishes within the Copyright Office the Copyright Claims Board (CCB) to resolve disputes regarding copyright claims that have relatively low economic damages. Perlmutter said the Office is "working intensively to set up this groundbreaking system."
She described the CCB as "a voluntary, alternative forum to federal court staffed by copyright experts that will use streamlined, affordable procedures. When operational, the CCB will be the first intellectual property small claims tribunal in the United States."
The Office has begun the hiring process for the CCB, and is reviewing applications for the three Copyright Claims Officers. Perlmutter revealed that she anticipates "being able to recommend appointments to the Librarian later this spring."
Focus on The MLC
In addition, she said, the Office has begun preparatory work to hire support staff, including attorneys, once the Officers arrive. She said in her oral testimony that she was “optimistic” that the CCB would be operational by December. 27, which is the deadline set by the law.
Perlmutter also said the Office putting the last touches to its policy study to recommend best practices that the MLC may implement with regards to unclaimed royalties. The guidelines will look at how to effectively identify and locate copyright owners with unclaimed royalties of musical works, encourage copyright owners to claim accrued royalties, and ultimately reduce the incidence of unclaimed royalties. Perlmutter said the Office plans to complete the study by the July 8, 2021, deadline.
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