Professor Peter S. Menell
Director, Berkeley Center for Law & Technology
University of California at Berkeley School of Law
October 20, 2010
Prior to the emergence of peer-to-peer technology, the Copyright Act’s distribution right was largely dormant. Most enforcement actions were premised upon violations of copyright’s reproduction right. The relatively few cases invoking the distribution right involved arcane scenarios. But during the past several years, direct enforcement of the Copyright Act against file sharers has brought the scope of copyright’s distribution right to center stage.
Whereas the 1909 Act expressly protected the rights to “publish” and “vend,” the 1976 Act speaks of a right to “distribute.” Interpreting “distribute” narrowly, some courts have held that copyright owners must prove that a sound recording placed in a peer-to-peer share folder was actually downloaded to establish violation of the distribution right. Other courts hold that merely making a sound recording available violates the distribution right.
The ramifications for copyright enforcement in the Internet age are substantial. Under the narrow interpretation, the relative anonymity of peer-to-peer transmissions in combination with privacy concerns make enforcement costly and difficult. A broad interpretation exposes millions of peer-to-peer users to potentially crushing statutory damages.
None of the courts to confront the meaning of the Copyright Act’s distribution right traced the critical term back to its origins or explored specialized or settled meaning from practice or jurisprudence. The distribution-right cases pose several fundamental statutory interpretation questions: (1) Why did Congress enunciate a right to “distribute” against a backdrop of prior legislation embodying rights to “publish” and “vend”? (2) Did Congress intend to encompass those prior rights within the right to “distribute” or to narrow the scope of protection? (3) Did Congress explain the contours of the right to “distribute”? (4) Did Congress view the distribution right in a narrow, technical way (such as might support proof of “actual distribution”) or did it intend a broad and flexible provision? (5) If the distribution right encompasses the antecedent law’s right to publish, what was the scope of the publication right?
Any judge interpreting the distribution right would presumably want to know the answers to these critical questions, if answers in fact exist. But thus far, the judges who have confronted the scope of the distribution right have operated in a vacuum – no brief, treatise, or scholarly article has yet discovered and explicated the background and context.
During the past year, I have undertaken the statutory archaeology of the Copyright Act of 1976 to understand the contours of copyright’s distribution right. The exhaustive analysis can be found in “In Search of Copyright’s Lost Ark: Interpreting the Right to Distribute in the Internet Age,” available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1679514. Here are the main findings and their ramifications for the scope of copyright’s distribution right.
The exclusive right “to distribute copies” traces back to the Preliminary Draft for Revised U.S. Copyright Law and the accompanying hearings in February 1963. At that meeting, Abe Goldman, the General Counsel of the Copyright Office and the staff person responsible for the Preliminary Draft, explained that the distribution right
would cover everything that’s covered in section 1(a) of the [1909 Act] by reference to the terms “publish” and “vend” – broadened, I would say, to avoid any questions as to whether “publish” or “vend” is used in such a narrow sense that there might be forms of distribution not covered. I think the draft covers virtually all forms of distribution.
The term “publish,” long considered the foundation of copyright protection, derives from the Latin root “publico” or “publicus,” connoting “of the people, public, open to all.” Webster’s landmark 1828 dictionary defines “publish” as “mak[ing] known” to people in general. The second definition states “[t]o send a book into the world; or to sell or offer for sale a book, map or print.” These definitions do not require actual distribution. They plainly encompass the offering or making available of a work to the public. The evolution of the “publish” right in the 19th century and first half of the 20th century reflects this conception of “publish.”
In order to understand fully the origin of the 1976 Act’s distribution right, we need to take a detour into the jurisprudence surrounding “publication.” The Supreme Court’s 1834 decision in Wheaton v. Peters, 33 U.S. 591, held that publication of a work divested common law rights. The 1909 Act raised the stakes of publication by injecting works that were published without proper notice into the public domain. Reflecting the concern that “the law abhors a forfeiture,” courts required a larger public distribution of a work for publication to divest a common law protection than to invest federal copyright protection. Professor Benjamin Kaplan would lament in a 1955 article that the “[t]he concept of publication has been seriously distorted and now bedevils much of the law of copyright.” It is critical to recognize, however, that the confusion focused solely on the trigger for forfeiture (“public” availability) and had nothing to do with whether “publish” required actual receipt of copies.
This arcane distinction explains why Congress did not directly restate the “publish” right in the 1976 Act. At the February 1963 hearing, Edward Sargoy, representing the American Bar Association, explained that “use of the words ‘publication’ or ‘published,’ in hundreds of common law and statutory cases, dissertations, and otherwise, has made the terms archaic today in the light of our recent technological progress.” Congress sought to avoid the confusion that had arisen around the jurisprudence relating to divestive and investive publication. At the same time, it fully intended to retain and broaden the 1909 rights to publish and vend.
This intent is reinforced by the general discussion of the challenges that Congress sought to overcome in drafting the omnibus reform. The 1965 Supplementary Report recognized the need to guard against “confining the scope of an author’s rights on the basis of the present technology so that, as the years go by, his copyright loses much of its value because of unforeseen technical advances.” The Report then cites “these reasons” for stating the exclusive rights in “broad terms.” Then, with extraordinary prescience, the drafters noted that
it is becoming increasingly apparent that the transmission of works by nonprofit broadcasting, linked computers, and other new media of communication, may soon be among the most important means of disseminating them, and will be capable of reaching vast audiences. Even when these new media are not operated for profit, they may be expected to displace the demand for authors’ works by other users from whom copyright owners derive compensation. Reasonable adjustments between the legitimate interests of copyright owners and those of certain nonprofit users are no doubt necessary, but we believe the day is past when any particular use of works should be exempted for the sole reason that it is “not for profit.”
Thus, Congress conceived of the exclusive rights broadly, encouraged courts to interpret them so as to avoid their erosion as a result of unforeseen technological changes, and did not see the lack of financial motivation of those who would interfere with such rights to be a basis for narrowing the scope of the exclusive rights.
The 1965 Supplementary Report of the Register specifically notes that the language of the Section 106(3) distribution right “is virtually identical with the definition of ‘publication’ in section 101, but for the sake of clarity we have restated the concept.” Numerous examples in the statute itself and the key legislative report interchange the word “publication” for “distribute,” revealing that the drafters intended for the statutory definition of “publication” to inform the scope of the distribution right. That definition includes “the offering to distribute copies or phonorecords,” indicating that Congress conceived of the distribution right as encompassing mere offers of the work to the public – i.e., making works available to the public.
Thus, there is no need to quibble whether the “distribute” right and “publication” are co-extensive. Congress clearly thought of the two together and there is no indication that the distribution right is narrower than the definition of publication. If anything, Congress intended it to be broader.
Moreover, the offering language was added to the 1976 Act’s definition of “publication” in conjunction with U.S. negotiation of the Geneva Phonogram Convention and the enactment of the Sound Recording Amendments Act of 1971 (SRAA). Article 1 of the Geneva Phonogram Convention defines “distribution to the public” to mean “any act by which duplicates of a phonogram are offered, directly or indirectly, to the general public or any section thereof.” The SRAA House Report noted that “[t]he pirating of records and tapes is not only depriving legitimate manufacturers of substantial income, but of equal importance is denying performing artists and musicians of royalties and contributions to pension and welfare funds and Federal and State governments are losing tax revenues.” The SRAA added the following exclusive right to Section 1 of the 1909 Act: “(f) To reproduce and distribute to the public by sale or other transfer of ownership, or by rental, lease, or lending, reproductions of the copyrighted work if it be a sound recording * * *.” L. Quincy Mumford, the Librarian of Congress (who oversees the Copyright Office) observed in a letter accompanying the SRAA House Report that the language of the bill “closely correspond[s]” to the “content and purpose” of the Geneva Phonogram Convention. Thus, there is good reason to read “distribute” as used in the SRAA and the Copyright Act of 1976 to encompass the offering – whether directly or indirectly – of copies to the public.
Thus, Congress did not choose the verb “distribute” over “publish” so as to impose an additional restriction – proof of actual distribution – upon the foundational right to publish. Judge Wake’s conjecture in Atlantic Recording Corp. v. Howell, 554 F. Supp.2d 976 (D. Ariz. 2008), plausible in the abstract – that “[i]t is untenable that the definition of a different word in a different section of the statute was meant to expand the meaning of ‘distribution’ and liability under § 106(3) to include offers to distribute” – does not withstand scrutiny in light of the legislative history. That history demonstrates that, far from imposing extra requirements to prove violation of this right (such as proof of actual distribution), Congress had in mind a broad conception of distribution – encompassing offers.
So how could the courts have missed such critical evidence bearing on the meaning of copyright’s distribution right? The explanation appears to be the challenges of reconstructing the two decade-long gestation of the 1976 Act. The distribution right was resolved by 1965, but a logjam over the cable television provision delayed ultimate passage of the modern Copyright Act for another 11 years. The 1976 House Report does not explicate the full story, but references the prior reports. These reports are harder to locate and scholars, litigators, and judges have overlooked them. Furthermore, no one made the connection to the critical, nearly contemporaneous legislation relating to the SRAA and ratification of the Geneva Phonogram Convention. These documents explain the expansion, in 1971, of the definition of “publication” that ultimately appears in the 1976 Act.
The ramifications for copyright practice are profound. Interpreting the distribution right broadly as Congress intended would greatly streamline enforcement of copyright protection on the Internet and create the conditions to channel file sharers into legitimate market alternatives. In holding that placing a copyrighted work in a share folder that is accessible to the public violates the distribution right, courts would be in a position to grant summary judgment on liability in most file sharing cases. The copyright owner would need only establish valid ownership of the copyrighted work and the availability of the work at an Internet Protocol address controlled by the defendant. It is unlikely that defendants would be able to establish a valid defense. Hence, the liability phase in most file sharing enforcement actions could be handled relatively quickly.
Several other issues, however, stand in the way of efficient resolution of file sharing enforcement actions. Copyright owners would still have to endure the time consuming and costly process of filing “John Doe” suits in order to determine the identity of file sharers. Unfortunately, the DMCA subpoena provision was enacted just prior to the advent of peer-to-peer technology. It seems likely that Congress would have extended the provision to reach file sharers had it anticipated this development in the law. Peer-to-peer technology effectively transforms any computer connected to the file sharing networks into Web hosts, enabling anyone having access to those networks to store and distribute files. The logic behind Section 512(h) fully extends to file hosting on the Internet. An amendment to the DMCA to extend the Section 512(h) subpoena power to the file sharing scenario or possible graduated response measures with ISPs could resolve this impediment to effective copyright enforcement in the peer-to-peer domain.
Furthermore, the damages issue looms large in file sharing cases. Courts have understandably struggled to apply the Copyright Act’s statutory damage provision to file sharers. Congress lacked prescience in ramping up the statutory damage range in 1999 to $150,000 per work without recalibrating for a Web 2.0 world. Somewhat surprisingly, juries have been willing to award large damage awards in the two file sharing cases – Capitol Records v. Rassett-Thomas and Sony BMG Entertainment v. Tenenbaum – to go to trial. The judges in both of these cases substantially reduced the awards through remittitur.
Nonetheless, copyright owners have a workable solution to this problem. Since many file sharers make available hundreds of copyrighted sound recordings, record companies have substantial latitude in determining the number of statutory damage awards recoverable. By seeking only the minimum statutory amount – either $750 or $200 per work (where a court finds that the “infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright”) – the copyright owner would be entitled to summary judgment on damages as well. A court would also be able to determine injunctive relief – e.g., barring further unauthorized file sharing – without trial. Thus, a copyright owner able to establish that a file sharer has made available 100 works without authorization could recover at least $20,000 and as much as $75,000 without trial.
These ramifications do not fully resolve the larger social problems associated with copyright piracy on file sharing networks. The goal should be to channel consumers into a competitive marketplace that offers a fair value proposition – such as ubiquitous access to a broad catalog of music on the best digital devices at a fair price (say $5 to $10 per month). That does not mean that the price has to be competitive with free or only 99 cents per work shared without authorization, but it also should not threaten with bankruptcy the vast number of music fans who have illegally shared files. Balancing these competing concerns is no small task, but by streamlining copyright enforcement (in conformity with the proper interpretation of the Copyright Act), courts can play an effective role consistent with the congressional intent underlying the Copyright Act in bringing the digital music ecosystem into a more stable balance.