Prof. Jane C. Ginsburg, Columbia University School of Law*
April 19, 2012

On the occasion of the 20th anniversary of the Fordham International Intellectual Property Conference, its organizer, Prof. Hugh Hansen, planned a session on “Copyright Law: Where has it been, where is it going?” and asked me to look back over the 20 years since the conference’s inception in order to identify the most important development in copyright during that period.   Of course, the obvious answer is “the Internet,” or “digital media,” whose effect on copyright law has been pervasive.  I want to propose a less obvious response, but first acknowledge that digital media and communications have called into question every one of the exclusive rights that Section 106 of the Copyright Act grants to authors.  This column will first summarize those challenges, as well as the addition of a new Section 106 right.  I then will turn to a less obvious response, one that I hope evokes the core of copyright law, past, present, and future.

Exclusive rights, modified by digital media?

With respect to the first of the Section 106 rights, the exclusive right to reproduce the work in copies, the Second Circuit in 2008 addressed both “What is a copy?” and “Who makes the copy?”1   The court emphasized the statutory requirement that a “copy” must be “fixed” for a period of “more than transitory duration.”  While the court did not tell us how short an instantiation is too fleeting to count as a reproduction, in the case before it, the “buffer copy” endured for only 1.2 seconds.  On the other hand, the Ninth Circuit had in 1993 held that RAM copies lasting some minutes were sufficiently fixed to create actionable reproductions.2   It remains to be ascertained where on the temporal spectrum between the Second and Ninth circuits there occurs a “fixation” sufficient to create a “copy.”  As for who makes that copy, the Second Circuit, imposing a controversial “volition” condition, ruled that the entrepreneur of an automated system that copies, stores, and plays back television programming to subscribers at the subscribers’ demand, did not “make” those copies because the system simply responded to the end-user’s choice of programming to copy.  Given the proliferation of increasingly automated “on demand” services, to designate as the de jure “copyist” the beneficiary of the copy that the service offered to make on the user’s behalf risks putting significant amounts of economic activity beyond the reach of the copyright law (and spawning new business models designed to exploit this newly introduced gap in the law).

The meaning of “derivative works” covered by Section 106(2) came into question in cases testing the scope of the definition “any form in which the work may be recast, transformed or adapted.”  Is a complementary product, designed to intervene in the experience of watching a movie or playing a videogame, for example by altering the game’s speeds, or by deleting salacious scenes from the film, a “derivative work” if the product does not memorialize the changes in some fixed form?  Caselaw is unclear,3 and Congress in the Family Movie Act of 2005 provided a specific exemption for “wholesome-izing” software, while avoiding a determination of whether that software’s sanitized output would have been a “derivative work.”

The third exclusive right under Section 106, to distribute copies of the work “to the public by sale or other transfer of ownership, or by rental, lease or lending” has given rise to several inquiries.  First, does “by sale or other transfer of ownership” limit the kinds of distribution that come within the scope of the right, so that the right covers only transfer of physical copies?  Because one who sends a digital file retains ownership of her source copy, if “transfer of ownership” implies divestiture, then only hardcopy formats are susceptible to such transfers.  In fact, courts have concluded that creating new ownership of a digital file in the recipient computer may “transfer” ownership even when the sender still keeps her copy.4   But other problems remain, particularly concerning the apparent lack of a U.S. equivalent to the internationally mandated “making available right.”  Some U.S. courts have held that merely offering a file via a website or file-sharing network does not “distribute” the work because distribution requires actual receipt.5  Demonstrating actual receipt, particularly regarding unauthorized file-sharing, may, however, absent a presumption, prove very difficult.

Difficulties proliferate in connection with the fourth 106 right, to perform the work publicly.  First, while the hardcopy world warranted the traditional distinction between copying and distribution on the one hand, and public performance on the other, digital media blur the boundary, leaving courts to determine when an online exploitation is a distribution of copies and when it is a public performance.  When new modes of exploitation challenge the familiar order, courts and litigants grope toward the most apt metaphor.  Hence, when ASCAP contended that sending downloadable ringtones and music files should be deemed public performances, the court characterized the download as the digital equivalent of buying a disc at a record store, and streaming as the Internet equivalent of the radio.  While streaming would come within the ambit of a public performance license, if a download is like buying a record and taking it home to listen to, then only private performances would ensue from the download.6   The court acknowledged that there might be exploitations occupying a midpoint on the spectrum between streams and downloads, but determined that it need not yet ascertain their correct characterization.

Even were the act deemed a “performance,” to trigger Section 106(4), it must also be “public.”  Where only one member of the public receives a transmission of a performance, the transmission’s characterization as a public pay-per-view or a private performance may, according to the Second Circuit, turn on whether a centralized source copy generates multiple transmissions to members of the public, or whether only one member of the public can receive a transmission from a single, dedicated source copy.7   As the cost of digital storage drops, the prospects for redundant individually dedicated copies increase, potentially spawning a host of new copyright-avoiding business models, particularly as that storage moves to the “cloud.”

The Section 106(5) right of public display encounters many of the same ambiguities as the public performance right, as well as an additional uncertainty regarding “who” engages in an online public display.  The Ninth Circuit has ruled that the “display” of a digital image emanates from the source website, even when an intermediary frames the image in a way that, to the viewer, appears to make the framer (whose advertisements also accompany the third party image) the source of the display.8

Finally, in this review of the impact of digital media on the exclusive rights under copyright, Congress in 1995 and again in 1998 established a new right, of digital public performance of sound recordings.  The new Section 106(6) regime confers a full exclusive right on interactive communications (such as listen on demand), and imposes a compulsory license for webcasting and other non-interactive services.  The compulsory license mandates a 50-50 division of royalties between producers and performers (with 5 percent of the performers’ share set aside for “non-featured” performers).  By contrast, if the full exclusive right applies, performers will be remunerated according to their contracts, which may mean that they will not in fact be compensated.  This division of spoils inspires a heretical inquiry: If creators are guaranteed a share of the income from a compulsory license, but may well get nothing from the market rate right, might they be better off without exclusive rights in exchange for guaranteed remuneration?

A different development…

With creators in mind, I turn to the promised less-obvious event.  My candidate for the most important copyright development in the last 20 years is: Harry Potter.  J.K. Rowling is, after all, the poster child for copyright, having gone from public assistance to riches rivaling the Queen of England, all on the fruits of her intellectual labor.9   Her success reassures us of the centrality of individual creativity in the copyright scheme.  She has, moreover, managed to retain a remarkable degree of artistic and financial control over her works, from film rights to e-books.  Harry Potter is also an international phenomenon, widely translated, distributed … and infringed, whether by “Tanya Grotter,” a Russian emulation condemned by the Dutch courts, or “Harry Potter in Calcutta,” ruled an infringement in India.

Harry Potter also affords a useful vehicle to examine limitations on copyright, both de jure, in the form of the fair use doctrine, and de facto, via the Internet.  The Harry Potter Lexicon sparked an interesting debate about the doctrinal differences between the noncommercial online version, which J.K. Rowling had praised, and the commercially published book, which she sought to have enjoined.10  In the transition from web format to print, the Lexicon lost the cross-referential and interactive features that had enhanced its claim to fair use.  In print, as Rowling’s lawyer put it, the author and publisher “took too much and did too little.”  It had become a cut-and-paste job lacking “transformative” commentary or analysis, and potentially competed with Rowling’s own revision of her works into reference volumes.  By contrast, Rowling does not pursue the myriad acolytes who post on the web vast numbers of “fan fiction” variants on the Harry Potter books.  The “” site alone boasts almost 35,000 authors of more than 75,000 HP stories.  Were these (or some of them) commercialized as sequels, an infringement action might well follow; as webposts, they constitute one of the most significant examples of what my colleague Tim Wu has called “tolerated use,” that is, uses that may be pervasive yet “pass under the radar” of copyright enforcement, in part because their financial or artistic impact may be trivial, and in part because authors do not wish to antagonize their fan base.

The Harry Potter books also provide a tantalizing glimpse of author-managed exploitation.  Rowling kept her e-book rights, and released the Potter books as e-books only a couple of weeks ago.  They are compatible with all e-book readers, but available only from Rowling’s own “Pottermore” website.  Or, available legitimately, since within less than two days the books could be obtained from the Pirate Bay and other unlawful sources.

Of course, when it comes to controlling one’s literary or artistic property, not everyone is J.K. Rowling, but it bears emphasis that less than 20 years ago, J.K. Rowling was “everyone,” struggling to write and to make a living.  And almost 20 years later, the digital tools are available for “everyone” directly to reach her audience, and (perhaps) even get paid for her work.

That hopeful forecast notwithstanding, I must also sound a somber note.  In the last 20 years we have seen a progressive denigration of authors, from the Romantic Author-bashing of the 1990s to the new romances of “crowdsourcing” and of authorial altruism (unremunerated authors who just can’t restrain themselves from being creative).  More recently, with the advent of mass digitization, another attack on authors arrives, this time for complicating transactions: If we didn’t have so many pesky authors who may be hard to find, or who if found, claim ownership of residual digital rights, then we could reduce the friction that discourages putting our entire cultural heritage online for the broader public good … or at least for the good of the entrepreneurs who would profit from new digital exploitations.

But this is not a new complaint.  In 1932, Australian novelist Miles Franklin imagined a conversation among movie moguls:

[T]hey were generally agreed that the total elimination of the author would be a tremendous advance….

“Authors,” said the gentleman, “are the bummest lot of cranks I have ever been up against.  Why the heck they aren’t content to beat it once they get a price for their stuff, gets my goat….”

There was ready agreement that authors were a wanton tax on any industry, whether publishing, drama or pictures….11

For the future, will we continue to perceive authors as a “wanton tax,” or as essential contributors to the constitutional aspiration for “the progress of Science”?