The Digital Millennium Copyright Act: The Copyright Office Examines Whether it Needs Revamping

As most internet users of today know, music, videos, poems, photographs, and various other creative works are often posted on social media and other sites without the permission of the work’s creator.  These postings violate the creator’s exclusive right to distribute his or her own work, one of the central rights protected by copyright law and based on the Constitution.[1]  To address concerns of increasing copyright infringement online, Congress enacted the Digital Millennium Copyright Act (the “DMCA”) in 1998.  The DMCA allows copyright owners to submit takedown notices to internet service providers (who provide the platforms for postings, think YouTube, SoundCloud, Twitter, etc., abbreviated in this article to “ISPs”), demanding that access to an infringed work be blocked or the work removed.  In exchange for compliance with the DMCA and the swift removal of infringing materials, ISPs are exempted from liability for copyright infringement.

Although the DMCA may have provided a sufficient[2] remedy for copyright holders in 1998, copyright owners in recent years have complained that the increase in infringing posts resulting from the proliferation of user-upload sites such as eBay, SoundCloud, Vimeo, and others makes the takedown process onerous.  For example, since 2012 the music recording industry has sent takedown notices for over 17 million infringements.[3]  Google receives on average over 75 million URL takedown requests per month, and must use computer programs to sift through them all.[4] In response to the uproar from copyright holders, Congress has requested the Copyright Office conduct a study to determine the effectiveness of the DMCA.[5]  The study is currently ongoing, with the Copyright Office receiving more than 92,000 submissions in its first round of comments.[6]

In reviewing comments submitted during the first round, battle lines have clearly been drawn between the creators of works and ISPs.  In support of its position that the DMCA sufficiently protects the various parties’ interests, in its comment Amazon focused on the economic growth driven by the DMCA’s safe harbor provision, noting that, because of the safe harbor, ISPs have not been required to conduct the “difficult” task of policing posted content, a policy that has been “crucial to the growth of the Internet.”[7]  Amazon further asserted that the DMCA strikes “the right balance” between providing rights holders with the ability to remove infringing content while allowing ISPs the ability to “innovate and host ever-increasing amounts and types of content without fear of massive liability based on the activities of their users.”[8]  Other ISPs argue that, in fact, the takedown system is being abused, with a “guilty until proven innocent” approach often leading to misuse and overreach.[9]  One Google-backed study, conducted by the Berkeley School of Law, found that almost 30 percent of takedown requests received in a six month period had validity issues.[10]

Creators of copyrighted works, however, assert that the take down provisions are not an adequate deterrent to infringement, [11] particularly when a majority of takedown notices are for infringing uses previously the target of a notice.[12]  To counteract the cycle of takedown-repost-takedown, many creators are arguing for a “takedown, stay down” provision, which would allow copyright holders to submit a takedown notice for a work once with the expectation that the work never appear again on the same platform.[13]  Indeed, in support of its position that the DMCA needs strengthening, the Artists Rights Society argues that the current takedown provisions, contrary to Congressional intent, favor ISPs, who profit from infringing posts through listing fees, advertising, and/or increased traffic.[14]  To restore balance, the Artists Rights Society recommends that online service providers be required to pay a percentage of the quantifiable revenues received from an infringing third-party user to the copyright owner.[15]  The Artists Rights Society does not elaborate on how these fees would be collected and dispersed.

Taking a slightly different course from both their fellow creators and the ISPs, the American Photographic Artists (“APA”) propose turning the tables on the oft-anonymous infringers who are benefitting from, according to the APA, a “de facto immunity” under the DMCA.  This de facto immunity is the product of the high cost of pursing a copyright infringement claim and the potentially low damages return (particularly for unregistered works),[16] making the pursuit of infringers essentially pointless.  Although it does not appear from its comment that the APA is advocating for one particular measure to shift the risk of infringement, one possibility the APA discusses is requiring an infringer to reimburse the copyright holder’s costs spent on a takedown.[17]

As the Copyright Office weighs these competing interests, it will also need to keep in mind how evolving technology may continue to impact takedown proceedings.  We will keep you updated on developments as the Copyright Office prepares its report. — Stephanie Martinez

 

[1] 17 U.S.C. § 106; U.S. Const. art. I § 8 cl. 8.

[2] Many would argue the DMCA never worked well and was instead poorly thought out and poorly executed.  See Chris Mills, These Three Dumb Examples Prove that Copyright Is Broken, BGR (May 24, 2016), http://bgr.com/2016/05/24/dmca-abuse-copyright-issues/.

[3] Randolph J. May & Seth L. Cooper, Copyright ‘Notice and Takedown’ System Needs Fixing (May 9, 2016) http://thehill.com/blogs/pundits-blog/technology/279179-copyright-notice-and-takedown-system-needs-fixing.

[4] Google, Transparency Report, https://www.google.com/transparencyreport/removals/copyright/.  Requests sent to Google are to remove links from Google’s search results due to infringing content on the website, not to remove the allegedly infringing content from the site itself.

[5] See United States Copyright Office, Section 512 Study, http://www.copyright.gov/policy/section512/.

[6] See United States Copryight Office, Requests for Public Comments: Digital Millennium Copyright Act Safe Harbor Provisions, https://www.regulations.gov/#!docketBrowser;rpp=25;so=ASC;sb=title;po=0;dct=PS;D=COLC-2015-0013;refD=COLC-2015-0013-0002.

[7] Amazon.com, Inc., Section 512 Study: Notice Docket No. USCO-2015-7 and Request for Public Comment, p. 3.

[8] Id.

[9] Caroline Craig, DMCA ‘Reform’ Harbors Return of SOPA, InfoWorld (May 20, 2016), http://www.infoworld.com/article/3072456/internet/dmca-reform-bill-harbors-return-of-sopa.html.

[10] Id.; Jennifer M. Urban, Joe Karaganis, & Brianna L. Shofield, Notice and Takedown In Everyday Practice, 11 (2016), available at http://poseidon01.ssrn.com/delivery.php?ID=847004104083015079003097000087118126055092036006058054127082102102096125010084120011039049035031006028001088081018024096080127018007025078012087102086098102098094112018040048025114126122121121117028006069023030065090123077101074065106086070087025106064&EXT=pdf.

[11] See American Photographic Artists, Inc., Initial Response to Notice of Inquiry 78 F.R. 13094 (Docket No 2015-7) Section 512 Study: Notice and Request For Public Comment, p. 2.

[12] In fact, the Federation of the Phonographic Industry has reported that 94% of its takedown notices are for “recordings uploaded repeatedly” to sites already notified of the infringing posting.  Randolph J. May & Seth L. Cooper, Copyright ‘Notice and Takedown’ System Needs Fixing, The Hill (May 9, 2016), http://thehill.com/blogs/pundits-blog/technology/279179-copyright-notice-and-takedown-system-needs-fixing.

[13] TorrentFreak, Ten Websites Hit With 70M DMCA Complaints In A Year, TorrentFreak (May 29, 2016), https://torrentfreak.com/ten-websites-hit-with-70m-dmca-complaints-in-a-year-160529/.

[14] See Artists Rights Society, Comments of Artists Rights Society, p. 2.

[15] Id.

[16] See American Photographic Artists, Inc., Initial Response to Notice of Inquiry 78 F.R. 13094 (Docket No 2015-7) Section 512 Study: Notice and Request For Public Comment, p. 3.

[17] Id.

Protecting Your Brand In China Against Trademark Squatting

With its rapidly expanding economy, the largest middle class in the world, and significant manufacturing capacity, China can be a great new market for American businesses interested in global expansion or manufacturing goods for export in China.  Before expanding, however, American companies should first ensure that their brand is sufficiently protected from a common practice in China — trademark squatting.

Unlike the United States, China is a “first-to-file” country.  This means that, in order to accrue rights in a trademark in China, a company must be the first to file to register that trademark there.  This system is very different from the United States, where the senior user of a mark, regardless of registration, has rights.  In addition, the Chinese Trademark Office does not require an applicant to prove that it is using the applied-for mark before granting a trademark registration.  This system of first-to-file with no proof of use requirement allows unscrupulous individuals and entities to engage in the practice of trademark squatting, or registering Western brand names (or their Chinese-character equivalents) in China.  Trademark squatters in possession of a Chinese registration for a Western brand name will often either: (1) hold the registration hostage and demand large sums of money for a trademark assignment; or (2) sell cheap knockoff goods under the pirated trademark, leading the Chinese consuming public to link the Western brand with inferior products.

Unfortunately, many Western companies and famous individuals have experienced firsthand the consequences of trademark squatting in China.  One example is Nike and Michael Jordan’s line of Air Jordan shoes.  In 1993, Nike registered to protect the trademark JORDAN in English in China but neglected to file for the Chinese-character transliteration “Qiaodan.”  Several years later, Qiaodan Sports registered the Chinese trademark Qiaodan and began operating retail stores offering shoes and athletic wear under the Qiaodan mark, including selling shoes with a basketball player’s silhouette, similar to the silhouette found on Air Jordans.[1]  Qiaodon Sports also registered and used other marks commonly associated with the basketball player, such as the number 23 (Michael Jordan’s Chicago Bulls jersey number) and the names of Michael Jordan’s two sons.[2]  Currently, Qiaodan Sports operates approximately 6,000 retail locations in China, with many of its customers believing that Qiaodan Sports is endorsed by or affiliated with Michael Jordan.[3]  Upon learning of Qiaodan Sports in 2012, Michael Jordan instituted proceedings against the Chinese company.[4]  The Beijing Intermediate People’s Court, in finding for Qiaodan Sports, held there was insufficient evidence to conclude that Qiaodan referred to Michael Jordan.[5]  This ruling was upheld on appeal to the Beijing High People’s Court.

Companies interested in expanding into China can prevent trademark squatting by registering their English marks (if the company plans to sell goods in China using its English marks) as well as the Chinese-character equivalents.  Registering both the English marks as well as the Chinese-character equivalent forecloses the potential avenues trademark squatters might use to financially benefit from a Western company’s brand.  Registration can be sought either through Madrid extension filings or through a national filing with the Chinese Trademark Office.  — Stephanie Martinez

 

[1] National Public Radio, The Trademark Woes of Michael Jordan (And Many Others) In China (Aug. 16, 2015), http://www.npr.org/2015/08/16/430998321/the-trademark-woes-of-michael-jordan-and-many-others-in-china.

[2] Id.

[3] Id.

[4] Eben Blake, International Business Times, Michael Jordan Loses China Trademark Lawsuit to Chinese Knockoff Brand Qiaodan Sports (July 30, 2015), http://www.ibtimes.com/michael-jordan-loses-china-trademark-lawsuit-chinese-knockoff-brand-qiaodan-sports-2032080.

[5] Id.

Lead Generation: How Companies Mine for Your Data

Most internet users today recognize that internet searching and website visits lead to data collection and targeted advertising. For example, a search for coffee makers on Amazon is likely to lead to coffee maker advertisements on Facebook. What may be surprising, however, is the value companies place on your information, and the many ways data collectors mine for consumer data.  Data collection, or lead generation, is estimated to be a multi-billion dollar industry,[1] with the largest industry player claiming to have, “on average, 1,500 pieces of information on more than 200 million Americans.”[2]

Lead generators obtain your information through a variety of sources. Perhaps the most well-known source is cookies, bits of information that are downloaded to your browser and can be used to determine when and where you saw an advertisement or what your interests might be based on the sites you visit. Lead generators also use less obvious sources, such as online fillable forms, including mortgage pre-qualification forms and online dating questionnaires, as well as “fun” surveys.[3] For example, the Huffington Post recently reported that a Google search for “McDonalds Jobs” resulted in an advertisement for the website <everyjobforme.com>, which linked to a form promising the user that it would “find McDonald Jobs near you” and requested the user’s name, zip code, and mobile number.[4] Once the personal information was entered, a recruiter for for-profit colleges would call regarding “educational opportunities.”[5] In addition, legitimate companies often grant third parties behind-the-scenes access to their websites, allowing these third parties to observe a visitor’s movement within the site.[6] A 60 Minutes report revealed that popular sites such as the New York Times’ website, among others, allow third party observers.[7] Finally, many retailers sell the data collected on consumers’ purchases, allowing lead generators to better understand what goods consumers are seeking and how to more effectively market those goods to individual consumers.

Currently, lead generation is a relatively unregulated industry, with little oversight from federal and state governments. In a 2013 review, the U.S. Government Accountability Office found there was no overarching federal law governing the collection of data or consumer privacy rights.[8] Instead, lead generation companies are governed through a patchwork of federal and state laws, as well as agency enforcement and self-regulation within the industry. One agency active in monitoring the lead generation industry is the Federal Trade Commission (FTC), which works to protect consumers from deceptive business practices. The FTC has used its administrative authority to fine lead generation companies for deceptive advertising, including a recent multi-million dollar settlement with multiple companies accused of unlawfully selling data obtained from payday loan applications, including social security numbers.[9] Some in the lead generation industry, however, believe that current FTC marketing guidelines are not being applied effectively and in some cases may even encourage misconduct.[10] The FTC is likely to update its guidelines soon to address these concerns. We will report further developments as they occur. — Stephanie Martinez



[1] Federal Trade Commission, Follow The Lead, An FTC Workshop on Lead Generation (Oct. 30, 2015), https://www.ftc.gov/system/files/documents/public_events/684511/leadgeneration-presentationslides_0.pdf.

[2] Steve Kroft, The Data Brokers: Selling Your Personal Information (Mar. 9, 2014), http://www.cbsnews.com/news/the-data-brokers-selling-your-personal-information/.

[3] Id.

[4] David Halperin, For-Profit College Recruiter Hides Behind McDonalds Arches, Huffington Post (Mar. 1, 2016, 4:54 PM), http://www.huffingtonpost.com/davidhalperin/for-profit-college-recrui_b_9359434.html.

[5] Id.

[6] Kroft, supra note 2.

[7] Id.

[8] U.S. Government Accountability Office, Information Resellers: Consumer Privacy Framework Needs to Reflect Changes in Technology and the Marketplace (Sept. 25, 2013), http://www.gao.gov/products/GAO-13-663.

[9] Lexology, FTC Settles Charges with Data Brokers for Misuse of Consumer Data (Feb. 24, 2016), http://www.lexology.com/library/detail.aspx?g=2fa892c5-e828-4c28-8822-9505dc779005. The FTC has previously gone after other bad actors in the lead generation industry. In 2014 the FTC fined a mortgage lead generator $500,000 after it found that the company deceived potential borrowers with ads falsely claiming that borrowers could refinance their mortgages for free. Federal Trade Commission, Mortgage Lead Generator Will Pay $500,000 to Settle FTC Charges That It Deceptively Advertised Mortgage Refinancing (Sept. 12, 2014), https://www.ftc.gov/news-events/press-releases/2014/09/mortgage-lead-generator-will-pay-500000-settle-ftc-charges-it.

[10] Lexology, FTC Focuses on Lead Generation Practices In Higher Education and Ed Tech (Nov. 10, 2015), http://www.lexology.com/library/detail.aspx?g=5bd60940-c267-43f7-98cd-d712704d751b.

Common Mistakes to Avoid When Naming a Business

Starting a business is exciting, as is picking out a name (or, in legal terms, a trademark) for your new startup. The possibilities may seem endless, or you may have one specific name that you have your heart set on. In picking a name, entrepreneurs may seize upon a certain theme or pun or just wait for a name to pop into their head. If you plan to offer products or services under your new business name, it is essential to carefully consider your options before you dive into branding. These same principles apply to choosing a trademark for a new product or service as well. No matter how you pick your new name, here are some common mistakes to avoid:

1. Descriptive Names. New business owners often want their business names to tell people exactly what products or services they are selling. Own a coffee shop? You might name it Beans and Brews. A convenience store? You might name it In-and-Out. The problem here is that such names are likely to be in use by many other coffee shops and convenience stores, meaning that consumers will find it more difficult to remember your name (because it is not catchy or distinctive) or to find you (and not a competitor) in an online search. Perhaps more importantly, you are more likely to receive a nasty cease and desist letter from a similarly-named company demanding that you stop using the name. Instead of having to completely re-brand later or face potentially substantial legal fees to fight such opposition, try to think of a unique and distinctive name — one that stands out from the crowd from the beginning. Then, if you want to include something descriptive, simply add a tagline.

2. “Borrowing” Names. Whether intentional or not, entrepreneurs sometimes pick business names that are incredibly similar to the name of a previous employer, a business across the street, or a company that caught their attention in the past. Searching for name inspiration on the Internet may lead to clever results, but it can also be risky if someone else is using the same or similar name. Not only might this be trademark infringement, but if proven, such “borrowing” could result in a willfulness finding, significantly increasing the amount of damages the other party can seek in a lawsuit. When thinking about a business name, do not emulate others. Instead, brainstorm distinctive names that will help your business cultivate its own individual brand.

3. Failing To Fully Research a Name. A preclearance search is the foundation on which to build your brand. Performed by trademark clearance experts, a preclearance search scours the marketplace (and not just Google) to find other businesses and products that use the same or similar names as your intended business name. An intellectual property attorney then reviews the report and assesses the risk associated with using your desired trademark. That way you will know up front whether to proceed with the name you have chosen or to avoid major conflicts and go back to the drawing board. Pre-clearing lets you rest easy, knowing that your brand is yours to build into an empire. — Stephanie Martinez