Fair Use in the Internet Age

The House Committee on Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection held hearings today on Fair Use: its Effects on Consumers and Industry.

  • Mr. Peter Jaszi
    Washington College of Law
    American University
  • Mr. Gary Shapiro
    President & Chief Executive Officer
    Consumer Electronics Association
    Arlington, VA
  • Ms. Prudence S. Adler
    Associate Executive Director
    Federal Relations and Information Policy
    Association of Research Libraries
    Washington, DC,
    On behalf of: The Library Copyright Alliance
  • Mr. Jonathan Band PLLC
    Washington, DC,
    On behalf of: NetCoalition
  • Ms. Gigi B. Sohn
    President & Founder
    Public Knowledge
    Washington, DC
  • Mr. James V. DeLong
    Senior Fellow & Director
    IPCentral.Info Progress & Freedom Foundation
    Washington, DC
  • Mr. Frederic Hirsch
    Senior Vice President, Intellectual Property Enforcement
    Entertainment Software Association
    Washington, DC
  • Mr. Paul Aiken
    Executive Director
    Authors Guild, Inc.
    New York, NY

An archived webcast and witness and member statements are available here.
Much of the hearing focused on discussing the merits of HR 1201, The Digital Media Consumers’ Rights Act of 2005. HR 1201 would create a fair use exemption to the DMCA prohibition on circumventing digital rights protections schemes (aka DRM). In addition, the bill would authorize the FTC to require manufacturers and retailers to label copy protected CD’s.
Most of the witnesses who addressed the panel spoke in favor of this bill and in defense of the fair use right. Jaszi discussed the tradition of fair use within the Copyright Act and noted a number of policy arguments in favor of the fair use rights, particularly the fact that fair use prevents copyright from overwhelming the First Amendment. As the reach of copyright law is constantly expanding to provide more restrictions on uses than ever before, fair use matters.
Shapiro started off discussing how fair use ensures innovation. Without fair use, there would be no VCR, tape recorder, Tivo, or iPod. The information technology industry relies on fair use– fair use is all that protects inventors from an over-protected world. Because every use of digital content requires making a copy, fair use is especially important and needs to be strengthened. Americans should be able to use their property in any way they choose that does not harm others.
Band also noted that all actions in the digital world require making copies, including viewing web sites and replying to emails. Search engines depend on fair use in order to exist. Each major search engine copies a large portion of the world wide web every month under and opt-out scheme of implied consent. Kelly v. Arriba Soft found that search engine indexing is fair use and limiting this use would hurt the way we find information on the internet.
Adler discussed the relevance of fair use to the mission of libraries. Fair use works well because it is flexible, dynamic and inherently ambiguous. In addition to fair use by library patrons, librarians rely on fair use to create print and electronic reserves and to digitize print works. But when acquiring databases and electronic resources for collections, libraries license, rather than acquire like print material. License agreements are more restrictive than the scope of rights under fair use. Once technological controls are built-in to software, it is impossible for libraries to negotiate exceptions in license agreements.
Adler concluded by stressing the importance of libraries, who, rather tan publishers, archive copies for future uses. Fair use is an important safeguard on our nation’s interest in cultural information.
Sohn discussed how fair use rights are slowly being chipped away. Although consumers expect to use content when, how and where they want, the content industries have managed to restrict these uses in the name of preventing piracy. Under the current anti-circumvention law, it is illegal for an individual to copy songs from a copy-protected CD for personal use, shifting video from a DVD to view on an iPod, or removing malicious DRM “rootkit” software from a computer. Sohn asked the representatives to “reject the notion that your constituents are pirates and theives. They do purchase digital products when those digital products are avilable on the market.” In addition, she encouraged the representatives to reform the DMCA so that it permits circumvention solely for lawful purposes and clarify and strengthen the DMCA triennial review process.
Public Knowledge thinks that DRM is fine, so long as it is marketplace driven, not driven by legislation. FairPlay works in the marketplace, while Sony’s didn’t. The government should not mandate technological protection measures. DeLong agreed with applying a marketplace test to technology. But then, DeLong thinks a marketplace will sort out all problems with the copyright economy.
DeLong testified, “We don’t talk about the need to balance the interests of automobile manufacturesr and drivers. We assume that we can establish rules promoting markets and allowing the market to sort itself out.” Fair uses usually exist when the transaction cost of getting permission is out of proportion to all value to the user and detriment to the creator.
The internet is taking transaction costs out of the system.
DeLong credited DRM with creating marketplace solutions to things that used to have a cost. On the other hand, DRM imposes a cost on performing actions that the law has traditionally considered to be fair uses– uses either so important to the free spread of ideas or so trivial that the law is not concerned with imposing a cost. These are actions that have no monetary value, yet are to be part of a marketplace? Fair use and free use are not necessarily the same.
Aiken and Hirsch, not surprisingly, spoke against strengthening the scope of fair use.
In both his opening statement and questioning of the witnesses, Stearns focused on seeking a technological solution for the “fair use problem.” He thinks that technology should be able to come up with a magic bullet that would absolve Congress of its role in having to make difficult decisions about what activities should be encouraged and which activities prohibited. Stearns asked, “Why not make this the copyright equivalent of a race to the moon? Why shouldn’t we be able to technologically limit the number of copies?”
Impressionistic transcripts of the most interesting questions asked by the subcommittee follow in the extended entry.

I have a CD or DVD here in DC. Do I have a right to make a copy of a CD or DVD that I can use in my other home in Florida?
Jaszi: Yes.
Stearns: What about if I have a beach house, too?
Jaszi: So long as it is for your personal use, then yes.
Stears: Can I continue to make copies for my personal use forever?
Jaszi: So long as it is for your personal use.
Stearns: What about if I make copies for each of my children?
Jaszi: That is a debatable question?
Stearns: What about sharing libraries between two portable MP3 players?
Jaszi: Wholesale copying of music libraries is outside of the law, but for a single copy may be ok.
DeLong: This is solved in a market. If you want one copy, pay for one copy. If you want more copies, you should be able to pay for multiple copies. They will invent ways of doing this. 1. Why should the person who needs very light use subsidiize the family of somebody else? 2. Why should the law get involved in this?
Stearns: There must be some ind of way of solving this with a flag.
Shapiro: The AHRA allows making an unlimited number of copies of an original, but no copies of a copy.
DeLong: Fair use and free use are different things. Lets rely on a market, rather than central planners.
Schakowsky: Are libraries pushed into license agreements rather than buying books by publishers?
Adler: With the move from primarily print-based resources to electronic resources, the electronic resources are available only as licenses with a publisher.
Aiken: if there is a Google exception to copyright, then there is a search engine exception to copyright.
Burton: Should we outlaw black CD’s, blank tapes, and recorders? These can all be used to make copies of things. But the opponents of fair use would outlaw every copy. Why can’t we find a way to support creators and not outlaw usage? Is it possible to create and manufacture equipment that would technologically allow a small number of copies?
Shapiro: Under the AHRA, the equipment is designed to allow one copy off an original, but no copies off a copy and pays a royalty to copyright owners. [And look at the overwhelming success of DAT among the general public.]
Ferguson: How are consumers harmed by the current copyright environment? We can download songs for $0.99, buy a DVD for $15. How does DRM adversely affect fair use? WIthout DRM, consumers wouldn’t have these products to make fair use of at all? How does gutting §1201 help the consumer when these products may not be in the stream of commerce to begin with?
Sohn: The ability to make fair use is limited by the DRM management tools. PK does not oppose DRM, but the way in which those tools limit the ability to make fair use, there needs to make a narrow exception.
Ferguson: How is this a narrow exception?
Sohn: Pirates don’t rely on fair use. They will do what they do whether there is fair use or DRM or not. This will allow consumers to make use of products
Ferguson: I’m going to make a new website called Snoogle. It will be a complete copy of the Google technology. Why wouldn’t that be a problem?
Band: Well, that would be a violation of trademark law. It might be a trademark fair use, but would probably lead to consumer confusion in the marketplace.
Bono: Should this be enacted now?
Jaszi: Yes.
Shapiro: Never too early to do the right thing
Adler: Yes.
Band: No position– look at broadcast flag.
Sohn: yes.
DeLong: Give it another century
Hirsch: Wait and See.
Aiken: The Authors Guild has no position.
Boucher: Will allowing bypasses for a lawful use allow for piracy?
Shapiro: Don’t even understand why piracy is under discussion here. My favorite example is that I can’t fast forward through copyright notices and commercials at the beginning of a DVD.
Band: DeCSS can be downloaded from 300,000 sites on the internet to crack DVD encryption, but that hasn’t taken away from the growing DVD marketplace.
Boucher: HR 1201 clearly says that the only time a person may bypass a technogical protection is for a lawful purpose. If that person is bypassing for an infringing purpose, such as piracy, I see no validity for why 1201 would lead to more policy.
Hirsch: From an enforcement standpoint, we can’t be in everybody’s homes to figure out who is engaging in a lawful use or not. So we seek to prevent unlawful uses through technology.
Stearns: If we have a unified DRM system, maybe this could all be resolved without legislation.