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Copyright Law Changes that May Affect You
The Public Domain Takes a Holiday
Revenge of the Silent Macarena
No More Little Black Boxes
Turn On, Tune In, Avoid Infringement
You've Got Bail
Pay to Play
Pirates Ahoy

From the Nolo.com Trademarks & Copyrights Center

Congress passed new copyright laws in 1998. You may find a few surprises in the new laws.

Congress passed a lot of copyright legislation in 1998, reflecting the lobbying efforts of many special interest groups.

Whether you are an Internet service provider, boat designer, or someone who regularly trolls the public domain, you'll find a few surprises. Below is a scorecard.

The Public Domain Takes a Holiday: The 20-Year Term Extension

Winners: copyright owners
Losers: the public

With many priceless catalogues on the brink of falling into the public domain--for example, animated features of Mickey Mouse and Winnie the Pooh and the music of George Gershwin--copyright owners such as Disney and Time-Warner petitioned for 20 more years of copyright protection. The result was enactment of the Sonny Bono Copyright Extension Act, which extends the time period during which copyrighted works are protected. Extending copyright protection harmonizes our laws with European countries where copyright owners already enjoy longer protection. In summary:

  • For works created on or after January 1, 1978, the copyright term is life of the author plus 70 years (instead of life plus 50 years).
  • For works for hire (and works published anonymously and pseudonomously), protection is extended from 75 to 95 years.
  • For unpublished works and works in their renewal terms, protection is extended for an additional 20 years.
  • No expired copyrights will enter the public domain until 2019.

Where to learn more: The text of this Act is downloadable at the Copyright Office Website at http://lcweb.loc.gov/copyright. Click on "The Copyright Term Extension and Music Licensing Act."


Revenge of the Silent Macarena: The End of Small Business Music Royalties

Winners: estaurants, bars and retail establishments; the National Restaurant Association
Losers: songwriters, performing rights societies (ASCAP, BMI, SESAC)

Previously, businesses using anything larger than a home stereo system had to pay songwriters for the right to play the radio or television during business hours. These payments, known as performance licenses, were paid to performing rights societies collecting the money on behalf of songwriters. The National Restaurant Association has been lobbying for years to change how these rules apply to small businesses. As part of this effort, in 1995 the NRA exploited the strange tale of a girl scout troop performing the silent Macarena because a performance license hadn't been paid.

Under new rules which are tacked on to the term extension law described above, restaurants and bars under 3,750 square feet or retail establishments under 2,000 square feet who play the radio or television in their establishments won't have to pay fees. Regardless of size, all restaurants, bars and stores will be exempt from paying fees if they have no more than six external speakers (but not more than four per room) or four televisions measuring 55 inches or less (but not more than one per room). These rules only apply for establishments that play radio and television. Establishments that play pre-recorded music such as compact discs will still be subject to licenses. Some legal experts have argued that the small business exemption may violate international treaties and a court challenge to the licensing exemption is expected.

In addition to these provisions, the Copyright Term Extension and Music Licensing Act ensures that disputes of these fees can now be heard in all 12 federal circuits. Before the Act, challenges to performing rights fees could only be filed in one court in New York City.

Where to learn more: The text of this Act is downloadable at the Copyright Office Website at http://lcweb.loc.gov/copyright. Click on "The Copyright Term Extension and Music Licensing Act." For a copyright owner's view of this law, review the ASCAP commentary at http://www.ascap.com/legislative/legislative.html.


No More Little Black Boxes: Congress Passes Digital Anti-Piracy Measures

Winners: entertainment industry, copyright owners, makers of anti-piracy devices, the Macrovision Corporation
Losers: electronics manufacturers

In order to transact commerce in the "digital environment," the entertainment industry is expected to rely heavily on anti-copying systems--for example, systems that scramble digital signals or prevent second generation copying (that is, you can copy a work once, but not twice). In addition, copyright owners are planning to implement a system of embedded copyright management information (CMIs or "digital watermarks") in their copies. These CMIs will identify the copyright owner and provide information about the work.

To prevent the circumvention of these systems, Congress passed Title I of the Digital Millennium Copyright Act (the "DMCA"). This legislation outlaws "little black box" technology. A little black box is any program or device that undoes the copy-protection systems installed by the entertainment industry. Or as it's officially described, it's anything that exists primarily to "avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner." There are criminal and civil penalties for those who make and market this technology. The prohibition against little black boxes goes into effect immediately. Under certain conditions, law enforcement agencies are exempt from these requirements.

Title I of the DMCA also prohibits the removal of CMIs. There are some exemptions to these CMI requirements for analog and digital broadcasters, libraries, archives, and educational institutions. Newly manufactured analog tape manufacturers must now accommodate copy control systems and the Macrovision Corporation's anti-piracy system is expected to become an industry standard.

Where to learn more: The text of this Act is downloadable at the Copyright Office Website at http://lcweb.loc.gov/copyright. Click on "The Digital Millennium Copyright Act" and review Title I.


Turn On, Tune In, Avoid Infringement: Right of Computer Repair Person to Make Copies of Programs

Winners: software service industry
Losers: customized operating system software designers

In the early 1990s a computer repair firm was sued by Mai Systems, a software company. The repair company had fixed a client's computer and in the process, had activated operating and diagnostic software created by Mai Systems. (When a computer is activated, certain software is automatically copied into the machine's random access memory, known as RAM.) Mai argued that the repair company, since it wasn't the owner or lessee of the computers, had no right to activate the software, even for purposes of repairing the computer hardware. A federal appeals court agreed and ruled that the computer repair company had infringed Mai's software. (MAI Sys. Corp. v. Peak Computer, 991 F. 2d 511 (9th Cir. 1993)). The ruling made computer repair companies liable any time they turned on a client's computer.

In order to clarify this situation, the computer repair industry lobbied for passage of Title III of the DMCA which ensures that the lawful owner or lessee of a computer machine may authorize an independent service provider--a person unaffiliated with either the owner or lessee of the machine--to activate the machine for the sole purpose of servicing its hardware components. In other words, a computer repair company is no longer liable for infringement simply by turning on a client's computer.

Where to learn more: The text of this Act is downloadable at the Copyright Office Website at http://lcweb.loc.gov/copyright. Click on "The Digital Millennium Copyright Act" and review Title III.


You've Got Bail: Congress Limits Liability for Internet Service Providers

Winners: entertainment industry, copyright owners, Internet service providers
Losers: Internet pirates

During the past few years, court cases have failed to clearly define when an Internet Service Provider (ISP) was liable for infringement committed by an online user. Congress removed the mystery for online providers by limiting the ISP's financial damages in the event an infringing copy is offered online. Both copyright owners and ISPs claimed a victory by the enactment of the DMCA.

In general, an ISP won't have to pay monetary damages when:

  • the ISP is acting as a conduit for an infringing transmission
  • the ISP obtains no financial benefit from the infringement
  • the ISP's system caching meets certain conditions
  • the ISP does not have actual knowledge or awareness of facts indicating infringing transmissions, and
  • upon learning of infringing transmission, the ISP acts quickly to remove or disable access to the infringing transmission.

In addition to these requirements, the ISP must also establish an agent for receiving notice of infringement. The Copyright Office has established interim rules for establishing an agent.

Where to learn more: The text of this Act is downloadable at the Copyright Office Website at http://lcweb.loc.gov/copyright. Click on "The Digital Millennium Copyright Act" and review Title II. You can also view the rules regarding establishing an agent for receiving notice of infringement at http://lcweb.loc.gov/copyright/onlinesp.


Pay to Play: License Fees for Digital and Webcast Transmissions

Winners: music industry, some digital broadcasters
Losers: radio simulcasters and some digital broadcasters

In 1995, the Digital Performance Right in Sound Recordings Act gave record companies a "performance right" in digital audio transmissions. This entitled record companies to get payments when a subscription digital broadcasting entity (such as a cable radio service) played a digital recording.

However, technology changed quickly and in 1997, the record companies attempted to modify the 1995 Act. Digital broadcasters such as Broadcast.com and Liquid Audio reached a compromise in Title IV of the DMCA. Webcasters are now entitled to transmit performances if they pay a statutory license. A statutory license is an automatic or compulsory license in which the webcaster doesn't have to ask the record company for permission. Instead, the webcaster simply pays the fee provided by law. In addition, webcasters obtained an exemption allowing them to make single copies of songs necessary in webcasting (known as "ephemeral recordings").

The rules to qualify for the statutory license are lengthy and include requirements such as:

  • the digital broadcast cannot be interactive
  • the broadcast cannot activate remote recording devices, and
  • during a three-hour broadcast period, a site cannot program more than three songs from a single album, nor play two songs in a row from a single album.

Local radio stations simulcasting their signal online are required to follow a simpler set of rules and pay a licensing fee. However, the National Association of Broadcasters has already indicated its opposition to this provision by announcing that its members have no intention of paying fees for simulcasting their signal online. A court battle is expected.

Where to learn more: The text of this Act is downloadable at the Copyright Office Website at http://lcweb.loc.gov/copyright. Click on "The Digital Millennium Copyright Act" and review Title IV. An explanation of the digital broadcasting rules can be found at http://www.digmedia.org.


Pirates Ahoy: Congress Protects Boat Designers

Winners: boat designers
Losers: manufacturers who steal boat designs

Ten years ago, the Supreme Court invalidated state law protection for boat designs. Bonito Boats Inc. v. Thundercraft Inc., 489 U.S. 141 (1989). As a response to that ruling, Congress passed the Vessel Hull Design Protection Act which created a new form of federal intellectual property protection for designers of boat frames or "hulls." (The hull includes the deck but does not include masts, sails, yards, and rigging.) To qualify, the design must be original and not dictated solely by a utilitarian function. Protection is for ten years and there is a new form of notice required: a "D" in a circle, or the words "Protected Design" with the year when protection commenced and the name of the owner. The rules of boat hull registration and the registration process are administered by a special Copyright Office Administrator. Why is this form of protection included in the copyright law? Chalk it up to special interest lobbying.

Where to learn more: The text of The Vessel Hull Design Protection Act is downloadable at the Copyright office Website at http://lcweb.loc.gov/copyright. Click on "The Digital Millennium Copyright Act" and review Title V.


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