Ooh LaLa – Copyright and Racy Content in VidAngel Case

Look, I get it. I’ve been there. One awards season while I was a movie critic, a few families gathered to watch Joe Wright’s lush adaptation of Leo Tolstoy’s Anna Karenina. Our children ranged from middle school to mid teens but we agreed that Tolstoy’s masterpiece exploring and contrasting love in its many forms would benefit them despite its racy content. It’s great literature, after all! We agreed to simply skip the racier scenes, primarily because they were not appropriate for the children but also because ain’t nobody want to watch that kind of thing with your mama in the room.

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I held the remote and when the key moment came, hit the button to skip the scene. But remotes have a mind of their own. The DVD advanced just a tiny bit. Let’s just say the Trans-Siberian railroad was picking up steam. The next press of the button went way too far, jumping some later scenes, so I pushed rewind which brought us back to the offending action, halfway through perestroika, if you get my drift. By this point, I was panicking and pushing all the buttons, which ended in Kiera Knightly, frozen larger than life, wearing only a strategic fur and a look of ecstasy, as if she’d just tasted particularly good borscht.

It was memorable. The children learned more than we intended. By attempting to skip the scene, I had indelibly imprinted it on the minds of everyone in the room. I understand the market for movies with all of Anna’s kareninanas edited out, as it were. I would have paid good money for a remote that wasn’t conspiring against me. That’s what Congress had in mind when it passed the Family Movie Act, which reduced copyright liability for technology to filter out content, provided that the copy of that content was authorized. The idea is that technology could take the place of mom’s remote skills or, even worse, dad barking “Cover your eyes!” whenever a, um, Bolshoi Ballet starts.

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A recent court case, however, clarified that the right to protect copyrights and control one’s own work did not include a streaming service that competes with the studios’ own release of works on streaming platforms. The U.S. Court of Appeals for the Ninth Circuit upheld the District Court’s injunction of VidAngel’s service, saying the Family Movie Act did not shield them from copyright liability. You can read the opinion here.

What VidAngel Did:

VidAngel was a subscription service that allowed home users to stream movies and TV shows, selecting what types of content they would like edited out of the work. Users could watch without swearing, say, or violence or sexual content. I say “was” because, although the company still exists, the methodology seems to have changed since the time at question in the lawsuit.

When movies or TV shows would release on DVD, VidAngel would legitimately purchase multiple copies of that DVD. They would then break the encryption on the DVD and upload a master copy to a computer. That copy would then be segmented and digitally prepared for different types of content to be edited and those segments would be uploaded to cloud storage.

Subscribers to VidAngel would purchase a physical DVD that was stored at VidAngel’s facility, then VidAngel would stream the cloud-stored version to them, editing as directed by the customer. After the customer finished watching, VidAngel would buy back the DVD from the customer for a slightly reduced price. While the DVDs technically were owned by the subscriber, they almost never physically left VidAngel and VidAngel sold and bought the same physical DVD over and over again.

If you think this is too cute by half, the court agreed.

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The Legal Quandry:

The primary question before the court was if the copy of the work from which the stream originated constituted an “authorized copy” under the Family Movie Act. VidAngel argued that because the process begins with an authorized copy, a lawfully purchased DVD, any stream of that content is authorized. The court said disagreed: A “filtering technology that made digital copies from lawfully purchased discs and then filtered them, as VidAngel does, is not” consistent with the definition of “authorized copy” because “beginning from” or “indirectly from” an authorized copy is not the same thing as an “authorized copy.”

The court also rejected VidAngel’s argument that their use of the works were protected by fair use, saying merely removing content does not sufficiently transform a work. “Star Wars is still Star Wars, even without Princess Leia’s bikini scene,” the Court noted, thrilling law nerds across the country. Finally, the Court noted that VidAngel was likely to lose on the issue of violating the anti-circumnavigation rules, which prohibit breaking encryption technology in certain circumstances.

Why VidAngel Was a Bad Idea:

VidAngel’s model opened up an enormous copyright loophole. The Court noted:

VidAngel’s interpretation would create a giant loophole in copyright law, sanctioning infringement so long as it filters some content and a copy of the work was lawfully purchased at some point. But, virtually all piracy of movies originates in some way from a legitimate copy. If the mere purchase of an authorized copy alone precluded infringement liability under the FMA, the statute would severely erode the commercial value of the public performance right in the digital context, permitting, for example, unlicensed streams which filter out only a movie’s credits

Disney Enterprises, Inc. v. VidAngel, Inc., No. 16-56843, 2017 WL 3623286, at *7 (9th Cir. Aug. 24, 2017)

In other words, if filtering something is the only fig leaf necessary to stream unauthorized content, unscrupulous players would quickly filter something inconsequential and claim the protection of the Family Movie Act. The District Court’s findings upheld this instinct. Some 49% of content streamed over VidAngel had no filters activated at all.

The Service Interfered with Markets

TV and movie studios carefully window their products to profit from the product. A movie may be in theaters, then offered on DVD, and then offered for purchase and download before it is ever cleared for streaming. This is based on careful market calculations and is the product of extensive negotiations and contracting with platforms. VidAngel effectively eliminated the ability of the studios to cater to different markets by offering streaming as soon as the product was released on DVD. Evidence that the service was being used as an end-run around the studio releases is in the above statistic that 49% of content was not filtered. In those cases, the users did not prioritize editing ability. They merely wanted to cheaply stream the content sooner than they would be able on other platforms. As the district court put it VidAngel interfered with copyright owners’ “basic right to control how, when and through which channels consumers can view their copyrighted works.”

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The Service Interfered with Free Contracting

In addition to muddying the waters of contracting for streaming services and DVD sales, the service potentially interfered with contracting between the distributors and the people who make the movies. Take the case of directors. In my life as a movie critic, I interviewed a big directors and let me tell you a good director loves the final cut of her movie. The more artisan a director, the more she puts herself into a film. She sweats each cut, lives and breathes each sound edit, lovingly caresses the color balances into place. The more clout a director has, the more likely it is that she has negotiated for veto power over any derivative products made from the film. She may love each of the f-bombs in the movie like her own child and retain the power to stop an edited version from being released. She may think the sex scenes absolutely integral to the artistic vision of the movie. “Organic” is a word directors use a lot. They like characters or scenes or dialog to be “organic.” Cutting their beloved baby is never “organic.” One director may be fine with the film being edited for TV, for instance, and another may negotiate the right to deny that happening.

The studio, or whatever entity retains the copyright ownership, is able to comply with this contract element through its ability to grant or deny creation and performance of derivative works. The VidAngel model removed the right to deny, which then removed the ability to comply with existing contracts.

At the margins, free reign to edit and perform content without permission would result in some of that content not being made in the first place. Sure, James Gunn might still agree to do Guardians of the Galaxy, but perhaps Edgar Wright would not want to see his carefully crafted and stylized Baby Driver sliced into a million pieces. Artists are picky that way sometimes.

The Service Allowed VidAngel to Profit off Others’ Work

This is the bottom line. VidAngel was selling movies and TV shows it did not create and did not license. The fact that it did allow users to view works with a few swear words edited out does not change the reality that the entire business model revolved around selling a product created by others, without permission. The directors, actors, writers, camera operators, stunt people, set builders, light stringers, and key grips (whatever that is) deserve to be paid for their work. If there’s money to be made, it should go into their pockets. The ability to profit from an artistic work is not only fair, but enables the creators to make the next work. If Game of Thrones stopped making money for HBO, there would never be a season eight and we’d never know what Tyrion has up his sleeve.

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Allowing families to edit content may be a noble goal, but this was not the way to go about it.

Study – Creators Frustrated with DMCA (with Pandas!)

The evidence is increasingly clear: The DMCA needs work.

Also, here to help explain are some panda gifs.

A new study by the Copyright Alliance shows that creators have frustrations with the Digital Millennial Copyright Act (DMCA) system for dealing with copyright infringement on the internet.

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The Copyright Alliance surveyed 1,362 creators about their experience with the DMCA. Some of the most interesting results are:

  • 52.2% of creators monitor the internet for infringement in some way.
  • 37.4% do not monitor for infringement.
  • Yet (and this is important) only 2.5% say they do not mind if their work is used online without permission.

There is an obvious gap between 2.5% who are happy to give their work away and 37.4% who may not be happy to give it away but don’t monitor for infringement. The study suggests an explanation: Creators lack information on how the DMCA works or perhaps it’s too difficult and time consuming to merit the time.

There are lots of other interesting findings in the study – you should read it – but the other key finding is that 47.6% of respondents say that the DMCA is ineffective. That’s a pretty high level of dissatisfaction with a system that was supposed to safeguard creators’ rights. Not quite a panda-playing-in-the-snow level of happiness.

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This study dovetails with one I worked on with the Arts and Entertainment Advocacy Clinic at my law school, George Mason Law (where I’m a 3L and ready to graduate!). In that study, student lawyers took on the role of monitoring and reporting infringement online for several works.

Probably the most shocking finding of our many hours searching for and responding to infringement is the astounding level of malicious schemes masquerading as sites to download these works. In other words, bad guys dangle the lure of a download to steal personal information, credit cards, or to install malware on computer of the consumer. Many times, in fact, the promised download was not even on the site, something one discovered only after clicking through endless screens and downloading who knows what software.

47% of the sites purporting to offer the work were instead malicious in some way.

It’s a dangerous world out there.

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With this added dimension in the mix, we were able to confirm removal of only 16% of infringing content from the internet using the DMCA.

You can read the George Mason Law study here.

The studies show the DMCA is not working as it should, especially for individual creators just trying to make a living off their art. More research is needed, but even more, the DMCA needs updates. The pandas, though, are fine.

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SONA Fights On Against Government Overreach After Judge’s Smackdown on DOJ Over Music Licensing

Last week, federal Judge Louis Stanton delivered a smack-down on the Department of Justice (read the order here) but a suit brought by songwriters is waiting in the wings.

In a declaratory judgment, Judge Stanton sided with BMI and rejected DOJ’s proposed rule change forcing vast changes in the way copyright owners license and get paid for their work. The DOJ rule mandated a change from fractional licensing to 100% licensing. In case there was any doubt about Judge Stanton’s ruling, the opinion ends with an epic, unequivocal statement: “The Consent Decree neither bars fractional licensing nor requires full-work licensing.”

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Fractional licensing works like this: Bars, stadiums and online streaming services, among other outlets, buy licenses from organizations like BMI and ASCAP (called in the industry PROs) to be able to play a list of songs licensed to the PRO. So if you’re in a smoky bar and hear “Smoke Gets in Your Eyes,” it’s because ASCAP or BMI represents someone who owns at least a part of the copyright to the song. BMI collects from the bar the fee for the portion of the song that their member owns and passes that along to the member. You get to feel melancholy on a Friday night, the bar makes another drink sale, the artist gets paid for his work, and everyone is happy.

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The DOJ rule change would have altered this arrangement, which has been the industry practice for a long time, so that any one copyright owner can license the song at 100% of its value to one PRO and another owner could license at 100% to a different PRO. Then someone, maybe the copyright owners, have to get the percentages of fees to the other owners.

When songs have not just a few but dozens of copyright owners, you can imagine the mess. Copyright owners worry this would cause a confusion, an increase in overhead as all these payments are figured out, and decrease their negotiating power, resulting in lower revenue overall as the values of the licenses plummet.

The basic problem is more fundamental. Over decades of music creation, songwriters, performing artists, labels, and distributors like PROs have negotiated and signed contracts between themselves that govern these things. They contracted based on an understanding of how the system would work, and tightly negotiated those contracts with fractional licensing in mind. The DOJ rule would have overturned thousands, nay millions, of private contracts between parties who bargained for exactly what they wanted.

Government doesn’t get to do that.

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Plus, when songwriters collaborate now, they don’t have to stop and think about PRO affiliation. They just pick the best collaborator to get the job done. If the DOJ’s rule is implemented, songwriters would have to consider with which PRO a collaborator has signed. If government action limits who artists can work with, not only is that a ridiculous intrusion into private contracting, but will end up creating a less vibrant music universe for listeners. Bad for artists, bad for society.

Freedom to contract is the premise behind another lawsuit on the matter, filed by the grass-roots organization Songwriters of North America (SONA). While the BMI lawsuit was based on asking the court to interpret the consent decree that governs BMI and ASCAP licensing agreements, the SONA lawsuit has a completely different legal theory. (You can read the SONA complaint here.)

Despite the assertions of Public Knowledge, neither count in SONA’s lawsuit is a copyright claim. Instead, the first puts forth a Fifth Amendment claim that DOJ’s proposed actions would take property from affected parties without due process. People have a property interest in both the contracts that the rule change would overturn and the underlying copyright interests. The Fifth Amendment protects against government taking these interests with the flick of pen.

The second count is an administrative law claim, that the DOJ rule change violated the APA (Administrative Procedure Act) by acting outside of the scope of the DOJ’s authority and was adopted without procedural safeguards, among other things. SONA is asking the court to declare the rule change unconstitutional under the Fifth Amendment and unlawful under the APA.

At this point, it’s not clear whether the DOJ will fight back against Judge Stanton’s appeal or let the matter stand. If the DOJ rule change is thrown out because of Judge Stanton’s reading of the consent decree, the SONA suit may well be moot. But if the case continues, SONA has a very good case against government overreach.

IMG_4988About the Author: Rebecca Cusey is a writer and law student. She writes about movies and other things as a Senior Contributor for The Federalist and as a Policy Fellow at the American Conservative Union. She studies law at Antonin Scalia Law School at George Mason as a third-year student focusing on Intellectual Property. She lives near Washington, DC with her adorable husband and dashing children. 

Follow Rebecca on Twitter: @Rebecca_Cusey

All the Legal Stuff About Donald Trump using Queen’s “We Are the Champions” You Didn’t Want to Know

The iconic rock band Queen doesn’t like Donald Trump. Sadly for Queen, he likes them.

Is This the Real Life? Is This Just Fantasy?

Trump used their super famous song “We are the Champions” to walk onstage at the Republican National Convention.

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Bombastic and crass in a particularly Trumpian, 80s wanna be cool way? Sure. Illegal? Probably not.

Queen responded (like your grandma who always signs her Facebook posts “-Grandma”) with:

This isn’t the first time. Maybe he’s just a poor boy, he needs no sympathy, but a month ago, Queen’s Brian May blogged about his anger that Trump uses his songs.

Buddy You’re a Boy Make a Big Noise

As far as permission to use the song goes, Queen got blood on its face, huge disgrace. According to Sean Spicer, a big honcho at the RNC, they got a license.

Campaigns, like other big events, buy licenses from organizations that maintain an extensive roster of famous songs. The organization lists songs by its members, the owners of the copyrights on the music. The organization then collects the licensing fee, passes that along to the copyright owners, and enforces licensing violations on behalf of the copyright owners. Easy peasy. The system works quietly behind the scenes and everyone is happy, or at least not unhappy enough to complain much. ASCAP and BMI are the two big players in this country. Sure enough, “We are the Champions” is licensed by BMI, charmingly to someone named “Mercury Frederick.”  It’s always good to confirm things that should be route with the Trump campaign, but I think we can safely assume by BMI’s silence that some responsible party at the RNC did, indeed, license the music. If so, Trump is not in violation of the copyright.

God Knows, God Knows I Want to Break Free

Even if the campaign did not buy a license, whether or not the use of the song would fall into the “Fair Use” exception is open to debate.

Fair Use is a defense to copyright violations. Basically, if someone sues a person for using their song, when that case gets to court, the person being sued will say “Yes, I used the song, yes it belongs to this other person, but it’s ok because it’s fair use.” And if the judge or jury agrees, another copyright case bites the dust.

America has broad fair use standards in comparison to much of the world because America values free speech to the extent of stepping on the toes of copyright owners. This has only gotten stronger in recent years, with the Internet being the Wild Wild West of copyright infringement under the banner of fair use, but I digress.

Judges look at four factors when considering fair use: 1) the purpose and character of the use, 2) the nature of the copyrighted work, 3) the amount and substantiality of the portion taken, and 4) the effect of the use upon the potential market.

Because campaigns are (at least until Trump) shy about negative publicity, these factors haven’t been fully tested in court in the context of political campaigns, but they likely weigh in favor of use of snippets of songs by a campaign. First, the nature of the use is political speech, which is the type of speech passionately protected by First Amendment caselaw. Secondly, the campaigns tend to use just portions of the songs for the walk on. Nobody wants to sit through all five minutes of “We are the Champions” before listening to Trump blather, I mean, speak. So the entire song is not used, which is a big factor. Finally, it would be hard to argue that using a portion of a song in a campaign somehow cuts into the sales of the song, which is another big factor.

Pressure Pushing Down on Me, Pressing Down on You

Probably the real problem to Brian May and the rest of Queen is the very notion of being associated with someone like Trump. They’re in the terror of knowing what [Trump] is about, watching some good friends screaming “Let me out.”

This is more of a trademark issue than a copyright issue. There are fancy legal terms associated like “Lanham Act” and “Right of Publicity,” but the basic crux of the issue is whether or not the use of the song would trick people into thinking the band supports the candidate. Think of it in terms of purses. If I stick a Gucci label on a knock-off purse, I’m violating the trademark because a purchaser will think that purse came from Gucci. (Or if they bought it on a street corner in New York, they won’t think so but maybe their friends will.) I’m basically stealing the good name of Gucci and using it to my own ends.

For a band or celebrity to sue under this theory requires them to convince a jury or judge that the people listening in the crowd were confused into thinking that Queen endorses Trump. That seems like a long shot in this context, don’t you think?

Carry On, Carry On As if Nothing Really Matters

An interesting wrinkle (interesting at least to copyright nerds) is that Queen is a British band. Just as copyright law in America tends to bend in the direction of encouraging free speech, copyright law in England has a slightly different flavor. They have something called moral rights, which do not exist here. This concept gives the copyright holder much greater control over the association of their work, protecting the reputation and person of the copyright holder. This includes the right to be credited when the work is used and the right to object to derogatory treatment, distortion, or mutilation of the work.

Queen would probably feel that Trump’s use of a portion of their song is mutilation of their song.

I am not a scholar of British law, so I do not know if these laws would apply to Trump’s use of Queen’s songs were they occurring in the UK, but I’m sure the thinking informs the background of Brian May’s objections.

 

Apple Patents Super Mega On the Fly Copyright Infringement Blocker

Ok. That’s not what they call it. But that is essentially what it is.

Apple patented technology that allows venue owners to use an infrared device that would interact with the iPhone camera and stop people from recording or taking photos.

It’s easy to see who would want this. Adele, that’s who. She seems like she would be the first in line to stop people from bootlegging her concerts.

Instead of using the DMCA to police YouTube, Vimeo, and such sites after the fact, this would enable Adele to belt out “Hello” and block it from being recorded at the outset.

With the rise of live streaming apps like Periscope, you could see how a copyright owner would want this even more. These apps make it possible for someone – anyone – to livestream a concert to thousands who didn’t bother to buy a ticket. This technology could conceivably stop that.

There are serious concerns, though. It’s not hard to imagine situations where such technology would be used on behalf of the dark side. Blocking the bootlegging of copyrighted music or video is one thing. Blocking phones from recording a protest is another. And it’s not hard to imagine police departments having mobile infrared devices to stop people from recording encounters with citizens. That’s just in the United States. Putin would probably put one on every street corner in Russia.

The second issue, of course, is safety. The same device that blocks us from live streaming that Led Zeppelin tribute band would also block concert goers from sending photos and video to police should a catastrophe or terrorist attack happen. And what about apps that use the camera, like barcode scanners or translators?

Finally, and I suspect Apple knows this deep inside their little hearts, blocking the camera would be a sure way to get droves of people to buy Droids. In order for this technology to work, it would have to be universal. The only way to make it universal would be to pass a law requiring all cell phones to have the technology.

Some of these issues could be solved with legislation and/or court cases, in the ongoing march of technology and free speech.

It’s an intriguing idea, one that probably pleases copyright owners from Lin-Manuel Miranda on Broadway to Taylor Swift playing the Hollywood Bowl. Protecting your work at the outset makes sense instead of playing whack a mole after the fact, but we’ll see if it sees the light of day or languishes at the PTO with Apple’s other red headed stepchild patents.

Read more, including Forbes raising the issue of securing secret places from spies with this technology.

Photo: Manel Torralba/Flickr Creative Commons