Rep. Boucher Introduces FAIR USE Act

February 27, 2007. Rep. Rick Boucher (D-VA), Rep. John Doolittle (R-CA), and Rep. Zoe Lofgren (D-CA) introduced HR 1201 [PDF], the "Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007" or "FAIR USE Act".

Rep. Rick BoucherRep. Boucher (at right) and Rep. Doolittle introduced a bill in the previous Congress that was also numbered HR 1201 (109th Congress). It was tiled the "Digital Media Consumers' Rights Act of 2005". The two Representatives also had a similar bills in the 107th and 108th Congresses. However, the just introduced bill has new language bill, but not a substantially different purpose or likely effect.

Moreover, this bill as introduced contains enough provisions to insure that a powerful coalition of copyright based industries will organize in effective opposition, as in previous Congresses.

Moreover, Rep. Boucher has abandoned the pretext that the bill is a consumer protection bill, rather than a copyright bill. Hence, this bill will go to the House Judiciary Committee (HJC), and its Subcommittee on Courts, the Internet, and Intellectual Property (SCIIP). The SCIIP is chaired by Rep. Howard Berman (D-CA), a leading advocate of the audio and video content industries.

The primary provisions of both the previous bills, and the just introduced bill, are amendments to 17 U.S.C. 1201, to create a exceptions to the ban on circumvention.

Section 1201(a)(1) provides, in part, that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title."

Section 1201(a)(2) provides, in part, that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that -- (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title ..."

The key provision of the previous version of the bill was to provide that "it is not a violation of this section to circumvent a technological measure in order to obtain access to the work for purposes of making noninfringing use of the work". This language is not in the just introduced version of the bill.

However, the just introduced bill contains other exceptions to the ban on circumvention. The numerous exceptions enumerated in the current bill would have a similar effect to the previous bills.

The bill would also revert back from the MGM v. Grokster standard to the Sony v. Universal standard for hardware devices. It would also limit the availability of statutory damages for secondary infringement.

Exceptions to the Ban on Circumvention. The bill would add two new subsections (F) and (G) to Section 1201(a)(1). Both of these would provide further exceptions to the ban on circumvention.

First, the new subsection (F) would provide that "The prohibition contained in subparagraph (A) shall not apply to a person by reason of that person's engaging in a noninfringing use of any of the 6 classes of copyrighted works set forth in the determination of the Librarian of Congress in Docket No. RM 2005-11, as published as a final rule by the Copyright Office, Library of Congress, effective November 27, 2006 (71 F. R. 68472 (Nov. 27, 2006))."

Section 1201 also requires the Copyright Office (CO) to conduct a rulemaking proceeding every three years to designate exemptions to the anti-circumvention provisions.

The CO published a notice in the Federal Register (FR) that announces, describes, recites, and sets effective dates, for this rule. The effective date of this rule is November 27, 2006. It remains in effect until October 27, 2009. See, FR, November 27, 2006, Vol. 71, No. 227, at Pages 68472-68480.

While the Copyright Office's rule remains in effect for three years, the proposed statutory language would make these six exceptions permanent.

See also, story titled "Copyright Office Releases DMCA Anti-Circumvention Exemptions" in TLJ Daily E-Mail Alert No. 1,494, November 27, 2006.

These six exemptions relate to the use of rootkits on CDs and DVDs, e-book controls that affect the read aloud function, programs protected by dongles, programs that enable cellphones to connect to a wireless network (where circumvention is for the purpose of connecting to a network), programs and games in obsolete formats, and audiovisual works in university libraries.

Second, the new subsection (G) provides six additional exceptions. These are as follows:

The fifth item, as it applies to "news reporting", is currently hypothetical. There is currently no record of access controls and the legislative ban on circumvention being used to prevent reporters from reporting, and publishers from publishing. Although, it is not unreasonable for Rep. Boucher to anticipate that this tactic will be employed in the future. It may also be the case that this is a class of circumvention that the courts would find to be protected by the First Amendment's "speech, or of the press" clause. Albeit, there are no cases on point.

The fifth item, as is applies to "scholarship", would create a huge loophole in the anti-circumvention regime for any publications consumed by schools and universities. The fifth item, in the context of "criticism", approaches the concept of creating a general fair use exception to the ban on circumvention. The book publishing and news industries, in particular, are likely to oppose these provisions. Similarly, the second item, regarding content skipping, and the third item, regarding circumvention by home networkers, will incur the wrath of the video and audio content industries. Moreover, allowing circumvention for all of these purposes would render the ban on circumvention ineffective. It is these sorts of provisions that prevented previous versions of Rep. Boucher's bills from moving in previous Congresses.

Limitation on Damages for Secondary Infringement. The bill would amend 17 U.S.C. 504(c)(2) by adding the following language: "The court shall remit statutory damages for secondary infringement, except in a case in which the copyright owner sustains the burden of proving, and the court finds, that the act or acts constituting such secondary infringement were done under circumstances in which no reasonable person could have believed such conduct to be lawful."

The bill does not define the term "remit". Its usual meanings in law are either to refrain from enforcing or collecting, or to give back.

The bill does not define the term "secondary infringement". For example, the bill does not provide whether or not the term is equivalent to vicarious infringement, whether or not it encompasses contributory infringement, whether it would also include violations of Section 1201(a)(1) and (2), and whether it includes liability based upon an agency relationship.

However, Rep. Boucher wrote in a summary of the bill that this term includes "contributory infringement, inducement of infringement, vicarious liability, or other indirect infringement".

By amending Section 504(c)(2), which pertains to "statutory damages", and by using the words "statutory damages", this provision would appear not to affect awards of actual damages, profits, costs, or attorneys fees. Rep. Boucher wrote in his summary that "actual damages would continue to remain available to a person harmed by secondary infringement".

Also, this section of the bill contains no limitations upon the availability of injunctive relief.

Rep. Boucher explained the rationale for this provision in his summary. "Congress developed the statutory damages award process in a world of physical works, principally paper and vinyl. Today, in a world in which silicon is the principal medium of storage, statutory damages can be so large and disproportionate that  entrepreneurs and consumer electronics and information technology companies are declining to bring new technology to market out of fear that they could be bankrupted by an adverse finding of secondary liability--even in cases in which they believed on the advice of counsel that their new innovative hardware or software products would be found legal if they survived costly litigation with its highly intrusive discovery."

Sony v. Universal and MGM v. Grokster. The bill would add a new subsection (g) to 17 U.S.C. 501, which pertains to infringement of copyright. The new language is as follows: "CERTAIN HARDWARE DEVICES. --- No person shall be liable for copyright infringement based on the design, manufacture, or distribution of a hardware device or of a component of the device if the device is capable of substantial, commercially significant noninfringing use."

This would codify, in part, for hardware devices, the Supreme Court's 1984 opinion in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, which held that Sony did not contributorily infringe with its Betamax technology. This 5-4 opinion, has been widely praised by consumer electronics (CE) companies, criticized by some others, and modified by the Supreme Court.

Notably, this bill does not attempt to codify the Supreme Court 2005 unanimous opinion [55 pages in PDF] in MGM v. Grokster. See, story titled "Supreme Court Rules in MGM v. Grokster" in TLJ Daily E-Mail Alert No. 1,163, June 28, 2005. Rather, it would have the effect of overturning or minimizing the effect of MGM v. Grokster in the context of hardware devices.

Rep. Boucher wrote that this provision would "provide greater legal certainty to legitimate CE companies bringing new products to market in the wake of the uncertainty created by the" opinion in MGM v. Grokster. This suggests that Rep. Boucher is dissatisfied with the MGM v. Grokster standard, and wants to legislatively revert back to the older Sony v. Universal standard for hardware devices.

The proposed language would only affect hardware devices. Rep. Boucher added in his summary that this provision "is not intended to have any negative effect on the continued availability and application of the Betamax standard with respect to services and software products or to non-commercial activities." The bill does not define the term "hardware device".

It should be noted that MGM v. Grokster was a peer to peer service (P2P) case, rather than a hardware device case. Hence, under this bill, P2P services would remain subject to the MGM v. Grokster standard.

Legislative History of Rep. Boucher's Fair Use Bills. Rep. Boucher first introduced a DMCA related fair use bill in 2002. The following stories address Rep. Boucher's prior bills:

Comments on the Bill by Sponsors and Supporters. Rep. Boucher stated in a release that "The fair use doctrine is threatened today as never before. Historically, the nation's copyright laws have reflected a carefully calibrated balanced between the rights of copyright owners and the rights of the users of copyrighted material. The Digital Millennium Copyright Act dramatically tilted the copyright balance toward complete copyright protection at the expense of the public's right to fair use".

He added that "The FAIR USE Act will assure that consumers who purchase digital media can enjoy a broad range of uses of the media for their own convenience in a way which does not infringe the copyright in the work ... Without a change in the law, individuals will be less willing to purchase digital media if their use of the media within the home is severely circumscribed and the manufacturers of equipment and software that enables circumvention for legitimate purposes will be reluctant to introduce the products into the market".

Rep. Doolittle stated in this release that "America can and must be a world leader in technological innovation ... This objective is hindered by the provisions in the DMCA that discourage the free flow of ideas and information. The FAIR USE Act removes those disincentives"

Gary Shapiro, head of the Consumer Electronics Association (CEA), stated in a release that "This bill will reinforce the historical fair use protections of constitutionally-mandated copyright law that are reflected in the Digital Millennium Copyright Act (DMCA). It ensures that consumers, libraries and educators will not be liable for otherwise legal conduct and it codifies the important principles of the Supreme Court's Betamax decision. H.R. 1201 provides much needed fair use protection at a time when some in the content industry are challenging consumer rights to make use of lawfully acquired content."

He added that "Fair use is central to innovation because it allows for the invention of new products for the benefit of the public, not just major copyright owners."

Matthew Schruers, of the Computer and Communications Industry Association (CCIA), stated in a release "This bill promises to remedy the worst excesses of our secondary liability doctrines and the DMCA... Instituting these reforms will help to ensure that copyright law protects artists without stifling innovation."