ISSUE 18.3.F • 2021-01-25
The AskWoody Newsletter

In this issue

LEGAL BRIEF: Schrödinger’s Bill


Additional articles in the PLUS issue

LANGALIST: Excess heat during laptop recharging?

PUBLIC DEFENDER: Hackers are running your smart home

BEST UTILITIES: Freeware Spotlight — Immunet 7

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Legal Brief

Schrödinger’s Bill

Max Oppenheimer

By Max Stul Oppenheimer, Esq.

The recently passed Consolidated Appropriations Act includes provisions that should be of interest to those involved in e-commerce or whose use of the Internet involves copyrights.

In March 2010, when House Speaker Pelosi told the National Association of Counties that we needed to pass the Affordable Care Act in order to find out what’s in it, few saw the humorous reference to one of the most famous parables of modern physics:
Schrödinger’s cat.

For those who left physics behind in high school, physicist Erwin Schrödinger observed that it was impossible to determine an atomic particle’s location and velocity simultaneously because the act of observation changed one or the other; therefore the particle existed in multiple states until observed. He suggested an experiment in which a cat was inside a box and was both dead and alive until an observer opened the box to find out.

Congress fully embraced that principle in the Consolidated Appropriations Act (“the Act”), passed in the closing days of the current session. Weighing in at more than 5,000 pages and distributed in final form less than a day before voting (spurring bipartisan complaints), it has now become law — so we can now find out what’s in it.

Because the Act was an appropriations bill, one would expect it to deal with federal spending. But if we learn nothing else from Schrödinger, we should learn not to assume what is inside boxes — we need to open them. And it turns out that the Act includes provisions, not obviously related to the federal budget, that should be of interest to those involved in e-commerce or whose use of the Internet involves copyrights.

On page 2,539 of the Act, we find an amendment to Section 211 of the Copyright Act, amending Section 113 of Title 18 (the federal criminal statute). The language Congress chose makes it unlawful to “willfully” and for “commercial advantage” or “private financial gain” provide a digital transmission service that is primarily, and without other significant purpose, designed for the purpose of publicly performing works protected by copyright. We need to wade through some rather dense definitions to figure out what is being changed (and we’ll need a court to interpret it before we know what it means and whether it’s constitutional), but that certainly sounds like it’s directed to streaming services.

Running afoul of this prohibition can result in prison terms of three to ten years, depending on specific circumstances. Among the second-order boxes that will need opening is determining how this will interact with the “fair use” provisions of Section 107 of the Copyright Act (“criticism, comment, news reporting, teaching …, scholarship, or research, is not an infringement of copyright”).

On page 2,544 (and running for another 60 pages) is another surprising use of the term “appropriation”: the creation of a Copyright Small Claims Board. The goal appears to be setting up an inexpensive forum for resolving copyright infringement claims up to $30,000. On a quick read, this sounds like it would be of use to small copyright owners up against large infringers, but before celebrating Congress’s extending a lifeline to startup companies and independent artists unable to fund litigation against large Internet companies, read on. On page 2,556 it turns out that participation is completely voluntary — all parties must agree to participate.

Is it likely that an Internet giant with several billion dollars in the bank will jump at the chance to save a few dollars by agreeing to the simplified procedure? Or will they opt to stay in the federal court system, where their dollars can buy delay and perhaps even turn a battle for justice into a war of attrition? And even if the parties have agreed to participate, the program does not do away with the court option entirely — decisions of the Small Claims Board can be appealed, although the grounds for appeal are limited (page 2,600).

Once again, we’ll need to wait until someone opens that box so we can see whether the system will be used to resolve copyright disputes quickly and cheaply — or used, instead, to add another hurdle for small copyright owners to clear. It will be a bit of a wait, too — the law does not go into effect until the Register of Copyrights sets up the program (page 2,604). The bill asks the Register of Copyrights to do that within a year but allows for a 180-day extension. A year may not seem like such a long time, but that year will only be the beginning. Parties dissatisfied with how the Register sets up the program will, of course, have the option of challenging the program (and the Register’s rules) in court.

If you are still optimistic that help is on the way for Internet Davids up against Goliaths, consider one piece of copyright history. In 1976, Congress revised the Copyright Statute. Computers were just making their way from dedicated facilities onto desktops when someone convinced Congress that computer software posed a copyright problem: loading a program from a 5-1/4″ floppy disk into RAM (remember, these were ancient people) involved making a copy (or derivative work). Congress feared a software company might sell a user a program — and then sue the user for infringement when they tried to run it (which would require loading the program into their computer).

I have found no evidence that this ever occurred, but in order to keep it from happening, Congress included Section 117 in the 1976 Copyright Act. That section provided “it is not an infringement for the owner of a copy of a computer program to make … another copy or adaptation of that computer program … as an essential step in the utilization of the computer program in conjunction with a machine….” Software companies quickly avoided Section 117 by licensing, rather than selling, software (so the user was no longer “the owner of a copy”), but that’s beside the point.

The point is found in the legislative history of Section 117, House Report No. 94-1476: “[It] has become increasingly apparent that in one major area the problems are not sufficiently developed for a definitive legislative solution. This is the area of computer uses of copyrighted works…. The Commission on New Technological Uses is, among other things, now engaged in making a thorough study of the emerging patterns in this field and it will, on the basis of its findings, recommend definitive copyright provisions to deal with the situation…. Since it would be premature to change existing law on computer uses at present, the purpose of section 117 is to preserve the status quo.”

That was in 1976. The status is still pretty much quo.

(If you’d like to help, the Act authorizes hiring three full-time Copyright Claims Officers and two full-time Copyright Claims Attorneys. Job requirements are listed on pages 2,546 to 2,549 and, fortunately, do not include a requirement of having read the bill.)

The Act has other provisions that could impact Internet commerce and intellectual property in general. For example, on page 2,606 we find the Trademark Modernization Act of 2020. And there are another 3,000 pages full of potential cats in all sorts of undefined states until we look at them.

Questions or comments? Feedback on this article is always welcome in the AskWoody Lounge!

Max Stul Oppenheimer is a tenured full professor at the University of Baltimore School of Law where he teaches Business and Intellectual Property Law. He is a registered patent attorney, licensed to practice law in Maryland and D.C. Any opinions expressed in this article are his and are not intended as legal advice.

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