Business Matters: 7 Areas for Possible Copyright Reform in the Music Business

Wednesday's hearing before the House Judiciary Committee's subcommittee on Courts, the Internet and Intellectual Property was a primer of the hot copyright issues to be discussed in the coming years.

The comments of Register of Copyrights Maria Pallante, the lone witness during the hearing, and a lecture she recently gave titled "The Next Great Copyright Act" (a PDF is available at the U.S. Copyright Office's main page), give us a number of topics related to the music business that could be part of the discussion about copyright reform the coming years. Here are seven of them.

Maria Pallante, Register of Copyrights, to Congress: Copyright Needs to Be Updated for Digital Age

-- Performance right for sound recording. Since the subject is hardly new to the Subcommittee, a number of Representatives brought up the United States' lack of a performance right for sound recordings at broadcast radio. "You've been deliberating on that for more than a decade. We've done many pieces of research for you on it." She later called the lack of a performance right "indefensible."
-- The DMCA safe harbors. Pallante told the Subcommittee if it were to undertake a major copyright reform bill, it "should look at the efficacy of the DMCA" and examine how it's working, what the courts have done with it and which parties are being affected. In this context she was speaking about the "safe harbors" that limit a digital service's liability for copyright infringement. Pallante told Representatives they are likely to "hear gripes" from both copyright owners who are burdened with a heavy volume of takedown notices and service providers who don't know how to deal with the notices that aren't accurate.
-- Enforcement. "I don't think we can have a conversation about a 21st copyright law without talking about enforcement, although I think there are some who would prefer that be left off the table." That could mean updating the penalties for illegal streaming from a misdemeanor to criminal penalties, just as the law applies to illegal reproduction and distribution, she said. Independent artists could have "a small claims process of some sort" so that Federal Court is not their only option.
-- Section 115. Music publishers have long been seeking Section 115, the section of copyright that provides a compulsory license for mechanical licenses. The topic did not come up during Wednesday's hearing but Pallante dedicates three paragraphs in her speech to the need for this part of copyright law to catch up to today's digital business models. She notes that Congress considered legislation in 2006 that would have changed section 115 licensing to a blanket-style system, but the bill was not adopted. "It may be time for Congress to take another look," she writes.
-- Orphan works. "The public is so frustrated by the long copyright term that [the problem] is not the term itself but what to do when the rightsholder goes missing," Pallante said in mentioning her top three copyright issues she believes are ripe for reform. The Copyright Office has for a number of years been reviewing the orphan works problem.
-- Statutory damages. "Statutory damages should remain squarely in the next great copyright act irrespective of section 412," she says in her speech "The Next Great Copyright Act." "However, there may be plenty to do on the edges, including providing guidance to the courts (e.g., in considering whether exponential awards against individuals for the infringement of large numbers of works should bear a relationship to the actual harm or profit involved), and finding new ways to improve the public record of copyright ownership."
-- Webcasting rates. The issue is not webcasting rates but the rate-setting standard for webcasters. Rep. Chaffetz, one of the sponsors of last year's Internet Radio Fairness Act, brought up the topic in a question posed to Pallante. The topic is also gets a brief mention in Pallante's speech.