The last time Congress made a major revision to the Copyright Act, "the more advanced 8-track tape was pushing aside the less advanced reel-to-reel tapes in the audio marketplace," Representative Bob Goodlatte (R-Va.) said during a speech last month at the Library of Congress.

That was 1976 — before the Internet, electronic books, and before music and software pirating became big business. These technologies have ushered in complex and unsettled legal issues that affect the public at large.

Goodlatte, the new chairman of the House Judiciary Committee, announced on April 24 he would hold a series of hearings on U.S. copyright law in the coming months and welcomed interested parties to submit their views.

"The Internet has enabled copyright owners to make available their works to consumers around the world, but has also enabled others to do so without any compensation for copyright owners," Goodlatte said. "There are concerns about statutory license and damage mechanisms. Federal judges are forced to make decisions using laws that are difficult to apply today."

Maria Pallante, who leads the U.S. Copyright Office, told the House Judiciary Committee in March that the law is showing the strain of its age. Pallante urged Congress to think about the "next great copyright act," which she said would need more flexibility than ever before.

"As many have noted, authors do not have effective protections, good-faith businesses do not have clear roadmaps, courts do not have sufficient direction, and consumers and other private citizens are increasingly frustrated," Pallante said.

What do Washington attorneys think will come of this push to reform copyright laws? We asked leading copyright lawyers and lobbyists to tell us about they expect and what it all might mean for their clients. Their remarks have been edited for length and clarity.

KENNETH KAUFMAN
MANATT, PHELPS & PHILLIPS

The last major amendments to the Copyright Act since the 1976 revision…were enacted in October 1998, and were the result of a series of negotiations and compromises over several years among the affected interest groups. Less than a year later, Napster burst on the scene.

I commend Chairman Goodlatte for undertaking a fresh review of the copyright law at this time. In an ideal world, Congress could decide key issues that have arisen in efforts to apply the current law to an era in which copyrighted works are created and distributed digitally (sometimes resulting in conflicting court decisions). These range from confirming the scope of the reproduction and public performance rights and of the DMCA safe harbor, to clarifying questions regarding copyright terminations and considering the role of compulsory licenses in the digital age.

It will be more difficult than 15 years ago, however, for the affected interest groups to forge compromises on the key issues, since there are more stakeholders, and greater differences among their positions, than there were in 1998.

HOWARD BERMAN
COVINGTON & BURLING

The U.S. economy depends heavily on copyright-based industries to support millions of high-paying jobs. Our balance of trade would be far worse if not for the value of the copyrighted materials we export.

Our basic copyright laws were adopted nearly four decades ago. They need updating to account for the dramatic changes in technology that have occurred since then. The effort to do so will be difficult because it will engage the interests of millions of both creators and consumers. The impending House Judiciary Committee hearings are important to establish the challenges to copyright protection due to the advance of technology.

The digital world has made the widespread theft of copyrighted material so easy it has become routine, and some now think this type of theft amounts to an inalienable right. Congress can ultimately succeed in updating the law by accommodating new technologies and new business models while still ­protecting the basic framework of the law, assuring accessibility for consumers, and providing incentives for creators and the jobs and economic benefits associated with intellectual property.

JACK BARUFKA & CYDNEY TUNE
PILLSBURY WINTHROP SHAW

The challenge is to find the proper balance between protecting those who create or own copyrighted works; establishing clarity for those who want to use copyrighted works in some fashion; and encouraging development of new technologies. As we have seen from recent attempts to adopt anti-piracy legislation, this goal is not easily accomplished. Nevertheless, it is important for our legislature to try to find that balance.

Congressional hearings on the copyright laws are a good thing and long overdue. So much has changed since the copyright law passed in 1976, and as a result the current Copyright Act doesn’t take into account the many issues that have arisen with the advent of digital media and the Internet. Piracy of copyrighted works is rampant worldwide, and our country’s authors and creators are bearing the brunt of such piracy.

However, adopting legislation that works will not be easy. There are myriad interests at play, and they often conflict. Given all the challenges, and seeing how long it took the recent patent law reform to be enacted, we anticipate that it will be a long time coming before we see meaningful change.

WILLIAM MOSCHELLA
BROWNSTEIN HYATT FARBER SCHRECK

Any new 21st century copyright system must be grounded in those timeless 18th century foundational principles embodied in the copyright clause of the Constitution. Our founders understood that intellectual property was fundamental to a market economy and that securing these pre-existing property rights in the Constitution would increase social welfare. This reflects a long common law tradition that is based on two related concepts — first, that individuals have an inherent right to the fruits of their ingenuity and labor; and, second, that economic incentives foster innovation which benefits everyone.

Recent copyright debates have too often ignored these fundamentals. Policy makers and the public must be reminded that innovation and its resulting economic growth depend on these bedrock ideas. Indeed, there are some areas of current law that ignore these principles. For example, AM/FM radio profits handsomely from the creativity of performers but doesn’t pay them a penny for their labor. Returning to first principles would remedy this and other inequities in the law.

MARLA GROSSMAN
AMERICAN CONTINENTAL GROUP

Chairman Goodlatte’s announcement of hearings to determine whether copyright law is working in the digital age is a clarion call to every creator, every innovator and every person or business that uses copyrighted materials to pay attention to what is happening in Washington. The chairman has specifically invited interested parties to submit their views on what is working with working with copyright law and what could be improved. Now is the time to engage. This process is not going to be quick, and it’s not going to be easy. But the stakes couldn’t be higher for U.S. creators, innovators and the future of the American economy.
 

STEVEN ENGLUND
JENNER & BLOCK

The current Copyright Act is almost 40 years old. It certainly seems appropriate to take a step back from the always-ongoing discussions of the details of specific provisions to consider whether the current act, as it has been interpreted by the courts over the decades, is adequately serving copyright’s important purposes. Technology has changed in ways that the drafters of the 1976 act could not have imagined but, at a high level, many of the issues that proved especially difficult in the 1960s and 1970s remain alive — like treatment of new technologies, television retransmission, statutory license royalty rates and copying by noncommercial users.

As to each of these, creators still want and deserve fair payment for use of their works, and some users of their works want to pay less than copyright owners might ask. Any broad examination of the Copyright Act should focus on the situation of creators, because copyright’s purpose is to foster artistic expression.

PAUL FAKLER
ARENT FOX

There is little doubt that U.S. copyright law would benefit from the proposed general revision process. Advances in technology used in the creation and distribution of copyrighted works have made such ground-up re-writes of the statue necessary several times — every 40 years or so, since the first Copyright Act was enacted in 1790. The last such process began in 1955 and resulted in the enactment of the 1976 Copyright Act.

There have been many changes in the ways copyrighted works are created, distributed and used, most notably involving computer networks and other digital technologies, which could not have been anticipated during the last revision process. Application of the existing statute to these new technologies sometimes yields undesirable results, which upset the crucial balance of interests inherent in the copyright law.

As the new revision process moves forward, it will be crucial for companies to participate if their businesses involve copyrighted works. Otherwise, those stakeholders’ interests may not be considered in crafting the new law, with long-lasting and potentially adverse results.

Devising an effective strategy for participation requires deep technical and historical knowledge of the Copyright Act, as well as substantial experience working with Congress and the Copyright Office.

CHRISTOPHER WRIGHT
WILTSHIRE & GRANNIS

It is vitally important that Congress fix the standards governing how the Copyright Royalty Board sets rates for the use of music. The current system provides a windfall to the record labels and harms the public by holding back the development of webcasting.

The basic standard for setting rates is a good one: The board is supposed to use agreements negotiated in the market as a guide whenever possible. But two provisions conspire to make that seemingly sensible standard unreasonable. First, the statute gives SoundExchange antitrust immunity so that it can negotiate on behalf of all the record labels. That provision thus creates a legal cartel with authority to fix prices. Another provision allows either party to a negotiated agreement to decide that it cannot be used by the board when setting rates.

As a practical matter, that means SoundExchange can (and does) negotiate high rates with broadcasters, who wish webcasting would die in the cradle, and make those agreements available for use by the board. But SoundExchange also negotiates more reasonable rates with some parties, and blocks their availability. This gives SoundExchange extraordinary power to manipulate the webcasting market.

Todd Ruger can be contacted at truger@alm.com. Andrew Ramonas, who contributed to this report, can be contacted at aramonas@alm.com.