by Communications Associate Kevin Erickson and Policy Intern Cody Duncan

Last week, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet wrapped up the second of a pair hearings focusing on innovation and copyright. Both of these hearings were part of the subcommittee’s ongoing review of existing copyright law; the latest was titled Innovation in America: the Role of Technology.

You can read our coverage of past hearings here and here, and watch the archived video here.

While the prior hearing focused on the creative industries, this one featured witnesses from the technology sector. Appearing on the panel were Danae Ringelmann (Founder & Chief Customer Officer, Indiegogo), Jim Fruchterman (President & CEO, Benetech), Nathan Seidle (CEO, SparkFun Electronics), Rakesh Agrawal (Founder & CEO, SnapStream Media), and Van Lindberg (VP of Intellectual Property, Rackspace). However, there was again little in the way of substantive policy debate, indicating that these hearings have perhaps been intended to establish a civil tone for future inquiries.

Here are a few takeaways from last week’s hearing.

Patent and copyright are different.

Despite the “this side and that side” framework established by both hearings, witnesses and members of the committee were clear to emphasize that copyright and technology need not be in opposition, as each sector is inextricably connected and mutually reliant.

Although the panels were ostensibly about copyright (which is a part of US law governing intellectual property) certain witnesses’ experiences seemed to relate almost entirely to patent law (also a part of intellectual property, but distinct from copyright). This tended to limity any takeaways about how the two sectors interact. Copyright and patent are very different, and while our current laws in both areas are rife with challenges, they are not the same challenges. It’s perhaps appropriate to discuss the issues involving patent law in a hearing concerning innovation, but the goal of establishing a functional, 21^st century copyright regime is not advanced by an open-ended conversation about patent trolls.

Seidle of SparkFun, an advocate of open source tools and hardware, similarly made the case that his company doesn’t worry about defending their intellectual property with legal protections, and contended that “innovation is not dependent on intellectual property.” That can be true of some industries, but it may be a mistake to universalize the experience, particularly because open-source tools and copyright protection aren’t necessarily in opposition. Some of the most exciting new technologies for musicians are open source tools (like those made by CASH Music) that can help musicians share, promote, and sell their copyright-protected work.

Anecdotal evidence needs to be recent to be relevant.

As witnesses repeatedly pointed out, technology moves fast. To keep up, players need to innovate, and to innovate they must experiment. However, these experiments do not always work out the way we would hope. Reference was made to Nine Inch Nails and Radiohead, who both released albums on a pay-what-you-want model. Those releases were important events in terms of the digital music marketplace, but neither ended up defining today’s digital music business model. It’s also interesting to note that, since releasing those albums, both NIN’s Trent Reznor and Radiohead’s Thom Yorke have reexamined this approach. Furthermore, in both cases, the experiments benefited from fanbases established with the artists’ many years at major labels. By over-focusing on a pair of high-profile releases from the previous decade, the panel did not address current realities for today’s working musicians.

Similarly, Ringelmann’s citation of Kevin Kelly’s article on how artists might make money in the future seemed somewhat anachronistic. Kelly’s piece documents a quaint, starry-eyed thinking that was prominent seven years ago (once again, citing Radiohead’s release of In Rainbows!). But since then, the creative industries have evolved further, and we’ve seen business models emerge during that time (including the rise of streaming) that are inherently copyright-dependent.

Exemptions for disabilities need not be controversial.

Jim Fruchterman of non-profit company Benetech used the hearing to tell the story of his Bookshare service — a non-profit tool which provides access to a large library of books for people with disabilities. He emphasized that what allowed the service to function was two exemptions in copyright law: Fair Use, and 17 USC § 121 — “limitations on exclusive rights,” which allows authorized nonprofit entities to create accessible versions of copyrighted books without the need to request permission from publishers and then distribute them exclusively to people with qualifying disabilities.

Copyright makes exceptions to otherwise exclusive rights to better serve the public interest, but for some reason, discussions around creating exemptions to accommodate the visually-impaired or otherwise disabled are treated as hot-button issues. To us, this usually seems unnecessary, as the opportunity costs borne by copyright owners are small. Copyright exemptions extended to services directed at people with disabilities seem like a common-sense measure that artists can get behind.

“Notice-and-takedown” protocols are not universally embraced.

When it comes time to enforce copyright laws online, copyright owners often rely on the takedown procedures provided by the Digital Millennium Copyright Act to request the removal of their content from an allegedly infringing site. These procedures are subject to criticism from both the rightsholders making these takedown requests and the companies that have to field them.

Rackshare’s Van Lindberg expressed frustration of automated takedown requests served up by “bots”; he’d prefer to resolve such conflicts “person to person, business to business.” There’s little doubt that automated takedown requests have resulted in some false positives, where a notice is aimed at clear examples of fair use or links that don’t even include infringing content. But also it’s worth considering why bots are used in the first place: infringement is too widespread for rightsholders to keep up without employing automated takedown (and even these automated tools are out of reach for smaller indie players).

At the same time, it’s important to remember that DMCA “safe harbors” — which protect online services from liability for infringing content posted by users, provided they comply with specific provisions in the law — allows for the development and continued existence of platforms that artists (and millions of others) use every day. It’s safe to bet that the details of how takedowns should occur will be a hot issue moving forward.

New models shouldn’t be universalized or oversimplified

It was good to see that the Subcommittee had invited Danae Ringelmann of the popular crowdfunding service Indiegogo to testify. The service is a fine example of a new technology that provides artists with concrete new tools that allow to them monetize their creativity, creating a new revenue stream that can contribute to an artists’ overall earnings. In fact, we’re in the midst of our own Indiegogo campaign to manufacture posters of our popular “Music & How The Money Flows” infographics.

However, Ringlemann’s testimony displayed a less-than-perfect understanding of how musicians use her service. Ringlemann made the odd claim that crowdfunding new work was “more sustainable” than the sale of copyrighted old work. But funding a new album through a crowdfunding platform isn’t a replacement for lost sales, or a solution to the problem of unauthorized downloading. Most often, it’s an alternative way to raise capital to invest in a new project, which artists can then sell elsewhere, in both physical and digital formats. And very frequently, crowdfunding campaigns offer releases from an artists’ back catalog as rewards and incentives to pledge. In fact, one of the strongest selling points for crowdfunding services is that it allows artists to retain their own copyrights, rather than the recordings being owned by the label that funded the recording, meaning that subsequent sales dollars don’t have to be recouped against debt to the label. Ringlemann’s own company is built on musicians selling their copyrighted work. It’s not inherently “more sustainable” than the sale of copyrighted music — it facilitates the sale of copyrighted music. (And as we’re quickly learning, crowdfunding doesn’t have to be an alternative to traditional industry models; rather, it can augment them.)

Critics of current copyright law are often quick to point to a few instances of success with new business models as grounds for declaring that whichever approach is the new model, making concerns about traditional copyright revenue and enforcement irrelevant. While we applaud any artist who is finding new ways to get paid and any technology service that helps artists do it, it’s important to acknowledge the limitations of new models, and understand how they interact with other revenue streams. Which is why we’ve said time and again that there’s not likely to be one new model that works for musicians.

These companies seemed to be doing fine.

What we didn’t hear was any real evidence that technology businesses are inherently impeded under current copyright laws (at least not this sampling). Instead, we heard about successful innovative companies, built with a range of business models. Sort of like how musicians utilize a range of models.

Overall this was some fantastic civil discourse, hopefully setting the tone for further discussion. And as with the previous hearing, it probably helped that the focus was not on the biggest players, but rather the smaller firms whose voices are too often overlooked. The subcommittee is expected to pick up their examination of copyright when Congress reconvenes this fall. You can bet we’ll be watching closely.